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Thread: Big Government Cripples Incentives To Save Money

  1. #1
    Senior Member Franco's Avatar
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    Default Big Government Cripples Incentives To Save Money

    "Today, let’s look at an example that affects almost everybody rather than just a handful of rich people. Many people in Washington sanctimoniously say that American households and businesses are too focused on the short term and that we don’t save enough.
    But as I explain in this CBNC interview, tax and spending policies from Washington have undermined the incentive to save."

    http://danieljmitchell.wordpress.com...gratification/

    When growing up, I was always told that no matter how much I earned, that I needed to save a part of every dollar that I earned. Because of government policies, it doesn't pay to save money. However, I'd rather earn zero on my savings than risk my savings in the corrupt Stock Market! Though, when I do save enough to buy real estate, I do so rather than risk my savings in a rigged market and I have never lost money with real estate!
    Last edited by Franco; 06-29-2012 at 10:25 AM.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

  2. #2
    Senior Member menmon's Avatar
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    401K is a very good reason to save....no taxes paid on it.

    Purchase investment real estate and depreciate expense it against income...not a bad plan either or buy rual real estate and carry it under and ag exemption, not much tax there either.

    In spite of the corruption....investing in the stock market and staying in it still is offers the best return.

    I'm guessing this guys is saying that Obama his hurt the savers.....inflation will hurt the savers.

  3. #3
    Senior Member Franco's Avatar
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    Quote Originally Posted by sambo View Post
    401K is a very good reason to save....no taxes paid on it.

    Purchase investment real estate and depreciate expense it against income...not a bad plan either or buy rual real estate and carry it under and ag exemption, not much tax there either.

    In spite of the corruption....investing in the stock market and staying in it still is offers the best return.

    I'm guessing this guys is saying that Obama his hurt the savers.....inflation will hurt the savers.
    I have a 401k and have it all go into a Money Market Account and Bonds. The Bonds have done well this year.

    Most of my real estate is in raw land where I can walk it, smell it, hunt it and cut all the firewood I want for free! Use to get a handsome CRP check every year but that has decreased.

    One can NOt look at pass performance and say that long term is the way to go. I use to think long term with stocks but this is a new day, a new age and I think the stock market outlook is horrible. Just look at today. Nearly a 300 point rally because the Europeans are going to print more money to keep their out of whack social systems on a resperator. Make zero sense for the Dow to rally on that house of cards.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Senior Member LokiMeister's Avatar
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    Quote Originally Posted by kjrice View Post
    I have been getting killer returns since I took investing by the horns and quit putting money into a company managed 401k (scam), other than the matching percentage.
    Me also. I use the Motley Fool at fool.com. Very good services like Stock Advisor. Very down to earth people.
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    "Government big enough to supply everything you need is big enough to take everything you have ... The course of history shows that as a government grows, liberty decreases." Thomas Jefferson

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    Senior Member Buzz's Avatar
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    Quote Originally Posted by kjrice View Post
    I have been getting killer returns since I took investing by the horns and quit putting money into a company managed 401k (scam), other than the matching percentage.

    We have self directed IRA, and we put 25% of employee earnings into the account each year. I started making a killing when I stopped investing into mutual funds. I only wish I had sold the 100 k or so that I had already put into them. That is my next move. I am sure Sambo would agree that the biggest downside to doing this is that you have to keep up on what you own on a daily basis and most don't have the time, the motivation, or the savvy to keep up. Personally I would say it is worth it.

    To Franco, I should have invested in land 10-15 years ago. If you look at historical land prices adjusted for inflation, they are at an all time high. If I had big holdings there, I would be thinking that now is a great time to divest, but who knows, comodity prices might keep things propped up for a while. But, I would be nervous.

    I pity anyone who thinks that saving isn't worth it... They have a bleak future in front of them.
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

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    Quote Originally Posted by sambo View Post
    401K is a very good reason to save....no taxes paid on it.
    Roth IRA is the way to go here - pay taxes early & then grow it tax free. 401K is only good if the underlying funds & the match are, at the least, capable of matching the market.

    Quote Originally Posted by Franco View Post
    I have a 401k and have it all go into a Money Market Account and Bonds. The Bonds have done well this year.
    Money smarter than us says the joy ride in bonds is about to end

    Quote Originally Posted by Buzz View Post
    We have self directed IRA, and we put 25% of employee earnings into the account each year. I started making a killing when I stopped investing into mutual funds. I only wish I had sold the 100 k or so that I had already put into them. That is my next move. I am sure Sambo would agree that the biggest downside to doing this is that you have to keep up on what you own on a daily basis and most don't have the time, the motivation, or the savvy to keep up. Personally I would say it is worth it.

    To Franco, I should have invested in land 10-15 years ago. If you look at historical land prices adjusted for inflation, they are at an all time high. If I had big holdings there, I would be thinking that now is a great time to divest, but who knows, comodity prices might keep things propped up for a while. But, I would be nervous.

    I pity anyone who thinks that saving isn't worth it... They have a bleak future in front of them.
    The issue with RE is it's not a call up your broker & sell immediately.

    IMO one needs a many legged stool even in the stocks & bonds arena. We had that at one time in the bonds including Muni's paying around 8% but they have all been called or matured. This market cycle & the rookies running things have not helped. I believe there are quality funds that provide a stability in one's portfolio while giving a guide against which to measure in any given market cycle. Most of the funds we own are from the early 90's & the poor performers, along with those who changed their philosophy winnowed. Those remaining have performed well but most are closed to new investment - have to see if they are transferable to our heirs. As for stocks we are always looking for long term growers. I remember the Nifty 50, anyone else besides UB remember them .
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    Senior Member wayne anderson's Avatar
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    Yes, I remember the Nifty 50 (Personal Finance class at So.Dak. State back in early 1960s). I used 401K to max while employed until retiring in 2005, company had very liberal plan and it was very good for me. I like Buffet's philosophy--invest in campanies (and products) that you understand.

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    Senior Member menmon's Avatar
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    An S&P 500 Index fund is the best thing most can invest in. Take a dollar cost averaging approach where when the market is high you buy less and more when down and don't try to time the market. Think leading up to the crash in 2008 you would be purchasing a few shares every pay period and the months after it crashed you would have been buying a bunch. Just think if you had not paniced the loses would have rebounded and the shares you purchased after you would have had a good gain.

    The reason the market rallies on news of bailout money in Europe is that is what is needs to get that part of the world growing and if they grow we do well.

    The conservative rhetoric for government not to spend money right now is the wrong thing for the economy...now if you believe republicans will not spend money, I have beach property in AZ.

    Bonds have been the play but they will not produce those returns going forward because rates can't drop much further. The stock market will do well as things get better. I would be buying on the bad news out of Europe, once these things get bettter, the market will rally.

    R/E is a good investment as long as your carring cost is low or you can enjoy it like Franco.

  9. #9
    Senior Member Franco's Avatar
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    Quote Originally Posted by sambo View Post
    An S&P 500 Index fund is the best thing most can invest in. Take a dollar cost averaging approach where when the market is high you buy less and more when down and don't try to time the market. Think leading up to the crash in 2008 you would be purchasing a few shares every pay period and the months after it crashed you would have been buying a bunch. Just think if you had not paniced the loses would have rebounded and the shares you purchased after you would have had a good gain.

    The reason the market rallies on news of bailout money in Europe is that is what is needs to get that part of the world growing and if they grow we do well.

    The conservative rhetoric for government not to spend money right now is the wrong thing for the economy...now if you believe republicans will not spend money, I have beach property in AZ.

    Bonds have been the play but they will not produce those returns going forward because rates can't drop much further. The stock market will do well as things get better. I would be buying on the bad news out of Europe, once these things get bettter, the market will rally.

    R/E is a good investment as long as your carring cost is low or you can enjoy it like Franco.
    What do you do when it all comes crashing down? The financial systems in the USA and Europe are built on a house of cards. Inflation is inevitable and most stocks won't be worth wiping one's butt with because we live on Fiat money, here and abroad. Last place I would put my savings is in an instrument that is out of control.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Quote Originally Posted by wayne anderson View Post
    Yes, I remember the Nifty 50 (Personal Finance class at So.Dak. State back in early 1960s). I used 401K to max while employed until retiring in 2005, company had very liberal plan and it was very good for me. I like Buffet's philosophy--invest in campanies (and products) that you understand.
    I learned what little formal stuff I had at Mines in Econ 101 - don't put all your eggs in one basket . How many of the Nifty 50 survive today in any form & how many are nifty . I'm going to do a thread on Buffett shortly as he is not the wizard he is portrayed to be - Peter Lynch on the other hand is quite bright & used that philosophy at Fidelity Magellan in it's glory years.

    Quote Originally Posted by sambo View Post
    An S&P 500 Index fund is the best thing most can invest in. Take a dollar cost averaging approach where when the market is high you buy less and more when down and don't try to time the market.

    The conservative rhetoric for government not to spend money right now is the wrong thing for the economy...now if you believe republicans will not spend money, I have beach property in AZ.
    I invite those of you who are interested to go to Yahoo finance & look at the long term charts for VFIAX (an S&P 500 fund) & MDY (a midcap 400 fund). Decide for yourself if mr IHOP has a clue . There is a reason banks hire C- students .

    Quote Originally Posted by Franco View Post
    What do you do when it all comes crashing down? The financial systems in the USA and Europe are built on a house of cards. Inflation is inevitable and most stocks won't be worth wiping one's butt with because we live on Fiat money, here and abroad. Last place I would put my savings is in an instrument that is out of control.
    I am sure you have done all the research to back your statement - are you saying all the folks who went through the crash of "29-'31 ended up broke? I don't think so .
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