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Purpose Driven Grandparents
From Advisor Josh Manifold

Recently, we encountered a powerful statement from one of our clients: “Help us to become the grandparents we never had.”

What followed was a powerful exercise in aligning this couple’s resources with their highest priorities–namely proximity to family as grandchildren would be arriving soon.

We encourage you to take 2 minutes and listen to advisor Josh Manifold tell their story.

As your season of life changes, you might find that certain priorities start to carry more weight. The power of your financial plan is that with the right support, your wealth exists to serve your vision for life.

  • What season of life are you in?
  • How have your priorities changed?
  • How might revisiting your financial plan enable you to do more of what matters most?

Social Media and Your Money: How is your social media consumption impacting your spending, contentment, and financial priorities?  Have you given any thought to the possible connection? How might a financial plan help you renew your focus and eliminate noise and distractions? Consider these:

Do your conversations and financial plan provide clarity on what you value and would like to spend your money on? What is one change you can make today?

Interest Rates and Consumer Spending: It’s been one of the themes from the last few years—interest rates are high. While consumers are penalized by higher rates and higher borrowing costs, they are also rewarded by receiving higher interest on savings and fixed income investment. Surprisingly, this combination probably even remains a benefit to consumers overall.

Part of this is because there can be an important timing difference between the impact of higher rates on savers and borrowers. The effect on savings takes place almost immediately as yields rise quickly on short-term instruments like savings accounts, short-term Treasuries, and certificates of deposit (CD) rise. The effect on borrowing happens more slowly as higher rates impact new borrowing but longer-term existing borrowing at a fixed rate still enjoys the lower rate. This is especially true with mortgages, which make up over 80% of household debt and are easily the dominant category.

While there is some impact from wealth (higher earners typically have more savings), we should always keep in mind that raw wealth data captures some important demographic differences that don’t tell the total wealth story. Over a lifetime, people generally achieve peak wealth at retirement, but that wealth needs to last through retirement years. Current wealth is high, but earning potential is very limited. Households that are younger often have weaker balance sheets, on the liability side from lower home equity or student loans, with the asset side being early in their “accumulation” phase. The future earnings potential for younger households is high.

Current mortgage rates have stayed low for the average borrower, but the spread between other interest paid and interest received has expanded. There is some impact here from increased aggregate wealth, but the point still stands that higher interest rates have had a larger positive impact for households across the economy than a negative impact.

Entrepreneur Highlight: We love supporting entrepreneurs with a vision. Allegiance Flag Supply was started with a simple idea: high-quality, American flags should be made in America. Last year, we purchased flags for our team as a simple gesture to celebrate our great nation and the July 4th holiday. We love the quality!  More info on AFS here.