The Challenge of Income Inequality

“Some folks are born into a good life; And other folks get it anyway, anyhow…”
— from “Darkness on the Edge of Town” as performed by Bruce Springsteen

If Warren Buffett and Jeff Bezos and Mark Zuckerberg knew their personal annual income was limited to $2 or $3 million, would they have studied and innovated and worked

Here in America, we are limited in how wealthy we can become only by our imagination, creativity, drive, persistence and ambition. Putting limits on CEO compensation or individual wealth isn’t the way to deal with income inequality. If we limit CEO pay to 50 times what the average employee in the company makes, say $50,000 a year, CEO compensation in that company would top out at $2.5 million annually. Now that's a very nice salary, but this type of "cap" violates what we know about incentives and motivation. Huey Long and others advanced this “limit the top earners” concept during the Great Depression. It failed then, and it should fail now.

How Hunger, Income Inequality Hurt Us All

“And I’ve gone to bed hungry many nights as a lad...” — from “In The Good Old Days (When Times Were Bad),” as performed by Merle Haggard

One of the most famous photos in American history is that of a starving mother during the Great Depression. The woman is gaunt and thin, her countenance worried. Then, hunger was commensurate with soaring unemployment.

The face of hunger in America has changed, but the problem is growing more severe. Many families suffering from a lack of food today are headed by employed adults who still can’t afford life’s essentials. And this is not only bad for those suffering families, it’s bad for the wealthy, too, in ways in addition to obvious humanitarian concerns.

Do We Have a Retirement Savings Crisis?

“Do I have enough saved?” is the overriding question that permeates every conversation regarding retirement planning.

Savers who avail themselves of basic tax sheltered and tax free plans usually enjoy a greater probability of reaching their financial goals. Granted, there are millionaire retirees who haven’t utilized tax-deferred vehicles, but the majority of Americans who have accumulated significant savings have done so partly through the use of these plans.

Men Are From Mars but Women Travel There

“I’ve been everywhere, man; I’ve been everywhere; man; Crossed the deserts bare, man; I’ve breathed the mountain air, man; Travel, I’ve done my share, man; I’ve been everywhere.”
—from “I’ve Been Everywhere” as performed by Hank Snow

One of the fascinating dynamics of retirement is the difference in attitudes many men and women harbor about travel. Women like it. Men? Not so much.

Yes, this is a generalization, and it’s obviously not always true. But it’s been my experience that women simply seem to enjoy travel more than men during their retirement years.

If you could transport and replant the Louvre, Broadway theaters, the Caribbean and Hawaii, the Sistine Chapel, the south of France and a quaint Italian village into downtown Destin, my husband would gladly visit several times a week. Then he’d come home at day’s end. One of the reasons he espouses for not being a fan of travel is the hotel experience. “I’ve slept in enough bad hotel beds to last several lifetimes.” And, “I always get the room next to the ice machine.”

Auschwitz, Tragedy and the Dance of Life

“Some dance to remember... Some dance to forget...” — from “Hotel California,” as performed by The Eagles

For an entire year after the war, she did not speak. And she hoarded food like an animal while recuperating in a Swedish hospital.

Now, at age 93, she performs the rumba, the foxtrot, the merengue and the tango.

All of us face significant life difficulties, including financial challenges and concerns. Many of us obsess over market movements, investments and our bank balance. Few of us, however, have experienced the cruelty and loss that has plagued the life of Manhattan resident Helena Weinrauch.

Would You Retire at 40 If You Could?

You know I work all day... to get you money... To buy you things." — from "A Hard Day's Night," as performed by The Beatles

Would you have retired at age 40 if you could have?

"FIRE," an acronym for "Financial Independence, Retire Early," is a movement that crunches numbers for workers engaged in what is termed radical saving. The theory is that you work for about 20 years, bank and invest 50 percent of your paycheck, and by age 35 or 40 you enjoy the financial security to say "Adios!" forever to the working world.

I admire anyone with the discipline to save a significant amount of each paycheck, regardless of the investor’s ultimate financial goal. And as we all know, the sooner we save and put our money to work, the more we benefit from compounding.

Lottery Billions and the Driveway Next Door

“Some may have and some may not… But I’m thankful for what I’ve got." — from “Backs Turned Looking Down the Path,” as performed by Warren Zevon

A few weeks ago, when the lottery reached north of $1 billion, my husband joked that it was time to break down and buy some tickets. “Nine hundred and eighty million? I can’t be bothered,” he said. “But over a billion? Now that’s real money.”

We laughed, partly because neither of us has ever purchased a lottery ticket. And partly because the idea of being awarded over $1 billion for buying a ticket in a convenience store is bizarre. Tantalizing, but bizarre. I think I read that our chances of winning the prize with the purchase of one ticket were around 200 million to one.

But let’s assume we win! What would we do with an extra $630 million or so, assuming we pocket a billion dollars up front and pay the 37 percent tax rate on our windfall the first year?

Creating Tax Law That Reflects American Spirit

“Don’t give up... you’ve got a reason to live; Can’t forget... we only get what we give." — from “You Get What You Give,” as performed by The New Radicals

In the aftermath of Hurricane Michael, dozens of volunteer contractors, laborers and concerned citizens converge on affected areas in and around Panama City each day. They donate money and supplies, chainsaw trees and pull limbs from homes, haul away debris and carry water and gas to grateful residents.

Many of us like to help others when we can. That is why one change in the new tax law may deserve some scrutiny. The new $24,000 standard deduction (for married filing jointly taxpayers) might cause some taxpayers to be less charitable going forward.

Raising Rates - It Hurts But It's Good

“Me I take the hand I’m dealt... And play it as it lays; it’s the cost... of living, and everyone pays." — from “The Cost of Living,” as performed by Don Henley

Want to borrow to expand your business? Want to buy property or financial assets using leverage? It’s going to cost you more than it did the last few years

The Federal Reserve has signaled its intent to continue raising interest rates and there will almost certainly be some short term negative consequences attached to their actions.

Business expansion and investment will be somewhat curtailed, which will have knock-on effects in the stock market. Businesses tend to borrow less when it costs more to do so. In recent years, cheap money has encouraged corporations to borrow heavily to reinvest in their own companies through stock buybacks. Buybacks tend to increase earnings per share over time and also provide support for the stock price, because other investors know that the company itself is buying stock and want to tag along.

Plant-Based Diets, Payday Rituals and Rich Roll

“I see skies of blue and clouds of white... The bright blessed days... the dark sacred nights; And I think to myself... What a wonderful world." — from "What a Wonderful World" as performed by Louis Armstrong

Changing our financial habits is like implementing an alteration in any other part of our lives. It's not easy. Take Rich Roll for example.

Roll is a Stanford grad with a law degree from Cornell. He successfully practiced corporate entertainment law, but found his personal life in disarray.

By age 31, he had undergone alcohol rehab.

By age 40 he had stopped drinking, but was 50 pounds of double cheeseburgers north of the 160 he had carried as a competitive swimmer at Stanford.

On his 40th birthday he became winded walking up a flight of stairs. The next day, he embarked on a lifestyle journey that included changing to a plant-based diet and getting lots of exercise. In one of Roll's books, he describes the brief but terrible torture of giving up coffee, dairy, meat and fish on the same day. Now that's a lifestyle change!