Tag Archives: savings

Free markets and free people…

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According to an article published in the Daily Mail, Congresswoman Ocasio-Cortez has claimed that capitalism “is not a redeemable system for us.” 

Sitting here as someone who 20 years ago had a negative net worth of tens of thousands of dollars and now finds himself in ready striking distance of using two commas in the balance column, I honestly have no idea what the distinguished representative from the New York is talking about.

Way back in the year 2000, I was making just a touch over $30,000 as a first-year teacher with a bachelor’s degree. If you’re playing along at home, that’s in the neighborhood of $17 an hour or $1,154 per pay period. I started putting $25 every two weeks into a retirement account. That’s something like 2% of my salary at the time. As I changed careers, picked up raises, and got promotions over the years, the very first thing I did was increase that amount. If I got a 2% salary bump, at least 1% went towards invested savings. It got to be a habit – one that I still practice. 

Plenty of times there were (and are) wants and needs I’d rather spend that cash on. There are a lot of things I have to pass on or defer to later because saving for the future is a priority. The tradeoff is that over the intervening two decades, that account I started with $25 has grown into something that a kid from “down the crick” could have never imagined possible. 

I’ll never rank with the likes of Musk, Gates, Buffett, or the Koch brothers, but don’t think for a moment that capitalism somehow doesn’t work for “regular people.” I’m the son of a cop and a school teacher from a town in the middle of Maryland’s coal country. My parents divorced when I was a kid. I got my first formal job at 16 and had a laundry list of what today would be called side hustles to pick up extra cash long before that. No one talked about investments or savings or retiring before 65 back there and back then. That sounds just about as “regular” as anyone could be in this life.

In my estimation, capitalism has raised more people out of poverty in the last century than any other economic system devised by the mind of man. It’s what let me build the foundation for a future I couldn’t have dreamed of twenty years ago. Somehow, I doubt that whatever workers’ paradise Congresswoman Ocasio-Cortez has in mind to replace American capitalism would leave me in any way better off over the same time period.

The congresswoman is free to think whatever she wants, but I’ll keep standing with free markets and free people.

What Annoys Jeff this Week?

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1. Maxine Waters. I called out Donald Trump when he used his official position as an elected official to incite violence, so it only feels fair that Maxine Waters gets the same treatment. Using threats of violence to score political points with her base is precisely the activity that she scorned Trump and Republicans for doing over the last four years shows clearly that she’s a politician in precisely the same mold. Her calls to “get more confrontational,” should be as roundly condemned as were Trump’s words… but they won’t be in the prevailing media environment. In my books, though, a demagogue is a demagogue regardless of having an (R) or (D) after their name.

2. Excess savings. A CNN article this week blazed a headline that globally, “Consumers have $5.4 Trillion in Excess Savings” and positing that we’re about to see a boom in consumer spending. I only mention it because CNN also likes to run articles highlighting how bad we Americans are at saving for retirement or even just saving in general. The American portion of this “excess savings” is estimated (again by CNN) to be $2.6 Trillion. It feels like a perfect (and passed up) opportunity to encourage our countrymen to do something radical like open a retirement account, hold that cash as an emergency fund, or otherwise think beyond going on a buying binge as soon as the plague is over. I suppose soon enough we’ll be back to the inevitable stories about how no one is saving for retirement or can’t afford a $37 dollar emergency.

3. Reading for comprehension. I’ve responded to approximately 200 emails from people who “can’t find the schedule” for this week’s event. Look, numbnuts. You literally had to scroll past the schedule to find the group email address that lands stupid questions in my inbox. If reading for comprehension is a measure of how qualified companies or individuals are to provide services under contract, I’ve got an impressive list of them that should be rejected out of hand as not meeting minimum quality standards.

Closing time…

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The good news, I suppose, is that after months of screwing around, I’ll be closing on the new mortgage for the homestead on Friday morning. The new rate, 1.26% less than the original note, will save me several hundred dollars a month. 

As far as I can tell, all the paperwork is in good order and there theoretically shouldn’t be any problems getting to the closing table. The team I’ve been working with to get this work done have been spectacular – as johnny on the spot as any bunch of paper pushers I’ve ever dealt with. Color me cautiously optimistic.

I looked into a lot of options this time around – and strongly considered going with a 15 or 20-year mortgage to slice years off the life of the loan. Ultimately, though, reducing the overall cost of housing was the more important consideration. I can certainly allocate the savings to more entertaining or remunerative uses than keeping a roof over our heads. At rates under 3%, there’s very little incentive not to use other people’s money for as long as possible while seeking out a better ROI for my own dollars.

The only catch in this otherwise good news story was the moment I read over the estimated pay off date – sometime in 2051. As a child of the middle-to-late 20th century, 2051 doesn’t even feel like a real year. It’s some Jetson’s, deep space, basically unimaginably distant point in the future. Although I’ve spent nearly as much time in the 21st century as I did the 20th, I don’t think I’ll ever be entirely settled with it.

Under other circumstances, I’d be concerned about having a mortgage sticking that far out into the future – well past the date I expect to throw off the yoke of working for a living. As much as I like this house, though, staying here forever has never been the endgame. I think I’ve got one more big move left in me, hopefully to something built to suit my own undoubtedly quirky specifications. With this latest refinance, I won’t be paying off a hell of a lot of principle over the next 15 years, but I’ll make a modest dent. Throw in a decade and a half of (presumed) appreciation and there should still be a respectable nest egg to throw at building the last and final Fortress Jeff. 

We’ll just have to see how well that particular plan holds up to the intervening years… but again, on this point I’m choosing to be cautiously optimistic. 

Plague economics…

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I can’t tell you how many times in the last 6 months I’ve heard or read someone say “Wall Street isn’t Main Street” or “the stock market isn’t the economy.”

That’s usually shorthand for telling your readers or viewers you want them to ignore record setting highs in the market in favor of focusing on more gritty, personal stories about small businesses. Those businesses are important. No one loves their small, local book shops more than I do, but I’m not going to sit here pretending that how the market does is irrelevant to the overall health of the economy or that it’s only “the 1%” who take advantage of its magical power of wealth creation.

Despite the popular press narrative that most people aren’t impacted by the stock market, the opposite is really the case. According to an article released by Pew Research in March 2020, “a majority (52%) have some level of investment in the market. Most of this comes in the form of retirement accounts such as 401(k)s.” If something north of half the people having a vested interest in Wall Street doesn’t count as having a deep influence on Main Street, I don’t know what would.

Yes, how “invested” someone is depends on many factors – age, race, and income, among others – but you really sound like an idiot when you write an article trying to convince me that I should feel badly that the market is booming. I’m never going to be upset by a story that tells me real money is being made by real people. Even when it’s painted as a story of winners and losers, I’d reminded them that there are winners and losers in ever field of endeavor – none of the great -isms of history have managed to change that beyond shifting a bit of who gets what. The wheel turns, but some group is always on top at any given moment – princes of the church, members of the politburo, or heirs to the House of Morgan – and they reap the reward of being in the right seat at the right time. I’ve never felt the need to hate them for that.

The two streets measure (mostly) different aspects of the economy. While I’ve made an effort to support local businesses with my spending during the Great Plague, I won’t for a moment feel bad about seeing growing equity prices. Both sides of the economy are important and while I’d love to see both go like gangbusters in an endless bull market, having half a loaf in this plague-ravaged environment is something to celebrate.

What Annoys Jeff this Week?

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1. One Day Shipping. I have no idea why Amazon even pretends to offer items for “one day shipping” any more. Of the last three items I’ve purchased that touted this speedy service, exactly none of them arrived when “expected.” When I’ve been lucky, the items may have shipped by the expected arrival date… although one of those never arrived at all and had to be reshipped, arriving a full week after I ordered it. At one time, Amazon was practically synonymous with “logistics,” but mostly now I think they just make shit up as they go along.

2. Anti-intellectualism. America has a long history of anti-intellectualism. I could give you someone examples, but since we’re currently living through one of them, I’ll save you the trip down our collective memory lane and hope that you’ll just accept that I’m telling you the truth. Maybe the space program in the 60s was an exception, but I suspect that was more because those with the right stuff were billed as test pilots rather than engineers – though in many cases they were both. I know the historical backstory of why Americans have a long tradition of hating the smart people in the room, but I’ll never quite understand why we can’t get the hell over it. 

3. Peak savings days. Local electric companies are quick to hand out a few pennies savings for those who are willing to swelter a bit as afternoon temperatures hover in the mid-90s. All that really tells me is that increasingly, the local electric grid hasn’t been built out to meet actual demand for its product. Personally, I’d prefer to pay them a few pennies more during off-peak times so they can build a bit of excess capacity rather than sweating all the way through high summer. A little personal comfort feels like something well worth paying for, but maybe that’s just me.

Clawed back…

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Looking at the various trackers I use to keep tabs on “money stuff” it appears I’ve clawed back somewhere around 80% of what was lost when the floor fell out from under the stock market during the opening days of the Great Plague. I wish I could take some kind of credit for having a shrewd financial mind. It has far more to do with being willing to just stand there and take a beating without locking in all those losses by fleeing to the safety of cash equivalents… though I suppose sitting around watching the market erode your nest egg day after day after day without screaming “uncle,” is a certain kind of financial bravery of its own.

I’m happy to see a lot less red ink on the page, but I’m not even cautiously optimistic of the market’s ability to hold on to its gains in the absence of the truly massive amount of money the Federal Reserve has pushed into the system. Until I start seeing unemployment numbers normalizing, consumer confidence picking up, and a reckoning about how the foreclosures and evictions that have been held in abeyance for the last few months will be addressed, I won’t be convinced it’s not an aberration.

Call me a pessimist, if you will, but aside from there being a nice blue sky and sunshine overhead I don’t see how or where we’ve really turned a corner – and I’m fairly sure the economy doesn’t turn on how pretty a day it happens to be outside. Then again it’s possible I have completely lost track about what it is that actually does drive the economy. So much seems to have changed since I took my basic classes twenty years ago… or at least we’re pretending they’ve changed right up until the old rules jump up and bite us in the collective ass later this year.

What Annoys Jeff this Week?

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1. I have an exercise bike I’ve used pretty consistently since I lived in Tennessee. It was my one concession to coming home from siting at a desk all day and then sitting down at home and sitting in front of another monitor for three or four hours. Since I moved to the new place here, it’s been a dust collector. With the yard demanding less attention and slowly gearing up for the part of the year when I don’t want to be outside, I though it was high time to get it our of semi-retirement and get back into the routine… which would have been good except for the electrical system that fried somewhere between here and there. As per usual, due to planned obsolescence the repair parts commonly available don’t quite fit, so the whole things is sitting in pieces in the back bedroom waiting to see whether it gets repaired, replaced, or if I just say the hell with my head nod towards exercise.

2. Every afternoon I pass a deli that offers steamed crabs in the summer. They’re good crabs. A few times I summer I’ll stop on a Friday night and pick up a dozen with a six pack. It’s hard not to like that kind of dinner. The thing that annoys me is the enormous sign that says “CRABS!!! EBT Welcome!!!” People end up getting food assistance for all manner or reason, but there’s just something about a taxpayer subsidized steamed crab dinner that makes me twitchy. With a bushel of #1 jimmy’s running upwards of $200 in mid-summer, it feels like an extravagant thing to even advertise. Paying for the essentials is one thing, but using public assistance for what by any assessment is a pure luxury feels wrong. If that makes me sound like a judgmental prick, well, ok. Maybe I’d be less annoyed if someone else was paying for my blue crabs.

3. I’ve seen several articles this week where robots are taking the place of flesh and blood workers. I’m not sure why anyone would be surprised by this. With the push for a $15 an hour minimum wage I suspect we’ll see a lot more people replaced with technology. Those jobs that can be automated, will be automated. Gaining operational efficiencies like that will be the corporate solution for paying $15 an hour to people doing work that can’t be effectively automated. No business that wants to stay in business is going to stand quietly and take it in the bottom line. They’ll find their cost savings somewhere – and with the biggest expense of many service oriented businesses being personnel costs, none of us should be surprised where they go to find those savings. It’s what happens when we pass laws without consideration for second or third level effects. Whoops.