$$$ M o n e y $$$

Economics generally brings to mind the idea of money and investing.

The investing of your money or more preciseley the answering of the question: How should I invest my money? is a good pursuit.

Being in my early 50's and having a liquid value of zero (or slightly negative) does not qualify me to be an "Investment Advisor" so I advise you (he says anyway) to click here to solicit others advise.

If your are interested in using me as an example of How NOT to get rich quick then be my Guest.

My view of the 'How should I invest my money?' question was: "How should I invest my time to get their money?

I do remember reading during the '70's one of the investment pundits of the time saying that the real problem investing is trying to solve is not how to make money but how to protect the money/wealth you have made.

So which is it?

Probably both. Investing is an answer to the question "How should I protect the wealth I do have?" and it is also an answer to the question, "How do I earn money by investing it?".

But notice, in both instances there is excess money to start with, hence investing deals with dealing with excess money (i.e. wealth).

So a more important question arises: How do I get wealth, that is, how do I accummulate excess money?

Savings is one way.

Savings + investing is another.

So how come I didn't do it? If you are going to use me as an example of how not to be then you have to know how I was, how I thought. So do I, if I ever hope to change my ways.

In February of 1968 I broke down and got my first ever credit card. They were kind of new then and I agreed that for gas purchases only they would be a true convienence. Plus the interest rate was only 6% and it was tax deductable.

Do you want to read that again? Go ahead, I'll wait...

Now flash forward from then. It's now 1998, that is 30 years latter, and the interest rate on each of my many credit cards is 18% typically and some months (when I miss a payment) it's 24%. And this is not tax deductible.

Do you want to read that again? Go ahead, I'll wait...

How did this happen?

Interest rates here have gone up 3 to 6 times over my life time (300 to 600 percent!?!). 300% if you figure the 18/6 and 600% if you figure the tax deductable 6% was effectively 3% so that you have 18/3. But, the point is, some insidious process did erode my ability to have an excess.

I know I am to blame. It is not my intent here to not accept responsibility for my own short commings.6

But consider this also.

Back then (late 60's early 70's) when I worked as a new Engineer just fresh out of college, back then I used to get a "raise" every September. That is, I always reached the maximum FICA level by September so that for the rest of the year they stopped withholding this from my check and my net take home pay increased accordingly.

It was really nice...while it lasted. But guess what? (I'm sure you can guess). I quit engineering almost 10 years ago now and many years before that I was paying FICA taxes right up to and including the last second before midnight December 31st of each and every year.

Then, two seconds later the cycle was refreshed, and started over.

How could this happen? Why didn't I do something about it?

Like what?

I don't know.

But wait. That's not the end. It's only the half of it.

Back then my FICA (social security AND medical combined) was only about 3% (i.e. about 4% of 75%..Remember September...) of my salary.

Now it's about 15% (oh, by the way I'm self employed now so I have to pay both parts and back then I don't think I was even aware that my employer had to pay a matching 3% of my salary. How come he didn't protest and do something about it?).

So that MY FICA has gone up 5 fold in my life time? (I don't even feel like putting an !exclamation! mark there, which... in and of itself is not good...). If it goes up the same in yours you'll have 75% of your productive effort going to the government just for social security taxes?!?*

NEVER! you say.

Don't be so sure. I thought the same thing. But we know what happened to me.

How did THEY do it?