What’s up with Buffett and his $325 Billion Pile of Cash?

What’s up with Buffett and his $325 Billion Pile of Cash?

November 20, 2024 Notes From the Field By James Hickman (Simon Black)

Much has been written about Warren Buffett having sold a substantial amount of stocks. And his company, Berkshire Hathaway, is sitting on a record $325 billion cash pile as a result.

Buffett has often said that his preferred holding period for an investment is "forever". So the fact that he has sold so much stock has many observers proclaiming that "Buffett is predicting an imminent stock market crash."

Except that he's not. Buffett is a pretty transparent guy who has never been afraid to speak his mind. If he were predicting a crash, he'd probably say it.

Besides, Buffett has sold plenty of stocks in the past; this is not an anomaly. In 2022 and 2023, for example, he dumped shares of Chevron, Activision Blizzard, Taiwan Semiconductor, and HP.

This time around he sold off some shares in Apple and Bank of America. But he actually explained WHY-- especially with Apple. And I think his reasoning is worth mentioning.

Buffett explained to a reporter that "We don’t mind paying taxes at Berkshire. And we are paying a 21% federal rate,” which amounted to $5 billion last year.

But he continued, saying that the US federal corporate tax rate "was 35% not long ago, and it’s been 52% in the past. . . With the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely," i.e. that the government will take "a greater share of your income, or mine, or Berkshire's."

"So if I’m [selling Apple stock] at 21% [tax rates] this year, and we’re doing it at a lot higher percentage later on, I don’t think [shareholders] will actually mind that we sold a little Apple this year.”

This is a critical takeaway.

Nations with enormous debts and deficits can’t live beyond their means forever; Buffett isn't predicting a market crash-- he's predicting higher taxes... that, sooner or later, the federal government is going to have a take a much bigger bite out of people's paychecks.

As I've written before, there's a chance that Buffett's prediction might be wrong. It IS still possible for the US to get back on the right track-- a combination of government efficiency, spending cuts, de-regulation, and a technology (AI) fueled productivity boom could generate such an economic boom that the country COULD grow its way out of debt without having to resort to higher taxes (or inflation).

But the new administration will have to get moving immediately. Otherwise, Buffett will be proven right: higher taxes will be inevitable.

His decision to sell Bank of America stock is even more obvious and also bears mentioning. Quite simply, Bank of America is in deep trouble.

You probably recall how the Federal Reserve slashed interest rates all the way down to zero during the pandemic. It was ridiculous-- the US government was able to sell Ten Year notes with a yield of less than 0.4%.

Talk about a ******* deal. The largest debtor in the history of the world was selling bonds with such a pitiful yield that they didn't even keep up with inflation. Who would be such an idiot to buy such a terrible asset?

Bank of America, that's who. In fact, Bank of America invested hundreds of billions of dollars of their depositors' savings in these terrible assets.

Well, now that interest rates are literally more than 10x higher (from 0.4% to more than 4%), those same bonds that Bank of America bought back in 2020 and 2021 have lost a TON of money. BofA is sitting on more than $100 BILLION in unrealized losses from their bond portfolio.

Remember, this is the same reason that Silicon Valley Bank (among others) went bust last year-- the bonds they bought during the pandemic lost a ton of value, and the bank was wiped out. Bank of America is in a similar position now.

The key difference is that Bank of America has enough capital on its balance sheet to sustain those losses. So they might not be wiped out or fail. But the implications for shareholders are pretty bad.

Whenever a bank gets into trouble, the first thing that happens is the regulators step in and start making a bunch of demands. In this case, the FDIC and Fed will probably force Bank of America to raise more capital.

This will have the effect of severely diluting existing Bank of America shareholders... which most investors, especially Buffett, absolutely HATE.

The second thing that regulators always do with troubled banks is force them to suspend their dividend. And dividends are among the top reasons why Buffett likes to hold companies "forever". So given the likely prospect of zero dividends and heavily diluted shares, it looks like Buffett is getting out before regulators drop the hammer on Bank of America.

This is a big difference from "Buffett predicting a crash" as so many headlines across the Internet have been suggesting.

That said, the US stock market in general is definitely looking very expensive and near historically high valuations once again.

But there's at least one sector that's still cheap: real assets.

I've been writing for most of the past two years that real assets make a lot of sense to own, especially during inflationary times. Real assets were THE asset class to own during the 1970s stagflation.

The US is currently on the same path-- with its national debt constantly surging to new record highs (now $36 trillion), suggesting that another bout of nasty inflation could be in order down the road.

But, again, there's now a reasonable chance that the new administration is able to get the nation's finances on the right track... potentially forestalling an inflation spike and debt crisis.

So do real assets still make sense?

For now, yes. Natural gas is a great example-- as I've explained before, US natural gas is still incredibly cheap. And any American energy renaissance will depend heavily on natural gas. Prices could surge as a result, and natural gas producers could boom. Yet many companies' shares are still available for peanuts.

Bottom line, it still makes sense to consider fantastic real asset producers-- especially when they are profitable, low-debt, dividend-paying businesses that trade at absurdly low valuations.

To your freedom,   James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/whats-up-with-buffett-and-his-325-billion-pile-of-cash-151751/

If You Think Bitcoin Is On Fire, Just Wait For The Natural Gas Boom

If You Think Bitcoin Is On Fire, Just Wait For The Natural Gas Boom

November 12, 2024 Notes from the Field By James Hickman / Simon Black

“Wow, these guys are going to be in for a rude wakening about how much power is going to be available. . .” thought Joe Dominguez, CEO of Constellation Energy.

Dominguez was one of the attendees last May at a private, invitation-only gathering of energy and tech company CEOs held at Microsoft’s headquarters. The whole point was to talk about power.

Everyone already knew that AI was consuming a lot of electricity, and they assumed this demand would grow. A lot. But they didn’t realize by quite how much until OpenAI co-founder Sam Altman told the group that just a single AI model will require as much power as a large city.

Again, that’s just ONE model. And there are plenty of them out there-- Google Gemini, OpenAI, Meta AI, etc. Every major tech company-- not to mention plenty of startups-- have developed or are developing power-hungry AI models.

In terms of energy demand and power consumption, AI will be the equivalent of adding several states to the US over the next few years. And America’s power grid simply doesn’t have the capacity.

Joe Dominguez understood that immediately… which is why his company teamed up with Microsoft to restart the Three Mile Island nuclear power station in Pennsylvania.

But one additional nuclear power plant is barely going to move the needle on America’s energy needs… and it takes way too much time to build new ones.

In fact, the most recent nuclear power facility to come online in the US took more than a decade to build. So even if the industry gets started today (which they won’t), and the permitting process were quick and easy (which it won’t be), nuclear power is still a long way out.

But there’s an easier option for the here and now: natural gas.

I’ve written about this before-- US natural gas is absurdly cheap, especially compared to global prices. That’s because there’s just so damn much of it in the US… combined with the fact that natural gas is complicated to transport.

Oil is simple. Tanker ships crisscross the planet transporting crude from country to country, so the global price for oil is similar everywhere.

But it’s not that way with gas. Natural gas has to first be decontaminated of various impurities at the wellhead in order to be transported in ‘dry’ form through pipelines, then stored underground.

At the moment there is no trans-Atlantic pipeline allowing US natural gas to flow to Europe. And building one would take years if not decades.

That’s why there’s such a tremendous price difference in natural gas between the United States and Europe. The US produces oceans of it but hardly uses it, hence a cheap price. Europe barely produces any but consumes it voraciously, so the price is more than 4x higher.

If only there were a readily available way to transport natural gas across the Atlantic… then US producers would be able to export to Europe. Natural gas would be more like oil-- a global commodity whose price is more or less the same around the world. And the US price would surge.

Well, there actually is a way to do that. Natural gas can be liquefied into a condensed form (about 1/600th of the gaseous volume) and transported at -163C.

Obviously, there’s a cost to liquefying and transporting gas. But a US producer can still make so much more money selling gas to Europe-- even after the additional costs are included.

And this started to happen around 2017; US producers began liquefying their natural gas and exporting to Europe in major quantities. Within a few years, LNG exports were booming.

But then, earlier this year, Joe Biden bowed to the climate fanatics and ordered his Department of Energy to cease issuing permits for new LNG export terminals… essentially shutting down export growth.

It’s safe to expect a totally different policy starting in January, i.e. more US natural gas will flow to Europe. That means less supply in the US. Natural gas prices will rise as a result… and probably by a LOT.

But don’t forget about AI.

Let’s first think about different ways to generate electricity and the types of fuels that are available.

There’s solar and wind, for example. The prices of solar panels in particular… and wind turbines to a degree, are both falling. In large part this is because the Chinese Communist Party heavily subsidizes its domestic solar panel industry.

So, wind and solar are somewhat price competitive. But they carry a security risk: do you really want China manufacturing your entire power grid? Is it possible they built a kill switch in their software?

More importantly, they’re not terribly reliable. There are times (like night!) when the sun doesn’t shine. Germany (which generates nearly 60% of its power from renewable energy) recently experienced yet another dunkelflaute, i.e. a foggy, doldrum period in which there is neither sunshine nor wind.

This doesn’t work for AI. Tech companies need reliability.

Then there’s coal… which is super reliable, not to mention cheap and efficient. But it’s one of the dirtiest fuels known to man. Google won’t get its hands dirty with that one.

Tech companies love nuclear. They understand it is, by far, the most efficient form of energy known to man. But again, new reactors are 10+ years away. AI needs power now.

And that pretty much leaves natural gas. The US has oceans of it and barely uses a fraction of its supply. It’s absurdly cheap. In fact, according to the US National Renewable Energy Laboratory, natural gas is THE cheapest fuel source per MW of electrical capacity.

It’s the cleanest of all the conventional sources. Plus, you can construct a new facility in about two years… so new power can come online quickly. And the Big Tech companies have demonstrated that they are more than willing to shell out the cash needed to finance natural gas power plants.

Between these two trends: AI power demand, and the upcoming export boom, natural gas prices are probably going to soar.

We’ve just watched the Dow Jones Industrial Average rise by 7% to an all-time high in the last week. Bitcoin has surged by more than 30% to its all-time high.

That’s nothing compared to what we could see in the natural gas price.

It’s obviously not going to happen in a week, these trends will take longer to unfold. But it’s definitely a good time to look at some of the extremely undervalued natural gas producers whose profits will boom.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/if-you-think-bitcoin-is-on-fire-just-wait-for-the-natural-gas-boom-151726/

What About Gold?

What About Gold?

November 18, 2024  Notes From the Field – James Hickman/ Simon Black/ Sovereign Man

It was early January 2020, and weird things were happening in the world.

Socialism was on the march in the Land of the Free. Conflict, it seemed, was exploding everywhere, both abroad (North Korea, Iran, Yemen) and at home.

And most notably, over in China, the Communist government was literally welding people into their homes to ‘keep them safe’ from a bizarre virus that was spreading rapidly

It was only January, but 2020 was already looking pretty uncertain.

I wrote an article about preparing for uncertainty. And, with respect to finance, I wrote that gold was a very sensible asset to own in such times: “Frankly I don’t think anyone can credibly say that they have any idea what’s going to happen in the world in 2020. And that’s why I own gold.”

We soon found out. One of the most ridiculous hysterias in human history gripped the world. Countries were locked down. Governments and central banks conjured trillions of dollars out of thin air to pay people to stay home and not work.

Three months later, in mid-April, I wrote again that the Fed’s virtually unlimited money printing was going to be “very inflationary” and encouraged readers to consider gold once again (along with other real assets).

Quite predictably, the price of gold shot up, from $1560 in early January, to $1720 in April, to nearly $2000 in August.

At that point there was a lot of fickle, speculative capital flowing into the gold market. Gold ETFs were receiving huge inflows, pushing the price to (what was then) an all-time high.

So I wrote to our audience again on August 3rd stating that, “a short-term correction may be in order” for gold. The price peaked three days later, and then fell be several hundred dollars per ounce.

I started writing about gold again in earnest back in early 2023, a few months after the price had bottomed out. The fiscal trajectory of the United States under Joe Biden was painfully obvious at that point. The national debt was growing at an unprecedented peace-time pace, and other nations were lining up against the dollar as the global reserve currency.

Gold was a smart move. And by the end of the year I concluded that “we could easily see central banks around the world ditching their US dollars and loading up on gold as part of a new, de-dollarized global financial system.”

And that’s what started happening: fed up with dollar inflation, US government dysfunction, and America’s gargantuan national debt, foreign central banks began trading their dollars for gold.

THE GOLD PRICE SOARED AS A RESULT

Even in March of this year, when gold was at its all time high of the time at $2,150, I wrote that gold was actually a contrarian investment with a lot more room to rise.

It went all the way up to almost $2,800.

Now, I’m not citing my own work to be boastful. Trust me, I’ve gotten plenty of things wrong.

My point is to illustrate that I AM NOT A GOLD BUG. I don’t hold a fanatical view about gold that it’s the only thing worth owning and is only going to go up.

Furthermore, I don’t think about gold strictly in terms of price; that’s way too one-dimensional.

Gold is a great insurance policy. It’s a hedge against systemic risks. It’s great for estate planning and asset protection. It holds its value over inflation over long periods of time. And, sometimes, it can also be a fantastic speculation.

The above examples demonstrate that I’m not shy about saying whether I think gold has been overbought, is too expensive, or too cheap. My assessment obviously changes when the information changes.

Right now one thing is clear: foreign central banks were the ones responsible for driving the price of gold to all-time highs throughout 2024, just as I suggested would be the case in 2023.

And that was happening at a time when most individual investors (plus ‘smart money’ hedge funds) were actually selling gold. So they were missing out on the boom.

But that started to change over the past few months.

Data from Gold ETFs around the world show that individual investors have been buying tons of gold. Problem is— that money tends to be very short-term... and fickle.

We can already see it; a lot of those same small investors have already yanked their money out of gold after the US election, which is why the price is down about 10% from its record high.

But, again, the real long-term driver of gold demand is central banks. And I think a lot of foreign central banks are sitting on the sidelines right now.

With gold already near its all-time high, they have paused their buying spree, and they’re now looking at this incoming administration to see what happens next.

Can Elon trim the federal budget? Will there be a US energy renaissance or AI-fueled productivity bonanza? Will the government become functional once again? Will America’s unparalleled military superiority be restored? Will sensible monetary policy reign in inflation?

Because if those things actually happen, then the dollar has a pretty good shot of continuing its reign as the dominant global reserve currency.

And I think a lot of central banks that have been buying so much gold are happy to wait for the next several months to see what happens. Hence gold could easily trade sideways for a while, or even fall.

All that said, gold is still worth owning... because there’s still long-term risk to the US and to the dollar.

Vladimir Putin recently made some comments that a lot of folks misinterpreted as “Russia and the BRICS nations will keep using the dollar. . .”

But that’s not what Putin said.

Putin said it was the US government’s weaponization of the dollar that pushed Russia and the BRICs nations away. And as long as that threat remains, the BRICS+ bloc is plowing ahead with developing an alternate financial system.

Many large economies have already started trading with one another in a currency other than the US dollar. And that trend is likely to continue, i.e. the dollar is going to have competition.

Not to mention, there’s still a ton of uncertainty in the world. The national debt is still way too high. The Leftists still want to storm to power and Make America California. Conflict might still break out.

hese are all sensible reasons to own some gold.

But given that the key driver of the gold price, i.e. central banks, are probably going to sit on the sidelines over the next few months, I wouldn’t be buying right now on the expectation of a short-term price surge.

To your freedom,   James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/what-about-gold-151745/

6 Types Of People US Retirees Should Absolutely Not Trust

6 Types Of People US Retirees Should Absolutely Not Trust

Here Are 6 Types Of People US Retirees Should Absolutely Not Trust — how many have you let into your life?

Christy Bieber   Sun, November 17, 2024  Moneywise

As a retiree, you’ll need your money to last for the rest of your life. You should fill your hours with people who bring you joy — and you must protect your finances by avoiding those who could undermine your financial security.

Unfortunately, problematic people can hurt both your mental health and your long-term prosperity, so it's critical to be cautious about who you spend time with.

To protect yourself, always avoid these six types of people.

1. Pushy Salespeople

Two in five Americans responding to an Ipsos survey said they’ve experienced buyer’s remorse after purchasing something they later regretted. While this can happen to shoppers of all ages, a bad buy can be even more damaging for retirees on a fixed income.

Unfortunately, pushy salespeople often target the elderly because they believe it’s easy to separate them from their money. Aggressive salespeople exist everywhere, but it's important to be especially careful not to be talked into specific purchases. For example, according to the AARP, many seniors regret buying boats, RVs, fancy cars and timeshares.

2. Overly Negative People

Retirement is a time when many are looking for a new sense of purpose, but it can be a struggle. In fact, one study found that self-reported depression increases by 40% in the first years of retirement.

Surrounding yourself with negative people won't help your mental health. In fact, negative individuals could destroy your enthusiasm and initiative. They may even prompt you to make poor financial choices, such as passing up on a good investment because they're convinced it’ll go bad.

Read more: Economists weigh in on Donald Trump's pitch to eliminate Social Security taxes for seniors — here's how to bolster your retirement fund now

3. Manipulators

Tragically, many people try to manipulate retirees. This can include people they know or strangers who should be in a position of trust, such as shady financial advisers or insurance salespeople.

Americans 60 and over lost $3.4 billion to various scams in 2023, according to an ABC News report. If you don't want to be one of those victims, steer clear of anyone who tries to control your thoughts and actions. You can spot a manipulator by watching for signs like withholding the truth or trying to induce guilt.

To Read More:  https://www.yahoo.com/finance/news/6-types-people-us-retirees-110200983.html

3 Smartest Ways To Cash Out Your High-Value Coins

3 Smartest Ways To Cash Out Your High-Value Coins

Nicholas Morine  Wed, November 13, 2024   GOBankingRates

Whether you’re a seasoned coin collector or just started looking into precious metals and numismatics during the recent resurgence of interest surrounding this investment community, it’s important to know when — and where — to eventually unload some of your prize pieces.

There are options aplenty, ranging from reputable coin shops to travelling coin shows and traditional auction houses. What exactly are the smartest ways to sell your most valuable coins?

Established Coin Shops and Dealers

The tried-and-true method when it comes to selling your most expensive coins, established coin shops in your area can be a convenient — and financially beneficial — place to do business.

“Selling to a local dealer is one of the easiest options; it doesn’t require any shipping, minimum values or extra hassle. You get paid up front for everything, hand it over the counter, and you’re done,” wrote Lianna Spurrier for the American Numismatic Association (ANA) blog.

There is at least one major downside to selling to a coin shop, local or otherwise, according to Spurrier. Allowing that the dealer has to make a profit on your coins after having purchased them, you may not receive close to full retail value for your collection.

With that being said, having cash in hand as soon as you exit the shop is a major point in favor of this option. Those who opt to sell their product to reputable online dealer, such as APMEX, may have to wait slightly longer for payment to clear — largely due to shipping and processing times.

Travelling Coin Shows or Coin Expos

Travelling coin shows or coin expos can be very exciting, both for buyers and sellers. If you’re looking to lighten your collection, however, there are a few things to consider when thinking about selling to a vendor at one of these shows.

One advantage? The capability to comparison shop for the best price is placed right at your fingertips when you attend such a show.

TO READ MORE:  https://www.yahoo.com/finance/news/3-smartest-ways-cash-high-120032382.html

3 Things To Stop Buying That Are a Waste of Money

I’m a Self-Made Millionaire: 3 Things To Stop Buying That Are a Waste of Money

Andrew Lisa   Wed, November 13, 2024  GOBankingRates

Part of the reason so many lottery winners and heirs blow their windfalls shortly after getting rich is that they never learned the skills to manage, guard and grow that kind of money. The other reason is that they never had to sweat, sacrifice and risk the fortunes that fell in their laps.

But self-made millionaires know just how hard it is to build riches worth seven figures — and they’re in no rush to return to where they started. Toiling your way to wealth tends to breed financial discipline, which means passing on things that you might want and can afford. That’s how you turn a small fortune into a large one.

A Millionaire Guards His Wealth After Almost Losing It All

Brian David Crane is the founder and CEO of Spread Great Ideas, a multi-million dollar fund that invests capital “and sweat equity” into digital businesses and e-commerce brands. He’s helped launch four multi-million-dollar companies, including Archives.com, which Ancestry.com acquired for $100 million three years after its launch.

His hard work paid off, and he’s now a self-made millionaire — but you wouldn’t know it by looking at his lifestyle.

“I learned the hard way very early in my entrepreneurship journey that splurging without the correct checks and balances can make one a pauper,” said Crane. “When I sold my first company in my late 20s, I made some foolish investment decisions that brought me close to bankruptcy. I am lucky that I learned fast.”

Here are the things he doesn’t splurge on to ensure he doesn’t repeat his early career mistakes and risk all that he’s worked so hard to build.

Designer Luxury Brands

Movie, music and sports stars are infamous for squandering their fortunes on shiny things and status symbols that social media influencers peddle without mentioning that they’re depreciating assets.

Crane wants nothing to do with any of it. His favorite status symbol is one you can’t wear, drive or fly — a bulging bank account.

“With truckloads of money, you may be enticed to buy the flashiest, trendiest stuff, whether apparel or cars,” he said. “Know and understand the importance of quality and cost. Remember that when you put depreciation costs into effect, the luxury brands can punch a hole in your pocket, which you could have used to buy quality apparel from a cheaper store. Extravagance may look good to the eyes, but you can do better by putting the same money into more appropriate investments.”

Mansions

TO READ MORE:  https://www.yahoo.com/finance/news/m-self-made-millionaire-3-130010968.html

6 Things You Should Never Put in a Living Trust

6 Things You Should Never Put in a Living Trust

Preston Hartwick Tue, November 12, 2024 GOBankingRates

Estate planning provides for the smooth handling of your assets after death. However, only around 32% of American adults have a will, indicating that most people haven’t taken the appropriate steps to prepare for the management of their estate, according to LegalZoom.

One essential tool for estate planning is a living trust. It allows your assets to bypass the lengthy, costly probate process and maintains your financial privacy.

Since a living trust can be amended or revoked at any point during your lifetime, it also serves as a flexible way to control your assets, avoid family disputes and ultimately provide peace of mind knowing that your estate will be managed according to your wishes.

However, not every type of asset belongs in a living trust. This article will cover the assets you should exclude from your living trust and why.

Things To Leave Out of Your Living Trust

Including certain assets in a living trust can complicate estate management, trigger tax consequences or negatively impact the asset’s value.

While it’s always a good idea to consult an estate planning attorney for legal advice, consider excluding the following assets to maximize the benefits of your living trust:

1. Retirement Accounts

Retirement accounts like 401(k)s and IRAs can trigger tax consequences if you include them in your living will.

Since your living trust is a separate legal entity, any transfers you make from a retirement account count as a withdrawal. This makes transfers taxable and subject to penalties for early withdrawal.

One way to avoid this issue is to name the living trust as a beneficiary on the retirement account. Any funds in the account transfer to the trust upon your death and are distributed to other beneficiaries according to your will.

2. Health Savings Accounts and Medical Savings Accounts

Health savings accounts (HSAs) and medical savings accounts (MSAs) only offer tax-free growth if you use the money for medical expenses. Therefore, transferring an HSA or MSA to a living trust would cause you to lose this tax protection.

By keeping HSAs outside your trust and designating beneficiaries directly, you can continue to enjoy the tax benefits of your HSA or MSA.

3. Active Bank Accounts

You can include checking accounts or other active financial accounts into your living trust, but there are easier ways to transfer funds to your heirs and bypass the probate process.

TO READ MORE: https://www.gobankingrates.com/money/financial-planning/things-you-should-never-put-in-living-trust/?utm_term=source_link&utm_campaign=1290179&utm_source=yahoo.com&utm_content=12&utm_medium=rss

5 Money Moves Wealthy People Make Before the Start of Any New Year

5 Money Moves Wealthy People Make Before the Start of Any New Year   

By Laura Bogart  October 25, 2024

There are certain traditional ways people ring in the new year. Some clink glasses at midnight, or go in for a lucky kiss. Others meditate. And, let’s be real, plenty are already in bed. Wealthy people may be among those celebrating at parties, on the yoga mat, or off in dreamland — but they’re also a little different. They know that part of embracing the new year means setting themselves up for success.

While you may think the financial moves of the wealthy would be like moving mountains for your own humble accounts, the truth is, a lot of these tips are easy enough for everyday people to follow — including you.

GOBankingRates caught up with some financial planners and experts to learn more about the steps you can take to get ahead financially in the new year — and beyond.

1. Have a Financial Plan

George McFarlane, president of 7 Waters Advisors, joked that many people find budgeting about as appealing as getting a root canal. However, just like a root canal can eliminate a bad tooth and keep an infection from spreading, sitting down to budget can pull out the rot in your spending habits.

“Setting aside a couple of days to review your spending habits this year and plan for next year can significantly enhance your financial well-being,” he said. “Begin by examining your expenditures.”

He recommended starting with a review of your bank and credit card statements, since it’s all too easy to overlook small purchases that add up quickly. From there, you can categorize your expenses into necessary and unnecessary spending, which are pretty self-explanatory.

“After categorizing your expenses, set a savings goal for the upcoming year, aiming to increase your savings compared to the previous year,” he said. ”With these considerations in mind, create a budget that prioritizes savings and essential expenses. Once you determine how much these will cost each month, you’ll know how much you can afford to spend on non-essential items.”

2. Maximize Your Tax-Efficient Savings Contributions

As a global success coach with G Corp Advisory, Jacob Galea has insight into the habits of highly successful people. He said that high-net-worth individuals make sure they’ve maximized their contributions to tax-advantaged accounts like retirement plans and health savings accounts to help reduce taxable income while boosting their savings.

His advice?

TO READ MORE:  https://www.gobankingrates.com/money-moves-wealthy-new-year-2525842/

The 5 Most Expensive End-of-Year Money Mistakes

The 5 Most Expensive End-of-Year Money Mistakes, According to Financial Advisors

By Laura Bogart  October 25, 2024  GoBankingRates

These days, you might feel inundated with messages about your resolutions for the New Year before pumpkin-spice season even ends and Mariah Carey breaks out her high note on that iconic holiday classic. You get advertisements for gym memberships, meditation apps and green-eating meal plans — the same stuff you see every year. But you’re determined not to let next year be just like the last.

You’ve decided that this is going to be the year you get everything together, body, mind, and wallet. That’s admirable. While the will to change is a fantastic first step, you’ll go farther — and stay on your journey longer — if you understand the behaviors you don’t want to repeat. This includes the money mistakes that end up costing you big bucks every year — money that’s better where it belongs, back in your wallet.

GOBankingRates chatted with some financial experts to learn about the most expensive faux pas that can bleed your accounts, and how to correct them.

1. You Spend Too Much During the Holidays

If you get a little too holly jolly with your money during the holidays, you’re hardly alone. There are parties galore, with food to bring and outfits to wear. And, of course, the presents. It’s easy to overspend during the holidays, even if you think you’re getting the best prices through sales days like Black Friday or Cyber Monday. In fact, Erika Kullberg, attorney and personal finance expert and founder of Erika.com, said that the lure of these short-term deals can actually compel you to spend more than you intended.

“The promise of short-term deals can be super alluring and really hits us with that fear of missing out if we don’t grab the deal,” she said. “But more often than not, the sales really aren’t all that good, and [the items] will more than likely be available during the next big sale.”

She encourages you to resist the temptation to unearth your credit card whenever you’re tempted by those big sales. Sure, if there’s something you’ve really had your eye on and built into your budget, you can treat yourself. However, don’t just get it because it’s shiny and bright — and available. You might not get a lump of coal in your stocking, but you’ll possibly blow up your budget and rack up high-interest credit card debt.

2. You Get Too Generous

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4 Reasons You Should Stock Up on $100 Bills Before the Winter

I’m a Money Expert: 4 Reasons You Should Stock Up on $100 Bills Before the Winter

Joel Lim  Sat, November 9, 2024    GOBankingRates

Digital payments are expected to reach $11 trillion in 2024. That’s a lot of virtual money changing hands.

But what if something goes wrong? It happens all the time. Banks close, digital payment platforms fail, or you lose your debit card. While an increase in spending during the winter months is predictable, the unexpected events are, of course, unpredictable.

So, one thing is clear — there are many things could happen that prevent you from using your hard-earned money. So, is it a good idea to stock up on $100 bills now? Waiting could mean your money gets tied up, and you miss out on your planned purchase.

Why Hundreds?

The $100 bill is the most common currency in circulation in the United States, yet it is also the most hated. Most people generally withdraw $100 bills when they want to store cash, not spend it. It’s like a guaranteed savings account right there in your hands. (Or under your mattress.)

Sure, it might feel unsafe to have cash on hand when you could keep it in savings, but your savings aren’t always readily available to you. Cash is.

Why not twenties? $20 bills take up way more space than hundreds. And if you’re storing a couple thousand dollars for the winter, twenties will require much more space. It becomes a bulky, unmanageable problem to wade through twenties when you can just grab a crisp $100.

Plus, if you pull out hundreds “just in case” and don’t end up spending them, it’s easier to deposit them back into the bank.

You might catch the occasional eye-roll if you pull out a C-note. Or you may have to wait a bit longer for your cashier to run a counterfeit pen across the bill. But you’ll have peace of mind that you have all the cash you need to get through an unpredictable winter.

As Tim Peters, Chief Marketing Officer at Enghouse Systems, who works with dozens of financial institutions, notes, “Based on historical norms, we know people are cash hoarders with the advent of uncertainty and thus secure lending capabilities. An example is 2008 when the cash circulation rose by 20%.”

Winter is perhaps the most unpredictable time of year, and it gets more chaotic each year with the climate changing wildly, among other things. Here are just a few reasons to stock up on $100 bills before winter arrives.

1. The Banks Could Close

Where we once knew with some certainty what kind of weather we would see in specific regions, those days are gone. Now, snowstorms hit regions not always prepared, leaving millions in freezing temperatures.

TO READ MORE:  https://www.yahoo.com/finance/news/m-money-expert-4-reasons-140116476.html

30 Scam Phone Numbers To Block and Area Codes To Avoid

30 Scam Phone Numbers To Block and Area Codes To Avoid

August 22, 2024  by Joshua Rodriguez

Scams are becoming more and more prevalent, and simply blocking unwanted calls doesn’t always do the trick. They’re so common that experts have coined the term “scam economy.” Unfortunately, it’s easy to change a phone number, and scammers often do so to avoid getting caught or having their call blocked. The good news is that scams operate in many known area codes, so you can avoid being the next victim simply by honing in on the list of scammer phone numbers.

Quick Take: List of Scammer Phone Numbers

Wouldn’t it be great to have a list of scam phone numbers handy to avoid them altogether or at least have 1-888 scammer numbers be clear in their intention on the caller ID? Short of never answering the phone or putting yourself on every national “do not call” list, there are some red flags you can alert yourself to before accidentally giving out your Social Security number or being a victim of identity theft.

Here is a list of scammer phone numbers that are known by government agencies such as the Federal Trade Commission.

11 Top Scam Phone Numbers

AT&T raffle winners: 904-495-2559

Bank account temporarily on hold scam: 858-605-9622

Card lock scam: 878-877-1402

Debit card frozen scam: 863-532-7969

Failed delivery attempt scam: 469-709-7630

Fake Publisher’s Clearing House win: 805-637-7243

Student loan forgiveness scam: 202-221-7923

Weight loss and delivery scam: 312-339-1227

Wells Fargo text message scam: 865-630-4266

Unpaid taxes scam: 347-437-1689

USPS scam: 301-307-4601

Quick Take: List of Scam Area Codes

More than 300 area codes exist in the United States alone which is a target-rich environment for phone scammers. The good news is that scam callers will often show up under common area codes for incoming calls. Here are 19 area codes you should never answer if you don’t know who’s on the other end.

19 Top Scam Area Codes

216: Cleveland, Ohio

218: Northern Minnesota

232: Sierra Leone

234: Nigeria

242: Bahamas

268: Antigua and Barbuda

284: British Virgin Islands

332: New York City

347: New York City

355: Albania

375: Belarus

469: Dallas, Texas

649: Turks and Caicos Islands

646: Manhattan

657: La Palma, California

712: Western Iowa

829: Dominican Republic

868: Trinidad and Tobago

876: Jamaica

What Is a Scam Phone Number or Area Code?

Scam phone numbers and area codes typically involve calls you receive from numbers you don’t recognize. Often there is no customer service you can contact or law enforcement you can involve for these calls obfuscated by distance or sheer volume. Changing a phone number is easy, so it’s challenging to catch every scam phone number out there.

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