Cheat Sheet Q & A: 


Today’s Topic:  How much of China's economy is legit?


The entry: 


Hi Brian:  We read how China is poised to overtake the US as the #1 economy very soon. How much of their economic activity is legitimate?  We read of how China steals and then sells someone else's intellectual property (think movies and DVD's) and they blatantly sell faulty products such as drywall and contaminated pet food.  It is probably very hard to calculate but I think good food for thought.


Bottom Line:  So you’re right.  It’s not easy to calculate.  You’re also right that the Chinese Government isn’t exactly the most honest in reporting economic information.  From currency manipulation to the intellectual property theft that occurs with enthusiasm…  There certainly is much more to the story.  Perhaps the best recent research that’s been conducted was a 2013 study performed by PekingUniversity’s HSBCBusinessSchool.  They estimated that 8-12% of the Chinese economy is overinflated.  If you split the difference and call it 10%, you’re looking at about $1 trillion of false economic reporting per year.  It’s to be expected unfortunately.  Their Government is Communist after all. 


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Audio Report:




Now that they're out of the shadows...  What percentage of
Colorado's population smokes pot?:


Bottom Line:  So…  Whatcha think?  I have to admit it’s higher than I would have guessed which would have been around 5%.  So it’s actually:


  • 9% or 485,000 adults in Colorado are regular marijuana users

What’s still unclear is the usage rate prior to legalization which is something I’m keenly interested in to quantify the public health considerations of the perpetuation of Mary J.  Those are also the users that are doing it “legally” within Colorado.  If there are users who still look to the black market, where marijuana is reportedly selling for less due to tax avoidance, its possible the number could reach into the teens.  I’m not sure what to do with this but we you factor in the current unemployment rate, it doesn’t seem so high (pun intended).


Audio Report:




It's clear - we have no interest in military engagement overseas:


Bottom Line:  We may be quite divided politically in this country, but not on this topic.  We don’t want to be militarily involved in the world’s current Geo-Political turmoil.  Politico surveyed our interest in being militarily involved in the Russian – Ukraine crisis (post airline incident) and the Gaza conflict.  Here’s what they found:


  • Only 22% of Americans feel we should be getting involved with either of these conflicts militarily
  • 66% of Americans feel we should only have a military response if American interest are hit directly


Breaking down the 22% who do think we should be engaged currently:


  • 17% think we should be taking action against Russia
  • 5% think we should be engaged in the Gaza conflict

While Politico is a left learning outlet this data was collected in an accredited fashion and even if it has a huge margin for error the message would be the same.  We’re ware weary and really don’t want to continue down a path of international intervention.  I’m in this camp as well.


Audio Report:


Woot!  Another new 401k record for us:


Bottom Line:  First the good news financial news story.  Fidelity is out with its 2nd quarter 401k balance report.  This demonstrates the average balance of those who make use of a 401k plan. We just set an all time high for the average 401k balance:


  • The average balance of all 401k plans is currently $92,600
  • The average balance of all plans that have been consistently contributed to for 10+ years is $246,000
  • The average increase over the past year has been 15%


That’s also trending in a happy direction but it’s not without a caveat.  The stock market is up nearly 20% (depending on the indices you evaluate) over the same period of time.  That 15% account for our contributions and employer contributions as well.  That means that too many people are likely not well positioned with investment options that are being provided to them.  If this is you spend a little time evaluating your 401k plan performance and investment options.  If you need help or have questions – ask.  The plan administrator will have professionals available for that purpose. 


Audio Report:




Stop it!  Somehow we're still becoming more ignorant about money:


Bottom Line:  This is the less have money related story. has been studying what we’re doing with our savings…  It’s not good. 


On a positive note we do seem to have learned our lesson about debt and becoming overleveraged with debt via the financial crisis.  The bad news is that we’re parking savings in the worst possible place this side of a lottery ticket.  Cash.  First Millennials:


  • 39% of adults under 34 have most of their savings in cash
  • 24% primarily in real-estate
  • 13% in stocks


It doesn’t get much better with all adults average together:


  • 25% prefer cash
  • 23% real-estate
  • 19% stocks

So we have it exactly backwards.  The stock market is far and away the best historical choice of investment class with an average of 9%.  Real-estate is right to be second sporting an average rate of return of 4.1%.  But cash…  Cash!  Nothing is worse.  It literally loses money every day as savings rates aren’t even enough to make up for inflation.  Simply put we need to become more educated about investing and we need to teach our kids.  If needed seek professional assistance but don’t just sit on cash.  It’s bad for your money’s health.  


Audio Report: