The Weekly Wealth of Knowledge is your download of this week's most important topics related to financial planning, the markets, and our community. In this issue:
- July is Independence Month - (2 minute read)
- Teaching Children Financial Independence - (2 minute read)
- Historic Cash Surge into Banks - (3 minute read)
Check out the video below from a member of our team!
July is Independence Month
This month, our country turns 244 years old. Over the years, the United States of America has seen its struggles as well as successes, but many of its core values have been founded on the simple idea of independence.
Over the course of July, we will be celebrating this fact in our blogs, social media, and other communications. In this day in age, financial planning services can be accessed through a number of distribution channels. National banks and brokerage houses dot every main street from sea to shining sea, and their messages infiltrate just about every communications medium available. MONECO’s founders decided a long time ago to choose a different path. At MONECO Advisors, we work independently, which allows our team to truly put every client’s best interests first and provide a partner to help navigate your financial future. So while we all will celebrate our country’s independence all month long, let us also not forget the power of working with an independent financial planner like MONECO Advisors!
Click here to find out why MONECO was founded!
Teaching Children Financial Independence
Approximately 80% of parents provide at least one type of financial aid towards their children, including half of all parents who still pay for their kids' phone bills, according to a study done by Merrill.
Although it is nice to help support your children financially, it ends up backfiring in the long run. The same study by Merrill found that 3/4 of parents are putting their children's needs before their own retirement needs.That being said, when it comes time to retire, these parents will run out of money and become a financial burden to their children.
In order to not become a financial burden later, it is important to develop some financially sound strategies with your children so that they can support themselves once they reach adulthood. Help your children appreciate and understand the value of the dollar with an e-book that will help guide you in the process.
Click here to download the "Yes, You Can...Raise Financially Aware Kids"
book for free.
Historic Cash Surge into Banks
An “eye-popping” $2 trillion in cash has been stashed in deposit accounts at U.S. banks since the COVID-19 pandemic first hit the country in January.(1)
This surge of money into banks has no precedent in history.
Several factors have contributed to the cash surge, including $600 billion in government-sponsored loans to small businesses, direct checks to individuals, and expanded unemployment benefits. Additionally, Americans have had fewer options for spending their money while on lockdown.
So, how long will the $2 trillion remain in the bank? That’s uncertain and the subject of much debate.
We do know that individuals rely on banks to keep their money safe from loss or theft, to make payments easily and inexpensively, and to maintain records of financial transactions. (2) In general, however, individuals don’t expect bank accounts to generate much interest income. In fact, the average interest rate for savings accounts is 0.1%.(3,4)
What’s worse is that banks are not expected to adjust interest rates any time soon. Simply put, they don’t need the money.(5)
For many, banks play a key role in their personal finances. But sometimes, it’s good to revisit your accounts to see if they still are in line with your situation and goals. If you have any questions about the role of certain accounts, please give us a call. We'd welcome the chance to discuss what strategies may fit your situation.
1. CNBC.com, June 21, 2020
2. Federal Reserve Bank of Atlanta, 2020
3. BankRate.com, May 5, 2020
4. The Federal Deposit Insurance Corporation (FDIC) insures bank
certificates of deposit up to $250,000 per depositor, per institution, in
5. CNBC.com, June 21, 2020
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