July 2024 update ($973,284 +$13,578 or +1.4%)

↑ Eurozone Stock Index Fund is up by $709 or +0.4% 
↑ US 500 Stock Index Fund is up by $4,807 or +1.2%
↑Global Small Cap is up by $10,759 or +6.8%
Total gains: $16,275

↓ Emerging Markets Stock Index Fund is down by $1,074 or -0.7% 
↓Growth fund is down by $1,623 or -2.0%
Total losses: $2,697

Observations:  I lot of people around me staring at financial peril as they are getting older.  This leads to accepting so called "eco-friendly minimalism" such as buying nothing and trying to grow their own food. Although people in their late 50s and up control nearly 70% of U.S. household wealth. Out of the same age group 50% have no retirement savings.  The distribution of wealth among that age group is very uneven.

 For many, making ends meet will likely mean having to work well into old age, if they are able. But they may also have to rely on younger family members as caregivers and for financial support.  A recent study looking at the roughly 30 million young boomers who will turn 65 between this year and 2030 determined that just over half have no more than $250,000 in financial assets. This makes it likely these people will have to rely on Social Security after burning through savings as a primary source of income in retirement.

The US government is stating that the social security is only meant to replace 78% of income for low earners and 42% for medium earners, and 28% for high earners.

They view retirement is a three-legged solution: social security, savings and pension.  Since less than 10% of the population have pension and no savings for the majority of working people - it’s no longer stable or sustainable situation.

What is curious is that the retires could spark a recession. As a soon millions of people retire there will be less money spent, as they income will be reduced dramatically.

Additionally, so sustain social security (this is currently 21% or $1.4 trillion a year for 49 million retired workers) the federal government will have to borrow money through the bonds.  The other alternative is to buy less weapons, as "defence budget" stands at 13 percent or $0.8 trillion or environment.

There are other headwinds: falling real wages for the working people, declining affordability and growing debt while lacking savings. This leads to low consumer confidence index. For households earning less $70K a year the disposal income is declining for longer than a year now. This is partially because average mortgage payment doubled since 2013 from $1,400 a month to $3,400 in 2024. Childcare increased 30% since 2019. The car payments are more than $1,000 a month.

So, what it means that the people are spending more money than they are earning. Unlike the US government this cannot continue forever. Credit card debts has reached 1 trillion for the first time ever. Put all this together one cannot wonder for how long the spending will continue.

Figure 2. USA citizens’ personal saving as a percentage of disposal personal income.

Funny Fact:  As ex-British prime minister David Cameron said: “…I mean, when Napoleon said we’re a nation of shopkeepers he meant it as an insult, I take it as a compliment, and I think we should want to have a competitive market where new people should break through. And that’s the business world we live in today”.  His dream came true the British manufacturing is dead.

Figure 3. British manufacturing sector is almost at zero.