I don’t talk much about my finances, but I will tell you that I’m in the process of refinancing a couple mortgage loans down by 1% each. The interest savings is tremendous, making me very positive about consumption trends going forward as 10 other people I know are also refinancing. It behooves you to at least call your local bank and check their latest rates.
It does make me wonder with the strength of the stock markets lately, how the bond market can still be so frothy to provide such record low interest rates. Do remember that the higher treasury bond prices go, the more yields fall. Could there really be deflation on the way? I highly, highly doubt it but the bond market is telling us otherwise.
To humor our minds, lets say there is deflation on the horizon. What would you do with your spending habits? You’d probably stop consuming due to the assumption that whatever it is you want to buy will be cheaper in the future. As a result, you’d hoard cash and de-leverage. Bingo, that is exactly what plenty of folks are doing, including myself. This self perpetuating mentality is very damaging to economic progress. In addition to delaying consumption, you will probably seek ever higher yields. With the 30 year treasury yielding 4% right now, it sure looks like a buy compared to only 2.85% on the 10 year.
When talking about deflation, keep in mind that money is simply a medium of exchange. The more money currency you have, the better as the strength of your currency improves vis a vis the goods and services which it can buy. Frugality really is en vogue again, and I just can’t wait until Samurai September when I spend the whole month buying nothing!
POSTS THAT CAUGHT MY EYE:
In “A Teacher’s Reply To Criticism”, Budgeting In The Fun Stuff responds to E-dog’s scathing post against teachers. A very thoughtful response given BFS’s husband is a teacher. I for one believe teachers are highly underpaid. A merit based system that rewards great teachers is a great idea as well. Great teachers have meant the world to me, and I am forever grateful for their tutelage.
In “How To Simplify Your Life”, Forest provides some great tips on simplifying your home, finances, and wardrobe. I absolutely hate clutter and try and donate several bags worth of stuff to good will every month or two. I try and by quality clothing that lasts for a while, and all my retirement finances are automated so I appreciate what Forest is sharing.
Darwin highlights “The 10 Dumbest Uses For Your Tax Dollars In The Stimulus Bill” in his anti-government rant. I just want to say one thing, “Don’t touch my Ant Talk sessions!”
Everyday Tips and Thoughts asks, “How Realistic Is It To Retire By The Age Of 40?” At 42, Kris provides a very cynical answers to the possibility i.e. “better start saving at birth!” Good stuff. I fully plan to try to retire by 40, but it doesn’t necessarily mean that I will. Saving money, making money, it’s all just a game frankly because really, how much do we really need to survive. Not much!
In “Destination Wedding Or Traditional Wedding: Which One Is Cheaper” Young and Thrifty brings up a fun topic that sometimes costs and arm and a leg for hosts and the attendees. I’m down with both since weddings are so fun!
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”
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