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Save for Retirement

Save for retirement, because it may be coming sooner than you think.

There is no question things are improving. Let's start with the Conference Board's Leading Economic Index. On a trailing six month basis, five out of 10 components are moving in a more positive direction as of the end of June. In April it was only three. In March, two. This recession will end, and maybe soon.

But what about the job market? Have we seen any improvement there? The best I can say about the job market is that some companies I work with have stopped laying people off. Many more have at least slowed the rates at which they are letting people go. Few, if any, are hiring; even to replace employees who leave on their own.

The job market, in my opinion, will be looked upon historically as the single most important factor impeding growth for this year and next. What concerns me most about this is the dampening effect it will have on the above-mentioned recovery. And the longer it takes to recover, the longer it will be until employment begins to rebound.

We're on our way up again

Things are starting to look up. Everywhere I turn I see signs of life. Mind you I wanted to write "strength" there, but for now signs of life will have to do. Just the same, we're back from the brink. It was touch and go there for a while but it looks like the patient will pull through.

Ah, but what kind of life will the patient have after such a close call?

Tracking a Student Loan with GnuCash

I recently received an inquiry here from a reader interested in using GnuCash to track his student loan. Here is the text of that email:

Can you help with tracking student loans in GnuCash?

Every month when I pay my student loan I credit my Bank Account for the payment amount $100 I then debit the Loan payment Expense account for the same $100. But how can I track and reflect how much of my Liability has been covered and how much Education Liability i still have to be paid?

Thank you so much once again for your great blog!

Well first off, thanks for the compliment on the blog. (You know I just couldn't cut that part off the end of his message.)

Closers

Recessions are just about the worst thing that can happen to a whiner, but for closers recessions are business as usual. In fact, for closers times like these can be the best of times.

This especially true in small businesses and proprietorships, where turning on a dime is an everyday occurrence. And it's why small businesses, entrepreneurs, lead the way out of times like these.

You see, closers know that selling is a two sided affair. Closers have a knack for sniffing out the deal. but here's the catch: The deal they sniff out today may not be a perfect fit for buyer and seller.

Closers understand that potential sales exist all along the continuum that exists between what's for sale and what buyers are looking for. Sure, when a buyer wants exactly what a seller has for sale the deal is done. But closers know those deals are easy to make. Anyone can close those deals. In fact all that's required is an introduction, and there is little value in providing an introduction.

Opportunity of a lifetime

It happens every day to someone, actually to a whole bunch of someones. But it might only happen once in any one particular individual's lifetime. Today is one of those days for a very good friend of mine.

My friend happens to run a small chain of automobile repair shops. For years and years one of his chief complaints has been the impossibility of competing with the auto dealers for repair work. Despite investing heavily in all the latest computer diagnostic technology and hiring the best mechanics trained by the auto makers themselves, customers have been hard to get. The perception is that his service can't be as good as that which the dealers offer.

Well today his service is not only as good (better, in all probability) as that which the dealers offer, it's also available. As the list of who stays and who goes among auto dealerships becomes known it will become clear that many customers have fewer choices for where to have their cars serviced. As they search for and eventually find the highest quality and most reputable service providers my friend's business will prosper.

I told him this is his once in a lifetime opportunity.

Whiners

Lately I've encounterd a much greater than usual number of whiners. So many people I know and many I don't have lost their jobs. Some of the luckier whiners still have their jobs, but they're whining about pay cuts and longer hours. The luckiest whiners I know still have a job but whine about not getting a raise or a bonus.

Times are tough, but really, what's the point of whining about it? Wouldn't it be better to put that energy into looking for a job instead? Or how about using it to learn a new skill to sell on the open market?

Having an income, any income at all, that you yourself earned brings pride and a sense of accomplishment. All the whining in the world can't replace that.

What do you do and what does it cost?

A colleague and good friend of mine is about to embark on a new career. His timing probably could not be worse; but then he didn't get to choose. The company he works for is restructuring itself and people at his level and above in his company have fewer options than most.

His options are limited to finding a position which is at or above his current level. His company has a policy that displaced managers cannot take positions lower than their current management level. In times like these many solid performers are finding themselves unemployed with few prospects for directly replacing lost income.

In good times people are in demand. For good people this is especially true. When times are not so good - and they certainly aren't these days - people are cheap and easy to come by. Top talent is cheap, especially if it is desperate for work and the income that comes with it.

In my view, this is the risk you take on by not being a 100% fit for the job you're doing.

Nowhere to go but up?

Are you scratching your head trying to figure out where this market is headed? Or maybe better put, why it's headed up now, when all indications are it should be bouncing along going nowhere or trending down?

Me too, but I have a theory for why it's headed the other way. I can't help but wonder if the fuel behind this rally is the lack of fuel for another crisis.

Can you think of any classes of investment that could be taken behind the woodshed? That's what happened in 1987, with stocks in general. It happened again in 2000 with internet stocks. This one was precipitated from real estate and debt speculation. What's left?

Could all this be happening simply because there are no other misbehaving investment classes? (At least none that we know of.) Maybe so. If true, then it's safe to say confidence in the system, in the economy in general, and the economy's ability to recover from a strong shock in particular is building.

But it won't build forever, not all by itself. The real question therefore becomes: Will these gains prove sustainable? Will the up trend last long enough for some glimmer of hope of recovery to materialize?

Is this what we really want?

So let me see if I got this right.

We don't like the cars produced by our own country's automotive manufacturers. We don't like them to the extent their very existence is in doubt, such is demand.

But we also think our country needs an automotive industry. We therefore believe we must act to save them, to keep them from going out of business.

How to do that? Well, there are a number of ways:

Are things picking up again?

Over the past week I've had a number of conversations with friends and clients about business where they work and live. Call it a random sample. The only non-random aspect about this little informal survey is that they all know me. None of them know each other, so unless I'm the common thread that somehow guides the way economic conditions affect their businesses...

You get the idea.

Here are my findings:

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