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The Truth About Becoming an American Millionaire

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The American dream is alive and well, and Americans who aspire to build wealth and become rich may be surprised to know they don’t need a flashy job. or come from an affluent family to build a fortune. The truth is, eight out of 10 millionaires reach that milestone through their company’s 401(k) plan, according to the National Study of Millionaires by Ramsey Solutions. Additionally they are hitting it years before the traditional retirement age. Julia Limitone writes on Fox Business:

“Typically they are hitting it around 25 to 28 years, so right before age 50,” said Chris Hogan of Ramsay Solutions to FOX Business’ Maria Bartiromo. on Tuesday. “So that shows using the 401(k) and 403(b) and IRAs puts people on the path to build wealth over time.”

What’s more, it’s not the glamorous jobs like being a professional athlete or entertainer that are raking in the dough. Rounding out the top five professions were engineers, accountants, teachers, managers and attorneys, Hogan said.

Hogan also offered tips for the pursuit of millionaire status. In his opinion, one of the biggest mistakes made is not understanding the threat associated with debt.

“Any time you have debt in your life, you’re paying interest and so that’s preventing you from growing your money,” he said.

Jack Bogle, Founder of Vanguard Group and Creator of the Index Fund, Dies at Age 89

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Jack Bogle, who founded Vanguard Group, an investing juggernaut now with more than $5.1 trillion in assets under management, and created the world’s first index mutual fund, has died. He was 89. CNBC reports:

Bogle passed away on Wednesday in Bryn Mawr, Pennsylvania, according to a statement from Vanguard.

Bogle, who preached buy and hold investing, was considered one of the world’s greatest investors. His index mutual fund enabled investors to achieve high returns but at lower costs than for actively managed funds.

He founded Vanguard, the world’s largest mutual fund organization, in 1975, and later served as chairman and CEO until 1996. Vanguard now manages assets from more than 20 million investors in about 170 countries.

The US Middle Class is Disappearing…Into the Upper Middle Class

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Yes, the America middle class is disappearing. 38% of US families were middle class in 1979 vs. 32% in 2014. But where did that 7% (6.8 percentage points to be exact) go? James Pethokoukis writes on American Enterprise Institute:

“Well, of the five income groups (poor, lower middle class, middle class, upper middle class, and rich) displayed, the bottom three got smaller, the top two bigger. The poor shrank by 4.5 percentage points, the lower middle class by 6.8, the middle class also by 6.8% But the upper middle class got a lot bigger, expanding by 16.4 points, and the rich by 1.8 points.”

Here is how upper middle class is defined, using research from economist Stephen Rose of the Urban Institute:

“Using Census Bureau data available through 2014, [Rose] defines the upper middle class as any household earning $100,000 to $350,000 for a family of three: at least double the U.S. median household income and about five times the poverty level. At the same time, they are quite distinct from the richest households. Instead of inheritors of dynastic wealth or the chief executives of large companies, they are likely middle-managers or professionals in business, law or medicine with bachelors and especially advanced degrees.”

How to Invest in Property and Look After the Planet

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If you’re looking to invest in property, saving the planet can be easier than you think. Choosing a sustainable development by a trusted property developer is a great way to make sure the housing of the future is eco-friendly. Consumers have considerable impact on the market and the number of both tenants and investors wanting a property that is better for the planet  is constantly on the rise. As there are more renters than ever before, more of them are looking for a landlord and a rental property that is eco-friendly, proving a lucrative new investment opportunity.

The environmental impact of a new building is high on developer’s agendas, and they take several steps to ensure the sustainability of a development. West Point Manchester, sold by RW Invest  is a great example of an eco-friendly property development, which offers environmentally friendly living as well as all of the modern amenities tenants expect. This new apartment building features innovative features and low carbon technology, with 100% energy efficient LED lights. Solar panels generate energy, as does an air source heat pump and a state of the art heat recovery ventilation system to reduce how much energy is wasted. There are a number of sustainable property developments available on the market, that are perfect for those looking for an eco-friendly property opportunity.

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Joy From Giving Lasts Much Longer Than Joy From Getting

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According to two new studies conducted by researchers with the University of Chicago and Northwestern University, giving to others rather than to ourselves makes us happier. Study Finds explains:

Have you ever noticed that your enjoyment in a repeated activity or event decreases over time no matter how wonderful it is? When this happens, you are experiencing what researchers call hedonic adaptation. The joy of having our own desires met is always fleeting. Perhaps surprisingly, however, giving to others creates a more lasting happiness.

“If you want to sustain happiness over time, past research tells us that we need to take a break from what we’re currently consuming and experience something new,” says study co-author Ed O’Brien, of the University of Chicago Booth School of Business, in a releasefrom the Association for Psychological Science. “Our research reveals that the kind of thing may matter more than assumed: Repeated giving, even in identical ways to identical others, may continue to feel relatively fresh and relatively pleasurable the more that we do it.”

Jeff Bezos Earns More In 30 Seconds Than The Average Worker Makes In A Year

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While millions of Americans no doubt enjoyed some degree of schadenfreude watching the correction in FAANG stocks wipe out nearly $1 trillion of value from the largest US tech firms: Mark Zuckerberg alone has lost nearly $100 billion of his personal wealth since the beginning of 2018, and Amazon CEO Jeff Bezos has lost as much as $13 billion or more in a single day. But that doesn’t change the fact that the world’s billionaires enjoyed their highest-earning year on record in 2017 as their wealth increased by a combined $9 trillion. ZeroHedge reports: 

Helped by the asset-friendly policies of the world’s largest central banks, the wealthiest 1% of the world now owns nearly half the wealth. The 54 billionaires living in the 54 UK alone have an aggregate $160 billion in wealth, equivalent to over 6% of Britain’s GDP. Meanwhile, the average worker earns about $37,000 a year. Virgin CEO Richard Branson earns that amount in roughly 25 minutes.

Even more galling, Facebook CEO earns the same sum every 60 seconds. Bezos earns the same sum every 28 seconds.

How Is Your Home Insurance Rate Calculated?

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Home insurance is one of those things that can just seem like an added monthly bill that is completely unnecessary but should there ever be a time when you require that insurance, it could quickly pay for itself many times over. No-one likes to think about emergency situations happening, damage to their home, and other issues that can require some rather costly repairs, but the reality is that life happens.

If you’ve decided it’s time to start looking into homeowners insurance and at least consider some basic coverage, then you are probably curious as to how your rate is determined. The amount you pay for home insurance is actually determined by a number of factors, some of which will be under your control whereas others won’t. Let’s take a closer look.

The Home Itself

Insurance Land, an insurance company located in Florida says the biggest factor in determining your insurance premium is the house itself. Any insurance company is going to look at such things as the type of structure, the size of the home, the age of the home, and even what kind of material has been used to build the home.
Insurance Land also points out that if you happen to have an older home, sometimes your rate can be higher, but that can depend on the building materials used. This is exactly why they offer free quotes, which can be done online so that you can get an idea of what your rate may be.

What is Your Claims History?

Another big determining factor is your claims history. Perhaps you have owned other houses in the past, and maybe you’ve had to make an insurance claim. That will remain in your history and can sometimes act as a red flag for an insurance company. At the very least it can push you into the higher premium category.

If you’ve had a number of claims in the past, it may not only mean you will pay more for insurance, but you could find it difficult to be insured at all.

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American Debt is Set to Hit $4 Trillion

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It’s only been five years since Americans hit a grand total of $3 trillion in consumer debt and yet, by the end of 2018, that figure is expected to jump by another trillion. CNBC reports:

In the first nine months of 2018, Americans had a cumulative $3.93 trillion in debt, excluding mortgages, with $1 trillion of that from credit cards and $2.93 trillion from other sources such as student loans and auto loans. With holiday shopping underway, Americans’ credit card bills are set to increase by at least 5 percent, according to mortgage site LendingTree. That $600 million or so in extra spending is likely to bring consumer debt to a new high of $4 trillion.

Still, LendingTree’s chief economist Tendayi Kapfidze says consumers shouldn’t worry. “It’s a big number, but it’s actually not that concerning, because of the income growth we’ve seen since the crisis,” Kapfidze tells CNBC Make It.

One reason he’s not too worried, Kapfidze says, is that the economy is more stable in 2018 than it was in 2008, and real estate values and consumer bank deposits have grown more than debt has. “Deposits have grown by $2.5 trillion more than consumer debt, and homeowners have nearly $10 trillion more in home equity than they did a decade ago,” he says.

Oil’s Plunge Propels Gas Prices Toward Lowest of This Year

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Americans are paying less to fill up their SUVs for a seventh week in a row as the price of gas slides toward yearly lows. CBS MoneyWatch reports:

Since hitting a four-year high near $77 a barrel at the beginning of last month, oil prices have plummeted about 30 percent, briefly sinking below $50 a barrel Thursday. The oil market has been in a slump amid rising stockpiles of U.S. crude and thoughts of slowing global growth and softer demand for the commodity.

The national average for a gallon of gas on Thursday came to $2.51, according to AAA. Drivers in Texas and Missouri were paying just above two bucks a gallon, and motorists paid more than $3.00 a gallon in fives states — California, Washington, Oregon, Nevada and Alaska, according to AAA.

The national average is likely to briefly dip into the $2.30s, but could range from $2.35 to $2.55 a gallon for the rest of the year, a scenario that could change with next week’s OPEC gathering, DeHaan said.

It remains to be seen whether Russia and Saudi Arabia can reach agreement on a cut in production at the upcoming G20 summit, and then whether any consensus holds into an OPEC meeting next week. Lower gas prices could also help keep a lid on inflation and lessen pressure on the Federal Reserve to hike interest rates, something President Trump has loudly advocated against.

Fed Says Millennials Are Just Like Their Parents. Only Poorer

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Millennials, long presumed to have less interest in the nonstop consumption of goods that underpins the American economy, might not be that different after all, a new study from the Federal Reserve says. Bloomberg reports:

“Their spending habits are a lot like the generations that came before them, they just have less money at this point in their lives, the Fed study found. The group born between 1981 and 1997 has fallen behind because many of them came of age during the financial crisis. ‘We find little evidence that millennial households have tastes and preference for consumption that are lower than those of earlier generations, once the effects of age, income, and a wide range of demographic characteristics are taken into account,’ wrote authors Christopher Kurz, Geng Li and Daniel J. Vine.”

“Their findings [PDF] are grounded in an analysis of spending, income, debt, net worth, and demographic factors among different generations. The conclusion that millennials aren’t all that different also holds for the researchers’ more granular examination of expenditures on cars, food, and housing. ‘It primarily is the differences in average age and then differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts,’ they conclude. So much for the young folks favoring ‘experiences’ over tangible goods.”

Google’s Cheap and Super-Simple Cellphone Service Will Now Work With iPhones

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Google’s super-simple and cheap cellphone service will now work with a broader selection of devices, including iPhones from arch-rival Apple. CNBC reports:

“Google Fi (formerly known as Project Fi) is a mobile virtual network operator (MVNO), which means that instead of just using one of the “big four” carriers, it automatically jumps between several cellular networks depending on which has better service. Fi hops between Sprint, T-Mobile, and US Cellular, and also favors Wi-Fi whenever possible, including for calls and texts.”

“The main appeal of Google Fi is a simple pricing scheme that, depending on a person’s usage habits, can end up being cheaper than any of the bigger carriers. It costs $20 for unlimited calling and texting, and $10 per gigabyte of data. Users get money back for whatever data they don’t use, and data usage over 6 GB is free (though Google will throttle speeds after users hit 15 GB). It also has no roaming fees in more than 170 locations.”

General Motors, Sears and Toys R Us: Layoffs Across America Highlight Our Shredding Financial Safety Net

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Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. NBCNews reports:

Today’s aging workforce faces an uncertain future. The announcement this week that General Motors will lay off 15 percent of its salaried workforce and shutter multiple plants in North America was a sobering reminder of how far the American worker has fallen. Unlike most large private sector corporations today, thousands of employees at GM still enjoy some union benefits. The company has reportedly set aside $2 billion for layoffs and buyouts. It’s not much, but it’s something — many workers, if they are laid off en masse, will be far less lucky. Some older Americans are lucky enough to have been grandfathered into generous pension plans and others hope social security and personal savings will be enough to sustain themselves. But for millions of younger people, the outlook is bleaker — an ever-diminishing social safety net, with retirement dependent almost entirely on how well they manage savings. Two-thirds of millennials have nothing saved for retirement.

The private sector pension as we once knew it is all but dead. Public sector pensions, meanwhile, are under attack at the state level. “Companies don’t offer pensions anymore. Social security, when it was established, was meant to be one leg of a stool,” says Gerald Friedman, an economist at the University of Massachusetts at Amherst. “One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have.” What, if anything, are our politicians doing about this? Progressives rail against President Donald Trump, but real retirement security has not been a big enough part of the conversation on either side of the political spectrum. Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. This is a huge problem, and one that liberals in particular should have capitalized on this election cycle.

Your Credit Score to Predict Chances of Self Sufficiency?

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Your Credit Score Isn’t a Reflection of Your Moral Character. But the Department of Homeland Security seems to think it is. What kind of person racks up debts and doesn’t pay them? Your credit score is an attempt to answer this question. Slate reports:

These important three-digit numbers summarize our statistical risk for lenders. The allure of the credit score is its clarity: It cuts through appearances and converts our messy lives into an easily readable metric. The difference between a score of 750 and 600 is obvious. One is an excellent bet for a lender to make; the other is not. On balance, credit scores have made borrowing more convenient, and fairer, for consumers.

But the U.S. Department of Homeland Security wants to use credit scores for an entirely different purpose, one they were never built for and are not suited for. The agency charged with safeguarding the nation would like to make immigrants submit their credit scores when applying for legal resident status.

The new rule, contained in a proposal signed by DHS Secretary Kirstjen Nielsen, is designed to help immigration officers identify applicants likely to become a “public charge”—that is, a person primarily dependent on government assistance for food, housing, or medical care. According to the proposal, credit scores and other financial records (including credit reports, the comprehensive individual files from which credit scores are generated) would be reviewed to predict an applicant’s chances of “self-sufficiency.” The proposal is open for public comment until Dec. 10.

Thanksgiving E-commerce Spend To Top $3.5B, Mobile Accounting For One-Third of Sales

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The 2018 holiday season is predicted to be a bumper year for e-commerce, helped by economic forces like lower unemployment and underlying trends like an ever-growing proportion of shoppers opting to spend their money online, and specifically on mobile devices. TechCrunch reports:

Thanksgiving, a day when brick-and-mortar stores tend to be closed, is a big one for online spending, and so far it’s off to a flying start. Adobe, which puts out real-time analytics tracking e-commerce sales, said that as of 10am ET, $406 million had already been spent online today — growth of 23.2 percent on 2017. Adobe tracks e-commerce transactions across 80 of the top 100 US online retailers and says its analytics are based on over 1 trillion visits to retail sites and 55 million SKUs.

At this rate, Adobe said it believes that sales today will total a record $3.5 billion, versus $2.9 billion a year ago. Notably, this is revised up from figures Adobe put out earlier this month, when it projected $3.1 billion in sales today. It’s the first day of the “big five” for holiday shopping. Figures from Internet Retailer research predict that the total amount that will be spent over the period between Thanksgiving and Cyber Monday will be $21.6 billion. While rising tides might lift all boats, the biggest will reap the most rewards: it estimates that Amazon will account for nearly one-third of all sales.

28% of Christmas Shoppers Still in Debt from Last Year

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Almost 3 in 10 shoppers are going into the holiday season still carrying debt from last year’s festivities. CNBC reports:

For some people, opening up a credit card statement is like a visit from the Ghost of Christmas Past.

Holiday shoppers are expected to spend generously this year, with the National Retail Federation estimating the average consumer’s outlay at $1,007 for everything from gifts to food to holiday attire — a 4.1 percent increase from last year. Another analysis, from NerdWallet, anticipates an 18 percent jump on gift spending alone, to an average total $776.

But that doesn’t give the true picture of the cost: 28 percent of shoppers are entering this holiday season still paying off debt from last year’s festivities, according to NerdWallet.

Experts say that if you’re among those still lugging around debt from last year, now is a good time to pause and strategize, before Black Friday week sets off a long stretch of frenzied spending.