What do you do if the bottom falls out of your life? It has happened to millions of Americans over the last couple years. It is survivable but you have to have a plan. Many people go through life responding to the disasters that occur. It seemed that way in my life in 2008 as I watched the market collapse and my wife's retirement plan slowly crash right along with the market. She lost almost forty per cent of her plan. That was not fun, but it did not hurt us as bad as it could have. We had been planning on retiring for years. I had a heart attack in Jan 2004 and had to sell my truck and quit trucking. Fortunately we had been planning long before that and we just modified the plan. The money we got out of the truck paid off my bills from trucking. My wife fortunately had enough left when she got her cash settlement to pay off the rest of the bills and buy her a new car. That car will hopefully last us till checkout time. My car is an old beater, but it does what I need it to do. We still have a house payment for a couple of years but we had planned for that and it was in the budget.
The question is what do you do if unemployment falls on you without warning. The first thing to do is adapt and get a plan. Cut costs and figure how to stretch every dollar to the max. That starts with down sizing. Yard sales are the worst way to get rid of excess. Craigs List is a much better way, but you have to take the time to put together good adds. Where and how will you live if you lose your house. Many people do not know about tax sales, but that is a good way to get a house really, really cheap. You can often get one for less than a thousand dollars. The trick is to have the money at tax time. The best way I know to do that short of selling something is to take your tax return and put that money back till the tax sale and use it for that purpose. There is a catch though. You buy the house at the tax sale but the person who owned it has a year to redeem the house. If they do redeem it your mainly out for your time. You will get your money back with interest. As I said the catch you have to wait a year to move in. So if you get your tax return sometime between March and June you have to figure how to provide a place for you and your family to live for anywhere from eighteen to twenty months. If you use every trick in the system it can take the bank six to ten months to get you out of your present house. If you can you can make the payment right up till you move into the house you bought at tax sale. Why would you walk away from a house you can make the payment on. Well if you still have fifteen to eighteen years to go and and you are going to have a house that is worth thirty to forty percent less than you paid for it, why not. If it is nice and you like it go for it. However if you simply walk away and let the bank have it back they do not have many options. They can come after you for for the difference but you can fight that. The best argument in that situation is that you counted on their expertise and they ripped you off. The court will probably decide in your favor. Even if they force you into bankruptcy you can keep the house you are living in most of the time. That would be the one you bought at the tax sale with no payment. In the end you still get out of the debt and your now in a home with "NO PAYMENT." If you can not work it out to stay in your house at least you shortened your survival period. That takes your survival period down to eight to twelve months.
The goal is to get the house and survive the wait. Once you move in you have no payment except your property taxes and utilities. Then you can start fixing the house as you go and either make it a permanent home or you can plan the sale of the house to get you enough to live a year and then move into another tax sale house. Ideally you would buy a second house make it liveable and rent it to provide yourself some income. Doing this will be hard. If push comes to shove you can move to an area where there is some work till you can move in the house. You need to provide mowing and keep the lot neat till you can take possession of the property. That reduces the chance of vandalism.
If you decide to go this route to get a house with no payment you need to do your research before the tax sale. The county assessor will have a list of properties that may be sold at the tax sale. They will tell you how much is owed in taxes. That is your starting point. Pick several properties that fit your budget. Try to do it so you will have a few hundred left to get the utilities turned on. Once you get your list of houses try and find out if there are liens on the property. The liens will be released if you buy it, BUT it is a property that the bank or the one holding the lien may make a move to get the property. Again if you bid and get the property you will get your money back if they exercise their lien. However, that means you will be waiting another year and you do not want that. You find out about liens at the county recorders office. You can also find out who the actual owner is of the property. Once you have that information you can simply ask them if they intend to pay the taxes. Some will say yes just to keep people from bidding, You have to make your own judgment on that. If you find a property with no liens or minor liens ones up to a couple thousand dollars, they are usually by a contractor. If the owner has no intention of claiming the property you have found one to safely bid on. If the owner does not want the property try to make a deal with the lien holder to release the lien for part of the money. Now you have a property with no one going against you and you may well get the house.
How can this happen. Sometimes old people die with no Will and no heirs to leave the property to. They may have had repairs done and the contractor may simply want his money. The trick is the contractor may not know the house is available and just want his money. If you let him know it is available he may go for it. You can act like and tell them you have an interest in the house. The trick is you have to make sure they release the lien. If they do and there is no one to contest the or redeem the property you end up with a house. Sometimes a house will get into this situation because a person simply left the area and has no desire to move back to the area. You can determine this by simply contacting the owner and asking them. Often they will tell you if they are not going to redeem the house simply to get the tax collector to quit hounding them for the back taxes.
Hopefully you now can see why I say you need a plan and a budget. You need to get your self organized to get out from under the debt beast and be an property owner. One that actually owns the property. Then fix the property as you can afford it. "DO NOT GET A LOAN" it may be tempting but if you do you will end up right back where you were at. Many people do not know you can do this and therefore they do not do it.
The trick is find a modest house in a decent neighborhood and follow through with your plan. You will find some really nice homes at the tax sales. However those are usually the ones that have a loan against them that the bank will redeem to get part of their money back. Read all of my blogs on money and any other solid information you can get. If you have questions ask me and if I can answer your question I will. Thanks for reading and I hope this helped someone.
Thursday, January 12, 2012
Money, When You Are Underwater On Debt, When Is It Time To Bail Out
Underwater is a term very common today. It simply means you owe more than something is worth. It may mean you owe more than you are worth. At least in dollars and sense and not as person. Another term for the same condition is upside down. Whichever term you use and however you got there, it is not a good situation to be in. The question is how do you deal with it. Do you struggle and suffer and try to pay your way out of debt. When you find yourself in this situation it comes down to a battle between the honorable thing to do and salvaging what you can to start over. The banks and your creditors will push you to do the honorable thing. That way they get all they can out of you. However when they feel threatened they will not extend you the same courtesy. I know this from personal experience. Your duty is to yourself and those who are dependent on you.
Banks and creditors can write off debt and do not hesitate to do so. That was proven during the housing crisis and the banking crisis. Actions that put America into the sad financial situation it finds itself in today. Federal law guarantees each citizen the right to file bankruptcy when there is no hope of redeeming there situation. That law was created to give citizens a second chance and an opportunity to rebuild there life. The reality that sometimes though no fault of the borrower situations would arise where forgiving the debt was the only solution. However, be advised that certain debts are not terminated through bankruptcy. Debts to the Federal government and student loans will remain as debts even after filing bankruptcy. That being said bankruptcy is not a cure all. You need to study your own situation and make your own determination which way is the best way for you to go.
Pride and honor are important, but they are not worth putting yourself in bondage over. In the early eighties I filed bankruptcy myself. If you are interested my blog of 10/10/11 explains why and how I came to file bankruptcy in the last half of the blog. During the bankruptcy I found some of my debtors worked with me and actually tried to reach reasonable solutions. You can exclude some debt from a bankruptcy filing, but be advised that once you file the bankruptcy you are stuck with it. Under the advice of my lawyer I filed on all my debt. I owed taxes and student debt, but the rest was forgiven. I kept track of who I owed what and and after the bankruptcy I paid off several of the creditors who had tried to help me. I did not have to, I chose to. The creditors who jerked me around and caused me to have to file bankruptcy did not get a penny. I have never done business with any of them since. I am sure it did not hurt their feelings, but I also did not and do not send them any business either.
Bankruptcy will ruin your credit. That is a myth. You will have more credit opportunities thrown at you than hopefully you can deal with. The reason is they know that for seven years you can not file bankruptcy. It may hurt you when buying a house or a car, but otherwise it won't really matter. Also if you are following my plan you are working to be debt free and owe nobody anything. Once you get in that status it will not matter about a credit rating.
In closing let me say that the decision is yours and you have to make it. If you are struggling to save a house or car that you are underwater you need to ask yourself a couple questions. Is this a situation that I will be happy with when it is all resolved? If you save your honor and when you get done you are worth less than what you spent your time and money to save. Why would you do that. It is not a good business decision. If you are confidant the property will eventually recover its value or you satisfied that you are staying in the home of your dreams. Go for it. However if you will end up with far less than you put into the investment it may be time to bail and file the bankruptcy. One advantage of filing the bankruptcy you are released to move to a better location. You are free to go where there may be more opportunity. Like I said though you are the one that has to live with the decision. Do not base it all on dollars and sense. Base it on what is best for you and your future. What is best for reaching your goals in life. If you are going to put in the effort make sure that in the end it gives you what you want. If it is what you really want out of life fight for it. If it has issues and you could be just as happy starting over, start over. Just make sure when you leave you know what the shortcomings of your present house are. When you get your next one make sure it is even better or it is a step towards that better situation. Good luck in whatever you choose.
Banks and creditors can write off debt and do not hesitate to do so. That was proven during the housing crisis and the banking crisis. Actions that put America into the sad financial situation it finds itself in today. Federal law guarantees each citizen the right to file bankruptcy when there is no hope of redeeming there situation. That law was created to give citizens a second chance and an opportunity to rebuild there life. The reality that sometimes though no fault of the borrower situations would arise where forgiving the debt was the only solution. However, be advised that certain debts are not terminated through bankruptcy. Debts to the Federal government and student loans will remain as debts even after filing bankruptcy. That being said bankruptcy is not a cure all. You need to study your own situation and make your own determination which way is the best way for you to go.
Pride and honor are important, but they are not worth putting yourself in bondage over. In the early eighties I filed bankruptcy myself. If you are interested my blog of 10/10/11 explains why and how I came to file bankruptcy in the last half of the blog. During the bankruptcy I found some of my debtors worked with me and actually tried to reach reasonable solutions. You can exclude some debt from a bankruptcy filing, but be advised that once you file the bankruptcy you are stuck with it. Under the advice of my lawyer I filed on all my debt. I owed taxes and student debt, but the rest was forgiven. I kept track of who I owed what and and after the bankruptcy I paid off several of the creditors who had tried to help me. I did not have to, I chose to. The creditors who jerked me around and caused me to have to file bankruptcy did not get a penny. I have never done business with any of them since. I am sure it did not hurt their feelings, but I also did not and do not send them any business either.
Bankruptcy will ruin your credit. That is a myth. You will have more credit opportunities thrown at you than hopefully you can deal with. The reason is they know that for seven years you can not file bankruptcy. It may hurt you when buying a house or a car, but otherwise it won't really matter. Also if you are following my plan you are working to be debt free and owe nobody anything. Once you get in that status it will not matter about a credit rating.
In closing let me say that the decision is yours and you have to make it. If you are struggling to save a house or car that you are underwater you need to ask yourself a couple questions. Is this a situation that I will be happy with when it is all resolved? If you save your honor and when you get done you are worth less than what you spent your time and money to save. Why would you do that. It is not a good business decision. If you are confidant the property will eventually recover its value or you satisfied that you are staying in the home of your dreams. Go for it. However if you will end up with far less than you put into the investment it may be time to bail and file the bankruptcy. One advantage of filing the bankruptcy you are released to move to a better location. You are free to go where there may be more opportunity. Like I said though you are the one that has to live with the decision. Do not base it all on dollars and sense. Base it on what is best for you and your future. What is best for reaching your goals in life. If you are going to put in the effort make sure that in the end it gives you what you want. If it is what you really want out of life fight for it. If it has issues and you could be just as happy starting over, start over. Just make sure when you leave you know what the shortcomings of your present house are. When you get your next one make sure it is even better or it is a step towards that better situation. Good luck in whatever you choose.
Wednesday, January 4, 2012
Money, Learning To Make It Work For You, Killing The Debt Beast
How do you make your money work for you. The first thing you need is a budget. Budgets suck and they are a pain, but they work. Why do you need a budget. It tells you where your money is really going versus where you think it is going. As I said in my previous blog, you need a plan and a budget. With a plan you figure out where you want to go. With a budget you figure out how you can get to where you want to go. Budgets have three parts. At least ones for planning things. The first part is to figure out how much you need to achieve your goals. How much do you want to retire on. How much is your favorite car going to cost. How much for your dream home or vacation. That is part A. Part B is the important part. You need to account for every penny you have and how you spend it. If you already have bills. How much goes on the principal and reduces what you owe. Next figure how much you pay in interest on each bill every month. This part helps you figure out what your cost are. Which things can you change and cut back on. Or better yet totally eliminate. Finishing Plan B helps you do Part C. Part C is where you figure out the difference between A and B and establish how much you need to save or earn to realize your goal.
It is not uncommon for people to owe as much as one quarter of their income in interest on their home, car and credit cards. That means that half of your income is not yours. How is that? Remember what I said in my previous blog. The borrower is the slave of the lender. Unfortunately it is a truth that many people have fallen captive to. Fortunately bills with interest can be paid off. When the debt is eliminated the money becomes yours again. The money that was obligated for bills becomes yours to do with as you please. If you still have debt the best thing you can do is continue to pay off the debt. As you become debt free you have more money to live on. Not only that but you do not need near as much to survive. You will always have some bills like utilities and groceries but it will not take as much to pay your bills. You are moving towards real freedom. You will feel as if a burden has been taken off your back. There are several ways to get the interest burden off your back. How you do it will be determined by you and how serious you are about achieving your goals or dreams. The more of your money that is really yours, the sooner you will reach your goal.
There is another thing that is nice about living debt free. Your credit score does not matter. Banks charge you more if they think you "MIGHT" be a risk. It can be over something very minor or it could be over something that was totally out of your control. Something like a medical bill that had a very high copay or maybe you did not have insurance. So in essence you are being punished because you were poor or at least to poor to pay a very large bill that you had to pay through no fault of your own. I will touch on this issue again later when I discuss the cost versus the benefit of having health insurance. I am sort of getting off track.
You will learn something when you do a budget. The big things that most people have financed like cars, houses and credit card debt are the things that take the most out of your pay. Fortunately all these can be dealt with over time if you are serious about achieving your goals. There may come a point in life when your debt becomes overwhelming through no fault of your own. If one of you becomes unemployed it can be hard. If both it can be devastating. If you are single it may be hard to face, but most of the time going back home can give you a chance to reorganize.
At this point I am going to use a figure that is easy to work with to show what I am talking about. Say you make a $1000 a week gross income or about $4000 a month. Now right up front you loose as much as 30% for taxes insurance and whatever your employer deducts. We are already down to $2800 a month to live on. So now you take out the house/rent payment of say $600, the car payment of $400 a month, utilities $200, cable/TV/internet $100, groceries$400 per month,lawn care$100. Well now we are down to $1000 a month and we have not included gas, entertainment, cell phones, pet care or many other little things that you have to do monthly. Hopefully when you get done your total budget will be less than $4000. However do not be shocked if the number comes up to say $4500 or more. That is not uncommon. However it is how people get in trouble. They do not look at the whole picture. They look at little pieces and many have no clue how much they actually spend. The little pieces do not seem like much. You say I can afford this. Then you say I can afford that. The trick is can you afford all of the this's and that's together. When you total them all up you might be surprised. If you are monthly robbing Peter to pay Paul that is a good sign you need to sit down and really do a budget. It is a sign you may have passed that point where all the this's and that's total more than you make per month. If you are going to start saving towards a dream or goal you have to have income that is not committed each month. If that is not the case, decisions have to be made. What do I have to have? What can I get rid of that actually helps?
How big of sacrifices are you willing to make. If the totals come to over $4000 dollars you need to make some kind of adjustment or you will sooner or later be in bankruptcy court. Many people have no idea how they got there. What can go? You can dump the cable and internet, you can start doing the yard work yourself. You can be more frugal with the groceries and the eating out. Where do I suggest you start. Well with you. If you are always broke and miserable you will not stay on a budget. Give yourself say $10 a day to spend anyway you want. Give yourself an allowance, but be reasonable. My preferred method is to use envelopes and put in so much a day or week and stick to it. Don't feel guilty. You work hard and you earn your money. You deserve to be paid first not last. Now redo the bills and see where you stand. With house, car and credit cards it is not uncommon for people to pay as much as a $1000 dollars a month in interest. Getting rid of the interest debt is one goal you should strive for. Eliminating bills you pay interest on will be a big help. Do your really need the shiny new chick magnet to drive around in and stroke your ego. Hopefully you are not upside down in the car. If you aren't and get rid of it you are ahead. Buy a cheaper car that you can pay cash for. Now you no longer need the high cost full coverage insurance the bank required. From my own experience my wife pays $1200 a year insurance on her car. It is paid for but it is pretty new. My car cost less than her yearly insurance. I pay $200 a year for the insurance on my beater and I have no payment. Just taking care of the car problem can save as much as $500 a month for the payment and insurance. The next thing that most people do not need, but like to have are credit cards. You may have bank cards or store cards. Store cards are okay if you pay them off every month. If you do not they usually have high interest rates. Bank cards vary. Once you make up your mind to get out of debt cut up all the cards but one. The one with the lowest interest and the lowest balance. Start looking in the mail and on line for the no interest for 12 or 18 month deals. Read all the fine print though. Make sure there is no annual fee. Then roll as much of the card debt as you can into a no interest card. You will see why shortly.
Here is how you handle the rest of the cards. Most cards today have a section in the statement that tells you how much you have to pay to pay the balance off in three years which is a good goal. Pay that amount as a minimum. That is not the minimum amount on your bill. If you only pay the minimum amount which is on the bill you will never pay it off. The credit card companies do not want you to pay them off. They love taking that interest money. It you can not pay that much you are already in trouble. Now take the total of the monthly payments and divide by ten. Say the total is $1000 dollars. You now commit by adding 10% to the total and paying $1100 a month till the debt is gone. Here is how you do it. Some people say to pay off the highest interest card or the largest debt card. I prefer attacking the smallest debt card. It will pay off quicker and you will see progress and that will encourage you to keep at it. Once you pay that small card off you roll that into attacking the next card. Say the payment was $40 a month. You added the extra $100 to it and paid it off in say three months. Remember it was the little card. Now you pick the next target. Say its payment is $60 a month. Now you add the $40 you paid off and the $100 extra a month to the $60 a month and you start paying $200 a month on the $60 bill. Hopefully it pays off in say four months and you go after an $80 a month bill. Now you are paying $280 on the $80 bill. Hopefully you see how this is working. The trick is to keep doing it till all the credit cards are paid off and hopefully torn up. Suddenly you now have a $1000 a month that is "YOURS" and you do not owe to anyone. You can start saving toward that dream or goal you had. In just a year you can walk in and pay $12,000 cash for that low mileage next to new version of the car you got rid of. Buying a brand new car is like throwing money away. As soon as you drive it, it looses several thousand dollars in value. Is your ego that important to you? You can buy the lower insurance and you have no payment. Also you have the title. You can use that title as collateral to get a loan from a bank. Hopefully you read my earlier post and know how to do that through a credit union. Even a regular bank should work with you if you have money in savings. My dad used to get the banks to lower the interest rate on car loans by 2 or3 percent just by telling the banker he got a better offer at a competing bank. It is learning how to play their game and if they are going to use your money. Make them make it worth your while. My next blog is about what to do if it is really drastic and you still are not in a positive income situation. That means you owe more than you make. Remember budgeting is something you have to stay at and on top of. It can make your life a lot easier. Also there is nothing wrong with borrowing as long as you are the one who benefits. I often borrow money to buy things I know I can sell at a profit. In that case I do not mind using the banks money. It is making money work for you, instead of you working for money.
It is not uncommon for people to owe as much as one quarter of their income in interest on their home, car and credit cards. That means that half of your income is not yours. How is that? Remember what I said in my previous blog. The borrower is the slave of the lender. Unfortunately it is a truth that many people have fallen captive to. Fortunately bills with interest can be paid off. When the debt is eliminated the money becomes yours again. The money that was obligated for bills becomes yours to do with as you please. If you still have debt the best thing you can do is continue to pay off the debt. As you become debt free you have more money to live on. Not only that but you do not need near as much to survive. You will always have some bills like utilities and groceries but it will not take as much to pay your bills. You are moving towards real freedom. You will feel as if a burden has been taken off your back. There are several ways to get the interest burden off your back. How you do it will be determined by you and how serious you are about achieving your goals or dreams. The more of your money that is really yours, the sooner you will reach your goal.
There is another thing that is nice about living debt free. Your credit score does not matter. Banks charge you more if they think you "MIGHT" be a risk. It can be over something very minor or it could be over something that was totally out of your control. Something like a medical bill that had a very high copay or maybe you did not have insurance. So in essence you are being punished because you were poor or at least to poor to pay a very large bill that you had to pay through no fault of your own. I will touch on this issue again later when I discuss the cost versus the benefit of having health insurance. I am sort of getting off track.
You will learn something when you do a budget. The big things that most people have financed like cars, houses and credit card debt are the things that take the most out of your pay. Fortunately all these can be dealt with over time if you are serious about achieving your goals. There may come a point in life when your debt becomes overwhelming through no fault of your own. If one of you becomes unemployed it can be hard. If both it can be devastating. If you are single it may be hard to face, but most of the time going back home can give you a chance to reorganize.
At this point I am going to use a figure that is easy to work with to show what I am talking about. Say you make a $1000 a week gross income or about $4000 a month. Now right up front you loose as much as 30% for taxes insurance and whatever your employer deducts. We are already down to $2800 a month to live on. So now you take out the house/rent payment of say $600, the car payment of $400 a month, utilities $200, cable/TV/internet $100, groceries$400 per month,lawn care$100. Well now we are down to $1000 a month and we have not included gas, entertainment, cell phones, pet care or many other little things that you have to do monthly. Hopefully when you get done your total budget will be less than $4000. However do not be shocked if the number comes up to say $4500 or more. That is not uncommon. However it is how people get in trouble. They do not look at the whole picture. They look at little pieces and many have no clue how much they actually spend. The little pieces do not seem like much. You say I can afford this. Then you say I can afford that. The trick is can you afford all of the this's and that's together. When you total them all up you might be surprised. If you are monthly robbing Peter to pay Paul that is a good sign you need to sit down and really do a budget. It is a sign you may have passed that point where all the this's and that's total more than you make per month. If you are going to start saving towards a dream or goal you have to have income that is not committed each month. If that is not the case, decisions have to be made. What do I have to have? What can I get rid of that actually helps?
How big of sacrifices are you willing to make. If the totals come to over $4000 dollars you need to make some kind of adjustment or you will sooner or later be in bankruptcy court. Many people have no idea how they got there. What can go? You can dump the cable and internet, you can start doing the yard work yourself. You can be more frugal with the groceries and the eating out. Where do I suggest you start. Well with you. If you are always broke and miserable you will not stay on a budget. Give yourself say $10 a day to spend anyway you want. Give yourself an allowance, but be reasonable. My preferred method is to use envelopes and put in so much a day or week and stick to it. Don't feel guilty. You work hard and you earn your money. You deserve to be paid first not last. Now redo the bills and see where you stand. With house, car and credit cards it is not uncommon for people to pay as much as a $1000 dollars a month in interest. Getting rid of the interest debt is one goal you should strive for. Eliminating bills you pay interest on will be a big help. Do your really need the shiny new chick magnet to drive around in and stroke your ego. Hopefully you are not upside down in the car. If you aren't and get rid of it you are ahead. Buy a cheaper car that you can pay cash for. Now you no longer need the high cost full coverage insurance the bank required. From my own experience my wife pays $1200 a year insurance on her car. It is paid for but it is pretty new. My car cost less than her yearly insurance. I pay $200 a year for the insurance on my beater and I have no payment. Just taking care of the car problem can save as much as $500 a month for the payment and insurance. The next thing that most people do not need, but like to have are credit cards. You may have bank cards or store cards. Store cards are okay if you pay them off every month. If you do not they usually have high interest rates. Bank cards vary. Once you make up your mind to get out of debt cut up all the cards but one. The one with the lowest interest and the lowest balance. Start looking in the mail and on line for the no interest for 12 or 18 month deals. Read all the fine print though. Make sure there is no annual fee. Then roll as much of the card debt as you can into a no interest card. You will see why shortly.
Here is how you handle the rest of the cards. Most cards today have a section in the statement that tells you how much you have to pay to pay the balance off in three years which is a good goal. Pay that amount as a minimum. That is not the minimum amount on your bill. If you only pay the minimum amount which is on the bill you will never pay it off. The credit card companies do not want you to pay them off. They love taking that interest money. It you can not pay that much you are already in trouble. Now take the total of the monthly payments and divide by ten. Say the total is $1000 dollars. You now commit by adding 10% to the total and paying $1100 a month till the debt is gone. Here is how you do it. Some people say to pay off the highest interest card or the largest debt card. I prefer attacking the smallest debt card. It will pay off quicker and you will see progress and that will encourage you to keep at it. Once you pay that small card off you roll that into attacking the next card. Say the payment was $40 a month. You added the extra $100 to it and paid it off in say three months. Remember it was the little card. Now you pick the next target. Say its payment is $60 a month. Now you add the $40 you paid off and the $100 extra a month to the $60 a month and you start paying $200 a month on the $60 bill. Hopefully it pays off in say four months and you go after an $80 a month bill. Now you are paying $280 on the $80 bill. Hopefully you see how this is working. The trick is to keep doing it till all the credit cards are paid off and hopefully torn up. Suddenly you now have a $1000 a month that is "YOURS" and you do not owe to anyone. You can start saving toward that dream or goal you had. In just a year you can walk in and pay $12,000 cash for that low mileage next to new version of the car you got rid of. Buying a brand new car is like throwing money away. As soon as you drive it, it looses several thousand dollars in value. Is your ego that important to you? You can buy the lower insurance and you have no payment. Also you have the title. You can use that title as collateral to get a loan from a bank. Hopefully you read my earlier post and know how to do that through a credit union. Even a regular bank should work with you if you have money in savings. My dad used to get the banks to lower the interest rate on car loans by 2 or3 percent just by telling the banker he got a better offer at a competing bank. It is learning how to play their game and if they are going to use your money. Make them make it worth your while. My next blog is about what to do if it is really drastic and you still are not in a positive income situation. That means you owe more than you make. Remember budgeting is something you have to stay at and on top of. It can make your life a lot easier. Also there is nothing wrong with borrowing as long as you are the one who benefits. I often borrow money to buy things I know I can sell at a profit. In that case I do not mind using the banks money. It is making money work for you, instead of you working for money.
Monday, January 2, 2012
Money, Do You Work For It, Or Does It Work For You.?
In the last month or so I have had several conversations with people who are near retirement. Many see no way that they will be able to do so. Even young people I talk to seem to have a negative attitude. They expect the system to be broke before they reach retirement. Then on the other hand I have a grandson who is a sophomore in high school who has two houses and plans to retire by age twenty-five. The whole thing is about attitude. If a person is only willing to work an eight hours day and makes no effort to get out of the rut of life they will die there. For those who do not know the definition of a rut let me tell you. A rut is nothing more than a grave with both ends kicked out. It just goes on and on.
If you want more out of life you have to drag yourself up out of the ditch of life and make something of it. No one is going to give it to you. You have to grab hold of it and take it. It is not my intention to start this off by preaching but there are some nuggets of truth in the Bible that confirms that attitude. Joshua says, in 1:8-9
" This book of the law shall not depart out of thy mouth; but thou shalt meditate therein day and night, that thou mayest observe to do according to all that is written therein: for then thou shalt make thy way prosperous, and then thou shalt have good success. Have not I commanded thee? Be strong and of a good courage; be not afraid, neither be thou dismayed: for the LORD thy God is with thee whithersoever thou goest. "
Notice in the underlined part it says "thou shalt" or more modern "you will" Who does it say will make your way prosperous? Not God, but you. The catch is you have to do it God's way and you have to apply the effort. Many will argue with me on this but, God will honor his word even if it is to a heathen. The difference is they will not know why they are being blessed. The reason they succeed is they are doing what God says to do even if they do not understand or know that they are doing it. The Bible says the rain falls on the just and the unjust. So do blessings to those who are doing what God says to do.
When you look at some of the wealthiest and most successful men in history they were not necessarily religious men. Andrew Carnegie made his fortunes in steel and then gave them away. The same is true of John D Rockefeller who made his fortunes in oil. In this day and age it is Bill Gates that could be an example. The easiest one to show how and why he made it big though is Henry Ford. His goal was to build cars anybody could afford. He also paid his employees a wage above average for the time so they could buy the cars they built. None of these men is noted for his faith except maybe Carnegie. The thing that made each of them rich was that they provided jobs and met the needs of the societies they lived in. The common bond of all these men is that none of them started out wealthy. They all made their fortunes in the course of their lives. They all shared several characteristics. They were all tenacious, determined, frugal, focused and energetic men. The traits required of anyone who really wants to succeed in life.
Many, if not most, people go through life with no goals, no direction and no plan for what they would like to get from life. They live life one day at a time and let events steer their lives. Certainly things happen that the average person has no control over. Terminal illnesses and disabilities, even death is sometimes unavoidable. Many times though people just let the flow of life take them where it will. When dealing with the issue of wealth in life this is especially true. Most people I meet know that if they had a savings account life might be a little easier. Savings requires discipline when dealing with issues of money. However their are two things even more important than discipline even though indirectly they are tied to it. First is a budget. Without a budget discipline is useless. Without a budget you do not know how much you have and where it is going. You may argue that you do know. You pay your bills and there is nothing left to save. Over the course of my life I have often seen two men making the same money. One lives a very comfortable life and has savings and enjoys life. The other is constantly in debt and constantly coming up short. What is the difference. A budget, without one you can not account for your money. A good budget accounts for every penny and knows which ones do not need to be spent and which ones can be turned into savings. The second one is a plan of what you want and how you can accomplish your goals. This requires using your budget and managing it to get the things you want out of life.
How do I know this works. Well after 65+ years of life I have had the opportunity to see it in action and experience it on a first hand basis. I have been through bankruptcy and I have run my own businesses. I have been virtually debt free three times in my life and I have managed to get back into debt. Early in my business life I went bankrupt and had barely $15.000 dollars in debt. Yet later in life I had over $100,000+ dollars in credit card debt alone and managed to pay it off. At one point my total debt business and personal debt was almost a half million dollars. Fortunately by the time I died. (They managed to bring me back) my debt was low enough that when I was forced out of business for health reasons I could almost pay the balance off by getting rid of my equipment. That was strictly from being blessed, not from any great planning or skill on my part. The point of telling the above was not to brag but to show I have been down the road I am talking about. While I was always willing to take chances and go where I felt life and God was leading me, my wife was just the opposite. She graduated college, got a job for the college and stayed in the same job her whole working life.
A short sidebar: The Bible says that gray hair is a sign of wisdom. Well my hair is all gray and so is my beard. As I am the type person who only learns from their mistakes you can see I made quite a few. My wife also has a beautiful head of gray hair, but hers came from all the things I put her through in life.
Getting back on track my goal is to share some of the things I have learned over the course of my life that hopefully will enable someone else to do like my grandson and retire young. Not after being beaten down by the burdens of life. Why is my grandson in that position at such a young age. The mistakes of his grandparents and parents have been shared. We all cared enough to help him see that there was a better way to live life. Will he succeed in his goal. As long as he stays focused and continues work diligently toward what he wants out of life. Hopefully I can break this blog into several parts that will all be helpful and that make sense when put together. It will be far to much to put it all in one blog. Well I guess it is time to get started. Some of this will make sense and some you may already know. This is written for the person who is just coming to the conclusion there has to be more to life than starving to death on an eight hour a day job or working two or three jobs to get what you want out of life.
The first thing the average person needs to learn is a Bible verse. That is Proverbs 22:7 and it is true whether you are a Christian or an Atheist. " The Borrower is the Slave/ Servant of the Lender" Remembering this truth will help set you free. It is one of the greatest truths ever told. Why is it true? Because for every dollar you owe, you need to make two dollars. You still need the dollar you are giving the lender to live on. Therefore to pay him back you need to make two dollars. One for the lender and one for yourself to live on. Lenders even rip you off when you are saving your money. I am not advocating using a mattress to hide your money, but it will help you to understand some of these things and how they work. Then you can use them to your advantage. The lender/savings bank holds "your" money because you let him. He may pay you a pittance for its use. Today a savings account is lucky to pay 1% on your money. Yet while it is in the bank the banker will lend it to some one else. If it is something like a mortgage he may get 4% to 6% on your money. He gets five percent just for holding your money. If he lends it for something riskier like a personal loan or a used car loan he may charge 9% to 12%. You still just get 1%. Are you starting to see how banks work. Well how do you beat the system? There are two ways to do it. Invest your money in things that may make you more money. I prefer physical assets that I can control and do not evaporate with the fluctuations of the markets. Even holding assets you need to be careful. If it can not be converted to cash or something you need it may really be costing you in the long run. Stocks and retirement accounts are not necessarily going to make you money. Why do I say that? I watched my wife through no fault of her own watch her retirement account shrink by almost 50%. Over fifty thousand dollars just evaporated during the housing crisis and there was nothing she could do about it. The state was looking out for her interests? Short of quitting her job which was not a viable solution at the time she just had to bite the bullet and bear it.
If you want more out of life you have to drag yourself up out of the ditch of life and make something of it. No one is going to give it to you. You have to grab hold of it and take it. It is not my intention to start this off by preaching but there are some nuggets of truth in the Bible that confirms that attitude. Joshua says, in 1:8-9
" This book of the law shall not depart out of thy mouth; but thou shalt meditate therein day and night, that thou mayest observe to do according to all that is written therein: for then thou shalt make thy way prosperous, and then thou shalt have good success. Have not I commanded thee? Be strong and of a good courage; be not afraid, neither be thou dismayed: for the LORD thy God is with thee whithersoever thou goest. "
Notice in the underlined part it says "thou shalt" or more modern "you will" Who does it say will make your way prosperous? Not God, but you. The catch is you have to do it God's way and you have to apply the effort. Many will argue with me on this but, God will honor his word even if it is to a heathen. The difference is they will not know why they are being blessed. The reason they succeed is they are doing what God says to do even if they do not understand or know that they are doing it. The Bible says the rain falls on the just and the unjust. So do blessings to those who are doing what God says to do.
When you look at some of the wealthiest and most successful men in history they were not necessarily religious men. Andrew Carnegie made his fortunes in steel and then gave them away. The same is true of John D Rockefeller who made his fortunes in oil. In this day and age it is Bill Gates that could be an example. The easiest one to show how and why he made it big though is Henry Ford. His goal was to build cars anybody could afford. He also paid his employees a wage above average for the time so they could buy the cars they built. None of these men is noted for his faith except maybe Carnegie. The thing that made each of them rich was that they provided jobs and met the needs of the societies they lived in. The common bond of all these men is that none of them started out wealthy. They all made their fortunes in the course of their lives. They all shared several characteristics. They were all tenacious, determined, frugal, focused and energetic men. The traits required of anyone who really wants to succeed in life.
Many, if not most, people go through life with no goals, no direction and no plan for what they would like to get from life. They live life one day at a time and let events steer their lives. Certainly things happen that the average person has no control over. Terminal illnesses and disabilities, even death is sometimes unavoidable. Many times though people just let the flow of life take them where it will. When dealing with the issue of wealth in life this is especially true. Most people I meet know that if they had a savings account life might be a little easier. Savings requires discipline when dealing with issues of money. However their are two things even more important than discipline even though indirectly they are tied to it. First is a budget. Without a budget discipline is useless. Without a budget you do not know how much you have and where it is going. You may argue that you do know. You pay your bills and there is nothing left to save. Over the course of my life I have often seen two men making the same money. One lives a very comfortable life and has savings and enjoys life. The other is constantly in debt and constantly coming up short. What is the difference. A budget, without one you can not account for your money. A good budget accounts for every penny and knows which ones do not need to be spent and which ones can be turned into savings. The second one is a plan of what you want and how you can accomplish your goals. This requires using your budget and managing it to get the things you want out of life.
How do I know this works. Well after 65+ years of life I have had the opportunity to see it in action and experience it on a first hand basis. I have been through bankruptcy and I have run my own businesses. I have been virtually debt free three times in my life and I have managed to get back into debt. Early in my business life I went bankrupt and had barely $15.000 dollars in debt. Yet later in life I had over $100,000+ dollars in credit card debt alone and managed to pay it off. At one point my total debt business and personal debt was almost a half million dollars. Fortunately by the time I died. (They managed to bring me back) my debt was low enough that when I was forced out of business for health reasons I could almost pay the balance off by getting rid of my equipment. That was strictly from being blessed, not from any great planning or skill on my part. The point of telling the above was not to brag but to show I have been down the road I am talking about. While I was always willing to take chances and go where I felt life and God was leading me, my wife was just the opposite. She graduated college, got a job for the college and stayed in the same job her whole working life.
A short sidebar: The Bible says that gray hair is a sign of wisdom. Well my hair is all gray and so is my beard. As I am the type person who only learns from their mistakes you can see I made quite a few. My wife also has a beautiful head of gray hair, but hers came from all the things I put her through in life.
Getting back on track my goal is to share some of the things I have learned over the course of my life that hopefully will enable someone else to do like my grandson and retire young. Not after being beaten down by the burdens of life. Why is my grandson in that position at such a young age. The mistakes of his grandparents and parents have been shared. We all cared enough to help him see that there was a better way to live life. Will he succeed in his goal. As long as he stays focused and continues work diligently toward what he wants out of life. Hopefully I can break this blog into several parts that will all be helpful and that make sense when put together. It will be far to much to put it all in one blog. Well I guess it is time to get started. Some of this will make sense and some you may already know. This is written for the person who is just coming to the conclusion there has to be more to life than starving to death on an eight hour a day job or working two or three jobs to get what you want out of life.
The first thing the average person needs to learn is a Bible verse. That is Proverbs 22:7 and it is true whether you are a Christian or an Atheist. " The Borrower is the Slave/ Servant of the Lender" Remembering this truth will help set you free. It is one of the greatest truths ever told. Why is it true? Because for every dollar you owe, you need to make two dollars. You still need the dollar you are giving the lender to live on. Therefore to pay him back you need to make two dollars. One for the lender and one for yourself to live on. Lenders even rip you off when you are saving your money. I am not advocating using a mattress to hide your money, but it will help you to understand some of these things and how they work. Then you can use them to your advantage. The lender/savings bank holds "your" money because you let him. He may pay you a pittance for its use. Today a savings account is lucky to pay 1% on your money. Yet while it is in the bank the banker will lend it to some one else. If it is something like a mortgage he may get 4% to 6% on your money. He gets five percent just for holding your money. If he lends it for something riskier like a personal loan or a used car loan he may charge 9% to 12%. You still just get 1%. Are you starting to see how banks work. Well how do you beat the system? There are two ways to do it. Invest your money in things that may make you more money. I prefer physical assets that I can control and do not evaporate with the fluctuations of the markets. Even holding assets you need to be careful. If it can not be converted to cash or something you need it may really be costing you in the long run. Stocks and retirement accounts are not necessarily going to make you money. Why do I say that? I watched my wife through no fault of her own watch her retirement account shrink by almost 50%. Over fifty thousand dollars just evaporated during the housing crisis and there was nothing she could do about it. The state was looking out for her interests? Short of quitting her job which was not a viable solution at the time she just had to bite the bullet and bear it.
If you have no control over your money that is one thing. However with a little research you can find far better alternatives to a regular bank. You might try and find a local Credit Union you can join. They have some far better programs. Aren't they going to charge you money to borrow money just like a bank? Yes but they usually pay a little better rate on your savings. They also have a unique program that not many know about. You can get an account secured loan. How does that work. Well you take out a loan but you put money from your savings up as security. You can not spend the money while it is securing your loan, but if it is your savings you probably did not intend to spend it in the first place. Say you want to buy a new car and you have the money to cover it in your savings account. The loan rate for a new car is three and a half per cent. The credit union charges you interest on the loan, but they also still pay you interest on your savings. If they are paying two per cent on savings you end up paying only the difference which is maybe one and one half per cent. Can you see how it works. The good part is that as you pay the loan down they lower the amount they are holding as security. So when the car is paid off you still have the money in your savings account and you have a paid off car you can use as collateral to get a loan if you might need one. This can put you in a much better position than dealing with a regular bank.
Hopefully you now see why banks are so eager to lend you money and give you credit cards. Especially if you are a responsible person who pays their bills when they are do. You are their dream client, but if you are really that responsible you owe it to yourself to break out of the debt cycle and learn how to live debt free. It can be done but it takes discipline and will power. It will not happen over night but it will happen a lot quicker than you anticipate. Especially when you start taking control of your life and you start making decisions based on a sound understanding of how money works. The trick is learning to make it work for you. It can and it will. You have to be the one who not only has a budget, but the one who controls your budget. You also need to have goals you can aim for to keep you focused. Next time I hope to explain how to budget and how it helps you.
Saturday, December 24, 2011
Time For Government To Do Its Duty & Provide For the Welfare of the USA
Fixing America would be so simple if Congress knew and understood the Constitution. Especially in regards to how the word Welfare is used. It was certainly not used in the same context that it is today. If it was a derogatory word I do not think they would have used it in the Constitution. In this day and age Welfare is spoken of like some parasitic scourge on society.
There is a problem with the government in America today. It is broken and no one seems to know how to fix it. It has come to a grinding halt. It is effecting not only the countries economics, but the ability to create jobs which sustain the system. It is my belief that part of the problem stems from a misunderstanding of what the Constitution says and what it is suppose to do. If you will read the Constitution it is pretty clear what the Founding Fathers expected those who came after them to do. The opening sentence says it all.
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
What many Americans do not know or understand is that the war with England had been over for almost five years before America decided to create the Constitution. During the five year period from the end of the war till the Constitution the colonies operated under the Articles of Confederation. The problem was that under the Articles there was no central government that had any authority to force any state to do anything. Each state operated independently.
However a situation arose after the war and even during the war that made the need for a central and unified government apparent to the former colonies. As soon as America declared Independence from England a state of war existed. England therefore no longer protected the ships of the colonies on the high seas. In fact England started attacking them. American ships traveling in the Mediterranean Sea were open to attacks by pirates. That is where the verse in the Marine hymn, "The shore of Tripoli" come from. With the end of hostilities the former colonies had no Navy to protect American shipping. The pirates being aware of this situation attacked American ships without fear of attack. It created a situation that made the former colonies realize the need for a military force to protect American interests. England, France and Spain were also occupying the western territories that were supposed to be America’s after the war. Section Eight directed the newly formed government to create an Army and a Navy. These things the new Congress did.
In fact the new government did four out of the five of the things mentioned in the opening sentence very well. It is the fifth one that kind of got over looked or misinterpreted. The Founding Fathers understood it and within three years of the ratification of the Constitution they started building the White House and the Capitol in Washington, DC. In other words they started creating infrastructure. Much of it was damaged in the War of 1812 and they immediately started the rebuilding process. They did not hesitate to maintain the infrastructure. The nation and the infrastructure continued to expand. The sale of land in the west funded much of the governments growth.
At the start of the Twentieth Century a new method of creating funds was put in place by the government. It was the income tax. It was approved by a Constitutional Amendment. The real reason for the creation of the tax was somewhat hidden for years but the government had no problem with spending the money. That issue is covered in one of my earlier blogs.
The problem was that none of the funds raised were dedicated to maintaining the infrastructure in America. What was and is needed is a permanent plan to maintain and expand the infrastructure to meet the needs of the nation. A well maintained and current infrastructure adds value to the nation. That is not and has not been the practice in America. During the Great Depression programs were put in place to create jobs. It helped some, but as soon as World War II broke out it was forgotten. At the end of the war things started getting back to normal. During the Eisenhower Administration a program was created that helped keep the economy moving forward. It was the interstate highway system. Which was followed by several wars and the space race. The economy kept going for some time, but then things started to slow down.
Government for the sake of government started expanding and no new programs that created jobs or industry were being built. In fact a trend started of sending American jobs overseas to take advantage of cheap labor. What should have happened at that point did not. Companies should have been taxed or had high duties placed on their goods coming into America. It should have been enough to maintain America’s standard of living, but it did not happen. Government has continued to grow, while the tax base that should have been supporting it has started and continues to shrink. The standard of living for the first time in American history is declining.
It is not that America quit being the leader in creating new industry and jobs. It was and is that American business became hooked on the cheap labor. That in and of itself is not bad. America needs to create a new program for rebuilding its infrastructure and upgrading for the future. It may take a new tax dedicated solely to infrastructure, but is has to be matched by a downsizing of the Federal government and its out of control spending. Cutting the programs that help those hurt by the changes is not the answer. It will take reexamining all of the governments expenditures. Do we need the size military we now have? Do we need to spend billions on a drug war that is not accomplishing a thing. Especially when some states like Colorado are actually taxing and creating a revenue base off of a product that the Federal government can not seem to control. Supposedly Colorado not only created jobs regulating medical marijuana it collected seventy million dollars in taxes. It expects that amount to increase. If you multiply that times fifty states it would create well over three and a half billion nationwide. That is just on medical marijuana. Legalization would allow the creation of many more products from hemp rope, to canvas and even bio-diesel. That is not to mention the hundreds of thousands of jobs, growing, processing into products and tax enforcement. It will grow on the worst ground and even in ditches. The potential to create billions of dollars of trade revenue and taxes, not to mention jobs is something that needs to be seriously looked at. Giving billions of dollars in unemployment and food stamps to people to do nothing but sit on their asses is not exactly productive either. That money could have been spent to start infrastructure programs but it is easier to give it away and increase the debt level of America. It is time to start thinking outside of the box we seem to have gotten ourselves into.
Our prisons full of drug abusers. Is that a sound way to spend money? Why make criminals out of citizens that have a substance abuse problem. If that is the answer why not round up the drunks and those who smoke cigarettes. Why because the government taxes those commodities. Why not legalize and tax drugs and those products made from the residue like canvas and rope for starters. It would be more Christian and humane to give treatment to the ones who totally abuse the drugs. Addicts would no longer need to steal and break into homes to get the funds to support their high dollar habits. Aren’t the lives worth saving of those who are being killed by using polluted drugs. Dealers cut and dilute drugs with who knows what to increase profits. Take the profit out of it and the drug dealers will be gone. Admittedly they will just find a new way to make money. However they will not be dealing dirty drugs and killing people. Take a look at prohibition. Thousands died from polluted alcohol. The stories of out of control gangsters is American legend. Did they keep selling booze when liquor was legalized? No they did not. They created the drug industry. It is time to cut the money off from the gangs. It is time to start saving lives and creating new legal industries and products to sell overseas. Not to drag religion into the issue, but even the Bible in Genesis 1:29 says every herb with seed was given for man to use. Don’t you think God knew the potential effect of every plant and its ability to be made into a drug. It is strange that almost every continent has plants that can be used to ease pain and suffering of people with illnesses. Why should people be forced to become criminals to ease their suffering or forced to give up everything they own to get medical attention from an out of control health care industry. Sure some people abuse drugs just as they do alcohol and tobacco. From another perspective though some of our Founding Fathers grew marijuana on their properties. Thomas Jefferson and George Washington are just two that are documented. The final point in this argument is that it should be an issue decided by the states. The Constitution gave the right to decide issues not covered in the Constitution to the states. Drugs are not covered in the Constitution. The Federal government has violated states rights in creating laws that take away states rights.
America can not legislate morality. It did not work for alcohol during prohibition and it is not going to work for drugs. The government also needs to realize it can not spend its way out of debt. Things need to change or America will become another third world country. A short quote from the Declaration of Independence shows the intent and thoughts of the Founding Fathers.
“and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.-”
They did not attempt to guarantee Happiness, but the right to pursue it. They based that on rights endowed by their creator and the Laws of Nature and Nature’s God. Based on those statements I am sure rights given by God to use all plants bearing seed for mans benefit, should not be revoked by the laws of man.
Having said all this it seems to me that it would make better sense to legalize and tax the use of drugs. Then at least the ones using the drugs are the ones paying for the treatment and regulation of the drug industry and not the taxpayers who do not, and will not use drugs regardless. Think about this a moment. If you do not drink, smoke or use drugs are you going to use them just because your government says you can? If you answered yes to that question you need some serious moral and values training. So why should you be taxed to waste money trying to enforce laws that do not and will not work.
Based on all the above the government needs to create a program to provide for the welfare (needs) of America. A person who provides for the welfare of his family is one who provides shelter, food, clothing, protection and even safe paths. (Even if it is only to the outhouse) Should the nation provide any less for its citizens. I think not. Welfare is a duty of the government under the Constitution. It is time for Government to do its duty.
There is a problem with the government in America today. It is broken and no one seems to know how to fix it. It has come to a grinding halt. It is effecting not only the countries economics, but the ability to create jobs which sustain the system. It is my belief that part of the problem stems from a misunderstanding of what the Constitution says and what it is suppose to do. If you will read the Constitution it is pretty clear what the Founding Fathers expected those who came after them to do. The opening sentence says it all.
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
What many Americans do not know or understand is that the war with England had been over for almost five years before America decided to create the Constitution. During the five year period from the end of the war till the Constitution the colonies operated under the Articles of Confederation. The problem was that under the Articles there was no central government that had any authority to force any state to do anything. Each state operated independently.
However a situation arose after the war and even during the war that made the need for a central and unified government apparent to the former colonies. As soon as America declared Independence from England a state of war existed. England therefore no longer protected the ships of the colonies on the high seas. In fact England started attacking them. American ships traveling in the Mediterranean Sea were open to attacks by pirates. That is where the verse in the Marine hymn, "The shore of Tripoli" come from. With the end of hostilities the former colonies had no Navy to protect American shipping. The pirates being aware of this situation attacked American ships without fear of attack. It created a situation that made the former colonies realize the need for a military force to protect American interests. England, France and Spain were also occupying the western territories that were supposed to be America’s after the war. Section Eight directed the newly formed government to create an Army and a Navy. These things the new Congress did.
In fact the new government did four out of the five of the things mentioned in the opening sentence very well. It is the fifth one that kind of got over looked or misinterpreted. The Founding Fathers understood it and within three years of the ratification of the Constitution they started building the White House and the Capitol in Washington, DC. In other words they started creating infrastructure. Much of it was damaged in the War of 1812 and they immediately started the rebuilding process. They did not hesitate to maintain the infrastructure. The nation and the infrastructure continued to expand. The sale of land in the west funded much of the governments growth.
At the start of the Twentieth Century a new method of creating funds was put in place by the government. It was the income tax. It was approved by a Constitutional Amendment. The real reason for the creation of the tax was somewhat hidden for years but the government had no problem with spending the money. That issue is covered in one of my earlier blogs.
The problem was that none of the funds raised were dedicated to maintaining the infrastructure in America. What was and is needed is a permanent plan to maintain and expand the infrastructure to meet the needs of the nation. A well maintained and current infrastructure adds value to the nation. That is not and has not been the practice in America. During the Great Depression programs were put in place to create jobs. It helped some, but as soon as World War II broke out it was forgotten. At the end of the war things started getting back to normal. During the Eisenhower Administration a program was created that helped keep the economy moving forward. It was the interstate highway system. Which was followed by several wars and the space race. The economy kept going for some time, but then things started to slow down.
Government for the sake of government started expanding and no new programs that created jobs or industry were being built. In fact a trend started of sending American jobs overseas to take advantage of cheap labor. What should have happened at that point did not. Companies should have been taxed or had high duties placed on their goods coming into America. It should have been enough to maintain America’s standard of living, but it did not happen. Government has continued to grow, while the tax base that should have been supporting it has started and continues to shrink. The standard of living for the first time in American history is declining.
It is not that America quit being the leader in creating new industry and jobs. It was and is that American business became hooked on the cheap labor. That in and of itself is not bad. America needs to create a new program for rebuilding its infrastructure and upgrading for the future. It may take a new tax dedicated solely to infrastructure, but is has to be matched by a downsizing of the Federal government and its out of control spending. Cutting the programs that help those hurt by the changes is not the answer. It will take reexamining all of the governments expenditures. Do we need the size military we now have? Do we need to spend billions on a drug war that is not accomplishing a thing. Especially when some states like Colorado are actually taxing and creating a revenue base off of a product that the Federal government can not seem to control. Supposedly Colorado not only created jobs regulating medical marijuana it collected seventy million dollars in taxes. It expects that amount to increase. If you multiply that times fifty states it would create well over three and a half billion nationwide. That is just on medical marijuana. Legalization would allow the creation of many more products from hemp rope, to canvas and even bio-diesel. That is not to mention the hundreds of thousands of jobs, growing, processing into products and tax enforcement. It will grow on the worst ground and even in ditches. The potential to create billions of dollars of trade revenue and taxes, not to mention jobs is something that needs to be seriously looked at. Giving billions of dollars in unemployment and food stamps to people to do nothing but sit on their asses is not exactly productive either. That money could have been spent to start infrastructure programs but it is easier to give it away and increase the debt level of America. It is time to start thinking outside of the box we seem to have gotten ourselves into.
Our prisons full of drug abusers. Is that a sound way to spend money? Why make criminals out of citizens that have a substance abuse problem. If that is the answer why not round up the drunks and those who smoke cigarettes. Why because the government taxes those commodities. Why not legalize and tax drugs and those products made from the residue like canvas and rope for starters. It would be more Christian and humane to give treatment to the ones who totally abuse the drugs. Addicts would no longer need to steal and break into homes to get the funds to support their high dollar habits. Aren’t the lives worth saving of those who are being killed by using polluted drugs. Dealers cut and dilute drugs with who knows what to increase profits. Take the profit out of it and the drug dealers will be gone. Admittedly they will just find a new way to make money. However they will not be dealing dirty drugs and killing people. Take a look at prohibition. Thousands died from polluted alcohol. The stories of out of control gangsters is American legend. Did they keep selling booze when liquor was legalized? No they did not. They created the drug industry. It is time to cut the money off from the gangs. It is time to start saving lives and creating new legal industries and products to sell overseas. Not to drag religion into the issue, but even the Bible in Genesis 1:29 says every herb with seed was given for man to use. Don’t you think God knew the potential effect of every plant and its ability to be made into a drug. It is strange that almost every continent has plants that can be used to ease pain and suffering of people with illnesses. Why should people be forced to become criminals to ease their suffering or forced to give up everything they own to get medical attention from an out of control health care industry. Sure some people abuse drugs just as they do alcohol and tobacco. From another perspective though some of our Founding Fathers grew marijuana on their properties. Thomas Jefferson and George Washington are just two that are documented. The final point in this argument is that it should be an issue decided by the states. The Constitution gave the right to decide issues not covered in the Constitution to the states. Drugs are not covered in the Constitution. The Federal government has violated states rights in creating laws that take away states rights.
America can not legislate morality. It did not work for alcohol during prohibition and it is not going to work for drugs. The government also needs to realize it can not spend its way out of debt. Things need to change or America will become another third world country. A short quote from the Declaration of Independence shows the intent and thoughts of the Founding Fathers.
“and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.-”
They did not attempt to guarantee Happiness, but the right to pursue it. They based that on rights endowed by their creator and the Laws of Nature and Nature’s God. Based on those statements I am sure rights given by God to use all plants bearing seed for mans benefit, should not be revoked by the laws of man.
Having said all this it seems to me that it would make better sense to legalize and tax the use of drugs. Then at least the ones using the drugs are the ones paying for the treatment and regulation of the drug industry and not the taxpayers who do not, and will not use drugs regardless. Think about this a moment. If you do not drink, smoke or use drugs are you going to use them just because your government says you can? If you answered yes to that question you need some serious moral and values training. So why should you be taxed to waste money trying to enforce laws that do not and will not work.
Based on all the above the government needs to create a program to provide for the welfare (needs) of America. A person who provides for the welfare of his family is one who provides shelter, food, clothing, protection and even safe paths. (Even if it is only to the outhouse) Should the nation provide any less for its citizens. I think not. Welfare is a duty of the government under the Constitution. It is time for Government to do its duty.
Monday, December 19, 2011
Iran, The Real Problem, It's Not Nuclear, It's Economic
With the title of this it is my obligation to prove I am right. Some may argue with me, but I do not think even Iran would be stupid or crazy enough to commit national suicide. Even if they have a bomb they have to be smart enough to know that if they were to use it, it would be the end of Iran as a nation. My feeling is that it is more of an "Old West Mindset." They live in a bad neighborhood and packing a piece is one way to feel safer. In the old west it felt good to know the sheriff was around, but having self protection made one feel safer. If you lived in hostile territory, knowing Cavalry was near helped. However if your group of people were not liked by the Cavalry you kind of wondered if they would really come and help you.
The history of the United States and Iran are full of problems and irritants that might make Iran question if the world's police force (USA) would act in their national interest. With the USA having troops in countries on two of their borders and a fully armed Naval Force off of their coasts. It might be understandable if they were or are a little nervous.
At this point a little history might help shed some light. During World War II the United States and Britain used an overland route through Iran to get military supplies to the Soviet Union who at that time was our ally. Britain had dominated the area and what the Iranian concerns were did not matter to the parties involved. This was all fine and dandy till the end of the war and Russia getting their own nuclear bomb. After the war ended Britain became unhappy with the democratically elected government of Iran. They felt the government was a little to cozy with the Russians. Britain came up with a plan to alter things and try to make things more favorable to themselves. They tried to get the United States to help them but the Truman Administration said they were not interested. When Truman left office they asked the Eisenhower Administration and they agreed to help. This was the first screw up. Letting Britain lead us into anything. We came here to get out from under their control. We got sucked into the Middle East in the late 1700's because of our relationship or lack of relationship to England. Till the Revolutionary War our merchant ships were protected on the high seas by Britain, but after the war started and our victory. Britain no longer protected our ships. Which is how we came to have a Constitution. A neat story, but a long one. Time to get back on track.
The United States helped Britain overthrow the democratically elected government of Iran in 1953 to put a more pro western government in power. Britain was worried that the original Iranian government was to friendly with the Russians. Britain in turn felt this threatened their oil holdings in the Middle East.
In 1979 a bunch of Iranian students overthrew the American Embassy and held the occupants hostage for almost 400 days. They felt it was a payback for overthrowing their government. They turned the hostages loose the day Ronald Reagan came into office. Needless to say this made for hostile relationships between the two countries. The Shah of Iran was also kicked out of the country when the Muslim revolution took power. The relationship has been hostile every since that time. America also supported Iraq and its leader Saddam Hussein in a war with Iran from 1980 to 1988. Which amounted to payback for the payback. In the period of 1985 to 1987 the Reagan Administration was found to be involved in the Iran Contra Affair the CIA was selling arms to Iran to fund a war in Central America. So in essence we were selling guns to both sides, which is a real Christian thing to do I suppose. I had intended to say that the United States was and is a peace loving nation. However when I ran the timeline. I found since 1776 the United States has been in a war or occupying some country, some where all but eleven years out of 235 we have been around. So I backed off on that statement.
At some point after the Iraq-Iran war ended we severed ties or quit supporting Iraq. Saddam must have felt the United States would not stop him if he invaded Kuwait and took their oil. He was wrong and felt the full force of the United States military. Iraq also received sanctions and was under some kind of sanctions right up to the start of the war in Iraq. Saddam Hussein found a way to circumvent some of the pressure of the sanctions by going to the United Nations and getting permission to sell his oil for Euros instead of dollars so he would not lose so much money when making currency exchanges. This is what led to his ultimate downfall. He messed with the dollar. For more info on how all that came about and why I encourage you to read my 4/15/11 blog on WMD's and you will have a better understanding. The first thing the USA did after defeating Iraq was put their oil back on the dollar.
Which brings me to my final point. Iran is still selling their oil for Euros as are many of the "Axis of Evil" nations. Taking their oil off of the dollar and selling it on world markets has made the dollar much weaker and not quite so "almighty." That is the real reason the USA is so uptight about Iran's nuclear program. They want to sell it as a WMD which it truly is, but like I said at the start. Is Iran really going to commit national suicide. Sure they would love to take out Israel. That can be averted by simply making it clear that any attack on Israel will be considered the same as an attack on the United States of American and will be retaliated against the same as if it was American soil. I may be naive, but I do understand why Iran does not trust the United States.
When you consider almost half of America was not born till after the events mentioned in this article. It is understandable how the government can dupe the public into thinking they are truly concerned about nuclear weapons. The reality says that it is not really and issue to worry about. If I was going to worry about nuclear weapons it would be the ones that already exist in Pakistan with a terrorist friendly government. The news today shook the dice in Korea and who know where that will go. Hopefully some of the facts I put in here will help Americans make sound decisions. Maybe if we just apologized to Iran for overthrowing their government and tried to back it up with "some act of Christian friendship" the situation would defuse itself. It won't happen as long as we have an in your face attitude though. The whole Middle East is a powder keg waiting to blow. What happens when the Arab Spring hits Saudi Arabia and takes their oil out of the equation. Then we have a problem. Especially if the USA does not start moving toward an energy independent position.
The history of the United States and Iran are full of problems and irritants that might make Iran question if the world's police force (USA) would act in their national interest. With the USA having troops in countries on two of their borders and a fully armed Naval Force off of their coasts. It might be understandable if they were or are a little nervous.
At this point a little history might help shed some light. During World War II the United States and Britain used an overland route through Iran to get military supplies to the Soviet Union who at that time was our ally. Britain had dominated the area and what the Iranian concerns were did not matter to the parties involved. This was all fine and dandy till the end of the war and Russia getting their own nuclear bomb. After the war ended Britain became unhappy with the democratically elected government of Iran. They felt the government was a little to cozy with the Russians. Britain came up with a plan to alter things and try to make things more favorable to themselves. They tried to get the United States to help them but the Truman Administration said they were not interested. When Truman left office they asked the Eisenhower Administration and they agreed to help. This was the first screw up. Letting Britain lead us into anything. We came here to get out from under their control. We got sucked into the Middle East in the late 1700's because of our relationship or lack of relationship to England. Till the Revolutionary War our merchant ships were protected on the high seas by Britain, but after the war started and our victory. Britain no longer protected our ships. Which is how we came to have a Constitution. A neat story, but a long one. Time to get back on track.
The United States helped Britain overthrow the democratically elected government of Iran in 1953 to put a more pro western government in power. Britain was worried that the original Iranian government was to friendly with the Russians. Britain in turn felt this threatened their oil holdings in the Middle East.
In 1979 a bunch of Iranian students overthrew the American Embassy and held the occupants hostage for almost 400 days. They felt it was a payback for overthrowing their government. They turned the hostages loose the day Ronald Reagan came into office. Needless to say this made for hostile relationships between the two countries. The Shah of Iran was also kicked out of the country when the Muslim revolution took power. The relationship has been hostile every since that time. America also supported Iraq and its leader Saddam Hussein in a war with Iran from 1980 to 1988. Which amounted to payback for the payback. In the period of 1985 to 1987 the Reagan Administration was found to be involved in the Iran Contra Affair the CIA was selling arms to Iran to fund a war in Central America. So in essence we were selling guns to both sides, which is a real Christian thing to do I suppose. I had intended to say that the United States was and is a peace loving nation. However when I ran the timeline. I found since 1776 the United States has been in a war or occupying some country, some where all but eleven years out of 235 we have been around. So I backed off on that statement.
At some point after the Iraq-Iran war ended we severed ties or quit supporting Iraq. Saddam must have felt the United States would not stop him if he invaded Kuwait and took their oil. He was wrong and felt the full force of the United States military. Iraq also received sanctions and was under some kind of sanctions right up to the start of the war in Iraq. Saddam Hussein found a way to circumvent some of the pressure of the sanctions by going to the United Nations and getting permission to sell his oil for Euros instead of dollars so he would not lose so much money when making currency exchanges. This is what led to his ultimate downfall. He messed with the dollar. For more info on how all that came about and why I encourage you to read my 4/15/11 blog on WMD's and you will have a better understanding. The first thing the USA did after defeating Iraq was put their oil back on the dollar.
Which brings me to my final point. Iran is still selling their oil for Euros as are many of the "Axis of Evil" nations. Taking their oil off of the dollar and selling it on world markets has made the dollar much weaker and not quite so "almighty." That is the real reason the USA is so uptight about Iran's nuclear program. They want to sell it as a WMD which it truly is, but like I said at the start. Is Iran really going to commit national suicide. Sure they would love to take out Israel. That can be averted by simply making it clear that any attack on Israel will be considered the same as an attack on the United States of American and will be retaliated against the same as if it was American soil. I may be naive, but I do understand why Iran does not trust the United States.
When you consider almost half of America was not born till after the events mentioned in this article. It is understandable how the government can dupe the public into thinking they are truly concerned about nuclear weapons. The reality says that it is not really and issue to worry about. If I was going to worry about nuclear weapons it would be the ones that already exist in Pakistan with a terrorist friendly government. The news today shook the dice in Korea and who know where that will go. Hopefully some of the facts I put in here will help Americans make sound decisions. Maybe if we just apologized to Iran for overthrowing their government and tried to back it up with "some act of Christian friendship" the situation would defuse itself. It won't happen as long as we have an in your face attitude though. The whole Middle East is a powder keg waiting to blow. What happens when the Arab Spring hits Saudi Arabia and takes their oil out of the equation. Then we have a problem. Especially if the USA does not start moving toward an energy independent position.
Wednesday, November 30, 2011
It's The Big One,,,World Economy On Life Support
Well it may have finally happened. The stock market is up over 400 points. That is good? No this tiime it is bad. The world economy has just been put on life support. Why? Well yesterday the borrowing cost hit a point they had not seen since the Lehman Brothers collapse in 2008. In panic Central Banks around the world pumped billions into the markets trying to stabilize things. Which was about like trying to put out a forest fire with a squirt gun. Better yet it was the equivalent of hitting a dying patient with a defibrilator. This time the shock may not do any good though. They have done nothing to address the real problems. Oil is at $100 a barrel. which makes me wonder why gas prices are down. They should be hitting the $4.00 mark, but I am not going to complain. If the price of oil stays where it is, it will eventually suck the prices back up. Basically the patient(economies) have blown a hole in a major blood vessel and are starting to bleed out. Only the best surgeon in the world has any hope of saving the patient.. Unfortunately none seem to be available.
This is truly one of those Deja'vu moments in history. Back in 1929 just a week or so before the crash JP Morgan and other bankers saw the imminent collapse of the market. They tried to push huge sums into the market. They tried to push or support the stocks of key companies like U.S. Steel and others they considered key to the markets survival. It did not work though as people scared of a collapse started pulling their money out of the markets. As much of it was done on borrowed money, many loans could not be covered(paid) and the crash was on. Once in a while I hope I am wrong, but history does repeat itself, over and over. As they say the hand writing is on the wall. This stock rise is just a dying man taking his last breath. Can it be saved? I doubt it, but I hope so. It grieves me to think of all the misery a totally collapsed world market would cause. Only time will tell in this one.
Not to change the subject. Actually it is right on subject. America considers itself a "Christian" nation. In the Bible God laid out a list in Deuteronomy chapter of all the blessings that would fall on nations that followed his Word and the curses on the nations that didn't. Their are 14 verses of blessing, however the remaining 54 verses deal with the curses. A few I directly apply to America. Verse 7 says the enemies of a blessed nation shall flee before them seven different ways. Verse 8 says their storehouses shall be blessed and verse 12 says a blessed nation shall lend to many nations and not borrow money. Of course all these same things are addressed in the cursing part and reversed in outcome. All the above used to apply to America. However, simply looking at verse 12 and our national debt, one might ask if America has fallen from grace. When I look at all the things America is involved in I can believe it has fallen or is in the process.
Here is a trivia thing that probably means nothing to most people, but I find it fascinating. In Revelations the last book of the Bible that talks about the end times and the end of the world. It forecasts that there will be a number that all must take. A "mark of the Beast" so to speak. It is given a number, which is 666. Here is where it gets interesting. If you give a numerical value to the letters of the alphabet. Such as A is 1, B is 2, C is 3 and so on and translate it to the Hebrew or Jewish alphabet. The sixth letter of the Hebrew alphabet translates to the English equivalent of W. So the WWW of the world wide web could be translated into the number 666, but that is just a coincidence or is it. As each name is numbered in a way by the internet system. Think about it. The Bible says that Satan could fool the very elect of God himself, if that were possible. It also says "God's people shall perish from a lack of knowledge" Are we knowledgeable or are we being duped by the system. The day of every person having to have a number so they can not circumvent the world system is definitely in the realm of possibility. This is off from the market issues, but it filled out my post in what I find as an interesting way. Maybe it will give people something to think about.
In the words of the famous Paul Harvey, "Have a nice day."
This is truly one of those Deja'vu moments in history. Back in 1929 just a week or so before the crash JP Morgan and other bankers saw the imminent collapse of the market. They tried to push huge sums into the market. They tried to push or support the stocks of key companies like U.S. Steel and others they considered key to the markets survival. It did not work though as people scared of a collapse started pulling their money out of the markets. As much of it was done on borrowed money, many loans could not be covered(paid) and the crash was on. Once in a while I hope I am wrong, but history does repeat itself, over and over. As they say the hand writing is on the wall. This stock rise is just a dying man taking his last breath. Can it be saved? I doubt it, but I hope so. It grieves me to think of all the misery a totally collapsed world market would cause. Only time will tell in this one.
Not to change the subject. Actually it is right on subject. America considers itself a "Christian" nation. In the Bible God laid out a list in Deuteronomy chapter of all the blessings that would fall on nations that followed his Word and the curses on the nations that didn't. Their are 14 verses of blessing, however the remaining 54 verses deal with the curses. A few I directly apply to America. Verse 7 says the enemies of a blessed nation shall flee before them seven different ways. Verse 8 says their storehouses shall be blessed and verse 12 says a blessed nation shall lend to many nations and not borrow money. Of course all these same things are addressed in the cursing part and reversed in outcome. All the above used to apply to America. However, simply looking at verse 12 and our national debt, one might ask if America has fallen from grace. When I look at all the things America is involved in I can believe it has fallen or is in the process.
Here is a trivia thing that probably means nothing to most people, but I find it fascinating. In Revelations the last book of the Bible that talks about the end times and the end of the world. It forecasts that there will be a number that all must take. A "mark of the Beast" so to speak. It is given a number, which is 666. Here is where it gets interesting. If you give a numerical value to the letters of the alphabet. Such as A is 1, B is 2, C is 3 and so on and translate it to the Hebrew or Jewish alphabet. The sixth letter of the Hebrew alphabet translates to the English equivalent of W. So the WWW of the world wide web could be translated into the number 666, but that is just a coincidence or is it. As each name is numbered in a way by the internet system. Think about it. The Bible says that Satan could fool the very elect of God himself, if that were possible. It also says "God's people shall perish from a lack of knowledge" Are we knowledgeable or are we being duped by the system. The day of every person having to have a number so they can not circumvent the world system is definitely in the realm of possibility. This is off from the market issues, but it filled out my post in what I find as an interesting way. Maybe it will give people something to think about.
In the words of the famous Paul Harvey, "Have a nice day."
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