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Tag: debt

  • Biden Pivots To Buying Votes, Cancels $6 Billion In Student Loan Debt For 78,000 Public Service Workers

    Biden Pivots To Buying Votes, Cancels $6 Billion In Student Loan Debt For 78,000 Public Service Workers

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    Gage Skidmore/Creative Commons

    Do you have student loan debt?

    Don’t worry about it. That is if you work in public service.

    RELATED: AOC Claims ‘RICO Is Not A Crime’ During Wild Exchange Where She Demands Witness Name Specific Crimes Committed By President Biden

    No Student Loan Debt For Public Workers

    From Reuters, “U.S. President Joe Biden announced Thursday that $6 billion in student loans would be canceled for 78,000 borrowers, bringing his administration’s total student debt cancellation to nearly $150 billion.”

    “Biden, a Democrat, last year pledged to find other avenues for tackling debt relief after the Supreme Court in June blocked his broader plan to cancel $430 billion in student loan debt,” Reuters noted.

    The story continued:

    The latest group includes public service workers, like teachers, nurses and firefighters, who qualify under the Public Service Loan Forgiveness Program created in 2007 to forgive student debt for Americans who go into public service.

    “These public service workers have dedicated their careers to serving their communities, but because of past administrative failures, never got the relief they were entitled to under the law,” Biden said in a statement.

    As of June 2023, about 43.4 million U.S. student loan recipients had $1.63 trillion in outstanding loans, according to the Federal Student Aid website. Higher education debt has tripled since the 2008 financial crisis.

    Steep interest and hefty payments on these loans mean younger Americans struggle to buy homes or make other investments, and Democrats have pushed for U.S. government forgiveness for years. Republicans largely oppose such actions.

    RELATED: Haitian Illegal Immigrant Charged With Raping Disabled 15-Year-Old, Came To US Via Biden’s Parole Program

    Is It A Political Ploy?

    Don’t think for one second that Biden’s prospects for the election in November don’t play a role in this.

    He needs the youth vote, for one.

    “I won’t back down from using every tool at my disposal to deliver student debt relief to more Americans, and build an economy from the middle out and bottom up,” Biden said.

    Polls continue to show that the presumptive Republican presidential nominee, Donald Trump, is ahead of Biden. This should be particularly concerning for the Biden campaign in the swing states, where the president is currently losing.

    Don’t be surprised if Joe Biden forgives even more student loan debt between now and November.

    Former Obama Fundraiser Blasts Letitia James For Trying To Seize Trump’s Assets: ‘Trying To Inflict Pain Before Trump Wins Appeal’

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  • What happens if I don’t pay my credit card bills?  – MoneySense

    What happens if I don’t pay my credit card bills?  – MoneySense

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    If you’re struggling to make your minimum credit card payments, you’re not alone. Unexpected emergencies can sometimes leave us short on funds to make the minimum payment on a credit card. According to Equifax Canada’s 2023 Market Pulse Consumer Credit Trends and Insights report, nearly 35% of Canadians carry balances on their credit cards from month to month. However, there are potential consequences for not paying your credit card bill on time. So here are the steps you can take to minimize the impact.

    Note that credit card companies may respond differently to missed payments, ranging from a tersely worded letter to potential legal action, depending on your issuer and your situation. In this article, we’ll explore the implications and ways to manage your credit card debt.

    What are the immediate consequences of not paying a credit card bill?

    If you don’t pay your minimum credit card balance, there could be different outcomes depending on the type of credit card you carry and the credit card issuer. Missing a couple payments will usually result in a hit to your credit score, as well as penalty fees like late charges and potentially a higher interest rate. If you miss more than one payment, the credit card company may also close your card. 

    Review your credit card agreement to ensure you are aware of your obligations and any potential penalties. If you miss payments, the credit card company may do any or all three of the following, according to the Canadian government:

    1. Revoke promotional interest rates.
    2. Increase interest rates in general.
    3. Cancel the credit card.

    Will my credit score be impacted if I don’t pay?

    Payment history is the biggest factor in calculating your credit score, so a late or missed payment can definitely impact it. Your credit score indicates creditworthiness for lenders, meaning it influences the loans you may qualify for, the interest rate you’ll pay, what you can buy on credit, and maybe even where you work and where you live. 

    Typically, one missed payment won’t end up on your credit report for at least 30 days after the payment due date. If you make the payment before that point, you might incur penalty fees, but your credit score likely won’t suffer. However, if you don’t pay your credit card for longer than that, your credit will take a hit and hinder your ability to qualify for certain financial services in the future.

    Interest increases and penalty fees on missed card payments

    Depending on the terms and conditions of your credit card, you may have to pay a late fee if you miss a payment. Penalty fees can depend on your balance and what’s outlined in the credit card agreement. 

    In addition, you might face a penalty annual percentage rate (APR) if you miss payments by at least 60 days, resulting in a higher interest rate being applied for a period of time. And that can grow your debt even higher. These terms differ depending on the credit card issuer. 

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    Randolph Taylor

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  • Joe Biden’s misleading claim about cutting the deficit

    Joe Biden’s misleading claim about cutting the deficit

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    As he has done on several occasions, President Joe Biden used the State of the Union address to tout his administration’s efforts to cut the federal deficit.

    During his March 7 address to Congress, Biden said, “I’ve been delivering real results in fiscally responsible ways. We’ve already cut the federal deficit by over $1 trillion.”

    Biden has presided over smaller deficits than former President Donald Trump’s administration saw in its final year. However, Biden’s remarks omit important context about the unusual federal spending that both presidents approved to stabilize the country during the coronavirus pandemic. 

    “President Biden has presided over declining deficits, but that’s because the deficit started staggeringly high because of the pandemic,” Steve Ellis, president of Taxpayers for Common Sense, a group that tracks federal spending, told PolitiFact this month. “If you compare the deficit to pre-pandemic levels, they are incredibly high. Some of that is still residual effects from the pandemic response and higher interest rates, but it is also from increased spending and decreased revenues.”

    What is the deficit? What is the debt?

    The deficit isn’t the same as the debt, although the terms are related.

    The federal deficit is calculated by subtracting federal spending from federal revenue, primarily tax collections, for a given year. If revenue exceeds spending, there’s a surplus for that year; if spending exceeds revenue, there’s a deficit. (There hasn’t been a federal surplus since 2001.)

    The national debt is the accumulation of all past deficits, minus any surpluses. 

    A smaller deficit does not mean the federal debt has shrunk; only a surplus can do that. A smaller deficit means only that the debt grows more slowly than it did before.

    So, the debt has continued to rise under Biden. When Biden entered office, the broadest measure of the federal debt stood a little below $27.8 trillion. Currently, it’s around $34.4 trillion, an increase of almost one-fourth in a little more than three years.

    The debt also rose under Trump, by about $7.8 trillion over his four years in office.

    How big has the deficit been in recent years?

    Biden’s claim about the annual deficit, meanwhile, leaves out important context.

    During Trump’s presidency, the deficit rose from $666 billion in 2017, his first year in office, to $984 billion in 2019, his third year.

    But the coronavirus pandemic sent the annual deficit into record territory. In 2020, Trump’s fourth year, the deficit skyrocketed to $3.13 trillion, largely because of government stimulus payments, unemployment insurance expansions, business operation grants and increased funding for public health.

    The deficit remained high in 2021, another significant pandemic year. That year, a newly elected Biden signed the American Rescue Plan Act, which provided more money for the pandemic response. In 2021, the deficit fell but remained historically high, at $2.78 trillion.

    The deficit declines were greater during Biden’s second and third years in office, as vaccines and therapies cut the risks associated with COVID-19 and the economy opened. The deficit was about $1.38 trillion in 2022 and $1.7 trillion in 2023.

    The $1.4 trillion decline in the deficit from 2021 to 2022 was larger than any previous one-year reduction in the deficit. The decline from 2021 to 2023 was almost $1.1 trillion. 

    How much credit does Biden deserve for reducing the deficit?

    Although Biden often touts the federal spending from bills he’s signed — including the CHIPS and Science Act, the Inflation Reduction Act and the Bipartisan Infrastructure Law — he’s also tried to promote the argument that he’s been responsible with the public purse.

    The White House told PolitiFact that Biden’s administration deserves some credit for successfully tamping down the pandemic, partly because it embraced and promoted  vaccinations. 

    Also, White House officials say that key legislation Biden signed, such as the Inflation Reduction Act, was written in a way to boost federal revenue enough to balance out the spending increases. The Fiscal Responsibility Act, which Biden signed in 2023 as a negotiated way to lift the debt limit, included spending curbs that were designed to reduce deficits from 2024 to 2033 by a collective $1.5 trillion, according to Congressional Budget Office projections.

    However, the pandemic was an extraordinary historical occurrence that provoked an aggressive, and temporary, government response. The other bills Biden signed, although large in dollars, are phasing in their spending over a decade.

    The deficit, even at its reduced levels, remains higher under Biden than it was pre-pandemic. The deficit in 2022 and 2023 under Biden was higher than in each of Trump’s first three years, partly because of bills such as the 2021 American Rescue Plan.

    The same pattern emerges when the deficit is compared with the U.S. gross domestic product, a common measure of the economy’s overall size. The deficit peaked at 14.7% of gross domestic product in 2020 and fell to 5.4% in 2022. That was still bigger than the highest pre-pandemic percentage under Trump, 4.6%.

    Our ruling

    Biden said, “We’ve already cut the federal deficit by over $1 trillion.” 

    The annual deficit did decline by $1.4 trillion on Biden’s watch, from 2021 to 2022. That was larger than any previous one-year reduction in the deficit. Looking at the two-year period from 2021 to 2023, the deficit declined by less, but still by almost $1.1 trillion.

    However, the pandemic was an extraordinary historical occurrence that provoked an aggressive, and temporary, government response.

    On Biden’s watch, even this reduced deficit is larger than any of the deficits on Trump’s watch. And the federal debt has kept rising, just more slowly than it did during the pandemic.

    We rate the statement Half True.

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  • Man wins $150K on lottery scratch-off: ‘For the first time…I’m not in debt’

    Man wins $150K on lottery scratch-off: ‘For the first time…I’m not in debt’

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    A Kentucky man took home more than his groceries during one of his shopping trips. He also took home thousands of dollars.Related video above: Lottery tips so you don’t lose all your winningsThe Kentucky Lottery says Charles Stallard stopped at Price Less Foods in Louisville on Feb. 9 to do his grocery shopping when he purchased a $5 50X The Cash ticket.As Stallard scratched his ticket off in his truck, he revealed a 50X symbol, indicating the prize was multiplied.“When it came up 50 times, I figured it was going to be $5,” he said. “When I scratched off $3,000, I actually started crying. I couldn’t believe it!”The full prize ended up being $150,000 — the most for that ticket. Since Stallard scratched the winning ticket off late on a Friday afternoon, lottery officials said he had to wait until the next Monday to claim the prize. He walked away with a check for $108,000 after taxes. “I didn’t get much sleep all weekend,” Stallard said. “For the first time in my life, I’m not in debt. I get to pay my house off.” He also shared with lottery officials that his boat has been broken down for a year and he’s excited to be able to take it to the shop to get fixed. “Once I get everything paid, I’m fishing the rest of the year,” he said.Price Less Foods will receive $1,500 for selling the winning ticket.

    A Kentucky man took home more than his groceries during one of his shopping trips. He also took home thousands of dollars.

    Related video above: Lottery tips so you don’t lose all your winnings

    The Kentucky Lottery says Charles Stallard stopped at Price Less Foods in Louisville on Feb. 9 to do his grocery shopping when he purchased a $5 50X The Cash ticket.

    As Stallard scratched his ticket off in his truck, he revealed a 50X symbol, indicating the prize was multiplied.

    “When it came up 50 times, I figured it was going to be $5,” he said. “When I scratched off $3,000, I actually started crying. I couldn’t believe it!”

    The full prize ended up being $150,000 — the most for that ticket.

    Since Stallard scratched the winning ticket off late on a Friday afternoon, lottery officials said he had to wait until the next Monday to claim the prize.

    He walked away with a check for $108,000 after taxes.

    “I didn’t get much sleep all weekend,” Stallard said. “For the first time in my life, I’m not in debt. I get to pay my house off.”

    He also shared with lottery officials that his boat has been broken down for a year and he’s excited to be able to take it to the shop to get fixed.

    “Once I get everything paid, I’m fishing the rest of the year,” he said.

    Price Less Foods will receive $1,500 for selling the winning ticket.

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  • Man wins $150K on lottery scratch-off: ‘For the first time…I’m not in debt’

    Man wins $150K on lottery scratch-off: ‘For the first time…I’m not in debt’

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    A Kentucky man took home more than his groceries during one of his shopping trips. He also took home thousands of dollars.Related video above: Lottery tips so you don’t lose all your winningsThe Kentucky Lottery says Charles Stallard stopped at Price Less Foods in Louisville on Feb. 9 to do his grocery shopping when he purchased a $5 50X The Cash ticket.As Stallard scratched his ticket off in his truck, he revealed a 50X symbol, indicating the prize was multiplied.“When it came up 50 times, I figured it was going to be $5,” he said. “When I scratched off $3,000, I actually started crying. I couldn’t believe it!”The full prize ended up being $150,000 — the most for that ticket. Since Stallard scratched the winning ticket off late on a Friday afternoon, lottery officials said he had to wait until the next Monday to claim the prize. He walked away with a check for $108,000 after taxes. “I didn’t get much sleep all weekend,” Stallard said. “For the first time in my life, I’m not in debt. I get to pay my house off.” He also shared with lottery officials that his boat has been broken down for a year and he’s excited to be able to take it to the shop to get fixed. “Once I get everything paid, I’m fishing the rest of the year,” he said.Price Less Foods will receive $1,500 for selling the winning ticket.

    A Kentucky man took home more than his groceries during one of his shopping trips. He also took home thousands of dollars.

    Related video above: Lottery tips so you don’t lose all your winnings

    The Kentucky Lottery says Charles Stallard stopped at Price Less Foods in Louisville on Feb. 9 to do his grocery shopping when he purchased a $5 50X The Cash ticket.

    As Stallard scratched his ticket off in his truck, he revealed a 50X symbol, indicating the prize was multiplied.

    “When it came up 50 times, I figured it was going to be $5,” he said. “When I scratched off $3,000, I actually started crying. I couldn’t believe it!”

    The full prize ended up being $150,000 — the most for that ticket.

    Since Stallard scratched the winning ticket off late on a Friday afternoon, lottery officials said he had to wait until the next Monday to claim the prize.

    He walked away with a check for $108,000 after taxes.

    “I didn’t get much sleep all weekend,” Stallard said. “For the first time in my life, I’m not in debt. I get to pay my house off.”

    He also shared with lottery officials that his boat has been broken down for a year and he’s excited to be able to take it to the shop to get fixed.

    “Once I get everything paid, I’m fishing the rest of the year,” he said.

    Price Less Foods will receive $1,500 for selling the winning ticket.

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  • Couples and credit scores: How your partner’s credit can affect yours – MoneySense

    Couples and credit scores: How your partner’s credit can affect yours – MoneySense

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    Should I get a joint credit card with my partner?

    While your partner’s credit score won’t directly impact your credit score, joint accounts or adding the other as a co-applicant will. The one exception is adding your partner as an authorized user to your credit cards and banking accounts. 

    When added as an authorized user, your partner is able to use the credit card but cannot make any changes to the account. Their credit will also not be impacted in any way. However, when a partner is added as a co-applicant, they have to go through the required credit checks and both partners’ credit is impacted based on usage of the account.

    Joint accounts can be beneficial when both partners are on the same page with money. For example, a joint account can give you access to a larger borrowing limit. It also can simplify your finances and foster feelings of partnership. However, depending on your partner’s money habits, sharing a joint credit card could be a real risk to your money and your credit score.

    If either of you miss a payment on a joint account or run up a large balance, each of your credit scores can take a hit. On the other hand, if you and your partner always make your payments on time, both of you will see improvement in your credit scores as the joint account will show up on both of your credit reports. 

    Getting extra credit through a joint credit card might seem like a good idea, be sure to assess each of your financial situations before doing so as gaining new credit can influence financial behaviours. Be critical about how having more or less credit affects your ability to live within your means and pay off your debt in full each month. If you or your partner have any debt, the focus should be on paying it down. Only consider a new, joint credit card if you have paid off your individual debts first.

    How to maintain healthy credit history (and prevent debt) as a couple

    Before combining finances in any way, such as joint credit cards or loans, it is imperative that you and your partner are in agreement and have the same expectations. To maintain healthy credit and prevent debt, consider the following five things: 

    1. Make sure your partner is someone you can trust to properly budget by having open and transparent conversations about money. 
    2. Set boundaries on how the joint account or loan will be used, as well as spending limits. Some couples ensure they both agree on a purchase beforehand, whereas others may check in at the end of the month to ensure all spends are accounted for—it’s good for catching credit card fraud, too, since you never assume it was the other person.
    3. Agree on who will make payments to ensure they’re made on time.
    4. Decide the amount you each will contribute to shared expenses. Will it be 50/50 or a percentage based on your incomes?
    5. Discuss what happens if one of you can’t make a payment due to income loss or illness. What’s your backup plan?

    Money isn’t worth fighting about—but it’s worth talking about

    Discussions about finances aren’t always easy. They might cause stress, tension and arguments with your partner. But, the more you practice communicating with honesty and intention, it does become easier. 

    None of this is to say your partner having a sub-par credit score should be a deal breaker. In fact, it’s fairly simple to start rebuilding credit. As professionally certified credit counsellors with Credit Canada, we often help couples understand their credit and address debt. If you need additional support, contact us today to book a free credit-building counselling session.

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    Sandy Daykin

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  • How to navigate market risk from interest rates, the economy and politics in 2024

    How to navigate market risk from interest rates, the economy and politics in 2024

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    As the U.S. Federal Reserve’s three-year reign in the headlines potentially comes to an end, an analysis of this year’s market themes can offer valuable insights for predicting trends and ensuring attractive returns in 2024.

    Beyond the central bank’s actions, pivotal factors shaping the investment landscape this year include fiscal policies, election outcomes, interest rates and earnings prospects.

    Throughout 2023, a prominent theme emerged: that equities are influenced by factors beyond monetary policy. That trend is likely to persist. 

    A decline in interest rates could significantly increase the relative valuations of equities while simultaneously reducing interest expenses, potentially transforming market dynamics. Contrary to consensus estimates, 2023 brought a more robust earnings rebound, leaving analysts optimistic about 2024.

    The 2024 U.S. presidential election, meanwhile, introduces a new element of uncertainty with the potential to cast a shadow over the market during much of the coming year. 

    Choppy trading, modest earnings growth

    Anticipating a choppy first half of the year due to sluggish economic growth, we see a better opportunity for cyclicals and small-cap stocks to rebound in the latter part of the year. As uncertainty around the election and recession fears dissipate, a broad rally that includes previously ignored cyclicals and small-caps should help propel the S&P 500
    SPX
    higher. 

    Broader macroeconomic conditions support mid-single-digit growth in earnings per share throughout 2024. Factors such as moderate economic expansion, controlled inflation and stable interest rates are expected to provide a conducive environment for companies, enabling them to sustain and potentially improve their earnings performance. We estimate EPS growth of 6.5%. This projected growth aligns with the broader market sentiment indicating a steady upward trajectory in earnings for the upcoming year, fostering investor confidence and supporting valuation expectations across various sectors.

    If the economy has not been in recession at the time of the first rate cut but enters one within a year, the Dow enters a bear market.

    When it comes to U.S. stock-market performance around rate cuts, the phase of the economic cycle matters. When there has been no recession, lower rates have juiced the markets, with the Dow Jones Industrial Average
    DJIA
    rallying by an average of 23.8% one year later.

    If the economy has not been in recession at the time of the first cut but enters one within a year, the Dow has entered a bear market every time, declining by an average of 4.9% one year later. Our base case is a soft landing, but history shows how critical avoiding recession is for the bull market as the Fed prepares to ease policy.   

    Big on small-caps

    This past year has posed a hurdle for small-cap stocks due to the absence of a driving force. These stocks typically perform better as the economy emerges from a recession. While they are currently undervalued, their earnings growth has been notably lacking. If concerns about a recession diminish, a normal yield curve could serve as a potential catalyst for small-cap stocks.

    Growth vs. value

    The ongoing outperformance of megacap growth stocks that we saw in 2023 might hinge on their ability to sustain superior earnings growth, validating their current valuations. Defensive sectors in the value category, meanwhile, are notably oversold and might exhibit strong performance, particularly toward the latter part of the first quarter. Should concerns about a recession dissipate, cyclical sectors within the value category could outperform, particularly if broader market conditions turn favorable in the latter half of the year.

    Handling uncertainty

    The Fed’s enduring influence regarding the prospect of a soft landing in 2024 remains a pivotal point in the market’s focus. Considering the themes of the past year and the multifaceted influences on equities beyond monetary policy, investors are advised to navigate through uncertainties stemming from unintended fiscal shifts, upcoming elections and the impact of fluctuating interest rates. While a potentially choppy start to the year is anticipated, it could create opportunities for cyclical and small-cap stocks later in the year.

    Ed Clissold is chief of U.S. strategies at Ned Davis Research.

    Also read: Mortgage rates dip after Fed meeting. Freddie Mac expects rates to decline more.

    More: After the Fed’s comments, grab these CD rates while you still can

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  • 6 Aspects Of A Balanced Person: A Complete Picture of Well-Being

    6 Aspects Of A Balanced Person: A Complete Picture of Well-Being

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    What are the six aspects of a balanced person? Physical, mental, emotional, social, work/financial, and meaning/spiritual. Learn more about each one and how to improve it!


    In life, there isn’t one single area that we need to focus on that is going to magically fix all of our problems.

    Instead there are multiple dimensions behind every “good life.” Each dimension requires our attention and each contributes to our overall happiness and well-being.

    Here are six aspects of life that come together to create a “balanced person.” By being more aware of these different dimensions in life, we can determine which areas we need to focus on more and work to improve.

    The different aspects of a balanced person include: 1) Physical, 2) Mental, 3) Emotional, 4) Social, 5) Work/Financial and 6) Meaning/Spiritual.

    If we focus too much on any one area, then we risk neglecting another one. For example, if you become solely focused on just work and money, you may end up spending less time taking care of your physical and mental health, or less quality time with family and friends.

    This is a common trap people fall into. They focus all of their energy and effort into one area in life while completely ignoring another. Often they need to reconfigure their core values and priorities before making a meaningful change.

    This is why practicing balance in all things is so important.

    Each of these areas is one piece of a much larger puzzle, and only when you have all of these areas working together harmoniously can you finally build a complete life that serves all of your needs.

    Here’s a detailed breakdown of each aspect of a “balanced person,” along with tips, tools, and practical advice on how you can start improving each one.

    While reading ask yourself, “Which aspect do I need to focus on the most right now? What’s one small change I can make to improve that area?”

    Now let’s dive in…

    1. PHYSICAL WELL-BEING

    health

    The “physical” aspect of life is all about taking care of our health, especially exercise, diet, and sleep.

    This includes what types of foods and drinks we consume on a daily basis, how often we exercise and keep our bodies moving, personal hygiene and cleanliness, as well as minimizing alcohol, smoking, and other harmful habits to our physical health.

    Our body is one of the most precious gifts we have – and without it we can’t exist. If we don’t stay healthy, we often can’t fully enjoy all the other aspects of life such as family, work, traveling, or leisure.

    Our health can often have a spillover effect into all the other aspects of our lives – for that reason, taking care of our physical health is often an essential first step on any road to self-improvement.

    No matter what the current state of our health is, it’s never too late to start changing our habits, even if it’s something small like stretching in the morning, taking daily walks outside, or starting an active hobby like Yoga, marathon running, or playing sports.

    A healthy body is a healthy mind. When we take better care of our bodies, we also feel more confident, motivated, and energized overall. That’s the beginning of bringing out your best self.


    Things to do:

    • Identify small ways to be more physically active. Often our days are filled with opportunities to be more active, we just need to take advantage of them. Try to cultivate an “everything counts” mindset when it comes to exercise, even if it just means taking a walk around the block, or stretching in the morning, or doing push-ups before lunch. Any physical activity is better than none at all – so seek out small and convenient ways to keep your body moving throughout the day. If you find yourself sitting for long periods of time, get up and do chores, take a walk around the office, or make a phone call while standing up. A sedentary lifestyle is one of the biggest risk factors when it comes to poor health, so finding any reason to stand up more is better than sitting.
    • Find exercise that “clicks” with you and your personality. Different things work for different people. Some people need to commit themselves to a gym membership to get themselves off the couch, while others prefer to work out in the comfort of their own homes. Your personality shapes what exercise you like, so it’s important you find activities that resonate and “click” with you, rather than trying to force yourself to do something you really don’t enjoy. All you need is that one hobby to take your fitness to the next level, whether it be finding an enjoyable sport (like Tennis, or Baseball, or Basketball), or even exercising through video games (such as Wii Fit or Dance Dance Revolution). Try to think of physical activities you enjoyed as a kid, that can often be a good place to rekindle motivation.
    • Keep a healthy and consistent sleep schedule. Sleep is one of the most important habits when it comes to your overall physical and mental health. Research shows that those who don’t get sufficient sleep (between 6-10 hours every night) often suffer worse health outcomes like a weaker immune system, higher risk of obesity, lower energy and stamina, and more stress and anxiety. If your sleep habits aren’t healthy or consistent, it will likely have a negative “ripple effect” on almost every other aspect of your day. When you’re tired and fatigued, you’re more likely to make mistakes at work or argue with your spouse. It’s important not only to get between 6-10 hours of sleep each night, but also to maintain a consistent schedule. If you don’t sleep much on the weekends, it’s difficult to “catch up” on those lost hours throughout the week. Try to go to bed and wake up around the same time each day if possible. Here are more important lessons behind a good night’s sleep, including recognizing that some people are natural “early birds” or “night owls,” and that’s something you need to recognize and work with.
    • Pay attention to your food and diet. There are many different diets out there to choose from – and people can have long debates about which one is better – but the most important thing is to not eat too much, especially junk food, fast food, soda, sweets, and lots of processed food. Use your commonsense. Experiment with different diet changes and see what works best for you. Different diets work better for different people – so there’s no “one size fits all” solution to what exactly you should eat or not eat. One simple diet change is to substitute all your soda/juice/sugary drinks with water instead. Drinking plenty of water is never a bad place to start – most people don’t recognize how dehydrated they can be throughout the day and how it effects them. If you’re trying to lose weight, one popular option you can consider is intermittent fasting where you allow yourself to eat for an 8 hour window each day and fast for the remaining 16 hours. You can also try the “One Meal A Day” approach, where you restrict yourself to just one big meal (with minimal snacking). In general, pay attention to how your body responds to the things you eat: What foods leave you tired and feeling like crap? What foods make you energized and feeling good?
    • Take care of personal hygiene and cleanliness. Proper hygiene is another important aspect of physical health. While it can seem like commonsense, basic habits like taking a shower, brushing your teeth, getting a haircut, trimming your nails, and washing your face are are all important things not to neglect. Not only does cleanliness prevent you from catching germs and getting sick, you also feel better about yourself when you present yourself in the best way possible (and smell good). Often we are surprised by how much better we feel after a fresh new haircut, or clean new clothes, or new cologne/perfume. When mental health is low, we sometimes neglect these basic habits out of laziness or apathy, which is why they are a crucial first step in self-improvement if we aren’t paying enough attention to them.
    • Minimize your bad habits. No one is 100% perfect and we all have a couple bad habits, whether it be eating too many sweets, or drinking alcohol, or staying up late, or smoking cigarettes. In general, it’s important to quit (or minimize) our unhealthy habits as much as possible. “Choose your crutches wisely.” Keep in mind the long-term consequences of your habits – while it may not feel like they are hurting you right now, their effects can often catch up to you in the future. When trying to quit any bad habit, identify your triggers and work from there to change to change your patterns. Often by creating more boundaries between you and your bad habits, you can overcome your urge to do them (until it’s no longer an automatic habit anymore). If you find that you have a serious problem with addiction or drug abuse, consider professional help (such as a therapist, psychologist, or counselor) – there are often local resources available in your area if you do a quick search.

    Please don’t underestimate the importance of keeping your body in the best shape possible. As Socrates famously said, “No man has the right to be an amateur in the matter of physical training. It is a shame for a man to grow old without seeing the beauty and strength of which his body is capable.”

    Physical health is about much more than just looking and feeling good about yourself – it’s about living a life of vitality and longevity. You can have everything else in your life figured out, but if you don’t maintain your health you won’t be around very long to use or enjoy it.

    2. MENTAL WELL-BEING

    mental

    If you don’t take care of your body then it will slowly deteriorate – and the same is true for your mind.

    Just because you don’t have to go to school anymore doesn’t mean you can’t keep learning new things, keeping your brain sharp, and challenging your intellect.

    Reading books. Learning about new topics. Having deep conversations. Attending lectures and workshops. Following the news. These are all commonsense ways to keep our minds active and continue to update our knowledge and belief system as we move through life.

    Learning is a lifelong endeavor. Balanced people are always seeking new things to dig into and learn more about like a new hobby, new game, or new skill such as painting, chess, learning a new language, or playing a musical instrument.

    In addition, research shows that continuing to challenge our brain is an important way to prevent cognitive decline as we get older, including lower the risk of dementia and memory loss.


    Things to do:

    • Read more books. Reading is one of the best ways to keep your mind sharp and learn new things. Nonfiction books about science, history, philosophy, or self help can grow your knowledge and broaden your perspective on life; and reading fiction has been shown to have many cognitive benefits such as boosting empathy, creative thinking, and expanding your vocabulary. If you haven’t read a book in awhile, try to make it a goal to read at least one book this year. You can start with a book you already own but never got a chance to read, or ask a friend for a book recommendation, or get a card from your local library and explore countless books for free. Find a topic or subject that interests you and start there!
    • Learn a new skill. Learning multiple skills is a hallmark of being a balanced and well-rounded person. It’s never too late in life to dive into something completely new, such as playing a musical instrument, learning a new language, writing poetry, painting, or playing chess. A jack of all trades mindset can make you stand-out from others in unique ways. Many people have a talent or passion for at least one thing, but when you start combining talents and cultivating multiple interests it shows your range and flexibility as a person. Don’t limit yourself. There’s no pressure to become a “professional” or “expert” in everything you do, just stay on a learning path, have fun while doing it, and enjoy seeing the growth as you go.
    • Watch documentaries. Documentaries are a fun and easy way to explore new topics and learn about interesting things you otherwise wouldn’t experience. Depending on what you like, there are many different subjects to choose from: history, sports, biographies, science, inspirational stories, or nature documentaries (which have also been shown to boost positive emotions like joy, gratitude, and awe). I’ve made a lengthy list of recommended documentaries which I try to keep updated as I discover new ones. Check it out and choose one that catches your eye!
    • Monitor your information diet. Our current world is overloaded with information, including a lot that is wrong, misleading, or straight up lies and propaganda. Now more than ever we need to pay close attention to the information we consume on a daily basis. Try to find trustworthy news and educational sites where you can easily verify what they are saying from other sources. Beware of going down esoteric “rabbit holes” where people only confirm their own biases and beliefs. Actively seek out information from multiple sides so you’re at least aware of different perspectives and counter-arguments. The information pyramid is a great guide on how you should prioritize certain sources over others. In general, a peer-reviewed scientific study should be given more weight than some random influencer on social media. Keep in mind it’s also possible to consume too much and become an information junkie, where you’re addicted to learning new things, but you never act on it or put it into practice.
    • Spend time in active reflection. Give yourself time to think and digest, even if it’s just for 10 minutes while sitting with your first cup of coffee in the morning. You don’t always need to be filling your brain with facts to be a smarter person, you also need to know how to step back and contemplate what you know. Active and engaged minds are always taking advantage of opportunities for everyday reflection when sitting on the bus, taking a shower, or walking the dog. Often your best ideas and insights come in moments when you’re not trying to solve a problem directly but just mulling it over in your mind. Schedule time for solitude every now and then and don’t be afraid to sit alone with your thoughts.
    • Learn how your mind works. One essential component to being a more intelligent thinker is knowing how your mind works. We naturally believe we understand ourselves best, but psychology and neuroscience can sometimes reveal counter-intuitive facts and tendencies. To start, our minds are very susceptible to cognitive biases and logical fallacies that can muddy our thinking and understanding of reality. One of the most common errors is black and white thinking, where we believe a situation needs to be either “A” or “B,” but a third perspective, “C,” is the more accurate view. Our minds like to over-simplify things when reality can often be more nuanced and complex. Show intellectual humility. Be open to being wrong and be open to changing your mind in the face of new evidence and experience.

    Take your education seriously. Maintain a healthy and active brain. Even if you were never a good student in school, that doesn’t mean you can’t improve your knowledge and intelligence, especially once you find subjects you are deeply passionate about. Benjamin Franklin once said, “An investment in knowledge pays the best interest.”

    3. EMOTIONAL WELL-BEING

    emotional

    In the “Mental” section we covered how to keep our brains active and be more intelligent thinkers, but there’s also a whole other side of our psychology that we need to pay attention to as well: our “Emotional” side.

    Emotions can often seem like something that we have limited power over, but being a more emotionally intelligent person means becoming more self-aware and learning how to better respond to our emotions in the moment.

    We can’t ignore our emotions or push them aside forever, they are a necessary facet of life and we must learn to navigate our emotional world effectively if we want to live the best life possible.

    Remember that emotions are a resource, not a crutch. Every emotion serves a function or purpose, and if we channel our emotions in a constructive direction we can make great things happen.

    One important lesson is that even negative emotions like sadness, anger, guilt, or fear are helpful to a better life if we approach them from the right perspective.


    Things to do:

    • Learn the basics of emotional intelligence. There are 4 fundamental pillars of emotional intelligence that we need to cultivate: 1) Self-awareness (recognizing our emotions when they happen), 2) Self-regulation (knowing how to respond to our emotions and channel them in a positive direction, 3) Empathy (being aware of other people’s emotions and internal states), and 4) Social Skills (knowing how to respond to other people’s emotions in a healthy and constructive way). Certain people may be strong at some of these and not for others. For example, someone may be really empathetic and caring, but not know how to regulate their own mood and emotions, leading to burnout and emotional fatigue. An emotionally intelligent person must work on all four of these pillars.
    • Improve body awareness. All emotions have a physical component to them. When you learn how to identify the physical sensations behind each emotion, you’ll be much more attuned to your feelings in the moment as you’re experiencing them. This helps you to be more aware of your feelings before acting on them, and to recognize how emotions often want to push or pull you in a certain direction (“do this” vs. “don’t do that”). Every feeling serves a different function depending on its emotional valence (“positive” vs. “negative”) and arousal level (“high energy” vs. “low energy”). With practice, this improved body awareness can also boost your intuition, making you a better reader of your “gut feelings” and what they are telling you.
    • Learn to channel negative emotions. Negative emotions can serve a positive function if you know how to respond to them in a constructive way. If you struggle with any specific negative emotion (sadness, fear, guilt, or anger), then create a plan for how you will respond to it the next time it arises. For example, “If I’m angry, then I’ll go exercise,” or “If I’m sad, then I’ll write in my journal.” Emotions are energy that can be channeled in multiple directions. Write a list of the many ways you can respond to any negative emotion. Remind yourself you have a choice, and you don’t have to keep following the same pattern between negative emotion → negative behavior. One popular technique is opposite action, where you intentionally do the opposite of what a feeling is telling you to do (to reverse the cycle of negativity).
    • Practice meditation and daily mindfulness. Meditation is a great avenue for better understanding and regulating your emotions. It teaches you how to step back and just observe your thoughts and feelings without needing to immediately react to them. This space between “feelings” and “actions” is crucial for being a more emotionally intelligent person; it’s the main principle behind discipline, willpower, and self-control. Never forget that just because you feel a certain way doesn’t mean you need to act on it. If you’re completely new to meditation, start with the 100 breaths meditation – a simple exercise where you just focus on your breathing. It’s also helpful to learn grounding techniques for when you feel overwhelmed, such as mindful stretching or a 5 senses meditation.
    • Embrace creative expression. It’s difficult to describe many emotions with only words so it’s important to embrace other ways of expressing yourself, such as through music, photography, dance, painting, drawing, acting, or film. Often when I meet people who don’t feel fully connected to their emotional self, they usually lack ways of expressing themselves through art and creativity. A creative outlet is often a prerequisite to better understanding and navigating your emotional world, even if you don’t typically think of yourself as a “creative person.”
    • Savor all of your positive experiences. Life is filled with many joys and pleasures throughout the day and we should try to savor them as much as possible. We have many positive emotions to choose from – joy, gratitude, peace, awe, excitement, laughter, and wonder – and there are a variety of activities that can lead to more positive emodiversity in our lives. Don’t just chase after the same positive experiences over and over again, seek new experiences, new hobbies, and new ways of enjoying life. Learn how to savor happiness as much as possible by being more present in the moment, creating positive memories, and reminiscing on good times.
    • Relax and manage daily stress. Last but not least, it’s necessary we cover stress management as an essential component to mental health and emotional intelligence. Stress is a normal part of everyday life, but if you don’t know how to manage it in a healthy way it can often have a negative influence on your thoughts, feelings, and behaviors by making you more sensitive, irritable, angry, and bothered (even by little things that don’t really matter). Recognize when to push yourself vs. when to step back and recharge. In the complete guide on daily stress, you’ll find a great framework for reframing your “fight, flight, or freeze” response by viewing stress as a signal to pay attention to and guide you throughout the day. Don’t underestimate the importance of your comfort zone and use it as a place to recharge after a challenging or overwhelming day.

    Emotions can “make us” or “break us” depending on how emotionally intelligent we are. They are a fundamental part of life, but we often have more power over them than we realize. Learn how to channel your emotions in a healthy and constructive way – become a master of them, not a slave to them.

    4. SOCIAL WELL-BEING

    social

    Healthy and positive relationships are an essential ingredient to happiness and well-being.

    No matter who you are, you crave some type of social connection; even the most introverted person on the planet will have a tough time finding happiness all by themselves.

    There used to be a time when I believed “I don’t need people to be happy, all I need is myself.” But over the years I’ve learned more and more that having social support and a sense of belonging is a basic human need that can’t be avoided.

    How strong is your current social circle? Here’s advice to get you started.


    Things to do:

    • Stay connected with friends and family. You should try your best to stay in touch with people who you already have a strong relationship with, especially family and old friends. There’s a simple power in checking in on people and preserving social connections you’ve already established. It doesn’t take much time or effort to show you’re thinking about someone: a simple text, email, or phone call is all you need to let people know you still care and value your relationship with them. You’d be surprised by how much other people appreciate you reaching out to them, even if you haven’t spoken to them in a really long time.
    • Embrace small social interactions. Every time you leave your home, there is opportunity for social interaction. To build your social muscles, embrace the power of 10 second relationships, such as saying “Hi,” to a neighbor or coworker, small talk with a cashier or cab driver, or sparking up a quick conversation while waiting for the train or bus. Research shows even super tiny social interactions can boost positive emotions and feelings of social connectedness. This can also be a great exercise for people who are very introverted (or have a lot of social anxiety) and want to start being a more social person. Make a plan to have a pleasant interaction with at least one new person every day.
    • Learn how to have endless conversations. One big concern for people when it comes to meeting new people is, “What do I say? What if I run out of things to talk about?” One popular technique known as conversation threading provides an excellent framework so that you never run out of topics to talk about. The basic idea is that every sentence contains multiple “threads” we can go down, and often the art of good conversation is being able to 1) Listen to what people say, and 2) Choose a thread to talk more about. Rinse and repeat and a conversation can go on forever. Also consider improvisation exercises so that you can be a faster and more creative thinker in the moment.
    • Improve communication and conflict resolution. It’s a cliché, but communication is everything in relationships. If you don’t know how to express your thoughts and feelings in an honest and constructive way, you’ll have trouble building genuine and healthy connections with others at home, work, or wherever you need to cooperate and work together with people. In romantic relationships, it’s important to know how to communicate your feelings without manipulating or being dramatic. In family and work environments, it’s important to know how to defuse heated arguments before they spiral out of control. The truth is people can be difficult and you’re not going to like everyone’s company. That’s natural. Conflicts have the potential to arise in any social situation, because people have different beliefs, values, and personalities that may be incompatible with each other. What’s most important is to teach yourself the best methods for conflict resolution so you can better navigate the complexities of your social world.
    • Find opportunities to meet new people. Most people make friends through work or school. Once we get older, it can become more difficult to find new connections or become a part of new social circles. Recent research shows that most adults claim to have “less than 5 close friends.” If you’re looking to expand your circle, there are many opportunities available to you. Depending on your likes, hobbies, and interests, consider going out more to music shows, bars, coffee shops, workshops, church/religious services, bowling leagues, adult education classes, sports events, or book clubs. Seek out local groups in your area or volunteer somewhere. You can also take advantage of websites like Meet Up to connect with like-minded people who live close-by. All it takes is one new friend to introduce you to an entirely new social circle. Be patient and don’t worry if you don’t initially hit it off with the first couple people you meet. Finding the right relationships that fit into our lives can take time.
    • Use social media and the internet to connect. The internet can be a great place to connect with like-minded people who we’d never meet in the real world. Online communities on social media, message boards, or video games can often provide a valuable source of social interaction, especially for people who don’t have many “real life” friends. The internet can be particularly helpful for connecting with others who have rare or eccentric hobbies, such as fans of a specific author, athlete, music genre, or comic book franchise. Unfortunately, many online communities can also become negative, competitive, and toxic (see the online disinhibition effect), so it’s necessary you build a positive digital environment that works for you. That doesn’t mean hiding in your own “echo chamber,” but it does mean cultivating a feed and followers who ultimately add value to your life and don’t subtract it. First focus on topics you’re naturally interested in such as science, technology, sports, or movies. Try not to be a passive consumer of information, actively enter conversations by asking questions or sharing knowledge with others. Often times we can build meaningful connections with people online that are just as important as those we find in the real world. However, while online relationships can have many benefits, we shouldn’t see them as a substitute for real world “face to face” interactions.

    Always remember that quality of relationships > quantity of relationships.

    You don’t need to be super popular or the life of the party to have a healthy social life. All you need is a couple really close friends who support you, trust you, and enjoy your presence. That’s everything you need to be socially satisfied.

    Healthy relationships are a fundamental aspect of happiness and well-being for everyone. Our need to belong to a “tribe” or group is hardwired into our brain, biology, and evolution. Like every other aspect of a balanced person, it can’t be ignored.

    Are your daily social needs being fulfilled?

    5. WORK / FINANCIAL WELL-BEING

    work

    Another fundamental aspect of a balanced person is work, money, and material concerns.

    At the most basic level, we depend on food, clothing, shelter, healthcare, and other necessities so we can live a healthy and dignified life.

    People that struggle to make a living can often hurt in many other areas: physical health (can’t afford good foods, healthcare, or medicine), relationships (can’t support family, no money for dating), as well as our mental and emotional well-being (stress, anxiety, and low self-esteem).

    Unless you win the lottery or have someone else to provide for you, finding a steady job or career is often one of the most focused on areas in life. From childhood up until we finish high school or college, we are constantly asked, “What do you want to do for a living?”

    A few people find jobs they love, many find jobs they like, and most find jobs they can at least tolerate. Balancing psychological needs with financial needs can be a difficult task depending on your current situation.

    While we don’t always get a choice in what we do for a living, there are important ways to give ourselves more power over our work life and financial life. Here are important guidelines to keep in mind.


    Things to do:

    • Focus on your strengths. Everyone has a place in this world where they add value. Before you decide what type of work you’d like to do for a living, it’s important to know what your natural strengths, skills, and talents are. If you’re friendly and good with people, you may excel at managing, customer service, or human resources type jobs. If you’re more introverted and creative, you may want to focus on writing, graphic design, computer programming, or freelance work. What type of activities are you typically good at (or at least above average)? What were your best subjects in school? What do you enjoy doing and why? Complete the strengths worksheet to discover more about your natural skillset. Ultimately, knowing your strengths will influence what types of jobs or career choices will suit you best – including where you contribute the most value.
    • Value education and experience. No matter what your job is, there are always new ways to learn and improve. The best workers in life are those who are always growing and mastering their craft. College is still an important part of education, but what’s even more important is to stay self-motivated and continue learning after school. Many people I know have landed successful jobs that had virtually nothing to do with what they studied in college. In several cases, they were people who taught themselves coding/programming, built a portfolio to show their work to potential employers, and climbed their way up the company ladder from there. All self-taught. You can also consider going to trade schools, workshops, mentorships, internships, and other forms of gaining knowledge and experience that are outside of the traditional college model. Any work experience is better than none at all – you just need to start somewhere and begin building yourself up.
    • Make the most of your job. While it’s rare for any of us to get our “dream job,” we can always make the most of our work life by being a good employee and doing our best. Use nudges to keep yourself motivated and productive throughout the day, learn mental strategies for getting things done that you normally “don’t like” doing, and make friends at work with bosses, coworkers, clients, or customers, because those are the people you’re going to be spending a lot of time with and it’s crucial you have healthy and functioning relationships with them. No matter what your job is try to see the underlying purpose or meaning behind it. What value does it add to the world? Are you proud of the work you do?
    • Live within your means. Regardless of how much money you make, one of the most commonsense rules for financial well-being is living within your means. This includes keeping a budget that you can maintain (for food, rent/mortgage, bills, gas, clothes, and leisure expenses), and not buying too much stuff you can’t immediately afford. Debt can be common at some point in our lives (due to student loans, credit card debt, medical emergencies, etc.), but try to be mindful to not put yourself in a hole that you can’t climb out of. Avoid luxury expenses that put you at financial risk. We sometimes over-extend ourselves due to social comparison and a “keeping up with the Joneses” mentality. We think if our friend or neighbor gets a brand new car or goes on an expensive trip, then we need to “one-up” them with a similar purchase. Many times people fall into massive debt because they are trying to chase status, fame, luxury, or exorbitant pleasures. In general, keep track of all your monthly expenses and find ways to cut back on spending that isn’t necessary. Learn about spending biases that can lead to overconsumption (like the allure of “FREE!,” the “Relativity Trap,” and “One Click” purchases). Big corporations are masters of psychology and persuasion. If we aren’t vigilant about our spending habits (especially if you enjoy retail therapy), then we’ll often fall for tricks that cause us to spend more money than we should.
    • Create a healthy relationship with material things. This article is about being a balanced person. Work and money are very important aspects of life, but materialistic beliefs can also backfire to hurt us. No one lays down on their deathbed wishing they spent more time in the office. Work-a-holics can end up focusing so much on their career that they neglect giving enough attention to their family, health, and well-being. Never forget that there is a lot more to a good life than just money and material things, despite what you may see glamorized in movies, TV shows, or commercials. Psychology research shows that after a certain point, increased wealth and income has very little effect on our overall happiness and life satisfaction. Being rich sounds awesome, but it won’t necessarily make you any happier than if you earned less with a stable and secure life. Take the materialism quiz to see if you have a healthy relationship with money and stuff.

    Remember, money is important but it isn’t everything.

    Financial well-being will often look radically different depending on the person. Certain people may be content with modest and minimal living, while others crave more luxury, adventure, and pleasure. Whichever lifestyle you choose, it’s necessary that money finds the proper role in your life without being completely consumed by it.

    One succinct way to define true financial well-being is “not needing to think about money all the time.”

    6. MEANINGFUL / SPIRITUAL WELL-BEING

    spiritual

    The meaningful or spiritual aspects of life can often be overlooked.

    We may occasionally ask ourselves big questions like, “Who am I?” “Why am I here?” or “What’s my purpose?” but we rarely translate these questions into our daily lives through action.

    For many people, religion is their main source of spirituality and meaning. Attending church, being part of a local community, prayer, and volunteering or giving to charities are common ways people boost meaning in their daily lives. Religion has been shown to improve happiness and well-being by creating a strong sense of purpose and community.

    However, we don’t need religion to have a meaningful life. There are many other sources of meaning, including art, culture, philosophy, literature, music, relationships, activism, introspection, and creativity.

    Where do you get your meaning in life?


    Things to do:

    • Learn the pillars of a meaningful life. One excellent guide on how to live a meaningful life outlines five different pillars to focus on, including 1) A sense of belonging (having healthy relationships with those around you), 2) A sense of purpose (feeling that you contribute to a larger whole), 3) Storytelling (the life story we tell about ourselves, as well as stories and myths about the world we live in), 4) Transcendence (experiencing “awe” and “inspiration” in the presence of great things), 5) Growth (having a sense that you are evolving and moving forward as a person). All five pillars contribute to a rich and meaningful existence.
    • Spend more time in nature. Nature reminds us that we are part of something larger than ourselves, a whole process known as “life.” Nature is a fantastic source of meaning because it continuously inspires positive emotions like joy, amazement, gratitude, and awe. The best part is that nature is all around us – we don’t need to plan a weekend camping trip to experience it – instead just pay attention to everyday nature that is all around you: trees on the drive to work, birdwatching in your backyard, or spending time in your garden over the summer. Having pets to care for is another easy and wonderful source of nature and connection, even if it’s just a small fish tank to maintain. Nature also includes enjoying the beauty of a nice view such as sunrises, sunsets, mountaintops, storm watching, and star-gazing.
    • Take a complete picture perspective. Finding meaning requires being able to look at things from a big picture perspective. What influence do your actions have in the long-term? What type of impact will you leave on the world after you die? When you keep the complete picture in mind, you recognize that even super small actions can add up and have big results in the future. Your life doesn’t begin at birth nor end at death, you are part of an intergenerational chain of cause-and-effect that has stretched thousands of years. That’s a powerful thought if you can see the true significance behind it.
    • Embrace art, music, and culture. Artists are the creators of new meanings, especially famous painters, musicians, filmmakers, photographers, authors, playwrights, and dancers. Pursuing a creative hobby of your own is one fantastic way to infuse new meaning into your life. You can also embrace art and culture more by going to museums, art galleries, music concerts, and theaters. A lot of beautiful art is archived in online art and cultural exhibits, so you can discover a lot of new inspiration by just sitting in the comfort of your own home. Artists of all forms teach us how universal the human condition is. It’s a huge inspirational boost when you realize a book written over a hundred years ago resonates exactly with how you feel today. One of my strongest memories is attending a music concert of my favorite band with thousands of others listening and singing along. Creativity is one of humanity’s greatest gifts and there’s a lot of wisdom, beauty, and feelings of universal connection it can offer us.
    • Signs, symbols, and synchronicity. A meaningful life can be more about feeling inspiration and empowerment rather than thinking only logically and factually about the world. Embrace things you can’t always explain. If you feel like you’re getting a “sign” from the universe, accept it. Our minds often think unconsciously through the power of symbols, especially through reoccurring dreams or nightmares that may be trying to tell you something important. Meaning can be created anywhere if you have the right perspective. Many of my favorite moments in life are when I experience synchronicity, which is finding a connection between two things that seem completely unrelated at first. For example, if I start reading a book and then someone brings up the same book randomly the next day, I try to see that as a sign that I’m on the right path. It may or may not be true, but it is a simple and easy way to add more meaning to the little things in life.
    • Have faith that life is good. Faith may not have any role in science, but it does play an important role in good living. At the end of the day, one of the most important beliefs we can have is that “life is good” and things will generally work out in the end. One of my personal favorite quotes is, “Pray to God, but row to shore.” It shows us to have hope and faith in life, but still take action and try our best in the moment. Both faith and action are necessary ingredients to a happy and fulfilling life. A belief in God or a higher power can make this whole process easier. However, even if you can’t bring yourself to accept “metaphysical” or “supernatural” ideas, at least try to sense the oneness and interconnectedness of all things. These ideas are an endless source of power, strength, and resilience, even in the face of incredible hardships and tribulations.

    A “meaningful life” can be one of the most difficult areas of life to improve, especially while living in a world that is filled with nihilism, hedonism, and materialism.

    However, once you build a strong spiritual core you can withstand almost any difficulty or hardship. It can empower you to a whole new level that non-spiritual people don’t usually have access to.

    CONCLUSION

    To sum things up we must invest time and energy in all six of these aspects if we want to live a happy and balanced life.

    Once again, these six aspects of a balanced life include: 1) Physical, 2) Mental, 3) Emotional, 4) Social, 5) Work/Financial, and 6) Meaningful/Spiritual.

    Which area are you the strongest in? Which area are you the weakest in?

    Keep this framework in mind as you embark on a lifetime of self-improvement. Try the Daily Routine (PDF) exercise and use this resource as a guideline.


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    Steven Handel

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  • 3 Ways to Conquer Your Debt and Stay on Top of Your Finances | Entrepreneur

    3 Ways to Conquer Your Debt and Stay on Top of Your Finances | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Let’s cut to the chase and talk about something that’s hitting our wallets hard – consumer credit. The numbers don’t lie: Consumer credit is not just bad; it’s getting worse by the day.

    Credit card debt: It’s now at an unprecedented $1.03 trillion.

    Other loans and retail credit cards: There’s been a $15 billion increase.

    Auto loans: These have risen by $20 billion, totaling $179 trillion.

    Interest rates: We’re seeing an average of 20.53%, the highest in 22 years.

    Now, despite these sky-high figures, something curious is happening: Delinquency rates are staying low. This means many households are still juggling their debt effectively. But hey, if the economic winds shift, we could be looking at some real trouble.

    Related: 9 Financial Mistakes to Avoid in 2024

    The credit score connection

    Your credit score and consumer debt are like peanut butter and jelly — they just go together. Your score is influenced by payment history, credit utilization and new credit inquiries. Let’s break it down:

    Payment history: This is a biggie, making up 35% of your FICO score. Regular, timely payments are your best friend here, boosting your credit. But with debts rising, those monthly payments are also climbing. Missed payments? They’ll ding your credit score for up to seven years.

    Credit utilization: Accounting for about 30% of your credit score, this is all about how much credit you’re using versus what you’ve got available. As your debts pile up, so does your credit utilization. Crossing that 30% threshold can start to hurt your score.

    New credit inquiries: Applying for new credit cards or loans? That can temporarily lower your score. Be strategic about when and how often you apply for new credit.

    Smart debt management

    Here’s where we get proactive. You’ve got options like the Avalanche Method, where you tackle debts with the highest interest rates first. Or, try the Snowball Method, knocking out the smallest balances first for quick wins. Both have their merits, depending on your style.

    Then there’s debt consolidation. Combine all those pesky debts into one, ideally with a lower interest rate. It’s about simplifying your life and potentially reducing interest costs over time.

    And remember, if you pay off a credit card, think twice before closing the account. Why? It can actually hike up your credit utilization ratio and ding your score. Keep those accounts open with a zero balance to keep your credit in good shape.

    Debt’s bigger picture

    Consumer debt isn’t just about numbers on a screen. It’s about life. High debt payments can eat into your ability to save, impacting your financial future. And if we’re all spending less on the fun stuff, that can ripple out and hit the economy too. Before you know it, we’re staring down the barrel of a recession.

    Now, let’s not forget the personal toll. Debt stress is real. It messes with your sleep, strains your relationships and can put major life decisions like buying a home or starting a family on pause. The moral of the story? It’s not just about dollars and cents; it’s about your well-being.

    Related: Americans’ Debt Just Exceeded $17 Trillion for the First Time — Here’s the Smartest First Step to Fix Your Finances

    Take charge of your debt

    So, how do you steer clear of the debt trap? Let me lay out three key tools to help you conquer your debt:

    1. Calculate Your CLR: Your Consumer Leverage Ratio (CLR) is the ratio of your monthly consumer debt to your disposable income. If it’s over 20%, you need to hit the brakes and focus on debt reduction.

    • How to calculate: To calculate your CLR, divide the total balance of your credit card debt by your total credit limit. For instance, if you have a total credit card debt of $5,000 and a total credit limit of $25,000 across all cards, your CLR is $5,000 ÷ $25,000, which equals 0.20 or 20%.

    2. Prioritize debt repayment: Start by targeting those high-interest debts. Use either the Avalanche or Snowball method to get ahead. Paying off these debts not only improves your financial health but also boosts your peace of mind.

    • How to implement: List out all your debts in order of their interest rates, from highest to lowest. Continue making minimum payments on all your debts, but direct any extra money you can afford toward the debt with the highest interest rate. Once the highest-interest debt is fully paid, focus on the next highest, and so on.

    3. Monitor your spending: Keep an eagle eye on where your cash is going. Use apps or good old-fashioned spreadsheets to track your expenses. Look for areas to cut back on luxuries, so you can channel more funds toward debt repayment and savings.

    • How to monitor: You can use budgeting apps, spreadsheets or traditional accounting methods to track your spending. Categorize your expenses into necessities (like rent, utilities, groceries, etc.) and luxuries (like dining out, entertainment, etc.).

    Credit utilization isn’t just some fancy financial term; it’s a wake-up call to all of us trying to navigate this tough financial landscape. Listen, the state of consumer credit is alarming, and it’s time we took the reins. By understanding and managing your credit utilization, you’re not just boosting your credit score; you’re building a fortress against the rising tide of debt. Remember, it’s not about the credit you have; it’s about how smartly you use it. Stay sharp, keep your utilization low, and make those smart financial moves!

    Related: How to Manage Personal Credit Card Debt as an Entrepreneur

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    Mikey Lucas

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  • 3 things to know about how the Fed might roll back quantitative tightening

    3 things to know about how the Fed might roll back quantitative tightening

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    The notion that the Federal Reserve will soon slow, or perhaps even end, its program of quantitative tightening is increasingly being talked about on Wall Street like a foregone conclusion.

    But while investors wait to hear more on the subject from Fed Chair Jerome Powell during next week’s post-meeting press conference, they could be forgiven for asking themselves some questions.

    What might an imminent taper of the Fed’s balance-sheet runoff look like? Why has it suddenly become so urgent? What might it mean for the six or so interest-rate cuts investors are expecting from the Fed this year, as well as for markets more broadly?

    We aim to answer these questions below.

    What inspired talk of tapering QT?

    It wasn’t until the minutes from the Federal Reserve’s December policy meeting were published earlier this month that investors started to take the notion of the Fed declaring “mission accomplished” on QT seriously.

    The minutes revealed that a number of senior Fed officials felt it was nearly time to “begin to discuss” the technical factors that would govern the Fed’s decision to slow the runoff of maturing bonds from its balance sheet.

    Shortly after the minutes’ release, several senior Fed officials came forward to discuss the importance of ending the balance-sheet runoff. Dallas Fed President Lorie Logan, the first senior Fed official to expand on what was noted in the minutes, said earlier this month that the Fed should start to slow the pace of its balance-sheet shrinkage once assets locked up in the Fed’s reverse-repo facility fell below a certain level.

    According to Logan, senior Fed officials had been unsettled by the drain of $2 trillion in assets from the RRP facility last year.

    But there was another issue that was also likely bothering monetary policymakers heading into the Fed’s December meeting.

    Sudden spikes in overnight repo rates late last year drew uncomfortable comparisons to the repo-market crisis of September 2019, which foreshadowed the end of the Fed’s previous attempt at tapering its balance sheet, according to TS Lombard’s Steve Blitz.

    See: Something strange is happening in the financial plumbing under Wall Street

    See: One of Wall Street’s most important lending rates will stay elevated for weeks, Barclays says

    TS LOMBARD

    What is the Fed’s ‘lowest comfortable level of reserves’?

    A re-run of the repo-market crisis of 2019 is what the Fed is presumably trying to avoid. Economists are so concerned the central bank might accidentally bump up against the lower bound for reserves in the banking system, that they have come up with a name for the concept: They’re calling it the “lowest comfortable level of reserves.”

    According to this idea, strain in overnight-financing markets should emerge once reserves in the banking system retreat below a certain threshold. This would, in turn, likely force the central bank to scale back or even reverse quantitative tightening immediately, according to several economists.

    In order to avoid such a risk, Jefferies economist Thomas Simons said in a note to clients earlier this month that he expects the Fed will announce plans to start tapering QT after its March meeting.

    Across Wall Street, most economists expect the Fed will begin by tapering the pace at which Treasurys are redeemed from its balance sheet — perhaps cutting it in half to start, from $60 billion a month to $30 billion a month. Reducing the pace at which mortgage-backed securities are running off won’t matter as much until prepayments begin to climb.

    Going even further, economists at Evercore ISI said in a report shared with MarketWatch earlier this week that they expect the tapering to begin around the middle of 2024 and continue potentially through 2025, until the Fed has succeeded in reducing the size of its balance sheet to about $7 trillion.

    The balance sheet presently stands at $7.7 trillion, according to data published by the Fed. It peaked at nearly $9 trillion in April 2022.

    However, one key issue may complicate the Fed’s efforts to ascertain the “LCLoR.” According to Jefferies’ Simons, the amount of banking-system reserves counted as liabilities on the Fed’s balance sheet has been more or less steady since the Fed started its latest round of balance-sheet tapering. It stood at roughly $3.3 trillion recently, according to Fed data cited by Jefferies.

    Why stop at $7 trillion if bank reserves haven’t been all that heavily impacted by QT anyway? It’s probably worth noting that, whatever happens, nobody on Wall Street expects the Fed would attempt to shrink the size of its balance sheet back toward pre-crisis levels, when the amount of bonds on its balance sheet was miniscule compared to today.

    Why? Because there is simply too much debt sloshing around the global financial system to justify such a withdrawal of support, according to Steven Ricchiuto, chief economist at Mizuho Americas.

    “The Fed is not in a position to remove all that extra liquidity because now the system needs it just to function,” Ricchiuto said.

    What does this mean for markets?

    Because quantitative tightening is a hawkish policy stance, its rolling back should be bullish for stocks and bonds. But there are other considerations that could impact the outcome, market strategists said.

    Not only would a reduction in the pace of the Fed’s monthly runoff introduce a fresh dovish tilt to the Fed’s monetary policy, but by reducing the amount of bonds it allows to roll off its balance sheet every month, the Fed would become more active in the Treasury market, said James St. Aubin, chief investment officer at Sierra Investment Management, during an interview.

    There are also a few contextual factors that could impact how the equity market reacts. For example, as St. Aubin pointed out, context is equally as important as the nature of the decision itself. Should the Fed decide to end QT abruptly because the U.S. economy is sliding into a recession, then the decision could hurt stocks.

    Another issue, raised by a different market strategist, is the notion that the Fed could decide to start tapering QT in lieu of cutting interest rates — or at least in lieu of cutting them as quickly as investors expect. This could buy the central bank more time to press its battle against inflation while mitigating the risks that it could hurt the economy by keeping policy uncomfortably tight for too long, economists said.

    Ben Jeffery, U.S. interest-rate strategist at BMO, said in a recent note to clients that, based on Logan’s comments from earlier this month, he would lean toward this being the most likely scenario. Additionally, he said, tapering QT could potentially impact the Treasury’s refunding announcement due in May.

    Jeffery calculated that the Fed tapering QT by $20 billion beginning in April would save the Treasury from issuing nearly $250 billion in bonds compared to if the Fed had continued with its balance-sheet runoff apace.

    This should lead to lower Treasury yields, all else being equal. And lower long-dated Treasury yields are typically seen as beneficial for stocks, according to Callie Cox, a U.S. equity strategist at eToro.

    Although, once again, the outcome for markets would likely depend on the specific context.

    “Higher yields probably aren’t a good thing for stock investors these days, but in particular environments, higher yields and less Fed intervention could hint that the economy is healing,” Cox said.

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  • New York City is working with a nonprofit to wipe out over $2 billion in medical debt for half a million residents

    New York City is working with a nonprofit to wipe out over $2 billion in medical debt for half a million residents

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    New York City intends to wipe out more than $2 billion in medical debt for up to 500,000 residents, tackling a top cause of personal bankruptcy, Mayor Eric Adams announced Monday.

    The city is working with RIP Medical Debt, a nonprofit that buys medical debt in bulk from hospitals and debt collectors for pennies on the dollar. The group targets the debt of people with low incomes or financial hardships and then forgives the amounts.

    Under the program, the city will spend $18 million over three years.

    “For middle- and working-class New Yorkers, medical bills can be financially devastating,” Adams said as he announced the plan. “Working-class families often have to choose between paying their medical bills or some of the basic essentials that they need to go through life.”

    The mayor said medical debt is the No. 1 cause of bankruptcy in the United States, disproportionately burdening low-income households and people with inadequate insurance. He called the debt relief program the largest municipal initiative of its kind in the country, though RIP Medical Debt has worked with other municipalities.

    RIP Medical Debt president and CEO Allison Sesso said there will be no application process for the program. Relief recipients will be notified that their debt has been bought by a third party and erased.

    Though New York City is facing financial strains, Adams said the $18 million commitment over three years is a great investment for the city.

    “If you are able to … save $2 billion in debt, that $2 billion trickles down to those households, who are not going to fall into our safety net,” he said. “They’re not going to fall into our homeless system.”

    Subscribe to the CEO Daily newsletter to get the CEO perspective on the biggest headlines in business. Sign up for free.

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    The Associated Press

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  • What does opening or cancelling a credit card do to my credit score? – MoneySense

    What does opening or cancelling a credit card do to my credit score? – MoneySense

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    To close a credit card, the balance is $0. If there’s a substantial balance on the remaining cards, it’s going to increase the credit utilization ratio. And, if the increase is high enough, it will hurt your credit score. This is because the closed card’s unused credit limit no longer provides balance in the relationship between your other credit balances and credit limits. What you owe elsewhere can have a bigger impact than if you had a zero-balance credit card.

    Another thing: Closing an account means the creditor will stop reporting on your behalf your credit history on that card. If the card showed positive credit history, such as responsible usage and making payments on time, that history will gradually fade away and no longer bolster your credit score. 

    The reverse can’t be said. If the card showed negative credit history, closing the account will not erase the negative impact on your score. 

    Generally speaking, cancelling a credit card won’t improve your credit score, and you shouldn’t close a credit card unless you have a good reason, such as not trusting yourself to use the credit responsibly.

    Buyer beware: Welcome offers

    Many credit cards come with a generous sign-up bonus that helps you earn cash back, points, miles or a reduced interest rate. Welcome offers can be a great way to save money, especially if you already had planned on spending the minimum threshold to earn them. However, proceed with caution. 

    Read the fine print. Despite the enticing welcome offer of a credit card, your credit score may drop when you apply for a new card as a hard inquiry will be performed during the application process. Although your credit score will only drop a couple of points and will likely recover after a few months if you make your payments on time, it’s still a hit to your credit.

    Remember that welcome offers are one-time deals. While some credit card sign-up bonuses may save you money up front, the reality is that any rewards you earn aren’t worth incurring additional bills if you’re already struggling with debt. You should only consider a new welcome offer if you have paid off your credit card debt in full. If you have any debt, focus on paying that down—not short-term wins like getting a lower and very temporary interest rate.

    Opening and closing credit cards can impact how you use credit, too. Open multiple new cards, and you may end up with more credit than you can feasibly handle or keep track of. In addition, the allure of welcome offers may distract you from your financial goals. There’s impact on your credit score, and it’s critical to think about how having more or less credit affects your ability to live within your means and pay off your debt in full each month.

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    Doris Asiedu

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  • Crypto industry bats for lower taxation and a standardised regulatory framework 

    Crypto industry bats for lower taxation and a standardised regulatory framework 

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    The Indian cryptocurrency industry, ahead of the Union budget 2024, is expecting the government to reconsider the current taxation structure on the virtual digital asset (VDA) class, establish a self-regulatory body for the crypto and block chain sectors, and create sandboxes to help start-ups in the sector thrive.

    The crypto exchanges in India have been losing trading volumes on the platform since the introduction of taxation as crypto users moved to offshore exchanges. However, the finance ministry’s recent move to send show cause notices to offshore exchanges and block URLs subsequently has bought respite for domestic exchanges.

    Ashish Singhal, co-founder and Group CEO of PeepalCo, notes that crypto platform CoinSwitch urges the government to reduce the Tax Deducted at Source (TDS) on VDAs from 1 to 0.01 per cent, allow offsetting and carrying forward losses from the sale of VDAs, and treat income from VDAs on par with other capital assets. “Reducing the tax arbitrage that exists today will also help stem the flight of capital, consumers, investments, and talent, as well as dent the gray economy for VDAs,” he said.

    Further, industry body Bharat Web3 Association (BWA) urges the government to also reexamine the flat rate of 30 per cent applicable to income from the transfer of VDAs, specifically including foreign exchanges in the scope of TDS under Section 194S.

    The industry also seeks a standardised regulatory framework. Sumit Gupta, CEO of CoinDCX, said, “Contemplating the establishment of a robust self-regulatory body for crypto and blockchain sector participants could be a game-changer. Implementing a standardised regulatory framework for the crypto and blockchain sectors, the government would not only provide clarity but also unlock a multitude of opportunities and use cases at a global scale, empowering India Inc. to lead on the world stage.”

    In a bid to foster start-ups in the sector, Shivam Thakral, CEO of BuyUcoin, notes, “Imagine India as a fertile field; crypto and blockchain are the seeds waiting to sprout. We need tax incentives and sandboxes to nurture these seeds into thriving start-ups. Sandbox initiatives need protection to foster experimentation.” This will create a new generation of jobs, propel India into the global DeFi and blockchain space, and unlock economic growth, he opines.

    Further, Nischal Shetty, co-founder of Shardeum, also notes that the industry would also like the ministry to dedicate funds for indigenous blockchain projects, exemplifying real-world utility and innovation.

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  • Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

    Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

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    Distressed-debt giant Oaktree Capital sees big opportunities in credit unfolding over the next few years as a wall of debt comes due.

    Oaktree’s incoming co-chief executives Armen Panossian, head of performing credit, and Bob O’Leary, portfolio manager for global opportunities, see a roughly $13 trillion market that will be ripe for the picking.

    Within that realm is high-yield bonds, BBB-rated bonds, leveraged loans and private credit — four areas of the market that have only mushroomed from their nearly $3 trillion size right before the 2007-2008 global financial crisis.

    “Clearly, the most acute area of risk right now is commercial real estate,” the co-CEOs said in a Wednesday client note. “That’s because the maturity wall is already upon us and it’s not going to abate for several years.”

    More than $1 trillion of commercial real-estate loans are set to come due in 2024 and 2025, according to the Mortgage Bankers Association.

    A retreat in the benchmark 10-year Treasury yield
    BX:TMUBMUSD10Y,
    to about 4.1% on Wednesday from a 5% peak in October, has provided some relief even though many borrowers likely will still struggle to refinance.

    Related: Commercial real estate a top threat to financial system in 2024, U.S. regulators say

    “There’s a need for capital, especially for office properties where there are vacancies, rental growth hasn’t materialized, or the rate of borrowing has gone up materially over the last three years. This capital may or may not be readily available, and for certain types of office properties, it absolutely isn’t available,” the Oaktree team said.

    With that backdrop, the firm expects to dust off its playbook from the financial crisis and acquire portfolios of commercial real-estate loans from banks, but also plans to participate in “credit-risk transfer” deals that help lenders reduce exposure.

    Oaktree also sees opportunities brewing in private credit, as well as in high-yield and leveraged loans, where “several hundred” of the estimated 1,500 companies that have issued such debt are likely “to be just fine” even if defaults rise, they said.

    Another area to watch will be the roughly $26 trillion Treasury market, where Oaktree has some concerns “about where the 10-year Treasury yield goes from here” — given not only the U.S. budget deficit and the deluge of supply that investors face, but also how foreign buyers, once the “largest owners in prior years, may be tapped out.”

    Related: Here are two reasons why the 10-year Treasury yield is back above 4%

    U.S. stocks
    SPX

    DJIA

    COMP
    fell Wednesday after strong retail-sales data for December pointed to a resilient U.S. economy, despite the Federal Reserve having kept its policy rate at a 22-year high since July.

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  • Money tips from Jordan Heath-Rawlings: “Make sure you can afford a sudden expense” – MoneySense

    Money tips from Jordan Heath-Rawlings: “Make sure you can afford a sudden expense” – MoneySense

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    Jordan Heath-Rawlings shares your frustration. In November 2023, he launched In This Economy?!, a podcast that helps Canadians tackle financial challenges. Described as “Your guide to understanding an unpredictable economy,” the show explores topics such as inflation, employment, debt, home ownership and repaying CERB.

    Heath-Rawlings, who lives in Toronto, is a long-time Canadian journalist—he was a newspaper reporter, a founding editor of Sportsnet, and director of special projects at Rogers Media, among other roles. In 2018, he started Frequency Podcast Network, along with Canada’s first daily news podcast, The Big Story, which he still hosts (he also oversees 30-plus other shows). Below, Heath-Rawlings shares what he thinks about credit, debt, real estate and more—plus why he’s now a “huge points guy.”

    Check out In This Economy?!, available on these podcast players. New episodes are released on Thursdays.

    Who are your finance heroes?

    So, In This Economy?! is designed to come from a curious person, not someone who has studied the financial industry extensively and has formed opinions about it. I don’t really have a finance hero. Except, I’ll say this: My career as a sports journalist, including a lot of time writing about fantasy sports and gambling, has made me keenly aware of the concept of the “mass market miss”—a player or investment that doesn’t seem to match stereotypical norms, so it’s overlooked compared to others, creating easy value for those willing to value results over aesthetics. So, can I say, like, baseball writer Bill James or baseball executive Billy Beane?

    How do you like to spend your free time?

    I’m a homebody for the most part, so hanging around the house, watching sports, being with family. My partner is a travel junkie, though, so we try to find the time—and money—to take a few trips a year.

    If money were no object, what would you be doing right now?

    Golfing—somewhere warm. With my wife and daughter on the beach waiting for me to meet them afterwards. We’ll be doing this in a few weeks from now, and I’m already dreaming about it.

    What was your first memory about money?

    My first money memory—besides making like 25 cents per row weeding the garden for my grandfather—is my parents wisely not spending $200 to buy me Air Jordans that I would have wrecked in two weeks anyway. I grew up in the burgeoning sneaker era, when they were just becoming big-time status symbols, and I wanted what the cool kids had.

    What’s the first thing you remember buying with your own money?

    Oh, baseball cards. It is absolutely 100% baseball cards. And I still have them in a box in our basement. Sadly, I came of age during the absolute peak popularity for kids collecting cards, so they aren’t worth anything, save for the memories. But in 1988, I—and every other kid I knew—would have told you they’d have made me rich by now.

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    MoneySense Editors

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  • The former bond king, Bill Gross, says 10-year Treasury is ‘overvalued’

    The former bond king, Bill Gross, says 10-year Treasury is ‘overvalued’

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    The former bond king doesn’t like the fixed-income security that’s the lynchpin of the financial world.

    Bill Gross, the retired fund manager and co-founder of Pacific Investment Management, took to the social-media service X to say that the 10-year Treasury
    BX:TMUBMUSD10Y
    is “overvalued” with a yield of 4%. Yields move in the opposite direction to prices.

    Through Monday, the yield on the 10-year Treasury has fallen 99 basis points from its late October peak.

    He said the 10-year Treasury inflation-protected yield at 1.80% is the better choice. “If you need to buy bonds. I don’t,” said Gross.

    Gross also continued to talk of his idea to go long 2-year bonds
    BX:TMUBMUSD02Y
    while shorting the 10-year. “Stick with the return to a positive 10 year/2 year yield curve. Earns carry while you wait,” he said. In previous posts, he talked of making such trades via Treasury futures contracts.

    Gross said he was taking a bow for his recommendation of regional bank stocks six months ago and mortgage REITs in December. The SPDR S&P Regional Banking ETF
    KRE
    has climbed 49% from its May 4 low, and the iShares Mortgage Real Estate ETF
    REM
    has gained 21% from its late October low. Gross in November highlighted Annaly Capital Management
    NLY,
    +2.62%

    and AGNC Investment Corp.
    AGNC,
    +3.75%

    as mortgage REITs he likes for 2024.

    Gross said he still likes Capri Holdings
    CPRI,
    -0.39%

    as a merger arbitrage target. Tapestry
    TPR,
    +2.04%

    in August agreed to buy Capri for $57 per share, and on Monday, Capri closed at $50.49.

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  • Why stock-market investors will remain at mercy of shifting rate-cut expectations after wobbly start to 2024

    Why stock-market investors will remain at mercy of shifting rate-cut expectations after wobbly start to 2024

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    Stock investors have gotten off to a wobbly start to the new year, hobbled by shifting expectations on the timing and extent of Federal Reserve interest-rate cuts in 2024.

    All three major U.S. stock indexes snapped a nine-week winning streak on Friday, after unexpectedly strong December job gains prompted traders to briefly pull back on the chances of a March rate cut. The S&P 500
    SPX
    and Nasdaq Composite
    COMP
    also failed to stage a Santa Claus Rally from the five final trading days of 2023 through the first two sessions of 2024, as questions grew about the market’s multiple rate-cuts view.

    It all adds up to a glimpse of what might be in store for investors in the year ahead. Already, the so-called “January effect,” or theory that stocks tend to rise by more now than any other month, could be put to the test by headwinds that include stalling progress on inflation. Inflation’s downward trend in recent months had given traders and investors hope that as many as six or seven quarter-percentage-point rate cuts from the Federal Reserve could be delivered in 2024, starting in March.

    Over the first handful of days in the new year, however, reality has started to sink in. For one thing, multiple rate cuts tend to be more commonly associated with recessions and not soft landings for the economy.

    Moreover, the idea that the Fed could follow through with as many rate cuts as envisioned by traders would significantly increase the probability that policymakers lose their battle against inflation, according to Mike Sanders, head of fixed income at Wisconsin-based Madison Investments, which manages $23 billion in assets. That’s because six or more rate cuts would loosen financial conditions by too much, and boost the risk of another bout of inflation that forces officials to hike again, he said.

    Minutes of the Fed’s Dec. 12-13 meeting show that policymakers were uncertain about their forecasts for rate cuts this year and failed to rule out the possibility of further rate hikes. Nonetheless, fed funds futures traders continued to cling to expectations for a big decline in borrowing costs, with the greatest likelihood now coalescing around five or six quarter-point rate cuts that total 125 or 150 basis points of easing by year-end. That’s roughly twice as much as what policymakers penciled in last month, when they voted to keep interest rates at a 22-year high of 5.25% to 5.5%.

    Source: CME FedWatch Tool, as of Jan. 5.

    Uncertainty over the path of U.S. interest rates could leave investors flat-footed once again, and damp the optimism that sent all three major stock indexes in 2023 to their best annual performances of the prior two to three years. In November, analysts at Deutsche Bank AG
    DB,
    +0.81%

    counted seven times since 2021 in which markets expected the Fed to make a dovish pivot, only to be wrong.

    Sources: Bloomberg, Deutsche Bank. Chart is as of Nov. 20, 2023.

    Financial markets have been operating with “sky-high expectations” for 2024 rate cuts, but the only way to substantiate six cuts this year is with an “abrupt and sharp downturn in the economy,” said Todd Thompson, managing director and portfolio co-manager at Reams Asset Management in Indianapolis, which oversees $27 billion.

    Heading into 2024, euphoria over the prospect of lower borrowing costs produced what Thompson calls “an alarming, everything rally,” which he says leaves equities and high-yield corporate debt vulnerable to pullbacks between now and the next six months. Beyond that period, however, “the trend is likely to be lower rates as the economy finally succumbs to tightening conditions at the same time inflation continues to recede.”

    The coming week brings the next major U.S. inflation update, with December’s consumer price index report released on Thursday. The annual headline rate of inflation from CPI has slowed to 3.1% in November from a peak of 9.1% in June 2022. In addition, the core rate from the Fed’s favorite inflation gauge, known as the PCE, has eased to 3.2% year-on-year in November from a 4.2% annual rate in July.

    The Fed needs to keep interest rates higher because of all the uncertainty around inflation’s most likely path forward, and the U.S. labor market “won’t degrade fast enough in the first quarter to justify a first rate cut in March,” according to Sanders of Madison Investments.

    Rate-cut expectations are “going to be the issue for 2024, and a lot of it is going to be revolving around inflation getting back to that 2% target,” Sanders said via phone. “We think somewhere between 75 and 125 basis points of rate cuts make sense, and that the first move is more of a June-type of event. We don’t think it makes sense to have a March rate cut unless the labor market falls off a cliff.”

    History shows that Treasury yields tend to fall in the months leading up to the first rate cut of a Fed easing cycle. However, that isn’t happening right now. Yields on government debt have been on an upward trend since the end of December, with 2-
    BX:TMUBMUSD02Y,
    10-
    BX:TMUBMUSD10Y,
    and 30-year yields
    BX:TMUBMUSD30Y
    ending Friday at their highest levels in more than two to three weeks.

    See also: What history says about stocks and the bond market ahead of a first Fed rate cut

    While financial markets generally tend to be efficient processors of information, they “haven’t been very accurate in terms of pricing in rate cuts” this time, said Lawrence Gillum, the Charlotte, North Carolina-based chief fixed-income strategist for broker-dealer for LPL Financial. He said the big risk for 2024 is if financial conditions ease too much and the Fed declares victory on inflation too soon, which could reignite price pressures in a manner reminiscent of the 1970s period under former Fed Chairman Arthur Burns.

    “We think rate-cut expectations have gone too far too fast, and that the backup in yields we are seeing right now is the market acknowledging that maybe rate cuts are not going to be as aggressive as what was priced in,” Gillum said via phone.

    December’s CPI report on Thursday is the data highlight of the week ahead.

    On Monday, consumer-credit data for November is set to be released, followed the next day by trade-deficit figures for the same month.

    Wednesday brings the wholesale-inventories report for November and remarks by New York Fed President John Williams.

    Initial weekly jobless claims are released on Thursday. On Friday, the producer price index for December comes out.

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  • U.S. manufacturing sector shrinks for 14th straight month in December

    U.S. manufacturing sector shrinks for 14th straight month in December

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    The numbers: A closely watched index that measures U.S. manufacturing activity rose by 0.7 percentage point to 47.4 in December, according to the Institute for Supply Management on Wednesday.

    Economists surveyed by the Wall Street Journal had forecast the index to rise to 47.2. 

    Any number below 50 reflects a shrinking economy. Manufacturing has contracted for 14 straight months.

    Key details: The key new-orders index fell 1.2 percentage points to 47.1 in December.

    Production rose 1.8 percentage points to 50.3 from the prior month. Employment picked up slightly but remained below the 50-percentage-point threshold.

    Prices fell 4.7 percentage points to 45.2. That’s the biggest drop since May 2023. Inventories were down 0.5 percentage point to 44.3 in December.

    Customer inventories dipped back below 50 last month to 48.1 in December.

    Only one industry, primary metals, reported growth in December, while 16 reported contractions.

    Layoffs picked up in December, concentrated in the computer and electronics, machinery, and food and beverage sectors.

    Big picture: The contraction in manufacturing is the longest since 2000-01, after the dot-com bubble exploded, said Jay Hawkins, senior economist at BMO Capital Markets.

    Economists said that depressed capital spending has been the key drag on the factory sector, along with weak global trade. They expect that a sharp drop in long-term interest rates will improve the picture, but the change won’t happen overnight.

    What the ISM said: Tim Fiore, chair of the ISM manufacturing survey committee, was relatively upbeat about the data. He said the sector was closing the year in a “really good position” and forecast that the ISM factory index would rise above the 50-percentage-point threshold by March. Fiore said he also expects the inventory number to pick up in coming months.

    What economists said: “The survey indicates that conditions in the factory sector remain unusually weak and that output is likely to continue declining for at least a few more months,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

    Market reaction: Stocks
    DJIA

    SPX
    were lower in early trading on Wednesday, while the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    rose to just below 4%.

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  • 5 ways young Canadians can prepare financially for what awaits in 2024 – MoneySense

    5 ways young Canadians can prepare financially for what awaits in 2024 – MoneySense

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    3. Food prices will rise, but at a slower pace

    Compared to previous years, food prices should stabilize in 2024. However, keeping your kitchen stocked will still keep your grocery bill high. According to Canada’s Food Price Report 2024, overall food prices are expected to increase by 2.5% to 4.5% over the course of next year (whereas food inflation jumped by 4.7% in November 2023). So, if you’re a single adult who spent roughly $375 on food per month this year, you can expect to shell out from $385 to $392 monthly by the end of 2024. 

    The Food Price Report suggests that you can expect baked goods, vegetables and meats to take a big bite out of your budget. However, you’ll get some relief with canned goods and dried pasta. The good news is that food prices will increase at a more gradual pace than in 2023.

    What you can do: Consider meal planning 

    During the pandemic, I started meal planning as a strategy to deal with grocery costs. It’s been helpful in ensuring that our family stays within our food budget and doesn’t fall into the temptation to order takeout. Meal planning consists of deciding what you will eat for the upcoming week and then adding only the ingredients you need to your grocery list. 

    Personally, I like to make extra lunch portions when preparing dinner, which helps cut back on costs. Another option is to buy items in bulk when they go on sale and then divvy them up into smaller quantities and store them in the freezer. This works well for sliced fruits, vegetables, meats and seafood. 

    4. Consumer debt will continue to grow

    Gen Z will continue to face financial pressure in 2024, so managing debt will become even more important. Between Q3 2022 and Q3 2023, the average credit card balance in Canada increased by 9%, according to TransUnion Canada. The increase was fueled by an increase in the cost of living and the cost of credit, thanks to higher interest rates. Unless the Bank of Canada starts reducing interest rates and daily living expenses start to come down, it’s likely that debt will continue to grow in 2024.

    What you can do: Start a side hustle to pay off debt

    To become financially secure, 40% of Gen Z are interested in generating more sources of income, such as starting a side hustle, according to a BMO survey. Considering there’s only so much you can do to cut expenses, you might want to consider growing your income so you can more easily pay down your debt. 

    Once you have some disposable income, prioritize paying off high-interest debt, such as credit card debt, which can help to squash your debt load. If you’re carrying a monthly balance, call your credit card provider and ask if they can lower the interest rate. If you’re fresh out of school and borrowed money to pay for your studies, it’s a good idea to focus on repaying your student loans.

    5. Travel will rebound in spite of high travel costs

    Despite rising travel costs, young travellers are eager to escape the daily grind. Many young people would rather spend their hard-earned money on experiences instead of goods. Regardless of being in a tight financial situation, 2024 may be the year many Gen Z make their dream vacations happen.

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    Sandy Yong

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