History Doesn’t Repeat, But Sometimes It Rhymes


boatdock2I had a long car trip, so I did as I frequently do on long trips and rented a book on CD from Cracker Barrel.  They have a system where you can rent at one location, then return the book to any location along the way.  I picture CDs crossing the country a little at a time.  Actually, since some of the books are 12 hours long or more, maybe they move rather rapidly.

This time I rented Playing with Fire, which turned out to be historical fiction about a Jewish family living in Italy who were sent to the death camps in Poland.  One brother, who played the violin, ended up being pressed into service playing in a small orchestra at a death camp in Northern Italy. The Commandant had the group play music all day long to drown out the noise from the executions and the screams coming from the crematorium from those who were not quite dead before being thrown into the ovens.  In the end, the members of the orchestra were killed and fed to the ovens as well before the Nazis fled to avoid capture.

While the characters were fictional, the book portrays real events that happened in Italy during 1942-1947.  Italy saw about 20% of the population of Jews killed during WW II.  In Germany and Poland, it was about 90%.  Of course everyone has heard about the horrors of that time and calling someone a Nazi is just about the worst thing you could call them.  And yet we fail to learn the lessons.

This has happened other times, although perhaps to different degrees.  In Russia, millions were killed by Stalin and other Soviet leaders after the violent Bolshevik revolution.  In Cambodia, the educated and literate were marched into the jungles and slaughtered.  I have no doubt that Hugo Chavez killed many of the farmers who refused to give up their land in Venezuela during the more recent take-over.  In all of these cases, while the Right is usually blamed for fascism, this was done by Socialists (note, the Nazis were the Socialist party in Germany).  Socialists who employ envy as a means to bring them to power and justify their actions.  Indeed, in Vietnam and North Korea the same thing has been done, although many times starvation has been used as the means of execution rather than a bullet or club.

Often when these events happen, people wonder how decent people could stand by and allow such brutality to happen.  And yet we see the stirrings of exactly the same thing in the United States today as we saw in Germany.  The speakers may be different, but the themes from Sanders, Warren, and others are the same.  In Germany Hitler vilified the Jews and convinced the population that they were the source of their problems.  Because the Jewish people have a culture of forming businesses and serving others, many of the shop owners, bankers, and business owners were Jewish.  They were also prominent as professors, engineers, and lawyers.  Because the Jews “controlled the means of production,” to borrow a phrase from Karl Marx, the Nazis were able to convince many of the other German citizens that their lives were miserable because the Jews were oppressing them, and that they should therefore take from the Jews and eventually kill them.  Hitler used envy to stir the population and turn them against their Jewish neighbors.  This envy turned to violence, as seen by the formation of the black shirts who would go and victimize the Jews even before the Nazis started marching them to the gas chambers.

Today we hear Bernie Sanders stoking the same envy when he talks about rich Wall Street bankers being the source of the troubles of the middle and lower class.  We also see race baiting by the President and others, causing blacks to turn against the police and whites in general.  Often envy turns to hate and violence.  We are also starting to see violence, including the execution of policemen, attacks on people at Donald Trump rallies, and riots in the street.    While some would have you believe these are just spontaneous protests and riots, these are actually planned events being lead by Socialists and anarchist groups who want to bring down the fabric of civil society and replace it with fascism and a culture in which the strong victimize the weak.  We could very well see another holocaust in the US, this time the target being Christians, whites, conservatives, or producers and business owners in general.

Even many of the “non-violent” protests show force being used by the Left as a tool to gain their goal.  While activities like blocking the road or breaking into a building may not be violent, they are using force to take things away from others, even it is their time.  No doubt these types of actions will lead to violence as tempers flare.

It is time for people to see this manipulation of people using envy for what it really is.  Envy goes beyond wanting what someone else has.  It is a belief that they should not have whatever it is, and it (and they) should therefore be destroyed.  It leads to the gas chambers in Poland and the killing fields in Cambodia.  It leads to unspeakable acts to which normally caring people turn a blind-eye.

Socialism is fundamentally evil.  It is founded upon the fundamentally evil idea that it is right to take what is not earned from another.  Evil only leads to pain and misery.  We have a unique capability in America to pull ourselves up by spending our time tending to the needs of others through our work and making fair trades for goods and services.  We need to choose another path than envy.

We need to call out this evil for what it is.  We need to talk about what has happened other times people who have turned neighbor against neighbor using envy have been allowed to rise to power.  We need to talk about our common humanity.   We need to show that people do not become wealthy in the US by victimizing others, but by serving them.  This path is open to all and leads to wealth and happiness.  I already see the black shirts coming out of the shadows to lay their abuse on others.  Are we going to turn away?

Got an investing question? Please send it to vtsioriginal@yahoo.com or leave in a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

What do you think?  Please leave a comment?

Contact me at vtsioriginal@yahoo.com

Follow on Twitter to get news about new articles. @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

A Simple Way to Invest in your IRA


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Before the 401k, there was the IRA.  The simple investment account that anyone who had earned income could use to save for retirement.  For many years contributions to IRAs were held at a paltry $2000, but about a decade ago they were raised to $5500 per year .  Put away $5500 for both yourself and your spouse into IRAs each year and you really start saving up a serious amount for retirement.

One good thing about IRAs is that they let you invest in virtually anything.  One issue, however, is that they let you invest in virtually anything.  For many people who really don’t understand investing this can be a serious issue.  They just don’t know how to invest the money, so they do something foolish like:

1) Leave it in a money market fund so they lose money to inflation each year.

2) Invest in a set of high cost mutual funds recommended by their broker.

3) Put it all into a single stock, leaving open the chance that they can lose it all.

4) Trade in and out of different stocks, racking up a lot of commissions for their brokers but making little money themselves.

For those who don’t want to fool around much with investing, here is a really simple strategy for investing in your IRA:

  1. If you are younger than 45, put half of your money into a large cap index fund such as an S&P500 ETF and half of your money into a small cap index fund such as the Vanguard Small Cap ETF.
  2. If you are between 45 and 55, shift 30% of your money into a bond/income fund, the leave 35% of your money in the large cap fund and 35% in the small cap fund.
  3. If you are between 55 and 60, put 50% of your money in a bond/income fund and split the other 50% between a large cap and a small cap ETF.
  4. Assuming you’re retiring at age 65, between age 60 and 65 start to sell off some of your assets to raise cash.  Figure out how much cash you’ll need from your IRA  each year in retirement and raise that much cash each year, placing it in a CD set to mature just before you’ll need the money.  If you’ll have another source of income and won’t need to tap into your IRA just yet, just stay fully invested in the half bond/half stock portfolio.

So there you have it – real simple but really effective.  This strategy keeps your fees low, gives you plenty of diversification, has you take more risk when you’re young and can afford to wait for the market to recover, and starts to get more conservative when you start to near retirement.  The only trick now is to stick to it and not let your emotions get the best of you.  The worst thing you can do is let your emotions drive you into making a mistake.

Your investing questions are wanted. Please leave them in a comment.

Follow on Twitter to get news about new articles. @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

 

A Financial Checklist for your New Job


 

Coffee moneyCongratulations on the new job, and welcome to the workforce.  As you meet your coworkers and find your way around the office, there are some things you should consider to put you on the right financial path.  Here is your financial checklist:

  1.  Sign up for the 401k plan.  Your company probably doesn’t have a pension plan, where the company would agree to pay you a certain income when you retire if you contribute a certain amount of your paycheck to the pension plan.  Instead it probably has a 401k plan where it allows you to put some money into a retirement account and then matches your contributions up to a certain limit.  For example, with many companies if you contribute 5% of your paycheck, they’ll match it, meaning that 10% of your pay will go into your retirement account.  While it may seem better to have a pension plan where you’re guaranteed a certain income, you can actually do much better with a 401k provided you follow two simple rules:  1)Get in early and 2) don’t touch it until retirement.  So get in now, putting away at least enough to get the full company match – otherwise you’ll be leaving money on the table.  Even better, put away 15% of your paycheck before you get used to having more spending money.  It is harder to increase your contributions later than it is to start with less now.  You can always cut back later if you wish.
  2. Open a bank account and save up $10,000.  Before you go buy a new car and get the cable TV hooked up, concentrate on putting money away until you have at least $10,000 in cash.  This is what is known as an emergency fund.  this is the cash you’ll use for a few months to eat and pay your rent if you lose your job. It is also what you’ll use when the car breaks down and you need to make an emergency repair, or you get an appendicitis and need $5,000 to pay your deductible for the year.  Once you have the money saved up, guard it religiously, only using it for emergencies (and a vacation is not an emergency) and replenishing it quickly if you ever need to dip into it.
  3. Get term life insurance.  If you’re married or otherwise have someone depending on your income, sign up for term life insurance to protect them should something happen to you.  If you are in your late twenties or early thirties, you can get a half million dollars in term insurance for 15-20 years for maybe $250 per year or less.  Then, as long as you keep paying that premium each year, your family will be protected.  Be sure to get at least ten times your yearly salary in term insurance – that will be enough to replace your income should something happen.  If you have someone at home raising the children, get at least $500,000 in insurance to cover him or her as well since you’ll need to hire a nanny should something happen to them to allow you to continue to work.  Note that you can often get term insurance through work as well, but get at least some on your own so you don’t lose your insurance if you lose your job.
  4. Get a plan to pay off those student loans.  See if you can pay off those student loans within a few years after you start working full-time, before you buy a house.  If you keep living like a student for a few more years, you should be able to pay off even tens of thousands of dollars in loans per year.  If you make $60,000, live on $30,000 and put the rest towards your loans.  If there are two of you, live on the income of one and then put the other’s income towards loans until they’re gone.
  5. Start saving up that house payment.  Once you’ve paid off the loans, keep going for a couple of more years.  If you can get $30,000 to $40,000 saved, you can put 20% down on a home and avoid paying for mortgage insurance.  That is money in your pocket.  You will also be able to pay off the home faster and pay less in interest if you make a big down-payment.  The 100% down plan is best.  If you can’t wait that long, at least put 20% down.

Please contact me via vtsioriginal@yahoo.com or leave a comment.

Follow me on Twitter to get news about new articles and find out what I’m investing in.  @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.