Missed Fortune Super Blog

A Savings Vehicle That Makes All the Difference

Missed Fortune – A Lifeboat for Your Financial Future

Posted on | May 15, 2011

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Changing How Congress Is Elected & Represents Us

In 1971,the 26th Amendment granting the right to vote to 18 year olds only took 3 months to ratify because the people wanted it.

Seven of the 27 amendments the Bill of Rights only took a year or less to ratify because of public pressure.

The proposed Congressional Reform Act of 2011 includes term limits, denies tenure and pensions, requires Congress to participate in Social Security, and requires Congress to purchase its own retirement plan.

It also takes away Congressional health insurance and requires them to purchase their own. Congress can no longer vote themselves a pay raise and must equally abide by all laws they impose on the American people.

The Act also states that all contracts with existing or past congressmen will be null and void effective January 1, 2012. Is this what it will take to get Congress to represent us and not just their own interests?

The Founders envisioned citizen legislators not professional politicians.

It took us 100 years to accumulate 9 trillion dollars in debt and in the last 5 years Congress has grown the debt to nearly 14 trillion dollars.

How Congress is Affecting Your Money

The Washington Examiner recently published an article saying that Senate Democrats are preparing a stealth budget bill to derail the Ryan Budget that passed the House overwhelmingly in April.

The Senate Democrats say that the Ryan budget cuts too much spending and doesn’t raise taxes enough.

Spending cuts are so small in comparison to the kind of cuts that need to take place that they amount to virtually nothing.  We need to cut trillions–not just billions.

With this kind of spending, it’s clear that taxes will be increasing.  Even if the Bush tax cuts are allowed to simply expire, it will still be a huge tax increase.   The triple whammy we face in the next decade includes market volatility, higher taxes and growing inflation.

Congress needs to understand that raising taxes in a recession is the kiss of death for businesses.  It could lead to a true double dip recession.

Instead of raising taxes, we need to raise the revenue that’s being taxed and that’s been proven to work as in the Bush tax cuts that followed 9/11.  We have a serious debt problem and Congress is refusing to take the steps that would address the spending crisis.

The Ship Continues Sinking

Fortunately, there is a lifeboat for those who are willing to take advantage of the year and a half window that remains to reposition your money into investments that accumulate tax free instead of tax deferred.

Let’s say you invested $100,000 dollars and you end up tripling your money in 10 years.  Down the road you’d have to pay 1/3 of that in taxes then your actual money is only $200,000.

If taxes increase to 50% as the Congressional Budget Office is predicting they will by 2021, your nest egg is going to run dry in an amazingly short time.

You need a hedge against inflation that ties your rate of return to those things that inflate so you continue to earn when inflation comes.

You need to index your money in such a way that your money grows when the market grows yet doesn’t lose money when the market decreases.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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