Paycheck mentality versus cash flow mentality

This peaceful sounding stream isn't in this blog post to make you feel calm, or help you meditate. It's here as a metaphor.  But it's a 12 hour video, so if you want to play this in the background to help you relax in these stressful times, go for it.  

Most adults in this world have a really poor understanding of money.  Our school systems were intentionally set up to not teach averagepeople about money.  But that's a whole different matter.  This is a short blog post to explain a very basic idea, since 42 million plus people have recently been laid off, though a couple million have been re-hired, which is good. 

When you work a regular job, you get a paycheck.  If we use water as a metaphor for money, a paycheck is like getting a bucket of money.  You get a set amount, and you can use all of that money, that "bucket" of water, to pay your rent, mortgage, student loans, car loans, and buy food, clothes, household goods, and other products you need to survive.  If you have some extra, you can put some in savings, or maybe invest in something like your 401k, stocks, maybe a gold coin or two.

When you're used to working for paycheck, for that bucket of water, when you lose your job, you suddenly lose that week's bucket, and the bucket you're used to getting each week or two weeks. So you nautrally think about how to get another bucket of water (money), on a regular basis.  You sign up for unemployment, so the government will give you another, smaller bucket of money every week, to get by, until you can (hopefully) find a new job. 

But if you can't find a new job, and you decide to start some small business, you need to stop thinking about buckets of money.  A good business person thinks about money as a stream, like that one in the video above.  A business tries to build a stream of money, and ultimately, several streams, or even rivers. all flowing constantly.  You want money coming in day by day, in a constant stream.  You may get on the phone or computer and sell your product to create that stream every day.  You may have an online store where you have people ordering your products online, 24 hours a day, and you ship out the orders every day.  So as a business, you have bits of money coming in, continually, not one big bucket each week.  When you need to pay a bill, as a business, to buy office supplies, pay the rent on your office, or buy products to resell, you dip a bucket into your stream of cash, you take a little water out of the stream, and pay that expense.  But the business' stream, of money, keeps flowing (if you're doing a good job running it). 

So if you want to go from being someone who had worked a typical job, working for a paycheck, for your whole life, to someone who runs a small business, you need to change how you think about money.  It's not about getting another bucket of money, a big check.  It's about creating a continuous stream of money flowing through your business.  So think about that for a while, as you plan for how to move forward in this weird, crazy, Covid-19 affected world. 

There will NOT be enough good paying jobs for the next ten years. Period. Now what?

At the beginning of June, 2017, exactly three years ago, I moved out of my mom's small apartment in Kernersville, North Carolina, where I'd been living for "free" for nearly five years.  I moved into a lean-to, yes a freaking lean-to, in the woods in Winston-Salem.  I couldn't get hired for any job whatsoever in K-ville, and had begun to sell my Sharpie art online.  I started, literally, without a dime to my name, just art supplies, and a $65 refurbished laptop. 

My mom's place was a completely toxic environment, and she couldn't handle money.  Every time I sold a drawing, I couldn't even invest the $50 I made into more supplies.  I intentionally became homeless, simply to have the chance to build my art into a business, some day.  OK, it's still not a "real" business," but I've sold 90 or so originals, and over 100 prints, and have survived mostly off those art sales, ever since. 

After three days in the woods behind Bolton Park in Winston, some guy gave me an old, six man tent.  I lived in that for about 11 months, until a few days after the Carolina lynch mob showed up, in May 2018, insisting I stop blogging.  But that's a story for another day.  Anyhow, I had been a taxi driver before that, until computer dispatching (new technology) disrupted the taxi industry (before Uber and Lyft disrupted it more). 

I'm smart, I can learn most skills quickly, I work hard and smart, but I still couldn't find a job in that area.  ANY job.  I didn't start selling art with some dream of being a famous artist some day.  I started selling it because selling my Sharpie drawings was the only thing that made me any money at the time.  Art was simply the best place for me to start.  I've had several people help me along the way, in bits and pieces, but I've never been able to raise enough money, at one time, to give my business a legitimate chance at success.  But I have sold a lot of artwork. 

Three weeks into living in the woods behind Bolton Park in Winston, I started a new blog, combining my Old School BMX freestyle stories, my Sharpie scribble style artwork, and my thoughts on the future and the economy.  That last part is what my geeky, brainiac side is fascinated with.  The second blog post I wrote, this one, on June 27th 2017, was about the long term trend of humans losing jobs to new technology.  I embedded the very same video above in that post.  I saw this long term trend of massive job loss as one of the biggest issues facing our society in the next 20 years or so.  It's part of our continuing shift from an Industrial Age society, to a fully functional Information Age society.

A study by Oxford University, in England, in 2013, concluded that about 47% of all human jobs, could be lost to new technology, "in the next 20 years."  Hey, guess what?  We are now 7 years into that 20 years.  Even worse, 40 million Americans have lost their jobs in the last 2 1/2 months.  Most of those are supposed to be temporary layoffs, but it's becoming clear maybe half will be permanent. 

This brings us to the uncomfortable truth, there simply will not be enough good paying, traditional jobs, for the next ten years, and probably 20 years.  So what do we do?  

Professor Richard Florida, known for writing the book, The Rise of the Creative Class, and several later books and articles, suggests working to make service worker jobs better paying jobs, through unions, getting Congress to raise minimum wages, and other similar measures.  That's a great idea.  But it requires American Republicans and Democrats to work together on a major issue.  I simply don't see that happening fast enough, if at all.  Those who want to work on that issue, more power to you.

In three years of thinking about this issue, the best real world solution I see is for millions of Americans to start some kind of small business of their own.  For a couple of years now, I've thought working to encourage and help millions of Americans to "create their own job," in other words, some small business or freelance gig, is the best solution. 

With the Covid-19 pandemic triggering the already weak economy to finally collapse, we're now in the place where some solution needs to happen, fast.  So if you're suddenly out of work, along with 40+ million recently laid off people, and 4 1/2 million unemployed before that, what do you do?  Start by asking yourself these questions?

What skills do you have that you may be able to do as a freelancer, side gig, or small business?

Are you willing to learn the other skills needed, and take on the responsibility, of being a small business?

Look around your town or city.  What products and services does it need right now?  Can you provide any of those?

What do you actually like to do?  You're much more likely to stick with something you enjoy (for the most part), than with something you're doing just for the money.  

 What ideas came to mind answering these questions?  Start there.

As I struggle to get my own little business going, this blog will share my thoughts, ideas, lessons learned (from successes and failures), and videos from other people, creating and thriving in small businesses.  Hope it may help you in this crazy time we find ourselves in.  Much more to come.