Social Securities: Hidden problem for your kids future

The tricks of congress - those who wish to get their way with no concern of the rights or choice of the people - is to work on dragging the process of "law making" out so "we the People" get tired or bored and leave the issues alone. You take health care reform right now - as much as the Democrats say and push to rush this, they also do everything to drag it out [ who goes on vacation when you believe that there is a life and death emergency happening - congress does...]

But if you think that big government is good, that your children do not need to learn more about money because the government will be there to help - please read the article below about some of the things "congress" our leaders have done for you, me and what they are doing for your kids.

Social Security: the hidden problem
There is much debate today about how solvent Social Security is, but most of the debate is over when the trust fund will run out of money, not about whether or not the trust fund actually holds real assets. The conventional wisdom, prior to the economic downturn, was that the trust fund had enough money to pay full Social Security benefits until about 2041. That date has now been revised to about 2037.

In order to understand the true status of the trust fund we need to go back to 1982, and then examine the events that have taken place since that date. In 1982, the Presidential Commission on Social Security, chaired by Alan Greenspan, warned that Social Security would face serious problems when the baby boomers began to retire about 2010, unless Congress took immediate action to begin building up a reserve in the trust fund that could later be drawn down in order to pay full benefits to the baby-boom generation.

In 1983, Congress enacted the legislation recommended by the Greenspan Commission, which included a hefty hike in payroll taxes. In essence, the legislation required the baby-boom generation to pay enough taxes to fund the benefits of the previous generation, as was customary, plus enough additional taxes to prepay most of the cost of their own benefits, which was not customary.

children money social security futureThat payroll tax hike has generated about $2.5 trillion of surplus Social Security revenue to date. If the money had been saved and invested, as it was supposed to be, Social Security would be in good shape today. But the money was neither saved nor invested in anything. Instead, it has been used as a giant slush fund to pay for tax cuts, wars, and other government programs for the past 25 years. The government has "borrowed," or "stolen" every dime of the surplus Social Security revenue. If the government eventually repays the looted money, we can say that the government "borrowed" it, but, unfortunately, no provisions have been made for repaying the money. Furthermore, it may not be politically feasible to raise taxes for the purpose of replacing tax revenue that was misspent in the first place. If the looted money is never repaid, it will have clearly been "stolen" from American workers who paid the extra Social Security taxes.

This is the hidden Social Security problem. The trust fund holds no real assets. This was made clear by David Walker, Comptroller General of the GAO, in a speech given Jan. 21, 2005. Walker said, "There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down." On April 5, 2005, President George W. Bush shocked many Americans, during a speech at West Virginia University at Parkersburg, when he openly admitted, "There is no trust fund, just IOUs that I saw firsthand that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs."

The government was successful in keeping this dirty secret from the American people for a long time, but, little by little, the secret is slipping out. Even the 2009 Social Security Trustees Report acknowledges the problem with the following words. "Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public." Because of the empty trust fund, in just seven years, when the cost of Social Security benefits begin to exceed payroll tax revenue for the first time in a quarter-century, either benefits will have to be decreased, or taxes will have to be increased.

Dr. Allen W. Smith, is professor of Economics, Emeritus, Eastern Illinois University. The author of seven books, Smith has been researching and writing about Social Security financing for the past 10 years. Visit his Web site at

Friday, November 20, 2009 -

Cultivating a business - 4 necesary steps for kids

Cultivating a business with your eyes wide open ?

People are always telling how me impossible it is to make money. I mention to them how they should teach their kids about money, how they should change their own way of thinking about money - and I get all these stories how impossible it is. Well, here is a story in the newspaper how a gentleman found a new way to make money simply by opening his eyes and his mind.

The gentlemen I am speaking about is Mr. Bill Kurek, apparently he has driven the same road and route for over forty years and one day he simply opened his eyes, saw something [ in this case signs that have been there since the town was founded ] and his mind finally woke up and said “maybe I can do something with this “. It’s a short synapses of his success but you get the point.

Quote : LAKE PLACID - Bill Kurek had been coming here from Broward County for 40 years, and he kept passing the sign that boasted Lake Placid was the caladium capital of the world.
And even though he retired in July 2002, Kurek said to himself, "I ought to be able to do something with caladiums."
cultivating a business for kids He wasn't a salesman; he was a project manager for a company which installed fire alarms. "I managed crews that installed systems in high rises and hospitals," he explained.
But he went to the Internet and typed "caladiums."
"I almost fell out of my chair when I realized how much people were paying for caladiums," he said. "I've got to be able to sell bulbs cheaper than this."
Cultivating a business” By GARY PINNELL / Highlands Today

Open your eyes [ mind ] or be open to opportunities

Sometimes it sounds like a whole bunch of hogwash - the rich guru person telling you that you have to envision wealth first because you have to believe it first before you can become a success. Yes it sounds ridiculous but in part it is truth…

Many people go thru life never noticing the obvious, that which is right in front of them. They lose opportunities for love, joy, happiness and even prosperity because their simply oblivious to what is right there before their very eyes. Others simply can’t seem to believe that the opportunity of love, joy, happiness or prosperity in front of them is possible because they some how refuse to believe they can achieve that love, joy, happiness or prosperity. Then again, some simply wont take the step, work or risk to reach out and grab for that opportunity.

So in part - all those “gurus” selling the principal of “think and believe it” first speeches are in part - correct.

Teaching kids about money means more

My post are mostly about teaching kids about money, that as parents we have the responsibility to teach our kids about money. Teach them how to make money, how to manage money, how to think about money and all the different things that go along with it like investing, starting a business and so forth.
cultivating business children ignorant about money
One of the most important things I try to teach my kids about money is that it all starts in their mind first.

Not that I am trying to teach them some fancy guru’s belief of “see it and you can achieve it “ nonsense. I want them to understand that just like Mr. Bill Kurek , an opportunity could be passing them by simply because their not open to it. I try to teach them 4 basic principals that they can use in everyday life:

1- never say you can’t - no, always say; how can I do or achieve this
Too many people say they can’t without even trying first. If you train yourself to think that everything can be done, that you simply need to find the solution to “how” then your less likely to give up without trying. Everyone knows the story of Tomas Jefferson - how many tries did it take for him to invent the light buld - 2, 3, what 1,000. But what we really should consider is - what if he would have thought: "light bulb, that is impossible. Why even try. "

2- it’s too late, it’s already been done - no; say, how can I improve this or benefit from this
Mr. Bill Kurek could have easily thought, hey this is an old idea, to many people are already doing this and kept on driving, but he thought to himself, how can I sell this cheaper [ meaning - how can I improve on this ]

The Bible is more than two thousand years old and it says “there is nothing new under the sun” - trust me nothing is new. I heard someone describe the Iphone as just a touch ipod that makes calls. Which came first the iphone or the ipod ?????? … the ipod.

3- I give up, no; say - I need help or I’ll come back to this
Many people get excited about this or that and when they run into trouble they soon give up - it doesn’t matter how close you come to success, if you don’t accomplish success - failure is still failure.

How many stories have we heard about millionaires who become rich because they took someone else’s efforts and made millions while the creator of that product or idea is still poor. Microsoft - it’s said that Bill Gates didn’t create the program he bought it from someone [ do you know that mans name ??? No… ]
McDonalds - Ray crock bought the rights to franchise the McDonalds concept [ with fast hamburgers ] McDonalds is worth billions - and what happened to the McDonald brothers ????

My life, your life, everyone has a story about an opportunity they let slip by because we gave up, because we couldn’t capitalize on an opportunity. We will always say - I almost, I tried, but we fail to say - I never went the extra mile, I didn’t seek out help. We failed because we gave up. We failed because we thought it just couldn’t be done.

4- I don’t understand, no; say - I’ll take time to learn
My children come to me and always say the same thing -”dad, help me with this. I don’t understand it”. Like most children, what they really mean is - dad can you do this for me.

I always try to teach my kids through hands on approach [ meaning they have to do it in order to learn ]. It does not matter if it is homework or life’s lessons - they have to process it, learn by thinking and doing - they will not learn from me giving them the answers.

The reason people lose money in the stock market is because we just don’t take the time to learn. Why do people fall for email scams about some unknown face saying they will give you 10 million dollars if you send them $400 dollars to transfer money from Africa to America…. We do not stop to think, investigate, learn - we just react.

Most people have car insurance - they don’t know why they have it, some even hate it, but they have it. Did you know that even though the stock market is risky, you can buy insurance on your risky investment [ I bet your mutual fund advisor doesn’t tell you that ].

The next time you see your child struggling with homework, or you have an opportunity to teach that child about money - help them open their eyes and their minds. Because believing is not enough, but if you keep an open mind, look to find answers, never give up, ask for help and learn what you need to learn to be a success - your chances of success are a lot greater than you think.

Down market is best time to teach children about investing

Down market is best time to teach children about investing

The market is down; stocks are lower than they have ever been before - that means it is the best time to teach children about investing. That is right; the best time to teach children about investing is now – with hands on trading!

The market is low and some stocks have been beaten down to almost incredibly cheap prices – that means you can open an account with little money and use this as an opportunity to teach the kids how to invest. Why… You ask?

Why teach children about investing now

Because it is cheap!
The reason why “Now” is the best time is because stocks are so low. You can open a free account online [ I did it with sharebuilder from NIG ], you deposit a $100 dollars that your not afraid the kids will lose and go at it. My daughter bought 300 shares of CITGQ for $65 dollars [ not my best choice but hey, she’s learning and she wanted a high risk with high return – probably thinks the govrn’t will bail them out ]

The next best reason is because they are young – they have time on their side. Even if you just teach them how to play it sensible, safe and just take advantage of good companies who are making money but their stock suffers only because of the current market claimant. Take for instance AIG, it dropped down to $6 dollars and then 1 year later it was up to $47 dollars. They [ children ] have time to ride out the nonsense.

Why you should consider “penny stocks”

teach children about investingAnother reason why this is the time to teach your children about investing in stocks is because they can generate greater returns with “penny stocks”. Penny stocks basically means stocks that are trading below the five dollar mark. Some may be $4, $2 or even .56 cents – but they are all classified as penny stocks.

You can leverage more with your money, low stock price and your child’s luxury of time with penny stocks.

Here is the reason why I let my daughter make her crazy stock pick of CITGQ:

If she bought 3 shares of stock that totaled $100 – the odds of her making money is small. Even if each stock rose a $100 dollars at most she makes $300 dollars profit.

But if her 300 shares that she bought at 0.23 cents each rose by:

Each share up $1 x 300 = $300
Each share up $2 x 300 = $600
Each share up $3 x 300 = $900

Do you get the picture? The stock 52 week high was $6 and 52 week low was 0.17 cents. If her risk pays off and the stock only goes back up to $6 she can sell and make $1,800. Now that’s a big risk [ bet ] but a really hefty return; plus she has the youth [ time ] to wait for it to bounce back [ that is if it doesn’t crash and burn ].

The ultimate reason to teach children how to invest now

The ultimate reason to teach your child to invest now, with hands on teaching is – because it’s the best way to teach. Reading and talking about investing can only take you so far. When your child has real money, real world experience and an opportunity to get a real return on that investment - they are motivated, more interested in learning.

My daughter plays online games about business but in her mind she knows that it is not real, she takes big risk becuase it is a game. But with real stocks, market conditions and real money at stake – she has to put her emotions in check and has to actually think about what she is doing and why.

kids money investing

Learn about money, kids learning math

Learn about money, kids learning math ?

While some may say that teaching my kids about money, building a business, investing for the future is a way of teaching my kids to be greedy - that I should be teaching them better qualities like giving, sharing and etc… to them I say [ *&%$#@! ] no just joking…

I would like to let them know that while I have been teaching my kids about money I have noticed that their learning about math. Yes math. Not just learning about math, but an appreciation of math and how “ boring math “ can be applied to every day life. My son calls it “Fun Math”.

" Fun Math " being fun causes desire to learn

My 5 yr old son has a bit of trouble staying still. When it comes to learning - lets say he has a low attention span. But since we started playing "cash flow for kids" where we have him count the dice so he knows how many spaces to move. Or when he counts out his moves or counts his money - it has given him a desire to learn more about math. He sits around the house, takes a book with him in the car and he practices math. Currently he only does adding, but he is only in kindergarten and I already showed him how to solve adding equations of up to three numbers.

Imagine that, a five year old who is solving how much is 300 plus 300 or 250 plus 200.… and he thinks that math’s fun! I love it, it just tickles me pink. Today he asked me if I had the day off, when I said yes he shouted "great, we can play the money game today…. Right?" What parent doesn’t want to see their child interested and excited about learning.

Math can be used in everyday life

When math gets complicated [ like algebra ] people usually lose interest because after all - when will we ever use it in average everyday life? Really - how do you convince a child that one day walking down the street he/she will need to take time to find out what "X" equals???

teaching kids mathBut while I was online with my daughter playing this game about running your own business, I ran across something that helped me show my daughter that yes, you can use complicated math in everyday life situations. There we were trying to solve how we can figure out how to make a profit from selling ice cream. All of a sudden they were asking us for percentage, how to solve the problem of profit ( X = sale minus cost ). Can you imagine that - the math most kids hate and say they will never use in ordinary average everyday life being used to solve an everyday situation.

Yes, I took the opportunity to point out to my daughter that math is important - learning how to solve for X, learning percentages and all the other boring math kids hate. It can help you in your business, in making you money, making you rich.

Why teach your kids about money

Why teach your kids about money, how it works, how to make it, manage it and invest it - well because you want a better future for them. And if that is not a good enough reason for you and you need a more noble just cuase… then because it’s an interesting fun way to teach your kids math. An excellent method to build interest in math and how learning math can help them in everyday life.

Even if they start learning because they want to be rich - atleast that interest in being rich will fuel a desire to learn more.