Sunday, November 30, 2008

Bailout..What the Hell For?

AIG, Banks, etc..Bailout of Banks and Finance Companies all getting the handout from the Government. Now Auto companies are asking the same thing. What Gives? How does this impact you and your wallet? Well for starters, people are mad about this handouts, but this aint the first time. The Government ALL READY gives out welfare for Businesses, and Individuals. These entitlements are about 60%-70% of the existing Federal Budget. We keep thinking that the Government has an unlimited supply of money, it owns NOTHING.

Now how does this impact your wallet? It reduces the value of the dollar in your savings. This is why you need to be an investor. As long as money is being spent by the Federal Government (unconstitutionally by the way), you dollars will go down in value. This causes a general rise in prices..aka inflation. When investing, you must beat Taxation and Inflation. These to twins in crime reduce your ability to invest. So when the President says,"I will invest into infrastructure or whatever FREE BE; stop and think. How is he investing into this project? Where is the money coming from? Is it coming from Private investors? The answer the Owns Nothing, it gets its money from the its citizens viz a viz taxation.

Why not allow its citizens to invest the money themselves? Why cant we learn about investing and do it ourselves? It has already been proven that most money invested on our own will out perform Social Security? We should be able to invest in our own hard earned cash? Why cant we as citizens make their own Changes? Every dollar the Government spends, we lose the ability to be able to spend for ourselves or invest for our families.

My hope is that President Obama and Congress will allow us citizens to invest into our own infrastructure. My guess is that President and Congress will NOT allow this. Absolute Power corrupts absolutely. I dont see President Obama or Congress allowing the Citizens the choice to make our own "Change".

So with these bailouts, why not allow give the citizens and small business owners a bailout? Allow us to keep more of out money by reducing taxes and getting out of our wallets. With this Tax Bailout, we can save and invest for the future. Businesses AND individuals should not be rewarded for bad choices. Even if those choices where FORCED by the Iron hand of the Federal Government.

Saturday, November 8, 2008

Hope,Change President Obama and Taxes

Congrats to our President Elect Mr. Barack Obama. His history making performance on Tuesday will be remembered for many for years. The first US President that is an African-American is an embodiment of the American Dream and our great Nation. Martin, Fredrick, Malcolm, Booker T are beaming with pride with this accomplishment.
Now that he will be our new President, what does this mean for your wallet? Hope and Change is great, but the bottom line is your financial future and your family's future; regardless who is President. My major concern is about the Tax Cuts from 2001 and 2003. This topic was the centerpiece of this year's campaign. These Tax Cuts will expire in 2011. So lets explore how these Tax Cuts could impact your wallet in the world of Taxes and Qualified Retirement Savings Plans.


While Taxes are a necessary evil, we must pay them in order to keep our Country's Government strong. Citizens are currently receiving the lowest Income Tax liability since..well a long time. The Tax Cuts from 2001-2003 allowed a large majority of Americans to receive a cut in their income taxes liability. In some cases, folks received stimulus checks BACK from the government. These tax cuts benefited mainly middle class Americans since the "Rich" pay the majority of the Federal Income taxes. Here are a list of the key highlights of what WILL happen when these Tax Cuts are reversed(thanks to the Heritage Foundation and the IRS for this data):
  • Tax rates will rise substantially in each tax bracket, some by 450 basis points;
  • Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate;
  • Married taxpayers will see the marriage penalty return;
  • Taxpayers with children will lose 50 percent of their child tax credits;
  • Taxes on dividends will increase beginning on January 1, 2009;
  • Taxes on capital gains will increase, also beginning on January 1, 2009; and
    Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.

It seems to me that most Americans don't mind paying taxes, but just their "Fair" share. If presented the choice to pay MORE in taxes; compared to LESS in taxes; the answer is obvious.

Qualified Retirement Plans

With these Tax Cuts, Americans are currently allowed to have increased contributions to the their Qualified Retirement plans. This is a plus because currently Americans have a negative (-4%) savings rate. When the Tax Cuts expire in 2011; 401(k) plans, IRAs, etc will go back to their original annual contribution limits. For example, the current contribution limit to an IRA is $5k -$6k as compared to $3k in 2002. Why is this important? With the cost of living rising aka inflation, Baby Boomers will NEED MORE money at retirement. Financial Experts say most people need a MINIMUM of $1,000,000 in your retirement accounts to survive at retirement. If these tax cuts are reversed,this means that Americans will have less to place in their retirement plans. With less money contributed to these plans, the chances of having more money receiving Tax Free Compounding decreases. The net result: less money for Retirement.

Also, most of the wealth is in Home Equity and 401(k) plans. Upon withdrawal of the money in the 401(k) plans, these funds will be taxed as ordinary income. If these tax cuts are reversed, many Americans will lose a large portion of their savings to Taxation and Inflation(created mainly by the Federal Reserve and Government Spending). The real question for these account holders is this; how long will it take to run out of money for retirement? The answer to this question could be a scary thought.


In summary, these tax cuts impact our personal finances. All of us pay taxes, this fallacious talk about taking from one class and giving to the other class is a form of thievery. As per Article I of the Constitution, it is Congress' responsibility to levy taxes on its citizens. The problem is not paying for taxes, the problem is we are paying taxes for items not Legally listed in the US Constitution. We have expanded the size of this problem and Government from each administration regardless of political party. The more Government spends and taxes, it takes money from every American's pocket regardless of Economic class. This translates into a widening gap between Rich and poor; and the elimination of the middle class.

With the reversal of these tax cuts, the Middle Class and poor will need to have other solutions in order to save for retirement and build wealth. I hope that President Obama does NOT Change these benefits from these Tax Cuts. I Hope that Congress does not CHANGE the benefits from these Tax Cuts. Otherwise, it will be extremely difficult for many Baby Boomers to retire with financial dignity. In the meantime, go to for your FREE financial Reports for the secrets of winning for Retirement REGARDLESS what Congress and the President decide to do.