There’s a very interesting documentary on Google Video – The Money Masters.

It traces the history of money in America and how the Fed is screwing the American people. Incredibly interesting. Its 2 hours long but worth it.

It explains how the standard of living has decreased in the past 25 years and how rampant inflation is caused by the fact that the US Government doesn’t own the money, but rather borrows it from the Feds, who charge interest for this.

The Fed is not a government entity but a group of private banks whose sole motivation is to make the highest return on their money.

Also the banks are able to lend money using “Fractional Reserve Banking”. Basically the same dollar is lent out 10 times at 8% giving them a total return of 80%. Essentially, they use our money to push us deeper into debt. And since good old Bush passed a law making it almost impossible to file bankrupcy, we’re destined to a life of slavery!

Yet another reason to invest in foreign currencies and gold!

To hear a great conspiracy theory by well-known director Aaron Russo listen to his interview about his new movie, Freedom to Facism.

I tried to open an account with an online bank called Everbank. Apparently they want color photos of my passport, a notarized letter from my bank and a filled out W-8 form. This is too much work!!! All I wanted to do was open a CD which invests in foriegn currencies like the Canadian, Australian and New Zealand Dollar.

Instead I decided to open an account with Interactive Brokers. They even have better interest rates and the money is much more liquid.

check out this site. http://www.forsakencraft.com/proof.htm.

The condo I sold last year is already down 15%. I’m renting it back from the buyer. She bought it as an investment on a 3/1 ARM with 10% down. I glad I got out. Some one of my friends weren’t so lucky.
Check out this cry for help.

British Expat is a pretty good site about British Expats living in diferent parts of the world. They have a really good article about setting up a biz in Australia, but even if you’re not down under, its still a pretty good read.

After practising in Perth as a business broker for a few years, assisting migrants (I was a migrant from Zimbabwe myself six years ago), I am very aware that only the hard-working, informed, alert and “hands on” business owners are making money. The rest have bought themselves a job, together with all the responsibilities and stress of running a small business.

I appraise many businesses which new owners have been running for only 6-18 months and they wish to sell. Many of these businesses that you will find advertised on the market are there because, for some reason, the profit margins are in decline, or the owners have worked themselves to a standstill to make the business work, and have ruined their health along the way.

A new migrant must be careful not to fall into the same trap!

Having seen so many of the mistakes that other people have made (and made some myself, when I arrived), here are a few tips which may help you to choose the correct business to buy:

· Never put all your savings into a business so that if it fails, you have nothing left to fall back on. Only risk what you can afford to risk.

· Try to buy a business which you know about. Trying new, unfamiliar things increases your risk.

· A vendor offering vendor finance is often doing it because it is the only way he can sell the business. This is not always a bad sign, but it can be.

· Imagine yourself in the business doing the same thing every day for the next 5 years!

· Check everything that you are told. The owner wants to sell and the agent is rewarded by the owner to sell. You will have to look for the negatives as probably only the positives will be pointed out to you.

· Always look for a business which you can add something to or improve on, otherwise leave it. If the profit has not been improving, it is most probably on the decline.

· If the business has only one or two customers, check if there are contracts in place. If not, imagine what will happen if these customers are lost. You may be paying goodwill for business which may disappear after a few months.

· Examine many similar businesses until you start to feel that you know what you are looking at and can see the differences from one business to another. Then you can pick out the good ones.

· After you have signed a confidentiality document, the vendor should be up-front and open about the business – and the figures. If not, this is a warning sign. The best businesses that I have sold have been the ones where the vendors have to sell for a very good reason and they are quite happy to show all their figures.

· Never pay for “potential”. If the last owner did not follow up all this potential, you probably will find that there is none.

· If plant or property are involved, have your own independent valuations done and do not hesitate to ask questions to business owners in a similar trade. NB Be careful not to break your confidentiality agreement when you are doing this.

· Try to discreetly check on the vendor by asking your accountant to do a credit investigation for you. The vendor will have to approve this but if there is resistance – wonder why! Try to carefully find out who knows the vendor and listen to what they have to say about him or her. The more you know about the vendor and why the business is for sale, the better.

· Insurance premiums have soared recently in Australia and many small businesses are selling because they cannot afford the premium. Always check on the future insurance costs before signing any documents.

· Make sure that the business is being sold as a going concern (or GST will apply to the sale)

· Think cautiously about any start-up business invitations (unless there are signed contracts for the sales in place) and very carefully about venture capital projects. These can be good to go into for only those with spare funds to gamble with.

· If you are worried about your visa requirements, you will get different opinions and advice from all quarters. It costs nothing to visit the Immigration department for advice. Always follow up the meeting with your understanding of it, in a letter to the head of the immigration department, so that it is on record in your file. Keep a copy of everything you write or receive from anyone.

Take your time and do not allow anyone to rush you. There is always another business out there!

If you are considering migrating to Perth, Western Australia, I suggest you contact the Small Business Development Corporation in Perth www.sbdc.com.au for free advice and even possible sponsored business migration. This organisation can supply you with most of the information and assistance you require. They will post you an information package on application.

Once you have found a business which you can afford and which you feel comfortable with, show it to their experienced staff. It is always good to let an unbiased person look at what you are doing. You may be driven by the passion or financial need to buy a business, or both, and may need some logical facts pointed out to you by an experienced person. A vendor or business broker will be driven by the desire to sell and may not have your interests at heart.

The SBDC will also be able to give you an idea of what return on investment you should look for in the industry which you have chosen to buy into. All business agents should have examples of recent sales in every industry and what the estimated return on investment is. Speaking very generally, if you buy a business in Perth, you should be able to earn your money back in two to three years.

Try to find an accountant who has bought and sold businesses himself. You usually need a very good one at this stage. Accountants can check that figures balance and do tax returns, but many of them do not have an instinct for business. It is essential that you have the right person to advise you at this stage.

It is worth spending the money on a lawyer for the agreement, when you buy a business. Again try to find one who specialises in business agreements (a divorce lawyer may not have had much practice!).

Well run, profitable businesses are not easy to find but if you search constructively and widely and put in the essential research and necessary hard work, you will be successful and end up buying a good one.

Written by Rosalind Baker, Business Broker in Perth rozzie@space.net.au

As if there wasn’t enough bad news floating around about the housing market, BusinessWeek had another article on it.

The option adjustable rate mortgage (ARM) might be the riskiest and most
complicated home loan product ever created. With its temptingly low
minimum payments, the option ARM brought a whole new group of buyers into
the housing market, extending the boom longer than it could have otherwise
lasted, especially in the hottest markets. Suddenly, almost anyone could
afford a home – or so they thought. The option ARM’s low payments are only
temporary. And the less a borrower chooses to pay now, the more is tacked
onto the balance.

The bill is coming due. Many of the option ARMs taken out in 2004 and
2005 are resetting at much higher payment schedules – often to the
astonishment of people who thought the low installments were fixed for at
least five years. And because home prices have leveled off, borrowers
can’t count on rising equity to bail them out. What’s more, steep
penalties prevent them from refinancing. The most diligent home buyers
asked enough questions to know that option ARMs can be fraught with risk.
But others, caught up in real estate mania, ignored or failed to
appreciate the risk.

There was plenty more going on behind the scenes they didn’t know about,
either: that their broker was paid more to sell option ARMs than other
mortgages; that their lender is allowed to claim the full monthly payment
as revenue on its books even when borrowers choose to pay much less; that
the loan’s interest rates and up-front fees might not have been set by
their bank but rather by a hedge fund; and that they’ll soon be confronted
with the choice of coughing up higher payments or coughing up their home.
The option ARM is ‘like the neutron bomb,’ says George McCarthy, a housing
economist at New York’s Ford Foundation. ‘It’s going to kill all the
people but leave the houses standing.’

What are we missing? We squint. We look around. We scratch our heads. And
then, we look under the cushions and behind the chairs. How can a consumer
economy keep consuming when the consumers have no more money? Or, is there
a source of revenue we have overlooked?

“With soaring stock portfolios now ancient history and leaping house
prices about to be,” writes Gary Shilling, “no other sources, such as
inheritance or pension fund withdrawals, are likely to fill the gap
between robust consumer spending and weak income growth. Consumer
retrenchment and the saving spree I’ve been expecting may finally be about
to commence. And the effects on consumer behavior, especially on borrowing
and discretionary spending, will be broad and deep.”

Shilling expects house prices to drop by at least 20%, which will cause a
“major recession.”

My wife’s currently pursuing her Master in Accouting with emphasis in Taxation. One of her professors is a pretty smart guy and usually spends 6 months of the year travelling abroad and generally enjoying himself. I’m assuming he makes a lot of money from his investments, book royalties and consulting gigs [apart from the salary he gets at college].

A few days ago he mentioned that he investing heavily in Australian dollars and that he thought the US Dollar was overvalued by 40%!!! I think 40% is a little steep. Maybe the local real estate is overvalued by 40% but the dollar can’t be that high can it ???
I personally think the dollar will drop 20-25% over the next few years which is why I’ve been buying commodities and commodity stocks. But a 40% drop!! Why that could set me up for life! [just kidding, i’ll make twice as much money in my investments, but inflation will still kill me]

Anyway, I just picked up Getting Rich Outside the Dollar by Christopher Weber & Leonard J Reiss. It was written quite a while ago, but the underlying concepts should be the same.

Todays news is Donald Trump fires his sidekick Carolyn Kepcher after more than 10 years!

Atleast she last a lot longer than most contestants and she also got a book deal out of it!! Maybe she should read the “Joys of not working” 😉

Also, Warren Buffett married his long time “companion” Astrid Menks at the good old age of 76. I guess there wasn’t any pre-nup since Buffett’s already given up most of his wealth to charity!

I recently referred a co-worker to TDAmeritrade. I was supposed to get $50 and he was supposed to get 5 free trades. Well neither of us got squat so I had him call customer support. At first he didn’t believe there was an such promotion so I had to tell him to look on their website’s front page. In about 4 minutes he agreed and gave us both 10 free trades!

I think the promotion is still valid.

Through my meandering web-surfing habits I came across two very interesting books. They deal with not working. One of the authors was fired from his engineering jobs and says it was the best thing that ever happened to him. That was 25 years ago and he’s never looked back.

Real Success Without a Real Job

The Joy of Not Working: A Book for the Retired, Unemployed and Overworked- 21st Century Edition

Talking about not having work, Radio Shak emailed 400 employees that they were being terminated!

Employees at the Fort Worth headquarters received an email Tuesday morning telling them they were being dismissed immediately. “The work-force reduction notification is currently in progress,” the notice stated. “Unfortunately your position is one that has been eliminated.”

And since we’re talking about author Ernie Zelinski, might as well check out his other highly regarded book on retirement [actually its supposed to be about living!]
How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor .

Amazon launched an Affiliates Bookstore. I tried it out but its still a little buggy.

The interface isn’t very flexible. You can only add 9 books[products] and if you want to swap one out with another one, you can’t. Anyway its free, and thats hard to beat!