Are the Unemployment Numbers for Real?

Are the Unemployment Numbers for Real?

The Department of Labor announced that 138,000 jobs were created in the month of May.  What they didn’t tell you was that 255,000 jobs were based on estimates. The DOL has a second number that goes beyond the employment survey.  It is called the Birth/Death ratio.

The DOL estimates the number of businesses that were “born” and the number of businesses that “died.” If a business died, it would be assumed that employees lost their jobs. If a business was born, it would be assumed that employees were added. This number could be  one of the biggest scams when it comes to economic indicators. You never want to see the word estimates including with the words government accounting.

If you subtracted out the “estimated” (made up) job numbers for this month we would have lost 117,000 jobs. The government has the freedom to massage those uncomfortable numbers a bit.

How about number of jobs gained since President Trump took office?  The government claims that between January and May, 594 jobs were created. That is pretty impressive considering that 641 jobs came from “estimates” courtesy of the birth/death ratio. Could we actually have a negative job creation?

Do you believe that we have an unemployment rate of 4.3%? exposes the flaws in government accounting. It scrubs the numbers and gives a more accurate picture of the economy. The government claims the unemployment rate is 4.3%. Shadowstats shows an unemployment rate of 20% plus.

Economically, we have very enigmatic growth. Obviously the unemployment situation in America is not as good as marketed.  Yet the markets attain new highs almost daily. I don’t want to see what happens when the market wakes up to reality.

The problem is that we have had 8 years of low economic growth. President Obama is the only President in US history to not exceed 3% in economic growth in any 12 month period. At some point that starts to matter.  Although that is not what you would want your legacy to be, to be fair he did inherit a post financial crisis economy.

President Trump might have an almost impossible task in front of him. Of course the media and the politicians will assign the blame accordingly. He can create the illusion through government accounting for only so long.

Is There Hope for Our Financial Future?

Is There Hope for Our Financial Future?

It is important to see how younger generations are approaching money.  Without question, we need to see the younger generations shift in the way they handle financial responsibility.  Let’s face it – Generation X and to an extent the Baby Boomer generation are not doing so hot.

I write about Millennials and how they might be the most financially responsible because of their attitudes towards debt and that they have the highest savings rate. Of course, this survey on why their saving (which is not for retirement) is a little troubling.

Next up is Generation Z. Researchers don’t agree on when the Generation Z begins. The consensus is birth years between the mid 90’s to 2000 might offer the most hope for a shift in financial responsibility. The College Savings Foundation just released their eight-annual survey on how high school students decide and fund college. Apparently, this generation is tackling the high cost of college intentionally and responsibly and serious about how college is paid for.

Here are the results:

— How it can help their careers: 69% say career plans affect their school choice

— What are the costs: 79% say that costs are a factor on which college to attend; and 39% said it changed their direction (40% to community college) *

— Avoiding debt:  only 11% said they would take on debt (down from 20% last year).  Including those who would “possibly” take on student loan debt, the number also dropped to 63% from 71%

— Saving. 60% of students are saving – with nearly half having saved between $1,000 – $5,000 and over one quarter more than $5,000 22% of them are saving primarily in 529s. 60% of their parents are also saving with 32% primarily in 529s.  NOTE – that is more in savings than the majority of adults have saved.

— Jobs.  54% have already gotten jobs to earn money for higher education; and 85% said they would work during college – with 20% planning to work full-time.

— Changing course due to costs*. 39% of students said that costs had caused them to change their higher education paths.  Of those, here is how they changed course:

  • 41% said they were now planning to attend a state school
  • 40% said they are attending a community college
  • 9 percent will be attending a vocational or career school
  • 7 percent indicated that they will be working instead of attending school

Now compare that to my generation, generation X which is a financial train wreck.  We never put that much thought into selecting a college.  After all, we were “entitled” to get that college. education and lifestyle or should I say lifestyle and maybe a college education.

So, there is hope in our financial future after all!

What Is the Best Bank for You?

What Is the Best Bank for You?

Kiplinger’s Personal Finance unveiled its highly anticipated, first-ever rankings of the Best Banks in the United States. Kiplinger picked a winner and a runner up in several categories. Notice Bank of America and Wells Fargo are no where to be found!

In-depth profiles of the selected institutions – all of which are listed below – are now available online at and will be available in print in the July 2017 issue of the magazine, on newsstands June 6.

My take? I like the credit union and smaller regional banks. I don’t care for the big banks. My favorite credit union is the Pentagon Federal Credit Union and my favorite bank is TBank located here in the DFW area. Here is what our friends at Kiplinger think!

Winners: TD Bank and U.S. Bank (tie)

Winner: Langley Federal Credit Union
Connexus Credit Union
Winner: Ally Bank
Runner-up: Bank of Internet
East: People’s United Bank
Midwest: Flagstar Bank
South: Trustmark National Bank
West: Bank of the West

Winner: Ally Bank
Runner-up: Langley Federal Credit Union


U.S. Bank
Fidelity Cash Management
Winner: Bank of Internet
Runner-up: Alliant Credit Union

Winner: Citibank
Runner-up: Bank of America
Winner: Charles Schwab Bank
Runner-up: Capital One 360

Winner: Navy Federal Credit Union
Runner-up: Andrews Federal Credit Union

Are Millennials Saving for the Wrong Reasons?

Are Millennials Saving for the Wrong Reasons?

Survey after survey points to the millennial generation as the most financially responsible generation around. Survey results also indicate that the Millennial generation is the generation that saves the highest percentage of income. A new survey by the Merrill Edge Report shows that the Millennial Generation might be very conflicted when it comes to money and why they are saving so much.

The report states that 63 percent of millennials are saving to live their “desired lifestyle,” versus 45 percent of both baby boomers and Gen Xers. 55 percent of boomers and Gen Xers are saving to leave the workforce, whereas only 37 percent of millennials are planning for a traditional retirement. According to the report, “the majority [of millennials] say they’re more likely to spend money on travel (81 percent), dining (65 percent) and fitness (55 percent) than save for their financial future.” Said another way, it is about saving for the now and immediate future versus saving for future financial independence (retirement).

The report goes onto say that “millennials are the first generation to plan long-term for financial freedom instead of retirement and “young adults tell us they are willing to do whatever it takes to achieve freedom and flexibility, even if it means working for the rest of their lives.”

I have a different take away regarding the results of the survey. My take away is that Millennials have an odd way of defining financial freedom and flexibility. Working for the rest of your life robs you of your freedom and flexibility. Rather financial freedom is defined as the day that you chose to earn an income. We spend most of our life without that choice. We have to work and earn income until we have enough put back to replace that income.  I refer to it as your financial independence day.

Why do you suppose we are getting survey results like this? After all, other surveys show that this generation is doing just about everything right when it comes to money. I think the reason is two-fold.

First, Gen Xers and Baby boomers have done a poor job modeling financial responsibility and a large percentage of those two generations will be forced to work longer than they intended because they can’t afford to retire. So, millennials could walk away with the following belief: “Why set your savings goals on retirement and enjoy it now since retirement doesn’t seem to work? After all, my parents aren’t in good financial shape or ready for retirement.”

Second, Millennials had a front row seat to watch their parents go through the financial crisis and that has affected their attitudes about investing for the long-term. It is no different than those who were Great Depression kids. Great Depression kids were greatly influenced by that time period in our history.

Of course, this is all speculation on my part. This is just a huge shift for a generation to take on an attitude so far to the left of traditional saving and investing objectives. I was hopeful that we would see a different shift when it comes to money and a financially responsible world would start to develop. Unfortunately, it looks like as financial independence goes, this generation is no different than generations that have gone before them. The irony is that it won’t be because of bad financial habits.


How to Detect Investment Fraud

How to Detect Investment Fraud

I am on an email list for the State Board of Securities. They send out emails about investment advisors that they have caught in investment scams. Unfortunately, these come out on a regular basis. There is a lot of fraud occurring. What’s worse, these fraudsters advertise on credible mediums such as the radio as well as websites. This leads investors to believe that they must be credible. After all, what investment advisor is dumb enough to advertise a fraudulent scheme right out in the open for regulators to see? You might be surprised! This is happening. The bottom line is that there is a lot of fraud occurring and I want to make sure that you don’t end up being a victim.  

Fraudulent investment selling is not hard to spot. They have 4 characteristics.

First, they could be asking you to write the check directly to the investment advisors firm or the investment advisor.  (All the same thing!) In legitimate investment scenarios, checks and balances exist and the investment advisor never has access to client money. There are walls of separation. First, there is the investment advisory firm. Then there is the broker dealer that monitors the investment advisor.  Finally, there is the clearing house which handles the money. To be fair, there can be legit situations where the check is written to the firm and it could be within the bounds of security laws. Regulators are discouraging that type of arrangements so you see less and less of it.  Plain and simple – an investment advisor that asks you for a check made out to any type of an account where there is ownership is a huge red flag.

 Second, is the advisor licensed?  This is a easy clue to investigate. The majority of time these fraudsters aren’t even licensed to sell investments.  You can actually go online and check the investment advisors registrations. Go to look up the investment advisor.  

Third, is the security that is being offered a registered investment?  The vast majority of cases of fraud include unregistered securities. Basically, you have unregistered advisors selling unregistered investments.

Fourth, are the benefits and claims almost too good to be true?  Oftentimes, they will include high guaranteed returns. There is a litmus test you can run. If it is a guaranteed rate of return they are promising, compare it to the going rate. If there is a big gap, then something is not right.  For example, let’s say that CD’s are paying 1.5% and fixed annuities are paying a maximum of 3%. The investment scam is offering a guaranteed rate of 9%. The gap between 9% and the going rate would signal that something is not right and potentially be a scam.

Years ago, I had someone call me wanting to know what I thought about a guaranteed CD that was paying 7%.  Knowing that the going rate was 3%, I warned the caller that this could be a scam. The individual went ahead and placed the money with the bank. They ended up losing $250,000 because it was indeed a scam.

We live in a day and time where you don’t have the luxury of being so trusting. Do your due diligence and you will prevent yourself from being another investor who has been scammed.  


Is Walmart Being Treated Unfairly?

 Is Walmart Being Treated Unfairly?  

 A group has organized to expose Walmart and their treatment of their employees. The group is organized by Making Change at Walmart and the United Food and Commercial Workers Union. They are also supported by the AFL-CIO. The 22 state, 30 city cross country tour made their stop in Dallas last week. This was from their press release:   

 “Walmart’s failure to pay a living wage costs taxpayers an estimated $682.0 million annually for its employees’ public assistance needs (as of 2014). Because Walmart refuses to do the right thing, thousands of its workers are forced to rely on government assistance programs to survive. In fact, a single, full-time Walmart employee, working 34 hours a week with 2 kids, still qualifies for Medicaid and food stamps even if they make Walmart’s average wage claim of $13.75 for full-time, hourly workers.

Irregular schedules and insufficient sick days also make Walmart a difficult place for families to work. Walmart’s low wages and poor benefits drain our community’s taxpayer-funded resources and hurt working families. Walmart already costs federal taxpayers an estimated $6.2 billion every year to cover their employees’ government assistance needs, like food stamps, CHIP, Medicaid, and subsidized housing. With Walmart profiting $13.6 billion last year, it is outrageous that a company this wealthy would depend on taxpayers and the community to subsidize its operations.”

The last sentence of their press release I think creates the question. Just because they make 13.6 billion, should Walmart pay more? Is this a classic call for wealth redistribution? Is Walmart being unfairly attacked? Let’s think about this for a second. Are they paying at least the minimum wage? Are the labor laws being violated? Did employees know what they were getting when they accepted employment at Walmart? Are they being forced to work against their will?

It doesn’t seem like they can answer any of the above questions and point to unfair treatment of Walmart employees. Having said that, it is unfortunate that Walmart does not value things such as the work/family balance. Further, it is even more unfortunate if employees are not offered fair compensation that is line with industry averages.

Then there is the accusation that Walmart is costing taxpayers hundreds of millions of dollars of taxpayer money through government assistance programs. There is a portion of the workforce that gets paid hourly and needs help taking care of their families. That is why we have government assistance.   

Don’t get me wrong, I am not a fan of Walmart. I do think there is a lot of truth to the dark side of Walmart. I also think that there are some moral issues at stake here. Expose them breaking labor laws and then you have something to expose. What are your thoughts? 

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