National Financial Literacy Month

National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits.

Americans carry more than $2.4 trillion in consumer debt, which works out to be nearly $7,800 in debt for every man, woman and child that lives in the United States (Source: Federal Reserve).

Being “financially literate” means you have the knowledge, skills and habits to successfully manage your money. Such skills include using a budget or plan for monthly spending; regularly saving some of today’s money for tomorrow’s needs; managing your use of credit to avoid over-extending yourself; and investing funds to allow your money to grow.

We have a mission to educate 1M families by the year 2020, We are an avid fighter for our freedom but we really don't have freedom until we have financial freedom, Let us start now.

Come to our free workshop this Saturday (04/08/2017) at 10429 S 51st St Suite 215 Phoenix AZ from 10:00 am - 12:00 noon. Please RSVP by clicking on this link:https://goo.gl/forms/z4Fb39BoPqOjcHL32

Brexit Impact on US Economy

What is Brexit?  It is an abbreviation for "British Exit", which refers to the June 23, 2016 referendum by British voters to exit the European Union. Britain has already opted out of the EU's monetary union which means that they would be using pounds instead of Euro.

Per Stephen Pounds article published in Foxbusiness.com, June 29, 2016, he said that Chuck Fulkerson, director of education at Online Trading Academy, stated that it will have a short term impact on US economy. But Alan MacEachin, Navy Federal Credit Union economist stated otherwise.

"There could be a massive capital flight to safety, which implies a significant inflow of funds into the US Treasury securities which could drive interest rates lower in the US and also boost the value of the dollar", MacEachin says.

Patrick Gillespie of CNNMoney, June 24, 2016 stated that the chief of the US central bank and top monetary policy setting official, Janet Yellen, forewarned earlier this week that Brexit "wold negatively affect financial conditions and the US economy.

Volatile markets can slow down the US economy.  American consumers make up majority of the US economic activities.  If they don't spend, the economy will not grow.  Their spending usually depends on where the economy of their country is going.

It can also triggers a strong dollar.  A strong dollar will be good for American traveler since it will be a cheaper vacation for them but bad for businesses that sell products overseas. It makes their products more expensive overseas and less attractive to consumers.

In December, Federal Reserves projected that it will raise rates four times this year which will be a strong sign that the US economy has recovered from the recession.  But by June, several of their committee members were calling only one rate hike because of weak growth and slowing job gains.  As rates fall, it will be easier and cheaper for homebuyer to finance their home purchase. Steve Rick, chief economist for CUNA Mutual group said, " This would create yet another mini refinance mortgage boom at financial institutions as homeowners rush to lock in near historic low interest rates." This will be good for real estate industry.

Rent VS Buy

A nationwide buy versus rent index is moving deeper into the “buy” territory, indicating that housing markets across the country are strong. This study by Florida Atlantic University and Florida International University also shows that home prices rose 5.4 percent in the first quarter.

“This appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds,” says Ken Johnson, a real estate economist and one of the index’s authors.

The index looked at the relationship between buying a property and building wealth through a buildup of equity versus renting a comparable property and investing in a portfolio of stocks and bonds, and concluded that “In terms of wealth creation, the U.S. housing market, when considered as a whole, has swung marginally more in favor of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds."

The index also revealed that 16 of the 23 metro markets examined moved in the “buy” territory direction.

The metro areas remaining solidly in the “buy” territory include Boston, Chicago, Cincinnati, Cleveland, Detroit, Milwaukee, Minneapolis, New York, Philadelphia, and St. Louis.

“These cities should have room for price growth without much worry of overheating,” says Eli Beracha, co-author of the index and assistant professor in the T&S Hollo School of Real Estate at FIU. “This is especially true for Chicago, Cincinnati, Cleveland and Detroit.”

 On the other hand, index authors say cities like Honolulu, Kansas City, Los Angeles, Miami, Pittsburgh, Portland, San Diego, San Francisco, and Seattle are near an “indifference point” between buying versus renting. In nearly all of these metro markets, the index score for the quarter moved in the direction of ownership.

“This movement suggests that most consumers in these markets appear to have learned from the real estate crash and now understand that residential property prices can get too high,” Beracha says. “This is a good sign for future housing price stability in these markets.”

 Houston, meanwhile, is deep in the “rent” territory. Also, two other housing markets – Dallas and Denver – moved deeper into the “rent” territory, but at a slower rate than previous quarters, the authors note.

“Strong economic support within these two markets should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property,” Johnson says.

Source: Florida Atlantic University

Indexed Universal Life Insurance Policy and Retirement

An indexed universal life insurance policy is a permanent insurance that offers great flexibility for premiums and adjustments for face amount. The indexed accounts are credited with interest based on the growth in one or more indexes and there is a guaranteed growth rate within the policy. Life insurance is designed to protect your loved ones if there is a premature death in your family.

What I like best about an indexed universal life insurance policy is the fact that the cash value within the policy can be utilized as a way to generate tax free income for retirement. In other words, this type of policy serves two purposes.

** The face amount provides protection for your family in the case of a premature death.
** The cash value growth over the years can generate tax-free income during retirement.

Source: Excerpt from Investopedia

President's Day

Presidents’ Day is an American holiday celebrated on the third Monday in February. Originally established in 1885 in recognition of President George Washington, it is still officially called “Washington’s Birthday” by the federal government. Traditionally celebrated on February 22—Washington’s actual day of birth—the holiday became popularly known as Presidents’ Day after it was moved as part of 1971’s Uniform Monday Holiday Act, an attempt to create more three-day weekends for the nation’s workers. While several states still have individual holidays honoring the birthdays of Washington, Abraham Lincoln and other figures, Presidents’ Day is now popularly viewed as a day to celebrate all U.S. presidents past and present. #PresidentsDay

Source: History.com

Thanksgiving History

In 1621, the Plymouth colonists and Wampanoag Indians shared an autumn harvest feast that is acknowledged today as one of the first Thanksgiving celebrations in the colonies. For more than two centuries, days of thanksgiving were celebrated by individual colonies and states. It wasn’t until 1863, in the midst of the Civil War, that President Abraham Lincoln proclaimed a national Thanksgiving Day to be held each November.

Source: History.com

Retirement is a LIE

Everyone is thinking of #retirement especially the baby boomers.  10,000 of then turns 65 every day.  According to the article published by Daily Worth online, 55% of Americans is in danger of not fully covering the estimated essential expenses like housing, healthcare, food in retirement as studied by Fidelity Investments.” A Wells Fargo/Gallup survey found that 46 percent of their participants were either “very” or “somewhat” worried about outliving what they were capable of saving for retirement, with concerns about whether they could rely on Social Security checks alone.

The top financial services institutions make it sound so easy: Sock away a portion of your paycheck, put it in long-term retirement plans like your workplace 401(k) or an IRA  and then just wait for the money to kick in at retirement.

But if it’s supposed to be so simple, why isn’t retirement working the way it should?

Apparently, we don’t prioritize saving, and we’re poorly educated about money management skills, according to Springleaf Financial surveys. On the whole, this country is not ready to retire — but those aren’t the only reasons why.

“The issue is not that people don't prepare properly,” says Helaine Olen, author of Pound Foolish: Exposing The Dark Side of the Personal Finance Industry and co-author of The Index Card: Why Personal Finance Doesn't Have to be Complicated, coming in 2016. 

The inability to save isn’t because we’re wasting money on kitchen remodeling or fancy coffee, but rather because the cost of living has gone up — thanks to rising health-care costs and housing costs — while our salaries have stagnated or declined. And millennials have the extra burden of staggering student debt.

Even if you do manage to save, the financial products that have been set up to protect us — like 401(k)s and related retirement plans — cannot accomplish what they are touted to provide. 401(k)s, for example, were simply not designed to be our main retirement fund, according to a Frontline interview with Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at The New School for Social Research.

Instead, the 401(k) was established “as a way for high-earning executives to put part of their salary aside on a cash-deferred basis. Even after the Reagan administration said all employees were eligible to use a 401(k) account if an employer offered it, no one thought it would supplement pensions,” explains Olen.

Even John Bogle, founder and former chief executive of The Vanguard Group, says the retirement options offered by financial institutions are fiction — what he called a “train wreck” in his appearance on Frontline.

IRAs and 401(k)s weren’t designed to be retirement plans but savings or thrift plans. And the returns are small: After adjusting for inflation and subtracting taxes and fees, “you’re down into a pretty paltry return, 1 or 2 percent,” according to Frontline, which Bogle confirms. “We don’t tell people that, you see, in this business,” Bogle adds.

The most appalling aspect of all of this is that we have no choice — we are locked into a system designed to fail. You may think you can just postpone retirement and get in a few more years with income; maybe you’re convinced you can wait until 70, as Fidelity, for example, advises. But “the great myth of retirement” is that you get to choose how and when you’ll retire, says Olen.

The truth is that people are frequently forced to leave the workforce.

According to a report by the Government Accountability Office (GAO), “[m]any people retire for reasons they did not anticipate or are out of their control”; health problems, changes in the workplace, or caring for a spouse or family member were the main reasons people hung up their briefcases.

A 2012 Health and Retirement Study noted that 43 percent of retirees who participated felt that they were forced into retirement. The 2015 Employee Benefit Research Institute’s Retirement Confidence Survey found similar results: 50 percent of retirees left the workforce earlier than they had planned. 

I might be able to help you alleviate some issues with your retirement or any financial concerns..  Email Me for more info.


Source:  DailyWorth