Sunday, November 28, 2021

California Living The Good Life

All of our interaction with the government seems very normal.  A bill for property taxes, a bill for car registration, car insurance, and other items are all the norm. If you own a car, and want to keep it legal, you need to pay for plates and insurance.  Go to a store and pay for your merchandise and walk out.

 In California it is different.  If you are homeless, there are no property taxes (kind of obvious).  No license, no car insurance, no big deal; you won’t go to jail.  When you get a ticket, forget about it.  Steal under 900 dollars and you will not go to jail.  If you shoot someone and there is a witness, they will release you until the trial.  It’s not rocket science; if the witness can’t testify, you don’t go to prison.

 What is different for responsible working people?  If you have a job, a family and a home, you cannot behave like that; the government can screw you over. They can foreclose on you house for nonpayment of taxes. If you don’t pay your traffic ticket, the government will go after you. They know you have money.  The threat of jail could mean you lose your job. From there, you can join the homeless.

 Notice, the only ones that have to comply to the laws, are people with money, homes, a family, cars, and a job. If you are homeless and, on the streets, government doesn’t give a damn about you.  You pay no taxes and if they have to lock you up, it costs the city real money. Jail is a service that returns no money back to the government.  It is an expense.

 So, what does it all mean?  If you are here illegally, you get out of jail free. If you are broke, you don’t have to pay things like fines or report to court for physical offences.   But God help you if you are a bonified taxpayer who has money and is a scofflaw. You will pay, because government can ruin your life; they know you have money and they can mess with you.

 The bureaucracy is not stupid, the state government assumes the taxpayers are extremely stupid.  And they are right.  They legalized crime, so don’t act surprised by the results.

 How do you fix this? The poor can live and exist outside of the rules for the middle class without punishment. The poor can ignore the system and there is no repercussion for doing so.  There is no feedback from the state government stating that the deadbeats are not paying their assessed charges. Taxes go up and people move out. Is that the solution to the problem? The answer, sadly is yes.  Most problems solve themselves.  The California State government is broken and cannot be fixed. Don't tell them, there is nothing worse than political indignation. I might not get my 20 ballots for president in the next election.

Thursday, November 11, 2021

Tax the Rich

When it comes down to taxing the rich, you have to ask yourself one question, who are the rich?  There are the lottery winners, or those whose fortunes come from novel ideas.  The great majority of rich people overlooked, are those that saved $100 dollars a week for a lifetime.  Its not uncommon for a married couple to amass a fortune of a million dollars.  If the intertest rate was 8% these retirees would be getting $80, 000 a year in interest—not a bad retirement income.  We know that is not the case, it is more like 0.5% interest and that is about $5,000 a year.

 Here is where it gets interesting.  Most of these funds are in IRA’s.  It’s a taxable event if you want to take your money out of it and run.  That is what has created stability in the financial markets.  The average retiree will withdraw funds in a manner that minimizes their taxes each year.

 Let’s take a retired couple with one million in a retirement fund.  Assume 6% inflation.  They will lose $60,000 to inflation the first year. And since they still have the million, they will lose the same 60K the next year if inflation is still at 6%.  So over 10 years, they would lose $600,000 to inflation.  I am assuming that they didn’t dip into the fund for the 10 years to simplify the math.  $1,000,000 minus $600,000 equals $400,000.  That is the buying power of the million-dollar portfolio over 10 years. Their savings have lost 60% of their buying power. So, if you retire at age 70, you will survive the next 10 years okay. Over the following 10 years, your million will turn into $100,000 in actual buying power. Drop a zero off of your wealth every 20 years to determine the forward buying power.

 In the above example it is assumed that you don’t need to withdraw funds from the retirement fund.  Life doesn’t quite work that way. With inflation, your funds will probably last 15 years or less. The US government is not going to raise the interest rate on Treasury’s to 8%, the interest on the national debt would bankrupt the country.  Interest on 30 trillion at 8% is 2.4 trillion.  That’s more than the government collects in taxes.

 The neat thing about taxing the rich, or should I say elderly retired, is that no one is listening to them.  Grandpa and Grandma just didn’t save enough for retirement.  The kids today at age 20 have always paid $7.00 for cigarettes—they were 25¢ when I was 20.  When I was young, I could never understand how my grandfather (who lived to be 98) got so angry over paying 35¢ for a loaf of bread, he would say it was only a nickel when he was a kid.  He saw the theft by government and was frustrated because he could do nothing about it.

 Precious metals appear to be the only lifeline for retirees.   A lot of the trading on the precious metals market, is done on paper and there are no demands for delivery. The real market, is the precious metals shop down the street, take physical possession. Buy gold, silver and platinum for the second 10 years of your retirement.  From my anecdotal sources, no one at the current time is selling metals, everyone is buying.  The weird thing is that a zero will drop off of your total saving in 20 years (buying power), but a zero will be added to the precious metals value.

Sunday, November 07, 2021

Old Age Tips

I’m getting old and have learned a few things I would like to pass on to others my age. It doesn’t really pertain to the blog, but what the heck.

The skin on my legs and feet started itching at times and it's really bothersome.  I used to use a prescription ointment to fix it, and it worked well.  I found a better solution.  Rub a teaspoon of water over the leg, getting it wet and rub the skin in a constant motion. You might have to add another one or two teaspoons of water.  After about 30 seconds, you will notice that dead skin is rubbing off.  You’ll find that the itching stops and you don’t need the expensive creams.

Taking a shower washing your hair (if you have any)

I take a shower every day and if you have ever closed your eyes you tend to lose orientation and get dizzy.  In the shower, leave your eyes open and keep your face dry. Water will roll off of your eyelids if you keep them open.  To wash your hair, wet the back half of your head and apply shampoo and pull the shampoo forward to the rest of your hair.  If you do it right, you don’t have to close your eyes.  When you rinse your head, use your hands to shield your eyes from the soap rinse. You can keep your eyes open.