You’ve no doubt heard that the stock market just became the longest bull market in history. The stock market has been roughly going up for about nine years without a decline of more than 20 percent (which is how we define the end of a bull market). With the market going up for so long, does that mean the risks of another crash are rising? If so, should you do anything about it? That depends on where you are in your financial life. First, just because the market has gone up for a number of years, doesn’t mean it has to come down. We do periodically have bear markets. Historically, they have occurred every seven to 10 years. Generally, bear markets start when something derails economic growth, and right now, things look Now, any one of these things could change quickly, and when they do change, market prices can fall dramatically. A bear market can last anywhere from a few months to five or more years. It took four years for the stock market to recover from the financial … [Read more...] about Should you be concerned about record long bull market?
Northstar financial advisors
It’s back to school month, and many parents will be busy getting their kids ready to head off to class. But one class your child probably isn’t taking is personal finance. Most young people go their entire academic careers and never take a class in the fundamentals of personal finance. According to the 2018 Survey of the States, only 17 states require any sort of personal finance classes for high school students, and colleges generally require none. That leaves the financial literacy teaching and advocacy mostly to parents. Given the struggles most young adults have with finances, it’s worthwhile to help your kids understand the fundamentals. Here are the top four things I think parents should help their young adults understand: Budgets. People in general hate budgets because they impose discipline and limitations. But they are essential to personal financial security. Every young person should understand how to track their income and expenses on a monthly and annual … [Read more...] about Home school your kids about personal finance
It’s summer vacation time, and everyone likes to go on a trip. But what constitutes a vacation has Now, vacations are often an excursion to Belize, a week in Hawaii, or a Disney cruise to the Over the years, I have worked with folks who think they have plenty of room in their budgets to save, but then I look at how much they are saving, and the money isn’t there. So where’s the gap? Often, especially when they’re younger, it’s the result of things like vacations. People forget how much they spend on them and how much it removes from their budget. A basic vacation that requires flights, hotel and some guided entertainment can easily cost $5,000 to $10,000 for a week, depending on how many family members you have. For many folks, that’s equal to or more than they are saving in their 401(k) each year. Now if you take two of those vacations a year, you have spent a pretty good chunk of your retirement savings on vacations. If, for example, you find that … [Read more...] about Is Summer Vacation Ruining Your 401(k)?
It’s college graduation time, and thousands of young adults are heading out into the world with their diplomas in hand and little idea about how to handle their personal finances. Having a sound understanding of personal finance is a fundamental building block of being an adult. Properly managing your personal finances really comes down to one simple rule: live the life you’ve earned, not the one you think you deserve. I realize it’s not that easy when you’re bombarded with marketing about what you deserve. The new car, exciting vacations, cool restaurants, updates to your wardrobe, your friend’s destination wedding, a new iPhone, and the list goes on. Marketers don’t mention whether you have earned the ability to purchase any of these things. They argue that if you can’t buy it, then finance it. And that’s the slippery slope to living a life you haven’t earned. Then you get into debt, argue with your spouse or partner, and get … [Read more...] about A simple, but not easy, financial game plan for recent college graduates
If you’re a follower of the financial news, you’ve likely seen more stories recently about rising interest rates. You might wonder, why are investors so concerned about them? The main reason is that rising rates make just about everything harder to do in finance. That means they have the potential to slow down the economy. One of the main benchmarks for interest rates is the 10-year U.S. Treasury bond. The interest rate on that bond has moved from a low of about 1.4 percent a few years ago to around 3 percent today. That’s more than a 200 percent increase, and it’s working its way through the economy. The easiest way to understand the impact of rising rates is to consider how interest rates impact you as a consumer. Let’s say you want to buy a new car that costs $30,000. If the interest rate is 0 percent and you can borrow money for five years, your payment is $500 a month. But if interest rates on car loans rise to 5 percent, then that new car costs you … [Read more...] about Interest rates are rising and markets are unsteady. What should you do about it as an investor?