"Americans’ are saving their money at the lowest rate in 73 years-the lowest rate since the Great Depression. The national personal savings rate was negative (!) 1% in 2006. That means that as a whole, the country is spending more than it is taking in. With the economy on a downhill slide, Americans may start tightening their purse strings. But I predict that instead, people will simply start running up more credit card and loan debt. They have gotten used to a certain lifestyle, and feel entitled to continuing living it."
I keep seeing reports that Elon Musk is the wealthies man on earth. Typically such reports use net worth – a fairly simple calculation that takes assets minus debts. As he’s considered in his current role in government – a private citizen – his actual bank account balances are unavailable but his stock ownership is publicly reported as part of his compensation package of the publically traded companies he owns.
The problem with wealth calculation is it assumes that assets are fully liquid and accessible, and that if Elon Musk wanted to fill up his bank account tomorrow, he could sell all his stocks and have a $234 or so billion dollar balance. Of course, that is not a realistic calculation – as many of shares may be restricted by his contract on how quickly he can sell them to avoid depressing the value of stock he owns, not to mention if he were to sell of a big block of stock, it would trigger a reduction of value to stock as the market became flooded with shares. The tax man would also take a large portion of proceeds as Capital Gains taxes when such stock was sold off.
Wealth is werid in that way. Many people who have net assets of significance don’t actually have access to that much case. An extreme example might be farmers and especially dairy men, who might have multi-million dollar holdings when you consider land, cows, equipment and crops. But they struggle to feed their own family off that limited milk check they get, with necessities of supporting the business like repairing and replacing broken farming equipment and paying property taxes on land taking a fair greater priority then their own needs, if they want to their business and ultimately their farm operation and income to continue.
Net assets is a valuable comparison in sense it gives some kind of estimate between groups of people about wealth. People can sell off illiquid assets, even if it comes at a steep cost compared to on paper value. But does it provide the great ability of comparison that people often give it? Assuming Elon Musk doesn’t want to canabalize his assets, how much money does he really have? How much money is actually in his bank account that he can draw upon today, without selling assets? We really do not know.
Lately, there has been a growing interest in people investing in various Environmental, Social, and corporate Governance (ESG) funds. They are usually sector funds, that only invest in businesses that have been selected based on their environmental, social, and corporate governance performance or actions. The idea is you invest in things that make the world a better place, rather then a worse place.
ESG funds are heavily marketed. It’s hard to open Facebook without a targeted ad, trying to play on your emotions and feel good about investing in these kind of businesses. But often if you look more then skin deep, they are highly scammy with few environmental and social benefits, despite the marketing hype. Often the products sold by ESG companies are hardly better then sold by those businesses not chosen by the ESG fund marketers.
But a bigger problem is that ESG companies aren’t well diversified compared to most market indexes, and that investing doesn’t actually decide which businesses have good business models and make money. Ultimately, it consumers, not investors that decide if a business is profitable and make sense. By buying an index fund, you end up with both ESG and non-ESG, and will profit when either one makes money. Risk is lower, because you have a wider range of stocks then only the ESG funds.
It might seem silly but I always unplug my microwave when it’s not in use.
A while back, I plugged my microwave into my Kill-a-Watt meter and found it was using 2 1/2 watts per hour, when the microwave was off to power the clock and controls 24-7. 60 watt hours a day, doesn’t sound like a lot but there are 365 days a year, and that works out to be nearly 22 kW/h a year.
At 15 cents a kilowatt hour, that’s $3.30 a year. Not a real big expense, but every little thing adds up. Not to mention the carbon emissions, the pollution from the extraction of coal, uranium and natural gas to spin the turbines.
Not a lot, but electricity isn’t free and unplugging the microwave isn’t a lot of work.
