Money – We Need To Talk About It

Money – We Need To Talk About It

December 4, 2019 By Machinist

Let’s talk about money.

There are few things that people avoid talking about more than money, yet we probably spend most of our time in pursuit of money.  We could all benefit from a better understanding of it, but sadly, we are mostly left to find our own way with money. We rarely even have the chance to learn from other’s experience, so we are bound to repeat the same mistakes.

I get it; there are some good reasons not to talk about money.  We think that letting people know how much money we have or how much we earn will complicate our relationships and interactions. 

Strangely, even though we don’t want people to know our financial situation, most people spend a lot of time and effort trying to appear as though they have more money than they actually do.

 I’m not sure how this deception makes interactions any more comfortable.  Maybe people inflate their perceived financial status in an effort to avoid having to interact with people of their own income level.

Silence On Money Causes Problems

Because people are so unfamiliar with money topics, just living normal lives inevitably leads them into financial conflict which they are unprepared to resolve.  The inability to identify and avoid financial snares and navigate out of mistakes causes crisis situations for many individuals and for society in general.  For example:

The Student Loan Crisis

Most kids receive almost no instruction about money at school or home.  They enter college with a poor understanding of its costs.  They are ignorant of the burden a student loan will be – possibly delaying the major milestones of adult life for decades. 

Most kids choose their college based on factors of prestige or fun but may not consider which institution will provide the best value for their money or the best employment opportunities upon graduation. 

Most entering freshman have not chosen a major, so they spend valuable time and money “exploring their options” before buckling down.  They often realize that their initial school choice was a poor one, so they decide to transfer.  All of this leads to more years spent in college and greater expenses. 

In addition, many kids aren’t even aware of options other than college.  For all of these reasons and more our educational system is failing students and the student loan situation has reached crisis level.

Money and Divorce

Because most people participate so rarely in discussions about money during their youth, they don’t develop the skills to talk about money – let alone use it effectively.  It should come as no surprise then, that when people join their finances with a partner, they struggle to communicate about money differences.  Is it any wonder that money is a leading cause of divorce?

The Retirement Crisis

It used to be that people were forced by reality to plan for how they would support themselves in old age or in case of disability.  They may have built a farm or business, acquired rental property, or just had plenty of kids.  These long-term planning skills were lost after a generation or two where everyone had an employer-provided pension and government-provided social safety net.  Now that employer-provided pensions have mostly disappeared, we have a crisis of under-prepared retirees and unsustainable social security system.

We Should All Make Money A More Open Topic

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

https://perpetualmoneymachine.org/money-we-need-to-talk/

Americans More Worried About Running Out Of Money Than Dying

Americans More Worried About Running Out Of Money Than Dying

Conventional retirement plans Retirement Consideration Top 10 Countries In Terms Of Retirement Worry

By: Jacob Wolinsky Mar 6, 2020

Did you know that 58% of people worry about running out of money in retirement – compared to only 20% who are worried about dying! For April, Stress Awareness Month, financial security expert Pamela Yellen, a two-time New York Times best-selling author, discusses:

People With Savings In Conventional Retirement Plans Are Worried

When it comes to Americans’ top worries, 72% report feeling stressed about money, and nearly 22% say they experience extreme stress about their finances, according to the American Psychological Association. Financial stress is closely linked to health issues including anxiety, depression, insomnia and more, Pamela notes.

One big reason is inadequate retirement savings. And people who have their retirement savings in 401(k), IRA, and other conventional retirement plans face the constant worry their money will evaporate in the event of another stock market crash.

“Life is stressful enough on its own,” Pamela says in her new book, "Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs and Roth Plans - and How to Avoid Them.” “Do we really need to add the stress of worrying about what might happen to the money we’ve worked so hard to earn?”

Three Steps For a Stress-Free Retirement

Build a healthy, liquid Rainy Day Fund - "Without a sizeable liquid rainy day fund, you may be forced into selling or liquidating your nest egg assets prematurely - the investments you planned on keeping over the long haul," Pamela says. "When this happens, the timing is often terrible. You're at the mercy of current market conditions and forced to sell at the worst possible time.”

Make sure a large portion of your retirement savings is in assets that are secure, guaranteed, and liquid. These savings should give you control over your future, rather than being subject to the whims of the government or markets.

Know the value of your retirement account(s). “While conventional retirement plans such as IRAs and 401(k)s offer no guarantees, there are strategies that allow people to know the minimum guaranteed value of their savings on the day they retire, and at any point along the way.”

“The answer to this question will determine whether you live out your golden years in financial security, or face the constant stress and worry of trying make ends meet,” Pamela says.

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

https://www.valuewalk.com/2020/03/conventional-retirement-plans/

Decades-Old Investment Wisdom From Albert Einstein

Decades-Old Investment Wisdom From Albert Einstein

Notes From The Field By Simon Black 

March 3, 2020 Bahia Beach, Puerto Rico

Albert Einstein is rumored to have said that “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

These days interest rates are near zero. The average savings account currently pays .09% interest per year, according to the FDIC.

So over the course of a decade, saving $100 with compound interest would give you a grand total of $109.37.

But at the same time, the opposite force is working against us. Inflation currently stands around 2.5%. And that compounds too.

What $100 can buy now will cost $102.50 next year. After ten years, assuming inflation stays the same, it will cost $128.

So just by saving $100 for ten years, you’ve lost $18.63 of real value.

That’s why these days, you have to invest to make money. Luckily stocks, real estate and pretty much every asset class is close to all time highs right now.

But last week's “coronavirus drop” is a good reminder that it’s not going to last forever.

If you have substantial unrealized capital gains, and you’re looking for an exit strategy, there is one available right now. It allows you to compound your current gains for almost six years before paying capital gains tax.

I’m talking about Opportunity Zones. These were created by Trump’s tax reform law to reward investors who fund projects in distressed areas.

One of the major benefits of investing in an Opportunity Zone is the chance to compound your gains BEFORE you pay taxes on them.

For instance, if you bought $100,000 worth of stocks that are now worth $200,000 you have $100,000 worth of capital gains. At current tax rates, you could owe as much as $23,800.

But by investing those $100,000 of gains in an Opportunity Zone, you can defer paying those taxes until 2026. That means the $23,800 that would have gone to taxes instead grows from the new investment.

Let’s say that the new investment increases in value by 10% each year. When the time comes to pay the capital gains taxes on the original investment, you will have earned an EXTRA $18,363 just from deferring taxes.

In addition, after holding the Opportunity Zone investment for several years, you’ll finally pay tax on your original capital gain, but at a discounted rate. (Technically they call this a ‘step-up in basis’, so instead of being taxed on $100,000 you are taxed on a gain of $90,000.)

This can save you even more money.

But there is yet another major tax benefit of Opportunity Zones.

If you keep your funds in the Opportunity Zone for ten years, you’ll NEVER pay tax on the capital gains from your Opportunity Zone investment.

So to continue our example, say that after ten years, your $100,000 Opportunity Zone investment has compounded into $259,374-- a total capital gain of $159,374. Your total capital gains tax bill will be ZERO.

Remember, ALL capital gains are eliminated on Opportunity Zone investments held for at least 10 years. So if you invest in the next Facebook and turn $100,000 into $100 million you still owe ZERO capital gains taxes on that $99,900,000 gain.

But like most good things, this won’t last forever.

And some of the benefits have already expired.

For instance, you could have had a 15% step-up in basis on your original capital gains (i.e. only paid tax on $85,000 instead of $100,000).

But you had to hold the Opportunity Zone investment for seven years. And with the deadline to pay the original capital gains set at the end of 2026, it is too late to hold the investment for seven years.

But you can still get the discount of 10% by holding for five years, as long as you get into an Opportunity Zone by the end of 2021.

It’s worth looking into. And a good place to start is our new in-depth article: Opportunity Zones: Ultimate Guide and My Personal Experience.

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

 https://www.sovereignman.com/international-diversification-strategies/decades-old-investment-wisdom-from-albert-einstein-27401/

The Curse of a High Income

The Curse of a High Income

February 20, 2020 By Machinist

The Income Curse

Regardless of income level, the vast majority of people spend very nearly everything they earn, if not more.  Most people know that living paycheck-to-paycheck is a problem.  What they may not realize is that the higher their income, the bigger this problem actually is.  Common sense tells us that more income is always better, but that’s not always true.  If you have a high income and are spending it all, then you might be in serious trouble with limited options.

Consider the following scenario and think about who is financially more secure?  Who is wealthier?

Introducing Bob and Bill

Bob earns a salary of $50k per year.  He owns his 10-year-old Toyota Camry outright, makes the mortgage payment on his comfortable home, and is still able to save $5k each year in his 401(k) account.

Bill earns $250k per year and leases a new Land Rover every two years.  He lives in a very nice house with a pool and a beautifully landscaped yard.  Bill is also saving $5k per year toward retirement.

Bob and Bill both consider themselves responsible personal financiers.  Neither one has any credit card debt and both are careful to keep some money saved for unexpected expenses.  In fact, Bob has $10k in the bank, and Bill has $20k.

o, who is doing better financially?  Obviously, Bill’s and Bob’s kids know who is richer.  It’s not even close.  They all prefer to play over at Bill’s house.  Bob’s kids complain about having to mow the lawn, and whine about why they can’t have somebody take care of it like Bill does.

Everyone knows Bill is richer than Bob, but everyone is wrong, as they are about to find out.

What Lies Beneath

By all outward appearances, Bill is absolutely prospering, keeping his expenses in check, and even securing his future, but the car, the pool, the house and the fancy life are obscuring a ticking financial time bomb which explodes with surprising devastation as recession hits causing both Bob and Bill to lose their jobs.

Bob is disappointed to lose his income, but he figures that if he cuts the cable and his cell phone and all restaurant meals, he can cover his mortgage, utilities, and groceries for four months.  While he’s looking for a new job, he takes on some odd jobs around town.  In this way he is able to make his savings last for 6 months.

Bill is also bummed about losing his job, but within days he has started to panic.  He realizes that his $20k savings will last little more than a month at his current burn rate.  Even after cancelling his kids camps and sports and the bouncy house for Billy’s birthday party, he’ll be flat broke within two months.

Luckily the gardener lets bill out of his contract without a penalty, but now Bill has to figure out how to maintain his yard all by himself.  Things don’t go as well with the Land Rover dealership.  They let him return the car, because that’s easier than sending out the repo man next month, but they also charge Bill $10k for early lease termination.  Bill decides to just let that go to collections for now, because he has a bigger problem.  He kind of needs a car to look for a job, but he also needs to hold onto as much of his cash as he can.  Maybe Bob will let him borrow the Camry.

So, who was really wealthier?  Who was financially more secure?

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

https://perpetualmoneymachine.org/curse-of-a-high-income/

7 Common Money Conflicts in Marriage and How to Solve Them

7 Common Money Conflicts in Marriage and How to Solve Them

By Eileen Ambrose, Senior Editor

From Kiplinger's Personal Finance

 You and your spouse probably have different approaches to finances, but you can still live financially happy ever after.

 The McClanahans had to step up their communication and teamwork to overcome their debt problems.

 Aja and Kelvin McClanahan got married in 2004 knowing that each brought debt to the union. But they didn’t talk numbers before the wedding, and when they added it all up later, the Chicago newlyweds had a shock: Together they owed $60,000, most of it in the form of student loans.

 Then, when the couple had a child within the first year of marriage and Aja wanted to stay home with their newborn, she launched her own business—a translation agency—using credit cards to finance start-up costs. The idea didn’t pan out, and she wound up with another $20,000 in debt.

The couple later added $10,000 to their credit card balances and borrowed $30,000 to buy an SUV. “That was a bumpy start to our marriage,” says Aja, now a freelance writer who blogs about money issues.

Aja says it took years for her and Kelvin, a letter carrier, to chop away at the debt because they didn’t always agree about what to do with their money. But eventually, getting out of debt became their top priority, and by 2013 they were debt-free. (So many people asked the couple how they did it that Aja launched her blog not long afterward.)

The McClanahans discovered another benefit of working through their debt: Retiring their loans governed so many conversations, such as whether to go shopping or take a vacation, Aja says, that “it forced us to have those conversations every day. It did not develop into a perfect system, but it helped with our teamwork.”

Managing money is complicated and fraught with emotion, so it’s natural that conflicts will erupt. To find solutions, communication and teamwork are key. If more couples have regular conversations about money issues before and after walking down the aisle, more marriages may last, says Jamie Slaughter, a certified financial planner in Colorado Springs.

If you are married—or thinking about getting hitched—see whether you are at odds on any of these money issues. It will go a long way toward improving your relationship.

 1. Different Money Styles

Opposites attract, and that’s especially true when it comes to dealing with money. Even if both partners start off their relationship with similar ways of handling money, over time they will become opposites, says Olivia Mellan, author of Money Harmony.

For instance, if two spenders marry, eventually one will become a saver relative to the other, she says. “Otherwise, they end up bankrupt in four minutes.”

 Mellan, a therapist for 42 years, has identified six categories of money opposites: The spender and the saver or hoarder. The money avoider and the money worrier. The risk taker and the risk avoider. The money merger (who wants to combine all the finances) and the money separatist.

The planner (who digs into the nitty-gritty details) and the dreamer (who has a grand vision but no idea how to get there). The partner who thinks money is corrupting and the money amasser who believes that the person who dies with the most money wins.

Opposite styles often lead to friction, which is why money is consistently one of the top two causes of marital conflict, Mellan says. Spouses need to learn to empathize with each other by walking in the other person’s shoes.

 She recommends an exercise in which each spouse adopts the other’s money style for at least six weeks. So the spender, say, would save money while the hoarder would open the purse strings. This will move them closer to each other’s style—or at least give each a better understanding of the other’s viewpoint.

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

https://www.kiplinger.com/article/saving/T065-C000-S002-common-money-conflicts-in-marriage-how-to-solve.html

Quiet Wealth: An Asset Protection Strategy

Quiet Wealth: An Asset Protection Strategy

Time is Money:  An Asset Protection Strategy

Diversified Investments

I’ve never worn a watch. I flatter myself that’s because of a high school Latin teacher/lacrosse coach named Thurber who, when asked why he didn’t, responded that “a man who wears a watch worries too much about time.”

That quote has always stuck with me. Its philosophical brevity is almost Hellenic.

My real reason for going watch-less is simpler, however. I have a hard enough time keeping track of my keys, wallet, eyeglasses and anything else I need during my daily journey to worry about a watch as well.

In fact, I’m pretty sure the only watch I ever owned was one that had belonged to my grandfather, that my Dad gave me when I was about 5 — what was he thinking? — that I promptly dropped and broke.

My relationship with timepieces, in other words, is Thurberesque in another way entirely.

But there are people for whom watches are an asset protection strategy

Last week in Lausanne, Switzerland, auction house Phillips sold 164 watches by makers such as Rolex, Patek Phillippe, Longines and Piaget. All were from the 20th century, the oldest from the ‘20s, but many made as recently as the 1990s.

The sale prices impressed me for two reasons. First, who knew that someone would deem a simple wristwatch to be worth almost $5 million? Apparently someone does. A 1927 Patek Philippe Stainless Steel Model 130 fetched that much. There were several $1 million-plus items as well, and dozens made it into six figures.

The second thing that struck me about the auction results was that in almost every case, the sale price significantly exceeded the pre-auction estimate, sometimes significantly.

The lucky seller of the 1927 Patek Philippe doubled his or her hoped-for gains, whilst the prior owner of a 1969 Piaget Montre-Manchette 9850 in 18-carat yellow gold got five times what Phillips thought he or she would.

I’m no expert on watches, but clearly, there’s more to these things than telling the time.

The values reflected in the Phillips auction derive from a combination of outstanding craftsmanship, rarity, and an artistic je ne sais quoi that watch aficionados must surely understand.

The 1931 Longines Lindbergh Hour Angle in silver, to the right, is clearly a gorgeous example of human creativity.

Quiet Wealth: An Asset Protection Strategy

My colleagues and I often refer to items like these watches as “quiet wealth” — an asset protection strategy quite unlike conventional stocks, bonds, metals and other financial instruments.

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

https://www.valuewalk.com/2015/05/quiet-wealth/

Negative Interest Rates In The US Are Virtually Guaranteed Now

Negative Interest Rates In The US Are Virtually Guaranteed Now

Notes From The Field By Simon Black 

March 4, 2020 Bahia Beach, Puerto Rico

On October 19, 1987, the US stock market suffered the worst crash in its more than 200 year history, dropping more than 23% in a matter of hours.

It wasn’t just in the United States, either. More than 20 major stock markets around the world, from London to Hong Kong to Australia, fell by similar amounts.

And economists estimate that stocks worldwide lost roughly $1.7 trillion of value (approximately 10% of global GDP at the time) during the October 1987 crash.

The next morning on October 20th, the Federal Reserve announced that they would do whatever it takes to support the economy.

And ten days later they cut interest rates by 0.5%.

Yesterday the Federal Reserve did the same thing. Stock markets worldwide have been jittery lately due to Corona Virus fears, so the Federal Reserve stepped in and cut interest rates by 0.5%.

Honestly there are so many things that are remarkable about this—

First, the Fed already has a regularly scheduled meeting coming up in two weeks on March 17th. But apparently they thought the situation was so severe that they held an emergency meeting yesterday and hastily voted to cut interest rates by 0.5%.

Just think about what that means: 30+ years ago, the Fed cut rates by half a percent after, literally, the worst day in the history of the stock market.

Today’s stock market turmoil is nowhere near as bad as it was in 1987. Sure, the market is down around 10% over the past two weeks. But where is the law that says the stock market isn’t allowed to fall? Capitalism is all about risk and reward. There are supposed to be periods of decline.

But to the Fed, a 10% correction is catastrophic… SOOOOO catastrophic, in fact, that they couldn’t even wait two more weeks for their regularly scheduled meeting. They had to take immediate action to prop up the stock market.

Ironically, this interest rate cut caused investors to panic even more. After the Fed made its announcement, the Dow Jones Industrial Average plummeted another 800 points.

It’s as if the entire market collectively thought, “Holy cow, if the Fed is taking EMERGENCY action, things must be even worse than we thought.” So the rate cut had the opposite effect as intended.

The Fed also managed to confuse the hell out of everyone… which is something they’ve been doing a lot of lately.

Last year, for example, even when they insisted that the US economy was booming and the unemployment rate was at a record low, they still cut rates by 0.75%... which is typically something they would only do when there’s economic weakness.

And then, yesterday at 10am, the Fed announced that “the fundamentals of the US economy remain strong. . .” But just an hour later they changed their tune and said, “risks to the US outlook have changed materially.”

Go figure, the market tanked even more.

Perhaps most comical is that the entire episode was forgotten by this morning… and the only story that seems to be driving the market is the resurrection of Joe Biden.

So the Fed basically blew a 0.50% rate cut and has absolutely nothing to show for it.

Here’s why that matters—

In the crash of 1987 when the Fed cut interest rates, its benchmark rate was 7.25%. So a half-percent cut was not especially significant.

In 2000 when the US economy entered recession (and the stock market started to fall from its peak), the Fed’s benchmark rate was 6.5%. So they had plenty of room to cut rates.

In 2007 when the US economy entered recession yet again (and the stock market started to fall from its peak), the Fed’s benchmark rate was 5.25%-- still plenty of room to cut rates.

But as of yesterday morning, the Fed’s benchmark interest was just 1.75%. So a 0.5% cut is pretty huge. Do the math-- they cut interest rates by nearly a third, down to 1.25%.

This gives them VERY little room to cut rates further when the US economy enters recession, virtually guaranteeing that interest rates in the Land of the Free will go negative.

Remember that, in a typical recession, the Fed cuts interest rates by an average of 5%.

Rates right now are only 1.25%... so we could easily see rates at MINUS 3 to 4%.

Just imagine paying money to deposit your savings at the bank (Wells Fargo will have so much fun), or being paid to borrow money…

That is now a very likely possibility in the most advanced economy in the world.

I probably don’t have to tell you this, but negative interest rates will almost certainly be very positive for gold prices, and gold-related investments.

More on that soon… because this emotional roller coaster is far from over.

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

https://www.sovereignman.com/trends/negative-interest-rates-in-the-us-are-virtually-guaranteed-now-27405/

Great Depression 2.0

Great Depression 2.0

The Final Wake Up Call By Peter B Meyer

Applied Market Interventions Are A Distortion

Recent Economic History The World Went Through

Debt Based Spending Doesn’t Increase Wealth

Global Wto-Trade About To Collapse

The Brand New People’s Economy

 The Necessity Of A Free Market For Each Individual Economic Actor

An economy is geared to produce for real demand. But for decades it has been misled by artificially low interest rates to produce for a level of demand that doesn’t in reality exist. This deception can go on for a very long time. But, eventually, some form of adjustment must take place – usually a recession restores order by reducing both production and consumption. If it goes on for too long, or to a too great an extent, as it did in Germany in the late ’20s, economic activity becomes disorganised, which actually started The Great Depression 1.0.

The stimulus is working, they said. The problem is not that anyone believes this, but just that everyone believes in it. It is duped group thinking on a massive scale. Markets are not mathematical, nor mechanical; they’re ethical. Their purpose is not to make people wealthy, but to make them wise. If they purely were mathematical, one would be able to anticipate price movements with computers and PhDs in math. Many have tried it, but so far as known none has ever really succeeded.

It’s not a mechanical system either. When prices go down, there are no levers that can be pulled, or injectors that can be activated. It’s not that simple. Instead, markets are complex natural systems they can never really be controlled or predicted. Markets are always teaching or correcting something. To eventually find their natural equilibrium. Those are the moral lessons in the broadest sense.

The purpose of a bear market, like the 2007/8 is to correct the errors of the preceding boom called bull market of before Aug. 2007. Most prominent among those errors is to think that money can be made by speculation. When this idea is successful for a while, good sense is lost. People bought dotcoms with no business plan, and houses not to be lived in. When people don’t want anymore be involved with this matter, the market has changed which can take a long while.

People of all nations around the world will discover that the solution will not be found in more government control over society, but through an increase in human liberty and freedom for the individual economic actor.

Applied Market Interventions Are A Distortion

And, this is correct; all the interventions from central banks over the last half a century have made matters worse. If, Governments could have acted as they should have done, their duty is to protect their own citizens and keep their hands of the economy, which is regulated by the market. The moment intervention is applied a distortion is created and opportunities are created for the Elite to steal taxpayer’s money, it becomes a Casino where everyone tries his luck but in this event Banks’ executives play not with their own money but that of clients and taxpayers.

All these interventions are distorting the market and create either deflation or inflation, which both are bad for the market economy. But what is observed is bad all over, bad inflation, and bad deflation. It is the result of monetary mismanagement. And it is going to send all the wrong signals and inevitably makes things worse.

First, the deflation is bad because it is the result of a massive de-leveraging – paying down debt accompanied by a write-down of debt and assets. This technically is called a depression, or a major recession, or a ‘great contraction.’ Call it what you like. It’s a deflation in which prices fall.

Followed by bad inflation that is caused by the central banks printing too much money. This inflation is very bad because it is an increase in the quantity of paper money, without an increase in real demand, or goods.

Implicating higher government’s debt and deficits making it impossible to pay these down honestly. Eventually, the central banks reach the point of no return where they are trapped as is the case today, without a way out. Then, another crisis will follow, either in the form of default, or hyperinflation, or both.

Conclusion; any kind of monetary intervention in a market economy is bad. Neither the ideas of Friedman or Keynes are good, but the approach from Friedrich von Hayek expresses a thoughtful attitude towards monetary intervention. “Interventions on a massive scale as happens at present are the worst enemy of the economy only temporarily intervention on a limited scale sometimes can be helpful”.

Recent Economic History The World Went Through

Since the end of WW2 the economy was in continuous expansion. At first, there was a healthy expansion. Consumers had built up savings during and after WWII. They were ready to get back to work in the consumer economy and spend their money. In that period the USA was world’s leading lender, leading exporter, and leading in manufacturing, in short leading in everything.

In 1971, under the Nixon administration the gold backing for the US-dollar, and also world’s reserve currency, was abolished. During the 1980s, the US turned from a net creditor into a net debtor to the rest of the world. By the 1990s, consumers were spending more than they earned and stopped saving at the turn of the century.

Consumers became depending on the savings of the people in Japan and China that created a consumption economy with a flood of credit that on its turn culminated to living beyond their means. Consumers became addicted to accumulate more debt.

As a result, the financial industry expanded in an incredible manner, finally culminating in the financial crisis of 2007/8.

But nowadays it is different. The central banks have responded with zero interest rates, pumped over $20 trillion worth of bailouts and boondoggles in the market, with no avail being able to repeat the ‘old magic’ of growth stimulus. Because, consumers do have too much of everything and don’t have the extra cash available to pay for additional purchases. They have no other choice left than to cut back on everything.

What would happen if you optimise every available credit source over the last year? Your rate of consumption had soared, you’d placed great demands on the economy and, eventually, your needs slowly decline. You’re left with few desires, but a lot of debts. You’d stop buying anything for a long time, until you were able to repair your balance sheet.

A high rate of debt growth, by itself, is not necessarily a problem. If these funds are invested wisely, if they spur new economic opportunities, then, as a percentage of national debt, these debts could remain profitable. But that’s not what has happened.

Instead, since the 1960s, each new dollar of debt has added less value to economic growth. This indicates the economy is suffering from systematic declining returns. Today, each new dollar/euro of debt adds about 0.54 to economic growth – assuming the economy is growing at 2.5% a year – which is not the case as we already know,, because of much higher real inflations as officially is published.

Debt Based Spending Doesn’t Increase Wealth

The vast majority of the debts added in the 1990s were used to fuel massive financial speculation in corporations, on houses, and home mortgages. As these financial assets begin to deflate, the debt remains, causing the debt to loom higher and higher as a percentage of assets.

“Total debt, as a percentage of GDP, has grown in the U.S. from around 150% in 1982 to nearly 300% today,” – in the EU it won’t be much different.

The whole idea of debt is to boost spending and corporate profits by increased demand. But, everyone knows you can’t really become richer by spending. While consumptive spending is the least efficient and effective spending of all. So central bankers spend it themselves. And people get what they want: boondoggle wars, vote-buying giveaways, and bonuses for incompetent bankers.  

The current economic boom is built on debt, and the debt-based economy is facilitated by the Federal Reserve’s easy money policies. The massive amount of debt held by consumers, businesses, and especially government is the main reason the Fed feels compelled to maintain historically low interest rates.

If rates were to increase to market levels, government interest payments would make the economic situation unstable. This would cause the government debt bubble to burst, leading to a major crisis. However, continuing on the current path of low interest rates will inevitably lead to a dollar crisis and a collapse of the Keynesian welfare-system.

Continuing to waste billions on wars abroad and failed programs at home while pretending that we can avoid a crisis via phony cuts and Fed-fueled growth will only make the inevitable collapse more painful. The only way to avoid economic disaster is to cut spending and to audit and abolish the Federal Reserve and all Central Banks.

Any attempt for revival by pumping additional money in the economy will only initiates inflation and worsen future economic outlook. Debt and speculation at this moment of time are characteristics of the past and don’t apply anymore.

Currently we have entered in the reversal of the economic expanding cycle that is called contraction. (See attached graph). This implicates less consumption, less debt and more savings. And under such conditions the economy turns into depression.

Don’t expect a healthy new boom, the world is witnessing a sick echo of the old one. Governments, led by the attempt to re-inflate the bubble with guarantees and giveaways equalling to an entire year’s annual output of the world’s largest economy. Since every penny of this money is borrowed, it makes sense that every penny will have to be withdrawn from the world economy at some point.

Global WTO-Trade About To Collapse

Since the end of World War II international trade has been functioning on the US Dollar as the world’s main reserve currency. The 2008 bankruptcy of the fiat US Dollar has resulted in unstable Global Markets, that are about to collapse. In the year 2008 the BRICS Alliance was formed – Brazil, Russia, India, China, South Africa – with the purpose of doing a Global Currency Reset – GCR.

Economists have made it clear that the only event that could save the Markets is a GCR which would place gold/asset-backed currencies of participating 209 nations at parity with each other.

The GCR would naturally be accompanied by a Debt Jubilee that would zero out debt, much of which is contained in bank derivatives including mortgages. Great opposition has occurred to having the GCR implemented.

Since it would necessitate taking US Taxpayer dollars away from the private Central Bankers, read the Rothschilds, Rockefellers, c.s. political elites in US Inc. Including the British Crown and Vatican – nowadays better known as the Deep State who presently own and run the Global Monetary System. Implicating; giving the power and stolen money back to The People. In other words, every country and the US would need to return to the powers engrained in their original Constitution, and restore the US-Republic.

The Brand New People’s Economy

This is the reason why President Trump and the Patriots are building a brand new economic system the people’s economy to destroying the central bank economy the world is in since at least 1913.

The peoples’ economy is not based on debt money created out of thin air with interest attached to be paid by the taxpayers with the purpose to enslaving everyone. This new economy is build on sound asset backed money without usury attached.

In the central bank economy; Money is pocketed by the Rothschild central banks to be accumulated in their secret accounts at the Bank od England and the Vatican Bank in Rome. Our new economical system is about creating new jobs, creating a stable currency with no interest attached, without a private central bank. And this is where the central banksters are afraid of.

They will do everything to avoid this kind of people’s economy. They don’t want the people to see that they have committed fraud on a grand scale. In the new system, people are going to discover there is no inflation nor deflation, no loss of purchasing power, it will be an incredible economy for everyone.

Every day life is going to improve, only one breadwinner in the family will be sufficient to being able to support everything that is needed. People don’t have to have credit cards to pay for their purchases.

The central banksters do not want the people to understand that they are the culprits who deliberately keep everyone poor by keeping them into slavery through the corrupt debt money system. By continually burdening them with new debt, instead of letting them live and enjoying 100% of their earned money.

A basic privilege to which everyone is entitled. Their biggest fear is that this is now becoming known. – Nor do they want the USA and UK to conclude new bilateral trade agreements with other countries, apart from the WTO (World Trade Organisation), which is the major pillar of the Deep State funding and power.

Finally, a note about recent events in preparation for future developments; With the defeat of the Democrats over President Trump’s removal procedure, it appears that considerable action is being launched against those who falsely accused him of a planned coup.

Q-followers expect that sensitive government documents will now be declassified that will reveal shocking crimes and conspiracies. The exposed criminals are likely to respond with dangerous counterattacks, most of which will not be visible to the public. As Q recently wrote; “The silent war continues”.

   http://finalwakeupcall.info/en/2020/03/04/great-depression-2-0/

Probate 101: What You Should Know

Probate 101: What You Should Know About Probate (or Avoiding Probate)

By Jessica Sillers — Sep 3, 2019

 When you’re grieving, a complicated legal and financial process is the last thing you want to deal with. But often, that’s exactly what happens when families go through the probate process after losing a loved one.

Understanding the probate process can help keep you from getting caught by surprise.

Who takes charge of a will after someone dies? What happens if someone dies without a will? Is there any way to avoid a lengthy probate process and pile of legal paperwork?

We’ll break it down for you.

What Is Probate?

Probate is the legal process of administering a person’s estate after their death. If you have a last will and testament, probate will involve proving that your will is legally valid, executing your instructions and paying applicable taxes.

Having a clearly written will is one way to make the probate process easier on your loved ones. After all, your will doesn’t only specify who should inherit what. It also designates who you’d like to take care of your kids if both parents were to pass away, plus the executor who should fulfill the instructions in your will.

If you die without a will, the probate court will rely on your state’s intestate law to figure out how to distribute the person’s stuff. (You know how Prince’s heirs had trouble inheriting his assets because he didn’t have a will? Yeah, like that.)

Terms to Know

Legal proceedings often involve terminology that can be overwhelming when you’re already dealing with a lot. A few useful probate terms to know:

Decedent: The deceased person whose estate is going through probate.

Executor or personal representative: The person in charge of carrying out the instructions in the will.

Administrator: A court-appointed executor, if someone dies without leaving a will.

Intestate: A case where someone dies without a will.

Intestacy: State laws determining how to distribute such estates.

Letters testamentary: A document from a probate court authorizing the executor to start carrying out the will.

Notice of probate and notice to creditors: Notices that the executor has to submit, in writing, to the heirs (“interested parties”) and creditors.

Small estate affidavit, summary probate and/or summary administration: Documents or processes that can allow you to skip or shorten certain aspects of probate (i.e. distribute property without a lengthy court process). Estates below a certain value (depending on your state) are eligible for this.

Step-by-Step Guide to Navigating Probate Court

Your probate experience will be determined by your own state laws, but here’s how the process generally goes.

Step 1: Open Probate

An executor can’t jump right in and start passing along family heirlooms and inheritances. The first step is filing a petition with the probate court to open the process and “prove” the will. Until that happens, they’re not allowed to distribute or discard any property. (Though they often can take steps to protect the property, like clearing leaves and debris out of the roof gutters to prevent water damage—but check with an attorney to make sure.) The probate court’s role here is to verify that the will is legally valid.

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

1.  https://meetfabric.com/blog/probate-101-what-you-should-know-about-probate-or-avoiding-probate

The Biggest Truth In Personal Finance

The Biggest Truth In Personal Finance

By J.D. Roth February 18 2020

For the past six weeks, I've been hard at work writing my “introduction to financial independence and early retirement” project for Audible and The Great Courses. It's been challenging — and fun — to rework my past material for a new audience in a new format.

Naturally, I'm emphasizing two important points in this project: profit and purpose.

I believe strongly that you need a clear personal mission statement in order to find success with money (and life).

I also believe that the most important number on your path to financial freedom is your personal profit, the difference between your income and your spending. (Most people refer to this number as saving rate. I prefer the term “personal profit” because it's, well, sexier.)

That last point is important.

Too many people want magic bullets. They want quick and easy ways to get out of debt and build wealth. They believe (or hope) that there's some sort of secret they can uncover, that somehow they've missed. Well, there aren't any secrets. Money mastery is a combination of psychology and math. And the math part is so simple a third-grader could understand it. Wealth is the accumulation of what you earn minus what you spend.

There are only two sides to this wealth equation — earning and spending — but a disproportionate amount of financial advice focuses on the one factor, on spending, and that's too bad. Sure, frugality is an important part of personal finance. And if you're in a tight spot and/or have a high income and still struggle, then cutting expenses is an excellent choice. But the reality is, you won't get rich — slowly or otherwise — by pinching pennies alone.

The Biggest Lie in Personal Finance

Recently at his excellent blog, Of Dollars and Data, Nick Maggiulli wrote about the biggest lie in personal finance. What is that lie? He writes:

While there are lots of people who are in financial trouble because of their own actions, there are also lots of people with good financial habits who just don’t have sufficient income to improve their finances.

That’s why the biggest lie in personal finance is that you can be rich if you just cut your spending. And the financial media feeds this lie by telling you to stop spending $5 a day on coffee so that you can become a millionaire.

With charts and graphs and data, Maggiuli demonstrates that the problem facing people with low incomes isn't their spending — it's their earning. If you're living at the poverty line — currently $26,200 per year for an American family of four — you're not going to escape through thrift. Thrift is an emergency measure, a stopgap. It's a bandage on a major wound.

Here's the bottom line:

If you're poor and hope to be not poor, your attention should be focused on increasing income, not on cutting costs. Your expenses are likely already very low.

If you have an average household income — currently $63,179 according to the U.S. Census Bureau — your path to building wealth will probably include both frugality and income enhancement.

If you have a high income but still struggle to make ends meet, your attention should absolutely turn to cutting costs. You need to rein in your lifestyle. But you won't accomplish this with frugality; you'll do this by optimizing the big stuff.

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

https://www.getrichslowly.org/the-biggest-truth-in-personal-finance/#more-238978

Financial Goals: Your Prioritization Guide

Financial Goals: Your Prioritization Guide

Beth Braverman

 You already know the most basic principle of personal finance--spend less money than you make. Once you’ve got that covered, however, figuring out how to achieve all your financial goals at once can feel overwhelming.

 Should you direct any extra cash toward paying off your student loans or saving for retirement? Building an emergency fund or chipping away at credit card debt?

 As you grow your family and advance in your career, there may be even more competing goals, such as buying a house, saving for your kids’ college education or taking a dream vacation.

 In general, this is how you might think of prioritization for your financial goals, from the most to the least important.

(Of course, the more complicated your finances, the more you’ll benefit from working with a financial planner who can help you navigate your specific situation.)

 1. Protect Yourself Against the Unexpected

 Before working on almost any other long-term financial goals, you’ll probably want to have at least three to six months’ worth of expenses in a liquid account that you can access in case of emergencies.

 “An emergency fund gives you the ability to stay on track no matter what your other goals are,” says Rich Ramassini, a Certified Financial Planner and senior vice president at PNC Investments. This is true even if you have credit card debt. “Let’s say you want to aggressively pay down your credit cards, but your car breaks down and you need a $2,000 repair. If you don’t have an emergency fund, guess where that money is coming from?”

 Bonus: Rising interest rates mean that you save money in an online savings account and it should earn at least a small return.

 Helping to protect against the unexpected also means making sure that you have adequate insurance coverage. That often includes health insurance, auto and home (or renters) insurance, life insurance and disability insurance.

 Although insurance premiums can put a dent in your cash flow, they tend to be relatively cheap compared to the expenses you’d face in a worst-case scenario without such coverage.

2. Start Saving for Retirement

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

https://meetfabric.com/blog/prioritization-financial-goals-short-term-long-term