Be A Sloth and Don’t ROTH – Why Converting To A ROTH Is A Mistake!

If I read one more biased article pushing people to convert to a ROTH IRA I’m going to lose it!  Not to be melodramatic or anything, but the lack of unbiased analysis is like seeing a sea of zombies instructed to walk off a cliff. Wake up zombies, wake up!  Don’t make a decision without seeing what lies down below.

The ROTH IRA conversion idea is that those who have pre-tax funded retirement accounts such as a 401K or Traditional IRA pay taxes UPFRONT, so as to not pay taxes when you retire.  This is just absolute hogwash donkey dumb for a large majority of people out there.

Proponents of the ROTH IRA conversion argue:

1) Tax rates are low and are just going to go up in the future.

2) You will likely make more money in your retirement years, and hence pay more taxes.

3) Paying taxes now improves performance in the long run all else being equal.


Federal Government Employees Raking It In

Want to get happy?  Here’s a lovely article highlighting that over the past 18 months, the percentage of Federal Government employees making over $100,000 jumped from 14% to 19%!

An even more astonishing fact is that 1,690 employees at the Department of Transportation now make over $170,000 vs. only one before the recession started.

My grand plan now is to build my retirement nut in the private sector for 20 years, and then live it up with a fat salary and pension from the public sector for the next 20 years!

I’m going to the local library today to learn all I can about being a great DOT employee.  I will be the best planner, analyst, treasurer, whatever there is, so I too can make $170,000 too.

Anybody else dreaming about joining the Federal Government to take advantage of all the benefits?  After reading Jane White’s “Welcome To The Poorhouse” book, I was doubtful about my chances of making $174,000 in government because I’d have to be elected as a Congressman or Senator.  Now I’m ecstatic to discover there are 10,000+ Federal Government positions which pay just as well!

As a government official, I promise to support tax hikes for all income classes no matter how horrible the economy is.  After all, tax hikes are important to keep our guaranteed annual pay increases going.

Remember, only the government is allowed to persecute others and tell them how to spend their money.  As long as they focus the public’s attention on Wall St., maybe nobody will notice their ways.  “We’ll spend your money however way we damn feel like it!”  Go USA!

Readers, which public sector job do you dream of having?  Why would anybody ever want to join the private sector given all the insecurity, volatility, and pay differential?

Related Post:“Fortunes, Fortunes, Everywhere”


Financial Samurai – “Slicing Through Money’s Mysteries”

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Book Review & Giveaway: “America, Welcome To The Poorhouse”

poorhouseAuthor Bio: Jane White is Founder & President of Retirement Solutions, LLC, which promotes 401(k) reform and provides investment education.

Publisher: FT Press.  A compact 247-pages in hardcover.

Summary: This is one angry, no-nonsense book!  Jane White blames more politicians than I can name for causing the mess we’re all in.  She plays no favorites and thinks both parties are corrupt.  Phil Gram (R-TX) deregulating the banking industry is the genesis of this crisis, while Chris Dodd (D-CT) is blamed for carrying bank deregulation further by deregulating exotic financial instruments.

Jane even questions whether Bernanke knows anything about economics.  One of my favorite assertion of her’s is that big business owns both parties, and politicians are just playing puppets to their lobbyists.

The Public Loves Wall Street Again!

2037754785_05a628201f_bWhat is this blasphemy you say?  One of our main tenets is to observe what people DO with their money, and not what they preach.  The public clearly loves Bank of America and Wall Street again because how else would Bank of America be able to raise $19 billion from us, to pay us back?

In an “Open Letter To Vikram Pandit, CEO of Citigroup” we urged Vik to sell the 34% government stake back to the very public that bailed Citigroup out before year-end. Why?  So Citigroup can pay their employees big bonuses in 2009 by saying they are no longer under the government’s stewardship.  Sure, paying back $45 billion in TARP sounds like a lot, but Bank of America just did it!

In fact, joining Bank of America are Bank of NY Mellon Group, Goldman Sachs, JP Morgan, Morgan Stanley, and State Street who’ve all been able to pay back their TARP loans and pay their people handsomely this year.  This begs the question, what’s wrong with Citigroup, one of my main “go broke banks” used to optimize my finances.


Tuition Hike For The Poor Is Like A Tax Hike For The Rich

In a stunning move to shore up a $535 million budget gap, the UC Regents in 2009 voted to raise student undergraduate tuition by 32 percent (to $10,302/yr)!  Nothing like a little 16X increase over the rate of inflation to get blood boiling.  And now in 2011, the UC Regents voted to raise tuition by another 18% over 2010 to a total of $13,500 a year.  Talk about runaway inflation as just two years ago that figure was sitting at $8,000.

It’s really sad that during a difficult economic climate, the University of California Regents can conceivably raise tuition by such a magnitude.  Part of the reason why many of these fine students attend the UC system is because of cost.  Students from UC Berkeley or UCLA, for example, can easily get into many of the best private schools in America.  But for many, $40,000 a year in tuition is just too hefty a burden to carry.

The reality remains that due to careless spending by the state, budget cuts and a competitive market place for attracting top professors, tuition increases are inevitable.  The California state government has messed things up for so long that it’s now time for students, who have no money of their own to pay the price.  As a result, there is a fantastic silver lining to this tuition hike: the grooming of future conservative leaders of America and more empathy towards hard working, tax paying Americans.