The maker of the documentary exposes the world of art collecting and the explosive valuations assigned to the art space. I call it “space” as I couldn’t get past the vacancy attached to paying a ridiculous amount of money for something to look at nor could I be persuaded by the pretension.
To me, it’s a profound lesson in how we define value in our lives. Because when you think about it, everything has value. And nothing has value.
Just when I think I can’t find another money subject to obsess over, I come across something really fun. Of course, my fun comes in the form of interest and dividends. You know, passive income or getting money for no effort.
When browsing some financial websites, I came across a blog piece that featured how to live off of dividend income. At the end of the article was a small, but not insignificant, mention of preferred stocks. Well, now, hold on. We’re not talking about 2%, we’re talking about 10 – 12% in passive income. Preferred stocks pay a very high dividend that makes common stock dividends look like pocket change. Wait, this is legal?
With the holidays coming up, I thought I’d address gifting. Unable to contain my practical side, my suggestion for gifting to children should be corporate stocks. Forget the useless toys and crap that ends up in a junk pile. Hopefully you donate those things when your child outgrows them, not add to our garbage landfills.
Give a gift that gives back. This year, buy a dividend-paying corporate stock. Your gift can extend past the holidays by educating them about stock investing. Plan small, ongoing lessons throughout the year to generate enthusiasm for investing. This could be the most valuable gift that you can give a child. You would be laying a foundation for their future wealth.
Flashing back to 2009: I have images of articles from a February, 2009 BusinessWeek issue. Last week I mentioned that, in early 2009, 10,000 people a day were losing their jobs. What was also reported was the downsizing of industry. A variety of industries were expected to feel the burn of the economic meltdown. Because inventories were high and consumerism slowed to a stop, industries that produced goods were likely to continue reducing their employee headcount. Some of the sectors that were expected to continue dropping employees were apparel production, car, train and plane productions and construction.
The attached article reports on the surge of foreclosures and the big banks’ response in helping homeowners. The loan modifications offered didn’t help and the think tank of bank executives offered hollow promises. Sadly, most borrowers went into foreclosure or were forced to declare bankruptcy.
Based on information that I read last month at the 10-year anniversary, some people reported suffering equity losses that they’ve never recovered from.
This article has so much information about what not to do and is a learning tool for not repeating others’ mistakes. I’ve included it here.
It was reported back in early 2009 that 10,000 a people a day were losing their jobs. Job losses meant that people stopped spending money, furthering the damage to the economy. It almost seemed that there was no way out of the disaster. As you can see from the second image that I presented that consumer spending was down, way down. Consumer spending supports the economy at the rate of about 70%, so you can see how job losses and reduced spending were going to delay economic recovery. In addition, average people not only stopped spending but were struggling with accumulated debt.
Job losses were the news of the day. I remember being at my follow-up job only two months, when I had two cell phone calls in one week from friends that both lost their jobs. Many employers handled it poorly, witnessed by the remaining employees.
In late October, 2008, the fear had set in. A writer from Newsweek chose to report on the edge of positivity but, really, there was none to be found. Everywhere you turned, there was more bad news.
Even the run on foreclosed properties had a downside. The article reports that foreclosed owners often left feces on doorknobs and banisters. That’s a reflection of the anger level of homeowners that had to abandon their homes. Many were on the verge of bankruptcy.
The “Ownership Society” rallied by President Bush was meant to include every American into the homeownership club. That went down in flames, taking the rest of the country with it.
Today’s first topic is asset diversification
I promised to talk about asset diversification and I know you’ve heard of this. You may feel a yawn coming on. I know, it’s not very exciting. What is exciting is knowing that your hard-earned investments won’t be wiped away in an instant if “Wall Street” makes a bad decision.
Ten years ago, back in October, 2008, the stock market tanked. The uncertainty from the big bank bailouts and near-collapse of the economy was reflected in the wild volatility of the stock market.
The Dow Jones Average, at over 11,000 in the third quarter of 2008 was now below 8,500, resulting in year-to-date stock losses of over $8.3 trillion. The news of government bailouts rocked the markets and no one wanted to be in equities. It was a scary and dismal time and the instability was not to be contained.
Imagine losing your job or worrying about your job security at the same time knowing that your investment portfolio was evaporating. Not a fun time.
Today’s flashback to 2008 follows the buyout of Bear Stearns, how their executives knew the financial reality and how the subsequent fallout of the failure of the large financial institutions was forming. CNBC aired a special, Crisis on Wall Street, on the frenzy of reactions during mid-September 2008 to deal with the quick domino-effect of the bankruptcies of the country’s largest banks. If you didn’t watch it, you can probably catch a rerun.