Tales From the Vault: Cures for My Bag Lady Fears

The Vault contains some of my favorite posts and articles that have been popular with readers. This week, My Bag Lady Fears and homeless-prevention strategies are in the spotlight, with a few 2009 updates.


How I'm Conquering My Bag Lady Fears: My 10-Step Program


What keeps me up late at night? In addition to worrying about past mistakes and my kids and my work, I worry about becoming a bag lady. And I have plenty of company; a lot of women (and I imagine some men also) have secret fears about living on the streets without money or sanity.


Even Oprah and other successful women have 'fessed up to bag lady fears. My anti-bag lady strategy involves careful planning. Here's what my plans include:



1) Passive income: Basically, I'm trying to establish income sources that will work for me when I'm sleeping. This includes: publishing royalties, ad income from my blog and eventually investments. My goal: to make my money work for me.



2) Diverse client base: As a free-lance writer, I like having a diverse mix of clients. When I first started out, I was overly dependent on one large client (a trade business publication). That one client represented about 80 percent of my revenue and when that client opted to turn my post into an in-house position, I was left scrambling. Now I'm more savvy about mixing it up.


3) Get an advanced degree: I've started a masters program at a local university. It's a big crunch in terms of money and time. But I'm having a good time. Besides, I'd like to teach on a university level. I've taught teenagers, but I prefer college students. But in order to do that I need an advanced degree.


2009 Update: Due to a schedule crunch and a new full-time job, I have had to postpone participation in a graduate program. I plan to revisit this plan in the next few years.


4) Cutting back on clothes. I love clothes. I could live in Ann Taylor Loft and Anthropologie. But pretty clothes can't buy me financial security. I've been reading a great book, Why Women Earn Less by Mikelann Valterra. In the book, the author describes how she and her toddler son once encountered a fashionably dressed woman who was picking through the trash. The pretty woman was a bag lady, with great clothes but no home. Now that's one of my nightmares, namely to be very poor, very crazy and very well dressed.



5) Staying in excellent health: I'm obsessed about staying fit with yoga, exercise, meditation, fruit/veggies, vitamins and a positive attitude. I'm hoping that preventive care will save me money in the long run.


2009 Update: My new exercise routine includes working out with weights and a treadmill.
I've also cut back dramatically on junk food.



6) Give to charity: It sounds weird, but I believe that by giving away a portion of my money, I'm creating positive karma/energy that's good for me in the long run. Maybe giving just makes me feel better about myself and when I feel better about myself, I work harder & earn more. Bottom line: If I give money to bag ladies (charities, etc), maybe I won't become one.


7) Prayer: Master of the Universe, please don't let me be a bag lady!


2009 Update: That mantra remains on my lips. I also pray for the (mental, physical and emotional) health of others.


8) The friends & family network. Of course, I call them because I love them all so much. But I also know that they love me so much and they'll keep me from slipping off the curb of life. Each one, teach one. Each one, reach one.


9)Teaching my children: I figure that if I raise my kids to be responsible, loving adults then they will take care of me when I'm older. Oh yeah, and I have to teach them about financial planning.


2009 Update: My children have started to scold me when they think I am being extravagant.


10) A sense of humor. Listen, if I'm going to be a bag lady at least let me have a good time. Besides, in the here-and-now, good humor creates good karma which pays handsome dividends in the long run.


2009 Update: Humor also saves me from emotional spending binges: How I Averted an Emotional Spending Binge: My Six-Step Program Staying happy keeps me out of the stores.



**This piece originally ran on November 18, 2007










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Silly Goofs That Tank A Small Biz or Self-Employment

Good work habits are not enough if you are self-employed or own a small business, according to Ruth King, president and CEO of ProfitabilityChannel.com. A lot of us --myself included--work harder, but not smarter, according to King.

She was profiled in a July 1, 2007 issue of Bottom Line Personal. The issue was in a stack of newsletters (excellent!) that my mother gave to me. Here are "dumb mistakes" that can kill our best efforts.

1. Over-relying on a single customer. In my bag lady post, I wrote about this topic. Basically, one small publication paid me well and represented about 80 percent of my freelance income. When they added a staff position, my freelance work flow (and income) suffered.

Likewise, King says that small operations can fail when a single customer represents 50 to 100 percent of income. Your client -- like mine -- can shift "a previously outsourced function in-house," or cancel a product line or contract, King said in Bottom Line Personal Finance. They can also just fire you. Anything can and will happen.

King--who wrote The Ugly Truth About Small Business: 50 Never-saw-it-coming Things that Can Go Wrong...And What You Can Do About It - urges a small biz to not let a single customer represent over 25 percent of revenue.

2. Letting key employees go to competitors. Important workers can walk out the door with key contacts and knowledge. Solution: keep 'em happy with pay, perks and praise, King says.

3. Not minding the books: Small companies sometimes place too much faith in their bookkeeper. I've heard of small companies that have been hit by embezzlers who were either trusted employees or so-called friends.

Their experiences remind me of the Billy Holiday song: God Bless The Child (who's got his own). checkout this video clip of God Bless the Child as sung by LaKisha Jones on American Idol. (wonderful!)

Bottom Line: Watch your own back, study your books and create some form of financial oversight.

"Do not give a bookkeeper check signing privileges," King says. She also recommends that you direct your bank to send financial statements to your home.

4. Naively pushing a hobby into a workplace: Been-there-done-that. This is a big problem for many entrepreneurs. This topic deserves its own post and I will circle back on this subject later. But here's a quick summary: Do your homework before you turn a craft or passion into a full-time business.

5. Maintaining ties with just one bank: King says that there is safety in financial numbers. Diversify your portfolio of banks with relationships with at least two institutions.

6. No sick- day plans. Again this topic is worthy of its own post and I will post a piece just on this subject. But here's the quick sketch: Sick days, illnesses and accidents happen. If you work for yourself, you need a plan to cover work stoppages.

7. Failing to delegate. Mind the store, but don't be a total control freak. You will make yourself crazy if you try to do everything all the time.

8. Poor or unreliable contractors or suppliers: A friend of mine once suffered a major business setback when he worked with a pair of unreliable sub-contractors. Their failure to show up for work on time or to deliver quality work reflected poorly on him and cost him money.

source: July 1, 2007 issue of Bottom Line Personal

Ruth King, president and CEO of ProfitabilityChannel.com.

other recommended resources: http://www.startupnation.com/ or http://www.smallbusinessadvocate.com/

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Be a Gypsy in an RV: Late Bloomers Guide to Savings: Pt. 4

Why own a house? Why live in a market-crashing condo? Why rent an apartment when you can own an RV and travel around for the best employment opportunities? That's one money-saving, income-generating strategy used by 71-year-old Dottie Soracco of Oregon, according to an article by Julie Connelly for AARP magazine .



With only $750 a month in Social Security and $165,000 in an IRA, Dottie has to work, according to the AARP story. Her previous work schedule represented another of my nightmares: namely, that as a senior citizen, I would have to work around the clock in a series of low-paying, under-performing jobs that would make me feel like a hamster on a wheel: Spinning for a small stipend and getting nowhere fast!


Consider the evidence: Prior to adopting a gypsy life, Dottie earned $12,000 working these part-time gigs:

• flu clinic administrator


• tv commercial actress (Hey, she was even in movie Prince of Tides from 1991)


• Kelly Service Temp

She slaved away at those jobs and owned a condo in Atlanta. Then she purchased an RV and became a gypsy...just traveling and driving to where the best jobs were anywhere in the country. In 2006, for instance, while she was temping, a company offered her a staff position. The catch: The job was in the state of Washington. No problem! With an RV, financed for $323 a month, she's very mobile.

"I guess I am just a gypsy at heart," she told AARP.

I have my own version of the retired gypsy fantasy. Here's my version:

• Writers Colonies. There are assorted writers colonies around the country where you can live free, cheap or even receive a paid stipend or a grant. It's like applying for college and if your application is accepted, you receive a room, an apartment or a studio. Poets & Writers magazine, a great source for writers, features these programs. Many of the colonies are year-round and I've read about a few writers who just travel from colony to colony, living almost rent-free. Here's a link to grants, conference and other resources for writers.


• Speakers Tour: With friends and family all over the country and even abroad, I could travel around, give speeches and collect stipends. I'd shill myself for a gypsy life like that.


• Writer-in-Residence/Expert-in-Residence: Disney World, colleges, community centers all have various adult learning programs. These programs work with a staff of specialists in many fields. The Disney Institute and the Disney cruises seek out experts in different fields. Likewise, I have friends who have traded their areas of expertise for hotel stays and cruise ship trips.

• Live on a Cruise Ship: That's another fantasy of mine: Every Monday in Nassau, Tuesdays in St. Bart or some other island. I could work in a casino, the coffee bar or teach some kind of craft program. I could really live on Paradise Island.
  
• Craft shows: One of my best, best friends from childhood makes a comfortable living selling hand-made art at craft shows around the country.

Meanwhile, it's never to late to save, but there are a few helpful tips for those of us playing catch-up. While visiting my parents, I found a copy of AARP magazine which had some great tips for late-starters in the savings game. Basically, the article (from the Sept./Oct 2007 edition) featured several individuals (ages 50-60) who had not saved too much in the past. I'm writing a series of posts based on the strategies featured in the magazine.

Here's Part 1 of this series.Top Tip: No more recreational shopping at the mall!

Part 2: Tapping a Side Business for Savings: Late Bloomers... Top Tip: Develop a small business for extra income.

Part 3: 10 Reasons Why I'll Work at Starbucks: Late Bloome...

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Beyond Bag Ladies: Financial Road Kill Dangers

Last week, I wrote about my bag lady fears, a gender-specific syndrome that hits many women. But the financial road kill designation is a gender-neutral term that I have recently picked up from reading The Weekend Millionaire Mindset by Mike Summey and Roger Dawson.


"If your destined to be financial road kill on the financial highway you probably fall into one of two categories," according to the authors of The Weekend Millionaire Mindset .


Road Kill Alerts:


1) You move too quickly and fall for ill-advised money schemes, jackpot fantasies or other delusions. You, like many of us, have financial (Attention Deficit Disorder) ADD.


2) You move too slowly and spend your life working for steady wages, but with no real payoff or security. Basically, you're stuck in a risk-adverse rut. (I call it RAR!!!). This form of road kill, according to the Weekend Millionaire Mindset is too conservative to really achieve financial independence. Basically, with golden handcuffs we get chained to a desk. It's like share-cropping in that we never really get ahead.

I find that scarier than the Bag Lady Syndrome because financial road kill seems sneakier. A bag lady looks or acts like a bag lady. Even the bag ladies in pretty clothes (my personal nightmare) look a little off. The signs of disorder are there and in your face.

But financial road kill seems more dangerous to me because I could be actually dressed for success (with the right clothes, toys and home) but could be secretly stalled on the economic highway.

It's also a scary turf because many of us have been there. Indeed, when it comes to financial decisions, many of us --me too! -- have either moved too quickly or too slowly. Bottom line: I've had moments, episodes, years when I could have been a poster child for financial road kill.

Here's my anti-road kill strategy:

1) Be honest. It's bad to lie to other people. It's horrible to lie to yourself. I try to be 100 percent honest about what I'm really saving, spending and earning. That means even if I'm lying to myself, I understand that I'm lying. It's a constant dialogue that goes like this: No, Sharon. You don't need another skirt or to eat out tonight. And quite frankly, I'm still trying to spend less, while earning and saving more.

2) Understand that mistakes happen. I used to play the violin. And when I messed up in one measure, I'd be so upset that I would miss later notes. Quickly, my entire performance would deteriorate. Now if I over-shop or under-save, I try to accept and learn from my mistakes. There's no profit in beating myself up. That's a road kill move. It's better to just get up and keep moving. But look both ways next time.

3) Read a lot. It's really profitable to learn from other people's mistakes. I read magazines, blogs, newspapers, newsletters and books on money management and personal development.

4) Create a balanced plan. It's like Dancing with the Stars. If the ballroom dance routine is too easy, too risk-free, the performers lose points (Road Kill Alert). But if dancers try to do too much, too soon or if steps are too risky for their level of expertise, the dancers fall, trip or stumble: (Road Kill Alert!!) I try to be mindful of that balance between risk and reward when I plan my work assignments, spending and earning.

5) Constantly invest in myself: I've attended writing seminars, industry conferences, financial planning sessions and now graduate school. I invest in technology and professional tools. As a moving and higher-educated target, maybe I'm less likely --I hope to be--road kill.

Here are a few articles that are helpful

From Personal Finance Advice: How I Take Frequent Vacations on a Limited Budget

From My Investing Blog: How can I make more money?

From Need To Be Debt Free: Our Zero-Based Budget for December 2007

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