Tom's Blog

“Savings of Millions Of People Are Going To Vanish”

2011-09-26T13:58:00.001-04:00

… be prepared, protect your assets, act now, this is just the begining.

Keep your eye on the ball:

Tom Sirois

Great Barrington, MA

College Preparation

2011-07-07T21:04:00.001-04:00

Something to not forget in this year’s Packing List

Taxes.

2011-04-26T06:22:00.001-04:00

A major secret of successful taxation is to make it painless. To do this, taxes must be hidden. Governments tax output up the entire supply chain. The sellers collect the tax. The public does not perceive this.

Check out this (humorous) video.

I think it is very effective in showing how the government gets there “share” of pretty much everything we do and consume.

Thoughts?

Tom Sirois

Great Barrington, MA

Sad story, but good lesson

2011-04-26T06:21:00.001-04:00

Couple items come to mind:

Careful who you trust your money with.
Read the fine print.

What do you think?

Tom Sirois

Great Barrington, MA

"Running the government on 8¢"

2011-01-25T11:18:00.001-05:00

CNNMoney.com reports:

Barring serious efforts to curb the growth in the country's debt, by 2020 Washington could be spending 92 cents of every tax dollar on Medicare, Medicaid, Social Security and interest alone. That would leave just 8 cents to pay for everything else.

Does that put the problem in perspective for you?

Tom Sirois

Great Barrington, MA

Happy New Year

2011-01-01T09:13:00.000-05:00

Hope you all have a safe, content New Year.

I try not to make resolutions, I rather make "intentions" and take it one day, or week at a time surrounding my goals. Health and wealth are on the top of my list this coming year.

I came across a great post on a website www.minyanville.com: Things I've Learned. There is a nice amount of information to reflect upon.

Tom Sirois
Great Barrington, MA

Advice to Average Investors (That is you and me!):

2010-09-27T15:33:00.001-04:00

“Don’t trust your government. Do your own research. Use common sense. If you don’t understand the strategy, don’t invest in it.“

Harry Markopolos is the man who blew the whistle on Bernie Madoff’s $60 Billion Ponzi Fund. Visit msnbc.com for breaking news, world news, and news about the economy'>Visit msnbc.com for breaking news, world news, and news about the economy'>Here is an breif interview with him:

Mr.Markopolos’ advice to investors should be translated to the non-financial world as well. If you rely solely on the information being presented to you by our government then you’re not getting the full story - ever.

Take responsibility for building your own knowledge base, independently of traditional sources, and implement strategies specifically designed by you, for your own benefit.

Tom Sirois

Great Barrington, MA

Important Financial Truths You Should Always Remember

2010-09-20T08:59:00.000-04:00

I came across this excellent article that lays out seven “Financial Truths”. I find it difficult to decide on seven, but they have done an excellent job.

Since I am most inspired by Financial Literacy in children, I think #6 Wants are not the same as needs is the best advice. If you can instill this in your children from an early age, then I think the remainder will fall in line, or simply be easy to teach.

This list is:

1. Nobody cares as much about your money as you do.

2. Spend less than you earn.

3. Shop around and simplify where it makes sense.

4. You need to pay yourself first.

5. Budget budget budget.

6. Wants are not the same as needs.

7. Using cash when you can is best.

Hat tip to Dumb Little Man; tips for life.

I’d love to know what you think.

Tom Sirois

Great Barrington, MA

Aiming low?

2010-07-21T13:03:00.001-04:00

Seth Godin on how schools teache kids to aim low....

What do you think?

Tom Sirois

Great Barrington, MA

stocks-and-bonds-are-now-hazardous-to-your-wealth: Personal Finance News from Yahoo! Finance

2010-07-12T19:00:00.000-04:00

Here is a great article that, if true, should be studied and paid attention to in the days, months and years to come.

stocks-and-bonds-are-now-hazardous-to-your-wealth: Personal Finance News from Yahoo! Finance

What do you think?

Tom Sirois

Great Barrington, MA

How Do Americans Save Money?

2010-06-30T09:47:00.000-04:00

Very interesting graphic that shows How Do Americans Save Money? |

Tom Sirois

Great Barrington, MA

Great Guidlines to Check Your Credit Report

2010-06-11T09:02:00.000-04:00

Bogue's Blog � Blog Archive � Time to Check Your Credit Report – Experian - Making your money work for you

Tom Sirois
Great Barrington, MA

Is the Fed Juicing the Stock Market?

2010-05-17T20:42:00.001-04:00

By Mike Whitney

January 03, 2010 "Information Clearing House" -- Is the Fed manipulating the stock market? TrimTabs CEO Charles Biderman seems to think so, and he makes a strong case for his theory in an article at zerohedge.com.

Biderman focuses his attention on the mystery surrounding the stock market's 9-month rally and asks, "Where is the money coming from?" After all, the market cap has increased by more than $6 trillion since March 9. That amount of money should be fairly easy to trace; right?

Wrong.

Biderman: "The most positive economic development in 2009 was the stock market rally. (But) We cannot identify the source of the new money that pushed stock prices up so far so fast. For the most part, the money did not from the traditional players that provided money in the past."

Huh? So, this vast infusion of liquidity--which helped the banks to avoid painful deleveraging--did not come from the usual suspects?

That's right. According to Biderman, the money did not come from (a) companies ("which were a huge net seller") (b) retail investor funds, (c) retail investors, (d) foreign investors, or (e) pension funds.

What about the hedge funds?

Biderman: "We have no way to track in real time what hedge funds do, and they may well have shifted some assets into U.S. equities. But we doubt their buying power was enormous because they posted an outflow of $12 billion from April through November."

Okay; so we're back to Square One. Where did the money come from?

Biderman again: "As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures. Moreover, several officials have suggested the government should support stock prices. For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.” In a Financial Times article in 2002, an unidentified Fed official was quoted as acknowledging that policymakers had considered buying U.S. equities directly, not just futures. The official mentioned that the Fed could “theoretically buy anything to pump money into the system.”

Biderman is referring to the Plunge Protection Team. Here's a clip from an article I wrote in 2007 which helps to clarify the PPT's origins:

"The Working Group on Financial Markets, also know as the Plunge Protection Team, was created by Ronald Reagan to prevent a repeat of the Wall Street meltdown of October 1987. Its members include the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the SEC and the Chairman of the Commodity Futures Trading Commission. Recently, (2007) the team has been put on high alert because of increased market volatility and, what Hank Paulson calls, the systemic risk posed by hedge funds and derivatives....

Ambrose Evans-Pritchard of the UK Telegraph notes, "Secretary of the Treasury Hank Paulson has called for the PPT to meet with greater frequency and set up a command centre at the US Treasury that will track global markets and serve as an operations base in the next crisis. The top brass will meet every six weeks, combining the heads of Treasury, Federal Reserve, Securities and Exchange Commission (SEC), and key exchanges."

This suggests that the PPT could, in fact, be the driving-force behind the ongoing stock market rally.

Biderman: "This type of intervention could explain some of the unusual market action in recent months, with stock prices grinding higher on low volume even as companies sold huge amounts of new shares and retail investors stayed on the sidelines. For example, Tyler Durden of ZeroHedge has pointed out that virtually all of the market’s upside since mid-September has come from after-hours S&P 500 futures activity."

True. The market has been behaving erratically for some time now. Could it be the "invisible hand" of Fed chair Ben Bernanke nudging equities ever-higher?

Consider the comments of former Clinton advisor George Stephanopoulos who verified the existence of the PPT in an appearance on Good Morning America on Sept 17, 2000. He said:

"What I wanted to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets . . . perhaps the most important the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges and they have been meeting informally so far, and they have a kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have in the past acted more formally . . . I don't know if you remember but in 1998, there was a crisis called the Long term Capital Crisis. It was a major currency trader and there was a global currency crisis. And they, with the guidance of the Fed, all of the banks got together when it started to collapse and propped up the currency markets. And, they have plans in place to consider that if the markets start to fall."

If there was ever a time that warranted government intervention, it was right after Lehman Bros blew up and global markets went into freefall. The whole system was teetering and about to collapse. It's likely that the Fed recognized the danger and made a last-ditch effort to avoid another Great Depression. That means that Bernanke probably used his surrogates at the banks and brokerages to strategically purchase futures and equities that had the best chance of reversing the downward trend. What else could he do---sit on his hands and wait for Armageddon?

The problem is, no steps have been taken to prevent a similar catastrophe from occurring in the future. The same lethal debt-instruments that triggered the crisis are in play today; over $1 trillion in toxic assets still remain on the banks balance sheets, and nothing has been done to reduce financial sector debt. In fact, according to the Fed, total debt for the financial sector was $16.5 trillion in the second quarter 2009, the same as it was a year earlier. Nothing has changed.

Financial institutions are re-levering and taking on greater risks knowing that the government will bail them out if they get into trouble. At the same time, the Fed's lending programs have kept markets from fully-correcting by keeping asset prices artificially high. This has helped the banks to conceal their losses and appear healthier than they really are. The question is; how long can the charade go on before something gives?

Policymakers seem to believe that blanket government guarantees and stock market manipulation are enough to forestall another disaster. But critics think that a day of reckoning is fast approaching.

American’s Lifetime of Debt

2010-04-29T15:10:00.001-04:00

Very eye opening to me. Any thoughts?

Tom Sirois

Great Barrington, MA

Check the Status of Your Federal Tax Refund Online

2010-03-30T09:15:00.001-04:00

Though I am not a big fan of tax planning that results in a refund, knowing that you're getting a federal tax refund can feel awesome, but the wait for it to land in your bank account or mailbox can be maddening.

Here is a link from the friendly people at the IRS:

Get Refund Status

Are you getting a refund this year?

Tom Sirois

Great Barrington, MA

Some Tax Time Links:

2010-03-30T09:03:00.001-04:00

Adjusting your Withholding

How to adjust your withholding

Hope they help.

Tom Sirois

Great Barrington MA

The Complexity of the US Tax System

2010-02-21T08:15:00.006-05:00

Hat tip: Quick Sprout

I'm still trying to figure out how 16.3% evade paying taxes.

Do you do your own taxes?

Tom Sirois
Great Barrington, MA

How about going 50 – 50?

2010-01-27T10:26:00.001-05:00

A couple days ago, The Wall Street Journal had this very interesting article in the regular column about student financial literacy in the personal finance section. It's about dealing with the "I wants" that accompany growing up. The idea is simple. If the youngster claims to want a specific item, particularly a pricey one, offer going half-and-half with them. They can use their allowance, birthday money from relatives, or money from their "jobs" for their portion. The lesson for the children is a good one. I have used this strategy a number of times, and it really does help my children prioritize those wants. It's amazing how something they absolutely "must have" can fade when it involves their own funds. And when they do purchase something that way, they frequently take better care of the item than they do with other things they received as gifts.

The article can be found here: You Want It? Then You Pay for Half of It.

Tom Sirois

Great Barrington, MA

How to fix healthcare in the US . . .

2009-12-02T14:45:00.006-05:00

Here is a great, and relatively short video on some very logical ways to "fix" healthcare and it's cost:

Tom Sirois
Great Barrington, MA

Happy Thanksgiving to all!

2009-11-26T13:18:00.000-05:00

How Private Property Saved the Pilgrims
Ilya Somin • November 26, 2009 2:35 am

Today is Thanksgiving. And there is no better time to remember an underappreciated lesson of the original Thanksgiving: that the Pilgrims nearly starved to death because of collectivism and eventually saved themselves by adopting a system of private property. Economist Benjamin Powell tells the story in here:

Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.

Happy Thanksgiving to all!

Tom Sirois
Great Barrington, MA

Thanksgiving Post

2009-11-24T21:23:00.001-05:00

The George Washington 1789 Thanksgiving proclamation:

Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor -- and whereas both Houses of Congress have by their joint Committee requested me "to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness."

Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be -- That we may then all unite in rendering unto him our sincere and humble thanks -- for his kind care and protection of the People of this Country previous to their becoming a Nation -- for the signal and manifold mercies, and the favorable interpositions of his Providence which we experienced in the tranquility [sic], union, and plenty, which we have since enjoyed -- for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted -- for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions -- to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually -- to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed -- to protect and guide all Sovereigns and Nations (especially such as have shewn [sic] kindness onto us) and to bless them with good government, peace, and concord -- To promote the knowledge and practice of true religion and virtue, and the encrease [sic] of science among them and us -- and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best.

Given under my hand at the City of New York
the third day of October in the year of our Lord 1789.

George Washington

Tom Sirois
Great Barrington MA

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Is MLM for you?

2009-11-10T09:41:00.002-05:00

When I interact with clients and potential clients about their financial health, especially Debt Pay down Strategies I get a fair amount of questions regarding Multi-level Marketing. Whether it is “should I pursue a MLM opportunity”, or “should I stop investing my time and energy into it”. Having been a bank manager at a local community bank, I had limited exposure to folks who sold Cell Tech’s Blue Green Algae, as well as Amway. I cannot comment on the products specifically, or the overall structure of these businesses, but I have seen many more people who are NOT successful in the MLM business than are. That being said, I do not believe that there is not a good upside to investigation this opportunity for passive income, but it will take an awful lot of time, energy and effort to lay the foundation for future success.

There are other names for it – network marketing, social marketing, direct distributing. Legally speaking, most of the legitimate companies that use this form of marketing are not pyramid schemes. At least not legally. However, they do strongly resemble pyramids in their structure.

Please find below three resources I suggest to people who ask my opinion. After they read through these sites we have a very different conversation.

MLM Survivor

The Pink Lighthouse

Pyramid Scheme Alert

Granted, these are all on the negative slant, but if you are getting the “I’d like to discuss a business opportunity with you” pitch from a sales person, sometimes that is just what you need to counter. Both sides, fair and balanced, and then make an informed decision.

Have you been asked to join a MLM business? Tell me your experience.

Tom Sirois Great Barrington, MA

Maybe our public schools should be teaching this!

2009-10-28T10:45:00.003-04:00

Living in an area of the country uniquely filled with entrepreneurs, many local farms, a beautiful four season environment and filled with civic minded people who have a local mindset, I consider myself very fortunate. Unfortunately there is little “industry” in our area that has interested and attracted many of our young people when they are in a position to make a decision to leave or stay in this area. Often these kids go off to college, and decide there is little for them in the community they left (often returning later in life, but that is another post for another time).

I have a very high interest in local, sustainable community activities and systems. There is no better long term investment in our communities than our children and their education. Parents should be responsible to insure their children have these skills. Of course reading, writing, science and math are essential, as well as a deep understanding of history is essential to having a productive member of society, but I feel there are other skills that should be taught and not necessarily taught by our teachers, they could be local business people, community activists, parents or local government officials.

They are in no particular order:

Personal Finance
Communication
Social Skills
Social Entrepreneurship
Sustainable Economics
Health

I have a particular interest in personal finance because of the work I do with small business owners and individuals. I also volunteer my time teaching “Kids and Money” enrichment classes in my local elementary school and as a guest speaker for personal finance in our local High School. I will address each of these in future posts. I think it is easy to blame parents for your financial problems, and that will not be my focus.

What do you think? I’d love to hear from you what you think should be taught? And who should be teaching it?

Tom Sirois Great Barrington MA

Interesting quote

2009-09-05T13:22:00.002-04:00

"...if the debt should once more be swelled to a formidable size... we shall be committed to the English career of debt, corruption and rottenness, closing with revolution." - Thomas Jefferson

Tom Sirois Great Barrington, MA

Tom's Blog

“Savings of Millions Of People Are Going To Vanish”

College Preparation

Taxes.

Sad story, but good lesson

"Running the government on 8¢"

Happy New Year

Advice to Average Investors (That is you and me!):

Important Financial Truths You Should Always Remember

Aiming low?

stocks-and-bonds-are-now-hazardous-to-your-wealth: Personal Finance News from Yahoo! Finance

How Do Americans Save Money?

Great Guidlines to Check Your Credit Report

Is the Fed Juicing the Stock Market?

American’s Lifetime of Debt

Check the Status of Your Federal Tax Refund Online

Some Tax Time Links:

More links regarding Health Insurance Reform (without the government’s help)

The Complexity of the US Tax System

How about going 50 – 50?

How to fix healthcare in the US . . .

Happy Thanksgiving to all!

Thanksgiving Post

Is MLM for you?

Maybe our public schools should be teaching this!

Interesting quote