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Politics What is happening????

Discussion in 'Tilted Philosophy, Politics, and Economics' started by pan6467, Apr 23, 2012.

  1. ASU2003

    ASU2003 Very Tilted

    Where ever I roam
    The only problem is that it is very hard to argue against the improvements to the country that corporations have done, even in the past 30 years. And even the 'small' businesses like Apple and Microsoft in the 80s, couldn't scale up and produce the vast demand for their products had it not been able to form a large corporation... Now, if the software, hardware, music, cell phone, Office software, etc should have been broken up into smaller companies like what happened to AT&T... well, I don't know.
  2. pan6467

    pan6467 a triangle in a circular world.

    The problem you present is when Reagan through his wisdom and "trickle down economics" de regulated everything, buying frenzies occurred. Leveraged buyouts, mergers heavily financed, etc. Allowing the music business to go from like 48 different labels to basically 4. Would some of those 48 have failed on their own? Probably, however, Warner, BMG, Columbia (CBS) and MCA (now Universal) bought up Chrysalis, Island, Elektra, Mercury, Sun, Pye, Arista, Atlantic, Motown, and so on. In doing so they released many many acts and condensed labels, that's one reason we have homogeneous music today. Same with tv networks and movie studios, that had been split up in the 60's due to regulations. Then Sony bought Columbia Studios, Paramount was bought by Viacom and later they bought CBS from Westinghouse, Fox was bought by News Corp, Capital Cities ABC was bought by Disney, NBC was the only one left standing for a long time (owned by GE) and now they are owned by Universal/Vivendi ....

    Deregulation took away the laws that made it so companies could not own a newspaper, tv station and radio station in the same city, to protect us from monopolies in the 4th estate. Gannett came out with USA Today and Reagan deregulated the FCC laws, so now we have monopolies on the news again. Time owns most magazines even DC comic books and what print magazines they don't own News Corp owns.

    There was also the laws/regulations that local stations (TV and Radio) along with newspapers had to have a certain percentage of air time designated for locally produced shows and equal air time (which meant for the 3 hours Limbaugh was on, a station had to supply 3 hours of opposing views. Which now as we know Clear Channel comes nowhere near that and as for local shows they pipe most of it in from satellite. They also go through cities where they may have competitors that refuse to sell to them and cut their ad prices so that the competition can't make a profit and lose money.

    It's why Con-Agra can own just about every top selling product out there (try to find a margarine that isn't owned by Con-Agra) and what they don't own, Kraft does (try to find a sandwich meat that isn't owned by Kraft/Nabisco) except chips which Pepsi owns Frito Lay and Yum restaurants (Taco Bell, Pizza Hut, Long John Silver's, KFC).

    Even candy is monopolized by the big 3 M&M, Nestle and Hershey (by the way look who owns the trademark on KitKat Bars or Reece's yet licenses those brands out to Hershey. So feasibly, one could say there are only 2 big candy companies. One of which is seriously into other foods, beverages and so on.

    All these monopolies mean 1 thing, they are "too big to fail", so profit and loss means NOTHING to these guys. Thus they can outprice any competitors. Try to start up a candy company and see all the red tape you have to jump through and once you do that find a bank willing to loan you the money to start it up. For that matter try opening up any business and see the red tape you have to go through that is there to protect the monopolies that are in place. Then find a bank willing to loan you money. I know even back in '95 when I bought my pizza place, I never would have gotten loans to buy it even though at the time my credit was spotless. I had to pay double for product than Domino's, Little Ceasar's and Pizza Hut because they owned their own distribution and could control their prices. I had to go through a smaller distributor, who in turn had to go through smaller wholesalers, at times I had to go to Sam's Club and buy needed product even though it was inferior to the product I would get from the wholeseller, simply because my one little store in the middle of nowhere might be out of their way that week and they wanted to charge me extra for the "trouble" of going out of their way to deliver to me.

    No media lowered their ad prices for a start up and printers were doubly expensive because there was just me, no other stores to share the cost with. It was definitely hard, but I did it. I made a better product and kept great community relations and relied on word of mouth.

    Today, I don't think I could do it, because the independent wholesellers are gone everything is Sysco now and they don't like dealing with stand alones. There's McClane but they are almost exclusively C-Stores.

    Papa John's was able to do was start with big money, buy stores right by Domino's, and Papa John Schlatter was able to buy his own distribution networks.

    That's just one example of what deregulation does, it protects the big boys and slits the throats of the mom and pop stores. I'm not saying we need to regulate the pizza industry, BUT I do believe we need cost controls so that a start up one store has the same chance as the big boys. That way PRODUCT can win and not who is bigger and who can offer the cheapest deal yet not have the better product. And it is that way in EVERY industry.

    There is no protection for the small business, even Wal*Mart, Target, Home Depot, Lowe's, Pep Boys and so on can crush local small businesses due to the volume the sell. Wal*Mart can offer Pepsi 2 liters at $1 because they can contract to buy a million 2 liters to stock all their stores. Mom and Pop can't offer Pepsi that because they can't sell that amount. There used to be associations and groups that you could join to help ease the costs like Ace Hardware, IGA (Independent Grocer's of America), Potato Chip/ Snack Food Association.... but even then you still can't compete. Simply because no one cares if they fail and the banks don't care because the interest rates are high so that if they do fail in 5 years the bank has made a profit from the money it lent or the loan was sold to a hedge fund and became part of a junk bond.
    • Like Like x 1
  3. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    This is a good example of the companies manipulating and pulling fast switches for their own gain...
    And hoo-boy, do I ever have to deal with insurerer's games.
  4. pan6467

    pan6467 a triangle in a circular world.

    This is an example why we are hearing doctors going bankrupt, patients can't pay the "deductibles" and insurance companies pay the bare minimum. Doctors' not only have extremely high student loans, but also have extremely high malpractice insurance rates. BUT don't bring in talk of "socialized medicine" because then you are a commie socialist who is plotting the downfall of American medicine.

    And as more bad meds get pushed through the FDA and then 5 years later found to cause serious problems and thus get sued, don't talk about how it is big pharm's fault it is the trial lawyers to blame.
    Last edited: Apr 24, 2012
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  5. Aceventura

    Aceventura Slightly Tilted

    North Carolina
    The fundamental problem with your view starts with the above. Reagan supported simplicity. Simplicity is pro "little guy", both consumers and small business. Corporations serve what is in the corporation's interest, once they get big, they fight to control market share and they will do it by restricting competition. Many regulations are in place simply to serve that purpose alone. As a response, if a corporation no longer has government to help with restricting competition, the next step is to control market share through buying the competition.

    You may have noted that Facebook recently acquired Instagram. Instagram was a potential threat to Facebook, so they bought it. Facebook is following a typical pattern, at a hyped up speed. Now their number one goal is to control their market. As consumers we need to respond to keep our options open and to prevent being manipulated/exploited by a company like this.
  6. redux

    redux Very Tilted Donor

    Foggy Bottom
    You're all for keeping it simple for the "little guy" consumer/small businesses, but not for voters (primary "little guy" minorities and seniors) exercising their Constitutional rights. (cross discussion post).

    *scrtaching my head"
    Last edited: Apr 24, 2012
  7. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    One of the functions of regulation is to hold business entities to a morality that would otherwise be absent in a truly free market. Regulations are often restrictions on the basis of ethics. Pure capitalism is merely the use of capital to make a profit. Entities operating in a marketplace that is unregulated or under lax regulation can and often will exploit market participants. The exploited sometimes include other holders of capital (investors or other companies), but all too often those who are exploited the most include consumers and workers. Much of the regulation that came about in the 20th century was in response to unethical business practices that harmed consumers and workers for the most part.

    Reagan's deregulation avoided many of these. However, his greatest accomplishment was to unhinge the financial sector. His policies opened the door to fiscal irresponsibility. It made it easier for people to take on huge risks on both sides of the lending ledgers. He created a financial environment opposite that of Canada's. The differences are now quite clear, and the world has learned its lesson. Well, I think America has. It's still yet to be fully realized.

    This is a useless example to look at as consumers. Facebook users aren't Facebook's customers; they're the product.
    Last edited: Apr 24, 2012
  8. ASU2003

    ASU2003 Very Tilted

    Where ever I roam
    Outsourcing and the desire to change jobs every 5 years or so to 'move up' has led to some trust being lost in the workplace and too much change for people to be able to count on their job being there a few years from now.
  9. pan6467

    pan6467 a triangle in a circular world.

    That's another issue I have, low waged jobs or outsourcing so that the very rich can make more and yet in the process you are destroying the tax base and by necessity you will have to raise taxes on the rich and the corporations. You can't tax the people making low wages much more because you are in turn hurting the consumers disposable income, what little they have. Hence, to have a housing industry and a car market available, you have to lower credit requirements and give out high interest loans to people that may not afford the loans, just to keep those 2 industries afloat. Therein lies the rub... you will end up with another Freddie Mac/Fannie Mae problem, bad loans trying to keep industries afloat. Then we'll have to do another bailout and go in a circular pattern until we bring jobs home and raise wages to the point where people can afford the housing/car credit that is needed to keep the economy going. Until then the rich and corporations whether they like it or not will be paying more taxes because of their greed and will be the cause of their own demise.
  10. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    I wish I was able to find more recent numbers, but I'm not sure they'd be much different anyway.


    It's common to mischaracterize the overall impact of outsourcing by focusing on it exclusively. The fact is that outsourcing is an unavoidable reality in a modern global economy. It's easy to point to outsourcing in the U.S. and say, "Look at all the jobs we're losing." Sure, it may be the case in industries such as manufacturing (which, by the way, has gone through a bit of recovery of late). However, the overall economy may in fact be benefiting from the shift in jobs. Though manufacturing jobs have suffered, there have been substantial job gains in other industries to more than make up for it.

    The issue isn't whether America can "get the jobs back." (Which isn't bloody likely. You can't compete with the manufacturing wages in many parts of Asia.) The issue is whether other jobs are created (they generally are). The issue is whether the American labour pool has access to adequate resources for education and retraining in other jobs (I'm not so sure). The issue is whether barriers to these resources are eliminated either by the economy at large (education and retraining incentives for high-demand jobs) or the government (social programs for workers in need).

    If there are problems in the American economy that I'd be concerned about, it's whether American workers are being given the opportunity to keep up with the changes. Remember: Manufacturing is only one industry of many in the U.S., and many developed nations have gone through this shift away from manufacturing and towards services. Not all of them can be Germany; certainly not the U.S.
    Last edited: Apr 24, 2012
  11. pan6467

    pan6467 a triangle in a circular world.

    Thank you Baraka, I appreciate the article and I have heard this elsewhere. The issue then becomes pay. Service jobs do not pay what the manufacturing jobs did, nor are the benefits as nice I just read an article that said the amount of lawsuits from employees suing their employers for underpaid overtime has gone up. I've been in that situation, where the employer will tell you to "clock out, but stay and work."

    We may be importing more jobs but the pay is still not there and leading us to a paycheck to paycheck society that should not be eligible for credit but will be to prop up the housing and automobile industries. I don't change my above statements or thinking except I will give that jobs are coming but without livable wages.

    I'll give another personal experience. I applied and was told I tested well for a call center job that paid $9/hour which wouldn't be bad for just me (even with child support). However, when my credit report came back they pulled the offer, during my illness and recovery child support and student loans along with Verizon really screwed my credit over, making me sound like a deadbeat dad and someone unwilling or unwanting to fulfill my obligations. which is not true. the day AFTER I got out of the hospital I went to Verizon with money to pay my bill, they refused saying they could not take it due to having sold the account to creditors. As for student loans, I repeatedly asked for forms to show my illness and legal disability and never got the forms. Child support, well, it's child support and they don't care.

    So now, I have to go to a temp job some 50 miles away and work mandatory overtime with shifts non stop standing and continuously lifting over 50 lbs. When I went and was tested for disability, I received the health bill that standing for 30 minutes would be my physical max and lifting 25 lbs continuously would be my max. BUT due to the child support demanding that I take any job offered, I'll have to work this and see what happens. perhaps I can handle it, perhaps it may make matters worse and force me to re apply for permanent disability, which I can still do. The closed period disability I took was me saying, yes, I was sick and yes I have limitations however, I feel I can work. So, now it is just a matter of actually testing what I can do.

    I could have been like many out there and tried to take full permanent disability, but I chose not to. Now, child support is totally disregarding the government's testing and forcing me to take whatever job is offered, even if it may cause physical problems. There is no appealing child support in this aspect, they want me to pay and come Hell or high water they will find ways to make me pay. Whether I can or not.

    $9/hr for a temp job 100 miles round trip with $250 + 33%/for each month unpaid in arrears from when I was sick + child support currently owed... will not leave much for me to live on, unless gas prices take a serious drop. I'll also make just enough to make sure I am above any government help. Then student loans are going to want their share.... so I may as well file for permanent disability where child support and student loans will be taken care of.

    It's a bassackwards system. In May, i go before the court and ask for the arrearages to be taken off since I legally could not work. I will also bring up the fact that I was denied my legal right to visitation by the mother while I was sick. How can you force someone to pay money they don't have and legally could not have made? Like I said, it may be in my best interests to just give up and file permanent and say fuck it. I don't want to, but I also don't want to drive 100 miles a day work 12 hours 5 days a week and have no money. I truly have no idea what the solution is. Do I do what is in my best interest to live or do I live on absolutely nothing and work my ass off? For me, it's a tough call.

    I am just thankful I still have a mind and am alive with relatively little damage done, except for the left side of my body and some memory/psychological issues from having had 4 brain surgeries.

    All I can do is offer up my personal experience and lay my cards on the table. Some may ridicule me, but unless they had 4 brain surgeries and have experienced what I am going through and know what this Hell is like then they have no right to judge me. I've been judged enough these past 2 years over all this.
    Last edited: Apr 24, 2012
  12. Joniemack

    Joniemack Beta brainwaves in session

    Reading, UK
    I definitely have to agree with pan on this one. Service jobs may be where the action is but it's not where the pay is, unless you happen to be a high-priced call girl.

    From the "be careful what you ask for" files. Manufacturing jobs will start trickling back in - in fact they already are. What they look like pay wise on re-entry is not what they looked like when they left. 2 years of high unemployment, Asian competition which has successfully leveled out the playing field at the low wage end, and concerted and effective efforts on the part of Republicans to disarm unions has provided multi-national companies with an US workforce amenable to working for far less.
  13. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    I've found that people don't pay for how hard you work.

    They pay for 2 things...what they can't do & what they don't want to do.

    Your pay rate is based on what the market is for it.
    So, if you're doing something that many can't do, and they don't want to deal with...and there's a big market for it. Then there's good pay.
    For example, Computers. The more skilled you are, the more they pay. The less people available the more they'll pay. The more need, more pay.

    Doctors, lawyers, plumbers, etc...also follow the same lines.
    Scientists...very cool, very skilled...not a big market for them. Not paid much.
    Executives...professional BS artists, supposedly trained to make money decisions...BIG market, lots of competition.

    Problem we have in this environ, for the most part, for most people...no matter what income they bring in.
    There's so many different ways that will suck you dry...that the choices you make are what you WON'T do, or DON'T have.

    And also, you're spending so much time keeping track of all the different things that they are doing to suck you dry,
    you don't have time to retrain, de-stress, enjoy or different ventures that might take you to a different level.

    At least this is my experience with it.
    Last edited: Apr 24, 2012
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  14. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    pan6467 & Joniemack

    Um, services make up more than three quarters of your economy. It's easy to think of "retail and restaurant jobs" when people say "service jobs," but services include a whole whack of shit. Do you honestly think the lost manufacturing jobs have all been replaced by retail and hospitality? Doubtful. Many have, I'm sure, but the economy is more complex than that.

    At a glance, the retail and hospitality sectors consist of ~30 million jobs, and I'm sure many positions within those sectors have decent pay. Not everyone is an entry-level and/or frontline wage slave.

    And what about the rest of the economy? What about the high-growth services? Is America empowering its worker pool to rise to the demand? That's the issue.
  15. ASU2003

    ASU2003 Very Tilted

    Where ever I roam
    Outsourcing is great is you run a medium to large business, or are a shareholder. The problem is when you are in the workforce and you now have to compete for your job with people who can live on a lot less in their culture. Over here, we still have to compete with the successful people here.

    Let's say in 1970, you had a factory worker making $30,000/yr, and a manager making $100k. They both had decent lifestyles. Now in 2012, the factory worker is unemployed (or had to go back to school and incurred more student loan debt) making $0, while the manage is now making $220k.

    Detroit's Unemployment Rate Is Nearly 50%, According to the Detroit News
    53% of Recent College Grads Are Jobless or Underemployed—How? - Yahoo! Finance

    It isn't just outsourcing though, computers are also making things more efficient and eliminating the easy jobs. And the 'Free' economy isn't helping things out either, although I do like it and appreciate it.

    Harvard Library: subscriptions too costly, faculty should go open access

    And then you get into the value of the dollar, how much people 'should' be paid if true inflation was taken into account, the price of oil and other items that people demand keeps going up, the price of other things is collapsing because there are so many people trying to sell it with no price controls... It is a mess
    --- merged: Apr 24, 2012 at 10:22 PM ---
    That is my experience too, too bad I wasn't told this in junior high or high school.

    I'm not sure computers is the best example, but it is true in any field.

    Instead of finding a job because of the money or it is your passion. It is better to find a job that you are good at, and can do easily.

    And I also agree with the complexity of modern life and trying to avoid all of the little fees and expenses (that probably make someone else have a job), but make it so you can't save enough.
    Last edited by a moderator: May 1, 2012
  16. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Well, I expanded the samples while you were quoting me.

    I've found that each person has their "knack", something they are good at that others just don't do as well.
    If people learn to leverage that "knack", then one they will more likely find something they enjoy, two something people will pay more for.
    For example, me...I went to school for Physics...but I connected with a Computer vendor, I found I was good at computers.
    Then I wandered into Databases, and I found I had a "knack" at making things faster. Now I'm a Optimization Specialist.
    It's not my title...but it's what gets me in the door, what they are looking for and what gets me more than others.

    If people would stop listening to what others tell them they should do in careers, or stop trying to "stay in their field", or underestimating themselves,
    Then they would have more to gain over the long run...and maybe be happier.
    Or if you have to deal with all these damn vendors trying to rip you off, at least you have a bit more to spare to get over the hump and less stress.
    It's like I've always said, "If you have to deal with the bullshit, then you might as well get paid for the bullshit"
    'Cause it's all bullshit.

    In the end, these days it looks like you have to get over a certain threshold of pay to make yourself comfortable.
    And only then, can you leverage your pool of money...your liquidity, against those vendors who want your larger investment.
    They are less likely to rip you off, because they don't want to lose you. You get extra benefits too.
    Ever notice how companies treat "certain" clients, they bend over backwards.
    You've just got to figure out, how to make it happen.

    Problem is, I'm too exhausted outside of work and occupied by family, chores and vendors...to even take advantage of anything.
    It's like you either have to be obsessive, where you don't let anything slide...and you either drive everyone crazy or become an asshole.
    Or you have to hit the energy lottery, delve deep, pull something out of your ass.

    Personally, I think if I could simplify, get all these damn vendors to stop trying to rip me off...I might have some flexibility to engage more.
    With energy, emotion & money.

    Right now, I'm just playing whack a mole.

    I think government doesn't even have to regulate more.
    They really just have to hit them harder when they do something wrong.
    When government, finally figures out that companies will stop, when what income they bring in from the bad is not worth the fine.
    You've got to hit them hard.
    And PLEASE make it criminal.

    If they don't have to admit any wrongdoing.
    And you've fined them 200 million one time, when they've brought in 2 billion annually.
    You think they are going to stop?
  17. Joniemack

    Joniemack Beta brainwaves in session

    Reading, UK
    That's true... now.. but just because the service sector is where the jobs are, does not mean that that their wage potential is equivalent to what manufacturing jobs paid those workers who have been forced to make the switch (and they are basically who I'm referring to). A skilled machinist forced into the position of having to take a customer service job fielding complaints from health insurance clients is not making what he made when he enjoyed full time employment at his manufacturing company.

    There are higher end employment opportunities in service industries which provide excellent salaries to their employees but those opportunities would have been there regardless and would remain out of reach for the average manufacturing worker needing to find alternate employment. Retraining or higher education is the only path to reaching them. Unless I'm somehow overlooking a sector of the service industry which pays decent wages and does not require the machinist to be retrained.

    It depends whether the employee is management or hourly. The retail and hospitality business is notorious for keeping hourly workers under 30 hr/week to avoid paying them the health benefits they pay their salaried managers or, god forbid, having to pay them for overtime worked. Large numbers of employees on payroll lists but the majority of them are part timers.

    Scenario: I've been laid off from my manufacturing job. I'm collecting unemployment insurance. There's an opportunity at my local community college which will allow me to get an Associate's Degree or a Certificate in another field. Some of the courses are at night, but most are scheduled during the day. If I sign up for these courses, I could/would lose my unemployment compensation due to the fact that I am not available for work while I'm attending classes. Even if I could manage to do both, they will choose not to make an exception for me and will deny my claims as long as I am going to school.

    So no, I don't see any empowering. That's the problem
    Last edited: Apr 24, 2012
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  18. pan6467

    pan6467 a triangle in a circular world.

    While I do think the pay rates are edging up slightly but the jobs are getting harder to get (i.e. credit reports, distance, less benefits and through temp agencies). How does that help someone in my situation as described above, where I was denied a local job due to poor credit beyond my control and forced to take a job that physically I may not be able to handle nor afford?

    As I stated, many people would say screw it I like where I am and I'll just keep looking or refile for permanent disability and have the government take care of me. I don't want to be that person, however, I don't want to work myself into the grave and not make anything either.

    I know what I am very good at and that is addiction counseling. The problem there is I need a degree and because of my health problems causing me to get behind on student loans, I can't get loans to go back and finish my degree. $29,000 in VA loans is not going to get me a decent house to have a sober house. Working right now, poses the problem that I will make on paper enough to NOT be eligible for any government assistance, so as I stated above, how do I pay rent, buy food and pay utilities and my meds when child support, student loans and gas will have me losing money in reality? I can see why people get on the unemployment cycle where they feel they will lose money if they take a job.

    No matter how I look at my situation, I feel screwed because I got sick and tried to be honest in my recovery, when I could have not done the exercises on my own and pushed myself to get off a walker and try to be "normal" again. I could very easily "relapse" and live off the government teet for the rest of my life or at the very least get disability benefits to go back to school and get my degree and find grants to get the house I want. I could very easily do that, where before in my mind that was never an option it is becoming a reality that option may be all I truly have, given the child support and student loan debts I face, IF I decide to work.

    For me it's a catch 22 and the weights are starting to fall on the side I didn't want to take.

    We bitch about people taking advantage of the government but I can see given my situation that sometimes there just is truly no choice. Work and starve while physically killing myself OR stay on the government teet and not worry about loans and child support or my health.

    We as a society need to recognize this and find ways to make sure those wanting to work aren't going to lose money while doing so. I can very easily go in today to my "new" job and "freak out" and say I can't do the work even if I can, because I know I will lose everything. And why work my ass off and risk what health I do have for no benefits and to actually be losing money? My ONLY hope is that in May, the court sees this issue and repeals the arrearages (33%/month missed) on my child support and I find someone who can help with student loans. I seriously have no idea which way to go. I know I am NOT the only one in this situation. I just maybe the only truly honest one in speaking about it and not hiding behind "pride".

    I'm sorry to me there is no pride in working a job that will be physically taxing, where I will be losing money. As opposed to staying where I am taking advantage of the system ( i.e. getting out of child support and student loan obligations and disabilities) and working to get a degree I want, while not working myself to an early grave.

    What is the answer?
  19. ASU2003

    ASU2003 Very Tilted

    Where ever I roam
    Speaking about finding a job or creating a job, it is very hard to start a new business and be successful at it. Part of that is that you need to cover all of the expenses (including health insurance) prior to selling anything. But, even after you are in business, you still have to make $100,000/year before taxes to make it worth while. If you need any other employees, they will need to bring in $200,000 in sales in order to cover their salary and taxes, and expenses.

    That is where products that have monthly/yearly fees shine. But, if you wanted to write a book, you would have to pay your expenses for a year or two, pay to publish it (well there are companies that will take the risk if they will make money), and then will need to sell enough books to cover your living expenses for the next few years. If you are making $10 profit on a book, you would have to sell 10,000 each year... And it is hard to give up your 9-5 job to take a gamble at making it big. (The book idea would be 4-5 on my list of business opportunities to try now)

    Sure, it is possible to live on less, but school didn't cover any of this.
  20. the_jazz

    the_jazz Accused old lady puncher

    ASU2003, your math is fuzzy at best and fluff at worst.

    But of COURSE it's hard to start a new business and be successful. That's why most start-ups don't turn a profit until Year 3 - or later! But having done a start-up, I can tell you that you do NOT need to cover all expenses prior to selling (or your first transaction, which is a better term). Nor do you necessarily need to pay for health insurance, especially since lots of folks have the option through a spouse or another gig.

    As far as your $100k/year number, is that gross income? Gross profit? Net profit?

    As for other employees, $200k in "sales" makes zero sense without knowing what that represents. If $200k in sales generates a net profit of $100k, then you're way off. Without knowing what margins you're using with these numbers, they don't have any basis in fact AT ALL. If $200k in sales of Good X costs $25k to manufacture and $50k to ship, that assumes a salary of about $82,500 for the new employee (using my quick employer math) with no profit margin built in. That seem outrageous.

    My business grossed $100k in the first year, $175k in 2 and $350k in 3 (when we sold it). It was profitable for all 3 years. We had employees that were 1099'd, and they by no means required $200k in sales each.