72% of Americans Are Stressed About Money – Here’s How to Break Free of It

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If you’re feeling stressed about money thanks to the Coronavirus pandemic and shutdown, you’re not alone.

72% of Americans report feeling stressed about money within the last month, according to a new survey by the American Psychological Association. It doesn’t help that 35% of Americans can’t last even one month on their savings, according to the July 2020 Retirement Confidence Index.

So how did we get here… and what can you do about it?

Among the many bits of wealth-killing conventional financial “wisdom” is the recommendation that you have an emergency fund equal to 3 to 6 months of your household expenses.

Almost every financial “expert” parrots this advice, even though millions of Americans were out of work for more than a year in the last major recession!

So here’s a 3-step plan to move towards a financially stress-free life…

Step #1: Start Working Towards a Safe and Liquid Emergency Fund Equal to Two Years of Your Household Expenses

[Read more…] “72% of Americans Are Stressed About Money – Here’s How to Break Free of It”

How to Be Financially Prepared for Any Emergency or Black Swan Event

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By definition, an “emergency” is an unexpected and difficult or dangerous situation which happens suddenly and requires quick action to deal with it.

The unexpected doesn’t wait around for you to get your act together. But does that mean you can’t be prepared for an emergency… even one as devastating as the coronavirus pandemic and lockdown?

Are you willing to play a little game of the imagination and find out?

What if you were forewarned two years ago that in March of 2020…

  • We’d be in the grips of a pandemic and there would be a shutdown of virtually the entire economy
  • Tens of millions of people would lose their jobs and you could be one of them. And many others would have their hours and pay cut
  • The government would step in and provide stimulus, but it could take a month or two or more until you receive it
  • Your charge card limits could be reduced or even canceled without warning
  • Stock market volatility would return with a vengeance and your plans for retirement could be upended for years or even a decade to come
  • People of any age could be debilitated or even die after being infected with the virus

If You Had Been Warned of This Two Years Ago, What Would You Have Done Differently?

[Read more…] “How to Be Financially Prepared for Any Emergency or Black Swan Event”

How to Avoid the Pitfalls of 401(k)s and IRAs: Pamela Yellen’s Interview on Beyond 50 Radio

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I was just interviewed on Beyond 50 Radio about the wealth-killing traps of 401(k)s and IRAs and how to avoid them.

When you listen to the replay of this interview by clicking on the play arrow below, you’ll discover:

  • How the pandemic has exposed the shortcomings of traditional retirement accounts
  • Why the 401(k) employer match isn’t really “free money” at all
  • Why you should never let your employer choose where to invest your 401(k) contribution – most employers now automatically invest your money, and almost no one questions it!
  • Why you’re likely to retire in the highest tax brackets of your life – and how to legally slash your tax bill
  • How the fees hidden in 401(k)s can devour 40% or more of your hard-earned money
  • The critical difference between saving and investing for retirement
  • Why you need an emergency fund equal to two years of your household expenses
  • How to have quick and easy access to the money you need to weather the challenges life unexpectedly throws at you – and how you can get the exact same growth on that money as though you never touched it
  • The real reason many financial representatives will steer you away from the Bank On Yourself strategy
  • What the Bank On Yourself strategy is in a nutshell

You can listen to the interview by pressing the play arrow below…

[Read more…] “How to Avoid the Pitfalls of 401(k)s and IRAs: Pamela Yellen’s Interview on Beyond 50 Radio”

The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile

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The longest U.S. government shutdown in history laid bare an uncomfortable truth: Americans aren’t saving enough and the majority of us have no rainy-day fund to protect us when the inevitable you-know-what hits the fan.

More than 70% (!) of all types of employees at all income levels surveyed live paycheck to paycheck and said they’d have difficulty meeting their financial obligations if their paycheck were delayed for just one week! That’s according to the 2018 “Getting Paid in America” Survey by the American Payroll Association.

This explains why, after missing just one or two paychecks, we heard so many heart-breaking stories from government workers who weren’t being paid or were furloughed. For example… [Read more…] “The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile”

The Stock Market Never Goes Down Any More? (Really?!?)

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What was until recently an unloved bull market has now reached the point of “euphoria,” and investors are “having a hard time imagining a decline,” according to Morgan Stanley.

After all, what’s not to love about a bull market that has only two directions – up… and up faster?

It’s being called a “market melt-up,” and the main fear people now have is of missing out.

Those caught up in the euphoria – and the fear of missing out – might want to consider the following:

  • The S&P 500 is trading at 2.3 times its companies’ sales – a smidgen below its dot-com peak
  • Price-earnings ratios have only been higher for 1% of the stock index’s history
  • The cyclically adjusted price-earnings ratio is higher than before the crash of 1929, and higher than at any moment in history except right before the dot-com crash

Those of us who experienced the pain of the dot-com meltdown in 2002 and the financial crash of 2008 hope that the market will never become that irrationally exuberant again.

Back then, people justified their exuberance with the mantra that “this time it’s different.” [Read more…] “The Stock Market Never Goes Down Any More? (Really?!?)”

Fed says most Americans “extraordinarily vulnerable” to financial setbacks

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A comment last week by Federal Reserve Chair Janet Yellen (read Is Pamela Yellen Related to Janet Yellen?) sent my inquiring mind down an investigative rabbit hole. (Update: Janet Yellen was replaced by Jerome Powell in January, 2018.)

Janet Yellen and Pamela Yellen

Janet stated that the Great Recession showed that a large number of American families are “extraordinarily vulnerable” to financial setbacks because they have few financial assets to fall back on when the you-know-what hits the fan.

Janet Yellen and Pamela Yellen

She cited a new study showing that an unexpected expense of just $400 would force the majority of American families to borrow money or to have to sell something to cover it.

Just $400! Yikes! What is that? A minor car or appliance repair or a small medical or dental expense?

That stat came from a survey released by the Federal Reserve this summer that was so ignored by the media that it even escaped my notice.

When I finally tracked down that Federal Reserve survey (Report on the Economic Well-Being of U.S. Households in 2013), I could see why the media wanted to keep it under wraps.

Here are a few startling revelations from this Report…

[Read more…] “Fed says most Americans “extraordinarily vulnerable” to financial setbacks”