One small (but noteworthy) benefit of this period of economic downturn is what we learn about creative financial events. For those of us in Michigan, we’ve clearly learned more about corporate bankruptcy than we probably wanted to know.  I’m also not talking about TARP loans or other government bailout issues (I try to stay out of politics, but we have certainly seen all sides of the creative financial maneuvers of Wallstreet).

I’m really talking about personal creative finances. During unique periods, it seems, we also find a greater willingness to consider options we might have previously dismissed.

I have heard from dozens of friends here in Michigan that have shared concepts with me that I’ve never heard of previously.  Granted, I’m not in the banking business….but I’ve bought and sold 8 different homes in almost as many States and I’ve never imagined some of the creative financial maneuvers I’ve learned about this year.

Everything from mortgage “short sales” which are allowing thousands of people to walk away from homes that they owe more for than they are worth to credit card “cancellation of debt” negotiations which are allowing unemployed/under-employed family write off debt, there are multiple alternatives that I never knew existed for families to consider.  It seems that anything is possible and we shouldn’t be constrained in our curiosity for solutions.  Talking with your banker might yield more than you think. It’s not the “all or nothing” philosophy I’ve grown up to believe.

There is also a changing landscape with our banking institutions. Not to mention the fact that mortgage rates are at historic low levels (I am hearing that banks are now actually writing more loans after a lengthy dry spell)….people are restructuring their debt loads to levels they never thought possible.

The downside to low mortgage rates, however, is also low investment rates.  These days it doesn’t pay to save (outside piece of mind to have liquidity)–making debt reduction the name of the game.

Anyone who has tried to renew a bank CD in the last 18 months have come to the shocking realization that the ANNUAL interest rates for them have been near or under 1%.  Saving at a rate less than inflation won’t get you very far.

One growing trend that I personally hope thrives in this next generation is the formalization of personal lending (peer-to-peer loans). I can’t think of any better by-product of difficult times than the closer union of family members and/or friends through direct lending.  Why shouldn’t we match family (or a small group of people) with money to invest with family wanting a loan?

Use a third party to facilitate the transaction (online documentation, EFT funds transfer, year end tax reporting, etc).  There are many, but I found one that is simple to understand called CircleLending.com (now it is VirginMoney.com).  Quite simply, it facilitates skipping the middle men (banks, agents, etc) and uses electronic fund transfers to handle the transactions every month.  As long as there is full transparency, documentation of all the “particulars” and annual statements provided, these 3rd party companies serve a terrific void in the market.

Note:  I found this company when researching options for someone with rental properties that complained about losing a good tenant who bought another home down the street from the one they were renting.  It seems to me that holding a mortgage for 30 years would be better than finding 10-15 tenants over the same period (the house is paid for).  At any rate, it is worth considering as an investment alternative for the right people.

Others to read about:

http://www.lendingclub.com/home.action

http://www.prosper.com/

http://www.kiva.org/ [facilitates lending to low income entrepreneurs]

Clearly, there are multiple silver linings in economic downturns…some of them are even financially related.  Creativity, innovation and character are all entering a period of explosive growth during these times.  Don’t be shy…encourage those around you to find these upsides to an otherwise lousy recession.  The road ahead will be so much more enjoyable.

Another potentially positive offspring  of a substantial economic downturn, which is closely associated with the opportunity to reshuffle our priorities, is the chance it provides us to redefine fun and to seek more of it with our spare time.  It is almost embarrassing to realize that prior to this “great recession”, we allocated so much of our time and energy to activities that simply weren’t much fun and didn’t include those who mean the most to us.

With new found “free time” on our hands and the pressure to preserve financial resources, we naturally seek out alternative pastimes.  The silver lining in this often includes having fun with family and friends over casual gatherings.  We suddenly begin to take stock in simple pleasures and appreciate what we already have available.

During our late summer cleaning this year, we even discovered long forgotten “toys” that still bring us great pleasure.

Believe it or not, I think my kids actually had a few hours of fun RAKING the LEAVES this year!  (ok…maybe that’s a stretch)

Fun is all around us…when we focus on it.  I use to think it was a silly saying that “happiness is a choice”, but it is especially contagious and transferable once it starts.

I believe we can actually achieve higher quality of life in a downturn because we are often forced to make more quality time available.  I think a slower / more manageable pace helps facilitate spontaneity and perhaps we can feel better about the quality of fun we are having with minimal cost.  While it can often happen without much effort, it is easier to simply make plans to give it a try.

There are a number of ideas worthy of consideration:

- Try an old fashioned “game night” with another couple or with your kids

- Family movie nights are always popular (this time with popcorn–just like the theater)

- Connect with distant friends/relatives via social media–actually posting photos and stories on facebook for others to enjoy.  I am still a bit lame in this regard, but I am getting better.

- You may find that nothing is more fulfilling than volunteering for that role in your Church that really needs attention

- I’ve heard from several colleagues that have also submerged in their kids school activities and/or sports and the added bonus of stronger bonds with their children

- Time to go back to school yourself?  Even online self-improvement classes or learning modules can be fun (ie finally learn how to really use Excel…or start a foreign language)

Any other ideas?  What recommendations would you have for someone to instill more FUN in their lives without using significant financial resources?

[Note:  I am intentionally breaking this post into multiple entries this week.  It was far too long, and I'm not skilled enough to be succinct.]

Start with Priorities:

This “Great Recession” we are experiencing will certainly have many lessons on life for at least another generation.  From learning to save for rainy days like these, to taking charge of your career, to creating the lifestyle that you can afford, to simply re-aligning our priorities; difficult times can provide terrific opportunities for learning and fresh starts for each of us.   I want to share a few revelations of my own as my focus these days has been on the silver linings of difficult events.

Nothing is more unsettling than learning for the first time that the rock solid institutions you once believed would always prevail are forced into bankruptcy (or the proverbial “mergers of equals” – Takeovers).  When the first couple occurred it was easy to rationalize them (Enron, K-Mart, etc), but when the massive wave of unexpected foundations crumbled (GM, Chrysler, Lehman, Fannie & Freddie, WAMU, etc) it finally awakened the reality that no fixed business is sustainable by design.  This state of fluidity is now the norm and has multiple positive by-products if we embrace it.

As I’ve mentioned, one of the most obvious positive outcomes is the ability for each of us to realign our priorities.  Chasing something we don’t really value is silly, yet we’ve all been guilty (at one time or another) of unnecessarily increasing our debt or frivolously spending what we’ve earned  which ultimately restricts our ability to achieve what we value most.

I once thought it would be easy to sit down and FORCE RANK all of my priorities.  I was wrong, it is an incredibly difficult task. Go ahead–give it a try.  The more you write down, the more more difficult it will be to justify and rank.

Start by listing all the things you like to do rather than all the bills you pay.  It will be easier to identify the things that you are passionate about and value most.  Include things you’ve never done, but always wanted to do (and believed you would do one of these days).  The list will be long, but that is ok.  If you stick with this exercise (it will take you a couple of weeks if you’re like me), you will start to categorize the list in separate buckets and ultimately start to see a few trends or ideas arise that might surprise you.

Once you’ve successfully listed all of the things you value…force rank them.  This is kind of impossible (it’s akin to saying you love one person more than another), but it will force you to make decisions that must be made.  For me, it reinforced the importance of enjoying every opportunity (events, days, family gatherings, etc) rather than just looking forward to the next “big thing”.  When you have 20 something #1 priorities, like I had when I first sat down to do this, you will come to realize no one is in control.

It is painful to come to terms with the fact that we often allow life to unfold around us when we could have made different choices that may have resulted in outcomes closer aligned with our real priorities.  Knowing and ranking our priorities is the first step to correcting this inequity.

Bankruptcies allow companies to make a fresh start (sort of) without the encumbrances of debt. It allows them to redefine or re-engineer their mission, plans, priorities and strategy.  As painful as it is during the process, it facilitates a second chance.  We all deserve and have this same opportunity even without the financial protections this process affords.  It simply starts with a personal list of ranked priorities.

Happy Listing.

My apology for this brief technical interruption.  I am attempting to verify my blog feed and claim the blog with Technorati before we get started.

Claim token

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We will return to our regularly scheduled routine tomorrow.

What a fabulous American tradition we have in Thanksgiving.  Even without the benefit of a history lesson, we continue to enjoy the annual traditions of this week as families and/or friends gather together.  Given the difficult recessionary environment we’ve experienced this year, the time we have with each other is more precious than ever and a welcomed break for all.  Even if we aren’t lucky enough to have all our loved ones at a single location, we can be thankful for our relationships and share their happiness on this day of Thanksgiving.

Normally I despise the long lines, crowds and the hustle of airports, toll roads and shopping malls.  But there is something about the week of Thanksgiving that calls me to all of it with a totally different attitude.  For some reason the week of Thanksgiving is above & beyond my normal rules of engagement and I actually enjoy the chaos of the crowds. [Note:  to be honest, so is Christmas eve—to my wife’s dismay I have always shopped this night until the stores closed. Even without buying a thing!]

At the risk of stealing some of the thunder from a post not yet ready for consumption (the end of this months post “the upside of downturns”), we have much to be thankful for if we have friends or family members to share time with and reflect on how much value we add to each others lives.  Its a perfect opportunity to reflect on our priorities, our relationships, our goals and our good fortune to be amongst loved ones.

It is also a fabulous example of showing how much we benefit individually from focusing on others.  In the midst of our hurried schedules we have all been guilty of taking each other for granted and simply letting our memories suffice for good times.  This week can change all that –  for everyone who simply takes stock in those around them.  Listen to their stories and share your own.

As I normally say at least one thing in every post that allows someone to take issue (or provide an alternative point of view), I would also like to add that I hope you avoid talking about  argumentative topics on this day/week of gathering.  We’ve got plenty of time to hash out the polarizing views of politics or religion or whatever else is the one topic that seems to tip the scale to negativity at your party (sports are still ok to take sides).  Preserve the time for creating new memories that will last for years to come.

Finally, as is our family tradition, I hope more folks have the opportunity to verbalize (at least privately) how thankful they are for those around them.

To add to the embarrassment of my immediate family members who can’t get over the fact that I am experimenting with such a public forum (even if only 28 people are my beta readers until Jan 1st), I submit the following claims of what I’m most publicly thankful for this season:

• That we are all alive and relatively healthy (flu bug made its way around this month)
• That we have the ability to travel and gather some family members together (Oklahoma, here we come)
• That all three of our kids have a TERRIFIC school year going down (grades, friendships, relative class enjoyment)
• Moriah was chosen for school mascot, Nathan’s surprising interest in futuring, Alex “nailed” his last term at RIT
• Ford stock and share are going up for the first time in MANY, MANY years

Happy Thanksgiving week.

claim token 9T6C52EA69RQ

transition [trænˈzɪʃən] n : the period of time during which something changes from one state or stage to another

transformation [ˌtrænsfəˈmeɪʃən] n : the act of transforming or the state of being transformed (to alter or be altered radically in form, function, etc.)

I’ve caught myself on multiple occasions interchanging the terms “transition” and “transformation” when describing my intention to focus on specific topics in this blog.   Indeed, they are interchangeable for most of my purposes, but it does warrant some conversation.  In some respects, I use the term “transition” to represent softer changes than those implied by the term “transformation”.  I typically use the term transformation to reflect a “complete” turnabout or metamorphosis.

I believe life is FULL of transitions worthy of discussion.  Nothing seems constant except the inevitability of one transition after another…a constant state of transformation or some degree of fluidity. We often get use to many necessary transitions as they take time unfold:

• Childhood – Adolescence – Adulthood – Parenthood
• Social – Dating – Marriage
• Injury – Treatment – Healing – Recovery
• Grade School – Middle School – High School – College – Grad School

There are also multiple transitions we face with little or no stress (in hindsight, we often forget how stressful the moment was at the time).

• Meals, Sleep, Dressing
• Spring Cleaning, Seasonal decorating/clothing
• Daylight Savings Time
• Work days, Weekends, Holiday Schedules

There are clearly, however, a number of events or phases in life that can take us by surprise or force us to pause for reflection or make plans. These transitions (or transformations) are intentional, deliberate and usually require action (decision).

It is the transition that requires a decision that most interests me, although I will likely share some examples of transitions that I don’t believe required or were the result any particular decision point.  I hope the tales of transformation are as educational for readers as they are for the participants.

There are a number of transitions/transformations that I intend to include once we get officially started.  Some are deeply personal, some are simply professional or are stories I’ve gathered over time that have proven interesting.  You can be sure I will cover, at least, the following transformations/transitions in future posts:

• The Transformation of a COMPANY (ie Ford Motor Company)
• A new job…vs a new Career…vs a new assignment
• Transitions from Employee to Supervisor
• Retirement (assuming I keep blogging that long)
• Transformation of Religion
• Empty Nesting

I’ve been fortunate to have experienced more transitions in my life than I would care to list in a single post.  To be sure, I will focus on those transformations and transitions that have something of value for others (at least, in my opinion).

Note:  The real benefit of a blog is the ability to document a transition as it unfolds.  Transformations like the one Ford Motor Company has been undergoing for the past several years and will likely continue for several more, are especially unique to witness as it progresses.  I am hoping I stay true to my intention of honestly and accurately recording how it transpires from my own point of view.