In my Straight Talk column two weeks ago I gave you a baker’s dozen of websites I read every week. In response, a whole bunch of you gave me and our readers a long list of other websites that are worth checking out. Thanks! I’ve already added several of them to my “favorites” file. (If for some reason you missed that column, click here to read it. I think you’ll enjoy it — including a lot of the fireworks in the comments section.)
Yesterday I realized something I said in that piece wasn’t quite accurate. No, no, don’t get ahead of me. I’m not about to retract anything I said about any of my favorite columns or columnists. But in reading the last item on my recommended list I realized I wasn’t entirely fair in my description.
I said that Daily Wealth gives more genuinely valuable contrarian investment advice than any other website I know of. And they do it for free (if you don’t count all the ads you’ll receive) six times a week.
That’s still true. But what I should have added is that every once in a while you’ll get some political commentary that is so right-on-the-mark you’ll wish you had said it first. At least that’s how I felt last week, when I read “This Is Why There Are No Jobs in America” by my good friend Porter Stansberry.
I liked it so much that I got the publisher’s permission to share it with you today. Read it and see if you don’t agree. If you do, then check out www.dailywealth.com on your own. I think you’ll enjoy what you find. Now, here’s the piece that impressed me so much:
I’d like to make you a business offer…
Seriously. This is a real offer. In fact, you really can’t turn me down, as you’ll come to understand in a moment.
Here’s the deal. You’re going to start a business or expand the one you’ve got now. It doesn’t really matter what you do or what you’re going to do. I’ll partner with you no matter what business you’re in — as long as it’s legal.
But I can’t give you any capital — you have to come up with that on your own. I won’t give you any labor — that’s definitely up to you. What I will do, however, is demand you follow all sorts of rules about what products and services you can offer, how much (and how often) you pay your employees, and where and when you’re allowed to operate your business. That’s my role in the affair: to tell you what to do.
Now in return for my rules, I’m going to take roughly half of whatever you make in the business each year. Half seems fair, doesn’t it? I think so. Of course, that’s half of your profits.
You’re also going to have to pay me about 12 percent of whatever you decide to pay your employees, because you’ve got to cover my expenses for promulgating all of the rules about who you can employ, when, where, and how. Come on, you’re my partner. It’s only "fair."
Now… after you’ve put your hard-earned savings at risk to start this business, and after you’ve worked hard at it for a few decades (paying me my 50 percent or a bit more along the way each year), you might decide you’d like to cash out — to finally live the good life.
Whether or not this is "fair" — some people never can afford to retire — is a different argument. As your partner, I’m happy for you to sell whenever you’d like… because our agreement says, if you sell, you have to pay me an additional 20 percent of whatever the capitalized value of the business is at that time.
I know… I know… you put up all the original capital. You took all the risks. You put in all of the labor. That’s all true. But I’ve done my part, too. I’ve collected 50 percent of the profits each year. And I’ve always come up with more rules for you to follow each year. Therefore, I deserve another, final 20 percent slice of the business.
Oh… and one more thing…
Even after you’ve sold the business and paid all of my fees, I’d recommend buying lots of life insurance. You see, even after you’ve been retired for years, when you die, you’ll have to pay me 50 percent of whatever your estate is worth.
After all, I’ve got lots of partners and not all of them are as successful as you and your family. We don’t think it’s “fair” for your kids to have such a big advantage. But if you buy enough life insurance, you can finance this expense for your children.
All in all, if you’re a very successful entrepreneur … if you’re one of the rare, lucky, and hard-working people who can create a new company, employ lots of people, and satisfy the public … you’ll end up paying me more than 75 percent of your income over your life. Thanks so much.
I’m sure you’ll think my offer is reasonable and happily partner with me … but it doesn’t really matter how you feel about it, because if you ever try to stiff me — or cheat me on any of my fees or rules — I’ll break down your door in the middle of the night, threaten you and your family with heavy, automatic weapons, and throw you in jail.
That’s how civil society is supposed to work, right? This is America, isn’t it?
That’s the offer America gives its entrepreneurs. And the idiots in Washington wonder why there are no new jobs.
And your editor returns. Well, that was something, wasn’t it? If any of you disagree with Porter’s arguments, I know you’ll be happy to tell me so below. I’ll be interested to see how some of my fervid critics (and I’m glad there are some of you out there, I really am) respond to his arguments.
In conclusion, let me mention two things. One, I saw an item in the news a few days ago that said Americans are fleeing the stock market in droves. In the first six months of this year, more than $33 billion was pulled out of stock mutual funds. That is, investors pulled $33 billion more dollars out of the market than they put in. That is a heck of a vote of “no confidence” in the Obama Administration’s efforts to fix our economy.
The second thing is that I promised the folks at Stansberry & Associates I’d give Porter’s monthly newsletter a plug, in return for them letting me reprint his rant. So here it is: To read more from Porter, sign up for his outstanding Investment Advisory. His latest issue — which covers the coming crisis brought on by the United States government — details exactly what he sees ahead and how to profit (and protect yourself). For details on how to gain immediate access to his report, click here.
If you think I ended this week on a downer I’m sorry, but next week will be worse. The working title of that column is “The Conspiracy that Is the Federal Reserve.” Stay tuned.
Until next time, keep some powder dry.
— Chip Wood