Friday, May 22, 2009

No Golden Parachute for Tricky Ricky

I am not using this as a debate over "to bailout, or not to bailout", I just want to shed some light on the rumored 20 million dollar severance package that Rick Wagoner is reportedly getting.

That 20 million is not what it's cracked up to be. When the Obama administration asked Rick to step down there were numerous reports of a 20 million dollar severance payout. News stories such as this one from ABC, conitnued to spread the bad press about the auto industry. In reality the 20 million was not so real.....

From the Mariam Webster Online dictionary, the defintion of a "Golden Parachute" is: a generous severance agreement for a corporate executive in the event of a sudden dismissal (as because of a merger)

This is not what Mr. Wagoner got.
Dave Schmidt, an executive compensation analyst with James F. Reda and Associates, says that less than $1 million of Wagoner's total $20.2 million pension package appears to be guaranteed if GM goes bankrupt.

This is a true statement. 19.2 million of the reported 20.2 million is part of an annuity scheduled to pay out 4.5 million a year for five years. If GM goes bankrupt this money is unsecured and Rick would lose all of it. If he manages to get out the first 4.5 million to pay his bills, he would be forced to give it back! Damn!!!

Severance package is not looking so good now is it?

That leaves our man Rick with only $980,000.00. That sounds like a lot to you and I, but that's nothing for someone who has been earning a salary btween 1 and 2.2 million per year for the last 8 years. That's like you trying to retire on $80,000.00.

It gets worse: that $980,000 isn't payable in one lump sum. He has to withdraw that annually, payable in installments of $68,900. Good luck paying for the private jet on $70K per year.

I'm sure Rick will get another 7 figure job, but for now he can collect unmployment like the other 13% of Michigan, which happens to be about $380/ week........and you have to pay taxes on that.


Sunday, May 17, 2009

Love him or hate him...he's Trump

When working toward riches who better to learn from then the wealthy. This is why I read Donald Trump’s books. In the past I thought Trump was just a "kiss ass" because he's always complimenting those people he works with. Well, I stand corrected.

In his book, Think Big and Kick Ass (it was only $4.99 at Borders – Hard Cover), The Don tells it like it is. He talks candidly about his beefs... with high profile leaders of industry and his mind state when dealing with his issues. When he talks about Kicking Ass he's serious. There is a Chapter entitled REVENGE. He tells you that when somebody messes with you, you get them back in spades. As part of that Chapter, he details his feud with Rosie O’Donnell. I didn't realize how bad it had gotten so I pulled up a Youtube clip….it was bad.

Sunday, May 10, 2009

Fortune Magazine - In Bad Taste

As a blogger on financial issues and how they affect our lifestyles, I subscribe to several related publications. One of them happens to be Fortune. I think Fortune magazine did a great job back in their February issue with a feature article titled The New Jobless. It really began to put faces and names with the people being laid off and how drastically their lives have been impacted. They profiled young, old, white collar, blue collar, men and women, illustrating how no demographic is secure during times like this.

As we know things have gotten worse since February, so Fortune decides to do a follow up issue and give tips on getting a Job in a difficult economy in a piece entitled “How to Get a Job”. When the issue arrived, the cover looked a little light hearted which put me off just a little. Then as I began to read the article and look at the associated pictures I was terribly annoyed with the photos of people clowning around, making comical gestures. All I could think was, “This sh@#t ain’t funny”. I assume that....the Fortune editors were attempting to add a little comic relief to a stressful situation but sometime it’s not necessary. That’s like trying to tell a Knock, Knock joke at a funeral to lighten the mood. Sometime a funeral just needs to be a funeral.

While I thought I was being overly sensitive, at least one other reader agreed. Per a letter written to Fortune in the annual Fortune 500 issues:

Considering the graviy of the Great Recession and the painful toll of job losses, I was disappointed by the flippant tone of “How to Get a Job”. The staged photos and goofy props had all the subtlety and with of a Cialis ad….
-Edward Mackin
Willow Grove, Pa

I couldn’t have said it better myself.

Fortune, I still love you but sometimes even the ones we love Piss us Off.


Sunday, May 03, 2009

Recession Break: How much will it cost to run my Mansion

How about a much needed break from the recession talk?

I was going to write a post about saving and cost cutting but I’m sick and tired of that crap. We need a break to help us keep our dreams and goals in focus!

So, I was watching one of those Forbes celebrity shows and wondered “how much it would cost to own and maintain a mansion?”

Last October Portfolio-Nast profiled a man who moved into a $10 million dollar house (pictured above). Here is an example of some of his monthly expenses.

  • Rent: $13,000.00
  • Utilities: $2700.00
  • Water:$1000.00 (Things that he didn’t consider: the pool, the fountains, and the damn sprinklers that came on in the wee hours to keep the great lawn lush and green)
  • Cable: $800.00 (He had 10 TV’s!)

TOTAL: $17, 500.00 per month.

He described himself as “a man struggling to hold on to the illusion that he is upper middle class……like a character in a cartoon earthquake: He looks down and sees his feet being dragged ever farther apart by a quickly widening fissure. His legs stretch, then splay, and finally he plunges into the abyss.

Those cost don’t include food and that assumes that him and his wife maintain the entire property. We need to hire some help to….to.. help. There’s a lot of stuff to keep clean! How much will that cost? Putting my internet skills to use I found the following information sited from a magazine called Celebrity Staff 

Baby Mansion (>$100,000 / Year)
3,000 – 5,000 sq. ft.


-Two nannies ($750 per week)

-Weekend Nanny ($400 per week)

-Housekeeper / Cook ($750 per week)


-In laws ($Guilt-trip / week) 

-Old Jamican lady from the hood (“four hun’ed” – Translation $400.00 paid under the table) 

-Revised cost: $30k

MEDIUM ESTATES (<$650,000 / year)

5,000 to 10,000 sq ft.


-Nannies and Childcare $98,000 

-A Household Manager $95,000 

-An Executive Housekeeper $65,000

-Regular housekeepers, Personal assistant and chauffer and operational costs will take you to $650,000 annum.


-Give your boy $50,000 / year and tell him if he wants to keep his job get everything else done for another $50,000.  

-Give the Ol’ Jamican lady a raise and tell her to watch he kids full time. Give her full rights to whoop ass if needed. 

-Revised cost: $125k

LARGE ESTATE (<$1.5 Million Per Year)

(10,000 to 30,00 Square Feet)

-Estate Manager at the cost of $100,000 per year 
-3 house keepers 
-A laundress 
-Head Chef 
-5 Security personnel.
At this point, I got so much money I don’t really give a @#$%. 

OPRAH MONEY (More then $3 Million/ year) (<30,000>

-30 house keepers

-12 laundresses

-10 butlers

-20 full time security personnel

…And if you think about buying that boat: For yachts, the operating costs are about 10% of the purchase price. So a $24 million, 150-foot yacht will cost you about $2.5 million a year to run.

Ok back to the recession……..


Sources: Wall Street Journal Blog

Celeb Staff Magazine

Portfolio Nast

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