[VIDEO STORY] Watch as I tell the story of my first and only attempt at a 'Lonnie Deal' I barely get out alive!!!

Lonnie Scruggs figured out how to make money selling and financing old mobile homes.  I couldn't make it work.  Listen to my story of how I just barely got my money back out of a dire situation.

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The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Follow me on FaceBook at www.FaceBook.com/DBarnettMoncton.

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On the road in Sydney, Nova Scotia

I'm writing this post from my hotel room in Sydney, Nova Scotia.  It's the big city on Cape Breton Island.  The scenery and the views are amazingly beautiful.

What Sydney is famous for though is its poor economy.  Years ago there was a steel mill and coal mine here.  The fishery has always been here and is still going strong but the mills and mines are now closed.

They should have closed 30 years ago but the provincial and federal governments kept pumping money into them in an effort to 'save jobs.'  What they ended up with was an economy based on old industrial-age industries and the companies that served those dinosaurs.

Before coming here I called about 25 companies who Dun & Bradstreet says do over $5M in annual sales.  Almost all of them told me that they now do less than $1M because of the loss of those big industries.

Today though, I met with a businessman who has had year over year increases in his business.  It's doing better than ever, he's even re-invested in growing the size of his facility.  How? Why? If the economy is so bad is this man managing to grow?  Simple. The trend is your friend.

This business sells products that cater to baby boomers who are entering retirement.  There are lots of them around and with Cape Breton's low housing costs, many who moved away earlier in life are coming here to retire.

Making steel is definitely against the trend in North America.  Helping grandpa with his garden is a much better business to be in.

I guess the story just reinforces that no matter how much you try in any business, you'll have a much easier time if the trends are in your favour.  Even if everyone tries to tell you that the economy sucks.

If you haven't already, you should download my package of small business finance articles.  It's FREE and full of useful information. [CLICK]

Cheers.

What should I do with extra cash? Save, Pay off Debt or Invest?

When it comes to personal finances, people always want to know whether they should put extra cash towards savings, investments or paying down debt.  Here are some of my thoughts on what you should do with any extra cash that may come your way.

Also, you may want to try out this interactive debt calculator from The Globe and Mail.  I scored 43.

Savings

The number one priority for everyone should be to have 3 months of household expenses set aside in a plain old savings account.  This is for emergencies. It's not for spending, investing or anything else.  Just a safety net.  Even if you would qualify for employment insurance benefits if you lost your job, you should have this amount of money tucked away for emergencies.

Debt

I categorize debt into two different columns based on what it was used to buy.  You've probably read about ideas like Robert Kiyosaki's who say that home mortgages are bad debt because houses are not assets.  I don't completely agree with him.

I take the stand that if debt is used to buy a house that ends up costing less than renting an equivalent accommodation then the savings is equivalent to an income.  A home that allows you to save money over renting is an asset, to a degree.

I never advocate getting into debt for consumer products, vacations or a car that has features beyond what you absolutely need.  I only recommend borrowing for cars to people that need them for work.  Lots of people live without cars and you can too for a time while you save up for one you can afford to buy with cash.

Dave Ramsay says that you pay off the debts with the highest interest rates first and then the ones with low rates after.  I agree with this completely and I'll add another twist.  There are some debts you should not pay down faster than you have to because the central bank may be helping you with them.

There is a difference between what the government tells us is the rate of inflation or Consumer Price Index and the rate at which the M3 money supply is expanding.

In the Austrian school of economic thought, inflation is simply the expansion of the money supply.  If you are able to borrow at an interest rate of say 2.79% and the money supply is expanding at 4% then you should not pay down this debt any faster than the loan conditions demand.

The reason is simple, the central bank is eroding the burden of this debt for you and you should ride this wave of free debt relief.  To see what the actual rate of inflation is based on the old rules from 1990, visit www.shadowstats.com

All debts with interest rates over the actual inflation rate should be paid down before you start investing because destroying debt is the only 100% guaranteed way to earn an inflation-beating rate of return on your money.  For example, if you paid off an 8% debt you just earned an 8% rate of return.

Investing

Only once you have 3 months of expenses saved and you have paid off all debts which are at interest rates higher than the true rate of inflation should you start investing.

I'll talk more about this down the road but if you've read my book Invest Local you'll know that I advocate a true diversification among the 8 asset classes, not just stocks and bonds.

Thanks for visiting my blog.

Cheers.

Equity crowdfunding comes to the Restaurant industry. Check out this article on a new company specializing in this type of startup financing.

I came across this interesting article talking about crowdfunding for equity in the restaurant business.

Crowd funding for equity has been a minefield for startups because selling equity is covered by the complex rules surrounding the securities markets. (stocks and bonds)

Traditional crowdfunding has been for rewards or gifts.  This means the funds actually end up being 'sales' for the company.

In the equity model, the funds end up being equity and the people providing the funds are given shares in the company.

Restaurants poses an interesting industry for this to be growing because of the traditionally high failure rate in this industry.

I like the new term 'investomers.'  Interesting article.

Cheers.


View an earlier blog post about how crowd funding is threatening traditional lenders [HERE]

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CROWDFUNDING COMES TO RESTAURANTS

The way to consumers’ hearts is through their stomachs – likely because unlike almost any other good or service, food is a non-negotiable purchase for 100 percent of human beings. Individuals have different preferences for what they eat that can vary widely – from vegans to those who will only consume the sustenance of their Paleolithic forerunners, but everybody eats multiple times a day.

Yet, that sure-fire demand for a product seems at odds with the sure-fire path to an investor’s checkbook.

An overwhelming majority of restaurants fail. The most consistently cited statistic is that 60 percent of them fail in the first three years, according to data released by the National Restaurant Association. One might say that those odds are at least better than the 90 percent failure rate of most startups, but the fact of the matter is that restaurants are perceived to be expensive liabilities – and entrepreneurs looking to wade into the restaurant business find startup capital hard to come by.

“I think bank robbers are more welcome by lenders than customers looking to finance restaurants,” one restaurateur wrote for Forbes. “We visited four banks, got outright rejections from three, one of them the same bank that we have had a perfect and significant lending relationship with for 20 years, each rejection because we used the dirty word ‘restaurant.’”

Attracting qualified investors isn’t much easier – considering that an accredited investor under current legal guidelines in the U.S. must earn more than $200K per year or have assets (excluding housing) in excess of $1 million and to launch the typical restaurant venture need as many as ten of them.

But those laws are changing – 15 states have opened up crowdfunding equity investment, and the SEC is currently creating a federal rules framework to expand the circle of who can invest. Thanks to a provision of the JOBS Act, purchasing equity in a small business will soon be open to any investor – within limits, offerings are open to anyone to invest 10 percent of their annual income or net worth in each deal.

EquityEats – a crowdfunding platform for entrepreneurs – is poised to take advantage of this forthcoming expansion in the investor base – and in so doing hopes to create an entirely new class of financier in the food services business  – the “investomer” – the person who buys in because they look forward, someday, to dining out.

“We have seen that those most engaged in restaurant crowdfunding are self-identified foodies, regardless of how much they invest,” EquityEats CEO Johann Moonesinghe noted on the firm’s blog “Opening restaurants with the support of 300-500 investomers (investors + customers) sets entrepreneurs up for success from Day 1. Not only does this group of local people express interest in a restauranteur’s concept, but also they provide tremendous value as loyal guests for the life of the restaurant.” ...more...visit article to read the rest.
[CLICK TO VISIT ARTICLE AT PYMNTS.COM]

[VIDEO] Do you get frustrated trying to explain Internet opportunities to SmallBiz owners? Don't. Seize your opportunity. Buy an industrial age business

Don't get frustrated by small business owners who don't understand the Internet.  Seize your opportunity to build success of your own.


The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Follow me on FaceBook at www.FaceBook.com/DBarnettMoncton.

[VIDEO] What is the true cost of convenience? Beware in the supermarket..

I love The Mrs.Volfie.  She's taught me so much about canning and preserving.

Watch this little video of her latest visit to the grocery store.  Do you ever buy shredded cheese?



Cheers and enjoy the weekend.

[BOOK REVIEW] The Slight Edge by Jeff Olson

Over the last week The Slight Edge by Jeff Olson has been my bedtime reading.  It's the third time I've read the book over the last few years.

What I love most about the book is the simplicity of how the author explains why only 5% of people succeed in achieving truly fulfilling lives while 95% of people end up just 'muddling though' their years here on Earth.

The compound effects of tiny disciplines enacted every day over a long period of time make all the difference.  It's why I try to save money every month, exercise at least every second day, and make an effort to write down some new ideas in my journal several times each week.

Heart attacks don't happen because you ate poorly one day. They happen because you eat poorly every day for decades.  This is the 'downside' of the slight edge.  Unfortunately, it's the path that most people take, just being lazy and not doing the little things that make all the difference.

I highly recommend you pick up a copy if you don't own it already.

Buy now from Amazon.com

Buy Now from Amazon.ca