[quote author=allagash link=topic=36950.msg180830#msg180830 date=1217450335]
By all means go with this guy though: http://www.youtube.com/watch?v=mgF39TRCPPE
LOL!!!
You have made the fatal mistake of assuming I’m voting for McCain…which I am NOT!
Secondly, why is the government’s responsiblity to care for you when you are elderly??? Because you deserve it???
Contribute to a 401k plan or start an IRA and save!!! Our negative savings rate is a result of the “I deserve it and I want it” attitude, not the “I worked hard for it” attitude.
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To be honest, the people who actually deserve SS and/or medicare are the people (babyboomers) who have been paying into it since it began. It was never meant soley for retirement. That was also back in the days where employees had a pension for life after they retired from a company. They didn’t have to contribute anything but their hard work. Then they cancelled the pension and and said, " Hey, here’s a smart plan where you contribute the bulk of your retirement savings." The problem with that is instead of a steady pension for life. The responsibility was transferred to people who have no investing savvy. So they’re forced to hand their money over to a person who says,“Diversify and invest for the long term.” Nobody says anything about what to do if the market crashes and your retirement savings loses a ton of money as you near retirement. When the rules changed, people needed to invest in their financial education so they would’nt have to depend on someone else for investment advice. I believe Warren Buffett said that “Diversification is insurance for ignorance.” or something like that. The problem is that people are unaware of this need for education or they’re too lazy to get the education they need. One last point to this rant. The SS & Medicare programs were never meant to finance the high cost of healthcare (nursing home, hospital stay etc.) O.K. I’m done for now. :biggrin
We need less government in our lives, not more. Obama certainly and McCain to extent will continue to expand government. Don’t come on here stating you are investor in real estate giddy about the propsect of an Obama presidency. Capital gains tax increases alone should have you running the other way. If you want to make half as much profit after resale that you used to then by all means vote for Obama. But don’t call yourself an investor in the same sentence.
I’m not sure if that reply was to me, but my definition of an investor is someone who invests. It’s an action, and really quite separate from a person’s ideas on what is correct policy for a society. By your (implied) definition, a criteria to be an investor is someone who sees political advantage as a means to further their own personal bottom line, and I disagree with that.
However, everything else you said is spot on in my opinion. I voted, campaigned for, and donated to Ron Paul in the primary race, but he lost. So, what do I do? In this race, I pick the guy who I think will screw this country up LEAST, even if I don’t support all of his policies. I’ll pay attention more to my local politics, and try to get Libertarian minded officials elected in my precinct, county, and state governments. Hopefully if everyone does the same, in 12-15 years we can really challenge the two party system, and be in a position to seize back state control, and limit government the way it was intended.
Brokovich, If your comment was toward me, than perhaps you should look at my post again. I did’nt mention ANYTHING about Obama,MCain or large govt. For the record, I’m for “none of the above”. I just think the people who have ACTUALLY paid into the SS & Medicare system for their ENTIRE working years may not be able to have access to the very programs the helped fund. Many of these people didn’t save in their 401k because it didn’t exist until it was too late for them to do anything. Besides, they had a pension… at least they thought… The largest point of my post was about taking control of your own financial well being.
Electile Dysfunction : the inability to become aroused over any of the choices for President put forth by either party in the 2008 election year.
I couldn’t resist ;D
My post was not directed at any one individual, just a point in general. I hate these two choices this year and that is why I stated in earlier post in this same string that Bob Barr may get my voe even though he will never win in this corrupt two party system. If McCain were to choose Romney as a running mate I would look again at perhaps granting McCain my vote. We need someone with business credentials to help run this county, not lifetime politicians.
I agree brokovich. I actually would like to see Donald Trump in the mix. I read his book “The America We Deserve”. It’s a very good book with some VERY good ideas. Whether these ideas could actually be implemented is beyond my expertise, but I like the fact that he’s not beholden to anyone or any political party. An example of one of his ideas is: Keep in mind this book was written in 2000.
He proposes a ONE TIME 14.25% tax on individuals and Trusts with a net worth over $10 Million. He also proposes a repeal of the 55% inheritance tax. This would provide $5.7 Trillion to pay the entire national debt. It would also save $200 billion in interest payment. That $200 billion could give the middle class a tax break of $100 bilion. The other $1 billion could go into bolstering the Social Security Trust Fund. Paying off the national debt would retire all govt. bonds. People would be able invest in free enterprise in instead of govt. It woul also enable new business startups. His personal tax bill would be $700 million. He goes into some other options as well. He goes into more detail, but there is too much to list. I think what I like most about his ideas is that he at least has the guts to say EXACTLY WHAT he wants to do. WHY he wants to do it and HOW hewant to do it. The politicians I see now are not being specific in their plans. They say things like " I’ll work to do this" or “We as American need to strive for that”. Just lay out the issues and EXACTLY what your plan is to resolve them. Let the country see the plan have it debated and picked apart so people can have an educated view of what your poicies are. After reading the book, I felt at least that he had an exact plan to resolve the key issues that remain unsolved today. It’s hard to pick a plan apart when the current candidates aren’t laying specific plans.
I agree that we need a specific plan, but a one time tax of 14.25% on individuals and trusts with a net worth of $10 million dollars would be a DISASTER. Most high net worth individuals don’t have 14.25% of their net worth sitting around in cash. So, they would need to sell assets to pay the tax bill. That would drive the stock market down (everybody selling and nobody buying); cost jobs; and do great damage to the economy!
A tax on net worth would be VERY bad for us real estate investors. Those of us in the rental property business have a relatively high net worth, but relatively low cash flow. Coming up with 14.25% one-time in cash, in addition to all the property taxes we pay, would be highway robbery! Yes, we need a plan, but not THIS plan.
Mike
Whoops, sorry Phlemboy. I missed your post right above Mike’s.
I posted it. It was an idea Donald Trump had 8 yrs. ago in his book “The America We Deserve”. I see a couple of things with that. One is that many “high net worth people” don’t actually own much in their name. Second, the people who are on the cusp of that net worth may hold off or reduce in order to fall under that level until the tax goes by.
Propertymanager- My question is this. How can you have a high net worth if your cashflow is relatively low? Isn’t cashflow low when your debt is high? If your debt is relatively high, your net worth is relatively low correct? If you have a lot of equity, you have high net worth also. Perhaps instead of selling you can tap the equity to pay the bill. It would reduce the cashflow but it would not come from directly from pocket all at once. A net worth of $10M is beyond my comprehension at this point. But a one time 14.25% tax would cost $142,500 at the $10M point. If I were to have to pay that bill, you’d have to SHOW me that I could benefit from it. Perhaps there could be some future tax incentives to make it worth it. I also realize the if the govt. is going to ask for more money from ANYONE, they need to show they’re not wasting money FIRST. Is there ANY OTHER way to eliminate the national debt ALL AT ONCE? How does the national debt effect REI? Wouldn’t repealing the inheritance tax be an incentive? Or is there something else the “high net worth” people are doing anyway to combat the inheritance tax. Trump also has some other tax ideas that he talks about. However, I like the fact that he put the plan out there for it to be debated, picked apart, perhaps even reworked to move towrd a solution. At least he had a plan. I don’t think the candidates have an actual plan. I believe their plan is go with the American people in general want to hear. I think if they actually told Americans the truth, they’d never get elected for ANYTHING. Well looking back my post it looks like I had more than one question. Oh well, I think this is a good topic and I’m anxious to see what I can learn.
Missed a zero there. It’s $1,425,000 for 14.25% at the $10MM point.
LOL! I guess I should scrap my dreams of being an accountant! :shocked. That’s a lot of money. I guess to put it in perspective, that’s like asking someone with a net worth off 100K to cough up $14,250. But before you ask ANYONE to give any more than they already are, you HAVE to show that you’ve eliminated wasting money. Perhaps if the govt. didn’t waste so much money (pick a category…any category) they would need as much. In addition, you have to show them how they can pofit from their investment ( which is basically what it would be).
I don’t have first hand experience with other areas of the govt, but I wish I could do something about how the military spends its money. We have a system set up where people spend money because if they don’t spend it, they won’t get as much next year. Govt contracts for products are more overpriced than what you could go buy it for out in town. Add this to the crap you hear about Congress wasting money and you have a ton of money that could be saved if someone would change the system.
If this country was run like a SUCCESSFUL BUSINESS, you wouldn’t have that waste. You’d also have better use of capital ( taxes).
Propertymanager- My question is this. How can you have a high net worth if your cashflow is relatively low? Isn't cashflow low when your debt is high? If your debt is relatively high, your net worth is relatively low correct?
No. The amount of wealth you have in the rental property business is a function of several things:
- equity at closing (discount)
- appreciation over time
- paydown of principal over time
- number of rental units
Let’s take a relatively modest rental property business with 50 rentals. Let’s say that the average equity per rental is $20,000 (by purchasing at a discount). Let’s also assume no other equity. So, your net worth in this instance would be $1,000,000.
Now, let’s assume that you received $100 per unit per month cash flow. That means your cash flow is $5,000 per month.
There we have it - $1,000,000 net worth and only $5,000 per month cash flow. In my opinion, $5,000 isn’t a lot of money each month to live on and it would be very difficult to save $142,500 to pay that 14.25% one time tax bill. In fact, it would be nearly impossible to save that $142,500 in any relatively short period of time! Could you sell some of the properties or refinance some of the properties to get the money? Yes, but doing so would significantly reduce your cash flow, which was only $5,000 per month to start with.
Multiply all these numbers by 10 and you see why it would also be difficult for someone with a $10,000,000 net worth to come up with $1,450,000 for a one time tax payment.
The only plan that makes sense is to allow the economy to completely collapse and then we’ll start over. I think we’re past the point of no return in this country.
Mike
You know Mike, I disagree with you on Obama vs. McCain but agree with you on pretty much everything else. I hope this isn’t the case though, and that we can get it turned around.
They both suck… We are screwed either way, but in my 10 years experience in real estate, its always been the republicans that have help all of my business out.!!
SOOOO, I guess Mccain
Ok, if this is the way a lot of Americans feel how did we end
up with Mcain and Obama as the only 2 choices?
I wouldn’t say that’s how most Americans feel since the majority of Americans are slaves to their jobs and don’t own businesses. Hillary has such a polar division in her own party for her popularity or lack thereof. Obama seems to be a good orator and has been able to get people behind his “change change change” campaign. Considering our current state of affairs in this country, it’s easy to see how many Americans just want a change. I think some people were worried about having an Evangelical Christian in the White House again so that probably didn’t do Huckabee any favors. I also think Romney came off as slightly arrogant and may have affected his chances as well. So we have McCain and Obama (and maybe Ralph Nader too). I’m not saying my views are right, but this is just how I see how we got to where we are in the race.