Tuesday, September 23, 2008

The Light Switch

By Jim "Gymbeaux" Brown

Light on; light off. Light on; light off. Everyday in our homes and at work, we turn our lights on and we turn our lights off. Whenever we enter a room we automatically and subconsciously reach for the light switch. Don’t believe it, have you ever tried to turn the lights on when the power was off? We all have (well maybe not you).

What would happen if we all put signs on our light switches that read, “Profit LOSS”, or “Profit GAIN” on every light switch? Then every time we turn a light on we could literally see our profits going down. And when we turned the lights off our profits going up. You will notice that there is no “stable” or “holding ground”, they are either increasing or decreasing.

It is impossible to explain to you how valuable I think Joe Tye’s Direction-Deflection-Question (DDQ) is especially during times like we are currently experiencing. Think about this:

Is what I am about to do increasing my profits or decreasing my profits?

If yes, do it; if no, don’t! It is that simple! Americans have been unconsciously doing this ever since the price of gas neared $4.00 a gallon. They have asked, “Is this trip necessary, can I combine purposes, or do I simply put off the trip?” As a result, fewer miles have been logged and prices have declined.

I recently read that if you leave your computer on for an entire year as a great many of us do, it could cost you in excess of $200 a year. Okay let’s say that seems unrealistic, so it is $100 a year. What could you do with $100 more in your bank account? Read the calculation at: http://www.codinghorror.com/blog/archives/000426.html. $200 a month is $16.66 a month.

If you are reading this, odds are that you have both a family budget and a business budget. Let me change that to family expenses and business expenses because few people/families have budgets. Gary Keller in his book Shift suggests that we all look at our expenses, both variable and fixed and realign them. Some expenses we view as “fixed” such as car payment and mortgage payment that may be changed to reduce the monthly expense. For example, if we think outside the box, we could take out a Home Equity Line of Credit. The loan typically has a lower interest rate and can be spread over a longer period of time. This would effectively reduce your monthly costs, consolidate most if not all of your monthly payments except for the mortgage payment or lease payment into one monthly amount. In conjunction with this step, you also cut up all your credit cards and vow never to use them again; the interest is literally destroying America. Want a shocker? For one month, keep track of all the interest you pay on your credit card statements and any bill or loan that has an interest charge along with your regular payment. Multiply that number by 12 months and you may need medical assistance.

It all starts with a light switch and turning our lights off. One light may appear to be insignificant but multiply the number of lights times the number of hours and it begins to add up. What else are we paying for that we may not use to its fullest extent? How about the premium channels on cable television; do you watch them all? What about magazine subscriptions? How many magazines do you receive on a monthly basis? Do you read them? Cell phones have more and more “add-ons” that cost money when all we really need is a phone to either call someone or answer someone. Who reading this still has a land-line telephone in their home while everyone in the family has a cell phone as well? Everyone is entitled to a “date night” and eats out but do we have to eat at the best restaurants and have the appetizers and wine not to mention desert? Look at your soft drink monthly consumption. You do the math. Let’s say a 12 ounce bottle of water costs $1.00 (it usually costs more if you are buying only one like at the golf course where it is $1.50). There are 128 ounces in a gallon. Therefore there are 10.6 bottles of water in a gallon. 10.6 times $1.00 equals $10.60; and you thought $4.00 for a gallon of gasoline was high. We pay between 75 cents to $1.25 for a can of coke; again usually 12 ounces. At $1.25 cents, that is $12.50 a gallon; at .75 it is $7.50. You may want to drink gasoline, it is cheaper; just kidding.

Smokers; this may surprise you and then maybe not. If you smoke just one pack of cigarettes a day at $3.25 a pack (not including tax); you would spend $98.51 a month; $1,182.09 a year. Two packs a day; you would spend $197.02 a month and $2,364.18 a year. You are easily smoking away a monthly mortgage payment, 3 or 4 monthly car payments not to mention increasing the cost of health insurance and remedies for all kinds ailments associated with cigarette smoking. For women who smoke, do you realize that smoking ages the skin? How much more do women spend on skin care products to make their skin look younger when at the same time they are working overtime to make their skin look older by smoking?

Do you know what you spend on smoking. Go to http://www.healthstatus.com/calculate/smc and enter your smoking habit into the online smoking calculator and find out what it is really costing you a year. Caution: it is a shocker!

The real shocker to me is what people spend money on and what they don’t spend money on; specifically self-improvement and education. People will spend thousands of dollars on having fun but nothing on improving their ability to function in their work and relationships both of which would ultimately earn them more money from which they could have more fun. If you became better at whatever it is you do for a living, it stands that you would make more money. To become better you must invest in yourself! It has been my experience both in the Military and in business that people typically invest in only what they are told they are required to, like continuing education, and never go beyond what is required. I have read that fewer than 3% of Americans read a book a year. That means 97% NEVER read a book. What good could possibly come from reading a book? If you are part of the 97% you will never know, will you?

One more thought regarding the present financial crisis that we find our country in; who is to blame? Normally it serves little purpose to find blame instead of solutions but I feel this is important. I believe that our present crisis is the direct result of “keeping up with Jones” by almost every American citizen. Think about it. We tend to buy the biggest fanciest car we think we can afford. Same applies to homes. Real estate agents tend to sell buyers homes that reach their maximum loan limit and the mortgage companies go out of their way to qualify every buyer they can. A great many home buyers have two incomes thinking that both jobs will remain in tack and that a pregnancy would never interfere with a job. Credit companies bombard everyone with instant credit cards to where the average American has at least 3 credit cards not to mention gas company cards. Our current problem starts with each and every consumer’s desire to have the biggest and best of everything. Let’s be honest, do we need a $40,000 or $50,000 automobile? Most tax experts say the best car to buy is a used one with low mileage but used is not as good as new; or at least that is what most of us think.

If all that were not bad enough, I was absolutely shocked while listening to a radio news program regarding the approaching Hurricane Ike when a lady asked, “Where can I get my credit card from the Red Cross?” as if it was an entitlement. Hurricane Ike eventually crossed land in Galveston, Texas yet this woman wanted her $500 Red Cross Credit Card since that is what happened AFTER Hurricane Katrina.

Now taxpayers are being asked to bailout home buyers who made bad loans and are facing foreclosure. I opened a business that eventually had to close and my partner and I lost a considerable amount of money. It was our decision to open and our decision to cut our losses and close. Should we expect a bailout by our government for choices we made? I don’t think so but that is what we are about to do with the various plans being proposed by our government who, by the way, were also responsible for getting us all into this situation in the first place. Is that not like asking the fox to watch the hen house?

The problem started with each and every one of us and the solution must also come from each and very one of us and it all starts with turning off the lights (metaphorically and literally speaking).

This Nugget may not register with anyone who reads it but I can almost guarantee you one thing:


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