We as in US citizens. George Soros has done a great job of living within his means and obviously so have you, but WE as in at least 43% of Americans haven't. Also, YOU (i.e. WE) keep electing these freaks in Congress and in the White House. Why do we have a 10 trillion dollar debt? Why do we think we can keep borrowing year after year?
"I am not we" was just my playful way of saying: overgeneralizing gets this article nowhere.
The idea that 57% of us should (or even CAN) bail out the rest of "us" is distasteful, not to mention unfair. Those of you that buy things you can't afford should lose the things. You aren't entitled to a house, you BUY it. You aren't entitled to a wage, you EARN it.
However, I completely agree with you about the deficit, "we" can't keep it up. I am personally exercising my abilities through votes/calls/etc.
Do you guys realize that you are both falling into the same fallacious talk as as the author of the blog post. "Bailing out the rest of us" whether you are for it or against it is such a naive statement. You guys are both overlooking not only the highly complicated ways in which this entire situation is affecting all of us... how the bank failures can and is directly leading to layoffs of people that have never in their lives overextended themselves financially, but also the fact that there is absolutely no straightforward path to bailing out anybody in this situation. Even if someone wanted to, nobody could bail out "the rest of us" so your bickering is moot. The only thing we can do is watch as this tidal wave washes over us all and play it safe until it passes. None of us are out of reach of this event.
I was only referring to the practice by banks of freezing credit lines for small companies. This WILL create a snowball effect forcing companies to close their doors. We have to figure out a way to inject confidence in the credit system...
In all fairness, they should have seen this coming and they should have had more cash on hand. Many businesses anticipated the downturn and started building cash reserves a year or two ago.
> In all fairness, they should have seen this coming and they should have had more cash on hand.
That may be true for existing business but that is a pretty harsh sentiment to apply to a business just starting out. It's pretty hard to save when you are just starting to grow revenues or when you are even earlier in your business cycle.
Of course it is easy to build cash reserves if you are an established company, but an early stage services company would be hard pressed to work without short term credit.
A world without short term credit looks a lot like the third world. I prefer living here (at least I used to).
The main problem we had was lack of capital to fund our expansion. We were in a catch-22 at the time. Our investors didn't want to give us additional capital until we had leased the 'hard-to-get' spaces within popular telco-hotels around the country. The landlords didn't want to lease us space until we had the money to build out the spaces (typically $10MM per location). By July 2001 we had more than $1,000,000 in monthly lease payments for spaces we didn't have the funds to complete. It was a nightmare. Once we filed Chapter 11 we were able to immediately reject the leases that we had not built out. By cutting heads from around 60 to 16 I think and keeping only our profitable or breakeven facilities we were cashflow neutral almost immediately. It took a couple of months and we became profitable. Of course, it was easy without the leases.
At the end of the day, if I knew that I would ONLY have $20MM to build my business I could have done a great job. The problem was that I thought I was going to have $120MM to build it - I built an infrastructure to support a $100MM business, not a $20MM. Does this make sense?
You have to give Tim credit, he came up with an excellent controversy. Of course, you all must realize that Tim doesn't follow his own advice. He admits that it took a lot more than 4 hours a week to write the book. He spends more than 40 hours a week promoting the book (even now). Get it? He doesn't believe his own thesis. Sure, it is possible, but for how many people? for how long? Not very many and not very long.
Ferriss never claimed to be writing his book for money. The book is his hobby: he enjoys writing books. He enjoys promoting his book. That's one reason why he's so good at it!
I do agree, though, that the book's advice is not for everyone.
