April 21, 2015

Watch QVC Hosts Debate Whether the Moon is a Planet or Star (and a Lesson on Basic Economics)

QVC The Moon a Planet or Star

If you need something to brighten up your day (or make you feel despondent depending on how you look at it), this is living proof that all you have to do to be successful in life is give people what they want at a price that is higher than the cost it takes you to deliver it to them, with sufficient margins for risk, capital tie-up, and opportunity cost.  You can literally fail 3rd grade science and, if you satisfy a want, make six, seven, or even eight figures a year.  The system we have now fo … [Read more...]

How Much Money Does It Take to Be In the Top 1% By State?

Unequal States Inome By State

We've had fun over the years answering the question, "How much money does it take to be in the top 1%?" and even looked at the breakdown of how the top 1%, as a class, generates its money.  If you enjoyed those posts, hold on to your seat because there is a new report out that details income statistics by state for the purpose of looking at income inequality. While the document itself engages in the sort of dishonesty I talked about in lies, damned lies, and statistics (e.g., looking at the me … [Read more...]

The Power of Compounding, Student Loan Debt, Communism, and Stealth Wealth

JP Morgan Benefits of Saving Early

A friend of mine, a nuclear engineer, once explained that he doesn't bother to contribute to forums or message boards when the topic of nuclear energy is brought up anymore because people are irrational about it, interested in their own confirmation bias rather than learning or having an honest discussion.  Almost everyone I know working in a specialized field ends up in this camp at some point or another for their respective sector.  Whether it's a litigation attorney explaining that McDonald's … [Read more...]

Make Sure You Measure the Right Things in Life

Retail Gasoline Real vs Nominal Inflation Adjustment Prices

With all of the talk of gas prices falling, I'm reminded of the situation a couple of years ago when fuel costs were on an upward trajectory.  Everyone from the little old ladies at church to major economic commentators were lamenting the "record high" energy expenses.  Very few people noticed that, as per the U.S. Energy Information Administration data, the actual cost of gasoline in inflation adjusted terms was still very cheap up until the height of the real estate bubble.  Though the nominal … [Read more...]

The Good and Bad of Social Capital

Social Capital

As I've grown older, I find myself fascinated by the power of social capital; specifically, how it encircles the person who possesses it with a halo that sets them apart from society even when they are far from the only snowflake.  People often mistake fame with competency or ability.  This tendency is part of human nature so it shows up in every field and across every discipline. Take social capital in investing.  While Warren Buffett is constantly called the greatest investor alive by the ma … [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...]

The Federal Reserve Has Released the 2013 Tri-Annual Survey of Consumer Finances

Federal Reserve Survey of Consumer Finances

The Federal Reserve 2013 data detailing changes in household wealth, income, and other statistics is now public and you can go here to download the spreadsheet files and other resources or read the 41-page summary detailing the changes over the past three years since the last survey was released [PDF]. Here is a paraphrased summary of some of the highlights from the report: In the past 3 years, average family income rose by 4% inflation-adjusted but median family income declined 5% in real … [Read more...]

Why Does the Subsidized Hardware Model Bother Me So Much?

Amazon Kindle Fire HDX 7 inch.jpg

It's no secret I read a lot.  In the past seven days alone, I've finished 4 books totaling 1,067 pages, as well as worked on three other books which, between them, probably account for another 500+ pages finished but not in the tally.  (I only know this because, at least a few times a week, it seems like I get a request for a list of my books or what I'm working through at the time.  Back in June, I began building a spreadsheet to track my content consumption, figuring if I could stick with it lo … [Read more...]

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