Wednesday, July 31, 2019

The Market Gets a Rate Cut, But Throws a Fit Anyway

The Fed lowered the Fed rate by 25 basis points. The market immediately turned down. The rate cut had been priced in for months. This, among other things, is one of the reasons that over the last couple of months I've lowered my exposure to stocks from 50 percent to 25 percent, holding mostly boring stuff like an MLP (oil and gas pipelines), REIT, an ETF that holds preferred stocks (PFF) and some inverse EFTs as a hedge). The rest of my retirement portfolio is in boring money markets paying 2.13%.

That interest rate is a travesty for retired people who need safety yet income in retirement to cover at least a 4% draw down and to keep up with inflation. The Fed has been screwing us over for a decade. Whenever the government creates artificial prices in anything, markets get skewed and the outcome is usually a shortage of something, somewhere and lots of people get hurt (because they're usually not paying attention). I have to invest quite aggressively in retirement. I spend more time doing it than I should and take more risk than I should. But screw the government. One of my IRAs has a 26% return over the last 12 months. The other has a 9% return.

Anyway, I digress, but I needed to vent. The DJIA fell 333.75 today, starting about 1 pm CDT when the Fed made their announcement. And after market close, futures are down another 50 points.

Note that as indicated by the blue line on this daily chart for the SPY EFT, which represents the S&P 500, return from the market has been essentially flat for the last 11 months. 

The market is unpredictable. I am always careful around two important events: earnings announcements for individual stocks, and the Fed. And don't think bad earnings can drive stocks down. I've seen stocks go up on bad earnings and down on good earnings. All depends on investor expectations.

Not sure why investor expectations drove the market down 300+ points today, but I'm sure they're be plenty of pontificating.

But I don't care. I was prepared for this by owning two inverse EFTs (RWM for the Russell and SQQQ for the NASDAQ). So my portfolio was up a modest .67% while the Dow most indices were down more than 1.2%. (In all honesty, I still have small losses on these ETFs, but I think that will change over the next several months, if not sooner).

It could have gone against me, but with the market being overvalued, it was a good hedge. And I also made $2,600 after buying 2 Nat Gas futures contracts yesterday.

I study fundamentals, but trade on technical data.

So I really don't care what the Fed does, or the Federal government does, They usually get everything wrong anyway.

New Homes Sales: Flat

The housing trend is visibly fading at the half-way point, opening the year on a solid rise before flattening out and slowing in May and June. This is true of existing home sales which were reported yesterday and is especially true with today's report on new home sales which came in at a lower-than-expected 646,000 annual rate. The 3-month average is at 636,000 which compares unfavorably against a 673,000 peak in April.

The median price firmed in June to $310,400 but is no better than dead flat versus June last year. Supply edged higher to 338,000 new homes on the market and on a sales basis is at an ample 6.3 months. Sales jumped in the West, edged higher in the South, and slipped in the South and Northeast.

Market fundamentals should be pointing to better results for new home sales: there's plenty of homes on the market, prices are soft, employment is strong, and mortgage rates have come down sharply. Yet today's report is consistent with anecdotal reports that foreign buyers, due to trade tensions, have been scaling back US home buying. In any case, these results do fit in with arguments for a rate cut, a cut that would likely pull mortgage rates even lower in what couldn't but help housing.

Additionally, the Mortgage Bankers' Association reported: "The purchase index continues to pull back in what is an unfavorable indication for underlying home sales. After falling 4.0 percent in the prior week, the index fell 2.0 percent in the July 19 week to pull down year-on-year growth to 6.0 percent. Refinancing activity has also been coming down, 2.0 percent lower in the week. Rates fell back in the week, down 4 basis points to 4.08 percent for conventional 30-year loans."

Tuesday, July 30, 2019

Seven Deadly Sins of Retirement Planning

Here are seven things not to do when planning for your retirement.
1. Not saving enough — or anything. Yes, it’s the most obvious but it’s worth repeating. According to the Insured Retirement Institute survey, an astonishing 23% of baby boomers have no retirement savings… and never did.
2. Draining your retirement savings. Another 17% did save for their retirement once… but then spent the money, either in desperation, or carelessness, or maybe both.
3. Not calculating a retirement savings goal. It’s a lot harder to save enough for retirement if you haven’t first at least tried to work out how much that’s supposed to be. Astonishingly, just 25% of boomers who do not have a financial adviser have tried to run the numbers. And even 25% of those who do have a financial adviser still haven’t set a target. Um… what?
4. Underestimating health costs. Here’s a sobering item: A 2018 analysis estimated that a healthy couple in their mid-60s may need to budget between a third and half a million dollars for their health care expenses, including supplementary insurance, copays and other out of pocket expenses. Yet most near-retirees don’t have a clue. According to the IRI survey, more than half of boomers think their health care costs will come to less than 20% of their retirement income, and more than one in four think they will come to less than 10%.
5. Ignoring long-term care costs. Yet nearly 70% of those in their mid-60s are going to need some kind of long-term care, and the average cost a year is $89,000 a year. Who’s going to pay? “Medicare,” say 46% of baby boomers surveyed. Yes, really. Uh… folks: Medicare doesn’t pay for long-term care. Not a nickel.
6. Mishandling your retirement date. On the one hand, some people have been forced to postpone retirement because they couldn’t afford it. Some 29% of those aged 62 to 66 have postponed their retirement, and a remarkable 33% of those aged 67 to 72. On the other hand, others overestimate how long they’ll be able to keep working. Some 31% of boomers predict they’ll work past 70… but studies have found fewer than 10% actually do.
7. Not setting affairs in order. Possibly the most astonishing revelation in the survey is buried in the footnotes: About two-thirds of boomers have taken no steps to protect themselves if they suffer diminished capacity or dementia. They haven’t spelled out their wishes for their care and end of life. They haven’t sorted out a power of attorney for when one is needed. And as anyone who has been through this process can tell you, the chances are pretty high that if you wait to do this stuff until it’s needed, it’s going to be too late.
Read the full article at MarketWatch.

Friday, July 26, 2019

3 Mistakes to Avoid Your First Year of Retirement

After working for decades to save for retirement, one of the last things you want to do is make mistakes that put you on the wrong path right out of the gate. Here are three costly mistakes to avoid in your first year of retirement, according to Motley Fool.

1. Not following a budget
Just like you need to follow a budget while you’re working, you should also plan on having one during retirement—especially if you will be living off your savings and Social Security alone.

The secret here is to get a handle on your spending early on so that when you see certain expenses are more than you anticipated, you can compensate by cutting back in other areas.

2. Withdrawing too aggressively from your nest egg
Your savings may need to last you 30 years on average, according to Motley Fool. If you withdraw too much money from your nest egg early on, you'll risk running out of money later in retirement. You won’t only lose those extra dollars; you’ll also lose any potential investment income from them. Over the course of 30 years, that could really make a big difference. Therefore, you'll need to develop a withdrawal strategy that gives you access to the income you need without going overboard.

3. Letting yourself get bored
According to the Institute of Economic Affairs, the chances of being diagnosed with depression during retirement increases by 40%. With so much free time on your hands, feelings of worthlessness and restlessness can trigger depression, according to the IEA. You may be less likely to develop theses symptoms if you map out a schedule that keeps you occupied. Keeping busy by working on home projects, spending time with friends or even working a part-time job could make a big difference.

You deserve to start off your golden years on a positive note. Avoid these mistakes, and you'll likely set the stage for a happy, fulfilling retirement.

Wednesday, July 24, 2019

Setting Minimum Wages: A Study in Supply and Demand

To quote Dr. Thomas Sowell, economist at Stanford University: "One of the simplest and most fundamental economic principles is that people tend to buy more when the price is lower and less when the price is higher. Yet advocates of minimum wage laws seem to think that the government can raise the price of labor without reducing the amount of labor that will be hired."

More here: Lessons from the Past

Monday, July 22, 2019

Goal Setting! A Simple Way to Increase the Chances of Achieving Your Goals

Besides using budgets, goal setting is absolutely vital to financial freedom. From Chris Haroun, one of my favorite sources of financial information. 

Sunday, July 21, 2019

Evaluating the Stock Market: Where's it going?

Of course, the question "Where's it going?" is rhetorical. I cannot answer that, nor can anyone else, if they're honest (though many pundits and talking heads will try to convince you that they know: they do not). 

However, there are some indicators that can try to show trends. A market trend is very important, because a strong trend either up or down can bring most stocks with it. Not all; there will always be stocks that do not follow along.

When deciding whether I'm in or out -- and these are for long-term investing (weeks and months) for my retirement account, not swing or day trading -- I look at these indicators (and I provide a brief synopsis of what I see using the SP500 (SPY) as an market index):

1. What's called a curve chart. This will give me an idea whether prices tend to be expensive, or cheap. 

Based on a weekly chart, stocks are expensive. They can still go higher, but may hit some resistance. 

2.  The overall trend. Is it up, sideways, or down.

Based on a daily chart, the trend is up. However, looking a little bit more short-term, on a 60-minute chart, the trend may be reversing, based on the last week of trading. (See chart below).  

3. Short-term trend chart, looking for entry and exit points. (Short-term is relative to the investor; it could be hours, days or weeks).

I'm looking for confirmation of the trend mentioned in #2 above. The price of the future contracts for the SP500 has moved through and below a supply area of 2971. If it continues and breaks below 2963, I might look at this as a trend reversal.

4. Earnings. Investors can bid prices up or down based on emotional issues, like world-wide events or what the Fed is doing, but long term, the underlying factor of stock prices is company earnings.

Only about 15% of companies have reported Q2 earnings, so this is still up in the air. Earnings were a little softer in Q1 2019 vs. Q1 2018, so it will be worth paying attention to this. Generally, I only look at earning in detail when I'm doing my fundamental analysis of individual companies. 

5. The Shiller PE Ratio and the Buffet Indicator. These will indicate whether the overall market is overpriced.

The Shiller ratio is at 30.36. The mean is 15.73. Stocks are relatively expensive. The Buffet indicator (145) shows stocks as significantly overvalued. A value of 100 means stocks are fairly valued. 

6. The economy. I look at housing, consumer spending, LEI and interest rates. You can follow these on Econoday, which provides information on many reports. 

Based on the above indicators, for my own personal retirement accounts, I've place stop orders on my stock and bond positions, and two sold off this week. This protects profits. I may buy back in a cheaper prices. Otherwise, its a hold and wait. I am not buying anything new at this time. I have about 50 percent of my funds in money markets. 

A trend reversal may be in the making. 

Thursday, July 18, 2019

Measuring Economic Freedom and Why It's Important

The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas.

Area 1: Size of Government
As government spending, taxation, and the size of government-controlled enterprises increase, government decision-making is substituted for individual choice and economic freedom is reduced. 

Area 2: Legal System and Property Rights 
Protection of persons and their rightfully acquired property is a central element of both economic freedom and civil society. Indeed, it is the most important function of government. 

Area 3: Sound Money
Inflation erodes the value of rightfully earned wages and savings. Sound money is thus essential to protect property rights. When inflation is not only high but also volatile, it becomes difficult for individuals to plan for the future and thus use economic freedom effectively. 

Area 4: Freedom to Trade Internationally
Freedom to exchange—in its broadest sense, buying, selling, making contracts, and so on—is essential to economic freedom, which is reduced when freedom to exchange does not include businesses and individuals in other nations. 

Area 5: Regulation 
Governments not only use a number of tools to limit the right to exchange internationally, they may also develop onerous regulations that limit the right to exchange, gain credit, hire or work for whom you wish, or freely operate your business. 

The top 10 countries with the most economic freedom are:

1. Hong Kong
2. Singapore
3. New Zealand
4. Switzerland
5. Ireland
6. United States
7. Georgia
8. Mauritius
9. United Kingdom
10. Australia (tied)
10. Canada (tied)

Concepts of economic freedom is also discussed fully in books such as Why Nations Fail, The Birth of Plenty and The Age of Abundance

See the full report on Economic Freedom here.

Here's a quick video from the Frasier Institute, creator of the index. 

Another video from Learning Liberty by Prof. Joshua Hall, Beloit College:

If you really want to learn more about it, here's an hour-long lecture about the economic principles. I like his introduction about the debate over economic theory. 

Tuesday, July 16, 2019

Small Government is the Recipe for Creating Rich Nations

Narrated by Abir Doumit, this mini-documentary from the Center for Freedom and Prosperity Foundation outlines the public policy framework that is necessary for a poor nation to become a rich nation and includes several real-world examples. It also highlights how international bureaucracies hinder development by advocating onerous destructive fiscal policies, which is especially disturbing since today's rich nations all made their big jumps to prosperity when government was very small and taxes were very low.

Monday, July 15, 2019

Investing: Expectations vs. Reality

Investing can be confusing, especially for beginners. To help clear up some of the confusion, we'll take a look at some of the most common misguided expectations about investing and how they compare to reality. - Phil Town

Sunday, July 14, 2019

Fed Rate Cut is Dangerous

From Mohamed El-Erian:

It’s hard to justify a rate cut using traditional metrics. The unemployment rate is at a five-decade low, inflation is not that far below the Fed’s target, financial conditions are the loosest in almost two decades, stock indices are at record highs, and interest rates are already at low levels. Yet the Fed is under tremendous market and political pressure to cut. And it will do so citing the concept of an “insurance cut” – that is, increasing monetary stimulus now in order to reduce the risk of future damage.

But like most insurance you and I get, the one the Fed will embrace is not free for four main reasons:
  • The more the central bank does now, the less room it will have to cut later if domestic economic momentum wanes. (Remember, the current US economic expansion is already an unusually long one, having also set a new record less month.)
  • The greater the policy easing, the stronger the signal to investors and traders to expand their risk appetite even more – and this at a time when several indicators of excessive risk-taking are already flashing yellow if not red.
  • With easing unlikely to have much beneficial economic effects, corporate and economic fundamentals will lag further already-elevated asset prices, thereby accentuating threats of future financial instability that could cause economic harm.
  • The more the Fed stimulates when the economy is in a good place, the more it will be seen as succumbing to undue pressures from markets and the White House. This could damage its credibility and undermine the effectiveness of its future policy guidance.

Mohamed A. El-Erian is the chief economic advisor to Allianz, the corporate parent of PIMCO where he served as CEO and co-CIO (2007-2014). A Bloomberg columnist and Financial Times contributing editor, he was Chair of President Obama’s Global Development Council and has authored two New York Times Best Sellers: the 2008 “When Markets Collide” and 2016 “The Only Game in Town.”

The Key to Winning with Money

Saturday, July 13, 2019

The Hidden Agenda Behind the Global Warming Hysteria

Climate change activists are not just interested in reducing carbon emissions in order to "save the planet." Their underlying desire is to overturn capitalism and replace it with socialist governments worldwide. 

Our story starts with the IPCC, or the Intergovernmental Panel on Climate Change, a U.N. organization. "And any settlement of the Global Warming issue by the UN would entail massive transfers of wealth from the citizens of wealthy countries to the politicians and bureaucrats of the poorer countries." (1)

In 1992, at the first U.N. Earth Climate Summit in Rio de Janeiro, Brazil, Program Executive Director Maurice Strong stated, very candidly: 

"We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?" (2)

Former U.S. Senator Timothy Wirth (D-CO), then representing the Clinton Administration as U.S. undersecretary of state for global issues, joined in by saying: 

"We have got to ride the global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic policy and environmental policy.” (3)

Then along came the Kyoto Protocol. Deputy Assistant of State Richard Benedick supported the Kyoto Protocol, which called for the developed countries to transfer huge sums of money to underdeveloped countries. "A global warming treaty must be implemented even if there is no scientific evidence to back the [enhanced] greenhouse effect.” (4)

The entire history of the movement is quite interesting, when you dive under the covers to seek what is beyond that which is reported in the main-stream media. And it takes courage for scientists and politicians to take an opposing view, or what the climate change activists call "climate-deniers." But then, no one is denying that the climate is -- and has for million of years -- changing. 

If we fast-forward through the Al Gore era (curiously silent since all of his predictions of doom never came true) and the Paris Climate Accords and land in today's world of Alexandria Ocasio-Cortez (AOC) and her Green New Deal we find, that beyond the scare tactics of "we're all going to die in 12 years," her true motive is change our democratic, free-market economy into a government-run socialist system. 

Saikat Chakrabarti, AOC's chief of staff, made the following admission to the Washington Post:

“The interesting thing about the Green New Deal,” he said, “is it wasn’t originally a climate thing at all...Do you guys think of it as a climate thing? Because we really think of it as a how-do-you-change-the-entire-economy thing.” (5)

Just forget the fact that a political action committee founded by AOC and Chakrabarti is under investigation for the illegal diversion of campaign funds (6), but I digress. 

In attendance at the Washington Post interview was Sam Ricketts, climate director for Washington Gov. Jay Inslee (D), who is running for president almost exclusively on a platform of combating global warming. 

Ricketts said, "It is both rising to the challenge that is existential around climate and it is building an economy that contains more prosperity. More sustainability in that prosperity — and more broadly shared prosperity, equability and justice throughout."

So it's really not about climate. It's about economics, or as the left calls it, economic justice, which means equality of outcome, not equality of opportunity. Even Chakrabarti admits, "So if it turns out that our hypothesis is wrong, that just means we need a different strategy." (7) 

If climate change is wrong, then they'll have to find another scare tactic to convince us all that socialism will solve all of our injustices. 

In fact, the entire democratic field is running for president on the fallacy that the middle class is withering away, which I talk about here

But if you pay attention, you'll find that there are many who are openly advocating the overthrow of capitalism and putting private corporations under public control. This is socialism. 

"Rapid and equitable decarbonization, then, means putting these corporations under public control—i.e., nationalizing them, through buying out the majority of their shares...This assault on private property will no doubt trigger fierce resistance from elites. To overcome this opposition, we will need a massive, organized anti-capitalist movement." (8)

Ashley Dawson in the article above claims that buying of all the shares of these corporations would cost $1.3 trillion. Yet the capitalization the NYSE is $30.1 trillion as of February 2018. It's higher today. When even university professors at Stanford call for this type of radical action, is resistance futile? 

No. Because all of these so-called advocates of socialism ignore the basic truth of economics. I say "so-called" because I'm not really sure they even understand what socialism is, referring to large free-market welfare economies like Denmark as socialist, which they are not. Dan Mitchell asks an important question in his article about democratic socialism. You should pay attention.

The underlying principle is the "progressive" movement's long-time desire for an elite to control the masses. 

As U.S. Chamber of Commerce CEO Tom Donhue wrote in February 2019: 

"Climate change is real and deserves our attention. But not every policy to address it can be taken seriously. Take, for example, the Green New Deal – a sweeping proposal to “save our planet” that reads more like a parody of the progressive agenda. No laughing matter, however, is the proposal’s ultimate objective: to give government unprecedented power over people’s lives and our entire economy.

Other aspects of the Green New Deal seem wildly out of place for an environmental resolution. Consider the promise of massive new entitlement programs that could only be achieved through a radical redistribution of wealth. Here, the proposal shows its true colors. This is not some run-of-the-mill progressive policy – it is a Trojan Horse for socialism.

The Green New Deal aims to upend our entire economic system, wresting consumer choice from everyday Americans and putting personal decisions – from the food we eat to the cars we drive – in the hands of an unelected elite."

The claim that the Green New Deal would revive the economy (10) is just not true. Environmental quality is a product of prosperity, which has exploded upon the world since 1820. This is caused by three things: economic freedom with stable institutions, the protection of private property rights (including intellectual property) and the rule of law. (11) (12). 

Angus Madison makes these observations: 

"… From the year 1000 to 1820, growth was predominately extensive. Most of the GDP increase went to accommodate a four-fold increase in population. The advance in per capita income was a slow crawl – the world average increased by half over a period of eight centuries.

In the year 1000, the average infant could expect to live about 24 years. A third died in the firs year of life. Hunger and epidemic disease ravaged the survivors. By 1820, life expectation had risen to 36 years in the west, with only marginal improvement elsewhere.

After 1820, world development became much more dynamic. By 2003, income per head had risen nearly ten-fold, population six-fold. Per capita income rose 1.2 per cent a year: 24 times as fast as in 1000-8120. Population grew about 1 per cent a year: six times as fast as in 1000-1820. Life expectation increased to 76 years in the west and 63 in the rest of the world.
" (13)

What happened after 1820? Capitalism, innovation, rule of law, protection of private property, democracy on scale never seen before. All the things the "progressive" left-wing love to hate. 

One of the reasons cited for the need for this Green New Deal is that unrestrained climate change will cost the U.S. economy $500 billion in the year 2100. Yet if you project the U.S. GDP through the remainder of the century that's about .05 percent of the economy. To implement the Green New Deal is said to cost about $93 trillion (other figures place it at $43 trillion). So why do we need to spend all those trillions in the first place? One reason AOC cites is a "four-decade trend of wage stagnation." (14). As if those trillions will raise wages. 

The problem? The wage narrative, as Bloomberg recently pointed out, is a myth. As in not true. Although wages flattened briefly in the mid-1990s, they have grown steadily since, according to Federal Reserve data. (15) So the underlying reason for the New Green Deal is the radical alteration of our economic system.  

While I won't go into details here, since you can read all about socialism here, and here, and here. It's not a system of government that most people would embrace, though many think it's more fair than capitalism (though defining what's fair is subjective). Socialism -- or Marxism if you will -- has not worked very well when tried. If you really want to dive deep into the Mises school, try this out. 

It will be interesting -- and possibly frightening -- to see how this plays out in the public arena. I believe the great majority of Americans will reject these ideas once they fully know the truth (if this can happen is another great question). It's hard for people to accept the truth when their belief systems have been molded by repeated myths over the years. 

This is the challenge for our time. 


1. The Heartland Institute: About the IPCC.

2. Bell, Larry (2013). The U.N'.s Global Warming War on Capitalism: an Important History Lesson. 

3. Jaworowski, Zbigniew (2007). CO2: The Greatest Scientific Scandal of Our Time.

4. Bell (2013).

5. Montgomery, David (2019). AOC's Chief of Change

6. Dibble, Madison (2019). FEC Opens Investigation into AOC-Tied Justice Democrats Regarding disclosure Discrepancies.

7. Montgomery (2019).

8. Dawson, Ashley (2019). We Can't Beat Climate Change Under Capitalism. Socialism is the Only Way.

9. Donohue, Thomas J (2019). The Green New Deal is a Trojan Horse for Socialism.

10. Green Party US (2019). WE CAN build a better tomorrow, today.

11. Acemoglu, Daron & James A. Robinson (2013). Why Nations Fail, Crown Publishing.

12. Bernstein, William J. (2004). The Birth of Plenty: How the Prosperity of the Modern World Was Created. McGraw-Hill.

13. Maddison, Angus (2007). Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History. Oxford University Press. 

13. Strain, Michael R. (2019). The Story of Stagnating Wages Was Mostly Wrong.

14. Sumner, Scott (2019). The Myth of Stagnant US Wages: Fed Data Show the Story was All Wrong.

Three Spending Habits That Could Affect Your Retirement

Motley Fool recently identified three spending mistakes that are common in retirement.

Many retirees have a trend for falling into financial traps that could reduce their retirement income significantly, according to Motley Fool. These traps include buying things just because they’re on sale, not paying attention to the little things, and spending extra money just because they have it. Find out more below.

1. Buying things just because they're on sale

S-A-L-E! Who doesn’t love that word? The psychology of the sale makes it easy to get caught up in it. According to Psychology Today, sales shift our focus toward what we’re saving rather than what we’re spending.

If the item is something you really need and will use, of course it’s logical to take advantage of the discount. But if you’re purchasing it with the hope of using it later, then you’re spending extra money that could add up quickly.

According to a survey by Slickdeals, the average American spends around $450 per month on impulse purchases. That's around $5,400 per year, or $324,000 over the average lifetime (and assuming you become financially independent at age 18). Nearly 2/3 of those who shop impulsively said they do so because they got a good deal on the item, and 40% said they have purchased something on impulse simply because they had a coupon.

According to Motley Fool, if you put that $5,400 per year you may be spending on impulse purchases toward your savings, that money could dramatically affect your retirement. For example, if you save $5,400 per year in a retirement account earning a 7% annual rate of return, then in about 30 years, you'd have saved around $510,000.

2. Not paying attention to the little things

You may justify spending money each month on "little" costs, thinking that $10 here and there won't hurt. But these costs can quickly add up, and before you know it, you're spending hundreds of dollars per month on "little" things.

If you could save an additional $100 per month by cutting out the little things that you don’t really need, then that money could go further than you may think when you invest it in your retirement fund. By saving just $100 per month earning a 7% annual return on your investments, you’d have accumulated around $113,000 in savings over 30 years.

3. Spending extra money just because you have it

It’s tempting to want to treat yourself to a special vacation or the newest technology gear when you get extra money from a tax return or a bonus at work. There may be no harm in occasionally splurging, but be mindful that you’re possibly doing so at the risk of your retirement.

It’s not easy to save for a comfortable retirement regardless of how much money you earn. The more you make, the more you spend, according to Nielson Insights—so making a lot of money doesn’t always equal a secure retirement. But if you're consciously wasting money on things you don't need, these bad habits could end up costing you thousands of dollars and an uncertain financial future.

You can read the complete
 Motley Fool article here.

Friday, July 12, 2019

How to Calculate a Return on Investment (ROI)

Good tutorial on calculating different ROI using five key measures: 1) Holding Period Return, 2) Compounded Annual Growth Rate (CAGR), 3) Real Return, 4) Tax-Adjusted Return, and 5) Risk-Adjusted Return. 

Five Inequality Myths

If you really want to understand how the world works today, you need to rethink almost everything you’ve been told about inequality. Prof. Antony Davies explains.

If you wish to dig deeper into this subject, I recommend Thomas Sowell's Economic Facts and Fallacies, 2nd Edition.

Wednesday, July 10, 2019

Myth: The Middle Class in the U.S. is Disappearing

Elizabeth Warren claims the middle class is under attack. "The middle class is under attack. Fight for an economy that works for all of us. Save Our Democracy. Join Our Fight. Rebuild the Middle Class." 

Bernie Sanders has said: “The middle class of this country, over the last forty years, has been disappearing.” 

In fact, most Democratic candidates are using this fallacy as part of the campaign platforms. 

All are wrong. 

The following chart shows the truth. In fact, while the middle class has been declining, so has the lower income classes. However, the upper middle and upper classes have been increasing in size. Over the last 40 years, the U.S. economy has created more prosperity. (All income figures have been adjusted for inflation and are quoted in today's dollars.)

Change your life -- Dave Ramsey Rant

Personal finance is 20 percent knowledge and 80 percent behavior.

Top Five Consumer Cyber Security FAQs

By Equifax Business, technology, environmental and economic changes are a part of life, and they are coming faster all the time. All of thes...