Explain Investing And Finance

Explain Investing and Finance, Follow 5 Simple Rules For Both Investing and Finance

Topics on Tap Inside Explain Investing and Finance:

  1. Investing and Finance Rule Number 1
  2. Finance and Investing Rule Number 2
  3. Investing and Finance Rule Number 3
  4. Finance and Investing Rule Number 4
  5. Investing and Finance Rule Number 5
  6. FINAL THOUGHTS ON INV and FIN

Explain Investing And Finance

The two words investing and finance may send some people into a tail spin. But, for a relentless and determined mind, investing and finance can be mastered with relative ease. I firmly believe if you follow these 5 rules, or “general principles” if you will, you can become an instant expert.

Let me toss my experience into the ring so you know where I am coming from. I have actively practiced as a stock broker, real estate broker and mortgage banker. And, I also had an active seminar program in which I taught investing and finance.

I only tell you about my experience to let you know learning these fields can be done if it’s a genuine desire to learn. Never will I share my experience just for bragging purpose. I mentioned 5 general principles because in my opinion these principles should be applied to all investing and finance arenas. 

In order to make them work for you, all you need to do is add discipline to the mix. And that’s the discipline to put them in place and the discipline to follow them by exercising them at the correct times.

Subsequently, if you ask me, the first rule is blatantly obvious. So let’s get right into the thick of it.

Investing and Finance Rule Number 1

Pick a Strategy and Follow It

No one strategy will always be inherently better than any other. The reason no one strategy will always be better is because of the changing market dynamics. There are many ways to be successful in your investment arena. Different people will obviously use different methods to pick stocks.

For example, and all of these people will believe their method will successfully fulfill their investing goals.

Pick any other investing media and the same will hold true. Real estate, collectibles, automobiles, whatever, all require you to pick a strategy. Generally speaking, once you find your style, you probably want to stick with it for awhile. 

The second rule only sounds complicated. It actually becomes easier to do as you gain more confidence and experience in your investing method and style. And, the sooner you can master it, the sooner you will always have a profitable portfolio.

Finance and Investing Rule Number 2

You Should Always Sell the Losers and Let Winners Ride Out Their Course

And now it’s time for a quick explanation. However, I’m willing to bet you caught on to this one right away. Even though it comes across self explanatory I’ll give it a quick run down.

You’re going to sell the losers to preserve capital. You don’t want the asset to depreciate to zero. On the other side of the coin, you let the winners ride to as high a price as you believe it will go. Should you sell before it reaches the top NEVER, and I mean NEVER, bemoan the few dollars you let get away.
The road named the “Guaranteed Profit” road is paved by selling appreciated investments. Appreciated means they are worth more than you paid.

Which makes it obvious for once some appreciation isn’t a setup!

This just might be a real good thing after all!Your investment choice really doesn’t make any difference. For example, they could be stocks, homes, baseball cards or even collectibles. All of which have a value that goes up and down. Every investment has an up and down cycle. Your money is made when you sell high and buy low. And I’m willing to bet that’s another one you’ve heard before. 

Good thing I didn’t put it on this list, ey?

Investing and Finance Rule Number 3

Never, Never Ever Chase a Hot Tip

Number 3 is what I obviously decided to call the “hot tip” rule. The rule says to never, never ever chase a hot tip. Hot tips are another name for hot air in my personal opinion. Which in all fairness does come from a fair number of years experience. I believe a person should have more respect for their money. 

Another name for hot tip is insider secret. When stripped to the bone, both are shadows. Nobody ever caught a shadow.

Like other areas of your life, you have reasons, objectives and goals. Investing is no different, and should be treated no differently. It is important you know the reasons for doing so. As much as you possibly can, do your own research and analysis. This way you will feel more comfortable before you even consider making the investment. 

You probably have heard someone say, “Don’t sweat the small stuff.”  And, as it turns out, not only were they right, it’s also my next rule.

Finance and Investing Rule Number 4

Don’t Sweat The Small Stuff

When it comes to investing or your finance, don’t sweat the small stuff. And when I say don’t I mean Never. Stick to Rule Number 4 like glue. It will never do you wrong. And, just so you know, by “small stuff’ I mean regular and expected types of activity.

Stuff like; the ups and downs every market experiences from time to time, the short term side way swings or even a large block of stock hitting the market, etc. 

Even government treasuries have their ups and downs. In other words, don’t step over dollars to pick up dimes. You’ll be at least .90 cents poorer every time and it’ll be lucky if that’s all you lose replacing dollars with dimes. The next rule, rule number 5 is a little trickier than the first our. But just hang in there, I’ll make some sense out of this one. And if you’re real lucky after I make sense out of it, you’ll turn it into more than cents. 

Rule Number 5 

Focus on The Future and Adopt a Long-Term Perspective

Rule 5 could almost be coupled with rule number 4. This rule says to keep your focus on the future and adopt a long-term perspective. If you keep in mind that investing is really about trying to make informed decisions based on things that have yet to happen, you will maintain not only a sharp focus but a properly framed perspective.

Investing and finance have tendency to use past data as an indication of things to come. This isn’t always what happens but if you remember that what happens in the future is what matters most.

Successful investors base their decisions on future potential rather than on what has already happened in the past. The past serves merely as a guide post of the possibilities of the future, if these possibilities materialize.

I initially mentioned 5 general principles or rules as I like to call them. But after zipping right through the first 5 rules I’m feeling a little generous. I’m feeling like an extra rule is in order for you fine readers!

However, it’s not an actual rule per se, It’s more of what I like to call a “general principle”. And as a quick side note, Number 6 is pretty darn easy to say, but pretty darn hard to do. At least I always see the ladies and gentlemen new to investing have the hardest time with it. I have a theory why that is, but I’ll bore you with that another day. 

So Get Ready, Set, and Away We Go! 

Here comes the next rule which we’ll know as “General Principle 6”, and since I like to truncate things GP, 6!!

General Principle 6

A Person Should Always Keep an Open-Mind and a Short Memory

At least for the actual success of any given call, put or trade. Whether the last trade was a winner or a loser it doesn’t necessarily tell you anything about the next one. 

Remember, all markets, like I said above, have ups and downs. All markets have cycles. Keep an open mind and you will be able to maintain your focus and perspective.

Apply the 6 principles and you should be successful at avoiding becoming narrow minded and focused solely in one arena. There is potential in every market and every cycle. Maximize profits, minimize losses and investing and finance become extremely easy.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

**DISCLAIMER**

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

Real Inflation and Government Inflation

Real Inflation and Government Inflation

Real Inflation and Government Inflation, Financial Definitions, Information Resources for Seniors

Most people are not aware real inflation and government inflation rate percentages differ. They feel it in their gut but fall short when articulating what they instinctively know.

A thinking person would read the headline and ask themselves what is the difference between real inflation and government inflation. Smart thing to do by the way.

A smart question not only deserves an honest answer, it will get one too. There is a difference and the gap is huge in almost every measurable category.

By the way, this isn’t an article on zeroing in on how the government computes inflation. You can research that for yourself in any number of expose type articles offered up by Google.

This article tells you what your real inflation probably was, is and will be.

Why was, is and will be” you ask?

Because you’ve been lied to ever since the government began publishing the so called inflation rate. Subsequently, you’ll be lied to as long as they continue to publish an inflation rate.

“Why would they lie?”, I hear you ask.

Simple. They have certain obligations tied to the rate of inflation. Social security checks for example. And, no, this article is not anti Social Security.

You know that pot of gold (yes, I’m being facetious) that lands in your bank account on the first, second or third Wednesday of the month. The raises, if any, are tied to the inflation rate.

The raises have been between zero and two percent over the last 10 years. Imagine if the government had to pay the real rate.

Say the real inflation and not government inflation rate was eight percent. Your check would have gone up by eight percent and not the one percent you received.

This of course means that pot of gold called the social security fund would be in danger of going absolutely bottoms up. Oops, no more money would mean no more checks.

No more checks would mean our Washington politicians would be in grave, physical danger. They don’t like being in harm’s way. Of course they could cook the books.

Never mind. They already do.

A guy can’t blame them but then again a guy should only elect honest politicians. Oops, again, since that is an oxymoron.

So how do you know your real inflation rate? There are two rates. Pre-tax and post-tax. Most of us pay taxes so it is the post-tax rate we watch.

Consider these facts. Most of us use gasoline or diesel in our automobiles. The majority of us also buy groceries. Most of us use electricity or some other utility to keep warm or cool. And so forth, and so forth.

These facts all cost money. The gas station, like all merchants, has to charge for their products or they won’t be in business. We don’t want them out of business. Just stands to reason, right?

The real inflation rate happens to us every day. It is what we pay for our everyday items. Gasoline is a great example. We’ve all seen monthly prices escalate ten to fifteen percent. Sometimes it happens in a week.

Given that is true that means you and I pay whatever the pump reads. Unfortunately the pump doesn’t always read the same low number.

Let’s Fuel Up On a Quick Example

For example, last month I filled up the household car two times. The price of gas on the first visit was six percent lower than the second time. If buying gas was my only event of the year my inflation rate would have been six percent.

I was thankful I filled up at the low end of the price increase. Gas is probably the easiest, besides food, to use as an example. because all of us, in one way or another, are impacted by gas price fluctuations.

Unfortunately it wasn’t my only buying event for the year. I too like to eat so the grocery store was on the agenda. I use electricity so the power company was in the monthly mix as well.

Here is just one of my experiences at the grocery store. An item as simple as a can of beans will illustrate the point. At the beginning of the year the price was 88¢. Yesterday it was $1.08.

Every event was in my sphere of inflation but the government has a different idea about those events. They simply ignore them in their computations.

Yep, you read that correctly. The real inflation and government inflation computations differ because the government has the luxury of ignoring them. They happen to you and me but the government don’t acknowledge their happening.

Another “Not-So Shocking” Inflation Scenario

I mentioned using power. The power company is granted rate increases through a government agency. It was created to monitor how much we are being soaked. Over the years the power companies gradually slid the agency members from consumer advocates to consumer gougers. Rate increases don’t count in the inflation equation.

Hence, they can declare an inflation rate of any number they so elect. They do so by simply accusing them of being less important than their made up list and don’t include them in the algorithms. Hence computing a low inflation rate is easy-peasy, lemon squeezey according to the Washington D.C. number crunchers.

Since I don’t have children in college and my medical bills are almost non-existent I did not have to account for the rise in their respective costs. You, on the other hand, may not be so lucky.

If you aren’t, you need to factor those too into your real inflation rate and not the government inflation rate. If you don’t, you could go broke.

Some Final Thoughts That Hopefully Aren’t Deflating

Simply understanding the real inflation and not government inflation rate does little good unless we, as a collective body, take steps to right the ship. It won’t be easy. Nothing of this magnitude ever is easy.

Oh, for them it is. They make the rules, regulations, policies and laws. Moreover, if anyone is paying attention, they are people. You know, like you and me.

As such, we can replace them. Truth is we should be replacing them every election cycle. Then we might have a controlled real inflation and not government inflation.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

**DISCLAIMER**

Senior Outreach Ministries makes no warranty, representation, or guarantee regarding the information contained herein or the suitability of any products and/or services for any particular purpose. Any performance specifications are believed to be reliable but are not verified. Buyer must conduct and complete all performance and other testing of the products and/or services, alone and together with, or installed in, any end-products and/or services. Buyer shall not rely on any data and performance specifications or parameters provided by Senior Outreach Ministries. It is the Buyer’s responsibility to independently determine suitability of any products and/or services and to test and verify the same. Senior Outreach Ministries does not assume any liability whatsoever arising out of the application or use of any product or service. And in the name of full disclosure one should assume any ad they click on or purchase they make will provide us with a small fee. This is not added to the purchase price of any item or service you purchase. It is however one of the ways we fund the help we provide to seniors and their caregivers. Any recipients of our help as well as our staff thank you and appreciate you greatly.

Financial Literacy

Financial Literacy

Given the amount of information available from numerous sources you might believe financial literacy is through the moon. Unfortunately
it is not the norm. For example, a large number of people did not know what bankruptcy was.

Recent surveys conducted by two of today’s largest financial product based organizations paint a bleak picture. Financial literacy is regressing
rather than progressing.

Financial Literacy

The surveyors were shocked to learn the groups needing the information the most are the groups who don’t search for it. It seems those who are financially ignorant like it that way. And they did not say that by the way.

Surveyors learned the folks who are already financially literate belong to the group that keeps searching to learn more. It would be ironic if it wasn’t so sad.

The Financial Literacy surveys were conducted around eight main areas:

  1. Earning
  2. Consuming
  3. Saving
  4. Investing
  5. Debt
  6. Risk
  7. Insurance
  8. Information Sources

It would be hard to disagree that these aren’t important areas. After all, they stare us in the face every day of our existence.

Earning

I cannot imagine someone not knowing how to read their paycheck. Some folks had no idea what determines their take home pay. Incomprehensible to say the least.

If this important financial document isn’t important to a person I can’t believe any other financial document would be important.

Consuming

All of us consume everyday or we wouldn’t be alive. But, not being able to articulate where you spend your money, and on what, seems out of place. Especially in today’s society. But the surveys say otherwise.

Saving

An easy concept to be sure. Yet some respondents had no idea how to get the biggest bang for their buck. In other words, they couldn’t tell how they
would maximize their savings dollars.

Investing

This is an area requiring more study than a subject like saving. So, may be it is understandable that respondents did not know how to evaluate particular investments. Or, understand the risk associated with each type of investment. However, those are not poor excuses for foregoing a cursory attempt at financial literacy.

Debt

An extremely easy concept to understand. Or so you would think. Above all respondents couldn’t express the relationship between loan features and repayments.

Duh!

By the way budgeting was out of the question when it came to debt for these respondents.

Risk

I realize risk begins most people’s days. It is called waking up to an uncertain world no matter how many times we wake up.

When it comes to financial literacy people couldn’t explain the degree of risk associated with an action. Or the degree of risk they were willing to accept with regard to a particular investment.

Insurance

Types of coverage is all a person really needs to know about insurance. Subsequently, no one has to dive into the inner bowels of how the insurance industry works.

However, it would be extremely beneficial to understand how your policy works regarding your particular coverage. So, what you are paying for and why
would be a good start.

Financial Literacy Information Sources

We live in the age of information. For example even the homeless have access to information. They simply use the library and government agencies.

Finding appropriate sources and asking for advice isn’t a giant pain in the posterior any more. To clarify it is open source to borrow Internet language.

And, in most cases, it is absolutely and completely without cost. Therefore, a person does not have to take one dime out of their pocket.

Financial literacy, like understanding financial definitions, equates to financial well being. So if you have it, your life is better all around. Subsequently, if you don’t have it, seek it out. You’ll make a better life for yourself.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

Disputing Credit Card Charges

Disputing Credit Card Charges

Disputing credit card charges isn’t as hard as it may come across. I don’t know about you, but I’ve had to dispute credit card charges before. Maybe I was lucky. But I’ve only lost one dispute. The reason was I waited too long before disputing the charge.

Disputing Credit Card Charges, Disputing Fraudulent Charges on My Card

My bad.

A lecture seems to be in order at this point. However, lecturing is almost never taken too seriously. Because, we’ve grown immune to lectures and lecture oriented verbiage.

The very best way to keep from being involved in a credit card dispute is to be aware of each of your purchases. That is, you know not only the product. But the terms under which you are buying that item or items.

For example purposes only I’ll use a travel package from one of the multiple online travel sites. Most purchasers believe once they hit the pay link they own the airline tickets. Or the hotel reservations or whatever constitutes the purchased package.

These programs do not work this way. Take the airline tickets. You don’t actually own them until you show up for the flight. And then present the tickets to the counter agent.

Always Read The Fine Print

You didn’t bother to read the fine print on the website so you didn’t know that little detail. Your plans change and you can’t fly until one day later. You call the airline to make new arrangements and the agent lays out the details.

Details that put you in shock because they involve paying a huge amount of money. But, wait a minute you already paid for the tickets on your credit card.

Oops, you did but you don’t have control over the tickets. You really need to call the online site. And have them make the changes for you. Your credit card company won’t help even though you used their services.

They know who owns the ticket and will only agree with them if you dispute the charge. Not a good feeling and not a good spot to be in.

So you don’t find yourself in the same boat this short article will make a referral to a source with all the how to do it right information. That source is:

https://www.consumer.ftc.gov/articles/0219-disputing-card-charges

Yes, I could write a summary of the procedure. But then how much help would that be. In any event, disputing a charge can be easy or it can be difficult. So, according to me, visit the site and read what they have to say. You can turn difficult into easy if you pay attention.

To show you what I mean, here is the first paragraph on their website:

Have you ever been billed for merchandise you either returned or never received? Has your credit card company ever charged you twice for the same item or failed to credit a payment to your account? While frustrating, these errors can be corrected. It takes a little patience and knowledge of the dispute settlement procedures provided by the Fair Credit Billing Act (FCBA).

Notice the last 2 sentences. Don’t get frustrated. Get educated.

Good luck.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

Consumer Price Index and Inflation

Consumer Price Index and Inflation

The Consumer Price Index (CPI) and inflation are directly related. Although, the formula for calculating the inflation rate is relatively simple the truth is nobody gives a good gosh darn.

And maybe we shouldn’t given it is a government calculated number and the government actually tells us what it is for the year every year. In fact, watch any business show on television and you will hear the talking heads spew forth about inflation and the CPI.

Consumer Price Index and Inflation

It is helpful to know the agency responsible for computing the CPI and informing the general population of that number is the Bureau of Labor Statistics or BLS for short. They actually survey thousands of prices all over the country and formulaically compute the Consumer Price Index and the inflation rate.

For any index to be worth its salt it has to have a base rate to be used for comparison purposes. This means somebody or some agency sets that base. With the CPI it is the BLS and currently the base year for comparison purposes is 1984.

The truth is it wasn’t exactly 1984. What the government math wizards did was use the numbers from 1982 -1984 took an average and called 1984 the year the CPI was 100. Just like magic they had a year and a number.

What Does This Mean to Me?

What does all this have to do with me you might be asking. Well, maybe a lot and maybe nothing. I will say if you are a senior about to retire or are already retired this number is important.

You see, inflation eats away at your buying power. If something cost one dollar in the base year, 1984, but costs 1.98 today, inflation has eaten ninety eight cents more out of your nest egg.

It could get more complicated but why complicate a simple formula I’ll show you in a minute so you can break even with inflation. As seniors we face medical bills, taxeshospital bills. All the same bills pre-senes and younger people face too.

But what we don’t face is longevity to combat this bully called inflation. It simply eats away our money and we seemingly can’t shoo away the monster.
Year after year it nips at our heels.

Breaking Even With Inflation

Fortunately there is an easy to use formula to help us calculate the investment rate of return we need to “break even” with inflation. Expressed as a fraction it looks like:

Inflation Rate / 1 – Tax Rate

Obviously we need to know the inflation rate and our tax rate. I will assume the inflation rate is 5% and the tax rate (bracket) is 30%. Our equation looks like:

.05 / 1 – .3

Or

.05 / .70

Dividing we get this number: 7.14

7.14 expressed as a percent is 7.14 percent or .0714. This is the return we would need to receive to stay even with a 5% inflation rate in a 30% tax bracket.

We could have more fun with the Consumer Price Index and inflation but this appears to be enough fun for this article. Keep this formula in mind as you plan your retirement.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

The Granny Gift Tax

The Granny Gift Tax

The Granny Gift Tax, Capital Gains Tax, The Gift Tax, The IRS

The granny gift tax is a cute way of saying the IRS subjects gifts you give to qualified receivers to income tax. Imagine that….. The IRS taxes you for being kind.

Well, isn’t that special?

In truth this tax is simply called Gift Tax. The IRS devotes a lot of words about this tax here:

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes

They cover every question known to mankind on gift taxes on that page.

I call it the granny gift tax because grandparents and parents have been giving money to their siblings for a little longer than giving itself has been around.

The IRS came along in 1913. And, it’s been business as usual since. So when they recognized a good thing, they did what they always do, they taxed it.

The IRS isn’t a total Scrooge however since their rules allow, in 2019, gifts up to $15,000 annually per donor without either the giver or receiver having to report it on their personal tax form. If you are married you can give $30,000 to each eligible receiver without either party in the transaction suffering through reporting worries.

The rules are the same for same sex married couples. The granny gift tax cares not about your sexual orientation. The granny gift tax is an equal opportunity tax mechanism.

Taxes Can Have a Silver Lining?

This could be quite an estate planning tool for people with a high net worth. For example, assume a married couple has three children and each one of them is married. So, that makes a family of six eligible receivers.

Six times $30,000 equals $180,000. A substantial reduction in the size of the estate meaning the gifts reduced the estate’s value for taxing purposes. But, of course there may be more eligible receivers in this family tree thereby reducing the estate’s value for tax purposes.

The IRS does permit a donor to give more than $15,000. The worm in the apple is the reporting requirement. The receiver must report any amount over $15,000 and pay tax on this amount.

Above All Else, Always Take Care of Your Gift Taxes

Gifts larger than $15,000 should be coordinated with your estate planning accountant and/or attorney. In fact you should always consult a licensed, knowledgeable, competent professional. Running afoul of the rules could turn the gift from wonderful intention into sour apples. The taxman is the no excuses, non-forgiving type.

And, this doesn’t only apply to cash. But, securities, real estate, coins and all other assets. Any value over the magic base amount of $15,000 is subject to tax.

The granny gift tax has exceptions and exemptions. They will be covered in a separate article. The purpose of this informational resource was to point out the gift amount. And alert you to the possible tax consequence, should you go above the maximum.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

Federal Insurance Contributions Act Primer

Federal Insurance Contributions Act

The Federal Insurance Contributions Act is also known as FICA. It is the federal law requiring employers to withhold three separate taxes from their employees wages:

https://www.bizfilings.com/toolkit/research-topics/managing-your-taxes/payroll-taxes/what-compensation-is-taxable

https://www.bizfilings.com/toolkit/research-topics/office-hr/employee-or-independent-contractor-feds-and-states-join-forces-to-fight-worker-misclassification

A large number of employees are not aware of this triple whammy tax:

  1. The 1st tax is the Social Security tax. In short, it is at a rate of 6.2%. And this portion is matched by your employer. Subsequently at the exact same 6.2 percent rate.
  2. The 2nd tax is a 1.45% Medicare tax sometimes called the “regular” Medicare tax.
  3. The 3rd tax is a Medicare surtax. The 0.9% rate applies when the employee earns over $200,000

The third tax went into effect in 2013. The employer is also taxed at a 1.45% Medicare tax rate. In conclusion, neither can escape the Medicare surtax.

And don’t worry, the government did not forget the self-employed. Firstly, they pay 12.4% for Social Security. And then secondly 2.9% for Medicare. The total equals 15.3%.

The law always provided a maximum amount of earnings on which the Social Security tax will be collected. In 2019 https://www.moneytalksnews.com/3-ways-social-security-will-change-in-2019/

Certainly Not A Silver Lining

The Social Security tax will be collected on earnings up to $132,900. Any earnings above and beyond that amount are not taxed. As far as Social Security taxes go.

Any and all questions about these taxes are answered on https://ssa.gov. As a result The Social Security Administration was kind enough to provide a philosophical way to look at FICA taxes:

“The money you pay in taxes is not held in a personal account for you. It is not used when you get benefits. Today’s workers help pay for current retirees’. As well as the benefits of other beneficiaries’. Any unused money goes to the Social Security trust funds to help secure today. As well as tomorrow for you and your family.”

It is always a wonderful feeling to know you are doing your part to help current retirees. And other beneficiaries receiving benefits from social security as well. That is to say The Federal Insurance Contributions Act offers both a sunshine glow and a warm fuzzy feeling.

Your Lifetime Earnings Record

Paying into Social Security creates a lifetime earnings record. According to SSA your lifetime earnings record is:

“a chronological history of the amount of money you earned each year during your working lifetime.”

Keeping track of what is in your record is your responsibility. Because The SSA said so. It’s critical to check the accuracy of your earnings record. So make you check it. And make sure you do this at least annually. Because certain errors will result in a smaller monthly benefit.

The Federal Insurance Contributions Act has other moving parts. We will address the other moving parts in future articles.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

Truth In Lending Act a.k.a. TILA

Truth In Lending Act a.k.a. TILA

Because you’re like me the Truth In Lending Act (TILA) and medical billing seem like two polar opposites. I found out differently because of open heart surgery in 2006. Which can happen to seniors and pre-senes alike.

Federal Truth In Lending Act, TILA
Click The Image Above For the Full-Size Copy

When you enter the hospital to have a procedure one of the first stops is the admitting office. And it’s in this office you and a foot tall stack of forms meet. And, one of those forms is usually titled: Federal Truth In Lending Initial Disclosure.

Oddly you can click the image above to enlarge it. For those of us whom are unaware the Truth in Lending Act or TILA, 15 U.S.C. 1601 et seq., was enacted on May 29, 1968. It’s enacted as title I of the Consumer Credit Protection Act (Pub. L. 90-321). Feel free to ignore the legal mumbo jumbo. Because knowing it is the law is more than sufficient for our purposes here.

The Truth In Lending Act states you as a patient have certain rights. You have to be told everything about the cost of doing business with that particular institution. See, you are actually getting a loan from them.

For this article’s purpose we’ll assume you didn’t know that. And, neither did I until that fateful morning. And, it’s not assuming in my case.

The paragraph referred to as et seq. above, states:

First, we’ll define “material disclosures”, then we’ll talk about the form.

Material disclosures are the disclosures of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed. It goes on to include the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, the due dates or periods of payments scheduled to repay the indebtedness. As well as the disclosures required by section 129(a) too.

Please click on the smaller image above. Because you want to follow along with us.  It will open a larger image. Inside this larger image you will find underlined sentences. And, the underlined phrases are my doing. Notice the underlined phrase “balance upon which a finance charge will be imposed”. Also take the time to notice “the amount to be financed”. These phrases lead a person to believe they will see numbers on their disclosure.

My disclosure did not contain any amount in numbers. Only the words “unpaid balance”. No amount appeared in dollars either. Only the words “unpaid balance”. My disclosure is 3 pages long. But, I only posted the first page. At the top of this article. So, you can see how they addressed these 2 phrases.

How the Truth in Lending Act Was Violated, in My Opinion

It is my opinion they violated the spirit and intent of TILA. And, I did not complain or file any formal grievance. Because I had excellent health insurance coverage at the time. In fact, I keep my out of pocket expenses to myself. Because they were so low I am embarrassed to tell them. Thank you, United States Air Force. 

Besides, what I paid is immaterial. It is what you will be charged and expected to pay. My humble opinion tells me absent the actual figures and posted prices (TILA says prices must be posted) these institutions can get away with literal robbery.

A Relatable, Real Life Example

Think of buying a car. The price is posted. And if you wrangle a lower price that number shows up on the contract. If you have to finance that amount there is no guess work as to the amount financed. And the interest rate you will be charged.
This is not what the institutions do. They don’t put a price on the form. But they do tell you the interest rate you will be charged. As you will see. Just to be clear, so we’re on the same page. You don’t know the amount of your charges, but you know the interest rate..

Unpaid balance means diddly squat. Because letters aren’t numbers. You don’t know the price of the procedure(s) before you sign the form. To me, because of this, they violated the spirit and intent of the Truth In Lending Act.

**DISCLAIMER: I am not a lawyer and I don’t play one on television but I believe you have a good legal argument should you contest the charges**

By the way, all disclosure forms must tell you have a right to contest the charges and a right to ask for financial assistance. If you are uninsured or underinsured it is in your best interest to ask for financial assistance.

Make sure you read the form. Make sure you understand the form. If you have any questions ask them BEFORE you sign the form. Because once you sign the form, you are legally bound

You can also cross out any paragraph you oppose. On my form I crossed out and initialed the paragraph titled: Consent to Use of Information. It was written in broad terms almost giving away all of my privacy.

Final Thoughts

Let me repeat myself. Before you do anything else, make sure you read this form. Most importantly, understand this form and ask questions before you sign this form. Above all, it is that important.

Rather than try to list all of the considerations the advice is to schedule an appointment with a SS rep at your local SS office. Or, in the alternative, visit https://ssa.gov and do an online search.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.

703 Retirement Plan

703 Retirement Plan

You may have received emails or seen ads talking about the 703 retirement plan. If you are like me, when you saw that weird looking retirement plan you wondered what the heck is it all about.

703 Retirement Plan, Saving for Retirement, Retirement Topics

As it turns out the author of the email or ad is using a clever twist of words to entice you to subscribe to a particular email newsletter. They can’t just say, hey, subscribe to my newsletter for $XXX a year because nobody would sign up. So, they use a bit of intrigue/curiosity.

The 703 plan is what the real investment world calls a Dividend Re-Investment Plan or DRIP. It has several moving parts.

The first is you must own a stock that allows you to reinvest the dividend into buying more shares instead of taking the dividend in cash. For example fictitious company JXN allows you to DRIP.

They pay a quarterly dividend of $1 per share. And you own 200 shares. Rather than taking the $200 in cash you use those dollars to buy more shares of JXN. As you might guess more shares means you have increased your holding. Plus your dividend will be larger next quarter because you have more shares.

And now for the second moving part. Most brokerage companies charge a fee to reinvest your dividend. Oops, you’ve just decreased the number of shares your $200 will buy. No worries. The 703 plan shows you how to bypass your broker and save the fee and/or commission charge.

Semi-Related Investment Info

All you have to do is subscribe to the newsletter being offered and you’ll learn the secret bypass method. Well, I say, simply click on this link or the title and download the information without subscribing to anything. I titled it, “The D.R.I.P.”.

And to bolster your investment library click this link, or the title, to get a second primer, “And Capital Appreciation Too”. Both are 100% free!

You are welcome to subscribe to our newsletter by >>CLICKING HERE<< but you don’t have to. Simply click the links in the above paragraphs and you’ll get the reports. It’s that easy. We think you should put that information to use whether you’re a member we email our newsletter twice a month or not.



Senior Outreach Ministries achieves it’s objectives with the capital we’ve either earned or received from donors. The Proud 2 B A Senior Ribbon for example. Donate $5, get a ribbon and help us help a hungry Senior Citizen in need. All proceeds remain in the Ministries to be used per our mission statement. We are a volunteer church. No one receives a salary or wage. Please help us help less fortunate hungry Seniors. We never have and never will ask the government for grants, funds or hand outs. Thank You in advance.