There Are No Rules, There Are Only Ethical Guidelines
.There Are No Rules, There Are Only Ethical Guidelines
June 27, 2021 · by The Escape Artist
You can escape to financial freedom… Getting to financial independence is hard. That’s partly because the system encourages conformity and obedience and discourages independent thinking. So escaping from The Prison Camp is not just about money (although money is a big part of it). It’s also about learning to choose our own Path.
Like all institutions, The Prison Camp has many rules. If you are going to break out, you will by definition be breaking The Rules… just by no-showing at the 9am roll call. So The Rules of the Prison Camp are a bit like eggs…. when you make The Omelette of Financial Independence, some of The Rules are gonna get broken.
This does not mean that we will be sacrificing ethics and integrity. If anything, Financial Independence allows us to be more ethical.
There Are No Rules, There Are Only Ethical Guidelines
June 27, 2021 · by The Escape Artist
You can escape to financial freedom… Getting to financial independence is hard. That’s partly because the system encourages conformity and obedience and discourages independent thinking. So escaping from The Prison Camp is not just about money (although money is a big part of it). It’s also about learning to choose our own Path.
Like all institutions, The Prison Camp has many rules. If you are going to break out, you will by definition be breaking The Rules… just by no-showing at the 9am roll call. So The Rules of the Prison Camp are a bit like eggs…. when you make The Omelette of Financial Independence, some of The Rules are gonna get broken.
This does not mean that we will be sacrificing ethics and integrity. If anything, Financial Independence allows us to be more ethical.
1) There Are No Rules, Only Guidelines
The Prison Camp tells you that Rules Are Rules and must always be obeyed.
The Escape Artist says, with only a touch of exaggeration:
There are no rules, there are only ethical guidelines.
The Rules are not the same thing as ethics. Not at all. For me, in the event of a conflict, Ethics beat Rules.
For example, the law says that I should not break into my neighbour’s house. But what if the house is on fire and there is a child or a kitten trapped in there that need rescuing?
The Escape Artist does not let Mr Tickles the kitten burn to death whilst explaining that: sorry, I’d love to help but “Rules are Rules”. Nor does The Escape Artist hide behind health and safety, the European Working Time Directive (sorry, I’ve clocked off) or political correctness.
No, like a superhero with his underpants on the inside of his trousers, The Escape Artist kicks down the door and gets Mr Tickles out safely.
2) The Rules Are Always Changing
If you think about it, humans have a long history of inventing and enforcing The Rules. Sometimes they are sensible, sometimes they aren’t.
To continue reading, please go to the original article here:
https://theescapeartist.me/2021/06/27/ethical-guidelines-for-escapees/
Idiots, Maniacs & the Complexities of Risk
.Idiots, Maniacs & the Complexities of Risk
Posted June 24, 2021 by Ben Carlson
Risk is a complicated topic. It’s hard to define. It’s impossible to eliminate. And our perception of risk can often have unintended consequences. When things feel safer, we can let our guards down, which actually increases risk in many activities.
Last year roads were far less congested because people weren’t traveling as much due to the pandemic. Yet U.S. traffic deaths were at a 13 year high, up 7% from the year before.
How could this be?
Idiots, Maniacs & the Complexities of Risk
Posted June 24, 2021 by Ben Carlson
Risk is a complicated topic. It’s hard to define. It’s impossible to eliminate. And our perception of risk can often have unintended consequences. When things feel safer, we can let our guards down, which actually increases risk in many activities.
Last year roads were far less congested because people weren’t traveling as much due to the pandemic. Yet U.S. traffic deaths were at a 13 year high, up 7% from the year before.
How could this be?
Roads were less congested so people took more risks by speeding, failing to wear their seatbelt or driving under the influence. The roads were “safer” but people took that safety to mean they could take even more risk.
A similar dynamic played out following the 9/11 attacks. Miles flown on airplanes dropped somewhere around 20% in the months after the attacks as people were afraid to fly. That meant more people on the roads and more accidents.
Researchers determined nearly 1,600 people died in car accidents above and beyond the averages because so many more people were on the roads.
It also helps to remember everyone’s appetite for risk is different.
The old George Carlin bit about how we view other drivers on the road is the perfect description of how your personal vantage point colors how you view the riskiness of other people’s behavior:
The same person can be an idiot or a maniac depending on the circumstances. In The Right Stuff, Tom Wolfe documented the lead-up to landing a man on the moon in the 1960s.
Many of the early rocket prototypes were tested by Navy pilots. This technology was still new, unproven and highly dangerous. Yet more Navy pilots died in car crashes than air crashes during this time since they were more careful when flying and more reckless when driving.
It’s not just risk itself that matters but your perception of risk and how that changes depending on the circumstances.
To continue reading, please go to the original article here:
https://awealthofcommonsense.com/2021/06/idiots-maniacs-the-complexities-of-risk/
17 Surprising Ways Penny-Pinching Costs You More
.17 Surprising Ways Penny-Pinching Costs You More
By Gabrielle Olya
Frugal living could cost you in the long run.
It's hard to resist seemingly good deals when we see them, whether it's a bargain home in a pricey neighborhood, a tempting cable company promotion or a $10 T-shirt. But sometimes deals that seem too good to be true actually are. Although the initial investment might be low, it could end up costing you in the long term, whether through maintenance costs or missed opportunities to put your money toward a more worthwhile purchase.
GOBankingRates spoke to financial experts to find out which seemingly "good deals" you should always avoid. After all, if you're hunting down deals and steals, you want to make sure that they're ones that will pay off.
17 Surprising Ways Penny-Pinching Costs You More
By Gabrielle Olya
Frugal living could cost you in the long run.
It's hard to resist seemingly good deals when we see them, whether it's a bargain home in a pricey neighborhood, a tempting cable company promotion or a $10 T-shirt. But sometimes deals that seem too good to be true actually are. Although the initial investment might be low, it could end up costing you in the long term, whether through maintenance costs or missed opportunities to put your money toward a more worthwhile purchase.
GOBankingRates spoke to financial experts to find out which seemingly "good deals" you should always avoid. After all, if you're hunting down deals and steals, you want to make sure that they're ones that will pay off.
Purchasing a Home That Needs a Complete Renovation
You might be able to find a great deal on a fixer-upper compared to a move-in-ready home that could come at a hefty price. With the median home value in the U.S. recently hitting about $230,000, it might seem like a smart move to save money upfront by buying a cheaper home and fixing it up. But that's not always the case.
How This Might Cost You More
Martin Eiden, a licensed associate real estate broker with Compass Real Estate, uses the example of a property selling for $700,000 when neighboring, finished homes sell for $1 million.
"A newbie buyer would look only at the cosmetic work and say, 'I can put $100,000 into the property to bring it up to the $1 million (value) and save $200,000.' However, it is not as easy as it seems," Eiden said.
"You often need an architect to create and file plans — which can take months — and get city approval, which can also take months. In other words, it often takes six months of design and approval before work can begin. Construction can take another six to 12 months. During that time you cannot live there since it's a construction site, but you still have to pay for heat, water, taxes and a mortgage. Meanwhile, you have to rent an apartment for a year. As such, there are double housing costs."
Leasing a Car
Leasing a car is often "more affordable" than buying a car, but it could ultimately be a worse financial decision.
To continue reading, please go to the original article here:
https://www.gobankingrates.com/saving-money/savings-advice/ways-penny-pinching-costs-more/
Harder Than It Looks, Not As Fun as It Seems
.Harder Than It Looks, Not As Fun as It Seems
Jun 17, 2021 by Morgan Housel
There’s a saying – I don’t know whose – that an expert is always from out of town. It’s similar to the Bible quote that no man is a prophet in his own country. That one has deeper meaning, but they both get across an important point: Everyone’s human, everyone’s flawed, nobody knows everything. So it’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.
Keep that in mind when comparing your career, business, and life to others.
Good advice that took me a while to learn is that everything is sales. Everything is sales. It’s usually framed as career advice – no matter what your role in a company is, your ultimate job is to help sales. But it applies to so many things.
Harder Than It Looks, Not As Fun as It Seems
Jun 17, 2021 by Morgan Housel
There’s a saying – I don’t know whose – that an expert is always from out of town. It’s similar to the Bible quote that no man is a prophet in his own country. That one has deeper meaning, but they both get across an important point: Everyone’s human, everyone’s flawed, nobody knows everything. So it’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.
Keep that in mind when comparing your career, business, and life to others.
Good advice that took me a while to learn is that everything is sales. Everything is sales. It’s usually framed as career advice – no matter what your role in a company is, your ultimate job is to help sales. But it applies to so many things.
Everything is sales also means that everyone is trying to craft an image of who they are. The image helps them sell themselves to others. Some are more aggressive than others, but everyone plays the image game, even if it’s subconscious. Since they’re crafting the image, it’s not a complete view. There’s a filter. Skills are advertised, flaws are hidden.
A friend recently complained about how inefficient his employer is. Processes are poor, communication is bad. He then said a competitor company had its act together. I asked him how he knew that – he’s never worked there and has never been inside the company. Fair, he said. It just seems that way from the outside.
But almost everything looks better from the outside. I guarantee workers at the competitor find flaws in the way their company operates, because they know about their company what my friend knows about his: how the sausage is made. All the messy personalities and difficult decisions that you only see when you’re inside, in the trenches. “All businesses are loosely functioning disasters” Brent Beshore says. But it’s like an iceberg, only a fraction is visible.
It’s the same for people. Instagram is full of beach vacation photos, not flight delay photos. Resumes highlight career wins but are silent on doubt and worry. Investing gurus are easy to elevate to mythical status because you don’t know them well enough to witness times when their decision-making process was ordinary, if not awful.
Of course there’s a spectrum. Some companies operate better than others, some people are more insightful than average. A few are extraordinary.
To continue reading, please go to the original article here:
How To Deal With Fights About Money
.How To Deal With Fights About Money
By Mr Chaos on June 26, 2021 in Family, Finance
Mrs C reminded me today that my annual appraisal is next week. I’d rather refer to it as our wedding anniversary. But either way, we’re coming up on 17 years. A thriving marriage is difficult to maintain. Which is why we should spend more time celebrating our anniversaries than our birthdays. There are many things that can lead to disagreements in marriage. But the most likely cause of stress in your relationship? Fights about money. The second most likely cause? Annoying habits. Perhaps I should work on the heavy breathing.
Fights About Money
Money doesn’t just cause stress in relationships. About 75% of American adults experience financial stress at least some of the time, regardless of whether they are in a relationship.
How To Deal With Fights About Money
By Mr Chaos on June 26, 2021 in Family, Finance
Mrs C reminded me today that my annual appraisal is next week. I’d rather refer to it as our wedding anniversary. But either way, we’re coming up on 17 years. A thriving marriage is difficult to maintain. Which is why we should spend more time celebrating our anniversaries than our birthdays. There are many things that can lead to disagreements in marriage. But the most likely cause of stress in your relationship? Fights about money. The second most likely cause? Annoying habits. Perhaps I should work on the heavy breathing.
Fights About Money
Money doesn’t just cause stress in relationships. About 75% of American adults experience financial stress at least some of the time, regardless of whether they are in a relationship.
But the stress is exacerbated in a relationship as couples often have different financial values. Unsurprisingly, most of us blame our partner’s money habits for the financial stress.
The most obvious place where these disagreements arise is in our spending.
I’m Okay, I’m Not A Spender
There are clear challenges when one partner is a saver and the other is a spender. We tend to think of spenders being the issue. But I have friends who take saving to an extreme. Or more accurately, take their frugality to ridiculous levels.
Including an American friend who felt that a mud hut in Uganda should be more than sufficient for his new wife. Fortunately he realized the problem with his suggestion, otherwise he may still be living in that mud hut.
By himself.
A more common issue for the frugal is to buy the cheapest version of what they need. There are some quality cheap products out there, but there’s a reason why the phrase “you get what you pay for” exists. Mrs C would admit that this is something she’s struggled with in the past. Particularly when buying me birthday presents.
Spendy Pants
A spendy partner is likely to lead to fights about money. A close friend once told me that his fiancé was looking forward to being added to his credit card accounts. The credit limits on her cards had been maxed out. Bizarrely, this didn’t seem to be a red flag for him.
To continue reading, please go to the original article here:
20 Genius Things Mark Cuban Says To Do With Your Money
.20 Genius Things Mark Cuban Says To Do With Your Money
Valencia Higuera Sat, June 19, 2021
You might have heard this billionaire's name, but who is Mark Cuban and how did he make his money? It's possible you know him as one of the sharks on the hit show “Shark Tank," but Cuban is more than just a TV personality -- he’s also the owner of the Dallas Mavericks and a successful investor. In fact, Mark Cuban's companies are so successful that he made his first million in 1990 after selling his business to CompuServe and then earned a $5.9 billion paycheck after he sold his online streaming audio service to Yahoo in 1999.
Cuban knows how to be rich and successful, and he isn’t afraid to share his insight. Check out Mark Cuban's advice, so you can learn how to budget money and think like a billionaire.
20 Genius Things Mark Cuban Says To Do With Your Money
Valencia Higuera Sat, June 19, 2021
You might have heard this billionaire's name, but who is Mark Cuban and how did he make his money? It's possible you know him as one of the sharks on the hit show “Shark Tank," but Cuban is more than just a TV personality -- he’s also the owner of the Dallas Mavericks and a successful investor. In fact, Mark Cuban's companies are so successful that he made his first million in 1990 after selling his business to CompuServe and then earned a $5.9 billion paycheck after he sold his online streaming audio service to Yahoo in 1999.
Cuban knows how to be rich and successful, and he isn’t afraid to share his insight. Check out Mark Cuban's advice, so you can learn how to budget money and think like a billionaire.
1. Be a Little Bit of a Risk Taker
Talk to any self-made millionaires or billionaires and they might preach the importance of taking calculated risks. Sometimes, risks and rewards go hand-in-hand, as Cuban pointed out in a 2017 interview with Money magazine while discussing the value of investing your savings. He explained that it's possible to save a million dollars, but only if you’re disciplined and take risks. Many who achieve higher levels of financial success aren’t afraid to invest for the betterment of their future -- whether they’re investing in the market, a business or their education.
2. But Only Invest Up To 10% in Risky Investments
If you do take risks in the investment realm, limit the amount you contribute.
"If you’re a true adventurer and you really want to throw the Hail Mary, you might take 10% and put it in bitcoin or Ethereum, but if you do that, you’ve got to pretend you’ve already lost your money," Cuban told Vanity Fair. "It’s like collecting art, it’s like collecting baseball cards, it’s like collecting shoes -- something’s worth what somebody else would pay for it. I’d limit (risky investments) to 10%."
Learn: 12 COVID-Proof Money Tips From Financial Planners
3. Put It in the Bank
In an exclusive interview with Young Money, a personal finance education and media company, Cuban offered this general investing advice and then followed the statement by saying, “The idiots that tell you to put your money in the market because eventually it will go up need to tell you that because they are trying to sell you something. The stock market is probably the worst investment vehicle out there.”
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/20-genius-things-mark-cuban-190057232.html
Money Secrets From 25 Millionaires Under 25
.Steal These Money Secrets From 25 Millionaires Under 25
Here's how to make and manage money to become a millionaire.
By Cynthia Measom March 31, 2021
Unless you’re independently wealthy, you’ve probably entertained the idea of being a millionaire. As you read about the latest celebrity splurge, you might wonder what a normal person can do to make that kind of money.
The rich often know the secrets to financial success, and now you can, too. By knowing how these 25 millionaires under 25 amassed their fortunes, you can get some personal finance and budgeting tips that apply to your own life and growing bank account.
Steal These Money Secrets From 25 Millionaires Under 25
Here's how to make and manage money to become a millionaire.
By Cynthia Measom March 31, 2021
Unless you’re independently wealthy, you’ve probably entertained the idea of being a millionaire. As you read about the latest celebrity splurge, you might wonder what a normal person can do to make that kind of money.
The rich often know the secrets to financial success, and now you can, too. By knowing how these 25 millionaires under 25 amassed their fortunes, you can get some personal finance and budgeting tips that apply to your own life and growing bank account.
Automate Your Finances
In 2016, when Mikaila Ulmer landed an $11 million deal with Whole Foods to sell her Me & the Bees Lemonade in 55 of its stores in four states, that was just the beginning of her financial success. Today, the 14-year-old entrepreneur's beverage is now also being sold by restaurants, food trailers and natural food delivery companies.
In a 2017 interview with CNBC, Mikaila said her best money advice is to automate your finances. What the teenage millionaire means is to use online technology to track numbers and share data to keep financial information easily accessible and in check.
Diversify Income Streams
People who are looking to become rich can take a cue from stars who know how to diversify their income streams — like Camila Cabello. The 23-year-old singer got her start on "The X Factor" television show in 2012 as a member of the group Fifth Harmony, which she left to become a solo act in 2016.
Since becoming a solo act, Cabello has collaborated with other artists, released a No. 1 album, toured solo, done a modeling campaign for Guess and took a role in a film adaptation of "Cinderella." According to Celebrity Net Worth, Cabello has a net worth of $14 million.
Liza Koshy, who cut her digital teeth on the now-extinct Vine, is another star who knows how to earn income from various ventures. She made Forbes' 2019 30 under 30 list. Koshy has two successful YouTube channels with millions of subscribers. She's had her share of sponsored content opportunities and has been hired for commercial ads.
To continue reading, please go to the original article here:
What It’s Really Like to Live on $50K, $300K and $1M
.What It’s Really Like to Live on $50K, $300K and $1M
Yes, even millionaires have money trouble.
By Jordan Rosenfeld January 15, 2021 Build Your Wealth
Wealth is relative. An annual income of $50,000 might be more than enough for a single person living in a mid-sized city. But a family of four in New York City might feel pinched on $500,000 if they live in a penthouse apartment, pay private school tuition and own a second house in the Hamptons. Even a big paycheck might not go far in some parts of the country if you have an over-the-top lifestyle.
To find out what life is like at various income levels in very different areas, GOBankingRates talked to three people with three very different paychecks. You might be surprised by the similarities and differences in their spending and saving habits. Click through to find out what it’s like to live on $50,000, $300,000 and $1 million and whether salary alone can make you wealthy.
What It’s Really Like to Live on $50K, $300K and $1M
Yes, even millionaires have money trouble.
By Jordan Rosenfeld January 15, 2021 Build Your Wealth
Wealth is relative. An annual income of $50,000 might be more than enough for a single person living in a mid-sized city. But a family of four in New York City might feel pinched on $500,000 if they live in a penthouse apartment, pay private school tuition and own a second house in the Hamptons. Even a big paycheck might not go far in some parts of the country if you have an over-the-top lifestyle.
To find out what life is like at various income levels in very different areas, GOBankingRates talked to three people with three very different paychecks. You might be surprised by the similarities and differences in their spending and saving habits. Click through to find out what it’s like to live on $50,000, $300,000 and $1 million and whether salary alone can make you wealthy.
What It's Really Like to Live on 50K
Jamie Hickey, a furniture maker in Philadelphia, Pennsylvania lives on $52,000 per year, with a tiny bit of unreliable side income from several websites he runs. He, his wife and two kids, pay about $1800 for mortgage, spend between $150-$200 per week on food, have a car payment of $500 and pay about $2000 per year on health insurance.
It’s Enough for a Comfortable Life
Hickey and his family live a comfortable life. They can afford internet and streaming entertainment services, still put a little bit in savings, and take an annual vacation to the beach.
Hickey says one key is how he manages his debts. “I don’t have any debts. Some people wait until their monthly statement comes out, but I pay as soon as I use it. I don’t want to get into the habit of paying hundreds of dollars later.” Hickey uses his credit card mainly to get the points it awards him.
There’s Room in the Budget to Save
Hickey has always made it a point to save 10 to 15 percent of all income that he makes.
“You just have to be careful of what you have, save what you can and understand that there’s a big difference between things you need and things you want.”
To continue reading, please go to the original article here:
https://www.gobankingrates.com/money/jobs/what-its-like-to-live-on-50k-250k-million/
Bank Fraud Is On The Rise — Here Are 4 Ways To Protect Your Bank Account
.Bank Fraud Is On The Rise — Here Are 4 Ways To Protect Your Bank Account
Korin Miller June 3, 2021
One of the scariest things about internet fraud is knowing that someone could hack your bank account if they happen to get a hold of certain personal information. It's only natural, then, to wonder about how to protect your bank account from fraud.
Bank account fraud happens, and it can mean the difference between you keeping your hard-earned money and seeing it vanish. Bank fraud attacks increased 159 percent over the past year, according to an analysis of 12 billion global transactions over the past year by risk management platform Feedzai, making this a very real risk.
Bank Fraud Is On The Rise — Here Are 4 Ways To Protect Your Bank Account
Korin Miller June 3, 2021
One of the scariest things about internet fraud is knowing that someone could hack your bank account if they happen to get a hold of certain personal information. It's only natural, then, to wonder about how to protect your bank account from fraud.
Bank account fraud happens, and it can mean the difference between you keeping your hard-earned money and seeing it vanish. Bank fraud attacks increased 159 percent over the past year, according to an analysis of 12 billion global transactions over the past year by risk management platform Feedzai, making this a very real risk.
Luckily, you don't have to just hope you'll avoid getting scammed. Signing up for a password manager like LastPass Premium can help ensure that you create a strong enough password — and remember it — so that bank account fraud won't be an issue (but more on that later). Here's what you need to know about bank account scams and how to protect your account.
What Is Bank Account Fraud?
At a basic level, banking scams involve someone attempting to access your account, according to USA.gov. That's generally broken into four categories:
Overpayment Scams. This is when a scam artist sends you a counterfeit check. They then tell you to deposit it in your bank account and then wire part of the money back to them. The check is fake, and you'll have to pay your bank the amount — and you'll lose any money you wired.
Unsolicited Check Fraud. If you cash a check from a scammer that you received for no reason, you could be accidentally authorizing the purchase of goods or signing up for a loan you didn't ask for.
Automatic Withdrawals. A scammer can create automatic debits from your account to qualify you for a free trial or to collect a prize.
Phishing. This is when a scam artist sends an email asking you to verify your bank account or debit card number.
To continue reading, please go to the original article here:
25 Secrets Every Rich Person Knows
.25 Secrets Every Rich Person Knows
Gabrielle Olya Tue, June 22, 2021
If it seems like the rich know something about money that the rest of us don't, it's probably because they do. There must be some reason the richest 1% of people now hold more than 40% of the world's wealth, according to the Credit Suisse Global Wealth Report. Maybe the rich have certain secrets to accumulating wealth -- but that doesn't mean what they know has to remain a mystery. Learn about strategies that you can use so you can build your own wealth, too.
Spending Must Align With Goals
One of the keys to being rich is having goals, said Michael Kay, president of Financial Life Focus and author of "The Feel Rich Project." "(The rich) know what they care about," he said. "Maybe it's passing wealth to another generation, maybe it's attaining a particular lifestyle. They are mindful of not wasting resources on things that have no value."
25 Secrets Every Rich Person Knows
Gabrielle Olya Tue, June 22, 2021
If it seems like the rich know something about money that the rest of us don't, it's probably because they do. There must be some reason the richest 1% of people now hold more than 40% of the world's wealth, according to the Credit Suisse Global Wealth Report. Maybe the rich have certain secrets to accumulating wealth -- but that doesn't mean what they know has to remain a mystery. Learn about strategies that you can use so you can build your own wealth, too.
Spending Must Align With Goals
One of the keys to being rich is having goals, said Michael Kay, president of Financial Life Focus and author of "The Feel Rich Project." "(The rich) know what they care about," he said. "Maybe it's passing wealth to another generation, maybe it's attaining a particular lifestyle. They are mindful of not wasting resources on things that have no value."
According to Kay, the wealthy tend to spend money only on things they care about. The rest of us can learn from this by setting our own goals and then monitoring our spending to see if it aligns with those goals.
Don’t Waste Money To Impress Others
Most rich people don't spend their time and money trying to impress others, Kay said. "They are not in a race. They know they have made it, so their attention is not on what others think." In fact, many wealthy individuals wouldn't have become rich if they had spent their hard-earned money buying things to keep up with others, he added.
Authors Thomas Stanley and William Danko said much the same thing in their 1996 best-seller, "The Millionaire Next Door: The Surprising Secrets of America's Wealthy," writing that a couple of key secrets of the country's richest people are living below their means and rejecting big-spending lifestyles.
Spending money to appear rich before you actually are rich is a surefire way to sabotage your wealth-building goals. So, forget about the Joneses and focus on what matters: accumulating wealth in the coming years.
Have Plenty of Liquidity
The rich make sure they have sufficient liquidity, or cash, to cover their short-term needs. They maintain an emergency fund so "they don't have to disrupt their life for an unexpected occurrence," Kay said. The fact that rich people have money set aside for a rainy day isn't solely a function of their wealth. They have cash reserves because they are disciplined enough to save.
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/25-secrets-every-rich-person-210022728.html
LBJ Called, He Wants His Inflation Back
.LBJ Called, He Wants His Inflation Back
Notes From the Field by Simon Black June 21, 2021 Cancun, Mexico
1960 was supposed to have been a fantastic year. The world was largely at peace for the first time in decades and had fully recovered from the influenza pandemic that had broken out in the late 1950s. Exciting new technology was rapidly developing, from color TV to the invention of the microchip.
In the United States, the country was getting ready to decide a Presidential race between two young candidates, both in their 40s. That had never happened before (or since) in the history of US presidential elections.
Overall there was a lot of optimism and energy as a new decade emerged.
And then, without warning, a recession struck the US economy.
LBJ Called, He Wants His Inflation Back
Notes From the Field by Simon Black June 21, 2021 Cancun, Mexico
1960 was supposed to have been a fantastic year. The world was largely at peace for the first time in decades and had fully recovered from the influenza pandemic that had broken out in the late 1950s. Exciting new technology was rapidly developing, from color TV to the invention of the microchip.
In the United States, the country was getting ready to decide a Presidential race between two young candidates, both in their 40s. That had never happened before (or since) in the history of US presidential elections.
Overall there was a lot of optimism and energy as a new decade emerged.
And then, without warning, a recession struck the US economy.
As usual, almost nobody saw it coming. The Federal Reserve was just as surprised as the US government when everyone noticed that industrial production began to drop in February 1960.
Manufacturing declined, GDP fell, and unemployment rose steadily, reaching 7% by May 1961-- a level rarely seen since the Great Depression.
The government responded with its usual playbook; after Kennedy narrowly won the election of 1960 (despite significant evidence of voter fraud), he immediately endeavored to make good on his election promise: “Get the country moving again.”
He started with billions in stimulus spending-- highway spending, extended unemployment benefits, etc.
Kennedy was known to have had little regard for the national debt (which he expanded by 10% in two years). Even before becoming President, JFK had given speeches arguing-- quite bizarrely-- that the national debt is actually a sign of prosperity.
And while Kennedy dumped money into the economy, the Federal Reserve rapidly slashed interest rates, from 4% all the way down to 1.25%.
The measures worked. By 1962, the Fed declared victory over the 1960 recession. They even published a report defending their money printing and aggressive interest rate cuts, citing “an absence of inflationary pressures”.
And that was true. From 1962 through 1964, inflation was less than 2%. The economy was in good shape and everyone was happy.
Lyndon Johnson won the presidency in 1964 after promising to forge a “Great Society,” a term that encompassed widespread social spending on everything from free healthcare to national endowments for art.
Johnson spent billions expanding welfare, food stamps, public transportation, environmental protection, public housing, university funding, etc.
Yet simultaneously, LBJ also rapidly escalated US military involvement in Vietnam.
Prosecuting an unwinnable war while simultaneously building the Great Society proved to be incredibly expensive, and the US national debt grew dramatically under Johnson.
Inflation rose too. In fact 1965 began a long period of what economic historians call “The Great Inflation”. Inflation passed 4% in 1966, and was more than 6% by the end of the decade.
Inflation really started spiraling out of control in the 1970s after then-President Richard Nixon ended the dollar’s convertibility into gold; by 1974 inflation was more than 12%, and peaked at nearly 15% in 1980.
Even throughout the 1980s, annual inflation still held well above 4%… and even in the 1990s and early 2000s inflation hovered near 3% per year on average.
In fact the low inflation we experienced in the past 12-13 years, averaging 1.7% since the 2008 financial crisis, is a major anomaly.
We’re told by the all-knowing, all-powerful central bankers at the Federal Reserve that they will maintain a long-term inflation rate of 2%.
But the Fed’s inflation track record speaks for itself.
Starting with the Great Inflation in the 1960s, and going all the way through 2008, the average annual inflation rate in the Land of the Free has been 4.6%, more than twice as much as the Fed has promised.
So this phenomenon of higher inflation we’re seeing now is nothing new.
Fiscal and monetary conditions today are also quite similar to the early 1960s.
Remember-- in 1960 the US was emerging from a major pandemic, the government was going heavily into debt, and the Federal Reserve was happy to accommodate it all with low interest rates.
Today the US is emerging from a major pandemic. The national debt has soared, and the federal government has an insatiable appetite to spend trillions of dollars on every social program it can dream up.
And then there’s the Federal Reserve— which last week announced they will keep interest rates at near zero until 2023.
Talk about bizarre. It’s obvious to everyone that the economy is roaring back, and businesses are having huge problems finding workers. It’s also obvious that inflation is rising.
Yet the Fed doesn’t seem to notice or care. They’ll continue printing money and maintaining 0% rates, no matter the cost.
All of these factors are huge inflationary pressures.
The numbers will fluctuate month to month, year to year. Some months the inflation numbers will fall. Other months they’ll rise.
But the long-term trend is pretty obvious: massive government spending and low interest rates is like the 1960s Great Inflation all over again.
Remember, even though the Fed insists that they’ll maintain 2% inflation, their actual track record between 1965 and 2008 is an average 4.6% annual inflation rate.
So if your own long-term financial planning is based on the Fed keeping its promised 2% inflation rate, you may be in for a rude awakening.
To your freedom and prosperity, Simon Black, Founder, SovereignMan.com
https://www.sovereignman.com/trends/lbj-called-he-wants-his-inflation-back-32731/