Shaun, the darling of the snowboarding industry, just won his second gold Olympic medal. It was pretty exciting to watch him fly through the air. It is also interesting to look at what he does to be so successful.
Shaun White Wins Gold for the Second Time
How did he do it? Was he born a snowboarder? Or is it the fact that he has his own private halfpipe that costs $500,000?
As the effects of the government stimulus plan are seen, there are more and more signs that the recession is ending. The media is quick to pick up on any changes and report that the economy is recovering. This article at Yahoo Finances is all about the improving housing market. Yet I think that all the positive news is only one side of the story.
The other side is that the fundamentals have not really changed. Unemployment is high, and is rising. There is no evidence that it will improve. All of the improvements in the economy are from government spending: Cash for Clunkers, First Time Home Buyers Plan, etc. These measures are good at getting people who aren’t financially responsible to spend money. It is a short term improvement but will have a longer term negative effect.
Most people are familiar with the dangers of the debt curve. As we borrow more money, the interest costs us more and more. We in turn borrow more, and the vicious cycle continutes. Sound familiar? It’s the foundation of the credit card industry as well as the federal budget.
It’s a vicious cycle because the problem gets worse as time goes on. Instead of solving the problem, we just put it off until tomorrow. The danger is that tomorrow the problem is a little bit bigger. And then it gets pushed off again.
The good news is that the power of exponential growth goes both ways. Our debt can increase exponentially, but so can our wealth. How? Through investing. Instead of paying 5% or 10% or 20% annual interest on our debt, we can get paid 5% or 10% or 20% on our assets.
Impossible?
For some people, investing is all about the Benjamins. They want to make as much money as quickly as possible. They can’t wait to buy that new car, new house or new plane. They believe that there is only one reason to invest: to make money, money, and more money.
Have you ever had a financial goal and achieved it? Maybe it was a new car. Or a promotion at work. It’s great to succeed and achieve, but there is a small challenge. Often when we achieve goals like these, there is a certain let down. Have you ever felt that feeling?
According to the news, everything about this economy is bad. Layoffs, the stock market, and foreclosures dominate the headlines. However, there is one potential bright side of this economic situation: lower prices for assets.
Many people wanted to buy a house over the last few years, only to discover that prices were sky high. Right now, I don’t think it’s a good idea to buy any property, but in a few months its possible that the economy will start to turn around. Maybe it will take a year or more. I don’t know when it will happen, but it’s safe to say that when it does happen, it could be a great opportunity to purchase a house or income property. Prices have come down significantly off their highs, and they will continue to fall. By the time the economy starts to recover property prices could be down 50% percent or more.
This represents a wonderful opportunity for people who want to buy a great house in a great area. Just last year, for many people houses were just too expensive and they could not buy. If housing prices continue to fall for the next months. it could become possible for many people to buy.
Another asset that could be good to buy is stocks. Warren Buffett is making significant purchases right now, as most value investors are. There’s no guarantee that the stock market will not continue to go down, but it’s also possible that in a few years it will reach new highs. A down market like this one is a wonderful opportunity for people who love to buy stocks cheap.
What about cars? Most people cannot buy a car now, because they only buy cars on credit. But what about people who pay cash? Now is the best time to buy a car in perhaps decades. Many dealers are faced with the prospect of bankruptcy, and the same is true for the US automakers. Anyone who has the money to buy a car, or can arrange credit, is in a very powerful bargaining position.
A wise man once said,
It’s not what happens to us that determines our future. It’s what we do with what happens that’s important.
Everybody is facing the same tough economy. The question is whether we can find a way to make it work for us or simply be dragged down with everyone else.
This is the seventh post in a series about how the falling economy can be used to help your financial situation. For more information, you might want to read the previous article in this series. It’s called A Volatile Economy is Great for Traders.
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Pods are taking over!
Well, that might be an overstatement, but small, autonomous personal electric cars are being implemented in a couple places around the world, according to Technology Review.
You can read about it in this article: Personal Rapid Transit Startup.
The PRTs are being installed in Heathrow International Airport and in the United Arab Emirates. Plans say they will transport 50,000 people without any CO2 emissions.
These small electric vehicles seat two to four people. The pods don’t have the disadvantages of regular mass transit, to wit: multiple stops that delay trips and an array of weird people as fellow passengers. By allowing small groups of passengers with specific destinations to share a ride, you eliminate those strikes against public transportation.
(Unless you’re one of the weird people who folks try to avoid and then you’ll probably get the car to yourself, right?)
FREE IDEA!
I have an idea of how these personal cars can be used even more efficiently. If these personal cars could somehow be used with long distance mag-lev train technology, they could even be used for long trips. Trains are held back in the U.S. because of frequent stops that make travel long ordeals. In this case, you could set a destination, roll your vehicle on the mag-lev track, and it would jettison you to your destination.
How do we arrange financing?
The Singularity is Near by Ray Kurzweil is the book that started it all. If you want to know about the future, it is the best book I've found. Absolutely fascinating.
Rich Dad Poor Dad by Robert Kiyosaki. This is one of the most popular personal finance books of all time. A must read for anyone who wants to become financially successful.
The Millionaire's Secrets
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
The One Minute Millionaire is a great book about how to become a millionaire. Written by Mark Victor Hansen and Robert G. Allen, this book combines an inspirational story with practical everyday skills.
The Art of Learning is the fascinating story of Josh Waitzkin, the world champion in both chess and Pushing Hands. His style is mesmerizing, and the strategies for learning are priceless.
The Alchemist is one of the best-selling and most inspirational books of all time. Anyone who has ever had a dream in life needs to read it. Perhaps my favorite book of all time.
Love is the Killer App is a powerful, step-by-step book about how to have a wonderful experience and spread love in any working environment. Think the office has to be a source of bad energy? Think again.
The 4-Hour Workweek is a powerful book full of strategies about how to get more done in less time. For anyone who is looking for leverage or wants to achieve success quickly, this book is absolutely invaluable.
