the-local-economist

Interest Rates and Rental Rates in 2023

Fri, 27 Jan 2023 16:00:00 GMT

If you were to distill the economy of the year 2022 into a single word, it would most likely be either inflation or interest rates (a response to inflation). Go back a year to 2021 and that word may have been housing. This is the year after the pandemic began, and as employees saw work from home as a viable option , they moved! This had a large effect on overall housing prices. This has left many people concerned about the housing market, and has sparked conversations comparing current times to the Great Recession.

Wells Fargo is even leaving the mortgage market altogether. With rising interest rates not reversing anytime soon, and housing being a major issue, it may be a good idea to ask ourselves: what effect does a changing interest rate have on housing rental rates? Rising interest rates will primarily effect housing through lowering the present value of the house and increasing the long term cash-flow, we should see a rise in rentals as housing affordability drops, and furthermore it will affect the ratio of multi-home housing being built.

Interest Rates and Cash Flows

If one is unfamiliar with discounted cash flow valuation (DCF), it may be best to start at what any person – homeowner or not – would know about: the interest rate on their home. Most Americans do not have enough cash on hand to outright buy their house, so they need to take out a loan from the bank. Banks do not hand out cash for free; they need some sort of return, and that comes in the form of interest.

The interest rate is determined by a variety of factors including the value of the house, one’s down payment, credit scores, and location. The determination of the interest rate can truly make or break the decision to buy the house, as a higher interest rate means higher monthly payments which one may not be able to afford.

As the Federal Reserve increases interest rates primarily through raising the Federal Funds Rate, this has a similar effect on any other interest rate including mortgage rates. Think of this as the opportunity cost increasing for the bank – since they could have a higher risk-free interest rate. At the same time, a higher interest rate means that the cash flows coming to the bank are higher. All this is to say that mortgage rates are at an all time high, and that is directly affecting the present value of the asset (the house) but is also met with increased cash flows for the bank.

Figure 1: Note that it is more useful to look at the 30 year fixed rate mortgages than others. Also, notice how we still have yet to hit anything close to the interest rate in the 1980s!

The Impact on Rentals

So it is clear that the American Dream of owning a home may take some more time to become a reality. What does that actually mean? What we should see is an increase in the number of homes being rented – primarily because people cannot afford to buy, and secondly because people are more willing to rent their homes knowing the business is more lucrative since demand from renters is increasing. In the graph below, we can see this increase in demand is leading to higher rental prices for the average house in the Untied States:

If we view the rental market as a perfectly competitive market, how should people respond? Some may join in on house hacking or adjust their rental rates to be more competitive . However, a more interesting phenomenon is the increase in the share of multi-family housing, relative to single-family homes. Multi-unit properties are your apartment complexes, duplexes, condos, etc. and are more lucrative in a booming rental market. The Census Bureau has great data on housing starts which can be drilled down to single or multi-unit housing starts. We can see here that, although single-family homes are still started more often than multi-family, that gap is closing, with the share of multiple unit homes increasing.

Businesses are responding to a market with profit potential in the way you would think: taking competitive steps to earn some profit themselves. For business owners who can do so, we envy you. To the small business owner reading that may not be able to do this, who may be renting themselves, what is most important to note is that rental rates may be increasing if they have not yet already. This will increase fixed cost and force you to make decisions regarding the price of your product or other costs (wages, capital). Early planning and an understanding of how this may affect you is of utmost importance!

The Economics of Pokemon Card Pricing

Tue, 24 Jan 2023 16:13:18 GMT

If you have a child, or you yourself (like me) are a grown person with long ties to the Pokemon franchise, news starting around COVID may have caught your eye. You may feel dismay at seeing people buy a Charizard card that you beat up go for millions of dollars . This may be many a reader, given that the Pokemon Company is the largest media franchise in the world . For more Pokemon data, you may want to see this resource: Pokémon gaming - Statistics & Facts | Statista , and to track the value of your own cards, you may want to check eBay’s Price Guide .

The fundamental question for the reader should be: what drives the prices of the cards? While some may argue that Pokemon cards are more valuable because Pokemon itself is a monopoly, or that the game is played by more people (it could be argued that more people play Magic the Gathering more seriously), economics tells us that price is determined by supply and demand factors.

With supply being exogenous to our discussion, given that we cannot control the amount of cards The Pokemon Company is producing ( increasingly more ) . Demand has primary determinants that can explain the sharp increase in prices we’ve seen in the last few years. Pokemon Card prices can be fully determined by buyers’ income increase in recent years, preferences for mint cards no longer being printed, and expectations of continued price increases stemming from high profile cases with large sums of money being exchanged.

Figure 1: If you have ever taken a basic economics class, this graph should bring memories, whether fond or nightmarish.

Income Increase:

As income increases, economic theory tells us that consumers will increase consumption of normal goods. The charts below show us that Pokemon cards are a normal good, but one could have hypothesized this even earlier since cards, like much of the entertainment industry, are a luxury good that only those with disposable income can afford. Pokemon card prices were in the news shortly after the COVID-19 Pandemic started in early 2020. From the below chart of the original base set Charizard (ungraded), the peak price came in March of 2020. This was around the same time disposable income had its first peak funded by stimulus checks meant to keep up consumption, the primary driver of the economy.

Figure 2: Charizard Ungraded Pokemon Card price from https://www.pricecharting.com/game/pokemon-base-set/charizard-4

It wasn’t just older Pokemon cards that were demanded either: new sets including Hidden Fates (produced in late 2019) and XY Evolutions (produced in 2016, a reprint of the original base set for the 20 ^th anniversary) were also heavily demanded. So much so, that some retailers stopped selling the cards altogether in order to stop people from fighting over the cards . This began the most recent craze, but preferences for mint graded cards continued the frenzy.

Figure 3: Disposable Income by FRED https://fred.stlouisfed.org/series/DSPIC96

Preference for Mint Cards:

For card collectors, whether sports cards or trading cards, preferences are more aimed at the cards in the best condition. This may be why, after seeing cards you used to play with go for thousands of dollars, you may have been disappointed to find out your card that went through the wash three times and was bent to fit into your wallet was not worth as much. One of the primary ways that collectors ensure cards are in mint condition is grading them through a service such as PSA or Beckett. These services became more popular in recent years, so the foresight to send cards that were recently ripped from packs 25 years ago caused the supply of mint cards from older sets to decline. In other words, since the supply of mint cards are significantly low, this puts upward pressure on prices.

This is also the reason that people found out, to their dismay, that opening new packs and sending cards in that are in high supply already would not be worth nearly as much. Regardless, PSA and other services were forced to increase their own prices for grading services amidst a surge in grading requests . With that increase in cost, the supply of mint cards decreased even more, again putting upward pressure on prices. [1] This did not stop consumers from sending cards into the services, especially after high-profile celebrities began grading and selling cards, altering the future expectations of consumers.

Expectation of Future Price Increases:

The most famous event in recent Pokemon history was Logan Paul’s opening of a brand new Base Set Booster Box he bought for $3.5 million. It was one of the most watched videos on YouTube at the time, mostly garnering laughs since the box he bought turned out to be fake and filled with G.I. Joe cards . Logan Paul has a wide reach with 23.6 million subscribers on YouTube, and that video saw more than 6.9 million views on his video where he explains how he was scammed.

Celebrities with a wide reach garnered attention from viewers looking for ways to make future income, and Pokemon is seen as a good investment. Future expected price increases raise demand for the product now, again pushing demand up such that current prices increase.

The determinants of price discussed are not only determinants for Pokemon cards or even entertainment goods. Any good or service is determined by supply and demand factors, and part of understanding how to set prices for maximized profit is to understand these determinants. It is advisable for small businesses to spend time studying their own market and understanding business methods that can help increase demand for your good.

[1] From the supply and demand graph at the top of the article, think of a decrease in supply as a shift of the supply curve to the left. Recall that the equilibrium price of whichever good you are studying will then increase.

Probability and Luck in Business and Life

Fri, 06 Jan 2023 20:11:35 GMT

In terms of evaluating the success of our business, or even our lives, it can be hard to figure out what should be attributed to luck and what we should hold onto with pride and vindication of “I made the right choices along the way to put me in this position.” Now, there is an entirely separate conversation about if “luck” is really lucky, or if it is the product of putting yourself in the position to receive that luck. For the purposes of this article, we’ll just assume that all luck discussed in the version of luck that is truly a gift of good fortune (think winning the lottery).

In this article, we’ll cover some basic concepts of probability as it relates to our daily lives. Don’t worry, this won’t be filled with math (or include any at all), but rather will discuss the concept of probability and making decisions that tilt the scales in your favor. Enough of those scale-tilting decisions, and you’re setting yourself up for a higher likelihood of success. It is important to keep in mind though, that sometimes life is cruel. Regardless of the steps you take, life may just be like a pitcher that prefers the off-speed stuff, and throw you curveball after curveball. While it’s not a guarantee, I think we can all agree that decisions that lead to a higher likelihood of success are preferred in most cases to those that do not.

Parallel Universes, Parallel Lives

To frame what we’re going to be talking about through this article, let’s take a look at the idea of parallel universes. Now, I’m not here to spout the virtues of the concept of the multiverse , but it does have important implications when we think about the probabilistic outcomes in our lives.

The basic concept is that at every point of a probabilistic decision, there are new universes created in which all possible outcomes occurred. Let’s consider a really basic example. Let’s imagine you’re faced with a choice of going left or right at a fork in the road, a la Robert Frost. You’re told before you make the decision that there exists $1 million at the end of one path, and nothing at the end of the other. If you go down the path on the left, that is the only reality that you will ever know. However, in theory , there is now a separate universe in which you went down the path on the right even though you don’t realize that reality.

If you go down the path on the left and it doesn’t have the $1 million, your life remains unchanged, albeit with a little bit of disappointment you didn’t make it big on your coin flip decision. If, however, you do make the “correct” decision and travel down the path with the money at the end of it, you now only live that reality. But in describing both situations, we can see that both occur in some abstract sense. There is some probability that each outcome will occur. This is the case with everything that we do in life.

Now, if you’re not thoroughly confused by this point, let’s continue forward.

A Life of Probability

The example above is obviously an unlikely situation you’ll face (unless you find yourself in a MrBeast video ). However, this consideration of probability in the decisions you make is important. As we think through the example, we can see there is a 50/50 chance you end up with the $1 million dollars. In reality, calculating these probabilities is significantly more difficult, and considering probability at every turn will certainly make you question your own sanity.

However, we can also apply probabilities, ex post (after they happen). This is something that could serve to be a good benchmark or indicator of the roadblocks you may be putting in your own way.

Decisions with a High Probability of Happening Again

When it comes to making decisions about your life, you’ll often be faced with something similar to the crossroads example above. Now, it won’t be as clear as “take this path and make a lot of money, take this path and make nothing,” but these decisions could have a similar impact. Now, that’s not to say that money is the only thing affected by this. Throughout all of these examples, money is just used because it’s tangible, feel free to substitute in anything that is more relevant to your definition of success. Through all of these decisions, you want to put yourself in a situation where the variance (think spread of outcomes) is minimized around your ideal outcome.

Let’s consider another example (motivated from an example in Fooled by Randomness by Nassim Nicholas Taleb ) to try to illustrate this point. We’ll talk about two individuals that are starting from two different points in life. First, we’ll talk about Ron. Ron is a shoelace salesman. Business isn’t great, and really never has been. He often finds that people are buying shoes with shoelaces that are good enough for what they need, and his after-market shoelaces never seem to pique their interest. But, Ron keeps chugging along, trying unsuccessfully to sell his shoelaces. He does have another hobby though, he loves to gamble. He takes what little money he earns selling shoelaces and puts it into sports bets with low probabilities of success, but massive payouts. After gambling this way for years, he finally hits one of his bets that pays out a few million dollars. Ron now buys a nice house, in a good neighborhood, and sees his life completely changed.

Now, let’s talk about his neighbor Tom. Tom is an optometrist, and a pretty good one at that. Not only is he good at making patients feel comfortable and welcomed in his office, but he’s exceptional at his job in helping his patients improve their eye health. Tom’s life is much duller, he doesn’t take many risks, even though Ron tries to convince him to during their weekend barbecues.

With that background in mind of these two people who ended up in a similar position in life, let’s circle back to the topic at hand here; probability.

If Ron were to run his life back tens of thousands of times since the first absurd bet he ever placed, the range of outcomes in his life would vary greatly. On the low end, he never hits his big bet, his shoelace sales go to zero, and he wagers his last penny out of desperation on a bet that surely will hit (spoiler alert: it doesn’t). A wide-range of middle outcomes is that he lives the same life he was living before he hit it big in the scenario we described above where he ended up as Tom’s neighbor. He wins some small bets, loses most, and shoelace sales remain uninspiring and he lives a below-average, average, or slightly above-average life. On the high end, he gets largely the same life he lives in the scenario above. Maybe he hits it big one or two times more.

Turning to Tom’s range of outcomes, let’s start from when he graduated from Optometry school. Without a lot of legwork here, we can see that Tom’s range of outcomes is significantly smaller than Ron’s. In the tens of thousands of re-runs of Tom’s life, the middle range of his outcomes are living as an optometrist in a middle-class, average community in the United States. In some of the re-do's, he is in an affluent area, and in others he’s in a poorer area. However, the likelihood of Tom living the same life he lives is significantly higher than the likelihood of Ron repeating his success.

What Does This All Mean?

As we illustrate the example above, you may be wondering what the point of all of this is. If we think about probability, ex post , that’s just the likelihood that they would be able to do it all over again. Notice with Tom, he has far more control over the outcomes he faces than Ron does (no matter how good of a sports bettor he thinks he is).

When we make decisions that set us up for repeated success, it is less likely to be considered luck . You thought I forgot about that part of it, didn’t you? Now, that’s not to say that others won’t view it as lucky, or that luck didn’t play a role somewhere along the way. However, luck in this sense relates to a simple probability. If you were to re-run your actions thousands of times, and the outcome experienced is unlikely relative to the others (an outlier), then that’s largely “lucky.”

But what can you actually do about this? The point of this story here, and the discussion of probability as it relates to your life and your business is about the little decisions you make every day. You can hear all of the business gurus and life coaches tell you that it’s the little things that matter. Making your bed matters. Writing a list of things you're grateful for as you wake up matters. And while those specific things may not actually matter (it’s an empirical question for which I have no data), the concept is what rings true.

Wacetalk

Thu, 01 Dec 2022 16:09:15 GMT

Wacetalk

Website: www.wacetalk.com
Contact: wacetalk08@gmail.com

There are a number of ways that an idea for a product or business can come about for an individual. Be it by a stroke of luck, divine intervention, or the desire to make one’s own life easier, ideas can come about spontaneously or through meticulous thought and planning. For Darin, his inspiration came about through personal desire to make his life easier and by spur of the moment thinking.

Darin’s story of his entrepreneurial journey can be traced back to his time serving in the military. After devoting his life and service to the country he was unfortunately injured during duty and sustained lasting effects that he has carried with him to this day. He now lives with about 60% mobility in his arm, something he says hinders him in his daily life and had been the source of frustration.

So what does this have to do with the entrepreneurial drive he has? Because of this injury, Darin shared that the inspiration for his product and business came to him. After having dinner one night, he was leaving a restaurant and his injury began to act up and cause him pain. While outside that restaurant he attempted to simply take his phone out and found this, like so many other tasks, had become difficult for him. It was at this point, with the desire to make doing this small task easier that he had a thought. This was the moment that sparked an idea that could help not only him, but others facing similar physical limitations. His idea for a device that could attach to the belt and hold onto the phone, while still being maneuverable enough to actively use the phone, without having to hold it in your hand was born.

From the onset of his inspiration Darin went to work looking into if this product could already be in existence. Shockingly enough, the product Darin envisioned did not yet have exist in the market. Darin went on to cite how the government allocates billions of dollars to those who left work and lost their jobs due to arm and hand injuries and yet there was no solution likes his out there as an option for so many people like himself. The vision for the product is to not only help injuries veterans with arm and hand mobility injuries but the wider community of those with disabilities and degenerative conditions.

Darin knew it wouldn’t be easy to get his product out there and create interest from large groups. Even with some foresight to the struggles that may lie ahead, he continued forward by going to Home Depot for supplies to make his own rough prototype. Following his initial design, he now had a concept he could take to a 3D printer to fine-tune the design and further clarify the vision for the product. With this more robust prototype in-hand, Darin was able to enlist more and more contacts to help zone in on what the true prototype should be and how it should function.

Darin shared how he has been fortunate from his military background to have had contacts dedicated to helping veteran’s with ideas like his, from putting him in contact with the right people to his legal aid in obtaining his patents. He recognizes this isn’t a privilege everyone is able to have access to. Despite his resources, Darin pointed to a huge obstacle that effects everyone in the entrepreneurial space equally. Product development and delivery to the customer base can almost be overcomplicated in this day and age. Keeping sight of the basics is how he grounds himself in his work. He has a product that he wants to get out to his customers, to create a fair exchange. He says losing sight of the simplicity of business can make good people with good ideas put those ideas on the back burner and lose heart in their own journey. “I think a lot of times people get stopped by the barriers they create themselves.” Having faith in their ideas should be the push they hold onto to make it through the difficult hurdles.

Darin personally points to his own character of being a natural born problem solver and trouble shooter that gets him through the tough spots and day to day activities that drive his business and product development forward. He is a strong supporter of the idea that it doesn’t matter who you are, it’s possible to make your ideas come to life with perseverance. “Ideas don’t belong to just one person. It could happen to anyone…Not everyone takes their ideas to the next level.” Starting a business can be one of the most trying and seemingly insurmountable things to accomplish, but as Darin shared, anyone can make happen when they put in the work for it and love what the idea or service they are working towards fulfilling.

Wacetalk has gone through several stages of development and multiple prototypes as Darin has worked towards perfecting his design. He is now looking forward to his initial launch and forming relationships with reputable retailers who will help him accomplish his goal of making Wacetalk available across the country for those who have been injured, disabled, or suffer from degenerative conditions. Darin has found that his product helps him immensely with overcoming a task made difficult due to his injuries, and he hopes it can make other’s lives just a bit easier as well. For more information, please check out Wacetalk and Darin’s website below!

Wacetalk

www.wacetalk.com

wacetalk08@gmail.com

Before you go...

After sending the article to Darin for his approval, he felt that the article was a little too focused on himself. He wanted to make sure the stellar team around him received the credit they deserve. Here's what he wanted me to include about the people that are working alongside him to help achieve his vision.

"WaceTalk LLC. Currently has two very supportive employees who have a seat in Wacetalk LLC. and who have helped and been very influential in building, supporting, and assisting with helping to form a positive Foundation for our Wacetalk LLC./ assistive technology to it’s current space is as follows.

Khalid Gross (M.S. in Management) is our CFO and serves as the Principal Investigator of Wacetalk LLC. Gross currently serves as the business and industry development manager and professor at Delgado Community College in New Orleans and he is also a New York resident part time as well. Gross has 9 years’ experience leading economic development programs. Gross manages workforce and small business development programs and serves as lead administrator of the NIST/MEP/SRA grant program at the College. He has managed large teams and multiple government funded economic development programs with budgets ranging from $150,000 to $1.1 million.

Along with John Herman (B.S. In Engineering), an Engineer and technical support specialist who has over 20 years of experience in prototyping and engineering at his previous employer called Creative Models and Prototypes.

The important message here is that Team work leads to creating a foundation for success."

Interested in A Business Spotlight for Your Business?

Ergonomists, Not Economists on Improving Business

Tue, 29 Nov 2022 15:30:00 GMT

The Start of Occupational Safety and Ergonomics

In the 1930s while San Francisco’s Golden Gate Bridge was under construction, nineteen workers fell from the structure’s mind-boggling heights in different incidents over the years and lived to form a group called the ‘ Half Way to Hell Club .’ They owed their lives to a heavy rope mesh net under the bridge that cost chief project engineer Joseph Strauss a significant sum of money. At that time, no laws existed that required this safety measure.

The relationship between a worker and the workplace has been a process of improvement and its consideration is a relatively recent societal development. This process has led to the emergence of ergonomics in the work environment designing or arranging workplaces, products and systems so that they fit the people who use them.

A Rapid Shift Toward Improvement

Occupational safety and health as we know it today came from the rapid rise in standards and expectations for well-being through the industrial revolution. As recent as the construction of the Golden Gate Bridge, a safety net protecting workers from falling to their deaths was a generous condition for labor. Today, there is an industry for goods and services dedicated to safe and effective human interfacing and interaction with the workplace environment.

For example, Fremont, California’s Ergobility provides consulting services to offices and workspaces to help them evaluate products and practices to improve ergonomic standards and improve the overall employee experience. Given the increasing prioritization of these aspects of work culture, these kinds of services are likely to become more popular in the future.

In Cleveland, Ohio, Michael O'Donnell, vice president of operations at the Manufacturing Advocacy and Growth Network (MAGNET) has been helping the Ohio region's builders assess their ergonomic requirements. O’Donnell points to the pandemic and shifts in the American labor market as forces that have driven workplace ergonomics into greater prominence.

Brecksville-based Knight Ergonomic and Assembly works mostly in the automotive sector and caters to companies including Ford, GM, Honda, Toyota, and Nissan. Vice president Joel Haller explains that "the cost of having a worker not able to work is a driving factor. You also want to make your workplace more palatable so people will join your company.”

In contemporary advanced countries, most people work in environments that adhere to certain safety protocols such that work-related injury is a rare concern. Of course there are still jobs in advanced economies that can be physically dangerous and risky, but those too exist in a framework of minimizing hazards as much as possible. The overall trend in workplace safety has been toward greater degrees of worker-centric measures to improve safety, comfort, and efficiency. October was even designated National Ergonomics Month in 2003 by the Human Factors and Ergonomics Society (HFES).

Concepts in ergonomics have become staples in American workplaces. These include maintaining good posture, taking breaks and doing stretches, maintaining a fitting workstation with correct proportions on the keyboard and desk height, and using appropriate machinery for strenuous tasks among others. Improvements in technologies, methods, and standards of living have given rise to greater expectations for worker conditions. Hopefully, this trend will push toward better experiences for individuals in the workplace and improve relations across the labor market in the future.

Creative Destruction

Thu, 24 Nov 2022 15:30:04 GMT

Introduction

A common talking point when discussing anything from minimum wage laws to robot workers is that technology steals jobs from the people who needed them. Touch-screens at your local fast-food joint will replace the job of a cashier who may need that money to provide for their family. This fact is not lost on economists, even those that are proponents or theorists of technological economic growth.

What I’m describing is Creative Destruction – the act of “destroying” a production input for the sake of future innovation. While creative destruction can be viewed from the lens of the negative externalities it creates, the idea has also helped economists to explain how the economy grows with an injection of technological innovation, and how that influx of technology may be the primary reason that those who are negatively affected by creative destruction can survive despite it.

The History

As an economic concept, creative destruction had its start in the 1940s when Joseph Schumpeter used the idea to explain technological innovation within the business cycle. Schumpeter was not the original theorist, though: Karl Marx worked on this theory a century prior. A known critic of capitalism, Marx explained creative destruction as a set of processes that aid in accumulation and destruction of wealth. In the Communist Manifesto, Marx describes this as a time of chaos created after current market forces are seen as not to fit the agenda of those controlling the means of production. His critique outlines that society puts itself into a “state of momentary barbarism…because there is too much civilization, too much means of subsistence, too much industry, too much commerce.”

Schumpeter’s idea strayed from Marx’s in the understanding of why this happens. While Marx believed this destruction and recreation served only the bourgeoisie elite, Schumpeter viewed destruction through the lens of technological innovation that leads to growth . In a sense, economic growth slows as industries become too comfortable. Monopolies are created from large innovations in technology, and with the free market nearing the brink of destruction, an outside agent steps in to revive the competition of the market that spurs economic growth. This is all with the understanding that economic growth leads to improvements in society; be it through an increase in standard of living, accumulation of overall wealth, etc.

Capitalism and Endogenous Growth Models

Schumpeter’s theory is only a small page in the volume that is Endogenous Growth Theory . This theory, and the models aligned with it, describe economic growth as coming endogenously (from inside the economy as opposed to some external shock) through technological progress. The building block for these series of models is the Solow model (1957) (paper here ) in which growth in macroeconomic variables occurs at a constant rate ( g > 0) in the steady state, g indicating the growth rate of overall technological progress. These models describe constant growth of technology that can only serve to increase overall capital and production output.

Schumpeter’s idea led to a separate model, first posed by Aghion and Howitt (1992) , in which growth is not constant and technological changes do not immediately lead to positive economic impacts. In Solow-like models (e.g.: Diamond, 1965 ), capital depreciated at a constant positive rate but is produced at a rate high enough such that capital accumulation rises over time. Aghion and Howitt describe industry as needing to optimize their use of labor for both capital production and research given that old technology becomes obsolete due to knowledge spillover effects. Continuing use of obsolete technology will surely lead to sub-optimal production, thus a competitive market destroys obsolete technology in favor of other innovations .

Wrapping it All Up

While it may not be the case that either model perfectly describes the behavior of economic growth – and, almost surely, technological innovation is not the only mechanism driving it – creative destruction does help economists describe the role of technological innovation within the economy. It also poses a microeconomic question for producers: within your own firm, does there exist obsolete technology, impeding growth? Or, on the other hand, are there innovations that could lead to growth within the firm?

Blockchain Effects on Financial Services & Retail Banking

Tue, 22 Nov 2022 15:45:00 GMT

Blockchain, a shared and immutable ledger can completely revolutionize the financial sector. Bringing down operational costs; faster executions of contracts and transactions; increased and irrefutable data transparency; and operations auditability are just some of the benefits blockchain brings. Banks and other financial services institutions are taking notice , as they lose out on market share.

Effects on the Financial Services & the Retail Banking Sector

Previously, FinTech startups and major tech companies (Google Inc, Apple Inc, Samsung Electronics, etc.) were the only major players capturing market share from banks. Now, tamper-proof blockchain technology is giving banks a run for their money.

The financial services sector is full of intermediaries whose only purpose is aiding in creating trust between lenders and borrowers. The biggest intermediaries are banks that create trust in a centralized manner for people and businesses to conduct financial activities. Average consumers hold most of their money in savings and checking accounts at traditional banks. The money they hold in an account is visible as an “account balance.” However once consumers deposit money in a bank, most of the money is then loaned out by the bank via fractional reserve banking , and the bank uses that money to conduct other business activities and increase their own profit margins.

In fact, since the money is not held in the bank itself, many banks tend to fail and shut down during a bank run. A bank run is when too many consumers try to withdraw money from a bank, more money than is held by the bank to give out to people. In other words, a “bank balance” is simply just an accounting entry. Despite this the industry refuses to change, potentially causing harm to consumers. Blockchain is a mechanism where centralized trust isn't required, and using cryptography increases security, transparency, and accessibility; giving power back to the little guy.

Cryptocurrency: A New Form of Payment without a Central Authority

Banking fees, transaction costs, account maintenance costs and hidden charges eat into the average citizen's hard earned money. Financial operations with low transparency and limited traceability have caused recessions, wars, and instability in societies for generations. Blockchain applications have the power to act as a disruptor, remove the bad powerful actors and allow more people to participate in the consensus process.

Remittances

Cryptocurrency transactions only require an internet connection, and can take place instantaneously 24 hours a day, 365 days a year. These transactions are borderless, secure and anonymous. For all the people that travel to work and have to support their families abroad, it can be a headache using companies like Western Union (WU), Money Gram, Wise etc… since there are initial and ongoing fees associated with each transaction; not to mention waiting for the institution to process things during the work week.

Globalization has allowed people to travel internationally, but using and transferring their money has not been without issues. Even the simplest solution of having cash on hand has its dangers, like being robbed while traveling, not to mention customs and limits associated with taking money into different countries. Foreign transaction fees are too high when using debit and credit cards, and having money sent to you by your loved ones using wire companies like WU can take days to clear and settle and be extremely expensive.

International students relying on funds from their home countries know all too well of the high fees associated with money transfers. Using blockchain, students studying abroad can have their parents send them money for a fraction of the cost and not worry about hefty fees. People traveling abroad can access more of their money without carrying cash or worrying about safety and security.

The Bottom Line

Disruption takes time. People need time to accept new technologies and change the old ways of doing things. Use cases need to be tested or perfected before blockchain can be expected to revolutionize everyday people. It is yet to be seen to what extent banks and financial institutions will be affected by blockchain. Payments, clearing/settlements of funds, investable securities, loans, credit, international trade/purchases and transactions are all on the chopping block as blockchain aims to revolutionize each of these industries.

However, one thing is clear, people everywhere in the world will benefit, and bullying of the little guy will finally be in check thanks to blockchain.

Blockchain Technology Benefits for Small Businesses

Fri, 18 Nov 2022 23:38:06 GMT

What is Blockchain Technology?

Blockchain is a shared and immutable ledger that can only be accessed by its network members. Network members can control what each organization or the organization's members can see. Data is encrypted and cannot be altered, helping to prevent fraud and unauthorized activity. In an earlier article , we provide a broad overview of blockchain technology.

How Can Blockchain Help Your Business Succeed?

Partnerships and business go hand in hand, however there is a caveat, trust. Many businesses fail because partners, founders, and employees don't trust each other. However, with blockchain whether business partners trust each other to share information or not becomes irrelevant. Times where mistrust and systematic differences got in the way of business are over. The reliability and efficiency provided by blockchain technology reduces redundancies and lowers operational costs for businesses.

Blockchain reduces paperwork and manmade errors, which reduces transaction costs and overhead. The need for third party middle men tasked with auditing and verifying transactions is also removed. There is no need for businesses working together to maintain their individual ledgers or databases. In the world of blockchain, documentation and transaction details are stored on the blockchain, making clearing and settlement a much quicker process. Since blockchain uses a distributed ledger , data is stored identically across multiple locations, providing safety and security.

Blockchain creates an audit trail for every asset for the duration of that asset's life. Each transaction is recorded as its own block of data which can not be altered and each block is connected to one preceding it and one after it; without the possibility of adding a block between two existing blocks. This removes the possibility of malicious activity.

Smart Contracts

Pre-set rules called smart contracts can be stored and automatically executed on the blockchain once the conditions are met. The need for human intervention to verify that the correct terms of the contract have been met, to then go and execute the contract is not needed.

Cryptocurrency: A New Form of Payment

Traditional credit card companies charge consumers and businesses fees for processing each financial transaction. It can be in the form of an annual credit card fee for the user, and a processing fee for each transaction for businesses, usually being 0.05% to 10% of the entire transaction. The costs add up and can become a headache for both consumers and businesses.

Paying with crypto has little fees associated with it. Businesses would need to set up a digital wallet or merchant gateway to accept crypto from customers. Crypto transactions are also permanent and irreversible. One potential issue is n the case of customers requesting refunds, as they would have to contact the business directly. Although this does provide protection to businesses from customers dealing in bad faith. Cryptocurrency ensures both sides of transparency and unalterable records, incase of any disputes.

Cheap and Secure Cloud Storage

Businesses and consumers spend billions of dollars each year on cloud storage, with centralized cloud storage providers granted unlimited access and control over their data. Blockchain provides access to safe and secure cloud storage at a reasonable price, and gives individuals control of their data.

Gift Cards and Loyalty Programs

Blockchain allows businesses to issue gift cards and administer loyalty programs without having to deal with middle men. Given the verification capabilities that blockchain provides, building a stronger relationship with your customer by having loyalty programs has never been cheaper or easier.

Digital Identity Verification

Cyber attacks primarily target small businesses because they can't afford to maintain or place high-end cyber-security systems and personnel to protect their businesses' online presence. With blockchain, system security is taken care of and businesses can focus on their growth. Eventually all ID’s, passports, certificates will be on blockchain, to protect user data and assets. Digital signatures based on public key cryptography provides irrefutable authentication of identities.

Connecting Small Business to Global Markets

For businesses, the biggest priority is uninterrupted growth. However, given the trend towards globalization and the costs associated with it, many small businesses find it difficult to expand internationally. Since smart contracts automatically execute once certain conditions have been met, blockchain technology can ensure contracts made with international entities will be upheld, executed, and compensated as agreed.

To Wrap it All Up

Blockchain technology can help small businesses save money, remove third-party costs, provide digital security solutions, and much more. As with every new technology there will be some trial and error involved, however, the benefits listed above are several ways blockchain can benefit your business.

Side Hustles are Breaking the Barriers of the Traditional Career Path

Fri, 11 Nov 2022 15:45:00 GMT

A New Working Path Developing Right in Front of Our Eyes

What is the traditional career path? For many Americans, the dependable track—not to mention the comfortable track—consists of going to school, developing knowledge and skills, and landing a job with a company to stick with until retirement at a ripe old age. This stable, somewhat romantic life path has been tried and true for so many in the past. You likely have friends and family who have happily gone down the traditional career path. However, labor dynamics have been changing dramatically throughout recent years, prompting many people to rethink the pursuit of a traditional career path.

The rise of online services and increased efficiency in product delivery through internet platforms has opened the doors to more professional online work possibilities than ever before. The effects of pandemic-era policies served as a nationwide inflection point for Americans and their relationship with work. Layoffs hit workers across the country as businesses suffered while at the same time, other workers moved into work from home or remote roles. All of this revealed that the traditional career path was not as predictable as advertised and that the alternatives are becoming more and more attractive.

The Increasing Popularity of Side Hustles

Younger Americans that belong to the Millennial and Gen Z eras are quickly discovering the opportunities to create extra streams of income with one or several side hustles. These jobs done in addition to one’s main day job not only provide extra income, but also reduce a worker’s overall dependence on a single employer in a traditional career arrangement. Many of these opportunities are internet based and include E-commerce sales, graphic design, web development, SEO consulting, online writing, YouTube content creation, and affiliate marketing, among others.

This could just be the beginning though. Not only are Americans discovering the benefits of having a side hustle, but some are also finding that it is increasingly possible to shift their side hustles into their main job as the benefits of that job outweigh the traditional career path. The potential for individuals to set their own working hours and their own terms of service by harnessing the myriad conveniences of online platforms has made it easier for more people to become their own employer , interacting with their own set of clients, and pushing forward with their own entrepreneurial spirit.

While data shows that by the end of 2020, around 9 million small businesses were temporarily or permanently closed, business startups in the United States grew from 3.5 million to 4.4 million from 2019 to 2020, a 24% increase. That’s Schumpeter’s idea of creative destruction happening on a large scale all across America.

For many, the benefits are not just financial. The adoption of side hustles or taking on a side hustle as a main job means the power to forge a personal career path . This applies especially to work that can be done remotely with nothing more than a device with an internet connection. It gives many the freedom to live location independent. This means living in a different physical location from where the main activity of work is based or even living as a digital nomad traveling far and wide.

The possibilities are already visible with countless stories from those who have found success, the many ways that they achieved it, and the satisfaction that many feel pursuing their own vocations.

Politically Urban

Tue, 08 Nov 2022 18:56:39 GMT

Politically Urban

Website: politicallyurban.com
Contact: info@politicallyurban.com

Clothing and fashion can easily be seen as one of the most pivotal avenues one can take to express who they are. Whether it’s your political ideology, cultural, religious, spiritual beliefs, a company you love to support, or your style and comfort preferences, clothing becomes a part of your outward identity every time you get dressed. Quinnell, who owns Politically Urban, values this ability for clothing to showcase who individuals and communities are.

"There is a lack of bold and original black art in the apparel form. With most of the fashion industry going through fast fashion it is also difficult to find organic alternatives that do not harm the environment," he says of his motivations for creating Politically Urban. The way he describes his brand is as an eco-friendly streetwear brand that showcases black art and culture through custom illustrations while also focusing on being environmentally friendly. His vision is to create an Eco-friendly streetwear brand that celebrates and uplifts Melanated people through original artwork that challenges social norms. He wants his brand to captivate his customers with his messaging and create garments that nurture the planet and our hearts. Quinnell comes from a graphic design background and wanted to pursue his own direction in life out of college and formed his LLC in 2021. Today he operates one hundred percent through ecommerce, making his product available all over the world. He hopes his clothing designs for the black community will make an impact and showcase the richness of the culture to create sustainable fashion all around the world. The lines between fashion and art can and are meant to be blurred and ultimately make clothing its form of platform.

When asked what his push was to get his vision off the ground Quinnell shared how he saw and felt this missing piece in the fashion world. There was a lack of black art available in apparel form and the options available were not so focused on their environmental impact. Through his own research and education Quinnell is all too aware of how the fashion industry can be wasteful. While wanting to be in the fashion space he most definitely did not want to fall into the trap of becoming a wasteful company as well. His vision for an “Eco friendly component, street wear component, unapologetic beautiful original artwork component, black excellence and being the brand for the black family.” became the driving force for diving into Politically Urban.

Like most businesses that are newer and up-and-coming, Quinnell has faced the ups and downs of getting going. He shared his personal hurdles were time management, self-guided research into the type of business he wanted to operate, and navigating all the legal requirements. He says having a road map is important, managing your time, being honest with yourself on how you’ll best operate, making true use of your skills, education and gifts, and staying on top of your goals. From his research and digesting of how others have navigated their own business journeys, he shared: “It’s good to take tidbits from people. But remember you can never duplicate another human. You are your own unique person. You have the journey of learning yourself and helping to identify your strengths and weaknesses are going to be your best point… It doesn’t mean you can’t learn other’s tactics, but what they’re able to do, just through their own gifts, or by their own need, is going to be different from you.” He says his own life experiences and learning from others is an excellent “apprenticeship through life” and “a beautiful journey,” to get him where he needed to be.

On the topic of advice he received along the way, and what he would now say to others, Quinnell shared that no journey is easy right away. Understand that the tough part is still part of the passion. Have a work-life balance but keep yourself on track. Allow for trial and error because the errors will teach you where to improve. Asking questions of those around you, even if it requires you to be a little bold or out of your comfort zone. Absorb any and all possible information you can find. The internet is a powerful tool, but like a scavenger hunt, the information is there you just have to find it.

For final thoughts on his company and his mission, Quinnell shared that his company is being built on resilience, perseverance and optimism. He hopes his company will fulfill its mission of “trying to make a new wave in apparel, e-commerce. Eco friendly component, street wear component, unapologetic beautiful original artwork component, black excellent. Being the brand for the black family.” If you’d like to check out and support Quinnell and Politically Urban check out their website and catalog below!

Politically Urban

politicallyurban.com

info@politicallyurban.com

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Blockchain Technology

Tue, 08 Nov 2022 15:00:01 GMT

What is Blockchain Technology?

Information is the world's most important currency; however, the internet is flooded with inaccurate

information, making ‘accurate’ information hard to come by. Blockchain is a shared and immutable

ledger , making the recording and sharing of information precise and immediate for its network

members. In this article, we'll cover some of the most common uses for blockchain technology, to help you better understand some of the different components in this rapidly evolving technology.

Distributed Ledger

Network participants from anywhere in the world can access the ledger and its immutable records.

Transactions are recorded only once, boosting efficiency and eliminating duplication; any and all changes

to transactions will be recorded as new transactions and both versions will be available.

A blockchain network can record transactions, track assets, orders, accounts, production and much

more, while showing a single view to all of its members. Each transaction is recorded as a “block” of data,

and can be anything tangible or intangible. Each block is connected to the one preceding it and the one

after it, thereby making an irreversible “blockchain”. Blocks record the exact time and date of each and

every transaction. These blocks cannot be altered or changed once it's been created, nor can a block be

inserted between two existing blocks.

This helps prevent fraud, malicious and/or unauthorized activity. Blockchain creates and provides an

audit trail of the journey of any assets or transactions. This level of transparency allows business and

individuals to spot weaknesses and remove redundancies for their businesses.

Cryptocurrency

Cryptocurrency like any currency is a medium of exchange , it is created and stored electronically in a

blockchain. Unlike traditional currencies however, it is not supplied by a central bank, rather is encrypted

to control creation of monetary units and verify transfers . Crypto is not reliant on any government or

bank, its transactions are maintained and verified by decentralized systems using cryptography.

The conversation around crypto as "money" is a difficult one. Money is defined as meeting three criteria: 1. Medium of Exchange, 2. Store of Value, and 3. Unit of Account. Crypto currently only serves as a medium of exchange. However, as the market develops we may see Bitcoin or some other cryptocurrency begin to function with one or both of the other functions of money. While we likely have a long road until we reach that point, this prospect is intriguing.

Smart Contracts

To remove redundancies and bottlenecks in order to streamline operations, a set of rules called “smart

contracts” are stored and executed automatically on the blockchain. The rules will be predefined

conditions under which circumstances a contract will be automatically executed. The need for third

party “middle men” verification is a thing of the past, smart contracts are where reliability meets speed

and efficiency.

Non-Fungible Tokens (NFT's)

NFTs are unique, and non-interchangeable digital assets stored on a blockchain. NFTs can be used to sell

collectibles that are limited edition and authenticated such as digital forms of sports trading cards or

even gaming addons purchased by players around the world on any platform. NFTs allow content

creators to limit the ownership status of the NFT to as little as one, creating the element of scarcity

within the world of digital assets. NFTs can be purchased through online marketplaces like Opensea , or

within metaverses created by organizations.

Metaverse

The metaverse is a digital 3D environment enabled by Virtual Reality (VR), Augmented Reality (AR), Mixed

Reality (MR) and Blockchain. The metaverse is used to create an immersive environment for all its

members. Several things are taking place in the virtual environment of the metaverse including but not

limited to gaming, sports, music, education and even business simulations. Making friends, developing

assets, buying and selling services, and taking part in virtual events has never been easiest for both

individuals and businesses.

How Blockchain Can Change Your Life as an Individual

Smart contracts can change the way all industries around the world work. For example, travel insurance

contracts can be executed automatically when certain conditions are met. Rather than going through

and arguing with your insurance agents, an automatic and immediate transfer of funds can take place.

Patient records can be more secure with the use of blockchain; control over sharing and access with

healthcare providers and researchers can remain in the hands of the patient. Locating and recalling

medicine, automotive vehicles, and consumer products is easier than ever.

In the day to day life of people, governments can work and innovate faster to help their citizens. The

secure sharing of data between citizens and agencies can increase trust, compliance and citizen services.

State and Federal elections can be voted on using blockchain with the results being unalterable and

immediately available. All in all, blockchain is here to stay and it is going to radically change not just

security and efficiency protocols in many industries, but also the day-to-day of people across the world.

Sweet Mission

Fri, 04 Nov 2022 14:07:44 GMT

Sweet Mission

Website: thesweetmission.com
Contact: thesweetmission@gmail.com

There’s many young businesses that have been put through the wringer before they were able to thrive. For Jason, his journey to bringing Sweet Mission into being is not only inspiring but a prime example of how perseverance can drastically change your circumstances.

Sweet Mission has a simple premise, to bake cookies, serve them to their consumers, give back to the community and inspire those who may feel down on their luck to keep pushing forward.

Jason’s life story flows directly into his position now, dating back to November of 2011 when he found himself laid off from the job he had held for 12 years. For him, this wasn’t simply losing a job, it meant facing homelessness. Jason found himself with few options at the time but was able to become involved with a group that offered him resources to get by as well as volunteer with to give back. With this organization, he had been involved with a food committee and helping those in similar circumstances as himself. Not wanting to stay in his current predicament forever, he decided to give his all to a dream of baking cookies. The dream started as Just Cookies and operated in Philadelphia for several months, although not without its hardships. Jason admits that he felt he had to start over and over to figure out his business and where it should be going.

Not long after this, and thinking of the next steps for himself, he described feeling the call and pull to pick up and go to California to better his chances of success. So in 2013 he arrived in California and set out to continue building Just Cookies. He shared he was able to gain some resources to get going when he arrived and by a stroke of luck arranged to use a kitchen in exchange for keeping the place clean, so that he could have a space to produce his cookies. For the span of about two years he was able to get up and running, keeping this arrangement and making his products and building his customer base.

By 2015 Jason was starting to see a different and clearer picture of what Just Cookies could really be. Cookies were the product but the idea was the bigger offering. Jason realized it wasn’t about the cookies, but his story and how he was able to build up his success and better his circumstances despite where he started. Just Cookies had a new mission to accomplish and that is when Sweet Mission was born. The premise was simple, bake cookies and inspire, empower, and encourage people. Jason firmly believes that if he was able to change his trajectory, anyone can.

Today, Jason operates with a few goals in mind. He leverages his business to now help others get to better places. His business is about providing people with an opportunity to work while enhancing their skills in efforts to create a better future. He believes getting his people educated, working and able to pursue what they really want to do with their lives is the true success his business creates.

Jason’s story has already garnered attention in other outlets, allowing him to speak at venues and inspire more lives even outside those he directly helps. He admits he’s faced many “No’s” before he’s received any "Yes's" but those no’s were the pushes he needed to persevere and prove his doubters wrong. On getting started he shared “I may never have it all figured out. I may never have all my ducks in a row. I may be 6 feet under before I figure it out. But the ducks I do have I have to run with.” He emphasized that fear of failing, or not having everything perfectly planned ahead of time can be a huge road block for so many people trying to move forward with this ideas and life, but it does not have to be the thing that totally hinders your own progress. Moving forward even without a perfect plan is still moving forward.

Jason shared how he’s been asked on multiple occasions if he would have changed anything about his journey with the knowledge he has now. He shared, “Everything I’ve been through has brought me to this point in my life and I’m supposed to be right here… People ask, ‘well why cookies?’ Well it can be anything but there’s something about a cookie that transforms a person’s life, transforms a person’s day, puts a smile on their face.” Like in life, individual ingredients don’t make for much, but when put together and brought together by the support of a team, great things can happen.

Jason owns his story, his lows and highs, and wants others to know where he’s come from and where he’s been able to get to. His goal is to use his story to show it’s not impossible, there’s opportunity out there but you have to be willing to take the risk to get there.

To support Sweet Mission while also getting some treats of your own, check out Jason’s website below!

Sweet Mission

thesweetmission.com

thesweetmission@gmail.com

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No-Till Farming: The Short vs. Long Run Debate

Thu, 03 Nov 2022 14:00:02 GMT

No-Till Farming - More Efficient and More Sustainable?

In a recent article on The Tragedy of the Commons, we discussed how one way to avoid the market failures of the tragedy of the commons is to find “win-win” situations. Climate scientists and environmental economists may point out that these ideas – those that result in a positive utility increase for both the utility-maximizing individual and the profit-maximizing firm – must be sustainable. Sustainability ensures that a resource is properly maintained for the lifetime of all utility-maximizing individuals while still maximizing profit for a business. For any farmers currently reading, this may catch your ear. Farming is one of the most frequently used examples of the Tragedy of the Commons seeing as farm land uses local waterways to irrigate, food grown on farms sustains the rest of the world, and the land itself is in many ways a privately-owned public resource. When we look at data on the productivity of farms, we find that productivity has increased at a growing rate due to technological progress, and yet revenue’s rate of change remains steady ( USDA ERS - Farming and Farm Income ). In other words, farmers are in need of a win-win that will both boost productivity and profits. No-till farming could be just that.

In Peter Kalmus’ book Being the Change: Live Well and Spark a Climate Revolution, Chapter 5 discusses why growth “always ends”. The growth he speaks of is inspired by another economist, Thomas Malthus, who in 1798 claimed that there will become a point at which population growth outpaces food production leading to a hunger crisis. Due to technological change, this has not necessarily been an issue (though hunger does still exist, and the rate at which issues in hunger is eliminated seems to have slowed according to the World Bank ), but as we discussed in our last article, the productivity levels we currently enjoy are unsustainable. One example of a preventative measure (that, again, is a win-win for the farmer and future populations): no-till farming .

Well, What is Tilling?

At the end of the growing season, a farmer tills the land. This involves taking a plow of sorts to turn over soil which in turn removes weeds and adds cover crops to the soil to increase soil nutrition. On the other hand, many farmers (specifically, 35% and growing ) are opting not to till their land. Regarding soil as a precious resource, we know that soil erosion and nutrient depletion are two concerning developments in farming. No-till farming allows for soil to sustain itself. This means the soil is not compacted, has healthy ways of draining itself, a strong variety of nutrients, and retains water well. This will ensure that our farm land can be utilized for generations to come. Additionally, refraining from tilling the land will reduce consumption of fossil fuels needed to power tractors and reduce water usage since the soil retains the water well which in turn will reduce cost and maximize profits… in the long run.

The No-Till Alternative

What is stopping all farmers from going the no-till route? I mention that no-till farming reduces costs and maximizes profits in the long-run because it takes a few years for the soil to regenerate and able to yield. Of course, when we do grow on this land, the yield is shown to be better. In the short run, though, farmers incur the opportunity cost of the lost yield. For industrialized farming, this is not possible. Another factor – social pressure. It can be seen as lazy for a farmer to finish a season and not till their land. Farmers are seen as the hard-working backbone of America, and any sign of laziness is in direct opposition to that reputation.

Farmers, and in a greater context, those of us who live on Earth and enjoy the bountiful harvest from farmers, need to decide which is more important. Do we move to more sustainable practices that create win-win situations for both the environment, ourselves and future generations that may put us in danger of negative social attention and a loss in short-run profit, or should we continue to think short term and allow a society obsessed with increased productivity to dictate our future? While environmental and economic issues are not necessarily as simple as this question (that is, there are more than just social pressure leading one to capitalize on short-run profit including short-term financial needs and feeding one’s family), these are the question we should ponder in the context of our current environment and with the knowledge we have regarding market failure and the Tragedy of the Commons.

Hairoglyfics Beauty

Wed, 02 Nov 2022 18:52:37 GMT

Hairoglyfics Beauty

Website: hairoglyficsbeauty.com
Contact: hairoglyfics.com@hairoglyfics.com

The journey to Hairoglyfics is a story 15 years in the making for Candice "Egypt" Smith, who has been licensed for that long. She recalls her love for doing hair began when she was just 11 years old.

Like most entrepreneurs, Candice’s path to business owner began with a bit of doubt on what the exact route was that she wanted to take. Having been in the field for the better part of her young adult life, Candice knew she had a passion but the direction on where to take it only came after she found a niche desire to understand the difficulties some of her clients and greater part of the population faced.

She began by delving into self-guided research on the multitudes of conditions that could arise for the folks she enjoyed serving. She found how skin conditions, underlying health issues, and even pregnancy could be having adverse effects on hair health and impacting people’s perception and self-confidence. Being she is an International herbalist, Candice was ambitious to create a way to blend her experience in the beauty Industry with her herbalist education, offering New and Holistic alternatives for clients and the greater community to take back there health. In June 2022 Hairoglyfics officially launched to serve those with all varieties of hair texture, curl patterns and conditions.

The path to get where she is was no walk in the park, but Candice owes her budding success and evolution to her renewed excitement about her products and the determinations of the team she is building and nurturing. The biggest hurdle, she remarks, was learning social media and marketing strategies. Though she is indeed an artist in her own right, the challenge of being creative in a marketing sense was foreign. She was able to assemble a team of young creative minds to not only jump into the marketing but also teach Candice their tips and tricks so that she would be able to do it for herself as her team moved on to different projects.

Candice cited her biggest fear stemmed from her need to assemble a team. Although she was born into entrepreneurship, having to lead a team through these challenges was a great challenge in itself. While she worked toward success she wanted to make sure her team came with her and that she was fostering an environment where they could shine along the way.

While building Hairoglyfics Candice received much advice from all sources both good and bad. One note she had on bad advice came from someone who was looking to push her to move forward before she was ready. Candice is someone who believes in the value of a well laid out plan before acting. “Presentation is everything. Putting intention into something means everything.”

Though she admits she had no real experience to guide her through her beginning steps, Candice shared how being prepared and completing the necessary and legal steps to being a business owner will save you a lot of heartache before it hits. “It’s not rocket science but it does have red fine print that needs to be done in steps for your own security.”

Since overcoming the first few months of owning her business, Candice remains and exudes her excitement for her business. When asked what she thought really set her apart she shared how her business and her products are family curated, made with love, all natural and organic. They value the input from their community and giving back. The icing on The cake for her, however is watching her customers results who since using the products have transformed before her eyes. There are many people that battle with confidence because of the adversity of their hair that makes them self conscious about appearance. Using Hairoglyfics Hair System is not only rebuilding self-confidence, it’s results have been amazing in helping people own their Hair and Beauty.

If any of Candice’s offerings resonate with you check out her website below!

Hairoglyfics Beauty

hairoglyficsbeauty.com

hairoglyfics.com@hairoglyfics.com

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Luxe Vanity Boutique & Studio

Mon, 31 Oct 2022 20:12:14 GMT

Luxe Vanity Boutique & Studio
Website: luxevanityboutique.com
Contact: s ervice@luxevanityboutique.com

Ashley’s journey of entrepreneurship began back in 2018 after having taken the road most traveled by and pursued the typical 9-5 job. She was no stranger to being a hard worker, having spent the majority of her life up this point working jobs since she was around 15 years old. Something she credits to her work drive and dedication.

Her plans took a turn when she found herself in 2018 sick and unable to keep up her traditional job, having to take time off and finding that the job she had shown an abundance of dedication to, fell utterly short of Ashley’s expectations to be a positive force to assist in her recovery, so that she could return to her job. This was a defining moment, having realized she could not depend on a company to see her through her personal struggle of recovery, Ashley decided the only one she could depend on was herself. Her journey to being an entrepreneur began then. She knew that she had to make it work and the only one who could make it happen was her.

Luxe Vanity Boutique & Studio was born. Starting out with home-made cosmetics that she would ship out to clients, as well as in-person make-up sessions and nail care, Ashley slowly and surely built up a client base that would not only return for repeat service, but refer their friends and family. From there Ashley was able to acquire a store front in 2020, to which she remarked only had her business “going up from there,” despite the impending pandemic. The challenge of the pandemic was something Ashley says she took in stride and went full steam into, making up for the lack of in-person shopping by shipping out products, building her online presence and adding new products to her catalog of services.

Ashley was able to make major headway in her first few years pursuing her own business but it did not come without challenges. She admits she had no formal business training and everything was new to her as she moved along the process. She found the local red tape was a hurdle because she simply was unaware of the proper process at the time. Though everything was resolved over time and she received the business certifications she needed in order to run, she cites this as having been her personal struggle with starting the business. No one will tell you what needs to be done and in what order, it’s a learning process.

When asked how she was able to keep herself on track and determined through the difficulties, Ashley shared how her faith keeps her grounded and gives her the strength to fight through the roadblocks that will be thrown your way at all points in starting and managing your own business. It’s clear by speaking to Ashley she has a natural drive to accomplish her goals and trusts in herself to see things through no matter the obstacles in her way.

Her journey has brought her along a path of personal successes as well as knowledge of herself and the business world around her. Of starting your own business, she had this to share: “I don’t believe in doing too many things. You don’t need to focus on one project if that’s not how you work. Follow your gut, trust yourself. No business is too oversaturated, no one can do it like you and that’s what will set your business apart.”

Ashley currently operates out of Lauderdale-By-The-Sea. If you’d like to check out more of what Luxe Vanity has to offer check out their contact details here:

Luxe Vanity Boutique & Studio

luxevanityboutique.com
service@luxevanityboutique.com

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Halloween This Year is a Mix of Hope and Challenges

Sun, 30 Oct 2022 14:16:29 GMT

Jorge Torres is the manager of La Casa de Los Trucos on the famed Calle Ocho in the Little Havana neighborhood in Miami, Florida. The name translates to the House of Costumes in Spanish and the store occupies a special place in the local community of this Latin American, largely Cuban neighborhood in the city. Torres’ family has owned and operated the store since 1971 as part of the first wave of Cuban migrants to South Florida. He recently said that “the last few years have been very difficult because of the pandemic.” This has certainly been a common sentiment among many businesses all over. But there is hope in communities across America this Halloween as things return increasingly to normal, yet that hope comes along with prevailing economic challenges.

Pandemic-era economic and societal policies have had an enormous impact on Halloween celebrations in the past two years as the holiday is centered around communal gatherings and house-to-house trick-or-treating activities. But now, people and businesses are hopeful for a successful post-pandemic spooky season. A study from the National Retail Federation has reported an increase of consumers planning to celebrate Halloween from 65% last year to 69% this year. Total Halloween spending is expected to reach a record $10.6 billion . While people are ready and excited to spend money and have fun this Halloween, the underlying economic situation may put a damper on the holiday mood.

A More Expensive Halloween

Inflation has become a big topic this year as everyone has noticed the rising prices on everyday goods. In a year of persistently high inflation, headline inflation was up 8.2% through September which hovers near the highest levels since the early 1980s. As households have made plans for Halloween this October, 43% or almost half of consumers polled by data and tech company Numerator noted that they expect moderate or significant impacts of inflation on their Halloween purchases.

Prices for candy, a cornerstone of any Halloween, are up an average of 11% to 13% over last year , according to new research from Datasembly. The rise in prices and supply chain issues related to refined sugar and cocoa markets have correspondingly driven up prices for popular candy given out on the holiday. Supply chain problems have also impacted the sourcing of costume articles as some of America’s largest costume manufacturers went bankrupt or were bought out during the pandemic. While the Torres’ well-established and long running costume store in Little Havana made it through the economic downturn, other businesses did not and all of this is affecting the overall Halloween economy.

Some of the mainstream assessment of the U.S. economy puts a positive spin on the increased spending and consumer activity. It seems that Americans are spending more after the past couple of years, but they are emerging from the pandemic and the economy is getting back up and running again. No doubt more people will be enjoying Halloween this year compared to previous years. However, even if consumers are spending more and businesses see higher revenues this time around, the elevated prices of candy and costumes are a major factor. Halloween is meant to be a scary holiday, but the monster haunting American consumers and businesses will be the economy.

The Tragedy of the Commons

Wed, 26 Oct 2022 23:13:20 GMT

The "Tragedy" Developed

For many of us, our day begins as we rise after hitting snooze for a third time. We may shower, dress, get ready for the day – whatever morning ritual you have, I hope it is one that brings joy – and yet for 64% of us that morning would be replete if absent a cup of coffee. While we do not often think of any plant as a finite resource, due to changing climate, overconsumption, and a lack of variety in farming techniques to boost short-term production has endangered most of the species of coffee grown. To many economists, this is a classic case of the Tragedy of the Commons . The phenomenon, developed by Garrett Hardin , is usually discussed in the framework of valuable, finite, and most importantly public, resources. Consumption of these resources leads to loss in quantity supplied which leads people to consume more than they usually would in order to ensure they consume any at all. This further depletes the resource leading to a downward spiral and a loss of an important resource.

A Nobel-Worthy Solution

Hardin, like many economists, was more cynical than most. Direct opposition to his cynicism came from economic optimist Elinor Ostrom. Ostrom won the Nobel Prize in Economics in 2009 due to her work on the Tragedy of the Commons – specifically, solutions to the problem. There are two general solutions: one is privatization of common goods and the other is Hardin’s approach of an Associate System of Exchange . Privatization would require knowledge of how to sustain the resource in question in the long-run as well as investment in technological innovation to maximize this resource’s efficiency. Ostrom’s approach requires creating environments of trust whereby we can maximize each other’s benefits through the medium of exchange. The Tragedy of the Commons is a symptom of a market failure , below we will discuss how individuals and firms alike can fulfill the role the market should play.

The Privatization Problem

If the solution were to be privatization of finite resources, one would hypothesize that businesses would have a better handle on sustainability. The word sustainability is often connotated with other environmental buzz-words often used by firms to portray as friendlier to the biosphere than they truly are. Despite the green washing, we know that firms have a lack of knowledge when it comes to sustainability. For example, the Amazon rainforest is nearing a “ point-of-no-return ” , California and other states continue to have drought issues leading to issues in crop irrigation. What can firms do, especially those with privileges to access public resources, to stop this from happening? A fundamental knowledge of how that resource interacts with the biosphere is necessary. Production inputs should be restricted to that amount which can be taken from the resource and leaves it with more than was there previously after regeneration.

A System of Exchange for Sustainability?

From a societal perspective, how can firms and individuals solve the Tragedy of the Commons via the Associate System of Exchange? Exchanges occur when the utility (economic-speak for happiness) one receives from the exchange is higher than the cost of what they gave up. Firms and individuals must find win-win situations; one possibility is a firm’s decision to trade goods and services in exchange for another firm not using a finite resource. This clearly only works because people value goods and services subjectively. In an age of misinformation and sneaky marketing, intrinsic valuation is difficult. Societal efforts are also important in maintaining a firm grip on the true cost of consumption. If a firm can play a role of communicating true value of goods and services, especially those dependent on finite resources, rational individuals will align with that purpose creating customers for that firm and a sustainable biosphere for the individual.

Shared resources play an important role in maintaining order in a society. The Tragedy of the Commons is a tragedy not just because of the fiscal implications it has, but also the societal implications. Firms may decide to continue to be complicit in the status quo production as-is, or learn from the Tragedy of the Commons and understand the long-term benefits of creating long-term solutions.

Rise of Side Hustles Signal Economic Hardship

Wed, 19 Oct 2022 22:52:19 GMT

Even just a simple look into the past reveals that economic and financial conditions constantly change and uncertainty is baked into the cake over an individual’s lifetime. Some times are easier than others and on the flip side, the harder times seem to stand out for those who live through them. The growing popularity of ‘side hustles’ in recent years could offer a glimpse into the current times America faces today and that we are indeed living through a period of harder times.

The Rise of Side Hustles

The term refers to work in addition to a primary job as an income supplement. A simple search for side hustles on the internet generates article after article with lists of potential ways to make money in your spare time. YouTubers, TikTokers, bloggers, and all manner of websites try to attract viewers and readers with catchy headlines like ‘ 10 Side Hustles That Can Actually Make You Money ,’ or ‘ Building a $15K/Month Print on Demand Business on Etsy ’ in the ever growing scramble to attract attention to online content. Common side hustles include taking online surveys, selling items online, freelance work like writing and editing text, and miscellaneous jobs like delivering groceries or driving for rideshare services like Uber and Lyft.

Evidently, this type of content is popular because a sizable number of Americans have taken up such side hustles in their lives. In a survey conducted by the small-business insurance marketplace Insuranks , a staggering 93% of over 1,000 surveyed working Americans have a side hustle. Those surveyed had either part-time or full-time employment and the majority had either one or two side hustles. A small percentage had upwards of four or five side hustles.

A Necessary Move for Some?

The troubling part of the survey concerns the top reasons Americans work side hustles. 44% answered that they do it to make ends meet or cover bills and 28% said that it was due to inflation driving costs up. In addition to that, 51% said that they are considering taking up an additional side hustle because of inflation.

Compare these 2022 numbers with a study by the personal finance group Bankrate in 2019 which surveyed 2,550 adults with side hustles. According to that study, three in ten working Americans with a side hustle say that they need the extra income to cover the cost of regular living expenses.

This trend toward side hustles as a necessity should be viewed in the context of larger economic waves rippling through the United States and in global markets. By boosting income streams with a side hustle, Americans are navigating the ups and downs of the great resignation, rising inflation, supply chain issues, geopolitical pressures, and automation . In the latest data, it is suggested that about 60% of American consumers are living paycheck to paycheck with many individuals and families either just breaking even or struggling to pay their bills on time.

Within these larger economic contexts, the increased need for Americans to pursue side hustles reflects harder times where individuals and families depend on side hustles to keep themselves financially afloat.

IRS Demands Grandmother Pay $2.1 Million

Wed, 12 Oct 2022 00:56:01 GMT

Wait, What Happened?

Every year American citizens all over the country and indeed all over the world , pay taxes, file their tax returns, and hope that they never get any further follow up questions from the Internal Revenue Service or IRS. Unfortunately, 82 year-old Monica Toth received a follow up question, and the IRS was asking for $2.1 million.

The Boston woman had inherited a $4.2 million sum as a gift from her father who had been a successful businessman in Argentina after escaping Nazi persecution in Europe. The amount was left in a Swiss bank account in her name as a safe place of storage from his traumatic experience of persecution and confiscation in Germany.

The Law and Grandma

US law requires that citizens and permanent residents with foreign bank accounts with amounts over $10,000 have to fill out a one-page form called the Foreign Bank and Financial Accounts report (FBAR) and submit it to the IRS every year.

Toth did not know of the requirement and retroactively filed reports in 2010 when she found out about it. This brought about $40,000 in back taxes which she paid, and thought was the end of it. However, the IRS came back with follow up questions. They had determined that she had violated the Bank Secrecy Act of 1970 and required her to pay the $2.1 million penalty, 50% of the account value.

Toth claimed that the demand is excessive and violates the Eighth Amendment of the Constitution which protects against excessive fines. Unfortunately for Toth, two lower federal courts sided with the government explanation that this was not a fine, but a penalty. This nuance of wording exempts Toth from protection under the Eighth Amendment.

Growing Concerns Moving Forward

This comes at the heels of President Joe Biden recently signing the Inflation Reduction Act into law, which authorizes $80 billion in funding for the IRS over the next 10 years with $45 billion earmarked for enforcement. The most controversial aspect has been the plan to hire an “army” of 87,000 new IRS agents to bolster audits. Although the notion that the IRS will have 87,000 new workers focused on auditing Americans into the foreseeable future, the nuance of the situation is that this figure is just an estimate for what those funds could be spent on. The new hires would be made contingent on the estimated 50,000 existing IRS workers who are slated to retire in the next five years.

The technical state of the IRS, its funding, and its workforce are beside the point of the seemingly predatory character that the agency has taken in the eyes of US taxpayers and in the action that it takes in taxation practices toward the American people. It can perhaps be argued that taxing US nationals living abroad is excessive. It is well-known that sooner or later, the IRS will collect their cut.

Toth’s example is just one of countless instances of someone’s life being turned upside down by the IRS. Perhaps American society would do well to consider how the US government spends its tax revenues and how ordinary people suffer under the shadow of the tax collectors.

The Six Figure Vending Machine Side Hustle

Sat, 08 Oct 2022 00:38:41 GMT

The Trusty ol' Vending Machine

It’s probably happened to you before. You were in a hurry and didn’t prepare for the hunger or thirst that suddenly hit you in the middle of a busy day. No restaurants or corner stores were there to help you in that moment of immediate need, and you turned to someone with a reliable and affordable solution. Well, you likely never came face-to-face with that someone, but a vending machine with delicious snacks and tasty beverages can be viewed as a stand in for the entrepreneur whose services have satisfied countless emergency cravings.

Vending Machines as a Business

Operating vending machines is a task that we don’t think much about, especially because we generally don’t see the person who keeps and maintains it. Yet, each and every unit of this boring and mundane fixture of modern society standing in the lobby of a hotel or a break room at an office building requires someone to run and operate it. That’s where someone like Marcus Gram comes along.

Gram, now 31-years old, was working for $30,000 a year at an assisted living facility when he moved back with his family and tried his hand at real estate in Philadelphia. While working a new full-time job there, Gram worked on his real estate venture on the side. However, it soon became apparent that he would need more money up front to do real estate in the city. So, in order to work on his side hustle, he started another side hustle.

Side hustles have become increasingly popular in recent years. The term refers to work that someone can do on the side while they keep their primary job. In contrast with a primary job, usually referred to as a ‘regular job’ or ‘day job,’ a side hustle is done in a person’s spare time. It serves as a kind of pet project that generates some extra income on the margins where there would otherwise be none.

The Side Hustle: Detailed

In Gram’s case, once his first vending machines found their lucrative sweet spots, they were returning an average of $1,500 a month in revenue. It cost Gram about $5,000 to purchase two refurbished vending machines which he stocked with snacks and soft drinks bought at the wholesale prices offered at Costco.

Today, he has scaled his business up to the point that he operates vending machines in a number of locations in the Philadelphia area and beyond to four states. His company, Joyner Vending , brought in over $340,000 of revenue in 2021 from 25 vending machines. Once Gram achieves his income goal with the vending machines, he wants to pursue his original plan of investing in real estate so that he can retire early.

According to Gram, it is a semi-passive income business because the sale of the products is passive, but it requires diligent maintenance on the part of the operator to keep up consistent sales and understand customer preferences. The vending machine operating market itself is quite decentralized with the top four operators accounting for only 3.2% of total industry revenue. This means that there are a lot of opportunities out there for an individual to start a side hustle with just one or two vending machines just like Gram did at the beginning.

Next time you see a vending machine, think about all the other small functions in the world that everyone else is overlooking. Who knows? You just might find your next side hustle.

Snapshot: Electric Vehicles

Tue, 04 Oct 2022 15:26:48 GMT

History of Electric Vehicles

Affordable, efficient, quiet, sleek, modern - these are just some of the things you hear when electric vehicles (EVs) are discussed nowadays. However, you may not know that electric vehicles have existed for centuries. In fact, the first electric vehicle was introduced in 1832 , almost 200 years ago.

Despite its early introduction, the reign of electric vehicles was short lived. Initially, gasoline powered cars were cheaper to manufacture and therefore cheaper to purchase. As the infrastructure of developing countries grew, gasoline powered cars allowed people to travel interstate and internationally, whereas electric vehicles were difficult to charge while traveling long distances. All this saw to the decline in electric vehicles by the mid 1930’s.

Over time though, oil prices soared and gasoline was in short supply, so electric vehicles were revived. The nickel metal hydride battery technology released in the Toyota Prius, the world's first mass produced hybrid electric vehicle, was a real game changer.

Modern Problems with EV's

The sooner we get to EVs mass production stage in perfect competition, the sooner we can stop relying on foreign oil, and avoid the rising gas prices. Tesla, GM, Ford, are few of the companies taking charge in expanding the ever-going sector. Currently, EV prices are $10,000 higher than the industry average of $46,329, which includes gasoline powered cars. To encourage the purchase of EVs, several states provide tax credits that can lower the cost of the vehicle.

Most electric vehicles come with a “level 1” charger, which is slow (can take up to 40 hours for a full charge) and inconvenient. However, many buyers can also purchase a “level 2”charger that charges the car in less than 8 hours, and can cost upwards of $2,000.

Charging Dilemma

Currently, there are many types of charging stations in the US. However, the different types of charging stations mean that different cars cannot plug into every station. This may make it so that expansions to the charging grid, don't necessarily help out all electric vehicle users, as not all cars can charge at all types of charging stations. Europe on the other hand, has taken a different approach. They have enacted legislation to ensure car manufacturers allow for different types of adapters to be plugged into their cars, allowing for consumers to charge at any station throughout Europe. This may be something we see adapted in the US as electric vehicles become more common, though there is nothing currently to suggest that will happen any time soon.

Battery Technology

Lithium-ion batteries, however, are not without their own risks. For starters, they degrade over time, some sooner than others which can reduce the total mileage the car can go in a full charge. There's also some evidence to suggest that back-to-back fast charging can damage the battery by overheating it. Furthermore, lithium-ion batteries pose a fire hazard when they are damaged, or improperly manufactured. Getting into a car crash in EVs can cause the car to blow up, which can result in extreme injuries or even death, since the battery pack lies directly underneath where the passengers sit in most EVs.

Adding to the list of potential drawbacks, lithium is a very scarce resource relative to its soaring demand . Countries and states all over the world are boosting green energy and electric vehicle production, some have even sworn off gasoline powered cars by the end of the decade. Given where we are headed, the world is going to need to produce lithium at 500% of current capacity by the year 2030 to support demand. Lithium production is a very time and cost intensive process; a greenfield lithium brine project can take up to 10 years to build and tens of billions of dollars.

EV's & The Electric Grid

With more than a dozen states committing to go full electric vehicles by 2035, the electric grid will soon be over-burdened. The current state of electric grids across the country can't handle the additional load, therefore the transition from gas-electric cars will require electric grids to expand . The transition to carbon-free electricity will ensure an entire nation of electric cars can comfortably charge to full power, while benefiting the planet and human-life.

Smart charging is also being introduced across states where electric vehicle sales are booming, to ensure that cars plugged into charging stations only draw power when demand is lower; while still charging the car a sufficient amount on low power to sufficiently satisfy the average commuters need.

Where Do EV's Go From Here?

President Joe Biden has set a goal of 50% of new vehicle sales to be electric vehicles by 2030. Regulators and investors the world over are coming together to transition towards a cleaner, green future. Even when the entire world's entire auto-motive industry is electric, it is expected to only add about 25% electricity demand, whilst the production forecast of electricity supply is expected to grow 60% by 2026.

Additional support for EVs grew with the war in Ukraine, since gas prices soared due to supply constraints caused by the war. The year 2022 is expected to be one of the worst winters in Europe due to an energy crisis, these problems could be attenuated if an earlier transition to electric vehicles and it's accompanying move to alternative energy sources for the electric grid occurred already. However, the industry still has a long way to go in terms of infrastructure development.

Find a Charging Station Near You

Tiny Homes for Homeless Demolished in Las Vegas

Wed, 28 Sep 2022 14:02:53 GMT

Privately Built Tiny Homes: Rejected

"I'm angry! I'm hurt! Mad. It's sad. The whole damn thing is just sad. You take us from something and put us back. It's just sad." Those were the words of a woman named Angela after North Las Vegas code enforcement officials carried out the demolition of a community of tiny homes built to house the homeless in the famous southern Nevada city.

This isn’t the first time that the authorities have demolished the homes built by the non-profit New Leaf Building Community. In November of 2020, the city did the same to a couple dozen tiny homes serving the same purpose, although that was on public land. The homes destroyed this time were on private property owned by the non-profit itself . While tiny homes have been implemented in other American cities including Reno, Nevada , Las Vegas has freshly rejected them in this case.

New Leaf’s tiny home shelters were deemed “uninhabitable,” “unsanitary,” and “creating a fire hazard” according to official housing and safety codes in addition to zoning standards. It took one swoop by government authorities to wipe out what amounted to five months of effort and resources by volunteers whose vision was to provide basic shelter for people struggling with homelessness.

Housing and homelessness have grown into major issues in America during the last decades. The pandemic and economic conditions of the past handful of years have made the problems even worse. A trend in recent years has been the tiny home movement where one way out of housing difficulty is to live in simplified constructions with minimum dimensions. While some choose to live in these homes for their lower costs or simplified living spaces, the benefit that tiny homes can bring to a homeless person is dramatic.

It comes down to the simple comforts of a roof over one’s head, a locking door, and the sense of security that is so often taken for granted that would go a long way in helping a homeless individual break out of that situation. Instead of focusing on immediate needs like taking care of belongings and getting a full night of rest, the homeless who have basic shelter can begin thinking a few more steps ahead and plan to improve their situations.

Tiny homes can be seen as a creative solution to homelessness that has sprung out of the local community. It grows out of the relationships and bonds between people who need help and those who want to lend a hand. Even if these tiny homes do not stack up to the quality of more permanent and traditional housing arrangements like apartments and multi-room houses, the homeless individuals speak for themselves when they voice their preference to stay in a tiny home rather than on the streets.

Taking away these tiny homes pulls the rug out from under those who had just begun getting back on their feet. Here, state regulation becomes an obstacle to free individuals who are taking action to find innovative and effective remedies to this growing problem in their community.

Natural Gas Ban in San Diego

Fri, 23 Sep 2022 19:06:48 GMT

Owner's Nightmare or Welfare to Society?

In the latest vote to update San Diego’s Climate Action Plan , the city council voted unanimously to ban the use of natural gas in new homes and businesses. The plan includes prohibiting the use of gas range cookers and gas heaters in construction of new buildings, as well as retrofitting existing homes and businesses.

The primary goal for the Climate Action Plan is to reduce carbon footprint and reach net-zero emissions by 2035. This is in line with other initiatives such as the Regional Decarbonization Framework , which sets initiatives to plant more trees and commitment to fully provide electricity from carbon-free sources in the region of San Diego.

Critics of the plan fear the costs over electrifying all homes and businesses would be too idealistic due to the lack of renewable energy generators that can power San Diego. They believe that the pipeline networks are ‘crucial’ for a carbon-free network, and that the focus should be to ‘decarbonize’ gas to become renewable. Todd Gloria, mayor of San Diego, spoke to a public hearing after the vote, stating that “…the financial cost and human consequences of inaction are almost unimaginable.”

This is not a new precedent for Californian cities, as similar bans occurred in Berkeley and San Francisco in recent years. What is new, is the valuable information gathered from case studies on cities that banned natural gas, including the total costs of retrofitting and expenses, the enforcement of these policies by the local government, the health benefits over electrification, and the actual effectiveness in decarbonization from this ban.

Natural Gas Consumption of the Average American

Before analyzing the results from these case studies, it is important to know the significance natural gas has on the average person. Natural gas serves as a convenient solution to one basic human need: heating. Coal and petroleum was, and still is in developing countries , the cheapest option for central heating, but came with worse air quality and environmental impact towards its surroundings. The widespread use of natural gas for central heating was a recent phenomenon, growing up to 400% in production since 1950 . This phenomenon came from replacing coal as the primary heating utility and electricity generation, due to better availability, lower production costs, and ease of transportation and storage from improvements in gas-using technologies developed in the late 20 ^th century.

Case Studies on the Impact of Natural Gas

Yet despite the convenience of natural gas, its environmental impact and increasing costs are making the resource less and less desirable. The vast usage of natural gas is a main contributor to climate change due to the methane and carbon dioxide leakage into the atmosphere.

In addition, natural gas is a global commodity correlated with oil prices, and market shockwaves have occurred historically. According to Katherine Blunt’s ‘Californa Burning: The Fall of Pacific Gas and Oil,’ the largest oil-producing countries in the Middle East halted exports and production in protest for US intervention in the Arab-Israeli War. This more than doubled the price per barrel and created a global natural gas shortage. Even slowdowns in gas production from weather conditions causing supply issues can make power more expensive to produce. These price spikes reduce the reliability of natural gas as a heating component and electricity generator, where even whole cities can face brownouts from not being able to afford the resource , not to mention the increase in electricity bills for the owners.

Natural gas is also a main contributor to many forms of pollution, most commonly air pollution and water contamination. These cause many health hazards for society , including increase in risks of asthma, cardiovascular disease, diabetes, leukemia, and lymphoma. The pollution also induces community disruption , as poorer regions are more exposed to the pollutants due to cheaper land value for the power plants.

The transition from natural gas to electric only would be just as costly as the transition was from coal, if not more. However, new homes built with electric heaters and stoves in mind are cheaper due to not requiring the gas pipeline infrastructure needed to install in the building projects. In addition, there are less chances of fire hazards from gas leaks and faulty gas infrastructure, which means less potential buildings on fire, less of a strain on fire department’s resources, and less renovation costs to homeowners from a potential fire.

Along with the Costs, Come Some Benefits

Despite the costs of retrofitting and fresh expenditures, there are major economic benefits from the electrification of homes and decrease in natural gas consumption. With less pollution caused by natural gas production and consumption, the health hazard risks decrease , which leads to a more productive society and less strain on the medical system. In addition, the businesses specialized in electrification of buildings will produce more jobs as demand will hike after a natural gas ban.

Natural gas bans will likely be the dominant headline for major cities that are planning to vote on the issue. Its perceived effectiveness on dealing with climate change and leaving responsibilities on the owners to modernize their buildings makes the bill attractive to legislators that need a quick and cost-effective solution to this global problem. It should be noted that only banning natural gas as a solution will create a paradoxical outcome in which the consumption of natural gas is actually increased. This is due to the fact that less than half of the energy contained in gas is converted into electricity, thus more reliance on electricity means that the electrical production must be renewable as well. This may not be a problem for California as they are committed to having pure carbon-free sources of electricity, but other cities or states that plan on fighting climate change must consider this concern.

The Impact on US Natural Gas Industry

These bans, however, are the biggest threat to one of the largest industries in the United States; the gas industry. The natural gas bans effectively halts companies from providing heating utility to homes and businesses, harming their revenue sources in these cities and forcing service companies based on assembling gas pipe infrastructure to shut down in the region.

The gas industry is aware of the shifting tides against them , and arranged methods to prevent these bans and other measures from taking place. One of these methods is lobbying state governments to enact ‘ preemption laws ,’ with most of these laws resembling Georgia’s House Bill 150 that “prohibit governmental entities from adopting any policy that prohibits the connection or reconnection of any utility service based upon the type or source of energy or fuel.” As of February 2022, more than 20 states have adopted these laws , effectively limiting local governments from having control over their own utilities. In a sense, this means state governments have chosen to represent the interests of the gas industry, rather than letting city councils vote on what is best for them.

How This May Affect You

In order for residents and business owners to prepare for the possibility of natural gas bans, it is necessary to search up their local government’s upcoming legislations and votes. This is easily visible through government websites that provide searches for legislations of any kind , including natural gas bans and government’s roles on utilities.

If there is provincial momentum brewing for fighting climate change, and/or the city government is planning or currently voting on the issue of natural gas, now is more than ever the best time to plan out retrofitting one’s owned buildings and its projected costs. These costs are based on how energy-dependent the home or business is, both in how old and intricate the pipeline system is, and expenses from energy consumption.

Snapshot: Interest Rate Hikes and Your Local Housing Market

Mon, 19 Sep 2022 15:52:57 GMT

Federal Reserve Interest Rate Hikes

The Federal Reserve interest rate hikes trying to tame high inflation have caused most asset classes to suffer double digit losses, including real-estate, stocks, bonds, and crypto. Even though mortgage rates are influenced by the 10-year treasury yield, and are not directly impacted by the FED rate hikes, these hikes do influence mortgage rates.

Mortgage lenders tend to price in future expectations of interest rate hikes by the FED, even before they are announced, therefore affecting your local housing market. The 30-year mortgage rate reached 5.5% , nearly doubling the rate from 12-months ago, and the housing market still does not reflect the higher mortgage rates.

Average 30-Year Fixed Rate Mortgage

Housing prices have been at peak levels throughout the pandemic due to the FED funds rate being near 0%. Now that the rates are higher, in theory that should mean that home prices should be lower. However that is not the case, interest rates surged in a matter of months and the housing market is playing catch up to cool down. Rents have surged alongside inflation, and the average consumers are being punished.

How Interest Rate hikes are Affecting Buyers and Sellers

As borrowing costs for businesses and consumers rise, the era of ‘cheap money’ through 2020-2021 has ended, and companies in the face of a recession are letting people go. Ford is laying off nearly 3,000 workers . High inflation, higher interest rates and job losses could cause a surge in home foreclosures and bankruptcies throughout the country.

Even half a percent point raise in mortgage rates could mean hundreds of dollars extra in mortgage payments, therefore hurting both buyers and sellers. Investors/sellers that were hoping to cash in on higher housing prices during the pandemic, may no longer be able to sell their properties due to less demand. However, fewer buyers could mean cheaper prices, and if timed right, purchasing real estate at cheap prices could prove very fruitful in the long run for investors. Keeping in mind that interest rates do tend to fluctuate over time, and even though the interest rates seem high now, they will eventually come down and a buyer will be able to refinance their remaining mortgage at a lower interest rate.

Currently though, this steady increase of mortgage rates in the last few months have affected different states (areas) across the US disproportionally. The wealthier parts of the country like New York’s Hudson Valley are yet to see any significant difference in people purchasing homes, while other parts of the country are seeing dramatic drops in mortgage applications as well as housing purchases.

Even though the Fed has some control over the housing market in the US, the pandemic has also pushed us into a historically unprecedented situation. With supply chain issues, manufacturing shortages, and unemployment, there are simply too many variables affecting the housing market. Furthermore, builder sentiment regarding the uncertainty of the market is also a key factor.

Builders do not know how or when the rates will start coming down and sales will start going back up again. Therefore, many builders are now stuck with previously unsold inventory and are withholding any future building prospects.

What You Should Consider Before Purchasing a Home

Understanding interest rates and current housing market conditions could affect your financial health in a variety of ways.

If your interest rate is high then you are paying your lender more on top of the principal amount, to lend you the money for your purchase. Generally you should be looking for fixed-interest rates so that you know exactly what you will be paying for the duration of your mortgage. Recently interest rates have been very volatile because the Federal Reserve raised the Federal Funds Rate to discourage borrowing and slow consumer demand , since lower interest rates increase demand, drive up prices and inflation. Right now the main goal of the FED is to tame down inflation.

However, after interest rates have significantly increased an economy may enter into a recession. There's four stages in an economic cycle: peak, recession, trough, and expansion. During the recession or trough stages could be excellent times to make real estate purchases since historically, that's when interest rates start coming down to enter the expansionary period, causing asset prices to start going up eventually towards their peak.

Bottom Line

Every geographical area and its local housing markets are reacting differently to the FED raising interest rates. Understanding for yourself what may be a good time to make a home purchase where you live, at a good price and interest rate is absolutely essential for your financial health.

Student Loan Forgiveness: A Misunderstanding of Tuition Costs

Thu, 15 Sep 2022 14:39:07 GMT

Saddled with Student Debt

Mikey Collard is a senior vice president at the communications firm he works for in Salt Lake City. He took out more than $100,000 in loans to pay for a masters’ degree in public relations through a two-year program at the University of Southern California. Because of the interest on top of the amount he borrowed Collard, now 39 years old with three kids, says that the total debt he owes in student loans is “ still astronomical ” He has already paid about $85,000 toward the loans, but still has $69,311 left to go.

Along with an extension on the student loan payment pause introduced in the past years, the Biden administration’s new Student Debt Relief Plan through the Department of Education will provide up to $20,000 in debt relief to Federal Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers with loans held by ED are eligible for this relief if their individual income is less than $125,000 (or $250,000 for households).

Collard’s example highlights the quantifiable fact that despite the massive sum that this program will cost and the hefty amount that this implies for the individual borrower, it still isn’t enough to alleviate the debt burden for those who borrowed significantly more to pay for their degrees. While this does not discount the many who are feeling real relief from this, the discourse on the new plan doesn’t seem to call enough attention to the fundamental problem that underlies the entire effort to battle student loan debts: the dizzyingly high cost of education in this country.

Loan Forgiveness Misses the Mark

The plan sets up backward incentives that many government programs result in. Now the college educated white collar professional class receive a direct benefit while the blue collar working class, that typically has a higher unemployment rate without the same opportunities to go to college, is squeezed and cannot dream of enjoying such financial relief. Those who either did not borrow money to pay for their degree or those who did not get to go to college at all are left out and feel punished.

Perhaps society has made an irresponsible effort to encourage teenagers to take on debt for a degree. If a business owner spends thousands of dollars on starting and operating a business and the business fails to bring in a return on investment, then the signal is that the price paid for the venture was not worth it for the individual and not valued by the rest of society. The price signal of higher education has been communicating that to Americans for the past decades and those messages have been ignored.

As it stands, a high school senior would be flatly denied a tens of thousand or hundreds of thousand dollar loan at any bank due to a lack of income, collateral, money to submit for a down payment, and credit history. With student loans however, the debt is directly backed by the government with no bankruptcy option so anyone who makes this deal with the devil kind of loan is given one. There is a moral hazard in sweeping the costs of this under the rug.

Denver Police Shooting Prompts Food Truck Ban

Tue, 13 Sep 2022 13:47:48 GMT

The Situation

Mass shootings have become an unfortunate mainstay in the American news cycles. While many are carried out by civilians, unjustified police shootings are sadly not uncommon in the US either. A recent incident in Denver left six injured and will end up far reaching ripple-effects for many in the community who had absolutely nothing to do with it.

The shooting occured at around 1:30 in the morning in Denver’s Lower Downtown (LoDo) neighborhood. The area is a historic district full of restaurants, bars, and all manner of late night buzz which was what a handful of people were enjoying while they waited in line for a food truck at that time. Police were responding to an altercation taking place in front of an area beer hall when they confronted 21 year old Jordyn Waddy.

The police correctly noted the possible handgun in Waddy’s hoodie pocket or waistband, but police bodycam footage shows that Waddy reached into his hooded sweatshirt pocket seemingly to drop the weapon onto the ground. Officers responded to the situation by opening fire. Waddy and five bystanders in line at the food truck were injured.

The Food Truck Ban

While the police have admitted that ‘something went wrong’ with their approach in this case, the City of Denver and the Denver Police Department (DPD) put the spotlight on a larger trend of crime, disorder, and large crowds in the area at night. Their response has been to ban food trucks from the area on the busy weekends.

Food trucks have enjoyed the lucrative stream of business due to their proximity close to the bars and late night haunts of the neighborhood. With this ban they have been forced to set up many blocks away where there is far less business. Sanjin Mutic, an immigrant from Bosnia who runs a gyro food truck with his family, spoke to the city council about the matter. He argued that the ban would do little to reduce the problems that the government is trying to solve and it would end up negatively impacting those who run the food trucks.

The Negative Effects

The vast majority of food trucks affected in the area are small-businesses owned by immigrants. Those who put in the work on the weekend evenings serving customers there have depended on the business to support their families. Mutic noted that the 20 or so food trucks there support 30 to 40 family livelihoods.

The city has since modified the ban to allow six food trucks to apply to operate in the LoDo district on those weekend evenings although they will be required to close by midnight. This still does not make up for the loss and hardship that the full ban inflicted and it still severely hampers the food truck economy that used to operate freely. Applicants have also complained about issues with the online application portal.

Law enforcement’s initial mistake of wrongfully opening fire on civilians has now opened up a whole other can of worms where the solution does little to address the issue and goes on to cause more problems that affect even more people.

Remote Workers Offered Relocation Bonuses in Small Town America Vote with Their Feet

Mon, 05 Sep 2022 19:54:39 GMT

The Work From Home Revolution

‘Work from home,’ ‘remote work,’ and ‘digital nomad’ quickly became popular terms after COVID-19 pandemic policies forced people to stay at home. These terms describe the increasingly popular shift in the labor force from in-office work to working from anywhere, which was made possible by advancements in digital communications technologies. Many jobs that used to require a worker to go into an office, sit at a desk with a computer, and go to meetings with colleagues have pivoted to partly or fully online. Those who have had a taste of remote work are also pressuring employers to make the change permanent and some workers have even left jobs because they do not allow them to stay remote.

The Small Town Approach

During this transition, a number of small towns and cities across the U.S. have put forth initiatives to offer relocation bonuses for people to move in as remote workers. Most notably, these are places that are usually overshadowed by the more popular and more expensive large cities like New York and Los Angeles.

A couple of the most generous rewards that are valued at more than $20,000 are offered in West Virginia . Lewisburg, Morgantown, the Greenbier Valley, and the Eastern Panhandle are some of the places in the state that are putting up $12,000 in addition to access to complimentary outdoor gear rentals, co-working spaces, and social networking events in order to attract those who are working remotely and employed full-time outside of West Virgina.

This is a niche scene that has emerged among some small towns and cities in the country that have experienced a decline in recent decades and are seeking to reinvigorate their communal economies. For these alternative urban areas, this is a bet placed on the expectation that an injection of new faces and new talent will set them up for success further into the future.

Benefits Beyond Economic Activity

New residents drawn from different parts of the country may not only spark economic activity, but also provide an opportunity for social renewal. Many of these programs include a social programming dimension. The West Virginia examples include benefits to enjoy outdoor activities and organized community gatherings. One offer in Greensburg, Indiana even offers ‘ grandparents on-demand ’ to match local senior citizens to babysit children in addition to passes to see plays at the local theater.

For the more adventurous types in the white collar worker space, this presents an opportunity to explore places to live that are off the beaten path that have much lower costs of living, lower population densities, and large bonus sums in addition to the higher than average salaries associated with the types of jobs that have gone remote. The small towns and cities themselves may also experience noticeable changes depending on how successful and popular these programs end up becoming. Like in any migration wave, positive and productive outcomes will depend on how effective the newcomers integrate locally.

The coastal cities that have traditionally attracted middle and higher income workers have become less attractive in recent years because of higher taxes, and social and political tensions. For now, it appears that the scale of these programs will allow for these small towns and cities to dip their toes into a new pool of people to contribute to their communities. Those who apply and take part in these programs are indicative of people voting with their feet, with the freedom to say no to the coastal norms and move where they will be treated better socially and economically.

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