Have you ever felt so fatigued over an extended period of time that you have thought to yourself, “I just don’t know how I can continue to keep this pace up.” I’m sure some of you have thought this before many times. I know this thought became more frequent for me over a period of 6 months.

We get to a place like this when we are living off adrenalin or we are operating at peak capacity for way too long. It is so important that you be a steward of the energy that God has given to you. You only have so many pockets of energy to do so many things in any one day. Life is a marathon and not a sprint and so like any distance runner does you must steward your energy to last over the length of the race you are running.

Each of us has been wired differently and with different engine capacity. Some of you have 4 cylinder engines and some of you have V6 engines and some of you are a V8. Regardless of what engine capacity you have been given you not only need to steward it but you can extend your capacity to serve you well over the course of your life.

Simple but profound things like sleep routines, healthy diet, regular exercise, multi-vitamins, tank filling activities, margin and most importantly time with God will refresh you and fill your cup back up to fulfill the call God has given to you. One of the keys that has helped me return to greater energy and passion in life and ministry has been MARGIN!

Margin for me looks like creating space between appointments. It looks like having a clear finish and start time for work responsibilities. It looks like not overcrowding my schedule with person after person and task after task. It looks like prioritising the top 5% of what God has called me to do over everything else. It looks like having a little extra in reserve rather than feeling wasted at the end of every day.

I’ve recognized that I can’t do as much as what I would like to do and still stay healthy spiritually, physically, emotionally and mentally over an extended period of time. I remember a time in the not too distant past when I would have back to back meetings literally from 6.30am to 9.30pm at night on a Tuesday. Tuesday is a massive day in the church office but i don’t do this anymore because it’s unwise and not what God has asked me to do. Crisis of the heart wakes you up and calls you to change your life. If you don’t, you become another statistic. Create margin in your life and keep some energy in reserve for the surprises of life. Love you all!

Lead the Change!

We all know how to calculate margin in the simplest form by subtracting the cost of goods from the price those goods were sold for, but do many sales people, experienced or not, understand how to sell margin to their clients, suspects or prospects? When people on the street are all hyped up by presenting features and benefits, margin seems to be the last thing on their minds. What is the first thing on the mind at the executive level of the companies those salespeople are pursuing? Well, at that level it is profit or the operating margin of the business.

Rise to the Head of the Class

Features and Benefits are old school issues today. I didn’t say they weren’t important, just old school. The business development people that will rise to the head of the class and become highly profitable for their employers, and highly valued by their customers, are the ones that can provide products and services that generate profit for those customers and clients. Features and Benefits are a surface level approach that can be challenged by a “me too” competitor that is willing to drop price or make unreliable commitments. Everyone knows the downside of those experiences.

What’s the big picture?

Business development teams that can understand the business issues of the people they interact with will provide more value for longer periods of time and at higher margins. Knowing why a feature or benefit is valuable from the prospect’s perspective will build more trust than simply knowing what those features and benefits are. Features and benefits are “seller-centric” in nature, and if not attached to the total financial picture of a prospect they can be too assumptive and quite easy to ignore. The challenge then becomes how to open a business / profit conversation that doesn’t begin with a feature / benefit or price cutting pitch.

You don’t have to hire all MBA’s, but what would happen if your team embraced a little bit more business sense out on the street?

  NASCAR Sprint Cup Top 10 Closest Championship Points Margin

* Indicates Chase for the NASCAR Sprint Cup format used

The purpose of this blog is to show a friend how to double his original $2k investment in 3 months or less using the following criterias:

1) The portfolio will start with $2000
2) I will sell a position when it hits my 3% stop loss (i.e. u buy XYZ @ 6.50..at 6.31 my stop loss would kick in)
3) I will only make a maximum of 3 day trades/week , since I’m stuck under the PDT rule (but I can swing trade)
4) The account will have margin (so i can short…but will not use margin buying power to purchase stocks)
5) In order to maximize my returns, I will go all in on each position (go big or go broke)….not recommended!!!

..3….2….1…muahhhaa….here we go…..

\usepackage[margin=1.5cm]{geometry}

The more your product weighs, the higher your delivery cost; the larger it is, the more packaging it will need. Both weight and size put up your price without putting up your profit.

Most carriers charge more for their services than the Post Office; and the Post Office has a rate scale that increases with weight, and a maximum weight for parcels of 25kg. For higher weights than this you are obliged to use non-Post Office carriers. One way or another, the heavier your product, the more it will cost to despatch.

Whether you separately identify delivery cost in your advertising or embody it in a so-called delivery-free product price, it forms an important element in the mail order calculation, and it must be considered at a very early stage in your product search.

Ideally, delivery cost should be only a small addition to the product price — preferably not more than about 15 per cent — if it is not to put customers off. The higher the price of the product, the less you need to worry about weight; the lower the price, the more important it is.

Note that it is price/weight ratio that matters, not cost/weight ratio. It can well happen, especially if you are the manufacturer, that the cost to you of the product is lower than the cost of shipping it. That doesn’t matter. The figures that have to be weighed against each other are the price the customer pays for the product itself compared with the amount he has to pay to get the product delivered.

How is your profit margin? Are you profit earner?

Most people new to retailing experience a mild shock when they first learn the prices at which goods change hands within the trade compared to the prices at which they are sold to the public. It seems that traders must be making fortunes. Typically, for example, a book selling in the shops for £9 may be available within the trade for £6, or a TV set selling for £250 may have a trade price of no more than £180. With such profit margins, the beginner is tempted to believe he could make his first million in a year at most. It isn’t so, of course. The profit margins illustrated above, though fairly typical, are only gross profit margins. The trader’s real profit — his net profit — is not the simple difference between his selling price and his buying price, but between his selling price on the one hand and his buying price, advertising costs, rent, rates, wages bill, stationery, postage, insurance, heating, lighting, telephone, accountancy, bank charges, interest charges, equipment purchase and maintenance and other overhead costs on the other.

The 3:1 ratio

The new mail trader operating in a small way, and possibly running his business from home, may be spared some of these costs, but advertising and shipping costs alone can be heavy, and the gross profit margin must be large enough to cover these costs and still leave a net profit. The conventional wisdom is that about a third of the mail order selling price is needed to meet the cost of advertising the product. This means that just to break even on your advertising, you probably need a 50 per cent mark-up — that is, a selling price half as much again as your buying price. For example, buying for £6 and selling for £9 will at best allow you to cover your advertising costs but nothing more. Buy for £6 and sell for £8, and you can confidently expect to lose money.

This is, of course, a crude generalisation, and any actual set of results may contradict it. But in the absence of specific evidence with a particular product, earmark a third of your selling price to pay for your advertising.

What sort of gross profit margin, then, are you looking for? Again, the generalisation is crude, but something like a two- thirds gross profit margin is desirable if you are to have a realistic chance of making a net profit. One-third of the selling price, as already suggested, will hopefully cover your advertising cost, and another third will cover everything else and give you a chance of being left with a profit.

For example, if you’re buying for £6, you must consider selling for not less than £18. That may look like an enormous profit, but it isn’t. Most of the ‘profit‘ will go in paying for the promotion, processing the enquiries, and fulfilling the orders.

It comes to this: your selling price will probably need to be not less than three times your buying price if you are aiming to make an immediate net profit from your advertising. This is the 3:1 ratio to keep in mind as you assess likely products. If you’re thinking of dealing in Whatsits, and they are typically being retailed at £12, you can see at once that you can’t afford to pay more than £4 yourself. And again: if you manufacture something yourself for £10, you will probably need to sell it for £30 or more to have a chance of making a profit, and if £30 looks ridiculously high as a retail price — well, back to the drawing board.

We talk about the need to downsize to accommodate reduced revenues and increased overhead, and frequently we  focused on reducing payroll,  negotiating a discount on rent, and reducing other controllable overhead items, all good ideas, actually necessary strategies in today’s changing economy.

However we seldom talk about the need to reduce our client base, sounds crazy. Why would we ever want to do that, especially when confronting reduced revenues?

If anything we want to increase the number of clients we have, not reduce the number.

Is a simple concept most often overlooked but a very necessary evaluation and  an effective internal adjustment that will yield great results.

Over time, in our effort to build sales revenues, one frequently ignores the profit earned from each sale and from each customer, focusing more on gross revenue, believing the higher the better.

In our drive to build gross revenues we forget net profit is far more important.

Thus we sometimes sell at the lowest price to small volume clients or we give away shipping charges, or we sell to clients who pay in 120 days, bounce checks and always owe you as they order every 90 days. Sometimes we have sales and extend the sale price indefinitely, sometimes we have sales and only manage to sell the same amount to the same clients but at lower prices achieving no gain,  and on it goes. There are many ways we erode our profit, yet our cost of goods and overhead remains the same.

This reduces our net profit  which is damaging to our well being and we do it to ourselves.

So here is the fix. Review your clients one at a  time and evaluate whether or not  each one is worth keeping as a client. When you discover prices too low, or net profit being eroded for any reason, call the client explain you must adjust appropriately as they will no longer be shipped at the previous terms and conditions. If they reject the changes good let them go, If they stay with new terms and conditions even better.

You are unlikely to make more profit selling more goods or services at low margins, too low to yield adequate net profit. It does not work. In fact you will find out that most of your profit comes from a small percentage of your clients and if these were the only ones you had, you could downsize and increase profitability simultaneously.

Review your client base and the sales you are making  to each one, see what it looks like and then make the appropriate decisions one at a time.  You may be able to increase profit and reduce payroll This is quality downsizing.

Do it, it works.

(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) – The Prime Minister Kevin Rudd has made a plea to the Opposition to negotiate a deal on climate change in good faith.

<p class="first" style="font-family: Verdana, 'Lucida Grande', 'Bitstream Vera Sans', Helvetica, Arial, sans-serif; font-size: 12px; word-wrap: break-word; line-height: 18px; Margin-top: 0px; Margin-right: 0px; Margin-bottom: 0.8em; margin-left: 0px; font-weight: bold; “>The Government wants a vote in November and the Mr Rudd says the Opposition needs to be “fair dinkum”.

“We need a result for Australia and that’s why we’re prepared to negotiate in good faith,” he said.

The Treasurer Wayne Swan remains sceptical it will happen, as the Liberals are still divided on how to approach the issue.

“I don’t believe the Liberal Party are serious about negotiating,” he said.

Opposition Leader Malcolm Turnbull is facing a push by West Australian Liberals for negotiations on emissions trading not to be concluded until after the Copenhagen Summit.

But senior Liberal MPs have put up a united front on climate change and are rallying behind their leader.

Opposition Senate Leader Nick Minchin has told Channel Ten he is confident the partyroom will agree to amendments at a meeting next weekend.

“It is our job to fight to protect jobs,” he said.

On Channel Nine, Opposition frontbencher Christopher Pyne called for an end to the public bickering.

“Build a bridge and get over it,” he said.

“Marginal seat holders feel that their colleagues are being loose units on the battlefield should button up and let their marginal seat holders have a real chance of winning at the next election.”

But Mr Pyne acknowledged it is a testing time for Mr Turnbull.

“They say that the strongest steel is forged in the hottest fires,” he said.

Shadow Cabinet will ask the Coalition partyroom next weekend to agree to amendments to the ETS.

Meanwhile, the Greens are urging the Government to scrap plans to negotiate with the Opposition on emissions trading and instead do a deal with the Greens.

The Greens will announce its amendments to the ETS tomorrow, including tougher targets and no compensation for coal-fired generators.

The Opposition plans to take its proposed amendments to a partyroom meeting in Canberra next Sunday.

Greens Senator Christine Milne has told Sky Agenda the party is ready to negotiate with the Government.

“If the Government is serious about getting an outcome before Copenhagen, if they want to not lock in failure but actually get a scheme that addresses climate change, the Greens are ready and willing to do that,” she said.

“We have amendments to their carbon pollution reduction scheme, which would make it effective.”

Source: Rudd calls for 'fair dinkum' climate negotiations

The ICT market is famous for a complex and differentiated distribution model. But who is making the highest profit margins in the chain? The vendor, the distributor, the reseller or the software specialist? And what is that profit the different entities are making. To get some insight we have conducted a survey (in Dutch). If you are active in the ICT value chain (with software), please have a look at: Margins in ICT survey

Growing up I loved the “Where is Waldo” books.  Now that I am older it seems the joy that I have in the puzzle is still the same but the lessons I learn are different.  As an adult doing the puzzle I learn that in the midst of the business that goes on it is so easy to get lost, and get distracted by all the other things that I forget the real purpose of the puzzle, to find Waldo.  In life I forget the SIMPLICITY of Christ personally.

It has been sooooo long since I have written anything and I missed it.  Creating a habit of blogging…sharing and writing all that goes on has been so good for me.  Mark Batterson says, “its like journaling with a keyboard.” There is a freedom and realization that happens when I write. Yet is has been so long since I have written anything.  It is as if instead of Where is Waldo” it has been, “Where is Chris?” It’s time that I get back into the habit, or should I say the rhythm of this part of my life.  It truly is just that, creating margin is found in SIMPLICITY, and found in the RHYTHM of life.

Over the past few weeks it has been a title wave of adventure, work, planning, meetings, victories and struggles.  I love it and never get tired “of” it, but the reality is that I do get tired “in” it.  There is one thing that I am sure of in the midst of all that is going on.  It is the SIMPLICITY and TRUTH that God is GOOD and God is FAITHFUL!!  It is up to me to learn to create margin so that when I do get tired “in” it that I don’t get tired “of” it.

The most challenging situation by far was what Wendy and I experienced two weeks ago.  Wendy had her second miscarriage, almost exactly a year apart.  Yet in the midst of all that we have walked through with that she said something that amazed me yet did not surprise me.  She said, “In the midst of all that has gone on there have been many things that I have felt, but alone is not one of them.”

As I heard her speak these words I thought about what an incredible God that we serve.  Even in the loss of a baby, His grace has truly covered us and carried us.  My wife is truly remarkable and such a gift!  Day by day I am challenged by her and encouraged by her strength and confidence that is found in Christ! I often say that if God had favorites that she is one of them!  Through all that the Lord had been preparing in my heart about simplicty and margin, it was as if He had been preparing me for this moment, and that is exactly how God works.

He prepares us for what we can not see and what is yet to come.  This past week has been such a great week in applying and living out creating margin with the Lord, and with Wendy.  While the week has been difficult at times emotionally with the loss of a baby, it has been the most rewarding in walking in the simplicity of what God has been teaching us.

Thank you to all those who have been praying for us, we love you and appreciate you.  We can feel your prayers!

Currently, eBooks such as the Amazon Kindle, personally are not very appealing with the massive keyboard at the bottom. The Bibliofile designed by Nadeem Haidary, is a much simpler design with a beautiful Active Reader margin offering navigation tools, dictionary and word-games making your reading experience even more enjoyable. Flipping the margin up can go forward and slipping back goes to the previous page.

Visit my Mahalo page for Beastly

Via Nadeem Haidary

I noticed that about 6 years ago people really started getting a lot less scared of purchasing electronics on the internet. This created a snowball effect that began with dealers listing all their equipment on Ebay and tons of other online outlets for as little as they could. Dealers started to realize that if they had the best price online they would capture market share from all over the country. They thought that even if they were making a couple bucks on every product they would make up for it in volume.

Dealers were “supposed” to sell products for full retail, but consumers were shopping nationally for the best price especially without having to pay city sales tax and the margins eroded to a point of no return due to the emergence of price shopping engines. Manufacturers didn’t even know how to stop the erosion because it happened so quickly and now many car audio manufacturers, distributors, and stores are shutting their doors for good or trying to skate by with 5% margins in this economy. I get calls everyday from people that have nowhere in their own town to try out gear and many times they don’t even realize they may have contributed a small part to the reason local dealers are no longer around.

I always think it’s funny when people say that by paying full price they are getting “screwed” because what they don’t realize is that when you have a retail store with overhead you typically have well trained staff and great service. Customers can come in and spend hours listening to different speakers and amplifiers and in the end many of them go elsewhere to buy. As this is frustrating I can relate and realize that customers from all over the US are calling us to save on tax and get a better deal than their local store as well, but where do you draw the line as a dealer?  Becoming a reseller for many mid to high end speakers and electronics is hard to do (as it is for any protected line) and manufacturers require big financial commitments. Manufacturer reps will assess the look and feel of your store to see if you are a good fit for them (this sometimes takes months or years). Next they stress the importance of MAP pricing yet they are not legally allowed to tell you what to sell for or discuss pricing. Many reps tell you that if they catch you selling below a certain price or selling out of your territory that you will be stripped of your dealership. Electronics manufacturer says these things all the time but who can stores trust to actually means it? Who actually enforces it? Only a handful of companies actually do enforce their rules by keeping track of their distribution channels and policing dealers and online stores throughout the country which I’m sure is very costly. Some of the big TV companies such as Samsung secretly care only about market share and as a result there are hundreds of online stores including us that are practically giving away their products for 6-8% margin. Lets take for example a $3000 retail price for a TV. The distributor we get the TV from will say that our cost is $1900 and the the TV is supposed to be sold for 3K, but the price search engines tell a different story of the TV’s retail price needing to be $2300 which is what we set it at. Now lets take that price and factor in that the customer wants to have the TV shipped to any state which will cost roughly $200.  Credit card processing costing around 2%-3% depending on the card as well. In Total  the store makes about 8% or around $150 total on the TV. This margin structure is not sustainable for big E-tailers and small stores alike and something will have to give.
There are really two sides to this story…the customer wants the best price possible and the store either online or not that wants to sell products. I was making a quote for Sonance in-wall speakers throughout a large house. The manufacturers rep said that the speakers were not allowed to be sold online. After the customer reviewed the quote for a couple days he came back and said that our price was “far too high” because he found the speakers for a lot less online…Now I am in a situation where I look like the bad guy “trying to screw my customer” and that’s not it at all. We obviously matched the price, but it is an embarrassing situation for any dealer to get themselves in especially when the supposed protected line is getting sold everywhere.

I would rather make some money than no money at all, but there are a couple different sides to this story with quite a few complexities. The bottom line is that there is a constant push and pull between manufacturers and stores both on the internet and brick/mortar. In the old days you had to compete in your local market and this quickly dwindling philosophy is making way for other methods of sales that many manufacturers and dealers are not quite ready for.

Hopefully the relationship of  customer to company that was prevalent with brick and mortar stores  will come back one day into the less personal “buy it now”  online marketplace.  The emergence of many FREE social media outlets allows companies like us to video blog and create a brand not around the products we are trying to sell, but who the owners are and their integrity so customers can judge just like they do in a retail store if they like dealing with you or not.

Market share is the ratio of the competitor’s annual sales to the total annual sales of competitive products in the market being served by the competitors. It is usually measured by dividing the  competitor’s sales in dollars by the total sales volume in dollars for the industry. Dollars are used in the calculation because monetary value is usually easy to obtain.

As may be seen from the dimensions describing the horizontal axis of the economic experience curve. It would make more sense to measure the market share in units sold during the year. Dollar volume does not double when volume in units shipped doubles if price decreases with experience.

The dimensions of the experience curve are fully allocated unit expense in constant dollars and cumulative number of units produced. The reference to doubling sales is measured in units shipped. Because this kind of measure could be counted off on the horizontal axis of the curve, it is possible to relate the growth in shipments to fully allocated expense in constant dollards, a reasonable profit margin, and the resulting dollar volume of sales.

The difficulty in obtaining the information needed to calculate market shares in terms of units shipped is often resolved by trade association data, which reports in both units and dollars. Still the associations may not include every possible competitor among their membership. In almost all cases, however, the non-members are not big enough to be significant. Even without the non-member data, the trade association information is a good approximation to the actual figures.

Given that sufficient data is available, it is not entirely necessary to know a competitor’s exact market share. The information most meaningful to a manager is market share compared to that of the nearest competitor. This gives rise to the concept of a market share ratio.

A proposed ratio that has special meaning when used in conjunction with the economic experience curve. The ratio may be best understood as:

Market Share Ratio =   Your Market Share __________

Market Share of Your Biggest Competitor

The interesting result of defining the ratio this way is that only one competitor has a ratio greater than one. All the others have functional ratios, less than one. For instance, if you the largest market share your biggest competitor will have a smaller share than you, and your ratio will be a number greater than one. If your biggest competitor has a market share larger than yours, your ratio will be less than one.

Because only one competitor has market share ratio greater than unity, the dominant competitor is identified by a number greater than one. Also, the degree of the biggest competitor’s dominance is indicated by the size of the number.

Typically, when a new business concept arises that can be represented by an economic experience curve, several competitors enter the marketplace within a very short span of time. There is an initial market penetratiuon in which market shares are established. Managers have learned how difficult it is to change the market share of the competitors once they have been established. Market shares among suppliers who are competing forcefully tend to remain reasonably constant. Cummulative experience relative to other competitors tends to be aligned with the market share ratios.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Over the past few weeks I have been developing a business plan for a business I would like to open in the Lakeview neighborhood of Chicago Illinois.  It has been quite the learning experience, but I have a lot more to do before it is completed.  As it stands, I have a rough business plan generated and a preliminary cash flow statement.

To develop the cash flow statement, I used my extraordinary Excel skills and created a tool that is quite robust.  The tool has a multitude of settings including options for new or used equipment, leases, energy, Point-of-sale system, labor, and raw materials, among others.  All which can be edited on a granular level, down to the cost of each raw material.  Utilizing a bill-of-material,  expected sales quantity, and retail price for each item, a revenue stream and cost-of-goods-sold is created to develop a net margin.  Along side fixed costs, initial equity infusion, and loan payments, the tool can generate the first eight quarters of cash flow.  It is quite the tool if you ask me!

Hopefully in the future I will post the plan here to get some feedback.  Until then, enjoy the rest of your day!

This past week shows why there is a difference in being just plain wrong and being DEAD wrong.  All three games that I picked incorrectly had an average victory (or in this case, defeat) margin of 32 points!  Guess you can tell how bad it’s going when it’s only halftime and the team you picked is down by more than two touchdowns.  Still, I did manage to once again salvage this week by picking the other four correctly, even if the margin wasn’t as wide.  Anyway, here is how well (or badly) I turned out.

OH, YES I DID!

• NORTH CAROLINA 42, Georgia Southern 12
• WAKE FOREST 42, Maryland 35
• MIAMI 48, Florida A &M 16
• GEORGIA TECH 49, Florida State 44

OH, NO I DIDN’T!

• Virginia Tech 48, BOSTON COLLEGE 14
• Virginia 47, INDIANA 7
• Duke 49, NC STATE 28

TOTALS

• This Week – 4 wins, 3 losses
• Overall – 34 wins, 19 losses (64.2% winning percentage)

It has been said that businesses can anticipate the frugal spending to remain strong, for some time, even after we come out of the recession.  So, if you were a business that was just getting by and looking to capitalize on changes in spending behavior (post recession), you may want to change your approach and work on ways to increase revenue and / or increase your net margins.

One of the ways you can increase your net margins is by conducting a company wide spend analysis (This can be for large or small businesses).  You should look to see what you are spending, internally, and decide if there is another way you can group your spend and gain leverage to negotiate better pricing, quality, service, reduce inventory, etc. which will help you lower your expenses.  You can pass this along to your customers or take the additional PBIT margin.

I have a financial analyst job that trucks along at 40 MPH for a while, then has intense 80 MPH blasts other times.  I work around people that seem to go at 80 MPH all the time. 

My busiest times can be the times I’m most vulnerable to stress and acting out.  The slowest times are also times of vulnerability.

TOO MUCH MPH
A fast, intense life leaves you little room for other things.  Healthy relationships.  Your spouse.  Your kids.  God.  You have less margin.  Less room for emergencies.  Less reacation time.  More stress. 

Many people busy themselves and work crazy hours to cover the pain of life.  Work and business helps us to not have to think about our own hurts. 
TOO LITTLE MPH
On the flip side, the slow-paced, casual life can be triggery too.  Gaps of time.  Boredom.  Quest for entertainment, stimulation, and pleasure. 

Huge gaps of time can cause us to focus so much on the pain that we lose hope. 
Q:  What’s the MPH for your job?  For your life right now?
Q:  How are you dealing with the stresses of life?
Q:  Are you making living in the reality of your life, or trying to mask life’s pain?

When it comes to selecting an investment property, there are a few issues that every landlord must take into account. No matter how wonderful a property is or how eager you are to invest, never make a property investment without carefully evaluating the following items on your property investment checklist.

1. Calculate your profitability.
Although determining the likely profitability of an investment property may seem like a given, you might be surprised how many investors find themselves in a losing situation simply because they fail to do the math. Before buying an investment property at any price point, be sure you carefully determine how much rental income you are likely to generate on an annual basis. Weigh this against not only your mortgage and property taxes, but also all of the other costs that are likely to occur over the course of a year, such as advertising vacancies and doing general repairs and maintenance.

When calculating these costs, be conservative when estimating income and err towards over-estimating your outgoing expenses. You want to make sure you have enough wiggle room in your profit margins to afford your investment property payments no matter what unforeseen events may unfold in a given year.

About.com’s real estate business page offers some great calculation tools that will help you calculate your risk based on several different variables.

2. Get inside renters’ minds.
Sure, you’re the one who’s purchasing the investment property but never forget that you are purchasing it for the purpose of renting it out to tenants. Which means that while you obviously have to make a pragmatic investment decision, you also have to think like a renter. Take a long hard look at exactly what sort of properties seem to be the most desirable in your area. Evaluate things like number of bedrooms, location, square footage, and other amenities. Knowing what renters want ahead of time helps guarantee that you won’t struggle to fill vacancies or be forced to settle for less desirable tenants later down the line.

3. Think long-term.
Will this property still be good a few years down the line? Remember, when it comes to investments, you’re not only investing in your financial well-being—you’re also investing in your future. Which is why it’s so important to take a good, hard look at long-term trends in areas you are considering. Look at city and county records to see how the neighborhood you’re looking at buying into is trending. Have properties been increasing or decreasing in value over the past five or ten years? How about crime rates? Has the demographic remained stable over the past decade or has it evolved (for instance, are residents generally shifting from families to young, single occupants)?

While no one can predict the future, much can be learned from the past. Make sure that you know exactly what direction the neighborhood you’re thinking about buying is headed.

Checking these few items off your Property Investment Checklist can make all the difference between a good investment and a bad one.

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• The U.S. Stock Market has dropped for the past two weeks. 
• American workers are having a difficult time looking for work. 
• The unemployment data was revised lower last week.
• U.S. unemployment is now coming is at 9.8%
• Several States (California) are already over 10% unemployment.
• 98 American Banks have failed so far this year.
• The FDIC needs cash.
• Housing defaluts are still a problem.
• There  are serious doubts about the U.S. recovery around the world.
• Asian markets are starting off on Monday cautiously worried about the U.S.
• Oil continues to slide lower about 1 percent to settle in just below $70 a barrel on Friday.
• Earning reports for the 3rd quarter haven’t even begun to roll in!

Several market timers are calling for a 10% – 15% correction. 

Liz Ann Sonders at Schwab is “optimistically cautious” and is looking for better days ahead.  In her September Market Snapshot she talks about “green shoots” that may just be weeds.  She comforts investors’ fears that the stock market has moved to far too fast.  In the long run she feels the we have made our bottom. According to Liz Ann, the worst is over.

Honestly, can it get much worse? 

Some are saying… Yes. 

It can get a lot worse!

A week ago I was laying in bed listening to Coast to Coast AM Radio. Art Bell had Joseph (Joe) Meyer on as a guest. He scared the H*^@ out of me!  Joe would not be at all surprised to see the U.S. Stock Market head lower. According to Joe, jobs and housing are the keys to this market recovery or down fall.

In his September issue of Straight Money Analysis, Mr. Meyer has concluded that the failure to create high wage jobs, consumer debt problems, along with the housing defaults… we are likely in for more bad times.  He also feels that the real estate crisis is far from being over and the next painful event will come from mortgage defaults in the commercial real estate markets. He did a great job explaining his position and I would encourage you to check out his views.

Joseph E. Meyer

Are we in a counted-trend rally? It looks that way since we’re up better than 50% since the March 09 lows.  Harry Dent, Charles Nenner and many other respected folks in the financial world are saying we are in a “generational wave down” that could take until 2012 to hit bottom.

What does this mean to investors? 

Know your comfort level.

Understand the risks you’re taking in the market. 

 2 RULES to remember in a down market environment:

RULE # 1.  If you are “margined” and the market drop, lets say 1,000 points in a day, you’ll get a margin call.  Margin calls are death to investors in a fast, sharp, or prolonged Bear Market. Margin Calls typically require you to sell 3′x the call amount to “right” your account back up.  If a Bear Markets goes on for days… this is going to burn through your stocks as fast as you can sell them.  So my advice is to lighted up on the margin positions.

RULE #2.  If you have a profit… especially from the March 09 lows, you may want to take some of it off the table and park it in a cash account. If the market does drop you’ll have lots of opportunities to buy low, and if the market hold up, you can always buy it back after 30 days and start a new cost basis in the position.

Joe Meyer has some ranges for us to keep an eye out for. He thinks we could test 10,000 on the DOW. The question he asked me when we spoke last Friday was, can we hold on to 10,000? If support is broken (support level is the March 2009 low of 6450 on the Dow) we could see the Dow drop to 4,123 or worse 2450 according to Mr. Meyer.

Let’s hope for the best… that high paying jobs are created and quickly.  Housing default and commercial real estate firms up, and neither of these market lows are tested.

My goal is to help you get “Financially Fit” in all markets.

There is always money to be made in up, down, and sideways markets.

Questions or comments, please email me at:  Joyce@Blonskij.com

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