The Dollar Heyday Is OverWritten by John Finger
Money Matters December 18, 2003 Presented by The Money Management Firm, Inc. www.moneymanagementfirm.com eBay ID: optionsforyou The Dollar’s Heyday Is Over _________________________________________________________________________________________ PAYCHECK GUIDE: The following helpful guide has been prepared to help our employees better understand their paychecks: Item Amount Gross pay $1,222.02 Income tax $244.40 Outgo tax $45.21 State tax $11.61 Interstate tax $61.10 County tax $6.11 City tax $12.22 Rural tax $4.44 Back tax $1.11 Front tax $1.16 Side tax $1.61 Up tax $1.08 Down tax $1.14 Tic-Tacs $1.98 Thumbtacks $3.93 Carpet tacks $0.98 Stadium tax $0.69 Flat tax $8.32 Surtax $2.23 Madam tax $1.23 Corporate tax $2.60 Parking fee $5.00 F.I.C.A. $81.88 T.G.I.F. Fund $9.95 Life insurance $5.85 Health insurance $16.23 Dental insurance $4.50 Mental insurance $4.33 Disability $2.50 Ability $0.25 Liability $3.41 Coffee $6.85 Coffee Cups $66.51 Floor rental $16.85 Chair rental $0.32 Desk rental $4.32 Union dues $5.85 Union don'ts $3.77 Cash advance $0.69 Cash retreats $121.35 Overtime $1.26 Undertime $54.83 Eastern time $9.00 Central time $8.00 Mountain time $7.00 Pacific time $6.00 Time Out $12.21 Oxygen $10.02 Water $16.54 Heat $51.42 Cool air $26.83 Hot air $20.00 Miscellaneous $113.29 Various $8.01 Sundry $12.09 ------- Net Take Home Pay $0.02 Since 1944, U.S. dollar has been respected as world’s most stable, valuable and useful currency. It has represented freedom and opportunity. Now, unfortunately, that era is coming to an abrupt end. The Bretton Woods agreement of 1944 established U.S. dollar as world’s reserve currency. Not only was it currency of richest victor of World War II, but value of dollar was tied to gold, ensuring its value over long term. Then, on August 15, 1971, President Nixon took dollar off of gold standard, an epochal change after more than two thousand five hundred years during which money had always been based explicitly or implicitly on a precious metal, prevalently gold. Gold acted as an anchor both for monetary system and for economic system by making maintenance of parity a constraint on economic policy. Now anchor was away. The dollar became a fiat currency, meaning there was nothing standardized by which people could judge its value. The government became free to print as much money as it needed in order to fulfill its obligations. Not surprisingly, inflation took off like a rocket after Nixon’s action. Inflation was only halted by high interest rates, complements of Federal Reserve Board. Soon after inflation came under control in 1981, huge budget deficits of Reagan years came along. Those budget deficits have snowballed with each passing year into an alarming amount of federal debt. They continued through Bush 41 and early Clinton years. A booming economy during later Clinton years allowed government to balance books and even run a surplus. Chairman Greenspan was even talking about negative implications of paying off national debt! That’s one problem we don’t have anymore. President Bush 43 and Congress have allowed debt to spiral out of control. The 2004 budget deficit should be nearly $500 billion. As of December 15, 2003, U.S. has accumulated $6,935,737,372,166.74 in national debt. That’s nearly seven trillion dollars, or $23,684.72 for every man, woman and child in America. How will government pay for all this debt? In short haul, government pays for debt by issuing U.S. Treasury securities. In other words, Fed prints money. When they print money, value of each dollar decreases. Investors gobble up those securities and think they’re placing their money in safest securities around. If investors are to be paid off, they will be paid in less-valued dollars. It’s like a game of musical chairs: Feds use money from freshly-issued Treasury securities to pay off old ones and finance interest on other bonds. The government must issue more and more securities and money with rising deficits. This game can go on for a long time and has already done so. But everyone knows what happens when music stops.
| | Small Business Q & A: If It Was Easy Everybody Would Do ItWritten by Tim Knox
Q: I started my business about a year ago and everything is going fine. We're growing and making a profit, but stress of running business is really starting to get to me. I spend more time worrying than working. Sometimes pressure is almost more than I can take. I'm starting to think that I'm not cut out to run my own business. Do you have any advice that might help me decide what to do? -- Steven S.A: I'm full of advice, Steven, and it's totally free. Just remember, you get what you pay for and I can't be held legally or morally responsible if my advice somehow lands you behind counter at McDonalds. I'm not Dr. Phil, for petesake. I'm shorter and have more hair and less money. Seriously, first thing you need to do is take a few deep breaths and take comfort in fact that you are not first entrepreneur to feel weight of business world on your shoulders. Every business person, including yours truly, has felt way you do at one time or another. For some, it's a feeling that occurs daily, especially when things aren't going as well as we'd like them to. And don't think stress will magically disappear if your business takes off. I know people who run multimillion dollar corporations and they will tell you that stress level goes up in proportion to size of business. These same people will also tell you they love what they do and would never consider doing anything else. The difference between these entrepreneurs and you, Steven, is that they have been in business longer and have learned to not only handle stress, but to take stress and transform it into a driving force. They feed off stress. It fuels their creativity and innovation. Stress challenges them, it makes them think, makes them better entrepreneurs. I think real question isn't whether or not you have what it takes to run a business. The real question is do you have what it takes to handle stress of running a business. These are two very different questions and answers depend totally on you. Even on best of days running a business can be incredibly stressful, not to mention overwhelming and exhausting. It's only natural that there will be times when you wonder if it's really worth it. Asking yourself "should I just get a real job" question simply means that your human side is showing. And as a human you have a limited tolerance for things you can not control. And that's really where stress of being an entrepreneur comes from. We worry about things we can't control. Things like finding new customers, paying bills, making payroll, and a thousand other things. Sure, we can put forth our best efforts to make these things turn out in our favor, but we really can't control outcome. So we worry. And worry breeds stress and stress breeds doubt and doubt breeds feeling that an 800 pound gorilla is using your chest for a lawn chair. It's only natural that you being to wonder, "Is this what I really want to do? Do I have what it takes to run my own business?" I remember once complaining about stress of running my business to an elder entrepreneur. He waved at me like he was swatting a fly and said, "Son, if it was easy, everybody would do it. Now suck it up and move on." Suck it up and move on… probably best business advice I've ever gotten. No fortune cookie was ever so on money. My mentor's eloquent point was this: running a business is never easy and always stressful, but that's what makes it so dang exciting. Running a business is like walking a tight rope… backward… with your eyes shut… and your pants on fire… Man, sure beats working for a living, huh.
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