Bull market’s largest hopes for 2022 relaxation with millennial millionaires

If the millennial and Gen Z investing generations’ biggest, boldest bull market calls are best represented by the star turn of ARK Funds’ Cathie Wood, her funds’ struggles in 2021 are a microcosm of where risk-on investing runs into the reality of a market that, at least in the short-term, can’t always go gangbusters — or even up.

Americans born into the millennial and Gen Z generations came of age as investors — and some millennials, now in their fourth decade of life, also into considerable wealth — during a period of extremely muted inflation and a decade-plus bull market. If they have never known a Cathie Wood stock call that can go south, inflation as the No. 1 topic of concern for the economy is a new experience for them as well. And fears of an inflationary environment the U.S. has not seen since the 70s and early 80s isn’t only new to them in the form of rising prices. The low-inflation world contributed to a high return world for growth stocks that is now being threatened, and that leads to a question about whether young investors have enough experience with the inevitable ups and downs of the stock market.

Are young investors prepared to see double-digit equity market gains as the exception, rather than the rule, for the S&P 500?

Not yet, according to a recent survey of millionaire investors conducted by CNBC.

The bi-annual CNBC Millionaire Survey finds the youngest among America’s wealthy investors much more bullish and aggressive headed into 2022 than their investing peers from older generations. While the overall outlook from millionaires on the economy and stock market is “barely bullish,” according to the survey data, millennials see major potential for stocks gains and continued interest in risk-on trades including cryptocurrencies.

Covid ended the longest bull market in history, but stocks picked right back up and have since posted extraordinary gains in what amounts to a 13-year run for U.S. equities. Even if it doesn’t end, can this level of market returns last?

Drew Angerer | Getty Images

By the numbers:

  • 48% of millennials expect to increase their crypto investments in the next 12 months.
  • For many, that is a doubling down on crypto, as the survey finds more than half of the millennial millionaires said at least half of their wealth is in crypto.
  • 52% of millennials think the S&P 500 will be up by at least 10% next year (39% are even more bullish, expecting those gains to be above 15%). This is more than triple any other generation’s expectation for stock gains over the next 12 months.
  • 61% of millennials believe the economy will be much stronger next year; in all 93% believe the economy will be stronger, versus 41 percent for all millionaires.

The CNBC Millionaire Survey was conducted by Spectrem Group and surveyed 750 Americans with investable assets of $1 million or more. Caveat: Millennials are by far the smallest demographic sample in the survey. With the least time among generations to accumulate wealth, it follows there are many more Gen X, baby boomer and World War II millionaires in the data to accurately map the millionaire population of the U.S. The CNBC Millionaire Survey presents a snapshot of millennial millionaires, but it is only 31 out of the 750 wealthy Americans surveyed.

“Millennials are not a huge sample,” said Tom Wynn, director of research at Spectrem Group. “It’s enough to get some direction, but not huge, and we find that always in our surveys, they are way out there. I don’t know whether they are idealistic or just have an unrealistic view of things, but they are always extremely different,” he said.

And this is no different for investing than it is for taxes, or even religion.

Inflation, the Fed, stocks, and “stonks”

Some of the differences between millennials and the rest of the survey audience are stark. Inflation is the No. 1 economic concern among millionaires in the survey, while the millennial millionaire subset isn’t worried about it at all. And that finding highlights the generational nuances in the data and the question of whether younger investors are prepared for what inflation — and a Fed worried about inflation — can do to the stock market.

Lew Altfest, CEO of Altfest Personal Wealth Management, said most investors do think that in a Fed rate tightening cycle there is a greater chance of a correction next year, and overall, a lower return from the market.

Fed rate hike cycles haven’t been disastrous, but they have not been very good for stocks. Across the 17 previous Fed tightening cycles back to World War II, the Dow Jones Industrial Average and S&P 500 Index have struggled to post gains, according to CFRA Research. “Minor price increases for the equity market,” according to CFRA chief investment strategist Sam Stovall. In the 12-month period once the Fed starts raising rates at least three times, the S&P 500 rose a median of approximately 3.5%, and whether it gained or lost in any single period was little better than a coin flip: stocks gained in price 56% of the time.

The 1970s period of inflation was known as a “lost decade” for stocks because the compound annual growth rate in the S&P 500 was 1.6% — the index posted a 5.8% total return, but that is including dividends being reinvested and accounting for over 4% of the gain.

“They’re not thinking of double-digit returns and they are hoping they don’t get retribution for higher stock market prices,” Altfest said, referring to the price-to-earnings ratios which value-oriented investors such as himself find difficult to justify. “Value will have a run … stocks are going to go back to what are reasonable rates,” he said. “The question is the timing.”

A big millennial mistake and the market

There is some merit to the discussion about younger investors and inflation, says Doug Boneparth, president of Bone Fide Wealth, a wealth advisory firm, and a millennial himself. “The generation has not experienced an inflationary environment, and a boomer will be quick to point to 70s and 80s. When I talk to my own dad he doesn’t necessarily have the best memories of the 70s and 80s from an investment standpoint. Even myself, as an older millennial, I can’t recall investing or living through a non low-interest rate environment, so there’s something to say there.”

But this doesn’t mean he thinks 1970s-style inflation is about to repeat itself, and millennials may live in a world which they know is less likely to repeat that experience. “Anyone saying it’s going to be the 70s or 80s all over again, I’m not buying it. It’s a different world,” Boneparth said. “You didn’t have the internet or Amazon bringing goods to your door in 48 hours. It’s hard for young people to relate to what they do know historically about high inflation regimes,” he added.

Stock picks and investing trends from CNBC Pro:

Even though millennials did not cite inflation as a risk to the economy, millennials in the survey were almost evenly split with 45% saying inflation would be temporary and 48% saying it would last a long time. This split within the generation itself brings to mind a point Boneparth says needs to be made when we start talking about “millennials”: the idea that millennials are a monolithic generation is a mistake.

“There are 80 million millennials and some can be viewed as just becoming adults, to full-fledged adults with children,” said Boneparth, who is closer to 40 than 20 and a homeowner with children.

It is an even bigger mistake, he says, when people assume that all millennials believe the stock market will only go up.

“It is a pretty big range and does mean some have been through different market cycles,” Boneparth said. “I’m old enough to know what a bad market looks like, in 2008-2009. For older millennials, the feelings and thoughts are alive and well. They shaped the older end of the millennial generation,” he said.

Though for millennials and Gen Z investors in their 20s who were just becoming teenagers during the Great Recession, recent performance could lend itself to overconfidence in the stock market. “And that could shape how they are investing their money,” Boneparth said. “I don’t think that stigma of 08-09 will ever escape my mind at 37. But you almost certainly get a ‘stocks are stonks’ often out of Gen Z, who are all about everything in a good way.”

Long-term returns and low returns

Market experts are worried that the extraordinary returns stocks have produced in recent years cannot be sustained. A recent survey of 400 investment professionals conducted by CNBC finds more than half (55%) expecting the S&P to return less than 10% next year. And more think the index will either be flat or down than up by more than 10%.

Most millionaires taking the CNBC Millionaire Survey believe their assets will be the same at year-end 2022 and they anticipate a rate of return between 4%-5% in 2022 — though since many are retired, they have a much more conservative asset allocation. Millennials believe their rate of return will be higher, with 39% predicting 10%-plus in 2022, and another 32% expecting at least 6% to 10% from their investments.

Every year, the major fund companies, such as Vanguard Group, release their investment return assumptions, and in recent years, the predictions for a lower return world haven’t been proven correct. For the record, Vanguard’s 2022 outlook says U.S. stocks are more overvalued than any time since the dotcom bubble, but there is no clear correlation in the historical data saying that inflation and rising rates will necessarily cause an abrupt end to the valuation momentum. “Our outlook calls not for a lost decade for U.S. stocks, as some fear, but for a lower-return one,” Vanguard concluded.

“It’s always best to be as accurate as you can, but since being accurate is hardest thing to do, the next best thing is to overdeliver,” said Mitch Goldberg, president of investment advisory firm ClientFirst Strategy. “In next 10 years, we expect a positive return of anywhere from 5%-8% annualized. I’m comfortable saying that, but I’m not comfortable saying next year only expect 5%.” 

There is an important distinction in how investors think about the rate of return. A diversified portfolio is not a 100% stock portfolio. When firms assume a 4% to 6% annual rate of return, that is assuming a mix of stocks and bonds, even if stocks are the majority. The S&P 500 has averaged an annual return of 9% since World War II, according to CFRA.

Boneparth says regardless of how well the stock market has been doing, issuing conservative return assumptions for clients is the proper communication to make annually. When he does forward-looking returns, he pegs a 5.3% return on a risk-adjusted basis for an 80-20 equity-bond portfolio. “When the market keeps pumping out returns, you have to go back to the 60 to 80 years history,” he said. History is only “wrong” right now, he said, because of the microenvironment of the past 10 years, from recession to expansion and Covid and through it all, multiple phases of monetary stimulus.

“Professionally speaking, you want to temper expectations about what returns can look like,” he said. “Every year S&P predictions are wrong, so millennials may be thinking ‘their guess is as good as mine, but when I am doing planning, I am being conservative in assumptions on rates of return in market portfolios,” Boneparth said. “Because I am trying to build a margin of safety, so if you are up 10%, you are way ahead of the curve.”

Younger investors have more time than any other generation to accumulate wealth, and tied to that, more reason than any other generation to remain aggressive in their portfolio allocations. This doesn’t mean their short-term optimism will be proven right, but staying in the market with a significant allocation to equities over the long-term is the right decision, as long as short-term success in the market does not breed hubris.

How to become a great investor

“Ask any fabulously successful entrepreneur how long it took them to become a competent investor and they will say five years; incredibly, it takes five years before you get your sea legs,” said Michael Sonnenfeldt, founder and chairman of Tiger 21, an investing network for the wealthy. He learned the hard way that early success in stock market investing does not ensure continued success. “The worst thing that ever happened to me in college was I bought options as my first investment and they doubled or tripled. That was the most expensive financial lesson I ever had because it completely inflated my confidence,” he said. “I had to lose many times what I made to understand those bets I made were luck and nothing more than luck.” 

Yet the current world is one in which investors have been forced, by economic and market conditions, to learn that equities are the way to generate market wealth. A generation ago, when there were much higher interest rates, debt investments could do a better job of helping a balanced portfolio beat inflation.

“In the low interest rate environment, a subset of people are learning how to drive returns through equity, whether private or direct or public,” Sonnenfeldt said. Even with rates set to rise in 2022, they will remain at what are very low levels compared to history. “They really have to work those assets and that may be part of what’s going on, people learning how to work their assets to beat inflation will have a very different view than we had a generation ago,” he added.

One finding that is consistent across members of the Tiger 21 affluent investing network is less reliance on the stock market for returns. In the past few years, venture capital has become much more prevalent among members and, in general, stocks do not make up the majority of an investor’s portfolio. Even as younger investors have high hopes for the S&P 500 next year, and generate a significant portion of their wealth from cryptocurrency, the CNBC Millionaire Survey did find their portfolios to be much more diversified than older investor peers — who tend to stick more to a traditional equities, fixed income and cash mix — millennial allocations to international, alternative assets and private markets are similar to public stock market weightings.

“My returns won’t mirror public market returns, and if I didn’t know any better I would say, geez, I should be unhappy,” Sonnenfeldt said. “But if I am north of 10% and still dramatically less than the public markets, it could be an incredible year, knowing no matter what happens in the market I may duplicate those returns again.”

Whether the S&P 500 repeats its nearly 30% gain of 2021, or reverts to its long-term annualized average of 9% in 2022 — or takes it on the chin — being realistic about the long-term, and having a plan for it, is more important than being remembered as the one who got next year’s S&P 500 call right. 

Preserving wealth, while covering living expenses and taxes, is the No. 1 goal, and that requires a realistic understanding of what can be earned from investments year in and year out. And over a longer period of time, with more time in the market, the best young investors will learn to adjust expenses to that realism.

“Optimism and realism are not the same thing, and many people are optimistic but not every realistic,” Sonnenfeldt said.

Millennial Cash: Beat your summer time ‘revenge procuring’ debt | Existence

List your debts using a spreadsheet, pencil and paper, or debt settlement app. Enter the balance, the interest rate and the minimum monthly payment. Make sure you consider all forms of debt, such as: B. Buy now and pay for loans later.

Then, look at your income and expenses to see how much money you are putting on debt and where you can cut expenses. For example, if you’re spending more on restaurants than you did six months ago, try reducing that to free up cash to pay off debt.

Next, choose a strategy for the payout. Here are a few common tactics:

– SCHULDSSCHNEEBALL: With that Debt snowballfocus your debt settlement energy on the smallest balance first, while making minimal payments for the rest. Once the smallest debt is dismissed, roll the amount you paid for it to the next smallest debt. As you pay off more debt, the payment amount grows like a snowball until you are out of debt.

– DEBT LAWINS: With this method, you settle the debt with the highest interest rate first. Then, similar to the debt snowball method, once it’s paid off, cascade the payment with the next highest interest rate on your debt.

Millennial Cash: Be able to work for Labor Day bargains

This Labor Day, some Americans will have extra cash on hand for holiday weekend shopping.

Some people padded their savings accounts by staying home during the pandemic. And some set aside the advance payments of the child tax credit they received, points out Amna Kirmani, marketing professor at the University of Maryland’s Robert H. Smith School of Business.

But consumers who are ready to spend will face the retail impacts of the continuing pandemic, supply chain interruptions and inflation.

Labor Day savings may not be as easy to spot this year, either online or in person. In fact, for some product categories, there might not be discounts at all.

Here’s what you need to know about the sales — and why you may have to work a little harder to find what you’re looking for on Sept. 6.

RETAIL FACES TOUGH SLOG

Ramping up production after last year’s COVID-19 shutdowns has led to ripple effects in the retail world.

“We have consumers who are believed to have quite a bit of money in their pockets, but the retailers do not have a lot of product,” says Tom Arnold , professor of finance at the University of Richmond’s Robins School of Business in Virginia.

“The supply chain issues are very real in that the retailers are having a difficult time getting product, and when they do get product, they are facing a higher cost for the product.”

That means some retailers are struggling just to fill their shelves. And if these stores don’t have much inventory to sell in the first place, they won’t be as motivated to discount the items they do have in stock.

Here’s how a retailer might be thinking about inventory: “In past years, I could have 100 units, thinking I could sell 50 at regular price, the next 30 at 25% off and then clear out with half-price,” Arnold says. “Well, this year I might only have 50 units and I might be able to sell all of them at regular price.”

SALE CATEGORIES ARE IN FLUX

As a result, Labor Day staples like car sales, appliance deals and mattress markdowns might not be a given in 2021 — or, not as impressive.

Products in low supply aren’t expected to be discounted much, if at all. That’s the case with some cars , Kirmani predicts.

You will, however, be able to find deep discounts on summer-related merchandise. Retailers will be motivated to unload whatever warm-weather inventory they have left over before consumers transition to fall. You can also expect clothing deals, as Labor Day falls within the back-to-school shopping season.

Promotions are expected to take place at big-box retailers, home improvement outlets, department stores and tech giants. For example, Wayfair, Best Buy and Macy’s have been known to offer Labor Day savings.

But, again, prepare for some of the discount levels to be modest.

“I think as far as Labor Day sales, they’re not going to be as good as they have been in previous years,” Arnold says.

SHOPPERS HAVE TO WORK FOR DEALS

If you choose to shop over Labor Day weekend despite the challenges, here’s how to maximize your money and increase your chances of finding a good deal:

— COMPARE PRICES. Comparison shopping on the internet is the best option for finding the lowest price, according to Kirmani. Seek out deal comparison sites and sales roundups that do the homework for you, or start monitoring prices yourself before Labor Day so you can judge the value of a sale.

— CHOOSE YOUR MODE OF SHOPPING. Browsing from home gives you the flexibility to visit countless sales in a short period of time — and the peace of mind of staying safe during the pandemic. But if you’re worried an item will be backordered, you may want to consider going in person instead to ensure you get what you want. Arnold anticipates the frustration of shipping delays could drive some shoppers to the store.

— WEIGH NEEDS VERSUS WANTS. Finally, consider how badly you need a particular item, Arnold suggests. If you need it right now, get it where it’s available. If you want it but could go without for a few months, try holding off until some of the supply chain issues are under control. Black Friday sales — which Kirmani says are historically better than Labor Day — will be coming in November. But it’s difficult to predict what those sales will look like this year.

The bottom line? Arnold says you can find some “good” deals this Labor Day, but they won’t be “fantastic.”

____________________________________

This column was provided to The Associated Press by the personal finance website NerdWallet. Courtney Jespersen is a writer at NerdWallet. Email: courtney@nerdwallet.com. Twitter: @courtneynerd.

RELATED LINK:

NerdWallet: The 2021 guide to maximizing your money https://bit.ly/nerdwallet-2021-guide

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5 Methods Millennial Cash Honey Is Utilizing to Attain Early Retirement

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Catie T. who bears the name Millennial money honey on her various social media platforms plans to retire at 35. At 29, according to insider documents, she is only six years away from her goal. And about 30 years ahead of most other people their age.

Catie is part of the FIRE (financial independence / early retirement) community; It’s a movement that came from a 1992 book entitled “Your Money, Your Life” by Vicki Robin and Joe Dominguez.

Corresponding Investopedia, Millennials – who were kids when the book was published – are increasingly the generation embracing FIRE. It is characterized by aggressive savings and investment practices that allow participants to be unemployed before the traditional age of 65.

“I’ve just lived the average millennial life in LA, hanging out with my friends, doing my hair and trying to keep up with the latest fashion trends,” said Catie of her lifestyle before embarking on her FIRE trip.

But at 26, she was at a point in her career where she was making enough money to build decent savings and start thinking more seriously about her financial future.

“I was like, ‘When people are investing, I know I should be investing. I should look at this and find out,” she says. She started doing personal finance research and eventually learned about the FIRE ideology. “I came in headfirst,” she says.

It recently reached an impressive milestone which is known as “Coast FIRE. “Assuming $ 375,000 deposited in various accounts regular market trends, her savings will grow so much that she won’t have to invest another dollar to become financially independent at 65. In this way, it can “expire” into retirement without any problems.

While this is a great accomplishment and an important step in her journey, Catie plans to continue saving and investing at her current rates so she can meet her retirement goal – $ 1.5 million saved and invested – by 35 .

As she gets closer to her ultimate goal of retiring at 35, she shares her journey and the strategies she has implemented in hopes of inspiring others in financial independence as well. That’s how she got this far so quickly.

How she set her retirement goal

To find out how much she needed to save, “I estimated my yearly spending to be about $ 30,000 a year, and then I doubled it just to allow for a margin of safety,” she explains.

For example, suppose she needs $ 60,000 for each year of retirement, she has it 4% rule to determine their target amount for the annuity portfolio. An easy way to work out this number is to multiply your desired annual income by 25, which Catie did and gave her $ 1.5 million.

“It would only be $ 750,000 for me, but I’m just on the nervous and cautious side,” she said. Doubling their annual amount provides them with convenience and a safety net.

1. She tracked – and changed – her spending habits

Before making any major lifestyle changes, she tracked her expenses for a few months to get a better picture of her financial condition. “I didn’t even know where my money was going beforehand,” she explains.

After that, she was able to be more strategic with her decisions. It’s about figuring out those “little tweaks,” she says.

For example, Catie quickly found that she was spending more money on personal hygiene and aesthetic services than she wanted. Between an Equinox membership of $ 230 a month, an eyelash appointment for $ 30 every three weeks, and about $ 600 twice a year for hair treatments, she found she got about $ 1,000 every three months for them Purchases made.

So she got creative about how to minimize it. For starters, she let her hair grow back to its natural color instead of keeping a pale blonde hue that she had before. She quit Equinox, stopped having her eyelashes done, and gave up the fancy hair salon in favor of a local ad with a $ 15 cut.

2. She has increased her income

A graphic designer by profession, she has taken a strategic career move to grow her income quickly and save more money by default. Before FIRE, Catie worked for an advertising agency and Industry known for lower wages.

“I was able to steer my same skills toward a higher paying industry,” she says. Now she works as a graphic designer for a technology company. “I didn’t know how much more lucrative it was to be a designer in this field, even though the skills are exactly the same.”

It wasn’t much of a linchpin, there was no need to go back to school or invest in additional education, but “it was about being creative about how I could increase my income,” she says.

3. She invests her money in various investment accounts

While a big aspect of being successful at FIRE is cutting costs and saving aggressively, arguably the most important part is investing that money.

Due to inflation, for most people, the path to retirement involves at least some form of investment, be it through a 401 (k), 403 (b), IRA, or other selected account. The same goes for those who want to achieve FIRE.

Catie had saved about $ 30,000 prior to her FIRE trip, which she invested in a wealth front

Robo-Advisor
Account. Now the majority of their income is invested between their employer-matched 401 (k), their Roth IRA, and their HSA (Health Savings Account).

Outside of these accounts, it invests almost exclusively in index funds. “I’m a total stock exchange fund at Schwab,” she says.

4. Because of the COVID-19 pandemic, she moved back in with her parents

Although it was never originally part of her plan, she moved back to live with her parents due to the pandemic. Since she lives rent-free, she was able to drastically reduce her expenses in the past year.

“‘I’m very fortunate that my parents let me live rent-free to help me with my dream,” she says. This change has helped accelerate your invested income.

5. While saving a large portion of her income, she still enjoys life

Catie saves about 80% of her income, a common percentage for many who participate in FIRE. But for some, this high savings rate is one of the most unattractive qualities of the movement.

It is often assumed that putting so much aside must also mean depriving yourself of today’s joys.

But she doesn’t live like that. “I am extremely conscious of my expenses,” she explains. She still goes out to eat and drink with friends. She will spend money on travel – if the pandemic allows it. “I found out what makes me happy,” she says.

To do the things she loves, she cuts out other things, like expensive clothes or hair treatments. She doesn’t plan her daily expenses, but she knows her expenses and makes sure that she always has enough in her checking account to cover them.

She also makes sure that she uses some of her money to celebrate her victories and milestones. “It’s a long journey, it doesn’t happen overnight, it will take years and years,” she says. But she is determined to enjoy the ride as much as the destination.

More coverage for personal finances

Millennial Cash: A backyard’s classes for rising cash | Existence



FILE – In this May 14, 2018 file photo, a couple walk a path in Fairmount Park as they pass under the bridge over the Schuylkill River in Philadelphia. Maintaining your garden also offers lessons to grow your money. Start by defining what you want to bring to life. Think about the different aspects of your finances – income, expenses, debt – and imagine what you want them to be in a year or five.


Michael Bryant

By SEAN PYLES of NerdWallet

Soil, sun, water and seeds: the ingredients of a garden are simple, but the end product is never guaranteed. Bringing a property to a living state takes intent, know-how and not a little trial and error.

Like many people who stayed at home, I spent much of the last year tending the soil in my garden and creating a garden oasis of my own imagination. The work was not easy, and I am sure that many now dead plants wish that I was a little more practiced.

But when my vision became a reality – and I realized the care this new hobby requires – I saw parallels between caring for a garden and being conscious of finances. Here’s what my garden taught me about money management.

Before you stick a spade in the ground – or sign up for a new financial instrument – define what you want to achieve. Like a garden, your financial future can reflect your passions and priorities.

“There are no rules – it’s your garden,” says Brooke Edmunds, associate professor of community horticulture at Oregon State University Extension. “Don’t be afraid to try new things. You will have so much joy from the pride in growing things yourself. “

The way in which you manage your money is also an individual task. “When you envision your goals, a good starting point is to define your needs, wants and what is important to you,” said Lacey Langford, a North Carolina finance coach. “Not everyone values ​​the same thing. Some people appreciate a nice home, a nice car or a pension plan more. “

Millennial Cash: Don’t overlook credit score union bank cards | Information, Sports activities, Jobs

If you’re frequently bombarded with ads for credit cards at major banks, it’s easy to overlook credit cards at a local credit union. These nonprofits typically require membership based on location or affiliation with an employer, family member, or organization. Large credit card issuers typically do not have these requirements.

But while the rewards and perks are often more noticeable on bank-issued credit cards, credit unions can offer generous incentives of their own or different values. Also, a credit union offers many of the same services as banks, but profits are returned to members in the form of reduced fees, lower interest rates, and more.

Here are some ways that credit union cards can dwarf dazzling offers from banks.

Lower fees

It is not uncommon to find credit cards with lower annual fees, balance transfer fees, cash advance fees, late fees, etc. at a credit union. In fact, the average late fee for a credit union is about $ 10 cheaper than a bank, according to a Credit Union National Association membership benefits report. The types of fees vary depending on the credit union.

For example, the Navy Federal Credit Union in Virginia has a military focus and fees that match the lifestyle of its members.

“We know that many of our military personnel are based overseas, so we think it’s a really fantastic way to serve our community if we don’t have overseas transaction fees on our credit cards.” says Justin Zeidman, director of credit card products at the credit union.

Fees are an important factor to consider when choosing a credit card with any institution.

Lower interest rates

If you have an extended period of credit on a credit card, a credit union credit card may save you more money in interest than one from a bank. Because unlike banks, the interest rates at federal credit unions are capped. Federal law limits the interest rate on loans and credit cards to 15%. However, the National Credit Union Administration Board temporarily increased it to 18% and recently voted to hold that rate through March 10, 2023.

In March 2021, the nationwide average interest rate on a credit union credit card is 10.97% versus 12.55% for banks, according to the NCUA.

Possibly

healthy rewards

Some credit union credit cards compete with the sign-up bonuses or ongoing premium rates of large banks. This is one of the ways these nonprofits are bringing value back to their members.

For Keenan Kimbrough, a 27-year-old Pennsylvania resident, the rewards and low interest rates were worth switching from a bank-issued credit card to a credit union card. Its credit union card receives a lower interest rate of 12% compared to the 22% on the old card and the credit union card brings in higher premiums in common expense categories.

When redeeming rewards, “I can get $ 40 or $ 50” in cashback, says Kimbrough. “It was a good move.”

More flexible options

to access credit

If your credit rating is not optimal and you do not have enough money to deposit on a secured credit card, a credit union can offer alternatives for building credit. For example, USAlliance Financial, a New York-based credit union, is one of many credit unions offering a home loan as an alternative to members who cannot make a minimum deposit to qualify for a secured credit card.

“Over half, about 53%, of the members are with credit unions that offer loans that help people build credit.” says Jordan van Rijn, senior economist for the Credit Union National Association.

With this type of loan, the amount borrowed is held in a bank account while you make small additional payments over the life of the loan. At USAlliance Financial, the lowest payment on a home loan can be around $ 42 per month, compared to the minimum upfront cost of $ 250 for a secured credit card. At the end of the loan, the money will be returned to you and can be used with a secured credit card deposit to continue borrowing.

Access to resources

Credit unions typically provide their members with access to resources when it comes to credit card management or spending.

“Financial education and training programs are very common with credit unions, that’s a big part of their job.” van Rijn says. “We have data that shows that 83% of credit union members are with credit unions that offer financial education courses.”

Resources are available in the form of online educational tools, seminars, or partnerships with organizations that provide credit counseling or financial planning services. The offers vary depending on the credit union.

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MILLENNIAL MONEY: ‘Again to regular’ boosts pandemic pup prices | Enterprise

Last summer, like millions of Americans, I brought home a 7-pound ball of fluff. Over the past year my mini Goldendoodle has turned into 23 pounds of sheer joy.

Almost 1 in 5 households has bought a dog or a cat since the beginning of the COVID-19 pandemic, according to a recent ASPCA survey. That’s roughly 23 million American households.

And the majority of these pet owners have no plans to house their pet in the near future – contrary to rumors that people are returning pandemic puppies. That means our furry friends will be with us as we tackle the challenges (and financial obligations) of getting back to work and resuming daily routines.

Here’s what you should know in order to afford a pandemic puppy – a year later.

JUMP INTO A ROUTINE

“Dog ownership is a journey,” said Brandi Hunter, vice president of public relations and communications for the American Kennel Club.

“Last year people got a different version of the trip. If you’ve either bought or rescued a puppy – or an adult dog – during the pandemic, you have a dog that is completely used to being at home for the most part. “

If you know you will be going back to the office in September, for example, you should adapt your four-legged companion to a new routine in August, recommends Hunter.

Start with practice runs. It can be so simple that you leave the house for a few minutes so your dog can get used to being away from you, says Nicole Ellis, certified professional dog trainer and pet lifestyle expert at Rover, a pet supplies marketplace .

You can also enlist help to keep your dog occupied and looked after while you are away. Pet sitters can check on your dog and refill food and water. Dog day care offers interaction with other dogs. Dog walkers give your dog exercise.

TAKE A BUDGET

But adding expenses like dog walkers and pet sitters to your financial equation can be costly. (After all, you can expect to pay anywhere from $ 15 to $ 45 per walk depending on where you live.)

Make arrangements that fit your budget. For example, it may be cheaper to hire a dog walker to walk more than one dog at a time than a solo walk. Taking your dog to daycare three days a week is less expensive than five days.

Hunter also says looking around for dog daycare, much like any human service. You may be able to find a lower fare if you’re ready to drive to a location outside of your immediate area.

Rover and Wag are two examples of platforms that connect dog owners with dog walkers, boarders, sitters, and more. Some even provide pictures and videos of your dog so you can see what’s going on throughout the day.

USE YOUR EXPENDITURE

Aside from wading back into the world, you’ve probably realized by the last year that dogs are an investment.

For one, I’ve placed more online orders for treats and toys than I can count.

“Pet owners can spend anywhere from a few hundred dollars to several thousand dollars in the first year of owning a new pet,” Christa Chadwick, vice president of Shelter Services at ASPCA, said in an email.

So I also asked the experts how you can save money on all kinds of dog utensils. Reducing costs in one or more of these areas can help offset the new expenses you will soon face.

– TOYS. If your tough chewer (like mine!) Searches toys like candy, Hunter says you can give him bones instead. Bones are meant to be chewed and last longer than plush toys. Another option? Mental stimulation games. Place a treat on a puzzle to keep your pup occupied longer.

– TRAINING. Professional dog training can vary in price, so Ellis recommends watching YouTube videos for trick training techniques that you can use at home.

– TREATMENTS. Check back on the internet for dog treat recipes to take home. Ellis says you can mix dry food with treats to help keep supplies last longer and get your dog excited about training.

– SUPPLIES. “Make friends in your community,” says Ellis. Sites like Nextdoor and Facebook Marketplace can facilitate the exchange of offers. You could get equipment from people who want to give away things their dogs have outgrown.

– INSURANCE. “When the cost of an emergency vet visit or serious

Illness would be a financial burden, so consider investing in pet health insurance while your pet is healthy or saving money in a separate account specifically for these costs, “said Chadwick.

– EVERYTHING ELSE. Consider the cost of pets tied to human life events, advises Chadwick. For example, if you travel to hotels (for cleaning fees) or move into some apartments (for pet deposit fees), plan ahead of time before you bring your dog with you.

MILLENNIAL MONEY: What’s going to you educate your children about cash? | Enterprise

Hey internet: do you remember millennials? Many of us have done our lattes and leisurely brunches to become parents with jobs, car loans, and maybe even a mortgage.

On our way to growing up, we have experienced two global crises – a recession and a pandemic. Many of us still carry mountains of student debt. Those years have shaped our approach to money and now we are teaching our children what we know.

Here are the money lessons five millennial parents across the country want to teach their children (answers have been edited for length and clarity):

“NEVER THINK YOUR CHILD IS TOO YOUNG TO LEARN”

Laurynn Vaughn, 37, of Kissimmee, Florida, is a single mother of two daughters, ages 5 and 4. She runs a day care center that closed during the pandemic but has since reopened. She is also an active volunteer

“I don’t want to pass on that I wasn’t taught money. I think the sooner you start teaching your kids the better. I’m already teaching them that there are pretty much three principles to money. Second, save. And third, what remains is what you can enjoy. My principles are a little different, there are really four: I pay bills, then I give, I save and have money left over to enjoy. Better to teach them at their level than not to teach them because you are waiting for them to reach a level. “

“It’s better to be a working student and leave college with a lot less debt”

Mae Waugh Barrios, 34, of Holliston, Massachusetts, is the parent of three children, ages 10, 4, and 2. She is a middle school teacher trainer and is on unpaid leave to look after her children during the pandemic. Her husband Francisco runs a landscaping company. She still has $ 20,000 in student loans to repay.

“That was the biggest mistake I’ve made in my entire life. Everyone said go to the college you want, just take the loans. Nobody told me the real after-effects of student loans. My husband didn’t go to college . Our plan is to open a college savings account for (our children) when I go back to work. It’s (also) better to be a student trainee and leave college with a lot less debt. My husband and I have for that Made sure we don’t get stuck in debt that we can’t survive. We talk a lot at the dinner table about being rich and poor. When you are rich, your money works for you. When you are poor, you work for money . “

‘MAKING EXPERIENCES MORE’

Steffa Mantilla, 36, from Houston has a 4 year old son. She is a certified financial education instructor, former zookeeper, and founder of the personal finance website Money Tamer.

“In our household we place more value on ‘experiences’ than on ‘things’. (for my son’s birthday) instead of buying tons of gifts, we buy a gift and then tickets to the children’s museum or the local zoo. We encourage relatives to have experiences that they can have together, focusing on family and friends while teaching them to live with less stuff. “

“DON’T BE AFRAID TO INVEST”

Alan LaFrance, 37, of Austin, Texas, has a 5 year old son. He works in digital marketing and his wife Meladee is a respiratory therapist.

“You could pay for a car in cash, but you could (get) a loan on that car and borrow that capital and invest it. If you can make more with that money, you’re in a much better position overall, you can’t.” just put everything away, you have to start making the money work for you As parents, we want our children to save, but in reality you can do too much and really miss a lot of opportunities. “

“BUILDING A DIFFERENT STREAM OF INCOME”

Jernessa Jones, 39, of Florence, Alabama, is a single mom with a 6 year old son and an accredited financial advisor with Operation Hope, a nonprofit financial education organization. She completed an MBA program during the pandemic and started a fashion accessories business. “

“My mom and dad didn’t own a business, nor were they homeowners. I was looking for homes last year because owning a home is the first step in building intergenerational wealth. I realized I could afford the mortgages on some of the houses I’d looked at. but i would probably be poor I decided to take a step back and see what I could do to build another stream of income. Entrepreneurship was another thing I could teach my son. From start to finish, even when I opened my commercial bank account, he was there. “

MILLENNIAL MONEY: How factors and miles bank cards can ease return to journey | Enterprise

With COVID-19 vaccination season making travel safer, many people who stayed at home during the pandemic shutdowns are back on vacation. According to the Transportation Security Administration, the number of checkpoints at airports increased by around 20% from January to mid-June 2021 compared to the same period in 2020.

Rewards such as points and miles that you earn with a travel credit card can help you achieve a long-awaited dream destination, especially as a new cardholder. There is currently no shortage of generous sign-up offers for those with good credit (a FICO score of 690 or higher), but before you accept one, consider whether a travel credit card will match your spending.

Even for globetrotters, a travel credit card may not be compatible with habits or financial circumstances. Weigh these factors to determine what is right for you.

WHEN A TRAVEL CREDIT CARD makes sense

Travel credit card options are plentiful. There are general travel credit cards that allow flexible redemption and co-branded travel credit cards allow travel redemption with specific hotel brands, airlines or third party travel websites.

These types of credit cards can be useful if you travel regularly, have no debt, and pay the bill in full each month to avoid interest charges. Otherwise, the value of the rewards will be skimmed off by the high interest rate on these cards. Checking these boxes will allow you to consider a travel credit card.

Combining a travel card with a travel savings fund can also prevent unwanted budget surprises such as expenses that are not covered by credit card rewards. If you want to go somewhere in six to twelve months, put money aside from every paycheck to avoid debt, says Kelly Luethje, certified financial planner and founder of the Willow Planning Group in New Hampshire.

“You may not have accumulated the points you need for an entire trip, so I like a travel fund to supplement what you didn’t accumulate on the credit card,” she says.

MUST-HAVES FOR A TRAVEL CREDIT CARD

A travel credit card should make traveling easier and cheaper. Depending on where and how often you travel, the desirable features may vary.

For Christine Lozada, a California-based creator of Where In The World is CL, a YouTube channel, a travel credit card and its benefits were essential to her jet setting lifestyle.

She says the access her travel credit card gives in airport lounges is “huge for me”.

Your priorities may vary, but here are a few factors to consider:

– annual fees. Only consider high annual fee travel credit cards if the benefits of the card can offset costs. Less frequent travelers can get more value from a credit card with no annual fee.

– Introductory offers. A sign up bonus can cover the cost of a vacation, but spending too much money to qualify to earn one will miss the point. Instead, plan to apply for a travel credit card in a month or a high-spending season to meet bonus requirements on purchases within budget.

– reward. Look for a premium rate of 1.5% or 2% of your expenses. Depending on the terms and conditions of a card, the value of the rewards can go up or down with different redemption options. Travel redemptions usually get the best value. In some cases, you can maximize your rewards by transferring points to loyalty programs. Lozada transferred points from her credit card to her hotel loyalty program to get even more value for her points. She used them for a stay in Carlsbad, California.

– A broad network of dealers. With a travel credit card, which is one of the globally accepted Visa or Mastercard networks, you are likely to have fewer problems abroad.

– No foreign transaction fees. For international travelers, a travel credit card that does not charge foreign transaction fees saves money. These fees are usually calculated as a percentage of the amount of any purchase made abroad.

– Money-saving perks. Valuable discounts are usually offered on travel cards with annual fees. Airline credit cards may include free checked baggage or priority boarding. Hotel brand credit cards could include a free night and automatic elite status. Some general travel credit cards provide credit for Global Entry or TSA PreCheck application fees, travel or restaurant credit, or access to airport lounges. The card with the benefits you are most likely to use gives you the best value.

– Travel services or protection. Travel credit cards can provide trip cancellation or interruption insurance, lost baggage reimbursement, rental car insurance, and more. Protection is often secondary to existing insurance.

Read the terms carefully to get the most out of your benefits.

MILLENNIAL MONEY: Trial, error, and what I realized in my 20s | Enterprise

Your 20s is a time of self-exploration to gain a foothold as an adult – and likely to make some monetary mistakes.

To save you studying the hard way – and to pass some knowledge on when I get into my thirties – here are five money lessons from my last decade.

GET SERIOUS ABOUT GOALS

My main financial goal for several years was to go out as much as I wanted and have enough money left at the end of the month to cover the rent.

Ultimately, however, dazed mornings and meager savings turned out to be unfulfilled. My partner and I decided to set goals and plan for them. We wanted to buy a house, which meant we had to move to a cheaper city so we could start building savings.

TIP: Know your passions in order to know your goals.

Certified financial planner Pam Rodriguez in Sacramento, Calif., Suggests figuring out what you enjoy and then creating a financial plan to create more of those moments.

“Personal finances are a lot more emotional than a math equation,” says Rodriguez. “Even if the numbers have to add up, you will never take action unless you feel strong about something.”

For example, if you’re looking to buy a home to take in friends and family, figure out how much you need for a down payment and closing costs, and then work toward that savings goal over time.

FIND A BUDGETARY SYSTEM

For most of my 20s, my budgeting system was defined by the lack of it. At some point I soaked it up and started tracking my expenses. At first I felt like I was wearing off if I didn’t document where every penny went. But I quickly realized that a simple budget is more my style.

TIP: Choose a budgeting system that reflects your identity.

If you are a hyper-analytic person, a detailed spreadsheet might be for you. But if you’re more practical, a budgeting app can do the job.

Regardless of your budget, it is important to at least understand how much money is in and out of each month.

“When people see their expenses, they have an aha moment because they don’t know where their money is going,” says Sidney Divine, an Atlanta-certified financial planner.

TO LEARN FROM MISTAKES

Did you know that if you have a contract job and you don’t put enough money aside to cover the taxes, you may have to make monthly payments to the IRS for years? I learned that the hard way when I was in my early twenties.

TIP: Find the cause of a problem and find a solution.

In my case, the problem was ignoring my finances and not thinking about tax obligations. I solved the problem by proactively managing my budget and paying off my tax debts. It also helped get a new job that wasn’t a 1099 gig.

“You need to find out: is it the same mistake you keep making? Is it a pattern? ”Says Christine Papelian, certified financial planner in Phoenix. “If it is a new mistake, you now have the opportunity to get back on track. It is almost never too late to change a behavior or a habit. “

For example, if you have a habit of making late payments, consider setting up automatic invoice payment so you don’t have to worry about keeping track of different due dates.

BUILD FINANCIAL STRENGTH

Last year was a crash course in terms of instability. And while recent crises have been unusually severe, you can rest assured that unexpected financial challenges will arise as your life goes on. For example, a broken alternator on my car once used up my emergency fund, but at least I was able to avoid going into debt to cover the cost.

TIP: It is essential to save.

“Focus on building an emergency fund,” says Rodriguez. “Everyone needs one because everyone is going to have an emergency.”

Consider using a direct deposit to transfer a portion of each paycheck to an emergency savings account, or set up automatic transfers from a checking account to a savings account.

USE THIS LONG TIME HORIZON

The youth can be wasted on the youth, as can their financial time horizon – at least for those who do not use it.

Despite the various mistakes I made in my 20s, saving up for retirement is an area I haven’t neglected. After seeing the power of compound interest through an annuity calculator, I quickly set up regular contributions to my 401 (k).

TIP: Use these years to top up your retirement provision.

One way or another, your 20s are going to have an impact on your retirement years. And life can get more complicated later on, especially when you buy a home and raise a family, making it harder to save for retirement. Pocketing more money now can save yourself from catching up in later years.

This column was provided to The Associated Press by the personal finance website NerdWallet. Sean Pyles is a writer at NerdWallet. E-mail: spyles@nerdwallet.com. Twitter: @SeanPyles.

RELATED LINK:

NerdWallet: Budgeting 101: How to Budget Money https://bit.ly/nerdwallet-money-budgeting-101

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