If It Doesn’t Glitter, It May Be Gold

Don’t despair, my friends, Corney is here.

The financial news is nothing but interesting these days.
Up and down, down and up: wow!
Are you as dizzy as I am? Harrowing is the word.
I watch the ticker running across the bottom of my TV every day trying to maintain an emotional even keel despite the minute by minute variation in the prices of my stocks.
Can you relate?

Alright, now I want you to take a deep breath and answer this question:
have you done any harvesting lately?
(And I don’t mean the tomatoes, potatoes, and avocados in your back yard.)

A little known tax loophole, to harvest your tax loss means to offset up to $3000 of your income with the excesses in your overall loss in stock investment capital.

This is a dollar-for-dollar deal and a sunlight on a rainy day kind of strategy.

Now, this thing gets more complicated than that with various exceptions, rules, and restrictions, and therefore you need an expert accountant to keep you on the straight and narrow. I mean, for now, this tax loss harvesting strategy is certainly a ray of sunshine in an otherwise stormy sea.

But, imagine how simple it would be with no taxes at all?

As a preview to a complete overhaul of the current tax system, I invite you to download my report “Done with Cash” for free, when you apply for it.

US Deficit (5)

While some have been taking the mounting deficit to be a serious threat to the current status of our nation as a super economic power, others have been ignoring it with a wave of the hand.

Would we respond the same way if our personal debts are increasing every month?

One way of looking at addressing this deficit is to balance our budget – but hey, any one can do it, right?

So, what is more important?

We need to put a limit on our monthly expenditure!

Limiting our expenditure becomes very essential when we are not able to identify avenues to increase our revenues.

That’s what the government also needs to do now – put a upper ceiling on the amount of spendings.

In fact a better thing to do would be to plan for decreasing expenditure, rather than fixing it at some figure and continuing to maintain it there.

Imagine what is possible, if the government could pay off the current debts while gradually reduce the pay outs – in a couple of years, we will be able to nullify the deficit and be able to build surplus as well, if we continue beyond it

While this is a definite option available, and one which can also practically implemented, there could be other possibilities people have been suggesting.
Like, for instance, removing the $90 ceiling now in order to guarantee social security benefits for generations to come.

Some others have also been suggesting removal of the payment of benefits to anyone who doesn’t contribute to social security.

While increasing the pay-ins to social security trust fund is also suggested, a clear plan of implementation to repay all the surpluses due to social security over the next 20 to 25 years also has been suggested.

As a preview to a complete overhaul of the current tax system, I invite you to download my report “Done with Cash” for free, when you apply for it.

US Deficit (4)

The National Debt is increasing and reaching a critical stage where something serious needs to be done.

Is there solution?

What would you do if your personal debt is continuously increasing and becoming more and more difficult to manage?

Wouldn’t you lay down rules for yourself as to what items you would spend on, and what item of income you would put effort to increase?

That’s what the government needs to do.

But is there a way to increase the revenues?
Aren’t people already complaining of the huge taxes they get to pay?

Mention IRS or taxes and there immediately is a grim expression on the face, with a clearly perceived grumpiness!

Did you know that the founding fathers actually thought it over and put in Article V, to be used when needed (like in the current scenario)?

Any budget amendment, once proposed, needs to be ratified by three-fourths of the states in order to come into force, and over 28 states out of the required 34 have already called for a convention.

As the convention is being called for to discuss and deal solely with the debt issue, it is considered to be safe without any negative implications.
Moreover, the convention can only propose amendments – it cannot change the constitution.

Our past experience also has been that making amendments is a safe process and the founding fathers of the constitution have designed it so that it can be amended at a future date, if required.

As a preview to a complete overhaul of the current tax system, I invite you to download my report “Done with Cash” for free, when you apply for it.

US Deficit (3)

This month if you need to spend more than what you earn, you would obviously borrow and the amount you borrow is called your debt.

What happens if the next month also you spend more than what you earn?

You will borrow again, while you are required to pay interest on the amount that you already borrowed last month.

If you continue doing this month after month, without actually paying off anything – either the principal amount you borrowed or the interest that you incur on it, very soon, your debts will pile up and there will come a time when your monthly earnings wouldn’t be sufficient to just pay the interest on the amounts that you borrowed!

That’s what the government is facing today – no money to pay the amounts borrowed, and an income that’s not even sufficient to pay off the interests on the amounts borrowed!!

So, where does the government get the money to clear off all these dues?

The government doesn’t have money of its own – every single cent is collected from you and me.

Someone, somewhere, has to pay up for the process of clearing these debts to happen.

You might say that the government gets revenue in the form of social security payments – I would say that’s not right – because the social security payments go into the social security trust fund, and is not a revenue for the government.

So, how will the government clear this debt?

By collecting taxes from us again!

All of us have to pay interest on the national debt.

But you know what?

Some of us might have invested in savings bonds and national bonds, which means some of the interest payment also goes to such investors.

If you are one of them, then you would want the interests to keep coming in, but how will the government get that money to pay your interests?

By again collecting some amount from you!

So, it’s seems to be a never ending story, with the cycle getting repeated again and again and the debts mounting continuously, and ultimately reaching a stage where the Congress has to do something serious about it.

As a preview to a complete overhaul of the current tax system, I invite you to download my report “Done with Cash” for free, when you apply for it.

US Deficit (2)

The US today faces a deficit that would need a lot of effort and endurance to overcome it.

There have been many reasons as to why this huge deficit has been caused over years.
Many congressional analysts have attributed it to the tax cuts and the costs of war.

Of course, the decrease in the growth of the economy as observed in the last year or so is actually caused by the continued weakness of the economy and the stock market, and if we were to believe what our economists say, these issues would continue to exist for some time to come.

While on one hand a part of the administration argue that there is little threat to the economy due to this budget deficit, on the other hand, we have the other part of the administration as well as the general public clearly voicing out opinion that this deficit is going to lead us to more troublesome times.

So, who’s to be held responsible, you might ask.

The president?
I am sure most wouldn’t agree, as it makes more sense to ascribe the responsibility to the Congress.

Need an example to support his claim?
Well, here’s one:

One of the major factors that directly impacts the cost of whatever we buy at the super market is the cost of diesel.

That’s because for you to get what you need from the supermarket, it has to first be transported and stacked there.

Transportation needs diesel, and the higher the cost of diesel, the higher would be the cost of whatever you buy.

When Congress insisted on very low sulfur content to be present in the diesel that’s supplied by oil companies, obviously it meant that more stringent processes had to put in place to filter the sulfur.
This, in turn, leads to higher costs of processing and production and that leads to higher cost of diesel – that’s how the cost of what you buy at the supermarket got increased!

Understand now, how the Congress is more responsible than just the President for the current deficit scenario?

You can download my report “Done with Cash” for free, when you apply for it.

US Deficit (1)

A looming disaster that we as a nation are going to face very soon is the deficit that has been build over the last decade or so.

What’s deficit?

Hey, if you are spending every month more than what you are earning, you know what would happen – there is a clear need to borrow from someone and that’s because there is a difference between your earnings and expenditure.

This difference is called the deficit, and just like it applies to an individual like you or me, it also is applicable to US as a nation.

So, how has all this happened?

Let’s have a quick look at the reasons that lead to this state of heavy deficit.

Years back when Social Securities were introduced, people felt happy that their financial issues after retiring from employment are being taken care of.

Those who worked contributed a part of their earnings to a fund that is to be used to pay out to those who have retired.

As the number of those who worked were more than those who retired, the inflow of amount into the fund grew, and very soon a substantial amount of deposits were created.

It’s then that the government decided to borrow these funds and take care of the expenditures like medicare, healthcare, etc.

This practice continued, and over the last couple of years, we have eroded all the surplus amount we had in the fund.

Come the year 2012, and we have all the baby boomers retiring.
The number of such retirees is going to be huge as most of them have been employed at almost the same time, and this is going to result in the requirement for more funds to put out the social securities to them.

Now, do we really have all that money in the social securities fund?

No, that’s what we said earlier, the government has been borrowing out all those amounts and using for other expenditures.

So, very soon, the requirement of funds needed by the government to meet these expenditures is going to be much, much more than the actual funds available with the government – this difference is the DEFICIT we are talking about.

So, is there a way to address this deficit?

It’s time for us all to now start doing something about this, otherwise very soon, we as a nation that has been known to be a super economic power will have to face undesirable consequences.

To be continued….

You can download my report “Done with Cash” for free, when you apply for it.

The IRS tries to contact YOU!

You might be one among the 279,000 people that the Internal Revenue Service is trying to trace and reach.

That’s not a reason to worry about – well, certainly not for the wrong reasons – the IRS is actually finding it difficult to locate and identify the addresses of all those people so that their TAX REFUND and STIMULUS checks can be handed over!

When was the last time you updated your address with the IRS? If you have not done it in the recent past, particularly after filing in your 2007 tax returns, then probably you are in for a pleasant surprise.

There could a check or two on your name, sitting with the IRS, just waiting for you to claim.

So what’s this stimulus check, you ask? It is an economic stimulus payment that you would receive from the IRS – don’t worry, it is not taxable, and will not reduce your tax refund. Also, it will not increase your taxes when you file your returns next year –sounds good, eh?

But first let’s see whether you are eligible – if you have filed your 2007 returns, then probably you are - the majority of people who file a 2007 income tax return qualify, and many who don’t regularly file a tax return may qualify as well. You’re eligible if you have a valid Social Security number (SSN), can’t be claimed as a dependent on a tax return and have either an income tax liability or “qualifying income” of at least $3,000.

Taxpayers with an Individual Taxpayer Identification Number (ITIN) instead of an SSN are not eligible to receive a stimulus payment.

If you have not filed your returns for 2007, then you still might be eligible for next year, so make sure you send in your returns next year at least.

What could be the amount you receive?

Well, the information on your tax return will decide that, but you might receive anything between $300 and $600.
If you file a joint return with your spouse, or have one or more qualifying children, that amount would go up by another $300 to $600.

In case your income is high, then you might receive a reduced payment or – sorry, no payment at all!

If you have already filed in your 2007 returns and have not yet received the economic stimulus check, then it could that the IRS has dispatched the check to you but it got returned due to change of address. You can now go here “Where’s My Stimulus Payment?“ and update your address.

Ensure that you update your mailing address at this link before the 28th of November this year – that’s the deadline the IRS has announced, as they have their own deadline of handing over all the checks before the 31st December.

You can download my report “Done with Cash” for free, when you apply for it.