Is It Time to 'Invest'?

President Obama used the term “invest” countless times in his State of the Union speech to justify a series of costly infrastructure initiatives to incite what he described as a “Sputnik moment” that would allow America to be competitive with China and others.

His examples of supremacy over other nations were mostly not the result of government, but he persisted to say that massive spending was the solution.

Even the space program was one-upped by a very small private company that was able to build a rocket at a lower price and have it work better than  NASA’s. He continually praised Thomas Edison, Bill Gates, Mark Zuckerberg and other free-market capitalists while promoting a strategy counter to their innovation.

This strategy involves utilizing the government as the primary catalyst of economic development, which will lead to more spending and even higher taxes, not to mention an increase in the deficit and national debt that we cannot pay.

Inspired by Creativity

These were people who for the most part started businesses out of their homes and were inspired by their own God-given creativity. Not one example was one of a company that was run by corporate government insiders that collude in a global scheme to rip off taxpayers. Yet he continues to get people to envision a world where such a thing would work. He proceeded to say that he would work toward reducing the deficit, but the balance sheet that would result from his policies would do anything but.

If Obama was truly interested in “winning the future” (a term stolen from Newt Gingrich, by the way), he would talk more about the individual entrepreneurs and helping them by reducing government regulations and taxes. The infrastructure and “green jobs” funding he is supporting will more than likely only support politically connected companies and have no impact on the economy.

Obama disproved his point by failing to have one viable example of a government takeover boosting the economy. The best proof of government only giving to the well connected is a recent bill where the Department of Defense could prohibit a company from doing business with it while allowing it to waste time and money (it is very hard to do business with the government) on submitting bids by not even informing the company that is is banned! 

A Local Has His Thoughts

Obviously, it is not the time to invest when you are trillions of dollars in debt and need to keep borrowing to make interest payments. Furthermore, with money managers like our government has, who needs enemies? But what about for the common man with an IRA, 401(k) or 403(b)? Though the stock market is on an uptick, radio host, author and local financial adviser Randy Hammon of Laguna Niguel warns us to stop buying securities from investment advisers—or, as he jokingly calls them, “bookies”—and go with a strategy that will yield returns without risk.

Hammon’s ”safe money system,’ as he calls it, uses annuities and other investments to ensure a safe environment for average investors. Hammon urges you to understand how much of your money you can dispose of and how much you will need to live on for retirement. Almost all of the average individual’s retirement account is money he or she will need to live off of.

Don't Leave It Up to Your Broker

He argues that if the investor does not understand the nature of the business that he or she is buying stock in, why invest in it? He says the key is having complete control over your invested money and not simply leaving it to a broker. Hammon was a professional baseball player for 11 years, and he told me that based on his experience, 65 percent of people who get rich in sports lose their money in five years because they blindly trust their money to someone and risk it all. If you can risk money,  he advises you to do something you understand and personally control with the money, such as buying real estate that you can sell at will and make plenty of money off of.

However, if you cannot take a risk, you are still in luck. You can invest in an annuity and lose no principal when the market goes down, but if it goes up, you can earn as much as 6 percent to 8 percent per year, which is the true amount of growth you experience in the market.

Keep in mind that this is almost completely risk-free, as it is insured by an A+ rated insurance company. He also recommends that his clients keep about $2,000 in silver for emergency purposes if there is a collapse of the currency. Silver, he argues, has more growth potential than gold because its price has not followed the typical pattern of increasing at a rate proportional to gold.

Hammon is offering Patch readers his book, The Safe Money System, for free by visiting thesafemoneysystem.com. You can hear Hammon on KLAA 830 AM Sundays at 5 p.m.