Mind Diverted

“The mind ought sometimes to be diverted that it may return to better thinking.” -Phaedrus

Government Retirement Plan?

“The way we treat retirees in this nation is broken…

When the government created Social Security, it was as an anti-poverty insurance program… not a way to pay for your entire retirement. In fact, it began with only a 2% payroll tax and promised to never take more than 6% of a worker’s pay.

That promise was broken.

Today, Social Security takes a combined total of 12.4% of your pay.

And what do you get guaranteed in return?

Nothing.

According to the Social Security Administration’s own website, the Supreme Court ruled in 1960 that citizens have no legal rights to Social Security, no matter how long they paid into the system.

Social Security’s costs this year exceeded its income for the first time since 1982.”

-P.J. O’Rourke

Pay Cash?

“Even if you buy a car with cash, you are forfeiting the opportunity of investing that cash and earning a return on it. So even people who always ‘pay cash’ still experience the same implicit trade-offs between spending now versus later…the real question is whether you are going to obtain your financing from a bank controlled by outsiders, versus a bank that you control.” -Robert Murphy

Financial Trust

“So much of finance comes down to confidence and trust.  And that’s because finance is about promises.  Promises to pay or deliver something in the future in return for something now.  Think about it.  A stock is a piece of paper that’s nothing but a claim on a company’s future dividends and its value in a sale or a bankruptcy.  A bond is a claim to money from a creditor in the future… and maybe some interest payments.  Your bank account balance isn’t real cash.  It’s just a bank’s promise to give you that amount of cash the next time you ask for it.”  -Tom Dyson

Money Pool

One key feature of the private reserve strategy is that one builds a pool of funds from which to finance many purchases in life.  The benefit is the interest paid returns to one’s own pool instead an alternate finance company.

Family Wealth

“The purpose of the fund [family fund] is to help individual family members enrich their lives…. Children can borrow from the fund. But if they do, they must return the borrowed money with interest. They can use the money to start businesses or pursue educations, but they can’t use it to buy sports cars or yachts.” -Mark Ford

Excess Debt?

“Never borrow money unless you know—with a high degree of certainty—the asset you buy with borrowed money will yield a return far in excess of your debt service payments.” -Mark Ford

Knowledge Instrument

“Knowledge is the only instrument of production that is not subject to diminishing returns.” -J.M. Clark

Wall Street Investing

Perhaps others are unaware, as was I, that after the initial public offering (IPO) of a company, that company receives no capital benefits from the trading that occurs on Wall Street.  Wall Street is basically a “financial product” used to help generate profit for these entities, in which they provide a “return” to the investor (or stock purchaser).  Mutual Funds are one such financial product.

“Actual wealth, or capital, is transferred to a corporation at the time of the initial public offering of the stock, or IPO.  This, however, is a one-time event.  For all the daily trading these exchanges perform, they provide no capital whatsoever for American industry.” -L. Carlos Lara     LMR     May 2013

Hard Money

“It’s easy to piddle away money.  It’s hard to get a good return on it.” –Bill Bonner