Monday, December 12, 2016

Career Tips Today From an Old Timer?

Would my career tips be worth a jott in today's app and big data driven world?  Or are my generation a weak link between the semi digital, nine-to-five past and the cloud sharing economy of the very near future?

Well the fact is that a career will still exist, although there is now a lot of pressure for the form of that work-employee-contractor status to change, really much of this is reinventing the wheel and mediating it via mobile phones. Essentially, value will still be created in its significant form via organisations, and those will still need intellect and management.

I choose a route I regret a little now, having a portfolio career and becoming a consultant, now finding it quite a lonely place with obvious uncertainties. The nature of employment and corporate law is that the world is becoming more uncertain as the Neo Liberal era goes through its dieing throws and reinvents itself as something which democracy will probably overthrow. Hence Brexit and Trump, and watch this political space because it will affect your ability to earn and have a work-life balance. Organisations will always need talent, but in my experience very often those in management are there because they had luck or pushed a little more at the right times to get up the ladder.  That ladder is a rarer thing as we go into yet more flat structures and what used to be departmental becomes compartmental ie single layer of workers use the tools of IT to manage and take responsibility for operations with a shorter chain of command.

How do you perhaps get on and what advice (take it or leave it) do I have ?

1) Experience Can Count for Qualifications , but often Not At All.....

It is really that the RIGHT experience can count for a mountain of qualifications. That is an experience which is highly respected or puts you in a position of power. The best example of course, is starting your own company - most of the Billionaires in computing, software and apps didn't start with a PhD or an MBA, they had an idea or two and found customers. In fact several never finished their degrees.

2) Get in Early to Something Big

This is what quite a few of the entrepreneurs above, like Bill Gates, Steve Jobs and laterly, Mark Zuckenberg had the fortuity to be in - on the cusp, riding the crest of a wave, on the brink of explosive growth. There was a lot of fortuity in what they were into in a nerdy way, and what the market wanted in a latent sense.

Ok we all can't be Richard Branson but we can find those companies which are on the cusp of something new and exciting and get in there at the right time. Too early ? Well you may not get any pay back if you are in too early but then again you may be able to use that to get out to a competitor or move into another high growth company. Investors act like this, investing via venture capital in a spread bet over several companies in a sunrise industry.

Think of your time as a young person as investment from which you will get a greater return, and those 12 hour days and weekend hours  you put in then, will pay dividends in getting up the ladder with this as your launch pad. However you need to get the right type of job which is of above average value, and that means either being involved in creation (R&D) where you can put your name on something so to speak, or being a person who becomes a people manager early on.

3) Don't hang Around Too Long Sometimes< Other Times Stick Like Glue

I have experienced the downside of being in Tech Start ups where I have either been a dropped in consulttant or discovered as a 'hire' I was very much outside the A team. Most of all for the first three years out of my masters I tried to hold onto rubbish opportunities and work 'that year on the CV'.

Eventually I worked for a really interesting full service technology marketing agency, but while there a couple of years I noticed that I was the employee in project management and new clients who stayed on, the others fell away after less than a year very often. I felt I had to make a go of a job after three years of false starts, and enjoyed the work. The others got less interesting positions and clients and they got out very quickly. Two of the many who left, got much better jobs which I believe they stayed at for many years.

It is very much a feature of successful people be they employees or entrepreneurs, that they admit their mistakes and cut their losses getting out early. A lot of people take a first graduate job in one or other also ran, unknown branded companies, and treat it just as work experience and a spring board to the next job. Zuckenberg wanted a kind of on line girl rating, beauty pageant and dating app and when he saw the light of 'political correctness' became a multimillionaire on a year's work and making the right connections - he dumped his first, unlovely idea.

Which brings us to....

4) Always be Applying for Jobs and Looking for New Opportunities

There will be less job security in the ongoing political climate across the west, because the right wing want to reduce costs and make us work harder via insecurity rather than positivity. So if you work for an insecure, pushy boss culltured company or department, get the hell out! Many companies don't subscribe to fear makes work, they know the real motivation and productivifty comes from engagement and employees who have a work-life balance.

Job security is really a figment of the imagination nowadays for we of the mere mortals, and even chartered accountants are quaking in their boots as the new generation of leaders finally seek to automate much of what should have been automated in the 1980s when it was first possible!  We are all subject to take overs, cut backs, customer volatility, exchange rates and the whims of bosses and investors. Jobs then are just RELATIVELY safe, and if we see an environmental pressure on a company then it is time to get out early, that is where the smarty pants will., This is true of industries, with many of my former colleagues in Oil and Gas smooching their way into unrelated industries before the death knell tolled.

Always looking for new jobs has two other effects on promotion. One you can find opportunities to get promoted outside your company, and two you can use a job offer as a lever to get promoted. As I blogged on before, employees usually think they have a poor set of cards in the poker game of getting a job and a salary rise, and it seems that the risk of withdrawing their labour lies predominantly on their shoulders. Hence in the deunionised western office world, employers hold their poker face and will call you before you call them. In reality, very often you have very specific qualifications and experience which got you the job and the knowledge and experience you have of working there makes you uniquely productive. Bosses have targets for turn over, so as I found out when I was emmigrating anyway, they will offer quite a lot suddenly to keep you on when you resign.

Open applications with a personal follow up call are a really effective way of moving job either externally, or if handled correctly, internally. It is no mystery that interesting companies and exciting opportunities are often never advertised, while those positions which are are either hard to fill or they are looking for the cheapest in the trawl.

Companies are increasingly run on quarter-capitalist lines, and when they are buzzing away in a growth phase, then is the time to get a job offer as a lever to promotion. Alternatively when a company is struggling, then it is a great time to spot this early and have a plan B, which may become your plan A very shortly. When you are an employee then it is understood by the prospective employer that there will be a period of cessation under contract, and they may want to look at the open market of ready to go first, so it can take up to two months or more to get an offer from the outset of first interview. It can be wise to refer ' I will need to check my contract' on cessation such that you can keep your options a little open.

5) Recognise the GOOD opportunity from the BAD

This really applies to all the above scenarios and the ones below by in large. It is my greatest weakness in working life as an employee, yet a strength as a consultant now because I see my earlier failings. All jobs have some shit in them, but it is really how doing the whole job, dotting the i's and crossing the t's as well as the more interesting stuff, builds your position as in standing and respect in a company contra just being an eager beaver minion.

I have been a victim myself of 'imposter syndrome' where in one job I had with a multi national, I had a great level of responsibility as a project manager with upto 13 poeople working for me at anyone time and me conducting the orchestra, yet I felt it was all a bit scary and almost an out of body experience. I was treated with loads of respect and  that made me more nervous for crashing and being shown up as an imposter. I tackled it really pretty well, with only one minor fiasco which was mainly on the part of the client. After that I setteled a little more into my shoes, but had decided to move to be with my girl freind unfortunately! I should have stayed, because the girl went bad!!!

A good situation would include being trusted with incresing levels of responsibility and tackling the job with a minimum of overtime. A bad situation would be drowining in tedious operational work, and like a labour of Sysiphus, you work more overtime for diminishing producitivity. Worse, you get recognised by the users above you as a nice little work horse for doing their menial work. GTFO - get the fuck out- is the course of action for all but the masochists. Renegotiating your work load can be an option of course, but you need to have somethingn to bargain with and that is often just withdrawing your labour ie nuclear war. You never know, moaners often get their own way with those neurotic bosses concerned about staff turnover or productivity gains acheived via experience on the job. If you dont see it is crap, and ask for change, you will get more of the same!

A bad situation is usually typified by a company losing customers or struggeling to find more. This also applies to start ups, because most tech start ups fail not because of lack of investment, but because of lack of income from customers.  Essentially that is the difference between the also rans and the Facebooks, Microsofts and Apples of the world. Soft capital is a bad place relative to this because as I have seen several times, where the drive to get income from customers is lost in bullshit and doing R&D with 'partners' rather than delivering a product nbased on entr5epreneruial savvy.

Good situations are driven by a variety of factors. Firstly companies with a healthy economy, or the right reshaping opportunity for your skills to play a part in. Customers, markets and investors are important too, as are then the core offer and R&D pipeline., Very much though it is down to who 'buys' you and works with you above and around you. Which brings us to

6) FInd a King Maker or Be a King Maker

Internally to companies you are promoted not by some mysterious personnel assessment or a computer algorythm, it is your boss or some other boss you work with who gives you the nod. Sometimes you of course have to ask or you won't get, other times you get asked in for a chat in 'my office' with a smile and get offered promotion out of the blue. Conversely Many line managers will be little bitches who want to keep you down in your hole, and take the glory for themselves, and they are easy to spot, you never get a profile via them and are kept out of interesting / important meetings where your work is on display or of high relevance. How do you get round the little pricks when you are really performing? Well you make sure that other bosses know you are actually the one doing the work and get integrated into the chain of information and instruction, take ownership away from your boss over time.

A boss who recomends you for promotion, or puts you in a positiion you can shine in further outward in the company. They recognise your work, praise you and give you enough latitude to be visibile in the company. Part of this is just getting on with them, but mostly it is on your ability to cooperate and be productive in your own right. Kinbg makers then trust you and want to shove you forward - often they have a safe job and a family, and see you will be able to move on upwards in a company.. Sometimes they may be retiring.

More importantly, they may be moving company to an exciting opportunity and take you with them.  One thing to realise, is that there is no lack of investment in the world, and all my cynicism of thye rich owning property over for choosing industry is not to be overplayed, there are philanthropic investors all over the place who want to create value, jobs and return on outlay in a patient way, or with some strings attached. Following an experienced boss out to a new start up can be great if they are the right personbaoloty or have been there in the growth phase.

Being a king maker is maybe a much rarer opportunity for the older manager, who can then follow that King into new departments or ventures. It couold be also that you are tightly together with an entrepreneur when they go big, and get the recognition as an A team player. It can be worth swallowing your pride and allowing a more energetic person to lead the way, with in fact you  and others carrying them on your shoulders. Of course you can be following after an egotistical nut who will dump you without any recognition or payback.

7) Go Ugly Early

A lot of the above I have talked about the fast careers in start ups or glamerous corporates. very many leaders in those companies have been there in the big growth phase, and had their own little ling makers and so on., However the majority of people managers I have worked for  directly have had one thing over me and that is experience of peoplke managment per se in something vaguely related. And very unglamerous.

Going ugly early is a terrible kind of disco strategy from the 1980s, made redundant by Tinder swiping. It meant not bothering to seek out a particularly attractive girl or boy, rather going for the sure bet of getting interest and potential 'escalation' shall we say towards a one night stand.  In corporations there are thousands of small business to business brands and suppliers  no one outside that supply chain has really heard of, or which you see on the side of lorries or equipment, or office blocks in public. They attract their own stream of anonymous MBA 'europyuppies' in the EU who take early management positions at different locations upin the beck and call of their masters. By the time they are thrity they are highly experienced line managers, often with 'change management', 'Lean' and 'six sigma' on their CVs and they become the well paid middle management we love to hate in the EU. Often egotistical and rather uncharismatic. So there are lots of ugly, faceless businesses looking for expecially MBA candidates, but also people with relevant operational experience to put into fresh management positions.

These companies themselves are not very profiled or 'charismatic' and so they can often have a pretty rapid promotion to middle management too, as someone coming in with other operational or junior management experience.

8) Go Public Sector

One thing I note amongst a great deal of the very politically Neo Liberal inclined, is that a great many of them either work in public service or are paid pretty much solely by the government. And they are doing nvery nicely on it too.

The public sector is bound to have further rounds of privatisation and deunionisation now in the US and the UK, but there are always new areas to get into either side of the fence which are promising and offer a better degree of job security for managers than the usual corporate world.

Very often though the public sector demands the exact right set of qualificatioins to get in, such as in teaching or environmental health for example, but they will invest in keeping you qualified more than the lean and mean private sector.

Privatisation actually breaks this need for the right set of qualifications down a little too, so all is not bad for the indifvidual looking to shape a career with a smidgeon more job or career security

9) Be Super Qualified

Although there is often a bad side of being percieved as over qaulified, for a good graduate career you need to be super qaulified.

The ticket to being a manager as I have said, is the MBA, but that has to be from a school recognised by your employers of interest. However there are other more specialist or modular routes which gain a lot of respect. For example some ( and mostly they are self serving) marketing directors demand that you have a chartered inst. of marketing diploma and participate in courses. Other industries havbe 'chartered' status of course> engineering, architecture, accountacy, surveying.

In outset many companies now 'demand' a higher technical qualification than a bacherlors with honours. Sometimes these are specific to skills and areas of research nut bvery often in my meeting of people, a masters or PhD is arbitarily demanded or part of the culture. I wish I had ten quid for every PhD twit who I uncovered as having actually spent four years researching something tedious and unrelated to the tech company

I dont regret not being an MBA or PhD but it would have helped a lot with the culture when I was an also ran and not in a king making situation.

Maybe I should have just gone ugly early, instead of going ugly ratherr late in my middle age after working with a lo9t of excitign companies before!

Wednesday, November 09, 2016

Trump Wins! Liberalism is dead, long live Liberalism!!

Trump Wins!     Liberalism is dead, long live Liberalism!!

There are some surprises in this election result as the needle passes the point of no return for Clinton and Trump is declared winner. Firstly that he won Michigan and other democratic states while the whip states also fell. Liberals are in shock, both because of the swing surprise and because of the far right monologue Trump drove in his campaign

Why Trump ?

Several reasons for this as a surprise: pollsters are wrong in methodology and sample selection.  In fact you can see that a low turn out amongst non white voters is proibably the  major swing pusher. They turned out for Obama twice, yet 59% of whites in the  US voted for Mitt Romney, the previous 'far right' candidate. This white majority is also reflected through the electoral systems in Congress. 

Secondly the most important factor was that Trump is a non establishment figure. He is no self made man, having inherited his wealth and position, but he is a self made president. His campaign, by his own words,  was indeed a movement. This is in contrast to  a stage managed establishment candidate like Bush 2 or Romney. In that he was free to speak his mind, and to bend political correctness to build popularity. 

Unlike the Bush dynasty, he does not see America as an Imperial power interfering with the world to its own ends with military force. He is also not 'economically correct' - he is prepared to tackle the hipocrisy of China and Mexico. US jobs going to a socialist bank rolled mega nation on the one hand, and to slave labour on the other. He is then touting protectionism, which has been off the Neo Conservative agenda for three decades. It is popular with voters, and a stone in the eye for the laisez faire academics who don't have to live with the consequences of the rush to socialist bank rolled China. Protectionism worked in the early post war for all the world's major economies, and indeed continued as far as the last Bush presidency with US steel being protected while it 'modernised', 20 years after Ravenscraig in Scotland was shut by effectively, Thatcher.

Clinton Fail?

Shit sticks: unlike the virtually unknown Obamas, the Clintons have lots of flies around them which just nip away at public confidence in them, and rightly so. They have become an establishment dynasty. They have appeal to middle class liberals, but not amongst the working class any more. 

Why is this so? 

Firstly they "ain't no sisters and brothers" ie they are white, middle class liberals. So that emotional appeal was lost to ethnic minorities. Working folk do not really relate to their political agenda, and in fact the 'disruption' caused by Trumps wild-west, economically incorrect and agressive personal attacking style meant that she by in large could not present a strong economic case. 

Trump was not chained to the Republican economic orthodoxy in what he could say. He could dumb down politics and make economics basal , but he could show an agenda which was quite unlike the previous Republican one in many ways. Protectionism as I say, also major federal investment in infrastructure. A smaller, cheaper, less adventurous military. He will still bring in tax cuts as a stimulus, but also he is prepared to call in dollars spent internationally to being spent in the US. Most of all he knows that the model where America designs and China manufactures, is broken and the US needs manufacturing jobs. 

Republicans have driven a two faced agenda when Mexico is considered. Their financial and power broking supporters in the southern, border states are apparently happy to live with the illegals and grey-area immigrants who keep their wage costs very low and allow for in particular agriculture, food processing and oil fields to be more profitable than they would be if they relied purely on domestic labour. Also the Rentier economy is reliant on population growth to fuel the real estate market leverage, a major wealth escalator and "value" generator now in all western economies. White Americans are having too few kids, too late due to of course, the economic pressures they face. 


Trumponomics then dares to defy the laissez-faire hipocrisies which the republican establishment have sat upon for two decades. That is both the illegal immigration from Mexico, and the Chinese sentral bank funding of their  economy . He calls the elephants in the living room. 

He stands against the free-marketers who turn a blind eye to the Chinese keeping their currency low. The chinese while fuelling their economy by printing money which is socialism, yet we in the west must not have socialism, we must compete. He calls the bluff of Republicans who tacitly accept that the southern border immigration is to be ignored, and brushed under the carpet. Border control and green cards are tickled with small change in relation to the defence and space programme budgets. 

Donald Trump is not a self made man, it can be argued that in fact he hasn't grown his inherited empire in any notable way. He has had failures, Trump Airlines, Trump University and controversy dating back to his young days in opposing access to rented property for minorities in NY. However he is an educated and experienced businessman and a deal maker. He is used to negotiating from a position of strength, and now he has become the most powerful single person in the world.

Voters knew also then that Trump will break the economic status quo and challenge the concept that the US is inevitably becoming a tertiary service economy with a large national debt. The elite rich will hate him for this, because they are very much tied up in real estate for housing, and the buy-to-rent nouveau-riche especially in the border states, will not thank him for this shift in economic focus. Yet it had to happen, the way America was going was towards. As the finance crisis of 2008 and resulting depression showed, the USA cannot live from a house of cards economy based on real estate, and banks can never again be bailed out for building such a flimsy means of generating growth.

Trump's Double Communication on Race, Religion and Xenophobia?

Has Donald played the small minded racists at their own game and won? He is a strange character, who has previously aligned himself with a lot of socially liberal ideas, and been a friend of the Clintons and other uber-liberals. He is infamously accused of saying " If I were to run, (as president), I'd run as a Republican. They're the Dumbest Group. They beleive anything on Fox News" - a quote the his campaign and the Republican party have been hell bent on denying and removing from the internet over the last two months. 

Really since society organised itself, and probably when we were still smallk tribes, leaders have been able to exploit our natural, biological xenophobia to all ends when it relates to power. To isolate from other societies and define themselves by their leaders' vision. To discriminate against others and not treat them fairly, even if there is laws to protect national citizens. Of course nost of all, to go to war and kill other people you have never met before, who have families, wives, mothers, sons, fathers. Xenophobia is a primeval fear and the most powerful motivator for action in humans is fear. We will withdraw or attack based on fear, before we will ask questions, negotiate and cooperate. 

Trump has appealed to the white racist voter and those voters who have indeed seen their livelihoods under pressure from Mexican immigration. Competition for jobs and housing where there are jobs. He has been able to use the middle eastern crisis to his ends, which are as with Bush 2's intentions, a far less interventionist USA.   He stopped exposing religious bigotry and racism many weeks ago, because he knew he had got the rednecks out of their chairs to vote. Many were disaffected before.

Has Trump given a free reign to racism in the USA? Does he legitimise racial and religious bigotry? Well yes his campaign has that, but the man is racially liberal, and he has a valid point about middle eastern refugees, petty as it is, just a couple of terrorists and you may get either a new 9-11 or a shooting to equal an average weekly assualt rifle- in school outing. Trump the winner will leave his racist voters behind. Racism is a phenomenom which he has used and abused. 

Liberalism is Dead, Long Live Liberalism!

The other status quo which could not continue and which has drained the educated voter as much as the less savvy, is that we cannot go on with Congress being one colour and the presidency another. The best thing to come out of this is that now it is just Republican policy in governance over the next couple of years at least. 

It is the same with Brexit, the public have swung to the right in belief it is all better for them, but in fact the realities are going to be different. The outcomes are not positive. Trumpanomics are disruptive too. This threatens to cause a great deal of instability and uncertainty before a new era starts, and that new era may or may not be more promising and beneficial than the one we are in now. In no way will Trump get a 45% tariff on Chinese goods, but he can at least threaten it and that can make the disruption work to gain concessions and move China towards playing a fairer game.

A red house and red congress is a gift to liberalism.  The Clintons had become establishment, they had become distant.  They appealed to younger educated liberals, who are in the minority. In fact the liberal mocement all over the world has become an establishment for minorities. Ethnic groups, LGBT, the handicapped. All the weak and oppressed, but not the core of who created the labour movements which put the Democrats in power. Their perception at least, is that they have been left behind by a political elite who present a new orthodoxy of not just tolerance, but it can be said, shoving minority rights down every one elses throats without doing anything for them as middle of the road voters.

Republican Economic Waterloo

It has been argued that a power elite of owners in the USA decided in the late 60s that inflation and liberalism would destroy their profits in manufacturing, so they took the conscious move to shift their massive investment power to building the real estate market as the underpinning factor in expanding their wealth  -at least, while also boosting the economy while manufacturing fell away. 

Now Trump understands that the free market has been duped by the promise of "Go to China" where investment from printed money flows as if indeed, there is no tommorrow. Growth outstrips domestic demand, the currecny is kept low, some materials and goods markets are surreptitiously manipulated. 

With the "Great Wall of Mexico" on the cards,  Trump is actually lining up for a battle with those self same real estate driven Republicans who want a 'cheating' free market with goods from China for their retail empires, and a more or less free supply to labour and housing market from Mexico. Also yes, he will reverse Obama Care, but he is likely to go after a much better deal with Big Pharma and the Health Care conglomerates and force harder state negotiations on medicare, while injecting competition into the market. He has hinted at this two times at least when mentioning what he will replace the affordable heatlh care act with. 

Liberalism Must Collapse And then Rally Itself

The trouble is then that the labout movement had suceeded in projecting liberal concepts into legislature for so long, that people both took them for granted and also saw the Democrats as part of the distant Federal machine. It was no longer a people's movement. It was a governmental vehicle for minorities and a good few fringe issues

 When they formulated the affordable-health-care act then, the Democrats had a whole right wing establisment against them, and many non voting and healthy tax payers were secptical. It should have been the jewel in the crown of the Obama adminsitration, but it is both too early in its life time to really have common appeal or recognition, while also it has created inflationary pressures which they should have forseen. 

Liberals the world over are on the back foot, with the "neo-neo-conservatives" in Russia, the UK and the US, reverting back to nationalism to secure economic power for the minority. Will though, Trumpanomics and Brexit not be glorious, popular successes?  They are only popular because of the malaise the new world order of international super wealthy have imposed via the market crash of 2008. In effect we are trying to cure the down sides of capitalism, with on the one hand more capitalism in tax cuts, while on the other nationalism and protectionism.

The combination of protectionism, isolationism and lower income for government is however quite likely to be a recipe for disaster as far as many individuals are concerned. The free markerters have fought for freedom of movement of capital, goods & materials, and to some extent labour as their golden principles of supply and demand., yet Trumpanomics and Brexit has a simplistic appealk to the working man.

We have then both in the UK and the USA a four year period for which right wing politics can take us to a point where we know whether or not these great shifts in political landscape are going to work. These are two great experiments, but in fact by in large we have been there before. They created the type of poverty and dissatisfaction which spurned the labour movements, and the type of institutionalised intoleranse which gave birth to modern civil rights. Liberalism died today. Long live Liberalism.

Sunday, October 09, 2016

Mr Robot - Breaking Badly in Season 2

    If you have followed season one of Sam Esmail's tour de force 'Mr.Robot' then you may as well just stop there and forget about series two. Perhaps wait until someone out there in internet land Mashes or hashes together a version which is watchable and satisfactory to the initial premise and story line strategy. The script tumbles into chaos. The actors look tired and bored and irritated, like they have been asking on set for three months 'where are we going with this? "

Season two begins well enough with the development of a new third main line in the story where we meet the shady would be amatuer psychological genius with his mini crime empire, Ray. More on that soon, but the series goes into strategy melt down mid way and becomes a confusing mess of presumably self indulgent scene-bites. All the way we live with the pretence that there is a bigger plot, a major new world order, when in fact all that is delivered is inconclusive chaos. It didn't help that I was watching it late at night, because I got the feeling I had nodded off and missed some vital narrative or conversation between the main super propents. I have my own conspiracy theory.

Firstly though, I would have to say that the first series was mind blowing in both script, character protrayal and cinematography. The acting was captivating and had elements of intense stage monlogue, and improvisation of tense inter character dialogue. Introducing Rami Malek , a fellow ethnic Egyptian to Esmail, the pair were able to weave both a jamais vu experience of the life  of a nerd with mild autism, and a sympathetic relation to him as the central character bound in moral dilemas through each episode and as a continual tension. Elliot is both a hero and anti hero, Hamlet and King Lear.  There really is no bad acting in the entirity of both seasons. The director has pulled performances which are worthy of the highest accolades of the feature film industry, let alone Net TV as a medium. With synchronised release for each episode on a global basis, the grip of the series unfolfing was maintained for at least series one, and internet millenials and old data dogs alike were captivated and engaged in a huge amount of discussion on line as the series rolled out.

Filmed much in the style of Kubriks ambient light, "f0.95' the perpectives and stage direction chosen are a wonderful celebration of that director's 1970 quantum leap into a new, bold camera angles, lighting, trolley work, zoom effects yet with a less intrusive, camera aware impression than say Orson Welles' experiments of two decades prior.  The darkness, a real modern film noire, does become a little tiresome because by the middle of S2, the majority of scenes are at night or in dimly lit rooms and under passes.

The first series totally blew the methylated socks off Breaking Bad for all the above reasons, plus that the premise was more of our time, on the pulse of post democratic times in a roughly immediately contemporary chronology. Capitalism has become condensed to E Corp in America and the mysterious Chinese quasi governmental corporate with their hidden alter ego, The Dark Army. However in a kind of familiar yet completely different way, the later series deteriotes into a self indulgent, pretentious pile of short intense or long slow scenes, which delivery a poor entertainment value despite trying to be oh-so-clever in commenting on society, capital and power in today's America. It has too, broken badly.

Why do this to us, the eager follower? A series which had a plot developing which could satisfy and enthrall a sixteen year old or a 55 year old IT boss. A joy on the eye without being just carbon copy of Kubrick, in fact just amazing to see the new film media being used with such gravity, also as if the bespectacled genius was reborn though Esmail's craft. All the characters were magnetic and at the same time, mostly dispicable. Weaving in magical realism with the hallucinations of Elliots deceased father, the sitcom episode,  and some of the way the the character Angela is developed as a kind of etheral metaphor for the dilema of metropolitan existence for young adults today. Yet it all gets thrown in the trash, script, character development, engagement with their dilemas and most of all plot.

The plot had so many ways to go. The characters had so much of their past to build and their present existential predicament to explore in comprehensible ways. Elliots father, we got about 80% of the way there with his 'motivation' from his former life. The Angela / Darlene connection. The real motivations of Dark Army and their leader. At the end it is just a mess which can only present to us that power is never absolute but always corrupts absolutely. The plot could have followed more on the Ray route as a foil and fortuitous cul de sac or scapegoat for F Society to get off the hook and live again, or gave gotten away with it all with impunity. The reverse of this, the real world violence of Ray's crew could have lead Elliot to engaging the FBI to catch both them and surrender F Society. Some more satisfactory total destruction of western and Chinese society? Some other, benevolent or ambivalent force from some secret national security or illuminati based policing which saves us all from anarchy.

I have a conspiracy theory about this though, the mess, the pretence. Or two. Firstly I propose that Esmail signed up for two series only and wanted to conclude the story line and create a short masterpiece in terms of the usual longevity of good TV series.  He maybe  just didnt get the time to close the plot to dear viewers relief and gratification. Or perhaps half way through, they demanded an option for a third series and Esmail had to come up with an inconclusion instead, toute suite. I think that is the most likely route chosen, and the cash came with it while the opportunities in Holllywood were yet to fall into his lap. What goes well as cult viewing by millions on Netflix, does not necessarily translate into popularity a the cinema box office. Although I would like a film version, 3 hours with a solid conclusive scene.

To some extent the final four episodes or so feel like they are from the 'cutting room floor' ,   a mash up of scenes. Here I play to the latter of my consipircy theories. The whole thing was played in with a 'closure event' in S2/E12, but the backers bayed for more and Esmail was presented with a short order to hack out the strands of story which could lead to a concrete conclusion or enough conjecture on the table so as to leave the cynics saying S3 would be ' so predictable'. Perhaps though Esmail wanted to be unpredictable, in avoiding either the big crashing end like fight club or the planet of the Apes, now a cliche or the more subtle ending where either the reality of imprisonment by the good guys, the FBI, closes the scenes or Elliot and gang disperse into anonymity after a final hack to cover their tracks.  Breaking bad ran a series or maybe even two too long, and ended with a ridiculous almost Tarrantinoen gun fire ending, disappointing many fans who expected something chemical.

To be frank, I haven't either bothered to google rumours of S3. I just found it all boring in the end, the vagueness, the constant allusion to power being all that matters, not reality, just perceptions around existence of characters who are to be dominated or rebelled against. The very last thread of evidence in my conspiracy theory on S3 being thrust upon Esmail, is that they lay a very heavy handed, dubbed dialogue only telephone call to the end ( not revealed if you have not yet seen) which leaves us with the supposed tantalus of a new series, S3, S4....... The trouble is I would like to see a remake of S2, not an excuse for re-editing in what ever was taken out. Too many story possibilities are closed or become worn out. If they do an S3 and god help us S4, then the only way I am watching it is Robotically.

Monday, August 29, 2016

Change - Delta Inertia Momentum I Society and Economics

We see this repeating itself, or rather manifesting itself in different ways but from the same source.

Conserativism - resistance to change, inertia, or pure feet in the mud.

It isn't just the right wing by any means, although through the ages the powerful minorities of different societies, dynasties and empires have tried the hardest to stand in the face of change.

On the left we have seen republics and democracies ignore the rumblings of the massea. We have seen the unions trying to ebb the inevitable tide of competition and effectivisation.

Now we see that government for capitalism, by capitalism reaching the end of it's tether at the top of the cliff of change. They have abandoned -we need more capitalism- and in its place reached out for the nantionalist card. This is the same path we have seen before, with monster ego's and an immoral minority of hyper vocal supporters ready to bully the meek, and attack the outsider. Never with positive outcomes when they gain power, and prove to be a juggernaut against all vunerable members of society, making each element progressively the new enemy.

Capitalism in its' post industrial, real estate driven form in the west is coming to an end, as the average worker now experiences their standard of living being eroded, and they face a lower mateiral standard of living than their parents generation, and even a lower waulity of life and longevity.

Austerity was the cure which won't have worked, two electoral governments and more not being able to bring back better times.

The momentum is building, but as mentioned above, it could lead to a nationalist and protectionist future as the oligarchs manipulate the public in order to hold onto power.

Do Low Interest Rates Give Capitalists a Huge Subsidy?

We have historically low and sustained Interest rates, which are branded as the cure for the malaise of the high inflation in both the 70s and thw 80s. Yet is this situation actually a subsidy to capital, which drives ,assive hoasuing inflation and the erosion of standard of loivong for ordinary and even above average salaried workers?

Does the current low interest rates from central banks even cover the cost of managing and printing money? Let alone co tributing to the exchequor or things like national and private pension funds?

Low interest seems to shift the burden away from home owners in comparison to the high rates of the 1970s and the late 80s. However the reverse is true- house buyers are burdened with inflation levered way beyond wage rises in the post industrial, new white collar service slavery. Yes there are bigger capital gains in the metropolitan areas, but of course not for the first time buyer who is becoming ever older and shifting up the two income salary scale, with many workers facing exclusion from the general property market. Also people moving up the ladder for that baby room or suburb with better schools, face intense competition from everyone in the same, now middle aged ex yuppie boat.

The belief that housing is your be personal investment hand in hand with low interest rates and relaxed control over gearing to salary, fuels a cut throat market in most of the western metropolii.

On top of the competion between own-home owners of course, capital has shifted its focus from investing for ROI in industry, to real estate and the financial and banking structures which support this great house of cards. Also micro capitalists who have personal equity or high income, can cash in on the three times geared gains to be had in property while also covering much of their annual costs by renting property out.

Essentially this is all bad for the economy. It creates more jobs in centralised financial services and consumer services in the major metropoles to the expense of provincial cities and rural areas. As with all capitalist economies, this leads to more trickle up to both capital and to the monster finance capitals of NY, Singapore, London etc. and less trickle down- a larger proportion of total money is locked into housing capital circles and is no longer creating jobs.

Low interest rates sound really good for manufacturing industry in theory. They can invest in machine tooling and premises cheaply, and should face lower wage demands over time. However there are major issues because on the one hand we have glibalisation and freedom to disinvest in the old economies, while on the other we have competition from the monster of property.

Taking globalisation first. This has meant indeed that companies can operate and grow on a multinational basis, like Apple. It also means that they can find the lowest denominator cost base, regardless if that has the chinese ideology dicatatorship and market manipuøation behind it. Jobs in design and marketing also move inexorably to the new economies as  highly educated middle classes develope there, available at a fraction of the wages in the old west. The new eastern countries also become the main growth markets, attracting larger spends on marketing while the old west cuts back on sales forces and imports global advertising. We are left in the old west with some R&D, the super corporate structures, logistics and the financial diligence and profit optimisation accounting departments in the metropoles.

On the second point, manufacturing industry also competes with the property market and its financial circus. It actually competes for skilled workers, because more young people study or train and indeed re-train to work in the higher paid jobs around money flow into property, and the higher skilled working class become self employed handworkers serving the housing market. Of course manufacturing industry competes also for investment in order to grow and increase quality and productivity. Now we see though that very few companies with significant indigenous manufatcuring feature in the top 100 listings on old-west stock exchanges. Instead these are dominated by banks and financial institutions, consumer services and often privatised public utilities.

Many big product brand companies, like Apple, do very little manufacturing domestically. Worse than new industries setting up in the east though, or old industrues becoming unprofitable in the west and moving,  is that many profitable manufatcuring and primary extraxction companies give up in their western countries because profitability is even higher in low cost countries and there is no disincentive to disinvestment. ROI based on say a 20-30% gross margin and 5-10% profitability is no longer attractive enough for investors, nor accountants in multinationals. As i point out above, it is not just that costs are cheaper, but also that markets are growing faster in the east. It is a perfect storm for capital to move out of manufacturing in the west.

A higher proportion of western incomes now goes on housing than for a very long time in history. We to go back to times of poverty and social unrest to see so much of our wages going on putting a roof over our heads, bought or rented. Even in the 1970s period of high interest rates, we in the west used a lower proportuon of our income on hosuing.   This means we have less discretionary spend, use less in services and products, or have far higher high interest consumer debt, or have burnt equity and capital gains in our property to fund consumer spending. Many of my generation are facing eventually retiring still in significant debt on both housing and consumer debt. This is due to us maintaining the expectation of the materialist, middle class life style our parents enjoyed and that we expected to actually improve with our higher level of education.

In fact I propose that it is the university educated, western middle class who have come our relatively worst from low interest rates and our own growth in numbers and accompaning devaluation of degree skills. We have a lower standard of living now, and possibly quality of life over all by 2030 than our parents, the baby boomer generation who grew upo in boomijng economies, affordable housing, unionised industries and free education. The hand worker who is prepared to run their own business has perhaps seen the greatest relative growth in material life style, as they feed off the obsession with home improvement and personal ROI there in. The semi and unskilled working classes have seen a large scale return to pre-war working conditions, with little or no job security, unstable working hours and hence income.

Change is always going to happen, but we have seen the neo-conservative financial orientates power base resist the real need for change to which the 2008 "correction" was the symptom. Instead of allowing disease to teach the animal a lesson, they demanded corporate champagne socialism- bail outs to preserve the status quo: an unsustainable, property driven house of cards in the west. Higher interest rates are quite possibly no cure what so ever for the current wstern malaise, but they would choke the incessant, dangerous growth in housing and channel more investment into savings, bonds and quite possibly render ROI from manufatcuring more attractive to investors. What about inflation? Surely it always accompaniea higher interest rates?.

We have conquered retail price inflation in the west through more productive agriculture, super efficient logistics and the liberalisation of retail real estate meaning a saturation of outlets. Wage-rises are driven more by housing inflation now than any other personal costs or ambitions. We have replaced one demon of visible inflation, with another which the establisment has been able to dress up as a comfortable situation for average employees, when in fact the house of cards is anything but a sustainable position.

The finance crisis has in effect not really been cured, and the elements that created it in the first place are still looming in the private economy. Economic Growth in the west is rather pitiful, yet growth in capital wealth via real estate is at levels similar and locally even higher than pre 2008. We have a leverage effect as discussed before, where these modest gains in income and the relentless metropolitisation of careers feeds the ' three times' amplifier for capital gains from sale,  and what can be extracted from rentals. This is percieved as a safer and preferable investment by in large,  than that in manufacuring or other secondary value-multiplying industry.  With so many technocratic and judicial jobs in the public -governmental sector also metropolising, it means there are perhaps two sources of susbisdy to real estate- indirect champagne socialism and low central bank interest rates.

Wednesday, August 17, 2016

Personal Economy - Running Your Household Money in Profit

I am a seasoned home economist. Some years ago I put a really accurate P & L spreadsheet together, in fact it was 1999, and this has basically been my tool for managing personal and home finances ever since. I say managing, it is really about analysing and the shocks you get are what creates management! Some years later I also developed a cash-flow spreadsheet, down to two week cycles to try and understand why I was out of pocket some months and empty for ready cash until the next e-pay-cheque.

Two Key Concepts to Watch

Before I go further I would say there are two main findings I have to share with you dear reader.  FIRSTLY that it is the seemingly small things which eat your budget down to the bone. Secondly, cash flow is really vital to understand and get on top of. These are in fact not unrelated topics. Life's little extras, luxuries, indulgencies and in particular monthly subscriptions and memberships lead often to negative cash flow and the need for credit to pay for even shopping, but especially things like holidays and car repairs.

Use a Spreadsheet or if Hipster,  Old Fashioned Balance Ledger Book

You will only really effectively manage your monthly budgets by having a spreadsheet - more on that later, but look at any Profit and Loss or product management spreadsheet. In effect your monthly outgoings and income are a balance sheet of your operating profit or financial health if you like. A terminally sick patient goes progressively into operating debt, exposes themselves there in by too much risk. We exclude here any capital gains or losses which are generally covered for in the mortgage for your house. Another capital loss is though cars and they depreciate faster than shit stinks, but that is another topic in itself. We take here that you manage your car loan and resale value, your mortgage and your boat, pension, college fund etce by simple monthly payments included in your operational spreadsheet and turn over.

I would preach as I practice that we include food on our 'cost of goods' because it averages out over time in the actual costs we see in our bank statements, and we set a budget for it, Food is of course a necessity, and it is difficult to sort out drinkies if they are shopped at the same time.  . Here food and drink accounts for 30-35% of our net income because it is so expensive. I recommend using your old bank statements or cut and pasting pdfs or online bank balance sheets onto excel as an "actual" dipstick each month, and over time you will get used to both knowing your "run rate" costs of living and budgeting for them so for example, food does not get extravagant.

Cash Flow is King, Well Almost King

Cash flow is both simple and complex to understand and get a handle on when you look at your finances. Money comes in, but if more goes out before you have it in again you go empty and need to use your overdraught or credit card to span the gap. It is like a wave out in the ocean, with peaks where you have seemingly a lot of ready cash, and troughs where the cash is near empty, or you actually creep into debt. Low troughs of negative cash of course, then spread over to the next peak, sucking your next crest of income. You are bankrupt when all you have is trough despite your income, the bottom is too low to cover by the next income. However as with many, many businesses you need not be profitable in the long run, but still survive on a cash flow which is positive. This is not a very balanced approach, but many business use their suppliers to fund their business simply by getting customers to pay earlier than they pay suppliers by several weeks. Usually they like to syncronise maximum income from customers to CASH in bank with maximum outgoings like monthly pay, and then have cash left over a few weeks before they eventually pay suppliers. Very often they can enjoy free credit from suppliers who are a bit lax on penalty or interest cost, or negotiate long payment terms like running month 60, which means they get upto 90 days circa credit if they buy at the first day of a new month.

Breath out!  You and I use credit cards or the hateful payday loans if we experience that we need to pay for things just before we get paid ourselves. We more often have a negative cash flow from unforseen costs arising at the "wrong time" or we have been spend thrift and used too much money in the cycle. We can be locked in this for years, all the time because of a simple shift of a week or two which imbalances our cash flow. What we need is a higher wave at some point so we can roll over the deeper troughs. We need some 'working capital' or extra liquidable cash on hand, and we need to get our cost payments the right side of the peak - in the time ahead of it, not just before. Credit cards can help with this, but only if we know that in fact, we are making a profit in the mid to long term (6 months to 2 years say) ie our net income will exceed ALL our costs over that time by at least 5%- a semi healthy state of affairs for a corporate.

We can get credit cards which offer running month plus 14 days, ie they consolidate the calendar month's useage and bill you right at the start of the new month, allowing 14 days to pay, usually without interest if you settle 100%. However there is the risk that you are doing this on the 'never never' as the old Scots' saying goes, it is just covering up for you having too many outgoings relative to your income. Credit costs and with emergencies like car repairs or dental treatment, suddenly you can find yourself with a minimum payment, mostly composed of interest, of say €100 euros or dollars.

Home Grown Gross Margin

Now we come to part two of the important stuff - nibblers and gross margin. A profit and loss balance sheet for operational management accounting or product management, places income (sales) at the top, followed by cost of sales, cost of production and so on, what they choose to allocate to deduct from this top line operationally, (depending on nation, state, size and type of company). Most often though, there is a simple calculation of health half way down the sheet, and this is sales income minus cost of goods (to make) and this is known as gross margin. If the company did nothing else but sell things they made straight from the end of the production line, no marketing or distribution costs, then this would in a hypothetical world be their profit. They have this left over to invest, pay tax avoidance accountants, have a party at christmas for the staff.

For you Cost of Goods in the cost of living - all your essential costs. For you and I these often seem fixed costs, mortgage, car loan and so on, but also variable costs like food and electricity ( gas , wood etc) A warm house, well fed, roof firmly over your head. Your family income per month must cover these, otherwise you will drown in debt or get repossessed. Also back to cash-flow, ideally you want to build a wave of cash or ready release savings which is two to three times the size of these costs, such that you can weather a large drop in income.

We have a degree of seasonality in terms of essentials- winter costs more for some in fuel for example, or we get most utility bills in January-February.

We also of course have other costs, often many small, some "essential" like say commuting costs, and after we take these away from our Gross Margin, by calender month  - include then christmas or festive spends and so on - We get a handle then that we are either in profit, covering all our forseen (from our history and planning ahead well) costs, or not breaking even. We see what the bottom line is, and for us it is most important month to month, but with forsight so we can put money into that cash flow wave before the costs crash it down to a trough.

The Fulcrum Effect

Small drops in income have a large effect on the bottom line because the additional costs companies have in covering a manufacturing, sales and distribution network are fixed, and take time to reduce in line with sudden reduction in turn over, or the price they can demand in the market.  This is actually far worse for home economics because we usually DON'T drop any costs when we drop income. When we loose a job, yes we drop commuting costs as a 'cost of sales' equivalent, but very little else.

Also though there are far more subtle effects of the big fulcrum of falling income. A small drop in income can then grossly affect our cash flow, because it tips it into negative. That 5% "profit" we made or near break even situation we were in, suddenly leads to negative cash flow and more interest costs and perhaps a seeping level of debt which is going to drag us down over time. Remember those happy wave crests being reduced down to a low, negative, heaving swell of negative cash flow?

A bad fulcrum effect from down sizing job, maternity/paternity leave, period of unemployment etc can mean we run negative cash flow so long, that we not only have a sizeable monthly mimimum credit payement but also we run flat out of credit, and on this lower family income, have no access to more, or cannot make any more minimum payment thresholds. It gets down to a few gritty dollars a month.


Now I am getting nearer to the crux of the matter. What we have to pay for out of our 'gross margin' is for everything nice in our coseted western lives. Going out, holidays, clothes and usually for most of us, monthly consumer credit payments. We also have a lot of other stuff we get involved with or think we just "must have" on a monthly basis. Gymn memberships, magazine subscriptions, home cable / satellite entertainment, health supplements, home delivered food or wine.

Here is the point. Any single cost on its own looks small, laughable compared to the "benefit" we will get from it. The enjoyment, the life enrichment, the fitness, the relaxation. However go back and look at your Gross Margin (GM). For a pair of yuppies, DINKYs, then often they will have a pretty large gross margin. Many though have as high or higher a gearing to credit and house loans as people on the bottom of the salary scale due to urban housing costs. Some yuppies are designer nightmares, holidayholics and shopping mad. They spend a very high proportion of their gross margin on the trinkets and conspicous appearance nights out that mid to high earning yuppies make. So they have a monster good GM often, but have a terrible spendthrift attitude to cash-flow.

 At the other end we have people on low income who have little GM, and every other non essential cost eats away at it until they are on the most basic food possible and going to their parents to eat in the week up to pay day.

Avoiding any spreadsheet screenshots, but to give illustration:  A family income is €$£2000 after tax per month, and they have a steady mortgage payment of 600, and food outgoings of 600 and energy bills of 200, and commuting costs of 200. That means they have a gorss margin of only 400 dollars. That is their discretionary spend. Suddenly a his an hers gymn memebership of 75 bucks eats up almost 20%, a fith of what they have to spend. Magazines, megabroadband and net flix take that to 35%. Going out, well you know that is a must for folk without much per month? Another 50% points ?Visa payments are then what is left over, covering the minimum payment demanded very often as you can start to see. As with calories and the waistline, it is the extras we 'must' have that eat away ar our real ability to get ontop of debt and ride out any storm.

Every 50 spondoolics is then a major chunk of your discretionary income.

The majority of educated workers who give a damn about reading this type of blog, have pretty reasonable gross margin in their households. Some yes live in metropolitan areas and have either stretched themselves to get a mortgage, hoping capital gains in property value will save them from two or three years of negative cash flow. Many of us do take on way too much risk, accepting a leverage to income via mortgage any business would shy away from as very unconservatibve and crazy risky. However many of us enjoy promotion, or inheritance and so on too. But once again though, are you actually able to cover all your costs and get a gross margin even to pay for food and commuting from your housing costs?

Short Term Austertity in the face of Rank Consumerism

Back to nibblers for the most of us who have not stretched ourselves on huge mortgage leverage. We have all these nibblers and worse, we like to treat ourselves to things as soon as we are in a new job, or get a payrise, or worse, buy a new, bigger, house. We immediately put our selves in cash flow danger. Subsrcriptions, hire purchase and credit cards delay payment to get that cash off us, and it is still early cash tos to speak in the bigger picture of healthy cash flow.

Healthy cash flow, with that big ocean roller of a wave of positivity, takes months to build given we have an average gross margin. It means that we have in effect saved cash aside to let the wave build up in height. Small businesses often aim to have three months turn over (sales income) banked after several years in operation, because then they can either weather a storm, or use their credit rating to expand. It is recommended by many personal economy 'coaches'- I would like to see their bank balances, the majority of US citizens have less than a thousand dollars in savings. A more realistic goal is to have three months of your essential costs, because that is about the time you may need to get a new job, or organise longer term credit to cover for some accidental damage or ill health. Your credit limit should be reserved in fact, over time, for such emergencies and never used to pathc over a persistent negative cash flow ( as I know to my discomfort!)

Marginal Gains 

This is by no means a new concept in business or home economics, and probably not in the world of sport where it has been a recent buzzword following team Sky's huge british success in cycling. With money it means good old Aberdonian penny-pinching. Purchasing pros like myself should be very concerned about penny pinching in, but more often than not we have sales and project managers wanting to 'bring forward' income and delivery early, thus making the cost higher. This is the same as treating yourself before you save up a bit of that nice, big wave.

It takes top leadership to permeate a company with this concept, such as Martin O'Leary did with Ryan Air. He was perfectly serious when he asked Boeing if they could make a plane a few hundred of thousand of dollars cheaper by not installing cabin windows. It was a small gain, but if you make many small gains in your fixed or variable costs then you suddenly have a healthier bottom line. They have become the most profitable airline in Europe, and brought down the cost of tickets at the same time. No one else had this philosophy of every small thing counting in reducing costs or charging the customer a litte extra for those little extras.

Every little bit accrued from marginal gains though must go right to the bottome line. So if the first plane wihtout windows would be an expensive prototype, drop it! Next possible cost which can be reduced with no real internal effort. Next vendor who can be squeezed down. Next route which only makes 7% instead of 9% profit is dropped.

So for every nibbler you can get rid of in the 'early' phase of a new cash-flow scenario, the better. It is about postponing pleasure. Also as I mentioned above, it is about putting credit reduction in a san essential costs, at a far higher level than your minimum payments.

Another marginal game which pays off over time, is to move away from interest only mortgage as soon as you can, and opay even a small amount of capital per month. In this way you make a greater pay back when you sell the property, or avoid negative equity putting you in much higher debt perhaps if you are both licky to have paid off a lot and unlucky to experience negative equity when you must sell up.

Quantum Gains

On the opposite end of the scale there are quantum gains. These come about by rethinking your life and costs, income balance.  Firstly, a very big cost which is exposed to inflation and gives you a poorer quality of life is commuting. Longer, higher. You can then solve this only really by moving yourselves or moving your job. This can mean being a home working, self employed consultant for your current employer, knowing you are more disposable but saving enough to have a mega good cash flow for new business shoe leather time. It can mean moving to a city centre neighbourhood which is affordable yet being gentrfied by the hipsters and the NYPD. It can mean moving closer to faster, cheaper transport routes on the other side of the suburbs. Or like us, fuck the city, houses in rural areas are so much cheaper than we can work in refuse and kindergartens and afford a better home and nice lifestyle.

Quantum gains in income can be from promotion for example, but you should not consider capital gains as quantum income gains unless you invest them wisely and get a steady ROI on the go. If however you decide to downsize in property or location, then yes, that capital can be released as a supplemetn to income, or pay for a larger deposti on a house.

Going self employed is these days for the average worker, the best way of getting a hike in income, while of course it takes time and savings to be able to do so. You need a good wave of cash for the household while also investment money for equipment and possibly staff and premises.

One thing some hipsters and ageing yuppies with kids get trapped in though is down sizing their working hours or top line income, without significantly reducing their urban lifestyle costs. Usually this is funded in fact by credit, and often by that seeping form I talk so much about above. Little by little the credit bills rise and the total amount reaches as much as you can or should borrow for sustaining the unsustainable life style you have.

Pre Tax Income Equivalency to Scare You

Here is another way of looking at luxuries or small nibbling costs. We nearly all have an annual salary quoted pre tax. On average in the western world we pay about a third of our income in central and local authority taxes. Now think of that left over Gross Margin money again: a fifty dollar expense is actually seventy five dollars top line quoted income, and 900 dollaroos per year. Take two such expenses plus say a magazine subscription and you are spending 2000 dollars of your top line income on fluff.

 Also think of this when new costs are in the picture- commuting included. A new job on the other side of town pays better, but costs are an additional  600 dollars pcm. That is the same as 900 dollars income, which is that you really should be earning $10,800 extra gross income per year to cover this cost. Could you rather have worked ovetime in those extra hours you commute, or taken an extra part time job in a local shop, bar or warehouse ?

It is always down to making a better bottom line though through marginal gains for the majority of people in work, and building a positive cash flow scenario which is robust, while having reserve consumer credit for unforseen emergencies, not to tide you over to the next paycheque, be that $2000 or $20,000
Big gains in life are for those who dare do something about it, but anyway after a gain is made, we can soon revert to being spendtrhift and spoiling ourselves with purcashes funded on the never-never, or first month free marketing lures. We cut our cloth to match our suit - that image we want to show the world, or feel we deserve.

 We need to take a couple of months of personal austerity in ordinary times, with normal income and base costs load in order to come out ontop of our cash cycle. Cut out those nibllers , don't treat ourselves to anything special, cancel those subscriptions. Be tough when the sun is shining, in order to build that wave up so we crash over the troughs and don't get drowned in them .