While the Chinese, Middle Eastern, and Indian economies achieve new levels of diversity based on productive labor, America’s economic charm seems to lie inthe misguided and misanthropic measures flowing out of the US Congress at the behest of President Obama.  America is putting on heavy chains of debt, locking it in for decades and giving the keys to foreign governments that have our demise as one of their primary goals.

Don’t the successless sychophants in the mainstream media recognize that the Federal Government is following precisely the same path illustrated in the famous (or perhaps infamous) Stanley Johnson commercial?  The Congress and the President have us up to our eyeballs in debt, and it’s debt to the wrong people.

What does that mean for your personal economy?

• It means that money that you have faithfully deposited into retirement accounts is at great risk.
• It means that every penny of debt you have personally, compounds the debt you have as a US citizen.
• It means that the advice you received over the past thirty years is wrong.
• It means the rules have changed, or at least reverted to the more sensible guidlines that allowed our forebears to live and die comfortably without relying on debt-to-others.
• It means - most of all - that those who change their way of creating and managing their personal economies and personal wealth will have a much better chance of escaping the swamp into which our “leaders” are guiding us.

Personal economics is like a jigsaw puzzle.  If you don’t know what the final picture looks like, you’ll have a great deal of difficulty solving it.  Americans have lost sight of the end result - creating and managing their personal economies - and have been deluded into thinking that the pieces of the puzzle - investments, mortgages, IRA’s, etc. - are what’s truly important.

The problems in DC and the problems in your household are the same.  The pieces make up the puzzle, but no one piece is the solution.  Instead, we recommend that you find a “soulution” that fits you and your family.

Filed under: Ethics and Morals, Money, Personal Economy, The Dungeon of Debt, best book on money, best book on personal finance, best savings account, Congress, debt, economics, economy, Money, personal, Retirement, risk, undefined, wealth, wealth creation | Post a comment

It has been said the greatest volume of sheer brainpower in one place occurred when Jefferson dined alone…

HOW DID JEFFERSON KNOW???
Especially read the last quote from 1802. 

“When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.”

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

“It is incumbent on every generation to pay its own debts as it goes.  A principle which if acted on would save one-half the wars of the world.”

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

“My reading of history convinces me that most bad government results from too much government.”

“No free man shall ever be debarred the use of arms.”

“The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.”

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
“To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.”

Thomas Jefferson said in 1802:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks (and the Feredal Reserve IS a private bank) to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered..”

And, Just for kicks, Mark Twain said this: ‘If you don’t read the newspaper you are uninformed, if you do read the newspaper you are misinformed.’

Filed under: Ethics and Morals, What others have to say, bank, banking, banks, debt, democrat, inflation, liberties, saving, savings, Taxes, tyranny, undefined | 1 Comment

“The National Association of Fixed Annuities, Milwaukee, has voiced that concern in a member alert…

“NAFA sees the proposal as “a clear attempt to take control – read collect fees - on all product recommendations,” including recommendations involving life insurance, long term care insurance, health insurance, property-casualty insurance, savings accounts and fixed annuities, NAFA officials say.”

http://www.lifeandhealthinsurancenews.com/News/2009/5/Pages/NAFA-Pans-FINRA-Draft.aspx

Maybe the answer is for independent insurance and financial advisors to relinquish S6, S7, etc. registrations and quit selling securities.  Few Americans are truly qualified investors and most annuity buyers are not.

Whole life, health, and annuity products are usually more than adequate to secure the wealth of the typical American and her/his family and they grow and secure family wealth without risk and without worry.

Pretty soon we will allow the Feds take every authority away from us and our freedom will go with them.  Life, health, and annuity agents should not be worried about fixing the system that’s gotten us into the mess we are in now; the same mess that allows the power-hungry in the FED and in DC to grab control.  We should be looking for a “soulution” that lets the state insurance departments maintain authority and control.

Perhaps, therefore, the answer to the ongoing challenge of FINRA and the power-grabbers in DC is to withdraw from their area of control.  The fewer professional insurance and financial advisors (yes, you can be a true financial advisor without any securities registrations) they control, the less power they wield.

Filed under: Ethics and Morals, What others have to say, annuities, annuity, dolts, financial, finra, Health, insurer, Life, risk, saving, savings, undefined, wealth | Post a comment

It is the month of August, on the shores of the Black Sea. It is raining, and the little town of Bombasticus looks totally deserted.  It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town. He enters the only hotel, the Ritzski, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

• Pierreski, The hotel proprietor quickly takes the 100 Euro note and runs to pay his debt to Thumbless Joe the butcher
• Thumbless Joe the Butcher takes the 100 Euro note, and runs to pay his debt to Porky the Pig Farmer.
• Porky the Pig Farmer takes the 100 Euro note, and runs to pay his debt to Fred at the Pig Feed Store.
• Fred at the Pig Feed Store takes the 100 Euro note and runs to pay his debt to the Irma, the town’s prostitute that, in these hard times, gave her “services” on credit.
• Irma runs to the hotel, and gives the 100 Euro note to Pierreski the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism…

And that, ladies and gentlemen, is how the United States Government is doing business  today.

Filed under: Money, Personal Economy, The Dungeon of Debt, credit, debt, stimulus, tough times, united states government | Post a comment

“The National Association of Fixed Annuities, Milwaukee, has voiced that concern in a member alert.

“NAFA sees the proposal as “a clear attempt to take control – read collect fees - on all product recommendations,” including recommendations involving life insurance, long term care insurance, health insurance, property-casualty insurance, savings accounts and fixed annuities, NAFA officials say.”

http://www.lifeandhealthinsurancenews.com/News/2009/5/Pages/NAFA-Pans-FINRA-Draft.aspx

Few Americans are truly qualified investors and most annuity buyers are not.  Whole life, health, and annuity products are usually more than adequate to secure the wealth of the typical American and her/his family and they do the job without risk and without worry.

American citizens and their life, health, and annuity agents should not be worried about fixing the system that’s gotten us into the mess we are in now; the same mess that allows the power-hungry in the SEC and in DC to grab control.  We should instead be looking for a “soulution” that lets the state insurance departments maintain authority and allows individual Americans to maintain control of their saving and insurance programs.

If individual Americans don’t watch these regulators “like a hawk,” pretty soon we will allow the Feds take every authority away from individuals and the individual 50 states and our freedom will go with them.

Perhaps, therefore, the answer to the ongoing challenge of FINRA and the power-grabbers in DC is for every citizen to encourage their advisors to withdraw from the arena FINRA and the SEC control.  The fewer professional insurance and financial advisors (yes, you can be a true financial advisor without any securities registrations) these power hungry bureaucracies control, the less power they wield.

By Jeffrey Reeves

Filed under: Personal Economy, What others have to say, annuities, annuity, financial, finra, Health, insurer, Life, risk, saving, savings, undefined, wealth | 1 Comment

A Disorganized Conspiracy…

America is prone to adopt ideas that are popularized by the advertising and indoctrination of Behemoths (big business, big unions, and big government) regardless of the intrinsic value of the idea itself.  The idea that average Americans should be investing is such a disorganized conspiracy.  Its premise lacks intrinsic value.

That doesn’t mean Americans are all lemmings and sheep.  Even those on the inside of a disorganized conspiracy, such as the one that is damaging Americans’ personal economies today, are unaware of the untruth that supports the manufactured myth.  That lack of awareness gradually creates a shibboleth - an oft-repeated idea that the public as well as the purveyors come to perceive as truth just because it is so often repeated by so many.

The idea that most Americans should be investing, is such a shibboleth.  It is time for insurance and financial advisors to begin demonstrating the untruth of that idea.  It is time to challenge the ethics of selling investments to their friends, neighbors, and clients.

The Challenge…

The argument against investing begins with a clear understanding.  What most Americans believe to be an investment is really a speculation, i.e., a gamble.  Benjamin Graham said it best when he stated, “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.  Operations not meeting these requirements are speculative.”

Mutual Funds and 401(k)s…

Does anyone believe that buying a mutual fund promises safety of principal?  Is a sixty percent loss of value an adequate return?

Mutual funds and their counterparts inside 401(K)s and equivalent tax qualified plans are inscrutable, they defy analysis, and certainly do not promise “safety of principal and an adequate return.”  In other words, they are speculative; they are gambles.  Their only promise is that they promise nothing at all.

Well, that’s not entirely true.  It’s especially untrue for tax qualified retirement plans, which promise future taxation at a potentially much higher rate than the deduction rate available when contributions are made.

Free Money…

“Yes but…” what about the matching from the company?  Doesn’t that free money make up for possible losses?

It does, but only to the extent that the tax rates do not increase between now and the time you begin taking income from your retirement accounts.

If you follow the conventional wisdom and contribute the maximum to your retirement accounts, the employer portion represents a minimal amount of the total in the account.  If you choose to contribute only as much as qualifies for the employer match, the entire amount of your future income will still be taxed.  If that amount happens to be 50% of what it was last year, you’ll end up paying tax at a potentially higher rate on significantly less money.

From a different perspective, the amount of the tax deductions you receive currently constitutes a lien against your future earnings.  However, unlike the lien on a property, the contributions to a tax-qualified plan do not diminish your liability.  Additional contributions increase it.  If tax rates also increase, you will experience the negative effect of compound interest.

More Myths…

There are a few myths that the Behemoths promote as part of the foundation to the shibboleth that all Americans should be investing.  One of the most pernicious of these myths is the idea that a family only needs enough ready cash to cover three to six months of income or living expense.

The reason this myth was born was to free up more of your money for investing.  Ready cash of three to six years of income or living expense is much more reasonable and is entirely achievable when saving replaces investing as a part of your personal economic picture.

“Yes but…” what about the rate of return?  Can’t you expect a greater rate of return from investments than you can from savings?

NO!  That’s another myth.

Recent studies demonstrate that money in safe bonds, which reflect savings returns, perform as well over the long-term as investments.  This is significant because the insurance companies that we recommend tend to rely on the Prudent Man Rule and low risk financial vehicles for your money.  The author just completed one study that compared the returns in a whole life policy to those of the Dow Jones Industrials over the past ten years.  The whole life policy outperformed the DJIA by almost 130%.

A third myth, implied in the previous discussion and designed to tempt you to gamble your money, is that investing is for the long-term.  However, individual investors do not produce the same results that the Behemoths have promoted and advertised to induce Americans to invest - aka, gamble - their money in the markets.  The Behemoths speak only of averages.  They focus your attention on the top of the mountain and fail to point out the chasm that looms immediately ahead.  (You know that’s true today more than ever.)

The Question…

The purpose of this article is to raise the question: “Is it ethical to sell investments - especially inaccessible tax qualified retirement plans - to Americans that have auto loans, credit card debt, mortgages, lines of credit, and only a few months in cash reserves?”

Consider how many Americans today are unemployed and raiding their retirement accounts to keep up with debt payments or to deal with another of life’s surprises during what is going to be a very long and painful recovery.

Consider the recent revelations about the greed for your money found on Dull Street (formerly Wall Street) and in the halls of government by the Dolts in DC (all 535 in Congress and the 43,000+ lobbyists that feed them).

Can we afford to be silent about the conditions that have led so many to or over the brink of financial ruin?

Isn’t it time for Americans to withdraw from tax-qualified plans, get their money out of the banking, investing, and tax systems, and put it where they and they alone have control?

By Jeffrey Reeves MA, youbethebank.com

Filed under: Ethics and Morals, Personal Economy, credit, debt, economics, economy, ethics, financial, interest, investing, investments, Money, Retirement, risk, saving, savings, Taxes | 1 Comment

This post is mainly a link to a powerful assessment of conventional wisdom about the future of the US and the world economy by Jim Welsh, an investment advisor/economist that has been right more often than wrong.

Jim Welsh of Welsh Money Management has been publishing his monthly investment letter, “The Financial Commentator”, since 1985. His analysis focuses on Federal Reserve monetary policy, and how policy affects the economy and the financial markets.

This newsletter is dense, loaded with statistical data, and won’t be an easy read for the casually interested.  It is worth the time and energy you’ll need, however.  There will be a follow-up to this post that will deal with the Ethics of Advising Investing to Middle America - or something like that.

By Jeffrey Reeves, MA, Master Money for Life Guide, youBEthebank.com, ltd.

Filed under: Ethics and Morals, What others have to say, economy, energy, financial, investing, investments, Life, Money, policies, undefined, wisdom | Post a comment

The two most frequently asked questions posed to Money for Life Guides are:

“Why haven’t I heard of the Money for Life Model for Creating and Managing My Personal Economy before now?”

and…

“Why isn’t everyone using the Money for Life Model?”

However, one group of people (those who learned about this model years ago but whose thinking was trapped in the failed Debt Paradigm) are hanging out with the Three Stooges.

If Only…

On the one hand, they are wondering, “How much better our lives would be if only we had adopted the Money for Life Model ten years ago when we first learned about it.”

Truth be told.., if they had dedicated $10,000.00 a year to creating and managing their personal economy starting in November, 1998…

• had they chosen to invest that money in stocks, bonds, and mutual funds they would have had about $92,500.00 dollars in their accounts at the end of 2008 based on the performance of the Dow Jones Industrial Average.
• on the other hand, had they chosen to deposit that money into a Money for Life Account with guaranteed growth, they would have had almost $130,000.00 net of taxes, fees, and commissions.

 Someday I’ll Get Around To It…

These folks may still be living on Someday Isle where the currency is A Round Tuit.  They may still believe the failed advice to “be patient,” “hold on,” “wait for the rebound,” and, most damaging of all, “think long-term,” strategies designed to keep your money in a Behemoth’s account.

They believe that the recession will be over soon; that the economy of America and the world can be propped up with more government, more government spending, more government borrowing.  They are convinced by the Dummies on Dull Street (formerly Wall Street) and the Dolts in DC (all of them) that giving control of their money to some Behemoth corporation, union, or government agency is somehow better than keeping it in accounts they control.

The time to change is NOW.  Hear to what John Mauldin, a brilliant economic thinker, wrote in his weekly newsletter on May 1, 2009…

Next year, we will be entering what will certainly be the most dangerous era in my lifetime for the US economy. It is not clear what will happen. There are a lot of paths that can be taken…While I think the most likely outcome is a long Muddle Through recovery, the likelihood of a lost decade of deflation a la Japan is a very real potential outcome. And the possibility of stagflation and a seriously impaired dollar is also quite real…Investors, businessmen, and entrepreneurs need to be as nimble as possiblle. A free market will figure out what paths to take, and I am still optimistic about the long term. But we have some very dangerous times in front of us, and we need to be realistic.

http://investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/05/01/sell-in-may-and-go-away.aspx

What if…

It’s time to get off Someday Isle and learn how to grow rich without risk and secure wealth without worry.  If you had left the island in 1998 you would obviously be better off today based on the example above.  Howevr, it doesn’t tell the whole story.

The money you held in your Money for Life Accounts would not have been idle.  In addition to the growth referenced above, your money would also have been doing double duty…

• You could have borrowed from your account to buy a car and repaid yourself instead of the bank.  That alone would have saved you thousands of dollars that you could have used to create a second Money for Life Account.
• You could have borrowed again to go on a grand second honeymoon, repaid that too, and saved the thousands of dollars - that would otherwise have been paid in credit card interest - in Money for Life Accounts.

The possibiities are endless.

by jeffrey Reeves MA, youBEtheBank.com

Filed under: Money, Personal Economy, What others have to say, bonds, credit, debt, economics, economy, investing, investments, Money, risk, saving, savings, stocks, Taxes | Post a comment

The MoneyforLife Blog will keep you posted on the progress of the almost century old Shenandoah Life Insurance Company as it emerges from receivership.  What’s important to note is that this relatively small mutual insurer seems to have invested prudently and responsibly based on the support the US Congress gave to publicly held Freddie Mac and Fannie Mae.

Shenandoah Life has limited resources and cannot invest in large scale projects the way the Behemoths do.  It must invest its capital based on generally available information from what it - and most others - would consider reliable sources.  In this case the US Congress and the finance committees of the two houses were “sleeping with the enemy.”  They were receiving significant campaign contributions from Freddie and Fannie and, at the same time, were aware of the great risks associated with the lending practices and portfolios of these two Behemoths of the mortgage industry.  The committee power brokers intentionally withheld that information from the public - and Shenandoah Life and its policyholders are part of the public.

While dozens of financial institutions - mainly banks - are failing due to the irresponsible behavior of the entire industry and the failure of the Congress to exercise adequate oversight (not control), Shenandoah Life is the first casualty among life insurance companies. (No, AIG is not a life insurance company.  It is a conglomerate Behemoth that owns life companies.  Those life companies are doing OK.)

The cautionary tale here is that the 31 State Guarantee Associations will protected and preserved the personal wealth of Shenandoah Life policyholders.  The federal folks, who contributed so significantly to this unfortunate failure will beat their chests, complain about executive compensation and divert attention away from their past and ongoing failures.

Stay tuned.

Here’s the Notice of Receivership… 

“On February 12, 2009, pursuant to Title 38.2, Chapters 10 and 15 of the Virginia Code, the Circuit Court for the City of Richmond issued an Order that appointed the State Corporation Commission of the Commonwealth of Virginia as Receiver of Shenandoah Life.

Receivership is a protective measure established under Virginia law to protect policyholders in the event an insurer experiences financial difficulty. The Circuit Court for the City of Richmond found Shenandoah Life in a condition where any further transaction of business would be hazardous to the policyholders, creditors, members, and the public. Both Shenandoah Life and the State Corporation Commission determined that the receivership was necessary to protect the interests of policyholders and creditors.

For additional information regarding the receivership, please visit our web site www.shenlife.com, or you may contact Shenandoah Life at 1-800-848-5433.”

by Jeffrey Reeves - youBEthebank.com

Filed under: Ethics and Morals, What others have to say, aig, bank, behemoth, Congress, financial, insurer, investing, mortgage, mortgages | 2 Comments

An article, Turmoil Spooks 529 Holders, published in the National Underwriter on 4/20/2009 By TREVOR THOMAS indicated a flight to safety by some parents and grandparents that were putting money aside in 529 Plans for the college educations of their children and grandchildren.

This is one more indicator that America is waking up to the reality that Wall Street and the Dolts in DC have been telling us to “save” but that what they are really telling us is to gamble.  Investing is clearly very risky.  Investing that is disguised as saving is clearly a con of the lowest character.  Putting your children’s or your grandchildren’s future at risk based on a con game that you or they cannot win is foolish.

Of course, the con-artists don’t tell you that.  They project 8% gains year upon year and proclaim it the truth.  They ignore actual investor performance history and substitute generic stock market statistics that support their sales proposal.  (Sales proposals are OK when they are sales proposals.  They are a con when they are packaged as sage personal finance advice.)

A truly sage advior told me today during an interview that he makes sure his college funding proposals incorporate cash value life insurance, which is not counted when seeking financial aid, and rely on gurantees that are –>

• truth based
• objective
• verifiable

That kind of advice might just lead to reliable wealth creation and wealth preservation, intelligent legacy planning, and the perfect investment.

You might want to evaluate529 Plans that way, too.

by Jeffrey Reeves - youBEthebank.com

Filed under: Ethics and Morals, Money, What others have to say, 529 plans, college educations, financial, financial advice, investing, investments, Money, risk, saving, savings | Post a comment