Friday, November 02, 2012

Can you afford to be rich?

A lot of time we are asking ourselves, can I afford a better car, a bigger house, a boat, a big vacation, fancy clothes, etc. When was the last time you asked, can I afford to be rich? This all based off a simple number I ran the other day. If you saved $150 a month for 40 years (compounded at 10%) you would have $956,000 dollars. At $150 a month we are not talking a better car, a bigger house, a boat, we are talking cell phone, cable tv, eating out often, packing lunches or not, etc. Most of my friends laughed at me when I brought this up, because you don't really need to get rid of your cell phone to save $150 a month. Most can just do it by working a little more and saving a little more. So if you can afford Jordan's or Tv or internet or a cell phone with data, you choose that over being rich. So why don't you choose to be rich?

Thursday, June 21, 2012

Two kids are getting ready to go to college.

Kid A has a job with the city making $10,000 per year and has saved $20,000 to help pay for college.
Kid A's parents have 6 kids, and 3 are going to college right now. They have also saved by putting away $10,000 in a 529 for Kid A that has grown to $20,000. They have struggled long and hard to make that money available for their child.

Kid B had a job but quit his senior year. He has $40,000 saved up but had it moved to his grandparents name. 
Kid B's parents have 1 kid. They have $1.2 Million in 401k's and IRA's and have $3.4 in cash value life insurance. Kid B's grandparent's are wealthy and have a 529 plan for Kid B in the amount of $50,000.

Kid A and Kid B go to the same school and Kid B gets a pell grant and other need based scholarships, Kid A gets nothing, his Expected Family Contribution is higher than Kid B's.


This is all about knowing the rules of the game. Kid B's more wealthy parents are more likely to have access to a financial planner who knows how to hide assets. Yes in theory the calculation behind EFC are supposed to benefit the poor and they do, only those poor that plan poorly. They have to plan poorly in a specific way, by not having any savings and the student not having any income. If they plan poorly but do everything in their power to prepare (saving and getting a job), then they lose out on "aid". Classic welfare trap. The smart poor would save but move assets to a grandparent's name or other trusted individual and do other "shifting" tactics. The problem is the smart poor don't remain poor so a small minority of individuals would actually take advantage of this.

Those who have thought this out have 3 decisions:
1) Don't take personal responsibility and take a chance aid will be sufficient
2) Take personal responsibility but don't plan and hurt how much aid you receive
3) Take personal responsibility, plan, and don't remain in poverty.

Sadly, most of the poor have no idea of the regulations and political web and don't take advantage of programs to help them out of poverty.

Wednesday, February 22, 2012

Unspinning the positive spin on Obama's tax words

Quote from a article praising Obama's new tax plans.

"Done right, they could raise revenue in a progressive manner without raising taxes."

How does that make sense? It only has two possible meanings.
1. Pure stupidity but classic Progressive banter. There no way to raise revenue (taxes received by Gov't) without raising taxes (Taxes paid by the people). Sounds great right? Like magic, right? Well it would be, but it sounds great and that is as far as idiots think.
2. Pure greasyness. Raise revenue in a progressive manner means what? A progressive manner means taking more from less and less from more. More taxes on the top. Though I know "without raising taxes" is an outright lie that sounds good, if total taxes paid doesn't change that means more unfair tax code that makes people making money pay more and people not paying money pay even less. Slick talk that sounds good but is more of the same class warfare rhetoric.

Oh P.S. Knowing this administration, wait until the real tax plan or changes are implemented or totally changed before taking any stock in what is said. This will either never happen and only serve as a campaign talking point, be severly watered down to push some other progressive idealogue, or happen fully tricked out with a bunch of other crap that is unpopular and we had no idea was going to happen.

Tuesday, January 31, 2012

Obama, GM, and Bain Capital

Comparing the GM bailout and Bain Capital is usefull and ludicrous. First of all both did the same thing, both present infusions of cash usually and a dramatic restructuring of the company. Both normally cause layoffs in order for the company to remain viable for the future. Both have risk. Both seem to be a mixture of success and failure.

It is ludicrous though because of where the cash came from. Bain has cash as a company and took investments from willing investors who believed leadership could make a profit, they chose to take the risk. Obama's money came from take payers who are forced to give money to the government and do not understand or choose to risk their money and do not stand to make a profit (nor did they.) Layoffs and hurt came to GM but not to the unions and union bosses who Obama took great pain to time when and who could sell stock before the price fell. Employees and factory workers took the fall. Democrat allies, not so much. Some of Bain's moves ended in both people losing jobs and losses. Some is the price that willing investor's pay. GM is looking to lose about $23B of taxpayer's dollars.

I know that Obama is going to attack Romney's business credentials. People will love it when he points out that people lost jobs and people will love it when he points out that Romney made money. That is the success and failure of Bain and people think negatively of both. Insane. Also notice how Obama will say, "I saved x number of jobs at GM." First of all, overall jobs went down, second of all you didn't save them, you paid for them with tax payer dollars. Give me $23 billion and I'll create thousands of jobs, and make a really large and beautiful park or thousands of new schools or something. Obama like to claim his results are better than the worst possible scenario, forgetting the same goes for Bain, who steps in on companies going bankrupt. What is the best possible scenario if the company followed what Mitt proposed? Would we be seeing the same results without the $23 billion loss to taxpayers? If there was a $23 billion loss, it would be investors who willingly put their money at risk, not me, who abhors giving any money to a government to poor at managing money.

Tuesday, November 22, 2011


In classic blogspot fashion when I went to publish this it deleted.
In classic BlakeGray fashion I forgot to ctrl+c it first

Yes, the stimulus saved current jobs and provided for future jobs.
Yes, but at the cost of current and future jobs.

Occupy wall street does not like how much "wall street" makes,
they also frame as the principle reasons of this problem the policies of Bush and Reagan.
Wall Street made more in the first 2.5 of Obama than in all 8 years of Bush.

Romney won't win because.....
he is not a "conservative republican" - The Evangelist
he is wierd - Obama Campaign Team
Insert instead "He is Mormon" and you get the same argument

Jack Welch is one of Obama's key men
Jack Welch took home $550 Million from 1997-2000
Jack Welch made an additional $200 Million in sale of stock options, selling most shares at $55 dollars a share before the value plummeted to about $23 today.
Now he makes a measly $357,000 from his pension and $377,000 for his consolting services, PER WEEK!
Maybe it is easy to stand by while your leader lambast selfish and unethical CEO's while continue to get rich. So when Obama or Jack are on the trail blasting selfish and unethical CEO's remember,
Jack Welch is one of Obama's Key men

The top five CEO's took home 4.8% of Corporation's profit in the 1990's (kind of ridiculous)
The top five CEO's took home about 10.3% or all Corporations profits around 2010.(Really ridiculous)
What is it that enabled or allowed the top 5 CEO's to take 1/10 off all profits home. ALL PROFITS created by ALL employees of the corporation. Madness.

Thursday, August 04, 2011

2 quotes from a recent article, and 2 articles!

"The new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium."

"Moody's said Tuesday that the government needed to stabilize the ratio at 73 percent by 2015 "to ensure that the long-run fiscal trajectory remains compatible with a AAA rating.

hmmm so what you are saying is that we need to cut our debt by roughly 25% by 2015 to ensure our trajectory stays compatible with a AAA rating. Likely..... not. of course we could keep our dept the same and just let our GDP grow, let see it would have to grow by a rate of about 7.5% over the next for years assuming our GDP ends in 2011 at $14.75 Trillion. Congress is cheering about reducing our spending by $2 trillion over the next ten years. Assuming a rate of growth of 2% of GDP we would have to cut our debt by about 4 Trillion in 4 years to meet their trajectory. Truth is the current plan still plans to raise the debt by $7.5 trillion over the next 10 years.

Amazing.... Amazing

Tuesday, July 05, 2011

New American Slave Trade

Who is it that is selling or sending Mexicans to America to work for lower wages and worse working conditions? (supposedly) Who is it that is forcing them to work in bad circumstances? Who is organizing and creating illegal ways to get to America from Mexico? It is not, by-and-large, America, it is Mexico. Akin to tribal Africans who sold captives into slavery (not just to U.S. slave traders) are those who pressure, force, or create the situation driving Mexicans to extreme measures. It is not Americans who enslave them, it is Americans who exploit them. I do not agree with either, I just see pictures of Mexicans piled into semi trucks and think of slaves chained in ships. Who is driving this? Is it America's responsibility? Do they also have a right to our goods?

Blake Gray