Why China is beating the U.S. in Electric Vehicles | CNBC

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“All-electric and self-driving vehicles have the potential to make the world a better place.” General Motors

The global electric vehicle market is heating up and China wants to dominate, according to CNBC. Historically, China has lagged far behind North America and Western Europe in vehicle innovation, design and production.

The country has invested at least $60 billion to support the electric vehicle (EV) industry and it’s pushing an ambitious plan to transition to all electric or hybrid cars by 2035. Tesla entered the Chinese market in 2019 and has seen rapid growth.

China sold roughly one million more EVs than the U.S. in 2020. But there are signs the U.S. is getting more serious about going electric.

President Joe Biden announced a goal to reach net-zero emissions by 2050 and investments in green infrastructure. Additionally, POTUS announced plans to replace the federal government’s fleet of cars and trucks with electric vehicles assembled in the U.S.

As of 2019, the U.S. government had 645,000 vehicles that were driven 4.5 billion miles and consumed 375 million gallons of gasoline and diesel fuel, according to the General Services Administration (GSA).

General Motors (GM) announced recently that between 2020 and 2025 they will invest more than $27 billion in EV and autonomous vehicles (AV) product spending, exceeding GM’s gas and diesel investment.

Cadillac’s first fully electric EV

Furthermore, GM has a “vision of a future with Zero Crashes, Zero Emissions and Zero Congestion” and they plan to produce 30 new global EVs by 2025 in which forty percent of the company’s U.S. entries will be battery electric vehicles during that time.

The CNBC video details how China came to dominate the market and whether it’s too late for the U.S. to catch up.

Yet, by mid-decade, GM is aiming to sell a million EVs per year in their two largest markets – North America and China and they’re committed to be carbon neutral in both their global products and operations by 2040. Eventually, GM intends to offer EVs across all their brands and span the global EV market from low-cost EV vehicles to the upscale Cadillac CELESTIQ.

References:

  1. https://www.gm.com/electric-vehicles.html
  2. https://www.gm.com/masthead-story/electric-vehicles-AV-EV.html

Which COVID Vaccine

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The best COVID-19 vaccine for you is the vaccine you can get in your arm the soonest. 

There are three vaccines approved for emergency use by the Food and Drug Administration and some people are tempted to shop around. Some people may want the convenience of the Johnson & Johnson single-dose shot and its low rate of side effects. Others may be interested in the extremely high efficacy of the Pfizer and Moderna two-shot mRNA vaccines.

Which Covid vaccine is best for you? It's the one you can get the soonest.

Bottom line: You should get the vaccine that’s available soonest. All three vaccines approved for emergency use have been shown to be safe and effective against severe complications of COVID-19, the disease caused by the novel coronavirus SARS-CoV-2, according to the Centers for Disease Control and Prevention.

In clinical trials, all three vaccines prevented hospitalizations and death, the worst outcomes of the virus. While these were not the primary outcomes measured (symptomatic infections were), this effectiveness continues to play out in post-vaccination studies. Very few people who have been fully vaccinated are getting sick and even fewer are hospitalized.

All three vaccines produce side effects in patients — but not all patients. Although, there are slight differences in side effects. People who get the J&J vaccine tend to experience fewer of them, but each vaccine produces side effects, mostly mild, in some patients. These side effects are short-lived.

The most common side effect is pain, redness or swelling at the injection site. Other people experienced tiredness, headache, muscle pain, chills, fever or nausea. But most of these side effects were mild to moderate and went away quickly.

Remember, these side effects are a sign that your body is reacting to the vaccine and building immunity to the virus (if you don’t have side effects, that doesn’t mean the vaccine isn’t working), according to Dr. Andrea Klemes, the Chief Medical Officer of MDVIP. They’re a small price to pay to get that protection. They’re also rarer in the general population than they were in clinical trials participants with a higher frequency after the second dose. About 372 out of every million administered doses of the Moderna and Pfizer vaccines lead to a non-serious reaction report, according to the journal Nature. The most frequently reported side effects are headache (22.4%), fatigue (16.5%) and dizziness (16.5%), according to the Centers for Disease Control and Prevention.

The bottom line: You’ve waited this long for the vaccine; you shouldn’t shop around when the opportunity to get the vaccine presents itself. The faster everyone gets vaccinated, the faster we will be able to return to normal.

References:

  1. https://www.mdvip.com/about-mdvip/blog/which-covid-vaccine-should-you-get
  2. https://www.cdc.gov/mmwr/volumes/70/wr/mm7008e3.htm

Creating a Budget

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“A budget is telling your money where to go instead of wondering where it went.” John C. Maxwell

Spending within your means may sound like a simple rule to follow, but many Americans spend more than they save, which can result in debt. The good news is that it’s completely avoidable, and it’s reversible over time. With a little budgeting, planning, tracking and adjusting your spending, you can live happily within your means.

Keeping your personal finances in tip-top state does takes some planning, effort and time. Yet, many people live above their means and don’t even realize it. More than three-quarters of American workers (78 percent) are living paycheck-to-paycheck to make ends meet, according to survey conducted by Harris Poll on behalf of CareerBuilder in 2017. Thirty-eight percent said they sometimes live paycheck-to-paycheck, 17 percent said they usually do and 23 percent said they always do. 

To improve your financial health and money management awareness, the one piece of advice you hear most often from financial experts is to create a budget.

“Budgeting helps you better understand how you spend your money and shows you ways to manage your money, pay off debts and save for future financial goals.”

Budgeting is one of the single most effective tools for money management. Making a budget simply means examining your income and expenditures in order to determine exactly how much money you have coming in and where you’re spending it. Once you’ve got a clear understanding of your current budget – what income you’re receiving and what expenses you’re responsible for – take a closer look and find places where you can spend less.

A budget will help give you a clearer picture of how much money you have coming in (income) and how much is going out (expenses). It’ll set guidelines for your expenses that will help you understand how much you can set aside for those bigger ticket items like a house and long term goals, like saving for retirement or an emergency fund. A budget is a personal cash flow roadmap. It can span a week, month, quarter—three months—or any set length of time. They are created by individuals and businesses.

Begin planning your monthly budget by figuring out how much you have coming in versus how much is going out every month. Ultimately, you want to end up with a blueprint that specifically breaks down your cash flow (income minus expenses), so you know how much you can spend and how much you can save each month. Building a budget starts with a few simple steps.

Budgeting is Important

“When making a budget, the idea is to make sure your expenses don’t exceed your income.”

A budget is a foundational piece of a financial plan. If you’re serious about reaching your financial goals, making a budget and sticking to it can help you achieve them. Here are some of the benefits of making and following a budget:

  • Live within your means: If you haven’t been budgeting up to this point, you may often wonder at the end of the month where all your money went. It’s even possible that you’re running a deficit and taking on credit card debt to cover the difference. A budget can help you live within your means when you use it to set clear boundaries for your spending.
  • Pay off debt: Making a budget is about taking control of your finances. If you’re working to get out of debt, decide how to allocate your spending to prioritize paying more toward debt payments. For example, if you notice that you spend a lot on entertainment, you can set a budget to only allow yourself to spend up to a certain amount on that category. Then use the savings to pay down debt.
  • Save money: Long-term savings goals are also an important part of a personal budget. Think about setting aside money each month to save for retirement, a vacation or a home down payment. In the short term, make sure to save enough for an emergency fund. A budget can give you better control over how you spend your money, allowing you to cut back on spending and save more.
  • Reach financial goals: You likely have financial goals you’re working toward. But if you don’t have a budget, it can be tough to know where to focus your efforts and make meaningful progress. A budget can help you decide how much money to allocate for each goal to keep yourself accountable.

While these are general benefits of budgeting, take a moment to think about why you want to budget. Whether it’s due to a short-term need, long-term goals or simply to understand where your money goes, knowing your reasons for budgeting can motivate you to keep up with it.

Step 1: Look at your paycheck.

To create a budget, you first need to know your net monthly income, or after-tax income. This is your monthly take-home pay, not your total salary — an important distinction when figuring out how much you can spend on a monthly basis. Knowing this number is the first step to creating a spending strategy.

To start, make a list of all your sources of income coming in the door every month. Every paycheck you get. Maybe a regular side hustle. Do you get alimony or child support? What about income from investments? Everything.

Step 2: Distinguish your essential needs from your wants and discretionary spending.

Start listing your expenses. Start with the big stuff: rent, car payments or transportation, utilities, groceries, any debt payments you need to make — things like that. Now it’s time to make a list of your essential expenses. This involves separating your “wants” from the “needs.” Needs usually include things like:

  • Housing costs (monthly rent or mortgage payment)
  • Transportation costs (car payment, fuel, public transportation)
  • Utilities
  • Food
  • Insurance
  • Internet, cable, and phone bills

Once you’ve tallied those costs, add them up and deduct your needs total from your after-tax income. Make note of that number. What about everything you spend money on that you like, but maybe don’t need? Eating out, entertainment, that new pair of shoes. Add those as a list to your expenses. Treating yourself is great! But you want to do it within your budget.

Step 3: Calculate how much your wants cost you.

Next, outline all the things you spent money on that don’t fall into the “needs” bucket, and tally up the total. The easiest way to do this is to look at your credit card statements from the last month or two. If you use cash to pay for things, keep a log for several days (or better yet, a couple weeks) of all your expenses.

Once it’s all written down, use a critical eye and note where you’re being your own worst enemy by overspending or wasting money on things you don’t need (or even want). Strategize on how you can modify your behavior to reduce these unnecessary expenses.

While it’s a-okay to splurge on occasion, it’s important to do so in moderation.

Step 4: Add up all your costs.

Jot down the total amounts of your “needs” and “wants” and see how they stack up against a common rule of thumb: the 50/30/20 budget. This popular money management plan says you should spend 50 percent of your take-home pay on needs, 30 percent on wants, and put the remaining 20 percent toward savings, investments, and any debts you may have, like school loans or revolving credit card debt.

Don’t panic if your current financial picture doesn’t align with this ideal ratio. It can be difficult to stick to this plan, especially if you’re new to the workforce and possibly paying down student loan debt.

But that’s exactly why a budget can be so useful. Matching up how much you spend to established guidelines can be a helpful way to identify where everything’s lining up — and where you can put in a little more effort and reduce your spending.

Step 5: Keep it up.

Now that you have your budget created, here comes the harder part: sticking to it.

The primary part of your budget should always cover your needs. What’s left over is split between the things you want and your savings. When it comes to minding your numbers, try out some of these tips:

  1. Be a stickler and set aside some savings for an emergency fund. It’s smart to have it an intrinsic part of your budget.
  2. While putting 20 percent of your take-home pay toward savings and debt isn’t technically considered a “need,” you should treat it as one. Avoid dipping into that bucket to pay for “wants,” so you can pay down debts and afford future unknowns, should something arise. In fact, you could remove temptation by setting up monthly automatic savings transfers.
  3. Break it down. If a budget isn’t as manageable, try chopping it up into monthly or weekly segments. A shorter time frame can make it easier to stay on track. That way, you won’t discover that you’re already pushing the limit of your budget.
  4. Review regularly. Along those same lines, keep track of your purchases as they happen instead of totaling them up at the end of the month. Checking your balance online or reviewing your recent credit card charges is a great reality check for daily expenditures.
  5. Get everyone on board. If other people, like your spouse, are supposed to follow your budget, make sure they’re on board with the financial goals you’re trying to meet. To help create a comprehensive budget, most financial advisers recommend following the 50/30/20 model for budgeting. This model suggests you use 50% of your take-home pay for essential needs, 30% for wants or discretionary spending, and 20% for savings.

Trim your expenses if your budget proves your expenses outweigh your income. One of the easiest ways to trim your expenses is to evaluate how much money you’re spending on the things you want but don’t necessarily need. For example, a night out with friends costs an average of $81, which really adds up if you go out multiple nights a week. This doesn’t mean you can’t go out and have fun, but you may need to limit your spending to make your budget work.

Another way to cut your expenses and get control of your finances is to see if you can lower the cost of certain services. Contact cellphone, internet and cable television providers to see if a competitor offers a better deal or if you can save money by bundling. Consider dropping premium cable television channels and opt for an economical basic package.

Setting goals

Successful budgeting starts with aligning your spending with your priorities. Creating goals and rewards is a fantastic way to increase your chance of budgeting successfully. For example, set a goal to save a specific amount to pay off debts by spending less on unnecessary expenses like dining out, buying lattes or shopping. Put this money into a savings account to earn interest. When you meet your savings goal, reward yourself with a reasonable splurge on something fun. Typical goals and priorities include:

  • Planning and paying for college and post graduate educational expenses
  • Saving a down payment to buy a home or paying off the mortgage early
  • Paying off high-interest student loans and credit card bills
  • Saving and investing for early retirement

Budgeting doesn’t have to be the complicated or intimidating task that it’s often made out to be. Follow this simple process, and your monthly budget will help keep your finances in check.

Now you have the beginnings of your monthly budget! It’s most efficient to build this your budget in a spreadsheet or budgeting software. Then add new expenses as you spend.

Keep it Simple: The 50/30/20 rule

Tracking your finances doesn’t have to be complicated. A budget starts with a list of your income and your expenses, and following a simple strategy as the 50/30/20 rule.

The 50/30/20 rule is a popular budgeting method that splits your monthly income between three main categories. It’s pretty straightforward: You split your money between your needs, wants and savings, according to those ratios.

Here’s how it breaks down, according to NerdWallet:

Monthly after-tax income. This figure is your income after taxes have been deducted and the cost of payroll deductions for health insurance, 401(k) contributions or other automatic savings have been added back in.

50% of your income: needs. Necessities are the expenses you can’t avoid. This portion of your budget should cover costs such as:

  • Housing.
  • Food.
  • Transportation.
  • Basic utilities.
  • Insurance.
  • Minimum loan payments. Anything beyond the minimum goes into the savings and debt repayment bucket.
  • Child care or other expenses that need to be covered so you can work.
  • 30% of your income: wants. Distinguishing between needs and wants isn’t always easy and can vary from one budget to another. Generally, though, wants are the extras that aren’t essential to living and working. They’re often for fun and may include:
    • Monthly subscriptions.
    • Travel.
    • Entertainment.
    • Meals out.

    20% of your income: savings and debt. Savings is the amount you sock away to prepare for the future. Devote this chunk of your income to paying down existing debt and creating a comfortable financial cushion to avoid taking on future debt.

    How, exactly, to use this part of your budget depends on your situation, but it will likely include:

    • Starting and growing an emergency fund.
    • Saving for retirement through a 401(k) and perhaps an individual retirement account.
    • Paying off debt, beginning with the toxic, high-interest type.

    Making a budget can be an important step in the right direction for you. But budgeting for the sake of budgeting isn’t fun. As you work with your budget each month, remind yourself of the reasons why and purpose you’re doing it. Also, evaluate your progress periodically to make sure you’re on track to meeting your financial goals.

    References:

    1. http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-According-to-New-CareerBuilder-Survey
    2. https://www.thebalance.com/benefits-to-budgeting-453688
    3. https://www.ally.com/do-it-right/money/how-to-build-a-budget/?CP=135969424;274374394
    4. https://www.marketwatch.com/story/the-beginners-guide-to-building-a-budget-2019-08-09?mod=article_inline
    5. https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator

    3 Ways to Start Investing in the Stock Market With $100 or Less | Motely Fool

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    “One of the best ways to build wealth over time is to invest!”  The Motley Fool

    The stock market is a fantastic tool to build wealth.  If you don’t have much money to spare, The Motley Fool video below explains how to start investing with just $100 or less.

    Stimulus, Inflation, Unsustainable Debt and America | Fidelity Investments and Peterson Foundation

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    “America has been on an unsustainable fiscal path for many years, since long before this pandemic.” The Peter G. Peterson Foundation

    • The new $1.9 trillion stimulus spending package, on top of trillions already spent to revive the economy, is driving the national debt to unprecedented levels.
    • History shows that high government debt often leads to inflation, and an uptick in inflation is expected this year as the economy recovers.

    The $1.9 trillion federal stimulus package will help many families, businesses, and state and local governments hard hit by the pandemic. But it is also fueling concerns about the ballooning federal debt, inflation, and how investors can protect themselves.

    The Congressional Budget Office projected that the federal budget deficit will rise during the second half of the decade and climb steadily over the following 20 years.  By 2051, the federal debt is expected to double as a share of the economy.

    The projections by the nonpartisan office forecast a more challenging long-term outlook, as interest costs on the national debt rise and federal spending on health programs swells along with an aging population.  “A growing debt burden could increase the risk of a fiscal crisis and higher inflation as well as undermine confidence in the U.S. dollar, making it more costly to finance public and private activity in international markets,” the CBO report said.

    Our federal fiscal budget has structural problems, driven by well-known and predictable factors that include an aging population, rising healthcare costs and compounding interest—along with insufficient revenues to meet our commitments, according to The Peter G. Peterson Foundation.

    Over the last 20 years, the federal government’s debt has grown faster than at any time since the end of World War II, running well ahead of economic growth. In addition to COVID-related spending, rising federal debt has been driven by longer-term trends including increasing Social Security and Medicare spending for an aging population. Today, according to the Congressional Budget Office, the federal debt is $22.5 trillion, more than 100% of gross domestic product (GDP).

    Why debt matters

    New Fidelity research suggests that higher debt can slow economic growth, and ultimately lead to higher inflation and more volatile financial markets. Warns Dirk Hofschire, senior vice president of asset allocation research at Fidelity Investments: “Debt in the world’s largest economies is fast becoming the most substantial risk in investing today.”

    In the short term, Fidelity’s director of global macro Jurrien Timmer says a market consensus has emerged that inflation will rise in the second half of 2021: “An inflationary boom could result from the combination of COVID infections falling, vaccinations rising, ongoing massive fiscal stimulus, pent-up consumer demand, and low interest rates.”

    FEDERAL DEBT IS ON AN UNSUSTAINABLE PATH

    Longer term, Hofschire says, “The rise in debt is unsustainable. Historically, no country has perpetually increased its debt/GDP ratio. The highest levels of debt all topped out around 250% of GDP. Since 1900, 18 countries have hit a debt/GDP level of 100%, generally due to the need to pay for fighting world wars or extreme economic downturns such as the Great Depression. After hitting the 100% threshold, 10 countries reduced their debt, 7 increased it, and one kept its level of debt roughly the same.”

    Only time will tell which way the US goes and when. But Hofschire thinks “government policies are likely to drift toward more inflationary options.” Among them:

    • Federal spending aimed at lower- and middle-income consumers
    • Increased public works spending not offset by higher taxes
    • Protectionist measures with a “made in America” rationale
    • Infrastructure upgrades targeting sectors such as renewable energy, 5G telecom, and health care
    • Higher inflation targeting by the Federal Reserve
    • Mandatory pay increases for workers benefiting from government assistance

    In the longer term, if further free-spending fiscal policies are adopted while interest rates stay low and credit remains abundant, the likelihood of inflation could increase. But history suggests the magnitude and timing is uncertain. Many predicted an inflation surge the last time the federal government embarked on major fiscal and monetary stimulus after the global financial crisis, but inflation mostly failed to appear.

    THE GROWING DEBT IS CAUSED BY A STRUCTURAL MISMATCH BETWEEN SPENDING AND REVENUES according to The Peterson Foundation

    Why the national debt matters, according the The Peter G. Peterson Foundation:

    • High and rising federal debt matters because it reduces the county’s flexibility to plan for and respond to urgent crises.
    • Debt matters because growing interest costs make it harder to invest in our future — to build and sustain infrastructure, enhance education and support an economy that creates job growth and rising wages.
    • Debt matters because it threatens the safety net — critical programs like Social Security, Medicaid, Medicare, SNAP and Unemployment Compensation are essential lifelines for the most vulnerable populations.
    • Debt matters because America faces emerging and ongoing challenges that will require fiscal resources to keep the country safe, secure and strong — challenges like socioeconomic injustice, climate change, affordable health care, wealth and income inequality, international conflicts and an increasingly complex and competitive global economy.
    • Debt matters because the nation should care about its children and grandchildren. Borrowing more and more today reduces the opportunities and prosperity of the next generation.

    The U.S. faces a range of complex, unprecedented health, economic and societal challenges, set against the backdrop of a poor fiscal outlook that was irresponsible and unsustainable before the crisis.

    Building a brighter future for the next generation must become an essential priority for America, and the high cost of this health and economic crisis only makes that challenge more urgent. Once America has emerged from the pandemic, it will be more important than ever for its elected leaders to address the unsustainable fiscal outlook and manage the burgeoning national debt, to ensure that America is more prepared, better positioned for growth, and able to meet its moral obligation to future generations.

    References:

    1. https://www.cbo.gov/publication/57038
    2. https://www.fidelity.com/learning-center/personal-finance/government-spending-2021?ccsource=email_weekly
    3. https://www.pgpf.org/what-does-the-national-debt-mean-for-americas-future

    * The Peter G. Peterson Foundation is a non-profit, non-partisan organization that is dedicated to increasing public awareness of the nature and urgency of key fiscal challenges threatening America’s future, and to accelerating action on them. To address these challenges successfully, we work to bring Americans together to find and implement sensible, long-term solutions that transcend age, party lines and ideological divides in order to achieve real results.

    Investing is a marathon

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    Investing is a marathon and learning how investing in stocks can help you accumulate wealth is important to your financial

    Long-term investing is a marathon and is the best way, by far, to build wealth that stands the test of time. It’s how you plan for financial freedom, retirement and build a legacy to pass on to your children and grandchildren. Long-term investments require patience and time measured in decades, but have the potential to pay off with high returns.

    Investing is the act of purchasing assets – such as stocks or bonds or real estate – in order to move money from the present to the future. However, the conversion of present cash into future cash is burdened by the following problems:

    • Individuals prefer current consumption over future consumption: delayed gratification is hard for most people and, all things being equal, we would rather have things now than wait for them.
    • Inflation: When the money supply increases, prices also often increase. Consequently, the purchasing power of fiat currency decreases over time.
    • Risk: The future is uncertain, and there is always a chance that future cash delivery may not occur.

    To overcome these problems, investors must be compensated appropriately. This compensation comes in the form of an interest rate, which is determined by a combination of the asset’s risk and liquidity and the expected inflation rate.

    The steps to investing and building wealth involve a series of small decisions that move you along a financial path, one building block at a time over a long period of time. The steps begin with believing that attaining wealth is possible, and a clear intention to start investing and attaining wealth. After all, making your money work for you and accumulating wealth is not a haphazard occurrence, but a deliberate process, journey and destination.

    Once you determine that investing and attaining wealth is a priority, focus your energies on maximizing your income, and saving a portion of it. Investing and building wealth also requires you to make decisions on avoiding potentially destructive forces that erode wealth, such as inflation, taxes and overspending.

    Learning to be mindful of where your money has been going and spending wisely by evaluating whether something is a need or just a want will keep more money in your pocket. The bonus from being mindful will help you stop accumulating more stuff and may teach you to repurpose already owned items.

    “Successful investing and building wealth are about discipline, understanding of your tolerance for risk and, most importantly, about setting realistic financial goals and expectations about market returns,” says Certified Financial Planner Melissa Einberg, a wealth adviser at Forteris Wealth Management.

    Invest in stocks.

    Your first thought regarding investing in stocks and bonds may be that you don’t want to take the risk. Market downturns definitely happen, but being too cautious can also put you at a disadvantage.

    Stocks are an important part of any portfolio because of their long term potential for growth and higher potential returns versus other investments like cash or bonds. For example, from 1926 to 2019, a dollar kept in cash investments would only be worth $22 today; that same dollar invested in small-cap stocks would be worth $25,688 today.

    Stocks can serve as a cornerstone for most portfolios because of their potential for growth. But remember – you need to balance reward with risk. Generally, stocks with higher potential return come with a higher level of risk. Investing in equities involves risks. The value of your shares will fluctuate, and you may lose principal.

    Investing a portion of your savings in stocks may help you reach financial goals with the caveat that money you think you’ll need in three to five years should be in less risky investments. Stock investing should be long-term, understanding your risk tolerance, and how much risk you can afford to take.

    The power of compounding

    Compound interest is what can help you make it to the finish line. Compounding can work to your advantage as a long-term investor. When you reinvest dividends or capital gains, you can earn future returns on that money in addition to the original amount invested.

    Let’s say you purchase $10,000 worth of stock. In the first year, your investment appreciates by 5%, or a gain of $500. If you simply collected the $500 in profit each year for 20 years, you would have accumulated an additional $10,000. However, by allowing your profits to stay invested, a 5% annualized return would grow to $26,533 after 20 years due to the power of compounding.

    Purchasing power protection

    Inflation reduces how much you can buy because the cost of goods and services rises over time. Stocks offer two key weapons in the battle against inflation: growth of principal and rising income. Stocks that increase their dividends on a regular basis give you a pay raise to help balance the higher costs of living over time.

    In addition, stocks that provide growing dividends have historically provided a much greater total return to shareholders, as shown below.

    Invest for the long term.

    Long-term investing is the practice of buying and holding assets for a period of five to ten years or longer. While investing with a long-term view sounds simple enough, sticking to this principle requires discipline. You should buy investments with the intention of owning them through good and bad markets. You should base your investment guidance on a long-term view. For your stock picks, you should typically use a five – to ten-year outlook or longer.

    Long-term investments require patience on your part which is a trade-off for potentially lower risk and/or a higher possible return.

    Market declines can be unnerving. But bull markets historically have lasted much longer and have provided positive returns that offset the declines. Also, market declines often represent a good opportunity to invest. Strategies such as dollar cost averaging and dividend reinvestment can help take the emotion out of your investing decisions.

    No one can or has accurately “time” the market. An investor who missed the 10 best days of the market experienced significantly lower returns than someone who stayed invested during the entire period, including periods of market volatility and corrections. Staying invested with a strategy that aligns with your financial goals is a proven course of action.

    References:

    1. https://www.edwardjones.com/market-news-guidance/guidance/stock-investing-benefits.html
    2. https://smartasset.com/investing/long-term-investment
    3. https://www.bankrate.com/investing/steps-to-building-wealth/
    4. https://www.cnbc.com/2021/02/04/how-we-increased-our-net-worth-by-1-million-in-6-years-and-retired-early.html

    Source: Schwab Center for Financial Research. The data points above illustrate the growth in value of $1.00 invested in various financial instruments on 12/31/1925 through 12/31/2019. Results assume reinvestment of dividends and capital gains; and no taxes or transaction costs. Source for return information: Morningstar, Inc. 

    Omega-3 EPA and DHA

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    When it comes to the benefits of omega-3 fish oil supplementation, the evidence shows that it benefits both the mind and heart.  Our brains, hearts, and bodies appear to suffer when we don’t get enough of these healthy and essential fats. In terms of brain and heart health, omega-3s derived from wild cold water fish oil (or grass-fed animal fat and other kinds of seafood) are best because they are loaded with two particular brain- and heart-healthy essential fatty acids (EFAs) called eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA).

    A Harvard School of Public Health study published in 2011 found that omega-3 deficiency is likely the sixth biggest killer of Americans, and maybe the underlying factor of roughly 96,000 premature deaths each year!

    What Are the Benefits of Omega-3 Supplements?

    Scientific Benefits of Omega-3 Supplements | BrainMD

    First, the most important fact to remember about omega-3 essential fatty acids (EFAs) is that they are indeed essential, meaning that your body needs to get them from your diet. Unfortunately, with today’s modern diet, which is light on omega-3-rich foods (fish, grass-fed meats, nuts, seed and dark leafy greens) and heavy on foods with saturated fats and oils (corn, safflower, soybean, sunflower, cottonseed, peanut, etc.) that are rich in omega-6 EFAs.

    The American Heart Association recommend at least two oily fish meals per week (which equates to roughly 500 mg per day of EPA and DHA), a full gram per day for those with coronary heart disease—and even more for those with high triglyceride levels—there’s good reason.

    • Inflammation. Studies indicate that DHA and EPA from fish oil may support healthy inflammation levels in the body.10 Keeping inflammation levels in check supports a healthy vascular system.
    • Blood pressure and heart function. Research has also correlated adequate amounts of DHA and EPA with healthy blood pressure levels.11 And while still inconclusive, some studies have shown that EPA and DHA may play a role in healthy heart rhythm.12
    • Triglycerides. Having a high level of triglycerides, a type of fat (lipid) in your blood, can increase your risk of heart disease. A very strong body of research suggests that DHA and EPA help to maintain healthy triglyceride levels.13

    Our brains, hearts, and bodies appear to suffer when we don’t get enough of these healthy fats. In terms of brain and heart health, omega-3s derived from wild cold water fish oil are best because they are loaded with two particular brain- and heart-healthy EFAs called eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA). Literally, thousands of scientific studies have been conducted using fish oil rich in these two nutritional dynamos—with mostly promising results.

    Major Benefits of EPA and DHA For Your Health

    It has been scientifically demonstrated that your brain needs the omega-3 fatty acids EPA and DHA to function optimally. Though not technically classed as essential, these fatty acids are called essential for a reason – our bodies need them, and the only sure way to get enough of them is through foods or supplements. Let’s take a closer look at these two most important omega-3 fatty acids.

    Power Team: EPA + DHA

    Humans need a variety of fatty acids for our cell membranes to function. EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) are essential to the functioning of all our 30 trillion cells. They’re building blocks for the membrane systems that do most of the heavy lifting for our cells.

    We require premade EPA+DHA from our diet. Unfortunately, the modern diet has an unhealthy balance of fatty acids: we get an abundance of saturated and omega-6 fatty acids and not nearly enough omega-3s. Also, most of the omega-3s we do get must be converted to EPA+DHA, which the body doesn’t do effectively.

    Numerous surveys indicate populations that don’t consume a lot of seafood (such as the U.S.) don’t get sufficient supplies of EPA and DHA from their diet. Since plant foods don’t supply them, the main dietary sources of EPA and DHA are cold-water fish and dietary supplements. Considering the widespread contamination of seafood by mercury and other toxins, many experts advise that taking a purified fish oil supplement could be a smart choice.

     1. Promotes Healthy Mood

    EPA+DHA have been tested on adults with mood problems in at least 26 randomized, controlled clinical trials. Two meta-analyses, which analyze the data pooled from all the best trials, have concluded that these omega-3s are consistently beneficial for mood. These meta-analyses also suggest that fish oils with more EPA than DHA work better, with the best ratio being around 1.5 to 1 EPA to DHA.

    Children and adolescents with mood difficulties commonly have problems with academic performance, self-esteem, and socialization. In two clinical trials with youth aged 7-14 years, EPA+DHA 1600 mg per day (1400 mg EPA, 200 mg DHA) for 12 weeks substantially improved coping with distraction and stress – as well as mood, irritability, and self-esteem – compared with placebo.

     2. Improves Attention and Behavior

    Children and adolescents with attention and learning challenges often have low Omega-3 Index values (about 3% on average, compared to a healthy 8% or higher). A 2018 meta-analysis concluded that supplementation with EPA+DHA improved parental reports of attention and behavior, as well as mental focus on cognitive tests. The researchers concluded that to ensure the most benefit, the EPA dose should be at least 500 mg per day.

     3. Essential for the Heart and Circulation

    Numerous health agencies worldwide recommend EPA and DHA for promoting and enhancing cardiovascular health. Meta-analyses clearly indicate that supplementation with EPA+DHA at doses of 2-3 grams per day can promote healthy triglyceride status and blood pressure regulation. Additionally, EPA+DHA supplementation can improve blood vessel function, especially their capacities for relaxation and flexibility.

     4. Supports Healthy Immunity

    The immune system is the body’s security force. When the body is invaded, it goes on full alert to eliminate the threat. EPA and DHA support healthy immune responsiveness.

    Having sufficient EPA+DHA in our tissues gives the immune system the option to generate messengers from them to coordinate its activities. Healthy immunity is held in delicate balance by EPA and DHA. No other omega-3s can substitute for EPA and DHA in this crucial role.

     5. Vital for Healthy Pregnancy

    Babies of mothers who have good EPA+DHA status through pregnancy have a lower risk for problems with mood, cognition, and behavior in their early childhood. DHA, the predominant omega-3 in our cell membranes, is essential to the developing fetal heart, brain, and retina.

    A meta-analysis of 38 trials concluded that children born to mothers with higher prenatal EPA+DHA intakes show better motor, vision, and cognitive development in their first two years of life. Yet U.S. women on average have considerably lower EPA+DHA intakes than recommended by the U.S. National Institute of Medicine.

     6. Total Brain and Body Protection

    EPA and DHA have been shown to protect brain circulatory function and preserve memory and other cognitive capacities. EPA and DHA support many other organs and body systems including the liver (by preventing triglyceride buildup), the joints (promoting joint comfort), eyes (essential for retinal function), and muscles (protecting against mobility loss as we age).

    With strong evidence supporting the positive effects of omega-3s EPA and DHA on the brain, heart, and entire body, taking a fish oil supplement daily can have a significant impact on individual wellness. BrainMD is proud to recommend its new, high EPA and DHA premium liquid fish oil…

    https://twitter.com/yourwellbeing88/status/1278666518390165505?s=20

    References:

    1. https://brainmd.com/blog/omega-3s-the-supplement-your-mind-and-heart-can-get-behind/
    2. https://brainmd.com/blog/benefits-of-epa-and-dha-fish-oil-supplements/

    Stay Invested – Time in the Markets

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    “Time in the markets, not timing the markets.”

    A common mantra in investing circles is ‘it’s about time in the markets, not timing the markets’. In other words, the best way to make money is to stay invested for the long term, rather than worrying about short term volatility or whether now is the best time to invest.

    Value investing guru Benjamin Graham once quipped that “in the short term the stock market is a voting machine” that measures the popularity of companies and the sentiment of investors, whereas in “the long term it is a weighing machine” that measures each company’s fundamentals and intrinsic value.

    Time in the market works because it takes this ‘guess the market bottom’ element out of the equation. By focusing on the long term, it’s easier to ignore the volatility of markets. Sure, it’s still scary watching the value of your share portfolio fall from time to time.

    Time in the market is really about harnessing the power of compound interest. Compounding is the best thing about investing. Albert Einstein once said “Compound interest is the most powerful force in the universe. Compound interest is the 8th wonder of the world. He who understands it, earns it, he who doesn’t, pays it.”

    With compounding, your money accumulates a lot faster because the interest is calculated in regular intervals and you earn interest on top of interest. Compounding is usually what makes investors like billionaire investor Warren Buffett wealthy. If you are able to achieve a consistently high annual rate of return over the long term, building wealth is almost inevitable. And Buffett has never tried to time a market in his life.

    But pushing and pulling your money in and out of the market stymies the compounding process. And all it takes is one massive mistime to end up back at square one given the fact that market can never be timed. Investor Peter Lynch said it best: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.”

    Compounding plays a pivotal role in growing your wealth. When using compounding, the results will be small at the start but over time, your wealth will accumulate fast. Warren Buffet is known to make the majority of his wealth later in his adult life and this is due to the compounding interest effect on his assets and invested capital.

    Missing the best days

    Timing the markets involves trying to second-guess the ups and downs, with the hope that you will buy when prices are low and sell when they are high. This can be lucrative if you get it right consistently, but this is very difficult to do and getting it wrong means locking in losses and missing out on gains.

    Not only is timing the market difficult to get right, it also poses the risk of missing the ‘good’ days when share prices increase significantly. Historically, many of the best days for the stock markets have occurred during periods of extreme volatility.

    Instead of trying to time the market, spending time in the market is more likely to give you better returns over the long term. It is best to base your investment decisions on the long-term fundamentals rather than short-term market noise and volatility.

    Value of $10,000 investment in the S&P 500 in 1980

    Source: Ned Davis Research, 12/31/1979-7/1/2020.

    This chart uses a series of bars to show that from the end of 1979 until July 1, 2020, a $10,000 investment would have been worth $860,900 if invested the entire period. Missing just the 10 best days during that period would reduce the value by more than half, to $383,400.

    Anybody who pulls money out in the early stages of a volatile period could miss these good days, as well as potentially locking in some losses. For instance, between May 2008 and February 2009 in the depths of the global financial crisis the MSCI World index dropped by -30.4%. By the end of 2009 it had bounced back +40.8%.

    References:

    1. https://www.edwardjones.com/us-en/market-news-insights/guidance-perspective/benefits-investing-stock
    2. https://www.fa-mag.com/news/retirees-are-leading-precarious-financial-lives-42426.html
    3. https://www.tilney.co.uk/news/it-s-about-time-in-the-markets-not-timing-the-markets
    4. https://www.fool.com.au/2020/10/06/does-time-in-the-market-really-beat-timing-the-market/
    5. https://www.fool.com.au/definitions/compounding/

    Tax on the Sale of a House (Primary Residence)

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    If you sell your home for a profit, some of the capital gain could be taxable. Capital gains are the profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income.

    The IRS and many states assess capital gains taxes on the difference (profit) between what you pay for an asset — your cost basis — and what you sell it for. Capital gains taxes can apply to investments, such as stocks or bonds, and tangible assets like cars, boats and real estate.

    To minimize your tax burden, the IRS typically allows you to exclude up to:

    • $250,000 of capital gains on your primary residence if you’re single.
    • $500,000 of capital gains on real estate if you’re married and filing jointly.

    You will have to meet certain criteria in order to qualify for this exclusion, so be sure to review them before you sell. You might qualify for an exception, and adding the value of home improvements you’ve made could help.

    For example, if you bought a home 10 years ago for $200,000 and sold it today for $800,000, you’d make $600,000. If you’re married and filing jointly, $500,000 of that gain might not be subject to the capital gains tax (but $100,000 of the gain could be), according to NerdWallet.com. What rate you pay on the other $100,000 would depend in part on your income and your tax-filing status.

    The bad news about capital gains on real estate is that your $250,000 or $500,000 exclusion typically goes out the window, which means you pay tax on the whole gain, if any of these factors are true:

    • The house wasn’t your principal residence.
    • You owned the property for less than two years in the five-year period before you sold it.
    • You didn’t live in the house for at least two years in the five-year period before you sold it. (People who are disabled, and people in the military, Foreign Service or intelligence community can get a break on this part, though; see IRS Publication 523 for details.)
    • You already claimed the $250,000 or $500,000 exclusion on another home in the two-year period before the sale of this home.
    • You bought the house through a like-kind exchange (basically swapping one investment property for another, also known as a 1031 exchange) in the past five years.
    • You are subject to expatriate tax.

    If it turns out that all or part of the money you made on the sale of your house is taxable, you need to figure out what capital gains tax rate applies.

    • Short-term capital gains tax rates typically apply if you owned the asset for less than a year. The rate is equal to your ordinary income tax rate, also known as your tax bracket.
    • Long-term capital gains tax rates typically apply if you owned the asset for more than a year. The rates are much less onerous; many people qualify for a 0% tax rate. Everybody else pays either 15% or 20%. It depends on your filing status and income.

    References:

    1. https://www.nerdwallet.com/article/taxes/selling-home-capital-gains-tax

    Personal Debt in America

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    “Debt means enslavement to the past, no matter how much you want to plan well for the future and live according to your own standards today. Unless you’re free from the bondage of paying for your past, you can’t responsibly live in the present and plan for the future.” Tsh Oxenreider, Organized Simplicity: The Clutter-Free Approach to Intentional Living

    Debt stands stubbornly in the way of Americans’ financial goals and life dreams.  Moreover, debt is the biggest barrier to wealth creation and is the great destroyer of wealth. Debt and financial freedom are polar opposites – they never meet. Where there is debt, there cannot be wealth and financial freedom.

    In the U.S., adults aged 18+ report having an average of $29,800 in personal debt, exclusive of mortgages, according to the latest findings from Northwestern Mutual’s 2019 Planning & Progress Study. The research also revealed that 15% of Americans believe they’ll be in debt for the rest of their lives.

    While those numbers are staggering, they represent an improvement over last year when U.S. adults reported an average of $38,000 in personal debt. Still, the debt problem in America continues to run deep with wide-spread implications. The study found:

    • On average, over one-third (34%) of people’s monthly income goes toward paying off debt
    • 45% of Americans say debt makes them feel anxiety on at least a monthly basis
    • 35% report feeling guilt at least monthly as a result of the debt they’re carrying
    • One in five (20%) report that debt makes them feel physically ill at least once a month
    • One-fifth (20%) of U.S. adults are not sure how much debt they have
    • Over one in three Americans (34%) are unsure how much of their monthly income goes toward paying off their debt

    Among the generations, Gen X reported the highest levels of personal debt with $36,000 on average. They’re followed by Baby Boomers at $28,600; Millennials at $27,900; and Gen Z at $14,700.

    This is the latest round of findings from the 2019 Planning & Progress Study, an annual research project commissioned by Northwestern Mutual that explores Americans’ attitudes and behaviors towards money, financial decision-making, and factors impacting long-term financial security. This year marks the 10-year anniversary of the study.

    The Credit Card Crisis

    The leading sources of debt for most Americans is a tie between mortgages and credit cards, according to the study. An equal 22% of U.S. adults listed each as their main source of debt, more than double the next two highest sources — car loans (9%) and personal education loans (8%).

    Millennials cite credit card bills as their main source of debt (25%), while Gen Z notes personal education loans as theirs (20%). Both Gen Xers (30%) and Baby Boomers (28%) note mortgages as their leading source of debt, followed by credit card bills (at 24% and 18% respectively).

    Digging deeper into the numbers around credit card debt, the study found:

    • Nearly one-third of Americans (31%) are paying interest rates on their credit cards greater than 15%
    • Over 1 in 10 (12%) say they “always” pay only the minimum required payment, just covering the interest without paying down any principal
    • Close to one-fifth (19%) don’t know what their interest rate is, with Millennials being the most likely to report not knowing (22%)
    • 18% report having four or more credit cards, with Baby Boomers being more likely than other generations to have four or more (23%)

    According to the Federal Reserve Bank of New York, credit card debt has reached $868 billion in the United States, and delinquencies are on the rise.

    “Before you spend, earn. Before you invest, investigate. … Before you retire, save.” William A. Ward

    When you are in debt the clock works against you. Every morning when you wake—weekends, holidays, sick days, birthdays and work days—you are already behind. The mortgage, credit card, car loan, et cetera, all tacked on interest the second after midnight. Long before you rolled out of bed and poured your first cup of coffee you need to work to pay the interest before you have money for food, clothing, shelter or entertainment.

    In debt you are a slave; without debt you’re free.  Every day in debt you owe your master. Every day! He is a cruel, heartless master. When the clock ticks past midnight the interest for the day ahead is due.  Only those without debt and in possession of investment assets are free to live each day as they choose.

    Without debt you are free; without debt and with possessing of assets and wealth, each day is yours to use as you chose.

    References:

    1. https://news.northwesternmutual.com/planning-and-progress-2019
    2. https://wealthyaccountant.com/2018/04/12/the-greatest-secret-between-debt-and-wealth/