The Power of Interest

November 30, 2009

If you were offered a 28 day job that would pay you one penny for your first day of work—then double that each day there after. Would you accept that job?

Probably not—right?

It might surprise you to learn that on the 28th day, you would earn $1,342,177.28!

That’s the power of compound interest! And it’s why Albert Einstein called it the most powerful force on earth. However, it can work both for you and against you.

Banks and financial institutions try to make this work against you—and for them! And, considering that over 95% of people will retire dependent on others, I think they are doing a pretty good job of it.

In fact, J. Reuben Clark depicted the negative power of interest quite well when he said:

“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours. . . . Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.”

So, which side of Compound Interest do you want to be on?

By “Becoming Your Own Banker”, you put the power of compound interest on your side.

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Many people all over the country have adopted the president’s motto of “change” or “change we can believe in.”  I am by no means opposed to mixing things up here and there, but some of the ways this whole “change” idea has trickled down from Washington are nowhere close to change that I can believe in.  A recent article in the Boise State University student newspaper, The Arbiter, had the president of the university, Bob Kustra, spouting some interesting redistribution of wealth ideas.  Here is the link to the article through the university newspaper’s website—>robin hood.

To quote Mr. Kustra, “What do we do?  We take from those who can afford it and redistribute to those who need it. We do it quietly as public institutions and without fanfare.” (emphasis added)  This quote alone is wrong on so many levels I can’t imagine such a high profile individual making such a statement.

Kustra went on to say, “If we increase tuition by double digits, it must be returned to need-based students.”  I’m wondering how Mr. Kustra could possibly justify simply taking from the ‘haves’ and giving to the ‘have-nots.’

I think we need to understand the breadth of the damage that is being caused by adopting this philosophy.  On the surface it seems like we are punishing those students that can pay full tuition and rewarding those that cannot, but as the following quote from Howard W. Hunter states we are creating a lose – lose situation, “Both have lost their freedom. Those who “have,” lost their freedom to give voluntarily of their own free will and in the way they desire. Those who “have not,” lost their freedom because they did not earn what they received. They got “something for nothing,” and they will neither appreciate the gift nor the giver of the gift.”

We can only hope that this is not the kind of  ‘change’ we can expect to see on a national level!

New book now available!!

November 16, 2009

discovering hidden treasures

Head over to my website to pick up a copy of the new book!  available in hard copy or PDF.

here is a little write up about the book:

We live in a new financial world where much has changed, yet most advisors are still peddling the same old stuff. They preach asset allocation, diversification, risk-tolerance, and all the other buzz words of traditional methods that frankly are NOT working. People are postponing retirement, or having to live on much less than they had anticipated. The stock market and real estate have changed dramatically. It’s time to assess what you are doing.
Inside this book you will learn about hidden treasures of knowledge which will help you see how to create, retain, and transfer wealth. These are methods and strategies not often taught in the financial community, but can assist in handling many financial concerns.Questions like:

What is going on in the economy and how does it effect my financial plan?
How is best to save for retirement?
How can I jump-start my retirement?
How can I create additional tax advantages?
Where is the best source for financing my personal and business needs?
How can I protect my assets and pass them efficiently to my heirs?

These and many more questions will be answered as you read through the book. You will find it easily understandable and full of common sense.

The Socialist Experiment

November 16, 2009

An economics professor at a local college made a statement that he had never failed a single student before but had once failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, “OK, we will have an experiment in this class on socialism. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. The Class agreed!

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little. The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F. The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

Take a little trip over to one of the most shocking sites on the internet…..http://www.usadebtclock.org.   This site provides up to date information regarding the nations current debt situation.  This just goes to show you that you cannot spend your way out of a recession, and the more you try the more burden you put on tax payers (as I write this the debt per tax payer is $109,932).  Do what you should have done years ago and get the government as far from your personal finances as possible.  The best place to start is your 401k or IRA, these government created loop holes are just another way to tell you what you can and can’t do with your money.  Why should the government be able to tell you how much you can put into savings for retirement?  Why should the government tell you when you can start to take money out of your retirement savings?  Sure I’ve heard the common excuse, “but if I could take my money out earlier I would spend it on unnecessary things!”  Everybody that says that could use a little lesson on self-discipline and with a little help could better their situation by being in control of their assets.