According to the Applied Research Center – a social justice advocacy think tank, it was.
Heavy stuff – there may be some truth to it. So check it out for yourself here.
Author Archives: Team Dinks
OECD: High Taxes Make People Happy
Hi All,
I saw this headline and immediately started talking about it with Miel. MarketWatch’ s Thomas Kostigan has a provocative editorial out. In it he claims that northern European countries are happier due to their very high tax rates. The main reason, Kostiagan asserts, is that the high level of taxation pays for social services which help to mitigate the risks of everyday life. From the article:
“Northern Europeans pay some of the highest taxes in the world. Danes pay about two-thirds of their income in taxes. Why be so happy about that? It all comes down to what you get in return.
The Encyclopedia of the Nations notes that Denmark was one of the first countries in the world to establish efficient social services with the introduction of relief for the sick, unemployed and aged.
It says social welfare programs include health insurance, health and hospital services, insurance for occupational injuries, unemployment insurance and employment exchange services. There’s also old age and disability pensions, rehabilitation and nursing homes, family welfare subsidies, general public welfare and payments for military accidents. Moreover, maternity benefits are payable up to 52 weeks.”
For my part, I think Kostigans thesis is rather silly. At least here in the Discrict of Colombia I’ve found that public services are often badly managed, slow and of limited impact in addressing real world issues. Another problem more generally with Kostigans idea is that society tends to be more robust in Scandavia, e.g. families are stronger and there are fewer endemic problems like crime and regionalism. It’s a lot harder to build up your wealth when you are paying in 70% of your income each year!
At any rate, its an interesting piece so check it out at marketwatch.
Best,
James
Good News: Small Investor Sentiment Improving
Hi All,
Well here is some good news. The NY times is reporting that so called “mom and pop” investors are getting back into the stock market. Many commentators have noted that recessions are partly psychological – that is fear of losses cause people to limit their economic participation, thus resulting in overall declines in capital investing. It’s hard to make wealth when approaching investing with fear. The fact that small investors are getting back into the market means that uncertainty is starting to decline.
Some excerpts from the article:
“A woman on Long Island opened an Ameritrade account and started buying stock in mining companies. In Chicago, a developer in advertising is betting heavily on oil. And outside Seattle, a Microsoft employee is snapping up shares of technology firms and retailers.
After being pummeled in Wall Street’s plunge last year, many small investors pulled out of stocks. But the stock market’s recent rally — one of the sharpest since World War II — is starting to beckon some of them back. So step by nervous step, some smaller investors are tiptoeing back in. They are pulling money out of savings accounts and money market funds and buying stocks and bonds, fingers crossed.“
Click here for the full text.
Best,
James
Save Your Money
Hi All,
Save your money.
That is all for today.
Thank You,
– James
Is China At Forefront of New Global System?
My wife Miel is a world traveler. She’s been all over, the Middle east, Asia, Africa and Europe. This has given me a sense of the importance of looking at economics from a global perspective.
Now, what I fear is happening is that because of America’s never ending budget deficits and titanic job losses, we are losing our economic preeminence. As we lose our economic preeminence, it makes everything from quality of life to ability to build wealth, much more dificult. Case in point, the latest article from The Economist:
Creditor nations tend to set the rules and the new global monetary system will be unable to operate without the approval of China, a creditor country that has capital controls and a managed currency. It has been assumed that China will have to move towards the Western model. But why not the other way round? Western countries adopted free capital markets, as the British adopted free trade in the 19th century, because it suited them. Will China now be able to call the shots? Uncomfortable as it might be for the West, the next monetary order is more likely to be made in Beijing than in New Hampshire
There might be some truth to this, click here for the article.
Get Buy In For Your Joint Goals
We’ve recently had several posts on how we deal with divvying up our finances. One thing that we didn’t cover is the importance of jointly contributing to household goals and expenses. We know that most couples experience shifts now and then on who has more money and who has less. At the same time, we believe that couples who jointly contribute to household goals and expenses will feel more mutual ownership. This leads to a greater likelihood of both partners feeling more satisfied and engaged in household financial decisions.
If possible, have both partners contribute to big ticket items. For instance, if one person contributes their money to supporting regular household expenditures and the other person contributes to a larger savings goal such as a house or a car, the first person’s contribution can feel more like a sunk cost and they will likely feel like they have less of a stake in the larger purchase. Clearly both people are contributing, but in the end the second may complain that they were the ones who made all the contributions towards the larger item.
For instance friends of our have a situation where the wife went back to work after having a child, and paid for 100% of child care expenses (an ongoing household fee), and the husband pays for the mortgage. Due in part to the way they have their finances set up, at the end of the day the husband feels like he has more ownership of the house and the wife is left feeling like she is throwing the majority of her paycheck down the drain. If however, they shared the cost of both items, the ownership and responsibility would be more joint.
We’ve also seen this to be the case in our own lives. If all of James’ extra money goes to buying stocks and all of my money goes to supporting our household, it doesn’t feel as equal. While I’m indeed contributing more to our household while James is in school, we still find ways to make sure that we are both contributing to the financial goals that we set. When we both have a stake in wealth building activities like investing, it will make the returns (positive or negative) feel more personal. In terms of household expenses, James pays for the utilities and I pay for the internet expenses. This makes it easier to manage, but also makes it so we both have buy-in to our joint goals and expenses.
Miel
The Madoff Affair
Its unreal how much wealth was stolen. Madoff really should be eligible for the death penalty.
The saga, in depth, from PBS.
Millions in Proposals
Hi Folks,
It seems my life is never ending grant proposals these days. After having submitted another batch today, it reminds me of my first reflections on the proposal process. It is really very interesting when you think about it.
I’m certain it varies a great deal from sector to sector, but overall many types of businesses and organizations function in parallel ways.
My experiences in proposal development (grants, agreements, contracts) has been something like this. You spend anywhere from a couple of weeks to a couple of months preparing a proposal, sometimes with a small team, sometimes with a large. You ask for a bunch of money, sometimes a couple of million, sometimes twenty; I’ve never gotten up to past eight digits, but they are certainly out there.
At the end of the day, the twenty to forty pages that are submitted can be worth a whole lot more than a suitcase of cash; though sometimes those same pages are destined for the recycle bin.
You win some, you loose some. I guess that is just part of the game.
Right now my portfolio is around $20 Million, with all possible outstanding proposals in the near future it could be in excess of $40 Million, though its likely to settled somewhere in the middle.
At the end of the day, those millions were gained by crafting ideas and concepts. While it works differently in most of our personal lives, I still think it is interesting to reflect on how money flows. Most of us would love to trade a ream of paper for a few million. It may not go into my pocket, but I’m happy to have it facilitate helping people who are very much in need.
Wish me luck on a least a few wins coming up.
Cheers,
Miel
Was Obama A SubPrime Borrower?
Hi All,
I’m mad busy this afternoon, but wanted to draw your attention to an opinion piece by by Ricard Lee at the NY Daily News. In it he has a moderately clever analysis of President Obama’s finances before he became president. The results of the analysis suggests that Obama’s wealth was largely funded by drawing on home equity before the President was elected to the U.S. Senate.
The open question is what it means that Obama drew on his home equity. Lee argues it means that the president was a debt addicted spend-a-holic. However, if you ask me, it just suggest that Barack and Michelle were basically average upper class Americans. Could he have found better ways to find his income stream? Or could he have spent more time and effort building wealth with what he had? Of course, but couldn’t we all?
Thanks,
James