Money – Freedom (Part 3)
These freedom posts are pretty much the crux of why I am so adamant about conservative principles. Today’s post is on one of our most valuable, limited resources; time. Time is limited, you can’t get more or stretch it. All you can do is decide what you want to do with your time, how you want to use it. A lot of people trade their time for something they value; money. We spend the first two or three decades preparing, studying, learning, developing. Then we trade at least forty hours a week for the next several decades working for money. This money enhances the rest of our time. How much we have determines how we are able to spend time with our families, what we are able to purchase to make our lives away from work more comfortable and enjoyable. Money we obtain is essentially time from our lives, time we have chosen to spend working in order to improve our own and our families lives. Stated another way:
“Every dollar I earn comes from the sweat of my brow. Every dollar I earn, is at the cost of a few heartbeats. We only have so many heartbeats in our life, so every dollar I earn is a negotiation between what portion of my life I am prepared to give up in exchange for that dollar. When the Government has the power to determine how many of those heartbeats I consume will result in dollars I can keep, my freedom has gone.” (Devereaux Daily Dose)
Now, I’m not going to talk about taxes. That’s for another time. I’m going to talk about what I am or am not legally able to do with the money I am allowed to keep. This money is something I have worked for, have traded a portion of my life for, and so it stands to reason that I would like to choose how to use it.
Ah. Not so. My first example deals with Illinois; the Liberal Utopia where gun laws, regulations and social programs make us one of the least safe, highest unemployed and most bankrupt state in the nation. I have a friend who moved here with her family about a year ago. Her husband is doing a residency at Cook County Hospital. They have three children, and residencies don’t pay very much. She had worked out their budget very precisely, and when the first check came it was about 9% less than she had expected. They discovered that because he is an employee of a publicly funded hospital, they have a mandatory retirement plan, the Cook County Pension Fund. She researched the laws, and called the office, and was told unequivocally that there was no way for them to opt out.
Yeah, but… Retirement is a good thing! People need to save their money, and this makes it easier for them to do and helps take care of them when they are old. Basically, people aren’t smart enough to take care of themselves, the government needs to do it for them… right?
Yes, retirement is a good thing. So is freedom. They fully plan on having a retirement fund, once he’s fully employed and they don’t need every cent they make for rent and food. Basically, they know their situation better than the government does. She knew that she would put the money to better use at that point, when they really needed it, than later when he has finished his medical degree and had disposable income to put into savings. This is, of course, on top of the Social Security tax that everyone in the nation is forced to pay, even if we would rather choose for ourselves how to invest our money. (For the sake of full disclosure: once he has finished his residency and leaves Illinois he will be eligible to a refund, with a 20% tax and 10% IRS penalty, of course.)
Now, a fun one. After my husband graduated from college, he got a job as an engineer at AST, a smaller company that has since been purchased by Raytheon. He had stock options, he could purchase stocks from the company at 5% less than the going price. We bought what we could, knowing we were guaranteed a 5% return. My husband started day trading a bit, just APSG stocks, through Sogotrade and Scottrade. He would buy $1000 worth of stocks, then sell them a few hours later for $1050. It was a risk, of course. Sometimes the price would dip and it would be a few days before we could sell it for a profit. But we thought it was a secure investment, and that’s how we wanted to use our money. We noticed that we were allowed to purchase twice the value of our account (if we had $1000, we could buy $2000 in stocks). That seemed odd to us, and we just bought with money we actually had.
One day, however, we logged onto our account, and it was frozen. Courtesy of the U.S. Securities and Exchange Commission. The SEC has the power to regulate stock exchanges, and we had been labeled “Pattern Day Traders,” and were subject to trading rules. Basically, we were not allowed more than four transactions (one transaction is a purchase and sale) of one stock in five business days. Now, we could get around this if we had $25,000 in our account, but we did not. The reason they gave for this is that the $25,000 guaranteed that investors had the funds to cover any losses they had. Which is ludicrous; if we had $25,000, we could just spend $50,000, and whatever losses we had wouldn’t have any kind of guarantee. We were only trading with the money we had in our account, so it’s self evident that we could ‘cover’ any losses we had.
Well, this is tricky, right? The stock market is really complicated, and we need to regulate it. And besides, individual people investing in the stock market don’t know what they’re doing, so they need some protections and limits.
Yeah, the stock market is complicated. I don’t pretend to understand it. I think that we don’t need regulation half as much as we need to stop making stupid laws, like you can invest twice as much as you have or you can sell stocks you haven’t purchased yet. It’s like Vegas on steroids, with rules like, “You can gamble two houses even though you only have one.” No wonder it’s a mess. But what sense does it make to say, “We’ll pass all these laws letting people play with money they don’t have and the market in ways that don’t make sense, then make a bunch of new laws to regulate it so that thousands of people spending millions of dollars they don’t have and selling millions of stocks they don’t own don’t negatively effect the economy.” Yeah…
Basically; I have some money. I want to buy stocks. Then I want to sell them when they worth more. And I want to do it several times a week. Or, I have money, and I want to spend it now and start saving for retirement in a few years. Should I be allowed to choose what I do with my money, or not?