Not only is the global economy as an aggregate whole heading into a downturn, but there is an inverted relationship between the USD or United States Dollar and Gold Prices, now over $2200 per US ounce in 2023 USD$ fiat funny money that keeps losing value due to quantum easier by the Federal Reserve & many other factors related to the astronomic costs of dealing with the COVID19 debacle that still reverberate today with supply chain interruptions, chips shortages, inflated prices of new and used automobiles, and rapidly increasing rent and housing prices.
Overpaying for a home leaves many home buyers upside down when the market price drops and they have to move for work, and sell for less than they own the lender. Thus paying too much when prices are sky high a really bad idea. Many people that own homes nearby purchased them 30 years ago for less than I paid for my used 2022 Toyota Corolla Hybrid. They tell me of the crazy costs of maintaining the homes and paying property taxes that have constantly increases over time.
To be fair and balanced, if you can get a good deal, a home can be an ok way to lock in your monthly housing expenses if your going to stay in the same location for 10+ years or more. Overpaying means being house poor, unable to travel, invest, or have fun. Zip code envy an example of idolatry, though it can practical aspects for someone who wants to live close to where they work so they waste less time driving in traffic congestion.
Traffic jams tend to stress commuters who feel like the stop and go congestion sucking their finite time alive way into the ether. A lot of fuel is wasted by the Air Force who dump the aircraft fuel when coming in for a landing, but many working people in America also waste fuel by commuting too & from work long distance in vehicles that get poor fuel economy, namely large 9 passenger SUV's that they drive single occupancy, spending tens of thousands per year on gasoline to fuel such machines.
Bigger is not always better and many time less can be more! While Meg & I really like the Toyota RAV4 Hybrid and RAV4 Prime, we made the sane choice to save $10K+ upfront and $10K+ in fueling costs buying the 1 year old used Toyota Corolla Hybrid.
Often a small difference can make a big difference, especially long term. This is the principle behind investing your money now to achieve better financial freedom in the future. A small divergence of your income into profitable investments now can achieve remarkable long term ROI for your future benefit. A stern warning, investing in the stock market risky and you can lose all your money betting on the wrong companies. Also, there is no one who can tell you exactly how long you will live.
Everyone actually lives in the moment continually, here and now, not in the past or future. If you're seriously considering investing, start doing research immediately, there are lots of online guides and resources for individual long term financial planning.
Where I grew up in Bellevue, Wa, USA, single family homes sold in 1983 the year I was born sold for under $120,000 while those same homes today cost nearly or slightly more than $1 million. Property taxes that were originally $900 per year are not $10K+ per year.
Gentrification means that housing becomes unaffordable to even dual income people without children on modest incomes. This forces many people to move way from large cities where the jobs are located, who then also forced to commute in traffic over long distances, thus paying more in time wasted & vehicle expenses.
Remember the total lifetime costs of a vehicle include fuel, insurance, maintenance, repairs, depreciation, that usually exceed the purchase price. A typical $40K automobile might cost its owner $100,000 in total operating costs over the life of the vehicle, assuming they drive it 200,000 or for 20 years, which ever comes first, your mileage may vary, drive carefully as accidents can kill the driver or other people or leave you or other people with life long disabilities from bad injuries from automobile accidents mostly caused by human error.
Safety is the most important driving idea to embrace while operating an automobile while sane, sober & safety focused. Sadly, locally there are a lot of brand new, low skill, cell phone distracted, confused, bad drivers that cause accidents as well as being involved in vehicle accidents. This makes car insurance more expense nearby.
Property taxes or real estate excise taxes mean that you are effectively always renting the land from the city, or state, and never really own the land, since they can take it if you do not pay your property taxes, then your land & home get auctioned off on websites to the highest bidder.
Homes in America are made with wood nailed together, siding made of wood or vinyl or concrete boards, roofs made of asphalt shingles, tile, standing seem painted steel, windows of double pain glass surrounded by aluminum or vinyl and filled with argon, that often leak, such that moisture builds up between the glass sheets. The plumbing is falling apart, and so is the electrical.
Newer appliances are designed to fail with lifecycle analytics, but you still have access to premium long lasting commercial grade appliances if you are willing to pay 4X more upfront. The land is subjecting, pipes connected sheered in half or cracked and broken. The paint is faded and it will need new paint soon.
The roof is leaking or will in the near future, and also has to be replaced sometime, possibly repaired before then. There are insects causing wood damage or worse, like black mold growing where condensing moisture accumulate because your not heating the home as much to save money on natural gas utility expenses or your electrical utility bills to keep your operating costs lower to save money. Moldy homes sicken the people in them with immune system problems that can become lung cancer or worse.
Many factors can makes home ownership a headache of episodic sporadic heavy costs popping up to keep it in good working order. Did I mention home owners associations and yard work? On a positive note, doing your own yard work can give you exercise activity motion to keep you fit and healthy, but if you are elderly sick and or injured that might not be possible. I see a lot of homes nearby in disrepair and wonder "What must have happened?", knowing full well that some of the people are early widows who's spouse's died early of cancer or heart disease or complications from stoke, diabetes or high blood pressure.
Many American home owners are morbidly obese in a chronic state of painful inflammation taking many different prescription drugs, and can expect to die 14 years before they would have lived otherwise if they were physically fit from doing yard work and exercising and eating a healthier diet of more fiber, water, less starch and sugars and carbs, and high quality veggies and proteins, nuts, seeds, fungi, fruit, vitamins, minerals and a balanced sleep habit.
If you took the money you would have spent on a home over 30 years which with interest rates at 7% which means you pay 2.5X the actual purchase price over the course of the loan, and had started investing it in investments early on, you would have 40X more money now, assuming you made a good ROI or return on your investments like Warren Buffet or the ROI of a nuclear fission reactor over 30 years of operating.
Nearly all fission reactors were paid for by public funding because private capital investors are impatient, and it can take 20 years from breaking ground to returning a profit from selling the resulting power produced. If an investor has the money tied up for 20 years without seeing a return, the return has to be fantastic, some ~9000% after 20 years ROI with GW scale boiling water or pressurized water Gen.2 fission reactor complexes.
Wealthy rich people or elite income earners invest in profitable assets that generate passive income, like high dividend yield stocks and bonds and mutual funds. They get paid direct depots and can life virtually anywhere on earth as long as they have high speed internet access for their smartphone and laptop that they use to manage their wealth and assets.
Rich people invest in businesses that are profitable with good revenue models that generate the owners a stream of income. This means that many elite income earners effectively make thousands of times more than you do working, while they are sleeping, traveling, watching content, or 24/7 as their passive income serves them a lifestyle that most people can only dream about or watch in some show like Cribs on MTV. I will caution you that money alone does not comprise a happy or enjoyable life.
What kind of lifestyle do you want when you grow old?
Do you know what elder poverty does to older people?
Many are stuck working until they die, like Patrick the Frenchman bus driver I was friends with at work, who came to the USA from France 25 years ago at the age of 50 and told me about how he planned to retire and enjoy the remainder of his life with his wife in a beautiful warmer rural area in Arizona. He did walking to his car on the way to work and my friends at work ended up telling me about it, knowing that him and I were really close. We used to talk about flavor, aroma, taste, enjoyment, experiences about food that spoke to his French history, culture and society that focuses more on family, friendship, food, cheese, wine and joy or happiness. Patrick had adopted the American car culture and drove a blue Chevy Corvette with a manual transmission. I really miss Patrick and hope that he is with God in Heaven now.
I am convinced that despite investing, I will have to work until I am dead because of the rising costs of everything in life. I see the dollar losing value and losing reputation worldwide. I see the increasing income inequality as the billionaire owners of industry like the founder of Amazon.com turn a blind eye to the suffering of their fellow American citizens, all the people who mostly have a Prime subscription that make Jeff B a billionaire of increasing wealth, power and influence.
It seems that elite wealthy people in America have the ear of leaders in congress and the senate. They fail to embrace concern about the well fair of regular people, or health of the environments on Earth. Many very wealthy people make money by polluting nature, though factories and mines that they own and control. Doing these operations in an eco-friendly way of considerate intelligence costs more and reduces profits, so most wealthy owners refuse to upgrade processes or factors or mines with pollution reducing technologies, even though they essential want for nothing and can easily afford to improve everything more.
I feel betrayed by America as an American, sold out to corporate special interest and other countries like China who keeps giving international Silk Road loans, even to the USA. China owns many treasury notes and effectively has the USA by the balls financially. This is why currency manipulation of the RMB and unfair trade with the PRC continue with a fleet of container ships by the thousand moving millions of shipping containers of things made in China to countries around the world, where class 8 diesel trucks then deliver the goods to Target, Safeway, Costco, Walmart or Amazon shipping or fulfillment warehouses or similar.
Ebay, Alibaba, Cost Plus, Harbor Freight, Pier 1, Crate & Barrel, Fred Meyer, and nearly all consumer electronics are made in China using chips made by TSMC on fab equipment made by ASML from technology that Intel and AMD pioneered many years ago. Lithography gets a lot of the chip making press, but etch, testing, validation and many other stages of production are just as important but possibly less sexy, so everyone talks about Chip Fabs in terms of DUV or EUV lithography nodes or 5nm chip features sizes of the latest smartphone SOC.
Globalization means a lot of insourcing and outsourcing to embrace cheaper faster labor, cheaper land, cheaper buildings, what ever is cheap and faster is also more profitable. Though thin supply chain management optimized to have very low inventory also has no resilience to market interruptions, such that the COVID19 debacle made many things widely unavailable since the thin supply chain ran out quickly. It's sorta like balancing speed vs security with IT networking, though the increasing operating costs of storing large rotating inventories means lower profit margins, so most industries switched to ultra low inventory thin supply chain management.
Many factories are now lights off dark with no one inside, completely automated. The only people that go in are going to fix and repair the industrial automated equipment, to fix or maintain it respectively, or for calibration or recalibration, for testing, for QA:QC verification, but not regular full time staff like the olden days.
Consider a pharmaceutical production like for a popular generic drug with scaled large volume batch processing. Where low volume speciality biologics like MAB or PAB are made with dozens of scientists and technicians, generic drugs like ibuprofen are made at industrial scales using only a few people to keep the equipment working. Many commonly prescribed drugs are now made in cheaper countries outside the USA where quality control questionable and purity also not guaranteed. I am saying that many commonly prescribed drugs made outside the USA are lower quality, with less effect and possibly dangerous substances.
China for example has used lead oxide to replace titanium dioxide as a white pigment in Christmas light wires, but then a Prop 65 warning has to be sticker attached to the wires to warn the person installing the lights as a holiday decoration that handling them bare handed exposes them to lead. Many dangerous radioactive quack products are sold online that are also made in China.
Chinese companies also rampantly clone & copy products, selling deep fakes or super clones of Rolex watches for example, or copycats of the real IPhone. One of the problems that many luxury goods makers run into comes from manufacturing their goods in China, where the process and products are cloned by industrial espionage. In the PRC its a kill or be killed mentality, where people step others to climb the social and economic latter to higher standards of living. Soaring automobile sales inside china also means 3-4 hour long traffic jams and worse with more local air pollution sickening many Chinese people with respiratory diseases now, stress and anxiety from driving in their new car in stop and go traffic congestion, that ironically gives them respirator congestion, just like the coal power plant emissions nearby inside China somewhere industrial where more new wealth and lots of middle income people are buying new cars.
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