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This letter has been sent to both my Senator (Ken Salazar) and Representative (Mark Udall) in regard to the current banking crisis.

Dear Representative Udall,

I write you today to express my overwhelmingly strong sense that any government intervention in the current banking crisis will be a disaster in the long run for the American economy. Furthermore, I feel even more strongly that the package being pushed by the Bush Administration could not be further from the appropriate course of action.

We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market’s attempt to re-establish rational pricing of houses and other assets.

We are told that “low interest rates” led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.

As a Colorado small business owner and entrepreneur in the Denver area (a Partner and co-founder at a highly successful accounting, finance, and consulting firm), I cannot adequately express how important it is to me that this package, as well as any other form of government intervention in this mess, be immediately rejected by congress. I understand this is a politically difficult time given the election season, but no other single issue will sway my vote  and support (as a self-proclaimed independent) in the upcoming election. Thank you for your attention to this matter.

Best Regards,
Dan

In the interest of appropriate attribution, the middle two paragraphs are lifted directly fom the words of Ron Paul as he is a much more accomplished writer than I and we share virtually exactly the same views on this topic.

I HIGHLY HIGHLY encourage you to do the same with your senator and representative.

You watch politics on TV probably. I watch politics on the internet. If I watched politics on TV I might miss something as spectacular as this video from jibjab.com. After two weeks of weak convention speeches, wrapped up by Mr. McCain this evening, something to lighten the mood was desperately needed! Watch the video.

And How did I possibly miss this one last time around… HILARIOUS!!

There are about 10 million interesting ways to finish this sentence but today I am troubled over a statistic I heard on one of my favorite internet radio shows… Only half of Americans think it is possible to save for retirement. Not “only half of Americans have properly saved for retirement” but that in fact, only half even think it is possible!

Talk about an alarming… especially if you are 26 and in position to be one of those responsible ten years from now for footing the bill for a sinking Social Security program. More importantly, it seems like a lack of will on the part of the American people.  Where is the tanacity? The drive to go out and kick ass so you can have a great time living out those golden years?

In my view, there are two problems leading to this terrifying statistic: 1) gross consumerism and 2) the American financial services industry.

Gross Consumerism

People complain a lot about their debt. The media is even beginning to observe that the majority of us are prisoner to our debt. But what are doing about it? I mean really doing about it? It seems to me what we are doing is bitching about gas prices going up and home prices coming down. Yet I don’t see the connection between those things and some $14,000 in average household credit card debt (not counting the second mortgages taken out on homes to pay off mounting credit card debt). I think a more pertinent question might be some thing to the effect of can you live through this football season without the High-Def Sunday Kick-Off cable package? Or will life come to a screeching halt without the $100/month “see and be seen” gym membership? Everyone wants to blame someone for why they can’t support their gross consumerism. It is way past time to suck up, get seriously intense (Dave Ramsey would say “beans and rice, rice and beans”) and kick the debt out of the house!! My prediction… if you, right now today, are carrying a balance on your card whether it is growing or not, are squarely on track to be eating those beans and rice at 75.

The American Financial Services Industry

To quote one of my foremost heros in the area of business… “Wall Street is the only place I know of that people drive to in a Rolls Royce to take advice from someone who rode the Subway”. The proverbial “Millionaires Next Door” are plowing money into accounts with their financial advisers, only to watch their hard-earned net-worth (usually the result of self employment) be slammed by transaction fees, management fees, and unnecessary taxes. The worst part is they are all very bright people and recognize this happening but keep doing it under the idea that “my guy is different here in my small town. He really is a good guy.” Worse are the people who aren’t the millionaire next door. Often these are the same people that have the consumerism problem mentioned above but managed to amass a couple hundred thousand in their retirement account over 25 years at their corporate job. These guys wake up at 50 or 60 and realize that isn’t enough money to sustain themselves for more than a couple years, if that. So they turn to our subway-riding big-talking financial adviser to turn their 200K into a million. Guess what, bad move.

The simple fact (and big secret) is this… investment advisors are terrible. Yours is not different, sorry to tell you. Over an investment horizon of 5 years 97% of all financial advisers and fund managers fail to be the returns of the stock market at large. Over longer period this number shrinks to effectively zero. This means you are paying them a fee (much larger than you suspect most likely when all different fee types are accounted for) to get you much lower investment returns than a simple index fund you can purchase anywhere with a virtually nominal fee. The underlying secret is this…

Market returns are not average returns, they are superior returns. The reason they are superior is because less than 10% of people actually earn market returns after taxes and fees in their retirement account. Thank you big-shot advisers. So stop trying to find someone who can help you beat the market and figure out how to match the market (i.e. buy and hold a diversified index fund, like ticker symbol VTI).

Where to Go From Here

Good question. I suppose it comes down to your generation.

If you are a baby boomer and are currently doubting your ability to save for retirement, all I have to say good luck (sorry for that). You are too close for passive investments like stock market investing to do you any good by 60-65. Best thing I can say is consider either 1) starting a really good actively managed business you control and know you can win at, 2) continue to aggressively pursue your career and build your income which is your most powerful wealth building tool, 3) hope your kids do well and help you to live your expected lifestyle (quite the sad thought), or 4) hope the government bails you out (this probably means an upgrade from beans and rice to Ramen Noodles).

If you are a Gen X’er and are currently doubting your ability to save for retirement, now (and I mean right this very minute) is the time to get INTENSE. Cut up the credit card, get on a budget, get the debt paid off, start kicking serious ass at work, and get rid of your buddy the investment adviser. Buy and hold index funds and mange your income carefully and you can get there.

If you are a Gen Y’er and are currently doubting your ability to save for retirement, you give up way to easy. Start by forgetting most of what the Baby Boomers and Gen X told you about retirement saving and remember what your grandparents told you. Take risks NOW and everytime you do and win a little, put some of it away for later. You are totally set, as long as you don’t let the banks and financial advisers suck you into their system.

I get forwarded email from lots of people (oddly enough, no one gets forwarded email from me but that is a different subject). I sort of like it, the emails that people forward are a great indicator of their thoughts and thus a great way to keep a “pulse” on what is bothering people.

Below is a good one. It was titled “FW: NEW PREAMBLE TO THE CONSTITUTION”. I happen to think the US Constitution is probably the most amazing document developed by mankind in the past quarter century. So, I am hesitant to change it based on a forward email but lets investigate

We the sensible people of the United States, in an attempt to help everyone get along, restore some semblance of justice, avoid more riots, keep our nation safe, promote positive behavior, and secure the blessings of debt-free liberty to ourselves and our great-great-grandchildren, hereby try one more time to ordain and establish some common sense guidelines for the terminally whiny, guilt ridden, delusional, and other liberal bed-wetters. We hold these truths to be self evident: that a whole lot of people are confused by the Bill of Rights and are so dim they require a Bill of NON-Rights.’

Comment: Ummm, OK. This was pretty mindless and unproductive due to childish name-calling but lets move on to the “Bill of Non-Rights” (yet I do like the ‘debt-free’ reference).

ARTICLE I: You do not have the right to a new car, big screen TV, or any other form of wealth. More power to you if you can legally acquire them, but no one is guaranteeing anything.

Comment: Yeah… throw a damn brick through that TV even if you can legally acquire it then do something productive.

ARTICLE II: You do not have the right to never be offended. This country is based on freedom, and that means freedom for everyone — not just you! You may leave the room, turn the channel, express a different opinion, etc.; but the world is full of idiots, and probably always will be.

Comment:YES! Quit crying and fight back!

ARTICLE III: You do not have the right to be free from harm. If you stick a screwdriver in your eye, learn to be more careful; do not expect the tool manufacturer to make you and all your relatives independently wealthy.

Comment: The “suing” phenomenon… totally out of control in consumer society and business. Sometimes, yes, it was your fault.

ARTICLE IV: You do not have the right to free food and housing. Americans are the most charitable people to be found, and will gladly help anyone in need, but we are quickly growing weary of subsidizing generation after generation of professional couch potatoes who achieve nothing more than the creation of another generation of professional couch potatoes

Comment: Not properly addressed here but idea is correct… Charitable contribution should be VOLUNTARY. This will work out, without welfare, because Americans actually are overwhelmingly charitable when compared to the rest of the world.

ARTICLE V: You do not have the right to free health care. That would be nice, but from the looks of public housing, we’re just not interested in public health care

Comment: Correct again… socialized health care IS NOT authorized by the real constitution. Therefore, this is easy. Either A) it cannot be provided or B) a constitutional amendment is necessary. So Congresspeople… propose an amendment or shut up about it.

ARTICLE VI: You do not have the right to physically harm other people. If you kidnap, rape, intentionally maim, or kill someone, don’t be surprised if the rest of us want to see you fry in the electric chair.

Comment: Um… ok. Electric chair for kidnap? That is really taking the moral high ground. Talk about making the enforcer worse than the offender.

ARTICLE VII: You do not have the right to the possessions of others. If you rob, cheat, or coerce away the goods or services of other citizens, don’t be surprised if the rest of us get together and lock you away in a place where you still won’t have the right to a big screen color TV or a life of leisure.

Comment: Um… ok again. This is a little underharsh. Best system I have seen in the world is Singapore. Just cain their ass for stealing and similar. This one is actually under-aggressive (if you want to actually solve the crime problem).

ARTICLE VIII: You do not have the right to a job. All of us sure want you to have a job, and will gladly help you along in hard times, but we expect you to take advantage of the opportunities of education and vocational training laid before you to make yourself useful.

Comment: Um… AMEN

ARTICLE IX: You do not have the right to happiness. Being an American means that you have the right to PURSUE happiness, which by the way, is a lot easier if you are unencumbered by an over abundance of idiotic laws created by those of you who were confused by the Bill of Rights.

Comment: Totally true. Yet also a lot easier without an overabundance of idiotic religious legislation created by those of you confused about Christian values.

ARTICLE X: This is an English speaking country. We don’t care where you are from, English is our language. Learn it or go back to wherever you came from!

Comment: Damn, you just care too much… chill out. Spanish speakers bother me exactly zero. Sad they make less money but that is the consequence for not learning the required skills for success.

ARTICLE XI: You do not have the right to change our country’s history or heritage. This country was founded on the belief in one true God. And yet, you are given the freedom to believe in any religion, any faith, or no faith at all; with no fear of persecution. The phrase IN GOD WE TRUST is part of our heritage and history, and if you are uncomfortable with it, TOUGH!

Comment: Uh, after all that constituional talk did you forget Amendment 1 in the Bill of Rights? This country was founed on the belief that people could pick their own god to belive in. That is not a given freedom, it is a founding freedom. VERY NEARLY NO ONE in the US knows where the phrase “In God We Trust” even came from to end up on our money. So why the do they care so damn much about taking it off. Honestly, WHO CARES?! What a stupid thing to fight over.

So for a bit of background, every time I have been to Africa and Asia, I have taken a minimum number of preparatory medications and inoculations. Usually what happens is, whoever it is in the party that took all the suggested crap got sick while my body never seems to care what continent I am on. So this time to Africa was no different and of course it followed with me having to listen to everyone else about how stupid I am for not taking malaria pills (even the story of the people we met who lived in the “malaria zone” we were in for 8 years with no pills while everyone’s malaria pills were causing them to have terrible stomach issues didn’t seem to help).

Well, it finally happened. I got sick. I haven’t gotten sick from anything in probably 15 years but it happened. I (as well as two of the other guys we went with) got a tick bite that resulted in tick bite fever. The lucky guy was the one who came down with the symptoms while he was still in South Africa. All he had to do was go to the doc there in South Africa, get some anti-biotics, and done. In my case, I got home before the tick bite fever set in. So, I went to my doctor, a real nice guy, and told him I thought I had Afrcian Tick Bite Fever and needed some antibiotics to get right again. Well, instead I sat and listened to this big line of what I can best refer to as “medicalese bullshit” that was basically a bunch of clinical talk I couldn’t understand other than that he thought I had a spider bite rather than a tick bite. Well hell… he is the doc right? So I take the prescription he writes and go home to start taking it. By the next morning I feel like complete hell and have broken out with what looks like a case of the adult chicken pocks. I go back the next morning. Doc agrees that wasn’t what was supposed to happen so he calls Dr. Whoever that was one of Denver’s experts in infectious diseases from Africa. He explains the situation and the infectious disease doc tells him that (SURPRISE) it is African Tick Bite Fever caused by a TICK. I am accordingly prescribed the appropriate anti-biotic and two pills later feel 100%. Talk about “practicing” medicine, what a waste of time… should have just let my body fight off. I would have saved like $250 worth of doctor visits, two prescriptions, and a bunch of hassle.

OUTSIDE OF TICK BITE FEVER HOWEVER, Southern Africa once again proved to be among the coolest places I know of on the planet. We spent two and a half weeks in South Africa and then about 3 days in Zimbabwe. We managed to land right on top of the first widespread rioting and violence in South Africa in many years as well as the CRAZY election situation in Zimbabwe and I loved every bloody minute. Anyway, pictures and more blog posts to come about the trip! In the meantime here is the quick highlight timeline:

1. Dan, Chuck, and Sister Shannon spend twelve days hunting in the Limpopo province. We did awesome including shooting a beautiful trophy big bull Cape Buffalo, hands down the best hunting species I have ever experienced.
2. Girlfriend Shannon and Pat arrive and we spend three days in Sun City relaxing. Activities included an elephant-back ride on the edge of Pilanesburgh National Park.
3. The group heads to Mosethla Bush Camp for three days. 3 days of game viewing and sleeping among the lions and elephants and giraffes. We saw piles of amazing game but the climax was the last day when a mother elephant decided to charge our truck!
4. All fly up to Victoria Falls in Zimbabwe. Vic Falls itself was the highlight but a canoe trip among the hippos and crocs as well as the general experience of being in a place that is facing the utter crisis Zimbabwe is facing were a pair of “close seconds”