Time To Revise Victory Over Debt

I recently received my annual social security statement and I think it's time that I revised my book, "Victory Over Debt" (copies of which are still available for $30.00 - a shameless plug, but I need the money).

I've worked almost continuously since my 16th birthday paying into my social security savings account. According to my statement, if I were to retire at age 66, I would receive about $1388 per month; only $1040 per month if I begin collecting at age 62; and as much as $1837 per month if I'll wait until I'm 70 to retire.

Although the Social Security Administration promises I'll earn about $1388 per month in retirement, consider this: If every baby boomer, 75 million of us, were to be paid only $1,000 per month in social security benefits, that would equal $75 billion per month. This is equal to one Hurricane Katrina or the Iraq War - but it would occur every month!

According to common retirement planning guidelines, we need to invest enough money in extra-social security accounts to pay us the difference between what we're currently earning and what social security would pay. If I'm earning $30K per year on my job now, and my social security pays $16.6K, then my investments in 401K/IRAs need to produce the difference of $13.4K annually. For me at this point, I'd need to invest 80% of my salary to generate this much income. What most of us in the middle class don't realize is that the 401K program wasn't designed for people like us; it was designed for rich CEOs who needed a way to protect their income from taxes. If we earn less than $180K per year, our 401ks and IRAs and social security combined are going to allow us to live the lifestyle we imagined for our retirement.

To make matters worse, my social security statement informed me that by 2017, they would be paying out more in benefits than they collect in taxes. By 2041 the Social Security Trust Fund would be exhausted and benefits would have to be reduced by at least 25%. In other research I learned that currently Social Security is in debt $10 Trillion, and that Medicare is in debt $62 Trillion! People talk about our national debt being over $7 trillion - that number is dwarfed by our entitlement programs.

In 2004, two economists, Kent Smetters and Jagadeesh Gokhale estimated that our government's obligations in entitlement programs to Americans equalled $72 trillion. This is greater than all the stocks on the global market (equals $36 trillion), and all the bonds on the global market (equals $31 trillion).

Another depressing fact is that in 2006, our trade deficit was $243 billion dollars. That means that we consumed $243 billion more than we produced. Want more? Although America enjoys the highest standard of living in the world, it's only because we're the greatest debtor nation in the world. In 2004, 44% of our national Treasury debt was owed to foreigners. I thought America was in trouble because we were loaning money to everyone else - but that's not the case! We're not only exporting jobs, we're exporting debt. And to make matters even worse, our government can't fix the problems because debt is a global problem.

We've entered into a time where the middle class is shrinking in our country. In the past we've had a few rich people at the top, a few poor people at the bottom, and the majority of our citizens in the middle. This is a healthy economy, and it's shaped like a diamond. With the shrinking middle class, we now reseamble an hour-glass. The rich are getting richer, and the poor are getting poorer. The problem is not something that throwing money at poverty is going to fix, according to millionaire Robert Kiyosaki and billionaire Donald Trump. The problem as they see it is that we're financially illiterate. We've not been taught how money works.

Depending on where you fall on the economic scale, you've learned different messages. If you fall in the poor category, you've been taught to rely on the government and entitlement programs. If you're in the middle class, you've been taught to work hard, live below your means, invest in 401ks and other investments in order not to lose, and you'll be able to play golf all you want when you retire. But if you're in the rich class you've been taught one thing - invest to win.

Trickle down economics works to a degree, but rich people have gotten richer because they understand how to invest. The rich invest in assets - things of real and lasting value. When asset prices increase, it makes assets more expensive, thus out of the reach of the poor and middle class. Rich people don't tie most of their money to stocks or bonds because these are subject to more volatility than hard assets like gold or real estate. If we had invested $1,000 into savings 10 years ago, that savings would only be worth $500 now because of inflation. If we'd invested $1,000 into four ounces of gold, it would be worth $2,500 today.

Donald Trump has said, "We could ask the rich to pay for everything, but would it solve the problem?" The answer is "No." We could require the government to raise taxes to pay our debt and fund entitlement programs, but the government is too slow and unwilling to do more than print more money and shove the responsibility for our unmanageable system onto future generations; or we can do what Trump and Kiyosaki suggest, and that's to learn to become rich so that we can take advantage of the tax laws, and determine whether we're going to be counted among the rich or the poor. I'm opting for the rich.

So, it's time to pull up my files from Victory Over Debt, update the information there and see if I can't sell enough to get me out of debt:) And perhaps enough to invest to win. The alternative is not only depressing, it's stupid.

Magic Fades

I remember back to that day in the second grade, shortly before Christmas, when a group of my classmates were telling each other what we wanted for Christmas. When it was my turn, I proudly proclaimed "Santa's bringing me a Lincoln Logs fort!" Hubert, an overweight bully, snorted, "Huh! You still believe in Santa Clause? What a baby!" Glancing around at the others, I quickly surmised that they were on Hubert's side. I might have been a slow student, but I wasn't stupid, so I immediately went into damage control and said, "Not me! My brother still believes, but I know Santa's not real....Everybody knows that." In a moment, my dream of Lincoln Logs, BB guns, and a bicycle evaporated, only to be replaced by the knowledge that my parents had lied to me about something so big! I mean, we're not talking about the Tooth Fairy or the Easter Bunny here, we were talking about the Big Man himself! What? No Santa? Might as well be no Jesus either!

Eighteen months earlier, on the last day of my first year in the first grade, we were having a class party to celebrate the end of the school year. There were four of us boys - Mike, Red, Walter, and myself, who were not being promoted to the second grade the following year. In my case, the teacher wrote on my final report card that my mind was not on my studies and that I didn't even know my ABCs yet. I was bummed out, and dreaded having to show my mother that report card. While I was in the corner having a pity party with my other three failing friends, the rest of the class was whooping it up. They got so loud that the teacher said something that gave me hope, if only for a few minutes. She said, "If you children don't hold the noise down, I'm going to take your passing grade and give it to one of the boys who failed." Well, as you can imagine, the four of us perked up! We hoped that the class would continue to raise a ruckus so that we could get a get-out-of-the-first-grade-free card. I didn't care who she took it from, but I wanted one for myself. Regretfully, the class continue to raise hell, but no pass was coming our way.

Trudging home that day, I realized that those report cards had been prepared before the last day of school. What was already written down might as well have been in stone, because the teacher never had the intention, nor the authority, to take a passing grade from one student and give to another. That day I learned that teachers lie.

The summer after I finally did pass the first grade, my brother and I were outside working in our family garden. It was our job to follow our father, who was tilling a plot to plant potatoes and peanuts, and pick up any rocks or clumps of weeds that would prevent the seeds from growing. Bending down to pick up something white that didn't belong in the garden, I discovered a sea shell - some sort of mullusk shell - but I didn't know that at the time. All I knew was that here was a sea shell and we were a couple hundred miles from the nearest ocean. Taking the shell to my father, I asked him what it was. My dad replied that it was left in our garden during the Great Flood of Noah's time. I thought it was cool to have a shell several thousand years old, but as there appeared to be a lot of them, I tossed it away and got back to work.

It was many years later that the subject of sea shells came up again. My brothers and our wives were sitting around the table talking to my mother about the house we grew up in, and the shameful condition the new owners had allowed it to become now. In place of our garden was a mass of weeds and half-grown trees, a snake-infested mess. I recalled finding those sea shells and mentioned the day when my our father told us where they came from. My mother, like Hubert, snorted and said, "Them shells came from oyster shuckings, and we threw them out there to help fertilize the garden." Now I had grown up by now, and I knew that anything that was thousands of years old should have been buried deeper than what a tiller could uncover, but it never dawned on me that my father would lie to me. Sure, he and Mama lied about Santa Claus, but about something from the Bible? What the hell!

Then, there was that afternoon we were sitting on our back porch shelling butter beans, and up in the sky there appeared the face of a lion - not a resemblance in the clouds, but a real live, technicolor face, of a lion roaring - just like that mascot for MGM. My grandfather was the first to see it and pointed it out. I looked up and there it was - big as day! My mother saw it too - or at least she said she did. I'm wondering now if I wasn't somehow hypnotized by some sort of auto-suggestion, into believing that a cloud was really a lion? A few years before she passed, Mama confirmed that it really happened, but how am I to really know? I mean, she lied about something important as Santa Claus!

I realized then that I'm a pretty gullible person. As a child, it was easy to believe in fairies and ghosts, animals that could talk, and aliens that possessed super powers. Eventually, over time, all those supernatural things were nothing more than stories to make children behave. There was no Santa, no Super Man, no "Do-Over-Life" card. And the people that I trusted the most? They are the ones who led me to believe in magic, even though they didn't believe themselves.

Maybe it was their way of paying back their parents when they found out for themselves that magic is nothing more than lies and misdirection. Perhaps they believed in the Almost Golden Rule - Do unto others what you've had done to you. In a real way, it's made me a cynical person. If my parents and teachers lie, what about those preachers? What if they're selling snake-oil to gullible people like myself just to pad their pockets ?

Faced with reality, I vowed not to lie to my kids. I taught them that Jesus was real and Santa was make-believe; Easter eggs come from Wal-Mart, not from a rabbit; comic book heros are a waste of time; and not to put too much faith in what their teachers say - especially if they are Liberals.

The thing is - I miss that time when you could lie in bed on Christmas Eve and swear you could hear reindeer on the roof. I miss having a teacher ask me what I wanted to be when I grew up, and telling me I could do anything I want if I worked hard enough for it. I miss pretending I'm John Wayne or Roy Rogers or James Bond. But some things I'm still not convinced aren't real: those monsters that hide in your closet, ET, and Elvis is alive.

The Worst That Could Happen

I'm one of those 'what if' persons. What if I'd accepted that scholarship to West Point when I was in Army basic training; what if I'd not reenlisted for Fort Gordon, Georgia a week before getting that job offer from Gulf Oil Company? What if I'd taken that radio job on the top of the Zugspitz in Bavaria? What if I'd listened to my mother and not married my first wife?

I spent July 4th at a movie (Room 1408 - it was ok) and at the lake in Creedmoor. Just sat in the car with the windows rolled down, reading Subterranean by James Rollins; occasionally looking out over the lake and watching two teenagers paddle a boat along the shoreline. I could remember back to when I was their age, when something like paddling a boat wouldn't have caused my knee joints to snap, crackle and pop. For a moment, I envied their youth and vitality...well, I still do envy them this morning. But the point is, I wish what every middle aged and senior citizen wishes - to be young again, but to know what I now know. What if I could turn back the hands of time, without losing memory of all I've learned during my 55 years?

My daughter, Laura, reminds me that if I'd changed anything prior to her birth, she might not be here today - but I don't believe any of us are here by accident, so she would have been born whether I was her father or not. Certainly, I'd like a chance to undo the mistakes I've made in life; but I don't want to forget them. Without the mistakes, I can't appreciate the blessings.

Take last week. I used a week of vacation, not because I planned on going anywhere, but because I didn't have enough money to buy gas to get to work every day. Instead of working on my job, I worked around my house. The more I cleaned, the more I realized I needed to spend more time taking care of what I have. It was nice having the house to myself. My daughter and grandson were spending a couple weeks in Georgia. I put on an audio version of Randy Alcorn's "Heaven" and listened as he described the place I'm going to spend a lot more time than I will spend on this earth. Kind of put things in perspective - sure I was temporarily out of funds, but I'm not poor; there was food in the frig and cabinets, and work to keep me occupied. The only thing I didn't drag up the energy to work on was Sea Tree.

Sea Tree has been on my mind every day since I first dreamed about it. I'm always coming up with something new to include in the book - far too many to fit inside one book. I will admit that I've asked myself the question, "What if I write this story and no one bothers to read it?" Any money I might make on selling the book is less important to me than knowing I created something that other people could appreciate. I believe we're all here to create something. And it's human nature to want our creations to be appreciated by others. Hopefully that appreciation will be accompanied by an influx of dollars, but just as important is to hear someone say that they were moved or changed by my creation. I suspect God wants to feel appreciated too. I mean, look around and see everything that He has done - even the things we can't see - like how our bodies were designed to heal themselves! What if He did all this work and no one was moved or changed by His sunsets, or the love of a faithful dog, or gave Him credit for creating the plant that provides the cure to a disease?

I believe we were all created to create something with our lives. We spend most of our lives trying to make a living and spend very little creating. What if I write Sea Tree and it bombs? The worst that could happen is that I end up just like I am now. But what if I write it and it changes my life? Now what if everyone follows their dream and succeeds? That's more like the world God created us to dominate.