Let's Catch Some Crooks with a safety PIN

Let's use the automated teller machines against the criminals.

For all the crime that includes forcing people to go to an ATM and withdraw money for criminals, a secondary, emergency (safety) PIN would be a wonderful thing the financial system could do to help victims.

If customers had the option to create a safety PIN that would access their account, BUT also alert police to the location and keep the video, we could save people, catch criminals, and enhance the community image of financial institutions.

I read too many news articles about people being forced to go to the ATM with crooks to get money or to give their PIN and bank card to criminals. This would at least give law enforcement a better chance to catch crooks.

When you get an account or bank card, you create a PIN. For example purposes say it is 1234. You also need an option to create an emergency PIN to trigger safety protocols, for this example - 5678. If you ever use the 5678 safety PIN, your account “works” to the outside world, but it triggers actions behind the scenes. The customer has a better chance to survive. Law enforcement has a better odds to capture the criminals. Once the process becomes widespread, it is another deterrent to crime. If you want to go a step further, when the emergency PIN is entered, put a message on the screen that withdrawals are limited at this time due to some technical issue.

One rule for customers, no safety PINs with 911 in them. It's a little too obvious.

Law enforcement should have additional ideas to close the loop on the crooks, but this would be a start. Bankers, let's make safety PINs!

Bare Naked Bucks--Prepared for Sudden Wealth?

Last week a number of young men have moved into an expected sudden wealth financial category based on their draft status with the NBA and NHL. While this is good news for them, it also comes with a number of strings attached.

Because these guys were expected to make big money, I am sure that tons of "lost" relatives have come calling. In addition, some of them will have collected best buds faster than Facebook friends.

What some of these people will not do is protect the long term investment. The average NBA career was just under 5 years. If we apply the average (mid level) exception salary for the past 5 years (2004-2008), we get about $26 million. HOWEVER, the NBA pays its stars very well and most players on a roster make LESS than the average salary. The more acccurate number to use is the MEDIAN salary. (You get this number by ranking the salaries from smallest to largest and stopping in the middle.) For this past season it was just above $3 million. If we assume that the median salary and the mean salary have grown in similar percentages over the past 5 years, then the median salary over an average 5 year career is actually $14,213,779.

Take the rookie scale for draft picks. In 2005, out of 30 first round draft picks that are given automatic raises annually, their first option year is the 3rd year of the contract. At that point, only the top 4 picks exceed the median. So 26 rookies are actually trying to get above the median on their 2nd contract, which many may never see as it comes after their 4th year in the league.

Anyhow, take that almost 3 mil/yr and subtract federal taxes (34%) and a standard agent commission (4%). We will skip over the variety of state and local tax possibilities and look at the average player as a person with $1,762,509 annually for 5 years. After that time it is likely that the salary will drop significantly for the remaining work years.

By the time the player gets a place to live and spreads some of that money around to the "friends & family" just how much will really be left to live on when you retire in your mid 20s?

To all my newly rich "friends" that were drafted, be careful with your money and don't collect an entourage...unless it is the DVD box set!

Taxing Facts - Stressful thoughts?

Think about the current state of banking. If I went to a bank and started borrowing money on a deal where I offered to pay interest only, how many banks would run my way? Take this story deeper. Assume I already had a ton of debt out there, but I wanted more. In this age where credit card companies are raising rates and cutting credit limits -- I want more credit and a lower rate. While I am doing all of this, I also lend out massive amounts of cash to businesses that have crappy financial health themselves.

Some might think this scenario is either crazy, a scam, or comes from the psycholgically unstable.

Actually, it comes from the US Government. Check out how much the government owes. 

Lot's of details in the links if you are curious about who the Government owes. Maybe we'll get into that another day.

For now, I'd like to link this big debt deal back to your taxes.

We hear a lot of comments about taxes. The rich should pay more. The rich pay too much. Too many don't really pay at all. The poor make money off the progressive tax system; they don't pay their fair share...and so on.

Here are some tax facts.

If we look at the term, middle class, to represent the middle 20% of taxpayers, we can generally describe the middle class as those making $37,771 - $60,000 in 2006 tax year. If you want to break that out with more details or you prefere a braoder range for middle class, check the source link.

Source: The Tax Foundation

Average household income for these levels in (parentheses)

Source: Congressional Budget Office

In 2006, the top 20% of individual income tax payers ($248,400) were responsible for 86.3% of the individual income taxes paid. In 1986, that top 20% ($167,800) was responsible for 68.9% of the individual income taxes paid.

The middle 20% of individual income tax payers ($60,700) were responsible for 4.4% of the individual income taxes paid. In 1986, that middle 20% ($52,500) was responsible for 9.2% of the individual income taxes paid.

The bottom 20% of individual income tax payers ($17,200) were responsible for -2.8% of the individual income taxes paid. In 1986, that bottom 20% ($14,800) was responsible for 0.2% of the individual income taxes paid. This means there was a very small tax liability in 1986 which became a rebate in 2006.

Let's loop that back to the whole deficit thing. As a country, we do not collect enough taxes and fees to cover our expenses on a national federal government level. As the deficits continue to grow this is an issue for all of us regardless of political affiliation. The US has had deficits for most of the last 50 years, but they usually just grow.

Good thing that Riley's beef is with Santa instead of the people that back the savings bond in his drawer. (Clip has foul language.) Is this a future step for those modern day tea parties? I hope not.

Uncle's Money - UncCars version

Taking the money has allowed the government to not only peek into the privacy of many budgetary houses, but it has also given the government the authority to start making suggestions and to initiate actions on the business expenditures.

How would you feel if you borrowed money from your Uncle and he started telling you to buy canned tomatoes from the bulk ware house instead of getting the more expensive fresh tomatoes?

Better yet, you run a business, that Unc has no real expertise in running, but your new silent partner has found the unmute button. Why do you pay that VP so much? I don't think he's any better than the manager that makes 1/3 of the money.

Recently, Unc told GM, you have 2 months to get your act together...and do that without your leader. He needs to go now. Not that I disagree, but it's interesting that Unc has to do what the GM board would not do...even in desparate times.

By the way, Unc will now guarantee the warranty on some vehicles...because the companies took his $$$. I wonder how that deal tastes to Ford and the other auto companies? Maybe Unc will fix cars too. After all, those government mechanics will need something to do when they are not making warranty repairs for UncCars divisions TCCFKAGM (the company formerly known as General Motors) and TCCFKAC (the company formerly known as Chrysler). You know how the government loves those jacked up acronyms.

If you had written employment contracts with some of your employees, do you abandon them based on advice from Uncle or do you take the heat and gain a little credibility internally?

There are no easy answers, but I am confident of a few things.

If Uncle w/o industry experience knows more about your business than you do, find another line of work.

If you made commitments to your employees prior to taking Uncle's money, make sure you know how this will impact your reputation inside your organization and industry when you decide to change the game. He who holds the cash may make the rules. That doesn't mean that the rules are good ones. If I am your competitor that did not take Uncle's money--this is a part of the game plan to take your best employees.

If Uncles smacks you around for spending money on things that may not fit the core business, make sure he treats you the same way when the questionable spending goes to Uncle's business associates. From taxpayers to TARP to Congress.

It is not easy to be responsible with large quantities of other people's money, but it is clear that many folks are tempted to chastise business people when they spend money in ways that they don't like while looking the other way when the funds are spent on themselves.

When my neighbor is out of work, its a recession.

When I am out of work, it is a depression.

When politicians get TARP funds it's hypocrites in session.

Whos is watching Uncle's employees?...hmmmm

The elected ones have 2-6 years between formal evaluations/elections.

Can we even afford to fund Uncle's wallet? That's a future discussion.