Good afternoon,
“Warning lights are flashing…” So says presidential candidate Elizabeth Warren regarding the next coming economic crisis.
https://www.cnbc.com/2019/07/22/elizabeth-warren-warns-next-economic-crash-is-coming.html
Of course they are. When aren’t they flashing? Always fear mongering. Has there ever been an aspiring politician who doesn’t think that the sky is falling? Unless you hire them to hold it up. Honestly, we’re getting pretty tired of all the negativity. It’s unproductive and saps energy that could be better used elsewhere. The depressing tilt and negative reporting are the main reasons that the WMR refuses to watch TV news. Especially local TV news. We don’t like the constant commercials either, but we’ll save that rant for another time. And we’re not just picking on Ms. Warren, whom we admittedly have a fairly low opinion of, but there are lots more people of that ilk. Politicians, reporters, economists, newscasters and so forth. We honestly wonder how they lift their heads off the pillow most mornings. We heard a definition of worry which we like, worry = praying for bad things to happen. So we try not to. We also like this wisdom from the Dalai Lama, “If a problem is fixable, if a situation is such that you can do something about it, then there is no need to worry. If it's not fixable, then there is no help in worrying. There is no benefit in worrying whatsoever.”
All that said, there will, someday, be another crisis. There will, someday, be another bear market. Since those are situations for which we can prepare, we don’t need to worry. Call me and let’s make sure you’re prepared.
“A penny saved is a penny earned.” – 17th century proverb.
This article https://www.cnbc.com/2019/07/18/valuable-pennies-worth-up-to-200000-might-be-sitting-in-your-pocket.html talks about certain pennies that are worth far more than 1 cent. Might want to check your pockets and your piggy bank to see if you happen to have any of them.
Are you rich? There are many definitions of rich, but in terms of the size of your wallet, it needs to be pretty thick.
According to this survey, in order to be considered “rich,” Americans say that you need a net worth of $2.3million. If you’re still working, you need to earn $300,000+ per year to reach richness.
https://www.cnbc.com/2019/07/18/how-much-money-you-need-to-be-rich.html
Rich is subjective. The WMR rarely tries to shoot for a certain number, we just want our clients to have enough money so that they don’t have to worry about money. In any case, getting richer is simple, just spend less than you earn and invest the difference. And it doesn’t matter when you start. Earlier is better of course, but at the same time, it’s never too late.
“Never knew how poor I was until I started making a little money.” – Bud Fox.
Speaking of getting rich, here is some Naval Ravikant advice on how to get rich without getting lucky.
https://fourpillarfreedom.com/naval-ravikant-on-how-to-get-rich-without-getting-lucky/
Short answers are:
Seek wealth, not money or status
Making money isn’t about luck
You won’t get rich renting your time
Live below your means
Develop specific knowledge
Learn to sell, learn to build
The WMR has become a huge fan of Naval. Self made billionaire and very smart guy with very common sense strategies for common sense solutions. He likes to point out that wealth is not a zero sum game. Because one person gets rich has no bearing on whether anyone else can get rich.
Here is his podcast which explains everything about how to get rich. https://podcasts.apple.com/us/podcast/how-to-get-rich-every-episode/id1454097755?i=1000440401437
He’s also very interesting to follow on Twitter.
In striving for fairness this week, let’s give a bit of time to another presidential hopeful. In a bit of delicious irony, Bernie Sanders is getting a lesson in economics. Seems that his staff demanded that he pay them a $15 per hour minimum wage. Turns out that some jobs just aren’t worth $15/hour, like stuffing envelopes for a political campaign. In order to meet that request, he’s had to cut their hours and bring on more pro bono volunteer help. And he’s got to have a little talk with the unions who want to represent his workers. https://www.foxnews.com/opinion/michael-knowles-bernie-sanders-socialism-minimum-wage-campaign-workers
You’re late to the capitalism party Bernie, but at least you finally showed up.
Here’s an economics story closer to home. All of the WMR offspring now have their own bank accounts and affiliated debit cards. Into which they can deposit their earnings (gained from giving tennis lessons, working in a retail clothing store and babysitting, respectively.) Each has been warned that the debit card has a limit of whatever is in the account and that Mom and Dad do not intend to subsidize those accounts for what we would consider “non essential” expenses. They’ll need to learn to budget for things like movies, tchotchkes and other items that go beyond food, clothing, shelter and education. Since the resources of those accounts is finite, we’re hoping that they’ll learn quickly how badly they desire certain expenses over others. Behavioral economics at street level. No charge.
LF25 – “So, the purpose of wealth is freedom. It’s nothing more than that. It’s not to buy fur coats, or drive Ferraris, or sail yachts, or jet around the world in your Gulfstream. That stuff gets really boring and really stupid, really fast. It’s really so that you are your own sovereign individual.” – Naval Ravikant.
Have a great week.
Michael J. Acho, MBA, CFP®
Private Wealth Advisor
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Lincoln Financial Advisors/Sagemark Consulting
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Southfield, MI 48075
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Michael.Acho@LFG.com
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