7 
7 | § ¶Minimum Wage: Every State Should Pass Its Own Law
--
17 out of 50 states have their own Minimum Wage Laws (Alaska,
California, Connecticut, D.C., Delaware, Florida, Hawaii, Illinois,
Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rode
Island, Vermont, Washington, Wisconsin). The remaining 33 states
should do their socially responsible action of protecting their own
workers and passing their own laws, even if the law matches the current
Federal Minimum.
The reason I support State Minimum Wage Laws is because every state has
a different economy, and the residents of each state have different
spending requirements. For example, here in New England houses
are expensive, and utilities can squeeze a lot of money out of your
pocket during the winter months. There are other states where
winter is milder, and houses are not that expensive yet.
If we only use a Federal Minimum Wage Law, we run the risk of allowing
people in some states to live richly, while the people in other states
freeze to death.
States without a state-specific Minimum Wage Law: hurry up and
follow the example! Set a Minimum Wage that matches your local
economy! Once that happens, we can do away with the Federal
Minimum Wage Law and let the states be responsible and proactive with
their own economies. That would allow the Federal Government to
concentrate on issues that are common to all.
Read the story on USA Today (while they keep it there).
14 3 | § ¶Deposit at the Bank ... Or OWN the Bank
-- That is the question
I had some spare money that I was planing to place on a Certificate of Deposit. Ing Direct offers a very good rate (currently an relatively impressive 4.25% or 3.19% after a 25% tax bracket).
But then I considered the alternative, investing in a bank stock. What if I used the money to purchase bank stocks? What if I could get more money in dividends alone
than with bank interests? And what if I had the chance of
watching the bank stock appreciate and increase my principal (something
unheard of in a Certificate of Deposit)? Granted, it
would be a bit of risk, but maybe I could minimize it by selecting the
right bank. I was going to spend time searching for the best rate
on the best Certificate of Deposit, so I may as well search for the
best bank to invest.
I did some quick comparisons between the Annual Percentage Yield the
banks offered for a 5 year Certificate of Deposit and the dividend
yields (dividends / price of stock) today for some of the banks I was
considering. The results where comparable. Dividend yields
where even more favorable when you considered that I pay 25% Federal
Tax on Interest, but only 15% Federal Tax on dividends.
| Bank | Symbol | 5 YR CD APY | Dividend Yield |
| Bank of America | BAC | 3.75% (2.81%) | 4.62% (3.92%) |
| US Bank | USB |
3.70% (2.78%) |
3.68% (3.13%) |
| ING | ING | 4.25% (3.19%) | 4.80% (4.08%) |
| Citibank | C | 4.10% (3.08%) |
3.54% (3.01%) |
But I was not going to invest only on yields and dividends alone. I must also make sure that the company is strong enough to conserve my capital, and even appreciate a little, so that my money grows even faster. That is when I started the following analysis: Continue Reading The Article...
10 4 | § ¶Lame Excuses for Not Contributing to Retirement Plans ( 401k, IRA )
-- And their rebuttal
People know they need to save for retirement. People know the Social
Security system just provides for the basics (the green flyer they send
every year says so). Yet, most people either don't save for retirement
at all, or if they do, they start very late in life.
The US Government has developed plans that allow us to periodically
contribute earned income into retirement accounts that may be sheltered
from taxes until retirement. By starting early, and letting the
compounding effect to take care of them, a little contribution now may
mean a significant income level 20 or 40 years from now. When I ask
people why they have not maximized their contributions to the 401k /
403k / IRA plans, more often than not, I get a lot of lame excuses.
I have compiled a short list of very common excuses (and my answer to them):
7 7 | § ¶Wild and Wilder
-- Housing and Stock Markets Performance
People often ask themselves what kind of investment is better than than
the rest. Or what kind of salary increase they should get to stay
ahead of inflation. These are difficult questions to answer, as
there are many ways of looking at them. Some of the most useful
data I found has not been available for long periods of time (all
averages on this document are 1983-2004).
I have collected data for:
- Consumer Price Index (CPI) - A very good and widely accepted measurement of inflation. Data collected since 1914, and shows an actual (Dec 2004) value of 2.7%, and average of 3.12% for the time period of 1983 to 2004.
- Employment Cost Index (EPI) - Another good index from our government friends at the Bureau of Labor
which shows the cost of keeping an employee. This is a good
measure since it includes salary and benefits (like health insurance)
and other compensation. Data collected since 1980. Actual
(Dec 2004) of 3.85% and average of 3.97%. Many numbers available,
I am using the one for the private industry across all of the
nation. It doesn't take into account increased experience or
skillset for any particular individual.
- Median House Sale Price (Single Family) - Provided by the Census Bureau. The Consumer Price Index doesn't reflect one of the biggest items in our monthly payments - housing. This number attempts to represent it.
- 5 Year Treasury
- I believe this represents a medium term investment. Similar to
60 month certificates of deposit as well. 3.43% now, with an
average of 6.81%.
- 6 Month Certificate of Deposit - I believe this number best represents a good money market or high yield savings account. Interestingly enough, it has held above inflation for most of the time with an average of 5.85%, but right now is offering a depressing 1.75%.
- Standard & Poors 500 Index - A wide range selection of Stocks (by Standard's and Poors)
that should represent the United States Economy. This is the
index used to measure mutual fund performance. 8.99% last year,
11.43% since 1893.
- Dow Jones Industrial Average - Commonly quoted stock market index representing the 30 largest and strongest (according to Dow Jones) industries in the United States. 3.15% last year, 11.85% since 1983, and 6.78% if you include the depression years since 1929.
By analyzing and graphing this data we come up with very interesting conclusions.
8 7 | § ¶It isn't now much you make, but how much you keep
--
Life isn't about earning a huge salary. Unfortunately, this
society educates us to be very good employees in a stable and safe
company. It teaches us to earn a lot so that we can spend a lot
on luxuries and have a 'good life'.
I see a salary as a good tool, but not the goal. Climb the ladder, but don't loose focus of the real goal.
It doesn't matter how much you earn. What matters is how much you
keep. Earning more allows you to keep more -- but only if you are
careful about it.
7 6 | § ¶Renting a Rental Property is Challenging
--
Managing a rental property is challenging: specially when
the great tenants you have had for almost a year decide they want to
buy their own house and tell you they will be leaving June 30th.
Now we are in the process of renting our Marlborough Townhouse.