When I watched the first presidential debate between Clinton and Trump this past Monday night I was excited to hear Trump mention (several times) the 20 TRILLION dollars in federal debt that our country is currently saddled with.

Clinton did not mention the debt at all, not even once. She knows that the current administration increased the debt like crazy, and I suspect that Hillary will do nothing about this issue if she wins the election this fall. Chances are she’ll increase our national debt, after all, Hillary Clinton is the “status quo” candidate.

If Clinton had a plan for balancing the budget and reducing our federal debt she would have mentioned this, at least once.

Our national debt has been increased by BOTH parties, starting with Ronald Reagan in the 1980’s. At 20 trillion dollars our debt is not sustainable, it makes sense that Trump is thinking about the national debt, he knows first hand how disastrous debt can become.

Trump has a ton of business debt, but he also looks at that debt in balance to the value of the real estate holdings in his portfolio. This was one of the things he mentioned in the debates. Just the fact that Trump is talking about our debt is a good thing, and if he gains the White House he might even do something about it.

If you had a to wager a hundred bucks on which candidate is more likely to lower our national debt would you put your crisp Ben Franklin on Trump or Clinton?

It would be great if our national debt went down, even just a little bit. It would be good for my kids, and my future grandkids.

Any action taken to reduce our national debt would increase the confidence of global investors who want to invest funds in our country.

I don’t agree with Trump on many OTHER issues, his crazy statements, hatred of women, creepy admiration of his own daughter and certainly his clear bias against minorities, but at the end of the day none of these things will collapse the macro-economy of the United States.

But what about 25 or 30 trillion dollars in national debt by 2025?

That’s what will happen if we maintain the current holding pattern.

Something, or someone, has to have enough balls and bluster to change course. If not we will all have to live through another recession that makes 2008 look like nothing.

Just my 2 cents.

Ben Alexander

September 2016

Companies that manufacture a product have always chased the lowest labor rate around the globe. This is why your t-shirt is made in Honduras, your Chevy in Mexico, and your iphone in China.

This has been the main reason that the United States has been bleeding manufacturing jobs by the millions. Consider Honduras, where the mandated minimum wage is less than $1 per hour. If you make underwear in the United States you have to pay a federally mandated minimum wage of $7 per hour, plus workmen’s comp premiums, plus 7% wage taxes per employee. Even if you make a great product you can’t compete with the factory owner in Honduras who pays each worker $8 per day.

We’ve lost over 5 million jobs in manufacturing since 2000:

http://money.cnn.com/2016/03/29/news/economy/us-manufacturing-jobs/

There are huge changes coming in manufacturing, mainly because robotics are eliminating the wage issue. Robots cost the same no matter where you set up your factory, here is a factory in China that has embraced robotics:

http://www.techrepublic.com/article/chinese-factory-replaces-90-of-humans-with-robots-production-soars/

Another factor in manufacturing costs is logistics, or the costs of shipping. Your labor rates have to be low enough to make your widget in Mexico, then ship it back to the United States while still holding a profit.

Local robot manufacturing eliminates international tariffs and reduces shipping rates.

Of course, it costs money to convert a factory from human labor to robots, but it makes sense to eliminate labor costs from your overhead, even if this requires a large investment in technology.

Eventually all factories will convert to robotics, with just a handful of workers onsite in case of emergencies. As robotics get better and better there will be fewer employees, until the only human left in the equation will be the owner of the factory.

This is great news for factory owners in the United States, this means that all manufacturing will come back to America, right?

Perhaps not. The last factor here is the long term capital gains tax rate levied on the owner of our robotic factory. The United States has the sixth highest capital gains reat in the world:

Here in the USA we’re at 28.6%, while the same tax rate in Mexico is only 10%.

http://taxfoundation.org/blog/us-taxpayers-face-6th-highest-top-marginal-capital-gains-tax-rate-oecd

On a pure cost analysis it makes more sense to build your robot factory in the country with the lowest capital gains rate. Even though the factory might not create jobs it still uses the water and electricity wherever it’s located, the rent or mortgage is still going to the local municipality.

Do we want to “Make America Great Again?”

Let’s lower our capital gains tax rate to 5% for any manufacturer who wants to put up a factory anywhere in the United States. Let’s make the United States the most attractive place in the world to invent, create and manufacture new technology.

Sergey Brin came here from Russia and created Google, Elon Musk came here from South Africa and started PayPal, Tesla, SpaceX and Solar City.

We can create policies that make the United States the largest incubator in the world for technology and robotic manufacturing. We can create a culture that grows tech entrepreneurs from within but also attracts them here from the rest of the planet.

Imagine 10,000 factories building tech widgets HERE and paying a modest capital gains tax, versus 10,000 factories in other countries drawing talent away from our shores.

How many people like Elon Musk are out there, willing to grow a business, with an idea that can change the world… but they live in an environment that makes it harder to start a business?

Let’s find the entrepreneurs of the future and bring them here!

That’s my idea for the day…

-Ben Alexander

September 28, 2016

Travel agents were replaced by Expedia and Priceline.

Toll collectors were replaced by EZ Pass and Sun Pass.

Now 3.5 million truck drivers here in the United States will be replaced by technology like this:

In the next decade 99% of truck driving jobs will be gone, poof, vanished!

Imagine robots driving 18 wheelers all night long when the traffic is the lightest. By 2025 the only humans on a 3AM freeway will be drunks and cops, and the drunks will be passed out in the backseat of their self driving cars!

Robots drivers never sleep, they never need a bathroom break, they never get bored or distracted. Robots won’t ask for overtime pay, join unions, nor will they require paid vacations or take off for the holidays.

Robots won’t require expensive pension plans or government mandated healthcare.

Robots are an employers dream and a worker’s nightmare.

If you are in a JOB right now take a hard look at what you do and ask yourself this: will I be replaced by a robot or any other form of artificial intelligence?

The key here is ownership.

You don’t want to work in the factory, you want to OWN the robots that work in the factory, or own the repair business that fixes the robots that work in the factory.

If you are in the trucking biz you will do well if you OWN a self-driving semi, or 10 trucks, or 100.

Depending on a JOB is getting more risky as technology gets better.

I own 2 businesses. In this regard I carry far less risk than a typical white-collar guy working in a corporation.

I’ve never seen a ROBOT own a business.  

Your JOB can end today, with one decision made at headquarters by someone you might never meet.

If you depend on a JOB all your financial eggs are truly in one basket.

IF you OWN a business with multiple clients your risk is spread out among those clients. In order for Balloon Distractions to go under I would have to have hundreds of restaurants across 4 time zones decide to cancel our service. That probably won’t happen.

This is why we make sure our restaurant clients are spread across multiple brands.

You have to OWN something to survive the changes that are coming.

Build an asset that kicks off income, in addition to your job.

Use that income to pay off all your debt, then you won’t owe anything to anyone.

OWN your business, your robots, your cars and your home! Own it all.

OWN a business system.

You don’t have to invest thousands of dollars to own a business, I got my Life team started for less than $200. My investment in building my Life business was some time spent in coffee shops and gas burned in my car. Life Leadership is a technology company, with practical education via download on your smartphone.

I OWN my Life Leadership community, I can make it bigger if I find more leaders.

The robots and technology are coming, so own the robot, don’t get replaced by one!

Ben Alexander

Founder, BalloonDistractions.com

Member, LifeLeadership.com

September 2016

Let me start this post by saying that I’m neither a Democrat nor a Republican.

Both parties have increased our national debt, and both parties are unduly influenced by corporate and banking interests. The chart above tells the story.

If our government was run like a business we would already be shut down.

There are efficiency consultants in the business world who could delve into the government books and identify billions in wasteful spending. The federal budget could be balanced, but this would require massive layoffs in the defense industry, as well as a downsized military.

The United States currently has 662 military bases with active personnel stationed in 80 countries!

Why does the United States have a military base in Honduras?

There should be a color-coded ballot that details the voting history for every politician.

Green for the politician who votes to eliminate costs and balance the budget, RED for any politician who votes to increase our debt.

Yellow for the politician running for office for the first time.

Imagine a color-coded ballot based on financial intelligence!

I would vote all GREEN, regardless of party affiliation. If our politicians reduced costs and made government more efficient our taxes would eventually go down.

What if we elected honest, debt-free business owners instead of law school trained bureaucrats who’ve never owned or operated a business?

I’m NOT making a case for Trump. He claims that he’s worth billions, but he might also hold billions in debt. There is a specific reason he hasn’t disclosed all of his financials.

Trump has zero integrity, and he’s in hock up to cotton candy hairline.

It would be great to see successful, debt free business owners with INTEGRITY as the political leaders of our country. There are people like that out there, but the political realm is so nasty and dishonest that good people seem to be weeded out early in the process.

Instead we have a real estate investor (and total bull-shooter) who is known for ripping people off and getting married multiple times… running against a woman who flouted national security rules and refuses to shut down a charity in her name that has raked in millions of (questionable) dollars from foreign powers.

A color coded ballot would be a simple way to change the way our politicians run government, and it would be a simple way to help voters make better decisions.

Politicians might think twice before sinking our country further into debt.

That’s my idea for the day. As much as I enjoy writing these posts I’ve got 2 (profitable) ventures to run…

Ben Alexander

September 2016

Disclaimer: I am not a tax professional, I only play one on television… but anything that I write about here can be confirmed by your local CPA or tax attorney.

There are 2 financial curses that weigh down folks in the American middle class.

If both earners in a 2 income family work in a typical W-2 job their greatest expense will not be their mortgage, but the wage taxes that are taken out of their weekly paycheck.

This tax rate for W-2 wage earners starts at about 25% and goes up from there based on income. The more you earn in a JOB the higher your tax rate climbs!

A business owner (or sole proprietor) earning a similar gross wage pays an average tax rate of only 13.3%. Middle class folks pay most of the income tax in this country.

Wage taxes are the FIRST CURSE of the middle class.

Most middle class people are aspirational and tend to buy homes rather than rent. The typical $200,000 home, paid for over a 30 year mortgage at a low interest rate will still COST over $400,000 in total payments.

If you own a home take out a calculator and do some simple math based on your mortgage statement. My $157,000 home will cost me $396,000 if I wait until I’m 59 years old to pay it off!

My goal is to pay off my home by next year.

In addition to mortgage interest most middle class families also pay interest on car loans, credit card balances and student loans.

Interest payments are the SECOND CURSE of the middle class!

You can’t escape taxes, and we all need a place to live, right?

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Here is my super simple idea, a way to reduce these financial curses.

Do you and your spouse both work in W-2 jobs, and your home is NOT paid off yet?

Start a modest side business, something you can get into for less than $500.

Right away your taxes will decrease because you can claim expenses like mileage, meals and your cell phone bill.

Becoming a business owner this year might save you $5K this year in taxes, or it might save you much more, talk to an accountant about your particular situation.

The tax savings ALONE will probably offset the costs of starting your new venture.

Use the new income from your side business to PAY DOWN your debt.

You’ll still have to pay taxes, but if your business deductions reduce your taxes by $10,000 per year this adds up to $100,000 per decade that you get to keep in your pocket.

If you pay off your home in 10 to 15 years instead of the usual 30 you will save another $100,000 in interest payments.

Start a business with a low cost of entry.

Grow your income in your business to $1,000 per month.

Pay off your cars, your credit cards, then your home.

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But what kind of business is low risk for a modest investment?

It can be anything from a lawn service to a consulting business to a home based direct sales business like Mary Kay or Life Leadership.

I started Balloon Distractions while I still held a full time sales job.

There are many ways you can start a small side business and grow it to profitability.

Don’t make the mistake of going into further debt to buy a franchise for $100,000. This is a mistake, especially if you still have a full time job.

It took me a few months to get my Life business up to $1,000 per month in net profit, and I’m glad that I took that leap. Anyone could do what I did, even if they worked 40 hours a week. I built my Life business on nights and weekends.

You don’t have to spend your entire life paying a big chunk of your income to the banks and the IRS, you can avoid the 2 curses of the middle class!

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The other side benefit to operating a small business is not just the tax reduction and the additional income, but the skills that you will learn in taking the leap from being an employee to becoming an entrepreneur.

I haven’t been an employee since 2003, and this has given me tremendous freedom and options that I never would have had trading time for money and working for a boss.

I hope that gives you something to think about!

Ben Alexander

August 30, 2016

In the last 2 years my wife and I have paid off over $150,000 in personal and business debt. I was first influenced by the Dave Ramsey books, but the final straw was listening to the Financial Fitness CDs from Life Leadership.

The CDs fundamentally changed our philosophy about debt, for many years my spending had been more emotional than logical. After studying the Life Leadership material I began to look at my income and debt in a radically different way.

Before the CDs I had no idea what my total debt number was, but the audio training led me to focus on our overall debt number. I started writing down our monthly debt totals. We can only change what we measure, right?

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For twenty years I would replace a perfectly fine car just because it had 130,000 miles on it, I would justify this by telling myself “It’s just a $300 per month payment, that’s better than paying for repairs.”

I used to finance $15K for a nice used car, but it seemed that I always had a car payment.

My (paid off) Toyota Avalon has over 175,000 miles on it now, but I diligently maintain it. I’m trying to drive it to 300,000 miles, but I’d be  happy to reach the 250,000 mark. This is the first time that my wife and I have 2 paid off cars in the driveway, it feels great.

My next car will be paid for CASH, probably a modest used Honda or Toyota for 6 to 7K. I don’t care if the car is a little older, just as long as the air conditioning works!

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Eating out is another budget killer.

We used to go out to eat when there was food at home in the fridge. Eating out is a budget killer. The cost of one meal in a restaurant buys you enough groceries for 3 meals at home. If we are on the road traveling we might get a sandwich at Subway, but we no longer eat out at higher-end places. Not worth it.

When our house is paid off, and we have 100K in savings we’ll eat out more, but until then we’re focused on a very specific goal.

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Another factor for us was getting rid of credit cards. Now I use either cash or a debit card. The debit card is tied to a business operations account, I know exactly how much is in that account, if I spend more than the balance I’m whacked with a $35 overage charge.

The simple elegance of this is that I can only spend cash for (less than) the total amount in my operations account, no more. This forces me to plan a little better, it also places 100% of my business expenses flowing through one account.

At the end of each month I open a spreadsheet and enter all the amounts from my operations account into an excell spreadsheet, this then goes to my CPA for our corporate taxes. Online banking is perfect for this type of thing. I use that same operations account to process monthly bonuses out to my Balloon Distractions crew, so all my business expenses are in one place.

I still save receipts and paperwork, but my accounting is vastly simplified by running all my business expenses through the same account. If I lose a receipt for an expense it is still recorded on my bank statement.

Of course, the one deduction not recorded in my bank account is mileage, for this I save the oil change receipt for all our vehicles. When I was audited by Uncle Sam back in 2007 the government challenged me on the amount of mileage we were claiming. When I produced oil change receipts the IRS no longer questioned the deduction.

There is a tremendous sense of satisfaction that I get every time I pay off another debt item. This represents action and progress towards being totally debt free.

When I was mired in debt 2 years ago it felt like I was slowly choking, now that we’ve taken action and set a plan in place I can clearly see the day when we will pay off our  home!

We will be one of the very few families in our neighborhood with a PAID OFF home!

I’m not sure of the precise date when our home will be paid off, it might be 2 years from now, or it might be three… but I will still be one of the youngest people in my neighborhood (and the youngest person in my family) to accomplish this.

The crazy thing about it is that we don’t feel like our life is that constrained or different just because we eat out less and drive older cars.

If anything my marriage is BETTER because we both have more peace of mind in regard to our finances. Having less stress improves your health and your overall quality of life.

Drive used cars.

Eat out less.

If you own a business cut up your credit cards and run your expenses on a debit card!

Go Debt free!

-Ben Alexander

August 2016