Misery Index Hits All Time High of 33.5%

The Official Geezer Guide - Your guide to supplementing your retirement income, saving money and protecting and growing your investments.

Volume 3, Issue 1, July 2011

This month's articles:

Off the Cuff

1. Misery Index Hits All Time High of 33.5%
2. iPhone & IPad Apps for Seniors
3. Seniors Who Make Money Building Websites for Local Businesses – No Technical Skills Needed
4. Seniors: Make Money on Amazon Without Shipping Products

Off the Cuff

This weekend we will celebrate Independence Day. It was just 235 years ago when the Declaration of Independence was issued –that sounds like a long time, but it is just a blip in the history of the world. If you would really like to understand just how important that document was to the history of the world, read my favorite history book of all time - The Five Thousand Year Leap: 30 Year Anniversary Edition. If you love our country you will love this book. Over the years I think I have given over a dozen copies of this book to friends and family.

Whether you get the book or not, please accept my best wishes for a happy and safe holiday season and I hope you have the opportunity to share that time with good friends and family.

We haven’t been publishing for a while but I am going to try to get back to publishing regularly. The business climate has been so tough that we have had to concentrate on our main business and I have been supplementing that income by buying and selling gold –something I wrote about in the last newsletter. It has been so successful, I recently wrote a book about it. See the first article below.

Yardsales is a neat service that allows you to find yard sales and garage sales in your area. You type in your zip code and set a mileage limit and it comes back with a list of yard sales in your area. This allows you to plan you weekend sale shopping better. For professional sellers they have a paid service, but my readers can get a 20% discount if they use this link.

I get a lot of requests from folks who want to learn how to find and sell Public Domain products –books, films, photos and art that are no longer copyrighted. You pay nothing, package them up and sell them. There is a really smart young fellow named Steve Poke who offers a free eBook called Public Domain Profits Guide. The book really is free and you can learn a lot from it. Yes, Steve wants to sell you something, which is why he is giving away the free book, but I have seen his program. Its really good and really worth the money –and comes with a money-back guarantee if you are not happy.

Since eBay has been so slow, we have been concentrating more and more on Amazon and recently I made the decision to join Amazon’s FBA program. FBA stands for Fulfillment By Amazon. This is a program where you send your merchandise to Amazon and they store it in their warehouse. When something sells, Amazon collects the money and ships the products for you. Since moving to FBA our Amazon sales have exploded and now exceed our eBay sales. The profits are slightly less than what we make on eBay, but we make up for it in much higher volume. See our last article below for more information.

Lets get started with this month's articles:

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1. Misery Index Hits All Time High of 33.5%

I don’t want to depress you, but there is something coming that seniors really need to prepare themselves for. This economy is far worse than the government is telling us.

Official unemployment is now at 9.1%, but “real” unemployment is actually much higher. Inflation is also higher than the government reports. This is because the government games the system so they can look good. (I am not taking political sides, because both parties have done this for over 20 years).

Unemployment figures do not count people who have used up their unemployment benefits and/or given up looking for work. They also do not count people who have taken part time or low paid jobs because they can’t find work. (Think software engineer driving a cab, or an oil-drilling technician working at Burger King).

And, the official inflation number does not count food and energy prices, which have all been rising. The government made these changes several years ago, but one outfit called Shadow Stats still reports the real numbers. These aren’t made up numbers; Shadow Stats simply calculates and reports the official government numbers the way they used to do it before 1990.

If you go to Shadow Stats today you will see that the real unemployment number is over 20% when you calculate it the way the Bureau of Labor Statistics did before 1994. And if you look at inflation, you will see that calculating inflation the way the government did before 1990 is now over 11%.

Most of you may be too young to remember the Misery Index that was started back in the late 1970s. You get the Misery Index by adding inflation + unemployment. If you use the official government numbers you get:

9.1% unemployment + 3.6% consumer price index = 12.7% misery index

But if you use the “real” inflation and unemployment numbers you get:

22.3% unemployment + 11.2% consumer price index = 33.5% misery index

That far exceeds the record of 22% going all the way back to June 1980.

As I said at the beginning: I am not trying to depress you –but it’s important to know the truth and be prepared for it. The good news is that even with 22.3% unemployment that means that 77.7% of the people are still working. We are a big country and 77% of our population is a lot of people. So although business is slow; there is still business being done. So what to do?

• Inflation is not just coming –its here. If you have the spare cash then put it into goods that you know you will buy and consume and that you can safely store. Last week a local Fred Meyer had light bulbs on sale. We went in and purchased over 100 different bulbs in the sizes and wattages we use and put them in our storage locker. After January 1^st it will be illegal to purchase (but not use) incandescent light bulbs. So we are doing two things. Making sure we have a supply of bulbs and, as the price of bulbs will be out of sight, as we get closer to the end of the year, we are locking in a low-cost supply.
  
  Coffee and sugar are another item that is going up fast and they are both easy to store for long periods.
  
  And we could see $4.50 gas during this summer driving season. Here is an article about that from the USAA Energy Analyst. Scary stuff.
  

• Think about moving your money into stable foreign currencies such as Canada, Australia or Singapore. One way to do this is purchase short-term bond funds from these countries. There are several ETFs and Mutual Funds that allow you to do this. Gold and silver are also good investments in times of rising inflation. Both of them are undergoing a small seasonal correction, which is creating buying opportunities.
  
  

• Be very careful with your investments. Do not invest in any long-term bonds –including government bonds. As inflation gets worse, the Fed will be forced to raise interest rates and this will drive down the value of bonds.
  
  Keep your powder dry by investing in short term treasury bills. They don’t pay much interest, but once the Fed drives interest rates up, you will have an opportunity to lock in some really high interest rates in long-term bonds. When this happened back in the early years of the Ragan administration, I was able to buy 30-year government bonds yielding 11% and held them for years.
  
  

• Look for ways to supplement your income. There has never been a better time to start a small home-based business.

Here is an idea that anyone can do. I make extra income buying and selling scrap gold. Its very low risk, easy and its fun (you meet a lot of people). This is a great business for seniors as there is no heavy lifting involved (You buy gold in grams and ounces –not pounds).

You can even throw gold parties, where people come with their scrap gold and leave with money. Last month I made over $1300 with only 4 hours work. Here is a link to read about Making Money Buying Gold and Silver. If this doesn’t interest you take a look at article #3 below for another idea on ways to supplement your income.

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2. iPhone & IPad Apps for Seniors

There are dozens of apps for iPads, iPhone, IPod Touch and a lot of these will even work with Android phones. I have tried to list apps that seniors might find valuable.

My Medical. Keep track of all of your personal medical information in one convenient place. My Medical provides a thorough, organized database that is yours to control and change. With a clean and easy-to-use interface, My Medical can store an entire medical history for as many people as you wish:

ABC. The stunning quality of iPad videos is showcased by this app, which lets viewers watch recent ABC shows at no charge. The iPad speaker produces decent sound. Connect earphones for excellent audio quality.

FoxNews. This is a really neat new and free app that allows you to customize the news stories you want to follow. You can receive news alerts, read headline news stories, stream live video, listen to Fox News Radio, browse through Fox News photo galleries and slideshows, and watch the latest video clips on demand -- all for free.

PowerOne Financial Calculator. Includes 60 financial, real estate, investment, and conversion calculators.  With this app, you can calculate price comparisons and tips, investment values, loan qualifications, cap rates, and much more.

EZTip Calculator and TipAgent. These apps help you calculate a complicated dinner bill through features that can split the bill and/or tip.

Netflix. Most people use Netflix to order movies and other videos on DVD. This iPad app makes it easy to get many movies and TV shows streamed directly to the iPad for immediate viewing. Although the app itself is free, you need a paid Netflix account to download videos.

Medical Encyclopedia: This app contains 50,000 pages of information that has been reviewed by medical professionals and that is updated regularly. Now you can understand what your doctors are saying about you.

NPR. Get free access to NPR programming, including radio broadcasts and text versions of NPR stories.

Bread and Milk. Simple grocery list app that calculates the estimated cost of your shopping cart.  You can also add menus and diet lists to the app, and e-mail your grocery list to friends and/or family.

Let’s Do This. Simple to-do list app with an attractive interface.  Keep on top of your pick ups, drop offs, birthdays, appointments, and anything else you need to finish by the end of the day, week, or month.

KAYAK. Planning a vacation, visit, or business trip?  Use this app to search the best deals for flights and hotels. I have found it to be much better than Travelocity or Expedia.

iBooks. This is Apple's E-book app. Look for free books to download from Apple's iTunes store. Use the iBooks controls to change type size and lighting and see if online reading is for you. Apple does not have as broad of an E-book selection as Amazon, but you can download a free Kindle reader app that connects to Amazon and lets you read Kindle purchases.

Google Earth. Being able to see just about every location in the world is awesome. With the GPS capabilities of the iPad, you can always know where you are and how to get where you want to go. Use this app in conjunction with the Maps feature that is already loaded on the iPad.

Zinio. This app provides free access to the current feature stories in a number of magazines. These periodicals are leading the way with visually lush and typographically crisp iPad editions. Of course, the magazines are hoping you will purchase paid online subscriptions after seeing their free selections.

The Weather Channel. Find weather conditions and forecasts in any ZIP code, including maps, radar sweeps, and weather videos. WeatherBug is another recommended free weather app.

Virtuoso. This app is just a simple introduction to the amazing world of music accessible via the iPad. Use the Virtuoso keyboard to play the piano by yourself or set up this app to let you play a duet with the person sitting across from you.

Epicurious. Find recipes plus their ingredients. Build a shopping list. Search for foods you like and see them used in recipes. Develop a list of favorites. If you're a foodie, Epicurious will whet your appetite for the growing volume of iPad food and nutrition apps.

Pandora. More music, via Internet radio. Use Pandora to find the music you like from the countless radio broadcasts that are now available online.

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3. Seniors Who Make Money Building Websites for Local Businesses – No Technical Skills Needed

You are probably thinking: “Is Skip Crazy? How can an old geezer like me build a website?” That would have been true several years ago, but today if you have just basic computer skills –you can point, click and type and write in a reasonably grammatically correct way, then you can build a basic website in less than one hour (although I find it takes about 3 hours to build a really professional-looking website).

Today there are dozens of companies that sell systems and software that allow you to design a full ecommerce-enabled website, complete with shopping cart that you can build for local businesses such as hairdressers, restaurants, gift shops, etc. You probably think that by now everyone has a website. Well I live in a small town of 12,000 people and there are about 75 different businesses in our little town. I checked and as near as I could determine, only 20% of them have a website and half of those are not very good.

I have known about this business for a few years. My friend, Jim Cockrum, started a membership site called Offline Biz that I wrote about in my newsletter a couple of years ago. Jim now has close to 9000 members who are learning how to use the Internet to offer services to local businesses –and his members are cleaning up. I was corresponding with one of my readers this week, who joined Jim’s program and learned how to set up websites and Facebook business pages for small businesses.

She gets $500 - $700 for a website which takes her about 2 to 3 hours to set up, and $300 for a Facebook page ($400 if they want a shopping cart) which takes even less time. Then she charges her customers $50 month for hosting (her cost $7 month) and simple maintenance –about 1 hour a month per site.

She is located in a medium-sized town of 50,000 in Iowa (that is all she will allow me to tell you) and has now built over 40 websites and maintains 22 Facebook pages. That is over $30,000 in income working less than 20 hours a week, and she has done all that in just 4 months. She plans to hire a helper and double her business between now and the end of the year. She has also built several websites and blogs for herself and uses them to make money with affiliate marketing from Google AdSense, Amazon and Wal-Mart. She didn’t tell me how much that income was but said it covered her mortgage. Oh – did I tell you? She is 68 years old and only learned how to use a computer four years ago when she took a class at her local senior center.

When she joined Jim’s Offline Biz program, she followed his steps to hire technicians in the Philippines who did the website design for her. They would charge between $100-$200 for a website she sold for $500. Then one day she saw an article in my Online Sellers News about a company called XsitePro. XsitePro is software that you download to your computer that lets you create fully custom websites from scratch – With no technical skills or programming knowledge. If you can point, click and type – you can create a simple website in less than one hour. If you want a full ecommerce website with all the bells and whistles it takes her about 3 to 4 hours.

XsitePro uses pre-designed templates. You just name the pages, upload any photos or logos (these are provided by your customers), type in the text (this can often also be provided by your customers), if they want to sell products, then you set up a store and upload the products and bang – you are done! No codes, No HTML, No programming, and once you buy the software (which comes with great training and support by the way) it takes about ten minutes to download it onto your computer. Then it’s as simple as opening a Microsoft Word document to get started.

Ok – the downside: XsitePro is at first glance expensive –it sells for $197 (Look for special promotions from time to time). But, once you buy XsitePro you can build an unlimited number of websites. Other programs on the market only cost $20 to $50 to build a website, but you have to pay that every time you do it. With XsitePro, once you build your first website and sell it, you have recovered your entire cost and some profit so you are well ahead of the game.

XsitePro is also perfect if you want to build small fast websites for affiliate marketing. I can build a simple website and have it live on the web in less than one-hour. Build a few of these and you can easily make over $1000 a month passive income from affiliate marketing.

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4. Seniors: Make Money on Amazon Without Shipping Products

A lot of seniors supplement their income by selling on eBay and over the last few years many have moved to Amazon. These are both great ways to make extra money, but one of the hassles is packing and shipping products. This is why so many people are interested in drop shipping. However, reliable drop shippers who sell at prices you can make money with are very hard to find. Now there is another way.

A couple of years ago, Amazon started a program called FBA – Fulfillment By Amazon. This is a program where Amazon becomes your dropshipper. You purchase products in bulk, create a unique label that identifies you as the owner of the product and ship your products to Amazon. When Amazon receives your products, they put them in a warehouse space with your name and seller information on it. Now you list the products on Amazon. When they sell, Amazon collects the money and ships the product to the customer for you. The program has been so successful that eBay is now looking into a similar service.

My wife and I have been selling on Amazon for the past four years, but we just started using FBA about 6 months ago. In that time, my sales on Amazon have gone up 400% and we now sell more on Amazon than we do on eBay. And, there is one additional benefit. I send all my products to Amazon, no matter where I am selling them. When I sell something on eBay or my website, I simply log on to Amazon and tell Amazon to ship the product to my eBay or website customer for me.

This sure beats spending our afternoons wrapping and shipping products that sold during the day and dragging them down to UPS or the Post Office.

I wanted to share my knowledge and experience with my readers, so I got together with Jim Cockrum, Chris Green and Suzanne Wells and we created The Proven Amazon Course. This is an online course that comes with support and will teach you how the three of us are all making money on Amazon. And its not just books; you can sell any product. I am currently selling solar lights, books, gourmet foods and a line of ceramic knives. Here is the link to my Amazon store if you would like to see what I am selling:

http://www.amazon.com/shops/summerdale_house.

One of the things we teach you is how to get and use a scanner to find products to sell on Amazon. You can use scanners to find books at garage sales and thrift shops. Just run the scanner over the book bar codes and it will tell you how much the book is selling for on Amazon. You can also use it in stores to scan other products. One of the training videos is a video by Chris Green where he shows how you can go into a Wal-Mart and find products on the clearance tables that allow you to make hundreds of dollars a week with his simple arbitrage technique.

Well that’s it for this month. As I said above I hope to get back on a regular schedule soon.

Skip McGrath
Head Geezer
Official Geezer Guides, Inc.

P.S. If you missed the last issue, check out our newsletter archives.

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