Having a million-dollar portfolio is a retirement dream for many people. Making that dream come true requires some serious effort. While success is never a sure thing, the 10 steps outlined below will go a long way toward helping you achieve your objective.
1. Set the Goal
Nobody plans to fail, but plenty of people fail to plan. It's a cliché, but it's true. "Plan" is the leading self-help advice from athletes, business moguls and everyday people who have achieved extraordinary goals.
2. Start Saving
If you don't save, you'll never reach your goal. As obvious as this might seems, far too many people never even start to save. If your employer offers a 401(k) plan, enrolling in the plan is a great way to put your savings on autopilot. Simply sign up for the plan and contributions will be automatically taken out of your paycheck, increasing your savings and decreasing your immediate tax liability.
If your employer offers to match your contributions up to a certain percentage, be sure to contribute enough to get the full match. It's like getting a guaranteed return on your investment. Finding the cash to stash may be a challenge, particularly when you're young, but don't let that stop you from pursuing future riches.
3. Get Aggressive
Studies have shown that the majority of the returns generated by an investment are dictated by the asset-allocation decision. If you are looking to grow your wealth over time, fixed-income investments aren't likely to get the job done, and inflation can take a big chunk out of your savings.
Investing in equities entails more risk, but is also statistically likely to lead to greater returns. For many of us, it's a risk we have to take if want to see our wealth grow. Asset-allocation strategies can help you learn how to make picking the right mix of securities the core of your investing strategy.
4. Prepare for Rainy Days
Part of long-term planning involves accepting the idea that setbacks will occur. If you are not prepared, these setbacks can put a stop to your savings efforts. While you can't avoid all of the bumps in the road, you can prepare in advance to mitigate the damage they can do.
5. Save More
Your income should rise as time passes. You'll get raises, you'll change jobs, and maybe you'll get married and become a two-income family. Every time more cash comes in to your pocket, you should increase the amount that you save. The key to reaching your goal as quickly as possible is to save as much as you can.
6. Watch Your Spending
Vacations, car, kids and all of life's other expenses take a big chunk out of your paycheck. To maximize your savings, you need to minimize your spending. Buying a home you can afford and living a lifestyle that is below your means and not funded by credit cards are all necessities if you want to boost your savings.
7. Monitor Your Portfolio
There's no need to obsess over every movement of the Dow. Instead, check your portfolio once a year. Rebalance your asset allocation to keep on track with your plan.
8. Max Out Your Options
Take advantage of every savings opportunity that comes your way. Make the maximum contribution to tax-deferred savings plans and then open up a taxable account too. Don't let any chance to save get away.
9. Catch-Up Contributions
When you reach age50, you are eligible to increase contributions to tax-deferred savings plans. Take advantage of this opportunity!
10. Have Patience
"Get-rich-quick" schemes are usually just that - schemes. The power of compounding takes time, so invest early, invest often and accept that the road to riches is often long and slow. With that in mind, the sooner you get started, the better your odds of achieving your goals.
The Reality Of Retirement
Retirement might seem far away, but it when it arrives nobody ever complains about having too much money. Some people even question whether a million dollars is enough.
That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortable life after work.
Showing posts with label News. Show all posts
Showing posts with label News. Show all posts
Sunday, October 26, 2008
Tuesday, October 14, 2008
Victoria Beckham's Housekeepers Arrested for Alleged Theft
Two housekeepers who work for David and Victoria Beckham have been arrested for suspicion of theft.
Police busted Eric Emmett, 55, and his wife June, 56, as well as a 25-year-old man, after several of the Beckham couple's items -- including Victoria's dresses and David's soccer memorabilia -- ended up on eBay, the Associated Press reports.
Eric Emmett told BBC News the allegations are "nonsense."
While no charges have been filed, police issued the following statement:
"We are currently investigating an allegation of theft from a private address in Sawbridgeworth. The theft was reported to police at 4:45 p.m. on Friday, October 10, 2008. A 56-year-old woman from Essex and a 55-year-old man, also from Essex, have been arrested in connection with this incident and are currently on police bail."
Added an eBay rep: "If it transpires that our site was being used to list stolen goods then we will work with the police to press for the harshest penalties."
Police busted Eric Emmett, 55, and his wife June, 56, as well as a 25-year-old man, after several of the Beckham couple's items -- including Victoria's dresses and David's soccer memorabilia -- ended up on eBay, the Associated Press reports.
Eric Emmett told BBC News the allegations are "nonsense."
While no charges have been filed, police issued the following statement:
"We are currently investigating an allegation of theft from a private address in Sawbridgeworth. The theft was reported to police at 4:45 p.m. on Friday, October 10, 2008. A 56-year-old woman from Essex and a 55-year-old man, also from Essex, have been arrested in connection with this incident and are currently on police bail."
Added an eBay rep: "If it transpires that our site was being used to list stolen goods then we will work with the police to press for the harshest penalties."
Monday, October 13, 2008
5 Salary Secrets Your Company Won't Tell You
It's normal to wonder how and why you get paid the salary you do. After all, it's not a decision process most employers are willing to disclose, at least not without a little prodding. So what are the best-kept secrets when it comes to salary decisions at most companies? And how can you use them to your advantage? Let's take a look.
1. For most companies, 3.9% is the average budget increase for salaries.
Yes, sad but true. According to the 35th annual WorldatWork Salary Budget Survey, the "actual increase in salary budgets was 3.9% in 2008." The number is expected to stay the same in 2009.
This means, that for most U.S. workers, the average raise will be about the same, with "high performers" receiving about a 5% raise, and "low performers" receiving 2% or less, the survey authors note.
"When people are looking for 6-8%, well, very few people are getting it," says Rebecca Mazin, co-founder of the HR consulting firm Recruit Right and author of "The HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals."
Knowing this can make it easier to stomach a 4% raise -- while it may not equal big money, it actually means your employer values you. Anything more means you're likely considered a top performer, and anything less means you may be underperforming.
2. Your employer (or future employer) may not know the current salary averages.
Just because a whole wealth of salary information is online these days doesn't mean your company has any idea what the normal salary is for a person in your field and in your city. If you do your research and discover your salary is abnormally low, it can be a great negotiation tool when you talk to your boss about your annual raise -- or when you're accepting a new job offer. He or she will realize they could easily lose you since many competitors nearby are paying better.
"You need to go in with some data behind you; you at least need to know what the going rate is," says Dawn Rosenberg McKay of About.com Guide to Career Planning. "[That way] you'll know if you're being outlandish or asking for something ridiculous."
3. Most managers have a short memory.
Raises are given annually, and so it's important to keep track of all your achievements within the past year -- don't expect your boss to remember your big project from eight months ago. Using a spreadsheet or a special email folder, keep track of your accomplishments as they happen, so when the time comes, you have a strong case for a raise.
Accomplishments that show you've either saved the company money or earned the company money are the best ones to highlight, especially if you can specify an exact figure. If that's not possible (which is the case for most employees), take note of any extraordinary praise you received from managers or fellow coworkers, any special thanks from clients, and any other ways that demonstrated you went above and beyond your normal job duties.
4. Your manager probably has little influence over your salary.
Decisions about salary increases for all employees at a company are often made at a high level of management. So, even if you follow all the tips above, your manager may have minimal control over your raise. Case in point: Mazin recently worked with a nonprofit organization whose board decided to give every employee the exact same raise.
There's not a lot you can do in this situation, but if it leaves you feeling dissatisfied or taken for granted, it may be time to look for a new job.
5. Threatening to quit can result in a big wage increase (but it's risky).
If you're hoping for a big raise, or were disappointed by a recent raise, you may want to start job searching. For most people, the biggest salary jumps they have in their careers occur when they get a new job or threaten to quit because of a tantalizing job offer.
Sometimes, telling your current employer about your new gig can be a potent bargaining chip -- they may be willing to match the new offer just to keep you. But not always, as Mazin points out, so don't let your plan backfire. Make sure you really want that new job -- and are ready to quit your current one -- before threatening to quit.
"If you do decide to do it, do it for the right reasons," Mazin says.
1. For most companies, 3.9% is the average budget increase for salaries.
Yes, sad but true. According to the 35th annual WorldatWork Salary Budget Survey, the "actual increase in salary budgets was 3.9% in 2008." The number is expected to stay the same in 2009.
This means, that for most U.S. workers, the average raise will be about the same, with "high performers" receiving about a 5% raise, and "low performers" receiving 2% or less, the survey authors note.
"When people are looking for 6-8%, well, very few people are getting it," says Rebecca Mazin, co-founder of the HR consulting firm Recruit Right and author of "The HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals."
Knowing this can make it easier to stomach a 4% raise -- while it may not equal big money, it actually means your employer values you. Anything more means you're likely considered a top performer, and anything less means you may be underperforming.
2. Your employer (or future employer) may not know the current salary averages.
Just because a whole wealth of salary information is online these days doesn't mean your company has any idea what the normal salary is for a person in your field and in your city. If you do your research and discover your salary is abnormally low, it can be a great negotiation tool when you talk to your boss about your annual raise -- or when you're accepting a new job offer. He or she will realize they could easily lose you since many competitors nearby are paying better.
"You need to go in with some data behind you; you at least need to know what the going rate is," says Dawn Rosenberg McKay of About.com Guide to Career Planning. "[That way] you'll know if you're being outlandish or asking for something ridiculous."
3. Most managers have a short memory.
Raises are given annually, and so it's important to keep track of all your achievements within the past year -- don't expect your boss to remember your big project from eight months ago. Using a spreadsheet or a special email folder, keep track of your accomplishments as they happen, so when the time comes, you have a strong case for a raise.
Accomplishments that show you've either saved the company money or earned the company money are the best ones to highlight, especially if you can specify an exact figure. If that's not possible (which is the case for most employees), take note of any extraordinary praise you received from managers or fellow coworkers, any special thanks from clients, and any other ways that demonstrated you went above and beyond your normal job duties.
4. Your manager probably has little influence over your salary.
Decisions about salary increases for all employees at a company are often made at a high level of management. So, even if you follow all the tips above, your manager may have minimal control over your raise. Case in point: Mazin recently worked with a nonprofit organization whose board decided to give every employee the exact same raise.
There's not a lot you can do in this situation, but if it leaves you feeling dissatisfied or taken for granted, it may be time to look for a new job.
5. Threatening to quit can result in a big wage increase (but it's risky).
If you're hoping for a big raise, or were disappointed by a recent raise, you may want to start job searching. For most people, the biggest salary jumps they have in their careers occur when they get a new job or threaten to quit because of a tantalizing job offer.
Sometimes, telling your current employer about your new gig can be a potent bargaining chip -- they may be willing to match the new offer just to keep you. But not always, as Mazin points out, so don't let your plan backfire. Make sure you really want that new job -- and are ready to quit your current one -- before threatening to quit.
"If you do decide to do it, do it for the right reasons," Mazin says.
Friday, October 10, 2008
Search: Palace: Strong banking sector shielded RP from crisis
The Philippine financial system is not likely to crash like its American counterpart due to the conservative and prudent stance of local banks and monetary authorities, President Arroyo said yesterday.
Mrs. Arroyo though admitted the US financial crisis "appears deeper than most anticipated."
She said "any slowdown or even recession in the US is not good for the global economy."
In her speech at the opening ceremonies of the Agrilink/Foodlink/Aqualink 2008 at the World Trade Center in Pasay City, the President also announced her signing into law of the Credit Information System bill to further strengthen the country's financial system.
She said the global credit crunch has proven the country has a strong banking sector that can be exploited by businesses wanting to expand.
"The potential exposure of our banking sector to the asset deflation triggered by the subprime mortgage losses in the US accounts for less than one percent of their total system assets here in the Philippines," Mrs. Arroyo said.
"This exposure is fully reserved, our banks are well-capitalized, and the innate conser-vativism of our bankers is matched by the prudence of our regulators," she said.
Mrs. Arroyo added the government would increase its spending on infrastructure and social projects to keep the economy going amid a global economic crisis.
Finance Secretary Margarito Teves, on the other hand, said the government is ready to provide assistance to affected sectors in the country in the wake of the financial meltdown in the US.
Teves said that previous gains on the country's fiscal consolidation efforts have given the Philippines more room to assist other sectors.
Teves also said the Philippine economy has shown resilience in the face of global market uncertainties.
"While we are not completely insulated from these external shocks, we can withstand further pressures if we continue to be vigilant and maintain confidence in our country," he said.
The Fund Managers Association of the Philippines (FMAP) also expressed optimism that the Philippine banking system will survive the financial meltdown in the US.
FMAP, which has 44 member institutions and 100 investment professionals, urged the investment community to remain calm.
The group said the Philippines cannot be totally immune from the negative impact of the crisis but its possible effects on the country would be minimal.
"Though volatility may persist, we are confident of the sound macro fundamentals of the Philippine economy and the resiliency of the Philippine financial markets," FMAP said. - Paolo Romero With Iris Gonzales (Philstar News Service, www.philstar.com)
Mrs. Arroyo though admitted the US financial crisis "appears deeper than most anticipated."
She said "any slowdown or even recession in the US is not good for the global economy."
In her speech at the opening ceremonies of the Agrilink/Foodlink/Aqualink 2008 at the World Trade Center in Pasay City, the President also announced her signing into law of the Credit Information System bill to further strengthen the country's financial system.
She said the global credit crunch has proven the country has a strong banking sector that can be exploited by businesses wanting to expand.
"The potential exposure of our banking sector to the asset deflation triggered by the subprime mortgage losses in the US accounts for less than one percent of their total system assets here in the Philippines," Mrs. Arroyo said.
"This exposure is fully reserved, our banks are well-capitalized, and the innate conser-vativism of our bankers is matched by the prudence of our regulators," she said.
Mrs. Arroyo added the government would increase its spending on infrastructure and social projects to keep the economy going amid a global economic crisis.
Finance Secretary Margarito Teves, on the other hand, said the government is ready to provide assistance to affected sectors in the country in the wake of the financial meltdown in the US.
Teves said that previous gains on the country's fiscal consolidation efforts have given the Philippines more room to assist other sectors.
Teves also said the Philippine economy has shown resilience in the face of global market uncertainties.
"While we are not completely insulated from these external shocks, we can withstand further pressures if we continue to be vigilant and maintain confidence in our country," he said.
The Fund Managers Association of the Philippines (FMAP) also expressed optimism that the Philippine banking system will survive the financial meltdown in the US.
FMAP, which has 44 member institutions and 100 investment professionals, urged the investment community to remain calm.
The group said the Philippines cannot be totally immune from the negative impact of the crisis but its possible effects on the country would be minimal.
"Though volatility may persist, we are confident of the sound macro fundamentals of the Philippine economy and the resiliency of the Philippine financial markets," FMAP said. - Paolo Romero With Iris Gonzales (Philstar News Service, www.philstar.com)
Sunday, October 5, 2008
Final curtain for the kimbo show
SUNRISE, Fla. – The legend of Kimbo Slice was built by beating bums in boat yards and back alleys not far from here. It came crashing down Saturday courtesy of a quick punch from a pink-haired journeyman giving up two inches in height, four in reach and 30 pounds in muscle and might.
One simple shot sent Slice to the canvas and from there some guy named Seth Petruzelli needed just 12 punches and 14 seconds to put an end (we hope) to one of the great sporting charades of all time.
It was just a matter of time before Kimbo got exposed. He was little more than a character out of central casting, a bunch of addictive YouTube videos and a lot of insane hype by CBS, which made him a headliner before he made himself a fighter.
He was the Kimbo the Cash Machine, everyone lining up to exploit the lie that this was the baddest man on earth as long as he could walk through hand-picked tomato cans.
Only this time his match with 44-year-old Ken Shamrock, who hadn’t won a fight in over four years, fell apart when Shamrock cut his eye in a light training session Saturday and was deemed unfit to fight by state officials.
In the scramble to find a suitable replacement that Slice couldn’t possibly lose to, EliteXC considered Shamrock’s brother, Frank, who was there to be CBS’s color commentator, hadn’t fought lately due to a broken arm and would have given up around 45 pounds. Despite all this, Frank likely would have submitted Kimbo in the first round.
When that matchup couldn’t happen (EliteXC said state officials wouldn’t clear him, Frank said they did but CBS blocked it), EliteXC promoters turned to Petruzelli. The Fort Myers, Fla., native had been dumped by the big-league UFC, was just 2-2 since 2004, had recently taken a year off to start a business, weighed just 205 (to Kimbo’s 235) and was so lightly regarded he was competing in the non-televised undercard.
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Despite the oft-repeated propaganda that Slice was a man of “courage” for taking a fight with this smaller guy who was likely to stand and trade punches anyway, EliteXC paid Kimbo a cash bonus just to get him to step into the cage.
“We made it up to him,” said Jeremy Lappen, EliteXC’s head of fight operations. He wouldn’t disclose the amount.
For the myth of Slice, the matchup may not be a 44-year-old on a losing streak or someone from the broadcast booth, but really, what was the worst thing that could happen?
“It didn’t feel too flush,” Petruzelli said of the first punch that apparently didn’t even need to land squarely to fell Kimbo.
Make no mistake – or listen to the EliteXC spin – this was a disaster for Slice and the company. “This is MMA, all the best have lost,” said Lappen. True, but Kimbo wasn’t defeated by a crafty Brazilian jiu-jitsu master. He wasn’t caught in a submission by an experienced wrestler. He didn’t lose a decision after a three-round brawl.
Those would be understandable considering his novice status.
Kimbo was KTFO by a guy he absolutely towered over yet was willing to bang with him anyway. Not that Kimbo did any banging. Slice charged him (“He was like a truck,” Petruzelli said) but he never actually landed a punch.
In the end, Kimbo’s hand speed, defense and chin proved incapable against even an average mixed martial artist. Which was pretty much what every hardcore fan had predicted.
Not that CBS didn’t keep up with the Slice willing to fight, “anyone, anywhere, at anytime.” This was a 100 percent true statement if “anyone, anywhere, at anytime” means “no one any good, anywhere, ever.”
Slice seemed stunned and a bit saddened at the turn of events. After it was over, he initially began wrestling the referee. Whether that was a protest for the decision or because he was dazed isn’t certain. Then he walked around the cage complaining to fans about the stoppage.
Later he walked out on his CBS interview (“Kimbo?” asked a stunned Gus Johnson), although not before inviting America to an after party at a local nightclub. Then he showed up 45 minutes late for the main press conference, where he gave a quick statement and bailed.
“I got my first black eye,” he laughed. He later turned to Petruzelli and joked, “You knocked me out in front of my family; that’s (expletive) up.”
Through it all Slice remained the only likable character of this foolish farce. He wasn’t the one claiming he was the best in the world. He was just a working-class dude who figured out how to beat the system and cash in on his 15 minutes of fleeting fame.
He’s got kids to feed and bills to pay and right to the end, he was milking bonuses out of the promotion, a one-time homeless man holding the Tiffany Network’s prime-time programming hostage. Only in America.
He was the grand actor in the middle of a three-ring circus, a tall tale that would eventually come tumbling down under the bright glare of reality.
Where Slice goes from here is anyone’s guess. He can’t rebuild his reputation without stepping up in competition from the guy who just beat him in seconds. He can’t headline a card and have anyone believe he’s legit. He can’t claim he, “just got caught” when it wasn’t some wild, roundhouse right or sneaky arm-bar that did him in.
The truth was always coming for Kimbo. Saturday it arrived sooner rather than later, the money train grinding to a halt courtesy of a smaller, less heralded fighter that no one can claim is some elite champion.
No, this was it. It’ll never be the same, not for the fighter and not, perhaps, for his entire promotion that just lost its signature star on top of the $58 million it’s burned the past two years.
Afterward, EliteXC execs tried to paint a bright future but admitted they needed a drink. Lower-level employees used gallows humor about finding new jobs.
Kimbo just said he was going home to see his kids.
In 14 seconds flat, the whole mirage was gone.
One simple shot sent Slice to the canvas and from there some guy named Seth Petruzelli needed just 12 punches and 14 seconds to put an end (we hope) to one of the great sporting charades of all time.
It was just a matter of time before Kimbo got exposed. He was little more than a character out of central casting, a bunch of addictive YouTube videos and a lot of insane hype by CBS, which made him a headliner before he made himself a fighter.
He was the Kimbo the Cash Machine, everyone lining up to exploit the lie that this was the baddest man on earth as long as he could walk through hand-picked tomato cans.
Only this time his match with 44-year-old Ken Shamrock, who hadn’t won a fight in over four years, fell apart when Shamrock cut his eye in a light training session Saturday and was deemed unfit to fight by state officials.
In the scramble to find a suitable replacement that Slice couldn’t possibly lose to, EliteXC considered Shamrock’s brother, Frank, who was there to be CBS’s color commentator, hadn’t fought lately due to a broken arm and would have given up around 45 pounds. Despite all this, Frank likely would have submitted Kimbo in the first round.
When that matchup couldn’t happen (EliteXC said state officials wouldn’t clear him, Frank said they did but CBS blocked it), EliteXC promoters turned to Petruzelli. The Fort Myers, Fla., native had been dumped by the big-league UFC, was just 2-2 since 2004, had recently taken a year off to start a business, weighed just 205 (to Kimbo’s 235) and was so lightly regarded he was competing in the non-televised undercard.
ADVERTISEMENT
Despite the oft-repeated propaganda that Slice was a man of “courage” for taking a fight with this smaller guy who was likely to stand and trade punches anyway, EliteXC paid Kimbo a cash bonus just to get him to step into the cage.
“We made it up to him,” said Jeremy Lappen, EliteXC’s head of fight operations. He wouldn’t disclose the amount.
For the myth of Slice, the matchup may not be a 44-year-old on a losing streak or someone from the broadcast booth, but really, what was the worst thing that could happen?
“It didn’t feel too flush,” Petruzelli said of the first punch that apparently didn’t even need to land squarely to fell Kimbo.
Make no mistake – or listen to the EliteXC spin – this was a disaster for Slice and the company. “This is MMA, all the best have lost,” said Lappen. True, but Kimbo wasn’t defeated by a crafty Brazilian jiu-jitsu master. He wasn’t caught in a submission by an experienced wrestler. He didn’t lose a decision after a three-round brawl.
Those would be understandable considering his novice status.
Kimbo was KTFO by a guy he absolutely towered over yet was willing to bang with him anyway. Not that Kimbo did any banging. Slice charged him (“He was like a truck,” Petruzelli said) but he never actually landed a punch.
In the end, Kimbo’s hand speed, defense and chin proved incapable against even an average mixed martial artist. Which was pretty much what every hardcore fan had predicted.
Not that CBS didn’t keep up with the Slice willing to fight, “anyone, anywhere, at anytime.” This was a 100 percent true statement if “anyone, anywhere, at anytime” means “no one any good, anywhere, ever.”
Slice seemed stunned and a bit saddened at the turn of events. After it was over, he initially began wrestling the referee. Whether that was a protest for the decision or because he was dazed isn’t certain. Then he walked around the cage complaining to fans about the stoppage.
Later he walked out on his CBS interview (“Kimbo?” asked a stunned Gus Johnson), although not before inviting America to an after party at a local nightclub. Then he showed up 45 minutes late for the main press conference, where he gave a quick statement and bailed.
“I got my first black eye,” he laughed. He later turned to Petruzelli and joked, “You knocked me out in front of my family; that’s (expletive) up.”
Through it all Slice remained the only likable character of this foolish farce. He wasn’t the one claiming he was the best in the world. He was just a working-class dude who figured out how to beat the system and cash in on his 15 minutes of fleeting fame.
He’s got kids to feed and bills to pay and right to the end, he was milking bonuses out of the promotion, a one-time homeless man holding the Tiffany Network’s prime-time programming hostage. Only in America.
He was the grand actor in the middle of a three-ring circus, a tall tale that would eventually come tumbling down under the bright glare of reality.
Where Slice goes from here is anyone’s guess. He can’t rebuild his reputation without stepping up in competition from the guy who just beat him in seconds. He can’t headline a card and have anyone believe he’s legit. He can’t claim he, “just got caught” when it wasn’t some wild, roundhouse right or sneaky arm-bar that did him in.
The truth was always coming for Kimbo. Saturday it arrived sooner rather than later, the money train grinding to a halt courtesy of a smaller, less heralded fighter that no one can claim is some elite champion.
No, this was it. It’ll never be the same, not for the fighter and not, perhaps, for his entire promotion that just lost its signature star on top of the $58 million it’s burned the past two years.
Afterward, EliteXC execs tried to paint a bright future but admitted they needed a drink. Lower-level employees used gallows humor about finding new jobs.
Kimbo just said he was going home to see his kids.
In 14 seconds flat, the whole mirage was gone.
Friday, October 3, 2008
Bailout bill gains momentum on House floor
WASHINGTON - After a week of tumult, an unprecedented government bailout of the financial industry gained ground in the House on Friday and leaders in both political parties expressed optimism the $700 billion measure would clear Congress by day's end for President Bush's signature.
With the election-year economy showing fresh signs of weakness on several fronts, the measure advanced past a key hurdle on a 223-205 vote.
An Associated Press tally showed 29 lawmakers who sent an earlier bailout bill to unexpected defeat on Monday had changed their minds and would vote in favor of the revised legislation, far more than the dozen needed. Officials said changes made to the measure had sparked a far smaller number of defections among previous supporters.
"I'm optimistic about today. We're not going to take anything for granted but it's time to act," said House Republican Leader John Boehner of Ohio.
"I think it will pass," agreed Rep. Jim Clyburn, the chief Democratic vote-counter, as debate unfolded in the House chamber.
On Wall Street, stocks surged ahead of the vote as the Dow Jones industrial averate rose nearly 150 points.
The Senate passed the measure earlier in the week on a bipartisan vote of 74-25, and Bush has repeatedly urged Congress to send the bailout to him swiftly to prevent even further economic deterioration.
"No matter what we do or what we pass, there are still tough times out there. People are mad — I'm mad," said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, "We have to act. We have to act now."
Rep. John Lewis, D-Ga., another convert, said, "I have decided that the cost of doing nothing is greater than the cost of doing something."
Critics were unrelenting.
"How can we have capitalism on the way up and socialism on the way down," said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation — an unprecedented federal intervention into the private capital markets.
It was little more than two weeks ago that Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.
The core of the plan remains little changed from its inception — the Treasury Department would have $700 billion at its disposal to purchase bad mortage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand.
At the same time, lawmakers have dramatically changed the measure, insisting on greater congressional supervision over the $700 billion, taking measures to protect taxpayers, and insisting on steps to crack down on so-called "golden parachutes" that go to corporate executives whose companies fail.
Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.
In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged "serious surgery" next year to address the underlying causes of the crisis.
If anything, the economic news added to the sense of urgency.
The Labor Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. Employers slashed 159,000 jobs from their payrolls, the most in five years. That came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 percent.
Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations.
One month before election day, the drama unfolded in an intensely political atmosphere.
Democratic presidential candidate Barack Obama, a supporter of the bill, made calls to members of the Congressional Black Caucus, who publicly credited him with changing their minds.
Rep. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers.
"It's not too often you get the future president telling you that his priority matches your priority," said Cummings.
Obama's rival, Sen. John McCain, who announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis, made calls to Republicans. His impact was not immediately clear.
Republican Rep. Sue Myrick of North Carolina, who said she was switching her vote to favor the measure, said of McCain: "They told me he was going to call me. He didn't."
Looking ahead to election day, she added, "I may lose this race over this vote, but that's OK with me. This is the right vote for the country."
The White House issued the latest in a series of grim warnings of the risks of defeat. "If the financial markets fail to function, American families will face great difficulty in getting loans to purchase a home, buy a family car or finance a child's education," it said in a written statement.
The vote on Monday staggered the congressional leadership and contributed to the largest one-day stock market drop in history, 778 points as measured by the Dow Jones Industrial Average.
Across the Capitol, Senate leaders reacted quickly, deciding to sweeten the bill with a series of popular tax breaks as well as spending on rural schools and disaster aid. They also grafted on a bill to expand mental health coverage under private insurance plans.
At the same time, the change in federal deposit insurance and the action by the SEC on an obscure accounting rule helped produce a steady trickle of converts.
Wednesday, October 1, 2008
How Much is $700 Billion?
The short answer: a lot. The long answer: depends on how you look at it.
Whatever your viewpoint, here's how $700 billion - the figure inked in the initial dead-in-the-water government bailout bill for Wall Street - compares to other vast sums.
NASA in fiscal year 2009 will launch several missions into space and pay for hundreds of people to operate a host of space telescopes and even remote robots on Mars and run a PR and media department that puts most large corporations to shame. The agency's budget: $17.6 billion, or 2.5 percent of the bailout sum.
The National Science Foundation (NSF) has an annual budget of $6.06 billion to support research and education on astronomy, chemistry, materials science, computing, engineering, earth sciences, nanoscience and physics (among others) at more than 1,900 universities and institutions across the United States.
You have to turn to much bigger initiatives, like war and defense, to get beyond this chump change and approach the bailout figure.
From 2003 through the end of fiscal year 2009, Congress has appropriated $606 billion for military operations and other activities associated with the war in Iraq, according to the Congressional Budget Office (CBO). The entire military budget for fiscal 2008 is $481.4 billion.
Social Security is a $608 billion annual program.
Many analysts fear the bailout because the cost must ultimately be borne by taxpayers.
Based on the U.S. Census Bureau's estimate of the current population of about 305 million people, each person would have to pay $2,300 to fund the $700,000,000,000. If each American (including children) paid a dollar a day, it would take more than six years to pay the money in full. One might argue, however, that this $700 billion would be a modest splash in the bucket of national debt, which already stands at well over $9 trillion (which means you already owe $31,642 each).
Even the New York Yankees third baseman Alex Rodriguez would lose sleep over all those zeroes. Currently the top paid major league baseball player, Rodriguez takes home $28 million a year, meaning it would take 25,000 A-Rod salaries to carry the $700 billion.
Nobody is rich enough to pay back this $700 billion by himself. In fact, the Forbes 400 richest list recently came out. It would take most of what these 400 people collectively have - a combined net worth of $1.57 trillion - to dig out of this mess.
Thursday, September 25, 2008
Deal close on $700 billion financial bailout plan
WASHINGTON - President Bush is bringing presidential candidates Barack Obama and John McCain into negotiations on a $700 billion rescue of Wall Street as Democrats and Republicans near agreement on a bailout plan with more protections for taxpayers and new help for distressed homeowners.
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Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.
They're still wrangling over major elements, including how to phase in the eye-popping cost — a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout — without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was under intense negotiation.
A bipartisan meeting was set for Thursday to begin drafting a compromise, which top Democrats said they hoped could pass within days.
The core of the plan envisions the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession.
Bush acknowledged in a prime-time television address Wednesday night that the bailout would be a "tough vote" for lawmakers.
But he said failing to approve it would risk dire consequences for the economy and most Americans.
"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package. "Our entire economy is in danger."
Bush's warning came soon after he invited Obama and McCain, one of whom will inherit the economic mess in four months, as well as key congressional leaders to a White House meeting Thursday to work on a compromise.
With the administration's original proposal considered dead in Congress, House leaders said they were making progress toward revised legislation that could be approved.
Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction.
"We're going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op," said Frank, the House Financial Services Committee chairman. "I wish they'd checked with us."
Paulson and Federal Reserve Chairman Ben Bernanke have been crisscrossing Capitol Hill in recent days, shuttling between public hearings on the proposal and private meetings with lawmakers, to sell the proposal.
Obama and McCain are calling for a bipartisan effort to deal with the crisis, little more than five weeks before national elections in which the economy has emerged as the dominant theme.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said in a joint statement Wednesday night. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
Presidential politics intruded, nonetheless, when McCain said earlier Wednesday he intended to return to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.
Obama said the debate should go ahead.
Lawmakers in both parties have objected strenuously to the rescue plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on more conditions and help for beleaguered homeowners.
But many in both parties said they were open to legislation, although on different terms than the White House has proposed.
Some partisan sticking points remain.
Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure — a nonstarter for Republicans.
Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it's "probably something that we shouldn't try to do in this piece of legislation."
Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.
Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle.
Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, "we're now the biggest mortgage holder in town, and we can do serious foreclosure avoidance," Frank said.
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