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As I said, whether you can "touch" it is irrelevant. The government can change its worth.
The only things with intrinsic value are food stuffs, equipment and land. But a quick review of history shows all of these things can be taken by force.
This has nothing to do with imagination, it has to do with reality. Most things in our society have extrinsic value, outside of our culture/society they have no value. As a result shifts in culture can change the values of these things.
Here is a simple exercise, fly down to the Amazon and try to trade cutting edge microprocessor with them for food, or hell try to trade them an ingot of gold. You'll starve. Now, come down with some shiny new knifes and you're in business.
Keynes proposed an economic theory, one that has been updated since his original publication of "The general theory of employment, interest and money". Your grandparents just had dogma, as did mine. But hey, if you want to following it go for it.
Also, economic policy in this country has been much more based on monetarism than Keynesian since around the 1970's.
Why would I avoid people of "questionable morals" if I can profit form them?
You still have not stated what sort of investments you're talking about, you know the ones you can "touch". Are you investing in cans of soup? A spare bedroom of toilet paper?
let me jump in here. first of all, if anyone had an investment "secret" they wouldn't be on the internet blabbing about it, would they?
secondly, if the wall street profiteers are such geniuses why did wall street need a taxpayer funded bailout? perhaps the 2nd time the public won't be in the mood to allow such a bailout......
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secondly, if the wall street profiteers are such geniuses why did wall street need a taxpayer funded bailout? perhaps the 2nd time the public won't be in the mood to allow such a bailout......
You may want to rethink this a bit. "Wall street profiteers" walked away with the gains while the tax payers forked the bill for the loses. Hmm.....sounds like a good strategy to me?
The public will do whatever they want, just threaten to close their credit cards.
That means that I don't trust the government not to raise taxes through the roof before I'm eligible to take the money out. I don't trust them not to destroy the value of the dollar. I don't trust them not to slowly strip away my investment choices.
That's what I'm scared of. The rules are ok today, but it's only a matter of time before the politicians find a way to 'improve' them.
I agree and since I live super frugally now and have been completely debt free since December 2004, I plan on only pulling out annually what amount is below the standard deductions/exemption totals.. no money for Uncle Sam(except property taxes, sales tax, license plates.. well you get the idea).
i also agree with sterlinggirl. the government needs revenue from the public to function and to grow.(since they refuse to do sensible things about unemployment, like deporting the millions of illegal immigrants who drain the system).
Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."
For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago. (USA today, april report)
clearly those numbers are getting worse, with increasing unemployment, and the government is trying to find ways to pull more revenue from the public now. cap and trade is clearly a government attempt to do that.
Also you could be losing a massive amount of money, not just "some". Depending on your tax bracket, you could be losing as much as 40% right from the start and then realize further loses on your gains. All for what? Being paranoid that the government is going to do something mysterious that they just as well do to standard accounts...
Agree with your posts... 401K and IRA's can be a great tax-deferred investment (especially if matched). Why forgo the potential rewards because of a paranoia that the "govt. is going to do something?" There are too many people who buy into govt. conspiracies or complain for govt. handouts rather than being proactive and taking advantage of all the market opportunities (B4 I get yelled at, I am NOT referring to anyone on this thread).
To answer the original questions: Yes, Yes, and Yes
But my "investment system" is pretty broad and diversified. 401K's/IRA's are only a piece of it. I invest in stocks, bonds, foreign currency, etc. But I also invest in myself (my education, health) so I can continue to have the long-term ability to make money. I also invest in growing my business (BTW, high contribution limits for 401K is a great benefit of business ownership). And, I continue to invest in real estate (my particular market has been up during this economy) and leverage my debt/lines of credit to my advantage. I have no problem carrying low interest debt in anticipation of higher interest returns.
In summary, I like 401Ks, I like low interest/leveraged debt, I like real estate, and I am not paranoid of the govt.... (this may not go over well with some)
That means that I don't trust the government not to raise taxes through the roof before I'm eligible to take the money out.
I understand that, and while distrust of the government it is a legitimate concern (which I happen to share with you) I believe you're missing the biggest reason of all - the company match. My company matches my contributions .50 cents on the dollar. That's a 50% return right there, never mind what money it makes for me once it gets to Fidelity. A 50 percent return on the company match is huge, and that alone easily outweighs any fear of what the government "might" do. Some companies match less than that, some more, but whatever the match, it's money none of can afford to not take advantage of. At the very least, get into the plan and contribute only what the company will match up to. Put the rest of your money into whatever else you feel comfortable with.
For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago. (USA today, april report)
clearly those numbers are getting worse, with increasing unemployment, and the government is trying to find ways to pull more revenue from the public now. cap and trade is clearly a government attempt to do that.
The government running short on money is a great reason for them to end the 401k program simply because its a huge source of untaxed revenue. With medicare and social security obligations coming due while tax revenues are falling, they're going to be looking for an easy way to keep the government running. As China and other countries continue their push to invest in things other than the dollar, it will add even more pressure to find new sources of revenue.
I really don't think it's a question of if they'll ever decide to raid the deferred tax cookie jar. It's more a matter of when they'll decide to do it. The stage already looks like it's being set with higher capital gains taxes on the horizon as well as the push for an income tax hike on people making over $200K or whatever they're considering to be rich these days. A single year disbursement could push an awful lot of people up into that category.
I understand that, and while distrust of the government it is a legitimate concern (which I happen to share with you) I believe you're missing the biggest reason of all - the company match. My company matches my contributions .50 cents on the dollar. That's a 50% return right there, never mind what money it makes for me once it gets to Fidelity. A 50 percent return on the company match is huge, and that alone easily outweighs any fear of what the government "might" do. Some companies match less than that, some more, but whatever the match, it's money none of can afford to not take advantage of. At the very least, get into the plan and contribute only what the company will match up to. Put the rest of your money into whatever else you feel comfortable with.
how did that match work out for enron employees?
(by the way, that question means no disrespect to your post).
The government running short on money is a great reason for them to end the 401k program simply because its a huge source of untaxed revenue.
Oh geez, you could say this about anything. ".....great reason to create a federal property tax", so you better sell your property today!. Go put up that for sell sign now before its too late!
Its rather clear how this admission would increase tax revenue, namely by reversing Bush's tax cuts for the wealthy.
Quote:
Originally Posted by sterlinggirl
As China and other countries continue their push to invest in things other than the dollar, it will add even more pressure to find new sources of revenue.
China has made no such push, rather the trade deficit with China has declined and as a result China has less dollars to invest.
Oh geez, you could say this about anything. ".....great reason to create a federal property tax"
A property tax would be a lot harder to pass than an "improvement" to retirement plans. Do you have any other examples?
Quote:
Originally Posted by user_id
China has made no such push, rather the trade deficit with China has declined and as a result China has less dollars to invest.
Please forgive me Omniscient one. I must have imagined that they're buying commodities instead of treasuries.
Last edited by sterlinggirl; 09-07-2009 at 05:11 PM..
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