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Then again, if no one bought then there wouldn't be any jobs to retire from.
I wonder about that. Some of the most spectacular successes in Post-War economies worldwide has been via export. Think of Japan, Taiwan, South Korea. The American economy has always been mainly inward-looking. Sure, we expect soybeans, corn, Coca Cola and Boeing jets... but most of the cars and washing-machines and toasters have traditionally been for the domestic market.
My belief is that the real profit-potential going forward, isn't in selling cars or toasters to middle-class Americans, but to the emerging middle class in India and China... and eventually, in Africa. It isn't how many Fords or Bentleys are bought by Joe Sixpack, but by Wei-Shen Li or Vishal Gopalarathnam.
Quote:
Originally Posted by easy62
... You think a recession is anything new I’ve been through 2 of them and the cycle just keeps repeating itself.
Recessions are a red-herring. As you yourself imply, one or two recessionary cycles is brief period in time. I'm hardly an old man, yet within my own lifetime we've already had four or five recessions, and unless some illness or stupidity overtakes me, I'll likely live to see several more. So, the point isn't about profligate spending this fiscal year, resulting in a recession next year... or next decade. A motivated person might start investing spare-change while still a child, and continue for the next 80+ (or more) years. Arguably, today we're dealing with consequences of consumer-decisions, and government-decisions, made in the 1940s and 1950s. Today's consumer-decisions might reverberate into 2070. Almost certainly I'll be dead by then, but... "almost". One can't be sure. One has to plan long-term, many recessionary (and growth) cycles into the future.
I wonder about that. Some of the most spectacular successes in Post-War economies worldwide has been via export. Think of Japan, Taiwan, South Korea. The American economy has always been mainly inward-looking. Sure, we expect soybeans, corn, Coca Cola and Boeing jets... but most of the cars and washing-machines and toasters have traditionally been for the domestic market.
My belief is that the real profit-potential going forward, isn't in selling cars or toasters to middle-class Americans, but to the emerging middle class in India and China... and eventually, in Africa. It isn't how many Fords or Bentleys are bought by Joe Sixpack, but by Wei-Shen Li or Vishal Gopalarathnam.
Recessions are a red-herring. As you yourself imply, one or two recessionary cycles is brief period in time. I'm hardly an old man, yet within my own lifetime we've already had four or five recessions, and unless some illness or stupidity overtakes me, I'll likely live to see several more. So, the point isn't about profligate spending this fiscal year, resulting in a recession next year... or next decade. A motivated person might start investing spare-change while still a child, and continue for the next 80+ (or more) years. Arguably, today we're dealing with consequences of consumer-decisions, and government-decisions, made in the 1940s and 1950s. Today's consumer-decisions might reverberate into 2070. Almost certainly I'll be dead by then, but... "almost". One can't be sure. One has to plan long-term, many recessionary (and growth) cycles into the future.
The middle class of China and India have more numbers but not more spending power. There’s more margin in the American middle class. Chinese and Indian buyers expect a car to cost $3700.
I wonder about that. Some of the most spectacular successes in Post-War economies worldwide has been via export. Think of Japan, Taiwan, South Korea. The American economy has always been mainly inward-looking. Sure, we expect soybeans, corn, Coca Cola and Boeing jets... but most of the cars and washing-machines and toasters have traditionally been for the domestic market.
My belief is that the real profit-potential going forward, isn't in selling cars or toasters to middle-class Americans, but to the emerging middle class in India and China... and eventually, in Africa. It isn't how many Fords or Bentleys are bought by Joe Sixpack, but by Wei-Shen Li or Vishal Gopalarathnam.
Recessions are a red-herring. As you yourself imply, one or two recessionary cycles is brief period in time. I'm hardly an old man, yet within my own lifetime we've already had four or five recessions, and unless some illness or stupidity overtakes me, I'll likely live to see several more. So, the point isn't about profligate spending this fiscal year, resulting in a recession next year... or next decade. A motivated person might start investing spare-change while still a child, and continue for the next 80+ (or more) years. Arguably, today we're dealing with consequences of consumer-decisions, and government-decisions, made in the 1940s and 1950s. Today's consumer-decisions might reverberate into 2070. Almost certainly I'll be dead by then, but... "almost". One can't be sure. One has to plan long-term, many recessionary (and growth) cycles into the future.
I’m 64 years old i was referring to the 1973-1975 recession and the last one i also remember the milder ones through the years.
Why do middle class Americans buy four times the house they need? Why do they run up five-figure credit card balances buying useless stuff they don't need? Why do middle class Americans buy giant pickups that cost as much as their annual income?
Nothing will change its human nature to always want the best of things regardless if you can afford it or not it’s call a capitalism. People have Ben doing this forever and will keep on doing it. You think a recession is anything new I’ve been through 2 of them and the cycle just keeps repeating itself.
Your absolutely correct. It is human nature to want the best. The problem starts at the "regardless of affordability" part. Most of the people living paycheck to paycheck and spending money like its going out of style could easily have the exact same lifestyle responsibly IF they chose to gradually increase their lifestyle. You can easily balance saving for the future and still have a good lifestyle. The problem is that people want the best of everything and they want it all now! I'm no different then most. I also want the best but I actively choose to be responsible. For example, my next car is going to cost over 6 figures. I have the money in the bank to go out and buy it tomorrow if I wanted to, no loan needed. Yet, I'm choosing to be responsible and drive my almost 14 year old car instead. I'm going to invest that money and buy the car 3-4 years from now. By waiting a measly few years I'm setting myself up for the future and I will still get the luxury car I want.
Also, let me give you a very easy to accomplish goal that would let these reckless fools pretend to be a "baller" while still setting themselves for the future. I want to illustrate just how easy it is to set yourself up financially because it reveals just how irresponsible you have to be in order to be old and broke.
-A lot of 20 year old's that are financially irresponsible will get a $35K starter luxury car to make themselves look important.
-That's about $7K a year spent on a car over 5 years. Instead they could buy a decent starter car for $5K and save the rest. Put $5K/year into mutual funds and $1K/year for a down payment on their future luxury car.
-After just 5 years they will have $25K in a mutual fund (I'm not even counting the gains over those 5 years) and $5K down payment for their car.
-Now the kid is still young at 25 with plenty of time to "impress the ladies" or whatever the hell his point of buying the luxury car was. However, he most likely received a better interest rate on the car loan and lower insurance payment on the car because of his age. Saving him even more money.
-More importantly that $25K he just saved will be worth about $290K in 30 years or $130K in actual buying power if you account for inflation.
Just by making this one single responsible decision this individual just ensured that he has guaranteed that he can cover the full cost of his healthcare from the age of 65 till his death. This is because the average individual spends an average of $138K out of pocket in medical care from the age of 65 till death. Those in the forum that are older can attest to the enormous benefit of having that $138K covered from the moment they turn 65. Now imagine if the same person made 7-8 moves like this in their lifetime where they delayed their gratification just by a bit. They could easily live a very nice life without being old and broke.
Well a lot of pickup trucks these days cost more than luxury cars. There are middle class and lower buying some of these expensive trucks. It brings them a lot of pride and happines.
Your absolutely correct. It is human nature to want the best. The problem starts at the "regardless of affordability" part. Most of the people living paycheck to paycheck and spending money like its going out of style could easily have the exact same lifestyle responsibly IF they chose to gradually increase their lifestyle. You can easily balance saving for the future and still have a good lifestyle. The problem is that people want the best of everything and they want it all now! I'm no different then most. I also want the best but I actively choose to be responsible. For example, my next car is going to cost over 6 figures. I have the money in the bank to go out and buy it tomorrow if I wanted to, no loan needed. Yet, I'm choosing to be responsible and drive my almost 14 year old car instead. I'm going to invest that money and buy the car 3-4 years from now. By waiting a measly few years I'm setting myself up for the future and I will still get the luxury car I want.
Also, let me give you a very easy to accomplish goal that would let these reckless fools pretend to be a "baller" while still setting themselves for the future. I want to illustrate just how easy it is to set yourself up financially because it reveals just how irresponsible you have to be in order to be old and broke.
-A lot of 20 year old's that are financially irresponsible will get a $35K starter luxury car to make themselves look important.
-That's about $7K a year spent on a car over 5 years. Instead they could buy a decent starter car for $5K and save the rest. Put $5K/year into mutual funds and $1K/year for a down payment on their future luxury car.
-After just 5 years they will have $25K in a mutual fund (I'm not even counting the gains over those 5 years) and $5K down payment for their car.
-Now the kid is still young at 25 with plenty of time to "impress the ladies" or whatever the hell his point of buying the luxury car was. However, he most likely received a better interest rate on the car loan and lower insurance payment on the car because of his age. Saving him even more money.
-More importantly that $25K he just saved will be worth about $290K in 30 years or $130K in actual buying power if you account for inflation.
Just by making this one single responsible decision this individual just ensured that he has guaranteed that he can cover the full cost of his healthcare from the age of 65 till his death. This is because the average individual spends an average of $138K out of pocket in medical care from the age of 65 till death. Those in the forum that are older can attest to the enormous benefit of having that $138K covered from the moment they turn 65. Now imagine if the same person made 7-8 moves like this in their lifetime where they delayed their gratification just by a bit. They could easily live a very nice life without being old and broke.
How do you know someone’s income, unless they tell you?
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