Americans are all too familiar with the usual spiel on financial security hocked by pundits: Buy securities! Buy real estate! One of the immediate effects of the Great Recession is that these conventional ports of financial refuge were suddenly not so safe. Certainly, diversification mitigates risk in fluctuating markets , but few could predict the kind of across-the-board financial upheaval the recession unleashed. Lower-risk investments, mutual funds and pensions all took a hit. Most worryingly perhaps, is that even the supposedly secure real estate market has taken a severe beating. Instead of providing families with a steady increase in equity, many who hold real estate right now are simply holding more debt.
While markets have begun to recover, it is still not altogether clear that the stock market or real estate will return to being infallible income-builders to the same extent they have been in the past. But perhaps a new understanding of financial security is emerging. The Wall Street Journal recently reported (Read More....)
Following in the footsteps of a rather ignominious list of nations like Argentina and Hungary, the government of lreland is set to take its ‘fair share’ of private retirement funds. Drowning in debt and faced with unpopular, unrealistic, ridiculously unpopular austerity measures, the government has announced that it will now tax private pension savings in order to raise 470 million euros (roughly $675 million) per year… a lot of money in a country of only 4.4 million people.
Somehow, the government expects to be able to create 100,000 jobs to bring down an unemployment rate at 14.7%. Perhaps they plan on hiring 100,000 new workers to go around the country and collect the tax.
It reminds me of what I saw in Bolivia a couple of weeks ago– there’s a tax or toll or fee for nearly everything you do. Driving on the highway (if you can call it that) outside of Santa Cruz, you pay a toll… obviously not for the maintenance of the road, but to pay the salary of the toll collector.
At the airport, you have to pay an airport tax before departure… obviously not for the upkeep and efficiency of (Read More....)