Some time ago I wrote about how insurance is a bad investment and should be used only for protection. Today I'm going to pile on another bad investment in the current financial environment - good 'ol certificates of deposit.
I’m routinely contacted by people looking for a higher rate of return than can be found on CDs. Such frustrated investors are everywhere these days, as 12-month CD rates have hovered below 1%. Even in this environment, however, many are reluctant to leave the ‘safety’ of CDs.
Here’s what I’ve told those investors, and everyone else for the past year: Safety and capital preservation are not the same thing. CDs are not safe, in terms of preserving your capital. They are in fact locking in a loss; the real CD return is currently negative after inflation plus taxes on the interest. If fact, in terms of annual purchasing power, a CD investor will likely have about 2% less than they did before putting the money in the CD.
To preserve capital in this market/economy, investors will need something more than CDs. One secure alternative is U.S. government bonds. The interest paid may not be much more than on CDs, but those bondholders don’t have to pay any state taxes on the interest. These bonds do carry risk, but in a way, U.S. government bonds are safer than CDs – there’s less chance Uncle Sam will go insolvent than a bank.
Another alternative is municipal bonds. For residents who purchase such bonds issued in their state, none of the interest is taxable at the federal or state level. This means a bond with a 2% coupon would have an effective taxable yield of closer to 3%, assuming the bond is purchased at or near par value.
A third option is to invest in dividend paying stocks of large companies. Many well-known companies are paying up to 5% a year just to invest in their stock. The stock price could go down, but if it goes nowhere the investor will make that dividend yield on the money, and if the stock price goes up, even better! And also, qualified dividends currently receive favorable tax treatment.
These are all good, manageable risks for people to take with some of their savings – and it beats the heck out of an inflation-and-tax adjusted 2% loss!
Monday, December 12, 2011
Thursday, December 1, 2011
The Problem With Kids Is Parents
There are no bad kids, there are only bad parents. I say this all of the time, and usually end up defending it to a parent who seems convinced that some kids are so insufferable, no parenting would have mattered.
When an adult argues that there's something in the gene pool that turns children into delinquents, you can assume two things: 1) that parent had or has rotton kids, and 2) that you've just heard an incredible crock of crap. Sure, some infants are born with genetic mental or physical defects, but none are born inately bad.
Bad kids are a direct by-product of bad parenting. And bad parenting doesn't mean abusive parenting - there are a lot of ways to be a bad parent. One example is the parent who compensates for never being around their kids, by giving their kids whatever they want. They're the ones most likely to think they're great parents, when just the opposite is true. Their kids will not contribute to society.
Another one of the worst kinds of bad parents are the enablers. You know, the kind whose kids never do anything wrong, and if they do, believe everything their kid says in defending their actions. Here again, they think they're great parents, but really they suck at it. Those kids eventually leave home, then get their asses kicked by the real world. Or they never leave home, to avoid getting their asses kicked.
To be fair, bad parents are often the product of a poor environment, perhaps from an abusive past, or from having kids too young. However, most of the bad behavior I see in my white-bred suburban lfe comes from comes from children of well-to-do parents. Go figure.
If we want to reduced juvenile delinquency, let's cut of the snake's head. Stop focusing on the bad kids, and start calling out the bad parents.
When an adult argues that there's something in the gene pool that turns children into delinquents, you can assume two things: 1) that parent had or has rotton kids, and 2) that you've just heard an incredible crock of crap. Sure, some infants are born with genetic mental or physical defects, but none are born inately bad.
Bad kids are a direct by-product of bad parenting. And bad parenting doesn't mean abusive parenting - there are a lot of ways to be a bad parent. One example is the parent who compensates for never being around their kids, by giving their kids whatever they want. They're the ones most likely to think they're great parents, when just the opposite is true. Their kids will not contribute to society.
Another one of the worst kinds of bad parents are the enablers. You know, the kind whose kids never do anything wrong, and if they do, believe everything their kid says in defending their actions. Here again, they think they're great parents, but really they suck at it. Those kids eventually leave home, then get their asses kicked by the real world. Or they never leave home, to avoid getting their asses kicked.
To be fair, bad parents are often the product of a poor environment, perhaps from an abusive past, or from having kids too young. However, most of the bad behavior I see in my white-bred suburban lfe comes from comes from children of well-to-do parents. Go figure.
If we want to reduced juvenile delinquency, let's cut of the snake's head. Stop focusing on the bad kids, and start calling out the bad parents.
Tuesday, November 22, 2011
Still More Things For Which I'm Not Thankful
For the third consecutive year, I present my contrarian Thanksgiving week entry, listing in random order those things for which I'm not thankful. (If you want to catch up on the prior versions, see 2009 here and 2010 here.)
Republican presidential candidates stumping in Iowa, and their related advertising and robo-calls.
The cold and darkness. (To avoid confusion, here I’m referring to the weather, not the Republican presidential candidates again.)
The curerent state of the economy.
Any TV reality series based solely on cameras following people living their ‘normal’ lives. (I’m looking at you Kardashians, Duggars, teen moms, hoarders, and housewives)
Dreamers without pragmatism, a/k/a leaderless political movements. (Tea partiers and Occupiers, go away, your 15 minutes is up.)
Paying people to not work.
That the NBA lockout is keeping EJ, Kenny, and Charles off the air.
The politically far right and the politically far left.
Anyone who thinks insurance should be used as an investment vehicle.
Speaking when not speaking would have been just as good.
[This list gets longer every year. That's either a bad omen, or a sign that I'm quickly becoming a malevolent old man, or both.]
Republican presidential candidates stumping in Iowa, and their related advertising and robo-calls.
The cold and darkness. (To avoid confusion, here I’m referring to the weather, not the Republican presidential candidates again.)
The curerent state of the economy.
Any TV reality series based solely on cameras following people living their ‘normal’ lives. (I’m looking at you Kardashians, Duggars, teen moms, hoarders, and housewives)
Dreamers without pragmatism, a/k/a leaderless political movements. (Tea partiers and Occupiers, go away, your 15 minutes is up.)
Paying people to not work.
That the NBA lockout is keeping EJ, Kenny, and Charles off the air.
The politically far right and the politically far left.
Anyone who thinks insurance should be used as an investment vehicle.
Speaking when not speaking would have been just as good.
[This list gets longer every year. That's either a bad omen, or a sign that I'm quickly becoming a malevolent old man, or both.]
Tuesday, November 15, 2011
Lobbyists + Money x Politicians = Results
Here's a reason why the Occupy movement exists:
According to a November 15th CNNMoney report, filings show that after the bailout of mortgage giants Fannie Mae and Freddie Mac, nearly $100 million of tax money went to lucrative pay packages for top executives. The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, and the top five at Freddie Mac received $28.1 million. Today both the House Financial Services Committee and the Senate Banking Committee were scheduled to discuss the Fannie/Freddie compensation packages of the firms' top executives. But that posturing isn't going to get this money back, much less send anyone to jail for bilking investors/taxpayers out of millions/billions in the financial crisis (no one has even been indicted).
Now, here's why the Occupy movement will never accomplish anything in the area of financial reform, or anything else for that matter: http://www.youtube.com/watch?v=CHiicN0Kg10
In short, they need lobbyists!
According to a November 15th CNNMoney report, filings show that after the bailout of mortgage giants Fannie Mae and Freddie Mac, nearly $100 million of tax money went to lucrative pay packages for top executives. The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, and the top five at Freddie Mac received $28.1 million. Today both the House Financial Services Committee and the Senate Banking Committee were scheduled to discuss the Fannie/Freddie compensation packages of the firms' top executives. But that posturing isn't going to get this money back, much less send anyone to jail for bilking investors/taxpayers out of millions/billions in the financial crisis (no one has even been indicted).
Now, here's why the Occupy movement will never accomplish anything in the area of financial reform, or anything else for that matter: http://www.youtube.com/watch?v=CHiicN0Kg10
In short, they need lobbyists!
Tuesday, November 8, 2011
A 2012 Candidate Guide
It's Election Day, circa 2011. Not a whole lot to worry about nationally today, but a year from now - oh baby.
Now seems a good time for my independent (yes, there are still independents out there), Iowa-based analysis of the current serious (?) Republican candidates. In no particular order:
Mitt Romney - Plasticman. Backpedaling on his past in order to get the right-wing to nominate him. He's probably going to get that nomination, and then start moving to the center again, while spending a bunch of time rationalizing how Romneycare is different than Obamacare.
Herman Cain - Doesn't really want to be president. Just got in this thing for the attention and to sell his book, and didn't plan on the scrutiny. The only reason people are drawn to him is his 9-9-9 tax plan, which just proves in this economy, any idea, good or bad, is better than no idea at all.
Michele Bachmann - WOITH. Less qualified to be president than Sarah Palin, by far, and that's no compliment. In way over her head, but since she only talks to friendly crowds (and literally avoids those who might intellectually confront her - just Google 'bachmann grinnell college') she doesn't know it.
Ron Paul - The most independent, dare I say Liberitarian candidate, which makes him very likable. Unfortunately, his ideas for swift and radical change would make things a lot worse before they could possible become better, and no one is going to vote for that.
Rick Santorum - Can't take his colorless form seriously, not to mention his last name. (Google that, too.)
Rick Perry - Not ready for national prime-time politics, and maybe never will be. Partly a victim of the Texas-governor-cowboy fatigue of the American public, and partly a victim of not understanding what is and isn't acceptable to blurt out when running a national campaign.
Jon Huntsman - Best of the bunch. Moderate. The only one who seems to understand the role of foreign policy in the U.S. But his only hope is a John McCain-like, crazy come-from behind 3rd place or better in the Iowa caucuses, where he's not campaiging. (Another reason to like him.)
Newt Gingrich - The Bill Clinton of the Republican Party. Most intellectually ready to be president of the group, but also the most personally flawed - although Cain is giving him a run for his money. Probably wishes he could have back some of what he said as Speaker of the House in the 90s.
Ladies and Gentlemen, your Republican candidates for president. A year from now I suspect they will all just be part of New Jersey Governor Chris Christie's very large shadow.
Now seems a good time for my independent (yes, there are still independents out there), Iowa-based analysis of the current serious (?) Republican candidates. In no particular order:
Mitt Romney - Plasticman. Backpedaling on his past in order to get the right-wing to nominate him. He's probably going to get that nomination, and then start moving to the center again, while spending a bunch of time rationalizing how Romneycare is different than Obamacare.
Herman Cain - Doesn't really want to be president. Just got in this thing for the attention and to sell his book, and didn't plan on the scrutiny. The only reason people are drawn to him is his 9-9-9 tax plan, which just proves in this economy, any idea, good or bad, is better than no idea at all.
Michele Bachmann - WOITH. Less qualified to be president than Sarah Palin, by far, and that's no compliment. In way over her head, but since she only talks to friendly crowds (and literally avoids those who might intellectually confront her - just Google 'bachmann grinnell college') she doesn't know it.
Ron Paul - The most independent, dare I say Liberitarian candidate, which makes him very likable. Unfortunately, his ideas for swift and radical change would make things a lot worse before they could possible become better, and no one is going to vote for that.
Rick Santorum - Can't take his colorless form seriously, not to mention his last name. (Google that, too.)
Rick Perry - Not ready for national prime-time politics, and maybe never will be. Partly a victim of the Texas-governor-cowboy fatigue of the American public, and partly a victim of not understanding what is and isn't acceptable to blurt out when running a national campaign.
Jon Huntsman - Best of the bunch. Moderate. The only one who seems to understand the role of foreign policy in the U.S. But his only hope is a John McCain-like, crazy come-from behind 3rd place or better in the Iowa caucuses, where he's not campaiging. (Another reason to like him.)
Newt Gingrich - The Bill Clinton of the Republican Party. Most intellectually ready to be president of the group, but also the most personally flawed - although Cain is giving him a run for his money. Probably wishes he could have back some of what he said as Speaker of the House in the 90s.
Ladies and Gentlemen, your Republican candidates for president. A year from now I suspect they will all just be part of New Jersey Governor Chris Christie's very large shadow.
Sunday, October 30, 2011
Des Moines Halloween = Lame
Halloween and its costume-related activities were not a thing for me growing up. I don't recall Trick-or-Treating a single time as a child living on the farm. Isn't that sad? Not sure I've ever been to a single costume party in my life, either.
Then I had kids, and I started to have a little bit of fun with Halloween. For more years than I can remember now, on Trick-or Treat night I'll dress up like a combination of Michal Myers from the movie Halloween and Jason from the movie Friday the 13th, and give out candy on the porch while little kids get a little scared. This year, as every year, there are at least a couple of kids that don't want to come to the door when they see me, which is awesome.
Alas, it's not as fun as it once was. It isn't me, either. It's not as fun because Halloween in Des Moines is so lame these days.
First, Trick-or-Treat night here isn't even on Halloween, it's on October 30th. (Don't ask, I don't know, some goofy central Iowa tradition.) Next, the costumes have become a joke. Nobody makes them anymore, they just buy a mask or some other piece of pre-made store crap. This year I had a few kids that didn't even bother to wear a costume. WTF?! My wife made great costumes for my kids back in the day - what happened to everyone else?
Finally, here along with saying "Trick or treat" (which they often lamely don't even bother to do) the kids are expected to tell you a little joke or riddle. (Again, don't ask, another tradition.) No one gives this much of an effort these days, either.
Not counting the 100 different "Why did the (something) cross the road?" jokes, here were the least lame ones:
Why was 6 scared of 7?
Because 7 8 9.
Why didn't the skeleton go to the dance?
Because there was no 'body' to dance with.
What do you call a fat jack o'lantern?
Plumpkin.
What did one skeleton say to the other skeleton?
I have a bone to pick with you.
Where does a zombie live?
Dead End.
What did the ghost order at the bar?
'Boo'ze.
And a couple unrelated to Halloween:
What does a house wear?
A(d)dress.
How do you stop Lady Gaga?
Poker Face.
A final lame item: Every year there are kids too old to be Trick-or-Treating. If they want candy that much, they should go buy some. Of course, they invariably end up telling a more adult joke, like this one from this year: Why couldn't the jack o'lantern have children? Because of his halloweener.
Then I had kids, and I started to have a little bit of fun with Halloween. For more years than I can remember now, on Trick-or Treat night I'll dress up like a combination of Michal Myers from the movie Halloween and Jason from the movie Friday the 13th, and give out candy on the porch while little kids get a little scared. This year, as every year, there are at least a couple of kids that don't want to come to the door when they see me, which is awesome.
Alas, it's not as fun as it once was. It isn't me, either. It's not as fun because Halloween in Des Moines is so lame these days.
First, Trick-or-Treat night here isn't even on Halloween, it's on October 30th. (Don't ask, I don't know, some goofy central Iowa tradition.) Next, the costumes have become a joke. Nobody makes them anymore, they just buy a mask or some other piece of pre-made store crap. This year I had a few kids that didn't even bother to wear a costume. WTF?! My wife made great costumes for my kids back in the day - what happened to everyone else?
Finally, here along with saying "Trick or treat" (which they often lamely don't even bother to do) the kids are expected to tell you a little joke or riddle. (Again, don't ask, another tradition.) No one gives this much of an effort these days, either.
Not counting the 100 different "Why did the (something) cross the road?" jokes, here were the least lame ones:
Why was 6 scared of 7?
Because 7 8 9.
Why didn't the skeleton go to the dance?
Because there was no 'body' to dance with.
What do you call a fat jack o'lantern?
Plumpkin.
What did one skeleton say to the other skeleton?
I have a bone to pick with you.
Where does a zombie live?
Dead End.
What did the ghost order at the bar?
'Boo'ze.
And a couple unrelated to Halloween:
What does a house wear?
A(d)dress.
How do you stop Lady Gaga?
Poker Face.
A final lame item: Every year there are kids too old to be Trick-or-Treating. If they want candy that much, they should go buy some. Of course, they invariably end up telling a more adult joke, like this one from this year: Why couldn't the jack o'lantern have children? Because of his halloweener.
Sunday, October 23, 2011
Age Is A Gift
Last week I happened to know two individuals who turned 50 years old, and another who turned 55. While they were all taking it in stride, we all know people who have not been so accepting of their newfound maturity.
Like so many others, I might have been one of those people who got depressed when I turned 40. But around age 35. I took to heart something another person told me. Age is a gift.
Life expectancy in the U.S. is around age 80. Having said that, who doesn't know dozens and dozens of people who don't make it to 80, or 40, or even 20.
Just this weekend Des Moines held its annual Race For The Cure event, to raise money for the prevention and treatment of breast cancer. If you're feeling bad about aging, just go to one of those sometime.
I've participated in Race For The Cure many times, and it's humbling to think how many young women have lost their lives prematurely to breast cancer. Add to those all of the other people who die young from other illnesses or injuries, and complaining about one's age is exposed as a very stupid thing to do.
The next time you hear someone lamenting about their birthday/age, tell them that age is a gift. Then tell them to stop bitching about it.
Like so many others, I might have been one of those people who got depressed when I turned 40. But around age 35. I took to heart something another person told me. Age is a gift.
Life expectancy in the U.S. is around age 80. Having said that, who doesn't know dozens and dozens of people who don't make it to 80, or 40, or even 20.
Just this weekend Des Moines held its annual Race For The Cure event, to raise money for the prevention and treatment of breast cancer. If you're feeling bad about aging, just go to one of those sometime.
I've participated in Race For The Cure many times, and it's humbling to think how many young women have lost their lives prematurely to breast cancer. Add to those all of the other people who die young from other illnesses or injuries, and complaining about one's age is exposed as a very stupid thing to do.
The next time you hear someone lamenting about their birthday/age, tell them that age is a gift. Then tell them to stop bitching about it.
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