“We Are Wall Street” E-mail Fights Back Against Main Street

We have a culture of blaming others for our problems and Main Street is now on a tear with this “Occupy Wall Street” movement that’s gathering steam.  The thesis is that financial institutions and anybody who has anything to deal with financial institutions are bad.  The government and the media help fuel the fire against Wall Street and make them scapegoats for the economic decline.  That way, they’ll hopefully deflect the blame away from themselves.

One man from one Wall Street firm stood up and had enough.  In 2010, he penned this letter below which started slowly circulating the web until it finally caught my eye.  The letter is just as appropriate today as it was last year.  He probably had nothing specifically to do with credit default swaps and other exotic instruments that helped cause our decline.  “Wall Street” is a catch-all phrase that leads to a lot of unwarranted stereotypes.

Just because you work at Bank of America as a teller doesn’t mean that you are to blame for Ken Lewis’ empire building when he bought Countrywide Financial and Merrill Lynch for prices nobody in their right mind would pay, which is now leading to massive layoffs.  Just because someone is a Latin America investment banker at Goldman Sachs doesn’t mean they are responsible for you buying 3 condos with minimal money down in Florida to try and get rich.  No, the guy buying the 3 condos is responsible………… or is he?

Just because you have massive student loans and can’t find a job, that doesn’t mean the US economist working at JP Morgan had anything to do with your situation.  Maybe it’s because you borrowed more than you could afford?  Or maybe it’s because you didn’t do well enough in school or go to a better school for that matter.  Why protest an irrelevant economist when you could protest right at your very own school!

If you are a raging populist, who is easily offended, and complains a lot, perhaps you shouldn’t have a read.  But, if you’re a normal rational person who likes to see both viewpoints, take a look and let’s discuss!  Remember, this letter is a retort against the media and the protesters who’ve attacked him, his family and his industry for months.

“WE ARE WALL STREET” EMAIL

How To Drastically Increase Your Betting Odds And Help Others Too

Confession. I’ve been a bad boy for a long time.  It all started when my parents gave me 5 bucks to exchange for quarters at the arcade when I was 8 years old.  This was the most amount of money I ever held in my entire life.  My parents figured it was enough money to hold me over for a couple hours as they went to lunch.

I was with my buddy and we took turns playing various games such as Pacman, Galaga, DigDug, Zaxxon, BurgerTime, and Frogger.  About 45 minutes in, I had spent $4 of my $5 dollars and was worried my remaining $1 wouldn’t be enough to last me until my parents came back.

At this moment, my buddy bragged a lot about how good he was at my all-time favorite game 1942; the one where you fly a 1942 war plane and do 360 flips to avoid gun-fire.  I let him keep talking about how great he was until I challenged him to a bet to see who could last longer for my last 4 quarters.  He obliged, and I not only won $1, but won another $2 as he doubled down.

Little did he know that I had just finished the entire game last week and had been practicing for months on end before.  Ever since that day, I’ve developed a system to increase my betting odds and make plenty of side money.  This is an unusual post for me, since my tag-line is “Honorable Personal Finance.”  As you read on, you’ll realize that perhaps winning money off willing participants who have big heads is not so bad, especially if the proceeds go to charity.

HOW TO DRASTICALLY INCREASE YOUR BETTING ODDS AND MAKE LOTS OF MONEY

The Economy Will Be Just Fine: 40,000 People Can’t Be Wrong!

As the markets were melting down this past week I decided to go watch the World Champion San Francisco Giants beat up the lowly Arizona Diamondbacks in the middle of the day.  It’s quite a treat to watch every game this season because of our current world champ status.  Next season, we’ll be just another team, trying to figure out our way back to glory.

At $80 a ticket, access doesn’t come cheap, but with the ticket comes all you can drink cervezas.  Besides, 1pm games are the best on sunny days.  Might as well go!  When my friends and I got there, we were shocked.  The stadium was absolutely PACKED!  We are talking 40,000 people enjoying a baseball game in the middle of a work day.  See picture above.

I thought about it for a second and came to the realization that the reason why 40,000 people can spend on average $50 per ticket during the middle of the day is because despite the market meltdown, we all have job security or don’t need to work because we have the disposable income to spend.   With a sample set of 40,000, it’s obvious that the economy will be just fine and that unemployment is actually better than what the media drones on and on about.

Think about it.  If you were broke, you’d just stay at home or go to a bar and watch the game on TV for free.  If you were worried about your job, you wouldn’t ditch the afternoon to go watch a game.  You’d be working your tail off and trying to add value.  If you were unemployed, you aren’t sweating it because you’re getting $1,450/month in unemployment income for 99 weeks.  Spending $50 might be more wisely spent elsewhere, but it’s sunny, and it’s the SF Giants we’re talking about!

People have more money than you know.  Why else do you think companies like Apple, Prada, and Tiffany’s are doing so well?  I went to visit my friend’s new place this past weekend and it was awesome!  They had been living in a quaint 1,300 square foot apartment for the past several years and now own a 5 bedroom, 4,600 house on a half acre in one of the most prime areas for $3.3 million!  He said he wasn’t looking to buy, but couldn’t pass up such a good deal when he was able to sell some of his start-up company shares.  Not bad for a guy in his mid-30s just 5 years out of business school wouldn’t you say?

Don’t listen to media schadenfreude about how bad unemployment and the economy are.  They are just bitter they are tied to their desks and can’t come out and play.  I’ve got my finger on the buy trigger come flash crash, Moody’s/Fitch credit downgrade, banishment of US treasuries by foreigners and political gridlock.  And, I’ll bet you a hundred bucks that the rest of you are thinking the same thing as well.  Why?  Because you’ve got the cash baby!

Readers, do you believe the economy is better than perceived?  Do you have some some positive anecdotes you can share with the rest of us?  What could be some pessimistic viewpoints with my story for all you Debby Downers out there?

Best,

Sam

 

Things Totally Worth Splurging Money On

It’s good to be frugal by nature.  You will likely never get into financial trouble as a result.  You will always be able to appreciate things since you’re never buying the best and most expensive stuff.  Sometimes, however, it’s good to splurge.

You’ve already read “‘No Point Making Money If You Don’t Spend Your Money“, and I’m sure many of you agree.  We work so hard every day for our money, and to just hoard all of it in a bank account is such a crying shame.  There is no dearth of ways to make money, so we are actually much more afraid of running out of money than reality.

Time and time again, I see people who’ve been let go find jobs and security again.  I’ve seen people invest their life savings in a project, only to lose it all.  But, they are still alive and finding ways to live fulfilling lives again.

I get a sense we’re now too cautious with our money.  We’ve been permanently scarred by the multiple evaporations of wealth over the past 15 years that we’d rather not spend on some of the most important things that give us happiness and comfort.  Look at wealth indicators now vs. 2008.  It’s taken 3 years, but on average, we’ve all breached our 2007 highs and some of us, by a lot.  This is important since I can’t imagine us going through such a massive downturn like that again, at least for the next 10 years.  In the meantime, don’t be afraid to spend your money on things you cherish, like a $1,000 doggie stroller for your beloved Chow Chow named “Bear”!

THINGS TO  SPLURGE ON THAT WILL IMPROVE YOUR LIFE

Hunting For The Best CD Rates

Once a week I go yield hunting.  I’m always looking for the best rates possible for my cash because I know that if I save X amount with a Y percentage yield, I’ll eventually reach my magical yearly cash flow number which will allow me to retire early if desired.

To get to your magical retirement number quicker, you can either save more or look for better returns.  Currently 80% of my cash hoard is locked up in 5-7 year CD’s yielding on average 4%.  The “problem” I currently have is that every year I work, is another year’s worth of savings I have to figure out what to do with it.

As you can see from my nifty CD banner to the right, I don’t have to look very far at all to keep track of what the best CD rates are in the entire country.  The widget keeps track of all the rates for me and for all of you who visit this site regularly.  I clicked on a Capital One 3% CD to see what it’s all about, and discovered it’s a 10-year CD! Doh….

DURATION, YIELD, AND DEATH AS IT PERTAINS TO CDs