Some Facts That You Never Knew and Might Not Believe…until you research it!

I’ve been on to this stuff for about 4 years now. I know people who have done a 1099-OID(see bullet point #9 below) and gotten BIG checks from the US Treasury. One of them got a lien put on their house the day after the IRS sent them the check. So there’s definately some weird stuff going on behind the IRS and Federal Reserve, but we already knew that! 🙂

1. The Federal Reserve Bank is a private banking system created by foreign interests. Call any branch for verification.

2. The Federal Reserve Bank is the sole creditor of the United States and the entire national debt is owed to the Federal Reserve Bank. Write your congressman for verification.

3. There are twelve member banks in this system and according to their bylaws (articles of association) they each have the power to act as depositary and fiscal agent (tax collector) of the United States.

4. Federal Reserve Board regulations and Generally Accepted Accounting Principles prohibit member banks within the Federal Reserve System from lending money from their own assets or from other depositors. Federal Reserve member banks do not make loans.

5. Bank customers fund their own mortgage transactions by signing a note. The note is the creation of currency that never existed before being signed by the customer.

6. Because the banks have monopolized the market on negotiable instruments, only banks will accept your promissory note. You can’t buy groceries with a promissory note for example.

7. The practice of failing to disclose these facts in the mortgage agreement voids and nullifies the note because it violates 12 CFR 226.17(c)(1) of the Truth in Lending Law.

8. Unsecured debts assigned to debt collectors are not legally enforceable without the consent of the customer.

9. The banks must pay their customers back the entire value of each note and credit limit minus fees and interest.

10. These facts apply to both secured (e.g. mortgages, credit cards) and unsecured (e.g. credit card) accounts.

11. There are no disclosure or application requirements for a social security number. There are no penalties for refusing to disclose a social security number to anyone. 26 CFR 301.6109-1(c). This is a ruse perpetrated by the FDIC, Federal Reserve and insurance industry for the purpose of illegally monitoring American citizens.

12. The credit reporting system is the creation of the Federal Trade Commission. Its primary use is to collect and build information databases about Americans. It also provides an inexpensive means for banks to unfairly punish people and destroy reputations by subverting the legal requirements normally imposed upon them under the court system.

 

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Banks Are Walking Away From Houses

A city in the Cleveland, Ohio area has demolished 1,000 livable houses in the last year and plans to tear down another 20,000. Their thought is that with 20% of the homes in the town vacant, they are not making the neighbor’s values worth less, they’re making them worthless! Here’s my take..

 

Are You Living On Financial Edge?

             Are You Living on the Edge without a Financial Education?

Posted on: Tuesday, January 24, 2012|Written by: Robert Kiyosaki

When I was a young boy, the path to retirement was simpler. For the most part, if you saved your money regularly, paid your mortgage off, and lived modestly, you could retire well. This was partly because inflation was low since the dollar was pegged to gold and also because most employees could expect a company pension and health benefits until the day they died. It did not take much intelligence to have a secure, financial future.

Today, we live in a world that requires an extremely high, financial intelligence to retire well.

It is no longer enough to save money, as higher inflation and taxes wipe out your earnings. You can’t rely on a company pension because most companies don’t offer one. Instead, it is expected that you contribute to a 401(k) plan that may or may not provide you a secure retirement and that is simply a glorified, tax-deferred savings account that benefits the rich, not you.

These changes are because of two actions by the U.S. government that I’ve written extensively about, most notably in my book Conspiracy of the Rich. In 1971, Nixon took the dollar off the gold standard, making the dollar a currency instead of money. And in 1974, the Employee Retirement Income Security Act was passed, paving the way for 401(k) plans, forcing uneducated workers into the stock market, and creating the financial services industry.

It’s taken about three decades, but we’re seeing the devastating effects of those actions today as individuals and countries are living on the edge of financial disaster.

On an individual level, take for instance a young friend of mine’s father whose dad worked his whole life in an old-world industrial plant. Every time my friend talked with his dad, his dad would mention how long it was until his retirement, where he’d collect a pension and health benefits and enjoy golf a few times a week and sports on TV. There were no savings to speak of, some stock options decimated by the economic downturn, much debt, and no other plan. Unfortunately, only a few months before my friend’s dad hit the minimum retirement age, the plant went for sale, found no buyers, and closed. Now he, along with hundreds of others at that plant, cannot find a new job, have no savings, and are looking at a very insecure, financial future. For him, it may be too late.

On a national level, look at the Euro Zone. According to The Wall Street Journal, “The global economy faces a depression-era collapse in demand if Europe doesn’t quickly act to dramatically boost the size of its debt-crisis firewall, implement pro-growth policies and further integrate the euro zone, the head of the International Monetary Fund warned Monday.”

As IMF Managing Director Christine Lagarde remarked over the weekend, the Euro Zone’s efforts to stymie debt problems “is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand… A moment, ultimately, leading to a downward spiral that could engulf the entire world.” If Europe collapses, the world goes down with it — and the jury is still out on what will happen. But the world’s financial experts are sending out the warning cry.

As you read these stories above, they probably sound vaguely familiar, have little emotional impact on you, and you may have even skipped over them.

Why?

These stories echo stories that have been shared for many years now. The news is filled with stories of people living in countries on the edge of financial collapse, and then buffered by good news here and there to keep us all from falling into complete despair.

The reality is that we have become used to living on the edge, and we’re forgetting what it means to live comfortably inland. This is not all bad, if you have the right mindset.

Living on the Edge Requires a Financial Education

Living on the edge requires alertness and intelligence, you cannot give up or be lulled or else you will fall. Each step must be calculated and taken carefully, but confidently, to get to safety. The only other option is to do nothing and hope someone will save you —which is akin to suicide.

It’s for times like these that the Rich Dad Company was formed. This website, our books and DVDs, our coaching, and financial education all exist to help equip you for the perils of our modern economy so that you can be sure to have the knowledge and practical application required to survive and thrive while others fail and fall.

For many, there is no choice about living on the edge. The die has been cast for us by people much more powerful and influential than us. But we can control our actions on the edge. It’s my hope you’ll step forward confidently and smartly, equipped with as much financial knowledge and courage as you can gain and muster. It sure beats the alternative.

To increase your financial education now, click here to find out about our free resources and online community.

S&P downgrades US debt

“If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.”

– Dave Ramsey

3 months ago S&P downgraded the economic outlook on US debt from “stable” to “negative.”

Last week Moody’s downgraded the economic outlook on US debt from “stable” to “negative.”

Last night S&P downgraded the US debt from it’s sterling “AAA” rating to” AA+ with a negative outlook.”

Just like S&P and Moody’s didn’t downgrade subprime CDOs until the mortgage-backed bonds they held were practically worthless, S&P waited for U.S. debt obligations to reach five times GDP and for the U.S. dollar to lose 84% of its purchasing power over the course of a single decade.

 

Cash Flow VS Capital Growth

 

 

Awesome post. I love these ones where Jeff Brown goes into the numbers and compares scenarios. I always knew there was going to be good money involved with getting good at story problems when i was young in school. I didn’t know how, but i knew..

Written By: Jeff Brown AKA “Bawld Guy”

BawldGuy Axiom: To the extent the real estate investor pursues cash flow, they hinder capital growth. The converse is equally true.

Let’s construct an example to illustrate the principle.

At 42, you own your own home, but will be buying your first income property. Your plans are to retire at 62, if possible — giving you 20 years to get the job done. You have no problem going to 65 if it makes sense. You have a total of $200,000 for down payment(s) and closing costs to get you started. If you opt for bigger down payments and higher cash flow, using accumulated cash flow for future purchases, you’ll begin with two initial acquisitions.

Two properties at roughly 260,000 apiece, using 35% down plus closing costs will take about $190,000 or so. The cash flow generated will total approximately $14,300 annually. It’ll take ya 6 years 8 months to accumulate enough for your next purchase. That’s IF interest rates haven’t risen too much, and IF there’s been no real increase in values. If either one of those is true, much less both, your plan hits a significant roadblock.

Let’s pause here and see how the capital growth approach plays out, using the same initial capital.

Using 20% down on one, and 25% on two more, he’ll begin with three properties. His cash flow will exceed $15,000 a year, but we’ll use that figure here. Each month he’ll be applying $1,250 in cash flow directly to the principal pay down of one of the property loans — not all three. I’ve dubbed it the BawldGuy Domino Strategy. You knock ‘em down one at a time.

In 8.75 years, (105 months) the first property is debt free and now cash flowing at just over $1,500 monthly. We’ll round down to $1,500.

With the vastly increased cash flow the second property is completely paid of in the next 4.67 years, (56 months). Elapsed time: 13 years, 5 months. Let’s finish it off now.

The third and last property is then paid off in 3 years, 1 month. Total elapsed time: 16.5 years.

In the 3.5 years he has left before retirement, if he chooses to wait, his cash flow would add up to, give or take, a tad under $193,000. ($55,080/yr) Think he might be able to find a use for that cash about then, don’t you?

OR . . .

He opts for borrowing enough to buy a couple more duplexes at 25% down. That option leaves him with an annual cash flow of $50,500 AND 5 properties. He pays off the newly refinanced property in 33 months. This leaves him just 9 months short of his planned retirement. What to do?

I have a suggestion: Delay retirement if necessary by 20 months. At that point all 5 properties are now completely debt free and producing annual retirement income of a couple steak dinners short of $92,000 — a 67% increase.

What he did there, was decide it was worth 20 more months of working to increase his ultimate retirement income by over $3,000 a month. If he decides against that, his income would be $55,000 yearly, but he’d retire on the date planned.

Let’s revisit the alternative strategy of using cash flow to buy more property.

Though a silly, and frankly, a dangerous assumption, prices remaining static for nearly 7 years — this strategy does just that. It’s no less silly than assuming prices will do anything, as his crystal ball is as cracked as the rest of ours, right? Right.

Anywho . . .

He buys his third property, which closes at the end of his seventh year. His first 2 properties now sport loan balances of about $149,400 apiece — almost $300,000 PLUS the new property’s loan of $165,000. Cash flow remains static. He owes $465,000.

He buys another property about 5 years later. Elapsed time: 12 years. He buys his 5th property at about the 16 year point. Let’s review where he’d find himself at 20 years, his intended retirement date.

He’d own 5 properties, though each one would be relatively heavily encumbered. Let’s me specific, shall we?

The initial two purchases are still sportin’ loans with balances of roughly $87,000 each.

The third property’s loan has a remaining balance of just under $123,000 at the targeted retirement date.

The fourth property’s loan still has about $146,000 left.

The fifth one has barely been dented, with a remaining balance of $155,000 or so.

Income at his scheduled retirement date using this strategy would be $37,000 annually, give or take a weekend getaway. I’m underwhelmed. You?

He’d still owe almost $600,000 before he’d have the same income had he used the more efficient capital growth strategy.

Go over these numbers a few times. Get comfortable with ‘em. Make your own charts or columns for comparisons in order to really get a clear picture of what they mean in real life.

BawldGuy Takeaway

In order to increase cash flow initially the real estate investor is forced to put more capital into each investment. The more down he puts, the less property he, or she, can buy. Over time this results in a somewhat nasty surprise — a sorta good news/bad news joke — only not funny.

The good news? Ha! Ha! You bought the same 5 properties as you would’ve doing it my way.

The bad news? When retirement time arrives, your choices are not too cool no matter how ya spin ‘em. Either retire at just over $3,000 a month till ya pay off another $600,000 in debt — which will take a truly long time.

OR

Delay your retirement by about the extra decade or so it’ll take to finish payin’ all that debt off. In simple terms, you can wait till your 70-72 to retire, or exist on $3,000 monthly till the $600,000 pays itself off — and that will be MUCH longer than a decade.

Beginning to see what I mean, Verne?

Look, this is nothing compared to what I could come up with, given enough time to get more deeply into the analysis. In fact, I’m fairly certain I could come up with a scenario with better results on the capital growth side of the comparison. But not so much on the cash flow approach. The whole “Save the cash flow and buy more property” comes from Grandpa.

Didn’t work real well for him, either. Just sayin’.

Too bad the banks pay to keep the system in their favor..

Most things that go through legislation are in the best interests  of the large financial institutions and the large attorney firms that represent them. Makes sense tho since most of our elected officials tend to represent the people that donate them the most $$$.