THE BLESSINGS OF POT

My compliments to Molly Peckler of Venice, California, for developing what appears to be a profitable business model. With the passage of Proposition 64 in November 2016, legalizing the personal use of marijuana, it’s now open season for enterprises which seek to capitalize on those persons for whom the drug is their intoxicant of choice. Her use of “Single Speakeasy” sessions, which offer dating and life coaching services for marijuana-using singles, appears to be off and running.

In operating a business professing to enable persons to “come out of the ‘green closet,’ be open about who they are and find success in life and love,” there’ll be slim profits if directed to the economically challenged. Accordingly, Ms. Peckler aims her pitch toward entrepreneurs, technicians and other reasonably well-heeled professionals, with coaching prices that range from $1,000 to $3,000. With her degree in psychology, she can conjure up the spiel necessary to captivate those persons who crave “a feeling of warmth and energy while engaged in a smoke sesh with someone leading to a great bonding experience.”

Although the use of pot is now officially approved, I reserve my doubts as to its advisability. Just as an individual’s continual use of ethanol does irreparable harm to the liver, isn’t it possible repeated use of cannabis does the same to the brain? I feel instinctively this is the case. And if so, then what does it portend for a society if a substantial portion of its population grows ever more mentally incapacitated?  This is the principal reason I voted no on Proposition 64.

Let me offer a final comment.  The prominent article eulogizing this chic method to “spark relationships” displays Ms. Peckler taking a hit of marijuana at her home office.  I can’t help but wonder if this crafty businesswoman is actually a user of a substance which, as she suggests, can “suck the motivation and drive and ambition out of you,” or whether the picture is simply a PR device.  In this regard, I’ll not forget a comment attributed to Doris Duke, the daughter of a wealthy tobacco tycoon, whose personal fortune was derived from the sale of this product.  When once offered a cigarette, she responded: “No, thank you; I’ll not put one of those filthy things into my mouth.”

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, Roadway to Prosperity

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GENERATING CASH FLOW: A TOUGH JOB

A revealing article appeared not long ago in a business website, titled “Invest Your Cash for a Steady Flow.” Its author compared two routes by which retirees might invest for a steady flow of income. The methods offered: an insurance company annuity or a mutual fund’s payout fund. Both techniques are highly promoted by their respective industries. Unfortunately, each presents notable defects that a thoroughly competent financial analyst specializing in retirement planning could clearly spell out.

The annuity route doesn’t entice me. That industry specializes in high fees and burdensome withdrawal penalties. In addition, the initial cost of the annuity is lost to your forever. Furthermore, the payments you receive become worth relatively less over time. In general, the annuity is not a device by which you’ll grow old in comfort.

The mutual-fund industry’s alternative, referred to as “managed payout” or “target distribution” funds, introduces uncertainties of its own. Though the management fees are less and what you invest doesn’t cease to be yours, there’s no assurance of a predictable cash flow. If the fund managers guess wrong in their investment decisions, you may find your income stream reduced to little or nothing . . . with no recourse.

If you now expect me to recommend a technique for a predictable annual return of eight percent or greater, I must disappoint you. Though I generate this for myself, it’s from an active and time-consuming business, not passive investment. Most persons are neither inclined to nor capable of involvement of this sort. Unfortunately you’ll earn little or nothing from bank savings deposits, money market accounts or certificates of deposits. And by the way, avoid like the plague promoters of programs that offer spectacular returns, sometimes up to 30 percent per month. No good comes of that.

So what do I suggest?  Your best bet will probably be a mixture of U.S. Treasury notes, short or intermediate-term high-grade corporate bonds, and stocks which pay respectable dividends.  Admittedly, you’ll not beat the world in this way, but neither will the world beat you.  The advantages are that fees and costs are minimal, risk is slight, and your cash flow is easily predictable.  And of equal importance, you need retain no financial advisor to supervise your selections.  It’s a simple program you can learn to operate, with far less to go wrong than most investment avenues you’ll be offered.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, Roadway to Prosperity

Click onto http://www.roadwaytoprosperity.com/

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RESCINDING OBAMACARE: A THANKLESS TASK

With less than a week before Donald Trump’s swearing in as president of the United States, and the newly elected congress now fully seated, Republican lawmakers are set to fulfill a campaign promise: the repeal and replacement of the Affordable Care Act (ACA), commonly known as Obamacare. Although the congressional Republicans passed a similar package in 2015 – one that was vetoed by President Obama – it’s uncertain what new laws are to be enacted.

Inasmuch as the ACA has been in effect since 2010, resulting in an estimated 20 million reduction in the number of uninsured persons, any new rules not making some provision for this fact will cause irreparable harm to many. In addition, if the currently operating set of subsidies to Americans with lower incomes, which help pay their premiums and deductibles, is done away with, how will those affected be able to access affordable health care? And finally, elimination of the provisions of ACA which extended Medicaid to include coverage to anyone earning less than $16,000 if single, or $33,000 for a family of four, will prove disastrous if simply eliminated.

It’s clear the Republican leadership is aware of the complexities involved. House Speaker Paul D. Ryan vowed “We’re not going to swap one 2,700-page monstrosity for another.” However, in closed-door meetings over the past two weeks, Republican legislators have expressed concern that no simple solutions are readily apparent and that the process of crafting a new set of workable laws could drag on interminably.

Let me offer an analysis and a prediction. Basic to the problem is the reality first-rate medical care in this country is unaffordable for most citizens, with 47 percent of Americans unable to come up with even $400 to cover an emergency room visit. Of even greater concern is the fact our nation now provides assistance to over 109 million welfare recipients. Included among the benefits provided is $74.1 billion to roughly 46.5 million persons on the Supplemental Nutrition Assistance Program (previously known as food stamps). It’s for these reasons I believe there can be no governmental program which provides health care to a meaningful percentage of the less affluent among us without unfairly targeting the income and assets of the vast mass of middle-class, middle-income Americans. Whatever program the Republicans eventually enact in response to the unpopularity of Obamacare will prove to be equally unpopular.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, Roadway to Prosperity

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FREE COLLEGE FOR EVERYONE

Perhaps one of the most prophetic assertions ever made was by the French poet, novelist and dramatist Victor Hugo, who penned the following line: “Nothing is as powerful as an idea whose time has come.” It may be America is on the verge of just such an idea. You’ll note the eminent author offered no comment relating to whether the idea is good or bad. Apparently “whose time has come” is a factor independent of the worthiness of the idea.

We’ll flash back to the 2016 presidential elections and a campaign pledge made by then-candidate Sen. Bernie Sanders (I-Vt), who, on May 3, 2016, proposed a formula to create free college education at public universities throughout the nation, at a price of $75 billion annually, to be financed through transaction taxes on Wall Street trades. Though Sen. Sanders no longer has a prominent forum from which to expound his views, his free college concept may have struck a political nerve. On Jan. 3, 2017, New York Governor Andrew Cuomo, with Sanders at his side, addressed the students at LaGuardia Community College in Queens, calling for legislation to provide free tuition for all full-time students who attend all New York state colleges. He declared that “to be competitive globally, we have to have the best educated workforce, and that means we have to have college for every child, man or woman who wants to attend.”

I harbor a few thoughts on this subject. I approve of college scholarships and have been involved in a foundation assisting well qualified students to obtain chemistry degrees these past 37 years. Note that the operative words are “well qualified,” for if the student is not both bright and motivated, any effort or funds devoted to the project are mostly wasted. And this is my concern with scholarship programs that are politically motivated. They are not administered for the education they provide the recipient, but rather for the votes they provide the sponsors.

Let me add a final comment: The enthusiastic support which Governor Cuomo’s proposal understandably received from students tells me this is an idea whose time has come. This was equally evident to Sen. Sanders, who prophesized: “If New York state does it this year, mark my words, state after state will follow.” Yes, it will come to pass, despite the fact the end result will be the effective stuffing of huge sums of public money down the proverbial rat hole. But perhaps that’s what public funds are all about.

 

 

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, Roadway to Prosperity

Click onto http://www.roadwaytoprosperity.com/

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