STOCKS LOWER AFTER CUT ON DEBT WOES

U.S. stock markets ended lower today after Moody's downgraded Ireland's debt rating, while debt woes here at home continue to be a drag on stock performance. 

With not a lot of relief in site on debt worries, I tend to agree with Duke Energy (DUK) CEO, James Rogers, that the U.S. should pass incentives to bring U.S. profits home.  Our corporations have over $1 trillion in profits overseas and would be more likely to bring those profits home if U.S. tax laws were changed.  If companies had some incentive to bring this money home and invest in the U.S. modernizing and upgrading facilities, it would create jobs and provide more economic stimulus than the Obama taxpayer funded program.

On a personal note, I've added shares of Kraft Foods (KFT) to my IRA account and plan to continue an active stock purchase plan for the foreseeable future.  As long as the market lags and prices are down, I'll be looking to build on current positions and maybe add a few new ones to my taxable account as well as my IRA.     

America the Land of the Free?

America is often referred to as the land of the free. But most people in this country are not really free. They are tied to debt and a treadmill existence in terms of earning a living. At this moment, our federal government has promised future social benefits in excess of $50 trillion. That figure is approximately the same amount of the total personal wealth held by Americans. In the future, it is very likely that the government will not be able to provide the promised social benefits to our seniors. The typical household in the United States has a net worth of just over $90,000. That is about the same annual cost of a decent quality nursing home. Also, if home equity and equity in motor vehicles is netted out of the $90,000, then the typical household's net worth drops down to about $30,000. That is only about 60 percent of the typical household's annual income. Therefore, it should be every one's goal to provide for their economic future by being fiscally responsible. Otherwise they're most likely become completely dependant on their children when they are no longer able to work.

What should you do if you want to be act more like the rich and eventually become rich? The simplest way is to live below one's means. The typical household should be able to put away 5 percent of their annual income while they are in their 30s, 10 percent when they are in their 40s, and 20 percent when they are in their 50s. If you want to find true happiness and wealth, living frugally, below your means will get you there. It will also guarantee freedom from wage slavery so prevalent in the U.S. today. By continually converting earned income to income producing assets, you will find the road to true freedom in America.

MY FAVORITE QUOTE OF THE DAY!

My favorite quote for the day comes from an article in USA Today's Money section. In an article entitled:

Review: Americans' appetite for debt did them in.

They quote Charles R. Geisst, a Manhattan College finance professor and former investment banker, when talking about "craven financial firms making euphamistic lures to consumers."

"A credit card offers $10,000 of credit, not debt. It has a friendlier ring," he writes.

If we all switched to thinking "debt cards" or "debt limits", instead of credit cards and credit limits, I believe we'd be a lot less likely to use them. It's easy to say, "I'll put it on my credit card." But wouldn't you think twice if you said to yourself, "I could add it to my debt?"

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