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Americans Prefer This Investment Opposed To Stocks

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Americans Prefer This Investment Opposed To Stocks

A recent report has revealed that people would rather invest their money over the long term in real estate and cash over other investment types, including stocks.  

Loss of confidence in stocks

A survey that Bank Rate recently conducted has revealed some concerning results.

The report asked people where they would invest their money that they do not need for ten years or more.

real estate and cash 1

The results show that 25% of Americans would spend their money in real estate, and 23% would invest their money in cash.

This is concerning because capital investments are safe for short-term investments but have yield low returns when invested for extended periods of time.

Real estate is a good long-term investment, however; it is the older generation who are investing in real estate.

People ages 18-25 are keeping their money in cash.

The stock markets may have been facing a period of extreme volatility recently; however, investors have still managed to achieve plenty of positive returns.

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The lack of confidence in the stock markets as a viable investment choice could be detrimental to the market’s ability to achieve their long-term goals.

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Why are stocks necessary?

Movements in the equity markets can have a significant effect on the economy.

A crash in the markets can trigger a recession, although this is not always the case.

The stock market affects the economy in the following ways:

  • Individual wealth
  • pension funds
  • investor confidence
  • ability to gain finance
  • bond yields

The state of the stock market can significantly influence the confidence in not only businesses, but also consumers.

However, this relationship also works the other way round.

During bull markets, firms and consumers feel confident spending money, and this boosts the markets.

Consequently, during a bear market (or the threat of one) businesses and consumers are more likely to be careful with their money.

Currently, the markets are doing well, so why are Americans not investing in them?

Why are people avoiding the stock market?

The current bull market has been going strong since 2009, and yet there continues to be little confidence in the stock exchange.

One potential reason for this could be the effect the dot-com bubble had on investor’s finances in 2000, followed by the financial crash in 2008.

Other possible reasons people do not invest in the stock market include:

  • They believe they cannot afford to
  • they wouldn’t know where to begin
  • distrust in the stock market

What should you consider before you invest?

You should not start to invest in stocks without first learning as much as you can about the stock market.

As well as learning about the markets, you should also determine your financial situation.

You will need to take careful consideration to ensuring you have enough to cover any debt as well as an emergency fund to assist in unforeseen circumstances such as job losses.

It is also helpful if you plan your investments.

You should consider why you are investing.

If you have a goal, then you are more likely to remain focus and succeed.

Conclusion

A recent study revealed that Americans are more likely to invest their money long term in real estate or cash.

Investing in real estate is a sensible long-term investment; however investing in cash is usually only suitable for short-term investments due to low return yields.

Despite the stock market recently showing incredible resilience despite the markets being volatile, Americans continue to have little confidence in the equity markets.

The economies linked to the economy and a stock market crash has the potential to trigger a recession.

Bull markets spark confidence in businesses and consumers while bear markets cause consumers and businesses to be more frugal.

We are currently in a bull market and have been since 2009.

There are many reasons that Americans may be avoiding the stock markets; these include being deterred from past stock market crashes, inability to afford to invest, unsure where to start, distrust of the stock exchange.

Anyone who is considering investing in the stock market should learn about how it works.

It is also important to look at your finances, paying close attention to any debts and ensuring you have provisions saved in the case of any emergencies that may occur.

Finally, it would be helpful if you draw up a plan that details what you are hoping to achieve by investing in the stock market.

A program will not only help you to remain in focus, but it will also help you to succeed.

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Dems Can Only Blame Pelosi For Failure To Secure More Stimulus Money

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Dems Can Only Blame Pelosi For Failure To Secure More Stimulus Money

The next round of stimulus money will unlikely include any major concessions for Democrats. With this, the party has nobody to blame but Nancy Pelosi.

Astonishingly, that opinion comes from David Dayen, the executive editor of The American Prospect. The said magazine stays “dedicated to liberalism and progressivism.”

In a recent article titled “A Leader Without Leading,” Dayen says during the passage of the last stimulus bill in late April, Pelosi – along with Sen. Chuck Shumer – chose to forego adding their wishlist to the bill, believing they would have another shot. That shot, thus far, has never materialized.

“Republicans wanted more money for forgivable loans for small businesses. Democrats had a host of liberal priorities left out of prior legislation that could have been paired with the extension. But Pelosi and her Senate colleague Chuck Schumer chose to go along with the Republican framework, leaving everything else for later.”

“Immediately afterward, Senate Majority Leader Mitch McConnell hit the pause button on future legislation. It felt like the Democrats were played.” said Dayen.

Credits for the Republicans

He also credits the Republicans for knowing exactly what they wanted out of each stimulus bill. The Republicans did so all while Pelosi fumbled away every opportunity.

“When the coronavirus spread and lockdowns buckled the economy, Republicans knew exactly what they wanted—protect large corporations and investors—and pursued it unerringly. Pelosi had no coherent agenda to fall back on. She’d spent the past year advancing complex, multifaceted bills and watching them wither in Mitch McConnell’s legislative graveyard.”

Dayen adds, “H.R. 1, the House’s signature legislation during this Congress, which attempted to nationalize voter registration, establish nonpartisan redistricting commissions, add ethics standards to the Supreme Court, add a voluntary public-financing option for campaigns, require presidents to release tax returns, disclose donors for super PACs, make Election Day a holiday, and about 20 other things in a single bill, is a perfect example of this syndrome. There’s no single narrative to grab onto, just a mélange of advocacy group–approved planks. This left House leadership unprepared as the pandemic began its march.”

Pelosi worked on the earlier stimulus bills. While doing so, she allowed the Republicans, led by Mitch McConnell, to craft the CARES Act. Dayen says this meant that Democrats “just got to tweak McConnell’s work, without altering its tilt toward the powerful.”

Pelosi and the HEROES Act

Dayen’s takedown on Pelosi ends with her “pie-in-the-sky” HEROES Act. Somehow, she even managed to make a mess of her own bill.

“Incredibly in the midst of a crisis, was a Pelosi tendency that had grown over the years: obsessive concern with deficits. Pelosi rolled back student debt relief in the HEROES Act after learning that it would cost $100 billion more than expected. This was a $3.2 trillion messaging bill not designed to become law, yet an additional 3 percent cost was considered unacceptable. Pelosi also declined to add “automatic stabilizers” that would maintain expanded benefits until economic stress dissipated, blaming a Congressional Budget Office scoring quirk that made the cost appear artificially larger.”

“So with over 30 million out of work, the important thing to Pelosi was that her pie-in-the-sky, going-nowhere bill was ‘reasonable,’ based on some ineffable standard of reason…”

“Devotion to deficit hawkery in normal times is unwise policy. It’s downright fatal during an economic crisis, where relief could be yanked away from needy families prematurely simply because of an unwillingness to challenge CBO’s scoring model.”

Many expect lawmakers to vote on the next stimulus bill sometime after July 20. If you hear Democrats complaining about how “unfair” the bill is, just remember who is negotiating for their side.

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Why You Should Consider Filing For Social Security At Age 62

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Why You Should Consider Filing For Social Security At Age 62

Earlier this week we discussed four common regrets that retirees have when they look back at their golden years. One of the most common regrets was filing for Social Security benefits at 62, the earliest possible age. According to the Social Security Administration, about 1 out of 3 people apply for benefits at that age.

The regret is that if they had waited longer to file for their benefits, their monthly check would be much larger. For example, by delaying filing for Social Security until age 70, your monthly benefits can be as much as 75% larger than someone who filed at age 62. That’s because benefits grow by a guaranteed 5% to 8% each year that you delay your claim.

But there are always two sides to a coin. Today we wanted to discuss the benefits of filing for Social Security as soon as possible. With this, you can decide which approach you believe will benefit you the most.

The Case For Filing Social Security Early

The earliest you can file for Social Security benefits is age 62, but each month you file before reaching your full retirement age (FRA) cuts your monthly benefit amount. As an example, if your full retirement age is 67 and you start your claim at age 62, your monthly check will be reduced by approximately 30%.

Despite the reduced monthly benefit that comes with filing early, tens of millions of Americans make that decision every year. And it boils down to one line:

We have no idea what the future holds.

The financial benefits of waiting until age 70 to claim Social Security make complete sense. But we don’t know how long we will live, so we don’t know if the trade-off is worth it. If we knew we would live a long, healthy life until age 100, we would all delay filing until age 70 and reap the maximum reward.

But if you decided to wait until age 70 to claim, and unfortunately passed away before that, you would have foregone all the retirement income from age 62 on.

Waiting to file is a gamble, but so is giving up guaranteed monthly income starting at age 62.

Deciding when to claim your benefits requires serious thought and shouldn’t be a hastily made decision. And we aren’t saying that filing Social Security immediately at 62 or waiting until age 70 is the right choice. Every situation is different. If you are still healthy and working, waiting a few years passed 62 to claim but not all the way to 70 might be a good compromise. You’ll get a larger check than had you claimed right away, and your regular working income can make up for some of the reduced benefit amount since you didn’t wait until age 70.

The most important thing, whether you file at 62 or 70, is to find enjoyment in your golden years.

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Mnuchin: Next Stimulus Coming By End of Month, No More Extra Unemployment Money

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Mnuchin: Next Stimulus Coming By End of Month, No More Extra Unemployment Money

Treasury Secretary Steve Mnuchin said the next stimulus bill will be much more targeted than previous bills. He also said the goal is to get the next bill approved between July 20 and the end of this month. That time is when Congress will return from their holiday break and before they leave for August recess.

On Broad Stimulus Measures

It appears the White House will not support the type of broad stimulus measures of the previous bills. Instead, it will focus on direct payments to Americans. In an interview with CNBC yesterday, Mnuchin said “we do support another round” of stimulus checks to individuals. This mirrors the $1,200 payments that the government sent out as part of the $2 trillion rescue legislation passed in March.

Mnuchin didn’t mention whether he supported the idea of a $40,000 income cap to receive a check that has been floated by GOP lawmakers. The income cap for the first stimulus check was $75,000. He did say that he spoke with Senate Majority Leader Mitch McConnell. He also mentioned the “level and criteria” for checks would be discussed when lawmakers return to Washington.

Any new stimulus bill would likely not include proposals from the Democrats that include hazard pay for essential workers. It likely won’t include a longer extension of strengthened unemployment benefits, mortgage and rent relief, and support for state and local governments, too.

Mnuchin reiterated that the White House isn’t in favor of more relief money for states and municipalities to make up for lost revenue. Some state and local governments are considering trimming essential services as costs balloon and revenues drop. He said the administration does not want to “bail out” states that were “mismanaged” before the virus hit.

On Unemployment Benefits

Another critical topic the lawmakers will tackle the end of the enhanced unemployment benefits on July 30. They will do so when they return to Washington D.C.

Mnuchin said the White House has no interest in extending the enhanced benefits any further. Instead, he said it wants to change how they pay benefits. He did not give details. However, he did hint that unemployed workers shouldn’t be able to earn more money compared to full-time employees

“You can assume that it will be no more than 100%” of a worker’s usual pay, Mnuchin said. This echoes many Republicans who argue the additional benefits are preventing some from returning to work. These workers do this so that they make more at home than they would at their jobs.

While Mnuchin says the White House isn’t in favor of extending unemployment benefits, it is extending the Paycheck Protection Program that provides loans for small businesses. Earlier this week the Trump administration released a list of companies that received loans from the government. With that, backlash ensued as numerous businesses tied to wealthy individuals were found to have requested funds. Of the $130 billion remaining in the program, Mnuchin said he wants new relief to be “much, much more targeted” than past rounds of funding.

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