Straight Talk from Al Jacobs

THE AMERICAN DREAM REVISITED

If there’s one habit I’ve indulged in over the years, it’s regularly reading Letters to the Editor in every newspaper I come across. Although many of them are simply tirades of one sort or another, every so often I come across an opinion which causes me to think twice. Several days ago the title of one upset me when it proclaimed: “The American Dream is out of reach.” The text of the letter was more upsetting, bemoaning that “… life should be better and richer and fuller for everyone,” while offering as a solution: “Think twice about who we vote for.”

The phrase, The American Dream, which dates back to James Truslow Adams’ 1931 book, The Epic of America, had come to represent an assurance of the abundance of material goods, and in particular home ownership and a college education for all. To a certain extent I tended to focus in on the concept and realize I’ve lived my life with those values uppermost in my consciousness.

In more recent years the belief that, through hard work and abiding by the rules, the citizen’s material prosperity is guaranteed, has been challenged. Prize-winning journalist Chris Hedges’ 2012 publication, Days of Destruction, Days of Revolt, claims that the dream is a lie, in that American’s jobs, schools and communities will all be sacrificed to the evil of corporate profit.

I’ll give you my opinion. Both sides have it wrong. It’s still possible to enjoy the blessings of this bountiful land. For a person of no more than average ability, willing to work systematically to earn a livelihood, to abide by the fundamental rule that you consistently spend less than you earn, and who refuses to be duped by the hordes of unscrupulous marketing rogues which populate the landscape, a rewarding life is still attainable.

My point: The American Dream is alive and well. Though James Truslow Adams, a freelance author who helped popularize American history, departed this earth almost 70 years ago, his concept that each citizen can attain a certain degree of success in this favored nation is still valid. But be aware that it’s a singular achievement, not a community project. It won’t be collectively handed out; it must be individually earned.

 

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Al Jacobs, a professional investor for nearly a half-

century, issues a monthly newsletter in which he

shares his financial knowledge and experience.

You may view it on http://www.roadwaytoprosperity.com

 

 

 

Straight Talk from Al Jacobs

INVESTORS WANTED: SIMPLETONS ONLY NEED APPLY

The advertisement is certainly impressive; the full page spread literally beckons the viewer to act fast before the opportunity of the century gets away. The offering is the “New California State Silver 100’s” for which “the phone lines are ringing off the hook.” The actual items being marketed are 50 one-ounce silver coins, described as “proof finish,” each commemorating a different state of the union. The price of each coin is $99, which is described as “the state minimum set by the private Federated Mint” – which, understandably, is the firm marketing the coins.

The actual product being promoted is not a single coin at the quoted price, but rather the full 50-coin set. The bonus offered is that select California residents can get 20 of these coins free.” This they describe as “a real steal because it’s saving each California resident over two thousand dollars.” It’s true, of course, that the price of 20 coins at $99 each equals $1,980, so with sales tax included the savings can be said to be “over two thousand dollars.” I’m sure this should induce some persons to do exactly as the ad recommends: “Don’t wait to call. Pick up the phone right now and get as many of the new California State Silver 100’s as you can before they’re all gone.”

Let’s now back up a bit and take a look at this investment opportunity in a more realistic manner. What’s actually being sold and at what price? The collection of coins, which are individually wrapped and packaged in a container the size of large cigar box, contains a total of 50 ounces of silver. Only the silver has value; the packaging is merely a marketing contrivance designed to make the offering seem impressive. Thus, the fundamental question is: What is the market value of 50 ounces of silver? The advertisement appeared 12/21/17; on that date the spot price of an ounce of silver was $16.23. It takes little mathematical skill to determine the 30 coins for which a purchaser pays $99 each costs $2,970. The 50 ounces of silver acquired at $16.23 per ounce represents an actual value of $811.50. This amounts to a markup $2,158.50. It takes a vivid imagination to construe this as an attractive investment

A final comment: There’s nothing unusual about this advertisement. I’ve seen these sorts of offerings over the years, in various forms, over and over. They’re designed to attract the gullible among us, who are unable to fixate on reality. Whether there should be laws to protect the many naïve members of society can be debated.

 

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Al Jacobs, a professional investor for nearly a half-

century, issues a monthly newsletter in which he

shares his financial knowledge and experience.

You may view it on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

WHY MANY OF US ARE BROKE

My thanks to “Letters to the editor” writer Bill Spitalnic , of Newport Beach, who posed a question that deserves to be asked – and answered. He first lauds our nation for its prodigious wealth of $97 trillion, next calculates the net worth for the median household as being $78,100, and finally summarizes with the query “Why is it so darn hard at times to make the car payment?” The question is meant to be rhetorical. Every household should be able to meet its expenses with no problem. However, I’ve been told that over 50 percent of Americans cannot come up with $400 if an emergency befalls them. Evidently something is wrong; what might it be?

I have an answer to that question … but first a testimonial. In 1963, after serving more than a dozen years in the U.S. Navy, I settled with my new bride in San Jose, California, where I began a job as a real estate salesman, on commissions only. As our total assets amounted to less than $3,000, my wife needed to find a job – and transportation to get her there. A newspaper ad offered a 1954 Chevrolet for sale at $350. After checking the vehicle out, we negotiated the price down to $300, in cash. Though it was ugly, it ran well and provided the transportation she needed.

Now for my response to the question: Why is it so hard at times to make the car payment? It’s for the same reason so many people cannot comfortably meet financial obligations. It’s that they fail to live by a most basic rule: Arrange your affairs so you regularly spend less than you earn. As for transportation, the motor vehicle constitutes the average American's single most important fixation. There’s no product more forcefully promoted or representing such a substantial portion of disposable income than one's vehicle, and the potential for financial dilemma is all too real. The solution: (1) Don’t buy anything you can’t pay for without borrowings of any sort. (2) If a new car isn’t within your budget, search for a serviceable used one. (3) If continuing to use your present vehicle costs less than buying a replacement, don’t make the change.

A final thought: Despite all the consumer guidance in America, too many people are engaged in thoughtless and self-destructive behavior. How you conduct your affairs as a consumer relates to what’s important in your life. With limited resources, embrace thrift and discipline. As your net worth increases, you may modify your conduct.  But these must be deliberate choices. Don’t let the marketers preempt your decisions.

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Al Jacobs, a professional investor for nearly a half-

century, issues a monthly newsletter in which he

shares his financial knowledge and experience.

 

You may view it on http://www.roadwaytoprospertiy.com

 

Straight Talk from Al Jacobs

 

THE SCOURGE OF INEQUITY

 

A study, recently unveiled, points to racial and ethnic inequity as the major reason California is slipping into decline. The report, released November 14, 2017, by Advancement Project California, a Los Angeles based civil rights group, examines the causes leading to our malaise. John Kim, executive director of the project, contends we must “shake Californians out of their complacency that the state’s progressive political bent and rising multiculturalism is translating into less racial inequity.” He added that as a majority minority state, racial disparity should not be acceptable any more.

Following those philosophical generalities, Mr. Kim becomes specific when he states “We need to create a new coalition where we all work together toward progress and prosperity for all.” That concept is about as close to the workings of the 1924 Soviet collective system as you can get. It’s fascinating anyone can make such a statement, nearly a century later, with a straight face.

One of the more egregious revelations, according to the study, is that “we haven’t made progress in closing gaps in education,” adding that members of certain races “are less likely to have access to good schools.” What this fails to consider is how a school is determined to be “bad.” It’s when its students perform poorly on standardized tests. But this doesn’t necessarily mean the school is bad, but rather that its students display academic deficiency. To blame this on racial inequity thoroughly ignores reality.

Still more evidence of inequity relates to racial disparity in incarceration rates. In Los Angeles City, for example, this is the cause routinely given to explain why ethnic minorities are far more likely to be jailed than whites. However, the fact the city’s 9,843 police officers are 55.2% Hispanic or African American, while only 34.9% are white brings the following presumption into question: Could it be, perhaps, that arrest and incarceration rates are far more dependent upon the personal conduct of those persons being apprehended than is the race or ethnicity of the parties?

A final thought: I’ve long been convinced the sort of societal action normally taken to address inequity has little or nothing to do with actually attacking a problem. Rather, it’s based upon determining who will receive whatever money is thrown toward remedial effort taken. In short, combating inequity is merely a money-making endeavor.

 

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Al Jacobs, a professional investor for nearly a half-

century, issues a monthly newsletter in which he

shares his financial knowledge and experience.

You may view it on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

MORE NONSENSE FROM THE UNITED NATIONS

 

I notice that civil rights and homeless advocates in Orange County, California, in cooperation with the American Civil Liberties Union and the Elder Law and Disability Rights Center, have filed a petition requesting a special United Nations official to declare local governments in the United States to be in violation of international law for having enacted anti-camping ordinances which prohibit the homeless from sleeping in public spaces. The U.N. official, Special Rapporteur Philip Alston, who is currently inspecting Los Angeles, San Francisco and the District of Columbia, among other sites, declared on Wednesday, November 29, 2017, that despite the nation’s wealth, “great poverty and inequality exists in America.”

The event now bedeviling the human rights activists is that a number of communities in Orange County are in the process of cleaning up unsightly homeless encampments which have been threatening the peace and safety of both residents and passersby. Such areas as the grounds surrounding public buildings and the wooded areas adjacent to roads and bicycle paths have become debris-littered and hazardous as more and more transients illegally squat in locations not intended for human habitation. Several times this year county employees have been forced to clear these areas, citing concerns about public safety as well as the safety of the homeless.

Exactly what authority the United Nations possesses over the right of the United States and its governmental subdivisions to enforce its properly enacted laws is beyond my knowledge. If, in fact, that organization is vested with any such powers, then these arrangements should be repudiated at once. And if we, as a participant in this international community of nations, are somehow beholden to abide by the rules and regulations dictated by a majority of its current 193 members, then there’s no rational justification for our being a member. In retrospect, the late Senator Henry Cabot Lodge may have been prophetic when, in 1919, he opposed U.S. entry into the League of Nations.

The article concludes with a statement by Mr. Alston that he plans to present his report on American extreme poverty to the U.N. Human Rights Council in Geneva in June 2018. If it’s extreme poverty which truly concerns him, perhaps he should be touring the nation of Bangladesh, another member of the United Nations, with an average hourly wage for its citizens of 24 cents.

comments, called-out

Al Jacobs, a professional investor for nearly a half-

century, issues a monthly newsletter in which he

shares his financial knowledge and experience.

You may view it on http://www.roadwaytoprosperity.com