Making substantial amounts of money is an “asymmetric advantage” derived for the understanding of its innate characteristic. Money today is fiat currency -meaning, there is nothing but “will” behind the currency- with no real value except the cost of the paper is printed.
Most of the wealth created in the past 25 years has been accumulated by a very small amount of people using “asymmetric knowledge” using a Noble Laureate term.
I am not Nobel Laureate, thus, in my words it s called ripping of the assets of citizens using corruption as main tool.
Today, leaders all over the word and I mean all over, no excluding America, after individuals gain power, in business, policing or policy, there is a sudden hidden act of lowering on their standards of decency.
Greed must be an Ok action when you act alone in a forest, but it is not such good behavior when you have to fund schools, paved the streets we must walk or tax others.
By now, there is a large sense that something is amiss in the way we are living. The most clear is the mental state of global fear. In some cases this fear is well found. In other cases fear is government induced, by direct actions or use of media. From the reporting words of African killer bees to the next assassin in the making.
One constant realization by individuals is, as each fear accumulates, the way to act freely is reduce proportionally as fears increase.
By now, it should be not secret that citizen participation and leaders behavior via institutions and representation is at the same level of Louis XV, King George, Franco or Mussolini. Comparing T. Blair primer of England to King George is not that difficult, nor it is to equate most other present leaders to some other abusive leader.
From an exuberant greedy investor point of view oppression of citizens is the best investment decision can be made, because it is very easy to corrupt leaders with money. Those Russian billionaires moving around the planet are part of the pudding, Chinese communist billionaires -if sounds weird- are growing, or CEOs billion dollar packages in capitalist efficient markets are examples of citizens idiotic approach to accountability and participation.
Idiocy is not an uncommon treat that benefits abusers. Today, losing citizens freedoms via democracy is nothing it has happen out of the blue. When US Today reports that America has lost democracy, (US Today 2/28/06 last page section A)it is not something to shrub off the shoulder calmly and keep it the prevalent social apathy.
It is known of social scientists that people react to fear and are willing to give up their rights in fear of losing something bigger. Scientists also know that after the lose of rights occurs, it is not likely for citizens to regain their freedom of fearless behavior and their rights continue to deteriorate over time in a manner it is not perceived as alarming. That is the real alarming turning point, and I think many we think we have turned the danger point.
From a speculator point of view the capacity to corrupt leaders with money is and advantageous situation, in front of the rest of people, with not access to capital. This is understood to apply all humans. There is a wonderful study done by three retired generals of the Israeli secret service in which they quantify the amount of money need it to bribe a politician depending the action demanded from the individual. After a few years negotiating labor contracts I learned that it take very little money to buy people.
Today, democracy has lost its freedom and eventually those who sold it to the highest bidders will regret their actions and its consequences.
Tuesday, February 28, 2006
Monday, February 27, 2006
Getting rich is simpler than you think
The Basics
Getting rich is simpler than you think
By Harry Domash
Blend three ingredients -- a paycheck, discipline and time -- and, you, too, can be a millionaire. It's not always easy, but it's simple. And you have no excuse not to do it.
Here is the single most important thing you will ever hear about investing: Getting rich is simple.
Not easy, but simple.
And here is the second most important thing you will ever hear about investing: You have no excuse not to do it.
Only three ingredients are needed: income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline. And armed with the following knowledge, that key third ingredient may be a lot easier to find.
Here's how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.
Here's a similar scenario: If you start with a nut of $50,000 and add only $250 per month, you’d have $180,000, $516.000 and $1.4 million after 10, 20, and 30 years, respectively. All this happens through the power of regular investing and a simple-but-powerful concept called compounding.
Compounding
What is compounding?
Compounding is the reinvestment of the interest you receive from the money you set aside. For example, if you invest $1,000 and earn 10% interest on your principal at the end of each year, you'll get in $100 interest at the end of the first year. If you reinvest that interest, the second year you would start with $1,100, and thus would earn $110 interest. If you stay with it, you’d more than double your money every eight years.
“Compounding," Albert Einstein said, "is mankind’s greatest invention because it allows for the reliable, systematic accumulation of wealth.” Einstein was a smart man. But you hardly have to be a genius to make this concept work for you.
The real magic of investing comes when you combine the surprising power of compounding with continuous and regular investments -- in other words, discipline.
The best way to make these continuous investments happen is by setting up an account with a broker or mutual fund that automatically deducts a fixed amount from your bank account every month. “Automatic” is the operative word here. Trust me, if you don’t set it up that way, it won’t happen. Instead, you’ll end up pouring money in when the market is soaring and skipping payments when it’s heading down. Eventually you’ll get discouraged and give up.
Dollar-cost averaging
The process of continuously investing a fixed dollar amount is called dollar-cost averaging -- a term that sounds much more technical than it is. Through dollar-cost averaging, you'll end up buying more shares when a stock or fund is down, and fewer when it’s up. For instance, say you’re investing $500 monthly in a stock trading initially at $50 per share; so the first time, you buy 10 shares. If the next month the stock moves up to $62.50 your regular purchase will net you only eight shares. However, if the stock drops to $41.67, you'll get 12 shares (not including any transaction fees).Start investing with $100.
It's easy to set up regular-investment mechanisms, thus harnessing the power of dollar-cost averaging. Mutual funds are the traditional way. But there are other outlets, as well, that allow you to apply the strategy with individual stocks or exchange-traded funds, which are baskets of stocks that identically track standard market indexes, such as the Dow Jones Industrial Average ($INDU).
Risk
Sure, investing in the stock market has risk. There’s always the chance the market will go nowhere for the next 20 or 30 years and you’ll end up no better than where you started. But there’s risk in everything, even CDs.
With CDs, your original investment isn't in danger. Most CDs are insured, and the federal government will step in and make you whole, even if your bank goes belly up.
But a problem crops up when something more sinister surfaces: inflation. At this writing, inflation, running at around 2%, is considered relatively benign. But is it?
Let’s do some math. Your real return is the interest you receive less the inflation rate. If your CD is paying 3% and the inflation rate is 2%, you’re only making 1% in real terms. If inflation takes off, say to 5%, your CD will probably be paying around 4%. In inflation-adjusted terms, you’ve lost 1%.
But it can get worse. Inflation hit 14% in the early 1980s. In such times, CDs and similar fixed-income investments don’t even come close to the inflation rate, meaning you’re losing serious money, in real terms.
By contrast, assets such as real estate and stocks tend to move with prices, and, over time, the stock market has outpaced inflation. For instance, in the 20-year period ending Dec. 31, 2001, the cumulative return of the market, as measured by the S&P 500 Index ($INX), was 1,606%, compared to 88% cumulative inflation over the same period.
What’s the point? Yes, there’s risk in investing in the market, but the odds are that continuous, regular investing combined with the power of compounding will make you rich.
The odds
If you count yourself a member of the “I want it now” generation, the idea of waiting 20 or 30 years to get rich probably sounds like a dumb idea.
Sure, there are faster ways to get rich. You could win the lottery, or pick the next Intel (INTC, news, msgs) or Wal-Mart Stores (WMT, news, msgs). But don’t quit your day job just yet. Your chances of winning big in the lottery run around 15 million to 1, at best.
Meantime, naturally, you would be sitting pretty if you had had the foresight to plunk significant cash into Intel or Wal-Mart 20 years ago. But consider this: You would have lost money if you’d picked Advanced Micro Devices (AMD, news, msgs) instead of Intel, and you’d be broke if you’d picked Kmart (SHLD, news, msgs) (which completed its merger with Sears Roebuck on March 27) instead of Wal-Mart. In both instances, your retirement plans would be history.
Here's the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out in the paragraphs above. For the vast majority of us, wealth creation is a slow and steady -- and powerful -- process. The tortoise almost always beats the hare.
It's not easy. But it's very, very simple.
At the time of publication, Harry Domash did not own or control shares in any of the equities mentioned in this column.
Getting rich is simpler than you think
By Harry Domash
Blend three ingredients -- a paycheck, discipline and time -- and, you, too, can be a millionaire. It's not always easy, but it's simple. And you have no excuse not to do it.
Here is the single most important thing you will ever hear about investing: Getting rich is simple.
Not easy, but simple.
And here is the second most important thing you will ever hear about investing: You have no excuse not to do it.
Only three ingredients are needed: income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline. And armed with the following knowledge, that key third ingredient may be a lot easier to find.
Here's how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.
Here's a similar scenario: If you start with a nut of $50,000 and add only $250 per month, you’d have $180,000, $516.000 and $1.4 million after 10, 20, and 30 years, respectively. All this happens through the power of regular investing and a simple-but-powerful concept called compounding.
Compounding
What is compounding?
Compounding is the reinvestment of the interest you receive from the money you set aside. For example, if you invest $1,000 and earn 10% interest on your principal at the end of each year, you'll get in $100 interest at the end of the first year. If you reinvest that interest, the second year you would start with $1,100, and thus would earn $110 interest. If you stay with it, you’d more than double your money every eight years.
“Compounding," Albert Einstein said, "is mankind’s greatest invention because it allows for the reliable, systematic accumulation of wealth.” Einstein was a smart man. But you hardly have to be a genius to make this concept work for you.
The real magic of investing comes when you combine the surprising power of compounding with continuous and regular investments -- in other words, discipline.
The best way to make these continuous investments happen is by setting up an account with a broker or mutual fund that automatically deducts a fixed amount from your bank account every month. “Automatic” is the operative word here. Trust me, if you don’t set it up that way, it won’t happen. Instead, you’ll end up pouring money in when the market is soaring and skipping payments when it’s heading down. Eventually you’ll get discouraged and give up.
Dollar-cost averaging
The process of continuously investing a fixed dollar amount is called dollar-cost averaging -- a term that sounds much more technical than it is. Through dollar-cost averaging, you'll end up buying more shares when a stock or fund is down, and fewer when it’s up. For instance, say you’re investing $500 monthly in a stock trading initially at $50 per share; so the first time, you buy 10 shares. If the next month the stock moves up to $62.50 your regular purchase will net you only eight shares. However, if the stock drops to $41.67, you'll get 12 shares (not including any transaction fees).Start investing with $100.
It's easy to set up regular-investment mechanisms, thus harnessing the power of dollar-cost averaging. Mutual funds are the traditional way. But there are other outlets, as well, that allow you to apply the strategy with individual stocks or exchange-traded funds, which are baskets of stocks that identically track standard market indexes, such as the Dow Jones Industrial Average ($INDU).
Risk
Sure, investing in the stock market has risk. There’s always the chance the market will go nowhere for the next 20 or 30 years and you’ll end up no better than where you started. But there’s risk in everything, even CDs.
With CDs, your original investment isn't in danger. Most CDs are insured, and the federal government will step in and make you whole, even if your bank goes belly up.
But a problem crops up when something more sinister surfaces: inflation. At this writing, inflation, running at around 2%, is considered relatively benign. But is it?
Let’s do some math. Your real return is the interest you receive less the inflation rate. If your CD is paying 3% and the inflation rate is 2%, you’re only making 1% in real terms. If inflation takes off, say to 5%, your CD will probably be paying around 4%. In inflation-adjusted terms, you’ve lost 1%.
But it can get worse. Inflation hit 14% in the early 1980s. In such times, CDs and similar fixed-income investments don’t even come close to the inflation rate, meaning you’re losing serious money, in real terms.
By contrast, assets such as real estate and stocks tend to move with prices, and, over time, the stock market has outpaced inflation. For instance, in the 20-year period ending Dec. 31, 2001, the cumulative return of the market, as measured by the S&P 500 Index ($INX), was 1,606%, compared to 88% cumulative inflation over the same period.
What’s the point? Yes, there’s risk in investing in the market, but the odds are that continuous, regular investing combined with the power of compounding will make you rich.
The odds
If you count yourself a member of the “I want it now” generation, the idea of waiting 20 or 30 years to get rich probably sounds like a dumb idea.
Sure, there are faster ways to get rich. You could win the lottery, or pick the next Intel (INTC, news, msgs) or Wal-Mart Stores (WMT, news, msgs). But don’t quit your day job just yet. Your chances of winning big in the lottery run around 15 million to 1, at best.
Meantime, naturally, you would be sitting pretty if you had had the foresight to plunk significant cash into Intel or Wal-Mart 20 years ago. But consider this: You would have lost money if you’d picked Advanced Micro Devices (AMD, news, msgs) instead of Intel, and you’d be broke if you’d picked Kmart (SHLD, news, msgs) (which completed its merger with Sears Roebuck on March 27) instead of Wal-Mart. In both instances, your retirement plans would be history.
Here's the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out in the paragraphs above. For the vast majority of us, wealth creation is a slow and steady -- and powerful -- process. The tortoise almost always beats the hare.
It's not easy. But it's very, very simple.
At the time of publication, Harry Domash did not own or control shares in any of the equities mentioned in this column.
Tuesday, February 21, 2006
Give us the daily Money
I cannot and I do not want to provide financial advice to anyone. This is a dog eat dog environment in relation to money and investing. In addition who cares more than you about your hard earn greenback.
All, I will tell you here. I have done it, I am doing it or I will be doing it; today, tomorrow, in the future or never.
A few of my personal rules, some times I follow these strictly, sometimes I do not follow them at all, it depends how I feel that time of the year about rules. In either situation, I have discipline we cannot beat the market averages without discipline. You need to be bold, you need to be patient and you need to be ready to move from point A to point Z of your asset allocation.
Truth: all 229,000 money managers, recommending investing in open market stocks, never beat the major market averages for a period over 10 years.
Truth: money managers or investors investing in business beat the market averages 70% of time.
Truth: 90% of speculators -all stock holders are de facto speculators- lose money over the long haul -inflation adjusted- and average returns are below the commonly accepted average returns of 7%.
Truth: unmanaged indexes outperform 97% of all money and fund managers 100% of the time over a period of ten years in any given cycle. Thus, stop paying fees and look at a pondered basket of ETFs that are quantitatively managed as "powershares" in the Russell 2000, the SP 500, small cap, med cap and large cap stocks. I just keep adding $$ to the basket and my average is above 20% year over year. This allocation is never more than my taste for risk, and I can allow myself to take. Any one trying this should be willing to ride declines of 50% for some periods in the equity markets.
My allocation in this area changes over different economic times, sometimes I have less than 10% of my total allocation in non-dividend paying stocks.
Truth: dividend paying stocks over time beat eth market averages. I like them on my tax defer accounts, they are wonderful investments. I sell the asset if the indications are of NAV continued decline. I run a screen with focus on high dividend stocks and apply a calculation of value over a normal retirement investment target period with all dividends re-invested I will get a nice surprise.
I use www.bloomberg.com calculators and news.
As a build my 2007 target investments, I will post the information in www.marketocracy.com using fund symbols, which I will post here. Although, my returns continue to be gracious, by ranking myself against the top ROI kings -mutual funds and published money managers, I find myself in money bliss. I cannot guarantee that I will continue to outperform anything, nor anyone will be successful trying to replicate what I do. You might try it if you want, but be aware of the risks involved.
This is serious stuff. I am just one person doing one person thing for two persons.
Why the Rich Get Richer
http://finance.yahoo.com/columnist/article/richricher/2652?p=1
by Robert Kiyosaki
Finance Home > Why the Rich Get Richer > Why Many Aren't Securing Their Financial Future
Why Many Aren't Securing Their Financial Future
by By Robert Kiyosaki
Tuesday, February 21, 2006
Most people know they should invest, just as most people know they should watch their diet and exercise. Nonetheless, millions of people -- I estimate that 80 percent to 85 percent of Americans -- don't invest at all. What I mean by this is that these people aren't active investors.
An active investor is someone is someone who actually lives off their investments as opposed to wages from a job. My investments deliver a stream of cash flow every month, and I, like other professional investors, don't need a job.
It's similar to the difference between amateur and professional golfers: Amateurs may be very good players, but can they live off their golf game? A professional can withstand the heat of competition and has the mental toughness and the physical skills to create a stream of income.
At age 65, many amateur investors "turn pro" -- whether they like it or not. And that's a frightening thought.
In this article, I take a humorous as well as a more serious look at why people don't invest. A thank you to John S. Baen, Professor of Real Estate at the University of North Texas, for creating this list of why people don't invest -- even though they know they should.
Why People Don't Invest: 12 Humorous Reasons
1)They're already paying into Social Security.
2)Their budget includes $20 per week for lottery tickets, which is bound to pay off soon.
3)They believe that inflation means their money will grow.
4)Old people don't eat much anyway.
5)They sit at home waiting for the Publishers Clearing House van to pull up in their driveway and deliver their check.
6)Their money is safely buried in the backyard.
7)Their rich Aunt Melba will die soon.
8)Little Matilda is sure to make it big in Hollywood.
9)They can cash in their Dallas Cowboy collector glasses when it's time to retire.
10)Their dot-com stocks will come back to life.
11)They'll write a book and live off the royalties.
12)They plan on marrying a young wife/husband when they're 60 and depend on their financial support.
Sometimes we need a break from the seriousness of why we invest and take a moment to laugh a little...or maybe cry. Unfortunately, even though funny, this list contains many truths.
Investing for Cash Flow
The sad thing is: Many people think they're investors when they're not. Lots of people think their 401(k)s and IRAs, which have stock, bond, or mutual fund holdings, are investments, but I consider them savings plans. People with such retirement plans are what I call passive investors. They're simply "saving" for retirement.
Similarly, if you own your home and live in it, I don't consider it an investment. Without cash inflow monthly (and with money going out each month for mortgage payments, utilities, property taxes, insurance, and maintenance), your house is a liability, not an asset. It might become as asset -- if you rent it out for income each month that exceeds your expenses on it, or when you sell it and realize a capital gain.
Most professional investors invest for cash flow first and capital gains second, and, ideally, you want both (see "Investments That Pay Today -- and Tomorrow"). Rich dad told me many times: Investing for capital gains is gambling, not investing.
And remember: You don't need money to make money. Many of those people who don't invest cite that reason -- "I don't have the money to invest."
But there's OPM (Other People's Money) everywhere -- if you've trained yourself to see opportunities around you. How do you do that? Invest in your financial education. Learn how to spot good opportunities and how to turn a seller's problems into your profits.
Perhaps the best example of OPM is a bank as your real estate investment partner. They will loan you the lion's share of the money and allow you to take 100% of the tax advantages, depreciation, and capital gains.
Apart from a light-hearted look at why people don't invest, there are serious reasons for their inaction:
1. They have an entitlement mentality.
When the word entitlement is used, many people point an accusing finger to the poor and those on welfare. Yet, the sad truth is many people have an entitlement mentality. Starting with the President of the United States and working down, millions of people expect the government (or a business) to take care of them once their working days are over. This despite the shaky financial footing of Social Security and Medicare.
My rich dad believed we should all learn to take care of ourselves. I agree and believe it's about time our schools teach people to take care of themselves, rather than believe they're entitled to government support.
2. They lack vision.
Millions of people cannot see past tomorrow. It was Tolstoy who said: "The most unexpected thing that happens to people is old age." This year, the first Baby Boomers turn 60.
As an older Boomer, I hear many peers say, "I don't have to worry. I'll just keep working." They don't see that the day will come when their body cannot work anymore -- if they're lucky to live that long.
The cost of long-term care exceeds what most people earn today. For example, a friend pays over $6,000 a month to keep his mom in a modest facility -- that's more than most families earn monthly. What's going to happen when 75 million Baby Boomers start needing long-term care?
Today, I also hear young people blithely saying, "I'm still young." Whenever I have the opportunity, I remind young people that the Baby Boom problem is really theirs to finance.
3. Our school system doesn't teach us much about money.
"Go to school to get a job" is common advice. But that idea echoes the entitlement mentality, the idea that once you have a job, the company and the government will take care of you. It also reflects a lack of long-range vision. Today, we need to be educated about money beyond just "getting a job." We need to be educated for life after a job, after our working days are over.
The entitlement mentality and myopic vision stem from one place -- our schools and the lack of financial education in our educational system. It's time for our educational system to enter the 21st century and prepare people for the real world.
Author's note: Send me your top three reasons why people don't invest for inclusion in a future Yahoo! Finance column. Send them to: kiyosakionyahoofinance@richdad.com. Please use "Three Reasons" in your subject line and include your name, city/state/country and e-mail address.
by Robert Kiyosaki
Finance Home > Why the Rich Get Richer > Why Many Aren't Securing Their Financial Future
Why Many Aren't Securing Their Financial Future
by By Robert Kiyosaki
Tuesday, February 21, 2006
Most people know they should invest, just as most people know they should watch their diet and exercise. Nonetheless, millions of people -- I estimate that 80 percent to 85 percent of Americans -- don't invest at all. What I mean by this is that these people aren't active investors.
An active investor is someone is someone who actually lives off their investments as opposed to wages from a job. My investments deliver a stream of cash flow every month, and I, like other professional investors, don't need a job.
It's similar to the difference between amateur and professional golfers: Amateurs may be very good players, but can they live off their golf game? A professional can withstand the heat of competition and has the mental toughness and the physical skills to create a stream of income.
At age 65, many amateur investors "turn pro" -- whether they like it or not. And that's a frightening thought.
In this article, I take a humorous as well as a more serious look at why people don't invest. A thank you to John S. Baen, Professor of Real Estate at the University of North Texas, for creating this list of why people don't invest -- even though they know they should.
Why People Don't Invest: 12 Humorous Reasons
1)They're already paying into Social Security.
2)Their budget includes $20 per week for lottery tickets, which is bound to pay off soon.
3)They believe that inflation means their money will grow.
4)Old people don't eat much anyway.
5)They sit at home waiting for the Publishers Clearing House van to pull up in their driveway and deliver their check.
6)Their money is safely buried in the backyard.
7)Their rich Aunt Melba will die soon.
8)Little Matilda is sure to make it big in Hollywood.
9)They can cash in their Dallas Cowboy collector glasses when it's time to retire.
10)Their dot-com stocks will come back to life.
11)They'll write a book and live off the royalties.
12)They plan on marrying a young wife/husband when they're 60 and depend on their financial support.
Sometimes we need a break from the seriousness of why we invest and take a moment to laugh a little...or maybe cry. Unfortunately, even though funny, this list contains many truths.
Investing for Cash Flow
The sad thing is: Many people think they're investors when they're not. Lots of people think their 401(k)s and IRAs, which have stock, bond, or mutual fund holdings, are investments, but I consider them savings plans. People with such retirement plans are what I call passive investors. They're simply "saving" for retirement.
Similarly, if you own your home and live in it, I don't consider it an investment. Without cash inflow monthly (and with money going out each month for mortgage payments, utilities, property taxes, insurance, and maintenance), your house is a liability, not an asset. It might become as asset -- if you rent it out for income each month that exceeds your expenses on it, or when you sell it and realize a capital gain.
Most professional investors invest for cash flow first and capital gains second, and, ideally, you want both (see "Investments That Pay Today -- and Tomorrow"). Rich dad told me many times: Investing for capital gains is gambling, not investing.
And remember: You don't need money to make money. Many of those people who don't invest cite that reason -- "I don't have the money to invest."
But there's OPM (Other People's Money) everywhere -- if you've trained yourself to see opportunities around you. How do you do that? Invest in your financial education. Learn how to spot good opportunities and how to turn a seller's problems into your profits.
Perhaps the best example of OPM is a bank as your real estate investment partner. They will loan you the lion's share of the money and allow you to take 100% of the tax advantages, depreciation, and capital gains.
Apart from a light-hearted look at why people don't invest, there are serious reasons for their inaction:
1. They have an entitlement mentality.
When the word entitlement is used, many people point an accusing finger to the poor and those on welfare. Yet, the sad truth is many people have an entitlement mentality. Starting with the President of the United States and working down, millions of people expect the government (or a business) to take care of them once their working days are over. This despite the shaky financial footing of Social Security and Medicare.
My rich dad believed we should all learn to take care of ourselves. I agree and believe it's about time our schools teach people to take care of themselves, rather than believe they're entitled to government support.
2. They lack vision.
Millions of people cannot see past tomorrow. It was Tolstoy who said: "The most unexpected thing that happens to people is old age." This year, the first Baby Boomers turn 60.
As an older Boomer, I hear many peers say, "I don't have to worry. I'll just keep working." They don't see that the day will come when their body cannot work anymore -- if they're lucky to live that long.
The cost of long-term care exceeds what most people earn today. For example, a friend pays over $6,000 a month to keep his mom in a modest facility -- that's more than most families earn monthly. What's going to happen when 75 million Baby Boomers start needing long-term care?
Today, I also hear young people blithely saying, "I'm still young." Whenever I have the opportunity, I remind young people that the Baby Boom problem is really theirs to finance.
3. Our school system doesn't teach us much about money.
"Go to school to get a job" is common advice. But that idea echoes the entitlement mentality, the idea that once you have a job, the company and the government will take care of you. It also reflects a lack of long-range vision. Today, we need to be educated about money beyond just "getting a job." We need to be educated for life after a job, after our working days are over.
The entitlement mentality and myopic vision stem from one place -- our schools and the lack of financial education in our educational system. It's time for our educational system to enter the 21st century and prepare people for the real world.
Author's note: Send me your top three reasons why people don't invest for inclusion in a future Yahoo! Finance column. Send them to: kiyosakionyahoofinance@richdad.com. Please use "Three Reasons" in your subject line and include your name, city/state/country and e-mail address.
Monday, February 20, 2006
When the Media Fails
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/20/AR2006022000746.html
Investing a new energies is going to be the next internet boom and bust.....Do not read my lips read the Washington Post article headline and content.
As the article touts the new miracles in new energies. The middle of the report inserts a quote: "there is a deficit of $25 mil in investment and 36 scientist will be fire" go figure, it is all hyping all over again.
I will no ponder the reasoning of the process or the qualifications of the reporters, I take just the fact about the hypocritical approach titling the article and the reporting.
The new federal budget was approved with record expenditures, but 90% of all scientific research in the US got sliced or freezed, except war research, nuclear and NASA -project to go to Mars.
It is not new news that research and education for research is underfunded in America. The proof is on patents assigned. Worse, going forward is the decline in doctoral/reserach program applicants.
Today, 60% of all PHd's working the US are born in a foreign country.
The present state of nationalistic arrogance and blindness, is not the best position to claim a bright future.
If the Ayatollahs stiffle education, Christian zelots are doing the same, time to get a new enlightement.
Friday, February 17, 2006
The Blame Game
It is easy to blame some else for your problems, that does no remove the problem from being your own big problem.
That is what is happening with the US economy.
Yesterday, the new appointed Chairman of the Federal Reserve, Mr. Bernanke was grilled with questions about the upcoming reckoning day for the US economy.
As it was Mr. Bernanke fault that Congress controlled by industrialists, that includes all republicans and 90% of democrats, are running the biggest deficit in history and the most hypocritical behavior since Louis XVII France.
The US deficit is alarming to say the least, to compare, with half of the present deficit in percentage points to the economy, the present US deficit, the IMF and WB cut funds to Argentina and created the Argentina crisis. So imagine, we had the balls to go to Argentina to create the biggest economic disaster in Latin America that has created the biggest trend of animosity against the US and here we are today running twice the amount of deficits and external debt and calling it solid. Go figure who is going to trusts the US next.
Today, the IMF and the WB of the US are China and in far away second India. Our total ppool of lenders 2.3 billion people.
The trade deficits with China and the fact that China has become the controlling interest of US holdings, at the present pace China is creating as much power over US policy as the IMF and the WB has over the rest of poor countries.
If you think this is far fetched, read the transcripts of the congressional hearings on the economy and trade, some members of Congress Republican and Democrats are crying foul for the upcoming reckoning.
The decline of the US currency is the firsts signal, the dollar had to be devaluated because the buyers of dollars agree that it was not worth 50% of what it was selling. Do you think America is worth 50% less of what it was worth four years ago? Or your work should have 40% less value? For that matter anything in your live that you transact with dollars is worth 40% less today than 5 years ago. Not a material reality to forget. Check the value of the always mocked Canadian dollar, from where we buy our oil or the value of the English Pound from where we clear all our insurance money.
Sooner or later, and in terms of concrete dates runs between 10 to 25 years, the US will become a third tier economy, based on the fed own research, this reality is approaching. Are you ready for this reality?
If you decide to blame, you have no much room accomplish anything substantial.
The action driven blame game can start by getting rid of incumbents in Congress, usually dramatic change creates wealth. Find a challenger to any elected incumbent and volunteer or fund the individual even if you think philosophical is opposite to your views. Some times changes has very interesting outcomes.
That is what is happening with the US economy.
Yesterday, the new appointed Chairman of the Federal Reserve, Mr. Bernanke was grilled with questions about the upcoming reckoning day for the US economy.
As it was Mr. Bernanke fault that Congress controlled by industrialists, that includes all republicans and 90% of democrats, are running the biggest deficit in history and the most hypocritical behavior since Louis XVII France.
The US deficit is alarming to say the least, to compare, with half of the present deficit in percentage points to the economy, the present US deficit, the IMF and WB cut funds to Argentina and created the Argentina crisis. So imagine, we had the balls to go to Argentina to create the biggest economic disaster in Latin America that has created the biggest trend of animosity against the US and here we are today running twice the amount of deficits and external debt and calling it solid. Go figure who is going to trusts the US next.
Today, the IMF and the WB of the US are China and in far away second India. Our total ppool of lenders 2.3 billion people.
The trade deficits with China and the fact that China has become the controlling interest of US holdings, at the present pace China is creating as much power over US policy as the IMF and the WB has over the rest of poor countries.
If you think this is far fetched, read the transcripts of the congressional hearings on the economy and trade, some members of Congress Republican and Democrats are crying foul for the upcoming reckoning.
The decline of the US currency is the firsts signal, the dollar had to be devaluated because the buyers of dollars agree that it was not worth 50% of what it was selling. Do you think America is worth 50% less of what it was worth four years ago? Or your work should have 40% less value? For that matter anything in your live that you transact with dollars is worth 40% less today than 5 years ago. Not a material reality to forget. Check the value of the always mocked Canadian dollar, from where we buy our oil or the value of the English Pound from where we clear all our insurance money.
Sooner or later, and in terms of concrete dates runs between 10 to 25 years, the US will become a third tier economy, based on the fed own research, this reality is approaching. Are you ready for this reality?
If you decide to blame, you have no much room accomplish anything substantial.
The action driven blame game can start by getting rid of incumbents in Congress, usually dramatic change creates wealth. Find a challenger to any elected incumbent and volunteer or fund the individual even if you think philosophical is opposite to your views. Some times changes has very interesting outcomes.
Monday, February 06, 2006
New Federal Budget New Debt Record
The good news is that all the new federal debt records is all been done by self nominated fiscal conservatives. Can you imagine if they were not fiscal conservatives !!!! And the present budget does not include any of the major events that need immediate funding: War in Iraq and rebuilding the south Afganistan, Tajikistan, Sudan, etc. The actual debt will actually double the amount serve each American another $19,ooo or $280 more billion in new debt. In plain terms 3/4's of a trillion dollars, this way it looks smaller. I challenge you to write the number in a piece of paper and divided by the US population. Include illegals they pay taxes in most cases.
We need to thank those folks that save money and are willing to subsidize our mortgages, our leased cars, all our manufacturing, copiers, bananas, cereal, broccoli, gasoline/oil, plastic, basically every thing that you need to survive is been subsidized by: 1) The Saudis 2) China 3) Japan 4) Most western retirement plans 5) Africa natural resource explotation all exempted from supporting development where we exploit it.
Many are starting to get chills and worry asking themselves: will the Saudis bail out or the Japanese etc. No one is going to bail out of the Ponzi scheme.
Their leaders's debt to corruption is so large that they need every single apartment build in Manhattan to hide their country pilfered assets and they need US debt to robe their own country man to cover up their own con job.
We must get up every morning and send a few thanks in the way of the Saudis, whom with their magnanimous benevolence provide us with 15% of our present debt service. Consequently our above average standard of living.
We must thank the Chinese becuae their labor camps and exploited workers provide us with cheap everything except a few other thing no yet figure out, like housing. In the process the Chinese send us the savings of their citizens who in fact they save every month around 40% of their income so they can retire securely.
If they knew what we do with their pension money......
We need tot thank the Japanese who with a strong sense of dignitiy and dictatorial behavior buy our debt at rates unheard of in history of issuing debt. Which will be the equivalent of esxporting 70% of their savings to the great US go-go live style.
Hey, we must thank capitalism for the power to detroy their assets. As it did when the Japanese economy and US asset values where at sky high and the Japanese pensions bought the top US buildings and thanks to the magic of the federal reserve all those assets become a bargain basement and a buy back for US insures waiting for the next resale. The Japanese invested at inflated values, and lost and average of 65% in every single dealsince the 80's, all that pays for our party time.
So.....when you get up each moning, say a couple of thanks to our beloved debt buyers for such wonderful partnership. They work hard we party hard. Now, as action items of thanks:
Light a candle for Shinto and do a couple of claps. Fast one day in the name of Allah, so your tommy knows how some kids feel. Do five minutes of Tai Chi and let's hope that the Chianese continue to use labor camps for cheap labor as the nazi did. Finally, the Ruskies need to get back to the herd and buy back all those dollars they just sold, and for that, I suggest drink a double Spice Russian Vodka Martini.
I hope you plan some indulgent luxuries to celebrate all of them in unison after you are done with the single thank yous.
!!Viva la Deuda!!
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