The coming economy and us

[Standby diver]

Not saying weapons training is for a zombie apocalypse scenario. But I have seen how people act on black Friday over flat screens. Now when pickings get slim, IF you have, the have nots will do what they have to do. I happen live in crowded areas which sadly won't change for a while.

But in a real depression my real valuable skills will be knowledge of medicine and welding, and if hard hat diving stays a valuable skill I'm set.

Sent from my Nexus 5X using Tapatalk

 

[bob dirt]

As someone who has worked agriculture and Construction for the bulk of my life as well as operated my own construction company, I ask you how many retired construction workers you see able to live a meaningful life not in pain?

My father pushed me to be a plumber, I loathed plumbing and ended up still doing the outside end of it in dirt working, I hated every minute of it. I hate being dirty, sore and wading in other peoples feces. A plumber? Well new plumbing is not bad, other than sniffing the carcinogens from glue and hot plastic, but working on old systems, crawling in a crawl space, having a leaking toilt dripping in your face is less than palatable.
Welding? Well some people find it rewarding, but it is very, very hard on your health as you are literally inhaling poison. Mind you both are honorable jobs as you are keeping society going, however myself I will push for my kids to be the ones looking outside the window, at the poor bastard working in the heat or cold.
They can make a little less money for their future (in reality they will make overall more money in their lifetime) rather than spend it trying to get their health back as they age.
I encourage you to read this article for more incite into this argument from an employment sense.

Construction means instability for the most part.

Ha...I'm one. 40 years in the HVAC world working 50-90 hours weeks in the Arizona heat. 32 years self employed. Retired at 58 last June and no medical problems in site. Money in the bank, no debt, have plenty of dough invested, lots of ammo, and get to ride every week all year. All of you guys worry too much about the future you have no control over. If you didn't start saving money when you were in your twenties, then you'll probably have to work till you can get SS. That sucks for you. ::021::

 

[mcrider007]

But we all know that sooner or later every debt comes due and somebody has to pay up. Downturns are just part of life, but go back to the first chart and you can see that this ought to be much deeper and years longer than what we got in 2007-2009. It's basic economics 101, which us older folks have seen before in the US (1970s) and it is currently hitting countries like Venezuela hard. Storing up for lean times is repetitive history which we've all read about in the Bible (or Torah or Koran) and the good news is the next couple of years to store up.


The down side is that it is inevitable that adding debt to the charts above means that the dollar will sooner or later devalue badly as inflation REALLY takes off. Our first house had a 13.5% interest rate, which would more than double a current mortgage. What will that do to your budget if you have a variable loan? And it means that NOBODY is going to be able to buy your house, so have something you like long term and can afford. Us old folks will be retired and fixed retirement incomes will buy less and less, if locked into low rates. The debt still probably would have caught up to us if Clinton had been elected, but Trump's plan can not come out better.


BOTTOM LINE:


So my personal plan and suggestion is to make hay while the sun shines. Make as much as possible for the next couple of years and save up while we can, have no payments, and cut the mortgage as much and fast as possible. After the "high" of spending, in the latter portion of Trump's Presidency this should see inflation which will absolutely stop house construction, vehicle sales, vacationing, and other industries which so many of our jobs are dependent upon. If/when rates go up (not right now), gold and other things which rise with inflation will blow away a retirement annuity with a low rate. If my forecast and those of the economists are all wrong, we will still be in better shape financially and in a less stressful place emotionally. I'm sharing these thoughts is so that you might think about your own situation in light of a few more facts and not go on a borrowing spree.

Thank you for the most interesting analysis but it seems to assume that our Republican controlled Congress will go along with all of Trump's proposal programs and this seems a stretch considering how many (especially Paul Ryan) have been against his spending proposals for years and think that a balanced budget is the answer to all the nation's problems. How does your crystal ball change if Congress doesn't give Trump the funds to do everything he wants and he launches a twitter war against anyone in Congress who opposes him?

Your advice to save and reduce debt prior to retirement is a good one (for any time period) but what should current retirees who have already reduced debt be doing (now) to protect investments that they depend on to maintain their standard of living? The stock market hates uncertainty and rather large number of "experts" have predicted a major correction in the stock market for the last 2 years (before Trumps' election)....which with uncertainly could easily snowball into the 40 percent drop we saw in 2008. Moving investments from stocks to bonds is not the thing to do if you expect interest rates to rise, likewise converting stocks or bonds to cash is subject to huge losses due to inflation. How long should one wait to move investments to safer ground...or should they just plan on riding it out? Warren Buffet says he can't predict what the market will do tomorrow, two months, or even two years from now but he will guarantee that it will be higher in 10 years...but he doesn't depend on investment income to live on.

 

[shrekonwheels]

Ha...I'm one. 40 years in the HVAC world working 50-90 hours weeks in the Arizona heat. 32 years self employed. Retired at 58 last June and no medical problems in site. Money in the bank, no debt, have plenty of dough invested, lots of ammo, and get to ride every week all year. All of you guys worry too much about the future you have no control over. If you didn't start saving money when you were in your twenties, then you'll probably have to work till you can get SS. That sucks for you. ::021::

I applaud you for sacrificing your youth for the risky gamble of a somewhat early retirement.

I chose more balance and still focused on retiring in my early fourties. Had I not had to care for a family member and spent often a Grand a Week on medication in our puke medical system, I likely would of had that dream come true.
I stil lhave rentals, being a irresponsible young man at one time and all with everything currently paid off. I am still on track to hopefully retire in my mid fifties so long as my childrens future is taken care of as well.
If not I am ok, I already traveled a chunk of the world and did things everyone else dream of, it is all about my children from this point on.

Many people do not have that luxury of retirement with the bulk of people losing their retirement in our crappy unstable Market, or simply have to wait until their 401k comes back up.
Of course I know many other people who want to retire but cannot as they cannot afford our crazy Medical Insurance.
Keep in mind that the average career now, depending on your field is an amazing 6years, wow wee.

IF someone needs SS, which arguably is the worst return on money ever, I hope they get it, and I fault no one for getting back whatever money they, and others have paid in as well.

Edit: this sounds way more sour than I intended. I sincerely hope that everyone finds good health and prosperity.

 

[Checkswrecks]

Thank you for the most interesting analysis but it seems to assume that our Republican controlled Congress will go along with all of Trump's proposal programs and this seems a stretch considering how many (especially Paul Ryan) have been against his spending proposals for years and think that a balanced budget is the answer to all the nation's problems. How does your crystal ball change if Congress doesn't give Trump the funds to do everything he wants and he launches a twitter war against anyone in Congress who opposes him?

I really truly hope with you that Congress will NOT go with the lunacy of cutting taxes and raising debt. I found this page a while ago and it has some pretty good charts:
http://www.marktaw.com/culture_and_media/politics/USA_debt_2009.html


What concerns me with Trump is that he is a high pressure intimidation style of deal maker. I'd be very surprised if he could get everything he wants. Plus, the Republicans since Reagan have had a really bad record as far as budgets. Most folks think it's the Democrats who tax and spend, but the bigger issue is balancing spending with income. In that, Bill Clinton was a star and Obama has actually done surprisingly well with the massive spending for war and the 2007-2009 mess that Bush handed him.

Your advice to save and reduce debt prior to retirement is a good one (for any time period) but what should current retirees who have already reduced debt be doing (now) to protect investments that they depend on to maintain their standard of living? The stock market hates uncertainty and rather large number of "experts" have predicted a major correction in the stock market for the last 2 years (before Trumps' election)....which with uncertainly could easily snowball into the 40 percent drop we saw in 2008.

Assuming that Trump will get some kind of spending bill means that the economy ought to be on a loan-based spending spree for the next couple of years. If we are going to see a downturn, to me it will begin in China, Europe, or India at this point.

Moving investments from stocks to bonds is not the thing to do if you expect interest rates to rise, likewise converting stocks or bonds to cash is subject to huge losses due to inflation. How long should one wait to move investments to safer ground...or should they just plan on riding it out? Warren Buffet says he can't predict what the market will do tomorrow, two months, or even two years from now but he will guarantee that it will be higher in 10 years...but he doesn't depend on investment income to live on.

And those are the $64 questions, aren't they? My own approach is to be an active manager and not lock/forget the retirement account at some low return annuity. It's more why I started this thread, thinking maybe that we could share ideas.

 

[shrekonwheels]

Good post Chuck, but to be fair Clinton benefited from the dot com bubble as well as leaving a recession to bush as it burst.

I do agree overall however.

 

[hobdayd]

Regulator, did you read the book I referenced? What did you glean?

 

[West]

Wow, interesting read and some fascinating perspectives.
What pops to mind are the lyrics from an old Don Henley song The Garden of Allah: "There are no facts, there is no truth, only data to be manipulated"

 

[magic]

I have been watching this thread from the start and decided to offer my 2 cents worth. I put my bike away for the winter 2 weeks ago and I'm sick of winter already, so might as well post on the forum. First a disclaimer; I am not a professional financial adviser. However finding yourself a good one should be your first priority. Stay away from former used car and insurance salesmen or anyone that works on commission. It sounds like a lot of you guys posting on this thread are close to retirement age or are at least thinking about it. I am 60 years young and have been retired for 3 years. We have been debt free for quite some time. As mentioned here saving money and eliminating debt is a good thing at any age. One rule that I was told years ago by one of my advisers was this: If you are over 50 and want to retire early, your money should not be in the stock market. As you get older your tolerance for risk gets lower. The idea being that by the time you are 50, you should have accumulated enough wealth and go into a preserving your balance mode and go with very low risk investments. Checkswrecks made a comment about low return annuities, well, that's exactly what I did. I changed employers in 2006 at age 49. This allowed me to reinvest all my 401k money (I worked there for 31 years) in whatever I wanted to. When the market crashed in 2008, my retirement money was in annuities paying 7.5%, 6% net after fees and money market accounts. I actually made money through the recession. Keep in mind that there are many kinds of annuities, this is where your financial adviser can help. I have read many articles about annuities being bad investments. To make a "blanket" statement like that is like saying all motorcycles are junk. Also, if you have a 401k available, take advantage of it. Put more than the usual 6% in it. Remember you can put up to $23,500 in it yearly if you're over 50 and also take advantage of the IRA deduction of $6500. These are all big tax breaks. Learn how to manage your own 401k, don't just let your money sit in the "default" funds. Most employers 401k programs let you transfer your money between many different accounts, free of charge. These are all things that I did to allow me to retire early.

I actually turned down an academic scholarship after high school and went into the skilled trades. My parents were furious, but at age 17, I knew everything and was sick of school. The skilled trade route worked out very well for me. By age 25, I had completed a millwright apprenticeship, got a machinist card by going to night school and was a certified welder. I worked for the same company for 31 years. Then because of downsizing, I took a severance package and moved on to an even better job. More pay and less hours. I started paying into my company's 401k at age 20 when it became available. I guess my point here is this; it can be done. A comfortable retirement can still be accomplished. Educate yourself on investing, 401k's, etc..and learn how to manage them. Take advantage of all the tax breaks. Tonight's news had a clip on some local (Wisconsin) companies looking for skilled labor. A survey showed that 80% of the companies surveyed could NOT find enough skilled people to fill job openings and expand their businesses. It went on to say that now there is even a shortage of instructors at the tech schools and even the tech ed class at some high schools are short of qualified instructors.

Again, I don't claim to be an expert on financial planning or investing. I just thought I would pass this info along, maybe someone can make use of it. Most of it is simply common sense. Like staying out of debt and saving. In closing, I would like to make a comment/observation on annuities. Years ago, annuities were often looked at as a bad investment. Low return, high fees etc.. Now, when I get together with friends and former co-workers, it seems like everyone has one or more annuities. Just an observation I noticed. Maybe the 2008 recession brought on the change. I will say that they are working for me.

Magic

 

[regulator]

Regulator, did you read the book I referenced? What did you glean?

Not yet. It's next on my list.

 

[patrickg450]

magic is a smart man

 

[rem]

It's not so much about how much you make ..... it's more about how much you owe. R ::012:: ::009::

 

[shrekonwheels]

Good Post Magic

 

[rid34fun]

This thread is interesting, and did get me a little fired up ??? Thank you for the post Magic. I have been an investor since I was young, and during Democrats and Republicans, I have always found a way to make money, sometimes differently. A good advisor is key, one that does not sell a particular family of funds or investments is best. There are lots of investing strategies, a good advisor will asses the best for you.

Everyone please be careful what you read, it Is almost all biased in one way or another. I have worked in finance most of my life, and I can make a chart support Hillary and you will hate Trump, or I can make chart that makes you love Trump and hate Hillary. Running an economy is complex, and not easily understood by even the best of economists. Debt is not bad either, as long as the money is invested in projects that return more than the cost acquiring that capital. The government gets into trouble when they absolutely have no plan to pay off anything And just keep spending. Both dems and republican are guilty. Like many of you, I have lived through a lot of presidents, and there is only one thing that is in common, and that is more taxes, they just move from one place to another.

The one thing we cannot do is continue to hand money to people who don't ever plan to work. Our country should help when possible, but in a sustainable way, not to redistribute wealth which is what the current democrats do,but they were not always like that. The trillions that have been spent recently have been to redistribute Americas wealth today and the future wealth. We have worked hard for ours, and should keep it. We have to love everybody though, we have to work together for real solutions, not just pointing out the other sides problems ::012::

 

[shrekonwheels]

IF you have ever tried to play poker against someone with basically a ulimited pile of money, you get why redistribution is so important. Further putting the "Robber Barons" Into check is the only real way the common man climbed the ladder of success leading to the highest ever standard of living for the average person the world has ever seen.

I was just watchin an interview with the CEO of YouTube. When she started working for google she was pregnant, they were at the time still in a garage, the garage she rented them.
When she was ready to give birth, rather than kick her to the curb, they started a daycare, a practice they now try and still offer despite growing immensely.
I struggle to understand why helping each other is now a bad thing, it is after all the only way the Human Race survived for so long.

If we have to spend some money to Educate, good, spend more. If we need to spend a little to help someone get on their feet again, good spend it.

It seems we have no problem at all spending money to bomb someone why is helping each other so difficult?

While I realize the Military has some pluses, such as Manufacturing and technology, overall I see it as the Elephant in the room which needs to be addressed.

 

[Dogdaze]

Shrek, you seem like a guy that has been talking to his young children, don't worry, I'm in the same boat. Problem is, the scenario you describe is borderline socialism and the US has been brought up to shun that thought process. I like it, it would be fair as my 7 year old would say, but there is profit in death and suffering.......................... but only for the 1%. So if a billionaire gave up 10% of his/her wealth ($100m) to 100 families, but ensured that the money was put to good use, paid for a house, set up an education trust and so enabling the next generation to prosper under their own steam as it were, would that not be benevolent thing to do? Would they do it? not in my lifetime, boils down to simple human greed.

 

[rid34fun]

I totally agree about helping people. I volunteer a lot and help fund a food bank and training program on the south side of Chicago where most kids have no father and no hope. I spend quite a bit of my time, not riding, but volunteering at several kids camps where they can get some good training and see a different life (well, sometimes I get to ride there) I just don't believe that a government should do it. They have never been good at that throughout history. So, lets all get together and help more people. There is a lot of need. But I also have seen how the handouts have hurt people, because they no longer want to work, but prefer all the free stuff our government gives them. That dos not provide help, it has hurt many more and destroys their dignity. I would prefer we all take on and mentor three people each, and not have the government involved, we can make a difference. But we need a pro business environment with low taxes to make sure there are jobs for all. It can be done, and everyone can prosper. Let's all find a way to give back, it fires up our individual passion and joy when we do. Merry Christmas all! If anyone with trades experience wants to ride to Lake Geneva WI, I have plenty of volunteer work available! Beautiful ride and good cause...