Who Did What and How Do We Fix It?

How Did We Get Here?

Boy, I have had a lot of calls lately about what is going on in this country. So, here is an assessment of what actually happened that is not in “legalese” or “mumbo-jumbo” that a normal person could understand without some kind of translator.

Before we talk about what happened, we need to talk about what banks and lenders really care about when making a decision. This will provide a foundation and bring this issue to a point of sensibility.

A bank or lender cares about three basic things:

The borrower’s ability to re-pay. (income)
The borrower’s willingness to repay. (Credit)
Adequate collateral to secure the note. (Appraised value)

That is about it in a nutshell. If you get these in line with underwriting guidelines, you can make the loan.

Now enter The Community Re-Investment Act law that was passed by Congress to make home ownership accessible to lower income families. Although the idea of bringing the American Dream of home ownership to everyone sounds great, the strategy was fatally flawed because rather than bring the dream to lower income families, we needed to bring them to the American Dream.

So, rather than create an environment for people to improve their economic situation by lowering taxes, creating jobs, and building families, Congress chose to take the easy route, once again, to lower standards for those families and people who don’t make much money.

The American way is to become someone great, the American way is to make your life what you want it to be. It is called the American “way” because it is the WAY, as in path, to achieve the American Dream.

So, back to Congress, the Democrat party which needs people to be “victims” in order to flourish, makes it easier via regulation, rather than do the heavy lifting. Taking the easy road is not being progressive, taking the easy road is simply setting people up for future failures.

Writing laws that enable people to improve their lot in life is hard work because it might mean you could be perceived as un-caring and insensitive. I am not saying that minorities are like children, but my 7 year old thinks I am insensitive and un-caring when I require her to do what is right and what is best for her. No matter what she thinks, I owe it to her to do what is best for her, even if it means I am unpopular. I do it because I truly care about her future. I care about her future more than mine.

We, as a country, need to require people to stand tall and actually expect our citizens, all of them, to do what it takes to become more affluent by their own efforts. The Democrat party, by their own laziness, and the endorsement thereof, is systematically destroying minorities and the African American community.

Their action with the CRA was the fulcrum of leveraging the housing market to a point of collapse.

The Community Re-Investment Act was well intentioned to make credit and loans available to geographic areas under served by banks and lenders. In an effort to prevent “red-lining” of areas that a bank might choose not to lend in. This law required banks to have a percentage of their loans made within urban areas which are historically populated by lower income people. But, it was not based on common sense. Legislatively forcing banks to offer home loans to people who really could not be reasonably expected to repay was a mistake.

So, in order to comply with federal law, banks ultimately relaxed their guidelines and Fannie Mae and Freddie Mac designed loan products to fit the borrower. Since you cannot verify what you do not have as far as income goes, stated income loans were made more available, and ”no doc” loans which did not require any proof of income were also created.

Since lower income families are unable to save much money, 100% financing programs were designed that increased loan risk further. The rates had to be held low in order for this scheme to work.

Lastly, since there was a correlation of poor credit with lower income credit requirements were significantly relaxed.

The recipe is almost complete. The law of supply and demand being what it is began to see home prices climb at an unprecedented rate since there is now a tidal wave of new home buyers. Many more buyers than sellers drove home prices higher, and people thought it would remain that way.

We compromised the integrity of the lending business on all three critical components and banks had to go along or face severe penalties and fines. FannieMae and FreddieMac guaranteed these loans and then sold them to investment banks who had YOUR money. Over time these guarantees became worthless once the level of foreclosures began to hit. This was not a wave, it was a Tsunami. It was compounded by the federal government requiring changes to revolving credit accounts (credit card) effectively doubling the minimum payments which is a story in itself.

We also found out that the CEOs of Fannie and Freddie lied about their earnings and solvency, and cooked the books to get paid colossal bonuses. Cronyism and shoddy accounting was the order of the day. These people need to go to jail for a long time, although there is no call for investigations, which should tell you who is really responsible…

Now you know what happened.

Once again, by playing around in the market, lowering standards, and taking the easy way to help minorities and cities, our government has nearly destroyed an entire industry and economy. And might still yet.

But no one is actually taking any responsibility. The Speaker of the House of Representatives recently stated that the Democrats are not responsible. It is easy to point a finger at the chief executive. He is charged with executing and enforcing the laws of the land. George Bush did not cause this problem. Congress caused this problem. There was a historic effort to prevent any regulation and oversight of Fannie and Freddie by the Democrats, yet it is the Democrats screaming and yelling that the Republicans and the Bush Administration did not "regulate" these Government Sponsored Enterprises.

The obvious irony being that it was a regulation that started this whole damn mess.

The lowest common denominator here is the idea that minorities and lower-income families are incapable of achievement. If cities are struggling and banks don’t want to lend there, it is because of the conditions created by local, state and federal government.

Stop electing the people over and over who are not improving things. The only way to inject accountability in to the process is to stop supporting the people who tell you that you cannot achieve, and that you are not part of the dream. We don’t need them to achieve. Lowering the standards is never the solution. The American spirit and liberty is what we need to achieve great things. Liberty means less government.

Now, we must raise the standard for our elected officials, and demand they put the interests of American ahead of their own political agenda. There is not one instance I know of where throwing government money at a social problem fixed it. Not education, not health care, not welfare.

There is only one “way” to get to the American Dream, and that is the American way of personal responsibility and accountability. Drive and dogged determination to accomplish what you think you cannot. While Democrats and Republicans alike have ownership of this problem, the problem is here. We need to go get those that are responsible and hold them to account, but we must work on the solution. The solution has been and always will be “We the People”.

Wall Street Doesn't Insect With Main Street

This is an article I posted back in early spring, and I hope you might enjoy it!


Why Wall Street Doesn't Intersect With Main Street

Have You Checked Your Map Lately?

If you did, you would notice that Wall Street doesn't actually intersect with Main Street. I know this might strike you as a strange observation, but it illustrates a greater point. The point is that there is an enormous gap between how Wall Street sees things as "good" and what the reality on Main Street, where most of us live, actually looks like.

So, what is the difference between a Bear and a Bull, and more importantly, why does it matter to you and me?The "bull" thinks life is just peachy and that there is a great opportunity and future immediately ahead, and a "bear" thinks life is going to be rough in the coming days. Personally, I am not sure what the immediate future holds for our economy, but in a recent article I mentioned that the writing is on the wall about some pretty serious issues to come. I am talking about substantially higher taxes, low wages, inflation, a devalued currency, and a government that is no longer acting for the people and by the people. For if they were, the People's voice would be heard, and we would actually be solving the most pressing issues of our time instead of just talking about them. These things most certainly need to be addressed. They don't need more speeches or for us to talk about them anymore. We have talked it to death. As far as I know, hot air hasn't actually solved any real pressing problems, except for making a balloon float or getting your hair to dry a little quicker.I think the real reason the cherry blossoms show up a lot earlier these days, is not because of any impact of "so-called" Global Warming, but because of the huge amount of hot air in Washington, D.C. Just a theory of mine.

If we cannot address the most pressing issues of our time, then we must admit that we cannot depend upon the government to come to our aid when we retire. That places the ball squarely back in our court, just like it was for our parents. Like it or not, that's the way it is.

As the fundamental building blocks of our retirement system continue crumbling from abuse and neglect, it becomes more apparent that we must stand up on Main Street and take care of ourselves. We must support our local businesses, and communities. We must begin to pay back the money we have borrowed or face hardships like those that our grandparents and great-grandparents lived through. We are however, running out of time.

I am optimistic about the future, but my optimism is based on Americans coming to our senses. To be specific, I am talking about the debts owed by both the US government and the personal debt of it's citizens. Collectively and personally, we are leveraged to the hilt. Our country and most of us have a cash flow problem. We cannot begin to solve our problems without getting serious about debt.As April 15th quickly looms ahead, most Americans are furiously trying to look for ways to pay less in taxes, but most will do nothing about the enormity of the impact interest expense has on their financial condition. The irony is that both are voluntary.

Although Main Street isn't connected with Wall Street, Main Street has a direct connection to the Road to Prosperity. Here are the directions on how to get there from where you are:You must keep the money you earn, and the only way to do that is to stop giving it away to banks, credit card companies, and the government. We must stop robbing ourselves and our kids of our future.I wish you luck on your journey to your future, and will look for you on the Road to Prosperity.

Master Your Debt, Master Your Destiny.

How To Show Your Mother-In-Law She Was Totally Wrong About You

I used to think "Mother-In-Law" jokes were pretty stupid, that is, of course, until I actually had one. A mother-in-law that is. Now, I have a complete understanding of how those jokes came to be. I actually laugh at them now. In fact, I tell a few of them these days.

In fact, I am pretty certain that every one of them since the dawn of time has been written about my mother-in-law in particular.

So, what does this have to do with money you might ask?

Most mothers don't think their kids, even if the "kid" is in their forties, can make very good decisions. Especially when it comes to selecting a spouse.

In fact, most mothers don't believe that there is really anyone actually good enough for their son or daughter.

Chances are that you deal with this too. It makes no difference if you are male or female. A mother-in-law is a mother-in-law. Period.

In most families, the the wife is the "family treasurer". Now most women will tell you it is because their husband"just doesn't do it, and doesn't want to do it". What they leave off of that sentence is "...well enough to satisfy me." but that is a discussion for another day.

The dynamic between a mother-in-law and daughter-in-law is much different than what is between a son-in-law and mother-in-law. I don't know why its like that, nor do I think I want to know, but since the finances are usually handled by the woman in the family, the idea that things aren't going well on the financial front is not just fuel for the fire. It is JET fuel for the fire.

So if you are the family treasurer, and want to prove "her" wrong about your "worthiness", you might consider nudging that spouse of yours to learn how to become debt free. This one step, will not only get your mother-in-law on your side, even if only for a moment or two, but will also do the following:

Save you THOUSANDS of dollars.

Position yourself to retire.

Improve your cash-flow.

Avoid depending on Social Security and Medicare.

Have a better relationship with your spouse.

Be able to afford sending your kids to college.

Last but not least, you could be able to burn your mortgage before your mother-in-law can burn hers! If that is not a good enough reason, I guess I wouldn't know one if I saw one.

The benefits of being successful financially are easy to measure, but the benefit of proving a mother-in-law WRONG is immeasurable. Not to mention incredibly satisfying.

The Dirty Little Secret About Your 401(k) Plan That You Aren't Supposed To Know

Do you have a 401(k) plan that you make contributions to? What about a Simplified Employee Pension? An Individual Retirement account? It doesn't matter what the title is, what matters is that the money you have in those accounts will be 100% taxable.

Don't misunderstand, the percentage of tax you pay will not be 100%, although it will be high. What I am stating is that every dollar in the account has not had ANY tax paid on it. So, it is 100% taxable.

Tax deferred savings plans are sold on the premise that A.) It will cost less to live in the future. B.) The amount of tax we pay will be less in the future, since we will have less income.

How anyone could possibly think it will be less expensive to live in the future doesn't do the grocery shopping.

Secondly, if it will cost more to live in the future, how is it possible that we would need less income in the future? More importantly, who would want less?

Here is the dirty little secret I am talking about. The best way I can explain it, which I have been doing for a number of years now, is to ask yourself, what 401(k) actually represents.

It represents a reference to the Internal Revenue Service's code, or tax law that covers tax deferred savings plans. Few people know very much about their retirement plans, so I think it is time to disclose the truth about how we , Americans, are being set up to fail.

Now that you know what 401(k) represents, ask yourself this question;

Is it a logical assumption to think that our government, who has trillions in debt, and runs a deficit every year, would devise a way for you to pay LESS in taxes?

I don't think so, and I will tell you why:

1. PROBLEM: The Baby Boomers are coming of age, and they are going to demolish the Social Security Plan. Since Congress raided the Social Security Trust fund like a band of pirates, and spent the money leaving nothing but some worthless I.O.U's, there is no money. There is no surplus. Social Security is a pay as you go plan these days. RESULT: The ONLY way to salvage the Social security plan is to either dramatically CUT benefits by extending the age of eligibility (which they have already been doing) or to raise taxes.

2. PROBLEM: Medicare is scheduled to be broke sometime around 2019. The first Boomers, who were born in 1946, will only be 73 years old at that time. Life expectancy is about 88 years now, so they will be on it a while. There were about 76MILLION babies born between 1946-1964. Medical costs are climbing at 4 to 5 times the inflation rate. RESULT: There is no mathematical way this program can sustain itself, in it's present form, without shifting more costs to you, or raising taxes. Or a combination of both.

3. PROBLEM:The infrastructure in the U.S. is crumbling, and needs repair. Bridges and roads are falling apart. RESULT: Not too long ago there was a bridge that collapsed in Missouri from neglect. It is the just an indicator of the condition of our transportation system. This will cost hundreds of billions above current highway and gasoline taxes currently being collected.

4. PROBLEM: The inflation rate in this country is being skewed by changing the components of the calculations. RESULT: The result is lower numbers and a false sense of security. As if that wasn't bad enough, with countries like China and India who each have populations in the BILLIONS putting pressures on consumable and durable goods, the prices we pay have no where to go but up. Our monetary policy is in distress. Look at the banking business.

5.) PROBLEM: State governments are being heavily burdened with unfunded mandates from the federal level and most are running deficits. RESULT: State taxes and property taxes will have to rise. Medicaid is a primary culprit.

6. PROBLEM: The average American family, in particular, Baby Boomers, are seriously in debt and will not likely escape the debt trap before retirement. RESULT: Serious cash flow problems in retirement and a loss of a huge part of our lifetime earnings to banks and credit card companies.

So, here is where your retirement monies come in to play.

• If all of the money is taxable and taxes go up, which they will, you will have less of it to spend and you will need to withdraw more if it each month. This will cause your money not to last as long.


• If Social Security cuts benefits or raises taxes, you will need more of your retirement money each month to survive. See above item.


• If Medicare cuts benefits you will pay more of your health care costs at a time when you are more likely to need benefits, placing additional pressures on your savings.


• If it will cost more to live in the future, which it will, your future dollars will not buy as much, and you will need more to survive. You will probably outlive your money.


• If you are not debt free before you retire, a large portion of your retirement money will go directly to your creditors. the sacrifices you made to save it would be for nothing.

That's bad news, here is the good news. There is a chance to avoid this mess. You MUST get out of debt NOW. As fast as possible, including your mortgage.

The money you are placing in a 401(k) plan would be better used to pay off your debt. You will save thousands of your own dollars, and you will alleviate the cash flow pressures you are destined to experience in the future.

While I am not a conspiracy theorist, I can tell you that if I am smart enough to see this stuff, you can bet the farm the government knows it too. There are trillions of dollars in 401(k) plans and tax deferred plans and the government can't wait to get their taxes on it.

If You Don't Know Who The Patsy Is ...

My grandfather, who I speak of frequently, was the wisest person I have ever known. What was so interesting about him, wasn’t that he lived to be almost 100 years old and witnessed such dramatic changes in the world.

What was so interesting was that he had made his living as a professional gambler. Not like the people you might see on in the poker tournaments on television. He was the real deal. He was the “Gambler”.

As I knew him, he was merely my grandfather, a simple man with platinum blue eyes that pierced you, like he was looking in to your soul. He liked to play the fiddle, chew tobacco and watch the world unfold in front of him.

My mother told me stories of his skills, and how when she was a girl, he would come home after being gone a few days, and have a roll of hundred dollar bills that could "choke" a horse. He once made 31 straight passes at a craps table. This guy knew the odds, and he played them with one objective. To Win.

This was back in the late 1930's and 1940’s, when money and jobs were scarce. He understood human nature, and knew “people”, because he studied them closely.

He was my personal version of E.F. Hutton. As a kid, I thought he didn't talk much because he was so old. As it turns out, he just didn't have anything to say. But, when he did, it was worth paying attention.

One hot August day, as he rocked slowly in his favorite chair, never sweating even though it was incredibly hot, he began to speak. So, I will share this piece of wisdom from him with you and I hope you might see the importance and appreciate it as much as I do.

As he reminisced on a lesson he had once taught my father and uncle, he said, "If you sit down at a card game, and in the first five minutes you don't know who the “patsy” is. It’s you! You would be smart to politely take your money and leave, because you are about to get your pockets emptied.”

I have always found that particular piece of advice to be very insightful.
Perhaps, in the big scheme of things, one man's bit of wisdom cannot change anything. But, if faith can move mountains, then maybe it can. Because as I see it, we need to employ some wisdom right about now, with all that is going on.

We have millions of families in debt beyond belief. We have families struggling to fuel their automobiles just to get back and forth to work. We have a banking system in trouble. Foreclosures are occurring at a pace that is unprecedented. We have a government that is spending our money as fast as they can print it, and we have a mountain of national debt that is spiraling out of control.

Here is where knowing who the patsy is becomes important.

Just in case you hadn't already figured it out, the patsy is us, the American people. We are the patsy because we continue to believe we can win this game. We think we can depend on Social Security and Medicare. We think we will have enough money in our 401(k) plans to live on. And, none of it is true. We are anxiously waiting to draw that miracle card to complete an inside straight, and the odds are seriously against us.

The only real meaningful solution to our issues is to improve our cash-flow and get out of debt. This applies to our government and to us.

The government has an advantage we don’t have. They can print more money to improve their cash flow, and they can raise taxes on everyone.

Your family is in this game all alone, just like mine, and your neighbors. The solution must begin in your house, and my house, and your neighbor’s house, etc.

The “players”, namely; banks, credit card companies and government don’t care what your future looks like. They are playing to get your money. If we don't get up from the “table”, and do it soon, we WILL get our pockets emptied.

Wisdom only works when you USE it and our five minutes is just about up.

Recession, Depression What Does It All Mean Why You Shouldn't Care?

Recent news articles are heralding the official arrival of a Depression in the United States Of America. Strangely enough, yesterday we were supposedly in denial about whether or not we were in a recession. Now today, the proverbial bottom has fallen out. All in 24 hours!

Now, before you get yourself worked up, I hope you might sit back and listen to a slightly different point of view.

Several years ago, I hired a former airline pilot who flew for a major cargo carrier for a number of years. He wanted to start a new career advising people on how to invest and plan for their future with a company I owned at the time.

He lost his pilot's license because of hearing loss. He was a very intelligent guy in all aspects, except one. The one issue issue he had that hobbled his success, was that he subscribed to a couple of investing newsletters that harped on the coming "Crash" of the market.

According to these newsletters, the world was going to be devastated, and it was right around the corner. I learned that Jack had taken his own investments and moved them to safe harbor type investments, and was earning somewhere around 2-3%, while the rest of the world was getting 14-16% returns and had been for over 7 years.

I explained to Jack that newspapers, newsletters, and the like are going to be very negative in tone, especially since bad news sells papers. A quick glance of your local paper will confirm this fact. The authors of the newsletters were making really safe "predictions", since eventually, all markets will correct and contract at some time. So, they needed only to sit back and wait and eventually they could say, " I told you so!'

In Jack's case, he had sat out on a booming market and missed more than 110 percent market gain as he sat on the sidelines and felt "Safe".

Here is my point.

How safe is a position that guarantees you a loss? The market crash Jack was waiting on to arrive actually happened for him, since he missed all the gains. He lost his money by believing the "Prophets of Doom" and buying in to a self fulfilling prophecy that was premature. A little wider viewpoint would have better than the narrow one he held.

It is a simple fact, newspapers sell bad news. A train that doesn't derail won't make the evening news. So, perhaps you shouldn't believe EVERYTHING you read.

A detailed examination of the actual definition of a recession is three consecutive quarters of no economic growth, as measured by GDP. By definition, you couldn't actually know anything about a recession until you are at least nine months in to it. We have not hit that mark yet, and I think the fact that we are in the middle of a political year cannot be overlooked as a reason people hope to make things sound worse than they might actually be.

As far as a "Depression" goes, you cannot be in a Depression, until you have arrived in a recession. The accepted definition of a Depression is a "severe" recession. So, although the headline is startling, and it will sell papers and subscriptions it is not accurate.

In 1929, when the market crashed, it took more than 20 years for the market to recover the losses suffered. In 1987, when the market "crashed" and the Dow dropped more than 528 points, it took only a matter of days before the losses were recovered.

Our world is a smaller place now, than it was back then because of the Internet and technology. So, history cannot actually repeat itself the same way. We also have safeguards in place now, that were created to prevent a repeat of the great depression.

With all of that said, I definitely think the economy is slowing, and there are things that need to be addressed, but jumping in with the doom and gloom set is not healthy, nor is it helpful.

I still recommend to get yourself on a pay as you go basis, stop borrowing and using credit cards, and get your family out of debt as quickly as you can. No matter what the economy does or doesn't do, you will be better off for it, and the reasons have nothing to do with a recession or a depression.

If history has shown us anything, it has definitely shown us that a "smart" investor doesn't sell when everyone else is selling. That is when you need to be buying! Be smart become debt free and position yourself to make the most of the ups and the downs.

Why The Secret To Wealth Is Still A Secret

Can you keep a secret?
I'll bet you can't keep one as well as the Secret of How To Become Wealthy Has Been Kept.

Secrets. Secrets. More Secrets. Everyone loves a secret. A little inside information. The scoop...

I am sure you remember hearing, the "I know something you don't know" taunt when you were a half pint in grade school.

We all learned that the best secrets need to be passed along in whispers. We first learn to whisper in childhood when our parents try to teach us how to use your "talk like we're in church" voice. For a kid, enthusiasm requires a lot of volume. For a secret, hushed tones and a little privacy are in order.

Once we are in grade school, we whisper secrets in the ears of our friends. We sometimes even made things up. And sometimes, we started a rumor, not really meaning to, but we did it all the same.

The insatiable curiosity of the human spirit to learn new things is what drives us to the "I have to know" point where we beg our friends, "Cmon.... I promise I won't tell anyone. Tell me. You can trust me." We really meant it when we said it, but then, once we actually learn what all the hub-bub is really about, that's when things change.

What happens next is interesting. The value of the telling someone else soon outweighs the risk of becoming unworthy of the confidence that was placed in us. Then we spill our guts. But, not before asking the newest recipient to pinky swear they will not tell another soul. Then it repeats.

I am willing to do my part. So lean in close, because I want to share one of the most closely guarded secrets with you, that really isn't a secret at all. It is just hidden in plain sight.

I will tell you on one condition, and you have to cross your heart, hope to die, stick a needle in your eye... Alright, maybe that sounded a bit better when we were kids, but you have to promise that you will tell everyone you know AND tell them where you heard it.

Here it is. The secret is that you were born to be a millionaire.

Let that soak in for a minute, because it is absolutely true. By merely being born in the U.S., you are pretty much destined to be a millionaire.

Before you think I should be committed, let me clarify. You will earn more than a million dollars in your lifetime. More than ONE MILLION DOLLARS will pass through your fingers.

So, why aren't we all wealthy? Why don't we all retire and live terrific lifestyles?

The main reason is that we are not taught very much about about money, and what to actually do with it when we get it. Another reason is because you aren't actually supposed to keep very much of it.

But, wouldn't it be cool if you got it all in one lump sum? It would be more than cool, it would change everything we think about money.

The problem is that we get it incrementally, or in periodic installments. Maybe you get yours weekly, or bi-weekly, bi-monthly? It doesn't really matter how it arrives, what matters is who actually gets to keep it. Is it you or a bank? A credit card company? Loan Company?

Just as much as we get our income on the installment plan, we spend it on the installment plan. Some of us, even spend more than we get.

So, the secret to wealth really isn't a secret at all. It doesn't involve picking a penny stock, and hoping someday you will be the next Warren Buffet. It doesn't require you to win the Lotto, you already did. You are already wealthy. Incrementally wealthy.

The real secret of being a millionaire is that you have to actually HAVE the money. As shocking as this might sound, in order to REMAIN wealthy, you have to actually keep your money or at least most of it. A millionaire without his million is just someone who busts his hump every day.

Let me give you a great example; I am sure you have heard stories about people who win the lottery, and then they have people come out of the proverbial woodwork asking for their money.

People like your long lost Uncle Willy, who has a terrific idea to design a car that runs on gravity. It sounds a lot like a soap box derby car, but hey, who knows? It could turn out to be a winner if you never need to go uphill.

Or your environmentally minded third cousin, twice removed, who wants you to pay for a study of the yellow freckled, double chinned toad that looks a lot like a frog you might see around your own pond.

Before you know it, the Lotto winner is flat broke. The result of a series of bad decisions with a large sum of money looks identical to bad decisions made with small incremental amounts of money.

The irony is that there are an equal number of people trying to get their hands on your MILLION as it comes in, as there are with a Lottery winner.

Which is why most people in this country will retire and live on an income close to or below the poverty level. Since we get our million on the installment plan, we know there is always something more coming right around the corner. There is comfort in "tomorrow". A buy now, pay later mentality that must be stopped.

The primary reason you probably haven't ever had someone share this secret with you, is that it requires you to buy in to the idea of keeping your money and not just "buying". It requires a shift in your thinking which is uncomfortable for most of us.

Banks and credit companies don't want you to know this secret. If you did, you wouldn't be so inclined to let them get their hands on your money. So, rather than tell you the truth about already being a millionaire, and teaching how to be successful with what you do have, you are bombarded by other ways to get rich.

"How to make a fortune in real estate." "Make a fortune with Penny stocks", Learn internet marketing", "Selling on E-bay the easy way", the list goes on and on.

It just doesn't make too much sense to chase the million you don't have, rather than keep the one you are almost guaranteed to get.

That's why it is still a secret. If you thought this way, you wouldn't be the "spender" they need you to be.

So, now the secret is out. Go tell someone.

How A Movie From 1939 Could Save You From Financial Ruin

It's a Twister Dorothy!

That's what they said towards the beginning of the classic movie, " The Wizard of Oz". Then, of course, all of the family ran for cover in the storm cellar, after they released the livestock and horses. Dorothy, didn't make it to the shelter that afternoon, and Auntie Em was really worried.

Well, I am right there with Auntie Em. The only difference is that the "twister" I am worried about is the effect baby boomers are going to have on the two pillars of security that we call Medicare and Social Security.

Now, that particular twister is going to do a lot more damage than the one in the movie. In the movie, little Dorothy's house was pulled off it's foundation, and dropped on the wicked witch all in one piece. The damage was minimal. At the end of the movie, Dorothy had a small lump on her head, but was otherwise un-harmed. All in all, there was a happy ending.

The Baby Boom "twister" is real, and it is coming, and we had better start to get prepared. Especially since we are being forewarned once again.

The Social Security program, along with Medicare have, once again, been "reviewed" by their respective "Trustees" to determine how soon they will be insolvent. It would appear that Medicare will become insolvent around 2019, and Social Security will be broke sometime around 2041.

As a "card carrying member" of the Baby Boom generation, Medicare will be toast about seven years before I would be eligible for benefits. I can't tell you how thrilled I am to keep paying in to it knowing all of this.

The Social Security Program, however; appears to have a little longer life span than Medicare. It wasn't too long ago the date was predicted to be sometime in 2032. So, I guess I should be happy about that tidbit of good news, given the way Medicare is working out for me.

No matter how you look at it though, the message is pretty clear if you simply read between the lines. For those of you who don't, please allow me to decipher for you:

The message is: Don't Count On Us.

Just like Dorthy discovered, the Great Wizard (the government) cannot really magically provide a heart for the Tin Man, or a brain for the Scarecrow, nor can he provide whatever actually puts the "hot" in Hottentot, otherwise known as Courage.

In fact, the Wizard pretty much told Dorothy and her companions that the very things they sought to obtain were already in their possession. They needed only to realize it and to believe it.
Our government is, once again, telling us that we need to fend for ourselves because there is a storm coming, and we would be wise to get prepared if we hope to make it through. Not in so many words of course, but that's about it in a nutshell.

For me, that means we need to save our own money, become debt free as fast as possible, and be self sufficient. You know, all the things your Auntie Em ( your parents and Grandparents)probably told you were smart things to do with your money.

So, pay no attention to that man behind the curtain!

It is only me. But, if there really was a "wizard" , I suppose we would learn what we really already know; that the average American family can be come debt free without hurting their budget.

Furthermore and henceforth, from this day forward, they shall have the power to do so, if they realize that they cannot plan for their future while they are so busy paying for their past.

How much money you make is not as important as; how much of what you make will you actually keep? Getting out of debt is, without question, the single most important financial decision you must make in today's world.

Maybe, we should listen to Auntie Em and not depend on Uncle Sam, especially if we want our story to have a happy ending?

Why Wall Street Doesn't Intersect With Main Street

Have You Checked Your Map Lately?

If you did, you would notice that Wall Street doesn't actually intersect with Main Street. I know this might strike you as a strange observation, but it illustrates a greater point. The point is that there is an enormous gap between how Wall Street sees things as "good" and what the reality on Main Street, where most of us live, actually looks like.

So, what is the difference between a Bear and a Bull, and more importantly, why does it matter to you and me?

The "bull" thinks life is just peachy and that there is a great opportunity and future immediately ahead, and a "bear" thinks life is going to be rough in the coming days.

Personally, I am not sure what the immediate future holds for our economy, but in a recent article I mentioned that the writing is on the wall about some pretty serious issues to come.

I am talking about substantially higher taxes, low wages, inflation, a devalued currency, and a government that is no longer acting for the people and by the people. For if they were, the People's voice would be heard, and we would actually be solving the most pressing issues of our time instead of just talking about them.

These things most certainly need to be addressed. They don't need more speeches or for us to talk about them anymore. We have talked it to death. As far as I know, hot air hasn't actually solved any real pressing problems, except for making a balloon float or getting your hair to dry a little quicker.

I think the real reason the cherry blossoms show up a lot earlier these days, is not because of any impact of "so-called" Global Warming, but because of the huge amount of hot air in Washington, D.C. Just a theory of mine.

If we cannot address the most pressing issues of our time, then we must admit that we cannot depend upon the government to come to our aid when we retire. That places the ball squarely back in our court, just like it was for our parents. Like it or not, that's the way it is.

As the fundamental building blocks of our retirement system continue crumbling from abuse and neglect, it becomes more apparent that we must stand up on Main Street and take care of ourselves. We must support our local businesses, and communities. We must begin to pay back the money we have borrowed or face hardships like those that our grandparents and great-grandparents lived through. We are however, running out of time.

I am optimistic about the future, but my optimism is based on Americans coming to our senses. To be specific, I am talking about the debts owed by both the US government and the personal debt of it's citizens. Collectively and personally, we are leveraged to the hilt. Our country and most of us have a cash flow problem. We cannot begin to solve our problems without getting serious about debt.

As April 15th quickly looms ahead, most Americans are furiously trying to look for ways to pay less in taxes, but most will do nothing about the enormity of the impact interest expense has on their financial condition. The irony is that both are voluntary.


Although Main Street isn't connected with Wall Street, Main Street has a direct connection to the Road to Prosperity. Here are the directions on how to get there from where you are:

You must keep the money you earn, and the only way to do that is to stop giving it away to banks, credit card companies, and the government. We must stop robbing ourselves and our kids of our future.

I wish you luck on your journey to your future, and will look for you on the Road to Prosperity.

Master Your Debt, Master Your Destiny.

Does Uncle Sam Need You?

Does Uncle Sam need you? I sure think so. Now more than ever.

Yesterday, the Federal Reserve lowered the Federal Funds rate by another .75% which is being hailed as a great thing by many newspaper columnist and market watchers. While the benefits of this action will be noticeable for the players on Wall Street, they will be short lived at best. This is a short term solution to a long term problem, and it will actually serve to make the REAL problem worse.

So, oh wise one, "What IS the real problem?" you ask. Well grasshopper, the REAL problem is a dollar that is falling at a speed that would make Dale Jr. nervous. If Dale is nervous, we should be too.

If you are realizing that prices on the things you buy seem to be a lot higher these days, you are absolutely correct! I am not just talking about the cost of gas at the pump. I am talking about milk, cereals, meats etc. You know, the basics. Good grief, a gallon of milk costs more than a gallon of gas!

I don't think I can get out of the grocery store these days for less than about $160 a week. Although, if you read the newspapers and believe what they are saying, inflation hasn't actually shown up at the economic party yet. You had better brace yourself, because if it isn't here, it is on the way. BIG TIME.

The only reason it hasn't reared it's head yet is that our government has removed the cost of oil, food and how much currency that is in circulation from the calculation. The result is low numbers and a false sense of security. This new formula makes the math on Global Warming look like Einstein himself did it.

I don't know about you, but I kind of think those things are a little important to our economy. We are being given only a part of the truth when it comes to our real economic state. So, is a half truth really a lie?

When the Fed lowers the federal funds rate; banks and consumers ultimately, have more ready access to cash, which can be borrowed. This puts more currency into circulation, which serves to deflate the "value" of a dollar. If a dollar is worth LESS, then it will take MORE dollars to fulfill the true costs of a particular good or service. Thus, INFLATING the price.

THIS is exactly why a barrel of oil goes for $110 these days, and why families are now having to pony up $400 to $500 a month for gasoline to get back and forth to work. It now costs as much every month to actually RUN your car as it does to buy it! That's what is going on here in OUR country.

On the international scene, nations like Iran and Venezuela, two oil producing countries, (who are not exactly our pals) are now selling their oil on the open market for other currencies and they will not take the U.S. Dollar. At the same time, China is currently booming economically, and they are buying oil like it is going out of style. Purportedly, to increase their strategic petroleum reserves, which is driving the price even higher.

When the United States came off the the gold standard, the "dollar" replaced gold as the standard for many economies around the world. Our country has benefited from this enormously, and in order to remain an economic super power we need it to remain that way.

The falling value of the dollar is causing many countries to rethink their strategy of using the US Dollar as a standard. In fact, several countries have already begun to transition to a different currency. This is not good for the home team.

Converting to a different currency requires them to sell or unload their dollars in the currency market. This selling off will ultimately lead to substantially higher inflation, similar or worse than what the United States experienced in the mid to late 1970's. For those of you who remember, we had gas lines and 16% mortgage rates for people with good credit, and polyester leisure suits too. None of it was good.

So, what does all of this have to do with becoming debt free, which is the main topic here? The ONLY way to stop the bleeding of the the U.S. Dollar is to have our government reduce spending (good luck with that), decrease our dependence on foreign oil (stop laughing!) and for the average American family to get themselves out of debt. You may not be able to do much about the first two, but you can sure control the last item. You need to save yourself or you will go down with the ship.

By getting your family out of debt, you will have more disposable cash and you will save thousands of dollars in interest expenses, and have choices about your future. Choices, that is what freedom is all about. Freedom to choose where you live, who will represent YOU in our government, what you do for a living, etc. Quite frankly, I believe this is the single most important financial step you you can take for yourself. It has never been more important than it is now.

If most American families did the same, the banks would have increased liquidity and not need the Federal Reserve to help them. This will help to prop up the dollar and most importantly, it is our duty as freedom loving Americans to do what we can to protect our economy and our country.

I believe that the best America has to offer is yet to come, but we face a world unlike anything we have known before. Our enemies know we have the worlds most powerful military, and they cannot win on the battlefield. The only way we can be defeated is economically. The first step is to devalue our currency, and it is happening NOW.

So, in case you haven't noticed, there is a war going on, and it is not just being fought in Iraq and Afghanistan. The fight is on, and I hope you join me in becoming debt free. Your country and your future needs you. Will you answer the call?

Email me at jimsetters@debtmastersllc.com to learn more on how you can become debt free faster than you ever thought possible. God bless you and May God continue to Bless America.

The Real Reasons the "Mortgage Meltdown" is happening

Today I read an article in the paper that stated HUD was going to implement new rules that would protect home owner's from the big bad, predatory lenders. I have been seeing this kind of drivel in the papers and on the evening news for a while now, and I have had enough.

Every good story needs a hero and a villain, and in this case mortgage lenders and mortgage brokers are being made out to be evil, predatory, foul and untrustworthy. If there wasn't a market for these products no one would use them. Now that is not to say that there aren't bad people in the lending business, because every industry has their share of pirates and crooks. These people definitely need to be driven out of the business at a minimum. But, I can attest to my experience over the past 17 years, that the people I know in the financial services are good, honest hard working people who truly care about their clients and work very hard to help them.

So, rather than be complacent and not speak the truth, which most people don't want to hear, I would like to share what I believe to be the REAL reasons of the so called housing crisis. Stand back, because here it comes, (this has been brewing for a while)

Lack of Jobs, Loss of industry, ridiculous taxes on businesses and payroll, insane gas prices, a lack of refining capacity because of weird and wacky environmentalism, food costs going through the roof, inflation numbers that are cooked to look good, credit card debts that are out of control, credit card payments that were doubled in 2007 by the governments own rules, a banking industry that could care less about the damage it creates much less be held accountable for it, repeated Fed rate increases to stop inflation (which according to them wasn't really happening but could happen), Alan Greenspan recommending adjustable rate mortgages be offered by mortgage lenders in greater numbers, a mindset that the American public is too dumb and cannot make good decisions about their own finances and therefore are not responsible for any of their decisions, and last but not least...


Drum roll please..... a government that is so out of touch with the people, it is utterly ridiculous to think they can solve the problem when they have created it. The national mottos is "In God We Trust" but somehow we are supposed to make the leap, once again, that the government can stop their own carnage and solve our problem. the truth is that they ARE the problem or at least a big part of it.

The image of the Department of Housing and Urban Development riding in on a white steed, frantically waving additional regulations to save the day, is enough to make a person wretch. Call me silly, but to me, it is tantamount to letting a convicted thief come in to your home and charge you to explain how HE would rip you off in the guise of helping you. He still got your cash.

Did I miss anything? Whew! That felt good, now on to what we must do to fix this mess.