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Saving rate versus investment returnsAlbert Einstein supposedly once said that compound interest is the eighth wonder of the world. But Einstein was an employee never understood leverage in government subsidized real estate loans x compound interest.What matters more: your saving rate or your investment returns?Accumulating Wealth in the Early YearsIf your goal is to achieve a net worth of $1 million (bad goal since it should be more a cashflow per month number) and you invest $10,000 every year and earn a 7% annual return on your investments — which is a reasonable assumption for long-term stock market returns — you’ll accumulate $1 million in about 30.7 years.The pixelated chart below shows exactly how long it would take to reach every $100,000 net worth milestone, using the assumptions of a $10,000 annual investment earning a 7% annual return:Notice how each $100,000 net worth milestone takes less time to reach than the last.This is Captain Obvious Stuff of course!Take away 1: We are told the normal stock market stuff grows at 8-10% a year. But what happens if you direct invest in deals and make 25-35% a year? What about a conservative 15%?You might find these charts discouraging if you’re someone who has yet to save their first $100,000.The numbers don’t lie: The first $100,000 takes the longest to accumulate. Warren Buffett’s longtime business partner Charlie Munger even once said, “The first $100,000 is a bitch!”I’m not a rocket scientist (did go to Space Camp) but it takes a large portion of the fuel to get the Space Shuttle off the ground a few inches. The rest is just momentum. In a real estate investor’s progression we call this the law of the first deal where its not going to be that great but as you stick to it you learn and more importantly your network grows (or join these others on the journey) and your ability to attract better deals improves.Have you ever tried to court a cat? You need to attract it! That’s how good deals are… they come to you.If you are aiming for financial independence (especially while working a full-time job) focus on variables you can control. Those ingrained in the the FIRE (Financial Freedom Retirement Extreme) movement focus on saving money. Never having a $5 Latte. We astute investor responsible use debt to maximize returns (and be smart with how we spend money).Personally I live by the Fat FIRE life style which consist of:I don’t buy anything I don’t really needFocus on experiences and get out of trading time for moneyAnd BTW I drive a Mercedes (only after my cashflow allowed me to do so)Roth vs Traditional Pretax 401k?Both are retirement accounts where you don’t get taxes on the gains while the money is in the program.Both get taxed at some point and you get to elect when you get taxed, either putting the money in (401K) or when you take it out (Roth).Question is when?Conventional wisdom says that generally, you want to pay taxes on it later because taxes will likely go up to pay of Quantitative Easing (ie paying out all the 2008 bailouts).#ConventionalWisdom engineered to keep you working foreverBut its a bit more complicated than just that and takes into account if you are going to make more money now or when you are old and taking the money out. Here at Simple Passive Cashflow, we are growing our money at 15-30% every year that we will likely be in a much higher tax bracket when we retire (cough cough… in our 40’s).Let me be clear… if you are investing in hard assets that produce income and employing safe prudent leverage then stay away for any sort of 401K or Roth plans.401Ks are for suckers. Plain and simple. You get stuck with bad investment options and getting killed by the fees. It’s such as shame that everyone is getting robbed blind by this.I am very against the Roth or any retirement account (other than 401k in some situations).You will pay taxes now or later and you will likely to pay more taxes in the future… so pay it now.And 10% penalty is nothing to be in retail type investments. You can recoup that in 12-14 months.QRPs or qualified retirement plans (Roth-IRA, Solo 401ks, etc) if you are an active real estate investor. If you are conservatively using prudent leverage and finding decent deals there is no reason you should not be able to retire in 10 years or less and thus negating the very reason for these accounts.When you have money in these accounts it sounds good that you are not taxed on gains but you are restricted from getting a Fannie Mae loan. Using the QRP loans get you the second tier financing options, for example, a Roth IRA can buy real estate on leverage, however, will need a non-recourse loan which is often a fraction high-interest rate and lower LTV. No Bueno!Caveat: If you are late to the game and already have a fat 401k then you should convert it to a solo401k. At that point, you should think about putting it into syndications since you are restricted on how you can leverage it.Anyway, let me know you would like a referral to my checkbook ira contact. You can get a free book on QRPs here.What should I be doing now?At some point, you are going to start moving through the wealth progression but for now you need to get your finances in order to save $5,000 a year then work to accumulate a $20,000 minimum downpayment on your first rental property and get on the escalator of true wealth.When you’re young or a drone of society conditioning, you tend to think more in the moment. The long-term consequences of our actions and decisions are an after-thought to instant gratification. Many of you will read this page and get motivated but only a fraction to take incremental action and build the support system around you. All the resources are around you and most of which are free… if nothing comes of this then its an execution problem.Here are the steps:1) Stop sabotaging yourselfYou hear it in personal development a lot that we often are our worst enemy. In our financial health, this is even more so the case whether you can’t hold a job or a doctor making $400,000 a year yet spending every single penny. Simple Passive Cashflow - Simple Passive Cashflow has never been about mindset that often employed by scammy Multi-Level Marketing ploys or get rich quick schemes. We are about tactics and putting your head down and driving toward a goal. That said there are things you need to stop.a) Stop listening to people who are NOT financially free. This includes commission based financial planners, family members, and co-workers. There are a lot of well written financial blogs and podcasts (PF Blog-o-sphere) following the FIRE (Financial independence retire early) philosophy (refrain from wasteful things like your $5 Coffee) but many of which are misguided and dogmatic in their approach. We are pretty dogmatic too but the results speak for themselves (see asset list)b) Stop investing in a 401k where you are limited to investments where there are hidden fees or so-called low expense ratios. Sorry to break it to you if you still believe in the Easter Bunny or Santa Clause but mutual funds are robbing Americans blind often taking the lions share of returns from asset management fees and leaving you all the risk of the market. At the very least stop contributing to 401ks or other retirement plans over the company match threshold. You should also start paying the minimums on your low-interest rate student loans.c) Spend less than you make to build up a surplus yes. But let’s have a goal and plan in mind. Many times this is a simple plan to save $20,000 to purchase that first asset that puts money into your bank every month instead of something that you don’t need. Once we have the cashflowing by all needs let loose and enjoy. Likely once you have a plan and see positive feedback you will be hooked and you will tighten the belt on your personal spending.d) Be conscious of what information (propaganda) you are taking in. If you want to be like everyone else (broke and working forever) then do what everyone else does. Trade your morning commute listening to the radio to filling your mind with new ideas via podcasts. Instead of mindlessly consuming YouTube videos on the toilet or coming home to decompress on the couch with Netflix try to open up a book or better yet connect with someone who is where you want to be or like-minded in the journey.e) Stop giving a Buck – Read this… Too many people are afraid of doing something different! Taking money out of your 401K/retirement is considered a sin or naughty even if it is to direct to safer investments. The system has got us trained like “Sheep-o” and we are being taken to the slaughterhouse if we keep on the linear path we were all programmed to do. Do the math and the numbers will tell you what to do. Even if you are not an engineer its pretty simple. Wall-Street wants to make it complicated so you just go with them and they fee you to death. Numbers don’t lie, brokers do!2) Get a credit cardYou need to build credit to qualify and build your credit score to eventually take advantage of Government subsidized Fannie Mae/Freddie Mac loans.Captain obvious warning: Avoid credit card debt. While you want a credit card to build credit, you don’t want to use it when you don’t need to. Pay it off immediately and don’t let a balance sit on your account.3) Find ways to make moneyFind ways to make money by selling the crap you don’t need. Facebook Marketplace and Craigslist is a great place to start.If you have a lot of credit cards try this little trick out.Find a side-gig that you enjoy. As some point, you will want to grow this as an excuse to take business deductions to lower your tax rate.I Don’t Understand the Economy?The financial sharks are counting on this and make money when you are confused and just investing the garbage they are peddling.Truth is the economy is not that complicated…The 2008 financial crisis was a mortgage industry issue which then impacted real estate crushed housing values and equity markets (stock market prices).Real estate was not the issue.This is one of the reasons we like real estate because:An ever-increasing population in the USA need a place to live. Te demand for housing remained stable while inventory stock remains lagging.A hard asset that is made up of multiple commodities (lumbar, fasteners, equipment, roofing, concrete).Rental real estate which produces income. This is why we are not advocates for owning your home unless you are in an area where the Rent-to-Value Ratios are more than 1%. You find the Rent-to-Value Ratio by taking the monthly rent dividing by the purchase price. For example, a $100,000 home that rents for 1,000 a month would have a Rent-to-Value Ratio of 1%. Most people I work with live in primary markets (as opposed to Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets) where the Rent-to-Value Ratios are under 1%.Watch as I break down how you can make 30%+ annual returns with simple rental property.I digress… obviously I am super passionate about rental real estate and you can get started here.In 2008 it was the credit markets that failed. In a credit-based economy, everything stops when credit markets seize up … including home loans.Conventional wisdom from so-call financial gurus (Suzie Orman or Dave Ramsey) will tell you debt is bad. They might be bad for most people because most people are unable to control their impulses and purchase things that they don’t Need and too much of what they Want.AAA You can read more about this controversial topic of the use of debt here. Oh by the way, without an influx of fresh debt to fund demand, prices collapsed… including Stocks too. Mortgage and real estate is just where it started in 2008 and likely with all the changes the 1) appraisal regulatory changes to minimize off the wall appraisals by random people, 2) lending standard to not allow people with no money, no job, no income, no assets (NINJAs) to get a loan, 3) no overbuilding of inventory to decrease the demand for housing stock.If you recall back in the 2004-2006 era, George Bush said that everyone should own their own home. This is where the government got involved to incentivize home ownership by only the (clumsy) government can… “Let’s commission the hell out of lending brokers to give every warm body a loan to go buy a home!”The double-whammy of teaser rate resets … and the resulting big monthly payment hikes which sunk a lot of homeowners …After 2009, the Federal Reserve got involved to “bailout” these big banks that commissioned the heck out of their minions to give these loans to unqualified people (sub-prime loans).It seems unfair that the banks get relief from realizing their losses on their financial statements but the government knows that property values are the collateral for all those mortgages. And when values drop, borrowers are underwater on their mortgages and will start to strategically default and just go into bankruptcy and start over again (unlike student loans). The government was like “crap we don’t want that to happen”.Basically, the banks were like a little puppy crapping all over the floor and the government realizes that the banks were incompetent to go outside and help themselves so they went to Petco and bought the puppy some potty-pads so they could salvage the day.This was not cheap and the government needed to pay for it but in a super-spy way. You can google the term Quantitative Easing (QE) as a fancy way of saying that the Government printed a lot of fake money to bail out banks and make sure the stock market did not collapse.Here is how…They just go into a lot of debt with today’s money, say $1 dollar. And just inflate the heck out of the money supply and payback that $1 IOU with $5 dollars that they created.In the meantime to pay back some of the QE and to get some dry powder in case of a market cycle downturn (normal 8-12 intervals) the government is employing Quantitative Tightening.About 2012, Warren Buffett … “I’d buy up ‘a couple hundred thousand’ single-family homes if I could.”Me personally this was about the time I had started looking outside of my local area and started picking up turnkey rentals remotely.I think too many people idol Warren Buffet as a stock guru but in reality, he is buying businesses with good management in place. As an investor that’s what you are doing by buying a rental granted its small potatoes but this whole thing is not a get rich quick scheme. It’s a proven way to get rich slowly where mitigating your risks with insider trading is allowed. This why joining masterminds and getting an edge is so important but hey if you want to learn by making costly mistakes on the way that’s cool too… that’s what I did. After all my ego at the time told me that I was an engineer and I did not need to get help from anyone after all I had all the YouTube Videos, podcasts, and blog articles out there at my disposalWhat is appealing about rental real estate is that you are actually creating value.Too many kids these days just want to get rich by buying something low and selling high whether it is bitcoin, stocks, or selling products on Amazon.“True wealth comes to those who create value for others… Everything else is just a gimick that will not be sustainable in the long term because there is an endless supply of Cheap, Easy, Free people who just want to make a buck” – Lane KawaokaSingle-family property management requires you to provide good stable living conditions for customers.Breakdown of what happen in 2008The most high profile fallout from the Financial Crisis of 2008 was the bankruptcy of Lehman Brothers, the fourth largest investment bank in the U.S. at the time. Lehman Brothers had been around since 1850 and was assumed to be too big to fail – so we thought.Lehman’s financial meltdown was the direct result of its heavy involvement in subprime mortgages or loans out to people who were “subprime” or non qualified borrowers.This is what generally kicking off the Global Financial Crisis.The movie “The Big Short” actually does a good job as explaining it. But they had to get Selena Gomez to get us to pay attention…The public equity markets are based on public securities (stock, derivatives and hybrid securities). Equity derivatives including futures, options, and warrants facilitate hedging transactions. Hybrid equity securities include convertible bonds and bonds with equity warrants.Besides the various classes of equity, derivatives, and hybrids directly issued by Lehman that became worthless, the effects on the general public equities market were far-reaching.Lehman’s failure shook Wall Street to its core and the Dow plummeted 504 points, the equivalent of 1,300 points today in 2019. Some $700 billion vanished from retirement plans and other investment funds. Credit markets dried up, affecting cash-strapped companies like G.M. who couldn’t even get short-term funding.In 2009, General Motors and the Chrysler Corporation declared bankruptcy. In March of that year, the Dow Jones plummeted to its lowest level of 6,594, a decline of more than 50 percent since 2007, and the unemployment rate hit 10 percent. Retirement accounts tied to financial markets fell sharply.Lehman is not the only recent high-profile bankruptcy. Before Lehman, there were Enron and Worldcom. What the stockholders received in those cases was the same thing Lehman stockholders received – nothing – not even an apology from the CEOs and CFOs that ran those businesses into the ground. Those guys went prison. But more importantly a lot of people who put faith in insituational investments lost big time when they were looking for “security.”Mutual Funds must be the answer?Mutual funds, which are professionally managed investment funds including open-end funds (e.g., ETFs), unit investment trusts, and closed-end funds, pool money from many investors to purchase securities and are therefore directly tied to the public equity markets. 401(k)s and public pension funds heavily invested in public equities mirrored the downward spiral of the public markets.Many people generally accept the fact that this kinda of debacle can happen to individual companies but one way to protect against that is to diversify amongst dozens and hundreds of companies in a Mutual Fund.If you hold mutual funds invested in a failed company, the value of the mutual fund will undoubtedly plummet. That is why in the case of 401(k)s and pension funds invested in mutual funds that were in turn invested in failed companies like Lehman, Enron, and Worldcom, employees took a steep hit to their retirement._Stop…. Everything below this line…._…Is only to preserve wealth…. meaning unless you already have $1 million dollars in the bank it is not for you. Sorry its like playing a conservative game when you are down by 14 touchdowns in the fourth quarter.AnnuitiesDespite being touted by the insurance industry as a secure investment, annuities are not immune from economic meltdowns. Variable annuities are tied to market indexes, and during the Great Recession, these annuities were pummeled by the markets. Even fixed annuities, which offer guaranteed rates of return are only as good as the insurance company issuing them. The guaranteed returns are worthless if there is no insurance company around to pay them.If not for a government bailout just weeks after the Lehman bankruptcy, AIG, one of the nation’s largest insurers, would have certainly followed in Lehman’s footsteps. In the worst case scenario, you would receive nothing if the insurance company behind the annuity went bankrupt.Certificates of DepositSimilar to savings accounts, CD’s are insured “money in the bank,” and thus virtually risk-free up, but only up to the maximum FDIC insured amount of $250,000. Like annuities and commercial paper, CDs are only as good as the bank offering them.Did you know Lehman Brothers operated Lehman Bank that offered CDs? With the collapse of Lehman, any CDs over $100,000 (the FDIC limit at the time) were paid pennies on the dollar in bankruptcy. Today, in the worst case scenario, if a bank failed, the most you would recoup is the $250,000 insured amount.Money Market AccountsMoney market accounts offered by banks for interest-earning savings accounts are often used as safe havens during a recession. Money market accounts have a high rate of interest with a higher minimum balance ranging from $1,000 to $25,000. Like CDs, money market accounts are FDIC-insured and are generally considered safe investments up to the FDIC-insured limit. In the worst case scenario, you would be able to recoup $250,000, the FDIC insured amount.Money Market FundsUnlike money market accounts, money market funds are not FDIC insured. A money market fund is a kind of mutual fund which invests only in highly liquid cash and cash equivalent securities that have high credit ratings. Also called a money market mutual fund, these funds invest primarily in debt-based securities which have a short-term maturity of less than 13 months, and offer high liquidity with a very low level of risk.Although they sound relatively safe, money market funds are not immune to crisis. A money market fund aims to maintain a net asset value (NAV) of $1 per share. Any excess earnings that get generated by way of interest received on the portfolio holdings are distributed to the investors in the form of dividend payments.Occasionally, a money market fund may fall below the $1 NAV, a condition which is described by the term “breaking the buck.” The situation occurs when the investment income of a money market fund fails to exceed its operating expenses or investment losses (if any).In the history of the money market, dating back to 1971, less than a handful of funds broke the buck until the 2008 financial crisis. In 2008 however, the day after Lehman Brothers filed for bankruptcy, one money market fund, the $62 billion Reserve Primary Fund, fell to 97 cents after writing off the debt it owned that was issued by Lehman. This created the potential for a bank run in money markets as there was fear that more funds would break the buck.If not for government intervention, the financial pressures from the Great Recession would have caused a run on the financial markets. There is no guarantee that absent government intervention, a run will be prevented in the future, causing money market funds to lose value. Because money market funds are not insured, in the worst case scenario, you could lose all your money.Savings AccountsFDIC-insured, savings accounts are considered one of the safest investment options to consumers. In the case of a bank failure, in the worst case scenario, like CDs and money market accounts, you would recoup the FDIC-insured amount of $250,000.An investor can get an idea of their level of protection from future financial meltdowns by comparing the type of financial instruments they’re invested in and how these instruments fared in the last financial crisis.Public equities and the various institutions invested in public equities like 401(k)s and pension plans are the most exposed and offer the least amount of protection in a meltdown. In the worst scenario, you can lose everything.At the other end of the spectrum of protection are government debt instruments like treasuries that are considered the safest form of investment backed by the full faith and credit of the United States government. In the unlikely scenario that the government goes bankrupt, your government treasuries are safe.Next to government treasuries are FDIC-insured bank products, which offer a fair amount of security but not 100% security as these instruments are insured only up to $250,000. In the worst-case scenario, you lose everything but $250,000.Then there’s everything else in between including commercial bonds, annuities and money market funds. The bottom line is without the backing of the full faith and credit of the federal government or government-backed insurance, every other financial product has full exposure, and you risk losing everything in the worst case scenario.To prepare for the next financial meltdown, look no further than the most recent disaster.InflationAcademically we have been taught that inflation is a measure of the incremental increase in the “cost of things” and a “cost of living” framework. Or a dollar today can buy a lot less 30 years ago. In the end everything sort of remains relative. For example a home today costs $500,000 and a home in our grandparents time might have costed $50,000. Might sound unfair but we forget that our salary today might be $100,000 and grandpa’s annual salary as he rode 10 mile per gallon car was $10,000.Inflation is a bit of a political controversy. Politicians and monetary policymakers (Federal reserve bank) feel public backlash when inflation is too high but small inflation (under 5% a year) can typically be pawned off as a conscience and therefore politicians can keep their jobs. In other words, inflation is not a key performance indicator to most American like unemployment or taxes are, party because the concept is confusing. But inflation is an insidious way of decaying wealth and taking value away from citizens as opposed to taxing people (most obvious).Shouldn’t I buy my home to live in?First off never take financial advice from someone who is not on their way to financial freedom! This includes many of our family and close friend who may seem like they are doing well but could be another victim of American consumerism.Join the movement of high-income earners who are renters cause they did the math and did what made sense. Numbers don’t lie.Learn more about renting in primary markets here.General thoughts of having balanceOne thing I have always preached is “Live where you want and invest where the number make sense.” So you live in a cool place like Hawaii, California, Seattle, or New York and you worked hard to get to where you are now. Well good for you!Keeping Up With The JonesesWe are the average of the five people we are in proximity (or media we unconsciously consume).Its very typical that our spending habits mimic that of our their neighbors. If your peer group have their kids in private school, you’re probably going to put your kids in private school. If your friends like to go on fancy vacation you will likely too. Look at the cars we drive in comparison to those around us. [This is one of the reasons I chose to move to Hawaii where most people drive Toyotas as opposed to where I lived in Seattle where everyone was talking about their freaking Tesla]. A constant story we tell ourselves as parents is to spare no expense when it comes to our kids… so we send them to music lessons, play on a traveling sports team, or have a cell phone when all their friends are doing it. Look I get it you want to give them every advantage possible but nothing great came out of lack of hardship.I used to do an exercise where every 6-12 months I would brainstorm what I would need to be next level happy from a materialistic point of view. Many of these things – no judgment on myself was what kinds of cars I would have, not having a commute to work, or having that next cool computer. The takeaway after writing this stuff down over the years was that this perverbial bar aways went higher and higher. The lesson learned is to take all this money talk in moderation. You need to build some wealth and financial security. You also never know when you’re going to die or be able to take that vacation not in a wheelchair or confined to the hotel tourist trap bar. It’s okay to spend money on stuff you want but you need to make conscious decisions and live as best you can with the consequences.Why real estate is the answerWhy is it that real estate is a large part of the wealthy’s portfolio?Real estate (not particularly your primary residence) is I.D.E.A.L.I Stands for IncomeThe property produces income after it pays for expenses. This is called Cashflow and it is what puts food on the table. This is a concept that most investors and regular people never understand… because most invest for appreciation or capital gain which is sort of like gambling. Forget terms of “compounding interest,” “investment fees,” “risk” and “interest rate.” Cash flow is the focus of most everything you work for in your plan – its the endgame that retirees live by and you start with the end in mind – not building a pile of money like traditional wealth building – build streams of income today. Without cash flow nothing happens.Rule 1 of investing is don’t lost money and don’t invest for appreciation (but its nice when it happens)!D Stands for DepreciationProperty depreciation can shelter the property income that is distributed to investors. The government engineers certain interests through the tax code, in order to encourage us to put our money in particular spaces. By creating ways to write off a portion of their investment cost through depreciation, they encourage people to invest in real estate. House flippers don’t understand this as they make big sums of money (taking large amounts of risk in the process) but pay taxes at the highest rate.E Stands for Equity GrowthEquity comes from the fact that a portion of your mortgage is being paid down by a tenant or someone using the property. How nice of them. You can download a mortgage calculator to know exactly how much money are are making in equity growth based on the amortization schedule by signing up for the Hui Deal Pipeline Club.A Stands for AppreciationHere is the investing for appreciation/capital gain part of the equation. One myth that people don’t realize is that Appreciation is concerned with keeping the value at or above the rate of inflation, and can come from two sources: a natural increase in property value over time (market appreciation), or value-added activities (forced appreciation) such as remodeling, expanding or improving the property in some way. Here at Simple Passive Cashflow - Simple Passive Cashflow appreciation is the icing on to of the cake and we focus on cashflow cause that is what we can control. We also don’t see our primary residence as an investment since it barely keeps up with inflation.L Stands for LeverageLeverage is available via funds from institutions and raise capital from investors. Positive leverage is when the after tax unleveraged yield of the property exceeds the aftertax cost of funds. Taking on more debt is seen by most as irresponsible, almost a sin. But most (of those people) are broke. The truth is that debt is a tool.For a dive into the numbers go here.

Seriously, who in the hell would even need to ask this after everything that has happened. Yeah, Uh, just a little bit:1) In April 2009, antiwar activists who helped elect Obama accused him of using the same “off the books” funding as his predecessor George W. Bush when Obama requested an additional $83.4 billion from Congress for the wars in Iraq and Afghanistan – a provision which Obama had voted against when he was a Senator.2) In May 2010, it was reported that the Obama administration had selected KBR, a former subsidiary of Halliburton, for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, just hours after the Justice Department had said it would pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work.3) While running for President, Obama had promised that he would not have any lobbyists working in his administration. However, by February 2010, he had more than 40 lobbyists working in his administration.4) Although Obama claims to support the Occupy Wall St. movement, the truth is that he has raised more money from Wall St. than any other candidate during the last 20 years.5) Under President Obama, abuse of prisoners at Guantanamo Bay became even worse than it had been under President Bush.6) In June 2011, U.S. Congressman Dennis Kucinich (D-Ohio) said that Obama had violated the Constitution when he launched military operations in Libya without Congressional approval.7) While Senator, Obama voted for the $700 billion TARP bank bailout bill.8) The ACLU accused Obama of violating the U.S. Constitution by having a U.S. citizen killed without judicial process. U.S. Congressman Ron Paul (R-TX) said that Obama’s actions might be an impeachable offense.9) In 2011, after Boeing had hired 1,000 new employees to work at its new factory in South Carolina, the Obama administration ordered Boeing to shut down the factory, because the factory was non-union.10) Obama fired the CEO of General Motors, and had the government take 60.8% ownership of the company.11) During the Chrysler bankruptcy, Obama violated the Fifth Amendment and more than 150 years of bankruptcy law by illegally treating secured creditors worse than unsecured creditors.12) The Obama administration pressured Ford Motor Company to stop airing a TV ad that criticized Obama’s bailouts of General Motors and Chrysler.13) In 2010, Obama supported releasing Lockerbie bomber Abdel Baset al-Megrahi (who had been convicted of murdering 270 people) from prison.14) In May 2009, the Obama administration dismissed charges that had been filed by the Bush administration against members of the New Black Panther Party who had been videotaped intimidating voters and brandishing a police-style baton at a Philadelphia polling station during the November 2008 election. In August 2009, the U.S. Commission on Civil Rights demanded that the Justice Department explain why it dismissed the charges. In July 2010, J. Christian Adams, a former lawyer for the Justice Department, testified before the Commission on Civil Rights that the case was dropped because the Justice Department did not want to protect the civil rights of white people.15) In Operation Fast and Furious, the Obama administration ordered gun storeowners to illegally sell thousands of guns to criminals.16) In June 2009, Obama fired Inspector General Gerald Walpin, after Walpin accused Sacramento mayor Kevin Johnson, an Obama supporter, of misuse of AmeriCorps funding to pay for school-board political activities. In a letter to Congress, the White House said that Walpin was fired because he was “confused, disoriented, unable to answer questions and exhibited other behavior that led the Board to question his capacity to serve.” A bipartisan group of 145 current and former public officials, attorneys, and legal scholars signed a letter that was sent to the White House, which defended Walpin, said the criticisms of him were not true, and said that his firing was politically motivated. The letter can be read here. Fox News host Glenn Beck gave Walpin an on-air state certified senility test, which Walpin passed with a perfect score, meaning that he was not senile.17) In February 2009, U.S. Senator Robert Byrd (D-West Virginia) expressed concern that Obama’s dozens of czars might violate the U.S. Constitution, because they were not approved by the U.S. Senate. U.S. Senator Russ Feingold (D-Wisconsin) expressed a similar concern in September 2009.18) Although Obama stated, “I have always believed that the Second Amendment protects the right of individuals to bear arms,” the National Rifle Association gave Obama a rating of ‘F’ based on his voting record.19) In March 2007, Obama said of his health care plan, “I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be, potentially, some transition process…”20) In September 2010, some insurance companies announced that in response to Obama’s health care plan, they would end the issuance of new child-only policies.21) In October 2010, Obama gave McDonald’s and 29 other organizations an exemption from some of the requirements of his health care plan. Over time, more than 1,300 organizations were granted waivers.22) In November 2010, 1199SEIU United Healthcare Workers East announced that it would drop health insurance for the children of more than 30,000 low-wage home attendants. Mitra Behroozi, executive director of benefit and pension funds for 1199SEIU stated, “… new federal health-care reform legislation requires plans with dependent coverage to expand that coverage up to age 26… meeting this new requirement would be financially impossible.”23) In March 2011, the New York Times reported that many health insurers had stopped issuing child-only policies in response to Obama’s health care reform.24) In May 2008, Obama campaign spokesperson Ben LaBolt said that Obama would end DEA raids on medical marijuana in states where it’s legal. However, in February 2010, DEA agents raided a medical marijuana grower in Highlands Ranch in Colorado, a state where medical marijuana is legal. Also in February 2010, DEA agents raided a medical marijuana dispensary in Culver City in California, a state where medical marijuana is legal. Furthermore, in July 2010, the DEA raided at least four medical marijuana growers in San Diego, California. Also in July 2010, the DEA raided a medical marijuana facility in Covelo, California. Then in September 2010, the DEA conducted raids on at least five medical marijuana dispensaries in Las Vegas, Nevada, where medical marijuana is legal. In 2011, the DEA conducted raids on medical marijuana in Seattle, Washington, West Hollywood, California, and Helena, Montana, all places where it is legal. In April 2012, the DEA carried out several raids on medical marijuana in Oakland, California. In February 2012, Rolling Stone magazine wrote that Obama’s war against medical marijuana went “far beyond anything undertaken by George W. Bush.” In May 2012, U.S. Congressperson Nancy Pelosi (D-California) said she had “strong concerns” about Obama’s forced closure of five medical marijuana facilities in Pelosi’s congressional district. Commenting on Obama’s crackdown on medical marijuana, U.S. Congressman Barney Frank (D-Massachusetts) said, “I’m very disappointed… They look more like the Bush administration than the Clinton administration.”25) In September 2010, it was reported that Obama planned to offer Saudi Arabia the biggest arms deal in the history of the U.S.26) In September 2009, Obama’s green czar Van Jones resigned after it was reported that he was a self described “communist” and had blamed George W. Bush for the September 11 attacks.27) The Obama administration gave $535 million to Solyndra, claiming that it would create 4,000 new jobs. However, instead of creating those 4,000 new jobs, the company went bankrupt. It was later revealed that the company’s shareholders and executives had made substantial donations to Obama’s campaign, and that the company had also spent a large sum of money on lobbying.28) Obama nominated Timothy Geithner, a repeat tax cheater, to head the government agency that enforces the tax laws.29) On September 12, 2008, Obama promised, “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” However, less than three months into his Presidency, he broke that promise when he raised the cigarette tax. Studies show that poor people are more likely to smoke than rich people.30) Although Obama said that he wanted to simplify the tax code, his proposals would actually add thousands of pages to the tax code.31) In December 2010, Transparency International reported that corruption was increasing faster in the U.S. than anywhere else except Cuba, Dominica, and Burkina Faso.32) In June 2010, the New York Times reported that Obama administration officials had held hundreds of meetings with lobbyists at coffee houses near the White House, in order to avoid the disclosure requirements for White House visitors, and that these meetings “reveal a disconnect between the Obama administration’s public rhetoric — with Mr. Obama himself frequently thrashing big industries’ ‘battalions’ of lobbyists as enemies of reform — and the administration’s continuing, private dealings with them.”33) In July 2009, White House reporter Helen Thomas criticized the Obama administration for its lack of transparency.34) Although Obama had promised to wait five days before signing all non-emergency bills, he broke that promise at least 10 times during his first three months in office.35) Obama signed a stimulus bill that spent money on bonuses for AIG executives. Prior to signing this bill, Obama had said, “when I’m president, I will go line by line to make sure that we are not spending money unwisely.” However, after reading “line by line” and signing the stimulus bill that protected the AIG bonuses, Obama pretended to be shocked and outraged at the bonuses, and said, “Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses at all, much less $165 million in extra pay… How do they justify this outrage to the taxpayers who are keeping the company afloat?” and also said that he would “pursue every single legal avenue to block these bonuses.”36) Although Obama had promised that the website http://recovery.gov would list all stimulus spending in detail, a 400 page report issued by the Government Accountability Office stated that only 25% of the projects listed on the website provided clear and complete information regarding their cost, schedule, purpose, location and status.37) Although Obama said, “We need to uphold the ideal of public education,” he expressed his true opinion of America’s public education system by sending his own children to private schools while living in Chicago and Washington D.C.38) In November 2011, Obama announced that he would send 2,500 Marines to Australia.39) Obama expanded the federal government’s faith based programs which had been started by President George W. Bush.40) Obama had armed federal agents raid the Gibson guitar factory, order the employees to leave, and seize guitars and other property from the factory – and all of this happened without any charges being filed.41) In October 2011, Obama hired Broderick Johnson, a longtime Wall Street lobbyist, to be his new senior campaign adviser. Johnson had worked as a lobbyist for JP Morgan Chase, Bank of America, Fannie Mae, Comcast, Microsoft, and the oil industry.42) During the 2008 campaign, Obama broke his promise to accept public financing and the spending limits that came with it.43) In June 2011, Obama asked a Jewish singing group to remove its video from the internet.44) In May 2011, Obama signed a renewal of the Patriot Act.45) After the BP oil spill, Obama rejected offers of cleanup help from Canada, Croatia, France, Germany, Ireland, Mexico, the Netherlands, Norway, Romania, South Korea, Spain, Sweden, the United Kingdom, and the United Nations.46) On September 22, 2008, Obama said, “I am not a Democrat who believes that we can or should defend every government program just because it’s there… We will fire government managers who aren’t getting results, we will cut funding for programs that are wasting your money and we will use technology and lessons from the private sector to improve efficiency across every level of government… The only way we can do all this without leaving our children with an even larger debt is if Washington starts taking responsibility for every dime that it spends.” However, Citizens Against Government Waste gave Obama a 2007 rating of only 10%, and a lifetime rating of only 18%.47) In September 2009, it was reported that Kevin Jennings, Obama’s Assistant Deputy Secretary for the Office of Safe and Drug-Free Schools, had written about Jennings’ own past frequent illegal drug use in his 2007 autobiography.48) In January 2012, it was reported that 36 Obama aides owed a combined total of $833,000 in back taxes.49) Obama sued Citibank to force it to give mortgages to people who could not afford to pay them back.50) The national debt increased more during Obama’s first three years and two months than it did during all eight years of George W. Bush’s presidency.51) In February 2012, Obama shut down an Amish farm for selling unpasteurized milk across state lines, even though the customers were happy with what they were buying.52) After Obama approved $2.1 billion in loan guarantees for Solar Trust of America so it could build solar power plants, the company filed for bankruptcy.53) In 2010, Obama gave $16.3 million to First Solar, a company that manufactures solar panels, so the company could sell solar panels to itself.54) Although Obama had promised to have “the most sweeping ethics reform in history,” and had often criticized the role of money in politics, the truth is that after he was elected, he gave administration jobs to more than half of his 47 biggest fundraisers.55) In January 2012, Obama violated the Constitution by making four recess appointments when Congress was not in recess. Recess appointments themselves are constitutional, but only if they are made when Congress is actually in recess.56) Obama sent U.S. troops to Uganda, Congo, South Sudan and the Central African Republic.57) In March 2012, when Obama was talking to Russian President Dmitri Medvedev and did not know that the microphone was turned on, Obama stated, “On all these issues, but particularly missile defense, this, this can be solved but it’s important for him to give me space… This is my last election. After my election I have more flexibility.”58) In December 2011, Obama agreed to sell nearly $30 billion of military fighter jets to Saudi Arabia.59) While Obama was a state Senator in Illinois, he used tax dollars to build 504 units of slum housing, which had mice and backed up sewage. Federal inspectors graded the condition of the housing so bad that the buildings faced demolition.60) The Obama administration spent $1.6 million to restore graffiti that glorified communist murderers Che Guevara and Fidel Castro.61) Obama approved putting 7 million pounds of “pink slime” into school lunches – a substance that McDonald’s and other fast food restaurants have banned.62) Concerned Women for America accused Obama of hypocrisy after Obama criticized Rush Limbaugh for using crude and vulgar language to describe Sandra Fluke, but Obama did not criticize Bill Maher (who had donated one million dollars to an Obama PAC) for using the same kind of crude and vulgar language to describe Sarah Palin.63) U.S. Supreme Court Justice Antonin Scalia said that being forced to read Obama’s 2,700 page health care reform law would would violate the Eighth Amendment’s prohibition against cruel and unusual punishment.64) In March 2012, the Congressional Budget Office said that over the next decade, Obama’s health care reform would cost twice as much as what Obama had promised.65) Despite having taught constitutional law at one of the most prestigious law schools in the country, in April 2012 Obama falsely claimed that the U.S. Supreme Court had never overturned any laws that had been passed by Congress.66) In March 2012, Obama announced a new set of bailouts for speculators who had caused the housing bubble.67) In early 2012, Obama held a fundraiser where Wall St. investment bankers and hedge fund managers each paid $35,800 to attend.68) In December 2011, ACLU executive director Anthony D. Romero criticized Obama for signing a bill that gave the U.S. government the power to indefinitely detain U.S. citizens without any charges being filed or any trial taking place.69) In January 2012, the U.S. Supreme Court ruled against the Obama administration for having put a GPS tracking device on someone’s car without having a warrant.70) As part of his economic stimulus, Obama spent $205,075 of taxpayer money to relocate and care for a single specimen of Arctostaphylos franciscana, a shrubbery which nurseries sell for $16.71) Obama’s administration funded a study to see whether or not rats’ enjoyment of the music of Miles Davis was increased when the rats were high on cocaine.72) Obama spokesman Jay Carney criticized the Los Angeles Times for publishing photographs of U.S. soldiers posing with corpses in Afghanistan.73) Obama came out in favor of the FCC’s fining of the CBS TV network $550,000 for showing Janet Jackson’s breast during the 2004 Super Bowl.74) In April 2012, the New York Times reported, “Although Mr. Obama has made a point of not accepting contributions from registered lobbyists, a review of campaign donations and White House visitor logs shows that special interests have had little trouble making themselves heard. Many of the president’s biggest donors, while not lobbyists, took lobbyists with them to the White House…”75) In April 2012, the Obama administration proposed new regulations which would prohibit farm children under 18 from working at grain elevators, silos, feed lots, stockyards, and livestock auctions, as well as from storing, marketing and transporting farm product raw materials. Critics claimed that this would prevent children from the common practice of working on their friends’ and relatives’ farms, and that farm children did not need “help” from a community organizer in Washington.76) In April 2012, Obama nominated Timothy Broas, who had “bundled” more than $500,000 for Obama’s 2012 campaign, to be U.S. ambassador to the Netherlands.77) Although Obama had promised to prosecute Wall St. criminals, as of May 2012, the Obama administration had not filed any criminal charges against any of the top financial executives.78) In 2012, the Obama administration accused Pepsico of “race discrimination” because it used criminal background checks to screen out job applicants.79) The Obama administration accused fire and police departments in Jacksonville, Florida, New York City, and Dayton, Ohio of “racial discrimination” because they required potential firefighters and police officers to take a written test. Ten real examples of these “racist” questions from the New York test can be read here.