Wisdom From Wenchypoo's Mental Wastebasket

Just in Time For Black Friday and Beyond: Print Ad Susceptibility

2009-11-27T08:39:00.005-05:00

Originally written in 2005.
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Do you ever find yourself unable to resist print ads and suggestive sales when you easily defeat those broadcast on TV? You know, those enticing layouts of nicely decorated rooms with itemized shopping indexes (where you too can buy this stuff) on spreads in Good Housekeeping and Ladies’ Home Journal?

It’s everywhere, even shoved into your mailbox once a week, courtesy of the U.S. Postal service. There’s nothing like a bundle of glossy four-color paper with no less than four rivaling pizza company ads, three furniture ads, a carpet cleaning service card with someone’s missing kids on the back, and a folded spread of just about every fast food joint around. Maybe, just maybe, a local over-priced grocery store circular included in the bundle. We usually get ours on Tuesdays or Wednesdays, and the whole thing goes straight into the trash.

I’ve asked my mail carrier what I can do to get off this federally-sanctioned junk mail list, and am told I cannot because the advertisers deal directly with USPS to produce and distribute this pathetic excuse for mail. It kind of makes sense, though—the postal service producing junk mail so the carriers have something to deliver in this day and age of electronic billing. If there isn’t a reason for the service to exist, then make something up.

Meanwhile, back at the magazine rack, advertisers are saying essentially the same thing—how can we sell something that nobody seems to want individually? Group them together in some kind of attractive spread, such as a “living room redo” or “closet makeover.” How can we attract more advertisers through product placement in a set number of pages? Do a “kitchen remodel” or a “gourmet cooking” spread. Let’s add more twist and throw in a holiday theme—“backyard barbeque on the fourth of July” or “a traditional Christmas homecoming.” Do you see how subtle print ads have become? They aren’t just an item with a price any more. Now, they tell a story.

You can have this story too, if you’ll just go out and buy the following…and that’s where the seduction begins. That’s the hidden message in these lavish room layouts and fancy four-color ads—fall for it, and you’re hooked for life. Then, you can’t pass up a magazine rack in the grocery store checkout, or stroll through a hardware store without perusing their home makeover books and booklets. HGTV becomes a regular for the TiVo, and don’t get me started on THOSE ads (done live and unscripted in the guise of home improvement programs, mostly for Home Depot).

The addiction begins…the magazines start appearing in your mailbox. You salivate over more and more layouts of elegant-but-unachievable looks for family room and kitchen, lawn and garden, even the garage! The clippings start piling up, and you swear you’re going to organize them someday. Five years later, you finally get to it, only to wind up throwing out about half, because you’re no longer interested in the item(s). This is exactly what they want from you—the magazine is only good for 30 days, but the image and idea is good as long as you have that clipping. If the image and idea is strong enough, they may even make you actually go out and purchase the item(s). This is want creation in print form, paid for by advertisers, and lovingly laid out, color- and accessory-coordinated, and photographed by magazine staff.

It doesn’t stop with magazines, either. Department store ads have the same effect: the color-coordinated come-hither. Target, Walmart, and others are all guilty of this, and we can’t seem to stop ourselves once we’ve reached addiction mode. At this stage, everything looks like something we have to have. Our interior decorator minds are racing as we pair up furniture with accessories, clothing with jewelry, rugs with wallpaper, paints with laminates—all generated from the collection of print ads we get in the Sunday paper.

Take back control of your mind and your wallet—stop getting those magazines and Sunday papers (or at least throw out the circulars). You have been gotten to through print, and don’t even realize it! You don’t need new furniture, and you certainly don’t want to buy any of that cheap Chinese crap they sell anyway. You don’t need new bedding or clothing, so put down those department store flyers. Your kitchen will never grace the cover of Good Housekeeping no matter what you do to it, so quit saving those magazines and clippings. Don’t even stop to peruse the weekly wad of pizza ads that the mailman brings. Get mad and tired of others always telling you how you should live, eat, and look—that’s for YOU to decide on your own.

And for a follow-up, we have:

The "Con" in Lexicon

Just so you know--there are no Black Friday deals, only short intense sales of inferior merchandise. Take a closer look at that $400 laptop, and see how much (or little) memory it has. That $239 flat screen TV--how much resolution does it have? The $50 digital camera--how many features does it have? That $300 washer/dryer set--how much capacity does it have, how many features, and how long will you have to wait for delivery?

You can do better by waiting. From December 26 through April 15, you can do MUCH better--that's tax time for leftover inventory, and precisely when you should be doing NEXT YEAR'S Christmas shopping.

Planning Ahead for NEXT Christmas

It's just like all the turkey sales--that stuff has been sitting in the store freezer for a year, untouched, so they're going to mark it down to low prices per pound...as long as you buy $25-$50 more stuff in the store. So you get soaked with an old turkey, made overweight by ice, more stuff you really didn't need but got anyway to secure the turkey price, and ended up paying close to $250 for that Thanksgiving turkey dinner store coupon, and now are stuck with unwanted leftovers...and now you notice that fresher turkeys are cheaper throughout the REST of the year!

I leave you with this thought: do you know how many stores actually mark prices UP for a sale? If you want to know, pick an item and keep track of it--even through a "sale." Chances are good you'll find the item actually marked UP per unit for the sale. Just for fun, lift the sale sign and try to see what the item costs regularly.

Even though I just listed this in another article yesterday, I'm going to list it again: Loss Leaders and Human Psychology

Apply this article's wisdom to Black Friday shopping, as well as holiday shopping in general (including the food).

Just in Time For the Holidays: Food Banks Go High-Tech to Feed the Hungry

2009-11-27T08:15:00.002-05:00

From Yahoo Technology.

If they have money for automation, then they shouldn't be running ads on TV and in the news about how empty their shelves are! How does automation actually FEED someone?

"What we tell people a lot is that we are a food distribution business wrapped in an altruistic skin," says Jan Pruitt, president and CEO of the North Texas Food Bank in Dallas.

Her food bank, along with Food Lifeline in Seattle and the Food Bank of Central New York in East Syracuse, are testing a $60 million effort by Feeding America, an umbrella organization for about 200 U.S. food banks, to create a state-of-the-art national computer network that will greatly automate services."

There's your answer--there's money involved, so someone wants to keep track. Obama's policies aim to ensure the need for food banks never wanes. Put the two together. Here's some more of the new economy for you.

Next thing you know, the food banks will go public with IPOs, and show up on the stock market. Some thrift stores already have, and most dollar stores have been there for years.

So how long will it be before the family CEO can open the family IPO?

This Just In: See/Hear/Speak No Warnings About Asset Bubbles

2009-11-27T08:04:00.001-05:00

From Martin Weiss Research.

"Yes Virginia, there is a Santa Claus. And he lives in Washington, DC! He’s going to give you more than two years of abundant liquidity and cheap money. Go ahead and party and speculate like mad because the cops aren’t going to shut things down anytime soon."

Welcome to the REAL new economy--based on trading and speculation rather than production and savings.

This Just In: The Flu-Fighers in Your Food

2009-11-26T09:28:00.002-05:00

From the Wall St. Journal. I can see you laughing and shaking your head at this one, saying, "DUH!"

Let's give them a break now--they write business and money stuff, not health and wellness stuff. I guess someone finally took his tie off and opened a window.

"A diet rich in nutrients such as vitamin A, found in colorful fruits and vegetables, and zinc, found in seafood, nuts and whole grains, can provide the critical fuel the body needs to fight off disease, heal injuries, and survive illness when it does strike, experts say."

Yes, and a diet lacking in junk food, fast food, takeout, and the typical New York street fare DOES NOT. Even meals at the vaunted Four Seasons include institutional canned foods.

"The human body doesn't have to be starving to suffer from malnutrition. Studies show that obesity, in addition to its other health risks, may also make people more susceptible to infections like the flu. A diet heavy on processed and fast foods may be low in the vitamins and minerals important for health. And diets that are high in saturated fat appear to actually depress the body's immune response, increasing the risk of infections."

Remember...the Wall St. Journal usually doesn't publish health-related pieces unless they relate to business or money. Obviously, they're talking to their own kind here, so bear with them and me.

This Just In: Global Warming With the Lid Off

2009-11-26T08:50:00.008-05:00

From the Wall St. Journal. You've heard about this on TV--the emails showing that climate data was purposely falsified to reflect a warming climate. Well, here's more of the story.

This was the biggest political rip-off of the century...or at least COULD HAVE BEEN, and it was all done Bernie Madoff-style. A whole new "energy economy" was in the making so the rich and influential could STAY that way...including T. Boone Pickens, country leaders, politicians, etc. Our own economy was in the toilet, and Obama was going to see it stayed that way, so money and attention would be diverted into this "new" Wall Street with no rules or regulations--energy trading. Al Gore was their pitch man.

The energy credits exchange was already set up in London, where foreign traders wouldn't be subject to taxes, or if they did, the taxes would be another write-off. The U.S. "credits" were already cornered by G.E. These energy traders would be the new Masters of the Universe--the rest of us wouldn't be able to go anywhere, do anything, or make anything without having to seek permission (through energy credits/a.k.a. "pollution credits") to do so. We peons would all be thrown back into Third World status practically overnight.

Global warming was just the beginning...pile this on top of Health Care "Reform" and all the goodies hidden in THAT trap, and Universal Savings (yet to come), and all the other "universals" in the wings, and you'd have Obama's America--and Uncle Sam's REAL plantation! We'd be so under the thumbs of government, it wouldn't be funny.

Speaking of under thumbs, you see who fell hook, line, and sinker for this marketing scheme--the most susceptible of us all to marketing: Europe, who is ALREADY under government thumb pressure, and Liberals, who WANT to be under government thumb pressure because they can't think or do for themselves.

Here's what I wrote about global warming back in 2007:
The Great Scam That is Global Warming
Green is Making Me See Red

2008:
Global Warming as Environmental Creationism

2009:
Global Warming--When All Else Fails, Change the Marketing Plan

Now I'm going to have my moment: I TOLD YOU SO!!! Our last weapon to fight this stuff off is our vote--vote the incumbents and anyone else OUT unless you can verify they're moderates. Progressives MUST go!

This Just In: Celebrate Thanksgiving Ayn Rand Style--Thank Yourself!

2009-11-26T08:29:00.002-05:00

From Yahoo Opinion.

"Ayn Rand described Thanksgiving as "a typically American holiday" whose "essential, secular meaning is a celebration of successful production. It is a producers' holiday. The lavish meal is a symbol of the fact that abundant consumption is the result and reward of production." She was right."

...

"We recognize that individuals free to produce create enormous wealth. We uniquely dedicate ourselves to the pursuit of life, liberty, and happiness. It's no accident that Americans have a holiday called Thanksgiving – a yearly tradition when we pause to appreciate the bountiful harvest we've reaped.

What is the contemporary version of this bountiful harvest? In spite of the current state of the economy, it's our affluence. It's the cars, houses, and vacations we enjoy. It's the medicines we rely on, the movies we watch, and the safe, clean streets we live on. It's the good life, for the long haul.

How do we get this bountiful harvest? Watch any hardworking American. We create it by working hard year after year, and by wanting excellence for ourselves and our loved ones. What we don't create ourselves, we use our best judgment to trade value for value with those who have the goods and services we need, such as our bankers, hairdressers, and doctors. We alone are responsible for our wealth. We are the producers and Thanksgiving is our holiday.

So, on Thanksgiving, we should thank ourselves and the other producers who make the good life possible. Why don't we?"

This Atheist is asking too...why DON'T we?

My Thanksgiving Message

2009-11-26T08:02:00.009-05:00

I was thanked by a reader for my Thanksgiving message, and I realized I didn't write one...this begins the bah-humbug season for me.

Purposely, I didn't rerun my holiday warning messages, because I figured after running them for several years in a row, people finally got the point.

Apparently someone didn't...or maybe I'm missing the sarcasm.

Anyway, here's something new to go with the old: I'm thankful for this house, and this computer, so I can send out news and articles to help others think and make better decisions.

Now for the old:
Just in Time for Black Friday--Loss Leaders and Human Psychology
Why We Skip the Holidays Altogether
Comparing the Cost of Canned and Frozen Meats to Fresh
Holiday Dinner Rip-offs
This Thing Called Hunger Part 2: Parental Abdication
This Thing Called Hunger Part 3: Personal Abdication
2008 Post-Holiday Commentary.

This Just In: The Weak Dollar Was Supposed to Fix Everything

2009-11-25T09:15:00.002-05:00

From Prudent Bear.

"So the benefits of a crumbling currency have yet to materialize. However, the ravages of pursuing such a flawed policy have started to arrive. The price of oil has soared and gold is setting new highs every day. Credit spreads are indicating that investors are mispricing risk yet again and the ballooning trade deficit indicates that we once again believe we can consume much more than we produce."

The weak dollar was supposed to fix:

1. trade

2. national debt repayment

3. consumption (or lack of it)

4. consumer debt refinancing

5. business credit needs

Bernanke and Geithner have really gotten themselves stuck in the pickle jar THIS time! Bernanke was supposed to be "the expert" on the Depression--it seems he's expert in bringing one on, not avoiding one.

Remember the "W." We're headed for a double-dip, unless interest rates rise, which triggers a whole new slew of trouble.

This Just In: One Generation to Regeneration

2009-11-25T09:09:00.001-05:00

From Prudent Bear.

"The federal government reminds me of a fire chief who recruits firemen from among a group of arsonists to fight the blaze of the century. The "arsonist" banks have gladly seconded their chosen sons Henry Paulson, Timothy Geithner and Larry Summers (among others) to act as firemen in the service of their nation. It was these banks with their campaign contributions, jobs for the boys and coterie of lobbyists and ratings agencies that enabled either the repeal of safeguards such as the Glass-Steagall Act, or the flagrant abuse of lending policies in the belief that a rising market would conceal and overcome the unsustainable banking and business practices they pursued. To make matters worse, the Madoff Affair also revealed the depth of bureaucratic incompetence even when dealing with a one-man Ponzi Scheme despite numerous warnings from credible and qualified observers.

We are now "entertained" by bankers who either exhibit the worst of capitalism when gouging bonuses out of their companies or the best of socialism when they clamor for assistance to save the world from implosion when the banking system is threatened. Alas, no heads have rolled even to appease the plebs for a moment.

In spite of such talent, the best that Washington has been able to do is attempt to counterfeit its way out of trouble by making dirt cheap credit available to the banks so as to avoid a systemic collapse. This was fine as a stop-gap measure but unfortunately the trickle-down effect has yet to be seen. I am reminded of an old deceased friend who would say, "charity begins at home and ends at home." Businesses either do not qualify for borrowings or, if possible, are actually paying down debt. The only suckers to whom lending is continued are marginal home purchasers who are guaranteed by the FHA and subsidized by Washington.

These initiatives by way of cash-for-clunkers and tax credits for home buyers are nothing more than a jar of antacid thrown down the mouth of a rumbling volcano."

This Just In From the Tax God: Shelters Still Exist and Can Save You Money

2009-11-25T09:01:00.003-05:00

From MSN Money.

"Some people still call them loopholes. But Congress created tax shelters for economic reasons -- so using them allows you to further a legitimate national goal."

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"A tax shelter is any investment designed to reduce or avoid income taxes. This is not bad. Former Internal Revenue Service Commissioner Donald Alexander once said, "As a citizen, you have an obligation to the country's tax system, but you also have an obligation to yourself to know your rights under the law and possible tax deductions -- and to claim every one of them."

Here's my contribution for the regular Joe.

This Just In: Fed Fears a New Mortgage Crisis

2009-11-25T08:41:00.000-05:00

From Martin Weiss Research.

"It seems as though they (the Fed and pals) totally lack trust in the free market forces. Instead they desperately want to fix things by decree and money printing."

...

"The Fed is well aware of the mortgage reset schedule for the coming years. And they’re probably well aware of a major problem out there, too … a problem at least as severe as the subprime mess.

I’m talking about mortgages like Alt-A and Option-ARMs. A huge wave of resets is due to commence soon.

From the second quarter of 2010 until the fourth quarter of 2011, hundreds of billions of dollars in these mortgages will reset to much higher rates! And many of them will end up becoming delinquent."

You can thank Chris Dodd and Barney Frank for the creation of these loans!

Wanted--Iconoclasts

2009-11-24T08:43:00.003-05:00

From Prudent Bear.

"...the nexus of Washington and Wall Street has grown corrupt and its corruption has come to exert increasing costs on society as a whole. Wall Street has become excessively concentrated, trading dominated and rent-seeking, while its rewards, like those of the overblown Byzantine hierarchy, have become completely out of proportion to the increasingly impoverished lives led by the rest of the population. Goldman Sachs chairman Lloyd Blankfein claims that his organization is "doing God's work;" St. John of Damascus, the leading iconodule would doubtless have claimed the same on behalf of the Byzantine Church. In Washington, eight years in which the ideology that had been sold to the voters in 2000 was replaced with something quite different, there's a new clerisy even more enthusiastic to expand the power of government without very much regard as to whether that expansion is either cost effective or helpful to the population as a whole.

In such an atmosphere, with unemployment above 10% and rising, and U.S. living standards descending inexorably towards those of the Third World, it is not surprising that the public beyond the Washington Beltway is in an iconoclastic mood. Its iconoclasm is rational, economically speaking. The tight oligopoly of Wall Street is profiting excessively from its 2008 bailout by taxpayers, with the payments to Goldman Sachs and others on the AIG credit default swaps coming to seem increasingly misguided and possibly corrupt, given Goldman Sachs's close connection with the Treasury Secretary Hank Paulson who disbursed taxpayers' money in such an unproductive manner. AIG and Citigroup remain in business, with even AIG Financial Products, the cause of much of 2008's pain, still in operation. Fannie Mae and Freddie Mac remain dispensing their guarantees to the housing market, noticed by the media only at the end of each quarter as they tote up their losses and demand further billions of the taxpayers' money. The economically damaging subsidies to home purchase, diverting as they do scarce U.S. capital towards yet more unproductive housing, have just been extended both in time, for a further six months and in scope, to existing homeowners. The economic recovery, such as it is, appears to producing almost no jobs but only an ever-widening spiral in commodity prices, affecting the costs of everything the public consumes and eroding the value of its meager savings."

...

"An icon-smashing president is probably likely to arrive before an icon-smashing Congress, given the electoral advantages to congressional incumbency. The U.S. economy must thus probably suffer at least another three years with the icons in place. Even a sharp 2010 congressional change would probably produce only legislative gridlock, although a belated conversion to iconoclasm by the Obama administration might produce change sooner. By 2013, the case for iconoclasm will be obvious to all. The current period of low interest rates and bubble creation will have met its inevitable sticky end, and the economic costs of unproductive icons will be fully apparent. The economy will be locked in an inflationary version of 1990s Japan, in which necessary reforms have not been taken and the detritus of old problems clogs up the streams of capital formation. At the same time, the costs of health-care reform will be looming close, and the tax increases necessary to move even partially towards balancing the federal budget will be hurting both taxpayers and the economy."

This Just In: The Senate Health Care Bill and the 5 Paragraphs You MUST Read

2009-11-24T08:19:00.003-05:00

From Yahoo Opinion. This is scary reading!

"What most of us know about the Democratic bill is that it requires nearly all Americans to have health insurance. What most of us don't know is that it requires us to buy a minimum level of insurance approved by the federal government, and forces health plans and providers to share our personal health information with the federal government and other entities.

If this bill becomes law, we could each be assigned a national beneficiary ID number or card (possibly an electronic device). And our personal health information will flow electronically to the US secretary of Health and Human Services (HHS) – and many others – without our consent."

And this is just the start.

The 5 paragraphs you MUST read have to do with:

1. Mandatory insurance--"Translation: Uncle Sam will now serve as your national insurance agent and force you to buy "minimum essential coverage" – or else you'll have to pay an annual fine.

However, what Congress considers "minimum essential coverage" and "essential health benefits requirements" includes comprehensive coverage that many neither need nor want. Plus, those who prefer to carry catastrophic-only coverage won't have a free range of options for such coverage.

Bottom line: In a free society, the government should not force citizens to buy any product nor should the government mandate citizens' level of health-insurance coverage."

2. Electronic data exchanges--"Translation: Requiring everyone to buy federally sanctioned health insurance, and then forcing qualified plans to comply with Administrative Simplification requirements, provides the government and health industry with power they would not be able to exercise in a free market.

Administrative Simplification rules are a product of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. They lay the foundation for a nationally linked database of personal health information. A federal "Nationwide Health Information Network" (NHIN) is well under way in the United States, without assurances that individuals will control their personal health data.

Bottom line: Americans should be able to contract privately with the insurance companies of their choice. Patients should be able to decide whether to have electronic or paper medical records, and not have the government require electronic records, which are then included in a nationally linked database."

3. Real-time health and financial data--"Translation: Administrative Simplification rules are being expanded to gather real-time financial and health data on individuals through a tracking ID, possibly a "machine readable" ID card (electronic device).

Bottom line: Moving forward with real-time data collection without an ethical patient consent provision means everyone loses their health-privacy rights. Congress needs to enact strong patient consent provisions for all health data, especially data collected "real-time."

4. Health data network--"Translation: Your personal health information may soon be studied by government scientists. Washington is creating a new research center that plans to use patients' electronic health records for conducting research and creating disease registries. The data network is comprehensive and includes use of electronic health records.

Bottom line: Federal funds should not be used to collect data electronically and conduct research on patients' personal health information without their consent."

5. Personal health information--"Translation: Think your health privacy is protected? It's not. This language refers to "applicable confidentiality and privacy standards," but HIPAA's so-called privacy law permits individuals' personal health information to be exchanged – for many broad purposes – without patients' consent (See 45 CFR Subtitle A, Subpart E – Privacy of Individually Identifiable Health Information; section 164.502(a)(1)(ii) "Permitted uses and disclosures").

Bottom line: Trust is a must for ensuring quality healthcare. Thus, as stated above, Congress needs to pass a strong, ethical patient consent law that ensures patients have control over the flow of their personal health information."

Neither the House bill nor the Senate bill can go forward, in my opinion. They're both pieces of expensive, unnecessary, and invasive trash, and these are reasons why we should vote these mothers OUT! First, it's control in the guise of health care reform...next, it's hello, Britain and British-style society with cameras on every corner, and MI-6 in your bank account and on your phone. They even have the capability to know what you're watching on TV, cooking in your oven, and washing in the laundry.

Do we want to live like that? I thought that was why we LEFT England (besides the king)? Why would we want to bring it all back here?

I know why--political power. Obama wants to be king.

This Just In: Strong Banks, Weak Credit--Treasury Rethinks TARP

2009-11-24T08:12:00.002-05:00

From Yahoo news. They're a little late to the rethinking game!

"Of the $250 billion that the government initially set aside to spend in direct assistance to banks, it has spent $205 billion and the Treasury is already taking steps to bring that program to an end. The ledger: Banks have paid back $71 billion of the infusions. They have also paid the Treasury nearly $7 billion in dividends.

If propping up much of the teetering financial markets was the goal of the government's $700 billion Wall Street rescue, then mission accomplished.

But there were other objectives for the Troubled Asset Relief Program, too: greater lending to consumers and businesses, mitigating foreclosures and helping banks shed toxic mortgage-backed assets.

On that, it's unfinished business."

...

"Meanwhile, TARP is set to expire Dec. 31. But with about $140 billion still uncommitted (even more, about $300 billion, unspent), the Obama administration is considering extending at least a portion of the huge fund until next October."

The Day Global Warming Stood Still

2009-11-21T09:52:00.003-05:00

From Yahoo news.

"As scientists confirm the earth has not warmed at all in the past decade, others wonder how this could be and what it means for Copenhagen. Maybe Al Gore can Photoshop something before December.

It will be a very cold winter of discontent for the warm-mongers. The climate show-and-tell in Copenhagen next month will be nothing more than a meaningless carbon-emitting jaunt, unable to decide just whom to blame or how to divvy up the profitable spoils of climate change hysteria."

...

"I proudly declare 2009 as the 'Year of the Skeptic,' the year in which scientists who question the so-called global warming consensus are being heard," Inhofe said to Boxer in a Senate speech. "Until this year, any scientist, reporter or politician who dared raise even the slightest suspicion about the science behind global warming was dismissed and repeatedly mocked."

Inhofe added: "Today I have been vindicated."

Just in time for Copenhagen! Can I have my incandescent light bulbs back now?

MORE Timeless Moves You Can Make to Maximize Income and Minimize Taxes

2009-11-21T09:30:00.003-05:00

...as long as Obama doesn't mess with the tax code in a major way. So far, it looks like he'll only ADD to the ways you can minimize taxes--but the other shoe hasn't dropped yet. Article originally written in 2005, then updated in 2009.
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While this is not an exhaustive, complete array of the tax strategy possibilities, it is a small compilation of effective maneuvers available to the stay-at-home spouse, employee, or small-time entrepreneur. These are NOT limited to the 2008 tax year, but good any time (so long as Obama restrains himself, which I'm confident he will--he pays taxes too!).

The obvious:
· Have kids (God’s little tax shelters).

· Open IRAs, 401(k) Accounts, Education Savings Accounts, Health Savings Accounts, Flexible Spending Accounts, and any other savings accounts that will garner you a tax credit/deduction. Accounts in children’s names will not garner YOU a credit/deduction—only them, and against any income they may receive over a certain limit (it changes annually—check the IRS website for specific $$ information).

· Be frugal…be very frugal. Learn to live on one income, avoiding the dreaded AMT trigger and marriage penalty.

·Live in Washington, shop in Oregon—and any other advantageous arrangement such as this one. Washington State has no income tax, and Oregon has no sales tax. Other useful arrangements may include Texas/Mexico (some taxes, but still very low cost) and northern states/Canada (don’t know the details, but someone will fill me in, I’m sure). Other states with no income tax are: South Dakota, Wyoming, Tennessee, Florida, Texas, New Hampshire.

· Negotiate, negotiate, negotiate! Employment contracts, termination agreements, and lateral moves to other companies are all ways to add to your bottom line. Become a “freelancer” in your company and learn to negotiate for more $$ when you deserve it. With the new economy, we all have to become our own freelancers and negotiators—we have to sharpen our spears and fight for what we get. There’s no such thing as job security and automatic raises any more. Read Fire Your Boss and Live Rich by Stephen M. Pollan, and Negotiate This! by Herb Cohen for more in-depth information.

UPDATE: Just got fired? Negotiate for better severance.

· Learn to make close acquaintances with such tomes as How to Pay Zero Taxes 2008 (or whatever year) by Jeffrey Scheppner, or other “lower your taxes” type books. Become familiar with the next years’ tax code changes and apply them if possible. Stay abreast of the tax code and look for hidden treasure troves you can make use of. Also, please read the book Perfectly Legal by David Cay Johnston for more insights into heinous-but-useful tax loopholes. Remember: the tax code was written by LAWYERS for other lawyers and the rich—I see no reason why the rest of us can’t apply these same “new rules” to our tax plans. We have to learn to help ourselves here; they set out the buffet, and we need to grab a plate and make our selections—ever mindful of our “tax code” manners.

The not-so-obvious but perfectly legal:
· Maximizing your W-4 withholding (hint: it needs to go a lot higher than the standard “people in the family” count). For more information, see IRS site.

Take 1 deduction for every IRA, Roth IRA, Individual Health Savings Account, Flexible Spending Account, or Educational IRA you fully fund each year in addition to the standard family member count. Also, add 1 deduction for every $300 you got refunded the prior year (including any stimulus check if you get one).

UPDATE: Don't forget the Earned Income Credit--you DON'T have to have kids to qualify, but you DO have income limits:

As a general rule, eligibility guidelines for the Earned Income Tax Credit require an adjusted gross income of less than:

- $38,646 for an individual with two or more qualifying children, or $41,646 for a married couple with two or more children.

- $33,995 for an individual with one child; $36,995 for a married couple with one child.

- $12,880 for an individual with no children; $15,880 for a married couple with no children.

The maximum credit for a family with two or more children is $4,824; with one child, $2,917; with no children, $438.

People who consistently fail to claim the credit are people whose incomes are so low - below $17,000 - that they are not required to file tax returns. By not filing returns, those people fail to claim the credit, which they could receive as a refund.

Two other groups that often fail to claim the credit are people who work but don't have children and older people who are raising grandchildren. People older than age 65 are generally not eligible, but can be eligible if they are raising grandchildren.

· There are three types of income, all subject to different taxes:
ACTIVE income (wages/tips/salaries taxed at roughly 40% with all possible payroll taxes included). This is income you worked for—money paid to you by your employer.

PASSIVE income (rental real estate, loan/lease payments, commissions, etc. taxed at 20% with no payroll taxes). This is income you didn’t have to work for—paid to you by others for use of your belongings.

PORTFOLIO income (interest/dividends/capital gains taxed at 15% with no payroll taxes). This is investment income—money paid to you by the markets.

Changing your TYPE of income from wages/tips/salaries to something else (commissions, dividends and interest, real estate rental income, royalty payments, equipment rental/lease payments--can be any equipment at all—even a spare car), being a “shadow merchant” (selling things at a non-traditional place such as yard sales and flea markets), etc. Another way of maximizing income while minimizing taxes is to negotiate collecting the equivalent of your excess work pay (overtime, raises and bonuses) in things--like health benefits, temporary use of the company car/truck/van, or time off—as opposed to cash. These things cannot be taxed, and your employer will enjoy a $$ break. Labor is the #1 highest recurring business cost.

· Go into business and stay there ALONE or WITH IMMEDIATE FAMILY MEMBERS. Learn about the many ways of getting money out of your business without incurring any taxes for yourself (reimbursements to loans you made to the business, life insurance policy proceeds, KEOGHs and SEP-IRAs, spousal paychecks, checks to kids under 16 (there is a current income limit of about $3000 per year--it changes every year, so do check up--before taxes are incurred, and the checks don’t ACTUALLY have to go to the kids), ESOPs (employee stock ownership plans), etc. Read the Rich Dad, Poor Dad book Loopholes of the Rich for a clear, easy-to-understand diagram and explanation of how businesses flow, and how the money flows from them to you. Regular standard business deductions and credits also kick in, further reducing total tax burden.

UPDATE: Protest your property tax bill when real estate is in down markets--demand a reassessment based on new (lower) market values. The lower the market, the bigger your savings.

· Convert to Amish (officially join their church) and avoid paying any FICA and Medicare payments at all (they are officially exempt from these taxes) while employed by other Amish. You will still be subject to federal/state income taxes, and sales taxes.

The questionable:
· If going Amish isn’t your thing (and I suspect it isn’t), think about participating in the Underground Economy while still holding your “above ground” job. People who sell goods and services for cash without collecting sales tax (or paying income tax on that money), are part of that economy. Simple things like babysitting or holding yard sales qualifies. UE members have also been known to sell used cars (one at a time) or even diamonds (purchased cheaply from a pawn-shop, then re-set) discreetly for cash profit with no documentation, and no IRS attention (the IRS only looks at your lifestyle vs. declared income and tax filings from your legitimate job). As long as you lead a lifestyle that is commensurate with your known (reported) pay, you have a very good chance of going unnoticed and virtually doubling your income (or more) tax-free. For more information, consult the book Deep Inside the Underground Economy by Adam Cash, because there is FAR more to this than I could put here—and there are a few caveats you need to be aware of. I urge you to read the book and getting ALL the information before taking the plunge, because I will not be held responsible for any legal, moral, or ethical liabilities resulting from this activity.

UPDATE: More from the Underground Economy--you know those people who drive around collecting scrap metal and old appliances to cash in? Many of them don't declare their income, and make money tax-free. Collecting returnable glass bottles, soda/beer cans, giving blood, donating sperm or eggs, dumpster diving, or just panhandling also yields tax-free income, but the panhandling also nets you police scrutiny, because some places require permits for this.

Also--when a storm blew through here recently, many neighbors came to the aid of a nearby resident whose century-old tree fell down and blocked the road. That tree was free firewood for those people to use or sell to someone else! Now multiply that one incident by all the trees that went down in the city, and you begin to see the potential money to be made in firewood. Chances are real good that the same household that lost the tree is going to end up buying back the same tree in firewood form this winter.

Congress creates and passes the tax code, and usually Congress will make changes that enhance themselves and the rich--gotta keep those campaign donations flowing! We simply need to figure out how to decipher what the changes are, and how to apply them to our own tax burdens to benefit the most from them. It doesn’t matter what income or tax bracket you’re in…there’s always something you can take advantage of, provided you make saving a priority instead of spending. For even more benefits, you need to get off the “wages, tips, and salaries” radar—what is currently considered taxable income and scrutinized the hardest by the IRS.

The New Money-for-Life Plan

2009-11-17T09:49:00.003-05:00

From MSN Money.

"Intellectually, I knew I couldn't cash out my stocks because I might live another 35 years and I would need the higher investment returns that come from stocks," says Szu-tu, a former technology manager from Syracuse, N.Y. "But emotionally, it was really scary."

...

"He decided he would rest easier if he mentally separated his investments into two groups: cash and bonds that could sustain him through his initial years of retirement, and stock funds that he would leave untouched until they could recover and grow. Without realizing it, Szu-tu had stumbled on an alternative income model that has been kicking around in some retirement-planning sectors for more than 20 years but attracted little attention until recently."

...

"Jim Coleman, the head of Coleman Financial Advisory Group in Waterbury, Conn., has added his own twist to the income-for-life model. When describing the strategy to clients, he tells them to think of a classic risk pyramid, which puts the safest investments (such as bank accounts and money market funds) at the bottom and layers on progressively riskier investments (such as bonds and stock funds), building to a peak.

In the classic model, even if your investments are diversified, all your assets are at risk at the same time. Coleman flips the pyramid on its side so you tap the most conservative, risk-free investments at the beginning of your retirement timeline and let the riskier investments grow until the later years. Your most aggressive assets will have years -- and possibly even decades -- to grow, creating a source of stable retirement income in the future."

Your Sunday Sermon on Quickly Paying Off Your Mortgage

2009-11-15T10:34:00.006-05:00

I haven't even made my first mortgage payment (due in December), yet I find myself deluged with bi-weekly payment offers and mortgage credit life offers.

I have a cunning plan that is BETTER and FASTER than bi-weekly plans for paying off the mortgage: the Charles Givens plan (p.121).

This man has been dead for some time (prostate cancer), but his Wealth Without Risk books gave me a leg up on what to do with my money once I got out of debt and learned how to avoid future debt. These books are some 20+ years old, but the info in them is still valid today as it was then--only the numbers have changed.

Just as Clark Howard teaches us how to improve our credit limits and FICO scores in 30 days by paying as we go, and clearing our credit cards a week before they're due, Charles Given can teach us from the grave how to clear our mortgages in record time with little extra expense.

His method: when you take out a mortgage, you usually get an amortization schedule in your paperwork (now it may be available online at your bank--mine is). That amortization schedule shows what your payment is, what part of it is principal, and what part is interest. If you pay your normal mortgage payment on time, then add a second check for next month's principal, you aren't charged interest on next month's payment, because you already paid the principal!

If you are early in your mortgage, you can afford to pay more than one "future principal" payment, because they're very low. When I had my last house, I allowed a $100/month budget for "extra principal" checks, and this sometimes covered as much as 6 months' worth of extra principal in one check. When $100 was no longer sufficient, I added more money to my "budget" until I was back on track for pre-paying 6 months' worth of mortgage principal in one extra check each month.

After doing this for about 4 years, my 30-year mortgage became a 9-year mortgage--had I kept the house, it would've been paid off in 5 more years. Alas, the navy was calling us to Virginia from Texas, so we sold and came here.

I plan to deploy this method again for the current house, and wish I had the heart to tell these bi-weekly mortgage people I had a better plan. :)

You're probably already familiar with paying ONE extra principal payment at a time, but here's how you can snowball it when principal prices are low--when prices become equal to or exceed your "extra check budget", the you can slow down to one extra month's principal each month. You can even round the figure up to the next nearest $100---I did when my principal finally exceeded my "budget."

My current mortgage is so low, I won't be able to write off interest beyond this year and possibly next, so the least I could do is clear this debt with all due speed. I can't play the "interest arbitrage" game like rich people with expensive mansions do--they perpetually refinance the house (depending on interest rates) to keep interest flowing to the bank, then write it off at the end of the year. Basically, the house pays them back, providing the mortgage is of sufficient size (currently around $225k and up).

Sometimes they use a 30-year mortgage (when rates are low and rising), then switch to an ARM when rates are high and falling, and back and forth, never really intending to pay OFF the mortgage. It's more valuable to them as a tax write-off than an asset.

Our current housing crash (beyond the Wall St. derivative and sub-prime financing stuff, straight to the Joe Six-Pack stuff) was based on this method, only something went awry: people were cashing out their equity. Rich people weren't doing this part--they didn't have to! Ordinary people also didn't recognize that cashed-out equity was also taxable as income--this is another reason why rich people didn't do it.

Let us now bow our heads and pray to the Almighty Amortization Schedule. Say it with me now--"I'll pay!" Please put your extra principal payments in the collection plate as it comes to you. :)

"I Blame EVERYONE For the Credit Card Fiasco"

2009-11-10T07:43:00.003-05:00

From Martin Weiss Research.

"Sure, the companies are motivated by self-interested greed. But isn’t that the same motivation that led to all of our country’s irresponsible borrowing, too?"

I've been so good with my recent spending spree that my credit union has doubled my credit limit in about a month. While my other card has cut me in half for no good reason (other than to call back its unused credit line), this one seems eager to throw me credit!

My secret, or actually Clark Howard's secret: pay as you go. I clear the card well before the charges are due, so no possible interest can be added to the bill. Every time I've sent them a payment (electronically, so they can get it the next day), they've increased my limit. Not only is this expanding my credit limit, but I'm increasing my FICO to boot.

I fully expect that by the time I run out of spendable money (in the "house" account), the credit union will be sending a sedan chair to my driveway next time I need to go see them. :)

Avoid Foreclosure--Rent Your Own Home

2009-11-07T08:53:00.005-05:00

From CNN Money.

This may sound like a cure-all, but believe me, it isn't.

"Fannie Mae implements deed-for-lease program that allows troubled borrowers who don't qualify for loan modifications to stay in their homes."

And when the market comes back, and it WILL come back, who gets the equity? Not only that, what's to prevent the government from selling your house right out from under you--to say, Goldman-Sachs or Citibank, making THEM your new landlord?

Also, what's to prevent them from kicking you out (or relocating you) in favor of a more fiscally-responsible renter or a Section 8 tenant? Or worse--what if they install one of these "smart meters" and get control of your electricity, and your thermostat, essentially forcing you to live like a Third Worlder in "your own" home?

This is one of the myriad ways government is looking to cash in on YOUR efforts. Your future potential home equity, combined with other schemes, will help pay for future government spending Since they can no longer borrow from China, and can no longer borrow enough from other countries, they gotta get it from SOMEWHERE. They know they can't tax it out of us...that would be like killing the goose that laid the golden egg (of votes).

UPDATE: After further surfing, I found the reason for this program.

3 Ways to Save on Health Care Insurance

2009-11-04T08:54:00.001-05:00

From CNN Money.

1. Choose the right plan

2. Fund your FSA

3. Test your wellness

These 5 Health Care Culprits Cost $1 Trillion

2009-11-03T06:30:00.004-05:00

From CNN Money.

In David Letterman order:

#5--Pollution

#4--Smoking

#3--Alcohol

#2--Sugar (Personally, I'd lump in alcohol with sugar, since they are basically one in the same)

#1--Salt

And we expect the government to make these things go away with the wave of ill-conceived legislation, also known as the public option? Well, pollution they have done away with largely, but the rest they can only manage to erect onerous barricades to them through high taxes (alcohol, cigarettes) or high trade tariffs (sugar), or instill a totally inadequate level for the term "low sodium" (140 mg. or less).

It's GOVERNMENT--what else can we expect? This is why YOU need to become your own primary care provider--only YOU can adequately control the sugar, salt, alcohol, and smoking intake, while avoiding some kinds of pollution the government can't seem to control (pesticides, BPA, mercury, your water supply, etc.). Thew public option isn't going to do any of this for you--it will only provide you with the drugs to SEEM like everything's okay.

Remodeling is a Waste of Money

2009-11-02T10:08:00.001-05:00

From MSN Money.

"One of the big myths of homeownership is that upgrades are investments. In reality, renovating is consumption spending. But if you want to remodel anyway, do it right."

Read my article on The Tragedy of House Bling.

FSAs Take Hit in Health Care Overhaul

2009-11-02T09:48:00.002-05:00

From Yahoo Health. So much for using them as a fallback against Obamacare!

"Those tax-free spending accounts that you and your co-workers use to help pay for dental work, insurance copayments or over-the-counter drugs face a hit under the health overhaul bills in Congress — unless a coalition that includes a powerful union, insurers and others can stop it.

Bills in the House and Senate would cap at $2,500 an employee's allowable annual contribution to a health care flexible spending account."

...

"Our concern is that a cap of $2,500 is a definite tax on the middle class, particularly those with chronic illnesses," said Jody Dietel, executive director of Save Flexible Spending Plans and chief compliance officer at WageWorks, Inc. of San Mateo, Calif.

Advocates say the typical flexible spending account user makes $55,000 annually.

Although some lawmakers are sympathetic, the opposition appears unlikely to succeed in getting the flexible spending account cap out of Congress' health care bill. Unlike the initial Senate proposal, though, House members want to allow the cap to be adjusted so it would rise along with inflation. That would be a welcome improvement for advocates.

Aides to the Senate Finance Committee, which proposed the cap, defend it by saying it would help curb overuse of medical care. Money deposited in the tax-free accounts must be used within 2 1/2 months of the end of the plan year. That may create an incentive for people to spend all the money even if they don't have pressing needs."

But it's OUR money, and we already HAVE a timeframe in which to spend it--FSA money DOES NOT roll over from year to year like the HSAs do.

12 Healthful Foods for $1 or Less

2009-10-28T06:33:00.001-04:00

From MSN Money. The same lady that brought us the "Dollar Store Diet" of foods costing $1 or less now has a healthier budget selection without the earth-shattering amounts of sodium, sugar, and reliance on Chinese imports with less-than-rigorous food safety standards.