Here’s How Much in Taxes You’ll Pay if You Win the $1 Billion Mega Millions
.Here’s How Much in Taxes You’ll Pay if You Win the $1 Billion Mega Millions (and Other Fun Facts)
Vance Cariaga Thu, July 28, 2022
If you’re buying a lottery ticket on the off chance that you might win the $1 billion Mega Millions jackpot this week, you’d do well to remember this: Winning isn’t all Dom Pérignon and luxury suites. You’ll also face a hefty tax bill — so much so that you might have to scrape by on $380 million or so once the IRS takes its cut.
Since nobody took home the grand prize on July 26 by matching all six numbers, the Mega Millions jackpot has now ballooned to $1.02 billion, CNBC reported. The next drawing is Friday night, July 29, at 11 p.m. EST.
Here’s How Much in Taxes You’ll Pay if You Win the $1 Billion Mega Millions (and Other Fun Facts)
Vance Cariaga Thu, July 28, 2022
If you’re buying a lottery ticket on the off chance that you might win the $1 billion Mega Millions jackpot this week, you’d do well to remember this: Winning isn’t all Dom Pérignon and luxury suites. You’ll also face a hefty tax bill — so much so that you might have to scrape by on $380 million or so once the IRS takes its cut.
Since nobody took home the grand prize on July 26 by matching all six numbers, the Mega Millions jackpot has now ballooned to $1.02 billion, CNBC reported. The next drawing is Friday night, July 29, at 11 p.m. EST.
It is now the third-largest jackpot in Mega Millions history — and only the third time the jackpot has risen above $1 billion, NPR reported. You have a 1 in 302.5 million chance of winning, which is long odds indeed.
One thing’s for certain: No matter who wins, they’ll be giving a huge chunk of their winnings to Uncle Sam. That’s the case whether the jackpot is doled out as an annuity of 30 payments over 29 years or as an immediate, reduced cash lump sum. Most winners opt for the cash option.
For the current $1.02 billion jackpot, the cash option is $602.5 million, CNBC noted. There is a mandatory 24% federal tax withholding on that amount, which would reduce the winnings by $144.6 million. It would be further reduced by the top federal marginal tax rate of 37%, which applies to yearly income above $539,900 for single taxpayers or $647,850 for married couples filing jointly.
Unless the winner does something creative with the jackpot, such as donating part of it to charity, there would be an additional 13% due to the IRS, for a total of $222.9 million in overall taxes. That would bring the winnings down to about $380 million — and that’s before any state or local taxes might apply.
If the winner is lucky enough to live in a state with no state income tax, this won’t be a problem. Only seven states have no state income tax, according to Intuit TurboTax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Of those states, Alaska and Nevada do not have the Mega Millions jackpot.
How to Play the Mega Millions Lottery
To continue reading, please go to the original article here:
Why Lottery Winnings Don’t Always Lead To Happiness
.Why Lottery Winnings Don’t Always Lead To Happiness
Shirin Ali | July 27, 2022
Story at a glance
Winning the lottery may increase a person’s life satisfaction and remain that way for decades to come.
An increase in happiness isn’t as certain, with research showing lottery winners showing little to no improvement there.
Researchers say happiness is subjective and is interpreted differently from person to person.
Receiving a massive influx of cash may seem like instant gratification but research has shown that winning a lottery may increase life satisfaction but may not impact general happiness.
Why Lottery Winnings Don’t Always Lead To Happiness
Shirin Ali | July 27, 2022
Story at a glance
Winning the lottery may increase a person’s life satisfaction and remain that way for decades to come.
An increase in happiness isn’t as certain, with research showing lottery winners showing little to no improvement there.
Researchers say happiness is subjective and is interpreted differently from person to person.
Receiving a massive influx of cash may seem like instant gratification but research has shown that winning a lottery may increase life satisfaction but may not impact general happiness.
The odds of winning a Mega Millions jackpot is one in 303 million — while the odds of winning at least $1 million are about 1 in 12.6 million.
For the lucky few who do manage to snag a winning ticket, they will likely experience an increase in life satisfaction that can persist for over a decade, with no evidence of that decreasing over time.
However, the effect on a person’s happiness and mental health after winning a lottery is more mixed, with research showing increases are usually smaller and not statistically significant.
Those are findings that researchers from New York University and Stockholm University in Sweden came to after studying over 400 people who had won lotteries in Sweden from 1998 to 2011.
America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news.
“We find that winning large sums of money strongly affects how content you are with your personal finances. But it does not affect how you feel about other aspects of life, such as your health, or your relationships with friends and family,” said Erik Lindqvist, one of the researchers behind the study.
Lindqvist’s team found clear evidence that wealth improves people’s evaluation of their lives as a whole— suggesting that improved financial circumstances is an important component behind increasing people’s life satisfaction.
To continue reading, please go to the original article here:
https://www.yahoo.com/news/why-lottery-winnings-don-t-185952242.html
Here’s How To Build a 6-Month Emergency Fund
.Here’s How To Build a 6-Month Emergency Fund
Nicole Spector Wed, July 27, 2022
We may be a country sorely lacking in financial literacy, but we all have one core principle ingrained in us: We must have an emergency savings fund.
In theory, it sounds pretty simple: You make a certain amount of income, and set a certain amount of that aside in an account that you only tap into when the going gets especially tough and you need to shell out dough for something like a new car part or a surprise medical bill. But embarking on building a six-month (the recommended amount) emergency fund can be challenging.
Here’s How To Build a 6-Month Emergency Fund
Nicole Spector Wed, July 27, 2022
We may be a country sorely lacking in financial literacy, but we all have one core principle ingrained in us: We must have an emergency savings fund.
In theory, it sounds pretty simple: You make a certain amount of income, and set a certain amount of that aside in an account that you only tap into when the going gets especially tough and you need to shell out dough for something like a new car part or a surprise medical bill. But embarking on building a six-month (the recommended amount) emergency fund can be challenging.
Where do you begin? With the help of finance experts, we've laid out a multi-step plan of attack.
Go In With the Right Mindset
"Saving is primarily a mental game that you can win," said Adam Garcia, founder of The Stock Dork. "Setting away even a tiny amount of money on a regular basis can eventually lead you to your objective, no matter how low your starting point is. Time and a little self-control are all that is required."
Get an Accountability Partner
"The journey to starting and faithfully contributing to an emergency fund is more successful when done with a partner," said Lucia Jensen, CEO of WeLoans. "Consider working with your financial advisor to help you stay on track."
Map Out Your Spending
"Take the time to distinguish what your necessary expenses are, and what your discretionary expenses are (i.e. streaming services, shopping for clothes)," said Katie Ross, EVP of American Consumer Credit Counseling (ACCC). "If you're in a tight spot financially, you may want to cut out some discretionary spending. Your emergency fund should cover your essential needs. After you calculate your total expenses for one month, multiply that number by six. The final number is how much money you should have for your six-month emergency fund."
Rethink Subscriptions and Sign Up for Promotions
"Whether it's your cable company, cell phone provider, or gym membership, it's time to rethink the value of your subscriptions to their services," said Owen Wilcox, co-founder of USInstallmentLoans. "You have probably forgotten about other subscriptions, yet they continue charging monthly fees. Consider canceling, putting some on hold, or renegotiating the deals to free up critical funds to be redirected to your emergency fund."
Start Setting 5%-10% of Your Paycheck Aside
To continue reading, please go to the original article here:
https://news.yahoo.com/build-6-month-emergency-fund-173007166.html
Tails, You Win
.Tails, You Win
Jul 26, 2022 by Morgan Housel
Steamboat Willie put Walt Disney on the map as an animator. Business success was another story. Disney’s first studio went bankrupt. Later cartoons were monstrously expensive to produce, and financed at onerous terms. By the mid-1930s Disney had produced more than 400 cartoons – most of them short, most of them liked, and most of them losing money. Disney and his studio were nearly broke.
Snow White and the Seven Dwarfs changed everything. The $8 million it earned in the first six months of 1938 was an order of magnitude higher than anything the studio earned previously. It transformed Disney Studios. All company debts were paid off. Key employees got retention bonuses. The company purchased a new state-of-the-art studio in Burbank, where it remains today. By 1938 Walt had produced several hundred hours of film. But in business terms, the 83 minutes of Snow White was pretty much all that mattered.
Tails, You Win
Jul 26, 2022 by Morgan Housel
Steamboat Willie put Walt Disney on the map as an animator. Business success was another story. Disney’s first studio went bankrupt. Later cartoons were monstrously expensive to produce, and financed at onerous terms. By the mid-1930s Disney had produced more than 400 cartoons – most of them short, most of them liked, and most of them losing money. Disney and his studio were nearly broke.
Snow White and the Seven Dwarfs changed everything. The $8 million it earned in the first six months of 1938 was an order of magnitude higher than anything the studio earned previously. It transformed Disney Studios. All company debts were paid off. Key employees got retention bonuses. The company purchased a new state-of-the-art studio in Burbank, where it remains today. By 1938 Walt had produced several hundred hours of film. But in business terms, the 83 minutes of Snow White was pretty much all that mattered.
Long tails drive everything. They dominate business, investing, sports, politics, products, careers, everything.
Rule of thumb: Anything that is huge, profitable, famous, or influential is the result of a tail event.
Another rule of thumb: Most of our attention goes to things that are huge, profitable, famous, or influential. And when most of what you pay attention to is the result of a tail, you underestimate how rare and powerful they really are.
Venture capital is a tail-driven business. You’ve likely heard that. Make 100 investments, and almost all of your return will come from five of them; most of your return from one or two.
Correlation Ventures crunched the numbers. Out of 21,000 venture financings from 2004 to 2014, 65% lost money. Two and a half percent of investments made 10x-20x. One percent made more than 20x return. Half a percent – about 100 companies – earned 50x or more. That’s where the majority of the industry’s returns come from. It skews even more as you drill down. There’s been $482 billion of VC funding in the last ten years.
The combined value of the ten largest venture-backed companies is $213 billion. So ten venture-backed companies are valued at half the industry’s deployed capital.
There is a feeling, I’ve noticed, that this low-hit, high-stakes path is unique to VC in the investment world.
I want to show you that it’s not. Long tails drive everything.
The most successful venture-backed companies – the tails – go on to become public companies. And it’s easy to measure how important tail returns are to public markets. Spoiler alert: It’s not much different than VC.
The S&P 500 rose 22% in 2017. But a quarter of that return came from 5 companies – Amazon, Apple, Facebook, Boeing, and Microsoft. Ten companies made up 35% of the return. Twenty-three accounted for half the return. Apple alone was responsible for more of the index’s total returns than the bottom 321 companies combined.
The S&P 500 gained 108% over the last five years. Twenty-two companies are responsible for half that gain. Ninety-two companies made up three-quarters of the returns.
The Nasdaq 100 skews even more. The index gained 32% last year. Five companies made up 51% of that return. Twenty-five companies were responsible for 75% of the overall return.
It’s always like this. J.P. Morgan Asset Management published the distribution of returns for the Russell 3000 from 1980 to 2014. Forty percent of all Russell 3000 stock components lost at least 70% of their value and never recovered. Effectively all of the index’s overall returns came from 7% of components. That’s the kind of thing you’d associate venture capital. But it’s what happened inside your grandmother’s index fund.
You can drill this down even more.
Amazon drove 6.1% of the S&P 500’s returns last year. And Amazon’s growth is almost entirely due to Prime and AWS, which itself are tail events inside a company that has experimented with hundreds of products, from the Fire Phone to travel agencies.
Apple was responsible for almost 7% of the index’s returns. And it is driven overwhelmingly by the iPhone, which in the world of tech products is as tail-y as tails get.
To continue reading, please go to the original article here:
Why You Shouldn’t Keep Your Cash Under the Mattress
.Why You Shouldn’t Keep Your Cash Under the Mattress
Valencia Higuera Mon, July 25, 2022
If you don't know much about money, you don't have to look far for advice. You can always learn from personal finance articles, books and videos or money-savvy friends and family.
Although there's no short supply of guidance, money rules can shift over time. For that matter, some old-school advice should be taken with a grain of salt.
Pay Off Your Mortgage Early
Most people need a mortgage to purchase a home. However, financing a house entails paying thousands of dollars in interest. To reduce interest charges, some borrowers come up with a plan to pay off their mortgages early by making extra payments.
Why You Shouldn’t Keep Your Cash Under the Mattress
Valencia Higuera Mon, July 25, 2022
If you don't know much about money, you don't have to look far for advice. You can always learn from personal finance articles, books and videos or money-savvy friends and family.
Although there's no short supply of guidance, money rules can shift over time. For that matter, some old-school advice should be taken with a grain of salt.
Pay Off Your Mortgage Early
Most people need a mortgage to purchase a home. However, financing a house entails paying thousands of dollars in interest. To reduce interest charges, some borrowers come up with a plan to pay off their mortgages early by making extra payments.
This advice isn't bad in itself, but according to Paul Moyer, the founder of SavingFreak.com, this advice doesn't make the same financial sense in our current low-interest environment as it did when mortgage rates were higher, like 6% to 8%.
"Those extra payments can do more work for you by being placed in other investments," Moyer said. "Even if you only get 6% over the life of the investment, you will beat the interest you are paying on your home mortgage."
You Can Buy a House You Can't Afford -- Just Get Roommates
Taking in a roommate or two can be a financially savvy way to save money, but never purchase a home if you can't afford to make the mortgage payments yourself. Roommates come and go, so you can't rely on them to pay off your home loan. And defaulting on a mortgage will ruin your credit and could result in foreclosure, making it hard for you to take out loans and buy another home in the future.
Prioritize Saving For Your Child's Education
Some parents believe it's their responsibility to pay for their child's college education. The problem, however, is that some people save for their child's college education at the expense of saving for their retirement. Rather than sock all your money away for college tuition, David Walters, a CPA and certified financial planner with Palisades Hudson Financial Group, encouraged prioritizing retirement.
"I often need to remind (parents) that you can finance your child's education with college loans and other funding sources, but you can't finance your retirement, so a balance is needed," said Walters. "This is even more important for parents with children at or close to college age, as their time horizon for retirement is much shorter."
Use a Money Transfer Company To Send Cash
To continue reading, please go to the original article here:
https://news.yahoo.com/why-shouldn-t-keep-cash-143210325.html
11 Social Security Mistakes That Can Cost You a Fortune
.11 Social Security Mistakes That Can Cost You a Fortune
GOBankingRates Gabrielle Olya Thu, July 21, 2022
Whether you're counting on Social Security to fund most of your retirement income or supplement it, you want to make sure you get all of the money you're entitled to. However, with so many ways to claim benefits -- especially if you're married or used to be married -- small mistakes could end up costing you a lot of money over the rest of your life. By knowing which Social Security mistakes to avoid, your retirement will be easier to handle -- even if you aim to retire early.
The Mistake: Not Checking Your Earnings Record
Even if you're decades away from claiming Social Security, you could be making a big mistake if you don't keep track of your yearly earnings.
11 Social Security Mistakes That Can Cost You a Fortune
GOBankingRates Gabrielle Olya Thu, July 21, 2022
Whether you're counting on Social Security to fund most of your retirement income or supplement it, you want to make sure you get all of the money you're entitled to. However, with so many ways to claim benefits -- especially if you're married or used to be married -- small mistakes could end up costing you a lot of money over the rest of your life. By knowing which Social Security mistakes to avoid, your retirement will be easier to handle -- even if you aim to retire early.
The Mistake: Not Checking Your Earnings Record
Even if you're decades away from claiming Social Security, you could be making a big mistake if you don't keep track of your yearly earnings.
The amount of Social Security benefits you receive depends on your earnings record, so if that record is incorrect, you might not receive the benefits you're entitled to.
Errors can occur for a variety of reasons, including an employer reporting an incorrect amount of earnings or your earnings not showing up because you got married or divorced and your name change has not been processed correctly.
What To Do: Check Your Social Security Statement While Working
To avoid losing money due to errors in your earnings record, check your statement annually. If you notice errors, gather proof of your earnings to send to the Social Security Administration, such as your W-2 or pay stubs. Once the Social Security Administration has verified your claim, it will correct your record.
It's much easier to prove an error that happened the previous year, when you still have your records handy, than it is for 10, 20 or more years ago because you probably don't have a paper trail going back that far.
The Mistake: Not Working Long Enough
To qualify for Social Security retirement benefits, you need at least 40 work credits. You can earn up to four credits each year based on your earnings. For 2019, you must earn $1,360 to get one credit, or $5,440 to get the maximum of four credits.
In addition, your benefits are calculated based on the average of your 35 highest-earning years. If you have fewer than 35 years of earnings, $0 will be averaged in for each year you don't have earnings.
What To Do: Do the Math Before Retiring
As you're approaching retirement, check your earnings statement first to make sure you have enough credits to qualify for Social Security. If you don't already have 35 years of earnings, consider whether working an additional year or two could help boost your Social Security benefits.
To continue reading, please go to the original article here:
https://news.yahoo.com/11-social-security-mistakes-cost-160102171.html
Money Stress Is Linked to Poor Financial Wellness
.Money Stress Is Linked to Poor Financial Wellness, Advisors Can Help
Wola Odeniran Fri, July 22, 2022
New research from T. Rowe Price shows that your level of financial stress can connect with your financial wellness. In fact, retirement plan participants who report stress related to debt are saving less for retirement than those who are not stressed. Let's take a look at how money stress can be a sign of poor financial wellness.
A financial advisor could help you create a financial plan to get on a stress-free path to managing your money.
Retirement Plan Participants Are Stressed About Money
Money Stress Is Linked to Poor Financial Wellness, Advisors Can Help
Wola Odeniran Fri, July 22, 2022
New research from T. Rowe Price shows that your level of financial stress can connect with your financial wellness. In fact, retirement plan participants who report stress related to debt are saving less for retirement than those who are not stressed. Let's take a look at how money stress can be a sign of poor financial wellness.
A financial advisor could help you create a financial plan to get on a stress-free path to managing your money.
Retirement Plan Participants Are Stressed About Money
T. Rowe Price says that your path to a successful retirement starts with financial wellness. This includes paying your bills on time, being prepared for emergencies, and making sure you have access to information and tools that can track your financial decisions and hold you accountable.
But research from the global investment firm shows that retirement plan participants are stressed about debt. And this is causing them to save less than those who are not stressed. The research shows that stress stems from several financial factors, including debt, budgeting and health care expenses.
According to the study, 33% of respondents are struggling to stick to their monthly budgets. Roughly one-third of those with student loan debt are having issues repaying it. And 20% of respondents are similarly struggling to pay off credit card debt or home equities.
Research also shows that this financial stress is taking a toll on young folks, women and racial minorities.
Among survey participants, 73% of workers age 30 and younger reported moderate to high levels of stress related to budgeting, while only 40% of older workers age 50 and older reported the same stress.
Research also shows that women are 26% more likely than men to experience higher levels of financial stress, specifically as it relates to debt, budgeting, nonretirement savings and health care expenses.
When it comes to race, the study found that Black and Latino workers are 34% and 40%, respectively, more likely to experience higher levels of debt-related stress than white workers.
Overall, 25% of respondents believe they will have to lower their standard of living in retirement.
How High Financial Stress Predicts Financial Wellness
To continue reading, please go to the original article here:
https://news.yahoo.com/money-stress-linked-poor-financial-153548429.html
Inflation Money Tips: Top Advice for Saving and Spending
.Inflation Money Tips: Top Advice for Saving and Spending
GOBankingRates Andrew Lisa Thu, July 21, 2022
The bad news for anyone whose budget is struggling to keep up with rising prices is that inflation is not yet starting to cool. While things appeared to be moving in the right direction in April, May inflation spiked again and got worse in June.
"Inflation is over 9% right now so everything is more expensive," said personal finance expert and "Crawl Before You Ball" author Buffie Purselle. "Food, gas, water — everything you need to live. The reality is that there is very little room in anyone's budget for wants right now."
Inflation Money Tips: Top Advice for Saving and Spending
GOBankingRates Andrew Lisa Thu, July 21, 2022
The bad news for anyone whose budget is struggling to keep up with rising prices is that inflation is not yet starting to cool. While things appeared to be moving in the right direction in April, May inflation spiked again and got worse in June.
"Inflation is over 9% right now so everything is more expensive," said personal finance expert and "Crawl Before You Ball" author Buffie Purselle. "Food, gas, water — everything you need to live. The reality is that there is very little room in anyone's budget for wants right now."
Purselle is not incorrect, but that doesn't mean there aren't things you can do to take the sting out of these tough economic times while waiting for prices to fall back down to Earth.
Write It Down and Visualize
It's hard to imagine that there's a personal finance expert on Earth who advises against creating a budget and a household spending plan, but they usually say to pick the app or software that works best for you. At least one expert, however, wants you to do it the old-fashioned way. "My biggest piece of advice for individuals looking to gain a strong financial footing in this uncertain economic environment is to write everything down," said Lisa Fischer, chief growth and lending officer of the fintech company Mission Lane.
"Whether it's scribbling in a notebook or typing out an organized list, keeping a detailed record helps you visualize your cash flow and cut down where needed. "Amid the current inflationary period, this will help individuals keep an eye on rising costs and spending within the necessity and luxury expense categories."POLL: Do You Have a Side Gig or Other Hustle?
You Know What's Inflated? Your Recurring Subscriptions
If you take Fischer's advice and write your budget out by hand, you'll probably notice that you're writing some variation of the same thing over and over and over again. "Get rid of those eight or nine different subscriptions," Purselle said. "It's the first thing to go. Get rid of those charges you get every month for apps you don't use and you don't necessarily need. It's not about just not going to get coffee — those small amounts and subscriptions add up. And once you put that money back in your budget, put it in your savings."
Match Your Investments to the Moment
Interest rates are rising, which makes money more expensive to borrow, but it's probably safe to say that your savings account yield has barely ticked up only a little, if at all. The good news is that you can move your money to savings vehicles designed with inflation in mind. "Two such tools are TIPS — Treasury Inflation-Protected Securities — and Series I Savings Bonds," said Maya Nijhawan, co-founder and COO of Finch Credit.
"Both are designed to help protect your money from inflation, but they have their own nuances. Before you hit the buy button, make sure you understand all the terms and conditions."
To continue reading, please go to the original article here:
11 Ways Warren Buffett Lives Frugally
.11 Ways Warren Buffett Lives Frugally
GOBankingRates By Amanda Garcia Wed, July 20, 2022
Trying to build your savings, pay off debt and make the most of your money? You might want to try living like a billionaire — but only if that billionaire is Warren Buffett. The investor — known as the Oracle of Omaha — is the CEO of Berkshire Hathaway. But there's more to this American business magnate than just his job.
Despite his roughly $125.1 billion net worth, according to Forbes, the eight-wealthiest man in the world enjoys a life of simple taste, frugal living and generous philanthropy. Here's a look at Warren Buffett's tips for living frugally.
11 Ways Warren Buffett Lives Frugally
GOBankingRates By Amanda Garcia Wed, July 20, 2022
Trying to build your savings, pay off debt and make the most of your money? You might want to try living like a billionaire — but only if that billionaire is Warren Buffett. The investor — known as the Oracle of Omaha — is the CEO of Berkshire Hathaway. But there's more to this American business magnate than just his job.
Despite his roughly $125.1 billion net worth, according to Forbes, the eight-wealthiest man in the world enjoys a life of simple taste, frugal living and generous philanthropy. Here's a look at Warren Buffett's tips for living frugally.
Despite his roughly $125.1 billion net worth, according to Forbes, the eight-wealthiest man in the world enjoys a life of simple taste, frugal living and generous philanthropy. Here's a look at Warren Buffett's tips for living frugally.
Warren Buffett's House Is the Same One He Bought in 1958
Billionaires live in mansions, right? Not Buffett. He lives in the same residence in Omaha, Neb., that he bought in 1958 for $31,500, the equivalent of roughly $285,000 in 2020 dollars. Buffett has no intention of putting his own home up for sale. "I wouldn't trade it for anything," he told CNBC earlier this year.
POLL: Do You Think You Will Be Able To Retire at Age 65?In today's money, Buffett would have paid about $43 per square foot for the 6,570-square-foot home. But these days, the home is worth about $161 per square foot, according to the home's current value listed by the tax assessor's office in Douglas County, Nebraska, where Buffett lives.
If you want to live like Buffett, consider buying less home than you can afford. Instead of paying pricey mortgage payments, you'll be able to put more of your money toward savings, retirement or vacations. And if you must take out a loan, perhaps get a 30-year mortgage — it's "the best instrument in the world," Buffett told CNBC.
In fact, Buffett took out a 30-year mortgage in 1971 when he bought a vacation home in Laguna Beach, California. "If you're wrong and rates go to 2%, which I don't think they will, you pay it off," he said. "It's a one-way renegotiation. It is an incredibly attractive instrument for the homeowner and you've got a one-way bet."
Buffett Starts His Day With a Cheap Breakfast
You might assume billionaires brunch at the most extravagant restaurants, ordering eggs Benedict and bottomless mimosas. Or, they hire a personal chef who can whip up whatever and whenever they want — right? Wrong. Adopting Buffett's lifestyle doesn't include paying high prices for daily gourmet French toast prepared in the comforts of your own home. When it comes to food, the billionaire investor has been known to save money by taking the fast-food route.
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/11-ways-warren-buffett-lives-173001606.html
Little Ways The World Works
.Little Ways The World Works
Jul 20, 2022 by Morgan Housel
If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.
Take two topics that seemingly have nothing to do with each other: goldfish and tech companies. Take two groups of identical baby fish. Put one in abnormally cold water; the other in abnormally warm water. The fish living in cold water will grow slower than normal, while those in warm water will grow faster than normal.
Put both groups back in regular temperature water and they’ll eventually converge to become normal, full-sized adults.
Then the magic happens.
Little Ways The World Works
Jul 20, 2022 by Morgan Housel
If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.
Take two topics that seemingly have nothing to do with each other: goldfish and tech companies. Take two groups of identical baby fish. Put one in abnormally cold water; the other in abnormally warm water. The fish living in cold water will grow slower than normal, while those in warm water will grow faster than normal.
Put both groups back in regular temperature water and they’ll eventually converge to become normal, full-sized adults.
Then the magic happens.
Fish with slowed-down growth in their early days go on to live 30% longer than average. Those with artificial super-charged growth early on die 15% earlier than average.
That’s what biologists from University of Glasgow found.
The cause isn’t complicated. Super-charged growth can cause permanent tissue damage and “may only be achieved by diversion of resources away from maintenance and repair of damaged biomolecules.” Slowed-down growth does the opposite, “allowing an increased allocation to maintenance and repair.”
“You might well expect a machine built in haste to fail quicker than one put together carefully and methodically, and our study suggests that this may be true for bodies too,” one of the researchers wrote.
The same thing has been found in humans. And in birds. And in rats.
And isn’t it the same in business?
Chamath Palihapitiya once noted that however fast your business grows, that’s the half-life for how quickly it can be destroyed. So many companies, flush with cheap money from previous years, are learning this right now. Every business and every industry has a natural growth rate – push beyond it and short-term growth comes at the cost of long-term quality, and eventually survival.
When the limits of fast growth impact goldfish and rats the same way it limits tech companies, you know you’ve found an essential part of how the world works, and will continue working in the future.
John Muir once said, “When we try to pick out anything by itself we find it hitched to everything else in the universe.” Fields are studied individually, but there are so many common denominators across topics. The more fields a lesson applies to, and the more disparate those fields are, the more powerful and important the lesson becomes.
It might sound crazy, but once you understand the basic principles of your profession, you might gain more expertise by reading around your field than within your field. Connecting dots between fields helps you uncover the most powerful forces that guide how the world works, which can be so much more important than a little new detail that’s specific to your profession.
And if you look hard enough, there are so many dots to connect.
Here’s another.
Part of the second law of thermodynamics is that you get the most efficiency out of a system when the hottest heat source meets the coldest sink – that’s when an engine will waste the least amount of heat, converting as much energy into power as it can.
And isn’t it the same in business and careers?
A genius entering a crowded and competitive field may find a little success, but put her in a “cold” industry full of idiots and she’ll create a monopoly, destroying competitors. Jeff Bezos famously said “your margin is my opportunity,” which is the same concept. The biggest opportunities happen when a hot talent meets a cold industry. Thermodynamics has proven this since the beginning of the universe – no one should doubt how true and powerful it is.
To continue reading, please go to the original article here:
https://www.collaborativefund.com/blog/little-ways-the-world-works/
You’re In Charge Of You.
.You’re In Charge Of You. Not Secretary Pete. Not Hunter Biden’s Dad
Notes From the Field By Simon Black July 11, 2022
Richard of Bordeaux was just a scared, ten year old boy in the summer of 1377 when his grandfather passed away. This should hardly have been historically relevant. But in Richard’s case, his grandfather was King Edward III who had ruled England for more than 50 years.
Edward III had been highly unpopular and faced steep political opposition towards the end of his reign. And leading up to his death, Edward’s opponents among the nobility sought to consolidate their own power and install a new monarch that they could control.
You’re In Charge Of You. Not Secretary Pete. Not Hunter Biden’s Dad
Notes From the Field By Simon Black July 11, 2022
Richard of Bordeaux was just a scared, ten year old boy in the summer of 1377 when his grandfather passed away. This should hardly have been historically relevant. But in Richard’s case, his grandfather was King Edward III who had ruled England for more than 50 years.
Edward III had been highly unpopular and faced steep political opposition towards the end of his reign. And leading up to his death, Edward’s opponents among the nobility sought to consolidate their own power and install a new monarch that they could control.
So they plotted to install young Richard to the throne. Even though Richard would technically be King, the nobles would be calling the shots behind the scenes.
And so, on July 16, 1377, nearly 645 years ago to the day, the boy was whisked away to Westminster Abbey and crowned King Richard II under the watchful eyes of the new Regency Council.
The nobles wasted no time in appointing themselves to positions of high authority. After all, England was in extreme turmoil and in desperate need of their courageous leadership and expertise. They and they alone could save England from the depths of its crises.
And crises there were many.
The English treasury was depleting rapidly, thanks in large part to the endless Hundred Years War that had been raging for decades.
But most notably, recurrent outbreaks of the Bubonic Plague had ravaged the kingdom, with some cities having lost as much as 50% of their populations.
The pandemic (which we now call the Black Death) caused labor shortages and nasty inflation across the country.
So the expert nobles sprang into action with all sorts of idiotic rules and regulations. They raised taxes, they reduced freedom, they tightened feudal restrictions, and they tried to centrally plan economic output.
But none of their expert solutions worked, and by the autumn of 1380, England’s economy was in even worse shape.
International trade had practically collapsed. England was on the verge of defaulting on its debt. And the war was going very poorly for England; it turned out these expert nobles were pitiful military strategists, and France had seized the advantage.
So in November 1380, the experts convinced parliament to pass another tax-- a ‘head’ tax, which essentially meant that everyone in the kingdom had to fork over a fixed sum of money to the government simply for the privilege of being alive.
And this was the second such head tax that the experts had passed in as many years.
Needless to say it didn’t go over well with the people.
Serfs began to unionize and go on strike. Peasants outright refused to pay the tax. The nobles mobilized to stop them, sending magistrates across the countryside to arrest dissenters.
Within a few months, a full-blown uprising had broken out; it’s now known to history as the Peasant’s Revolt of 1381.
And it spread rapidly. By June 1381, riots were taking place across England. And they were anything but ‘mostly peaceful’.
Thousands of people were killed in the violence, and mobs tore down entire palaces. But in the end, government forces managed to put down the rebellion, and the rebel leaders were quickly executed.
None of the experts, of course, ever faced charges. Their corruption, incompetence, and profligate spending were all overlooked.
We’ve seen this story over and over again throughout history-- horrible leadership engineering major crises.
Quite often we blame the actual ruler in charge. Ancient Rome, for example, is packed with terrible emperors who share responsibility for the demise of the empire.
But it’s rarely just one person who creates all the turmoil. And we often forget key officials within government who drive so much chaos.
Richard II was just a stooge. Sure, he was officially the King. But ‘expert’ ministers were making all the decisions, and they proved to be some of the worst ever assembled in the history of government.
It’s hard to not notice the obvious parallels to our own times, and to see our own government filled with the same idiot savants that plagued the cabinet of Richard II.
Over the weekend I watched a recent interview with US Transportation Secretary Pete Buttigieg, the man who has presided over historic airline chaos, including record flight cancellations, delays, lost baggage, airport wait times, etc.
He’s also played a major role in mucking up the supply chain, given that the nation’s seaports, trucking, etc. fall within his domain.
Secretary Pete, of course, has been out to lunch throughout most of this.
But the interview he gave (which took place in April) gives an extremely revealing view of his mindset.
He explained to his host that his Department was in charge of spending nearly $1.2 trillion that had been authorized by Congress in the 2021 infrastructure bill.
“The main thing I’m thinking about,” said Secretary Pete, “is how do we make sure we take all this money, this $1.2 trillion… and actually deliver $1.2 trillion of value?”
Ummm… shouldn’t spending $1.2 trillion on roads and bridges provide AT LEAST $1.2 trillion worth of roads and bridges?
Seriously, how terrible are these infrastructure projects if he’s worried about not achieving enough value to even justify their costs?
Does Pete also go to the grocery store and worry, “How can I spend $100 in this store and walk out with $100 worth of groceries?”
You’d think he would be striving to achieve a 10x return on that infrastructure money. But no. Pete is trying to figure out how to get 1x.
To these people, it’s a monumental achievement to NOT squander the majority of funds entrusted to them by taxpayers.
And that’s ultimately why we cannot rely on them to fix their own mistakes.
The people in charge have engineered so many problems. They are responsible for everything from inflation and economic malaise, right down to the baby formula shortage.
And it’s not just one person shaking hands with thin air. It’s the clueless, astonishingly incompetent cadre below who consistently make things worse.
The good news is that while you cannot depend on government officials to ride to the rescue, you can rely on yourself.
I don’t mean for that to be a cheesy cliché. Sure, if taking United Airlines from Houston to New York, you still have to deal with Secretary Pete’s incompetence.
But we do have much more control over our lives and livelihoods than they want us to realize.
Even with these lunatics in charge, we have tremendous power over our own prosperity, our health, our children’s education, and more.
There are still oceans of opportunity in the world-- job opportunities, business opportunities, investment opportunities, lifestyle opportunities, etc.
Bottom line: you’re in charge of you. Not Secretary Pete. Not Hunter Biden’s dad. Not anyone else. And you don’t need to allow yourself to become a victim to their ineptitude.
To your freedom, Simon Black, Founder, SovereignMan.com