Have you looked at your 401k or other retirement accounts lately? Has it pissed you off yet? Over the past 60 days most have dropped by 10% or more. Do you know what has caused this drop? History.
History tells us what the future will look like.
If you look at history, the fed raised rates consistently from 2003 through June of 2006 and in August of 2007 the economy crashed and it was as big, if not bigger, than any other in the history of our country. Historically when the fed raises rates for 3 straight years or longer a crash comes inside of that decade. Since 2017 the fed has raised rates 7 times and is projected to raise rates at least twice in 2019. That’s 3 straight years.
Does that mean a crash is coming?
The answer is yes there is absolutely a crash coming. But there is always a crash coming. That’s like saying will it rain next month? For most of the US the answer would be yes it will rain next month, but who could be exactly sure. Weather forecasters take educated guesses and their guesses get better as the date gets closer. But I’d venture to say you have an umbrella in your car in case it does rain because it’s smart to plan ahead.
You want to do the same with your finances. You don’t have to be a casualty if and when a crash comes if you can do a couple things that will change your finances forever.
- You need to have a constant prequalified lead flow in your business. If you are dependent on low bid work in a downturn you are in deep trouble. Low bid work is dependent on financing. And when financing slows there are less jobs available so the pie gets much smaller. If you are playing the low price game you are headed for disaster when the downturn happens. With constant lead flow you are targeting clients who have the means and the ability to hire you for your products and services and because you are targeting them. You get to choose the price because they are not out looking for other bids. Incoming leads create high profit margin jobs enough so that you can isolate a portion of those profits to share with the owner(s), eliminate debt and build reserves.
- You need to have a large percentage of your money in cash flowing assets like real estate and other businesses. At least 50%. You might be saying, I don’t have a lot of money to buy real estate much less other assets. If this is the case you need to do a better job at lead flow in your business. Lead flow creates highly profitable jobs which if you have some discipline and don’t spend it all, you will have enough to invest in other things. During the last downturn my manufacturing company was in big trouble. Not only did I have an employee embezzle a half a million dollars from us from 2007 through 2010, but by 2010 our business dropped by 50%. In from 2009 to 2010 we dropped from around 8 million in sales to 4 and my company incurred massive amounts of debt during that time. Eventually that sent my company into bankruptcy. Thankfully my wife and I had real estate, enough so that we were able to sell some, have spendable income from others and ride through an extremely tough time. If you don’t have a parachute I suggest you get one ASAP.
- Seek knowledge from those who can help you implement both #1 and #2. We are not hard to find. Knowledge is everywhere but you must seek correct knowledge. Once you have knowledge you then go to work with that knowledge in your business. What you learn might not be exactly applicable to your business but you are a smart person. Take the information and apply it to your business. You should be spending at least 30 minutes per day on what goes between your ears. Do you think social media or the TV has your answer?
You might be saying, but I don’t know anything about real estate or real estate investing. Stop making excuses. We live in the information age and there is knowledge everywhere. If you are reading this I am giving you free information on what to do to prevent a major calamity in your business in case of a down turn. This is not a theory, I’ve been a self-employed entrepreneur for over 25 years. This information is fact. There are a lot of “gurus” out there who have never had a conventional business. Building a following using selfies and memes is not a conventional business. I teach to take products and services and turn them into cash because that is what I have done for the past quarter of a century and it is likely very much in line with what you do in business and also why you are here reading this. Do you think you are reading this by accident?
My question to you would be when was the best time to implement the above plan? If you answered 5 years ago, or something like it, you are correct.
When is the next best time to implement that above plan? Correct, right now.
I want you to be able to implement the above plan but one of the biggest limitations entrepreneurs face is they don’t have enough time which is why I created The One Week Time Miracle. It’s a 5 day course that will take around 10 minutes per day to implement. It will absolutely help you be more productive and get more done in less time which in turn will help you make more money. Here’s a hint, it is not time management, time management doesn’t exist. We all have the same 24 hours in a day. The course is free because I want you to be make it through the downturn.
But you have to take action. Click here to get The One Week Time Miracle.
To your lifelong prosperity,
David Mulvaney
P.S. It won’t be available forever. I typically leave a free course up for a few weeks and then I take it down. Get it now click here.