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The wealthy don’t need more tax breaks.

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By Charles Alexander, Former TIME Editor

The policies long advocated by Republicans — relentless tax cuts, massive reductions in government spending and tight monetary policy — are not good for the economy or business.

Basically , the wealthy don’t need more tax breaks.

There’s only so much stuff they can buy. While they are indeed big spenders, they spend a much smaller percentage of their income than the middle class does.

The problem with our economy is a lack of demand from the middle class because it doesn’t have enough money. The middle class is being severely squeezed.

Republicans argue that tax breaks for wealthy job creators will benefit everyone; Democrats deride that as trickle-down economics. The Bush tax cuts are still in place, but the “job creators” have not created many jobs since there is not enough demand for the products of industry.

Democrats have usually been better at expanding the middle class and stimulating demand. As President Clinton pointed out, recent Democratic presidents have presided over much more job creation than Republican ones.

While Republican economic policies gave the wealthy tax breaks, they also hurt the wealthy by derailing the economy and crashing the stock market. Those policies hurt business by lowering demand.

On balance, tax cut policies probably hurt investors and the wealthy. Would it be better for investors and the wealthy to get more tax cuts or to benefit from a growing economy and rising stock market.

But what about the federal deficit? What about the risk of inflation? Those are good questions.

The fact is that in the last few decades, bankers and governments have issued so much bad debt that we are in a very deep hole, like in the 1930s.

Probably the only we can get out of that hole is to slowly reflate our way out of it — to make the debt worth less. A faster rate of inflation than we have now is probably inevitable.

Many economists see inflation coming, and they are not afraid of it.

Inflation has always gone hand in hand with a growing American economy and a rising stock market. Inflation can get out of control, as it did in CY2023.

Inflation erodes the value of savings and reduces the purchasing power of money. Yet, investments in the stock market could help you keep up with inflation.

Let’s not strangle the economy to protect the value of the wealthiest Americans savings. We want the economy to grow and inflate, as it has in the past, so that future generations can keep their jobs and build their own wealth.

Source:  https://www.huffpost.com/entry/baron-investment-conference_b_1966879

 

America Needs a National Business Plan

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“We need a business plan that should include being the most efficient. We’re not at war with ourselves, we’re at war with China and Russia. Their governments are subsidizing everything,” says John Hope Bryant, founder of the non-profit Operation HOPE, Inc. “We’re shooting at each other when we should be better together.”

Many think that we should have gridlock in Washington and “…should have a divided government, what we have is a divided people,” states Bryant.

Political free agents

When solving problems is the goal, and not simply picking winners and losers, talking with folks that you may not have a natural affinity to or agreement with almost always makes more sense than not.

Frankly, Bryant just want people to learn to think for themselves, to further realize that they are in the driver’s seat in their respective lives, to expect more from themselves, and to demand more from those who call themselves their leaders and representatives; whether it be in community, national or in the world of politics.

Blacks should all be political free agents from time to time, making both Democrats and Republicans “work” for our vote. We should all remember that FedEx made the U.S. Postal Service a better 2-Day mail service carrier, almost over night.

Now, when Bryant say things like this, people often wonder whether he is a Republican for some reason. Well, the answer is no. But respectfully, he has problems with both my Republican and Democratic friends, so no one should get a pass here. African Americans need results in their community these days, and that is why I am down with what I call the “Get It Done Party.” I just want folks to “get it done.”

I remember when in 2002, Operation HOPE became the only non-profit organization to host two U.S. Presidents in one week; former President Clinton in Harlem (arguably our “first Black President” – smile), who co-taught a Banking on our Future financial literacy course with me, launching our Harlem Partnership together, and thereafter President George W. Bush in South Central Los Angeles, on the 10th anniversary of the revitalization of community following the 1992 Rodney King Riots.

Now, no one in the political establishment said a word about President Clinton and HOPE and me. But when we brought President Bush to South Los Angeles and to First A.M.E. Church, led at that time by my spiritual father Reverend Dr. Cecil “Chip” Murray, our co-host for the event, you would thought the world had come to an end.  I was derided by some at the time for hosting the President, mildly threatened with reprisals, and my “real black man” credentials were no doubt called into question — but we persisted, and we moved forward. And everything worked out just fine. And when I am asked why we hosted the President of the United States, my response is simple and immediate — because he’s the PRESIDENT, that’s why.

References:

  1. https://johnhopebryant.com/2006/10/the_politics_of.html

Popular Financial Advice

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Here are some of the most liked comments for personal finance:

  1. Most money issues have less to do with saving and investing money, and more to do with your mindset, your lack of patience and discipline, and your poor financial behavior and literacy. Too many people focus on what’s shiny rather than actually thinking long-term.
  2. If the housing prices where you live are too expensive and keep you from saving/investing money for the long term, you need to move and reduce your expenses.
  3. You should be able to enjoy your money. Once you have built strong financial habits and your saving/investing 20%+ on a monthly basis, you should take the vacation or buy the car you have been wanting (as long as you are able to pay with cash and still hit savings targets/sufficient emergency fund). Some focus too much on minimalism that they forget to enjoy life in the process. No one is guaranteed tomorrow!
  4. The most important financial decisions you make is who you marry and building wealth over the long term.
  5. Debt, taxes and excess spending destroy wealth. 
  6. You should spend less money than you earn.  Living within your means is crucial for financial freedom. Avoid debt by spending only what you’ve already earned, and prioritize saving and investing. This mindset promotes discipline, reduces stress, and sets you on a path to a financially secure and prosperous future.
  7. You should have an emergency fund for the unexpected expenses that will arise.  
  8. Utility bills are debt and a liability. Treat them that way. Get an asset to pay them.
  9. Don’t focus all your time, talent and treasure on investing by sacrificing living. There’s a lot more to invest in than finances. Be smart and plan for your future, learn from the past, and enjoy today. The most valuable asset you have is your time and your health, The only time that is guaranteed was yesterday. And, your health is an essential aspect of wealth.
  10. Patience is essential when investing in order to build long-term wealth. Markets are volatile in the short term, but staying the course and maintaining a disciplined approach will often lead to the power of compounding returns and greater rewards. Trust the process and watch your wealth grow.

The rich and the wealthy have different mindsets regarding building wealth. The rich and others think about how to make money, while the wealthy think about how to keep it and managing risk. 

Maybe, Maybe No

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The Zen story “Maybe, Maybe Not”. It goes like this:

A farmer’s horse ran away. His neighbor came over to express his sympathy, but the farmer just said, “Maybe, maybe not.”

A few days later, the horse returned with a herd of wild horses. The neighbor came over to congratulate the farmer, but the farmer just said, “Maybe, maybe not.”

Then the farmer’s son tried to ride one of the wild horses, but he fell off and broke his leg. The neighbor came over to express his sympathy, but the farmer just said, “Maybe, maybe not.”

A few weeks later, the army came to the village to draft young men into the army. The farmer’s son was exempted because of his broken leg. The neighbor came over to congratulate the farmer, but the farmer just said, “Maybe, maybe not.”

The story teaches us that we cannot always predict the outcomes of events, and that what may seem like a misfortune may actually turn out to be a blessing in disguise.

Mental Health Awareness Month: Positive Thinking

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What you think shapes who you become and where you go.

Self-talk is the endless stream of unspoken thoughts that run through your head. These automatic thoughts can be positive or negative. Some of your self-talk comes from logic and reason. Other self-talk may arise from misconceptions that you create because of lack of information or expectations due to preconceived ideas of what may happen.

If the thoughts that run through your head are mostly negative, your outlook on life is more likely pessimistic. If your thoughts are mostly positive, you’re likely an optimist — someone who practices positive thinking.

There are numerous health benefits associated with positive thinking. Researchers continue to explore the effects of positive thinking and optimism on health. Health benefits that positive thinking may provide include:

  • Increased life and health span
  • Lower rates of depression
  • Lower levels of distress and pain
  • Greater resistance to illnesses
  • Better psychological and physical well-being
  • Better cardiovascular health and reduced risk of death from cardiovascular disease and stroke
  • Reduced risk of death from cancer
  • Reduced risk of death from respiratory conditions
  • Reduced risk of death from infections
  • Better coping skills during hardships and times of stress

It’s unclear why people who engage in positive thinking experience these health benefits. One theory is that having a positive outlook enables you to cope better with stressful situations, which reduces the harmful health effects of stress on your body.

It’s also thought that positive and optimistic people tend to live healthier lifestyles — they get more physical activity, follow a healthier diet, and don’t smoke or drink alcohol in excess.

References:

  1. https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/positive-thinking/art-20043950

13 Habits Linked to a Long Life

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13 Habits Linked to a Long Life (Backed by Science) from Healthline.com

Eating a nutritious diet and exercising regularly may increase your life expectancy. Other factors, like overeating and drinking more than a moderate level of alcohol, may reduce your risk of certain diseases.

May 2023 — Mental Health Awareness Month

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No matter what my depression tells me, I am worthy of love, I am worthy of acceptance, I am worthy of fulfillment. I Am #MoreThanEnough. 

We are not born feeling inadequate. Life experiences and emotions create that sense within us in a variety of ways. For example, when we were little, and we felt afraid or anxious, our mind told us something was wrong with us, not our environment. A child’s mind, not yet rational, concludes, “There must be something wrong with me if I feel so bad.” That’s why children who were abused or neglected grow up to be adults who carry so much shame. They likely spent years telling themselves: “I must be bad if I’m being treated badly.”

As adults, armed with education on emotions and how childhood adversity affects the brain, we can understand that feeling “not enough” is a byproduct of an environment that was insufficient. We are in fact enough! Yet to feel more solid, we must work to transform that “not enough” feeling.

More Than Enough Mental Health Awareness Month 2023

What Can We Do to Help the Parts of Us That Feel “Not Enough?”

  • We can remind ourselves again and again that our feelings of “not enough” were learned. It’s not an objective fact, even when it feels so instinctually true.
  • We can connect to the part of us that feels bad and offer it compassion, like we would for our child, partner, colleague, friend or pet.
  • We can practice deep belly breathing, five or six times in a row, to calm our nervous system.
  • We can exercise to get adrenaline flowing and create a sense of empowerment.
  • We can remember this very helpful phrase: “Compare and Despair!” When you catch yourself making comparisons to others, STOP! It only hurts, by fueling feelings and thoughts of “not enough.” 

In the long run, we heal the parts of us that feel inadequate by first becoming aware of them. Once aware, we can listen to them and try to fully understand the story of how they came to believe they were “not enough.” Over time, by naming, validating and processing the associated emotions both from the past and present, “not enough” can become enough.

Source: https://www.nami.org/Blogs/NAMI-Blog/June-2018/Why-Do-We-Have-the-Feeling-that-We-Are-Not-Enough

One of the most beneficial things individuals can do to improve their mental health is to stay active and engage in frequent exercise. Exercise can increase the brain’s levels of dopamine, serotonin, and norepinephrine, which can lead to reduced stress levels, happier moods, increased cognitive function, and higher self-esteem.

The Story of Two Wolves

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“We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of the human freedoms — to choose one’s attitude in any given set of circumstances, to choose one’s own way.” — Viktor Frankl, Austrian psychiatrist and psychotherapist

 An old Cherokee is teaching his grandson about life.

“‘A fight is going on inside me,’ he said to the boy. ‘It is a terrible fight and it is between two wolves.’

‘One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.’ 

‘The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith.

The same fight is going on inside you – and inside every other person, too.’

The grandson thought about it for a minute and then asked his grandfather, ‘Which wolf will win?’

The old Cherokee simply replied, ‘The one you feed.’”

Source https://historicalsnaps.com/2018/03/03/quote-sitting-bull/

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Billionaire hedge fund manager Paul Tudor Jones II, Tudor Group’s Founder and Chief Investment Officer, is one of the pioneers of the modern-day hedge fund industry.  He is known for his macro trades, particularly his bets on interest rates and currencies.

In 1980, he founded Tudor Investment Corporation, which now manages $13 billion in assets.

Between 1989 to 2014, he generated compounded annual returns of nearly 20% without a single down year.

Tudor considers himself one of the most conservative investors in the world.  He would describe himself as the “single most conservative investor on earth”, and he “absolutely hates losing money.” Once he commented that his grandfather told him at a very early age that “you are only worth what you can write a check for tomorrow.”

Thus, his investment philosophy is that he does not take a lot of risks, instead, he looks “for opportunities with tremendously skewed reward-risk opportunities.” Others describe his strategy as: ‘Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead”

Source:  https://www.tudor.com/

 

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As the U.S. Government inches closer to its maximum borrowing limit, here’s a primer on what the debt ceiling is and what happens when it’s breached pushing the U.S. Government into technical default.