5 Insurance Policies To Avoid

Fear of the future and uncertainty is one of the best selling tactic used by insurance sales people. Insurance companies understand this fear and use it against you. Before I go any further, I will tell you that insurance must be included in your financial planning strategies. The key is to chose the correct insurance for your situation.

Insurance is about transferring risk - risk that you cannot take or do not want to take. Unfortunately many people waste money on insurance products that they do not need and never will use. Here I share five insurance products that you should avoid:

• Extended warranties - how many times when you go to the electronics store you are asked to buy an extended warranty. These type of policies are rarely used, particularly on small items. If you purchase a product from a reputable manufacturer, must likely it will work as advertised. So do not take the bait!
• Flight insurance - This one is completely unnecessary. Your life insurance policy should already cover you in the event of catastrophe. If you are not certain and you travel a lot, contact your insurance agent.
• Accidental death & dismemberment (aka AD&D) - Unless you are a driving calamity (constantly involved in car accidents), the use of this policy would be near zero. The coverage provided by these policies are covered by most of the reputable health and/or life insurances. Also, the manner these policies are written makes it difficult to collect.
• Mortgage life insurance - they pay off your mortgage in the event of your death. A valid concern, the desire to avoid leaving our families with debt burden. However, you accomplish this through other methods in your financial plan. If you still want to have an insurance to specifically address this concern, then go for decreasing term insurance. 
• Credit card insurance - another money waster, this one pays your credit card bills in the event you cannot pay. Interesting concept. I have a better idea, avoid running your credit cards and becoming a debt slave. This way you do not need to worry about the credit card bills.

There are a variety of insurance policies to choose from, and they all cost money. While it is prudent to maintain certain levels of insurance protection, you must be careful in selecting the right coverage. The goal is to provide your family the greatest protection against risk at the lowest cost possible. Remember the more risk you transfer to the insurance company the more you have to pay in premiums. Always read your insurance policies and ask questions to make sure you understand what you are purchasing and understand its limitations.
 

Gold prices have hit two-year lows in 2013 – so what's next?

If you are "investing" in gold right now you are probably not happy. The gold ride for gold and silver has been brutal. Currently it is trading under $1,400 which is a 26% decline from September 2011 high of $1,900.

As I mentioned on an article I wrote August 2011, Gold Is Not An Investment, 

Gold does not qualify as an investment since it does not generate income by itself when we put our money and capital at risk to acquire it. Gold has no real intrinsic value, its value is the one assigned to it. I understand there is a market for gold, just like there is a market for real estate and stocks. Gold is raw material, it does not produce income, no dividends, no cash flow. Gold is a chunk of metal while a stock is ownership in a income generating company. The performance of a company can be tracked and projected, you cannot do so with gold. The price of gold is speculative. Commodities are regulated by offer and demand, the challenge for gold is that we do not know how much gold really exist therefore the price assigned is speculative, thus it is not an investment. 


Right now there are a lot of people that are confused and wondering, What now?

The problem we have is the speculators and traders going around over-selling the idea of "buy gold now", which in turn it inflates the price and creates a bubble just like the one created for real estate. However, intelligent investors buy gold and silver to accumulate for the long term. They understand that gold is not an investment; it is money. Also, an intelligent investor understands that it is good to hold money as this world moves closer towards global bankruptcy and default.

You must stop playing the rigged casino where prices of precious metals are being controlled by a few by expanding or contracting the supply using ETFs. Ask yourself, why did the price of gold and silver took such a sharp dive last week? Some claim that "improved economic conditions", really? Others claim that the reason for the decline can be attributed to a report issued by Goldman Sachs last week that pointed to lower gold prices. 

When looking to hedge your money against the risk of inflation/devaluation you must be careful about doing so through the most popular gold ETF, or exchange-traded fund, known as the GLD. ETFs negate the fundamental incentive for hedging your cash supply since individuals cannot take possession of their investment or have it segregated or accounted for. Also, ETF is not an investment in actual gold, it does not promise that any gold is in its trust, and the legal structuring of the ETF makes it impossible to determine if its gold is being leased, as it cannot be audited. GLD’s own prospectus, states that there are no written contractual agreements between subcustodians and the custodian or the trustee, thereby making legal repercussions impossible should there be misuse or loss of leased gold. The prospectus also says that “failure by the subcustodians to exercise due care in the safekeeping of the Trust’s gold could result in a loss to the Trust." This means that if gold leasing is a component of the ETF and a default occurs, investors are extremely vulnerable and could potentially lose all their money if that metal is unable to be replaced. This is the reason why I recommend that the portion of your portfolio that you are holding in gold by physical gold. 

Is it possible that a small group of people are trying to manipulate the gold market to suppress the price of gold making illegal profits at the expense of ill advised investors who buy high and sell low. By suppressing the precious metal now an illusion of hope can be provided to the paper dollar.

There is one monetary principle that you must understand; gold is money, and the dollar is credit-of declining quality. So why do you measure your the "gains " in dollars? Why do you sell your gold for dollars?

Six Simple Tips to Develop a Savings Plan

Money is part of our everyday life. Money if used wise it becomes a great servant. However, when we allow poor money management to put a yoke on us and our family, we become the servant of money, and money is a terrible master.

One of the lessons we learned from the recent recession is that we cannot trust those in power to protect our investments and savings from the shaky hands of our politicians and the federal reserve. After being indoctrinated with the consumerism philosophy as the cure for all financial ailments learning to save money becomes a challenge for most families. It is important to know how to manage money efficiently to ensure healthy savings. It is the creation of a savings program that can help us sustain the stormy weathers that are ahead of us.

Before you start looking into an investment program, start by developing a savings program. Most of us have heard of saving money "for a rainy day", but many of us never quite get around to developing a personal savings plan. In our economic model where we focus on consumerism it can be difficult to make a savings plan a priority, but the longer we wait, the less opportunity we have to accumulate a healthy financial amount.


Here are six steps you need to develop a workable savings plan:

1. Determine a savings fund adequate to meet emergencies and achieve special goals. Develop your budget from the amount of savings you need to create a cushion your family needs for the rainy days and not from expenses you currently have. 
2. Add up your total income, including any funds you receive in addition to your earnings.
3. Figure out your total fixed expenses such as rent or mortgage, insurance premiums or car payments.
4. Estimate how much you need for day to day living expenses.  
5. Keep your savings funds separate from your operating funds.  This keeps the savings funds separate from the operating funds and you can see your savings account growing every month which provides motivation.
6. Make the savings systematic, for example you can establish a fixed amount every month  of $100 or you can establish a % of your gross salary.

Remember that you will grow richer each month as you pay yourself first. Good money management is more than financial formulas. It is controlled by the current events in our lives, so it needs to be modified as situations in our lives change. Do not be discouraged if initially your savings plan does not meet your goals. You may need to review your plan and identify the areas that need to be corrected, revise your plan and go at it again. This system works regardless of your job position and/or income level.

The Government is Watching; Every Breath You Take, Every Move You Make...

One of the reasons I started this blog was to share with you not only how to increase your wealth but how our wealth is stolen from us by the same people we hire to protect our wealth. Also, it is my intent to help people wake from their slumber and realize that the "American Dream" and
"American Safety" is turning into the American Nightmare and American Insecurity.

As I continue my studying and researching the history of the United States economic, finance, and tax policies the more I come to understand how our liberties have been violated and our freedom which we have fought so hard to achieve have been stolen. Our gold was removed from our currency, our right to bear arms is in danger, and very soon our freedom of speech can be controlled and blogs like this one could be banned. There was a time when we were
about liberty and freedom. However, the reality is that today our nation is going through a radical change. Those of us who love liberty and freedom must be watching our words and our backs. If you say the "wrong" thing on blogs you can be viewed as "terrorists" or "anti-American" and suffer severe consequences. You do not have the right to raise your children as you see fit. You do not have the right to privacy (many people live on a fantasy thinking that our emails, phone calls, and private transactions on the net are "private").

Just to give you a brief example, according to licensed private investigator Angela V. Woodhull, hospitals are increasingly using "guardianship" to strip elderly Americans of their liberty and to rapidly drain their bank accounts. Now this to me is the ultimate test to determine if our freedom has been stolen from us, a judge in Wisconsin has actually ruled that citizens do not have a right to grow and eat whatever foods they want to. The following is a short excerpt from his recent decision....

    1) no, Plaintiffs do not have a fundamental right to own and use a dairy cow or a dairy herd;

    2) no, Plaintiffs do not have a fundamental right to consume the milk from their own cow;

    3) no, Plaintiffs do not have a fundamental right to board their cow at the farm of a farmer;

    4) no, the Zinniker Plaintiffs’ private contract does not fall outside the scope of the State’s police power;

    5) no, Plaintiffs do not have a fundamental right to produce and consume foods of their choice;

When you see this type of invasion of the government in our private lives, we must wonder what happened to the "American Freedom". I don't know about you, but I don't want to end up living in a society that resembles the novel "1984" by George Orwell. 1984 was George Orwell’s chilling prophecy about the future (written in 1948). The novel is set in Oceania, where society is tyrannised by the "Party" and its totalitarian ideology. The Oceanian province of Airstrip One is a world of perpetual war, omnipresent government surveillance, and public mind control, dictated by a political system named "English Socialism" under the control of a privileged Inner Party elite that persecutes all individualism and independent thinking as "thought crimes". Behind the curtain there is a quasi-divine Party leader who enjoys an intense cult presence, but who may not even exist. Big Brother and the Party justify their rule in the name of a supposed greater good. 

Sadly, both major political parties of this country are part of this problem which is suffocating our country. Instead of protecting us against true enemies they have become our biggest threat. Instead of they protecting us against the true terrorist who may violate our freedom they have become the boogeyman and the thief of our liberties in the name of a "greater good".

Yes, we need security. However, this security must be established in a way that does not violate the liberty, freedom, honor or dignity of the American people. If the people in charge of providing us this security cannot accomplish this task without violating the human principles mentioned before, then they must resign and allow someone else to perform the task.

ID Theft Affects 12.6 Million Americans in 2012

Identity theft has become one of our worst nightmares. It has become a $50 Billion illegal machine that is constantly evolving and causing damage to our personal finances. Identity theft does not discriminate; the id thieve does not care about your gender, religion, nor race. Actually your age does not matter, one of the most alarming facts found from various research is that one of the most affected by this crime are children and teenagers.

The thief has no face, no gender and he/she can be anywhere. Just recently it was released a report that 12.6 million Americans were affected by ID theft in 2012 alone. This was the second highest total reported since the Federal Trade Commission began counting victims in 2003. The 2012 results were approximately 1 million more than 2011 and second to the record year of 13.9 million in 2009. 

I have completed a book on the subject of identity theft and its incredible the how devastating this problem is for the American people. I think you will find the information useful and would like to hear your comments.

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What has our government done to our money?

"Give me control of a nation's money and I care not who makes it's laws"
Mayer Amschel Bauer Rothschild

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"
Sen. Barry Goldwater (Rep. AR)

"From now on, depressions will be scientifically created." 
Congressman Charles A. Lindbergh Sr., 1913

This is a question that we all in the United States must be asking ourselves. Currently in the United States we manage our inflation levels through the manipulation of the interest rates. The consequences of this policy are devastating to savers and those attempting to live off of the passive income generated from their capital and create wealth.

How did we allow a private company to destroy the value of our currency and the wealth of a nation?

As part of the education process of developing financial intelligence, I highly recommend Murray Rothbard’s "What Has Government Done to Our Money?" You will discover how commodity based monies (real currency) has been replaced by fiat currency created by the central banks around the world. Through
this process, we the people slowly and unknowingly reliquished our wealth creation power to be controled by the government through the process of inflation, excessive taxation and devaluation of our currency.

The understanding of basic finance and money creation is essential to the understanding of our current financial crisis, how we are going to get out of this problem and how we are going to prevent it. It is imperative the we do something now, otherwise we are enslaving our children and our grand-children
to a life of perpetual goverment legalized slavery. This slavery does not discriminate on racial, ethnic, sexual orientation, or theological ideologies.

The Federal Reserve's, a private corporation, monopolistic grasp on the creation of our money out of thin air is responsible for boom-bust cycles in our nation. They are guilty of the destruction of our nation's wealth. Does this whole financial crisis or "financial cliff" have you baffled? Then this reading is a must for you.

It is the federal intervention with their fiscal policies that depreciates the value of the dollar, thus increasing inflation. This fiscal policy of "more money in the economy will fix the problem" is not necessarily good. Think about it, suppose there are today twice as many dollars in the economy as the day before. The normal reaction is that this is a good thing, we have more money. This could be true if the population doubled over night or we as a nation produced/manufactured more valuable services/products. If we are missing these elements under the fiat currency system, $1 is worth half as much as before.

This is what happened in the Weimar Republic after WWI. In 1929, the onset of the depression in the United States of America produced a severe shock wave in Germany. The economy was supported by the granting of loans through the Dawes Plan (1924) and the Young Plan (1929). When the American Stock Exchange (Wall Street) crashed in 1929, this left the struggling German economy in chaos. Industries failed and unemployment rose to 6 million. Social unrest followed, as people starved. Unemployment grew rapidly and in September 1930 a political earthquake shook the republic to its foundations.They owed so much to other countries from the Versailles Treaty that they printed money to pay their debt. As a result, there was hyperinflation, which caused their currency to become virtually worthless. Aside from the economic consequences, the poor state of the economy made way for a young, charasmatic politician named Adolf Hitler to capture the hearts and minds of the German people. You know the rest of the story.

In economic terms, printing money out of thin air is known as “monetizing the debt.” When a country prints more money to get out of a debt problem, it hopes to pay back the debt with more money than it had before. Doing so is inflationary and debases the currency. This may work short term for the government, but most likely it will make Americans poorer as their hard-earned dollars purchase less. You may be given a momentary illusion of prosperity and you may think that you escaped being directly taxed but inflation is another form of tax on your wealth.

Here are four ways that a government can use to debase your currency:

1. Lowering the Quantity of Gold or Silver in Coins - In recent U.S. history, since 1965 all coins changed from silver coins to clad coinage. This makes the coins a fiat currency since they are only worth something because the government has decreed it.
2. Eliminating Commodity Backing - By eliminating a commodity backing of a paper currency, the only backing is by government decree.
3. Deficit Spending - governments print excessive amounts of money. Inflation occurs when the supply of money outpaces the demand for money.
4. Fractional Reserve Lending - creating money out of thin air banks lend out much more money than they have in the bank. This can be a factor of 10 to 1 or more.

Financial intelligence, requires that we gain an understanding the cause and effects of our fiscal policies for effective financial planning and wealth management and preservation.

How did we allow a private company to gain control of the printing of our money, debase our currency and determine the fiscal policy of our nation? Why do we allow this private company to go unsupervised and unaudited?

One reason I recommend this reading is that you do not need a Phd in economics to understand it. The book covers what is money, government manipulations used to gain control of money from you and I, and provides two hundred year history of money and currencies in the Western world. It is through the studying and  understanding of past events that we learn how government has abused its role, stole our wealth and sold us into slavery to the international bankers.

We were duped into exchanging coins made with gold and silver into gold and silver certificates and finally into unbacked paper currencies. During this recommended reading you will learn that real money is a commodity whose value is proportional to its weight. Therefore, paper currency, or its digital equivalent, have no such value.

I rediscovered my passion for economics by reading Dr.Rothbard's book and I expect that some of you will also learn or rediscover the importance of economics as part of our development of financial intelligence.