Wisdom of Rich Dad

This morning I opened up my Wall Street Journal to find out the recession is over. The National Bureau of Economic Research’s (NBER) Business Cycle Dating Committee, the group that officially declares the beginning and end of each recession, declared it so. Yet, it also cautioned that while the recession may be technically over, the pain will still remain for most Americans. Most notably, unemployment is set to remain high through at least 2013—two more years. The article gives a perfect eulogy for the recession: “It’s official: The 2007-2009 recession, which wiped out 7.3 million jobs, cut 4.1% from economic output and cost Americans 21% of their net worth, marked the longest slump since the Great Depression.”

Official baloney

Most Americans know that official announcements about recessions are a bunch of baloney. For instance, NBER didn’t declare we were in a recession until December of 2008—a full year after its supposed start. The fall prior to NBER’s announcement had seen the near collapse of the world economy as companies like Lehman Brothers, AIG, and Fannie and Freddie Mac fell. Anybody with a brain knew we were in a recession, and everybody had experienced its effects. Now, they’re telling us that the recession ended in June of 2009. Yet, the US has lost more jobs than it added since the supposed recovery began. Only think tanks and government agencies could be so officially stupid.

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In his latest column “Our Banana Republic” on the New York Times, Nicholas Kristof compares the US to a banana republic. “In my reporting, I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie. But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home—and in the aftermath of Tuesday’s election, it may get worse.”

Kristof goes on to give some facts on American inequality: “The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976.”

The fact that there’s a gross inequality between the rich and the poor in America is no secret. I’ve been writing for years that the middle class is disappearing. The rich are getting richer. The poor are getting poorer. Kristof is right about this, and there is no arguing the fact.

The question remains. Why?

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NEW YORK (AP) — Another 17 of America’s richest people, including Facebook CEO Mark Zuckerberg, junk bond pioneer Michael Milken and AOL co-founder Steve Case, have promised to give away most of their wealth.

At 26, Zuckerberg has put himself on the map not only as one of the world’s youngest billionaires, but also as a prominent newcomer to the world of philanthropy. Earlier this year, he pledged $100 million over five years to the Newark, N.J. school system. Now, he’s in the company of media titans Carl Icahn, 74, Barry Diller, 68, and others who have joined Giving Pledge, an effort led by Microsoft founder Bill Gates and investor Warren Buffett to commit the country’s wealthiest people to step up their charitable donations.

The group has signed up 57 people and their families since launching the campaign in June. The list also includes New York Mayor Michael Bloomberg, CNN founder Ted Turner and film director George Lucas. But Zuckerberg and Facebook co-founder Dustin Moskowitz, 26, are the two youngest.

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Being a couch potato may have an impact on your wallet if you’re mimicking the financial choices of some of TV’s characters. Sitcoms, dramas, and even reality shows often include intriguing plot lines and decisions by characters or contestants that offer lessons about money… though they’re usually framed as “good TV” rather than “teachable moments.”

Some glorify the idea of celebrity and make especially younger viewers think it’s easy to achieve the lifestyle lived by Hannah Montana or the New York City teens on “Gossip Girl.” Other programs show characters with a skewed idea of money compared to their salary and careers, explains Mike Schiano, author of “Spend Your Way to Wealth” and director of education for the non-profit Consumer Advocates Credit Counselors in Boca Raton.

“They give you this unrealistic view of the household. Even single people on TV have tons of money to do whatever they want. If you go into soap operas, forget it – nobody has a job but everybody lives in big homes,” he says. Even more strange? “Rarely do you see them use a credit card.” Realistic? Hardly, but if you watch carefully, you can pick up some credit clues to use. Here are a few…

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Think back to your high school English days and the exciting discussions you used to have about oxymoron. You know those phrases like wicked good, terribly pleased, and old news. It was always fun to come-up with a few of them. But there’s a phrase that is often uttered in the media that I find to be an oxymoron.

Celebrity charity.

Am I alone here?

Sure, celebrities do their fair share of good things. They show-up at charity events and raise money. They give their money to worthy organizations around the world. But how much good are they really doing?

More importantly, how much more could they be doing?

What really got me thinking about this is when Brad Pitt went down to New Orleans to build 150 Green Homes for those who lost their home because of Hurricane Katrina.

Brad Pitt held a press conference and said: “To build those 150 homes, we need the help of the American people. We need to all join together to do this. There is no reason why we can’t do a thousand homes.”

He was right and wrong at the same time. He was right that “there is no reason why we can’t do a thousand homes” but he was wrong when he said “we need the help of the American people.”

Do they really?

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NEW YORK (CNNMoney.com) — Millions of Americans are out of work despite a long, dedicated job search. And some of those job hunters are choosing to go freelance — essentially becoming their own bosses. About one in nine American workers are self-employed, according to Bureau of Labor statistics from 2009 and the trend is rising.

In taking that first step to go out on their own, many choose to start their businesses in their own home. But “free office space,” has costs — often hidden — and it’s important to understand these costs before you decide to start out on your own.

Some of the obvious costs of working from home include: Read the rest of this entry »