Living Frugally and You Can Retire A Millionaire

The quickest way to become a millionaire is to get a high paying job and saving a portion of that income for retirement or future use. If you can't get the top jobs or create a start-up that can be sold then you can still become a millionaire it will just take more work. It is still possible as this story or this one and the most recent story of a gas station attendant who accumulated an eight million dollar fortune over his life can attest. We as humans are always so surprised when the person next door who lives prudently has more money than we do especially if their income is lower than ours. We wonder if they inherited it or they must have a second job. It really is most likely just a simple idea of saving money.

I'm fascinated with these stories because it shows that with patience and hard work you can move yourself from a lower class to a higher class. It does not happen for everybody yet it is attainable.
The media also likes these secret millionaires because we as consumers like to hear about them. It plays to our desires and wants.

All of these individuals have made good stock picks or investment choices. It was not by picking investments though that they were able to amass fortunes. The real change here is that with each increase in wealth they did not spend the new wealth but kept the same lifestyle. Not changing the lifestyle even if you could technically afford it means that you can use profits and the same money to grow your money even more. It is difficult to predict the future and to live frugally allows a person to accumulate wealth and be able to maintain the current lifestyle in case of job loss or other event. If each time you had new wealth and changed your lifestyle you would erase all the gains.

Living frugally is not the easiest choice and at times I do not take the frugal path. Yet if I want to amass a fortune too maybe I should start living more frugally and that should be a choice as wise investors also choose. It can be done and let's take the advice of their lives.

Jobs, Jobs, Jobs

The American Economy again created plenty of jobs last month and decreased the unemployment rate. The wages of workers were slightly up. Everything was good news and the market meet it with a whimper. It seems that the market wants more and expects more. The growth while strong and healthy is not spectacular. The market always demurs when expectations are met. Only beats and misses matter. Otherwise it just shows that it is pretty fairly priced and followed. Maybe we should just set lower sights for the growth of our economy.

It is better though to stick with high expectations. We would nit want to revert to the mean and take mediocre results as strong gains. Our economy can do better, should do better, and we should push for policies that allow wider growth and less hassle for businesses. Open up trade, remove barriers, and free movement would be a great start. Let's help everyone in the world with higher expectations and then let us beat those expectations.

Links Worthy of Attention

With the recent switch in governmental power the ever weighty words of Hayek. Always good to remember.

Urban Onshoring: The idea of bringing back tech jobs. This focuses on one company in the South Bronx and one aspect of a possibly bigger movement.

My babysitter extraordinaire when I was younger has a wonderful blog and this post about remembering the real part of people's lives is more important than the online parts. 

The Economist reviewed The Cambridge History of Capitalism is a comprehensive study of the thought of Capitalism. Probably going to buy this soon. I can't stop myself from getting a good book.

A look at WeWork. It's fast rise and its take on coworking.

And finally Netflix is adding new programing. Consistently and regularly. Still think it is a bubble though.

Disappointing Job Numbers

August had extremely slow job growth from the previous expectations coming in at 142,000 new jobs rather than the expected 215,000 new jobs. At the lowest level of new jobs created in the United States this year. There was some brighter spots in the report, the unemployment rate went down and wages rose faster than inflation. All good things for people with jobs. The unemployment rate though went down because less people are participating in the labor force not because of new jobs.

The effects of this report on the market will probably be negative at first. Although I could see the market rise later because the Fed might be unwilling to raise rates or slow bond-buying after such a weak report.

We will just have to see but I would be cautious trading today and the next week until more information comes out. Trade Wisely.

10.10 is a Terrible Idea for Business and Workers

The president and many of his supporters have raised the call to bump up the minimum wage 39% over the next few years. It has been touted as a way to release many people from the chains of poverty and boost income. Today though the CBO (congressional budget office) said that the increase could cost the economy around 500,000 jobs. Not a trivial amount and one that is definitely affecting those making minimum wage or just above it. Combined with the ObamaCare job loss and it looks pretty dire  for finding work. They also claim that it would raise 900,000 families out of poverty, good for them to get so many people out of poverty while destroying 500,000 jobs. Also, that only holds true if the poverty rate is not changed which it is changed with inflation or at anytime congress decides it is different. With more people making more money chasing the same amount of goods you can be certain that it will not lift anyone out of poverty but it sure will put 500,000 people out of work. Think about how many people were pulled out of poverty from the last wage hike. My guess is about zero, it could have been a few of course.

The administration claimed today that the CBO cannot always be trusted and they make mistakes. Sure the organization makes mistakes sometimes because after it makes recommendations the government sometimes changes policies. And not only that but the current administration held pretty tightly to those CBO numbers about the effects of ObamaCare and the deficit when they needed. This is a case of them playing politics and spinning a bad story for their plan.

Now, most economists agree that minimum wage hikes effect workers and cause some unemployment. It just has to based off of economic rules. The effect's magnitude is the thing in question among all but the most staunch liberal economists. It makes businesses hire few workers and instead buy machines that are now cheaper than labor. It makes firms decide to work and demand more from each individual worker. That's nice to now have to worker harder on those already struggling.

The last thing it will do is cause everyone else to demand a higher wage. Those making 10.10 now will not stand for soon making minimum wage. Instead they will also ask for a new higher wage line with the work they perform. Now we have just inflicted ourselves with higher inflation. The President's goal could be higher inflation to take away the debt burden but what he did was taking those who invested wisely and saved and destroyed that saved wealth so some people can win. I think strongly that the government should not interfere with who wins in the economy and who loses. Especially when it trashes the savings of one group to pay off another. It is shady and should not be done.

If the government passes the hike which it looks like it might. Companies that sell machines to perform tasks might be a good buy. Also, get ready for increased inflation and news of businesses laying off workers and small businesses perhaps closing because of the inability to pay the new higher wage. Mandates are rarely good because they do not take into account the changes in the organic economy and are blind to what might actually be happening.