For years college savings accounts could only be used for qualified college education expenses. Now, 529 college savings plans can be used to pay for private school.
Although these college savings plans are supposed to be used for your child’s higher education, the money saved in these accounts can now be used for different situations.
In this episode of Financial Fornicating with Madam Money Podcast, Financial Advisor Kevin Matthews II, of BuildingBread.com, shares
What a 529 Savings Plan is
529 Savings Plan Pros and Cons
The new changes to 529 Tax Code and how it may benefit you and your family
[ctt template=”8″ link=”bfwUT” via=”no” ]Be sure to contact your State 529 Savings Plan Administrator to confirm Federal changes apply to your State Taxes. – @BuildingBread[/ctt]
About Kevin Matthews II
Kevin L. Matthews II is a licensed financial advisor, author, and speaker. Kevin has helped hundreds of individuals plan for their retirement and send their children and grandchildren to college. In 2010, Kevin launched BuildingBread, to inspire millennials to set, simplify and achieve any financial goal. Kevin regularly speaks to young adults across the country and has been featured in several media publications and productions including The Wall Street Journal, The New York Times, LearnVest, NerdWallet, and many others.
Thank you for listening to the “Financial Fornicating with Madam Money” Podcast!
We appreciate you listening to the Financial Fornicating with Madam Money Podcast. Please share your comments or questions about this episode below or at info@madammoney.com. Also, please share this episode using the social media buttons.
You can also listen to the Financial Fornicating with Madam Money Podcast on iTunes and Google Play Music! Please share your honest feedback as Ratings and Reviews are very helpful and greatly appreciated!
On
Thursday, July 11, 2019, two of the major market indices hit historical record
highs. For the first time, the Dow closed over 27,000. The S&P 500 also hit a
record closing at almost 3,000. However, the Nasdaq composite fell 6.49 points,
or 0.08%, to 8,196.04.
The Standard and Poor’s 500 (“S&P 500”) tracks the 500 of the largest companies. As an important note, T-Mobile (NASDAQ: TMUS) will replace Red Hat Inc. in the S&P 500 starting Monday, July 15. IBM (NYSE: IBM)acquired Red Hat in a deal that closed Friday, July 12, 2019, and is no longer listed.
The Nasdaq Composite Index is an index of over 3,300 stocks traded on the Nasdaq stock exchange. Not surprisingly, there is significant overlap between all three of the indices. But for anyone who’s been paying attention, the market leaders of this recent surge are clear. Apple (NASDAQ: APPL) and Microsoft (NASDAQ: MSFT) are a component of all three indices—the Dow, S&P 500, Nasdaq composite. Both the Dow and the S&P 500 include Visa (NYSE: V). Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG), two-fifths of the FAANG stocks, are part of the S&P 500 and Nasdaq composite.
All these gains… so what happened to your portfolio?
Image: CreateHer Stock
If your portfolio did not perform as well as you expected on Thursday, it’s important to remember the indices are “averages.” Even if you own some of the stocks represented, your portfolio will not reflect the indices’ performance. For example, with Thursday’s record high, some of the Dow’s most well-known companies- Apple, Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK) – were down.
Second, which is a more nuanced point, the
indices are weighted differently, which significantly affects its performance. The
Dow is a price-weighted index meaning that higher
priced stock will have more influence over the movement of the index than a
lower priced stock. On the other hand, market capitalization (“market
cap”) is used to calculate the weights of the Nasdaq Composite and the
S&P 500. As a result, the movements of a stock with a higher market value,
or market capitalization, will affect the index more than a company with a
higher price per share.
Microsoft and
Visa provide a great example of the difference.
Both companies are listed in the Dow and the S&P 500, but the
respective indexes give each company a different weight. Because Visa has a
higher price than Microsoft, it has more influence over the Dow. But Visa’s
market capitalization is approximately 40% of Microsoft’s, Microsoft has a
significantly higher impact on the S&P 500.
Is there something lurking in the market?
Shutterstock
The question many aren’t asking but should be, is this milestone more of an indication of a market slow down? This 1,000 point increase from 26,000 to 27,000 took almost 39 times longer, 17 months, than the Dow’s movement from 25,000 to 26,000, which took only two weeks. It’s been a bumpy ride. Is this a function of the market just ignoring “all the scary headlines” or irrational exuberance fueled by overvalued tech unicorns much like what caused the dot.com bubble burst of the early 2000s? I would contend that it’s the latter, and investors should be cautious.
Investments that track the indices
If you want to get performance closer to the index, you might want to look into indices that seek to follow them directly. Remember, the key is to buy low and sell high. Consider holding off on purchasing indexes because they are still at record highs. SPDR’s exchange-traded fund (ETF), DIA, tracks the Dow. Fortunately, or unfortunately, there’s no shortage of ETFs which track the S&P 500 including SPDR (SPY), iShares (IVV), and Vanguard (VOO). The ETF that tracks the Nasdaq Composite is Fidelity Nasdaq Composite Index Tracking ETF ONEQ. Note that several ETFs cover only Nasdaq’s top 100 including Invesco’s QQQ.
Wondering if you can actually find ways to have fun, even on a fixed budget? Don’t worry. Just because your money might be limited doesn’t mean that you have to give up on doing the things that you love. When it comes to dealing with money, it can sometimes feel as though it’s quite limiting […]
There are numerous opinions on why women make less than men in the workplace. But, let’s face it … it won’t change unless WE (women) do! So in honor of the War on the Wage Gap, here are four simple salary negotiation tips for women.
ASK
Statistics show that one of the main reasons women make less than men is because women don’t ASK. Asking for help and money seem to be the “kryptonite” of those suffering from the “Wonder Woman” syndrome.
But guess what … If we ask for more money, the world will not come to an end. There will be one of two or three answers (Yes, No or not right now). Besides, the answer will always be NO if we don’t ask! “… You have not because you ask not” – James 4:2 (The Bible). So, for God sake … ASK!
How to prepare to ask:
Ask your human resources person or department for a copy of a most recently updated version of your job description with the salary range. Knowing the salary range for the position will help you understand if there is room for more based on the maximum salary cap and your current salary. If you are at the top of the salary range, consider looking at the next level position for a possible opportunity for promotion.
PROVE
Asking for more money without having documentation and justification will more than likely get our feelings hurt. So, let’s get the Brag File ready! Having a list of accomplishments, positive changes or processes we influenced, explanation and/or proof of how we made or saved the company money will be the justification for more money.
BTW … having an entitlement or bad attitude if the boss says “No” or “Not right now” may hurt future opportunities for advancement that lead to more money.
How to prepare to prove your case for more money:
Review the duties on the job description to make sure you are doing what is expected. Having a Brag File or folder will help you compile all of your awards and accomplishments to ways that you exceeded the expectations of the job description. Also, be sure to include customer or staff emails that sing your praises.
NEGOTIATE
Negotiate, negotiate, negotiate! Most of the time, the employer may not give us the raise we desire. They may “low ball” us or refuse the request altogether. If we don’t get what we want, try asking for other benefits like telecommuting, more vacation/sick or PTO time, professional development/training, or even a salary review within the next quarter.
If the employer is open to giving a raise, know the amount that is acceptable if they choose to give less than requested. ASK… PROVE … Now let the NEGOTIATION begin!
How to prepare to negotiate:
Based on the salary range of the most recent job description and your Brag File/Folder ready, determine how much you are going to request. The pay raise request can be in the form of an amount or percentage. Whichever you prefer, determine your asking amount and how much you will accept if they offer less.
Although the goal is to get what you are asking for, you may be successful with meeting in the middle. Also, don’t forget, benefits instead of cash can be extremely beneficial as well if the employer doesn’t approve the pay raise.
DECIDE
When the employer present the final decision, whether it is Yes, No or Not at this time, take some time to make a decision about if it is acceptable (at least 24 hours). If it is acceptable … Congratulations! “You go, girl!”
If it is not acceptable, decide if it is worth staying at the current pay and benefits (and don’t complain about it), or … if it is time to develop an exit strategy.
How to prepare to decide:
“Plan for the worse, Hope for the best, Expect Success!”
What if your employer does not approve your pay raise request? … Is it worth staying at your current employer? Are there possible opportunities in the near future? Do you like your job, your employer and/or the people you work with? Or … Should you get back out on the job market? Should you learn a new skill for a new occupation?
These are some of the questions you should ask yourself. Write out the PROs and CONs of staying at your job or looking for a new job, then make a decision based on the information. Analysis Paralysis can prolong the professional pain and reacting emotionally can distort your decision making abilities.
You may feel disappointed but use that disappointment as a learning opportunity and fuel move forward and not stop because of fear.
Don’t forget to ask your employer this question … “What can I do to qualify for a raise in the near future?” Let them tell you what they expect or need from you so that you will know exactly how to play this Pay Raise Game.
If your employer said YES to your Pay Raise Request … CONGRATULATIONS!!!
Fore more tips on How to Rock Your Career for More Money, check out this Madam Money class with guest, #MoneyChat Author, Dorethia Kelly.
Financial freedom is right at the front door for many Americans. However, DEBT is the lock that it keeping them from unlocking that door to experience the pleasure of financial independence and security. Not only are many people drowning in credit card and other debt as #MatureMoney (aka Adults), the debt amount is increasing for #YoungMoney (aka Young Adults) thanks to Student Loans.
How to deal with obstacles and still stick to the course.
Who your accountability partners should and should not be.
Why accountability is powerful and helpful.
and more…
Candice Marie shares her vulnerabilities of your Debt Elimination Journey to help others reach their Debt Freedom Goals!
[ctt template=”8″ link=”I8E4e” via=”no” ]”Sometimes sharing your vulnerability is the super power that will save someone’s life.” – @MsMadamMoney[/ctt]
About Candice Marie
6 years ago Candice Marie didn’t want to check her net worth because she knew it would be in the negatives. She created a blog called Young Yet Wise to help her stay on track and learn more about her own money. Today she has a positive net worth, built up savings, investments and paid off $47,500 worth of debt and is now on a mission to help others do the same.
Thank you for listening to the “Financial Fornicating with Madam Money” Podcast!
We appreciate you listening to the Financial Fornicating with Madam Money Podcast. Please share your comments or questions about this episode below or at info@madammoney.com. Also, please share this episode using the social media buttons.
You can also listen to the Financial Fornicating with Madam Money Podcast on iTunes and Google Play Music! Please share your honest feedback as Ratings and Reviews are very helpful and greatly appreciated!
I recently wrote an article for BlackEnterprise.com about a new app that teaches kids to save and invest. I love the app so much that I had to share it…
Tarra “Madam Money” Jackson is a financial educator, international speaker, author, and wealth empowerment strategist helping you heal, build, and grow your wealth.
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