Automotive Reviews and Skeptical Journalism

When we hear the words ‘automotive reviews’ we think of comparative tests, investigations, technical details, advantages and disadvantages of a particular car model. People are most interested in automotive reviews when they are about to purchase a vehicle. This is an important decision for the potential buyer since the car may remain in his/her possession for many years. Actually, statistics say that the purchase of a car is the second largest expense for many people. In developing countries, the situation is even worse than that, as choosing a certain car is sometimes a life commitment for those people. Under these circumstances, automotive reviews are a must. No automobile is to be purchased without having consulted its review.Automotive reviews are useful for all kinds of customers, from those are simply interested in buying a cheap car with good gas mileage to those who are mostly interested in design and comfort. To all these people the purchase of a car may appear as a very challenging experience, since the auto market is vast and the lack of experience can prove to be a serious drawback. Needless to say all those interested in purchasing a car should follow the latest automotive news in order to keep up with what is new in this vast and complicated area. However, automotive reviews cannot be found on television every day, nor do they appear in newspapers. Moreover, specialized media, such as auto magazines, which are issued weekly or monthly, may not give the automotive reviews you need when you need them. Therefore, a good source of accurate and reliable automotive reviews is the Internet. Automotive blogs are full of information with and about cars and many related topics. In addition, you get more than statistics or official figures, because people like you have posted their comments or facts from personal experience on those car blogs. Sometimes this beats all automotive reviews.As we have stated before, there are many sources of automotive news and reviews. The problem is that some of them may not be as reliable as we think and this can be damaging to the consumer. There are times when the interests of certain companies stand in the way of giving consumers honest advice. A good share of criticism is not a must have for automotive reviews. However, skeptical journalism is proof that the consumer’ s best interest is at the top of the priority list. Auto magazines present a lot of automotive reviews because that’s their line of work, but they will rarely point out possible flaws of automobiles.Everyone will agree that in the auto magazines or TV shows, the automotive reviews sound a little too good to be true. You can check out the latest automotive news in magazines and on TV shows, but as far as the reviews are concerned, you should only trust what you see with your own eyes. This may turn out to be a little difficult at times, but fortunately we live in the technology era, and seeing it for yourself is now possible on the internet. If a car reviewer speaks of some less appealing features of a certain automobile, there’s the chance of actually seeing them by means of multimedia. Criticism equals bad publicity, so when it comes to magazines or television shows, there’s a good chance that the consumer will be deprived of his right to be honestly and correctly informed. Therefore, the internet remains the most reliable source of both automotive news and automotive reviews.

Colleges and Education: Are Students Really Being Educated?

My associates in the financial service industry acknowledge that college graduates from United States universities are generally unprepared for entry-level professional positions. They have particularly noticed a drop in basic skills. Students who were once hired from accredited second-tier universities can no longer be relied upon to meet even minimal standards in many professional entry-level positions. (Note: I refer to top-tier as only one to two dozen colleges across the nation. These are Ivies and several select colleges such as MIT and Johns Hopkins.)A business executive may hire a graduate from what he believes is a top-performing business school that also boasts a nationally ranked football team into a marketing or customer service assignment. (Colleges that sport nationally ranked teams are characteristic of second-tier schools.) He must spend valuable time coaching and monitoring the new employee as the graduate lacks the most basic core skills. But executives today just do not have the time to do this in a time-stressed high-pressured corporate environment.Managers are shocked by poor writing and language skills of recent graduates.The situation is far worse than you might imagine. The results of my interviews with business people in many corporations conclude that students cannot function effectively in their chosen fields of study. Also, they often are severely deficient in written language and reasoning skills required to make incisive judgments and decisions. The standards have sunk so low that many students from second-tier universities cannot write a paragraph without making a major spelling or grammatical mistake.Yet the universities continue to accept the students in far greater numbers than in past decades, and offer little effective remedial help for students in need. And what is most distressing is that, as a result of grade inflation, almost every student can graduate from an accredited college today while receiving little or no help from their universities to rectify severe learning problems.Professors have little experience in their field and have no incentive to teach effectively.Full-time professors have their PhD but little real-life experience in their field of study. Consequently, at the end of four years, students have little acquired knowledge and cannot think critically in their chosen career field. Professors, especially those who have tenure and are almost impossible to relieve, show little concern with their own job performance and have relatively little incentive to instruct to high standards.It’s a fact!You don’t have to take my word alone for any of this. In one of the few honest and broad-based surveys of businesses conducted by an academic association, the Association of American Colleges and Universities in January of 2007 disclosed that two-thirds of the employers surveyed said that college graduates lack the skills to succeed in today’s economic environment. In fact, more than 70 percent said colleges just weren’t doing the job of emphasizing critical and analytical reasoning as well as creativity and innovation. These are just the things that colleges hang their hats on when trumpeting the value of a college education. Think of how really bad this is.If the education is so bad, who can we hire?So what can an executive do? She will hire only from top-tier schools that recruit their incoming freshmen from the very top of their high school classes. If her field is highly specialized, she may even go outside the country and recruit students from Asia, India or Argentina (hotbeds of Information Technology) where professors have experience in their fields. The students from these schools will have the knowledge, the tenacity, and, hopefully, the appetite to get the job done professionally.With few job prospects, most graduates are coming out of college with nothing to show for their four years. They don’t even receive an education.

Captive Insurance Company – Reduce Taxes and Build Wealth

For business owners paying taxes in the United States, captive insurance companies reduce taxes, build wealth and improve insurance protection. A captive insurance company (CIC) is similar in many ways to any other insurance company. It is referred to as “captive” because it generally provides insurance to one or more related operating businesses. With captive insurance, premiums paid by a business are retained in the same “economic family”, instead of being paid to an outsider.Two key tax benefits enable a structure containing a CIC to build wealth efficiently: (1) insurance premiums paid by a business to the CIC are tax deductible; and (2) under IRC § 831(b), the CIC receives up to $1.2 million of premium payments annually income-tax-free. In other words, a business owner can shift taxable income out of an operating business into the low-tax captive insurer. An 831(b) CIC pays taxes only on income from its investments. The “dividends received deduction” under IRC § 243 provides additional tax efficiency for dividends received from its corporate stock investments.Starting about 60 years ago, the first captive insurance companies were formed by large corporations to provide insurance that was either too expensive or unavailable in the conventional insurance market.Over the years, a combination of US tax laws, court cases and IRS rulings has clearly defined the steps and procedures required for the establishment and operation of a CIC by one or more business owners or professionals.To qualify as an insurance company for tax purposes, a captive insurance company must satisfy “risk shifting” and “risk distribution” requirements. This is easily done through routine CIC planning. The insurance provided by a CIC must really be insurance, that is, a genuine risk of loss must be shifted from the premium-paying operating business to the CIC that insures the risk.In addition to tax benefits, principal advantages of a CIC include increased control and increased flexibility, which improve insurance protection and lower cost. With conventional insurance, an outside carrier typically dictates all aspects of a policy. Often, certain risks cannot be insured conventionally, or can only be insured at a prohibitive price. Conventional insurance rates are often volatile and unpredictable, and conventional insurers are prone to deny valid claims by exaggerating petty technicalities. Also, although business insurance premiums are generally deductible, once they are paid to a conventional outside insurer, they are gone forever.A captive insurance company efficiently insures risk in various ways, such as through customized insurance policies, favorable “wholesale” rates from reinsurers, and pooled risk. Captive companies are well suited for insuring risk that would otherwise be uninsurable. Most businesses have conventional “retail” insurance policies for obvious risks, but remain exposed and subject to damages and loss from numerous other risks (i.e., they “self insure” those risks). A captive company can write customized policies for a business’s peculiar insurance needs and negotiate directly with reinsurers. A CIC is particularly well-suited to issue business casualty policies, that is, policies that cover business losses claimed by a business and not involving third-party claimants. For example, a business might insure itself against losses incurred through business interruptions arising from weather, labor problems or computer failure.As noted above, an 831(b) CIC is exempt from taxes on up to $1.2 million of premium income annually. As a practical matter, a CIC makes economic sense when its annual receipt of premiums is about $300,000 or more. Also, a business’s total payments of insurance premiums should not exceed 10 percent of its annual revenues. A group of businesses or professionals having similar or homogeneous risks can form a multiple-parent captive (or group captive) insurance company and/or join a risk retention group (RRG) to pool resources and risks.A captive insurance company is a separate entity with its own identity, management, finances and capitalization requirements. It is organized as an insurance company, having procedures and personnel to administer insurance policies and claims. An initial feasibility study of a business, its finances and its risks determines if a CIC is appropriate for a particular economic family. An actuarial study identifies appropriate insurance policies, corresponding premium amounts and capitalization requirements. After selection of a suitable jurisdiction, application for an insurance license may proceed. Fortunately, competent service providers have developed “turnkey” solutions for conducting the initial evaluation, licensing, and ongoing management of captive insurance companies. The annual cost for such turnkey services is typically about $50,000 to $150,000, which is high but readily offset by reduced taxes and enhanced investment growth.A captive insurance company may be organized under the laws of one of several offshore jurisdictions or in a domestic jurisdiction (i.e., in one of 39 US states). Some captives, such as a risk retention group (RRG), must be licensed domestically. Generally, offshore jurisdictions are more accommodating than domestic insurance regulators. As a practical matter, most offshore CICs owned by a US taxpayer elect to be treated under IRC § 953(d) as a domestic company for federal taxation. An offshore CIC, however, avoids state income taxes. The costs of licensing and managing an offshore CIC are comparable to or less than doing so domestically. More importantly, an offshore company offers better asset protection opportunities than a domestic company. For example, an offshore irrevocable trust owning an offshore captive insurance company provides asset protection against creditors of the business, grantor and other beneficiaries while allowing the grantor to enjoy benefits of the trust.For US business owners paying substantial insurance premiums every year, a captive insurance company efficiently reduces taxes and builds wealth and can be easily integrated into asset protection and estate planning structures. Up to $1.2 million of taxable income can be shifted as deductible insurance premiums from an operating business to a low-tax CIC.Warning & Disclaimer: This is not legal or tax advice.Internal Revenue Service Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein.Copyright 2011 – Thomas Swenson