If you do not change direction, you may end up where you are heading.
Always remember that the future comes one day at a time.
When we are no longer able to change a situation - we are challenged to change ourselves.

Change before you have to.
Change brings opportunity.
Progress is a nice word,
But change is its motivator. And change has its enemies.

Without accepting the fact that everything changes,
We cannot find perfect composure
Because we cannot accept the truth of transience, we suffer.

Perfect composure.
What does it really mean?
The nature where one becomes completely comfortable with their actions?
The ability where one knows they are able to deal with any challenge thrown?

What does it mean to gain composure?
The musical advancement of the most basic keys?
Choosing our thoughts to have order and arrangement?
Or working among friends, those we feel understand us

We may have worked among friends,
The friend whose virtue we can confide,
Where justness and sincerity exist,
Where the courteous nature is encouraged.

Be happy for the charming gardeners of our souls
Those who carry our better nature,
Despair, confusion, bereavement, pain?
They tolerate all wrongs and recognize our true nature;

They tolerate our silence,
Our right to grow,
Do not cast shade,
They are friend in our times of adversity.

Small change, small wonders
Currency of endurance?
The unexpected result of change,
A wonder, a breech into what will come

At what point is change magical?
When we are not merely changing but becoming,
Past doubt and our inevitable indulgent nature , to ourselves,
Where we become what we are.

The precisely simple is also that difficult.
The completely new intoxicating and equally creative
But once embracing the process of becoming,
We never stop. Push forward.

As soon as you change the rules of the game, the game changes,
The Fed committing to keeping current interest rates until 2013.
A timeline has been committed to with a specific course of action
This allows others, who manipulate, seek opportunity, take advantage, to enter a game they would have else not played

If you do not make a stand when they come for your neighbor, who will stand for you?

This is a double edged blade,
It is can be an arbitrary question/comment someone makes to get you to commit to their idea
It can be a strong argument that inspires action
Generally, it is both depending on which side of the argument you find yourself on

“If we don’t help those underwater with their mortgages, next time, it might be you who isn’t helped.”
“If we don’t go after the 1%, as a member of the 99%, they will come after you.”
OR
“If we DO help those underwater with their mortgages, people will perceive a lack of risk and take risks since they may get helped if they lose but get to keep what is theirs if they win.”
“If we go after the 1%, next time, they will come after you.”

Does the game change if we bail out those with underwater mortgages?
Will writing off home mortgage interest become a thing of the past?
Or just capped at a certain level not indexed to inflation?
What is the LONG TERM cost for what some argue is a good SHORT TERM fix?

If you told me that you could afford to pay off your debt
Then gave a bunch of money, or asked someone else to give a bunch of money
And made the argument that that will somehow help you
Where does the equation balance?

Jamming, feeling the pulse and rise as the variables effect change
How does what happens today bring about the change that happens tomorrow?
It is all about the time line and that which feeds it,

Don’t eat? Starve. Exercise? Lose weight
Same short term effect, the long term effect is quite different
Feed yourself
Everything cannot be simplified as such, but things can always be made easier to understand

$1.2 trillion in ‘across the board’ spending cuts are ready to hit if the supercommittee doesn’t meet the Nov 23rd deadline
As much as $454 Billion in dense cuts
If the $3 trillion (over 10 years) cuts are initiated, what will be there effect in the first four years?
If you want to save $10,000, how much you have saved in the first year is a good indicator of your progress.

We might be a little busy with the project to build high speed rail from San Francisco to LA
Cost of $34 billion (and future $43 million) billion, amended to $98.5 billion (Cost of Golden Gate Bridge is $1.6 billion in today’s dollars, $1.2 billion in 2003 dollars)
Projected cost of a THREE HOUR ONE WAY ticket? $81. How many will take it every day? Hopefully enough to pay for it…vs the $139 ONE HOUR ROUND TRIP airfare.
PS, this is for 2033 (About when the SC savings would start kicking in?)

“The report shows the estimated cost at $98.5 billion if the route between San Francisco and Anaheim is completed in 2033. The plan assumes private investment will account for roughly 20 percent of the total cost, with much of the rest coming from additional public borrowing.”

/thought

“But if the history of college financial aid (and other government attempts to protect consumers from costs) is any guide, Obama’s plan will likely backfire.

Over the past three decades, financial aid has rocketed up 438% after inflation, says the College Board. That’s largely due to huge hikes in more than a dozen federal grant and loan programs.

“By providing aid and subsidized loans, the government is trying to protect students, but the effect is perverse,” said Jane Shaw, president of the John W. Pope Center for Higher Education Policy in Raleigh, N.C. “They increase demand and enable colleges to hike tuitions virtually without restraint.

An increase in the average student loan of $1 was associated with net tuition that’s 93 cents higher at public schools and 55 cents higher at private schools, according to Andrew Gillen of the Center for College Affordability and Productivity.”
___

Diminishing marginal returns are a funny thing. Sometimes, the more you try, the less likely you are to achieve your goal. Sometimes, when you’re aiming down the site, you need to let the muscle memory and dog brain take over.

Dog brain, your instinctual side
It is what leads people to start a business loaning money for college
It is what makes people sign a piece of paper letting them know they can go to college
It is what leads people to move to North Dakota or anywhere there is a job to make ends meet

There are two parts to learning, theory and practice
All the fantasy investments you make can prepare you with rules
But when that first $1,000 gain or loss hits you brain
Dog Brain > Human Brain

Sell Sell Sell, buy more, read an article saying why it is a good investment
What do I do? Where is my exit?
Good thing you thought ahead, have your exit plan written down
Have your stop loss prepared, execute the plan

Muscle memory, let it build and eventually it takes over
Company smashs earnings? Sell
Company exceeds earnings, up more than 15%? Put it on a watch list
World is ending? Time to tap the cash reserves and look for opportunity, AND hope the world doesn’t end

I had a class recently, got a price quote, accepted it
Why? Because I needed the class, it seemed reasonable, and I didn’t want to haggle
How is college different? One commits to early decision, applies to the college THEY WANT
And figure out how to pay for it later

The best and worst question you will ever ask yourself is “what if?”
What if I HAD done this, what if I do this
What if I HAD tried this, what if I try this
What if I had taken three right turns and five lefts

Don’t ask yourself what if regarding the past, it is great for nostalgia and bad for present
Understand why you did what you did and modify your behavior, but don’t try and change the past, you can’t
Every decision you make today is something you might later ask yourself ‘what if’ about
Treat those opportunities as such and make a decision that based on what you know now, you won’t regret

Diminishing returns do NOT apply to learning
Each thing you learn improves your overall understanding
All progress towards ‘learning everything’ is positive
Learning a menial task? A new hobby? LEARNING GOLD.

Someone asked me recently if I was always jumping from hobby to hobby
New activities are a new path but the SAME path of knowledge acquisition,
Trying to understand how things are accomplished
Why some people commit their entire lives to the pursuit of something

Today will be the day that I learn something
Happy Monday.

X = Principal
Y = Payments
Z = Shortfall

A delinquency rate is calculated into the rates charged
So those who do repay are paying a premium to make sure that the company stays in business
This is why cash advance places charge such high interest, low elasticity of demand, high delinquency rate
It is also why we pay more as customers to Wal-Mart, Target, and the like
The delinquency rate for retail locations being shoplifting

So what happens if delinquency rates rise?
Rates must also rise or cash flow risks going negative with a rise in liabilities
If delinquency rates are based on an arbitrary number that is low enough,
Inflation kicks in and eventually negates this level of income

/Entrance, stage left
Obama’s Student-Loan Order Saves the Average Grad Less Than $10 a Month

“You can see that student loans have grown by 511% since 1999. Meanwhile, disposable income has grown by just 73%. As this chart also shows, most outstanding student loan debt (82%!) was accrued by students over just the past decade.”

“The president seeks to make the situation a little bit easier for some of those graduates. He will create an executive order that has three components.

He will clear the way for borrowers with direct government loans and government-backed private loans to consolidate their balances. The White House estimates that this will cut the effective interest rate on student loans by up to 0.5%.

He will limit the amount of student loan payments to 10% of a graduate’s income. (Currently, the limit is 15%.)

He will allow debt still outstanding after 20 years to be forgiven. (Currently, forgiveness occurs after 25 years.)”

Cutting interest rates on FEDERAL loans
Changing payment agreements to reduce against company’s favor
Wiping all debt regardless of level at an arbitrary date which can be changed through further legislation

Personally, changing it to one year and removing all student loan payment requirements sounds like a GREAT short term solution
It IS a great solution, for the CURRENT loan holders
But what about the next round of borrowers
There isn’t enough money in the pot for them to borrow to go to college at even current rates, much less higher rates

So the current generation kicks the can down the line
The next generation hopes that more companies enter into the loan industry
Potentially, they can’t get loans and must rely on either their parents or the generation that got the 1st round advantage
But will they continue contributing 10% of their income towards the college education of others?

Personally, when my college loans are paid off, I greatly look forward to being able to contribute to the college I went to
It won’t be on the same levels of my college payments, but it will add up
I’ll have met my obligations and then CHOOSE to support

But if the system was going under, would I have that choice or would it be made for me?
Which schools would be supported?
These are genuine questions that need to be asked.

“As mentioned, the government already has a program for borrowers to reduce their student loan payments to a ceiling of 15% of their income. At this time, just 450,000 borrowers are participating. How many others would benefit from the 10% cap?

…
The White House estimate is 1.6 million borrowers could participate.”

Decreasing income requirements by 33%
Triple the number of participants

What effect does that have on delinquency rate?
It might reduce it since the requirements are less, but we’re expanding the customer base

“Of all these parts of Obama’s executive order, the loan forgiveness aspect will have the least impact. By moving the timeline from 25 to 20 years, it could be significant in the long run — but it won’t be felt for decades. Remember, 82% of the current student loan debt outstanding was accrued in just the past decade. So it will be at least another 10 years before any of those borrowers have hit the 20-year mark in their student loan payments.”

We’ll worry about it in 20 years, what is the worst that can happen when money is still owed and people are allowed to walk?
I’m remembering something about this and I think it had something to do with houses and jobs being lost, but it was so long ago.

“Don’t let anything stand in the way of you claiming and manifesting the life that you choose rather than the life you have by default.” -Joy Page

Read more: http://www.brainyquote.com/quotes/keywords/default.html#ixzz1c4cafvCc

Let the dance build
There are more movements than before but I’m doing my best to keep up!

Housing Lift Proves Fleeting

“Existing-home sales dropped 3% to a seasonally adjusted 4.91 million in September, the National Association of Realtors said Thursday. That followed a sales bump in August, as the housing market remains stuck in neutral despite lower prices and interest rates at near-historic lows.

Meanwhile, a Labor Department report hinted at modest growth in the job market, showing new claims for unemployment benefits dropped by 6,000 last week to 403,000.

…

The national median price for existing homes fell to $165,400 in September, a 3.5% drop from a year earlier, the Realtors association said. Housing inventory fell last month, leaving the equivalent of an 8½-month supply at the current sales pace. That means it would take about that long to sell the current inventory.”

Bring the rates back down. Until unemployment claims fall down.

Underemployment Rate: 17.40% for Oct 17 2011

“Underemployment Rate is at 17.40%, compared to 17.50% yesterday and 18.30% last year. This is lower than the long term average of 18.87%.
Value One Year Ago: 18.30%”

When all are said and done and dead
Does he tax you the way that they do
Breathing in lightning tonight’s for fighting
We feel the hurt so physical

Think twice ‘fore you touch our checks. Come around and you’ll feel the burn
Think twice ‘fore you touch our checks. Come around, come around no more
Think twice ‘fore you touch our checks. Come around, I’ll let you feel the burn
Think twice ‘fore you touch our checks. Come around no more

They spreads their love, then burns it up
We can’t let go We can’t get out
We said enough, enough right now
We can’t let go, We can’t get out.

Wait till the day you finally see they’ve been here waiting patiently
Crossing their fingers and their t’s. You cried on their shoulder begging please
Think twice ‘fore you touch our checks. Come around, I’ll let you feel the burn
Think twice ‘fore you touch our checks. Come around, come around no more
Think twice ‘fore you touch our checks. Come around, I’ll let you feel the burn
Think twice ‘fore you touch our checks. Come around no more

They spreads their love, then burns you up
We can’t let go We can’t get out
We said enough, enough right now
We can’t let go, We can’t get out.

What is it you really want? We’re tired of asking!

When we showed up and he was there we tried our best to grin and bear
And took the stairs but didn’t stop at the street and as we speak we’re going down

They spreads their love, they burns you up
We can’t let go We can’t get out
We said enough, enough right now
We can’t let go, We can’t get out.

Think twice ‘fore you touch our checks. Come around, I’ll let you feel the burn
Think twice ‘fore you touch our checks. Come around, come around no more
Think twice ‘fore you touch our checks. Come around, I’ll let you feel the burn
Think twice ‘fore you touch our checks. Come around no more

Another week, another round of saving.
Pay. Tax. Save. THEN spend
If you aren’t putting forth the capital now
That snowball won’t ever build, much less picking up the proverbial dirt with its weight

We’ve all built snowballs that eventually become so heavy with their weight
That picking up the snow turns into picking up snow along with dirt
Then you’ve got to go in and pack nice clean snow around
So the snowman looks presentable…
Then maybe spread the snow around so your parents don’t see the damage to the lawn

Saving is building the snowball
The weight is your cumulative effort
The dirt is the eventual earnings you cannot see when initially building the snowball
Use additional savings or earnings to round out the appearance
Use what you were savings or the earnings and spend them to cover the damage

Then build another snowball
Or maybe an igloo (Later Post)

Where can you cut costs? Big ticket items (rent, car, food, and phone/TV), routine costs
Where can you put savings? Roth, IRA, THEN taxable accounts (Don’t forget emergency fund)
What do you invest in? Index funds, straight up S&P 500 (Warren Buffet’s Recommendation)
What to avoid? If you’re under 50, fixed income (interest rates no good, target date retirement funds, funds with high fees)
When should you start? As soon as you get a job
Should I wait til I can afford to save? Tax man wants his end regardless, so do your savings…and your savings have a lot greater impact in the long term and very little enforcement mechanism, the only real defense is your action
Can’t I have any fun? Yes, that is what a budget does, over time, the control you gain over spending allows you to, eventually, spend your income on what you enjoy

“And so we remained till the red of the dawn began to fall through the snow gloom. I was desolate and afraid, and full of woe and terror. But when that beautiful sun began to climb the horizon life was to me again.” Bram Stoker

“Earth teach me to forget myself as melted snow forgets its life.
Earth teach me resignation as the leaves which die in the fall.
Earth teach me courage as the tree which stands all alone.
Earth teach me regeneration as the seed which rises in the spring.”
-William Alexander

“For once you have tasted flight you will walk the earth with your eyes turned skywards, for there you have been and there you will long to return.” -Leonardo da Vinci

“Vanity is as ill at ease under indifference as tenderness is under a love which it cannot return.” -George Eliot

/Commence the Friday dance

I never think of the future - it comes soon enough.
-Albert Einstein

According to them, we’re spenders, we’re wasters
We can’t do anything right
According to them we’re difficult, hard to please
Forever changing our mind

We’re a mess cannot address, can’t show up on time
Even if it would save our life
According to them, according to them

But according to past we’re beautiful, incredible
We can’t get success out of our head
According to past we’ve future thought, risks that count
Everything we’ve ever need

Everything is opposite, I don’t feel like stopping it
So leaders tell me what I got to lose
They’re into it for everything we’re not
According to now

According to them I’m boring, I’m moody
And you can’t take me any place
According to you I suck at spending cash
‘Cause I always give it away

We’re the ones with the worst attention span
They’re the one who puts up with that
According to them, according to them

But according to past we’re beautiful, incredible
We can’t get success out of our head
According to past we’ve future thought, risks that count
Everything we’ve ever need

Everything is opposite, I don’t feel like stopping it
So leaders tell me what I got to lose
They’re into it for everything we’re not
According to now

We need to feel appreciated
Like we’re not hated, oh no
Why can’t you see us through real eyes?
It’s too bad, you’re making us dizzy

According to them, we’re spenders, we’re wasters
We can’t do anything right

But according to past we’re beautiful, incredible
We can’t get success out of our head
According to past we’ve future thought, risks that count
Everything we’ve ever need

We’re a mess cannot address, can’t show up on time
Even if it would save our life
According to them, according to them

According to them, we’re spenders, we’re wasters
We can’t do anything right

I choose my friends for their good looks, my acquaintances for their good characters, and my enemies for their intellects. A man cannot be too careful in the choice of his enemies.
-Oscar Wilde

There was a time back in ‘95
Markets heart ran out of summers
But before they died, I asked them

Wait, what’s the sense in life
Returns for me, Returns for me

They said,

Son why you got to sing that tune
Dot com coming, Enron’s eclipse of the moon
Let an earner swing and make you swoon
Then you will see… You will see

Then they said,

Here’s a riddle for you
Find the Answer
There’s an earner you can find
ROI…

Picked up my pick from IBD today

Did you learn anything cause in the world today
You can’t live in a castle far away
Now teach to me, teach to me

They said,

Hey, they’re big but you’re smaller than small
In the scheme of things, well you’re nothing at all
Still every learner sings a lonely song
So play with me, come play with me

And I did
Here’s a riddle for you
Find the Answer
There’s an earner you can find
ROI…

They said,

Son for all I’ve told you
When you get right down to the
Reason for the world…
What am I?

There are secrets that we still have left to find (Gold bubble)
There have been mysteries from the beginning of time (Wealth Creation)
There are answers we’re not wise enough to see (Prepare)

They said… You looking for a clue and you learn free… (<==True Statement)

The batter swings and the balance flies
As I look into the model’s eyes
A song plays on while the moon is high over me
Something comes over me

I guess we’re big and I guess we’re small
If you think about it man you know we got it all
Cause we’re all we got on this bouncing ball
And you learn free
Capital flows freely

Here’s a riddle for you
Find the Answer
There’s an earner you can find
ROI…
__
We cannot conceive of matter being formed of nothing, since things require a seed to start from… Therefore there is not anything which returns to nothing, but all things return dissolved into their elements.
- William Shakespeare

Beware of the man who does not return your blow: he neither forgives you nor allows you to forgive yourself.
-George Bernard Shaw

A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.
-Martin Feldstein

Every time in this century we’ve lowered the tax rates across the board, on employment, on saving, investment and risk-taking in this economy, revenues went up, not down.
-Jack Kemp

My best investment is my imagination, because it has never failed to bring me my greatest returns!
-Randy Castillo

Happy Friday.

It has been a fun week, markets are teaching and there are opportunities
Keep learning, observe, calculate, estimate, act
Put your foot in the circle
Get used to the temperature changes

Stomach of steel, stick to the game plan
Be wary of the factors in play but don’t let them dictate
Learn. Learn. Read. Think. Learn.
It only gets harder as you learn more

Open field, room run to run
Forward, fall back, gain support, don’t lose focus
Set up position, fix your sights
Be READY

Hold Fast.

Closed off from flow
They thought they’d cause some pain
Once or twice was enough
And it was all in vain
Time starts to pass
Before you know it they’re frozen

But something happened
For the very first time with you
Spending melts into the ground
Found something true
And everyone’s looking round
Thinking I’m going crazy

But they don’t care what you say
They’re in love with now
They try to pull you away
But they don’t know the truth
Our heart’s crippled by the vein
That we keep on funding
They cut it open and they

Keep taxing
Keep, keep taxing more
They keep taxing
They keep, keep taxing more
Keep bleeding
Keep, keep bleeding love
They cut me open

Trying hard not to hear
But they talk so loud
Their piercing sounds fill my ears
Try to fill me with doubt
Yet I know that the goal
Is to keep me from saving

But nothing’s greater than the rush that comes with your return
And in this world of spending
I see the fate
Yet everyone around me
Thinks that I’m going crazy, maybe, maybe

But they don’t care what you say
They’re in love with now
They try to pull you away
But they don’t know the truth
Our heart’s crippled by the vein
That we keep on funding
They cut it open and they

Keep taxing
Keep, keep taxing more
They keep taxing
They keep, keep taxing more
Keep bleeding
Keep, keep bleeding love
They cut me open

And it’s draining all the capital
Oh they find it hard to believe
You’ll be wearing these scars
For everyone to see

But they don’t care what you say
They’re in love with now
They try to pull you away
But they don’t know the truth
Our heart’s crippled by the vein
That we keep on funding
They cut it open and they

Keep taxing
Keep, keep taxing more
They keep taxing
They keep, keep taxing more
Keep bleeding
Keep, keep bleeding love
They cut me open

“Is your 401(k) safe from the tax man? That’s a question that might be worth asking, as the congressional “supercommittee” scrambles to find $1.5 trillion in additional deficit cuts.

In September, the Senate Finance Committee held a little-noticed hearing that explored changes to retirement plans — principally employer-sponsored 401(k)s — that would in one way or another cut their tax deductions.

The tax breaks’ size makes them a tempting target for lawmakers. According to the White House budget office, tax exemptions for 401(k)s and IRAs will “cost” the government more than $436 billion over the next five years.”

Sigh.

By its very definition, 401K/TSP/IRA contributions are not taxed when they go into the account, compound for (hopefully) 30-40 years, and then are taxed upon withdrawal. Withdrawing is NOT optional so it is an anticipated revenue based on whatever the tax rates are 30-40 years from now. (Higher)

Taxing it when it before it goes in and then taxing it when it comes out is the very definition of double taxation.

So, will Sam be more likely to take the up front revenue, have less principal compounding, then take their share when people withdraw? Hence the phrase, “Let the people pay on both ends.” -not sourced, “Why tax once when you can tax twice or thrice.” -not sourced and “Why should they get to keep any of it?” - not sourced

However, if an individual is getting their company match, they should still donate for the max company contribution and then focus on their ROTH IRA contributions. Roth contributions are already taxed before they go in, compound, and then withdrawals are not taxed.

“One idea pitched at the Senate hearing is to replace the entire tax deduction with a flat government match of 18% to 30%. The Brookings Institution’s William Gale, who helped develop the idea, says if the credit were set at 18%, it would boost tax revenues by $458 billion over 10 years, mostly from wealthier workers.”

Seeing as Sam matches his workers with a conservative match already and when coupled with pensions, all paid for by tax payers, this is an idea I could get behind…if there was not a sneaky ninja cutting a hole in my pocket from an ammendment in the bill. If 18-30% of savings contributions were matched, this would incentivize savings. One would think you might get more of it. But how many people are thinking even 5 years out, much less 30?

“Obama’s National Economic Council chairman, Gene Sperling, also has endorsed scrapping the tax deduction in favor of a refundable tax credit.”

So they just want to take it, and then give it back? Something tells me that allowing magicians to take your wallet and then ‘give it back with everything and more in it’ and then allowing them to walk behind the curtain with it is not a good idea…then again, magicians should always be questioned…their need for control is not easily quenched…guess it is all those 7 year old birthday parties that sets that aura of control in motion.

“President Obama’s debt commission proposed cutting the annual cap on 401(k) employer/employee combined contributions to $20,000 from $49,000 now. (The individual limit is $16,500 a year; workers age 50 and older can add another $5,000).”

“Jack VanDerhei, research director at the Employee Benefits Research Institute and a leading pension expert, says they could severely cut how much money that workers and employers set aside. He says the $20,000 cap would even hit lower-income workers, causing “a significant reduction” in their retirement savings.”

So it isn’t just ‘hitting the wealthy’ to bring back main street, it is a methodical tax that hits everyone, reduces their deductions, gives some back, discourages savings, reduces capital that can compound, still keeps withdrawal quotas and tax upon withdrawal….

Seems to me that setting the rules to the game and letting the players play is the best route. You don’t change the rule so you get $150 when passing go and $50 when passing free parking…and you certainly don’t change those amounts to a respective $125 and $25 and tell people that they’re really getting more cash and everyone can afford St. James Place because lets face it…Park Place is overrated.

/end thought

Time for work, it is a wonderful rainy Thursday, hope the bike tires hold.

It is hard to think about the impact a daily market swing can have on a million dollars.
Yet, somehow, we are all expected to get there.
A dollar at a time, a hundred, even a thousand, it cannot be a one time contribution.
But, after inflation, a 4% return on $1,000,000 will ‘only’ be $40,000.

‘Only $40,000′ when today, a SEVERE number of Americans are unemployed, underemployed, and living below the poverty level.
When I was unemployed, I lived with my parents and it was a blessing
Without support, depleting savings, debt accumulation, and long term variables are introduced
What to do?

2007
“According to the US Census, in 2007 5.8% of all people in married families lived in poverty,[22] as did 26.6% of all persons in single parent households [22] and 19.1% of all persons living alone.[22]”

2011 Federal Poverty Level
United States Department of Health and Human Services (HHS) figures for poverty in 2011[3]
Persons in
Family Unit 48 Contiguous States
and D.C. (I took out Hawaii and Alaska, they skewed the numbers)
1 $10,890
2 $14,710
3 $18,530
4 $22,350
5 $26,170
___

I do NOT know what to do to create jobs, I have ideas, but that is a later post;
Savings and impact on future lifestyle choices, that is what I have dedicated my personal life towards,
They say that knowledge is power, and as with all power, Force TIMES Mass DIVIDED by Surface Area = Impact

Force = Savings Rate (Increased savings rate = increased mass)
Mass = Total Amount Invested (The weight of the sledgehammer, Time most greatly increases mass)
Surface Area = Desired Duration of Effect (Building a sustainable income, paying off immediate bills, future planning)

Compound Interest Calculator (Thank you MoneyChimp)
Toss $10/Wk into a savings account earning 4% for 2 years and you have $ 11,032.32
Toss $10/Wk into a savings account earning 4% for 5 years and you have $ 29,291.47
Toss $10/Wk into a savings account earning 4% for 10 years and you have $ 64,929.03
Toss $10/Wk into a savings account earning 4% for 20 years and you have $161,039.85

Don’t get me wrong, I won’t say that $10/wk is going to solve your problems
It is manageable for most, but far from ideal
The rule that I work on is : You should work at least one hour per day towards your future
If you have debt : You should work at least one hour per day towards reducing your debt
Ideally, you are doing both

I like a crisp $20 as much as the next guy
For every $500 you save at 4%, you are getting an extra $20/yr
For just $10/wk at 4%, you can increase your annual paycheck by $208…in 10 years
It is only 10 $20s (works for me) but do it for five years and you’re talking $1,040 (That’s 52 $20s, $20/wk)

It might be hard to consider saving $10/wk for one hundred years
But, after 25 years, you can continue to save that $10 and spend what you were saving before
Welcome to the world of compound interest

This sounds dumb….at $10/wk
But save $100/wk for a year and increase earnings by $208 (at 4%)
Save for 5 years and you increase earnings by $1,040 (52 $20 bills, one per week)

Earning $10/hr, $100/wk is 25%
Earning $15/hr, $100/wk is 17%
Earning $20/hr, $100/wk is 14%
Earning $20/hr, $100/wk is 10%

At $10/hr, working 10 hours (25%) for savings is excessive
At $15/hr, working 6.8 hours is almost extreme
At $20/hr, working 5 hours is reasonable (1/hr/day)

While 5 years is hard to imagine,
Try to imagine 40 years,
Or building just $4,000 in ‘passive income’ instead of just $520,
Or even $40,000 (requires $1,000,000 at 4%)
Simple math, not many variables, but not so simple

40 years at $10/wk = $51,389.80
40 years at $100/wk = $513,897.99
40 years at $200/wk = $1,027,795.98

I won’t blow your minds with ‘how little’ one million is in 40 years
But to get to $1 million in 40 years, you need to save $200/wk
Take a look at your paycheck and the taxes coming out
Chances are, if you don’t have a degree, these numbers daunt you

Chances are, if you are earning, you’ve got college loan payments
Other obligations, things that are more important
Even if you are on the path, looking at that $125K+ as a ‘cash reserve’ is a mistake
Choose the path, stick the path

Don’t think you’re somehow ahead of the game at six figures and that you can go spending
Keep savings, maybe tap the interest as extra spending,
But for the most part, save, keep savings, save, save, save, grow, save, be patient

I am not patient,
I made a mistake,
I saved too much,
I did not keep enough liquid and accessible.

Emergencies come, it is best to be prepared for those too.
I get it, I look at the data and have those ‘WTF moments’
If you don’t…you’re not tweaking the numbers enough
David113@gmail.com Email me and I will send you a budget sheet, balance sheet, and cash flow sheet. Excel format, basic, but they do the trick. Email, receive, use.

Everyone faces moments when they are without capital,
Predict those moments, build cash buffers,
$2,000 emergency, have the cash liquid and ready
I have all of the information ready.

Need help with a 401K to ROTH 40K conversion?
Company to company 401K transfer
I live for this stuff…
If you current company’s HR staff cannot cut it, I can,
First come, first serve, but I have coffee

Free service, david113@gmail.com

The Fed Is Forcing Investors Back Into Stocks: Strategist

“The “Risk On” trade is back today sending stocks and commodities sharply higher, and the US 10-year Treasury yield back up towards 2%. Meanwhile, as of Monday’s close the S&P 500 dividend yield remained higher than the 10-year T-note, a move seen only 20 times in the past 58 years on a quarterly basis according to S&P research. The phenomenon rewrites the rulebook for yield-seeking investors, as the broader stock market offers more than a traditional bond investment.”

Huh? When you get 2% from a T-Bill and more than 2% from the S&P, economic theory states that people will switch investment vehicles given an equal risk with either investment. This same theory puts forth that when interest rates are…say…4%, that people will gear more of their investments towards fixed income or be less likely to spend in order to save.

Big housing blow: New home sales fall, again

“The Commerce Department said Monday that new-home sales fell 2.3% to a seasonally adjusted annual rate of 295,000. That’s less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market.
New-homes sales are on pace for the worst year since the government began keeping records a half century ago.
High unemployment, larger required down payments and tougher lending standards are preventing many people from buying homes. Plunging stocks and a growing fear that the U.S. could tip back into another recession are also keeping people from entering the housing market.”

Personally, I think it is a great time to be allocating funds towards purchasing stocks. For those with a 20+ yr time horizon, getting started on saving is the most important, it is NOT the how much or at what price as much as the WHEN. If prices fall, you are still diverting funds to purchase at a lower rate, something known as dollar cost averaging. If you are just getting started, putting even more money in as prices fall might be the way to go, but that applies to buying index funds, not houses, not individual stocks, do not catch a falling knife…housing prices are more like a giant sledgehammer…or a spring suspended slowly coming to rest hydraulic jack since it can come up with such force and generally takes a lot more time to settle.

Save save save, invest, wait, save invest…wait….wait…spend returns or spend returns + principal

[Growth Calculations post in progress]

Other News :
DOE Mulls Green Energy Loans At $23 Million Per Job

“The Department of Energy is set on Thursday to announce whether nine federal loan guarantees amounting to $6.5 billion for green energy projects will get final approval.

The number of full-time, permanent jobs they would create? According to the DOE’s own figures, a grand total of 283. That is nearly $23 million per job.”

Simple Math.