June 24, 2017

Transitions at Work

Today 3 people retired and 5 people were laid off. Sorry to see everyone leave. Wish we all had work. Instead the few left will pick up more work.

The retirees are in good shape. They saved money, paid off debt, planned for collecting social security, and have interests to keep them busy. Very happy everyone was ready for the opportunity.

My laid off coworkers are in pretty good shape, with savings and little debt. A lesson aerospace workers learn early in our careers. Was told a joke when I starting out, “There are two types of aerospace workers - those who have been laid off, and those who will.”

Anytime you are not working, life gets hard fast. Unemployment does not cover rent, bills and food. Your savings has to cover what spending you can’t cut while you are job hunting. Everyone needs a minimum of 6 months savings to cover bills. I prefer over a year of savings on hand for emergencies.

How do you start building your emergency fund?
Put ~10% on your first or current job into your 401K. At least put enough to get the employers matching funds.
Then put money aside for emergencies, vacations, car repairs and hard times. Start with ~10% after taxes. Automatically deposit this to your savings account. You won’t see it, so you are less likely to spend it. Live on the 90% or less after taxes deposited to your checking.

When extra spending is necessary, you can transfer funds to your checking account to cover it. Most people may need to do this once or twice a year.

Secrets to financial independence:
1) Spend less than you make. Credit card debt not paid off every month ruins more people’s finances than any other mistake.
2) Every time you get overtime, a bonus, or a tax return: Put 10% in checking to spend on a treat. And put 90% in savings.
3) Every raise increase the percentage saved in the 401K and savings. 10% becomes 12%, then 14% and more. You aren’t use to spending the raise, so you don’t miss it.

Properly invested savings earn compounded interest and grow faster than you believe possible. When medical expenses occur, you can pay off the credit card. 6 months of job hunting becomes manageable. Eventually you can afford the down payment on a condo or house.

Good habits make you rich. Poor habits stress and shorten your life.

June 17, 2017

What Are You Doing to Make Your Life Better?

Just came from a Volunteer appreciation dinner. The church recognizes people giving for all these different activities.  People there planning for the future, teaching religion, funeral services, social justice, choirs, feeding the homeless, leading groups, ushering, greeting people, and in line with my skills - set ups, tear downs, serving coffee and doing dishes. All these people are doing the little things that build a better society.

Your life will not get better until you do something different than you are doing now. Something that stretches you, makes you uncomfortable, meeting new people, or try a new skill that you aren’t really sure you will succeed at.

In college my professors said our knowledge is always changing. So we are not teaching you the facts, we are teaching you how to learn for after you graduate.

Taking a class on navigating office politics tomorrow. Office politics are not my favorite subject. Would rather keep my head down and work. Would rather scrub walls and the floor than deal with politics. However if the right decision needs to be made, would like to have input and contribute where I can. So will take a class to improve skills for the future. 

So the question is, what are you doing to make your life better?

June 10, 2017

Simple Solutions Don’t Work

Tax the Rich - Connecticut and Maryland both found out this does not work.

Connecticut has raised income tax rates on wealthiest residence last 2 years. Net tax revenues have not increased. Tax revenue from the state's top 100 highest-paying taxpayers declined 45 percent from 2015 to 2016. The drop is a $200 million revenue loss for CT.

Maryland "millionaire's tax" pushed through by Gov. Martin O'Malley in 2007 imposed a rate of 6.25 percent on incomes of more than $1 million a year. ~300 richest residents would pay. The following year only ~200 high incomes had to pay. Result was a net loss of tax revenue.

What is happening?
First assumption is no one will adjust to higher taxes. Business owners and CFOs will find alternative methods to reduce taxes. If Capital Gains are lower, pay me in stock options instead of salary.

Second false assumption these wealthy people will make as much money every year. The wealthy are not the same every year. You only sell businesses and real estate every decade or two. Other years you earn much less.

Third wealthy people are mobile. They can move to another county, state or country. Record numbers of people have given up their US Citizenship in last 5 years. Some of these are people from other countries who built a business here, sold it and are moving for lower taxes on their windfall.

The other reason Taxing the Rich does not work, the wealthy don’t earn enough. John Stossel reports if the IRS took 100% of all incomes over $1 Million, the 2012 total would be around $616 Billion. The US Government had a 2016 deficit of $593 Billion and borrowed additional $830 Billion totaling $1.417 Trillion. About 40% of this year’s deficit.

John Stossel points out no one works to earn nothing, so those incomes would evaporate, resulting in No tax revenue to reduce the deficit.

People, businesses and corporations earn wealth. The government taxes and spends wealth for military, entitlements and programs. The government has to control spending.

The Biggest Risk to our Economy is Debt - personal, business and government. Next biggest risk is government regulations and spending.

Based on the slow growth of the economy over the last decade, your Entitlements will be Lowered and Taxes Raised by our governments.

June 3, 2017

What is Going Right?

We are all Too Hard on Ourselves. We look at our mistakes and weaknesses, and beat ourselves up. Then we try to fix our weaknesses.

Strengths Make Us Special. You are not reading this because it is spelled right, nor typed well. You read this to Make Your Life Better.
(Flunked many spelling tests, type 25 words per minute with errors,  and still contributed to 2 books.)

Forgive Yourself. None of us is perfect. New uncomfortable experiences are called Learning. 

Work on your strengths, try them out, and Be Grateful for what went right.

May 27, 2017

Life’s Rules of Thumb

Growing up was taught simple shortcuts to solve issues or designs. People learned them from experience. Now they are called “Life Hacks”. Here are a few of my Rules of Thumb:

Life is Hard
Bad days will hit you. Family and Friends die. Jobs go away or we get fired. Illness strikes. Mental illness strikes loved ones, or happen to you. No one has life go right every day. We all suffer.

Life is Awkward
No one learns anything the first time. We date the wrong person. We are confronted by the unexpected. We make mistakes and bad decisions. (Parenting anyone?) This is called Experience.

Ask Questions and Ruminate
No one knows everything. Business, technology and customers change every year. Learn is ask questions and listen to answers. People will tell you surprises about their lives. Find time to think deeply about what is happening. Where are the challenges? Where are opportunities? What changes can you make?

Try Things
Knowledge is useless without Action. Try what you learn, and learn more from trying. Making mistakes and failing are learning.
“Mistakes are part of the dues one pays for a full life.” - Sophia Loren

Faith is Necessary
We need an anchor dealing with life’s trials and difficulties. Meditation is wonderful. Meditation with prayer is better. Know God Love You.
“I do not believe because I understand. I believe so I can understand.”

Life is Worth It
Yes life is good. It is not other people recognizing you. It is when you said the right thing to someone who needs to hear it. You give a hand or encourage someone who needs one. We all need someone’s help. You discipline a kid or employee so they learn. You may not realize it until later. You did good. Keep track of what went right. Be grateful every day for something.
 "You will never know how high you can jump until you reach a failure point." - Rev. Robert Schuller

May 20, 2017

Avoiding Boom and Doomsday Predictions

Interesting, the investing advice everyone listens to falls into two categories:
1 - You are missing out! The market is going to $50,0000 …
2 - Watch out! The market is falling to $1,000 …

The further from current market conditions, the more outrageous the claim, the more attention the speaker gets. Followed by books sale too.

We are drawn to the colorful, the weird, the freaks and the entertaining. Like moths to a light we give our attention to these claims.

Donald Trump says and tweets outrageous comments. No politician would say such things. However the enthusiasm he drew made him president. Despite the best effort of both parties.

However if you are going to invest wisely. Listen to successful investors, savers and avoid the “Too Good to Be True” claims of the famous and infamous.

There is a lot of talk about impeaching Donald Trump. Lots of famous people do not like him. He talks too much, makes outrageous statements of the top of head, and it is “All about Me”.

Not going to happen yet. Only been 4 months in office. What he has done is not criminal. What he says is Free Speech. Any investigation may take years, or at least a lot of months.

Stay your course. Save money. Invest it. Don’t get caught up in HYPE.

May 13, 2017

Time is Catching Up

It always does.  Decisions for short term comfort have long term consequences. Sometimes these consequences are unseen, but often consequences are ignored because the immediate gain is calling now. The extra desert becomes added weight year after year.

We don’t save enough for the future because of debts for cars, vacations and over priced schools. We underfund our retirement and underestimate how long we will live. Few of us imagine the health care challenges of old age in our twenties.

Central Banks over stimulating liquidity for too long has resulted in inflated asset/property values. Stocks and real estate are reaching record highs. Very low interest rates have businesses doing financial engineering stock buy backs, instead of investing in growth. Stock prices to earnings get inflated.

Politicians make promises like generous pensions or health care, and then underfund them because of budget shortfalls. Eventually they cannot be fully paid and retirees suffer. Government debt has doubled twice over the last 20 years. Many cities and states are going bankrupt. Will the Federal Government follow them?

Voting for the politician who promises more services. Taking money from others sounds good. But your taxes go up when the cost is more than “The Rich” have. Instead the taxes fall on the working class.

CEOs accept outrageous raises, while employee salaries are limited or employees are laid off for outsourcing. Companies move new production to different states to get incentives, leaving employees behind. It feels good to be recognized for your leadership. But employees struggle to pay bills and/or leave family & friends behind to find work.

The solution is taking responsibility. Not just for yourself. Take responsibility for family, neighbors, and strangers. Inside your community and in the outside world.

Cut spending now and keep saving for hard times that always come. Balance your budget. Pay off debts. Buy insurance. Review options and make uncomfortable choices.

Advocate for less fortunate. Keep people safe from scams. Service to others comes with leadership. The world is connected. We have to help people, and accept help when we need it.

Together we can find ways to improve or manage situations.

Transitions at Work

Today 3 people retired and 5 people were laid off . Sorry to see everyone leave. Wish we all had work. Instead the few left will pick up mo...