A couple of years ago we had the real estate bubble burst which lead to a recession. Most recently or government couldn’t decide on raising the debt ceiling to keep the United States solvent threatening to lead us into an economic depression.

Today is hard to tell where the economy is heading. By being optimistic, I am certain the current economic conditions are a short-term situation and in the long-term the country will see growth and prosperity. That doesn’t mean we won’t have bad times along the way.

The thing to ask is are you able to take advantage of the good times and get through the bad times?

You have to expect both good and bad times. Fortunately there are steps you can take to improve your position in both. Here are five to get you started.

1 – Rid Yourself of Debt

The sooner the better!

When you’re mired in debt you aren’t able to take advantage of financial opportunities when they present themselves. During the bad time it magnifies the how bad you have it, as servicing your debt becomes a greater percentage of your expenses.

2 – Global Thinking

We can no longer afford to act and think locally, a broader vision is required to improve or financial well being. We have to learn to think about how our career, industry, and business fit into the global economy.

3 – Become an Entrepreneur

Now is the time of free agency. You must thin like an entrepreneur even when work in a large company. Experience and seniority are not as valuable as they once were. Getting results and producing profits is what matters theses days.

Both, “You, Inc.: The Art of Selling Yourself ” by Harry and Christine Beckwith and “Self Marketing Power: Branding Yourself As a Business of One” by Jeff Beals are great resources for developing an entrepreneurial mindset. At the time of this writing you can pick up either book for less than $3.00 “used” from Amazon.

4 – Be Capitalistic

Wealthy people own assets and the rest of the people have liabilities (stuff that cost to maintain and own). Capitalists own assets that produce income such as stock, businesses, or equipment. Eighty percent of the millionaires in America are self-made.

5 – Being Flexible

Today, business moves at an ever increasing pace, demand that you are adaptable. Thing do not stay the same, they don’t go back to the way they were either. You have to be able to asses your situation and quickly change direction.

The book “Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life“, written by Spencer Johnson, the coauthor of “The One Minute Manager”, shows that ‘Change can be a blessing or a curse, depending on your perspective’ (quote from Amazon review page).

Resources

• Becoming a Millinaire
• Dealing with good and bad times
• Debt management

Investor’s One Percent Risk Rule

Investors often follow the “one percent rule” to minimize their investment risk on any given single trade. So an investor, or stock trader, with a portfolio worth $100,000 would never make a trade that would put more than $1000 at risk of being lost per trade.

This keeps the maximum potential loss of a single trade at an acceptable level so no single trade will severally impact the investor’s portfolio. Traders and investors who us the one percent rule are less likely to be severally impacted by an unexpected losing streak compare to the person the risk a forth or more of their portfolio.

Two Step Calculation

The one percent risk calculation is a two-step process. Determine how much capital can be at risk, and then calculate the size of the trade:

1. amount to risk = portfolio value / 100
2. size of trade = amount to risk / ((purchase price – stop loss) x point value)

So if you were to purchase $75 stock in a $100,000 portfolio with a stop loss point of $70 the one percent rule would be calculated like this:

1. amount to risk = $100,000 / 100 = $1,000
2. size of trade = $100,000 / (($75 – $70) x 1 = 200 shares

In our example 200 shares is the trade size since the the shares could trade at the stop loss point and lose $5 each, totaling 1% of the portfolio.

Let’s do another example using a smaller portfolio:

1. amount to risk = $35,000 / 100 = $350
2. size of trade = $350 / (($40 – $35) x 1 = 70 shares

Summary

The one percent rule can be used in all types of markets (stocks, furtures, options, etc.). However, it is important that you use the correct point value (1) or you will risk losing much more than one percent.

What about you, do you have any trading tips to share? Leave them in the comments.

Utility Auditing Business

Auditing is not a matter of magic. If you have the patience to sort through regulatory tariff and have a keen eye to spot billing inconsistencies, you can conduct an audit.

Minimum Start-Up: $500
Average Start-Up: 15,000
Revenue: $35,000 – $1 Mil+
Profits: $20,000 – $500,000
One Person Business: Yes

UTILITY BILLS

Auditing utility bills has become one of the most popular areas of concentration for auditors because of the inherent complexity of billing for utilities.

Utility rates are highly confusing because they differ depending on type of service, volume of usage, and promotional packages offered at the time of installation.

GETTING PAID

Utility Auditors earn commissions, usually around 50% of any overcharge they uncover. And this is where you may need to exercise more of your patience.

Although utility companies would gladly settle a verifiable overcharge (relatively quickly out of court), it may ask them up to six months to issue any refund. This is particularly true with larger utility firms.

COMMISSION WORKS

Most clients prefer to pay auditors on commission basis for two reasons: No upfront cash outlay, and no risk if the auditor comes back empty-handed.

For the auditor, working on commission offers distinct advantages: It makes it easier for them to land clients, and it usually enables them to earn more than if they would take a basic fee.

MAKING THE SALE

The biggest challenge facing auditors is to get a potential client to admit that “there is a high probability that they (the client) overpaid for their utilities without knowing it”.

This issue is usually not a problem if the client is a small business where the owner makes all the decisions.

However, the executive committee of a major corporation may feel threatened that they’ll be held accountable for irresponsibly overpaying for utility.

Your job is to convince your potential client that overcharging does happen and that it is the job of an outsider auditor, and not people from within the company, to “fix” the problem.