|
Post by brucemacneill on Jun 4, 2015 14:15:41 GMT -5
Republicans, on the other hand, are sporting gentlemen who engage in electoral politics for the pleasure of the game, with no thought given to governance nor to the benefits of gaining and maintaining power. Dabblers. Dilletantes. Mere amateurs. And thus they never lie, dissemble, exaggerate, falsify, libel, or pretend. Well, they generally don't ridicule just for the sport of it. Romney lost because he wasn't willing to get down in the mud with the mud-slinging liars like Reid.
|
|
|
Post by millring on Jun 4, 2015 14:21:05 GMT -5
Romney lost because he's a Republican.
|
|
|
Post by fauxmaha on Jun 4, 2015 14:23:11 GMT -5
Everyone knows that Harry Reid is a notorious pederast. I know this because I know a guy who told me.
|
|
|
Post by brucemacneill on Jun 4, 2015 14:28:03 GMT -5
Everyone knows that Harry Reid is a notorious pederast. I know this because I know a guy who told me. Good one but Harry's not running for anything now.
|
|
|
Post by dradtke on Jun 4, 2015 16:29:19 GMT -5
But isn't everyone here with the possible exception of Bruce who pulled out at the wrong time, back to even with their market-based investments ... and then some? My mother isn't.
|
|
|
Post by dradtke on Jun 4, 2015 16:31:50 GMT -5
Romney lost because he's a Republican. Romney lost because he got fewer votes.
|
|
|
Post by Russell Letson on Jun 4, 2015 16:39:46 GMT -5
We stayed put and are still down a good bit--though we're still ahead of our initial investments from the initial investments that started in the 1980s. Which is not to say that a more activist approach might not have minimized the damage, or that a more conservative portfolio might not have bounced back better.
|
|
|
Post by fauxmaha on Jun 4, 2015 16:59:37 GMT -5
There is a broader point here, which is that if the stock market (lets call that the Wilshire 5000 to keep it simple) can not be relied upon to generate a meaningful, positive return over a working lifetime, then the presence of a promise to pay SS benefits is largely not relevant anyway.
Which is to say, while SS payments are not directly dependent on a stock portfolio, they are very much dependent on the presence of an economy generating enough cash to cover the obligations.
So, the idea that "SS=safe/stock market=risky" is in a very real sense nonsensical. We are ALL invested in the stock market, directly or otherwise.
|
|
|
Post by Doug on Jun 4, 2015 17:42:59 GMT -5
That is the usual meaning of "partly." And do you think ANYONE -- present company included -- EVER includes the most important part of that "privatizing social security" -- the "partly" part, when the discussion is brought up? The very purpose of saying "Bush wanted to privatize SS" is to interject the fearsome probability that by "privatize" one means "entirely". How fearful do you think the voting populace would be over allowing 1-2% of a person's contribution to SS? Now how fearful do you think the prospect of leaving the investment of SS entirely up to privatizing would be? And do you think the omission of "partly" is accidental or incidental? Yeah, I know, right? Russell being Russell was careful to put in "partly". Yeah Russell.
|
|
|
Post by Doug on Jun 4, 2015 17:48:19 GMT -5
That was a serious question. I know where I think you got it from, but before I go off on a needless tangent, I thought I'd ask you to clarify your statement. Violence is inherent in communism. How else are you going to compel people to do that which they do not want to do? I don't' think that's fair. Small communist systems work fine without force. But after a while free love and eating rice and beans just don't cut it and people move out of the commune.
|
|
|
Post by millring on Jun 10, 2015 12:49:13 GMT -5
|
|
|
Post by brucemacneill on Jun 10, 2015 14:31:39 GMT -5
You realize that's a Democrat site, right? Ron Paul says Obama wants a 11% surtax on IRA/401K withdrawals in the 1016 budget. I don't know if that's true, I read it on CNBC. Democrats are starting to believe that "Boomers" have too much money due to 401Ks. As to SS, it needs fixing because there aren't enough employed people to fund it and everyone knows it. What to do about it is the question and I hope whatever they do, they don't do to people who are already on or near it. That to me is unfair since we the old folks made our plans and did our savings based upon a promise, a promise we knew couldn't be kept but a promise none the less. The last SS "Fix" in '86 didn't affect people over 50 I think it was. That's fair because they have a chance to change their plans. I changed mine at the time because of the changes. Now it's too late. I can't even contribute to my IRA because that has to be "Earned income" and I don't have any of that. In any case, I'm still a lot more afraid of Democrats than Republicans, like I'm more afraid of Muslims than Christians sort of. The way out of this mess is growth and that's not a Democrat platform line item.
|
|
|
Post by millring on Jun 10, 2015 14:38:22 GMT -5
I posted it because there seems to be some doubt that Democrats are indeed characterizing "privatizing" 1-3% of your contribution (WITH insurance) as "coming after your Social Security". It would warm the cockles of my cold, cold heart to see some Democrat call such fellow Democrats a liar to their facebook account.
|
|
|
Post by Doug on Jun 10, 2015 14:40:49 GMT -5
You realize that's a Democrat site, right? Ron Paul says Obama wants a 11% surtax on IRA/401K withdrawals in the 1016 budget. I don't know if that's true, I read it on CNBC. Democrats are starting to believe that "Boomers" have too much money due to 401Ks. As to SS, it needs fixing because there aren't enough employed people to fund it and everyone knows it. What to do about it is the question and I hope whatever they do, they don't do to people who are already on or near it. That to me is unfair since we the old folks made our plans and did our savings based upon a promise, a promise we knew couldn't be kept but a promise none the less. The last SS "Fix" in '86 didn't affect people over 50 I think it was. That's fair because they have a chance to change their plans. I changed mine at the time because of the changes. Now it's too late. I can't even contribute to my IRA because that has to be "Earned income" and I don't have any of that. In any case, I'm still a lot more afraid of Democrats than Republicans, like I'm more afraid of Muslims than Christians sort of. The way out of this mess is growth and that's not a Democrat platform line item. What an optimist. Thinking there is a way out of this mess. We are long past the expire by date. No one can even envision a solution. Even those who correctly envision revolution can't even guess what will come out of that.
|
|
|
Post by dickt on Jun 10, 2015 14:45:29 GMT -5
I posted it because there seems to be some doubt that Democrats are indeed characterizing "privatizing" 1-3% of your contribution (WITH insurance) as "coming after your Social Security". It would warm the cockles of my cold, cold heart to see some Democrat call such fellow Democrats a liar to their facebook account. One, it was 30 percent of your contribution. Two, at least two of the pictured candidates have called for raisin the retirement age upwards from 67 and have also called for cuts to medicare
|
|
|
Post by millring on Jun 10, 2015 14:56:01 GMT -5
Yes, I should have said "Of the 12.5% contribution you are required, you would be allowed to re-direct 1%-3% of that 12%, making the highest total re-direct 3% private and 9.5% FICA."
|
|
|
Post by fauxmaha on Jun 10, 2015 15:06:34 GMT -5
Are there any politicians claiming that SS/Medicare can continue indefinitely without benefit cuts?
If there are, they are lying.
|
|
|
Post by Doug on Jun 10, 2015 15:19:27 GMT -5
Are there any politicians claiming that SS/Medicare can continue indefinitely without benefit cuts? If there are, they are lying. Well rather than lying they could be projecting population increase, like every family having 12 kids.
|
|
|
Post by fauxmaha on Jun 10, 2015 15:34:37 GMT -5
Are there any politicians claiming that SS/Medicare can continue indefinitely without benefit cuts? If there are, they are lying. Well rather than lying they could be projecting population increase, like every family having 12 kids. Really doesn't matter. Everyone (politicians, that is) seems to be operating on the "something magic will happen" strategy. Liberals tell us they can raise taxes enough to make good on all the promises that have been made. They can't. Conservatives tell us they have a secret formula that will give us 7% annual economic growth forever. They don't.
|
|
|
Post by lar on Jun 10, 2015 21:14:44 GMT -5
I am enjoying the part of this discussion that deals with the stock market and the possibility of self-directing the investment of a portion of one's social security contributions.
Some of you seem to have done okay since the worst of the recession. Others, Bruce and David's mom come to mind, haven't. Why would that be? We all know that the stock market has made a big comeback since it bottomed out. Why hasn't everyone benefited? It's because we all talk about the stock market as if it's a tangible entity. It's not.
As I think the majority of us were taught in high school, the well known indexes such as the Dow Jones Industrial Average, are simply a collection of stocks. They don't represent the entirety of all publicly traded common stocks. Only if one invests only in those stocks that comprise the DJIA will one's portfolio move with the "market".
It's nice to talk about the stock market as something of an indicator of general investor sentiment. But it has little bearing on one's individual investments.
Prior to the beginning of the recession numerous stock brokers told me the the stock market is as safe as safe can be because since the Great Depression the market has always risen above it's previous high. There is an important word in that sentence that they all left out. That word is . . . "eventually".
The truth is that it doesn't matter to the individual that the market always rises . . . eventually. What matters is the value of one's investments when it comes time to liquidate them. The market bounce back came way too late for David's mom. And that is an important point.
Back in the days before the mutual fund explosion of the late 70s and early 80s very few "regular" people owned common stock. Investments in equities were mostly made by the wealthy. It made sense. They had money to invest. Mutual funds changed all of that because one didn't have to pony up $10,000 or so to get into the game.
There is a big problem with this though. And it has to do with the word "investment". For most of us, banks were where we put whatever money we had to spare. We had savings accounts, Christmas Club accounts, CDs, etc. But they were always "savings". And our money was insured by the U.S. Government. At some point in time some wiseacre marketing guy decided that "savings" wasn't a strong enough word and banks began telling their customers about their investment alternatives. In truth, they were still savings accounts.
Along come the money market mutual fund accounts offered by brokerage houses (which are now, for some unfathomable reason called "banks" even though they offer none of the services historically offered by real banks). What they offered were also called investments. Except these investments weren't guaranteed by anyone. The only guarantee was the commission the broker would receive for each transaction. There wasn't a lot of talk about that. People flocked to put their money into this new, sexy, alternative for their savings. Why not? The returns seemed much more attractive than those offered by those stodgy old banks.
Here's the problem. The word investment means to buy some kind of asset in hopes that it will either produce income or be worth more than the purchase price at a later date. It's a hope not a promise and there are no guarantees. There is risk involved. And the risk includes not only the hoped for gains but also the loss of one's capital.
There were a lot of people over the past 5 years who found out the hard way that the investments that they had been assured would always increase in value . . . eventually, might also decline significantly during the time between now and eventually.
You may wonder why I'm explaining this. I dare say all of you already know it. The reason is that the suggested 1% - 3% of one's social security contributions that might be invested in equities is subject to the same value fluctuations as private investments. Oh, I forgot, those investments would be insured. How much does that cost? Who will pay for it? And what is being insured? One's capital? Or is there also an insured return? How would that work and what kind of administrative cost would be involved?
The economics of the flow of bank deposits into investments in equities was never talked about. All the general public needed to know was that the returns on the equities investments were supposed to be higher. Of course they were. When we put money into a savings account at a bank our return on that investment is reduced by several things. Although it's not obvious, we're all paying for the FDIC deposit insurance. We're also paying for regular state and federal audits to make sure our bank is conducting business according to the regulations. It also takes a fair amount of brick and mortar to run a bank. And people. A brokerage house, by comparison, needs little of that. They don't provide many of the personal services that banks provide. They don't need tellers. Or safe deposit clerks, etc. A brokerage house can handle many times the transaction volume, both in terms of dollars and transactions, at a fraction of the cost of running a bank. And, in case you missed it the first time around, they don't provide insurance.
Wealthy people, by and large, don't make risky investments unless they can afford to lose the money. The rest of us really can't afford to put our money at risk. It's a very expensive lesson to learn. Especially when one has reached the stage of life when the value of one's savings is all there is.
There is one other fact to consider. Most of us, even those of us who think we do, know little or nothing about investing in equities. At worst it's a crap shoot akin to throwing a dart at the Wall Street Journal. At best we rely on market research done by people we don't know and who we will never meet and hoping they know what they are talking about.
Many of us try to mitigate the risk by buying mutual funds. Let the experts make the decisions. Hmmm. There are lots of funds that, on average, outperform the indices. But if everything tanks that just means your losses may be less.
I won't say that this applies to every mutual fund or every fund manager. But at the small number of funds I happen to know something about, this has been the way it has worked. A fund manager starts a new fund. Generally, there is a limit on the total amount to be invested in the fund. The manager sets forth the strategy for investing the accumulated funds and starts selling shares. The fund does well. But it reaches it's cap in about 5 years. Suddenly the fund manager's income drops because there are no new dollars coming in and the only income is from transaction fees. So he hires someone else to manage the fund and starts a new one. But there is no guarantee that the new fund manager will be as good as the original one. Remember, this is a risk inherent investment.
Buying a mutual fund allows the investor to invest in a wider variety of investments. It does not necessarily mean a reduction in overall risk.
Finally a personal story. Years and years ago I had a 401(k) plan through an employer. I chose to invest a very limited amount of my contributions in the company's common stock. A short while later I left the company. The total amount of my investment was so small I decided to liquidate the 401(k) rather than roll it over. Part of the liquidation was that I received a certificate for the shares of company stock I bought. We'll come back to this part of the story later.
I moved on to another company, started a 401(k) and over a period of time I invested what, to me, was a sizable amount of money. I tried to be smart about it. I diversified my investment based on a risk strategy. And over the years I stuck with that strategy because, say it with me now, the market always increases in value . . . eventually. I had time on my side. Despite the fact that the economy was fairly good my 401(k) never did much. When I had to liquidate it at the time of my divorce the value was not much greater than my original investment.
Now back to my stock certificates. I had so few shares, 20 I think and my basis was around $50, that I never paid much attention. Every so often I'd get a big envelope announcing a stock split and there would be a another share certificate in the envelope. I still didn't pay much attention. Finally the company went to digital registration so I didn't get any more certificates but I was notified from time to time about each stock split.
At one point, years ago, I decided to find out what my investment was worth and was surprised to find that it was worth about $3,000. I didn't need the money. Let it ride, I said. Along come the recession and my stock tanked like all of the others. So much for the let it ride strategy. And the quarterly dividends, which were never big, dropped too.
Last week I received my dividend for the most recent quarter and it was the biggest dividend I've received to date. Not much money, but still the largest check they had ever sent me. I thought that things must be going well so I took a close look at the dividend statement. Much to my surprise my ownership of the company has increased to 114 shares over 30 years. I thought I ought to find out what my shares are worth to I looked it up. Much to my surprise the little investment I've ignored all of these years is worth $8,000.
Now I don't know what to do. That represents a significant amount of money to me. I don't have a pressing need for the money at the moment. If I let it ride we might have another recession at a time when I will need the money and then my gain will have vanished.
The moral I draw from this story is that my carefully invested funds did diddly squat. The one I didn't care about because it was so small is now worth quite a bit of money. I clearly have no business investing in the stock market. And that goes for my social security contributions too.
|
|