Thursday, September 23, 2010

1.15 Money! Money! Money! How to Make/To Spend/To Bank

Physician's Notebook 1 - - See Homepage
15. Money! Money! Money!  - How To Get It, To Spend It, To Bank It - Update 10 Novr 2017
To help the reading note below in descending order as each heading appears for search & find or scroll to.
Salary Slavery
Where to store the money? Banks
Interest and Foreign Exchange Rates 
Limit Your Exposure to Creditors
Income Taxes
Education & Costs
 Learn the cheapskate techniques
Do not marry until
The Increasing Value of Your Money as You Age
When to Stop Accumulating and How to Spend Well
A Mammon Madness 

Salary Slavery: Do you suffer it? Could you live more than several months on no salary without becoming desperate? In order to be free, one must learn to use money economically to get a comfortable surplus of cash before one is too old. Learn to value money, to be efficient in your buys, to accumulate immediately accessible cash, ie, liquidity, by your money card.
   Of course, some persons have money at the start (Rich) or start out poor; but, in either case, the goal ought to be: once one has enough for going long and strong without salary and has learned the techniques of keeping a surplus, one stops struggling to accumulate and one healthily enjoys life creatively.
How much surplus? One-million yen (c.10,000USD) in your money card account balance as a revolving minimum ought to do fine.

Where to store the money? Banks: Your money surplus needs to be in a bank that is stable. In 2017, privacy has been reduced markedly by the Foreign Account Tax Compliance Act (FATCA). If you are a U.S. passport holder, by keeping a foreign account to less than USD $50,000 you may avoid the overseas bank's allowing the U.S. tax authority to view it. Inside the U.S.A. non-interest-bearing checking accounts are relatively safe from scrutiny, which should be a reason for refusing accounts that offer interest income unless you have no reasons to hide your account from tax snoops. Of course, the best of all is to be totally open and honest about your finances but circumstances may at times suggest otherwise.
   Also to keep at top of one's attention Do not put all your eggs in 1 basket! If you accumulate big savings, use more than one good, secure, bank (more than one geographic location; but keep an upper limit to banks you use to 2 or 3; ideally each account for a different foreign currency). And once you have accumulated surplus cash, then work on converting it to useful-to-your-life possessions that reduce your cash holdings and expenses.

Interest and Foreign Exchange Rates 
Knowledge about the interest on money and the related foreign exchange rates should be important to anyone who wants to safely, efficiently accumulate surplus especially expatriates. Presently (2017) we have been in a several-year period of very, very low interest rates (In Japan, bank interests have been less than 1%). But depending upon monetary policy of the world's leaders, interest rate may fluctuate remarkably; for example, in the 1976 to 1980 of the Jimmy Carter US presidency, the basic interest rates fluctuated around 20%; and when I was a young boy (1945) the bank interest rate had been 5% for as long as I could remember. Obviously with a very high interest rate many more people will spend less money on goods preferring to keep their very valuable money in an interest-bearing account. This is very bad for the business economy of the capitalist system and usually causes stock market to go low. Lowering the interest rates as has been the policy for the last decade markedly stimulates the economy, ups the stock market and stimulates  keeping less money in your interest-bearing account so you spend it. 
The related foreign exchange rates may be very important to a person who is expatriate in another country where he may want to spend his money. Foreign exchange rates like the interest rate, and affected by it may fluctuate markedly. For example, when I came to Japan in 1954 and as late as the 1970s one could get 360 yen for a US dollar. Since the 1980s, the value of the Dollar against the Yen fluctuated from 150yen to 90yen. For an American expatriate living in Japan it is important to keep an eye on the exchange rate in such a period of fluctuation and buy Yen when the yen-exchange is high (more Yen for USD, a cheap dollar) and dollars when the Yen exchange is low. Especially when a bank bugs you to get into the foreign exchange market, be sure you are alert to recent fluctuations of foreign exchange rate.   

Limit Your Exposure to Creditors:  Do not own obvious, expensive assets that can be seized, like a new car or home (Instead, lease or rent, or another alternative or use an old secondhand model that no one would want to take from you), and do not have a generally known salary. (Keep your job details very private; prefer contractor agreements to officially declared income) Also not to promiscuously hand out cards (You may still have a professional card but don't use your private home address on it, especially if you own the property), or give out unnecessary employment info or other key personal-assets-locating info. And personal checks should not be used to pay bills. In U.S.A., assume any large cash transaction ($5,000 and over) may be reported to tax authorities. Also any citizen you big-mouth about your money or simply bad-mouth may report you to tax authorities. (This may happen when spouses divorce or couples quarrel or when one makes another person angry) This is not only for persons who have reason to hide from the tax authority but also you never know when you may be sued for big bucks  and find yourself owing millions of dollars that would bankrupt you to actually pay.
 Income Taxes?  In my opinion the stimulus to pay the income tax should be a fact-based fear that the authorities will make trouble if you do not.
   Everyone who gets a reportable salary in U.S.A. will have taxes withheld and must file a yearly tax report. If you have a choice, it is best to sell your services for cash and in that case you have the privacy to not file a tax report. But do not knowingly evade paying income tax and do not base your money philosophy on avoiding income taxes.

Education & Costs:  Get good education toward post-graduate degree. In 2017 with the very high education costs, first self educate. If you must pay for the education, choose local lower cost schools instead of famous, high reputation schools. Also keep in mind the many great bargains in college education that offer low-cost international degrees abroad. And it will start you on your way to becoming an expatriate - an international person. Using your special skills, get scholarships that pay your education. And do not forget the online courses. Finally, become a comprehensivist (Cf Buckminster Fuller): one who is a master at all skills.
   Develop expertise in subjects that will be in demand and also develop special skills even seemingly minor ones like becoming the world’s speediest touch typist or expert troubleshooter for computers, which will make you sought after for good jobs and spotted for advancement in your current job. If you know a 2nd or 3rd language do not let the skill weaken; use it for getting a better or higher paying job. By improving skills you will get high cash incomes from side jobs as you go to school and later from main employments. And when you are young and full of energy and have lots of time, get the kind of job where you can study while you make money. And do not worry about school grades or school reputation; just learn the subjects well enough to pass the course and get the paper diploma.

This is the time to develop the cheapskate techniques – how to shop inexpensively in supermarket, how to control your buying (s)(pl)urges (Stop costly habits like your daily buying coffee; how to save money by eating less and avoiding restaurants, how not to waste money on girl (or boy) and sex and healthcare. And learn how to get essential services without paying. Do not try to make money by gambling like stock markets or Las Vegas.
   Now, I could spend time detailing how to pile up money but why don’t you think for yourself and do it? The principle (the idea) is there and it will produce principal (money that earns more money in bank) : Start to follow the beat of this differing drum. At the end of that rainbow are Delectable Dollars.

Do not marry until you have reached your avoid-salary-slavery goal or just do not marry. Marriage in our society means excess consumption and loss of surplus (plus loss of freedom plus legal & other expenses when divorce comes up). A sex companion you can always get! Do not become responsible for raising children until you reach the goal. (However; if you find yourself inadvertently pregnant it may be important to have the child despite this advice) But do not get into significant debt because of it. Of course, if the marriage means increased income or is otherwise beneficial or at the least harmless to you and the partner is the right one, go ahead but with care to be sure you know what you are getting into.
   Too early marriage, student loans, home-buying and child-raising is why most persons are enslaved for life. Yes, if you can find a simple, loyal, not pretty woman or not handsome man, a not highly educated but educable spouse who brings advantages, then an early marriage may make sense. But take time and live together to be certain of the qualities you desire. Do not marry because of physical beauty or because of sexuality or because of stupid trendiness (so called gay marriage in U.S.A.).

The Increasing Value of Your Capital as You Age: At age 70 with one million dollars one expects to live 10 more years today, so 1-million dollars cash capital would give yearly income of $100,000 living off principal alone, allowing affluence even in the U.S.A. today. But the same capital in a 50 year-old, with 30 more years life expectancy, computes to little more than $30,000 a year, not sufficient for jobless leisure.

When to Stop Accumulating and How to Spend Well: Ideally you could be anxiety free with $US50,000 surplus and a pleasant employment based on your skills. To accumulate more is to waste life. The $50,000 plus a stable source of income to keep your money-card bank surplus should give enough salary-slave freedom for a young person following the advice here.
   An important part of a personal economy is culturally educating self in good tastes and artistic skills. Then when the time comes to enjoy leisure one can do interesting things – like creative writing and the other arts, or being a creative scientist or just enjoying the great heritage of our civilization.

A Mammon Madness  Mammon is money-greed personified. What is meant by the Madness is the sudden, destabilizing, demoralizing effect of a large sum of money on a person. Three examples are 1) A younger brother whose father gave him sole bank account privileges in the business account totaling millions of dollars and whose sudden ability to possess a huge amount of money caused him to withdraw part of the millions from the bank as cash and run away to live luxuriously for a while, in the process ruining his father and older brother; 2) a daughter whose father bought her a 6-figure condominium that would have given her an ideal rent-free happy life but he made the mistake of putting it completely in her name while she was still culturally uneducated moneywise, and she sold it for the immediate cash and went on to a decade of dissolute, unhealthy life, spending the money stupidly; and 3) a granddaughter who came into a 6-figure inheritance and suddenly decided to leave a quiet, healthy, not unhappy life in Queens NYC and relocate with her partner and child to the most air-polluted spot on Earth, and one of the most dangerous for an American, Chiang Mai Thailand, causing a total bad dislocation to her young adopted child's life and ruining her own future.
The reason events like this happen is, firstly, based on our society's overemphasis on the importance of cash money and second the poor cultural education we give our children which does not teach them how to value parts of their life equally and leaves a void filled by Mammon.
Preventives are to not give persons who have not earned or are not responsible for the money the sole power over a bank account, to limit inheritances stringently and to make life insurance policies joint beneficiary type so that one person does not come into control solely of large sum of money. Best of all would be a society that supplies most of the subsistence values of life as part of a social compact, freely and removes money as a majorly important possession. 

Summing Up: “To get rich is glorious!” was a stupid 1980s slogan of the Chinese. Amass money in the Notebooks way and you’ll be smart and can get happy following this advice. The detail is not spelled out here but if one reads and thinks it out and has seminars on money, it is not hard to see what has to be done to succeed.

     To read next now, click 1.16 Time//The One-Million-Hour Life

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