by Michael Myers on September 29, 2009
Howard Katz describes how and why investing in stocks, real estate, and gold can provide a real yield for retirement. He also provides a historical review of retirement income and economics. Excepts below.
Link: Gold Dip Below $1,000 and NO Retirement, by Howard Katz
The first thing to learn about retirement is that it is a fairly new idea in the scheme of things. Prior to 1785-86, there was no retirement. Everybody worked until they died (unless they were rich, in which case they did not work at all).
Retirement was invented in 1785-86 by Noah Webster, who is best known for being the author of the first American dictionary. Webster, then a young man, took a trip through the 13 newly independent states in 1785-86. He talked to state legislators and other influential people, and he convinced them to legalize interest. (This was only done in the northern states; the South waited until after the Civil War.) The following year the British philosopher, Jeremy Bentham, wrote a paper entitled, “In Defense of Usury [Interest],” and interest was legalized in Britain shortly thereafter. [click to continue…]
by Michael Myers on April 7, 2009
Retirement expert Bob Carlson at RetirementWatch.com says that American’s perceptions of net worth affect spending and saving.
Link: The Wealth Effect, Your Portfolio, and Your Retirement
The net worth of Americans is declining. That is no secret, though the extent of the decline will surprise many. The decline has affected and will continue to affect the economy, stock market, and your portfolio. The Federal Reserve gives a picture of the net worth of Americans every quarter, in a report known as the flow of funds data, and it is worth periodically studying the report.
The report for the third quarter of 2008 (which does not include the steep declines of October and November) was an eye-opener. It also does not include the losses from the Bernie Madoff scam and other frauds that have come to light, though they are a small percentage of the total.
Here is the real eye-opener in the report. In the third quarter Americans were so alarmed by the decline in asset values that they actually reduced their debts. This has not occurred since the data were first reported in 1952. In the third quarter, household borrowing, mortgages, and consumer credit fell at a $117.4 billion annual rate. Granted, that is a drop in the bucket compared to the asset values and amount of debt outstanding. But it does show a significant change in Americans’ behavior and thinking. [click to continue…]