You Don’t Have a Savings Account You Have a Dwindling Account

You Don’t Have a Savings Account You Have a Dwindling Account

Notes From The Field By Simon Black    June 25, 2020  Bahia Beach, Puerto Rico

On April 5, 1933 everyone’s favorite fascist, President Franklin D. Roosevelt, signed an executive order which outlawed the private ownership of gold.  To justify the seizure, FDR used wartime authorities under the “Trading with the Enemy Act of 1917”. The law was never repealed after World War One, so Roosevelt used it to declare a national banking emergency.

Roosevelt’s order demanded that all Americans must surrender their gold to a Federal Reserve Bank by May 1, 1933, less than a month after he signed the executive order. Gold was a popular form of savings at the time; US dollars were convertible to gold, and many Americans, from wealthy business owners to rural farmers, owned gold as a form of savings.

So Roosevelt’s order affected a LOT of people. 

Anyone who failed to comply faced up to ten years in prison, and a $10,000 fine-- which was a huge sum at the time equivalent to several times a typical annual salary. And the government actually prosecuted people who refused to turn over their gold.

One man, Louis Ruffino, was convicted of hoarding gold and went to prison. He also had his 78 ounces of gold confiscated by the government, without compensation. In today’s money, that would be over $135,000.

For people who did comply with the order, the government paid them $20.67 for every ounce of gold that was turned in.

But then, shortly after the deadline, Roosevelt raised the price of gold to $35, essentially stealing nearly half of the wealth of those former gold owners.

It wasn’t until the 1970s that gold ownership was once again legal.

But before that happened, in 1971 Nixon entirely divorced the dollar from the gold standard.

Throughout the next decade the US (and much of the world) was hit by terrible stagflation-- a period of high unemployment, high inflation, higher taxes, higher debt levels, and pitiful economic growth.

When adjusted for inflation, the Dow Jones Industrial Average lost nearly HALF of its value during the 1970s.

And government bonds paid just 5.5%, at a time when inflation peaked at 10%. This means that anyone who owned bonds in the 1970s was LOSING more than 4% per year.

It was the same with bank accounts; depositors who held their savings in a bank account LOST money every year after adjusting for inflation.

Economists call this condition “negative real interest rates,” meaning that, after adjusting for inflation, the rate of interest is actually negative.

If your bank pays you 1% interest, but the inflation rate is 3%, this means that the purchasing power of your savings is actually losing 2% per year, i.e. the “real rate” is NEGATIVE 2%.

Coincidentally, this is the same situation we find ourselves in today.

For most of the last decade, in fact, REAL interest rates in the Land of the Free have been negative.

Wells Fargo, for example, offers a “Way2Save” savings account that pays a big fat 0.1% interest.

And it’s important to bear in mind that interest from your bank account is TAXABLE in the Land of the Free. So after accounting for taxes, you’re looking at around 0.08% interest.

The annual rate of inflation for 2019 was 2.3%. So this means that a depositor with a Wells Fargo savings account is LOSING 1.5% per year.

When you’re guaranteed to lose money, you don’t have a savings account. You have a dwindling account.

But GOLD is one of several assets that tends to perform very well when real interest rates are negative.

Gold has a 5,000 year history of maintaining its value; and back in the 1970s when real rates were negative, investors who bought gold made more than 10x their money over the course of the decade.

(And silver actually outperformed gold, rising from less than $2 in 1970 to more than $30 at the end of 1979.)

Gold and silver have been very attractive investments lately; in fact, gold just hit a 7-year high.

That’s not surprising given that the US national debt has increased by more than $1.2 TRILLION dollars just since the beginning of May.

And the Federal Reserve has expanded its balance sheet by nearly $3 trillion since the start of the pandemic.

These are insane figures that point to a deteriorating value for the currency… which is reason enough to own gold.

Personally, I keep some of my own precious metals on hand in a strong home safe-- so there is no counterparty risk. I have it when I need it.

But as FDR’s confiscation shows, it also makes sense to consider holding some precious metals overseas in a safe jurisdiction.

It isn’t 1933 anymore. It’s perfectly legal (for now) to own gold. And it makes a lot of sense.

If you’re new to this and looking for a great resource on getting started, I’d encourage you to download our free Ultimate Gold and Silver Guide.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/you-dont-have-a-savings-account-you-have-a-dwindling-account-28016/ 

What If?

What If?

Richard Quinn    June 10, 2020

IT SEEMS THE WORST of this economic crisis may have passed, though the health risks will be with us for some time. What have we learned? For many people, long-discussed financial risks became all too real in 2020.

There are two words that should always be part of our thinking: what if. Those two words aren’t always associated with bad things. What if I win the lottery? I have a plan for that, which varies depending on how much I win and whether it triggers estate taxes. The chance of that plan being needed is, of course, nil.

Most “what ifs” relate to family, money and our future security. Could anything—short of a world war—have done more than today’s pandemic to heighten those concerns? And yet I suspect the current crisis will soon be a dull memory and most Americans will be back to their old financial ways. But for those who want to be prepared for the next crisis, here are eight “what ifs” to ponder:

1. You die unexpectedly. Do you have adequate life insurance? If you own a small business, what will happen upon your death? Are your beneficiary designations up to date? Does your surviving spouse know where to turn for income?

Do you have an updated will? Have you prepared final instructions, so your family knows what to do and where important papers are located?

2. You suffer a prolonged illness. Do you have an idea of the income you could expect from employer or government benefits? Do you carry long-term disability insurance? For working people, disability is a greater risk than death.

3. You lose your job or your pay gets cut. Sure, we’ve been told about having a three-month emergency fund forever—and, for just as long, most people have ignored the advice. Has the current crisis been a wakeup call? There’s some evidence Americans are saving more. But will this last or is it just that these days it’s harder to spend money on nonessentials?

 To continue reading, please go to the original article here:

https://humbledollar.com/2020/06/what-if/

The 50 Biggest Money Mistakes Household CEOs Make

The 50 Biggest Money Mistakes Household CEOs Make

By Len Penzo

As this penny illustrates, even the United States Mint occasionally makes money mistakes.

I’m not ashamed to admit I make mistakes. After all, everybody screws up occasionally; for us humans, mistakes come with the territory.

For example, I remember the time I decided it would be great fun to play Wii golf for eight consecutive hours. Unfortunately for me, my middle-aged left shoulder vehemently disagreed — after the fact, of course — and so I spent the next week popping acetaminophen tablets like they were M&Ms. I know.

It can be even more costly when we make mistakes managing our personal finances; I know I still make them from time to time.

Here are 50 of the biggest financial faux pas household CEOs make. How many of these apply to you?

1. Being impatient. People of modest means should understand two important facts: 1) we cant have it all at once; and 2) saving money takes time — sometimes lots of it.

2. Failing to read contracts before signing on the dotted line.

3. Using payday loans to cover temporary financial shortfalls.

4. Giving your kids everything they desire. It’s hard to get a feel for the value of a dollar when you grow up never wanting for anything.

5. Signing your tax returns without reviewing them — even when they’re done by a tax professional.

6. Buying a new car and selling it after only a few years. Buying new cars is costly because they can lose upwards of half their value by the time they are three years old.

7. Not doing your research before purchasing extended warranties.

8. Going into debt to purchase things that will decrease in value.

9. Maintaining memberships with monthly payments even though you no longer take advantage of them.

 To continue reading, please go to the original article here:

https://lenpenzo.com/blog/id13789-the-50-biggest-money-mistakes-household-ceos-make-2.html

38 Secrets for Financial Success: My Personal Finance Manifesto

38 Secrets for Financial Success: My Personal Finance Manifesto

By Len Penzo

Awhile back, somebody asked me to summarize my personal finance “playbook” in a blog post. Well … Here it is:

Debt is a form of indentured servitude where people agree to sacrifice a portion of their future earnings in exchange for instant gratification.

ATM machines are the Achilles’ heel of impulsive spenders.

History tells us that all fiat money eventually returns to its intrinsic value: zero. The US dollar is fiat money.

Given a choice, it’s always better to live your life anonymously rich, rather than deceptively poor.

If you have to ask your boss for a raise, then you need to find a new employer.

When in doubt, always choose credit over debit.

It’s almost impossible to effectively manage your personal finances if you don’t track your income and outgo.

Only suckers play the lottery.

People who properly manage their finances don’t fear credit cards. In fact, they embrace them.

Credit card “convenience” checks are anything but.

Frugality has its limits. The most effective way to stretch your income is by finding ways to earn more money.

Treat your household like a business; actively manage your finances and continuously look for ways to maximize your income.

Not everyone requires a budget to effectively manage their personal finances.

When it comes to saving money, patience is a virtue.

Nobody should pursue a non-technical college degree until they’ve calculated their projected payoff point and return on investment.

Precious metals such as gold and silver are for insuring wealth; not investing.

Money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom.

Only fools and the financially naive believe that everyone who drives an expensive luxury car is financially well-off.

Only fools and the financially naive believe that everyone who drives a beater is broke.

To continue reading, please go to the original article here: 

https://lenpenzo.com/blog/id25399-38-secrets-for-success-my-personal-finance-manifesto-2.html

What to Do When Money Causes Friend Drama

What to Do When Money Causes Friend Drama

By Rachel Miller; illustrated by Daniel Zender   Jan 15 2020,

When a pal keeps suggesting restaurants you can't afford or making snide comments about your salary, it's time to say something.

Hard to Say is a column about delicate situations and difficult conversations, for people who wish they could hire a ghostwriter for all their texts.

Knowing you have to have a money conversation with someone is stressful. Even fairly straightforward situations can lead to endless procrastination followed by an hour of strategizing with a close friend before you finally text your roommate… “Hey, could I get the rent check from you later today?”

But the anxiety makes sense: a person’s finances can be deeply intertwined with their ego, identity, beliefs, and sense of self-worth. And because talking about money often means communicating a desire or a need, it can leave us feeling very vulnerable.

But when a friend keeps suggesting pricey activities you can’t afford, or constantly makes snide comments about your salary, avoiding the topic is only going to make things worse in the long run. Learning how to deftly handle these situations is good for your financial health, and the long-term health of your friendships.

Remember you can never really know what’s going on with someone else’s bank account.

When going into these conversations, it’s a good idea to avoid making assumptions about other people’s finances. Even if you know what a friend’s salary is, or can infer certain things based on, say, their lifestyle or past comments, none of us really know what’s going on with someone else’s bank account.

People have staggering debt, medical bills, bad credit, trust funds, credit card points, job perks, alimony agreements, parents who support them, parents who they are supporting, as well as personal desires and values that influence what they want (or don’t want) to spend their money on. And because money is so tied up in self-image and can be a big source of shame, a lot of people simply… don’t ever mention any of this stuff to their friends.

We all know, intellectually, that most people are fairly private about their finances, and that everyone’s definitions of “broke” and “worth it” and “reasonable price for a bridesmaid dress” are going to be different… but it’s easy to forget that when we want certain stories to be true, or when everything would be easier if others’ perspectives were aligned with our own.

If you’re frustrated with how a friend is acting with regard to money, it can be helpful to remember this, and to try to approach the situation from a place of genuine curiosity and generosity.

Make money talk a natural part of everyday conversations.

 To continue reading, please go to the original article here:

https://www.vice.com/en_us/article/5dmg3k/talking-about-money-with-friends

What Your Relationship with Money Reveals About You

What Your Relationship with Money Reveals About You

...and Why Romantic Partners Often Fight Over Finances

By   Seth J. Gillihan Ph.D.  Think, Act, Be    

 Money is a complicated topic. Most of us tend to feel uncomfortable talking about it, and might even prefer to reveal aspects of our sex lives than to divulge our income.

 Even if we spend countless hours thinking of ways to make more money, we may not give much thought to how we relate to money. But when you pay attention to your relationship with money, you can gain some important insights into yourself.

​ Your Mindset

 Do you feel like there’s never enough money, and always too many expenses? Does it pain you to spend money? You may have a scarcity mindset, as described by Steven Covey in his bestselling book The Seven Habits of Highly Effective People. With this mindset, you see money and other resources as zero-sum games—with more for others meaning less for you and vice versa.

With a scarcity mindset, you might feel bad whether the money is coming in or going out. Paying money to others feels bad because you see it as less money for you, and receiving money can lead to guilt about “taking money from others.”

 I noticed my scarcity mindset a few years ago when my income temporarily went up. I was looking forward to putting the extra money toward savings and doing something fun with our family—and then we had a whopping Emergency Room bill and a flood in our basement. I felt bitter disappointment that all of the money went toward covering these bills.

“We’re so afraid if we give something, we lose something,” said "Zen Millionaire" Ken Honda, author of Happy Money, whom I recently interviewed on the Think Act Be podcast. But in reality, spending and receiving money are part of a cycle.

“If you spend $100, it goes into somebody’s hand, who will spend the $100 somewhere else, and in the end that $100 comes back to you,” he said. “That’s how the economy goes.”

“If you find yourself out of the cycle,” he continued, “that means you’re not living. Life is found in this cycle.” Embracing that cycle of giving and receiving is the abundance mentality.

 In my own example, I caught my thinking and was able to shift my perspective. Rather than feeling cheated out of money that I thought I would have, I realized I had been given exactly as much money as I needed to pay for unexpected bills. It was all part of a well-functioning system.

 2. Your Past

 To continue reading, please go to the original article here:

https://www.psychologytoday.com/us/blog/think-act-be/201907/what-your-relationship-money-reveals-about-you

13 Personality Traits That Lead to Money Success

13 Personality Traits That Lead to Money Success

Personality. We all have one, some more than others. Personality is defined as “the combination of characteristics or qualities that form an individual’s distinctive character.”

There is only one of you. It is the unique combination of traits that make the individual who they are, and the facets that make up our personalities play a significant role in our lives.

In fact, your personality traits will likely significantly impact the outcomes of your life, either helping or hindering your ability to succeed in various areas.

One big area impacted by personality characteristics is money and personal finance, where you may find that some of your personality traits are more desirable than others.

Tawnya here, and I’m one of those lucky enough to possess several personality traits conducive to good money management. What this means is that the makeup of my personality is such that it’s easier for me to make good decisions when it comes to money.

This doesn’t mean that it will be impossible for you to be good with money if you don’t possess all of the traits I’m about to discuss, just that it may be more difficult for you if don’t have at least some of these traits. Even if you don’t see yourself reflected in these traits, there’s a light at the end of the article (so keep reading!). Personality plays a big role in your money management, and you’re about to find out why.

Here are 13 personality traits that lead to money success.  

Saver

This one is probably pretty obvious, but one personality trait that is especially conducive to good money management is whether you’re a saver or a spender.  Like all the traits we’ll be discussing, being a saver or a spender is a combination of natural-born tendencies and environmental factors.

I’m a saver, and although I grew up in a household comprised of spenders (environment), my natural tendency has always been to save. I was also heavily influenced by my grandparents, who are savers.  Just as the name suggests, savers prefer to save money. Savers also fall on a continuum, from those who avoid spending money at all costs to those who generally save but who also won’t shy away from spending on things they feel are valuable.

To continue reading, please go to the original article here:

https://www.moneysavedmoneyearned.com/13-personality-traits-that-lead-to-money-success/

Before Spending Your Emergency Fund, Ask Yourself These Questions

Before Spending Your Emergency Fund, Ask Yourself These Questions

By Nicole Dow  Senior Writer

We get so used to thinking of our emergency fund as cash we shouldn’t touch. It can feel wrong to actually spend that money.

But the financial situation that’s cropped up as a result of the coronavirus pandemic makes now a perfectly legit time to tap into your reserves. Honestly.

Your individual circumstance, however, may leave you questioning whether it’s really okay to be spending your emergency fund. Maybe you have a spouse who is still working or enough money in the bank to stretch a few weeks longer.

Here are four questions to ask before spending your emergency cash.

Having nightmares about creating a budget? We've got your back! Get great tips delivered straight to your inbox.

1. Is This Expense a Need?

This is a pretty obvious question but one that’s vital to consider. When you use your emergency fund to replace lost income, you can’t spend like you used to.

Ask yourself: Is this expense necessary for my survival? If not, it’s not worth draining your rainy day fund for.

That may mean pausing your cable service or taking a break from tithing so you can eat, stay healthy and keep a roof over your head.

2. Are There Resources to Help With This Expense?

 To continue reading, please go to the original article here:

https://www.thepennyhoarder.com/budgeting/spending-emergency-fund/?aff_sub2=homepage&rc=rc-trending-4&aff_sub=rc-trending-4

8 Things You Should Never Do With Your Money, According to Experts

8 Things You Should Never Do With Your Money, According to Experts

By The Penny Hoarder Staff

One way or another, we all make mistakes. It’s the human condition.

But right now, in the midst of a pandemic, one thing you don’t want to make mistakes with is with your money. Sure, we’ve all let bad financial habits creep up on us. But in these uncertain times, it’s more important than ever to make sure you’re not your own bank account’s worst enemy.

Here are seven mistakes people are making with their money during the pandemic, and what you can do instead.

1. Don’t Waste Hundreds on Homeowners Insurance

You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy. This isn’t something you actively think about — you just know you’re required to have it.

The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying.

Policygenius has policies starting at just $25/month. And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.

Just answer a few questions about your home to get started.

2. Don’t Skip Out on $1M in Life Insurance

Have you thought about how your family would manage without your income after you’re gone? How will they pay the bills? Send the kids through school?

Now’s a good time to start planning for the future by looking into a term life insurance policy.

You’re probably thinking: I don’t have the time or money for that. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $8 a month. The peace of mind of knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

To continue reading, please go to the original article here:

https://www.thepennyhoarder.com/save-money/never-do-this-with-money/?aff_id=5&aff_sub2=pandemic-mistakes&aff_sub3=pandemic_mistakes&aff_unique1=GiDojNuPZ_pLrAyk9MHH1W0Qihiqd8AZNCGiYVeoWGF-5iD9lE8&utm_source=taboola&utm_medium=paidnative&rc=rc-trending-2&aff_sub=rc-trending-2

10 Quick Steps That’ll Have You Managing Your Money Like A Millionaire

10 Quick Steps That’ll Have You Managing Your Money Like A Millionaire

By The Penny Hoarder Staff

Life would be a whole lot easier if someone would just Venmo us $1 million, but unfortunately the chance of that happening is, well, probably zero. (Venmo doesn’t allow transactions that large anyway.)

But even though our chances of becoming a millionaire are slim, we can still manage our money like one. No, we’re not going to tell you how to buy hundreds of shares of Apple stock. Or how to pick out the perfect yacht. These are simple money moves any normal, non-millionaire person can make today. Each tip can get you closer to achieving your big goals.

Take a look:

1. Grow Your Money 11x Faster — Without Risking Any of it

You’ve probably heard the best way to grow your money is to stick it in the stock market and leave it there for, well, ever.

But maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe, but millionaires know better.

Here's their secret: a debit card called Aspiration lets you earn up to 5% cash back every time you swipe the card  and up to 11 times the average interest on the money in your account. Plus, you’ll never pay a monthly account-maintenance fee. 

To see how much you could earn, enter your email address here, link your bank account and add at least $10 to your account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

2. Leave Your Family up to $1M

Oh, to be a millionaire. Look, not all of us have the money to set up trust funds for our loved ones. But you could still leave them up to a $1 million in life insurance — and you don’t even need to have the money in the bank. ou’re probably thinking: I don’t have the time or money for that. But this take minutes — and you could leave your family up to $1 million with a company called Bestow.

We hear people are paying as little as $8 a month. (But every year you wait, this gets more expensive.) 

It takes just minutes to get a free quote and see how much life insurance you can leave your loved ones — even if you don’t have seven figures in your bank account.

To continue reading, please go to the original article here:

https://www.thepennyhoarder.com/budgeting/money-management-in-10-steps/?aff_sub2=homepage&rc=on-b1-3-132488&aff_sub=rc-on-b1-3-132488

“I’m Drowning. There’s No Way I Can Get Better at Money. What Do I Do?”

“I’m Drowning. There’s No Way I Can Get Better at Money. What Do I Do?”

The Three Year Experiment Financial and location freedom for families. In 3 years or less.

A lot of what I write is directed towards people who have been managing their money for a long time. But in case you stumbled on this blog and you feel like you’re one bill away from bankruptcy, I thought I’d write a post for you.

Let’s say that money scares you. You don’t look at you credit card bills, you don’t know what your credit score is, you haven’t even thought about retirement. That’s a long time away. But you know that something has to change. You know you’ve got a lot of debt, and spending feels scary, and it never feels like you have anything approaching control around your money.

There is ONE thing you need to do. One thing only. I’m not going to tell you what that is, yet. First, I want you to figure something out.

Step 1

When is the first time in your day when you sit in front of a computer or phone?

Do you get up early in the morning like me and go upstairs to your desk and start checking your email?

Do you get up, throw some clothes on, grab a protein bar, then start scrolling through your phone on the train (or you did, before Covid)?

Do you feed the kids, get them off to school, drive yourself to work, then sit down at your desk and open your work laptop (again, before Covid)?

Figure out when that is. Then, make a decision to take five minutes tomorrow, when you first get in front of your devise, to open Notes, or Google Sheets, or your email browser, and write some numbers down.

Don’t panic!!! Let me finish.

Step 2

Ok, I want you to go find some paper. Right now. Ideally, if you have it, one of those little spiral-bound notebooks like detectives use. But don’t get hung up on that. You should NOT buy anything for this exercise. Do. not. buy. paper. If you don’t have a little notebook, get a Sticky Note pad, or some recycled paper which you’ve torn into squares, or even said Notes app on your phone. if you’re digital.

Cool? So step two is finding something to write on.

 To continue reading, please go to the original article here:

https://www.thethreeyearexperiment.com/drowning/