Juggling Dynamite

Turns out spending on others and buying ourselves experiences and services that save time are more fulfilling than buying things…couldn’t agree more.

Latest research suggests wealth alone doesn’t provide any guarantee of a good life. What matters a lot more than a big income is how people spend it. Here is a direct video link.

I also appreciated this Suze Orman segment this week on the topic of buying ourselves things–in this case a mid-life present-car. Here is a direct video clip.

Here’s Suze (with my bold added):

“People, have we learned nothing from the financial crisis? Edmunds.com announced that in October the average length of a car loan was 67 months. And that’s just the average. Nearly one in four new loans earlier this year was financed with a loan that lasted between 73 and 84 months, according to Experian Automotive.

I want to be clear: Any car loan greater than 36 months is a sign of financial irresponsibility.

I am not at all surprised that lenders pushing car loans—especially the financing arms of auto manufacturers—are offering these insanely long loan terms. They are in the business of needing to sell their product, and given that household income has not gone anywhere for years, they know the only way to move cars off the lot is to entice buyers by offering longer loan terms that magically make an unaffordable car look affordable.

And it’s not as if a car dealer is ever going to recommend you buy a less expensive car to keep the payments affordable and get the loan paid off in just three years. No one with something to sell—something they sell on commission—is ever going to look out for your best interests.”

Suze started out life as a stock broker, she knows what she’s talking about re commissioned salespeople…She also took some heat a few years back when it was revealed that she keeps the bulk of her savings in Tbills rather than risk assets. People assumed someone syndicated as a “personal finance” expert should be loaded up on stocks and mutual funds…apparently Suze has learned how to hold on to her money better than most.

Further to my articles last week here and here, gambling with large sums of money is a well worn path to financial devastation. Addictions and denial with gambling run rampant, but most people understand it is self-destructive.

The problem with playing financial markets today is that participants are spinning the wheel and calling it “investing”. Wagering large portions of life savings, many are taking credit for lucky outcomes as if produced by talent and skill. So far central banks have been able to keep the game going and attract more victims to the table, but the odds are horribly stacked and luck never lasts indefinitely. See: Is Wall Street now just a form of legal gaming

“Whether you sit directly at a casino table, or you sit at your own virtual one. The same sort of rules apply: Sure your playing against other players, but you’re all playing against the house. And today that house is Wall Street where the actual bank is now solidly owned by Central Banks.”

Good discussion of economic facts with David Stockman this morning…

David Stockman, head of President Ronald Reagan’s Office of Management and Budget, and Paul Roberts, author of “The Impulse Society,” examine the state of U.S. fiscal policy, spending and budgets.  Here is a direct video link.

Asset bubbles have a fleeting bump in the wealth of some households and thereby perversely dissuade fiscal discipline and healthy saving and investment rates as the value of assets go up. Then when price bubbles burst once more, households and the economy are revealed to be years behind the capital targets needed. Here is a direct video link.

Central banks are wrong to increase their balance sheets and try to contain inflation at 2 percent. Here is a direct video link.