Over the last three decades, the world has evolved at an unprecedented pace.
In a non-distant past, it was feasible for a hard working middle class individual to achieve his dreams and aspire to lead a better life. This no longer possible as it was before.
Government shortsightedness, legislations, rules and regulations helped greedy individuals, corporations and associations succeed at the expense of the middle class.
Small investors aiming to make a living out of their investment were bound to lose their capital in the attempt to build a small business. Below are some examples on the options available to a family with a couple hundred thousand dollars to invest?
At current interest rates, the yearly bank deposit returns on this amount would barely compensate for the inflation rate!
Real Estate investment
Such a small investment is insufficient for a substantial acquisition that will generate a revenue allowing for a family to make a living!
Open a restaurant
Opening a new restaurant or buying an existing one will not permit a family to survive off of it in the actual market. Government regulations, taxes, advertisements, rental and services costs, competition make it tough to leave enough profits to make a living.
A restaurant franchise makes the franchisee feel like he is paying to get employed if not enslaved by the franchisor. The family is literally left with a fraction of the benefits and can hardly make a decent living in spite of the hard work!
Open a retail store
This is becoming the fastest way to lose your money. Competition is insurmountable and is dominated by two kinds of corporations:
• The multinational retailing corporations
1. Their rental costs are fraction of what a small retailers would pay.
2. Their buying power allows them way bigger discounts.
3. Their overheads are huge but their percentage ratio is lower.
4. They are less likely to be harassed by government agencies.
• The behemoth internet outlets
1. Could be located anywhere in the world.
2. Do not pay prime locations rents.
3. Do not have to pay municipal taxes and may be spared other taxes.
4. Do not need to hire well dressed sales personnel.
Adventuring in a Manufacturing workshop
“Free Trade agreement’’ fails to provide hope for such businesses; Items manufactured abroad by cheap labor, flood markets and leave no survival room for artisans. “Globalization’’ as called by politicians, has proved to be nothing more than an empty shell.
Invest in the stock market
The last resort for investors. Large corporations through brokers tell people: invest with us, sit back and watch us do the work for you. The big dilemma however is that no expert can really predict the path of an investment growth. But all are good to explain the reasons behind the fall of a stock only after it happens.
We have witnessed crashes in the stock markets over the last couple of decades. These crashes led to the melting of the savings of tens of millions of people who took decades to accumulate! It is said in chemistry “Nothing is lost, nothing is created…” It remains that we have to wonder who benefits from these losses at the end.
We are living in a worldwide Casino! The middle class is being wiped away by entities greed whose rapacity is limitless.
Urgent alterations in legislations are needed to reverse this cycle and protect small to mid size enterprises. Otherwise, we will end up living in a society that looks like an ocean contains big sharks and tiny fishes with no place for other middle size species!