My response to this article at newjerseynewsroom.com:

Can you please site the source that says 1,500 millionaires paid no federal income tax?? The tax code would not allow this unless they had no income (which if they had no income they shouldn't be taxed)! But I sincerely doubt they wouldn't have at least capital gains income which is taxed at 15%. This is of course how Warren Buffet would pay a lower tax RATE then his secretary because he only receives income from investments. BUT when you say the plan is, "based around the simple idea that billionaires shouldn’t pay lower taxes than their secretaries." You are not telling the whole story. Billionaires are NOT paying lower taxes then they are secretaries it is just a lower RATE. The amount of dollars that Warren Buffett paid in taxes is actually significantly higher than what his secretary paid. In fact the top one percent of earners already contribute 38% of the federal tax income. (http://www.heritage.org/budgetchartbook/pdf/2011/top10-percent-income-earners.pdf)

Another element we need to consider is how this rule would increase revenue vs. how much our government spends. If you consider this chart, by crunching the numbers you see that the income by implementing the Buffet Rule doesn't really attack the source of the problem which is exuberant government spending. The spending problem is the first issue we need to address before we look at increasing taxes. If the government were a private business it would have been bankrupt by now because the amount being spent is FAR more that the amount coming in, so much so that even taxing the richest americans won't move the needle that much.

The last thing I want you to consider (especially coming from the non-profit sector) is that the top 3% of earners account for more than 66 percent of all charitable giving year after year. So be careful when you ask the government to take more from them. Sure it will ultimately give the government more but it may reduce the giving to the non-profit sector. If this were to happen it is a question of: who do you trust to do the most good, for the most people AND in the most economical way... the government or a non-profit organization?? I would rather give my hard earned money to a solid non-profit that has a great track record of helping people because I know my money is going to a good cause. With the government however I'm not so sure where my money is going and how it translates to help the people who need it.

Mega Millons... Mega Rip-off

I have already posted about Gambling and the Lottery and you should know how stupid it is to play the lottery merely because the chance of winning is far too slim. But I have a confession to make.... two weeks ago I got caught up the hype over the $640 million jackpot and purchased a couple tickets for the first and last time. Unfortunately, I didn't hit it big but are the winners really set for life? Well no, chances are they will be broke in 5 years and really they don't have to buy anything extravagant. This is because they will be taxed into oblivion by the government for almost anything they want to do with the money. I would highly suggest you read this article outlining how the winners will be taxed. To add insult, most people who win the lottery don't know about these taxes and don't have a trusted tax professionals to help them. This is a recipe for bad news.

So maybe the lucky winners aren't so lucky after all. The real winner in the mega millions is always the government and it is set up that way. So before you throw away another dollar on a ticket think long about the decision. The only real way to get rich and STAY rich is by hard work, saving, investing and giving.

--A Future Millionaire

Student Loans: Response to an article in the Daily Targum

Here is the link to the article and here is my response:

Why is it the government and financial institutions that need to take into account the student's post-educational career prospects?

I think that responsibility falls solely on the students applying for the loan. If they want to go to a liberal arts school that costs $40,000 a year to major in underwater basket weaving then they should be allowed to do it, after all I think we are in a free country.

We all know this would be an irresponsible choice for that student and they would probably be told several times to reconsider BUT in the end the decision is up to the student (and/or their parents).

Also, before receiving the loan they have to read several documents issued by the lender about how this loan is a big undertaking and needs to be paid back. After all of these warnings if they still want to proceed, fine. But then problems come to fruition once they realize how much debt they are in and start thinking in real world money terms (as opposed to mystical college money terms where all you need to get food is a swipe of the student ID).

Only then do they finally realize that they will never be able to pay off the loan. This is when they start crying and protesting that they have been cheated by "the system" when in fact there was no cheating going on whatsoever. They had their fair warning and they have to deal with it. It is not the government's responsibility to bail them out.

Unfortunately this government has set up the precedent that if you whine and cry enough then they will bail you out, but this country couldn't afford to bailout the banks and it surely can't afford a student loan bailout. The only solution I know for getting out of debt is hard work and long hours. This method is what I am implementing while I'm still in school (It won't kill you to get a job at Burger King).

And hopefully new students entering college now will wake up and see what these recent grads are going through, so that they don't make the same mistakes.

We don't need more government in our lives telling us what to do. We just need to have common sense... which unfortunately is not so common anymore.

Don't Wait for a Crisis

Many of us simply wander through life not really worried about finances; thinking that if we just work hard and get a paycheck that everything will be OK. Unfortunately, this is not how it works. In order to be successful and thrive financially, we need to be aware of what is going on with our money. We need to constantly see how our money is coming in and going out (a budget). Have a plan when something unexpected happens (an emergency fund) and be able to live with dignity in our later years (retirement savings). All of these will not happen if we don't pay attention to our finances. Unfortunately, many of us think things are going well until a crisis occurs and when it does, everything is thrown upside. We then realize that our personal finance foundation was weak.

I have breaking news, a storm is coming! It may not come tomorrow, or the next day, or the next year, or even the next ten years but eventually a storm will strike! The good news is that you will recover quickly if you have a strong financial foundation including: an emergency fund, debt freedom, proper insurance in place, a retirement nest egg and a helpful support system. Please don't wait for a crisis to strike and then realize that your finances are not in order... by then it will be too late.

--A Future Millionaire

Technology

According to CNBC, Apple is ready to launch the iPad 3 next week. After this they will be feverishly working to release the iPhone 5. All of this excellent technology has infiltrated our lives and convinced us that if we don't have these things we are less productive and not as cool. I don't have a problem with people owning this technology as long as they can afford it! These companies (not just apple) with their excellent advertising and product appeal, have shifted these items from our 'want' list, to our 'need' list. We cannot imagine how we got by without being able to browse the web on our phone, but it is possible! If you are struggling, look to see if getting a cheaper phone plan will help with budget and the next time you are convinced you 'need' a new tablet, really reflect on if you can afford it. This will allow you to save more money or pay off more debt.

--A Future Millionaire