6 Signs You Are Legitimately Financially Stable
.6 Signs You Are Legitimately Financially Stable
Heather Taylor Thu, September 1, 2022
How do you know when you are financially stable? There are subtle signs that determine if your overall financial health is in good standing. If you've ever wondered, "What are the signs I am financially stable?" -- see if you can check off the following boxes that indicate financial stability.
You Have a Savings Account and an Emergency Fund
Financially stable individuals tend to have a few savings vehicles at their disposal. They have a traditional savings account and an emergency fund in the event of emergencies. Saving from a fiscally healthy place means money isn't going toward a rainy day purchase. It's a savings for the future. Financially stable individuals consistently set money aside for saving toward retirement and meeting their future goals.
6 Signs You Are Legitimately Financially Stable
Heather Taylor Thu, September 1, 2022
How do you know when you are financially stable? There are subtle signs that determine if your overall financial health is in good standing. If you've ever wondered, "What are the signs I am financially stable?" -- see if you can check off the following boxes that indicate financial stability.
You Have a Savings Account and an Emergency Fund
Financially stable individuals tend to have a few savings vehicles at their disposal. They have a traditional savings account and an emergency fund in the event of emergencies. Saving from a fiscally healthy place means money isn't going toward a rainy day purchase. It's a savings for the future. Financially stable individuals consistently set money aside for saving toward retirement and meeting their future goals.
You Pay Your Bills on Time
What credit card debt? A financially stable individual pays their bills on time each month. If there's a balance, like on a credit card, they pay it off in full.
Those in fiscally good health do not make it a habit to pay bills when they are past due, pay the minimum on their balances, max out credit cards to their limits or allow collection agencies to contact them for past due bills. Credit cards in particular are used by financially stable individuals for rewards rather than as dependency for any and all purchases.
You Have Flexibility
What does this mean? Zachary Barton -- CFP, financial planner and owner at Barton Financial Group -- said financial flexibility is the ability to handle the unexpected and quickly get back to your previous position of financial strength.
This means if there's suddenly a large, unexpected expense, a financially stable person will not beat themselves up over it. Instead, they will recognize they can recover quickly. Barton uses the example of suddenly finding out you must pay an expensive auto repair bill. While you have the appropriate insurance to protect you against liability claims, you need to pay out of pocket for repairs and must pay the mechanic using your credit card.
This is okay because you have flexibility. "You'll know if you are strong financially if by the end of 60 days you have been able to pay off the credit card and replenish your emergency fund," said Barton.
You View Debt as a Leverage Tool
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/6-signs-legitimately-financially-stable-190019426.html
How Much Cash To Have Stashed at Home at All Times
.How Much Cash To Have Stashed at Home at All Times
GoBankingRates
Digital payment platforms like Venmo, PayPal and CashApp have changed the way we use and keep physical cash on hand. Most people rarely keep cash on their person, much less at home.
However, there are always unexpected events that can lead to a necessity for having a bit of cash on hand, particularly emergencies ranging from catastrophic weather (hurricanes, wildfire), to power outages. If you can’t access your digital currency or your banking systems are down, having cash can allow you to get gas, food, and medicines with ease. However, just how much cash should you have on hand? We asked experts to weigh in and the answer is: It depends.
How Much Cash To Have Stashed at Home at All Times
GoBankingRates
Digital payment platforms like Venmo, PayPal and CashApp have changed the way we use and keep physical cash on hand. Most people rarely keep cash on their person, much less at home.
However, there are always unexpected events that can lead to a necessity for having a bit of cash on hand, particularly emergencies ranging from catastrophic weather (hurricanes, wildfire), to power outages. If you can’t access your digital currency or your banking systems are down, having cash can allow you to get gas, food, and medicines with ease. However, just how much cash should you have on hand? We asked experts to weigh in and the answer is: It depends.
Keep Cash to a Minimum
From a security point of view, cash is the most insecure asset you can have. Keeping it to a minimum in the house in the case of fire or theft is a good rule of thumb, said Ryan McCarty, CFP from McCarty Money Matters.
Just how minimum is up for debate among financial experts. Danielle Miura, CFP, the founder and owner of Spark Financials, suggested, “You should keep enough money on hand to get you a couple of gallons of gas, pay for a delivery tip, or to help in unfortunate events,” or around $100-$200 at a time. “Emergency funds should not be held at your home, they should be stored in a high-yield savings account of your choice.”
McCarty framed it more in terms of a ratio: “In terms of amount, don’t let your cash exceed 10% of your overall emergency fund and/or $10,000. You can’t deposit more than $10,000 in cash in a given year without raising red flags with the IRS.”
Enough for Emergency Expenses
Yasmin Purnell, a personal finance expert and founder of The Wallet Moth, a finance website, suggested you keep enough cash on hand in case of an emergency that would require you to access “temporary accommodation, food and drink, gasoline, and medication.” Purnell added, “As a general rule of thumb, having access to $1,000 in cash at home would ensure you can at least pay for immediate expenses in the case of a national emergency.”
To continue reading, please go to the original article here:
Why Is Money So Confusing?
.Why Is Money So Confusing?
Liz Weston, CFP®
Thu, September 1, 2022 NerdWallet
The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Managing money is an essential life skill, yet most U.S. adults would fail a financial literacy test. Consider the results of a survey meant to measure financial literacy, called the TIAA Institute-GFLEC Personal Finance Index. On average, U.S. adults correctly answered only 50% of its financial literacy questions in 2022.
Why Is Money So Confusing?
Liz Weston, CFP®
Thu, September 1, 2022 NerdWallet
The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Managing money is an essential life skill, yet most U.S. adults would fail a financial literacy test. Consider the results of a survey meant to measure financial literacy, called the TIAA Institute-GFLEC Personal Finance Index. On average, U.S. adults correctly answered only 50% of its financial literacy questions in 2022.
In other words: If you find money confusing, you’re far from alone. But the reasons you’re baffled may have more to do with how our brains work than how money does. Understanding some of the common barriers, along with strategies to cope, could help you finally get a handle on your finances.
Money is a new language
You wouldn’t expect to carry on a fluent conversation in Madrid or Mexico City if you only knew a few words of Spanish. Similarly, personal finance is loaded with terms, jargon and concepts that take a while to learn.
“Entering the world of money is like entering a whole new culture and learning a new language,” says Ed Coambs, a certified financial planner and couples therapist in Charlotte, North Carolina.
You shouldn’t feel stupid for not understanding everything instantly, and no one should make you feel that way. However, learning can be more difficult if we encounter judgmental, condescending or dogmatic people — which unfortunately describes many people who are fluent in personal finance lingo.
“Many money experts, professional or non-professional, can become varying degrees of authoritarian: ‘Yes, I know what's best for you. This is what you should do,’” Coambs says.
People with a rigid approach to personal finance may not understand the culture and life experiences that shaped you. They may insist you funnel every possible dollar into paying off debt or saving for retirement, for instance, but you may feel it’s important to tithe to your church or support your elderly parents.
Rather than dictating how you should spend your money, helpful advisors meet people where they are, says Rachael DeLeon, interim director of the Association for Financial Counseling & Planning Education, a nonprofit foundation that administers financial counseling credentials.
“It's figuring out: What are your values? What's important to you? And how do you make that work within your own financial situation?” DeLeon says.
To continue reading, please go to the original article here:
It’s A Crazy World When Zimbabwe Has The Most Stable Currency
.It’s A Crazy World When Zimbabwe Has The Most Stable Currency
Notes From the Field By Simon Black August 30, 2022
Robert Mugabe could have gone down in history with the same esteem and grandeur as Nelson Mandela.
Like Mandela, Mugabe was imprisoned for several years for being a prominent anti-colonialist leader in Zimbabwe— then called Rhodesia.
Upon release from prison, and with a little help from the international community, Mugabe became Prime Minister of Zimbabwe in 1980. And the first few years of his leadership were quite reasonable. But that all changed in 1987 when the constitution was amended and Mugabe gained dictatorial powers.
It’s A Crazy World When Zimbabwe Has The Most Stable Currency
Notes From the Field By Simon Black August 30, 2022
Robert Mugabe could have gone down in history with the same esteem and grandeur as Nelson Mandela.
Like Mandela, Mugabe was imprisoned for several years for being a prominent anti-colonialist leader in Zimbabwe— then called Rhodesia.
Upon release from prison, and with a little help from the international community, Mugabe became Prime Minister of Zimbabwe in 1980. And the first few years of his leadership were quite reasonable. But that all changed in 1987 when the constitution was amended and Mugabe gained dictatorial powers.
Mugabe destroyed the economy with insane regulations, fought expensive wars, and indebted the nation.
He also confiscated private land from established (mostly white) farmers, which he redistributed to his supporters, most of whom had no experience in farming.
Unsurprisingly, Zimbabwe’s once-booming agriculture exports collapsed almost overnight.
This authoritarian control pervaded across nearly all industries, and by the early 2000s, Zimbabwe’s economy was in shambles.
About half the country was unemployed and inflation skyrocketed.
In 2001 alone, retail prices doubled. But that was just the beginning. By 2003, inflation was nearly 600%. By 2006, more than 1,200%.
At its peak in 2008, Zimbabwe’s inflation was estimated by various economists to be somewhere between 500 billion and 89 SEXTILLIAN percent, which looks like this: 89,000,000,000,000,000,000,000%.
In 2009, the government finally capitulated and chose to abandon its currency altogether. And for the next several years, Zimbabwe had no official currency.
People transacted in dollars, euros, South African rand, Chinese renminbi… any foreign currency they could get their hands on.
I’ve been to Zimbabwe a few times; the people are intelligent, resourceful, and good-natured. And they have amazing stories to tell about living through hyperinflation.
By 2016, Zimbabwe’s government decided to give a national currency another chance. They started by issuing “bond notes”. And a couple years later they reestablished a new Zimbabwe dollar.
But this time, they promised to use restraint in printing money.
Now, I’m sure you will be shocked to learn that the central bank of Zimbabwe did not exercise restraint...
The new currency was introduced at parity with the US dollar, allegedly worth 1:1. And Zimbabwe’s government threatened to imprison anyone who ignored the official exchange rate.
Naturally, though, the government’s excessive spending and money printing caused the currency to lose value almost immediately. And soon they had to establish price controls based on an exchange rate of 25:1 to USD.
By the start of 2022, the Zimbabwean dollar was worth about 108:1 USD. And it’s now trading around 520:1.
But hey, that’s way better than the 35 quadrillion to 1 ratio of 2009...
There has been an interesting development, however. Instead of continuing with its failed policies, the central bank of Zimbabwe has begun issuing gold coins.
And the 91.67% pure, one ounce Zimbabwean gold coins are currently going for about $1,830 USD.
As of early August, about 4,500 had been sold to be used for local trade, which means they’re circulating as a legal currency in the Zimbabwean economy. That makes these gold coins the most stable currency in the world.
Now, personally I’m a bit skeptical and would love to see a full chemical assay to make sure the coins are actually as pure as the government claims.
Also, crypto would be a MUCH better medium of exchange for day-to-day transactions than gold coins.
But (assuming everything is legitimate) Zimbabwe is at least taking a step in the right direction, which is more than most western governments can say for themselves.
Sure, the US, UK, and Europe don’t have anywhere close to Zimbabwe’s level of inflation, which was more than 200% in the last 12 months.
But since 1971, when the US dollar was decoupled from gold, the value of the US dollar has fallen by nearly 87%.
Even worse is that interest rates in the US (when adjusted for inflation) have been negative for most of the past twenty years. Anyone who responsibly saved their money in, say, a savings account, LOST money after accounting for inflation and taxes.
Given that governments and central banks are key drivers of inflation and interest rates, this is tantamount to official theft.
And yet they keep doubling down on failed policies. They act like they can cure inflation, which in large part was caused by excessive government spending, with more government spending.
And they treat the absurdly-named Inflation Reduction Act as if it’s some sort of magical spell that can ward off the most destructive economic monsters.
If only that were true.
But in the real world, inflation will inevitably increase as they borrow another trillion dollars to pour into the IRS, triggering millions of new audits and causing American productivity to decline.
Forgiving student debt is another inflationary move. If nothing else, universities know that they can raise their tuition because all of the suckers taxpayers are footing the bill for an extra $10,000 to $20,000.
The US national debt now stands at $31 trillion, an increase of $2.4 trillion so far this fiscal year. And the Treasury Department is forecasting multi-trillion dollar deficits for years to come.
These deficits are extremely inflationary... because the government pays for them by having the central bank print more money.
At least Zimbabwe has figured it out. Western governments, on the other hand, still believe they can print and spend as much money as they like without consequence.
This is pure madness. But fortunately you don’t have to wait for the federal government to start acting responsibly.
You are perfectly free to store a portion of your savings in gold, silver, or any number of other real assets that hold value in times of inflation.
And with the way things are going, that might not be a bad idea to consider.
To your freedom, Simon Black, Founder, SovereignMan.com
What to Do With a Financial Windfall
.What to Do With a Financial Windfall
Rivan V. Stinson, Staff Writer Tue, August 30, 2022 Kiplinger
It’s a cliché, but it’s also true: Every cloud really does have a silver lining. That was hammered home for me after I was recently rear-ended in a car accident. I wasn’t hurt, but it was a frightening experience, and the amount of paperwork required in its aftermath was sometimes overwhelming.
After I filed my claim and it was processed, my auto insurer deemed my car a total loss. But before I had time to mourn the fact that I was carless—again—the silver lining emerged: I was refunded part of my auto insurance premium for the month, and I was cut a check for $11,000, which was what my auto insurance company concluded my 2014 Chevy Cruze was worth. While the settlement wasn’t a Powerball, “quit my job” amount, it did give me pause, because I had to decide what to do with it.
What to Do With a Financial Windfall
Rivan V. Stinson, Staff Writer Tue, August 30, 2022 Kiplinger
It’s a cliché, but it’s also true: Every cloud really does have a silver lining. That was hammered home for me after I was recently rear-ended in a car accident. I wasn’t hurt, but it was a frightening experience, and the amount of paperwork required in its aftermath was sometimes overwhelming.
After I filed my claim and it was processed, my auto insurer deemed my car a total loss. But before I had time to mourn the fact that I was carless—again—the silver lining emerged: I was refunded part of my auto insurance premium for the month, and I was cut a check for $11,000, which was what my auto insurance company concluded my 2014 Chevy Cruze was worth. While the settlement wasn’t a Powerball, “quit my job” amount, it did give me pause, because I had to decide what to do with it.
Back to Basics
I knew I didn’t want to run out and lock myself into an auto loan for another car. With prices for new and used vehicles still crazy high, adding a car payment didn’t sit well with me—especially since my old car was paid off. Plus, the Washington, D.C. metro area has a public transit system that I had used consistently before I had a car. So I did what I’ve been meaning to do for a while: I added money to my emergency fund.
You generally want to have at least three to six months’ worth of expenses stashed in a dedicated savings account in case of a job loss, medical emergency or costly car-repair bill. (Here's more on where to find emergency cash.) However, with inflation running at about 9%, you should stash more in the account.
Bulking up your savings by about 10% or more will give you more protection in the event of an emergency, says Samantha Gorelick, a certified financial planner with Brunch & Budget, a financial planning firm. You need to be prepared to cover your expenses at elevated prices if inflation continues, she says.
If you don’t have an emergency fund, an unexpected windfall is a good way to start one. Put your money to work by parking it an interest-bearing savings account. Rates are climbing for both savings and money market accounts at many financial institutions. (For current rates on top-yielding accounts, go to depositaccounts.com.)
Another personal finance basic to consider: Pay down any credit card debt you have. For those carrying a balance, using even a modest windfall to pay it down could put you on a better financial footing and potentially increase your credit score.
To continue reading, please go to the original article here:
The 8 Places Billionaires Keep Their Money
.The 8 Places Billionaires Keep Their Money
Andrew Dehan Tue, August 30, 2022
Billionaires have been able to not only acquire wealth but most have gradually built it over time. This means that many have had successful investments, which makes it natural for everyone else to wonder where they are investing or keeping their money in order to see that growth. We’ve compiled a list of some of the most common investments that billionaires make when looking for sustained growth of their money over time.
Keep in mind, though, that billionaires don’t typically manage their own money and instead choose to work with a financial advisor to help with their asset allocation.
The 8 Places Billionaires Keep Their Money
Andrew Dehan Tue, August 30, 2022
Billionaires have been able to not only acquire wealth but most have gradually built it over time. This means that many have had successful investments, which makes it natural for everyone else to wonder where they are investing or keeping their money in order to see that growth. We’ve compiled a list of some of the most common investments that billionaires make when looking for sustained growth of their money over time.
Keep in mind, though, that billionaires don’t typically manage their own money and instead choose to work with a financial advisor to help with their asset allocation.
1. Cash and Cash Equivalents
Cash and cash equivalents are common places where billionaires keep of some their money. Though not often thought of as an investment, cash is a liquid asset, meaning you can use it in a variety of ways as needs or desires arise. In a crisis, having cash on hand gives you the flexibility to respond. That’s why billionaires keep a significant portion of their money in cash and cash equivalents.
However, with current rates of inflation, cash has less of an emphasis. Inflation causes the value of money to drop, so having too much of it on hand during an inflationary period can mean you lose significantly.
2. Commodities
Commodities are often another piece of a billionaire’s portfolio, and having such assets can help hedge against risk, inflation and volatility. For instance, in a scenario where inflation is causing difficulty for the rest of the market, having investments in raw materials whose price is rising can help protect you if other parts of your portfolio are suffering. People and economies depend on commodities, and inflation makes them worth more money.
Raw materials and agricultural products – like precious metals, industrial metals like copper, oil and natural gas, coffee, corn, pork bellies and soy beans – are popular types of commodities held and traded by billionaires or their agents.
3. Foreign Currencies
Holding foreign currencies offers billionaires the potential to capitalize on fluctuations of value in various currencies. It is simply a form of diversification: Rather than have all their assets denominated in one currency, they spread some of their wealth to assets denominated in other currencies. That offers protection against one currency falling and capital appreciation if another currency in which they have assets gains value.
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/8-places-billionaires-keep-money-130030395.html
Some Clear Thinking About Stagflation
.Some Clear Thinking About Stagflation
Notes From The Field By Simon Black August 29, 2022
Let’s not mince words: stagflation is here. Let’s also not overreact: the world is not coming to an end. And, like all things, there are both risks and rewards that will arise.
First, what do we know?
Historically high inflation is obvious. Plus many major economies around the world are already sputtering.
Germany’s economy stagnated with 0% growth last quarter. China’s economy practically ground to a halt. Economies in the UK and Hong Kong contracted slightly. And the US economy has already contracted for two consecutive quarters.
Some Clear Thinking About Stagflation
Notes From The Field By Simon Black August 29, 2022
Let’s not mince words: stagflation is here. Let’s also not overreact: the world is not coming to an end. And, like all things, there are both risks and rewards that will arise.
First, what do we know?
Historically high inflation is obvious. Plus many major economies around the world are already sputtering.
Germany’s economy stagnated with 0% growth last quarter. China’s economy practically ground to a halt. Economies in the UK and Hong Kong contracted slightly. And the US economy has already contracted for two consecutive quarters.
Now, in nearly every other country on the planet, when your economy shrinks for two consecutive quarters, they call that a recession.
But not in the Land of the Free.
In America, a recession is defined as whatever a special government committee within the National Bureau of Economic Research wants it to be.
I’m serious. The agency’s own website states that “the designation of a recession is the province of a committee of experts.”
Wonderful. More ‘experts’ who don’t have an iota of common sense among them. And this is why, at least in the United States, the government has thus far refused to call this a recession. In fact they insist we are NOT in a recession.
Definitions and “province” aside, however, a recession is more like what US Supreme Court Justice Potter Stewart said of obscenity in a famous 1964 case: “I know it when I see it.”
And normal people know recession when they see it. Recession is when people and businesses feel less prosperous. We start cutting back and stressing more about money. We dream less about the future and worry more about the present.
But even if the economy isn’t in recession yet, it seems fairly clear that one is coming. There’s already a mountain of evidence from corporate earnings reports showing steep declines in both consumer spending and business investment.
Those wonderfully infallible “experts” have certainly done a bang-up job steering us into this slowdown.
The Federal Reserve in particular slashed interest rates to zero and held them there for most of the last 14 years. They conjured trillions of dollars out of thin air, they grew their own balance sheet by a factor of TEN… and then kept insisting that there would never be any consequences EVER from such an absurd course of action.
Then, when inflation finally did take hold, they denied it at first. Then they called it transitory. Then they finally promised they would ‘do something’ about inflation… eventually.
Later on they even admitted to being totally ignorant, saying “we now understand better how little we understand about inflation.” (It seems like the first nine words should apply to all government experts.)
Now, at last, the Fed gave us the courtesy of speaking plainly and bluntly on Friday morning when the Chairman gave a terse warning about the US economy.
He stated that “the US economy is clearly slowing down” and that fixing inflation would likely “require a sustained period of below-trend growth” and “softening of labor market conditions.”
In other words, that means the economy will be sluggish, and a lot of people will lose their jobs. Sounds like a recession to me, even if the bureaucrats don’t want to admit it.
The real conundrum, however, is that inducing this economic pain won’t necessarily fix the inflation problem.
Any high school economics student knows about the Law of Supply and Demand. And it very easily explains why the world has so much inflation.
Policymakers artificially created soaring demand during the COVID pandemic when they conjured trillions of dollars out of thin air and gave everybody free money.
All the unemployment benefits, being paid to stay home, the PPP ‘loans’, etc. flooded the economy with cash. People have been spending it. And that created a surge in demand for goods and services-- everything from microchips to rentals on Airbnb.
Big increases in demand are fine, and don’t necessarily cause price increases… as long as the supply of goods and services is able to keep up.
But it didn’t. Supply collapsed-- again, primarily because of governments’ COVID response. With everyone being forced to stay at home, there were obviously far fewer goods and services being produced.
And those effects have lingered. Businesses everywhere are struggling to find enough workers. And labor shortages in critical vocations like trade and transportation have caused major supply chain bottlenecks.
(Obviously none of these issues existed prior to the public health dictators’ takeover of the global economy.)
On top of the pandemic-related supply challenges, however, businesses and workers have also had to contend with an avalanche of new rules and regulations that make it more difficult to produce.
Many of these debilitating rules single out oil and gas producers, which contributes to an ongoing energy crisis. And higher energy prices also make it more difficult to produce goods and services. So it’s quite a vicious circle.
All of this is to say that the Federal Reserve can raise interest rates and cause a recession to cool off demand.
But a decrease in demand isn’t enough. Inflation can only be tamed if there is a substantial increase in the supply of goods and services. And the Fed can’t really influence that.
Yet unless this happens, i.e. workers and businesses are once again free to produce, all we’ll be left with is stagflation: a recession combined with stubborn inflation that won’t go back to normal.
Now let’s go back to the beginning: do not overreact. The world is not coming to an end. ‘Stagflation’ doesn’t mean 20% inflation and 20% unemployment.
In fact it’s much more likely that inflation falls to 5%, unemployment rises to 8%… and the Fed will consider that a job well done.
It’s also temporary.
The constraints on supply being caused by political stupidity and geopolitical tension are, to borrow from the Fed, “transitory”.
While I generally place little hope in politicians, historically speaking, opposition candidates tend to win elections during economic stagnation. And that pattern should lead to more responsible, pro-business governments.
Then there’s the matter of our burgeoning energy crisis, which is also holding back supply.
This, too, is temporary. In fact the world is on the cusp on a new energy Renaissance that has the potential to fuel growth and prosperity for decades to come.
This is a really important (and uplifting) trend to understand, and we’ll discuss it very soon.
Last, rising interest rates and stagflation will likely have an adverse impact on both housing and the stock market.
Interest rates are a major factor in these asset prices; and higher rates mean that housing and stock prices will fall.
During the stagflation of the 1970s, home prices were relatively flat after adjusting for inflation. And stocks lost about 50%. But that was the average performance for all assets.
With housing, specific locations did extremely well. Home prices in Houston and California, for example, boomed during the 1970s, vastly outpacing inflation.
There were also plenty of companies that did extremely well. John Deere stock more than doubled in price between 1972 and 1979 after adjusting for inflation, and it paid a solid dividend at the same time.
Commodities performed strongly during the 1970s. Agriculture and farmland did extremely well. Gold was the best performing asset of the decade.
And there were plenty of startups, including Apple and Microsoft, that got their start during the stagflation of the 1970s.
The bottom line here is that there’s no reason to panic, and plenty of reason to be fairly optimistic about the future (once you understand long-term energy trends).
But it’s more important than ever to be extremely rational… even surgical… in your thinking.
To your freedom, Simon Black, Founder, SovereignMan.com
https://www.sovereignman.com/trends/some-clear-thinking-about-stagflation-36940/
6 Causes of Financial Problems and How You Can Solve Them
.6 Causes of Financial Problems and How You Can Solve Them
Nicole Spector Thu, August 25, 2022
So many Americans are trapped in debt and underfunded for retirement that one has to ask, “What is going on? Why are so many of us in such financial trouble?”
A lot of it isn’t our fault and is beyond our control, but we do need to get to the root of the money problems that we can control. So, it’s important to understand the causes of financial problems. What are they and how do they manifest? More importantly, how can we solve them?
6 Causes of Financial Problems and How You Can Solve Them
Nicole Spector Thu, August 25, 2022
So many Americans are trapped in debt and underfunded for retirement that one has to ask, “What is going on? Why are so many of us in such financial trouble?”
A lot of it isn’t our fault and is beyond our control, but we do need to get to the root of the money problems that we can control. So, it’s important to understand the causes of financial problems. What are they and how do they manifest? More importantly, how can we solve them?
Let’s figure it out.
Financial Illiteracy
Financial literacy is gravely lacking in our society, and it’s causing big trouble in our financial lives.
“Remaining in the dark about certain financial factors will eventually lead you to be more exposed to countless financial problems,” said Clint Proctor, editor-in-chief of Investor Junkie.
It may not be your fault that you lack financial literacy, but it is your responsibility to resolve it. You might want to hire a financial advisor for intensive one-on-one help, but you can also check out a growing list of books and podcasts to learn more.
Having a Negative Mindset
Seeing the world through rose-colored glasses won’t solely guide you to financial success, but the reverse mindset can outright hurt you.
“Behind a lot of common financial issues is a disabling money mindset,” said Kelley Holland, a financial empowerment coach. “This can manifest as negative self-talk, like, ‘I’m hopeless with money’ or ‘I’ll never be able to retire.’ It can also show up as avoidance: Not opening bills that arrive, failing to track spending, or missing payment deadlines.”
There are a few ways to tackle a negative money mindset including to challenge your beliefs and recognize your own strengths and past achievements.
“Consider whether your belief is accurate — or whether you really have strengths or experiences you can draw on to take charge of your finances,” Holland said. “For example, if you have had success adopting a fitness regimen, you can think about the reminders and motivators you drew on to make that happen.”
Getting Bad Advice From So-Called ‘Experts’
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/6-causes-financial-problems-solve-200052276.html
What Happens to Your Mortgage When You Die?
.What Happens to Your Mortgage When You Die?
Mark Henricks April 18, 2022
If you die owing money on a mortgage, the mortgage remains in force. If you have a co-signer, the co-signer may still be obligated to pay back the loan. A spouse or other family member who inherits a house generally has the right to take over the payments and keep the home. Alternatively, terms of a will may direct that the estate’s assets be used to pay off the mortgage, and sometimes a life insurance policy will pay off the mortgage if the original borrower dies.
If no one will assume the mortgage and there is no provision to pay it off, the lender may foreclose on the property and sell it. A financial advisor can help you deal with mortgage challenges during the estate planning process.
What Happens to Your Mortgage When You Die?
Mark Henricks April 18, 2022
If you die owing money on a mortgage, the mortgage remains in force. If you have a co-signer, the co-signer may still be obligated to pay back the loan. A spouse or other family member who inherits a house generally has the right to take over the payments and keep the home. Alternatively, terms of a will may direct that the estate’s assets be used to pay off the mortgage, and sometimes a life insurance policy will pay off the mortgage if the original borrower dies.
If no one will assume the mortgage and there is no provision to pay it off, the lender may foreclose on the property and sell it. A financial advisor can help you deal with mortgage challenges during the estate planning process.
Mortgages, unlike most other debts, don’t usually have to be paid back from the estate of a deceased person. With credit cards, car loans and similar debts, family members generally aren’t directly responsible. Instead, debts will be settled with funds from or generated by sales of assets in the estate before anything is distributed to heirs.
When the deceased person was married, the situation is different in community property states. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, surviving spouses may be responsible for paying back mortgages as well as other debts assumed by a deceased spouse during the course of the marriage. Note that debts assumed before the start of the marriage are normally not the responsibility of the surviving spouse. The specifics vary significantly from state to state, however.
With a mortgage, only the specific property that secures the loan is affected. Unless the will specifies otherwise, the other assets in the estate can be distributed to beneficiaries through probate rather than being applied to the mortgage.
While the mortgage debt survives the deceased person, the responsibility for paying it back doesn’t automatically transfer to anyone other than a surviving spouse in a community property state, again unless there is a co-signer. If there is a co-signer, that person remains responsible for the mortgage debt after the death of the other co-borrower.
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https://finance.yahoo.com/news/happens-mortgage-die-150414432.html
What Is 5 by 5 Power?
.What Is 5 by 5 Power?
By Barclay Palmer Updated June 18, 2022
Reviewed By Pamela Rodriguez Fact Checked By Michael Logan
A 5 by 5 power clause in a trust document gives the beneficiary the right to withdraw either $5,000 or 5% of the fair market value of the trust account per year, whichever is greater. This is in addition to the regular income payout benefit of the trust.
The clause is intended to guarantee the beneficiary a minimum dollar distribution in years in which the assets invested for the trust decline. A trust is established in a will in order to provide a regular annual income to one or more beneficiaries from the assets of the estate.
What Is 5 by 5 Power?
By Barclay Palmer Updated June 18, 2022
Reviewed By Pamela Rodriguez Fact Checked By Michael Logan
A 5 by 5 power clause in a trust document gives the beneficiary the right to withdraw either $5,000 or 5% of the fair market value of the trust account per year, whichever is greater. This is in addition to the regular income payout benefit of the trust.
The clause is intended to guarantee the beneficiary a minimum dollar distribution in years in which the assets invested for the trust decline. A trust is established in a will in order to provide a regular annual income to one or more beneficiaries from the assets of the estate.
A 5 by 5 power clause in a trust allows the beneficiaries access to an additional amount each year if needed. The amount is the greater of $5,000 or 5% of the estate assets. One of the greatest powers of the 5 by 5 is that distributions taken by the beneficiary can be written off as deductible.
Understanding 5 by 5 Power in a Trust
A trust is an alternative to a lump-sum inheritance. Instead of willing a large amount of money with no strings attached, a wealthy individual may put the money in a trust. The money is then invested and the heirs are paid a predetermined amount of money annually, usually a percentage of the value of the trust.
The trust may be designed to protect the interests of minor children, infirm heirs, or offspring that the beneficiary, rightly or wrongly, doesn't consider capable of handling a fortune wisely. This allows the beneficiary to still financially benefit, but forces them to work within the budget of the clause.
The 5 by 5 clause may be included to give the heirs access to an additional amount of money yearly without giving them the ability to decimate the value of the estate. It is particularly useful if the annual payment falls short due to a decline in the investments held in the trust.
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Which of the 3 Financial Phases Are You In?
.Which of the 3 Financial Phases Are You In?
by: Kelli Kiemle, AIF® April 11, 2022
Knowing which of the financial phases of life you are in can help you better plan to build, protect and enjoy your assets, no matter what your age.
Every year we see the same months, holidays and seasons – it’s all pretty predictable. While you may not know when a winter storm will hit, you can usually count on chillier weather come winter. The same can be said for financial phases. While not always easy to predict, you can find patterns if you look for them.
But how does knowing a financial phase pattern help? When it comes to financial planning, the answer is a lot.
Which of the 3 Financial Phases Are You In?
by: Kelli Kiemle, AIF® April 11, 2022
Knowing which of the financial phases of life you are in can help you better plan to build, protect and enjoy your assets, no matter what your age.
Every year we see the same months, holidays and seasons – it’s all pretty predictable. While you may not know when a winter storm will hit, you can usually count on chillier weather come winter. The same can be said for financial phases. While not always easy to predict, you can find patterns if you look for them.
But how does knowing a financial phase pattern help? When it comes to financial planning, the answer is a lot.
What Are Financial Phases?
There is a natural ebb and flow to money habits throughout the year. For example, most of us tend to spend more around the holidays because of gifts and parties. When January hits, people take a look at their budget, set goals for the year and attempt a financial diet. The same can happen in the summer as people splash out on vacations or enjoy a plethora of activities with their families.
Patterns can also occur throughout, showing up in spending and savings habits. Recent college grads probably live on a tight budget with less savings, whereas an established professional might be more focused on long-term goals, such as buying a home or saving for retirement.
Is It The Same For Everyone?
While the year can offer similar periods of spending and saving, each individual has their own plans, priorities and habits that make them unique. If you enjoy saving, maybe you take vacations during shoulder seasons to take advantage of lower hotel and airfare prices or you sign up for a credit card (of course, paying it off every month) that supports your travel habit – think free rooms, reduced flights, etc. Or if you always go big on your birthday each year, you create a plan to automatically save money every month into a “birthday fund” so when the time comes each year you’re ready.
The same is true when looking at life patterns or saving and investing. If you land a well-paid job out of college, perhaps you spend more lavishly than the average early 20-something would. Or someone who joined the FIRE movement would contribute to their retirement and save differently since they have a different goal. It’s important to understand that each person has their own goals and priorities, and sometimes life gets in the way with unexpected obstacles.
How Does Knowing This Help?
https://www.kiplinger.com/personal-finance/604519/which-of-the-3-financial-phases-are-you-in