Speakeasy forum: Madoff Calls US Government a "Ponzi Scheme"

and Medicare? plus additional comments that really don't say more than these two. But I do think some of the state lotteries might now be operating the same way. There is generally an option to take the money in payments over 2 or more decades or take some lesser value in cash. If taking the money in annual payments, the lottery money collected for that drawing was to be invested in a way that would provide enough in interest or dividends to pay the winner. I suspect that the dividend and interest from what is collected started falling short of earlier calculations and lotteries were needing to dip into other money to keep their commitments. This would amount to a Ponzi type scheme as well. I have to think, just as SS and Medicare are...or will be...teetering on the edge of bankruptcy, so will other forms of government sponsored gambling.

You guys don't invest?

try a combination of these higher yielding ETF's. You can double your return.

PFF PGF PGX JNK to name a few. There are plenty of high yielding funds now that trade like a stock, so easy to get into and out of them quickly if needed.

http://finance.yahoo.com/q/cq?d=v1&s=pgf%20pff%20pgx%20jnk

There's plenty of good dividend stocks and you pay less tax on dividends than on interest earned.

Higher risk means higher yield. Lower risk gives lower yield.

How much of the $0.255212 is Return Of Capital/Nondividend Distributions?

Shouldn't be any, all should be regular dividend since it's a fund investing in interest bearing corporate bonds. The thing to look out for is when/if the Federal Reserve finally starts to raise interest rates to banks, then yields on bonds will begin to rise, which for existing bonds will mean their price will drop. The advantage of ETF's and those which are month to month dividend payments are you can exit them quicker in case interest rates begin to rise than those in older style mutual funds. The other consideration is just how bad the economy becomes, which can also have an effect of raising the risk of the fund shares which could drive it's share price down.


http://finance.yahoo.com/q/pr?s=JNK+Profile
The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital High Yield Very Liquid Index. The fund normally invests at least 80% of total assets in securities that comprise its benchmark index. It may also invest its other assets in securities not included in its benchmark index. The fund is non-diversified.

https://www.spdrs.com/product/fundFullPage.seam?ticker=JNK
Everything about this one ETF. Check out others there too.
ETF = Exchange Traded Funds = Shares in a fund that trades in the stock market just like a stock, bypassing normal mutual fund rules for investing and divesting in a fund.

income dividends? Page 44 (JNK.ETF) Form 1099 Box 1a Breakdown

But not the same fund. For instance, the Dow is an index, but there are numerous funds that track the Dow (DJIA), but each fund is different. If each tracks perfectly then they should have the same results, the only differences being cost of administration and if a mutual fund the times when one can enter or leave the fund.

Size of fund makes a difference for amount paid each period to holders, so two funds tracking the same Index may have same yield, but different distribution.

Notice the Claymore price is about half that of JNK, so it's holdings are probably half or less than JNK, but the yield should be very similar.

http://www.irs.gov/publications/p564/ar02.html#en_US_publink1000177499

Ordinary Dividends

An ordinary dividend is a distribution by a mutual fund out of its earnings and profits. Include ordinary dividends that you receive from a mutual fund as dividend income on your individual income tax return.

Ordinary dividends are the most common type of dividends. They will be reported in box 1a of Form 1099-DIV or on a similar statement you receive from the mutual fund.
Qualified dividends. Many ordinary dividends you received are also classified as qualified dividends. The amount of your qualified dividends will be shown in box 1b of Form 1099-DIV or on a similar statement you get from the mutual fund.

Qualified dividends are taxed at the same maximum tax rates that apply to a net capital gain. They are taxed at 15% if the regular tax rate that would apply is 25% or higher. They are taxed at 0% (zero%) if the regular tax rate that would apply is lower than 25%.

To be a qualified dividend subject to the 0% or 15% rate, all of the following requirements must be met.

1.

The dividend must have been paid by a U.S. corporation or a qualified foreign corporation. See chapter 1 of Publication 550 for the definition of a qualified foreign corporation.
2.

The dividend must not be of a type excluded by law from the definition of a qualified dividend. See chapter 1 of Publication 550 for a list of these types of dividends.
3.

You must meet the holding period requirement (discussed next).

Holding period. You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it.

More information. See chapter 1 of Publication 550 for more information about qualified dividends.

and so is why you blend all years from inception to when it's time to cash in. But, I know that the overall trend here has been downward. The Canadian 10 year avg shows 5.6 but the past 5 years show a downward trend. I would say that is in line with what has happened here. My original return on money market accounts was over 6% and that has trended downward ever since. It's now in the 1/2% area. But even at 6%, after taxes and inflation of that period, the net gain was minimal at best. There is going to be risk whether your retirement plan is with the government or you manage it yourself. The advantage I pointed out with the government plan is that it has a back-up feed trough if things get lean. But that trough can go empty as well. But if you're comfortable with taking a promissory note from elected officials who may well not be around when you take your chips to the cashier, that's your choice. Personally, I'd rather make my own mistakes than have others make them for me.

From what I understand, the SS is actually OK "if" it was left alone. The Feds borrow from it so much that it actually pretty fuels the govt. pgms. out there and they hope to pay it back. Now, with so much being offred now even it can't make life easier for us. The whole point, the warning bells have gone off for yrs, maybe even decades but as long as the SS $ comes in from your pay check and any other source, it's OK. The latter day will come when it will hit us hard.

However, Madoff to sput it all hardly adds credence to himself, since he is one of the worst offenders of private trust. Even if the Feds fail at some point, they will pay it all back once the hard lesson is learned. Madoff, certainly can't say that. Plus, he has plenty of time to sput as it were and just why did the NY'er even give him the time? -----Willy

I call "Idaho People"- the 'no-income-tax' folks.

everywhere. Idaho was in the news when the protester's wife was killed some years ago in a standoff. My shorthand.

those who say 'Federal income tax, especially withholding, is unConstitutional.'
They say the Gov't takes in an excess of what is actually needed to 'fix potholes and get the trains running on time' and squirrels it away or something.
Don't get involved with either side, myself; I just pay my taxes and go away. I do know the hard-core anti-taxers have had another label: "inmates".