Friday, June 5, 2015

Get Thee Self Employed

If you look at those who are working in USA it is a little over five service sector to one production worker, say manufacturing, agriculture fisheries.

So much of that service sector is FIRE (finance, investment, real estate), which is in a bubble, and will pop.

Now that narrow band of people actually producing will be obliged to carry those unemployed when the bubble pops.  Add that narrow band of GDP that is to support pension and benefits claims... yikes.

If you have paycheck, pension or property, they'll need you to share.

Get thee self employed, and get your own oxygen mask on first.  This is not a drill.

Feel free to forward this by email to three of your friends.


Anonymous said...

In what way doesn't a self-employed person pay for those unemployed people - when the crash comes everyone who has a job will pay higher taxes - and why wouldn't all the self-employed not become unemployed themselves when those service people can't afford to buy our goods?

John Wiley Spiers said...

As to the first part, in self-employment, like google and boeing, you need not turn a profit to remin in business, or a marginal profit, in which you reinvest the excess into the business, free from the tax-collector. When your business is your lifestyle, investing in your business is investing in yourself. Only employees will pay higher taxes.

This is a country of 350 million people.... I need only about 5000 customers to live beyond my wildest dreams... in the depression with 25% unemployment, well, here was 75% employment. Those service people went into service because the false economy enticed them. When that is gone, with costs falling everywhere, enough of them will get creative to join the others who thrive as those who feel entitled to their titles to property, pension and paycheck slaughter each other as politicians play people against each other.

Popcorn should do well over the next 40 years.


Bill Carver said...

John - as you are an advocate of being a producer vs a consumer and even more specific a producer in something other than "FIRE" sectors you also advise if your going to get a higher education to get one related to Humanities. Can you clarify what a humanities education provides vs a specific education such as Computer Science or even more specific tech school training? I seems one could learn to be a producer more quickly by focusing on a specific skill vs a general knowledge base?

John Wiley Spiers said...

Hey Bill,

Assuming there is a solid humanities course of study, then the mind as a educated resource is invaluable, which I think contributes to the fact that my three kids are out of school without student loan debt (or any debt for that matter) and largely self-employed in non-FIRE activities.

The assumption in your question is the Voch-tech training matches what industry needs. We need more computer scientists to advance the FIRE economy? The schools are screaming for math teachers for they are all making more in computers, but when the bubble pops and diminishing returns hits apps and video games, the bubble will pop there too then. A computer scientist will be limited, the humanities graduate will have seen this all before.

Humanities is far more valuable in self-employment than any particular skill. And what we need is self-employed creators, not cogs in machine. The hegemon will be overwhelmed as rents drop and too many claims on too few resources bring great friction. To be able to look away, ignore it, and work on one's own thing with customers, there is the way out.