Retirement Planning - Lessons Learned

   / Retirement Planning - Lessons Learned #721  
It's only the difference between lawful and law breakers, no big deal!

Among the law breakers who enter illegally are some who have nothing to loose and will disregard any and all laws as they wish.

I mean as an example, no need for a car insurance if they have nothing to loose and what's another hit and run - no big deal eh?

And if they are caught it's really no big deal since we don't even know who they are or where they came from; they will be released soon anyway and go on and on.

^^^^^so true^^^^^
All my ancestors came over legally, one as an indentured servant a boy 12 years old.
Worked hard, started with nothing and became wealthy...many employees starting a foundry.
What does it say about a person's character who sneaks across a border...any border?
Just because I worked hard having a nice place doesn't give a trespasser rights to use my things or enjoy benefits of what I have.
This is apolitical...just simple facts.
 
   / Retirement Planning - Lessons Learned #722  
I became a legal adult in 1979. I've lived through worse. So have most of you.

View attachment 712741View attachment 712741
Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
 
   / Retirement Planning - Lessons Learned #723  
^^^^^so true^^^^^
All my ancestors came over legally, one as an indentured servant a boy 12 years old.
Worked hard, started with nothing and became wealthy...many employees starting a foundry.
What does it say about a person's character who sneaks across a border...any border?
Just because I worked hard having a nice place doesn't give a trespasser rights to use my things or enjoy benefits of what I have.
This is apolitical...just simple facts.
That is one of the best assessments regarding illegal immigration that I have read. Well done!
 
   / Retirement Planning - Lessons Learned #724  
Here is the thing about the last bout with inflation, it actually caused the greatest accumulation of generational wealth in the history of the US.

When inflation was really bad in the 70's, the Fed at the time under Volcker raised interest rates very high to combat it. In Economics, there is a law that says interest rates and asset prices move in opposite directions. So high interest rates decrease asset prices and low interest rates cause high prices. We are seeing this now. At the time, baby boomers were coming into their prime earning years. They were able to purchase assets, we'll use houses as an example, at very low prices, but very high interest rates. As the effects of inflation subsided because of high interest rates, the Fed moved to lower interest rates. Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house. Baby boomers still have a lot of assets that are worth a ton of money today, thus the baby boomers might be the most wealthy generation the world has ever know.

Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity.

From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
Who needs generational wealth? The 1/10 th of the 1% ???
 
   / Retirement Planning - Lessons Learned #726  
From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.

You don’t need inflation to move very high. You need the Fed to stop it’s $120 billion per month bond buy back program. It is the single biggest factor keeping interest rates low.

It’s also a major reason stocks are so very high on a valuation basis.

As a fixed income investor, I’d like to see interest rates move up into the 4% range. So do many retirees who would like to get out of stocks into fixed income.

MoKelly
 
   / Retirement Planning - Lessons Learned #727  
Who needs generational wealth? The 1/10 th of the 1% ???
Don't be going all professor on me. What ever happened to him?> We could debate economics for days. I love it as he lived in the theoretical teaching world of economics and I live in the real life economics world. Two very different worlds that should have a lot of common ground, but as our debates showed...they is very little common ground.
 
   / Retirement Planning - Lessons Learned #728  
You don’t need inflation to move very high. You need the Fed to stop it’s $120 billion per month bond buy back program. It is the single biggest factor keeping interest rates low.

It’s also a major reason stocks are so very high on a valuation basis.

As a fixed income investor, I’d like to see interest rates move up into the 4% range. So do many retirees who would like to get out of stocks into fixed income.

MoKelly

If the fed stops the MBS bond buying, the housing market collapses. They will never be able to stop it fully. Meanwhile, the bubble gets bigger and bigger. But like I like to say...the best medicine for high prices, is high prices.

How did we ever get to a point where a huge segment of our economy is reliant upon a quasi government agency needing to buy loans that a normal market has no desire to own.
 
   / Retirement Planning - Lessons Learned #729  
Don't be going all professor on me. What ever happened to him?> We could debate economics for days. I love it as he lived in the theoretical teaching world of economics and I live in the real life economics world. Two very different worlds that should have a lot of common ground, but as our debates showed...they is very little common ground.
Yep, I miss him as well; he was retired from Clemson and sure new Econ by the book... I think we all have our own view of economics; one that is determined by our assets, worth, and debt.
 
   / Retirement Planning - Lessons Learned #730  
If the fed stops the MBS bond buying, the housing market collapses. They will never be able to stop it fully. Meanwhile, the bubble gets bigger and bigger. But like I like to say...the best medicine for high prices, is high prices.

How did we ever get to a point where a huge segment of our economy is reliant upon a quasi government agency needing to buy loans that a normal market has no desire to own.
We just put our home and land on the market... I'll let you know.
 
 
Top