Act 359

Maximize your income earning potential

Not very holiday like as a topic, but as I inch ever close to the 365 day mark, a year’s worth of effort, I am coming to terms with what this adventure has taught me.

I’d have to say that my chief take away is that I have not maximized my earning potential these last few years. I’ve maximized my education and experience. I’ve enjoyed my work – but I’m leaving alot of money on the table and it’s cost me on many levels.

Of course, a shortage of cash has also taught me many things. How to save. How to make due with what I have. How to bake. How to make salad dressing. It has been a wealth of learning opportunity to say the least.

This can likely be said of many small business owners. You’d be surprised how many of us don’t draw a paycheque after all is said and done. We create our own jobs, especially in small markets where the ability to match your skill set to the jobs section is a bit of a leap.

Of course my evidence is anecdotal at best but I have spoken to many business owners in the last year. We share this irony. We provide jobs at the cost of our own.

We rack up our personal credit cards and borrow against our homes to capitalize our businesses because banks don’t lend to micro businesses. They don’t. It’s that simple. If you believe otherwise, you’ve been fooled by the silly bank ads. I guarantee you they spend more advertising their support of small business than they actually lend to small business. And by small I mean micro – under five employees – who fuel 90% of the economy. I’d even go as far as saying that micro business owners are the reason personal debt levels are so high. But I’m at a loss as to how to prove it beyond any reasonable doubt (not that I haven’t tried).

Still, the lesson for me has been that I must work harder to maximize my personal income earning potential. Which is short hand for I need to find a better job. If I worked in the public service, I would make, quite literally, fives times more than I take home now. But the multiplier effect on the local economy would be significantly less.  So you tell me, how is that sustainable?

If all the small business owners who are in the same position I am in called it a day to get a more typical job, you’d see how much impact they have on the economy.

I don’t think the banks do enough. Not nearly enough. With records profits they could afford to take slightly (not massively) but slightly more risk supporting micro businesses. But they won’t. They are protected from most risk with government-backed business loan guarantees, CHMC protection and student loan protection, mortgage and credit card insurance.

And this doesn’t make me a socialist, or worse, a communist, it makes me a realist. A humanist. An economist (U of Ottawa, B. S. Sc. Economics 1989 just for the record). That corporations as powerful as the big five either don’t know or don’t bother is troubling to say the least.

If I actually had a say, something I’ve tried to do with the blog, I would meet with each President of each of the big five, TD, BMO, CIBC, RBC and Scotia and challenge them to take a small percentage of their annual profits and offer a limited number of unsecured 10 to 25 thousand dollar lines of credit to micro business who gross under $250,000 a year and have five employees or less. They’d make money, our cash flow would improve. Together, we could power the future. And we wouldn’t need multi billion dollar pipelines or massive foreign investments to do it. We could do it one small local economy at a time.

Like water, money must flow. That there are buckets of it sitting idle in corporate bank accounts means that our economy is slowly dying of thirst.

Perhaps Samuel Taylor Coleridge said it best in The Rime of the Ancient Mariner.

Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.

Act 341

Learn from your own mistakes

I’ve written about learning from the mistakes of others but haven’t reallly addressed learning from my own mistakes.

I made a minor one today. Tried to make a curry soup with some roasted peppers. The peppers were burnt, the soup was terrible unless you like soup that tastes likes smalls shreds of burnt rubber that is. Yuck. It’s down the drain for that effort.

I’ve learned from other mistakes too. I should not have trusted that my credit union’s advice was best for me. It wasn’t. I should not have thought that I needed mortgage insurance when I also had life insurance. I didn’t. I should not have assumed my credit report was accurate. It wasn’t.

I should not have assumed that building a successful-ish business over 15 years meant I would be bankable when I needed a business loan. It isn’t.

And I’m still learning. That’s the joy I’ve found in this blog. I can learn. I can improve. I can make it better. It’s working. Slowly. But it’s working.

So make mistakes. It’s okay as long as you learn from them. It really is.

Act 159

Does the tail wag this dog?

Over the course of this exercise – that I’m almost half way through, I’ve done a great deal of research on banks, banking, economics, debt, blah, blah, blah. I’m starting to get sick of myself.

However, every now and then, I come across some great finds such as the Swedish Bank JAK that charges NO interest or today’s find – some simple advice from a Canadian financial planner at – which implies, to me at least, that the banks and credit unions are the tail that really wag this dog debt because they have changed their approach to how to sell, well, happy retirement, for one.

It disturbs and discourages me but even still, information is power if it does nothing more than lead to a better understanding.