Understand the Rules First Before Bending Them

I once worked for a manager who took pride in being able to bend the company rules on a regular basis. He didn't ever break a rule, and therefore was not violating company policy. This principle worked well for him while he was based in the home country. When he was transferred internationally, he tried to instill the principle of bending the rules in his new organization. He learned quickly the principle didn't work because his new organization didn't know the rules and thus, didn't know how to properly bend them.

How, one might ask, is this topic related to personal finance? Simply,  there are financial products that "bend" a principle to create what appears to be a better deal. One should understand the principles of basic financial concepts before venturing into more complex financial products. Here are two fundamental financial principles that I believe need to be understood before considering complex products:

Compound interest. This concept is the foundation of many financial products, including credit cards, and mortgages. For example, if I didn't understand compound interest, I would choose to use "plain vanilla financial products," such as cash for everyday purchases and a 20% down fixed rate mortgage to buy a house.

Understanding compound interest has helped me make some good financial decisions  for using credit cards and mortgages. For example, we do use a credit card, but we pay off the entire balance every month. In effect, we get an interest free loan from the credit card company for twenty days. For our mortgage, we avoided products such as ARMs, option ARM and interest only loans, since we planned to live in our house for a while, making a fixed rate mortgage more advantageous.

Risk versus reward. For financial products, with higher rewards typically come higher risks. Rarely, does one get something for nothing in financial transactions.  Junk bonds offer higher interest rates because the risk of default is higher.  Leverage can increase returns significantly but also can cause higher losses. Stocks have higher long term returns than bonds but can have higher losses in the short term.

Understanding the trade off between risk and reward doesn't mean I always take the lower risk option.  It means that I am ready and able to accept the downside if it happens.

I am not saying that I would never borrow money on a credit card, take out an adjustable rate mortgage, or make a high risk investment.  However, I would understand the fundamental financial principles before doing so, and be ready to accept a negative outcome if I made an incorrect decision.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links To Carnivals From April 20 to 26, 2010

Here are links to the Carnivals in which My Wealth Builder participated from April 20 to 26, 2010:

Money Hacks Carnival #112

Economy and Your Finances Carnival

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Pizza Strategies for Personal Finance

"You better cut the pizza in four pieces because I'm not hungry enough to eat six." ~ Yogi Berra
 
I chuckle when I see this Yogi Berra quote because it reminds me of a personal finance illusion, overly focusing on how to divide up existing funds.  Cutting more slices may work for a while.  However, as the number of those eating increase,  the pizza is all used up and each slice isn't enough to satisfy anyone.  That's when it's time to get more pizza. 

Cutting more pieces.   When there is enough pizza to satisfy everybody and have some left over, slicing is a great strategy. Slicing is the equivalent of budgeting in personal finance.   Different amount of funds are allocated to each  piece of the budget.  Budgeting worked for me when I had no non-housing debt and was putting 5-10% regularly in savings. 

More pizza. When there isn't enough pizza to feed everyone, creating more slices is not a solution.  Everyone gets less than they need and no one issatisfied.   In personal finance, this is the equivalent of living paycheck to paycheck and having credit card debt.  If necessary expenses exceed income, budget, i.e. slicing the pizza differently, won't help.   In this case, it's time to get more pizza, i.e. earn more money.

Of course, another option may be to decrease the number eating the pizza :-)  However, if only necessary expenses exist, cutting back may not be an option.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Zero Sum Game Trap

For many years, the U.S. was a country of abundance, more than enough to accomplish a lot of its programs, such as infrastructure development, public education and safety nets for those in need. However, the U.S. has become a country of limited resources, making it difficult to support every program fully. If one program gains, another program loses. It's a zero sum game. A great example is the fiscal crisis in California, where budgets can no longer support all their current programs.

University of California students protest 32 percent tuition increase reports how students are reacting to a recent increase in state school tuition, which have typically been the lowest in the country. While there are numerous excellent reasons against a tuition increase, there were no solutions offered on how to fund the school's budget gap.

California's College Dreamers reports one reason for the budget shortfall, unfunded pension and health care liabilities The California legislature has diverted $3 billion this year from other programs to fund government worker's pensions, including $800 million from the University of California system.

Yes, both of these programs are valuable when considered by themselves. No one can argue against their individual importance. However, the reality is there are not sufficient funds to support these programs at their previous levels. Supporting one program fully will mean cuts for another program.

I fully expect more of these trade offs in the coming years as the government introduces more programs for the benefit of the citizens. For every program that maintains or gains benefits, there will be equal reductions in other existing programs, because government spending is grown faster than our economy. Also, as University of California students are discovering, the "tax increases" won't be just for the rich.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial, tax or policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Financial Incompetents should have Big Heads

"Stupid people should have big heads." - 1990s comedian

I heard this comment in a comedy act in the 90s and couldn't stop laughing. The main premise of the monologue was that stupid people should have heads 2-3 times bigger than normal. The reason was so that normal people could easily identify who the stupid people were. They would be all the people with the really big heads.

Wouldn't it be great if financially incompetent people had really big heads? Here are my two reasons:

We would know which people did not have good financial sense. For example, such knowledge may have prevented the financial crisis. Imagine if all the brokers offering subprime mortgages to unqualified applicants had big heads, borrowers would have known not to take the loan offer :-) On the opposite side, mortgage lenders could be held financially liable for taken advantage of a financially incompetent person. How could they have known? - by the size of the borrower's head, of course.

Financially incompetent people would know they need help for financial decisions. In the real world, financial incompetents don't know they are incompetent. In fact, some of them believe they are above average in financial matters. Having a big head would help clear up the confusion :-)

Best of all, politicians couldn't hide their financial incompetence, which helped create the current economic crisis. Some would probably have heads big enough that would cause them to tip over :-)

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or intelligence advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Cavalcade of Risk #103 - Risk Management with the Stars Edition

Welcome to the Cavalcade of Risk #103. As the name indicates, this Carnival is about risk - e.g. insurance, health, financial, and other types. Thank you to all bloggers who made a submission to this Cavalcade. I enjoyed reading every one of the articles. While every post was a great submission, I only included those I judged primarily related to risk management.

To create a theme, I decided to make use of the previous Cavalcades of Risk hosted by My Wealth Builder: #19, #38, #64, #76, and #94. For this Cavalcade of Risk, I gave each returning blogger a score from one to five based on participation in previous editions hosted by My Wealth Builder. Thus, bloggers whose submissions were included in all five previous editions received five stars.

Five Stars

Only two blogs received a top score of five stars and both have submissions for this edition:

Henry Stern, LUTCF, CBC presents Mysterious Insurance Tricks posted at InsureBlog, saying, "InsureBlog has the story of a risky business use of life insurance."

Silicon Valley Blogger presents Extra Insurance Coverage Through Credit Cards: Use Those Perks posted at The Digerati Life, saying, "Where you can get some extra insurance." In this case, the extra insurance doesn't cost extra :-)

Four Stars

For the two blogs with a four star designation, there was only one submission:

Jay Norris presents Colorado Ski Resorts and Health Care Reform at Colorado Health Insider with this excerpt, " This is just a guess, but I assume that many seasonal ski resort workers would still pick the ski resort job if they were given the option of having a seasonal job elsewhere that provided health insurance, versus having a seasonal job at a ski resort with no health insurance benefits. They are there specifically because they want to work on a ski mountain – they get a free ski pass, and can hit the slopes any time they aren’t working, which is what a lot of them do. "

Three Stars

Of the three blogs with three stars, there were two submissions:

Nancy Germond presents Disability in America Is Increasing posted at AllBusiness.com - Risk Management for the 21st Century. She offers some options that may help bring those on disability back to work.

Super Saver presents Stuff Happens at My Wealth Builder saying, " A couple recent incidents have made me realize how unpredictable life can be."

Two Stars

Among the six blogs with a two star score, there were three submissions:

FMF presents Free Money Finance: Five Things to Know about Permanent Life Insurance posted at Free Money Finance, saying, "Some important facts about permanent insurance." There is a difference between RICH and really, really RICH.

Wenchypoo presents Health Insurers Hedge Bets with Fast Food Stocks posted at Wisdom From Wenchypoo's Mental Wastebasket, asking, "Isn't this what that Goldman-Sachs guy did with the sub-prime derivatives, or Bernie Madoff did against his own supposed "shareholders"? Why don't WE ALL just go to the dark side for fun and profit? It's been said that a doctor a day keeps the apples way, and now I guess it's true. Health insurers seem to be "cornering the apple market" as it were. Thank God I can grow my own and not be part of this crap!" I guess good risk management may not necessarily be congruent with good public relations perceptions :-)

Jason Shafrin presents The Impact of Comparative Effectiveness Research on Health Care Spending at Healthcare Economist asking, "Will more comparative effectiveness research reduce spending? Perhaps not."

One Star

Out of 43 blogs with a one star score, there was only one submssion:

Jaan Sidorov presents Disease Management: A $2.3 Billion Industry That Speaks to the Wisdom of Markets at Disease Managment Care Blog reviewing an article on “disease management” and its role in reducing costs in health insurance. He says, "It appears the DM industry is alive and well and may be a good example of the debate between those who favor central scientific planning of insurance benefits and the messy way markets sort things out."

Future Stars

There were five newcomers to a Cavalcade of Risk hosted by My Wealth Builder:

Keith Morris presents Why Healthy and Young Need Health Insurance posted at LifeTuner, saying, "I have a friend in her early 30s who recently was diagnosed with a brain tumor. She did not have health insurance because she worked as a freelancer and could not afford it. In addition to an operation to remove the tumor, her future is filled with rehab and hundreds of thousands of dollars in medical bills."

Joel Ohman presents What car insurance companies do not consider credit scores? posted at Car Insurance Comparison, saying, "When car insurance companies attempt to underwrite auto insurance policies without using credit scores, is it sustainable?"

Mike Piper presents Using Annuities to Protect Inheritance posted at The Oblivious Investor, saying, "Can a single premium immediate annuity actually increase the amount you leave behind to your heirs?"

Consumer Boomer presents Questions to Ask Before You Buy Insurance posted at Consumer Boomer.

LivingInVol presents Let's play Russian Roulette! posted at Living in volatility, saying, "Russian roulette is a game only a maniac would play. But is there a price at which you would dare to play? Let's explore the idea..." After reading this, tonight's $252 million Powerball jackpot seems small :-)

That concludes this 103rd edition of the Cavalcade of Risk. The 104th edition will be hosted at Healthcare Economist. Please submit your blog article to the next edition of using the carnival submission form.

This is not financial or risk management advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links To Carnivals From April 13 to 19, 2010

Here is the link to the Carnival in which My Wealth Builder participated from April 13 to 19, 2010:

Carnival of Financial Planning #137

For some interesting articles from the blogosphere, check out this Carnival and give the host some recognition for his hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Stuff Happens

As much as I try to forecast our financial future, I realize that life is unpredictable. In the past month, a couple incidents have made it clear to me how truly unpredictable life can be.

Beach jogger killed by emergency plane landing. In a freak accident, a 38 year old father jogging on the beach and listening to his Ipod was killed by a gliding plane which had lost power. He was on a business trip for his company.

Iceland volcano disrupts air travel for Europe. A volcano that last erupted in 1821 is spewing enough ash into the skies to cause the cancellation of flights to and within Europe. A neighbor was scheduled to teach a class in Europe next week and has cancelled the engagement.

Who'd ever expect to be killed by an airplane on a beach while jogging? Who'd expect all flights to Europe being cancelled for several days or longer? Before they occurred, the probability of these events happening was likely infinitesimally small.

Of course, I don't spend any time worrying about the occurrence of such events. We just recognize that stuff can happen beyond our control. In some cases, we have insurance, e.g. survivor benefits. In other cases, we end up significantly changing our plans, e.g. stock market crash of 2009.

For more on Reflections and Musings check back every Saturday for a new segment.

This is not financial or insurance advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Still Learning

A great benefit of early retirement is having the opportunity to learn about professions and businesses through part time work. In addition to getting paid for working, I'm learning new skills and learning a lot about running a small business.

Here are some of the new skills I am learning:

Teaching and tutoring. I had spend a career in R&D and majored in engineering. I thought it would be interesting to teach and tutor science and math. Even though I have no formal training in teaching, I was hired to teach an after school science program and tutor students for the SAT/ACT tests. Fortunately, many of my coworkers are teachers who have given me many coaching tips.

Mostly, my teaching experiences have taught me the skill of patience :-)

Owning a franchise. Two of my part time jobs are with franchises and a third part time job is with a company office of a franchise business. I am getting first hand exposure to the benefits and challenges of owning a franchise business. In addition, I have direct contact with the franchisee for each business.

Customer satisfaction. All my part time jobs involve working directly with customers to provide a specific service. Their satisfaction is highly dependent on my interactions with them. I've become better at learning about customers needs and providing a service exceeds their expectations.

At this point, I plan to continue learning through my part time jobs. However, in the future, I hope to leverage these new skills in a business venture still be determined :-)

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or business advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

A Gift of Opportunity

When I was a child, our family didn't have much. My dad was a graduate student and mom worked part time. Simply, our family couldn't afford much. I didn't have many toys, do many activities, or go to many places. However, I now know I received something that was much more valuable: opportunity. It's the same gift that I hope to give to our daughter, even though she has much more than I ever had. Here are the great opportunities my parents gave me:

Sports. I got involved with organized football and baseball when I was about 8 years old. Our community had a number of ex-minor league/semi-pro baseball and football players who volunteered to coach. I was a stellar little league football player, earning MVP lineman honors the first two years I played.

Even though my dad never played football, he took the time to learn about and buy me good protective equipment. Years later, when our team was high school state champions, I asked whether they had put me in football or if I had asked. My dad's answer was that I wanted to play football and they supported my interest.

Education. I was a mediocre student until 8th grade, after which I somehow became a stellar student. I managed to get straight As in from 9-12 and graduate as one of four valedictorians. I was accepted to Princeton, Harvard, Duke, Johns Hopkins and Northwestern. My parents offered to pay for college, for any of my choices.

Travel. After graduating from college, a friend a I backpacked for eight weeks in Europe. Prior to that, the I had only been away for 12 weeks between my college junior and senior for an engineering internship I traveled with a friend that I met during the internship. He and I lived on $25 per day and a Eurail pass for that summer. It was a great experience I'll never forget.

Although I didn't realized it then, experiencing these opportunities have had a tremendous influence on my life. I learned a lot, met lots of great people, and experienced some great successes. I also learned about hard work, failure and recovering from tough experiences. I hope we will be able to give our daughter the same opportunities that our parents gave us. It would be a gift that lasts a lifetime.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Bubble Time?

While I feel good about the financial rebound from the bottom of March, 2009, I am concerned that a new bubble is forming. I have no hard data yet. At this point, I only have anecdotal evidence.

Stories of large gains in the stock market. In the past week, two strangers volunteered how they made significant gains buying Ford stock at the bottom. The first was an attendee at an investment seminar. The other was a cashier at a convenience store. When "everybody" is making money, it is a sign of a bubble forming.

Continuing low interest rates. While Congress chastises Alan Greenspan for keeping interest rates too low for too long, the Fed continues to assert that interest rates will remain low for quite a while. HELLO!!! Does the right hand know what the left hand is doing? Is everyone asleep at the wheel? Does this look like the early 2000s again? No, yes and maybe.

Low interest rates mean easy money and more speculative behavior that will lead to another bubble.

A "worst is over" mentality. The world didn't end. Stocks didn't go to zero. Companies didn't all go out of business. The consumer didn't stop spending. Health care reform wasn't devastating. The low expectations have been signficantly exceeded.

Fear of missing the next boom. There is still a significant amount of money on the sidelines in cash and bonds, and earning very little. In the meantime, stocks have advanced very nicely in the past year. People are afraid they will miss the next big advance, if it happens.

The good news is that we are probably in the early stages of a bubble, meaning there is still a lot of money to be made before the eventually burst. I am hoping for at least one, maybe two, years of significant advances. In that time frame, I hope to lock in significant gains and prepare for the inevitable collapse :-)

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links to Carnivals from April 6 to 12, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from April 6 to 12, 2010:

The Bobo Carnival of Politics

Tax Carnival #69

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, tax, or policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Wealth Builder Ratios - Q1 2010 Update

Here is our Q1 2010 Wealth Builder Ratio update. During the first quarter of 2010, the Dow, Nasdaq and S&P500 indices advanced 4.1%, 5.7% and 4.9% respectively. My company stock matched the indices and gained 5.1% during Q1. As it turns out, our savings, including company stock options are also up 5.0% this year.

For more details on the relevance of these ratios, please see this How Much Is Needed To Be Wealthy - The NUMBER.

Ratio and Target	2009	Q1 2010	Comments
Investment Income to Salary Target=0.8 2007=3.41 2008=-5.47 2009=-1.38	-1.38	0.77	After two years of poor results, 2010 has started out well so far. We will have more than covered our living expenses for the year if the market stays flat If the market finished further up, we should exceed the target of o.8, At this point, we continue to stay invested in the market for our tax advantage accounts, and still taking the opportunity to increase our cash position during rallies.
Savings to Salary Target>20 2007=23 2008=16.7 2009=15.3	15.3	16.1	This result is encouraging since our savings are almost back to end 2008 levels, even though our savings were down from paying off our mortgage in 2009. During Q1, my company stock advanced 5.0% and the Dow, Nasdaq and S&P 500 advanced 4-6% which helped increase our investment returns. Our total savings are up 5.0% for 2010, even though our investments are 22% in cash. The higher return is due primarily to the company stock options which had a 21% return in Q1. Currently, we need a significant advance in both the market and my company stock for us to reach the target of 20. Unfortunately, this is likely a low probability event. We will need to evaluate alternative strategies that will enable us to achieve the goal.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=0	0	0	We said bye-bye to our mortgage on May 20, 2009. Eliminating a mortgage payment has reduced our expenses by 24%.

My financial goals for 2010 are:

1. Continue to maintain an Investment Income to Salary ratio > 0.8. (on track)

2. Maintain a Savings to Salary ratio of 20. (off track)

3. Maintain Debt to Salary Ratio at 0. (met final goal of 0)

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

Both #1 and #2 were directly correlated with how well our stock, bond, and CD investments returns. With the continued rebound of the market in Q1, our investments have also shown a good gain.

It has been very challenging retiring at the beginning of a bear market. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. So we can wait for the stock market to resume an upward trend, hopefully in the next 1 to 2 years. At this point, I continue to be concerned about reducing our withdrawal rate, and have taken on five seasonal part time jobs.

I continue to have the same financial goals for 2010. Hopefully, the markets will continue to rebound in 2011, and allow our retirement investments to further recover. Otherwise, it's back to full time work I go :-)

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Am I Smarter than a Census Taker?

Are you smarter than a census taker? on CNN.com offers a sample 5 question quiz with questions similar to those on the test given to job applicants. I took the test in January, 2009, and have not been offered a job by the Census Bureau yet. Therefore, I thought I'd answer the question posed by CNN: Am I smarter than Census taker?

Probably. I only got one wrong out of 28 questions for a 97%, which I think is pretty good. No one received a 100% in my test group of 70-80, and only one other person got one wrong. I doubt all the Census takers scored a 100%.

No. I was told that jobs would be offered to the people with the higher scores first. The only person that I know with a Census job scored a 100% on his test. Maybe every Census worker got a 100% on his test :-)

Recently, I was contacted by the Census Bureau to confirm I am still interested in a job. I guess that all the people with 100% test scores have already been hired. If I am offered a job, I will probably take it just to meet people who received a 100%:-)

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or work advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

I Avoid Financial Advisors with These Characteristics

In my experience, I have found it challenging to connect with a person that matches what I expect in an excellent financial advisor. Many candidates have what I consider a "fatal flaw" in a financial advisor. Here are some of the key misses in my expectations:

Insufficient financial mastery. When I was in my twenties I interviewed my first financial advisor. From the interview, it was clear to me I knew more than him about managing money and investing. The only difference was he was working for a brokerage on commission. I definitely wasn't going to pay someone who knew less than me.

High cost. The same financial advisor wanted to charge me 4% of assets for his services, which was primarily enabling me to invest in three non-public mutual funds. From the data he shared, I quickly determined the mutual funds were not beating market returns by 4%, which meant I was being overcharged. In addition, he wasn't offering any other financial services which I considered useful.

Slick sales pitch. I've met financial advisors who take pride in their ability to sell anything, including ice to Eskimos. They seem to have no interest in my needs, my goals or my financial situation. Their only goal is to sell me product A, whether I really need it or not.

Significantly different financial values. I prefer to work with an advisors that have similar financial values., e.g. frugal living, debt avoidance, and saving bias. For example, I would have difficulty relating to an advisor who lived beyond his means :-)

So far, I've only met two financial advisors who I feel do not exhibit these "fatal flaw" characteristics. The first one I met seven years ago and have hired to manage part of our retirement funds. I am happy to refer friends and acquaintances The second I met three years ago in my part time seasonal financial services job. Our work requires us to refer clients to an financial advisor in a partner company when needed. From my evaluation interview, I decided that he met my criteria for referring my clients.

For more on The Practice of Personal Finance check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links to Carnivals from March 30 - April 5, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from March 30 to April 5, 2010:

Baby Boomers Blog Carnival #33

Carnival of Financial Planning #135

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, investment, or tax advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

It's Crunch Time - For a Little While

One of my seasonal part time jobs ends in eleven days. In the past two years, the final days were pretty uneventful, almost boring, since I had nearly zero clients. This year has been different. I am currently working with nine clients and am scheduled to begin working with three more clients. In addition, I expect that about five more clients will be added to my workload.

It's like the pace of my former full time job - too much work and too little time. Since I do well under pressure, I'm up to the challenge and expect to complete my work by the final day. However, since I will be off until until next season, the pressure will only be short term, which is how it should be in early retirement :-)

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Congress to Work for No Pay

Today, a bipartisan bill was introduced that would reduce Congress's pay to zero until unemployment is reduced below 6%. A wide range of groups applauded bill, including the Democratic and Republican National Committees. Tea Party representives commented, " This is the type of change we need in this country." AFL-CIO spokeperson said, " It's good that Congress will learn the hardships of the everyday worker first hand." Even Joe the Plumber is supporting the bill 100%.

In an unprecedented showing of bipartisan support, Congressional leaders praised the bill which is expected to get 100% yes votes. Rep. Barney Frank (D-Mass) said, " I'd be happy to work for no pay, since many Americans don't think I do anything worthwhile anyway. " Rep. John Boehner (R-Ohio) said, "As the party of NO, we Republicans thought the American people would appreciate us saying "No Pay for Congress."

In his hourly Internet address, President Obama congratulated Congress on taking this historic step. "Let me be perfectly clear," he said, " this is only the first of major new actions the Federal government is taking to reduce the deficit. If Americans are out of work, government leaders have failed and we should not be paid. Let me repeat, we should not be paid." Mr. Obama has decided to postpone his trip to the Final Four in order to ensure Congress votes 100% for this bill.

When I was growing up, government would have never taken such a heroic legislative action. There would have been contentious, partisan battles over political pork , instead of doing what's right for the entire country. Isn't is great this generation has moved beyond that :-)

Please call your Congressional leader and ask them to vote yes on H.R. 4-1-2010, the American April Fool's Deficit Reconciliation Act.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC