In this time of tight budgets and coming holidays, I thought I'd rerun this article.
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Fresh fish or canned? Fresh liver or frozen? What about that ground chicken and turkey meat in the freezer case? Sometimes it’s enough to derail your shopping cart.
To Google I went, and I found the following information on a website:
Comparing canned/frozen meats vs. fresh meats: To figure the cost of meat per serving, divide the price per pound by the number of servings one pound will yield. A 3-ounce portion of cooked lean meat is a serving. Go by the following in deciding how many 3-ounce servings you can get from various cuts of meat, fish, and poultry.
· Lean, boneless meat: Extra-lean ground beef, liver, fish fillet, lean boneless roast, and ham and canned meats = 4 to 5 servings per pound.
· Small bone-in meat: Such as chuck, round and rump roast, turkey and chicken breast, stew beef = 3 to 3.5 servings per pound.
· Large bone-in meat: Boston Butt (pork) roast, pork chops, whole chicken and turkey, drum sticks, thighs, whole or ham halves = 2 to 2.5 servings per pound.
· Bony meat: Spareribs, pigs feet, ham hocks and chicken wings = 1 to 1.5 servings per pound. (Now you see why these meats are so cheap--they yield more waste and less actual meat per pound than boneless cuts--not a bargain at all)
Calculate the cost per serving of the canned or frozen meats, and compare it with that of fresh meat, fish, and poultry. The canned or frozen may cost less per serving than the fresh since there is usually no waste in the canned product—however, you may unknowingly be paying a premium for the container it’s packed in (such as plastic chicken liver buckets). Canned fish, for example, is definitely cheaper than fresh unless you fish your own.
One disadvantage of canned meats is the high sodium content. Since the majority of these meats are canned in brine, rinsing the meat in a colander may remove some (but not all) of it. Boiling may remove more, but won’t do much for the meat’s appearance or taste. Perhaps you can compensate for the extra sodium by increasing your potassium intake to offset it—see your doctor about this first, as dangers exist with excess amounts of any nutrient.
UPDATE: Another disadvantage of canned meats is the use of BPA in can liners. Over time, BPA leaches out into the canned food, making it an effective means of poisoning you. What does BPA do to you? Well, it's a known hormone disruptor for one thing--it displaces your natural hormones, and this is especially bad for diabetics (insulin is a hormone), thyroid patients (thyroids produce hormones for the brain), and women with fertility issues (estrogen is a hormone). For another, it's been linked to cancers and other serious diseases.
Canned foods are available without BPA in the liner--check the label to see if the product is BPA-free.
As for false economies when it comes to meat, I’d like to share one of my most controversial favorites—the one that gets me the most hate-mail: carcass meats like whole chickens and whole turkeys. I’ve been preaching about the inefficiencies of whole-carcass meats for some time, such as the cost per pound when the carcass is frozen and filled with ice (which adds weight), and the amount of actual usable meat compared to the amount of bone, fat, and other waste.
Bone-and-broth devotees will write me and say how wrong I am about avoiding buying bone-filled meats, because you supposedly can’t make gelatin for soups and stews without boiling bones, and they state how much healthier those soups and stews are with the gelatin. I’m here to inform you that I, too, make gelatin without a bone in sight—you don’t need bones at all to do it. Meat drippings from browning, broiling, or roasting are all you need—drain the drippings into a bowl and refrigerate overnight, so the fat can rise to the top and harden, leaving pristine gelatin underneath it. The fat layer can be easily removed intact or mostly so, leaving the same gelatin you so fondly crave.
I do this with regularity—I make my own cat food, and the drippings from the meat I brown get strained into a bowl for overnight refrigeration. The next batch of cat food I make after that automatically has a bowl of fat-topped gelatin waiting for it in the fridge—I just remove the top fat layer, and add the underlying gelatin to my food processor, along with the rest of the recipe ingredients. I’ve never used any kind of bone for this, and have all the gelatin I could ever use just by saving my meat drippings and refrigerating them overnight. If you need gelatin sooner than the next day, cook your meat early in the day and refrigerate those drippings NOW—the earlier you can get them into the fridge, the sooner you’ll have evening gelatin. Placing the bowl in the back of the fridge helps cool it down faster.
Rubber chicken devotees will also e-assault me with their stories of how many ways they were able to stretch a carcass after most of the usable meat was already eaten, and again, this points to the waste issue: after you’ve made casseroles, soups, stews, gravies, and gelatins out of your poor bird, what’s left besides WASTE? You paid for those bones, that fat, and that cartilage, and at a per-pound price too. Waste is waste, and if you’re throwing anything at all away when you’re done, it’s waste. If you aren’t grinding those bones up into calcium for the garden, then it’s waste—I can’t think of another way to use bones, other than possibly for a kid’s science or art project.
I leave that particular waste at the grocery store, letting them deal with it instead. I buy (and continue to buy) boneless and 100% usable cuts of meat, and get my gelatin too—no bones about it.
If you find boneless cuts too expensive for daily feeding (and many of my hate-mail writers do), then learn the fine art of price-per-serving and portion control. The Food Guide Pyramid says we only need 3 oz. of meat twice a day, so multiply the number of people you’re feeding times 3 oz., and you get the amount of meat you actually need for your dish—too many people think a whole “family size” package is the norm for a family meal, and it’s meat overkill for many of us. Too many people are guilty of eating more than their fair 3 oz. share of meat at a meal, too, and this is the ultimate waste—right into your toilet! A 1-lb. package of hamburger, before cooking, yields 16 oz., or 5 1/3 raw servings. When cooked, it yields somewhat less, due to the meat/fat percentage. However, this can be remedied by adding reconstituted TVP to the meat, using beans to add protein and fiber, or a handful of nuts, a cup of cheese, a scrambled egg or two, or tofu. The point is we consume way too much meat in one sitting, and our cholesterol profiles are proof of that. Getting a tighter rein on our meat expenditures and portions will go a long way toward minimizing waste, possibly eliminating it altogether.
Avoid the false economies of rubber chicken and bones for gelatin. Instead of buying a whole bird to ultimately make your soups, try using only a portion of that boneless meat family pack, subdividing and freezing the rest. I find a cut-up single boneless chicken breast, boneless beef rib, or boneless pork chop more than adequate for a pot of soup.
For more information on cheaper eating in general, click here. For information on cheaper alternatives to meat, click here.
Thursday, October 30, 2008
Wednesday, October 22, 2008
Updated: The Law of Unintended Consequences Part III—Something for Nothing (Really L-O-N-G)
Originally, this was an "unintended consequences" trilogy--Part I, Part II, and Part III. Part III seemed closest to what I wanted to say, but needed some updating.
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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. 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 Schnepper, 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 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, but how much will this game cost you in the end?
A vote for Obama, or Mr. Expediency himself, may garner you more in immediate benefits, but those benefits will cost you in freedoms. The salary cap on success has already been implemented for the banking industry, and the wage floor for the rest of us has already been set by the minimum wage—what happens to you in the middle is your choice, and the wrong choice could corner you into a box you don’t want to be in. Regulation and red tape, for example, could set the sides of your box to close in on you. You may not ever go to bed hungry, but you may wind up having to go to bed by 6 p.m. due to some new federal curfew. You may also find yourself signed up for military service or crop-picking when you try to sign up for unemployment or those welfare benefits. You may also find yourself with fewer choices about how and where to educate yourself and your family, what and where you eat, where and when you get health care treatment, and more.
Glenn Beck once told his viewers about how the Big Boys on Capitol Hill are reading about the Republic of Weimar—why is this important, you ask? Because Weimar was obliterated by the citizens themselves simply by opting for something for nothing, and the Nazis gladly obliged. Weimarians gladly surrendered their freedom and autonomy for expediency in the name of immediate benefits.
Guess what’s coming OUR way? The Constitution is already suspended, and had been since 1933—FDR declared a national emergency on March 9 of that year, and it was never called off. Since then, every president has added his own little twist and contribution to continue the erosion of our freedoms, slowly and slyly, right up to the audacities of Dick Cheney and his “shadow cabinet” in recent years. The Patriot Act is the latest example of how we’re being exploited by politicians, and the more power-hungry and paranoid, the more exploitation goes on. Obama himself is not the one I fear, but rather his party’s leadership—the ever power-starved Nancy Pelosi and Harry Reid. They’re more interested in saving the planet than working for the people who live on it. Oh, and let’s not forget Hillary, who wants to manage our health care into a huge something-for-nothing oblivion over a lousy 13% of uninsured people, and she’ll get her chance through Obama’s election.
We’re already monitored nine ways from Sunday, and they already tax us nine more ways from Sunday, so what more could these people want? More—whatever they can get, however they can get it. If it were possible, they would own us at he DNA level--give them time, and it will happen.
You still have one shred of freedom left, even if it is an illusion: you can vote down the expediency. Your electronic voting machine may be rigged, you may suddenly be rendered ineligible to vote, your voting place may be moved at the last minute, and you may be out-numbered by dead people, dogs, made-up people, illegal aliens, and people voting twice because of multiple residences. Your ballot choices may be between a giant douche and a turd sandwich, but you have to try to defend yourself—even if it means voting out every single incumbent on the ballot, no matter how lowly the office, and no matter how much you like him or her, even going so far as to write in Joe the Plumber for president. Take back your freedoms.
Revolutions always start small, and the pen is mightier than the sword. Use your pen effectively at the ballot box. If a bunch of farmers can do battle against the British and French, we can do so against a rampant infestation of berserk Congress-critters.
______________________________________________________
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. 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 Schnepper, 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 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, but how much will this game cost you in the end?
A vote for Obama, or Mr. Expediency himself, may garner you more in immediate benefits, but those benefits will cost you in freedoms. The salary cap on success has already been implemented for the banking industry, and the wage floor for the rest of us has already been set by the minimum wage—what happens to you in the middle is your choice, and the wrong choice could corner you into a box you don’t want to be in. Regulation and red tape, for example, could set the sides of your box to close in on you. You may not ever go to bed hungry, but you may wind up having to go to bed by 6 p.m. due to some new federal curfew. You may also find yourself signed up for military service or crop-picking when you try to sign up for unemployment or those welfare benefits. You may also find yourself with fewer choices about how and where to educate yourself and your family, what and where you eat, where and when you get health care treatment, and more.
Glenn Beck once told his viewers about how the Big Boys on Capitol Hill are reading about the Republic of Weimar—why is this important, you ask? Because Weimar was obliterated by the citizens themselves simply by opting for something for nothing, and the Nazis gladly obliged. Weimarians gladly surrendered their freedom and autonomy for expediency in the name of immediate benefits.
Guess what’s coming OUR way? The Constitution is already suspended, and had been since 1933—FDR declared a national emergency on March 9 of that year, and it was never called off. Since then, every president has added his own little twist and contribution to continue the erosion of our freedoms, slowly and slyly, right up to the audacities of Dick Cheney and his “shadow cabinet” in recent years. The Patriot Act is the latest example of how we’re being exploited by politicians, and the more power-hungry and paranoid, the more exploitation goes on. Obama himself is not the one I fear, but rather his party’s leadership—the ever power-starved Nancy Pelosi and Harry Reid. They’re more interested in saving the planet than working for the people who live on it. Oh, and let’s not forget Hillary, who wants to manage our health care into a huge something-for-nothing oblivion over a lousy 13% of uninsured people, and she’ll get her chance through Obama’s election.
We’re already monitored nine ways from Sunday, and they already tax us nine more ways from Sunday, so what more could these people want? More—whatever they can get, however they can get it. If it were possible, they would own us at he DNA level--give them time, and it will happen.
You still have one shred of freedom left, even if it is an illusion: you can vote down the expediency. Your electronic voting machine may be rigged, you may suddenly be rendered ineligible to vote, your voting place may be moved at the last minute, and you may be out-numbered by dead people, dogs, made-up people, illegal aliens, and people voting twice because of multiple residences. Your ballot choices may be between a giant douche and a turd sandwich, but you have to try to defend yourself—even if it means voting out every single incumbent on the ballot, no matter how lowly the office, and no matter how much you like him or her, even going so far as to write in Joe the Plumber for president. Take back your freedoms.
Revolutions always start small, and the pen is mightier than the sword. Use your pen effectively at the ballot box. If a bunch of farmers can do battle against the British and French, we can do so against a rampant infestation of berserk Congress-critters.
Wednesday, October 15, 2008
Updated: Timeless Moves You Can Make to Maximize Your Future Earnings and/or Lessen Taxes
While this is not an exhaustive, complete array of the tax strategy possibilities, it is a small compilation of effective maneuvers available to the stay-at-home spouse, employee, or small-time entrepreneur. These are NOT limited to the 2008 tax year, but good any time.
The obvious:
· Have kids (God’s little tax shelters).
· Open IRAs, 401(k) Accounts, Education Savings Accounts, Health Savings Accounts, Flexible Spending Accounts, and any other savings accounts that will garner you a tax credit/deduction. Accounts in children’s names will not garner YOU a credit/deduction—only them, and against any income they may receive over a certain limit (it changes annually—check the IRS website for specific $$ information).
· Be frugal…be very frugal. Learn to live on one income, avoiding the dreaded AMT trigger and marriage penalty.
·Live in Washington, shop in Oregon—and any other advantageous arrangement such as this one. Washington State has no income tax, and Oregon has no sales tax. Other useful arrangements may include Texas/Mexico (some taxes, but still very low cost) and northern states/Canada (don’t know the details, but someone will fill me in, I’m sure). Other states with no income tax are: South Dakota, Wyoming, Tennessee, Florida, Texas, New Hampshire.
· Negotiate, negotiate, negotiate! Employment contracts, termination agreements, and lateral moves to other companies are all ways to add to your bottom line. Become a “freelancer” in your company and learn to negotiate for more $$ when you deserve it. With the new economy, we all have to become our own freelancers and negotiators—we have to sharpen our spears and fight for what we get. There’s no such thing as job security and automatic raises any more. Read Fire Your Boss and Live Rich by Stephen M. Pollan, and Negotiate This! by Herb Cohen for more in-depth information.
UPDATE:
· Learn to make close acquaintances with such tomes as How to Pay Zero Taxes 2008 (or whatever year) by Jeffrey Scheppner, or other “lower your taxes” type books. Become familiar with the next years’ tax code changes and apply them if possible. Stay abreast of the tax code and look for hidden treasure troves you can make use of. Also, please read the book Perfectly Legal by David Cay Johnston for more insights into heinous-but-useful tax loopholes. Remember: the tax code was written by LAWYERS for other lawyers and the rich—I see no reason why the rest of us can’t apply these same “new rules” to our tax plans. We have to learn to help ourselves here; they set out the buffet, and we need to grab a plate and make our selections—ever mindful of our “tax code” manners.
The not-so-obvious but perfectly legal:
· Maximizing your W-4 withholding (hint: it needs to go a lot higher than the standard “people in the family” count). For more information, see IRS site.
Take 1 deduction for every IRA, Roth IRA, Individual Health Savings Account, Flexible Spending Account, or Educational IRA you fully fund each year in addition to the standard family member count. Also, add 1 deduction for every $300 you got refunded the prior year (including any Bush Tax Cut check if you get one).
· There are three types of income, all subject to different taxes:
ACTIVE income (wages/tips/salaries taxed at roughly 40% with all possible payroll taxes included). This is income you worked for—money paid to you by your employer.
PASSIVE income (rental real estate, loan/lease payments, commissions, etc. taxed at 20% with no payroll taxes). This is income you didn’t have to work for—paid to you by others for use of your belongings.
PORTFOLIO income (interest/dividends/capital gains taxed at 15% with no payroll taxes). This is investment income—money paid to you by the markets.
Changing your TYPE of income from wages/tips/salaries to something else (commissions, dividends and interest, real estate rental income, royalty payments, equipment rental/lease payments--can be any equipment at all—even a spare car), being a “shadow merchant” (selling things at a non-traditional place such as yard sales and flea markets), etc. Another way of maximizing income while minimizing taxes is to negotiate collecting the equivalent of your excess work pay (overtime, raises and bonuses) in things--like health benefits, temporary use of the company car/truck/van, or time off—as opposed to cash. These things cannot be taxed, and your employer will enjoy a $$ break. Labor is the #1 highest recurring business cost.
· Go into business and stay there ALONE or WITH IMMEDIATE FAMILY MEMBERS. Learn about the many ways of getting money out of your business without incurring any taxes for yourself (reimbursements to loans you made to the business, life insurance policy proceeds, KEOGHs and SEP-IRAs, spousal paychecks, checks to kids under 16 (there is a current income limit of about $3000 per year--it changes every year, so do check up--before taxes are incurred, and the checks don’t ACTUALLY have to go to the kids), ESOPs (employee stock ownership plans), etc. Read the Rich Dad, Poor Dad book Loopholes of the Rich for a clear, easy-to-understand diagram and explanation of how businesses flow, and how the money flows from them to you. Regular standard business deductions and credits also kick in, further reducing total tax burden.
UPDATE: Protest your property tax bill when real estate is in down markets--demand a reassessment based on new (lower) market values. The lower the market, the bigger your savings.
· Convert to Amish (officially join their church) and avoid paying any FICA and Medicare payments at all (they are officially exempt from these taxes) while employed by other Amish. You will still be subject to federal/state income taxes, and sales taxes.
The questionable:
· If going Amish isn’t your thing (and I suspect it isn’t), think about participating in the Underground Economy while still holding your “above ground” job. People who sell goods and services for cash without collecting sales tax (or paying income tax on that money), are part of that economy. Simple things like babysitting or holding yard sales qualifies. UE members have also been known to sell used cars (one at a time) or even diamonds (purchased cheaply from a pawn-shop, then re-set) discreetly for cash profit with no documentation, and no IRS attention (the IRS only looks at your lifestyle vs. declared income and tax filings from your legitimate job). As long as you lead a lifestyle that is commensurate with your known (reported) pay, you have a very good chance of going unnoticed and virtually doubling your income (or more) tax-free. For more information, consult the book Deep Inside the Underground Economy by Adam Cash, because there is FAR more to this than I could put here—and there are a few caveats you need to be aware of. I urge you to read the book and getting ALL the information before taking the plunge, because I will not be held responsible for any legal, moral, or ethical liabilities resulting from this activity.
Congress creates and passes the tax code, and usually Congress will make changes that enhance themselves and the rich. We simply need to figure out how to decipher what the changes are, and how to apply them to our own tax burdens to benefit the most from them. It doesn’t matter what income or tax bracket you’re in…there’s always something you can take advantage of, provided you make saving a priority instead of spending. For even more benefits, you need to get off the “wages, tips, and salaries” radar—what is currently considered taxable income and scrutinized the hardest by the IRS.
The obvious:
· Have kids (God’s little tax shelters).
· Open IRAs, 401(k) Accounts, Education Savings Accounts, Health Savings Accounts, Flexible Spending Accounts, and any other savings accounts that will garner you a tax credit/deduction. Accounts in children’s names will not garner YOU a credit/deduction—only them, and against any income they may receive over a certain limit (it changes annually—check the IRS website for specific $$ information).
· Be frugal…be very frugal. Learn to live on one income, avoiding the dreaded AMT trigger and marriage penalty.
·Live in Washington, shop in Oregon—and any other advantageous arrangement such as this one. Washington State has no income tax, and Oregon has no sales tax. Other useful arrangements may include Texas/Mexico (some taxes, but still very low cost) and northern states/Canada (don’t know the details, but someone will fill me in, I’m sure). Other states with no income tax are: South Dakota, Wyoming, Tennessee, Florida, Texas, New Hampshire.
· Negotiate, negotiate, negotiate! Employment contracts, termination agreements, and lateral moves to other companies are all ways to add to your bottom line. Become a “freelancer” in your company and learn to negotiate for more $$ when you deserve it. With the new economy, we all have to become our own freelancers and negotiators—we have to sharpen our spears and fight for what we get. There’s no such thing as job security and automatic raises any more. Read Fire Your Boss and Live Rich by Stephen M. Pollan, and Negotiate This! by Herb Cohen for more in-depth information.
UPDATE:
· Learn to make close acquaintances with such tomes as How to Pay Zero Taxes 2008 (or whatever year) by Jeffrey Scheppner, or other “lower your taxes” type books. Become familiar with the next years’ tax code changes and apply them if possible. Stay abreast of the tax code and look for hidden treasure troves you can make use of. Also, please read the book Perfectly Legal by David Cay Johnston for more insights into heinous-but-useful tax loopholes. Remember: the tax code was written by LAWYERS for other lawyers and the rich—I see no reason why the rest of us can’t apply these same “new rules” to our tax plans. We have to learn to help ourselves here; they set out the buffet, and we need to grab a plate and make our selections—ever mindful of our “tax code” manners.
The not-so-obvious but perfectly legal:
· Maximizing your W-4 withholding (hint: it needs to go a lot higher than the standard “people in the family” count). For more information, see IRS site.
Take 1 deduction for every IRA, Roth IRA, Individual Health Savings Account, Flexible Spending Account, or Educational IRA you fully fund each year in addition to the standard family member count. Also, add 1 deduction for every $300 you got refunded the prior year (including any Bush Tax Cut check if you get one).
· There are three types of income, all subject to different taxes:
ACTIVE income (wages/tips/salaries taxed at roughly 40% with all possible payroll taxes included). This is income you worked for—money paid to you by your employer.
PASSIVE income (rental real estate, loan/lease payments, commissions, etc. taxed at 20% with no payroll taxes). This is income you didn’t have to work for—paid to you by others for use of your belongings.
PORTFOLIO income (interest/dividends/capital gains taxed at 15% with no payroll taxes). This is investment income—money paid to you by the markets.
Changing your TYPE of income from wages/tips/salaries to something else (commissions, dividends and interest, real estate rental income, royalty payments, equipment rental/lease payments--can be any equipment at all—even a spare car), being a “shadow merchant” (selling things at a non-traditional place such as yard sales and flea markets), etc. Another way of maximizing income while minimizing taxes is to negotiate collecting the equivalent of your excess work pay (overtime, raises and bonuses) in things--like health benefits, temporary use of the company car/truck/van, or time off—as opposed to cash. These things cannot be taxed, and your employer will enjoy a $$ break. Labor is the #1 highest recurring business cost.
· Go into business and stay there ALONE or WITH IMMEDIATE FAMILY MEMBERS. Learn about the many ways of getting money out of your business without incurring any taxes for yourself (reimbursements to loans you made to the business, life insurance policy proceeds, KEOGHs and SEP-IRAs, spousal paychecks, checks to kids under 16 (there is a current income limit of about $3000 per year--it changes every year, so do check up--before taxes are incurred, and the checks don’t ACTUALLY have to go to the kids), ESOPs (employee stock ownership plans), etc. Read the Rich Dad, Poor Dad book Loopholes of the Rich for a clear, easy-to-understand diagram and explanation of how businesses flow, and how the money flows from them to you. Regular standard business deductions and credits also kick in, further reducing total tax burden.
UPDATE: Protest your property tax bill when real estate is in down markets--demand a reassessment based on new (lower) market values. The lower the market, the bigger your savings.
· Convert to Amish (officially join their church) and avoid paying any FICA and Medicare payments at all (they are officially exempt from these taxes) while employed by other Amish. You will still be subject to federal/state income taxes, and sales taxes.
The questionable:
· If going Amish isn’t your thing (and I suspect it isn’t), think about participating in the Underground Economy while still holding your “above ground” job. People who sell goods and services for cash without collecting sales tax (or paying income tax on that money), are part of that economy. Simple things like babysitting or holding yard sales qualifies. UE members have also been known to sell used cars (one at a time) or even diamonds (purchased cheaply from a pawn-shop, then re-set) discreetly for cash profit with no documentation, and no IRS attention (the IRS only looks at your lifestyle vs. declared income and tax filings from your legitimate job). As long as you lead a lifestyle that is commensurate with your known (reported) pay, you have a very good chance of going unnoticed and virtually doubling your income (or more) tax-free. For more information, consult the book Deep Inside the Underground Economy by Adam Cash, because there is FAR more to this than I could put here—and there are a few caveats you need to be aware of. I urge you to read the book and getting ALL the information before taking the plunge, because I will not be held responsible for any legal, moral, or ethical liabilities resulting from this activity.
Congress creates and passes the tax code, and usually Congress will make changes that enhance themselves and the rich. We simply need to figure out how to decipher what the changes are, and how to apply them to our own tax burdens to benefit the most from them. It doesn’t matter what income or tax bracket you’re in…there’s always something you can take advantage of, provided you make saving a priority instead of spending. For even more benefits, you need to get off the “wages, tips, and salaries” radar—what is currently considered taxable income and scrutinized the hardest by the IRS.
Tuesday, October 14, 2008
Wanna Know Where We're Headed? Read What the Big Boys Are Reading
People at the highest positions in our government are reading about the Weimar Republic and the hyper-inflation that took place in Germany before and during WWII.
This is an indication that some in high places are preparing for the worst (in offense and defense)--so should you. This is also an indication of how the Nazis were easily able to take over Germany and sway most of the world with its politics of comfort and stability (for some), and maniacal evil for others.
At this point, it doesn't matter who you vote for, because either party is going to inherit this no-way-out mess. It DOES, however, strongly indicate who NOT to vote for in 2012--the party of comfort, stability, and rebate checks in your mail, extension of your welfare and unemployment benefits, and universal health care. If the voting is repeated, we will be no better off than the Germans during WWII, or even the people of Zimbabwe needing a zillion dollars for a loaf of bread and some jam ($100 billion dollars being worth about thirty-two cents).
We're going to have to come out of our government-sponsored comfort zones and do the right thing for the country.
How did Weimar eventually get out of the mess? By switching the currency--essentially knocking off all those zeros at the end. Now what is the similarity between Weimar's switching currency and the creation and implementation of the Amero? What about the demise of the republic and the road map that Robert Pastor so kindly laid out for our politicians?
Isn't all this just a little too convenient? I hope you took note of the huge loss of rights during the Weimar Republic's difficult days, because that's coming too--the politicians have the money thing already under their control, and now all they need is the power, which they will have after the elections. The only way to get THOSE back is by electing a Republican or Libertarian--meanwhile, get used to the taste of martial law. Did you know it was almost declared when the Wall Street bailout bill failed the first time around? The threat of it is what turned some politicians from "no" to "yes" the second time around, and not voter feedback.
While you're taking the martial law taste test, start practicing your "liters" and "meters" because we're going to be swallowed whole by the metric system that surrounds us. If gas and food prices get high enough, we'll cut out the retail middleman altogether and either grow/hunt/fish our own food, or go to the large outdoor farmer's markets that will have sprouted up in place of the defunct grocery stores (or at least in their parking lots). Like in Europe, whatever non-perishable manufactured foods that can be sold over a counter without electricity will be there too, like bagged pasta, rice, and beans, as well as loose bulk (but you'll likely be buying it in kilos and not pounds). Selection by brand will have largely gone out the window, as the vendor will have likely bought the cheapest type of bulk food for resale—the only real selection left will be price and which vendor to buy from. "Stores" will become luxury places to shop, featuring refrigerated and high-end gourmet items, and no discounts available. Just think—-bread, meat, eggs, milk, and cheese will be considered high-end due to price.
The future of most food sales (and many other things) will actually be a huge step backwards, technologically speaking. Many middlemen and structures will be cut out of the buy-sell process, and the coupon won't be the only thing dying. Our only discount will be the value of the dollar--the higher the value, the more we can buy.
For FUTURE reference (literally), a kilo is 2.2 lbs., and a pound is roughly half a kilo. You want a pound of something? Just ask for a half-kilo. We WILL get here one day soon, and you might want to prepare your kids and grand kids for this. We would've gotten here a lot sooner, but America is stubborn about adopting the metric system (and getting rid of the penny). As soon as the NAFTA superhighway goes through, and Mexico, America, and Canada become one big socialist martial law country, then we will be forced into going metric for simplification purposes, because we're the ONLY country not on the metric system now. Our new currency will be the Amero, and dollar-to-Amero conversions will also yield "discounts" when the Amero value is up, but only until we completely convert to the new currency. Then, we will be completely reliant on global currency rates for any "discounts" after that. Welcome to the REAL world! Europe's been doing it for years now with the Euro.
How will you survive between now and then? Stock up on foodstuffs, clothing in future sizes (for yourself and the kids), guns/ammo, gold coins (if you can find any), and things valuable for barter (like cigarettes, booze, OTC remedies, tampons, toilet paper, etc.), fuel (for the car, and oil lamps/torches), car maintenance items, a radio and batteries (because power may get expensive and limited, as will the press and internet), how-to books of all kinds (anything from medical to home and car repair)...use your imagination. Just get prepared for a Nazi-style takeover without the jackboots and tanks--this one will be done in starched shirts, pantsuits, congressional pins, and the bang of a gavel.
This is an indication that some in high places are preparing for the worst (in offense and defense)--so should you. This is also an indication of how the Nazis were easily able to take over Germany and sway most of the world with its politics of comfort and stability (for some), and maniacal evil for others.
At this point, it doesn't matter who you vote for, because either party is going to inherit this no-way-out mess. It DOES, however, strongly indicate who NOT to vote for in 2012--the party of comfort, stability, and rebate checks in your mail, extension of your welfare and unemployment benefits, and universal health care. If the voting is repeated, we will be no better off than the Germans during WWII, or even the people of Zimbabwe needing a zillion dollars for a loaf of bread and some jam ($100 billion dollars being worth about thirty-two cents).
We're going to have to come out of our government-sponsored comfort zones and do the right thing for the country.
How did Weimar eventually get out of the mess? By switching the currency--essentially knocking off all those zeros at the end. Now what is the similarity between Weimar's switching currency and the creation and implementation of the Amero? What about the demise of the republic and the road map that Robert Pastor so kindly laid out for our politicians?
Isn't all this just a little too convenient? I hope you took note of the huge loss of rights during the Weimar Republic's difficult days, because that's coming too--the politicians have the money thing already under their control, and now all they need is the power, which they will have after the elections. The only way to get THOSE back is by electing a Republican or Libertarian--meanwhile, get used to the taste of martial law. Did you know it was almost declared when the Wall Street bailout bill failed the first time around? The threat of it is what turned some politicians from "no" to "yes" the second time around, and not voter feedback.
While you're taking the martial law taste test, start practicing your "liters" and "meters" because we're going to be swallowed whole by the metric system that surrounds us. If gas and food prices get high enough, we'll cut out the retail middleman altogether and either grow/hunt/fish our own food, or go to the large outdoor farmer's markets that will have sprouted up in place of the defunct grocery stores (or at least in their parking lots). Like in Europe, whatever non-perishable manufactured foods that can be sold over a counter without electricity will be there too, like bagged pasta, rice, and beans, as well as loose bulk (but you'll likely be buying it in kilos and not pounds). Selection by brand will have largely gone out the window, as the vendor will have likely bought the cheapest type of bulk food for resale—the only real selection left will be price and which vendor to buy from. "Stores" will become luxury places to shop, featuring refrigerated and high-end gourmet items, and no discounts available. Just think—-bread, meat, eggs, milk, and cheese will be considered high-end due to price.
The future of most food sales (and many other things) will actually be a huge step backwards, technologically speaking. Many middlemen and structures will be cut out of the buy-sell process, and the coupon won't be the only thing dying. Our only discount will be the value of the dollar--the higher the value, the more we can buy.
For FUTURE reference (literally), a kilo is 2.2 lbs., and a pound is roughly half a kilo. You want a pound of something? Just ask for a half-kilo. We WILL get here one day soon, and you might want to prepare your kids and grand kids for this. We would've gotten here a lot sooner, but America is stubborn about adopting the metric system (and getting rid of the penny). As soon as the NAFTA superhighway goes through, and Mexico, America, and Canada become one big socialist martial law country, then we will be forced into going metric for simplification purposes, because we're the ONLY country not on the metric system now. Our new currency will be the Amero, and dollar-to-Amero conversions will also yield "discounts" when the Amero value is up, but only until we completely convert to the new currency. Then, we will be completely reliant on global currency rates for any "discounts" after that. Welcome to the REAL world! Europe's been doing it for years now with the Euro.
How will you survive between now and then? Stock up on foodstuffs, clothing in future sizes (for yourself and the kids), guns/ammo, gold coins (if you can find any), and things valuable for barter (like cigarettes, booze, OTC remedies, tampons, toilet paper, etc.), fuel (for the car, and oil lamps/torches), car maintenance items, a radio and batteries (because power may get expensive and limited, as will the press and internet), how-to books of all kinds (anything from medical to home and car repair)...use your imagination. Just get prepared for a Nazi-style takeover without the jackboots and tanks--this one will be done in starched shirts, pantsuits, congressional pins, and the bang of a gavel.
Sunday, October 12, 2008
Frugality as a Recession Fighter and Depression Killer (L-O-N-G)
I’m going to turn back the clock on life in the United States to shortly before the 1900’s—the Victorian Era in Europe was alive and well, people were thriving and prospering, and culture was growing by leaps and bounds. That same era slowly made its way to us in the form of preferred dress, preferred morals, a gold rush, and a wild west that proved to be the engines of growth and prosperity for our own nation. Inventions and inventors sprinkled the landscape like fine dust, creating everything from the mechanical to the medical, and a lot in between.
England no longer had a debtor’s prison by this time, but lots of families had or knew of at least one member or friend that spent some time there, and children often grew up having one or both parents incarcerated. This may have been their only financial lesson about debt.
The U.S also had debtor’s prisons, but largely abandoned them as well after England abandoned hers. A few remained for all but federal debts—things like unpaid child support, alimony, or fraud. The sentences normally lasted only six weeks, but the shame lasted a lifetime.
This encouraged the use of thrift and frugality. People saved as much as they could, and spent as little as they could for fear of owing somebody and ending up in debtor’s prison. Fashions and furnishings became symbols and clues to wealth, with multitudes of ruffles, feathers, jewels, colors, and layers for clothing, and the most prized woods with the most ornate carvings (all done by hand, of course) for the well-to-do, paid for in cash, while plain, black, and ambiguous was the name of the game for the common man—think Puritan or Amish here.
Back in those days, everything was custom-made, and people often downgraded their wardrobes in order to save even more money—fewer ruffles, fewer frills, duller colors—sending signals to then-current society that some sort of misfortune beset them and their families, and occasionally encouraging sympathy from others. Because everything was custom-made, it cost a pretty penny for the day, and was paid for in cash. But what was inside the home often told the real tale: richly-carved pieces shipped in from the east coast, and lots of them—every room (and there were lots of those too) had some sort of carved piece in it, from bed frames to china closets. Even the humble washstands got the carving treatment!
Conversely, the inside of a home sometimes told the other story: straight lines and surfaces devoid of ornamentation, and the complete opposite of what the wardrobe depicted. Keeping up appearances to the public happened even back then, but the smart ones simply chose function over form.
This was only the well-to-do side of the street, but there was another side, especially for this country: the Wild West. We all pretty much remember those days thanks to books and TV shows depicting everything from prairie life to the gold rush to rip-roaring gun battles in the street.
The gold rush turned many a modest life into prosperity, and planted the seeds of barons and princes of industry and commerce. It also turned some into beggars—all because of where, when, and how they spent their wealth.
This ushered us into the Roaring Twenties, where the seeds that were planted in previous times grew and flourished, turning inventions into industries, and barons into magnates. Times were so good, a lot of “grasshoppers” got made during these times—people who lived for today, thinking this time would never end. But right over the horizon was the Great Depression, and many “grasshoppers” got turned into beggars once again, hanging on for dear life, while those who “ants” saved and sowed during prosperous times managed to survive this period with their dignity intact.
This is essentially what is happening today, and has been happening for decades: many are being turned into beggars (or worse) because of bad spending and saving habits. While the frugal lived simply, relying on necessities, they saved plenty of money to see themselves through what was commonly thought of as bad times, but were actually not. Today, we have every TV, newspaper, and internet site telling us how bad things are out there, but are they really, and for whom?
It’s bad times for the beggars among us—the grasshoppers who lived for today (through instant gratification) and didn’t put anything away for winter (winter being an expression of bad times, not as a season).
Those of us who lived frugally, even when times were good and great, are now able to pick the juiciest fruits from the trees of goods and services because we saved for this time—the harvest before our winter, if you will.
Now every TV channel and news publication is trying to tell us how to handle our failed finances, and that we should hang on and not sell off. For too many of us, this is the only lesson in finance we will ever get—this, and when Suzy Orman says on TV that you can’t afford to buy it, whatever “it” is.
Meanwhile, those of us who saved and kept our powder dry, it’s an absolute bonanza out there—stocks are cheap, merchandise is cheap, property and homes are cheap, and financing for the credit-worthy is about to get even cheaper than it is now. This is the time beggars should be buying because everything’s so affordable, but no—they lived for today yesterday and now they’re too broke to take advantage.
We savers can now afford to stock up on necessities to see us through the inevitable “worse” time that follows a “bad” time—the coming hyperinflation that usually arises when the nation’s financial belt has been loosened to the point of pants falling off. Beggars will find this point in economic time extremely hard, and many will likely die as a result of their previous excesses—just like the grasshopper in winter.
Stocking up will be a necessity in itself, because few of us will be able to afford common, everyday items we used and came to depend on regularly, and even fewer will have a way to get to those items. Convenience will become the new shame, as will the frills, novelty, and sparkle that helped to separate rich Victorians from their lesser neighbors.
You can’t sell off frills and sparkle when the going gets too tough, because there won’t be any buyers--ever try to eat a granite counter top? It can, however, be bartered, but at great loss—the value of everything will have collapsed into near-nothingness except those items we will deem essential to a frugal life. Only those will hold some sort of value in the eyes of those wanting it.
Now just think for a minute—if everyone were to become “ants” instead of “grasshoppers”, this country wouldn’t be in the position it finds itself today. Everyone from individuals to families to corporations to governments would be saving for their winter, and spending during that winter, making recessions and depressions largely a thing of the past. It would also serve to reset market rates and the perceived value of goods and services, making for a more affordable world for everyone that’s grounded in reality, and not the fictionalized financial world based on any number of phony values, phantom gains, and illusions of worth such as the world we live in today. We live in a low-tech version of the Matrix, and the blue pill is embedded in all our DNA, and the only person even close to representing Joe Sixpack is Keanu Reeves.
Today, bling is king until you go to resell it--then bling will be nothing. We were in the modern version of the Roaring Twenties, but are now entering the Great Depression all over again.
Let the grasshopper and ant story be your greatest nugget of financial wisdom: save when times are good so you have plenty of reserves to use when times are bad. Use your reserves when times are worst, so you won’t experience a winter of your discontent. Don’t become another dead or dying grasshopper—we have enough of those in this country, and they helped to bring this nation to its knees.
England no longer had a debtor’s prison by this time, but lots of families had or knew of at least one member or friend that spent some time there, and children often grew up having one or both parents incarcerated. This may have been their only financial lesson about debt.
The U.S also had debtor’s prisons, but largely abandoned them as well after England abandoned hers. A few remained for all but federal debts—things like unpaid child support, alimony, or fraud. The sentences normally lasted only six weeks, but the shame lasted a lifetime.
This encouraged the use of thrift and frugality. People saved as much as they could, and spent as little as they could for fear of owing somebody and ending up in debtor’s prison. Fashions and furnishings became symbols and clues to wealth, with multitudes of ruffles, feathers, jewels, colors, and layers for clothing, and the most prized woods with the most ornate carvings (all done by hand, of course) for the well-to-do, paid for in cash, while plain, black, and ambiguous was the name of the game for the common man—think Puritan or Amish here.
Back in those days, everything was custom-made, and people often downgraded their wardrobes in order to save even more money—fewer ruffles, fewer frills, duller colors—sending signals to then-current society that some sort of misfortune beset them and their families, and occasionally encouraging sympathy from others. Because everything was custom-made, it cost a pretty penny for the day, and was paid for in cash. But what was inside the home often told the real tale: richly-carved pieces shipped in from the east coast, and lots of them—every room (and there were lots of those too) had some sort of carved piece in it, from bed frames to china closets. Even the humble washstands got the carving treatment!
Conversely, the inside of a home sometimes told the other story: straight lines and surfaces devoid of ornamentation, and the complete opposite of what the wardrobe depicted. Keeping up appearances to the public happened even back then, but the smart ones simply chose function over form.
This was only the well-to-do side of the street, but there was another side, especially for this country: the Wild West. We all pretty much remember those days thanks to books and TV shows depicting everything from prairie life to the gold rush to rip-roaring gun battles in the street.
The gold rush turned many a modest life into prosperity, and planted the seeds of barons and princes of industry and commerce. It also turned some into beggars—all because of where, when, and how they spent their wealth.
This ushered us into the Roaring Twenties, where the seeds that were planted in previous times grew and flourished, turning inventions into industries, and barons into magnates. Times were so good, a lot of “grasshoppers” got made during these times—people who lived for today, thinking this time would never end. But right over the horizon was the Great Depression, and many “grasshoppers” got turned into beggars once again, hanging on for dear life, while those who “ants” saved and sowed during prosperous times managed to survive this period with their dignity intact.
This is essentially what is happening today, and has been happening for decades: many are being turned into beggars (or worse) because of bad spending and saving habits. While the frugal lived simply, relying on necessities, they saved plenty of money to see themselves through what was commonly thought of as bad times, but were actually not. Today, we have every TV, newspaper, and internet site telling us how bad things are out there, but are they really, and for whom?
It’s bad times for the beggars among us—the grasshoppers who lived for today (through instant gratification) and didn’t put anything away for winter (winter being an expression of bad times, not as a season).
Those of us who lived frugally, even when times were good and great, are now able to pick the juiciest fruits from the trees of goods and services because we saved for this time—the harvest before our winter, if you will.
Now every TV channel and news publication is trying to tell us how to handle our failed finances, and that we should hang on and not sell off. For too many of us, this is the only lesson in finance we will ever get—this, and when Suzy Orman says on TV that you can’t afford to buy it, whatever “it” is.
Meanwhile, those of us who saved and kept our powder dry, it’s an absolute bonanza out there—stocks are cheap, merchandise is cheap, property and homes are cheap, and financing for the credit-worthy is about to get even cheaper than it is now. This is the time beggars should be buying because everything’s so affordable, but no—they lived for today yesterday and now they’re too broke to take advantage.
We savers can now afford to stock up on necessities to see us through the inevitable “worse” time that follows a “bad” time—the coming hyperinflation that usually arises when the nation’s financial belt has been loosened to the point of pants falling off. Beggars will find this point in economic time extremely hard, and many will likely die as a result of their previous excesses—just like the grasshopper in winter.
Stocking up will be a necessity in itself, because few of us will be able to afford common, everyday items we used and came to depend on regularly, and even fewer will have a way to get to those items. Convenience will become the new shame, as will the frills, novelty, and sparkle that helped to separate rich Victorians from their lesser neighbors.
You can’t sell off frills and sparkle when the going gets too tough, because there won’t be any buyers--ever try to eat a granite counter top? It can, however, be bartered, but at great loss—the value of everything will have collapsed into near-nothingness except those items we will deem essential to a frugal life. Only those will hold some sort of value in the eyes of those wanting it.
Now just think for a minute—if everyone were to become “ants” instead of “grasshoppers”, this country wouldn’t be in the position it finds itself today. Everyone from individuals to families to corporations to governments would be saving for their winter, and spending during that winter, making recessions and depressions largely a thing of the past. It would also serve to reset market rates and the perceived value of goods and services, making for a more affordable world for everyone that’s grounded in reality, and not the fictionalized financial world based on any number of phony values, phantom gains, and illusions of worth such as the world we live in today. We live in a low-tech version of the Matrix, and the blue pill is embedded in all our DNA, and the only person even close to representing Joe Sixpack is Keanu Reeves.
Today, bling is king until you go to resell it--then bling will be nothing. We were in the modern version of the Roaring Twenties, but are now entering the Great Depression all over again.
Let the grasshopper and ant story be your greatest nugget of financial wisdom: save when times are good so you have plenty of reserves to use when times are bad. Use your reserves when times are worst, so you won’t experience a winter of your discontent. Don’t become another dead or dying grasshopper—we have enough of those in this country, and they helped to bring this nation to its knees.
Wednesday, October 08, 2008
Cavalcade of Risk #62—the Wall Street Wipeout Edition
[Close your eyes and picture dollar bills going down the drain--sorry, actual picture wouldn't load. I tried to find a picture of money disappearing into a black hole, but none existed]
First some fun, because we’ve all been inundated with the Wall Street bailout mess—between that and the wall-to-wall debate commentary on TV, I’m about ready to scream and throw my set into the street (looking both ways for pedestrians and cars first, and donning my hard hat, gloves, and safety goggles). I’m not upset about the bailout mess and debates themselves, just sick and tired of HEARING about it on every bleeping channel!
From the Levity Dept: A limerick and haiku about Wall Street Woes. Leave it to Mad Kane to find humor in disaster--she's mad, you know.
Now for a funny story my husband wrote about risk, safety, and a detoured trip to a gun range: Paging Wyatt Earp.
From Living Almost Large and the “I Avoid Risk Aversion” Dept: Healthcare Really Sucks n the U.S. No real lesson to be learned here, except that for some people, insurance is supposed to take the place of awareness and personal responsibility.
Speaking of self-risk assessment and prevention, here are a couple of book recommendations from Hubby:
Traffic: Why We Drive the Way We Do
The Unthinkable: Who Survives When Disaster Strikes—and Why
Okay, now I’ll ease you into the more serious aspects of risk, starting with…
Insurance Risk
Jim is testing the top 5 auto insurance myths over at Blueprint for Financial Prosperity.
Debt Freedom Fighter has 3 things you should know about your life insurance policy.
Jay Norris of Colorado Health Insurance Insider sends an article about the cost of individual health insurance in Colorado. I got curious about my own health insurance, and asked my doctor’s billing office to prepare a comparison between what I spend with insurance, and what my cash outlay would be for the same items—the response was shocking: “the most expensive items are out-of-office lab work, and every thing else is $20 or lower.” If Hubby was eligible for an HSA plan, we’d switch tomorrow. The only reason we have insurance at all is out of fear of needing surgery, hospitalization, and/or chemotherapy.
Political Risk—a new heading, and no mention whatsoever of Sarah Palin or Obama
Hank Stern explains how politics intrudes on the insurance/risk world, especially how it affects the presidential candidates, with this story.
Health Risk
Jason at Healthcare Economist has evidence that women are the stronger sex when it comes to mortality and the death of a spouse.
Good news for folks with a sweet tooth: Dr. Steven Warren, blogging at the Celestial Chocolates blog, reports that a bit of chocolate in one's diet can cut the risk of heart attack almost in half. This is unless you’re allergic to chocolate, like I am…:(
Now we all need put on our hard hats, safety goggles, gloves, and be in a well-padded chair, have a beer or two standing by (or a bottle of whiskey, depending on your portfolio), and maybe some Prozac (elbow pads optional)…here it comes. Don't sat I didn't warn you:
Financial Risk
In Tallahassee Real Estate’s blog, Joe Manausa chronicles in detail that we’re bailing out America and not just the banks.
FIRE Finance tells us how to protect our assets in a financial crisis.
About the Wall St. Bailout fiasco, Uncommon Cents says this is when your risk tolerance is really defined.
Lazy Man and Money tells us of his recent forays into alternative income streams. I know this sort of stuff wouldn’t normally make it into a carnival, but I included it because these times highlight the strong possibilities of employment risk and loss of salary or wage income. These days, we all need to be on the lookout for our own alternative means of making money—especially those independent of a company or the government.
Money Answer Guy asks what advice you would give towards insuring loans.
My Wealth Builder warns that even money market funds have downside risks. Stock market chickens, take note!
Mortgage Law Network reveals that banks get to hide losses a little while longer thanks to the bailout law, adding “Banks have a green light to use more guess work in their accounting which will make their financials more opaque in the future.”
Nancy Germond at AllBusiness.com—Risk Management for the 21st Century shows how the AIG bailout offers many lessons in risk management. I still can't believe the execs there went out and partied on bailout money after the bailout took effect! So when's MY party? Oh, wait--I have to be bailed out first. Update: it gets worse.
Over at the Economist's View blog, Mark Thoma posits that the breakdowns of Fannie and Freddie was due in large part to increased risk-taking. I say it goes back even further than that—all the way back to the Community Reinvestment Act and its subsequent tweaks along the way.
The folks at A Different View on Politics don't believe that the recent bailouts will decrease the risk of global economic woes.
The Legal Literacy blog, while writing about Wall Street's recent troubles, reports on increased interest in business governance, risk and compliance.
Huxbux, blogging at The Thought Refuse, examines risk management and federal regulation of investment firms. Heavy reading, but well worth it.
I tried to warn you, didn’t I? Now for the much softer finale…
Risk Assessment—Just Whose Job is It?
Risk Publishing Online's David Gamble, looking at how companies function, wonders just whose responsibility it is to actually assess risk.
I keep asking my over-worked hubby in the Navy OSHA safety office just whose job it is to PREVENT risk—the navy seems to think it’s his, when it’s EVERYBODY’S. Risk awareness by itself just doesn’t seem to be enough, when laziness is the real culprit in his world.
Join us next time when John Cogan at Regulating Health Insurance gets to serve up the goodies!
First some fun, because we’ve all been inundated with the Wall Street bailout mess—between that and the wall-to-wall debate commentary on TV, I’m about ready to scream and throw my set into the street (looking both ways for pedestrians and cars first, and donning my hard hat, gloves, and safety goggles). I’m not upset about the bailout mess and debates themselves, just sick and tired of HEARING about it on every bleeping channel!
From the Levity Dept: A limerick and haiku about Wall Street Woes. Leave it to Mad Kane to find humor in disaster--she's mad, you know.
Now for a funny story my husband wrote about risk, safety, and a detoured trip to a gun range: Paging Wyatt Earp.
From Living Almost Large and the “I Avoid Risk Aversion” Dept: Healthcare Really Sucks n the U.S. No real lesson to be learned here, except that for some people, insurance is supposed to take the place of awareness and personal responsibility.
Speaking of self-risk assessment and prevention, here are a couple of book recommendations from Hubby:
Traffic: Why We Drive the Way We Do
The Unthinkable: Who Survives When Disaster Strikes—and Why
Okay, now I’ll ease you into the more serious aspects of risk, starting with…
Insurance Risk
Jim is testing the top 5 auto insurance myths over at Blueprint for Financial Prosperity.
Debt Freedom Fighter has 3 things you should know about your life insurance policy.
Jay Norris of Colorado Health Insurance Insider sends an article about the cost of individual health insurance in Colorado. I got curious about my own health insurance, and asked my doctor’s billing office to prepare a comparison between what I spend with insurance, and what my cash outlay would be for the same items—the response was shocking: “the most expensive items are out-of-office lab work, and every thing else is $20 or lower.” If Hubby was eligible for an HSA plan, we’d switch tomorrow. The only reason we have insurance at all is out of fear of needing surgery, hospitalization, and/or chemotherapy.
Political Risk—a new heading, and no mention whatsoever of Sarah Palin or Obama
Hank Stern explains how politics intrudes on the insurance/risk world, especially how it affects the presidential candidates, with this story.
Health Risk
Jason at Healthcare Economist has evidence that women are the stronger sex when it comes to mortality and the death of a spouse.
Good news for folks with a sweet tooth: Dr. Steven Warren, blogging at the Celestial Chocolates blog, reports that a bit of chocolate in one's diet can cut the risk of heart attack almost in half. This is unless you’re allergic to chocolate, like I am…:(
Now we all need put on our hard hats, safety goggles, gloves, and be in a well-padded chair, have a beer or two standing by (or a bottle of whiskey, depending on your portfolio), and maybe some Prozac (elbow pads optional)…here it comes. Don't sat I didn't warn you:
Financial Risk
In Tallahassee Real Estate’s blog, Joe Manausa chronicles in detail that we’re bailing out America and not just the banks.
FIRE Finance tells us how to protect our assets in a financial crisis.
About the Wall St. Bailout fiasco, Uncommon Cents says this is when your risk tolerance is really defined.
Lazy Man and Money tells us of his recent forays into alternative income streams. I know this sort of stuff wouldn’t normally make it into a carnival, but I included it because these times highlight the strong possibilities of employment risk and loss of salary or wage income. These days, we all need to be on the lookout for our own alternative means of making money—especially those independent of a company or the government.
Money Answer Guy asks what advice you would give towards insuring loans.
My Wealth Builder warns that even money market funds have downside risks. Stock market chickens, take note!
Mortgage Law Network reveals that banks get to hide losses a little while longer thanks to the bailout law, adding “Banks have a green light to use more guess work in their accounting which will make their financials more opaque in the future.”
Nancy Germond at AllBusiness.com—Risk Management for the 21st Century shows how the AIG bailout offers many lessons in risk management. I still can't believe the execs there went out and partied on bailout money after the bailout took effect! So when's MY party? Oh, wait--I have to be bailed out first. Update: it gets worse.
Over at the Economist's View blog, Mark Thoma posits that the breakdowns of Fannie and Freddie was due in large part to increased risk-taking. I say it goes back even further than that—all the way back to the Community Reinvestment Act and its subsequent tweaks along the way.
The folks at A Different View on Politics don't believe that the recent bailouts will decrease the risk of global economic woes.
The Legal Literacy blog, while writing about Wall Street's recent troubles, reports on increased interest in business governance, risk and compliance.
Huxbux, blogging at The Thought Refuse, examines risk management and federal regulation of investment firms. Heavy reading, but well worth it.
I tried to warn you, didn’t I? Now for the much softer finale…
Risk Assessment—Just Whose Job is It?
Risk Publishing Online's David Gamble, looking at how companies function, wonders just whose responsibility it is to actually assess risk.
I keep asking my over-worked hubby in the Navy OSHA safety office just whose job it is to PREVENT risk—the navy seems to think it’s his, when it’s EVERYBODY’S. Risk awareness by itself just doesn’t seem to be enough, when laziness is the real culprit in his world.
Join us next time when John Cogan at Regulating Health Insurance gets to serve up the goodies!
Monday, October 06, 2008
Now For the Aftermath...
The bailout has been signed into law, and now the fun begins. :[
Put these on your to-do list:
1. Start looking for ways to maximize tax deductions and credits, because taxes are almost CERTAINLY going to go up in 2010. Continue to look for ways to shelter your income from taxes, as they are certainly going to skyrocket along with everything else. Here is where it will pay to keep abreast of the tax code and any changes made to it with the next administration.
2. Start looking for ways to make an income, however small, without a traditional job, because things are only going to get worse from here. Read up on how to barter, and how to live in the underground economy.
3. Stock up on commonly-used items NOW while you still have money coming in, and still have somewhat reasonable prices. We're probably not going to see daylight until 2013 at the earliest.
4. Prepare to snuggle up to Uncle Sam for any kind of stability--join the military for a job, free health care, free dental, etc, and go in the Navy or Air Force to avoid any Iraq/Afghanistan action. Also, this will enable you to sign up for welfare benefits without shame--you'll HAVE a job, but it doesn't pay for squat!
5. If ineligible for the military, you can snuggle up to Uncle Sam in a time-honored way--by signing up for welfare benefits.
6. Put your money wherever Morningstar says is still performing--last week, it was long government bonds @ 6%, and this was the best I could find sans elaborate risk. This is another way to snuggle up to Uncle Sam.
7. You might want to read up on Your Money or Your Life again to review the Vicki Robinson way of investing for the future--at this point, it may be the safest. You might also want to read up on how the Amish live day-to-day, because one day soon, life as you know it will escape affordability.
8. Things won't get any better economically-speaking until Democrats are out of power, and Obama most certainly will get elected this November--people who are already suffering will snuggle up to socialism for comfort, and Obama provides it. His first reign will be be over in 2013, and if he doesn't get re-elected, we'll start to come out of this. What you can do for yourself is vote the incumbent OUT with each and every ballot you come in contact with to prevent the all-consuming power and money grabs that shaped politics as we now know it.
UPDATE: Always be signed up for absentee or mail-in voting, because we simply cannot trust the electronic voting machines to accurately record our votes--also, they do not provide a place to write in any third-party candidates or other choices, such as my Jon Stewart/Stephen Colbert protest votes, and do not provide a paper trail to verify the vote.
9. If you are hunting/fishing/gardening-inclined, make that your new priority as far as food goes, because we're going to experience hyper-inflation as a result of this bailout package, and you may not be able to afford food--especially if you pile job losses on top of that.
10. If you haven't paid down or paid off your credit card debt and loans, and don't have a federal job of some sort, count yourself screwed. State jobs aren't going to be good enough, because states are turning to the Fed for help, and Uncle Sam can't help everyone--watch and see what happens to California. If you already have a federal job other than the military, and you were the last one hired in your department, prepare for laying off--it will come to that eventually.
We are heading toward an elaborately-engineered depression, and we will come close to re-living the 1930's. Just how deep it will be is unknown at this time, but it would be wise to expect and prepare for the worst as Congress-critters do their best to re-enact the very same moves that caused the last depression to hang on for so long. All that matter to them is power and money, and by signing this bill into law, they will have all of both.
Put these on your to-do list:
1. Start looking for ways to maximize tax deductions and credits, because taxes are almost CERTAINLY going to go up in 2010. Continue to look for ways to shelter your income from taxes, as they are certainly going to skyrocket along with everything else. Here is where it will pay to keep abreast of the tax code and any changes made to it with the next administration.
2. Start looking for ways to make an income, however small, without a traditional job, because things are only going to get worse from here. Read up on how to barter, and how to live in the underground economy.
3. Stock up on commonly-used items NOW while you still have money coming in, and still have somewhat reasonable prices. We're probably not going to see daylight until 2013 at the earliest.
4. Prepare to snuggle up to Uncle Sam for any kind of stability--join the military for a job, free health care, free dental, etc, and go in the Navy or Air Force to avoid any Iraq/Afghanistan action. Also, this will enable you to sign up for welfare benefits without shame--you'll HAVE a job, but it doesn't pay for squat!
5. If ineligible for the military, you can snuggle up to Uncle Sam in a time-honored way--by signing up for welfare benefits.
6. Put your money wherever Morningstar says is still performing--last week, it was long government bonds @ 6%, and this was the best I could find sans elaborate risk. This is another way to snuggle up to Uncle Sam.
7. You might want to read up on Your Money or Your Life again to review the Vicki Robinson way of investing for the future--at this point, it may be the safest. You might also want to read up on how the Amish live day-to-day, because one day soon, life as you know it will escape affordability.
8. Things won't get any better economically-speaking until Democrats are out of power, and Obama most certainly will get elected this November--people who are already suffering will snuggle up to socialism for comfort, and Obama provides it. His first reign will be be over in 2013, and if he doesn't get re-elected, we'll start to come out of this. What you can do for yourself is vote the incumbent OUT with each and every ballot you come in contact with to prevent the all-consuming power and money grabs that shaped politics as we now know it.
UPDATE: Always be signed up for absentee or mail-in voting, because we simply cannot trust the electronic voting machines to accurately record our votes--also, they do not provide a place to write in any third-party candidates or other choices, such as my Jon Stewart/Stephen Colbert protest votes, and do not provide a paper trail to verify the vote.
9. If you are hunting/fishing/gardening-inclined, make that your new priority as far as food goes, because we're going to experience hyper-inflation as a result of this bailout package, and you may not be able to afford food--especially if you pile job losses on top of that.
10. If you haven't paid down or paid off your credit card debt and loans, and don't have a federal job of some sort, count yourself screwed. State jobs aren't going to be good enough, because states are turning to the Fed for help, and Uncle Sam can't help everyone--watch and see what happens to California. If you already have a federal job other than the military, and you were the last one hired in your department, prepare for laying off--it will come to that eventually.
We are heading toward an elaborately-engineered depression, and we will come close to re-living the 1930's. Just how deep it will be is unknown at this time, but it would be wise to expect and prepare for the worst as Congress-critters do their best to re-enact the very same moves that caused the last depression to hang on for so long. All that matter to them is power and money, and by signing this bill into law, they will have all of both.
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