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 hope everybody had a wonderful week. And with that, let’s get right to this week’s commentary, shall we?
Financial crises are like fireworks: They illuminate the sky even as they go pop.
– James Buchan
Credits and Debits
Credit: Did you see this? Let’s start with some good-news-bad-news this week. First the good news: Roughly 1 in 9 American adults have a net worth of at least $1 million. Now the bad: A $1 million net worth doesn’t go very far these days in retirement – especially if most of that million bucks is tied up in home equity.
Credit: Of course, the so-called “magic number” for retirement varies from individual to individual. But one study from last year found that Americans believe it takes a net worth of $2.3 million makes you officially “rich.” We agree that number should be more than enough for retirees in most parts of the US – although for most people that probably isn’t enough for a perfectly happy retirement in places like the Northeast or West Coast. Besides, depending on who you ask, everything is relative… especially when you consider that wealth can be fleeting…
Credit: Speaking of happiness, the amount of money it takes to keep us in high spirits varies, too. In fact, yet another study has determined that although happiness increases for most people as their income increases, it plateaus once they reach $100,000 per year. The take-away here is that being happy is an easier goal to obtain than being rich – especially for those whose age is somewhere in the vicinity of their shoe size.
Credit: With that in mind, saving for retirement is more important than ever. And it’s a generally-accepted fact that women display better savings habits than men. But while women tend to save more of their paycheck for retirement than men, a recent study of 5 million retirement accounts shows that they still trail them in 401(k) account values. The average 401(k) balance among men in 2025 was $194,597, compared with $146,476 for women. For what that’s worth. As for elsewhere in the battle of the sexes…
Debit: Then again, many Americans are having trouble living on their own, let alone saving for retirement. As of last year, more than 25 million adult Americans under 35 lived with a parent. For those of you not counting at home, that means roughly one in three people in that age group have yet to leave the nest. Yikes! And, no… it wasn’t specified how many of those adult children slept in their parents’ basement. Er… assuming they’re even allowed in the basement…
Credit: In other news, we see that Elon Musk recently became the world’s first trillionaire. Put another way: Elon is now a billionaire 1000 over, and a millionaire one million times over. Yeah… that’s undeniably wealthy by any measuring stick. Now here are a few more fast facts: Musk became a millionaire at age 27, a billionaire at 41, and a trillionaire at 54. Oh… and then there’s this:
Debit: On a related note, the Federal Reserve Bank of Atlanta’s GDPNow model currently estimates the US real gross domestic product (GDP) growth for the second quarter of this year at a 3.3% annualized rate. And while that may seem impressive, things don’t look quite so rosy when measuring America’s GDP in terms of gold instead of the US dollar (USD). See for yourself:
(h/t: @gloeschi)
Debit: By the way, with the National Debt is careening towards $40 trillion, the CBO is projecting that the US deficit will finish the current year – which ends on September 30th – at nearly $2.3 trillion. And yet nobody in Washington seems alarmed. Unlike these guys…
Debit: At today’s market price of roughly $4350, the US gold reserve is worth $1.2 trillion. Now for the punchline: The federal government spends $1.2 trillion every two months. That also means gold would need to be about $87,200 to fully back the M2 money supply. And it would take $150,000 to cover the National Debt. Unfortunately, after decades of gross mismanagement, the Fed has steered the economy and the financial system into a cul-de-sac. So the choice remains the same: Keep printing and accelerating inflation, or stop and watch the markets fall apart. Then again, that decision is among the worst-kept secrets ever …
Credit: Needless to say, at this point it’s important that we all get one thing perfectly clear: Silver and gold have always been a long-term storage of wealth – that is, wealth insurance as opposed to an investment, regardless of how they both perform over the shorter term.
By the Numbers
With the United States’ 250th birthday quickly approaching, Americans are gearing up to celebrate America’s semiquincentennial in patriotic style, with parties, picnics and professional performances. With that in mind, a recent study revealed the ten states that spent the most per capita last year on fireworks. Can you guess the two states that spent far more per person on pyrotechnics than all the others?
$2.89 Indiana
$2.92 North Dakota
$3.46 Montana
$3.91 Wyoming
$4.21 Ohio
$4.69 Nebraska
$5.34 Alabama
$5.49 Kansas
$11.60 Missouri
$12.29 South Dakota
Source: Facebook
Last Week’s Poll Results
How much was the biggest prize (cash or merchandise) you’ve ever won?
- Less than $100 43%
- $100 to $1000 41%
- I’ve never won anything! 7%
- $1001 to $5000 6 %
- More than $5000 3%
More than 2100 Len Penzo dot Com readers responded to last week’s question and it turns out that nearly 60 of them claim to have been fortunate enough to win more a prize valued at more than $5000. Wow! Frankly, I find that a bit hard to believe – especially since there were slightly more respondents who claimed to have won a prize valued at more than $1000 than those who claimed to have never won anything at all. But, hey… what do I know? These polls are not scientific, after all. And maybe I’m just extremely unlucky when it comes to contests.
Last week’s question was submitted by reader Frank. 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.
The Question of the Week
Useless News: True Story
When asked for his name by the coffee shop barista, my brother-in-law answered: “Marc; with a C.”
A few minutes later, he was handed his coffee with his name written on the side: Cark.
(h/t: Paul Neelon via rd.com)
Squirrel Cam
When the squirrels (and my dog) are away, the bunnies will play. This is a (very) up-close view of a desert cottontail…
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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
This week’s note is an e-mail message from Sandy:
I’m going to try a test. Do you think this is good enough to get air time in Black Coffee?
Not a chance, Sandy.
If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀
I’m Len Penzo and I approved this message.
Photo Credit: public domain