Saturday, October 8, 2011

My Response to the "Occupy" Movement

I have recently taken time to learn as much about the "Occupy Wall Street" movement as I can to better understand why this protest happening, and what is the goal of the protest. In the end, I concluded that while there is value in having a mass venting of grievances, overall it will be wasted energy that produces very little change, if any, because of the diverse platforms being addressed. Many of these platforms and grievances would actually contradict each other if we took the time to resolve them.

Here are the predominant themes I see coming out of the movement:
  • People are mad at the "status quo."
  • Jobs to stay in the U.S. instead of being outsourced overseas.
  • Corporate America to pay their "fair share".
  • Accountability in government.
  • We are the 99%. I don't know, you tell me. 
  • It is all greedy corporate America's fault because they have turned out government into a puppet.
I've discussed the issue with classmates from Del Mar College in a government class, and with family and friends on Facebook as well, so I do not plan to bring the debate/discussion here. I simply want to share what my family (if we are part of the 99%) are going to DO about it rather than protest with words and venting anger.

J. Stanley wrote a book called The Millionaire Next Door, and states that 80% of our nation's citizens who have a net worth greater than $1 million are new money, first-generation wealthy. Some of these new rich are coming from the ranks of poverty. A free market society allowed this to happen. Jobs were created in the process. Tax dollars were generated in the form of income and sales taxes. This is far better for everyone than if there was no business created at all. This sounds like the American Dream in action to me. Therefore, I do find it a bit ironic and ridiculous that people are protesting against "greedy corporations that are only concerned with turning a profit." No profit means no taxes from anyone. Steve Jobs is a great example of what I am talking about. He is both the epitome of "the 99%" AND corporate America. See his 2005 Stanford graduation speech.

Here is what I propose to do with my own family to insure our own financial success for generations to come.

The Project: As a family, we will create a profit-earning business by June 1, 2012. My family consists of myself (age 35), Liv (31, I mean 21!), Jacob (10), and Emma (8) - plus a dog named Oreo and our cat, Eartha.

Start up capital: We will save $2000 for the start up capital on this project. Small capital requires us to think bare bones on expenses, getting the most out of our business dollars, and restricts our business ideas to the simplest and most profit-potential ideas possible.

Goal:  Earn minimum $4000 in profits after taxes and expenses.

  • As a family, learn what it takes to start a profitable business.
  • Decide through brainstorming ideas what would be a good, simple, profitable product or service that can be sold easily and with a desired profit margin.
  • Determine desired profit margin, target number of sales.
  • Learn how to conduct preliminary research to decide if a product or service is worth pursuing, pricing, and target market. 
  • Utilize the Small Business Development Center at Del Mar College to review our business plan as needed.
  • Create systems that will insure a smooth process from customer attraction, conversion, sales, delivery, payments, and profits.
  • Create a business entity as a family - decide among sole proprietorship, partnership, LLC, LLP, or incorporation.
  • Create a plan for how we want to spend the profits, and refrain from purchasing those items until we achieve our goal of $4000 in profits.
  • Decide as a family when to close business (if profitability is not attainable), or if profitable after reaching objective whether to sell off business or continue to operate business as well as decide whether to scale up operations.
  • Create measures for red light and green light decisions (close up shop, stop spending, adjust spending, continue business, etc.)
  • Decide as a family when to do work in-house (lol) or to out-source tasks to skilled professionals.
We might fail at this and be out $2000, but it will be an education well worth the $2000 spent. Now, that's tuition for education if you ask me. My hope is to do something like this every year. One project a year of some kind.

So, our next step is really two-fold (maybe three-fold): Develop an idea for a product or service while saving up for the $2000 start up capital (so far we are setting aside 10% of our take home pay to do this and we already adjusted our expenses to make sure we can do that.) We should have the start up capital ready by the time we roll out.

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