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Week of 3/13/23

Morning Minute 3/14/23:

“Is economic freedom important to you?”

Our Constitution provides many freedoms including freedom of speech, press, religion, and assembly. It does not address economic freedom specifically. However, the authors understood that without economic freedom those listed freedoms may not be available.

What are the building blocks of economic freedom? They are freedoms of mobility, employment, education, association, and location. Let’s examine each of these.

In the U.S. you may travel freely throughout any of our 50 states. If you live in Minnesota and vacation in Hawaii, you simply go there without restrictions. You may travel using a motor vehicle or using trains, airplanes, boats, or buses. The freedom of mobility creates other freedoms as well.

You are not pre-ordained to work at a particular occupation. You may work in a different job than your parents. Freedom of employment allows you to seek other opportunities. You may work in the trades, in business, in education, in medicine, or in government. You may work for someone else or for yourself. Plus, you have the freedom to change occupations whenever your circumstances change.

Freedom of education allows you to seek the instruction that is best for you personally. Although K-12 schooling is required, it may be obtained through homeschool, a private school, or a government school. You may get specialized training online, through a union or cooperative, a government program, or a non-profit organization. You have the freedom to decide what education is best to help you achieve your goals.

You are not constrained by law as to whom you may associate with. There are literally thousands of organizations, unions, churches, and clubs to choose from. You are free to join any of these that you qualify for. In our free and open society, you decide with whom you want to associate.  

Based on your income and credit, you have the freedom of location. You may live in a single family home, an apartment, or a condo. You may be 2 blocks or 6 hours away from work. Thus, when opportunities occur beneficial to your family or business, you can always relocate to a better place.

In summary, we enjoy the economic freedom to change locations, education, occupations, and associations. And, the freedom of mobility that you derive by being able to travel provides you with the means to a more productive and enjoyable life.

“Is economic freedom important to you?”

And, that is today’s Morning Minute.

Morning Minute 3/17/23

Morning Minute 3/17/23:

“What Will You Invest in?”

Your aunt in Montana just passed and left you a $25,000 inheritance. What will you do with this money? Let’s examine some pros and cons of your decision.

Take a dream vacation because you may never have this chance again? PRO: You will have a great time, meet some wonderful people, and take lots of pictures/videos that you can enjoy forever. CON: The money will be gone soon with no tangible return on the investment.

Upgrade to a new(er) car with no payments? PRO: You upgrade/replace your current vehicle with one that is much less likely to need costly repairs in the next 3 years. CON: You invested in a depreciating asset that quickly decreases in value.

Pay off your credit card balances. PRO: You eliminate those monthly payments and high interest rates. If your rates are 25% and payments total $500 per month you will realize a terrific return on this investment. CON: The money will not be available for later expenses. Plus, if you start using the credit cards again you will be back in the same shape a year from now.

Invest in stocks/bonds for your retirement. PRO: Properly invested you may realize a double digit gain while delaying paying taxes on part of the money. CON: If you don’t pay off some high interest rate debt your overall gain may be significantly reduced,

Buy a home…stop renting. PRO: Start building equity in your home instead of paying your landlord. Interest paid on the home loan is tax deductible. Plus, home owners usually have higher credit scores than renters. CON: Home ownership means you pay for your own upkeep and repairs.

Buy a rental property. PRO: Properly done you will gain increased equity in an appreciating asset while creating a positive cash flow to help with other expenses. CON: Rents may not be paid on time. Plus, there will be aggravation, maintenance, and repair costs.

There are other options as well…each with a PRO and a CON. There is no universal right or wrong answer. And, your decision will say a great deal about you and your relationship with money. How you handle positive opportunities now, may indicate how you may handle negative ones in the future.

Please take some time to think about this. Then, please share the action(s) you might take if you received a $25,000 inheritance.

“What Will You Invest in?”

That is today’s Morning Minute.