5 Ways To Cash In on Your Spare Change
.5 Ways To Cash In on Your Spare Change
Jennifer Taylor Fri, April 22, 2022
You’ve been collecting spare change for quite some time now, and your piggy bank is about to bust. The time has come to empty it, but first you want to decide how to put your savings to good use.
After spending months — or even years — collecting these coins, you want to do something meaningful with the money. Here are five ideas to consider as the best use for your spare change.
5 Ways To Cash In on Your Spare Change
Jennifer Taylor Fri, April 22, 2022
You’ve been collecting spare change for quite some time now, and your piggy bank is about to bust. The time has come to empty it, but first you want to decide how to put your savings to good use.
After spending months — or even years — collecting these coins, you want to do something meaningful with the money. Here are five ideas to consider as the best use for your spare change.
Save for Holiday Gifts
While the holidays might be the farthest thing from your mind right now, Holly Andrews, loans manager and managing director at KIS Finance, a financial brokerage firm based in the United Kingdom, suggested using your spare change to start saving for this expensive season.
“Putting away your spare change right from the start of the year means you have the maximum amount of time to save for the holidays, and you’ll probably be surprised at just how much this will add up to over 10 or 11 months,” she said. “It may not cover everything, but it will certainly give you a very big head start, and you won’t have to worry about how you’ll afford everything as the holidays get closer.”
Imagine not having to scramble to cover all those holiday expenses this year, because you’ve already planned ahead. Enjoy the feeling!
Add It to Your Debt Repayments
If you’re trying to pay off credit card balances, Andrews said anything you can contribute to the cause will be a great help.
“Keep adding your spare change to a jar and every time you reach $10 or $20 dollars, put it in your bank account and add it to your next credit card payment,” she said. “It might not seem like much at the time, but every dollar that you can add towards debt repayment will benefit you in the long-run.”
In no time at all, you might make a serious dent in your debt repayments.
Start an Emergency Fund
If you don’t already have an emergency fund, your spare change is a great starting point, said Alissa Krasner Maizes, financial planner and founder of the investment advising firm, Amplify My Wealth.
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/5-ways-cash-spare-change-180105626.html
How to Make Better Financial Decisions
.How to Make Better Financial Decisions
By Barbara O’Neill
A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:
Concurrently: Saving for two or more financial goals at the same time.
Sequentially: Saving for one financial goal at a time in a series of steps.
Each method has its pros and cons. Here's how to decide which method is best for you.
How to Make Better Financial Decisions
By Barbara O’Neill
A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:
Concurrently: Saving for two or more financial goals at the same time.
Sequentially: Saving for one financial goal at a time in a series of steps.
Each method has its pros and cons. Here's how to decide which method is best for you.
Sequential goal-setting
Pros
You can focus intensely on one goal at a time and feel a sense of completion when each goal is achieved. It's also simpler to set up and manage single-goal savings than plans for multiple goals. You only need to set up and manage one account.
Cons
Compound interest is not retroactive. If it takes up to a decade to get around to long-term savings goals (e.g., funding a retirement savings plan), that's time that interest is not earned.
Concurrent goal-setting
Pros
Compound interest is not delayed on savings for goals that come later in life. The earlier money is set aside, the longer it can grow. Based on the Rule of 72, you can double a sum of money in nine years with an 8 percent average return. The earliest years of savings toward long-term goals are the most powerful ones.
Cons
Funding multiple financial goals is more complex than single-tasking. Income needs to be earmarked separately for each goal and often placed in different accounts. In addition, it will probably take longer to complete any one goal because savings is being placed in multiple locations.
Research findings
To continue reading, please go to the original article here:
https://www.wisebread.com/how-to-make-better-financial-decisions?ref=relatedbox
Financial Gurus: Who Are They and What Can They Teach Us?
.Financial Gurus: Who Are They and What Can They Teach Us?
Wed, April 20, 2022, Top 10 Financial Gurus to Learn From
By Eric Whiteside Updated April 20, 2022 Reviewed By Thomas Brock
Learn more about investing by reviewing lessons from major financial advisors
History's most famous financial advisors are known for very different reasons. They include successful investors who share their knowledge with the masses, television celebrities who write books, and criminals who stole millions of dollars. Ten of the most famous financial advisors are discussed below.
Financial Gurus: Who Are They and What Can They Teach Us?
Wed, April 20, 2022, Top 10 Financial Gurus to Learn From
By Eric Whiteside Updated April 20, 2022 Reviewed By Thomas Brock
Learn more about investing by reviewing lessons from major financial advisors
History's most famous financial advisors are known for very different reasons. They include successful investors who share their knowledge with the masses, television celebrities who write books, and criminals who stole millions of dollars. Ten of the most famous financial advisors are discussed below.
KEY TAKEAWAYS
Famous financial advisors became household names for a variety of reasons.
Benjamin Graham and Warren Buffet are among the most common traditional financial advisors that relied heavily on value investing.
Several financial advisors such as Dave Ramsey and Robert Kiyosaki are most known for their print publications.
TV personals including Suze Orman and Ben Stein are recognizable financial advisors.
Charles Ponzi and Bernie Madoff made a name for themselves due to their financial crimes.
Benjamin Graham
Benjamin Graham is known as the father of value investing which involves identifying and buying undervalued stocks that have the potential to grow over time.1 To calculate a company's intrinsic value, his approach eschews trends and hot ideas and relies instead on diligent research, thorough financial analysis, and patience— standard concepts today, but revolutionary when he introduced it in the 1930s.
Graham’s disciples include many of the most successful investors of the last 70 years. His 1949 book The Intelligent Investor remains a must-read for all asset managers and stock traders, whatever their investment approach.2
Warren Buffett
Investor Warren Buffett, the "Oracle of Omaha," is one of Graham’s most famous followers. Buffett has openly attributed his remarkable track record to Graham's principles.2 The one rule of Graham's that Buffett does not always follow is to diversify: He often prefers to concentrate investments in companies.
3,641,613% Gain
Had you invested $1 in Berkshire Hathaway in 1964, your investment would have been worth $3,641,613 at the end of 2021.3
To continue reading, please go to the original article here:
How Financial Literacy Changes Once You’re Retired
.How Financial Literacy Changes Once You’re Retired
John Csiszar Wed, April 20, 2022
Financial literacy covers a wide range of topics, from budgeting and saving to investing and planning for retirement. Once you retire, however, financial literacy broadens to include scenarios that may not have been as relevant during your working life. For example, income typically drops in retirement, while expenses may remain the same or even rise, depending on the type of lifestyle you lead and the condition of your general health.
Financial Literacy Month is a great time for both seniors and those about to retire to review their planning and make sure they're prepared for the changes encountered in retirement. Here are seven topics that are important to understand if you want to avoid any financial landmines in retirement.
How Financial Literacy Changes Once You’re Retired
John Csiszar Wed, April 20, 2022
Financial literacy covers a wide range of topics, from budgeting and saving to investing and planning for retirement. Once you retire, however, financial literacy broadens to include scenarios that may not have been as relevant during your working life. For example, income typically drops in retirement, while expenses may remain the same or even rise, depending on the type of lifestyle you lead and the condition of your general health.
Financial Literacy Month is a great time for both seniors and those about to retire to review their planning and make sure they're prepared for the changes encountered in retirement. Here are seven topics that are important to understand if you want to avoid any financial landmines in retirement.
Social Security
From the time you start receiving your first paychecks, you've been paying into the Social Security system. But as you approach retirement, it's time to start planning your Social Security withdrawal strategy instead. Before you hit retirement, it pays to maximize your income in any way possible, as your Social Security payout is based in large part on how much you earn during your working career. You'll also want to sit with a tax or financial advisor and determine whether you should initiate your payments early, at full retirement age or as late as age 70.
Medicare
Medicare is a health insurance program for seniors, but it's a complicated system with various parts. To use it effectively, you'll have to become literate on how it works. In a nutshell, Medicare consists of two original parts, A and B, which cover hospital and medical expenses, respectively. Part B requires a monthly premium. You can also add Part D if you require prescription drug coverage.
Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare that is run by a private company. As the choices can get complicated, you'll likely need to speak to an expert to get financially literate when it comes to Medicare. Note that neither Original Medicare nor Medicare Advantage are likely to cover care outside of the United States.
Required Minimum Distributions
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/financial-literacy-changes-once-retired-130003742.html
5 Pieces Of Money Advice That No Longer Apply
.5 Pieces Of Money Advice That No Longer Apply (And Updated Advice)
Tue, April 19, 2022
The world has changed A LOT in the past two years, and money advice that worked in 1978 doesn't work today. So here are five pieces of advice I think we all need to say goodbye to, and what to do instead.
1. Old School Money Tip: Always share your money with a married partner.
Common financial advice says that splitting bank accounts, investments accounts, and every day spending 50/50 with your spouse is the only way to go. The thinking is that shared accounts provide greater transparency and that once you're officially married, you stop being separate financial entities and become one. You should be working together on all financial goals and joint finances allows that.
5 Pieces Of Money Advice That No Longer Apply (And Updated Advice)
Tue, April 19, 2022
The world has changed A LOT in the past two years, and money advice that worked in 1978 doesn't work today. So here are five pieces of advice I think we all need to say goodbye to, and what to do instead.
1. Old School Money Tip: Always share your money with a married partner.
Common financial advice says that splitting bank accounts, investments accounts, and every day spending 50/50 with your spouse is the only way to go. The thinking is that shared accounts provide greater transparency and that once you're officially married, you stop being separate financial entities and become one. You should be working together on all financial goals and joint finances allows that.
Why It's Time to Say Goodbye: A recent survey found that almost 70% of millennial women who responded had experienced some form of financial abuse.
2. Old School Money Tip: Always put 20% down on a house.
How many times have you had a parent or family member tell you that you *need* 20% down for a house? 20% is the amount that allows you to bypass PMI, aka private mortgage insurance, an additional fee that's tacked onto your monthly payment if you don't put 20% down. Here's the thing though: in this market, 20% is often north of six figures. A $600,000 house means 20% down is $120,000.
Why It's Time to Say Goodbye: Prices are rising so fast you get priced out trying to do that.
According to a recent study from Redfin, "5,897 homes in 50 of the biggest US metropolitan areas by population have sold this year for at least $100,000 above their listed price, more than double a year ago." And while the Federal Reserve interest rate increase should help slow the demand for housing, the lack of housing available is still pushing prices up.
Waiting to have 20% of an ever-increasing housing price is likely to price you out of the market. There are many loans available where you can put down as low as 5%, leaving you with more money available for home repairs or to increase your bid if need be.
And on the PMI front, your credit score, debt-to-income ratio, and loan-to-value ratio can all affect your PMI rate, so if you have a great credit score and low debt amounts, your PMI may be low enough to make it well worth putting less than 20% down.
To continue reading, please go to the original article here:
https://www.yahoo.com/lifestyle/5-outdated-money-rules-die-164602133.html
What Happens to Your Mortgage When You Die?
.What Happens to Your Mortgage When You Die?
Mark Henricks Mon, April 18, 2022
If you die owing money on a mortgage, the mortgage remains in force. If you have a co-signer, the co-signer may still be obligated to pay back the loan. A spouse or other family member who inherits a house generally has the right to take over the payments and keep the home. Alternatively, terms of a will may direct that the estate’s assets be used to pay off the mortgage, and sometimes a life insurance policy will pay off the mortgage if the original borrower dies. If no one will assume the mortgage and there is no provision to pay it off, the lender may foreclose on the property and sell it. A financial advisor can help you deal with mortgage challenges during the estate planning process.
What Happens to Your Mortgage When You Die?
Mark Henricks Mon, April 18, 2022
If you die owing money on a mortgage, the mortgage remains in force. If you have a co-signer, the co-signer may still be obligated to pay back the loan. A spouse or other family member who inherits a house generally has the right to take over the payments and keep the home. Alternatively, terms of a will may direct that the estate’s assets be used to pay off the mortgage, and sometimes a life insurance policy will pay off the mortgage if the original borrower dies. If no one will assume the mortgage and there is no provision to pay it off, the lender may foreclose on the property and sell it. A financial advisor can help you deal with mortgage challenges during the estate planning process.
What Happens to Your Mortgage After Your Death?
Mortgages, unlike most other debts, don’t usually have to be paid back from the estate of a deceased person. With credit cards, car loans and similar debts, family members generally aren’t directly responsible. Instead, debts will be settled with funds from or generated by sales of assets in the estate before anything is distributed to heirs.
When the deceased person was married, the situation is different in community property states. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, surviving spouses may be responsible for paying back mortgages as well as other debts assumed by a deceased spouse during the course of the marriage. Note that debts assumed before the start of the marriage are normally not the responsibility of the surviving spouse. The specifics vary significantly from state to state, however.
With a mortgage, only the specific property that secures the loan is affected. Unless the will specifies otherwise, the other assets in the estate can be distributed to beneficiaries through probate rather than being applied to the mortgage.
While the mortgage debt survives the deceased person, the responsibility for paying it back doesn’t automatically transfer to anyone other than a surviving spouse in a community property state, again unless there is a co-signer. If there is a co-signer, that person remains responsible for the mortgage debt after the death of the other co-borrower.
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/happens-mortgage-die-150414432.html
The 11 Most Extravagant, Exclusive and Surprising Credit Card Perks
.The 11 Most Extravagant, Exclusive and Surprising Credit Card Perks
Don't miss out on these impressive credit card perks.
Cameron Huddleston Life and Money Columnist Jun 3, 2019
Cash back, free hotel stays and flights are among the more common perks of having a rewards credit card. Certainly, these perks are great — and an easy way to have your credit cards work for you. However, some high-end cards dole out benefits that make you truly feel like a VIP.
To qualify for some of these perks, though, you need to get an excellent credit score. You might also have to pay steep annual credit card fees. Fortunately, not all rewards credit cards come with fees or are quite so exclusive.
The 11 Most Extravagant, Exclusive and Surprising Credit Card Perks
Don't miss out on these impressive credit card perks.
Cameron Huddleston Life and Money Columnist Jun 3, 2019
Cash back, free hotel stays and flights are among the more common perks of having a rewards credit card. Certainly, these perks are great — and an easy way to have your credit cards work for you. However, some high-end cards dole out benefits that make you truly feel like a VIP.
To qualify for some of these perks, though, you need to get an excellent credit score. You might also have to pay steep annual credit card fees. Fortunately, not all rewards credit cards come with fees or are quite so exclusive.
A Chance to Meet Mickey Mouse
If you’re a die-hard Disney fan, you can meet some of your favorite characters such as Mickey Mouse if you take advantage of this credit card perk.
“The Disney and Disney Premier Visa cards from Chase offer cardmember exclusive photo opportunities at a private card member location at the Disneyland and Walt Disney World resorts,” said credit card expert Jason Steele. You also get free downloads of your photos.
The cards also let you earn rewards points for purchases that can be redeemed for Disney theme park tickets, Disney movie tickets, resort stays and more. The Disney Premier Visa has a $49 annual fee, but the Disney Visa has no annual fee.
Tickets to the Emmy Awards
You don’t have to be a celebrity to go to the Primetime Emmy Awards. Having the right credit card can get you access. As a Chase Sapphire cardholder, Steele was able to attend the 68th Emmy Awards in 2016.
Chase Sapphire cardholders can use rewards points — or cash — to purchase special events packages, such as the Emmy Awards that Steele attended. The events that are accessible vary from year to year. Some of the current experiences available to Chase Sapphire Reserve cardholders are a 2019 Sundance Film Festival package, tickets to the Rockettes’ Christmas Spectacular at Radio City Music Hall and a pre-show reception with two of the Rockettes. However, the annual fee for the Chase Sapphire Reserve is a hefty $450.
To continue reading, please go to the original article here:
https://www.gobankingrates.com/credit-cards/advice/most-exclusive-credit-card-perks/
The Top Purchases You Should Always Make With a Credit Card
.The Top Purchases You Should Always Make With a Credit Card
Don't miss out on the perks of using your card in smart ways.
By John Csiszar Apr 18, 2022 Get Credit Advice
Some financial advisors suggest that consumers should never buy anything with a credit card and should only use cash for purchases. The philosophy behind this advice does have some merit, but for those that use credit responsibly, there’s a whole host of benefits. In fact, for some types of purchases, failure to use a credit card can actually be a mistake, as you’d be forsaking various forms of protection and benefits.
Although the caveat is always there that you must use your credit responsibly, here’s a list of purchases that you should always consider making with a credit card.
The Top Purchases You Should Always Make With a Credit Card
Don't miss out on the perks of using your card in smart ways.
By John Csiszar Apr 18, 2022 Get Credit Advice
Some financial advisors suggest that consumers should never buy anything with a credit card and should only use cash for purchases. The philosophy behind this advice does have some merit, but for those that use credit responsibly, there’s a whole host of benefits. In fact, for some types of purchases, failure to use a credit card can actually be a mistake, as you’d be forsaking various forms of protection and benefits.
Although the caveat is always there that you must use your credit responsibly, here’s a list of purchases that you should always consider making with a credit card.
Electronics and Appliances
Depending on the type of card you have, you should always buy appliances and electronics on credit. Beyond any points that you might earn, many credit cards offer extended warranties on purchases of electronics and appliances. For example, if you buy a dishwasher with a one-year manufacturer’s warranty, your credit card company may double that warranty period to two years. Some credit cards also offer damage and theft purchase protection. If your purchase is damaged or stolen within a certain time period, usually 90 to 120 days, your card company will repair it or reimburse you for the purchase, up to certain limits.
Bonus Categories
Credit card issuers operate in a competitive field, and that has benefitted credit card customers immensely. Most rewards cards now offer bonus multipliers in various categories, such as three times points on travel and dining or two times points on groceries. The key to maximizing these bonus points is to pick a card that provides enhancements for things that you normally spend your money on. For example, if you spend a lot of money on groceries and gas, you’ll want to direct that spend toward a card that provides bonus points in those categories.
Airfare
Flights are among the most obvious purchases to make with credit cards. For starters, many rewards credit cards offer additional bonus points for the purchase of flights. However, most travel-oriented credit cards offer many additional perks for flight purchases.
Some cards offer free trip delay or cancellation insurance, while branded cards often grant free baggage privileges for flights purchased using the card. Many travel cards also offer lost luggage insurance, reimbursing you for your bags and their contents if they don’t turn up. Once you begin your trip, some cards offer free access to airport lounges as well.
To continue reading, please go to the original article here:
Not Good With Money? These 5 Expert Tips Are Made for You
.Not Good With Money? These 5 Expert Tips Are Made for You
Casey Bond Mon, April 18, 2022
Being "good with money" means different things to different people. Maybe it's having a lot of savings, zero debt or a big investment portfolio.
For those who don't have those things, it can feel hopeless. The good news: If you consider yourself bad with money, that's probably not the case. You simply need to learn a few basics. So if you'd like to get your finances on track once and for all, consider these tips from money experts.
Not Good With Money? These 5 Expert Tips Are Made for You
Casey Bond Mon, April 18, 2022
Being "good with money" means different things to different people. Maybe it's having a lot of savings, zero debt or a big investment portfolio.
For those who don't have those things, it can feel hopeless. The good news: If you consider yourself bad with money, that's probably not the case. You simply need to learn a few basics. So if you'd like to get your finances on track once and for all, consider these tips from money experts.
Normalize Looking at Your Money
One of the major reasons why people don't develop good money habits is because they're ashamed or afraid to know what's really going on. "If, instead, an individual looks at their money regularly, they will be able to see it more objectively," said Kimbree Redburn, an accredited financial counselor and financial coach at Illuminate Financial. "They will notice trends and patterns and will better understand the flow of money into and out of their account."
Redburn suggested setting up a weekly check-in with your money -- 15 to 20 minutes is plenty. "Put the meeting on your calendar and honor it like you would any other commitment," she said. Next, sit down and look over your previous spending for the past week. Ask yourself whether it was in line with what you expected, or if changes need to be made. Then look ahead at the week ahead, and make a plan for covering the bills and other expenses you have coming up.
Try a Zero-Based Budget
To take control of your finances, you need to tell your money what to do and when to do it, explained Eric Bowie, owner and founder of Smart Money Bro. And that requires having a budget. "I recommend a zero-based budget," he said.
This means setting up your budget so that your income minus expenses equals zero. In other words, every dollar you earn has a job to do, whether that's paying a bill, paying down debt or going toward savings and investments. "A monthly budget where all of your money is spent on paper, is the ultimate top-down management of your finances," Bowie added.
To continue reading, please go to the original article here:
https://www.yahoo.com/finance/news/not-good-money-5-expert-190017174.html
The Riskiest Places To Swipe Your Credit Card
.The Riskiest Places To Swipe Your Credit Card
Scott M. Brodie Mon, April 18, 2022, 1:00 PM
Credit card fraud has become a constant and pervasive threat, and debit cards aren't immune to being stolen either. The Federal Trade Commission reported 66,090 instances of credit card fraud in 2020. This is why it's so important to know where the risks are, so you can better protect yourself from those looking to steal your information.
ATM Machines
Thieves have been skimming debit (and credit) card information from ATM machines for years, and the innovation of chip cards was partly developed to address this risk. As the credit card industry advances, though, thieves adapt -- and Consumer Reports notes they now have "shimmers" that can read chip-based cards.
The Riskiest Places To Swipe Your Credit Card
Scott M. Brodie Mon, April 18, 2022, 1:00 PM
Credit card fraud has become a constant and pervasive threat, and debit cards aren't immune to being stolen either. The Federal Trade Commission reported 66,090 instances of credit card fraud in 2020. This is why it's so important to know where the risks are, so you can better protect yourself from those looking to steal your information.
ATM Machines
Thieves have been skimming debit (and credit) card information from ATM machines for years, and the innovation of chip cards was partly developed to address this risk. As the credit card industry advances, though, thieves adapt -- and Consumer Reports notes they now have "shimmers" that can read chip-based cards.
Gas Stations
Gas stations are a haven for credit card thieves, as the pumps see a lot of customers and often receive minimal supervision. As a result, thieves have ample opportunity to install skimmers and sometimes tiny cameras that capture PIN numbers. The problem is so bad, the Secret Service has gotten involved. The agency found almost 200 skimmers at 400 gas stations during a crackdown in 2018.
Mobile Vendors
While there are many trustworthy mobile vendors who are trying to earn an honest living, there also can be thieves who pose as such vendors. At festivals, fairs, concerts and other events, attendees sometimes don't know whether a vendor is legit or uses a card skimmer. This can leave your card susceptible.
Dining Establishments
While some restaurants now swipe your card in a visible location, many still run cards in the back of the house where you can't see it. Should an establishment or individual server be unscrupulous, they could swipe your card through a skimmer and charge more than just your meal.
Chain Retailers
Large chain retail stores might seem like safer places to use a credit card because they have more resources to invest in security. The number of people who swipe cards at retailers makes them especially promising targets for thieves, though, and some have managed to get through the security measures in place. Target, TJX -- which operates T.J. Maxx and Marshall's -- and others have had data breaches involving cards.
Online Retailers
To continue reading, please go to the original article here:
https://www.yahoo.com/finance/news/riskiest-places-swipe-credit-card-170001180.html
We May Be Entering The ‘Down Phase’ Of The Economic Cycle
.We May Be Entering The ‘Down Phase’ Of The Economic Cycle
Notes From the Field By Simon Black April 18, 2022
On June 29, 1914, Emperor Franz Joseph of Austria-Hungary sat quietly while his ‘experts’ debated what to do next. The Emperor’s son and heir, Archduke Franz Ferdinand, had just been assassinated the previous morning in Sarajevo. And there was still much they didn’t know.
Some of the Emperor’s ministers suggested they demand a criminal investigation into the assassination in order to gather all the facts. Others recommended immediate military mobilization. Other advisors argued that Austria-Hungary should seek support from its allies, and others suggested they deliver a firm ultimatum.
But the 84-year old Emperor was too distraught to engage in the conversation, so most of the decision-making was left to the ‘experts’.
We May Be Entering The ‘Down Phase’ Of The Economic Cycle
Notes From the Field By Simon Black April 18, 2022
On June 29, 1914, Emperor Franz Joseph of Austria-Hungary sat quietly while his ‘experts’ debated what to do next. The Emperor’s son and heir, Archduke Franz Ferdinand, had just been assassinated the previous morning in Sarajevo. And there was still much they didn’t know.
Some of the Emperor’s ministers suggested they demand a criminal investigation into the assassination in order to gather all the facts. Others recommended immediate military mobilization. Other advisors argued that Austria-Hungary should seek support from its allies, and others suggested they deliver a firm ultimatum.
But the 84-year old Emperor was too distraught to engage in the conversation, so most of the decision-making was left to the ‘experts’.
These were men with decades of experience in diplomacy and foreign relations. Yet most of them were making terrible assumptions and gross miscalculations.
Similar misguided conversations were taking place across Europe, as high-ranking government officials in Britain, France, Russia, and Germany debated how to respond to the assassination.
Some were obsessed with appearing strong, while others fretted about public opinion. And nearly every action they took escalated the crisis further. Experts always know best...
By the middle of July these ‘experts’ had engineered an unavoidable conflict, and war finally broke out on July 28, 1914.
The war itself would last for more than four years; and it was one of the most brutal and hellish ever waged.
But more broadly, the war marked the beginning of a multi-decade era of conflict, suffering, and hardship.
Over the next 30+ years, the world saw the rapid spread of Socialism. Hyperinflation in the Weimar Republic. The rise of Nazism and outbreak of the second war. And the Great Depression-- where ‘experts’ once again did all the wrong things and made a bad situation much worse.
(Even the Federal Reserve acknowledges this; former Fed chairman Ben Bernanke once remarked in a 2002 speech, “Regarding the Great Depression, you’re right. We did it. We’re very sorry.”)
Obviously it wasn’t all chaos; there were ups and downs throughout this period. In the late 1920s, for example, many major economies were booming.
But in general, the period of history from the start of World War I in 1914, until the end of World War II in 1944, was dominated by painful economic conditions.
And then everything started to change. Once World War II was finally over, the US entered a new multi-decade period-- but one that was characterized by growth and prosperity instead of economic pain.
From 1945 through the late 1960s, the US economy grew quickly. The stock market boomed. Inflation was low. Unemployment was low. Interest rates were low.
1952 is a great example. By December of that year, the S&P 500 had posted an annual gain of roughly 12%. The US economy had grown 6.9%. Inflation was just 0.90%. Unemployment was 2.7%. And mortgage rates hovered around 4%. Those are pretty fantastic economic conditions, and they are indicative of the era.
Certainly there were periods of crisis and instability-- the social chaos of the 1960s, wars in Korea and Vietnam, etc. But, in general, prosperity abounded for roughly 25 years.
Then the 1970s came, and everything changed again. Inflation surged and quickly became stagflation. There were energy shortages. Unemployment soared.
And the stock market performed dismally. In fact, when adjusted for inflation, the S&P 500 lost 42% during the 1970s, and wouldn’t surpass its 1968 record high until 1994!
Even into the 1980s when the US economy started growing again, unemployment remained elevated above 7%. And mortgage rates soared as high as 18%.
It was a difficult time to say the least. But then conditions reversed again.
1995 was the start of the Dot-com boom, and another multi-decade era. Just like 1945-1970, this one was characterized by low inflation, low unemployment, low interest rates, and strong stock market returns.
Obviously there were plenty of ups and downs from this period as well-- including the dot-com bust, 9/11, and the Global Financial Crisis in 2008.
But in general the period from 1995 until ~2020 enjoyed a tremendous amount of good fortune.
What I’m essentially describing here is how economic prosperity tends to move in very long-term cycles. They usually last for decades.
Obviously during each phase in the cycle there are variations; 1914 through 1945 was a period of general suffering, for example, even though the economy boomed in the 1920s.
But overall these cycles alternate between prosperity and hardship, up then down.
We’ve been in the ‘up’ phase of the cycle for several decades. And I believe we are transitioning to the ‘down’ phase.
Just like in 1914, many of our ‘experts’ today have engineered an inescapable situation.
They may be well-meaning, but the confluence of their devastating public health policies, monetary policy, trade policy, anti-Capitalist economic policies, etc. has driven inflation to record levels.
They want us to believe they have everything under control. They want us to believe that if we just sit tight, then they’ll fix it and everything will go back to normal.
This is a total farce. Many key inflation drivers (including conflict, long-term demographic trends, and major shifts in global manufacturing) are chronic issues that aren’t going away anytime soon.
And with inflation lingering, people will start tightening their belts. Many have already begun to do so.
This means that discretionary consumption will decline, which makes recession inevitable. Combined with already high inflation, this ultimately means stagflation.
More broadly, it may signal a new economic era-- the down phase in the cycle-- characterized by tougher conditions: higher interest rates, higher inflation, and slower growth.
These ‘down’ phases are a natural and critical part of the economic life cycle. Boom times cannot last forever. They never have.
Just as mother nature clears its own overgrowth, economies require a natural correction of their excesses. That’s what a down phase really is.
So don’t panic-- the world isn’t coming to an end. And there will always be opportunities to prosper for intelligent, independent-minded people.
In the last down cycle during the 1970s, for example, some of the today’s most formidable companies were founded, including Apple and Microsoft. Employees and investors alike minted millions. The next down phase will be no different.
The important thing for now is to recognize that a major shift may be upon us-- and it could very well last for years to come.
Simon Black, Founder, SovereignMan.com