Building Wealth - Cutting Costs

Super Tuesday is today and I am excited about one thing and only one thing about it.  You see I am in  state that votes AFTER Super Tuesday in fact we don’t do our primary until March.  In general no one cares how we vote in the primaries because by March most nominations are sewn up.

Not this year!  I will vote in the Republican primary and my vote will matter and so will the votes of others in my state.  My guy is Ron Paul and I will stick by him if he has any chance at all by the time we vote, if not I may have to go with Mitt Romney or Mike Huckabee as my second pick.  I have not forgotten the sell outs of John McCain on things like McCain - Feingold and McCain - Kennedy I hope my fellow Republicans don’t either.

Yet this post is not about who I am voting for or who you vote for just I want to ask, why is it only in a year like this that my primary election matters?  Do you think the primary elections would be better if we had say 4 blocks, 25% of the country in each one and all of it done in 60 days?

I do and further more I would rotate each election which “block” went first.  Seems like a much better way to me, what do you think.

Today I installed the contact form plugin for the WordPress blog platform. This is a great plugin that I recommend for anyone using WordPress; any way in just a few moments after adding my contact page, I got my first question. Here it is along with my answer,

“CostCutter, I have seen you do two posts recently stating how great low interest rates are and how anyone looking to refinance or buy is really lucky that rates are so low. I have also seen a lot of people on the T.V. saying that these rate cuts are actually bad. So which is it and why do these guys say low rates are so bad and you say they are so good.”

That is a great question but it assumes that I disagree with the folks saying these rate cuts are bad, actually I agree with them. My posts about low interest rates from today and the coming interest rate cut yesterday do seem to be positive on the rate cuts and they are but only on one dimension. What I am saying is if you need to refinance are are looking to buy a home then the low rates are very good for you as an individual. Therefore you should take advantage of them.

On the other side I actually think that long term these artificial rate cuts are just bad news for the economy. The reality is we have real problems in this nation that sooner or later have to come out. Things like rate cuts and tax cuts with no corresponding spending cuts only delay the eventual recession and every time we delay it we are just making the eventual market correction worse. No one in the government believes they can stop the recession, they just want to soften the landing but my belief and the belief of most economists is they are actually going to make it a much harder landing.

What you have to understand is why cutting interest rates “works” in the first place. The US economy is driven by spending, when spending slows then everything goes down. There are less jobs, less money in the system, less everything. When interest rates are low spending increases because it costs less money to borrow money so you can buy a bigger house, a bigger car, get a better rate on your credit card etc. These cuts cuts in “the prime rate” or how much the government charges your bank to borrow money. The bank of course is not in business for fun they add to the rate and loan money to you so lower prime rate equals lower rates for everyone and in theory more spending.

The problem is this theory only works long term if people are responsible with debt and it won’t help people who are already in the hole. If you are four payments behind on your home you can’t get a refinance loan no matter how low rates go. If you are paying 29% on your credit card your credit sucks and no one is going to give you a low interest one. Our country is in trouble because to many people spent money they can’t pay back and our government has done the same. When we artificially cut rates we simply put more people into more debt. In other words the country goes deeper into the hole and when at some point we are required to crawl out it will be more not less painful.

If this explanation seems oversimplified it isn’t.   In fact I will make it more simple. If your family is in debt and about to go broke and you take your debt of say 200,000 dollars and refinance it to a lower interest rate to reduce your payments it makes the situation better at first. If however, you then grow your debt back to the original payments you could not make then you are in more not less trouble. When our government puts out these low rates and increases personal and business debt in an economy where people are already in the hole it is the same exact thing.

In short I am glad for the responsible consumer that rates are low, I certainly did not want rates risen to higher levels but the reason behind this cut is nothing but a delay that is going to make what is bad already, worse.

Yes you read that right it is unconstitutional and in fact no one in the government can or will show you a law that says you have to pay it. Today I would like you to take just fifteen minutes of your life to review the video below. It is from a documentary called “From Freedom to Fascism”. Don’t go thinking this is some alarmist, tin foil hat wearing tripe. In fact I will send anyone a fifty dollar bill that can prove one thing stated in this video that isn’t true.

No one is saying you don’t have to pay income tax, this isn’t one of those scams it is simply telling you some facts about taxation, the new national ID card, how much power the government has and some other frightening truths. If you are a republican and tired of “Bush bashing” don’t sweat it when you start hearing about George Bush, just wait a few more seconds and you will hear the same things about Bill Clinton as well. After you watch the video I would love to hear your comments about it.

I recently listened to the audio book version of Where Have all the Leaders Gone by Lee Iacocca. The book was pretty good and quite insightful and while Lee has quite a few views I think are bad ideas (raising the gas tax for one) he also has a lot of good ones. The biggest point was that we need more people to pay attention to the political process specifically the younger voters.

In the book he went through all the front runners and left Ron Paul out, not sure when he had written the book I let that go. Yet in the book he talks about setting up a website for the 2008 election where people can rank the canditates on his “9 C’s of Leadership”. In December with very little plubicity that site was launched. You can find it here, http://www.iacocca.com

While I was able to let go of the Ron Paul omission in the book the fact that he now basicly owns the internet for the 2008 race makes his exclusion from the listed candidates unacceptable. To be fair Ron is not really excluded you can and should rank him, he is just hidden from the initial view.

And just who is listed on the main score card!

Joe Biden - Dropped out

Bill Richardson - Dropped out

All the rest included I can’t argue with their inclusion, nor do it it is only Ron Paul’s exclusion while Biden and Richardson are included that tweaks me.

There is a solution though, if you want to make sure Ron is ranked to this,

1. Go to Iaccoca’s Rate the Candidates Site and set up a free account.

2. Click the confirmation email and log in.

3. Click on rate the canditates and while you are doing it in the left margin you will see a link that says, “score more candidates” click that and about a dozen more will show up. Then one from the very bottom you will find Ron. Rank him and any others you wish.

To me Ron is a much a candidate as anyone right now, 10% in Iowa, 8% in New Hampshire and massive support online. It is clear to me that Iacocca must have something against Ron Paul as there is no good reason to exclude him from what is a pretty cool Web 2.0 website while including Biden and Richardson both who are not even in the race!

Now the irony, while there click on “view aggregated score card” and guess who is number one anyway? Ron Paul and who is number two, Alan Keyes who I also think is an outstanding leader! Will such exclusion never end. Anyway I would ask you to consider getting an account at Lee’s site and ranking Paul and the other candidates because the idea is an excellent one.

One more suggestion. There is a link on the score card page to request inclusion of candidates. Please send a NICE but firm message to Iacocca asking that Ron be included based on his campaign and good finishes in Iowa and New Hampshire and pointing out that two candidates they currently display in the default have dropped out may not hurt either.

I am going to be brief on this post and just tell you how I feel and what I think about it along with what the Constitution and its authors actually said.

First you have to understand what the “Bill of Rights” is all about. Many of the authors of the Constitution did not want a “Bill of Rights” as they were afraid any right not included might be infringed upon.   Believing that such a list could become justification for future restriction upon right. As in “it isn’t in the Constitution so it isn’t protected”.   You see you and I are not granted rights by the Constitution, no it simply protects what is seen as a “God given right” to all humans including those around the world, not just Americans.   Such is the nature of being a “shining light on the hill”.

In other words our founders believed all men had the right to arms and did not grant anything, they only sought to preserve that right from tyranny.   Next I am tired of the crap about how the 2nd Amendment applies to the “national guard” or other such nonsense.   While the “militia” is mentioned in the Amendment the “right” is bestowed upon “the people”.   No one doubts what the clear words of “the people” means in the other amendments so why would we doubt it as it is used yet again in the second Amendment.

Further one of the very authors of the Constitution, George Mason stated, “”I ask, sir, what is the militia? It is the whole people, except for a few public officials.”   Yes the only people the founders did not see as protected by this amendment were “a few public officials” in other words the government is excluded in favor of “the people”.   Understand in this Republic we are not “granted rights” or even “granted privilege” by the government, we grant privilege and power to the government at will and at will we are empowered to remove it.   Sound like “revolutionary language”, hell it should the authors were all revolutionaries and considered traitors by the British because they sought and were willing to die for liberty.

My point is you and every other American has an absolute right to keep and bare arms and more I believe the founders saw it as a civic duty to do so.   Think about how you were told in school you should vote simply because you are fortunate to have that right protected and due to that fact you should vote in order to protect that right.   Well, how is gun ownership different?   If you don’t own a gun the thought of someone taking guns away may not bother you.   Go buy one, get trained on it, be safe and understand the empowerment of not waiting 10-30 minutes while your home is being invaded and the lives of your loved ones is in jeopardy.   Do that and then think about a law taking that gun away from you. It will change the equation.

So do I think everyone should be able to own a gun?   Not exactly I think that anyone who has not taken an action to warrant giving up that right should retain it. Just like jail, you have a right to freedom, steal from someone, violate their right and you loose your right and go to jail.   So prohibiting felons, the criminally insane and clearly nuts individuals from getting guns makes sense.   Anyone else should be permitted to quickly establish their identity and buy any gun of their choosing.

I also believe it is your civic duty as a healthy adult American to own a gun of some type.   If you have no experience first take a course and learn safety and proper use. Then spend time once in a while at the range and know how to use your gun effectively.   The more of us that do that, the harder to take away our right it will be for our government. Further let me ask you what would happen to our crime rates if say 80% of home owners had guns, knew how to use them and were willing to do so?

I am a big believer in concealed carry too but that is another post.   So what does this all have to do with building wealth, cutting costs, etc. It has everything to do with it. Proper planning involves “protecting your assets” and let me ask what greater assets you have then,

• Your Home
• Your Family
• Your Health
• Your Possessions

It is a sad state that there are vermin that will take these things away from good people but there are many such scum in our world.   In your home a gun in the hand of a properly trained adult can protect those things. Either that or dial 911 and wait!   That option isn’t good enough for me, I worked hard for what we have, I love my wife, I love my son and anyone that threatens them by entering my home unwanted has a very good chance of leaving in a horizontal position.   I make no apologies for that and neither should you.

I just thought it was a good time to point some of these things out.   I am amazed how many people think we are “granted rights by our constitution” or by the government.   No one is “granted” a right, a right by its’ very nature is inherited and should not ever be taken away from any man unless he violates the rights of others.

Just remember the law that a right left unused is often lost doesn’t just apply to voting.

OK the other day I made a series of predictions on the New Hampshire primary in my what are you doing in 2008 post. Some I got right, some I got very wrong. Lets review….

Republican side

1. Rudy does awful and everyone says it doesn’t matter. - Got it dead on!

2. John McCain wins and his national numbers rock because people are lemmings. - Got it dead on!

3. Mitt Romney does OK and comes in second and they say it is over for him. - Got it sort of, Romney did come in 2nd but the media has held off saying his campaign is over. - Where I went wrong, the republican base stayed with Romney in New Hampshire and only a 4 to 1 break for McCain in independents that voted republican gave McCain the victory. I am not sorry about being wrong here, Romney to me is a much better choice then McCain.

4. Ron Paul does far better then the 8% the polls say he can expect. Comes in third and gets ignored again. - I was wrong he got almost exactly 8% which still put him right in the mix with the other candidates but he did not do as well as I predicted. He did however, largely get ignored by everyone but Fox News. Why? Backlash for the debate the excluded Ron from! Where did I go wrong? I gave the concept of freedom in the minds of New Hampshire voters to much credit. Honestly this concerns me for our nation.

There were really 6 predictions there I got 4 of 6. Not all that bad and I don’t pretend to understand New Hampshire primary voters.

On the Democrat Side

1. Barock wins by 10% - Wrong and the rest of my predictions hinged upon this. Barock lost, I was wrong.

2. Hillary gets slammed and the media runs to her defense. - Wrong, clearly missing number one blew this for me. This is another place I am happy to be wrong. I don’t want Hillary but I think she is easier to be for any republican and her economics while disastrous for the U.S. economy are still better then Obama’s.

3. Edwards does ok in 3rd but the media talks about how that is “hope for his campaign” even though there are only four Democrats in the race. Idiots. - Got it spot on but this was no real big prediction.

4. Bill Richardson gets a clue and drops out. - Another easy one and Bill is “making an announcement at a press conference today”, wanna guess what he is going to be saying.

So how did I blow it so bad expecting Obama to slam Hillary? I commited a cardinal sin and believed the polls with out knowing more about the landscape of democrats and democrat voting independents in New Hampshire. I must admit I am not strong when it comes to understanding how liberals think, like Michael Savage I believe, “liberalism is a mental disorder”.

Well South Carolina is the next place everyone will really be looking at. On the Democrats I am not ready to pick a winner but I do think it is do or die for Edwards. On the republican side look for a shoot out between Mike Hukabee and Fred Thompson. I will make some predictions and go on the line with them in another few days.

Don’t worry this isn’t one of my “get your financial butt in line” posts, well mostly not. I am just wondering what everyone is up to in general, like what you are watching on TV, etc. Personally I have been enjoying Celebrity Apprentice quite a bit. Check out this video showing what a snake that Omarosa is. Got to be one of the biggest sleezes known to man in my book. To me this is why so many people are looking to build a business of their own, to buy a business or just to find some way to be independently employed. I mean who really wants to deal with a corporate environment that has far more then its’ fare share of Omarosas.

I have also started out on a diet. Last year I elected to not go Elk hunting because honestly I was afraid I might die somewhere alone on the mountain. The last time I went I had a great but tough time. I came home with blistered and even bloody feet and was sore for a week. Back then old CostCutter was in much better shape. This year going out into the unforgiving wilderness alone seemed like a big risk. Since I am way to young to give up that type of life I am getting back in shape. Who knows, perhaps when I loose my weight I will come clean and say who I am.

Additionally I am breathing some new life into a few of my businesses with some creative ideas and looking to hire a few new creative and talented people. The search for talent is really tough right now, I just listened to this podcast on the shortage of talent in the market today and I have to really agree with the guest speaker. While real estate investing today seems to be a buyers market there is no question that in the talented and skilled employee market it is a sellers market. If you are good, have a proven track record and can deliver then today you call the shots. If you are in the market for a new position and are not finding a lot of opportunities I recommend you get in touch with a good executive recruiting firm.

On another note all together I really think the 2008 presidential race is off to an interesting spin. Ron Paul still seems to be shunned by the media despite basicly finishing in a three way tie with 10% of the vote while Rudy was at only 4%. Typical!

Today we focus on New Hampshire, I predict the following for the republicans.

1. Rudy does aweful and everyone says it doesn’t matter.

2. John McCain wins and his national numbers rock because people are lemmings.

3. Mitt Romney does OK and comes in second and they say it is over for him.

4. Ron Paul does far better then the 8% the polls say he can expect. Comes in third and gets ignored again.

Such is the stupidity of our media and the political process.

Moving on the the Democrats - Hillary has had a break down practically coming to tears because she was asked how her day was mostly because Barock Obama is now surging in New Hampshire and she is on track to loose again. Of course the news is making a huge deal of Barock’s massive support. His followers indeed love him, they laud his speeches and vision yet the news people can’t seem to find a single supporter that actually knows his position on any of the big issues. America, please wake up, support who you want but for the love of God know why you support them.

My personal view I think Hillary is a disaster for this country as our President, her health care plan, tax hikes and some other policies will only serve to make worse a recession that is flat out coming to hit us hard over the next few years.   That said Barock is worse, he want to tax more, spend more and make government even bigger and more intrusive then Hillary.  However he can speak very well, avoids the issues and is very likable.  This is why Hillary is in trouble, even her supporters realize Barock is going to be harder for any Republican to beat and are picking the best candidate to win in November.

I personally think Hillary is unelectable and if she looses the primary (which I predict) Barock is probably a 2 to 1 favorite just in odds to win the presidency.  In other words a Hillary loss in the primaries is bad for the republicans while her victory would be very good indeed for them.

My predictions for the Democrats in New Hampshire are as follows.

1. Barock wins by at least 10% of the vote and we hear all the liberal papers cheer how it is finally time, “for an African American president”. When the country has been “ready” for a long time and we are all really tired of being called racists in subversive ways by the communists running our press.

2. Hillary gets slammed, perhaps even damn near ties with Edwards. This is spun as the “end of Hillary by the right” and some how a “right wing conspiracy” or “anti women” thing by the left. The left leaning media will hold out all hope for Hillary and talk about how New Hampshire and Iowa “don’t really matter”. Of course they really don’t it is just that the media just spent the last 30 days convincing us how much they do indeed matter.

3. Edwards does ok in 3rd but the media talks about how that is “hope for his campaign” even though there are only four Democrats in the race. Idiots.

4. Bill Richards gets a clue and drops out.

So what are you up to in 2008? What do you think of our coming elections?