It's about the Spending Stupid

Are you listening to all of talk about government spending? It's all about how to increase revenue to pay for things:

• Let the Bush tax cuts expire to pay for the trillion dollar stimulus plan.
• Raise taxes on capital gains and dividends.
• Raise the gasoline tax or tax drivers per miles driven to pay for roads.
• Raise the price of a stamp to "bail out" the post office.

Here's an idea. Cut spending. I mean real cuts, not the political BS where cuts mean smaller increases. Yes I know we are in a recession and we need to increase spending short term to provide a soft landing. But this should be temporary spending. That's why I don't like the package that passed.

The discussion needs to be about cutting spending. As a company grows, there is inherent inefficiencies and excess spending. If you want to survive you make cuts - you go Lean.
That'is what our government must do. Here's an example:

They are talking about eliminating Saturday mail delivery. That is a great idea. I don't think we need Wednesday delivery either but that's just me. This should either reduce the number of mail persons needed or the amount of pay they receive, or both. It should also reduce the need for further stamp price increases.

I'll bet you a 50 cent stamp that's not going to happen!

Our Current Orwellian Moment

Remember George Orwell's 1949 novel "1984" ? I remember reading it in high school. I was struck by the concept that the government had so much power and control that it could change and manufacture the truth and even re-write history. While Mr. Orwell was off by a few decades, his vision is becoming eerily more poignant.

Let's talk terms. I define Global Warming as meaning humans influence on our climate. Climate Change is the term I use to talk about natural changes in temperature of the decades based on nature's influence (sun activity, winds, etc).

The major report supporting Global Warming is the IPCC report. IPCC stands for Intergovernmental Panel on Climate Change. The mere name implies government influence. All of the hysteria today has been caused by this biased report funded by people with larger agendas. There is plenty of bad science that was used to support Global Warming claims but government funding supports the science so what would you expect?

There is a much better report out by the NIPCC. NIPCC stands for the Non-governmental International Panel on Climate Change. This organization, by name, is not motivated by ulterior agendas, it is just based on science.

Here is a link to this report. http://www.sepp.org/publications/NIPCC-Feb%2020.pdf . I warn you, it is a bit dry, full of a lot of technical information, and you may not understand all of it (God knows I didn't). But you'll get the idea that we are about to make a lot of major policy decisions based on bad and biased science.

Of course we have Climate Change. We've had it since the Ice Age. We have been warming since then. We've been warming before we developed the internal combustion engine and the power plant. Data shows we've had some cooling periods as well. As humans we like to think we have more power and influence then we really do but Mother nature still has the final say.

So here's my idea. Let's work on developing alternative fuels so we can lessen our dependence on foreign oil. Let's try to conserve when possible because it's just smart and it'll save us money. But let's do this on our terms, based on good science, and in a framework of capitalism.

Let's make George Orwell wrong a little longer.

A Great Time to Buy a House?

Of course we all know about the housing market crisis by now. Prices went through the roof (no pun intended). Builders over built. The sub-prime mess contributed to the current economic downturn. Yes it obviously is worse than most of us expected (me included). But the great reality is that out of every "disaster" comes opportunity. And you may just be in a great position to benefit from this crisis.

Yes it is a great time to buy a house!! It is a phenomenal time to buy a house. Supply is greater than demand and that means home prices are down dramatically. So are interest rates. I just refinanced for 30 years at 4.875%.

An important thing to remember however is that it is also a tough time to sell a house. So you will need to take that into account. But if you are currently in an apartment, have good credit, and can manage a reasonable down payment, go for it. And remember, the new stimulus bill is going to give first time home buyers a nice tax break. While I hate government give aways we'd all be fools not to take what they're offering.

Just look in the mirror

Oh I love when current events play into my philosophy!!! So Congress pushes through the stimulus bill. Great. It is filled with more pork than a Texas barbecue. What's worse is that most of the jobs it may create are government jobs (supposedly temporary but we know better).

We have got to stop looking to the government to provide for the people. Entitlements will bring down our democracy and we are fast becoming a nation of entitlements. I think it is ironic that one of the most famous inaugural speech quotes "...ask not what your country can do for you—ask what you can do for your country" came from JFK - a Democratic president. My how far we've come! As Obama stumped for this "stimulus" package, I heard too many people asking "How can you help us?"

It is time to help yourself. This blog is committed to helping people who are willing to do just that. Assuming you are an adult, only you are responsible for you. If you are not on board for that then there is no need to check back here anytime soon.

It takes Discipline

3 Goals 3 Investments - health, wealth, happiness all have one thing in common - Discipline.

The Merriam-Webster dictionary defines discipline as:

- training that corrects, molds, or perfects the mental faculties or moral character

We have to train ourselves to be healthy and wealthy. And yes, sometimes even our happiness requires training.

Let’s discuss wealth first. Wealth absolutely takes discipline. Living within your means requires disciplined spending and saving. But what are your means? The best way to answer that question is to do a budget. Yes the dreaded B word!!! It amazes me how many people have never done a budget for their household. Think about doing one. Come up with all of your reasons why you haven’t done one yet and I will address them soon. Once you do it you’ll be surprised to see where all your money goes. You can then begin to live within your means. Once that is under control we can work on increasing your means.

At this time of year I am always reminded of another example of financial discipline. It’s tax time. Every year I am surprised to find people I know (smart people) who talk about the big tax return they got back from the government. I hate 0% loans and I especially hate loaning my money to the government for 0%.

I know, it is no fun to have to write Uncle Sam a check at the end of the year but either way it is your money. You can either keep it all year long and then give it to the government in April or they can take it every month and give it back to you at 0% return. That’s a bad deal. It takes a little work to get it right and it takes a lot of discipline to save the money all year long so you have it a tax time, but it pays over time.

This kind of thinking also helps you develop overall good money habits.

To adjust your tax withholding, you need to adjust the number of exemptions you claim on your W4 form. You need to do this conservatively at first because if you end up owing the government too much money at the end of the year then you will have to pay a penalty. Make the W4 form adjustment and then check your paycheck for the next few months. You will be able to see how much less federal tax was withheld. If that amount (for one month) time 12 equals less then the amount of money you got back the previous year then you are good. You’ll get less back this year and have more in you check every week.

Here’s an example (the numbers are for illustrative purposes only):

In 2008 you got a $3,000 tax return. So this year you increase your W4 exemption by 1. The next pay period shows that $80 less was withheld. Take $80 time 12 months and that equals $960. All things being equal, you would receive a $2,040 return this year. That’s $3,000 - $960. You could, in theory, increase your exemptions by a total of 3. This would result in $240 less in withholding. For 12 months that would be $2,880 and, again all things being equal, you would only get a $20 refund this year.

This is why you’ll need to take a few shots at this and fine tune your W4 until you get to a number you are comfortable with. Also, keep in mind that if your income changes (up or down) you should do this exercise again.

This is relatively easy to do and it gets you to start thinking about money in a new and better way. And remember, when you do this, be sure to save that extra money. You can not go out and buy a more expensive car or take that big vacation.

At least not yet!!

Welcome to 3 Goals 3 Investments

Well this is cool. This is my first blog so please hang in with me as I improve and add content that adds value to your life. My blog is intended to bring insight in the areas of your health, wealth, and happiness. But, like most blogs, this one will be an extension of the author's (me) personality, beliefs, and insights. I will always welcome comments but reserve the right to comment back.

Since we are at a critical time in our country's history, I will not be able to stay away from politics - I like politics. I will welcome healthy debate but ask for civility and respect for all who join our conversation. I consider myself a moderate, although most people that know me would suggest I'm a conservative. I admit that, as I sit on the moderate fence, I will fall to the right much more often than to the left no matter which way the wind blows. If you think that makes me a conservative then so be it, but I believe labels like that extend across a very wide spectrum.

OK, so in the spirit of full disclosure, I did not vote for Barrack Obama. Whether I am moderate or conservative, his politics don't match mine. I believe the mainstream media did not do its self prescribed job of vetting him before the election and I am wary of how they'll cover him going forward. So I will, on many occasions, provide my own coverage of him. My first comment is that he won the popular vote by a 52% to 48% margin so I do not believe he has the mandate he likes to think he does.

Of course this whole stimulus mess and the economy in general will impact your wealth so I will be commenting on them as soon as the final package is approved. I will discuss how you can take advantage of it and I'll also tell you what scares me about it.

Again, welcome to the 3 Goals 3 Investments. I do believe health, wealth, and happiness go hand in hand and I will introduce you to ways you can balance all three so you can be more successful in your life. So I hope you'll join me on this journey.