The real unemployment rate

Today, the U.S. Bureau of Labor Statistics reported that the U.S. economy lost a paltry 11,000 jobs. With all the fanfare, you would have thought that there was some reason to celebrate. Far from it.

Sure, we're no longer losing jobs at the same pace as at the beginning of the Great Recession, but one in ten people in the labor force is still out of work. Of the 165 million people in the labor pool, that's 16.5 million people that are out of work that are looking for a job and just can't find one. But it's a lot worse than that... The Bureau of Labor Statistics doesn't count people who are employed in part-time jobs to make ends meet or people who are considered to be "discoraged job seekers" and have stopped looking for work altogether - presumably because any family of four can eat off of the $800 subsidy paid twice a month. Yeah, that is, if you like to feed your kids ramen noodles three times a day.

The reality is that our economy, and our labor market, is in shambles. The real unemployment rate is closer to 17.5% when you factor in all the people that have stopped looking or have taken on part-time work just to make a few extra bucks. That's another 12 million people that can't find suitable full-time work. At a "full-employment" rate of 5% unemployment, our economy would have about 8 million unemployed people. There's nearly 20 million more people unemployed than there was when our economy was at full employment a couple years ago. That's freightening.

So, what's one to do if they can't find full-time work or refuses to don the orange apron at Home Depot or the blue apron at Wal-Mart for 25 hours a week and no benefits? Well, many people have turned to eBay to sell there stuff. In the last year, the number of online auctions on eBay has more than doubled. The average daily auction volume in August, 2008 was 15 million auctions. In November, 2009 it was close to 35 million. eBay is as popular as ever because it's a great place for people to make some extra cash. People are selling their stuff in droves.

The unemployed and underemployed are also turning to direct selling and Multi-Level marketing companies in droves. Amway, Tupperware and Avon have all experienced record growth in the ranks of their agents/salespeople. When times are tough, Americans become ultra resourceful. Door to door selling is even making a comeback. Who would've thought? I guess if people aren't at a job, then they're at home, so why not...

Speaking of resourceful, people are also getting into the hospitality business. I recently counted the number of short-term rooms for rent posted on Craigslist. These are rooms for rent by the day - not by the month or by the year. These are people looking to make a few extra bucks by providing lodging services to travelers. I found that on a typical weekday there are more than 1,000 new ads posted for short-term rooms for rent. This is more than double the number from just a year ago. Craigslist lacks essential security features to make it a fully functioning lodiging classifieds site, yet people are willing to take the risk to make a few extra bucks by renting out their extra space to travelers.

Americans possess an unprecendented amount of unused space in their homes. Resourceful people all around the country are learning that they can monetize their unused living space by getting into the hospitality/lodging business. People are running make-shift B&Bs as a way to avoid foreclosure. Not a bad idea if you ask me...

Mint.com posted a humorous video that discusses the real unemployment rate on YouTube.

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.

Project update

Hi everyone, it's been a while since my last post, so I thought I'd drop you a line to let you know what we've been up to. In the last month we've made considerable progress in building the Sherpa home based lodging marketplace. Designing and developing a complex product like this is challenging when you consider that we're building it for mass market adoption. During the last month we found a great software engineer, nearly completed the front-end design of the site and have been hard at work at programming the interface. We also participated in a VC competition that gave us many more ideas to enhance Sherpa's product ease of use and competitive advantage.

Simultaneously, we are ramping up our sales and marketing activities to line up key partnerships that will be important participants in our launch. We are also hard at work building an inventory of great homestays, B&Bs, vacation rentals and home exchange properties.

The early 2010 launch of Sherpa couldn't come at a better time. People around the world are struggling through this difficult recession and are in need of a life- line. Sherpa will extend a life-line to millions of people by providing them with a way to market their extra living space to travelers in search of a more authentic and personal travel experience. Homeowners and tenants around the world possess an unbelievable amount of unused space that can be monetized by accommodating travelers. With real unemployement hovering around 17.5% in the U.S., many people are looking for new and innovative ways to make some extra cash as they seek their next full-time job or work their way through an educational program that will help them change careers.

Over 50 million trips were booked this year in the U.S. alone where the accommodation type was someone else's home... and not a hotel. That includes vacation rentals, B&Bs, homestays and home exchanges. We're building a product, and a company, that is going to help millions of homeowners get into this market and compete for these paying guests. We welcome your feedback and questions.



Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.


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Hostage – At The Mercy of the Hotel Giants

Last Spring, I took my 12 year old son up to Reno to play in a 3 day basketball tournament. This meant that I had to find a room for us to stay in. There were not many hotels that were walking distance from the basketball venue, so we were stuck with the decision of staying far away which meant driving through traffic to each game and paying for parking each time, or staying at the adjacent hotel and being left at their mercy regarding price and accommodations. In order to get a good price, I had to play the old hotel game of booking a room, checking pricing every day, and being prepared to cancel and re-book when the price came down. I also had to worry about the room I would end up in.

I later came to find out that this was a small, run down and bed bug invested hovel standing in the parking lot of the main hotel. It was easy to see that the hotel considered people in these accommodations to be second-class citizens. Reading the reviews also led me to another conclusion. The Motor Lodge was just a ruse to get people into the hotel. When people actually arrived and saw how bad it was, they immediately complained and asked for an upgrade. And, for an additional fee, the hotel would accommodate them. I, personally, thought it was misleading and out right robbery.

Well, let me tell you. Hotels are designed to be at or close to capacity at all times in order to meet their revenue goals. This means they will do anything they can think of to bring in more money. Second, the hotel industry has gotten away with having no real competition for years. Taking a look at the numbers, there are about 4.4 million hotel rooms in the United States. Matching this with the fact that hotels like to stay close to 70% full or more, means whenever it is believed a hotel can attain a profitable occupancy rate, one is built. In short, whenever hotel occupancy rates are good, the hotels are free to treat people like trash, because they know they will make their money any way. However, when occupancy rates fall, the hotels are forced to treat their customers better.

Try a Homestay. Yes, you heard right. More and more people are staying in other people’s homes when they take a trip. The accommodations are often better, the price is always better, and your options are unlimited. That is, if you can find a good source for Homestays. That is where companies like Sherpa Travel Exchange come into play. Sherpa will soon be offering a “Travel Exchange” focused on Homestays, Home Exchanges and Vacation Rentals. With 60 million homes in the United States, and 90 million vacant rooms, the inventory potential is huge. If just 5% of the available rooms were up for rent, the number of rooms available to travelers would double. Now this is something that would get the hotel industries attention.

So, my advice to you is to not get caught up in the games of the hotel giants. Don’t get stuck, like a hostage, at the check-in counter asking for a better room because they will stick you in a dump while they wait for you to beg and pay for a better room. Think about a Homestay and get treated like a real person by a knowledgeable local host the next time you travel. Until next time, happy travels.

Darrin Underwood

Contributor

Sherpa Travel Exchange

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

What Should I Do With My Timeshare?

What should I do with my timeshare?

That is the question facing thousands of people these days, especially with the downturn in the economy. Nobody wants to sell their timeshare for ½ of what they paid for it, but that may be the best thing to do. Let’s do the math. Say you paid $16,000 for your timeshare, and you are paying $600 a year for maintenance. Let’s also say that you can only sell your timeshare for $8,000. That means that you would lose $8,000 right? Not necessarily. At $600 a year for maintenance, you will pay almost $8,000 in $13 years (not including banking and timeshare location switching fees). If, however, you keep your timeshare for the next 20 to 30 years, you will pay $12,000 to $18,000 in maintenance fees; and that is if the fees do not go up. Yet, your timeshare will not be worth much, if any more money. So, my short answer is, sell it.

What if I don’t want to sell? Well, if you do not want to sell, then my suggestion would be to quit banking it through your timeshare management company. These companies charge up to $300 membership and another $150 transaction fee each time you want to travel to a different destination than the original purchase. Not only is it expensive, it is also difficult to find places, through your timeshare management company, that you really want to visit. Well, what should I do? Read on.

Whether you decide to sell your timeshare or keep it, you can save money and increase your travel options by finding someone to exchange your home or timeshare with that is located in the destination you want to travel to. Yes, you heard me, exchange your home or timeshare. Thousands of people are doing it these days and virtually staying for free all around the world. Websites like Sherpa Travel Exchange www.staysherpa.com have created a travel exchange that brings together interested parties for Home Exchanges, HomeStays and Vacation Rentals. The great thing about exchanging your timeshare is that you no longer have to worry about banking it due to an impending expiration date. Instead, exchange it with another homeowner or property owner so they can use your place now, and you can use their place at a later date.

The concept for exchanging homes has existed for years. However, the rise in high-speed internet and social networking has made it easier for people of common interests to connect. Keep an eye open for “Lucky” the Sherpa as he develops an easy way for you to get the most out of your timeshare if you plan to keep it, or get the most out of your travel dollars if you plan to sell it. Either way, you can’t lose.

Darrin Underwood
Contributor
Sherpa Travel Exchange

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

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Ponzis and Pyramids

Congress is set to pass another extension to the Federal unemployment benefits program. Now that the nation is approaching 10% unemployment, our government believes its a good idea to continue to extend the safety net. The news of the unemployment benefits extension got me thinking about what people do to make ends meet when they are unemployed or under-employed. So, I looked at the Bureau of Labor Statistics site (www.bls.gov) and found that for everyone one person that's unemployed in the U.S., there's at least one person that considers themselves "under-employed". That translates to more than 33 million working adults that aren't able to work as much as they'd like to.

One only needs to look at eBay to see the fallout of prolonged unemployment. In August, 2008 there were 15 million average daily auctions on eBay. In August, 2009 there were 30 million average daily auctions on eBay. People are selling their stuff to generate cash to survive.

Desperate times call for desperate measures for millions of people.

We've been hearing a lot about Ponzi schemes lately and it got me thinking about how people get involved in both illegal Ponzi schemes and borderline illegal multi-level marketing pyramid companies like Amway. People are trying to make an extra buck or two, which is why MLM companies like Amway exist where the members recruit other agents, who recruit more agents with everyone making a cut of the sales by their recruits - all the way down the pyramid.

In case you're curious about the origins of the term "Ponzi" scheme, it actually has nothing to do with my hero, Fonzi. Of course, Fonzi was the the always cool ladies man who I so desperately want to be . Charles Ponzi was an Italian immigrant to the U.S. who's likeness is associated with the get rich quick scams that he is so infamously associated with. Investors seeking abnormally high returns make investments in a fund that oddly generates a much higher rate of return than typical funds. Eventually, the fund manager running the Ponzi scheme can no longer afford to pay out the returns and the fraud becomes apparent. If you're trying to augment your income, try and stay away from anything that sounds too good to be true. It might turn out to be a Ponzi scheme.

Some people turn to other get rich schemes they find on the internet like the ones that promise you can earn thousands of dollars per week from the comfort of your own home. All you have to do is make a small investment - which is often where you get fleeced. Some people sell Tupperware, Longaberger Baskets, or Pre-Paid Legal services
to try and make ends meet. All of these involve making a pretty significant investment in time and/or money to actually make a decent income.

Sherpa has an idea that we think will prove to be the best way to earn some extra cash. There are 67 million homeowners in the U.S. with over 90 million unused rooms. Sherpa is going to help homeowners monetize those unused rooms by listing these rooms as Homestays. SmithTravel Research reports there are 4.8 million hotel rooms in the U.S. If only 5% of the unused rooms inside American homes become monetized on Sherpa, the lodging supply in the U.S. will more than double. This dramatic increase in supply will provide millions of homeowners with additional income and will make travel more affordable for so many more people. In doing so, Sherpa will address the growing demand for travel and empower millions of people to augment their income and earn a decent living.

Russ


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Timeshares - Do The Math

If I knew then what I know now…

When my wife and I got married 14 years ago, we took off to Hawaii to spend a week in Kona and a week in Kauai. Our accommodations were in a timeshare owned by my wife’s parents. Staying in a timeshare vs. a hotel made sense; we had multiple rooms, a kitchen for cooking and a BBQ outside. What more could you want? Well, staying in a timeshare does mean one thing for sure; sometime during your trip, you will be pitched on buying a timeshare also. We were no exception.

During our 2 hour timeshare presentation, we were told of the wonders of ownership, and how much money it could save vs. spending thousands every year on accommodations. We were also sold on how we could either sell it if needed, or pass it on to our children, like a summer home. We were also told that we could use our place to trade to hundreds of additional locations if we chose to. Needless to say, my wife and I, like thousands of other people, thought it sounded good. We figured we would start small and buy into 1 week every other year on a 1 bedroom place. Hey, as a bonus, they threw in an extra week for the first 10 years to make it a no-brainer.

It was not until later that we discovered the error of our ways. Doing the math and looking at the reality of the timeshare market really opened our eyes:

1. $7,500 buy in for 1 week every other year

2. Add $2,500 if you finance the transaction

3. $300 per year for maintenance fees

After 10 years, we had spent $13,000 to own a vacation that we had barely used. To top it off, our investment was worth about $3,000 on the open market. Hmmm, not the best use of our hard earned money.

The things that we did not think about were total cost of ownership, our future travel plans and alternatives to the timeshare. Total cost of ownership includes the cost of getting to a far away location for your vacation, and those darn maintenance fees, which really add up. As for future travel plans, what if we did not want to go to that condo on that island? Well, then, we were given the option to trade our place in, bank the days and use them elsewhere. Sounds easy, right? Wrong. There is actually a $300 fee associated with banking your place with the management company. Add to that, a $150 fee for each banking and switching transaction you do. Like something wrapped in aluminum foil and lost in the back of the refrigerator, this is starting to smell bad.

What could we have done? Well, one thing we could have done is saved our $13,000 plus, and swapped our home when we wanted to vacation. What? Swap your home? Yes, you heard me right. To our credit, the internet was not all that large and fast 14 years ago. Getting information was tough, and looking for a house swapping partner was a tough and inefficient process. Today, however, things are different. Companies like Sherpa Travel Exchange (http://www.sherpatravelexchange.com/) are putting together solutions to help travelers see the world for far less than was possible before. Don’t get me wrong, people have been exchanging their homes for years. The problem came from the lack of communication and ease of process needed to make it mainstream. This era of high speed and wide spread internet, along with the surge in social networking is changing the landscape. Finding a home exchange, a homestay, or a vacation rental is now easier than ever, and it will only get better. To top it off, imagine staying anywhere you want for as many nights as you want for the price you spend on a tank of gas. It is possible, see below and Lucky the Sherpa will show you how.

My wife and I have since sold our timeshare. This has freed up some cash, and opened our travel possibilities far wider than we could have had we stayed locked in to the very controlled world of the timeshare. My advice to you is, if you do not own a timeshare, keep it that way. If you do own one, then see my next piece titled “I Feel Stuck - What should I do with my timeshare?”

Darrin Underwood

Contributor

Sherpa Travel Exchange

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts