The Financial Riddler - 12-18-22

Financial Knowledge is Financial Empowerment

Welcome to The Financial Riddler, where losing is winning. Either way, you’ll learn new things about the global, our domestic, and your personal economy. Answers appear after each riddle. To keep from accidentally peeking, scroll down slowly and stop at the phrase And the Answer Is. Choose your answer before scrolling further. Let me know in the comments how many you correctly answered. And please share The Financial Riddler with everyone you know. Merry, Happy, and Happy! Larry

1. What share of the 500 largest U.S. corporations in 2000 — the Fortune 500 — still exist?

   a) 83 percent

   b) 59 percent

   c) 48 percent

   d) 38 percent

And the Answer Is ….

The answer is c. An astonishing 52 percent of the Fortune 500 have either gone out of business, gone bankrupt, or been acquired since 2000.

2. How much does a $1,000,000 umbrella (personal liability insurance) policy typically cost per year?
   a. $5,000
   b. $2,000
   c. $1,000
   d. $300
   

And the Answer Is ….

The answer is d. Umbrella liability insurance is incredibly cheap! Everyone needs it and everyone should buy it. It kicks in when you face a claim that goes beyond what’s covered by your basic insurance policies. You can generally buy an umbrella from your auto insurance or homeowners/renters insurance companies. This question comes from Jay Abolofia, a financial planner who uses my company’s MaxiFi Planner software. Jay also provides a MaxiFi co-piloting service. Jay advises his clients have an umbrella at least as large as their net worth.  

3. Wage inflation’s primarily influences the Consumer Price Index (CPI), i.e., inflation, via raising the price of services ex energy and ex housing? What is the weight of services in CPI, leaving out services related to energy and housing?
   a. 79 percent
   b. 49 percent
   c. 25 percent
   d. 17 percent

And the Answer Is ….

The answer is c according to Torsten Slok, Chief Economist for Apollo Global Management. Torsten is brilliant as you can see/hear in this episode of Economics Matters — the Podcast.

4. How many cryptocurrencies are there?
   a. Over 10,000
   b. 5001 to 10,000
   c. 1000 to 5000
   d. Under 1000

And the Answer Is ….

The answer is a. According to the Motley Fool, there were more than 12,000 cryptocurrencies as of June 2022 — more than double the number in June 2021.

5. Was money ever made out of wood?

   a. Yes

   b. No

And the Answer Is ….

The answer is a. During the Great Depression, the town of Tenino, Washington’s bank closed. The town issued money constituting pieces of wood that had been stamped. The wood money was issued by the Chamber of Commerce and backed by the assets of the foreclosed bank. The wooden money became famous, nationally and internationally, and turned into a collector’s item. In 2020, during the hardest COVID economic days, Tenino again started printing wooden money using the same 1890s-era printing press that it used in 1931.

Now for Some Ads from Your Local Sponsor — Me!

Please

Run MaxiFi or Maximize My Social Security for yourself/your kids/your folks.

Purchase MaxiFi or Maximize My Social Security as holiday gifts.

Check Out My Sons’ Vermont fab Airbnb. It’s available for Christmas. Comes with 2 ft of fresh snow!

Share the Financial Riddler with everyone you know.

Consider becoming a paid subscriber.