New Workplace Paradigm Mandates That You Become A Home-Based Entrepreneur

"A home-based business will not work!"

You'll hear this from everyone—everyone, that is, except successful entrepreneurs. What do your parents, your friends, your church, your school, and everyone else you know tell you about working in any way for yourself? Nobody can do it! That's what they say. They insist that you have to work hard, get into a well-paying profession, stay with it for 40 years, and retire with a large pension. To make this work, one must begin a systematic saving and investment program very early in life and stick with it until retirement.

What's wrong with that picture? 

When you first begin to work, retirement isn't likely to be anywhere in your thought process. Many owe tremendous amounts for college loans plus credit card debt; in an article on the Bankrate.com Website, Lucy Lazarony says the average college student owes $2,200 on credit cards and graduate students owe even more—$5,800. Paying the minimum, it would take over 12 years to pay off $1,000; go figure how long it will take to pay off larger balances. Add student loans, and the average student owes a total of $20,402 according to Credit Card Research Program; that's quite a lot of money for a beginning employee to repay. The point is beginning employees aren't thinking of saving. They want things like cars, boats, clothes, to get married, or to buy a home. And they still have those student loans and an ever-increasing credit card debt to repay. There's no money available to invest; not for many years...maybe not ever.

Now what happens with the few young beginners who have the self-control to begin a serious investment program? All investments carry risk; that's why they pay you for making them. Many investment vehicles are available ranging from real estate, mutual funds, stock market, all kinds of hedge funds, commodities, you name it. Most people have decided on 401k plans, IRAs or mutual funds as being the safest way to go; but even these fairly safe plans have been hit with scandals like Worldcom and Enron and all the other accounting scams of the past few years. All these things have caused the value of retirement funds to plunge and sometimes to disappear entirely. You just can't depend on any one source for continuing wealth if you aren't working.

"Well", you say, "if I become a doctor or lawyer, I'll be self-employed and make a lot of money. I don't have to worry about being an employee and be told what to do by others. I can keep the money I make and I'll never have worries about money." 

One of the top financial institutions in the US (I don't want to call names, but I'm very familiar with it) instructs all its agents and salesmen to not call on doctors, lawyers, and other professional people. Why? They all have nice homes, new cars, boats, and they are active in community life. They should be excellent prospects for investments. But they aren't!

These professionals often owe monstrous amounts of money for school and for those fine houses and cars and boats. Dartmouth Medical School says 35% of new doctors owe at least $150,000. They are expected to maintain a certain lifestyle and they will have children who need to go to college. Do the math and you will see most doctors will be approaching sixty when they begin to emerge from their mountain of debt. This is why the salesmen are advised not to call on professionals; they often have absolutely no money to invest!

This also means for most of their lives, doctors and other professionals are not actually self-employed. They work for the host of lenders who have furnished money, they work for the community that expects a certain lifestyle, they work for the automobile and boat dealers who sold them their toys, and they work for the colleges educating their children. They are bound by their financial restraints so they aren't self-employed at all. They work for all these other people. And what happens to this professional if she has an accident that makes her unable to practice her profession? Unless she had the foresight to buy disability insurance (which she probably didn't think she could afford because of her other debts), she could be in big financial trouble.

It is ironic that the same reasons why people should start a home-based business are often given as the reasons why they can't (don't have time; don't have enough money; don't really need to now). I am convinced that everyone should start a home business as early in life as they can, which is right now. Regardless of their personal situation, almost everyone needs a "Plan B"—a diversified stream of income that doesn't put all their eggs in one basket.

Even though people still have these same old excuses, there are new urgent reasons why everyone should be getting their home business started whether online or off. All these operations need time to begin bringing in money; you can't just kick-start them and expect an automatic fountain of money.

What are these new and urgent problems facing us all? You really need to pay attention!

1. There is a frightening move toward employers dictating everything an employee does at home or everywhere. The latest development of this issue is the smoking ban initiated by the Michigan company Weyco. As a result of its firing of several workers, the Los Angeles Times reports a Michigan legislator has introduced "lifestyle legislation" banning an employer from firing people for legal activities away from the workplace. Only a few states have such laws and the federal law covers only race, religion, or gender. The lawmaker rightfully has addressed the possibility of extension of this concept to many other areas like drinking beer or clothing unacceptable to an employer. Other current high profile issues could include weight control, social behavior, and political correctness in speech or actions. Do you really believe anyone should be able to tell an employee how to act in a legal way off the job? Disgusting!

2. September 11, 2001, has shown the spotlight on the possibility of a mass public illness from some terrorist act that can make millions sick. This Homeland Security issue is certainly a legitimate concern, but when you consider the flu vaccine shortage, many people have also begun to be greatly concerned about workplace germ issues. All the news media have addressed public concerns about communicating disease among those around you. On NBCs Today Show, (February 16, 2005), Al Roker said employees coming to work sick has been estimated to cost employers $159 billion a year! I totally agree people should stay home if they are sick. BUT what about hourly workers? The NBC show says, for example, flu usually lasts five or six days, but workers usually come back in less than two days. No work, no pay; they starve to death. So what if employers start firing employees who come in sick despite warnings? These guys have to eat. So even when the employer gives paid sick leave to hourly people, will an employee be fired if their employer thinks they used their sick leave more often than necessary? Who can work when they're in constant fear of getting a bad cold and being forced into a pay cut?

3. Offshoring of jobs to cheaper developing countries has become a very serious issue for many workers. This has the ability to affect any job that can be entirely done by telephone or computer: customer service and most programming and Information Technology (IT) jobs are the most recent victims. Public Citizen reports there are no hard facts about the total number of US jobs lost or to be lost, but they do give these data:

• Gartner Group says 10 percent of technology jobs will be offshore by this year, 2005.
  
• Gartner also says 25 percent of traditional IT jobs will go by 2010.
  
• AT Kearney believes 500,000 (8%) of jobs in banking, brokerage, and insurance will be offshored by May, 2008.

Can you afford not to hedge your bets and protect yourself against the possibility of this happening to your Job? I don't think so.

4. Here come the robots and computer-operated machines. A few years ago I observed firsthand the effects of automation on the textile industry in the US. The hosiery knitting machines used to be operated by one operator for every eight or ten machines and a mechanic who looked after maybe twenty machines. Then came high speed electronic machines where several hundred machines could be operated by one person at a control panel and one mechanic could often repair a problem remotely from a computer console. Changing patterns, formerly an extremely labor-intensive process, could now be done in just a few minutes with a software program. The textile industry is nearly extinct in the U.S. at this time.

The hosiery experience has formed an image in my mind of very large buildings with thousands of machines operated, at some point in the future, by maybe two or three people. So two or three people will replace thousands of workers who will have no jobs as we know them. In this factory, computers connected to robots will receive orders and transmit them to the proper equipment for production; robots will then ship the products to wherever they are required, no human hands involved.

Farfetched? Look at some of the unbelievable things already in the works. Doctors are being assisted by surgical robots, Japanese are developing robots to care for elderly people, and the Smithsonian Institution's National Museum of American History has used a robotic tour guide. Development has begun on a desktop robot system capable of producing just about anything we use in our daily lives and others are developing a robot system that can build entire buildings. The list is limited only by the imagination of technicians.

Whatever happens, jobs are being eliminated worldwide, possibly including yours. The doctors and medical technicians are already at risk as are accounts and tax preparers. Medical robots along with tax return and accounting software will reduce demand for these skilled workers. Stock brokers, legal research, and programming jobs are all either going to developing countries or they will be replaced by Web services or software that does their work; there could be much less demand for any of these people.

These developing issues mean that work as we know it is likely to cease or at least drastically change. In a few years (we don't know how many or how few) there may be no office or manufacturing jobs for people to use for income. We have seen that even service and professional occupations are endangered; there is already a robot vacuum cleaner available for home use. So what are people to do? How will they pay for their needs?

There are some who say the U.S. workforce will not be able to meet demand for workers in a few years; others say there are plenty of workers. The facts are that the workforce probably isn't declining, it is just growing at a very slow rate. Some say greater productivity will cover the shortfall of employees. If the worker replacement ideas we've discussed actually take place, most jobs will be eliminated and there won't be a need for ANY workers. If automation doesn't do this and there is a greater demand for employees, many say increased productivity will compensate for any shortfall. Either way employees will lose. If there are no jobs, they will have no income; if productivity is used to overcome a worker shortage, employees will become overworked and underpaid; they will burn out and be useless. Not a good scenario either way; there really is no upside.

In reality, none of these extremes is likely to happen, at least not in the short run, but there probably will be increasing job loss pressure in the workplace. The government will figure some way to keep displaced workers from by starving offering a subsistence payment of some kind. Would you like to just exist for most of your life without contributing anything to society? Probably not.

Here's how to prepare for the negative pressure that any of these employment developments might place on your future income potential:

1. Start a home-based business either using the Internet or some other business not likely to be impacted by automation or offshoring. You may have to try two or three things before finding the right one, so its best to get into opportunities requiring a small investment. When you begin to succeed, you can put money into a more costly program if your research comes up with a winner.
   
2. Constantly educate yourself and obtain as many new skills as you can so you can participate in opportunities as they arise.
   
3. Actively look for opportunities in emerging fields. If you like one and think you are qualified, seize the chance immediately before it vanishes.

Remember the first and best defense for you is the first option: become a home-based entrepreneur with your own business. Even if you are successful in remaining employed in something you enjoy, your business will provide extra income and a sense of financial security.