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Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: April 13th, 2020 | 0 Comments

1. IS IT A BULL OR A BEAR? – At last Thursday’s (4/09/20) close of 2790 (the market was closed on Friday), the S&P 500 is up +25% from its 3/23/20 close of 2237, and down 18% from its 2/19/20 close of 3386. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. HARD TO CATCH UP – A 30-year old who is investing $500 at the beginning of every month in a tax-deferred 401(k) will accumulate $588,032 by age 60 if the funds grow at +7% per year. If that individual was forced to suspend his/her monthly deferral for 5 years from ages 35-39, he/she would have to earn +8.8% per year from ages 40-60 to accumulate $588,032 by age 60. This mathematical calculation ignores the impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

3. YOUR LIFE – If you were born in 1987 and you turn age 33 in 2020, you have lived through 5 bear markets and 3 recessions, the 1987 “Black Monday” stock market crash on Wall Street, the 9/11 terrorist attacks, the 2008 global real estate crisis, and now the 2020 pandemic. You have also lived through 4 bull markets (including the 11-year bull that ended on 2/19/20), 4 economic expansions and you have benefited from the lowest interest rates in history. Your life expectancy as of today: 47.3 additional years on earth (source: BTN Research).

4. SMART – 39% of millennials have at least a college bachelor’s degree, and another 28% have attended college but not graduated. Millennials were born between 1981-97 and are ages 23-39 in 2020 (source: Pew Research).

5. NOT SMART – 54% of Americans surveyed in February 2020 say that if they inherited $1 million today, they would “spend it” as opposed to paying off debt or investing (source: Charles Schwab Modern Wealth Survey).

6. RISKIER – $3 trillion of the $9.6 trillion corporate debt market in the US today was issued by non-investment grade corporations, i.e., the debt instruments are “junk” or “high yield” bonds (source: Federal Reserve).

7. HOME GROWN FOOD SUPPLY – The United States imports just 15% of our nation’s overall food supply (source: US Food & Drug Administration).

8. ACCESSING YOUR OWN MONEY – The CARES Act contains a provision that allows a taxpayer who has been negatively impacted by COVID-19 (e.g., infected by the virus, or loss of a job) to access up to $100,000 of funds during 2020 from a pre-tax retirement account before his/her age 59 ½ and not be subject to a 10% early withdrawal penalty. All funds withdrawn would be subject to ordinary income taxation, but the tax bill may be spread out over 3 years (2020-2022) and the amount withdrawn may be returned to the retirement account to avoid taxation. Please consult a tax advisor for details (source: CARES Act).

9. DON’T HAVE TO BE A CITIZEN – The $1,200 per person stimulus payment created in the CARES Act (paid to individuals making less than $75,000 and couples making less than $150,000) is available to non-citizen immigrants working legally in the United States on H-1B and H-2A visas (source: CARES Act).

10. VERY LOW COST – The $349 billion of loans being made to small businesses (companies with less than 500 workers) as part of the CARES Act will be done at a 1% interest rate (source: CARES Act).

11. NO COMMUTE – 3 out of 5 Americans (59%) now forced to work from their homes during the coronavirus crisis would prefer to continue to work from home when the pandemic subsides, while the remaining 2 out of 5 workers (41%) would choose to work in a traditional office environment away from home (source: Gallup).

12. AT THE PUMP – The national average price of gasoline has dropped for 44 consecutive days between Wednesday 2/26/20 and Friday 4/10/20, falling 59 cents a gallon to $1.88 a gallon (source: AAA).

13. HOME BUILDING – 888,000 single-family homes began construction in 2019, the 8th year of increasing home starts since this measurement bottomed at 431,000 in 2011. The all-time US record for home starts in a single year is 1.72 million in 2005 (source: Census Bureau).

14. TRIPLED – The average cost of 1-year of college at an average 4-year public institution (including tuition, fees, room and board) has tripled over the last 22 years, rising from $7,470 for academic year 1997-98 to $21,950 during academic year 2019-20 (source: College Board).

15. VERY WELL PAID – Roger Goodell has been the commissioner of the National Football League since 9/01/06. Goodell has earned at least $40 million per year each year since 2013 (source: NFL).

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