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FINANCIALLY AND HEALTH UNCONSCIOUS…

When I lived in Maryland, I used to drive to Giant supermarket every day after work, unconsciously. Sometimes, I would sit in the parking lot wondering why I was there before eventually getting out of the car and going to buy something to eat.

Was I just a creature of habit, or was I subconsciously programmed to spend money every day regardless of my needs?

According to data from the Bureau of Labor Statistics, the average American spends around $21.17 per day on food, with roughly $11.95 going towards groceries, and $9.22 on eating out.

The average cost of commuting is around $23 per day, which includes factors like gas, car maintenance, and parking fees, depending on where you live and the mode of transportation.

So, if we analyze our daily spending of $44.17 on an annual basis, and then put that number ($16,122.05) into a compound interest calculator earning 10% a year for 30 years, the number will astound you.

If you think about it, your basic daily existence is costing you $2,917,178.94 over three decades, and because it seems so far away—most people are totally, financially unconscious of the fact that they are throwing good money after bad money.

Not only are they robbing their future selves of a quality retirement, but the fact that they are eating like a dump truck will almost guarantee they don’t see it.

We have all heard the saying, "Health is Wealth." You can save all the pennies you like, but if you aren’t taking care of your body and eating to live, you can’t even save yourself.

Out of all the diseases you can have, the easiest disease to cure in your life is the one from not eating right. Once you have health you can enjoy your wealth.

Now let’s get to work. Assess your total spending down to the penny. Simply go through your bank statements for the last six months and identify useless spending habits. Find the excess cash and earmark it for either paying off debt or your investment account.

Once your debt is paid off, you will have more free cash flow to invest in your future.

To keep you on track, pull out the compound interest calculator by Moneychimp and calculate based on your free cash flow—what it will add to your retirement if invested correctly.

Next, research various ETFs by Vanguard, as they have some of the lowest expense ratios versus performance you can find. Once you have settled on your investments, the key will be what I call the no-look pass. This is where you transfer the money into your investment accounts as soon as you get it.

If you don’t have time to think about all the things you can do with the money you are less likely to spend it on non-money-making activities. Speaking of which—write out your financial road map…this will include budgeting your meals, expenses, maintenance, leisure time, and more importantly your investments.

Figure out the percentage of how much of your income you are dedicating to your investments.

Play with the scoreboard and keep track of the game. Treat each dollar like a star athlete and keep them on the court, scoring points that will compound over time. Follow the same process with your food habits and create a food road map and health regimen. Bench all bad habits that affect your health and retirement.

Lastly, play with the score clock—we get 29,200 days if we are lucky enough to see 80 years of age.

So, plan to live instead of live without a plan. Keep your commitments to your family as there is nothing more meaningful than a kept word. Stay disciplined even when times are the hardest; you will get the most gains from consistency rather than complacency. And never forget that the people we love are counting on us.

YESTERDAY’S MILLIONAIRE IS NOT TODAY’S MILLIONAIRE…

I heard someone at the poker table talking loudly—bragging that they made six figures as if they were looking to be applauded, but the funny part is no one cared.

Confident people who enjoy a high income don’t broadcast over the loudspeaker. 50 years ago, a 100k salary was considered to be the upper-class income of the wealthy.

Today, it’s status quo. Inflation has destroyed the dollar’s value to the point where, if you are ignorant about how to grow your money, you will suffer a sobering reality if you are lucky enough to see old age.

Since 1940, the dollar has lost 96% of its value.

• To put it into perspective, if you had a liquid net worth of 1 million dollars in 1940 you could have purchased 340 homes at the average cost of $2,938.

• In 1950, the same million dollars lost two-thirds of its buying power, buying only 135 homes at an average price of $7,354.

• The 1960s saw a million dollars, reducing its purchasing power, yet again buying only 84 homes amounting to $11,900 per home.

• The 1970s pushed home ownership into the $17,000 range, reducing a million dollar’s purchasing strength to 58.8 homes.

• In 1980, inflation elevated homes to $47,200, turning a million dollars into only 23.4 homes.

• In the 1990s, a million dollars could only purchase 12.6 homes at $79,100, a significant reduction from the decade prior.

• Once 2000 rolled around, a house was valued over 100k, with the average home being $119,000, reducing a million dollars into 8.4 homes.

• In 2010, sad to say, a million dollars could only purchase 3.63 homes at a rate of $275,300 per home.

• And lastly, in 2024, a home’s value increased to $419,200, decreasing a million dollar’s purchasing power to 2.4 homes.

So needless to say, yesterday’s millionaire is not today’s millionaire, and depending on your age, I would dare say, based on today’s standards having only 1 million dollars of liquid net worth makes you a broke millionaire.

Let’s face it, having a million dollars today doesn’t look or spend the same as it once did in the past. Gone are the days when millionaires were viewed as super financial heroes, driving status symbols or carting Louis Vuitton baggage into the Ritz Carlton hotel.

Today’s millionaire is an average-looking next-door neighbor who enjoys an income of at least 200k a year, who believe it or not, is coping with the same inflation versus buying power just like everyone else.

Although the U.S. has more millionaires than any other country in the world, we also have one of the highest costs of living in the world.

And costs are rising rapidly as compared to historical pricing, so if being a millionaire had your egos inflated, inflation just deflated them.

Look at the cost of everything from the groceries we buy, the cars we drive, housing, and energy costs.

According to the ALICE Essentials Index, which tracks the costs of basic household essentials—they have increased at a faster pace than the CPI nationwide since 2007.

Costs for both the CPI and the ALICE Index measures increased at a faster pace following the COVID-19 pandemic, peaking between 2021 and 2023.

During this period, the ALICE Essentials Index increased at an annual rate of 7.3% compared to 6.1% for CPI — both much faster than the annual rates from 2007 to 2010 (3.3% annual increase for the ALICE Essentials Index and 1.7% for CPI).

This translates to basic necessities doubling every 9.8 years based on The Rule of 72.

For more clarity, could you imagine eggs doubling on the high-end to 20 dollars a carton? Speaking of which—it makes me question if Avian flu isn’t engineered to make us pay more for eggs.

The only one that loses in this transaction is the consumer.

The stores charge more based on what the producers charge, and I’m sure it’s not a dollar-for-dollar translation, meaning they are charging padded costs.

While society has this big-picture concept of what a millionaire can afford, I would argue that even on a basic level, millionaires are feeling the pinch as inflation has truly leveled the playing field.

I would also argue that even if you held a million dollars in the bank, based on 3% inflation, that million dollars in 10 years would have a purchasing power of $744k and in 20 years $552k.

So, unless you can outrun inflation, you better start putting your money in the gym and start working it out. If not, you and your money will die a slow death.

THE DEPARTMENT OF CAPTIAN (DOGE)…

The Department of Efficiency led by tech billionaire, Elon Musk, has all of Washington DC Democrats’ panties in a bundle.

It’s no secret that Washington loves its pork barrels, but not in a thousand Mondays would they ever think that today’s modern equivalent of Tony Stark would be barreling through their dirty laundry, carrying a canister of gasoline and a match.

He is tasked with finding the inefficiencies and cutting the wasteful spending, but what he has uncovered has Democrats squirming in their chairs like five-year-olds that just peed on themselves.

What did they expect?— some rank-and-file pencil pusher to take a glossary view and give Washington a passing grade?

This is the co-creator of PayPal, the founder of Starlink, The Boring Co, Nuerolink, and the little company named Tesla. Elon Musk didn’t just build companies; he reimagined the impossible and executed at the highest level.

Now, he is in charge of the biggest scavenger hunt in history, and he is exposing Washington DC’s accounting practices and how politicians have been using the government’s checkbook for political favors and as an infinite wealth fund.

He has tapped some of the brightest minds to put together DOGE—at least three individuals associated with Palantir or its cofounder Peter Thiel were involved in an online recruiting effort for DOGE late last year.

It has been less than 30 days and Elon has identified and canceled leases on government buildings that weren’t being used (wonder who owned the building). He has allegedly uncovered that social security has been paying benefits to a dozen people listed as 150 years of age.

And nothing is off-limits. Trump has unleashed Musk on the Department of Defense and other government agencies, such as the Department of Veteran Affairs, the Department of Education, the U.S. Treasury Department, the Federal Emergency Management Agency, and the National Oceanic and Atmospheric Administration, among other agencies.

The most amusing thing is that DOGE pops up like an impromptu proctologist exam ready to dig into each agency’s anal cavity unannounced.

DOGE is like a highly skilled cosmetic surgeon with the ability to transform the most heinous appearance into a piece of high-end efficient art.

Here are some of its latest work and targets:

1. The department terminated 89 contracts totaling $881 million.

2. One contract was paid $1.5 million just to observe mail and clerical operations at the mail center.

3. The termination of 29 DEI training agents totaling $101 million.

4. The Department of Agriculture terminated 18 contracts for central gender assessment totaling 9 million.

5. Across 35 government agencies, 199 contracts were terminated saving $250 million (contracts for Asia Pacific Sri Lanka climate change and adaption and resilience coordinator for forest services).

6. The Social Security Administration terminated its contract for the Gender X initiative marker and removed all gender ideology from all public-facing applications—this saved 1 million dollars.

And they are barely getting started. It’s been stated that approximately 1 billion dollars a day has been saved since DOGE has been in action—although there is a lot of controversy surrounding DOGE, like the focus on the Agency of International Development, as a target for savings.

The agency was created in the 1960s to deliver aid around the world, particularly to impoverished and underdeveloped regions. The fact that it operates in 60 nations and employs 10,000 employees makes the world think of its disbandment as cruelty.

But the intention is not to eradicate the agency, just the excess fat that allows for the camouflage of excess spending disguised as great intention. President Trump signals that the agency may be absorbed by the State Department.

Trump ran on lowering taxes and government efficiency, so hate it or love it, it’s time to cut the fat. I guess the days of special interest projects in Washington are long gone, at least for the next four years, unless J.D. Vance wins the next race…lmao.

ONE MAN’S TRASH IS ANOTHER MAN’S TREASURE

It never ceases to amaze me—watching unseasoned investors throw out the baby with the bath water. The excuses always seemed both illogical and illegitimate as to why they purchased and why they sold.

When asked, how did they arrive? The conclusion to buy the stock always seemed to originate from social media or a friend who got the idea from social media. There is an old saying on Wall Street, once the common folks start buying a stock the smart money has already been made.

There is a price you pay for unqualified and unvetted advice. The first cost is insecurity because the lack of mental anchoring to solid fundamentals almost guarantees that the minute turbulence hits your plane, your confidence will take a nose dive.

This is ignorance that places you inside a glass house built strictly on emotions. And the reality is, Wall Street knows this, as there is always an algorithm for whatever negative emotion that will profit them.

Once the stock hits, that emotional mental breaking point sending you spirally out of control—you will respond unconsciously like Pavlov’s dog to the bell; the only difference is there will be no positive stimuli.

Instead, your emotions will rage as if you are suffering from claustrophobia trapped in between a moment of irrationality and financial insanity screaming, let me out of this trade!

It almost never hits the unseasoned retail investor that stocks go down for a reason. In some cases, it’s based on the individual performance of the company, and in others, it’s a seasonal or particular economic climate.

Selling a stock just because the market is down, is never a good idea. If the entire market is down what makes your stock so special that it should deserve special negative attention, other than the positive action that comes from discount shopping?

There are market conditions that may be past your control or understanding that have nothing to do with your individual investments. For instance, very often the markets may find themselves being over-bought and over-sold.

When the market is oversold, stocks break past the 30 RSI threshold as opposed to breaking above 70 RSI in an overbought market.

This in most cases is a great area to purchase in, but very often the pain of an imaginary loss is too great to bear. Meaning—you only lose or profit when you sell.

In an overbought market, all stocks are subject to correction. But this is overstating the obviously

What’s more important is why are we overbought and what market conditions got us there as opposed to taking the loss at the first sight of red. Red to a seasoned investor is an opportunity to profit on investment over the long term as one man’s trash is another man’s treasure.

Just like volatility provides opportunities for institutional traders to find liquidity, these are the same opportunities to find long-term profits.

The only difference is that it’s not a short-term trader’s gain. Here’s why. A short-term trader or unseasoned investor may relinquish the position based on risk management or emotional instability before the stocks reverse trend.

It’s been my personal experience that nothing goes up or down in a straight line, but once it breaks its trend lines it could take up to 90 to 180 days or 2 quarters to get back on track.

This can be viewed in two totally different mindsets. The first is to sell and wait for the stock to turn around or not.

The second is based on more information. If you are a seasoned long-term investor, chances are you have done the research that gives you conviction. If this is the case, it becomes a matter of reverse psychology.

Instead of…how long am I down? The question becomes a matter of…how much time do I have to accumulate this position at this level?

So, in this case, it could be 30 days, 90 days, or even 6 months. This works well for those who are using the Dollar Cost Average Method (DCA), Why? Think about it. How much can you buy at any one time?

A person may invest $500 dollars a month, but over 6 months that’s $3,000.

This allows for a brief period of accumulation, allowing them to size up the position so that not only have they averaged their cost down or up depending on ownership cost basis, but they have built a bigger base.

Once market conditions change, instead of selling at a loss they have the potential to hold a position at a nice profit. Just remember, markets are seasonal, but great fundamentals are forever.

HOME INSURANCE THE NEW CRIME SYNDICATE…

Was it a matter of greed, overzealousness, or just another robber baron, trying to corner the market?

After the pandemic when most property and casualty insurance carriers were fleeing fire-prone areas in California, Jake from State Farm was taking names and getting his numbers, covering every home regardless of the type of risk.

State Farm was undercutting the market, and in some cases charging 60% less premiums than other insurance companies.

By 2022, they acquired more than 20% of California’s homeowners insurance market, crushing all competitors, setting them up for a huge 2023, collecting more than 2.7 billion dollars in premiums—a third higher than other carriers and 70% higher than five years prior according to A.M best.

Things began heating up behind the scenes when State Farm actuaries began warning that the lemon wasn’t worth the squeeze.

For example, State Farm, when they should have been collecting 20k for annual premiums, was charging the bottom basement pricing of 6k, which wasn’t enough of a premium to cover the risk, and the actuaries were sounding the alarm.

Even its outside consultants were screaming that they were running the huge risk of a disastrous fire, devastating the California market.

In just months before the State Farm mysteriously said it would drop 30k homeowners with 9,500 of the homeowners being in the area that suffered homes burned down to their chimneys, including the celebrity-infested Pacific Palisades, California area.

Some homeowners were non-renewed weeks before the fire forced them to go to the government’s insurance of last resort, The FAIR plan.

The FAIR plan doesn’t grant great coverage, and it is often very expensive. And it turns out, based on the amount of damage, The Fair Plan, the government’s insurance. may need bailing out.

January’s fire killed 29 people, burned 16000 homes, and caused approximately 30 billion in damage.

Now here is where it feels predatory and grimy. State Farm not only canceled 72,000 policies in fire policies in California in 2024, but it split off its California State Farm subsidiary as a separate entity to insulate itself from catastrophic losses.

According to a state filing, their California subsidiary is expected to run as a stand-alone, without help from the parent.

Now keep in mind that State Farm has a liquid cash reserve well into the hundreds of billions and over 90 million customers, making it the biggest insurance carrier in the nation.

In California alone, State farm had a million home policies.

Now here is the rub. In an effort to corner the market, California has been in the red for nine years, and for every policy dollar collected in premiums, they were said to have spent $1.26 with over 5 billion in underwriting losses.

As a homeowner, do I even care what your P&L looks like, especially when you had no problem for years collecting my premiums?

The answer is a raging, hell no. Everything was hunky dory when my premium payments created a continuous flow of revenue.

Now, when it comes time to put up or shut you turn coat and run off like a thief in the night, trying to escape all accountability and responsibility.

If this is not spitting in the consumer’s face, what is?

To make matters worse, Governor Newsom had to issue an order to protect fire victims from predatory real estate speculators.

This wreaks of capitalism at its nastiest. Not only do the insurance companies kick you when you are down, but the predatory investors try to steal what’s left of your torched land from beneath your feet at pennies on the dollar.

It makes you question the establishment’s basic structure because on one hand insurance is mandatory when you carry a loan, and on the other hand, it isn’t mandatory for the insurance company to pay out. If this isn’t organized crime what is?

This is a sad fact, as many of those folks were not wealthy; although we can’t be insensitive to anyone’s loss, no one sheds a tear for the wealthy in these situations.

All concern immediately goes to those whose grandparents and families who lived in those homes for generations, who are now left without a home, no insurance and no money and can’t afford to rebuild.

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Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report