National Memory Day #MoneyConscious Mash Up


Yellen at Congress

Today is National Memory Day and a good day to rememory that 2012 was the first time The Federal Open Market Committee (FOMC) moved the goal post for raising interest rates from an abstract date in 2014 to a more definitive target of 6.5 percent unemployment with inflation below 2.5 percent. Now that unemployment is at 6.7 percent and within a Russian Dictator’s reach and inflation remains tame at 1.1 percent as of February, our new Fed Chairperson, Janet Yellen, is moving the goal post for a second time to “a considerable time” after the Fed’s monthly bond-buying program makes its last bond-buy later this year.

For those not in the know, “a considerable time” is, apparently, the equivalent of six months. For those even less in the know, Ms. Yellen is amicable to slow the end of the Fed’s bond-buying program, as needed, making the goal post even more of a moving target. See a challenge, Matt Prater?

Changing the rules is all well and good if we’re playing The Game of Life and not actually living it. The reason for the rule change, however, despite the fact that we’re rapidly approaching the lustrous 6.5 percent target in this jobless recovery is that the lower unemployment rate is not from people going back to work. It’s from people dropping out of the job market faster than CNN is dropping in credibility. The media would do the public a service by spending more time talking about the economy and less time talking about Lost Malaysian plane theories.

Bob the Builder

Home builders were showing their prescience earlier this week when the National Association of Home Builders/Wells Fargo housing market index came in at 47. This showed that homebuilders are pessimistic, even more so than forecasted by the none-too-prescient economists. As the Bob the Builders suggested, later this week it was reported that existing home sales were down 0.4 percent and housing starts were down 0.2 percent in February after both being down in January. None of this is good news, especially considering there is still evidence of bubbles bubbling.

Though the media is putting as much of a positive spin on the unemployment rate as anyone from Comcast/Time Warner has about its merger, the fact is that even though the unemployment rate isn’t what economists expected, initial jobless claims were up 5,000 last week.

We have a long-term unemployment problem of highly skilled workers but, according to Brian Williams, the Ukraine, the missing Malaysian plane and migrating birds are more important stories to cover in the evening news. Did you know birds migrate in the spring, too?! We know it’s all about ad dollars.

Our unemployment problem is hurting teenagers and millennials hardest. Teenagers aren’t learning basic life and work-lessons that many of us took for granted. Millennials are finding it harder to accomplish standard life-goals that fuel and maintain the economy and lay the groundwork for being corporate leaders.

Fred Phelps meets his Maker

While the inflation rate remains tame, remember that food and energy costs aren’t included in the inflation rate because they’re considered too “volatile”. So, while the media is telling us everything is as swell as a gay in the Westboro Baptist Church today, it’s not. Food costs are up 0.4 percent, the highest in two and half years. This hurts families.

Add on top of that the average annual wage increase from 1982 through 2012 being 0.84 percent and 38 percent of employers committing to laying employees off if the minimum wage is increased to $10.10 as President Obama is proposing. It’s no wonder that the average citizen isn’t excited, as indicated by the 1.7 point slip in the Thomson Reuters/University of Michigan index of consumer sentiment, about corporate executives installing misters in their offices, as Clear Channel CEO Bob Pittman did. You gotta wonder if some corporate executives have been like some pastors were to Fred Phelps and said, “Um, please stop talking.”

Enter politicians to the rescue. Not! While we understand the desire to help people who  are unemployed with more unemployment checks and in or nearing retirement by expanding Social Security, it would be more helpful to more people for politicians to focus on pro-growth policies and get the economy working for all and not just themselves.

The good news is that spring has finally arrived and this may answer some month’s old questions about freezer-like temperatures keeping the economy as cold as an introduction of Adele Dazeem. A feeling of warmth came from the blustery Empire State general conditions index, which was reported to increase 5.6 points in March, up 1.1 from February.


Ron Burgundy

As we shared earlier this week, more people are confident about being prepared for retirement because of recent stock and housing market gains. This is displaying a level of foolish confidence Ron Burgundy could only dream of because 60% of workers and 58% of retirees have less than $25,000 in savings and a majority (31%) don’t care.  At this rate, many will need to redream retirement and seek simple financial independence that includes work in retirement rather than just 18-hole par 3s.

Since it’s spring and many of us will do our spring cleaning to rid ourselves of the memory of a long and horrid winter, spring clean your finances and position yourself for better financial success than you’re positioned for today. This includes reselling those clothes you’ve already been seen in and your first iPhone. It’s not doing anyone any good in your nightstand.

If you recently graduated college, rethink where you put most of your money. You’re older self and liver will thank you. For all of us, our wallets will thank us if we follow the trend more popular than taking a selfie and that is cutting-the-cord. Two million people did it in 2013 alone. Don’t be the last one.

Finally, while you’re cleaning your home and finances, clean your car . . . rather, clean your car-finances. After factoring in gas, maintenance, insurance, etc., the average car costs $9,150 annually and the average SUV $11,600 annually. That’s per car. If you have more than one car or a combination of both types, do some math. A car is temporary enjoyment. A retirement plan is long-term security.

It’s a dog-eat-dog world out there. Don’t count on the media, corporate executives and, despite which party you belong to, politicians to look out for you. If you want safety and security now and in your Golden Girl years, the Debt Free Guys are here to help you. Come back every Friday for another #MoneyConscious Mash Up.

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