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Chapter 8: Create Another Income Stream
Produce another income stream, even a little one. Perhaps you take a second job for a month to pay off a credit card or perhaps you sell your baseball cards on EBay or perhaps you find another way to begin a small business on the side.
A Little Extra
As the economic system moves closer and closer to a worse situation, we've seen many layoffs happening. How do you protect yourself and make sure you have a little extra coming in?
Companies aren't hiring, have started process improvement efforts and are viewing ways to cut costs by delaying equipment and software upgrades.
Getting laid off in a beneficial economy isn't as big of a deal as when the economy is in a recession. Occasionally it even pays to get off the ship before it sinks. If you've a good chance of getting laid off in the next year, you may prefer to consider finding another job while you still have a job. That way, you are able to move to the next job with minimum income loss.
The most beneficial way to avoid a layoff is to have your own clients. The one thing that I disfavor the most about working for somebody else is that when you leave - they keep the clients. The clients are the gems of any company, furnishing the revenue to pay the expenses and the employees. When push comes to shove, employees are let go, but the owners keep the clients that the employees have worked hard to acquire. Business owners don't get fired, although they may go bankrupt if they get too far in debt.
I'm not advising you give up your day job and begin a business - at any rate not before you've done your homework. Beginning a business takes a lot of work, patience, money and a rare amount of ambition. Most individuals only succeed after bombing several times.
What I am advising is that you consider setting up the basis of a small side business. You may begin your business as a hobby and slowly begin adding clients. If you get fired, you'd have the basis all setup and a small client base already in place. This gives you the choice of either returning to find a different job or centering on your small business for income. A small business may be your insurance - reducing your risk of a fiscal hardship.
Drastic changes in the economic system will push a lot of businesses into bankruptcy and fresh products and services will be needed that weren't needed a short time ago. For instance, the need for foreclosure info and counselors has skyrockets in just the last six months. A lot of individuals will be seeking fresh ways to live with the changes all around them. If you're seeking business ideas, I'd look at the needs of a recession economy. Your most beneficial protection from a layoff is to get your own clients.
Chapter 9: Consider Your Home
Your mortgage payment is probably your biggest monthly bill. Reduce your mortgage with one of the many options including downsizing, doubling up, renting, refinancing or even foreclosing.
Assuming you can't sell your home... here are some ideas
If you purchased your home with 0% down and it's worth less than your real estate loan, then your most beneficial option is to just foreclose. You've nothing to lose but your credit - which will be repaired with time anyhow. But, if you've a significant sum of money in your home, then foreclosing is a much more difficult choice - and in this case you need to consider your long term financial outlook. If you're likely to lose your job in the following few years, then you ought to think about foreclosure now instead of sometime in the future. There are lots of houses for rent and the cost of renting is really low because of the many houses that are not selling, so you'll find another place to live. If you're planning to foreclose, call your lender after a couple of months of missing payments and ask for a nonrecourse foreclosure, which entails the bank accepting the house as full payment and provides up their right to try to get any more money from you in the time to come. (You should refer to a licensed pro before making any of these conclusions)
If you wait it out, all mortgage lenders are sooner or later going to be in very hard positions. Sooner or later your lender will be forced to do whatever they may to keep you from foreclosing, even if it means forgiving 50% of your loan worth. Life isn't fair, and it's not going to be fair when the cat next to you gets his mortgage cut in half while you yielded full price. If your lender won't shift, then ask to refinance at a lower fixed rate. If your lender still won't shift, as most lenders are only talking terms with delinquent borrowers, try not paying your mortgage for a couple of months and then ask again.
If the home is your primary residence, think about renting a room to a university student. If there's a college in your area, just put up circulars on the college bulletin boards advertising your room for rent - accenting the many rewards of living in a house vs. a dormitory.
How about a college exchange student? Telephone your local college and ask about their exchange student plan. College exchange students are students from other nations that visit the US by attending a US college. You are able to likewise try finding a niece or nephew in your family tree that would like to try living on their own. This idea is particularly enticing if you live in a distant place from your niece or nephew for of the added adventure of traveling to a new place and experiencing new things.
You are able to also market the advantages of living in a house to apartment renters, by placing flyers on apartments in your area. You are able to offer advantages like, a garage, a yard with a nearby park, an individual entry or allowing pets. There are a lot of individuals in apartments that would love to enjoy some of the advantages of home owners.