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Can Generation Z Achieve Financial Prosperity?

The youngest generation, soon to become fully independent adults, have a lot of expectations to meet up to. After all of the jokes and trends of millennials struggling to make a life for themselves, you have to wonder if Generation Z (ages 13-17) will be able to beat the stereotypes and restore the vision of the American dream for the young and abled. 

According to the Walton Foundation and their survey on 4,000 people involving an even mix of Millennials and Generation Z, they certainly seem optimistic about the future:

  • 85% of Generation Z believe they will be as or more successful than their parents
  • Just 8% believe they won’t have the same financial independent as their parents
  • 20% believe the COVID-19 pandemic has made it “a little harder” or “not at all harder” to succeed in life

However, their spending habits may paint a different picture, according to the 40th “Taking Stock With Teens” report released by Piper Sandler: 

  • Annual spending is a $2,150, which is an all-time low
  • 48% of Generation Z believe the economy is worsening
  • 23% said COVID-19 has impacted their ability to work (33% are employed part-time)
  • Favorite brands of shoes include Nike (51%), Adidas (11%), and Vans (17%)
  • 47% are open to consuming plant-based meat or are already doing so

For Generation Z, who represent 33% of the world population, their ambitions are certainly noble and should be encouraged. But words mean nothing without action, and they have a LOT to prove to the world as the COVID-19 pandemic slowly comes to a close. 

I don’t think it’s impossible for them to succeed. But they certainly have more obstacles than their predecessors. 

What do YOU think about Generation Z? Can they achieve financial prosperity and beat out the millennials? Reply to this newsletter and share your thoughts with us!

A Biden Presidency Will Be SUICIDE for the Freelancing Economy…

There are numerous god-awful ideas within a potential Biden presidency if he takes on the role of POTUS on November 3rd. But one under-looked policy would devastate freelancers and deprive them of their ability to consistently get work. 

No formal name for this policy exists, but here’s what you need to know: The federal law proposed by Biden is eerily similar to AB-5, which categorizes freelancers as full-time employees. While this gives them certain protections, it means that companies by default have to treat them as such. 

This automatically means more taxes for the company to pay, more documentation to prove that the nature of a freelancer’s work is vastly different from the businesses’ usual activities, and cover expenses such as health insurance. 

Not to mention that Biden supports the Protecting the Right to Organize (PRO) Act, which also uses similar criteria as the AB-5 law to decide who falls under the category of “freelancer” and who does not. 

It’s a bad move that affects an economy consisting of nearly 59 million people and growing by a couple of million with each passing year. And considering it’s how many people are now making a living, it will definitely take the “free” out of “freelancer”…

When Index Funds Are Inferior to Buying Individual Stocks

Index funds come with a lot of advantages. You get to put a certain amount of money away on a frequent basis into a financial instrument which “does the work” for you. No research required – just dump the move and watch it grow over several years. 

But in certain instances, you would be better off picking individual stocks to add to your portfolio. 

When you’re someone who is focused on a certain industry (or the deliberate avoidance of certain industries), you get to pick and choose the companies who you feel will end up on top. An index fund, on the other hand, forces you to take on the companies you like and the companies you hate. 

Additionally, remember that an index fund’s primary purpose is to MIMIC the market, not BEAT the market. And if you’re an aggressive high-risk investor who wants to go above and beyond, you can’t afford to play the same game as everyone else. Which means you have to assemble your own portfolio from scratch and put in the time to do your own research. 

Personally… I think it’s perfectly fine to do both. Have one fund dedicated entirely to index funds and “safe” investing, and then another fund dedicated to your “risky” investing. Why not get the best of both worlds instead of choosing one over the other? 

Investing in Real Estate Without Investing in Real Estate? Huh!?

Real estate is always touted by the personal finance space as the fast track towards financial independence and early retirement. Just buy a few properties, fix them out, charge a higher rent price, and sit back as the monthly payments are deposited into your bank account. 

But let’s get real: Not everyone can afford a 20% down payment for some of the properties on the market. Not to mention the constant maintenance and the headache of having to deal with multiple tenants and never-ending property issues. 

There’s an easier way to go about it, and it’s through an instrument called a “real estate investment trust” (REIT). It’s almost like buying stock in real estate, but through companies who use several commercial rent properties to generate income. And the best part? 90% of the annual taxable income at minimum has to be paid out to investors. 

They’re slightly more volatile than bonds but less volatile than stocks. And with a 4% annual ROI on average, it allows you to reach a happy middle ground. You can choose to go for individual REITs (much like you would with stocks), or go for an exchange of REITs such as the VNQ. 

With that information, do as you please! 

How to Protect Yourself Against Brokerage Hacks

With the news of thousands of Robinhood investors having their private accounts hacked by malicious players and their funds stolen, it’s more important than ever to have a conversation about financial security. 

So here are some friendly tips to help keep yourself and your money safe:

Read any emails you receive from a brokerage VERY carefully! Watch out for sender emails that are different from the official company email, match them against official emails you have received, and never be afraid to contact the brokerage in order to confirm the legitimacy of these “fake” emails. 

DO NOT conduct any investing or trading on public WiFi networks. They are extremely susceptible to cybersecurity hacks and your private information could be exposed. (Anybody who trades and travels the world can attest to this). If you have to, use a virtual private network (VPN) to keep yourself protected. 

Watch out for any software you install on your computer that seems suspicious in nature. Certain viruses and spyware can track your keystrokes and obtain your username and password… on that note, make sure you use two-factor authentication whenever you sign in to your brokerage account. 

Keep in mind that brokerage accounts do not have legal protections against unauthorized access, and even the brokerages are the final judges on whether or not “unauthorized activity” was responsible for account losses. 

What security tips do YOU have for people who want to invest safely and avoid getting hacked? Reply to this newsletter and share them with us!

Southern USA: More COVID-19 Cases and Deaths but Better Economic Activity

The mainstream media loves to crap all over the southern states of America for how they have handled the COVID-19 pandemic. With the higher number of deaths and infections they’ve had to date, it’s not the most illogical point to make.

But as the Wall Street Journal points out in a recent article, they are outperforming all of the other states when it comes to their economy. Just take a look at some of the data featured in the article…

  • Employment is down 6% in August for the South, versus 7% for the Midwest, 8.2% in the West, and 10.6% in the Northeast
  • Unemployment is at ~7% for the South, versus ~8% for the Midwest, ~11% for the Northeast, and ~9.5% for the West
  • Consumer spending in the south is up ~0.75%, while it is down ~2% for the nation as a whole
  • Individual mobility is down by ~25% for the South, versus ~40% for the Northeast, ~22% for the Midwest, and ~35% for the West

Other factors where the South is exceeding its competitors includes the percentage of restaurants taking reservations, and the loosening of COVID-19 lockdown restrictions. 

I think the play by the Southern states is clear: Take on some more damage upfront and endure some heat in the short-term in exchange for a faster economic recovery in the long-term… and hopefully a faster termination of COVID-19 itself.

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