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:  http://www.brightscope.com/


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 on.....do 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 money....is 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 cases....so 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 (www.standardpalletsize.com) 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.