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Bill’s By The Number$

Posted by: Kim Vo | Posted on: February 27th, 2017 | 0 Comments

1. ABOVE AVERAGE – The S&P 500 has gained an average of +1.6% (total return) during the 1st quarter over the last 25 years (1992-2016). The index is up +6.1% YTD through last Friday 2/24/17. 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. DEPENDS – An individual with $1 million invested 100% in the S&P 500 as of 1/01/73 withdrawing an inflation-adjusted $100,000 per year would be out of money in 9 years. A second individual with $1 million invested in the S&P 500 as of 1/01/82 withdrawing an inflation-adjusted $100,000 per year would have $4.46 million remaining after 35 years, i.e., as of 12/31/16. This calculation ignores the ultimate 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 or performance. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

3. U.S. DEBT HOLDERS – The Federal Reserve owned more Treasury securities at the end of 2016 ($2.46 trillion) than Japan ($1.09 trillion) and China ($1.06 trillion) combined (source: Treasury Department).

4. BORROW TO LIVE – Aggregate household debt in the United States reached $12.58 trillion as of 12/31/16, just $100 billion below our all-time peak debt total of $12.68 trillion as of 9/30/2008 (source: Federal Reserve).

5. IN THE RED IN FEBRUARY – The last time that the month of February did not produce the largest monthly deficit in any fiscal year was 2002 (i.e., the 12-month period from 10/01/01 to 9/30/02) or 15 years ago (source: Treasury Department).

6. NOT WORRIED – 51% of 1,205 working adults (between the ages of 45-65) who were surveyed in January 2017 have retirement savings of at least $100,000, but another 27% have saved nothing (source: Ipsos).

7. TICK, TOCK – A child born to a couple in February 1995 (22 years ago) who started college in the fall of 2013 is now scheduled to graduate from an average 4-year public in-state college in May 2017. If the child’s parents had invested $130 per month beginning at the child’s 1995 birth and had earned an annualized +8% on all invested dollars, the parents would have been able to pay for their child’s 4-year college costs of tuition, fees, room and board (the 4-year cost was $76,974). This calculation ignores the ultimate impact of taxes on the investment account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance. Actual results will fluctuate with market conditions and will vary (source: College Board).

8. DO I REALLY NEED IT? – Only 36% of all jobs in the United States require education beyond high school, i.e., 64% of American jobs require a high school diploma or less. 27% of jobs do not require any formal educational credential (source: Department of Labor).

9. GREAT FOR FIRST-TIME BUYERS – Home buyers that borrow money from FHA-insured lenders may be eligible for a minimum down payment of just 3.5%, and most of the home buyer’s closing costs and fees may be included in the loan. Borrowers are required to purchase mortgage insurance which protects the lender in the event the borrower defaults (source: Federal Housing Administration).

10. TIGHT CREDIT – If the same credit standards used by lenders in 2001 were used during the 6 years of 2009-14 (i.e., following the 2008 global financial crisis), an additional 5.2 million mortgage loans would have been made, including 1.2 million mortgage loans in 2014 alone (source: Housing Finance Policy Center at the Urban Institute).

11. REAL ESTATE – Home prices have appreciated +16.6% over the last 5 years (12/31/11 to 12/31/16) in the New England states, half the +33.1% growth experienced nationwide (source: Federal Housing Finance Agency).

12. HIGH, LOW AND AVERAGE – The national unemployment rate as of 12/31/16 was 4.5%. Ames, IA (2.1%) had the lowest unemployment rate while El Centro, CA (18.8%) had the highest (source: Department of Labor).

13. ONE CHOICE – 32% of the 3,144 counties in the United States have just one health insurance option available through the federal insurance exchange or through their state-run exchange (source: Kaiser Family Foundation).

14. CROSS YOUR FINGERS – 28% of our nation’s 612,079 bridges are at least 50 years old and have never received any major reconstruction work (source: American Road and Transportation Builders Association).

15. NICE PUTT – Canadian professional golfer Adam Hadwin, famous for his score of 59 in the 3rd round of a PGA tourney in California on 1/21/17, went a span of 314 holes (i.e., equivalent to more than 17 consecutive rounds) during the 2016 season without incurring a 3-putt (source: PGA).

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