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The Economics of Pet Ownership

Furry friends don’t come cheap.

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Caring for a pet can be a great way for kids to learn responsibility, but they don’t come cheap. Americans spent $123.6 billion on their pets in 2021, up nearly 20% from 2020 (aka the Year of the Pandemic Puppy).

Here’s a closer look at some common costs of common household pets.

Dogs

Man’s best friend? More like man’s priciest friend: dogs cost their owners $1,391 a year on average between food, vet visits, grooming, treats and toys. And remember: the bigger the breed, the bigger the food bill.

Adopt > shop: Especially if you’re buying designer. Tibetan mastiff puppies can run from $3,000-$5,000, all the way to $1.95M!

Cats

With many of the same carrying costs as dogs, a pet cat will run you $1,149 annually. And while you won’t have to pay for a dog walker, you’ll want to set aside $150/year for litter—unless you plan on monetizing your kitty as a “petfluencer.”

Pro tip: It’s cheaper to invest in scratching posts and cat towers than new couches and carpets.

Birds

The chattier the bird, the more expensive: cockatoos and macaws can have a $5,000+ price tag, while parakeets are the “cheepest” (sorry). Parakeets are also quite budget-friendly, with annual costs of only $185.

Customers also bought: You’ll want to invest in an air filter if you plan on getting a cockatiel, cockatoo or African grey, which produce a lot of “dusty powder down“.

Fish

Fish can be one of the least expensive pets to own, or one of the priciest. Try $300K for a single Asian arowana… Saltwater tanks also cost significantly more than freshwater. Plan to budget $15-200 per month.

Budget for home decor: Found Nemo? Next, you’ll want to kit out their tank with lights, gravel, plants and driftwood. Treasure chest optional.

Gerbils/hamsters

A popular “starter pet” for kids, they’re relatively inexpensive and low maintenance. (Even the Cadillac of hamster wheels is only $35.) Again, litter is your biggest cost, followed by bedding—which you can DIY using toilet paper. Although that might actually increase your expenses now that TP prices are on the rise.

Guinea pigs come with a 2x multiplier: Guinea pigs are social creatures. This from the guinea pig lobby: experts recommend picking up a pair so they don’t get lonely.

Rabbits

A pet rabbit’s diet consists of hay, high-fiber pellets and plenty of fresh veggies, costing owners about $190/year. Green thumb? Grow your own “rabbit food”.

What’s up, doc?: Rabbits have been known to gnaw on cables and drywall, making for potentially pricey snack sessions. Stay vigilant!

Reptiles

Like birds and fish, reptile costs vary: expect to pay $30-50 for a leopard gecko or baby iguana, and $100K+ for a rare white monitor lizard. Also like fish, there’s a high start-up cost involved, with terrariums typically ranging between $100-$180.

Cold-blooded ≠ energy efficient: Between the under-tank heater, heat lamp and lighting, reptiles will run up your electric bill almost as quickly as a teenager.

#investing #kids #money #spending

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The Market for Collectibles: Sports Edition

Why you should hang onto your baseball card collection

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The market for collectibles boomed at the beginning of the pandemic, as people with money to spend found a new hobby buying, selling, and trading. With millennials entering their high-earning years, they’re investing in memorabilia the same way their parents and grandparents collected art and Royal Doulton figurines (IYKYK). It’s helped take the sports collectibles industry from a $5.4 billion-dollar market pre-pandemic to $26 billion in 2021. Some predict it’ll grow to $227B within 10 years. Others worry it’s due for a recession-fuelled correction.

Here are some of the eye-popping numbers fuelling the recent rise…

£7,142,500: Diego Maradona’s “Hand of God” jersey

In May, Sotheby’s in London auctioned off the kit Maradona wore when he scored the most infamous goal in World Cup history. (Or “goal”, if you’re a Three Lions supporter.) Originally valued at $5-$7.5M, the jersey sold for $9.28M (£7.1M), becoming the most expensive piece of sports memorabilia ever sold.

Until it wasn’t…

$12.6M: 1952 Mickey Mantle card

A 70-year-old baseball card became the first sports collectible to break 8 figures at auction last month. Previously purchased for $50K in 1991 — a then-record for a ‘52 Mantle card — this marked a 25,100% rise in value! Of course, value’s relative. Back in 1952, that same card came in a pack for a nickel. And it came with a stick of gum.

Some cold water on your high hopes before you go digging for that shoebox of musty Topps cards: condition is everything, and Mickey was in great shape for his age.

$208K: A Legendary LeBron James Moment

Even virtual memorabilia is shattering records. In 2021, the same NBA Top Shot NFTs that originally traded for a few bucks apiece shot up to a record $208K for a “Moment” of the King dunking over the Kings.

It’d turn out to be a high-water mark for the Top Shot market. Blame the #cryptocrash, sure. But whether you’re talking art, sports memorabilia, NFTs, or any other collectible, the same age-old truth applies: they may be worth whatever someone’s willing to pay for them, but that doesn’t mean the price’ll keep going up.

#baseball cards #collectibles #investment #LeBron #Maradona

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How To Tell If We’re In A Recession

And other dubious lessons from the past

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Are we headed for a recession? Depending who you ask, the answer’s either definitely yes, hopefully not or, we’re already in one.

The National Bureau of Economic Research (the group responsible for answering that question) says we’re not. Yet. At least not according to their “official” predictors, which include unemployment rates and spending habits.

But those aren’t the only methods economists have used to predict economic downturns.

You’re wearing those… again?

Alan Greenspan came up with the idea that men’s underwear sales could signal a recession, back when the former Fed chair was just a consultant. His thinking? Sales of gitch dip when guys have less money for “unnecessary” expenses.

Popping bottles, popping economy

Champagne sales pop when the economy’s up. And, more drinking at home — even the premium stuff — signals some belt-tightening.

If you trust this indicator, good news, because bubbly’s popping off lately. Cheers!

Short skirts and skinny ties

The “hemline index” was first introduced during the Great Depression: shorter skirts = stronger economy. Ties supposedly get skinnier during lean times, too.

Neither was an especially good indicator then, and they’re even worse now, since skirts and ties have been eclipsed by sweats and hoodies, thanks to hybrid offices and WFH.

From your lips to the economy’s ears…

Coined by Leonard Lauder (Chairman Emeritus of Estée Lauder), the “lipstick index” says we’re more likely to treat ourselves to small luxuries when times are tough.

Reports of the index’s death have been greatly exaggerated. Allegedly debunked in 2009, when lipstick sales declined by 10%, Covid masking mandates were thought to have killed it for good.

But this index has the staying power of a Revlon red! According to one market research group, lip makeup revenues climbed 48% year-over-year in the first quarter of 2022.

Now, it’s the fastest growing makeup category of 2022!

Watch out for goths as well: the darker the nail polish, apparently, the darker the economic outlook.

Market crash to diaper rash

The theory: parents looking to save cash, change their kids’ diapers less, leading to rising rash cream sales.

All butts, no glory.

Less green, more green thumb

The Great Recession saw a rise in gardening from people hoping to save on grocery bills. (Coupon use is another popular signal.) Just remember to wear long sleeves while you’re elbow deep in the dirt… Mosquito bites increased in ‘08 as the bloodsuckers moved into recently foreclosed homes.

The macro takeaway? If you squint hard enough, you can see recession signs everywhere, right next to the signs that the economy is on the ups.

Our takeaway? There’s opportunity everywhere, no matter what economic cycle we appear to be in. So, keep your eyes trained on THAT.

#economy #Financial Literacy #indicators #investment #recession

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The Economics of Emotions

Shopping is a Mind Game

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We may think of ourselves as savvy shoppers, but emotions play a bigger role in our spending habits than we might realize. From stress spending to FOMO, here’s a closer look at what’s happening in our brains when we shop.

Money can buy happiness

Do you use shopping as a mood booster? You’re not alone. Over half of Americans say they’ve participated in “retail therapy”, and studies have shown shopping can have a lasting positive impact on our mood. It can even reduce feelings of sadness, and help us feel in control when we’re overwhelmed.

Of course, that’s not the whole story…

The thrill of the hunt

Shopping floods our brains with dopamine, just like hearing your fave song or seeing your crush. But here’s the secret — it’s not the purchase that’s getting you hyped, it’s the build up. That rush can be addicting.

So, use your brain’s love of anticipation to your advantage! Saving up for a major purchase actually feels better than buying it right away on credit.

Say no to FOMO

Giving ourselves more time to anticipate a big purchase doesn’t just feel better, it also helps us make better decisions. Whether it’s a limited-time sale or hot meme stock, the idea of missing out sends our lizard brains into everyone-for-themselves mode. Back in the day, this helped our hunter/gatherer ancestors stay alive.

Today, it’s a recipe for buyer’s remorse.

Stress encourages us to impulse buy

Oh, and what’s the #1 source of stress? Money. Ahhhhh. So, stress-spending can get you caught in a feedback loop of impulse purchase → guilt and regret → more stress. Next time you’re feeling stressed, opt for a healthier outlet, like meditation or exercise. See if you’re still even thinking about that panic purchase once you’ve distracted yourself with something else.

~~Don’t~~ Do shop angry

This doesn’t mean you should Hulk up before hitting the mall, but shopping while angry made it easier for research participants to stay focused on what they were shopping for, making them more satisfied with their purchases as a result.

Look, but don’t touch

Handling an item lets us take it out for a mental test drive. It also makes it difficult for us to imagine letting go. The takeaway here: don’t take it away 🤣

When you’re out shopping, keep your hands to yourself!

#emotions #Financial Literacy #FOMO #money #shopping

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LeBron Gets the Last Word

Actually, he’ll own it. A primer on trademarks.

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LeBron James, basketball legend and entrepreneur, is pursuing a trademark for the phrase “Shut Up and Dribble.”

Trademark Words? How? Why?

Fox News host Laura Ingraham, spoke the phrase in 2018, in an unsolicited response to James and other pro athletes speaking out against Donald Trump.

“It’s always unwise to seek political advice from someone who gets paid $100 million a year to bounce a ball,” she said. “As someone once said, shut up and dribble.”

A video of Ingraham’s flagrant foul, retweeted and responded to by King James, has over 30 million views. The Lakers star owned the moment then, and if this trademark application is approved, his athlete empowerment brand will literally own it — this time as intellectual property.

Tricks of the trademark

A trademark is a recognizable feature of a brand that distinguishes it from others — legally, and in the eyes of consumers. This recognition can make a trademark valuable. It could be a word or phrase, logo, product name, or design element; it could even be a distinctive scent, texture, or sound. (In the U.S., the ® symbol denotes an officially registered trademark, while ™ is used to stake a claim to an unregistered one.)

These recognizable elements are integral to a brand’s identity, even synonymous with it. Think of the Nike “swoosh,” or Apple’s bitten fruit logo. Anyone is free to sell their own competing shoes or smartphones, but if they plan to use imagery reminiscent of these iconic symbols, they should expect to hear pretty quickly from lawyers. (Unless the use is for parody…)

Use it or lose it

Proving trademark ownership can be thorny, so for LeBron, this is not a slam dunk.

Even huge brands can struggle to prove and protect their trademarks. Take McDonald’s: in 2019, the burger behemoth lost its fight to defend the Big Mac name in the EU. The European Union Intellectual Property Office ruled the company failed to prove “genuine use” of the trademark. It was a major victory for Irish chain, Supermac’s, and a major trolling opportunity for Burger King.

LeBron’s claim, though, is personal, and millions of people are cheering him on.

#basketball #LeBron #money #ownership #trademarks

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A Burger Explains Inflation

Everyone’s freaked out about inflation, but what is it exactly? (Asking for a friend)

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Tell your friend there’s no need for embarrassment. People stress about inflation, but ask them to explain how it actually works, and that gets a little hazy.

Okay, cool. The friend—c’est moi! What do I need to know?

In a nutshell 🌰 Inflation is the rate at which the costs of goods and services increase over time. It gets a bad rap, but a modest level of inflation (around 2%) is a good thing.

As the economy grows, businesses and consumers have more money to spend. That means higher demand, which leads to higher prices. Over time, wages should rise along with inflation (since the price of labour should increase with everything else).

Unfortunately, this recent inflationary spike — to almost 7% — has been too sudden for many salaries to keep pace. So, people are feeling it whenever and wherever they spend.

How do we fix it?

Governments can heat up or cool down the economy by raising or lowering interest rates, making money more or less expensive to borrow. There are other issues that impact inflation, too, such as global supply chain flows and geopolitics.

Zzzzzzz…..

Okay, okay… Do you like burgers?

Wait—what?—burgers!

Welcome back. The Big Mac Index was invented by The Economist as a more digestible way to explain the purchasing power of a dollar around the globe. In 1986, a McDonald’s signature sandwich cost $1.06. In 2022, you need $5.65 to buy the same burger.

Whazzat?

Inflation makes your dollar lose value over time. As the price of ingredients, real estate, employee wages, and transportation go up, the power of your dollar goes down. It’s one reason people work to grow their money in the markets, instead of holding it all in a savings account. Because on its own, a dollar today’s worth a little less tomorrow.

Can I get a side of fries with that?

Whoa, Rockefeller! Potatoes average an inflation rate of 4.58% per year…

#cost of living #economics #Financial Literacy #Inflation #spending

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Inflation’s Hitting the Tooth Fairy

My six-year-old just mentioned that her friend got $20 from the Tooth Fairy. Is that the going rate?

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Twenty bucks is nearly four times the national average, which hit an all-time peak in Canada this year at $5.99. It’s possible the Tooth Fairy was feeling generous, but equally likely she forgot to make change before flying in.

Given the predictability of this particular payday (20 teeth over about six years), tooth loss is a great opportunity to talk about, you know, fiscal responsibility. Sound about as fun as oral hygiene? Okay, we get you, but the tooth fairy really is a good way to table topics like saving and investing, even inflation (the rate of increase in prices over a given period of time).

Let’s look at the numbers: 20 teeth x 5.99 = $119.80. Your child’s mouth is building an empire, so it’s as good a time as any to talk about what that money could do over time.

Delta Dental is an American insurance company that has been tracking the tooth fairy’s financials since 2001. It turns out the amount kids find under their pillow is a good barometer for the overall economy. Your average baby molar fetched more in 2006 than it did in 2008 following the economic downturn. And the fact that rates are higher than ever this year is an encouraging sign of post-pandemic recovery. Another principle at play is what’s known as income elasticity of demand. This is the idea that when people (or fairies) have more money on hand, there are certain things they tend to splurge on disproportionately. Children are one of these items.

So while the TF’s feeling generous, take advantage of a happy time and a teachable moment—while it lasts. One columnist recently argued that given the terrible hours, unsafe working conditions, and non-existent travel budget, the Tooth Fairy may be ready to join The Great Resignation. Who could blame her? She’s an essential worker who doesn’t even get dental insurance.

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The Business of Memes

Fast reads on things kids care about, or cared about, or may care about again.

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Meme stocks as an asset class? Nice work, Reddit.
“Meme fashion” label Pizzaslime makes fast fashion look slow. They’re doing brisk business selling wearable internet culture to Gen Z.
Want to create a meme for the ages? According to one prof, there’s a formula for that.

Read on…

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The craze around the trading of “meme stocks” GameStop and AMC Entertainment has largely fallen out of mainstream news, but Reddit’s still chasing the highs. And so, it was just a matter of time before MEME ETF hit the scene. MEME launched this December, thanks to Roundhill Investments, purveyors of specialty ETFs such as the Esports & Digital Entertainment ETF, NERD.

With subreddit WallStreetBets 10x-ing in 2021, social investing is here to stay, even if MEME’s performance is on the decline…for now.

So, should you “buy the dip” on MEME? It’s very early. The fund rebalances bi-weekly, and focuses on stocks “that are both highly shorted and subject to increased retail sentiment”. In other words, if you love roller coasters, this could be a love match. No matter what, it’s bound to keep you calmer than trying to keep up with what’s trending on Reddit.

Nasdaq.com | Sept. 4, 2021

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The two millennials behind “meme fashion” label Pizzaslime have made millions selling merch to people interested in wearing internet culture IRL, reports Insider. Their wares reference nerdy-cool things like Elon Musk tweets about meme stocks (“Gamestonk!!”) and that endlessly remixed photo of a mittened-out Bernie Sanders. Commenting on Pizzaslime’s runaway success with Gen Z, one fashion expert said “What matters to younger consumers is what captures their attention and has the ability to spread like wildfire across social networks — and this is exactly why meme fashion is so popular.” We’ve seen plenty of articles in recent years bemoaning how Gen Z has killed the fast fashion propagated by millennials. Perhaps the younger generation has just put a new spin on it — one somehow both faster and more enduring at once.

Insider | May 16, 2021

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Speaking of enduring, what is it that gives some memes such incredible longevity, despite the “here today, gone tomorrow” reality of internet culture? Speaking to Forbes, Leilani Carver, a professor of strategic communications, says that since older memes are better known, more people “have the necessary subcultural knowledge to interpret/understand the code and ‘get’ the meme.”

In the age of the Remix, everything old is new again. We’re into it.

Forbes | Aug. 30, 2021

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