Three Reasons Why Inflation Is Rising. Two Of Them Aren’t Going Away
.Three Reasons Why Inflation Is Rising. Two Of Them Aren’t Going Away
Notes From the Field By Simon Black May 5, 2021 Cancun, Mexico
A remarkable thing happened yesterday that tells you everything you need to know about inflation. In the morning, US Treasury Secretary Janet Yellen stated bluntly that “interest rates will have to rise somewhat to make sure that our economy doesn’t overheat. . .”
For economists, an ‘overheating economy’ means inflation. So she was essentially saying that rates would have to rise to prevent inflation. Yet hours later, she completely reversed herself, saying that interest rates would NOT have to rise because “I don’t think there’s going to be an inflationary problem.”
Why Financial Strain Is So Harmful to Your Health
.Why Financial Strain Is So Harmful to Your Health
A conversation with Dr. Michael Stein on the toll simply not having enough money takes on your body.
BY DREW MILLARD March 29, 2021
A 100 bill's face is covered with a mask as a doctor would wear. Anton Petrus
In an address to the nation earlier this month, President Joe Biden marked the one-year anniversary of the coronavirus pandemic by announcing that all American adults would be eligible for the COVID vaccine by May 1. If we all get vaccinated, he said, “there’s a good chance you, your families, and friends will be able to get together” on the Fourth of July “and have a cookout.” The implication was that we will finally have passed the apex of the virus, and that, slowly but surely, things will once again begin to feel normal again.
Except that’s not how things work, really. We have spent the past year in the throes of a public health crisis which quickly brought with it an economic one to match. Nearly a year after the initial shock of 22 million Americans losing their jobs at the onset of the pandemic, 18.7 million people are still filing for unemployment. This is to say nothing of those who have been without a job for so long that they are no longer technically counted as members of the workforce. While plenty of people are going to emerge from the pandemic in better financial shape than ever, many others have felt the sting of financial precarity in ways that affect their ability to pay for their housing or food. We will be dealing with the economic consequences of the pandemic for years.
The 7 Money Personality Types
.The7 Money Personality Types, says psychology expert—how to tell which one you are (and the pitfalls of each)
Published Wed, Apr 28 2021 12:51 PM EDT Ken Honda, Contributor
We often stress about the importance of financial literacy, such as gaining a strong understanding of how money works and having the resources to make informed decisions. But when it comes to establishing financial health, one thing most people fail to consider is their money personality type — or their approach and emotional responses to money.
We each have our own beliefs and emotions about money, and they are mostly shaped by our individual life experiences (e.g., passed down from our parents or influenced by our current situations).
In my 10-plus years of researching the psychology of money and happiness, I’ve found that there are seven distinct money personality types. Typically, we fall into a combination of many types, and not just one.
Don’t Ever Give Up: Surviving 10 Years Of Prison
.Don’t Ever Give Up: Surviving 10 Years Of Prison
Updated: 12/04/2019 by Financial Samurai
When I was in high school, I got in a lot of trouble. As a result, I often wondered if anybody would ever give me a chance at life. Because I ended up receiving multiple chances despite my screw ups, I’ve learned to be more thankful and not take things for granted. I also developed an affinity for people who also had a rough time growing up, but found a way to make things work.
The following is a guest post from Bill, a man who spent 10 years in prison before getting on the path to financial freedom. Hopefully his post will give you the motivation to stick with things when times are tough and not lose faith that everything will turn out OK in the end.
Be Prepared For The Next Black Swan
.Be Prepared For The Next Black Swan
By Larry Swedroe
“Measures of uncertainty that are based on the bell curve simply disregard the possibility, and the impact, of sharp jumps… Using them is like focusing on the grass and missing out on the (gigantic) trees. Although unpredictable large deviations are rare, they cannot be dismissed as outliers because, cumulatively, their impact is so dramatic.”
— Nassim Taleb, The Black Swan: The Impact of the Highly Improbable
Over the course of the first two decades of the 21st century, equity markets faced three “black swan” events: the attacks of September 11, 2001, the Global Financial Crisis that began in late 2007 and the COVID-19 pandemic. Each resulted in steep falls in equity prices. The term “black swan” was a common expression in 16th-century London that described impossibility. It derived from the old-world presumption that all swans must be white—because all historical records of swans reported that they had white feathers.
Thus, a black swan was something that was impossible, or nearly impossible, and could not exist. After the discovery of black swans in Western Australia in 1697 by a Dutch expedition led by explorer Willem de Vlamingh on the Swan River, the term metamorphosed to connote that a perceived impossibility may later be found to exist.
How People Get Rich Now
.How People Get Rich Now
April 2021
Every year since 1982, Forbes magazine has published a list of the richest Americans. If we compare the 100 richest people in 1982 to the 100 richest in 2020, we notice some big differences. In 1982 the most common source of wealth was inheritance. Of the 100 richest people, 60 inherited from an ancestor. There were 10 du Pont heirs alone. By 2020 the number of heirs had been cut in half, accounting for only 27 of the biggest 100 fortunes.
Why would the percentage of heirs decrease? Not because inheritance taxes increased. In fact, they decreased significantly during this period. The reason the percentage of heirs has decreased is not that fewer people are inheriting great fortunes, but that more people are making them.
How are people making these new fortunes? Roughly 3/4 by starting companies and 1/4 by investing. Of the 73 new fortunes in 2020, 56 derive from founders' or early employees' equity (52 founders, 2 early employees, and 2 wives of founders), and 17 from managing investment funds.
Feel Better
.Feel Better
Jonathan Clements Humble Dollar| April 10, 2021
WARREN BUFFETT doesn’t have the best investment record over the past three decades. That accolade apparently belongs to Jim Simons. Buffett also isn’t the world’s richest person. In fact, he hasn’t held that title for the past dozen years and currently ranks No. 6, with barely half the wealth of today’s richest person, Jeff Bezos. I doubt Buffett feels bad about this. Is your surname neither Simons nor Bezos? I don’t think you should feel bad, either.
Money can be maddening—if we let it. There will almost always be some parts of our portfolio whose performance disappoints. There will always be some folks who are wealthier. But whether it’s our investment performance or our overall net worth, we shouldn’t let ourselves be bothered by our relative standing. Why not? Here are five reasons.
10 Bad Money Habits You Learned From Your Parents and Need To Break Now
.10 Bad Money Habits You Learned From Your Parents and Need To Break Now
Cynthia Measom Tue, April 27, 2021,
An “Invest in You” savings survey by CNBC and Acorns found that some Americans are harboring what could be viewed as bad money habits. For example, 27% of Americans rarely discuss their personal finances with family. And 75% of Americans manage their own money, whereas only 17% hire a financial advisor. So if these Americans aren’t forming their money habits based on help from a financial advisor, who is their financial role model? According to the survey, 37% of respondents said it was their parent.
Does that mean that the financial habits your parents have are bad? Maybe so and maybe no. It depends on what those financial habits are. Some bad money habits are glaringly obvious. You know, like paying only the minimum on a maxed-out credit card each month or always spending extra money on wasteful items. But some aren’t so obvious — especially if you’re following the example set by a parent who serves as your financial role model.
To find out where you stand, check out these 10 bad money habits people learn from their parents, and see if any of them ring true for you.
Confessions of an Overnight Millionaire
.Confessions of an Overnight Millionaire “I constantly ask myself, Do I deserve this money?”
By Anonymous
What Is the Meaning of All This Money?
A series about the ever-more-chaotic future of finance.
Since July 2020, nearly 750 companies have gone public, raising more than $200 billion and minting thousands of new paper millionaires. Amid the frenzy, one millennial tech worker on the verge of unexpected wealth shared what was going through her mind.
When I joined my company, I theoretically knew there were only two exit paths — an acquisition or an IPO. And a third, where the company implodes, like WeWork, but you’re hoping for one of the first two. I didn’t really think about it when I signed on. I thought that I’d make a little bit from an IPO, maybe $200,000. You don’t think much about $200,000; it’s not life-changing.
Are You Guilty of This Financial (and Lifestyle) No-No?
.Are You Guilty of This Financial (and Lifestyle) No-No?
By Alexa Mason
The other day, one of my good friends was telling me about his money situation. To put it simply, he was waiting on his next paycheck to be able to pay for his son’s baseball pictures. I felt kind of bad for him, and my initial reaction was to start dishing out financial advice. You know: Tell him how he can stop living paycheck to paycheck, and that kind of thing.
But I bit my tongue.
My friend wasn’t looking for my sympathy or my advice. In fact, he’s one of the most frugal people I know. He already knows what to do. What he needed was somebody who would just listen; listen without judging; listen without telling him how he should be living his life.
This Is Not The Time To Procrastinate
.This Is Not The Time To Procrastinate
Notes From the Field By Simon Black April 27, 2021 Cancun, Mexico
In early 387 AD in the eastern Roman city of Antioch, a local bureaucrat stood outside of the city council chambers to read a new decree that had just arrived from Emperor Theodosius I. As the anxious crowd gathered, the bureaucrat began reading aloud-- Just as the crowd had feared, the new decree was a series of debilitating new taxes, ranging from heavy taxation on commercial activities, to mandatory donations to the Emperor himself.
The crowd became furious.
Antioch had already suffered immeasurably. The imperial government had depleted the city’s grain, killed off a large number of the youth from endless war, and already exacted heavy tolls and taxation. These new taxes were too much to bear. And a riot ensued almost immediately. People all over Antioch (in modern day Turkey) poured into the streets ripping down monuments of the imperial family, burned their portraits, and destroyed public buildings.