8 Ways to Spring Clean Your Wallet

Nilus Mattive

This post 8 Ways to Spring Clean Your Wallet appeared first on Daily Reckoning.

In mid-2000, one of the most successful advertising campaigns running was Capital One’s “What’s In Your Wallet?”

Remember the commercials?

The first year the ads ran, Captial One total US accounts went from 29MM to over 40MM and card consideration among consumers tripled! 

This was the first time ever Capital One executed a sustained advertising campaign and they knocked it out of the park.

But if they were to launch the same campaign today, the ads might be a little different…

Instead of “What’s In Your Wallet?” they might be better off saying “What’s In Your Phone?”

We’re at a point now where you can safely leave your credit cards at home and pay for almost everything with your mobile device in store.

If you own a smartphone and have the right apps downloaded, you no longer need to carry around most of the things in your wallet.

Not convinced?

Another reason you should consider emptying your wallet is for your health. Up to 85% of Americans suffer from back pain at some point in their life. For many men, a common cause is sitting on your wallet.

If you’re ready to thin out your wallet, here’s what can go first.

1. Credit Cards

There are several stores and restaurants that accept mobile payments instead of cash or credit cards.

All you have to do is download the mobile app and link one or more of your credit card accounts. You pay by tapping, this transmits a payment code via near-field communication (NFC) technology to the retail terminal.

The security measures are similar to using a chip card. Mobile wallets you can trust:

Apple Pay

Google Pay

Samsung Pay

2. Checks

When was the last time you wrote a check?

There are easier and less cumbersome ways of transferring money to people now. Most mobile banking apps allow you to send money from your bank account to anyone simply by using their email address or username.

Using a money transfer app means no more carrying around checks in your wallet. These are some popular money transfer apps:

Venmo

Cash App

Dwolla

PayPal

Google Pay

Facebook Messenger

3. Coupons

Unless you actually like cutting coupons, there’s an easier way to take advantage of all the savings.

Couponing apps and other cash back apps can replace all your paper coupons, freeing up a lot of wallet space.

Here a few coupon apps you should have on your phone:

Coupons.com

Ebates

Flipp

Ibotta

Checkout 51

Krazy Coupon Lady

RetailMeNot

4. Loyalty Cards

Almost every store you go to now has its own customer loyalty card with perks and discounts. Carrying all these cards is not only annoying and bulky but unnecessary.

Since most stores can look up your store …read more

How to Avoid Loneliness Later in Life

Nilus Mattive

This post How to Avoid Loneliness Later in Life appeared first on Daily Reckoning.

In America we value our independence… our ability to live where we want and not have to rely on others.

But as we age, that independence can come at a high price…

While working we might live in a spacious house on a quiet cul-de-sac street, and don’t venture outside to meet our neighbors.

Then after retiring, we downsize to a smaller home — a condo or townhouse — in a 55+ community and remain socially isolated.

Boomers are increasingly living on their own as they age and are more likely to say they feel lonely than other generations. Being divorced, widowed, never married, or without children close by are contributing factors why so many live alone.

Women more than men will be in this predicament as women tend to live longer.

When you throw in the isolation that comes with excessive social media, it becomes the perfect storm for loneliness. And everything associated with loneliness is bad…

A survey by AARP found that loneliness has become a health crisis for adults. Only 33% of midlife and older adults who have spoken to neighbors are lonely, vs. 61% who have never spoken to a neighbor.

Researchers discovered that loneliness is as closely linked to early mortality as smoking up to 15 cigarettes a day or consuming more than six alcoholic drinks a day. Moreover, it is even worse for longevity than being obese or physically inactive and can lead to depression, cognitive decline, dementia, insomnia, and high blood pressure.

Cohousing is Solving the Isolation Issue…

The cohousing concept is generally a group of smaller homes where residents might share a lawnmower, tools, laundry facilities, a large kitchen, a garden, and recreational areas.

The homes are private and clustered near a common space where everyone meets to regularly share meals and build friendships. Prices range from moderate to high end. The average is usually about the same as in traditional communities in the area. 

In other words, the goal of cohousing communities is to share resources rather than pulling into your garage, closing the door, and never knowing your neighbors.

And a study by Brigham Young University revealed that greater social connection was associated with a 50% lower risk of early death.

It’s part of the new sharing economy within a small village — the kinds of communities that used to dominate our society.

Residents contribute time to help the community. Participation depends on how much their personal lives allow. And there is a mutual trust among members that everyone is doing what they can… be it helping to clean the common house or maintain the commonly-owned grounds.

More than 160 such communities exist in the U.S. Most are intergenerational with children and older folks. Ages of residents often range from 2 to 96.

And for seniors it could offer an attractive …read more

7 Ways Retirement Has Changed

Nilus Mattive

This post 7 Ways Retirement Has Changed appeared first on Daily Reckoning.

The days of the 40-year career with the same company are gone. The gold watch is gone. And in most cases, the company pension is gone too, or it’s been replaced by a self-managed IRA or 401(k) plan.

The first thing you need to know about retirement today is it’s entirely your responsibility.

Here are seven ways retirement has changed in the last 25 years and what you can do about it.

1. Inheritance

If you were banking on an inheritance from mom and dad to fund your retirement, think again.

According to an HSBC Bank survey of 16,000 people in 15 countries (1,000 from the U.S.), 23% of pre-retirees would like to spend their last dollar with their last breath, and let the kids figure it out on their own. Only 9% of the pre-retirees found it important to leave a legacy for their kids.

In the U.S., about one in 10 retirees support a child over the age of 16 and almost 60% of working-age Americans expect to leave something to heirs. The days of a hefty inheritance will soon be forgotten, so instead I suggest you start saving more now.

2. Mortgage Payoff

Should you pay off the mortgage? For most people, it generally makes sense after taxes to keep the mortgage, but 25 years ago most people would rather not have to make that payment every month.

Given how low interest rates are today, many retirees are choosing to keep the mortgage, or obtain one if they are buying a retirement home. A recent study by Merrill Lynch and Age Wave, a research firm, found that 64% of retirees expect to move at least once and 37% have already done so.

What’s more, 27% are seriously thinking about it. And not all of this is downsizing, 30% of those who have already moved upsized to a larger home primarily to make room for visitors and family.

3. Retirement Age

It used to be that 65 was the age you retired. This was the norm for a long time. Then a handful of baby boomers made retiring at 55 cool but this was still considered early retirement.

A recent survey by the Employee Benefit Research Institute, found that 50% of retirees quit working earlier than they expected. Health issues were the culprit in 60% of those situations, while 27% cited changes at the company, and surprisingly, 22% stopped to care for a family member.

In addition, a New York Life survey found that 51% of retirees wished they had stopped working sooner so they could have enjoyed retirement while they were younger and healthier. On average, they wanted to retire four years earlier than they did.

There’s no set or recommended retirement age anymore. Retirement comes to each person at different times in life. For some people, retirement is when your work becomes optional. …read more

Congratulations on the Quick Profits! Here’s What’s Coming Next

This post Congratulations on the Quick Profits! Here’s What’s Coming Next appeared first on Daily Reckoning.

Well that didn’t take long!

Just two weeks ago I wrote to you saying I believed Oaktree Capital Group (OAK) presented a great buying opportunity as a “hedge” against future stock market volatility.

My plan was that Oaktree — with its near 7 percent dividend yield — would be a stock that could be held for the long term. Instead, just one week later Oaktree announced that it was being acquired at a healthy premium to the current share price.

I guess this is goodbye to our portfolio hedge and hello to a very quick capital gain!

These are first world problems, folks…

Brookfield Asset Management (BAM) is the company that is acquiring Oaktree. The purchase price is a 15 percent premium to where the stock traded when I wrote about the business.

Oaktree shareholders have the option to take the $49 offer in cash or in shares of Brookfield. Oaktree has actually been trading slightly above the $49 offer price subsequent to the announcement, so shareholders who prefer cash can sell now and lock in this slight premium.

If cash is your preferred option, then congratulations on the quick stock market win!

If you are interested in maybe sticking around and becoming a Brookfield shareholder, I can tell you what kind of company you will be getting…

Brookfield Asset Management – A World Class Hard Asset Investor

My original thesis behind owning Oaktree was that as a distressed asset investor, the Oaktree business is countercyclical and thereby thrives when the economy and stock market suffer.

That is what would have made Oaktree a useful “hedge” against turbulent times for your portfolio.

All is not lost on that front, however.

I believe that if you decide to accept Brookfield shares instead of cash in this transaction, you will still be very much an owner of a company that is a good portfolio “hedge” against turbulent times.

This transaction involves combining Oaktree’s $120 billion of assets under management (AUM) with Brookfield’s $350 billion of AUM. That means that the countercyclical Oaktree business is still one-third of the business post-transaction.

More importantly though, I believe that Brookfield post-transaction will be a superb company to own for the long-term through all economic cycles.

This is not a combination of two lesser asset managers trying to become something bigger. This is a combination of two asset managers who are the best in the world at what each of them do…

While Oaktree is focused mostly on distressed credit opportunities, Brookfield specializes in the management of “hard” assets. By hard assets, I mean real estate (office, retail, multi-family), infrastructure (toll roads, ports, railways), and renewable energy (hydro, wind, solar).

Like any asset manager, Brookfield receives a fee for investing capital on behalf of its clients. Where a typical mutual fund manager would invest that capital into stocks, Brookfield invests in and operates the hard asset classes I mentioned above.

And by the way, Brookfield invests that capital very well, having generating an annualized …read more

Retire on Time Even if You’re 40 with Nothing Saved

Nilus Mattive

This post Retire on Time Even if You’re 40 with Nothing Saved appeared first on Daily Reckoning.

Turning the big 4-0 with nothing in the bank for retirement isn’t ideal but it’s reality for a lot of Americans today.

The Employee Benefits Research Institute reports that 37% of all employees age 35–44 and 34% of employees age 45–54 have less than $1,000 saved for retirement.

If you fall into this camp, take comfort in knowing you’re not alone. But realize you have a big hill to climb if you want to build a decent-size retirement nest egg.

You missed the opportunity to let time perform its compounding magic on your investments and now you’re faced with a simple math problem: The compounding approach won’t work for you if you start this late in the game.

It’s tough to accept, but it’s true. There are a variety of reasons why you left retirement planning until your forties. Dealing with too many debt commitments, juggling other priorities, having too little time, or simply not realizing that your 60s are closer than you think.

Regardless of your why, it’s not too late to take a hard look at your finances, create a plan, and get some money in the bank. Here’s a step-by-step guide on how to save for retirement in your forties without having to take on crazy amounts of risk. 

Step 1: Outline a Basic Retirement Plan

You’ll need four key numbers to start building your basic retirement plan:

the age you want to retire
the number of years you’ll depend on retirement savings
an annual estimate of living expenses in retirement
your current savings

Here’s how to find these numbers: While a lot of people see 65 as the “normal” retirement age, it’s by no means definitive. Take into account your age, salary, expenses and how long you’re likely to live, and you can figure out what age is a realistic retirement target.

Also consider all possible retirement income streams you might have. Will you have a pension, or will you depend on Social Security? To calculate your Social Security payments, enter your birthdate and current salary into this Social Security calculator from the U.S. Department of Labor.

You’ll see how retiring a year or two earlier or later will affect your monthly payments. For example, a 40-year-old earning $50,000 a year can expect benefits of $1,566 per month if he retires at age 65, or $1,824 if he waits until age 67.

After you figure out what age you plan on retiring, run your numbers through AARP’s Retirement Calculator. Enter your age, salary and lifestyle details, and the calculator will build a graph that shows your estimated retirement income and projected living expenses, as well as any gap between the two.

Adjusting your planned retirement age helps show you how working an additional year or two could affect your savings. What you might find is even delaying retirement until age 67 or …read more

“Dad, I Just Hit a Porsche”

Zach Scheidt

This post “Dad, I Just Hit a Porsche” appeared first on Daily Reckoning.

If there’s one text you don’t want to receive from your teen driver, it’s this one:

“Hey Dad, give me a call. I just got in an accident and hit a Porsche”

You better believe I called David right away. Not because I was worried about the Porsche or the expense at all. I wanted to know that my son was alright!

Fortunately, no one was hurt. The Porsche stopped suddenly when making a turn and David barely bumped into it. From the pictures I saw, there was barely a scratch on the bumper.

Of course the jerk driving the Porsche is claiming thousands of dollars in damage along with injuries. He already has a lawyer and is trying to capitalize on the situation.

So while this incident could have been a lot worse, we’ll likely be spending a lot of time and money to clear everything up.

Fortunately, a few short years from now we won’t have to worry about this type of event anymore. And today, I want to show you how to capitalize on some big changes happening on our roadways!

The Dangers (and Expenses) of Human Drivers

Driving seems to be a theme at my house right now.

David had his accident just a few days ago. My 18-year-old daughter has been driving for a year now and is a big help with carpool when we need her. And my 16-year-old daughter is scheduled to take her road test to get her driver’s license this week!

(We worked on parallel parking last night and she’s got the hang of it!)

While I’ve been very careful to teach them as much as I can about safety, and we’ve logged hundreds of hours behind the wheel, my protective side is still worried about them.

After all, there are so many unnecessary deaths on our roads.

Just last week, one of my friends lost his brother in a tragic accident.

A couple of years ago, a friend of mine turned left in front of an unseen vehicle and was killed instantly.

And my kids felt their own sense of grief when one of their classmates died in a crash last year.

According to the National Highway Traffic Safety Administration (NHTSA), there were nearly 40,000 people killed on U.S. roads in 2017, and about 90% of those accidents were due to human error.1

Talk about unnecessary tragedy!

And that number doesn’t even begin to touch the hundreds of thousands of accidents that did not have a fatality — but still resulted in immense costs in medical expenses, vehicle repair, infrastructure repair, lost productivity and more!

Fortunately, something is being done about the dangers on our road. And you can be part of the solution while also collecting income checks and booking investment gains!

Self-Driving Cars are the Answer… And They’re Right Around the Corner!

It wasn’t all that long ago that the thought of a self-driving car sounded like science fiction. But many of today’s new vehicles are capable of operating …read more

Exposing the Myth of MMT

This post Exposing the Myth of MMT appeared first on Daily Reckoning.

Yesterday I discussed modern monetary theory (MMT) and how it’s become very popular in Democratic circles.

That’s because it allows for much greater government spending without having to raise everyone’s taxes. And everyday citizens could get behind it because it promises to fund lots of programs without seeing their taxes raised.

What’s not to like?

If MMT were just a fringe idea with a few fringe followers, I wouldn’t waste my time or your time on it. But it’s coming your way, so it is important to understand it.

If you missed yesterday’s reckoning, go here for a refresher.

The people who are thinking about MMT, who understand it at least in some superficial way, are the people who are driving the policy debate or running for president.

Many mainstream economists and money managers have attacked MMT, including Fed Chairman Jay Powell, Larry Summers, Paul Krugman, Kenneth Rogoff, Larry Fink, Jeff Gundlach, Jamie Dimon and Ray Dalio.

But much of their criticism is unjustified (see below for more). I’m an opponent of MMT — but for different reasons. As far as I know, I’m the only analyst who’s raised the objections I list below.

Today, I’m going to show you what I believe to be the real problem with MMT.

Again, it’s easy to see why so many politicians on the Democratic side would be such big supporters of MMT.

Some or all of them have come out in support of the following programs:

Free college tuition, student loan forgiveness, Medicare for all, free child care, universal basic income (UBI) and a Green New Deal. Some support them all.

Needless to say, that’s going to cost a lot of money. Just consider the Green New Deal alone.

I’m not going to go through every detail of it. But in essence it would spend trillions of dollars, for example, building high-speed rail. The idea is to cut down dramatically on air travel. It would also convert nearly every single structure in the country to solar power.

I wrote this article from a house that’s running on solar power. But it’s very expensive to put the system in. I have a big system, but it barely covers my house. And every time I look at it, I say, “Oh, we’re going to do this for every house in the country? Good luck with that.”

Some analysts have estimated that the Green New Deal would cost around $97 trillion. That’s trillion, not billion — or nearly five times annual U.S. GDP.

When critics hear that a Green New Deal could potentially cost something like $97 trillion, or proposals for Medicare for all, free tuition, free child care or guaranteed basic income, they say, “That all sounds nice, but we just can’t afford it.”

That’s their main argument — that no matter how desirable these programs might be in theory, we just can’t afford them. Most criticism of MMT falls along those lines.

Even the Keynesians like those I mentioned earlier, who generally favor large amounts …read more

Why You Should Trade Like You’re on a Diet

Nilus Mattive

This post Why You Should Trade Like You’re on a Diet appeared first on Daily Reckoning.

My Dad had to put himself through college.

To pay his own way, he worked a number of jobs while taking classes and studying. And to save money and time, he ate the vast majority of his meals at “greasy spoon” diners.

So by the time I was born he had gained a college diploma… a solid job… and also more than a hundred pounds of extra weight.

One day, when I was in elementary school, Dad decided it was time to do something about his health.

He wanted to be around as I grew up so he designed a simple weight loss system that relied on the same discipline he used during his school years.

The first step was watching what he ate a bit more carefully. For example, I remember him removing half of the bun whenever he had a hamburger.

But the keystone of the whole plan was that, instead of eating lunch, he started taking a brisk two-mile walk every day during his break.

Sounds almost too simple, right? And yes, it flies in the convention of “smaller meals throughout the day” and all the other current thinking on weight loss.

Still, it worked! And Dad went from more than 280 pounds to back under 180.

More importantly, he has kept the majority of that weight off all the way through today – 35 years later!

Weight Loss and Wealth Building

As a lot of people like to point, weight loss simply boils down to fewer calories coming in than you’re burning off.

That’s exactly what Dad accomplished by cutting out lunch and replacing it with exercise. 

Really, all he had to do was stick with the system and some degree of success was practically inevitable!

It’s the same basic thing with wealth building.

If you spend less than you earn, you gain money over time. The longer you do it, the more you gain. The bigger the difference, the more you save. If there are investment earnings in there, things compound even faster.

Again, it’s pretty simple.

Want to take it a step further and become a trader?

Then you want to increase your number of winning trades to pack on the wealth by compounding the gains on top of each other.

And you want to cut your losers before they do much damage to your overall results.

That way your portfolio grows fatter, faster!

But how do you do this in a systematic way?

Just like dad’s diet, there are two basic steps to take:

Step 1: Institute Stop Losses on Every Trade You Make

These orders tell your brokerage to automatically sell a given investment if it drops to a predetermined level.

That way, you are out before the investment has a chance to drop any further.

You can also …read more

A Recipe for Massive Government Spending

This post A Recipe for Massive Government Spending appeared first on Daily Reckoning.

I try to avoid partisan politics in my analysis. And I never try to tell people how to vote or what they should think. I trust my readers to make their own judgments. But sometimes I can’t avoid partisan politics because they can have a major impact on markets and the economy.

Leading Democratic presidential hopefuls Elizabeth Warren, Kamala Harris and Bernie Sanders have expressed desires to increase income taxes to 70% or even 90% on the rich, impose “wealth taxes” on their net worth and impose estate taxes that are equally onerous when they die.

The result would be that working people would pay state and local income tax on their wages, super-high income taxes on interest and dividends and annual wealth taxes and whatever was left over would be confiscated when they die.

In case you think these proposals are too extreme to become law, you might want to check out the polls. Recent polls show 74% of registered voters support a 2% annual wealth tax on those with $50 million of assets and 3% on those with $1 billion of assets.

Don’t assume you’re exempt just because your annual income is lower. Those tax thresholds are on wealth, not income, and could include stocks, bonds, business equity and intangible business equity for doctors, dentists and lawyers.

Another poll shows 59% of voters support the 70% income tax rate proposed by Rep. Alexandria Ocasio-Cortez (D-New York). Politicians go where the votes are. Right now, the votes are in favor of much higher taxes on you.

The history of these taxes is that the rates start low and the thresholds start high, but it’s just a matter of time before rates rise, thresholds drop and everyone is handing over their wealth.

But taxes become very unpopular when too many people get clipped. And politicians are very sensitive to that. Now some Democrats are calling for a system that would allow them to spend much, much more money on social programs without appreciably raising taxes. For politicians, it’s a dream come true — if it could work.

The leading Democratic candidates for president and numerous members of Congress have come out in favor of Medicare for All, free child care, fee tuition, a guaranteed basic income even for those unwilling to work and a Green New Deal that will require all Americans to give up their cars, stop flying in planes and rebuild most commercial buildings and residences from the ground up to use renewable energy sources only.

The costs of these programs are estimated at $75–95 trillion over the next 10 years. To put those costs in perspective, $20 trillion represents the entire U.S. GDP and $22 trillion is the national debt.

It used to be easy to knock these ideas down with a simple rebuttal that the U.S. couldn’t afford it. If we raised taxes, it would kill the economy. If we printed the money, it would cause inflation. Those types of …read more

Could This be the Best Year for a Roth IRA Conversion?

Nilus Mattive

This post Could This be the Best Year for a Roth IRA Conversion? appeared first on Daily Reckoning.

Let’s begin with a few basics about IRAs…

Traditional IRAs generally provide a tax deduction for the amount you contribute. The money grows tax-deferred until you withdraw it. Then it is taxed at your ordinary income tax rate. You must begin required minimum distributions (RMDs) by April 1 following the year you turn 70½ and do so every year thereafter.

And if you die before removing all the money, your heirs will eventually have to withdraw it and pay income tax on the amount you had left them. Roth IRAs are somewhat the opposite…

You don’t receive a tax deduction for the amount you contribute. But the principal and all earnings grow tax-free for you and your heirs. And there are no requirements that you must withdraw funds at a certain age.

In other words, once money is in a Roth, it can stay there forever without the IRS or anyone else telling you have to remove it or pay income taxes on principal and growth.

The good news is that you can move money from your traditional IRA to a Roth IRA with a…

Roth Conversion

When you do a Roth conversion you’ll have to pay income tax on the amount you convert. The rate will be based on your ordinary tax rate. So the best time to convert is when you’re in the lowest tax rate possible.

I know… voluntarily sending your hard-earned dollars to the IRS takes a strong stomach.

But thanks to the Tax Cuts and Jobs Act (TCJA) of 2017, your tax rate may never be this low again.

Starting in 2018, most tax rates have been reduced. This means many people will pay less tax.

Here’s a look of how the recent tax change affects the two most common methods of filing, single and joint, for 2019.

Note that the TCJA is set to expire on Dec. 31, 2025. What will happen then is anyone’s guess. If Congress allows the tax code revert to pre-TCJA status, most households would experience tax increases beginning in 2026.

And considering the direction our nation’s deficit is heading, I’d say the odds are pretty high that we’ll have higher tax rates in the future.

As a hypothetical example, suppose you have $100,000 in a traditional IRA. It’s not all yours.

Remember you have that nagging silent partner, the IRS, wanting a piece of it. You decide to bite the bullet and buy that partner out. It’ll cost you $24,000.

Assuming you are a long-term investor, twenty years go by. If your Roth IRA has earned 7% per year, the $76,000 you converted is now worth around $298,000. It all belongs to you and your family. No taxes, no required distributions.

The big payoff comes a generation or two down the road for your loved ones…

5 Simple Ways to Reduce Stress

Nilus Mattive

This post 5 Simple Ways to Reduce Stress appeared first on Daily Reckoning.

Think about the last five years…

Can you recall an unexpected event that led to financial stress? Maybe a health crisis, layoff, leaky roof, or unexpected car repair.

You’re not alone. Approximately two-thirds of U.S. households experience an unexpected event that negatively impacts their financial wellbeing, according to Pew research.

So it’s no wonder the most common cause of money stress is the feeling that you’re just one financial shock away from disaster.

What’s even more depressing, reducing financial stress when you don’t make enough is nearly impossible.

“Even the kind of frugality that will theoretically bring you some relief will often require an investment of time or finances — and lacking money and time is exactly why you’re feeling overwhelmed,” says Emily Birken, author of End Financial Stress Now.

So what can you do if you’re stressed about money?

Birken recommends building some slack into your budget, which is possible at any income. Here is Birken’s five-step plan to help relieve some of your financial stress: 

Step 1. Adjust Your Tax Withholding

The average tax refund in 2018 was $2,895, which works out to more than $200 per month. One way to increase your monthly net without having to earn more money is to adjust your withholding.

Birken recommends requesting a new W-4 from your Human Resources department and figuring out the right amount of allowances you should claim using the IRS calculator.

Just remember, the tradeoff here is come tax time you won’t be receiving a big pay day from Uncle Sam. But if it relieves some of your monthly financial worry, the adjustment could be worth it. 

Step 2. Start A Surprise Fund

Different than an emergency fund, a surprise fund is slightly less robust and meant to help get you through small hiccups in your budget.

The easiest way to start building a modest surprise fund is to set up automatic savings with your bank.

Even if you sock away $5 a week, that’s $260 you can tap into should the need arise. If you up your weekly auto-save amount to $10 a week, that’s an extra $520 per year. You’ll be surprised how quickly your surprise fund grows and how you won’t notice the small amounts missing.

Step 3. Negotiate Your Bills

Easy wins in creating some slack in your finances include negotiating your bills, suggests Birken. It’s considered easy money because you typically only have to do it once. And if you’re successful, expect to save yourself an extra $20-40 every month.

Even saving $20 per month on your cable bill works out to $240 a year. Think about all the recurring bills you have now that are negotiable.

“Internet, cable, cell phone, and auto insurance are service providers that are willing to adjust their pricing in order to keep customers,” says Birken. “It costs them far more to …read more

The Government’s Greatest Con Job

10 Dollar Bill

This post The Government’s Greatest Con Job appeared first on Daily Reckoning.

Yesterday we documented our personal frustrations with contemporary technology.

Today we file a protest against contemporary money.

We begin with the “evolution” of United States currency…

We refer you to this $10 bank note, dated 1928:

In those antique days, a fellow could march into a bank, hand the clerk a slip of paper as illustrated above and demand the denominated amount in gold coin.

The system imposed a hard discipline upon banks… and held inflation in checkmate.

Federal Reserve banks were required to keep a 35% reserve of “gold or lawful money” on hand, lest they make a liar of the United States Treasury secretary — in this case the Hon. Andrew William Mellon.

In effect, the private citizen bound the banking system in golden handcuffs.

But one Great Depression, one New Deal and one world war later… we come now to a 1950 $10 bank note:

In appearance it is nearly a perfect twin to the 1928 model — with one infinitely telling exception.

Can you sniff it out?

The 1928 note bears this inscription:

“Redeemable in gold on demand at the United States Treasury or in gold or lawful money at any Federal Reserve Bank.”

But reads the 1950 version:

“This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank.”

The fine print disguises a vast swindle: The gold provision was stricken from the record.

The bankers had broken free of their golden handcuffs… and no longer could a private citizen bring them to honest account.

But what about “lawful money”? What is it?

In 1947, a certain gentleman — A.F. Davis by name — dispatched the following note to the United States Treasury, accompanied by a $10 note:

I am sending you herewith via registered mail one $10 Federal Reserve note. On this note is inscribed the following:

“This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve bank.”

In accordance with this statement, will you send me $10.00 in lawful money?

The acting treasurer, M.E. Slindee, responded after this fashion:

Dear Mr. Davis,

Receipt is acknowledged of your letter of Dec. 9 with enclosure of one ten-dollar ($10.) Federal Reserve note.

In compliance with your request, two five-dollar United States notes are transmitted herewith.

And so Mr. Slindee began chasing his tail — what the logicians call circular reasoning.

In exchange for his $10 note, Mr. Davis was mailed two $5 bills bearing the same pledge to redeem in lawful money.

But this Davis fellow would not be so easily shooed away.

He returned one of the $5 bills, once again demanding lawful money in exchange:

Finally Mr. Slindee threw up the sponge:

Dear Mr. Davis:

… You are advised that the term “lawful money” has not been defined in federal legislation. It first came to use prior to 1933 when some United States currency was not legal …read more