Financial Fitness In November 2004 two of the giants in retail merged to form the 3rd largest retailer in America, this last week the results of this merger between K Mart and Sears that created the Sear's Holding company were finally tallied. 120 stores will be closing, despite the efforts to save the retails giants. Several analysts believed that the new corporation was headed towards failure, putting 2 maladjusted partners together does not always breed success. Both of these historical retail giants were losing not gaining ground to Wal-Mart. This deal cost $11B and the plan was to sell more grocery type products in Sears and at the same time promote the name brand lines like Martha Stewart which sells at more profitable rates than the rest of the store. Sounds great but the plans of mice and men are not always coming to the fruition especially in this economy. Sears has tried to create name brands when the United State consumer is simply looking for a deal.
So here we are 7 years later and the Sear's Holding company is announcing that 120 stores will be closed. The stock price is down 37%, Profits are way down Sears is taking a $2.4B asset based write down in 4Q11 and company debt is up $483M, same time last year there was no debt. Fourth quarter earnings prior to fixed costs is half of the earlier periods earnings of $933M. The closures of these 120 marginally profitable stores are supposed to generate $170M in income. But Sears owns the land, what tenants can they place that will make the space more profitable than their current owners? Sears got out competed by Wal-Mart and Target. The original business plan was to create a low cost structure to compete with their competition. Well it's looking as though the low cost created a dreary and dismal shopping experience as most consumers simply don't feel a very positive attitude about shopping or simply entering a Sear's store.
Sear's made it huge when it used a new concept in shopping mail order catalogue purchases in the 1800's to farmers during the agricultural revolution. You might call them the eBay of our time. But they did not move with the times and did not continue to develop their business plan. To larger degree we all need to be doing something that improves our mindset and makes us better in business. Doing the traditional format of going to college and getting an education is not going to make you rich, that is the system that our government and BIG business want us to use. But think of it this way if everyone is doing the same thing how does anyone excel, what you have is Socialism.
The true method of learning to be successful is learning to do things that are bold and new and brings into light a new concept. My own story started when I was 8 years old. I was with my friends at Hickory Park and I thought to myself I could walk up to them and say something popular and they would really enjoy what I was doing to entertain them. I could be popular by saying or doing something that everyone wants to hear or I could choose to do say and lead a different life and create a life time adventure filled with experiences that the average person would never have. For 3 whole weeks, which is forever for an 8 year old, I pondered this mindset and after thinking about this I had made a decision to do something different in order to get a different result. This moment defined me into the world of contrarian thinking and brought me into an investor's mindset. So many times people come to me and hear my message of helping others and they ask for me to save them. I hear so often that I lost my job and don't have any money or credit. They want to make it big in real estate and will do whatever it takes to be successful. They tried employment and after placing their faith in someone else's agenda would rather now work for one's own future. But my questions is why did you have to wait until your age 65 to start an investing career? I started at age 8 in reading and understanding how stocks work and asking questions about the market. I recall asking my Dad about the "terrible news" of a stock split on one of my early investments. Yes I started in stocks because I lacked the experience. I think for the most part many people start in stocks, but as your investment experience grows so should your ability to move beyond what you know and I am telling you that yes I made money in stocks, but sold at the height in 2001 prior to the tech stock boom and I am far better off investing in myself than giving up my working capital to someone else's corporation or agenda. And you should be as well. The last thing is what we want to be is Sear's Holding Corporation. Get into cash flow improvement today and start working towards your plan for financial fitness.
Financial Fitness is something that you and I need to be working at each day. It's moving your dream forward and improving the lives of others. It's a mindset that sets you a part from others and embraces the truth and reality that creates wealth by working towards your agenda. Yes we do some very unpopular things today and that is because we don't want to have the same results as everyone else. Stop putting your faith in others and evolve to something better. You can do this by creating your own passive income stream today and putting your family first instead of your job. I am looking to work with a few hand chosen individuals that want to step up to a better life by creating a passive income stream.
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