Showing posts from July, 2012

Throw the Toll Gates Open!

I spent all of June traveling the toll roads of Pennsylvania, New York, and New Jersey. The amount of construction was considerable ... and rather disconcerting as many of the projects seem to have hardly advanced since my last major time spent in the area, in 2008-9. Yet, like millions of others, I had to stop and hand somebody money or throw quarters into a bucket (or have my newly re-acquired EZ Pass debited). Why should commuters pay full toll when the roads are slow due to seemingly never ending construction projects?

The founders, who formed numerous toll roads to tie their young nation together politically and economically, had a solution to bad roads and construction delays: throwing the toll gates open. Why not institute the practice adopted by New York in 1804,* which stipulated that turnpike commissioners could force turnpike companies to stop charging tolls if they determined that their roads' condition impeded the regular flow of traffic? Today, instead of having the b…

LIBOR scandal Fubarnomics and the pressing need for real reform

Several years ago I published a book called Fubarnomics that argued that most of the FUBAR ("fouled" up beyond all recognition) aspects of our economy -- including construction, healthcare, higher ed, and the financial crisis -- were rooted in hybrid failures, in both market and government failures in other words.

The recent scandal over LIBOR is no different. The market failure here is palpable: asymmetric information allowed the bankers to lie about how much it cost their banks to borrow. The government failure is more subtle but is perhaps best exposed by the question: wtf? More specifically, how was it that these crucial transactions were not monitored? that even after it became clear there were problems with self-reporting nothing substantive was done? The answer, of course, is regulatory capture. The Fed, the Treasury, and the FDIC are Wall Street's hand maidens, not its policemen.

The LIBOR scandal is just another indication that the financial system is badly broken…

Financial Management and You

Financial management revolves around making fiscal and monetization decisions in a business enterprise. It dictates the financial direction of a corporation and introduces you the concepts needed to the thinking steps and tools. The goal is generating more revenue and increasing the value created for the share holders. Financial management is different from corporate finance in that the latter deals with the fiscal decisions that a corporation has to make against a body. Also the principles and concepts used by corporate finance can be applied to the world of financial management. We can break down financial management into techniques and rationale about long-term and short-term decision making. Most capital investment decisions are made thinking in the long term because they deal with investments. Financial management also deals with the methods to finance a corporation such as equity or debt, and the decision of whether the firm should pay dividends or not. It also deals with some sh…

Financial Management Programs

Financial management is one of the most important things you should learn if you wish to venture into any kind of business. It involves financial decisions, techniques on how to ensure high profit, as well as the tools and the methods of analyses in order to come up with sound decisions. Starting a business and making it grow, as we all know, is not an easy task--even if you have all the financial resources you need for your business to thrive. Remember that your money is just a tool for a successful business. What really determines your success are your skills in handling your money and all other your skills in making decisions. If you are new to business, don't worry because there are literally hundreds of financial management software programs available today. The right one can help you make accurate and objective decisions regarding your finances. Financial management programs can help you take care of cash management, accounting, payroll reporting, check preparation, financial …

Easy Steps To Financial Management

We go to work, come home, pay our bills, and still keep asking ourselves the same question - "Why is there always so much MONTH left at the end of the MONEY?" So many well-paid people are living paycheck to paycheck and have nothing to show for their long hours of hard labor. If you think you can't afford that summer vacation or get that car repaired when it needs to be, think again. Here are some very basic money saving techniques that ANYBODY can do, no matter what your income level is. 1. PAY YOURSELF FIRST. These are words that you will hear almost every financial consultant say. The general rule of thumb is to set aside a certain percentage of every paycheck, or ANY source of income, and place it into a savings account. This must be done before paying any of your bills. Determine the average total of all your outgoing money (mortgage, rent, electric, phone, cable, etc.), and compare that with your total monthly income. Then pick a percentage of your income that you w…

4th of July Financial Freedom

Today is the 4th of July and time that we celebrate our freedom as Americans and those who have given so much to keep us free. Thank you to all who have served.
The celebration gives us pause to consider our financial freedom. What is your definition of financial freedom? One definition of financial freedom (financial independence) is when your passive income exceeds your expenses. You no longer have to work another day in your life for money as all of your financial needs are met from the income of your investments.
For many of us, we work the greater share of our life to save for retirement – hopefully the point of our financial freedom. Our retirement savings, along with social security hopefully provides enough income that we don’t need to supplement our income with another job.
When you think about retirement and financial freedom, how much money do you need to live the life you want? Are there avenues to reach your financial freedom sooner? Increase your level of investment? Do yo…