The Biden Administration's Proposal

Last year, the Biden administration unveiled a groundbreaking proposal designed to alleviate the burden of federal student loan debt. The plan aimed to erase over $400 billion in student loan balances, effectively wiping out the debts for 20 million individuals. For another 23 million borrowers, it would have substantially reduced the median debt from $29,400 to $13,600.

This student loan forgiveness plan was struck down by the Supreme Court earlier this summer. It’s a heartbreaking verdict for the millions of people who had already applied in hopes of having their debts forgiven. Many are outraged at the decision. But perhaps their anger is misplaced…

Looking Beyond the Immediate Debate

While the rejection of the debt forgiveness plan has sparked outrage and debate, a more pressing issue has often been overlooked—skyrocketing tuition costs at colleges and universities. This growing predicament lies at the heart of the student loan crisis, far overshadowing the immediate debate over debt cancellation.

Look at this chart comparing the increases in average college costs vs average earnings of graduates.

The Soaring Costs of Higher Education

The cost of obtaining a college degree has risen dramatically over the years, far outpacing average inflation rates. (See chart below)

This trend has left many wondering about the root causes of such an alarming increase. One of the driving forces behind this surge in tuition expenses is the excessive greed displayed by educational institutions. As tuition costs continue to rise, they become increasingly disconnected from the average salary earned by degree holders.

The Role of Government-Backed Student Loans

A pivotal factor that has allowed colleges and universities to sustain these unsustainable tuition hikes is the assurance of federal backing for student loans.

Institutions are well aware that regardless of the soaring costs, students will continue to secure loans endorsed by the US government. This assurance of funding has enabled colleges to disregard the financial strain on students, creating a vicious cycle of escalating costs and mounting debt.

Debt Forgiveness: A Short-Term Solution

The debate on student loans today is often centered around the question of whether existing debts should be forgiven.

However, an essential perspective is frequently missing: the long-term solution to the crisis lies not in merely canceling current debt, but in addressing the fundamental issue of these ridiculous and unsustainable college costs.

A Sustainable Way Forward

A sustainable solution to the student loan crisis requires a fundamental shift in the way we view education and its financing.

One potential solution is reducing government involvement in education and student loans altogether. By removing the federal backing from student loans, colleges would be compelled to reevaluate their tuition rates, making higher education more affordable and accessible to all.

Conclusion

The recent Supreme Court decision on the student loan forgiveness plan has ignited discussions across the nation, drawing attention to the mounting student loan debt crisis.

However, it is crucial to look beyond the immediate debate and recognize the true underlying issue: the unchecked increase in college tuition costs. Addressing this problem means reevaluating the government's role in student loans and refocusing on making higher education affordable for everyone.

While debt forgiveness might provide temporary relief for some, only by tackling the root causes can we pave the way for a sustainable solution that benefits current and future generations alike.

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Truth is, buying a home now feels like an unrealistic goal that’s impossible for so many.

Let me explain why this is and how it will affect you:

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Wages Aren’t Keeping Up

The first (and most important) part of this growing problem is simple. Average wages aren’t keeping up with housing price increases. And its not even close…

For decades now the increase in median home prices has vastly outpaced the increase in median household income. Look at this chart comparing the two since 1965:

After accounting for inflation, home prices have jumped 118% since 1965, while income has only increased by 15%.

Experts and lenders have always recommended purchasing a home that doesn’t exceed 2.5x your annual salary. But in today’s real estate market, the average home now cost 5.4x more than the average buyer’s salary.

Covid Made Things Worse

The low interest rate environment throughout the Covid pandemic only made this problem worse. Buyers flooded the market driving home prices higher even faster than before.

The median existing home price in February of 2023 was $379,000 (up 14.3% from 2022).

Inflation Gone Crazy In Housing

Inflation makes everything more expensive over time, but home price hikes have taken the lead by far.

Home prices have increased a whopping 1608% since 1970 while inflation is only at 644%.

Here’s another chart breaking down this same drastic difference:

Considering that most salary increases are based on the rate of inflation in our economy, it’s no wonder so many people see buying a home today as impossible for themselves.

In just 2020-2021 alone, home price increases exceeded overall inflation by 168%.

At these rates, the ‘American Dream’ of home ownership is seeming less attainable not by the decade, but by the year.

Steady Rate Hikes Aren’t Helping

Now with The Fed drastically hiking interest rates to fight inflation, it’s becoming even more expensive to buy because you’re paying significantly more interest on your mortgage.

All this is happening while average home prices are staying about the same and not coming down. With a large majority of homeowners locked into a mortgage under 5%, not as many people want to give up their lower interest rate mortgage to take on a higher one moving elsewhere.

This has caused supply in the housing market to stay relatively low which doesn’t help in driving down housing costs.

Looking Ahead

All of these statistics create a very challenging environment for those looking to purchase a home, especially first-time homebuyers. Though it’s not impossible!

There’s still opportunities out there for those who stay searching for them and prepared to take action. Every real estate market is different across the country, so you’ve got to do the research on your local area to know how to best prepare.

Conclusion: Something Needs To Change

Even though many real estate markets still offer affordability for their local population, I can’t help but wonder how long that will last.

The current difference between home price vs wage increases is very drastic and seems unsustainable.

Only time will tell how this plays out, but it’s a major problem worth monitoring in my opinion. Stay informed with this ongoing situation by subscribing below if you haven’t already!

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Let me break it all down for you:

Understanding the New Bull Market:

The S&P 500 has entered a new bull market (meaning it’s now risen +20% or more since the lows made in October of last year). This positive market sentiment has been fueled by strong economic indicators, the new exciting wave of artificial intelligence, and hopes that the Federal Reserve is looking to put a pause on their consistent interest rate hikes.

While the bullish sentiment has been overwhelming these last few weeks, many professional equity managers are still skeptical that this bullish rally is sustainable amidst other concerning economic factors.

The bears argue that we’re still headed into an earnings recession that has yet to be priced into asset valuations. I suppose only…

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Spend less money than you earn and invest the rest!

Applying this extremely simple concept to your own life is a proven way to become wealthy. But depending on your income level and monthly expenses, this strategy can take years (if not decades) to accomplish.

However, there is a way to speed up your journey to financial freedom. You must combine spending less than you make with another very important step.

Let me elaborate:

To become wealthy, you must learn how to keep increasing your income without needing to show off to the world that you’ve increased your income. You do this by maintaining your monthly spending habits as you continue making more money over time.

By mastering this approach, you can outpace the average person and set yourself on the path to financial success. When you combine spending less than you earn with consistently growing your income, you’ll quickly begin to see your net worth climb higher.

Why do so many people struggle to achieve this?

The answer lies in the temptation to associate a higher income with a higher standard of living. It's all too common for individuals to increase their earnings and immediately desire a bigger house, a nicer car, or luxurious items.

While it's essential to enjoy your hard-earned money, finding a balance and embracing moderation is crucial. The goal should be to continue raising your income while keeping your expenses around the same level as before. By doing this, you can invest more money early on and speed up your journey towards wealth.

Ways To Increase Your Income

I believe that financial freedom is attainable for anyone who adopts the right mindset and implements a solid financial plan. Let's dive deeper into some strategies to help you increase your income and maintain disciplined spending:

Focus on personal growth:

Continuously invest in expanding your knowledge, skills, and expertise. This can lead to career advancements, promotions, or even exploring entrepreneurial opportunities. Consider pursuing further education, attending industry conferences, or joining professional networks. By positioning yourself as an expert in your field, you increase your value and open doors to higher-paying opportunities.

Seek additional income streams:

While your primary job may provide a steady income, exploring side hustles or part-time jobs can supplement your earnings. Look for opportunities that align with your skills and interests. Whether it's freelancing, consulting, or creating an online business, utilizing your talents can generate extra income that can be directed towards investments.

Negotiate for higher wages:

Don't be afraid to ask for a raise at your current job or explore new opportunities that offer better pay or benefits. Research market salaries and showcase your value to your employer or other potential employers. By positioning yourself as an asset, you can increase your income significantly over time.

Invest in yourself:

Allocate resources towards personal development, whether it's attending courses, conferences, or obtaining certifications. The more you invest in yourself, the more valuable you become. Continuous learning and self-improvement can lead to new career opportunities, promotions, or the confidence to start your own business. By increasing your skill set and expertise, you enhance your earning potential.

Minimize unnecessary expenses:

Evaluate your spending habits and identify areas where you can cut back without sacrificing your quality of life. Analyze your monthly budget and look for recurring expenses that may be reduced or eliminated. Consider negotiating bills, opting for more cost-effective alternatives, or adopting a minimalist approach. By being mindful of your spending, you can redirect those savings towards investments that will further grow your wealth.

Conclusion

Becoming wealthy is possible for us all. Continue finding ways to increase your income without also increasing your monthly spending habits.

Find the perfect balance between ‘enjoying the now’ while still responsibly planning for your financial future by investing. The more money you can invest early on, the more time compound interest will have to work its magic on your net worth.

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In this week's premium edition of Mark Talks Money, we’ll dive into an extensive breakdown of the developments surrounding this deal and what we can expect to happen next for our economy and the stock market.

My goal is to provide you with all the important information you need to know in an easy-to-understand manner. I want to ensure you’re well-informed about these crucial financial matters so that you can stay ahead of the game and tailor your own financial plan accordingly.

Let’s dive in:

Breaking Down The Debt Ceiling Deal

The Recent Vote

In a significant vote on Thursday evening, the Senate approved a measure to suspend the nation's debt limit through January 1, 2025.

This action was necessary to prevent the United States from defaulting on its debt, which would have been an unprecedented occurrence as its never happened before. No one knows what the outcome would have been had a deal not been reached in time, but most agree the repercussions would have been very bad.

President Joe Biden is expected to swiftly sign the bill into law, solidifying the resolution. While this is great news for our economy today, it feels a bit like we’re ‘kicking the can down the road.’

Unless more changes are made (which now seems unlikely due to lack of urgency) we’ll have to go through all of this nonsense again in early 2025 (but more on this later).

Why was this measure necessary?

Since the debt ceiling was breached in mid-January, the Treasury Department has been unable to borrow more money to meet the government's financial obligations.

To ensure timely payment of bills, the Treasury had employed “extraordinary measures.” These measures included selling existing investments and suspending reinvestments of specific funds, such as the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund.

By taking these steps, the Treasury managed to buy additional time and free up billions of dollars, thus avoiding a potential default earlier this year. But these drastic measures were only taken out of desperation to buy more time for a longer standing deal to be made. Thankfully, a deal was finally solidified thus relieving some of the pressure on our economy and stock market.

Everything In The Deal

Here are the main elements of this newly reached deal:

• A freeze on non-defense discretionary spending in 2024 and a 1% increase in 2025.

• A 3% increase in defense spending.

• Work requirements for SNAP (food stamps) and some smaller welfare programs.

• Resumption of student debt payments (but no changes to Biden's debt relief plan).

• Reducing IRS funding.

• Clawing back unused Covid relief money.

Here's a little secret about the 1% increase in nominal spending

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Warren Buffett is one of the most successful investors of our time, and he still credits much of his success to Graham's teachings.

Now let's dive into these 10 timeless investing principles:

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1) Invest in companies, not stock tickers:

When investing, always focus on understanding the fundamentals of the companies you invest in. Don’t simply buy and sell based on market trends and sentiment. Take the time to research the company's financial health, competitive advantages, and management team. This approach helps you make informed decisions about which companies are worthy of your investment.

2) Invest for the long-term:

Investing is not about making quick gains, it's about building wealth over time. Adopt a long-term investment strategy and resist the temptation to engage in frequent trading. By holding onto quality investments for the long term, you give them a better chance to grow and compound your returns. Statistics show that the less investors touch their portfolios, the higher their average returns tend to be.

3) Margin of safety is key:

A margin of safety refers to buying an investment at a price below its fair value. This provides a cushion against potential losses and protects you from downside risks. When you invest with a margin of safety, you are being cautious and conservative, ensuring that the odds are in your favor.

4) Diversification is important:

Diversifying your portfolio means spreading your investments across different asset classes (such as stocks, bonds, and real estate) and sectors (such as technology, healthcare, and energy). By diversifying, you reduce your overall investment risk. If one sector or asset class underperforms, the others may still perform well, mitigating potential losses.

5) Don't try to time the market:

Timing the market means trying to predict the perfect moment to buy or sell investments based on short-term market trends. Trying to time the market will always be a losing game, so it’s best to just avoid playing. Instead you should focus on investing into quality companies and funds with the intent to hold long-term. By staying invested, you can benefit from the compounding growth of your investments over time.

6) Ignore market noise:

Financial media and analysts often create noise that can distract investors from their long-term investment goals. It's important you learn to filter out the noise and negative headlines. Stick to your investment strategy and remain focused on the long-term outlook for your investments.

7) Be patient:

Successful investing requires patience and discipline. Avoid making impulsive investment decisions based on hype or fear. Trust in your research and give your investments time to perform. Remember that investing is a long-term commitment, and short-term market fluctuations shouldn’t dictate your actions.

8) Emotions will cloud your judgment:

Emotions such as fear or greed can cloud your judgment as an investor. Fear may lead to panic selling during market downturns, while greed may push you to chase speculative investments without proper due diligence. Develop the ability to make rational investment decisions based on principles and objective analysis, rather than being swayed by temporary emotions.

9) Understand your circle of competence:

Invest in companies and industries that you understand well. This knowledge gives you an advantage and builds confidence in your investments. If you are unfamiliar with a particular industry or investment, take the time to research and educate yourself before making any decisions. Remember, confidence in your investments comes from knowledge and understanding. And having confidence in your investments is the only way you’ll have the emotional intelligence to hold during periods of extreme volatility.

10) Continuously learn and improve:

The world of investing is ever-evolving. The best investors are lifelong learners who continuously seek to improve their skills and knowledge. Stay open to new ideas, strategies, and market trends. Read books, follow reputable financial websites, and consider attending investment seminars or webinars to expand your understanding of the investment landscape.

Wrapping Up

Remember, becoming a better investor takes time and effort. By applying these valuable lessons from "The Intelligent Investor," you can develop a solid foundation for your investment journey.

Stay informed, remain focused on your long-term goals, and embrace the mindset of continuous learning. You’re well on your way to wealth.

More Books

I’ve read this book in full before, but I use the great summaries from Shortform to refresh my knowledge on all of my favorite books at least once a year.

Tap Here and gain access to the world’s best book guides!

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We’ll break down this week’s earnings report from NVIDIA and the recent surge in its stock , the sustainability of the AI boom, and the factors investors should consider when venturing into AI stocks. Let's dive in:

The AI Boom: Can It Save Our Economy?

It was only a few months ago that just about everyone on Wall Street was calling for an imminent recession and a nasty stock market collapse. But as stocks have climbed higher over the last few weeks, it seems as though market sentiment is shifting to a more positive outlook.

The global economy is still dealing with various challenges, including rising inflation & interest rates, geopolitical tensions, and the looming debt ceiling situation. In the midst of this uncertainty, investors are turning to the emerging tec…

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But there’s so many misconceptions about them which is why so many people don’t take advantage.

Let’s clear up the confusion about Roth IRAs:

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First, what is a Roth IRA?

A Roth IRA (short for Individual Retirement Account) is a type of investment account that offers unique tax advantages to help you invest for your future. Unlike a traditional IRA (where contributions are made with pre-tax dollars) a Roth IRA allows you to invest after-tax income.

This means you’d be choosing to pay taxes on your contributions now to avoid having to pay any taxes later on.

The Power of Tax-Free Growth

One of the best incentives of using a Roth IRA is its ability to build you wealth tax-free. As you invest in a variety of assets within your Roth IRA (such as stocks, ETFs, or mutual funds) any earnings and investment gains will grow tax-free over time.

This means you won't owe taxes at all on the growth of your investments when you withdraw the funds in retirement.

Breaking Down the Misconceptions

1) You can't touch any money in a Roth until you're 59.5 years old

While it's true that a Roth IRA is designed for long-term savings, the notion that you can’t access your funds until reaching the age of 59.5 is a common misconception.

Unlike traditional IRAs, Roth IRAs allow for penalty-free withdrawals of your original contributions (not the investment earnings) at any time, regardless of your age.

It's important to understand that your principal contributions can be accessed in case of emergencies or unforeseen circumstances. But I personally would only withdraw funds from my Roth in a desperate situation, as I prefer to keep that money working for me.

2) Roth IRAs are only for retirement

Although Roth IRAs are indeed an excellent tool for retirement planning, they offer greater flexibility than commonly believed. As mentioned above, you can withdraw your original contributions penalty-free before retirement age.

Additionally, Roth IRAs can serve multiple purposes, such as funding higher education or purchasing a first home. First time home-buyers with a Roth are actually eligible to withdraw up to $10,000 with no penalties to help finance their down payment.

These accounts are more versatile than many think and can adapt to your changing financial needs throughout life.

3) You can’t contribute to a Roth IRA if you make too much money

While it's true that there are income limits for contributing directly to a Roth IRA, there is a solution for higher-income individuals who wish to utilize the benefits of Roth IRAs.

If you file taxes single and make $139k+ or jointly and make $218k+ then you can’t directly contribute to a Roth IRA.

Enter the "Backdoor Roth IRA." This method involves contributing to a traditional IRA and then converting it to a Roth IRA. By using this strategy, individuals can still take advantage of the tax-free growth and qualified withdrawals offered by Roth IRAs, regardless of their income level.

4) Anyone with a Traditional IRA can convert it to a Roth IRA

Converting a traditional IRA to a Roth IRA can be a smart move in certain situations, but it's important to note that it may not be suitable for everyone.

There are no penalties for converting a traditional IRA to a Roth IRA, but it does trigger a taxable event. The amount converted is treated as ordinary taxable income and you'll owe taxes on the amount converted in that tax year.

The only outlier to this option is that inherited IRAs cannot be converted.

It's crucial to carefully evaluate your own financial situation, tax implications, and long-term goals before deciding to convert your traditional IRA to a Roth.

5) A Roth IRA is an investment

No. A Roth IRA is just a type of investing account. Not an actual investment.

You still have to pick your investments separately inside of the account for your money to actually grow. (You can choose to invest in stocks, index funds, ETFs, etc.)

Further Knowledge

As of right now, you can contribute up to $6,500 per year (up from $6,000 in 2022) to a Roth IRA.

Those age 50 or older are eligible for what’s called ‘catch-up contributions’. They’re able to invest up to $7,500 per year (up from $6,500 in 2022).

But there’s a reason they put a cap on the amount you can contribute. The tax-free wealth building potential of Roth IRAs are so powerful that a limit had to be made.

Conclusion

When you invest through a Roth IRA, you’re letting your investments compound (likely for decades) into a huge portfolio meant to help pay you throughout retirement. But the true power of a Roth? All of the gains seen in your investments will be accessible to you TAX FREE!

That’s what makes this account my personal favorite to invest in. Not paying any taxes on future income sounds like a great deal to me!

Hopefully this thread clears up some of the confusion and mystery surrounding these amazing wealth building tools. I hope you now feel more confident in your understanding of Roth IRAs and how to take advantage of them for yourself.

Thanks for reading and be sure to subscribe if you haven’t already!

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Jerome Powell's speech on inflation and the ongoing debt ceiling talks in Congress are the key highlights. Staying informed about these stories is vital as they heavily influence market sentiment. The fate of the current bull market rally hinges on the unfolding of these events.

We'll also provide another in-depth analysis of some major stock charts and highlight important price levels to watch. These insights will keep you updated on market trends and enable you to anticipate future market developments and manage your portfolio effectively.

Here's what you need to know:

Summary of Jerome Powell’s Speech

Jerome Powell (head of the Federal Reserve) addressed the concerning issue of high inflation on Friday and outlined the steps being taken by the Fed to address it.

Inflation (the rising cost of goods & services) has been a growing concern for …

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Following these 7 simple steps will help you become that person for your family:

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1) Avoid High-Interest Consumer Debt

It’s important to understand that I didn’t say to avoid all debt. I’m specifically referring to high-interest debt via credit cards or personal loans.

This is because not all debt is bad. Utilizing low-interest debt to buy assets such as real estate can actually be used to your advantage. Many people leverage debt to buy rental properties that not only increase in value over time, but also provide an additional passive income stream (more on this later).

The debt that you need to avoid at all costs is high-interest consumer debt. Many people use their credit cards to buy things they don’t need with money they don’t have. But that outstanding debt balance quickly becomes a huge weight on their personal finances.

Suddenly they can only afford the minimum payments on their debt every month which means most of their monthly bill is going straight towards interest instead of the principle debt. This can lead to a never-ending cycle of debt payments that seem to never go away.

The best thing you can do is to avoid this issue entirely by only spending money you currently have and always paying off your credit card balance in full at the end of every billing cycle.

2) Build An Emergency Fund

Having an emergency fund to cover any unexpected bills that may arise is absolutely essential to your financial well-being. This is what will save you from being forced to take on high-interest debt to cover those same unforeseen expenses. An emergency fund is your financial safety net.

How much money should be in your emergency fund?

I recommend saving 4-6 months expenses to be safe. To find out how much you need, look at your monthly budget and add together all of your costs (rent/mortgage, food, entertainment, car payment/insurance, etc.) Then multiply that number by however many months you wish to save for. I personally choose to keep 6 months expenses in my own emergency fund.

Where to keep your emergency fund:

Your emergency fund is not meant to be invested. You don’t want to subject your emergency savings to the volatility that naturally comes with investing.

You can choose to keep your emergency fund in a normal checking or savings account if it makes you more comfortable, but it will constantly be losing its purchasing power there due to inflation. Banks offer extremely low interest rates on normal checking or savings accounts (as low as 0.05%-0.10%). This means your savings will earn next to nothing over time as inflation eats away at its value every year.

I recommend keeping your emergency fund in a high yield savings account (HYSA) of some kind. There’s many great options out there that you can find and compare with a simple Google search.

The biggest things to keep in mind when researching which one to use are:

• making sure its FDIC insured

• comparing the APY (higher APY means more money for you)

• checking for hidden fees

Lastly, be aware that many HYSA options are online and don’t have ATMs for you to easily withdraw funds from whenever. So to get the money, you must transfer it to your regular checking account (which can take 2-3 business days depending on your provider).

3) Evaluate Your Spending Habits

Most people will live their entire lives with a consumer mindset. They believe that all the money they make is meant to be spent.

First they pay all the bills because that’s mandatory. But then the money left over is looked at as ‘treat yourself’ money. They’ll spend it all on unnecessary materialistic items because it makes them feel good.

You must learn to think differently!

You shouldn’t look at money left over after paying your bills as money to be spent, but rather as money that can be used wisely.

Any time you go to buy something that you don’t absolutely need you should think to yourself: ‘Do I NEED this, or do I WANT it?’

Just because you don’t need it doesn’t mean that you shouldn’t buy it. But learning to have that internal conversation with yourself before every major purchase is how you can become intentional with your money and spending.

Effectively budgeting is much easier with this mindset.

4) Increase Your Income

You can only save so much money by cutting down your spending and sticking to a monthly budget. But the amount that you can increase your income by is limitless.

It took way longer than it should have for me to realize this truth. Since I finally did, increasing my income has become a top priority.

If you’re effectively getting by on whatever amount you’re making now, just imagine how much better you could be doing if you made more money.

So start a side hustle, ask for that raise at work, or get a higher paying job in general. Just find ways to make more money!

5) Invest Your Money

Inflation is higher than ever and we’re all feeling the effects as pretty much everything has gotten more expensive. This means that your uninvested cash is losing more of its purchasing power every year.

Investing into quality assets such as stocks, index funds, and real estate is the only way to ensure that your money is protected from the negative effects of inflation.

You must learn how to invest so that you can put your money to work for you. If you don’t, you’ll forever be stuck working for money.

6) Automate Everything

Automating as much of your finances as possible is a great way to stay consistent with healthy money habits.

Automate your bills to be paid on time with a card or automatic withdrawal to avoid late fees.

Automate your credit card bills to be paid off in full at the end of every billing cycle to avoid owing extra money in interest payments.

Automate your investments to be made every month without you needing to do it (example: a 401k contribution through your employer).

Automation is a wealth hack because removing the need to remember to do things yourself improves your ability to stay consistent with doing them.

7) Find A Healthy Balance

Lastly, its so important to find a balance between spending money on things that help you enjoy the present day while still planning for your financial future by investing.

You do only live once, but your retirement is a big part of that ‘one life’.

You can spend money on nice things and experiences now while still budgeting to invest for your future. Don’t ever think that planning for retirement means you can’t still treat yourself today. Find the balance that’s right for you.

Conclusion

Creating generational wealth starts with changing your mindset around money and spending while also learning to implement healthy financial habits that you can stay consistent with!

These 7 tips are a great place to start when it comes to getting your personal finances in order. I hope you can find ways to implement these lessons into your own life and that they help you start down the path to building generational wealth for you and your family.

Thanks for reading and be sure to subscribe if you haven’t already!

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This week, we’ll dive into the latest developments in the ongoing market recovery as well as some important headlines such as the US debt ceiling. We’ll also look at the charts of the S&P 500 & Nasdaq indexes to identify key levels to keep an eye on. Let’s dive in.

US Debt Limit Approaching

Perhaps the biggest financial news this week is the approaching deadline to do something about the US debt limit.

The United States government has hit its debt limit of $31.4 trillion. This means that the government can no longer borrow money to pay its bills. The Treasury Department has been using "extraordinary measures" to keep the government running, but these measures are expected to run out by June 1.

If the debt limit is not raised or suspended, the government will be forced to default on its debt (which has NEVER HAPP…

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This week, we’ll dive into the latest developments in the ongoing market recovery as well as some key earnings reports such as Apple. I’ll also break down the charts of the S&P 500 and Nasdaq to identify key levels to watch closely as this market rally continues. Let’s dive in.

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• A traditional 401(k)

• A Roth 401(k)

Let me explain each and how to find out which is the best option for you:

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What Is A 401(k)?

A 401(k) plan is one of the most popular options when it comes to saving for retirement. These plans allow you to automatically contribute a portion of your paycheck into an investment account that grows over time. Many employers offer a 401(k) as a benefit to their employees, and it can be a great way to automate your retirement savings.

But there’re actually two different types of 401(k) plans to choose from. Let me explain the differences between a traditional 401(k) and a Roth 401(k) to help you decide which option is best for your unique financial situation.

Traditional 401(k)

Let's start with the traditional 401(k). This plan allows you to make pre-tax contributions to your retirement account, which means the money you contribute is deducted from your taxable income.

For example, if you earn $50,000 per year and contribute $5,000 to your traditional 401(k), you'll only pay taxes on $45,000 of income. That can be a significant tax savings, especially if you're in a higher tax bracket.

The downside to a traditional 401(k) is that you will have to pay taxes on your contributions and any investment earnings when you withdraw the money in retirement. This is known as "tax-deferred" growth, meaning you're deferring taxes until a later date.

If you're in a lower tax bracket in retirement than you are now, you may end up paying less in taxes overall. However, if you're in a higher tax bracket in retirement, you could end up paying more in taxes than you would have if you had chosen a Roth 401(k).

Roth 401(k)

Now let's talk about the Roth 401(k). This plan allows you to make after-tax contributions, which means you pay taxes on your contributions now, but your withdrawals in retirement are tax-free.

For example, if you earn $50,000 per year and contribute $5,000 to your Roth 401(k), you'll pay taxes on the full $50,000 of income. But you won't have to pay taxes on your contributions or any investment earnings when you withdraw the money in retirement.

The benefit of a Roth 401(k) is that you're essentially locking in your tax rate now. If you think you'll be in a higher tax bracket in retirement, a Roth 401(k) could be a smart choice because you'll avoid paying taxes on your withdrawals when you're in a higher tax bracket. Additionally, because you've already paid taxes on your contributions, you won't have to worry about tax bills eating into your retirement savings.

An Important Factor To Consider (Matching Contributions)

One important thing to keep in mind is that some employers offer matching contributions to their employees' 401(k) plans. For example, your employer may match 50% of your contributions up to a certain percentage of your salary. This can be a great incentive to participate in your 401(k) plan, but it's important to understand how the matching works with each type of plan.

Employer contributions typically go into a traditional 401(k) account, so if you opt for a Roth 401(k), you won't receive the same tax benefits on those matching funds.

However, if your employer offers a Roth 401(k) and matches contributions to that account as well, you'll receive tax-free matching contributions.

Which Is The Best Option For You?

So, how do you decide which type of 401(k) is right for you? It really depends on your individual financial situation and goals. Here are some factors to consider:

• Your current tax bracket: If you're in a high tax bracket now and expect to be in a lower bracket in retirement, a traditional 401(k) could be a good choice because you'll save money on taxes now.

• Your expected tax bracket in retirement: If you expect to be in a higher tax bracket in retirement than you are.

What I Personally Use

I choose to utilize the Roth 401(k) option myself. I like the idea of paying taxes only on my invested income now vs paying much more in taxes on the contributions AND capital gains later.

I also love my Roth 401(k) because it’s the only way I can invest more money with great Roth tax incentives. The contribution limit for a Roth IRA is only $6,500 a year ($7,500 if age 50 or older), but utilizing a Roth 401(k) gives me an additional $22,500 to invest per year with the same tax benefits.

Also, my employer adds their matching contributions to my Roth 401(k) plan which means even more money growing tax-free. On top of that, I’m in a lower tax bracket now than I expect to be in when retiring. So for me personally, using the Roth 401(k) option makes the most sense.

Conclusion

Both 401(k) plans are decent options for the average person. They both offer the ability to passively invest for your future without needing to do much with your portfolio.

Choosing which option is best for you really comes down to your own unique financial situation. I personally love the Roth option for the reasons listed above as well as having a set tax rate that I can plan for.

Using a traditional 401(k) is fine too, but you have to assume your future tax rate (which is always subject to change) and that can potentially make it harder to plan for retirement.

Either plan will help you to prepare for retirement by setting up reoccurring investment contributions which is always a step in the right direction.

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Buffett On The Banks

As a long time investor in multiple bank stocks throughout the years, legendary investor Warren Buffett knows a thing or two about how these businesses operate and make money.

But the banking sector has been under a lot of scrutiny lately as multiple large financial institutions have completely failed due to corporate mismanagement that ultimately resulted in runs on the banks.

These unprecedented events have forced all investors to take another look at the banking sector as a whole and Buffett is no different. Here’s what he had to say about the current state of the banking system:

More Bank Failures to Come?

Buffett said that he believes more bank failures are likely to occur. But he also made it very clear that depositors have nothing to worry about.

“Banks go bust. But depositors aren’t going to be hurt.”

He explained that the current economic environment is uncovering the dumb moves made by bankers attempting to increase their earnings.

“They haven’t made the same sort of mistakes as they did in 2008-2009, but they have mismatched assets and liabilities in a major way.”

For example, they took customer deposits that could be withdrawn immediately and used them to buy long-dated government bonds and mortgage-backed securities that are highly affected by interest rates. Silicon Valley Bank did exactly that, and then collapsed under a wave of withdrawals in March.

Red Flags

Warren Buffett has actually dumped his stakes in several banks over the last 2-3 years because they were taking "dumb" risks and using deceptive accounting to flatter their earnings. He believed they would ultimately pay for their misdeeds and now it seems that they are.

Some of the red flags Buffett noticed in financial statements were that several banks were valuing their assets at cost instead of market value. This is done on purpose in an effort to artificially inflate profits and mislead investors and analysts.

"I don't like it when people get too focused on the earnings number, and forget what in my view are basic banking principles."

Buffett declined to mention which banks he spotted the red flags in, but he wanted to make clear that just because he sold a bank’s stock didn’t mean that it was a poorly run company.

However, he’s clearly been trying to reduce his exposure to the sector in general for some time now. Take a look at this chart showing his portfolio allocation to bank stocks from Q4 2019 to Q4 2022.

Depositors Shouldn’t Worry

One of the biggest points that Buffett wanted to make during his interview was that depositors didn’t need to panic or fear losing their money being held in the banks.

“Nobody is going to lose money on a deposit in a US bank. It’s not going to happen.”

Buffett confidently made this statement and then added:

“You don’t need to turn a dumb decision by bank managers into panicking the whole citizenry of the United States about something they don’t need to be panicked about.”

Depositor Money is Protected

He also reiterated that the FDIC (Federal Deposit Insurance Corporation) exists for this very reason.

The FDIC was created to protect depositors from these types of failures while also helping banks retain the confidence of the public by providing them with peace of mind that their money is insured. Read more on FDIC insurance here

Buffet pointed out that much of the public is under the false impression that these failures will cost the US government a lot of money. But he wanted to make it very clear that’s simply not true.

“The costs of FDIC insurance are covered by the banks. Banks themselves have never cost the federal government a dime.”

He’s referring to how the FDIC is set up. While it is a federally regulated insurance corporation, it’s not federally funded. That’s a BIG DIFFERENCE.

Funding for the FDIC comes from premiums paid out by the banks and savings corporations, not from government spending.

Conclusion

Buffett ended his interview with some insightful thoughts for the average person who may be scared of these recent bank failures.

“People shouldn’t be worried about losing their money and the deposits they have in an American bank, and today they have no reason to worry.”

Buffett’s comments in this interview offered a more positive perspective on the current banking crisis from someone who knows the sector better than anyone.

It was nice to hear that he’s still very confident in the system as a whole, especially in the FDIC. His outlook should give people more confidence and peace of mind that their deposited money is protected against any more unprecedented bank failures.

Though it’s very important for investors to also take what he said about the banking sector into account. While he’s confident that depositors will be protected from further fallout, the same cannot be said about bank stock shareholders.

Poor decisions made by a bank’s corporate management team can result in huge losses for shareholders. So if your portfolio has an allocation to individual bank stocks, it may be time to revisit those holdings and check in on the bank’s financials to ensure its still a stock that you want to own.

Knowledge is Power

It’s so important to understand what’s happening with our financial system and why. I hope this article broke it down in a very easy to understand way and helps you feel more confident in your own financial plan.

These are unprecedented times we’re in, but those who stay informed will be in a good place to get through it all. I hope this weekly newsletter can be your way of staying in-the-know and confident with your financial plan.

Thanks for reading and be sure to subscribe for more if you haven't already!

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This special extra will give you up-to-date stock market news & insights complete with easy-to-understand technical analysis of the major stock indexes and Bitcoin each week.

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While there's no one-size-fits-all answer, there is a simple financial guideline that can help you plan for a financially secure retirement.

It's called the 4% rule. Here’s how it works:

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What is the 4% rule?

The 4% rule is a loose financial guideline that suggest you can withdraw 4% of your portfolio each year without ever running out of money.

The idea is that if your portfolio can average higher annual returns than the amount needed to be taken out to cover your expenses, then you’ve essentially reached financial freedom.

However, the 4% rule is not a guarantee. There’s a few things that you must keep in mind when using this guideline:

1. It’s based on the assumption that you have a well-diversified portfolio of investments that can generate an average annual return of around 7% to 8% (to account for the 4% being withdrawn and for the rate of inflation)

2. It's important to adjust your withdrawals for inflation to ensure that your purchasing power doesn't erode over time (for example, recent record high inflation has been between 5-8% for the last year)

3. Your actual retirement expenses may be higher or lower than the amount you've budgeted for, so it's essential to keep an eye on your spending and adjust your plan if needed.

How Much Will You Need To Retire Happy?

So now that you understand how the 4% works, you use it to calculate how much money you can expect to need to ensure a happy and stress-free retirement.

Add up your monthly expenses and multiply by 12 to get your yearly total.

Monthly Expenses x 12 Months = Total Annual Expenses

Then multiply your annual expenses by 25.

Annual Expenses x 25 = Your Retirement Goal

You can use this chart for reference:

Giving Yourself Wiggle Room

The 4% rule is widely used by financial planners everywhere as a rough rule of thumb for setting retirement goals, but the equation is still to be taken lightly.

Unprecedented economic times like what we’re seeing lately with this historic high inflation have a negative effect on this equation’s ability to predict necessary withdrawal rates.

If you want to give yourself more of a financial cushion and really ensure success throughout retirement, you can do the same math but only using 2-3% to calculate your total.

This math would assume that you’re withdrawing much less annually which would allow for your investments to continue growing and compounding over time.

Conclusion

We all dream of the ability to retire early and not having to worry about money. Now you can use this tool as a guideline to see a rough estimate of what you’ll need to retire happy.

For me personally, my first big goal is getting to $2.5 million invested. That would assume a $100k per year salary coming from nothing more than my portfolio.

Now that sounds like the dream situation and a ticket to financial freedom. I’m working hard to get there.

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Mark Talks Markets - 4/17

Paid subscribers will have access to the special extended version of my weekly newsletter called Mark Talks Markets.

This edition gives you up-to-date stock market insights complete with easy-to-understand technical analysis of the major stock indexes and Bitcoin each week.

With this added value, paid subscribers have the tools they need to make informed decisions about their investments and stay ahead of the curve.

This week I’m allowing all of my subscribers access to this version FOR FREE!

I hope you enjoy.

A Look at the Charts

Every week I like to take a look at the stock charts for these 3 major markets:

The S&P 500, the Nasdaq, and Bitcoin.

These 3 charts carry so much weight in the financial world and a lot can be determined about investor sentiment and future expectations by simply keeping up-to-date with the trends.

Technical analysis and reading stock charts doesn’t need to be so complicated. I like to keep it very simple by using only 3 simple moving averages for reference (the 200-day, the 120-day, and the 50-day).

Let’s have a look at this week:

S&P 500

The S&P 500 has continued its comeback rally and after closing on Friday at 4137. It’s now +18% since hitting its 52-week low around the 3500 level back in October.

Despite still being -14% from its all time high, the S&P 500 is looking much better from a technical analysis point of view as well.

The index is now back well above its 200-day moving average, and its previous support level (~3800) held up strong on the last bit of market selling.

After being in a down trend and trading below the 200-day MA for over a year, it’s nice to see some positive momentum to the upside again.

3 Major levels I’m watching on the S&P 500 index:

~4200 This is the next major resistance level. A sustained break above this level could be signs of a more bullish move to the upside.

~3950 The 200-day moving average. A very important indicator that many traders and professional investors look to gauging shorter-term sentiment.

~3800 Previous support level that held up strong during the last sell-off. A break below could indicate more bearish signals in the short term.

Nasdaq

The Nasdaq has also continued its comeback rally and after closing on Friday at 12,123. It’s now +24% since hitting its 52-week low around the 10,500 level back in October.

Despite still being -21% from its all time high, the Nasdaq is looking much better from a technical analysis point of view as well.

The index is now back well above its 200-day moving average, and its previous support level (~12,000) held up strong on the last bit of market selling.

After being in a down trend and trading below the 200-day MA for over a year, it’s nice to see some positive momentum to the upside again. Especially as the moire tech-heavy Nasdaq has been much harder in this current bear market than the more diversified S&P 500.

3 Major levels I’m watching on the Nasdaq index:

~13,800 This is the next major resistance level. A sustained break above this level could be signs of a more bullish move to the upside.

~12,000 The 200-day moving average. A very important indicator that many traders and professional investors look to gauging shorter-term sentiment.

~11,500 If the 200-day MA were to fail to hold as support, this would be the next level I’d expect a support to form.

Bitcoin

Bitcoin has had a remarkable turnaround so far in 2023. After hitting a new 52-week low last November around $15,500, the crypto has since gone +92% as it’s once again trading above the $30,000 level.

Bitcoin hasn’t traded above $30,000 since May of 2022 and it’ll be interesting to see if this extraordinary rally will continue. Though even after the massive gains seen this month, Bitcoin is still -56% from its all time high.

3 Major levels I’m watching on Bitcoin:

~$32,000 This is the next major resistance level for Bitcoin. A sustained break above this level could be signs of a much more bullish move to the upside. If it can sustain a break above $32,000 then it could potentially continue its rally all the way back to $40,000 (the next definitive resistance after)

~$26,500 The 50-day moving average. As Bitcoin has been making massive moves to the upside, the asset may need to cool off before charging any higher. Selling pressure would likely see a test of the 50-day MA as its the next closest support level.

~$20,000 This is a crucial and extremely important psychological level for Bitcoin. I suspect it to be a major test of support for any drastic turn around in sentiment causing a sell-off.

Earnings On Tap for This Week

Here’s a look at all of the companies who will be reporting earnings this week:

Thanks for reading! I’m excited to see what this week in the financial markets is gonna bring.

I’ll be watching everything closely and will be ready to break it all down again for you in next week’s edition of Mark Talks Money.

Be sure to subscribe if you haven't already and consider becoming a paid subscriber if you want to continue receiving simplified technical analysis and up-to-date stock market insights.

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Congress just recently made some big changes that will affect 401(k) plans everywhere. Let me break down some of the biggest changes they made and how it will affect your 401(k).

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1. Requiring Automatic Enrollment in all 401(k) plans

One of the most significant changes to 401(k) plans is the requirement for automatic enrollment. This means that employers must automatically enroll employees in their 401(k) plan, and employees must opt-out if they do not want to participate. This change is designed to increase retirement savings rates and make it easier for employees to start saving for retirement.

2. Allowing Employer Contributions for Student Loan Payments

Another change that has been made to 401(k) plans is the ability for employers to make matching contributions to an employee's 401(k) plan when the employee is paying down student loan debt. This change recognizes the growing burden of student loan debt and provides an incentive for employees to pay off their loans while still saving for retirement.

3. Increased the Age for Required Minimum Distributions (RMDs)

The required minimum distribution (RMD) age for 401(k) plans has been increased from 70 ½ to 72. This change allows employees to delay taking distributions from their 401(k) plans and continue to grow their retirement savings.

To be clear, this age isn’t when you gain access your 401(k) funds (that remains 59 ½). This is the age where its mandatory to withdraw from your plan even if you don’t want to.

4. Help Employees Build and Access Emergency Savings

Many employees struggle to save for emergencies, such as unexpected medical bills or car repairs. To help address this issue, some 401(k) plans are now allowing employees to contribute to emergency savings accounts within their plans.

Employees can now make penalty-free withdraws of up to $1k per year for emergency expenses. You’d still owe income tax on the amount borrowed, but the tax could be refunded if the money taken out is replaced within 3 years.

5. Raising Catch-Up Contributions for Older Workers

For employees age 50 and over, catch-up contributions to 401(k) plans have been increased from $6,000 to $6,500. This change allows older workers to save more for retirement and catch up on any retirement savings they may have missed earlier in their careers.

6. Enhancing the Savers Credit Rule

The savers credit is a tax credit for low- to moderate-income individuals who make contributions to their retirement accounts. The recent changes to 401(k) plans have enhanced the savers credit rule, making it easier for more individuals to qualify for the credit and receive a tax break for their retirement savings.

Starting in 2027, eligible filers (married couples making $71k or less) will get a federal match of their own contributions worth up to 50% of their savings (cannot exceed $1,000).

7. Improving Part-Time Worker Benefits

Some 401(k) plans are now offering benefits to part-time workers who may not have previously been eligible. Current rules state that part-time workers must be allowed access to 401(k) plan rules if they have at least 3 years of service and work at least 500 hours per year. Starting in 2025, the required time employed will drop to only 2 years.

8. Increased Annual Contribution Limits

You can now contribute up to $22,500 per year into your 401(k) account. This is up from $20,500 in 2022. Catch-up contribution limits for those age 50 or older is now up to $30,000 per year.

Conclusion

I still think that more can be done to help the average person prepare for retirement, but these recent changes to 401(k) plans are at least some steps in the right direction.

It’s important to stay in-the-know with all of these changes and to understand how they could affect you. I hope this weekly newsletter can be your way of staying informed and confident with your financial plan.

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Why did this happen? Can it happen again? Should I be worried?

Let me provide you with some insight to help answer those questions.

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Why did this happen?

The US financial system was built on what’s called ‘fractional reserve banking’. This fractional banking system only requires the banks to keep a certain portion of client deposits in their cash reserves. The rest of depositors’ money is free for the banks to do whatever they want with.

But most banks are publicly traded companies with shareholders to impress.
So they either invest the money to generate a return, or they loan it out to someone and profit off the interest.

However, during the Covid pandemic there was a major change made to the reserve requirements. The required minimum amount of depositor money needed to be held by the banks in their cash reserves was taken away. Removing that rule essentially made the US a no reserve banking system. The banks were then free to invest or loan ALL of their depositors’ money.

When demand for loans significantly dropped during the pandemic, the banks decided to invest even more of their depositors’ money. But the problem was that they invested into securities highly affected by changes in interest rates.

As the Fed has continued raising rates, the banks’ investments lost billions of dollars in customer deposits. When news of this leaked, everyone ran to the bank at once trying to withdraw all of their funds.

This is called a bank run. It’s when too many people try to withdraw their money at the same time and the bank can’t fulfill all the withdraw requests because they don’t have that much cash in their reserves. Massive bank runs like the ones seen at Silicon Valley and Signature lead to complete bank failures.

Can this happen again?

After the collapse of these two major banks, the US government and banking regulators came together quickly to make a plan that would stop widespread fear from causing more failures in the future. Here’s what they did:

First, they promised that they’d backstop all customer deposits at both banks and made funds available to all within 24 hours of the announcement.

The Federal Reserve also enacted a new program called the Bank Term Funding Program (BTFP). Its main purpose is protecting other financial institutions by ensuring they’ll always have enough money to meet withdraw requests. In short, it’s meant to keep more bank runs from happening.

The Fed will offer loans of up to 1 year to banks who may need additional funds to meet depositor demands. Any bank utilizing this program will have to pledge assets of their own as collateral.

These steps should help mitigate mass fear from spreading and causing more bank failures. But whether or not it will renew public trust is our banking system remains to be seen.

How to protect your money

The best way to ensure that the money in your bank accounts are protected is by having FDIC insurance. Let me elaborate on this:

The Federal Deposit Insurance Corporation (FDIC) is an independent US government agency that provides insurance to depositors in the event their bank fails. FDIC insurance covers up to $250,000 per depositor, per bank, for each account ownership.

In order to qualify for FDIC insurance, the bank must be a member of the FDIC. Most banks in the United States are FDIC insured, but it never hurts to double check and make sure that yours is too.

If you have less than $250,000 in a bank account, then your money is automatically insured. So even in the event of a bank failure, your money would be protected.

FDIC insurance covers all types of deposits including checking & savings accounts, money market accounts, and CDs. However, it doesn’t cover investments made such as stocks, bonds, mutual funds, or other securities.

Diversification is crucial when looking to protect large sums of money held in banks because any funds over the $250,000 FDIC insurance limit in a single account wouldn't be eligible for coverage.

Conclusion

It’s so important to understand what’s happening with our financial system and why. It’s also necessary to know about these FDIC insurance benefits so that you can plan accordingly and protect your money. I hope this article broke all of it down in a very easy to understand way and helps you feel more confident in your own financial plan.

These are unprecedented times we’re in, but those who stay informed will be in a good place to get through it all. I hope this weekly newsletter can be your way of staying in-the-know and confident with your financial plan.

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It’s important for you to understand why this is happening and how it could potentially affect you. Here’s what you need to know:

What happened?

Silicon Valley Bank (SVB) was just closed by US regulators and taken over by the FDIC. The bank has been a well trusted financial institution for 40 years and was the 16th largest bank in the United States. Its failure marks the second largest in history only behind Washington Mutual which collapsed in The Great Financial Crisis of 2008.

SVB had more than $200 Billion in total assets and claimed to have been the main financial institution for almost half of all venture capitalist funded startups. This could be bad news for many tech companies and startups out there who had money deposited there.

Why it happened:

The bank had more than half of their total assets invested into treasury bonds which are heavily impacted by inflation. As Jerome Powell and The Federal Reserve have continued drastically raising interest rates to combat inflation, these investments became much less valuable.

The bank quickly realized that they were in trouble and began trying to make up for the losses. They announced on Thursday that they’d sold $22 Billion in securities and planned on selling billions more in company stock. The announcement spooked investors and the stock crashed -60% in a single session. It also caused panic amongst the tech investors and startups who had their money deposited there causing a massive run for the banks.

When everyone tried withdrawing their money all at once, the bank didn’t have enough funds to satisfy all the withdraw requests which is what caused the bank to fail.

What’s worse is that 95% of customer deposits with SVB are not FDIC insured because they vastly exceeded the $250,000 limit. That means there’s now billions of dollars of uninsured deposits now tied up in this mess.

What this means for the economy:

This bank failure could have lasting ripple effects that could be felt throughout the economy. Large tech companies as well as thousands of startups all had their money deposited into SVB. Now most of them won’t have access to their cash reserves for a long time or worse, never again.

This could potentially lead to thousands of layoffs as the companies now may not have enough cash to meet payroll requirements. Other major risks include massive defaults on loans taken out elsewhere and maybe even multiple bankruptcies.

What this means for other banks:

Seeing a bank of this size and stature fail is just another humbling reminder of how fragile our fractional share banking system really is. It’s enough to shake a lot of people’s confidence in our current financial system.

Mass fear can cause a run on any bank, and that’s something to always keep in mind considering none of them would have enough cash on hand to fulfill withdraw requests if it were to happen elsewhere.

The good news is that the average person’s bank account balance doesn’t exceed the $250k limit for FDIC insurance, so most of us would be fine in that worst case scenario.

Something to keep an eye on though is that other banks could be in similar situations with too much bond allocation causing their own future liquidity issues. The Fed has no plans of halting their rate hike cycle any time soon which only adds fuel to the fire.

What this means for you:

No one yet knows what the long term effects this could have on the economy and it’ll likely take months to see them all unfold. But your best course of action is to prepare for the worst and hope for the best.

You should focus on protecting you current income while also finding ways to increase it.

Also be sure to have your emergency fund of 4-6 months of expenses as a financial cushion to help you weather any unexpected setbacks that may occur.

Once you’ve got that, start planning on taking advantage of quality assets on sale. More pain could be coming for the economy causing more downside in the stock market.

Put yourself in a good position to take advantage. We may be about see a generational investing opportunity present itself.

I hope this broke down all of the craziness involved with this news story in an easy to understand way. Knowledge is power so be sure to stay informed! See you all next week.