The Difficulties of Maintaining an Economics and Finance Blog

Since this blog is about economics and finance, it is difficult to build a large audience of college students because most would rather be doing something a little more fun than reading about economics during their free time. Therefore, I advertised on other blogs, websites, and social media to show other college students that finance and economics can be interesting. That is actually the reason why I wanted to have an audience of college students. I want to help my generation understand the value of a dollar, how the world works, and how to make the world a better place. I do admit that I do not have a lot of viewers on the blog, but I hope that those who have read it have been impacted by it as much as me because I have gained a greater understanding of finance and economics through the process of writing about it almost every week.

A lot of work and research is required for this type of blog because finance and economics are always changing and are there are an endless amount of topics to discuss. It can range from the effects of Obamacare on the employment and quality of medical care to the economics behind golf courses. However, the most difficult part of writing this blog has been choosing a specific topic on each post because there are so many options. Then relating major topics like Quantitative Easing to college students and how it affects us is also a challenge. That process is what I want to encourage other college students to use because they will see how everything is related and then can build a better world by implementing it. It may have been difficult to reach many viewers, and it may have been difficult to find all of the information for the posts, but it was very meaningful and helpful to my understanding of economics and writing in electronic environments.

Until next time,

Jimmy

The Economics Behind College Sports

http://www.survivingcollege.com/best-of-2012-top-moments-in-college-sports/

 

Welcome back! I have recently been watching a lot of college sports and began to wonder about the economics behind them. I do not play any college sports, but I have a lot of friends that do. So, I am going to look at the cost and benefits of playing a college sport and help you decide whether to play in college or not.

 

Benefits:

 

–          Possible scholarship

–          Make friends that share common interests

–          Continuing to play a sport you love

–          Employers do like college athletes

–          Early registration for classes

 

Costs:

 

–          A lot of time is taken up by the sport

–          Possibly having lower grades because of less time to study

–          Sports related injuries

–          Less time to be with friends

–          Harder to get involved in clubs

 

The average athletic scholarship for Division I and Division II is 10,800 dollars and that is offered to around 138,000 students (usnews). That might seem like a lot of scholarships but it really is not that many. I is a small number of students because there are millions of kids playing sports in high school. Another thing is that Division III colleges don’t even give athletic scholarships. It can be financial beneficial to play a college sport for a few students, but definitely not for all. The rest of the benefits are self-explanatory, but if you come up with another benefits please comment and share it.

 

The biggest cost to playing college sports is the amount of time that they take up. College sports have a lot of practices and games and travel. All of those hours add up and can affect the athlete’s grades and social life. Many athletes have tutors, which I highly recommend if you do play a college sport, to help them with school work because they miss a lot of classes as a result of games. It can have a negative social affect because there is less time to spend with friends and to get involved in clubs.

 

The highest cost in college sports is time and it is up to you to decide whether or not to play. If the amount of time that you lose to study or hang out with friends is worth playing the sport that you love, then do it. But if it is not then don’t. I have given you some ideas to think about when deciding to play a college sport, but it is your decision to make.

 

 

See you next week!

 

Only The Best

Hello,

This week I was able to make a guest post on the blog “Only The Best” and it was about the economics behind golf. So check it out at http://wise112.wordpress.com/. Please comment and if you have any questions I am here to help.

Thank you.

The Government, Businesses and Us

The economy is still sluggish and that is a result of poor monetary policy. #Fed#futureinflation#toomuchgovernmentinvolvement

 

How does printing money and putting it into the system not cause inflation? #Fed#QE

http://www.youtube.com/watch?v=ZkyBnaYCUhw

 

A main point in business is to minimize costs and when there are more costs per employee businesses let employees go. #Obamacare

 

Businesses need employees to do the physical labor or help in any way, so don’t make it costly for them to hire more employees. #Obamacare

http://www.foxbusiness.com/industries/2013/10/28/employers-grapple-with-cost-obamacare/

 

Businesses are more efficient when they have less regulations against them. #AdamSmith#WealthofNations#laissezfaire

 

Taking money away from businesses through a lot of taxes forces them to have less investment which decreases innovation and employees.

 

The government needs to give the power back to the people and protect our rights. #NSA#Snowden#SecondAmendment

Riding the Housing Roller Coaster

picture from http://childrenshospitalblog.org/a-differnt-home-for-the-holidays/ thank you!

Although we are college students, we most likely will not be living on campus for all four years and hopefully won’t be in college for more than that. I am currently living on campus in the dorms, but I have done a lot of research on places to stay off campus and have watched my brother go through the same process. So, the places that we are going to have to live are in apartments or a room in someone else’s house. The thing that the apartments and a room in house have in common is rent. Rent is a very good thing for college students because it gives us the freedom to be flexible and have the ability of move when we finish school or need to move closer to a new job or internship. The housing market is very important of the price of rent and how many people you need to live with.

According to Merril Lynch, a very big wealth management firm, the price of housing is going up as a result of low inventory. http://insights.wm.ml.com/articles/housings-surprising-strength.html?cm_mmc=ML-Webcast-_-Google-PS-_-the%20housing%20market-_-Housing%20Strength%20-%20Exact%20Housing%20Market%20-%20Exact

That low inventory raises prices because there are many people demanding homes because over 40% of people believe that home prices are going to be going up. So, low supply and high demand creates a shortage in the market and the price increases. A factor that keeps the supply low is that people do not want to sell their homes in expectation that prices will continue to increase, and that some home owners are still under water and their home is still worth less then when they bought it.

Now how does that affect us? Since we are college students, we most likely can’t live on campus forever, so we have to rent. Housing prices are going up; therefore, renting prices are going up and then we have to pay more. We do not have our parents paying for everything anymore, so were are now on a very strict budget. A very efficient and reasonable why to spend less money on rent and possibly live in a better location is to have roommates. There are costs and benefits to having roommates while renting.

Benefits

–          Rent is cheaper

–          More people for maintenance (cleaning the bathroom)

–          You won’t be as lonely

Costs

–          Less personal space

–          Deal with other people are their problems

You can figure out what you want to do regarding rent by using marginal analysis, like above. I am going to have roommates so that I don’t spend all of my income which is nothing right now, paying for rent, but do whatever works for you and is the most efficient.

Time for a Question!!!

1. Do you had any experiences or advice that can help us make the right decisions when renting?

Please comment and have a nice week!

Student Loans!!!!!!!!!!!!!

Hello, today we are going to discuss a very important topic that is relevant to over 60% of college students and it is student loans. Yes student loans may seem very evil because they kind of are, but if you think of it in a way that is positive and you figure out how to pay them off efficiently they can be not so bad. The reason why many of us have student loans is because we are investing in ourselves. We are building our human capital so that we can be appealing to employers and get jobs that we want; although, the current economy does not help very much in that respect. But it is all the same, we are getting smarter and student loans are a way to pay for our increase in intelligence.

This short video will give you some advice about how to pay off student loans:

http://www.youtube.com/watch?v=Ty5W9GbFQ6g

 

The video talks about how paying the debt off is based off the specific person’s situation because the amount of capital each person has is different and the things people want to do with their lives are different as well. I personally am going to be eating cup-o-noodles every night until all of my debt is paid off because I want to pay as little as I possibly can, but most people want to go out to eat and have nice things, but the main point is to pay off the debt in whatever amount you can. Don’t just let the interest build up and end up having to pay twice as much as you borrowed, so try and pay off more than just the interest payments because that does only is trimming the leaves off a tree and not cutting the branches off.

 

Here is an accurate description of how we feel about the interest in student loans:

 

The interest can be very scary, but the thing that we need to do is to be aware of what your interest rate is and how much you are going to have to pay if you stick to a specific payment method like 500 dollars a month. The most important thing is to know what is going on and not throw it into the backseat of your car and forget about it until your entire car smells weird and then you need to pay more to fix it.

 

So, all you need to do is go through the numbers, or gets some help with them from a professional or even a parent. Debt is okay if it is dealt with properly and it can even be a good sign in the financial market because it shows that the company is investing and working on bettering itself. But it can become very problematic if it is not handled diligently because it will build up and then there is big trouble.

 

Now that we covered all of that stuff, let’s look at some questions and see if we can answer them and come up with some solutions.

1. Do you have any idea what payments you are going to make or are making to pay off student loans, and if so how did you figure out that number for yourself?
2. Do you have any more advice about student loans? It never hurts to hear other people’s ideas.

 

Thank you for reading and please comment and come back next week for more info about economics and college!

 

Sleep and Productivity

I have to say that one of my favorite past times is sleep and I am discovering how important it is as a result of getting around 6 hours a night because of homework and college social life. There has not been any noticeable affects yet, but I am worried about my productivity declining. So I read through many articles and watched a lot of videos to see how it can influence my body and mind.

As you can tell by the very simple and nonspecific graph, productivity decreases over the time that you are awake. I think that the graph is not as specific because there are people who do not need as much sleep as most people, like my brother who thrives on 5 hours of sleep a night. The lesson is that, try to get your work done in the morning or right after you wake up whenever that may be, and to try and judge the correct amount of sleep you need to perform your best. Time is scarce and you need to allocate it effectively in order to be efficient. There are also side effects to not getting enough sleep and some of them are talked about in this very interesting and funny video!

http://www.youtube.com/watch?v=tJj8gt4e1uA

Short-term memory is negatively affected by the lack of sleep! That means that you should get more sleep before a test or quiz so that you remember the information you studied the night before or right before the class. Productivity and efficiency are very important in having an expanding economy and happy society, so get the recommended hours of sleep which are 7 to 9, and the world will later thank you for it. And if your Macroeconomics professor gets mad at you for showing up late to the 8:00 am class, just tell him that you were making the time that you are wake as productive and efficient as possible and he might let it slide.

Efficiency is very important in life and in an economy because it allows for the most work to be done at its highest level. And a very important way to be and stay efficient is by getting enough sleep (7 to 9 hours). I know that it can be very difficult to get that much sleep because of the busy schedules of college students, but it will truly help you out with school and work. It will also help the economy out by having another productive, intelligent and efficient worker/leader/innovator/etc.

Questions!!!!

1. Have you noticed any changes in productivity since going to college because of the amount of sleep?
2. Is the amount of sleep you get different from the amount of sleep you want? If so why not change it?

Government Shutdown

The Good and Bad of the Government Shutdown

Good:

–          The government is not paying for non-essential workers which is about 93% of the EPA and 95% of the Department of Education (Time Magazine).

–          It might force the politicians to come to a compromise and actually do something because it is a huge topic on the news.

–          The possible defunding of Obamacare.

Bad:

–          Government funded colleges like Navy get little funding and some of their classes are cancelled. And schools like the United States Merchant Marine Academy are shutdown.

–          Very little work in the government can be done until it is back up and running.

–          We see that our leaders can’t work together to do what is best for us.

–          The national forest reserves are closed!

Now What Are We Going to Do

There are more points to both of the groups above but the one thing that is clear is that our future is in the hands of childish politicians that are unwilling to compromise for the good of the people they work for. Politicians work for us and as the youth of the country we have the most to lose from their incompetency. This is our time to make a difference in the world because we are We have to do something in order to ensure that our future is as bright if not brighter than the generations before. We can do that by voting, being active in the government and not getting pushed around by those of higher “status.” We need to have our voices heard so that we do not get lost in the system that is politics.

Although it is very funny, I would not be surprised something very similar to that actually happened. Our inefficient leaders are what prevent us, the youth of America, from achieving our full potential whether it be by high unemployment or superfluous regulations. Let us come together and decide our future and not let the perverse politicians decide it for us.

Fast Food Troubles

There has been arguments over what minimum wage should be and it is most prevalent in the fast food industry. McDonald’s employees were on strike in order for their wages to be increased to 15 dollars an hour. Therefore, we are going to discuss if the wages should be increased, possible affects if the wages are increased and how the recession has been a part of the payment problems.

The youtube video gets you up to date on what is going on.

http://www.youtube.com/watch?v=urXNLfegOds

 

If the wages were increased, that would be beneficial for MOST employees, but I would rather have many people working for an okay salary than having some people work for really good wages. I would like to say that raising the minimum wage would help all of the workers, but I just can’t do that because of economic principles. If the price of production, aka the employees, increases, the aggregate supply will decrease and that results in an increase in prices and less quantity of product being produced. (Look at the graph below for a reference.) So, if McDonald’s increases their wages they will either have to significantly decrease their profit margin and that would discourage them to open up more stores because of the cost and then less people will get jobs or they will increase the prices and people will not buy as many hamburgers and they might have to lay-off more employees. I would much rather prefer that everyone can buy a couple hamburgers for 2 dollars and many people having a job instead people buying one burger for 2 dollars and a few people with a job. Then I like what the guy at the end of the youtube video said, and that was that the people arguing for higher wages should be happy that they have a job in this volatile economy with a 14% real unemployment rate. So the lesson is, be happy with what you have and work hard to make more of it.

 

http://econjournals.wordpress.com/2013/03/page/2/ Thank you for the graph!

 

Another youtube video that gets you thinking:

http://www.youtube.com/watch?v=Z0xVojIYA-o

 

That youtube clip makes a good point that employers hirer people and pay them high wages because of the experience and knowledge that they have. Then there are not a lot of younger people getting jobs because many of us don’t have a lot of experience and I hate to say it but we may not be worth the cost to the employer. The recession has decreased the number of jobs available so employers are really narrowing down their search for employees and that means that they are going to hire the older and more experienced workers. That explains why the average age of workers at McDonald’s is 29.5 years old.

 

Now that all of that is covered, let’s see if we can come up with some answers to these questions.

1. Why are people rarely satisfied with what they have?
2. What can be done in order to have college students and other young people be more likely to get a job?

Welcome to the first installment of Stay in the Loop! Thank you for reading, but I am going to jump right into it. You have might have heard about what the Federal Reserve is doing with quantitative easing (QE). But if you haven’t, here is how it goes: the Fed has been buying 85 billion dollars’ worth of mortgages and treasury bonds a month in order to jump start the economy. However, the economy has not started swiftly but is has been sluggish. So, I have done extensive research on this significant topic, and have applied my knowledge of economics and finance from school and working at UBS Financial Services to come up with a conclusion for why the economy is still sluggish.

 

The government has spent trillions of dollars on QE and it has had some effect but not very substantial. In my opinion, the economy is stagnant because there is too much involvement by the government. As it has been seen over the past few days with the Fed’s announcement of maintaining QE that what the government says actually has a significant impact on the economy. The numbers show that precisely after the Fed announced it was going to continue QE, the market went up .95% in response. But the market went dropped 1.45% over the next two days as the market settled back down to what it should be. That is precisely the reason why people are not spending the money that the Fed is creating. People are not involved in the market because they are too smart. They see that the market is too unpredictable as a result of government involvement. The government should focus less on how to fix the economy and start thinking about how to have us, the American people, trust the market and it. They should do that in order for us to begin spending and invest and doing things that create sustainable growth. Once that begins to occur, the real unemployment rate will be lower than 14% (check out graph #2) which everyone wants.

 

http://www.theatlantic.com/business/archive/2010/04/80-percent-of-americans-dont-trust-the-government-heres-why/39148/ Thank you The Atlantic for the graph.

 

Enough said.

 

The over involvement by the government is hurting us because there is no stability in the market or in the dollar. It is only setting us up for a future of inflation and few jobs. This is a hard time for all college students – whether you are looking for an internship or a career – since the economic slump has drastically lowered the employment opportunities. That leads us to pay for more schooling in order to be smarter but mostly to have a fantastic resume. That extra schooling also brings along more student loans that cannot be paid off if there are no jobs available. For us and the US to have the brightest future, the government needs to step off and let businesses and consumers find some stability so that investment occurs and jobs open up.

 

http://catosdomain.com/?attachment_id=17166 Thank you floatingpath.com and Cato’s Domain for the graph.

 

I look at the real unemployment rate because of all of the underemployed and the people who have stopped looking for a job are included in the percentages.

 

Now that all of that is covered, it is time for some questions for all of you to ponder and hopefully comment on so that we can try and find the answers.

–          How will the government build our trust in the market and in it?

–          What are the possible results if we do not start trusting the market and the government keeps printing money?

–          How have you been affected by the recession?