How to Ruin Real Estate Investment Before You Begin

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Dear Rich Lifer,

Over the weekend, I shared some of the pros and cons of buying a vacation home.

Not only do you need to be able to cover the upfront costs of buying a second home, you also have ongoing yearly expenses to cover as well.

And unless you intend on renting out the property for a good chunk of the year, forget about seeing a significant return on your investment.

But, a few readers asked if buying a second home with friends is a better idea.

Today I’ll dissect this question a bit.

Should You Buy a Vacation Home with Friends?

Buying beachfront property or a cabin in the mountains might seem like a pipe dream on your own dollar. That’s why more and more buyers these days are teaming up with friends to share the cost.

Dividing the mortgage sounds great on paper, but buying a second home with friends comes with its own set of challenges.

Take the obvious, if things go sideways, you could risk losing a close friendship. There’s also legal battles over the property and all sorts of headaches that can arise.

So before you even start talking to a friend or friends about going halfsies on a second home, understand what you’ll be giving up and what you have to gain by not being the sole owner.

Half the Say on Everything

Splitting the cost on a vacation property sounds tempting, but when you team up you have to be willing to compromise. You might have been best friends all your life but share completely different tastes in home decor.

The same goes for location, cleanliness, etc. If you’re seriously considering buying a property with a friend or another party is involved, set the stage for these types of discussions early on. You want to agree on what you’re both looking for in a property before you get too far along.

It’s easy to assume everyone is on the same page. Don’t assume anything. Ask the obvious questions on your mind.

For example, will everyone want to use the property year-round or will it generate income as a rental for part of the year? Sort through these questions before you sign on the dotted line so you avoid any fights post purchase.

How Will You Handle Exits?

A lot of joint buyers will purchase property with the intent of holding onto it forever, or at least long enough to pass down to their kids.

Before you buy with friends, decide what happens if someone wants out. You should already have an exit strategy so there are no surprises when the time inevitably comes.

Even having upfront discussions about how long each owner sees themselves staying invested in the property is important. Because if someone wants to sell after a few years and the other party doesn’t, there could be a conflict that leads to legal drama.

Also, determine whether you’d be able to afford to buy out your friend, or cover the extra costs in the event you need to find another partner. Thinking through these questions and having written down plans for different scenarios will go a long way in mitigating any future dilemmas.

Who Will Take Care of the Maintenance?

If you’re not organized or you don’t like planning, you better hope your friend or another person in your party does. Because owning property as a group requires a lot of planning and organization.

You need to know who gets access to the property and when, who will do the upkeep and maintenance, who is going to pay the monthly expenses, etc. If you don’t have someone in your group that can stay on top of all this scheduling, you might be in for some headaches.

You Can’t Control Your Friends’ Finances

Probably the biggest risk of buying a house with a friend or multiple people is how their finances can negatively impact yours. Even though you did your due diligence, you can’t control your friends’ financial situation. If they fall behind on their share of payments, your credit could be affected.

Also, you run the risk of not being able to qualify for other loans when you carry a large mortgage. Lending institutions will look at the amount of debt you’re responsible to pay monthly relative to your income. Because you’re responsible for the entire mortgage payment (your friend is also), your debt-to-income ratio may increase such that you can’t qualify for an auto loan or personal loan should you want one.

The Bottom Line

Buying a vacation home with friends is a great way to lessen the financial burden of owning a small piece of paradise. However, it comes with its own set of unique challenges.

If you can have these early talks and figure out a solid strategy that works for all parties involved — also finding a really good real estate attorney helps — you can make this work.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

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The Secret to Acing an Interview After 50

This post The Secret to Acing an Interview After 50 appeared first on Daily Reckoning.

  • The biggest stumbling blocks to older workers are…
  • Avoid putting this red flag on your resume…
  • Nothing ages someone more in an interview than…

Dear Rich Lifer,

Finding work in your 50s or 60s is no easy task, but new and somewhat surprising employment data suggests that prospects are improving, especially for older job seekers.

One big reason?

This is the tightest labor market in nearly two decades, causing employers to look beyond the sea of Millennial candidates.

At the end of July, there were nearly 7.3 million unfilled jobs, but only 6.1 million people looking for work, according to the U.S. Department of Labor.

The unemployment rate in July for Americans 55 years and over was 2.7 percent, less than the overall unemployment rate at 3.7 percent.

What’s more encouraging is the average length of unemployment for older job seekers has dropped significantly since 2012.

It’s down from roughly 50 weeks to 34 weeks for job hunters age 55 to 64 and down from about 62 weeks to 30 weeks for those 65+.

In other words, it takes about seven to eight months on average to find a job if you’re over 55.

Stumbling Blocks for Those Over 50

Something I don’t think is given enough attention today are the unique challenges the over-50 crowd faces when looking for work.

Older applicants are competing with tech-savvy Millennials who often come at a cheaper price, and although age discrimination is technically illegal, it’s still pretty hard to enforce.

A study by the Government Accountability Office found five common barriers to employment for older workers:

High salary expectations — You may need to compromise on pay as your skills might not be as up to date as they once were.

Younger bosses — It’s human nature to want to work with people who are like you. If that’s the case, you need to learn how to address this obstacle in an interview.

Out of date skills — Technology is evolving faster than ever. Whether it’s applying for a job online or actually being able to operate new software, the pace can be overwhelming.

Expensive health benefits — The older you get, the more expensive your health premiums become. Bigger companies will be less impacted by this than smaller firms.

Bias — Old habits (and ideas) die hard. Know what biases you’re up against so you can get in front.

Acing the Interview

If it’s been a while since you were actively looking for work, you’ll notice certain aspects of the application and interview process has changed.

My hope today is to give you a few pointers on how to land your next gig, whether you’re coming off a layoff or looking for part-time work as a recent retiree.

If you follow these 10 tips, your inbox should be full of offer letters in the next few months.

Tip 1: Tap Your Network

A major benefit to having been in the workforce for so many years is your network of contacts. Don’t be shy to reach out to old bosses, co-workers, even subordinates.

Let them know you’re on the job hunt. Companies like referrals and it’s a lot easier to get your foot in the door if you know someone.

Tip 2: Get on LinkedIn

A quick way to tap your network is to connect with them on LinkedIn, the popular business-oriented social platform.

If you don’t have a LinkedIn profile, create one now. LinkedIn has become the go-to site for recruiters and hiring managers.

There’s plenty of good advice online that will walk you through how to build an attractive profile that will grab the attention of headhunters.

Bonus: just having a decent LinkedIn profile shows that you’re somewhat tech-savvy helping fight the ‘tech-illiterate’ label.

Tip 3: Update your Wardrobe

This might sound superficial but you need to dress for the job you want, and I don’t mean wearing a C-suite suit.

Your look should appear vibrant and modern. You don’t want to look dated because it’ll make the interviewer think that your skills are dated too.

The goal is to look age-appropriate yet current. Invest in a new suit, a slimmer fitted dress shirt, or a new pair of shoes. If you wear glasses, prioritize getting those updated first. Nothing ages someone more than an out-of-date pair of eyeglasses.

Tip 4: Update your Email Address

If you’re still using an old AOL or Hotmail account, you need to sign up for a newer email service. Get a Gmail or Outlook account to show you’re keeping up with the times.

It probably won’t win you a job, but it definitely won’t raise any red flags during the screening process either.

Also, check out Zoho and iCloud Mail, these are newer email services that’ll show you’re a little more tech-forward.

Tip 5: Modernize Your Resume

First, be sure to keep your resume to two pages max. Even if you’ve had a long and successful career, don’t bother listing every job you’ve held.

A good rule-of-thumb is to go back 10 to 15 years in your work history. This will also help disguise your age a bit should you be unfairly categorized. You can leave off the year you graduated from school, as well.

Be sure to include your LinkedIn profile URL and newly updated email address. If you have a landline, it’s best to leave it off and just use your cellphone.

These are minor details that will show a hiring manager you’re up to date.

Tip 6: Use Experience to Your Advantage

A major advantage you probably have over younger applicants is your experience, make sure you point that out and show how your expertise will help the company.

Don’t just tout your past though. Talk about the future and how you can mentor and groom the next generation of leaders in the company.

Tip 7: Show Adaptability

There’s a notion that older workers are typically going to be set in their ways. This is a common hurdle the over-50 job seeker must face. To fight this stereotype, you need to show that you’re adaptable to change.

When you speak to hiring managers, talk about situations where you adapted to change and the positive outcomes from doing so. Another way to show your flexibility is your willingness to take on temporary, part-time, or project-based work.

Employers understand that young job seekers want full-time jobs with benefits and security for their families. Older workers can fill the void especially for jobs that are seasonal or temporary by nature.

Tip 8: Keep up on Trends in Your Field

An easy way to impress hiring managers is to show that you’ve been keeping up in your field. To do this you can simply read industry newsletters, books, or watch videos online.

There are plenty of online courses you can take for further career development. Udemy, Lynda, and Coursera are all good places to start looking.

Tip 9: Highlight Your Tech Skills

You can’t get around it. In today’s workplace, you need to have a solid understanding of the technology used in your field. Find ways to weave the tech skills you have and are learning into the recruitment process.

For instance: instead of just saying you’re proficient in Excel, give a quick example of how you used Excel to filter large sets of data using pivot tables.

Tip 10: Show You’re High Energy

You want to give the impression that you’re ready to hit the ground running and not simply winding down for retirement. Terms like energetic, fast-paced, and looking for a new challenge are easy ways to liven up your resume.

No doubt, finding work as you get older becomes more challenging.

But that certainly doesn’t mean that you have less to offer than younger candidates. You just have to exert a little more effort to show that in your resume and during the interview process.
Stick to the basics and follow these 10 tips, it’ll help improve your odds of landing a job, or two.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

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Major Recession Alarm Sounds

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Red, red, in every direction we turn today… red.

The Dow Jones shed 800 scarlet points on the day.

Percentage wise, both S&P and Nasdaq took similar whalings.

The S&P lost 86 points. And the Nasdaq… 242.

And so the market paid back all of yesterday’s trade-induced gains — with heaps of interest.

Worrying economic data drifting out of China and Germany were partly accountable.

Chinese industrial production growth has slackened to 4.8% year over year — its lowest rate since 2002.

And given China’s nearly infinite data-torturing capacities, we are confident the authentic number is lower yet.

Meantime, the economic engine of Europe has slipped into reverse. The latest German data revealed second-quarter GDP contracted 0.1%.

Combine the German and Chinese tales… and you partially explain today’s frights.

But today’s primary bugaboo is not China or Germany — or China and Germany.

Today’s primary bugaboo is rather our old friend the yield curve…

A telltale portion of the yield curve inverted this morning (details below).

An inverted yield curve is a nearly perfect fortune teller of recession.

An inverted yield curve has preceded recession on seven out of seven occasions 50 years running.

Only once did it yell wolf — in the mid-1960s.

An inverted yield curve has also foretold every major stock market calamity of the past 40 years.

Why is the inverted yield curve such a menace?

As we have reckoned prior:

The yield curve is simply the difference between short- and long-term interest rates.

Long-term rates normally run higher than short-term rates. It reflects the structure of time in a healthy market…

Longer-term bond yields should rise in anticipation of higher growth… higher inflation… higher animal spirits.

Inflation eats away at money tied up in bonds… as a moth eats away at a cardigan.

Bond investors therefore demand greater compensation to hold a [longer-term] Treasury over a [short-term] Treasury.

And the further out in the future, the greater the uncertainty. So investors demand to be compensated for taking the long view.

Compensated, that is, for laying off the sparrow at hand… in exchange for the promise of two in the distant bush.

But when short- and long-term yields begin to converge, it is a powerful indication the bond market expects lean times ahead…

When the long-term yield falls beneath the short-term yield, the yield curve is said to invert.

And in this sense time itself inverts.

Time trips all over itself, staggered and bewildered by a delirium of conflicting signals.

In the wild confusion future and past collide… run right past one another… and end up switching places.

Thus an inverted yield curve wrecks the market structure of time. It rewards pursuit of the bird at hand greater than two in the future.

That is, the short-term bondholder is compensated more than the long-term bondholder.

That is, the short-term bondholder is paid more to sacrifice less… and the long-term bondholder paid less to sacrifice more.

That is, something is dreadfully off.

It suggests an economic winter is coming…

We fretted and moaned recently that the 10-year Treasury and the 3-month Treasury inverted.

But many believe the 10-year versus 2-year sector of the yield curve is the one to watch.

Its recession-forecasting talents overmatch all others.

And now…

For the first instance since 2007, the 2-year Treasury note and the 10-year Treasury note have inverted.

That is, yields on the 10-year have dropped beneath yields on the 2-year.

Its significance is not “fake news,” as explains Justin Walters, co-director of research and investments at Bespoke Investment Group:

Given prior inversions of other curves… the fact that the 2-year note and the 10-year note has now inverted isn’t “fake news.” Inversions are not a good sign for the economic outlook, having preceded prior recessions with frightening regularity.

Bank of America Merrill Lynch strategists claim today’s inversion means “the equity market is on borrowed time.”

The question then becomes:

How much borrowed time?

But the question is easier asked than answered.

An inverted yield curve is not necessarily an immediate scourge.

History reveals the grim effects of an inverted yield curve may not manifest for 12–18 months — or longer.

Of course… they may also sting earlier. The hour and minute are truly on the knees of the gods.

But how badly might recession batter the stock market?

The BAML strategists ransacked the numbers.

They reveal the S&P often attains maximum height 7.3 months after a 2-year/10-year inversion — on average.

The S&P may therefore run higher through next March.

But once the inevitable recession comes hammering down…

Data indicate recession claims some 32% of the S&P’s value — again — on average.

Are you prepared for a 32% trouncing?

Would you like to know who is not?

The president.

The gale might blow straight through the 2020 presidential election.

Given how he pins his reelection on a roaring stock market… President Trump had better hope the recessionary forecast is false.

Below, Robert Kiyosaki shows you why it is more important to own gold — “God’s tears” — than ever. Read on.

Regards,

Brian Maher
Managing editor, The Daily Reckoning

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China: Paper Tiger

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China’s shock currency devaluation last week begs the following questions: Is China a rising giant of the twenty-first century poised to overtake the United States in wealth and military prowess? Or is it a house of cards preparing to implode?

Conventional wisdom espouses the former. Yet, hard evidence suggests the latter.

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Your correspondent in the world famous Long Bar on the Bund in Shanghai, China. The Long Bar (about 50-yards long) was originally built in 1911 during the heyday of foreign imperialism in China just before the formation of the Republic of China (1912-1949). Bar regulars were divided into “tai-pans” (bosses who sat near the window), “Shanghailanders” (who sat in the middle), and “griffins” (newcomers who sat at the far end).

I made my first visits to Hong Kong and Taiwan in 1981 and my first visit to Communist China in 1991. I have made many visits to the mainland over the past twenty years and have been careful to move beyond Beijing (the political capital) and Shanghai (the financial capital) on these trips. My visits have included Chongqing, Wuhan, Xian, Nanjing, new construction sites to visit “ghost cities,” and trips to the agrarian countryside.

I spent five days cruising on the Yangtze River before the Three Gorges Dam was finished so I could appreciate the majesty and history of the gorges before the water level was lifted by the dam. I have visited numerous museums and tombs both excavated and unexcavated.

My trips included meetings with government and Communist Party officials and numerous conversations with everyday Chinese people, some of who just wanted to practice their English language skills on a foreign visitor.

In short, my experience with China goes well beyond media outlets and talking heads. In my extensive trips around the world, I have consistently found that first-hand visits and conversations provide insights that no amount of expert analysis can supply.

These trips have been supplemented by reading an extensive number of books on the history, culture and politics of China from 3,000 BC to the present. This background gives me a much broader perspective on current developments in China and a more acute analytical frame for interpretation.

An objective analysis of China must begin with its enormous strengths. China has the largest population in the world, about 1.4 billion people (although soon to be overtaken by India). China has the third largest territory in the world, 3.7 million square miles, that’s just slightly larger than the United States (3.6 million square miles), and only slightly behind Canada (3.8 million square miles).

China also has the fifth largest nuclear arsenal in the world with 280 nuclear warheads, about the same as the UK and France, but well behind Russia (6,490) and the U.S. (6,450). China is the largest gold producer in the world at about 500 metric tonnes per year.

China has the second largest economy in the world at $15.5 trillion in GDP, behind the U.S. with $21.4 trillion, and well ahead of number three Japan with $5.4 trillion. China’s foreign exchange reserves (including gold) are the largest in the world at $3.2 trillion (Hong Kong separately has $425 billion in additional reserves).

By way of contrast, the number two reserve holder, Japan, has only $1.3 trillion in reserves. By these diverse measures of population, territory, military strength and economic output, China is clearly a global super-power and the dominant presence in East Asia.

Yet, these blockbuster statistics hide as much as they reveal. China’s per capita income is only $11,000 per person compared to per capita income of $65,000 in the United States. Put differently, the U.S. is only 38% richer than China on a gross basis, but it is 500% richer than China on a per capita basis.

China’s military is growing stronger and more sophisticated, but it still bears no comparison to the U.S. military when it comes to aircraft carriers, nuclear warheads, submarines, fighter aircraft and strategic bombers.

Most importantly, at $11,000 per capita GDP, China is stuck squarely in the “middle income trap” as defined by development economists. The path from low income (about $5,000 per capita) to middle-income (about $10,000 per capita) is fairly straightforward and mostly involves reduced corruption, direct foreign investment and migration from the countryside to cities to purse assembly-style jobs.

The path from middle-income to high-income (about $20,000 per capita) is much more difficult and involves creation and deployment of high-technology and manufacture of high-value-added goods.

Among developing economies (excluding oil producers), only Taiwan, Hong Kong, Singapore and South Korea have successfully made this transition since World War II. All other developing economies in Latin America, Africa, South Asia and the Middle East including giants such as Brazil and Turkey remain stuck in the middle-income ranks.

China remains reliant on assembly-style jobs and has shown no promise of breaking into the high-income ranks.

In short, and despite enormous annual growth in the past twenty years, China remains fundamentally a poor country with limited ability to improve the well-being of its citizens much beyond what has already been achieved.

With this background and a flood of daily reporting on new developments, what do we see for China in the months and years ahead?

Right now, China is confronting social, economic and geopolitical pressures that are testing the legitimacy of the Communist Party leadership and may lead to an economic crisis of the first order in the not distant future.

In contrast to the positives on China listed above, consider the following negative factors:

Trade wars with the U.S. are escalating, not diminishing as I warned from the start in early 2018.

Trump’s recent imposition of 10% tariffs on the remaining $300 billion of Chinese imports not currently tariffed (in addition to existing tariffs on $200 billion of Chinese imports) will slow the Chinese economy even further.

China retaliated with a shock devaluation of the yuan below 7.00 to one dollar, a level that had previously been defended by the People’s Bank of China. Resorting to a currency war weapon to fight a trade war shows just how badly China is losing the trade war.

But, this currency war counterattack will not be successful because it will incite more capital outflows from China. The Chinese lost $1 trillion of hard currency reserves during the last round of capital flight (2014-2016) and will lose more now, despite tighter capital controls. The spike of bitcoin to $11,000 following the China devaluation is a symptom of Chinese people using bitcoin to avoid capital controls and get their money out of China.

The unrest in Hong Kong is another symptom of the weakening grip of the Chinese Communist Party on civil society. The unrest has spread from street demonstrations to a general strike and shutdown of the transportation system, including the cancellations of hundreds of flights.

This social unrest will grow until China is forced to invade Hong Kong with 30,000 Peoples’ Liberation Army troops now massed on the border. This will be the last nail in the coffin of the academic view of China as a good global citizen. That view was always false, but now even the academics are starting to understand what’s really going on.

International business is moving quickly to move supply chains from China to Vietnam and elsewhere in South Asia. Once those supply chains move, they will not come back to China for at least ten years if ever. These are permanent losses for the Chinese economy.

Of course, lurking behind all of this is the coming debt crisis in China. About 25% of China’s reported growth the past ten years has come from wasted infrastructure investment (think “ghost cities”) funded with unpayable debt. China’s economy is a Ponzi scheme like the Madoff Plan and that debt pyramid is set to collapse.

This cascade of negative news is taking its toll on Chinese stocks. This weakness began in late June 2019 when the summit meeting between U.S. President Trump and President Xi of China at the G20 Leaders meeting in Osaka, Japan failed to produce substantive progress on trade disputes.

Since then, the trade wars have gone from bad to worse and China’s economy has suffered accordingly. My expectation is that a trade war resolution in nowhere in sight and the trade war issues have been subsumed into a larger list of issues involving military and national security policy.

The new “Cold War” is here. Get used to it.

Regards,

Jim Rickards
for The Daily Reckoning

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Why China’s a Paper Tiger

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Markets are still digesting last week’s Chinese devaluation that sent the Dow crashing over 700 points last Monday.

And as everyone knows by now, the Trump administration labelled China a currency manipulator.

The ironic part of it is that China has been manipulating its currency to strengthen it against the dollar.

Here’s the dynamic you need to understand…

The Chinese yuan is softly pegged to the dollar. To maintain the soft peg, the People’s Bank of China (PBoC) sells dollars and buys yuan.

That props up the yuan. It’s basic supply and demand economics.

One of the primary reasons China tries to strengthen the yuan is to prevent capital flight out of the country. If the yuan depreciates too rapidly, massive amounts of Chinese money would look to flee abroad where it can get much higher returns.

After all, would you want to hold a rapidly deteriorating asset that constantly loses value? Or if you were a Chinese investor, would you try to convert your money into a currency that holds its value?

That’s the question Chinese investors have been facing.

A capital drain could devastate the Chinese economy, which badly needs the capital to remain in China to support its massive Ponzi schemes, ghost cities and overinvestment.

That’s why the PBoC has been trying to support the yuan, even though a cheaper yuan helps Chinese exports.

That’s the conundrum China faces. It wants a cheap yuan — but not too cheap.

I wouldn’t call last Monday’s devaluation  the sort of “max devaluation” I’ve warned my readers about before. That would have been a devaluation of 5% or more in a single day, and that’s not what happened last week. I would classify it as a “red line” devaluation.

The yuan temporarily broke through the 7.00:1 “red line” dollar peg. It has since returned to normalized levels.

It’s actually ironic that China is being labelled a currency manipulator, if manipulating your currency means cheapening it.

That’s because China was manipulating its currency to strengthen it against the dollar. And when the yuan/dollar exchange rate crossed the 7.00:1 “red line,” that meant China temporarily stopped manipulating its currency higher.

If China didn’t manipulate the yuan higher, it would depreciate even more against the dollar. And the exchange rate stabilized last week when China resumed the manipulation. In other words, when China strengthened the yuan.

Welcome to the currency wars! They take on a logic all their own. In many ways it’s a race to the bottom.

I explained it all years ago in my 2011 book Currency Wars.

As soon as one country devalues, its trading partners devalue in retaliation and nothing is gained. China’s case is complicated by its desires for both a strengthened and weakened yuan.

But the ultimate reality is that currency wars produce no winners, just continual devaluation until they are followed by trade wars. That’s exactly what has happened in the global economy over the past 10 years.

Currency wars and trade wars go hand in hand. Often they lead to actual shooting wars, as I have repeatedly pointed out.

Let’s hope the currency wars and trade wars don’t turn into shooting wars as they have in the past.

But below, I show you why China is more of a paper tiger than an actual one. Why do I say that? Read on.

Regards,

Jim Rickards
for The Daily Reckoning

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EXPOSED: Another Currency Manipulator!

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Currency manipulator!

Today we point an indignant and accusing finger at the latest currency manipulator.

Let all proper authorities take notice.

The accused is not China — incidentally.

But we cannot proceed without first noting another manipulated market…

The stock market presented a distressed scene this morning.

Plunging bond yields are the explanation widely on offer (falling yields reflect a poor economic outlook).

Yields on the 10-year Treasury slipped to 1.595% this morning — lowest since autumn 2016.

The Dow Jones was down 589 points before an invisible hand intervened, stabilized the bond market… and redirected the stock market.

The index nonetheless lost 22 points on the day.

Both S&P and Nasdaq gained on the day.

Meantime, gold spins into delirium — gaining another $25 today — to $1,509.50.

But now that the administration has hung a “currency manipulator” sign from China’s neck… we are duty-bound to expose the latest currency manipulators.

Our spies have marshalled the evidence. It is circumstantial evidence, we freely concede.

It is nonetheless damning — more than sufficient to empanel a grand jury.

Who are these latest currency swindlers?

Here we refer to the dastardly Swiss.

The Swiss are currency manipulators.

Our spies inform us…

That Swiss sight deposits — bank deposits that can be withdrawn immediately without notice — surged 1.6 billion francs in the week ending Aug. 2.

This anomaly follows a 1.7 billion increase one week prior.

Add one to the other and the conclusion is clear: The Swiss National Bank (SNB) has been monkeying in the currency markets.

It has been printing francs to purchase euros. Why?

To cheapen the franc… to advantage their exports… and to lift their tourism industry.

Evidence suggests Swiss manufacturing has already sunk into recession.

And the European Central Bank (ECB) is preparing to reopen the monetary faucets in September. The ensuing flow would depress the euro.

In comparison, the Swiss franc would tower high as the Matterhorn.

It is already at its highest peak since June 2017.

And so the Swiss authorities are purchasing euros — on the quiet — to cushion the blow.

That is the case we argue today.

Here we introduce our first witness, Credit Suisse economist Maxime Botteron:

I think the SNB was intervening in the market last week — this was the biggest weekly increase in sight deposits since May 2017. This is a clear sign the SNB was active in the market.

Witness No. 2 presently enters the witness stand, a certain Thomas Stucki.

Let the record indicate Mr. Stucki is former manager of the SNB’s foreign currency reserves:

When the ECB statement was published at 1.45 p.m. last Thursday the euro lost value against the dollar, but not against the franc… Any move by the SNB to buy euros with newly created francs would bolster the single currency [euro]. It is possible that the SNB is behind this development.

It is likewise possible that night will follow day… that a dropped apple will plunge groundward… that a senator of the United States will disgrace his office.

In conclusion we summon the testimony of Mr. Karsten Junius, chief economist at J. Safra Sarasin:

“The SNB are definitely in the market.”

The prosecution rests. The Swiss are currency manipulators.

And we consider the case jolly well closed.

When will the roars of protest come issuing from Brussels?

But let us now switch lawyerly roles… and leap to the defense of a currency manipulator wrongly accused:

China.

The recent charges against China are not only false. They are precisely, exactly, 180 degrees false.

That is, China has been labelled a currency manipulator not because it has manipulated its currency.

China has been labelled a currency manipulator… because it temporarily ceased manipulating its currency.

Here is the dynamic in operation…

China pegs its yuan softly to the dollar. But the dollar packs vastly more muscle than the yuan.

In order to maintain its peg, China manipulates the yuan higher — not lower.

That is, the People’s Bank of China buys yuan… and sells dollars.

And since last April alone, the yuan has appreciated 10% against the dollar.

A 7:1 exchange ratio is widely considered the “line in the sand.”

But this past Monday China temporarily let go of the yuan… and let it slip to 6.97 (the yuan presently trades at 7.06 per dollar).

The United States subsequently labelled China a currency manipulator — for failing to manipulate its currency.

Ponder the loveliness, the blinding brilliance… the staggering beauty of the charge.

Could Mr. George Orwell have improved upon it?

We can identify another term for currency manipulation.

It is a euphemism… designed to take much of the curse off “currency manipulation.”

That term is monetary policy.

The Federal Reserve runs its own.

And it has destroyed 96% of the dollar’s value since 1913…

Regards,

Brian Maher
Managing Editor, The Daily Reckoning

The post EXPOSED: Another Currency Manipulator! appeared first on Daily Reckoning.

The Swiss Battle to Cheapen the Franc

This post The Swiss Battle to Cheapen the Franc appeared first on Daily Reckoning.

One of the crucial insights in currency trading that many investors fail to grasp is that currencies don’t go to zero, and they don’t go through the roof. That’s a generalization, but an important one. Here are the qualifications:

This observation applies to major currencies only — not to currencies of corrupt or incompetent countries like Venezuela or Zimbabwe. Those currencies do go to zero through hyperinflation.

The observation also applies only in the short-to-intermediate run. In the long run, all fiat currencies also go to zero.

Yet over a multiyear horizon, major currencies such as the dollar (USD), euro (EUR), yen (JPY), sterling (GBP) and the Swiss franc (CHF) retain value and do not go to extremes. Instead, they trade in ranges against each other. That’s the key to successful foreign exchange trading. Trading profits are the result of catching the turning points.

Jim Rickards

Your correspondent in Zurich, Switzerland, during a recent visit. In analyzing the complex dynamics of foreign exchange markets, it is essential to visit the countries whose currencies are being studied. Foreign visits offer the opportunity to meet with government officials, bankers, business executives and everyday citizens of the affected countries to gain insights that are not available through digital and media sources.

Stocks can go to zero when a company goes bankrupt. Enron, WorldCom and a host of dot-com stocks in the early 2000s are all good examples. Bonds can go to zero when a borrower defaults. That happened to Lehman Bros. and Bear Stearns.

But major currencies do not go to zero. They move back and forth against each other like two kids on a seesaw moving up and down and not going anywhere in relation to the seesaw.

The EUR/USD cross-rate is a good example. In the past 20 years, the value of the euro has been as low as $0.80 and as high as $1.60. There have been seven separate instances of moves of 20% or more in EUR/USD in that time period. But EUR/USD never goes to zero or to $100. The exchange rate stays in the range.

Turning points in foreign exchange rates are driven by a combination of central bank interventions, interest rate policies and capital flows. The old theories about “purchasing power parity” and trade deficits are obsolete.

Foreign exchange trading today is all about capital flows driven by policy intervention, sentiment and interest rate differentials.

Another good example is the Swiss franc (CHF). If you look at its exchange rate with the dollar, an exchange rate of 0.80 francs per dollar indicates a strong franc. An exchange rate of 1.05 francs per dollar indicates a weak franc. Right now the exchange rate is 0.97, which leans towards a weak franc relative to the dollar.

CHF has traded in a range of 0.87–1.03 for the past six years. One move that stands out is the spike on Jan. 15, 2015, when CHF surged from 1.02 to 0.86, a nearly 20% move in a matter of hours. CHF then backed off that high of 0.86 and declined to its more recent trading range of 0.91–1.03.

The spike on Jan. 15, 2015, was caused entirely by the decision of the Swiss National Bank (SNB) to remove a cap on the Swiss franc relative to the euro intended to protect Swiss exports.

The Swiss economy is heavily dependent on exports of precision equipment, luxury goods such as Swiss watches and food including cheeses and chocolates. The Swiss economy also depends on tourism, which is akin to a service export sold to foreigners. All of these exports suffer when the Swiss franc is too strong.

The SNB has been enforcing the cap by printing francs and buying euros to put downward pressure on the franc. The problem with this policy is that the world wants francs as a safe haven.

That was especially true during the European sovereign debt crisis of 2010–2015. The SNB balance sheet was becoming top-heavy with European debt purchased with printed francs at a time when the European debt itself was in distress.

Eventually, SNB threw in the towel and allowed market forces to determine the value of CHF. This produced an immediate spike in CHF against the euro and the dollar, which has since moderated into a trading range.

But the franc is currently at the 1.09 level versus the euro, on expectations of monetary easing in both the euro zone and the United States have set in.

So the SNB has been buying euros in an attempt to get out ahead of the curve. It’s trying to cheapen the franc to keep its exports and tourism industry competitive. You see evidence for this in its so-called sight accounts. Sight account can be transferred to another account or converted into cash without restriction.

There has been a recent surge in these accounts lately, which indicates the SNB has been actively intervening in the currency markets.

With rising market uncertainty and hot money in search of safe havens, what does the future hold for the Swiss franc?

The single most important factor in the analysis is that hot-money safe-harbor inflows are clashing with the SNB’s cheaper franc policy.

The demand for Swiss francs will be driven by the lack of palatable alternatives. Investors are increasingly concerned about sterling because of conditions imposed by the EU, Ireland and others in the Brexit process. Brexit is irreversible, but satisfying all of the demands of interested parties to achieve Brexit will weaken the U.K. economy and sterling.

Likewise, the dollar and yen are both the cause of investor concern because of out-of-control debts. The Japanese debt-to-GDP ratio is over 250% and the U.S. debt-to-GDP ratio will soon be 110%. Any ratio higher than 90% is considered a danger zone by economists.

Almost all Japanese government debt is owned by the Japanese people, so there’s a higher threshold for panic in Japan than in the U.S. The U.S. debt is about 17% owned by foreign investors who could choose to dump it at any moment. Still, both Japan and the U.S. are on unsustainable paths and have shown no willingness to tackle their debt problems or reduce their debt-to-GDP ratios.

The euro offers better debt-to-GDP ratios than Japan or the U.S. in the aggregate. However, the European Central Bank is getting ready to pursue more quantitative easing and near-negative interest rate policies. The euro is also plagued by lingering doubts about the individual debt situations in Greece and Italy, a legacy of the 2010–2015 European debt crisis.

Meanwhile, the Swiss debt-to-GDP ratio is about 30%. In fact, Keynesians complain that its debt levels are far too low!

Russian rubles and Chinese yuan are unattractive for major global capital allocators because their markets lack liquidity and they do not have satisfactory rule-of-law regimes behind their currencies.

With dollars, yen, sterling, the euro and emerging-market currencies all unattractive for different reasons, the primary safe havens for global investors are Swiss francs, gold, silver and some of the smaller currencies such as Australian or Canadian dollars.

Many investors won’t allocate to gold because of investment restrictions or simple bias. This leaves the Swiss franc first in line to absorb huge global capital flows looking for a home.

The SNB may keep trying to knock down the Swiss franc by buying stocks, bonds, euros and anything else that’s not nailed down, but in the end it won’t be enough. Global capital will continue buying francs for lack of a better alternative.

Eventually the SNB will once again throw in the towel as they did in 2015 and allow the franc to appreciate sharply.

Having a strong currency is desirable. But in today’s world outside of a gold standard, having too strong a currency can actually be a curse.

Regards,

Jim Rickards
for The Daily Reckoning

The post The Swiss Battle to Cheapen the Franc appeared first on Daily Reckoning.

How THIS Is Making the Housing Crisis Worse

This post How THIS Is Making the Housing Crisis Worse appeared first on Daily Reckoning.

It’s happened several times in the last couple of months – someone approaches me, clipboard in hand, and asks if I’m a California voter. Then, barely waiting for my response, they start asking me to sign a petition related to rent control.

The first time it happened, at my local organic market in Santa Barbara, I just politely said “no thanks.”

The most recent time, at a professional women’s surfing contest in San Diego last week, I couldn’t hold back and ended up saying a bit more to the solicitor.

And now, after hearing Bernie Sanders mention the idea during last Tuesday’s primary debate, I want to tell you a more expanded version of where I stand on the topic (and why)…

My Grandparent’s Experience

Let me first say that, like Bernie Sanders and other proponents of rent control, I’m very familiar with the plight of poor families that rent all of their lives …

My mom’s parents rented the same apartment in downtown Wilkes-Barre, Pennsylvania for more than 50 years.

Her father grew up in such poverty that he had to drop out of high school to go work in the coal mines.

Her mother graduated from high school but stayed home to take care of the kids.

They were Depression-era people, conservative with what little money they had, and they never made the leap to home ownership.

After leaving the mines, my grandfather made his living doing all kinds of odd jobs – car mechanic, electrical work, etc. – including helping out his landlord whenever needed. His rent still went up on a regular basis. Even when my grandmother was living in the apartment alone in her early 90s, the landlord was talking about another increase.

Would it have been nice if their rent, established in the 1950s, could have only gone up 3% or 4% a year so long as they stayed in that apartment? Absolutely.

Still, they never complained. They knew prices for things went up over time. They cited a few times in the past when they might have been able to buy a house in the neighborhood but just couldn’t mentally commit to the idea. Nor did they like borrowing large sums from banks.

My grandmother died in that small apartment, with not very much to her name.

Now, let me tell you another story…

Where Rent Control Goes Bad

As my grandmother was into her 80s, I was moving into New York City and looking for apartments.

I was working for Standard & Poor’s and making a good salary, but hardly anything exorbitant. My one-bedroom apartment just off Wall Street was $2,300 and was subject to market rate increases going forward.

My boss, perhaps 30 years older than me, lived a couple neighborhoods away. He obviously made more than me but he’d been in New York for a long time and his apartment – twice the size of mine – was under rent control. I don’t know exactly how much he paid but I would guess a third of my rent for twice as many bedrooms. He also owned a vacation home outside the city.

Meanwhile, there were plenty of rent-controlled people charging large amounts of money to let someone move into a vacant bedroom while their landlord received nothing.

I also knew someone who lived in another state almost all of the year but maintained a rent-controlled NYC apartment as a little getaway (lying about residency in the process).

This is just a little taste of what I saw, but the big-picture was pretty easy to see – rent control largely rewarded people who got there first, regardless of their financial status … it was easily abused … and it did very little to help newcomers or anyone looking to move from one place to another.

There is also no doubt that many landlords do everything in their power to screw over tenants, especially in a place like New York City. And from what I saw, rent control didn’t help that situation either … it merely discouraged building owners from improving their rent-controlled properties any more than was absolutely necessary.

Indeed, New York City just changed a bunch of rules related to rent control and we’re already hearing about landlords bailing on big capital investments.

But you don’t have to accept my personal experience or anecdotal evidence.

The academic research is pretty decisive that rent control doesn’t work, whether you’re talking about New York or Paris.

As Reason noted in a recent article:

“Brookings Institute associate professor of economics Rebecca Diamond did a recent review of the literature on rent control, finding that ‘Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood.’ The reason is simple and boils down to the law of supply and demand. While some of the people renting may benefit from rent control by removing some of their risk, it also gives landlords an incentive to alter their supply of rental property.

“They have several options based on the circumstances. First, they may withdraw their properties from the rental market to sell them as condos. Former George Mason University Chairman of the Department of Economics Donald Boudreaux summed it up nicely in a 2006 letter to the editor of The New York Times: ‘By decreasing the profitability of supplying units occupied by renters, these controls spawn condo conversions and prompt builders to construct fewer rental units and more units for sale to owner-occupiers. People who can’t afford to buy housing are unnecessarily disadvantaged.’ Landlords may also stop investing in maintenance, which, over time, may lead to neighborhoods with many run-down properties. The bottom line is that rent control never increases the supply of affordable rented housing.”

What about this legislation they’re trying to pass in California?

Well, after I explained that I recently purchased a million-dollar home and would never want to cap my own future rental potential, the solicitor at the competition assured me that it would only apply to landlords who own three or more properties.

At that point, I didn’t bother to explain that I also recommend investing in companies like Real Estate Investment Trusts (REITS) that are essentially corporate landlords.

It was clear we simply had different ideas about capitalism and free markets.

If Rent Control Doesn’t Work, What Will?

From my perspective, the person who took a chance on New York City back in the 1970s – when it was a far cry from its current look and feel – deserves to get market rates for that money invested and risk undertaken.

As did my grandparents’ landlord…

As do I for working hard, and saving enough to buy a house in Santa Barbara.

Can you imagine what it would be like if we suddenly capped the amount of dividends that stocks could pay to their investors?

Well, that’s exactly what rent control does with real estate.

Perhaps the biggest irony is that some of the same people here in California who cry for more affordable housing are the very same people who don’t want garages converted into auxiliary dwelling units, Airbnb listings allowed in residential neighborhoods, or high-rise buildings in land-constrained areas.

Look, housing affordability is a complicated issue. In highly desirable locations with little room for further development, it’s doubly complicated.

But I would much rather see solutions that start with increasing supply, even if it’s something small like simply allowing existing homes to be partitioned into several micro houses. At least it’s a start to fixing a long term problem and not a band-aid that will fester given enough time.

Thinking we can wave a magic wand and keep prices in check through artificial rent controls isn’t going to cut it.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post How THIS Is Making the Housing Crisis Worse appeared first on Daily Reckoning.

What I Learned from Eating Candy

This post What I Learned from Eating Candy appeared first on Daily Reckoning.

I don’t remember exactly how old I was, but it was either late single digits or early doubles.

I was looking through the local newspaper and saw a big, bold ad. Or maybe my parents showed it to me… I can’t remember that part either.

What I do remember is what the ad said, and how exciting it was to me at the time: Topps, the famous baseball card and candy company, was looking for taste testers.

More specifically, they wanted children taste testers. It was a one-day job. You’d go there, taste some sweet stuff, and get paid to tell them what you thought.

My brain was reeling. Paid to taste candy! Are you kidding me???

This ended up being my first paid job.

I can still picture the long wooden table. A bunch of us were sitting around it, with an adult at the head. We tried different things one at a time – gum, hard candy, and all sorts of other confectionery products.

After giving our opinions, we walked away with even more candy and $5 each.

The more I think back on it, the more I realize it might have also been my best job ever.

The Lesson:

A job isn’t just about the raw pay. It’s about the other benefits … including doing something you enjoy.

The Gas Station

Of course, once I turned 16, I went out looking for a “real” job.

As a newly-minted driver, a gas station seemed like a logical place to start. Heck, my dad worked at one when he was a young man and the hours were pretty flexible.

I saw one of the local chains was looking for attendants so I applied.

A few days later, I was heading out for my first real job interview. I put on a collared polo shirt … a nice pair of khaki pants … and, unlike the present day, made sure my hair was neatly trimmed.

Just like the Topps gig, I can still remember what the room looked like. I was sitting in a dark, cramped office across from a guy who wasn’t nearly as dressed up as me.

After a brief introductory conversation, which I thought went well, he surprised me by saying, “Do you really think pumping gas is the right job for a kid like you?” 

A kid like me? What did that mean?

I didn’t have to wait very long for the answer. He basically went on to explain that I was a little too polished for the job. It was messy, menial work and I probably wouldn’t want to do it very long.

He went on to say something about I would probably be happier as a cashier inside one of their other stations but I was already insulted.

Here I was, trying to show respect and suitability by dressing up for an interview and this guy was going to deny me the job because of that? What, because I was too qualified?

I ended up working as a line cook at a local pizza and pasta restaurant. It was just as hard and messy as the gas station job I was turned down for. It didn’t pay more, either.

Still, I showed up every day on time and did all the tasks – everything from frying wings to banging out cheesesteaks – to the best of my ability just as I would have done handling the pumps.

It was the same thing with other “menial” jobs I did during my school years – everything from working as a bouncer at a nightclub to running the counter of a pool hall.   

The Lesson:

People are going to judge you – often because of your appearance, mannerisms, or background – and it won’t always be accurate. All you can do is move on and be true to yourself.

My Stint in Government

My senior year of college, it was time to start thinking about an actual career.

My Dad, a state employee, encouraged me to take the civil service exam. It was the first step toward all types of different government jobs, and he was sure he could help me get a position if I did well.

While working for the government wasn’t exactly my ideal path, I really liked taking tests. I aced the thing without a problem and ended up with a job interview in the state capital.

Everything was going great with the interviewer. 

Then, a question …

“What would you say to someone if they were criticizing state workers for getting too many days off?”

Huh?

I literally had no idea why this was being asked and it was just about the farthest thing from my mind.

I remember giving some kind of diplomatic response but it reinforced what I already had thought … that government employment probably wasn’t for me.

I ended up getting myself a job on Wall Street instead, where nobody worried about getting accused of having too many vacation days. Within a couple years I was making several times as much as the state job would have paid.

The Lesson:

Things almost always work out for the best if you choose your own path.

Back to Middle School

Eventually, my wife and I were ready to leave the city for good.

I thought about switching careers and doing something a bit more magnanimous. So I applied to become a teacher at an underserved school in Florida through the Americorps’ Teach for America program.

After a few steps, I was invited to come down to Florida for the final part of the hiring process where I would design and teach a sample lesson in front of other candidates and evaluators.

You were able to choose any grade from first through sixth. I picked sixth grade English. I designed a lesson around the haiku, a very specific form of Japanese poetry.

It was an ambitious undertaking – especially once I heard some of the other candidates walking the group through second-grade math problems – but I walked away feeling really good about my performance.

It wasn’t just me.

After the presentation, I had my final interview before flying home. At one point, the woman said something about coming back down to start the job. “Notice I said WHEN you come back down to start the job, not IF,” she told me.

As you can guess, I didn’t get offered the job and I was never given any explanation as to why not.

So, instead of teaching sixth graders about Japanese poetry, I went on to start teaching regular Americans how to better invest their money … something I’m still doing today, more than a decade later.

It suits me. It’s fun. It’s satisfying. I wear whatever I want.

And nobody asks me about how many vacations I take.

The only downside is that I have to buy my own candy.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post What I Learned from Eating Candy appeared first on Daily Reckoning.

Rake in Summer Savings the Lazy Way

This post Rake in Summer Savings the Lazy Way appeared first on Daily Reckoning.

Summer is here, and it is HOT.

Mind you, this week has been a bit of a reprieve from the oppressive heat, but last week was certainly a scorcher.

It got me thinking. 

When temperatures start rising, so do electric bills.

Obviously, where you live plays a big part in how much you end up paying on your monthly electricity bill.  Some places like Southern Louisiana for instance, have cheaper electricity, but scorching hot summers raise costs compared to more energy-expensive states like Northern California, where the climate is more temperate.

But no matter where you are, I have some tips that can help you save on your monthly bills.

The average US household spends about $112 a month on electricity according to the US Energy Information Administration. And a large portion of that is based on heating and cooling usage.

Is it worth moving to save a few bucks on electricity? Possibly.

Especially when you factor in “energy choice” states like Connecticut, Delaware, Washington D.C., Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas where you can negotiate cheaper contracts with providers.

But that’s a conversation for another day.

Today I’m giving you the lazy-man’s way to save on electricity.

No state hopping. No having to buy new energy-efficient appliances. No installing smart programmable thermostats. No extreme home makeovers to save a few hundred bucks on your electricity bill.

Why?

Because most of the big savings you’ll find on your monthly electricity bill don’t require a lot of money or investment.

These are my top 10 ways to save on electricity every month – the lazy way.

1. Fill the Cracks

Unless your home is brand new, there’s a good chance your windows and doors are leaking money.

Fill these cracks with caulk and weather-stripping to reduce drafts and your electric bill will drop dramatically.

According to Consumer Reports, sealing leaks in your home can reduce energy costs by 15 to 30%.

2. Use MAJAPs at Night

When it’s hot outside, avoid using your stove, washing machine, clothes dryer and dishwasher. All these major appliances (MAJAPs)  draw a lot of energy and typically produce heat.

This in turn causes your AC to work harder trying to maintain your home’s temperature. Also, depending on where you live, your electricity provider could offer reduced rates at different times of day.

Typically evening usage and weekends are cheaper than daytime during weekdays.

3. Use Ceiling Fans

Even if you have a central HVAC system, consider turning on your ceiling fans to help cool and heat rooms faster.

Fans push hot and cold air through your whole house so you can reach your room’s desired temperature a lot faster. Ceiling fans can save you up to $438 per year.

4. Wash Your Clothes in Cold Water

There’s no excuse for not washing the majority of your clothes in cold water.

Almost every detergent brand now dissolves just as well in cold as hot water at no additional cost and cold water proves to be less damaging to your fabrics.

Estimated savings for washing your clothes in cold water is around $150 per year.

5. Skip the Electric Dryer

If you have a yard and can set up a clothesline, do it.

But if space is limited or you’re worried about allergens, buy a few clothes drying racks off Amazon and hang dry heavier items like towels, jeans and sweatshirts.

Line-drying reduces average monthly electricity costs by $15.

6. Use a Slow Cooker

Avoid using your MAJAPs during the day but if you really want to cut costs, skip cooking in your oven altogether and use a crock pot or instant-pot.

Crock pots heat less of your house than traditional ovens and the best part is they require less work. Most crock pot meals are set it and forget it so you’ll save money and time using a slow cooker more often.

7. Reduce “Electricity Vampires”

Did you know 75% of the energy used by home electronics is consumed when they’re in standby?

These electricity vampires include TVs, computers, cable boxes, cellphone charging stations, and appliances – basically anything that holds a time or other settings.

Consumer Reports says that you can save $25 to $75 each year just killing these phantom electronics.

The easiest way to kill electricity vampires is to use power strips. Make it a habit of shutting off the strips between uses or buy a smart power strip that automatically shuts off when your electronics go in standby mode.

8. Turn Off Lights.

This one should be obvious.

Turning off lights you aren’t using or in rooms you’re not occupying saves a considerable amount of money every month.

Turning off a single 100-watt light bulb from running constantly saves around $131 per year.

If you really want to boost savings, switch all your lights to LED.

9. Raise/Lower the Temperature When You’re way

In the summer, raise your thermostat when you leave the house and in the winter lower it. There’s no sense cooling or heating an empty home.

Programmable thermostats are ideal for this but if you don’t have one, don’t think you have to go out and buy one.

Changing the temperature manually works fine too, it just takes more diligence.

10. Clean Air Filters Every 30 Days; Replace Every 3 Months

When your air filters are dirty your HVAC system has to work harder, which ends up costing you more money.

A good habit to get into is regularly cleaning and replacing your home’s air filters. Clean every 30 days and replace every 3 months is a good rule of thumb.

It might seem like your savings will be eaten up by the cost of replacement filters but that’s not the case.

Most people see savings from $20-$40 annually following this simple hack.

All of these hacks should add up to noticeable savings and don’t require much time or money.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post Rake in Summer Savings the Lazy Way appeared first on Daily Reckoning.