Personal Finance Blog by Debit versus Credit

What Happened To Free Enterprise?

July 30, 2008 | Filed in: Miscellaneous | 2 comments

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Free Enterprise: an economic system in which private business operates in competition and largely free of state control.

What happened to the days when Free Enterprise reigned supreme and it was bad news when a government stepped in to take control?  Our nation is quickly becoming a “bailout nation.”  While many will argue that it is for the greater good that our government bail out companies such as Bear Stearns, Fannie Mae and Freddie Mac, they may ask themselves yet, where do we draw the line?  By bailing out failing financial companies are we sending the wrong message to business and also taxpayers?  I think we are.  I think that we’re essentially telling companies that if they’re large enough - important enough - that we will bail them out if they make mistakes and are in risk of going under.  After all if we’re willing to bail out Bear Stearns then why not anyone else with enough clout?

It Hurts The Taxpayer

As if it wasn’t bad enough that we’re sending the wrong message to big business it becomes worse when one stops to think about where the money to bail these companies out is coming from.  Last I checked our nation is running a huge deficit.  Impossibly huge, one might say.  The money sure isn’t coming from the U.S. savings account, because we don’t have one.  It’s coming from your pocket.  It’s coming from my pocket.  Maybe not directly, but you can be sure that this will affect us in the future.  The Fed’s magic money making machine of course will be what creates the money to bail these companies out.  They create money out of thin air, to use at their whim.  This of course is what’s providing us with the highest inflation rates in some time.  Of course that’s another day and another topic.  To stay on point essentially what will happen is that the fed will bail out these companies, creating an even larger budget deficit this year which will one day need to be payed off by us.  The taxpayer.

A Slippery Slope

It’s a slippery slope that we’re on right now.  Where should the line be drawn?  Is it better to bailout large financial firms in danger of failing and save ourselves from an even longer and more drawn out recession that will create financial difficulties in the future or is it better to let Free Enterprise reign and whatever happens, happens?  I prefer Free Enterprise.  We’re not a great nation because our history has been filled with bailout after bailout after bailout.  We’re a great nation because of our belief in Capitalism and Free Enterprise.  The further we move away from this, the greater danger we place ourselves in.  Stay on a slippery slope for too long and you’re bound to eventually slip and fall.  I hope to God that we don’t fall.

Tags: Bailout Nation, Free Enterprise

Please, Do Your Own Research

July 29, 2008 | Filed in: Miscellaneous | 1 comment

I have friends who are completely anti-Obama.  I’m OK with that.  What I’m not ok with is when people make up their minds about things that they heard somewhere without ever bothering to find out themselves if it’s true or not.  A little disclaimer: I’m leaning more towards Obama at this point.  My mind is not made up yet, however, and will not be until probably a week before elections.  I like to keep an open mind about things and I don’t know everything about either of the candidates campaigns yet.  What I do know about them is that from what I’ve read and researched myself I prefer Barack Obama.  He seems to be a better match than John McCain for our country and its’ needs.  Like I said, this could change.  I don’t agree with everything he’s preaching, but I agree with a majority of it.  I think that’s the proper way to choose who to vote for, right?  Who cares if the candidate is male, female, black, white, Cuban, Asian, Mexican or Puerto Rican.  The point is that he or she is trying to do whats best for our country and that you agree with them.

I have two purposes for this post.  First of all I want to get across my point that an uninformed decision is a bad decision.  Period.  Secondly (and relating to the first point) I want everyone to know about an untruth which has been going around about the Obama campaign.  The reason for this?  It’s a pretty important topic and I absolutely can’t stand all of the hate going around.  It all goes back to my first point, of course.  Do your own research before making up your mind.

So What If Your Girlfriend Is An Obama Hater

Here’s a quiz for you.  Let’s say your significant other doesn’t like a certain presidential candidate and they feed you all of this information about him/her.  Do you a) agree with your significant other or b) research it and make up your own mind.  If you answered with “b” then good for you.  If you answered “a” then please reconsider option “b.”  Make sure that before you ever make any decisions that you always research and make up your own mind.  This is one of the primary lessons that I’d like everyone to pick up on here at Debit versus Credit.  This can be applied to every aspect of life, whether politics, finance or even your job.

Let Me Refute A Falsehood About Obama

I keep seeing information go around about how Obama is going to make everyones life miserable by raising taxes.  This is a half-truth.  Taxes will most likely increase under Obama’s leadership, this is true.  However to blatantly spread lies about how even the poorest in the U.S. will have to take on a larger tax burden is completely unaccurate.  I’d like to correct this misconception, so that people might be able to make a clearer decision.  Obama will only be raising taxes for couples making more than $250,000 in taxable income and for single filers making more than $200,000 in taxable income.  Income tax brackets will not change other than for these numbers.  That leaves a huge majority of U.S. citizens right where they currently are with taxes.  In fact they might even pay less taxes because Obama wants to introduce more tax credits for lower and middle class Americans.

Please don’t take my word for it.  Also don’t think I’m trying to convince you that you MUST vote for Obama.  Vote for whoever you feel most strongly for, but only after doing the research.  Good decisions probably shouldn’t come that easy.  Click Here if you would like to read more about what both McCain and Obama plan to do with taxes.

Tags: Barack Obama, John McCain, Politics, Rants

I Want To Invest In Solar

July 25, 2008 | Filed in: Investing | 3 comments

There’s big money in Solar energy.  Huge money.  Just think about it.  The world is moving towards alternative forms of energy and right now the most accepted alternate form is solar.  It’s relatively cheap and the technology has come a long way.  The only downside is the amount of “acreage” that solar consumes in order to produce enough power to match an existing power plant.  I don’t know how much more, but I’m sure it’s a lot.

With that being said I’m highly interested in investing in Solar Power.  I just don’t know how.  There’s a lot of solar companies out there and they’re not all likely to be around in 5 years when the industry has matured a bit.  Of course you have your “lower-risk” money making stocks such as that of First Solar (FSLR) but it comes with a hefty price tag: $264.09 as of the close of markets on July 24th.  That gives them a P/E ratio of 105.5!  Doesn’t sound like such a good deal, does it?  One little slip up in the Solar power industry and that stock could theoretically tank quickly.  Keep in mind this is supposed to be one of the “safer plays.”

So why do I want to invest in something that sounds so absolutely voilatile?  Simple.  For two reasons.

1. I like to invest in things I use and believe in.  I am a fan of green energy and likewise solar.  I hope it succeeds and I hope that we can begin to use more of it over the next several years.
2. I recognize the potential.  With greater risk comes the possibility of greater reward.  Investing in the “right” solar company could make me much more wealthy and put me that much closer to my financial goals.

I came across an interesting article at stockpickr.com while researching solar today.  It lists 5 stocks that could (keyword being could) have huge gains.  I don’t know much about any of them with the exception of First Solar.  Here’s the list:

1. Trina Solar (TSL)
2. First Solar (FSLR)
3. Canadian Solar (CSIQ)
4. Yingli Green Energy (YGE)
5. ReneSola (SOL)

Here’s the link to the article outlining the stocks as well as the reasoning behind why the author thinks they could soar.  Like I said before I really don’t know what to think myself.  I want to get involved in Solar investing.  I just need to learn more about it so I don’t make a stupid mistake.

Tags: Green Investing, Investing, Solar Energy

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