My Thoughts Regarding Wealth Redistribution

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Much of the rhetoric we’re hearing in the media today talks about the huge gap between rich and poor. Politicians on both sides discuss this issue, but neither seems to get to the root of the problem.

It’s true that the gap between the richest 10 percent of the country and the remaining 90 percent is growing, but from that point on, most politicians get it wrong.

The issue isn’t a matter of “wealth redistribution”, nor is it about protecting current tax rates. The real issue at hand is that most Americans just don’t understand the rules of personal finance. They believe what they hear from friends or people selling them products. It comes down to a lack of financial education.

Schools are turning out students who are not fully prepared for the real world. They might know the basics of history, science, math, and English, but there is no real teaching of money in school. I majored in economics and finance and I spent 25 years on Wall Street honing my skills, so I know firsthand how boring the topics can be. But I’m not talking about the heavy theory or detailed rules. I’m talking about simple personal finance — the money issues that will come up for people in the real world.

It is a sad fact today that when students they break out on their own, they are left unarmed when sellers of credit come calling. To be clear, it’s not that people are dumb — the sly and ingenious credit card companies make handling credit seem easy. But either way, the new consumers don’t see or know that taking on debt at a young age is killing their financial security. Saving at a young age is critical. Simple facts about personal finance are not taught and thus bright people are caught making financial mistakes.

Plans to redistribute wealth take money from those who know what they’re doing financially and give it to people who don’t know basic financial principles. The subprime mortgage crisis was a perfect example of that. Hardworking taxpayers were paying to bail out banks and individuals who made negligent transactions. People who were financially ignorant were allowed to take big loans from equally ignorant (or in some cases, criminal) mortgage brokers. Greed from Wall Street made it worse. Had more people known about simple financial principles, this would not have happened, nor would we be arguing about how to pay for it.

It’s not a matter of fiscal theory or taxation. It’s all about education. I’m not a fan of big government, but this is one place the government can step in and help. If there were mandatory programs for graduation that included personal finance, our economy could be on the right track in a generation or two.

While no politician is doing much to solve the real issue here, I think that we as entrepreneurs can begin to fix this problem. Have lunch with your staff and teach them about personal finance. If you’re not up to teaching the class, bring in an expert. Make sure the expert isn’t selling something or else you could be adding to the confusion. Refer them to the Financial Policy Council and start attending our events.

If we start by educating our staffs, we can work to build a financially intelligent country and get back on track at the same time. Plus, isn’t this a great benefit to give to the people who make your company work? If you invest in their financial knowledge, I’m sure it will help your bottom line.

I strongly believe any redistribution of wealth by the government, in either the executive, legislative, or judicial branches, has no place in a free, democratic society.

Some of our politicians reach for all the favorite conservative buzzwords. But they fail to cite any evidence to refute the simple, and I think quite obvious, assertion that the marketplace works most efficiently when entry of new businesses is a realistic possibility and predatory pricing is outlawed. That’s what the antitrust laws are supposed to accomplish. And business people who compete fairly and squarely need not worry about them for a moment.

You know you are capitalism’s ideal puppet when winning the lottery is your only chance to realizing financial freedom.
Want to change the outcome and start truly learning the process? The Financial Policy Council is the place to be. See for yourself.

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Wealth Takers v/s Wealth Creators Some food for thought

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The natural state of our economy is prosperity. Freedom guarantees that. The only force capable of undermining it is government. It is high time to realize that all important fact.

It is clear that we are still stuck today in the worst economic recovery since the Great Depression. Despite all the disinformation and market manipulation out there, our economic weakness has now become a top national security threat.

Did the market fail or did the government fail? If so, how? I have made my business career by asking the right questions. Are we working on the right problem? Do we have the right people? Are we close enough to the action? My strong suit is to ask questions until the bottom line is found. Are you asking yourselves these questions or taking at face value all what you’re being fed by our supposed “economic and market gurus” out there?

I believe even the most well-meaning government policies have unintended consequences that have harmed the economy. If government policies were held accountable the way private businesses are, the scoreboard would say government is failing to help people. What do you say?

In my humble opinion, there are few problems in the world that economic prosperity cannot help solve. Yet the engines of that prosperity are under fierce attack. The forces that seek power over others have gained the upper hand against those that seek freedom. By harming wealth creation, they cause even more strain on society. Historically, this is nothing new. State domination over its subjects has roots that connect statism, totalitarianism, communism, and socialism to more modern-day variants of liberalism and progressivism. It is a constant fight and we must win.

It is a fact that the forces against wealth creation accelerate when the Progressives are in power. More recently, they forced “Obamacare” and “Dodd Frankenstein Financial Deform” upon us. We now face a perfect storm. One only needs to observe the unrest across the world to imagine what life will become here if we don’t get our economy turned around very soon.

But how? It is not as though people lose sight of simple principles in a complex society as much as it is a Progressive tactic to confuse people. For example, if the world consists of two farmers, and one is paid government benefits, who pays? Exactly. The other farmer pays. Redistribution is a negative-sum game, and people understand that. In another example, if one farmer raises cattle and the other grows vegetables, they are both better off through voluntary trade. Making other people better off is the only way to satisfy your needs. Is it bad that some people make many people better off? Do you deserve a special attack by government if you make millions of people better off? Voluntary exchange is a positive-sum game.

After all, trade and wealth creation is not all upside. It is failure, too. Failure is a necessary component to growth and success. Babe Ruth struck out 1,330 times but also hit 714 home runs. We need to let failing entities fail. Only then will successful people turn these enterprises back into wealth-creating vehicles again. “Too big to fail” is a concept that perpetuates failure and saps vitality from the rest of the wealth creators to do so.

Bottom Line: Wealth creation is not a business suited to those whose skill set consists of voting “present.” It requires decision making, risk taking, hard information, discipline, insight, and intelligence.

We have clearly gotten away from the 10th Amendment. The only equal outcome for all that can be achieved by the federal government is misery for all. It is not that people shouldn’t be helped. It is that in most cases, it is not the role of the federal government to do so.

After all is said and done, in whose hands should you place your trust for improving the economy? An entrepreneur, whose job it is to solve problems for a profit? Or a bureaucrat, whose job it is to cause problems for a profit? I know where I put my trust, and I’m sure 90 percent of us agree.

We outnumber them, so let’s act like it. After all, the American Dream isn’t a house, or any property, or the consumption of any good. It is to be productive creating wealth.

It is real sad that the very people whose policies unleashed the attacks on our economic foundation are today waging a full-blown assault on the true wellspring of business formation, innovation, and job creation: the wealth creators.

When you see how the Washington–Wall Street corridor, which I call the “Chaos Industry”, profits at the expense of average Americans, what are you waiting for to take action?

The turnaround must come from outside of the Washington establishment. It must come from us.

Battle lines have been drawn. On one side of the battle are the fakers and takers. On the other side, all of the wealth creators. Who offers you more opportunity?

The Founding Fathers did their job. I strongly believe we must be the “Defending Fathers”. What do you say?

One of my favorite political lines on the campaign trail comes from former U.S. Senator Everett Dirksen. He once said, “When they feel the heat, they will see the light.”

Share your thoughts….

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Stop Procrastinating and Find a Reason to be Rich

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I believe each one of us has a financial genius in him/her that is asleep and just waiting to be awakened. It lies asleep because our culture has educated us into believing the wrong things about money. We’re taught to be employees and work for money rather than to be entrepreneurs and investors and have money work for us. We’re taught to not worry about our financial future because our company or the government will do that for us.

I also believe the best revenge against liberals and corporate bosses idiots is “obscene wealth”.

The message about money we’re taught from a young age is work hard, earn money, spend it, and when we run short, borrow some more. Unfortunately, 90 percent of the Western world subscribes to the above dogma, simply because it’s easier to find a job and work for money than to make your own way and build your own wealth.

But to those who want to buck the trend, I have 10 ways to awaken your financial genius which I’ll share with you over the next couple months.

The first is Find a Reason.

If you ask most people if they want to be rich, they say “yes.” But then reality sets in. They realize it’s a lot of work to become rich. There is no getting rich quick. Facing these obstacles, they throw in the towel and take the easy route—getting a job and handing investments over to a pathetic broker.

Yet, there are clearly those in life who don’t take the easy route. And there are those who are wildly successful where others aren’t. What separates the successful from the unsuccessful? The answer is found in a reason.

A reason is simply a combination of “wants” and “don’t wants.” My reason for getting rich began with my “don’t wants,” which defined my “wants.”

I don’t want to work all my life. I don’t want what my parents aspired for, job security and a house in the suburbs. I don’t like being an employee. I don’t want to be emotionally absent from my family and friends because I’m always working to make ends meet. I don’t want to have nothing to pass on at the end of my life.

Out of these “don’t wants,” I developed my “wants.”

I want to be free to travel the world and live the lifestyle I love. I want to be young when I do this. I want to be free financially. I want control over my time and my life. I want money to work for me. I want to be a “master of the universe” and say whatever I please to anyone without fear of being fired or looked upon as an outcast. Well, money is the only way to get me there and insulates me from all the dependence crap out there.

Personally, I’ve faced many setbacks in my road to riches. I’ve lost a lot of money and seen many deals fall through. I wanted to be financially free by age 30, but it took me until I was 34, with many learning experience along the way. But through it all, my reasons pulled me through.

Today is the day to determine your reason for getting rich. Make a list of your “Don’t wants” and your “wants.” Make sure that your reason is strong and determined. If you find the right reason, I promise you that you will find a way to get real wealthy But it all starts with you.

Stay tuned to my 9 other ways over the next few months… In the meantime, share your thoughts

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Why Wealth Bashing? – Financial Policy Council

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It is an oft-repeated axiom that a person can learn a whole lot about a society by how it treats its poor; but just as much may be learned by looking at how that same society treats its rich. Indeed, the economic future of the poor—and our nation—will be determined in the coming decades by how we treat the people in this country who create great wealth. It will be determined by our understanding of the so-called rich and by our need to foster and protect this minority of true wealth creators.

It is an unpopular thing to say, I know. Rich people need help? Rich people need to be protected? Rich people a minority? “Give me a break,” people say. “They just seem to keep getting richer!”

I am talking here about the entrepreneur who risks all of the capital he can muster from his family and friends to build a company that fills an underserved niche in the market, provides a needed service, or develops a new technology. These are the people the plundering bureaucrats and career politicians have deemed “the rich.” These are the people they have targeted for appropriation to support their unsustainable way of life.

In their narrow view of the world, rich people become “rich” by either inheriting their money or appropriating wealth through manipulation of the system with their cronies, or are self-made entrepreneurs.

The first group is so small that they don’t really matter. The second group is easy for the bureaucrats to intimidate and the politicians to plunder with ever-widening regulations and more oppressive oversight; but, again, there are not that many people who fall into the crony-capitalist category. The overwhelming majority of people I refer to as “the rich” are independent-minded, maverick entrepreneurs and business owners who risk their own capital, sweat, and tears to provide a good or service of value to the world around them.

Regrettably, too many Americans, and far too many of the intellectuals and politicians, understand neither these people we call “the rich” nor the methods they have used to become rich in the first place. Did hedge fund managers and investment bankers game the system and walk off with a lot of money? Yes. But, again, having a lot of money no more makes you rich than growing up next door to the Greenwich Country Club gives you class. The rich are people like Bill Gates, Warren Buffett, Larry Page and Sergey Brin, and Michael Dell. They have provided value to the world and been rewarded for their efforts. They also know, better than the federal government, how they should best utilize that wealth.

Most people don’t think they actually know anyone who is truly rich. Not really. They experience them in the abstract, through magazine articles, newspaper stories, or Lifestyles of the Rich and Famous clips. They catch a glimpse into their psyches through statements they make in the media or interpretations of their latest business maneuver. They try to quantify their importance in their own lives by studying policy statements and annual reports or poring over ratings and statistics that rank their net worth and their influence; but the study and the analysis is always through the prism of someone else’s ideological lens. In that respect, our opinions about the rich are a sort of societal inkblot test, revealing more about ourselves than anything else. Our analysis of the raw data confirms our deeply held notions about the rich and, in the end, has more to do with our views on capitalism itself.

Those who are vested in the philosophy of the Left, believing capitalism creates unfair outcomes, have statistics to confirm their outlook. It seems absurd on its face that the top 1 percent of American families control 90 percent of the nation’s wealth. Wouldn’t it be possible, they ask, to contrive an economy that is just as prosperous but with a fairer distribution of wealth? Couldn’t we cap the earnings of the rich at $50 million? Or even $100 million? The defenders of capitalism and free markets on the Right say “no.” They contend that the bizarre inequalities we see are an indispensable part of the processes that create wealth. They imply that capitalism doesn’t make sense, morally or rationally, but it does make wealth. So don’t knock it, they say.

What nonsense! It has very little to do with the reality of the rich. It is really quite sad that defenders of the rich or even the rich themselves can’t come up with a better economic or moral case! Quoting Adam Smith and supply side economists just doesn’t cut it. American novelist and homespun philosopher Mark Twain reportedly noted that a person can lie with the numbers but the numbers don’t lie. The rich have most of the money. That’s why they are called “the rich.”

So who are the rich?

To begin with, you probably won’t find many rich people in the Who’s Who or Most Likely to Succeed lists compiled during their high school or college days. They probably didn’t get the highest SAT or ACT scores in high school, and they probably weren’t considered a member of the popular clique by their classmates. They are certainly not the best looking, and they probably didn’t get where they got through the force of their personalities, charisma, or celebrity. A great number of the richest among us never finished high school, and many who did manage to get into college never graduated. That’s because the rich in this country are chosen not by blood, credentials, education, or service to the establishment. The rich become rich based on their performance and their relentless desire to serve the customer. The entrepreneurial knowledge that is the crux of wealth creation has little to do with glamorous work or with the certified expertise of advanced degrees.

Great wealth rarely comes from speculating and creating nothing. The John Paulsons of the world are a very small and very lucky group. Most major wealth creation comes from doing what other people consider insufferably boring: navigating the tedious intricacies of software languages, designing more efficient garbage collection routes, or designing a system for stocking fresh products on the shelves in grocery stores is not glamorous. These people don’t immediately conjure images of mansions, limousines, and vacations in the hottest spots of the world in Gstaad, Monte Carlo, or Cabo San Lucas.

Improving the speed and efficiency of butchering livestock, customizing insurance policies, or tramping the wilderness in search of petroleum leases seem far removed from the glamorous life. Memorizing building codes, speeding up the delivery of a hot pizza, or hawking pet supplies all seem like mundane and tedious tasks, but these are all paths that individuals have taken up the mountain of accumulating wealth in America. In short, America’s best entrepreneurs usually perform work that others overlook or spurn. They do it better, faster, and at a better price than the competition. For that, they become the rich.

Because these men and women often overthrow rather than embrace established norms, the richest among us are usually considered rebels and outsiders. Often, they come from places like Omaha, Nebraska; Blackfoot, Idaho; or Mission Hills, Kansas—places usually mentioned in New York either with a condescending smirk or as the punch line of a comedy routine. From Henry Ford to Apple cofounder Steve Wozniak, much of America’s greatest wealth creators began in the “skunk works” of their trades, with their hands on the intricate machinery that would determine the fate of their companies. Bill Gates began by mastering the tedious intricacies of programming languages. Sam Walton began with a nickel-and-dime Ben Franklin variety store in Newport, Arkansas. Larry Page became the first kid in his elementary school to turn in an assignment from a word processor because his parents were both computer science professors at Michigan State University. Familiarity with the core material, the grit and grease, the petty tedium of their businesses liberates entrepreneurs from the grip of conventional methods and gives them the insight and confidence to turn their industries in new directions.

The truth is that great wealth is often created by the launching of great surprises, not by the launching of great enterprises. Unpredictability is a fundamental part of great wealth creation, and, as such, it defies every econometric model or centralized planner’s vision. It makes no sense to most professors, who attain their positions by the systematic acquisition of credentials pleasing to the fraternity of their peers. By their very definition, innovations cannot be planned.

From the outside looking in, one would assume that once wealth is acquired, life becomes one endless vacation full of idle play and relaxation. One would be quite wrong. The richest among us are faced with another equally daunting task once they have accumulated great wealth. Just as a pot of honey attracts flies as well as bears, it doesn’t take long for a seemingly endless stream of bureaucrats, politicians, raiders, robbers, relatives, short-sellers, long talkers, managers, missionaries, and manipulators to come calling. They all have this strange notion that they can spend your money better than you can and are somehow entitled to a portion of your money for granting you the privilege of their expertise. They are, for the most part, leeches, con artists, and moochers.

Leading entrepreneurs in general consume only a tiny portion of their holdings. They are often owners and investors. As owners, they are initially damaged the most by mismanagement or exploitation or waste of their wealth. Only the person who created the wealth has a true appreciation of its value and what it represents. As companies such as Oracle, Lotus, and Google have discovered, a software or tech stock can lose most of its worth in minutes if fashions shift or investors question management decisions.

A Harvard Business School study recently showed that even when you put “professional management” at the helm of great wealth, value is likely to grow less rapidly than if you give owners the real control. A manager of Google might benefit from turning it into his own special preserve, making self-indulgent “investments” in company planes or favored foundations that are in fact his own disguised consumption. It is only Sergey Brin and Larry Page who would see their respective wealth drop catastrophically if they began to focus less on their customers than on their own consumption. The key to their
great wealth is their resolution not to spend or abandon it, but to continue using it in the service of others. They are as much the servants to as the masters of Google.

This is the other secret of the richest among us and of capitalism itself. Under capitalism, wealth is less a stock of goods than a flow of ideas. Economist Joseph Schumpeter set the basic parameters when he declared capitalism “a form of change” that “never can be stationary.”

The landscape of capitalism may seem solid and settled and ready for seizure, but capitalism is really a mindscape. Volatile and shifting ideas, and the human beings behind them, are the source of our nation’s wealth, not heavy and entrenched establishments. There is no tax web or bureaucratic net that can catch the fleeting thoughts of the greatest entrepreneurs of our past or our future.

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Wealth Creation Tips and Strategies

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As the 2012 Presidential Election becomes a two-person race, improving the nation’s precarious fiscal situation must be the candidates’ top priority. There are several issues the candidates must address in order to return the U.S. to its former glory as an economic powerhouse. These include: the repeal of harmful legislation, an equitable tax system and the abolition of the Federal Reserve.

One of the first ways of beginning that process would be to repeal all of the anti-opportunity legislation that has been foisted on the American people in the past few years. For example, we could repeal the McCarran-Ferguson Act and allow health insurance providers to compete openly for customers on a national basis. Allow health care providers to compete in the marketplace, charging for their services what the market will bear instead of what the insurance company will reimburse. This would bring more market pressures to bear in the health care industry and bring costs down. If it were coupled with meaningful tort reform legislation that would curtail frivolous lawsuits and shift legal costs to the losing party, we could have world-class health care that was available and affordable.

It is fairly obvious to most American citizens that the U.S. Tax Code has become a truncheon used to beat the American people into lockstep. The actual legislative code is more than four times the length of the Christian Bible and is full of incomprehensible and contradictory exceptions and exemptions. It is an unjust piece of legislation that hinders and manipulates economic activity. It is enforced by an agency that is far too often the antithesis of the basic American principles of due process and equitable justice.

The time has come to replace this punitive tax system, which seeks to appropriate a portion of our income with a tax system that collects revenue on positive economic activity only. In that way, legislators would be less inclined to pass laws that inhibit economic growth or penalize success. Their actions would have a direct impact on the amount of revenues generated.

The FairTax provides people the option of opting out of taxable activity without inhibiting economic activity. It also fairly distributes the burden of supporting government across everyone who reaps the benefits of our society, everyone who chooses to purchase something new without regard to the source or amount of the customer’s income or other personal information.

The FairTax gives everyone an automatic pay raise because of the elimination of all forms of income tax, including individual and corporate income tax, capital gains tax, and estate taxes.

It is a replacement for the existing tax system with an embedded personal consumption tax of 23 percent of all goods and services sold at the retail level. It is not collected on the sale of used or previously owned items, only new transactions.

If a person worked 40 hours for $10 per hour, his paycheck would be for $400, instead of the $292 it probably is now. The average 22 percent of business taxes that are currently embedded in everything we purchase would be eliminated. And everyone would receive a monthly payment to cover the sales tax up to the poverty level.

Once enacted, the FairTax law would immediately repeal the Sixteenth Amendment, and the Internal Revenue Service would effectively become a bookkeeping department for the Treasury. The number of attorneys in Washington, D.C., would plummet because there would be no reason for many of the lobbyists on K Street to continue operations.

Congress has shown that if given the choice between incrementally increasing the tax rate and dealing head-on with overspending issues, they will increase the rate. Plus, with the flat tax, we would still be competing with lobbyists and special-interest groups for the undivided attention of our duly elected representatives.

The Federal Reserve was chartered in 1913 in response to public clamor over bank runs and credit deficiencies. Its stated purpose was to manage the government’s monetary policies and hold inflation in check. In reality, the central bank shields the commercial banks in its cartel against true market competition and enables all banks to expand together so that one set of banks doesn’t lose reserves to another and is forced to contract sharply or go under. The Fed enables its cartelized commercial banks to inflate money and credit together by pumping reserves into the banks via demand deposits and bailing them out when they get into trouble. This creates a false sense of prosperity with easy credit, which leads to excessive risk taking and overleveraging—boom and bust. The only way to stop the cycle is to eliminate the cause: the legalized counterfeiting that constitutes and creates the inflation.

Liquidating the corporation that is the Federal Reserve and returning to a monetary system based on a market produced precious metal, like gold, which is represented by a currency printed and managed by the U.S. Treasury Department as stipulated by our Constitution. The assets currently owned by the Fed should be liquidated and parceled out on a pro-rata basis to its creditors. All we need is the will.

We should make it crystal clear that Americans are fed up with funny money, bailouts, and crony capitalism. Any efforts to disrupt our national economy by an outside agitator should be looked as a threat to our national sovereignty and dealt with accordingly with extreme prejudice.

People succeed or fail on the merits in America, not on who they know or whose reelection campaign hey supported. This absolutely American principle must be reestablished and permanently fortified.

There can be no more “too big to fail.” If you are reckless, greedy, and arrogant, the American taxpayer should not bail you out.

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