The Trump Effect!

Why Donald Trump is important for our prosperity.

The Trump Effect

There is a failure in the public education system of the USA which has blossomed into a widespread lack of knowledge of economics and civics, and how they are interrelated. This information is necessary to  understand how our economy operates, and is vital to elect effective representatives to legislate on our behalf. Decisions that harm our economy directly impact our prosperity as a nation.    

We have control only over  our actions and what we do or say. We are who and what we think we are, and knowledge is power. If we allow false information to corrupt and sway our thinking, we will be prone to act according to that false data. You may not be a failure in reality, yet if you THINK you are a failure, you will act as though you are a failure and you will have no inclination to improve your lot in life.   Your perception of reality is colored by your beliefs, so it is vital to have your facts straight. Young people are typically “plagued” by political apathy, yet can be swayed into voting by perceptions or feelings of inequality and injustice. Feelings are not the same as facts. Making decisions based on emotional reasons instead of logical ones is a recipe for disaster.  

The United States is the oldest Constitutional Republic in the history of the world. We elect representatives who act on our behalf in the running of our country.  In our constitution, we are granted our inalienable God-given rights of  life, liberty, and the pursuit of happiness.  It is the job of government only to protect those rights. The rest is up to us.  

According to data gathered and tabulated by the United States Elections Project http://www.electproject.org/home/voter-turnout/voter-turnout-data :

In 2016 there were an estimated 250,056,000 eligible citizens who could vote,  and 138,847,000 voted or about 55.5%.  This was the highest by population number voter turnout for a presidential election ever (it was 3rd by percentage). There were slightly higher by percentage turnouts in only two other  elections over the past half-century (2004 and 2008) but it is important to note that these were also reflecting a voting base millions of voters smaller. The highest BY PERCENTAGE in the past hundred years was the 1960 presidential election of John F. Kennedy when there were 109,672,000 eligible voters, and 68,836,000 voted, or about  62.8% .Other than during that election, percentage of voting by eligible voters has been under 60% since 1968. The highest by percentage EVER was the 1876 election which had an estimated 81.8% turnout, and the ONLY U.S. president to be elected unanimously was George Washington.

 A Washington outsider.

On Nov 08, 2016, the Dow Jones Industrial Average opened at 18,251.38, the S&P 500 was at 2,129.92 and the Nasdaq was at 5,154.99. After Donald J. Trump won the election against Hillary Clinton, the major indices began to rise dramatically and have continued to rise since, despite two minor corrections along the way. As of this past Friday November 8th  2018, the indices closed at : Dow 25,989.30, S&P 2,781.01, Nasdaq  7,406.90.

Donald Trump was a Washington outsider, and was elected by a majority of disenfranchised voters who were disgusted by the actions of career politicians.  The mantra and platform that catapulted him to the highest office in the land was Make America Great Again.  Trump promised to bring back jobs, reduce government waste, cut taxes, strengthen our military, and like the slogan, make America great again.  Trump is a billionaire businessman as well as a patriot. He knows what drives our economy and creates jobs. Most politicians by contrast tend to be lawyers with little or no understanding of business. As such, some of these career politicians went on to draft and enact job killing taxes and legislation which lead to the highest rate of unemployment and poverty since the Great Depression. It is interesting to note that Make America Great Again was also used as a motto by another Washington outsider and patriot, Ronald Reagan, the 40th President of the USA whose policies resulted in the prosperity of the 1980’s.

The 2018 Midterm Elections

Crying Hillary

After the crushing defeat of Clinton in 2016, and the appointment of two Supreme court justices, critics of Trump swore revenge and promised a Blue Wave was coming that would sweep the House and Senate making the way for impeachment.  Liberals see Trump as the enemy of America, which is about as far from the truth as one can get. Again, beliefs are NOT the same as facts. Many things that people believe have little basis in fact. There are people who believe in Global Warming despite the lack of evidence to support those beliefs.  There are people who believe in gender inequality wage gaps despite evidence to the contrary. There are people who believe in space aliens and UFOs, yet no one has even encountered little green men from Uranus.

Disgruntled voters often use midterm elections to punish the party in power. The president’s party has lost an average of 32 seats in the House and two in the Senate in almost every midterm since the American Civil War. It’s a time tested fact, and was a given that this would happen. Trump campaigned hard to save the senate and had truly inspiring rallies in battleground states. Due to ‘The Trump Effect’ his support led to the victory of 9 out of the 11 candidates he endorsed. In comparison, not one of the candidates endorsed by Obama for the DNC won. Not one.

I work at my polling place. I can tell you for a fact that I personally witnessed record turnout for a midterm election. It was almost as busy as the 2016 presidential election. We had long lines at 7am waiting at the door. We had the highest numbers of absentee and provisional voters I have ever seen. The DNC had a poll watcher on site almost the entire day, scrutinizing our list of voters and phoning every Democrat in the district. We had an incredible 58.8% voter turnout. The vast majority voted Republican.     

ivoted

“It was a big day yesterday. An incredible day. And last night, the Republican Party defied history to expand our Senate Majority while significantly beating expectations in the House for the midtown and midterm year. We did this in spite of a very dramatic fundraising disadvantage driven by Democrats’ wealthy donors and special interests, and very hostile media coverage, to put it mildly. The media coverage set a new record and a new standard”. – Donald J. Trump

In the House, seats that were lost tended to be held by ‘Never Trumpers’ and RINO Republicans. The derogatory term RINO is an acronym for Republican  In Name Only, and refers to politicians who vote contrary to the GOP platform.  The GOP and President Trump are much stronger without these lukewarm associates. Many of the DNC candidates like Alexandria Ocasio Cortez of NY who defeated her GOP opponent are brand new to politics and have no record to stand on. The 29 year-old former bartender turned State Representative is the youngest woman ever elected to Congress, and since winning has complained that she won’t be able to afford her rent in Washington D.C. Her new salary as a representative will be $174,000 a year. That’s four times what I earned when I was her age, and I had money to spare despite eighteen months of personal tragedies that racked-up $50,000 of debt. If she can’t even handle her own finances at 29, what qualifies her to handle fiscal policies for the entire state of New York?      

After the Midterm election results were announced, again the major stock indices rose. The only ‘Blue Wave’ which appeared on Election Day was the one which swished around the bowl when the toilet was flushed.  By contrast, a Red Wave appears to be looming for the next Presidential Election in 2020 which promises to be a landslide more epic than the 1984 re-election of Ronald Reagan. If you are one of the unhappy anti-Trump people, I assure you that the world is not ending, that whatever dystopian horror you think you are living in is NOT real, and that your information is wrong. Reexamine your information, actually listen to what the man says when he speaks, instead of questioning everything he says without hearing a word. Trump is good for America, and America is a great country to live in. Trust me on this. I want everyone to be happy and successful, and that’s why I sacrifice my Sunday leisure time each week to bring you these articles.   Socrates claimed that “the unexamined life is not worth living” because only in striving  to know and to understand ourselves do our lives have any meaning or value. Your life and your personal happiness belong to you and you alone. As Always, I wish you success and happiness.

Selling The Place?

Buyer Beware!

SellingThePlace

Recently, I was on vacation in Columbus OH. I’ve been going there every October for more than a decade and I always stop at my favorite restaurants when I’m in town. I admit, I’m a creature of habit. When I find someplace I really like, you can expect to see me there on a recurring basis. There is comfort in the familiar. I also tend to eat the same favorite menu items. Being a vegetarian, my choices are usually limited to begin with.  I was a little shocked when I made my annual stop at this great Indian restaurant AMUL INDIA, only to discovered that my favorite dish, a vegetarian thali, was no longer on the menu. I had an awesome waiter who went above and beyond and was able to finagle the meal from the chief for me anyway, even though it was NOT ON THE MENU.  Evidently, the long established business had changed hands, and the new owner felt the sampler dish was not as profitable despite being popular. Fortunately my waiter had remained during the business transition and he remembered me from prior years. It pays to know people.      

IMG_3228

Nothing lasts forever, and if you live long enough you’ll have more tales of places that used to be in business than you have hair on your head.  Every year hundreds of thousands of business come and go, or change hands. Some are new start-ups built from scratch, some are franchised businesses, and some just change hands.  Buying an existing business is not without its risks, but a savvy investor can reduce or possibly eliminate those risks entirely IF they are diligent and gather enough information about WHY the business is for sale. 

Before you do anything, sign anything, or agree to anything make certain that you have a certified public accountant and a lawyer of your own. They, along with someone from your financial institution like a loan expert, or business rep.  will be key to forming a business acquisition team. These experts will be able to prevent you from making a costly mistake by examining the books, reading the fine print etc. 

What’s in the back?

As a customer, you are limited to the places intended for customers. It is rare for non-employees to glimpse much of anything locked behind the doors marked EMPLOYEES ONLY. As an interested potential buyer, it is essential to visually inspect ALL AREAS of the business you are considering buying. It’s my dream to open a coffee shop. There are several key pieces of equipment that every successful coffee shop MUST HAVE. You can’t make espresso if you don’t have an espresso machine.  There is a very big difference between residential and commercial kitchen equipment.  A cheap home kitchen espresso machine costs $50 and will make one shot of espresso in about 3-5 minutes.  A NUOVA SIMONELLI group two commercial espresso machine can make four shots of espresso in ONE minute, and retails for $8999.99

It is imperative to have a firm knowledge of what is the proper equipment needed for the business you want. The wrong machinery will put out of business faster than you can say “double flat white, extra sweet”.

Obtain a list of all business equipment, inventory, and assets.  Be sure to note condition, age, make, model, and shelf life.  Were those coffee beans roasted last week, or last year? Is that ancient espresso machine on its last legs?  Does the ice machine make ice?

You Owe Who What?

Make sure that the business you are considering buying has all its financials fully disclosed.  You’ll need to have your CPA go over their books. If they are not turning a profit after being in business for so time, there could be a serious problem and your accountant should be able to help you pinpoint it. Make absolutely certain that all outstanding debts and liabilities that the current business owner has and been settled BEFORE you buy the shop, or you might be facing a slew of past due bills for unpaid stock or other bills that will bankrupt you. A former acquaintance of mine whom I once considered to be  a friend had this happen to him. Actually he made EVERY mistake listed above and below. He ultimately lost his Shoe Repair Shop and ended up owing tens of thousands of dollars to at least three other individuals besides myself, and it ended our friendship.

Make certain you have money, LOTS OF MONEY.

Buying a business is not cheap. You’re going to need to have several months of working capital in the bank to cover operating expenses such as employee salaries. If some of the businesses’ assets or equipment need to be repaired or replaced, you’ll need to be able to cover the cost. Merchants who supply you with stock will probably expect you to be in operation for some time before they extend credit and will expect payment at the time of delivery especially during your first year of operation. Make certain that all licenses, permits, and if (you’re dealing with food services) health code inspections, and zoning codes are up to date and paid.  Lapsed permits, operating a business in a residential zone, or having heath code violations will force you to shut down.  Plus in dealing with the public, you may have to modify the building to comply with ADA standards.

But I just moved in…

I you are leasing the property for a business,  make sure that it’s a lease you can afford and have your lawyer read it BEFORE you sign it.  Triple Net Leases are quite common and will require you among other things, to pay for building maintenance, landscaping, property taxes, parking lot maintenance, etc IN ADDITION TO your monthly rent.  Snow removal in a large parking lot after a blizzard is expensive. As a result you could find that suddenly your rent was a lot higher than your initial agreement. Also make sure to sign a decent multi-year lease. You don’t want to be making a killing in the perfect location and end up having to move or pay double because the landlord realized he can get a lot more for his property then you are paying him and decides to price you out.

 Does she come with the place?

Will the staff stay on during the transition, or will you be suddenly be all by yourself running the shop with no help, and no clue. Understand that many of the staff may not be happy being under new ownership, with new rules. They may be used to doing things ‘the old’ way and you could encounter friction. Also remember that these employees and the former owner were the face of the business, and certain customers may be upset with the change in ownership and staff. You may find that you don’t have as many customers all of a sudden.

chair-3306118_1920

Do they still sell those?    

Times change, tastes change. Remember my former friend and his shoe repair shop that I mentioned a few paragraphs back?  In addition to all the rookie new business mistakes, perhaps the most serious one that he made was buying an antiquated, niche business with a rapidly declining customer base. Shoe repair is a dying art. Scott was an employee of the first shoe repair chain at the mall. They were acquired by another chain, which franchised its stores. The guy who brought the franchise decided to cut bait and tried to recover his losses by selling it to Scott, who still worked there and enjoyed his job, so he jumped at the chance. He was very quickly in over his head, and for a while was able to use ponzi schemes to keep the wolves at bay. Ultimately he was evicted, his assets seized, and after a civil suit showed that he had nothing of value, he kept a very low profile and faded away leaving his backers with substantial loses. If you’re not a role model, you’re a cautionary tale.  

I’ll do it differently!

What has been will be again,  what has been done will be done again;  there is nothing new under the sun.  – Ecclesiastes 1:9 New International Version (NIV)

No one who ever started a business did so with the intention of bankruptcy and failure. Yet not a day goes by without some business shutting its doors. The best ways to avoid mistakes are to learn from the mistakes of others and do it differently. Knowledge is power and if you do your homework, and lay down the proper foundation for your business from the beginning you’ll be off to a good start.  A great location, with fantastic customer service, superior products, and competitive  (but still low) prices, along with a friendly and knowledgeable staff should be able to provide everything else you need to succeed!    As always, I wish you success and happiness!