Posted on 05/12/2011 1:07:54 PM PDT by rightwingintelligentsia
Readers may recall the 1950s TV show, "The Millionaire," which portrayed stories of individuals who were given a "no strings attached" gift of money by an anonymous benefactor. Each week in one of the show's opening scenes, a man representing the wealthy benefactor, John Beresford Tipton Jr., knocked on an unsuspecting recipient's door and announced: "My name is Michael Anthony and I have a cashier's check for you for one million dollars."
That TV program is scheduled to return next year as a reality show, and the new recipients will be the typical husband and wife who reach age 66 and qualify for Social Security. Starting next year, this typical couple, receiving the average benefit, will begin collecting a combination of cash and health-care entitlement benefits that will total $1 million over their remaining expected lifetime.
According to my calculations based on government data, such married couples will begin receiving monthly Social Security checks that will, on average, total about $550,000 after inflation. They will receive health-care services paid for by Medicare that, on average, will total another $450,000 after inflation. The benefactors will be a generation of younger workers who are trying to support themselves and their families while paying taxes to finance the rest of government spending.
We cannot even remotely afford to make good on these promised benefits. Although our system of personal liberty, free enterprise and limited government has made us an affluent and upwardly mobile people, we are not yet a nation of John Beresford Tiptons.
(Excerpt) Read more at online.wsj.com ...
“Look into the recent lists of dividend champions....”
I agree. My point to the poster was not from investment standpoint, rather that what he paid was a tax that was not subject to recall and that he was not due interest that otherwise would have been paid.
It’s a common argument used with SS - your excellent advice notwithstanding.
So today’s seniors need to consider how they want the script for “The Millionaire” sequel to be written: There’s a knock at the door. We now know that on the other side there’s a check for a million dollars. When the door opens, do we really want to see our children, under the commanding gaze of Uncle Sam, presenting us with that check?
I believe that half of the seniors on this site, and about 90% of the seniors overall have ABSOLUTELY NO PROBLEM with this approach (i.e., stealing from kids and the unborn).
Because of that, we are FINISHED as a first-world country.
The Wall Street Journal started out as a financial paper but became a leading voice for Conservatism in the 60’s. It is an excellent newspaper. Starting in the pre-Reagan era, it’s Editorial Page was a beacon of Conservatism in a dark desert of liberalism, along with Goldwater and Buckley.
It has continued as the best conservative newspaper in the country, even after the death of the long term Editorial Page Editor, and later, Editor, the late, great, Bob Bartley.
Besides paying off existing debts, what would you suggest?
How would you invest $250-$500k?
***Readers may recall the 1950s TV show, “The Millionaire,” which portrayed stories of individuals who were given a “no strings attached” ****
I kind of like the movie IF I HAD A MILLION. It shows how various people spend their gift of $1,000,000 during the depression.
One gambles his off, thinking it is a joke.
A prostitute goes in for good living.
A hot check thief can’t get this check cashed.
WC Field’s girlfriend buys lots of junk Model-Ts and runs road hogs off the road.
A fun movie.
I remember early in the last decade, a Wall Street Journal editor calling for the United States to have a population of a billion people, in order to create a more perfect marketing situation for the globalists, who were slavering over the Chinese and Indian populations. What an idiot to think American representative government could survive with that many people.
We can’t even hold our freedoms with 250 million plus 50 million illegal aliens.
>>And if you had a pony, well.......you’d have a pony.<<
My point was clear, and a response to someone saying that a person who put money in it their whole life does not deserve a collective $1,000,000 in retirement. They actually would have significantly more if they had put it in low risk investments.
The rule of 72 is absurdly simple. And destroys the myth that if your investment earned 10% interest you would collect twice as much money as if your investment earned 5%. It takes into account the time value of money. It is what makes insurance companies richer than banks.
It works like this: Divide your interest rate into the number 72. The result is how many years it takes to double your money.
So, lets say you start with $100,000 at age 30. At 12% interest, 72/12=6 years. So the following would be true:
Age Value
30 100,000
36 200,000
42 400,000
48 800,000
54 1,600,000
60 3,200,000
66 6,400,000
Now, lets make it 6, which would double your money every 12 years:
Age Value
30 100,000
42 200,000
54 400,000
66 800,000
Double the interest rate give this person eight times as much money at retirement! It is real. I wish high schools would teach this simple fact to American kids. We would not need social security at all.
“Compound Interest is the Eighth Wonder of the World.”
“My point was clear”
Your point is clear that you think that SS is somehow an “investment” when it is a tax.
When you say “deserve” you really mean “entitled”.
If your point is that if someone didn’t have to pay taxes, they’d have more money, then I’d agree, but that is rather obvious, isn’t it?
We do not have the productive capacity as a nation to pay everyone a cool million in retirement cash and benefits. Put another way, one day the government checks are going to be a lot smaller or non-existent for folks who get ‘em. If you are counting on one, you should probably make plans for not having it.
EXCERPT Public outrage over lavish government employee compensation and pensions is becoming more heated as new revelations about excesses seem to crop up every week. The latest: Newport Beach, California, where some lifeguards have compensation packages that exceed $200,000 and where these "civil servants" can retire with lucrative government pensions at age 50.
Newport Beach has two groups of lifeguards. Seasonal tower lifeguards cover Newport’s seven miles of beach during the busy summer months. Part-time seasonal guards make $16-22 per hour with no benefits. They are the young people who man the towers and do the lion’s share of the rescues. Another group of highly compensated full-time staff work year-round and seldom, if ever, climb into a tower......... the typical Daily Deployment Model in the winter for these lifeguards is 10 hours per day for four days each week, mainly spent driving trucks around, painting towers, ordering uniforms and doing basic office work—none are actually manning lifeguard towers.
........last year the top earner received $211,000 in pay and benefits, including a $400 sun protection allowance. In 2010 all but one of the city’s full-time lifeguard staff had annual compensation packages worth over $120,000. Not bad pay for a lifeguard - but what makes these jobs most attractive is the generous retirements. One recently retired lifeguard, age 51, receives a government retirement of over $108,000 per year—for the rest of his life. He will make well over $3 million in retirement if he lives to age 80.
In 1999, California legislators, including many Republicans, felt very generous with the public's tax dollars and created "three at fifty" for public safety workers. SB 400 allowed these government employees to retire as early as age 50, well over a decade before their counter-parts in the private sector, and calculate their annual retirement pay at three percent per year or 90% of their final year's pay.
With the ability to spike final year's pay based on over-time, vacation and sick leave time, uniform allowances, etc., many former government employees now earn more retired than when they worked. There was a domino effect of this incredibly generous law resulting in local communities jumping on board to stay "competitive" by offering local public safety personnel, including lifeguards, the same great deal. Thousands of state and local employees are locked into generous pension contracts which the courts have decided cannot be broken despite the lack of budgets to pay for them.
According to a Stanford University study, California taxpayers are facing a pension liability that could exceed $500 billion, a figure the non-partisan Little Hoover Commission says will "crush" government.
As bad as Newport Beach's situation is, it pales in comparison to some other cities in California. The city of Fresno currently spends 53 cents of every payroll dollar on pensions. The state average is 31 percent and is expected to rise significantly in the next few years. --SNIP--
SOURCE http://media.townhall.com/Townhall/Reu//b//2009%5C243%5C254f62a0-a420-4f58-b614-1b2fd0b8bd1b@news.ap.org.jpg
1. As ridiuclous as it sounds, competitively bid ever single purchase you make, no matter how small. Meaning shopping around for the small purchases, and letting the hungry vendors fight for your sale on the larger.
2. Investing. I will admit that I am not perfect, by 95% of my investments have done well through the years. 1st and formost, avoid things that seem to good to be true. That's how I missed the the dot com bust. Blend your investments in a manner where you can't loose. (Mix of metals, CD's, Bonds, Stocks, Real estate). As you get older gradually adjust that blend toward safer options.
3. Obsess with staying out of debt. This really should have been no. 1. One big key to success is making sure the cash flow is moving from finanical institutions to you, rather than vice versa.
4. Avoid high cost brokers. Once you work at this awhile, you will find you are just as good at it as they are.
5. Track peformance (monthly) of your investments, and gradually dump those with extended troughs.
6. Don't overreact to market losses. To me they can buying opportunites. During the bust of '08, I bought several blue chip stocks yielding near 10% (dividend alone).
7. Live poor, but don't deprive yourself of a few pleasures. Frugality is probably the biggest factor. Your guilty pleasures should never exceed 0.1% of your net worth on an annual basis. It is amazing how many people I see making great money, and are in debt. To a "T", you will see the majority with expensive hobbies, toys, or with a new car every year. My vehicle with 240K miles may look a little ragged, but it is an investment when you realize the cost avoidance of $20-40K capital invested, that in turn depreciates 10-15% driving it right off the lot.
8. Teach your kids not to want "things" as they grow up. This will save you money obviously, and it will help perpetuate your estate, with fiscally responisble descendants.
9. Prepare, and strictly adhere to a budget. (Captain Obvious' favorite).
10. Protect your assests. Proper manintenance of vehicles and home, have excellent returns of investment, by cost avoidance. But also don't forget to get an umbrella policy once your net worth moves up the ladder. Tragically, in our litigious society, one mishap can wipe you out.
11. Keep wealth dispersing liberals out of power. I know that may be a stretch at the federal and state level, but you will be surprised how much you may be able to accomplish few a few friends, and a well planned advocacy effort.
12. Keep healthy. I cringe, even when I have to pay the co-pay.
13. Watch for inflation. Increase mix of metals and commodaties by 10% for each 5% increase in inflation.
14. Garage Sales, Estate Sales and GoodWill. You will be surprised how many people dump good things that you may find at 5% of it's real value.
15. Complain about price increases where applicable. You will also be surprised how many services will freeze their price to you, if you threaten to leave.
This isn't all of it, but kind of my story of success.
OOps, sorry. On no. 11, that advocacy was meant to do your impact at the local level.
This is all excellent advice, and how my parents (and now I, since I was raised that way) think. I’ve also completely retrained my husband - actually refused to marry him until his finances got under control LOL. He cleaned them up and has been behaving himself since then.
We have no debt, though, house is paid off, pay cash for our cars, pay off the credit cards each month (use them for the miles/bennies but don’t pay the interest), use coupons, shop sales, etc.
My achilles heel is investments - I’m pretty bad at it, yet don’t trust anyone else to manage it. I tend to be overly cautious since the money was so hard-won.
But what’s really killing us is taxes. Double income with no debt in an unfortunately liberal state = no significant deductions and being bent over the table.
I’m trying to get to the point where I can go Galt and cut off the tax stream but it would mean putting retirement at risk....
>>Your point is clear that you think that SS is somehow an “investment” when it is a tax.<<
No. My point was that if I had put the money in an investment I would have had more than the amount I’d ever receive from SS, and SS was designed as “forced investment” on ones future. Yes, it is a tax, but a tax that benefits far less than if it had been actually invested, which is what it replaces - or at least what it was supposed to replace. And replace is really the wrong word. It was to “augment” your income in the later years.
Also, when it started, it didn’t kick in until age 65, and the average life span was less than that.
>>We do not have the productive capacity as a nation to pay everyone a cool million in retirement cash and benefits. Put another way, one day the government checks are going to be a lot smaller or non-existent for folks who get ‘em. If you are counting on one, you should probably make plans for not having it.<<
Yep. And that is one reason our country, like all the rest of ‘em, is going down hard. You can’t turn it off without huge pain, and you can’t leave it on without total collapse. Western culture is about to go the way of Rome, Babylon, et al. And it collapsed of its own weight. No house of cards is permanent. It’s just very painful for those alive when it happens.
I think we can both agree that whatever SS payments were or are, the government took the money and spent it and it’s gone.
” In 1999, California legislators, including many Republicans, felt very generous with the public’s tax dollars and created “three at fifty” for public safety workers. SB 400 allowed these government employees to retire as early as age 50, well over a decade before their counter-parts in the private sector, and calculate their annual retirement pay at three percent per year or 90% of their final year’s pay. “
BK cit-tay ;-)
Now we are finding out that not only the professional poor, and the illegals from Metico have been sucking off our tax $’s, they have been joined for decades by the tax sucking city/county/state check collectors posing as public workers.
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