Author 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.
In a great irony, Jane writes that Congress has a higher standard of living than the taxpayers who subsidize it. So true as the average salary for a House and Senate member is $174,000 a year, or 4X the US median wage. Meanwhile, as of 2006, 290 members of Congress were receiving an average pension of $61,000 a year! As a result, those jaded politicians stay in politics for way too long and take way too much of our money.
The solution for everything seems to come from putting lobbyists out of business by introducing campaign reform. Furthermore, we should refuse to contribute to Congress and instead, fund a citizen’s revolt! Jane concludes by saying America needs to prepare for an “Economics Olympics” with higher education as the key to winning gold.
I found myself agreeing with much of what Jane says. She writes with acerbic reality that just stuns the reader. It doesn’t matter whether there’s a Democrat or a Republican in the White House, money will eventually control their decision making. Since it’s inevitable we will have self-serving, corrupt politicians, we need to do our best to educate ourselves on the economic realities of various policies.
A TASTE OF WHAT’S INSIDE:
Chapter 1: Why You Can’t Retire From A 401(k) Plan: You Won’t Have 10X Your Salary In Your Account At Age 65
* Australians have it good and we don’t. The typical 30-34 Australian will have assets of around U$540,000 when they are ready to retire vs. $43,000 for the typical American. The reason for the difference is Australia’s superannuation system where employers are required to contribute 9% of an employees salary up to $135,000 to his/her retirement fund.
Chapter 2: How To Save Wisely Until We Get 401(k) Reform
* One of my favorite parts of the book. Jane asks why there is a silly $16,500 cap on 401(k) contribution. I’ve written before that nobody is going to get rich and retire off $16,500/yr contribution for their careers. The Australians can contribute $150,000 a year for $450,000 total in three years after the age of 60. We have a preposterous $20,000 contribution cap over 60. What a joke! We need reform.
Chapter 9: How Credit Card Debt, Home Equity Loans Get You Over Your Head In Debt
* ARMS & 0% credit card balance transfers are bait and switch tools according to Jane, so stay away.
RULES FOR THE GIVEAWAY: TWO BOOKS TO WIN!
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Kelly and Geek were the big winners last week. Will you be the next big winner announced in the next Katana wrap?
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Financial Samurai – “Slicing Through Money’s Mysteries”
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