Using an LLC for Estate Planning
.Using an LLC for Estate Planning
By Michelle Ullman Updated November 14, 2021
It can help you pass assets down to your heirs while avoiding taxes
Somewhere between a corporation and a partnership lies the limited liability company (LLC). This hybrid legal entity is beneficial for small-business owners and is also a powerful tool for estate planning.
If you want to transfer assets to your children, grandchildren, or other family members—but you are concerned about gift taxes or the burden of estate taxes your beneficiaries will owe upon your passing—an LLC can help you control and protect assets during your lifetime, keep assets in the family, and reduce taxes owed by you or your family members.
Using an LLC for Estate Planning
By Michelle Ullman Updated November 14, 2021
Reviewed By Anthony Battle Fact Checked By Amanda Jackson
It can help you pass assets down to your heirs while avoiding taxes
Somewhere between a corporation and a partnership lies the limited liability company (LLC). This hybrid legal entity is beneficial for small-business owners and is also a powerful tool for estate planning.
If you want to transfer assets to your children, grandchildren, or other family members—but you are concerned about gift taxes or the burden of estate taxes your beneficiaries will owe upon your passing—an LLC can help you control and protect assets during your lifetime, keep assets in the family, and reduce taxes owed by you or your family members.
KEY TAKEAWAYS
A limited liability company (LLC) can be a useful legal structure through which to pass assets down to your loved ones while avoiding or minimizing estate and gift taxes.
A family LLC allows your heirs to become shareholders who can then benefit from the assets held by the LLC, while you retain management control.
The tax benefit of the LLC lies in the fact that the value of the shares transferred to heirs can be discounted quite steeply, often up to 40% of their market value.
Just about any asset can be put into an LLC.
What Is an LLC?
An LLC is a legal entity recognized in all 50 states, although each state has its own regulations governing the formation, running, and taxation of these companies. Like a corporation, LLC owners (called members) are protected from personal liability in case of debt, lawsuit, or other claims, thus protecting personal property such as a home, automobile, personal bank account, or investment.
Unlike a corporation, LLC members can manage the LLC in whatever fashion they like and are subject to fewer state regulations and formalities than a corporation. As a partnership, members of an LLC report the business's profits and losses on their personal tax returns, instead of the LLC itself being taxed as a business entity.1
Benefits of Using an LLC for Estate Planning
You’ve worked hard to earn and grow your wealth, and you probably want as much of it as possible to stay in your family once you’re gone. Establishing a family LLC with your children allows you to:
Effectively reduce the estate taxes your children would be required to pay on their inheritance
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What Is A Digital Wallet — And Is It Safe?
.What Is A Digital Wallet — And Is It Safe?
Erica Gerald Mason September 30, 2021
When people talk about having a wallet, they usually mean a place to physically stash your cash and credit cards. But these days, you can use contact-less digital wallets instead of traditional physical ones — and they've only grown in popularity during the COVID-19 pandemic.
With a quick scan or a tap, you can complete financial transactions safely and securely. That's because digital wallets allow you to pay without having to use your physical credit cards.
What Is A Digital Wallet — And Is It Safe?
Erica Gerald Mason September 30, 2021
When people talk about having a wallet, they usually mean a place to physically stash your cash and credit cards. But these days, you can use contact-less digital wallets instead of traditional physical ones — and they've only grown in popularity during the COVID-19 pandemic.
With a quick scan or a tap, you can complete financial transactions safely and securely. That's because digital wallets allow you to pay without having to use your physical credit cards.
So What, Exactly, Is A Digital Wallet?
The term "digital wallet" refers to any device storing information related to financial transactions via an app. They include smartphones, wearables such as smart watches, tablets, and laptops.
How Do Digital Wallets Work?
A digital wallet stores your payment information via an app so you can make purchases electronically, such as from your computer, smartphone, watch or other smart devices, whether you're in a physical store or online.
To complete the transaction, you might need to provide a passcode or passwords, use your device's facial recognition software, or authenticate with your fingerprint. Ultimately, this added security measure makes sure it's really you who is utilizing your phone to make purchases, pay someone directly or book a ticket.
If you are using a non-mobile digital wallet, such as your laptop, you may have to log in or provide a password. There is no need to locate your physical card and type in several details, which makes the checkout process go much quicker and easier.
Here's How You Can Use Your Digital Wallet?
So, here's where digital wallets really shine.
To continue reading, please go to the original article here:
https://www.yahoo.com/lifestyle/are-digital-wallets-safe-yahoo-subscriptions-223341632.html
12 Realistic Ways to Make Your First $1 Million
.12 Realistic Ways to Make Your First $1 Million
Barbara Friedberg Sun, November 14, 2021,
At first glance, building a net worth of $1 million might seem unattainable, but it's more realistic than you think. In fact, you don't even need a winning lottery ticket or a trust fund to join this exclusive club.
Your annual income certainly plays a role, but the way you allocate your funds actually matters more than your salary. When properly planned, a solid work ethic, responsible spending habits and savvy investing can grow your fortune to $1 million -- and far beyond.
12 Realistic Ways to Make Your First $1 Million
Barbara Friedberg Sun, November 14, 2021,
At first glance, building a net worth of $1 million might seem unattainable, but it's more realistic than you think. In fact, you don't even need a winning lottery ticket or a trust fund to join this exclusive club.
Your annual income certainly plays a role, but the way you allocate your funds actually matters more than your salary. When properly planned, a solid work ethic, responsible spending habits and savvy investing can grow your fortune to $1 million -- and far beyond.
Achieving this goal will require you to make some sacrifices, but the feeling of financial security is priceless. If you're serious about becoming a millionaire, it's time to start making some major moves. Craft a solid game plan by incorporating some -- or all -- of these 12 tips into your lifestyle and get on your way to making your first $1 million.
Boost Your Profit Margin
A profit margin isn't strictly reserved for businesses; it also applies to you. "By increasing the gap between what you earn and what you spend, you end up with a profit in exactly the same way a business earns a profit," said J.D. Roth, founder of Get Rich Slowly. "This profit can then be used to pursue your long-term financial goals."
To specifically reach a million bucks, you'll need to boost your savings rate substantially more than the normal 5 percent to 15 percent, said Roth. He suggested saving half of your income, and noted that you'll have to make hard choices of deferring present spending in exchange for future financial success. For two-income families, he suggested choosing to live on one income, and saving and investing the other salary.
https://finance.yahoo.com/news/12-realistic-ways-first-1-110003107.html
4 Ways To Protect Your Account From Bank Fraud
Bank Fraud Is On The Rise — Here Are 4 Ways To Protect Your Account
Korin Miller June 3, 2021
One of the scariest things about internet fraud is knowing that someone could hack your bank account if they happen to get a hold of certain personal information. It's only natural, then, to wonder about how to protect your bank account from fraud.
Bank account fraud happens, and it can mean the difference between you keeping your hard-earned money and seeing it vanish. Bank fraud attacks increased 159 percent over the past year, according to an analysis of 12 billion global transactions over the past year by risk management platform Feedzai, making this a very real risk.
Bank Fraud Is On The Rise — Here Are 4 Ways To Protect Your Account
Korin Miller June 3, 2021
One of the scariest things about internet fraud is knowing that someone could hack your bank account if they happen to get a hold of certain personal information. It's only natural, then, to wonder about how to protect your bank account from fraud.
Bank account fraud happens, and it can mean the difference between you keeping your hard-earned money and seeing it vanish. Bank fraud attacks increased 159 percent over the past year, according to an analysis of 12 billion global transactions over the past year by risk management platform Feedzai, making this a very real risk.
Luckily, you don't have to just hope you'll avoid getting scammed. Signing up for a password manager like LastPass Premium can help ensure that you create a strong enough password — and remember it — so that bank account fraud won't be an issue (but more on that later). Here's what you need to know about bank account scams and how to protect your account.
What Is Bank Account Fraud?
At a basic level, banking scams involve someone attempting to access your account, according to USA.gov. That's generally broken into four categories:
Overpayment scams. This is when a scam artist sends you a counterfeit check. They then tell you to deposit it in your bank account and then wire part of the money back to them. The check is fake, and you'll have to pay your bank the amount — and you'll lose any money you wired.
Unsolicited check fraud. If you cash a check from a scammer that you received for no reason, you could be accidentally authorizing the purchase of goods or signing up for a loan you didn't ask for.
Automatic withdrawals. A scammer can create automatic debits from your account to qualify you for a free trial or to collect a prize.
Phishing. This is when a scam artist sends an email asking you to verify your bank account or debit card number.
To continue reading, please go to the original article here:
Helping Kids To Be Good With Money
.Helping Kids To Be Good With Money
15 Things A Personal Finance Expert Suggests Parents Do To Help Their Kids Be Good With Money
Thu, October 28, 2021,
I like to imagine I was raised to be financially intelligent (thanks ma and pa) but now that I have a kid of my own, I was curious what an expert had to say about raising kids to be good with money.
I write about personal finance and money, so you'd hope I have it together — and for the most part, I think I do. I owe my love of saving money and my abhorrence of debt to my parents who set me up with a bank account at birth, had me get a job as soon as it was legal, and made me save up for the dumb plastic toys I thought I just had to have.
Helping Kids To Be Good With Money
15 Things A Personal Finance Expert Suggests Parents Do To Help Their Kids Be Good With Money
Thu, October 28, 2021,
I like to imagine I was raised to be financially intelligent (thanks ma and pa) but now that I have a kid of my own, I was curious what an expert had to say about raising kids to be good with money.
I write about personal finance and money, so you'd hope I have it together — and for the most part, I think I do. I owe my love of saving money and my abhorrence of debt to my parents who set me up with a bank account at birth, had me get a job as soon as it was legal, and made me save up for the dumb plastic toys I thought I just had to have.
So I chatted with Beth Kobliner, the New York Times bestselling author of Make Your Kid a Money Genius (Even If You're Not). Sometimes you've gotta pull out the big guns.
Here are her tips:
1. Start talking about money early on.
There's a lot of shame, stress, and worry surrounding money, so it makes sense that many parents shy away from the topic. But Kobliner says that to raise financially intelligent kids, you'll want to start talking about money early on.
"And not only should it be early, but financial education also needs to be ongoing. Here’s why: A study out of the University of Wisconsin showed that by age 3, children can grasp basic economic concepts such as value and exchange. And a University of Cambridge survey found that by age 7, many of the habits that help kids manage their money are already set."
There's a lot of shame, stress, and worry surrounding money, so it makes sense that many parents shy away from the topic. But Kobliner says that to raise financially intelligent kids, you'll want to start talking about money early on.
"And not only should it be early, but financial education also needs to be ongoing. Here’s why: A study out of the University of Wisconsin showed that by age 3, children can grasp basic economic concepts such as value and exchange. And a University of Cambridge survey found that by age 7, many of the habits that help kids manage their money are already set."
2. Show them how money works and teach them the difference between wants and needs.
The act of trading money for goods and services will be completely foreign to them. They may literally think money, and the things it buys, grows on trees.
To continue reading, please go to the original article here:
https://www.yahoo.com/lifestyle/15-ways-parents-help-kids-194602014.html
16 Money Rules That Millionaires Swear By
.16 Money Rules That Millionaires Swear By
Gabrielle Olya Tue, November 9, 2021
Being a millionaire or billionaire -- especially a self-made one -- usually requires being disciplined about saving and spending, as well as investing wisely. Although the super rich can splurge on lavish vacations and fancy cars, some eschew a luxurious lifestyle for one that allows them to maintain their wealth over the long-term. So, if you want to live like a millionaire yourself, you'll have to follow the money rules of the wealthy.
Kristen Bell: Take Advantage of Coupons When Shopping Net worth: $40 million
"Frozen" star Kristen Bell still clips coupons despite her multi-million-dollar wealth.
16 Money Rules That Millionaires Swear By
Gabrielle Olya Tue, November 9, 2021
Being a millionaire or billionaire -- especially a self-made one -- usually requires being disciplined about saving and spending, as well as investing wisely. Although the super rich can splurge on lavish vacations and fancy cars, some eschew a luxurious lifestyle for one that allows them to maintain their wealth over the long-term. So, if you want to live like a millionaire yourself, you'll have to follow the money rules of the wealthy.
Kristen Bell: Take Advantage of Coupons When Shopping Net worth: $40 million
"Frozen" star Kristen Bell still clips coupons despite her multi-million-dollar wealth.
"I almost exclusively shop with coupons," she said on "Conan," sharing that her personal favorite place to shop with coupons is Bed Bath & Beyond. "It's the best one because they've got 20% off, and if you go and buy a duvet or an air conditioner or whatever, you could be saving upwards of $80."
Sara Blakely: Create and Maintain a Nest Egg Net worth: $1.2 billion
Spanx founder Sara Blakely kept her day job while starting her shapewear company to make sure she'd be able to maintain a healthy nest egg.
"It's really important to save money and create a nest egg, become comfortable for yourself with what the nest egg is, and don't touch it," she told Business Insider. "Leave it there. I always had a portion of my paycheck put into savings, and that was an easy automatic way ... I didn't quit my job until I'd already landed Neiman Marcus and Saks Fifth Avenue. I was so careful, I [worked on Spanx] at night and on the weekends because I didn't not want to have income coming in."
Warren Buffett: Think of Investing as a Long-Term Strategy Net worth: $104.6 billion
Billionaire investor Warren Buffett isn't a proponent of active stock trading.
"When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever," he wrote in his 1988 Berkshire Hathaway shareholders letter. "We are just the opposite of those who hurry to sell and book profits when companies perform well."
Grant Cardone: Save $100K and Invest the Rest Net worth: $300 million
Grant Cardone is a self-made millionaire, author and sales training expert. He recommends hitting a lofty savings goal -- $100,000 -- and then investing any money earned after you hit that amount.
"You need to prove to yourself that you can go out and get money," he wrote in a 2018 post for CNBC. "Saving $100,000 shows that you have an ability to make money and then to keep it. Most people can't do either of those things. Once you can earn and save, then you can start building wealth."
Mark Cuban: Don't Live Beyond Your Means, Even If That Means Living Like a Student Net worth: $4.5 billion
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/16-money-rules-millionaires-swear-011253670.html
What Not To Do While Trying To Get Out of Debt
.What Not To Do While Trying To Get Out of Debt
By Jaime Catmull Oct 7, 2021 Debt 101
Know how to pay off debt so you don't make costly mistakes.
If worrying about how to pay off debt keeps you awake some nights, late-night television abounds with alleged solutions. Some ads even promise to get rid of your debt for “pennies on the dollar.”
Fall victim to these “deals” and you might be left with worse financial troubles than before. But these aren’t the only foolish ways of paying off debt. Financial experts shared some common mistakes people make while trying to get out of debt — avoid making these same missteps.
1. Not Having a Reasonable Debt Repayment Strategy
What Not To Do While Trying To Get Out of Debt
By Jaime Catmull Oct 7, 2021 Debt 101
Know how to pay off debt so you don't make costly mistakes.
If worrying about how to pay off debt keeps you awake some nights, late-night television abounds with alleged solutions. Some ads even promise to get rid of your debt for “pennies on the dollar.”
Fall victim to these “deals” and you might be left with worse financial troubles than before. But these aren’t the only foolish ways of paying off debt. Financial experts shared some common mistakes people make while trying to get out of debt — avoid making these same missteps.
1. Not Having a Reasonable Debt Repayment Strategy
When sitting down to tackle your debt, the first step should be to see how much total debt you actually have. Add up any debt you have accrued from student loans, car loans, credit cards, medical debt, home equity loans, payday loans, personal loans and IRS and government debt. If you’ve been dealing with debt for a while, this might add up to a scary number that could leave you feeling overwhelmed, and you might feel like you don’t know how to even begin paying it back.
Why This May Be a Mistake
When you don’t have a clear debt repayment plan, your instinct might be to try to cut back on spending, save more and earn extra money until you’ve saved enough to pay back your debt all at once. However, if you are just making the minimum payments throughout this time, you’ll be accruing more interest all along.
Aim to consistently pay down your debt every month. Whether you want to tackle the highest-interest debt first or the smallest bill, know what your plan is and how you can achieve your goals.
Does It Ever Make Sense To Pay Down All Your Debt at Once?
To continue reading, please go to the original article here:
14 Ways To Improve Your Financial Future
.Feeling Overwhelmed With Debt? Here Are 14 Ways To Improve Your Financial Future
Gabrielle Olya Tue, November 9, 2021
Change Your Mindset
"Making the decision to get out of debt is the first step, but also the most difficult," said Cory Chapman, personal finance coach and CEO of EFC Wealth Management. "Actually changing your mind and accepting that you need to make life changes is the hardest part. The process of getting out of debt is going to take discipline, but it starts with the mindset that you want to be debt-free."
Get a Clear Picture of How Much Debt You Actually Have
Feeling Overwhelmed With Debt? Here Are 14 Ways To Improve Your Financial Future
Gabrielle Olya Tue, November 9, 2021
Change Your Mindset
"Making the decision to get out of debt is the first step, but also the most difficult," said Cory Chapman, personal finance coach and CEO of EFC Wealth Management. "Actually changing your mind and accepting that you need to make life changes is the hardest part. The process of getting out of debt is going to take discipline, but it starts with the mindset that you want to be debt-free."
Get a Clear Picture of How Much Debt You Actually Have
To get rid of debt, you first have to be aware of how much you actually have, said Michael Gerstman, ChFC, CLU, CEO of the Dallas-based retirement planning firm Gerstman Financial Group.
"List all of your debts, current balances and what the interest rate is on each debt," he said.
Consider Consolidating Your Debt
Debt consolidation might be a good option for those who have various high-interest debts and want to just make a single monthly payment that works toward paying down all your debts at once. If you go this route, taking out a personal loan could help you achieve your financial goals in a more manageable and affordable way.
Don't let your debt overwhelm you more than it should -- take advantage of smarter ways to pay it off.
Track Your Monthly Spending
Now that you know how much you owe, get a clear picture of where your money is going, whether it's on your morning coffee, tech, shopping, dining out or planning for your dream wedding.
"Most people don't even know what they are buying on a monthly basis," said Chapman. "The miscellaneous items and little purchases eventually add up. Use an app or program to help you keep track of your spending habits."
Eliminate Any Subscription Services You Don't Really Use
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/feeling-overwhelmed-debt-14-ways-202434618.html
Everything You Need to Know About Cultivating a 'Wealth Mindset'
.Everything You Need to Know About Cultivating a 'Wealth Mindset'
Jacqui Hathaway Levin Tue, November 9, 2021
Have you ever been told by, say, an Instagram influencer that the only barricade between you and endless financial wealth was your supposed negative mindset? Have you, too, been urged that if you would only sign up for said influencer's course today, you'd be able to tap into cosmic wisdom, "take the leap," and never have to worry about finances again? Don't fall for the trap, folks. Sure, cultivating wealth does take a fair amount of critical thinking, but there's (obviously) much more to it than that.
Some Insta-famous so-called money coaches (of course, not all) promise big changes—and fast. Who wouldn't be attracted to quitting their day job and following an off-the-beaten-path means to financial success and freedom?
Everything You Need to Know About Cultivating a 'Wealth Mindset'
Jacqui Hathaway Levin Tue, November 9, 2021
Have you ever been told by, say, an Instagram influencer that the only barricade between you and endless financial wealth was your supposed negative mindset? Have you, too, been urged that if you would only sign up for said influencer's course today, you'd be able to tap into cosmic wisdom, "take the leap," and never have to worry about finances again? Don't fall for the trap, folks. Sure, cultivating wealth does take a fair amount of critical thinking, but there's (obviously) much more to it than that.
Some Insta-famous so-called money coaches (of course, not all) promise big changes—and fast. Who wouldn't be attracted to quitting their day job and following an off-the-beaten-path means to financial success and freedom?
But let's take a step back towards reality. According to National Women's Law Center analysis, 2.4 million U.S. women were obligated to quit the labor force from 2020-2021. So a quick-fix financial course catches the light a bit differently for those seeking actual, necessary financial refuge. It certainly sounds attractive, but what can a mindset actually achieve?
There's nothing wrong with wanting to learn more about our relationships to money—and seeking out an (accredited) financial advisor is a stellar first step to doing so. But knowing what to realistically expect is important too, so let's iron out a few terms and find out exactly what a wealth mindset is—and how to get there in reality.
Wealth Mindset (or 'Abundant Thinking') vs. Scarcity Mindset
What is a wealth mindset?
Wealth mindset—or abundant thinking—is less about what we have and more about what we believe is available to us.
Kristen Euretig, CFP, founder and CEO of Brooklyn Plans, LLC, explains wealth mindset as the idea that the universe is plentiful and our potential is unlimited. "It involves defeating self-limiting beliefs that come up around money or life goals in general to break past self-imposed barriers to a better way of living," says Euretig.
What is scarcity mindset?
Scarcity mindset tells us there will never be enough—even if our bank account is stable and our bills are paid. This "not enough" feeling can result in toxic money habits or spending to feel good.
To continue reading, please go to the original article here:
https://www.yahoo.com/lifestyle/everything-know-cultivating-wealth-mindset-192710108.html
5 Wise Money Moves Before the Fed Starts Raising Interest Rates Again
.5 Wise Money Moves Before the Fed Starts Raising Interest Rates Again
Sigrid Forberg Tue, November 9, 2021
Chairman Jerome Powell (pictured) and the other policymakers at the Federal Reserve just said again, after their recent November meeting, that they'll keep holding a key interest rate near zero. Though the economy has been making gains, the officials want to sit tight a little longer.
But rates won’t stay low forever. As the economy recovers from the worst of the COVID-19 pandemic, inflation is rising and more people are getting back to work. So, the Fed has indicated a rate hike could come as soon as next year — moved up from previous plans to wait all the way until 2024.
5 Wise Money Moves Before the Fed Starts Raising Interest Rates Again
Sigrid Forberg Tue, November 9, 2021
Chairman Jerome Powell (pictured) and the other policymakers at the Federal Reserve just said again, after their recent November meeting, that they'll keep holding a key interest rate near zero. Though the economy has been making gains, the officials want to sit tight a little longer.
But rates won’t stay low forever. As the economy recovers from the worst of the COVID-19 pandemic, inflation is rising and more people are getting back to work. So, the Fed has indicated a rate hike could come as soon as next year — moved up from previous plans to wait all the way until 2024.
For consumers, that means now may be the time to splurge on something fun or take out a loan for something necessary, like a new car to replace an old pile of junk that won't start anymore.
Here are five money moves you should make before rates rise.
1. Refinance your home loan
Mortgage rates fell to record-breaking lows during the pandemic, but they’re slowly creeping up as the economy comes back from COVID-19.
While 30-year mortgage rates are still at historically low levels around 3%, the Mortgage Bankers Association is predicting they'll rise to 4% next year — which means it's time to stop procrastinating if you’ve been mulling a refinance.
Chances are you're still due for a refi. More than three-quarters of homeowners never refinanced at the low rates available during the first year of the pandemic, a Zillow survey found.
The same study revealed that nearly half those who did take out new and cheaper loans are now saving $300 or more each month.
2. Consolidate your debt
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/5-wise-money-moves-fed-005900963.html
4,000+ Years Later And They Still Haven’t Figured It Out
.4,000+ Years Later And They Still Haven’t Figured It Out
November 8, 2021 Notes From The Field By Simon Black
More than four thousand years ago around 2112 BC, King Ur-Nammu of ancient Sumeria gathered his scribes together to dictate a series of royal decrees, all of which were chiseled onto cuneiform tablets. A handful of these tablets were discovered and translated in the 20th century, making the Code of Ur-Nammu the oldest known set of laws in the world.
While most of the King’s laws dealt with criminal matters (i.e. requiring the death penalty for both murder and robbery), some of the rules were actually a very early form of price controls.
4,000+ Years Later And They Still Haven’t Figured It Out
November 8, 2021 Notes From The Field By Simon Black
More than four thousand years ago around 2112 BC, King Ur-Nammu of ancient Sumeria gathered his scribes together to dictate a series of royal decrees, all of which were chiseled onto cuneiform tablets. A handful of these tablets were discovered and translated in the 20th century, making the Code of Ur-Nammu the oldest known set of laws in the world.
While most of the King’s laws dealt with criminal matters (i.e. requiring the death penalty for both murder and robbery), some of the rules were actually a very early form of price controls.
Hundreds of years later, King Hammurabi of Babylon created his own set of laws, known to history as the Code of Hammurabi.
And while his code is famously known for its principle of ‘an eye for an eye, a tooth for a tooth’, much of Hammurabi’s code also fixed wages, prices, finance, and commerce.
For example, the King decreed that any man who defaults on his debts could pay off his creditors by subjecting his wife, son, or daughter to forced labor for three years… regardless of the size of the loan.
Hammurabi also fixed the price of wholesale grain storage, shipping, divorce, livestock, and even drinks at the local tavern.
There are also several sections devoted to wage controls; Hammurabi saw fit, for example, that a home builder be paid a certain fee that depended only on the size of the house.
Similarly, occupations ranging from farm laborers, ox drivers, shipbuilders, herdsmen, skilled artisans, etc. all had their wages fixed by the Code.
There is also strong historical evidence of price controls in ancient Egypt. The ancient Indian philosopher Vishnugupta advised kings to not only fix prices, but fix the maximum profit for traders and businesses.
And the Roman Emperor Diocletian’s infamous Edict on Wages and Prices in the early 300s AD was a complete disaster.
Wage controls, price controls, financial controls, and commercial controls have been vainly imposed by governments for thousands of years. We’ve learned from history that they simply do not work.
And yet, rather insanely, politicians keep trying these same tactics over and over again, expecting a different result.
Recently I was visited by a close friend of mine from Argentina who often tells me the grim economic tales of his home country.
Argentina is in a perennial state of economic chaos; like Venezuela, it went from being one of the most prosperous countries in the world in the 20th century, to one of the most chaotic.
They’ve confiscated assets, imposed wealth taxes, defaulted on their debt, banned exports, and utterly destroyed their currency.
In local currency terms, inflation in Argentina is 50%… though no one in their right minds actually holds their savings in Argentine pesos.
Inflation is now so bad in Argentina that the government recently imposed a set of price controls.
And my friend informed me that a number of producers, especially in the agricultural sector, have stopped delivering because the government’s price mandate is below their cost of production.
Last but not least, my friend told me that Argentina’s government is also planning to forbid businesses from laying off workers.
Even when a company cannot afford to keep employees because the economic situation is so pitiful, they somehow have to keep paying workers with money they don’t have.
It’s like that old Soviet adage-- “we pretend to work, they pretend to pay us.”
These types of measures would almost be comical if they didn’t cause such widespread suffering.
And yet even rich, advanced nations are susceptible to this way of thinking. In fact we’ve seen so much of it over the past 18 months, disguised as public health protocols.
They spent hundreds of billions of dollars to give businesses free “PPP” loans so that workers could continue to be paid to NOT work.
Then the government simply took on that responsibility themselves, paying people directly to stay home and NOT work.
Now they’re trying to force businesses to fire tens of millions of people, even in critical sectors like healthcare and transportation, because of their vaccine status.
Each of these measures is a way for the government to direct the supply and free flow of labor. In other words, they’re essentially wage controls.
We’ve also seen endless examples of other controls.
They forced certain places to close (churches, bars) but allowed others to operate (liquor stores, marijuana dispensaries, social justice riots).
They unilaterally suspended evictions and foreclosures, creating incentives for people to stop paying rent/interest.
And through the central bank, they’ve pumped hundreds of billions of dollars into financial markets, inflating stocks, bonds, housing, etc. to essentially create asset price controls.
The specific tactics are different. But conceptually, this idea of imposing extreme control over economic resources is quite similar to what Argentina has been doing… and what Hammurabihttps://www.sovereignman.com/trends/4000-years-later-and-they-still-havent-figured-it-out-33955/, Ur-Nammu, and Diocletian tried thousands of years ago.
This isn’t rocket science, it’s basic high school economics. Price controls don’t work. Central planning doesn’t work. There’s a reason the Soviet Union doesn’t exist anymore.
Price controls create shortages and inefficiencies. Everyone loses.
Inflation and supply chain dysfunction didn’t happen by accident. They’re the result of fanatical crusaders who never bothered to perform an objective cost/benefit analysis of their wage, price, and commercial controls.
And the more these people try to save the world, the more likely they are to keep wrecking it.
To your freedom, Simon Black, Founder, SovereignMan.com
https://www.sovereignman.com/trends/4000-years-later-and-they-still-havent-figured-it-out-33955/