Month: July 2022

Walking Up Interest Rates

To keep with the theme of walking, and because this week the US Federal Reserve “walked up” its benchmark interest rate, a brief discussion is warranted about interest rates, recessions, and the economy. By the way, the weather is HOT as heck, so today’s is a shorter post.

In the accompanying photo please note the mountains in the distance – which could be equated to higher ground, higher prices, and higher interest rates. The walkers seem not to be panicking (yet) because it is early in the higher interest rate progression. Think:

Higher interest rates in the short-term for,

  • Home mortgages
  • Car loans
  • Credit cards.

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“Dog” Days of Summer

“Man’s or Woman’s Best Friend”. At a time when true friends have proven to be more valuable than ever, it seems that getting a dog is something a good number of people and families did during the pandemic and its aftermath. Long-time dog lovers seem to agree that dogs can bring true happiness to unbearable situations. And the saying, “if you want a friend, get a dog” has been heard for years, even in the movies. “Dog benefits” range from personal joy to family togetherness…with a good deal of responsibility mixed in.

While a dog can turn out to become a true best friend, the “getting a dog” decision is a BIG one and not to be taken lightly. The considerations are several:

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A Game of Chicken?

Will the Fed raise interest rates aggressively? Or will the economic threat of recession force the Fed to slow its pace of rate increases? The outcome in what is shaping up as a sort of “game of chicken” remains to be seen.

Inflation is raging – there is no question. Prices of items as basic as eggs, butter and milk are increasing at crazy high rates. This is not to mention price increases for meat and produce. Gas prices have become crippling, just as workers return to corporate offices even part-time. Restaurants are still raising prices for diners. Home prices are still going up, although the recent rise in mortgage rates may cool the craziness. Wage increases are still happening (and not keeping up with inflation but also feeding into inflation) although there may be moderation in wages coming. The list goes on.

The Fed has good intentions to adjust rates to as ideal a level as possible to tame inflation while avoiding a deep recession.

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Can Walking Make Us Richer?

Long walks and successful long term financial & life goal setting go hand in hand. Lots of people have zero interest in long walks but even a walk to the mailbox can turn into a long walk – so stay with me here. A recent, rather long walk on the Camino de Santiago in northern Spain (pictured) taught me life-changing lessons about goal setting. Namely,

  • There is no truly right or wrong way to formulate financial or life goals. Yes, goal setting is easier when pen & paper are involved, but the process is more about quality of thought (meaning being honest and open with oneself) than any set of “rules.”
  • There need not be a rush to set financial, business or life goals. Although starting sooner rather than later can help – and momentum will develop on its own. The list of goals may then turn out longer and more exciting than ever imagined! (Dreams can become goals too.)
  • Accomplishing goals in a quality way becomes a series of decisions made along the way – seemingly small decisions and larger, more serious-feeling decisions.
A walk, short or long, can give space for free thought by separating us from the stress of beeping appliances, phones, laptops – even briefly from bosses and colleagues.

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