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June 30, 2016 / 24 Sivan, 5776

Posts Tagged ‘debt’

Hiding Money From Your Spouse

Tuesday, January 29th, 2013

Do you have any secret funds or debts that your spouse doesn’t know about? I’m referring here to a hidden bank account or an unknown credit card or debt that you have never told anyone about.

If you do, then you are definitely not alone, as a recent Prudential Insurance company survey showed. When the British newspaper The Telegraph published the results of the survey at the end of November, it revealed that around 20 percent of British citizens have debts that they have not disclosed to their partners. Additionally, a slightly smaller number of people admitted that they had hidden investments and savings that were totally unknown to their spouses.

Those asked gave several reasons for concealing their debts. Many times, the underlying cause was a combination of bad monetary habits and embarrassment – over borrowing money to cover everyday living costs, or needing to pay off debts that shouldn’t have arisen. Some said their overspending had been caused by emotional distress, leading to financial problems. In many cases (22 percent), the reason for hiding savings was the fear of a breakup and making sure that there would be some money if this would occur. Eight percent even said that they hide these funds because they simply don’t trust the way their spouse handles money.

As a financial adviser, I often work with couples who argue with each other about money or who don’t trust each other when it comes to financial matters. Indeed, I noticed that attitudes to money are a huge cause of domestic disharmony. The statistics above definitely bear this out; they certainly don’t provide a very positive view of money or relationships.

The best way to combat these difficulties is to meet them head-on and prevent them from happening right from the beginning. If you have a son or daughter who is about to get married, sit down with the young couple and discuss financial habits, such as budgeting and saving. At the same time, emphasize openness and good communication in marriage. Trust and honesty are not only good values with regard to money, but also for marriage in general.

I recently discussed these issues with Sherrie Miller, co-founder of Choice of the Heart, an organization that prepares couples for marriage. And even if you have been married for twenty-five years, it certainly does no harm to review your financial habits with your spouse and to listen to some good and useful advice. Watch the video of my interview with Sherrie to learn more about financial fidelity and other tips for creating (and improving) a strong marriage.

Doug Goldstein, CFP®

Love Of Fellow Jews

Monday, November 5th, 2012

The kinship and love between Jews is one of the cardinal principles and hallmarks of Judaism and none could match Rav Eliezer-Lippa, father of the two great chassidic leaders Reb Elimelech of Lizhensk and Reb Zusha of Hanipoli, when it came to this particular characteristic.

Rav Eliezer-Lippa would spare no money or effort when it came to helping out a fellow Jew who was in desperate straits. Above all, he took a special interest in those poor Jewish tenants-farmers who were constantly being harassed by the feudal landlords because they fell behind in the staggering tax payments imposed on them.

Redeeming A Prisoner

It was the custom of the landlords to take these poor Jews and throw them into prison until they or someone else paid the debt. Rav Eliezer-Lippa was one who gave all that he owned for the mitzvah of pidyon shvuyim (redeeming the prisoners).

One time he heard that in a nearby town a certain Jewish tenant-farmer had been imprisoned by the landlord because he was unable to pay his rents and taxes. Leaping into his wagon, he took all of his money and drove off to see what he could do. When he arrived at the landlord’s home, however, he was told that the amount owed was twice as much as he had.

He pleaded with the landlord to accept the money that he had in payment of the debt and free the prisoner. His pleas were effective and the man was freed. Following this, the landlord turned to Rav Eliezer-Lippa and said, “I see that you are a truly good and righteous man and I am sure you are also an honest man in business. I have a business proposition you might be interested in.”

“What is it?” asked the rav.

The Proposition

“I have a certain relative who is a wealthy landlord in a town not far from here. He has a great deal of agricultural produce – wheat, barley, flax – that he is interested in selling, but he has been looking for an exceptionally honest merchant whom he can trust.

“I am sure you would be the perfect man and I will give you a letter to him so that he will sell you his merchandise.”

When Rav Eliezer-Lippa heard these words he replied, “I thank you very much for your trust in me but I am afraid that I have no money with which to buy the merchandise. You see, every available penny that I had, I gave you to redeem the prisoner.”

An Offer

When the landlord heard this, he said, “In that case, I will do this. Here is the money back and use it to buy produce. When you have earned your profit I am sure that you will come back and repay me.”

“I appreciate this very much,” said the rav. Taking the money and the letter he set off for the town to buy the merchandise and realize a handsome profit.

Arriving at the merchant’s home he explained why he was there and showed him the letter. The landlord read it and said, “My relative speaks very highly of you and he recommends that I do business with you. Since I have great respect for his judgment, I agree to it.”

The two men sat down and worked out a price and all the other necessary details. Then Rav Eliezer-Lippa went down to the granaries to look over the produce.

As he was walking with one of the servants he heard a terrible groan coming from one of the nearby buildings.

“What is that?” he asked in horror.

“Oh, that is a Jew who has been imprisoned by the landlord because he is behind in his debts. The landlord has decided to starve him to death.”

When Rav Eliezer-Lippa heard this he rushed back to the landlord and cried, “I wish to pay the Jewish prisoner’s debt immediately. Here is the money so you can release him.”

Prepare To Leave

When the Jew had been released, Rav Eliezer-Lippa prepared to leave. Where are you going?” asked the landlord in surprise. “What about the business deal that we have?”

Rav Eliezer-Lippa stood straight and stared at the landlord directly in the face saying, “I will be quite frank with you. Since I have seen with what cruelty you behaved towards this Jew, I have decided that I have no desire to do business with you in any way even if this means losing enormous profits.”

Rabbi Sholom Klass

Three Ways That Your Pension May be Spent Before It Enters Your Bank Account

Friday, November 2nd, 2012

When saving for retirement, you may feel secure because you’re putting aside earnings into a pension plan. However, what you may not realize is that some of that money is going to be spent even before it reaches your bank account.

There are 3 ways in which your pension can disappear:

1. Taxes. Having a work-related pension is important because no matter how many years you worked, government social security programs won’t meet all of your post-retirement needs. As helpful as your pension is, be aware that some type of pension plans are taxed as ordinary income when you start taking withdrawals.

2. Debt.  If you still have debts (mortgage, credit cards, or other loans) when you retire, they will need to be paid before your discretionary expenses.  If you are having a hard time making ends meet before you retire, imagine how much more difficult it will be post-retirement on a smaller paycheck.

3.  Charity.  Retirement shouldn’t spell an end to your charitable donations.  If you are careful to give 10, 15, or 20 percent of your income to charity during the years before your retirement, why should you stop post-retirement? To paraphrase the beggar from Fiddler on the Roof, “Just because you’ve retired, I have to suffer?” Depending on your pension and other income-producing investments, you may not be able to make as generous donations as you once did, but certainly charity shouldn’t stop when you retire.

Remember that numbers can be deceiving – after taxes, paying off debt, and giving charity, the amount of your pension may not match the amount deposited in your bank account.  While this sounds drastic, adequate planning can help make up the shortfall.

So before your retirement income is spent before you actually retire review the figures so that you can be prepared. To make this easier, use these easy-to-use calculators to work out how much you are spending on existing loans, mortgages, and more.

Doug Goldstein, CFP®

Romney Can’t and Obama Won’t Do What America Needs (Podcast Pt. II)

Sunday, October 28th, 2012

Here is part II of Douglas Goldstein’s radio program – see below.

Synopsis of Parts I and II:

Romney may say the right things, but will he really be able to affect change? And Obama says… and does… the wrong things, and he has no reason to change. Democrats complain that Romney has no sympathy for the unemployment problem.

Of course this is ironic since he has been hunting for a new job for the past year. In the recent debate, he stressed how he would work to improve the economy to help the middle class. He wants to cut out deductions, lower taxes, and simplify the tax code. Great idea, but that’s not how Washington politics work. With so many special interests, will he really be able to make the required changes? It doesn’t look good.

On the other hand, Obama wants to spend his way out of the problem. He gets the money from borrowing the same way overspending American citizens fund their personal largess. Instead of paying back debt that he racked up, Obama pays the minimum monthly balance. It’s like if you pay $50 on your $5,000 credit card debt. Based on the logic of Nobel Prize winning economist Paul Krugman, the President feels he can double the amount of debt since he’d only have to make $100 monthly payments (or, in the case of the United States debt, make that an increase from $30 billion per month in interest payments to $60 billion!). This system of borrowing money will probably continue to work until at least the  election date, and maybe for a few more years. But at some point, that debt must be paid off.

On this week’s Goldstein on Gelt radio show, I asked former Chief Economist for the International Monetary Fund (IMF) and Harvard professor Ken Rogoff about the American Debt Crisis. He gave a great explanation.

Here’s part two of the show (below). Click here for part one.

Doug Goldstein, CFP®

Romney Can’t and Obama Won’t Do What America Needs (Podcast Pt. I)

Friday, October 19th, 2012

Romney may say the right things, but will he really be able to affect change? And Obama says… and does… the wrong things, and he has no reason to change. Democrats complain that Romney has no sympathy for the unemployment problem.

Of course this is ironic since he has been hunting for a new job for the past year. In the recent debate, he stressed how he would work to improve the economy to help the middle class. He wants to cut out deductions, lower taxes, and simplify the tax code. Great idea, but that’s not how Washington politics work. With so many special interests, will he really be able to make the required changes? It doesn’t look good.

On the other hand, Obama wants to spend his way out of the problem. He gets the money from borrowing the same way overspending American citizens fund their personal largess. Instead of paying back debt that he racked up, Obama pays the minimum monthly balance. It’s like if you pay $50 on your $5,000 credit card debt. Based on the logic of Nobel Prize winning economist Paul Krugman, the President feels he can double the amount of debt since he’d only have to make $100 monthly payments (or, in the case of the United States debt, make that an increase from $30 billion per month in interest payments to $60 billion!). This system of borrowing money will probably continue to work until at least the  election date, and maybe for a few more years. But at some point, that debt must be paid off.

On this week’s Goldstein on Gelt radio show, I asked former Chief Economist for the International Monetary Fund (IMF) and Harvard professor Ken Rogoff about the American Debt Crisis. He gave a great explanation.

Here’s part one of the show (below). Part two will be posted next week.

Doug Goldstein, CFP®

Moody’s 2012 Report and Israel

Sunday, September 9th, 2012

While Israel is concerned about growing budget deficit and unemployment, Moody’s September 3, 2012 annual credit report on Israel, states:

*Israel’s A1 government bond rating and stable outlook are underpinned by the country’s high economic, institutional and government financial strength. [However], the rating is constrained by significant social and political challenges, which lead to moderate susceptibility to event risk….

*Israel’s high economic strength is supported by its relatively high GDP per capita (US$31,200 in 2011) and its economic resilience, which has been illustrated in recent years during frequent economic and political shocks. However, this resilience is being challenged once again by the ongoing euro zone debt crisis and the concurrent slowdown in the global economy.

*Moody’s points out that the Israeli economy’s pace of recovery following the global recession in 2009 has slowed as the contribution of net exports became a drag on the economy last year for the first time since 2007, a trend continued into the first quarter of this year. Capital inflows have diminished and the current account surplus has disappeared in 2012, the latter partly a result of the need to replace Egyptian gas imports following that country’s revolution. As a consequence, the real GDP growth rate dropped to 3% in H1 2012 from an average of 4.8% during 2010-11. Nonetheless, the country’s specialized export sector is well-positioned to rebound quickly should the global environment normalize….

*Moody’s assesses Israel’s government financial strength as being high thanks to the improving debt trajectory, the favorable debt composition and the comfortable debt service schedule…. Additional spending has been allocated to address the acute problems in the housing sector, related primarily to affordability. Other social spending hikes in response to last year’s widespread popular demonstrations and secular increases, mainly associated with demographic trends, will require strict prioritization to conform to the fiscal rule that sets a ceiling on the growth of government spending.

*Moody’s judges Israel’s susceptibility to event risk as moderate based on the political risks facing the country, both domestic and external. The Arab Spring revolutions have ironically created problems for Israel, for whom the 1979 peace treaty with Egypt has been critical to its security framework. The violent uprising in Syria and concerns about Iran’s nuclear program, have led the government to maintain a high level of defense spending, representing about 15% of total government expenditure. However, the negative impact of the cutoff of Egyptian gas supplies on the Israeli balance of payments will be more than offset as Israel’s own gas production increases substantially between 2013 and 2016.

On the other hand, here’s Moody’s August 30, 2012 assessment of the economic performance of the G-20 countries:

*We expect the G-20 advanced economies to grow by around 1.4% in 2012 and 2.0% in 2013, comparable to the 1.3% growth in 2011 and significantly lower than the 3.0% growth in 2010. We expect the prolonged financial market volatility stemming from the sovereign debt crisis in the euro area to continue to depress consumer and business confidence, and the high level of uncertainty to continue to weigh on investment and hiring decisions. Along with ongoing deleveraging efforts in the public and private sectors, persistently high unemployment levels, and real-estate market weakness in a number of countries, these developments will continue to constrain growth in advanced economies.…

*The risk of a deeper than currently expected euro area recession remains significant. The risk of further financial market turbulence in the euro area also remains elevated, given the need for fiscal consolidation measures in an environment of weak economic growth, which raises implementation risks. Furthermore, political and financial uncertainty in Greece and potential funding stress in Spain and Italy have increased the risk of severe economic and financial dislocations in the euro area….

Visit Yoram Ettinger’s website, www.theettingerreport.com.

Yoram Ettinger

Universal Education or Universal Competence?

Sunday, September 9th, 2012

Education was the defining paradigm of the 20th Century model of social progress, particularly the scientific education distributed through cells and classes where trained educators teach from prepared texts imparting the same knowledge to every students through the same methods.

Our educational system is nothing if not extensive. We, collectively and individually, spend fortunes on it. The average cost of a four year degree is approaching 100,000 dollars and that isn’t counting textbooks (1,100 per year) and the astronomical rates of interest on student loans. Total student loan debt has doubled in the last seven years and is approaching 300 billion dollars. The average student under 30 owes around 20,000 dollars as education has become the new mortgage.

Senior citizens who came of age in the age when college became universalized are having their social security payments reduced to cover their student loan debts proving that a college education really does last for a lifetime.

The individual expenses for an education are trivial compared to the collective burden. The budget for New York City’s Department of Education is 24.4 billion dollars. That is nearly the GDP of Vermont being expended on the schools of a single city. It’s the GDP of 60 percent of the countries on the planet being shoveled into a single school system of 1.1 million children under the banner of “Children First” that amounts to 40 percent of the city budget.

New York spends 11,572 dollars per pupil. For now the home of Wall Street can afford this kind of insane waste, closing the budget shortfall by finding a way to impose a 300 million or 500 million dollar fine on a major bank or brokerage. Most other places can’t. Across the river, New Jersey’s disastrous schools are bleeding taxpayers dry with murderous property taxes to fund failing schools.

The same story is repeated across the nation where homeowners are bled to fund swollen pension funds and failing urban schools. Gimmicks such as “weighed student funding” are used to divert as much money as possible from successful local schools to unsuccessful urban schools. People are losing their homes so that another high school in Newark can roll out more afterschool programs and Michelle Obama’s idea of nutritious lunches.

Politicians take for granted that education is the road to empowerment and equality. Obama has read poems off his teleprompter about the wonders of education as the only means of ensuring “our” children’s future. There is nothing revolutionary about that. Every politician takes it for granted that education means empowerment. But does it really?

Universal education was the panacea of every socialist state. By NEA rankings the Soviet Union had a better education system than we do. Its system routed as much of the population as possible through higher education and degree mills making it better educated, on paper, than the Yankee running dogs of the decadent West. And yet the USSR was behind the United States in every possible area of life.

The more you universalize education, the lower the value of that education becomes. When the goal of education is not to teach, but to graduate, then the educational system becomes a cattle run which exists only to move students through the system and then out the door through classroom promotion. The High School education of today is inferior to the Elementary School education of yesterday and the four year college graduate of today couldn’t even begin to match wits with a high school graduate from 1946. College has become the new High School. Graduate school is the new college. If we keep following the European model, then two decades from now, everyone will be encouraged to get a Master’s Degree which will be the prerequisite for most jobs and also be completely worthless.

The current model is that the more education you have, the better you are and the better that the society you live in will be. Everyone is expected to finish High School and as many as possible are encouraged to go to college, even if they’ll die before they pay off the student debt and even if more people go bankrupt subsidizing other people’s education. And at some point when everyone has six years of higher education, we’ll have a utopia of flying cars, glowing sidewalks in the sky and 5 minute tours of the moon.

Daniel Greenfield

Printed from: http://www.jewishpress.com/blogs/sultan-knish/universal-education-or-universal-competence/2012/09/09/

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