Everybody Loves Your Money

MyMoneyBlog has done some great posting about the average spending habits of people.  I always find it fascinating to see how people split up their budgets.  I guess it’s a bit of financial voyeurism, but it is very informative.  Jonathon also had a post a few days ago that discussed this further so scroll down on his site once you get through this article.

NCN has been doing some retirement calculating, which we all should be doing.  Check out his reality.  I have also been doing some retirement calculating and don’t count social security either.  I figure if there is anything left for me by the time I retire, that will just be icing on the cake.  Frankly, I’m not holding my breath.

Suns Financial Diary discusses various savings scenarios, based on age and income.  As you’ll see in his post, the older you are, the more you have to save.  Compound interest isn’t kind to those who have waited too long.

You know how I love cars.  David @ MyTwoDollars tells us which cars are cheapest to own after five years.  I was also very suprised that the Honda Civic wasn’t on the list.  I would have expected that would have been near the top since it has great fuel economy and Hondas are known for holding their value and minimizing depreciation.  I was glad to see the Honda Accord on the list, since we own one.

Tricia @ BloggingAwayDebt discusses alternate sources of income.  My family does a few things to pick up extra money.  This blog gives us a bit and my wife also teaches piano lessons as well.  It’s not making us rich, but helps pay for those extra things that pop up during the month so that we can maintain our investment goals and finish building our vacation house.

I was reading an article recently that mentioned investors are looking for Best Buy to buy back some of their outstanding stock rather than buy other companies.  I would say that their track record of buying companies isn’t exaclty great considering they dumped a ton of money in to their Musicland purchase a few years ago and then later gave the company away as long as the buyer assumed the liabilities.

I didn’t realize that Best Buy had purchased Speakeasy.  It will be interesting to see how that plays out for them.  Speakeasy has been a niche ISP and it seems like they are somewhat of a contrast to the culture at Best Buy.

As I read this article, I did notice that the investors didn’t ask Best Buy to dump all of their higher paid employees and then hire a bunch of low paid, low knowledge workers in their place.  Maybe Circuit City should watch their competition’s investors and reconsider their strategy of hiring low paid workers in place of someone that might have had a chance at helping you.  I know I haven’t been in there since I read the news a few weeks ago about Circuit City’s strategy.  Heck, I don’t even read their advertisement in the Sunday paper anymore.

I just read an interesting article here that discusses the current economy and the struggles of being young in it.  My overall observation is that I seem to be reading more and more articles like this.  The author talks about the aging baby boomer population and hints at some of the issues that are sure to come as more and more of this “bubble” in our population hits the beaches.  The younger generations will certainly see a significant strain on the economy as more and more of these baby boomers attempt to live without working.  He also talks a bit about the cost of college and the overwhelming debt that some graduates end up with after they graduate, (or don’t graduate, but still have the debt).  Certainly some people will attack this guy and say he’s just a doomsday author who has a negative outlook on the economy and the world in general.  I tend to take a less controversial view.  I think this is just one more person that is recognizing that the economic fundamentals in our economy aren’t all that great.

-Huge deficits

-Huge national debt

-Average consumer debt over $9k

-Housing prices down for the first time in 2 decades

-Morgage defaults drastically inreasing due to creative mortgage loans

-Largest US employers being service sector, lower paying jobs (Walmart)

-Aggressive global competition

-Declining pension opportunities

I’m sure others could list even more factors.  I have to wonder whether authors like this are simply “warning signs” that the overall party may be over.  Prior to the dot com crash, there were these same types of authors saying that the financials of these companies just didn’t make sense and there was no reasonable explanation for their inflated prices.  Others poo poo’d on them saying that they just didn’t understand the new economy.  In the end, the authors were right.  In more recent times, there were those that said the housing price increases couldn’t be sustainable and the mortgage loans that people were signing up for were outrageous.  Others would simply tell them that “they aren’t making any more land”, or “You just don’t understand real estate”.  Well, I think most would agree that, while those authors were in the minority, they were right.  We are now in the midst of a small real estate melt down.  It’s hard to say how ugly it might get.  I would venture to guess that if the economy starts heading south and we go in to a recession, the housing market will get even uglier.  Overall, I have a very concerned view of the economy right now.  Sure, I’m just an amateur, but I think as I live through a few more of these cycles of boom and bust, I’ll probably be accused of being one of those negative authors that just doesn’t get it.  Pardon me while I go move a bit of my investments back over to cash.  I think I’d like to play a little defensive investing for awhile and be ready for the next buying opportunity.