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Archive for November, 2011

What is Your Position on Inflation?

If you read Monday’s post about the movie, In Time, you know that it is a futuristic thriller about time as the ultimate currency.  I won’t recap the post from two days ago, but instead want to highlight one of the scenes from the movie.  After Will and Sylvia had escaped the wealthy time zone and were running from place to place in the ghetto of Dayton, Will becomes discouraged.  They had been robbing banks and handing out the time (money) to the poor.  Will of course realizes that ultimately their efforts are futile.  He tells Sylvia that the rich would simply raise the prices of everything and the cost of living would increase.  I immediately thought to myself, “BINGO, dude!”  That is inflation!  Which brings me to today’s question and discussion–

What is Your Position on Inflation?

Now I am not talking about a political or philosophical stance on inflation.  I am talking about how you will be able to respond to an increase in the cost of living.  Are you in a hopeless position like the residents of the ghetto?  Or are you in a position to raise the cost of living of another person and profit from inflation?  Or are you somewhere in between?  And perhaps most importantly, which direction are you going?

Darwinian Capitalism

It doesn’t matter what social or economic model you most favor.  The reality is that there have been and will always be different social and class structures regardless.  Look at Libya, the former Soviet Union, the Roman Empire, Japan, the United States.  It doesn’t matter.  There will always be owners and renters, borrowers and lenders.

Even if you took all of the world’s wealth and split it up precisely evenly among all the world’s 7 billion inhabitants, by the next morning, there would be differences again.  Some might want to spend some of their money to get a particular food that they like.  Others might want to move closer to the mountains or the beach and be willing to pay extra to live there.  Others might be a buyer or seller of the second oldest profession and so services would have been exchanged for money.  The bottom line is that human nature will always be about fulfilling desires and trading money or time or possessions to get that done.

Back to the Question at Hand

When the price of gasoline increases from $3.05 to $3.35 in an afternoon, do you cringe?  Or do you own Exxon Mobil stock so as an owner you know that you benefit from higher prices?  When I first saw that yesterday, my initial gut reaction was to cringe since I was so hoping that I would see gas below $3 per gallon this winter.  But once I thought about it, I realized that this might in fact be neutralized by some of the investments in my retirement portfolio.

Do you own the shelter over your head?  Or are you worried that your rent will go up forcing you to move?  Do you own farmland or grow a garden?  Or do food prices dictate what you eat?  Can you change your own oil or fix your own sink?  Or do you have to wonder how it is that a plumber can charge so much?

So think about it!  What is your position on inflation?  Does the cost of living have you by the throat, or can you get the upper hand?  Are you stuck in Dayton or moving toward New Greenwich?  Feel free to share below.

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29 comments - What do you think?  Posted by Cash Flow Mantra - November 30, 2011 at 5:00 am

Categories: Investing, Spending   Tags: , , , , ,

The Movie “In Time” and Occupy Wall Street

This past weekend, my family and I watched the movie In Time starring Justin Timberlake and Amanda Seyfried.  It is a story about a futuristic earth in which time has become what money is today.  Essentially everyone grows and lives until 25 years of age at which point a clock under the left forearm begins counting down one year’s worth of time.  From this point on, “Darwinian Capitalism” takes over where those who can acquire more time can live longer and those who can’t end up dying early.  In other words, the rich can be immortal while the poor die.  For a more complete synopsis of the movie, see its Wikipedia entry.

Commissioned by Occupy Wall Street?

Had I not known that the movie had to start filming last year, I would have sworn that it was written with the Occupy Wall Street movement as its primary backer.  Obviously the amount of wealth inequality has struck a nerve in Hollywood as well since the antagonist of the film is Philippe Weis who is essentially a time “banker” who sets interest rates in the ghetto at 30% and above.  He has accumulated several million years at the expense of the poor and lives in New Greenwich.

Of course, the poor guy from the ghetto of Dayton (poor manufacturing Midwestern town in Ohio) and rich guys daughter fall in love and he explains the inhumane nature of the world, and they go on a futuristic Bonnie and Clyde meets Robin Hood quest to shake things up.

Overall, I thought it was an interesting story with a message that is especially ringing true in these times.  It certainly got me to thinking instead of simply sitting back and being entertained.  So what are some of the things that I thought about while watching and afterwards?

My Broader Social Thoughts

1.  There are nice people and evil people in all economic classes.  Obviously the banker has made his fortune by exploitation of the poor, but not all of the rich get rich by deceptive means.  Some actually enhance the quality of life and many people pay for those enhancements.  Henry Ford and Steve Jobs immediately come to mind.  I feel that they deserve to be rich due to their products’ impact upon society.

In the movie, one of the rich comes to the ghetto since he is sick of living.  He is buying drinks in a bar and about to get robbed by the thug of the story who preys on others in Dayton.  Our protagonist, Will Salas, helps this guy escape and behaves honorably telling the rich guy that he won’t steal any of his century of life despite having little more than a day.  While asleep, this time is transferred by the rich guy to Will who encourages him not to waste the time.

2.  The price of admission increases along the economic ladder.  Once Will discovers that he has all of this newly found “currency”, he decides to go to the time zone of the rich.  Each border that he crosses requires a progressively higher toll to get into the next zone.

Each step of the economic ladder that we climb seemingly requires a more expensive car, larger house, finer clothing.  We feel that we have to keep up with our neighbors.  The price of admission goes up and up until we reach the point of billionaires striving for the biggest yacht.  I thought it appropriate that this was depicted in the movie, but it was subtle and lost on many I suspect.

3.  Sometimes to become wealthy, you have to take a risk.  After arriving in the rich enclave of New Greenwich, Will takes his 100 years and parlays that stake into over 1000 by playing poker.  Of course, when he does it comes down to one hand in which he is “all in” save for a few seconds.  Gotta love the cinematic drama!

Of course, real entrepreneurs that become wealthy have sold shoes from the trunk of their car (Philip Knight of Nike) or borrow money to open a store (Fred De Luca and Peter Luck of Subway).  Obviously, there are many other stories but most of the successful ones have some element of risk involved.

4.  Money doesn’t buy happiness.  The rich are so afraid of inadvertently getting killed that they can’t enjoy their accumulated time.  Sylvia Weis, the banker’s daughter, has been prohibited from swimming in the ocean by her parents because of the risk of injury and death.  The rich display their cars rather than drive them and have guards constantly present.

In real life, enough said.

5.  Time is money.  The whole context of the movie is that time has become the new currency.  But is it really any different than today?  How long do you have to work to make that mortgage payment each month?  How much of my life have I given to VISA?  Am I truly any different than the indentured servants of the middle ages?  Probably not.  I just have air conditioning and an iPod.

There were some other thoughts that I had from the movie, one of which I want to save for Wednesday’s post and develop more than these but I think you get the idea.

In the meantime, did you see the movie?  It doesn’t seem like many people did although I was surprised to see about 20 people in the theater.  I figured we would be the only ones since it has been out for almost four weeks.  I bet it will be gone soon if not already.  Anyway, it is an interesting storyline, and got me to thinking more than many movies.

Readers:  Did you see the movie?  Any thoughts based upon the basic premise?  I am sure a lot of interesting discussion could come of a movie like this.

 

30 comments - What do you think?  Posted by Cash Flow Mantra - November 28, 2011 at 8:35 am

Categories: Uncategorized   Tags: , , , , ,

Getting Links Done Before the Colts Game

A friend of mine has an extra ticket to the Indianapolis Colts game today and invited me.  So, I want to get some of my favorite links from the week done before I have to leave in 2 hours.  I had hoped to get some more writing done this past week, but that didn’t happen so I will have to be working to get the posts for the next week done in real-time rather than simply have them go out as scheduled.  It just seems impossible to write enough in advance that I don’t feel the crunch at times.  I admire all you bloggers who can schedule posts several weeks in advance.

On to the Links

The Saved Quarter talks about finding good deals which is wise advice as we enter this holiday shopping season.

Prairie EcoThrifter offers tips to be a frugal shopper.  Combine this article with the previous one and you can’t go wrong this Christmas.

Money Cactus has a great interview with Barbara Friedberg.  I enjoy both Barb’s and Money Cactus’s blog so it was like getting the best of both worlds.

The Frugal Toad has a financial bucket list.  What a good idea.  I also love the blog name.  Who knew toads were that frugal?

My University Money wrote about the Brandon University strike.  Personally, I had never heard about professors striking and causing students to lose academic time.  I think it is shameful.

The Jenny Pincher has an article on how to choose a debt relief company.  This is actually the second part of a very useful and informative discussion.

Cents to Save is starting a 2012 goals list.  I admire those who plan ahead.  I will be Christmas shopping on Christmas Eve, going out on Christmas morning for batteries, and thinking about 2012 goals on January 2nd.

Mrs. LAMF writes a great post on landing a dream job.  Yes, there are even jobs to be had in Michigan.  Go figure!  Congratulations!

The Dividend Guy wants you to look at the whole picture when thinking about asset allocation.  Great advice.  I am sure not everyone considers this when investing.

Tony at Investorzblog has a confession.  No worries, Tony.  We are all here to learn and teach and grow together.

Tom at the Canadian Finance Blog shares how to build an emergency fund.

Important Link Below!!!

Finally, my kids have some Cockapoo puppies for sale.  There are 3 males with all shots and deworming stuff done.  Two are smaller and one is bigger.  They all have great personalities (puppies not the kids) and are working on being housebroken (again puppies not the kids).  I am very willing to negotiate the price.  Just tell ‘em CFM sent you.  (Would it help if I begged?)  Let all your friends know, too!

Carnivals I was in this Week.

Carnival of Financial Planning #211

The Wealth Builder Carnival #54

The Yakezie Carnival for Nov 20

Canadian Finance Carnival #63

Ok, time to get ready for the game.  I have to get lunch in the oven before going as a tradeoff.  Like I said, I am always willing to negotiate.

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14 comments - What do you think?  Posted by Cash Flow Mantra - November 27, 2011 at 10:01 am

Categories: Uncategorized   Tags: , , , ,

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