Together With

Happy Monday Future Funders Family!

Kicking off this week with a big shout out to all our readers as we just crossed the 15,000 subscriber mark (in under 5 months!).

For those new to our newsletter and mission as a media company, you can read a bit more about us here.

As always, if there are any financial issues that you think we should be talking more about to benefit your family, just reply to this email.

Okay, let’s get to it!

💬 Quote Of The Week

🍽️ The Main Course

Headlines That Matter

Economy

Don’t Worry (About The Economy), Be Happy

🚀 The quick version: Two big financial events dominated the headlines this week: The Fed and company earnings reports.

The quick version is that both continue to point to a view of what Wall Street likes to call a “soft landing,” meaning the economy is staying strong while we gradually see lower levels of inflation (feels kind of like a nice smooth plane landing we had yesterday coming back to FL).

Here is what happened in more detail:

Powell is optimistic. The Federal Reserve met and raised interest rates by 25 basis points (0.25%). What was more notable was Chairman Jerome Powell’s tone in a press conference afterwards (Wall Street dissects his words for meaning more than I did after my first date with my wife). He would not commit to raising rates further, noted positive signs in the economy, and said that the Fed removed previous forecasts calling for a recession.

Company earnings paint a positive picture. Q2 earnings season is past its halfway point and results have been strong with about 81% of S&P 500 companies beating Wall Street estimates by an average of nearly 6%.

In terms of what we have learned so far that is worth knowing:

• The airlines say they are planning to lower fares (it’s about time!) as they have built out a ton of new capacity (i.e. have purchased a lot of new planes and now need to fill seats).

• Microsoft and other tech companies are pumping the breaks on how fast Artificial Intelligence will change business and life as we know it.

• Credit card companies continue to say the U.S. consumer is still spending at a strong pace, and this probably won’t change until savings from Covid are depleted (likely happens around Q1 2024)

• Auto companies are about to start an electric vehicle price war as they have concluded consumers aren’t buying them because of the high prices

• Staffing companies are telling us that companies generally aren’t shedding workers, but they have started slowing new hires

👪 How it affects your family: Recent data continues to confirm our previous view on the overall economy.

We would expect to continue to see evidence of prices and inflation come down over the next few months which is positive relief for so many families.

Ultimately, low prices may backfire on companies as their profits shrink (because they can’t charge as much), but we would think this problem will not be an issue for at least several months.

Here are some suggestions for families today:

• Organize your outstanding loans. Post the Fed meeting it seems likely that interest rates have peaked (or come close), and that in the next 12 months we may see them start to come down. If you have taken out a loan recently (personal loans, mortgages, student loans, etc.), this may provide you with refinancing opportunities. If you are thinking about taking out a loan today, it might be better to hold off for a lower rate (if you can) or structure the loan in a variable way to take advantage as rates come down.

• Watch travel and EV prices. With airlines saying they are getting ready to lower prices, if you are taking a trip with the family make sure you set price alerts or look for a low price guarantee if you have already purchased a ticket. We would also start to keep your eye on hotel rates for signs of them dropping (they likely will soon follow the airlines). Also, if you are in the market for an electric vehicle, they are about to get a lot cheaper so maybe wait a few months.

• Take a breath when it comes to AI. Worried AI is going to take your job or destroy humanity? Companies that spent billions of dollars on it just told everyone to pump the brakes. There is still a long way to go here before the robots take over, so you can use the time to start to learn more about the subject and teach the kids (don’t worry if you feel like you are behind - you’re not).

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Currency

Your US Dollars Are Safe

🚀 The quick version: We have seen lots of headlines lately questioning the status of the U.S. Dollar as the world’s reserve currency, and we have gotten quite a few questions from you guys on this topic… so let’s break it down.

For some quick history, the greenback (another term for the dollar) was first officially established as the world’s reserve currency at the end of WWII (1944 to be exact). At the time, the U.S. had the most gold reserves in the world, so other countries decided it would be easier to peg their currencies to the U.S. Dollar vs. the lessor amounts of gold they had within their own borders.

Nations everywhere began using the U.S. Dollar to facilitate global trade and this has continued right up to today (as an aside, this is part of the reason the U.S. government is able to issue so much debt - because that debt is bought by countries who need U.S. dollars to transact and grow).

Now, speculation seems to be popping up left and right that the U.S. Dollar may lose this status with people pointing to certain countries making one off deals using other currencies or potentially the recent spending by the U.S. government causing too much debt.

As usual, traditional media has swooped in trying to scare people everywhere with little understanding for the actual nuances involved or how the system works.

👪 How it affects your family: The short version is we don’t think you should spend any time worrying about this.

The dollar isn’t going anywhere as the world’s reserve currency anytime soon and the all the hard work you have put into earning those dollars won’t be affected (aside: if you have younger kids and are looking for some simple games to start to teach them about money we have a free resource here).

For a currency to be considered for reserve currency status, it needs to meet three main criteria. Let’s discuss:

Size. The global reserve currency must exist in massive volume around the world to be able to meet demand for trade (think lots and lots of printing presses). This narrows the field immediately to major currencies (the Dollar, Yen, Yuan, and Euro). Cryptocurrency mostly is only available in limited quantities making this not a real option right now.

Access. To be a reserve currency you need to be able to get access to a nearly unlimited supply of it at the drop of a hat to facilitate global commerce. Once again this rules out cryptocurrency and we would be hard pressed to say there is a currency other than the Dollar that offers this ability.

Trust. Maybe most importantly to be the world reserve currency you need to have confidence that it is a safe store of value and that the government will not intervene into the system. If a country tries to micro manage the value (like China’s Yuan) or the underlying system is less stable (think countries leaving the Euro), this will not work. Here again, there is really no better option than the US Dollar.

Having said all of this, it does not mean that the U.S. government can continue to be reckless with spending (there comes a point where trust is broken), but for now this is not a worry for families and you should dismiss headlines that make you think so.

🥘 The Side Dishes

A few things to know…

👴🏻 Top cities for retirement. U.S. News & World Report evaluated the 150 largest metropolitan areas in the U.S. based on six factors noting the top city for retirees is located in Pennsylvania.

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🎵 You got a dollar? Spotify announced this week that the cost of a subscription will go up to $10.99 per month from $9.99. This is the first increase in 12 years.

🚗 Airbnb for your… car? If you don’t feel comfortable renting out your home, many families have started earning extra income (or even building out a business) by renting out their cars with Turo. Check it out here.

🚰 Going to Europe is about to get harder. Beginning in 2024 Americans will need a visa to travel to Europe. Given recent currency moves, from a purely financial standpoint we wouldn’t recommend going there right now anyway (we discuss this topic in a previous issue here).

💰 Get your money instantly. The Federal Reserve just launched a program that will allow banks to get you your money instantly. No more waiting for invoices or paychecks to clear. Talk you your bank today and see if they are enrolled.

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🗓️ The Week Ahead

August 3rd

Today we will get the ISM services index for July (services represent about 80% of the U.S. economy). Wall Street is looking for a reading of 53.9 but the devil will be in the details as people look for signs of gradual cooling and wages lower indicating the soft landing remains on track.

August 4th

Today we will get the latest Jobs report for July. Wall Street is looking for the economy to have added 209K jobs and to have an unemployment rate of 3.6%. A slightly lower jobs number or higher unemployment number would also give people confidence that the economy gradually continues to cool.

🍨 Dessert

This Week’s Deals For Families

Help your family save and spend smarter*

🈹 Ralph Lauren is having their summer sale for men, women and kids offering prices at 40% off.

👚 Zara offering up to 70% off items for their end of summer sale.

🛋️ Amazon’s secret furniture outlet is filled with furniture discounts this month - up to 54% off.

* we aim to always keep this newsletter free. If you buy something through our listed deals we may earn a small commission, at no added charge to you, in order to help us keep the lights on

Dinner Discussion ❓