So this is not a fun article to write, for our small and medium sized business owners, but here we go!.
We have a huge recession coming this fall and there is nothing we can do about it!.
We are almost living true a perfect storm right now, anybody remember Bodhi (Patrick Swayze) from Point break?, waiting for the perfect wave when the perfect storm hits.
Inflation
As you see on this picture a gallon of gas was 2.29 a few years back, now it has more than doubled in price, in some places like in California it has trippled in price.
Just this fact alone creates huge price increment on all goods that needs to be shipped to stores and consumers.
And everybody using a car is effected badly from this price hike.
This is one wave of the perfect storm brewing.
The second wave is the heating costs in the winter and the cooling cost in the summer.
These bills in June 2022 are just insane for most consumers.
And there is not a lot you can do, about it!.
Food costs are a very serious issue for most working and middle class families.
What worries even more is that most families have tapped out all of their Covid-19 savings and are putting in all on plastic these days.
Credit card
And you can do this for awhile but the bills will start stacking up and the credit card interest is usually on an average 15%+ , so that is not a good long-term solution.
There was over 212 million new credit cards issues in May of 2022 in US alone.
So saying that a huge recession is coming is not an understatement.
These are the few things on the personal level that effects everybody.
What is even more worrying is the component and raw material shortages that a lot of businesses are suffering from at the moment globally.
It is not even the inflation with over 30%+ price increments that are the big issue, simply put you can not get a hold of raw material and components.
Factory
Many components are today on back order for next summer 2023, and that makes it very difficult to operate a small to medium size business.
For instance we have helped two clients this spring with cast iron sourcing when both Russia and Ukraine can not currently supply any of these very much needed raw materials.
We found suppliers in China and Brazil but the price was 25% higher and the delivery time was longer.
So they can continue their production but the customers have to pay 25% more for the same goods.
When we talk about the perfect stort brewing here are the other waves forming at the moment.
CRYPTOCURRENCY
Also a lot of people have invested heavily in the crypto world and in NFT:s and depending on timing of these investments many have lost anywhere from 30-99% of their investments in a short period of time.
So this also puts a very bad strain on the consumer index.
Stockmarket
The stockmarket also taking a huge dive with the tech stocks leading the way, we have seen 30-40% drops from the start in January 2022.
So this means that people will tighten the belt more for each quarter as we go.
And we foresee a lot of restaurant’s and shops going under, due to a very low consumer spending starting in August.
Most people will try and enjoy the summer of 2022 and we will see a big decline in streaming services add ons, and general consumer spending starting in early September.
We have also started to see the housing market cool off quit a bit and if you are in a market for a house, check out our check lists on what you need to know and what you need to do, prior to buying a home, you find it in our shop in the link below.
Today a lot of first time home buyers wish they would have use this checklist to make sure they dont make any irrational home deals.
We have seen certain markets drop by over 30% in Toronto and in many places across the US, from the starting prices in January 2022
We have also started to see freezes in hiring at many companies and Klarna laid off over 10% of their staff last week!.
So let us put it all together for what is to come, when we talk about the perfect storm.
No1:Inflation.
No2:Gas prices.
No3:Heating and cooling costs.
No4: Global Food shortages due to the Russian invasion of Ukraine.
No5:Components on back orders.
No6:Food prices going true the roof!.
No7:Lower consumer spending, the US economy is a 2/3 consumer spending based economy.
No8:Lay offs and companies closing and going under.
No9:Cooling off in the housing markets globally, many markets are selling 30% below January 2022 prices.
mrlifeadvise
We are currently working day and night with our smaller business owners to help them prepare for what to come in the fall!.
With our medium sized business owners and hired management we are providing help with sourcing goods and material across the globe for them.
So if you are a business owner we have calculated that the inflation will slow down by December 2022 and from January 2023 we will start to see stagflation instead.
The component shortage will be around until the fall of 2023 so more than 17 months from today.
So it is time to brace yourself for impact very soon as a business owner, and try to stay a float if you can.
As always we are here to help you as a client, just send us an email if you want a special package that you can not find in our shop.
This topic is a bit sensitive and we do not want to hurt anybody’s feelings.
But as small to medium size companies business consulting firm, we need to mention this, because it is very real in 2022!.
Why are companies living?, California and New York and moving to Texas and Florida, not to mention South and North Dakota.
Los Angeles
Los Angeles has one of the worst permit issues in the country for running a business.
Anybody who have dealt with the city of LA and when it comes to permits and other things you need as a business owner, knows how hard it is to work in LA but all of California has the same issues.
And it is not getting any better anytime soon!.
Nyc
NYC is even worse than California is and they love to fine small business owners for all kinds of shitty small things.
And quite frankly most code violations are not even true, they just fine you anyway, or they send somebody to your bakery or Pizzeria, auto body shop and wait until they see a small breach and then they fine you 500-1500 dollars.
More and more small business owners understands that running a business in blue states compared to red states is very difficult and full of red tape that you need to jump over.
And it is not only the added costs for fines but also all the work that goes into running around sorting things out that brings zero revenue to your business!.
Florida bridge.
The sunshine state of Florida has figured out a way to attract new businesses and create more tax revenue and more better paying jobs in these pandemic times.
We can see that keeping the schools open was the right decision in the red states compared to the blue states, and it saved a lot of families heartbreaks by letting kids have in school learning rather than remote learning.
And many parents have move their business to Florida, so their kids can get the proper learning on time.
And the parents have taken their companies with them!.
We have to say that Ron Desantis and his team has done a stellar job in making sure that business will thrive in Florida.
Also that Florida has a full police force makes it a much safer state than California and New York for instance.
What politicians in California and New York dont seem to understand is that business owner’s wants to live and work in a safe environment.
Florida is a big winner here, and with every new home invasion in Encino, Beverly hills, The hills, Brentwood and Malibu more and more wealth will move to Florida or Texas.
Texas
Texas which also is a clear red state even if Austin could today already be considered a blue city!.
Dallas and Houston are powerhouses for business, and San Antonio and Austin are more laid back.
And more and more small business owners are asking themselves this very important question?, do i want to stay in a blue state like California and New York and always be chased by my local government or am i ready to leave?.
Some of our smaller clients ask us, would we move from California and New York to Florida or Texas?, the answer is very clear in our mind.
If you have the possibility, not everybody can do that, they have elderly parents and relatives that need help on a daily basis and if you can not take them with you, we understand that moving is not a real possibility.
If you feel that you find yourself thinking about a move you can always reach out to us at Mrlifeadvise.
We have helped many of our clients with the move from California, New York to Florida and to Texas in the past 18 months time!.
So we have the checklist ready for you.
You can email us or visit our shop and chose the business consulting package and we will take it from there.
So we are now in the end of April 2022 and the world is falling apart as we know it!.
Does it sound harsh?, it does but it is also the truth that we have never have this many problems at once that are interlinking the world around us!.
Money.
We had Covid-19 for two years time, and then he have a raging inflation caused by bad energy policies and cheap money in the US and in Europe.
On top of that we have a war raging in Ukraine that we have not seen since the second world war 80 years ago.
And if that was not enough, the US crime rate is back at late 80s and early 90s levels, never thought i see that day again!.
The gas price of 5-7 dollars is insane at the moment and families are suffering with both gas and food prices increasing much faster that their paychecks are.
We can already see that families are cancelling their subscription services for Netflix,Hbo,Disney and others to try and use that money for gas instead.
LA LA LAND
The people that we are being shown on tv and as influencers on social media are showing off money like there is no tomorrow, this is not the real world of America.
The average household income differs a lot, but lets put it at 65.000 USD pre tax for two adults from the working class and 95.000 USD pre tax for a middle class couple.
Raising kids and paying of a mortgage and car payments Ain”t easy on these incomes when the inflation is almost +10%.
The problem we have is that there is no quick fix to these issues due to us having to live with bad politician’s who are only looking out for themselves.
So no doubt in our minds that the republicans will win everywhere in the midterms and Trump will win the 2024 president election again.
The democrat’s have no future in the upcoming 5 elections.
So first Trump will win then Ron Desantis will take over after that and sit two terms.
The issue with this is that there is more than 2.5 years until TRUMP takes office again and starts drilling so the gas prices goes down again.
And a lot can happen until then.
SADNESS.
The kind of pain the average family will feel financially in the upcoming 3 years is goanna be much worse than the financial crisis of 2008-2011.
We are goanna see the issues with gas and heating bills increase a lot during the upcoming few years time.
And the one thing we tell our business clients owners of small businesses is to buckle up, because it will be a very bumpy ride!.
The four walls will be what the American and European working and middle class will focus on and we are goanna see a lot of businesses go under who offer entertainment, because that is one cost families will not be able to carry between the years 2022-2025.
Also we will see more kids enrolling in public schools because private education will be to expensive for most families to carry.
So food ,gas, heating and mortgages will be the four walls, if we are looking ahead a few years time.
Most likely we will see the light at the end of tunnel around 2026-2027 and around 2028-2029 it will look a bit better again.
So what can we learn about this crisis?, we can learn that republicans can rule the economy and if you are not butt hurt from a few mean tweets you can live a pretty good life under the republicans.
We have also learned that the democrats a side from a few brave men and women are not able to lead America when it comes to finances and prosperity.
I agree with the republicans on most issues besides universal healthcare.
Universal healthcare is something America needs to fix, because the healthcare bill is 10X compared to the same bill for many countries in Europe based on capita.
Even the most hardcore democrats who have always voted blue!, will vote Red!, in the upcoming midterms and in the next presidential election.
What we have told all our business clients this month is the following!.
How Inflation is affecting us all!.
No1: Right now there is massive inflation raging all over the world, but the deflation will come next year.
So don`t buy to much inventory/stock with the 2022 prices in mind.
Demand will go down next year 2023.
No2: Debt!, avoid taking on more debt, rather let the deal pass, if you have to borrow for raw material and other expenses.
Loans
The market you are working in , with your small to medium size business can see a drop in demand by 50% by the end of 2022.
This is just a simple fact to keep in mind, that once the products or services you supply gets to high in price, customers wont buy anymore.
No3: Avoid to complicated deals with long-run time , since this world is moving so fast at the moment we can not say what the situation is 6-9 months from now.
One of our clients produces tractor parts and his suppliers has a 11 months delivery time to him.
We have advised him to be careful with new orders, because they can be cancelled along the way, because he has then 12-13 months delivery time out to customers.
So the inflation is kicking us all in the head at the moment and every month becomes more absurd that the last!.
This is where we are in Early May 2022, a world that is totally upside down!.
As always we are here for you small and medium sized business owners or hired management for medium sized companines.
You find some of our products in our webshop.
Contact us if you want a special package!.
We work with both domestic and global clients in many different businesses.
So just dont ask us about fashion or beauty then we can not help you LOL!, otherwise we got you covered.
So many of our clients run smaller to medium sized production or import/export businesses.
And right now their biggest issues are the inflation and delivery time from their suppliers.
Which then ripples down to our clients end-users and customers.
Inflation
So here is a very good example from one of our clients who sells boat motors.
He has to wait 10 months for deliveries from his supplier for these motors.
If he has now 2 million dollars in orders in from his customers in April 2022 for deliveries in February 2023.
How can he be sure?, that these customers will still be in business in February 2023?.
And what happens to his business if half of his customers will cancel their orders midway for do not accept delivery in February 2023 when he can supply.
We have said to all of our production clients that they need to analyze each of their customers individually when we are living in this long delivery time world, and also living with high a inflation rate.
Factory
We usually tell our clients to use the proforma(prepayment) option for those clients the are unsure of.
So let us say that our client sells a motor for 10.000 dollars, his purchase price is 7.000 dollars, from his supplier.
Then a good business model is to ask the customer to pay 50% upfront(5000)dollars.
This way our client only has a 2000 dollar in exposure, if the customer is not around when the motor is ready for delivery.
This is a tough sell, we know this, but it is the only way you should work on if you are not very profitable and have a lot of money stashed aside in your rainy day fund, guess what its raining!.
Credit
Because if you as a small business owner buy products on credit and then your customers wont accept delivery, you are in a very bad place!.
Then how do you deal with the inflation, if you have 10+ months delivery time from your suppliers, which is not uncommon in April 2022.
What you do is that you make an agreement with your supplier on a fixed price, with a maximum 10% mark up option for them, during this time period.
Then you raise your price by the same 10% towards your customers.
If your supplier refuses to accept this, and they work on price level on the delivery date, you need to figure out what that price could be.
We recommend our clients to add 15% then on to the price due to inflation and in the worst case scenario they need to eat the cost themselves, if the 15% does not cover the price hikes on the delivery day.
Some bigger suppliers will honor quotes given the same year of the delivery.
And some will say that you will get the final price on the date of your delivery.
It is very difficult to be a small business owner these days with the enhanced credit risk when you do not know who will be around 10+ months from now, and who will not be around.
We advise all clients to not make a deal with a new customer unless they get at least 50% of the invoice amount upfront.
We have also told all of our clients that they need to count that 30% of their orders might end up in stock, if there is no customer alive on the other side, once they can deliver the products in the future.
With the insane energy costs and a raging war in Ukraine the world is in chaos right now!.
So you need as a small business owner to take action to protect your lives work.
So inflation and delivery security is at play globally right now and it is not pretty to watch from the sidelines.
If you ask us, which our clients do, we have told them that the recession is coming later this year and they need to be prepared.
If you need business consulting we are here for you.
You can find our different packages in our shop, and you can also email us for a customized package if you need that.
So there has been all this conversation in the last 3 weeks time that China will bailout Russia.
Because when Russia becomes a paria in the EU and in America China will magically save the Russian economy on their own.
At least this is the conversation many are having.
And it is so clear that the people who say this have no insight into the Chinese economy in the year 2022 what so ever.
Let us talk about why China can not help Russia out financially in 2022!.
China as huge problems on their hands as we speak and that is a busted real-estate economy.
Mainly started by one very large company called Evergrande.
Evergrande
So this is the largest real-estate developer in the world and it has a very strange story where the company goes from nothing to having a 150 billion $ in assets in 10 years time!.
The company was founded by Hui Ka Yan in Shenzhen China.
And they developed a lot in Guangzhou to start with.
China has aspired to be the largest economy in the world by 2030 and they have also wanted to be the factory for the whole world.
These two things goes hand in hand.
The real-estate market has pretty much gone up every year since 2005 in China and the way the property i sold has also created this debt monster that the Chinese government is sitting with at the moment.
Offices.
The big issue for China has been that most of the real-estate built by Evergrande has been non commercial so basically apartment for Chinese workers moving in from the country side to work in the factories.
What we need to point out is that Evergrande is the well know developer, but our sources say that there are over 1000+ Chinese real-estate developers that are deeply in debt.
So with out sugar coating is basically we had a Chinese housing crash that took place in 2020 and 2021 that we have not heard so much about in the Western mainstream media.
The reason companies like Evergrande could grow so fast was that they took on huge amount of debt(loans) and at one time had over 1200+ projects going on in over 100 Chinese cities at once.
So before even one project was half ready new projects where started.
This all was to accommodate the farmers that where moving in to the cities in the early 2000s.
During this time there was a lower middle class growing in China which was estimated in 2020 before the Covid-19 hit to be around 400 million people.
And the real-estate market was the main driver for this.
Loans
So the way the Chinese real-estate market has worked is that the worker saves up enough money to put down a down payment of roughly 25% to buy an apartment that is yet to be built.
Usually many relatives save up to this down payment together to be able to buy the first apartment for the family.
But what Evergrande and many Chinese developers did was that they used this money from one project and put it into another project.
And many times there was big delays in finishing the apartments that where promised to the customer.
But this business model worked as long as the real-estate prices where going up every year.
So around 2007 a lot of Chinese normal workers and the middle class started to invest in apartments that where yet to be built with the hope of cashing out once the project was finished.
Basically they where speculating for the future.
China
The big problem for normal citizens in China is that you can not really leave your property with the bank if you get foreclosed on.
You will own this debt for the next 30+ years or until paid.
There is also in China an insane system that if you have a bad credit score you get blacklisted for jobs and you are not allowed to ride the high-speed trains around China.
Do not ask us why this is the case?, nobody really know what debt has to do with high-speed trains.
And this is not Amtrak, it is very modern high-speed trains that China has developed with great success over the past 20 years time.
The bigger issue is that the state has allowed these real-estate companies to build even ghost cities, where almost nobody lives and this has all been just a huge waist of money.
Then when foreign large companies builds factories in a city then comes the real-estate builders like Evergrande and they start to build apartment’s for the workers.
The big issue with this is that if a few factories closed then the real-estate market crashed because people needed to move out to where the jobs where!.
There are so many horror stories in social media in China where people are trying to give away their apartment that they bought for 500.000 $ , 5 or 10 years ago.
Because they still own 150.000-250.000 $ on it.
And thet can not pay off this debt at the moment.
The bigger issue is that as an apartment owner what ever costs are being accumulated you are still responsible for them even when you have been foreclosed on in China.
There is today in March 2022 an estimate that over 37% of all mortgage holders are under water with their mortgages in China.
And this is the ticking financial time bomb in China.
What makes the real-estate crisis so very bad in China is that a lot of people have invested all their money and even taken out loans and handed this money over to Evergrande and others for apartments that have yet to be built.
So basically these investors(apartments buyers) have lost all of their savings and are also deeply in debt!.
Stockmarket
If we look at the Evergrande stock it has gone down -89% in one year, and it is down -79% in 5 years time.
This is also one of the reasons why the Chinese state have asked the main owner and Founder of Evergrande to cover with his private wealth some of the foreign bond payments that the company has defaulted on.
At this point in time the Chinese state is trying to keep Evergrande from crashing into a big black hole, and if they would allow Evergrande and others to crash that would be a 20x compared to Lehman brothers default!.
So this is one of the really serious economic things going on in China when it comes to their domestic financial issues.
The second really large and difficult financial matter for the Chinese state is that many Japanese and Western companies have been leaving China for the past 5 years time.
This just increased more after the Covid-19 Outbreak where companies saw their logistic chains break when China could not supply parts.
And not to mention the price increasments in container shipping from China to the US and Europe.
This alone has gone up around 7 times of what it was in January 2020.
So a container that cost 2.000$ to ship in January 2020 is now 14.000$ for the same items to ship.
This also means that a lot of importers might not want to take any orders when the freight cost is so high at the moment.
So many Chinese workers are also currently unemployed when factories have and are closing every day moving the job’s back to Japan, South-Korea or the West.
Chinese communist party has a lot of of internal problems also to deal with, there are power struggles behind the scenes with to flanks going at it!.
Kremlin
So the Kremlin and Russians banking on China coming in as some kind of savior to Russia, those dreams will not come true.
China will do a few things for Russia and they are not pretty, looked upon from the outside.
The major thing that China will do is to buy all the raw materials, Oil and gas that Russia can produce.
But China will buy with big discounts, so if Russia gets today from the US and from Europe 100$ for something China will only pay 70$ for the same item!.
And Putin and Russia has no way of really standing firm on prices towards China.
The second thing that China will do is that they will supply Russia a lot of products like components that will hold much lower quality compared to if Russia would buy these in Europe or from the US.
The third thing that China will be looking at is to get access to Russian females, meaning that the Chinese state is looking to move Russian girls to China for marriage.
Since there is a huge imbalance in China between the two genders.
Any sane person who has an economical background or has worked in the commercial global trade are shaking their heads as we speak!.
The Russian economy has been shaky since 2014 when Russia when in to Crimea the first time and some sanctions where put on Russia.
But that was a small wind blowing compared to this hurricane.
Russia has destroyed it own economy in less than 30 days and this will linger for decades to come.
So 30 years of financial progress in Russia, has been destroyed by Russia itself in less than 30 days time.
Books will be written about this topic for decades to come.
depressed
Most private Russian business owners are very depressed right now since they know that their business will not be able to work with the EU or the US for many years to come.
But this thing with letting Putin get away with everything for the past 15 years time is also a lot of their own fault.
The middle class has supported Putin in many elections, and here we are!.
So basically Russia is not goanna get the help and support they believe they will from China because China is always only looking out for themselves.
And with the domestic problems that China has now, Russia will be a country that pretty much will take their marching orders from Beijing for the upcoming two decades at least!.
Yes there are young brave Russians trying to fight Kremlin and Putin, but the middle class and the middle aged people are not hitting the streets, and we do believe that 60%+ are supporting these war crimes that Russia is inflicting upon Ukraine at this moment.
So when you hear somebody say that China will bail out Russia and we in the West are the big losers, ask them about the domestic internal problems with the real-estate crash that is going on in China at the moment and listen what they have to say about that?.
It is very clear that most people do not understand the Chinese economy, and they just speculate that China is so financially powerful at the moment.
Basically China is ending its own middle class as we speak due to this financial real-estate crash that is going on at the moment and the cracks has just started to show!.
We can write many articles on the Chinese and Russian economy, but here is a short version on why China will not be able to bailout Russia in the way most people expect them to do.
Our business clients are lucky, due to the fact that we have people in our company that has worked in both Russia and China for the past 40 years time.
So we can truly support our clients, every step of the way.
Today one of our clients could not get a shipping date from China due to Russia not allowing Chinese rail containers to go true Russia towards Europe.
We are talking about at least 1 million containers per year that is suppose to go true Russia.
So now we have to sort out another route for our client.
As always you can find our consulting support and other products in our shop, see the link here below.
So here comes an explanation about the Russian economy from 1991 up to 2022 and the Ukrainian invasion.
Our oldest management business consultant Lars Eriksson born 1942 is the person giving our clients and readers his thought on the Russian economy.
Hi!,everybody my name is Lars Eriksson and i have worked as a management and business consultant for the past 50 years time.
I was born in Stockholm in 1942 into a poor working class family.
I moved to Los Angeles in 1969 and i lived in the states until 1992.
In 1992 i moved back to Stockholm and i got a job offer in 1993 in Moscow, helping American and European smaller to medium sized businesses to help them establish there operations in Russia.
Kremlin
You have to remember that i was very experienced in global business at the age of 51 when i moved to Russia.
But nothing could have prepared me to work in this chaotic gangster wild west country that Russia was in 1993.
The Russian economy has never been stable to begin with!.
Also we should all remember that Russia had no internet in 1993, so you had to meet people face to face, and build contacts that way.
I have personally meet many of the people you now see on the tv OR read about is magazines and newspapers when they where up and coming.
I will not name any names, but i have meet almost all the top guys both in the political and business world during my years in Russia from 1993 to 2014.
Russia has always been very corrupt and nothing got ever done without the all mighty dollar bills.
I remember by first big project for a UK based company who wanted to establish an office in Moscow with a small warehouse/plant to start conducting business.
You had to pay officials for everything back then, to get electricity and water not to mention garbage collection.
Moscow
A lot of people talked about the Russian mob and, yes they where a problem for a lot of our clients back then.
But they where like kindergarten kids when comparing to the corrupt officials from the Russian parlament the Duma, or local officials you had to deal with to get anything done in Russia.
The Russian economy grew a lot from 1991 up until the ruble crashed in August 1998.
Ownership on land and buildings was always very unclear, when the companies i helped set up shop in Russia, opened up their operations on Russian soil.
I can tell you that more often than not, when one of our clients had built a small factory on land they had bought in Russia.
Some local politician or shady businessman showed up with an official document stating that they where the rightful owner of the land the factory was standing on!.
And then the negotiating started, where he asked for 1 million dollars and that was usually negotiated down to 200.000 dollars over time.
Many companies where told by the firm i was working for that the ownership of land was very unclear in Russia, and that these type of claims would come up more often than not.
There was a great hope among a lot of Russians that Russia would take a huge step towards Europe and America in the mid 90s and even up until around 2006.
But after our war criminal Putin came into power in late 1999 he made it very clear that he was not a friend towards foreign investors, that wanted to invest heavily into Russia.
And already around 2006-2008 many western companies understood the ownership risk with owning a company in Russia.
And many smaller to medium sized western companies pulled out of Russia or has today just a small office/warehouse/production type of business in Russia.
The big companies like McDonald’s, Volvo and IKEA they had also issues in Russia, but they where big enough to sort true them from a high level.
Most of the companies that i helped from America or Europe where companies that had everywhere from, 10 to 200 employees in Russia.
USA
And these companies where used to the protection and laws in Europe and in America, so many where completely unprotected by local government or Russian national laws.
Every business owner has at least two bodyguards at all times and the office has security personal always on sight.
One very interesting aspect of the Russian economy was that there was no support from the STATE to support foreign investments from small to medium sized companies coming in and creating high paying jobs and tax revenues.
And this is where i feel that Russia made a big mistake in not protecting and helping smaller to medium sized companies expand their operations in Russia.
Basically you where on your own, when you invested 1 or 2 million dollars into your Russian company.
And you had to depend on fixers like me, or Russian fixers who could help you navigate the labyrint that the Russian bureaucracy was and still to this day very much is!.
Russian economy is like a very powerful BMW 7 SERIES that they started driving and the switched to gear two and three, and this is where they stopped!.
They where never ever able to switch gears after driving on gear 3.
American middle class.
So while there was a quit decent amount of Russians in Moscow, St Petersburg and other bigger cities in Russia who where able under Putin to become the Russian middle class, they still to this day only make around 40% of what the American middle class worker does.
It became also very clear to all foreign investors like Bill Browder from Hermitage capital and others around 2010 that unless you paid Putin and his friends a lot of money, you had no future in Russia.
The Russian middle class is a lot to blame for going along with Putin and his cronies.
I remember being beaten up in Moscow by a member of the duma and his two bodyguard’s for not allowing them to shake down a company from Dallas on my watch.
So Putin allowed a lot of gangster politicians to shake down foreign businesses from day one, and this has never stopped.
So the Russian mentality is that if i am doing well fuck! everybody-else, so there is no nation building going on in Russia and it never has had any interest in making sure that the whole country moves forward together!.
So when we talk about the Russian economy it is based on raw materials and Oil.
Oil and gas
So oil and gas and natural resources is over 70% on the total GDP in Russia.
And this also means that Russia has wasted so many decades to improve other industrial products and businesses that could have balanced the GDP better.
One should also remember that 50% of this money is stolen by Oligarchs and Putin every year.
In the last decade the IT sector has grown quite a lot and there has been smaller silicon valleys popping up here and there all over Russia.
BUT! they have mostly lived on working for US and European companies in and from Russia.
This is now all gone in less than two weeks time.
And with all social media like twitter, instagram and Meta/Facebook being banned in Russia there is a new iron curtain coming down a new USSR 2.0 that we are seeing take place in front of our eyes.
Gas station.
So some American politicians have said that Russia is a gas station disguised as a country, which i quite rude, but there is some truth to it!.
We should also remember that the Russian economy with 140 million people is pretty much on the same level GDP wise as Spain.
And Spain with 45 million residents have no Oil or gas to sell.
If we also take into consideration how poor the country is outside of the big cities where up to 50 million Russians have no indoor plumbing.
Europe and America has nuked the Russian economy back 30+ years at least.
And now the Russian population have to pay the price for supporting a dictator that Putin truly is!.
I have seen that many Europeans and Americans have high hopes that the people closest to Putin will stop this or over throw the government.
I am not hopeful, because the Russians that are against this Ukrainian invasion are to few and have no real power to do anything about this.
Alexei Navalny was the last hope for a candidate that could get Russia back on track again”.
He is in prison and wont get realesed for many years to come.
And we see some very brave Russians protesting against Putins war, but they are way to few.
Only if 15-30 million Russian would start protesting on the streets every Saturday, could we see a move on Putin and his cronies.
I do not see that happen anytime soon.
Siberia
Life will not change so much in the country side, other than pensions will be reduced by 25-30% In the upcoming year.
But in the big cities we will see a lot of middle class Russians that will once again feel how it is to live and work in the USSR 2.0.
Their living standard will drop by at least 50% already this year!.
I personally feel really sorry for all the Russians that wants to be a part of the Western world and have been protesting against the war and Putin.
They will also now have to pay the price, for one war criminals believes that he can take over Ukraine in 2022!.
The Russia we saw between 1991 and 2021 all the progress that was made even if it was no where enough, is all gone in two weeks time.
You have to understand that in 1998-1999 the whole world was helping Russia move forward and the trade was still booming, today no company wants to touch the Russian market.
Many people say that China will save Russia and its economy, it wont happen.
. China
China will always look out for number one ,which is China.
And for sure they will buy Russian oil and gas and other minerals but for a big discount!.
And i also believe strongly that the US and Europe will still buy Russian oil and gas for many years to come.
But the other businesses and all foreign investments are gone from Russia and it is not coming back anytime soon!.
Even if the Russian people would find away to get rid of Putin and his cronies, the PR damage is so big that it will take at least a decade to get companies back to Russia.
And here once again all the missed opportunities in the last 3 decades comes into play again, that the Russian economy is so small that a lot of foreign companies do not need the PR headache that Russia is today.
I feel very sad that in 2022 we see bombs fall on cities again in Europe, I WAS BORN IN WAR TIMES 1942, THE SECOND WORLD WAR.
And i had hoped to see no more wars in Europe in my life time.
But Russia(Putin) created this mess and everyone including Russians have to suffer for it.
And if you do not understand that the Iron curtain has fallen down already then you are blind.
The Russian rubel is cheaper than toilet paper at the moment so that says it all!.
Good buy Russia, it was nice to know you for 3 decades.
The things i learned and saw in Russia has made me a better person, and i have a better understaning for why some countries never ever will be truly able to be part on the Western world.
We can all hope for a miracle when it comes to Russia, but i do not hold my breath!.
Take care out there.
Mrlifeadvise.
WE offer many services to global customers, see the link here below.
So we are in the middle of February 2022 and the inflation keeps creating a lot of issues for small and medium sized business owners.
We have been contacted by many of our clients in the past 5 months time regarding the inflation issue in every single business.
Inflation.
We have clients who are working in the industrial production side of things who have seen their electricity bill go up 300% in this short period of time.
They have also seen their raw material prices go up 200% in the same period of time.
How do you as a business owner deal with this?.
So for the production and the industrial side you need to sit down with your customers and explain this situation to them.
What makes this sometimes difficult is that many production companies have singed agreements that they can only raise the price 5-10% per year no matter what!.
Then the only option is to either eat the cost in the business and hope for a deflation coming your way next year.
Or simply stop producing the products if you are forced to sell on a loss.
Production plant.
The issue with stopping production even if you are selling/producing on a loss is that you might go under, and if you can not get your customers to the negotiating table you will have to eat the loss for awhile.
And then it all comes down to what kind of financial situation you where in before the inflation started to take off!.
Pretty much it comes down to how much money you can afford to lose and how much money you can loan to stay afloat.
So for production companies this inflation is pure hell!.
And the bad news is that it will continue all of 2022 at least.
So think twice before you go into serious debt with your business, that you will need to pay these loans of going forward.
Loans.
For restaurant’s and coffee shops and similar establishment’s you need to just raise your prices with the inflation.
If January was 10% more expensive when you bought your items ,that cost has to be put on the consumer/customer immediately!.
Do not wait, and do not eat the cost yourself if you are a small business owner, it just gets worse for you if you do.
Restaurant.
Talk to your customers and explain the situation if anybody complains.
One useful trick is to have 3 invoices from your suppliers from 2021 and then 3 invoices from 2022 that you can show your customers that you are not salting their bills for fun, it is out of pure survival for your business.
This way you defuse the conversation by showing your customers why a food item can cost 15 dollars in 2022 that was previously 12 dollars in 2021.
If you can offer free coffee in a restaurant and maybe offer a small cookie in a coffee shop free of charge, these small tokens can go along way with you loyal customers.
Try to come up with small cheap ways if possible to compensate your customers for the price increasments that you have to pass on this year in what we call inflation hell!.
One of our clients has the issue that he is producing an aluminium pipe for a large customer and his raw material price has gone up 400% in 7 months time!.
We helped him negotiate with the large multi billion dollar company(the customer) that they will accept a higher price from him on the pipes and when the deflation starts to kick in we will lower the prices towards the customer again.
And HE sends over the invoices every month now to his end customer on the raw material he uses for their pipes.
And this works because he is upfront with the customer that he can not eat this inflation cost , and keep producing for them the pipes unless they accept the higher prices, even if the contract does not allow for that.
Bridge
So as a small to medium sized business owner you need to bridge the gap towards your old prices and into the new reality of inflated prices on everything pretty much today.
So negotiate as much as you can and be upfront with your customers, and you do not really have to play hardball just put up your hands and explain the current situation to them.
We are here for you small and medium sized business owners or hired management, we are business advisers with a global reach.
See our packages in our shop in the link here below.
So during the past 22 months time a lot of people have started working from home and it seems that it just keep growing for every month that goes by!.
Working from home good or bad?
Working from home.
If we start with the good stuff then working from home saves you the big Elephant in the room which is the commute time!.
For most people the commute time can be up to 1h each way per day.
If you live and work in a small town that might not be an issue.
But if you live in New York or Los Angeles you know what we are talking about.
So just by not having to commute gives you that extra 2 hours a day.
If you like to sleep and extra hour and then go out and take a walk for the other hour, your body and mind will feel more uplifted along the way.
The second really nice thing with working from home is that if you do not like all of your co-workers you do not have to see them in person every day, other that true a video chat.
The third thing that is really nice is that very often if you have kids you can structure your day so it fits better with their needs if you are working from home!, compared to you having to sit in that office all day.
Are there any big cons working from home?.
SADNESS.
Some people can feel a bit sad by working on their own from the comforts of their home.
This usually affects people who are very social to begin with.
You know the type who always like to chat with you in person at work.
They seek you up to talk to you, which very often can be nice to also know your co-workers on a personal level, even if you are not friends.
The second thing that can be really difficult when working from home is that you do not have a real separation between your work space and your home space.
One way to solve that is to create a work space for you, where you only work and then once the work day ends, you do not touch that space for the rest of the day.
High calorie intake.
One of the things many people notice is that they gain a lot of weight when they are working from home.
And the easy access to food and drinks will create large problems for people who struggle with their weight to begin with.
Or even people who never struggled in the past, are now finding out how easy access to food and drinks is dangerous to your weight.
Then we had the pro when it comes to having more time for your children, it can also be a big challenge working from home and constantly being interrupted with your child’s questions or their need for attention.
Then one other big con with working from home is that if you love to work in the city and have that puls around you, you will miss that a lot, working from home.
The feeling we have as business consultants are that we are moving towards at least in the office space work force more to a work from home enviroment.
And many employees will not accept to go back to a physical office and work form there.
Every employer have their own way of dealing with this.
Many of our clients have down sized their office spaces to really small offices for the few people that would like to work from the office.
The one thing we have seen is that many workers that are over 50+ do not really like to work from home.
They have in their work DNA that they want to work from the corporate offices and they choose that option when it is available for them.
Offices
So for many companies the big challenges are coming up during the next few years time with how are you goanna structure you companies business when it comes to different work environment options.
For high end workers they will always have the options to choose from where they work.
For midlevel employees it will depend on the company and many companies want that control that they have when they have all office staff in one place at once!.
We foresee from Mrlifeadvise side that the way we work and where we work has just started, and the true revolution is yet to come.
If we look at the changes that has come about in the last 18 months time, we strongly believe that give it another 5 years and the structure will look way different than it did in 2019 for instance.
We offer you high quality business consulting online.
And it does not matter what type of business you run as long as you are a small to a medium sized business, then we got you covered.
Then we can strongly recommend that you check out this weight-loss company that have helped many of our clients lose-weight in the past few years time https://lose-weightcheap.com/shop/
So we want to wish all of our clients and readers a merry christmas and a happy new year.
Some of you have commented on why we are light on articles at the moment?.
As many of you small business owners know, the 2021 has been even worse for many small business owners than the 2020 was.
The Covid-19 discussion is ongoing in many place and the worst inflation in over 30 years is reeking havoc on many small businesses.
Not to mention the worst supply chain problems world-wide that we have seen in the past 50 years time.
Being a small business owner has never been harder than in 2021.
Families are working day and night to make ends meet for their small and medium sized businesses.
And this has been our case for the past 4 months time starting back in late August.
Many business owners reached out to us both old clients and many new clients who needed some one to talk to about the mayhem their business was living true at the moment.
This is what we do so well, we listen to our clients problems and we try based on our global business experience to help out clients the best way we can.
Lets give you readers an example of one of our smaller clients who runs a diner type of business, and he could not get a hold of plastic cups or any kind of items needed for selling coffee and similar items.
He was even told that his account that he have had for over 25+ years time with one of the largest suppliers in the world, was not goanna be active for 2022.
So basically they got cancelled out by their supplier.
We where able to come up with a solution to keep their customers happy and coming back with a really interesting incentives.
The diner started to sell a high quality cup that keep the coffee warmer for longer period of time, the price was for 15 dollars.
And the customers who bought that to go cup, and brought it with them every time they came back got the next 20 cups of coffee free of charge.
This way customers came back for their free coffee and they also bought cookies and other food items.
So there are always ways to survive in this crazy world as a small business owner, but you need to think outside the box.
We will start posting every other week starting in January.
Take care guys.
If you need consulting you can always find that in our store in the link here below.
So after a very hot 18 month on the US housing market we can clearly see that many young couples are suffering from buyers remorse.
It is not really that uncommon that first time home buyers are feeling sad after a year in their new home.
First home
In the old days couples usually saved up for the down payment for a period of 3-5 years and they looked for a long time in many different areas, before buying a home, they came very well prepared.
Now in 2021 when people are buying homes UNSEEN we are living in very different times.
And the buyers remorse has started to set in more than ever for the young couples who bought a house unseen during the Covid-19 pandemic.
It has been like a gold rush in the housing market and some markets are up by more than 200% in a 2 year period, which us just Crazy”, on any real-estate market.
House buyers remorse
And the sad thing in the areas where house prices has doubled or more is that the young locals can not afford to buy locally any longer when people from out of state are buying up all the inventory.
The good news for the locals is that within 3 years time a lot of these houses will drop down a lot in price when the out of towners will move on to bigger and better things.
But getting back to buyers remorse on your first house is pretty interesting when looking at it from an outside perspective.
A lot of people had a budget of 600.000 USD when starting out and after a fierce bidding war the price ended up at 795.000 USD.
So now suddenly most couples over spent and are so called house poor, a lot of their income goes towards the mortgage and property taxes in the states that have them.
Not to mention the big dirty secret in all house deals the so called necessary repairs that needs to be done almost every year.
DEBT.
We usually estimate for our clients that are buying their first home that they will spend at least 500 Dollars a month on maintenance and repairs on a 200sqf house, for as long as they live there.
What makes couples regret their home buy is often that when you overspend on a home, you have no money left to do anything-else and the home starts to feel like a prison after awhile.
This is here is the main reason why you should think about an area for a long time and follow the comps, and never ever overspend on your first home.
It is very easy to get carried away in the hype, but it almost always comes back to bite you in your rear end.
mrlifeadvise is a company that specilizes in supporting smaller and medium sized company owners and CEOs who need busines advise from a company with a track record dating back over 60 years.
And mrlifeadvise has created over 10000+ lasting jobs during that time frame.
Welcome to join mrlifeadvise.
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About This Site
mrlifeadvise is a business consulting company specializing in smaller and medium sized companies.
We have 60+ years of experience from building companies, and we have created over 10000+ lasting jobs during that time frame.
We will help your business with good advise, regardless of what business branch you belong to and regardless of what part of the world you are active in.
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