• Nate Baim, MBA, CFP®

The Blue Hour


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.




A Break from the News


The blue hour is the period before the sun breaches the horizon. It typically provides deep blue hues in the sky, contrasted with burning yellows, oranges, and reds near the horizon. I took this 30-second time-lapse photo when Becky and I backpacked up to the Silver Star Mountain region. This past weekend we backpacked up to Elk Meadows, an area just east of Mt. Hood. The weather was great, and the temperatures were not too cold. We captured some photos. There were nearly no clouds over the mountain in the morning, which helped us capture some alpine glow off the rocks at the mountain's peak. I plan to share photos of this most recent trip in a future digest.


This Week's Articles


To Target-Date or Not To Target-Date (Nate Baim) - Target-date funds are a convenient and easy way to invest for a specific time-bound goal. However, they may not always be suitable. Please read my full article on when Target-Date Funds may or may not be appropriate to use in your investment accounts.

We are approaching the fastest, deepest, most consequential technological disruption in history (Fast Company) - I agree, times are changing. Over the past several decades, our computers grew in power. And now, the software and humans are catching up with the computing capacity. We are now at a point where we are using compute to a greater and greater degree. This mass proliferation of computing is decentralizing power. And this is allowing more and more individuals to innovate for unique problems. With so many new technologies out there, people will innovate by mixing and matching seemingly separate innovations into new creations.

 

But, we should remind ourselves, this has always been happening. Take, for example, the Wright Flyer. The Wright Brothers did not invent the canvas used on the plane. Nor did they invent the four-cycle engine used to power the first flight. The Wright Flyer was the confluence of disparate technologies into one new technology. And that is what we will be witnessing over the coming decades. 


We will likely see significant changes in how we commute to work, the therapies we take to heal, how we construct our physical spaces, and how we power the world. Old industries will morph into new ones or die off. Yes, the change will be profound and likely more swift than past productivity revolutions. 


However, I do think innovation adoption periodically hits speed limits. We will adopt only so much change, so long as humans are managing the acceptance of inventions. Innovation adoption will rest upon how much we demand, afford, and accept the change. It's going to be interested to see what is adopted immediately and postponed.

Trouble On Main Street (NPR) - In the spring, the Federal Reserve established a program targeted at helping struggling middle-sized companies with the COVID induced recession. The program is titled the Main Street Lending Program. The Fed and Treasury partnered to set up a $600 billion lending regime to help troubled companies that do not qualify for the Paycheck Protection Program or the Fed's open market corporate debt purchase program. However, as of early October, less than 1% of funds have been lent.


This article does go into supply-side reasons as to why the program may not be working. First, misaligned incentives may be preventing the banks from lending out the money. The bank's loan underwriting processes may prohibit them from forwarding the loans because they see the companies as not creditworthy (something expected when the economy contracted the most it has since the Great Depression). The second is that political fears may be limiting the program because no one wants to explain to taxpayers the lending program lost money. And underneath the surface, the Fed is a crucial partner in this program. Failure could cost the Fed policy independence from Congress.


It is too bad the article didn't dig further into the quantity and quality of the loan requests. Understanding the nature of the demand for the funds will help policymakers better craft future policy. It will be interesting if reform to this program becomes a critical part of future stimulus packages. 


Chart of the Month - Issues to Consider When Starting a New Job / Planning Open Enrollment


When you start a new job, this shift can come with several changes that might impact your financial situation both positively and negatively. The same is true if you are planning open enrollment. New health plans and benefits may be available. And I find it useful for folks each year to use the open enrollment period as a way to reevaluate your job's income, benefits, and retirement plan. Use this checklist to review the potential impact of a job change or enrollment options such as:

  • Cash Flow and Income

  • Employee Benefits

  • Retirement Plans and Deferred Compensation

  • Taxes

  • Non-compete or other job restrictions

Financial planning can help you make the most of life's transitions.



Quote of the Week


"Innovation distinguishes between a leader and follower." - Steve Jobs

 

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