Money matters. I am putting on my “Swami” hat. I am getting a vision about your financial future. What is “this” I see?
Higher interest rates are on the way. The “Fed” has been keeping loans to banks and financial institutions at 0% (technically .25%). That means banks can get money for nothing and loan to you. That can’t go on forever. Swami says the cost of borrowing money for homes, cars and credit cards will only increase.
Inflation is headed up. The housing debacle is clouding the trend on everything else. Food prices are going up. Oil, up. Corn, up. You get the idea. Swami says you will be spending more dollars to buy less.
Job creation will be limited. Swami (me) managed several companies over the years and a company does not hire new people because the Government creates $1,000 tax incentives for new hires. The real world is pretty simple. A company is supposed to hire a new employee, pay wages and all kinds of benefits at a cost of $50,000 per year (and higher). Then it gets a $1,000 credit because of a government program. As Grasshopper No.5 would say, “big fricking deal”. You hire people because they will do meaningful work and they will help your company grow and prosper. Swami says “don’t expect huge increases in the employment numbers”.
Taxes are going up. All taxes. Property taxes. Sales taxes. State Income Taxes. Federal Income Takes. Swami says that we as a nation we are spending money so fast that the only way we can pay our national debt is with increased taxes. Expect your “take home pay” to continually erode because of taxes.
Swami knows that NFL football doesn’t necessarily affect each of you directly but my crystal ball does have an opinion. The NFL (National Football League) has been predicting a quick and reasonable settlement to union contract proposals that govern the pay of people like Aaron Rogers, Clay Matthews and Charles Woodson. I think March 3 is the deadline for settlement. This is about millionaire football players negotiating with billionaire owners. Swami says that the fight over billions of dollars of revenue will drag out a settlement into the Fall. The NFL starts its official season on 9/11, the same date as the 10th anniversary of the terrorist attack on the twin towers. There will be no settlement by 9/11. A dark cloud will hang over the football world.
Swami predicts that the standard of living of our nation as a whole will steadily decline over decades in the future. As the standard of living of the rest of the world catches up to us, there will be battles over resources like food, oil and limited “good” water. That is not a prediction of doom, just fact.
So now Grasshoppers, with all that financial insight, how do you structure your life to win the game? Swami suggests the following. Continue to educate yourself (you’ll be more valuable). Work Hard. Spend your money wisely.
Love,
Dad