Taking "Pay Yourself First" One Step Further

The age-old adage in the art of saving away a few bucks for a rainy day and beyond, pay yourself first, is still one of the best ideas to not only plan for, spend around, but to also live by with absolute determination and commitment. For years I have advocated what I like to call the 80/20 rule which basically states that you only live on 80% of your means, and save and invest the 20% you don't need. These days the amount I save is actually higher since the 20% affords, eventually, an increase in your means through dividends, capital gains, and other things that the money "in the bank" tends to generate.

Money makes money is another thing everybody says, but that is also absolutely true.

Something that I find often gets overlooked in all of these concepts surrounding saving money is actually a very important factor that can, if not considered, eat away and terribly counter a great deal of the effort you put into your savings commitments.

The COST of money.

Where this factor is most encountered, it is when we are dealing with how we manage and use credit. Most people who understand credit also understand that there is a difference between good debt and bad debt. Naturally there are some people who will tell you that there is no such thing as any good debt. I am not in that camp. By my definition good debt is debt which leverages an  appreciating asset such as your home. In this instance the cost of the debt is typically negated by the appreciating value of what has been financed. Bad debt is debt that is used to leverage depreciating assets, such as a vehicle. But even I am guilty of making use of this kind of debt—although I do everything I can to minimize the impact. For example when my wife and I purchased our Ford Edge a few years back we put down $10,000 to keep the monthly payments down and reduce the overall interest we would pay. I did the same thing recently when I replaced my old Ford Sport Trac with a newer Ford F-150 and laid out $14,000 cash at the bargaining table.

But the worst debt is the credit card.

Credit cards can be used in ways that actually help you toward your savings goals. For example, I use a Discover card which pays me cash back on every purchase. The trick here is to pay the card as you use it otherwise the cash back rewards are really worthless.

But rather than use credit cards, and finally we're getting to the meat of what I meant when I said let'syour own line of credit? I call this little concept the Credit Savings Account, or CSA. Key here is that if you are following strict savings plans, there should be plenty of money sitting around somewhere that you can allocate to a "credit card" where you are your own bank. My CSA sits in my checking account and when I use it, it is as simple as swiping my debit card.

take the concept of paying yourself first one step further, why not simply establish

And by the way, this is a great way to also avoid overdraft fees, and WORSE, paying for overdraft protection which is absolutely a total waste of money.

Here is how I set up my CSA:

• Establish an amount to fund the account with and determine this to be the credit limit.
• Establish a day each month when you will make payments. Mine is on the 20th of each month.
• Establish an interest rate you will charge yourself. This can be whatever you want it to be. I typically charge myself anywhere from 15%-29.9% depending on the balance, but I never pay myself less than 15% interest.
• ALL INTEREST PAYMENTS MUST BE EITHER PUT INTO SAVINGS, OR USED TO INCREASE THE CREDIT LIMIT. THIS SHOULD NOT BE SPENDING MONEY.
• Establish a minimum payment based on at least 3%-5% of the balance. But of course you can repay yourself any way you want.

When I calculate the interest I don't bother with how credit card companies actually do it, using daily periodic rates and average daily balances etcetera. But of course if you want to you can do it this way—but it is naturally much more time consuming. Here is an example of how I will determine my payment and interest:

• Balance ($300) x 15% interest =  $45 / 12 months = $3.75 (this is my interest charge). Balance ($300) x 5% minimum payment = $15. In this example I will pay $15 on the 20th (my due date). Of the $15 I will apply $11.25 to the principle (balance) and direct $3.75 to interest (which will be deposited to my savings).

There is a caveat here. When you set up this account for yourself you must avoid playing games with yourself, such as forgoing making a payment, or playing around with the interest you charge yourself. This will foil any benefit a CSA will afford you. You are the banker. Act like one and fiercely demand payment and interest, and penalties when you don't pay.

Establishing a CSA takes paying yourself first one step further because it will accomplish two very important things. 1) it will force you to save more money away and 2) it will reduce your cost of money since you are using the CSA in lieu of traditional credit cards.

Perhaps even when I bought my vehicles I should have simply paid cash and set up a loan for myself.

Hmm. Something for me to consider on the next set of wheels I think. Let's keep our fingers crossed that Ford doesn't actually come out with a new Bronco or I may have to revisit this idea sooner than I would like.

Brokered Convention A Win For Hillary

So, we are of course still having to have the discussion, when it comes to the GOP convention in July, that there is a strong possibility of a brokered convention if Donald Trump, the clear front-runner in this presidential race, does not garner the 1,237 delegates he needs to seal the deal on the republican nomination. But why we are having this discussion at all is really the begging question, is it not?

In other circles someone commented to me that, "So you are okay if we break the rules for Trump if he doesn't get the required delegates?" I responded, and I think quite rightly, "Would we even be having this discussion if, say, Ted Cruz fell short of the 1,237 delegates before the convention?"

Of course that ended the discussion. Because the person who made that comment knows all too well that he would be okay if Ted Cruz, or anyone else for that matter, got the nomination without the required delegate count—but because we are talking about Trump here, that changes everything.

Because no matter how many times the GOP tries to give the impression it will support the front-runner, those of us who pay attention to what's between the lines know all too well if the GOP can find any way possible to deny Trump the nomination, that is exactly what they will do.

The thing that I find a little bit surprising here is that for years the republican party has been wanting desperately to find a candidate who can reach reach out and grasp hold of voters who might never even remotely consider voting for any republican candidate.

Donald Trump is doing that.

He is getting support from evangelicals and non-evangelicals alike. He is getting broad support (believe it or not) from women. He is getting broad support from (again, believe it or not) Hispanics. And while he may be falling a little bit short garnering support from blacks, there are still wide swaths of other demographics he is pulling toward the republican party that the party itself has not been able to do for a very long time.

He's even pulling in democrats.

There is another very big factor to keep in mind here and that is that Trump has also provided the republican party a huge (or should I say yuge?) increase in voter enthusiasm and voter turnout—when you look at voter turnout as a whole, enthusiasm and turnout is up 65% for republicans and down 45% for democrats.

How did Barack Obama win, partly? Voter turnout. Voter enthusiasm. Voters all but fell over themselves to get to the polls, and of course there were great efforts by PACs and other groups to load up buses and get voters to the polls to check the box for Obama.

Without a doubt Mitt Romney screwed the pooch on the campaign trail and I lay that down easily as a large contributing factor to his defeat, albeit a nominal defeat, by what was clearly a failed incumbent president. But you can also attribute low voter turnout as a large reason why Romney could not fill the gap. Many republicans were so unenthusiastic, and so not smitten with Romney as the candidate, that they just stayed home. If even a fraction of those people would have gone to the polls, it may have sent Obama packing.

I think even the GOP has to know that, in part, this is precisely why they did not win the last election.

So along comes Trump and gets the juices flowing. It may not be the guy that the republican party had hoped for to bring this along. But nobody else has been able to do it. And instead of embrace the victory this is, they only want to trounce Trump, stay the course, and disenfranchise large swathes of the very voters they have been trying to attract that Trump has attracted. Hell, he has practically laid these voters at the very doorstep of the republican convention.

Of course part of the problem the GOP and other republican and conservative voters have is that he's too brash, he's offensive, he's inexperienced, he's unrealistic, and whatever other word one can derive to relate to, "He will destroy America and bombs will fly."

Horse pockey.

The fact is that Trump is doing exactly what every single other politician has done before him—and I think we can now safely call Trump a politician. Donald Trump is telling the American people what they want to hear. It's that simple. And it is resonating and that is why the voting public is responding the way they are.

Read my lips, no new taxes. You can keep your doctor. We will attack pork barrel spending...

All of a sudden we are actually believing that everything a politician says he will do will actually be done? I mean, really. Are we really trying to say that here? We're trying to say this with a straight face?

When Donald Trump gets into the White House, if that is what happens, he will face the same realities and the same challenges as every single president always does. Not only that, but what defines an administration's accomplishments or failures is also largely dictated by what the focus of the day happens to be. Things happen, things occur in the world that cause presidents to have to shift focus, and of course there are multitudes of people that will surround any president and provide him or her with whatever current intelligence on a variety of issues happens to be...

And with reality front and center courses change.

Why would Trump be any different? I mean, don't get me wrong, he has my support in large part because he will do some things differently to my mind. But there are myriad things he won't do just because he can't, or because there will be enough smart minds surrounding him to give him some very important statistics and data and examinations into what the real and true impact may be of anything he has proposed. And like all president's do, he will change course.

Look, the bottom line for me is that if Trump gets the nomination we may lose the general election. Okay fine. Or we may not. Who really knows, right? Polls have been wrong, pundits have been wrong. It's always so easy to try and make an idea a truth when we all know it's not. But a few things are certain to lose the general and ensure Hillary winds up in the White House. To my mind, and without any doubt, one of those things is to broker the republican convention. If the GOP actually denies Trump the nomination no matter if he has the 1,237 delegates or not, there will be far more anger from the voting public than ever before that their voice is not being heard, that the establishment is rigging outcomes, and that the American people are sheep while the government and all of the power-mongers within the system don't give a flying rats ass about what the people want.

Precisely, by the way, one of the reasons that right now a guy like Trump is blowing it out of the park.

At the end of the day I think we should simply be looking at who out of the remaining three candidates have the most delegates (or two if Kasich finally comes to his senses that he has no chance of winning) and say okay. That's the nominee. Because otherwise what is all this other process about? Why did we waste our time with campaigns at all? Why did we bother to go before the American people and see what they think about who is running? Why waste time with all that if at the end of the day it doesn't matter, and no matter who the PEOPLE want it comes down who the PARTY wants?

Walmart's Reign As "King of Retail" In Jeopardy

There was a time when I would have thought, hey, Walmart is an unstoppable force. A company that could only go up in value, and that would continue to be the price leader in the retail sector. But what I am thinking now about Walmart is that since Sam Walton died, I think he took his company to the grave with him, and while the company has still grown considerably following his loss, the company now faces a plethora of challenges ahead, and same store sales are abysmal compared to years past.

The truth is that it seems to me that Walmart is failing in every way possible, and I think that makes Walmart not only go down in value eventually, I think it leaves open every single possibility for competing retailers to pick up the slack. And there's a ton of slack to pick up mind you. It's almost as if Walmart thinks its brand is too strong to fail.

I think they're dead wrong.

Besides the fact that most Walmart stores are cluttered and dirty, there is the issue of customer service which is seriously lacking. But rather than place the blame entirely on the employees, I think a large part of the blame should be directed at management. It's no secret that Walmart employees are not necessarily treated well. When it comes to cost cutting, the first order of business is to sock it to employees. Hours are cut, benefits are cut or non-existent, and while Walmart still enjoys nice margins and is still one of the largest—if not the largest—employer in the United States, employee wages are just slightly above the minimum wage.

Normally I don't complain about wages. You get what you earn and companies pay what they feel an employee is worth to the value and profitability of the business. But in a world where the focus has shifted from manufacturing to retail and service sector jobs, with Walmart being the leader in retail, I think that Walmart could have done a lot to prove the point that we could actually move into this kind of an economy and actually survive. But that has not happened. And I'm not sure it's entirely for lack of ability to do so.

I can find no reason why Walmart, being that is the largest employer in the country, could not have found a way to make its business model a powerhouse and take care of its employees as well with liveable wages, strong 401k plans, health benefits, and other fringe benefits similar to what manufacturing jobs may have offered.

And no, I am not suggesting that Walmart should have unionized, or that it needed to follow the path of unionized manufacturing. We see what happened with that.

But one thing that stands true for me is that when you are a company that relies, in large part, on the customer experience, the front line handing over that experience are the people who work in the stores. Friendly faces and helpful presence, and of course happy employees are going to work harder every day to keep the customers, a retailer's and retail employees' bread and butter, as happy and satisfied as possible. With Walmart's current—and really it has never actually been good mind you—state of employee relations, there are a good many employees who are simply punching the clock, collecting their paycheck, and going home. It's a job. There is no connection with the company's needs, and there is no connection with the consumer's needs either. And that's a huge problem.

The bottom line is that if you are a Target, a Dollar Tree, hell even a Kmart for that matter, all they need to do is examine where Walmart is going wrong, and close the gaps. If they do that customers will flock to their stores and Walmart will get trounced. What's more, a small and emerging company would be well positioned to take the reigns—although certainly a smaller company will have difficulty being price competitive.

But speaking about price, fortunately Walmart is making it easier these days for customers to try other places to shop because for a guy like me who knows what things cost, Walmart is no longer the price leader, and more and more items I buy wind up in other store's carts than in Walmart's. Whenever I step into a competitor's store it is their opportunity to win me over on other benefits like customer service. And in some instances, on some items, I may actually also be willing to pay a slight premium for that.

What's more, one day the economy will get better. In fact, I actually believe that we are on the cusp of something big in terms of jobs and median income, especially considering the jobs market has been so bad over the last 30 or so years. Employees are getting restless, that is unquestionable, and I don't think the status quo will be able to remain much longer. Companies are going to have to change their employee relations, and as the jobs market heats up not only is a company like Walmart going to have to ramp up their customer experience, they are going to have to ramp up their employee relations in order to find and retain a workforce that helps them achieve their goals.

Long and short for me here is two-fold. I don't like the future prospects for Walmart as a company and therefore I see no reason to own stock in them. As well, I can find many reasons to also avoid shopping in their stores.

We MUST Fix The Economy or Die

In business there are two realities; the way things should be, and the way things are. But at the end of the day what business is intended to do is to make as much money as possible, principally for the owners of the company. So you can't blame corporations for going overseas for labor if the balance sheets tell you that it just makes good business sense.

For years I have railed against the imbalances in our free market system, and that's saying something since I happen to be a strong proponent of the free market. But what I have argued is that what we have now is not really a free market at all. It's a market that is rigged and it's not necessarily because of the businesses, but because of policy which has made myriad deals with other nations which have served to suffocate the American worker, kill the middle class, widen the gap between the rich and the poor, and simply make our economy a real sour lemon.

I have long held that the key to the continuity of American progress economically is that we have to make things. Back in the day cheaper was a novelty. It was a convenience. People were making good money, and cheaper goods meant they could make it go farther. Now cheaper is a necessity. Median income has been nearly unchanged for the past 30 years—and that's a problem because inflation has not been stagnant.

You want to do the right thing and keep as much of your operations in the United States as possible. But when there are a multitude of things that hinder the sensibility of doing that, you are forced to rethink things and just "go with the flow."

Taxes, regulations, cheap labor overseas, unruly union leaders...

All of these things make it difficult for a business to operate within the margins and compete, not

only with foreign businesses doing business in the United States, but to compete with companies operating within its own borders.

Who knows this better than anyone? Businessmen. If you leave this sort of thing up to people who have never been in business what you wind up with are good intentions that look good in theory and on paper, but when put into reality it becomes clear to see that it's more than just a mess. It's a fucking disaster.

The simple truth is that both establishment republicans and democrats alike simply don't know what's wrong, and therefore don't really have the right solutions for fixing the problem. The democrats want to point fingers at the rich and big business, and want to tout unions who at one time had their place in the world, but are now corrupt and hugely bad for business, and who have done as much damage—if not more—to the stability of the American workers' wages than even the worst trade deals. And there are, of course, the trade deals, largely supported by the republican party in the interest of the free markets, which again, I argue aren't operating like a true free market at all.

Going with the "status quo" simply is not going to get it done. It's a failing proposition, and I think in part it is a large reason Donald Trump is getting so much traction in this presidential race. On the flip side, it may also be a part of why even a guy like Bernie Sanders at any stage in this race could ever be perceived by anyone to be viable—even for progressive liberal democrats. The signal, which is very clear, is that if guys like Sanders and Trump are resonating with voters it is because the majority of Americans—even if they are unclear exactly why—are finally starting to understand that they are no longer even running in place. They are going backwards. And if and until we address this matter, and right quick, it may be impossible to gain any traction economically.

Anyone who has ever had even a little bit of credit card debt knows that it is much harder to get out of debt the deeper in debt you go. If our economy is not fixed now. If the trade imbalances are not fixed now. If the trade deals are not renegotiated now...

We could lose our standing in the world as an economic power, and we may never get it back. Even if we finally work toward that goal, our country would be a second or third tier nation economically for the next 50-100 years.

Unfortunately, and I am a republican mind you, none of the other guys on the stage—not a single one of them except for Donald Trump—will do a damn thing to address the meat of why the economy is largely in the state that it is in.

Granted, Trump may not be able to get anything done either. I get that. But of all of the other candidates on the stage, he is the only guy stating what I have believed for years when it comes to jobs and business and the stability of the American economy.

Cheap labor has us by the balls and our hands our tied behind our backs so we can't loosen the grip.

But it's not just the cheap labor. It is simply a component. It's those fucking trade deals. The one thing we know of our history is that back in the day we knew there would be differences between one economy and another, and in order to level the playing field we made adjustments—tariffs. We have long gotten ridden of correcting imbalances by opening up Most Favored Nation status with countries like China. We've widened imbalances with deals like the North American Free Trade Agreement (NAFTA)—George H.W. Bush pushed for it, and Clinton eventually signed it into law—and the most recent Trans-Pacific deal. We have allowed Japan to dictate what we can sell to them, and likewise China. We have allowed China, in fact, to tell us flat out "if you want to sell to us, you have to make it in China."

What America has become, and not just in terms of economics, is a giant sell out, and who has been hurt badly by this is us. The American people. And despite our ability to vote our leaders in or out, we really have not had much control on this issue. We've had to simply do what is necessary. But again, continuing along that path puts us in a very real and dangerous situation. We are at that certain turning point in our nation on this issue among other very important ones. It's do or die. We simply must get it right this time around. If we do not, America as we know it may well be lost forever.

Trump: South Carolina And Beyond

I am not sure I will classify the Trump victory in South Carolina as necessarily a commanding lead. But the fact remains that Trump's win was by a margin of 10% over the second place winner Marco Rubio, and of course one of Trump's biggest critics, Jeb Bush, is no longer in the race. We have the Nevada primary coming up this coming Tuesday, and of course the big tell, Super Tuesday, is on March 1st. Something tells me that even if Trump doesn't win in Nevada, although he is predicted to win—again by a double digit margin—I think he will do very well when all of the numbers are in on Super Tuesday. And of course the field is going to narrow after Nevada's Tuesday primary, and by the time we get to the final call after Super Tuesday I think we'll be down to three candidates.

Donald Trump, Marco Rubio, and Ted Cruz. If Kasich's numbers don't add up in Nevada I think he'll drop out. So, perhaps, will Ben Carson.

In my opinion it is still too early to necessarily predicate on the idea that The Donald is an unstoppable force. But if we are looking at just the margins over the course of the campaigns, Trump at least appears to be the presumed nominee. The thought that crosses my mind is how can Trump have his Howard Dean moment in this race? He's said some fairly nasty things, and he said some things in the CBS debate just before the South Carolina primary that not only did not resonate with me, it rubbed a lot of voters the wrong way.

Yet he still won, and it wasn't really all that close actually.

If Donald J. Trump takes home the prize on Super Tuesday I think we can safely assume the republican voters in the caucuses have chosen who they want to see run against whoever is going to be the nominee on the democratic side—who I still think will be Hillary Clinton when all is said and done, and I am fine with that.

When I talk to most of my fellow republicans and conservatives of course I am chastised every which way but Sunday when I mention that I actually am rooting for Trump. Why do I like the guy?

•  He holds nothing back and takes no prisoners.
• He is the ONLY guy I think will actually address immigration reform even if I do not think he will be successful in having Mexico pay for the wall.
• He is the ONLY guy who I think understands fundamentally that trade is good, free market capitalism is good, but that we also have a rigged system that has stacked the deck in favor of OTHER nations while leaving American workers behind.
• Therefore Donald Trump is the ONLY one who is actually going to begin the process of renegotiating trade deals and ultimately to bring back jobs to American workers who badly need better than Walmart jobs to feed their families and pursue the dying American dream.
• He is deeply concerned about the advancement of ISIS, the instability in the Middle East, and takes seriously the very real threat of terrorism in the Homeland.

On the last point, I think all of the candidates left in the race have serious concerns about terrorism as well, and aside from Bush

who I thought was extremely weak on the subject, I think all three top tier candidates—Trump, Rubio, and Cruz—would all take steps to curb the threat from Islamic Jihadists. Trump may take the strongest stance however, and with that said, I do think that while Trump has good intentions, on this issue at least, he is going to have to surround himself with the best military and foreign relations people to get his head wrapped around a strategy that will work, that will circumvent unintended consequences, and that will not cause more damage in an already sticky situation.

The one thing that does sort of twist the knife if you'll let me put it that way is that while Trump is getting all the attention on the republican side, the fact remains that where Trump has missed the mark is on substance. He's missed the how's and the why's and how come's. And I think in a general election this detail is extremely important. When Trump gets to the big stage alongside Hillary Clinton who, love her or hate her, has command of her policy, and is well spoken, Trump cannot rely on personal attacks to get the attention of the American people. He has to shred every single idea and statement that Hillary puts forth. He has to command every single issue. He needs to explain in detail why his policies would work, and why he thinks Hillary's would fail. He has to be tough on Barack Obama and his failed policies, which of course Hillary will tout as grand successes, but not just by saying the president was weak or incompetent, but by explaining in detail why he believes the president's policies were bad, how they affected the American people, and if continued how they will continue to affect the American people.

Substance, at the end of the day, is the one thing Trump has lacked throughout the campaign, and the only thing that gives me pause when deciding whether or not even I—a Trump supporter—can ultimately pull the trigger if I were to vote today. Can Donald Trump have a moment like he had with Jeb Bush in the CBS debate where he called former president Bush a liar in a debate with Clinton? I don't think so. I don't think that kind of an exchange would go over very well at all. Although, I do think he can be tough on the issue of Benghazi—but again the approach as to how you do this needs to be careful and calculated. It can't just be name calling and flame throwing. That won't work in a general election.

So all said I give Trump great props for a job well done up to this point, and frankly because of the bullet point issues I am concerned about personally, would love to see him go all the way and get these important things done like nobody else can or will. But as we draw nearer to the strong likelihood that he actually wins the nomination, he really needs to begin the process now of filling in the blanks, and giving us more than what he has given us in the past—he needs to give us the how's and why's and how come's we've been dying to hear.

Because one thing is certain. Hillary will explain her stuff, and whether it is right or wrong, if Trump can't explain his, hers just sounds more thought out and sometimes reality is not what counts. Perspective is everything, and if Trump is perceived as one who doesn't know his way around things, it will cost him the election without a doubt.