FALK REPORT: Issue No.2 - 𝕸𝖆𝖗𝖙𝖎𝖓 𝕷𝖚𝖙𝖍𝖊𝖗, The Bolsheviks, and Social Media
This Report’s Agenda:
Solid Operations Win: Slow and Steady Wins the Race
The New Renaissance: Emotions from 1517 Europe
Economic Disaster Points and Their Winners + Losers
Modern Hunger Games: Less Cash, Less Socio-Political Stability
What? So what? Now what? Why does it all matter?
Today’s Opportunities: Be a Diamond in the Ruff
Man, this year has been one wild ride
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Man, this year has been one wild ride 〰️
FALK REPORT: ISSUE 2 | 6 DECEMBER 2022 | 8:30 PM EST
Keep your operations clean
Have clear goals, don’t commingle funds, and keep everything simple.
Disclaimer: This report is based on analysis and observation, but this is not personalized financial advice. There are a number of factors that go into building and optimizing the operational aspects of marketing your business, and for personalized advice you must book a strategy session with us.
In our last report, we discussed the importance of setting goals for your business… even if those goals are outrageous and far reaching.
If you don’t know what we’re referring to, check out Issue No.1 of the FALK Report, then come back here.
Before reading this report it’s important to re-frame your mind. Repeat, “I am successful. I contribute great things. I make the world a better place.” Yes, you do!
What you’re about to read will create clarity, easy moves, and security for you and your business. It offers you a framework to see what elements of the economy greatly impact your demand in the marketplace.
Remember: complex plans easily spoil. Clean operations are key to running a successful empire—so plan around operational clarity.
You don’t need to be the smartest genius in the room to run a profitable business. Be foolproof. Make your plans so easy to understand that the dumbest person in the room could follow them harmoniously. Let’s dive in…
Holy Roman Dumpire
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Holy Roman Dumpire 〰️
The Reformation is Upon Us Like It’s 1517…
We’re going through massive upheavals in who has a right to an opinion on published texts, how we communicate these new censored opinions, and how we act on them publicly.
We’re living through one of the biggest shifts in the way information spreads throughout the world.
Social media channels, chat channels (like telegram), independent blogs, email newsletters, e-books, and more, are shifting the dialogue from being monarchic to egalitarian.
Right now, in the health arena we see independent thinkers rising up like Martin Luther in 1517.
Only today, it’s not the Roman Catholic Church they’re going up against, it’s the government’s public health policies that restrict our basic freedoms and deny our human right to autonomy over our businesses and bodies.
You may want to avoid going to this topic, but we’re not here to talk about scientific fact or fiction. We’re here to discuss a cultural shift that is opening up the floodgates for new opportunities for people who want to preserve their economic independence (like you and me).
For those who have forgotten their history lessons, 𝕸𝖆𝖗𝖙𝖎𝖓 𝕷𝖚𝖙𝖍𝖊𝖗 believed that it was his right to form his own independent conclusions about popular texts (a.k.a. the Bible) and share those insights with the public without being silenced by the corrupt religious leaders. In the Holy Roman Empire, an independent thought from an average person shared out loud about religious origins and religious society was radical! Blasphemous!
Fast forward to today, and we’re sitting in the same scenario. Social media is the new printing press. The NIAID + CDC are the new Catholic Church, and independent medical researchers and peer-reviewed doctors like Dr. Robert Malone or Dr. Peter McCullough, amongst others, are the new Martin Luthers of our time. Welcome to the void.
A combative discourse that’s waking up the masses to say that they’ve lost trust society’s leaders.
This cascade creates a vacuum for information to be shared rapidly through the latest modes of digital transportation—and that’s where we are with your business and its recovery.
We’re in the void. So you can remain in the darkness or you can paddle forward and layer this with the economic hunger games we’re living through to map out your plan, lean into the possibilities, and jet out onto the other side of this black hole to bring on the new thought-leading Renaissance.
Crash + Burn Timeline
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Crash + Burn Timeline 〰️
Market crash
In a fast changing world that’s been propped up by economic stimulus, it’s hard to plan for the future. Many people are pretending, avoiding, and wishing rather than actually creating the reality they desire for their businesses.
This is for reference only, and is here to help you understand your own industry’s timeline so that you can plan effectively.
There have been SO many recessions and inflationary bubbles. Here’s a rundown of the recessions that have elements of what we are going through today.
No two industries are alike, and keep the Renaissance mindset shift and the hunger games at the top of your mind to help you remember how customers are feeling right now, and how you can help them feel better during their toughest days.
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Market crash and onset of The Great Depression (1929-1939)
Unmanageable inflation, food instability, and drop in standards of living
Global GDP was down 15%, making it 15x worse than the 2008 crisis
1929 Crash Winners:
Kennedy Style Stock Trading: pull investments prior to crash, then buy back the stocks at their lower post-crash.
Strategic Borrowers: Take out a loan, invest in necessary equipment upgrades to improve your business output and efficiency… and then when hyperinflation hits, pay back the loan in full
The business is making more money because you’re more efficient and you have better assets to offer with your services, so your income will likely increase (or the rate at which you generate income), and your debts will be easily paid and you’ll have more value for your money.
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Inflation triggered by oil embargo in 1973, and the population really felt this after a second oil embargo in late 70s
Women came into the workforce, more people were working than ever
Late 70s, inflation worsens as immediate demand for goods skyrockets (more psychological and less economically driven - people were trying to make the best purchasing decisions so that they spent less long term during a time of rampant inflation)
Lessons from 1970s Winners:
Cut unnecessary spending; if it’s not helping you be clearer and generate additional income, cut it off until you have a plan.
Modern Win: stop forgotten subscriptions, or random anxiety-driven purchases that support false needs (like a massive whiteboard that you will never touch and adds no benefit to you as a digitally driven person).
Purchase essentials in bulk to lower costs long-term
Connect with others to lower individual cost burden (ex. carpool)
Catchphrase: “Purchase what you need, but not for greed.”
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Late 70s inflation bled over into the early 80s
This led to the US savings and loans crisis
People who bought “rust-rot-depreciation” assets (non-income generating assets), or saved money in the bank lost out the most. These were the losers at the table.
In 2022, “the U.S. faces the highest inflation since 1981.”
Lessons from 1980s Winners:
Recognize that your cost burden has increased. Don’t put your head in the sand.
We’re spending more on essentials: food, gas, and electricity costs.
These are rising faster than the overall YOY rate of inflation, so the burn is real!
We’re spending less on non-essentials: travel, entertainment, clothing, home goods, and cars.
Cash in hand isn’t trash.
Yes, save some reserve cash… but don’t obsess over saving every dollar because inflation is wiping out the value of it, so you’re losing money and sinking your ship instead of sailing it.
Invest in your business, not in the digital banks + markets
Top quality workers who will help you grow your business in a meaningful way
Assets needed for work
Essential equipment upgrades
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There was economic stagnancy and periods of economic recession (1990, 1994, 1998)
Point of Differentiation: the emotional panic was not so intense, however a whole new world was rising (digital world! computers! internet!)
The way out of the liquidity crisis was to get involved in new ways of doing business. Create a new market place that no one has ever seen and you can create demand.
Or set your business up for cash-strapped customers. A great example is adding a repair shop to your store because customers might have to repair rather than upgrade if they’re strapped for cash. Customers don’t want the best investment, they want the lowest immediate cost.
Lessons from 1990s Winners:
New evolution offsets stagnation. In today’s world this would include:
Blockchain, web3 tech, and crypto-currency (practical use cases)
Rebuilding micro-economies in local areas to lessen the local supply chain’s dependence of essential goods and services on the global supply chain.
Creating more economic independence for a better way of life: starting a side hustle, diversifying your streams of income.
Remember: Your customers may be more strapped for cash than usual, so plan for spending waves.
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1980s inflation, 1990s liquidity crisis. and a lot of panic
Spending on essentials goes up, while spending on non-essentials plummets
Group morale goes down, depression and health issues set in
Even gym memberships plummeted 30% after the GFC, even the gym was considered a luxury during this time period
This layered with a 1929 crash is what we are ripe to experience in 2022-2023.
Lessons from 2008 Winners:
Pay down credit card debt fast, and stay far away from high interest purchases on non-essentials
Adjust your lifestyle to fit within your income
Start a side-hustle for extra cash
Help your friends and neighbors with big and small problems
Foreclosures offer opportunities to collect unclaimed tax revenue after the item’s sale
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2-months of economic shutdown created a short recession with a quick rebound.
2020 is not a comparison point for economic mapping… but it does play into the emotional state of the consumers within an economy.
2020’s disastrous energy was led with “15-days to flatten the curve,” and it feels like businesses are still bleeding out from that compliance over 913 days later.
The social impact of 2020’s lockdowns was detrimental:
suicide rates went up, alcohol and drug abuse has skyrocketed, antisocial tendencies are on the rise, aggression is rampant, and violence is now an everyday occurrence in previously safe areas within cities around the country.
People will go out less, spend less, and do less when the outside world is so volatile and they’ve been trained to stay inside for prolonged periods of time. The social damage is irreversible.
hungry, hangry, aggressive
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hungry, hangry, aggressive 〰️
𝖊𝖈𝖔𝖓𝖔𝖒𝖎𝖈 𝖍𝖚𝖓𝖌𝖊𝖗 𝖌𝖆𝖒𝖊𝖘
: Bolsheviks meet Marie Antoinette
The hunger-driven historical touchpoints that mirror today’s world of socio-economic upheaval.
Food is the great stabilizer.
Go back to ancient Rome and you will hear, “give them bread and circuses and they will never revolt.”
Socio-politically, the mess we are sitting in mirrors elements of both the Bolshevik Revolution and the French Revolution.
These turning points in failing monarchies along with the rise of civil rights movements were sparked by failing crops and widespread famine. Two things you hear a lot about today if you head to any investor news site.
So what does that tell you? The changing of the ‘ruling class’ is on its way, if not already in progress… Old ways are disappearing fast, and we can adapt to our new Bandwidth Era to innovate… or get trapped under the rubble left behind by the collapse of the industrial age we once knew.
Honestly, you could write a whole book on this topic. The point is, hunger sparks revolutions. Literal hunger.
What makes people hungry these days? For most people, it’s not about tending to crops or small scale farming, it’s about the strength of your buying power as a household. How much food can you afford to eat this week? And is that enough to eat comfortably for you and your holiday guests and fund your subscription to the mainstream media circus? Cough, Peacock App.
Pessimism is necessary to help avoid pitfalls and black holes—and now that we’ve laid the ground for where those pitfalls stand, let’s dive into how to improve your digital profits and build social currency to help bridge you onto sturdier ground.
emotional endurance
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emotional endurance 〰️
Pull it all together now.
The Joneses are unhappy, in debt, and struggling to keep it together emotionally. Don’t blend with the crowd.
What does this all mean for you?
Whoosh! This was a lot to take in, so let’s just recap everything that’s happening right now…
Emotional morale is down.
People have lost so much, and this is more of social issue because lockdowns had a detrimental impact on people: suicide rates went up, alcohol and drug abuse has skyrocketed, antisocial tendencies are on the rise, aggression is rampant, and violence is now an everyday occurrence in cities like NYC where it was more far and few between in otherwise normal, safe areas.
The velocity of money has plummeted from 10 to 1.3.
That is abysmal. People are not spending any money in a way that stimulates the local microcosm community. (how much people spend out of the dollar in their pocket and then the receiver goes and spends - people on average are not feeling generous)
Spending on essentials feels painful
This is due to price increases: energy and oil costs are rising, along with food and staple consumer goods—and this is rising faster than the overall rate of inflation, so it’s BURNING.
Non-essential spending is plummeting
The demand has dropped because their spending budget is going into essential goods.
Businesses who are ‘non-essential’ also have fewer people coming to them, unless it’s an offer they can’t refuse (this is the silver lining).
Regular workers no longer have job stability.
With mass layoffs and rampant inflation, regular people are shoved—especially if they are working on flat salaries and only have one stream of income to cover their expenses.
Not only do these people have less to spend, but any borrowed money (credit cards, loans, etc) is now more expensive to pay back. Holes are burning through their pockets even more than if they just had to deal with rising costs!
Businesses bought a lot of inventory.
People wanted items, they stocked them, and they expected the demand to continue… but now stores sitting on this inventory (and returned inventory) and they’ll have to liquidate it in the near future. They fronted the money for the goods, and now they feel like they’re at a loss because no one is picking up what they’re putting down.
Digital savers and investors have no real security or growth.
Savings accounts aren’t as safe as you might think… There’s no guarantee you can withdraw that money at the exact time you want to withdraw, and the interest rates on savings accounts are extremely low compared to the rate of inflation for consumer goods. If you’re saving for a rainy day, you might as well pull your funds from the bank because you’re losing when you look at the time-value of money. Put that money into a hard asset you have in a safe location you can access. If it’s not in your hands, it’s not yours.
Now, investors are also in a bind. The markets are impossible to time perfectly to short the markets, and the volatility means there’s a high chance you could lose your fortune if you have a bad investment strategy. Find ways to hedge your bets, and opt for safe assets. No one is safe in a crashing economy, not even the most savvy investor. Remember those bankers who jumped during the 1929 crash? They were pros. Stay calm, don’t bet the farm, and zoom out.
Lastly, there’s a savings and loan crisis potentially coming in strong. Where are you over leveraged? Address the problems now before it gets heavy.
Opportunity: Ready, Aim, Fire!
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Opportunity: Ready, Aim, Fire! 〰️
Be a winner…
1. Use the Velocity of Kindness when the Velocity of Money runs low.
While the velocity of money has dropped in real time, I’ve seen a huge uptick in people being very generous (both from wealthy backgrounds to everyday worker bees).
What are the responding to? A willingness to make today the best day ever, a smile, and genuine kindness.
Let’s look at some recent pop-up events we’ve done… Even with a simple free sample station, people have been SO generous—leaving a handful of cash on the free sample table, saying that the positivity, smiles, and kindness changed their day and they need “a lot more of that around here.”
This isn’t an isolated incident at one location. It’s been happening repeatedly since November 2022.
It’s revealing that many people are responding with more gusto to simple acts of kindness. We even could go so far as considering that they may desire to make their local community a happier place, to give back in small ways, and to connect with a human being who is not hiding behind a mask, desk, glowing screen, or hand sanitizer.
This is just one example of a micro-transaction that stems from kindness and offers connection that can generate bigger business for you long-term. It starts with a smile, and ends with a large contract. You never know where your next lead will come from!
2. Take the money you would have previously saved and strategically invest in your business.
Hire top-quality workers who will help you grow your business
Allow low-quality workers to find new opportunities working for a larger corporation that can take on the lack of output those low-quality workers provide (individuals who sit on personal social media feeds all day, don’t engage with customers/co-workers, and show up to collect a check and collect a check alone. These are takers of the world. You deserve a giver).
Assets needed for work output or skill development.
Essential equipment upgrades: this refers to anything that will improve the efficiency of your work (upgrading a slow laptop to a fast one).
3. Work with wolves who also make their own money
Consultants, lawyers, specialists. These people eat what they kill, and will be great to team up with to lift up your local community
In the past communities have come together to make their own form of currencies (barters, trades, etc). During the great depression, communities used wooden nickels rather than the real stuff because cash was hard to come by. The societies decided to honor the new form of currency and stability was able to rebuild from there because people contributed to society through work, and were able to meet their basic needs. Remember the revolutions spurred by hunger? That hunger could’ve been lessened if local communities worked together like this to mitigate economic desperation.
You need to know the terrain if you want to make the right moves to get to your destination. This report laid out the intricacies of that terrain and now it’s up to you to look at your big goals and your action plan and decide if it’s right for you knowing what you know now.
Remember: Adaptability is advantageous.
NEXT REPORT’S AGENDA
FALK REPORT: ISSUE NO.3 | 12 DECEMBER 2022 | 8:30 PM ESTIssue No. 3 will cover the topics listed below:
Cash Generating Businesses for 2023
Emerging Businesses to Begin Now
Getting Friendlier with Risk Taking
Come prepared to our YouTube live stream debrief with your homework from the Intro Issue, and your take on what this means for you and your small business in 2023.
Don’t forget, the next issue of the FALK Report will hit your inbox one day before it’s released to the public when you sign up for our email list. Get access by subscribing below.