From the desk of Peter Blatt
How the Greek Economic failure teaches us to no longer 'keep up with the Joneses'.
As supportive parents, Gina and I brought him down to Vizcaya in Miami to view the statutes. On the drive down, the radio was filled with news about Greece. It brought up a discussion on what a Greek citizen is currently experiencing. It also brought up a comparison to a German resident where the economy is strong. The whole discussion led to the following question: Is our personal standard of living closer to the Greeks or Germans?
How do you relate to your neighbors? A few months ago I noted that the internet is encouraging us to spend more than we comfortably can. The advance of Facebook is causing the base of our ‘neighbors’ to expand to groups that we normally would not see. The new car, the fancy trip, that our extended friend base shows on Facebook.
The other side of the internet discussion is about the poverty line. How many times do I see a comparison to how much a person on poverty makes for a living? The discussion usually involves raising the minimum wage. Or a discussion on how Wal-Mart encourages its employees to only be part-time so it does not have to provide healthcare. How can a family of 4 only survive on $2,000 a month?
After weeding through all the chatter, I have decided to look for useful sites on the internet that help determine where we should be. The first one calculates the cost of living for a reasonable person or family by county. Check it out: www.epi.org/resources/budget/
The question 'are we are more like Germany or Greece?' is yet to play out. I spoke to a client last night and he said to me there are so many black swan events out there, it always pays to be defensive. A black swan event, is a 3 standard deviation drop (aka the stock market crash in 2008). All markets are connected and the US stock market overall is still strong.
I look forward to further discussion and education.
Until next time,