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Rethinking Redistribution of Wealth

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Our president has said “spreading the wealth around is a good thing”. And it is … IF it’s done via the charitable heart of the individual. But when the middleman is in Washington, DC the inherent flaws of socialism rear their ugly heads. In the words of founding father James Madison, “Charity is no part of the legislative duty of the government”.

I was watching television the other night and I came to the conclusion that maybe this “redistribution of wealth” policy of the current administration could be tweaked a little to make conservatives like me more amenable to it. Currently the goal is to take from those who earned their money and give it to those that have no interest in earning it. That is inherently a bad policy. It sounds all well and good but there are countless reasons why this ideology is dangerous (to say the least).

The underlying reasoning is helping those that need help and I think the majority of Americans embrace that idea. The problem is in the “method” of redistribution. Our government would have us believe that THEY can spend OUR money more wisely that WE, the people, can. If you aren’t laughing then the odds are that you’re a politician! If there was ever an oxymoron it’s “Wise Government” …

Look at the current status of our government. They spend ONE TRILLION more dollars than they bring in every year. Do you know how much ONE TRILLION dollars is? Start counting right now. It will take you 536 years to count to one trillion! Well, if you don’t stop for a breath anyway.

If the goal is to help people escape poverty then giving money earned by hardworking citizens to those who have done nothing to earn that money will not teach the lessons that need to be learned in this nation. Milton Friedman said “The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade”.

It’s about self reliance, hard work, ingenuity, honesty, integrity, and perseverance. We must stop using the tactics currently employed by our leaders. Envy, hate, and resentment hurt our society and the ultimate result of the “redistribution of wealth” achieved by those means is best described by Winston Churchill as “the equal sharing of misery”. Margaret Thatcher summed it up precisely: “Socialism is a great until you run out of other people’s money”. Now that I’m clear in my abhorrence of the redistribution of wealth, let me explain the “tweaks” to the ideology that would make it more palatable.

It all boils down to WHO we extract the money from to accomplish this grand scheme. My first criteria would be to garnish the wages of those that add no redeeming value to our society. Has anyone been watching American Idol this season? If so, I think we can agree that Nikki Minaj should start off the list of people that add nothing to our society. Well, nothing positive. She does add arrogance, rudeness, conceit, and self aggrandizement to our society. I never thought Idol would find someone more full of themselves than Simon Cowell but I guess if you dig far enough down in the barrel you can find about anything. Another addition to the list is Kim Kardashian. Do I really need to explain that one?

In the next category I think we need to add actors and actresses that access their uninformed, unintelligent minds to bless us with their liberal wisdom (another oxymoron). Does anyone really care what Matt Damon, Ashley Judd, or Sean Penn think? They are most certainly in favor of redistributing wealth (mostly other people’s wealth) so why don’t they put their money where their mouth is and pony up about 95310302f their wealth to the government so they can pass it out to those people they claim they so desperately want to help? Or do they think they can spend the money more wisely on their own?

Lastly, I would like to propose that the career politicians that so excitedly support the redistribution of wealth are added to the list along with an assurance to the American people that the legislation they write will not exempt them from their own legislation as most of their legislation typically does. In addition, those that have made a killing on Wall Street via their use of insider information should be required to be wealth redistributed FIRST. If Nancy Pelosi loves redistribution and she’s made millions due to her political ties and her access to information most traders would kill for, then let’s raid her bank account first. I’m sure she’d willingly provide access to her ill-gotten gains because she’s a real patriot, right?

Stop laughing and wipe the tears from your eyes so you can see the remainder of my list of other politicians and celebrities that should surrender their money so they look less like the hypocrites we, and they, know they are: Warren Buffett, Harry Reid, Barack Obama, Valerie Jarrett, George Soros, Bill and Hillary Clinton, Chris Rock, Alec Baldwin, Al Gore, Michael Moore, Ariana Huffington, Oprah, Mark Cuban, Jay-Z, Bill Maher, Michael Bloomberg, Chris Mathews, Rachel Maddow, George Clooney, Paul Krugman, Andy Stern, and Al Franken. For good measure lets go ahead and throw in all of the news media that tout the evils of capitalism; ABC, NBC, CBS, and PBS.

IF those people on the list would practice what they preach they could probably eliminate the debt, eliminate the deficit, provide free health care for those that genuinely NEED it, feed every hungry mouth in the USA, and even give us all a free Netflix membership. But don’t hold your breath. They’d rather sit up on their high horse and pretend they care about others than to actually do something about the issues that plague our country.

So if the liberal progressive legislators want conservatives on board for redistribution of wealth … there’s the plan. By the way, one final word from Thomas Jefferson …

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

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Personal Finance

Peer to Peer Lending is Giving Banks a Run For Their Money

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People usually think of going to bank when they need to take out a loan. Banks may give people who are already their customers certain discounts on interest rates, which is a major factor we look at when choosing a lender so that we can go with them.

Banks are usually hesitant to give small business loans because of their lack of financial history. They would rather avoid having any risky investments into their portfolios. Because of that it has been quite hard for small business owners. Normally, getting approved for loans can take a long time. On top of that, consumers have to worry about the high costs of advanced underwriting and understanding their interest rates.

However, banks are in losing out to competitors recently with a company that is giving them a run for their money. Lending Club has been grabbing business from banks quite aggressively, and they are on the verge of reducing loan portfolios from balance sheets.

The Lending Club is positively altering the financial sector to make financing for consumers more gratifying and making advances much more affordable. The company matches investors with borrowers that are based on their risk appetite. The Lending Club is involved with rendering an online market that matching investors with borrowers. The platform lets members join in to trade standard or customized program loans.

Their model is a peer-to-peer lending platform. It’s a practice of delivering cash to certain consumers and all without the need of a financial intermediary. The Lending Club, in particular, is posing a real threat to most banks. According to Lending Club, the borrowers who come to them get almost 33% off the typical interest rates most credit card companies charge.

The latest quarterly results showed that the Lending Club Corporation experiences a whopping 92% year-over-year increase in regards to loan origination. As of now, the primary loan they make is for personal loans. They’re also pushing to help small businesses out as well.

The good thing about Lending Club is that they are not obligated to follow this kind of strict rules that the banks also do, thus creating a gleaming window of opportunity for them to grow their business. A vast majority of analysts look optimistically at the Lending Club’s prospects in the long run. Nine out of the nineteen analysts that covered the Lending Club stock recommended buying it. Seven of the nineteen suggested that there be a hold. At the end of October, the Lending Club stated that their earnings for the third quarter fiscal year for 2015. They happily announced that they were able to surpass even what analysts originally suspected to be both their earnings and revenue. Their earnings per Share, or EPS, came in at $0.04, which was double the amount the consensus estimated to be $0.02. On top of that, their revenue currently stands at $116.3 million, against the analysts’ predicted amount of $108 million.

The Lending Club stock traded up 3.11 at $12.58 at this past Wednesday’s close. During the same trading session, the S&P500 index rejected around 1.3%. Still, they experienced a slight increase of 0.08%. It proves that the Lending Club Corporation can do better in the market.
The Lending Club is currently well-positioned to report both fabulous operating and financial results. The Lending Club should continue to focus aggressively on marketing activities to make use of any opportunities in the future. While they are currently giving their customers a huge discount on the interest charge of a loan, it’s likely the company will continue to be successful in creating a low-cost platform that will have the ability to generate enormous earnings for them and savings for their customers.

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Washington State OKs Some of the Nation’s Toughest OT Rules

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SEATTLE — Washington state is adopting some of the nation’s most aggressive overtime rules, restoring protections for hundreds of thousands of salaried workers and taking what supporters say is a crucial step toward rebuilding the middle class.

The Department of Labor and Industries finalized the rules Wednesday and will phase them in by 2028. By that time, salaried workers making up to about $83,400 a year will be entitled to time-and-a-half pay if they work more than 40 hours per week.

Workers making more than that could also get overtime unless they are certain types of professionals — such as those with higher degrees — or unless they are truly managers or executives, as demonstrated by their ability to  and fire, direct other people’s work or make significant business decisions.

Many job categories will be affected, including shift managers at restaurants and retail establishments, office managers, some medical workers and other white-collar staff, officials said.

“We need to make sure the middle class shares in our state’s prosperity,” Washington Gov. Jay Inslee said in a news release. “Overtime protections ensure workers are fairly compensated when they work more than 40 hours in a given week — time that would otherwise be spent with their families and in their communities.”

Employees who are paid hourly have long been entitled to overtime. But salaried workers have generally been entitled to it only if they make less than a certain amount: about $23,660 under federal law, or more where state laws are more generous.

Those thresholds may have worked decades ago, when they meant that nearly two-thirds of salaried workers nationally were covered by overtime protections. But after a recession in the 1970s, lawmakers largely stopped updating them. Washington’s has been stuck at $13,000 since 1976.

As people’s salaries rose with inflation, they found themselves no longer eligible for overtime. Businesses have also been able to convert hourly workers into salaried ones who make just more than the threshold as a way to avoid  additional staff or paying overtime.

In other cases, workers have been classified as managers when their actual duties more closely resemble those of hourly workers, officials said.

By some estimates, as few as 7% of salaried workers across the country are now entitled to overtime.

The federal government and several states, including California, New York, Pennsylvania, Colorado, Michigan and Massachusetts, have recently updated or started to update their overtime rules, but none have adopted a target threshold as high as Washington’s, said Paul Sonn, state policy program director with the National Employment Law Project.

The rules adopted by the Trump administration will raise the threshold to cover workers making up to $35,308 a year — a significant cut from the $47,000 limit proposed by the Obama administration.

“The overtime threshold is to the middle class as the minimum wage is to low-wage work,” said Nick Hanauer, a Seattle venture capitalist whose think-tank , Civic Ventures, advocates for progressive economic policies. “It is the indispensable labour protection for middle class people.”

Business groups in Washington have agreed that the state’s rules needed to be updated, but they criticized the plans as drastic. The Association of Washington Business, warned when the proposed rules came out in June that they would be a shock to many businesses and that they could particularly hurt nonprofits.

The organization warned that many businesses might convert salaried workers to hourly ones, reducing scheduling flexibility.

After hearing extensive public comment, the department added two years to the phase-in period. The threshold will increase incrementally until it reaches 2.5 times the minimum wage — about $83,400 — by 2028. The rules will phase in more slowly for businesses with fewer than 50 employees.

The department estimates that by the time they are fully implemented, the new rules will give overtime protections to about 260,000 workers who don’t have them and strengthen overtime protections for about 235,000 others. Affected workers will also become eligible for sick leave and retaliation protections.

At a news conference Wednesday, Labor and Industries Director Joel Sacks gave an example of one type of worker who will be protected : a shift manager who makes $40,000 a year but is expected to work 60 hours a week.

Under the new rules, that worker will be paid overtime for the additional hours, or the business will need to  additional staff.

“It’s fair, it’s right and it’s long overdue,” Sacks said.

Among those who might be helped is Victor Duran, a co-manager of a sports apparel store south of Seattle. He said he makes about $52,000 a year and doesn’t get overtime, but is required to work at least 45 hours per week — and up to 60 during the holidays.

“We say bye to the family at the beginning of the season and say we’ll see them after Christmas,” Duran said.

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Is There a Lesser Evil Between Buying and Renting?

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Most people are excited to move out of their parents’ home and gain a little independence. The only major downside is having to pay a mortgage or monthly rent. The big question is whether to buy or rent. No matter which you go for, the rule of thumb is always to keep your housing costs to no more than 30% of your monthly income.

Harvard’s Joint Center for Housing Studies states that over 21 million tenants who rented in the last year spent much more than 30% of their monthly income. About a quarter of these people experiences a higher degree of a financial burden because over half of their monthly income goes to rent. In those cases, these individuals have to compromise the remainder of their budget. The study states the result is a 55% drop in healthcare spending and a 40% in grocery shopping to compensate. The primary reason that so many people are struggling is rental prices are climbing higher than ever while wages are on the decline.

From 2001 until 2014, the average household income decreased by about 10% while rental prices inflated 7%. Last year, the average apartment cost $1,380 to rent, which is a 25% increase compared to prices three years ago. Even so, there is still an incredible demand for apartments, and the national vacancy rate has been pushed to a 30-year low. Nowadays, low-income households are not the only ones struggling; about 20% of middle-class households find themselves in the same predicament. As if things couldn’t get any worse, experts, like chief economist of Zillow, Svenja Gudell, speculate that prices will only go up over the next year, by about 3% to 5%.

Still, not all hope is lost for those that are looking for something cheaper. Interestingly enough the head of strategic marketing at Zumper, Devin O’Brein, states that prices will be more leveled out in metro hot spots like New York City, San Francisco, and Boston. O’Brien believes that there will be price gains in Oakland that will outpace those in San Fransico in 2016. He also suspects that there will be an increase in growth around Dallas, Miami, Austin, and Houston.

Is there a lesser evil between buying and renting?

If you had to make a smart move between one of the two, it might be a better option to purchase a house this year. Although mortgage interest rates are also expected to climb for the first time in about a decade, there is still a chance you might find a bargain on a home. House prices are expected to drop this year; the opposite of rentals. If you have been contemplating purchasing a home, but you have been stuck in the wave of high prices, it may be your only chance for a while to find a deal.

Around six million homes are projected to be sold from April through September alone this year, and not everyone will be able to take advantage of what is out there. Jonathan Smoke, chief economist at Realtor.com, stated the slowdown in home prices will push more homeowners to list their houses, which means you will have plenty of options. It is also believed that new home markets will climb next year with builders keeping a watchful eye on both starter and middle-range homes. There will likely be a significant amount of homes listed, so the amount of bidding will decrease.

With increased interest rates on the way, the window for record low mortgage rates will soon end. Higher rates will push up borrowing costs and monthly mortgage payments. If you are considering to buy or have a rental contract that is almost up, it won’t hurt to look into becoming a homeowner. Housing Economist at Trulia, Ralph McLaughlin, stated that mortgage interest rates would need to rise as high as 6.5% for the cost of buying a home to equal the cost of renting. Are you happy where you currently live?

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