It’s time to sit back, relax and enjoy a little joe …
Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.
I’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …
Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
– Kenneth E. Boulding
If it weren’t for electricity, we’d all be watching television by candlelight.
– George Gobel
Credits and Debits
Credit: Did you see this? A new survey is out that reveals Americans now believe you must have an average net worth of $2.5 million to be considered “rich.” For those not keeping score at home, that’s a 14% increase from the year before. While saving $2.5 million may seem like an unattainable goal for many people, you can take comfort in knowing that it’s much easier to get there if you have an old memo personally signed by a technology company CEO laying around the house …
Debit: However, for most people, being rich is relative to their situation. For example, a person who earns $208,000 per year makes enough to crack the top 10% of US wage earners – that salary is more than three times what the average American worker earns annually. It’s also enough to easily afford the median-priced home in most parts of the country. However, everything is relative, as $208,000 is still not enough to afford the median-priced home in places like Massachusetts, Hawaii, or California. Um … and apparently Utah too:
Credit: Speaking of happiness, the amount of money it takes to make us happy varies, too. But a study from the University of Pennsylvania found that happiness is an easier goal to obtain than being rich. That’s because happiness increases for most people as their income increases – but only until their annual earnings hit the $100,000 benchmark. After that, happiness plateaus. Or so we’re told …
Debit: Needless to say, for the financially undisciplined, credit cards are a means of increasing happiness, albeit temporarily. And as credit card balances swell, the share of delinquent balances is also worsening. In fact, 1 in 9 active credit card accounts holders are making just the minimum payment on their balances – that’s the highest proportion of card holders since the tail end of the Great Financial Crisis in 2012. No word on whether this guy is one of them …
Debit: On a related note, JD Power ranked the nine biggest US national banks on – among other things – trust, customer service, account offerings, flexibility, and online presence. Now get this: The average score based on a 1000-point scale was only 658, with the top bank (Capital One) receiving a score of 689. This story was presented as something positive – but we look at it this way: If that was an actual exam, the top student received a D+. Heh. I wonder why …
Credit: In other news, the latest Fed manufacturing survey reveals that production sector growth and employment expectations in the US have reached their highest level since October 2021, increasing hopes that the optimism will eventually lead to restoring America’s industrial base to its 20th century glory days. Then again, that’s not to say that there are those who are looking forward to expanding industrial bases elsewhere …
Credit: Despite the optimism of American manufacturers, the sagacious Franklin Sanders observed this week that under the current debt-based monetary system, America “can’t have a strong US dollar (USD) and rebuild manufacturing because American manufacturers must export. They can’t export with a strong USD pricing them out of the market, so the USD must weaken, with all that implies for more inflation and higher domestic prices. A weak USD is the long term goal, so y’all keep the in mind. Yes, yes, that is good news for gold and silver.” That being said, when it comes to the manufacturing base, there is a lot of rebuilding to do:
h/t: @DanCollins2011
h/t: @AnkitatIIMA
Debit: Of course, the US manufacturing sector dominates the AI chip market. Now for the punchline, like most American companies, Nvidia’s AI chips are produced overseas. Now for the really bad news: Shares of Nvidia (NVDA) tumbled 17% (!) on Monday, erasing almost $600 billion from its market cap. The reason: A competing Chinese firm’s announcement that its DeepSink app provides comparable performance to Western chatbots at a fraction of the cost because it needs far fewer chips to crank out equivalent – or better – AI models than America’s ChatGPT offering. Hmmm. Shades of the Dot Com bubble, perhaps? Well … it sure looks like it:
h/t: @PinellasLP
Debit: On the opposite side of the market-performance spectrum we have the cryptocurrency known as fartcoin. No; that’s not a typo. Despite big stomach-churning moves in both directions on an almost-daily basis, fartcoin has seen more up days than down. As a result, as of last week the cryptocurrency had gained a jaw-dropping 18,500% (!) since its launch on October 21st. No; really.
Credit: By the way, market analyst Jesse Columbo notes that, “Amid the frenzy surrounding the current crypto mania, it’s important to recognize that many retail investors are falling into the classic trap: becoming overly bullish on flimsy assets like fartcoin that have already experienced significant price increases – a behavior that typically results in serious losses.” In other words: This will end badly for a lot of people; although you could say it already ended badly for this guy …
Debit: Meanwhile, the US is still on target to run a budget deficit of nearly $2 trillion by the end of this fiscal year – that’s on top of the $36.4 trillion the country already owes. Over the next 10 years, the national debt is on trend to grow by another $21 trillion, or 58%. How long can this go on before confidence in the “Almighty Dollar” finally crumbles? We’ll posit that there’s only one source you can consult who really knows. Then again, if you’ve purchased wealth insurance – especially in the form of physical gold – then the answer really doesn’t matter.
By the Numbers
A new study has identified where seniors can save the most money while enjoying the best quality of life. The report – based on 46 key metrics – examines affordability, health-related factors and overall quality of life. With that in mind, here are the ten best states to retire to:
10 Wisconsin
9 North Dakota
8 Delaware
7 New Hampshire
6 Pennsylvania
5 South Dakota
4 Wyoming
3 Colorado
2 Minnesota
1 Florida
Source: WalletHub
The Question of the Week
This poll is no longer accepting votes
Last Week’s Poll Results
Squirrels: Love ’em or hate ’em?
- Love ’em! 45%
- Meh. 32%
- Hate ’em! 23%
More than 1900 Len Penzo dot Com readers responded to last week’s question and it turns out that almost half of you actually love squirrels. I do too; I think they are incredible creatures. As long as they stay out of my attic! Thankfully, it’s warm enough here in Southern California that the squirrels in my neighborhood are perfectly happy to spend even the coldest nights in their dreys.
If you have a question you’d like me to ask the readers here, send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.
Useless News: More Soviet Humor
Two Russians are playing chess and drinking vodka. The first one says, “Comrade, if you had two houses, would you give me one?”
The other Russian says, “Of course. In Communism, we share everything.”
The first guy continues: “Comrade, if you had two cars, could I have one?”
His friend responds, “Absolutely! That’s the way the system works. ‘From each according to his ability, to each according to his need.’ So, yes, you could have my car.”
Finally, the first guy says, “Comrade. If you had two chickens, would you let me have one?”
The other Russian gets angry and says, “Hell no.”
“But why not, Comrade?”
“Because I have two chickens.”
(h/t: Greg)
Squirrel Cam
Here are Rebecca and Robby – who we think are siblings because they always dine together. On Wednesday they were caught enjoying a little lunch – but not without Rebecca nagging at her bro (sound up):
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More Useless News
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Letters, I Get Letters
Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not! You can reach out to me at: Len@LenPenzo.com
Somebody claiming to be Les Moonves — no, really — chimed in regarding my assertion that smart people aren’t fooled into thinking a person who drives an expensive car is necessarily wealthy:
Wow, Pulitzer Prize winning stuff. Life is short. If you’re someone who loves performance vehicles and doesn’t want to drive around in an old P.O.S. like a shlub [sic] why not enjoy yourself? Smart people in some cases are haters.
Uh huh. And I don’t need a 60 Minutes expose, Les, to learn that you’re obviously just another intolerant schlub-basher!
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Photo Credit: public domain
Good morning Len, and thanks for another good cuppa Joe.
Re: poverty, my coal miner grandfather used to say “It’s not a sin to be poor, but it’s damned uncomfortable!” Like many couples, we started out young & poor, and the lessons learned then on spending & budgeting have stuck now that we’re ‘comfortable’!
Also glad to see we’re included in Wallethub’s Best Places to retire!
Hi, Lauren. I hear ya. The first couple of years after we bought our house back in 1997 were tight for us. I remember we would “splurge” once per month by going out to Chili’s or Applebees. Other than that, we didn’t get out much because most of our income was going towards the bills. Looking back, I still wouldn’t change a thing!
Hi Len,
Love the topic of money and happiness!
People are so unique. I know peoplw who are happy earning $35,000 a year and I also know someone who makes $200k and is miserable because he doesn’t think he makes enough.
Have a great weekend everybody!
Sara
Me too, Sara. Everybody is different when it comes to how they spend their money (or money they don’t have) – and how they view money’s role in happiness.
Good round up this week. How much is enough to retire on? It depends on a lot of things. Where you live is probably the biggest factor. Next is whether you like to spend a lot of money on travel and/or hobbies.
I know this, Cowpoke: The so-called minimum retirement numbers these financial firms toss out are generally highly-inflated.
Serious question. Your squirrels have names but how can you tell them apart? (Don’t get me wrong. I love the squirrel cam!)
I get that question all the time, Nicole. If you watch the squirrels with regularity, it’s quite easy to tell them apart. In most cases it is their markings, or the size and condition of their tails; in other cases it is their personalities, or scars, or how they move. For example, we have one squirrel we call Richard who is identifiable by the rapid robotic way he moves he arms when he eats; he’s really quite comical! If we get a good shot of him on the cam, I’ll share it.
South Dakota is a secret. Don’t tell anyone Len. Interesting Fiesta of activity this next week with the tariffs and sanctions. Wish I could afford some more PM, but I will have to budget for it. We will skyrocket to 38 Trillion shortly. Cheers.
Hey Inahling,
Shhhh, on South Dakota; we like our peace and quiet!
Sticker shock is in full swing at restaurants. As prices rise, I am seeing video clips saying if you cannot afford to tip your server, do not eat out.
Then they proceed to show you how to calculate a 30% tip.
As a youth in the fifties and sixties, normal tips were 10% then 15% and settled at 20% for quite some time. If tips are a percentage, the $$$ go up with the meal prices. Watching how many tables are served an hour, and my check, 30% quickly approaches over $100 per hour.
My thought is, “If you cannot afford to pay your wait staff, do not open a restaurant.”
I hear you, Harry. I’ve written about this problem too: https://lenpenzo.com/blog/id1351-tip-inflation-blame-2.html
I don’t know why people have FOMO. Turn off your social media, and get a life.
I have FOBI. Frustration on being included.
I don’t think the rise in mental health issues with young adults coinciding with the birth of social media is a coincidence, Bill.
Being a conservative in upstate New York, I think that the mental health issues with young adults mostly comes from being raised without God, or falling away from God. Atheists generally disagree.
Yes; that is another important factor, Gee. I totally agree with you.
I can relate to the cat. One time I opened my wallet and someone loudly said, “Look at all the money!”. I said it’s all ones. 18 ones look impressive.
I would take the 10 minute with Jesus. He could heal my body completely, and I’d save thousands a year on medical and dental care. I could take care of a house and buy one. He could heal my crazy self, and a lot would change. If he healed my crazy, my posts would definitely not involve fruitcake.
Len, you know I had to really be missing Mr. Dave if I ate a piece of fruitcake in his memory.