The Best Way to Keep Paper Currency From Becoming Moldy

The Best Way to Keep Paper Currency From Becoming Moldy

By Jenn Foreacre

Mold is a live fungus that gets its food by dissolving food materials with secreted digestive enzymes. Mold is naturally attracted to dark, moist places, such as basements, bathrooms and heavily wooded areas. Mold causes damage and deterioration, and it is also bad for your health.

The best way to prevent paper currency from developing mold is to keep it cool, dry and away from dark places that naturally contain mold.

Mold Prevention

Find a cool, dry place to store your paper currency. Closets, dresser drawers and boxes that will be put into storage are all ideal, as long as they are kept as clean and as dry as possible.

A clean area is one that is free of dirt and debris that could eventually harbor mold, or contain enough moisture to attract mold. Keep the air dry by ensuring that any outside drainage is sufficient and by using caulk or a silicone sealant to seal up any cracks around doors, windows and water pipes.

Keep the temperature on the cool side, as cool air doesn't hold as much moisture as warm air does. Run an air conditioner or a dehumidifer as needed. An air condition produces cool air by removing moisture from the environment and then cooling it.

Dehumidifers simply remove moisture from the air. Dehumidifers are available in varying sizes; make sure to choose one that is appropriate for the size of the room you wish to dry out. For small storage areas, consider using a product such as Damp Rid (see Resources), which uses special moisture-attracting pellets to remove water from the air.

Store paper currency in special plastic envelopes known as Mylar holders. Unlike normal plastic bags, storage bags and plastic wrap, Mylar holders do not contain any PVC materials, which over time can deteriorate and release chemicals and gases that can damage paper currency and lead to its deteroriation.

Place a single sheet of paper currency inside each Mylar holder, and carefully stack multiple Mylar holders together. Secure with a rubber band or a tie, and place the protected paper currency in a cool, dry place.

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

https://homesteady.com/how-6151037-prevent-mold-bread-box.html

The 10 Commandments of Wealth and Happiness

The 10 Commandments of Wealth and Happiness

Stacy Johnson • August 17, 2021

I've been offering money advice for more than 35 years. Here are the 10 most important things I've learned.  I’m now financially independent, but I didn’t get this way overnight. Nor did I do it by selling books, offering seminars or appearing on “Oprah.” I did it the same way you’re doing it: one paycheck at a time over long periods of time.

A few years back, one of my young staffers suggested I condense everything I’ve learned into a few simple ideas to serve as a guide to those starting out, starting over or maybe realizing they’re not where they’d like to be.   While certainly a challenge, it’s a worthy one.  So here goes: the 10 commandments of achieving financial independence — and maybe getting a little happier while you do it.

1. Live Like You’ll Die Tomorrow, But Invest Like You’ll Live Forever

The ease of making money in stocks, real estate or other risk-based assets is inversely proportional to the time horizon. In other words, making money over long periods of time is easy — making money overnight is the flip of a coin.

Money is like a tree: Plant it properly, care for it occasionally — but not obsessively — then wait.

The biggest winner in my IRA is Apple. I believe I bought it in 2002 or 2003, and I still have it. Had I been listening to CNBC or some other media outlet promoting trading, I almost certainly wouldn’t still own it.

The lesson? Enjoy your life to the fullest every day — live like you’re going to die tomorrow. But since you’re probably not going to die tomorrow, plant part of your money in quality stocks, real estate or other investments. Then, hold onto them.

Don’t ignore your investments entirely. Sometimes fundamentals change, indicating it’s time to move on. But don’t act rashly. Patience pays.

2. Listen To Your Own Voice Above All Others

My job as a consumer reporter has included listening to countless sad stories about nice people being separated from their money by people who weren’t so nice. These stories run the gamut from real estate deals to work-from-home scams, but they all start the same way: with a promise of something that seems too good to be true.

And they all end the same way: It was too good to be true.

If someone promises they can make you 3,000% in the stock market, they’re either a fool for sharing that information or a liar. Why would you send money to either kind of person?

When someone promises a simple solution to a complex problem, stop listening to them and start listening to your own inner voice.

https://www.moneytalksnews.com/7-dumb-ways-you-waste-money-daily/

7 Places To Save Your Extra Money

7 Places To Save Your Extra Money

Published June 27, 2022   By Liz Hund

Whether you’ve come into an inheritance, earned a bonus at work or made a profit selling your house, having extra money gives you a chance to grow your savings and maybe fulfill a goal, such as saving for a down payment on a new car. But deciding on the best place to stash your cash isn’t always easy.

Return on investment is an important factor to consider, but liquidity and the length of time before you need to access the cash are also important. Safety and investment costs should also be considered when determining where you should save your money. With that in mind, here are some options to consider.

1. High-yield savings account

A high-yield savings account is an attractive option for those who want to grow their savings while having easy access to the money, just in case.

To put the earnings into perspective, the yields on traditional savings accounts are typically very low, as little as 0.01 percent APY. But the top high-yield savings accounts earn above 1 percent APY.

You can open a savings account to build an emergency fund or save for a vacation or home repair while having safety and liquidity.

If you need to access portions of your money from time to time, savings account restrictions might be a problem. There could be a limit of six withdrawals or transfers per month, depending on the bank’s policies.

Another thing to note is that a high-yield savings account might offer a sign-up bonus or interest rate bonus, but you’ll likely have to maintain a sizable minimum balance in the account to earn the higher rate.

2. Certificate of deposit (CD)

The main difference between a savings account and a certificate of deposit is that a CD locks up your money for a set term. If you withdraw the cash early, you’ll be charged a penalty.

CDs can be disadvantageous when interest rates are low. But they also protect savers from falling interest rates because they allow you to lock in a fixed rate.

Though longer-term CDs offer better interest rates, you’re unable to access the funds during that time without paying a penalty in most cases.

One strategy to grow your earnings is to open several CDs that mature at different times. This is called CD laddering. Laddering offers flexibility and less risk than one big CD with one maturity date. By having several short- and long-term CDs, you can take advantage of higher interest rates without too much risk and still have the flexibility to take advantage of higher rates in the future.

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

https://www.bankrate.com/banking/savings/places-to-save-your-extra-money/#financial-planner

The Worst Kind of Financial Advice

The Worst Kind of Financial Advice

Posted October 14, 2022 by Ben Carlson

A new research paper from an economist at Yale did a deep dive into 50 of the most popular personal finance books of all-time.  If you’re a personal finance nerd like me you should be familiar with the authors — Dave Ramsey, Suze Orman, Robert Kiyosaki, Ramit Sethi, David Bach and the like.

The point of the paper was to show how typical personal finance advice differs from academic economic models.  For example, most personal finance books say you should start saving from an early age to develop good habits and take advantage of compound interest.

The author of the paper, James Choi, disagrees:

Because income tends to be hump-shaped with respect to age, savings rates should on average be low or negative early in life, high in midlife, and negative during retirement. From this perspective, the common policy of making the default retirement savings plan contribution rate not depend on age is suboptimal.

The idea here is most young people don’t make a lot of money so they should enjoy themselves and put off saving for retirement until middle age when most people enjoy higher incomes.

So who is right here — the economist or the personal finance experts?

They’re both right and they’re both wrong.

Certain people do need to start saving when they’re young to develop good financial habits, even if it’s a small amount of money. Middle age usually does bring more income but also more responsibilities.

For some, there will always be a good reason to put off saving until later so they need to start early.

For others, they can plan things out better. They understand the typical lifecycle of income trends and will have no problem putting money aside when they’re older so they can enjoy their youth while they can.

It really depends on the personality, circumstances and emotional make-up of the person in question.

Far too many “experts” these days profess to have the singular piece of advice that will solve all of your problems.

Just read this one book — it will change your life!

Just follow these 10 steps and you’ll find success!

Just read this quote by some guy who died 2,400 years ago and you too can gain enlightenment!

Just follow the exact same path I followed and you are sure to end up rich!

The problem with this kind of advice is it fails to recognize the hard work, personal circumstances, temperament, timing and luck involved.

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

https://awealthofcommonsense.com/2022/10/the-worst-kind-of-financial-advice/

How to Prepare for an Economic Slowdown

How to Prepare for an Economic Slowdown

By Denise Hill

Predicting an economic downturn can seem as mystical and convoluted as reading tea leaves. However, the economic tea-leaf readers — financial experts — are warning that the economic winds are changing.

Even though unemployment is still low, there are other economic indicators causing financial analysts to predict lean financial seasons. First, economic growth has all but stalled.

The rate of wage increase has stagnated. The Constant Maturity Treasury (CMT) rates, which are used to measure and predict future interest rates, economic growth, and output, are near flatlining — and threatening inversion. This means that as the economy continues to slow down, consumer interest rates will rise and investment earnings will lose momentum, possibly even losing money.

Preparing for a recession is similar to preparing for a tropical storm: There's no way to predict just how bad things will get, but burying your head in the sand and hoping for the best is a horrible idea. Here are a few things you can do to stormproof your finances against the coming economic slow down.

Beef Up Your Emergency Fund

The first thing you do when prepping for a storm is prepare your home for the onslaught. People in coastal areas board up windows and surround their homes with sandbags. An emergency fund does the same thing financially. It's the added installation and protection that can assist you when the economy dips.

It can't stop the winds, or prevent the rain, and it may not stave off all damage, but it does provide an added layer of protection. And it provides you a fighting chance to preserve what you've worked so hard to build.

The traditional emergency fund is anywhere from three to six months' worth of daily living expenses — and even larger for people with high expenses, large salaries, or a job that would be difficult to replace. During lean economic times, you want to save more than the standard recommended amount.

Under normal circumstances, the average bout of unemployment lasts roughly three to six months. However, experts believe that number is slowly creeping up and could double in a sluggish economy.

It has been suggested that you plan to be unemployed at least one month per every $10,000 you earn. So if you earn $70,000 a year, you should plan for an unemployment that lasts at least seven months.

This formula is a great gauge in helping you determine how much you need in your emergency fund. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

Adjust Your Budget And Pay Down Debt

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

https://www.wisebread.com/how-to-prepare-your-money-for-the-coming-economic-slowdown?ref=relatedbox

The People Who Engineered Record Inflation Want To Control Cryptocurrency

The People Who Engineered Record Inflation Want To Control Cryptocurrency 

Notes From the Field  By Simon Black  October 3, 2022

On the First of May in the year 1716, a swashbuckling Scottish entrepreneur was making this pitch of his lifetime to the head of the French government in Paris.  The entrepreneur’s name was John Law. By all accounts he was incredibly charismatic and had a flamboyant, larger than life personality. He was something like Adam Neumann, formerly of WeWork… the kind of person who could talk anyone into anything.   And John Law’s pitch that day was to launch an entirely new financial system.

King Louis XIV had just died eight months before, leaving France in terrible financial ruin. Decades of endless wars, palaces, and profligate spending had bankrupted the French government.

The situation was so dire, in fact, that there was hardly any gold left in the French treasury. So the new head regent of the government, Duke Philippe II of Orleans, was desperate for a solution.

Law made him a bold proposal: the Duke would provide Law with a special banking license. And in exchange, Law would create a new system of paper money that would bring more gold into France and help pay off the crippling national debt.

Philippe agreed. And, only a few weeks later, John Law’s new Banque Generale Privee was in business.

It turned out that people loved the idea of paper money. And within a year, his paper bank notes were circulating widely throughout the French economy, and the government even accepted them for tax payments.

Law made his paper money even more valuable in late 1717, after he had taken control of the Mississippi Company.

The French Mississippi Company was something like the Dutch East India Company; it was a private enterprise that had received a royal monopoly over all the land and resources in France’s American colonies.

Almost immediately after securing rights to the monopoly, Law offered shares of the Mississippi Company to the public; it was like a giant IPO.

But Law sweetened the deal by allowing people to pay up to 75% of the share price using his bank’s paper money.

The Mississippi Company IPO was a smashing success. It was so popular that Law was offered bribes, sex, and political favors from French nobles in exchange for the opportunity to buy a few extra shares.

The famous philosopher Voltaire was eye witness to this, and wrote, “I myself saw him pass through the galleries of the Palais-Royal followed by dukes and peers, Marshalls of France, bishops of the Church.”

And at first the share price soared. Bear in mind the Mississippi Company had zero activity. Hardly anyone was living in France’s southern colonies in America, and there was virtually no trade or commerce going on.

The government even tried deporting criminals to America, trying to increase the population of the colonies. They offered hundreds of acres of land for free to anyone who would go. Yet economic activity still failed to transpire.

Eventually the French public realized the truth; there would be no gold, no gems, and no riches coming from the Mississippi Company. And the stock price began to quickly collapse.

Law tried to prop up the stock price by creating more paper money (backed by absolutely nothing), and using that new money to buy shares of the Mississippi Company.

But all he ended up doing was creating inflation; with so much new paper money circulating in the economy, prices everywhere rose.

By May 1720, retail prices in France had doubled. It was full-blown hyperinflation, and people panicked. They feverishly began selling off their Mississippi Company shares and trading their paper money, for any real asset they could get their hands on.

One nobleman, Duke Henri-Jacques de Caumont, dumped all of his paper in exchange for a warehouse full of candles. A Parisian merchant sold his in exchange for crates of chocolate and coffee.

(This is one of many examples of history showing that real assets tend to do well in times of inflation.)

Shortly after, Law officially suspended the conversion of his bank notes into gold and silver, and the paper money instantly became worthless.

At the peak of all this insanity, if you can even believe it, the French government made John Law its Comptroller-General.

In other words, the guy who created the biggest financial bubble in French history was put in charge of government finances.

I couldn’t help but think of this story when I watched a group of central bankers talking about cryptocurrency at a conference in Paris last week.

Among others, the heads of the US Federal Reserve and the European Central Bank participated in a panel discussion that, for anyone who actually understands crypto, can only be described as hilarious.

Naturally they started with the old anti-crypto tropes, talking about “the lack of transparency” and how criminals use crypto.

These are completely laughable points. Criminals use iPhones, American Express, and JP Morgan Chase as well. Should we cancel those too?

And as for crypto’s lack of transparency, the opposite is true. Every Bitcoin transaction is traceable on the blockchain for the entire world to see.

Yet with every passing sentence, these bankers demonstrated that they know absolutely nothing about crypto… and quite possibly banking too.

At one point they slammed stablecoins that didn’t have a 1:1 backing; stablecoins are specialized tokens that represent, for example, 1 US dollar per token. So there is supposed to be at least one US dollar in reserve for every token in circulation.

Lately there have been a handful of high profile stable coins that didn’t have sufficient reserves. So their criticism is fair.

But this leads to an obvious question: if a 1 to 1 reserve standard for stable coins is so critical, why don’t we demand the same of our banking system?

Central Banks are among the most prominent regulators in banking. And they have completely condoned a fractional reserve system whereby commercial banks are only required to keep 10% (or less) in reserve.

In other words, these people are perfectly fine that commercial banks gamble most of their customers’ money on the latest investment fad of the day.

It’s fine to be outraged when a few stablecoins aren’t 100% reserved. But they should be equally outraged that commercial banks aren’t even 10% reserved.

The biggest laughs, though, took place when these central bankers started talking about rolling out their own digital currencies.

The Fed wants to create a DollarCoin. And the European Central Bank wants a EuroToken.

This is truly rolling on the floor, laugh out loud funny given that these people have no clue about technology.

The Federal Reserve’s most important payment system, FedACH, which processes over 50 million transactions per day, still takes 2-3 days for payments to clear. It’s so outdated, it’s as if they’re still sending satchels full of cash via Pony Express.

It’s also ridiculous that the people who have failed in every possible aspect of their responsibility think that they’re qualified to administer a brand new financial system.

These Central Banks failed to anticipate inflation. They failed to recognize it. They failed to do anything about it for more than a year. And now they’re hellbent on causing a recession.

They’ve pretty much been a complete disaster. Yet now they want to be in charge of crypto too. Are these people serious??

To me this is really one of the great benefits of crypto, and of real assets. Holding paper money is ultimately a vote in favor of central bankers, an expression of confidence that they know what they’re doing.

Personally I have little confidence in these people. And that’s why I think it makes sense to hold other types of assets that they don’t control, including real assets (real estate, commodities, productive businesses, etc.) and decentralized crypto assets.

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

The people who engineered record inflation want to control cryptocurrency | Sovereign Research

A Masterclass In ‘How To Shoot Yourself In The Foot’

A Masterclass In ‘How To Shoot Yourself In The Foot’

Notes From the Field By Simon Black  October 7, 2022

In the mid 1400s, the head of the Byzantine Empire was a career politician with decades of experience who most people thought would be a capable leader.  Instead, through a series of hilariously terrible decisions, he managed to take his already weak empire off the cliff, and into the dustbin of history, in just a few short years.

And one of the ways he did that was by deliberately giving up the most strategic resource his empire possessed.

We’re seeing a similar story play out today-- the people with decades and decades of experience are doing all the wrong things to vanquish one of the most strategic resources in our modern world: energy.

Think about it-- the people in charge have demonized an entire industry. They punish oil companies with creative taxes and insane regulations. They refuse to follow the law and lease federal lands to oil and gas companies. They drag their feet in the permitting process.

They constantly antagonize energy companies and blame high fuel prices on the industry’s “greed”.

In short they do everything they can to destroy a critical resource that the nation depends on for growth and prosperity.

This is our topic for today’s podcast. We start off walking through the comical incompetence of Emperor Constantine XI from the Byzantine Empire… and then go through some key issues to know about in the oil and gas sector.

In short, supply is tight… and probably not getting better. Demand is increasing. It’s a really important trend to understand.

But we leave with some good news. This is fixable, both long-term and short-term. But the short-term fix is going to rely on a few surprising characters from our past that may become some of the most exciting economies in the world.

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

https://www.sovereignman.com/podcast/a-masterclass-in-how-to-shoot-yourself-in-the-foot-37789/

15.7 Trillion New Reasons To Be Concerned About The National Debt

15.7 Trillion New Reasons To Be Concerned About The National Debt 

Notes From the Field By Simon Black  October 4, 2022

Last Friday, September 30th 2022 was the close of the Fiscal Year for the US federal government.  If you’re not familiar with the term, the ‘Fiscal Year’ refers to the government’s official accounting period. It starts on October 1st and ends the following September 30th. And everything from the federal budget to the Supreme Court’s case schedule is based around the Fiscal Year.

So are calculations for the national debt.  And based on the figures just released, the US national debt has now reached nearly $31 trillion as of the close of the Fiscal Year last Friday.

(If you want to see the number down to the penny, it’s $30,928,911,613,306.73)

At the start of the Fiscal Year back on October 1, 2021, the national debt was $28.4 trillion. So over the course of the past twelve months, the debt increased by a whopping $2.5 trillion.

That’s the second highest annual increase in the US national debt EVER, after the $4.2 trillion increase in the 2019-2020 Fiscal Year during the pandemic.

Now, a $2.5 trillion increase in the national debt is terrible, and alarm bells should be sounding from coast to coast. But there’s actually something more worrisome going on with the debt.

Remember that whenever governments borrow money, they do so by issuing some form of government bond. A bond, just like a loan, is a type of IOU. One of the key differences, however, is that a bond is a financial security that, just like stocks, can be easily bought and sold by investors around the world.

US government bonds are referred to as Treasury securities; so when we say that the national debt is $31 trillion, this means that the US government has $31 trillion in various Treasury securities outstanding.

Treasury securities are issued with specific maturities; similar to how a bank could issue a mortgage with a 30-year, 20-year, or 15-year term, the government issues bonds with varying maturities, ranging from 4 weeks all the way up to 30 years.

And once the bond matures, whether that be after 4 weeks or 30 years, it needs to be repaid.

This is the worrisome part. Because out of all the bonds that the US government has issued, the weighted average maturity is about FIVE years.

This is a REALLY short average maturity for government bonds.

To put this in context, the average maturity for Japanese government bonds is more than 9 years. For German government bonds it’s more than 13 years. In the UK it’s about 15 years.

But, again, in the US, it’s just 5 years. And this means that, every year, approximately 20% (one-fifth) of US government bonds will mature and need to be repaid.

It’s actually worse than that; due to various complexities in Treasury issuance, the actual amount of bonds that need to be repaid is much higher.

Based on data that was just released yesterday, in fact, the US federal government repaid $15.7 trillion worth of bonds in the most recent Fiscal Year.

You might be wondering– how on earth did they come up with that much money? Easy. They just issued more debt.

In a way it’s like the government is paying off its credit card by transferring the balance to another credit card. So whenever a bunch of bonds mature and need to be repaid, the Treasury Department simply issues more bonds (i.e. debt).

By doing this, the “net” debt hasn’t changed; they pay off X amount of debt by issuing X amount of new debt.

This worked just fine as long as interest rates remained at record lows. But now rates are rising rapidly.

Here’s a startling example: on October 27, 2020, the Treasury department issued around $50 billion worth of 2-year Treasury Notes at a yield of just 0.12%.

Well, now it’s two years later, and those 2-year Treasury Notes are about to mature. So the government is going to have to issue a new $50 billion batch of bonds to pay off the maturing debt.

The problem is that interest rates have risen a LOT since 2020. The 2-year Treasury yield is now 4.2%, and rising. In other words, the new $50 billion issuance will cost the government an additional $2 billion per year in interest ($50 billion x 4%).

Now imagine this problem for the ENTIRE $31 trillion national debt.

Rates are already, on average, around 3-4% higher than they were a few years ago. And if the average interest rate on the national debt increases by just 3%, that means the government will owe an EXTRA $1 trillion per year, just in INTEREST.

In case you’re wondering, total interest in the Fiscal Year that just ended last Friday is an unbelievable $706 BILLION. If rates keep rising, annual interest payments could increase to nearly $2 trillion.

This is an inconceivable figure that would bankrupt the federal government.

Now, there are some people who dismiss this concern because a portion of the interest is paid to other departments of government. They claim the debt, and interest expense, are no big deal because “we owe it to ourselves.”

This is partially true; the Defense Department buys some Treasury securities to earn a bit of interest on their excess cash. The Social Security and Medicare Trust Funds own nearly $3 trillion of US government bonds and receive interest payments.

But this shouldn’t be relevant. Interest is interest. Money owed is money owed. Regardless of to whom it is paid.

It’s ludicrous to pretend like we shouldn’t count certain interest simply because it’s being paid to Social Security beneficiaries.

Bottom line, this is an EXTREMELY precarious situation. The US national debt is so high… and the average debt maturity is so short… that significant rate increases risk pushing the federal government towards default.

You’d think that the Treasury Department would be doing everything it can to extend their average bond maturity, and increase it from five years to, say, ten years. That would at least make a dent in the problem.

Or that Congress and the White House would get their fiscal house in order and start balancing the budget.

But no. Not these people. In fact the Treasury Secretary has specifically stated that she does not want to extend maturities. And the White House is too busy forgiving student debt to even think about balancing the budget.

This is a real crisis brewing. And the people in charge are deliberately ignoring it.

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

https://www.sovereignman.com/trends/15-7-trillion-new-reasons-to-be-concerned-about-the-national-debt-37716/

Becoming Financially Secure: What to Do First

Becoming Financially Secure: What to Do First   By Philip Brewer

Standard financial advice is full of things to do first — emergency fund, 401(k), pay off debts, start investing, stockpile emergency supplies. What really comes first? (See also: Be In Charge of Your Finances)

Because everybody's circumstances are different, there's no one true answer that applies to everyone. Instead, the right way to approach this problem is with a mental model — a way to think about these issues that can guide you to coming up with the right answer for your particular circumstances. Here's my stab at one.

First, Stop the Penalties

Probably the most expensive mistake you can make with your finances is to find yourself paying penalties for screw ups. I'm talking about things like:

    Late fees

    Overdraft fees

    Disconnect/reconnect fees for utilities

    Penalty interest rates

If you have any accounts that are racking up penalties, that's the first thing to take care of. All your spare money should go there. Engage in some emergency belt tightening, if necessary, to free up some cash. In this one case, it might even be worth going further into debt to cure this sort of problem. (It depends on the interest rates you have to pay. For example, interest rates on a payday loans are often so high that you're better off just paying the penalty rate on your credit card.)

Second, Make Things Safe

You can prevent most of those most horrible problems with a very small emergency fund, one just big enough to smooth over glitches.

My suggestion for a minimal emergency fund is roughly the size of your biggest single bill — maybe your rent payment or mortgage payment.

Of course a small emergency fund like this doesn't provide much protection if there's a real emergency — you lose your job or have a large expense not covered by insurance. Where it helps is when something goes very briefly awry.

Suppose your payment to your insurance company goes astray and you need to write a new check today or else your insurance will be canceled. The problem will be sorted out soon enough — either the check will be permanently missing and you can just stop payment, or else it will turn up and the insurance company will refund you the overpayment. But right now you need a little cash to keep your insurance from being canceled.

A small pool of available cash like that is almost immediately self-funding, covered by the late/overdraft fees avoided.

A very similar move is to stockpile some staples in your pantry. When I was younger and my finances were out of control, I'd sometimes find myself buying an expensive meal at a nice restaurant because I was out of money. (In those days, grocery stores and cheap restaurants didn't take credit cards, but expensive restaurants did.) Have enough food on hand that you can always prepare a meal.

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

https://www.wisebread.com/becoming-financially-secure-what-to-do-first

“The Most Impressive Failure Of His Time”

“The Most Impressive Failure Of His Time”

Notes From the Field By Simon Black  September 30, 2022

Lately we’ve been led astray over and over again by supposed ‘experts’ with decades of experience who can’t seem to stop making colossal mistakes.  But I’m not just talking about individuals. I’m talking about institutions too.

And one institution in particular that’s been an abject failure lately has been the central bank. That includes the Federal Reserve in the United States, the Bank of England in the UK, and more.

The Federal Reserve, for example, despite its leaders’ decades of experience, completely failed to predict that their policies over the past few years would have any consequences. It’s extraordinary.

These people honestly thought that they could print trillions of dollars, keep interest rates at 0%, and that there would never be any consequences until the end of time.

And then, when inflation began to take hold last year, they failed to recognize it. They chastised people who pointed it out.

Later, when they finally did acknowledge inflation, they insisted it was transitory. And then when they ‘retired’ the term transitory, they promised to do something about the growing inflation problem… eventually.

Finally, in March 2022, they made a very ceremonial 0.25% interest rate increase. File that away under “too little, too late”.

But now their tune has changed. Now their policies smack of panic and desperation, and they sound like they’re running around with their hair on fire with no clue what to do next.

It hardly inspires confidence.

Earlier this week we saw another example.

The Bank of England made a stunning announcement that they would step in to prop up their rapidly-declining bond market. Investors around the world cheered the news, and global financial markets surged.

The euphoria lasted about 24 hours.

The next day, markets tanked again as investors realized, “Hang on… I don’t believe these people.”

Central banks have enjoyed unparalleled respect and gravitas for the past 30 years; going back to Alan Greenspan in the 1990s, central bankers have been viewed as infallible superheroes who always know what to do.

Now they just look like a bunch of amateurs.

In today’s podcast, I walk through my analysis about what might happen next. Specifically, I argue why I think there’s NO WAY they’ll follow through on their interest rate increases. Simply put, continuing to do so will bankrupt their governments.

Ultimately this means that inflation, at least some inflation, is here to stay. And I also discuss a couple of key asset classes, plus one surprising country, that can do well in this mess.

Click here to listen.

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

https://www.sovereignman.com/podcast/the-most-impressive-failure-of-his-time-37685/

The Best Way Americans Can Legally Reduce Taxes... Without Moving

The Best Way Americans Can Legally Reduce Taxes... Without Moving

Notes From the Field By Simon Black  September 26, 2022

Legally reducing your tax bill is the best risk-free return on investment you can make.  Investing in a completely legal tax strategy means keeping 10, 20, even 30% more of your own income.  And in many cases the solutions aren’t especially exotic. For example, if you live in California, you can slash you taxes simply by moving next door to Nevada. Doing so eliminates California state income tax, which kicks in at 9.3% for income over $61,215.

Moving even further, from Nevada to Puerto Rico, means eliminating not only state income tax, but also US federal income tax.

Puerto Rico’s tax incentives allow you to pay absolutely zero US federal tax. Instead you’ll pay a low 4% tax rate on qualifying business income, and 0% capital gains tax on qualifying investment income.

Or you could move overseas and take advantage of the Foreign Earned Income Exclusion, which, in 2022, allows Americans living abroad to earn up to $224,000 (if you’re married) without being taxed by the federal government.

But for many people, moving is simply not possible— due to family, work, or other factors.

Luckily, there is another powerful tax reduction strategy that does not require a change of location: tax advantaged retirement accounts.

First, you can reduce your taxable income significantly by making pre-tax contributions to a Traditional 401(k) retirement account.

In 2022, you can reduce your taxable income up to $20,500 by contributing that amount to your 401(k). And if you’re 50 or older, you can contribute $6,500 more as a “catch up” contribution – for a total of $27,000 per year.

This means that your taxable income decreases by $27,000, potentially saving you thousands of dollars in taxes.

It’s worth noting that setting up a 401(k) is pretty inexpensive. So this strategy yields an extremely high return on investment, with the added benefit that you’re saving more for retirement.

People who are self-employed, or earn income from a side business, can increase that tax-free contribution even more by using a Solo 401(k).

This option applies to business owners without any employees, anyone who is self-employed, and even those who just earn a bit of income on the side— consulting, selling on eBay, driving for a rideshare service, or renting rooms on Airbnb for example.

In this case, your total tax-free contribution limit for 2022 rises to $61,000 (or $67,500 for those 50 or older).

And there are other benefits to using a self-directed Solo 401(k).

Most typical, employer-sponsored retirement accounts offer you a very limited range of investment options.

But with a self-directed Solo 401(k), you are able to invest in a much wider range of assets, including real estate, foreign investments, private equity, and more.

Eventually, you still have to pay taxes on the money you put into retirement accounts. Generally, this happens when you take money out of the 401(k) once you’re retired.

But since most people’s smaller retirement income puts them in a lower tax bracket, the overall tax burden is low.

I cannot overstate how beneficial it is to take steps to reduce your taxes. And here’s a simple example.

Let’s assume you have $50,000 of income each year to invest. If you did not set up a tax-advantaged retirement account, and simply invest that money through your personal brokerage account, you would owe, say, 20% tax on it first.

So realistically you’d be left with $40,000 per year to invest.

Assuming you average 12% per year, after 25 years, that original $40,000 would be worth about $680,000. That’s a pretty great return.

But now let’s imagine, instead, you put the money in your Solo 401(k). In that case, the money is tax-deferred, so there is no up-front tax. You can invest the ENTIRE $50,000.

Assuming the same return— 12% per year, after 25 years, the original $50,000 invested would be worth $850,000.

In short, you saved $10,000 in up-front taxes because you invested through a Solo 401(k). And that $10,000 tax deferral resulted in an extra $170,000 investment return.

So you can see how powerful this strategy can be.

Remember, this isn’t some exotic tax loophole that’s only available to the rich and powerful. This is a completely legitimate retirement structure that has been enshrined into law for more than 50 years.

The government wants you to save for retirement. Hell, the government needs you to save for retirement. They know Social Security is running out of money, so they’ve made it as lucrative and compelling as possible for you to set aside your own money for retirement.

There are so many options available, and these types of structures are definitely worth considering and learning more about.

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

https://www.sovereignman.com/international-diversification-strategies/the-best-way-americans-can-legally-reduce-taxes-without-moving-37659/