Why Savers Lose Money
The Confiscation System
The “Wall Street” system was set up to redistribute money from:
- Wage earners
- 401k investors
Where is the money going? The rich are getting the money. How? We will answer these questions in detail. I want to start off by saying that I believe in a free capitalistic market that is not controlled. The markets must be able to correct themselves. There should not be any bailouts. If a mistake is made by a company, then the company needs to learn by paying the money.
The bankers and the government are in partnership in the educational system. It started in the early 1900’s. The “Department of Education” was establishes in 1903. The bankers set up the D.O.E. foundation and they make the decisions for education. The deal is that the government pays for the education of students from K-12 years.
The Schools receives the curriculum that the teachers are to teach students. The School’s curriculum is designed to teach students a system of skilled work and long term investing for the banks to control. There are six huge Conglomerates that own all of the:
- Cable television stations
- Most Big business in corporate America
- Pharma companies
- Food companies
- Control the Medical field through A.M.A.
- World Council of Churches
- Most of the large oil companies are owned by bankers
In fact, most Banks own over a thousand subsidiary companies. What is my point? The students in school are taught to be trained in a profession that will go to work for the conglomerates. The students are taught to buy cars and houses that will be financed by the same bankers.
I want to provide an example. A home loan is taken out for 150,000 at 5% for 30 years. What will that home owner pay for that house by the end of the loan? The answer is 300,000 dollars total. Well the price of the house will increase by that value in 30 years.
Yes it will, but look at this. The home owner pays the extra 150,000 over 30 years and the value of that owner saving in the purchasing power of the dollar decreased at the same amount in their 401k. The result is that the home owner lost a total of 300,000 that was stolen in inflation and in interest from the banks.
The banker’s loans people money with interest for their houses, cars and credit cards. The banks control inflation through the “Federal Reserve”. The Banks produce bubbles in the stock market, housing markets and commodities markets that trigger collapses. The result is that people with houses lose their houses, cars and most of their principle in the stock markets. One more point, the banks take mortgage insurance on home loans.
When a person’s home is repossessed the banks receive the full amount of the loan from the insurance company plus the profit in the resale of the foreclosure. The banks can loan out 12 times the amount of deposits in the bank. The people that are receiving the loan are depositing that same money in another bank at a 12 to 1 loan to another person. It goes on and on. I want to educate people to make better decisions with their hard working money.
I want to talk about taxes. A person that works for a pay check is taxed at the highest tax bracket. The people that own the corporations receive subsidies in tax breaks for creating jobs. The result is that the big business does not pay taxes.
The big businesses are owned by these same conglomerates. The earned income worker that receives a pay check pays most of the taxes. Who receives the tax money? The taxes go towards paying off the national debt.
The bankers loaned America the money and receives the taxes for interest payments. How much in taxes does the average earned income American pay? I’m glad that you asked! The tax bill is in some cases is more than 50% of people’s incomes. For example! The earned income by paycheck American citizen pays:
- Up to 43% in earned income taxes
- In some states there are state taxes of 10% on earned income
- Property tax on their personal home is around 1,000 on every 100,000
- 9% sales tax on products that are purchased
- Obamacare tax n/a
- Built in gas tax (2)
- Built in cigarette tax n/a
- Every utility and service provided to your home has taxes built into the bill (2)
The total in taxes that most Americans pay is 70% of their income. The result is that the part of your income that does not go to the bankers in taxes goes to the bankers in interest payments. I want to shift back to where I left off about school training skilled workers.
The educational system is geared toward training students to receive a skill set. The student is trained to work for an hourly wage for a good company in exchange for their time. I refer to this as trading hours for dollars.
The Schools teaches student to be good employees and not to question authority. Just do what you are told to do. The textbook is right, so do not question the material.
This is indoctrination, not education. The word education comes from the Greek. The Greek word for education is “enduce”. The Greek word means to draw out of.
The meaning of education is to give students the ability to analyze data, reason it out and to critically think through things to come to a balanced conclusion. In essence, the student is drawing out a conclusion from the mind. The student is not being told what to think. The student is not being pushed into propaganda and indoctrination.
The schools condition students to find a job with benefits and a 401k. The schools teach students to get a financial adviser manage your money. The financial brokerage charges fees on the money every year.
The financial adviser tells you that you must be diversified in your 401k. The professionals tell you that it limits your risk. I laugh HARD every time that I hear this statement about 401ks. I laugh even harder when I read the statements that I will teach you how to be rich with a 401k. I am not trying to be offensive. I am really trying to just get people to go analyze data, reason it out and critically think with me. I know not everyone likes real estate. May I examine risk in 401ks for people through a comparison with real estate?
There are two people investing money. One works for a company that receives a match in 401k contributions from their employer. The other is a real estate investor that buys and rents out apartments. The example will match the dollar for dollar investment of only 10,000 dollars over a period of 10 years. There is not any more money being put into either investment over the ten years.
You tell me if these people that are teaching people about 401ks are professionals, after you read those facts. Believe it or not I am not finished. I plead with you to realize that you must have your own best interest in mind; no one else has your best financial interest in mind for you. Any guru with a book, website, TV or radio show that says I can teach you to be rich with a 401k is selling you a product that they receive benefit from financially.
You know why a financial planner will tell people that real estate is risky, because they do not get paid if you buy real estate. The brokerage’s pay advertisement to these radios and TV shows that say call me and I will tell you if you can afford to buy a product. These hosts will be out of business if you stop investing in 401ks. What are some more problems with these indoctrinated ways of thinking?
1.) Time Trader For Money?
A person has limited amount of time in a day. There are only so many hours in a week that can be traded for Dollars. If a person thinks about trading hours for dollars, then the result is going to be limited income.
2.) Are you a 7O% Percenter?
If you receive a weekly pay check, then this is earned income. Earned income is the highest taxed income bracket. Don’t forget that as a homeowner, you pay property taxes. You pay sales taxes when you buy something from the store. All of your utilities, phones and cable bills have taxes that are passed down to you as well. Around 70% percent of your money goes to taxes. Oh, don’t forget about the hidden tax. What Hidden tax? The hidden tax is Inflation. We’ll get to that.
3.) Are your Saving Shrinking?
Inflation is the devaluation of currency as more currency is put into circulation. When the number of dollars increases in circulation, it causes the previous amount of dollars to become worthless. The result is that it takes more Dollars to buy the same products, when there is an increase of dollars into circulation.
The price of the product did not increase; rather it was the value of the dollar decreased. The result is higher gas, food and clothing prices. The Dollar has lost around 95% of its value, since it went off the gold standard in 1971. If you are saving your money in Dollars, then the purchasing power has decreased as more currency is printed. What are the future results of inflation? If inflation is taking place, then they will need to raise interest rates to pull the extra dollars out back into the fed.
The result is that your interest payments go up on credit cards. If you need credit for a house, car and credit cards, then you will pay high interest rates. This is how the funny money is pulled back out of circulation. It is not so funny when you get the bill.
I want to show an example of inflation, because it causes interest rates to rise! If you have a mortgage at 5% interest for 100,000 Dollars home loan, then the house note will be in the low 500 Dollar range every month. The total price of that house will be 180,000 after a 30 year loan. If you have an interest rate of 10% for 100,000 home loan, then the house note will be in the low 1,000 Dollar range every month. The total price of that house will be 360,000 after 30 years. See the difference!
4.) Do you have a 401k broke account?
What do you need to know about 401k accounts? You lose money in your 401k in broker fees every year. When the market experiences a busts, then the plunge in value takes away all of your compounded interest growth that was accumulated over time. Here is an example about 401k accounts.
Before the market collapse from the housing crisis the Dow was in the 13,000’s. It went down to around 8,000. The fed started printing money. There was the tarp bail out. There was quantitative easing 1, 2 and 3. The influx of currency into circulation drove the Dow back up to 13,000. Is this good news? If you don’t understand what is going on, then it is good news.
The value of the Dow before the collapse at 13000 had a higher value, because the Dollar had more value. The Dow at 13000 after the Collapse is less valuable, because your Dollar has lost purchasing power. Thanks to inflation. See how it works. Just in case, I would like to clarify a point. If I had a 401k account in 2005 that had one million dollars in it, then it went down to 500,000 when the stock dropped.
The printing of tarp, Q.E.1, 2 and 3 placed trillions of dollars into the market. This caused the market to rise to its previous level before the crisis. The account is one million dollars in value again. So I received my money back. The fact is “NO” I did not receive my money back. The million dollars before the collapse would buy me products in that day’s value worth a million dollars. In today’s value of the dollar from inflation that money will purchase me around five hundred thousand in goods in that days value before the collapse. I lost money. This is the lie.
Conclusion: If you are trusting in this model, then you will go broke. There is a better way. You can tap into it with the right education. It will require that you change the way that you think about money.
Here is what schools do not teach you? Schools don not teach you about: How to handle finances? How to look at profit and loss statements? How to balance a checkbook? What are the basics concerning business ownership? What are the differences between an asset and a liability? What about supply and demand?
What is the difference between money and currency? What about economics? Hey wait a minute! What about BUSINESS SCHOOL? Do you know what business school teaches? The school of business teaches management training, not ownership.
America has gone through three economic eras since its founding. Americans were land owners, and there was a great emphasis on farming from 1800 to 1900. In the 1860’s, 75% of Americans were independent owners of business and 25% of the people were apprentices working to make a business. America started to build its industries.
The building of industry sparked the industrial age. There were people that came to America from Britain and other places that took over industries to transform America from owners to hourly workers. It is time for America to be great again and for Americans to go back into business as owners. Now we are in the information age.
The new way to make money is through financial literacy. It is critical to learn financial literacy. If schools do not teach it, then you have to educate yourself in order to take control of your financial future. What will happen if you don’t start learning about money? The risk is that your savings will disappear from inflation, taxes and market crashes.
From the 1800 to 1900 there was a strong draw around the world to come to America to start a business. There were immigrants coming to America for the American dream of freedom and financial wealth. The Federal Reserve Bank was started in 1913. The IRS was started as well. The tax policy was mainly for businesses.
There was a law passed to tax earned income in 1943. The tax act of 1943 made it mandatory for all people to pay taxes on earned income. There was another tax act that was passed in 1986 for higher earners. The self-employed professionals were affected by this tax act. This act affects people like lawyers, doctors and etc.
It has becomes costly to start a small business in America due to high tax rates. There is a lower percent tax rate for capital gains from investment. The tax system is geared to encourage investment, but has a high tax rate for small business. The wealth is controlled by ten percent, and they create 90 percent of the jobs.
Eventually the bankers will have to raise interest rates to pull that extra printed money back out of circulation. When that happens interest rates could be as high as 20% to get a loan. The cost of loans alone will wipe out your savings. The whole system is set up to get you to work your whole life. At the same time the money that is being invested for retirement is slowly disappearing through the orchestrated system that is set up. When you die there is a death tax. The intention is for every generation start from scratch.
It is critical that you get the financial education that you need to acquire wealth. A good way to get started is to build an online business. Build your online business in your spare time.