Creating Long Term Financial Success
Part 1 – Are You Involved in Marketing?
Hello, Keith Abell here with another blog post. This is actually going to be a series of 5 blog posts to cover the topic creating long term financial success but with the New Year upon us and with improving ones financial situation being one of the biggest resolutions I think you’ll find these posts very timely. Today I want to start off by exploring the question, “Are You Involved in Marketing?”
Everyone’s involved in marketing in one way or another even if they don’t realize it. If you have a skill that you do and someone pays you for that skill you’re involved in marketing. In some occupations it’s more obvious than others so let’s explore this a little more closely.
There are really only three ways a product or service exchanges hands. First there’s Retail Marketing – This is what most people are familiar with. The purchaser goes to a grocery store, drug store, restaurant, etc and purchases a product. The product has passed through many hands from the manufacturer down to the final consumer.
The second way a product or service exchanges hands is through Direct Selling – This would include things like insurance, cookware, encyclopedias, Mary Kay or Avon , real estate. In the case of direct selling the large network of “middle men” has been reduced and in many cases only a broker comes between the seller and the purchaser.
The third way a product or service exchanges hands is through Network Marketing – which I’ll discuss in more detail as we go along.
Let’s consider one of the fields I worked in previously, I was an insurance and financial services broker. The same thing would apply to the realtor or car salesman. Obviously as a broker if I didn’t make a sale then I didn’t get paid. People in these fields have a special talent and the really good ones make substantial incomes. The down side was once the sale was made, I and other people in direct selling had to find new consumers for our product in order to maintain the income levels we desired.
It was precisely this downside that caused me to leave that industry, to return to college and pursue a degree so I could finally become a pharmacist and I could earn a “steady paycheck.” But what about other occupations like pharmacy? How’s the guy or gal on the Ford assembly line involved directly in marketing? What about a plumber? A daycare worker? A warehouse forklift operator? How are they directly involved in marketing?
Because they trade their skill for a paycheck they too are in a type of direct sales. Every day they have to do the job they’re getting paid for to the best of their ability if they expect to receive a paycheck. If they don’t work they don’t get paid. In my case I had a very specific skill, a pharmacist, so I earned a much higher than average paycheck. But as I’ve found, in this global economy I was competing directly with others worldwide that shared my skill set. Because of the large increase of new graduates coming out of college both domestically and internationally; these guys and gals are graduating with higher degrees, more student debt, and willing to work for less pay just to work and pay that debt. Also due to increased utilization of technology and outsourcing, in the case of pharmacy, centralized filling facilities and mail order; the demand for pharmacist has shrunk. Couple the oversupply, and more highly educated supply of pharmacist with a decreased demand, I’ve become less valuable to the employers. The employer will “buy” the skill or the labor, elsewhere and we’re seeing that very thing happen in record numbers across all industries.
To complicate matters the company you work for has to also compete in this global market. They increasingly demand that you do more and more for the pay you are getting.
You work harder and harder and what’s your chance of moving up to higher pay levels in the organization? The typical corporate structure is like a pyramid. The people at the top make all the money and the people at the bottom have a very limited likelihood of ever making it to the top. You might make it up a few steps along the way but everyone below you is constantly trying to take your place so now you not only have to worry about the performance expectations of those above you but you also have to worry about those below you taking your place. It’s a lonely place to be.
What about the small business owner?
They don’t have to worry about someone else taking their job, or do they?
I had a friend tell me a story about her father. You see her father was a dentist. A dentist isn’t all that different than any other small business owner. They have to make payroll, pay taxes, pay for the benefits of their employees, pay for their liability insurance and other expenses required for their business. They have to hire accountants and attorneys (who are also in the same situation). My friend was telling me about how one year their dad took them all to Disney World for family vacation. She remembered how he seemed tenser on vacation than when he was home.
Later in life she asked her dad about it. His reply shocked her because she had never thought about it. He told her that every time he took a vacation he not only had to worry about the cost of the vacation he also had to worry about the additional costs to his business because he wasn’t able to see patients while he was away. Essentially, if he closed his office for two weeks he earned no income but still had to pay all the expenses. If he hired another dentist to come in he would make the money to pay the expenses but had to pay the substitutes salary and take the chance that some of the patients would switch dentists and he still didn’t earn any salary for himself.
A small business owner is effectively a slave to the business. They don’t have to worry about what a boss would do but the additional stresses that come with small business ownership don’t always make the grass greener on the other side.
That leads me to what I believe is a better way; A business model where you’re in business for yourself but not by yourself; A business were you’re entitled to substantial tax breaks especially if you’re operating out of your home; A business where you can earn an income through passive residual income, leverage, and geometric growth.
On my next blog post we’ll get into what this type of business is and how powerful passive residual income, leverage, and geometric growth can be when it comes to long term financial security. If you are watching the video version of this blog on YouTube or some other site then I encourage you to visit my blog http://KeithAbell.info and take a look at the summaries that go along with the video blog.
