Let’s Move On From AIG Already!!

I’m really getting tired of people blaming AIG already. It’s been proven that they did not break any laws, but continuing to dwell on the subject has gotten old. Rep. Barney Frank just called for the federal government to do a take-over of AIG and try to make it easier to get back the some of the $165 million it paid the execs. Democratic Sen. Charles Schumer wants Congress to tax the HELL out of the bonuses, something like 90%?! My personal favorite is how Republican Sen. Charles Grassley wants the AIG executives to either resign or commit suicide.

During President Obama’s campaign and a large chunk of the first 60 days of his presidency, he has shown patience and determination in keeping his eyes on the prize of two major economic goals: creating around 4 million jobs and getting credit going again. True, the plunging of the country’s financial crapper is taking longer than everyone wants, but I’m willing to give him some breathing room on that one, because that’s a pretty big piece of crap to drain overnight. However, Obama seems to have taken his eye off the ball a little bit and gotten pulled into the publicity. It seems that the plan isn’t to pull the economy from the bottomless pit of port-o-potty’s, but to point some fingers on who we think got us into this crap. We gave billions of taxpayer dollars to AIG, and the company has the balls to pay out huge bonuses to the execs, because you know they’re hurting too!

Now I get that AIG had some contractual obligations to these execs, and it was either pay up to get sued, but shouldn’t we set a restriction that voids these types of contracts if the government is forced to step in and bail them out? Shouldn’t the government hear the full plan on what happens with the money they just forked over? I guess that’s another thing for the Prez to think about.

Billionaires are hurting too!

The total number of billionaires in the world fell from 1,125 in 2008 to 793 in 2009.  The financial meltdown wiped out $2 trillion from their net worth.  Most of you are saying the same thing as I am, “who cares!”  It’s all net worth, and not cash.  There is a difference when looking at a personal financial statement.  If somebody held a gun to their head and said “give me your billions or you die,” unless they had a 3 month window, it’s not going to happen.  The liquidity of their net worth is not very high and complicated to achieve.

Russians were the hardest hit with Moscow losing its title as the world’s billionaire capital to New York.  Bill Gates has become the richest man again, taking over the top spot with $40 billion after slipping to 3rd last year, when he was worth $58 billion.  How the hell can he survive on that?!  Warren Buffett fell to 2nd place with $37 billion, dropping $25 billion from last year.  Collectively, the top-three billionaires lost $68 billion in the year to Feb 13.  I’m setting up a donation account listed under “needy billionaires” at Chase Bank.

Steve Forbes said “Billionaires don’t have to worry about their next meal, but if their wealth is declining and you’re not creating numerous new billionaires, it means the rest of the world is not doing very well.”  In part, he’s right.  It goes to show that there’s just a lot less money to go around right now.  That’s vastly different from saying that there’s no money out there.  It’s just currently harder to come by, and the once cash flowing businesses are now penny pinching and suffering severe margin drops and revenue dips.  The money is out there, just not in the same places that it’s been.

What My 4 Year Old Taught Me About Savings

Recently we started giving my 4 year old an allowance for helping around the house.  It’s only a dime here and a dime there, but he’s EXTREMELY proud of his money and what he can do with it.  His ultimate idea right now is to only save to buy Star Wars stuff, but what he’s been great about is his patience and thoughtfulness with it all.

At 4 years old, he’s already gaining a really great understanding that if he waits longer, he’ll accumulate more money. We let him know how much he has, and how much certain things cost, and then he shrugs it off and waits.  Never throws a tantrum or ask to have more money.  If people had an understanding like this, there would be a lot less credit trouble in the country, purchases would be made with a lot more sense, and there actually would be a lot less purchases made.

We are a country that continues to purchase an excess.  An excess of whatever.  Don’t believe me?  Move.  You always realize how much crap you have when you move.  You ask yourself, where did this stuff come from?  How did we get it?  If you think about what you need out of all that stuff, there’s a good rule of thumb that if you don’t touch it within 30 days, then you don’t need it.

My wife and I recently had a discussion about what we could get rid of if we wanted to, and looking around, we have things that are just there.  Do we need it?  Uhh, no.  I’m sure we got it from things we once needed, shopping on a wimb, or a decorative idea that we never completed.  The point is, we could be sitting around on money.

What I mean is you can minimalize and profit from it.  Also, nothing would change.  If we keep the objects and items that we use now, and sell the rest, our lives really wouldn’t change.  Our kids wouldn’t have a different life, and our lifestyle remains the same.

I told Josh once he gets enough money, he could buy that Star Wars toy, and his response was, “but then I’d have no money.”  He’s brilliant!  But that’s another post….