Together With

Happy Monday Future Funders Family!

While we always try to be as honest and down the middle as possible, we are breaking our rule this week to throw the full biased support behind 6-year-old Tucker Jones in the final round of the 2023 USA Mullet championship.

He is certainly all business in the front and party in the back. Even better, he plans on using the $5,000 grand prize for his college fund (smart kid).

You can vote for Tucker here from August 7-11th.

Okay, let’s get to it!

💬 Quote Of The Week

🍽️ The Main Course

Headlines That Matter

Economy

The Economy Is Cooling

🚀 The quick version: The economy continues to show more evidence that things are slowing down (but in a good way).

Let’s explain:

U.S. Manufacturing and Service sectors take a breather. These two sectors combined represent about 85% of the U.S. economy and this past week both showed signs of softening. The Manufacturing ISM and Services ISM for July (these are monthly surveys Wall Street looks at to take a temperature of these sectors) both came in slightly weaker than expected. Perhaps most importantly, the surveys also showed that what companies in both sectors were paying for inputs (i.e. their inflation) was also lower. This is a positive for people who will eventually buy their products or services (you and me). As their prices come down, typically ours will follow.

Jobs report adds to cooling narrative. The official government jobs report for July (this data is always released for the prior month on the first Friday of the next month) also indicated some slowing with the U.S. adding 187K new jobs in July vs. estimates of +200k. On the positive side, wage growth ran above expectations (came in at +4.4% vs. last year) which means that people are finally earning wages above inflation (the latest inflation reading was +3.0% for June but we will get the July figure this week). The rising wage growth is one thing we are watching moving forward as a potential negative sign inflation may get worse again (if people have more cash, demand and prices go up), but for now we are not worried about it and it’s nice to finally see peoples’ wages growing more than their costs.

👪 How it affects your family:  The above shouldn’t alarm you. Everything continues to point to a gradually slowing (but still strong) economy that should see lower inflation levels in the near future.

As this picture of the economy comes more into focus with each data point we get, here is a list of things on our mind that could be useful for any family to think about:

• Being careful with the stock market. We will never be in the business of forecasting short term stock market moves, but with a cooling economy plus chatter from company earnings, it currently looks “rich on the fundamentals” (aka its overvalued). We would say, however, if you are investing for the long term, don’t pay any attention to these thoughts. But if you are looking to invest for the short term, we would look for near term indicators to change in order to find a better time to jump in or add to positions.

• Thinking about earning extra income. Just because the economy is cooling doesn’t meant your earning power has to. According to recent survey work from Bankrate, nearly two in five (39 percent) of U.S. adults now have a “side hustle” to earn extra income (CNBC this past week highlighted an Etsy seller earning $169,000 per year). This got us thinking that any parent has the capability to do this, and so we created a list of 25 ways parents can make money from home to help spark some inspiration.

• Watching your employer carefully. With companies slowing job growth and in some cases downsizing right now, if you think your employer may be next it’s worth knowing about the Worker Adjustment and Retraining Notification (WARN) Act. It requires companies with 100 employees or more to file notification with the state at least 60 days before they start announcing big layoffs. All you have to do is search for WARN Act (your state) and you will find a .org or .gov website that shows all companies in your state laying off workers (here is an example from our home state of FL). Once you see this it may give you some extra time to look for a new job and not be caught by surprise.

Together with Nathan Berry

Every thought of earning extra income writing a book?

Blogger and creator, Nathan Barry, founded ConvertKit in 2013 after he realized he needed a better way to reach his audience through email.

Now he is helping others earn income from their writing through his free newsletter and courses.

If you always thought about trying to make an income from writing, this is the place to start learning!

Government

How To Take Advantage Of The U.S. Debt Problem

🚀 The quick version: The U.S. Government now has close to $33 trillion in total debt outstanding (which amounts to about $98k for every person living here).

What brought these facts more into focus recently were two pieces of news:

Fitch downgrades the U.S. Credit rating. This one was all over the headlines as the rating agency, Fitch, decided to downgrade the U.S. credit rating to AA+ from AAA. This is similar to saying on a credit score range of 300 to 850 the U.S. now has a credit score of about 840 and not 850; overall, not a big change, but not nothing either. The agency basically said the reason for the downgrade was because the U.S. was not serious about getting a hold of its debt (reminds me of my wife’s relationship with Amazon). Worth noting this has happened before as Standard & Poor’s downgraded U.S. Debt in 2011 on similar reasoning.

Treasury Department increases borrowing estimate. A less talked about piece of news but equally as important was the Treasury Department coming out and announcing they underestimated the U.S. Government borrowing needs for the third quarter by about $270 billion (someone in accounting should be fired… but probably won’t). As an aside the U.S. Government “earns” money through our tax dollars, and when they spend more than they earn, the Treasury Department has to issue debt to fund more spending.

👪 How it affects your family: Our overall thoughts on the increasing amount of U.S. debt (and we do reserve the right to be wrong) is that while the politicians in Washington can’t be reckless forever, the situation is not worth you worrying about for a couple reasons:

Our total debt is not that high. Yes, $33 Trillion is a lot, but when you compare it to the size of our economy it amounts to about 120% of our annual GDP. This is 16th highest in the world when looking at other countries (Japan is about 300% of their annual GDP).

Over half is owned by us. According to latest data, over half of the $33 Trillion is actually held by U.S. institutions, the Fed, or citizens. That is something the media leaves out when they try to scare you about foreign ownership of our debt.

Our currency status gives us protection. The analogy that the U.S. government needs to keep a balanced budget like a family household is not entirely accurate. With our status as the world reserve currency (which is not changing) by issuing debt we help other countries that need U.S. dollars to grow. For example if you are a company in Africa and want to build factories you likely need U.S. Dollars to pay for materials. What’s a great way to get U.S. Dollars? Buy U.S. Treasury bonds and collect interest (in dollars, of course). This is a luxury no other country has.

More important though than letting the media scare you about the U.S. debt issue, you can use it in a way to help your own family get ahead. Here’s how:

Capitalize on Treasury bond interest rates. With the Treasury needing to now issue about $270 billion more bonds, that means we are going to have a lot more supply. As with anything anyone is trying to sell, when there is a lot more supply, the buyer has more power to get a better deal. In this case, that means the buyers of these bonds will likely demand higher interest rates which is your opportunity to capitalize when you see the rates go higher (you can watch these rates here under the “Yields” column). Short-term Treasury bonds (3 month, 6 month, 12 month) already offer you over a 5% return which is a safe place to park some cash especially if you are worried about the stock market (we explain a technique to do so here).

Start a family conversation about debt (and set the kids up early with a good credit score). If you want to start talking to your kids about debt or spending dangers, these are great headlines to get the discussion going (unlike the U.S. Government, we families have to balance a budget!). For parents with kids under 18, here are steps you can take to teach them about credit and actually boost their credit score before they turn 18.

🥘 The Side Dishes

A few things to know…

🔋 Bigger than AI, Ozempic, and Aliens? A South Korean team just released a paper describing a novel room temperature super conducting material called LK-99. Now, there are multiple claims of people discovering room temperature superconductors every year, but this one is generating buzz (betting markets pricing ~40% chance it’s real). There are many implications of what could change if it’s real but here are just a few: super efficient electricity grid, super cheap MRI machines, skyrocketing computing power, and viable nuclear fusion.

📱 Mom, where are the parental controls?  Said no kid ever. So heads up, Apple announced this past week that there is a bug stopping parental control around limiting kid’s screen time (this bug has remarkably been around for months).

🏠 Buying a new home from a builder? Before you do check out this article which breaks down important things to consider when buying a new home.

💊 Cure for cancer?  We were thrilled to read about this new potentially cancer ending pill fueled by the bravest little 9-year-old girl. Fingers crossed as it goes through clinical trials.

🏈 Get better at fantasy football. Footballguys helps you win more at Fantasy Football. Sign up for the 100% FREE Daily Update newsletter and join 600,000+ others who are dominating their fantasy. Subscribe here!*

🪑 Right way to lay out your living room. Design pros don’t just wing it. They follow these 7 formulas as guidelines when they are laying out this all important room for families.

🎒 Back to school with AI Textbook company Pearson announced that they are launching a new back to school study kit that will include AI to help your child get ready for the school year. Not sure how we feel about this one tbh…

📺 What to watch. Fighting over the remote? For Rotten Tomatoes 25th anniversary they have announced the top 25 TV shows and top 25 films of the last 25 years (I am confused though… where is Top Gun?).

🏦 Get better advice with student loans. Student Loan Planner helps professionals with huge student debt reduce anxiety and make the smartest financial decisions so they can grow wealth fast. One click opt in here!*

*this is a sponsored post

🗓️ The Week Ahead

August 7th

Today we will get the latest data on used car pricing with the release of the Manheim Index for July. We would continue to think we see signs of prices continuing to come down.

August 10th

Today we will get the latest inflation number in the form of the Consumer Price Index (CPI). Wall Street is expecting a slight acceleration from last month with the CPI coming in at +3.2% vs. +3.0% in June. This will be the first acceleration since June of 2022 if it happens. While one month doesn’t make a trend, we will be watching the details here to try and make a judgement if progress on inflation has potentially stalled.

🍨 Dessert

This Week’s Deals For Families

Help your family save and spend smarter*

👟 Allbirds is offering up to 70% off for a limited time back to school sale

🛋️ The Container Store is offering up to 40% off as part of their back to school sale.

🛀 Shop SkinStores sale section to save up to 50% off top brands. No code needed.  

*we won’t earn on any of the deals above this week - just thought they were the best ones we found and wanted to share them anyway!