spend your money

[Ray Zee]

with interest rates so low, and hard to find a place to invest, it is a good time to spend some money. as when you spend money you give up its compounded returns. but when rates are low, you get more bang for your buck on spending.
especially if you spend it on things that you will need to do some time anyway. like replace a car, improve your house, take a vacation, buy two plus two books, keep a mistress, etc, etc.

[Wildbill]

Actually Ray, now is the time for savings. As a NY Times article pointed out today if you just cut $50 out of your monthly budget that is like earning the interest from a $100,000 money market fund!!!

As for buying 2+2 books, well considering there are about 2 of them a year released that won't help the economy much

[AceHigh]

I hope people take your advice Ray. If the consumer confidence level was higher, I think the economy would pull itself out of this funk.

Unfortunately, most of my co-workers and I are worried about the unemployment numbers. Us computer geeks are used to having tons of job options and now that the job market is depressed people are cutting back on spending. Not sure if it makes sense, but that's the way I see it.

[Ray Zee]

now i know why i dont read the n.y. times.

[Wildbill]

It was actually an excellent article. NY Times is good for some things, just avoid their opinion section unless you think Bill Clinton was the greatest President of the 20th century.

The article pointed out that while everyone has been focused on stock investors getting creamed and how they are trying to jump start the economy, its easy to overlook retired people. They are the ones that are pure consumers, if they take out 50k from their retirement plan this year its probably all going to be spent. There are no questions of what tax rates will get the best balance of spending/saving and whatnot. They pointed out a lot of people retired expecting a certain level of interest and modeled a way to survive on that. Not with almost no interest paid they are pretty much in trouble. Not only are there good points about how little savings generate these days, also its sobering thoughts for most of us as we try to determine how much to save in 401k and IRAs to be able to live the longer lives we are now expected to have.

[Ray Zee]

anyone expecting a certain level of interest has to know that rates go up and down. and all can lock in a rate with long term bonds and stagger the payoff dates so they mature all along for them. this is if fixed income is their desire.
your 401 and iras should always be maxed out, so what the return is, is a moot point. when you retire you got what you got.
but all the rich people i know that didnt make it through business seem to have put money in real estate and let it grow that way.

besides other than fibbing about sexual matters what was so bad about clinton.

[Wildbill]

Nothing terribly wrong with Clinton, just he isn't going to go down as the best of the 20th century. Now if he picked someone better looking than Monica... /images/graemlins/grin.gif

[Zeno]

[ QUOTE ]
like replace a car, improve your house, take a vacation, buy two plus two books, keep a mistress,

[/ QUOTE ]

I assume this is not in any order of preference, if it is, Ray, you may need to straighten out your priorities. Just some friendly advice. /images/graemlins/grin.gif

On a serious note, this does sound interesting. So you would recommend say, beefing up your gun collection, or traveling to Northern Portugal and lounge about in the wine and cork country - eating, drinking and trying to seduce young, firm senoritas?

Is it also a good time to buy, for example, old coins (I already have some Carson City Silver Dollars) or old gold pocket watches (also got one of these awhile back, 1888 Elgin model) ?

Regards,

-Zeno

[Wildbill]

Don't go to Portugal, Ray wants you to beef up the US economy /images/graemlins/smile.gif

When thinking about it, where is the best place to spend money, where one gets the biggest economic benefit for the buck. We discussed this at lunch today and its hard to say. I say regular food places are best. The food is almost all locally purchased and you support people with smaller paychecks so they are most likely to recycle that back into the economy and not save it. Further you give money to the food server in a tip that is likely not to be fully taxed and being a former worker in that field I can tell you they will spend it like there is no tomorrow. I have never in my life known a food server that had any significant savings, its all cash in their pocket so it finds a way to be spent it seems. Anyone else think of another case where the dollars you spend juice the economy better?

[Zeno]

This is interesting and perhaps more important than many of us think. What is the best way to spend money to recycle the cash back into the economy to help stimulate local growth and consumer confidence or at least "juice the economy" as Wildbill so eloquently put it? Ray says to spend so let’s add to the choices:

1. Local farmers market
2. Family or local chain restaurants
3. At the hometown or neighborhood bar
4. Strip Club
5. Brothel (legal or otherwise)
6. Street vendors (I am not advocating drugs on this one)
7. Trade or other shows, Gun shows for example, or a computer show or other specialty shows.

8, 9 ,10 …….. etc


-Zeno

[Mark Heide]

Ray,

I was thinking of buying more two plus two books, but I'm waiting for your next one. With the sales of books, I can't imagine why you have not written another one for Mason. David even wrote one for him last year.

Mark

[Ray Zee]

zeno, the whole idea of collecting money is so you can spend it someday. so when returns are high you get your best bang by saving. when returns are low is the time to part with it as it isnt likely to grow much in the near future.
spending on things you will buy anyway is the best bang for your buck when returns are low. like your gun collection or coins. they will have a better chance to gain value later on, so you get double whammy. trips to portugal is beyond me as i dont know any reason to plant yourself there when new zealand and australia havent been taken over by china yet.
eating and drinking should never be cut back on unless you are trying to lose something.

[Wildbill]

Ray I was wondering...what is the biggest cost for keeping a mistress??? /images/graemlins/grin.gif

1. Condoms/Viagra
2. Dinners so you can spend the whole time thinking of what is for dessert.
3. Getting a place to put her up.
4. The paternity suit, discounted to present value.

[Ray Zee]

the 4 million dollar ring you have to buy your wife after you get caught

[punkass]

Sounds like a crash course in opportunity cost.

And if anyone thinks their $10 tip to the waitress will do anything special to the economy, it's not. Unless you and a million of your friends who weren't tipping before start to now. Then you might have the same effect as a tax change by the government.

[Wildbill]

If you are interested in spending in the local economy it will. Here is my thinking. You give a $10 tip, most of that will fully hit the server. On average night as a food server I would claim 8% tips and usually net about 13-15%, so lets just say half. Food servers CLAIMED income is rather low unless its a highbrow joint, so they are probably paying 15% income tax. So in this case about 7%, or 70 cents goes to the government, the $9.30 goes to her pocket. If I were to buy something in a store I would pay more just in sales tax, not to mention the income tax of the owner and the taxes for his employees. Yes money going to taxes does find its way back into the economy, just the multiplier is almost always lower by a country mile. I think there is little doubt a tip to a food server will generate a lot higher multiplier than say buying a 2+2 book over at Borders.