The Law of Unintended Consequences Part 3: Something for Nothing

Expediency: the straight line between what you have and what you want

There are different degrees of expediency, ranging from earning (or borrowing from an earner) to stealing and commandeering—it all depends on how much you’re willing to exert yourself.

As we witnessed in New Orleans with Hurricane Katrina, plenty of people were willing to sit back and collect government handouts, but not willing to pack up and get out of harm’s way, even on their own two feet. They definitely got something for nothing, all right: a destroyed house, destroyed belongings, and a destroyed life. Some are STILL seeking something for nothing in New Orleans in the form of pre-prepared places and continuing benefits for Katrina evacuees, as attested to by an e-mail to the Glen Beck show—a woman wrote in to complain about FEMA rent vouchers coming to an end next February, and she was “going to have to return to New Orleans, but only if a place was ready for her.” In other words, her Houston gravy train was rolling to a stop, and she wanted a longer ride on a New Orleans one now. Multiply that times the number of other evacuees who feel such “entitlement” because it’s been handed to them all their lives, and you get a truer sense of how The Big Easy got its nickname.

To be expedient is to be human. Greed is good—the desire for more is acceptable, as long as there is some input on your part. Then, greed becomes a perk—a reward for your hard work. A recent church marquee siting here in Norfolk said: “Success before work only happens in the dictionary.” Amen, brother!

The opposite of greed is fear, and fear is what keeps people from doing things to get more. To be fearful is also to be human—if we weren’t afraid, we’d be dead from mindless risk-taking.

The best place to see all this play out is in the stock market: we place “bets” by buying shares of certain company stocks we think are going to appreciate, and we sell shares of companies who we think won’t appreciate any more. We are rewarded in two ways: one with dividends, and another with price appreciation through traders bidding up the stock. Greed will drive traders to buy the stock and bid it up through demand, while fear will make people sell the stock to avoid downside risk. The profit garnered through stock ownership is something for (nearly) nothing—all you had to do was choose to buy the stock at the current price. Make the correct bet, and a long-standing stock purchase can pay you back handsomely, as in the case of retirement investing.

Rewards also come to those who take time to study the game rules, form a strategy, and work with their minds instead of their backs. A perfect example of this is the tax code: while holding down a job and reporting your income, you can earn deductions and credits while filling out your forms. But beyond that is the thick book of the actual laws, which serve to tell us what we can and cannot do to earn money and pay taxes, and at what rate. What is not-so-widely known is that the rule makers don’t necessarily like to be subject to their own rules, so they leave a “back door” or loophole to those rules—it’s up to you to find them buried in the text.

There are risks involved with NOT doing something as well, such as leaving doors unlocked, not learning how to read and write, practicing unsafe sex, sex without birth control, and being an uninformed consumer. INaction is an action too, and will surely garner you something for nothing—most likely a whole lot of unwanted trouble.

What we commonly refer to as “rich” people have gamed the system—they’ve read the fine print and learned how to profit from something for nothing (or very little). According to Thomas Stanley, author of The Millionaire series (The Millionaire Next Door, The Millionaire Mind, and The Millionaire Woman Next Door), the best businesses to own (as confessed by millionaires themselves) are the ones that require the least personal effort: car washes and Laundromats. Property is bought, machinery installed, people hired to maintain and run, and quarters collected—TONS of them, year after year.

Truly enterprising people have made money from other people’s “as-is” castoffs—the epitome of something for nothing. To do any better would be to get paid for breathing.

Also buried within the fine print is the difference in sources of income and their different tax rates: to pay the least taxes, you need to have income from certain sources. Jeff Scheppner, author of “How to Pay Zero Taxes” comes out with what I call “my little loophole manual” for each tax year, and it clearly and concisely spells out the fine print, deciphers it into plain English, and shows you how you can take advantage of it—both personal and business codes in one volume. He puts any new code changes in an up front sectio0n, and also includes it in the appropriate “business” or “personal” section, along with an explanation of what it means and how to best use it to your advantage.

Stay-at-home housewives have learned a method of getting something for nothing by staying out of the workforce, in the areas of time with family, better cost control, better nutrition through scratch cooking and careful shopping, less work-related stress and expense, and fewer taxes through less income. They make no income through direct workplace labor, but are rewarded nonetheless through various tax breaks on their spouse’s income. The spouse himself is rewarded for having a stay-at-home wife and children through deductions and credits to income before it even gets taxed. Retirement accounts for himself and his wife enhance this even more.

Investors have a whole “something for nothing” world of their own: stock price appreciation, dividends, interest appreciation, market value appreciation through tight supply and heavy demand. The tax code rewards this by creating a whole new class of income at a much lower tax rate—PASSIVE or unearned. This is money you didn’t have to work for. Note that the less you have to get your hands dirty, the fewer taxes you’re assessed.

Regular individuals in the workplace also have “something for nothing” rewards in the tax code, but they are few and far between, and not exactly exclusive to single earners. They are usually taxed at the highest rate—ACTIVE or earned. This is money you had to work for.

Businesses also get rewarded for their risk-taking and contribution to the economic system with various write-offs. The bigger the business, the more loopholes it’s entitled to, and the lower the tax rate on profits.

Their “something for nothing” ends up being tax-free money to keep or spend however they choose, at the expense of the so-called “poor” consumer. Note that business owners work more with their heads than their hands, and get assessed the least amount of all—they are a write-off machine, and have the expenses to prove it.

The flip-side: another example of rewards from strategy is the social service system. What we commonly refer to as “poor” people have read the fine print on federal social programs, and learned how to profit from it—gaming a whole different system. The best social programs to belong to are the ones that require the least personal effort—welfare, food stamps, Medicaid, Medicare, CHIP dental programs, housing vouchers, subsidized daycare, and many more—where the reward greatly outweighs any risk. You may have to bear an illegitimate child or two, break up a family, hold a low-paying full-time job with no benefits (and no responsibilities), or maybe live in a substandard dwelling infested with rats and roaches—nothing too difficult, but those checks and benefits arrive on time, every month, for a set period of time as long as the qualifications are met. There are no tax code rewards because no taxes are paid when all is said and done.

Their “something for nothing” ends up being tax-free benefits to use as often as they want, at the expense of the so-called “rich” taxpayer—this is the Liberal Democrat preferred method of “wealth redistribution” or robbing Peter (you) to pay Paul (them).

Now that you see how we all need each other, how we each make our way in life, and certain loopholes accessible to everyone have been laid out, which path will you choose to get your something for nothing? How will you display your expediency? Either way, good things come to those who game.