40 years of faulty wiring

Stupid Financial Advice that will put You in the Poor House

1Canadian%20Money%20Rainbow%20-%20Jonathan%20Hayward-Canadian%20Press. Buy low, sell high.  Oh really? Are you a stock market aficionado? Can you play the stocks along with the best? Even the pros cannot manage the market with perfect timing. The odds of doing this consistently are incredibly low. That means you have to be buying straight stocks rather than mutual funds or a GIC or even Savings Bonds and keeping an eye on how they’re doing. I wish you luck with that. Usually mutual funds or ETFs are the way to go for the middle-class investor. Affluent to wealthy people may have more leeway but even the affluent need a good financial advisor when investing their hard-earned cash.

2. Follow the 1/3 rule. The 1/3 rule in a nutshell: to invest your money in a supposedly wise manner, invest 1/3 of your income in a high risk venture, 1/3 in a moderate risk and 1/3 in a low risk. Seriously? Let’s consider a high risk. Someone wants you to give them a few start-up bucks to open up a restaurant, promising you a significant return, maybe even a long-term venture together. Everyone knows the restaurant business is notoriously unstable. If you are a millionaire, go ahead with the 1/3 rule. Otherwise, what are you thinking? Invest 90% of your funds in low-risk and maybe the rest in moderate – high risk. You can’t afford the risks.

3. Always get a private financial investor or stock broker. Don’t be stupid. That’s like saying always trust a used car salesman.You might be lucky to find a good one and they are out there, but most brokers are in it to win it for themselves. Generally speaking major banks are the way to go. They also have an agenda of course, but there are so many people investing through banks that your likelihood of a good return is significantly higher than investing through someone whose eye is more on her own commission than on your financial well-being. Besides they might be pushing a specific product and that is ridiculously misleading.

4. Open a credit card account but don’t use your card so you can build up a good credit rating. Of course you will use that card. And often. You will tell yourself it’s only for emergencies but your definition of emergency will be pretty lax once you realize how easy it is to pull out that card and ch-ch-charge it!

5. Nix a written financial plan. Okay so you won’t reach every goal you have on the plan, it’s more of a forecast than 10 financial commands written in stone. A good financial plan however offers room for flexibility and allows for set-backs. It is updated regularly to suit your goals and financial situation. You need it and you need a good, certified financial planner to help you make one.

6. Ignore undervalued stocks. This may be smart but an undervalued stock that has good potential to rise is a different story. Your financial advisor at your bank or your certified financial planner (whom you have checked out and are satisfied with his or her credentials) should be able to advise you on this one.

7. Canadian-Currency1Hire an investor without recognizing significant personal and professional characteristics. A good advisor is patient, understands human needs, has no hidden agenda, has strong, verifiable credentials and is without bias.

8. Ignore your retirement needs, it will all take care of itself. This one is huge. you have to do the math in order to predict what you will need to live on comfortably when you retire. You need to allow for the cost of living, inflation, recession, ill-health, the duration of your mortgage payments, and the age you want to be when you retire. These aren’t fun facts but they’re important. You need to invest in an RRSP or ETF portfolio you are willing to buy and hold, or some such thing and contribute to it with every pay check.. It is never too early (or too late if you haven’t begun) to start planning for your retirement. Seriously. That even applies to people who are fresh out of university or college and are still in their 20’s. The sooner the better.

9. An RESP for your kids shouldn’t be a priority. Well, if you cannot invest in your child’s education and your child has to apply for a bank loan or a government loan, the world won’t stop turning. Most of us had to pay for our own schooling. It was tough, but we did it. However one of the best gifts you can give your child is an education and if you can do it, then why not? The sooner you invest in an RESP, the better. It doesn’t have to be a large investment. I started investing for my 6-year-old daughter with only $25 a month since, as a single mother on a $40,000.00 a year income and no child support, that was all I could afford. I increased it to $50 a month only after she reached about the age of 13. It was the best I could do. However, in Ontario the government matches RESP investments dollar for dollar up to $4,000.00 annually. By the time she was ready for college at the age of 18, I had close to $6,000.00 for her, more than enough to pay for a 2-year college program. Who knew?

10. TFSA’s aren’t as financially sound as RRSPs. Not so. The proper use of a TFSA (tax-free savings account) is to hold your money in it for as long as possible. Investing then withdrawing on a regular basis will lead to taxation and that renders it useless. However, sometimes you may need to cash in your TFSA for an emergency fund. It’s a small tax shelter when used properly. It’s great as an emergency savings plan or for a relatively short-term goal, such as a purchase you wish to make within 5 years of opening the account. It’s wise to take advantage of this investment on a short-term basis. If you’re looking for a retirement fund however, RRSPs or ETFs that are comprised mostly of mutual funds are the best way to go. RRSPs tend to be good starter investments for the new investor but they are also very reliable for the middle-class investor who has little risk room.

11. You always need lots of diversity in your mutual funds. Not necessarily. The “don’t put all your eggs in one basket” mentality is a smart one but a more experienced investor doesn’t invest in hundreds of stocks via mutual funds. Those that are tried and true can be highly beneficial and relatively risk-free.

12. Renting your home is throwing money away. Nonsense. It is true that a house is a long-term investment and that home ownership gives a person a feeling of accomplishment. But renting isn’t throwing money away. Going to a casino and gambling away your pay check is throwing money away. if you aren’t in a position to buy, and that may always be the case, there are other ways to invest your money so you won’t be house-poor or cash-poor. When you can’t rent for significantly less than you can own, that can be a more sensible move than buying a home. At least you don’t have to panic when a recession hits, and recession will hit. It is inevitable, especially with financial trading and national economy going more global than ever. Besides, you are locked in to your mortgage and your location when you buy a house. And you are responsible for your own yard work and the repair and maintenance of your own home. Meh. Flip a coin. To each her own.

I’m sure you know of other tips to avoid bad investing (or missing out on good investing). I’d love to hear from you to add them to my list.

 

 

 

 

 

 

August 24, 2014 Posted by | Finance | , , , , | 5 Comments

Psychopaths in Suits – Corporate Criminals in Our Midst

Recently another ponzi scheme was exposed after its evil mastermind,  Jeffery White, passed away in 2011, from a brain aneurysm at the age of56. Lucky for him.   Brown, one of the “investors” whom he bilked out of his life savings to the tune of $250,000.00, has stated “if he wasn’t already dead, I’d kill him.” Indeed.  The truly evil thing about White was that he knew Brown and his wife, Anne, and they were his friends.  Imagine how he treated his enemies?  Brown’s wife used to teach White’s wife, Henny, in grade school, hence the connection between Brown and White. It turned out to be a devastating connection, personally and financially. Too bad Anne didn’t teach Henny about business ethics.

Ponzi schemes are named after Charles Ponzi, an Italian businessman and con artist in the U.S. and CanadaCharles Ponzi promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage.In reality, Ponzi was paying early investors using the investments of later investors. Some ponzi schemes also pay investors with their own initial investment, masquerading it as accrued profit. An interesting flick that presents a ponzi scheme (without calling it so) is Green Guys, about a group of 20-something hot shots who bilk unsuspecting investors for millions of dollars.

There are 5 main characteristics of a ponzi scheme:

  1. The Benefit: A promise that the investment will achieve an above normal rate of return.
  2. The Setup: A plausible explanation of how the investment can achieve these above normal rates of return.
  3. Initial Credibility: The person running the scheme needs to be believable.
  4. Initial Investors Paid Off: For a time, the investors need to make at least the promised rate of return.
  5. Communicated Successes: Investors need to hear about the payoffs.

Steps in the Ponzi Scheme

The steps are as follows:

  1. Convince a few investors to place money into the investment.
  2. After the specified time, return the investment money to the investors, plus the specified interest rate.
  3. Convince more investors to place their money into the system by referring to the profits of the earlier investors.
  4. Repeat steps 1 through 3.
  5. During step 2 at one of the cycles, break the pattern.  Escape with the money and start a new life. Or, in Jeffery White’s case, drop dead.

White’s known investors say they are out as much as $5 million. The scheme unravelled after White’s sudden death. Trustees of White’s estate became “extremely uncomfortable“with the discoveries they made. White solicited investments from many of his insurance clients, while treating their moneys as funds that were loaned to him for his general use. White’s business and personal accounts were intermingled, making the tracing of investments impossible.  At the time of his death, White was carrying more than $300,000 in credit card debt and was behind his time-share at Diamond’s Edge Muskoka Cottages. The vintage Porsche 911 Turbo he drove around the GTA was leased. There were no red flags but court documents show White had money problems dating back to the early 1990. Reassessment of his personal income taxes of the years 1996 to 2000 resulted in a substantial debt to Revenue Canada. Testifying at his tax court appeal White claimed his sister left him $1.3 million in debt.The judge in the case called White “vague” and his records “woefully inadequate.” By moving funds about through numerous bank accounts, he made it impossible to prove his case. In 2006, he dropped his appeals and paid $400,000 in arrears.

Psychopathy runs on a continuum with white collar criminals falling in the middle. They’re deceitful and egotistical. White-collar criminals might not physically destroy people, but they have no problem financially destroying them. This type of psychopath is high-functioning. They’re intelligent, have great interpersonal skills, are powerfully persuasive and able to disguise themselves very well. A psychopath is all about manipulation. They’re always assessing, “How can this particular job or person meet my needs? How can I exploit them?’” 

The list of white-collar psychopaths is almost endless. To a certain extent, most people compartmentalize and lead different lives. It’s normal for your work persona to be divergent from your family life. With psychopaths the compartmentalizing is much more exaggerated Jim Hammes, formerly a controller with a Cinncinnati-based company, embezzled $8.7 million of company money into a bank account in the name of a second company doing business with his company. He is currently a fugitive wanted by the FBI and has been on the run since 2009. Hammes also abandoned his two families, neither of whom knew about the other: he was married to two women and had children with both.

Frauds can be very deceptive in terms of their appearance, status and age. Joanne Schneider, a 71-year-old woman in Ohio was recently charged with operating a ponzi scheme and bilking $60 million dollars from 900 investors. The scheme unraveled when a Schneider family member became suspicious after his mother was promised a 16 to 20 percent return on her investment. Schneider’s criminal resume is impressive: securities fraud, selling unregistered securities, engaging in corrupt activity, misrepresentations in securities, theft, and money laundering. Schneider’s husband, Alan Schneider, played a lesser role in the scheme, pled guilty to security and theft charges. He got probation. She got 10 years. If she serves the full sentence, Schneider will be 81 when she is released from prison – either that or deceased from natural causes.

August 23, 2012 Posted by | Bizarre yet True, BullCrap, corrruption, Crime and Punishment, Education, Finance, Human psychology, money, Politics, Pop Culture | , , , , , , , , , , , , | 2 Comments

The Average Canadian is Truly Joe Average

As Canadians we have a lot to be proud about in terms of living in a wonderful country like Canada.  The best country in the world, in fact. Where else can you retire on nothing and still be taken care of (see my previous blog Ridiculous Retirement Advice).  However the stats for the average Canadian as a person are considerably less impressive:

  1. the average male is slightly overweight (think of that ugly beer belly many middle-aged men sport) and only earns $30,000 a year
  2. Many Canadians spend $2,000 on fast food and/or restaurants annually yet they save zero for retirement (again, that relates to my previous post if you are interested in the no-frills retirement option)
  3. the average Canadian is $112,000.00 in debt ….  watch cbc a living wage instead of minimum wage
  4. Canadians spend more on booze than fresh fruits and vegetables
  5. these stats don’t jibe with the fact that most Canadians have graduated from college or university
  6. most people are happy with their economic situation
  7. if you live in a house larger than 1,900-sq.-feet,  contribute anything at all to your RRSPs and don’t have a mortgage, you’re doing better than most
  8. The average household debt, including  mortgages, credit cards and personal loans equates to a monthly payment  of about $1,140 ….  watch canada’s growing debt
  9. There’s no evidence that we have a retirement crisis since overall Canadians contribute 30% to their RRSPs
  10. If your family brings in more than $68,000 a year, you’re doing better  than average

The average household rake in between $68,000.00 and $86,000.00, but that is only if both spouses are working.  It is the combined salaries that raise the household income from a single person (on average only $30,000 to $40,000) to these higher amounts. Usually those who are university educated fare far better financially.  An individual can make as much money annually as a combined household income with 2 adults who haven’t graduated from a post-secondary institution.

The stats seem rather disparaging to me, personally but in comparison with the United States they really aren’t so bad:

  1. In 2006, the median annual household income rose 1.3% to $50,233.00
  2. The real median earnings of men who worked full-time, year-round climbed between 2006 and 2007, from $43,460 to $45,113
  3. For women, the corresponding increase was from $33,437 to $35,102 watch thomas sowell – gender bias and income disparity – a myth?
  4. households with an income exceeding $60,000, had two income earners
  5. The educational attainment of the U.S. population reflects that the vast majority of the population has completed secondary education and a rising number of college graduates outnumber high school dropouts.
  6. As a whole, the population of the United States is spending more years in formal educational programs
  7. an average per person of more than $43,000 in debt
  8. the American mortgage debt works out to over $60,000 in housing debt for every adult in the country
  9. the average debt for every adult in the United States is $113,360
  10. Average credit card debt per household with credit card debt: $15,956

You’re no better off if you skip to the States to try to capitalize on lower-income taxes as a senior retiree.  Stats seem to bear this out.  The numbers sound abysmal but apparently if you fall in that range somewhere, you’re doing okay. It seems the average Canadian and the average American have a lot in common.  Who knew?

July 9, 2012 Posted by | Education, Finance, money, Politics | , , , , , | Leave a comment

Ridiculous Retirement Advice

Although I’ve pretty much been doom and gloom about Canada’s ongoing recession, job losses, and the European euro crash, I found some interesting (and hilarious) non-investment retirement advice in MoneySense Guide to Retiring Wealthy that has lifted my spirits. I always wondered what happened to people who either couldn’t or wouldn’t invest a cent for their retirement.  I know people in the latter situation, if you can believe it. One family blows their money at the racetrack every week (how they can afford that while living on a government-funded seniors’ pension, God only knows).  The other is a young man who is more than capable of holding down a job, yet he works the welfare system and collects every month because he doesn’t like work.  No, seriously. There just seem to be people like that in the city, don’t there?  They learn barely legal loopholes and they live on us while we live on … us.  But I digress….

I am reading the updated 2012 edition of MoneySense and found, on p. 58, the most hilarious retirement advice ever.  Now the book states it can help you to retire wealthy, however it seems to have thrown in a codicil here for people who just want to retire, wealthy or not. It presents the no-frills retirement option:

  • rental property with utilities
  • no car – public transport only
  • no cable, internet, etc
  • 3 meals a day
  • no extras – even a bottle of booze every week
  • it didn’t mention food and clothing banks or soup
    kitchens…consider those your luxuries
  • it didn’t mention begging or busking …
    consider those your optional additional income
    resources

If you can live happily under these rigid conditions (and some people can) the total amount required to save for your retirement is:  zero.  Seriously.  Where does the money come from to finance the aforemementioned, you say? 3 very solid government systems:  OAS (Old Age Security), GIS (Guaranteed Income Supplement) and CPP (Canada Pension Plan).  It is not true that CPP and OAS are in danger of vanishing.  Poppycock.  Those rumours have been swirling around since the 1970s but the two systems are still paying out annually to ever senior in Canada.  watch the canada pension plan with malcolm hamilton

This provides a couple with a combined income of approximately $24,000.00 annually, every year.  I do not know what a single retiree is given but I do know  (and I quote) “you won’t have to live on cat food.” watch 88 year old stand up to harper government

While it’s reassuring to know that if, for some tragic reason, you wind up on skid row, that you will still be cared for financially, it just rips me that you can plan for a basic retirement by investing nothing. I cannot stop snickering over that one. Can you imagine watching a commercial like that? So for all of you very laissez-faire types who have been late to the investment party, or who may never make it, relax.  You live in Canada.  Let the elderly Americans eat cat food…or to COIN a phrase…let them eat cake. watch make your money worth more

moneysense.ca

July 7, 2012 Posted by | Finance, money, Politics | , , , , , | Leave a comment

Is Toronto’s Condo Market Truly a Bubble waiting to Burst?

The jury’s out on this one.  There are a number of reasons why the condo blitz seems to be taking place in the past few years (and will continue to do so for several years to come):

  1. many more single women are buying condos – they won’t wait for husbands or kids and they have the income to afford it
  2. corporate investments – businesses are buying the units and turning them over at a nice, tidy profit
  3. private buyers are doing the same
  4. immigrant people are buying in Toronto
  5. international buyers feel safe in Canada

However, # 2 and # 3 don’t send me into a panic.  So what they’re turning the units for a profit?  I intend to live in my investment one day.  It is unlikely i will want to move out once I get settled in.  I like permanence.  Most of us do. watch toronto’s condo market

Who can predict the real estate market?  6 years ago the U.S. brought us down with that joyous recession, mostly due to the corruption of their real estate market.  You do remember those phony, outrageously unrealistic mortgage rates given to people who couldn’t afford to a kleenex to sneeze into, don’t you? Boom, bust and echo, baby.  Just so long as you have the finances to survive the bust, there shouldn’t be a problem or a panic. watch family guy – glass house

And before you go hopping up on your soap box about condo fees consider mortgage rates, utilities and land property taxes.  How much control does any homeowner have over that?  watch family guy – peter turns house into a puppet

Yes there are renters (like me, currently) who are very happy where they are for a number of reasons:

  1. Usually you won’t be house poor with a decent rent
  2. you don’t have to sell and hope to make a decent profit when you want to move – move anytime you want
  3. the building is maintained for you – just like a condo – no work for you, my dear

There are cons to renting of course:

  1. it’s not an investment…some say it is throwing your money away.  I strongly disagree. Throwing money away is visiting the Woodbine Race Track and betting on the horses.  Keeping a shelter over your head is not.
  2. Rent increase is no longer controlled by the regional government…however most building owners aren’t entirely idiotic.  Unless they want to chase away their tenants and have trouble acquiring new ones, rent increase will probably remain within a reasonable percentage.
  3. When renting becomes as expensive as owning, then you are probably foolish not to buy.  But only then.

There are always pros and cons to renting and owning.  It’s pointless to predict what will be.  I live for the here and now. Someone warned me away from purchasing a condo recently.  The sage explained that “in ten years there will be such a condo boom it will be impossible to sell your unit.”  Who says I will want to?  I might be dead by then. watch how to buy a house: how to buy a condo

There is no such thing as a risk-free investment. Even your “safe” mutual funds where you don’t “put all your eggs in one basket” (hello Wealthy Barber) can crash at any time.  NOTHING is guaranteed. If you’re considering a condo just now, stop worrying about something that may never happen and grab a hold of Nike’s motto:  JUST DO IT.  watch Polka dot door

May 23, 2012 Posted by | Education, Finance, money | , , , , , | Leave a comment

Canadians’ Well-Being and Permanent Poverty – Living the Canadian Dream

Welfare: the right to well-being, security and safety, including fulfilling basic needs to ensure survival. This is the general idea behind the term but welfare carries with it a negative connotation:  those lucky enough not to need it imagine lazy folk who simply won’t work for a living, or who aren’t trying hard enough to find jobs.  Poppycock.  This may be true for a small percentage of Canadians and landed immigrants, but guaranteed this is not the norm: most people want to work; are skilled and educated enough to work; and do not want to live with the stigma of receiving welfare.

Racism being what it is in Canada, many Caucasians believe it is landed immigrants and minorities who are bleeding the welfare system dry through a lack of initiative and illegal manouevers.  Not so.  There are more Caucasian multi-generational Canadians receiving welfare (including those who are not in need of it) than there are minorities and LI’s. As subjective as my own experience is, the only people I know who rip the system are Caucasian Canadians whose family have lived in Canada for generations. In fact, many Canadians receiving welfare once belonged to the “middle class”, evicted from their homes after job loss during the start of the recession. Others do not receive welfare for more than one or two months to keep them afloat until (presumably) they find another job. watch judy graves on why welfare matters to everyone

Many people who receive welfare are known as the “working poor“.  They  have jobs but through no fault of their own, are employed part-time, or they work for the paltry minimum wage of $10.25 an hour: hardly a financial means for raising a family. In fact since Harper’s House of Horrors came to be, social assistance is nearly non-existent.  Why, you ask?  Duh.  You voted for him and then you wonder why so many hard-working Canadians ...  oh never mind.  I’ll just get all in a tizzy.  What was I saying? Oh yes. Harper’s agenda is not for individual citizens, such as you (who voted for him) and me (who did not).  It is for large, multi-national corporations, the recipients of his glorious tax breaks and other financial incentives to keep them afloat during the recent recession. Well there’s always May 2012 for you to get it right (although you probably won’t).  Enough blasting my faithful blog followers of precisely one (hi Damien).  Watch income inequality and child poverty in Canada

To receive welfare in Ontario you must earn or live on $800.00 a month or less.  The website doesn’t tell you that of course but if you want to test my theory give your local welfare office a call and inform the clerk that you currently receive $850.00 or $900.00 per month to live on. She will interrupt you to tell you that if you live on more than $800.00 a month you are ineligible to receive financial assistance. If you live on $810.00 or more you are out of luck.  In the event you do live on $800.00 a month or less you are entitled to …  not much.  You might get $200.00 or slightly more a month but you won’t be laughing all the way to the bank. Poor no more – there is a way out

Along with receiving absolute minimal financial assistance for the working poor, anything these people have in the way of financial assets has to be depleted before qualifying for welfare:  RRSPs, homes, cars.  It may seem as though this is reasonable: if you can afford a house, you can afford to live without assistance.  But is it reasonable to tell people to spend their RRSPs in order to receive social assistance?  What happens when it is time to retire?  They must continue to ask for more assistance and never get off the treadmill.  How about a car?  If a person needs a car to get to work where they make that $10.25 an hour, how will they be able to hold a job after selling their cars? Ditto houses.  Rentals are not cheaper than ownership depending on where a person lives. Like it or not, everyone needs shelter. watch homeless middle class

The Canadian welfare system is not designed with dignity in mind. Nor is it designed to truly assist anyone.  If assistance comes with the price tag of losing one’s retirement security, transportation and shelter in a safe, secure part of town, I’m betting many people would hedge their bets on going hungry and losing sleep at night over their bills, if they’re lucky to avoid eviction.  In Canada, it’s a better guarantee for one’s well-being.

March 13, 2012 Posted by | Bizarre yet True, Finance, money, Politics | , , , , | Leave a comment

How to Get Out of Debt – Forget About It …. It Won’t Happen

Read this:

http://ca.finance.yahoo.com/news/3-steps-debt-now-181805934.htmle

Now take every piece of advice in that article and flush it down the section of your brain reserved for intellectual sewage. Canadians and Americans will NEVER be debt free and the reason is so simplistic (and nauseating) that it could be tattooed on your forehead every time you look in the mirror:

  1. The Middle Class – rapidly deteriorating due to credit card debt, variable mortgages, and the Republican Party of Canada and the U.S.A.
  2. Your neighbours, friends, acquaintances, and strangers on the street.

What’s that?  The Republic Party of Canada you say?  Harper and (formerly) Bush were political bedfellows.  It’s all about the almighty American and regressing Canadian dollar and always will be.  I am well aware that Obama is one of my own, a Democrat, however it isn’t enough: Bush and Harper relations secured doctrines protecting Republican interests that even the good man Obama cannot undo. What does this mean to you, oh Canadians who were so happy to vote Harper in again even after the scandals that rocked his feeble-minded Harper House of Horrors 2 years ago?

  1. Corporate tax breaks means higher taxes for the little guy, in other words we of the disappearing Middle Class.  Who do you think is picking up the slack?  No you’re not aware of any additional taxes levied against your income in the previous 5 years.  You do if you’re a senior living on a fix income fund: you know, that retirement fund that Harper promised during his first ever campaign that his party would not tax then within the first year of his reign of terror he taxed it?  Maybe you aren’t a senior. So what? No wo/man is an island.  Taxation for seniors who cannot afford a tax levy means seeking other means to increase one’s livelihood: what other choice do these fine people have but to apply for welfare so they can enjoy a nourishing can of cold beans now and then? Whose paying the additional (if utterly meagre) financial assistance for these people (and rightly so, you’re the ones who voted for Big Brother, ye of the Ministry of Non-Truth).

2.   To continue to quote John Donne: we are all a piece of the continent, a part of the main.  You and everyone around you are
part of an intrinsic network, a human internet if you will.  Let’s say you somehow bail yourself out of all consumer debt and are now
living a puritanical lifestyle, strictly on cash and good intentions. Your neighbours and strangers are still up to their eyeballs in debt.
Their debt is your debt. Their debt continues to enable the mechanics of the recession, thereby increasing inflation rates.  Their debt
means your job is on the line due to lay-offs as much as theirs.  Their debt is your debt.  The bell tolls for thee as much as anyone else,
friend.

You were forewarned in so many media by so many financial experts, financial writers, and humble bloggers such as myself.  So many people warned you to be careful about what you vote for, in the event you might get it. You are getting it now (although I won’t say where).

Sieg Heil, Republicans.

March 11, 2012 Posted by | Finance, money, Politics | , , , , , | Leave a comment

Obama Didn’t Deliver the Goods Against American Poverty

In 2009 Obama declared that it was corporate excess that accounted for the economic crash in the U.S. of A.  People backed him, believed his claims that America’s problems “would be met.” In fact he was elected on that promise. But in 2011 Obama lost control of Congress and has been reduced to compromising with the Republicans – America’s corporate regime. Newt Gingridge, a Republican Presidential candidate, actually forwarded the idea of reinstating child labour in America, declaring that children in really poor areas “have no work habits…what if they mopped the floors and cleaned the bathroom.  And you paid them?”  Perhaps the Republicans could model Gingridge’s proposal after child labour laws of the Industrial Revolution, where children worked a minimum of 12 hours a day, worked dangerous jobs, held the same responsibilities as adults yet were paid far less?  That ought to bring down the American deficit and keep the poor happy in the process, in spite of a surge in youth health problems and a decline in secondary school enrollment. Watch A Hidden America:  Children of the Mountains

Equally impress is Robert Rector’s claim that where the poor are concerned “half of poor people have computers. about 40% of them have widescreen HD TV’s, they have totally adequate food to eat.”  Where are these poor located?  In the documented homeless people’s hotels? The water-logged tunnels beneath Las Vegas?  The tents that are springing up across North America? The lines at food banks and soup kitchens?  Rector would have us believe that the concept of poverty in America is a huge conspiracy: perhaps there needs to be a distinction made between the poor and the abject and homeless poor in America, but both classes of poor certainly exist.

There is indeed the working poor: people who work their 40-hour + work week but cannot afford both food and rent.  They must rely upon the scant assistance of welfare programs to increase their income to a figure where both shelter and food is possible.  However, new clothes, Christmas gifts, regular meals are unheard of in these homes.  These people live at the poverty level (in Canada this is approximately $26,000.00 a year total household income).  Try raising a family on that number.  If there are computers in these homes, they must have been donated to organizations such as the Goodwill.  If there are 40-inch HD TVs I’ve never heard of them.

I work in a high needs community: average income is probably in the minimum wage or slightly higher range.  The community is filled with subsidized housing and even these homes prove challenging for families to afford.  New clothes for children are a rarity. Participation in school trips can and does become a financial issue and these trips cost as little as $15.00: the cost of a bus ride and admission to the Metro Toronto Zoo, for instance, at a school discounted rate. This is the situation for people who have jobs. The abject poor are those who live in tents and hostels. For them, even a full meal a day is a blessing. We offer a free breakfast program to needy children in our school for a reason. Read Speakers Announced for Childhood Poverty Forums 

Perhaps the increased poverty rate is a direct result not only of continued job loss in America but also the type of attitudes displayed by Gingridge and Rector.  Power and Republican should never appear in the same sentence:  it’s a death knell for poverty-stricken Americans.

March 2, 2012 Posted by | Finance, Politics | , , , , , , | Leave a comment

Inheritance? Get Off Your Butt and Earn it Yourself

You know what kills me (pun) is the number of middle-income baby boomers who are under the impression they are going to receive (and are entitled to receive) an inheritance from their aging parents. Inheritance?  Who do the boomers think their parents are – the Trumps?  Here’s a mini-lesson in Inheritance and Today’s Economy 101:

(1)  Unless you are highly affluent or from the wealthier class, there is no such thing as an inheritance anymore….nada, none, nyet. The middle class itself is in decline due to the incredible debt that so many of the boomers have gotten themselves into in a vain attempt to knock the Joneses out of the ballpark.  That debt drives up the cost of living for everyone else, including their senior parents and Gen Y.

(2) Boomer parents are living on what boomers believe is their “inheritance” and what in reality, is their parents much-needed nest egg. 

(3) Even if a boomer is fortunate enough to receive a so-called inheritance they aren’t going to be millionaires!  Their lives aren’t a page out of the Wealthy Barber.

(4)  I love this idea:  a boomer’s so-called inheritance might come with a condition or two attached to it: get a university degree; start a career of your own; make your own way in the world first,, etc before they are entitled to their inheritance. Why should anyone receive an inheritance just because of blood ties and for doing nothing?  If a person didn’t respect their parents when they were still living, and said person didn’t get off their butt and make something of themselves, why should said person get any windfall from his or her parents? watch the new generation of moochers

Bear in mind I’m not referring to certain people such as the very young, the disabled, and the bereft. For instance, women who became single mothers at an early age, were denied an education, and as a result live on food stamps and good intentions.  God love them.  Seriously.  Read Don’t Count on an Inheritance

(5) For the boomers and their children who live in Ontario, McGuinty has an inheritance of his own yet not the generous kind.

(6) What about children of your own boomers?  Plan on leaving them a little something?  Watch Ray Lucia’s Boomers and Beyond  Less than half of boomers intend to leave an inheritance for their children insisting that the best inheritance is a lesson in “self-reliance”.  Has the thought occurred to these same boomers that this may apply to themselves? watch motivation what is your legacy?

(6)  Consider parents might not trust a boomer’s spouse and are determined to keep an inheritance out of his or her hands.  Watch protect your real estate investmentParents are often more objective about greedy in-laws than their children who married them …  ahhh those rose-colored glasses.  Thankfully that’s what protective mothers and fathers are for.

(7) Seniors may actually rely on their offspring to assist them financially in their golden years.  Watch the new parent trap

Personally I am at the tail end of the boomer era and determined to keep making my own way in the world. From the time I was a teenager, my father stressed, “get the degrees and the money will come.”  How right he was.  That’s the most valuable inheritance I received from my father and mother and it has served me well. No bull.

I cannot wait until the lazy and the greedy among the boomers get what is coming to them. If only I could be there to see the look on their faces…. read bursting boomers’ inheritance dreams

February 7, 2012 Posted by | Finance | , , , | Leave a comment

You Say You Want a Revolution?

I can’t help but be somewhat cynical about the purported 370,000 jobs that may open up in Canada at some point this year.  Not that I wish to see the glass as half empty but sometimes it is. And in the case of Harper’s House of Horrors promising new jobs in 2012 I would suggest the glass is completely empty.

I wouldn’t fall hook, line and sinker for that news flash until I am signing my new job contract on the dotted line. Consider for instance:

  1. Industrial Revolution – Watch turning points in history – industrial revolution What a golden era in North American history! Major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times. Almost every aspect of daily life was influenced in some way. Most notably, average income and population reached unprecedented, sustained growth. Childhood was invented for the middle and upper classes.  Education, although not mandatory in the 17th and 18th centuries, was accessible. Watch top 50 inventions of all time
    Reality:  Unbelievable amounts of pollution began spewing into our atmosphere for the first time in history.  The low-class got many jobs in the manufacturing, mining, and transportation industries without the right to unions or minimum wage pay.  They worked up to 14 hours per day but were usually paid for less.  There were no child labour laws, keeping the child mortality rate as high as it was pre-revolution. Children were not paid as much as adults even though their productivity was comparable. Childhood didn’t exist for the poor. The poor lived in cramped, squalid houses on the streets whereas the middle to upper classes lived far more comfortably. The shabby homes shared toilet facilities with open sewers, and families were at risk of developing pathologies associated with persistent dampness. Disease was spread through a contaminated water supply. Watch the children who built Victorian Britain Part I
  2. IT Revolution -Watch the information revolution then and now scudda-hoo!  scudda hay!  The fastest growing industry in history began in the early 20th century and suddenly exploded in the 1990s, still progressing in leaps and bounds.  The success of the IT industry is unprecedented.  Communication worldwide is as quick and effortless as clicking a button on a computer or iPhone.  Cell phones and Blackberries carry software applications including the internet, Microsoft software package, games and much more. Losing information in the mail is a thing of the past. Access to information for schools, hospitals, laboratories, corporations etc is abundant and easy. Read Bill Gates’s dream: A computer in every home. 
    Reality:  Watch internet for rural areas Lesser developed countries, as well as minorities in developed countries, have not even come close to reaping the benefits of the internet: the gap between the haves and have-nots continues to grow. Domestically there is a two-tier computer system in providing high-speed internet services to rural and urban communities, known as the “digital divide”.   Watch The digital divide.  This is crucial since those without  high-speed internet services could be cut off from affordable information about education and healthcare. African-Americans and Hispanics are less than half as likely as Caucasians to explore the internet from home, work or school, meaning minority groups are at a disadvantage in competing for entry-level jobs. Donna L. Hoffman, a professor at Vanderbilt University says, “The big question is why African-Americans are not adopting this technology, it’s not just price, because they are buying cable and satellite systems in large numbers. So we have to look deeper … I think there is still a question of ‘What’s in it for me?’” Read computers for Jamaica
  3. Global Work Force – Watch Sikorsky to cut global workforce by 3 percent. Immigration Canada opened its doors for hundreds of thousands of professional and skilled workers. Many prospered and helped to improve Canada’s overall economy and employment rate. Families helped provide the country with a more regulated number of young workers as Canada’s baby boomers moved closer to retirement. Canadian families were having fewer children (from 2.5% to 1.3%) and foreign families helped to maintain the 1.3% stat and prevent it from falling any further. Watch Canada immigration – fast track immigration for skilled workers
    Reality: Watch course 3 – cheap labour will cost you more Many skilled, foreign workers were hired by companies for much lower wages than Canadian workers, costing Canadians countless jobs.  Skilled workers had to be re-trained in order to comply with Canada’s safety regulations and this took considerable time and cost. Welfare increased in order to provide new immigrant families with a source of income, as did subsidized housing; this in turn increased Canadian taxes. Many landed immigrants with criminal backgrounds were admitted into Canada via arranged marriages. Marriages occurred as a means to bring over relatives rather than functioning as legitimate marriages. Outsourcing usually meant sweatshops and “slave” labour: some workers received only 68 cents an hour from American and Canadian employers. In some cases this meant the quality of products was noticeably reduced.  watch more American workers outsourcing own jobs overseas

Change, even on a revolutionary scale, can be a good thing. But with great change comes great responsibility, and many corporations and individuals fall far short of that ideal when it comes to cost-saving labour and increased communication. Then again, so do certain “conservative” governments as of late.

January 10, 2012 Posted by | Finance, money, Politics | , , | Leave a comment