A Guide to Raising Financially Savvy Kids

Money Matters: A Guide to Raising Financially Savvy Kids

February 8, 2023  Financial Pilgrimage

There are many important aspects to raising a family; one of the most critical is financial literacy. Unfortunately, money matters can often be confusing and overwhelming – especially for those who are just starting. But it’s essential to equip our children with the knowledge and skills they need to navigate the financial world successfully.

That’s why we’ve put together this helpful guide on how to raise financially savvy families. From teaching kids about budgeting and saving to helping them understand credit and investment strategies, we’ll cover everything you need to know to set your loved ones up for success. So let’s get started!

The Importance of Teaching Financial Literacy to Children

Financial literacy is a skill that is valuable for all individuals, especially children. It has been found that teaching financial management to young people can have a profound long-term effect on their future success. Instilling sound money habits at an early age equips youth with the knowledge and skills they need to succeed. These foundational principles provide applicable solutions such as budgeting, saving, and investing, which will continue to benefit them even into adulthood.

Integrating financial education into children’s lives will benefit them financially, emotionally, and mentally since families who practice healthy money together report increased levels of trust and communication within the home. Teaching financial literacy can create a happier family environment and help ensure a successful financial future for everyone in the household – now and in the years ahead.

How to Instill Good Money Habits in Kids from an Early Age

Developing good money habits in children from a young age is one of the most powerful gifts parents can give their families. Having the knowledge and tools to make informed financial decisions helps kids build confidence, manage unexpected expenses, and grow into financially independent adults. Establishing these good money habits early on is key to ensuring long-term financial success.

To do this, parents can try creating an allowance system as soon as their kids are old enough to understand it, teaching them about spending and saving priorities, or even including them in family budget meetings. By encouraging thoughtful decision-making around finances from a young age, parents are laying the foundation for a secure financial future for their entire family.

The Benefits of Involving Kids in Family Finances

Financial literacy is an important life skill that, when learned at a young age, can help set kids up for success as they grow older. Giving children the tools to understand and take control of their financial futures is a great way to help them become financially independent. Teaching kids about family finances and instilling smart money habits in them early on can have long-term effects on their futures by enabling them to be more secure with their finances as adults.

 To continue reading, please go to the original article here:

https://financialpilgrimage.com/raising-financially-savvy-kids/

Paper Chase - Savings Bonds & Redeeming

Paper Chase - Savings Bonds & Redeeming

Marjorie Kondrack  |  Feb 8, 2023

I BEGAN BUYING Series I savings bonds in 1999. At the time, you could purchase them at a local bank and receive paper bonds. Amid 2022’s spike in inflation, those early bonds that I bought were—for a six-month stretch last year—yielding an annualized 13.08%. Not bad for a low-risk investment.

One drawback to buying savings bonds: the limit on how much a person can purchase each year. When I began buying Series I savings bonds, the maximum was $30,000 per person per year. The current annual limit on I bond purchases is now $10,000 per person, plus $5,000 more if you buy I bonds using a tax refund.

While paper savings bonds were once easy to buy, redeeming them is another story. Many banks have stopped cashing them, and the ones that still do have stringent requirements. You typically need to have an account at the bank and to have been a customer for more than a year. In my experience, most banks won’t cash more than $1,000 in bonds at any one time.

I recently visited my local bank to cash a few EE bonds that had reached their final maturity. The bank’s staff told me they no longer cashed savings bonds. Fortunately, I have an account at another major bank and was able to redeem them there.

When I went to that bank recently to cash a bond, I encountered a new teller. After a series of mistakes, she assured me that everything was okay. Then she handed me my deposit slip. It only showed the amount of a check I deposited—but not the proceeds from the bond. The bank manager then straightened everything out. Still, the whole experience was a little unsettling.

To continue reading, please go to the original article here:

https://humbledollar.com/2023/02/paper-chase-2/

How to Store Time

How to Store Time

By  Financial Imaginer

This is the first post of a series called “financial excursions” where we will explore how to understand the world better while learning about money and your life. In my view, “financial excursions” are the best way to teach your kids about money. This summer we took our kids for a trip to see one of the largest dams with hydroelectric plant in Switzerland.

We marveled at the large wall, enjoyed the views from its top, learned about its functions and of course I grabbed the opportunity to explain how building a dam is similar to capturing your income streams and save money and therefore time for later usage in life.

Let’s explore our discoveries together.

Lac Mauvoisin

This summer, we went to see the Mauvoisin dam. In Switzerland we are very proud to have the bulk of our electricity production generated by hydropower (59.9%), nuclear power comes in second (33.5%) and conventional thermal power plants (2.3%, non-renewable) conclude the electricity mix.

Switzerland has currently 638 hydroelectric power plants. The largest dam in Switzerland is the 285 metre-high Grande-Dixence dam (canton of Valais), the second largest is the Mauvoisin dam standing at 250 metres (820 ft) tall, it’s the eight-tallest in the world.

The impounded water behind the Mauvoisin dam forms the 5 kilometres (3 miles) long lake with a capacity of 211.5 million m3 and captures the water from an area as large as 167 square kilometres.

The impressive statistics about this dam include of course its capacity to produce energy. Water released from the Mauvoisin dam into several hydroelectric power stations lower in the valley are boosting the Swiss energy grid with 943 million KWh annually!

The dam was also chosen as perfect location of the world-record highest [successful] basketball shot. In 2016 the 28-year-old Australian Derek Herron launched a basketball from the top of the dam, where it fell 180 metres directly into a net placed on the ground below.   LINK

Water And Gravity

My last post about waterfalls covered the topic how to build an abundant waterfall of income streams where we have learned how to diversify “getting paid”.

Fact is: The average millionaire has seven flows of income!

It’s good to have the income flows, but what do you do once the “water” comes flowing your way? If you don’t do anything particular, “water” will follow gravity and disappear in the endless oceans where it originally came from again. LINK

Looking at the wild mountain range the kids could see how the mountains are still nicely covered in snow – even in summer. From there, the sun melts the snow into water and as it comes down, energy is set free. This energy, released from water flowing downwards, has been harnessed by humans for millennia. Over two thousand years ago, people in Greece used flowing water already to turn wheels of their mills to ground wheat into flour. Today, we convert this kinetic energy into electricity.

 This sounds all magnificent. However, there’s one big problem here: As the water keeps flowing, you must keep using and consuming the energy right on the spot. Hence, how about if you would like to delay consumption? How to prevent money simply from flowing through your life I asked my kids standing on that magnificent dam?

If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people.   Chinese saying

To continue reading, please go to the original article here:

https://www.financial-imagineer.com/store-time/

A Balanced Budget is Now “Irresponsible”

A Balanced Budget is Now “Irresponsible” 

February 7, 2023  Simon Black  Sovereign Research & Advisory

“Irresponsible.”

That’s the word that some politicians in the United States Congress have been using this week to describe their opponents’ demands to balance the federal budget.

Just imagine what that says about the state of US public finances: that even the mere thought of having a balanced budget... of living within your means... is “irresponsible”.

What’s really sad, though, is that even the politicians who want to balance the budget don’t seem to have a firm grasp of the facts.

Consider that, in fiscal year 2022, the federal government brought in $4.9 trillion dollars of tax revenue.

That is an insane, record amount of money. With nearly $5 trillion in tax revenue, you should be able to do anything you want and still have plenty of money left over.

In fact even as recently as 2019, $5 trillion in tax revenue would have easily covered the entire federal budget, with about half a trillion dollars left over to start paying down the debt.

So if the government had just kept the budget steady, last year it could have paid off $500 billion of its $31.5 trillion national debt.

Instead, last year the government opted to ADD $1.375 trillion to the debt by spending $6.27 trillion in FY2022.

Now politicians insist on raising the debt ceiling, so that the government can once again borrow to overspend its revenue by more than a trillion dollars.

The obvious solution is to slash spending. But this is a lot more complicated than most people realize.

In FY2022, for example, the government spent $706 billion just to pay the interest on the national debt. In other words, they had to borrow money just to pay interest on money they have already borrowed.

And if rates keep rising, the government’s annual interest bill will quickly reach $1 trillion or more.

Then there’s the obvious problem of entitlements, like Social Security... and the spending that is considered ‘sacrosanct’, like defense spending.

These components of federal spending are so vast, in fact, that if you take Defense, Veterans Affairs, Social Security, and Medicare off the table for cuts, you would have to cut 85% of all other federal spending in order to balance the budget.

National parks. The electric bill at the White House. John Kerry’s private jet travel to Davos. Highway spending. Thousands of federal agencies that most of us have never heard of, like the Office of Human Research Protection.

85% of all of that would need to be eliminated in order to balance the budget... and few politicians have the courage to make such deep cuts.

Compounding the problem is that tax revenue could easily fall if there is a recession.

During recessions, consumer spending slows, company profits shrink, unemployment increases, and incomes contract. That means the government will not collect as much money from corporate taxes, income taxes, and capital gains taxes.

A recession probably also means more federal stimulus, i.e. higher spending. So the deficit would increase even more.

Another major issue, of course, is that Social Security is set to run out of money in the early 2030s. And this is not some wild conspiracy theory.

As I’ve pointed out on many occasions, the Social Security Administration admits every year in its annual report that Social Security will be insolvent within a decade or so.

This is most certainly going to require a multi-trillion dollar bailout... which is going to put even more extreme pressure on public finances.

It also practically guarantees higher taxes, especially payroll taxes.

In the United States, federal payroll taxes currently take 15.3% of each paycheck when you add up both the employer and employee contributions to Social Security and Medicare.

15.3% is actually quite low when compared to other countries internationally. For example, after recent increases, the combined employee and employer payroll taxes in the UK have reached 28.3% of each paycheck (with certain exclusions).

Even Estonia, which is generally considered a low-tax country because of its flat 20% corporate income tax rate, charges a 33% payroll tax.

So the US has a LONG WAY up on its payroll tax before getting anywhere close to international averages.

And there are already calls for higher individual income tax rates, wealth taxes, higher capital gains taxes, and more.

Most likely this is going to be part of the “solution”, i.e. the grand bargain that politicians will finally be forced to make a few years down the road.

On one hand, they will agree to deep cuts to countless government programs.

They’ll also likely roll back the retirement age on Social Security, which essentially constitutes a default on the promises they’ve made to millions of Americans.

So instead of retiring at 62 or 65, it will be increased to more like 72 or 75.

But in exchange, politicians will also agree to radically increase taxes...

Naturally, the guy who shakes hands with thin air won’t say any of this in his State of the Disunion address tonight. But realistically it’s the only path forward over the next few years.

There are a few key implications here:

One, don’t rely on Social Security to fund your retirement.

Two, take steps now to reduce your tax rate.

You can actually do both of these things in one step by using tax advantaged retirement accounts.

For example, if you contribute an extra $5,000 per year to your 401(k), that reduces your current taxable income by the same amount...

PLUS that $5,000 invested through your retirement account will grow tax free.

If you do that every year, and it compounds at a rate of 9%, you are talking about an extra $461,000 saved for retirement after 25 years.

Meanwhile, you contributed $125,000 that you didn’t have to pay taxes on.

Sure, you’ll have to pay taxes when you collect distributions. But FIRST it will grow tax free for 25 years.

And that makes a huge difference. (You’d earn about $111,000 LESS over 25 years if you first paid a 24% tax on each $5,000 BEFORE investing it.)

This is just one example to highlight the fact that while these problems are unlikely to to be solved by the government, you can make sure that they don’t destroy your retirement.

And you can make sure you don’t get left holding the bag by paying higher tax rates than necessary.

That’s the whole point of a Plan B — to take control of your own circumstances, so your future is not a gamble left up to politicians.

Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/a-balanced-budget-is-now-irresponsible-145741/

House in Order

House in Order

Michael Flack  Humble Dollar  Feb 6, 2023

“I WOULD SAY TO the House, as I said to those who have joined this government: I have nothing to offer but blood, toil, tears and sweat. We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering…. You ask, what is our aim? I can answer in one word: victory. Victory at all costs—victory in spite of all terror—victory, however long and hard the road may be, for without victory there is no survival.”

What Winston Churchill said to his House during Great Britain’s darkest hour, I would say about selling yours. Selling a house shouldn’t be easy. If you sold one and it was, you didn’t do it right.

It’s likely the biggest financial transaction of your life, so I don’t think it’s too much to ask that you put in a little effort.

The non-comprehensive checklist below is based on a lifetime of experience. I haven’t always followed it, though when I didn’t, I paid for it.

Know your home’s value. When you meet with your agent, you need to have an idea of what your home is worth. If you don’t, how can you be sure the sales price your agent suggests is the correct one?

Find the right agent. Using the agent that sold you your home may be the easiest route, but it may not be the most profitable one. It may take a while, but you need to spend the time to find the best agent to sell your home. Remember, they all cost the same, so you might as well hire the right one.

News flash: You need to interview more than one agent. And maybe, just maybe the best agent may be… you, via a “for sale by owner” or discount broker.

Listen to your agent. You spent some time and effort hiring her, so now listen to what she says. If she doesn’t dig the lime green paint in the living room, the 10-foot-by-10-foot bridal portrait over the fireplace or the trampoline room, then maybe some changes are in order.

Don’t take her constructive criticism personally. In the words of the world’s greatest businessman, “It’s not personal, it’s strictly business.”

Stage the place and clean it so prospective buyers fall in love at first sight. Think curb and entry way appeal. The house I recently purchased has a stunning three-floor modern staircase that was highlighted with lights and artwork. When my wife first walked in the door, she wanted it—bad. It also needs to be clean, and I mean clean clean. Think Martha Stewart and Felix Unger had a love child clean.

Decluttering can help, as it makes every home look bigger, better and cleaner. I realize you and your family still need to live there, but you need to make it appear as though no one actually does. 

Spend some money. If, like most people, you delayed some work on your home due to frugality or procrastination, the time is now. Not too much, but enough to put a nice shine on the place.

To continue reading, please go to the original article here:

https://humbledollar.com/2023/02/house-in-order/

Find Financial Freedom: 5 Simple Tips for a Stress-Free Life

Find Financial Freedom: 5 Simple Tips for a Stress-Free Life

February 6, 2023  Financial Pilgrimage

Reducing financial stress in your life is easier said than done. Even if you have the best intentions, it can be challenging to make progress. Fortunately, making progress is possible and probable when you have the right tips to guide you.

There’s no one size fits all solution to reducing financial stress in your life. Instead, your approach depends mainly on your financial circumstances, such as how much money you have saved, your monthly expenses, and your short and long-term goals.

With all this in mind, let’s examine five tips for reducing financial stress in your life:

Create a Comprehensive Budget

This is where it all starts. You can’t make critical financial decisions unless you know what you’re up against. A comprehensive budget outlines your income and expenses, which gives you the knowledge needed to make more informed and confident decisions.

You can create a budget using an app, software application, or pen and paper. The approach you take doesn’t matter. As long as it’s comprehensive and accurate, you have everything you need in this regard. You will then find it easier to follow the other tips.

Slowly Pay Down Your Debt

In a perfect world, you’d have all the money you need to pay off your debt. But in reality, you know this is not the circumstances you’ve been dealt with. So, don’t get too far ahead of yourself. Instead, take your time and get into the frame of thinking that slow and steady will win the race.

Know how much debt you have and how much you can contribute to paying it monthly. You can then create a plan for making progress in a reasonable period. Knowing where the finish line makes it easier to take one step at a time.

Shop Local and Online Sales

To continue reading, please go to the original article here:

https://financialpilgrimage.com/reducing-financial-stress/

America Once Again Turns the Other Cheek

America Once Again Turns the Other Cheek

February 6, 2023  Simoon Black Sovereign Research & Advisory

When the infamous British smuggler Robert Jenkins sailed past Jamaica in April of 1731, he probably thought he was home free.  Jenkins had a ship full of contraband which he had picked up in the West Indies, and he was heading back to England to sell his goods in London’s premium markets.  But Jenkins wasn’t transporting drugs or alcohol, or even anything especially exotic. His ‘contraband’ was sugar. Big deal.   The West Indies at the time, though, were mainly under Spanish control. And Spain insisted that no one could export sugar from their territory without their express approval, along with paying heavy taxes and fees.

Most traders didn’t care. By 1731, Spain was a declining power. Everyone knew it. The once-dominant Spanish Empire had been vanquished by military defeat, political incompetence, succession crises, internal rebellion, and more, and it had become a hollowed out shell of its former self.

So even though it was technically illegal to export sugar from Spanish lands, British privateers and smugglers routinely thumbed their noses at the rules. After all, not only was Spain a declining power, but Britain was a rising power… so the Brits felt emboldened.

But luck was not on Jenkins’s side on that fateful day in April 1731. Somewhere off the coast of Cuba, his ship Rebecca was intercepted by a Spanish patrol boat named La Isabela.

Jenkins knew that his small vessel was outclassed, so he dropped anchor and permitted the Spanish to board his ship.

They quickly found the sugar… and we can only imagine Jenkins responding with a shrug of the shoulders and claiming “I have no idea how that got there.”

Whatever his response, the Spaniards were unimpressed. So they tied Jenkins to a mast and interrogated him for a while, until the Spanish commander finally drew his saber and sliced off Jenkins’ left ear.

Jenkins was then let go, and he hastily made his way back to London where he protested directly to King George II himself. There are even stories (though uncorroborated) that Jenkins even told his story in the House of Commons, waving his severed ear at shocked Members of Parliament.

Needless to say, Britain and Spain eventually went to war in what became known as the War of Jenkins’ Ear.

Jenkins wasn’t necessarily the primary cause. Tensions between the two kingdoms had been rising for years.

Britain was growing rapidly and wanted to muscle in on Spanish trade routes. Spain was shrinking and desperate to hold on to what it had.

War between rising and declining powers is actually a very common theme throughout history; it’s known as the Thucydides Trap, named after the ancient scholar who wrote the history of the wars between Athens and Sparta.

Athens and Sparta were also rising and declining powers in the 5th century BC. As Thucydides himself wrote, “the growth of power in Athens, and the alarm which this inspired in [Sparta], made war inevitable.”

World War I, which involved several rising and declining powers (Germany, the US, Austria-Hungary, the Ottoman Empire) was another Thucydides Trap.

And the rising tension between the US and China is quickly trending towards another.

This conflict is palpable, and in my opinion, obvious. I believe that China has been at war with the US for years, and they haven’t even tried to hide it.

Everyone is aware of the recent Chinese balloon found over nuclear sites in Montana. But the attacks have been taking place for years.

In 2018, for example, suspected Chinese double agent Jerry Chun Shing Lee was arrested at JFK airport after US authorities found evidence that he had infiltrated the CIA and sent classified material to Chinese intelligence.

In 2016, Chinese spying was so blatant that the US Department of Justice actually filed charges against China’s General Nuclear Power Group for stealing US nuclear secrets.

Over the past several years there have been several high profile corporate espionage incidents involving US companies like Google, Dow Chemical, and defense contractor Northrup Grumman.

In 2018 a group of Chinese hackers infiltrated a network associated with the Naval Undersea Warfare Group and stole US submarine cryptography.

Then there were other revelations in 2018 that China was electronically eavesdropping on then-President Trump’s iPhone calls.

In 2019 China was found to have hacked dozens of universities who were performing research from the US Navy.

In 2020, the California socialite Christine Fang was exposed as a Chinese intelligence operative who had managed to establish and maintain sexual relations with a number of prominent US politicians.

Then there was the Harvard University professor who had been paid off by Chinese intelligence to leak sensitive research.

Or the 2021 Microsoft Exchange Server attacks, in which Chinese hackers infiltrated several Microsoft mail servers and gained administrative access to countless corporate email systems.

Or China’s role in the 2020 Solar Winds attack, which breached millions of systems, plus hundreds of corporate and government networks, including classified systems.

China has even weaponized its popular social media app TikTok.

TikTok has not only stolen the most sensitive information from its users-- lifestyle habits, likes and dislikes, goals, locations, financial details, biometric data, etc.-- but it has also developed algorithms to essentially reprogram teenagers’ personalities and take them down a dark rabbit hole of anxiety, violence, depression, and even suicide.

Through TikTok, China has essentially created a tool to wage psychological warfare against an entire generation of young Americans.

And let us not forget, of course, that China also unleashed COVID-19 on the world. But, hey, we’re not allowed to talk about that lest Google and Mark Zuckerberg cancel us off the Internet again.

It’s remarkable that, despite incursion after incursion, attack after attack, the United States has done practically nothing about any of it.

Instead America has adopted a sort of 1930s style European ‘appeasement’ strategy. Or as I call it, “turn the other *** cheek”.

Chinese leaders must be aghast that they’ve been able to get away with so many brazen attacks. And it would be absurd to think their incursions will not continue.

They’ve already stolen mountains of classified information, infiltrated thousands of corporate and government networks… and pre-positioned who knows how many zero-day exploits on critical cyber infrastructure.

In other words, China has already given itself a major tactical advantage should any armed conflict break out.

What are key policymakers in the US doing about it? Well, their top priority seems to be pushing the US military and intelligence agencies to become more woke.

US military combat power is objectively in decline. The Pentagon itself acknowledges that mission readiness is falling, recruiting is abysmal, equipment is aging, and key weapons systems have lost their technological superiority.

But at least everyone is using the right pronouns!!!! We can only imagine how terrified China must be of US Special Operations Command’s diversity and inclusion.

To be fair, I don’t believe that either side really wants a war. If nothing else, China knows that its demographic pyramid is upside down, and they cannot afford for young people to die in combat.

But wars between rising and declining powers have been fought for dumber reasons… like contraband sugar, and a smuggler’s left ear.

Never forget that the ‘leader of the free world’ is a guy who shakes hands with thin air, so it’s anyone’s guess how this plays out.

A shooting war would clearly be a terrible outcome. But so is the status quo of turning the other **** cheek while China continues to weaken the US.

Neither is a good option. Yet once again America’s leadership has absolutely no answers to an obvious threat.

Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/america-once-again-turns-the-other-butt-cheek-145703/

Here's How Much Money You Need For Bankers To Think You're Rich

Here's How Much Money You Need For Bankers To Think You're Rich

Suzanne Woolley, Bloomberg News

Just how rich is “rich?”

The answer, of course, depends on who’s asking—and these days, many are.

In rich-tropolises such as New York and London, 1 per centers moan that living on US$500,000 a year feels Dickensian. With a pot of US$40 million—and private schools, a Hamptons retreat, a horse and a charity to feed—a hedge funder on the Showtime drama “Billions” exclaims: “F---! I’m broke!”

Here, then, is a real answer, courtesy of the hush-hush world of private banking: US$25 million.

Twenty-five million dollars in investable wealth. The kind of money you could afford to see dip into the red for a quarter or three, maybe even a year or two, without breaking a sweat. With US$25 million, maybe, just maybe, you're starting to be rich.

Because in this era of hyper-wealth and hyper-inequality, that is simply where rich begins—a ticket, in truth, to the first, lowly rung of rich. For most of the planet, US$25 million represents unfathomable wealth. For elite private bankers, it buys their basic service.

Call it economy-class rich. Business class? That's US$100 million. First class? US$200 million. Private-jet rich? Try US$1 billion.

We all know the wealth gap between the rich and poor, and the rich and the really rich, is only getting wider, due in large part to the bull market in stocks and wealth generated in private businesses around the world.

What may be less apparent, at least outside financial circles, is what all that money is worth to the bankers who discreetly tend those fortunes. No private bankers worth their wingtips will say they don’t care about clients with “only” a few million. Northern Trust Corp., which works with many of the world’s richest families, stresses that in recent quarters more than 50 per cent of new clients have had investable assets in excess of US$10 million. But “to get the highest level, companies have raised the bar,” said Brent Beardsley, who leads Boston Consulting Group’s work in asset and wealth management globally.

The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and US$25 million is how we define ultra-high net worth.”

Wealth managers like to frame the type of client they target in terms of the services needed. For example, a married couple with an estate valued well below US$22 million, held largely in a diversified portfolio of publicly traded stocks, may not need a lot of fancy trusts-and-estates work, since about US$22 million can go to heirs without worrying about estate and gift taxes. (That US$11.18 million per person is up from US$5.49 million in 2017, and sunsets in 2025.)

A much wealthier family with homes and assets in multiple countries and currencies might require more cash flow management, customized financing for mortgages, yachts or planes, and the ability to borrow against art or investment portfolios. It may make sense for a client to house business interests in a trust, with the adviser as trustee.

At a private bank with an investment banking arm, “sometimes the investment bank collaborates with the private bank client in doing a recapitalization of the company, or maybe sells a non-core division to create liquidity so a family member can exit the business,” said John Duffy, global head of Institutional Wealth Management for J.P. Morgan Private Bank.

“Getting rich is complicated,” said Steven Fradkin, president of wealth management at Northern Trust. “It’s just a good complication to have.”

To continue reading, please go to the original article here:

https://www.bnnbloomberg.ca/here-s-how-much-money-you-need-for-bankers-to-think-you-re-rich-1.1081416

Proof Of Time: A Different Way To Think About Gold

Proof Of Time: A Different Way To Think About Gold

February 3, 2023  Simon Black

Gold is really an amazing metal when you think about it.  It doesn’t corrode. Coins buried underground or sunk at the bottom of the ocean for hundreds of years are routinely pulled up and brushed off, and they’re good as new.  This strength and durability is precisely what makes gold so interesting as an inflation hedge.

It undoubtedly takes a lot of work to produce a gold coin or bar-- so much labor, energy, technology, etc.  A gold coin essentially represents all of the work… all of the effort and labor… that went into producing it.

This is not unique. In the same way, a bushel of wheat represents all the labor that went into producing the grain. An iPhone represents all the labor and effort that went into producing it. Except that wheat doesn’t last. iPhones don’t last. Gold does.

So gold essentially encapsulates all of the resources, including TIME, that went into producing it… in a way that lasts forever.

Right now, for example, it costs major mining companies about $1,270 to mine a single ounce of gold. So if you buy gold today, you’re essentially locking in a $1,270 production cost.

This is the reason that gold does such a great job of maintaining its value against inflation, because, over time, production costs tend to increase. And higher production costs eventually result in higher prices.

This is true with just about any product or industry. We’ve seen companies like Procter&Gamble, Unilever, CocaCola, McDonalds, etc. all increase prices because their production costs are rising.

Again, though, you cannot use a Big Mac as a store of value. It won’t last forever. It won’t even last a day.

But gold lasts. You can buy a Canadian Maple Leaf coin today, and, ten years from now, your 2023 coin will be worth exactly the same as a brand new coin minted in 2033.

And if you anticipate that inflation will push up production costs over the next decade (which tends to happen), you can easily make a case that gold prices will be higher by then.

This is the topic of our podcast episode today; we take a deeper look at why gold has long-term value-- a variation of ‘proof of work’ that I call Proof of Time.

We start out in Yap Island, in Micronesia, and discuss how the natives there developed one of the most advanced financial systems in the history of the world based on the concept of ‘Proof of Work’.

Anthropologist William Furness wrote that, despite the Yapese having no understanding of economics, they realized that “labor is the true medium of exchange and the true standard of value.”

I believe this is true. But more than labor, I believe that TIME is real standard of value.

Time is the ultimate scarce resource. No one, no matter how rich or powerful, can create any more of it. And once it is used, it is gone forever.  Labor is one of the ways that we use time. And gold is a rare asset that transmits both time and labor… forever.

We also talk about different BUY signals for gold. We talk about miners’ gross profits-- and why it makes sense to think about buying when profits are low… or even when the price of gold falls below the price of production.

In a way that’s like buying a house for less than the cost of construction; it’s a SCREAMING deal and definitely worth considering.

Gold isn’t at that level right now. But it could be soon… and that’s why it’s worth understanding how to think about gold, and many other assets, through this lens of ‘time’.

You can listen to this week’s episode here.

To your freedom,   Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/podcast/proof-of-time-a-different-way-to-think-about-gold-145695/

How the Principles of Fitness Apply to Personal Finance

How the Principles of Fitness Apply to Personal Finance

January 25, 2023  Financial Pilgrimage

What do physical fitness and personal finance have in common? On the surface, there are a lot of differences between your fitness program and financial wellness. One involves income, spending, saving, and investing. The other involves physical activity, nutrition, and overall health. The reality is that financial fitness (and just fitness) are some of the most critical areas of our lives. It’s no coincidence that there are striking similarities between fitness and finance once you start digging in.

Financial Fitness is Behavioral

Fitness programs have always been a big part of my life. So when referring to fitness, we’ll discuss both sides of the equation, including physical activity and nutrition. Being raised by a dietitian and having a love of sports had me interested in both early on. Looking back, I feel fortunate to have built habits in both areas at a relatively young age.

Growing up in a house with two younger brothers and a junk food-loving dad, the competition for unhealthy food was fierce. My mom would grocery shop every ten days, and the one bag of chips or a package of cookies would be gone within a day, sometimes minutes. That would leave us with rice cakes, fruits and veggies, and other healthy options for the rest of the week and a half. It was rough.

We had home-cooked meals that consisted of protein, carbs, and vegetables most nights. But, as I got older, I realized that having home-cooked meals was a rarity compared to other households.

We’d still get fast food on occasion. My dad was a fast-food manager, after all. With three kids in the house, sometimes the easy thing was to bring home a big bag of burgers and fries so we could eat and then make our way to evening activities. This taught me that one of the most critical nutrition lessons is “everything in moderation.” Eating fast food, sweets, or potato chips is fine occasionally as long as most of what you put into your body is more healthy.

Whenever a new diet fad becomes popular, I’ll ask my mom about it to get her thoughts. Usually, she rolls her eyes. Over the years, there have been so many diet fads—Atkins, Paleo, Intermittent Fasting, Mediterranean, South Beach, and on and on. Almost everyone will swear by one of these diets and back it with “science.” I understand that some diets result from personal beliefs or food allergies. However, most people latch onto these fad diets, stick with them for a while, and then end up right back where they started. We’ll hit on this topic more below.

Personal Finance is Personal – So Is Fitness

To continue reading, please go to the original article here:

https://financialpilgrimage.com/fitness-and-personal-finance/

Do I Need a Living Trust Lawyer?

Do I Need a Living Trust Lawyer?

Geoff Williams   Thu, February 2, 2023

If you plan to create a living trust or already have one, you may wonder if you need a living trust lawyer. The short answer is that you don't. But just because you don't technically need an attorney to put together your trust doesn't mean you shouldn't hire one. Living trusts can be complicated and if you worry about your own ability to create a trust, you may want to hire a living trust lawyer who you can consult with. Living trust lawyers can help your trustee distribute assets after your death, keep your information private and avoid probate. You may also want to work with a financial advisor who can help you create the right estate plan.

When Do You Need a Living Trust Attorney?

Everyone will feel differently about how much their net worth should be before they need a living trust attorney. Certainly, there are no hard and fast rules on when you should hire one. But you should strongly consider enlisting the help of a living trust attorney if:

Passing on Assets: If you have a lot of assets that you want to pass on to family members. If you have more than $100,000, for instance, you may want to enlist the services of a living trust lawyer. Perhaps not, however, if your financial portfolio isn't complicated and your will states that one or two family members will get your money.

Special Trust Conditions: If you have certain conditions attached to the trust then it might be right to hire a lawyer. For instance, if you want your money to go to some key family members but not others, such as your grandchildren instead of your kids or you only want the assets to go to a beneficiary if they meet certain conditions that you have set up. (In fact, if you give money to your grandchildren instead of your kids, you may want your attorney to set up what is called a generation-skipping trust.)

Tax Liability: If you are going to owe federal estate tax. The federal estate tax exemption for 2023 is $12.92 million. If your estate is larger than that, you will owe estate taxes. That said, even if you have an estate worth less than $12.92 million, you would likely want to hire a living trust attorney.

Unique Beneficiary Situation: If one or more beneficiaries have a unique situation then it can be another reason to use an attorney. For instance, if one or multiple beneficiaries has special needs or is receiving assistance from the federal government, a living trust attorney could be very helpful. You don't want to risk setting something up yourself only for your beneficiary to someday learn that you did it wrong.

For Peace of Mind: If you simply have a complicated estate and are overwhelmed by the idea of setting up a trust.

In short, the more complex your estate is and if you have a lot of wealth to give away and perhaps property as well, the more of an argument you have for hiring a living trust lawyer.

Should I Make My Living Trust Lawyer the Trustee?

To continue reading, please go to the original article here:

https://www.yahoo.com/finance/news/living-trust-lawyer-140008680.html