NMVTIS link. Your local DMV can also run a VIN report for a nominal fee, and it accomplishes the same thing without the "non-participating states" hurdle.
Just give them the VIN number of the car you're interested in buying, fill out an application (if any), pay a small fee (usually up to about $5), and get the same information this database can provide (for the same price).
If the report says "salvage" anywhere on it, RUN LIKE HELL! Also, if the seller and titled owner don't match up, RUN LIKE HELL because the car is either hot, or the so-called "seller" is trying to avoid paying taxes on the car by not claiming legal ownership (putting his/her name on the registration and title).
*Underground Economy note: you can buy and sell cars WITHOUT registering them--dealers do it all the time. As long as you don't plan on driving it around after the plates expire, it's legal to do this as long as you don't get pulled over for something. "Undergrounders" frequently buy cheap used cars (one at a time), clean them up, and re-sell them for a small profit, all without ever registering them in their own names--the title is still in the last owner's name, and the back of it has his/her signature "signing over" the vehicle interest to someone else (the new seller). Now the current possessor can sell that car to someone else without ever having to claim formal ownership, because he/she never signed the back of the title, never turned it into the DMV for re-registration, and his/her name is nowhere on the document pertaining to the car.
Meanwhile, the latest buyer is the one who actually fills in the "buyer" info on the title back, takes everything to the DMV, and pays registration and taxes due (in personal property tax states). So the car has gone from last legal owner to next legal owner (through you) with nary a fingerprint of yours on the transaction, except to collect the profits.
To learn more about the Underground Economy, check out Welcome to the Underground Economy.
Saturday, January 31, 2009
Thursday, January 29, 2009
Rethink the Value of College
From Yahoo Opinion. "Instead of a system based on the possession of a degree as a requirement for jobs, Mr. Murray proposes vocational training for students who lack the necessary inclination to pursue academic studies. They would receive certification for specific skills needed in the workplace. Anything else, he says, is educational romanticism."
My two cents on the whole college thing:
The College Conundrum
The NEW Lessons in Higher Education
"I Refuse to Sacrifice For You, Then Resent You For It"
My two cents on the whole college thing:
The College Conundrum
The NEW Lessons in Higher Education
"I Refuse to Sacrifice For You, Then Resent You For It"
Updated: When Nutrition and Need Collide
Originally written back in 2005.
____________________________________________________________
In spite of the Food Guide Pyramid and the Healthy Eating Guidelines being revamped in 2005, there are segments of the population that still find cheap, nutritious food unattainable for various reasons. These reasons can range from transportation to and from the food source to simply applying ineffective shopping skills. The population gamut runs from the high school dropout to some possessing a PhD.
The common denominator: the cupboards are bare, and the refrigerator’s empty.
I don’t know whether to chalk it up to poor shopping skills, poor food choices, under-education and under-employment, breeding beyond means, or a combination of all these things (current economy notwithstanding). Whatever the reasons, it’s a sad state to find one’s self in among one of the richest nations on earth.
Maybe it’s really a lack of reckoning with certain truths about the world we now live in. So much has changed, and so many can’t seem to keep up. For example:
Employment—businesses are in a constant scramble for profits, and will stop at almost nothing to preserve profit margins. Offshoring and outsourcing weren’t even in our vocabulary five years ago, and now are tossed about every day in casual conversation. Since labor is the largest recurring cost for employers, they will find a way to do without labor or find cheaper sources. This means we must “recession-proof” our job skills through careful career choices and near-constant educational updates to stay current, useful, and in demand. We also have to stay current in the ways we FIND a job, and not fall victim to relying on methods that are no longer used.
Another priority we must fulfill is contribution to the boss’s bottom line. If you are a cost (liability) to him/her and not an asset, you won’t be employed long. Regular accomplishments that help bolster the bottom line at work (through sales increases, new customers/markets, cost-cutting, etc.) will help to ensure continued employability and can be used as bargaining chips for negotiating pay raises and bonuses. Those same accomplishments can also be applied to the resume’ for future employment and pay negotiations.
Choose a career that can’t be outsourced, sent offshore, or have software written to replace your presence. Achieve the maximum degree in it that will pay for itself, and this will require some research on your part (some Master’s and PhD’s don’t earn any more than a regular Bachelor’s, and turn out to be a waste of time and money). Fit the boss’s needs in with your regular job duties, and continue to job hunt while you’re already employed. Employers gain most of their new employees by poaching from other firms, so don’t be afraid to put your resume’ out or enlist the help of a headhunter (for discretion). The fact that you’re still employed means you are in demand, and demand attracts demand.
Spending—some people have a tendency to “reward” themselves for such hard work with short-lived and expensive trinkets. The want takes precedence over the need or even the consideration of options. The idea of having “something to show for all the hard work” is a fallacy that many people still seem to share.
Finding ways to save, even if it’s just a small amount, is imperative in today’s world. It’s also a tax benefit.
Shopping skills—as we all (or nearly all) know, judicious shelf label reading, coupon use, store selection, and product selection have maximum dollar savings. Too much focus is placed on the product price, and agencies that deal with food stamps ought to hold shopping classes. It seems like so many people who use these programs don’t know how to shop correctly, and it’s no wonder—the schools no longer teach Home Economics like they did when Mom and Grandma went to school, nor is it explained at home. This “generational deficit” has led to buying salad in bags, vegetables in cans, and junk non-foods for lunchboxes. Familiar convenience items are now sought out at food banks and pantries, and they’re not going to be there.
Grandma had less money than we do now, so how did she get by? She had a garden and an oven, and she used them. As much as we may despise it, we need to get back into domesticity: cook from scratch, garden, learn portion control, and cost-per-unit shopping.
Breeding beyond our means—there just is no tactful way to say this, and I apologize to you readers. Choosing to have kids is a romantic reflex response to marriage, according to Dr. Phil. As we know, not all kids are planned, and we can’t send them back to where they came from. We can control their creation, however, with the myriad methods of birth control available.
Having children before getting a sufficient education to sustain employment is one big mistake lots of people make. The cart frequently gets put before the horse, and we hear, “it’ll all work out in the end,”—but mostly it doesn’t. This can lead to abuse, neglect, abandonment, and having to rely on agencies and organizations for mere subsistence rations of food with negligible nutrition. We cannot always rely on the support of a devoted spouse to carry us through, and he/she may have their own set of problems with staying employed, saving, shopping, etc.
The number of children can also be a detriment if sufficient income isn’t present or cannot be had to support all those bodies—it’s just like creating more bills that have no hope of being paid. This isn’t fair to the children at all. They didn’t ask to suffer.
There are benefits and consequences to both having kids while young and waiting awhile. One of the benefits of waiting is maturity of the brain—our frontal lobes aren’t fully mature until we’re 25, and this part of the brain is responsible for things like risk assessment and quick decision making. If we wait until the income is right, the marital and mental units are stable, and a savings/spending program is under control, we stand a much better chance for family success. We are also less likely to fall to levels where reliance on food stamps and food pantries become the norm for our households.
Kids are not a requirement of marriage or any other sort of relationship, and it’s perfectly okay if you don’t have any at all. Sometimes we can end up waiting until it’s biologically too late for conditions to be just right, and so far, about 30% of the “breeding age” population has. All the more reason to make education, career selection, savings, and shopping skills a priority on your life while you’re young. If you don’t make it and lose to the biological clock, don’t sweat it—you have plenty of company.
Individual personal responsibility has got to kick in at some point. Food banks, pantries, and agency programs cannot be expected to pick up the slack for what amounts to poor prevention planning. Articles and advocates cry out for increased access to more nutritious food through these “emergency” outlets, but there’s the rub—these outlets are not meant for providing first-line sustenance. Furthermore, these outlets are subject to regulations, donations and budgets, and seasonal/supplier availability. They are just not meant as a first-line defense for under-employment, bad shopping/spending skills, and over-breeding. Here is where nutrition and need collide, and it’s preventable.
____________________________________________________________
In spite of the Food Guide Pyramid and the Healthy Eating Guidelines being revamped in 2005, there are segments of the population that still find cheap, nutritious food unattainable for various reasons. These reasons can range from transportation to and from the food source to simply applying ineffective shopping skills. The population gamut runs from the high school dropout to some possessing a PhD.
The common denominator: the cupboards are bare, and the refrigerator’s empty.
I don’t know whether to chalk it up to poor shopping skills, poor food choices, under-education and under-employment, breeding beyond means, or a combination of all these things (current economy notwithstanding). Whatever the reasons, it’s a sad state to find one’s self in among one of the richest nations on earth.
Maybe it’s really a lack of reckoning with certain truths about the world we now live in. So much has changed, and so many can’t seem to keep up. For example:
Employment—businesses are in a constant scramble for profits, and will stop at almost nothing to preserve profit margins. Offshoring and outsourcing weren’t even in our vocabulary five years ago, and now are tossed about every day in casual conversation. Since labor is the largest recurring cost for employers, they will find a way to do without labor or find cheaper sources. This means we must “recession-proof” our job skills through careful career choices and near-constant educational updates to stay current, useful, and in demand. We also have to stay current in the ways we FIND a job, and not fall victim to relying on methods that are no longer used.
Another priority we must fulfill is contribution to the boss’s bottom line. If you are a cost (liability) to him/her and not an asset, you won’t be employed long. Regular accomplishments that help bolster the bottom line at work (through sales increases, new customers/markets, cost-cutting, etc.) will help to ensure continued employability and can be used as bargaining chips for negotiating pay raises and bonuses. Those same accomplishments can also be applied to the resume’ for future employment and pay negotiations.
Choose a career that can’t be outsourced, sent offshore, or have software written to replace your presence. Achieve the maximum degree in it that will pay for itself, and this will require some research on your part (some Master’s and PhD’s don’t earn any more than a regular Bachelor’s, and turn out to be a waste of time and money). Fit the boss’s needs in with your regular job duties, and continue to job hunt while you’re already employed. Employers gain most of their new employees by poaching from other firms, so don’t be afraid to put your resume’ out or enlist the help of a headhunter (for discretion). The fact that you’re still employed means you are in demand, and demand attracts demand.
Spending—some people have a tendency to “reward” themselves for such hard work with short-lived and expensive trinkets. The want takes precedence over the need or even the consideration of options. The idea of having “something to show for all the hard work” is a fallacy that many people still seem to share.
Finding ways to save, even if it’s just a small amount, is imperative in today’s world. It’s also a tax benefit.
Shopping skills—as we all (or nearly all) know, judicious shelf label reading, coupon use, store selection, and product selection have maximum dollar savings. Too much focus is placed on the product price, and agencies that deal with food stamps ought to hold shopping classes. It seems like so many people who use these programs don’t know how to shop correctly, and it’s no wonder—the schools no longer teach Home Economics like they did when Mom and Grandma went to school, nor is it explained at home. This “generational deficit” has led to buying salad in bags, vegetables in cans, and junk non-foods for lunchboxes. Familiar convenience items are now sought out at food banks and pantries, and they’re not going to be there.
Grandma had less money than we do now, so how did she get by? She had a garden and an oven, and she used them. As much as we may despise it, we need to get back into domesticity: cook from scratch, garden, learn portion control, and cost-per-unit shopping.
Breeding beyond our means—there just is no tactful way to say this, and I apologize to you readers. Choosing to have kids is a romantic reflex response to marriage, according to Dr. Phil. As we know, not all kids are planned, and we can’t send them back to where they came from. We can control their creation, however, with the myriad methods of birth control available.
Having children before getting a sufficient education to sustain employment is one big mistake lots of people make. The cart frequently gets put before the horse, and we hear, “it’ll all work out in the end,”—but mostly it doesn’t. This can lead to abuse, neglect, abandonment, and having to rely on agencies and organizations for mere subsistence rations of food with negligible nutrition. We cannot always rely on the support of a devoted spouse to carry us through, and he/she may have their own set of problems with staying employed, saving, shopping, etc.
The number of children can also be a detriment if sufficient income isn’t present or cannot be had to support all those bodies—it’s just like creating more bills that have no hope of being paid. This isn’t fair to the children at all. They didn’t ask to suffer.
There are benefits and consequences to both having kids while young and waiting awhile. One of the benefits of waiting is maturity of the brain—our frontal lobes aren’t fully mature until we’re 25, and this part of the brain is responsible for things like risk assessment and quick decision making. If we wait until the income is right, the marital and mental units are stable, and a savings/spending program is under control, we stand a much better chance for family success. We are also less likely to fall to levels where reliance on food stamps and food pantries become the norm for our households.
Kids are not a requirement of marriage or any other sort of relationship, and it’s perfectly okay if you don’t have any at all. Sometimes we can end up waiting until it’s biologically too late for conditions to be just right, and so far, about 30% of the “breeding age” population has. All the more reason to make education, career selection, savings, and shopping skills a priority on your life while you’re young. If you don’t make it and lose to the biological clock, don’t sweat it—you have plenty of company.
Individual personal responsibility has got to kick in at some point. Food banks, pantries, and agency programs cannot be expected to pick up the slack for what amounts to poor prevention planning. Articles and advocates cry out for increased access to more nutritious food through these “emergency” outlets, but there’s the rub—these outlets are not meant for providing first-line sustenance. Furthermore, these outlets are subject to regulations, donations and budgets, and seasonal/supplier availability. They are just not meant as a first-line defense for under-employment, bad shopping/spending skills, and over-breeding. Here is where nutrition and need collide, and it’s preventable.
Monday, January 26, 2009
Rerun: The Best of Everything
Originally written back in 2005.
_______________________________________________
“The happiest people don't have the best of everything--they make the best of everything”—author unknown
Whether it’s a tight-budget Christmas, a too-small apartment, or nothing to wear, you learn to make the best of it. How? By working with what you’ve got.
The first place to look, and the usual trove of answers, can be found mostly in closets. Pick one, root around in there, and pull out every single thing until it’s completely empty. What have you unearthed from those bags stashed way back in the corner? What was harboring in those cute little decorator boxes on the top shelf?
The most important question: do you still need it?
Is anything re-useable in another form, such as fabric from old clothing? Is anything gift-worthy to give to someone else? Can something be dolled up with dye, new buttons, different accessories, or trim to make a new look? Is there another room this item can be used in besides the obvious manufacturer-designated one? How can you make the best of it?
Another good place for rooting around in is the kitchen. How many appliances do you have, still in boxes, unused, from holidays past? What do you really use a lot, and what can you get rid of (either by gifting, donation, or yard sale)? Take a closer look at seasonal things too—not just the everyday stuff. Do you really need Santa eggnog glasses taking up that shelf space when you only use them about 1/12 of the year? Won’t another regularly-used glass suffice?
I would be remiss if I left out the bathroom. Lay out and assess those cosmetics and medicine cabinet doodads, including under the sink vanity area too. What do you absolutely use regularly, and what can you part with? Is anything gift-worthy, donation fodder, or yard sale fodder? Can anything be used in another form or manner? I recommend sticking to one makeup/nail color scheme, one perfume, one shampoo/conditioner, one hair spray (if used), and as few stomach remedies as you can get away with.
Another idea for looking at: the walls. Is the amount of stuff hanging from your walls too little, just right, or too much? Perhaps some of your once-treasured art pieces, mirrors, and other hanging bric-a-brac could use a new home—whether it’s just a new location in the room, a whole new room, or a whole new address. Is any of it gift, donation, or yard sale fodder?
Then, there’s the living room. Something that really irritates me about furniture is how sales showrooms group living room sets together in couch-loveseat-chair scenarios, never acknowledging that some of us don’t have as much square footage for “living” as their well-appointed showroom partitions do. Display designers assume you have a house, and the living room to go with it, otherwise you wouldn’t be coming to buy real full-size furniture. The truth is that you DON’T need to have the usual 3-piece living room group when a loveseat alone will do. Sometimes a lamp and end table will suffice, instead of the coffee table-two end tables-sofa table group they WANT you to buy, plus the matched lamp set. Once again, you have to look around and ask if anything’s re-useable in another location, gift-worthy, donation-worthy, or yard sale fodder.
Conversely, there’s always the flip-side: not having enough (or not seeming to). How can you make the best of THAT situation? By making less do more with double-duty clothing, furniture, cosmetics, kitchen contents, art objects, you name it. Imagination and creativity are good friends to have around in this instance—don’t be afraid to call upon them often.
Instead of simply buying more or getting more, start innovating more. Make the best of everything you have, and quit trying to have the best of everything. You’ll be much happier!
_______________________________________________
“The happiest people don't have the best of everything--they make the best of everything”—author unknown
Whether it’s a tight-budget Christmas, a too-small apartment, or nothing to wear, you learn to make the best of it. How? By working with what you’ve got.
The first place to look, and the usual trove of answers, can be found mostly in closets. Pick one, root around in there, and pull out every single thing until it’s completely empty. What have you unearthed from those bags stashed way back in the corner? What was harboring in those cute little decorator boxes on the top shelf?
The most important question: do you still need it?
Is anything re-useable in another form, such as fabric from old clothing? Is anything gift-worthy to give to someone else? Can something be dolled up with dye, new buttons, different accessories, or trim to make a new look? Is there another room this item can be used in besides the obvious manufacturer-designated one? How can you make the best of it?
Another good place for rooting around in is the kitchen. How many appliances do you have, still in boxes, unused, from holidays past? What do you really use a lot, and what can you get rid of (either by gifting, donation, or yard sale)? Take a closer look at seasonal things too—not just the everyday stuff. Do you really need Santa eggnog glasses taking up that shelf space when you only use them about 1/12 of the year? Won’t another regularly-used glass suffice?
I would be remiss if I left out the bathroom. Lay out and assess those cosmetics and medicine cabinet doodads, including under the sink vanity area too. What do you absolutely use regularly, and what can you part with? Is anything gift-worthy, donation fodder, or yard sale fodder? Can anything be used in another form or manner? I recommend sticking to one makeup/nail color scheme, one perfume, one shampoo/conditioner, one hair spray (if used), and as few stomach remedies as you can get away with.
Another idea for looking at: the walls. Is the amount of stuff hanging from your walls too little, just right, or too much? Perhaps some of your once-treasured art pieces, mirrors, and other hanging bric-a-brac could use a new home—whether it’s just a new location in the room, a whole new room, or a whole new address. Is any of it gift, donation, or yard sale fodder?
Then, there’s the living room. Something that really irritates me about furniture is how sales showrooms group living room sets together in couch-loveseat-chair scenarios, never acknowledging that some of us don’t have as much square footage for “living” as their well-appointed showroom partitions do. Display designers assume you have a house, and the living room to go with it, otherwise you wouldn’t be coming to buy real full-size furniture. The truth is that you DON’T need to have the usual 3-piece living room group when a loveseat alone will do. Sometimes a lamp and end table will suffice, instead of the coffee table-two end tables-sofa table group they WANT you to buy, plus the matched lamp set. Once again, you have to look around and ask if anything’s re-useable in another location, gift-worthy, donation-worthy, or yard sale fodder.
Conversely, there’s always the flip-side: not having enough (or not seeming to). How can you make the best of THAT situation? By making less do more with double-duty clothing, furniture, cosmetics, kitchen contents, art objects, you name it. Imagination and creativity are good friends to have around in this instance—don’t be afraid to call upon them often.
Instead of simply buying more or getting more, start innovating more. Make the best of everything you have, and quit trying to have the best of everything. You’ll be much happier!
Friday, January 23, 2009
Timely Rerun: Timeless Moves You Can Make to Maximize Earnings and Minimize Taxes
...as long as Obama doesn't mess with the tax code in a major way. So far, it looks like he'll only ADD to the ways you can minimize taxes--but the other shoe hasn't dropped yet. Article originally written in 2005, then updated in 2008.
_________________________________________________________
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 (so long as Obama restrains himself, which I'm confident he will--he pays taxes too!).
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: Just got fired? Negotiate for better severance.
· 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 stimulus check if you get one).
UPDATE: Don't forget the Earned Income Credit--you DON'T have to have kids to qualify, but you DO have income limits:
As a general rule, eligibility guidelines for the Earned Income Tax Credit require an adjusted gross income of less than:
- $38,646 for an individual with two or more qualifying children, or $41,646 for a married couple with two or more children.
- $33,995 for an individual with one child; $36,995 for a married couple with one child.
- $12,880 for an individual with no children; $15,880 for a married couple with no children.
The maximum credit for a family with two or more children is $4,824; with one child, $2,917; with no children, $438.
People who consistently fail to claim the credit are people whose incomes are so low - below $17,000 - that they are not required to file tax returns. By not filing returns, those people fail to claim the credit, which they could receive as a refund.
Two other groups that often fail to claim the credit are people who work but don't have children and older people who are raising grandchildren. People older than age 65 are generally not eligible, but can be eligible if they are raising grandchildren.
· 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.
_________________________________________________________
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 (so long as Obama restrains himself, which I'm confident he will--he pays taxes too!).
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: Just got fired? Negotiate for better severance.
· 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 stimulus check if you get one).
UPDATE: Don't forget the Earned Income Credit--you DON'T have to have kids to qualify, but you DO have income limits:
As a general rule, eligibility guidelines for the Earned Income Tax Credit require an adjusted gross income of less than:
- $38,646 for an individual with two or more qualifying children, or $41,646 for a married couple with two or more children.
- $33,995 for an individual with one child; $36,995 for a married couple with one child.
- $12,880 for an individual with no children; $15,880 for a married couple with no children.
The maximum credit for a family with two or more children is $4,824; with one child, $2,917; with no children, $438.
People who consistently fail to claim the credit are people whose incomes are so low - below $17,000 - that they are not required to file tax returns. By not filing returns, those people fail to claim the credit, which they could receive as a refund.
Two other groups that often fail to claim the credit are people who work but don't have children and older people who are raising grandchildren. People older than age 65 are generally not eligible, but can be eligible if they are raising grandchildren.
· 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, January 20, 2009
Rerun: Skipping EVEN MORE Nickels and Dimes for Bigger Savings
Originally written back in 2005, and updated in 2007. I thought it was pertinent in these times.
___________________________________________________________
Back in 2005, I was reading a book called "Getting All You Can with What You’ve Got", and noticed this sad but true little ditty: "Too many of us are guilty of nickel-and-dime thinking when we seek to save money." Then, I identified some of the places we tend to nickel-and-dime ourselves to death in futile efforts to save (way beyond coupons, rebates, and prices per unit)…sometimes without even realizing it. Since then, I updated a few to reflect other ways I’ve since discovered:
• Investing—Buy stocks direct when possible by participating in DRIPs and DSPs from companies that offer "direct-to-customer" purchase options, etc. You can also buy and sell individual stocks through an ICN (independent commission network) without paying more than pennies per share in commissions, although the annual ICN membership is expensive. A site called EX24 allows members to buy and sell shares amongst themselves for small fees. Bonds, of course, can be purchased through Treasury Direct. Mutual funds, indexes, and ETFs are still another way to go.
Why pay hefty commissions and fees to anyone ever again?
• Durable Goods—Buy directly from the maker when you can, and if not, consider Amish or antique goods. For appliances and other goods, do your research on energy efficiency and reliability through independent sources other than Consumer Reports, because a conflict of interest exists between advertisers and test results. Above all, be patient when searching for the perfect durable good, because it may take some time before you find it at, or negotiate it to, your price. Figure out what you need, do the research, and keep your eyes open.
• Cars—Buy from the owner and not the dealer. Dealers are in business to make money...BIG money. They take cars in trade, offering about half what the Kelley Blue Book says they're worth, then turn around and sell them for twice what Kelley says the value is. Owners tend to stick to the Kelley numbers, which reflect the true worth of the car at the time, in the current condition. Just to be sure, do some research on Kelley and check out the car yourself—know what the car’s actually worth before buying.
Update: current day “bling” isn’t worth anything unless it’s listed in the Kelley or NADA book as a manufacturer’s option. Everything’s negotiable, so learn to negotiate!
• Gemstones—another high-margin item for retailers. Let me start by saying that diamonds in particular are NOT precious commodities—De Beers has got a stranglehold on the market. Diamonds are actually quite common for being nothing more than pressurized carbon, and huge numbers are being kept in vaults to promote the concept of scarcity. Demand for “scarcity” drives prices up, and it serves to keep prices high.
To cut down gem prices DRASTICALLY, take a gem enthusiast with a loupe to area pawnshops and estate sales, check out the inventory, and make an offer on a suitable piece (remember: you’re judging the stone, not the setting). Take your purchase for a new setting. Better yet, learn how to perform this entire process for yourself—from gem grading and valuation, through price haggling, to making new settings.
When completed, have your “new” ring appraised at another retailer—chances are very good it appraises at 250% or more than what you paid for it. Now you see the markup scheme jewelry stores use on unsuspecting customers. As you may have already guessed, jewelry refurbishment and resale would make a dandy small business.
Another alternative: lab-grown gems and cubic zirconia make worthwhile substitutes, with much smaller price tags. Unless the intended recipient is a jewelry expert, chances are very good he/she won’t be able to tell the difference.
• Household items and clothing—Of course, you know this one...yard sales and freebies. If something isn’t given away free, then buy from the owner and not a retail outlet (such as a thrift store). Retail outlets are in business to make money, and in the case of thrift stores, most of their merchandise was free donations to start with—this means the profit margin per item is quite high (believe me, I worked in one). Regular so-called “discount” retailers buy their goods overseas for pennies per piece, and sell to us for what we think are bargains (I also worked for Target).
• Livelihood—This may be trickier to accomplish, but by all means give it a go...WORKING FOR YOURSELF. The middleman here is your employer, who is in business to make money. By pre-determining how much your service is worth to the business (by your salary or wage—regardless of your market value), then taking a cut just to cover payroll needs, the boss is effectively squelching your earning power. Consultants get paid 3-4 times your rate for the same job performed, so why shouldn’t you? Do the research before stepping out on your own (cost-benefit analysis, tax consequences, etc.).
Another method: creating passive income through rental real estate, a sideline business, etc. This creates the “third income” in a two-earner household, allowing one or both earners to back away from the grindstone a little, either in conjunction with or as a substitute for frugal living methods. Working harder doesn’t necessarily mean working SMARTER.
• Home purchase—Buy direct from the owner whenever possible. Sales commissions amount to at least 6% of your purchase price—more for hotter markets. To save even more, build one yourself (or have it built for you), because contractors buy wholesale, build wholesale, then mark up the merchandise to market value for real estate agents...and then the agents tack on their commissions...and you see where this ball's rolling.
If you have time, try checking out tax lien and deed sales—by purchasing someone else’s unpaid property tax note for a few thousand dollars from your local tax collector, then waiting a year or two (or immediately in the case of deeds), you just might wind up with the property instead of your money back plus interest. Check with your local tax collection agency for details, as some states have tax lien certificates instead of tax deeds.
Update: Another source for cheaper homes is the bankruptcy/foreclosure market—leads can be found in your local paper’s “legal notices” section (pre-foreclosure) or in a bank’s REO department (post-foreclosure). You might have to deal with courts and lenders, but the discount can be worth it. Negotiating skills are a must here—know how much that house is worth in market value AND rental value (to recoup the total ownership costs) before signing on the dotted line.
• Home mortgages—No matter how long you intend to stay in your home, an ARM is the loan type for you if you are a perennial principal pre-payer (pays excess principal every month) and interest rates are steady or high-and-falling. ARM rates will always be lower than fixed rates, and quickly dwindling principal will incur a much smaller interest charge each month than with a fixed-rate loan. The interest savings will snowball over the life of your loan. Why not make the interest rate laws of physics work for you?
Update: when interest rates are low and climbing, a fixed rate mortgage is best for initial financing, but a long-term ARM will do. When interest rates are high and falling, an ARM with an extremely short term is best, and refinancing from fixed to ARM is actually cheaper in total interest outlay WHEN EXTRA PRINCIPAL IS CONSISTENTLY APPLIED. People got into the ARM jam by applying the wrong loan at the wrong time--they got in when the interest rates were headed UP. Had they got in when rates were headed DOWN, they would probably still have their homes today, and the economy wouldn't be in so much mess.
• Borrowing money—Instead of schlepping to your bank and filling out papers for a loan (at exorbitant interest rates), borrow against your house. The rates are a whole lot cheaper because you have collateral that isn't likely to disappear overnight or suddenly plummet in value. Second mortgage money is cheap compared to regular loan rates, and the debt erases itself when you either pay the loan off or sell the property. This is called “wholesale borrowing.” A car may disappear (theft) or suddenly plummet in value due to an accident or other damage, so it isn't suitable for a collateralized loan. The risk is reflected in the interest rates. Minimize your loan officer’s risk and your interest rate by using more durable and reliable collateral.
• Taxes—It always pays BIG TIME to know the tax code, how it applies to you, and how it could apply to you. Loopholes abound in it, and it pays to know how to use them (just like the rich and corporations do). Congress invents them, and always manages to create more loopholes than it takes away every year.
Update: Paid tax preparers and tax preparation software can easily net you 10 times (or more) what they cost to use, and what you would likely get back on your own, so don’t be afraid to use them if you have lots of deductions or are a huge saver—there are more new credits and deductions for various savings programs than ever before, and it’s hard to keep up with them all.
• Insurance as estate planning tool—Whole life policies are a way of leaving your heirs money without having the worries of probate or estate tax bills. Use term life insurance for yourself, but any excess monies meant for beneficiaries should be used to buy a whole life policy for them to borrow against (and not repay), or to be a beneficiary of, when it comes time to collect an inheritance. Repayment of borrowed principal is NOT required, because the only consequence is a lower policy face value. Since this insurance is just a wealth vehicle and not meant for actual coverage, policy face value is of no concern. Insurance proceeds are NOT taxable in any way, shape, or form, and there is no limit to the number of policies one can own. This method is a whole lot simpler (and probably cheaper) than setting up a trust of some sort.
Estate planning update: see the “Stretch IRA” method as a way to expand your Roth IRA to cover more than just your retirement needs—it can cover generations if done properly.
• Grocery shopping simplified—Throw away your coupons, rebates, price books, and your warehouse store cards too--super-sized groceries have the same effect as McMeals. Focus on buying wholesale instead of nitpicking over per-unit retail prices by going directly to the growers: farmers and ranchers. Grocery store chains buy large volumes wholesale from suppliers (who buy from farmers and ranchers), and then it all gets jacked up to make money for overhead costs and profit.
A new method: shorten the shopping list by determining what foods your family REALLY needs to acquire and maintain superior health—you’ll find that many previously-bought “touchstone” foods like dairy and grains aren’t really necessary for anything, despite what the Food Pyramid and Fiber Police have to say. By focusing on better, higher-antioxidant foods and more nutritious meats (grass-fed), you’ll make your food dollar go further than just merely preventing hunger. Think quality of food rather than quantity when determining best sources.
• Nutrition—Next time you go to a warehouse store, take a look at other people’s carts…you’ll see mostly junk food in village-sized portions. Not many are buying the healthier stuff (if you can call it that)--the produce, the eggs, and the meat.
None of your formerly-used shopping tools will help you to buy better quality food, direct from the producer...only cheaper processed foods full of questionable ingredients.
Take a look at the labels, and count the ingredients you can't pronounce or explain to a child. Nothing good ever came out of a box or can. A jar, sometimes—provided someone familiar put it in there to begin with (by canning and preserving).
The concept of wholesale food buying entails going directly to the growers and producers for your food. This way, you can ask questions like:
1. where it came from (place of origin)
2. what was used to feed and/or fertilize it
3. how long it took to get from farm to market, and did it freeze along the way
4. what alterations have been made, such as GM, hormones/antibiotics, etc.
By buying directly from the grower/producer, you cut out the entire retail level of food selling. You almost certainly will be paying less (except in the case of organics) for better quality without fuss, bother, or effort. Learn where the nearest farmer's market, u-pick farm, CSA (community-supported agriculture), or food co-op is, and start shopping at Mother Nature’s stores. Or, if you have room, go one better and grow your own!
Another method: take another look at those labels—do they serve as a WARNING rather than a source of information? Why not strive to buy foods with fewer or no “warnings” on them, like fresh fruits, vegetables, meats, and eggs? I’ve found that the fewer labeled foods I buy (within known parameters), the better my health gets. Cheese, celery, and Asian greens are known to be salt-laden (according to the USDA nutrient database), so I avoid those.
• Organics—Your money is best spent on meats, dairy, eggs, and produce you plan to eat with the skin on, or has a thin skin that can be penetrated by chemicals. Pre-packaged food items defeat the purpose of buying organic because shelf and/or freezer life must be extended with some kind of chemicals, and a lot of these foods defeat the purpose of eating organically, such as toaster pastries—junk food is junk food, no matter how well it’s disguised.
Growing your own produce, hunting your own meat, and fishing your own fish comes in handy for drastically cutting costs.
• Health Care—A published medical study discovered that an apple a day DOES keep the doctor away (as long as it’s a high TAC one—Washington Delicious or Granny Smith), suggesting that most of us really need a corrective eating plan instead of more pills.
Get more bang for your food buck by making it cover your future health care costs as well as your hunger. Fresh is best, and direct-from-grower is as fresh as it gets these days. Granted, you shop for food more often (at least weekly), but the payoff is worth it! Raw, well-washed veggies (organic or not), high on the TAC antioxidant list, are where the nutrients are, and fish or eggs contain the highest level of protein when compared to other meats. Focus on these foods, and lose or minimize the rest. Spending more wisely with food quality in mind is a "different" sort of investing—in your HEALTH future.
Streamlining and improving your food choices will lead to more cupboard and refrigerator/freezer space, more time and money for other things, weight loss (which leads to less spent on clothing, less closet space needed, and less laundry), and improved health. Better nutrition also leads to more energy, less stress, slowed aging, and less susceptibility to sickness, both obvious and hidden (blood pressure, cholesterol, etc.)
Convenience foods cost us in many ways, and they really aren’t so “convenient” after all—especially when you discover that you really don’t need any of them!
• Social Security—Why depend on Uncle Sam to save you in your golden years, when you can make better use of the savings vehicles Congress gives you?
There is one little-known tidbit called “self-directed pensions” that will allow you to leapfrog your retirement savings beyond the usual standard stock-and-bond offerings. Self-directed IRAs (both Roth and traditional), held at designated independent trustees’ offices, allow you to take advantage of a Congress- and IRS-approved law that allows you to invest your retirement money in real estate tax liens or deeds of trust, real estate options on land or residential rentals, discounted mortgages, land lease limited partnerships, and vacant land or lots.
The only things you CANNOT legally invest your IRA money in are:
--collectibles (wine, art, stamps, coins, cars, sports memorabilia, etc.)
--a business which you own more than 5%
--any investment where your IRA would be used as collateral for a loan (such as a mortgage).
If you buy real estate to keep (using your Roth IRA) through tax liens or deed sales, and hold the property for appreciation until retirement age, you can legally take “a house” as a distribution, making it a personal asset and no longer an IRA-held asset—and no taxes incurred until you sell (hopefully after two years to take advantage of new sales rules). Even those taxes can be forestalled with a property exchange or keeping the property proceeds under $250k for singles and $500k for couples.
If the real estate isn’t a keeper, then the property gets fixed up (using IRA money) and sold, with sales proceeds go directly back into the IRA account (through the trustee). The whole process gets repeated over and over—this is a way to make a $2k-$10k investment in someone’s back taxes and tax-forfeited property (through the trustee using your IRA money) into an $80k-$100k market-value investment in a short time.
If you wind up buying the tax note (lien) and the current property owner redeems it quickly, you’ve at least made better returns than bonds or CDs pay out.
If you decide to use the funds from your traditional IRA to perform such maneuvers (outside the independent trustee), taxes will be incurred the moment you take distribution of any money or property that comes from this IRA account.
It makes more sense to build up your Roth account and make it self-directed—more investing opportunity with less tax hassles later. You lose the traditional IRA deduction (up to $800), but make up for it with the Savings Credit (up to $2000).
With all this retirement fund opportunity available, who needs to rely on a Social Security check now, considering the shaky state of the system’s future, and the lousy options we're given to deal with it?
Update: there are so many things that can be done with a Roth IRA, for your own retirement as well as future generations—look into the “Stretch IRA” information as a way of funding your own grandkids’ Social Security shortfalls and program evaporation.
• Organization-Use the 80/20 Principle in your life: keep the most effective 20%, and shed the marginal 80% (corporations call this more with less…sound familiar?). Get 80% of the stuff done in 20% of the time. Get 80% of your nutrients with 20% of the food (and spend only about 20% of what you used to in money and preparation time). Do 80% or more of your shopping at one location, without regard to loss leaders or per-unit pricing. Do 80% of your living with 20% less space, money, and material goods. Less is more.
And lastly, exercise patience--good things come to those who wait, like lower prices from falling demand.
___________________________________________________________
Back in 2005, I was reading a book called "Getting All You Can with What You’ve Got", and noticed this sad but true little ditty: "Too many of us are guilty of nickel-and-dime thinking when we seek to save money." Then, I identified some of the places we tend to nickel-and-dime ourselves to death in futile efforts to save (way beyond coupons, rebates, and prices per unit)…sometimes without even realizing it. Since then, I updated a few to reflect other ways I’ve since discovered:
• Investing—Buy stocks direct when possible by participating in DRIPs and DSPs from companies that offer "direct-to-customer" purchase options, etc. You can also buy and sell individual stocks through an ICN (independent commission network) without paying more than pennies per share in commissions, although the annual ICN membership is expensive. A site called EX24 allows members to buy and sell shares amongst themselves for small fees. Bonds, of course, can be purchased through Treasury Direct. Mutual funds, indexes, and ETFs are still another way to go.
Why pay hefty commissions and fees to anyone ever again?
• Durable Goods—Buy directly from the maker when you can, and if not, consider Amish or antique goods. For appliances and other goods, do your research on energy efficiency and reliability through independent sources other than Consumer Reports, because a conflict of interest exists between advertisers and test results. Above all, be patient when searching for the perfect durable good, because it may take some time before you find it at, or negotiate it to, your price. Figure out what you need, do the research, and keep your eyes open.
• Cars—Buy from the owner and not the dealer. Dealers are in business to make money...BIG money. They take cars in trade, offering about half what the Kelley Blue Book says they're worth, then turn around and sell them for twice what Kelley says the value is. Owners tend to stick to the Kelley numbers, which reflect the true worth of the car at the time, in the current condition. Just to be sure, do some research on Kelley and check out the car yourself—know what the car’s actually worth before buying.
Update: current day “bling” isn’t worth anything unless it’s listed in the Kelley or NADA book as a manufacturer’s option. Everything’s negotiable, so learn to negotiate!
• Gemstones—another high-margin item for retailers. Let me start by saying that diamonds in particular are NOT precious commodities—De Beers has got a stranglehold on the market. Diamonds are actually quite common for being nothing more than pressurized carbon, and huge numbers are being kept in vaults to promote the concept of scarcity. Demand for “scarcity” drives prices up, and it serves to keep prices high.
To cut down gem prices DRASTICALLY, take a gem enthusiast with a loupe to area pawnshops and estate sales, check out the inventory, and make an offer on a suitable piece (remember: you’re judging the stone, not the setting). Take your purchase for a new setting. Better yet, learn how to perform this entire process for yourself—from gem grading and valuation, through price haggling, to making new settings.
When completed, have your “new” ring appraised at another retailer—chances are very good it appraises at 250% or more than what you paid for it. Now you see the markup scheme jewelry stores use on unsuspecting customers. As you may have already guessed, jewelry refurbishment and resale would make a dandy small business.
Another alternative: lab-grown gems and cubic zirconia make worthwhile substitutes, with much smaller price tags. Unless the intended recipient is a jewelry expert, chances are very good he/she won’t be able to tell the difference.
• Household items and clothing—Of course, you know this one...yard sales and freebies. If something isn’t given away free, then buy from the owner and not a retail outlet (such as a thrift store). Retail outlets are in business to make money, and in the case of thrift stores, most of their merchandise was free donations to start with—this means the profit margin per item is quite high (believe me, I worked in one). Regular so-called “discount” retailers buy their goods overseas for pennies per piece, and sell to us for what we think are bargains (I also worked for Target).
• Livelihood—This may be trickier to accomplish, but by all means give it a go...WORKING FOR YOURSELF. The middleman here is your employer, who is in business to make money. By pre-determining how much your service is worth to the business (by your salary or wage—regardless of your market value), then taking a cut just to cover payroll needs, the boss is effectively squelching your earning power. Consultants get paid 3-4 times your rate for the same job performed, so why shouldn’t you? Do the research before stepping out on your own (cost-benefit analysis, tax consequences, etc.).
Another method: creating passive income through rental real estate, a sideline business, etc. This creates the “third income” in a two-earner household, allowing one or both earners to back away from the grindstone a little, either in conjunction with or as a substitute for frugal living methods. Working harder doesn’t necessarily mean working SMARTER.
• Home purchase—Buy direct from the owner whenever possible. Sales commissions amount to at least 6% of your purchase price—more for hotter markets. To save even more, build one yourself (or have it built for you), because contractors buy wholesale, build wholesale, then mark up the merchandise to market value for real estate agents...and then the agents tack on their commissions...and you see where this ball's rolling.
If you have time, try checking out tax lien and deed sales—by purchasing someone else’s unpaid property tax note for a few thousand dollars from your local tax collector, then waiting a year or two (or immediately in the case of deeds), you just might wind up with the property instead of your money back plus interest. Check with your local tax collection agency for details, as some states have tax lien certificates instead of tax deeds.
Update: Another source for cheaper homes is the bankruptcy/foreclosure market—leads can be found in your local paper’s “legal notices” section (pre-foreclosure) or in a bank’s REO department (post-foreclosure). You might have to deal with courts and lenders, but the discount can be worth it. Negotiating skills are a must here—know how much that house is worth in market value AND rental value (to recoup the total ownership costs) before signing on the dotted line.
• Home mortgages—No matter how long you intend to stay in your home, an ARM is the loan type for you if you are a perennial principal pre-payer (pays excess principal every month) and interest rates are steady or high-and-falling. ARM rates will always be lower than fixed rates, and quickly dwindling principal will incur a much smaller interest charge each month than with a fixed-rate loan. The interest savings will snowball over the life of your loan. Why not make the interest rate laws of physics work for you?
Update: when interest rates are low and climbing, a fixed rate mortgage is best for initial financing, but a long-term ARM will do. When interest rates are high and falling, an ARM with an extremely short term is best, and refinancing from fixed to ARM is actually cheaper in total interest outlay WHEN EXTRA PRINCIPAL IS CONSISTENTLY APPLIED. People got into the ARM jam by applying the wrong loan at the wrong time--they got in when the interest rates were headed UP. Had they got in when rates were headed DOWN, they would probably still have their homes today, and the economy wouldn't be in so much mess.
• Borrowing money—Instead of schlepping to your bank and filling out papers for a loan (at exorbitant interest rates), borrow against your house. The rates are a whole lot cheaper because you have collateral that isn't likely to disappear overnight or suddenly plummet in value. Second mortgage money is cheap compared to regular loan rates, and the debt erases itself when you either pay the loan off or sell the property. This is called “wholesale borrowing.” A car may disappear (theft) or suddenly plummet in value due to an accident or other damage, so it isn't suitable for a collateralized loan. The risk is reflected in the interest rates. Minimize your loan officer’s risk and your interest rate by using more durable and reliable collateral.
• Taxes—It always pays BIG TIME to know the tax code, how it applies to you, and how it could apply to you. Loopholes abound in it, and it pays to know how to use them (just like the rich and corporations do). Congress invents them, and always manages to create more loopholes than it takes away every year.
Update: Paid tax preparers and tax preparation software can easily net you 10 times (or more) what they cost to use, and what you would likely get back on your own, so don’t be afraid to use them if you have lots of deductions or are a huge saver—there are more new credits and deductions for various savings programs than ever before, and it’s hard to keep up with them all.
• Insurance as estate planning tool—Whole life policies are a way of leaving your heirs money without having the worries of probate or estate tax bills. Use term life insurance for yourself, but any excess monies meant for beneficiaries should be used to buy a whole life policy for them to borrow against (and not repay), or to be a beneficiary of, when it comes time to collect an inheritance. Repayment of borrowed principal is NOT required, because the only consequence is a lower policy face value. Since this insurance is just a wealth vehicle and not meant for actual coverage, policy face value is of no concern. Insurance proceeds are NOT taxable in any way, shape, or form, and there is no limit to the number of policies one can own. This method is a whole lot simpler (and probably cheaper) than setting up a trust of some sort.
Estate planning update: see the “Stretch IRA” method as a way to expand your Roth IRA to cover more than just your retirement needs—it can cover generations if done properly.
• Grocery shopping simplified—Throw away your coupons, rebates, price books, and your warehouse store cards too--super-sized groceries have the same effect as McMeals. Focus on buying wholesale instead of nitpicking over per-unit retail prices by going directly to the growers: farmers and ranchers. Grocery store chains buy large volumes wholesale from suppliers (who buy from farmers and ranchers), and then it all gets jacked up to make money for overhead costs and profit.
A new method: shorten the shopping list by determining what foods your family REALLY needs to acquire and maintain superior health—you’ll find that many previously-bought “touchstone” foods like dairy and grains aren’t really necessary for anything, despite what the Food Pyramid and Fiber Police have to say. By focusing on better, higher-antioxidant foods and more nutritious meats (grass-fed), you’ll make your food dollar go further than just merely preventing hunger. Think quality of food rather than quantity when determining best sources.
• Nutrition—Next time you go to a warehouse store, take a look at other people’s carts…you’ll see mostly junk food in village-sized portions. Not many are buying the healthier stuff (if you can call it that)--the produce, the eggs, and the meat.
None of your formerly-used shopping tools will help you to buy better quality food, direct from the producer...only cheaper processed foods full of questionable ingredients.
Take a look at the labels, and count the ingredients you can't pronounce or explain to a child. Nothing good ever came out of a box or can. A jar, sometimes—provided someone familiar put it in there to begin with (by canning and preserving).
The concept of wholesale food buying entails going directly to the growers and producers for your food. This way, you can ask questions like:
1. where it came from (place of origin)
2. what was used to feed and/or fertilize it
3. how long it took to get from farm to market, and did it freeze along the way
4. what alterations have been made, such as GM, hormones/antibiotics, etc.
By buying directly from the grower/producer, you cut out the entire retail level of food selling. You almost certainly will be paying less (except in the case of organics) for better quality without fuss, bother, or effort. Learn where the nearest farmer's market, u-pick farm, CSA (community-supported agriculture), or food co-op is, and start shopping at Mother Nature’s stores. Or, if you have room, go one better and grow your own!
Another method: take another look at those labels—do they serve as a WARNING rather than a source of information? Why not strive to buy foods with fewer or no “warnings” on them, like fresh fruits, vegetables, meats, and eggs? I’ve found that the fewer labeled foods I buy (within known parameters), the better my health gets. Cheese, celery, and Asian greens are known to be salt-laden (according to the USDA nutrient database), so I avoid those.
• Organics—Your money is best spent on meats, dairy, eggs, and produce you plan to eat with the skin on, or has a thin skin that can be penetrated by chemicals. Pre-packaged food items defeat the purpose of buying organic because shelf and/or freezer life must be extended with some kind of chemicals, and a lot of these foods defeat the purpose of eating organically, such as toaster pastries—junk food is junk food, no matter how well it’s disguised.
Growing your own produce, hunting your own meat, and fishing your own fish comes in handy for drastically cutting costs.
• Health Care—A published medical study discovered that an apple a day DOES keep the doctor away (as long as it’s a high TAC one—Washington Delicious or Granny Smith), suggesting that most of us really need a corrective eating plan instead of more pills.
Get more bang for your food buck by making it cover your future health care costs as well as your hunger. Fresh is best, and direct-from-grower is as fresh as it gets these days. Granted, you shop for food more often (at least weekly), but the payoff is worth it! Raw, well-washed veggies (organic or not), high on the TAC antioxidant list, are where the nutrients are, and fish or eggs contain the highest level of protein when compared to other meats. Focus on these foods, and lose or minimize the rest. Spending more wisely with food quality in mind is a "different" sort of investing—in your HEALTH future.
Streamlining and improving your food choices will lead to more cupboard and refrigerator/freezer space, more time and money for other things, weight loss (which leads to less spent on clothing, less closet space needed, and less laundry), and improved health. Better nutrition also leads to more energy, less stress, slowed aging, and less susceptibility to sickness, both obvious and hidden (blood pressure, cholesterol, etc.)
Convenience foods cost us in many ways, and they really aren’t so “convenient” after all—especially when you discover that you really don’t need any of them!
• Social Security—Why depend on Uncle Sam to save you in your golden years, when you can make better use of the savings vehicles Congress gives you?
There is one little-known tidbit called “self-directed pensions” that will allow you to leapfrog your retirement savings beyond the usual standard stock-and-bond offerings. Self-directed IRAs (both Roth and traditional), held at designated independent trustees’ offices, allow you to take advantage of a Congress- and IRS-approved law that allows you to invest your retirement money in real estate tax liens or deeds of trust, real estate options on land or residential rentals, discounted mortgages, land lease limited partnerships, and vacant land or lots.
The only things you CANNOT legally invest your IRA money in are:
--collectibles (wine, art, stamps, coins, cars, sports memorabilia, etc.)
--a business which you own more than 5%
--any investment where your IRA would be used as collateral for a loan (such as a mortgage).
If you buy real estate to keep (using your Roth IRA) through tax liens or deed sales, and hold the property for appreciation until retirement age, you can legally take “a house” as a distribution, making it a personal asset and no longer an IRA-held asset—and no taxes incurred until you sell (hopefully after two years to take advantage of new sales rules). Even those taxes can be forestalled with a property exchange or keeping the property proceeds under $250k for singles and $500k for couples.
If the real estate isn’t a keeper, then the property gets fixed up (using IRA money) and sold, with sales proceeds go directly back into the IRA account (through the trustee). The whole process gets repeated over and over—this is a way to make a $2k-$10k investment in someone’s back taxes and tax-forfeited property (through the trustee using your IRA money) into an $80k-$100k market-value investment in a short time.
If you wind up buying the tax note (lien) and the current property owner redeems it quickly, you’ve at least made better returns than bonds or CDs pay out.
If you decide to use the funds from your traditional IRA to perform such maneuvers (outside the independent trustee), taxes will be incurred the moment you take distribution of any money or property that comes from this IRA account.
It makes more sense to build up your Roth account and make it self-directed—more investing opportunity with less tax hassles later. You lose the traditional IRA deduction (up to $800), but make up for it with the Savings Credit (up to $2000).
With all this retirement fund opportunity available, who needs to rely on a Social Security check now, considering the shaky state of the system’s future, and the lousy options we're given to deal with it?
Update: there are so many things that can be done with a Roth IRA, for your own retirement as well as future generations—look into the “Stretch IRA” information as a way of funding your own grandkids’ Social Security shortfalls and program evaporation.
• Organization-Use the 80/20 Principle in your life: keep the most effective 20%, and shed the marginal 80% (corporations call this more with less…sound familiar?). Get 80% of the stuff done in 20% of the time. Get 80% of your nutrients with 20% of the food (and spend only about 20% of what you used to in money and preparation time). Do 80% or more of your shopping at one location, without regard to loss leaders or per-unit pricing. Do 80% of your living with 20% less space, money, and material goods. Less is more.
And lastly, exercise patience--good things come to those who wait, like lower prices from falling demand.
Monday, January 19, 2009
Thursday, January 15, 2009
Fireproof Your Job
From CNN Money.
The CliffNotes version:
1. Stand out and step up
2. Be a money-maker
3. Don't be a Debbie Downer
4. Increase your value
5. Go beyond your job description
6. Make a sacrifice
I wrote my own versions of this list several times in the past:
Why Women Earn Less
Timeless Moves You Can Make to Maximize Earnings...
The New Flex Force
Making Pay Cuts Work FOR You
Working For Perks and Benefits (2008)
The Truth About the Economy and Job Creation
And lastly, Bail Yourself Out in 2009
The CliffNotes version:
1. Stand out and step up
2. Be a money-maker
3. Don't be a Debbie Downer
4. Increase your value
5. Go beyond your job description
6. Make a sacrifice
I wrote my own versions of this list several times in the past:
Why Women Earn Less
Timeless Moves You Can Make to Maximize Earnings...
The New Flex Force
Making Pay Cuts Work FOR You
Working For Perks and Benefits (2008)
The Truth About the Economy and Job Creation
And lastly, Bail Yourself Out in 2009
Wednesday, January 14, 2009
Update: Tax Preparation Deception and Fine Print
Original article. Back when I was getting fan mail...
“I discovered last night that by visiting the official IRS web site www.irs.gov then clicking on the tax prep program link of your choice (TaxAct, TurboTax, TaxSlayer, etc..), the program and filing your taxes electronically are free! However, if you go directly to one of those sites without linking to it from the IRS site, you will be charged (around $15) for use of the program and charged again to file electronically! Isn't that amazing? Of course, none of the tax prep program web sites tell you this! Hope it helps someone else save $30! ”
Welcome to the world of reality—there’s no such thing as a free lunch. Not only that, but government agencies cannot secure their own websites enough for you to file something like a simple tax return online.
The sting: you can FILE with the IRS for free, but the document has to come from an approved tax form-completion source, such as the tax programs mentioned, or other commercial preparers (H&R Block, Jackson-Hewitt, etc.) for encryption reasons.
The IRS isn't in the business of online safety and security. They collect taxes--and badly at that (when Congress isn't tying their hands). You're paying the tax programs and preparers for secure transmittal as part of the fee structure. There never will be a free direct place for online tax submissions as long as the shaky, flaky internet system we have today is still in place (always vulnerable to hackers, spammers, and identity thieves), and individuals remain one step ahead of our own government in technology knowledge and how to exploit it.
UPDATE: Apparently now there IS a place where we can file electronically for free--I saw a commercial for it. The IRS also has their own version for federal taxes only.
“I discovered last night that by visiting the official IRS web site www.irs.gov then clicking on the tax prep program link of your choice (TaxAct, TurboTax, TaxSlayer, etc..), the program and filing your taxes electronically are free! However, if you go directly to one of those sites without linking to it from the IRS site, you will be charged (around $15) for use of the program and charged again to file electronically! Isn't that amazing? Of course, none of the tax prep program web sites tell you this! Hope it helps someone else save $30! ”
Welcome to the world of reality—there’s no such thing as a free lunch. Not only that, but government agencies cannot secure their own websites enough for you to file something like a simple tax return online.
The sting: you can FILE with the IRS for free, but the document has to come from an approved tax form-completion source, such as the tax programs mentioned, or other commercial preparers (H&R Block, Jackson-Hewitt, etc.) for encryption reasons.
The IRS isn't in the business of online safety and security. They collect taxes--and badly at that (when Congress isn't tying their hands). You're paying the tax programs and preparers for secure transmittal as part of the fee structure. There never will be a free direct place for online tax submissions as long as the shaky, flaky internet system we have today is still in place (always vulnerable to hackers, spammers, and identity thieves), and individuals remain one step ahead of our own government in technology knowledge and how to exploit it.
UPDATE: Apparently now there IS a place where we can file electronically for free--I saw a commercial for it. The IRS also has their own version for federal taxes only.
Saturday, January 10, 2009
Bail YOURSELF Out in 2009
From MSN Money.
Cliff Notes version:
1. Don't neglect your credit score.
2. Don't carry credit card debt.
3. Don't go overboard on home and/or auto debt.
4. Don't stiff your emergency fund.
5. Don't be a sucker.
To this, I add my CNN-sent response to the article "The Case for Doing Nothing":
"The case for doing nothing has always been here–we are just too stupid to see it or accept it.
We need jobs more than anything else, but BUYING jobs with federal tax dollars isn’t the way to do it. It must be a personal, individual endeavor, just like everything else in this world.
You out of work and want a job? MAKE ONE! If you still have a job, but live in constant fear of losing it, make yourself INDISPENSABLE! Can’t make your own job or make yourself indispensable? Marry someone who CAN!
Government SHOULD be doing nothing here–YOU are the one who should be doing something!
Anyone who relies on government to do anything else for them besides what’s laid out in the Constitution is an irresponsible, immature buffoon.
Uncle Sam is NOT your savior, even though you might put money in his collection plate!"
These are other ways to bail yourself out, as well as what's mentioned above.
Cliff Notes version:
1. Don't neglect your credit score.
2. Don't carry credit card debt.
3. Don't go overboard on home and/or auto debt.
4. Don't stiff your emergency fund.
5. Don't be a sucker.
To this, I add my CNN-sent response to the article "The Case for Doing Nothing":
"The case for doing nothing has always been here–we are just too stupid to see it or accept it.
We need jobs more than anything else, but BUYING jobs with federal tax dollars isn’t the way to do it. It must be a personal, individual endeavor, just like everything else in this world.
You out of work and want a job? MAKE ONE! If you still have a job, but live in constant fear of losing it, make yourself INDISPENSABLE! Can’t make your own job or make yourself indispensable? Marry someone who CAN!
Government SHOULD be doing nothing here–YOU are the one who should be doing something!
Anyone who relies on government to do anything else for them besides what’s laid out in the Constitution is an irresponsible, immature buffoon.
Uncle Sam is NOT your savior, even though you might put money in his collection plate!"
These are other ways to bail yourself out, as well as what's mentioned above.
Sunday, January 04, 2009
Rerun: 5 Important Life Lessons
Sometimes junk e-mail can be useful. :) This came from my junk e-mail box years ago. Sometimes it pays to hang onto stuff in a good hard drive...you never know when you'll have the opportunity to whip it out.
Update: This will be the second whip-out due to a slow news weekend.
______________________________________________________
Some Important Lessons Life Teaches You...
1 ~ Most Important Lesson
During my second month of nursing school, our professor gave us a pop quiz. I was a conscientious student and had breezed through the questions, until I read the last one:
What is the first name of the woman who cleans the school?
Surely this was some kind of joke. I had seen the cleaning woman several times. She was tall, dark-haired and in her 50s, but how would I know her name? I handed in my paper, leaving the last question blank.
Just before class ended, one student asked if the last question would count toward our quiz grade. Absolutely, said the professor. In your careers, you will meet many people. All are significant. They deserve your attention and care, even if all you do is smile and say 'hello'.
I've never forgotten that lesson. I also learned her name was Dorothy.
Second Important Lesson~ Pickup in the Rain
One night, at 11:30 PM, an older African American woman was standing on the side of an Alabama highway trying to endure a lashing rain storm. Her car had broken down and she desperately needed a ride.
Soaking wet, she decided to flag down the next car. A young white man stopped to help her, generally unheard of in those conflict-filled 1960s. The man took her to safety, helped her get assistance and put her into a taxicab. She seemed to be in a big hurry, but wrote down his address and thanked him.
Seven days went by and a knock came on the man's door. To his surprise, a giant console color TV was delivered to his home. A special note was attached. It read: Thank you so much for assisting me on the highway the other night. The rain drenched not only my clothes, but also my spirits. Then you came along. Because of you, I was able to make it to my dying husband's bedside just before he passed away. God bless you for helping me and unselfishly serving others. Sincerely, Mrs. Nat King Cole.
Third Important Lesson ~ Always Remember Those Who Serve You
In the days when an ice cream sundae cost much less, a 10 year old boy entered a hotel coffee shop and sat at a table. A waitress put a glass of water in front of him.
“How much is an ice cream sundae?” he asked.
“Fifty cents,” replied the waitress.
The little boy pulled his hand out of his pocket and studied the coins in it.
“Well, how much is a plain dish of ice cream?” he inquired. By now more people were waiting for a table and the waitress was growing impatient. “Thirty-five cents,” she brusquely replied.
The little boy again counted his coins. “ I'll have the plain ice cream,” he said.
The waitress brought the ice cream, put the bill on the table and walked away.
The boy finished the ice cream, paid the cashier and left. When the waitress came back, she began to cry as she wiped down the table. There, placed neatly beside the empty dish, were two nickels and five pennies.
You see, he couldn't have the sundae because he wanted enough left to leave her a tip.
Fourth Important Lesson ~ The Obstacle in Our Path
In ancient times, a King had a boulder placed on a roadway. Then he hid himself and watched to see if anyone would remove the huge rock. Some of the king's wealthiest merchants and courtiers came by and simply walked around it.
Many loudly blamed the king for not keeping the roads clear, but none did anything about getting the stone out of the way. Then a peasant came along carrying a load of vegetables. Upon approaching the boulder, the peasant laid down his burden and tried to move the stone to the side of the road.
After much pushing and straining, he finally succeeded. After the peasant picked up his load of vegetables, he noticed a purse lying in the road where the boulder had been.
The purse contained many gold coins and a note from the king indicating that the gold was for the person who removed the boulder from the roadway. The peasant learned what many of us never understand.
Every obstacle presents an opportunity to improve our condition.
Fifth Important Lesson ~ Giving When it Counts
Many years ago, when I worked as a volunteer at a hospital, I got to know a little girl named Liz who was suffering from a rare and serious disease.
Her only chance of recovery appeared to be a blood transfusion from her 5-year old brother, who had miraculously survived the same disease and had developed the antibodies needed to combat the illness. The doctor explained the situation to her little brother, and asked the little boy if he would be willing to give his blood to his sister.
I saw him hesitate for only a moment before taking a deep breath and saying, Yes, I'll do it if it will save her. As the transfusion progressed, he lay in bed next to his sister and smiled, as we all did, seeing the color returning to her cheeks. Then his face grew pale and his smile faded. He looked up at the doctor and asked with a trembling voice, “will I start to die right away?”
Being young, the little boy had misunderstood the doctor; he thought he was going to have to give his sister all of his blood in order to save her.
Update: This will be the second whip-out due to a slow news weekend.
______________________________________________________
Some Important Lessons Life Teaches You...
1 ~ Most Important Lesson
During my second month of nursing school, our professor gave us a pop quiz. I was a conscientious student and had breezed through the questions, until I read the last one:
What is the first name of the woman who cleans the school?
Surely this was some kind of joke. I had seen the cleaning woman several times. She was tall, dark-haired and in her 50s, but how would I know her name? I handed in my paper, leaving the last question blank.
Just before class ended, one student asked if the last question would count toward our quiz grade. Absolutely, said the professor. In your careers, you will meet many people. All are significant. They deserve your attention and care, even if all you do is smile and say 'hello'.
I've never forgotten that lesson. I also learned her name was Dorothy.
Second Important Lesson~ Pickup in the Rain
One night, at 11:30 PM, an older African American woman was standing on the side of an Alabama highway trying to endure a lashing rain storm. Her car had broken down and she desperately needed a ride.
Soaking wet, she decided to flag down the next car. A young white man stopped to help her, generally unheard of in those conflict-filled 1960s. The man took her to safety, helped her get assistance and put her into a taxicab. She seemed to be in a big hurry, but wrote down his address and thanked him.
Seven days went by and a knock came on the man's door. To his surprise, a giant console color TV was delivered to his home. A special note was attached. It read: Thank you so much for assisting me on the highway the other night. The rain drenched not only my clothes, but also my spirits. Then you came along. Because of you, I was able to make it to my dying husband's bedside just before he passed away. God bless you for helping me and unselfishly serving others. Sincerely, Mrs. Nat King Cole.
Third Important Lesson ~ Always Remember Those Who Serve You
In the days when an ice cream sundae cost much less, a 10 year old boy entered a hotel coffee shop and sat at a table. A waitress put a glass of water in front of him.
“How much is an ice cream sundae?” he asked.
“Fifty cents,” replied the waitress.
The little boy pulled his hand out of his pocket and studied the coins in it.
“Well, how much is a plain dish of ice cream?” he inquired. By now more people were waiting for a table and the waitress was growing impatient. “Thirty-five cents,” she brusquely replied.
The little boy again counted his coins. “ I'll have the plain ice cream,” he said.
The waitress brought the ice cream, put the bill on the table and walked away.
The boy finished the ice cream, paid the cashier and left. When the waitress came back, she began to cry as she wiped down the table. There, placed neatly beside the empty dish, were two nickels and five pennies.
You see, he couldn't have the sundae because he wanted enough left to leave her a tip.
Fourth Important Lesson ~ The Obstacle in Our Path
In ancient times, a King had a boulder placed on a roadway. Then he hid himself and watched to see if anyone would remove the huge rock. Some of the king's wealthiest merchants and courtiers came by and simply walked around it.
Many loudly blamed the king for not keeping the roads clear, but none did anything about getting the stone out of the way. Then a peasant came along carrying a load of vegetables. Upon approaching the boulder, the peasant laid down his burden and tried to move the stone to the side of the road.
After much pushing and straining, he finally succeeded. After the peasant picked up his load of vegetables, he noticed a purse lying in the road where the boulder had been.
The purse contained many gold coins and a note from the king indicating that the gold was for the person who removed the boulder from the roadway. The peasant learned what many of us never understand.
Every obstacle presents an opportunity to improve our condition.
Fifth Important Lesson ~ Giving When it Counts
Many years ago, when I worked as a volunteer at a hospital, I got to know a little girl named Liz who was suffering from a rare and serious disease.
Her only chance of recovery appeared to be a blood transfusion from her 5-year old brother, who had miraculously survived the same disease and had developed the antibodies needed to combat the illness. The doctor explained the situation to her little brother, and asked the little boy if he would be willing to give his blood to his sister.
I saw him hesitate for only a moment before taking a deep breath and saying, Yes, I'll do it if it will save her. As the transfusion progressed, he lay in bed next to his sister and smiled, as we all did, seeing the color returning to her cheeks. Then his face grew pale and his smile faded. He looked up at the doctor and asked with a trembling voice, “will I start to die right away?”
Being young, the little boy had misunderstood the doctor; he thought he was going to have to give his sister all of his blood in order to save her.
Thursday, January 01, 2009
Post-Holiday Commentary Update
Original post.
Update: only ONE tree this new year, and it was real and on the ground next to the dumpster. I guess there really IS a recession on!
In prior years, the dumpsters were clogged with both real and artificial trees, as well as bags of wrappings, some decorations, and so on.
Update: only ONE tree this new year, and it was real and on the ground next to the dumpster. I guess there really IS a recession on!
In prior years, the dumpsters were clogged with both real and artificial trees, as well as bags of wrappings, some decorations, and so on.
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