When it comes to financial planning and insurance, there’s a crucial component that tends to fly under the radar but is absolutely essential for those with significant assets: umbrella insurance. As a health professional with a high net worth, you've probably spent countless hours helping patients protect and improve their physical well-being. Similarly, umbrella insurance acts as a safeguard, protecting your financial well-being and ensuring that the wealth you've worked so hard to build remains secure.

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Think of umbrella insurance like the extra padding you might wear during a high-intensity workout. Just as that padding provides added protection against unexpected injuries, umbrella insurance provides an additional layer of financial protection beyond the limits of your standard auto, property, and liability insurance policies. For those with substantial assets, especially if you have over $1 million in assets (and considering inflation, aiming for coverage around $1.5 million is even more prudent), this type of policy is not just beneficial but essential in our increasingly litigious society.

Let’s dive deeper into why umbrella insurance is a crucial part of financial planning for health professionals.

Coverage Limits vs. Potential Risks

Imagine you’re treating a patient with a seemingly minor injury, only to discover that the underlying issue is much more severe. Standard auto and property insurance policies work similarly; they come with coverage limits that can quickly be exhausted in the event of a severe accident. For example, if you’re involved in a multi-car collision with significant property damage, the Illinois state-required minimum coverage for property damage of $20,000 might barely scratch the surface of the actual costs. This is where an umbrella policy steps in, covering the excess and protecting you from having to dip into your personal savings or sell off assets to cover the remaining expenses.

Protection Against Lawsuits

In your career, you might have seen how a small misstep can lead to significant consequences. The same applies to financial liabilities. If your standard insurance policy’s limits are exceeded, you become vulnerable to personal lawsuits. For instance, if an accident results in damages that surpass your coverage limits, you could be held responsible for the remaining costs, which might include hefty medical bills, vehicle replacement costs, and legal fees. Umbrella insurance ensures that these additional costs don’t come out of your pocket.

Cost-Effectiveness

Despite its comprehensive coverage, umbrella insurance is surprisingly affordable. Think of it as investing in a premium pair of running shoes: the upfront cost is minimal compared to the comfort, support, and injury prevention they provide. With premiums as low as $300 annually for a $2 million policy, the peace of mind and financial security umbrella insurance offers are well worth the investment.

Adaptability to Changing Circumstances

As a health professional, you know that the body’s needs change over time, and what worked for your patients a decade ago might not be sufficient today. Similarly, as your circumstances evolve and your assets grow, it’s crucial to reassess your insurance needs regularly. What might have been adequate coverage in the past could fall short due to inflation, increased asset values, or changes in the legal landscape. Umbrella insurance provides the flexibility to adjust your coverage limits accordingly, ensuring you remain protected against unforeseen liabilities.

Comprehensive Risk Management

Incorporating umbrella insurance into your financial planning is like having a comprehensive treatment plan for a patient. It’s not just about addressing immediate concerns but also about safeguarding long-term well-being. For high net worth individuals, umbrella insurance not only protects personal assets but also shields future earnings and helps preserve long-term financial goals. Whether you’re facing liability claims from accidents, property damage, or legal disputes, umbrella insurance offers a crucial layer of defense.

A Practical Example

An umbrella insurance policy can be a lifesaver for a working-class family by providing additional liability coverage beyond their standard home and auto policies. For instance, if a family member is involved in a car accident that results in significant injuries to others, the costs might exceed their auto insurance limits. An umbrella policy would cover the excess amount, protecting the family from financial ruin and ensuring their assets and future earnings are safeguarded.

The Peace of Mind Factor

As someone who helps others achieve physical well-being, you understand the value of peace of mind. Umbrella insurance provides that same peace of mind in the financial realm. Knowing that you have an extra layer of protection allows you to focus on what you do best without constantly worrying about potential financial setbacks. It’s like knowing you have a trusted colleague who always has your back, ready to step in when things get tough.

Taking Action

So, how do you go about securing umbrella insurance? The process is straightforward. Start by assessing your current assets and potential liabilities. Speak with a financial planner or insurance agent who can help you determine the appropriate level of coverage based on your specific situation. Remember, the goal is to ensure that your coverage is comprehensive enough to protect all your assets and future earnings.

In conclusion, while retirement planning often focuses on aspects like long-term care and life insurance, neglecting the importance of umbrella insurance can leave high net worth individuals exposed to substantial financial risks. Just as you wouldn’t neglect a crucial part of a patient’s treatment plan, don’t overlook this vital component of your financial strategy. Umbrella insurance extends your coverage beyond the limits of standard policies and shields you against lawsuits, making it an indispensable part of a robust financial plan. By investing in adequate umbrella coverage, you can protect your assets, mitigate potential liabilities, and secure your financial well-being for the future.

In the world of financial planning, think of umbrella insurance as your financial safety net. It’s there to catch you when unexpected events threaten your financial stability, allowing you to focus on living your life and pursuing your passions with confidence. Just as you advise your patients to take preventive measures for their health, take this step to safeguard your financial health by consulting with a financial advisor like the financial professionals of Outside The Box Financial Planning. Your future self will thank you.

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Partnering with Outside The Box Financial Planning (OTBFP) offers numerous benefits for individuals seeking college planning, retirement planning, small business support, wealth management, and beyond.  As a fee-only fiduciary with a comprehensive approach, unbiased advice,  and transparent fee structure, OTBFP acts as a trusted advisor who prioritizes your best interests. Click here to schedule a complimentary “Fit” meeting to determine if we would make a good mutual fit.

Remember, financial decisions have long-lasting implications, and working with a professional like the financial professionals of Outside The Box Financial Planning can provide the expertise and guidance necessary to make informed choices that align with your financial aspirations.

Let's talk about one of the most critical aspects of personal finance: your emergency fund. Think of it as the financial equivalent of a spare tire in your car. You hope you never have to use it, but you're immensely grateful it's there when you do. Now, where you keep that spare tire matters just as much as having one. Similarly, where you place your emergency fund can make a significant difference in how well it serves you when life throws a curveball.

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The Ideal Parking Spot: High-Yield Savings Accounts

Imagine parking your car in a well-lit, secure garage. It’s safe, you can access it quickly, and you have peace of mind knowing it’s protected. That’s what a high-yield savings account offers your emergency fund. These accounts, typically offered by online banks, provide higher interest rates than traditional savings accounts. Your money grows faster, yet remains easily accessible. High-yield savings accounts are FDIC insured up to $250,000, ensuring your funds are safe. Plus, accessing your money in a pinch is straightforward – usually just a transfer away. It’s the perfect blend of security and accessibility, much like that secure garage for your car.

The Driveway Option: Traditional Savings Accounts

Parking your car in your driveway is convenient, but it doesn’t offer the same level of protection as a garage. Traditional savings accounts are similar. They are easy to access, but the interest rates are typically lower than those of high-yield savings accounts. While your money is still safe and FDIC insured, it won’t grow as quickly. If convenience is your top priority and you don’t mind missing out on a bit of extra interest, a traditional savings account can still be a suitable spot for your emergency fund.

Avoid the Street Parking: Checking Accounts

Parking your car on the street might seem convenient, but it comes with risks. It’s exposed to the elements and more vulnerable to theft or damage. Placing your emergency fund in a checking account is similar to street parking. While checking accounts provide easy access to your funds, they come with limitations similar to street parking. They offer minimal interest rates, so your money isn’t growing, and the convenience of immediate access can lead to the temptation of using the funds for non-emergencies. Though they’re safe in terms of FDIC insurance, checking accounts are not the most advantageous place for your emergency fund. Additionally, checking accounts usually offer little to no interest, meaning your emergency fund won’t grow. It's best to avoid this option unless you have no other immediate alternatives.

The Overlooked Basement: Certificates of Deposit (CDs)

Think of Certificates of Deposit (CDs) as storing your emergency fund in a basement safe. It’s secure and earns a bit more interest, but accessing it quickly can be a hassle. CDs lock your money away for a set period – anywhere from a few months to several years. In return, you earn higher interest rates than typical savings accounts. However, if you need to access your money before the CD matures, you’ll face penalties. CDs might be a good option for part of your emergency fund, especially if you’re confident you won’t need it all at once. But keep the bulk of your fund in more accessible accounts.

The Tempting but Risky Attic: Investment Accounts

Imagine stashing your emergency fund in the attic – out of sight, out of mind. Investment accounts like stocks, bonds, or mutual funds are akin to this attic storage. While they offer the potential for higher returns, they come with significant risks. The stock market can be unpredictable over the short term, and your emergency fund could lose value right when you need it most. Additionally, accessing these funds might take time, and you could face fees and/or tax implications. Investing your emergency fund is generally not advisable due to these uncertainties. Your emergency fund should be liquid and stable, not subject to market fluctuations.

The Locked Trunk: Money Market Accounts

Money Market Accounts (MMAs) are like keeping your emergency fund in a locked trunk. They offer better interest rates than traditional savings accounts and come with check-writing privileges and debit card access. However, they often require higher minimum balances. MMAs are a solid middle ground, providing safety, accessibility, and a bit of growth. Just make sure you meet the minimum balance requirements to avoid fees. If you’re comfortable with these conditions, an MMA can be a good place for your emergency fund.

The Wallet Dilemma: Cash at Home

Keeping your emergency fund as cash at home is like carrying all your savings in your wallet. It’s incredibly accessible but comes with high risks. Cash can be lost, stolen, or destroyed. Additionally, it earns no interest and doesn’t grow over time. Having a small amount of cash on hand for immediate emergencies is wise, but it’s not a suitable place for your entire emergency fund. Aim to keep just a few hundred dollars in cash for immediate needs and store the rest in a safer, interest-bearing account.

Final Thoughts: Balance and Strategy

The best strategy for your emergency fund involves a mix of security, accessibility, and growth. High-yield savings accounts should be your primary choice, offering the right balance of these factors. Complement this with a portion in Money Market Accounts or short-term CDs if you can manage the requirements and penalties. Remember, the goal of your emergency fund is to be there when you need it most, without added stress or complications. Like choosing the right parking spot for your car, choosing the right place for your emergency fund ensures you’re prepared for whatever life throws your way. So, take a moment to evaluate where your emergency fund is currently parked. Make adjustments if necessary to ensure it's in the best possible spot. Your future self will thank you for the foresight and planning!

Seeking a financial planner that aligns with your goals can be very similar to searching for the right medical professional to best meet your healthcare needs. Some doctors charge directly for their services, others earn money by recommending certain treatments, and some do a mix of both. Similarly, in the financial world, advisors come in different forms: commission-based, fee-based and fee-only. Understanding the key differences between the three is crucial for your financial future. 

Commission-Based Financial Advisors

The Pharmaceutical Reps

Commission-based financial advisors can be compared to pharmaceutical representatives who earn their income by promoting specific medications. They do not charge clients directly for their advice; instead, they earn commissions from the financial products they sell, such as mutual funds, insurance policies, or annuities. This model allows clients to receive financial advice without upfront out-of-pocket costs. Commission-based advisors’ income is directly tied to the amount of the products they sell.

How They Work

Commission-based advisors can face a high potential for conflicts of interest, similar to how pharmaceutical representatives might promote certain medications due to financial incentives. These advisors may prioritize selling products that generate higher commissions for themselves, even if those products are not the best fit for the client. 

Additionally, the lack of transparency regarding the commissions earned can erode trust, as clients might not always be aware of how much their advisor is making from their investments, leading to concerns about the advisor's impartiality.

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Fee-Based Financial Advisors

The General Practitioners

Fee-based financial advisors are comparable to general practitioners (GPs) in the healthcare system. GPs offer a broad range of services and charge a fee for their consultations. Similarly, fee-based advisors provide financial services and charge clients a combination of fees and commissions. This hybrid model creates a variety of ways to charge for financial services to cater to a variety of financial needs, from investment management to retirement planning.

How They Work

Fee-based advisors earn their commissions on the products they sell, such as mutual funds, insurance policies, or annuities. Additionally, they may charge a flat fee, which can be billed hourly, monthly, or annually. This dual compensation structure can be beneficial because it offers flexibility in how clients pay for services. Fee-based advisors can provide a range of services, making them a one-stop-shop for many financial needs. Their model allows for flexibility, as the combination of fees and commissions can be tailored to suit the client's specific financial situation and preferences. One thing to be aware of is that fee-based advisors may face potential conflicts of interest similar to a general practitioner who might recommend specific treatments due to financial incentives. Advisors might be inclined to suggest products that generate a commission for them, even if those products are not the best fit for the client. The dual fee structure of fee-based advising can introduce complexity, leaving clients potentially confused about what they are paying for and how it affects their overall financial planning.

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Fee-Only Financial Advisors

The Specialists

Fee-only financial advisors are like medical specialists who charge only for their expert services. Just as a cardiologist charges a fee for a consultation and treatment plan without earning extra from prescribing medications, fee-only advisors charge their clients solely for the advice and planning services they provide. They do not earn commissions from selling financial products. Working with a fee-only financial advisor puts the advisor on the side of their client, aligning their goals. 

How They Work

Fee-only advisors charge clients directly for their services. This can be in the form of an hourly rate, a flat annual fee, or a percentage of assets under management (AUM). Their compensation is transparent and solely tied to the advice and services they provide. Because fee-only advisors are fiduciaries, they are legally bound to act in their clients' best interests, offering clients an extra sense of security. While a fee-based advisor might seem more expensive upfront because their fees are not subsidized by commissions, this approach ensures that the advisor’s interests match those of their clients, resulting in greater transparency and, for many, increased trustworthiness.  Since their income isn’t tied to product sales but rather the advice they provide and planning work they perform, fee-only planners are generally more focused on helping you achieve long-term financial goals rather than meeting their short-term sales objectives. Overall, fee-only financial planners offer a structure that aims to minimize conflicts of interest and provide a more transparent, objective approach to managing your financial affairs.

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Making the Right Choice: Factors to Consider

Choosing the right type of financial advisor depends on your specific needs, preferences, and circumstances, which might include: 

1. Complexity of Your Financial Situation: If your financial needs are complex and you require a broad range of services, a fee-only advisor (the specialist) might be the best fit. They can offer long-term, comprehensive solutions that are adaptable to various financial situations.

2. Desire for Objectivity: If you prioritize objective advice free from conflicts of interest, a fee-only advisor (the specialist) is likely the best choice. Their compensation model ensures that their advice is aligned with your best interests.

3. Budget Considerations: If you are cost-sensitive or prefer not to pay upfront fees, a commission-based advisor (the pharmaceutical rep) might be appealing. They provide access to financial advice without direct costs, although it's essential to be aware of potential biases in their product recommendations.

4. Transparency and Trust: Understanding how your advisor is compensated and how that might influence their advice is crucial. Transparency in fees and commissions helps build trust and ensures you are getting advice that genuinely benefits your financial health.

Navigating Your Financial Health 

By understanding the differences between these three models and considering your specific needs, you can make an informed decision that supports your long-term financial goals. With Out of the Box Financial Planning, you can trust that you’re working with a fee-only fiduciary, a Certified Financial Planner™️ practitioner who is focused on your financial well-being. We provide tailored advice on retirement planning, asset management, tax strategies, and beyond, helping you navigate potential obstacles with confidence. Remember, the right advisor can be a powerful ally in navigating the complexities of financial planning, much like the right doctor can guide you through the intricacies of health care.

Paying for college can feel a lot like preparing for a long road trip. You want to make sure you have a full tank of gas, a clear map, and a plan for the unexpected detours that might come your way. As a financial advisor, I've seen many parents hit bumps in the road when it comes to funding their children's education. Here are some common financial mistakes to avoid to ensure your journey is as smooth as possible.

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Mistake 1: Not Starting Early Enough

Think of saving for college like planting a tree. The best time to plant it was 20 years ago; the second-best time is now. Many parents delay saving for college until their child is in high school, but by then, they’ve missed out on years of potential growth. Starting early, even with small amounts, can make a big difference thanks to the power of compound interest. Consider opening a 529 savings plan when your child is young, and contribute regularly. This will give your savings time to grow, like a tree growing taller and stronger over the years.

Mistake 2: Ignoring scholarships and grants

Imagine leaving a coupon on the kitchen counter before heading to the store, only to realize at the checkout that you could have saved a bundle. Scholarships and grants are like those forgotten coupons. Many families don’t put in the effort to research and apply for these opportunities, missing out on free money that can significantly reduce college costs. Encourage your child to apply for as many scholarships and grants as possible. Every little bit helps, and it can add up to substantial savings.

Mistake 3: Underestimating the total cost of college

Planning for college is not just about tuition; it’s also about books, housing, meals, and other living expenses. It’s like budgeting for a vacation but forgetting to account for meals, souvenirs, and excursions. Make sure you consider all aspects of college costs to avoid being blindsided by unexpected expenses. Create a comprehensive budget that includes tuition, fees, room and board, textbooks, transportation, and personal expenses.

mistake 4: relying too heavily on student loans

Taking out student loans can be tempting, much like using a credit card to pay for a big purchase. It’s easy to swipe the card and worry about paying it off later. However, loans need to be repaid with interest, and relying too heavily on them can lead to a mountain of debt after graduation. Encourage your child to consider work-study programs, part-time jobs, and other means of earning money to reduce the need for loans. If loans are necessary, exhaust federal loan options first, as they typically offer better terms than private loans.

Mistake 5: not considering return on investment

Sending your child to college is an investment in their future, much like buying stock and bonds or starting a business. You want to ensure that the investment will pay off. Research potential colleges and their programs to understand the return on investment (ROI). Look into graduation rates, average starting salaries for graduates, and job placement rates. This can help you and your child make informed decisions about which schools and programs offer the best value.

mistake 6: forgetting to plan for financial aid

Navigating the financial aid process can feel like trying to put together a puzzle without all the pieces. Many families don’t take full advantage of available financial aid because they don’t understand the process or miss important deadlines. Complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1 of your child’s senior year of high school. This will determine your eligibility for federal aid, including grants, work-study programs, and loans. Some states and colleges also use FAFSA information to award their own aid, so don’t miss out.

Mistake 7: neglecting to have the “money talk” with your child

Talking about money with your child can be as uncomfortable as discussing the birds and the bees, but it’s just as important. Many parents avoid this conversation, leading to misunderstandings and unrealistic expectations. Be open and honest about what you can afford and the importance of making wise financial decisions. Discuss the implications of taking on debt, the value of budgeting, and the importance of working while in school. Preparing your child for the financial realities of college will set them up for success.

mistake 8: overlooking the impact on your retirement

Remember, saving for college shouldn’t come at the expense of your retirement. It’s like putting all your energy into building a college fund while neglecting to maintain your own home. Your child can take out loans for college, but you can’t take out loans for retirement. Make sure you’re contributing enough to your retirement accounts and consider seeking the help of a financial advisor to balance both goals effectively.

Mistake 9: not exploring all college payment options

Paying for college doesn’t have to be a one-size-fits-all approach. It’s like shopping for a car: you wouldn’t just go with the first model you see without comparing options. Explore all possible payment options, including tuition payment plans offered by many colleges. These plans can spread out payments over several months, making it easier to manage cash flow without taking on debt. Additionally, look into tax credits and deductions available for education expenses, such as the American Opportunity Tax Credit and the Lifetime Learning Credit.

mistake 10: overestimating future earnings

It’s easy to assume that your child will land a high-paying job right after graduation, but this can be as risky as betting on a lottery ticket. Be realistic about potential earnings and job prospects in your child’s chosen field. Encourage them to pursue internships, co-op programs, and networking opportunities while in school to enhance their employability after graduation. A practical approach to career planning can help manage expectations and financial planning.

Navigating the financial aspects of paying for college can be daunting, but avoiding these common mistakes can make the journey smoother. Start early, do your homework, and have open conversations with your child about finances. With careful planning and a strategic approach, you can help ensure that your child’s college education is a worthwhile investment without derailing your own financial goals. Just like a well-planned road trip, a thoughtful approach to college funding can help you reach your destination with fewer bumps along the way.

There’s no greater joy than watching your grandchildren grow and flourish. From their first steps to their first day at school, you’ve been there, cheering them on every step of the way. Now, imagine leaving a legacy that continues to support and cheer them on long after you’re gone. Sounds wonderful, doesn’t it? That’s exactly what a 529 plan can do. Think of it as a time capsule of love, wisdom, and support that will help your grandchildren thrive in their educational journey.

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What’s a 529 plan?

Before we dive into the heart of it, let’s take a moment to understand what a 529 plan is. Named after Section 529 of the Internal Revenue Code, a 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. Much like how you might set aside a portion of your garden to plant seeds that will grow into something beautiful and bountiful, a 529 plan allows you to set aside money for your grandchild’s education, watching it grow over time.

How a 529 Plan Works

Think of a 529 plan like a savings account, specifically designed for education. Here’s a breakdown:

1. Tax Advantages

 Just like the satisfaction of knowing your garden is growing pesticide-free, the money you put into a 529 plan grows tax-free. When the time comes to use the funds for qualified educational expenses, withdrawals are also tax-free. Furthermore, many states offer an income tax deduction for contributions up to a specific limit, usually $10,000 per individual or $20,000 per couple.

2.Flexibility

Picture this: you plant a tree in your garden that can adapt and thrive in various climates. Similarly, 529 plans offer flexibility. They can be used for a wide range of educational expenses, not just college tuition and fees:

**Elementary or secondary school tuition

**Vocational school and trade school tuition and fees

**Apprenticeship programs

**Off-campus housing

**Food and meal plans

**Books, computers, and supplies

**Even student loan repayments

3.Control

Unlike a trust fund where the beneficiary might take control at a certain age, with a 529 plan, you maintain control over the funds. It’s like keeping the key to the treasure chest until you decide it’s time to open it.

4. High Contribution Limits

Unlike other savings plans, 529 plans typically have high contribution limits, allowing you to contribute more than you might with other accounts. This is akin to having a vast plot of land where you can plant as many trees and flowers as you want.

Leaving a Legacy: The Emotional and Financial Impact

Now, let’s talk about why a 529 plan is a powerful tool for leaving a lasting legacy. As grandparents, you’ve accumulated wisdom and resources over the years. Here’s how a 529 plan aligns with your desire to support your grandchildren’s future:

1. Financial Security

 Just as a sturdy tree provides shade and shelter, a 529 plan provides financial security. The cost of education continues to rise, and many young people graduate with significant debt. By contributing to a 529 plan, you’re giving your grandchildren a head start, free from the heavy burden of student loans.

2. Value of Education

Education is the key to unlocking a world of opportunities. By investing in your grandchild’s education, you’re not just giving them money; you’re giving them the tools to build a better future. It’s like teaching them to fish rather than just giving them a fish.

3. Building Dreams

Every child has dreams. Whether they aspire to be a doctor, an artist, an engineer, or an entrepreneur, a 529 plan can help make those dreams a reality. It’s like providing them with a treasure map, guiding them to their own pot of gold.

Getting Started with a 529 Plan

Starting a 529 plan is simpler than you might think. Here’s a step-by-step guide to get you started:

1.Research and Choose a 529 Plan

Much like choosing the best seeds for your garden, it’s important to research and select the right 529 plan. Each state offers its own 529 plan with different benefits and features. Compare the options to find the one that best suits your needs.

2. Open an Account

 Once you’ve selected a plan, opening an account is straightforward. You’ll need some basic information about yourself and your grandchild, including their Social Security number.

3. Contribute Regularly

Just as a garden needs regular watering, your 529 plan will thrive with consistent contributions. You can set up automatic contributions to make saving easier. Remember, even small amounts add up over time.

4. Monitor and Adjust

Keep an eye on your plan’s performance and make adjustments as needed. It’s like tending to your garden, ensuring it remains healthy and vibrant.

Frequently Asked Questions

Can I transfer a 529 plan to another grandchild if needed?

Absolutely! One of the great features of a 529 plan is its flexibility. If one grandchild doesn’t need the funds, you can transfer the plan to another qualified family member without penalties.

What happens if my grandchild gets a scholarship?

First of all, congratulations! Scholarships are fantastic. If your grandchild receives a scholarship, you can withdraw the amount of the scholarship from the 529 plan without paying penalties, though you may have to pay taxes on the earnings.

Are there any drawbacks?

Like any investment, 529 plans come with risks. The value of your investment can fluctuate based on market conditions. It’s important to consider these factors and possibly consult a financial advisor.

The Gift that Keeps on Giving

Illinois First Steps, launched in 2023, is a college savings starter program that provides a one-time $50 seed deposit into the 529 college savings accounts of children born or adopted by Illinois residents. Administered by the Office of the Illinois State Treasurer and established by the Illinois General Assembly, this initiative aims to assist Illinois families in beginning their savings for the increasing costs of higher education and training.

In conclusion, a 529 plan is more than just a financial tool; it’s a gift that keeps on giving. It’s the educational equivalent of planting a tree whose shade you may not sit under, but whose benefits will be enjoyed by future generations. By starting a 529 plan for your grandchild, you’re planting seeds of knowledge, opportunity, and love that will grow and flourish long into the future.

So, dear grandparents, as you think about the legacy you want to leave, consider the profound impact a 529 plan can have. It’s a way to continue supporting your grandchildren, nurturing their dreams, and helping them build a bright and successful future. And remember, the love and wisdom you impart today will bloom for many years to come, much like the beautiful garden you’ve tended with care and devotion.

Happy planting, and here’s to a legacy that lasts!

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Partnering with Outside The Box Financial Planning (OTBFP) offers numerous benefits for individuals seeking college planning, retirement planning, small business support, wealth management, and beyond.  As a fee-only fiduciary with a comprehensive approach, unbiased advice,  and transparent fee structure, OTBFP acts as a trusted advisor who prioritizes your best interests. Click here to schedule a complimentary “Fit” meeting to determine if we would make a good mutual fit.

Remember, financial decisions have long-lasting implications, and working with a professional like the financial professionals of Outside The Box Financial Planning can provide the expertise and guidance necessary to make informed choices that align with your financial aspirations.

In the dynamic landscape of investments, it's not just about making money—it's also about safeguarding it. But how do you navigate the balance between risk tolerance and risk capacity? Let's explore this critical concept and highlight its importance, particularly for both young professionals and early retirees, especially those in medical professions, as they approach retirement.

Understanding risk tolerance enables individuals to align their investment strategies with their comfort levels, preventing them from taking unnecessary risks that could endanger their financial security. Similarly, evaluating risk capacity enables early retirees to customize their investment approach based on their unique circumstances, including factors like their time horizon, income stability, potential healthcare expenses, and retirement goals. Picture this: you're a young professional with a robust portfolio. Market volatility doesn't keep you up at night; you've got the nerve for it. But hold on—what about your capacity? Sure, you're fine if your investments dip temporarily, but can you afford to keep your family's needs secure if that dip becomes a plunge?

“Risk tolerance and capacity aren’t just financial jargon; they’re guiding principles on your investment journey”

— Ivan havrylyan

Here's where the distinction between risk tolerance and capacity becomes pivotal. Your tolerance might be sky-high, but your capacity to sustain losses without jeopardizing essential expenses is what truly counts. It's not just about weathering market fluctuations; it's about ensuring your financial ship stays afloat amidst life's unpredictable waves. Let's break it down further. Say you're eyeing those enticing crypto investments. You might have the stomach for their volatility, but do you have the means to cushion potential losses? Your risk capacity hinges on factors like family obligations, impending life changes, or even future financial goals.

Imagine you're an early retiree, perhaps a nurse, with a well-built portfolio from your years of dedication. Just like young professionals, you've faced market volatility with confidence, knowing you can handle the ups and downs. However, it's not just about your comfort level with risk. As you transition from your career into retirement, it's crucial to assess your risk capacity. While you might be prepared for temporary dips, it's vital to consider if you can still provide for your family's needs if those dips turn into significant losses.

Balancing your comfort with risk against your financial resilience ensures that your retirement savings can sustain you through any market challenges, safeguarding your financial future as you embark on this new chapter of life.

“Regularly reassessing and recalibrating your goals ensures you stay on course, adapting to life’s ever-changing currents. ”

— ivan havrylyan

Now, let's flip the script. Retirees, often deemed risk-averse, might surprise you. With hefty nest eggs and stable income streams, they could weather market downturns without breaking a sweat. Their risk tolerance might be low, but their capacity to absorb losses is substantial, thanks to diversified income sources. So, how do you align your risk tolerance with your capacity? It starts with setting clear financial goals and objectives. Whether it's securing your retirement, funding your children/ grandchildren’s education, or preserving your lifestyle, having a roadmap is key. But it doesn't end there—regularly reassessing and recalibrating your goals ensures you stay on course, adapting to life's ever-changing currents. Yet, the biggest hurdle isn't market volatility—it's uncertainty. Clients who waltz in with no goals or direction pose a unique challenge. If you're content with whichever way the wind blows, why seek financial guidance? Understanding your aspirations, however modest, is the first step toward financial empowerment.

In conclusion:

Risk tolerance and capacity aren't just financial jargon; they're guiding principles on your investment journey. So, before you dive headfirst into the latest investment craze, pause and reflect. Do you have the nerve to ride out the waves, and more importantly, the resilience to weather the storm? Thankfully you don’t have to weather the storm alone. A certified financial planner can be your lighthouse. Schedule a meeting with us from Outside the Box Financial Planning to explore strategies for crafting your individualized plan. Your financial future might just depend on it.

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Partnering with Outside The Box Financial Planning (OTBFP) offers numerous benefits for individuals seeking college planning, retirement planning, small business support, wealth management, and beyond.  As a fee-only fiduciary with a comprehensive approach, unbiased advice,  and transparent fee structure, OTBFP acts as a trusted advisor who prioritizes your best interests. Click here to schedule a complimentary “Fit” meeting to determine if we would make a good mutual fit.

Remember, financial decisions have long-lasting implications, and working with a professional like the financial professionals of Outside The Box Financial Planning can provide the expertise and guidance necessary to make informed choices that align with your financial aspirations.

Imagine you’re a skilled health professional, well-versed in the intricacies of patient care, yet finding yourself a bit overwhelmed by the complexities of managing personal finances. Navigating your financial health, much like treating a patient, requires a detailed understanding of the problem, a strategic approach, and ongoing adjustments to ensure the best outcomes. In this case, understanding your debt structure is like having a detailed medical chart – it's crucial for diagnosing the situation and planning the right course of action. In this journey towards financial stability, you’ll encounter different types of debt: mortgages, student loans, and credit card debt, each playing a vital role in shaping your financial well-being. So, how do you effectively manage these financial obligations? Let's delve into some practical strategies crafted to help you manage debt and achieve financial freedom, much like following a well-planned treatment protocol.

Assessing Your Debt Structure: The Initial Diagnosis

Just as you would assess a patient's overall health before deciding on a treatment plan, begin by taking stock of your current debt scenario. Your debt structure comprises various financial obligations such as mortgages, car payments, student loans, and credit card debt. List them all out, noting the interest rates and repayment terms for each. This assessment is your diagnostic tool, akin to a comprehensive medical chart that guides the formulation of a treatment plan. By understanding the specifics of your debt – the interest rates, repayment terms, and total amounts owed – you can craft a strategic debt management plan tailored to your situation.

Prioritize Your Financial Goals: Setting Treatment Priorities

Think of your financial goals as treatment priorities. Just as in medicine, where certain conditions must be addressed before others, your financial goals should be prioritized. Establish clear objectives – whether it’s building an emergency fund, saving for retirement, or funding your children’s education. These goals will direct your debt repayment efforts and wealth accumulation strategies. Aligning your debt management with these priorities ensures you stay focused and motivated, much like following a treatment plan designed to address the most critical health issues first.

“Once your financial priorities are funded, you can use the remaining income for discretionary spending, similar to how you might manage a patient’s treatment around essential and non-essential interventions.”

— Ivan havrylyan

Creating a Budgetary Blueprint: Your Financial Treatment Plan

A well-defined budget is like a detailed treatment plan, guiding your financial decisions and ensuring you allocate resources efficiently. Adopt a top-down approach to budgeting, where you first allocate funds toward your financial priorities.

For example, if your goal is to save $30,000 annually for retirement and emergency funds, earmark a specific amount each month towards these objectives. Once your financial priorities are funded, you can use the remaining income for discretionary spending, similar to how you might manage a patient’s treatment around essential and non-essential interventions.

Tracking Your Progress: Regular Check-Ups

Consistent monitoring is crucial in both medicine and finance. Regularly review your budget, spending patterns, and debt repayment milestones. This is akin to scheduling regular check-ups to ensure the treatment is working and to make necessary adjustments. By tracking your financial progress, you can identify deviations from your plan early and take corrective action. This proactive approach helps you stay on course toward your financial goals, much like adjusting a treatment plan based on patient response.

Addressing Roadblocks and Challenges: Overcoming Financial Ailments

Just as patients may encounter complications, you may face financial roadblocks. These could be unexpected expenses, fluctuating interest rates, or lifestyle creep. It’s essential to anticipate and address these hurdles proactively.

Evaluate your spending habits, identify areas where you can cut back, and reassess your financial priorities if necessary. Adopting a flexible approach, much like adjusting a treatment protocol to better suit a patient’s changing needs, will help you overcome obstacles and stay on track towards your goals.

Seeking Professional Guidance: Consulting Financial Specialists

Navigating debt management can be daunting, much like diagnosing a complex medical condition. Seeking guidance from financial professionals – be it a financial planner, debt counselor, or investment advisor – can provide you with the expertise and personalized advice you need. Just as you would consult a specialist for a complicated health issue, leveraging professional expertise can streamline your journey towards financial stability. They can offer tailored solutions and strategies to manage your debt effectively, ensuring you’re making informed decisions.

“Remember, the path to financial freedom begins with informed decision-making and disciplined financial habits. ”

— ivan havrylyan

Conclusion: Achieving Financial Wellness

Mastering debt management is essential for financial success, empowering you to take control of your financial future and achieve lasting prosperity. By assessing your debt structure, prioritizing your financial goals, creating a budgetary blueprint, tracking your progress, addressing challenges, and seeking professional guidance, you can navigate through the complexities of debt management with confidence. Remember, the path to financial freedom begins with informed decision-making and disciplined financial habits. Start your journey today with the financial guidance of Outside The Box Financial Planning, much like a well-planned treatment regimen, and pave the way towards a brighter financial future.

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Partnering with Outside The Box Financial Planning (OTBFP) offers numerous benefits for individuals seeking college planning, retirement planning, small business support, wealth management, and beyond.  As a fee-only fiduciary with a comprehensive approach, unbiased advice,  and transparent fee structure, OTBFP acts as a trusted advisor who prioritizes your best interests. Click here to schedule a complimentary “Fit” meeting to determine if we would make a good mutual fit.

Remember, financial decisions have long-lasting implications, and working with a professional like the financial professionals of Outside The Box Financial Planning can provide the expertise and guidance necessary to make informed choices that align with your financial aspirations.

In the grand scheme of personal finance, your 401(k) is like a hidden treasure chest waiting to be discovered. It's not just a retirement account; it's your key to financial freedom and security. While you may have heard the term "401(k)" thrown around in conversations about the future, have you ever really dug deep to understand what it's all about?

Let’s unravel the mysteries of the 401(k) mysteries and unveil the top five things you need to know to make the most of this powerful tool. Whether you're a nurse at Advocate Lutheran General Hospital looking to maximize your 401k contributions or a seasoned professional nearing retirement looking for tax-efficient savings strategies, understanding your 401(k) is the roadmap to a more secure and prosperous retirement.

First, let's clarify what a 401(k) is. Simply put, a 401(k) is a tax-advantaged retirement account offered by many employers, allowing you to set aside a portion of your income for the golden years.

1. Types of 401(k) Plans and Their Tax Benefits:

There are two basic types of 401(k) plans that exist: a Traditional 401(k) and a Roth 401(k). These two options have different tax implications - that impact you both now and in the future. Both have their advantages and disadvantages. Whether you choose a traditional 401(k) or Roth 401(k) plan, both have annual contribution limits that are set by the IRS. For 2023, the limit is $22,500 for individuals under 50, with an additional $7,500 catch-up contribution allowed for those 50 and older. 

With a Traditional 401(k), your contributions are made from pre-tax income and lower your current year’s taxable income, potentially even putting you in a lower tax bracket, thereby saving you money. This reduces your taxes today and allows your 401k to grow without worrying about paying the taxes as you go. However, when you withdraw the money in retirement, you will be taxed on a larger total sum of money as you take distributions, assuming your investments have performed well.

In contrast, a Roth 401(k) is funded with after-tax income, meaning you won't get a tax break today, but your withdrawals in retirement are tax-free.

The choice between the two depends on your current and future financial situation and tax expectations. Because of the trade-offs between these two options, it’s crucial to analyze your own personal situation to determine which will be optimal for you. If you’re having trouble calculating which is best for you, you should consult a Certified Financial Planner, like Outside the Box Financial Planning, to help you understand how to maximize your retirement accounts.

2. Matching Contributions from your Employer:

Many employers offer a valuable benefit – the 401(k) match. This means that your employer contributes a certain percentage, usually 3%, of your total salary to your 401(k) account. Some employers may offer more than 3%, which can be a huge perk since that obviously means more money will be matched to your contributions.

It's essentially “free money” contributions made to your retirement savings account that you’ll want to make sure you do not miss out on. Make sure you fully understand your employer's matching policy and strive to contribute at least the same percentage that your employer offers to maximize their match. It's one of the easiest ways to boost your retirement savings.

3. An Automated Savings Mechanism:

By its very nature, a 401(k) is an automated savings mechanism, and its power lies in its seamless, set-it-and-forget-it approach. It’s deducted from your salary before it ever reaches your bank account, making it easy and hassle-free. It's deducted automatically from your paycheck before you ever have a chance to spend it!

This is a lifesaver for many people, as it helps them establish good savings habits. The automated nature of this savings mechanism simplifies your journey toward a comfortable retirement, making it easy to save and invest for the future, even with a busy life. So, embrace your 401(k) as your diligent financial partner, and let it work its magic in the background, growing your wealth while you focus on the present. Your future self will thank you for it.

4. Investment Options:

Your 401(k) typically offers a menu of 20 or so investment options, typically in the form of mutual funds, exchange-traded funds (ETFs), and other investment vehicles. Most of these are the standard options that have to be suitable for all of the participants but, as a result, may not be optimal for you. This is why working with a finance professional to build a comprehensive investment strategy incorporating all your accounts and using strategies to mitigate the 401k limited options risk is essential to a sound investment portfolio.

At Outside The Box Financial Planning, we offer Comprehensive Financial Planning and Wealth Management services and work closely with our clients to coordinate all of their investments, custom tailoring their portfolios to meet their retirement goals and objectives.

5. Early Withdrawal Penalties, Vesting and Leaving Your Job:

While your 401(k) is designed for retirement savings, emergencies can sometimes lead to you needing to withdraw some of the funds in your 401k prior to retirement. However, early withdrawals before the age of 59½ are fully taxable and subject to an additional 10% early withdrawal penalty. There are some exceptions to te rule; however, understanding the rules and potential consequences is vital to making an informed financial decision.

If you change jobs or retire, you may have an option of either keeping your 401k with your former employer or transferring it either to your new employer or into an Individual Retirement Account (IRA). Each option can have its own advantages and disadvantages.

Vesting is a critical concept in 401(k) plans. It refers to your ownership of employer-contributed funds over time. If you leave your job before you're fully vested, you may forfeit a portion of your employer's contributions. Each 401k plan has its own vesting schedule; understanding yours is crucial to making sure you don’t forfeit any contributions. When switching jobs, it may be a good idea to review your vesting schedule to make sure you make the right decision.

In conclusion, your 401(k) is an invaluable tool for securing your financial future. Understanding its ins and outs is crucial for making the most of this retirement savings vehicle. From the automated savings mechanism it offers to the nuances of contribution limits, tax implications, and the impact of legislation like the SECURE Act 2.0, there are numerous factors to consider.

Working with a fee-only, Certified Financial Planner can result in personalized guidance and custom-tailored financial plan to your unique goals.

Your 401(k) is a significant part of your financial picture, and making informed decisions about it will set you up for a comfortable and prosperous retirement. Remember, your future self will thank you for the diligence and care you put into understanding and managing your 401(k).

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Partnering with Outside The Box Financial Planning offers numerous benefits for individuals seeking college planning, retirement planning, small business support, wealth management, and beyond.  As a fee-only fiduciary with a comprehensive approach, unbiased advice, and transparent fee structure, OTBFP acts as a trusted advisor who prioritizes your best interests. Click here to schedule a complimentary “Fit” meeting to determine if we would make a good mutual fit.

Remember, financial decisions have long-lasting implications, and working with a professional can provide the expertise and guidance necessary to make informed choices that align with your financial aspirations. However, if you would like to take a shot at building a financial plan on your own, we offer our financial planning software, RightCapital, free of charge. Click here to get started.

Markets Have Rotten Third Quarter

Global equity markets had a rotten third quarter – especially the smaller-cap and tech names. And the month of September was especially difficult, as volatility increased, oil jumped and the S&P 500 closed out September with 4 consecutive losing weeks.

For the third quarter of 2023:

• The DJIA retreated 2.6%;

• The S&P 500 lost 3.7%;

• NASDAQ declined 4.3%; and

• The Russell 2000 dropped 5.9%.

While there was not a lot to celebrate when the third quarter closed, investors are still somewhat encouraged by the YTD numbers as the major equity markets are still in positive territory, albeit barely for the smaller-caps and the mega-caps as:

• The DJIA up 1.1% YTD%;

• The S&P 500 up 11.7% YTD;

• NASDAQ up 26.3% YTD; and

• The Russell 2000 up 1.4% YTD.

The themes that drove market performance in the third quarter continued to center around inflation, the Fed, the housing market, and the labor market, as recent numbers suggested that inflation is easing as the Fed paused its rate-hiking trend (at least for now). There was also a lot of encouraging economic data received this quarter as well, including hopeful GDP numbers and consumer sentiment levels.

Further, we saw that:

• Volatility, as measured by the VIX, trended up this quarter, beginning the quarter at 13.5 and ending at 17.5, with most of the increase beginning at the end of September.

• West Texas Intermediate crude trended up significantly for the third quarter, jumping over $20/barrel from about $70 to over $90, peaking at $93.68/barrel and stoking inflation.

Market Performance Around the World

Investors were unhappy with the quarterly performance around the world too, as all 36 developed markets tracked by MSCI were negative for the third quarter of 2023, with 18 losing more than 6%. And for the 40 developing markets tracked by MSCI, only 4 of those were positive, with a great many losing more than 5%.

Sector Performance Rotated in 3Q2023

The overall performance for sector performance for the third quarter was poor. In fact, only two sectors advanced as the other 9 sectors declined markedly. Contrast that with the overall performance for sector performance for the second quarter of 2023, which was very good, as 9 of the 11 sectors advanced, with 3 jumping more than 15% .

And interestingly, with the exception of the Energy sector, the other 10 sectors saw relative performance decline from the second quarter to the third quarter, with a few sizable declines – like Information Technology going from +20% to -6% in just a quarter.

Here are the sector returns for the third and second quarters of 2023:

Reviewing the sector returns for just the 3rd quarter of 2023, we saw that:

• 9 of the 11 sectors were painted red, with the Energy sector making a big leap, driven by rising oil prices;

• The defensive-sectors (think Utilities and Real Estate) really struggled during the quarter;

• Information Technology saw an especially huge swing and half of the sectors lost more than 5%; and

• The differences between the best (+12%) performing and worst (-9%) performing sectors in the first quarter was massive.

2Q2023 GDP Up 2.1%

The Bureau of Economic Analysis Real reported that Gross Domestic Product increased at an annual rate of 2.1% in the second quarter of 2023. In the first quarter, real GDP increased 2.2%.

“The increase in real GDP reflected increases in nonresidential fixed investment, consumer spending, and state and local government spending that were partly offset by a decrease in exports. Imports decreased.

Compared to the first quarter, the deceleration in real GDP in the second quarter primarily reflected a deceleration in consumer spending, a downturn in exports, and a deceleration in federal government spending that were partly offset by an upturn in private inventory investment, an acceleration in nonresidential fixed investment, and a smaller decrease in residential investment. Imports turned down.”

Fed Holds Rates Steady – For Now

Wall Street and Main Street toggled between hope that the Fed might be done with its rate-hiking and worry from the Fed’s recent and very hawkish comments from its last meeting. And as expected, the big news on the quarter was that the Fed decided to leave its fed funds rate (its short-term lending benchmark) at a target range of 5.25% to 5.50%, the same level established at its July meeting.

But confounding Wall Street was the Fed’s updated Summary of Economic Predictions where another rate hike this year was very much on the table. In addition, the Fed surprised many with an outlook for rates next year that were notably higher than expected as were their 2025 rate predictions.

Inflation Still High

The Consumer Price Index for All Urban Consumers rose 0.6% in August on a seasonally adjusted basis, after increasing 0.2% in July, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all items index increased 3.7% before seasonal adjustment.

• The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase.

• Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month.

• The energy index rose 5.6% in August as all the major energy component indexes increased.

• The food index increased 0.2% in August, as it did in July.

• The index for food at home increased 0.2% over the month while the index for food away from home rose 0.3% in August.

• The index for all items less food and energy rose 0.3% in August, following a 0.2% increase in July.

• Indexes which increased in August include rent, owners’ equivalent rent, motor vehicle insurance, medical care, and personal care.

• The indexes for lodging away from home, used cars and trucks, and recreation were among those that decreased over the month.

• The all items index increased 3.7% for the 12 months ending August, a larger increase than the 3.2% increase for the 12 months ending in July.

• The all items less food and energy index rose 4.3% over the last 12 months.

The energy index decreased 3.6% for the 12 months ending August, and the food index increased 4.3% over the last year.

Consumer Confidence Declines Again

The Conference Board Consumer Confidence Index declined again in September to 103.0 (1985=100), down from an upwardly revised 108.7 in August. In addition:

• The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – rose slightly to 147.1 (1985=100) from 146.7.

• The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – declined to 73.7 (1985=100) in September, after falling to 83.3 in August.

• Expectations fell back below 80 – the level that historically signals a recession within the next year. Consumer fears of an impending recession also ticked back up, consistent with the short and shallow economic contraction we anticipate for the first half of 2024.

“Consumer confidence fell again in September 2023, marking two consecutive months of decline. September’s disappointing headline number reflected another decline in the Expectations Index, as the Present Situation Index was little changed. Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular. Consumers also expressed concerns about the political situation and higher interest rates. The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more.”

Assessment of Family’s Current Finances

Consumers’ assessment of their Family’s Current Financial Situation turned more negative in September.

Existing Home Sales Drop

“NAR released a summary of existing-home sales data showing that housing market activity this August declined 0.7% from July 2023. August’s existing-home sales reached a 4.04 million seasonally adjusted annual rate. August’s sales of existing homes weakened by 15.3% from August 2022.

The national median existing-home price for all housing types reached $407,100 in August, up 3.9% from a year ago.

Regionally, all four regions showed price growth from a year ago in August. The Midwest had the most significant gain of 6.8%, followed by the Northeast with an increase of 5.8%. The South increased 3.2%, while the West region rose 1.0%.

August’s inventory of unsold listings as of the end of the month was down 0.9% from last month, standing at 1,100,000 homes for sale. Compared with August of 2022, inventory levels were down 14.1%. It will take 3.3 months to move the current inventory level at the current sales pace, well below the desired pace of 6 months. Inventory conditions continue to be a challenge for potential home buyers.  

It takes approximately 20 days for a home to go from listing to a contract in the current housing market. A year ago, it took 16 days.

From a year ago, all four regions had double-digit declines in sales in August. The Northeast had the most significant dip of 22.6%, followed by the Midwest, which fell 16.4%. The West decreased 15.7%, followed by the South, down 12.4%.   

Compared to July 2023, two of the four regions showed declines in sales. Only the Midwest had an incline of 1.0%. The West region had the biggest drop in sales of 2.6%, followed by the South with a dip of 1.1%. The Northeast region was flat from last month.  

The South led all regions in percentage of national sales, accounting for 45.5% of the total, while the

In August, single-family sales decreased 1.4%, and condominium sales were down 4.8% compared to last month. Single-family home sales were down 15.3%, while condominium sales fell 15.4% compared to a year ago. The median sales price of single-family homes rose 3.7% to $413,500 from August 2022, while the median sales price of condominiums increased by 6.2% to $333,900.”

Builder Confidence Wanes

This is on the heels of the National Association of Home Builders reporting that: “builder confidence in the market for newly built single-family homes in September fell five points to 45, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. This follows a six-point drop in August.

From the NAHB release: “As mortgage rates stayed above 7% over the last month, more builders are reducing home prices again to bolster sales. In September, 32% of builders reported cutting home prices, compared to 25% in August. That’s the largest share of builders cutting prices since December 2022 (35%). The average price discount remains at 6%. Meanwhile, 59% of builders provided sales incentives of all forms in September, more than any month since April 2023.”

Durable Goods Orders Up

New Orders New orders for manufactured durable goods in August, up five of the last six months, increased $0.5 billion or 0.2 percent to $284.7 billion, the U.S. Census Bureau announced. This followed a 5.6 percent July decrease.

• Excluding transportation, new orders increased 0.4 percent.

• Excluding defense, new orders decreased 0.7 percent.

• Machinery, up four of the last five months, led the increase, $0.2 billion or 0.5 percent to $37.8 billion.

Investor Confidence Index Inches Up

State Street Global Markets released the results of the State Street Investor Confidence Index for September 2023.

“The Global Investor Confidence Index increased to 108.7, up 0.9 points from August’s revised reading of 107.8. The increase in Investor confidence was driven by a 11.0 point jump in Asian ICI to 112.6, and, to a lesser extent, a 0.8 point rise in North American ICI to 104.7. European ICI, meanwhile, declined 6.2 points to 97.5.”

Sources: conference-board.org; nar.realtor; census.gov; bls.gov; nahb.org; statestreet.com; msci.com;  fidelity.com;  nasdaq.com; wsj.com; morningstar.com; census.gov

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