Yearly Archives: 2013

Hopeless Savers: 0.26% on Money Markets

"The plight of savers in America is hopeless. We know that price inflation is over 2% per year. What do investors get in a money market fund? A pathetic 0.26%. Then they pay income taxes on this 0.26%. What if they do not want to tie up their money for a year? Then they get 0.12%. Before taxes. What about interest-bearing checking accounts in an FDIC-insured bank? These pay 0.05%. Let’s be honest. Let’s round it off (after taxes) to zero. The saver is falling behind. The rate of price inflation is eating into the saver’s net worth by at least 2.9% per year. How much money is deposited in money market accounts. About $2.6 trillion. This is up by $2.6 billion this week. This is a recovery?" Continue reading →

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Investors (Suckers) Say They Have Things Under Control

"Today, 56% say they are confident about the future. This means that 44% aren’t confident. Today, 42% say they have increased their tax-deferred retirement savings. This means that 58% haven’t. Today, 55% say they are better prepared for retirement than in 2007. This means that 45% don’t think they are. Today, 42% have increased the size of their emergency fund. This means that 58% haven’t. We are asked to believe that people’s personal savings rate is up since November 2007, the month before the recession is said to have begun. Yes, it is — by a percentage so tiny that it is barely visible." Continue reading →

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Maybe This Is Why We Now Have a Serial-Bubble Economy

"If there is any one strikingly obvious feature of the U.S. economy in the past 15 years, it's the serial asset bubbles, one after another. Take a look at this chart. Why did our economy become dependent on asset bubbles for 'growth'? One way to find an answer is to ask: cui bono, to whose benefit? Correspondent Jeff W. has the answer: the financial sector and the central government." Continue reading →

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Non-Traditional Retirements, or DIY Sabbaticals

"NPR Morning Edition featured a story today about non-traditional retirements: Seeing The (Northern) Light: A Temporary Arctic Retirement. Instead of waiting until 65, Winston Chen decided to stop working for an entire year mid-career and moved his family to a small Norwegian island in the Arctic Circle with only 180 residents. Our society seems to feel that education is for the young, work is for the middle-aged, and leisure is for the elderly. But what if you decided to snip 5 years from those retirement years and sprinkle them between your working years?" Continue reading →

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Election won’t prevent pension crash

"The tax gap isn't the deepest divide in America. The deepest gap is the pension divide, between those few who have a guaranteed cushion in the form of defined-benefit pensions, which promise a fixed annuity at retirement, and those who don't. How the candidates address this divide, cultural as well as political, is crucial, far beyond November. To understand the current mindset, it helps to consider the pension culture of the past. In the early 1980s, many companies, as well as governments, offered employees a defined-pension benefit when they retired. Thirty years ago, about 62 percent of American workers were covered by some kind of plan like this." Continue reading →

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Retire at 65. Become a Ward of the State.

"PBS had a recent article about retirees who stay in the work force beyond age 65. It interviewed economists. What it did not do was provide statistics on how many Americans work until age 75. The answer is: hardly any. Most Americans do not have enough savings. They retire anyway. Most Americans believe in the tooth fairy: the federal government. They think the checks will keep coming. They will not budget. They will spend their $120,000 long before they die. Then what?" Continue reading →

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‘A tide of squatters’ spreads in Spain in wake of foreclosures

"If the organization known as Okupatutambien, or 'Become a Squatter Too' has its way, the country will see a mass expropriation of abandoned or repossessed property to resolve the housing crisis. According to a 117-page “Squatters’ Guide” published on the Internet by the group, there are 3 million empty homes in Spain, or about 100 for each of the 30,000 homeless. The guide advises would-be squatters on how to stake out, enter and remain inside properties, leaving the rightful owner and authorities powerless to evict them. It also offers free counseling from an office in downtown Madrid on how to siphon water and electricity from municipal supplies and how to deal with law-enforcement officers." Continue reading →

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Most people expect to be worse off than parents – except U.S., Chinese

"A 'squeezed generation' of middle-aged Europeans are convinced they are going to be poorer in retirement than their parents, according to a global survey that found the Chinese the most confident about their future and the French, Germans and Spanish the most pessimistic. Americans are the most sure they will enjoy their retirement, the British are among the most likely to worry about being lonely, while individuals in Eastern European countries are uniformly morose about their future. In the survey, 43% of Japanese said they associate retirement with 'insecurity' compared to just 13% in China and the US, and 15% in the UK." Continue reading →

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Voluntary Slavery in Action? ‘Why I Am Leaving College’

"How will I pay my bills? I’ve decided to sell 10% of my (after tax) income for the next 10 years of my life. Why? I’m realistic enough to know that as a 19 year old female, with no proven track record, I have about a 0% chance of finding someone to invest in Senior Living Map. So to up the stakes, I’m offering a piece of me. I can’t guarantee Senior Living Map will be a success but I can guarantee that I will be. So instead of asking you to “bet” on my first venture, I’m asking you to bet on me. I’m asking you to bet and believe that in 10 years time, 10% of my income will be your best investment." Continue reading →

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