August 24, 2011

Hey Feds! Printing is futile...!

Interesting article - (click here)

The Fed seeks to revive the American economy at the expense of exporting inflation to emerging and poor nations.  Is this the late 1970s and early 1980s all over again?  No wonder Gold and other commodities are reaching record high prices.  On the contrary, if our government doesn't devalue our currency (along with our standard of living) - how else can our labor pool compete when other countries are willing to work for a lot less?  Maybe QE3 will devalue our currency enough so that we can bring jobs back to the USA??  Third time's a charm?  I think this point, the Fed should just sit and allow the markets to self-correct.  Or at least allow Congress to set a long term plan that will allow businesses to get from under the clouds of uncertainty.

According to an article in the WallStJournal - the dollar has lost 95% of its purchasing power since the inception of the Fed (click here to read this article).  Today, our purchasing power is worth approximately 15 cents, given the constant dramatic increase in prices for college tuition, healthcare, food, energy, etc. 

I would not recommend to convert all of your assets to metals such as gold and silver (especially not at today's prices)...however, I recommend you work to increase your income and keep your rate of cash flow increases ahead of inflation.  Saving in this economy is futile - we must invest:
  • Invest in companies that pay high dividends
  • Invest in REITs
  • Invest in commodities
  • Learn option investment strategies that will help grow your portfolio exponentially
  • Learn how to hedge effectively
America is still a great country, and I believe it's still the "land of opportunity".  However, in a ever-increasing global marketplace, we must learn how to embrace and adapt to change.  Change creates opportunity for those who can adapt, and difficulty for those who cannot.


July 21, 2011

The New Way to Save Your Money

Unemployment is steadily between 8-9% and yet to no avail, the government keeps printing money with reckless abandon. While expanding the monetary supply is somewhat appreciative in that it diverted us from potentially another Great Depression, it also has its consequences (i.e., high gas prices and increasing costs for food, clothing, etc.). The Federal Reserve and FOMC (Federal Open Market Committee) have “created” a record amount of money while simultaneously keeping interest rates near zero. And consequently, the more money our government “creates” and put into circulation – the more worthless our money becomes. It’s a bitter pill to swallow for all…a “Catch 22” if you will.

Obviously, as the (printing) wheels of currency keep on turnin’….the paper dollars you and your family save will keep on burnin’. Think about it! How much interest are you earning to keep your dollars in savings accounts?? I imagine 90% of you will agree that you are earning less than 1% in a bank savings account…and I bet that the other 10% of you are earning less than 3% in a perhaps a CD or MMA.

Here’s an example of this governmentally induced highway robbery that’s taking place – take for instance that the average national gas price in March 2010 was 2.75/gallon – today (07/21/2011) the average national gas price is 3.78/gallon. That is an increase of 37% in one year on just the cost to fill up your gas tank. Now, hopefully most of you are smart enough to see that putting all of your money in a bank savings account that’s only earning 1% interest is foolhardy….especially when your gas bill just shot up 37% in one year. Not to mention the increase in your cost of food or just about everything else you purchase. No wonder you are constantly transferring money from your savings acct to your checking acct.

So how do I propose we save for the future? It seems almost impossible given that incomes in America are stagnant – and have been for quite a while. Most pay raises have barely touched a measly increase of 3%, while the cost of living for almost all Americans has increased about twice as much. It’s kinda tough trying to save that emergency fund, huh? And for those of you who have your emergency fund established…doesn’t it seem like you always need a little bit more to feel comfortable?

So here’s my proposal: Instead of saving your money in a savings account – diversify your cash into a self managed investment account. Not another 401K or IRA – but an account through an online brokerage (Sharebuilder, Schwab, E-trade, etc.) where you can be aggressive with your savings (and FYI – this brokerage account allows you to instantly transfer money back and forth between savings and your investment portfolio…without a penalty!). If you can save $1000 a month (more or less), it might not make sense to put the entire $1000 into a savings account. Split it up 80/20, or 60/40, or whatever you desire – and invest a portion of your “savings” into ETFs, Commodities, or REITs (Real Estate Investment Trusts), into a portfolio that you have control over. I love putting a portion of my savings in Agriculture, Energy, and REITs.

Why do I like these investments? Very simple – DIVIDENDS! There are some REITs out there that pay a 14% yield in dividends in addition to whatever capital gains you may receive. Sounds a lot better than that 1% yield at your bank account, right? If you look around you’ll find some good investments paying 5% or more in interest…this will help you pick up the pace in building your savings.

Here’s the disclaimer – this is a riskier strategy than just holding your money in your savings account. But, if you think about what I wrote in this article, isn’t investing a portion of your savings just as risky as trying to put it in an actual savings account?? Just a thought.

To get ahead – we have to think differently and creatively.


June 28, 2011

Research your financial plan....and your adviser!

For those of you who are curious about how that 401K plan of yours is doing compared to the rest of the market....

Or maybe you would like to get an update on how your financial advisor is perceived in the community....

Please see link:


June 21, 2011

Chains of Austerity (When people are pushed too far).....

Greek Flag

Don't push me, cause I'm close to the...EDGE. 
I'm trying, not to lose my...HEAD!  ha, ha, ha, HA!

This might remind some of you of a verse from a classic song "The Message" by GrandMaster Flash and the Furious Five of the 80s - but these lyrics, just like it did in the 80s, still describe the hard times experienced by certain individuals being shackled by poor living conditions and severe austerity measures of their government.  Greece is in dire need for more funds to prevent defaulting on its debt (which is plagued by runaway deficits and enormous entitlement programs) - but the European Union (EU) and the International Monetary Fund (IMF) are reluctant to issue another round of funding without additional budget cuts, decreased wages, increased taxes, and reduced benefits for Greek citizens.  The country's first round of funding was approximately 110 billion euro ( roughly $157 billion) and came with several "strings attached".

This has sparked a slew of riots by Greeks across the country.

The IMF, EU, and other bond investors are not showing mercy and forcing the country's prime minister George Papandreou to take unpopular steps in order to prevent the country from defaulting.  The stock market is showing signs of increased volatility as investors become cautious due to the possible negative effects should the country default on its debt owed to its citizens, and also foreign and domestic bond holders.

Should the people of Greece pay their debts?  Absolutely.  Can Greece afford to pay off its debts?  Absolutely not.  Currently, Greece has 10yr bonds paying a rate of 17.66% !!  With some other bonds offering a interest rate of 30%.  Tell me how can a country that is broke, pay off its debts with such ridiculous rates? 

We can take this same scenario and apply it to individuals:  How long will it take a person with $175,000 in credit card debt to pay off their credit cards at a 29% interest rate??  And they're making $40,000 a year?  Sounds impossible, right?  Exactly.  No wonder the Greeks are rioting.  I'm sure they would like to repay all of their debts - but paying back the debt at these rates is ridiculous.  But the IMF, EU, and other bond holders think that this is feasible through increased taxes, reduced wages, etcetera., etcetera.  I agree that the Greeks should repay all of their debts - but at sensible rates.  I understand that the market requires high interest rates to associate with the risk involved- but at these rates?  That's just asking for a country to default.  If I owned Greek bonds right now - I'd be happy with 8% or 9%.....because I'd have a higher probability for getting my money back with interest

Just as people with credit cards simply stop paying or declare bankruptcy - you might as well expect Greece to default on its debts.  Causing a "domino effect" with other countries following the same measures (such as Spain, Portugal, and Ireland) and simply ceasing payments on major debts.

Additionally, America will have its day of reckoning as well...our entitlement programs we've grown to love so much will come to an end in some form or fashion.  Also, education in our country is already being priced waaay to high (thanks to the Federal Reserve)....and at the rate we're going, higher education will soon be only available to the privileged who can afford it (but I wonder if those who go to college will have jobs waiting for them to repay all of the debt they've accumulated?). 

The failure and implosion of any country has been due to the expansion of its government.  Guaranteed causes of economic failure is when the government:
  1. Manipulates its own currency...
  2. Intervenes within the free markets...(buying up every mortgage to make homes "affordable")
  3. Forces people to make purchases they don't want...
  4. Heavily taxes income
  5. And the list goes any of these bullet points sound like an economy you're familiar with??

People have become too complacent with their government providing every standard of life for them.  When complacency enters - productivity exits.  And great economic powers become distant memories when they owe debts they cannot repay.  There has to be some sort of balance between making a profit and also not trying to ruthlessly take advantage of others in the name of GREED.  Because 30% interest imposed on an already debt ridden country that has no means to repay without crippling its economy - is a little greedy...because the result is that no one wins and no profits are made.  An inevitable default occurs and people lose their livelihood.  But, that's the breaks, that's the breaks (lyrics from another song called "The Breaks" by Kurtis Blow).

Learning the rules of money....the new rules of what it takes to be successful in this global economy.  Depending solely on the government or even your main employer for retirement, education, health care, is so outdated.  Depend on yourself!  Be creative!  Be persistent!  Build multiple cash flows in real estate, and own as many businesses as you can stand to maintain/manage.  It's all in our hands now, and new technologies available to us via the internet makes it easier and cheaper to start your first company.  And hopefully, we can all avoid the unfortunate position of the Greeks.


June 17, 2011

Stalemate! Nobody wins...and America loses.

Where are the jobs?  Where is the economic recovery?  Why has so much money been spent by the Federal Reserve over the past 3 years and what has the money been spent on?  AND why can't the American people know about the hidden details about where our money has gone?  (i.e., "bailouts", QE1 and QE2 programs?)

Doesn't it seem strange that the Democrats keep saying that "the economic recovery is underway and there's a wealthy group of Americans that need to be "patriotic" in order to keep the country's debt level and deficit in check....then the jobs will eventually come."  Or on the contrary, isn't it funny how the Republicans state how bad the economy is and how government spending is running amuck (as if that's the reason for the lack of jobs - mind you, this recession we're in started under their watch)!  "Lower taxes and control government spending, they say....then the jobs will eventually come."

Everyone is saying something - no one is doing something (where are the Nike people when you need them?? LOL).  Sounds to me that whenever Congress tries to point fingers at the other party...nothing gets done...and America suffers the consequences.  Why do I think there's a political stalemate?  Because American corporations are operating quite sufficiently...and profitably.  They could hire and expand in a second...but American politics are in a stalemate...and currently unpredictable.  So our corporations are taking a seat on the sidelines to see what happens.

Republicans want the American people to view the economy in a bad state...and want to pinpoint Obama's administration as the culprit due to the runaway government spending that's going on.  This adds fuel to their fire and gives them reason to delay the vote on raising the debt ceiling without severe austerity measures attached.  So keeping Americans in the dark by selling them on the economy being BAD gives them fuel to get their best candidate in the White House - and kick Obama out.  So why would Republicans want to create jobs and have a strong economy - when they know a strong economy supports a case for 4 more years of Obama's regime?

Democrats want the American people to view the economy in a good state...and want to pinpoint that too many tax cuts are already given to the wealthiest individuals and corporations.  And the Dems are also trying to paint the Republicans as the evil party preventing the economy from gaining a sound footing because they supposedly only "care about rich people" and they "want old people to die".  Notwithstanding, selling America that we have a strong economy makes a strong case for keeping the President in place for another term.

BUT, as both parties conjure up highly intelligent and educated reasons for not taking action and accusing the other party as the hinderance - America loses!

Take it upon yourself to take ACTION...even if Congress doesn't.  Reinvent yourself.  Create your own job if need be...or learn a new trade so that you can produce an income to support you and your family.  A good thing about America is that we have a few more freedoms than the rest of the world - and we don't have to sit around waiting for politicians to decide our future for us!  We can take the initiative and figure out the future ourselves.


June 10, 2011

Restore the free markets! (Get out the way Government)

What happened to the bailout programs that were supposed to put the economy back on solid footing? Even after trillions of dollars spent – the unemployment rate is still edging higher, consumer confidence is low, and the threat of a “repeat recession” still looms. Have we put too much faith in our government? Absolutely. The market can usually correct itself over time without any assistance from the government, but when the government intervenes – it can sometimes do more harm than good. And given that the market has been edging consistently downward lately…it is clearly evident that going deeper into debt and throwing more money (paper) at the problem isn’t helping. Therefore, raising the debt ceiling without counterbalancing efforts to dramatically reduce spending would be insane.

But where did all of this “big government” sentiment come from? How did we get to the point where we allow our government to expand in the most important sectors of the economy? Our government is in healthcare (Medicare, Medicaid, & possibly “Obamacare”), mortgages (Fannie Mae and Freddie Mac), education (student loans), retirement (social security), and now the private sector (GM, Chrysler, private banks, etc).

Our current path is unsustainable and not the intent our founding fathers had for this country. America has grossly become a two-tier economy…where a small percentage of the country retains a significant portion of the wealth created. While the majority percentage of the country fights tooth and nail to make enough money to sustain their living standards…and whatever we can’t afford to pay…we vote to have government pay for it. We want our homes more affordable, we want lower taxes, we want loans for education, and we want someone to pay our healthcare and retirement expenses.  But who will pay for this?  Where does the money come from?  We eventually pay through inflation, taxes, and debt.  America is on the verge of imploding.

But traditionally, America has always been a country of small government and our “let freedom ring” mantra helped to establish the premise that propelled this country’s greatness. At one time we built cars, roads, bridges, buildings, sewer systems, etc. and sold our products (refrigerators, shoes, cars, technology, etc.) to the rest of the world. In other words, people worked hard and depended on themselves, family, community, and their employer for their current and future needs. Historically, it was normal to work for only one or two employers for your entire life…and relying on their pension plan to cover your living expenses and medical care once you were no longer fit to work or retired.

As of late, however, the Feds have been manipulating the market and the economy by printing money and also keeping interest rates artificially low in an unsuccesful attempt in reviving the economy.  Unfortunately, they’re inadvertently causing unemployment to rise, forcing businesses to hoard cash, and causing inflation bubbles to increase in size. How difficult it is for us who only have a 401K plan for retirement to see our portfolio constantly go up and down! Nevertheless, severe austerity measures, like those seen in other parts of the world, will probably come here to roost as a result of our “too big to fail” government.

My words to our government:

Get out the way government and let the people (i.e., the free markets) restore the economy! We’ll lead and you’ll follow....not the other way around!

Here's an interesting article:  Interesting article...


June 2, 2011

Abolish the FED!

A very interesting video explaining very simply the devalue of our monetary system, deceptiveness, and fraudulent activity sold to the American public.  If you watch the video in its entirety, one can clearly see and interpret the current deception fabricated by our government today.  It's no secret as to why we're currently facing a national default as Congress squabbles over the 14+ trillion dollar debt ceiling.

June 1, 2011

If you need another reason to become an entrepreneur - please see the article below.  Risk = Reward in most while you're working that day job, please be sure to take a chance on yourself and start a business.  You have a better chance of success than you do in playing the lottery! I'm taking a chance on myself by working hard to build up passive income producing websites, such as the one I'm currently working on ( to increase my wealth.

Take a few business courses and/or seminars...but if you can't afford this...YouTube offers several learning videos for FREE.  No excuses - get out there and at least TRY to be successful.


May 24, 2011

Gifts for the High School Graduate

Below is the link to an article for those of you who are looking for the best ways to give to your high school graduate.  This article provides one of the best alternatives to give to your graduate (or someone else's graduate) and avoid heavy taxation on financial gifts.


May 17, 2011

Q: Where did all of your money go?

A: Taxes and Inflation

Americans are constantly struggling to make ends meet and to scrap together whatever they can to have some form of retirement if/when they’ll be able to retire. Retirement is possible; however, one must know what to do with one’s money in order to retire one day. One must be organized and have a plan for the future and not be ashamed to ask for help. Financial planning is a dynamic challenge – and here are a few of my thoughts for being successful:

DO have a 401K:

Most of you who religiously read my blogs (thank you!) know that I’m not a big supporter of 401K plans. Mainly, because I know that these 401K plans were never intended to be actual retirement plans…they were initially intended for high-level corporate executives to defer their compensation until a later date so that they could avoid high taxes. I’m also not a big supporter of 401K plans because people are way too dependent on a “retirement plan” that goes up and down with the economy (just think of all of the grandmas and grandpas that had to keep working and could not retire in 2008 as planned because they lost 30-40% of their portfolio in the recent recession).

Nonetheless, I think it’s still a good idea to have a 401K plan as a supplement to a real retirement plan…which I will discuss later. And also – 401K plans currently offer us the tax shield that our CEOs have (although it works a little better for them).

DO have a Roth IRA:

These financial instruments are definitely nice to have in your retirement portfolio – mostly because any contributions you put forward will invest and grow tax free (unless Congress changes the tax laws, of course). There is a limit to how much you can contribute, but unlike the traditional IRA, there is no mandatory withdrawal once you reach 70.5yrs. However, the Roth IRA does have income restrictions.

DO have your own investment account – outside of your employer:

If you noticed – there are several online discount brokerages popping up every year. Charles Schwab, OptionsXpress, Sharebuilder, Scottrade, TD Ameritrade, etc. Putting aside some of your discretionary income for an Index Fund or ETF is a great idea – plus you’ll learn a thing or two about investing.

DO be debt free:

Enough said.

DO have a real retirement plan:

What is a real retirement plan? It encompasses all of the above, but also adds an element of entrepreneurship. But, hey if you don’t want to be an entrepreneur – then be sure to own a few small businesses and have people working for you. This is the most important element to your retirement plan – because it will help you generate cash flow.

For example, do you know how much money you will need in retirement? Do you know what your tax bracket will be when you retire? What will your expenses be? Will you be single, divorced, widowed, or married? Will you be in good health? Will you have a mortgage? Unfortunately, we can’t know all of the answers to these types of questions – which is why it’s almost impossible to “save” our way to retirement via a 401K or any other investment vehicle (unless, of course, you’re putting away the maximum amount). But for those of us who are not contributing the maximum - we can still be prepared for any of these situations if we have cash flow in the form of a business or income-producing property (licensing, real-estate, patents, etc).

If taxes increase – simply increase the cost of your product/service to offset any tax increases Congress will set in place. If inflation skyrockets – simply increase the price for your product/service. Entrepreneurship gives us our own cash printing machine and possibly the best results for a very, very, comfortable retirement.


May 10, 2011

Having a financial planner might be a good thing for you.....

Times are hard for a lot of people – and it can be even harder when you are working 2 jobs, or maybe working a full-time job and attending school part-time, while maintaining your household and/or raising a family (or soon to begin a family). On top of all of this – there’s a need to manage your finances as well to be sure that you’re on track financially. Have you planned for retirement? Are you putting your money towards the best investments? How does school interrupt your financial goals? Or a divorce? Or perhaps a new baby?

Just as our lives constantly change – our financial goals constantly change as well. Whenever there’s a new addition to the family, a divorce, a marriage, etc. – our finances will always need maintenance. As you grow wiser, it makes sense to have a professional review your financial situation and suggest where there might be areas for improvement…or perhaps just give you the reassurance that everything is going the way you want it to go.

Having a feeling of assurance – or feeling that you need to “get serious about money” gives us a direction of where we’re headed. That way we won’t be surprised when we “arrive”.


May 4, 2011

5 Easy Steps To Becoming A Millionaire -

5 Easy Steps To Becoming A Millionaire -

An excerpt from one of my most favorite books on becoming wealthy....definitely a good read for those who aim to be wealthy.


April 29, 2011

America agrees to lower its currency…and here’s my tirade.

While today most of you are distracted by the Royal Wedding, Obama’s birth certificate, and all other nonsense that has absolutely nothing to do with yourself or your personal financial well-being...notwithstanding, I would think more of you should be concerned about how fast your dollar power is decreasing and why. Or perhaps you should be concerned about why 50% of Americans will not retire and about what choices do you need to make today – about how you can stay out of this statistic…instead of focusing on the latest people entertainment news or the NFL draft.

For those of you that continued reading…and did not immediately get sidetracked and google “The Royal Wedding” or “NFL Draft” because it’s mentioned it in this blog…Read On.

Our government agreed to purposely devalue the dollar’s strength after signing an agreement called the “Plaza Accord” (click here to see document) back in 1985. After a 51% decline in the value of the dollar, Congress tried to quickly resolve this rapid decline of our dollar’s value two years later by signing the “Louvre Accord” in 1987. However, this failed to work after 8 months of the agreement being signed due to the fact that some countries kept raising their interest rates, raised tariffs on trade, etc... Eventually, we get to where we are today…with floating interest rates….where the global market determines the “value” of a currency. This fluctuating rate (or fluctuating dollar value) is determined by a few factors – but the main factor is the market’s assessment of a nation’s debt levels and their ability to repay those debts. As you may know – the US is the largest debtor. And as we constantly push up our debt ceiling – it becomes increasingly unlikely that we are capable of repaying our debts…let alone just paying the interest payments on it. So as the US debts increase – the global market becomes increasingly wary of loaning us more money…without a higher interest payment and/or strings attached of course. Look at the interest rates on Greece’s debt…how about Portugal…Spain…Yugoslavia…?

Have you ever noticed how hard it is for you to save up those extra pennies of yours? How difficult it is to store away just 10% of your pre-taxed income in some type of retirement (or advanced savings) plan? Or maybe you’ve noticed how expensive education has become? Or how you can’t get out of that revolving 20% interest rate on your credit card debt? What about the reasons why can’t you pay off that car note in less than 5, 6, 7, or 8 years?

What can you do to protect yourself? How do you avoid constantly losing money in your 401k, IRA, 529, 403b, Roth, etc. every time the stock market crashes?  You must diversify and have multiple streams of income ( I know, for those of you who read my blogs, that I sound  like a broken record player or a skipping cd - but it's true!).  Work hard, make money, and invest it into land, real-estate, commodities, and yes, put a little in the stock market too.  This completes your portfolio of investments - one can't have all his/her eggs in one why invest in ONLY the stock market via your employer-sponsored retirement plan and not something else?  Why not own some physical real estate property as well?  Why not own some physical gold and silver coins that you can keep in a vault just in case something happens?  And, last but not least, also add entrepreneurship to your be successful nowadays, Americans need to be able to sell and have their own business.  Or at the very least, have a part-time job in addition to your full time day job.

Less dependence on the government will make America a stronger country...!  We don't necessarily need our government for retirement or even for healthcare for that matter.  It's nice to have a government supplement our productivity - but I believe most people are capable to be self-efficient.


April 24, 2011

Gas prices skyrocket...and so does speculation.

Have you noticed the big changes at the pump?  Or a decrease in your discretionary income because the cost for a gallon of gasoline is going up?  Some speculators say that we can expect to see $5 - $6/gallon this summer given that it is "driving season" and also hurricane season.  Some say prices are going up due to the Feds are pumping printing billions of dollars to prop up our economy to weaken the dollar and drive prices up.  Or maybe it's because of a war within a small country in Africa, that supplies less than 2% of the world's oil supply?  While these situations might affect the price of oil somewhat - I don't believe that we will see anything close to $5/gallon for gas...or at least not for long...and here are my reasons why:

  1.  There is ample supply of oil on the market. 
Economics 101 tells us that whenever supply outpaces demand, there will be a significant drop in prices to reflect the high supply and low demand.  Because we have a lot of oil supply, the current price or any future speculative price of $5/gallon must quickly decrease.  In 2008, people became frantic when gas hit $4/gallon and started trading their SUVs and trucks in for very expensive hybrids and the Toyota Prius.  Obviously, there wasn't a "supply" issue then, and there isn't one now.  How quickly we forget!  For those of you who remember - "they" predicted the same $5/gallon for gas then in 2008, just like they're doing now.  In 2009, average cost for a gallon of gas fell from $4/gallon to just $1.85/gallon.

   2.  Unemployment is still too high and the US economy is still weak

The US economy is the largest in the world and consumes the most oil in the world.  In other words, we're the oil producer's #1 customer.  If our economy is in a recession, which means we're not buying as much oil, then oil producers are not happy.  They want our economy strong and unemployment low.  When the US is strong and people are driving to work everyday - the more gas/oil we consume.  Typically, when oil reaches $130/barrel, the US economy is heading for a recession because things become too expensive for us at this level.  The cost of food, utilities, clothing, and everything else skyrockets as gas prices escalates...causing our economy to tumble.  As of this writing - oil prices are currently at $112/barrel.

   3.  Financial speculation/Derivatives

Financial speculation tends to create fear and/or greed (or "noise") in the markets and usually gets the masses frantic enough to do stupid things in reaction to this fear and greed.  For example, consider in 2005-2007 when people were jumping to get into real estate by any means necessary (even if they had no money) because they thought "the prices are just going to go higher".  Only to be stuck in foreclosure, bankruptcy, or constantly fighting adjustable rates in 2008.  Remember how quick financing was available back then?  But today, it's very difficult to get financing for anything in real estate.

The same speculation is going on within the oil markets to some degree...where you have investors (institutional and individual) running to invest in oil at these high prices because "it's only going to go higher".  Timing is everything, folks.  Buying commodities or stocks just because the price is going up is ridiculous.  Warren Buffet said it best - "Buy when people are cautious...sell when people are greedy." 

These are my reasons as to why the current high gas prices aren't sustainable because of the ample supply, the current unemployment rate, and just plain old speculation in the markets. So don't get too panicky because of the current prices just yet.  Do what you can to survive....carpool, telecommute, walk, ride a bike, etc.  Prices will soon turn for the better.


April 19, 2011

April 17, 2011

How should we save for our kid's college?

A couple of weeks ago, Mysha, my wife, asks me about what would be the best route to pay for our daughter's college expenses.  Considering that college tuition has been consistently rising twice the rate of inflation, by the time our kid reaches college age, it might be a real challenge for her to fund her own education...even with scholarships, pell grants, and whatever else she manages to scrap together on her own. 
She asked me if I thought that getting a 529 plan would be a good idea and/or if we should start now to put money away for her education....considering that we probably would have too much income ourselves for her to qualify for enough money in the form of grants that would put a dent in her tuition.  Plus, scholarships today are offering less money and most only cover books or 1/3 of the cost to attend college.

So what do we do?  What would the average millinoaire next door do?  Well, I like 529 plans specifically for the reason that my contributions are probably state tax-free and my investments are able to grow tax free.  This allows me to shield some of my income from Uncle Sam - and use the money for my daugther's tuition.  Not bad!

At the same time, 529 plans are also tied to the stock market - which means that they're at risk when there are downturns or detrimental events in the global market.  This is a big deal considering that having a $100K 529 plan could easily lose just about everything you saved for your little one's college tuition.  Just this past recession has left individuals with a huge loss in their college tuition and retirement plans.

Nevertheless, I'm more in favor of investing in my own company and/or real estate instead of giving money to Wall Street via a 529 plan and hope that they do the right thing by me so that I'll have funds for my daughter's college.  I can provide a constant stream of income for my daughter if I'm even moderately successful as an entrepreneur or real estate investor. 

It's a risky strategy - but so is solely relying on the stock market to fund your college or retirement.  Investing my money directly into my own company for growth and expansion between now and when my kid goes to college should provide a good return.  Also, buying a few rental properties would also provide some constant flow of income for my daughter while she attends school, so that she doesn't have to worry about how she's going to finance her education.

Do I take a risk on myself and finance my daughter's education?  Or do I let the bankers on Wall Street put my money at risk?  I think I'll rely on myself.


April 10, 2011

Business Rx: Advice from seasoned entrepreneurs - The Washington Post

Business Rx: Advice from seasoned entrepreneurs - The Washington Post: "Business Rx: Advice from seasoned entrepreneurs"

Here's an article that I thought was very interesting.

Entrepreneurship is necessary in your income portfolio. Having multiple streams of income is vital for anyone seeking to retire early and live comfortably in their "golden years". Here's some advice from the "pros" in getting started and how to stay in business.


April 6, 2011

Gold, silver futures rise on inflation fears Metals Stocks - MarketWatch

Gold, silver futures rise on inflation fears Metals Stocks - MarketWatch: "Gold gains, silver up 2% on inflation fears Silver settles at 31-year high" Interesting article... The Feds printing money causes the dollar t0 depreciate, not to mention our government incessant spending and our increasing deficits also causes the global market to lose "faith" in our ability to repay our debts. No wonder metals are seeing new highs!  But eventually this "bubble" will come back down to earth....


April 4, 2011

Just a quick thought of mine...

Just a quick thought of mine….

I’m still a strong advocate for introducing commodity indices to your portfolio in the coming years ahead…in addition to allocating at least 5-10% of your wealth to physical commodities (i.e., gold and silver coins) to have in your possession just in case. The way the Feds are debasing our currency is detrimental to our financial well-being long term.  What I find interesting is during the down-turn we have several individuals rushing to the “safety” of higher education..... Most of these students are a direct product of the recession, meaning they’ve been laid off, or they’re underemployed and need to increase their skills in hopes of making more money. Unfortunately, these individuals are also desperate for loans to fund their educational aspirations – even at a time when tuition is steadily increasing at twice the rate of inflation.

People considering taking out a loan for higher education should ask these questions: Is it worth going to college if I have to take out a large amount of student loans – at a time when unemployment is high? What is the likelihood that I’ll graduate with a job in hand? Are these jobs being currently offered in my city or state? Will I have to move to the city or state offering the jobs? What other alternatives are there besides taking on debt that I’ll have to repay back?

There’s nothing worse to a country and a community that has college graduates who can’t find a job – therefore, becoming somewhat unemployable as their skill set wanes.

We just got out of the mortgage mess that was a result of failures within the private and public sectors and also the Feds guaranteeing every mortgage signed over to some people that should’ve never been anywhere near a house in the first place. Remember when government sponsored entities (GSE) like Fannie Mae and Freddie Mac failed the American people and needed to be bailed out??? I can see the potential for this to also happen in the educational industry – where you have several individuals seeking education and need loans for education and once again, another GSE called Sallie Mae (although they claim to be a private enterprise now) is in place buying up all of the student loans out there. Sallie Mae just purchased $27Billion of Federal student loans from Citigroup in 2010. Déjà vu?


January 7, 2011

Show ME the money…

What’s all of this nonsense being debated in Congress about the best way to revive the US economy? If 70% of our economy is driven by consumer spending – then why not give bailout money and tax cuts directly to the consumers??

So far – Congress has given taxpayer money directly to the major banks and big businesses in an effort to either increase lending for consumers/small businesses and to spur employment….or maybe to provide money for bonuses as a “thank you” to the major banks for putting them in office (haha).

But if this money goes directly to the consumers – perhaps the economy wouldn’t take so long to rebound. Now I am aware that the current debt levels of our country are unsustainable, and (logically speaking) there probably should be tax increases AND a severe reduction in government spending to get the debt of this country under control. But if logic were to take hold – the economy would almost certainly reach a downward spiral, which would guarantee a quick replacement of certain politicians currently in office.

Today, our GDP is approximately $14 trillion, but our debts equate to about $13.95 trillion! To better understand this - imagine a family household with an annual income of $40,000…and imagine this same household has $40,000 in credit card debt. How long do you think it will take them to pay this debt off when they’re paying utilities, groceries, student loans and other living expenses? Most families would cut spending, reduce luxuries, and find ways to increase income to solve the debt problem. But our Congress is currently discussing ways to increase our debt ceiling so that government spending can continue! The debt ceiling has been raised at least 10 times under the Bush and Obama administrations. Uh, why do we have a “ceiling” if we keep raising it?!?

Surprisingly, some people still have total faith that the government will take care of them. How much of our retirement has been eroded by the printing presses of the Federal Reserve? How broken and underfunded is our social “security” system?

A country’s currency is only as strong as its government. If the government defaults on its’ debt – then the currency of that government becomes worthless. Do your research – governments have failed since history began. Did the people of Zimbabwe have as much faith in their government as Americans currently do in their government? What about the people of Greece? Yugoslavia? France? Will our fate be similar to these countries?

Nevertheless, there is still ample time for you to get your financial house in order regardless of what Congress does by “downsizing” your American dream.

1. Find ways to increase your income by picking up a part-time job (as the government keeps printing money – 1 job may not be sufficient anymore). Think entrepreneurially!

2. Reduce the amount of debt you owe to others, such as your car note, credit cards, student loans, mortgage, etc.

3. Invest a portion of your dollars into commodities like gold, silver, oil, wheat, corn, etc.

4. Invest in small businesses; and if possible, own a few small businesses

Be in the winning category – be productive and start now to change your financial footing so that you’re more in control of your financial future. There’s a saying that goes “don’t put all of your eggs in one basket”….so do not solely depend on the government and/or family members to save you when it comes to your finances. It can’t hurt to get off your butt and try to stand on your own feet.

It seems as if the more money you make – more money is given to you…or so I’ve been told. Maybe that’s why they say the rich get richer…??