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My Journey As A Creative Designer - Woodworking and Beyond #74: The Reality of a Crippled Economy Hits Home

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Blog entry by Sheila Landry (scrollgirl) posted 08-16-2010 12:16 PM 3620 reads 0 times favorited 7 comments Add to Favorites Watch
« Part 73: "Relief" Part 74 of My Journey As A Creative Designer - Woodworking and Beyond series Part 75: Back to the Drawing Board! »

Well, another weekend has passed and another Monday is here. It all goes by so quickly it seems. Especially with the silliness of last week. It seems that I spent most of Saturday catching up with the regular chores and yesterday just flew by. We went to our friends out by a lake and the weather was perfect and we had a nice afternoon. I got home by 9pm but was so tired I could barely keep my eyes open so I called it an early night.

Today I got up early and am ready to start a productive week. I couldn’t call last week really productive. Too many distractions and not enough concentration. I have a plan though for this week and need to set some mini-goals and work toward them. I am not too good at accomplishing things when I don’t set definite goals. I don’t know, it may just be me. But I don’t do well when I am just ‘winging it’.

I had some somewhat frightening news yesterday that shook me up a bit and brought me back to reality off of my pink cloud. Prior to leaving for our outing, I went to check the balance on my USA bank account. (I have a bank that I keep in the US because my business is located there and I get paid mostly in US funds. It is important for me to keep an account there, as it saves me a lot of time and aggravation and exchange fees and stuff) Anyway, I go to log into the account and there is this ominous announcement on the screen that my bank was CLOSED and taken over by the FDIC (Federeal Deposit Insurance Corporation) and subsequently would be run and operated by another bank under another name.

I felt my heart leap as I read the notice. Many of the words on the notice were printed in red and the first thought that flashed through my mind was the scene from “it’s a Wonderful LIfe” where there was a public run on the bank when it failed and the stock market plummeted.

Thankfully, the momentary panic in my mind only lasted a second. As I read on, I realized that even though the bank was ‘closed’ by the government and taken over, the system was in essence “working” and that everything would be safe. I logged on to my accounts and saw that other than the new name beside the familiar one of my bank, everything looked normal. I was still able to transfer money from one account to the other and it looked pretty much like business as usual.

I tried not to think about it much during the visit yesterday. But part of me couldn’t help but worry a bit about the implications of having to try to find another US bank to fit my needs while here in Canada. I had been with this bank over 15 years and they were what I would call a “neighborhood institution”, named after the town where it originated and had two branches initially. In recent years, since I came to Canada six years ago, they had added several branches throughout the Chicago area and now had six. Good, I thought. They were growing.

As far a banks go, they were great. While everyone around me was complaining about picky fees and charges for everything, I enjoy not only low or no fees on most of my transactions, but also the best customer service you could ask for.

During the initial transition of me coming here to Canada and operating my business from another country, they were always helpful and you could always talk to a person who would do their best to make things work for you. I could picture them at their desk as they were when I was there in person and as recently as this tax year, they assisted me with some financial information that I would have otherwise had to jump through hoops to obtain without being there in person. Most of these services were offered without additional fees or charges, too.

Perhaps, as was pointed out to me, that is why they failed. In a world where you sometimes get charged for looking up your own balance on your own account, maybe they just couldn’t keep up because they didn’t have these petty fees. I just don’t know.

One of the only comforts that I find in this is that the bank that will be taking them over is the same one that I dealt with for six years because I had my car note through them. Although they are MUCH larger, I had little problems, if any with them and have a good record with them and some history with them.

I worry because my business is quite small and most of the larger corporations and banks don’t want to be bothered with me. I imagine that they don’t feel they will make enough money off of me to make it worth their while. Perhaps though I am jumping the gun because as I said, I haven’t really been with any other banks since I started my business, so maybe I am being unfair. I just hear stories from others who are starting up businesses and look at it as being challenging at best.

I did everything through this bank from my own personal banking and business banking to running the credit card transactions from my site through them. There is quite a bit involved with getting everything to run smoothly and what may complicate things more is that I am located here in Canada so it will be difficult to set things up from scratch somewhere else without being there. I can’t really afford a trip back to the United States at this point and things were just getting going.

So when I returned home last night, I did take a bit of time to read through their instructions on the site. Apparently they say that little will change except that the bank will be more stable and larger and more convenient. Something inside tells me that it will come with a price though.

The good thing is that it doesn’t appear that large changes will happen quickly. I am sure the last thing they want to happen is to panic the customers that are there and have them pull out. I just need to read and to be aware of what will happen and also perhaps line up a “plan B” for myself and my finances that I can implement if things get too expensive or out of hand. I can’t imagine them dumping all the new charges they probably intend to dump on us at once and hopefully it will buy me enough time to do some research and make a good decision and do some comparison shopping. I am sure I will find a way.

So in the mean time, it was quite a personal wake up call that the economy isn’t ready to settle down yet. Perhaps it is part of the healing process and perhaps it will ultimately weed out the types of institutions that put us into the situation we are in now in the first place. We all knew that something had to change. I feel very fortunate that this type of change is manageable for me right now. I have seen many others hit with much worse fates than I have and even though this is a blow, I feel still fortunate. “Knowledge is Power” you know. Educating myself on this and looking closely at my options will be my best bet. There are always options.

So with that said, I will get to work. For those of you who fondly scold me that I work too much or too hard, this is one of the reasons why I do. I have been around long enough to know that there are upswings and downfalls of both the economy and businesses in general and I know I need to do everything I can to prepare for these ups and downs in order for my business to survive. Thank goodness I love my job and want to work at it as I do!

I can sum up what my day will be today in three words. Focus. Plan. Implement.

To me it is a win/win strategy.

I hope you all have a great and productive Monday! I can’t wait to see what the day brings for me! :)

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"



7 comments so far

View BritBoxmaker's profile

BritBoxmaker

4607 posts in 2497 days


#1 posted 08-16-2010 12:39 PM

I seem to remember that towards the close of the ‘bank run’ scene in Its a Wonderful Life the bank was saved by a little investor putting in her two dollars worth.

The main worry I have seen here is Building Societies, mutual societies owned be the depositors (you and me) changing over the years into banks, owned by shareholders, which charge high rates.

If, as a small business, you can make it through a recession there are brighter times ahead. I hope it goes well.

-- Martyn -- Boxologist, Pattern Juggler and Candyman of the visually challenging. http://www.theartofboxes.com

View Don Butler's profile

Don Butler

1086 posts in 2856 days


#2 posted 08-16-2010 02:46 PM

My wife and I have been in businesses (small, mom & pop enterprises) for many years, in fact most of of 49 years of married life. Here’s a few of the things we’ve learned as they applied to us, personally.

The bigger a bank is, the more impersonal and the more likely they are to give us a taste of that impersonal nature when we need them most.

Banks owned by stockholders are constantly changing things around in an effort to maximize profits. That often resulted in our loss of services and, in one case, actual loss of capital.

A reltively new feature in the U.S. financial world is community credit unions. We joined a credit union when I was still working in industry, and now have joined a community type CU which allows all people in a community, large or small, to join. The one thing about them is that they do not have to turn a profit and if they do, it all goes back to members.

I don’t know if they allow Canadian residents to join, but it might be interesting for you to see if any do. We do all our work through ours, including all business related things.

Don

-- No trees were damaged in posting this message, but thousands of electrons were seriously inconvenienced.

View Sheila Landry (scrollgirl)'s profile

Sheila Landry (scrollgirl)

9036 posts in 2381 days


#3 posted 08-16-2010 02:56 PM

Thank you Martyn for your support. You know I appreciate it.

Don – That is a good option and I will definitely look into it. I am, and always will be a US citizen. I don’t think anything will ever cause me to give that up. I am considered a “landed immigrant” here in Canada and I now have the option to go for Canadian citizenship in addition to my US citizenship (dual citizenship, if you will) I already have to pay taxes in both countries, it is not ‘either/or’ as most people think. However, it does offer me the benefits that both countries have to offer. Since I have only gained my Landed status here in Canada just over a year ago, I have a lot to learn. (Probably more than I want to!) But I do appreciate the information, as my accountant feels that for right now at least, it is best to leave my business in the United States, and that may help in what you were talking about. I can see that an appointment with her will be in the near future so that I can make the best decisions for my needs.

I will definitely consider all options. Thanks so much.

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"

View William's profile

William

9906 posts in 2303 days


#4 posted 08-17-2010 01:15 AM

I think the economy has hit just about every one in one way or the other. Last year, just as my sales were starting to do halway decent, things dropped through the basement. For over a year now, I hardly sell anything untill about November when people start buying Christmas. I have to look at it like this though. I’m doing what I love. I have eight kids. We have a roof over our heads and food on our table. We’re doing good.
More on topic though, maybe you’ll get lucky and they’ll leave your accounts alone. Even with all the hoopla going on lately about the fees that banks charge, mine have stayed the same. I’ve had the same account for about ten years with no fee at all unless you overdraw your account, which I’ve never done. When I asked about if my fees would ever go up, I was told that although they no longer offer free checking to anyone, existing accounts stay the same as long as they are kept open. That was a relief to me since I have no plans of closing the account. Hopefully, yours will be the same case even though the bank changed hands.

I do have to do things I don’t like though. Right now I’m building over fifty picture frames. I hate picture frames. The repetition of it is mind numbing to me. However, sometimes we have to do the things we don’t like in order to afford to do the things we do like.

-- http://wddsrfinewoodworks.blogspot.com/

View Jordan's profile

Jordan

1396 posts in 2586 days


#5 posted 08-17-2010 05:39 AM

Wow – two bank accounts!!! Sorry, I can’t give you any advice, I was hoping you might be able to give me some about how to keep money in ONE! LOL.

-- http://www.jordanstraker.com

View RonPeters's profile

RonPeters

713 posts in 2341 days


#6 posted 08-17-2010 06:21 AM

I’ve been following the banking fiasco for the past 5 years or so. Believe me when I say this is not over yet. Not trying to be a doom-n-gloomer, just stating the facts. There have been over 140 bank failures last year in the US. We’re on track for more than that this year. That’s correct. Check here: http://www.fdic.gov/bank/individual/failed/banklist.html for the tally.

There’s more to the economic story than meets the eye. Tread carefully. The forgotten historic ‘rule’ is keep 15% of your net worth in gold. Yes, that old relic. It’s not an investment, it’s insurance against uncertain times. Anyone see any uncertainty out there? Keep 6 months of cash on hand as well. Safe deposit boxes aren’t exactly ‘safe’ when the government decides to take a look see. History may not repeat, but it sure does rhyme! Protect yourself.

Safe investing to all….

-- “Once more unto the breach, dear friends...” Henry V - Act III, Scene I

View Sheila Landry (scrollgirl)'s profile

Sheila Landry (scrollgirl)

9036 posts in 2381 days


#7 posted 08-17-2010 01:13 PM

You are not being full of doom-n-gloom, Ron. Again you are being realistic. I was on the site you mentioned earlier in the day and saw that my bank was number 111 this year alone. I know I am not isolated in this instance and perhaps that I why I wanted to share things with you all. I get the NY Times delivered to my email every day and although I don’t go over it with a fine tooth comb, I try to keep up with things a bit. We are not out of the woods yet.

In a way, it does help my moral because I know when things are slow it isn’t because of the quality of my work or anything like that. I have learned not to take it personally. I have said this before but when people are worried about their jobs and putting food on their tables or a roof over their heads, the last thing they are going to purchase is a scroll saw pattern. The plain fact that I am holding on is encouragement to me and gives me hope that when things really do get better, I will be in a good position. I have downsized my life quite a bit in the past couple of years and I don’t necessarily think that is a bad thing. I have been much happier with my life with less things and low overhead doing what I like to do. I will fight tooth and nail to the finish for that.

There will be clear answers to this. At first I was angry because they did this at the end of the week and then the bank was closed for the weekend. The more I think about it though, it was probably part of the strategy. I am sure that many customers did the same thing as I did and had that initial panic when they tried to log into their account. It did however give people the weekend to calm down and find out information. The more I think about it the more I am sure that it was planned that way.

I am hoping for the best. As William said, maybe things won’t change that much. If I have learned anything over the years, I have learned (and am still learning) not to worry about what “may happen”. Take things as they come. Ninety per cent of what I have worried about in the past never actually materialized anyway. I think of all the time I wasted worrying unnecessarily that could have been spent being creative!

And to Jordan – The only reason I keep two accounts (one here and one in the States) is because when I came here I still had some bills that were owed there and it was so much easier to pay them through a US bank. Even now, my credit card processor on my site won’t deal with any non-US bank. So I would have to start over on my site and pay all the initial set up fees again and try to find a reliable company. The one I have has been excellent and I would hate to have to change it. There were so many instances such as that which made it necessary to keep a US account. Some of my suppliers won’t even take a credit card from a Canada bank. No kidding! I keep a debit Visa tied into my account in the US for just that purpose. It seems ridiculous, but it honestly happens. I thought all Visa’s were international. You live and learn.

So on we go from here. :)

-- Designer/Artist/Teacher. Owner of Sheila Landry Designs (http://www.sheilalandrydesigns.com) Scroll saw, wood working and painting patterns and surfaces. "Knowledge is Power"

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