Monday, September 8, 2014

I don't "get" the stock market...

so that's why I don't invest in stocks.

At one time many years ago, I had a fairly hefty 401K.  When the stock market started to explode, I became very nervous and cashed it in.  It turned out to be a wise decision.  Ever since then, I've invested in durable and non-durable goods and a small amount of gold.

 However, I do know just enough to realize that when the stock market keeps going up and up, it's not necessarily a good thing, and will probably not end well.  And right now the market is acting crazy.

We have companies that don't make any money with stock worth billions.  How can that be?  Call me old fashioned, but many, many years ago, people bought stock in blue chip companies to hold over a lifetime.  Now, everyone is a day trader, or trying to make a killing on speculating on some debt-ridden company.

In my opinion, the stock market is rigged, and not in your favor.  You may as well buy lottery tickets. 

Which brings me to debt.  I know lots of people who think that debt is a good thing.  Sometimes, a short term loan to expand a company is necessary, with a plan to pay it back as quickly as possible being the goal.  Just as often, it's not necessary.

Consumer debt, which is most often used for non-durable goods is at an all-time high.  People are in debt up to their eyeballs.  The only debt you should have is your mortgage, and that should be a 15-year fixed rate loan; you should make extra payments on the principle and pay it off as quickly as possible.  My little measurement, rather than that of the banks, to figure what you can afford, will work well for you.
Your mortgage payment (PITI) should be no more than the amount of money either you, or a married couple both working a minimum wage job, can earn.  If for some reason, and it happens more often than you think, you lose your cushy job and have to work at McDonald's, you will at least be able to make your mortgage payment.
Check out this little factoid:
The longest-term new-car loans — 73 to 84 months — have jumped 25.1% in the past year and now make up 19.5% of total new-car lending, according to Experian Automotive. All other loan-length categories, in fact, have become less popular as buyers shift to longer terms to get lower payments.
The next-shorter category — 61 to 72 months, and considered a very long loan only a few years ago — now is 41.7% of new-car loans, Experian says. That's down 3.2% from a year ago, but it's still by far the biggest single loan-length category.  source
 Seven years to pay off a car?  How about buying a cheaper car and paying cash?  Yes - you can do it.

Our government is trying to tell us there's no inflation.  Of course, they don't consider pesky little things like food and energy when figuring the inflation index.  So next time you're in danger of starving to death and freezing cold, you can maybe burn the government's figures to keep warm and eat the ashes.

We are living in a bubble and it's going to come crashing down very soon. 

If you are carrying debt, do everything in your power to pay it off.  Concentrate on the must haves and not the must wants.

Ladies - you don't need another purse.  Shocking, I know (and trust me, I love purses.)

Two years ago, I needed something small because the lockers at work were so small.  I grabbed a little tiny  Longaberger tote I won at a home party and crammed my few essentials in it.  Two years hence and I'm still using it. I get more compliments on that silly little tote than any expensive handbag I ever owned.  Now, it's become a reverse snobbism thingy.  I may trade up to a plastic grocery bag from the Dollar Store. 

Gentleman, you don't need the newest electronic gadget, golf clubs, or whatever your little obsession is.  You probably don't need that boat or motorcycle, either.

Young people:  Finish high school. Learn a trade unless you plan on going into something like medicine, engineering, or law. Get married before having kids. Quit buying convenience food and learn how to cook.  Get rid of daycare costs and home school your kids.  Guys, take a sack lunch to work and help your wife with chores.

It's time to wake up, America.


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