Some Things I Think
Some Things I Think
APR 26, 2023 by Morgan Housel@morganhousel
The fastest way to get rich is to go slow.
Many beliefs are held because there is a social and tribal benefit to holding them, not necessarily because they’re true. Nothing is more blinding than success caused by luck, because when you succeed without effort it’s easy to think, “I must be naturally talented.” Social media makes more sense when you view it as a place people go to perform rather than a place to communicate. Comedy is the best way to teach about human behavior. George Carlin, Chris Rock, and Jerry Seinfeld have done more to enlighten others than 99.9% of psychology PhDs.
The best measure of wealth is what you have minus what you want. (By this measure, some billionaires are broke.) The most valuable personal finance asset is not needing to impress anyone.
Some Things I Think
APR 26, 2023 by Morgan Housel@morganhousel
The fastest way to get rich is to go slow.
Many beliefs are held because there is a social and tribal benefit to holding them, not necessarily because they’re true. Nothing is more blinding than success caused by luck, because when you succeed without effort it’s easy to think, “I must be naturally talented.” Social media makes more sense when you view it as a place people go to perform rather than a place to communicate. Comedy is the best way to teach about human behavior. George Carlin, Chris Rock, and Jerry Seinfeld have done more to enlighten others than 99.9% of psychology PhDs.
The best measure of wealth is what you have minus what you want. (By this measure, some billionaires are broke.) The most valuable personal finance asset is not needing to impress anyone.
Most financial debates are people with different time horizons talking over each other.
From school, I remember: Every good story I was told, but none of the formulas I memorized before a test.
It’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.
“People like you more when you are working towards something, not when you have it.” - Drake
A lot of people seem to have a necessary level of stress, and when their life is going well they make up imaginary problems to fill the void.
Few things are as persuasive as your own BS, while nothing is easier to identify than other people’s BS.
Everything is sales.
Every employee is replaceable.
Those we admire most in sports, business, politics, and entertainment tend to share one quality: They knew when it was time to quit, time to pass the baton, time to disappear, in a way that preserved, even enhanced, their reputation. Nothing diminishes past success like overstaying your welcome.
The hardest thing when studying history is that you know how the story ends, which makes it impossible to put yourself in people’s shoes and imagine what they were thinking or feeling in the past.
You can only ignore the critics if you also discount the praise.
There are two types of people: Those who want to know more and those who want to defend what they already know.
My jealousy of dogs: They can sit for hours doing absolutely nothing, appearing perfectly content.
A lot of people like making money more than they enjoy having money. The change, not the accumulated amount, is the thrill.
Matt Damon says, “You retard socially and emotionally the moment you become famous. Your experience of the world is never the same.” The same may be true – and far more common – for those who become wealthy.
Most beliefs are self-validating. Angry people look for problems and find them everywhere, happy people seek out smiles and find them everywhere, pessimists look for trouble and find it everywhere. Brains are good at filtering inputs to focus on what you want to believe.
Few traits are as attractive as humility, but few are as common as vanity.
Everyone wants to be lucky and to be admired, but no one admires a person for their luck.
The market is rational but investors play different games and those games look irrational to people playing a different game.
A big problem with bubbles is the reflexive association between wealth and wisdom, so a bunch of crazy ideas are taken seriously because a temporarily rich person said it.
Logic doesn’t persuade people. Clarity, storytelling, and appealing to self-interest do.
To continue reading, please go to the original article here:
Is It Better to Be Rich or Wealthy?
Is It Better to Be Rich or Wealthy?
Rebecca Lake Fri, April 28, 2023
Being rich and being wealthy are often seen as being the same thing. After all, people who are rich or wealthy tend to have more assets and greater financial freedom than the typical person. In reality, there are some major differences that define what it means to be rich vs. wealthy. If your financial goals include rising to the ranks of the rich or growing wealth, it’s important to know how they compare.
A financial advisor can help you create a financial plan for your wealth management needs and goals.
Is It Better to Be Rich or Wealthy?
Rebecca Lake Fri, April 28, 2023
Being rich and being wealthy are often seen as being the same thing. After all, people who are rich or wealthy tend to have more assets and greater financial freedom than the typical person. In reality, there are some major differences that define what it means to be rich vs. wealthy. If your financial goals include rising to the ranks of the rich or growing wealth, it’s important to know how they compare.
A financial advisor can help you create a financial plan for your wealth management needs and goals.
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
What Does It Mean to Be Rich?
Income is often used as a standard when measuring what it means to be a rich person. So what income is considered rich?
If you’re looking at the top 1% of earners, then you’d need an annual income of $540,009 to be rich, according to the Internal Revenue Service (IRS). The Economic Policy Institute (EPI) defines the top 1% as people who earn $819,324 or more per year.
What about the top 5% or the top 20%? If you think of the top 5% as being rich, then you’d need to make $335,891 per year according to the EPI. If you’d like to crack the top 20%, you’d need to earn $130,545 per year, according to a SmartAsset analysis of income distributions in the top 100 largest U.S. cities.
It’s important to keep in mind that income alone does not necessarily determine whether you’re rich or not. Someone who makes a higher income but spends instead of saving or has significant amounts of debt, for example, may live a rich lifestyle but be broke on paper.
What Does It Mean to Be Wealthy?
Wealth is often defined in terms of net worth. Net worth is a measurement of the difference between your assets and liabilities.
Generally, a liquid net worth of $1 million would make you a high net worth (HNW) individual. To reach very high net worth status, you’d need a net worth of $5 million to $10 million. Individuals with a net worth of $30 million or more might qualify as ultra-high net worth.
Those numbers reflect how the financial industry typically views wealth. The average American views a net worth of $774,000 as enough to be financially comfortable, with a net worth of $2.2 million required to be wealthy. That’s according to Schwab’s 2022 Modern Wealth Survey.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Differences Between Rich vs. Wealthy
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/key-differences-between-rich-wealthy-140035053.html
Experts: How To Spot Money Scams Via Email and Text Messaging
Experts: How To Spot Money Scams Via Email and Text Messaging
Heather Taylor Thu, April 27, 2023
Have you ever received a text message or email making an unusual money request? This is a type of social engineering scam often referred to as phishing, and it is quickly becoming all too common among the masses. According to Kevin Lee, VP of trust and safety at Sift, 98% of cybercrime involves social engineering. Fraudsters using social engineering scams will trick or manipulate people into revealing confidential information including passwords, credit card numbers or other credentials. Cybercriminals will use this information to commit payment fraud or account takeover (ATO) attacks. According to a recent Sift report, ATO attacks jumped by 131% in the first half of 2022.
Experts: How To Spot Money Scams Via Email and Text Messaging
Heather Taylor Thu, April 27, 2023
Have you ever received a text message or email making an unusual money request? This is a type of social engineering scam often referred to as phishing, and it is quickly becoming all too common among the masses. According to Kevin Lee, VP of trust and safety at Sift, 98% of cybercrime involves social engineering. Fraudsters using social engineering scams will trick or manipulate people into revealing confidential information including passwords, credit card numbers or other credentials. Cybercriminals will use this information to commit payment fraud or account takeover (ATO) attacks. According to a recent Sift report, ATO attacks jumped by 131% in the first half of 2022.
As phishing and money scams become increasingly convincing, what can people do to protect themselves? Here’s how you can spot money scams through email and text messaging and what to do next if you think you’re the target of a scammer.
Signs of a Money Scam
The next time you receive an unusual or suspicious text or email, keep your eyes peeled for the following signs of a social engineering scam.
Sense of Urgency
One of the most common tactics fraudsters use is creating a sense of urgency.
This is an attempt to prompt you to quickly take action without thinking all the way through about the text or email you just received. Lee uses the example of receiving a text that says your bank account will be shut down unless you immediately share a password, download something or click a link.
Grammatical Errors
Grammatical errors are common red flags indicating scammy messages. These will include obvious misspellings or strange wording and can easily be spotted.
Mismatching Sender Email and Domain Name
Look out for sender emails and domain names that don’t match. “It’s important to pay attention to missing letters or numbers that stand in for letters, like the number 0 instead of an O,” Lee said.
Jason Zirkle, certified fraud examiner (CFE) at the Association of Certified Fraud Examiners (ACFE), said to keep an eye out to see whether the sender’s email address looks like a suspicious variation of a well-known company. A good example is receiving an email from “Google” that has the email address google-support-us.com.
Texts or Emails “Claiming” Something
Zirkle said you can spot money scams through texts or emails “claiming” the following have happened:
You won a prize in a contest, even if you don’t remember entering the contest.
The email or text is from law enforcement or a government agency.
The text or email claims it is from a shipping company, like UPS or FedEx, and it needs you to click on a tracking link.
Zirkle said, “Any text messages asking you to click a link, no matter who they purport to be from, are a red flag.”
Email Attachments
Do not open or download any attachments you are not expecting in an email.
Hyperlinks in Email
To continue reading, please go to the original article here:
https://news.yahoo.com/finance/news/experts-spot-money-scams-via-130038136.html
Here's What Happens When You Don't Roll Over Your 401(k)
Here's What Happens When You Don't Roll Over Your 401(k)
by Maurie Backman | Published on April 25, 2023
Key points
When you leave a job, you may have the option to keep your money in your old 401(k).
If you don't roll that 401(k) into a new one or an IRA, you might lose track of your money or leave it invested in assets that don't serve you well.
Here's What Happens When You Don't Roll Over Your 401(k)
by Maurie Backman | Published on April 25, 2023
Key points
When you leave a job, you may have the option to keep your money in your old 401(k).
If you don't roll that 401(k) into a new one or an IRA, you might lose track of your money or leave it invested in assets that don't serve you well.
Many companies offer the benefit of a 401(k) plan, and it's a good option to take advantage of. Often, when you contribute money to a 401(k), your employer will match your contributions to some degree, allowing you to grow your long-term savings nicely.
But you may reach a point when you're ready to leave your job. You may, upon getting a new job, have the option to leave your 401(k) where it is rather than roll it over into an IRA or a new 401(k) plan. But that's not necessarily your best choice.
The problem with leaving your 401(k) where it is
Often, as long as your balance meets a certain threshold, you'll be allowed to keep your money in an old 401(k) even if you're no longer employed by the company sponsoring it. But if you leave your money alone rather than roll it over, a couple of bad things might happen.
First, you might forget that money exists. Capitalize, a service that helps people recover old 401(k)s, estimates there are more than 25 million "orphaned" 401(k) accounts that have been left behind at a former employer and forgotten about.
To continue reading, please go to the original article here: LINK
Can You Lose the Rights to Your 401(k)?
Can You Lose the Rights to Your 401(k)?
Laura Gariepy Wed, April 26, 2023
Your employer can’t seize your 401(k) contributions or the investment earnings from those contributions when you change jobs voluntarily or when you get fired or laid off. However, your retirement plan is subject to rules imposed by the company and the IRS. Those rules could limit your rights to the funds in your account.
Here are three factors that can impact what happens to your 401(k) when you leave an organization:
Can You Lose the Rights to Your 401(k)?
Laura Gariepy Wed, April 26, 2023
Your employer can’t seize your 401(k) contributions or the investment earnings from those contributions when you change jobs voluntarily or when you get fired or laid off. However, your retirement plan is subject to rules imposed by the company and the IRS. Those rules could limit your rights to the funds in your account.
Here are three factors that can impact what happens to your 401(k) when you leave an organization:
Account Balance
The amount of money in your 401(k) plays a significant role in determining what happens to your account when your employment gets terminated.
Here’s what the company can do at various balance levels:
Under $1,000: Cut you a check for the total amount
$1,000-$5,000: Move the funds to an employer-selected individual retirement account
$5,000+: Leave the money where it is or ask your permission to move it
Legal Update Ahead: The government recently passed the SECURE 2.0 Act, which makes several changes to how retirement accounts get handled. One such change is that the $5,000 threshold mentioned above will increase to $7,000 for distributions processed after Dec. 31, 2023.
Vesting Schedule
You own every penny of the money you contribute to your 401(k). However, companies can set vesting schedules to determine when you can keep the employer’s contributions to your account should you leave the firm.
Many companies use a tiered vesting schedule, where you earn the right to keep a percentage of the employer match based on your years of service. For example, you may earn 20% each year during years two through six. In that case, you’d need to remain employed for six years to be fully vested, which means you’re eligible to receive all of the company’s contributions upon termination.
Outstanding Loans
To continue reading, please go to the original article here:
https://news.yahoo.com/finance/news/lose-rights-401-k-123730039.html
What Happens To Your 401(k) When You Get Laid Off?
What Happens To Your 401(k) When You Get Laid Off?
There is nothing pleasant about getting fired or laid off. It leaves you with much uncertainty about the future — and rightfully so, as this means a temporary halt in income. But although you are no longer earning, your 401(k) is not in danger.
So, what happens to your 401(k) when you get fired or laid off? Your 401(k) is safe even after a job layoff. You are entitled to the funds you contributed to the account and any earnings they generated.
Read on to understand what you can do and what your termination means for your investment.
What Happens To Your 401(k) When You Get Laid Off?
There is nothing pleasant about getting fired or laid off. It leaves you with much uncertainty about the future — and rightfully so, as this means a temporary halt in income. But although you are no longer earning, your 401(k) is not in danger.
So, what happens to your 401(k) when you get fired or laid off? Your 401(k) is safe even after a job layoff. You are entitled to the funds you contributed to the account and any earnings they generated.
Read on to understand what you can do and what your termination means for your investment.
What Is a 401(k) and How Does It Benefit Employees?
A 401(k) is a profit-sharing retirement saving plan some U.S. employers offer. It lets you contribute a portion of your pre-tax income to a tax-advantaged investment account. You can invest these contributions in mutual funds, stocks and bonds. Most 401(k) plans have a minimum of three choices for investment, while others offer up to twelve.
The main benefit of a 401(k) is that the money you contribute is not taxed until withdrawal when you retire. This factor helps your savings grow faster over time. Besides your contribution, some employers make matching contributions to your 401(k), where they put a percentage of your contributions to your account.
Does A 401(K) Have Limitations?
Some limitations and rules are associated with your 401(k). For example, annual contribution limits exist, and there may be restrictions on when and how you can withdraw your money. These limits vary from year to year. The IRS recently released the newest contribution limit for 2023 to $22,500, an increase of $6,500.
Moreover, fees and expenses may be associated with managing the account, which varies depending on the plan. Examples include plan administration fees, investment fees, individual service fees, loads or commissions and management fees, among others.
What Happens To Your 401(k) When You Get Fired?
If your employer terminates your job, your 401(k) plan account stays yours. In addition to your contributions, you also have a right to your employer contributions or matching ones, as long as those funds are vested.
What can you do with your 401(k) after termination? Multiple options for accessing and working with your 401(k) are available to you.
To continue reading, please go to the original article here:
How to Protect Assets From Stepchildren
How to Protect Assets From Stepchildren
Mark Henricks Wed, April 26, 2023
Parents in second marriages may want to leave assets to their own children while ensuring that stepchildren do not inherit. When stepchildren inherit, it can create resentment leading to legal disputes that can cost the estate significantly in delay and attorney fees. By taking specific estate planning steps, however, you can effectively protect assets from stepchildren. A financial advisor can inform you about your options when planning an estate involving stepchildren.
How to Protect Assets From Stepchildren
Mark Henricks Wed, April 26, 2023
Parents in second marriages may want to leave assets to their own children while ensuring that stepchildren do not inherit. When stepchildren inherit, it can create resentment leading to legal disputes that can cost the estate significantly in delay and attorney fees. By taking specific estate planning steps, however, you can effectively protect assets from stepchildren. A financial advisor can inform you about your options when planning an estate involving stepchildren.
Stepchild Concerns
Estate planning is nearly always worthwhile but can be extra important when you have stepchildren. If a stepchild inherits some of your assets, your own children may feel they have been cheated of their rightful inheritance. To protect their interests, children and other heirs may contest awards to stepchildren. Court cases from these efforts can delay settlement for years while legal fees reduce the size of the estate.
Your children are recognized as heirs to your estate even in the absence of a will or other document naming them as beneficiaries. Stepchildren do not have the same rights. In most cases, they do not inherit from a deceased stepparent’s estate unless specifically listed as beneficiaries in estate planning documents.
However, stepchildren still may receive assets from your estate if your spouse dies after you and leaves assets to their children. Preventing stepchildren from ever receiving assets from your estate can be done, but requires definite action to exclude them as beneficiaries.
Protective Measures
If your partner from a second or later marriage dies first, you usually don’t have to do anything to prevent stepchildren from receiving assets you control. Even after an intestate death that occurs without a valid will, stepchildren are typically not recognized as having any right to assets in the estate. However, a few states do grant stepchildren some rights of inheritance. If you live in one of these jurisdictions or just want to be sure, you can take protective measures.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Using a Will
A will can be used to name specific people, including stepchildren and exclude them from receiving benefits from the estate. Simply leaving the names of any stepchildren out of the last will and testament is likely to be enough to keep them from acquiring any of your assets after your death. To be certain, you can designate by name stepchildren and anyone else you don’t want to get any assets when you die.
Trusts
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/protect-assets-stepchildren-130020299.html
Hard Data That Confidence In The Dollar Is Cracking
Hard Data That Confidence In The Dollar Is Cracking
April 25, 2023 By Simon Black – Sovereign Man.com
It is becoming increasingly clear that the world is losing faith in the United States dollar... and rapidly turning to alternatives. And that’s a huge deal for the United States.
For nearly eight decades, the US economy and US government have enjoyed the unparalleled benefits of the dollar being the world’s reserve currency.
Hard Data That Confidence In The Dollar Is Cracking
April 25, 2023 By Simon Black – Sovereign Man.com
It is becoming increasingly clear that the world is losing faith in the United States dollar... and rapidly turning to alternatives. And that’s a huge deal for the United States.
For nearly eight decades, the US economy and US government have enjoyed the unparalleled benefits of the dollar being the world’s reserve currency.
This means that nearly every government, central bank, commercial bank, and large corporation in the world holds at least some US dollars. Foreign companies use the dollar to trade with one another. Foreign governments and corporations often issue bonds in US dollars.
And most of the world’s major commodities, including oil, are priced and traded in US dollars.
The dollar’s dominance is so ridiculous that even when Airbus— a European aircraft manufacturer— sells jets to Air France, that transaction is settled in US dollars.
This has been an enormous benefit to the United States; every other country in the world that engages in international trade and commerce HAS to hold US dollars... which means that foreign institutions end up parking vast sums of money in the US financial system.
And that money creates additional capital that gets put to work to grow the US economy.
Think about that again: rather than invest their own money to grow their own economies, foreign governments and institutions are essentially forced to invest a big part of their savings for the exclusive benefit of the US economy... simply because they need access to the world’s reserve currency.
A lot of that money ends up in the hands of the US federal government; in fact, foreigners own roughly $7.5 trillion of US government bonds... which has been an absurdly good benefit for the Treasury Department.
Whenever the federal government has come up with some stupid, expensive idea... like paying people to stay home and NOT work... foreigners have always helped pay for it by buying more US government bonds— again, simply because they need to own US dollars.
But as I wrote to subscribers as far back as August of 2015, the dollar’s reserve currency dominance “is by no means written in stone. The US dollar is not the first global reserve currency, and it won’t be the last.”
Throughout history there have been many reserve currencies, from the ancient Greek drachma to the gold solidus of the Byzantine empire, the Venetian gold ducat, the Spanish real de ocho, to the British pound. No reserve currency lasts forever.
History shows that a reserve currency is displaced whenever the rest of the world loses confidence; this typically happens when the government’s finances deteriorate severely.
Back in 2015 I warned that America’s finances were also deteriorating, which posed a risk to the dollar’s dominance: “The US government is insolvent. Its major institutions and pension funds are insolvent. The central bank is borderline insolvent.”
That assertion is even more true today. In fact I would remove the qualifier “borderline” when describing the central bank; the Federal Reserve is, according to its own calculations, totally insolvent.
And the rest of the world is really starting to take notice. The French in particular have been complaining for years about the US dollar, and just recently the French President has been urging Europeans to seek financial independence from the United States.
Leaders from countries including Saudi Arabia, the UAE, Malaysia, Brazil, and India have all recently expressed openness, or even desire, to move beyond the US dollar in international trade.
Saudi Arabia is flirting with the idea of selling oil in Chinese yuan, and just a few weeks ago the first Liquified Natural Gas (LNG) contract in Chinese yuan was transacted.
These are just anecdotes, of course. But there’s a lot of hard data showing that the dollar’s reserve status is waning.
According to the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the U.S. dollar is currently used to settle about 40% of international trade.
That’s still a lot. But even as recently as 2014, SWIFT reported the dollar was used for 52% of global trade.
Dollar reserves held by foreign governments are also declining.
According to the International Monetary Fund, the US dollar now accounts for 58.4% of foreign reserves held by central banks around the world, compared to roughly 70% in the late 90s.
Foreign central banks also seem to dump their US dollars in exchange for a more traditional store of value; that’s why central banks around the world bought more gold in 2022 than they have since 1950.
This is all hard data showing that the world’s discontent with the US dollar has finally translated into action. And it suggests that the US dollar’s loss of global reserve status is only a question of when, not if.
Again, this is a huge deal for America.
The only reason the US government has been able to get away with a $31.5 trillion national debt, multi-trillion dollar deficits “that cost nothing”, and all the other insane government dysfunction, is because the dollar is the world’s reserve currency.
What do you think would happen if the government of Bulgaria ran a massive deficit every single year... or if the President of South Korea shook hands with thin air?
Their currencies would probably plummet and their bond markets collapse.
Just last year, in fact, we saw the British pound go into freefall, the bond market plummet, and the Prime Minister forced to resign, simply because investors did not like her economic plan.
But the US government has been able to do whatever it wants... for decades... simply because they have the reserve currency.
You’d think that the federal government would do everything in its power to protect such an extraordinary privilege.
But instead they seem to be going out of their way to destroy it. It’s pure insanity.
Even now, with the country weeks away from defaulting on the national debt, the President of the United States still refuses to negotiate a single penny in spending cuts in order to raise the debt ceiling.
Foreigners are watching this mess... and they’re not impressed. And this is yet another reason why they’re moving so quickly to reduce their dependency on the dollar.
Frankly this might be a good thing. The US government is like a spoiled, hard partying rich kid who has squandered the fortune that his great grandfather worked so hard to build.
Maybe the kid needs to go broke and have his fancy cars repossessed in order to (hopefully) relearn the value of money, responsibility, and conservative financial management.
It’s important to remember, in fact, that the United States became the most powerful economy in the world BEFORE the dollar became the global reserve currency. Same with the UK and British pound before.
So it’s possible that losing some of the dollar’s reserve status might just be the spark that the US government needs to get its act together. Only time will tell.
To your freedom, Simon Black, Founder Sovereign Man
https://www.sovereignman.com/trends/hard-data-that-confidence-in-the-dollar-is-cracking-147023/
The Best Way To Invest An Inheritance and Protect Your Newfound Wealth
The Best Way To Invest An Inheritance and Protect Your Newfound Wealth
Charlotte Gifford Tue, April 25, 2023 The Telegraph
Receiving a lump sum inheritance can be life-changing. But when it comes to deciding what you should do with a sudden windfall it is easy to feel overwhelmed by the range of options at your fingertips.
Undoubtedly one of the worst things you could do – besides spending it all at once in a mad frenzy – is put the money in your current account. This will leave your inheritance at the mercy of inflation. If inflation is on average 2 per cent, then in terms of purchasing power a £100,000 lump sum would be worth just £50,000 in 25 years.
The Best Way To Invest An Inheritance and Protect Your Newfound Wealth
Charlotte Gifford Tue, April 25, 2023 The Telegraph
Receiving a lump sum inheritance can be life-changing. But when it comes to deciding what you should do with a sudden windfall it is easy to feel overwhelmed by the range of options at your fingertips.
Undoubtedly one of the worst things you could do – besides spending it all at once in a mad frenzy – is put the money in your current account. This will leave your inheritance at the mercy of inflation. If inflation is on average 2 per cent, then in terms of purchasing power a £100,000 lump sum would be worth just £50,000 in 25 years.
Taking a proactive approach to growing your inheritance is crucial. Here, Telegraph Money tells you what you need to know about investing to get the most out of your newfound wealth.
First Things First
Make sure you have a rainy day fund
This should be a sum of money to cover an unexpected expense. It is generally advised that you keep enough for three to six months’ expenditure.
However, this isn’t an excuse to leave thousands of pounds languishing in your current account. Put the money in a savings account paying a competitive rate.
Pay Off Your Debts
This includes overdrafts, credit cards and loans. The high interest rate on these debts will probably eat your wealth faster than the rate of your investment return will grow it.
Does this mean you should also pay off your mortgage or, if you have it, your student debt? That depends.
Emma Watson of the wealth manager Rathbones said clearing student debt can be a sensible thing to do, especially if your loan has a relatively high interest rate (like those taken out since 2012). Workers on "Plan 2" loans will be charged a maximum interest rate of 6.9 per cent. The debt is repaid at a rate of 9 per cent on everything over the earnings threshold of £27,295.
However, because the monthly repayments are based on your earnings, the cost is probably only worth it for very high earners. Bear in mind the debt is wiped after 30 years regardless.
With mortgage rates going up, Ms Watson said the argument for paying off your mortgage first is stronger than it has been in the past.
“However, the principle of look before you leap applies as, if your mortgage is on a fixed term, there may be penalties applying to free yourself from it,” she said.
Protect Yourself
Promises of sky-high returns are telltale signs of an investment scam. Only put your money with a provider regulated by the Financial Conduct Authority.
Be wary of saving more than £85,000 with one institution – only sums up to this limit are protected under the Financial Services Compensation Scheme, in the unlikely event the company goes bust.
Should I invest it all in one go or in smaller increments?
Another thing to consider is whether you should invest the sum all at once, or in dribs and drabs.
You may have heard that drip-feeding the cash into investments will help to avoid the impact of market peaks and troughs.
To continue reading, please go to the original article here:
https://www.yahoo.com/news/best-way-invest-inheritance-most-050000112.html
How to Ease Your Kids Into Estate Planning
How to Ease Your Kids Into Estate Planning
Elizabeth Ayoola Mon, April 24, 2023 NerdWallet
When parents talk with their kids at the dinner table, estate planning probably doesn’t come up. But considering we aren’t immortal, it should.
It’s worth having age-appropriate conversations to introduce children to the idea of estate planning. As children grow older, parents can provide more specifics about their plans and eventually assist their children in developing their own plans as adults.
How to Ease Your Kids Into Estate Planning
Elizabeth Ayoola Mon, April 24, 2023 NerdWallet
When parents talk with their kids at the dinner table, estate planning probably doesn’t come up. But considering we aren’t immortal, it should.
It’s worth having age-appropriate conversations to introduce children to the idea of estate planning. As children grow older, parents can provide more specifics about their plans and eventually assist their children in developing their own plans as adults.
Stay ahead of the market
Run them through your estate plan
If you have an estate plan in place, consider running your children through it so they have an idea of what’s included in one. Camelia Ruffin, an estate planning attorney and founder of The Ruffin Firm in Douglasville, Georgia, suggests parents do a very basic outline, which includes telling children what each document is and what it’s used for.
Talking through your estate plan also gives your children a chance to know important information such as who you’ve chosen as estate executive or administrator — the person who manages your estate after you die — and who has power of attorney for financial and health care decisions. If your children will be executors, that’s more reason to talk them through the plan.
Parents with underage kids may want to share information about who will take care of them if something happens prematurely. Ruffin says children should know whom to turn to and what the next steps are so they’re prepared.
“Parents either get really sick or die and they still have teenagers who don't know if it's going to be a grandparent, uncle, godparent or a family friend that's going to help guide them.”
She adds, “It's very important for parents to talk to kids about money management budgets, what is set aside for them, and how to make sure money lasts them as long as possible and not to run through it.”
Adult children should know where important estate documents are such as the original will, trust, power of attorney, health care directive, and list of accounts and login information.
Estate planning isn’t just financial, it can also be an emotional affair. Coming to terms with mortality as a child or parent can be challenging, but remember it’s a way to care for yourself and your loved ones, says Nataki Appolon, an estate planning and business attorney at Warren & Warren Appolon in Huntington, New York.
“Estate-planning is self-care. You don't have all that anxiety around ‘God forbid something happens.’ ”
Explain the importance of an estate plan of their own
To continue reading, please go to the original article here:
https://www.yahoo.com/finance/news/ease-kids-estate-planning-200015659.html
We’re Done With “Gradually”. We’ve Now Reached The “Suddenly” Part
We’re Done With “Gradually”. We’ve Now Reached The “Suddenly” Part
April 24, 2023 By Simon Black – Sovereign Man.com
By the summer of 1563, all of Britain had plunged into chaos over religion and the Reformation. King Henry VIII broke away from the Catholic church back in the 1530s, sparking a near civil war within the kingdom. Protestants killed Catholics, Catholics killed protestants, and extreme social tensions lasted for decades.
Universities were at the heart of this conflict; rather than focus on real subjects like science and mathematics, students and professors became radical social activists and turned their schools into ideological echo chambers. Sound familiar?
We’re Done With “Gradually”. We’ve Now Reached The “Suddenly” Part
April 24, 2023 By Simon Black – Sovereign Man.com
By the summer of 1563, all of Britain had plunged into chaos over religion and the Reformation. King Henry VIII broke away from the Catholic church back in the 1530s, sparking a near civil war within the kingdom. Protestants killed Catholics, Catholics killed protestants, and extreme social tensions lasted for decades.
Universities were at the heart of this conflict; rather than focus on real subjects like science and mathematics, students and professors became radical social activists and turned their schools into ideological echo chambers. Sound familiar?
One of the few students who actually wanted to learn was a Scottish teenager named John Napier; Napier had been enrolled at the University of St. Andrews at the time, but he quickly realized that he would never learn a damn thing in that environment. So he dropped out… and started traveling in search of a real education.
No one quite knows exactly where he went or what he did. But when he returned to Scotland eight years later as a young man, Napier had become an intellectual giant.
You might not have ever heard of him, but John Napier was truly one of the great minds of his era. And modern science owes a tremendous debt to his work… in particular his development of logarithms.
If it’s been a few years since you studied math (or ‘maths’ for my British friends), logarithms are the inverse of exponential functions.
Simple example: we know that 102 (or 10 squared) = 10 x 10 = 100. So, the number 10 raised to the power of 2 equals 100.
The inverse of that is to say that the ‘base 10’ logarithm of 100 = 2. Or in mathematical terms, 100 log10 = 2
Napier devised an entire system of logarithms. And this was actually a tremendous leap forward in mathematics, because logarithms made it so much easier for scientists and researchers to calculate solutions to complex problems.
One of the many important applications to come out of Napier’s work is the concept of ‘logarithmic decay,’ which models many real world phenomena.
The idea behind logarithmic decay is that something declines very, very slowly at first.
But, over a long period of time, the rate of decline becomes faster… and faster… and faster.
If you look at it on a graph, logarithmic decay basically looks like a horizontal line that almost imperceptibly arcs gently downwards. But eventually the arc downward becomes steeper and steeper until it’s practically a vertical line down.
Logarithmic decay is like how Hemingway famously described going bankrupt in The Sun Also Rises-- “Gradually, then suddenly.”
In fact logarithmic decay is a great way to describe social and financial decline. Even the rise and fall of superpowers are often logarithmic in scale. The Kingdom of France in the 1700s infamously fell gradually… then suddenly.
We can see the same logarithmic decay in the West today, and specifically the United States.
The deterioration of government finances has been gradual, then sudden. Social conflict, censorship, and the decline in basic civility has been gradual, then sudden. Even the loss of confidence in the US dollar has been gradual… and is poised to be sudden.
Back in 2009 when I started Sovereign Man, I spoke a lot about ideas that were highly controversial at the time.
I suggested that Social Security’s trust funds would run out of money. That the US government would eventually be buried by its gargantuan national debt. That the US dollar would eventually lose its international reserve dominance. That inflation and social conflict would rise.
The main thesis, quite simply, was that the US was in decline. And whenever I spoke at events, I used to talk about logarithmic decay, saying:
“As a civilization in decline, you never really know quite where you are on the curve. You could be way over here on the horizontal line, at the very beginning of the decline… or you could be standing on the precipice about to hit the vertical slide down.”
Well, now we have a much better idea of where we are on that logarithmic decay curve. Because these ideas about the national debt, inflation, social security, social conflict, etc. are no longer theories. Nor are they even remotely controversial.
Just last week, US Speaker of the House Kevin McCarthy said in a speech that “America’s debt is a ticking time bomb”. Social Security’s looming insolvency is now openly discussed in Washington and regularly reported in the Wall Street Journal.
We’ve all seen with our own eyes (and even experienced) inflation, social divisions, and censorship.
And as for the dollar, we continue to see a multitude of cracks in its dominance. Most notably, Saudi Arabia is considering a plan to sell oil not just in US dollars, but also in Chinese yuan.
Plus the international development bank of the BRICS nations (Brazil, Russia, India, China, and South Africa) announced earlier this month that they will start moving away from the dollar.
Is it any surprise? The US government is weeks away from defaulting on its national debt over the latest debt ceiling debacle. And yet the guy who shakes hands with thin air refuses to negotiate a single penny in spending cuts to help reduce trillions of dollars in future deficit spending.
The whole world is watching in utter disbelief at the astonishing level of incompetence that has infected the highest levels of America’s once hallowed institutions, including news media, big business, and the government itself.
America-- and the West by extension-- really are on the precipice of that logarithmic decay curve… the part where the horizontal line becomes a vertical line down.
It has taken years… even decades to reach this point, gradually. We’re now at the “suddenly” part.
Now, it’s important to note that the outcome is far from inevitable. Plenty of declining superpowers in the past have pulled themselves out of a tailspin, at least temporarily.
Aurelian’s reforms helped re-establish Rome’s dominance in the late 200s after nearly a century of chaos. The declining Ottoman Empire recovered substantially during the Tanzimat period in the 1800s. King Charles III of Spain made many successful reforms to revive his crumbling empire in the 1700s.
There are many historical precedents for recovery, so all is not lost. But at the moment there is little evidence to suggest any major change on the horizon.
I’m not saying this to be alarmist. Quite the contrary, in fact. Because one of the key pillars of our thinking here at Sovereign Man is that, despite the ineptitude of our governments, we as individuals have the tools, power, and freedom to solve these problems for ourselves… and even prosper doing so.
Simple example: Social Security’s trust funds will run out of money within a decade, and this will be a huge problem for literally tens of millions of people who depend on the progam.
However there are numerous tools available to solve this problem; a more robust and powerful retirement structure like a self-directed, solo 401(k) plan, for example, allows you to set aside up to $73,500 per year for your retirement.
Similarly, if you expect a government with deteriorating finances to raise taxes (which they almost always do), you can take completely legal steps to reduce what you owe.
If you anticipate inflation continuing, you can arrange your investments to capitalize on the surge in real assets, like minerals, energy, and productive technology.
You can also take steps to diversify geographically, even internationally, to reduce risks to your family’s freedom.
These solutions barely scratch the surface of the plentiful options at your disposal. All it takes is a sensible understanding of the problem… plus the willingness to take action.
And rational, informed action is always a better option than despair.
To your freedom, Simon Black, Founder Sovereign Man