Thursday, November 15, 2012

This is the New America

As I work through this new standard of an economy, I realize that the rules of 5 years ago have faded away and there must be a new approach to not only building a business but also planning for the future.  Let's face facts:
  1. There will be no recovery to the economy of the early 2000s.
  2. Real Estate prices will fluctuate dramatically
  3. Taxes will increase to fund entitlement programs
  4. Stocks, Bonds and other investments are unreliable and high risk
  5. Banks are not in the business of loaning money, instead they are there to get money.
  6. Hard cold cash is the new standard
So how do you plan and expect to save for retirement?  Here is what I think.
  • Take the largest mortgage you can at the lowest fixed rate and longest term possible.  Let the banks take all the risk on the value of the real estate.  If in fact the value increases you make out.  If it drops you lose nothing.
  • Pay off all unsecured debt like credit cards and other type loans.
  • When possible keep unreported cash at hand.  Use this cash to pay the consumable bills like food and fuel.  This can not be tracked when you pay cash.
  • Do not fund a 401k, SEP or Roth IRA.  When you get ready to take the money.  The tax will be higher in the future than if you were to pay the taxes today.
  • Save all reported income you can in an account that you can easily access.  Do not worry about the interest rate.  I suggest an account like Ingdirect.com 
  • Always try to earn cash unreported (under the table work).  Ideally you should earn unreported cash while collecting unemployment benefits.  This allows you to keep more of your hard earned money in your pocket rather than it being spread to the poor.
  • Store all unreported income in a fireproof safe that has been bolted to your floor.  Never tell anyone you have it.
  • Buy and keep available a gun.  Learn how to use it.
  • Remember that the less you earn the more the government will give you. i.e. food stamps, welfare, section 8 housing, unemployment etc.
Learn the system then work the system.  We need to get used to understanding exactly what we need to do to survive.  We have a minimum of 4 years to work through before we have the opportunity to make changes.