Economic Wisdom of Abraham Lincoln

"You cannot help the poor by destroying the rich.

  You cannot strengthen the weak by weakening the strong.

  You cannot bring about prosperity by discouraging thrift.

  You cannot lift the wage earner up by pulling the wage payer down.

You cannot further the brotherhood of man by inciting class hatred.

You cannot build character and courage by taking away people's initiative and independence.  You cannot help people permanently by doing for them, what they could and should do for themselves."

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Honk If you’re paying my mortgage!

I just heard about this bumper sticker on this news site and think it’s awesome.

To summarize a portion of the article:

• The history of mortgage workouts is that most don't work: Even in "normal" times, more than 50% of mortgage workouts become problem loans within six months. And these are definitely not normal times.
• Jobs and income and the primary concern: You can lower mortgage rates to zero but the vast majority of Americans won't be able to make payments for very long if they don't have a job. Friday's jobs report is expected to show another 650,000 jobs were lost in February and the jobless rate rose to 6.9%.
• Home prices are still falling: There little incentive for people to borrow money (at whatever rate) to buy a depreciating asset, and Sonders believes home prices have another 10-15% to fall nationally before finding a floor.

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My Response to Jim Cramer’s Response to the White House

Jim Cramer, commentator for TheStreet.com and host of Mad Money With Jim Cramer, wrote an article today in response to the White House’s scathing rebuke.

He had some very good points and it’s worth every minute of the read.  I do have a response to Cramer’s response and I think Cramer is a little misguided in his hopes for what Obama will or won’t do.

Obama doesn't want people to be rich and wealthy because then why would they be dependent on the government? Without government dependence, the government's role will decline and power will shrink. Washington has every incentive to not allow this to happen.  Obama is dead set on ruining the US economy in whatever fashion he can to increase the dependent roles of this country to the point that only through political power will one be wealthy.

Look at the major banks that have been "bailed-out"- they all have contributed large sums of money to politicians and many have participated in the revolving door in Washington by now working in high positions of the government.

The best thing for main street would be to reinvent the government to which they are slaves to. As Thomas Jefferson has said, “Whenever any form of government becomes destructive of these ends life, liberty, and the pursuit of happiness it is the right of the people to alter or abolish it, and to institute new government...”

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Dilbert on Bailout Hearings

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Wise/Ignorant Gap

I was recently reading a blog post over at My Open Wallet and began thinking about the much publicized rick-poor gap and the line of reasoning that goes that the wealthier individuals of society should be taxed at a higher rate until the gap shrinks.  This prompted me to start thinking that everyone always focuses on the rich/poor gap.  But what about the wise(smart)/ignorant(stupid) gap?

Should we not reward those who are smart and fuel our economy be creating wealth and jobs by lowering the tax they and their companies pay?  In reality companies don't pay tax anyway, their customers pay it in higher price goods. 

Governments traditionally use taxation as a means to discourage unwanted behavior and in many cases provide a financial means for the government to take care of the side affects of such harmful behavior (i.e. cigarettes and cancer).  Why then, do we buy into the logic that taxing the productive citizens of our country at a disproportional rate and funneling wealth down to the least productive citizens, is anything other than the opposite of what government should be encouraging?  I agree that some inequality is going to exist and that to a certain extent, there is a common good that must be taken care of.

Engineering a system whereby the less wise citizens pay a higher premium (tax) for their lack of productivity and wealth creation seems to reward the right type of behavior that would be good of society, rather than punishing the productive citizens with larger tax burdens than their counterparts.  Maybe a system that taxes users through sales taxes would be the most fair as companies and individuals choose to spend money and buy items.  Those that choose to spend more would be taxed at a higher rate than those that spend less.

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Failing at New Years Resolutions?

It’s around this time of year that resolutions are starting to fall apart and fail.  The work week for many is now underway and the pressures of life are just too many to try to also squeeze out self improvements with an already busy schedule.  In making my new years resolution this year, I am trying a couple of things differently than previous years.  Not that I ever really made serious resolutions before (I always thought they were kind of cheesy- made for breaking), but this year, I am really feeling that it might do me some good to write down what I want to have accomplished in 365 days from now; 14,600 hours from this moment.  By having an action plan, I can have those around me keep me accountable.  By writing down my resolutions, I will be much more likely to accomplish anything than if I just leave them up to chance.

One quote that a friend recently gave me, which is guiding my resolutions this year is, "in five years you will be the same person except for the people you meet and the books you read."  What a scary thought!  The fact that in five years I will not have changed or become better at anything is a big motivator!  The possibility that I might stay the same after being given 14,600 hours of life is just plain wrong.

Now, looking back over the past 2 years, I can’t say that I've read that much or that I have really even changed that much.  So, I guess it’s time to put this advice to work and make some resolutions.  So, here it goes for my list of new years resolutions:

1. Complete 5 more MBA courses (with only 4 remaining after that!)
2. Completely pay off a car loan (only 4 more months!)
3. Read more…. for enjoyment, personal development, education, and spiritually.
4. Write more.  I hope to be contributing to this blog much more frequently on a more diverse set of topics than in previous years.
5. Build on my resume by earning a professional certification
6. Save and Invest more dutifully for our future

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Top 5 Year End Financial Tasks

1. Using the IRS Withholding calculator, take your latest paycheck(s) and determine if you have had enough withheld for taxes.  With this being the last day of 2008, it is the last day to contribute to a charity or make other financial contributions which could lower your tax liability.  Wouldn’t you rather give to your favorite charity rather than the government?

2. With #1 in mind, now is the perfect time to start or contribute to a IRA.  There are two main types of IRAs: Roth and Traditional.  You can learn more about them here.  The decision factor is that by contributing to your retirement, you can lower the amount of money you might owe the government when it comes time to file your taxes.  This means you are essentially investing in yourself as oppose to giving money to the government.

3. Create a “State of your Finances Report” that outlines all your assets and debts at this given point in time.  You can do  this electronically in Word or Excel, or on a sheet of paper, which ever you prefer.  One neat site that I have started using with past year is Mint.com.  It will accomplish the same thing and help you maintain financial stability.  What you want to accomplish is to see a summary of where you are financially so that you can be better informed to plan for the future.

4. If you created goals or a budget for your financial health this past year, review them in light of your State of your Finances Report to see where you fell in light of your goals.  Next, make financial goals and a budget for the year 2009.  Microsoft has a good budget example in excel here.  A few questions to get you started are: How much debt do you want to pay off?  How much in emergency savings do you want to build up?  What investments do you want to participate in (may be financial, personal development, etc)? 

5. In order to stay on track financially, schedule to review your goals and your finances 4 times over the next year (once a  quarter, or more frequently if desired- its up to you).  This will allow you to modify your goals or behavior before 2009 is over and ensure that you can hit your goals.  For years I did this using Microsoft Excel.  More recently I have moved to Mint.com where I can keep a more up-to-date view of the status of my finances.  If you use the budgeting feature of Mint.com, it will require a lot more work to keep up with (1 hour a week) as you will need to classify each expense according to the appropriate budget category. 

I know finances can be overwhelming but know one is going to be as concerned for your future as you.  So “grab life by the horns” and dive in!  Send me a message or any questions and begin the transition to financial health and a successful 2009!

Happy New Year Everyone!

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Job Satisfaction

During the holidays we see lots of people and family we have not seen in a long time and we try to catch up on life for the time we have been apart.  Questions like, "what's new?", "how is your job going?", "how is school going?" are posed in attempt to uncover life between meetings and to bridge the past with the present.

After hearing answers to "how is your job going" from many of those family and friends, there seems to be a lack of satisfaction in many jobs.  Contentment seems to be missing.  In searching to find solutions, an article by Richard Miller popped up.  Miller has some truth to his article, but do you think it's too simplistic?

Recently at work I was ask the question "do I enjoy my job?"  For most of us that would be a simple question, but it caused me to do a lot of reflecting.  So...I thought I would share some of my thoughts.

Over the past few years, I have discovered that seeking enjoyment in our job really cannot be found. The job will never provide the enjoyment that any of us seek. That is the real mystery. Many of us might say we do but there was something or someone that prevented us from enjoying it more. “If only I could do this…" “If only this person did this…" The list would go on all falsely claiming that if somehow this one thing was fixed, then I would truly enjoy my job. But the reality is that if you correct that one  thing something else would fill its place. After leaving management, I realized that the one big mistake that I made was attempting to fix every complaint my staff had. Instead of only dealing with those that were personnel issues around competency and conduct. After the fact, I realized that most people needed to complain at some point to deal with stress. Some more than others, in fact, there are some people that would not enjoy their job if they didn’t have something to complain about.

True lasting enjoyment will not come from the job. What we do is temporal at best? It effects the immediate, the next few days, months and perhaps years. But few of us will have a lasting effect 50 years from now except with our children. Most of us have a need to feel we are contributing and then mistakenly assume that contributing translates to enjoyment. Enjoyment is a gift from God and cannot be found in things or activities. Look around, why are so many people in our society chasing after material possessions and once they have them still can’t enjoy them. Why are so many people driven by ambition to climb the corporate ladder and once they get the title still can’t enjoy life. Seeking enjoyment in our work can be a dangerous motive.

With all that said, it seems to me the question really should be “Are you content with your job?" Contentment is a byproduct of God’s gift of enjoyment. Contentment with your job allows you to deal with the ever-changing workload. Contentment allows you to deal with the discrepancies of your fellow employees. Contentment allows you to handle the unknown with a smile. Contentment with the job translates to contentment with all of one’s life. That then makes dealing with the stress much easier. Anger is less likely to find a home in the heart of the content person. I know my answer is more philosophy based than personal but that is who I am. I want to approach life as a whole and over the last few job changes I have learned a lot about the true source of enjoyment. That source is my relationship and commitment to Christ.

Am I saying that you can't enjoy your job?  Absolutely not, I am saying that enjoying your job will come through the commitment to Christ and His blessings.  We can not achieve it by what we do on the job, though our society would tell you otherwise.  We need to strive towards contentment which produces enjoyment, but we need to realize that comes from God and seeking Him.  It does not come from being a workaholic.

I'd love to hear your thoughts.

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