Want Real Financial and Political Change?

 Advice, Sports, Stocks, Topicality  No Responses »
Aug 132012
 

Put a woman in charge.

According to a research report by Barclays Wealth and Ledbury Research, women make money from financial markets and they tend to be better at running corporations too!
Why?

 

  • Because they take fewer risks and hold on to investments longer.

The study found that although both men and women often feel a certain lack of confidence when it comes to investing, women react differently by exhibiting a greater level of discipline and self control.  Men, on the other hand, tend to panic and trade more often – up to 45% more often.

 
Interestingly enough, an earlier study, from the University of California, found that married men tend to take less risk and trade less often than single men. (insert sexist joke here)

 
That study found net returns of women are reliably higher by an average of 1.1 percent annually than men.
So, if women are so much better than men at this, how come the financial world, and even the political world for that matter, doesn’t have more women running the show?

 
Perhaps we should elect more women to positions of power, appoint them to run more corporate boards , or better yet, put one in charge of the Federal Reserve!

I’m serious!

At least for me, it would leave more time for sports and playing fantasy football!

But honey, just be sure to leave some gambling investment money for me because I just know RG3 is destined for a break out rookie year and I’m drafting him in the first round and my fantasy team is destined to win the championship and I promise not to run to the waiver wire at the slightest sign of trouble . . .

;-)

BTW, Ben Bernanke is married. So if you believe the research, he’s done better than most.

Mid-Week Milestones

 Advice, Topicality  1 Response »
May 162012
 

This week marks a couple milestones for us.

  • My oldest son is graduating college
  • My oldest car reached the 300K mile club

I don’t know which is more remarkable.

 
Eric has successfully graduated, or soon officially will be, from George Mason University with a degree in Computer Engineering. 

So if anybody out there could use a good young energetic IT guy who likes network security and database management, let me know! I think I just might know somebody who would love to help you out. ;-)

 
Seriously feel free to contact me. . .

 
Eric had the same deal that all our kids have.  If you stay home after high school, you WILL go to a local college full time and earn a degree.  The alternative, other than going to college someplace else, in which case we would help up to a point financially, was not particularly attractive to either him or us.

 
Needless to say, he picked George Mason and lived at home.

 
This worked out well for everyone.  He got a degree with a lot less expense (no college room and board fees), very little debt and we got a live-in who would help with the kids and shopping from time to time.

 
A win-win situation if you ask me.

 
Now the deal is done and sorry Eric, we love you, but the real world awaits!  Go get it!

 
Regarding my car and the 300K mile club. . .


I have a 1997 Acura 2.2 CL which despite its Brand Name is an American Car.  In fact, the CL was the first Acura to be built in the United States.  All CL’s were built at the Honda Marysville, OH plant.  I bought it second hand back in 2002 from a local used car dealer and yes I approached my purchase with a certain amount of skepticism and I had a plan.

The car, remarkably, sat on the lot for well over a month, actually nearly two.  I think I first saw it and test drove it after about the 3rd week that they took possession.  Of course, the price the dealer had was, IMHO, a bit high and more than I wanted to spend and yes he used many of the standard “sales” tactics to try and convince me otherwise.

But, like I said, I had a plan.

I kept coming back every Monday to see if it was still there and negotiate a better price. I actually had spent quite a bit of time looking at different cars and ended up liking this particular CL the best.  Not because of the price, not because of the reliability, not because of the performance, but rather the reason I liked this car the best was that it was one of the few I could comfortable sit in and drive. I spend up to 2 – 3 hours every day driving so I better be comfortable while doing it.

 
I knew I wanted this car. I also knew I did not want to pay the dealers price.

 
The dealer knew I wanted this car. It was just a matter of time to see how all this would play out.

 
The longer the car sat on the lot, the better my negotiating hand became.

 
I ended up taking it on more than one test drive; in fact, I conveniently dropped it off at my favorite mechanic during one of those “test drives” and got a clean bill of health from him.

 
So, on my last weekly visit, which happened to be the last week of the second month for the dealer, I nonchalantly said, “I see it’s still here” ;-) .

 
It was at that time, after at least 3 -4 weeks of me coming back in, that a price I felt I could afford was negotiated and the prize was mine. I have enjoyed it and comfortably sat in it ever since!

 
And the best part, I knocked nearly 25% off the dealers original price.

Size Matters

 Advice, Topicality  2 Responses »
Jan 302012
 

Do you prefer to carry cash?  Do you carry smaller bills ($1, $5, $10) or larger ($20, $50, $100) bills?

If you make a habit of carrying a bunch of $1 and $5 dollar bills, how long do they last. Or Once you do break that $large bill that has been in your wallet for ever, does the rest disappears quickly?

Truth is, people tend to think about money, and saving it differently depending on the value of the note and or the cost of the purchase.

Researchers have come up with a theory called the denomination theory which basically says your mind views small bills and coins as petty cash.

Small bills tend to get assigned to something like a mental petty cash account, and so we’re willing to spend them on petty things. Larger bills, in contrast, are naturally thought of more as “real money” and so we’re reluctant to spend them on things that aren’t of real importance.

For some reason, I don’t think this applies to kids. Case in point, I was standing in line at a Walmart last month and a father and son were at the register in front of me. The boy was about 7 or 8 and had a RC car in one hand and a rolled up bill in the other. At the last second he saw some of his favorite candy and grabbed a bag to include with his purchase. He asked how much it was and the cashier said it would cost him another dollar. He promptly put the rolled up bill, the RC car and the bag of candy on the counter and asked his dad for another dollar.

The rolled up bill was a $100 dollar bill.

My guess is that if he had had several bills, he probably would not have thought he needed another bill and would not have asked his dad for more money.

The $100 dollars was his Christmas money so he could spend it as he saw fit. I was rather impressed that he did not spend it all in one shot. But I was also curious that he forgot how much he really did have.

Afterwards, as I was walking out, I was glad to see the dad and son sitting at a table counting out how much he had left.

So, where do you fall in the psychological scheme of things?

I know folks who do keep a large amount of cash with them, say $300. This is their way of budgeting. They give themselves a weekly allowance and use it for gas, food, shopping, etc. When it is gone, it’s gone.

I, on the other hand, tend not to keep much cash at all in my wallet. Yes it is usually in the form of smaller bills. But I do it for a much different reason. I like to be able to keep track of my expenses and spending. By using a debit card (not credit), most every transaction is recorded.

The IRS Is Overtaxed

 Topicality  No Responses »
Jan 182012
 

The IRS is broke and the few remaining employees it has are overtaxed with work.


Now before anybody starts a pity party for the IRS, let’s look at what this means.  With less money, and less people, the IRS has had to rely on computerized processing.  Cool, this means that the IRS is becoming more efficient, doing more with less, and increasing worker productivity and efficiency, Right?

 
Wrong.

 
Unfortunately, the IRS has seen a 72% increase in returns marked as fraudulent by their computers which means the overtaxed employees have to try and figure it out themselves.  And this is where the real problem begins.  The tax code has become so arcane that even the IRS can no longer keep up with it or figure it out.

On average, more than one change to the tax code is made every day.  At present, the tax code is inherently biased towards being complex and contains more than 72,000 pages, with over 9,000 sections.  A special interest group can save billions by introducing a special deduction; therefore, they are willing to spend billions to insure such deductions are put in place.  Multiply this by the innumerable lobbying factions spread across a $15 trillion economy, and you can see how this whole mess has gotten out of hand.

Now, back to the less money and less people issue at hand . . .

 

 
With less people, less inherent knowledge and ability to figure out the whole tax code mess, an increase in flagged claims to research; What do we have?  Longer wait times for you and me, less service (again for you and me), and because of the back log – more fraud.

 
I think we all should have one great big pity party to include the remaining IRS workers and the American Public.  After all, thanks to politics, we now have a lot of unhappy and confused people on both sides of the public service fence.

Do Nothing?

 Uncategorized  No Responses »
Nov 172011
 

According to a recent Washington Post article, Congress and the Supercommittee could best serve the country by doing exactly what they have been doing best.

NOTHING!

If Congress simply fails to act between now and Jan. 1, 2013, the tax cuts passed under President George W. Bush expire, $1.2 trillion in additional budget cuts go through under the terms of last summer’s debt-ceiling deal, and a variety of other tax cuts also go away.

The sum total of all cuts and expiring legislation equals approximately $7.1 Trillion dollars!

Championed early this year in the New Republic by New York magazine writer Jonathan Chait, it looks even better now because of the spending cuts scheduled to go through if the supercommittee doesn’t act.

Of course Congress will probably manage to mess even this strategy up by devising some sort of compromise that puts off the big decisions for another day, and, another congress. They could agree in principle pending further review and side step the freight train budget deadline of November 23rd. and smile and wave (point fingers) as it whooshes on by.

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