Based on my assessment of the near and long term – a flat or contracting economy – the potential for income growth is much greater if you own your own business. In a flat or contracting economy, those who have money to spend will seek the highest quality their dollar will buy. Those who provide the highest quality will be in highest demand. Owning your own business maximizes control over quality.

Jacq@SingleMomRichMom’s idea of going into a consulting-friendly business falls right in line with this idea.

If your business is set up in a well structured limited liability corporation – an LLC – you can be virtually judgment proof. Lawsuit-happy plaintiffs drop lawsuits against well-structured LLCs once they learn how they will be impacted if a judgment is awarded.

LLCs can withhold payment on judgments. While payment is withheld, judgments must be booked by the plaintiff as an uncollected accounts receivable, and taxes must be paid on them. This means getting a judgment creates a tax liability and ends up costing the plaintiff money.

Yeah, definitely interesting. Though to be fair, it creates the danger of relying too much on your own earning prospects to grow your assets. Sure, it feels safer to invest in your own business, but sinking more into a primary income stream seems like it would just make you vulnerable to unexpected disasters in your business. A Lehman Bros’ bankruptcy can sink the stock market but a lawsuit from an angry patient, if you’re a dentist, can sink your income stream just as well.

Regardless of what one thinks of Nassim Taleb he always has a some interesting thoughts.

http://www.businessweek.com/investor/content/jul2010/pi2010078_530571.htm

I found his advice to stay out of equities and invest in your own business interesting. Tying this in with your more recent post on the “new normal”, would be an interesting next step.

I’m working on an e-book that addresses a money woe that a lot of people are having at the moment.

It’s time to get creative and innovative and, most of all, active.

I went over the numbers over and over and over again, Pop. You are right in what you are saying. Once you leave a high-paying job, you usually cannot go back to it. So it’s a big step. My wife and I talked it over for years and examined every possible scenario and did lots of number exercises.

The fear comes from not knowing. You overcome the fear by digging in and developing a realistic confidence. That said, there are no guarantees. You can study this stuff in great depth and still get killed by surprises. I have had some nasty surprises. So even my case (where there was a lot of prep work done) shows this to be so.

My biggest fear is that I will reach the end of my days without having seriously tried to accomplish the things I had wanted to accomplish. So I have a counter-fear to balance out the money fear. There’s a Battle of the Great Fears going on in my mind at all times! I’m joking a bit but I really do think fear can be a motivator as well as something that holds you back from taking action. I try to use fear as a motivator.

Rob

A significant factor is how likely you are to replace your current earning if you need to find a new job.

I think a lot of folks in unionized manufacturing jobs who stayed at the same employer for a couple decades are finding out about this about now. They’re simply not going to be able to find many jobs in the high-five figures or low-six figures that require the skill sets and education they have. Thanks for the comment.