Issue# 2688
- WEALTHY: Is it time to buy a home? (Christian Hill)
- HEALTHY: Diabetes isn’t the only side effect of sugar abuse (James B. LaValle)
- WISE: Michael Masterson on under-pricing the competition
ALSO IN THIS ISSUE:
- Is this moneymaking strategy cutthroat or smart? (Paul Lawrence)
- Why good writing does not need an opening act (Suzanne Richardson)
- It’s Fun to Know… about the health hazards of tight jeans
- Add “puerile” to your vocabulary
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Has the Housing Market Hit Bottom?
Many people are trying to call this the bottom of the housing market. While the loudest voices may be those with self-serving interests (namely, realtor groups), there is some real optimism creeping in.
The most recent Housing Opportunity Index – released by the National Association of Homebuilders and Wells Fargo Bank – shows that almost 73 percent of homes sold in the first quarter of this year were “affordable.” In order to qualify as “affordable,” the total costs of a home (mortgage, taxes, etc.) must not exceed 28 percent of the median family income (currently $64,000).
A few factors contributed to this jump in affordability, and it is a bit of a good news/bad news situation.
Plummeting home prices are a major factor in affordability. Unfortunately, the recent drop in prices is primarily due to foreclosures, which means that someone had to lose their home for it to become affordable for someone else. And until foreclosures slow down, prices won’t stabilize.
Another factor is record low interest rates, which hovered near 5 percent for a 30-year fixed loan at the end of the first quarter. This is good for individuals who qualify for those loans, but many who need a lower rate to be able to stay in their homes don’t qualify.
I think the housing market will find its true bottom by the end of the year, when the Obama administration does something to tackle the last roadblock: the vast number of homeowners who are currently underwater.
While there are still obstacles in the housing market, it seems like now is a great time to buy. Sure, prices may come down a little more, but the drastic drops appear to be behind us (and trying to time any market perfectly never works). If you find a home you like, at a price you like, don’t second-guess yourself. Interest rates won’t stay this low forever, and neither will prices.
And if you are looking for the country’s most affordable large city, check out Indianapolis. It has topped the list for the last 15 quarters.
[Ed. Note: Detroit native Christian Hill is an active follower of the real estate markets, the auto industry, and practically every other investment vehicle under the sun. You can catch his insightful commentary and advice for free in Investor's Daily Edge. Click here to find out more.]
“However valuable your product is… however clever your marketing… nothing will grow your customer base faster than under-pricing the competition.”
- Michael Masterson
A Tried-and-True Recession-Busting Strategy for Winning Customers
No matter what kind of business you run, I have a secret that can help you make money even while the recession has your clients’ wallets shut tight.
To tell you the truth, this secret is a good way to make money any time.
Andrew Carnegie, Marshall Field, Sam Walton, and Henry Ford are among the mega-wealthy who put this strategy to work.
As Michael Masterson has pointed out, it is “behind many – if not most – of America’s greatest fortunes.” In fact, says Michael, “It may be the most important secret a businessman can know, for it is the most powerful and most reliable way to make a small business grow.”
But many businessmen are afraid of this strategy… and many others simply overlook it.
I’m talking about undercutting the competition.
Andrew Carnegie was able to produce steel cheaply. Marshall Field cut the price of retail shopping. Sam Walton’s Wal-Mart started offering food, clothing, and other goods at rock-bottom prices. Henry Ford made automobiles that the average Joe could afford. All of these men went on to make massive fortunes.
Under-pricing your competition is an exceptionally effective way to rake in profits during lean times.
An interesting article in the Orlando Sentinel recently reported on a number of businesses that have been booming during the recession. Now when you think of “recession-proof” businesses, credit repair services and pawnshops are likely to come to mind. But the Sentinel mentioned several “atypical” businesses that are doing well, including a bank, a restaurant, and an advertising agency.
They are all very different kinds of businesses, but they have something in common: Their focus is on saving their customers money.
Even during a recession, there are some goods and services that people must buy. And if you can save your customers money while giving them what they need, you can make a bundle.
Here’s how to use this undercutting strategy for your business:
- Survey the competition and determine if you can offer the same value for less.
Many small businesses do not even consider charging less for their products and services, no matter what their competition is doing. They settle on a certain price, because they figure that is what it “should” be. And if the economy changes and times get tough, they don’t consider lowering their price, because that’s what they’ve always charged. (Mom-and-pop operations are often guilty of this.)
One of the first successful small businesses I began was a swimming pool maintenance company. When I surveyed what my competitors were charging and calculated my costs, I saw ample room for charging less. Back then, monthly pool service was going for around $45-$50. But I figured out that if I used part-time workers and kept my overhead very low I could charge only $35 and still make a decent profit. When I began promoting my service at that price, I immediately signed up quite a few customers.
I’ve used the same strategy to start other businesses. When, for example, I went into ballroom dance instruction, most studios were charging $60 per hour. But I realized that I didn’t need a studio of my own. By renting space by the hour and also giving private lessons in my clients’ homes, I could charge just $30 an hour. That made dance lessons very affordable for many people who really wanted them, but couldn’t (or didn’t want to) pay $60.
- Make sure your customers know that the quality will still be there.
Many small businesses have extra “fat” they can trim in order to cut their prices. But before you try to use this strategy to steal market share from your competitors, you have to make sure you can deliver the same quality for the lower price.
The first thing people will worry about when they see your bargain price is that they’ll be getting less in terms of quality and/or service. And if you can’t deliver, your customers will quickly leave you. One way to reassure them is to itemize everything they’ll be getting for the price so they can compare it to what your competitors are offering. (That’s what I did with the swimming pool business.) You should also offer a money-back guarantee. That is a good way to make your customers feel confident that you will offer high-quality products and services.
Undercutting your competitor’s prices is an admittedly aggressive strategy. But the business world is a harsh one… especially in this economy. If you want to prosper, you’ve got to be “Street Smart.”
[Ed. Note: Paul Lawrence is a successful entrepreneur who's started over a dozen profitable small businesses. For more information on Paul's "Street Smart" business program, click right here.
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Instant Writing Fix: Get Rid of the Warm Up
You can almost always make your writing instantly stronger by chopping out the first paragraph or so. Andrew Gordon reminded me of this powerful and simple editing step when he reviewed an ETR article I’d written.
Take a look at the beginning of the original article:
How to Defeat a Sneaky Enemy of Good Writing
Strong writing can instruct, persuade, and inspire. Weak writing bores your reader into falling asleep or – worse – looking elsewhere. So you want to make your writing as powerful as possible.
One of the biggest enemies to fine writing? The verb “to be.” In all its tenses, this verb can leach the impact out of almost any sentence. It sometimes seems impossible to avoid, but you need to seek it out and destroy it with a vengeance.
Andrew said, “Drop the first paragraph. It’s strictly a warm-up act.”
The revised article gets to the point much more quickly:
How to Defeat a Sneaky Enemy of Good Writing
One of the biggest enemies to fine writing? The verb “to be.” In all its tenses, this verb can leach the impact out of almost any sentence. It sometimes seems impossible to avoid, but you need to seek it out and destroy it with a vengeance.
There’s nothing wrong with easing into your subject when you sit down to write an article, report, or business memo. In fact, I highly recommend doing the warm-up… in your first drafts. It can help you get started – which is often the hardest part of writing. Plus, it can build momentum so that, once you reach the “main act,” you are in top writing form.
But listen up: The warm-up is solely for you. Your readers shouldn’t see it.
As novelist Robert Heinlein said, “The most important lesson in the writing trade is that any manuscript is improved if you cut away the fat.”
Cut the warm-up. Begin with the meat. Your readers will thank you for it.
Eating Too Many Sweets Raises Breast Cancer Risk
Could preventing breast cancer be as simple as cutting out carbs and sweets? Yes. That really is one way to decrease your risk of acquiring this vicious disease.
As you know from reading ETR, eating carbohydrates and simple sugars causes a spike in blood sugar. The constant elevation of blood sugar can, and often does, end in insulin resistance. And when that happens, your body loses the ability to utilize the calories from the carbohydrates you eat.
It’s a cumulative effect: You eat carbs, your insulin levels rise but become less efficient at getting glucose into your cells to be used for fuel, and your body begins to store excess fat. This combination of elevated blood sugar, insulin, and increased fat tissue causes inflammation, which goes on to damage tissues in your body (e.g., the inside of your arteries). It is also connected to the production of a substance called insulin-like growth factor (IGF).
You probably know that insulin resistance leads to diabetes, heart disease, and strokes. But you may not realize how strongly insulin resistance and diabetes are linked to cancer.
A 2005 Italian study on the subject, published in the British Medical Journal, somehow escaped making headlines. The study looked at roughly 5,000 women. After adjusting for their health history and lifestyle factors and comparing those with and without diagnosed breast cancer, the researchers found that the women who consumed the most high-carb/high-sugar foods (like biscuits, pastries, and ice cream, as well as chocolate and simple sugars, including honey, jams, and jellies) had a significantly increased risk for breast cancer.
The researchers attributed their elevated risk to IGF. However, other studies – including one just published in the Journal of the National Cancer Institute – are suggesting that insulin itself may be a bigger culprit.
So the message is pretty clear: Eating too many sweets and having elevated insulin levels raises the risk for breast cancer. Will you listen?
At LaValle Medical Institute, we educate our patients on the dangers of eating too many high-carb foods and sugars. We encourage them to focus, instead, on eating a high-fiber diet rich in non-starchy vegetables, organic animal proteins, fish, beans, nuts/seeds, and other healthy fats. Keep sugars under tight control, and gauge your intake of healthier carbs (like brown rice and fruit) by your blood sugar and insulin levels and your weight.
[Ed. Note: It truly is possible to improve your health just by making wise choices when it comes to diet and lifestyle. James B. LaValle, RPh, ND, CCN - founder of the LaValle Metabolic Institute and a nationally recognized expert on natural therapies - can give you easy-to-understand directions for living the healthy life you've always wanted. Learn more here.
For expert advice on staying lean, fit, and healthy, sign up for ETR's free natural health newsletter.]
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It’s Fun to Know: The Health Hazards of Tight Jeans
“Skinny jeans” may be in these days, but watch out ladies. Wearing them can cause temporary nerve damage. Doctors are seeing more and more young women who are complaining of a numb, tingling, or burning sensation in their thighs – a.k.a. meralgia paresthetica.
The condition is caused by intense pressure on the femoral cutaneous nerve, and, until recently, has been a problem mainly for obese, pregnant women and workers who carry heavy equipment around their waist. Now that it’s affecting young women, physicians have placed the blame squarely on their tight jeans.
But fear not, fashionistas – “tingling thigh syndrome” is only temporary. Switch to a baggier pair of pants and you’ll be back to normal in no time… even if it’s not the look you’re going for.
(Source: NBC)
Word to the Wise: Puerile
“Puerile” (PYOO-ur-ul) – from the Latin for “boy” – means childishly foolish; immature or trivial.
Example (as used by David Brooks in a New York Times review of The American Future: A History by Simon Schama): “Schama’s book is called ‘The American Future: A History’ (which is a puerile paradox before you even open the cover), and it has nothing whatsoever to do with the American future.”
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I’d rather have a direct letter to you than to have open comments.
However, I am glad you have a comment space.
I seem to have a Denial response to what I eat that is considered unhealthy. However, one book by an MD on Fasting for Spiritual reasons, with weight loss as a side effect stated unhealthy food simply: no sugar, no white flour, no white rice. I have never exercised in itself, but have been active. I have now discontinued Prempro,which has several good effects, with which I was satisfied, but decided the contraindications were overpowering. Now I don’t work and have less activity, eat as I always have, or less. (I buy nuts or candy about once a week) But I really like sugar – in tea, in bread, etc. Consider that white flour was our grandparents answer to baking. Most of us prefer the taste of white rice, over brown rice. One of the reasons I don’t obey omitting sugar is because of addiction, another reason is that my brother who acquired renal cell cancer was not told to change his diet!!! He was on an experimental adult stem cell program, in which rejection of the helpful cells seemed to occur. Although, he had regular physicals for his job, he was in third stage when his kidney was removed.
I find it difficult to remove sugar products!! I have gained weight, especially in shape. My husband doesn’t eat sweets. (He drinks beer, so has the beer belly, but does a lot of outside work so is other wise doing well). Due to BP and Cholesterol, we have omitted most cheese, and most everything else. When I was young, I didn’t even like most junk food, except desserts. I don’t drink sodas or alcohol. I drink spring water. I had a good cookbook that had 4 days of definite menues and recipes to eat 4 times a day/400 calories and specific foods 4 hours apart. It did satisfy the hunger! It cost a lot. The items are not always in the store that I can go to. And then they just gave recipes, not daily menues because they said that is what people wanted. Not me. Plus, my husband makes disparraging remarks about eating small amts but 4 times a day. Two of the later recipes were awful, so I stopped. I don’t drink caffeine except currently in tea, in which I put sugar. If no sugar, no tea. If no regular icecream, no ice cream at all. We don’t smoke. I just can’t see how to stop sugar. It takes at least a week to get over it all. Six weeks to get the spot in the brain to stop wanting it. It always seems that just a little bit shouldn’t cause a problem. But just like every other unhealthful activity, that is not so.