These past few weeks have seen extreme stock market volatility, the WHO declaring a pandemic, and the U.S. implementing travel restrictions and many other measures (with more to come, assuredly) to help combat the spread of the COVID-19 coronavirus.
Our thoughts on the current stock market malaise -- and accompanying Coronavirus fears.
There is no shortage of discount cell service providers these days. It's to the point where The Paradox of Choice and inertia set in, leading most folks to simply stick with the same cell provider they have always used. My wife and I switched from Verizon to Consumer Cellular in October 2017. The main only reason we switched was to save money. The tl:dr version of this post is that we really like Consumer Cellular.
I won’t tell you that skipping lattes will make you a millionaire (because I don’t believe that). I’m not going to spend-shame anyone in this post. But I will forever maintain that frugality is a darn-near surefire way of building wealth. If you spend meaningfully less money than you make (that is, saving 15% or more of your income), it necessarily follows that you will build wealth. That’s not an opinion; it’s math. If you can only save 10%, then start there. But ultimately, work up toward a 20% savings rate…and then move higher from there. We have multiple clients saving more than 50% of their after-tax income.
Statements you will hear outside TWG’s walls, but not inside them: “Money is really cheap right now.” “I get a tax deduction on this, so it’s a good deal.” “The dealership is providing interest-free financing on the new model, so I’ll buy new.” “We refinanced and are saving $300/month on our payments.”
My wife Krista told me a great story from her trip to Costco yesterday with our two sons, Ford (age 3 ½ ) and Teddy (age 2). Krista bought yogurt for each of the boys. Our younger son Teddy quickly finished his yogurt and immediately began to cry for more. Ford responded by feeding his own yogurt to Teddy, spoonful by spoonful. He did that without any prompting from Mom.
Amidst the politically-charged climate in which we live, we can lose sight of the progress mankind has made over time. We often remind our clients the U.S. stock market has handsomely paid patient, long-term investors over time. One simple method for gauging economic progress over time is to consider the evolution of the largest publicly-traded companies in the US. Of the ten largest companies in the US today, only four were founded prior to 1970 (JPMorgan Chase; Johnson & Johnson; Procter & Gamble; and Visa).
The bull market lives on. This bull market had near deaths in 2011 and 2018 – each time narrowly escaping the 20% decline threshold that defines a bear market (and thus ends the bull market).
At the end of August, I (Dan) competed and finished runner-up in the Hazeltine National Club Championship. You are probably asking: what does this have to do with being posted on The Wealth Group’s blog about personal finance? Don’t worry; I will get there.
Are only the high-income earners making progress in America? Or are middle-income and lower-income groups also advancing?
My wife Krista and I have been blessed with three children. In case you have lost count, Austin and his wife Jennifer have been blessed with eight children (and counting?).
When I first drafted this post (on 8/7/19), the S&P 500 Index was 5.75% off its recent high. As I prepare to post this to our website (two days later, on 8/9/19), the U.S. market has rallied a bit, so that we are less than 4% off the all-time high for the S&P 500 Index.