🔥 ^{Hot off the press: Here’s what’s burning up our news feed.} 🔥

• College costs are a gift that keeps on taking giving

• The average cost of a new car is $50,000 (ouch)

• FAQs: Inflation + Debt Ceiling and its true effect

Let’s Chop It Up…

1️⃣ College: The Cost vs. The Return

Today's brain-bender: Is that parchment from college worth the mountain of debt it often brings? You may think we're dipping our toes into the philosophy pool (and you wouldn't be wrong), but this question is as practical as your monthly budget. The biggie here isn't just about the cost-benefit analysis of higher education. It's more existential. It's "What in the world do I want to do with my life?".

A Deep Dive into the College Conundrum:

It seems there's a college fad that's contagious. Many aspiring scholars sign up without a clear "why" (probably because "everyone's doing it" – we all know how that peer pressure thing works).

They might be just buying some time before the next "shiny object" comes along. Who can blame them? Our culture has given into the charm of instant gratification rather than the grind of long-term decision-making. Let's be honest, a quarter of our youth dreaming about being the next big influencer is not exactly a societal high point, nor is it a practical goal.

Then comes the big question of what major to choose. It's a tricky game of balancing passion and pragmatism. Love art, dance, or literature? That's fantastic— But the million-dollar question (quite literally, thanks to student loans) is: do you have a real-world plan to sustain yourself and pay off that debt? If not, then we're afraid you'll have no one to blame but yourself.

We've all heard the glorious tales of college dropouts who became tech whizzes or founded billion-dollar empires. And yes, they're inspirational – but let's get a reality check here. These cases are outliers, not the norm (unless they had a handy silver spoon at birth). And here's a spicy irony: most of these successful dropouts would hardly hire someone without a degree.

College is a personal choice. It depends on a host of factors, including individual maturity, financial situation, and career aspirations. And let's not forget, there are alternatives like trade and vocational schools. Yet, it seems our education system has fallen short in raising awareness about these paths.

Is College Worth It? The Final Verdict:

Parents, online know-it-alls, and your friendly magic 8-ball don't have the answer to this one. But statistically, yes. Those who go to college earn more or have the ability to move into positions where they earn more.

The deeper dive though is that it boils down to understanding who you are and what you want. You need a plan, even a flexible one (and maybe a pinch of that ‘less flaky’ attitude wouldn’t hurt). The answer isn’t in the degree itself, but in what you’re hoping to make out of it.

🔑 Pepper’s Key Takeaways:

1. Find your "why": College isn't just a trend to follow. Have a clear purpose or goal before you dive in headfirst. Remember, as the trendsetters, we dictate the trends, not the other way around!

2. Passion vs Pragmatism: Choosing a major should be a fine balance between your passion and what's practical. If you love art but can't figure out a financially viable way to pursue it, then you're setting up for a sequel to "Struggling Artist: The Original Series."

3. College Dropout Turned CEO – A Rare Breed: Inspirational? Absolutely. But before you start fantasizing about being the next tech guru, remember that these tales are exceptions, not norms. Don't count on becoming an overnight sensation if you decide to follow in their footsteps.

4. Exploring the Road Less Traveled: College isn't the only path to success. Consider trade schools, vocational programs, and apprenticeships as valid options. Because let's face it, the world will always need plumbers, electricians, and craft beer brewers.

5. Self-Discovery is the Key: Instead of asking, "Is college worth it?", perhaps the more pressing question is, "Who am I and what do I want from life?" The answer to the latter can shed some light on the former. So, dig deep and don't be afraid of a little soul-searching. After all, the answers we seek are often inside us (along with that last piece of chocolate you can't remember eating).

2️⃣ A $50,000 Price Tag 🚙

My stomach dropped a bit on this one. A study by the New York Times unveiled a disturbing fact— a new car now costs on average, $50,000. Which is quite a bump from the pandemic days. (See the pic below)

Two years into the U.S.'s greatest inflationary joyride since the wild 80s, the auto industry shows that returning to normalcy is more like off-roading rather than a leisurely Sunday drive.

Pitstops on the Road to Inflation:

The double whammy of global shipping hiccups and a semiconductor shortage, along with factory shutdowns in 2021 and early 2022, did a little tango with high demand. The result? Car prices went on a Himalayan hike. Economists were crossing their fingers, hoping the prices might relax as supply chains bounced back and interest rate hikes put the brakes on borrowers.

However, new car prices decided to be overachievers, and not in the way we'd like. U.S. automakers are still producing fewer cars, choosing instead to focus on the cash cow – luxury models. Used car prices did take a breather towards the end of last year, easing inflation, but surged in demand in April.

The auto industry is still sending ripples through the economy, even though the pandemic is officially in the rearview mirror. This is a neon sign flashing "Long fight against inflation ahead" as consumers continue to burn their cash despite climbing prices.

Looking Under the Hood:

Before the pandemic, car manufacturers were cranking out more cars than consumers wanted, leading to price wars and consumer complaints of excess fees. But when the pandemic hit, factories closed, semiconductors played hide and seek, and manufacturers started pampering their priciest models – trucks and SUVs. As a result, around 5 million cars that usually would have been produced simply weren't.

Dealers then turned up the heat, charging astronomical figures above the list price, especially when stimulus checks started rolling out and people were looking to upgrade their rides. Recent research by economist Michael Havlin revealed that dealer markups contributed to 35% to 62% of total new-vehicle consumer inflation from 2019 to 2022. (😒)

While lower sales volumes brought some drawbacks (like losing out on long-term service package profits), it's safe to say that for car dealers, it was "the best of times."

🔑 Salt’s Key Takeaways:

It goes without saying (or maybe it doesn’t… so I’m going to say it anyway). Car buying, the wrong way, is an easy way to dig your budget a fresh grave. There is so much more to it than the sticker price. You will need to consider the package as a whole:

• The interest

• The insurance

• Gas

• Maintenance

• Registration

Here are our best tips on the subject:

1. Steer Clear of Brand-New: Who doesn't love that new car smell? But let's face it, that fragrance is synonymous with instant depreciation. A car loses a significant chunk of its value the moment it leaves the lot. So why not let someone else take that hit? Aim for a gently-used car instead; your wallet will thank you.

2. In the Hunt for Warranties: Warranties are the safety nets of the car buying world. Extended warranties can shield you from unexpected repair costs that can send your budget into a tailspin. Just make sure to read the fine print (you'll need your reading glasses and a good dose of patience).

3. Putting Cash Down – Your Best Friend: Got some cash to spare? A hefty down payment can be your best ally. It reduces your loan amount, meaning less interest to pay over the life of the loan. It's like dieting for your debt – shedding those extra interest pounds.

4. Shop Around for Interest Rates: Believe it or not, interest rates are not one-size-fits-all. Different lenders will offer different rates. So put on your shopping shoes and start hunting for the best deal. (Psst… credit unions are typically gold.) Remember, even a small difference in the interest rate can translate into big savings over time.

3️⃣ Debt Ceiling, Inflation, and The Most

Frequently Asked Questions

There’s a lot of movement in the news on the debt ceiling, inflation, and interest rate hikes so we thought it would be nice to take a breather from a long drawn-out paper on the fluff and hone in on the big picture.

Q1: What exactly is the debt ceiling?

A: The debt ceiling is like your credit card limit but for Uncle Sam. It's the maximum amount of debt that the U.S. government can accumulate. When the government spends more than it makes (a fiscal food fight), it borrows money to cover the difference, contributing to the national debt. The debt ceiling is the line drawn in the fiscal sand, saying "You shall not pass!" without congressional approval.

Q2: What is inflation?

A: Inflation is when your dollar starts going on a diet, buying less than before. It’s the rate at which the general level of prices for goods and services is rising. So, when inflation is up, purchasing power is down. It’s a bit like going to your favorite taco stand only to find out that your $10 now buys two tacos instead of three. It’s not the tacos’ fault, it’s inflation.

Q3: How does the debt ceiling impact inflation?

A: Here's where the dance gets complicated. In theory, if the government borrows more money (raising the debt ceiling), there's more money circulating in the economy. This can lead to inflation as more dollars chase the same amount of goods and services.

Q4: Can inflation affect the decision to raise the debt ceiling?

A: Yes, it's a two-way dance! If inflation is high, lawmakers might hesitate to raise the debt ceiling since borrowing more could add fuel to the inflation fire. However, they also have to consider the potential economic fallout if the government defaults on its debt.

Q5: What does a rising debt ceiling mean for consumers?

A: In the short term, you might not notice anything. In the long term, however, consistently raising the debt ceiling could lead to higher interest rates or inflation. That could mean your loans cost more, and your money buys less.

On the other hand…let’s talk about “Binding”

When we say the debt ceiling "binds," we're essentially saying it's putting a halt to further borrowing. If the U.S. government hits the debt ceiling and Congress doesn't raise it, well, we've got ourselves a “bind”. Here's what this could mean:

• Party Over – For a While: If the debt ceiling binds, the government can't issue any more debt. This could mean a temporary halt on some government services.

• Time to Pay the Piper: The government would have to rely solely on incoming revenue (taxes and other income) to pay its bills. But, just like you can't pay for a champagne lifestyle on a beer budget, incoming revenue might not cover all expenses.

• Default Dance: If the government can't make payments on its existing debt, we'd be in default territory. This is a situation that could cause a lot of economic turmoil both domestically and globally.

• Confidence Conundrum: Default could shake confidence in the U.S. government's creditworthiness. It's like seeing your most reliable friend forget their moves in the middle of a dance-off, causing a ripple of surprise and doubt amongst onlookers.

🔑 Pepper’s Key Takeaways:

Ah, the million-dollar question (or should I say, trillion-dollar question?) – how does this fiscal fandango affect you, the everyday consumer? Let's cut through the economic jargon and get straight to the facts.

• Interest Rates: If the U.S. defaults on its debt, it could lead to higher interest rates. That means loans and credit cards could become more expensive.

• The Inflation issue: A default could potentially trigger inflation, making your dollars less potent in the marketplace.

• Market Meltdown: A default could shock the stock market, impacting your investments.

• Economic Uncertainty: A debt ceiling bind could lead to general economic uncertainty. This could impact job markets, wage growth, and overall economic health.

Buckle up for some real talk. Our candid, no-nonsense advice may not win popularity contests, but it sure gets results.

Having chewed through the meaty topics of college costs, inflation, debt ceilings, and soaring car prices, it's time to dish out some wealth-building tips. Like a culinary master turning simple ingredients into a gastronomic feast, let's turn these economic topics into financial wins.

1. Spice up Your Skill Set (Without Breaking the Bank): Higher education can pay off, but it doesn't necessarily mean a four-year college degree. Trade schools, vocational programs, and online learning platforms can offer valuable skills without the weight of hefty student loans.

2. Drive Smart in the Auto Market: Car prices got you spinning? Remember, new isn't always better. Consider pre-owned vehicles with good maintenance records. And when purchasing, avoid unnecessary dealership packages that promise moonlight and music but deliver little value. This could save you thousands of dollars.

3. Inflation-Proof Your Investments: Inflation may seem like a solo act, but you can make it a duet with inflation-protected securities (TIPS). These can help your investment portfolio keep pace with inflation, rather than losing purchasing power.

4. Make Debt Ceiling Knowledge Your Power Move: Understanding how the debt ceiling works can help you anticipate potential economic impacts, like fluctuating interest rates. This can guide your decisions about when to borrow and how to plan for the future.

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_{Disclaimer - Any content produced by Salt & Pepper Brands is intended for informational use only. When it comes to managing your funds, we love to provide high value to our readers and give actionable tips. However, you shouldn’t construe anything here as legal, tax, investment, financial, or other advice.}