February 24, 2010

Fiat Money


Very interesting video - if the government can produce money from nothing, and banks can increase the money supply exponentially from that same money...what happens when the walls come crashing down?  Or when the house of cards cannot stand alone? 


February 23, 2010

Rising gas prices...

Why are gas prices rising?  The US inventory of oil is full (the stockpile we keep full in case of an emergency) and with unemployment being high - we are not consuming as much oil as usual.  But unfortunately, gas prices are still rising.  One reason is the value of the dollar is declining...the value of oil is based on the not-so-mighty dollar - so as the dollar the declines, the cost of oil goes up.  Another reason gas is going up is because China, India, Brazil, Russia are economies that are upcoming and growing faster than the US economy.

Because of this I am investing in commodities for right now...mostly oil companies.  Why?  Because if you take a look at the 1st yr target goals for these companies, they all have very high estimates.  For example, Exxon Mobil is trading at $65/share - but their target for the year is set at $78/share (potentially a 20% return)!  Chevron is trading at $72/share - but their target is set at $86/share (potentially a 19% return).  The list goes on....maybe the oil companies have some insight that we may not know of?  I could be wrong.  The oil companies could be wrong.  But if we're both wrong at least I'll still get close to 3% in dividend returns.  And I doubt the oil companies will need a bailout anytime soon.  So we'll see...


new-credit-card-rules-could-help-banks: Personal Finance News from Yahoo! Finance

new-credit-card-rules-could-help-banks: Personal Finance News from Yahoo! Finance.

Very interesting article about credit cards - click on link above.  How are you doing with your credit cards?  Hopefully you're working on a plan to get rid of them!


February 18, 2010

Now, here's a Real Retirement Plan...

There are a lot of bogus bankers and others out there who say they have your "best interest at heart" when it comes to retirement...but we all know that this just can't be true when you look at the facts.  We know now that pensions don't really work in today's market and are subject to being raided by CEOs and other top level managers who want to use that cash for company "operating expenses".  Which is why pensions are on their way out.

Other plans such as the 401(k) can kill your American dream if you're unlucky enough to retire during a recession such as this one - in fact you may have to keep working just like today's soon-to-be-retirees are until the economy fully recovers...or at least until their 401(k) bounces back from the ashes.  But we know how the well being of our 401(k) plan is subject to the profits and well-being of other companies - (Americans are angry at the large bonuses and salary of CEOs - yet we keep handing over our money to them via investing in our 401(k)!)  The more cash companies have on hand for operations, or the higher their EPS (earnings per share), the better it is for employees and investors.  But the more cash the CEO and other top level execs take in their own pay, which is approved by the board of the company, then it means less money the company has for other operatives...and that means a worse outcome for employees and investors.  Weird huh?

But the way to retirement is simple:
  1. Pay off debts - yes all of them!
  2. Make more money
  3. Invest

Being debt free is key - imagine if you could put all of your salary in the bank?  And when you have enough built up in an emergency fund, imagine how much more money you could invest in real estate?  commercial properties?  energy contracts?  Because you dnt have a car note, no mortgage, no debt....life becomes simpler.  It may seem like a fairy tale but it is possible and the real way to retirement.  Maybe an early retirement.  Dave Ramsey has the best method of achieving a debt free lifestyle in his book Total Money Makeover, where he instructs you to pay off your small debts first and work your way up to the bigger ones.  It is called the "debt snowball" method - because as you pay off the small debts, you'll then have more cash to pay off the larger debts.

As I explain in my latest book, Black Insolvency, (which has just been picked up by Amazon.com by the way!) the wealthiest people in the United States have a small amount of debt...only about  7%...while the remaining middle class and poor people have between 20% - 70% of debt!  So if you want to be like the wealthiest people in America, well, then get rid of that debt!

And be on your way to a real retirement plan...your own!


February 11, 2010

Ready for Round 2?

I'm back everyone! - I took a little vacation from my blog for a while.  But now I'm resuming my research and writing to challenge the usual "norms", or traditional rules of personal finance, investments, and government fiscal policy.

The economy needs to recover jobs lost during the "great recession" that occured late 2008 to present.  Just about every industry lost jobs- especially the banking & financial services industry.  However, with the economy finding some stability, the banking & financial services industry is now starting to rehire professionals with no regard for the mistakes they made in contributing to the worse financial meltdown since the 1930s.

If you take a look at the job postings on Monster, Careerbuilder, or whatever - you can see the qualifications and requirements for these type of banking positions.  Below is a posting on Careerbuilder.com highlighting the strange requirements for a "Financial Advisor" at Bank of America (one of the many mega-banks that were bailed out by us taxpayers):

Essential Duties and Responsibilities:
  • Performance Hurdles: A Financial Advisor Trainee must acquire clients through personalized marketing techniques to meet minimum performance hurdles.
  • Must possess 3 or more years of sales experience with a proven record of exceeding goals.  Outbound sales experiences required.  Possess excellent communication skills, both written and verbal.  Proven relationship building and business partnering skills.

Is there a bank out there that wants to do the right thing for individuals, just because it's the right thing to do?  Without all of the commissions, sales goals, marketing techniques, and hassles that create an environment where employees compete with their coworkers for that next sale and large bonus?  Banking & financial services firms should instead create an environment where people can go to get the best financial advice for their wealth.  Unfortunately, not every bank has your best interest at heart...most likely they are concerned about their bottom line and bonuses.

The banks are gearing up for round 2...your money, retirement funds, and other assets have already lost round 1 and it's up to you to protect yourself from being pushed further from retirement.  How can you win the next fight?  Invest in other vehicles besides your 401(K)ill plan, invest in property, land, and pay off a large amount of your debt...if not all of it.  Get your wealth up and take your debt down.

Bank of America - Bad for America (video)


February 4, 2010

Create your home business tax shelter

Congress has raised our debt ceiling 5 times within the last 2 years under the Bush and Obama administration.  The US economy is struggling to recover from a "great recession" and has avoided a depression by various bailout and stimulus programs in place.

Here's the Catch 22:

The government needs to spend money to pull the economy out of recession - however, when the government "spends" it really is just borrowing money from other countries or from our entitlement programs such as social security, medicare, etc. which raises our debt ceiling that drives down the value of the dollar.  The strength of a nation's currency is dependent upon the strength of that nation's government.  So if and when our government reaches a point to where it cannot repay the debts through taxes and borrowing - our dollar will become worthless. 

One can clearly see why less Americans can retire nowadays because the value of our dollar has become so weak.  The government doesn't create any real money - it just borrows and taxes its citizens and businesses to get the cash it needs to fund wars, bailout companies, or repay the deficits it has created.

Here's how you "hide" some of your money from the government:
  • Start a small business - that so many writeoffs and advantages for an individual to have a small business in the United States.  If you're able to grow your business and employ others - then you will start to see how much money you'll be able to keep for yourself, rather than fork it over to the government.  Look at all the upcoming entrepreneurs coming to view via the internet.  There are several internet companies starting up every day!  Obama has vowed to eliminate the capital gains tax for small businesses...so this reduction of taxes for small businesses will open the door for a lot of middle class people to become a little richer.
  • Invest in a Roth IRA

"Jobs are just temporary placeholders where you can learn skills in order for you to start your own business" - Dhata Harris