The Last Capitalist in Chicago

Are celebrities and the wealthy profiting from the Maui devastation? Many people in Maui are concerned that Wall Street, resorts, and other wealthy individuals like Oprah will take advantage of the devastation to enrich themselves and further their business interests. The island of Maui is already having a cost of living crisis. This will probably be made worse from unsavory people buying up property and land at a discount to build resorts and expensive houses. The people that have lived their entire lives on the island may be forced out by the rising cost of living. Oprah Winfrey currently owns about 2,000 acres of land on Maui. When most other cameras were turned away, Oprah and her crew were allowed access to community members. It would be one thing if Oprah showed up without a camera, but she brought an entire camera crew to film what she was doing. What follows is a lot of speculation, but I think the past shows that some of this may materialize. The wealth of someone like Oprah contrasts sharply with the challenges residents of Maui face. The State of Hawaii has lotteries for affordable housing which is the only way a lot of residents can get an affordable place to live. Another concern regarding Oprah, is that she and other celebrities will use their status to appear like they are on the side of the average resident when they are in fact trying to enrich themselves from the misfortune of other people. Mark Zuckerberg acquired land in Hawaii with a reacquisition firm posing as families to purchase individual lots from sellers. These sellers thought they were selling to families, not a billionaire who was trying to aggregate land into a giant land plot. Oprah has a questionable history. She was friends with, and was involved with, Harvey Weinstein. She also led to the rise of Dr. Phil and Dr. Oz. In addition, her African schools for girls have been accused of sex abuse and some people claim she played a part in covering things up. In addition, homeowners’ insurance rates are sure to spike in Hawaii given the widespread devastation. I would argue we are seeing celebrities and the wealthy gobble up land in Hawaii, often at the expense of people that are experiencing the worst events of their life. Hawaii should be a place that everyone can enjoy. I fear we are watching more and more land being purchased, consolidated, and controlled by billionaires. One of the largest issues is the use of deception and manipulation to acquire land and make billionaires even wealthier. Tags: maui wildfire, maui, maui wildfires, wildfires, hawaii wildfire, wildfire, hawaii wildfires, maui fire, maui fires, maui wildlife, lahaina wildfire, maui wildfire video, maui brush fire, wildfires maui, maui wildfire update, maui wildfires live, wildfires hawaii, hawaii maui wildfires, maui wildfires latest, western maui wildfires, maui news, maui fire update, hawaii wildfires 2023, lahaina wildfires, maui wildifres, wildfire damage, lahaun wildfire, fires maui

Why is chicken so cheap? Chicken is one of the cheapest meats available at the grocery store, but did you ever wonder why? Efficient Processing: Labor is often the most expensive input in any product, including food products. Chicken processing is highly automated, but when you talk about quartering or sectioning meat into legs, wings, etc., that is much more manual, even if a machine is doing it. Every time a machine or person touches a chicken, that is adding processing costs to the final product. It is also well documented that there are safety issues surrounding workers doing chicken processing. Injuries at processing plants adds to the overall expense of producing chicken. Given that labor is the most expensive input, there is pressure to cut corners at the expense of safety. Economies of Scale: Both Livestock farms and meat processing facilities are highly mechanized and automated. One of the main advantages of economies of scale is being able to distribute fixed costs over many units, chickens in this case. Specialization and division of labor is another concept that has revolutionized society, and chicken processing specifically. You have highly specialized machines and staff that concentrate on just one process. Workers become more skilled at their specific tasks and utilizing the equipment assigned to them. However, its important to note the high rate of burnout and injury associated with doing just one process all day, repeatedly. In addition to economies of scale in labor and equipment, you also can apply this concept to negotiation when purchasing and selling. The more feed you are buying as a farmer, the cheaper price you can get per unit. For the meat processor, the more chickens you are purchasing from a farmer, the more you can negotiate that price down. There are also economies of scale regarding logistics. If a truck is going to a destination, it really does not add very much additional cost whether that truck is half full or totally full. It is always best to run trucks that are full of cargo. Short Growth Time: Chickens can be market ready in the European Union in 42 days and in the United States in 48 days. Let’s talk about this further in the next point which is: Breeding and Genetics: A broiler chicken is bred and raised specifically for meat production. Selective breeding emphasizes favorable traits like a high growth rate. Broiler chickens grow fast, make efficient use of their feed to produce meat, and have a high meat yield. In the United States, the most common you will come across in the grocery store is the Cornish Cross which is a hybrid of the Cornish and White Plymouth Rock breeds. Contrary to popular brief, hormone usage is not as widespread as the public believes. The high growth rate of broiler chickens is primarily due to genetic selection and nutrition. Byproduct Utilizations: While I have been saying “whole chicken,” when you purchase this at the grocery store, it is not in fact, whole. The organs, feathers, blood, beak, neck, and feet have all been removed and sold or repurposed. If you visit an Asian supermarket, and even some Walmart, you can purchase chicken feet and gizzards. Subsidies: Tax money subsidizes farming, including livestock. In the United States, corn and soybeans are heavily subsidized, and form the bulk of livestock feed, including for chickens. Soybean meal is the primary protein source in chicken feed due to its high quality amino acid profile. The federal government offers crop insurance programs to mitigate weather, pests, and market risks. There are also price support programs whereby the government purchases surplus crops when prices are low and releases them then the market price rises. Direct payments are even made to farmers to provide a stable income. Looking forward, I believe more and more of our diets will be composed of chicken for the near future as people shift from beef and fish to cheaper meat sources like chicken and pork. We talked about some of the many reasons chicken is so cheap. It is important to have an affordable meat source to feed people. Protein is an important source of any diet. Chicken is delicious and offers a satisfying meal for all classes of society. Works Cited: https://www.chickencheck.in/farm-to-table/what-are-broiler-chickens/ Tags: chicken, why is costco chicken so cheap, why is costcos chicken so cheap, why is chicken so cheap in america?, how is costco chicken so cheap, chicken so cheap, chickens, costco sells chicken so cheap, backyard chickens, rotisserie chicken, costco chicken, chicken feed, fried chicken, raising chickens, costco chicken cheap, costco cheap chicken, cheap chicken coop, processing chickens, chicken processing, how to butcher a chicken, chicken butchering, poultry processing, chicken plucker, chicken processing factory, chicken slaughter, raising meat chickens, butchering chickens, butcher a chicken, chicken processing cones, chicken meat processing, chicken processesing, broiler chicken processing, beginner chicken processing, cornish cross chickens, chicken processing equipment

Why owning a gas station is a nightmare High competition: Gas stations are highly competitive. The profit margins on selling gasoline are small. Gas stations make money mostly from the convenience stores and other services like car washes or auto repairs if they have the bays to service cars. There can be significant market saturation in some areas leading to excessive competition which affects profitability. High operational costs: There are significant expenses to operating a gas station such as maintenance, repairs, utility bills, and paying staff. Maintenance costs involves the building, pumps, and landscaping. These could range from $20,000 to $40,000 annually. The gas station will be accepting a lot of credit card transactions. These fees may end up being roughly equivalent to maintenance costs, $20,000 to $40,000 a year. There is a high likelihood that the gas station will have to eat any customer chargebacks on credit cards. One of the worst things that could happen is an underground tank leak which could take several weeks to replace. During that time, the gas station can’t sell gas, meaning few people will come into the store to purchase drinks and snacks. An underground tank leak can contaminate ground water leading to lawsuits from neighboring residential communities. Insurance could decide not to cover a tank leak incident, arguing the leak had begun before the insurance was taken out. Furthermore, in the 1990s, there was a big push for gas stations to replace and update their underground storage tanks to a new standard. It is now 2023, so we are coming up to the end of the design service life on those tanks. I suspect we may see a lot more gas stations being put up for sales given this, especially if the businesses are losing money as it is. Safety and security concerns: Gas stations can be the targets of theft, vandalism, and robbery. A lot of crime occurs at gas stations. Thieves and criminals will usually test stolen credit cards to see if they are viable, on gas pumps. The criminality is not limited to the customer either. Employee theft is a very real threat that needs to be constantly monitored for. Staffing: It is very difficult to maintain staff. Staff will have to be trained on the point-of-sale system. A lot of people that are willing to work at a gas station are not very computer savvy. It could take several weeks to get someone fully trained on a cash register. Staff may quit during or shortly after cash register training. Additionally, the job is very demanding, especially working at night. Staff can develop drug or alcohol problems from the stress and working hours. Even if you are able to reliably staff the gas station, as the owner, you may get called down to the station in the middle of the night because there someone tried to rob the clerk, or a violent crime occurred out at the pumps. Gas: The jobber is the middleman between the gas station and the company that refines the petroleum products. Almost every cent brought in by the gas revenue is going to go back out to the jobber or middleman. Getting a loan will be difficult Buying a used gas station is highly risky for numerous reasons. Due to the risk level of purchasing an existing gas station, a potential buyer may find it difficult to get financing or a loan from any bank. If you are in an urban or suburban area, it will be very difficult to find an available location to build on, so your only option will be to purchase an existing gas station. To take over an existing gas station will likely require you to have the cash to pay for it. If you can get the bank to give you a loan, the bank is going to ask for a “phase 1” or “phase 2” environmental investigation depending on the age and history of the gas station. The gas station needs to pass to get financing. The older the gas station is, the harder it will be for it to pass environmental studies that may be required before financing. No lender is going to give you a loan for a gas station without being as sure as possible there won’t be liability issues in the future in regard to contamination. If someone is considering purchasing an existing gas station, they need to ask themselves why the current owner is selling the business. Perhaps the underground tanks are constantly needing to be replaced or there is another maintenance issue that continuously needs to be addressed. Perhaps the only sensible way to enter the gas station business is building a gas station, rather than taking over an existing business or location. As we look towards the future, I believe EV sales will continue to accelerate. While I do not think EV adoption will happen as quickly as most analysts, I do believe it posses a threat to the gas station industry, especially ones that are marginally profitable. 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The Economics of Bananas Have you ever wondered why bananas are so cheap? Well, the answer might surprise you. Bananas are a carbohydrate and nutritionally dense which makes it an ideal staple food in much of the world. There is a lot of demand for bananas for these reasons. The banana plant is an herbaceous perennial plant meaning it does not form a woody growth and they live multiple years and can even regrow from subsoil. High Yield: A single banana plant can produce a large number of fruits. Banana plants grow relatively fast and yield a lot of fruit per acre. Efficient Cultivation & Economies of Scale: The banana plant is also quite hardy and does not require a lot of maintenance compared to other crops. A banana plantation is also relatively easy to maintain and operate despite requiring some manual labor. However, labor is quite cheap in the areas where bananas are grown. Banana plantations are very large and leverage economies of scale whereby size also allows the bananas to be produced more cheaply. There are also well-established global distribution networks that allow the fruit to be efficiently transported from plantations in the tropics to consumer markets. Large corporations have set a goal of making bananas the cheapest fruit on the market. Costs are minimized in every part of the supply chain. The banana species that are chosen to be grown are the ones that grow the fastest and do the best being transported long distance. Climate and Geography: Bananas are grown in tropical regions. These geographies often have low labor costs and the conditions to grow bananas year-round. High Demand & Short Shelf Life: Bananas are popular across the world which means there is a ton of demand for the fruit. Given the size of the demand, large scale production on plantations can occur to create supply. When you leverage scale, your operation becomes more efficient. Bananas are picked before they are ripe. At this stage, the banana is pretty hard, and therefore easier to transport without going bad or bruising. At the point of being picked, the banana will begun to ripen. Ripening can be hastened using ethylene gas during either transportation or at the destination. Conclusion: Bananas are really a marvel of international logistics and economies of scale. It is only through efficient agriculture can we hope to continue to produce enough calories to feed the world affordably. Bananas are an excellent case study to consider how products can be brought to international markets quickly, cheaply and efficiently. Tags: banana industry, banana, bananas, banana farming, banana farm, banana harvesting, dark side of banana industry, australian banana industry, banana industry documentary, banana production, cavendish banana farming, the dark side of the banana industry, the truth about the banana industry, panama disease of banana, banana waste, cavendish banana tree, banana waste products, cavendish banana, banana processing, how to banana harvesting, banana philippines, growing bananas, banana, banana plantation, banana farming, banana plant, banana farm, banana tree, how to grow banana, banana planting, how to grow banana tree, growing bananas, how to plant a banana tree, how to grow banana plants, banana growing tips, banana plant care, growing banana plants, how to grow bananas, banana cultivation, banana harvesting, growing banana trees, bananas, banana farming techniques, largest banana plantation, how to grow banana trees, banana trees

Universities are on a reckless spending spree and students are footing the bill Public universities in the United States are on an out-of-control and tone-deaf spending spree and students are footing the bill. There is a culture of unrelenting growth and prioritizing raising revenue from tuition and fees rather than being financially prudent with costs. Spending includes new academic buildings, dorms, sports programs, and layers of administrative staff, in part to lure wealthy students. Students are being forced to take on more and more debt while universities and college show little or no regard for how much money they are spending. I will argue that students do not have resources to continue to fund the overly extravagant, and excessively expensive projects of universities. Tuition and fee revenue per student has soared by double digits in the past 20 years at almost every flagship university in the country. The Wall Street Journal reports that median spending at flagship universities rose 38% between 2002 and 2022. Revenue was more than double from undergraduate and graduate tuition and fees than the two decades prior. Despite enrollment gains, this amounts to a 64% increase for the average student which far outpaces just about any other expense an American family faces. The United States faces a $1.6 trillion federal student debt crisis. University of Kentucky spent an average of $805,000 per day for more than a decade. Despite the students here being some of the poorest in the country, they still had to come up with $18,693 to attend the 2021-2022 school year. The University of Kentucky took in 70% more in tuition and fee revenue per student than it did two decades ago Students at the University of Oklahoma faced some of the biggest tuition increases in the country while the school spend millions on acquiring and renovating a 32,000 square foot Italian monastery for a study abroad program. Beginning in 2009, the university spent $14.3 million to purchase and renovate a monastery in Italy to house a new study-abroad program. The monastery features a landscaped garden, faculty apartments, and classrooms that have painted frescoes. The university claimed it was paid for by private gifts and university funds. Public universities are quick to shift blame to reduced state funding. While three-fourths of states did cut their funding, universities did not reduce their spending as a result. Instead, they raised tuition far beyond what was needed to fill the gap. For every $1 lost in state funding, universities increased tuition and fees by $2.40. Many university officials fail to understand their complex budgets and resort to just increasing spending every year to compensate. The universities are not held accountable by trustees who rubber stamp anything that lands on their desks. Public university trustees approved 98% of cost increasing proposals they reviewed. It is basically an automatic approval of whatever the university administration want. Salaries and benefits usually account for more than half of a university operating budget. These rose by roughly 40% since 2002. Between 2017 and 2022, the number of employees that were directors or associate directors doubled. Inflation adjusted spending on athletic coaches rose by 50% between 2010 and 2022. Lack of Accountability: Schools inconsistently disclose spending making it nearly impossible for anyone, especially the public, to review how tuition and tax dollars are being spent. Colleges are not required to track expenses in a uniform way in part because universities view audits as a requirement rather than a tool for public accountability. The Education Department often find that college finances contain errors and do not match audits. Schools are free to categorize spending however they wish on audited financial statements making it impossible to compare even a single school over time, much less different schools. Universities wanted to attract students with top test scores and minimal need for financial aid so they built state-of-the-art recreation centers and dorms. All the other students were responsible for paying for these amenities. Schools pass on the tab of their aggressive expansions even in the nation’s poorest states. Even with increased financial aid for low-income students, this still does not fully offset rising tuitions for these families. Public universities were intended to be affordable for American families. Works Cited: https://www.wsj.com/articles/state-university-tuition-increase-spending-41a58100?mod=hp_lead_pos7 Tags: college tuition, college, tuition, free college tuition, free tuition, paying for college tuition, college debt, college tuition negotiation, college tuition cost, college tuition price, college tuition costs, average college tuition, tuition free colleges, college tuition price history, paying for college, free college tuition california, free college, college costs, community college, cost of college, college degree, college, cost of college, college cost, college costs, how much does college cost, college tuition, opportunity cost of going to college, average cost of college, price of college, going to college, cost to go to college, should i go to college, getting accepted to college, college cost breakdown, why should i go to college, cost of college in 2021, estimating cost of college, tuition, university, college tuition, free tuition, university tuition, free tuition fee universities, free university, tuition fee, tuition fees, no tuition universities, tuition free universities, free tuition universities

What is a hardship withdrawal? In an emergency, you can withdraw funds from a retirement account without penalty. The IRS defines such an emergency as “an immediate and heavy financial need.” In this situation, the IRS may waive the 10% penalty for early withdrawals. This should be a last resort as you will not be able to return the funds to the account if and when your finances improve. Retirement accounts are tax advantaged and you really should be trying to max out your contributions each year to take full advantage of the tax advantages these accounts offer. 401(k)s The IRS, and most employers who offers 401(k)s, are going to impose strict criteria for hardship withdrawals. The rules are going to differ by type of retirement fund. 401(k)s are not required to provide for hardship distributions. Your employers sponsors your 401(k) and they are going to ask for certain information and documentation of your hardship. You can’t withdraw from your 401(k) without penalty to pay for medical insurance premiums, educational expenses, or to buy your first home. IRAs In contrast to 401(k)s, with an IRA, withdrawals are penalty free to pay for medical insurance premiums, education expenses, or to buy a first home. There are conditions that apply, so you will have to do additional research. Foreclosure and Eviction: You will be likely asked to provide a foreclosure letter from the bank that holds your mortgage. If you are renting, they will likely need an eviction letter from your landlord. This notice is needed to avoid violating the retirement plan terms and IRS rules. IRS rules are strict and companies must comply and operate in accordance with IRS rules, as well as have documentation for auditing purposes. The requested withdrawal, composed of the hardship distribution as well as estimated taxes and penalty amounts, will be reduced by 10% for federal income tax withholding. If this is a traditional 401(k), you will owe income taxes on the early withdrawal. Being late on one mortgage payment does not usually meet the criteria of “immediate and heavy financial need” to qualify for a hardship withdrawal. You may want to investigate if your retirement account allows loans. Conclusion: In conclusion, your retirement accounts are critical for you being able to have a secure and stable retirement. You should seek hardship withdrawals as a last resort only after exhausting all other options. Tags: 401k withdrawal, hardship withdrawal 401k, 401k hardship withdrawal, hardship withdrawal, hardship withdrawals, walmart 401k hardship withdrawal, walmart 401k hardship withdrawal rules, 401k early withdrawal exceptions, 401k withdrawal penalty, tsp hardship withdrawal, 401k withdrawal tax, hardship withdrawal from ira, hardship withdrawal from 401k, financial hardship withdrawal, what is 401k hardship withdrawal, all about 401k hardship withdrawal, 401k withdrawal strategy

There is going to be a factory worker shortage in China, Vietnam, and India Alarm bells should be ringing at Western companies that rely on inexpensive Asian labor to churn out affordable consumer goods. Asian countries are rapidly aging. In 2001, Nike reported 80% of factory workers were in Asia with a typical age of 22, single, and raised on a farm. Today, the average worker for Nike in China is 40, and in Vietnam is 31. There was a time when it was easy to attract labor in Asia. The globalized manufacturing model has delivered a vast array of inexpensively produced goods to consumers across the world. We have become accustomed to cheap goods like flatscreens that are manufactured in factories in China and Vietnam. Looking at the Walmart website, I can purchase a 32-inch television for $100 or a 55 inch television for $250. Previously, I did a video that address the question “why is it so expensive to repair consumer appliances.” The answer is that it is not that it is expensive to repair appliances so much as it is extremely cheap to purchase a new appliance. When your fridge or dishwasher breaks, I would reckon that you ultimately decide to just replace the appliance with a new one, rather than paying a repair person. The garment industry is seeing young workers routinely drop out of training programs. Those that stay will only work in garment factories for a couple of years. Factories in Asia are being forced to increase wages and adopt costly worker retention strategies. Factories are improving the quality of their cafeterias and are building childcare facilities. Some factories subsidize kindergarten or fund technical-training programs. Other factories are relocating to rural areas were people are more willing to do manual labor, but this puts these factories farther away from ports and suppliers, while also forcing them to accommodate rural life including worker absences during harvest. Increased labor costs are becoming the rule, rather than the exception, across companies that rely on manufacturing in Asia. In June, Nike reported higher product costs due to labor. Hasbro reported this year that labor shortages in Vietnam and China increased its costs to produce its toys and games. Mattel, the maker of Barbie, is also facing higher labor costs for manufacturing. Both Hasbro and Mattel passed on these higher manufacturing labor costs to consumers in the form of price increases. The trend of increased labor costs being passed onto consumers is a trend that will accelerate in the future because workers in Asia do not want to work in a factory like their parents. Beginning in the 1990s, Asian manufacturing hubs, most notably China, began to integrate into the global economy. What were previously poor, rural, agricultural societies became the manufacturing center of the world. The price of everything from appliances to furniture drastically fell. Not only are young people disinterested in factory work, but they are having fewer children than their parents did, and at later ages. These factors mean there is less pressure to earn a steady income in their twenties. The service sector offers less-backbreaking work as a store clerk in a mall and as a receptionist at a hotel. Urban youth unemployment in China was 21% in June despite factory labor shortages. Many young people in manufacturing nations are well educated. They believe their lives should not be lived inside the confines of factory walls. One furniture manufacturing business owner who was interviewed by the Wall Street Journal make furniture for retailers like Lowe’s. The business is call Acacia Woodcraft Vietnam. While the business is partially automated, human craftsmanship is still needed for many tasks. She moved her factory out of southern China four years ago and considered Ho Chi Minh City. She reconsidered this after hearing horror stories about worker turnover and soaring wages. She instead set up a factory in rural northern Vietnam. The typical worker here is in there 40s or 50s. Some can’t read very well so she has to explain things verbally and visually demonstrate tasks as well. However, what we gained in rural northern Vietnam is a stable workforce, something hard to find in southern China or even Ho Chi Minh City. Younger employees that can read well are treasured. The factory owner involves them in decision making and to meet American buyers. Factory wages in Vietnam have more than doubled since 2011 to $320 a month which is three times the rate of increases in the United States. Factory wages in China has risen 122% from 2012 to 2021. In the past, when local wages rose too much, manufacturers would typically relocated to a place with more affordable wages. While there are countries in Africa and South Asia with large labor pools, these locations lack political stability, good infrastructure, or trained workforces. Clothing brands that expanded into Myanmar and Ethiopia were disrupted by unrest and civil war. While Bangladesh has been a reliable country to produce clothing in, the country has restrictive trade policies and clogged ports. While India does have a huge population, issues with retaining young workers that plague China are becoming endemic in India as well. Young people in India prefer either a rural farm life supported by state welfare programs or gig work versus living in factory dormitories in industrial hubs in the cities. India is known for its IT staff, and the IT industry is another draw of workers away from factories. One Nike supplier has struggled so much to attract young workers that it ended a training program for high school graduates because so few of them were accepting the job afterward. Now, 90% of this Nike supplier’s workforce is 30 or older. One CEO said that once young Asian people see reality television, they have a desire to work in retail rather than a factory. She is planning to move production to North Carolina and automate it. Perhaps this is a trend we will see: a factory worker in shortage in Asia resulting in companies moving factories to the United States and automating production. Aging populations in Asian countries also mean more young people are taking care of their elders, instead of working in manufacturing. Works Cited: https://www.wsj.com/articles/asia-factories-consumer-goods-labor-prices-7140ab98?mod=hp_lead_pos7 Tags: china, manufacturing, china manufacturing industry, manufacturing in china, glass manufacturing in china, manufacturing a product in china, made in china, china economy, china manufacturing, chinese manufacturing, china's manufacturing, china manufacturing collapse, china factory, india manufacturing, apple manufacturing in india, vietnam manufacturing, manufacture a product in china, china manufacturing small products, factories in china, factory in china, manufacturing in vietnam, vietnam manufacturing, made in vietnam, manufacturing in vietnam vs china, vietnam, manufacturing vietnam, vietnam manufacturing industry, sourcing in vietnam, sourcing agent in vietnam, vietnam economy, vietnam economic growth, factory in vietnam, pros and cons of manufacturing in vietnam, vietnam sourcing, sourcing from vietnam, why india lags behind vietnam in manufacturing, vietnam investment, how to find suppliers in vietnam

Not all risk is good in the stock market. The more risk you have, the more return you should get to compensate you for that risk. In investing, we use standard deviation to measure risk. It is a measure how much a stock price swings high and low compared to the average price. A low risk stock is more predictable and has less swings. Examples of low risk companies would include utility companies or consumer staples. A high risk stock is less predictable and be more volatile. Technology companies are higher risk stocks because future revenue is not as predictable given innovation and changing technology. Time horizon is the length of time you can part with your money before you need it again. The longer your time horizon, the longer you can stay invested. With a long time horizon, you can potentially wait out a dip in the stock market or an individual stock’s price. The shorter your time horizon, the less risk you can take. I recently did a video about young people putting a substantial amount of their portfolio into riskless or near riskless investments like treasury bills, high yield savings accounts, and CDs. The issue with this choice is that these people have long time horizons, and therefore they should be in more risky investments that offer more return. A risk premium is the return in excess of the risk free rate of return. At this point in time, the risk free rate of return is relatively high compared to the past decade when there was cheap money and low interest rates. There have been a number of article describing the stock market as unattractive given its returns versus the returns of risk free investments. Despite this, I believe young people still need exposure to the stock market. While inflation appears to be cooling off, it is still high and to have money in risk-free investments yielding 4% or 5% is just not going to cut it. When it comes to investing, Nobel price laureate Harry Markowitz said that diversification is the only free lunch in investing. Therefore, make sure you are being compensated for risks that you are taking in your investments. Diversification is an easy win to reduce risk. Not all risks proportionally compensate you. Just because you invest in risky investments does not mean you have the opportunity to earn a correspondingly high return to compensate you for taking on that risk. So make sure you are being smart with your investments and considering the risks you are taking, and that you are being appropriately compensated for those risks. Tags: investing, investing for beginners, stock market investing, dividend investing, real estate investing, investing 101, value investing, investing tips, investing advice, passive investing, investing explained, passive income investing, investing in the stock market, stock investing for beginners, how to get started with investing, etf investing, reit investing, stock market investing for beginners, stocks, stock market, stocks to buy, tech stocks, stocks to buy now, stock market news, best stocks to buy now, stock, growth stocks, stocks to watch, stock market for beginners, best stocks to buy, best growth stocks, stock picks, stock market today, finance stock, tmf stock price, stock analysis, growth stocks 2023, stock moe patreon, best stocks, how to invest in stocks

The Hidden Strength of the French Economy Despite the mayhem that spread across France as a result of hiking the retirement age, and the police shooting of a 17-year-old, the country’s economy is surprisingly strong. Despite French resistance to change, a culture of civil disobedience, and excessive taxes, it is remarkable how strong the French economy is. France is the second largest economy in Europe. The IMF forecasts the economy of France will grow 0.7% this year while Germany and Britian are expected to shrink. Since 2018, cumulative GDP growth in France has been twice that of Germany. It also is ahead of Britian, Italy, and Spain. France has a high speed rail network from the 1980s that is larger than most large European nations. France has a strong nuclear energy industry, composed of 56 reactors, that results in low carbon electricity. Nuclear provides two-thirds of France’s electricity. Six additional reactors are planned. France’s strong nuclear power strategy helps it be less depended on Russian natural gas. This keeps inflation down. While inflation is still high in France, it is less than most of the European Union. France has more companies in the global top 100 by market capitalization than any other European country. French luxury brands were more profitable in 2022 than American technology firms. All three of the world’s top luxury firms are French: LVMH, Hermes, and Dior. The most valuable bank in the Euro zone is French: BNP Paribas. France has grown its share of the global arms export trade by four points to 11% from 2017 and 2022. France registered more patents last year than most big European countries. French patents were twice that of Britian. Some of this success is the result of intervention by the French government. I find French government spending to be worrying. French government debt as a proportion of GDP is among the highest in Europe. Government debt was 112% of GDP at the end of last year. I do agree with President Macron’s effort to liberalize the economy by making it easier to hire and fire workers, as well as reducing taxes. If France wants to continue to attract foreign investment, it needs to be a business friendly country. There was almost twice as much foreign investment in France in 2022 than in 2021, and triple that of 2019. There is no doubt that France has benefited greatly from Britian’s decision to exit the European union. In 2021, France had the highest number of new financial sector projects by foreign investors in a decade. France had more investments into finance from the United States than Britian. In conclusion, despite civil disobedience, France has found a way to keep its strong economy vibrant and growing. This is the result of prudent decision such as keeping the nuclear energy industry alive and adding more capacity. It also is important that France continues to make itself pro business so it can attract foreign investment. Some would say we are in the midst of a manufacturing super cycle. Companies are looking to invest in factories to build electric vehicles, solar panels, batteries, and an array of other green energy products. The more France can make itself attractive to business, the more wealth it will create and the better people’s lives will be. Works Cited: https://www.economist.com/europe/2023/07/27/beneath-frances-revolts-hidden-success https://www.cnn.com/2023/04/30/economy/france-economy-pension-reform-protests/index.html Tags: france, economy, french economy, the economy of france, the economy of france explained, france economy explained, the economics of france, france economy collapse, the economics of france explained, the economy of paris, france 24, how the france economy sets global trends, air france, france24, france economy, french economy explained, french economy under macron, france economics explained, the french economy, economy class, premium economy, france riots

Roof Repair Scams After a storm, there are a host of unsavory characters that will descend upon neighborhoods to prey off unsuspecting victims. I’m going to first give you tell tale signs to watch out for, then I’m going to tell you best practices for getting your roof fixed if you do need work done. Here are the typical tactics scammers use: 1. Door-to-door Solicitation: You should be immediately suspicious of anyone that solicits home repair or insurance adjusting services door-to-door. 2. Unnecessary repairs or exaggerated damage: The contractor will exaggerate the damage in hopes of overbilling you or your insurance company. In some cases, the contractor will create additional damage. 3. Upfront payment: Demanding payment in advance but the contractors disappear, or never starts or completes the work. 4. Lowball quotes / bids. Contractors will bid much lower than other contractors. 5. Unlicensed / uninsured contractors: General contractors are not required to be licensed in some states but some municipalities may require permits. All contractors should have insurance that includes property damage coverage. Their insurance should cover damage to the property of their clients or other third parties in the even that the contractor causes accidental damage. Make sure to check the contractor’s insurance because insurance is necessary to mitigate risk to both you and the contractor. 6. Lack of written contracts: In general, all contracts should be written, not oral. Contracts lay out the scope of work and clearly outline responsibilities and deliverables. A written contract will be invaluable if disagreements occur. Contracts should also include a project timelines, cost and payment terms, and specifications about materials and quality standards. 7. Low quality materials or workmanship: The contractor does the work but does a poor quality job with poor quality materials. Best Practices: Do not sign or pay any contractor up front for a roof repair after a storm. Your first call should be to your insurance agent to make a home insurance claim for roof damage. The insurer will send out an adjuster to inspect the damage. Make sure you never pay in cash. Public adjusters do not work for your insurance company and may charge additional fees. Your insurance company will provide an adjuster to review your claim at no additional cost to you. Contractors have no say over the approval or denial of your insurance claim. You do not need a contractor handling your insurance claim for you. Many contractors want to be present with your adjuster, so if the claim is approved, you will feel obligated to hire them. If you hire them, you are giving away your entire insurance budget without even knowing the actuals costs. If you are replacing your roof, you may want to consider upgrading to a Class 4 Impact resistant roof which could get you about 30% off your insurance premiums. Also worth considering are attic solar fans or ridge venting to reduce the heat build up in the attic. Actual legitimate roof installers are much less costly than large storm restoration companies. Works Cited: https://www.forbes.com/advisor/homeowners-insurance/roof-repair-scams/ https://illinoisattorneygeneral.gov/news/story/attorney-general-raoul-warns-residents-to-be-on-alert-for-storm-related-repair-scams https://www.honestroof.com/homeowners-avoid-roofing-scams/ Tags: roofing scams, roof repair, roof scams, roofing insurance scams, roofer scams, roof repair scam, roofing scams after hail storm, roof damage repair, repair, roofing company scams, home repair, scams, roofing comany scams, florida roofing scams, roofing insurence scams, how to avoid roofing scams, roofing contractor scams, roofing insurance scams in florida, selling roofs, roof scam, repairman, real estate, real estate investing, real estate agent, real estate crash, real estate market, real estate business, real estate investment, real estate bubble, investing in real estate, how to invest in real estate, texas real estate, real estate investing for beginners, houston real estate, commercial real estate, real estate for beginners, how to make money in real estate, real estate ninja, how to do real estate, real estate investor, the real estate ninja

The secret negotiations between hospitals and insurance companies Hospitals are required to make their prices publicly available as of 2021. The Hospital Price Transparency rule went into affect January 1, 2021. It was intended to help Americans know the cost of a hospital item or service before receiving it. However, the price that you will pay, whether you are insured or uninsured will be much different. There is a broad range of prices paid for the same service in the same hospital. The negotiations between insurers and hospitals are often kept secret. Insurers level their scale, the number of members they have, to get better pricing from hospitals. The rates hospitals charge private insurers is in turn passed through to us as consumers through higher premiums and deductibles. Patients are often left with thousands of dollars of deductibles before their insurance kicks in. Total spending for private insurance in the United States has increased ~40% in the last decade. Hospitals typically have a sticker price for services called the chargemaster rate. This is a starting point for negotiations with insurance companies. There isn’t an exact formula for the chargemaster rate. These are typically tweaked to reach a certain level of profitability for the hospital. Some hospitals are looking at costs for procedures. Prestigious or large hospital systems have more leverage in negotiations with insurance companies. They can make sure the insurer doesn’t exclude them from any of their plans. That all its plans must contain that hospital’s facilities. Anti-steering clauses prohibit insurers from directing members to less expensive hospitals. Medicaid and Medicare plans get much lower rates than private insurance. Therefore, hospitals have to rely on the higher rates charged for privately insured patients for their revenue. Hospitals that are able to boost their margins are able to do so only through raising rates. A study from Johns Hopkins shows that the cash prices for hospital care is lower for uninsured patients than for insured patients get even after the insurance company has aggressively negotiated those rates. “Researchers found that the price hospitals negotiate with commercial health insurance companies that get passed along to insured patients frequently exceed the cash price hospitals unilaterally set for uninsured patients.” Works Cited: https://www.wsj.com/video/series/wsj-explains/same-surgery-different-price-why-hospital-bills-vary-so-much/AEB3F724-93E9-4564-BEC5-1B5E6989926C https://publichealth.jhu.edu/2023/study-finds-hospitals-cash-prices-for-uninsured-often-lower-than-insurer-negotiated-prices Tags: hospital bill, hospital bills, hospital, medical bills, hospital bills in usa, $1 million hospital bill, paying hospital bills, outrageous hospital bill, michael flor hospital bill, hospitals, hospital bills in america, million dollar hospital bill, hug coronavirus hospital bill, negotiating hospital bills, paying costly hospital bills, hospital bill india, bill, hospital bill meaning, bill engvall, hospital scam, rabies hospital visit, hospital scam exposed, health insurance, health insurance explained, health insurance policy, insurance, health insurance plan, best health insurance, health insurance in hindi, how to buy health insurance, best health insurance policy, health insurance 101, how to buy health insurance plan, health, health insurance claim, buying health insurance, how health insurance works

Americans are moving to places with extreme heat Americans are moving into areas that are most affected by climate change because of relatively low taxes and affordable housing compared to costal metro areas. 12 of the 15 fastest growing cities in America are in the Sunbelt. Redfin reports that the 50 counties with the highest extreme-heat risk grew an average of 4.7% between 2016 and 2020. Roughly a third of Americans live in areas where the government has issued extreme heat warnings. These cities are mostly in the Sunbelt or south. It is believed that El Nina, a warming ocean pattern that affects the global weather, may have delayed the North American monsoon which drenches Arizona and New Mexico over the summer. Heatwaves kill more Americans than any other weather related disaster. 42% of the 425 people that died from heat in 2022 in Maricopa County, which includes Phoenix, were homeless. More than half of the heat related deaths in the United States involve methamphetamine. Some way to mitigate the affects of extreme heat is to plant more trees. However, these trees consume water which places like the Phoenix area have in short supply. There are also reflective coatings for the pavement, but that increases radiant heat. Works Cited: https://www.economist.com/united-states/2023/07/20/americans-are-moving-to-places-besieged-by-extreme-heat Tags: real estate, real estate investing, real estate agent, real estate investment, investing in real estate, real estate crash, real estate market, real estate investing for beginners, real estate business, commercial real estate, how to invest in real estate, economic ninja real estate, how to make money in real estate, real estate ninja, real estate bubble, the real estate ninja, real estate for beginners, texas real estate, real estate basics, real estate mentor

What are the largest banks in the United States? JP Morgan Chase and Bank of America combined account for 30% of the assets on this visual. JPMorgan Chase is the largest bank in the United States, and the largest bank in the world, with around $3.7 trillion in assets. In 2000, JP Morgan merged with Chase Manhattan. JP Morgan Chase became the largest US bank after its acquisition of failed regional First Republic. JP Morgan has an aggressive approach to acquisitions as it seeks to stay one step ahead of Apple. Apple is moving into financial services with Apple Pay, Apple Card, and an Apple savings account. Bank of America acquired Merrill Lynch during the 2008 financial crisis which significantly expanded its wealth management and investment banking operations. The 2008 financial crisis was very hard on Bank of America. At one point shares were as low as $2.53 in 2008. Citi merged with Travelers Group in 1998 and acquired Banamex in Mexico in 2001. Works Cited: https://www.forbes.com/sites/emilymason/2023/06/08/the-worlds-largest-banks-2023-jpmorgan-chase-takes-top-spot-overall-as-five-banks-crack-top-ten-of-forbes-global-2000/?sh=5c1d801e7d0a https://www.visualcapitalist.com/100-largest-us-banks-2023/ Tags: largest banks in the world, largest banks in the us, biggest banks in the world, top 10 biggest banks in the world, top 10 biggest banks in the world., banks, top banks in the world, largest banks, biggest banks in the usa, banks in the us, safest banks in the us 2023, biggest banks in the world 2021, biggest banks, biggest banks in america, largest us banks, safest banks in the us, largest banks in america, top 10 largest banks, 8 safest banks to bank with in the us

Don’t buy a house in high cost of living areas! In high cost of living areas (HCL) and very high cost of living areas (VHCL) it may make more sense to rent than purchase your home. If you rent in places where it is cheaper to rent than own, there is substantial money saved each money, that money can be plowed into investments. Some of that mortgage payment a home owner is paying is going toward the principle on the house. After 30 years, the homeowner will have the house paid off and that essentially becomes a sort of nest egg. Therefore, if you are renting and not paying a mortgage, you need to be putting extra money aside anyways towards retirement because you are not paying a house off. For it to make sense to rent instead of purchasing a house, you must be saving money from renting. I would suggest this amount of money you save from rent needs to meet or exceed the amount of principle you would be paying off by being a homeowner. However, this is overly simplified and there are other costs to consider in the calculation. Let’s assume a theoretical mortgage with $550 going towards principle, $700 going towards interest, and $700 going towards escrow which is going to over things like insurance and taxes. I would say that if I’m going to rent a place, it needs to be less than $1,400 which is the interest plus the escrow. Then I would put the $550 I’m saving form principle into the stock market. Now this is over simplified and I know I will get downvoted and picked apart in the comments. However, this is just a ballpark to kind of lay out some of the considerations. In a previous video, we explored the price-to-rent ratio which helps determine if it is better to buy or rent. If we look at this ratio, some of the largest cities, and most expensive cities in the United States have high price to rent ratios which would indicate that you want to be a renter, not a home owner. These cities include San Francisco, Oakland, New York City, San Jose, Los Angeles, Seattle, Washing DC, San Diego, and Boston. When you first purchase a house, your leverage is the highest, and thus your potential returns on your investment are the highest. For example, imagine you purchase a $500,000 house with a downpayment of $25,000 downpayment which is equivalent to 5%. Now assume the house increased by 10% in the first year. The house is now worth $550,000. You had a return of $50,000. You had to take out a mortgage and let’s assume the interest rate is 5%, so that is $25,000. So the house appreciated by 10%, about 5% of that is eaten up by your interest payment, you have 5% of that return you are capturing which is $25,000. So your downpayment was $25,000 and your return was $25,000. So that is about a 100% return in the first year. Then you have to consider you are living in that house, which means you aren’t spending money on rent. Also, any money you are putting down as a downpayment or paying on the principle is paying off the price of an asset. That is equity that increases your wealth and is yours to keep assuming the market price of the house is stable. The issue is that a house does not always increase in value year over year. For the majority of US history, housing prices have increased only slightly more than the level of inflation in the economy. The stock market has beter overall returns than the housing market. Only during a period called the Great Moderation between 1990 and 2006 did the returns from real estate rival the stock market. One line of argument is that if you are in your 20s or 30s, you may make more money from a total market ETF or S&P 500 ETF that you would putting the same amount int real estate. So it is complicated whether to own or rent, but the more expensive owning is versus renting, the more sense it makes to just rent and invest whatever money you are saving into the stock market. The decision is ultimately highly personal and depends on you and your family, and their needs and wants. Works Cited: https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp https://www.stessa.com/blog/price-to-rent-ratio/ Tags: rent vs buy, rent vs buy home, renting vs buying a home, renting vs buying, buy vs rent house, rent or buy a house, rent vs own, renting vs owning, rent vs buying, rent or buy, renting vs owning a home, buying vs renting a house, should you buy or rent your own house, buy or rent a house, buy vs rent, renting vs buying a house, buying vs renting a home, should i rent or buy a home, buying vs renting, renting a home vs buying, rent, should i rent or buy, real estate, real estate investing, real estate agent, real estate market, real estate business, real estate crash, texas real estate, real estate bubble, houston real estate, real estate ninja, how to invest in real estate, how to make money in real estate, real estate basics, how to do real estate, real estate coaching, invest in real estate, how to sell real estate, real estate investment, commercial real estate

What is driving Miami population loss? Miami-Dade county lost 79,535 people through net migration to other parts of Florida or other states between 2020 and 2022 according to the Brookings Institution. Miami is a victim of its own success. It is clear that the city and county are changing. It is getting more costly to live in Miami because of all the demand. The rest of Florida added more people between 2021 and 2022 than any other state. While residents flee the county, there is a material influx of overseas migrants which helped to mask the outflow of residents for a while. Foreign immigration partially offset some of the losses and led to a slight population increase last year. However, the net population shrank between 2019 and 2022. This is the first population loss over a multiyear period since at least 1970. Housing Prices House prices in Miami have surged. Miami is one of the country’s least affordable metropolitan areas even before the pandemic. Since the pandemic, prices have been driven even higher. Miami home prices have soared over 50% since June 2020, second only to Tampa. The median asking rent increased 27% since 2019 despite the shrinking population driven by a lack of affordable rental housing. 61% of the rental population of Miami is spending 30% or more of their household income on housing. Miami metro area annual consumer price inflation was 6.9% in June, more than double the national average. An influx of wealthy residents and rising property values are boosting tax revenues. There is a chance that the construction boom could reduce housing costs over time, but I am skeptical. I think new construction could reduce the annual increase in rents and property values, but they will still accelerate at a rate that exceeds most of the nation. Labor Market The Miami labor market is fickle. Some measures show the Miami labor market has not recovered from the pandemic. The Miami hourly wage is below the national average. Unemployment in Miami Dade County is well below the national average. The county is creating new businesses at the fastest pace ever. Miami is littered with construction cranes. Miami office towers have a lower vacancy rate than most US cities. The growth of high paying white collar jobs have raised the cost of living in Miami and the surround area which has resulted in working class and middle class people relocating to more affordable places to live. Professionals leaving Miami are headed to Orlando, Tampa Bay, Atlanta, and Jacksonville. These cities offer more affordable housing, but still over warm weather and low taxes. Miami has not been able to attract factories and big corporate headquarters the way sunbelt boomtowns like Phoenix and Austin has. However, I would argue that Miami is not trying to attract factories. Miami roads are clogged and there is limited public transit. Hours lost to traffic delays in Miami increased 59% between 2021 and 2022. Conclusion America is a dynamic nation, and so are her cities. There are a lot of opportunities to move around the country and to new jobs and cities. There is no constitutional right to live anywhere. It does not matter how long you have lived in a place. It does not matter if you raised your children there decades ago. Growth and dynamic infusion is what keeps cities alive and allows them to develop. Soaring house prices will allow Miami residents to cash out and move somewhere more affordable. Miami is becoming a major business center. It is true that working class people are being displaced. However, many of these people are relocating to the sprawl that is southern Florida. They are not headed to Chicago or New York city. Tags: miami real estate, real estate, luxury real estate, miami real estate market, miami real estate news, miami real estate agent, miami real estate market update, miami real estate investing, south florida real estate, miami real estate 2023, miami real estate forecast, miami real estate market 2023, real estate market, miami, real estate miami, miami real estate tips, miami real estate predictions, florida real estate, real estate investing, real estate 2023

The rush to high yield cash-like investments, and why that is dangerous Cash-like investments are offering their highest rates since 2001. While the official metrics of inflation appear lower than the yields on cash-like investments, I believe the actual rate of inflation that the ordinary American is facing exceeds 5%. These investments will almost certainly trail inflation. Inflation is 3%, core inflation is 4.1%, and CDs are paying 5%. Sure, you are beating inflation as measured by these metrics, but are your actual costs only up 4.1% year over year? I do not think the measures of inflation correctly reflect what the average American is spending their money on. Any money not needed in the next ten years should be in the stock market. Fixed income investments will not grow sufficiently and will lose out to inflation. Cash is only one part of a well diversified portfolio. The younger you are, the more stocks you should be in. The article features a 25 year old insurance analyst who has more than a quarter of his portfolio into treasury bills, money market funds, and a high yield savings account. This young man has three decades of working life to go before retirement. Why is he wasting time and market returns in low risk, low reward cash like instruments? It is really quite ridiculous if you ask me. People in their 20s should not be parking money in treasuries, CDs, and savings account. In contrast, the article features an 84 year old retiree who is half in the stock market and half in T-bills. While this is probably pretty aggressive, I think this is less reckless than the 25 year old. Now that is a controversial statement right there. The young man is adding more time he will have to work before he can retire. The article also mentions a 44 year old strategic communication consultant. She loft thousands of dollars in GameStop shares so now she buys treasury bills. This is absolutely a double whammy mistake. Just because you got burned buying meme stocks, does not mean you go to treasury bills. The lesson she should have learned should have been to buy index funds like the S&P 500. The whole article is absolutely ridiculous. While safe, cash like investments like treasury bills and high yield savings accounts seem great, you are sacrificing the high returns of the stock market. The younger you are, the farther you are setting yourself back financially. The praise and adulation of cash like investments by the Wall Street Journal is not only reckless, but dangerous, especially to younger readers. Works Cited: https://www.wsj.com/articles/everyday-investors-are-thriving-in-a-world-awash-in-yield-2a715361?mod=Searchresults_pos7&page=1 Tags: high yield savings account, best high yield savings accounts, high yield savings accounts, best high yield savings accounts 2023, best high yield savings account, high interest savings account, best savings account, high yield savings account 2023, best savings accounts, savings account, best savings account 2023, high interest savings accounts, high yield savings account explained, best savings accounts 2023, best bank account, high yield savings, savings accounts, treasury bills, treasury bills explained, how to buy treasury bills, t bills, treasury bills investment, treasury bills interest rates, treasury bills 2023, treasury bonds, treasury bills ladder, treasury notes, us treasury bills, treasury bill ladder, treasury bills and bonds, treasury bills fidelity, treasury direct, t-bills, treasury bills calculation, how to buy t bills, t bills explained, buying t bills, how to buy t bills on treasury direct, treasury bills 2022

Home insurers are charging more and insuring less Home insurers are pushing more risk onto homeowners as they insure less and charge more in premiums. This is the consequence of several years of deep losses for insurers. Home insurers are struggling to reach profitability again after losing money for five of the last six years. Insurance claims have been both costly and frequent due to storms, natural disasters, inflation, and supply chain issues. There is an argument that house prices have risen so sharply, that insurance premiums have been lagging for some time, and had to accelerate at some point. While costs have certainly risen, the amount of severe weather is a significant driver of insurance losses. Regulatory curbs on pricing mean that insurers can not adequately cover the cost of doing business and leads them to just exiting markets entirely. Home insurers are now on the offensive as they seek to claw their way back to profitability. There have been double digit rate increases approved in 31 states. Insurers are getting more selective with the policies they write. Insurers are exiting areas that are vulnerable to disaster like California, Florida, and Louisiana. Insurers are reluctant to write policies for older homes or homes that lack wind mitigation. Insurance companies are managing terms and conditions such as deductibles, roof age eligibility, and coverage levels on roof replacement. For example, coverage for older roofs may be limited to their cash value rather than their replacement cost. Coverage has been cut for wind and hail damage by increasing the deductible. Natural disasters and severe weather are increasing losses However, recently, there has been a slowdown in the increase in repair and replacement costs. Total reconstruction costs were up 1.6% this year versus more than 7% in the last three years. However, the second half of this year will determine a lot of what happens to both insurance prices and the insurance industry in general. This summer’s heat wave has warmed the waters of the Gulf Coast which will increase the likelihood of hurricanes, as well as providing fuel for California wildfires. There have been severe storms across the Midwest. Insured damage in the US exceed $90 billion in the past three years. This is higher than the inflation adjusted average of any of the four previous decades such as $54 billion in the 2010s and $40 billion in the 2000s. Catastrophe losses were 92% of home insurance premiums for Progressive in June. Catastrophe losses will likely remain elevated for some time. Growth in vulnerable geographies Population shifts into vulnerable areas are adding to the underlying costs of global warming. While I think the Midwest is a great place to live, it is not as romantic or exciting as living near the water in Florida or the gulf. We do not have the elevation and mountains that are in California. I’ve been especially surprised at how southwestern markets like Phoenix have boomed. These are geographically vulnerable areas that may not be good long term bets. Reinsurance Home insurance companies buy reinsurance coverage to pass on some of their risk. Premiums for reinsurance have risen sharply. Insurers must pass these costs onto consumers to be profitable and justify operating in specific geographies. State regulators control how much of these costs can be passed onto consumers. When state regulators are overly prohibitive in their cost controls of insurers, insurers are more likely to exit the state entirely, which is what we saw in California. Reinsurance premiums are up an average of one-third for June 1 renewals, and 50% for January 1 renewals. If there are more insurance claims in the second half of this year, that will continue to drive up the price of reinsurance, and in turn, the price of our insurance premiums as consumers. There has been a massive run up of real estate values in the past years. You would expect a corresponding increase in insurance prices to offset higher real estate values. What may be occurring is catch-up of the insurance premiums to property values. What I say next will likely anger a lot of my conservative audience, but I have committed to always being truthful with my analysis of the situation in the market and country. While it is true that the prices of everything from construction materials to labor have risen sharply, I do not think we can ignore that the frequency and intensity of storm damage and natural disasters has increased. Arguments about climate change are beyond the scope and focus of this channel. Whether it is due to poor forestry management by California and Canada, wildfires seem to be increasing. Also, the gulf waters are getting warmer which will lead to greater losses in Florida and the gulf coast. To mitigate the effects of what is occurring, I would propose we do not build out vulnerable areas of the country and increase our building standards. We need to build houses with higher elevations so they are more resistant to storm surge and flooding. I have long wondered if FEMA and federally subsidized flood insurance subsidizes and encourages bad behavior. Let’s explore this subject in another video. Be sure to like and subscribe so we can continue our journey together in financial and economic analysis. Works Cited: https://www.wsj.com/articles/home-insurers-are-charging-more-and-insuring-less-9e948113?mod=hp_lead_pos7 Tags: homeowners insurance, home insurance, insurance, homeowners insurance 101, homeowners insurance explained, homeowners insurance policies, homeowners insurance coverage, homeowners, homeowners insurance florida, homeowner insurance, homeowners insurance 2022, homeowners insurance guide, homeowners insurance claims, homeowner's insurance, property insurance, home insurance tips, understanding homeowners insurance coverage, home insurance florida, home insurance coverage

Barnes & Noble wants to be like an indie bookstore Barnes & Noble is trying to be more like independent bookstores. It is trying to curate its offerings to local tastes. Barnes & Noble used a strategy of scale and uniformity from the 1990s and 2000s. Not only were the book offerings nearly identical between stores across the country, but also were the couches. This strategy paid off in the past but times have changed and that has demanded a new strategy that adapts to local tastes. James Daunt is the current CEO of Barnes & Noble. He started Daunt Books, a London indie bookstore, in 1990. It grew to nine shops across England that he still oversees. We became the CEO at Waterstones, a UK chain bookstore that is like Barnes & Noble. He led the unprofitable Waterstones back to profitability. Waterstones was bought in 2018 by activist hedge fund Elliot Management. They kept Daunt in charge. Barnes & Noble had been a publicly traded company since September of 1993 when it was listed on the NYSE after issuing $77 million in stock. It remained public until August 2019 when Elliot Management purchased all the company’s stock for $475 million and took the company private. At the time of the purchase, Barnes & Noble was a poorly managed chain that was still suffering revenue losses despite Borders going bankrupt. The Book Industry For roughly a decade book sales decreased until bottoming out and starting on an upward trend in the year or two. US bookstore sales declined annually from 2008 to 2019, reaching a bottom in 2020. In 2021, book sales started to rebound, continuing into 2022. 2023 is slated to be another annual increase. Someone that needs a specific book will likely just go to Amazon instead of a brick-and-mortar store. It has become all but impossible to compete with Amazon because they do not have to pay overhead for a physical brick-and-mortar store. As any retailer can tell you, they pay a fortune on operating costs like rent, and utility bills like the electricity and heating and air conditioning. Barnes & Noble aims to sell people books they didn’t know they wanted by allowing them to browse. Therefore, books need to be optimized for discovery. One way to achieve this is to face the cover outward instead of the spines. You will also notice all the tables as you enter a Barnes & Noble with curated collections of books. I prefer non-fiction, and I found a shelf with non-fiction on both sides near the entrance of the store in Schaumburg, Illinois. We live in politically tense times, and I was glad to see that there were books from both ends of the political spectrum, even the very far ends of each. This is a smart move because you do not want to alienate or anger your customer. As a retailer, I believe you need to reach as many people as possible. When it comes to more specialized media, like this channel you are watching, I believe it pays to be more focused and that is why you may notice a more conservative, free market approach. There will be 30 net store openings for 2023. Shifting control to the store level Barnes & Nobles aims to make the chain feel like a collections of 596 independent, local bookstores. A chain store is less inviting than an individual bookstore. The strategy is to combine the power of a big chain with the pleasure of an independent bookstore by shifting control of the stores to the store manager. Managers have discretion over purchasing, placement, and even pricing. By giving individual stores more control over what books they stock, this is taking control away from publishers that fear selling less books. Publishers argue that the book business is increasingly driven by national bestsellers rather than local tastes. The Upper West Side Manhattan Location Barnes & Noble spent millions trying to rebuild its Upper West Side Manhattan location into a model for its other stores. Cash registers were moved from the front to the back of the stores. The magazines that took up the best real estate on the ground floor were moved upstairs next to the café. The Upper West Side location was chosen because the building was beautiful and the location on Broadway was ideal. Barnes & Noble needed a strong presence in this part of Manhattan. Return rate measures how many unsold books a retailer returns back to the publisher. The return rate has dropped from 25% to 9% at Barnes & Noble. The CEO is targeting 5%. As many as 20% of store locations sorted history books in alphabetical order, but now that has changed to chronological order. Conclusion In conclusion, I believe Barnes & Noble is undertaking the correct strategy: localizing product offerings to suit the taste of the specific geography the store is in. There is no way to compete with Amazon on price. Therefore, business need to differentiate themselves through experiences. I remember going to Borders bookstore as a child with my mother. I hope that Barnes & Noble will survive for many decades to come and that you can enjoy shopping for books with your children the same way I treasured the time I spent with my mother at the bookstore. Works Cited: https://www.wsj.com/articles/barnes-noble-bookstores-james-daunt-c1afc06b?mod=hp_lead_pos7 Tags: bookstore vlog, bookstore, bookstores, bookstore haul, independent bookstore, bookstore cafe ambience, #bookstore, bookstore cafe, bookstores nyc, local bookstore, woke bookstores, powells bookstore, bookstore ambience, bookstore shopping, london bookstores, tokyo bookstore vlog, best bookstores nyc, working at a bookstore, book shopping at the worlds largest bookstore, bookstore vlog and haul, best bookstores in nyc, cozy day at the bookstore

Why does my mortgage keeping getting sold? The institution that holds your mortgage, probably a pension fund, is different than the company that is servicing your loan. Servicing involves doing the legwork of collecting payments, interacting with the borrower about questions, providing balance updates, and notifying the borrower when their mortgage is sold. When you need to make a payment or talk to someone, you should contact you loan servicer. Most people do not know who actually owns their mortgage. Rest assured, it will not affect your credit when your loan is sold or your mortgage servicer changes. Your mortgage is a financial instrument with a known value because it is a fixed mortgage. The value of your remaining payments can be calculated to the dollar. The company that sells your mortgage onto another company is able to get a lump sum cash payment when they sell your mortgage which can then be invested elsewhere. They have sold the loan because they think they can get a better return elsewhere in the market, or are just trying to reduce their risk exposure. On the other side of the transaction is the company purchasing your mortgage. They will entitled to receive your loan payments at fixed intervals which is a steady stream of revenue for them. You may find that your loan servicer changes frequently. I bet you are wondering why this happens. Interestingly enough, lower rate loans are actually more valuable when valuing mortgage servicing rights. On average, a servicer is going to make about 0.25% regardless of the mortgage rate with the rest of the money being passed onto the investor. When it comes to lower interest rate mortgages, people are much less likely to pay them off early which means a more steady income stream, thereby increasing the value of mortgage servicing. When we talk about the actual mortgages being sold, we are talking about investors, not loan servicers. Mortgages are typically bundled together and sold. These things are not handled individually. This is one of the ways banks can make money. These bundles are almost certainly a mixed bag. There are more desirable mortgages contained in these bundles like ones with high interest rates and good customer credit scores. Then there are lower quality mortgages that involve bankruptcy or loans in default. As your credit changes as you age, this can potentially affect how your mortgage is viewed by the institution that holds it. Eventually, your mortgage should end up being held somewhere where it will be kept for awhile. Before it lands in one place, it could bounce around different loan servicers like Bank of America or Wells Fargo. There is a risk that you could get a bad mortgage servicer, but this is rare and you usually only hear horror stories that are exceptionally rare. You should read all communications from your loan servicer carefully. Make sure the loan servicer pays the taxes from escrow in a timely manner so you are not delinquent on your taxes. Tags: real estate, real estate investing, real estate market, real estate agent, real estate crash, real estate business, how to make money in real estate, real estate investing for beginners, real estate bubble, real estate investment, investing in real estate, how to invest in real estate, real estate 2023, texas real estate, real estate basics, real estate school, how to do real estate, houston real estate, real estate investor, mortgage, mortgage loan servicing, mortgage servicer, mortgage loan, mortgage loan originator, mortgage lender, mortgage loans, mortgage broker, how to become a mortgage loan originator, loan servicing, loan, mortgage loan officer, loan servicer, loan servicers, mortgage loan process, mortgage loan lookup, mortgage loan modification, mortgage loan loss mitigation, mortgage loan originator bond, mortgage underwriter, mortgage lending, home loan

Never pay off the mortgage early! In the short term, it feels great to pay off your house, but you are sacrificing long term wealth. It may take decades to see the benefit of saving and investing money in the market versus the short term psychological gain of having paid off a larger part or the entire mortgage. You often hear people say “My house is paid off. It is such a huge peace of mind.” However, what did you trade to achieve less debt? You have forgone returns on your money that would have most likely been in excess of the debt you paid down. With a 30 year fixed rate mortgage, you pay roughly double the cost of the house over 30 years. At 7%, a dollar invested in the market doubles every 10 years. That is a big difference. Having your money invested in the market leads to it multiplying at a much faster rate than if you were to pay off debt. Consider how interest is calculated differently between a mortgage and your investments. With a mortgage, you are paying simple interest. Once a year, the interest is calculated. With your investments, your money is getting compound interest which is much more complex, varied, and advantageous to you. You are earning returns and interest on previous returns and interest. Albert Einstein said, “The most powerful force in the Universe is compound interest.” He referred to it as one of the greatest “miracles” known to man. Compound interest is interest added to the principal of your investment so that from that moment on, the added interest also earns interest. Peace of mind changes over time. In 30 years, you will have much more peace of mind from a huge retirement account than the peace of mind you can get sooner by having the mortgage paid off. Paying off a home and being debt free is vastly overvalued and overrated if your end goal is a comfortable retirement, which it should be. There are risks that people do not follow through when they say they will pay off the mortgage. Consider people who say that are going to pay down the mortgage, but then turn around and spend that money on other things. Another thing to consider people that pay off the house and then take out a home equity loan to spend on things. Having a lot of money saved and invested properly makes life that much easier. Sure, you may still have a large mortgage payment, but think of all the interest and dividends your money is earning. Your returns should cover any savings from paying off your mortgage earlier. Works Cited: pay off mortgage early, should i pay off my mortgage early, how to pay off your mortgage early, pay off mortgage or invest, pay off your mortgage early, should i pay off my mortgage, invest or pay off mortgage, should i pay off my mortgage early or invest, paying off mortgage early, mortgage payoff, pay off mortgage, pay off your mortgage, paying off mortgage early vs investing, pay off mortgage early or invest, pay off mortgage early or invest?

Arizona to restrict housing construction because of water supply Arizona has determined that there will not be enough groundwater for all the residential construction it previously approved in the Phoenix area. The state is trying to postpone developers from starting construction already approved subdivisions. The state said it would not revoke building permits that have already been issued, rather it is scrambling to try and secure additional water supply. The state is focusing on water conservation measures and alternative water supply sources for the permits that have been previously approved. Alternative supplies could come from Native American reservations, but I do not see that as viable as they are facing their own shortages. Phoenix and surrounding cities have to obtain permission from the state for development every 10 to 15 years. So what I see happening is development requests start getting denied as that 10 to 15 year period expires and they have to get renewed. This is likely the end of the construction boom in Phoenix. There’s a couple ways you could analyze this. If there is adequate water for the existing population, and construction slows down, even if housing demand continues ever so slightly, you are going to have house prices that increasing at a rate higher than the national average. That is to say, elevated demand, with inadequate supply, will result in high housing prices. I get that housing prices are already very high. What I’m thinking is they could go higher in areas where construction slows down for whatever reason but the demand is still there. In the case of Arizona, we are talking about not having enough groundwater for new residential construction. The state could have come at this issue from the angle in increasing water prices significantly, or even limiting water, which would have curtailed housing demand. By restricting housing, prices are going to be driven up. A good conspiracy theory would be that well connected residents are using this crisis to make Arizona a more exclusive place to live and drive up their own home prices. A discussion that has been taking place in California, and has been taking place for more than 100 years, is the fact that agriculture consumes a lot of water. Alfalfa seems an especially wasteful crop in terms of water consumption. I’m not a farmer. I’m not sure how prevalent the practice of flooding fields is in the western part of the country, but this seems wasteful considering the water scarcity issue. I’ve explored desalination and that is extremely expensive and energy intensive. Desalination is not a viable solution unless there are absolutely no other options. It is const prohibitive. Let’s consider the water usage breakdown of Utah. 50% of the water in Utah goes to alfalfa production, and that crop is exported to China. 32% of the water goes towards other agriculture. 8% goes towards industrial and government uses. 10% is residential consumption with about 6% being for outdoor residential use. I encourage you all to take a long term, conservative view toward the future. You need to be thinking about 5, 10, 20, 30 year or longer time horizons. I personally would not be purchasing or investing in areas with water scarcity. Works Cited: https://www.nytimes.com/2023/06/01/climate/arizona-phoenix-permits-housing-water.html https://www.azcentral.com/story/opinion/op-ed/joannaallhands/2022/04/12/arizona-water-future-hinges-how-answer-questions-conservation-growth/9519017002/ Tags: water shortage, arizona water shortage, arizona, water, arizona water crisis, water crisis, arizona water, arizona water supply, arizona water wars, arizona tier 2 water shortage, dire water shortage in arizona, water in arizona, arizona real estate, arizona news, west us water shortage, phoenix water shortage, water shortages 2022, arizona water law, phoenxi arizona water, arizona water cuts, arizona drought, rio verde foothills water shortage, arizona water canal

The Largest Tool Company Failed at Making Tools in America This is the story of how Craftsman tools failed to make ratchet and sockets sets in the United States. Stanley bought Craftsman in 2017 from Sears for $900 million. They quickly began a push to manufacture products in the USA. For many of us, Made in America means something. It is not only a point of pride, but also comes with the expectation of quality. The process of making mechanics’ tools is partially automated but still relies heavily on the manual labor of workers. A factory in Fort Worth, Texas, was intended to manufacture wrenches, ratchets, and sockets. It was thought that automation and advanced manufacturing techniques would allow the products to be at costs similar to China. The choice to build the factory and the cost benefit analysis were based on the estimated efficiency and speed of manufacturing machines from Belarus. Tools are manufactured by slicing a steel coil into bars called billets. These steel bars run along a conveyor belt through a heater until they glow red. A machine rolls the red hot billets into a shape and it is then placed on a press where is it pounded into a tool. The Belarusian company that makes the machines showed in videos how there was hardly any waste metal from the process. It was thought that this degree of automation and advanced machinery would reduce material costs due to waste. The machines had to be adjusted regularly which could sometimes take weeks. The tools the machines produced were misshapen by the press. To resolve the issue, the machines would have to run at half capacity, which would make the factory much less profitable. Millions of dollars were spent trying to make the machines work correctly. In addition to issues with the machines, older workers with vast knowledge of tool making kept retiring. The company president of global tools and storage left when the factory was announced and was succeeded by four other executives. The factory managed to produce sockets, but did not have the ratchets and wrenches to fulfill the customer orders. Customers wanted the entire purchase order, not parts of it. They canceled their orders. Many tools are made manually by workers who use tongs to adjust hot pieces to metal as a press smashes them into shapes. The workers move the tools from one machine to another by hand. Stanley planned to automate that process. It is easy to undervalue the judgement and experience of a worker with decades of experience in what is seemingly a fairly simple task. Some of the tasks workers do are extremely computationally complex. Today, Craftsman mechanics’ tools continue to be made in Asia where there is some automation but a lot of the work is from manual labor. It is critical to keep manufacturing in the United States for several reasons. Works gain experience in machining, and figure out creative solutions to problems. This knowledge and ingenuity can be passed down to younger workers. This knowledge can help push along the development of future machines and equipment. In this way, workers and machine manufacturers can push along development and new technology. This is an intangible assets that is hard to quantify. You want this occurring in factories in the USA. The choice of a Belarusian company suggests to be executives were trying to cut costs and take shortcuts as I would guess there were Germany and Japanese alternatives. Lukashenko has been in power in Belarus for some time and the country’s links to Russia are well known. Works Cited: https://www.wsj.com/articles/craftsman-america-wrench-stanley-black-decker-reshoring-factory-1125792f?mod=Searchresults_pos1&page=1 Tags: craftsman, craftsman tools, tools, new craftsman tools, craftsman tools 2021, craftsman tools 2022, craftsman hand tools, milwaukee vs craftsman tools, top 10 tools, new craftsman v-series tools, top 5 tools, craftsman v-series, craftsman tool box, craftsman rp tools, lowes craftsman tools, craftsman tool haul, craftsman tool chest, craftsman tools at lowes, are craftsman tools good, craftsman power tools, craftsman tools made in usa, craftsman v20

Self-Storage Rents are Decreasing Self-storage facilities were a booming industry during the pandemic and rents soared. Now, that demand seems to be tapering off. Rents are down as much as 28% during the summer of 2021. Self-storage companies are increasingly offering promotions to hook customers. One reason could be that Americans are going back to the office so they are not as desperate to declutter their homes because they are out of the house most of the time. Another possible reason is that people are not buying and selling their homes as much now that rates are about 7%. Therefore, they don’t need a storage locker to store their stuff. While there may be a soft landing, here is certainly a slowing economy and housing market. 2021 and 2022 were the best years for self storage companies as far as rate and occupancy growth. They could charge hefty rents and also get most of their storage units rented out. Summer is the peak season for storage facilities but the current demand is at its lowest level in three years. Rents are 8% lower today than the second quarter of 2022. IF we look at the FTSE Nariet Equity Self Storage index, we can see a 20% fall since 2021. This same index soared 95% between March 2020 and the end of 2021. The national average occupancy rate for self-storage is 92% versus a record of the record of 96% during the pandemic. The abnormally high demand is giving way to more normalized levels. About 10.6% of Americans rented self storage facilities in 2020 verys 2.7% in the 1980s. Looking ahead, construction costs are very high and financing projects is very expensive because interest rates are so high. We likely will not see a ton of supply of self-storage facilities coming onto the market. A lot of us are king of stuck in golden handcuffs where we can’t move because our mortgage rates are 3% or 4%. Check out my other videos about why you should not pay off your mortgage early. If I had to guess, I would say that at some point the rates for self storage are going to stop decreasing. Families are going to get larger and acquire more stuff and people are going to start moving their junk back into self storage but that could take months or years before the demand picks up again. It is kind of a confusing situation in the market in general right now, as well as self storage specifically. I do think rental rates for storage may continue to fall for the short term future. Tags: self storage, self storage investing, self storage business, investing in self storage, self storage income, how to invest in self storage, self storage investment, invest in self storage, aj osborne self storage, buying self storage, self storage management, self storage investing for beginners, self storage investor, self storage cap rates, mark helm self storage, self storage construction, self storage units, self storage conversion, building self storage

Price to Rent Ratio We can compare the price to own a house versus the price to rent a house to get an idea if real estate prices are inflated. In 2008, this ratio would have shown how inflated housing values were relative to rent. It is important to remember that this ratio does not say anything about affordability of either renting or buying. New York City could have a similar ratio to a small midwestern town. This ratio is simply comparing the costs of owning a house versus the cost of renting a house. This is a rough way to determine if its cheaper to rent or own property. We are going to be looking at Trulia’s rent vs. buy index today. Works Cited: https://www.trulia.com/newsroom/press-releasesitem106111/# https://www.investopedia.com/terms/p/price-to-rent-ratio.asp?hid=71fc7dc39a807ffd6a0e854f2e044993bcb9cdb1&did=9776913-20230725&utm_campaign=term-of-the-day_newsletter&utm_source=investopedia&utm_medium=email&utm_content=072523 Tags: rent vs buy, rent vs buy home, buy vs rent house, rent or buy a house, renting vs buying a home, rent or buy, renting vs buying, should i rent or buy a home, buy or rent a house, is it cheaper to rent or buy a house, buying vs renting a house, rent, renting vs owning, buy, renting vs owning a home, rent vs own, buy vs rent, renting a home vs buying, rent vs buy a house, renting vs buying a house, should you buy or rent your own house, should i rent or buy

How Bath & Body works brought manufacturing back to the USA Bath & Body Works found a way to reduce an international manufacturing process that spanned multiple continents and took three months to just 21 days, all done domestically in the state of Ohio. There was a time when it took Bath & Body Works three months to assemble an $8 foaming hand soap. The pieces had to travel 13,000 miles from China, Canada, and Virginia to Ohio. Today, all of the production and assembly happens on a “beauty park” near Columbus, Ohio. There are several factories all on the same campus. 1) A bottle factory 2) A foaming pump and mechanism factory 3) Label factory 4) Bottle filling factory 5) Packaging factory The campus contains ten manufacturers and 5,000 employees. There is a renewed focus on bring manufacturing back home to the United States for reasons that include Covid19, severe weather, trade wars, geopolitical tensions, and supply chain disruptions. There is a factory building boom occurring throughout much of the country. Spending is at its highest level in nearly 20 years. Bath & Body Works strategy of consolidating manufacturing and production domestically in a concentrated area proved potent during the pandemic. The issue with this strategy is how vast the supply chain is for even relatively simple products. Moving factories and people is very costly. I would propose that concentrating production should be at the forefront of planning from the initial stages of bringing new factories online. I also believe that black swan events like severe weather, disease, and economic disasters, are hard, if not impossible to quantify. Cost benefit analysis fails to account for outlier events that can dramatically change the whole equation. I understand how expensive it is to do business in the United States when you factor in environmental and labor regulations. When I was in university, the focus was on just in time production. That model totally fell apart when the pandemic hit. Factories were closed abroad and ships sat off the coast of ports waiting to be unloaded. The companies that had stockpiled inputs like semiconductors were able to continue doing business while other production lines grinded to a halt. Consolidating manufacturers and suppliers is something that has been occurring for decades. My first job out of college was for a Japanese tool maker. There were several other related Japanese companies all located in close proximity to where we were. In the case of Bath and Body works, they convinced key suppliers to move. They faced a lot of resistance. Some supply chains are so vast and complex that you can not concentrate and consolidate production into a tight geographical region like Ohio. I’m thinking of smartphones and consumer appliances like microwaves and fridges. The strategy of consolidating manufacturing is best suited for economies of scale and simpler products like soap. Works Cited: https://www.wsj.com/articles/bath-body-works-us-manufacturing-413cf9d0?mod=hp_lead_pos7 Tags: manufacturing, toyota manufacturing, united states, manufacturing day, u.s. manufacturing, chip manufacturing, career in manufacturing, toyota motor manufacturing indiana, national manufacturing day, manufacturing in mexico vs china, american manufacturing, toyota motor manufacturing kentucky, texas manufacturing, china manufacturing, made in the usa, us manufacturing, manufacturing usa, toyota manufacturing plant, plants in the u.s, manufacturing week