Coronavirus & Your Money

ST. CROIX INSIGHTS

Coronavirus & Your Money

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

First off, there have been weeks of headlines about the coronavirus outbreak. In addition, markets have been caught in a volatile pattern of surges and retreats. Here’s what you should know:

Why are markets so volatile?

Obviously, disease outbreaks are hard to predict and come with a great deal of uncertainty that can make investors nervous. In addition, this is particularly true after a period of record market gains.

Furthermore, as the epidemic spreads beyond China, investors worry that it could cause serious disruptions to trade. Then, it would impact the interconnected global economy.

How long will the volatility last?

Well, it’s hard to say. Though the human cost of an outbreak like Coronavirus is tragic, it’s unclear how widespread the economic fallout will actually be. For instance, we can’t predict what markets will do. However, this isn’t the first time we’ve grappled with market reactions to an epidemic.

Here are some examples from previous outbreaks:

Chart source: CNBC, Yahoo Finance

Unfortunately, the past can’t always predict the future.  Although we were not prepared for a virus of this caliber, we can refer to historic data. First, markets reacted to epidemics with panic selling. But they recovered after the initial outbreak. This coronavirus should be no different.

However, epidemics don’t happen in isolation. Above all, underlying economic and market fundamentals will influence how investors react long-term.

Then, pullbacks and periods of volatility happen regularly, for many reasons.

Whether the cause is an epidemic, geopolitical crisis, natural disaster, or financial issue, markets often react negatively to bad news and then recover.

Sometimes, the push-and-pull can go on for weeks and months. This can be stressful, even when it’s a normal part of the market cycle.

Lastly, the best thing you can do is stick to your strategies and avoid emotional decision-making.

Why?

Emotional reactions don’t lead to smart investing decisions. In other words, the biggest mistake investors can make right now is to overreact instead of sticking to their strategies.

P.S. Reading too many headlines? Having trouble keeping calm?

Just give me a call at (651) 337-1919 and I’ll be happy to help.


Chart Source:

S&P 500 performance during outbreak:

S&P 500 performance six months after outbreak: Yahoo Finance. 6-month performance between open of first trading day of the month after end of outbreak to adjusted close of final trading day of the sixth month.

SARS: April 1, 2003 – Sept 30, 2003
MERS: Dec 3, 2012 – May 31, 2013
Ebola: March 3, 2014 – Aug 29, 2014
Zika: March 1, 2016 – Aug 31, 2016

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The Standard & Poor’s 500 (S&P 500®) is an unmanaged group of securities considered to be representative of the stock market in general. Indexes are not available for direct investment. The performance of the index excludes any taxes, fees and expenses.

Federal Stimulus Check Article

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Dumb Ways We Spend Money: Lesson 21 of 50

ST. CROIX INSIGHTS

Dumb Ways We Spend Money

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

dumb ways we spend money

Have you ever thought about some of the dumb ways we spend money?

At the risk of embarrassing myself, here are a few of mine:

  • Cable TV (even though nothing good is ever on)
  • Cell phone plan (even though I hate always being connected)
  • Bottled water (even though I finally purchased a reverse-osmosis system for my house)
  • The occasional impulse buy when I see something on sale (even though I don’t need it)

The list goes on!

One overlooked (but still dumb) way we spend money is all those monthly recurring payments. They can accumulate quickly, almost without our notice, but the individual charges are small enough where we’re never actually triggered to cancel them.

Microsoft: $10. Dropbox: $10. Netflix: $10. Gym membership: $40.00 (“but I’ll go someday, so I’d better keep paying”). It’s not the mortgage or car payment that gets us; it’s these nickel-and-dime amounts that really start to add up.

Maybe it’s time to tally up all the dumb ways we spend money and consider dropping a few unused or unnecessary subscriptions from our monthly expenses. After all, when it comes to making smart financial decisions for our future, every little bit helps.

Article: Broke vs Poor

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Dream Board Session

ST. CROIX INSIGHTS

Dream Board Session

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Have you heard? We are hosting a dream board session on July 28! Learn more by going to this facebook event page. We decided to hold this event because dream boards have become very important in our own lives. We use this boards, which sit right next to our desks, as daily reminders of the ideas, goals, dreams, plans, and visions we have for ourselves and our futures. By having these within sight every single day, we become much more motivated to do something about those dreams. Another piece of it is that these dreams cannot be accomplished alone. There is power in community and in sharing with others. For these reasons, we have created this session that will allow you to do the same for yourself and even sign up if you’re interested in follow-up.

OR watch the video below

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How Much to Spend on a Wedding Gift

ST. CROIX INSIGHTS

How Much to Spend on a Wedding Gift

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

It’s something we’ve all thought about when invited to celebrate that special day – how much to spend on a wedding gift. Before tackling this subject, it’s important to note that giving should be based on both the financial position you are in as well as your relationship to the couple. With that, here are some general guidelines to follow.

Realistically, you have three options when it comes to wedding gifts. Either you can buy directly off of the couple’s registry, give cash or check, or give a gift card to the store that the registry exists at or a place you know they enjoy. Although creativity is wonderful, most engaged couples have thought through what it is that they need to get started, so don’t stray too far from that.

Certainly, money can be tricky, especially because there are so many different reasons for going to a wedding. However, a good rule of thumb is to spend at least $50 on a wedding gift. Usually, this lower threshold (under $100) is appropriate for acquaintances, coworkers, neighbors, and distant family members.

Now, I suspect most families don’t track their spending on a daily or monthly basis. Luckily, St. Croix Advisors clients have access to iAdvise- the most advanced financial planning software. Further, it allows us to track their spending and help establish a monthly budget.

The $100-$150 range is where most people land when purchasing a wedding gift. This amount makes sense for friends, cousins, and those you have a close working relationship with. Anything above $150 is suitable for those closest to you or for people who have the financial ability to give generously.

Additionally, it is a good idea to try to tackle some of the bigger items on the registry first that may be a bit too pricey for the new couple. Currently, you may not be able to afford to give a washing machine as a wedding gift, but maybe you have a good friend going to the wedding who would be willing to combine gifts. It’s a lot easier to run out to the store for some hand towels rather than new appliances.

Also, don’t forget about the other costs associated with weddings. Generally, are you the type of person who buys a new outfit for a special occasion? In this case, were you invited to a bridal shower, bachelorette party, or a similar celebration? Following the wedding, are you going to be giving anniversary gifts? Indeed these are all good questions to ask yourself – try not to overshoot or undershoot on the gift.

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9 Unique Father’s Day Gift Ideas

ST. CROIX INSIGHTS

9 Unique Father’s Day Gift Ideas

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

It’s not to say your previous Father’s Day gifts have not been appreciated, but it’s time to buy into the idea of a Unique Father’s Day Gift. Here are 9 different gift ideas. If anything, this should get the ball rolling for you to think outside the box (or the Father’s Day display).

1. Father’s Day Boat Cruise

Do a little research to see what your city is doing for Father’s Day. Many places have some type of special or something arranged to help fathers feel appreciated. One of the cooler things is a boat cruise – especially if a meal and/or live music is involved. If you live in the Twin Cities/Western Wisconsin area, check out Stillwater Boat and Packet Specials. Dad will love the combination of quality time, food, and scenery!

2. Custom picture frame with photo

Head over to your local Michael’s craft store and pick up your favorite picture frame. If you’re crafty, add your own twist to it. If not, search Amazon for a quick picture frame delivery. Make it personalized. Does dad like fishing? Get a fishing frame and frame a picture of the two of you with your biggest catch! You can be thoughtful without breaking the bank.

3. A Bathroom Box

This one seems a little silly, but everyone poops! There is now a spray that covers up the stink before you even go. It’s called Poo-Pourri, and you need to check it out here. Now, dad may not want you just saying that he smells, so make it thoughtful. Add a Dad Joke book or some printed toilet paper to complete the bathroom box.

4. Tickets to a local tour

Is there something your dad absolutely loves? Maybe something he often mentions but never gets around to? Look up local tours to find something special. If you’re in Minnesota, GetKnit Events has a plethora of options. It’s always a hit to get tickets to a local museum or a tour of the local brewery, too.

5. Clean Car Caddy

It never hurts to get a useful gift for Father’s Day. Pick up some Rain-X and a nice microfiber towel to give a gift of a clean car. You could even throw in a car wash coupon book or better yet, help your father clean the car!

6. Monthly Box Subscription

There are quite a few options in this up-and-coming category. Check out Dollar Shave Club, Try the World, and Compete Crate for some awesome ideas. There ought to be something to fit your dad’s interests!

7. Custom coasters

When a father comes home from a long day, you’ll probably find him with a cold beverage in his hand (even if it’s water). Shutterfly has great options for customizable coasters. It’s up to you whether you want to just do text, or even add your own family photos! This is a timeless gift that can be used by family members and house guests.

8. A Thoughtful CD

Your father’s car probably still has a CD slot in it. Go to your ITunes library, add about 20 songs to a playlist, and burn it onto a CD. Write about why these songs mean something to you. Maybe they make you think of all of the great times you shared with your dad. Pick out a unique CD case to make the gift a little more interesting.

9. A day dedicated to cleaning/organizing the garage

One of the best things we can give to someone else is our time. If dad is someone who is always working outside or spending time in the garage but never gets around to organizing it, dedicate an entire day to helping him do just that. He will appreciate it for years to come.

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4 Steps on how to afford college – High School graduation is in the air.

ST. CROIX INSIGHTS

4 Steps on how to afford college – High School graduation is in the air.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

How to afford college?

I’m not worried about having to pay $10,000, $15,000 or $30,000 each year for four or five years for my kids to attend college. I used to worry about having to save or pay for college. I don’t anymore. My perspective completely changed based on my personal experience that wasn’t even related to paying for college. I’m happy to have a sidebar conversation on why if you ever want. Back to paying for college and how to make it affordable. Here are 4 simple steps each and every one of our kids can take to help pay or reduce their college tuition bill.

Over my vast experience in the financial services world, talking with hundreds if not over a thousand people, it’s generally not the mortgage or the car payment, but rather just everyday life that really gets us. It all adds up. $5 here, $50 there, $250 here- it all adds up to real money each month. It’s financial leakage. We all have it, yet, some of us are better than others at controlling it.

ACT Score

This is the best way to obtain free money for college. When you kids focus and invest the time preparing for this exam, chances are it will be money in the bank, depending on the school if you score a 30 or higher. Most kids are not going to achieve a perfect score on the ACT to get a full ride, but I suspect many have the chance to receive some type of money based on their score. I know this is to be true as I’ve seen it firsthand.

FAFSA Form (Free Application for Federal Student Aid)

This is going to seem like a dah moment, but it’s overlooked and so easy to fill out your form wrong and miss out on real money. First off, you don’t even want to fill out the form, so you rush through it not paying attention to the details. For example, line 91 of the FAFSA form wants to know about parent’s current investments. Without thinking or looking into the details, you’ll look at your balance sheet and fill it in. But wait…. what are they really asking? This line has major exclusions – the home they live in, cash, savings and checking accounts the value of life insurance and retirement plans, and other similar types of accounts. You want to make sure you understand the question they are asking and provide the actual number they seek. Otherwise, you might be missing out on financial aid monies.

Award letters

No matter what, you want to schedule an appointment with the financial aid officers. I’ve had clients knock off $3,000, $10,000 off their kid’s yearly tuition bill just by making a phone call. Many are reluctant to make a phone call or plead on their own why they need additional financial support. I see it this way, do you have another way within 10 minutes to make $5,000 or $10,000? No, you do not!

Save money with community college first

I know many will not find this ideal. Heading to a local community college, but it’s a great strategy on how to afford college and truly allow you time in discovering what you‘d like to pursue as a degree. Changing your college major is expensive. Remember, when you graduate with a four-year degree from a college or university, it’s doesn’t matter that you attended the local community college.

These are four simple steps on how to afford college. College will be your 3rd or 4th largest expenses in your lifetime. Let’s it get it right together. If you want to discuss other money-saving strategies, give me a shout.

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