The Economy Will Be Just Fine: 40,000 People Can’t Be Wrong!

As the markets were melting down this past week I decided to go watch the World Champion San Francisco Giants beat up the lowly Arizona Diamondbacks in the middle of the day.  It’s quite a treat to watch every game this season because of our current world champ status.  Next season, we’ll be just another team, trying to figure out our way back to glory.

At $80 a ticket, access doesn’t come cheap, but with the ticket comes all you can drink cervezas.  Besides, 1pm games are the best on sunny days.  Might as well go!  When my friends and I got there, we were shocked.  The stadium was absolutely PACKED!  We are talking 40,000 people enjoying a baseball game in the middle of a work day.  See picture above.

I thought about it for a second and came to the realization that the reason why 40,000 people can spend on average $50 per ticket during the middle of the day is because despite the market meltdown, we all have job security or don’t need to work because we have the disposable income to spend.   With a sample set of 40,000, it’s obvious that the economy will be just fine and that unemployment is actually better than what the media drones on and on about.

Think about it.  If you were broke, you’d just stay at home or go to a bar and watch the game on TV for free.  If you were worried about your job, you wouldn’t ditch the afternoon to go watch a game.  You’d be working your tail off and trying to add value.  If you were unemployed, you aren’t sweating it because you’re getting $1,450/month in unemployment income for 99 weeks.  Spending $50 might be more wisely spent elsewhere, but it’s sunny, and it’s the SF Giants we’re talking about!

People have more money than you know.  Why else do you think companies like Apple, Prada, and Tiffany’s are doing so well?  I went to visit my friend’s new place this past weekend and it was awesome!  They had been living in a quaint 1,300 square foot apartment for the past several years and now own a 5 bedroom, 4,600 house on a half acre in one of the most prime areas for $3.3 million!  He said he wasn’t looking to buy, but couldn’t pass up such a good deal when he was able to sell some of his start-up company shares.  Not bad for a guy in his mid-30s just 5 years out of business school wouldn’t you say?

Don’t listen to media schadenfreude about how bad unemployment and the economy are.  They are just bitter they are tied to their desks and can’t come out and play.  I’ve got my finger on the buy trigger come flash crash, Moody’s/Fitch credit downgrade, banishment of US treasuries by foreigners and political gridlock.  And, I’ll bet you a hundred bucks that the rest of you are thinking the same thing as well.  Why?  Because you’ve got the cash baby!

Readers, do you believe the economy is better than perceived?  Do you have some some positive anecdotes you can share with the rest of us?  What could be some pessimistic viewpoints with my story for all you Debby Downers out there?




Things Totally Worth Splurging Money On

It’s good to be frugal by nature.  You will likely never get into financial trouble as a result.  You will always be able to appreciate things since you’re never buying the best and most expensive stuff.  Sometimes, however, it’s good to splurge.

You’ve already read “‘No Point Making Money If You Don’t Spend Your Money“, and I’m sure many of you agree.  We work so hard every day for our money, and to just hoard all of it in a bank account is such a crying shame.  There is no dearth of ways to make money, so we are actually much more afraid of running out of money than reality.

Time and time again, I see people who’ve been let go find jobs and security again.  I’ve seen people invest their life savings in a project, only to lose it all.  But, they are still alive and finding ways to live fulfilling lives again.

I get a sense we’re now too cautious with our money.  We’ve been permanently scarred by the multiple evaporations of wealth over the past 15 years that we’d rather not spend on some of the most important things that give us happiness and comfort.  Look at wealth indicators now vs. 2008.  It’s taken 3 years, but on average, we’ve all breached our 2007 highs and some of us, by a lot.  This is important since I can’t imagine us going through such a massive downturn like that again, at least for the next 10 years.  In the meantime, don’t be afraid to spend your money on things you cherish, like a $1,000 doggie stroller for your beloved Chow Chow named “Bear”!


Hunting For The Best CD Rates

Once a week I go yield hunting.  I’m always looking for the best rates possible for my cash because I know that if I save X amount with a Y percentage yield, I’ll eventually reach my magical yearly cash flow number which will allow me to retire early if desired.

To get to your magical retirement number quicker, you can either save more or look for better returns.  Currently 80% of my cash hoard is locked up in 5-7 year CD’s yielding on average 4%.  The “problem” I currently have is that every year I work, is another year’s worth of savings I have to figure out what to do with it.

As you can see from my nifty CD banner to the right, I don’t have to look very far at all to keep track of what the best CD rates are in the entire country.  The widget keeps track of all the rates for me and for all of you who visit this site regularly.  I clicked on a Capital One 3% CD to see what it’s all about, and discovered it’s a 10-year CD! Doh….


The Average 401k Balance And Why It’s Too Low

Beef Wellington Medium Rare 401KAccording to Fidelity, one of the largest 401k providers in the world with over 12 million accounts, the average 401k balance is now around $77,300 as of 2/14/2013. In March of 2014, Vanguard reported that the average 401k balance has now shot up to $101,650. For workers 55 years of age or older, the average balance is $143,300.

In five not so short years, we’ve finally breached the peak average balance of $69,000 in 2007 and are now at record highs. Hooray! At the depths of the crisis in 2008, the average 401k balance plummeted 25% to around $50,000.

401k participation levels hover at a respectable 71% for those making $40,000-$60,000 a year. Participating levels are therefore clearly much higher for those making more, but the exact number is unclear. For those making $20,000 to $40,000 a year, the participation level drops to just 53%, which is understandable.

Let’s say the average age surveyed is between 30-35, you can now see how absolutely pathetic these balances are if you are actually depending on your 401K to retire. You need to have the mindset of always maxing out your 401(k) every single year while saving at least 20% of your income after full contribution. There really is no other guaranteed way to retire comfortably if you aren’t saving a good amount. The power is all in your hands!


The State of the Timeshare Industry

Timeshares are often thought of as very luxurious and accommodating vacations that can even end up costing you less than traditional hotel vacations. Despite how wonderful these extremely luxurious vacations are, due to the recent recession many timeshare owners are in need of a way out of their timeshares.

Because of this huge demand from existing timeshare owners to sell their timeshares, a few troubling problems have surfaced. The main problem is that with all of this supply of used timeshares there is little to no demand to purchase a used timeshare on the resale market. This has resulted in many timeshares being listed on popular e-commerce sites such as eBay and Amazon for as little as $1. These listings are basically a last ditch effort to get out of the timeshare contract.