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Home » Uncategorized

Start Up School lesson #1: It doesn’t have to be like this

At end of last year, Corus, Europe’s second largest steel manufacturer announced the ‘mothballing’ of plants in the North East of England with the loss of 1700 jobs in areas with already high unemployment.

Realistically many of these people will never work again due to difficulty in finding alternative jobs, skills and age.

Imagine the 1700 conversations that took place when the workers learned of their fate about whether they could afford to live in their house, whether they could afford to keep the car or whether they could afford to go on holiday this year.

It’s a very sad situation.

The truth of the matter is though that it was due to no fault of the workers, and no fault of the Corus really. The axe fell after a consortium made up of Marcegaglia of Italy, Dongkuk Steel of South Korea, Duferco Participations of Switzerland, and Alvory of Argentina decided unilaterally in April 2009 to terminate a 10-year contract signed in late 2004 to buy 78pc of the production of the businesses.

In jobs today, we basically depend on everyone else not to mess things up.   As businesses outsource the stuff they aren’t good at we become more and more dependant on others.

We depend on the boss to give us our next rise. We depend on the marketing department to do a good job promoting our stuff and the Sales Teams to sell the stuff. We rely on the suppliers to deliver on time, what we ordered and of good quality. We rely on the people who run the business to act in a responsible way and not to commit fraud or act financially irresponsibly and we rely on customers to stay solvent long enough to pay for the stuff they ordered. Most of all we rely on the competiton not to develop a better product for less money.

But, it doesn’t stop there. There was a time where we could rely on the money that we had saved in  our company pensions or the investments we had made in stocks and shares.   But, how many people have seen their savings and investments disappear over recent years with recession and are now forced to abandon plans for early retirement?

We have got stuck on the treadmill of life

It wasn’t always like this

In years gone by we grew our own vegetables, we reared our own chickens and sold what we didn’t need ourselves at the side of the road. Somewhere along the way we stopped doing this because we got jobs in the local factory and some who had saved enough went to college and university and ended up working in offices.

Because we had jobs we were rich.

Then we bought the TV, the car and went on holiday twice a year and instead of being self sufficient, we spent more than we could afford and ran up debts.

We run faster on the treadmill.

To earn more money, get promoted and buy more stuff. We’re stuck on the treadmill and have to run faster to keep going. But then suddenly the treadmill stops. The supplier stopped supplying quality materials, the competition made more competitive products, the customer hit financial difficulties and suddenly we are being laid off.

Then suddenly we are having to make choices. Pay the electricity or  pay the rent. Walk instead of drive. Maybe you make do with the old car a little longer.

The Rich On The Other Hand, Avoid the Treadmill

The rich diversify their income streams so that the economic downturns don’t hurt them. The treadmill dramas barely effect them.

But when our paychecks barely covers our expenses let alone giving us enough left over to build a diversified portfolio. But if you had any spare money would you invest it all in one company’s shares?  Would you bet it all on one horse?

Would you sink it all into something you don’t understand, has no guarantees and you have to wait 5 years for an outcome, to which you have no control?

No? So why do you do this with your family’s income!

If you find yourself on a treadmill that’s stopped and you can’t find a job, you’re going to have to reinvent yourself, but when everyone else is trying to do the same thing it’s virtually impossible.

But just imagine if you’d found a few hours each week, when you weren’t on the treadmill to diversify your sources of income?  Maybe you were good at Do It Yourself and earned a few extra £’s / $’s each month repairing other peoples houses.

Perhaps your other half found time to write a blog or promote affiliate products and over time they provided useful 2nd and 3rd incomes. Suddenly the picture starts to look a little bit different.

Now when you hear rumours that the treadmill at the factory is slowing and your friends are starting to worry, you don’t need to worry so much. You now have options.

You have choices.

You have leverage.

You have security and you have freedom.

All because you turned off the reruns of NCIS and CIS and started looking at diversifying your income.

You would be following the path of the rich and diversifying your income.  You don’t  need to have office space or new computers or fancy desks and chairs.

Over the next few weeks we’re going to show you how you take financial responsibility and start diversifying your income.

Whether you’re a single person, a factory worker, a cubicle warrior, a business owner, or someone just looking to pay off their credit cards, there is time to take control

Over the next few weeks we’ll look at how you can start to take control of your life, right now all for free.

20 Comments »

  • Ben said:

    Great post Matthew.

    All too often we rely on one stream of income to sustain us and when it dries up we’re left lost.

    Diversifying income streams is so much easier now in the virtual world.

  • Matthew Needham said:

    Easier to set up, not necessarily as easy to make happen – there’s a lot of competition… thanks for the comment Ben!

  • Chris C. Ducker said:

    I think diversification of your income, no matter what field of market sector you’re doing business in, is absolutely paramount to your long-term success as an entrepreneur.

    Nowadays the world is about as diverse as we want it to be.

    There really is no need to get ‘comfy’ and forget about evolving constantly as business minds.

    Nice article, Matthew.

  • Matthew Needham said:

    In the long run we’re all dead is a well known quote. The other that springs to mind is look what happened to the dinosaurs…they didn’t change… you need to have long term success and in my mind comfort very much equals ‘death’. Thanks for the comment Chris, always great to see you here!

  • El Edwards said:

    Compelling stuff Matthew. This is one of my favourite posts of yours to date because you have basically just written the reasons why I am determined to show my children a different way. Yours is less emotional than what I wrote in June but if you remember that post you’ll know why I’m standing here wanting to start a Mexican wave in your honour.

    This post is also why I love Crush It! so much because having found my thing, I’m learning to work it to show my children that they don’t have to be stuck working for the man. I used to be a supply teacher. It was my fall back option. The irony is, I had a phone call before the summer break to warn me that the school I did most of my work for had overspent by £50,000 and as such, they didn’t know what would happen come September.

    I was over the moon! It forced me to stop dabbling and start hustling. And in doing so, I’ve found the stuff I love doing and better than that, other people love it too! I look forward to seeing where you go with this because so far, it’s fab.

  • Matthew Needham said:

    Glad you liked it El and a favourite post too!

    I’ve thought a lot about what I’d advise my son to do when he’s 18. I think on balance I’m going to suggest that he trains in practical skills such as home repairs like plumbing only becuase I see a load of people doing jobs that they won’t be able to keep if the economy turns down.

    Sometimes we just need that push to make things happen. Same thing happened 2 years ago to me and I’ve never looked back since! Glad you recognise it’s going to be a series!

  • Christine Livingston said:

    The key message in here for me, Matthew, is choice.

    It’s one of the things I come back to over and over again in the coaching work I do. People confronting situations and believing that there’s no option but to see it other than it is. Sure, there are things in life that are tougher to change, but there’s choice in most things.

    I don’t necessarily advocate entrepreneurialism for everyone. For some folks their best work, at least for now, will be in a company environment and as an employee. However, I also believe that so many people give their freedom away, if not their souls, when they sign an employment contract. And it doesn’t have to be that way. Always remembering that you have choice, and doing the things in life that support that decision – having other income streams; avoiding debt; continuing your self-development beyond your day job – are vital.

    Thanks for such a provocative post!

  • Matthew Needham said:

    Thanks for the comment Christine. You’re right getting people to recognise that there are options is vitally important.

    True entrepreneurship isn’t for everyone, or at least to different degrees, but then this is a blog on entrepreurialism!

    If you’re not going to be an entrepreneur then it’s your duty to make yourself as employable as possible, with a wide range of skills and ensure that they are current.

  • Glyn Lumley said:

    Excellent post, Matthew.

    Your Corus example is a vivid illustration of the complexity of organisational life that so few people seem to recognise. Sadly, many still seem stuck in the world of blame – “who screwed up?” rather than “what has happened here and how can we learn from it?”

    Then you touch on the “overtrading” in our personal lives – the culture that has been fuelled by years of easy credit, ‘buy now pay later’ thinking. I fear that the transition to a more realistic lifestyle will be painful for many.

    We need more people pointing towards a better way of life.

    Glyn

  • Matthew Needham said:

    Thanks for the comment Glyn. When I was starting out as an accountant I was working at Rolls-Royce and looking at the financial viability of the suppliers. It never ceased to amaze me how many suppliers were completely reliant on our custom.

    You’re right too much time is spent in the hole looking for excuses as to why we’re in the hole and looking for people to blame instead of working out how to get out of the problem.

    We should form a club!

  • Glyn Lumley said:

    Thanks for your reply, Matthew.

    Happy to form a club, but we must agree not to blame each other if it doesn’t work out! 😉

  • Glyn Lumley said:

    I have just seen that my Twitter name is wrong – can only blame myself for this one!

  • Karen said:

    Hi Matthew,

    It’s an all-too common scenario here in Canada, too, where a lot of the natural resource and manufacturing companies have been taken over or have been mothballed, due to the tough economic times. I remember in my hometown when the big newspaper print mill shut down – very tough times for so many people who had worked there their entire times. It’s easy to believe that the gravy train will never run out, but then when it inevitably does, many people are not prepared.

    Having diverse incomes streams is easier said than done, though. I’m looking forward to reading this series.

    Karen

  • Matthew Needham said:

    Hi Karen, thanks for the comment. I have read that Canada has had it’s fair share of economic problems, yet it doesn’t register in the press or news over here. You’re right it’s easy to believe that the gravy train won’t run out, so it’s even more of a shock when it does. People need to be educated to take more personal responsiblity.

    Yes it is much more difficult to create income streams! And you’re right this is going to be a series! Well spotted! 🙂

  • Caileagh said:

    Great post. Ditto that for the US too. It’s been very sad to see thousands of folks out of work as the auto manufacturing industry here closes one plant after another.

    I work in education and the thing that baffles me is how hard people are stuck in the ‘working on the line’ mentality. When offered free retraining for new jobs, in emerging industries, most turn a blind eye, putting all into the thought that the unions will save them, sell the plant, and they’ll just work on that same line for a new owner.

    I realize some of that is the hard sell from the union to keep membership and dues up but they are seriously hurting their members by perpetuating the myth that manufacturing of this kind will still flourish in America.

    I know change is really hard for most people but I cannot get over the stubbornness to the point of starving or losing your home. I am planning to change my worklife dramatically. Sure it’s a bit scary but we have to adapt or we die.

    I wish there was a way to break through those damaging thought patterns and reach these folks who will be in a world of hurt when the government handouts slow or stop.

  • Rick Byrd said:

    Matthew:

    Great post as usual!

    I am in the situation where the treadmill is slowing. My company got bought out by another company and they tend to outsource a lot of the work. We have been told that they will make a decision during the 4th quarter of this year.

    That is one reason I am working to build an online business. I am not making enough money to replace my income but I am confident that I will be able to do so in the future.

    What is really sad to me is the people that have given up trying to find a job. People have to know that making money online is a possibility. I could not see myself being one of those living just on unemployment. I want so much more for my family. And I believe Internet marketing is the way.

    – Rick

  • Savings Sally said:

    Its very sad to see how many long time employees are losing their jobs, still. The economy is (supposedly) headed up again, but we haven’t yet seen the signs of that.
    Relying on that one thing for your entire income and livelihood is dangerous. Hopefully, these families will be able recover somehow.

  • Matthew Needham said:

    Hi Sally, thanks for the comment. I think that any economic growth will be a series of very small steps. I think it’s probably too late for people to diversify their income to help with the present economic crisis, but the sooner folks start taking control, the better. You’re absolutely rihgt, relying on that one thing is extremely dangerous.

  • Moon Hussain said:

    Great Post, Matthew! I’ve been extremely lucky the last 2-3 years. So many people lost their jobs while I not only got one, but one that made me decent money and allowed me to be independent and save some along the way.

    Sadly, that hasn’t been the case in the States for a lot of people and it’s really sad to see people your parents’ age working at McDonald’s (something a high school kid should be doing). At the same time, good for them, as they’re doing anything they can to pay their bills.

    You make your point well: you don’t need the man 😉

  • Matthew Needham said:

    Thanks for comment Moon! Whilst I do believe that people make their own luck, I do have to agree that anyone not caught up in the economic crisis and laid off has been exceptionately fortunate. I think the earlier you start preparing yourself finacially the easier it becomes.

    There’s been a lot of press over here about people having to work longer but that’s really difficult for people who do very physical jobs like construction.