The Only Reasons To Ever Contribute To A ROTH IRA

Government Pork SpendingIt’s been a while since I published, “Disadvantages Of A ROTH IRA: Not All Is What It Seems” and since that time, hundreds of thousands of folks have decided to think more carefully about their retirement savings strategy. One of the main things people have learned is that the government manipulates individuals into forking over more money than they otherwise should due to gross mismanagement of their own budget. Massive deficit? Let’s announce this huge “benefit” to allow people to convert their pre-tax retirement funds into a ROTH IRA! We’ll raise the spectre of higher tax rates to get more people to bite.

It’s sometimes daunting to go against the government because they employ some of the smartest people on Earth to keep themselves in power while keeping the rest of us dependent on their largess. But I’m here to help you fight back and live a better life.

If you contribute to a ROTH IRA or convert your pre-tax retirement accounts into a ROTH IRA, you aren’t going to be damned to hell. You’re just not maximizing your wealth over time. I’m a rational person who likes to see both sides of the story. So let me share with you the only legitimate reasons why one should ever contribute to a ROTH IRA.

For those of you who already have a ROTH IRA account, what you are about to read probably makes so much sense you might feel a little bad. But don’t worry. The number one solution when you are in a hole is to stop digging and slowly climb out.

When Will The Government Shutdown And Furlough End?

Waiting for the storm to clear, Cabos As an investor, I’ve thought about this question a fair bit recently. It seemed clear in September that no agreement would be made in Washington DC, which is why I sold equities and raised my stake in bonds as indicated in my quarterly private newsletter. The 10-year yield at 2.8%-2.91% was relatively attractive in light of everything.

Now that the government has shutdown, the 10-year yield is at ~2.64%, and the broader markets have sold off by 3-4%. The question is what’s next? I think the simple focus has to be on making an assumption of when the government starts up again. By figuring out when, we can potentially make more profitable bets or at least save ourselves from blowing up.

THE GOVERNMENT REOPENS….

Implications Of A US Government Shutdown

Government Shutdown BoarFor the first time since 1995, the US Government has finally shut down thanks to no agreement between the Democratic controlled Senate and the Republican controlled House in passing any federal spending bills for 2014. The key point of contention was the Republican party’s desire to prevent the Affordable Care Act (Obamacare) from happening.

As a result of the 1995 shutdown, Republicans became public enemy #1 and President Bill Clinton got reelected in 1996. Newt Gingrich became a newt and America didn’t see a Republican president again until the Bush years. I’d like to share with everybody some brief thoughts about the implications of a partial US government shutdown that may be too sensitive to discuss elsewhere.

WHAT DOES THE US GOVERNMENT SHUTDOWN MEAN?

Should We Still Be Spending Money And Having Fun While Deep In Consumer Debt?

Anthony Weiner Speaking At Rally In NYC

Anthony Weiner too stubborn to quit. NYC 2013.

During the depths of the financial crisis, one of the proposals I sent to the Obama administration was to institute spending curbs based on high school or college grade point averages. It didn’t matter whether you went to Community College or UC Berkeley since everybody’s circumstances are different. What matters is how well you did in school to justify want based spending as opposed to need based spending.

For example, if you were a D+ student (sub 2.0 GPA out of 4.0) you are only allowed to buy generic clothing and ride public transportation to work for the rest of your life. No car or lollipops for you. If you were a B student, then suddenly that new $20,000 Honda Civic is available to you after the dealer scans your ID to check the government GPA database. If you are an A student, then you are free to buy whatever you want because logic dictates that if you are smart enough to study hard in school then you are smart enough to practice good financial habits.

I was shocked Obama never acknowledged my letter because my proposal would only help the government expand their authority (think PRISM) over the people of this great nation. We voted for Big Government and I wanted to support the cause as much as possible as I figured out a way to go John Galt. Although Washington DC stayed silent, fellow patriotic Americans voiced their opinions in the comments section of the post, Tax Rates Based On Work Ethic Shall Fix The World. It’s all about creating incentives.

Just imagine a world where everything is rational. Imagine everybody reading their mortgage contracts before signing so that they are aware of their financial obligations instead of blaming others when they can’t pay. Imagine if everybody adopted the attitude of not deserving something until worked for? Now imagine a country where everybody is middle class and pitches in to support our country. There would be no socioeconomic warfare, just equality. We can always dream right?

DO WHAT YOU WANT WITH YOUR FINANCES, JUST DON’T HURT OTHERS

How To Avoid An Audit Based On Discrimination By The IRS

IRS pick pockets your moneyIt should come as NO surprise to long time Financial Samurai readers that the IRS admitted to targeting conservative groups since Obama became President. The government already discriminates against those who make over a certain amount by charging higher taxes even though they already pay for the majority of all taxes. Meanwhile, the deductions and credits you get for things such as education and children get eliminated if you make over an absurdly low amount. Conducting body cavity searches to shake more tax dollars out of Republicans is business as usual.

Make no mistake that if a Republican was President, liberal groups would also be targeted by the IRS. Everybody naturally discriminates against everybody. Sometimes the discrimination is overt and evil, other times the discrimination is covertly done out of convenience until discovered as is the case with the IRS.

The bottom line is that people have a strong proclivity to take care of their own, no matter what. In this article I’d like to discuss ways in which people can significantly reduce their chances of getting audited by the most powerful organization in America.

THREE EFFECTIVE STRATEGIES TO AVOID AN IRS AUDIT

“Why Work If We’ve Got Obama?” Said My Rich Friend….

A retired man overlooking the fog over the Golden Gate Bridge.

Jaabir, one of the poorest richest friends I know, decided to take a vacation from not working by driving down to Indian Wells, California to watch the BNP Tennis Open last month. The tennis tournament is considered “The Mecca” for tennis fans everywhere given the terrific turnout of the world’s top pros and the intimate setting.

Before Jaabir left for the seven hour drive south, he urged me to go down with him for a week. I wanted to go, but I couldn’t because I had an interview lined up with a promising new company. I also wanted to be on standby just in case I got word from another potential employer. In other words, I was a dog on a leash. Woof.

To make myself feel better for not going, I started pressuring him to stay so he could do his duty as team captain by recruiting more ringers to help us defend our city championship. Why should he have all the fun right? I learned this strategy from so many who try and bring folks down if they can’t succeed themselves.

As usual, Jaabir brushed off my wishes because he’s free. “Sam, don’t worry! I’ve got everything under control. You are rich, why not live it up a little? Why do you not come with me to Indian Wells? Why work if we’ve got Obama, babay!?

Hmm, what the hell Jaabir! America ain’t no welfare country!” I retorted. But then I got to thinking about my own situation. Maybe Jaabir is right. Even though I was smarting for not being able to join Jaabir to tennis Mecca, I decided to write this post as a way to better understand his viewpoint.

WILL OBAMA SET US ALL FREE?