The Feds meet today and will likely cut rates by 1/4%. They may then signal a pause in its rate-cutting campaign.
Wall Street Journal this morning: "The yield on the five-year Treasury has jumped to 3.1% from about 2.6% since the beginning of April."
Some banks are already responding. Some are raising some of their short-term CD rates. GMAC has increase their 4 and 5 year CD to 4.35%. National City has a 48-month CD that pays 5% (minimum $10,000).
Optimistically, the stimulus checks and the encouragement of higher CD rates may by the key for some to start saving.
'til later
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Why?
Why can't we all get along? Why can't we be colorblind?
People like Rev. Wright keep reminding us that our white European ancestors counted humans of color as beneath them, less than created in God's image.
Am I sorry about this? Of course. Is it my sin? What repayment would be enough? Years of inequality could never be paid back.
So, why can't we get along? Can we ever go forward? Will race and skin hue ever not count?
Not as long as quotas exist. Not as long as color counts as entrances to college programs and job openings. Not as long as those like Rev. Wright hate and spread their anti-American rhetoric.
What will our America be like under the presidency of B. Obama?
'til later
People like Rev. Wright keep reminding us that our white European ancestors counted humans of color as beneath them, less than created in God's image.
Am I sorry about this? Of course. Is it my sin? What repayment would be enough? Years of inequality could never be paid back.
So, why can't we get along? Can we ever go forward? Will race and skin hue ever not count?
Not as long as quotas exist. Not as long as color counts as entrances to college programs and job openings. Not as long as those like Rev. Wright hate and spread their anti-American rhetoric.
What will our America be like under the presidency of B. Obama?
'til later
Monday, April 28, 2008
Vista
Bob has a Sony laptop computer he bought in October because the old Dell was dying. The big problem is one of the software packages he has to use for what we call the big report jobs does not work on Vista and there is no fix planned.
We also cannot use his laser printer with Vista. HP has no plans to fix that mismatch either.
We are facing finding yet another laptop with XP. If we find a good one, the Sony will fall back to my use mostly. So this week the search begins. Dell still has some XP loaded machines.
Not all new things are good things. Maybe the Mac guy on the commercials makes sense. It's just that our industry does not support software for Apple.
'til later
We also cannot use his laser printer with Vista. HP has no plans to fix that mismatch either.
We are facing finding yet another laptop with XP. If we find a good one, the Sony will fall back to my use mostly. So this week the search begins. Dell still has some XP loaded machines.
Not all new things are good things. Maybe the Mac guy on the commercials makes sense. It's just that our industry does not support software for Apple.
'til later
Sunday, April 27, 2008
Phone Bill
Our phone bill came yesterday showing a late fee. I pay the cell phone bill with two checks - one from our business account and the other from our personal. We can expense Bob's cell as that's his contact number for his clients. My cell is important for our communication but not deductible.
Across the payment coupon I always write "two checks are enclosed". I quickly checked our bank accounts. The personal check did not clear the bank but the larger one for the business cell had cleared.
The cell phone company (Verizon) could not tell me their process for handling payments and had no record of the second check. He removed the late fee and I promised to mail the amount due for this month plus the amount of the smaller check which they lost ASAP.
I mailed the payments (yes, two checks) yesterday. Once again, I wrote across the payment coupon "two checks are enclosed". Unless a machine opens and processes the payments, the clerical help may not understand basic English. Plus, if they key in the amount I claim on the coupon but the enclosed payments do not total the amount claimed, the clerk could not balance for that batch entered.
Does anyone know how to communicate in Spanish "two checks are enclosed"?
'til later
Across the payment coupon I always write "two checks are enclosed". I quickly checked our bank accounts. The personal check did not clear the bank but the larger one for the business cell had cleared.
The cell phone company (Verizon) could not tell me their process for handling payments and had no record of the second check. He removed the late fee and I promised to mail the amount due for this month plus the amount of the smaller check which they lost ASAP.
I mailed the payments (yes, two checks) yesterday. Once again, I wrote across the payment coupon "two checks are enclosed". Unless a machine opens and processes the payments, the clerical help may not understand basic English. Plus, if they key in the amount I claim on the coupon but the enclosed payments do not total the amount claimed, the clerk could not balance for that batch entered.
Does anyone know how to communicate in Spanish "two checks are enclosed"?
'til later
Saturday, April 26, 2008
Larry Winget
I have discovered the King of Rant and Roll, author of "Are we working hard enough" - Larry Winget.
He's the country shirt wearing, bald guy who has written a few books and appears on CNN from time to time.
I caught his rant on Cavuto yesterday regarding the stimulus checks due to start appearing in bank accounts across the country beginning next week.
Pay down debt. Save it - hardly anyone has savings any more. Do not spend it.
His fear was that folks would see this $ as a coupon or down payment toward a purchase.
Of course, this is what the economy needs - spenders.
But this crazy ranter was begging us to pay down debt or sock it away in savings.
I agree. I want my readers (all three of you) to save this $. Use it toward your 3-6 months emergency fund. Do it.
'til later
He's the country shirt wearing, bald guy who has written a few books and appears on CNN from time to time.
I caught his rant on Cavuto yesterday regarding the stimulus checks due to start appearing in bank accounts across the country beginning next week.
Pay down debt. Save it - hardly anyone has savings any more. Do not spend it.
His fear was that folks would see this $ as a coupon or down payment toward a purchase.
Of course, this is what the economy needs - spenders.
But this crazy ranter was begging us to pay down debt or sock it away in savings.
I agree. I want my readers (all three of you) to save this $. Use it toward your 3-6 months emergency fund. Do it.
'til later
Friday, April 25, 2008
Teacher
I had the opportunity to catch several hours of Dave Ramsey's radio program this week over the internet. Hotel rooms have lousy AM radio reception.
Dave remarked that one criteria he has for a financial planner/adviser is the heart of a teacher. He warns against those who are salespersons.
I concur. A salesman is focused on closing the deal while a teacher explains.
A teacher helps you understand and articulate your financial goals, helps you realize and communicate your risk tolerances, and wants you to comprehend the investment tools he/she suggests.
Dave Ramsey has been rich and he has been through bankruptcy. He has the heart of a teacher. If you get the opportunity, give him a few minutes of listening time.
I caught him on AM 1270 out of Cartersville GA. He's also on XM Radio, also in the afternoon.
Don't get sold something you do not fully understand. As caring as another person can seem, you are the only one fully vested in your $. No one cares more about your financial future than you.
'til later
Dave remarked that one criteria he has for a financial planner/adviser is the heart of a teacher. He warns against those who are salespersons.
I concur. A salesman is focused on closing the deal while a teacher explains.
A teacher helps you understand and articulate your financial goals, helps you realize and communicate your risk tolerances, and wants you to comprehend the investment tools he/she suggests.
Dave Ramsey has been rich and he has been through bankruptcy. He has the heart of a teacher. If you get the opportunity, give him a few minutes of listening time.
I caught him on AM 1270 out of Cartersville GA. He's also on XM Radio, also in the afternoon.
Don't get sold something you do not fully understand. As caring as another person can seem, you are the only one fully vested in your $. No one cares more about your financial future than you.
'til later
Thursday, April 24, 2008
Final Myths
The last of the 10 Financial Myths per the 4/18/08 USA Today article.
Myth 9: I put myself through college by working part time and taking out loans. So can my kids.
Bob put himself through 6 years of college roofing houses in the summers. Until our daughter was 11 or so, he felt strongly that if she wanted further education, she'd find a way. We heard from friends the college was way more expensive than we had imagined.
College costs have risen at a much faster rate than inflation. Most students are relying on loans now. The average graduating senior has $20,000 in education debt. Nearly 10% walk carrying $35,000 or more in debt.
Consider a 529 college savings plan. Most states have these plans and many allow contributions as little as $50. The key is to start when your child is young.
Myth 10: I don't need to save that much for retirement since my living costs will fall a lot once I stop working. In fact, most retirees spend more, particularly in the early years of retirement. Many travel, take up new hobbies, or other things they have wanted to try.
Fidelity Investments estimates that a 65 year old couple retiring this year will need $225,000 for health care expenses not covered by Medicare. Only about 1/3 of retirees expect to have employment-based health coverage during retirement.
Good advice is to save as much as you can and ignore those retirement calculators that suggest you can live on 70% of your pre-retirement income.
'til later
Myth 9: I put myself through college by working part time and taking out loans. So can my kids.
Bob put himself through 6 years of college roofing houses in the summers. Until our daughter was 11 or so, he felt strongly that if she wanted further education, she'd find a way. We heard from friends the college was way more expensive than we had imagined.
College costs have risen at a much faster rate than inflation. Most students are relying on loans now. The average graduating senior has $20,000 in education debt. Nearly 10% walk carrying $35,000 or more in debt.
Consider a 529 college savings plan. Most states have these plans and many allow contributions as little as $50. The key is to start when your child is young.
Myth 10: I don't need to save that much for retirement since my living costs will fall a lot once I stop working. In fact, most retirees spend more, particularly in the early years of retirement. Many travel, take up new hobbies, or other things they have wanted to try.
Fidelity Investments estimates that a 65 year old couple retiring this year will need $225,000 for health care expenses not covered by Medicare. Only about 1/3 of retirees expect to have employment-based health coverage during retirement.
Good advice is to save as much as you can and ignore those retirement calculators that suggest you can live on 70% of your pre-retirement income.
'til later
Wednesday, April 23, 2008
More Myths
From the 4/18/08 article in USA Today, Myth 7: Because I'm getting a tax rebate this year, my 2008 tax bill will be higher.
We have covered the stimulus checks coming out in early May to those who have filed their 2007 tax returns already. These rebates are credits based on your 2008 taxes but issued based on 2007 tax knowledge. The idea being to get the $ into your pockets now. If you're due a larger credit, you will claim it on your 2008 tax return. If your rebate was too large, good for you. You will not be asked to give it back. Bottom line: the rebate will not be treated as income when you file your '08 tax returns.
Myth 8: E-filing your taxes makes it more likely you'll be audited.
The chance of an audit are equal for paper filers and e-filers. The plus with e-filing is that the software will not make math errors that pencil and paper returns may have. The software is also likely to help you remember to include things that may be overlooked otherwise.
'til later
We have covered the stimulus checks coming out in early May to those who have filed their 2007 tax returns already. These rebates are credits based on your 2008 taxes but issued based on 2007 tax knowledge. The idea being to get the $ into your pockets now. If you're due a larger credit, you will claim it on your 2008 tax return. If your rebate was too large, good for you. You will not be asked to give it back. Bottom line: the rebate will not be treated as income when you file your '08 tax returns.
Myth 8: E-filing your taxes makes it more likely you'll be audited.
The chance of an audit are equal for paper filers and e-filers. The plus with e-filing is that the software will not make math errors that pencil and paper returns may have. The software is also likely to help you remember to include things that may be overlooked otherwise.
'til later
Tuesday, April 22, 2008
Myths 5 & 6
Continuing the 10 financial myths from USA Today, Myth 5: If you file for personal bankruptcy, you'll lose your home.
In most cases you can keep your house, especially if there's little equity in it. The rules differ from state to state. Chapter 7 erases most debts but requires you to pay overdue mortgage bills upon filing. Chapter 13 usually entails a debt repayment plan that allows you to pay past due mortgage bills over time.
Myth 6: Buying a house is always better than renting.
It makes sense to rent if your budget won't accommodate extra house costs such as property insurance and taxes. The plumbing issues will cost you and not a landlord. Also, it doesn't make sense to purchase a house if you plan to live there less than five years. There are large costs associated with getting into a house and with selling a house.
There are calculators that may be helpful at: HSH.com and Bankrate.com. Good luck. Even though it seems to be a buyer's market, lenders are making it more difficult to qualify. You'll need a higher credit score and larger down payment.
'til later
In most cases you can keep your house, especially if there's little equity in it. The rules differ from state to state. Chapter 7 erases most debts but requires you to pay overdue mortgage bills upon filing. Chapter 13 usually entails a debt repayment plan that allows you to pay past due mortgage bills over time.
Myth 6: Buying a house is always better than renting.
It makes sense to rent if your budget won't accommodate extra house costs such as property insurance and taxes. The plumbing issues will cost you and not a landlord. Also, it doesn't make sense to purchase a house if you plan to live there less than five years. There are large costs associated with getting into a house and with selling a house.
There are calculators that may be helpful at: HSH.com and Bankrate.com. Good luck. Even though it seems to be a buyer's market, lenders are making it more difficult to qualify. You'll need a higher credit score and larger down payment.
'til later
Monday, April 21, 2008
Myths 3 & 4
Myth 3: Dollar-cost averaging boosts returns.
This investing style is identical stock or fund purchases in defined increments of time. Like sending $100 a month to a stock index fund. The thought is you will be buying at high and low prices which levels off your costs.
The statistics over time do not bear out this theory. It is, however, just fine to invest in steady increments on a regular basis. Many prefer direct debit versus facing writing a check, seeing the outflow as an expense or the $ as spendable.
Myth 4: I should always get the credit card with the lowest interest rate I can find.
About half of us pay off our balances each month. Since no interest is paid on the balance carried, shop for a card with no fees and generous rewards.
If a balance is carried, look for low rate cards. Check out bankrate.com, cardratings.com and lowcards.com. Be sure to look beyond the rates for rates that jump after a few months and don't think about a reward card as they have rates about 2 points above others.
'til later
This investing style is identical stock or fund purchases in defined increments of time. Like sending $100 a month to a stock index fund. The thought is you will be buying at high and low prices which levels off your costs.
The statistics over time do not bear out this theory. It is, however, just fine to invest in steady increments on a regular basis. Many prefer direct debit versus facing writing a check, seeing the outflow as an expense or the $ as spendable.
Myth 4: I should always get the credit card with the lowest interest rate I can find.
About half of us pay off our balances each month. Since no interest is paid on the balance carried, shop for a card with no fees and generous rewards.
If a balance is carried, look for low rate cards. Check out bankrate.com, cardratings.com and lowcards.com. Be sure to look beyond the rates for rates that jump after a few months and don't think about a reward card as they have rates about 2 points above others.
'til later
Sunday, April 20, 2008
Financial Myths
USA Today published 10 financial myths April 18. I thought I might spend some time with them and you.
The first myth is: The more I know about investments, the less likely I am to fall for scams.
It seems a little knowledge can lull folks into overconfidence which may not help detect frauds or inappropriate investment products.
Some might say my limited knowledge can be a dangerous thing.
The second myth is: Your fund's performance is the main factor in the growth of a retirement account.
The most important factor in growing your retirement nest egg is not the fund's performance (over which you have no power) but rather your saving more. It's more important to set savings goals and work toward them than trying to select a hot fund.
'til later
The first myth is: The more I know about investments, the less likely I am to fall for scams.
It seems a little knowledge can lull folks into overconfidence which may not help detect frauds or inappropriate investment products.
Some might say my limited knowledge can be a dangerous thing.
The second myth is: Your fund's performance is the main factor in the growth of a retirement account.
The most important factor in growing your retirement nest egg is not the fund's performance (over which you have no power) but rather your saving more. It's more important to set savings goals and work toward them than trying to select a hot fund.
'til later
Saturday, April 19, 2008
Pennsylvania
We are not far from Pennsylvania on our mini vacation. Their primary is Tuesday and the airways are full of Hillary and Obama. I have heard that the debate the other night helped Hillary but she didn't make the most of Obama's lack luster evening.
It seems to me that Obama is very charismatic and wonderfully leads large crowds with his canned praises of hope. A dynamic orator. With the fervor of a stump preacher.
However, when asked abstinent questions, he's not organized in his thoughts. Or, possibly, has spent little time pondering some topics.
I believe he's a wonderfully motivational speaker but lacks the ability or experience to make world changing decisions. To me, that's scary.
'til later
It seems to me that Obama is very charismatic and wonderfully leads large crowds with his canned praises of hope. A dynamic orator. With the fervor of a stump preacher.
However, when asked abstinent questions, he's not organized in his thoughts. Or, possibly, has spent little time pondering some topics.
I believe he's a wonderfully motivational speaker but lacks the ability or experience to make world changing decisions. To me, that's scary.
'til later
Friday, April 18, 2008
Vacation
We're on a road trip vacation in north central Ohio. The motel is full. There are many blue haireds here including us. It's a warmer growing zone and flowering bushes are in bloom. We sat out on the porch with friends and could enjoy the scent of hyacinths.
Even with gas prices at $3.45 to $3.59, we are out and about. Like most Americans we will limit our driving and take shorter trips for pleasure. Since we travel much for Bob's consulting work, we will make those into mini-vacations and take an extra day or so to enjoy the Midwest.
If you are like us, you use credit cards for many purchases. We rarely charge groceries but we do charge gas. Each month the amounts spent at the BP or the Shell or the Marathon take a bigger bite. It makes budgeting nearly impossible for that line item.
'til later
Even with gas prices at $3.45 to $3.59, we are out and about. Like most Americans we will limit our driving and take shorter trips for pleasure. Since we travel much for Bob's consulting work, we will make those into mini-vacations and take an extra day or so to enjoy the Midwest.
If you are like us, you use credit cards for many purchases. We rarely charge groceries but we do charge gas. Each month the amounts spent at the BP or the Shell or the Marathon take a bigger bite. It makes budgeting nearly impossible for that line item.
'til later
Thursday, April 17, 2008
Goal Setting
Part of budgeting is getting a handle on things. Identifying completely indebtedness and earnings, clearly seeing outflows in specific numbers, and examining the true yield on our saved $. These are part of the process.
Gaining a complete picture of our finances can be a goal.
Let's brainstorm of other goals, specific goals.
As a couple, we set the goal to cover our daughter's college costs should she attend a state school. As her graduation neared and she considered a few private institutions, we were set on limiting our help and hoped she could qualify for loans.
She was accepted to the only college she applied to and attend four years at a state school. She graduated without student loans and we had enough to cover the then $11,000/year.
We started our savings for this goal when she was 10 or 11. We invested a few times over 3 years in zero coupon bonds. Rates were much better than we could dream of today. We knew exactly what these bonds would pay out as they matured on four consecutive Augusts.
My point is that we need to set goals. If our goal is retirement, we need an established $ amount. One professional who works only with seniors has stated that we will need $1,000,000 to cover expenses in retirement. She is very attuned to health care costs and long term care costs. She was speaking of those of us in our mid to late 50s. A shock?
Take some time and consider your goals. Be as specific as you can. Research true costs and don't forget to factor in inflation. Our daughter's education would have cost her $5,500 per year when she was 10. We figured $10,000 would be needed per year and it turned out to be $11,000. College costs rise about 4% per year, more than most things.
'til later
Gaining a complete picture of our finances can be a goal.
Let's brainstorm of other goals, specific goals.
As a couple, we set the goal to cover our daughter's college costs should she attend a state school. As her graduation neared and she considered a few private institutions, we were set on limiting our help and hoped she could qualify for loans.
She was accepted to the only college she applied to and attend four years at a state school. She graduated without student loans and we had enough to cover the then $11,000/year.
We started our savings for this goal when she was 10 or 11. We invested a few times over 3 years in zero coupon bonds. Rates were much better than we could dream of today. We knew exactly what these bonds would pay out as they matured on four consecutive Augusts.
My point is that we need to set goals. If our goal is retirement, we need an established $ amount. One professional who works only with seniors has stated that we will need $1,000,000 to cover expenses in retirement. She is very attuned to health care costs and long term care costs. She was speaking of those of us in our mid to late 50s. A shock?
Take some time and consider your goals. Be as specific as you can. Research true costs and don't forget to factor in inflation. Our daughter's education would have cost her $5,500 per year when she was 10. We figured $10,000 would be needed per year and it turned out to be $11,000. College costs rise about 4% per year, more than most things.
'til later
Wednesday, April 16, 2008
Seasonal Job
My seasonal job is over at the CPA firm. The last 10 days have been stressful. Over the weekend, the accountants filled my bins plus 3 piles on the floor! Most of these were to be processed and ready for pick up.
Many were over night packages to California, Georgia, Chicago, southern Illinois, etc. Those had to be done and out as soon as possible. It felt so good to accomplish all of these.
Yesterday there was one bin full. Finished those about 11:30.
The office was closed from noon until 1:30 as we had a nice lunch together. We chatted about the season, celebrating triumphs and recalling the numbers. We processed over 800 individual returns and there are 50 on extension.
It is done. I am free just as spring starts into bloom.
'til later
Many were over night packages to California, Georgia, Chicago, southern Illinois, etc. Those had to be done and out as soon as possible. It felt so good to accomplish all of these.
Yesterday there was one bin full. Finished those about 11:30.
The office was closed from noon until 1:30 as we had a nice lunch together. We chatted about the season, celebrating triumphs and recalling the numbers. We processed over 800 individual returns and there are 50 on extension.
It is done. I am free just as spring starts into bloom.
'til later
Tuesday, April 15, 2008
Procrastinate
Procrastinate: to put off, delay.
Procrastinate: not picking up your tax returns from the CPA office even though you received their phone call 2 weeks ago.
Procrastinate: delaying looking at the tax returns the CPA sent until April 14.
Procrastinate: realizing at 9pm on 4/15 that you don't have enough stamps to mail your tax returns at midnight.
Procrastinate: delaying that can be painful.
Procrastinate: not peaceful.
'til later
Procrastinate: not picking up your tax returns from the CPA office even though you received their phone call 2 weeks ago.
Procrastinate: delaying looking at the tax returns the CPA sent until April 14.
Procrastinate: realizing at 9pm on 4/15 that you don't have enough stamps to mail your tax returns at midnight.
Procrastinate: delaying that can be painful.
Procrastinate: not peaceful.
'til later
Monday, April 14, 2008
Extra Time
Tomorrow is Tax Day. If you have run out of time to pull your paperwork together
, you can file an extension. An extension is automatic permission
given to complete your tax filings. You will have an additional 6 months, until October 15.
It is not an extension of time to pay. You can file Form 4868 along with a check to cover your tax bill. You will want to send sufficient $ as the government late paying charges are sizable plus they charge interest.
States who collect individual income taxes provide similar methods for time extensions.
If you are self employed or retired and remit to Uncle Sam via quarterly estimates, remember that your first installment of 2008 income taxes is also due to be post marked on or before April 15.
A reminder that the stimulus checks are triggered by our tax filings.
There are many reasons to get those forms filed as soon as possible.
'til later
, you can file an extension. An extension is automatic permissiongiven to complete your tax filings. You will have an additional 6 months, until October 15.
It is not an extension of time to pay. You can file Form 4868 along with a check to cover your tax bill. You will want to send sufficient $ as the government late paying charges are sizable plus they charge interest.
States who collect individual income taxes provide similar methods for time extensions.
If you are self employed or retired and remit to Uncle Sam via quarterly estimates, remember that your first installment of 2008 income taxes is also due to be post marked on or before April 15.
A reminder that the stimulus checks are triggered by our tax filings.
There are many reasons to get those forms filed as soon as possible.
'til later
Sunday, April 13, 2008
Quality Materials
Bob and I customarily search out the best bargain. We spent 10 minutes in a large discount store not long ago trying to determine which bulk package of toilet paper would be the best deal. Best deal meaning cheapest yet functional with or without one of the coupons we had.
I enjoy knitting. I check the discounted bins for deals. A found some of those fancy light-weight mini-skeins at Big Lots. They make those furry looking scarves. What a deal.
About a month ago I was looking for yarn to make an afghan for our new van. In the Midwest, it's a good idea to keep a blanket in your car. I was searching Hobby Lobby looking for a deal.
I have knitted for years with cheap yarns. That day I decided to try a newer brand. I found my color and paid $3.49 for each 7 oz. skein. That's about $1 more a skein than what I'm used to spending.
How nice this yarn is! I'm headed back next week for more. I have enjoyed working with it so much. Before I go back, I'll wash and block the afghan I completed. I'm hoping this yarn will wash and dry well.
Like they say, the proof is in the pudding.
'til later
I enjoy knitting. I check the discounted bins for deals. A found some of those fancy light-weight mini-skeins at Big Lots. They make those furry looking scarves. What a deal.
About a month ago I was looking for yarn to make an afghan for our new van. In the Midwest, it's a good idea to keep a blanket in your car. I was searching Hobby Lobby looking for a deal.
I have knitted for years with cheap yarns. That day I decided to try a newer brand. I found my color and paid $3.49 for each 7 oz. skein. That's about $1 more a skein than what I'm used to spending.
How nice this yarn is! I'm headed back next week for more. I have enjoyed working with it so much. Before I go back, I'll wash and block the afghan I completed. I'm hoping this yarn will wash and dry well.
Like they say, the proof is in the pudding.
'til later
Saturday, April 12, 2008
Fairness
In 2005, 40% of Americans filing taxes paid no taxes and received $ back from the government. Mostly in the form of Earned Income Credits for working families and working heads of household.
That same year 10% of filers paid 70% of the income taxes collected. The top 1% of filers paid 40% of the taxes collected.
1/2 of all filers covered only 3% of taxes collected.
Fair? It probably seems to the lower income populace that the rich are getting all the brakes and paying less proportionally. Maybe a fairer tax would be a flat tax. Blind justice.
'til later
That same year 10% of filers paid 70% of the income taxes collected. The top 1% of filers paid 40% of the taxes collected.
1/2 of all filers covered only 3% of taxes collected.
Fair? It probably seems to the lower income populace that the rich are getting all the brakes and paying less proportionally. Maybe a fairer tax would be a flat tax. Blind justice.
'til later
Friday, April 11, 2008
Your Bottom Line
The question this time of year is: Are you getting a refund? Have you filed? When will you get your $? If I owed, I would get in the line Tuesday night at the post office. Why give them my $ ahead of the deadline?
Is that your bottom line?
Please take a moment and look at page 2 of your 1040. The bottom line (76) is just above the signatures. That is the amount you owe.
Line 74a is the bottom line if you are expecting a refund.
But Line 63 is your true bottom line. Your total tax.
Take a moment and see what your total tax really is. This is the amount your income/earnings cost you federally for 2007.
This is an important number for planning 2008. We are already 1/4 of the way through the year. Adjust your W4 with your employer if necessary.
'til later
Is that your bottom line?
Please take a moment and look at page 2 of your 1040. The bottom line (76) is just above the signatures. That is the amount you owe.
Line 74a is the bottom line if you are expecting a refund.
But Line 63 is your true bottom line. Your total tax.
Take a moment and see what your total tax really is. This is the amount your income/earnings cost you federally for 2007.
This is an important number for planning 2008. We are already 1/4 of the way through the year. Adjust your W4 with your employer if necessary.
'til later
Thursday, April 10, 2008
Mortgages!
An unsolicited fax came through yesterday boasting 10 day closings, 5.875% 30-year fixed. Cash for any reason like credit cards, taxes, tuition, vacation, investment property and second homes.
95% financing with no documents needed.
Self employed - OK
Bankruptcy - OK
Good or bruised credit - OK
Free appraisal.
How can you resist? This alone could rescue the real estate market. If people can borrow 95%, this will be the time for thousands to upgrade.
This could be the answer for the little guy. He can now become the landlord. We should have had these programs available years ago.
'til later
95% financing with no documents needed.
Self employed - OK
Bankruptcy - OK
Good or bruised credit - OK
Free appraisal.
How can you resist? This alone could rescue the real estate market. If people can borrow 95%, this will be the time for thousands to upgrade.
This could be the answer for the little guy. He can now become the landlord. We should have had these programs available years ago.
'til later
Wednesday, April 9, 2008
More Math
The quarterly statements are coming in.
One of my IRAs has lost 10%. It will need to increase by over 11% to get back to where it was 12/13/07.
Back in 2000 when the tech bubble burst, folks lost 40% and 50% of their equity holdings. Some have come back near their 2000 values which mean they have increase 67% and 100% over 7 years.
We are holding tight with our equity holdings for now. Remember to sell, locks in the losses. As we remain optimistic (listening to Bob Brinker), we will hold through into 2009.
The market can be fickle. It and the nation are a bit giddy with the prospect of change in early 2009. This is another reason I believe we will see positive quarters ahead.
A new administration may cast an uncertainty. I would think a year from now things may be unstable.
'til later
Tuesday, April 8, 2008
Walter Williams
I found an economics professor at George Mason University who has some interesting quotes. You can visit his website yourself and check him out.
Here is one excerpt from an interview I found:
"It’s nonsense if you say, “Oh, well that’s the same thing as my right to free speech.” If you apply these bogus concepts of rights to, let’s say, the right of free speech or my right to freedom of travel, that would mean that in order for me to enjoy my right to free speech, it would impose an obligation on others to provide me with an auditorium and a microphone—or my right to freedom of travel would require others to provide me with airplane fare and hotel accommodations.
Of course, for the leftist people who are pushing these kind of things, and many people on the right as well, it sounds so caring to say that somebody has the right to medical care. And here comes Williams who says, No, you don’t have a right to medical care; you don’t have a right to anything that you can’t afford. Now, because I take that position, that may sound mean to people. But when one reaches into his own pockets to help his fellow man, that’s quite laudable.
However, when one reaches into somebody else’s pocket to help his fellow man, that’s despicable. It’s nothing more than theft."
Dr. Williams is a black man in his 70s. He teaches economics as a way of thinking. He is strong on individual rights and freedoms. He was raised in Philadelphia by a single mother.
Check him out.
'til later
Here is one excerpt from an interview I found:
"It’s nonsense if you say, “Oh, well that’s the same thing as my right to free speech.” If you apply these bogus concepts of rights to, let’s say, the right of free speech or my right to freedom of travel, that would mean that in order for me to enjoy my right to free speech, it would impose an obligation on others to provide me with an auditorium and a microphone—or my right to freedom of travel would require others to provide me with airplane fare and hotel accommodations.
Of course, for the leftist people who are pushing these kind of things, and many people on the right as well, it sounds so caring to say that somebody has the right to medical care. And here comes Williams who says, No, you don’t have a right to medical care; you don’t have a right to anything that you can’t afford. Now, because I take that position, that may sound mean to people. But when one reaches into his own pockets to help his fellow man, that’s quite laudable.
However, when one reaches into somebody else’s pocket to help his fellow man, that’s despicable. It’s nothing more than theft."
Dr. Williams is a black man in his 70s. He teaches economics as a way of thinking. He is strong on individual rights and freedoms. He was raised in Philadelphia by a single mother.
Check him out.
'til later
Monday, April 7, 2008
Optimist
Bob Brinker is optimistic about the economy for the rest of 2008 and into 2009! Good news after a discouraging employment report this week.
Bob thinks we have turned the corner. It was great to hear him this weekend.
Meanwhile, our Speaker of the House is calling for another stimulus package for individuals. We have not yet received the current plan. What is she thinking?
Most comments I have heard regarding the $1,200 checks due to flow into the economy in early May claim that the effect will not be determined until July or August.
I wanted to share Bob Brinker's optimistic view this fine Monday in April.
Have you filed your taxes yet?
'til later
Sunday, April 6, 2008
Entrepreneurs Robbed
President Obama has promised to remove the Social Security cap. It stands at $102,000 for 2008. He will work to raise income taxes as well.
The entrepreneurs will quit. Small businesses are big employers. When the boss folds the company, many more will be unemployed.
Why will the self-employed, industrial owners stop doing what they do? Simple math.
If a small business owner makes $200,000 this year, that person's FICA/Medicare cost is $18,448. Without a Social Security cap, the cost is $30,600.
If the business owner makes $500,000, the FICA/Medicare cost now is $27,148. Without the cap, it will go to $76,500. If the entrepreneur makes $1,000,000, the expense now is $41,648. Without the cap, it will be $153,000.
The rich will be poorer and people will loose their jobs working for them.
I would ask those who envy the rich, would you rather work for a poor man?
'til later
Saturday, April 5, 2008
Expensive Gratification
Do not fall for those rapid refund deals at some tax preparers. They have to fully reveal the costs of these deals. Check it out before you agree, please.
You have wonderful options like filing electronically and/or getting direct deposit of refunds.
Bob and I paper filed February 22 and our federal refund appeared in our bank account March 20.
A friend electronically filed on line without cost on March 23 and on March 28 her federal refund appeared in her bank account. She was surprised how easy the free process was. She got linked to the software (I think it was TurboTax) through irs.gov. Free.
Delay gratification and save your $.
'til later
You have wonderful options like filing electronically and/or getting direct deposit of refunds.
Bob and I paper filed February 22 and our federal refund appeared in our bank account March 20.
A friend electronically filed on line without cost on March 23 and on March 28 her federal refund appeared in her bank account. She was surprised how easy the free process was. She got linked to the software (I think it was TurboTax) through irs.gov. Free.
Delay gratification and save your $.
'til later
Friday, April 4, 2008
Vital Program
The Social Security Act was signed into law August 14, 1935 and the first payouts began January 1937. The first payout was a lump sum of $.17. In 1940, the benefits were first issued monthly.
Medicare became law July 30, 1965 and the first sign ups were accepted July 1, 1966.
Until 1951, earners paid 1% toward the program on the first $3,000 of earnings. In 1979, it was 6.05% (both Social Security and Medicare) on the first $17,700 of earnings.
Now, earners pay out 7.65% on the first $102,000 earnings of which 1.45% is Medicare without earnings limit. All wages are taxed 1.45% for Medicare.
Remember, employers match this withholding and the self employed pay both halves.
Knowing that Medicare will go bust before the end of the next decade, I wondered about Social Security.
According to Consumer Reports, 2/3 of Social Security recipients over 65 rely on it for 1/2 of their income. For 22% married and 42% single recipients over 65, their Social Security checks are 90% of their retirement income.
With the Baby Boomers retiring and living longer, the latest studies are confusing. I think the program will have to be boosted with higher rates or extended maximum earnings. Possibly denying those with fixed retirement programs, a redistribution of wealth. Or is that socialism? Maybe the entire program is socialistic.
We know that they now tax some Social Security benefits. Taxes on already taxed $. Is that double taxation? Maybe benefits will be taxed more as a solution.
Politically it (SSA) is a hot potato. Privatizing suggestions are shot down but the reality is the program is equal to an annuitized $225,000 policy which would pay out the average of $1,045 monthly with increases based on inflation and continued benefits to spouses.
The truth is the fix will be painful.
'til later
Medicare became law July 30, 1965 and the first sign ups were accepted July 1, 1966.
Until 1951, earners paid 1% toward the program on the first $3,000 of earnings. In 1979, it was 6.05% (both Social Security and Medicare) on the first $17,700 of earnings.
Now, earners pay out 7.65% on the first $102,000 earnings of which 1.45% is Medicare without earnings limit. All wages are taxed 1.45% for Medicare.
Remember, employers match this withholding and the self employed pay both halves.
Knowing that Medicare will go bust before the end of the next decade, I wondered about Social Security.
According to Consumer Reports, 2/3 of Social Security recipients over 65 rely on it for 1/2 of their income. For 22% married and 42% single recipients over 65, their Social Security checks are 90% of their retirement income.
With the Baby Boomers retiring and living longer, the latest studies are confusing. I think the program will have to be boosted with higher rates or extended maximum earnings. Possibly denying those with fixed retirement programs, a redistribution of wealth. Or is that socialism? Maybe the entire program is socialistic.
We know that they now tax some Social Security benefits. Taxes on already taxed $. Is that double taxation? Maybe benefits will be taxed more as a solution.
Politically it (SSA) is a hot potato. Privatizing suggestions are shot down but the reality is the program is equal to an annuitized $225,000 policy which would pay out the average of $1,045 monthly with increases based on inflation and continued benefits to spouses.
The truth is the fix will be painful.
'til later
Thursday, April 3, 2008
Expected Lives
I believe it is important to have 6 months of expenses in an emergency fund kept in an accessible account.
There are things in our lives that have expected lives. We know a refrigerator won't last forever. Bob and I have had to replace our water heater. Also, our roof, our furnace, and our asphalt driveway.
One resource published these expected lives in years:
Car 10-15
Microwave 11
Refrigerator 17
Washer/Dry 13-14
Gas Range 19
Water heater 11-14
Center A/C 15
Gas furnace 18
Asphalt shingles 15-25
Carpet 11
Asphalt driveway 10
Besides our emergency fund, we save regularly toward these purchases we know are in our future. We just replaced our 10 year old car. Our furnace is 13 years old and our roof is 20 this fall.
'til later
There are things in our lives that have expected lives. We know a refrigerator won't last forever. Bob and I have had to replace our water heater. Also, our roof, our furnace, and our asphalt driveway.
One resource published these expected lives in years:
Car 10-15
Microwave 11
Refrigerator 17
Washer/Dry 13-14
Gas Range 19
Water heater 11-14
Center A/C 15
Gas furnace 18
Asphalt shingles 15-25
Carpet 11
Asphalt driveway 10
Besides our emergency fund, we save regularly toward these purchases we know are in our future. We just replaced our 10 year old car. Our furnace is 13 years old and our roof is 20 this fall.
'til later
Wednesday, April 2, 2008
Quarter End/Begin
Yesterday I gathered some March 31 ending balances on line to begin our quarterly balance sheet. A balance sheet is a listing of all assets and liabilities to reflect equity. Equity is the difference between assets and liabilities and hopefully it is a positive number.Yesterday was the beginning of the second quarter of the year and the stock market found another upward move. Today Chairman Bernake meets with Congress to answer questions regarding the Bears Stearns buy out.
I think the market may be nervous today and we will see selling. We will wait and watch together.
'til later
Tuesday, April 1, 2008
Transportation Costs
There's a call out for truckers to lay low today to make their point that we all depend on them to deliver nearly everything we enjoy. Diesel prices are destroying the independent trucker's livelihood.
For 2008, the IRS standard mileage rate is $0.505 (50 1/2 cents) per mile. If the price of fuel reaches $4/gallon, the government may increase this rate.
This is the rate they set for cars, vans, pickups, and panel trucks. We, like other small business owners, carefully track our business miles. I post those costs weekly in our QuickBooks program. It's easier to do weekly than try to reconstruct at the end of the year.
'til later
For 2008, the IRS standard mileage rate is $0.505 (50 1/2 cents) per mile. If the price of fuel reaches $4/gallon, the government may increase this rate.
This is the rate they set for cars, vans, pickups, and panel trucks. We, like other small business owners, carefully track our business miles. I post those costs weekly in our QuickBooks program. It's easier to do weekly than try to reconstruct at the end of the year.
'til later
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