Monday, April 4, 2022

Inflation, Ukraine, Home Prices

 Interest rates are rising - and that means people will be borrowing less which should boost the value of
the dollar - except the Fed is taking its sweet time to raise them.  I'm not sure why - but as long as they drag their feet, the housing market should get a last minute shot in the arm as people scramble to take advantage of such low rates.  I am not too worried about the value of my home, I live in one of the hottest parts of the country right now.  So even if the market cools or busts, I should see little if any change.  It is nice to see the price of my home almost double, as it has been the fastest growing asset in my net worth portfolio.  The nice thing is that
it will continue to appreciate until such time as I decide I am tired of owning and wish to rent and let someone else deal with all the problems.  I have often heard that you don't own a house, it owns you, and that has been true of my last two homes, but the current Condo I live in, I don't feel that way.  While we are currently remodeling the last room in our house, I have not had to make any repairs to the home.  I may keep it - but if I want to avoid state income taxes from dividends I may not.  

I received a larger than average raise to compensate for inflation this year.  Sadly, it was still behind the current rate of inflation (no surprise there).  I now see why people job hop to different companies.  It gets more expensive each year to keep your job, as the employer believes you will have some kind of loyalty and take the abuse.  Thankfully, I have about 2.5 years left before I am eligible to retire.  If the economy improves, I should be able to follow through with that.  Drop my pension and 401k into an IRA, then drop that into a Roth, pay an obscene amount of taxes, then never pay federal income tax again.  My taxable brokerage account is getting very close to the 20k bracket for married filing jointly, so by the time I do all this, I should be at 16-18k income on the taxable account, and everything else coming from my Roth.  This current div meter does include some income from Roth, HSA, and my wife's IRA, but not a huge percentage.

From an economic perspective, the Ukraine debacle is itching for "peace to break out".  I have been buying quite a bit as my portfolio is recovering from the last several months of losses.  In all situations there is a place to make money, and one stock that has been taking off like a rocket is Archer Daniels (ADM).  Who would have thought the Ukraine was the breadbasket of the world?  Stateside farm value has exploded due to lack of farming in Ukraine, and ADM certainly is breaking out.  My son owns LAND which is a farm REIT, and it has blown up as well.  They will probably settle down after "peace breaks out".  The only problem I have with the Ukraine situation is Putin's lack of success.  It feels like a feint on purpose, or a smoke and mirrors tactic for China or itself.  I hope there are no surprises later.


Inflation definitely puts a crimp into my retirement plans.  It also tips me toward going abroad.  After all, most of the world's grain goes through the Panama Canal, and Panama is in my top 5 countries to retire to.  I expect the dollar to go a lot further there, as we are feeling the squeeze on fuel and consumer staples.  We will see how this goes - I don't have much keeping me around at this point that I can't do online.  That includes socially as well.


Dividend Increases & Special Payouts Feb/Mar

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