To get crime under control, vote Republican

[homersapien 11,357]

6 minutes ago, I_M4_AU said:

How is the stock market reacting to Biden’s *Inflation Reduction Act*?  You said you lost 100’s of thousands on paper and don’t expect a recovery for 5 years or so.  And that will be when Biden is out of office and then, maybe, there will be more confidence in the market if the government isn’t run by a dementia patient.  

The stock market is reacting to the Feds interest rate increases which is predictable whenever inflation strikes. They fear the Fed might go too far and spark a recession which will affect corporate earnings.

It has nothing to do with Biden's (stupidly named) "inflation reduction act". That act instituted a 1% tax on stock buybacks and 15% minimum corporate tax on certain companies. (Which I support as long term policy.)

"If anything, the main short-term effect from this new tax could be companies deciding to pull forward their buyback plans in the hope of completing them before the tax kicks in next year."

https://www.google.com/search?client=firefox-b-1-d&q=inflation+reduction+act+effect+on+stock+market

Pulling forward stock buyback plans is hardly responsible for the market drops.  If anything, that would provide a short term boost to a companies stock.

The current inflation is world-wide and was caused by the pandemic plus the Russian invasion of Ukraine.  Biden didn't cause it and there's damn little he - or any other POTUS - can do about it. 

The only way to combat inflation is to reduce demand, and the classical way of doing that is by the Fed increasing rates.  That won't change with a change of presidents. 

 

[homersapien 11,357]

7 minutes ago, arein0 said:

Yes! I believe the easiest  way to wealth is figure out your expenses, keep a little in a savings account and invest the rest. If you are fortunate to have a salary income, automate your investments so you dont even have to think about it. I also agree with a bunch of your statements, live well below your income. 

People always worry about a recession, but I feel like people forget to zoom out. In the big picture, itll be just a little blip where you are able to buy lots for less. 

The one thing I try to emphasize to young people is to understand the value of time - and starting early in investing - is the inherent mathematics associated with compounding returns (reinvesting your earnings). 

Most people don't think about investing for retirement until they get into their 50's, whereas, I was able to retire at age 50.  The difference in how much you can accumulate is dramatically affected by starting early and taking advantage of the time you have.

 

https://www.businessinsider.com/amazing-power-of-compound-interest-2014-7

[I_M4_AU 7,785]

13 minutes ago, homersapien said:

The stock market is reacting to the Feds interest rate increases which is predictable whenever inflation strikes. They fear the Fed might go too far and spark a recession which will affect corporate earnings.

It has nothing to do with Biden's (stupidly named) "inflation reduction act". That act instituted a 1% tax on stock buybacks and 15% minimum corporate tax on certain companies. (Which I support as long term policy.)

"If anything, the main short-term effect from this new tax could be companies deciding to pull forward their buyback plans in the hope of completing them before the tax kicks in next year."

https://www.google.com/search?client=firefox-b-1-d&q=inflation+reduction+act+effect+on+stock+market

Pulling forward stock buyback plans is hardly responsible for the market drops.  If anything, that would provide a short term boost to a companies stock.

The current inflation is world-wide and was caused by the pandemic plus the Russian invasion of Ukraine.  Biden didn't cause it and there's damn little he - or any other POTUS - can do about it. 

The only way to combat inflation is to reduce demand, and the classical way of doing that is by the Fed increasing rates.  That won't change with a change of presidents. 

 

The question isn’t who is responsible for inflation, its who can get us out.  The FED raising the rate is a way to get us out, but it will hurt.  It did in the 80’s when mortgage rates were much higher than they are now.  If you are position well to ride it out, great, but if you’re not…..

Yet, Biden still wants to throw money at all kinds of problems like student debt relief which will increase the deficit without any equity for America.  This is not a winning solution.

[SaltyTiger 7,775]

1 hour ago, homersapien said:

OK, here's my  (simplified) "secret" (at no charge):

1) Don't have children

2) Live way beneath your means and invest the difference.  Weighted your portfolio toward equities, 60+% .

3) Avoid debt (especially consumer debt and large ticket items - like cars - that don't appreciate)

4) Stick with it and wait about 50 years

This won't get you extremely wealthy, but it will likely give you enough financial independence to retire early if you want. 

Obviously, this may not be the best formula for everyone, but it worked for me.

Recommended reading: 

The Millionaire Next Door  

Total Money Makeover by David Ramsey (I used to listen to his show). 

And possibly, Rich Dad, Poor Dad" (which I haven't read but it sounds very similar to Millionaire Next Door. 

Would like but you are wrong on #1 imo. Some of the better financial relationships I ever had came through people I would have never met had I not had children. Also, children keep “your feet on the ground” and motivate some of us.

Probably best that you never procreated though.😏

 

[homersapien 11,357]

37 minutes ago, I_M4_AU said:

The question isn’t who is responsible for inflation, its who can get us out.  The FED raising the rate is a way to get us out, but it will hurt.  It did in the 80’s when mortgage rates were much higher than they are now.  If you are position well to ride it out, great, but if you’re not…..

Yet, Biden still wants to throw money at all kinds of problems like student debt relief which will increase the deficit without any equity for America.  This is not a winning solution.

Neither is granting huge tax breaks oriented toward the wealthy and large corporations.

At least student debt relief is relatively minor in scope (about 500 billion).  And it helps those citizens who need it the most. (Obviously, it was never meant to address inflation.)

However, according to higher-education experts, economists and recent research, canceling student debt is likely to bump up inflation only in a minor way. In the grand scheme of the student forgiveness debate, experts told Money that inflation is actually among the least of their worries.

https://money.com/how-student-loan-forgiveness-affects-inflation/

 

And yeah, "taking away the punch bowl" in an overheated economy causes some people pain, but unfortunately, that's the cure.  (Unless you want to try price controls like Nixon wanted.)

Edited November 6, 2022 by homersapien

[homersapien 11,357]

55 minutes ago, SaltyTiger said:

Probably best that you never procreated though.😏

 

It certainly seems like a wise and responsible choice today, considering the existential threats we face  as a species and the world's ecosystems that are ultimately tied to over-population. 

I thought about it long and hard back in 1974. It was a "values" question for me. 

I understand that many people have an innate urge to have children.  Others - IMO - simply fall into it by marrying someone else who has that urge,or just get pregnant by accident.  I lacked that urge.

I don't regret it.  I have enjoyed continuing relationships with nieces, nephews and even unrelated children - who are now adults - in sort of a godfather mode.  In the latter cases I am treated virtually as a parent.

The only reason I listed it is because my wife and I fully appreciate the financial advantages we had by being childless. 

It's OK if having a child is what you really want, and we understand there is a universe of benefits in having children, just not financial.  (That's why I said my formula doesn't necessarily work for everyone.)

And let's face it, there are a lot of people who don't make good parents as well as a lot of unwanted or neglected children. 

We think it's better for our world's future for people who aren't really wired - or prepared - for kids to choose the option to forgo them.

Edited November 6, 2022 by homersapien

[I_M4_AU 7,785]

1 hour ago, homersapien said:

Neither is granting huge tax breaks oriented toward the wealthy and large corporations.

At least student debt relief is relatively minor in scope (about 500 billion).  And it helps those citizens who need it the most. (Obviously, it was never meant to address inflation.)

However, according to higher-education experts, economists and recent research, canceling student debt is likely to bump up inflation only in a minor way. In the grand scheme of the student forgiveness debate, experts told Money that inflation is actually among the least of their worries.

https://money.com/how-student-loan-forgiveness-affects-inflation/

 

And yeah, "taking away the punch bowl" in an overheated economy causes some people pain, but unfortunately, that's the cure.  (Unless you want to try price controls like Nixon wanted.)

To my point; cancelling student debt is likely to bump inflation, which means its not solving the problem.  When will these bumps stop under Biden?

[I_M4_AU 7,785]

@arein0you are young and in the growth phase of you investments as you have said.  You will want this inflation to be over as soon as possible.  Biden throwing money at things that doesn’t help the nation’s bottom line doesn’t help.

I had to ride through Carter’s inflationary polices at a time I was trying to establish my career and it was tough.  I was lucky I made it, some didn’t fair as well.

[homersapien 11,357]

1 hour ago, I_M4_AU said:

@arein0you are young and in the growth phase of you investments as you have said.  You will want this inflation to be over as soon as possible.  Biden throwing money at things that doesn’t help the nation’s bottom line doesn’t help.

I had to ride through Carter’s inflationary polices at a time I was trying to establish my career and it was tough.  I was lucky I made it, some didn’t fair as well.

Actually, unemployment and inflation preceded Carter's election. And then there was the Arab oil embargo which supercharged it (not in Carter's control).

Carter made mistakes for sure, but to imply our problems back then were mostly due to his policies is way too simplistic.  In fact, one could say that about almost any president.

Here's an interesting book review on the subject:

(emphasis mine)

https://eh.net/book_reviews/jimmy-carters-economy-policy-in-an-age-of-limits/

Jimmy Carter’s Economy: Policy in an Age of Limits

Author(s):	Biven, W. Carl
Reviewer(s):	Bates, Toby G.

Published by EH.Net (January 2004)

W. Carl Biven, Jimmy Carter’s Economy: Policy in an Age of Limits. Chapel Hill: The University of North Carolina Press, 2002, ix + 346p., (Hardcover), ISBN:0-8078-2738-X.

Reviewed for EH.Net by Toby G. Bates, Department of History, University of Mississippi

W. Carl Biven’s Jimmy Carter’s Economy: Policy in a Age of Limits examines the steps and missteps in the national fiscal strategy of the Carter administration and details a president tested by economic forces over which he possessed limited control. The author utilizes personal interviews with former members of the Carter administration, as well as an exhaustive examination of primary and secondary material, to detail a coalescence of events that faced the new chief executive. The severity of the economic problems prevented the application of any lasting solutions. In a business-like chronological narrative Biven argues that Carter inherited many of the complex economic problems of his term, gamely attempted various solutions, but in the end failed due to his management style, political infighting, and the overall limits forced by the dire economic times upon government policies.

Biven details three central problems that haunted the Carter administration: the Iranian hostage crisis, division in the Democratic Party, and most importantly the national economy. Double-digit inflation, slow national growth, high unemployment, a decline in the rate of growth of output per worker, and serious international economic challenges from Japan and Germany remained just a few of the problems the thirty-ninth president faced upon entry into the White House. Biven describes a Democratic party traditionally committed to full employment and the protection of the welfare state. The author concludes, however, that Carter understood that to confront the economic ills challenging the nation his political party needed to reconsider traditional national priorities and undertake an overall shift to the political center.

Carter’s personality and work traits played a role in his administration’s reaction to the economic despair confronting the nation. The president focused, such as in the case of inflation, on the microeconomic problems as opposed to macroeconomics. The author suggests that Carter preferred problems of a micro-nature where less of a chance existed for political or other outside entanglements. Biven quotes government officials that suggest that the president, due to his background in engineering, remained too wedded to minute details.

Biven begins his scholarship with an examination of the 1976 presidential election. He argues that while the economy had begun to recover from the severe recession suffered under President Gerald Ford, a different perception existed between true statistical recovery and an awareness of an upturn among the American populace. High unemployment and inflation dogged the incumbent, and Carter subsequently won a close election. Biven argues that initially Carter utilized traditional Democratic economists that remained wedded to Keynesian ideals. The problem, however, was that while these economic advisers focused at the outset on unemployment, the true threat to economic stability remained inflation. Biven writes that it was not until early 1979, after what the author describes as an inflation explosion, that Carter’s advisors shifted into anti-inflation mode and recognized the problem as issue number one. In other words, the economic problems in the mid to late 1970s required new ways of thinking, as the nation faced unprecedented troubles.

Biven details not only the domestic economic problems confronting the nation but the tensions inside the government to reach solutions. Carter did not possess a great deal of knowledge concerning economics so it was vital for the president to be surrounded by qualified advisors. The author documents the efforts of the Economic Policy Group, labeled by some as the Troika, to confront many of the nation’s economic woes. The first Troika consisted of the Secretary of the Treasury Michael Blumenthal, the Director of the Office of Management and Budget Bert Lance, and the Chairman of the Council of Economic advisors Charles Schultze. The Economic Policy Group also contained the secretaries of state, commerce, labor, housing and urban development, as well as the national security advisor. A Quadriad of advisors also possessed a role in economic policy as it consisted of the Troika as well as the Federal Reserve Chairman. Tensions surfaced as many viewed the groups as being too large and unwieldy to supply a coherent economic strategy. Personal politics played a part as well as many members of the Economic Policy Group practiced differing political beliefs and played to conflicting constituencies.

The author writes that due to the economic policy limits placed upon the nation Carter’s subsequent move to the ideological center on fiscal strategy alarmed many Democrats. Branded a reluctant Keynesian and a financial conservative, the president faced great opposition from many members of his own party in the passage of many economic programs. The first signs of trouble arrived in the debates concerning passage of a stimulus package, tax cuts and a jobs program, in the first few months after the inauguration. Carter also experienced difficulty with many of his own party members in Congress on the passage of energy legislation. Biven argues that the president’s difficulties with a Congress dominated by members of his own party contributed to the domestic image of Carter as a weak national leader.

Biven describes the various international efforts of the Carter administration to increase economic growth. He writes of Carter’s efforts to press West Germany and Japan to join the United States in a joint expansion effort as he sent Vice President Walter Mondale overseas to garner support. While the Germans remained skeptical, the Japanese displayed a warm if not cautious reception. Biven also writes of the 1978 Bonn summit in which Carter hoped to increase support for international expansionary policies. Debates among allies concerned American oil imports and the trade surpluses of Germany and Japan. The author awards mixed success to the American president.

Unlike issues of inflation and unemployment that preceded the Carter years, Biven does describe some “self-inflicted wounds” of the administration. The author devotes one section of his work to what he describes as the narrower, microeconomic decisions that influenced the Carter administration’s approach to the inflation problem. The author examines the Social Security tax increase, periodic minimum wage expansion, economic and social deregulation, and issues involving trade restriction. Biven concludes while many of the programs remained necessary in the grand scheme of things, the administration complicated the inflation picture on matters of micro-concern.

He details the limits of presidential power in relation to the economy and in a similar vein the relationships of Carter with the Federal Reserve chairmen of the time: Arthur Burns, William Miller, and Paul Volcker. The president did not enjoy a close relationship with Burns, the chairman inherited from the Ford administration, as Carter feared that his stimulus plan would suffer if the Federal Reserve responded with monetary restraint. After Miller moved to the treasury department, the arrival of Volcker again brought intermediate frustration for Carter. Regardless of tensions, he argues that Carter deserves a great amount of credit for the appointment of Volcker to the Federal Reserve as the chairman’s monetary polices after Carter left office eventually broke the back of inflation.

Biven argues convincingly that economic limits set boundaries to the policy options available to Carter and placed his administration on a more conservative fiscal path. In a clear presentation the author reveals that monies normally available for traditional Democratic programs did not exist, as the slow growth of the national economy did not provide needed revenue. The conservative direction resulted in the developments of fissures in the president’s party and election year troubles for the incumbent. Biven describes Carter’s administration as well as the president’s economic policies as both occurring during a transitional time for the American financial system. He writes that the historical record remains unclear if the soaring inflation of the late 1970s, the president’s number one nemesis, resulted solely from the actions of Carter’s administration. The president realized that the national economy could no longer be viewed as an unlimited source of revenue and instead had to work within an atmosphere of limits. Biven concludes rightfully that before historians declare Carter’s a failed presidency, scholars should first examine the severe economic limits forced upon and contained within his four years in the White House.

 

 

 

Edited November 6, 2022 by homersapien

[arein0 950]

2 hours ago, I_M4_AU said:

@arein0you are young and in the growth phase of you investments as you have said.  You will want this inflation to be over as soon as possible.  Biden throwing money at things that doesn’t help the nation’s bottom line doesn’t help.

I had to ride through Carter’s inflationary polices at a time I was trying to establish my career and it was tough.  I was lucky I made it, some didn’t fair as well.

I dont think I follow your logic. I am able to get more shares at a discount price. Once we come out of this phase, my investments will take off. I'm not worried about my investments at all. Time in the market is more important than timing the market

[SaltyTiger 7,775]

4 hours ago, homersapien said:

It certainly seems like a wise and responsible choice today, considering the existential threats we face  as a species and the world's ecosystems that are ultimately tied to over-population. 

I thought about it long and hard back in 1974. It was a "values" question for me. 

I understand that many people have an innate urge to have children.  Others - IMO - simply fall into it by marrying someone else who has that urge,or just get pregnant by accident.  I lacked that urge.

I don't regret it.  I have enjoyed continuing relationships with nieces, nephews and even unrelated children - who are now adults - in sort of a godfather mode.  In the latter cases I am treated virtually as a parent.

The only reason I listed it is because my wife and I fully appreciate the financial advantages we had by being childless. 

It's OK if having a child is what you really want, and we understand there is a universe of benefits in having children, just not financial.  (That's why I said my formula doesn't necessarily work for everyone.)

And let's face it, there are a lot of people who don't make good parents as well as a lot of unwanted or neglected children. 

We think it's better for our world's future for people who aren't really wired - or prepared - for kids to choose the option to forgo them.

Nothing at all wrong with coming to a well thought decision to be childless. Be wonderful if everyone realized the responsibility. 
 

Never really looked at it with financial lenses other than I would not take any amount of dollars for the memories of bringing up 3 boys. They are still my continually joy and won’t bore you with how great grandkids are.

[SaltyTiger 7,775]

4 hours ago, I_M4_AU said:

To my point; cancelling student debt is likely to bump inflation, which means its not solving the problem.  When will these bumps stop under Biden?

I do not get heartburn over some debt cancellation. Neither here nor concerning inflation. The root of the problem does need addressing.

https://www.nerdwallet.com/article/loans/student-loans/joe-biden-student-loans

His critics say he has failed to address a core problem that prompted public pressure for forgiveness in the first place: sky high college costs and record inflation that has spurred interest rates student loans to rise after years of lows.

[I_M4_AU 7,785]

3 hours ago, arein0 said:

I dont think I follow your logic. I am able to get more shares at a discount price. Once we come out of this phase, my investments will take off. I'm not worried about my investments at all. Time in the market is more important than timing the market

When I had to survive the inflation in Carter’s time it wasn’t about investments it was about putting food on the table when I was not established in my career.  Those years were also rough on my career choice as my industry was down due to the *fuel crisis*.  You obviously are past that phase, good for you.

[arein0 950]

Just now, I_M4_AU said:

When I had to survive the inflation in Carter’s time it wasn’t about investments it was about putting food on the table when I was not established in my career.  Those years were also rough on my career choice as my industry was down due to the *fuel crisis*.  You obviously are past that phase, good for you.

Ah that makes sense. I can definitely see that. 

[homersapien 11,357]

12 hours ago, I_M4_AU said:

When I had to survive the inflation in Carter’s time it wasn’t about investments it was about putting food on the table when I was not established in my career.  Those years were also rough on my career choice as my industry was down due to the *fuel crisis*.  You obviously are past that phase, good for you.

Yeah, if I extended my list, I'd add "have good luck".

People tend to underestimate the influence of good or bad luck in their lives, IMO.

I lucked out with my first job (post graduation) being with a very profitable and growing company. 

I was also lucky with summer jobs I had during school - hard and dangerous (steel by-products mill) but good pay.

Edited November 7, 2022 by homersapien

[homersapien 11,357]

16 hours ago, arein0 said:

I dont think I follow your logic. I am able to get more shares at a discount price. Once we come out of this phase, my investments will take off. I'm not worried about my investments at all. Time in the market is more important than timing the market

Dollar cost averaging.   That's a healthy way of looking at down markets.

My issue now is I am a little over weighted in equities (for my age), but I am reluctant to adjust my allocations until the market improves (if that makes any sense).

Edited November 7, 2022 by homersapien

[I_M4_AU 7,785]

13 minutes ago, homersapien said:

Yeah, if I extended my list, I'd add "have good luck".

People tend to underestimate the influence of good or bad luck in their lives, IMO.

I lucked out with my first job (post graduation) being with a very profitable and growing company. 

I was also lucky with summer jobs I had during school - hard and dangerous (steel by-products mill) but good pay.

Another one you can add is don’t get divorced.  This kind of falls under *good luck*, but I have known several that have divorced and it put a serious dent in their financial well being.

[homersapien 11,357]

27 minutes ago, I_M4_AU said:

Another one you can add is don’t get divorced.  This kind of falls under *good luck*, but I have known several that have divorced and it put a serious dent in their financial well being.

Absolutely.  Left that one out too.

And having children prior to the divorce makes it worse.

Edited November 7, 2022 by homersapien

[SaltyTiger 7,775]

6 hours ago, homersapien said:

And having children prior to the divorce makes it worse.

New ballgame and a huge problem for all concerned.