December 14, 2016

Tobacco companies and gun manufacturers get plenty of scorn. Yet for some reason, the multinational corporations that make and sell perhaps the most addictive and damaging legal substance of all get a free pass. To the point that when such a company is the target of an acquisition or merger, senators and governors of opposing parties will band together to see that nothing even threatens to jeopardize the company’s future. We’re referring to purveyors of alcohol in general, and Anheuser-Busch InBev (BUD) in particular. The world’s largest brewer sells $43.6 billion worth of the demon liquid (and related, less satanic potables) every year, boasting a high gross margin of 60.7% and inspiring some of the strongest customer loyalty this side of Harley-Davidson Inc. (HOG). The result is a $177 billion company that seems capable of doing little wrong in the eyes of investors. In 2008, InBev merged with Anheuser-Busch. Anheuser-Busch InBev operates in 25 countries. The company divides its operations into 9 regions: North America, Mexico, Latin America North, Latin America South, Europe, Asia Pacific North, Asia Pacific South and Global Export & Holding Companies. The company’s North American region was responsible for 25.8% of total volume in 2015 – totaling in 118 million hectoliters (over 3.1 billion gallons). We take it for granted that the region that includes the United States has to be Anheuser-Busch InBev’s largest, right? Wrong. That would be Latin America North, at almost 27%. This includes Brazil, one of the combined company’s countries of origin. The Asia Pacific region follows at 19.3%. On a per-capita basis, no one drinks like Europeans do. Volume there accounted for 9.4% of the company total, followed by Mexico at 9.1%, and Latin America South at 7.9%. Anheuser-Busch InBev has announced plans to buy SABMiller, the world’s second-largest brewer. The investor who goes long on Anheuser-Busch InBev stock is rarely disappointed, whether in the short term or beyond.

Credit card debt can be a major roadblock to your financial goals, such as saving for retirement or increasing your net worth. Unfortunately, new data from the New York Federal Reserve suggests that after a debt decline, Americans are borrowing money at a rate that approaches pre–Great Recession levels. The result: Household debt is rising and credit cards are a major driver, along with mortgages, student loans and auto loans. Here’s a quick breakdown of what the Fed’s research uncovered. Credit card debt continues to contribute to a household’s total indebtedness, as well as student loan and mortgage debt. The increase in household debt may be attributable to two primary factors: a steady increase in the cost of living and stagnation in wages. Since 2003 household incomes have increased by 28% but the cost of living has climbed by 30%. That gap doesn’t sound big, but the disparity between earning and spending may be a driving force for some Americans to turn to credit cards to cover the gap. Some items, such as medical costs (57%) and food and beverage prices (36%) increased massively more. The cost of living is going to force people to create a debt repayment plan, and at the same time force others to create additional streams of income. I suggest that if you haven’t created a budget, then you should. A budget will show you how much you are spending, and when your income is the most vulnerable.
If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included How to Retire Early: The Shockingly Simple Math from Video School Online YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG


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