There are many economic indicators we can look at to increase our perspective of our country’s current situation. One of those indicators is unemployment.

Unemployment refers to a person who is not working, but is actively seeking employment, yet are unable to find work. The number of people working, or not working, is closely related to how healthy an economy is and if it’s growing at a reasonable rate. When people aren’t working, they lose out on wages. This has a domino effect which effects the entire country. If many families cannot buy goods or services, the businesses that would benefit from those customers lose out on income, which at high rates, leads to layoffs, resulting in higher unemployment. And the cycle continues. This indicates that the economy is producing less than it could.

However, there are shortcomings in using unemployment as an economic indicator. Only people who are actively seeking employment are considered in the data. Those who have given up the job search are not included, so the number of people not working (excluding those that are retired, physically unable, or enlisted military) is actually higher than what the unemployment data shows. In other words, the unemployment rate may show a decrease, but there are actually just as many, if not more able-bodied people not working.

Long story short, using unemployment data to help determine the state of our economy may paint a rosier picture than what currently exists. It's important to look at both changes in the unemployment rate as well as in the labor force participation rate.

It’s that time of year again; time to start the holiday shopping. As you make your lists of who is getting what and where you’re going to shop consider checking local small businesses first. One of the most impactful ways you can support our teetering economy is to shop small and keep your dollars local.

We’ve written before about how small businesses represent over 99% of all U.S. businesses. Nearly half of American employees work for a small business, making up over 33 million businesses. Those are pretty staggering statistics, which is why it is so important to keep those businesses open and thriving.

Small businesses are not just the critical backbone of our economy, they are also the factories in which innovation and creativity are forged. Small businesses can offer unique products or services that might be harder to find in a big box national chain. Small business owners are usually experts in their field and are passionate about what they do. They also tend to offer better customer service. These places help bring character and life to the places we live.

When you shop local, you’re doing more than just helping a business grow, the money they earn supports local jobs and usually stays within the community. Their tax dollars go towards local public services. When it comes to finding donors and support for other organizations, small businesses are usually the primary contributors.

In our modern world of technology, it has become even easier to support your local businesses because most small businesses have a website and support online shopping. The majority also have some sort of social media platform, allowing them to connect with their community and customers. Oftentimes, small businesses will offer special deals or discounts via their social media pages to drive up their online connections.

Here at Yield Financial Advisors, Inc., we enjoy supporting small or locally owned businesses whenever we can. Our newsletter you’re holding is printed by a small business. Our technology service provider is another small business. We bank at local banks, which provide quick and friendly service. With each of these connections comes competitive pricing, exceptional service, and the opportunity to build relationships, and that is a very valuable thing.

Yield Financial Advisors, Inc. works to help small businesses become profitable by offering consulting services, bookkeeping, retirement planning and 401k consulting, tax planning strategies, as well as comprehensive financial planning. Our goal is to assist small businesses in becoming profitable by giving them the tools they need to establish a strong foundation to build on for long term success. By understanding the role of profits in a small business, owners can enjoy a return on their investment. Afterall, earning an income, (salary or wage) from a small business is a return on the labor provided to the business. Earning profits from a business is a return on the investment into that business. They are two completely different earnings.

There is nothing like experiencing the satisfaction of seeing small business owners’ ideas develop into a successful business that provides for their family and contributes to their community. Whether it’s a local bank, service provider, or boutique, these small businesses help make our cities unique and bring value to the places we live. It may take some planning but consider shopping your local small businesses before checking the big retailers this holiday season. And if you know a small business we can help, give us a call.

Photo by Mike Petrucci

Many of you know that besides being a great financial advisor, haha, I also love photography. A friend in 9th grade suggested that I take a photo class, instead of the typical shop classes, (I’d already taken wood shop, drafting, metal shop, print shop, and horticulture class). I really liked all those classes, but I fell in love with photography. And why not, developer ran in my veins!

In 1938, at 30 years old, and after finishing a stint as a prospector, my father enrolled in Trade Tech College in Los Angeles, to study photography. I think the first thing they did was hook him up to an IV with developer, as he too fell in love with photography. He discovered his niche and supported his family as a professional photographer.

The influence of my father and the enjoyment I found in my high school photography classes led me to a lifelong love of photography; it is something that continually captivates me. Being able to capture a moment of splendor, curiosity, or beauty is a wonderful creative experience; sharing those images with people is just plain fun!

On October 14, I was able to capture the annular solar eclipse. I had planned to leave around Friday at noon and drive six hours to west Texas to a spot I had mapped out to take my photos. Taxes got in the way, and I finished my last return and client meeting at 8:00 pm. Rushing home, I packed my gear, and hit the road by 8:50 pm to drive west.

Andrews, Texas is a small town about 45 minutes north of the Midland/Odessa area. I grabbed some breakfast, looked around the town, then drove a few miles west to a place I was sure would be as close as possible to be the direct path of the eclipse.

Sometimes we make a great effort in our work, finish a tax return, answer questions, help someone in need, or just do a kind deed. At times we are immediately blessed, other times the blessings come down the road, but they always come. This was one of those times where I felt immediately blessed; and I am so grateful for the image captured, the time spent to ponder on the magnitude of the sun, moon, and my place on our home planet earth.

Thank you all for being a part of my life and allowing me to share an amazing experience with you. Total trip: 24 hours 30 minutes. And worth every second!

In today’s world most people are running to and fro, here and there, and everywhere in between tackling life’s busy schedule. Few people have the luxury of free time...or do they? People tend to have more time than they realize, being caught up in the illusion of busyness. Between email, texts, social media, and many other busy distractions, there are precious moments that could be spent improving your health and quality of life. So are there better things to be doing with our unaccounted for “downtime moments?”

Having a hobby has been shown to have many benefits, especially to one’s mental and emotional health. A hobby is any activity that you do for pleasure during your leisure time. This could be anything from physical, artistic or creative, or intellectual activities.

But what if you don’t have a hobby? Find one! This in itself could be a very rewarding process in which you learn more about yourself. The process of finding a new hobby can be very rewarding. Try a multiplicity of things that make you feel happy or excited and if when you end an activity you feel fulfilled or rejuvenated add it to your “keep list”, if not, move on to the next activity.

So, unwind and enjoy those valuable moments in which you can indulge in things that make you happy and healthy! Don’t be discouraged with the effort needed to accomplish a hobby project, all good things in life take effort, stretch yourself a bit doing something new.

No hobbies yet? That’s ok, here’s some ideas to get you started:

It’s good to have all your assets listed, net worth calculated, personal information, passwords, emails, etc. laid out for your surviving relatives, but this is not enough. If you don’t have an estate plan your assets will have to go through probate, where a judge will decide how to divide your estate according to your state laws. Once in the court system your will, your assets, and everything attached to your estate, including who inherits each asset, will become public information. This can be a long, expensive process. It can be frustrating and cause contention within your family. This is not a situation you want your loved ones to endure.

It’s better to have a will. In a will, you can dictate who should receive your assets and how you want your possessions distributed. Unfortunately, as previously mentioned, this will not save you from probate. The only thing that changes is the judge will divvy up your assets based on your expressed wishes. Your assets will still be locked up and inaccessible to your heirs until the legal process has run its course, again costing your family time, money, and a bucket load of frustration.

The best way to protect your assets and your loved ones is to create an estate plan that includes a revocable living trust (trust). A trust allows you to not only dictate who gets what, but also when and how, along with whatever other provisions you would like to include. A living trust avoids the lengthy, expensive, public probate process.

A living trust is a legal arrangement set up by someone (the grantor(s)) to protect their assets and their wishes for their family. A living trust designates a trustee and gives exact instructions on how things should be handled at the time of the grantor’s death. The trustee then manages the assets contained in the trust according to those directions and the beneficiaries’ best interests.

Within your trust you can decide not just what your heirs will receive, but when and how. This helps protect your heirs from themselves, irresponsible spending, unforeseen issues that may arise in the future, or from your assets going to unintended people. Some people may want to provide specific benefits to children or grandchildren, like college funding or help with buying their first home. It can also help protect assets for your adult children in the case of divorce. Having a trust is particularly important when there is a second marriage, as the state laws may not distribute assets the way you want.

A trust brings all of your assets together into one plan and provides beneficiary designations. This provides protection and privacy for your estate and loved ones. And because a trust is revocable while the grantor(s) is alive, the directions and stipulations set forth can be changed and revised at any time by the grantor.

Taking care of your family doesn't have to end at death. IF you take the time to establish the appropriate estate plan and include a living trust, your care and protection of your family and loved ones can continue long after death.

Photo by : Kevin Delvecchio

On August first of this year, Fitch Group, one of three top credit rating agencies in the United States, announced a decrease in the credit score of the United States, taking it from a AAA rating to a AA+. This credit rating expresses the forward-looking opinion of the Fitch Group as it looks at the strength of the institution’s ability to pay back its debts. Back in 2011, Standard and Poor’s downgraded the US for the first time in the U. S’s history. Both times have come after issues and debates regarding the debt ceiling.

While neither hit was a huge drop, investors use these rating systems to gauge whether certain investments are likely to default or yield a reliable return, for lending and borrowing decisions, as well as strategic planning. Most economists and investment specialists believe there won’t be too many investors bothered by the decrease, especially those that have a long-term investment strategy.

The immediate concern regarding the downgrade by Fitch was that it could potentially weaken the foundation of trust that our global financial system is built on, calling into question whether the U.S. government will be able to pay back its debts. If the investors that hold the U.S.’s debt lose that trust it could result in something similar to a bank run, in which our government would have to pay back more than what they have available. The downgrade can be seen as a red flag alerting that the U.S. government has a spending problem, which erodes confidence in their fiscal management.

Luckily, in the after-hours trading following the downgrade, the U.S. Treasuries held steady. Politicians and economists immediately assured investors and citizens alike that the downgrade was “arbitrary and of no concern”. However, global news reports expressed unease and questioned the U.S. government’s ability to manage their debt and called into question their governance system. This is a great concern, which our politicians must address, they can’t go forward piling on more and more debt.

Since 2002, the federal government has run a deficit. That means each fiscal year, spending exceeds revenue, which then is added to the national debt. It is projected that spending will continue to outpace revenue by increasing amounts each year, forcing the government to borrow more every year to fund its operations.

In order to receive an upgraded score with Fitch and restore their previous good standing, the government will have to bring down their deficits, which are currently three times the AAA rating median. (Meaning of the 10 countries with a AAA, rating our country is running a deficit 3 times higher than the median of those 10). They will also have to implement long-term fiscal solutions and will have to show that their governance is on the mend.

With our national debt over 44 trillion, the federal government is clearly living beyond its means. Addressing our national debt is critical in securing our national economic future.

Anne Frank once wrote, "No one has ever become poor by giving." Not only was she correct, but the data reveals that people that give get richer. Studies have shown time and time again that when people give money often, they tend to experience financial growth and abundance. It may seem hard to believe, it may even seem counterintuitive. How can giving money away get you more money?

Psychologist from the University of Oregon found that charity stimulates parts of the brain which are associated with meeting basic needs like food and shelter, suggesting that our brains know that giving is good for us. Not only that, in the 1980’s a study looked at how people’s brains reacted to the endorphins their brains released when being charitable. The psychologist showed that when people volunteer or help others, the giver got what they called, “the helper’s high.” In other words, charitable acts can give you a mild sense of euphoria and happy people are more productive. Productive people, generally, are more successful, which translates into more earning power.

That’s all good and well, but how does that make you richer? One way is when others see an individual behaving in a charitable way, they elevate those people in their minds to positions of leadership. A study from University of Kent showed that 82% of the leaders elected from the experiment group were the biggest givers. In real life this translates to those that are charitable are often more likely to receive promotions because they have already been viewed as worthy leaders.

Our nation is a generous nation. In 2022 Americans gave $499.33 billion to charity, and the largest source of giving (64% of that total) came from regular people like you and me. The amazing multiplicity of charity can be seen at a national level. Giving effects our countries GDP! What’s remarkable is U.S. government data show that GDP per person in American has risen about 150% over the last 50 years, but the donated dollar amount per person has risen by about 190%. Donating, then, may not be just an act of charity, but also one of patriotism.

Whether neurochemistry or something greater, years of studies and experiments, myriad analysts’ data, and the day-to-day evidence we see with our own eyes proves: when we give we prosper. Many successful people in the world attribute their success to investing their time and money in the people around them.

"We make a living by what we get. We make a life by what we give."- Winston Churchill

Photo by Markus Winkler

While it might not be the kind of awareness month that gets decorations, a parade, or its own special greeting card, September is Life Insurance Awareness Month, and it is definitely something our country needs more awareness of considering only 52% of Americans report having any life insurance. Of those 52% of Americans, 41% of them say they don’t think they have enough. That’s a lot of families, that will have a hard time covering, not just the cost of a funeral, but any debts or on-going expenses. Life insurance is one of the most basic financial tools available, it’s like having a hammer in your toolbox.

In the spirit of Life Insurance Awareness month, I’d like to bring to light some of the consequences of not having, or not having enough life insurance. It’s easy to push these sorts of things to the side, but I truly believe planning for and taking care of one’s family is of the utmost importance.

This may come as a shock, but when you die your paycheck stops! That means if your spouse wasn’t working, he or she will have to find work, and in the meantime, they could be incurring debts as the bills pile up.

Now, just because your income disappears doesn’t mean your debts do too. Unfortunately, debts sticks around until they are paid off. If you have any debts at the time of your passing, without life insurance it may be very difficult for your family to cover them. For example, if you were still paying on your mortgage when you passed away, and there was no life insurance to provide money for your family’s needs, it may force your family to sell and relocate during an already difficult time.

Aside from providing future income for your family there are end of life costs to consider. The average funeral costs between $7,000 and $12,000 (this excludes the cost of a burial plot). If you don’t have life insurance, that amount could sink a struggling family. Years ago when I started in this business, a friend/church leader and I had a conversation, he was a mortician by profession. He said, “Wendell the thing I hate most about my job is putting a family in debt to bury a loved one, especially a child.”

Life insurance, creates an instant estate or pot of money. According to the Lending Club, 60% of Americans live paycheck to paycheck, which means there’s little chance of a substantial savings or nest egg being left to those families. Even with retirement savings, there is most likely not enough money when the bread winner passes away. It would be better to cut back on retirement savings and have some extra life insurance, at least while children are in the home. Life insurance gives your family the ability to plan for their future; without it they may end up in a desperate situation.

So how much life insurance do you need? That will be different for each family. However, there are some guidelines that can help you establish your own family’s needs. Most experts recommend having at least ten times your annual income as a starting point. At the very minimum, your coverage should allow for funeral costs and other end of life expenses, as well as any debts you currently have. As you age the reasons for life insurance often change.

Purchasing a life insurance policy is a proactive strategy, a way to protect your loved ones. It allows your survivors freedom from debt and a solid foundation to build their finances on. It certainly blessed my mother when my father passed away when I was a sophomore in college. It’s a light to your family during one of their darkest moments.

“The protection of a man’s person is more sacred than the protection of property.”

– Thomas Paine

The idea of instant payments isn’t new; in 2017 The Clearing House’s system, RTP (Real Time Payments), went live. Since then, it has steadily grown in demand. In response, the Federal Reserve Bank (the Fed) recently announced their new instant payment infrastructure, FedNow, is live.

The FedNow initial release will include optional features like fraud prevention tools, the ability to join initially as a receive-only participant, request for payment capability, and tools to support participants in their handling of payment inquiries. Additional features and service enhancements will be introduced over the coming years. The Federal Reserve plans to make FedNow available to all Americans as it continues to expand and develop more features and services.

In addition to functioning like and offering the same benefits as The Clearing House’s RTP, FedNow will also allow banks to connect to their master account at the Federal Reserve. There are a few other differences, mostly coming down the default transaction limit for FedNow being $100,000 with the participating financial institution having the option to request up to $500,000. With RTP, on the other hand, the transaction limit is $1 million. Right now, it is unknown if the Federal Reserve will adjust the limit to match that of RTP.

The FedNow service enables individuals and businesses to send immediate payments through their participating depository institution. FedNow is designed as a neutral platform that can support a variety of instant payments and allows the service providers something they can build on in order to offer other value-added services.

The Fed is hoping this will direct more of these instant payments back through their processing systems. Perhaps leading them to develop other forms of instant payment – like a crypto currency.

So what does this mean for you? If your bank is participating in the FedNow program you or your business will be able to send and receive money in real-time. The current cost for this service is a fee of $.045 per transaction, to be paid by it’s sender, and a fee of $.01 for a request for payment message, to be paid by the requester. The Fed has published a list of banks and credit unions that are currently using the FedNow system, which you can find on our website here: www.yieldfa.com/FedNowBanks.