NEW YORK (Reuters) – A higher U.S. minimum wage is providing a cushion to the economy when it is most needed, according to a report released on Thursday.

The Economic Policy Institute, a liberal think-tank based in Washington, said recent rises in the minimum wage have acted as a “stealth stimulus,” preventing the worst recession in generations from spiraling out of control.

The study found that the bottom-rung pay increases will boost spending by $4.9 billion.

Such findings counter conventional wisdom among economists, who tend to argue that mandated wage increases hurt businesses’ bottom line, putting a crimp on hiring.

On the contrary, say EPI analysts, who argued that further growth in low-end incomes would go a long way toward engendering an economic recovery.

“An increase in the minimum wage would not only benefit low-income working families, but it would also provide a boost to consumer spending and the broader economy,” said Kai Filion, an analyst at EPI.

In the first increase in over a decade, the minimum wage was raised to $5.85 two years ago after a tough battle in Congress.

The EPI study found the July 2007 minimum wage hike benefited over 700,000 families and added $1.7 billion in additional spending over the following year.

A July 2008 increase benefited over 1.3 million families and added $3.1 billion in additional spending over the following year, the EPI analysts added.

(Reporting by Pedro Nicolaci da Costa; Editing by Dan Grebler)

Billionaire Clusters

by Duncan Greenberg
provided by

Want to become a billionaire? Up your chances by dropping out of college, working at Goldman Sachs or joining Skull & Bones.

Are billionaires born or made? What are the common attributes among the uber-wealthy? Are there any true secrets of the self-made?

More from Forbes.com: • In Depth: Billionaire Clusters • The 2009 Billionaire List • The Next Billionaire Boom

We get these questions a lot, and decided it was time to go beyond the broad answers of smarts, ambition and luck by sorting through our database of wealthy individuals in search of bona fide trends. We analyzed everything from the billionaires’ parents’ professions to where they went to school, their track records in the early stages of their careers and other experiences that may have put them on the path to extreme wealth.

Our admittedly unscientific study of the 657 self-made billionaires we counted in February for our list of the World’s Billionaires yielded some interesting results.

First, a significant percentage of billionaires had parents with a high aptitude for math. The ability to crunch numbers is crucial to becoming a billionaire, and mathematical prowess is hereditary. Some of the most common professions among the parents of American billionaires (for whom we could find the information) were engineer, accountant and small-business owner.

Consistent with the rest of the population, more American billionaires were born in the fall than in any other season. However, relatively few billionaires were born in December, traditionally the month with the eighth highest birth rate. This anomaly holds true among billionaires in the U.S. and abroad.

More than 20% of the 292 of the self-made American billionaires on the most recent list of the World’s Billionaires have either never started or never completed college. This is especially true of those destined for careers as technology entrepreneurs: Bill Gates, Steve Jobs, Michael Dell, Larry Ellison, and Theodore Waitt.

Billionaires who derive their fortunes from finance make up one of the most highly educated sub-groups: More than 55% of them have graduate degrees. Nearly 90% of those with M.B.A.s obtained their master’s degree from one of three Ivy League schools: Harvard, Columbia or U. Penn’s Wharton School of Business.

Goldman Sachs has attracted a large share of hungry minds that went on to garner 10-figure fortunes. At least 11 current and recent billionaire financiers worked at Goldman early in their careers, including Edward Lampert, Daniel Och, Tom Steyer and Richard Perry.

Several billionaires suffered a bitter professional setback early in their careers that heightened their fear of failure. Pharmaceutical tycoon R.J. Kirk’s first venture was a flop–an experience he regrets but appreciates. “Failure early on is a necessary condition for success, though not a sufficient one,” he told Forbes in 2007.

According to a statement read by Phil Falcone during a congressional hearing in November, his botched buyout of a company in Newark in the early 1990s taught him “several valuable lessons that have had a profound impact upon my success as a hedge fund manager.”

Several current and former billionaires rounded out their Yale careers as members of Skull and Bones, the secret society portrayed with enigmatic relish by Hollywood in movies like The Skulls and W. Among those who were inducted: investor Edward Lampert, Blackstone co-founder Steven Schwarzman, and FedEx founder Frederick Smith.

Please visit Forbes.com to check out the  full list of billionaire clusters by clicking  here.

Forbes.com is the original owner of the content in this article.

Did you notice the additional couple of bucks in your pay check last week? Well as of April 1^st, 2009, 95% of hardworking Americans will start receiving benefits from the “Making Work Pay” tax break.  The Treasury Department has directed employers to reduce the amount of taxes withheld from people’s paychecks. Individuals will receive a $400 credit, and couples $800, over the course of the year. So expect to see a $13 per week increase in your take home pay.  That’s about an additional $65 a month for American Families. Enjoy your bailout funds…

As many as 52,000 American customers hid UBS accounts from the authorities in violation of tax laws, a US government lawsuit against the Swiss bank alleged on Thursday.

The Department of Justice filed a suit seeking to force UBS to disclose the holders of accounts with about $14.8bn in assets.

It alleged UBS, Switzerland’s biggest bank, engaged in cross-border securities transactions in the US that it knew violated security laws and helped US taxpayers set up dummy offshore companies.

UBS said it would challenge enforcement of the so-called John Doe summons, which seeks information on the accounts of thousands of US citizens at UBS in Switzerland, where such information is protected by financial privacy laws.

“UBS believes it has substantial defences to the enforcement of the John Doe summons and intends to vigorously contest the enforcement of the summons in the civil proceeding,” the bank said in a statement.

UBS shares fell more than 15 per cent on Friday to €10.81 as investors worried that US tax authorities were widening their investigation into the Swiss bank.

The suit came a day after UBS reached a landmark settlement with the US government in which the Swiss bank admitted having enabled clients to evade taxes, agreed to pay $780m in fines and turn over about 250 client names to the US.

The settlement provoked intensive questioning over the future of Switzerland’s famously-secretive banking industry as international pressure mounts for more transparency.

Hans-Rudolf Merz, the country’s president, said the UBS settlement would not compromise the confidentiality of the Swiss banking industry.

“Banking secrecy remains intact,” Mr Merz, also Switzerland’s finance minister, told a press conference in Bern.

He noted that banking secrecy “does not protect tax fraud” and can be lifted if clients are suspected of a crime that counts as a crime in Switzerland as well as abroad.

Switzerland’s banking system has thrived under 75-year-old rules defending confidentiality. While banks have benefited from Switzerland’s economic stability and political neutrality, they have had a significant competitive advantage in being able to protect customers from the prying eyes of hostile home governments, associates and tax authorities.

**To continue reading this article from FT.com, please click here

This article is Courtesy of  the HUFFINGTON POST- to read full article please click here

WASHINGTON — In a major victory for President Barack Obama, Democrats muscled a huge, $787 billion stimulus bill through Congress late Friday night in hopes of combating the worst economic crisis since the Great Depression. Republican opposition was nearly unanimous.

After lobbying energetically for the bill, Obama is expected to sign it within a few days, less than a month after taking office.

Supporters said the legislation would save or create 3.5 million jobs. House Majority Leader Steny Hoyer, D-Md., conceded there was no guarantee, but he said that “millions and millions and millions of people will be helped, as they have lost their jobs and can’t put food on the table of their families.”

Vigorously disagreeing, House Republican leader John Boehner of Ohio dumped a copy of the 1,071-page bill to the floor in a gesture of contempt. “The bill that was about jobs, jobs, jobs has turned into a bill that’s about spending, spending, spending,” he said.

The Senate approved the measure 60-38 with three GOP moderates providing crucial support _ the only members of their party to back it. Democratic Sen. Sherrod Brown of Ohio cast the decisive vote after flying aboard a government plane from Ohio, where he was mourning his mother’s death.

Hours earlier, the House vote was 246-183, with all Republicans opposed to the package of tax cuts and federal spending that Obama has made the centerpiece of his plan for economic recovery.

The legislation, among the costliest ever considered in Congress, provides billions of dollars to aid victims of the recession through unemployment benefits, food stamps, medical care, job retraining and more. Tens of billions are ticketed for the states to offset cuts they might otherwise have to make in aid to schools and local governments, and there is more than $48 billion for transportation projects such as road and bridge construction, mass transit and high-speed rail.

This article is Courtesy of  the HUFFINGTON POST- to read full article please click here

Think of the New York football Giants, stunning the then undefeated New England Patriots in the Super Bowl earlier this year. Or perhaps a typical 80-degree day in New York in not-so-typical January This is what they call Outliers.

Today, the best selling author Malcolm Gladwell released his third book, The Outliers. The term Outlier is “a scientific term to describe things or phenomena that lie outside the normal experience.”

Although I haven’t read the book yet, it’s a safe bet to say it will be entertaining to say the least, considering his first two books, The Tipping Point and Blink! were runaway best sellers.

But I’m looking for more than just best-selling-type entertainment.

I’m looking for how Bill Gates became a billionaire; how the Beatles became the greatest band this earth has ever seen; why Asians are utterly amazing work ethic.

I have been anticipating for months the release of Outliers. Not because I’m a Gladwell groupie, but because I am in search of an excessive amount of knowledge. And so I beg this question: can this book satisfy my cranial sweet tooth?

I encourage you to read this as well not because I think it’ll be good, but because I want you to ask yourself, “Am I an Outlier?” From the countless reviews that I have already read about it, he somehow downplays success, and emphasizes that we have little control over it. This further sides with the raging schism between free will versus pre-determination.

I suppose that I’m not an Outlier. I feel as though I’m fairly successful, since I have accomplished a moderate amount in my time and work harder than most – but I also believe in controlling your destiny and not in luck – I believe more in being prepared for an opportunity. However, I do feel I have been given “lucky” breaks and some would say I have “skated” my way though life. Maybe my perception of the book will be completely different once I get into the book. Or I could be completely wrong; I’m just going to have to stop posting and start reading…

The tables have turned.

For the past couple of decades, the markets have been dominated by institutional investors who devoured bargains so fast and in such bulk that individual investors were usually left, at best, with a few scraps.

But pension funds, hedge funds, mutual funds and other institutions are under siege as their portfolios implode and investors redeem their shares, forcing the fund managers to raise cash.

Advantage Goes to the Individual Investor

3:36

Personal Finance columnist Jason Zweig explains why individuals have a big advantage over institutional investors in the market right now. (Nov. 14)

Virtually every investment that carries any risk is on sale. Stocks and bonds, at home and abroad, have had their prices slashed by up to 45% this year. Yet at the very moment when bargains abound, many of the giants who normally would buy can do nothing but sell.

Welcome to a buyer’s market without buyers.

This is a huge change for the little guys. Rob Arnott, who oversees $35 billion at Research Affiliates LLC in Newport Beach, Calif., puts it this way: “The question that hardly anyone ever thinks about is: Who’s on the other side of my trade, and why are they willing to be losers if I’m going to be a winner?” Ever since the 1970s, the person on the other side of your trade has almost always been someone who manages billions of dollars and has millions of dollars to spend on gathering more information than most individuals ever could. Now, however, as Mr. Arnott says, “You can — and probably do — have a counterparty on the other side of your trade who absolutely has to sell, perhaps at any price.”

You would be very wise to give these distressed sellers a little bit of your cash, which they overvalue, in exchange for some of the stocks and bonds that they are undervaluing. Sooner rather than later, institutions will no longer need to beg for cash, they will regain the upper hand over individuals, and the tables will turn again.

While blue-chip stocks are still cheap, as I’ve said many times lately, there are some areas where the liquidity drought borders on desperation.

Heath Hinegardner

Corporate bonds. A year ago, corporate bonds outyielded Treasurys by 1.6 percentage points; now, the spread is more than five. Top-quality corporate debt is yielding 7% and up. Consider cheap, well-run funds like Harbor Bond, Loomis Sayles Bond or . Convertible bonds are yielding 12% and more; here, the easiest choice is Vanguard Convertible Securities.

Municipal bonds. The tax-free securities issued by state and local governments have gotten so cheap that in many cases you would have to earn 7% or 8% before tax to match their yield. Vanguard, T. Rowe Price and Fidelity offer a wide range of muni funds at low cost.

Emerging markets. Stocks and bonds in the developing world have been decimated. Emerging-market stocks have fallen nearly 60% in 2008. The bonds have dropped about 20%, producing the highest yields in about a decade. For stocks, Vanguard Emerging Markets ETF is a good choice; T. Rowe Price Emerging Markets Bond fund is a solid way to play the debt.

TIPS. Larry Swedroe of Buckingham Asset Management in St. Louis recently bought 8-year Treasury Inflation-Protected Securities with a yield of 3.7%. “That is crazy,” he marvels, since the same day the 5-year TIPS yielded 2.6% and the 10-year yielded 2.7%. Such fat yields in excess of inflation on a risk-free investment are a rare opportunity. Put TIPS in a tax-free retirement account; learn more at www.treasurydirect.gov.

Closed-end funds. These neglected fund/stock hybrids are at their cheapest in years. Closed-ends often trade at a discount to the market value of their holdings. In many cases, you now can get $1 in assets for 85 cents. That augments the yield on funds that hold corporate or municipal bonds. A handy starting point for research is www.closed-endfunds.com. Be sure the fund is “unleveraged,” meaning that it does not borrow money, and avoid any fund with annual expenses over 1%.

Real estate. REITs, or real-estate investment trusts, have been gutted in the housing crisis, losing more than 40% so far this year after an 18% drop in 2007. Many REITs are now priced as if people and businesses will never again want roofs over their heads. The safest choice: a basket holding dozens of real-estate bundles, like Vanguard REIT Index fund.

Finally, if you have cash and courage, consider a vacation property or second home. Nearly two-thirds of the condominiums built in and around Myrtle Beach, S.C. during the boom remain unsold as of June, says the National Association of Home Builders. A similar supply glut has clogged markets in other getaways like Tampa, Fla., and San Diego. With due diligence, you could get both a high financial and a high psychic return.

(this article was originally written by Jason Zweig for the Wall Street Journal, Saturday November 15, 2008).

In an article by Lee Eisenberg titled Where Do You Stand On America’s Wealth Spectrum?, he lays out data that highlights the current annual income of American families. It is interesting to note that if you earn six figures, you are in the top 20%…

Annual income parking ramp

Source: Before-Tax Family Income, 2001 Federal Reserve Board Survey

The numbers are definately an eye opener as the author goes on to write:

“If you and yours are bringing in $40,000 a year, you’re doing better than half the households in America.”

As a single-income family (basically just me), I am doing pretty good for myself! But the article does go on to rank net worth.  You can easily have a higher net worth earning $40K a year than say a family making $200K a year.

So, how do you rank on the US wealth spectrum??