Retire With Ashley

This week’s theme on the Retirement Quick Tips Podcast is: Why Banks Are Going Bust & What To Do About It

Today I’m talking about what happened with Silicon Valley Bank.

Customer base: SVB catered to venture capital, tech startups, and even crypto, all of which have pretty much dried up in the last year, so when customers started taking their money out, there was no fresh capital coming in to offset withdrawals, they were forced to start selling assets to raise the funds to satisfy customer withdrawals. And this is the problem. Silicon Valley Bank had tied up a lot of their assets in treasuries that didn’t mature for several years. After the Fed started aggressively raising rates last year, those treasury bonds on their books started to rack up massive losses - $17 billion by the end of 2022. Then, once they have to sell those treasuries to pay out customer withdrawal requests, the losses are realized, & now they forced to sell their treasury bonds at huge losses, and because of these massive losses, SVB tried to raise additional capital from investors, which they were unable to do.

Then in the 2nd week of March, bank customers started to get really spooked, and more customers because to withdraw their money, creating a death spiral continued to unravel rapidly until collapse and the FDIC had to step in to shut the bank down on Friday, March 10.

https://www.wsj.com/articles/silicon-valley-bank-svb-financial-what-is-happening-299e9b65?mod=markets_major_pos2 

Even though SVB is in a niche market that made it especially exposed to this type of situation, the contagion spread to other banks with stocks of several other regional banks tanking in the aftermath. 

As of this recording, it’s uncertain how far the contagion will spread, but it seems unlikely to spread far at this point, because on Sunday, March 12th, “Regulators including the Federal Reserve, the Federal Deposit Insurance Corp. and the Treasury Department said the depositors of SVB, which failed last week, would have full access to their money starting Monday. They also said they would protect all the depositors of another bank, Signature Bank, that was forced to close on Sunday.” - https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f?mod=markets_major_pos2 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the Retirement Quick Tips podcast! I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $340 million in client assets. I’m a Chartered Retirement Planning Counselor and I’m using my 15 years of experience as a financial advisor to help you gain clarity and make a plan for the retirement you envision.

On this podcast, I cover everything from investing, to retirement spending, to taxes in retirement in just a few minutes each day, so if you’re 5-10 years on either side of retirement, and looking for some daily doses of retirement planning wisdom, stick around this week as I talk about Why Banks Are Going Bust & What To Do About It

Now, I was actually going to talk about a completely different topic this week, but then Silicon Valley Bank failed as I was getting ready to record, I started getting client emails, and shivers down my spine as I recalled the experience of Bear Stearns and Lehman Bros going bust at the onset of the global financial crisis, and I thought I better switch gears to help you make sense of what’s happening with Silicon Valley Bank, one of the largest bank failures in US history. 

So this week, I’ll talk about what happened with Silicon Valley Bank, the implications for investors and the banking system as a whole, and most importantly what you can do to protect yourself. 

That’s it for today. Thanks for listening! Come on back tomorrow…where I’ll break down what led to the collapse at SVB. 

My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

In case you missed any episodes, here’s what we discussed this week…

• Bargains In Housing…They’re Coming

• The Opportunity To Downsize

• Buying A Second Home?

• Consider Intra-Family Loans

• What To Do About Your HELOC

The most important takeaway from this week is…

Tomorrow, I’m starting a brand new theme: The Downside of Being Wealthy

Many people pursue more wealth, without really thinking about the downside of having more and growing your net worth. But it’s important to be grounded in reality when it comes to building wealth - because there are pros and cons to having more. So next week, we’ll explore the downside of being wealthy to keep you grounded in reality when it comes to how having more will actually benefit you. 

Thank you so much for listening this week! If you’re enjoying the podcast, chances are someone else you know who is getting close to retirement could also benefit from checking it out, so please share the show with a friend, a neighbor, your sister, or your boss. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about how to handle a HELOC or a home equity line of credit in this current higher interest rate environment. 

Tapping into your home equity in years past made a lot more sense if you needed to make a large purchase - like a new car, or a home remodel, and you didn’t already have the cash on hand to do it. Since interest rates were so low for so long, as long as you had equity in your house, it made a lot more sense than selling other assets to fund large purchases. 

But since rates have shot up, the math for tapping into a HELOC or any sort of cash out refinance has changed significantly. Rates are often higher than current mortgage rates - currently averaging around 8%, and many of these loans are variable, so if interest rates head higher, your HELOC rate and your payments will climb along with it. 

The point here is that since the math doesn;t work any more with HELOC rates being so much higher, it changes the decision making process. For many, unless it’s necessary, the smart thing to do would just be to hold off on the big purchase. It’s anyone’s guess how long rates will stay higher and it’s possible that we won’t see rates drop back down to the previous 3% range for years. 

Higher rates may also justify selling other assets to pay for a large purchase, or saving up more cash and investing 

If I was planning to make a large purchase in the next 3-5 years, I would save up as much as I could every month, and invest it in something conservative - like a portfolio that has mostly bonds or CDs. I can earn over 4.5% on a money market fund right now, and if rates start to drop, I can migrate that savings to lock in the rate buy purchasing CDs that match my timeline for whatever purchase I’m saving for. 

With rates on HELOCs high, a little patience and a lot of added savings will help keep interest costs lower, and provide more flexibility as well. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

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>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about a common goal that many parents have when it comes to their adult children - helping them buy their first house. My parents and my in laws both helped us with the down payment on our first home, and looking back, it was an incredible gift that I am very thankful for. Because of the help from our parents, we were able to put a meaningful amount of cash down and keep our mortgage payments very affordable. Then, 5 years later when we sold that house and moved to our current home, we had plenty of equity to transfer over and without that initial down payment, we wouldn’t have been able to buy our current home, that now houses our family of 6 + our dog.

One attractive option for parents looking to help their children buy their first home is an intra-family loan. Basically, the bank of mom or dad or both loans money to a child borrower for the purchase of a house. You have to follow a certain set of guidelines for the loan to qualify and not be deemed a gift instead, but if you do it right, it helps both you and your child in several ways:

• The interest costs paid by the child stay in the family (to be used by the parents)

• Origination and other transaction fees may be avoided; 

• And the biggest benefit in today’s market: the borrowing cost for the child is typically much lower than interest rates from the bank; the rates for these loans are set by AFR or applicable federal rates, which are currently 3.74% as of early March 2023. Compare that to the national average on a 30yr fixed mortgage right now, that recently topped 7% again.

Now obviously the risk of loaning to your child is real those payments could stop if they lose their job or something catastrophic happens, so the risk is higher than owning a diversified bond portfolio, but the interest rate paid to you as a lender is still better than what the parents can earn from a bond portfolio. 

Obviously, you need to have the assets to make an intra family loan pencil out, but if you do have the assets and your child is looking to buy a house, it’s a great strategy to consider with even more appeal when rates are higher. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about the opportunity to purchase a 2nd home - whether that’s a rental, a snowbird spot, or a vacation home, a decline in housing prices means an even greater decline for popular vacation or 2nd home destinations. During the global financial crisis in 2008, vacation home sales dropped 30% and prices came down 23% in just one year from 2007 to 2008. 

Obviously we’re not there yet, but you can take steps today if you’re serious about it:

• Start shopping & decide on places you would consider buying and understand what’s happening in the market (corporate buyers are already exiting)

• Story about central OR, Florida, Arizona, South Carolina - seriously considering a move

• Save as much as possible and invest it in 1 year CD or Treasuries or money market where the money will be safe but grow while you wait

• Crunch the numbers and figure out what you can afford, so you’ll know when the values come down to a more reasonable level and when you’re ready to buy…you don’t need to wait until the bottom (we bought our first house in Jan 2009 when prices came down, but didn’t bottom for another couple of years). Fixed rate mortgages are high, but ARMs are cheaper if you can deal with the potential uncertainty that your interest rate will increase

• Be patient - this could take years to fully materialize - market cycles can be long and the last downturn in housing took about 10 years to get back to peak housing levels, so there is no rush and you have time to be prudent.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about what I think is the biggest opportunity that exists with the current housing and mortgage market - the opportunity to downsize.

• Sell and pay cash with equity and savings, or significantly reduce mortgage - cash is king

• Moving to a more desirable location - Buyers also will have the upper hand in a handful of cities where prices are set to fall or are already on the decline. That includes high-growth cities like Austin, Phoenix, Las Vegas, and even Boise, Idaho, as well as coastal California and the Pacific Northwest, where prices could fall by 10% or more - https://www.investopedia.com/us-housing-faces-ugly-transition-in-2023-7111840 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Subscribe on Apple Podcasts: httpstr://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today I’m talking about why I think we’re just at the beginning of price declines in housing.

• Personal savings rate has plummeted to levels not seen in 15 years, dropping to about 3% in 2022 from a peak of over 30% in the early days of the pandemic. After inflation took hold, the checks from the federal government stopped, and post-pandemic life largely resumed to normal, Americans started rapidly depleting those savings. Since 1960, personal savings rates have been well above 5%. The only other time savings rates have been this low were just before the financial crisis in 2008, when they hovered in the 3% range in the years leading up to that. 

• The problem here, is that Americans have no more breathing room in their finances, so it’s a house of cards for many. Homeowners may have equity in their homes, but they don’t have the ability to weather an economic storm like a job loss.

• The housing market has already cooled significantly, and it’s only a matter of time in my opinion - probably later in 2023, that businesses will feel the pain of lower spending by consumers, and higher costs to service their debt, and you’ll see layoffs and job losses accelerate. 

• No income and no savings is a bad combo for housing prices that have already been in decline. 

• In many places, housing prices have cooled, but I would expect a freeze over and more people in a position of needing to sell because of needing to relocate for work, they lost their job, they needed to start paying on their student loans again, and the math just doesn’t work - they can no longer afford the house they bought 

• With inflation being stubborn, interest rates will simply not go down anytime soon and there’s a reckoning coming, because the house of cards that many Americans have built relies on the economy continuing to grow and keeping their job. Both of which are unlikely to continue in this rising interest rate environment. 

• So it seems reasonable then, that bargains in housing are coming. 

• I’ll talk later this week about specific areas where this could benefit you, but especially if you’re looking to buy a 2nd home, looking to downsize, or looking to move to a desirable location that has recently become unaffordable, you can benefit from the downward pressure on house prices that I think will accelerate in 2023. 

• I think in some markets, especially the hottest ones with the eye-popping jump in prices - you’ll see the biggest declines there - possibly 20-30% or more as prices finally come back down to reality. And if you’re house declines in value too - you still benefit unless you’re trying to sell in one of the overheated areas. If you’re house loses 5% in value, you still benefit if your new home has dropped 20% in value

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the Retirement Quick Tips podcast! I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $340 million in client assets. I’m a Chartered Retirement Planning Counselor and I’m using my 15 years of experience as a financial advisor to help you gain clarity and make a plan for the retirement you envision.

On this podcast, I cover everything from investing, to retirement spending, to taxes in retirement in just a few minutes each day, so if you’re 5-10 years on either side of retirement, and looking for some daily doses of retirement planning wisdom, stick around this week as I talk about How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates

Most of the media pieces out there bemoan higher interest rates as a negative, and it is of course a huge problem for anyone with variable interest rate debt like credit cards, or anyone trying to tap into their home equity line of credit, buy a car or a house right now and get mortgage at 7%...no thank you. But there’s a great article that came out a few weeks ago that talks about ways to benefit from higher interest rates.

So this week, I’ll talk about how higher interest rates can potentially benefit you in a variety of ways…and in some ways you may not have considered before. 

That’s it for today. Thanks for listening! Come on back tomorrow…where I’ll talk about why further price declines in housing are coming, why I think it’s going to get ugly, and how you can take advantage of a housing market that’s in disarray. 

My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP 

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

01It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was:The Single Biggest Threat To Your Retirement

In case you missed any episodes, here’s what we discussed this week…

• How most people perceive their retirement risks all wrong, and what the real risks to your retirement is…topping the list: longevity

• The real problem with longevity risk, and why most people aren’t protected against it

• What to do about it (3 parts)

The most important takeaway from this week is: to recognize that longevity risk is the single biggest threat to your retirement, and to understand ways to mitigate that risk in your own situation to reduce the chance that you’ll run out of money in retirement 

Tomorrow, I’m starting a brand new theme: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates

It may not be the best time to refinance your mortgage, but that doesn’t mean there aren’t opportunities for homeowners in this current higher interest rate environment. So next week, I’ll talk about some opportunities that exist for homeowners today - especially if you’re close to retirement and considering paying off your mortgage, moving, or downsizing. 

Thank you so much for listening this week! If you’re enjoying the podcast, chances are someone else you know who is getting close to retirement could also benefit from checking it out, so please share the show with a friend, a neighbor, your sister, or your boss. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance