By Edward Leone Jr. CFP RFP RIA MBA DMD
303-478-6793
edleonedds@gmail.com
As you should now be aware, I moved this blog to a quarterly publication. I promoted my e-book published at Amazon Kindle as the 2nd quarter blog publication. If you have not read it just yet, “Family Financial Health and Family Financial Wealth” on Amazon Kindle for the cost of $2.99 is available,an informative read. Please enjoy.
There are so many factors both economic, social and political which are a part of the current mix in the elements of life and business. According to the FPA Journal published for September 2018:
The average minutes per day engaged in texting by individuals is 26.
A personal physical appearance and hand shake are important measures of character to 72% of people.
Nine out of 10 people prefer small meetings as a communication method. This may be important to you business strategies.
31% of married couples have disputes over finance issues.
There 205.6 bilion e-mails sent globally each day.
The average individual remembers only 25% of what was heard.
Customer and client experience are important factors in business loyalty relations.
Many factors being reported as progress in the growth of the US economy are positive as compared to our experience since 2008. Many of the reported datas need to be examined a little closer. Inflation is being reported at about 2%; however, over the past twelve months, energy costs are up over 11%, hospital costs are up around 5%, oil costs are up 25% per barrel and gasoline prices are up over 20%. Our Government changed the way it calculates and reports inflation in the 1980s. Our current inflation reports of 2% would be 6% if calculated as it was during that period. According to Bureau of Labor statistics, the unemployment rate is at 3.9% and average hourly earnings were up 2.9% from a year earlier. You can see based on the above information that life style expenses are accelerating above the inflation rate. It is likely that many do not have much discretionary income to save or spend. We are not being made aware that the Q 6 unemployment rate (includes those who could be working but not seeking employment currently) is at 7.4% for the month of August. It is clear that we are heading in a positive economic direction, but that we have a long way to the aspect of economic growth to get where we need to be to see further consumption and saving while reducing debt.
US debt is at 105% of GDP ($19.5 Trillion debt). Global debt is at 325% of GDP ($217 trillion debt). When the FED was in function in 1917, if you had $850 today that purchasing power is at $10. These numbers represent long term historic trends engaged by governments and the banking systems to promote the economy through war, depression and accelerated growth periods. We need to insist on the reduction of debt governmentally and personally along with economic developement and growth over a long period to overcome the dummy stuff we have experienced over the last many years in this country and over the world. It appears to me that discretionary spending by many of us is currently supported with borrowed money (your credit card).
Commodity prices are increasing as a result of global economic growth. This is a good trend if it can be continued without increasing government debt. China, Europe, Japan along with other Asian economies and other developing economies are challenged meeting debt obligations. The dollar is a strong currency in international markets. This makes our exports more expensive to purchase by international entities and burdens debt payments that are usually made in dollars by foreign governments. If the dollar was a weaker international currency, the above issues would be modified, but the flow of foreign investment into the US economy would be reduced since returns would not be as attractive as they are in current US markets. You see there is no easy balance to these dynamics.
It is very important that those who are engaged in building assets for education costs, housing costs, retirement costs and emergency needs must reduce immediate consumption and dedicate with discipline asset building to meet these goals.
I am optomistic that we are on a tract that over an extended period of time along with more typical economic cycles will bring us where we need to be regarding well being and international positive status.
Leonesmoneymonitormonthly's Blog 