Let's Set the Record Straight
According to the President of the United States in his three most famous lines:
1. He has shovel ready jobs.
2. You didn't build your business.
3. He didn't draw a red line in the sand.
Only he has the ability to set this perfectly straight. If you are comfortable with that notion, then reading further is superfluous. Just wait for him to make everything crystal clear and follow his directions. You will do quite well. If you don't feel that the three famous lines are correct then perhaps I might be able to put you on to the real meanings and from there onto the road to financial freedom.
First of all he might of had shovel ready jobs, but after a check with the Army Corp. of Engineers they were clean out of shovels. Who knew? You didn't build your business was the line and the inference was that the government really handles the jobs. It isn't surprising he feels that way because the government is close to the majority partner with the amount of taxes they collect from the business they built and yet allows us to run it and pay all the bills including the losses.
He didn't draw a red line in the sand falls into a different category. Although he had been spotted with red under his finger nails there are a million explanations for that. I am sure President Putin (?) will clear this up quickly.
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Basically we are on our own and we better realize that unfortunately the government is not here to help. Let's start with your finances. Everyone seems to believe it is time to raise interest rates. Really? Somehow I think that those in the know really don't (know). The same interest rates that you use for your mortgage and they use for their margin accounts are the same rates we use to pay interest on the $17 trillion debt. We have been paying ONLY $200 Billion on the debt at these low interest rates. If interest rates go up, perhaps double, we will be paying $400 billion of interest.
Where is that coming from?
The government is currently taking a victory lap on the fact that the deficit is lower this year than last. Only they can claim victory for a short term failure. The government raised taxes on dividends to take place in 2013. The majority of public companies borrowed money to pay their stockholders their 2013 dividends in 2012, saving a ton of tax dollars, but giving the government a bonus in dividend taxes because the taxpayers received 2012 and 2013 dividends last year and paid the taxes on both.
NEXT YEAR THE TAX INCOME FROM DIVIDENDS WON'T BE THERE; the deficit will increase dramatically! . Remember the increase of taxes on dividends was to bring in more tax revenue not less. The public companies just out smarted the government.
The largest problem facing homeowners is their Heloc, home equity line of credit. Those loans are generally variables but don't just increase every six months or a year. They increase every time the Federal Reserve raises short term rates. They can do that 7 times a year if they feel it is needed and your interest rate can fly.
Take the time to investigate a refinance rolling your Heloc into a new first trust deed. If you want to keep your Heloc it can be subordinated (put behind) the new first trust deed with a zero balance. That way you will still have it for your use but you won't be paying anything on the Heloc until you take out money. This is ending a potential major financial problem.
There certainly are more problems which I will discuss in the future. Stay tuned.
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