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BA Deere
Honored Advisor

Dow 150,000!

That`s what they say it needs to be for city people retiring in 2045 for their 401-whatevers to afford them to retire comfortably.  And apparently Dow 150,000 isn`t unrealitic, so the companies..Deere, Dupont, Monsanto, Mosaic and such need to rise in value 8 times by 2045.  My hillbilly math says that the products they sell will have rise alot to have those values go up like that.  So, will corn, beans wheat and livestock go up 8 times to match the companies by 2045?

 

I don`t think so, look back 30 years to the 80`s, land started out the decade at $3,000/a, dropped to $1,000/a in `85 and recovered to $1500 by 1990.  The Dow finally hit 1,000 in the early 1980`s and today it`s 18,000..it went up 18 times in value in the last 30yrs.  The price of corn in the 80`s was about 2 bucks give or take, i`ll be generous and say corn is 4 bucks give or take today, so the corn price doubled in 30 yrs, but the stock market went up 18 x`s.   Land went from let`s say $2,000 to $10,000 today, but land hopefully pays 4% annual dividends.

 

The gurus say that by 2050, the world population will swell to 9 billion, perhaps if the extra population will have a standard of living that ultimately increases the valuation of companies?  But I`m sure those of us that might be around in 2045 will see it as just "trading money" even if commodity prices rise somewhat like they should.

 

https://www.msn.com/en-us/money/retirement/why-you%e2%80%99ll-need-dow-150000-to-retire-comfortably/...

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9 Replies
k-289
Senior Advisor

Re: Dow 150,000!

Maybe  farm land could increase 500 %  if we could get more traction on the slo-again of ''  feed  the  world ''' ---

 

Wonder if the real estate tax might get a larger bump ?

 

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BA Deere
Honored Advisor

Re: Dow 150,000!

Well, stocks in Weimar Republic and `07 Zimbabwe went crazy high, I`m sure that the inflation raises all boats including farmland.  If they can figure how to have inflation without it being a bubble and make it last 30 years.  They`re doing pretty good readjusting the way inflation is figured and such. 

 

But there must be well heeled families with that long term view of 9 billion people and they ain`t making more land and stuff that they see paying $15,000/a for the neighboring quarter isn`t a bad investment, even with cash corn currently $2.88.

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Kay/NC
Honored Advisor

Re: Dow 150,000!

There's a whole lot to consider in that post. My new car for college commutes in 1972 cost $3000. Comparable to day probably 7 times as much. We sold 65-cent hogs in 1980s and I think they may be about that today...I am unsure. Our first home, which was a nice 3-BR with amenities, cost $32.500 in 1973. It insures for roughly a quarter million today, so 8 times higher. Farmland we bought in 1994 for $600 per acre tax values at $3000-3200 today, so 5-ish times more. I am saying it's the same land, the same ham, the same house...all that is different is that each dollar is just that many times worth less.
BA Deere
Honored Advisor

Re: Dow 150,000!

Yes, it`s hard to correlate the different prices of items.  Like farmland, it hasn`t been that many years ago the national corn yield was 110 bushel and land price was $2,000  now the yield is 175 and the price is $10,000/acre.  You`d think that just doubling the land price would be more than enough to put value on the increased productivity.   But, you have opperations that have a old money warchest and are very willing to bid 5-6 times more than normally thought value.  Then outside money that has no limit or basis in reality...some people just must have so much money, they got a house in California and a house in New York and 6 Ferraris in each garage and a yacht in Miami...that "what the hell, I think I`ll buy farm land too...here`s a blank check, Jeeves"  .  That ups the ante for everyone else too, good or bad.

 

But with cars these days, they got 0% down, 0% financing for 72 months...good lord they pay on a car for 6 years, probably wears out before the contract is done, so they roll it on another new car loan.    In the olden days, it was 36 months and 10% interest and you could make a better deal paying cash.  But that`s why cars are so danged high, if you just have a job and can fog up a mirror you too can be sitting in this fine automobile today! 

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Kay/NC
Honored Advisor

Re: Dow 150,000!

My honest assessment of most sales today is that the real motive/profit is in financing the purchase. The items we buy themselves are just a means to that end to the seller. Why else does Belk give an extra percentage off on clothing if you buy with your Belk card? Ford Credit, JD Credit, etc., are all too happy to hook another balance onto a bill, as long as minimum payments (which they actually prefer to timely/accelerated payoffs) are all that counts to them. Think it over, and get back to me on that one....
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BA Deere
Honored Advisor

Re: Dow 150,000!

The brick & mortar retail stores are having a tough go of it.  I don`t know if you have Kohls stores out there, but my Wife buys all kinds of clothes and items with coupons in emails..and they`ll have 50% off sales and with a $25 off of a $100 purchase they are about giving stuff away, I don`t know how they stay in business.  It must be enticing people to buy because it`s cheap and putting it on the Kohls credit card and also picking a few items up at regular prices.

 

But Sears and K-Mart must`ve been too slow getting into that game.  i remember 10 yrs ago when our kids were small we`d go to the Best Buy ectronic gadget store and it was packed and the kids spent all afternoon there.  But today it`s pretty empty, everyone buys electronics online from Amazon and such.  With clothes these 2nd hand stores of "gently used" clothes are very popular, kids can have the latest fashions cheap.  The retail business has been turned on it`s ear. 

 

And I don`t subscript to many snail mail magazines or newsletters, the information is very stale.  I want fresh info that`s time sensitive and I hate to admit, I want it FREE.   I get a text on weather and grain prices on my phone from Farm Journal, well they called me and said 'your free trial is over to continue it`ll be $10/month" ...or some price.  I honestly told them "Look the text info is great, but I`ll never pay for it, I can go to my elevators website on my smartphone and all that information is free"...they didn`t argue..and I`m still getting their texts for free, I suppose the advertisement sort of pays the freight for them.

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Kay/NC
Honored Advisor

Re: Dow 150,000!

Traffic/hits drive advertising rates, I think...just like Neilson ratings did for TV in the Dark Ages...you never hear about old Neilson anymore. I ugess so much of the broadcast is really cable and satellite now... It is a Brave New World. We have had some medical bills of late, and every one comes with the option to pay online. It saves a few cents for the stamp and the check stock, so I generally exercise it. Ditto for almost every regular monthly bill, auto-paid with the credit card, so I get rebates, and no stamps or checks to buy. I am a dedicated "vintage" shopper, since I find the quality of older items isn't matched in most newer ones, except the electronics, of course. My favorite savings tip is to buy someone else's custom-framed items at vintage, complete with beautiful multiple mats and non-glare glass, and insert my own art into them. Did up a photo of grandson today at a copy shop...emailed them the file from the 21 mp camera in the newest smartphone, and I was done 13x19 in five minutes for five bucks. Will hit the summer clearance sale at the big "pickers" warehouse in town on Saturday, pay 70% off for a frame for it, and have maybe $15 in a nice piece. You can't pay the sales tax on a custom framing job that size for that price.
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lsc76cat
Veteran Advisor

Re: Dow 150,000!

Easy to sell @ 50% off when you mark it up 300 to 400 percent to start with.

Marketing is quite a game.

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sw363535
Honored Advisor

Re: Dow 150,000!

That is such a big statement..

 

There are a lot of folks that just don't care what something costs.... They just want a good feeling over the deal....

Some need to be able to haggle a price down a little, some need a "reduced price" percentage,  some love to get a brand name with a coupon...  

 

And they sure don't care if the store survives in their town.  Service just isnt important..... we are so in love with disposability.

 

 

I remember my son getting this same CD player at walmart....... it was a cheap player and didn't last long the way he used it... But walmart had a replacement policy......  I think he got 7 or 8 of them over time and only paid for the first one, come to think of it, it might have been a Christmas gift.

That policy created loyalty, but was finally stopped by parents who didn't like what it taught.

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