Examining the cost of living between 2000 and 2019: Inflation has played a big part in shrinking the American middle class.
Most Americans are familiar with Alice in Wonderland. The Red Queen’s race in the story highlights Alice running but remaining in the same spot. Many Americans can relate. They are working harder yet somehow feel stuck. Putting more and more energy just to stay in the same spot economically. And many are unable to keep up. The middle class is dramatically shrinking. Many in the United States understand this yet don’t know the exact reason why so they lash out at various culprits. While this is a multifaceted problem there is one issue we can pinpoint. Inflation and the culture of debt. All we need to do is look at is nearly 20 years of data and measure how the price of various goods and commodities are changing over time.
Read MoreMillennials will be crushed under debt: Non-housing debt now reaches $4+ trillion in the United States.
Millennials continue to face the struggles of living in a world where they are deep in debt and the idea of buying a home is becoming more of a farfetched pipe dream. As recently as 2009 non-housing debt stood at $2.5 trillion. Today it is over $4 trillion, a 60 percent increase in 10 years. Of course, it is no surprise that 2009 is the official end of the Great Recession and much of the recovery has come at the expense of going into massive debt. Millennials continue to face struggles in purchasing homes because they are saddled with $1.46 trillion in student debt. Non-housing debt is already creating deep pressures on the balance books of Millennial households.
Read MoreThe total market value of Crypto Currencies has fallen by $700+ billion with Bitcoin falling to $3,738 from $20,000 in December.
The crypto currency market is in total free fall. If you flash back to late last year, there was a FOMO movement regarding crypto currencies pushing the total market value of roughly 2,000 coins to $1 trillion. First of all, this was clearly unsustainable. While many aspects of block chain, smart contracts, and crypto currencies are here to stay the previous valuations were clearly a bubble. Many people got lured into a mania and the collapse of the crypto markets has been astonishing over the past year. Total crypto currency market value has dropped by $700+ billion. This value has completely evaporated and it is very clear that there have been players behind the scenes just pumping up values and praying on people that simply went full on FOMO. Looking at the following charts is breath taking.
Financial Independence, Retire Early: The FIRE Movement.
I’ve been intrigued by the Financial Independence, Retire Early (FIRE) movement for many years now. There have been a few camps of thought when it comes to retirement. (1) You have those that say save very little of your paycheck and put it away in a 401k for 30 or 40 years and then you will have a nice nest egg when you retire. (2) You have those that don’t save and work until they die and heavily rely on Social Security – a larger number of Americans than you probably would think. (3) The wealthy that simply watch their money grow. (4) The FIRE crowd that earns well but lives frugally and stashes away a lot of money in order to accelerate their financial independence. We’ll focus on number four for this article.