As inflation continues to chip away at the budget of the average American, concerns about the declining standard of living loom large. Real estate expert Michael Bordenaro sheds light on the intricacies of the current economic landscape, emphasizing the profound impact of high interest rates on both individuals and the broader economy.
The Paradox of High Interest Rates
Bordenaro delves into the paradox of high interest rates, noting that while designed to slow down the economy, they inadvertently contribute to its apparent prosperity.
The majority of people are paying high interest on loans, not earning substantial interest on their savings. This dynamic, he argues, benefits companies’ bottom lines and favors credit card companies and lenders, creating a facade of economic growth.
The real crux of the issue lies in the widening gap between soaring living costs and stagnant wages. Bordenaro points out that essential expenses such as housing, food, and energy have surged, outpacing the meager wage growth experienced by most Americans.
The consequence is a situation where individuals must allocate a higher percentage of their income to cover basic necessities, eroding their standard of living.
Financial Resilience of the Wealthy
Drawing attention to the resilience of the wealthy in this economic scenario, Bordenaro highlights the staggering statistic that 47% of luxury home purchases in the fourth quarter of 2023 were made in cash.
This underscores the stark contrast between those thriving in the current economy and the majority struggling to make ends meet.
Amidst these challenges, Bordenaro issues a stark warning against financial ignorance. He stresses the importance of financial education and understanding how to make money work for individuals.
Contrary to the prevailing narrative, he suggests that achieving financial well-being doesn’t necessarily require becoming rich but mastering the art of making money and saving wisely.
The Ripple Effect of Debt and Bankruptcies
The video also delves into the escalating issue of debt, with a focus on personal bankruptcies. Bordenaro discusses the alarming 16% increase in personal bankruptcies in 2023, signaling the unsustainable levels of debt carried by many.
He emphasizes the impact of divorce and high expectations on individuals, citing a poignant example of a man pushed into bankruptcy due to his ex-wife’s extravagant lifestyle.
People in the comments add their two cents: “With such inflation, loss of standard is a given. People probably forget that once inflation goes down, prices will stay up.”
Others talk about their experiences: “25 years ago I bought the new mustang for cash from regular job, and I was super happy, now if I want to save up for a new mustang it would take me 15 years , but I’m still driving the old 5.0 and no payments , but I’m not happy how everything went up , we live in Canada , car insurance and property taxes are crazy high, and it will go up even more, we become slaves for faceless organizations”
Another commenter added: “I just quit my job that i liked because they would not give me a dollar an hour raise. I have been there for 8 years and i have been getting about 35 cents an hour every year. I quit and retired. I’m 60 anyways and i made more money 20 years ago.”
The majority of commenters are worried: “In the 70s, our next door neighbor was the history teacher at our school. He had two sons and his wife stayed home. They lived in a middle class neighborhood in houses with around half acre of land. Fast forward to today, and teachers can’t even get a 2% cost of living increase, let alone take care of families on their salaries. Makes you wonder where all the real estate tax -that’s just doubled -is going.”
A Call for Government Accountability
In a passionate plea, Bordenaro calls for accountability within the government, expressing concern over resources allocated to illegal immigrants while many citizens face financial hardships.
He critiques a $53 million program in New York City providing prepaid credit cards to illegal immigrants, juxtaposed against the struggles of citizens in bankruptcy.
As Bordenaro reflects on the shifting economic landscape, he encourages viewers to adapt and navigate the challenges presented by high interest rates, inflation, and financial disparities. The key, he suggests, lies in understanding the current economic realities and leveraging them to one’s advantage, fostering financial resilience in the face of an uncertain future.
What are your thoughts? Are high interest rates a necessary evil for economic stability, or do they disproportionately burden the average American?
In a world where financial education is key, how can individuals empower themselves to thrive in a challenging economic landscape?
Is the pursuit of a ‘booming economy’ inadvertently widening the wealth gap and leaving everyday Americans behind?