Updated on June 10, 2020

Recently, I read two articles that blew my mind. Perhaps they will blow your mind too.

1) The first article talks about how the US Army fudged $6.8 trillion in accounting entries back in 2015 to balance its books. The Defense Department’s Inspector General said the Army lacked receipts and invoices to support those numbers or simply made them up. What?

“At first glance adjustments totaling trillions may seem impossible. The amounts dwarf the Defense Department’s entire budget. Making changes to one account also require making changes to multiple levels of sub-accounts, however. That created a domino effect where, essentially, falsifications kept falling down the line. In many instances this daisy-chain was repeated multiple times for the same accounting item,” Scot J. Paltrow writes.

While the government goes after regular folks who get their taxes wrong because there are so many rules, it turns a blind eye on $6.8 TRILLION in accounting errors? This seems like a huge double standard and an abdication of responsibility. An army spokesman later downplayed the significance of the improper charges, and said the real error in question is “only” about $62.4 billion. Come on now. $62.4 billion is still a massive amount of money that has vanished into thin air.

$62.4 billion a year in misappropriated funds can:

* Create 1,248,000 new social worker jobs paying $50,000 a year

* Create 624,000 new teaching jobs that pay $100,000 a year

* Line the pockets of 62,400 corrupt officials by $1,000,000 a year

* Really line the coffers of 1,000 contractors by $62,400,000 a year

“Nobody knows where the money is going,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning. But actually we do know where the money is going. Its going into the pockets of the top 0.1% government employees charged with handling the budget in the form of under the table money, salaries and bonuses and the pockets of companies that receive defense contracts.

2) The second article talks about how San Francisco has an annual budget of $9.6 billion, more than 13 other States in America!

Reporter Heather Knight writes, “In 2010, the budget totaled $6.4 billion in a city with 805,000 people, meaning the city spent nearly $8,000 per capita. Six years later, the $9.6 billion budget is paying for services for 865,000 residents, or $11,100 per capita. Inflation explains a little of that increase, but certainly not all of it.” In other words, the city of San Francisco grew by 7.45%, but the budget ballooned by 50% in six years. That is out of control!

We know it’s much easier to vote to raise taxes on other people especially if you don’t have to pay more yourself. Illustrative of this is a SF law passed in 2011. As originally proposed, all SF residents would pitch 1-3% of their gross income in to raise $6.8B for public education.

The majority pushed back against this proposal and the legislation was changed to charge only those making $200,000 or more, ignoring entirely the fact that there are people making less than $200,000 who also have kids. As a result, only $2.5B was raised. But the majority is the majority, and in an election, the majority always wins.

In San Francisco, if someone graffiti’s your garage door, you will get fined by the city if you don’t remove the graffiti at your own expense within a short window of time. Homeowners are responsible for maintaining all the trees on public property outside their house even if they didn’t plant them.

Further, if the public sidewalk outside your property is cracked, you must pay to fix it too. You would think with a $9.6 billion budget, the city would be responsible for maintaining its own property. Nope. Let’s not get started about the homeless situation and the poor public transportation system.

Finally, roughly 20,000 of San Francisco’s 39,000 employees make over $100,000 a year. Now that is impressive! So that’s where the $9.6 billion budget is mostly going annually.

Amazingly, in 2020, San Francisco has a budget of over $12 billion now. Got to love it!

One of the greatest benefits of full-time work is getting paid whether you work or not. I miss that.

How awesome is it to paid when there is a snow day? How good does it feel when you’re out sick or injured for a week and the paycheck continues to roll in? When you’re sipping Mai Tais on the beach thanks to your four weeks of paid time off plus national holidays, life is pretty good!

Now imagine if you got furloughed for a month or more during the holiday or busy season. What a wonderful opportunity to spend time with the people that matter the most to you.

Although you miss the bi-weekly paychecks, you’ll eventually get paid once the government reopens for business. Almost all government workers got paid during the previous government shutdown. Expect the situation to be no different during the 2019 shutdown.

Now compare this work and pay situation with that of an entrepreneur or freelancer. If the entrepreneur doesn’t work, and if his or her employees don’t work, the entrepreneur does not get paid. Entrepreneurs don’t have a safety net as their full-time colleagues do. And therefore entrepreneurs must always have contingency plans.

In 2018, I got something worse than a furlough. I freelanced the entire month of October but didn’t get paid because the company I partnered with decided not to pay their contractors. But not to worry, the company paid all its employees for the work they did in October and provided 1-2 weeks of severance pay.

Freelancers like myself, however, got screwed.

So you see, if you are furloughed with back pay without having to work, life could always be worse. Therefore, it’s always good to focus on the positives and take every opportunity to do good.

In my case, I took my October robbery and decided to aggressively diversify my clientele. Further, I now insist on more upfront payment just in case. And don’t worry about me. I have plans to make them pay me what they owe.

Nobody swindles a Financial Samurai and gets away with it.