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Friday, March 29, 2013

Rotting Our National Soul

I'm a dinosaur.  I'm a throw-back.  I'm an idealist.  And, as one of my bullion customers recently noted - only half jokingly - I'm a, "fucking idiot."

He may be right.

He recently became unemployed, and started drawing monthly UI payments.  I told him how a few years back, I had been drawing $2000 each month between unemployment insurance and "Barry Bucks" - additional money coming from the federal government.

Every day, I would send out resumes, and every day I would get no response.  No one was looking to hire a nearly 50 year old bank executive expecting a six-figure salary.  I knew I was going to have to go into business for myself if I was going to maintain my lifestyle.

The problem was, that $2000 a month made it too easy to put stuff off.  I got, "manana-itis" - why do today what you can put off until tomorrow?

I had been drawing the monthly $2000 for a year, dutifully completing the paperwork, listing the companies I had contacted for work.  It then struck me - hard - that this money was killing me.  It was sucking the work ethic right out of my being.  It was rotting my soul.

I had, at a minimum, 6 more months of payments coming - $12,000 - possibly more (I don't know if that 99 weeks of UI payments plan ever passed).  I stopped filling out the paperwork to the state, and the checks stopped coming.

THIS is what drew the comment from my bullion customer.  He was dumbstruck that anyone would voluntarily stop accepting free money from the state.

[BTW, this training business was up and booking students two months later, and the bullion business was up and running about a year after that,]

My postings have been light of late because of this sense of helplessness to stop this madness.  And the sense of revulsion.  This obscene expansion of the Nanny State.  It's like pushing a string uphill.  Nothing will ever change until it all collapses.

Why bother fighting the inevitable?  Yet, here I go again!

I'm sure you've all heard the latest and greatest - we have 14 million Americans getting disability payments [link].

Fourteen million Americans get most (if not all) of their "livelihood" from the federal government.  That is mind boggling.  For God's sake, there are ONLY 12 million unemployed Americans.  Not one of those folks on disability is counted in the unemployment numbers.  WTF?  Do the math to figure out the real unemployment rate.

On top of that, nearly 50 million Americans are getting food stamps.  Holy shit.  That is more people than the entire population of Spain.

Still, food stamps are for chumps.  Grab the Disability Brass Ring, and get a check (and health insurance) each month.  Sweet!

Not a bad gig if you can get it, and apparently, you can get it pretty easily.

From the NPR (shockingly) article link above on the rise in disabled persons -
"We talk about the pain and what it’s like," he says. "I always ask them, 'What grade did you finish?'" 
What grade did you finish, of course, is not really a medical question. But Dr. Timberlake believes he needs this information in disability cases because people who have only a high school education aren't going to be able to get a sit-down job. 
Dr. Timberlake is making a judgment call that if you have a particular back problem and a college degree, you're not disabled. Without the degree, you are.
Nice.  We have doctors out there playing God with MY MONEY - giving it away to you if you've made the choice NOT to get more than a high school education.  YOU'VE made the choice to limit your ability to earn a living, and are being rewarded with MY MONEY for doing so.

Think that's it?  Think again.  If you're a disabled kid - someone who has never worked before - you can get some Nanny Bucks as well.  From the same article -

When you are an adult applying for disability you have to prove you cannot function in a "work-like setting." When you are a kid, a disability can be anything that prevents you from progressing in school. Two-thirds of all kids on the program today have been diagnosed with mental or intellectual problems. 
Jahleel is a kid you can imagine doing very well for himself. He is delayed. But given the right circumstances and support, it's easy to believe that over the course of his schooling Jahleel could catch up. 
Let's imagine that happens. Jahleel starts doing better in school, overcomes some of his disabilities. He doesn't need the disability program anymore. That would seem to be great for everyone, except for one thing: It would threaten his family's livelihood. Jahleel's family primarily survives off the monthly $700 check they get for his disability.

Someone, PLEASE, tell me why his family gets $700 a month.  His disability has never prevented him from earning a living and contributing to the household income, BECAUSE HE'S A KID AND HAS NEVER WORKED.

If this is for special classes, or a tutor, why would the money go to the family?  Why wouldn't it go to the tutoring company directly?
Jahleel's mom wants him to do well in school. That is absolutely clear. But her livelihood depends on Jahleel struggling in school. This tension only increases as kids get older. One mother told me her teenage son wanted to work, but she didn't want him to get a job because if he did, the family would lose its disability check.
Finally, some truth.  Don't work.  Don't aspire to greatness.  Hell, don't aspire for self-sufficiency.  Just sit on your ass and collect a check.

Rotted soul and all.

Accept The Challenge

If you're a "fucking idiot" like me, the thought of living off the largess of the state makes you sick to your stomach.  You know if you're capable of working or not.  You can't lie to yourself.

If you were hurt on the job, that sucks.  Get re-trained and start back on the path to self-sufficiency.  Right now, only 1 percent of the folks that are deemed disabled get back to work.

Sorry, but that's just a pile of crap.  I am absolutely, positively certain that there are more folks on the disability rolls who aren't disabled, than there are folks with real needs.  But the takers, the bureaucrats and the politicians have no incentive whatsoever to reduce these rolls.  It's in all of their best interests to keep growing this boil, not lancing it.

When it does pop, though, it's gonna be messy.

Get off the crack pipe of government benefits before it rots your soul to the core.

For the rest of us, it becomes a defensive battle.  And honestly, probably a losing one, depending on how far down the line you are in the execution of your self-sufficiency plans.

Our taxes MUST go up.  This will be accomplished ala Cyprus by a bold cash grab, or as we do here in America, via the insidious silent tax of dollar devaluation.  We're looking at more or increased regular taxes as well.

Carbon taxes.  The IMF calling for a world gas tax.  I'm certain we will see a VAT (Value Added Tax) at some time in the not-so-distant future.

The way we combat this future money grab, is to earn and deploy more cash NOW.

If we're not buying grid electricity, then we're not paying excise taxes.  If we're not buying groceries, then we're not (going to be) paying for a VAT tax.  If we're not having to drive to a job, we're not paying oil and carbon taxes.

The road to our personal financial salvation is - as I've said a gajillion times before - to have multiple streams of income.

A new book I've been reading on the subject is, "The 4-hour Workweek".  It gives tons of practical ideas on how to build and run multiple businesses at the same time.  The key concept is, "I want to be the owner, not the boss."  You specifically design the product or service company to NOT need you managing every aspect of the business.

  • Sell something you know, to a market you know - I'm not going to sell acne products targeted at teen-aged girls because I have never been a teen-aged girl and never had acne.
  • Shrink your market, don't expand it - focus on a distinct segment of a larger market.  I'm not going to sell to all retiring Baby Boomers, I'm going to sell to, for instance, males that like guns and shooting.  This lets me focus my marketing dollars, and charge premium prices.
  • Test first - assume nothing.  The book discusses a number of ways to float a trial balloon at your target market so see if it has any viability.
  • Design it to not need you - you bust your butt building and testing the market - for a couple of months - and then step away.  You design it with outsourcing and delivery channels that don't include you running to the post office every day.
  • Repeat - 

Think like the big boys.  Start a Corporation, LLC or partnership (warning!  warning!) via Legalzoom, move to low- or no-tax states to increase your net income.  Keep each bite of the business apple a small one.

I don't want to build the next Microsoft or Ford Motor Company.  That is a magnet for taxation and third-party interference in my life.  I want a bunch of small, inconspicuous companies, each trickling a steady stream of income my way.

The key is to then deploy your newly acquired assets in a manner that will reduce or eliminate your need for interaction with the taxed world.  Arable land and the tools and resources to work it.

Here are some ideas for businesses.  Just a thought:  My generation - the Baby Boomers - are retiring at the average rate of 10,000 people PER DAY.  There's got to be a niche or two you can exploit in a group that large -


If you're approaching retirement age, read the Social Security rules for how much you can earn without being penalized.  Corporations have the ability to disburse dividends to owners.  The upside is that these "investment earnings" don't affect your Social Security payments.  The downside is that they are not a deductible expense for the corporation.  Do the math to see if there's a "sweet spot" where you can use the SSI rules to your advantage.

Trust me, the rich do it every day.

Lastly, if you're not good with numbers, fix that.  Seriously, take a community college accounting course.  If you don't know how much is coming in, where it's coming from, and how much it's costing you to make those dollars roll in, you're going to get slapped around silly.

Know your numbers.

Copyright 2013 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.


Unknown said...

Though I would prefer a private model I do not have a huge issue with the SSI model as it operated up to a few years ago.

Pay a bit of money and if you get seriously hurt you get something. Solid idea, really what insurance is for. A relative of mine is on SSI. He worked hard and make a very good living for decades and now he can no longer work due to a degenerative disease.

Unfortunately SSI is being used as back door welfare. In particular states are looking to dump career welfare types off their rolls and onto SSI to save money.

Like the multiple streams of income idea. Need to get some streams going. Sort of doing ground work now.

Chief Instructor said...

Ryan, indeed, it's a good idea to have disability insurance, ala AFLAC. We're seeing what happens with large government programs. The elibibilty requirements are lowered or changed so more of your Chosen Few are rewarded with public funds. Banks, solar power, big agri, etc. It ALWAYS gets abused.

The multiple streams is something I've done for the past 5 years or so. Now, I've got one in the works that takes me out of the work stream - just an owner getting checks. Smaller checks, but I'll have more time... to develop more streams.