Spend Less, Save More


How does someone with a graduate degree and a job that pays well end up not being able to afford a $400 emergency? What are the repercussions for him and his family? Listen to the video to hear a cautionary tale and watch for a surprise guest.

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Brexit: London Calling

When facing the famous question posed by The Clash -- "Should I stay or should I go?" -- the people in the United Kingdom collectively answered that they wanted to exit the European Union. What appears to have been a mostly political-based decision has threatened significant economic dislocation. Havoc has ensued.

I have listened in on a number of conference calls and read reports from various investment companies. Let me sum up their commentary: It's not good. We don't know how bad. The ultimate impact is unknown and in the long run it may not be horrible. In short, no one has a clue.

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Living in the Past

According to some studies recently cited by the Wall Street Journal, a large percentage of Americans believe that life was better for people like them in the 1960's than it is now. Contrast that with the overwhelming majority of economists who conclude that life in the U.S. today is much better. The economists point to significantly higher wages on an inflation-adjusted basis, superior technology, and health advances that have added 10 years to our life expectancy.

Why do people ignore these major improvements? The article suggests the following explanations for their affinity for the past:

  • Wages and jobs have deteriorated for certain groups, especially for those with limited education.
  • We recently experienced a large recession from which we are slowly recovering.
  • Material standards have improved, but we live in an age of increased uncertainty.
  • Some people focus more on social changes than standard of living improvements.
  • The current presidential campaign has increased anxiety.

We should also consider that maybe people place too much emphasis on the present and idolize the past. We tend to focus on the difficulties we may be experiencing today and discount (forget) those that occurred a long time ago.

My family sat glued to the news on television with Huntley & Brinkley every night at dinner in the '60s. This was not a time of peace, love and understanding as far as I can remember. The Vietnam War and the Civil Rights struggle are but two examples. As for elections, the 1968 Democratic Convention in Chicago was quite a (bloody) scene.

As I noted in my last newsletter, pessimism has its appeal. But every generation has its challenges. A more nuanced look at today and the past may lead to a different perception of both.

Words of Wisdom

The past is always a rebuke to the present. -- Robert Penn Warren

Let's go Living in the Past -- Jethro Tull (1969)

The Attraction of Pessimism


"The sky is falling" seems to have an innate appeal, especially when it comes to investing. Listen to hear why pessimism appears so attractive and optimism naive.

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Is the Middle Class Disappearing?

The claim that the middle class in America has been losing ground provides much of the heated rhetoric in this year's contentious election campaign. But is it true? The answer is not so simple. Without disputing the notion that many Americans are suffering economically -- and without opining on what the causes or solutions may be -- it is worthwhile to consider the matter further.

Last year, a Pew Research Center report found that slightly less than half of American households are "middle-income" as defined in the study. That's down from 61% in 1971. So the middle class appears to be shrinking. But the study shows that this occurred due to more people joining high-earning households (7% growth), whereas the share of low earners grew at a slower rate (4%).

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