Corporate Inversion…

AbbVie

AbbVie’s $55BN  bid for UK drug maker Shire was approved, providing yet another footnote in the history of corporate inversion by the US companies largely motivated by an opportunity to avoid US corporate taxes.  The combined firm will move to UK, saving upwards of $8BN in US corporate taxes by some estimates.  While such a move certainly rubs policy makers the wrong way, in reality isn’t this a perfect case study in the free market economy?  People / companies have moved across state-lines for better opportunities so why not across country-borders in today’s global economy?  Some compare this to individuals denouncing US citizenship to save on personal taxes – I think that’s a bad comparable.  The latter is unthinkable, outrageous (I am an ex-military after all).  Cry of jingoism will not solve the problem – only permanent solution is to change the US corporate tax laws so that we can be competitive, on the level playing field with the likes of Ireland, etc.  It’s been a couple of years since Chicago lost Aon to UK (well-respected board members resigned in protest).  We were bracing for the same after Walgreens / Boots (UK) merger.  Fortunately, Walgreens announced that they are here to stay.  Every accretion / dilution model has a black-box, designed to justify “positive synergy” that may or may not come to fruition.  I am just trying to imagine how to build one for inversion tax savings…

EBONY Wealth Challenge Wrap-up, Part 3

Continued…

  • Stock up – this is a tip that I am not really sure if I agree with but here it goes.  A few well-selected stocks can give your portfolio a nice boost.  Just make sure you do your research.  A legendary mutual fund manager Peter Lynch once said, “before buying a stock, do as much research as you would normally do before buying a refrigerator.”  I personally like to leave this task to professionals, e.g. buy funds vs. individual equities but researching before pulling the trigger still stands true.
  • Raise wealth builder – use technology (websites, apps) to encourage financial literacy with your kids.  Create family budgets, set savings goals and teach children how to earn money and save.  Good habits in fiduciary responsibility early on will go a long way.

These are 9 tips from the latest issue of the magazine.  Which ones are you going to follow?

EBONY Wealth Challenge Wrap-up, Part 2

Continued…

  • Develop a side hustle – explore a field related to what you already do for a living to develop supplemental cash flow, e.g. teacher giving private tutoring sessions.  Obvious downside – what you gain in discretionary income, you will lose in available free time.
  • Find extra money at home – in addition to selling unwanted furniture, clothes, etc. at one of many popular sites, take a hard look at various services you have including cable and cell phone.  Everything’s negotiable – give customer service a call and ask if there’s anything they can do to keep you as a customer.
  • Develop passive income – somewhat related to the first bullet above, this entails creating multiple revenue streams that’s truly passive, e.g. does not necessarily depend on your time such as owning a rental property.
  • Save for retirement – company pensions are gone with the dinosaurs and you should not rely on social security for retirement anymore.  Take advantage of 401K matching if available where you work.  While many personal finance experts advocate 20% savings of household income, I’d say save something every month regardless of how small.  We all have to start somewhere.

Another reason why Google is taking over the world…

Google

An equities analyst on CNBC a while back labeled Google as a “one trick pony.”  True… but that is one helluva trick (I’m talking about its search engine technology of course) that has fueled growth / innovation since its inception.  The latest – Google selected Alcon, division of Novartis, to be its partner in developing what’s dubbed Google Lens.  These smart contact lens are designed to monitor wearer’s glucose levels in tears to proactively manage diabetic conditions.  Data are transmitted through a radio antenna embedded in the lens, fraction of human hair thickness then presumably alerts the wearer to take certain precautions through various mobile devices.  Norvartis tried to invent such lens on its own but was not successful.  This is the stuff that you’d read in Ray Bradbury’s novels in the 80’s.  Truly amazing…

What is Bitcoin? (part II)

Continued…

  • What can I buy with bitcoins?  Almost anything…   While some mainstream retailers do not support the currency, many online retailers have embraced the concept.
  • Is it safe?  This is a million dollar question.  While its inherent volatility makes its future uncertain, many technologists much smarter than me are working on making it safer.  Meanwhile bad publicity around currency exchanges either getting hacked or shutting down is preventing the general public from jumping in head first.
  • Can Bitcoin boost my business?  Yet another million dollar question.  Let’s put it this way – if you accept it, you will get publicity.  Is that worth taking the risk?  Many would argue yes.

Draw your own conclusion.  Only time will tell if Bitcoin is a passing fad or here to stay.

What is Bitcoin? (part I)

Every semester, I take my students from Columbia College to Chicago Federal Bank’s Money Museum.  It’s a great experience for the students, and I also learn something new with every visit.  On our last visit, I pulled one of the PhDs aside (they all possess a doctorate degree in Economics) and asked, “what do you think about bitcoin?”  The presenter gave me a one sentence answer – it’s a safe haven for illicit traders.  Probably a little too harsh answer, so I did my own research.

  • What is bitcoin?  It’s a virtual currency created by an unknown Japanese programmer (only his pseudonym is known).  It’s not associated with any country or government, making it truly universal.
  • How does it work?  Every user has a “wallet” with a unique identifier.  While all transactions are recorded, user ID is kept anonymous (OK, so that supports illicit trade comment).
  • How  do I get bitcoins?  Various exchange sites / services let you buy and sell for cash.  You can also mine them (honestly I don’t get this concept).

To be continued…

EBONY Wealth Challenge Wrap-up, Part 1

As published in the most recent issue paraphrased….

  1. Get your mind right:  Wealth begins in the mind and ends in the purse.  If you want to earn more, you must learn more.
  2. Lower your bills:  Renegotiate the terms for your car note, cable bills, utilities and cellphone bills.  Be pleasant – everything’s negotiable.
  3. Automate:  Pay your bills automatically each month by setting up electronic withdrawals to eliminate late fees, avoid credit score issues and reduce postage costs.  And even if you are late, negotiate elimination of late fees.

To be continued…

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