How Cash Flow Impacts The Future In The General Economy

  • August 31, 2023
  • 4 min read

The overall General economy is something that a lot of viewers have asked about. One of the factors yesterday we talked about with real estate had to do with the general economy and what will affect the affordability of homes. Whether or not a buyer can purchase a starter home or move up or go from a renter to a buyer, one of the factors was the General economy and income. You know if you make more money, you can afford more house even if rates go up. If your salary goes up, you can afford to keep up with the increase. So the question is the $50,000 question: What is going to happen to the economy?

Well, again, everybody has an opinion. There’s a million different opinions about what the general economy is going to do in the next year or two. But what are the facts behind those opinions? As always, we love to deal in facts, not just wishful thinking or psychic predictions.

The Camouflaged Factors Affecting the General Economy

Let’s see what factors and objective reasoning go into the economy so you can make your own decision about what you think will happen to the economy. And let’s start with an opinion.

Now, this opinion may have merit, but more importantly, we’re going to look at where it comes from. Bill Gross is one of the largest bond investors in the world, and he predicts – again, the key word is predicts – that Americans will run out of cash.

Where Does Your Money Truly Come From?

But why are people running out of cash and raiding their retirement accounts, even when the pandemic is over and people are back to work? The economy seems like it’s going okay, so why are people running out of cash?

One of the often-overlooked factors is the massive stimulus incentives distributed to the public over the last two years. Billions in relief were stolen or wasted. How much are we talking about? Well, there was four trillion dispersed. They’re saying that $280 billion was fraud, and $120 billion was wasted. So, here’s the thing – where did that money go? That money went into the economy. But 400 billion was just into thin air – either stolen or defrauded. How does that affect the economy?

The Power of Adaptation

One of the things it does is it makes people have a false sense of security about their personal finances. We all got stimulus checks; we may have had unemployment benefits, and other financial relief. That creates more cash and a better sense of financial well-being for consumers. But at some point, that cash runs out.

We’ve all heard the stats where a large percentage of the population is living paycheck to paycheck. What that means is their only thought is, “What can I afford this week? What do I have money for this week?” If you’re living paycheck to paycheck and you have a few extra bucks from stimulus, you’re really not going to worry about the next paycheck because you have the stimulus money.

Deduction:

As we approach 2024, it’s essential to consider the source of your income and how it might be affected by potential shifts in the economy. By proactively evaluating your financial position and adapting as necessary, you can better navigate the ever-changing economic landscape.

Remember, understanding the dynamics of the economy and your role in it is crucial for making informed financial decisions. Whether you’re a business owner, employee, or simply looking to safeguard your financial future, staying aware of economic factors can help you thrive in any economic climate.

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