Insurance – TGIF 2 Minutes with Kerrie Debbs, CFP

The Million Dollar House Down the Street

What happens when the house down the street suddenly sells for over $1 million dollars?! (And all the other very nice homes on the street were purchased for $550,000 or less within the past 10 years or so, maybe $700k for a couple of more recent sales?)

A couple of possible answers with explanation:

Real estate in desirable areas is still white hot. And while areas in the US northeast, California, and Florida (among other high-priced areas for homes) commonly see homes priced in the $3 million to $5 million+ range, homes nationally sell for an average of much less. Depending on which source or what inputs (new or existing, list price, sales price, or market price, etc.) the average home sale price in the US is between $391,000 and $507,000*. Therefore, in most neighborhoods when a home suddenly sells for $1.1 million (or $2.1 million) dollars it is consequential for the local market, especially the neighbors!

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The Car Buying Conundrum

From the TGIF 2 Minutes Archives… with an update on buying cars for kids.

There are few things as exciting as getting a new car: the “new car smell”, the test drive, sound system, sunroof, heated seats… the feeling of “everything is new”. And these days cars are advanced computers on wheels and can be very cool.

With that said (back in mid-2021) yours truly bought a new car – the first new car in 15 years! The 2005 (Certified Pre-Owned) B-mer went 180k miles and could have gone another 100k but with too much maintenance. It was time for a new vehicle. But what new car to buy? New or used? Sedan or SUV? Buy or lease? And the cost: go expensive or go reasonable in cost?

Any major purchase – housing, appliances, transportation, kids’ education, family vacations, etc. – needs to be evaluated both from a financial and emotional perspective. The emotional side is fairly obvious, but the financial side has both obvious and not-so-obvious factors. Cash flow considerations are obvious and not-so-obvious too.

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Crypto Quarterly – 1Q 2023

It turns out that summarizing the current status of cryptocurrency following the past several months is much more complicated than it looks. If one event were highlighted, it would be the November 2022 fall of FTX and arrest of its founder who was “popularly” referred to by his three initials, SBF.

As early as February 2022 during the “Crypto Bowl”, or Superbowl LVI, there were clues of cryptocurrency irrational exuberance. Since then, major cracks have revealed themselves in the crypto industry and beyond.

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Failure of a Bank

Quick trivia: Who is famous for the saying, “It’s only when the tide goes out that you learn who’s been swimming naked”?? Ironically just last week Warren Buffett’s 58th annual “Letter to Shareholders” was reviewed by TGIF 2 Minutes, and, yes, Warren E. Buffett first famously uttered these words back in 1992.

The timing of his utterance was, as CEO of the insurance conglomerate Berkshire Hathaway, just following Hurricane Andrew when the inadequacies of the insurance industry were negatively exposed. Buffett was describing “the rosy appearances that can mask financial recklessness until the good times end.”*

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Murphy’s Law, YOLO, & Cash

From the Archives of TGIF 2 Minutes – with an update on cash.

One of the most critical factors of long-term personal financial success is…. guess:

A) The markets
B) Spending
C) Interest rates
D) Stock selection
E) Income level

And the answer is… SPENDING. This fact is why a truly competent financial planner will spend the most time on discussing spending, both today and future projected. Spending can also be expressed as “lifestyle” or “the basics of food, shelter, and transportation plus lifestyle”.

However, the inevitable will happen. And YOLO (“You Only Live Once”) will creep in.

The most basic factor that can soften a huge spending blow is CASH savings

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Inflation: Chicken or Egg? Or China?

Alert: “Getting into the weeds” here in a brief discussion on inflation and why it may not be easy to solve quickly. Bullet points below may help.

There is a bit of a “chicken or the egg” scenario when it comes to inflation.

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Caring For an Aging Friend 2.0

This topic has become far more complicated post-coronavirus.

Back in 2017, 2018 & 2020 TGIF 2 Minutes explored “Caring For Aging Parents”… which then became “Caring For an Aging Friend”. Whether caring for a family member or friend, finding and putting into action Care (with a capital “C”) may be more stressful than ever – both for Care-receiver and Care-giver.

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Beware of Money Scams

Just in the past week, two friends notified me they had been party to a money scam or potential money-related email hack. Going back further in time, there are numerous instances where a client or friend has made it known they were, regrettably, on the losing side of a money-related scam.

Look no further than this week’s news on a larger scale: due to recent, repeated money-request scams via the online payments network Zelle, major banks and financial institutions including JP Morgan, Bank of America, Capital One, and PNC Financial announced talks to reimburse scammed Zelle customers (Zelle is an online payments network in which various major banks participate).

All of these events prove that money-related scams are no longer isolated incidents.

Even intelligent people can accidentally find themselves in the midst of these gift card scams or urgent calls for money from what seems to be the IRS, the FTC (Federal Trade Commission), or Social Security.

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Hurricane Season

Hurricanes can come in various forms. Whether they be the recent Ian and Nicole or the staggering Sandy of 2012 they tend to strike in the fall season. Also, in the fall come U.S. elections and historically a bit of stock market volatility. Like the weather, markets are anything but predictable. Elections can lend themselves to predictability but there are always surprises too.

This year has had a mix of all these factors. Currently amidst high inflation the stock and bond markets are trying to digest an environment of much higher and increasing interest rates – exactly how much higher is an unknown. Also unknown is the post-election reality of future policy making in Washington, DC. Interest rates are “driving the economic bus” for the time being, and government policy making will be an ongoing force running alongside. Both will affect the markets in positive and negative ways over time.

Getting through hurricane season can be a relief – but only if it is known that the storm is over. Is the storm over or getting close to being over, and where does all this leave investors and savers?

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Alexa, Remind Mom to…

Thanks to a couple of smart and very caring friends of mine for today’s quick post. Everyone with a mother, mother-in-law (MIL) or even a grandmother will want to read on.

We cannot ever have enough resources when a parent or grandparent needs care or help getting around. Women tend to live longer than men, so Mom and Grandma are the ones who need the most help in their later years. Family members provide the highest percentage of help but often get in over their heads. The next step becomes researching in-home care giving – which has become exorbitantly expensive while still necessary.

Planning for care – and the cost of care – now will make it more manageable down the line.

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