April 30, 2016

Financially Impotent Secret Shame of Middle Class Americans

Neal Gabler is a brave man. He writes openly about his own financial troubles in “The Secret Shame of Middle-Class Americans” in the May issue of The Atlantic. 47% of Americans cannot raise $400 for a minor emergency, and Neal is one.

Mind you Neal is a successful writer, publishing 5 books, writing television scripts, and reviewed movies on PBS for 3 years. However being a writer is not a path to riches. Neal admits to making mistakes - his wife quitting work, living in an expensive city, more home than they could afford, sending his children to expensive universities, using a 401K to pay for a wedding. Neal knows borrowing money just to pay bills.

Credit Howard Gold for his commentary on Neal’s article. Howard estimates living the American Dream costs $130,000 a year for a family of four. Only 1 in 8 families earn that much. The median income is $53,657 per the US Census.

The truth is in a global economy incomes have stopped growing. The median family income peaked around $57,000 in 1999. Companies cannot pay as much when other companies sell completive products for less. Compensation has dropped 5% of GDP from 1970 to 2013 per FRED. Our salaries have not kept up (unless you have a high demand profession/skill).

We are uneducated money managers. We spend too much, save too little, and do not manage risk well. Was budgeting ever taught in school? How about picking investments? Look for information on the Internet, and you will find people selling you something. Not always the information you need. Retirees are going from stable pensions to self-managing 401Ks and IRAs. We rely too much on Social Security.

We are no longer getting ahead. Now you know why Donald Trump and Bernie Sanders are so popular. A great Bruce Eric Kaplan’s New Yorker cartoon says it all, “We thought it was a rough patch, but it turned out to be our life.”

Personally have dug out from failing industries, running my own business, real estate investment losses, and returned to manufacturing engineering. Had to move to another state, and my wife has not been able to find work here for 3 years. Most people would think we are lucky. No, it has taken years hard work.

We live frugally, paying off a median priced house, no other debt, save over 20%, and I drive an 18-year-old very used Volvo to work. Probably can’t retire before 70 and would like to work 10-15 years past that.

What can you do? Spend less than you make, pay off debt, increase your savings with every raise, educate yourself, develop more skill, buy insurance, take risks, and develop resilience.

Hard times happen to us all. You can do better.

Read Neal Gabler’s “The Secret Shame of Middle-Class Americans

April 23, 2016

Men's Night

My church is very active. With lots of different groups supporting charities, school and church activities & events. Last night the church held a 2nd Men’s night at Rob’s garage and driveway.

What was different about Men’s night? No purpose other than getting to know other men you did not know before. No fund raising. Bringing food was optional. The pulled pork and beer was already donated (Thanks Knights of Columbus).

Saw men I knew from my small group, K of C, and weekly coffee and donuts. Met a three nice men much younger, two older members, and we had more than two dozen around Rob’s $24 bar and brewing equipment.

Stories, quips, snarky comments and the occasional joke were told. We ate together, choose from 9 beers by Sean & Rob’s future micro brewery, and generally acted like men.

Father Brad was there with humor in fine form. Joked we were going to do 20 rosaries “on our knees” for the evening. Most of us would not get up after 1 rosary from our knees without help. He just held a short prayer before food was served.

There was no planned activity. What was accomplished on a nice spring evening? The community was strengthened. New people welcomed. Experiences were shared. Advice given. Deeper knowing of each other. Bonding. You become known to others and a resource for the future.

How are you planning build connections in your business? Take time to build people up, and expand their networks. When needs come up, you have a real team.

For example the storm took out the power the day of the St Patrick’s dinner. The volunteers at church cooked by flashlight. Dinner had candles. About 60% of the expected parishioner’s showed up. Everyone was fed. Funds were raised. The team rose to the challenge.

Build people up and build teams. For work, charity and life.

April 16, 2016

Last Minute Tax Advice / Software Review

Taxes are due Monday April 18th 2016. If you haven’t filed, at least file an extension by Monday. Suggest you send an estimated payment with the extension request to avoid interest and penalties. Did that successfully when self employed and records were misplaced during our move.

All is not lost if you haven’t started. Did my own taxes and my sister’s taxes last weekend. Online tax software is wonderful and free if you earn less than $62,000. Very affordable for everyone else as well.

SCAM ALERT - the IRS will only contact you by mail. Ignore any scammer who calls, texts or emails you. The IRS will not arrest you without giving you time to repay first. Anyone who wants a prepaid card or Bitcoin is trying to Steal from you. Hang up and don’t answer them. See more on irs.gov website.

The big 3 tax software companies are TurboTax, HR Block and TaxAct. Used 2 out of 3 online software over the weekend to file taxes.

TurboTax used over ten years, except when had a CPA for my business. Very simple yet detailed questions to get you every deduction you deserve. Support, descriptions, and researching tax / system questions has improved every year. Millions love TurboTax. There are different levels and prices depending on the complexity of your return. As an employee with a home mortgage & charities was simple. Even had a discount through credit union & Costco this year.

Only annoyance this year was the upselling as you answer questions. Patiently had to say no upgrades and did not need audit protection. Did have one technical issue, which has happened before. Imported a form from my bank to save time. During the review before filing that form caused an issue. Had to delete the imported form and type the data in by hand to resolve it.

Overall give TurboTax a 9 out of 10 and highly recommend it.

My sister earns below the poverty line, but is self-employed and rents out a room. She has the most complicated taxes. Last year used TurboTax to file her taxes, but this year could only do the EZ/A form for free. Would have had to upgrade to a higher level. Had to use another software for her taxes.

She had used TaxAct before, so tried that instead of paying. TaxAct has a great feature, importing a PDF of last year’s taxes. That saved a lot of data entry and time. The questions were basic and easy to understand. Referred to last year’s tax forms, and was able to complete & E-file her taxes on the first try (for free).

Highly recommend TaxAct for preparing your taxes, especially if you are below $62,000 income. Give TaxAct 8 out of 10.

HR Block has online tax software with a great reputation. Do not have personal experience, but expect it is as good as TurboTax and TaxAct. E-filing your taxes online is the way to go. The other benefit of online software is always having the latest software and security updates versus buying a disk.

Don’t panic. Get your W-2’s, bank statements, and charitable deductions together. Then sign in to one of the big 3 online services. If you get stuck on a question, search inside your software. Next Google the question, including your software name. Someone has figured it out before you. You can be done with taxes in a few hours.

Hope you even get a tax return this year.

April 9, 2016

The Future and Technology

Predictions are the hardest thing to do. Nothing makes us look more foolish than looking at old predictions. Especially my own. Heck no one even gets the NCAA brackets right.

The past is an indication. No one knew how much airplanes would become the major way of travel shortly after the Wright Brothers showed the world how to control flight. Wilbur and Orville would be amazed at the number of people traveling all over the world in comfort compared to when they laid down on their wing risking their lives.

Going to the Moon was accomplished in less than 10 years, although rockets were used as weapons in World War 2. Who would believe that much progress could be made that fast from a commitment in 1962 and competition?

Who would have thought the Arpanet would grow up to be today’s engine of commerce now know as the Internet? How about all the apps developed for your handheld computer-phone? Closest prediction to cell phones was the Dick Tracy wrist radio.

So let’s dive off the deep end and look at the future technologies.

The self-driving car is a given based on all the development and investment. What is overlooked is the technology is being better developed for air travel. Autopilots were first demonstrated in 1914 by Sperry. Modern planes could fly without pilots very soon. Artificial intelligence is beginning to take off to new levels in the next decade or two.

Self-driving trucks will be commonplace in a few years with a robot to unload them at each stop. People may not have thought of are simple chores like mowing the lawns, trimming shrubs and weeding will be automated in the next decade or two. Look at the robot vacuums. Why will people stock shelves when robots can do it easier. People will be saved for interacting with customers. Physical work will be passé, and I could do without weeding.

Next how about space travel. Go from London to New York or St Petersburg in an hour or two by traveling above the atmosphere. Vacation and gamble on the Moon and orbiting hotels. Take a once in a lifetime trip to Mars. Airplanes, automobiles, drones will still be with us, but travel is much faster.

Shipping cargo will be done through transporters. Star Trek transporters will handle cargo, although they may be too dangerous for living organisms. No idea when transporters will be developed. Additive manufacturing machines to manufacture where needed all over the world, but we will need a more efficient way to ship through space.

Television and holograms in helmets will be replaced by images generated in our brains. Why have hardware when you can see and feel by playing in our brains? The Internet will have been replaced by 3 to 5 new generations of connectivity. This will allow humans to connect brains in small to large groups for desired purposes.

Medicine will have gone from curing illnesses to prevention. Aging will be history once your body has reach maturity. Dying your hair will be replaced by natural and unnatural color growing from your scalp. Worn out cartilage will grow in our joints. New diseases will pop up only to be cured in days. Life will be longer and more productive.

Crimes and accidents will be anticipated and prevented. Weapons will have gone from physical to light, sound and energy. Lasers are close to deployment on naval ships and not much longer for other platforms. Sound weapons are being experimented with. What other forms of energy weapons are next?

With hard labor automated, there will be an explosion of learning, philosophy, art, stories and music. Look at the Italian renaissance when slaves freed up the owners time. Time was put to good use.

Unfortunately there will still be governments, power grabs and challenges for every generation. But mixing of people all over the world will reduce war and crime. Look at how low crime rates have gotten in most western societies. Better understanding of people will prevent more people from becoming criminals, and prevent suffering from mental illnesses. Most societies will be peaceful.

There will be other unexpected improvements. No one can see around corners enough to know all the future. You probably have ideas I missed. What are they?

Will we get there smoothly? No. History is full of technology jumps, technologies used for warfare, people fighting change, lost generations to war, and societies stepping back. History shows humans developing major technologies which benefit mankind. That trend will always continue.


April 2, 2016

Evaluating 5 Presidential Candidates and Their Campaigns

More than likely you will disagree with my analysis. Its okay, I’m not sure where I stand on casting my vote. You probably have a better reason than I do. Never seen such a wide open election.

Probably will be a good president for the most part. Keep things going forward a little, but not rock the boat.
My late mom who was one of the first 3 women to go to her engineering college would be so proud of Hillary. She has tremendous experience, political insider, has good support from her party and core party voters.
Hillary is inevitable. Until she is not. Seriously question her judgment and honesty. Remember the reset with Russia? Benghazi? Her government run health plan? The people she promoted under Bill’s presidency?
Question one will other candidates get the swing voter support? Second the FBI investigation on the email server could still blow this election.

Never expected the enthusiasm and the success of Bernie’s Campaign. He is running a true socialist campaign promising to end social injustice and free college education. His message resonates with the young, disaffected, deep in debt, and voters dissatisfied with the current state of government and Wall Street. True breathe of fresh air and bringing in new voters and small donations.
Bernie big challenge is Democratic Party insiders have all the Super Delegate votes. Not only does Bernie have to beat Hillary, he has to convert a substantial number of insiders. Then he has to gather moderate voters to the left.
An outside change at best, but momentum is going for Bernie.

Between Bernie and Donald there are more voters for outsiders. Donald is the true outsider no one gave a chance to. Now he is leading delegate votes and shaking up the Grand Old Party. His boisterous campaign to say what people think has broken rules, energized voters and will change future campaigns. Marketing genius. Donald is fighting for the right to represent us and bring enthusiasm from the disappointed.
Donald would be an interesting president. Wealthy enough not to beholden to others, Donald can choose what is right for America’s citizens. Foreign countries would be afraid what he might do and not sure where the reaction would be crossing us. Frankly Donald does not have everything planned out, is not an ideologue, and he does not know what he would do in every political wonk situation. This gives Donald a good negotiating position. Donald’s biggest liability is shooting from the hip.
His campaign and opinion has struggled this week. But Donald has a history of people saying it will never happen, then Donald gets to work. 6 month later a deal is reached. Second the men and women who work for him respect him. Heard one of his first women managers point out he is respectful and likes strong women.
The Donald is more complicated and deeper than his campaign appears. Stay tuned, too early to write off.

Conservative Ideologue in the race. What Bernie is to the left Ted is to the Tea Party and conservative movement on the right. Ted’s opinions are spoken clearly and he has the debating skills of a great lawyer. Where other candidates were expected to lead Ted has become the surviving battler for the Republican nomination.
Ted’s issue may not be the number of states he won, but will people unite and support him? Ted will need to pick up moderate voters in the general election. That may be hard based on his positions. However the Democrat’s have imperfect candidates too. Strong chance yet.

John Kasich
The Governor has the best political experience, very competent, negotiates across the aisle and hugely popular at home. My pick to support when the stage was still very crowded. Most years the more moderate candidate wins. John is the adult in the room who looks presidential.
This year his campaign has only won his home state. His message is not getting through the media noise of the other campaigns. Afraid he is currently the long shot to get a nomination from a stuck convention.
The best description I read was Governor Kasich was everyone’s favorite vice president candidate. Think that underestimates his abilities.

These are the 5 candidates still in the running. No one is a lock for their own party, much the general election. The next 2-3 months will sort out the election, but so much can happen in such a short time that picking a winner is near impossible. Take your pick. I don’t have a clue who will win.

March 26, 2016

Simplify to be Productive

Work often expands to the time available. This is urgent! Can you fit this is? The tyranny of the To Do list. This is not where you want to spend your time.

Don’t make yourself busy. Look for what would make a difference. Improvements, new products, new services and innovations. Schedule time for the big projects.

The secret is to minimize unimportant work, and focus on work that benefits the customer in the long term.

March 19, 2016

Try More, Worry Less

Simple formula for success. Try more things, fail a lot and succeed at a few. Then succeed more and more often, until you have built a winning team and product/service.

How can you live with failure? Worry less about the results. Expect to have to do iterations. Failure is how we learn and get better. Failure is uncomfortable, but we can learn something every time. Get use to being uncomfortable.

Concentrate about doing the right things very well, and the results will lead to your team’s success.