Wealth and Wisdom: Week of August 1, 2022
Legendary fund manager Peter Lynch once said, “If you spend 15 minutes a year studying the economy, that’s 10 minutes too many.” Countless traders, strategists, and market prognosticators continue to ignore that sound advice, however, and this week they are in overdrive.
As you know by now, the Federal Reserve tapped firmly on the economic brakes last week, announcing it was raising short-term interest rates by 75 basis points, or three-quarters of a percent, in response to inflation. The Fed Funds rate has gone from 0.25% early this year to its current rate of 2.50%.
Consensus is now building around a new idea, however, that the Fed might actually be done raising rates for a while. Inflation is showing signs of cresting (see our first item below), which may allow policymakers to wait and see if the economy can cool off sufficiently without toppling into recession.
Okay, we’ve already used up one of Mr. Lynch’s five minutes for this year – time to move along.
Is inflation about to peak?
Our chief strategist says three things are telling him that the rate of inflation will soon begin to taper off. (Running time: 2:19)
Wisdom from the Greats
If the current bear market has you skittish, soak in some timeless wisdom from some of history’s most successful investors. (Reading time: 4 minutes)
New podcast: Take advantage of this bear market
Bad markets don’t last forever. In the latest episode of The True Wealth Podcast, I share some ideas and strategies for making the best of it while you can. (Running time: 10:02)
Tapping Social Security early
A new survey says most Americans plan to file for Social Security benefits early – a decision many of them may come to regret. (Reading time: 4 minutes)
And what about postponing benefits?
Calculate your break-even age to see how soon deferring Social Security benefits will start to pay off. (Reading time: 5 minutes)
Managing debt once you retire
In a perfect world, we would all retire completely debt-free. But that’s not the world many retirees live in these days. (Reading time: 4 minutes)
Don’t ‘orphan’ that 401(k) when you change jobs
You have several smart options with your company retirement plan when you leave a job. Forgetting about it is not one of them. (Reading time: 5 minutes)
How to choose a financial advisor
Here’s an 8-step plan for hiring the professional who best suits your needs. (Reading time: 10 minutes)
Understanding ‘lifecare’ senior living options
“Lifecare” or “lifeplan” contracts can help you pay for all levels of long-term care – even if your needs change. Here’s how they work. (Reading time: 6 minutes)
Mike’s Pro Tip of the Week
Having a place to live is probably your biggest expense – and also one of the biggest opportunities you have to beat inflation – so it pays to start by looking for ways to lower your household expenses. Here’s a comprehensive list of money-saving ideas to get you thinking.
Words to the Wise
“You don’t get rich spending a dollar to save 30 cents.”
– Patrick Killilea
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