As Congress and the President debate whether to allow the government to force taxpayers to pay more interest on a rapidly increasing debt, President Obama is now not sure whether the government can send Social Security checks in August 2011. You folks who deeply rely on the meager $24K (at best) per year in social security payment to survive are now getting a bit nervous.
The President’s rhetoric revealed once and for all that there really is no social security trust fund (or how could it be out of money), and that social security truly is a government-backed Ponzi scheme. Your money is not saved for you, it is already spent. For all those that cry that they have “earned” it, I have news for you; you earned nothing! If you invest, then you earn. In fact, more money is spent than is being paid into the social security system. With the report on July 12, 2011 showing that less children are being born in America, and Baby Boomers sucking the entitlement teat dry, it’s time you start believing in the Capitalist way for retirement and not the fearful “slave to the government way” of survival until death.
The biggest stone dragging down the economy are so called “entitlements” such as Medicare, Medicaid, and of course, Social Security, and the government has yet to figure out how to cut these programs without upsetting those that didn’t save or consider their own health needs in the past. Do some need these security nets? Yes – America is a great country and should take care of our truly needy. If social security was re-established to be more like the Federal Employee Retirement System (FERS) an excellent government program that is in essence, a 401K program for government employees, people would be investing more into government-backed savings program that Congress couldn’t touch. You would definitely get more out of it then the current failing system.
I, for one, don’t care if we cross an imaginary line of August 3rd with no debt ceiling agreement. Businesses will keep doing business. The stock market may fall, but then I can pick up some stocks at a bargain. I really didn’t figure social security in my planning at all. Yes I pay into it, but only because I am a law-abiding American citizen. I also believe that great nations also need security nets for those that truly need them. What I don’t believe in is the President’s ideology that business is bad and punishing the wealthy is good. I don’t believe that revenue is increased by raising taxes, but rather by increasing the tax base at existing or lower rates. I believe that in America, the individual should not be punished for creating the means for others to have a job. When a worker believes that they made the business owner wealthy rather than the owner providing them a J-O-B, then that worker needs to quit in protest, and then figure out how to start their own company or find some other means of income. Nobody is being exploited here. As far as President Obama’s attack on those wealthy few who buy corporate jets, he has quickly forgotten about the tens of thousands of middle-class employees who build airframes, avionics, electronics, and all the other components that go into making that aircraft. He needs to stop bashing the wealthy that actually create jobs, or for wanting to buy things that keep people employed!
So how can you and I create wealth and thrive in retirement? Just use a philosophy that is completely opposite of how the government operates. This philosophy comes from one who ran a business and became extraordinarily wealthy by the age of 40, and rebelled against a tyrannical government that believed people should be ruled from the top, and not empowered to make their own decisions. This person was not an inexperienced “community organizer”, but a diplomat, statesman, founder of a university, and creator of a nation. Instead of the failed Socialist philosophy of Marx, Lenin, and Obama, try a good dose of Benjamin Franklin.
In a previous post I used a great quote from Benjamin Franklin on how to best help the poor: “I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”
Ben Franklin’s observation rings true still. When a Republican dominated 104th Congress created the Personal Responsibility and Work Opportunity Act, and signed by President Bill Clinton, welfare caseloads dropped substantially, from 5.5% of the total U.S. population in 1994 to 2.1% in June 2001. That meant more people on the tax rolls, earning income, and hopefully saving.
So how do you define your successful retirement – to be on the government dole to receive whatever scraps they want to throw to you, or do you want to live with plenty and choose your life based on your own financial decisions?
In WEALTH VIRTUES, I discuss so many ways to allow you to define and create your own wealth. The basis is your practice of the virtues of Benjamin Franklin. If we look at those virtues in relation to decisions made by the President, you will find that you can make far better financial decisions for yourself than he can for the country. Here are three of Benjamin Franklin’s virtues that we (including the President) can learn from:
Justice: Wrong none by doing injuries, or omitting the benefits that are your duty. President Obama told the union workers at GM that he believed in them and the quality of the automobiles that they produce, yet he ordered the sale of taxpayer-funded stock in the company for an $11 Billion loss. It also makes you wonder who the stock was sold to; perhaps the Chinese. If so, a communist government believes in the soundness of a top American company, whereas our President does not. Either way, why did he sell taxpayer-owned stock at a loss in a company that is in a growth mode with sound fundamentals? The lesson learned: If you make investments for yourself and for your future, ensure that they are sound, and sell at a price higher than what you paid. This is actually a very simple way of creating wealth. Don’t panic, and think long term (not to the next election) and you will see growth. If you bet on tried and true American industry, you will have invested well.
Sincerity: Use no harmful deceit; think innocently and justly, and if you speak, speak accordingly. When the President looks to scare current recipients of social security by telling them they will not get their checks unless the Congress raises taxes in a recession, the motive is nothing short of either political motivation, or strict adherence to party dogma. The reality is that other less useful parts of the government should be shut down. If the President truly wanted more revenue, he would allow businesses to grow. Many on the left are questioning why businesses are making huge profits but not hiring. Wouldn’t you keep your profits too if the President was gunning for you to pay more taxes? American corporate tax rate is second-highest in the industrialized world. How about allowing U.S. energy producers to resume drilling in areas the President has cut off? The jobs created would certainly create more revenue. How about Congress and the President creating a more business-friendly tax code that allows for consistency and surety. The lesson learned: Your personal wealth will increase if you perform all your financial dealing and obligations with Sincerity. Pay off all your debts. Don’t by anything on credit unless you can pay it off in less than 30 days. Understand the difference between your wants and your needs, and budget for both. Find new ways of increasing your cash-flow without increasing your expenditures. Look years ahead to your retirement. By the time you are fifty years old you should have saved at least a half a million dollars. I’m a middle class employee younger than fifty and I have accomplished that and more using Franklin’s virtues. Even if you have nothing saved, the average person starting at age 50 can save at least $800,000 dollars before retiring. Read WEALTH VIRTUES to find out how. Sincerity will help you truthfully look at where you are now, and guide you to where you want to be.
Frugality: Make no expense but to do good to others or yourself; waste nothing. America is going further into debt at the rate of $4 Billion per day, but the Presidents solution is to raise the level of debt. On a personal level, this would be equivalent to a person earning $50,000 a year with credit card debt at $40,000 with an interest rate of 6%, then asking the bank to raise the credit limit to $48,000, but with no plan to reduce their own expenditures. Of course, if the socialists in Congress want to raise taxes, this person will have even less means to pay off their debt. Frugality ensures you buy only what you can afford, and ensures that you debt decreases to zero.
As for your healthcare, if you think that there will be enough money in the future from the government programs to provide you with health coverage, you may be kidding yourself. As less people exist to pay into the system and more baby-boomers running the current system dry, expect longer waits, and less service. Your retirement planning should consider the way you care for your own health. If you smoke, why should taxpayers pay to treat your cancer? Give up smoking. Exercise. Take the time to save money by shopping for and eating more healthy foods. America is one of the fattest nations in the world. Diabetes is on the rise. Avoid being one of those who don’t understand how your actions and habits now affect your future health. American safety nets should be for those who cannot avoid medical calamity either through accident or heredity, not by self inflicted debilitations. Remember that the wealthy got to be so through innovative thinking and creativity, and that our Founding Fathers were men of wealth – the people that create the environment that allow others to prosper and further innovate. Besides, have you ever been employed by someone who was without the means of income or access to capital? Don’t envy the wealthy, just define your own wealth and achieve it – but give generously to the poor and truly destitute as often as you can.
Stop pretending that you will receive Social Security. Avoid the seduction of being dependent on government decisions about your retirement or your medical needs. Avoid the philosophy from the President and leftist thinkers that big government throwing you scraps is just what you need. Declare your independence. Take the action I advise in WEALTH VIRTUES to drastically increase your savings and plan for a prosperous and healthy future using the virtues of Dr. Franklin.
Besides, whom would you rather trust – the man who helped create our great Republic, or the socialist “thinkers” who are diminishing it?