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Higher Interest Rates Will Cause Inflation

There was a time not that long ago when people believed higher interest rates slowed the economy, caused higher unemployment, dampened demand and put pressure on prices. The Federal Reserve in the United States and Central Banks around the planet held this belief tight to the chest. When the economy overheated, causing inflation to creep up, the Fed would start increasing interest rates until demand weakened as consumers faced higher borrowing costs.

The opposite also held true. Low interest rates were thought to spark strong economic growth as lower interest rates freed cash in family budgets for more spending while encouraging businesses to ramp up production with cheap credit. Since the Great Depression this theory held true and worked, even if slowly, in controlling economic activity. Then we had the twin recessions of the early 1980s.

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Problems with Owning Individual Stocks and Index Funds at the Same Time

When you begin your journey towards financial independence you can’t imagine some of the problems along the way. Investing starts out larger than life and scary until you see how simple index funds make investing in large successful companies is.

Before long you have a large nest egg in your 401(k) and IRAs. Eventually your savings rate starts building your non-qualified accounts (non-retirement) as well.

As your net worth reaches for the sky you have the latitude to try some alternative investing in a mad money account. You start reading books on super investors like Warren Buffet and Ben Graham and decide it is worth learning the process of buying outperforming individual stocks with a small portion of your portfolio. Besides, you might really have a feel for finding great underpriced companies to buy stock in.

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Manufactured Spending Without the Factory

The biggest problem most people have with credit card bonus programs is meeting the spending requirements for the bonus. Business owners have an advantage. Landlords do too. Meeting a $3,000 spending requirement in 90 days is a snap of the finger for even a relatively small business or side gig.

But not every side gig has enough spending that can go on a credit card and if you only own a few rental properties and maintenance is not currently required you will need another source of spending to earn a bonus.

Readers of this blog tend toward the frugal side. Spending for the sake of spending for a bonus is crazy and you guys know it. Your personal spending is probably too low to earn many bonus cash awards or miles. Travel hacking gets harder when you save most of your income.

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Secret Messages

Sometimes accounting can be a downright boring subject. It is the job of your favorite accountant to spice it up a bit with stories and jokes so the message resonates and therefore gets through. No matter how brilliant my idea to increase wealth or lower taxes, it is worth nothing if I can’t keep you reading to the end.

Many people find blogs like this by accident. The people hunting for blogs like this already are open to the concepts. Not so the wayward traveler finding her way here from search engines. I write for the choir, but always consider the wayward, too.

I use stories to convey the message. Money is fun to read about and have. To keep readers engaged I impose secret formulas to keep them coming back. It’s almost like a sickness the reader can’t quite put her finger on. How come I am so draw to this blog about (egads!) accounting, saving money, investing and retirement? the wayward soul asks.

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Special Report: Why Mylan CEO Heather Bresch is full of BS

The health care system is broke in the U.S.; few doubt that fact. Mylan NV and its CEO Heather Bresch symbolize everything wrong with medicine today. In this short post I will show you how to ferret out BS from public companies using their own words. Bresch is on CNBC this morning defending Mylan and the company’s position.

In the interview Bresch makes several comments about the price increase of a Mylan product: EpiPens. Prices increased steadily from $164.98 for a two-pack in May 2011 to $608.61 for the same two-pack in May of 2016. Bresch uttered frustration because the price increases are the result of all the middlemen touching the product (“…four or five hands”). Bresch said, “That $608 is a list price. What Mylan takes from that, our net sales is $274, so $137 per pen.”

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The County of ‘Making a Murderer’ Strikes Again

This spring I attended Camp Mustache III in western Washington State. Between our leisurely learning sessions we hiked Mt. Si.  When our hike was over a group of us gathered at the base of the mountain as we started walking back to the Rainbow Lodge where we were staying. I was a guest speaker so people were interested in my personal life, including where I lived.

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3 Lifestyles of the Rich and Stupid

The lottery is back in the news with promises of a rich reward for a very small number of people who randomly pick numbers matching the officially drawn numbers. The odds are hundreds of millions to one. But you can’t win if you don’t play. Just one ticket, one little ticket. A single dollar. Better buy two; make that three.

Lottery sales shy rocket when the jackpot rises to mega levels. The impossible odds are still just as bad when the jackpot is massive. The one question I don’t hear people asking is: If nobody won the last time they drew numbers and millions played, what chance do you have of winning?

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Buy a Car $4,000 Under Blue Book

Cars are a leading cause of wealth destruction; they are also a necessary evil in our society. The only way to win the “car” game is to prepare for battle with a fully loaded arsenal. Today I am going to show you how I buy cars for $4,000 or more under Blue Book.

Before we begin battle you need to understand my car habits. I drive 6,000 – 8,000 miles per year, mostly for business trips. I bike to work around 100 days per year and drive another 100 days. The round trip to work is 30.2 miles. I always buy a used vehicle. Once I claim ownership of said vehicle I drive it for 15-20 years. There are two cars in the garage. This means I buy a car every 7 to 10 years on average. I keep my cheapskate skills honed by helping clients and family members engage in the same mischievous auto savings activities.

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