The $1.29 million hanging on the wall
The $1.29 million hanging on the wall
Welcome to “Not Pretty, Not Rich,” a newsletter about money and the economy.
It’s Friday, February 12, 2021, and here’s this week’s rundown:
In the news: The CBO sizes up a proposed $15 minimum wage
Trend: Texodus?
Markets: The exchanges want to keep you in the dark
Feature: The $1.29 million on my friend’s wall
Numbers and links
The CBO sizes up a federal $15 minimum wage
Raising the federal minimum wage to $15 is on the Biden administration’s agenda. What would the effects be?
What’s happening: A $15 minimum wage is, at this point, old news. Several cities around the country have implemented $15 minimum wage plans, and some, with quite a bit of success. But those are mostly wealthy cities (Seattle, San Francisco, etc.) — the effects could be much different in, say, Casper, Wyoming, or Stillwater, Minnesota.
But it’s a policy that Biden and Democrats are pushing for, and with sound reasoning. The current federal minimum wage is $7.25 per hour — it hasn’t changed in 12 years. So, it seems like it’s beyond time to increase it. But $15 would more than double it, and that could cripple small businesses. Walmart and McDonald’s will be fine; it’s the small companies that will have trouble absorbing the increase.
It’s a complex and interesting topic — but what do the experts have to say?
Going deeper: The Congressional Budget Office (CBO) published a new brief this week forecasting the possible effects of a $15 federal minimum wage plan that would gradually increase the wage floor, if it was enacted at the end of March 2021. Here are the main takeaways:
A loss of 1.4 million jobs by 2025
900,000 people lifted out of poverty
The federal budget deficit would increase by $54 billion through 2031
Pay for all workers would increase by a net $333 billion
The takeaway: There are trade-offs with a $15 minimum wage: Low-wage workers will earn more money, but there will be fewer low-wage jobs. The question is whether that trade-off is worth it.
I’d expect that we will see a big increase to the federal minimum wage soon, whether it’s to $15 or some other number. It may be a part of the next big stimulus bill, too.
Texodus?
Some wealthy Americans are fleeing high-tax states for low-tax ones. Is it actually a trend? And is it something to consider?
What’s happening: Some wealthy Americans are heading to states like Texas and Florida from places like New York and California to save on taxes. Texas and Florida (along with some others) don’t have income tax policies, which could save some earners a whole lot of money.
Case in point: Joe Rogan signed a $100 million deal with Spotify last year, and subsequently moved from California to Texas. That move could have saved him millions of dollars. Elon Musk made a similar move.
You can read more about this phenomenon on StreetFins (a finance site which is run by and for college and high school students. I’ve done a little advising with the site’s founder, and think these kids are doing a great job, so please check them out.)
Go deeper: I, personally, experienced the inverse of this a few years ago, when I moved from Washington (a state with no income taxes) to New York City. You can definitely save money by living in a state with lower taxes, but there are a lot of things to take into account.
I wrote about this last year, actually — and unless you’re making an awful lot of money (like a professional athlete), it’s probably not worth moving to save money in the short-term. But hey, do what you’re gonna do.
The stock exchanges want to keep you in the dark
The NYSE and Nasdaq are suing the SEC to keep market data from the public.
The news: Two big stock exchanges — the New York Stock Exchange and Nasdaq — are suing the Securities and Exchange Commission (SEC) in an effort to block market data from becoming public.
Nasdaq Inc and the New York Stock Exchange have each sued the Securities and Exchange Commission, seeking to block a plan by the regulator to overhaul public data feeds that broadcast stock prices to investors, court filings show.
Under the SEC plan, approved in December, supply and demand data for stocks would be added to public feeds, broadening access to the information which the exchanges currently sell to professional traders at a premium.
Go deeper: Essentially, the exchanges want to prevent the likes of you and me from getting more market data. They’re stifling the flow of information so that it can be packaged and sold to high-frequency traders and other institutional investors. If this data becomes public, it’ll hurt their revenue.
The takeaway: While this may not have any immediate or obvious effects on you, it’s an interesting look at the inner world of the exchanges, and how there is a profit-motive to stifle the free flow of information.
$1.29 million hanging on the wall
It may be time to cash in on those collectibles that are collecting dust.
When I was in middle/high school, I had a buddy that played hockey. And at my buddy’s house, framed and hung in a hallway, was a prized piece of hockey memorabilia: A Wayne Gretzky rookie card:
I remember looking it over several times. I don’t know what happened to it — or to my buddy, really — but I always remembered seeing it hanging on his wall and thinking that it should be in a safe or something.
Recently, I saw a headline concerning The Great One’s rookie card: One recently sold for $1.29 million at auction. That means that my friend literally had a million-dollar piece of memorabilia hanging on his wall.
I, too, had a bunch of sports cards when I was a kid. Mostly basketball and hockey cards, if I remember correctly. They’re probably in my parents’ garage — and I know for a fact that I had some good ones, too. Like, some rookie cards of future hall-of-famers like Peter Forsberg and Joe Thornton.
This is all to say that collectibles — sports cards, etc. — are apparently back in fashion. And if you wanted to cash in on your old childhood collections, now may be the time. Because the iron is hot.
For instance, last year, two basketball cards sold for $1.8 million each — a Lebron James rookie card, and a Giannis Antetokounmpo rookie card.
Baseball cards are hot, too; last year also saw a Mike Trout card sold for $3.84 million.
What we’re really talking about here are alternative assets. Sports cards, Beanie Babies, bottles of wine, watches, sneakers, classic cars, old video games — there’s a market for almost everything and anything out there. So, if you have something that you suspect carries some sort of value, it may be worth taking the time to try and find a way to connect with buyers.
That is assuming that you’re willing to part with it.
But seriously, the internet has created marketplaces for all types of alternative assets. You can buy or sell sports memorabilia on sites like PWCC Marketplace, or even in classic cars and other assets on Rally. You can invest in rare wine with Vinovest. You can even invest in fine art through Masterworks.
If you have an interest, there’s probably a way to start investing in it. That’s not to say that you should — but you probably can.
Take a look around the house, dig out your old baseball cards, and even rifle through your old t-shirts and shoes — you may have something with value. Wayne Gretzky cards are selling for seven-figures, and the market is hot.
Who knows? Maybe while digging through your old stuff you’ll have a moment like this, in which a collector finds an incredibly rare Magic: The Gathering card (I know nothing about it other than the fact that it’s super rare) and freaks out — apparently these things are selling for hundreds of thousands of dollars.
Happy hunting!
Numbers and links
80%: The year-over-year increase in gun sales during January, with more than 2 million total guns sold. (Washington Post)
4%: The average drop in car insurance premiums during 2020. (The Wall Street Journal)
$5.6 million: The cost of a 30-second ad during this year’s Super Bowl. (New York Times)
$1.1 billion: The annual value of the bird poop industry. (Smithsonian Magazine)
An account of how rich people get away with things like tax fraud. (Bloomberg)
How to win at the stock market: Be lazy. (New York Times)
Wallet lost in Antarctica found in California 53 years later. (The Guardian)
“Not Pretty, Not Rich” is a newsletter about money, finance, and the economy, written by Sam Becker. You can connect with me through my website, Twitter, LinkedIn, or send me an email at sammbecker@gmail.com. Also, if you enjoy this newsletter, I’d really appreciate it if you would share or forward it to others.
And remember, the contents of this newsletter are not meant to be taken as advice. It’s informational and entertainment only.