September 22, 2014

Most Dividends Now Come in the Form of Stock Buy Backs

Share Repurchases More Popular Than Cash Dividends

The Economist has a piece called Share Buy-Backs: The Repurchase Revolution.  To help you understand how popular stock repurchase programs have become over the past few decades, and how they have elbowed out traditional dividends as the preferred mechanism to return cash to owners, consider: The companies in the S&P 500 index bought $500 billion of their own shares in 2013, close to the high reached in the bubble year of 2007, and eating up 33 cents of every dollar of cashflow. The greatest … [Read more...]

Roughly 44% of American Households Have Less Than 3 Months’ Savings

Treading Water In the Deep End Short Term Liquidity Households American

The Corporation for Enterprise Development has released its findings on the state of American family's short-term liquidity reserves.  Short-term liquidity, which includes things that can be tapped in an emergency or in the event of job or income loss, is the margin of safety a household builds for itself to get through economic storms, which will inevitably happen.  (Truth be told, a recession should happen sooner rather than later as we're due for one sometime in the next year or two if histo … [Read more...]

Where Do the Top 5% of American Families Live?

Geographic Concentration of High Income Households United States Census Bureau

I just posted about the recent release of a long, in-depth paper by the U.S. Census Bureau on household income in the United States, but there is another report, which spans only a few pages, that is also a lot of fun.  It's called The Geographic Concentration of High-Income Households: 2007-2011. The U.S. Census Bureau looked at where high income households concentrate themselves, examining data from 2007-2011 to break down specific counties that have both a disproportionate share of, and a h … [Read more...]

Income and Poverty in the United States – 2013 Edition

Income and Poverty in the United States 2013 Census Bureau

The United States Census Bureau released a report this month called Income and Poverty in the United States: 2013 [PDF].  It is a treasure trove of data on household income by race, gender, age, quintile, and year (it goes back generations so you can compare over time).  You'll want to download it, save it, and go through the whole thing yourself to better understand how much the typical American family is earning each year before taxes. We talked about gamification in the comments of a post t … [Read more...]

Mental Model: Intergenerational Transmission and What It Has to Do With Adrian Peterson Beating His Child

Charlie Munger Mental Models

A huge percentage of the people in this community are fans of the mental model concept - ideas, like tools, that can be used to analyze, study, and understand both why and how something is happening - made popular by Charles Munger.  From signaling theory to satisficing, the Dunning-Kruger effect to Goldovsky errors, calibration errors to social loafing, veblen goods to the mere exposure effect, mental models can give your family advantages that put you far ahead of the typical household.  The … [Read more...]

Wednesday Wrap-Up – September 17th, 2014

Weekly Wrap-Up

Regional cap rates by real estate type, a case study of a couple retired for 30+ years, why America refrigerates eggs, and shopping for a yacht ... Breakdown of Regional Cap Rates on Real Estate Investments By Property Sub-Type - Are you considering investing in real estate?  CBRE publishes market specific reports on individual real estate areas.  They examine the U.S. as a whole, too, in these reports.  They even publish the CBRE Cap Rate Study, which breaks down cap rates on properties thr … [Read more...]

Mail Bag: Habits of Successful People and Families

Mail Bag Joshua Kennon Pen

This is a great question about habits of successful people and families ... I read your post about energy savings and saw a comment from from someone named Melissa K.  You had responded to a reader from overseas and shifted your language and units to their syntax, talking in square meters and degrees Celsius rather square feet and degrees Fahrenheit.  She said, "You often talk about the knowledge that the affluent pass onto their children and this post is a great example. You pretty ef … [Read more...]

Lewis David Zagor Leaves Behind an $18,000,000 Secret Fortune Amassed from Investing in Stocks and Mutual Funds

Park Avenue Millionaire

It's no secret that most wealth in the United States is so-called stealth wealth.  We now live in a country where roughly 1 in 5 families earns six-figures a year or more, which most people wouldn't believe, and for those who put aside money, something like 80%+ of millionaires hide their net worth from friends and family, who are clueless as to the capital they have amassed, often living in normal houses, driving normal cars, and doing normal jobs.  Interestingly, it is not just the six-figure f … [Read more...]

Watch Teens Try to Turn on a Nintendo and Elders Try the Oculus Rift

Watch People Do Stuff YouTube

Watch these teenagers react to an original Nintendo Entertainment System. Watch these elders try out the Oculus Rift ... Here are kids who are too young to know about it reacting to DuckTales.  Given that so many end up wanting to watch the show itself, I think it's foolish that the cable companies still haven't adapted to a Netflix or iTunes model with on-demand content for everything.  The entire idea of a "channel" is completely outdated.  It's money, sitting there in the open, b … [Read more...]

Mail Bag: Keeping Money Safe Before a Debt Payment

Mail Bag Joshua Kennon Pen

Hmm ... Hi Joshua, I have about $17,500 that I will have to liquidate in the next 6-18 months to repay someone.  No interest or anything til then.  It's currently in a fund that mirrors the S&P 500. My question is: where do you think the money would be best put for the short term? Paul S. I think it is INSANITY to have money in the stock market with a 6-18 month time horizon.  Funds that you absolutely require should NEVER, UNDER ANY CONDITION, BE INVESTED IN STOCKS UNLESS YOU PL … [Read more...]