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    The View From Under The Bus

    A visualization of the extreme plight of the saver
    by Adam Taggart

    Wednesday, November 30, 2016, 4:20 PM

As the dust settles from the recent presidential election, it's becoming clear that a large part of the sentiment behind the vote for Trump reflects a deep dissatisfaction from middle and lower-class working families. The traditional fruits of prosperity have been rising higher and farther out of reach for them, as their ability to make a living wage has been eroding year-over-year, for decades.

They've now reached the point where they no longer trust the empty promises that have been sold them by a steady stream of politicians — on both side of the aisle — who have lined their own pockets with lobbyist money while overseeing a tremendous shift of society's wealth to crony corporations and the top 1%. Trump's victory can largely be summed up as a defiant yelp from the masses decrying: "I may not know what the solution is, but I'm damn sure more of the same ain't it!"

Of course, we here at PeakProsperity.com are in full agreement with that righteous anger. Through borrowing way too much, bailing out rather than prosecuting bad actors, printing trillions of "thin air" dollars, a deliberate pursuit of financial repression and other schemes — the future prosperity of the "everyday American" has been stolen by those in power and those positioned closest to the trough. Mathematically, this orgy of excess needs to be balanced by severe austerity; an austerity the elites refuse to suffer but are forcing onto everybody else. No wonder the masses are pissed.

Few visuals drive this injustice home better than this one of historical bank CD interest rates. Note how they've been in steady collapse since the mid-1980s:

Back in 1984, savers received around 10% on funds parked in a bank CD. Even the shorter duration 6-month CDs yielded over 9%.

Contrast that to today's rates of practically 0%. A 6-month CD yields 0.16% and a 1-year yields 0.27%. If you're willing to lock up your money for 5 years, you'll enjoy a paltry return of just 0.86% annually throughout the next half-decade.

Back in the mid-80s, if you managed to retire with $500,000 in the bank, you could live quite comfortably on the nearly risk-free income from bank CDs. The $50,000 in annual income you'd receive was over twice the median household income then of $21,000.

Let's say you're lucky enough save up a full $1 million in your bank account today. If you put it all into a 5-year CD, you'll receive only $8,600 per year; less than 20% of today's median household income of $53,000.

The punchline: if you're a saver, if you've worked hard to amass financial wealth to retire on, you've gotten screwed.

And not only has your savings income drastically plummeted over the past few decades, but cost of living expenses over that same time period have skyrocketed — especially for the essentials like food, medical care, education and housing:

For the increasing few who can still manage to put excess dollars away after expenses, the paltry savings rates offered by safer investments like CDs force them to chase yield in order to get a return (any kind of return!) on their money. And, of course, this reach for yield moves savers further out on the risk curve, into the bubblicious asset classes (notably stocks, bonds and real estate) that the Fed's 0% interest rate policies have blown to nosebleed prices.

The likeliest scenario from here, sadly, is a recurrence of the types of losses (or worse) as seen during 2008, when these asset price bubbles can no longer be sustained. And savers will see their capital stored in these assets vaporize.

In short: the people who can very least sustain these losses will be the ones most ravaged by them. 

In past articles such as Sorry Losers!, Our Tone Deaf Elites Risk The Ruin Of Us All, and The Fed Is Destroying The World One Saver At A Time, we've provided the details behind the "how" our elected leaders, the special interests that control them, and the central banking cartel have collectively conspired to throw the everyday American under the bus. 

And as the above charts show, the view from down here is pretty damn lousy.

So, what's a prudent person to do?

Well, for starters, resist the urge to blindly follow the herd cheering today's record highs. Capitulating and jumping into risk assets at the end of a bubble market is simply signing up to be the greatest fool who's left holding the bag when prices correct.

For perspective on where to consider placing your money, review the chapter on Financial Capital from our recent book Prosper!: How To Prepare for the Future and How to Create a World Worth Inheriting (we're including it here below, free of charge):

And just as important: remember that money is just one of the 8 Forms of Capital required to build a resilient life. Be sure to invest as much time and attention to the remaining seven forms. They're just as important to your future prosperity and happiness, and are much less susceptible to manipulation by the ruling elites.

~ Adam Taggart

 

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28 Comments

  • Tue, Nov 22, 2016 - 11:50pm

    #1

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1085

    Good article, Adam!

    The charts feel like an accurate representation of why my stomach is in knots more and more of the time, as I get closer and closer to "retirement age".  I.e., the numbers just don't add up.  The closer I get to facing that reality, the more "real" and disconcerting it becomes. 

    On one hand, I'd be a fool to retire when I have a job that provides a living.  On the other hand, I'd be a fool not to retire, since that's the only way I can free-up my (inadequate) work-related retirement savings, and invest it in something that isn't paper-based. 

    "Being thrown under the bus" nicely summarizes how I feel about a lifetime of hard work based on hard choices, so I wouldn't have to struggle when I got old. 

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  • Wed, Nov 23, 2016 - 12:44am

    Reply to #1
    Emily Terrell

    Emily Terrell

    Status Member (Offline)

    Joined: Nov 15 2016

    Posts: 20

    Rollover your money to a Gold Backed IRA (not an ETF)

    pinecarr,

    Check out the Financial Capital section and look at the recommendations for moving your paper backed retirement savings to a bullion backed gold or silver IRA. Still retirement funds, but not just paper backed wishes. You can't take personal delivery, but you can have allocated bullion stored for you while still benefiting from the tax advantages of an IRA.

    If you figure out how to stop working, I'm all ears.

     

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  • Wed, Nov 23, 2016 - 12:48am

    #2

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Time is money, or money costs time

    Live Below Your Means and Invest the Difference

    At the end of the day, the less we want, the less we need. As Ralph Waldo Emerson eloquently praised Henry David Thoreau back in 1862: "He chose to be rich by making his wants few, and supplying them himself."

    This is my favorite quote from Prosper chapter 6. The more wants you have, the more time you need to spend working for money to get those wants. While you're working to get money, you're giving up the time to do what truly makes you happy.

    When most people look at the cost of things they want, they think of it in nominal dollar terms. Let's say you wanted to get a charbuck's latte that only costs $5. Let's assume that you make $20/hr. To find out the cost in your time, divide 20 by 5 to get 1/4 hr of work – 15 minutes. That doesn't seem like too much to spend for a little luxury.

    That $20/hr is the nominal amount you make. There are unavoidable taxes – income, social security, medicare, and health care that need to be subtracted. Then, there are other costs like housing, commuting, clothing, food, loan payments, etc. that need to be considered. For convenience, let's assume that 90% of the hourly wage is eaten up with these pesky expenses. The remaining $2/hr is your "play money" that you can spend as you see fit. Looking at it this way, that $5 latte costs 2 1/2 hrs of your time to purchase. That's a lot to spend on an overpriced cup of coffee.

    When I started looking at prices in this light, it changed my purchasing habits considerably. I still like a good latte, but I make a better one at home for about a quarter the price. Why not make it at home? Do you pack a lunch or go out every day? It's amazing how much of a positive impact these minor changes have on the budget. Then, you can apply the excess to paying off debt or saving for the inevitable rainy day.

    The bottom line is that if you don't need to spend it, you don't need to earn it first.

    Grover

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  • Wed, Nov 23, 2016 - 1:10am

    Reply to #1

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1085

    Thanks for the advice, UrbanPlanner

    Unfortunately, I literally can't move my work retirement savings into anything else until I quit or retire; hence the "do I stay or do I go" dilemma once I hit retirement age.  But I had been thinking along the same lines as you: once I do retire, and can get access to that $ and put it into something real, a bullion-backed gold or silver IRA would be a great choice.

    Grover, I think that's a great way to think about the "true cost" of unnecessary purchases.  It really does bring it home, doesn't it?

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  • Wed, Nov 23, 2016 - 1:44am

    #3

    Barnbuilder

    Status Member (Offline)

    Joined: May 07 2014

    Posts: 23

    Time is money, or money costs time

    I have been using that method for years to determine if I really need to purchase something.  When you figure it will cost you 3 or 4 hours of work to pay for something you want it is amazing how quickly one can reach the decision that this purchase is not a must have.  I have been a saver all my life but I and many other people in my economic class and age group have awakened to the fact that we will never quit working until we are medically forced to.  My home is paid for but as the formerly rural area I live in has been eaten up by the 3 to 4 thousand square foot overpriced chipboard homes, the land prices have shot up which subsequently has doubled then tripled property taxes even if you live in a little old farm home built in the 1940's. It takes extra income just to pay the county the monthly rent. Not complaining it is just today's economic reality.

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  • Wed, Nov 23, 2016 - 3:26am

    Reply to #1
    reflector

    reflector

    Status Bronze Member (Offline)

    Joined: Aug 20 2011

    Posts: 252

    physical possession of gold in an IRA

    [quote=UrbanPlanner]

    pinecarr,

    Check out the Financial Capital section and look at the recommendations for moving your paper backed retirement savings to a bullion backed gold or silver IRA. Still retirement funds, but not just paper backed wishes. You can't take personal delivery, but you can have allocated bullion stored for you while still benefiting from the tax advantages of an IRA.

    [/quote]

    my understanding is that you can indeed roll your IRA over into physical gold and silver, and hold it in your own possession, through an IRA LLC corp.

    to be precise, your LLC would be the owner, even when you are holding the gold in your own hand.

    perpetual assets and others offer assistance and advice in this process:

    https://www.perpetualassets.com/ira/

    i haven't personally tried this as it's not applicable to my situation, but you may want to look into it if that scenario appeals to you.

     

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  • Wed, Nov 23, 2016 - 6:24am

    Reply to #2

    thatchmo

    Status Silver Member (Offline)

    Joined: Dec 13 2008

    Posts: 319

    Your Money or Your Life...

    The title of a Best-Seller from 1993.  I never read it 'till I picked up a used copy last Sunday.  'Bout 2/3rds finished.  I'll be passing it on to some young 'uns when I'm done.  Great advice, just a little too late for me….Aloha, Steve.

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  • Wed, Nov 23, 2016 - 7:04am

    Reply to #2

    Dutch John

    Status Member (Offline)

    Joined: Oct 09 2008

    Posts: 32

    Now let's turn this around

    [quote=Grover]

    For convenience, let's assume that 90% of the hourly wage is eaten up with these pesky expenses. The remaining $2/hr is your "play money" that you can spend as you see fit. Looking at it this way, that $5 latte costs 2 1/2 hrs of your time to purchase. That's a lot to spend on an overpriced cup of coffee.[/quote]

    If one picks his own strawberries and thus saves $5 an hour, while normally wage expenses are 90%, then strawberry picking brings you a gross hourly wage of $50.  Of course it must not be strawberries. Doing things yourself prevents this huge money pumping around. And that is the modern problem: too much money and effort around small things. And why: we always could afford this, because of the fossil lever.

    Regards, DJ

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  • Wed, Nov 23, 2016 - 9:52am

    Reply to #1
    climber99

    climber99

    Status Member (Offline)

    Joined: Mar 12 2013

    Posts: 178

    Get independent advise

    There are pros and cons in converting your savings to gold.  pros are that it would track inflation ie. keeps it's purchasing power over time where as cash would lose it.  cons are that you forgo any interest and you are exposing yourself to short/median term price fluctuations dictated by actors out of your control ie speculators and government manipulation.  Personally I think there is a case in putting a small proportion (10% or so)  of your savings in gold as an insurance against very high inflation some time in the future.

    As with any investment choice. Get independent advise.  There are lots of gold bug web-sites out there that are not independent, beware. 

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  • Wed, Nov 23, 2016 - 4:30pm

    #4

    David Huang

    Status Bronze Member (Offline)

    Joined: Jan 20 2010

    Posts: 62

    Your Money or Your Life

    I second the recommendation of the book Your Money or Your Life thatchmo mentioned.  I read the book a LONG time ago and have been following its program for years now.  What Grover is talking about is essentially a different variation of what this book calls your real hourly wage.  You figure it out by taking into consideration all the time your job takes from your life and all the expenses it costs you to work that job.

    There was an art college near me that used to try and get me to adjunct teach for some of their classes.  Once when I went in as a visiting artist to one of their business oriented classes for artists I discussed this real hourly wage aspect of the book.  Then we went through and calculated what my real hourly wage would likely end up being if I took an adjunct position there.  It ended up slightly over $4 an hour.  At that point the school understood why I wasn't going to take the job and quit asking me.

    This sort of information is very helpful to use when evaluating purchases and job opportunities.

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  • Wed, Nov 23, 2016 - 7:44pm

    #5
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    How long can you tread water?

    Although that line was originally attributed to God as He spoke to a certain reluctant boat builder named Noah I think it applies to all who contemplate retirement.
    I used to have dream of retirement with a monthly stipend and money in the bank for emergency or whatever. After considering all that the Crash Course implies to my feeble brain it looks like working in some capacity as long as possible is a much more realistic dream.

    Definitely the first step is no debt! Then, or better at same time, reduce your monetary burn rate.

    This allows the freedom to consider various, often more risky, local investments.
    The best local investments are ones that increase the security of your family’s future, and after that your immediate community’s economic development.

    I do not want to be under the bus.

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  • Thu, Nov 24, 2016 - 6:18pm

    Reply to #2

    Snydeman

    Status Member (Offline)

    Joined: Feb 06 2013

    Posts: 481

    Stealing this!

    [quote=Grover]

    Live Below Your Means and Invest the Difference

    At the end of the day, the less we want, the less we need. As Ralph Waldo Emerson eloquently praised Henry David Thoreau back in 1862: "He chose to be rich by making his wants few, and supplying them himself."

    This is my favorite quote from Prosper chapter 6. The more wants you have, the more time you need to spend working for money to get those wants. While you're working to get money, you're giving up the time to do what truly makes you happy.

    When most people look at the cost of things they want, they think of it in nominal dollar terms. Let's say you wanted to get a charbuck's latte that only costs $5. Let's assume that you make $20/hr. To find out the cost in your time, divide 20 by 5 to get 1/4 hr of work – 15 minutes. That doesn't seem like too much to spend for a little luxury.

    That $20/hr is the nominal amount you make. There are unavoidable taxes – income, social security, medicare, and health care that need to be subtracted. Then, there are other costs like housing, commuting, clothing, food, loan payments, etc. that need to be considered. For convenience, let's assume that 90% of the hourly wage is eaten up with these pesky expenses. The remaining $2/hr is your "play money" that you can spend as you see fit. Looking at it this way, that $5 latte costs 2 1/2 hrs of your time to purchase. That's a lot to spend on an overpriced cup of coffee.

    When I started looking at prices in this light, it changed my purchasing habits considerably. I still like a good latte, but I make a better one at home for about a quarter the price. Why not make it at home? Do you pack a lunch or go out every day? It's amazing how much of a positive impact these minor changes have on the budget. Then, you can apply the excess to paying off debt or saving for the inevitable rainy day.

    The bottom line is that if you don't need to spend it, you don't need to earn it first.

    Grover

    [/quote]

     

    Grover, I hope you won't mind if I steal this and use it in my basic economics class when teaching about wants vs needs and opportunity costs…

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  • Thu, Nov 24, 2016 - 6:31pm

    Reply to #5

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Options

    aggrivated,

    There's another option that may fit your needs. I have friends who wanted to have more time off, but didn't want to quit working entirely. They were able to work out arrangements with the boss to only work part time. One friend does job sharing where he works about half time – generally 2 weeks on and then 2 weeks off. The other friend only works during busy construction season. They both love it. It gives them the time they crave and still keeps them involved with work.

    If your boss won't go for something like this, you may consider finding a job elsewhere that fits your needs and then "retire" from your current employment. The best time to look for work is while you still have a job.

    [quote=aggrivated]

    Definitely the first step is no debt! Then, or better at same time, reduce your monetary burn rate.

    [/quote]

    I agree with you. Debt is the worst 4 letter word. Limit your monetary burn rate, apply the savings to paying off debt, and you'll essentially give yourself a pay raise. Less headache, more options.

    Grover

     

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  • Thu, Nov 24, 2016 - 6:41pm

    Reply to #2

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Sharing, Not Stealing

    [quote=Snydeman]

    Grover, I hope you won't mind if I steal this and use it in my basic economics class when teaching about wants vs needs and opportunity costs…

    [/quote]

    Snydeman,

    I wish I could claim this as an original thought. As others have noted, they look at it in a similar light. Feel free to use this. (Consider it payback for when I've used your thoughts.) We're all richer when we share our thoughts.

    Grover

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  • Thu, Nov 24, 2016 - 6:57pm

    #6

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2525

    Money = Time

    Grover –

    You're hitting on something that has resonated strongly with me for some time now.

    I've long preferred to reverse the phrase "Time equals money", saying instead "Money equals time".

    Money is simply a means; by itself (the actual paper bills, or the digits in your bank account) it doesn't enrich your life at all. It's what you exchange the money for that has value to you.

    As we write about in Prosper!, few things are more valuable than your Time Capital. Time is the one asset that we have less of each day. It's precious. Priceless, even, in some ways.

    And if you reduce your need to earn money — by amassing sufficient savings and/or reducing your personal demands for it — you're able to use a greater percentage of your time doing the things that you want to do with your life. 

    So before I make a large expenditure, I ask myself: Is this worth the time it will take me to earn this sum back? In my head, my financial calculations are denominated in time units rather than monetary ones — because that's what I value more.

    I think if more people thought this way, credit card and other consumer debt would be a tiny fraction of what it is today. Our national debts, too, I'd hope.

    Of course, this line of thinking isn't just applicable to money, aka Financial Capital. It's more accurate to say "Capital = Time". Anytime we build up capital of any of the 8 Forms mentioned in Prosper!, or otherwise reduce our need for such capital (by making our wants few as Thoreau did, for instance), we lessen the future demands on our Time, freeing us up to live the life we want.

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  • Thu, Nov 24, 2016 - 7:00pm

    #7
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 859

    # of calves

    For many years now I have, as a metric of purchase value, used the price and number of cattle to correlate value.

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  • Tue, Nov 29, 2016 - 4:36pm

    #8
    QQQBall

    QQQBall

    Status Member (Offline)

    Joined: Mar 03 2011

    Posts: 12

    Grover... nice posts. a lot

    Grover… nice posts. a lot of this is covered in Your Money or Your Life by Joe Dominquez and Cashing in on the American Dream, How to retire at 35  by Paul Terhortz.

    Being debt free and having low overhead increases financial security. W/o a decent yield on savings and investment on risk-adjusted basis you end up eating the tree instead of the fruit and that ends badly.

    Somewhere along the line education costs are the nail in the coffin. Both my children have completed masters (daughter through Harvard) and my youngest is now in law school in England. She also did three int'l summer internships which I funded. i was able to write checks for their educations; luckily I love my profession but as I age the opportunity cost gets steeper.

    There is no free lunch. The over-leveraged speculators were bailed out at the expense/cost of retirees and savers.

    IMO, I would not take financial advice from a blog and would think hard b/f I moved 100% of anything into a PM fund of any sort.

    edit: I see someone rec'ed YMOYL book. I read that book and did what they suggest in writing down every expense in a little notebook I carried. I put it into a spreadsheet. I then cut our living expenses by 1/2 – actually slightly more. At the same time wifey planted a large garden and we ate her canned tomatoes all year in spaghetti, enchiladas, etc. Another expense reduction and better food at much lower price. From there we paid the house off which has rental units on the same property, so it also produces income (and still does). And we did not trade up to the McMansion either – most people downsize anyway when they get older.  Just a note – YMOYL is a philosophy book to me; it is not a magic bullet.

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  • Wed, Nov 30, 2016 - 7:50pm

    #9
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    More from the underside of the bus

    This is a theory of where we are from a non economist/non scientist. Please feel free to disprove it.  I would feel much better about the future if someone can.

    (Source)

    As you compare the treasury rates with the CD rates in Adam's article the rates fall off in tandem with the CD rate, or vice versa if the Fed does have some influence after all.  What is more interesting is to look at the oil output of American oil fields during this same time frame.

    (Source)

    The interest rate peaked at the same time the US production started its serious decline. This went on until fracking became 'profitable'. Then production shoots back up.  If oil production and the levitating of the economic output went hand in hand then the current CD/Treasury rates should be back up in the 10% area.  I think that the difference is the EROI on fracked oil must really be zero.  In fact, I would postulate that negative rates really reflect the shrinking available energy after investment.  If you look at the chart Chris did (at 10m:07s) in this section of the Crash Course (Chapter 19: Energy Economics) you get a clearer picture of where we are.

    We have talked about the coming huge wealth transfer from the Joe six packs to the eiltes.  From here it looks like negative interest rates are the admission by the system that there is NO excess energy to build the economy back up.  All that is left is to suck the remaining value out of the savings set aside by the savers.  IMHO as the bus runs over us it will also pick our pockets as it goes by. Hence the push for cashless economies.

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  • Thu, Dec 01, 2016 - 5:37am

    Reply to #2

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Taxes

    The taxman cannot tax what you save, only what you earn or spend.

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  • Thu, Dec 01, 2016 - 7:11pm

    Reply to #2

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Re: Taxes

    [quote=Arthur Robey]

    The taxman cannot tax what you save, only what you earn or spend.

    [/quote]

    Arthur,

    I wish that were true. Property taxes prove that isn't so. If they do away with cash and force us all to pay with smarty phones, they can easily tax whatever isn't spent as well as what is spent. If they could tax thoughts, they would.

    Governments are in a world of hurt. Past politicians made promises that current politicians have to honor (public pensions, social security benefits, etc.) Too many promises were made and greedily accepted by the voting populace. Now, all those promises need to be funded or defaulted. As long as the politicians have hope that they can kick the can a little further, they will. Unless unending economic growth magically appears to save them, their only option is to tax more. Eventually, that will not be enough.

    If it costs more to assess the tax than they collect from it, they won't tax it (for long.) If it is easy to quantify, expect it to be taxed. If you have nothing, they have nothing to tax.

    Grover

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  • Thu, Dec 01, 2016 - 8:06pm

    #10

    rhare

    Status Silver Member (Offline)

    Joined: Mar 29 2009

    Posts: 397

    Don't forget inflation

    Debasing the currency is just a stealth tax as well, and it's on your savings.

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  • Thu, Dec 01, 2016 - 10:03pm

    #11
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 514

    The view from the bus.

    I have tried to get a number of my millennial offspring and relations to have a look at this wonderfully concise article and its implications. You've done an excellent job of capturing the main tenets of why people should be reading Prosper. Many of us, with a few decades under our belts, have witnessed these machinations first hand and have been able to avoid some of them. The forum's responses to it seem to back this up. As another voice in the wilderness, I must say, as I look around, it is unfortunate that many in this developing world cannot see the "forest for the trees".

    Again, to all at PP  –  keep up the good work!

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  • Fri, Dec 02, 2016 - 1:44am

    #12
    greendoc

    greendoc

    Status Bronze Member (Offline)

    Joined: Sep 23 2008

    Posts: 112

    Another question to ask before spending

    Adam said, "So before I make a large expenditure, I ask myself: Is this worth the time it will take me to earn this sum back? In my head, my financial calculations are denominated in time units rather than monetary ones — because that's what I value more."

    I also ask myself: Who am I spending this money/time with?  Do I buy my food from the bigbox store or from the local co-op or CSA?  Do I bank with the local credit union or the legacy corporate national bank? Do I support local arts or always sit in front of my TV?  Do I buy a piece of jewelry from the chain store at the mall or a local craftsperson?  If I cannot find an option that keeps more money in the local economy I tend to decide against that purchase (not always of course), but voting with the dollars you do spend can help the local economy if you choose wisely.  

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  • Sun, Dec 04, 2016 - 1:54pm

    #13
    GM_Man

    GM_Man

    Status Bronze Member (Offline)

    Joined: Nov 04 2012

    Posts: 37

    Follow the Plan....

    Great article as always Adam,  I've been following many of the suggestions on PP for over a decade now…  Years ago we slowly worked towards frugal living by paying off our mortgage, saving for what we needed and for what we wanted (two district beasts to be sure).  With multiple pensions acquired over time and foreign countries I took the opportunity to take early retirement from my last employer.  Most of our 'investments' have been in our home as we work toward saving money through various efficiencies which include exterior rigid insulation and vinyl siding (who wants to paint there house every two years?), living in our rural retirement home now rather than waiting for a SHTF scenario (gee, I'm missing the snow flakes and BLM protests and riots), expanding our garden, raising chickens (I hate coyotes), moving to a tankless hot water system, new energy efficient doors and windows, security system (need versus want), etc… Taking money out of my pensions now and taking my money out of a bank and placing some of it in a Credit Union, investing in tangibles which include gold and silver, solar, energy savings etc.

    I can't thank you, Chris, Robey, and the rest of the team for their insight and suggestions.  I've been asked to open my home to showcase how to live a resilient and frugal lifestyle.   Please keep up the good work!!!

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  • Tue, Dec 06, 2016 - 5:05pm

    Reply to #13

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2525

    Kudos!

    GM_Man  —

    Comments like yours are why Chris and I do what we do. Congratulations on creating what sounds like a nicely resilient life (which I'm guessing you're finding more fulfilling/enjoyable than the one you had while working 'in the system').

    I'm heartened to hear that you're being recognized by your community as someone to emulate. Please keep up the good work, and please keep the PP.com updated on your continued progress!

    cheers,

    A

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  • Wed, Dec 07, 2016 - 6:30pm

    #14

    Boomer41

    Status Bronze Member (Offline)

    Joined: Nov 30 2008

    Posts: 109

    A Voice from Under the Bus

     

    In 2006 I was preparing to sell my small business and retire. I estimated all of my anticipated retirement income and expenses by preparing a large, very detailed spreadsheet.

     

    The expense page included all of my living expenses – food, clothing, travel, automobile, insurance, taxes, entertainment etc., etc. all with supporting data and assumptions. The income sheet was similarly detailed with income from the sale of the business, pensions and investments. It all balanced out nicely and I was confident that, after working hard and saving throughout my working life, my retirement would be reasonably comfortable and prosperous.

     

    That was 2006. Now, only ten years later, my retirement plan has been blown to smithereens. Despite my best efforts to maintain the purchasing power of my savings, the income I anticipated has been literally decimated. Instead of living largely on the income from secure investments, such as CDs, I am consuming my capital at a relentless rate.

     

    According to the Chapwood Index, (Ed Butowsky: Calculating The True Cost of Living Increase, by Adam Taggart Sunday, March 20, 2016 ) the true cost of living in my area went up by 10.7% last year, so you can imagine my reaction to the letter I received in November from the Social Security Administration which began “Your social Security benefits will increase by 0.3 percent in 2017 because of an increase in the cost of living.”!

     

    Those of us who worked hard and made prudent preparation for retirement, have been betrayed by our own government and the TBTF banks which run it. I would leave the US if I saw greener pastures in another country, but the predicament is global in scope. In many countries it is even worse than here.

     

    I fervently hope that the traitorous politicians and obscenely greedy bankers who brought about this mess all burn in hell. But, seething with impotent rage will only shorten and sour whatever time I have left, so I have decided to simply make the best of a bad situation and enjoy myself. I'm tired of waiting for the SHTF event and my emergency food flush is reaching the end of its shelf life. If I outlive my savings, I will at least have had a good ride while they lasted.

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  • Wed, Dec 07, 2016 - 11:31pm

    #15

    Snydeman

    Status Member (Offline)

    Joined: Feb 06 2013

    Posts: 481

    Trying to teach about the bus

    This is why I am actively engaged in using elements of the Crash Course, Shadowstats.com, and other non-MSM sites in my high-school-level survey economics class (tomorrow they learn about "fuzzy numbers"). I'm determined to inculcate in that part of the next generation I come into contact with the notion that official data is not to be trusted, that they must think and reason for themselves (I had fun with the marketing lessons on that score), and that the only way to explain why things are the way they are right now is to dig deeper than the official memes would have you dig. I find that when I explain things to kids this way, it builds a trust they rarely seem to have with adults these days (I'm acknowledging things they can sense are wrong), and it gives them more tools to peel back the onion and start peering behind the curtain, so to speak (apologies for the mixed metaphors). It's great to watch the light bulbs go on and see them finally understand why they hear "everything's awesome," but they see that "everything is not awesome."

     

    One class at a time.

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  • Fri, Dec 09, 2016 - 4:21pm

    #16

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4505

    Throwing your young under the bus

    Everything is (not) Awesome!

    One of my themes, is that any understanding of the Trump phenomenon has to have “economic factors” right at the top of the list, or the explanation is wanting.

    There’s the obvious loss of rural power and opportunity which showed up on the county election maps, but there’s also the loss of faith among the young.

    And by “young” I mean people 30 years old or younger.

    The American Dream is over, and has been for a long time, and that shows up in statistics like this:

    Barely Half of 30-Year-Olds Earn More Than Their Parents

    Barely half of 30-year-olds earn more than their parents did at a similar age, a research team found, an enormous decline from the early 1970s when the incomes of nearly all offspring outpaced their parents. Even rapid economic growth won’t do much to reverse the trend.

    Economists and sociologists from Stanford, Harvard and the University of California set out to measure the strength of what they define as the American Dream, and found the dream was fading. They identified the income of 30-year-olds starting in 1970, using tax and census data, and compared it with the earnings of their parents when they were about the same age.

    In 1970, 92% of American 30-year-olds earned more than their parents did at a similar age, they found. In 2014, that number fell to 51%.

    The percentage steadied for around a decade and plunged again starting in 2002, according to the economists.

    The paper doesn’t provide specific reasons for the declining fortunes of younger Americans, but it generally blames the slowdown in economic growth and, especially, the widening income gap between the wealthy and the rest of society.

    “Wages have stagnated in the middle class,” said Mr. Chetty in an interview. “When you’re in that situation, it becomes very hard for children to do better than their parents.”

    So not only are the rural hurting, but the young.  If these young folks could not bring themselves to vote for Trump, perhaps they were equally uninspired to show up for Hillary whose slogan “Stronger Together” seems to fall flat if “together” does not mean everyone.

    The policies of the two main parties have left out the vast majority of the population, especially an cruelly the young who take out student loans and then discover that their elders decided, in their infinite wisdom, to make student debt the only non-dischargeable debt in the land.

    Great optics there, older folks!

    Further, when the Fed decides to ram up house prices because that would be good for existing homeowners (it’s really not, but that’s the story they are running with) they are specifically, again, punishing the young.

    What sort of society treats their young this way?

    Not a healthy one, that’s my opinion.  

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