Why Super Rich People Pay Less Taxes Than Poor People

I think I've touched on this previously, but I just had an epiphany as to why rich people pay a lower tax rate than poor or middle class people. I was wondering as to why they could just simply donate, shell their wealth into these companies and use every single deduction in the book to pay less taxes and finally it all makes sense.

When people get to a point of wealth where it is almost absurd you have to question the ethics of the system put in place. So why is it that they can pay at only a 8 or 9% tax rate while poor people have to pay a 15% tax rate? To say that they pay 8 or 9% off the bat is rather dubious. In fact there are people doubting Warren Buffet who has mingled with millionaires and billionaires on a daily basis.

On paper the percentages of upper class people vary per state, but these people ranges from 3% to  6%. Those high income people on paper would normally pay 33% to 35% of their income if they happen to be in either a salary or a hourly position. But hold on; it is not what it seems on paper now is it?  So how does 33% to 35% turn to that 8% or 9%? The short answer in a complicated process is financial wizardry. The United States has a system put in place where rich people are the benefactors of hidden fringe benefits. One such benefit is tax deductions.

Let's take a 35% tax rate for example: we can simply knock it down with deductions. If you are married you get a small deduction hence our system is biased towards married couples. If you have a child, you get another deduction. Not a big deal right? Well let's add another. I hear that Octomom had big tax breaks just from her kids, but obviously that would just be a ridiculous point and would probably cause a diseconomy of scale within the nuclear family. You can get huge breaks if your paying for their meals, tuition, camps, medical and dental bills. Kids are expensive, but really in the grand scheme of things: adults are more expensive.

Then we have the fact that the 35% can do these same deductions for themselves. They can also tally up their food and hotel costs too and write them off as business trips. On top of this there are tax haven investment shells like a Roth IRA, limited liability companies, and business expenses. Guess what? If they are self employed they can deduct a plethora of things from how much interest they pay on a loan to how much commission they have to pay and they get a fixed percent for tax payment. They can write off gifts, too.

It gets even better when you have employees and an actual business because the deductions skys the limit. Really it does.   You can easily whittle the costs of making extra money down to a mere 8% or 9%. Warren Buffett, without taking any deductions was able to get away with 15% while his secretary wounded up paying more. But the ultimate question that I think many people forget to ask is why does this happen? While I did analyze the upper class bracket, the super upper class, that 1% also falls under the same umbrella.

Financial wizardry only accounts for one half of the solution. The other half is because they can. They have amassed so much wealth that their bargaining power has only become stronger and stronger. If they do not like the rates they are being taxed at, they can simply leave. Their wealth is beyond a point where they are bound by citizenship. They can easily vacate if they feel they are overtaxed. That being said, you should take a look at these companies that change teams. Some of them you might find shocking.  After all when your rich, does the concept of being loyal to a country mean anything or is it just a mere notion to entertain the masses?

Of course not all of the super rich fall under this category. There is still a portion of the super rich that pay their fair share and do not abuse the system. There are still some that do not over deduct themselves to the point of absurdity. Let's face it. Taxes are necessary for the functioning of public goods and services and it keeps government and public sector employees paid.

It is not too late to still get this:

With hard work and determination you can have both of these. This is still a possibility in America.

The fact remains that the rich will always be taxed at a less rate than poor people. They have the power and clout to leave. They can also cut jobs if they feel they are overtaxed. It is futile to complain against a deaf entity. Your cries will go unheard. The best thing to do is work within the system and break away from it. Since I have became middle class, I have been less stressed and I have been able to focus on things that actually matter outside of saving like my health. More times than not, these entities have a high amount of debt to go with their wealth. It is arbitrary for them, (not for us) to control their spending. I would say, do not spend the time hating these individuals even though it is the easiest course of action. I would rather say you should try to not fall victim to their umbrella, by straight boycotting their products and their services. A lot of the super wealthy became so via financial institutions and companies. If they are not going to be good neighbors and pay their fair share or if you think they are not doing their part, do not invest nor contribute to their wealth. It is as simple as that.

Gosh with all this percent battles and political intrigue, I wonder what he would say about the 1%?  He would probably consider them a necessary evil.

The Market is Down 346 Points; Exploit It!

I love how everyone is getting scared the Greece's economy has gone belly up. It has dropped the overall value of stock, but remember it is only temporary. You can actually make quite a bit if you were to find a stock with a moderate amount of volitility and ride it out of the scandal. The market will recover no problem. All things being said and done: you should probably target the small cap stocks for the biggest returns; the growth/blue chips for the steadiest returns.

Buffett said it best, "Be greedy when others are fearful and fearful when others are greedy". There is a ton of money that can be made during the next few days; might as well start shoveling.

Buy and Hold

A few days a go I talked about "penny stock" investing; now I am going to talk about my main strategy: Buy and Hold. First I would like to explain the difference between "Day Trading" and "Buy and Hold" is because this is really important to understand. Most people out there will invest without strategy and they will be out of the game as fast as they got in. So they have to understand these terms in order to be a saavy investor.

Day Trading is when you watch the market and try to trade daily. You will want to wake up early, turn on the computer and begin trading and exit at a certain point. The ones that make the most money are the people that have the means to buy in bulk and have a entry aand exit strategy. Take penny stock ABC at 50 cents. You decide to buy 2000 shares for $1000 want to exit at either 55 cents ($100 profit) or 60 cents ($200 profit) they way you would accomplish this is to set up the computer to buy at point A and sell at point B to maintain profit.

Buy and Hold however is geared more towards long term/value investing. You can actually use buy and hold for day trading as well, but it will usually be when a stock isn't performing as planned, but you might anticipate the stock to go back up. That is when buy and hold becomes useful. Another way is to buy at point A and sell when stock exceeds an anticipated growth point, but it will usually be over the course of years. Buy and Hold should also be the main strategy for dividend investors. If an investor is anticipating a dividend, they willl usually buy a few months a ahead of time when the stock is "soft" and hold on to it for the dividends. Blue chip stocks are great ways to make money from being able to sale it and re-buy it because most usually operate in a channel econommy and then slowly rise. When a blue chip becomes too costly to just buy and sale, you can change your strategy and just hold the stock indefinately for lifetime dividends. Also you can take your profits and turn around and get another stock and hold on to it. In the long run, you will want certain dividend stocks that will pay out to hold on to and just have them as your war machine stocks. Verizon is a good one in this instance because it is paying out good dividends and it is below half the price of the WMT (which is at $52ish). And when people stop using cell phones, it might take a it, but I highly doubt that will happen in my lifetime.

Verizon is also partnered up with the makers of Droid and Wal-Mart anyways and will continue to put the hurt on ATandT in dividend payouts. Right now ATandT is one of the highest, but VZ is definately a rising star. If they can get Apple to make the Iphone more readily available to the consumer then they might continue to hold that place in the market, but VZ is also getting into internet infrastructure as well so I see fierce competition between the two.

Another strategy to buy and hold is to buy and simply hold a stock. Andrew Yanyi and Warren Buffett were excellent value investors, but the difference between the two is that Yanyi was able to obtain the "next blue chip" through his heavy research. Buffett, buys not just on research, but on overall needs that are not going away. For example, Buffett has been known to buy tobacco stock, Coca Cola, Wal-Mart stock, and energy stocks. He mainly buys those stocks, because they usually pay good dividends and they have the ability to constantly perform well due to their intrinsic needs. (i.e. people are addicted to cigarettes and soda, people need cheap clothes and food, people have to have electricity) The overall strategy is to hold on to the stock so as long as it upholds its value. If there is publicity against a certain stock (which isn't really going anywhere) the goal is to aquire more stock. As Buffett puts it "Be fearful when others are greedy and greedy when others are fearful". When the stock is considered "overvalued", only then, do you sell the stock. That is why Buffett is one of the masters of the trading game. He only sales a stock when he feels it is overvalued. Although there are times when he has done this while it is undervalued, it is rare and is probably a miscaluation on his part (hey no one is perfect).

Remember, Buy and Hold strategy is far superior when implied in the long run. Only patient penny traders will be able to implement a successful buy and hold, so please keep that in mind.

What Type of Investor Are You?

When you get your frugality down, you will have the edge on the competition. So are you a day trader who plays the market like the crap tables, going all in on a penny stock, the value investor like Buffett, a master manipulator like Soros or do you have a conservative style of the typical buy and holder? Whatever fancies your style, you need a strategy in order to invest.

If you were able to take the money you saved and make it work for you, that would be ideal. But, if you are started out doing it, the best thing to do is probably hold on to your job and invest conservatively at first, but as you make trades and investment deals, you need to be prepared to build up for the next big thing. I have been able to take this mindset and run with it. I would suggest saving up to ten grand (like me) and then get your feet wet in investing heavily. You can out forth small amounts of sweat equity or try to invest passively per paycheck. If you happen to make around 3-4K a month, I would suggest trying to build up contingency investments like a 401K or a Roth IRA in case if things go sour. I would say that most of your saving should go towards the next investment, but  conserve at least 50% of your cash for other investments.

If you are young, I would say that you should be prepared to fail first. I am not saying go out and totally lose your money, but be prepared to bounce back from losing. Losing is not a part of anyone's strategy, yet no one prepares to lose. Most people are usually wiped out of funding by their first venture or in less than three years. The way to counter loss is to have a nest egg. Who knows, you might not make a profit until the second or third year. That is usually the case for big box retailers. I am not saying stick it out if your losing because the only ones that can really do this is corporations like Wal-Mart or Costco.

Now if your in it to win it, remember one's personal investment style will not lead to success by merely mimicing the style of the gurus; you need to branch out and find your niche. While my style is value investing and buy and hold, it is still evolving. Who knows, it might switch to a growth stock, penny share strategy. I am finding my niche as well. And it will never be complacent with just stocks; I want to invest in other areas as well. So what type of investor am I? Probably 60% Buffett, 20% Vulture, 20% Dividend Investing. I will never truely know how one guru totally thinks, so why bother trying to emulate their success. I would rather become the guru by replicating success.

Beware of Aim Trust

This is one of the messages I received from another blogger. I was skeptical as usual and never take anything based on just face value. Although theoretically you could make that kind of money quickly, more than likely it's not likely unless it is something illicit, meaning illegal. Luckily no one ever has to worry about this poster ever again because I am about to debunk Aim Trust because obviously this/these blogger(s)  is/are affiliated with them. I have been approached by multiple "get rich quick schemes" which there will be more of these in this ailing economy. Now if they wanted to legitimately do something besides scam me they would have not left themselves be totally anonymous to me. It is just bad business to not introduce oneself. In case if you're wondering how I know this person is a scammer, feel free to go to the site and read the content. Looks like a bunch of testimonials directed at Aim Trust. Here is the post:




Hi!

You may probably be very curious to know how one can make real money on investments.
There is no need to invest much at first.
You may begin earning with a money that usually is spent
on daily food, that's 20-100 dollars.
I have been participating in one company's work for several years,
and I'm ready to share my secrets at my blog.
Please visit blog and send me private message to get the info.
P.S. I earn 1000-2000 per daily now.
http://theinvestblog.com/ [url=http://theinvestblog.com]Online Investment Blog[/url]



A good way to avoid scams outright is to type in the affiliates names into a search engine and see which keyword trends show up with their names. For example, if  I type in Wal-Mart the words associated with their departments show up along with the layoffs (which normally it wouldn't but I did a search on the layoff news) would appear. Another thing  is that a company that is looking to scam people focuses on getting "big gains" in a short time. And when its online it is usually under some euphemism like HYIP. What is all the HYPE about HYIP? This stands for High Yeild Investment Program. Sounds familiar? Remember Madoff and the boys on Wall Street? They took many a high profile client to the cleaners using a HYIP similar to this. No stock out there has ever had a continual upward arc on their graphs in profitability. Note: if there is a person that is boasting about earning 1,000-2,000 a day using only one affiliate, either they had some pheomenal luck or they are scammers. This is reeks of a scam if you know the laws of marketing and how to measure the success of online marketing.

Here are a few simple steps to find out if Aim Trust is "legit".

 1. ) Go to www.whois.com and put their official website in their search engine and it is a "proxy".

 2.)  There is this insistent need to include Aim Trust in every other sentence. No true investor would  be earning money from using  just one source of income. That is just dangerous. Depending on just one source of income is like depending on a job. For example: I work, sell used stuff at home, invest in stocks and I have gone through a real estate deal years back with gives me a small amount of income for a "finder's fee". I am about to invest in more stocks this year along with opening up a Roth IRA in a few months. No true investor, and I mean no true investor has all of his money coming from one source which it advocates on the site. This is risky and you should not invest in that way. At the same time you should not diversify too much and buy 30-40 different stocks. Most successful stock analysts usually recommend only a few stocks which have nothing to do with mutual funds although there are some who do like them. I am not one of them, but I will say that they are more legit than anything Aim Trust will try to sell you.


3.) Since the website is so good at SEO optimizing their branding Aim Trust. I  thought I would "help" them out by doing some of my own. Aim Trust is a scam. Aim Trust has random people trying to spam my blog. Aim Trust and all the lackeys under it are probably scammers too. If you invest with Aim Trust you will get taken to the cleaners. If you want a High Yeild program besides Aim Trust, it will take some serious research. Aim Trust can only offer you promises which they cannot keep. I have yet to meet an investor near the level of George Soros, Warren Buffett, and Andrew Yanyi give high praise about Aim Trust. Aim Trust is a power level scheme corporation who leaves their identity a secret. You cannot get accurate numbers on Aim Trust's  research. You can only get scammed by Aim Trust. Aim Trust only wants to see you become broke. Aim Trust is like a magical unicorn out in the forest which people chase after. So elusive yet it must be real...not!

I think I am driving home the point about Aim Trust so I will conclude here. If you have stories about being scammed by companies similar to this, I would  love to hear from you. Real comments are appreciated.   
 

Quick Response: Kiplinger 2010 Stock Reprt Special

I would like to say this tidbit of stock info is only $4 to get the opinion and analysis of several different pros in the stock game. It actually gave me some new concepts when it came to consider the perfect company to invest in and it crosses over into frugality nicely. There were some consistencies with the stocks I have read up on in the review, many of which discusses the principle in which you should be stock.

One of the things it advocates is search for a company that has little to no debt! The say this is calculated is assets minus liabilities for the duration of ten years. This is textbook Oracle of Omaha bidding. Buffett uses this same principal to weed out the companies with overall negative earnings. For a ten year duration is good to measure the company's debt. The best way according to Kiplingers is to "try to access the this record through publicly traded stock". The ones with privately traded stock will be harder to track their debt.

There has to be consistency in how the earnings are reported. If those numbers zig-zag and fluctuate and there is inconsistencies in the debt reports, there is too much volatility in its earnings ratio.

To buy stocks your overall personal portfolio has to be the same to be able to buy the stock. To buy more stock, you need consistant earnings. To do so it is recommended that you live a frugal life style and invest over 10% per month until you have built a small nest egg. Once you get that nest egg, then you can start investing in a more aggressive manner so as long as you do the research. Without doing research on a company's profile, you are no longer investing; you are gambling. Keep that in mind when choosing stocks for your portfolio and Happy New Year.

Advanced Frugality

When people reading this, they probably think that credit in general is bad. I digress I at this note because credit is not "bad" per se. In actuality credit can provide you with the opportunities to make investments thus being able to increase how much money you make. The technical term for this is residual income. If you have mastered everything in the previous posts, you will be able to take this essential step to financial freedom: using your money that you saved so earnestly to go in on investments.

I alluded to this in the last post intentionally to drive home the idea that saving money is only one attribute to frugality. Anyone can save money as I have shown you. And also it does not depend on how many kids you have either (albeit it will be harder to do so if you have a lot of children). There was a family that lived on $35,000/ year with a working family of two. Typically nuclear family. And guess what they did with their savings? They reinvested the money in publishing a book. And now they live the American dream and do not worry about bills. Now how did they do this? They saved their money and reinvested it. Like saving money, investing is not rocket science nor does it have to be hard.

Saving Money Will Only Get You So Far

I say this mainly because there are people who are afraid of investing. Investing does not have to be risky. But you need to acquire knowledge about how to invest. And never invest to the point where you are in a fiscal deficit. Last year I made a conscious choice to become an investor. First I started out with a public retirement fund at my old job. I did not like the returns in the fund so I closed it an took the money and saved it.

Now, I am investing in precious metals and blue chip stocks due to market trends and I have already seen a return on my investments. When I say trend, I mainly mean going against the trends or counter-trend investing. If the investment is trendy, the investment could be over valued. As a frugal investor, over investing is a big no-no. Here let me explain why.

I also have collected old war relics and trading cards. I even lost big.At one point I bought the Alpha Edition Black Lotus card from the game Magic the Gathering. I was pressured by the owner to give up the card and forgo it for three whole boxes of MTG trading cards. I bought the card for $220 and sold it for $270 in value. However, if I had held on to it, I would have made $2,000 from the transaction. Mind you I was only 13, but even then I was thinking about investing. However, it is probably best to say "I wish I hadn't" than, "that I wish I had". While my instict here told me not to sell the card. It was nonetheless risky because the card could have been worth $5, just like a lot of the Pokemon trading cards.

But I move on. There is no such thing as the perfect investor. However there is such thing as a prudent one. There are going to be failures along the line. Even Buffett is having difficulties with his current businesses. With the economy Berkshire Hatheway reported record losses, but does that mean Buffett lost money? No his investments did. While yes in a sense he did lose, he did win by "watching the basket full of eggs". While I do not have as much money as Buffett, I am not afriad to lose because I follow a strategy that emphasizes not losing money. (By the way that is one of Warren Buffett's golden rules.)

How To Take Budget And Set Aside Money For Investments

There is only one thing that holds people back from achieving financial success: themselves. When I mention furgality being a science, I mainly mean being able to apply its application properly. Saving money is one part. In fact, those of you that understood the property of successfully setting up a budget will understand this concept. Your going to want to save up at least $2,000 to get this off the ground. Once you saved up this amount of money, you will want to not spend this and fractionalize whatever earnings you have towards this goal.

There is another way to go about investing and that is just save up a lump sum and go in on an investment outright. I prefer to do the aforementioned, earning small victories along the road and gain momentum for the "big deal". There will be plenty in a span of 70 years. There are really no "once in a lifetimes". For me L-U-C-K, is often mispelled W-O-R-K, meaning that you will have to have the self motivated mindset that drives people to succeed. I will discuss the advantages and disadvantages of both, but first I would like to discuss why I said not to spend that $2,000.

The $2,000 is really a buffer that protects you from failure (and homelessness). You need money to fall back on. And this amount should be $2,000 if your single. (This number should really be around $5,000 if you're married) For one, there is no assurence that things that you invest in will not go awry. When you start out, things can and often will go awry. As a side note, the amount should be significantly higher if you live in a high cost city like New York or Hollywood. For regular cities like Reno, or Cleveland, or Highland this is a good amount.

When you obtain the set amount, you should fraction about $200 for every $1,000 you earn. Obviously you will probably invest in either collectibles, stocks, precious metals, or yourself. However, that is $2,400/year/per $1,000 that you can use toward either having a small business or investing. Either one will lead to profit, although the returns from investing in a small business will be more profitable at first. But once, you find something that succeeds, replicate the results until you are ready to go in on a big deal.

Option 2 is you set aside 20-30% of your annual income and just buy a business. Most people cannot do this right away. The figures for regular 9-5ers are around 17-20K. With just Sam's Club, I only make about 18K. However, let's say I wanted a small time burger francaise, we will call it Burger Barn for the purposes for keeping the topic fresh. Burger Barn wants 16K to start out. I will have to set aside roughly 5.5K in order to franciase with them. Plus I will have to probably go in on a lease. It will be a lot harder on my meager "salary". But lets say I wanted to look for a better job and I landed a 5K/month ideal college gig. That would be 12-16K for the range so ideally, I could do this within 2 years no problem, but I now have to take a huge blow to my account.

Getting small investment strategies along the road would build up residual income for the purposes of having the "big deal" in a quicker amount of time. While I do sit on things, I believe that only a fraction of your money should be spent towards making more money. It is never safe to assume risk. But when you get to the point where you find your niche and decide to reinvest. The best way to go about doing this is to reinvest your profits plus the amount you obtain from your job until and replicate the results. Successful investors invest in the same thing over and over again. They hardly ever deviate unless they understands a investment.

Budgeted Investments Is What Motivates Frugal People Into Being Frugal

I have to say the best investments I ever did were not in the bank, but on paper. You need to invest in yourself first whether it is in knowledge, time, or money. If you need something that you know will give you more money. (i.e. a class on tax preparation that will give you a comissioned return) To be able to take what you have read and turn it into profit is an ideal application. But do not expect to be able to buy stuff and get a return. One you have to find the market first and, two, you need to able to turn your market into revenue. I have to say, when you invest in yourself the returns are tremendous. You make yourself a more rounded person along with becoming saavy at investing. Budgeting and being able to save huge amounts of money is only one facet of being frugal. The art of frugality is being able to take all that you have saved and live a fruitful, meaningful lifestyle, of financial independence. The science of frugality is to do this, calculate your assets-liabilites and divide that by a certain percentage and take the difference made and RE-INVEST, save more, replicate and repeat.

Frugality 102

Did everyone take good notes? I sure hope so. After all it is more productive for me to take a nap than to maintain this website. It saves me time and money. I am in the middle of a few investment deals and in the process of being richer than what I am now. I will elaborate later like the evil genius I am but I rather go back into my special on Frugality.

It really is a science to be frugal. Do not take my word for it; invest in or "download" Quicken to show what I mean. Honestly, I could care less how you obtain it; just try it out. It is a program that is geared towards saving money. it has been on the market for years and it is no "secret". Since there are a bunch of sheeple that are either a) broke or b) in debt. I have decided to write this blog because I was tired of writing all these blogs on different websites and I wanted to help people.

This session of frugality is more or less about reducing complications to the basics. Frugality is a art to me. I live to save money and re-invest it. In fact nothing gets me more depressed than spending money in a manner that makes me less wealthy. And nothing gets me more riled than having "dead-beats" trying to cipher off of my blood, sweat, [brains] and tears. In frugality, you heard the madness, now onward to the method.

Frugality Continued

So you keep hearing about these layoffs and these scandals. Bankers are taking bailout money used to stimulate the economy and use it towards themselves. Like no one saw that coming right? Yeah, and I put the Statue of Liberty up on EBay. There are people like this out there that want your money. They often scam you with credit deals and mutual funds. This nation is being run by people that sell us credit and are mutually broke. In this issue of frugality there are some basic steps to adhere to, to simplify your life. Who are you going to start listening to? Your co-worker who "lives" paycheck to paycheck. To me that is a bonafided wage slave. If you want a fancy college word for it, corvee labor is a notable substitute.

Debt works in cycles. you accumulate it, you gather more of it, you put it off, and your broke again until then next loan. Like I said frugality is not rocket science. It is just doing the opposite of this. Now I am going to talk about frugal investing.

Warren Buffett and Sam Walton are two of the most effective cost analysts. They analyze risk and they do not spend more than their means. Now you might be thinking that Buffett and Walton are elitists, but I would counter that with a definite nay. They both grew up in the early 1900's, were by products of the 1930's great depression and build empires on frugal saving. They built their empire on saving and reinvesting. You have to master one to get the other. Do not fret: CB is here to help you save money.

If you read frugality 101, I talked about keeping a budget. For those of you that do not understand what that is, should go back and re-read the section. Keeping a budget is integral to this current assessment. We are going to get into simple budget analysis-and help you save more money by doing so.

When did I stop living paycheck to paycheck? Very recently. In fact, last year, I had a job that was out in the boonies, I took a bus in order to get there and I ate out a lot. I was saving money, but the amount that I was saving was rather pit pat. I was living roughly off of $600/month while making sometimes less than that. While it is nice to save money, you need to make more money to save more.

While we are still in a recession, there are also still jobs that will raise one's income. If you saved money and landed a full time job, just looking for a better job should suffice, but the ones that are trying to move into full time work should read this session. In you are currently doing temp gigs here and there, you can actually obtain something from here too.

Cutting Expenses

So how did I get out of my rut? Well I should say, it was not easy. In fact I am still getting out. The one thing that should be noted, is being broke and relying on a 9-5er is the some of all fears. People say it is risky investing, but in actuality moving from job to job is even riskier. There is a probability that you could burn bridges with your old employers, but unless you made this epic impression on them that they will not be able to forget you, chances are, unless you keep in contact with them or work in a company for a long time they will.

When I was working for the City of Reno Parks and Recreation I would have to take multiple trips to a school on the Citi Center buses. The trips literally took 4 hours of my day just so I could work for 6. I would also have these time gaps where I would be free for 4-6 hour periods. Good for college and high school students, bad for graduates. While the hourly pay was ok, I was lacking in a location that was a short distance and paid more.

Using my same level of expenses in Frugality 101,


600assets-600liabilities= 0 aka breaking even.

Time is Money

True, I could have gotten another part time job that would of balanced out the difference in pay, but that would be a place with odd time constraints and possibly more expenses, depending upon location. So what I am trying to demonstrate here is that time is a form of currency. In lay man's terms: Time is money.

Time was of the essence. I applied at over 40 different firms. Based off the calculations, 80% of the employers will not be interested in what I had to offer, while 20% would be. First I worked at Integrity Staffing, which was a temp job at a billion dollar job firm. I was making a month's pay within a week, but I had to make ends meet and this was temporary. Later on I was hired at Sam's Club and it has been history since. Currently, I am both working there and investing on the side.

And I got in at the perfect time: right at the start of the 2008 hard recession. America officially declared it then, but we have been in one since 2007, though most people who do not read would argue with this. So while time is money, "timing" is golden!

Monthly Budgeting
Being in a 9-5 provides a source of income, it is stable so as long as there is not mass layoffs. I need not worry too much about this because I have invested well. There is a lot of risk however. People get stressed, mad at each other, tempers flare, mass layoffs and firings happen. Not everyone will get their "dream job". Statistics show that 70% off all people who graduate from college with a degree get starter jobs that do not relate to their vocation of choice and pay less. I certainly was no exception. If this is you then fear not, there is some light at the end of the tunnel.

While most people start out at low wages, it does not have to be that way. "Low Wages" is all in perception. While I am no Donald Trump, I do not live from paycheck to paycheck. I make sure I have liabilities lined up. For those of you that took on a huge loan, I suggest making bare minimum payments, until you have mastered the later lessons of this special. Take it from me, you do not want to fall behind on loan payments. That is more money you will have to fork over to the system. If you are working at a small business as your start up job then, try to take out your debt by setting up payment schedules on your calender. If you can arrange to accept checks "off the books". Some people will probably agree to this, while others might be more skeptical. Insted of paying extra tax for earning a specific income, the best thing you can do for yourself is to pay the bare minimum and obtain tax free oppertunities. This will add to your money budget and will have keep eggs in the hatchery.

The other formula to this is that you have to be able to keep eating out, electronics bills and other stuff that does not matter low. Do you need Micky'Ds? Do you need a Sony Bravia? Do you need a new Fender Starcaster? If you can justify a eleborate reason why you need it (i.e. you want to start a underground band or have not ate there in a year) then my answer is you probably do not need it. This is not the needs of a frugal person. This is impulse buying. We are all victums of it and this attidude needs to be curved. You need to cut all doodads or bobbles from you budget and, invest $10/ week toward your item that you cannot "live" without. Ate that point you earned it and owe it to yourself to buy your LCD or new video game console.

The final formua is to wipe out bad debt and reduce necessary debt. Reduce those phone bills and opt out of those contracts and go with pre paid programs. If you can, share resources with a close friend of relative. This behavior will curb spending. If you drive a car, either carpool or just walk. If you live a long distance from work, buying a monthly bus pass might be another viable solution. Go to warehouses and buy in bulk: the savings in the long run will exceed the amount you have spent on food. Costco or Sam's Club should provide you with a chance to buy bulk goods for a membership fee. It is an excellent way to shop for gorceries and supplies.

Do Not Associate With People That Want Loans

This is one of the major attributes that keep people broke. I have three years experience in loaning out to people. I always get collarteral. If you are trying to make ends meet, you should read the subtitle at least five times and heed the advice. I am only elaborating so people do not ask why you should not loan out money.

First of all, people that borrow money usually do so without a contract and with feelings. The problem with the process is that the debtee also pays back "when he/she feels like it" if at all. Instead of dealing with dead beats, the best thing to do is avoid those people like the plague or lie to them and say you're broke. What I like to usually do is ask people for money back to drive home the point. That usually drives home the point that you are not interested in what they are asking for, but are self centered. Who cares though. These people only want your money and once they get it, they usually do not even associate with you afterwards unless you are dense enough to do so. Also when money is involved it often questions "friendship". Let me drive home one point: friends do not ask friends for money. I do not have anybody asking me for money as a friend. In fact I have had situations where I had to rely on "friends" to pay their share of the rent. It fell through and I had to pony up. Luckily, I had money saved up to sheild me from their stupidity and bad money management. Lesson learned and life goes on.

Frugal people are often creative and think about either saving or investing at least 30-80% of the day.

Does this fit you? If so read on. If not, just stop reading and continue to be a wage slave living pay check to paycheck. Just kidding. You can change you mental pratice by applying what has been discussed in Frugality 101 and Frugality 102. Often I think about what percentage of my monthly income is leaving the hatchery. That is how I think. And like Buffett, I often look for ways to grow my money. While compared to Buffett, the amount I have saved up is rather meager, but compared to non frugal people it is often immense. Most people buy stuff that loses value and is often beyond their means. And while there are good and bad investments, I do not have any fear as opposed to a LCD that loses value and becomes worthless once it is taken out of the store. I do not even fret losing money on a deal, while losing on something that has no value makes me depress. If you can understand this, you will become that much more frugally literate.

Put WMT on the List to Buy

WMT is finally going down! Now why would I be excited about this? Am I not trading in WMT? Yes, but alas, I want to be able to buy more! And boy I think my wait is almost over. I have been anticipating WMT to fall below $50. The market for awhile was actually reaping small returns for the people who "got in early". But now is a excellent time to buy if you want to get started on the momentum.

You see, during the holidays, retail tends to out perform other industries. And stock analysts have been correct in presuming that the market will not be as strong as last year. However, they did not think that Wal-Mart will just peak at $57. They were hoping retail would stabilize the economy. This, in fact was an impossibility and it goes back to the fact that most retail chains with the exception of Wal-Mart are primarily in the United States. This does not mean that the fight is over. It just means that the market is adjusting itself to the recession. It will be like this for a few years so might as well start buying while the buying is good!

At this point in time Wal-Mart is at $49.17! This is primarily due to the fact that a lot of people sold at $57, but now is the chance to buy WMT! I would start buying some now. When it drops lower, I will start buying 2 shares per paycheck and with the company covering 15% I will be able to obtain more and more fractional shares. There is a reason investing super genius Warren Buffett, is also in WMT. That is primarily his blue chip stock. He honestly is into stocks with a continual demand.