• Nate Baim, MBA, CFP®

Another COVID Relief Program Extended


Enjoy this week's edition of the Planner's Beta


Beta (n) - climber's jargon that designates information about a climb This digest's purpose is to share observations, ideas, and treasures found this week which you may also find insightful. Sharing does not mean it's an endorsement. I am endorsing the pursuit of knowledge and exploration.



Here is photo I took several weeks ago out at the Oregon Coast. This weekend I plan to head out on a ski pulk trip with a buddy. Hope to catch some good photos!


Education Department extends student loan payment pause for 42 million borrowers amid Covid crisis (CNBC) - The Department of Education announced last week they would push out the student loan payment and interest rate freeze until February of next year. The average monthly student loan cost for each borrower is about $400 per month, and about 90% of debtors are using the payment freeze. These data points suggest the program provided meaningful benefits for many Americans. However, with the program to end soon, many borrowers need to reevaluate their budgets and student loan payment plans. And although there are expectations the incoming Biden administration may forgive a portion of student loans, individuals should not plan for any debt forgiveness.

What if FIRE doesn't work? (Monevator) - The FIRE movement (Financial Independence, Retire Early) is characterized by individuals saving significant portions of their income to retire at a nontraditional age. Folks often save more than 50% of their income so that they can afford to retire sometime in their early 40s. I find the principles of the movement enlightening. However, I do believe too much of any one thing can often be harmful. Mr. Accumulator (the pseudonym for the author of the blog, Monevator) contemplates the potential disappointing outcomes which may accompany reaching early retirement. He does a great job identifying those risks and thinking of strategies to manage those risks.

5 Things About Rich People that the Middle Class Doesn't Understand (Lifehack) - As I say repeatedly, habits and behaviors are the basis of growing and preserving wealth. This article looks into five practices rich people do to increase their wealth. One tact illustrated is focusing on improving earning power. I feel it's best to do this in a manner that aligns with your values. Additionally, increasing earnings is most important at younger ages, as there is more time to recover and reap your investments' benefits. The article illustrates the concrete ways of increasing income. However, the report fails to address investing in education and meaningful experiences. Anecdotally, I think the rich do that, too. The other four tactics include:

  • Valuing wealth more than consumption

  • Living within your means

  • Willing to change and grow

  • Maintaining aspirational and challenging goals


Monthly Financial Planning Item

This checklist covers several planning issues that you should consider before updating your estate plan.


All too often, I see folks with no estate plan. Estate planning is the process of determining how your wealth will pass on to your heirs. Even those who are young need to create an estate plan. This vital task often gets pushed off. Doing so can result in stress and pain for your heirs in the unfortunate event you pass away. Whether you are single or have a young and growing family, I encourage you to review this guide. Use this guide to identify areas you need to address so that your estate's transfer is as smooth as possible. This checklist covers 18 of the most critical planning issues to identify and consider before updating your estate plan. The checklist includes:

  • Beneficiary & Fiduciary Issues

  • Assets & Property Related Issues

  • Minors & Children Related Issues

  • And More

Take the time to consider the items on this list to uncover any items needed to be included in your estate plan. Having a systematic process helps you better identify planning elements that could benefit you and your heirs this year and beyond. If needed, feel free to place time on my calendar.




Quote of the Week


"The wise man refuses to be led beyond his own depth." - Jami


 

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