Family Budgets, the Debt Ceiling and the O'Jays

"For a small piece of paper...it carries a lot of weight." — "For The Love of Money" as performed by The O'Jays

Most of us budget our personal discretionary spending, spreading out major purchases over several months and paychecks. For a really large expenditure, we may even utilize the time-honored process of saving for several months or, heaven forbid, even a year.

Our Federal Government? Not so much. Theirs is a "spend what we want now, and borrow more if we run out of money" approach. The Treasury Department recently announced that if Congress doesn't raise the federal borrowing limit before their August recess, the government will likely not be able to pay its bills come September. This raise-the-debt-ceiling game has become all too familiar in recent years.

Mustangs, Minivans, SUV's and Wilson Pickett

"I bought you a brand new Mustang... 'bout 1965..." — "Mustang Sally" as performed by Wilson Pickett

The Mark Zuckerberg of our generation has died.

Close your eyes for a moment and picture a group of wild horses, manes flowing in the wind, galloping through an open range. Lee Iacocca didn't create this ad; an agency did. But he invented the car that it promoted.

Another famous commercial showed a Mustang turning an unattractive, drab-looking fellow into a dashing man about town. The tag line? "Something has happened to Henry…A Mustang has happened to Henry."

How Often Should We Check Our Investment Accounts

“They say a watched pot won't ever boil. Well I closed my eyes and nothing changed; Just some water getting hotter in the flames.” — “Neighborhood #4 (7 Kettles)” as performed by Arcade Fire

How often should we check our investment accounts? 

This question resonated with me recently when I read an article which suggested that young investors should only look at their 401(k) balance on their first day of plan participation and then again at retirement. That way they wouldn’t fiddle with their investments too much and would be amazed at the growth in their account over their career.

While that’s wildly unrealistic, especially because most people will likely change jobs and roll over retirement funds many times in their career, the concept has merit. 

Still, most of us are going to take a gander at our balance every once in a while. But how often is too often?

One Retirement Size Doesn't Fit All

“And it gets hard…as you get older; farther away, as you get closer.” — “See The Changes” as performed by Crosby, Stills and Nash

Retirement advice is easy to come by. With 10,000 of us boomers turning 65 daily, it's a topic on the minds of a lot of Americans. 

The average retirement age for those currently employed is 66. And the average retirement lasts about 18 years. So the typical American fills nearly two decades with activities of his or her own choosing.

Here are a couple of facts about retirement. Currently, about 15% of the total population is retired. A little more than half of this group retired before age 65. About a third of retirees still carry mortgage debt into retirement, and three-fourths are dissatisfied with what they’ve saved heading into retirement…

Big Tech, Breakups and The Kinks

"Corporations, big business and egos...When it all gets too bad." — The Road" as performed by The Kinks

The calls for regulation of America’s largest technology companies are growing daily. The Big Tech backlash also appears to be one of the few topics that transcends political parties and ideologies.

Some say we need to copy and impose our own version of the European Union’s General Data Protection Regulation (GDPR), which qualifies as the first major data and privacy law of its kind anywhere on the globe. Others say we simply need to break up these giants because they are stifling competition and abusing their power…

Bad Jobs Report is Good News for Markets

"I'm walking on sunshine...and don't it feel good?" — "Walking on Sunshine" as performed by Katrina and the Waves

Once again, bad economic news was cause for celebration on Wall Street.  

Only 75,000 new jobs were created this past month. And the number of new jobs created in the last two months was recently revised downwards. With the economy slowing down slightly and the threat of tariffs weighing down growth, the Federal Reserve quickly announced that it is now open to lowering interest rates again. Markets loved this news.

Most sectors of the economy tend to benefit from lower short-term rates. Debtors with floating rate loans get a little reprieve as their monthly interest payments decline. Folks who bought a big house with an even bigger mortgage can refinance and reduce their monthly payments. Housing, construction and commercial real estate also benefit from lower rates both because of lower borrowing costs and because rental income streams are now more valuable. Big ticket items with relatively short payoff periods like cars, cranes and planes all become a little more affordable to finance…

Smoot-Hawley, Hoover, Ford and Markets

"And she stirs the tea with councilors...While discussing foreign trade..." — "A Well Respected Man" as performed by The Kinks

Global economic momentum is and has been slowing. And many economists fear that current U.S. tariff policies may contribute to weaker economic growth along with price increases passed on to consumers resulting in decreased discretionary spending. That more volatile markets will accompany these international trade disagreements appears almost certain.

In 1930, Senator Reed Smoot of Utah and Representative Willis Hawley of Oregon proposed similar laws placing protectionist policies (tariffs) on imports. Over 20,000 goods were affected. The legislation followed on the heels of the stock market crash.

Burt Reynolds, Ronnie Millsap and Autonomous Driving

"Now I could give my hand to another line of work, but my heart would always be behind the wheel."“Prisoner of the Highway” as performed by Ronnie Millsap

Literature, music and film has chronicled the independence and freedom associated with long distance trucking over the course of decades in American culture. Who hasn't sung along with Jerry Reed to "East Bound and Down" from Smokey and the Bandit? Heck, the late Burt Reynolds fashioned an immensely profitable cottage industry from extolling the virtues of the American trucker. Even cars were equipped with CB radios in the 1970s so we could all feel like part of the long-distance American caravan. You got your ears on, good buddy?

Walking and Talking Together in Business

“…I survived all those long, lonely days when it seemed I did not have a friend.” — “You’re Only Human (Second Wind)” as performed by Billy Joel

Los Angeles resident Chuck McCarthy has created a people walking service. Lots of folks are calling him to say that they'd like a walking companion. And part-time workers are contacting him to serve as walkers. He's employing them, taking a cut of their earnings. McCarthy, who started his business from home, now works out of a Burbank office where he can oversee his operation…

Warren, Elvis, Jeff and TINA

“You gave the world a lot of joy; Now that ain’t bad for a country boy.”“Hound Dog Man” as performed by Roy Orbison

You know you’re really famous when people know you by your first name. Everyone knows who Oprah is. Elvis Presley was perhaps the first celebrity I can recall who simply went by his first name. Madonna, Bono, and Shaq are all members of the “No Second Name Needed Club”.

What, I wonder, is the most important one-word name in investing? Is it Warren (as in Buffett)? Or Jeff (as in Bezos)? They’re close to the top of the list, but the most important name in investing is actually a woman’s name (and not a person at all): TINA.