This Article is About
ben bernanke
own destiny
great depression
compounding interest
national debt
enough money
4 Topics Of Your Money Future
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The increasing problem of an aging population

When Social Security was created in 1935, the age of 65 was considered old age. Now with people living longer and longer, 65 is the new 40. Will Social Security be around much longer? In 2012 the government admitted that the Social Security fund will be bankrupt by 2033. That is a really big problem, who will take care of the people that are working now thinking that they will get to retire in their years? Do you want to rely on something that probably isn’t going to be there? Or do you want to take control and make your own destiny?

Accelerating National Debt

Most of us have heard of the power of compounding interest. Where you put let’s say $1,000 into an account and get 10% on that money a month. Well the first month you would get $100. So you start the second month with $1100. Then on month two you would get 10% of $1100 so 110. You would start the third month with $1210, and you would get $121. So in just 3 months you went from having $1,000 to having over $1,300 and all you did was let it sit and collect interest. Well that also happens with debt. And on a national scale. In the year 2000 the national debt was over $5 Trillion and by 2012 it had risen to over $16 Trillion. That is a problem we are going to have to face sooner or later.

2 Different Depressions

1.The Great Depression of 1929 in the U.S.

2.German hyperinflation in the 1920’s

In the Great Depression in the U.S. those that had money, and saved money did very well. There was not a lot of money going around. Chairman Ben Bernanke is currently running the U.S. Federal Reserve Bank. One of the things he believes caused the depression is the Fed did not print enough money which lead to the collapse of the economy. But just like with supply and demand, if too much supply is in the market place, demand goes down and prices will have to be dropped. On the other hand if there is more demand than supply, prices will go up. The same is true with money and that is what happened with the German hyperinflation. If you flood the streets with money then there will be so much of it that it loses its value.

Higher Taxes

How is it that President Obama paid 20.5% in taxes on approximately $3 million in income and Mitt Romney paid 14% on $21 million in income? It is because Mitt Romney has a better financial education. (This is not a political article, but just to make a point) The people who pay the least in taxes know how the system works. They aren’t employees working for an hourly wage. If you do that, there is little you can do to shelter yourself from tax and legally pay less. For example, did you know that if you have internet at your house, and you use that internet to research, let’s say, new designs to create on your quilts. If you were to start a business that sold quilts you would then be able to write your internet off as a tax deduction and pay less on tax? That is how the rich pay less in tax. Another thing is that as an employee you earn your money, get taxed on your money, and live on what is left over. Corporations and business owner however, earn their money, get to spend their money, (ie internet connection) then get taxed on what is left over. Yes, that does mean if you made $10,000 in a year, and spent $8,000 you would only have to pay taxes on the $2,000 left over. (Please be advised to seek professional tax advice from a certified CPA and attorney.)

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