Sunday, November 15, 2009

Madoff's auction

More on Mr. Madoff who seemed to become an epiphany of the Wall St. tycoons of late- recent auction of his personal possessions gave us a glance of his hyperexuberant lifestyle. Among other items is his wristwatch worth of $85K.
What I don't understand about all this is why people like him needed to keep on buying these items? He proved that he is "wealthy" many times over to all of his acquaintances and to himself many, many years ago, so no matter how he dressed, where he lived or what wristwatch he wore he still would've been thought of as the financial titan. I can't explain this by any rational means. I guess, it was pure greed...
Recently I visited that part of Europe that never been rich, and just recently became flush with cash. There most of the people would judge the degree of your success purely by the clothes you wear, the car you drive, and... you guessed right, the wristwatch you wear! Stories of your interesting, challenging , accomplished and, overall, happy life matter not to them. And I sort of understand them- they grew up in abject poverty, and now all the external attributes of wealth are perceived as success in life.
But to see the same logic emanating from the educated, albeit criminal, financial tycoons of the modern Western world??
The only saving grace in all of it is that Wall St. is not Main St.

Thursday, November 12, 2009

Taxes and Roth IRA

Haven't posted in a long while due to various reasons. And guess what, economy is not better since my last post. In fact, it looks like it might be worse. In addition to California, 9 more states are in trouble

For all of us, it means only one thing: more taxes. On everything. ( I had to renew my car registration- it's $186 for 2 years, compared to the previous $ 120 !!)
So this change for Roth IRA rules for 2010 becomes more and more attractive- you will be able to roll over your traditional IRAs into Roth IRA regardless of your income, obviously paying taxes on gains( this can be spread over 2011 and 2012). But since a market took such a hit lately (with some latest recovery), it might be that you won't owe anything in taxes, since you pay taxes on the conversion amount.
They can start taxing Roth IRAs too, sometime in the future, however...