We'll give this a shot. US Housing starts at 5 year low. Sellers outnumbering buyers 3 to 1. Inflation at 2.4% down from 3% in Jan. FED meeting today.

[bdgan]

Opinion: Passing BBB with its aggressive policies for business growth, putting more money in peoples pockets especially middle class with no tax on tips no tax on overtime, expanded child tax credit, tax benefit for middle class seniors, interest right off for new car purchases, AND lower interest rates could be explosive.

I'm not as optimistic as you for several reasons:

• The BBB doesn't cut taxes for many people. It simply keeps the existing tax rates going. I hate the opponents who claim it adds $3 trillion to the debt but that's comparing it to allowing the existing tax rates to expire. Neither party would do that. Democrats would raise rates on high incomes but they would leave the rest alone.
• No tax on tips doesn't do much because tipped workers are often low income and don't pay taxes anyway.
• No taxes on OT adds $70 billion to the debt and it creates a reporting burden for employers. I fear that it can also be manipulated (more OT and less standard time). That said I agree this would stimulate the economy.
• The expanded child tax credit is minimal ($2500 vs $2000). I personally don't like the idea of paying people to have kids. I'd rather they expand the dependent care credit. Daycare is very expensive ($20k per child) and that's one reason why women aren't having children. Two kids would be $40k which makes work not worth it. I'd prefer to pay people with children to work vs pay them to stay home.
• The tax deduction for auto loan interest is bad policy IMO. Up to $10k per year? Who spends $10k per year on auto loan interest? The deduction phases out for families earning > $200k so it would only apply to people earning less than that amount. It would also only apply to NEW car purchases. In effect the government is encouraging low/mid income people to buy new instead of used. What could go wrong?

 

[NittanyLionRoar]

It still seems to me to be too much frequency in large moves. It's going to be hard to foresee and time each change in cycle. But at least you have a longer track record and the key IMO was starting immediately.

I did well putting a large sum in right after the covid lows and like you had as well. One major move that I did at the low point of covid was putting about $50k into XOM when crude oil prices went negative. I knew that was temporary. I sold that when XOM had about quadrupled and that didn't even account for the double digit dividend from my purchase price. I've made some other very nice individual stock plays but also a few terrible ones. I've settled in on this being a smaller portion of my portfolio. It's too hit or miss for me. I'm not a professional stock picker. I tend to be aggressive, but ETFs comprise the bulk of my stock portfolio.

Like you, I started right out of college. I truly believe that is the key, more time for compounding interest. I was pretty aggressive right out of college too as in about 50% of my income being invested in mostly growth and some value (at the time mutual funds) and some small individual stock picks. Fully utilizing accounts that are tax advantaged is also pretty important in my view.

I started buying properties about 6 years out of college. Bought one, lived in it, then bought another and rented the first out. Rinse, repeat, and I retired at age 43 fairly comfortably. We don't live extravagantly. But through the better part of a decade now in retirement, we've increased our net worth on average by over 10% annually. That glidepath would take us to territory that I consider to be wealthy by the time we hit normal retirement age. I generate a decent positive cash flow on the properties, and some are going to be paid off here very soon which will nice. I've also ratcheted back from my accumulation of income generating assets phase since I retired. The early contributions mattered the most.

These days I'm in a more mature phase where what is currently invested dwarfs what I could be adding to it. So, I really haven't added much since retiring. I haven't touched any of my investments though and I don't know that I will. My wife is likely to start tapping into her 401ks in a few years though because she doesn't want to just let them sit. That's another key, marrying a like-minded investor. She isn't as aggressive as I am, but she does quite well in her approach, and she isn't the type to spend just to spend. Don't get me wrong, we take several vacations each year, I just bought a new vehicle (I run them until well over 200k miles before turning them in), but we never tap into investments, at least not yet. My overly frugal days right out of college are behind me but I still don't particularly like spending. I do like living off the income generating properties and having the freedom to do what I want most of the time. That has really been a blessing in being able to help where and when I am needed. I just don't have a lot of wants.

Well, one thing we have in common is similar spending and investing habits! 😂

I've considered retiring early too. I should be on track to do it in about the same time frame you did. I really enjoy my work, but there's often days I make more in a single day in the market than I do in a month working for a school. On the very best days I've made 6 months worth of school salary in a day haha! It's nice to have a secure job for any downturns though...and any small amount that's added to my investments each month should still compound over time. My wife and I live off our salaries and have about 30% extra each month to invest. So I'm mixed on whether or not to retire early. But hey, if the job ever starts to suck, it's nice to have that option.

 

[Online Persona]

The idea that we'll grow our way out of debt is silly. Politicians promote this approach because it's easier than making the tough decisions about spending.

IMO there are two reasons to cut interest rates. One is to boost the economy by making borrowing costs lower. The other is to minimize interest on our $38 trillion debt.

I expect the economy to weaken. The major reason is lower government spending. A ton of money was dumped into the economy in the name of Covid then we added $4 trillion for American rescue, CHIPS, Green New Deal, etc. All of those things spurred the economy but the sugar high is over and we're left with the debt.

I agree with some of your points but not all.

1) The increase in money supply and rate cuts from covid were 100% necessary, definitely overshot, and had to because the consequences of not bailing out states that were shut down for months was potentially a complete economic collapse. But now we pay for it.

2) Fiscal stimulus right during the shutdowns was also valid as monetary policy has a larger lag than fiscal policy. So you had to hand out some covid money right away. You had to not let small businesses bear the entire shutdown on their own. Now those loans were mismanaged, and the fiscal stimulus should have stopped not long after reopening. But initially it was necessary.

3) Much of the named fiscal stimulus that you mentioned was pure insanity in that we had already recovered and some of those trillions in stimulus had occurred after inflation had been rapidly rising for many months. That was throwing gasoline on an inflation fire. It was pure economic insanity. You will pay for that for the rest of your lives with the 40 year high inflation that ensued that can never be undone. We will always pay 21% more for everything that we ever buy FOR LIFE because of insane 2021-2024 fiscal policy and about to head off a cliff so necessary but overdone 2020 monetary policy.

4) You are 100% correct on cutting rates IMO.

5) We can grow our way out, but we need even more belt tightening on government spending (which does hurt growth). We have to do this right. Government spending = higher short-term growth but kills long-term growth. Government incentives to investment that are in the BBB = short-term retarding of government revenues but long-term increase in government revenues through strong to what could be explosive growth. Government spending method is eating a diet of crap and then wondering why you are 50 lbs overweight a few years later. Incentivizing investment through the tax code is eating a decent diet but also working out like you are training to be #1 in the world. I prefer the latter.

 

[jjw165]

Chris Waller calls for rate cut.

“Fed governor Christopher Waller, a top contender to succeed chair Jay Powell, said that economic data supported lowering rates in the near-term despite the threat of higher inflation from President Donald Trump’s tariffs.”

Top Federal Reserve official calls for rate cuts as soon as July

Governor Chris Waller says US has yet to see an inflation ‘shock’ from Donald Trump’s tariffs

www.ft.com

 

[bdgan]

The increase in money supply and rate cuts from covid were 100% necessary,

90% of people remained employed during covid. Many worked from home saving them the cost of commuting, clothing, & lunches. Those people didn't need stimulus checks, rent abatement, or deferral of their student loan payments. The 10% that weren't working didn't need to get paid more for not working than for working. Covid essentially ended in 2021. Schools didn't need money to reopen safely, especially since they had already reopened. Employers didn't still need ERC credits in late 2023 or 2024. Work requirements for Medicaid were eliminated because of Covid and still haven't been reinstated.

Even money to bail out the states was excessive. I'm confident that blue states would have reopened their economies much sooner if not for the promise of a bailout.

My guess is we spent double what we should have spent.

 

[roswelllion]

I'm not as optimistic as you for several reasons:

• The BBB doesn't cut taxes for many people. It simply keeps the existing tax rates going. I hate the opponents who claim it adds $3 trillion to the debt but that's comparing it to allowing the existing tax rates to expire. Neither party would do that. Democrats would raise rates on high incomes but they would leave the rest alone.
• No tax on tips doesn't do much because tipped workers are often low income and don't pay taxes anyway.
• No taxes on OT adds $70 billion to the debt and it creates a reporting burden for employers. I fear that it can also be manipulated (more OT and less standard time). That said I agree this would stimulate the economy.
• The expanded child tax credit is minimal ($2500 vs $2000). I personally don't like the idea of paying people to have kids. I'd rather they expand the dependent care credit. Daycare is very expensive ($20k per child) and that's one reason why women aren't having children. Two kids would be $40k which makes work not worth it. I'd prefer to pay people with children to work vs pay them to stay home.
• The tax deduction for auto loan interest is bad policy IMO. Up to $10k per year? Who spends $10k per year on auto loan interest? The deduction phases out for families earning > $200k so it would only apply to people earning less than that amount. It would also only apply to NEW car purchases. In effect the government is encouraging low/mid income people to buy new instead of used. What could go wrong?

I agree no tax on tips and OT seem more symbolic than anything but I haven't seen the actual numbers, and IMO will help
with consumer confidence at the lower end of the market and at least psychologically is a confidence shot in the arm. I also agree that making something that has been law for 6 years permanent will not change much.
I disagree with the expanded child credit. While not large it sure isn't paying people to have kids.
I am not real enthusiastic with the new car interest policy but it would have a significant impact. 86% of families earn less than $200,000 so many are already new car purchasers. it could very easily be up to a $2,000 shot in the arm for families and would be a real boon to the auto industry which still employs a lot of folks.
Finally what i think is the real ignition to the economy are the things to boost capital investment by companies. Better tax treatment for US made products, accelerated write offs for investment etc. It has been said if we just got the investment promised really invested it would be a full point to the GDP. All we need to get this train going the right direction is a 3% GDP vs CBO's forecast of 1.8%. That is just a little above the historical norm.
There are $37 trillion reasons not to be too optimistic on the debt situation but I do think we could begin to make small steps and more importantly IMO our only way out. We won't cut enough spending, and IMO any tax increase will slow the economy AND be accompanied by more spending. Edit: the 40 year average of GDP growth in the US is 2.6%. I see no reason why if you combine AI, BBB, $10 trillion investment in US and a rate cut we can't achieve a minimum of 3.0%

 

[Online Persona]

90% of people remained employed during covid. Many worked from home saving them the cost of commuting, clothing, & lunches. Those people didn't need stimulus checks, rent abatement, or deferral of their student loan payments. The 10% that weren't working didn't need to get paid more for not working than for working. Covid essentially ended in 2021. Schools didn't need money to reopen safely, especially since they had already reopened. Employers didn't still need ERC credits in late 2023 or 2024. Work requirements for Medicaid were eliminated because of Covid and still haven't been reinstated.

Even money to bail out the states was excessive. I'm confident that blue states would have reopened their economies much sooner if not for the promise of a bailout.

My guess is we spent double what we should have spent.

Again, from an economic theory perspective, shutting down large portions of states economies for many months threatened the complete collapse of our economy. The largest stimulus to prevent this outcome from the artificially (and IMO purely political) induced shock was monetary stimulus as evidenced by the massive increase in money supply. However, the problem with monetary stimulus is that it has longer latency therefore creating a need for immediate stimulus impact which was achieved (and is always more immediately achieved) by fiscal stimulus.

What I contend is that

1) The extended covid shutdowns of significant portions of states' economies necessitated both immediate fiscal and monetary stimulus. They absolutely overshot on this, particularly in monetary stimulus, but that was preferrable to undershooting and potentially collapsing.

2) Continued fiscal stimulus and an extremely dovish FED refusing to raise FFR until inflation had reached 8.5% after almost a year and half of rapidly rising inflation was pure economic insanity. It is the EXACT OPPOSITE of the fiscal and monetary policy that every single economics and finance text would recommend in a rapid inflationary environment. It was the equivalent of throwing gasoline on an inflationary fire. What was crazier still was the fact that trillions of fiscal stimuli continued even after the FED woke up from its nap and started fighting the 40-year high inflation. That was the equivalent of the administration pouring even more gas on the fire as the FED was now actively trying to put out the fire.

 

[roswelllion]

Then Trump should know that and stop complaining like a little brat. I voted for Trump but he whines a lot and that is one reason so many people can't stand him.

He does whine a lot, he calls people names, and he threatens them economically. Good luck hoping he'll change. every once in a while you get a glimpse of Trump. He does those things for effect. Notice how when he is negotiating he is very cordial. The moment things go slightly astray that person is a complete idiot. Yesterday when talking about Powell, he said, I called him stupid, I called him nicely and ask him to dinner and nothing works. Everything he does is transactional. It is horribly annoying but it is what it is. Often times he is right. There is a reason for the term "politically correct". He sure isn't that.

 

[roswelllion]

so, here's a thought...I don't know any more than the next guy....the market is supposedly built on earnings. So far the earnings are good enough to support the prices of shares - although I recognize the PE ratios are high.

I don't believe the FED really knows what's going to happen over the next few years any more than anybody else. They're looking for inflation, Roar sees deflation, Trump admin sees growth and some other economists see stagflation. A couple of things are clear, to me at least; the economy is humming along, inflation coming down, wages going up, employment holding steady. We're starting to see the results of something (if we don't want to credit Trump policies) in falling energy prices, and GDP projections for the most part are higher. Manufacturing seems to be on an upward trend, although it seems up and down.

The deficits are a problem and servicing the debt is now the biggest federal budget item.

The big negative I see is the housing market. Interest rates and high prices are killing it. And, if I recall Econ 101 housing leads you into and out of recessions. Current FED policy seems to have the possibility of leading us in at this point in the cycle. I can see their perspective based on their dual mandate - inflation and unemployment. But, they seem to be wearing blinders when it comes to economic growth and the housing market. But, apparently that's not in their wheelhouse.

There will be another stock market crash. I think we all can count on it: maybe the debt will lead us there, housing, or the FED or some other variable. Most analysts think we're in a bull market. Likely right now we are, and I think that, if implemented, Trump policies will lead us to higher than projected growth. I guess we'll see. But, "stop loss" can be our friend

You know a lot more than "the next guy"

 

[Online Persona]

Well, one thing we have in common is similar spending and investing habits! 😂

I've considered retiring early too. I should be on track to do it in about the same time frame you did. I really enjoy my work, but there's often days I make more in a single day in the market than I do in a month working for a school. On the very best days I've made 6 months worth of school salary in a day haha! It's nice to have a secure job for any downturns though...and any small amount that's added to my investments each month should still compound over time. My wife and I live off our salaries and have about 30% extra each month to invest. So I'm mixed on whether or not to retire early. But hey, if the job ever starts to suck, it's nice to have that option.

Are you in PA or elsewhere? Because an advantage of working for a school is the ever increasingly rare pension. Clearly, the more years and the higher salary of later years yield a better pension payout. So that is certainly a consideration.

Another consideration for early retirement or retirement in general is that many people have no idea what to do with their time, their loss of whatever identity they may have tied to their career or position, and the most important thing is if they have the ability to fund 95% of retirement scenarios if they run a Monte Carlo simulation with all of the variables at reasonable assumptions (such as average inflation at 3% or higher and less aggressive investment returns that match a more conservative portfolio).

So, if you have nothing that you are particularly passionate about, very few hobbies, no plans to volunteer, etc., then perhaps you may still want to work even after you are in a position financially to not have to work. If your self-identity is tied too strongly to what you do for a living, you may not be ready to give that up. And then finally, if there are enough scenarios that would force you to outlive your accumulated wealth in a much longer retirement period such as experiencing a market crash in the early years of retirement or persistent high inflation, then perhaps it is better to hold off and keep socking it away.

 

[junior1]

Are you in PA or elsewhere? Because an advantage of working for a school is the ever increasingly rare pension. Clearly, the more years and the higher salary of later years yield a better pension payout. So that is certainly a consideration.

Another consideration for early retirement or retirement in general is that many people have no idea what to do with their time, their loss of whatever identity they may have tied to their career or position, and the most important thing is if they have the ability to fund 95% of retirement scenarios if they run a Monte Carlo simulation with all of the variables at reasonable assumptions (such as average inflation at 3% or higher and less aggressive investment returns that match a more conservative portfolio).

So, if you have nothing that you are particularly passionate about, very few hobbies, no plans to volunteer, etc., then perhaps you may still want to work even after you are in a position financially to not have to work. If your self-identity is tied too strongly to what you do for a living, you may not be ready to give that up. And then finally, if there are enough scenarios that would force you to outlive your accumulated wealth in a much longer retirement period such as experiencing a market crash in the early years of retirement or persistent high inflation, then perhaps it is better to hold off and keep socking it away.

I'm retired now almost 20 years. Let me share my investing experience. When working, my investments were nearly 100 equities. I wasn't worried about the ups and downs in the market, I had a job, good salary and didn't need or want interest or dividends from investments.

After I retired, my philosophy changed. I currently have pensions, social security and RMD which more than make up for what I spend. But, my investing changed. Now, to be clear, there is very little chance I'll ever run out of money. But, I switched to my current 50-50 portfolio. Instead of 100% growth equities, I'm now 50% into preferred stocks, municipal bonds, dividend paying ETFs, covered call ETFs and other fixed income bonds and structured investments. My goal is to earn at least what is the required RMD from IRAs. And so far, I'm more than tripling what I have to take out. So, I'm a lot more conservative in my approach and I can say with relief, that when the markets go down I really don't worry about it.

And I agree 1000% with persona, when you retire, no matter the age, you have to have a plan for what you intend to do everyday.

 

[NittanyLionRoar]

Are you in PA or elsewhere? Because an advantage of working for a school is the ever increasingly rare pension. Clearly, the more years and the higher salary of later years yield a better pension payout. So that is certainly a consideration.

Another consideration for early retirement or retirement in general is that many people have no idea what to do with their time, their loss of whatever identity they may have tied to their career or position, and the most important thing is if they have the ability to fund 95% of retirement scenarios if they run a Monte Carlo simulation with all of the variables at reasonable assumptions (such as average inflation at 3% or higher and less aggressive investment returns that match a more conservative portfolio).

So, if you have nothing that you are particularly passionate about, very few hobbies, no plans to volunteer, etc., then perhaps you may still want to work even after you are in a position financially to not have to work. If your self-identity is tied too strongly to what you do for a living, you may not be ready to give that up. And then finally, if there are enough scenarios that would force you to outlive your accumulated wealth in a much longer retirement period such as experiencing a market crash in the early years of retirement or persistent high inflation, then perhaps it is better to hold off and keep socking it away.

Yeah, I have a pension attached to my position, so that is a plus. But I’ll have no problem finding something to do with my time if I do retire early. I have a small business on the side and soooo many hobbies.

 

[bdgan]

Well, one thing we have in common is similar spending and investing habits! 😂

I've considered retiring early too. I should be on track to do it in about the same time frame you did. I really enjoy my work, but there's often days I make more in a single day in the market than I do in a month working for a school. On the very best days I've made 6 months worth of school salary in a day haha! It's nice to have a secure job for any downturns though...and any small amount that's added to my investments each month should still compound over time. My wife and I live off our salaries and have about 30% extra each month to invest. So I'm mixed on whether or not to retire early. But hey, if the job ever starts to suck, it's nice to have that option.

I loved my job. The problem was it required 55 hr weeks and travel that got old. I retired very early.

 

[bdgan]

And I agree 1000% with persona, when you retire, no matter the age, you have to have a plan for what you intend to do everyday.

I caught up on a lot of home maintenance projects and did volunteer work. I also played golf 3 days a week during the summer. Now my wife and I travel a lot and go south for the winter.

One of my biggest regrets wrt investing is that I was too tax adverse. I should have deferred less, realized some gains, and paid the taxes but I hate paying taxes. Now I'm dealing with a tax bomb. Interest + dividends + capital gains distributions from mutual funds are as much as my former salary. Now add a small pension, SS, and RMDs which puts me in a high tax bracket. Good problem to have but it still sucks.

 

[Online Persona]

I caught up on a lot of home maintenance projects and did volunteer work. I also played golf 3 days a week during the summer. Now my wife and I travel a lot and go south for the winter.

One of my biggest regrets wrt investing is that I was too tax adverse. I should have deferred less, realized some gains, and paid the taxes but I hate paying taxes. Now I'm dealing with a tax bomb. Interest + dividends + capital gains distributions from mutual funds are as much as my former salary. Now add a small pension, SS, and RMDs which puts me in a high tax bracket. Good problem to have but it still sucks.

Tax planning is a huge piece of the retirement withdrawal equation. Many people are in lower tax brackets after retiring than their later years of working. That requires a different solution than your problem of being in a higher tax bracket. Your situation is where maxing out the Roth IRA contributions every year would be extremely beneficial. Being able to withdraw where all of your basis (taxes already paid) and all of the gains (tax free) are untaxed is huge. You could take some of your intended withdrawal each year from sources that would be taxed and the rest from the ROTH and keep your taxes manageable.

In your case, it sounds like you have a lot that will push you in a higher bracket regardless but anything that reduces taxes helps. But also, maybe this no tax on SS comes to fruition and helps you out some?

It's great that you have productive and entertaining things to do in retirement. It's even better that you have the financial freedom to pursue that, but you've earned it. Congrats!

 

[bdroc]

Tax planning is a huge piece of the retirement withdrawal equation. Many people are in lower tax brackets after retiring than their later years of working. That requires a different solution than your problem of being in a higher tax bracket. Your situation is where maxing out the Roth IRA contributions every year would be extremely beneficial. Being able to withdraw where all of your basis (taxes already paid) and all of the gains (tax free) are untaxed is huge. You could take some of your intended withdrawal each year from sources that would be taxed and the rest from the ROTH and keep your taxes manageable.

In your case, it sounds like you have a lot that will push you in a higher bracket regardless but anything that reduces taxes helps. But also, maybe this no tax on SS comes to fruition and helps you out some?

It's great that you have productive and entertaining things to do in retirement. It's even better that you have the financial freedom to pursue that, but you've earned it. Congrats!

Roth IRAs weren't an option back then. Neither were Roth conversions due to an income limit.

No tax on SS is an additional $4k deduction for seniors and it phases out for incomes over $150k.

 

[roswelllion]

I'm retired now almost 20 years. Let me share my investing experience. When working, my investments were nearly 100 equities. I wasn't worried about the ups and downs in the market, I had a job, good salary and didn't need or want interest or dividends from investments.

After I retired, my philosophy changed. I currently have pensions, social security and RMD which more than make up for what I spend. But, my investing changed. Now, to be clear, there is very little chance I'll ever run out of money. But, I switched to my current 50-50 portfolio. Instead of 100% growth equities, I'm now 50% into preferred stocks, municipal bonds, dividend paying ETFs, covered call ETFs and other fixed income bonds and structured investments. My goal is to earn at least what is the required RMD from IRAs. And so far, I'm more than tripling what I have to take out. So, I'm a lot more conservative in my approach and I can say with relief, that when the markets go down I really don't worry about it.

And I agree 1000% with persona, when you retire, no matter the age, you have to have a plan for what you intend to do everyday.

I signed up with an investment firm when I retired and received a lump sum. This outfit is very conservative which suits me fine. In a nutshell they require an annual spending forecast. They lay in an annual inflation factor for any spending that isn't fixed. Mortgages, car loans etc. They subtract out SS, retirement, RMD from the gross amount required each year. Then they buy a laddered porfolio of bonds that mature each year over 10 years. 100% of the rest is invested in equities. Their belief is there has never been a 10 year period [post depression] when the stock market didn't outperform other investments. They say you have enough in bonds retirement etc to last 10 years. The rest we will invest. For various reasons we have overspent our forecasts but have still done very well thanks to the markets [stock and real estate]

 

[junior1]

I caught up on a lot of home maintenance projects and did volunteer work. I also played golf 3 days a week during the summer. Now my wife and I travel a lot and go south for the winter.

One of my biggest regrets wrt investing is that I was too tax adverse. I should have deferred less, realized some gains, and paid the taxes but I hate paying taxes. Now I'm dealing with a tax bomb. Interest + dividends + capital gains distributions from mutual funds are as much as my former salary. Now add a small pension, SS, and RMDs which puts me in a high tax bracket. Good problem to have but it still sucks.

I know the feeling

 

[junior1]

I signed up with an investment firm when I retired and received a lump sum. This outfit is very conservative which suits me fine. In a nutshell they require an annual spending forecast. They lay in an annual inflation factor for any spending that isn't fixed. Mortgages, car loans etc. They subtract out SS, retirement, RMD from the gross amount required each year. Then they buy a laddered porfolio of bonds that mature each year over 10 years. 100% of the rest is invested in equities. Their belief is there has never been a 10 year period [post depression] when the stock market didn't outperform other investments. They say you have enough in bonds retirement etc to last 10 years. The rest we will invest. For various reasons we have overspent our forecasts but have still done very well thanks to the markets [stock and real estate]M

My wealth manager does something similar. They set aside funds in numerous fixed income media for a 3 year period, bunch of different things, bonds, structured investments, etc, very little cash. The rest is all over the place, equities, ETFs, closed end funds etc. But, as I said, I'm in a 50-50 plan - my choice,

 

[bdgan]

I agree no tax on tips and OT seem more symbolic than anything but I haven't seen the actual numbers, and IMO will help
with consumer confidence at the lower end of the market and at least psychologically is a confidence shot in the arm. I also agree that making something that has been law for 6 years permanent will not change much.
I disagree with the expanded child credit. While not large it sure isn't paying people to have kids.
I am not real enthusiastic with the new car interest policy but it would have a significant impact. 86% of families earn less than $200,000 so many are already new car purchasers. it could very easily be up to a $2,000 shot in the arm for families and would be a real boon to the auto industry which still employs a lot of folks.
Finally what i think is the real ignition to the economy are the things to boost capital investment by companies. Better tax treatment for US made products, accelerated write offs for investment etc. It has been said if we just got the investment promised really invested it would be a full point to the GDP. All we need to get this train going the right direction is a 3% GDP vs CBO's forecast of 1.8%. That is just a little above the historical norm.
There are $37 trillion reasons not to be too optimistic on the debt situation but I do think we could begin to make small steps and more importantly IMO our only way out. We won't cut enough spending, and IMO any tax increase will slow the economy AND be accompanied by more spending. Edit: the 40 year average of GDP growth in the US is 2.6%. I see no reason why if you combine AI, BBB, $10 trillion investment in US and a rate cut we can't achieve a minimum of 3.0%

I read that no tax on tips will cost $10 billion per year and no tax on OT will cost $70 billion per year. Those are pretty big numbers to add to the deficit.

The interest deduction on car loans reminds me of Obama's Cash for Clunkers. The income limit makes it apply to people on the lower end of the income scale but it only applies to new cars. A lot of people on the lower end of the income scale should be pinching pennies and buying used cars. IMO aside from the cost of the program it also provides the wrong incentives.

 

[bdgan]

so, here's a thought...I don't know any more than the next guy....the market is supposedly built on earnings. So far the earnings are good enough to support the prices of shares - although I recognize the PE ratios are high.

I don't believe the FED really knows what's going to happen over the next few years any more than anybody else. They're looking for inflation, Roar sees deflation, Trump admin sees growth and some other economists see stagflation. A couple of things are clear, to me at least; the economy is humming along, inflation coming down, wages going up, employment holding steady. We're starting to see the results of something (if we don't want to credit Trump policies) in falling energy prices, and GDP projections for the most part are higher. Manufacturing seems to be on an upward trend, although it seems up and down.

The deficits are a problem and servicing the debt is now the biggest federal budget item.

The big negative I see is the housing market. Interest rates and high prices are killing it. And, if I recall Econ 101 housing leads you into and out of recessions. Current FED policy seems to have the possibility of leading us in at this point in the cycle. I can see their perspective based on their dual mandate - inflation and unemployment. But, they seem to be wearing blinders when it comes to economic growth and the housing market. But, apparently that's not in their wheelhouse.

There will be another stock market crash. I think we all can count on it: maybe the debt will lead us there, housing, or the FED or some other variable. Most analysts think we're in a bull market. Likely right now we are, and I think that, if implemented, Trump policies will lead us to higher than projected growth. I guess we'll see. But, "stop loss" can be our friend

The market is definitely built on earnings in the long term. In the short term stock prices can be based on emotion (irrational exuberance or irrational pessimism) but ultimately stock prices can't grow a lot faster than earnings. I'm pessimistic about returns over the next few years because of the high current P/E. History is quite clear about this. I wouldn't sell because the market is too difficult to time. I wouldn't be a buyer either.

https://www.lpl.com/research/blog/do-good-times-make-bad-times-pe-ratios-and-forward-returns.html

Housing: I think the government contributed to this mess by keeping interest rates too low for too long. Now there's a shortage because people don't want to sell. I think this will work itself out over time.

Fed rates: I think the fed wants to keep rates high for as long as the economy holds up so that they'll have more to cut when things slow down. It's just what they do.

 

[Online Persona]

The market is definitely built on earnings in the long term. In the short term stock prices can be based on emotion (irrational exuberance or irrational pessimism) but ultimately stock prices can't grow a lot faster than earnings. I'm pessimistic about returns over the next few years because of the high current P/E. History is quite clear about this. I wouldn't sell because the market is too difficult to time. I wouldn't be a buyer either.

https://www.lpl.com/research/blog/do-good-times-make-bad-times-pe-ratios-and-forward-returns.html

Housing: I think the government contributed to this mess by keeping interest rates too low for too long. Now there's a shortage because people don't want to sell. I think this will work itself out over time.

Fed rates: I think the fed wants to keep rates high for as long as the economy holds up so that they'll have more to cut when things slow down. It's just what they do.

Housing has a shortage, and the new builds started and then fell off a cliff when the builders realized that the FED wasn't cutting rates and no one is buying with 7% interest. Sellers outnumber buyers 3 to 1 right now. No one HAS to sell because they are in a 3% mortgage, so prices are mostly holding up.

It's a case of the FED causing gridlock. We can argue that those holding 3% rates are the problem or that the FED gave us those 3% rates, but none of that will change the fact that no one who can do math is trading up from a 3% mortgage to a more expensive house at 7%. It just isn't going to happen and won't until rates hit 5% or so.

The FED may want to keep rates high until THEY CAUSE the economy to slow down. 1) It gets Trump and 2) It gets Trump. Possibly 3 is that they want room to cut when they cause the economy to slow down. But make no mistake, if they keep rates where they are, the housing market gridlock will become even more entrenched and potentially the FED will create a housing crisis similar to the late 2000s. Perhaps that is their goal?

 

[ForesterGump]

Some of us don't have to sell because we don't have a mortgage. When we bought our home, I figured out how much interest I would pay on a 20yr mortgage, and it was 150% of my borrowed money. That was the end of borrowing money. I would hate the idea of going into retirement with monthly payments on a mortgage or a new car. We keep our credit cards paid in full each month. Pay cash for the rest.

I liked my job, but when I retired full time, it was no longer what I had to do. Rather, it was what I wanted to do. Some days, nothing fits the bill.

 

[Online Persona]

Some of us don't have to sell because we don't have a mortgage. When we bought our home, I figured out how much interest I would pay on a 20yr mortgage, and it was 150% of my borrowed money. That was the end of borrowing money. I would hate the idea of going into retirement with monthly payments on a mortgage or a new car. We keep our credit cards paid in full each month. Pay cash for the rest.

I liked my job, but when I retired full time, it was no longer what I had to do. Rather, it was what I wanted to do. Some days, nothing fits the bill.

That is a safe approach. I pay credit cards in full. Not one single time in my life have I paid interest on credit cards.

However, there is an opportunity cost to not having any debt at all. You are my dad financially to a T. He has zero debt and even pays the HOA an entire month early, every month.

I bought my previous vehicle in cash but the one I just bought was financed. I could pay it off, but the interest rate is less than what you can get with CDs right now. So why not make money off of the money that they are lending me?

And I do use mortgages to buy more properties. I get a pretty significant return with each property from 1) positive cash flow from rental income being set above my expenses, 2) the tenants are paying off my mortgage so each month hundreds of dollars in equity is achieved on each property, 3) housing values have increased at 4.26% per year on average since 1967, so over the life of the property it is increasing in value by approximately that much per year, and 4) The rental income despite providing a positive cash flow, generally shows as a net loss at tax time when you account for depreciation.

Without taking out mortgages, I could never have accumulated as many properties which are investment assets that have a great return. This is what enabled me to retire in my early 40s. Had I foregone mortgages, I'd probably be putting 10 or more hours of work daily these days.

 

[PurposePitch]

That is a safe approach. I pay credit cards in full. Not one single time in my life have I paid interest on credit cards.

However, there is an opportunity cost to not having any debt at all. You are my dad financially to a T. He has zero debt and even pays the HOA an entire month early, every month.

I bought my previous vehicle in cash but the one I just bought was financed. I could pay it off, but the interest rate is less than what you can get with CDs right now. So why not make money off of the money that they are lending me?

And I do use mortgages to buy more properties. I get a pretty significant return with each property from 1) positive cash flow from rental income being set above my expenses, 2) the tenants are paying off my mortgage so each month hundreds of dollars in equity is achieved on each property, 3) housing values have increased at 4.26% per year on average since 1967, so over the life of the property it is increasing in value by approximately that much per year, and 4) The rental income despite providing a positive cash flow, generally shows as a net loss at tax time when you account for depreciation.

Without taking out mortgages, I could never have accumulated as many properties which are investment assets that have a great return. This is what enabled me to retire in my early 40s. Had I foregone mortgages, I'd probably be putting 10 or more hours of work daily these days.

Nothing about your fake retirement story even passes the sniff test.

Why do we have so many alleged "real estate investors" on this board who don't know the first thing about real estate, or investing?

You were allegedly a high school teacher ... then the head of a college science department ... nothing, age and experience-wise, makes sense and your alleged real estate empire also makes no sense.

Why continue with the silliness when it's so obviously false?

 

[Online Persona]

Interesting, I saw that Purposebitch put a laugh emoji on my post so I was fairly confident that he had responded spewing nonsense about my advice. I don't typically see his posts since I have that clown on ignore but I thought I'd check this one and yes, he is basically saying he doesn't believe me. That's fine.

Anyway, some more back story. I did grow up in a half a double, parents moved up to a single-family home when I was in middle school. So, I didn't come from money, and I knew I wasn't going to get much help financially for college. But I had a plan.

I made money off of going to college each time that I went. As an undergrad right out of HS, I was in ROTC and had a couple of other scholarships as well such that when ROTC paid my tuition and the scholarship money went into the bursars account, I would get a refund. Plus, there was a small stipend back then, much bigger now. Then I graduated, was commissioned as an officer and started serving. I continued to live very similar to my college days financially which meant that over 50% of my pay was going into investments. After my first assignment, I bought a home every time I was assigned somewhere new except when I was overseas or deployed. Interestingly enough, once when I deployed, I rented out the property that I had been living in while I was gone and continued to receive my basic housing allowance on top of the rent (plus extra pay for being in a combat zone) because I was still assigned to the location of the property. At any rate, over my military career, I had acquired a number of properties. I even began buying additional properties at one of those locations that I knew was a great long-term investment.

Back to my statement on college, the 2nd time, the military sent me for grad school. I was one of very few 6 figure income grad students. This again was fully paid for by the military with the only catch being a follow-on assignment teaching at a military academy where I never claimed that I was the head of any department. I am not surprised that purposebitch lied about that. I have previously disclosed that I eventually became the laboratory program director before I had departed. That is congruent with my affinity for data and analysis. You see that frequently in my posts here such as when I made the case for why the FED should cut now and brought the receipts listing quite a bit of historical data going back 20 years.

And yes, I retired in my early 40s and have a military pension that is tied to inflation. That military pension alone would not be sufficient for us to live off of at our current standard of living. But it did start paying me from age 41 immediately. Good thing that I bought a bunch of investment properties. And yes, I did teach at a private HS starting the Monday after I had retired from the military. I did that for 2 years thinking that I was too young to be retired. I coached and I also ran 2 different after school clubs that were for academic competitions at the state level. But I had taken on too much and decided to actually retire after a couple of years, still in my early 40s. With the military pension plus a number of positive cash flow properties, it is sufficient to maintain our standard of living without ever having to touch our investments.

Oh, and I did complete 4 more years of college courses after I retired from teaching and after I retired from the military because, you guessed it- the military paid me to do it! Yes, I qualified for the post-911 GI Bill and the military has in total paid for over a decade of college courses for me. Plus, while being retired and using my GI bill, I was receiving housing money for that 4-year period on top of the tuition being paid. So, each time that I have gone to college, I have made money off it while enrolled. This final round, the courses happened to be in areas that I just wanted to learn more about. I enjoy learning. I intend to continue researching new areas of study throughout my retirement. Maybe 'm a dork, but I buy textbooks in various subjects and read them.

As for haters like purpose bitch, these decisions can certainly not add up to him. It doesn't have to make sense for those who seek to tear others down. But for me, the decisions and the sacrifices that I made created a viable path from a lower-middle class family to multi-millionaire and retiring in my early 40s. I've taken over a decade of college courses in 3 iterations without paying a cent, no debt, and making money off of going to college each time. I've had the opportunity to serve my Country with some of the best people that you could ever hope to know. And I've been blessed with the freedom to help family, friends, and those causes to which I am moved when and where I believe that I am needed.

Oh, one more thing. I do still squat and deadlift over 400 lbs in my 50s (as in I just did this a few hours ago) as had I stated in previous discussions. I also currently do pullups with 75 lbs attached to me and have some other fairly respectable lifts for my age as well. I suppose that some won't believe that either but it's not so different than building wealth. You start early in life, sacrifice daily and consistently, and increase your gains through the years. Now I'm probably more in the maintenance phase with my physical goals but every so often I do notch some growth.

 

[PurposePitch]

Interesting, I saw that Purposebitch put a laugh emoji on my post so I was fairly confident that he had responded spewing nonsense about my advice. I don't typically see his posts since I have that clown on ignore but I thought I'd check this one and yes, he is basically saying he doesn't believe me. That's fine.

Anyway, some more back story. I did grow up in a half a double, parents moved up to a single-family home when I was in middle school. So, I didn't come from money, and I knew I wasn't going to get much help financially for college. But I had a plan.

I made money off of going to college each time that I went. As an undergrad right out of HS, I was in ROTC and had a couple of other scholarships as well such that when ROTC paid my tuition and the scholarship money went into the bursars account, I would get a refund. Plus, there was a small stipend back then, much bigger now. Then I graduated, was commissioned as an officer and started serving. I continued to live very similar to my college days financially which meant that over 50% of my pay was going into investments. After my first assignment, I bought a home every time I was assigned somewhere new except when I was overseas or deployed. Interestingly enough, once when I deployed, I rented out the property that I had been living in while I was gone and continued to receive my basic housing allowance on top of the rent (plus extra pay for being in a combat zone) because I was still assigned to the location of the property. At any rate, over my military career, I had acquired a number of properties. I even began buying additional properties at one of those locations that I knew was a great long-term investment.

Back to my statement on college, the 2nd time, the military sent me for grad school. I was one of very few 6 figure income grad students. This again was fully paid for by the military with the only catch being a follow-on assignment teaching at a military academy where I never claimed that I was the head of any department. I am not surprised that purposebitch lied about that. I have previously disclosed that I eventually became the laboratory program director before I had departed. That is congruent with my affinity for data and analysis. You see that frequently in my posts here such as when I made the case for why the FED should cut now and brought the receipts listing quite a bit of historical data going back 20 years.

And yes, I retired in my early 40s and have a military pension that is tied to inflation. That military pension alone would not be sufficient for us to live off of at our current standard of living. But it did start paying me from age 41 immediately. Good thing that I bought a bunch of investment properties. And yes, I did teach at a private HS starting the Monday after I had retired from the military. I did that for 2 years thinking that I was too young to be retired. I coached and I also ran 2 different after school clubs that were for academic competitions at the state level. But I had taken on too much and decided to actually retire after a couple of years, still in my early 40s. With the military pension plus a number of positive cash flow properties, it is sufficient to maintain our standard of living without ever having to touch our investments.

Oh, and I did complete 4 more years of college courses after I retired from teaching and after I retired from the military because, you guessed it- the military paid me to do it! Yes, I qualified for the post-911 GI Bill and the military has in total paid for over a decade of college courses for me. Plus, while being retired and using my GI bill, I was receiving housing money for that 4-year period on top of the tuition being paid. So, each time that I have gone to college, I have made money off it while enrolled. This final round, the courses happened to be in areas that I just wanted to learn more about. I enjoy learning. I intend to continue researching new areas of study throughout my retirement. Maybe 'm a dork, but I buy textbooks in various subjects and read them.

As for haters like purpose bitch, these decisions can certainly not add up to him. It doesn't have to make sense for those who seek to tear others down. But for me, the decisions and the sacrifices that I made created a viable path from a lower-middle class family to multi-millionaire and retiring in my early 40s. I've taken over a decade of college courses in 3 iterations without paying a cent, no debt, and making money off of going to college each time. I've had the opportunity to serve my Country with some of the best people that you could ever hope to know. And I've been blessed with the freedom to help family, friends, and those causes to which I am moved when and where I believe that I am needed.

Oh, one more thing. I do still squat and deadlift over 400 lbs in my 50s (as in I just did this a few hours ago) as had I stated in previous discussions. I also currently do pullups with 75 lbs attached to me and have some other fairly respectable lifts for my age as well. I suppose that some won't believe that either but it's not so different than building wealth. You start early in life, sacrifice daily and consistently, and increase your gains through the years. Now I'm probably more in the maintenance phase with my physical goals but every so often I do notch some growth.

You should have just admitted you're a liar, rather than waste more time with your lies.

I skimmed your silly lies ... what happened to your alleged career as the head of a physics department at a college?

Like I said ... you should have left your lies more vague ... they become more obvious the more you try to spin the web.

 

[PaoliLion]

You should have just admitted you're a liar, rather than waste more time with your lies.

I skimmed your silly lies ... what happened to your alleged career as the head of a physics department at a college?

Like I said ... you should have left your lies more vague ... they become more obvious the more you try to spin the web.

He’s an unhireable

What should the FED do? To me, it is unbelievable that they don't cut rates. Right? They have not. It is hurting nearly all Americans right now. Have debt of any kind? It's hurting you. Credit card debt, business loans, a mortgage? It's hurting you.

How do you give up a 3% mortgage rate for almost 7%. Even a modest upgrade in your purchase would result in double your current mortgage payment. As a result, annual rent increases had over doubled from where they were 5 years ago but have started finally coming down this year some this year. I show the annual increases below along with increases in earnings.

Year	Average Rent of Primary Residence	Hourly Earnings & Net Compensation‡
2024	5.49%	3.48%
2023	7.95%	4.60%
2022	6.03%	5.40%
2021	2.25%	4.20%
2020	3.12%	4.90%
2019	3.71%	3.30%
2018	3.62%	3.00%
2017	3.81%	2.70%
2016	3.77%	2.50%
2015	3.57%	2.30%
2014	3.15%	2.10%
2013	2.83%	2.00%
2012	2.65%	2.00%
2011	1.71%	2.10%
2010	0.23%	1.80%

https://www.marketwatch.com/story/housing-starts-plummet-to-a-five-year-low-as-buyers-stay-on-the-sidelines-9c6c3da0?mod=mw_latestnews

Also, here is the inflation rate by month over that period.

​

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ave

​

2010	2.6​	2.1​	2.3​	2.2​	2.0​	1.1​	1.2​	1.1​	1.1​	1.2​	1.1​	1.5​	1.6​
2011	1.6​	2.1​	2.7​	3.2​	3.6​	3.6​	3.6​	3.8​	3.9​	3.5​	3.4​	3.0​	3.2​
2012	2.9​	2.9​	2.7​	2.3​	1.7​	1.7​	1.4​	1.7​	2.0​	2.2​	1.8​	1.7​	2.1​
2013	1.6​	2.0​	1.5​	1.1​	1.4​	1.8​	2.0​	1.5​	1.2​	1.0​	1.2​	1.5​	1.5​
2014	1.6​	1.1​	1.5​	2.0​	2.1​	2.1​	2.0​	1.7​	1.7​	1.7​	1.3​	0.8​	1.6​
2015	-0.1​	0.0​	-0.1​	-0.2​	0.0​	0.1​	0.2​	0.2​	0.0​	0.2​	0.5​	0.7​	0.1​
2016	1.4​	1.0​	0.9​	1.1​	1.0​	1.0​	0.8​	1.1​	1.5​	1.6​	1.7​	2.1​	1.3​
2017	2.5​	2.7​	2.4​	2.2​	1.9​	1.6​	1.7​	1.9​	2.2​	2.0​	2.2​	2.1​	2.1​
2018	2.1​	2.2​	2.4​	2.5​	2.8​	2.9​	2.9​	2.7​	2.3​	2.5​	2.2​	1.9​	2.4​
2019	1.6​	1.5​	1.9​	2.0​	1.8​	1.6​	1.8​	1.7​	1.7​	1.8​	2.1​	2.3​	1.8​
2020	2.5​	2.3​	1.5​	0.3​	0.1​	0.6​	1.0​	1.3​	1.4​	1.2​	1.2​	1.4​	1.2​
2021	1.4​	1.7​	2.6​	4.2​	5.0​	5.4​	5.4​	5.3​	5.4​	6.2​	6.8​	7.0​	4.7​
2022	7.5​	7.9​	8.5​	8.3​	8.6​	9.1​	8.5​	8.3​	8.2​	7.7​	7.1​	6.5​	8.0​
2023	6.4​	6.0​	5.0​	4.9​	4.0​	3.0​	3.2​	3.7​	3.7​	3.2​	3.1​	3.4​	4.1​
2024	3.1​	3.2​	3.5​	3.4​	3.3​	3.0​	2.9​	2.5​	2.4​	2.6​	2.7​	2.9​	2.9​
2025	3.0​	2.8​	2.4​	2.3​	2.4​	Avail. July 15​

And one last piece of relevant data, the Fed's rate increases and decreases over this period.

FOMC Meeting Date	Rate Change (bps)	Federal Funds Rate
Dec 18, 2024	-25	4.25% to 4.50%
Nov 7, 2024	-25	4.50% to 4.75%
Sept 18, 2024	-50	4.75% to 5.00%
July 26, 2023	+25	5.25% to 5.50%
May 3, 2023	+25	5.00% to 5.25%
March 22, 2023	+25	4.75% to 5.00%
Feb 1, 2023	+25	4.50% to 4.75%
Dec 14, 2022	+50	4.25% to 4.50%
Nov 2, 2022	+75	3.75% to 4.00%
Sept 21, 2022	+75	3.00% to 3.25%
July 27, 2022	+75	2.25% to 2.50%
June 16, 2022	+75	1.50% to 1.75%
May 5, 2022	+50	0.75% to 1.00%
March 17, 2022	+25	0.25% to 0.50%

2020 Fed Rate Cuts: Coping with Covid-19​

FOMC Meeting Date	Rate Change (bps)	Federal Funds Rate
March 16, 2020	-100	0% to 0.25%
March 3, 2020	-50	1.0% to 1.25%

2019 Fed Rate Cuts: Mid-Cycle Adjustment​

FOMC Meeting Date	Rate Change (bps)	Federal Funds Rate
October 31, 2019	-25	1.50% to 1.75%
Sept. 19, 2019	-25	1.75% to 2.0%
Aug. 1, 2019	-25	2.0% to 2.25%

Fed Rate Hikes 2015-2018: Returning to Normalcy​

FOMC Meeting Date	Rate Change (bps)	Federal Funds Rate
December 20, 2018	+25	2.25% to 2.50%
Sept. 27, 2018	+25	2.0% to 2.25%
Jun. 14, 2018	+25	1.75% to 2.0%
March 22, 2018	+25	1.50% to 1.75%
Dec. 14, 2017	+25	1.25% to 1.50%
June 15, 2017	+25	1.00% to 1.25%
March 16, 2017	+25	0.75% to 1.00%
Dec. 15, 2016	+25	0.5% to 0.75%
Dec. 17, 2015	+25	0.25% to 0.50%

2008 Fed Rate Cuts: The Great Recession​

FOMC Meeting Date	Rate Change (bps)	Federal Funds Rate
Dec. 16, 2008	-100	0% to 0.25%
Oct. 29, 2008	-50	1.00%
Oct. 8, 2008	-50	1.50%

FAFO

The top job of the Fed is to keep inflation low. Inflation is expected to tick up because of the consumption tax that Trump implemented.

 

[Online Persona]

He’s an unhireable


FAFO

The top job of the Fed is to keep inflation low. Inflation is expected to tick up because of the consumption tax that Trump implemented.

Unhireable because I have no interest in working for someone else. Perhaps you glossed over the part of being comfortably retired and your clown friend doubling down on his lie about me stating that I was head of any department is pretty dumb and dishonest. He knows there is no post that I've made claiming that. But that dishonesty is why he's on ignore.

And the data shows disinflation as your dementia patient had increased inflation from 2.4% to 3% before leaving office and Trump has already brought that back down to 2.4% while tariffs have been ongoing. Now I do expect a short bump due to Israel-Iranian hostilities but that is what you refer to as "TRANSITORY", not the Year and Half of rapidly rising inflation under Biden that both you and the FED dishonestly referred to as transitory. It's not transitory when you are still fighting it years later under a different administration.

 

[roswelllion]

I read that no tax on tips will cost $10 billion per year and no tax on OT will cost $70 billion per year. Those are pretty big numbers to add to the deficit.

The interest deduction on car loans reminds me of Obama's Cash for Clunkers. The income limit makes it apply to people on the lower end of the income scale but it only applies to new cars. A lot of people on the lower end of the income scale should be pinching pennies and buying used cars. IMO aside from the cost of the program it also provides the wrong incentives.

You are right but there are 2 sides to every coin. On the no tax, yes $80 billion is a significant number. The good news is that is enough to be real money for lower and middle income who have been hammered the most by inflation. Helps the R's with that voting block. Cash for clunkers was a very short term program that ended up just pulling ahead the business. This I presume will be permanent or much more long lasting. I'll say again 86% of families are in the $200k or less, so you may think it is the wrong incentive but many of them already buy new cars. I am not keen of gimmicks which this falls into IMO but it is probably a payback to the UAW for their support. If that help with union vote well ok.
The one that kills me is raising the SALT to $40k. I heard that is a $350 billion hit to the debt. As someone over invested in real estate it is personally great but IMO I would rather incentivize the servers and folks working overtime. I'm fine.

 

[junior1]

Interesting, I saw that Purposebitch put a laugh emoji on my post so I was fairly confident that he had responded spewing nonsense about my advice. I don't typically see his posts since I have that clown on ignore but I thought I'd check this one and yes, he is basically saying he doesn't believe me. That's fine.

Anyway, some more back story. I did grow up in a half a double, parents moved up to a single-family home when I was in middle school. So, I didn't come from money, and I knew I wasn't going to get much help financially for college. But I had a plan.

I made money off of going to college each time that I went. As an undergrad right out of HS, I was in ROTC and had a couple of other scholarships as well such that when ROTC paid my tuition and the scholarship money went into the bursars account, I would get a refund. Plus, there was a small stipend back then, much bigger now. Then I graduated, was commissioned as an officer and started serving. I continued to live very similar to my college days financially which meant that over 50% of my pay was going into investments. After my first assignment, I bought a home every time I was assigned somewhere new except when I was overseas or deployed. Interestingly enough, once when I deployed, I rented out the property that I had been living in while I was gone and continued to receive my basic housing allowance on top of the rent (plus extra pay for being in a combat zone) because I was still assigned to the location of the property. At any rate, over my military career, I had acquired a number of properties. I even began buying additional properties at one of those locations that I knew was a great long-term investment.

Back to my statement on college, the 2nd time, the military sent me for grad school. I was one of very few 6 figure income grad students. This again was fully paid for by the military with the only catch being a follow-on assignment teaching at a military academy where I never claimed that I was the head of any department. I am not surprised that purposebitch lied about that. I have previously disclosed that I eventually became the laboratory program director before I had departed. That is congruent with my affinity for data and analysis. You see that frequently in my posts here such as when I made the case for why the FED should cut now and brought the receipts listing quite a bit of historical data going back 20 years.

And yes, I retired in my early 40s and have a military pension that is tied to inflation. That military pension alone would not be sufficient for us to live off of at our current standard of living. But it did start paying me from age 41 immediately. Good thing that I bought a bunch of investment properties. And yes, I did teach at a private HS starting the Monday after I had retired from the military. I did that for 2 years thinking that I was too young to be retired. I coached and I also ran 2 different after school clubs that were for academic competitions at the state level. But I had taken on too much and decided to actually retire after a couple of years, still in my early 40s. With the military pension plus a number of positive cash flow properties, it is sufficient to maintain our standard of living without ever having to touch our investments.

Oh, and I did complete 4 more years of college courses after I retired from teaching and after I retired from the military because, you guessed it- the military paid me to do it! Yes, I qualified for the post-911 GI Bill and the military has in total paid for over a decade of college courses for me. Plus, while being retired and using my GI bill, I was receiving housing money for that 4-year period on top of the tuition being paid. So, each time that I have gone to college, I have made money off it while enrolled. This final round, the courses happened to be in areas that I just wanted to learn more about. I enjoy learning. I intend to continue researching new areas of study throughout my retirement. Maybe 'm a dork, but I buy textbooks in various subjects and read them.

As for haters like purpose bitch, these decisions can certainly not add up to him. It doesn't have to make sense for those who seek to tear others down. But for me, the decisions and the sacrifices that I made created a viable path from a lower-middle class family to multi-millionaire and retiring in my early 40s. I've taken over a decade of college courses in 3 iterations without paying a cent, no debt, and making money off of going to college each time. I've had the opportunity to serve my Country with some of the best people that you could ever hope to know. And I've been blessed with the freedom to help family, friends, and those causes to which I am moved when and where I believe that I am needed.

Oh, one more thing. I do still squat and deadlift over 400 lbs in my 50s (as in I just did this a few hours ago) as had I stated in previous discussions. I also currently do pullups with 75 lbs attached to me and have some other fairly respectable lifts for my age as well. I suppose that some won't believe that either but it's not so different than building wealth. You start early in life, sacrifice daily and consistently, and increase your gains through the years. Now I'm probably more in the maintenance phase with my physical goals but every so often I do notch some growth.

there's a lot of value in real estate investing. I'm also retired military and. similar to you, bought properties ate three of my duty stations. We had no intention to live in any of them, just bought and rented them out. Over the years, I think we made about $1.5 million after taxes in gains. I'm at a point in life now when I don't want to be bothered by tenants, so now just have a primary residence in Florida and a summer residence further north.

I didn't take ROTC in college, big mistake. I tell kids today to take a look at it if they're looking for a great financial bridge and great career. They did pay for my masters degree, though.

I'm way too old for 400 pound deadlifts. But Army trading still has me doing my PT every morning.

 

[PaoliLion]

Unhireable because I have no interest in working for someone else. Perhaps you glossed over the part of being comfortably retired and your clown friend doubling down on his lie about me stating that I was head of any department is pretty dumb and dishonest. He knows there is no post that I've made claiming that. But that dishonesty is why he's on ignore.

And the data shows disinflation as your dementia patient had increased inflation from 2.4% to 3% before leaving office and Trump has already brought that back down to 2.4% while tariffs have been ongoing. Now I do expect a short bump due to Israel-Iranian hostilities but that is what you refer to as "TRANSITORY", not the Year and Half of rapidly rising inflation under Biden that both you and the FED dishonestly referred to as transitory. It's not transitory when you are still fighting it years later under a different administration.

The Fed isn’t going to lower rates until inflation cools down.

 

[PurposePitch]

Unhireable because I have no interest in working for someone else. Perhaps you glossed over the part of being comfortably retired and your clown friend doubling down on his lie about me stating that I was head of any department is pretty dumb and dishonest. He knows there is no post that I've made claiming that. But that dishonesty is why he's on ignore.

And the data shows disinflation as your dementia patient had increased inflation from 2.4% to 3% before leaving office and Trump has already brought that back down to 2.4% while tariffs have been ongoing. Now I do expect a short bump due to Israel-Iranian hostilities but that is what you refer to as "TRANSITORY", not the Year and Half of rapidly rising inflation under Biden that both you and the FED dishonestly referred to as transitory. It's not transitory when you are still fighting it years later under a different administration.

I'd believe you were in the military. Probably some kind of mental issue as a result of your service, resulting in an early discharge and "retirement" ... and now you're a perpetual renter.

If you own any real estate, it's a thatch hut, made of dirt, that you purchased while overseas and now rats inhabit it.

 

[Online Persona]

there's a lot of value in real estate investing. I'm also retired military and. similar to you, bought properties ate three of my duty stations. We had no intention to live in any of them, just bought and rented them out. Over the years, I think we made about $1.5 million after taxes in gains. I'm at a point in life now when I don't want to be bothered by tenants, so now just have a primary residence in Florida and a summer residence further north.

I didn't take ROTC in college, big mistake. I tell kids today to take a look at it if they're looking for a great financial bridge and great career. They did pay for my masters degree, though.

I'm way too old for 400 pound deadlifts. But Army trading still has me doing my PT every morning.

I don't know why some find it so hard to believe. Clearly you and I aren't the only ones who have followed a similar path to financial freedom and paid-for graduate level education. But apparently some here have preconceived negative thoughts about those who serve. Sad. I don't mind personal attacks on me (obviously because they disagree with my political views) but negative generalizations about those who serve is just disgusting. Perhaps they don't understand that such disrespectful and disgusting comments are simply reflective of those who make them? It is revealing of their own character.

At any rate, you seem to have done well for yourself and your family by applying a related but slightly different approach. And I get not wanting to deal with tenants although most of mine have been great and I generally like most to whom I've rented. I usually get my pick when there is turnover which I attempt to minimize by never nickel and diming and even doing things like giving them all gifts around Xmas time. Many of them have been other officers so it's pretty easy to know what you're getting. Others have ranged from younger professionals to recent retirees. But there will likely come a day when I pass down what I've built. I don't know that I'd ever sell unless I was going to do a like exchange.

PT every morning is awesome. Unfortunately, some hang up the uniform and stop doing it. I always enjoyed it and that began well before ROTC. I like to work hard in the gym and get some miles in, but my weakness is my diet. It's improved, some, but still not as disciplined as it could be. But I work hard and that mitigates the sweet tooth a bit.

 

[Online Persona]

So who sold on the Israeli attacks on Iran?

 

[Catch50]

With Congress there would be no savings as they would find something else to spend the money on.

Let's hear your cuts. Enough to balance the budget. ???

 

[Catch50]

I don't know why some find it so hard to believe. Clearly you and I aren't the only ones who have followed a similar path to financial freedom and paid-for graduate level education. But apparently some here have preconceived negative thoughts about those who serve. Sad. I don't mind personal attacks on me (obviously because they disagree with my political views) but negative generalizations about those who serve is just disgusting. Perhaps they don't understand that such disrespectful and disgusting comments are simply reflective of those who make them? It is revealing of their own character.

At any rate, you seem to have done well for yourself and your family by applying a related but slightly different approach. And I get not wanting to deal with tenants although most of mine have been great and I generally like most to whom I've rented. I usually get my pick when there is turnover which I attempt to minimize by never nickel and diming and even doing things like giving them all gifts around Xmas time. Many of them have been other officers so it's pretty easy to know what you're getting. Others have ranged from younger professionals to recent retirees. But there will likely come a day when I pass down what I've built. I don't know that I'd ever sell unless I was going to do a like exchange.

PT every morning is awesome. Unfortunately, some hang up the uniform and stop doing it. I always enjoyed it and that began well before ROTC. I like to work hard in the gym and get some miles in, but my weakness is my diet. It's improved, some, but still not as disciplined as it could be. But I work hard and that mitigates the sweet tooth a bit.

Your weakness is you lose arguments simply by not answering simple questions or acknowledging simple truths.

 

[Catch50]

1) I have read your take on tariffs being deflationary while the FED has continued to use tariffs as an inflation boogey man to not raise rates. I suspect you agree that the FED should be cutting rates. I mean they did a jumbo cut and another in the months leading to the election at higher inflation rates. It seems that you would agree that even lower inflation today and your projection of deflationary impact from tariffs make immediate rate cuts a no brainer.

2) You may want to reconcile the impact in your projection on wage declines with the actual data showing accelerating wage growth the last couple of months. Does this actual data change your projection, or should we ignore the trend in the data?

The Fed SHOULD be cutting rates.

It is entirely plausible that accelerating wage growth could be due to infrastructure and semiconductor investment in the U.S.

I bet you don't reply because you're too "proud".

 

[The Spin Meister]

I can't believe I'm going to say this, but you just said something rational. Somehow your TDS must be suppressed at the moment. If you can share how you did it, you could help millions that are suffering every day. Just think of the millions that spent this past Saturday yelling at clouds.

You are correct about rates. When I bought my first house in 2001, I had a rate at about 6-6.25. That was considered good. The low rate policy employed, to artificially fuel the economy, for the benefit of politicians seeking reelection is disastrous in the long run. We are now seeing the consequences. People are predictably reluctant to give up a ~2-3% mortgage for a 6.75% mortgage. That means people who have to sell, have far fewer buyers. The remedy here, of course, is that home prices should come down to compensate for the increased cost of money, just as cheap money drove part of the price increase.
This of course, creates a psychological barrier in the market as it will take time for sellers to accept a reduced price and buyers/sellers to accept the new market realities.

We probably have a choice. Do nothing and feel a shorter, but more intense pain, or perhaps there is a small rate reduction which could serve as a small pressure release on the market, while the psychology of a less insane monetary policy takes hold.

Opening paragraph is a classic ending to three decades of board posts!🙌🏻🙌🏻🙌🏻

 

[The Spin Meister]

Put this in the FWIW column. I live next to a plant that puts boxes on the back of delivery trucks. They're the ones you see out on the highway. In the past month, they've laid off 1/3-1/2 their workforce. They've also scaled back on any overtime. Lower paychecks will offer lower demand for goods.

Lowering the FED interest rates may sound good, but they will have a harder time selling bonds at a lower rate. That means the FED will have to print more money, which leads to more inflation and govt debt.

The problem isn't as much with interest rates as it is that the American consumer is tapped out. They are unwilling to take on new debt, especially with credit card debt at 29%. Prices are increasing faster than paychecks, If layoffs become commonplace, we might be looking at deflation and some pretty bleak times.

Just this week CNBC had on the CEOs of both VISA and American Express (IIRC) and both CEOs said there is no drop in consumer spending and expect a solid year.