The arrogance of these engineers makes me physically ill. That being said, when I decided that debt was no longer an option for me and my family I sat down and calculated where all of the money was going. I was shocked at the thousands of dollars we were spending at the "convenience" store for products that were destroying our health (soda pop, "quick" meals, etc). The next thing? Alcohol. OMG. The next after that? Frozen "family" "meals"! Look at the cost per ounce on some of those and it is staggering. We stopped the convenience store trips, cut way way back on alcohol and started cooking every single thing we eat from scratch. We also got serious about growing several things we enjoy every year. It put a minimum of 10,000$ a year back in our pockets. True story. And we are happier and healthier because of it. BTW, we have no intention of living on lentils and fly larvae (they left that out in this particular article)
Bloomberg lives in a country where everyone is evidently single and living in an urban area.
Things I learned when I was poor: eat the food you get for free at the end of your shift because otherwise it would end up in the dumpster. (If you don't work at such a place, dumpster dive and claim you're doing it for the planet.) Never let anyone know in a job interview that you don't have a car. (This will be puzzling for those who live in the city, but in more rural areas they assume rightly that this makes you less reliable.) Do whatever you can to bring pleasure into your life, even if it's dumb and will shorten your lifespan, because life is hard enough without forcing yourself to quit smoking or start eating lentils. (I have since learned to stop worrying and love lentils, thanks to money! But I'm not about to begin preaching to others whose lives suck more right now.)
My investment advisor actually said “when it gets to the point where stocks are worthless, the only worthwhile investments are guns and bullets”. I think it’s a serious consideration.
I bought some TIPS directly from the Treasury in April 2021 at auction. Not fully realizing how "auction" worked, I ended up buying a lot (pains me to say how much so I won't) and had to pay a premium at $1,090 for a par value of $1,000. That's a 9% premium, y'all, on bonds that pay .125%. Well, you say, the value of your bonds increases at the rate of inflation. Inflation was about 5% this year for the TIPS I bought. Guess what? I have to pay income tax on the appreciation this year even though it's unrealized. Sure, I can amortize the bond premium which will reduce the amount of the taxable appreciation but it has to be either at a straight line rate or coupon effective interest rate which is much less than the appreciation (have I messed with your head enough?) So if there's deflation in future years, the bonds are adjusted downward even though I already paid tax on the appreciation. I hate to wish for inflation but I sure as hell don't want deflation either.
All good points. But some deserve a bit more discussion.
Investments are all gambling. But like casinos, some games have better odds than others, and some are entirely random, with the odds favoring the house, and some can be improved with correct strategies.
Crypto is especially risky, with no underlying value. It's a video game, subject to the whims of the programmer, and the greed of other players. It brings to mind the (true) story of the tulip mania in Holland several hundred years ago. Prices soared enormously, and suddenly collapsed when buyers figured out they're just tulips. Or Madoff's ponzi scheme. Get in and out early and make impressive profits. Hold too long and you lose everything.
Stocks also rise and fall on investor demand, but at least have the underlying company to shore up the value. Many investors never learn the stock does not really benefit from the success of the company. Some companies issue dividend payments to distribute a portion of their profits to stockholders. But it's a pittance for stable companies. The most important rule is never take a loss. Like playing blackjack, sometimes it just doesn't work. Cash out and try later. Set a loss limit and stick to it.
Investors get lots of advice, some well intentioned, some malicious, most ineffective. The key to success is learning what to believe. You shouldn't believe me either, but the most practical advice I've found is How To Make Money In Stocks by O'Neill. He doesn't hide many of the complexities, but he makes a lot of them clearer. Or just buy an index fund and head for the bar. You will make a little money over long time spans. But your spouse won't be impressed.
Thanks for the post! It's certainly true that everything's a gamble, and the financial system really has us by the shorthairs here. They get the free money, they loan it to us at interest, they force us to invest into the system to beat the inflation they help create! Then when it all comes crashing down and they swoop in with new cash to buy up the rubble for pennies on the dollar. As a general principle I avoid everything that would allow them to profit from the system.
---------
"Crypto is especially risky, with no underlying value. It's a video game, subject to the whims of the programmer, and the greed of other players."
---------
This is the case of the US dollar, not bitcoin. Bitcoin's rules are determined by math, not by a CEO or political appointee. There's nobody who can zap up a trillion new bitcoin, but we've got no problem zapping up trillions of dollars. Those dollars are going to go somewhere. I believe there's no ceiling for bitcoin because there's no floor to the dollar. The risk comes from government action against crypto -- but now that the big financial players are invested, Uncle Sam will just demand his pound of flesh at the end of the day.
Additionally, I believe permissionless transfer of wealth will never be worthless. The recent Canadian protest/Russian bank account freeze shows the need to have a way around the captured banking system. Bitcoin 'works' just as well at $250 as $25,000 -- and maybe even better.
We're (hopefully) talking about real long-term savings here. Though bitcoin may see large swings, we KNOW what the future of the dollar is. It's up to everybody around the world to decide if they live under a government that is ruining the value of the currency fast enough to take a 'chance' on crypto. The wonderful thing about bitcoin is that if you think it's worthless, your opinion is ALREADY REFLECTED in the price! But as more and more people understand its value, the price will (IMO, obviously) continue to increase over the long-term.
That's probably what they said about tulips. Anybody can make more crypto coins, and thousands have. Write the code, offer it for sale, people send you money. Sweet. NFTs are especially amusing.
Bitcoin lost about half its value in Nov- Jan. Looking at the chart, it might be a decent short term trade at this level. Many investments tend to run in cycles, profitable if you catch the swings right. But those who hold through the down swings are known as bag holders. One of these days, it will drop and keep on dropping. Its only value is the greed of other gamblers ... scuse me - investors.
None of those are bitcoin. Obviously you want to do research and not throw money into a centralized coin with infinite printing capabilities.
Bitcoin was 15k the day Biden was elected. Today is it 42k, a near 300% gain. You'll have a difficult time finding a better hedge against inflation the last decade. But if it drops 90% and is only 4k, you'll find the same economic realities are in play: There are trillions and trillions of dollars looking for a place to go. There's no limit to the price of a candy bar, there will be no limit to the price of a bitcoin. (IMO obviously)
How many trillions of dollars are they going to print next year? How about 2025? 2030? The writing is on the wall, and every single day more and more people around the world are waking up to the fact that government is stealing away their wealth through inflation.
Edit: Do you foresee a day where you can buy multiple bitcoins for a dollar?
I foresee a day when they'll be worthless, but a few will still pay a dollar. One of the fundamentals of investing is "trees don't grow to the sky." Everything reaches a level where no one will pay. Seems to be about 40k for bitcoin. Very soon, governments will get into the crypto game, because they get more control with a video game than with paper currency. Then they'll start undercutting their competitors. Several countries appear to be on the verge of issuing digital currency. China probably first. With every investment, you have to watch it closely, always. Never take a loss. That's actually Buffett's "Rule #1."
But, once again, nobody's interested in a central bank-controlled coin. Of course governments will try to issue their own currency, but it will remain worthless because it has no actual value over the crappy fiat currency they are already issuing.
At $1, does bitcoin have value? IE, is there any value in the system itself?
We might not care about government, but our plight is they don't care about us, and they have the power to force us to care about what they want. Whichever country first outlaws crypto will kill the industry. The alleged boast that we will have nothing is easier to activate than most people realize.
And isn't that Bloomberg headline bad grammar? They're comparing two groups, those who make less than $300k and (implicitly) those who make $300k or more.
So it should read "Inflation stings MORE if you earn less than $300k...". No?
Don't buy in bulk can make sense, but usually only with respect to perishables and even then only perishables you can't consume before (duh) they go bad. I say this one hour removed from throwing away 3 avocados because I bought a bag of 8 of them when I was at Costco last week (buying other stuff, NONperishables...in bulk).
But I was committed to eating more avocado, because it's supposedly good for this that and the other thing. So I thought, avocado toast every morning instead of cereal. I won't get sick of it within 8 avocados.
Turns out they're also good for attracting bugs when you don't eat them in time.
I'm quite certain we could fit all the people the incomparable Guttermouth is talking about in less than 1% of the forests of Canada. They can even get the choice of pine or spruce before they go up. One tree each.
I love the "no one said this would be fun" line. Makes you kind of want to punch the author for suggesting this is somehow all our fault. I find it interesting how we define "wealthy" situationally. When it comes to Obamacare, any couple making over $60,000 a year was too "wealthy" for help, regardless of the fact that a single person's insurance plan for those on the downside of middle age (heading into the "golden years") could be $1500 a month with a combined $12,000 deductible. However, for Bloomberg, anyone making under $300,000 is considered not wealthy enough to not be harmed by inflation. I suppose I should thank them for being honest (300K is more than most make but still not exorbitant in the current environment), but there's an insidious psychology here, though I'm not sure what the point is yet. That seemed a pretty randomly large number to be passing off as "just your average working Joe or Janet." (On a related note, thank you for putting a percentage on how many of us the "under $300K" actually applies to.)
I do taxes for low income people. Some of these people make $30K a year in wages and the value of their employee sponsored health insurance is $24K per year (code DD in Box 12.)
I know it might adversely affect your business success, M. BikerChick, but we really do need to separate healthcare and healthcare insurance from the unnecessary and self-defeating third party (the employer), and return both to the free market that will in one fell swoop control costs, supply, AND access through that wonderful market clearing/making price mechanism.
When I go into a restaurant I see a menu of options, pick what I want, and then they make it and hand it to me. This is exactly the way healthcare should work.
How much would a Big Mac cost if we all had 'food insurance' and all the paperwork that goes with it?
The blandishments to enter into debt require an iron will to resist. When my now-ex and I were looking to buy a modest residence because rents in our area made that a more sensible option, our RE broker and mortgage broker both insisted we could afford more than I knew we could. Every time they showed us a place "in our price range" I'd ask about the taxes, the emergency fund to be able to replace any essential fixture that might go kerflooey plus cover monthly expenses in an emergency, etc. etc. etc. They looked at me as though I had fifteen heads, all of them speaking gibberish. They insisted we could afford a row house for $125,000. I said the hell we could, and we bought a garden apt. coop for $63,000. We had a few reversals of fortune but when we had more income again, I paid that mortgage down relentlessly. At one point I'd paid a year's worth in advance. When I sold during a divorce, I essentially broke even, since our maintenance and mortgage had been less than what renting would have been.
Never, ever bite off more than you can chew. If you don't have that emergency fund as here noted, you can't afford that purchase, no matter what it is.
I love a good thrift shop with a passion that resists description. The Lord plunkethed me down near one and I draw the line only at panties and jeans (I'm hard to fit). Borax is truly nature's miracle.
Sick of being lectured by the people who caused the problem about how ordinary people and especially the poor are going to have to pay the price again. And so, they tell us, we need to learn to deal with it. Again.
Invest in guillotines!
We have landed in the middle of a strange Venn diagram of government run healthcare,
government run income subsidization, government managed investments, government run retirement insurance,
government run Pharma,
government run transportation, government run communication, government run farms,
government run banks,
government run schools,
government run R&D facilities,
government run energy production
government run ....
I'm sensing a correlation here. Maybe, just maybe, our answers lie in LESS government.
The arrogance of these engineers makes me physically ill. That being said, when I decided that debt was no longer an option for me and my family I sat down and calculated where all of the money was going. I was shocked at the thousands of dollars we were spending at the "convenience" store for products that were destroying our health (soda pop, "quick" meals, etc). The next thing? Alcohol. OMG. The next after that? Frozen "family" "meals"! Look at the cost per ounce on some of those and it is staggering. We stopped the convenience store trips, cut way way back on alcohol and started cooking every single thing we eat from scratch. We also got serious about growing several things we enjoy every year. It put a minimum of 10,000$ a year back in our pockets. True story. And we are happier and healthier because of it. BTW, we have no intention of living on lentils and fly larvae (they left that out in this particular article)
It really is shocking once you sit down and add it up!
Bloomberg lives in a country where everyone is evidently single and living in an urban area.
Things I learned when I was poor: eat the food you get for free at the end of your shift because otherwise it would end up in the dumpster. (If you don't work at such a place, dumpster dive and claim you're doing it for the planet.) Never let anyone know in a job interview that you don't have a car. (This will be puzzling for those who live in the city, but in more rural areas they assume rightly that this makes you less reliable.) Do whatever you can to bring pleasure into your life, even if it's dumb and will shorten your lifespan, because life is hard enough without forcing yourself to quit smoking or start eating lentils. (I have since learned to stop worrying and love lentils, thanks to money! But I'm not about to begin preaching to others whose lives suck more right now.)
im going to eat a meat based diet only, its cheap cos you end up only eating once a day and its great for your health
Checking in a couple years later -- how did it go?
only just seen this, i got no email notification.
it was good when i did it, i still eat mostly meat but i eat crap at weekends lol
i lost fat/weight when i was strict and now just maintain my size.
my health is good, no colds/flu etc since
planning on going strict after christmas to see if i can build more muscle
I invest all of my money in tangible assets like guns and bullets.
It's like investing in gold, but more practical.
There are certainly scenarios in which guns and bullets are the ONLY currency. If any of those happen, we're all pretty fucked IMO.
For a roadmap: look at Jugoslavia.
My investment advisor actually said “when it gets to the point where stocks are worthless, the only worthwhile investments are guns and bullets”. I think it’s a serious consideration.
Good luck in retirement.
Laugh now, but when the fall happens, I won't be eating my dog (as Bloomberg suggests I do), I'll be eating my neighbors.
I bought some TIPS directly from the Treasury in April 2021 at auction. Not fully realizing how "auction" worked, I ended up buying a lot (pains me to say how much so I won't) and had to pay a premium at $1,090 for a par value of $1,000. That's a 9% premium, y'all, on bonds that pay .125%. Well, you say, the value of your bonds increases at the rate of inflation. Inflation was about 5% this year for the TIPS I bought. Guess what? I have to pay income tax on the appreciation this year even though it's unrealized. Sure, I can amortize the bond premium which will reduce the amount of the taxable appreciation but it has to be either at a straight line rate or coupon effective interest rate which is much less than the appreciation (have I messed with your head enough?) So if there's deflation in future years, the bonds are adjusted downward even though I already paid tax on the appreciation. I hate to wish for inflation but I sure as hell don't want deflation either.
Deflation is a complete non-starter these days IMO. They're gonna run the presses until it all goes boom.
And yes, the taxing of TIPS gains is crazy!
The government can pay me back all the money it owes me in national park land.
Now that I could get behind.
All good points. But some deserve a bit more discussion.
Investments are all gambling. But like casinos, some games have better odds than others, and some are entirely random, with the odds favoring the house, and some can be improved with correct strategies.
Crypto is especially risky, with no underlying value. It's a video game, subject to the whims of the programmer, and the greed of other players. It brings to mind the (true) story of the tulip mania in Holland several hundred years ago. Prices soared enormously, and suddenly collapsed when buyers figured out they're just tulips. Or Madoff's ponzi scheme. Get in and out early and make impressive profits. Hold too long and you lose everything.
Stocks also rise and fall on investor demand, but at least have the underlying company to shore up the value. Many investors never learn the stock does not really benefit from the success of the company. Some companies issue dividend payments to distribute a portion of their profits to stockholders. But it's a pittance for stable companies. The most important rule is never take a loss. Like playing blackjack, sometimes it just doesn't work. Cash out and try later. Set a loss limit and stick to it.
Investors get lots of advice, some well intentioned, some malicious, most ineffective. The key to success is learning what to believe. You shouldn't believe me either, but the most practical advice I've found is How To Make Money In Stocks by O'Neill. He doesn't hide many of the complexities, but he makes a lot of them clearer. Or just buy an index fund and head for the bar. You will make a little money over long time spans. But your spouse won't be impressed.
My spouse would be impressed if I made a little money over a long time. But she laughs at my bar jokes.
Thanks for the post! It's certainly true that everything's a gamble, and the financial system really has us by the shorthairs here. They get the free money, they loan it to us at interest, they force us to invest into the system to beat the inflation they help create! Then when it all comes crashing down and they swoop in with new cash to buy up the rubble for pennies on the dollar. As a general principle I avoid everything that would allow them to profit from the system.
---------
"Crypto is especially risky, with no underlying value. It's a video game, subject to the whims of the programmer, and the greed of other players."
---------
This is the case of the US dollar, not bitcoin. Bitcoin's rules are determined by math, not by a CEO or political appointee. There's nobody who can zap up a trillion new bitcoin, but we've got no problem zapping up trillions of dollars. Those dollars are going to go somewhere. I believe there's no ceiling for bitcoin because there's no floor to the dollar. The risk comes from government action against crypto -- but now that the big financial players are invested, Uncle Sam will just demand his pound of flesh at the end of the day.
Additionally, I believe permissionless transfer of wealth will never be worthless. The recent Canadian protest/Russian bank account freeze shows the need to have a way around the captured banking system. Bitcoin 'works' just as well at $250 as $25,000 -- and maybe even better.
We're (hopefully) talking about real long-term savings here. Though bitcoin may see large swings, we KNOW what the future of the dollar is. It's up to everybody around the world to decide if they live under a government that is ruining the value of the currency fast enough to take a 'chance' on crypto. The wonderful thing about bitcoin is that if you think it's worthless, your opinion is ALREADY REFLECTED in the price! But as more and more people understand its value, the price will (IMO, obviously) continue to increase over the long-term.
That's probably what they said about tulips. Anybody can make more crypto coins, and thousands have. Write the code, offer it for sale, people send you money. Sweet. NFTs are especially amusing.
Bitcoin lost about half its value in Nov- Jan. Looking at the chart, it might be a decent short term trade at this level. Many investments tend to run in cycles, profitable if you catch the swings right. But those who hold through the down swings are known as bag holders. One of these days, it will drop and keep on dropping. Its only value is the greed of other gamblers ... scuse me - investors.
None of those are bitcoin. Obviously you want to do research and not throw money into a centralized coin with infinite printing capabilities.
Bitcoin was 15k the day Biden was elected. Today is it 42k, a near 300% gain. You'll have a difficult time finding a better hedge against inflation the last decade. But if it drops 90% and is only 4k, you'll find the same economic realities are in play: There are trillions and trillions of dollars looking for a place to go. There's no limit to the price of a candy bar, there will be no limit to the price of a bitcoin. (IMO obviously)
How many trillions of dollars are they going to print next year? How about 2025? 2030? The writing is on the wall, and every single day more and more people around the world are waking up to the fact that government is stealing away their wealth through inflation.
Edit: Do you foresee a day where you can buy multiple bitcoins for a dollar?
Decentralized currency gives power to the people and takes it from the government…win win
As long as the State cannot seize it.
I foresee a day when they'll be worthless, but a few will still pay a dollar. One of the fundamentals of investing is "trees don't grow to the sky." Everything reaches a level where no one will pay. Seems to be about 40k for bitcoin. Very soon, governments will get into the crypto game, because they get more control with a video game than with paper currency. Then they'll start undercutting their competitors. Several countries appear to be on the verge of issuing digital currency. China probably first. With every investment, you have to watch it closely, always. Never take a loss. That's actually Buffett's "Rule #1."
But, once again, nobody's interested in a central bank-controlled coin. Of course governments will try to issue their own currency, but it will remain worthless because it has no actual value over the crappy fiat currency they are already issuing.
At $1, does bitcoin have value? IE, is there any value in the system itself?
We might not care about government, but our plight is they don't care about us, and they have the power to force us to care about what they want. Whichever country first outlaws crypto will kill the industry. The alleged boast that we will have nothing is easier to activate than most people realize.
And isn't that Bloomberg headline bad grammar? They're comparing two groups, those who make less than $300k and (implicitly) those who make $300k or more.
So it should read "Inflation stings MORE if you earn less than $300k...". No?
Don't buy in bulk can make sense, but usually only with respect to perishables and even then only perishables you can't consume before (duh) they go bad. I say this one hour removed from throwing away 3 avocados because I bought a bag of 8 of them when I was at Costco last week (buying other stuff, NONperishables...in bulk).
But I was committed to eating more avocado, because it's supposedly good for this that and the other thing. So I thought, avocado toast every morning instead of cereal. I won't get sick of it within 8 avocados.
Turns out they're also good for attracting bugs when you don't eat them in time.
As near as I can tell, I spend about a hundred dollars a year watching bananas go bad.
Ha! Ha! Ha! Great Open!!
"Take the bus."
"Don't buy in bulk."
"Try lentils instead of meat."
"Nobody said this would be fun."
It's the precise 2022 translation of "let them eat cake."
And we know what happened to the person who said that.
Let's hope it happens to them.
No, I'm not kidding. Let's hope they're executed by angry mobs.
And eaten instead of lentils.
I'm getting near the limit of my rage.
Grandson: Grandpa, what's wrong with the world today?
Grandpa: Not enough people are drinking from the skulls of their enemies, my son.
Can we just incinerate them instead?
Why not air burial?
No reason at all! Too bad surface-to-space cost is so high.
I'm quite certain we could fit all the people the incomparable Guttermouth is talking about in less than 1% of the forests of Canada. They can even get the choice of pine or spruce before they go up. One tree each.
So many choices. Let's make them pay-to-view, set prices by demand/cost-of-disposal.
#teamheadsonpikes
I look forward to the return of a skull-based economy with some small degree of relish.
It's not the worst fiat currency that has ever existed.
Pickled relish or fresh?
Like Amish pepper relish, which is I guess pickled. It's been a while so it's probably pickled.
Just had to look up what that is - we don't have it here. Sounds great, should go down a treat with salted pork, root vegetable mash and small beer.
If it's been a while, let's hope it's pickled.
Also applies to: Can't afford gas? Buy a Tesla.
Yeah, $5/gallon gas I can't afford, but a $50,000 Tesla I can??
What drives me even crazier is my marketing experience is screaming at me "THIS IS CLICKBAIT YOU DUMB BITCH."
I love the "no one said this would be fun" line. Makes you kind of want to punch the author for suggesting this is somehow all our fault. I find it interesting how we define "wealthy" situationally. When it comes to Obamacare, any couple making over $60,000 a year was too "wealthy" for help, regardless of the fact that a single person's insurance plan for those on the downside of middle age (heading into the "golden years") could be $1500 a month with a combined $12,000 deductible. However, for Bloomberg, anyone making under $300,000 is considered not wealthy enough to not be harmed by inflation. I suppose I should thank them for being honest (300K is more than most make but still not exorbitant in the current environment), but there's an insidious psychology here, though I'm not sure what the point is yet. That seemed a pretty randomly large number to be passing off as "just your average working Joe or Janet." (On a related note, thank you for putting a percentage on how many of us the "under $300K" actually applies to.)
I do taxes for low income people. Some of these people make $30K a year in wages and the value of their employee sponsored health insurance is $24K per year (code DD in Box 12.)
I know it might adversely affect your business success, M. BikerChick, but we really do need to separate healthcare and healthcare insurance from the unnecessary and self-defeating third party (the employer), and return both to the free market that will in one fell swoop control costs, supply, AND access through that wonderful market clearing/making price mechanism.
Cut out the middle man and the taxman.
When I go into a restaurant I see a menu of options, pick what I want, and then they make it and hand it to me. This is exactly the way healthcare should work.
How much would a Big Mac cost if we all had 'food insurance' and all the paperwork that goes with it?
Absolutely on the decoupling of health insurance from employment. And I don't make money, I volunteer for AARP/Tax-Aide.
Throat punches need to make a comeback.
The blandishments to enter into debt require an iron will to resist. When my now-ex and I were looking to buy a modest residence because rents in our area made that a more sensible option, our RE broker and mortgage broker both insisted we could afford more than I knew we could. Every time they showed us a place "in our price range" I'd ask about the taxes, the emergency fund to be able to replace any essential fixture that might go kerflooey plus cover monthly expenses in an emergency, etc. etc. etc. They looked at me as though I had fifteen heads, all of them speaking gibberish. They insisted we could afford a row house for $125,000. I said the hell we could, and we bought a garden apt. coop for $63,000. We had a few reversals of fortune but when we had more income again, I paid that mortgage down relentlessly. At one point I'd paid a year's worth in advance. When I sold during a divorce, I essentially broke even, since our maintenance and mortgage had been less than what renting would have been.
Never, ever bite off more than you can chew. If you don't have that emergency fund as here noted, you can't afford that purchase, no matter what it is.
So true! And once people 'upgrade' to that bigger home, they need more STUFF to put in it!
I love a good thrift shop with a passion that resists description. The Lord plunkethed me down near one and I draw the line only at panties and jeans (I'm hard to fit). Borax is truly nature's miracle.
I seem to recall one of the Bloomberg writers catching flack recently for saying people should just let their pets die when it comes to inflation.
Sick of being lectured by the people who caused the problem about how ordinary people and especially the poor are going to have to pay the price again. And so, they tell us, we need to learn to deal with it. Again.
This time they didn't even give us a 'sit down and shut up' check, they just kept robbing the treasury.