As we promote the American Dream which includes, for many of you, a dream to own your own business and be an entrepreneur.
And many of you have emailed me and asked me the following question:
“How can I tell if I have what it takes to be in my own business?”
So, we’ve run across a test that actually can determine if your idea of starting your own business has any validity and if you have the kind of focus and determination that it takes to pursue your American Dream.
For example, just imagine how you would react if the first 20 people who you told your idea of starting your own business shot it down. Or, if you failed at your first five attempts to make a go of it, what would your friends say if you decided to start a business for the sixth time?
If those scenarios sound discouraging to you, then chances are you aren’t cut out to be in your own business.
On the other hand, if you didn’t scare that easily, you just might have what it takes. Here are some questions that can help you further assess your aptitude and your tolerance for risk taking.
1. Do you believe……I mean do you really believe in yourself?
I know….I know….It sounds corny, but it really does start with believing in yourself and your business idea.
To hear the experts describe it, they will tell you that the classic entrepreneurial personality seems to combine the self-confidence of former Heavyweight Boxing Champion Muhammad Ali with the eternal optimism of a Chicago Cubs baseball fan who believes his team will win the World Series next year.
Businessmen were studied over a period of time, including many who had failed four or five times in a row, and some of the subjects were absolutely convinced that this next time they were going to strike rich.
That kind of complete confidence ties into another essential trait of the successful businessman and that is the willingness to take risks.
For example, look at someone like Thomas Edison, who had literally hundreds of failures, or Henry Ford, who was told by several potential investors that his idea for making automobiles on an assembly line was never going to work.
Fortunately, Edison and Ford weren’t easily discouraged and they were willing to take a risk and put it all on the line for something they believed they could accomplish.
The question is…..Would you be willing to do whatever needs to be done to accomplish your Dream?
2. OK….you would…that’s great….now how about your motivation?
Even above making money, self employed people are driven by the desire to do something really important……something that can not only change their lives but the lives of others as well.
They don’t view what they’re doing the way a lot of people may view their jobs as a means to a paycheck that allows them to do other things outside of their work. For the self employed, it’s the goal itself that is the most important.
3. Another question to ask yourself is…..How do you see the world?
You see, folks, many successful business owners, in fact, many of them who have appeared on Our American Dream show and shared their story, all had a common thread. They were totally focused on the “Big Picture”, which was their goal of achieving their Dream as opposed to being more focused on the day to day details.
That broad, “Big Picture” perspective comes in handy for dealing with the hurdles and challenges that will certainly be in the path of your pursuit of your American Dream.
What it comes down to is that you must develop the ability to walk into almost any situation, any problem, size it up, and figure it out!
Successful people need to have an ability to be innovative, be a troubleshooter and then a problem solver. They need to have the ability to see a solution before most other people even recognize that there’s a problem. That kind of perspective is absolutely essential for those pursuing their dream of being self employed.
4. Another question to ask yourself is……Do you know what you’re getting into?
When clients come to me with a business idea, I attempt to find out whether they really understand what they are getting themselves into.
I advise them to go speak to other people who have already accomplished what they want to do so that they can hear them talk about what it’s been like in terms of putting in long hours or not drawing a paycheck for themselves until the business is profitable.
Many businesses fail because their owners didn’t spend enough time to determine if there was even a market for their ideas.
They think it’s the best idea ever and maybe they are even able to attract funding for it, but if it turns out that there aren’t customers out there who are willing to pay for it, they have a big problem.
And, if you decide to go into business with a partner, you better each have a clear understanding of what you expect from one another and the business, or you will face major problems.
5. Of course, the obvious question says…….Will you stick it out?
You must be prepared to ride out each stage of your company’s development. Once you’ve attracted seed money from investors who were impressed with your idea, you’ve got to deliver on what you’ve promised.
Whatever your business is selling, you have to be able to stick with that product or that service and make sure it is what the market needs and is willing to pay for it.
You might think that your passion will be enough to keep you going and, believe me, passion for what you’re doing is essential. However, nothing can replace or is more important than plain, old-fashioned perseverance!
6. And finally….the last question is ……. Are you sure the thought of having your own business is part of your DNA?
Are you in possession of all the ingredients we have discussed to be a successful entrepreneur or whether you can learn the necessary traits it takes to succeed?
Even in a down economy, many people faced with job layoffs begin to look inside themselves and discover their entrepreneurial talents while others may need the help of business development programs at local colleges.
Some experts say that learning accounting, how to write a business plan and how to approach investors can certainly enhance your chances for success in business.
I say to them that could be true. However, it’s very difficult for any M.B.A. program or an undergraduate bachelor’s program in business to teach someone how to be a risk-taker and how to believe in something so completely that you simply will NEVER give up their dream.
Because that, my friends, is the final litmus test for anyone wanting to achieve their own American Dream!
According to many economists, the Social Security system will essentially be insolvent before the year 2032, when an estimated 75 million Americans are scheduled to begin receiving benefits from the program.
To really understand the gravity of this potential economic disaster, you need to know a little history about Social Security.
President Franklin Roosevelt introduced the Social Security Act in 1935 to provide income for the elderly and disabled.
Roosevelt promised that participation in the Program would be completely voluntary (it’s not). He also promised that the participants would only have to pay1% of the first $1,400 of their annual incomes into the Program.
They now pay 7.65% !
The Social Security Act also provided that the money the participants elected to put into the Program would be deductible from their income for tax purposes each year.
Of course, today the tax is no longer deductible!
The original Program also provided that the money the participants put into the independent 'Trust Fund' rather than into the general operating fund, and therefore would only be used to fund the Social Security Retirement Program, and no other Government program.
However, under President Lyndon Johnson, the money was moved to the General Fund!
The original Social Security Act also provided that the annuity payments to the retirees would never be taxed as income.
Now, of course, up to 85% of your Social Security can be Taxed!
You may not know this but Congress has been “borrowing” from the Social Security fund for several years as they believed the fund would never run out of money.
Year after year, both Democrats and Republicans have allowed the party in power to take what they wanted from the Social Security fund and use the money to support their various partisan spending programs.
And, the various administrations have maintained that our budget deficit was lower than it actually was by the exact amount they ”borrowed” from the Social Security trust fund!
So, for example, if they "borrowed" 50 billion dollars from Social Security (which they collateralized by issuing Treasury Notes) they said the deficit was 50 billion less than it actually was!
See, for literally decades, they were not required to account for this “loan” when doing the accounting for the government in terms of relating the true deficit and national debt to American taxpayers and voters.
(This was just recently changed. Now they'll have to keep the money in the fund, and if they borrow it, they'll have to actually account for it.)
Anyway, there are lots of proposals out there about as to what to do to correct this shortage of Social Security dollars.
Here are a few that Congress is currently considering:
Letting the taxpayer decide how to invest the funds they pay in to Social Security.
Increase the age limit that you start collecting your Social Security retirement funds.
Limiting or eliminating the amount you can collect if you earn a certain amount of income per year. Don’t forget, this is your money you have paid into the fund!
Increasing the percentage of taxes that are paid out of payroll checks.
Increasing the cap on earnings that the FICA (Social Security and Medicare taxes) tax is based upon.
For example, in 2007, the first $97,000 was subject to FICA tax, with no cap on how much income they can tax for the Medicare portion of FICA.
Whatever they finally agree upon, I don’t believe it will favor the average American wage earner and Social Security contributor.
So, what does this mean to you? It means that you have to structure your retirement plan with a much more conservative approach than ever before! We think you should seriously consider adjusting your retirement plans to either minimize or eliminate Social Security income if you’re not retired yet.
If you are retired, you should have a good hard look at your cash flow, and consider only your non social security income sources as what you need to maintain your lifestyle.
This is a very serious issue that needs to be addressed. Most Americans are depending upon the Social Security system to support their retirement. Remember, workers have been paying into this so called “Retirement” fund all of their working lives.
The problem is that there are much fewer workers paying taxes now than there are retired Americans. And that number is expected to drastically increase!
Here’s an email from John in St. Louis who wrote….Like a lot of folks in this state, I have a job. I work my 40 hours each week and I get my paycheck. My company takes my taxes out of that check and I make my contribution to supporting my State and Federal Government.
Now, for me to receive my paycheck, I have to pass a random urine test with which I have no problem. I mean I agreed to it when I started working for my employer. Actually, I should say that I had no choice if I wanted the job.
What I do have a problem with is sharing my taxes and the fruits of my labor to people who don't have to pass a urine test.
Why don’t the people have to pass a urine test before they get their welfare check? I mean that seems fair because I have to pass one to earn it for them, right?
Please understand, I have no problem with helping people who need a helping hand.
I do, on the other hand, have a problem with helping someone sitting on their couch doing drugs, while I work every day to help support their bad habit. There’s something very wrong with a system that supports that situation, don’t you think?
John, thanks for the email! I agree with you. Some folks need a helping hand sometimes to get back on their feet and I think that public assistance is a useful tool for that purpose.
However, when we start helping people with handouts to folks who have no intention whatsoever of using it to get through a temporary situation while they find a job or maybe go to school to learn a trade, then it becomes fraudulent and insults the American Taxpayers whose labors provided the assistance.
And, of course, John, you also pose a very interesting question, and one I’m sure thousands of working Americans who are subjected to the same random test as a condition of their employment are also asking.
Can you imagine how much money our States would save if everyone had to pass a urine test to get a welfare check?
Maybe we could call that program, “Urine or You're Out!”
No, seriously, that would be a great name as it would describe the process and the potential consequences for defrauding the system.
I’ll tell you what, folks, something has to change in this country and I think if should be sooner rather than later!
Of course, if passing urine tests was required for welfare checks, the ACLU would be suing everyone on behalf of the poor, unfortunate folks who could not pass the test and would be unfairly discriminated by the state etc.
Unfortunately, we do not have a level playing field in this country for workers and those living off the state who are being allowed to indulge their addictions while taking welfare in the process of indulging their addiction.
Requiring working people to take random urine tests as a condition of their employment but not require drug tests to receive entitlements like welfare is definitely discriminatory against the American worker who supports those who receive the "helping hand" checks while still taking drugs.
I guess the obvious question becomes what percentage of those receiving any kind of free aid from our government would "fail" a drug test?
This whole thing about people abusing our Welfare System by continuing to take it when they are drug addicts who can’t get a job or some people who simply don’t want to work as long as they can have the state continue to support them.
As a matter of fact, this kind of reminds me of a story about a young boy who enters a barber shop and the barber whispers to his customer,
“This is the dumbest kid in the world. Watch while I prove it to you.” The barber puts a dollar bill in one hand and two quarters in the other, then calls the boy over and asks, “Which do you want, son?”
The boy takes the quarters and leaves the dollar. “What did I tell you? “ said the barber. “That kid never learns!”
Later, when the customer leaves, he sees the same young boy coming out of the ice cream store and says, “Hey, son! May I ask you a question? Why did you take the quarters instead of the dollar bill?”
The boy licked his cone and replied, “Because the day I take the dollar, the game's over!”
What do you think, folks, does that young boy’s story maybe apply to folks who continue to cheat the welfare system who are very capable of getting a job? I mean, if they get a job, the game is over, right?
So, what do you folks think about requiring people who take government aid to pass a urine test?
Visit our website…..www.ouramericandreamshow.com
And tell us what you think……..we value your opinion!
Most people understand that low credit scores will translate into higher mortgage and credit card interest rates. But few realize there are plenty of other insidious ways that low scores can add to a person's payment costs.
CAR INSURANCE
The fact that some companies base auto insurance premiums on credit scores comes as a surprise to most of the clients who we help.
In fact, according to a recent survey by Conning & Co., 92 of the 100 national and large insurance companies use this avenue. Some only apply it on the initial application for insurance, others pull your score every three years. Thirty-eight percent of insurers who responded to the survey use credit to determine eligibility into different underwriting programs. Fifty-two percent use it to determine both eligibility and rating classification.
The bad news is that consumers with bad credit scores pay between 20 percent and 50 percent more in auto insurance premiums than those with high scores. That is a substantial difference when you consider all the insurance policies most people buy each year for multiple personal and recreational vehicles they own.
This type of credit profiling is referred to as “Tiered Pricing” in the insurance industry in which different levels of descending credit scores translates to higher premiums. Basically, the insurance industry has correlated folks with poor credit scores to higher risk clients.
Homeowners insurance policies also are subject to this “Tier Pricing”.
CAR LOANS
Recently, the Consumer Federation of America (CFA) announced that its investigation into American Honda Finance Corporation revealed dealers in this car manufacturer's network charged different markups to customers from different credit tiers. Those in the least creditworthy tier could face prices that were 3.5 percentage points higher than those with higher scores.
Although they have supposedly capped their markups at 2.5 percent, General Motors Acceptance Corporation and Ford Motor Credit Corporation take the same approach.
Did you ever wonder when you walked into a Automobile Showroom why the salesman wants to get your Social Security Number? So that his Sales Manager call pull your credit report and then they can decide what to charge you for the car you want to buy.
People with poor credit usually pay an interest rate between 19 percent and 26 percent on a new car purchase, compared with the 6 percent to 7 percent average.
I don’t know about you, but if I had to pay 26% interest on a car loan, I would start checking local bus schedules!
People don't equate that into dollars and cents. However, that can be a difference of $100 to $200 a month on your car payment. It certainly adds a lot more interest to the balance to pay off that new car, especially on a longer term seven year loan.
Some Banks have as much as a 10 per cent difference in car loans they approve, depending on that all important credit score.
It always comes down to how the Lenders see the car loan borrower as a risk that they can assess and determine.
EMPLOYMENT
Most employers today take your credit scores very seriously. The fear is that credit problems at home will create stress and distraction at work. In turn, it will negatively affect your job performance. If you are their employee, will you be getting phone calls from collectors at work? Will the employer have to garnish your wages?
I have one client who was offered a 25% raise to switch to another company. She was told all she had to do was interview with a Vice President and she had the job. What they didn’t tell here was that after the Vice President approved her for the position, the Personnel Manager would check her credit. They found that she had some credit problems due to her husband being laid off work for six months the past year. This caused them to be late with some payments and drastically decreased their scores. She was not hired for the higher paying job!
Today, 70 percent of companies will check credit before they decide to hire a prospective employee. Larger companies are more likely than small ones to check your credit.
HOUSING
Rental Property Owners and their Management Companies will reject tenant applications with poor credit scores as they associate low scores with tenants who will either pay their rent late or not at all. No Landlord wants a tenant like that as it will cost them a lot of money for a legal eviction. And, the Landlord depends upon collecting the rent on time so that he can pay his mortgage on the rental to his Bank.
UTILITIES
Most families who apply to Utility Companies for service when renting or buying a home are shocked that their credit scores are checked. Poor credit scores usually require a much higher deposit paid upfront before the telephone company will connect your line or the electric company will turn on your lights in the new house.
CELL PHONES
These providers increasingly rely on credit scores to sort the good risks from the bad credit. And bad credit definitely doesn't get the best deals at Verizon. Instead of contract plans that offer more minutes for your dollar and come with a wider selection of phones, those who do not make the credit cut must use prepaid cards for cell phone service.
DOCTORS
I had a client who was considering laser eye surgery, the doctor immediately pulled her credit score to see if she qualified for his monthly payment plan. Otherwise, the cost of the procedure was due before surgery was scheduled.
This also happens with Plastic Surgeons, Oral Surgeons, and Orthodontists for the kids’ braces.
SCHOOL LOANS
I know a son of a friend of mine who was turned down for a student loan to attend Medical School because of his poor credit score.
He isn't alone. I have also watched other individuals delay their college plans when their scores disqualified them from university and federally funded loans. And in this case, it isn't a matter of having to pay a higher interest rate because of poor scores.
It's black and white. You either get financing or you don't. Poor credit getting in the way of achieving your educational goals is a high price to pay.
MARRIAGE
Most folks think that a married couple has a combined credit score. Nope. You can't marry your way out of a bad FICO rating, and many times a large difference in credit scores between partners causes too much tension for the marriage to survive. I have personally known couples who called the wedding off when a poor credit score was disclosed.
Can you imagine your fiancé telling you, “Sorry, honey, I love you, but until you get your credit score up to 700, the wedding is off.”
For example, let’s say one of the engaged parties own a home. If the owner spouse dies, the home and mortgage become part of the estate. If the surviving spouse wants to take over the mortgage, he or she needs to qualify with credit and income to the Bank holding the home loan. Most people rely on the fact that they'll live to pay off the mortgage, so this isn't a concern. Big mistake!
Unfortunately, more Americans are becoming very much aware that credit can affect most aspects of their lives. The need to have good credit today is not just an option, it is a necessity to be able to live a full and productive life.
People with poor credit scores will continue to be victimized by Banks, Employers, Landlord, Utility Companies, Doctors, and even a potential spouse unless they take action and get some help with their credit scores.
OK, so now you have your FREE credit reports and you are confused because there are an lot of numbers, abbreviations and terms you've never seen before.
Trade lines, charge-offs, collections, inquiries, Public Records, and you are trying to figure out how in the world can you interpret the information correctly?
Let’s start at the beginning, there are three major credit-reporting agencies in the United States:
Experian
TransUnion
Equifax
Everyone is entitled to a free copy of their three credit reports, one from each of the credit reporting agencies annually thanks to a 2004 Federal Law. You must request your free credit reports through a centralized source.
To order online, visit www.annualcreditreport.com.
By phone, call (877) 322-8228.
Or, you may complete the form on the back of the Annual Credit Report Request brochure, and mail it to:
Credit Report Request Service
P.O. Box 105281, Atlanta, GA, 30348-5281.
Each of the three reports will have different information because creditors subscribe to one or more of the three Credit Bureaus. Obtaining all three reports from each guarantees that you get all the information reported on your Credit by all your Creditors.
A credit report is basically divided into four sections: identifying information, credit history, public records and inquiries.
Identifying information is information to identify you. Look at it closely to make sure it's accurate. It's not unusual for there to be two or three spellings of your name or more than one Social Security number. That's usually because someone reported the information that way. The variations will stay on your credit report. If it's reported wrong, the Credit
Bureaus leave it because it might mess up the link. Don't be concerned about variations.
Other information might include your current and previous addresses, your date of birth, telephone numbers, driver license numbers, your employer and your spouse's name.
The next section is your credit history. Sometimes, the individual accounts are called trade lines.
Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:
• When you opened the account;
• The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card);
• Whether the account is in your name alone or with another person;
• Total amount of the loan, high credit limit or highest balance on the card;
• How much you still owe;
• Fixed monthly payments or minimum monthly amount;
• Status of the account (open, inactive, closed, paid, etc.);
• How well you've paid the account.
Next, you need to understand the language contained in credit card offers and statements. If you do not, this lack of knowledge will send you down the wrong path to more debt and higher interest rates. I want you to have a basic understanding of these frequently used credit card terms.
Average Daily Balance -- This is the method by which most Credit Card Banks calculate your payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle. The average daily balance is then multiplied by a card's monthly periodic rate, which is calculated by dividing the annual percentage rate by 12. A card with an annual rate of 18 percent would have a monthly periodic rate of 1.5 percent.
If that card had a $500 average daily balance it would yield a monthly finance charge of $7.50.
Annual Percentage Rate (APR) -- A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans.
Balance Transfer -- The process of moving an unpaid credit card debt from one issuer to another. Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance transfer fees to discourage them from going out.
Cash Advance Fee -- A charge by the bank for using credit cards to obtain cash. This fee can be stated in terms of a flat per transaction fee or a percentage of the cash advance. For example, the fee may be expressed as follows: “5%/$10”.
This means that the cash advance fee will be the greater of five per cent of the cash advance amount or ten dollars.
The Banks may limit the amount that can be charged to a specific dollar amount.
Depending on the Bank issuing the credit card, the cash advance fee may be deducted directly from the cash advance at the time the money is received or it may be posted to your bill as of the day you received the advance.
The cost of a cash advance is also higher because there generally is no grace period. Interest accrues from the moment the money is withdrawn. Also, most Credit Card Banks limit your cash out amount to a percentage of your Total Card Limit.
Card Holder Agreement -- The written statement that gives the terms and conditions of a credit card account. The cardholder agreement is required by Federal Reserve regulations. It must include the Annual Percentage Rate, the monthly minimum payment formula, annual fee if applicable, and the cardholder's rights in billing disputes.
Changes in the cardholder agreement may be made, with written advance notice, at any time by the issuer. Rules for imposing changes vary from state to state, but the rules that apply are those of the home state of the issuing bank, not the home state of the cardholder.
Finance Charge -- The charge for using a credit card, comprised of interest costs and other fees.
Floor -- The minimum rate possible on a variable-rate loan or line of credit, after any initial introductory rate period. For example, on a credit card with the Prime rate as its index, no matter how low the Prime rate drops, the rate on the line may never decrease below the stated rate floor.
Grace Period -- If the credit card user does not carry a balance, the grace period is the interest-free time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. People who carry a balance on their credit cards have no grace period.
Minimum Payment -- The minimum amount a cardholder can pay to keep the account from going into default. Some card issuers will set a high minimum if they are uncertain of the cardholder's ability to pay. Most card issuers require a minimum payment of two percent of the outstanding balance.
Over-the-Limit Fee -- A fee charged for exceeding the credit limit on the card balance.
Periodic Rate -- The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month. The daily periodic rate is the cost of credit per day.
Pre-Approved – A credit card offer with “pre approved” only means that a potential customer has passed a preliminary credit information screening.
A Credit Card Bank can still decline the customers it invited with “pre approved” junk mail if it doesn’t like the applicant’s overall credit rating.
Secured Card -- A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings. You must make sure that the Bank will report your payment activity the Three Major Credit Bureaus.
Teaser Rate -- Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.
Variable Interest Rate -- Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates or financial indexes such as Prime, LIBOR, Cost of Funds, Treasury Bills etc.
Congratulations, now you are ready to open that next credit card offer or your statement with complete confidence because you know how to read and interpret them.
We must always remember September 11, 2001. I hope we can all we reflect on this 10th anniversary of a horrific terrorist act and agree that America is still the greatest country in the world even with all the flaws and issues we are currently facing.
Let us not forget that we are still one nation under God. And that we must remain a government of the people, by the people, and for the people.
The best way we can honor and memorialize those that perished and suffered on that fateful day ten years ago is to keep our connection to our heritage and legacy alive.
I give talks on the “American Dream” by reminding my audiences of that connection. We must never forget the 56 men who committed an act of treason against King George by placing their name on that most famous document the “Declaration of Independence”. They, along with the other colonists, fought for freedom and liberty and, in the process, changed the course of history.
I am completing a book called, “Yes, the American Dream is Alive and Well”. My book shares stories of success of Americans young and old from the 18th Century to current day who have achieved their “American Dream” with all the hurdles and challenges along the way. The commonalities they all shared was an unwavering faith in their country and their God and a determination that would never allow them to give up their dream!
This 235 year legacy has allowed us to survive countless wars and, yes, even acts of terrorism against our beloved country.
Someone once said that “The greatest resource on the planet is American ingenuity and Americans have 100% of it. “
This is why I believe that America is not going to roll over and die as many are predicting. In fact, I believe that we Americans have our best days ahead of us not behind us. It is not because of what our government provides, but what our citizens produce in the form of goods, services, and jobs.
No matter how hard the government tries to legislate and restrict our freedom and ingenuity, the American people and our free enterprise system and capitalistic society we have built over the last 235 years will always find a way to succeed and prosper.
Because that’s what we have done and will continue to do. We have a legacy to uphold, a legacy of all the Americans who have gone before us and sacrificed everything so that their children and their descendants would enjoy a better life.
We must continue to pass that legacy along to our children and our grandchildren. So in the end, I am and will remain an eternally optimistic American Patriot!!!
