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.

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.

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.

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.

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!!

Taketh or Giveth

My take on a couple of fervent religious things.
There is not question that many individuals with the name of Iosephus and variations of the present translation of the name Jesus lived in the area were the stories attributed to him in the Bible. We know that the present interpretation of the life of such individual has not much relation to historic documentation. We also know the Bible as we know it today was lastly compiled in ten principal and different formats. The earliest Catholic codification of texts was done by the Roman codification of popular texts of 325 which basically was a coordinated political project.
Its purpose was to control the Near East and undermine the control of the Judaic elites. Four more codifications and text alterations occurred when the Koran appeared. By 780 was understood and rightly perceived by the Christian elites in the Middle East, the Koran was as a serious threat to their control. The Koran competed with the capacity to incite blind passion, as the Christians were, and challenge the power of the elites ruling from Constantinople. Thus, initiating the next emergent need for a new codification of biblical texts -first time referred as such in 750 ad- to “create military enforcement of expansion and defense of power.”
The corruption in the western-Christian church organization was rampant it was in the verge of self-destruction.
It wasn't until new threats mainly from Martin Luther, the church’s own corruption, it basically questioned the Church of Rome own dogma. It forced the council Trent to be called with the emperor sending delegates to represent the crown rights and avoid a war of power.
The justification of the many deviant behaviors exercised under the bible scripts were stripped, all changes to counter attack the powers emanating from new threats, internal corruption and land ownership- and external from the Turks under the flag of Islam.
In the air was the full question of how to use the bible. In a rough translation from the Enciclopaedia Catolica reads "It was determined that the Bible should be interpreted according to the unanimous testimony of the Fathers and never misused for superstitious or deviant purposes. Nothing was decided in regard to the translation of the Bible in the vernaculars."
It should be obvious that all religious books and interpretations are human in purpose and destiny.
It makes the Bible another human crafted document for control of social behavior. Most religious dogmas if implemented in honesty create a leveled equalitarian societies of respect referred as Christian societies. It has nothing to do with present pervert interpretation of the biblical texts.
It wasn't until 1562 that most of the present behavioral doctrines were adopted. It is agree among philosophers of power, that religion is a useful social tool of control, as is control over dogma, education, health, policing, taxation and armed power supporting the elites to control and wage wars of expansion with the purpose of exploiting the conquered.

Why the Rich Get Richer Continues

Educate Yourself into Riches
by Robert Kiyosaki
Tuesday, December 27, 2005

Many of Wall Street's elite firms were being required to pay tens of millions of dollars in fines to investors, according to media reports. The penalties are for alleged bad investment advice, courtesy of New York State Attorney General Eliot Spitzer.

This brings me to one of my favorite quotes from famed investor Warren Buffett goes: "Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway."

I have been highly critical of the standard financial planning advice -- "work hard, save money, get out of debt, invest for the long term, and diversify" -- for a long time. Such guidance is often more a financial advisor's (subway rider's) sales pitch than a solid investment guide.

But while I think it's courageous that Spitzer slaps millions in fines on a few Wall Street firms for their bad investment guidance, I believe the investors who accepted that unsound advice have some responsibility, too. Isn't knowing the difference between good and bad advice part of knowing what you're doing?

The Difference Between Investing and Shopping

The problem is, most investors don't know how bad the standard investment advice is. This mantra of "work hard, save money, get out of debt, invest for the long term, and diversify" is followed by millions of investors -- who lost $7 trillion to $9 trillion between 2000 and 2004. Many are still following this bad advice today.

Not only did millions of investors lose trillions of dollars, many also missed the boom in real estate, oil, gas, and previous metals. Furthermore, despite investors' huge losses, Wall Street paid out some of its biggest bonuses in history.

However, investors should realize it's "buyer beware." Investing is different from shopping. If I go to Sears and don't like the tool or shirt I purchased, I can generally get my money back. When we go shopping, we expect value for our money. But when we invest, we do so in the hopes of making more money -- and knowing that we risk making losses. What would happen to the financial industry if brokers were sued every time a client lost money? The wheels of world commerce would grind to a halt.

My point is: The world is filled with honest people handing out bad advice. An example of honest bad investment advice is the standard one of "work hard, save money, get out of debt, invest for the long term, and diversify".

The world is also filled with biased advice, which is why people say, "Never ask an insurance broker if you need insurance, or a mutual-fund sales person if they recommend mutual funds." Furthermore, there are many crooks and con artists as well, who intentionally promote dishonest ventures.

Spotting the Difference

So while it's imperative that we have the Securities and Exchange Commission and a brave Attorney General such as Spitzer to enforce the rules, we, as individual investors, still need to be vigilant and personally responsible for the advice we receive and what we do with our money.

In my opinion, that means each of us needs to be responsible for our own financial education so we can tell the difference between good advice, biased advice, and crooked advice. If you can educate yourself to know the differences between those three types of advice, getting rich is easy.

Or, if you take investing advice from a subway rider, don't be surprised if you wind up on the subway.

“All Politics is Local”

“All Politics is Local” Tip O’Neill

All questions you ask a candidate must have local affections without forgetting that one day the same person might be your national official or will be a member of your local party structure thus having access to your federal elected official.

Questions presented to a candidate for endorsement for a local office must include a series of question, that are part of the “all” even if they are out of he present scope or situations that the candidate will confront but affect all of us in all subjects from local to national level.
All interview processes must imagine your town library council member running for Congress in the not long future or have a voice at the local party level politics, that might influence the federal elected official.

What you ask today might be useful in the future.

For example the most forgotten questions are budget questions, when the issue most affecting us in our everyday day lives is the federal and local budgets.
This kind of question line gets asked when the situation is so bad that it makes them irrelevant.
At the point if which the average candidate gets asked relevant commitments and questions usually it is too late.

If the tendency is to ask a candidate if they support this war of that war, it will be more apropos to ask if the candidate will be an unbiased supporter of increase on military personnel salaries by 50% or more and introduce legislation linked to pentagon budget cuts. As counter intuitive as it might seem, it indicates one single purpose, if the civilians plan to send a military person to war they must pay fair salaries, specially the support for above average salaries of highest paid private mercenaries.
In parallel include support for legislation that, if the reserves are going to be called to an arm conflict the amount of pay must be fully replaced and a 50% increase salary for active duty while in armed conflict participation.
Although, this is not an anti-war position it is a position that reduces the easy of action to send soldiers to war and demand negotiations for peace due to reduced budgets.

For example most housing subsidies are driven to simple pay for housing via rental agreements, but not towards ownership via subsidies, candidate positioning and questions in the direction of subsidized ownership while demanding for better accommodations for the people in need. In housing is more apropos to demand ownership than to demanding for support dilapidated rental units.

A candidate will have to answer support for budget question in which there is not increase of taxes but an increase on educations and health coverage which is more progressive than tax increases. The Guns and Butter choices, when too extreme at local level go in favor of butter, call it local tax cuts.

The importance of this dialogue is to increase the level of questioning before throwing the towel in one direction based on partisan views. Needs of people are no partisan.
Most people are independent and most people need education in the subjects of need.
We all constantly need to find a common ground on our own personal needs, our town, our national needs and our international needs.
Most of the ignorance on subjects of need are driven by jingle style phrases with empty value, and driven to support idiocy and disrupt understanding and dialogue of issues.

SEC Ready to Loosen Rules on Corporations

Buried in page C14 of the New York Times was the story of the SEC newest effort to erode individual shareholders rights.
The change is pushed by corporate crooks in the making and some Congress members. The SEC vote took place under the new strategy of Chairman Cox on December 13, 2005. This will not be a date to remember for individual investors who care about their freedom to know and invest securely.
Among other supporters of this private investor erosion of rights is our own Congresswoman Sue Kelly. Congress woman Kelly, whom, she has advocated to deregulate “small business“. The problem with the term “small’ is that on these folks views “small” means anything less than $700 million. No your majority and normal town business. Also, not to forget are the elected Congress members Lowey and Engel. None of these two have raise their voice to oppose such damaging changes to investors, that increases risk to assume reporting is not manipulated and cooked by corporate crooks as we have learned in the past few years.
We have such large pool of crooks in corporate America that decimating Sarbanex-Oxley legislation will be the wrong message for the wrong reasons.
Although, Sarbox is nothing to cheer as a protection for individual investors, it is better than standing naked at 20 below zero, which will be the equivalent of this regulation change.
The politicians continued abuse of Orwellian language and non-stop redefinition of meanings, is very dangerous to any society.
The SEC latest proposals and measures affects all citizen investments, these investments are being put at a higher unnecessary risk.
The vote at the SEC went 18-1. The dissenter was the president of the Center for Financial and Market Integrity. You might wonder why the person advocating for markets integrity loses the battle, overturning 404 Sarbox (as is commonly referred). This is part of the radical right corporatist ideology, to shift risk from this new monarchy to the people.
The way it works is not too complicated. By making the alternatives to savings and returns to be placed in higher risk investments, then the laws supporting ownership of holdings get devaluated, by stripping of shareholders rights, thus eliminating accountability from the perpetrators of malfeasance, leaving the investors holding worthless paper and retirees wondering where is the next job at half minimum wage at 65 years of age. This vote an the present political position is a devastating event for individual investors.
The danger here for all of us is the lack of accountability of our elected officials, and we are the ones allowing them to walk away unquestioned.
The continued positioning of regulations deterring shareholders rights, has reach levels in which all equities and share-ownership is the equivalent of a sophisticated Ponzi scheme. This is supported by the government and fall on the backs of Americans. It is not me saying this it is, the last five Nobel prizes of economics are saying this in many ways.
It an era in which most of our savings are induced by government legislation to be placed in the riskiest of investments as in the stock market, the lack of solid pensions must has directed to strenghent private investor rights,, not to decrease them. A large amount of blame falls in the hands of mutual funds. Who by supporting crooked accounting on corporate America, have not made and statement and divest from companies that blatantly silence the truth of their accounting methods. Most of equity invest today is in untrustworthy assets, most equities have underlining worthless claims.
This is a system that it is in a path of accelerated booms and bust (as the recent stock market internet crash) moving wealth from the savers to the rulers, most of the benefits go to the very few who control the Ponzi scheme.


The pressure exercised today by Congress members and the Bush administration to annul the Sarbanes Oxley Legislation, when they should protect investors from crooked accounting and internal systems that allowed CEOs to commit fraud, it is in the opposite direction of citizens needs.
These measures are in the direction of allowing crooks to thrive again and the rest of us survive in these murky waters, and the prospective of loosening against our hard earned savings to the lack of accountability.
As Alan Greenspan said last week “if we lose trust we lose capitalism“, we have lost trust and we cannot trust reporting.

From Mercenaries to Peacemakers?

Scandals Confront Military Security Industry
by David Phinney, Special to CorpWatch
November 29th, 2005

Wherever Tim Spicer turns up, he carries the kind of baggage that gives the private military business a bad name. An internet video showing private contractors shooting at civilian cars in Iraq, loosely linked to his company, has ignited a firestorm about unregulated gun-wielding security convoys, escorting reconstruction or government advisors, roaming the country. [See Box]

This latest scandal comes at a time when the military security industry is reaping huge profits from the gun-carrying business in conflict zones around the world once dominated by rogue soldiers of fortune. As thousands of armed guards, working largely under U.S. contracts, travel the roads of Iraq, the industry is seeking respectability though a Washington trade group -- the International Peace Operations Association (IPOA).

The group calls itself “the most ethical and effective voice of the Peace and Stability Industry,” pledged to ensure that “their capabilities are not misused or abused.” Its members include industry heavy hitters like ArmorGroup, Blackwater, Hart, MPRI, the Olive Group and Triple Canopy.

Shooting Gallery

The grainy video (click to download) shows the view of an Iraqi street from the back of a moving vehicle. The long barrel of a gun, held by someone inside the vehicle, swings across the frame and viewers see the effect of bullets, apparently fired from the vehicle, spraying civilian cars coming up behind. Bloggers claim that the man with the gun is Danny Heydenreycher, a South African employee of Aegis at Camp Victory.


In one of the four separate incidents, after shots are fired, viewers see a Mercedes car crash into a taxi; passengers flee from the taxi, but no movement is seen in the Mercedes, suggesting that the passengers were injured or killed.

According to Robert Young Pelton, author of an upcoming book, “Licensed to Kill: The Privatization of the War on Terror,” the people driving the vehicle are part of a convoy of private military contractors. The video was originally posted on an unofficial Web site run by a disgruntled contractor working for Aegis Defence Services. (The website claims to be a voice for to "the men on the ground who are the heart and soul of the company.” The video has been deleted from the site but has taken on a life of its own in the blogosphere.)

Aegis holds several sweeping Pentagon contracts in Iraq worth over $430 million. In published news reports, Tim Spicer, the head of Aegis, insists that an internal investigation of the matter is ongoing and notes that there is no evidence that the video involved Aegis. Authorities in Baghdad are also apparently looking into the video, which has torched a firestorm of criticism as bloggers ponder if the United States uses private contractors who shoot unarmed Iraqis.

Pelton, who spent a month with armed convoys running the road from the Green Zone headquarters in Iraq of the U.S. military and government to the Baghdad International Airport, said he understands the public concerns over the conduct of armed private security companies working in Iraq. Private security companies are known to regularly fire guns in the streets as a warning to clear traffic and to caution vehicles coming up from behind.

“The US military considers all of Iraq a war zone,” said Pelton. “Contractors are the frequent target of car bombs, but there are rules and professional standards. Two of the four incidents are trigger happy contractors. It’s a good bet that all of the victims of the incidents will generate some type of retribution against the security industry. Even in a war zone, there is a clear line between professional security providers and amateurs. This video shows how not to conduct vehicle security.”

Another source who is familiar with private security operators in Iraq says that it is nearly impossible to tell the difference between a hostile vehicle carrying a bomb and innocent Iraqi civilians driving toward you. Under rules issued by the Pentagon, any private security team member is expected to wave off a possible threat, fire warning shots and then shoot at the vehicle’s engine to stop it. Team members are also allowed to shoot to kill as the last resort in a situation of pressing circumstances.

“Some team members are scared all the time and shoot a lot, some are scared once and a while and shoot once and a while, some are never scared and never shoot,” the source said. “You can never tell when you are about to get blown up, that’s why some contractors get blown up or they would have shot the driver.”

But at the same time as the industry is evolving -- becoming more corporate, more visible, and more concerned with projecting a responsible image -- private military contractors are facing scandal like the new video in circulation and unprecedented scrutiny from the news media. Some executives recognize that if the companies don’t regulate themselves, someone else might. The public, and many policymakers, sees contractors through an image shaped by accusations of war crimes, rogue operations, and photos of private contractors engaged in torture at Abu Ghraib.

To some, Tim Spicer, a Falklands Islands war veteran with weathered good looks, embodies the industry’s old rogue image. During the past 10 years, the 53-year-old former Scots Guard lieutenant colonel racked up a gun-for-hire resume littered with questionable deals and testaments to poor judgment.

Highlights of his globe-trotting career include sparking international scandals in Southeast Asia and flaunting international bans on arms trafficking in West Africa. A contract held by his now defunct company, Sandline, precipitated the toppling of the very government that hired it: Papua New Guinea. When Sandline mounted a $10 million armed operation in Sierra Leone, initially bankrolled behind-the-scenes by a shady fugitive wanted for embezzlement, Spicer was accused of legal and financial shenanigans.

And now, to the chagrin of many IPOA members, Spicer wants to join the organization. His membership bid comes just as the IPOA is trying to reposition the industry as for-profit providers of armed men as peace keepers.

In a vote several months ago, IPOA rejected Spicer’s company Aegis Defence Services. A second bid to join the only trade organization for security contractors is causing a private little war inside the IPOA sandbox.

“This is an issue about making a stand. The organization shouldn’t back away even if blood is spilled on the carpet,” said an executive in a major security company who cited commercial reasons for insisting on anonymity. “If the IPOA doesn’t get it right, it will come back to haunt it.”

Spicer was “surprised” by IPOA’s initial rejection “especially since we were invited to apply,” he said in a recent telephone interview. He flatly denies rumors that he threatened legal action against the group.

Complicating matters is the fact that London-based Aegis holds the Pentagon’s largest private security contract in Iraq. Established in September 2002, by Spicer, who owns 40 percent of the company and is its chair and chief executive, the fledgling company made headlines in June 2004 when it landed the $293-million three year contract in Iraq despite having no experience in the Middle East. The contract has since been expanded for another year, making it now worth $430 million.

Under the three-year agreement, Aegis wields considerable power and influence over the safety and effectiveness of the other security companies including many IPOA members. Spicer’s company provides daily analysis on counter-insurgency and personal protection to government officials. It also holds sweeping responsibility for electronically coordinating employees of other security convoys traveling around Iraq, working for companies with reconstruction or government contracts. The scores of contractors under Aegis’s control constitute a workforce the size to a military division; and may rank as the largest corporate military ever assembled.

Saving Africa

Doug Brooks, IPOA’s president, a passionate defender of private military contractors, had no comment about the internal spat over Spicer and declined to reveal who re-invited Aegis or why its first application was rejected. In the industry’s rough and tumble past, Brooks had defended Spicer’s former company, Sandline, telling CorpWatch more than a year ago that the company had helped save thousands of lives in Sierra Leone.

"Sandline was remarkably effective," Brooks said. "Their goal of restoring the democratically elected government was achieved. They maintained a low profile but played a critical role in the success."

The lanky 43-year-old head of IPOA is more circumspect these days. “This is an internal matter,” Brooks said. “But I do think we should try to be inclusive.”

Brooks, a son of a professor of African studies with an unfinished doctorate in international security, says his long-time interest in Africa inspired him to start IPOA in April 2001. At the South African Institute of International Affairs, and during years of teaching and traveling in Africa, he says he saw impoverished nations with ill-equipped armies struggle against violent insurrections as developed nations stood by, unwilling commit their own forces.

The hands-off policy allowed butchers to storm across the continent while United Nations peacekeepers frequently fell short of the task, he said. For example, in 2000, Sierra Leonan rebels routed 17,000 poorly-trained and equipped UN security troops, and then rampaged through the countryside dismembering unarmed citizens and creating hundreds of thousands of refugees.

"We still don’t know how many died," Brooks said. "But I spoke to hundreds of Sierra Leonans about the failure of the UN peacekeeping force. They are all very vocal and pissed off.

It was the private companies such as Pacific Architects & Engineers (PAE) and International Charter Incorporated (ICI) of Oregon (now IPOA members) that "stayed put," providing airplanes and logistics support for the local military and, according to Brooks, gained the trust of the people.

Spicer defends his work in Sierra Leone and Papua New Guinea as “defending democratically elected government that were removed in violent coups.”

Robert Young Pelton, author of an upcoming book, “Licensed to Kill: The Privatization of the War on Terror,” offers a different take, noting that Sandline's predecessor, Executive Outcomes, had intervened in Sierra Leone in 1995 and saved lives.

"But the Sandline "Arms to Africa" debacle in 1997 did little to save lives. It's a common confusion that Spicer allows," he says. "In PNG Spicer's involvement actually ended up deposing a democratically elected government. Both jobs resulted in resource concessions being granted to Sandline owners or backers."

Whatever the industry’s past faults, Brooks believes in its future. It was the willingness of private military companies to do the work that developed nations refuse, he said, that led him to found IPOA and seek the support of policy makers.

"I think the industry is a huge resource that should be tapped,” explained Brooks, who represents the industry at defense contracting conferences and meetings with the State Department. "There are times when government won’t send their own troops, but they are willing to write a check."

Business Booms in Iraq

Check writing is exactly what has been happening in Iraq, where billions of dollars in new Pentagon contracts have supercharged the growth of private security companies and spawned multimillion-dollar companies overnight. Private security accounts for at least one quarter of the $24 billion earmarked for rebuilding, according to a recent report by the U.S. Special Inspector General for Iraq Reconstruction (SIGIR). Much of this money goes to the estimated 25,000 to 30,000 armed contractors who were swiftly sucked up from a global pool of ex-military and law enforcement personnel.

The sharp demand for personnel has led to varied (some say lower) standards of training and military experience in workers from dozens of countries including the Britain, Colombia, Chile, El Salvador, Fiji, Nepal, Peru, Serbia, South Africa, and the United States.

Tim Spicer

Controversy follows Tim Spicer as surely as contractors follow armies into war. His former private military company, Sandline International, which was involved in several international scandals in the late 1990s, continues to be a classic case study of what can go wrong when private military companies wage war.
The government of Papua, New Guinea hired Sandline in 1997 to quell a nine-year rebellion on the island of Bougainville and to secure one of the world’s largest copper mines. The plan backfired after local military leaders learned of the deal and staged a coup. (Spicer’s contract for $36 million dollars -- more than the country’s annual budget -- included providing two Soviet-made attack helicopters, several assault helicopters, six rocket launchers and grenade launchers, according to research by Brookings Institute military expert Peter Singer.)

Riots broke out, Prime Minister Julian Chan stepped down, and the government imploded. Soldiers apprehended Spicer at gunpoint, jailed him on a weapons charge, and then booted him out of the country amidst a fog of allegations that public officials had been bribed.

Despite botching the operation, Sandline demanded and collected an outstanding $18 million balance from new government in Papua New Guinea.

Sandline next appeared in Sierra Leone in 1998 as part of an effort to restore the government of ousted President Ahmad Tejan Kabbah. Spicer was accused of violating a United Nations and United Kingdom embargo on arms smuggling – punishable by up to seven years in prison. Prior to receiving the $10 million contract, Spicer is reported to have accepted $70,000 businessman Rakesh Saxena to bankroll a Sandline expedition to recapture Saxena’s Siera Leonan diamond and bauxite mining interests. At the time, the Indian-born Thai national was awaiting extradition to Thailand to face charges of embezzlement from a bank in Thailand and traveling on the passport of a dead Serb.

Sandline’s shipment of 30 tons of arms to Sierra Leone ignited a news storm in Britain after Spicer disclosed that British and U.S. officials had secretly encouraged him. The “Arms-to-Africa Affair,” as it came to be known, rocked Tony Blair’s government, triggered a high-profile British House of Commons investigation, forced the resignation of former British high commissioner in Sierra Leone, Peter Penfold, and elicited unsuccessful calls for Foreign Secretary Robin Cook to step down.

“Our attempts to uncover the structure, ownership, and business connections of Sandline were met with extraordinarily evasive answers by Mr Spicer,” states a government report. “A follow-up memorandum from Mr. Spicer was thin and opaque—and failed to provide a number of promised answers. Nevertheless, Mr. Spicer's business is not unlawful, and he is a British citizen with a record of service in the armed forces.”

In April 2004, around the time that Aegis received its mammoth security contract in Iraq, Sandline officially shut down. A notice on its website explained that the company was going out of business because of waning government support for peacekeeping missions. “Without such support, the ability of Sandline to make a positive difference in countries where there is widespread brutality and genocidal behavior is materially diminished.”


Both the Iraqi and U.S. governments have complained about the training and behavior of private contractors in Iraq. In an April performance review, SIGIR faulted Aegis’s compliance in five areas of its contract, including inadequate employee background checks and slack verification of qualifications and training. After sampling records of 20 of Aegis’s 125 Iraqi employees, the review concluded that the company conducted no police checks on 18 and failed to interview six; there were no records at all for two of the men.

"There is no assurance that Aegis is providing the best possible safety and security for government and reconstruction contractor personnel and facilities," concluded the audit, which recommended stricter enforcement of the contract.

The Iraqi Ministry of Interior has repeatedly complained about reckless gunplay by the private security convoys that barrel through densely populated cities with weapons waving out the windows to clear the streets.

Even U.S. military officials have chaffed that the increasing reports of indiscriminate shootings and other war crimes endangers their own troops. However, under an order issued by the Coalition Provisional Authority before the U.S. government officially departed Iraq in June 2004, all private military contractors are immune from prosecution in Iraq.

“They shoot people, and someone else has to deal with the aftermath. It happens all over the place,” Marine Brigadier General Karl R. Horst told The Washington Post in a September 10th story. “These guys run loose in this country and do stupid stuff. There's no authority over them, so you can't come down on them hard when they escalate force.”

Horst, deputy commander of the 3rd Infantry Division, which is responsible for security in and around Baghdad, said that between May and July, he tracked at least a dozen shootings of civilians by contractors.

Some private contractors argue that the dangers of a war zone necessitate shooting at, and possibly killing, people who turn out to be civilians. Since the violent resistance in Iraq makes little distinction between them and enlisted personnel, they say, contractors must act aggressively for their own protection.

The military itself has given mixed signal to private contractors in Iraq. In a major incident in May 2005, 19 security contractors working for Zapata Engineering were detained for allegedly shooting recklessly in the streets of Fallujah and nearly hitting U.S. forces. Later Marines searched, roughed up members of the convoy, and jailed them for three days without charges.

The Zapata contractors were released, but complained that the U.S. military had blacklisted and banished from working in the security business in Iraq -- although none ever was charged with a crime.

Another U.S. Army investigation last spring was based on an anonymous four-page letter detailing allegations of wrongdoing by the contractor USIS, according to a recent story in The Los Angeles Times. The letter writer accused USIS of deliberately reducing the number of trainers to increase its profit margin and detailed two incidents in which USIS contractors allegedly had witnessed or participated in the killing of Iraqis during the assault on Fallujah a year ago. (Private security contractors are not allowed to conduct offensive operations.)

The letter also claims that a USIS employee saw Iraqi police trainees kill two innocent Iraqi civilians, then covered it up. A USIS manager "did not want it reported because he thought it would put his contract at risk," according to the letter.

The head of the probe, Army Colonel Ted Westhusing, reported the allegations to his superiors, but told them that he believed USIS was complying with the terms of its contract. U.S. officials investigated and found "no contractual violations," and “these allegations to be unfounded, according to The Los Angeles Times. (Westhusing subsequently committed suicide, distraught over his experiences in Iraq)

Marriage Rules Without Divorce or Alimony

Brooks and his IPOA members know full well how such incidents and grievances feed into the image of private security workers as macho mercenaries unbound by laws of war or decency and loyal only to cash. IPOA has crafted a code of conduct -- now in its 10th revision -- that Brooks believes establishes self-regulation among IPOA members and "a deep sense of responsibility."

The rules call for "effective legal accountability," transparency, and dedication to the “greatest benefit of humanity.” IPOA members pledge to observe international human rights laws; cooperate with investigations of contract violations; and work only for legitimate, recognized governments, international organizations, non-governmental organizations, and lawful private companies. (Pelton says the rules resemble the "vows of marriage and without the divorce or alimony" noting that it is a self-adminstered code with no enforcement.)

IPOA now boasts of 18 member companies. All are in the business of war or post-conflict stabilization. Most are active in Iraq, specialize in providing armed security forces or training, and are staffed by former military personnel. Others provide expertise a wide variety of tasks traditionally handled by the military: de-mining, building, transportation, and equipment maintenance.

The conflicting views and the code’s legitimacy are now being tested behind closed doors as IPOA considers membership for Aegis. Given the track record of many private military contractors around the world, it may be that IPOA’s rejection of Spicer’s application has more to do with old-fashioned competition than with new-found principles. Indeed Spicer believes that criticism of him and the rejection of his membership bid "may be commercially and politically motivated.”

Mark Whyte, an executive with the British security company, Pilgrims, whose company protects business and media clients in Iraq, tends to agree with that conclusion.

“While I'm no personal fan of Spicer, this is little more than professional jealousy in my view,” Whyte said.

Pilgrims does not belong to IPOA and Whyte takes issue with some of the organization’s more politically-charged goals of nation building, but adds: “If you look at the values espoused by IPOA, I would say that Aegis is one of the few companies that actually try to live up to them in Baghdad.”

Whether that assessment is accurate or not, Aegis is certainly aiming to position itself as a respectable member of a legitimate industry. In addition to its bid to join IPOA, it has hired former U.S. and British government figures including Robert McFarlane, former national security adviser to President Ronald Reagan, Lord Peter Anthony Inge, former British chief of defense staff, and Nicholas Soames, former British armed forces minister. All hold advisory or non-executive positions.

"This is only just becoming an industry,” Mark Bullough, Aegis managing director, told the Financial Times on November 4, referring to the new appointments. “There has been a question mark over how respectable it is. Certainly the reassurance of the non-executive names offers an endorsement of our company and points of reference for people not used to dealing with the sector.”

David Phinney is a journalist and broadcaster based in Washington, DC, whose work has appeared in The Los Angeles Times, New York Times and on ABC and PBS. He can be contacted at: phinneydavid@yahoo.com.

Trust in One Cent

If you read the latest comment from the retiring Ryanite Alan Greenspan, he said, "the biggest cloud over America financial system is: trust, the present lack of thereof is troublesome."
The lack of trust is driven from the corporate boards feud to add one more cent per share to their earnings, just for the shake of sharing it among themselves.
Thus the linkage.
As side note, today the media covered the salaries of corporate board members has reached a all time high, included poor attendance records with astronomical give aways. Such arrogance with self-dealing is not healthy and the future price is too high and surely will back fire the hard way.
Gretchen Morgenson in the New York times has done a laudable job uncovering born or to be born crooked accounting techniques and its perpetrators in a few cases wanabes perpetrators.

There is too much infatuation with the money of corporatism and the new royalty it has created, as all monarchies, they become abusive, as we are seen today in Washington DC, and eventually if people are healthy and understand the ludricous behavior, the spade of Damocles and the wrath of Gods will come to demand their share of justice.

Why the Rich Get Richer

Another great article by one of my favorite personal financial writers.

Why the Rich Get Richer
by Robert Kiyosaki
Tuesday, December 13, 2005
Words have the power to make you rich -- or keep you poor. For example, you have to know the difference between an "asset" and a "liability." An asset is something that puts money in your pocket, and a liability takes money from it.
Take your house, for example.
"Our house is an asset," my poor dad would say.
But, my rich dad saw things differently. "Your house is not an asset, but a liability," he said.
You see, even though my poor dad thought of his house as an asset, the fact is that every month it took money from his pocket via mortgage payments, utilities, and upkeep.
Now my rich dad owned several houses. But instead of depleting his wallet, those homes were rented out. They generated enough income to cover his expenses -- with money left over. That's a true asset.
Now or Later?
In addition to "asset" and "liability," there are two other very important concepts you need to understand: "Cash flow" and "capital gains."
One of the reasons I was able to retire at age 47, and my wife, Kim, at 37, was simply because we had enough cash flow coming in (primarily from our real estate investments). It wasn't much -- about $10,000 a month -- but we only had about $3,000 in monthly expenses. That left us with $7,000 a month to do with as we pleased.
On the other hand, capital gains are when you buy a stock for a dollar, and it goes up to $10 so you make $9 a share. Or, you buy a house for $100,000, and it appreciates to $150,000. You sell it and make $50,000.
One of the reasons people do not become financially free is because most of them are focusing on capital gains rather than cash flow. Chasing capital gains alone is gambling -- not investing. Want proof? You don't have to go back very far to find it: Between 2000 and 2003, millions of investors lost trillions of dollars in the stock market.
"When you invest for cash flow," my rich dad said, "you're investing in a money-back guarantee. If you invest for capital gains, you invest in hope. The biggest thief of all is hope."
Most retirement plans are based on hope and promises stretched over many years. That makes very little sense to me, yet it seems to make a lot of sense to the millions of investors who are hoping the money they expect will be there at age 65.
There's nothing wrong with capital gains. I would like my properties and stocks to go up in value, but I don't play this game that much. My primary focus, like that of most successful investors, is cash flow -- not capital gains.
Powerful Combo
The key to financial intelligence is how to use both cash flow and capital gains to grow wealthy. So many people are not successful, because they're generally focusing on only one of the two. The majority is focusing on capital gains.
In my opinion, one of the primary reasons people invest in tomorrow, rather than today, is simply because they think they cannot find or afford an investment that pays them today. As a result, they often become believers in tomorrow. These are the people who often fall prey to financial predators selling dreams of the future.
As my rich dad said, "An investment needs to make money today and tomorrow."

The Science of One Stock Picker

I am the scientist and have lost my science!
As surprising as it might seem, this is the best it has happen since the evolution of the internet, scientists losing their science to the global community of services is such wonderful event, specially for living room amateurs like myself.
As individuals, in our living rooms, making a buck trading (or applying the law of the next sucker) we were comfronted with the constant threat of the asymetric knowledge and these are serious disavantages. The asymetric knowledge is build on the system of monpolized superior information by corporate greed supporters.
In fact, today many large trading corporations follow the moves of some of the larger systems of trading. The purpose of teh effort is to cannibalize on those opportunites. Watch out! If you are using trading method that is well advertized all over, and you have a hard time getting the promised results, you better be aware that some big boys are in it for the take, and your money is their play ground. You are their take.
As we continue this infatuation with risk by privatizing all support systems for our future, the stock market is the easiest way to gamble pensions and other assets. Thus, the need to learn some of the statistical help one can get for gambling in Wall Street with your money.
The kind of gambling that occurs with equities is more dangerous than playing Texas hold-en. When you engage Wall Street in your game, you are engaging the souless people in this planet willing to do anything to take your money and use any method force any law to accomplished. You will hear more stories of grandiosity than of terror, the fact of the matter is that equity trading has a ratio of 20 stories of deception for one of affection. The reason you hear the affection stories is becuase the people who get caught in the losing end are usually "small people" as Leona Hemsley put it and we are insignificant for the news, becuase we lose a little at the time, but when the winner of South Street call it, the win is or gargantuan proportions. As an example this year the average bonus for a middle to top management employee in the firms of Wall street is going to celebrate Santa with a check of two million plus. Do you hear well, two million for X-mas in bonus at an average, or playing with OPM. Well this guys are also the big spenders in lobbyst against minimum wage and secure pensions for the rest of us.
Let's put this out of the way and to the meat of the post.
If you plan to gamble some money in stocks, you must follow a few fellows tactitians who have done well with a few formulas. The first idea is: No all stocks react similarly to all markets conditions, thus some stocks are profitable using specific indicators to buy and take profits(sell). By using RSI 14 (.75-.25) for long an short entries some stocks demostrate excellent behavior others are just dogs, stay alert and narrow your winners to their most profitable and reliable mathematical behavior. Second some very bright guys have follow consistent methods and they have the accumulation of returns on their bank, my favorites screens are: Martin Zweig on value and growth, next is the neofacist O'Neill growth, then in "dull" markets like the present stagnant situation, Graham value and enterprising is the one method to follow. The difficulty here is to select the top winners of the three selection methods. This is where the science begins.
You can use the resources of msn.com screener or my favorite aaii.com. I also use Schwab screens as additonal tool. After I have a list I screen every single stock using investors.com ratings. But my final decision is to intuitively base my picks on going forward strength based on their fundamentals and people who manage the company.

Losing The Benefit of the Doubt

Every honorable person has the right to be believed honorable and trust-worthy of telling the truth. Every community gains the same right and every country is granted this gracious courtesy of diplomacy. Many people choose to lose their right to honor, and communities follow them and countries cave to powerful interests.
While fighting the corporate abuse predators and robber barons kings of their monopolies something back fired to this arrogant stance, residents of the North American colonies rebelled against corporate greed. Strong minded individuals and small business owners perceived and they were right to support their business, realized of the serious threat that the “Company” will do to them and took it to the streets. After incredible amounts of blood won the hard fought battle. The soldiers were send to fight the so called rebels, corporations always use the power of the military to fight rebels, and ended up realizing who they were supporting in many cases deserting. Armies in most cases succeed in suppressing the freedom fighters.
Today, we must be alert and recognized the fact of the power of corporations to kill for profit and they are unapologetic about using all citizen assets; from the rubber war of Viet Nan to the oil war of Iraq, stopping in the diamond war of Angola and the water war of Palestine and Israel.
There is not question power has corrupted individual and most importantly people’s leaders. The present motto of honor has truncate it into “if we do not get caught in the deception, then we are supreme.”
This not a new event or logic to justify dishonorable actions.
Such justifications come from a retired intelligence services people and other retired military individuals since Mesopotamia generals raid the land of Egypt and used methods that will seem incredible familiar today, six thousand years later the Roman leaders took great leaps and created the utmost despicable machine of people’s deception, and today we continue to be served with such tricks every single minute thanks to the communications advances.
Today, it is easy to see this logic in Fox News political and military commentators. Such candor expressed is a display to justify the insertions of bought “ true news” in Iraqi newspapers, the operation of secret jails and torture while denying they exist, black face killings under the idea of target killings, or the sophisticated wording of civilian “collateral damage” by American operators abroad. The tendency is justify every single item as do good. But in fact not all those justifications are seen equally and they are not a healthy way so show people the real good that can be developed with good will and
honesty. The distortions are a daily event, but reason must raise and fight to prevail, or redemption will not come easy.
Such unhealthy contentions to support deception are asserted as “the fact that we do all this unpleasant stuff is not important, the bad part if that we get caught,” a so called expert, continued saying on Fox News “secret operations are not for the faint of heart, many things we do they might seem bad and in fact they are bad, but you cannot get caught” his connotation was clear, doing bad things are a fact of secret operations, that’s why they need to be secret or people will revolt, we need to perfect how we do those bad things and do not get caught.

There is a clear popular stance that doing “what it takes” it is an acceptable position and procedures for most people do not need to be revealed, this acceptance ranges from enforcing illegal operations under the fancy name of “extraordinary renditions“ to the outright drug dealing with dictators, or support for corporations that break every single international law.

When such attitude starts to cross boundaries of human acceptance, it must be understood that without much warning this unhealthy behavior starts to cross dangerous borders of arrogance.
To arrive to such state of arrogance requires a blunt desire to disregard all common sense rules of decent behavior.

There is an evolving and growing displeasure with the acknowledgement that the American government due to actions that are unacceptable, even for the most fanatic supporter. It is becoming “too much.”
This is nothing new among leadership, some roman emperors were the creators of present populace manipulation, master popular manipulation to the extend of self-destruction, and we might be witnessing it if we do not start to recant some of the present accepted social behaviors instilled by leaders.

Business As Usual: Corrupt

Below is an wonderful article about our present American reality.
Kisnley is a wonderfull human being a witty writer and thoughful American. On its article one can read the underling malasie we are getting too use to accept as matter of fact.
When you lose the benefit to be doubted, as is happening today to American leaders, it is an indication your ways are so corrupt. Today, the most capable negotiatior representing Amrican interests encounters resistance for teh most simplest negotiation. Therefore, it is an indication of your ways been tremendously corrupt and becomes too late for redemption. This is the earth grounded reality that many good-doers are encoutering around the planet, under the burden of qualifications the present American admistration.
A very sad and radical and poor image driven by fanatism and uncontrolled absolutism under the flag of nationalism. You cannot find common ground when you fight your adversary, fighting brings never ending revenge, there is not pace in fighting.


Business As Usual: Corrupt

By Michael Kinsley
Friday, December 2, 2005; A23

It used to be said that the moral arc of a Washington career could be divided into four parts: idealism, pragmatism, ambition and corruption. You arrive with a passion for a cause, determined to challenge the system. Then you learn to work for your cause within the system. Then rising in the system becomes your cause. Then, finally, you exploit the system -- your connections in it, and your understanding of it -- for personal profit.

And it remains true, sort of, but faster. Even the appalling Jack Abramoff had ideals at one point. But he took a shortcut straight to corruption. On the other hand, you can now trace the traditional moral arc in the life of conservative-dominated Washington itself, which began with Ronald Reagan's inauguration and marks its 25th anniversary in January. Reagan and Co. arrived to tear down the government and make Washington irrelevant. Now the airport and a giant warehouse of bureaucrats are named after him.

By the 20th anniversary of their arrival, when an intellectually corrupt Supreme Court ruling gave them complete control of the government at last, the conservatives had lost any stomach for tearing it down. George W. Bush's "compassionate conservatism" was more like an apology than an ideology. Meanwhile, Tom DeLay -- the real boss in Congress -- openly warned K Street that unless all the choice lobbying jobs went to Republicans, lobbyists could not expect to have any influence with the Republican Congress. This warning would be meaningless, of course, unless the opposite was also true: If you hire Republican lobbyists, you and they will have influence over Congress. And darned if DeLay didn't turn out to be exactly right about this.

No prominent Republican upbraided DeLay for his open invitation to bribery. And bribery is what it is: not just campaign contributions but the promise of personal enrichment for politicians and political aides who play ball for a few years before cashing in.

When Rep. Randy "Duke" Cunningham pleaded guilty this week to accepting a comic cornucopia of baubles, plus some cash, from defense contractors, the vast right-wing conspiracy acted with impressive speed and forcefulness to expel one of its most doggedly loyal loudmouths and pack him off to a long jail term. Even Bush, whose affable capacity for understanding and forgiveness on the personal level is one of his admirable qualities, seized an unnecessary opportunity to wish the blackguard ill. There was no talk of "sadness" -- the usual formula for expressing sympathy without excusing guilt.

This astringent response would be more impressive if the basic facts about Cunningham's corruption hadn't been widely known for months. The San Diego Union-Tribune reported in June that a company seeking business from the Pentagon had bought Cunningham's Southern California house from him, held it unoccupied briefly and sold it -- in the hottest real estate market in human history -- for a $700,000 loss. You didn't need to know that Duke's haul included two antique commodes to smell the stench. Yet all the Republican voices now saying that Cunningham deserves his punishment were silent until he clearly and unavoidably was going to get it.

Like medieval scholastics counting the angels on the head of a pin, Justice Department lawyers are struggling with the question of when favors to and from a member of Congress or a congressional aide take on the metaphysical quality of a corrupt bribe. The brazenness of the DeLay-Abramoff circle has caused prosecutors to look past traditional distinctions, such as that between campaign contributions and cash or other favors to a politician personally. Or the distinction between doing what a lobbyist wants after he has taken you to Scotland to play golf and promising to do what he wants before he takes you to Scotland to play golf.

These distinctions don't really touch on what's corrupt here, which is simply the ability of money to give some people more influence than others over the course of a democracy where, civically if not economically, we are all supposed to be equal. So where do you draw the line between harmless favors and corrupt bribery?

It's not an easy question if you're talking about sending people to prison. But it's a very easy question if you're just talking: The answer is that it's all corrupt bribery. People and companies hire lobbyists because it works. Lobbyists get the big bucks because their efforts earn or save clients even bigger bucks in their dealings with the government. Members of Congress are among the world's greatest bargains: What is a couple of commodes compared with $163 million worth of Pentagon contracts?

Perhaps conceding more than he intended, former Democratic senator John Breaux, now on K Street, told the New York Times that a member of Congress will be swayed more by 2,000 letters from constituents on some issue than by anything a lobbyist can offer. I guess if it's a lobbyist vs. 1,900 constituents, it's too bad for the constituents. That seems fair.

kinsleym@washpost.com

The real outrage: pensions, not petrol

Another great piece in the subject of wealth and pensions by William Fleckenstein and a good follow up to the prior one by Bob Kiyosaki.
If you have not read Robert Kiyosaki books, I will suggest you read every single one, they are very helpful and they illustrate the need for awareness on the value of accumulating wealth.

My personal interest on pensions has to do with my believe and personal views about the value of community and the social structure of a community as support system for evolution.
I am seriously concerned about what I see in people's attitudes in non-challange way to neglect the weakest. This is accomplished by the use of fallacies and religion as tool to supress teh inmorality of their actions with weekly cleanings of their wrong doings. The justification are insane, in fact it is totally contradictory to what the preach, this arrogant stance has consequences. We all deserve the punishement for this outirght darwinian behavior. We are allowing to continue to thrive rapantly and unchecked.
It will not take much imagination to see all the present corruption that surround us from government elected officials to thier cronies in a rush to pilfer anything at the reach of their hands.
All this greed running amok is not sustainble. The present situation is arrogant and outright acceptable about stealing from any vulnerable person or institution.

***

The real outrage: pensions, not petrol

Forget all the hoopla about oil price gouging; markets set oil prices. For real cases of rich execs cheating real people, study what they're doing to corporate pension plans.

By Bill Fleckenstein

Outrage is an emotion that's always intense -- but not always justified. This week's column will take a look at both kinds, as it swings from the oil patch to the pension-accounting arena. First off, a rant on the lunacy surrounding the fact that oil companies are making money.

The weather vanes in the Senate have held hearings about oil-company price manipulation. There has also been plenty of incoherent chatter about price gouging, much of it coming from TV talking heads who ought to know better.

To begin with, the price of oil is set in the marketplace. The Russians, Canadians, Mexicans and OPEC generically have a hell of a lot more to say about the price of oil than do our domestic oil companies.Start investing with $100.
Explore our
new ETF center.



The price of oil is up thanks to money-printing by the Fed and every other central bank, which has triggered the global boom that everyone seems to love. People drive Hummers and other urban-assault vehicles, yet they expect the oil companies not to make money, as though they were charitable institutions?

'Home'-free from scrutiny?
Amidst the talk of taxing the oil companies on windfall profits, why isn't there a windfall-profits tax on the home builders? Why aren't there any hearings about price gouging in real estate? How come nobody complains about the price of bottled water being as expensive as it is? Because they don't see water companies making a whole bunch of money?

And how come the public never complained about Microsoft's (MSFT, news, msgs) price-gouging practices, as it had monopoly status in operating systems? Or when Intel (INTC, news, msgs) was the only game in town and able to charge whatever it felt like charging? Microsoft (publisher of this Web site) and Intel are the reason why PC prices aren't 50% lower than they are. The public didn't complain about that. Why? Because they were giddy about making money speculating in their shares.

Greed and broken promises
If the Senate and TV commentators want to be outraged, why not look into the real abuses occurring in the somewhat obscure pension-accounting arena? It essentially impacts only a few dozen large corporations, but it affects hundreds of thousands of lives.

What prompts this discussion: three well-written articles in last week's New York Times and Wall Street Journal that point out:


The potential problems for the folks counting on the past promises of these corporations.

How the corporate chieftains running them can jigger their pension assumptions to make their companies' earnings look good.
Of course, the two groups don't have their interests aligned. Those running the show have an entirely different agenda -- to boost the stock they hold options on, and probably their bonuses -- even if it puts all these hundreds of thousands of people at risk. It's a classic case of greed and broken promises.

The inflate-the-rate elixir
Probably the best primer on how the "math" works was "Pension Inquiry Shines Spotlight on Assumptions," an article in the Nov. 9 Wall Street Journal. It led off with General Motors (GM, news, msgs) because the SEC is now looking into the assumptions used in its pension accounting.

The article pointed out that there are two ways to make your results look better. One is to pick a high "assumed rate," which is the rate of return you expect your pension assets will yield. (Until 2002, GM had assumed 10% and has recently taken it down to 9%.) The second way is to manipulate the discount rate used to put a value on your future liabilities. The higher the rate you use, the lower the present value of that future liability looks and the more stable you appear.

The discount rate GM uses is 5.75%, down from 7.8% in 1999. A 25-basis-point (0.25 percentage point) change in the discount rate would impact its pension liabilities by $160 million. Similarly, a 25-basis-point change in the expected rate of return would affect GM's obligations by $220 million.

An example of how that was used to the benefit of corporations -- and to the detriment of workers -- was noted in "Pension Accounting Rule, Sometimes Murky, Is Under Pressure," a Nov. 8 New York Times article: "In 2004, for instance, Lucent Technologies (LU, news, msgs) said it earned $1.2 billion from operations. But $1.1 billion of that actually resulted from pension calculations." As you can see, moving these numbers around can change your results quite dramatically.

No-can-do candor
The New York Times article passed along another nugget to show the size of the potential discrepancy: "Last summer, the Securities and Exchange Commission said that it had studied a sample group of companies and found that they had told their shareholders they had an aggregate surplus of $91 billion in their pension funds, when a more honest accounting would have shown an aggregate deficit of $86 billion." (The emphasis is mine.)

Now, I don't know exactly what the words "more honest" mean. Nor do I know how real-world those calculations might be, as the numbers could be better or worse. If I had to guess, they would be worse, but, in any case, the size of the discrepancy is already quite large.

IBM (IBM, news, msgs) was a serial abuser of those same variables. The Times story noted that the company's reported earnings for 1999 to 2003 would have been reduced from $36 billion to $21 billion, "once the pension effect was removed." The article also pointed out that by putting more money in riskier assets, the plan sponsors can thereby justify higher assumed rates of return, thereby making the current levels of funding look better, thereby raising earnings and helping the bosses' narrow self-interests.

In the end, these strategies almost certainly place all the people in the plan at greater risk. But by then, the executives will be long gone -- and living large on the money they "earned" while pulling these levers.

Pension cop tails GM
When the chickens come home to roost, companies wind up (if things get bad enough) at the door of the Pension Benefit Guaranty Corp. According to another article in the Nov. 9 Wall Street Journal, titled "Pension Agency Casts Shadow on GM Sale," the PBGC, which partly guarantees defined-benefit pension plans, is concerned that the automaker's plans are underfunded to the tune of $31 billion, as opposed to being fully funded, as GM asserts.

The PBGC calculations don't even vary any of the overly optimistic assumptions I've already discussed. The agency arrives at its determination by assuming that GM's plans are terminated today instead of on some future date.

Grubby paws vs. pensioners' cause
The actions by the PBGC may cause headaches for Kirk Kerkorian, the investor who's been assembling a large stake in GM. As the Journal article noted: While GM is hoping to raise $11 billion to $15 billion by peeling off a stake in its consumer-finance arm, the agency may force the company to put some of the proceeds into the pension plan. That's probably something Kerkorian and other GM bulls hadn't counted on, as the stock is now lower than it was before he first showed up back in May.

To repeat, these problems only pertain to certain companies. But they do turn out to matter to plenty of people. This example of greed and broken promises is the type of behavior that gives capitalism a black eye.

Bill Fleckenstein is president of Fleckenstein Capital, which manages a hedge fund based in Seattle. He also writes a daily Market Rap column on his Fleckenstein Capital Web site

Why the Rich Get Richer

I found this article by Roberth Kiyosaki to be a good copilation of knowledge on retirement. Each person should add some present knowledge of the situation of many presetn retirees, with that at hand, most people should have clear picture of what to expect in their late days on life.


Why the Rich Get Richer
by Robert Kiyosaki

So Long Pensions, Hello Fees
by Robert KiyosakiUtility Links

Tuesday, November 15, 2005

From 1945 to 1974, the Western World -- including America - was more socialistic than capitalistic, more pro-labor than pro-business. While that may sound surprising, when taken in context it makes perfect sense.

World War II had just been won and the Great Depression was still fresh in most Americans' minds. Having lived through these challenging times, Americans wanted a more benevolent, worker-friendly government. And they weren't alone. In England, Winston Churchill lost the 1945 election -- even though he was a war hero -- primarily because the English people wanted a pro-labor government, not a pro-capitalist government. Back in the U.S., President Franklin Delano Roosevelt's pro-worker policies were already in place, including the New Deal and Social Security.


This trend began to shift in 1974 with the passage of the Employee Retirement Income Security Act (ERISA). Under ERISA, companies were allowed to switch from defined benefit plans to defined contribution plans. Simply put, the primary responsibility -- as well as the expense and long-term consequences of retirement -- passed from the employer to the employee. As a result, pension plans gave way to self-managed plans like the 401(k) and Roth IRA.


Retirement Investor, Meet Wall Street


One might think that employers were the biggest beneficiaries of the changes ERISA put in motion over three decades ago, but I'd argue that biggest beneficiary was actually Wall Street.


Let me explain.


When I buy a piece of real estate, I may pay a 6 percent commission once. Even though I make money every month for years from my investment, I still only pay my real estate broker once. If I sell, I may or may not have to pay a commission. The choice is mine.


Yet when I invest in mutual funds (the vehicle of choice for most retirement plans), I very often pay a commission, or "management fee," every month -- even if I lose money.


Now I'm not against paying fees or commissions -- as long as I'm making money. But I do have a problem paying commissions or fees every month for bad advice. And most mutual fund advice has been bad, especially since March of 2000.


The Feeling Isn't Mutual


In his book "Unconventional Success," Yale University Chief Investment Officer David Swensen writes, "Sales charges from buying funds and tax burdens from churning funds combine to reduce already poor investor returns. Owners of actively managed mutual funds almost invariably lose." He goes on to say, "Other factors -- unethical kickbacks and indefensible distribution practices -- remain generally hidden from view."


Swensen also quotes a 20-year study which examined mutual fund returns over two decades ending in 1998. The study shows that over two decades mutual funds had miserable returns, an average shortfall of -2.1 percent when compared to the Vanguard 500 Index. And, the study ended in 1998 near the highs of the market!


In other words, most mutual fund managers cannot beat a mechanical method of investing, such as an index fund. But that doesn't stop them from regularly collecting "management fees."


In fact, says Swensen, the fees themselves are one reason many mutual fund managers don't manage to beat index funds. "A significant portion of the ... underperformance arises from the payment of management fees," he writes.


So if you're thinking about parking your retirement money in a mutual fund, be sure to ask about commissions and management fees. Or, even better, consider an index fund.

Proverbs and Sayings Save Energy

One of the healthiest ways to live a healing life is in parallel with a series of well known advice from our ancestors. Via proverbs sage people have ruled in wise ways. Present economic implications have direct link to energy savings and those proverbs. A little change in our daily modus operandi following the sage advice of the past might prove to be an enriching experience.
A few classic old proverbs to prove my point:

“Rise with the sun and rest with the sun and your wealth will abound.” I will add here the obvious if there is no much need for electricity you will save a few bucks every day. Natural light will also provide the much need it vitamins for a good looking and healthy skin.

“Read to your soul to gain in your brain.” Well, and easy one here no more TV for a while, and pick one of the many greatest authors from your local library and enjoy the ride.

“Dress me slowly that I am in a rush, I need to walk far away.” This one came to me from my great-grandmother. In the process I learned physics and it proved her right. Walks farther and slower you will save in gasoline and keep better cholesterol levels. Clearly, we all need to walk farther and often, and we do not do so, if as a community decide that all we need must be in walking distance, we can revive our local economies, supporting local businesses and healthier lives. A very simple equation, it supports a better tomorrow.

If you find proverbs and sayings to be entertaining, find a book at your local library and enjoy!