What They Didn't Tell You About Prop 14

Proposition 14 is being advertised as making the primary process more open by allowing voters of any party to vote for any candidate on the ballot.  I like the sound of that, BUT, it is the other things that they don't tell you about that have me concerned.

First:  Once the primary is over, the only people who will be on the ballot in the general election will be the two people who got the most votes in the primary, no one else.  That means that the smaller political groups will not be allowed to participate in the general election.  To me that seems wrong. 

Currently in the general election we are allowed to vote for anybody we want and we have the opportunity to choose between many different candidates.  If this passes, we only get to choose between two.

I know that for a candidate from a smaller party, such as the "Peace and Freedom" or "Green" parties, the chances of winning a general election may be small, but just having the candidate on the ballot means that I can vote for him or her if I want.  Not if Prop 14 passes.  Also, just having such a candidate on the ballot makes the other candidates address the issues they raise.

Second:  Under the new law, none of the candidates have to tell you what their party affiliation is.  How can you have a election and not know a candidate's party affiliation?  We could end up with two candidates on the ballot, both from the same party, and never know it until after the election is over.

This whole thing just doesn't seem right.

The Big Lie of California's Proposition 17

The commercials say that this proposition will give people the option of taking their "longevity discount" with them when they change auto insurance carriers. They tout this as something we cannot do right now. In reality the current law specifically allows this discount.

Here is the text of the current law about the discount: "...insureds are able to claim a discount for regular purchases of insurance from any carrier offering this discount irrespective of whether or not the insured has previously purchased from a given carrier...". That means you can get a discount for "persistency" from any auto insurance company that is willing to offer one, even if your "longevity" was with another company.

The wording in Prop 17 says essentially the same thing: "...an insurer may offer applicants or insureds an additional discount for a policy...based on the length of time the applicant or insured has been continuously insured for bodily injury liability coverage with one or more insurers, affiliated or not."

So what is the difference between what is now on the books and the new law?

It will actually be harder to qualify for any "longevity discount" under the new law. In other words, it will be easier for an insurance company to say that you DON'T qualify for the discount and charge you a higher rate. But then, considering the fact that proposition 17 is backed by a major auto insurance company, why am I not surprised?

Under the current law, you could let your policy lapse up to 90 days for any reason, (including not paying your premium), and still qualify for the discount.

Under Prop 17, if your policy lapses for non-payment of premium, FOR ANY LENGTH OF TIME, (even just one day), the insurance carrier can disallow the discount and charge you a higher rate.

Under the current law, if you serve in the armed forces outside of the state of California, you can come back to California and buy auto insurance within two years and still qualify for the discount.

Under Prop 17, if you serve in the armed forces, the only way you can qualify to get the discount when you get back is if you are deployed OUTSIDE THE US. That means our military personnel that serve even part of their time at a posting in the United States would NOT be allowed to have this discount when they return to California.

I don't know about you, but I don't think our members of the military should be penalized because they are required to serve their country.

The four ways to earn income

1. Trading time for money
2. Earn income when others work, (override)
3. Earn residual income, (sometimes called "passive" income)
4. Investment income, (your money makes money)

1. Trading time for money
There is nothing inherently wrong with getting your money this way.  The drawback is that there is a limit to how much time you can sell for money and therefore a limit to your income potential.  Another drawback with this method is that once you have sold your time, it is no longer available to use for yourself, your family, or any other activities.  And finally at some stage of our lives, we reach a point where we are no longer able to sell our time for money, (poor health for example).

2. Earn income when others work
This is the basic tenant of business, have a system that generates income, even when you are not directly involved.  If you are the owner of a restaurant that sells hamburgers, you personally don't have to be cooking the hamburger, running the cash register, etc for the money to come to you.  You hire others to do the work for you.  You put people into your system of making and selling hamburgers, and the system generates the income.

The simplest of businesses to start and run is a business that operates on the Broker/agent business model.  When agents provide services to the clients, you as the "broker" get a split, (portion), of the income generated.  To increase your income, you only need to increase the number of agents in your "brokerage".

3. Earn residual income, (work once and get paid again and again).
This is sometimes referred to as passive income.  People usually think of artist's royalties when I mention residual income, but in reality there are many other types of income that came from passive sources.  A common type is the management fees earned by Brokers on the assets they maintain under their management.  Although the percentages are usually small, the potential volume is essentially unlimited and so is the income potential.

4. Investment income, (your money is making money)
When your money is making money, you can eventually reach the point where you don't have to trade time for money. 

This fourth principle is not nearly so complex as many people think.  Now, if you need to manage a portfolio of several hundred thousand dollars or more, things may get a little more complex.  But, since 43% of American workers have less than $10,000 saved for retirement, (more than half of American workers have less than $25,000), simple, easy to understand and follow investment principles will make the difference between a lifetime of financial stress or confidence.

53% of Americans have not even tried to calculate what they will need for retirement.  That is both scary and sad, because it really is a simple thing to sit down with one of the 100,000 financial coaches who will, for free, put together a customized personal financial program for any person or family.

Having a clear, easy to follow, personal financial plan can allow anyone to have the opportunity to go from selling time for money, to having money flowing to you from multiple sources with little or no effort on your part.