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According to a recent American Psychological Association (APA) study, Money is the second leading cause of stress among Americans, just one percent behind “The Future of Our Nation”.

Here are some of the APA’s tips for dealing with financial stress from a 2010 article that still hold true.

With well over half of Americans worried about money and dealing with financial stress, let’s look at some of the major impacts it can have not just financially, but psychologically and physically.

According to Everyday Health financial stress has been linked to migraines, cardiovascular disease and insomnia on the physical side and depression and other mood disorders on the psychological side. When faced with financially stressful situations people begin to struggle in other aspects of their life where they would normally succeed.

Eldar Shafir, PhD, says “The most valuable lesson from our studies is that juggling the everyday challenges of poverty imposes substantial demands on cognitive capacity, leaving ’less mind‘ for other tasks, and plans, and successes.” The APA discusses Shafir’s study further in this article. Financial stress can weigh on minds and cause slippage in other areas of life.  This isn’t necessarily surprising information, but it does go a long way in showing how debt and stress can spiral out of control and effect your life as a whole instead of just financially.

To make matters worse, people typically adopt unhealthy coping mechanisms to deal with the stresses that come with financial insecurity. These stresses and ailments can be compounded on by a lack of a decent support system to lean on. An APA study showed that people with stress are twice as likely not to make any changes when they don’t have anyone to talk to about their problems. This infographic illustrates that point along with a few other downfalls that come from stress and a lack of support.

One type of emotional support can come from the help of a trusted professional. The Garbacz Group has been in business for 30 years and has helped lots of different people with their finances through the years. If you’re dealing with financial issues, then pick up the phone and give us a call at 314-991-1303 or contact us online. We’re here to help you and we will tailor our approach to your personal financial goals.

With increasing popularity, the term FIRE is being used in personal finance. FIRE is an acronym that stands for Financial Independence Retired Early. As is the case with most money management matters, the FIRE acronym is all about math. Once you achieve Financial Independence (FI), it can equal Retiring Early (RE). FI=RE.

Behind this simplistic equation there are two primary mathematical principles that fuel the FIRE movement.

The first is one you have probably heard of: The Rule of 25.

This rule has been around for a long time when discussing retirement and financial freedom. The Rule of 25 is a simple rule that states that whatever your annual expenses are, you must have 25 times that amount saved to retire. For example, if you spend $40,000 per year, then you must have $1,000,000 saved to retire.

The personal finance blog CampFIRE Finance has some great charts that illustrate just exactly how these rules are designed to work.

As you can see in the chart above, the second rule is The 4% Rule.

This rule gets its name from the percentage of your retirement savings you can safely withdraw each year without ever running out of money. On average, the US stock market has grown at a rate of 7% each year. Obviously, it is called an average for a reason. Some years that growth rate is much higher than 7%, while other years the market loses value. However, over the course of your retirement this number should average out to about 7% per year. Therefore, withdrawing at a rate of 4% per year will leave the extra 3% leftover to keep up with the rate of inflation.

This second chart from CampFIRE Finance shows how following the 4% Rule can actually allow your retirement nest egg to continue growing from year to year.

This is what Financial Independence looks like — having enough money saved and invested so that it continues to grow as you live your life.

Whether or not you pursue early retirement is entirely up to you, but everyone should pursue financial independence. Once that independence is achieved then you have more flexibility in your life. If you find your work fulfilling and it brings you joy, then by no means should you quit. At that point you would be working for yourself rather than for a paycheck. However, if one day your boss retires and your new boss isn’t quite as friendly, your office moves and your commute triples, or any other unforeseen circumstance occurs that changes how you feel about your job, you wouldn’t be forced to continue working thanks to the financial independence you have achieved. You can retire early and enjoy your life.

How long it takes to achieve FIRE will vary wildly from case to case. The two factors that FIRE depends on are your annual expenses and your savings rate. If you have low annual expenses, then you don’t need to save such a large nest egg. If you earn more money and can save a larger percentage of your annual income, that will also accelerate your timeline for achieving FIRE.

It’s Wednesday evening. You’re winding down from a long day and you’re exhausted. What you really want to do is put on your pajamas and go to bed, but you really should eat something first. You order up a pizza, but what are you going to do with the rest of your night? If you’re like one of 55 million other Americans with a Netflix subscription, the answer is probably binging your most recent TV obsession on streaming video.

Streaming Video Stock on the Rise

It isn’t exactly breaking news that Netflix (NFLX) and other streaming video services like Amazon (AMZN) and Hulu continue to grow in popularity. Something that may be news to you, though, is that Netflix stock has risen from $150 to $395 in the last calendar year and Amazon has been almost equally as profitable in the same time, nearly doubling from $968 to $1,716.

Investor’s Business Daily says “Insiders are calling this the era of “peak TV.” This year, an estimated 520 scripted series will be produced for broadcast, cable and over-the-top internet services in the U.S., according to cable network FX. That’s up 7% from 2017 and nearly 50% from just five years ago.” In that same 5-year time frame Netflix stock has risen over 1000% and Amazon over 500% showing a direct correlation to the “peak TV” era.

Are you kicking yourself for not investing in streaming video stocks yet?

Will the Programming Bubble Burst?

Eventually, yes. The consumer’s appetite for new programming is only so large, but when the bubble will burst is an open question. The streaming video industry is still new and evolving, and there are major shakeups on the horizon. Disney (DIS) and Apple (AAPL) are both expected to launch major streaming services soon which will muddle the field even more. The Garbacz Group is here to help answer questions if you are looking to invest in the television industry and streaming video stocks.

The companies that are most at risk are the multichannel pay-TV giants such as AT&T (T) and Comcast (CMCSA). However, with AT&T’s recent acquisition of Time Warner (TWX) they are now 10% owners of Hulu. Comcast was already a 30% owner of the third largest streaming company.  According to Investor’s Business Daily, “penetration of multichannel pay-TV services among households with broadband has fallen below 80%, a seven-year low” and streaming video is solely to blame.

Long-Term Outlook (Spoilers Ahead!)

When you’re planning your portfolio, especially when you’re investing for the future, you want to look ahead and consider every outcome based on the information you have.  Investor’s Business Daily hypothesizes that “Only a few subscription video-on-demand services with broad appeal are likely to be long-term winners in the new TV industry structure” but “a host of smaller, niche services for passionate fans are likely to succeed. This second tier of internet video services now includes such channels as Crunchyroll for Japanese anime, World Wrestling Entertainment‘s (WWE) WWE Network and Gaia (GAIA) for yoga, fitness and spirituality programming.”

Need Personal Advice? Ask An Expert.

We mentioned nine ticker symbols in this post alone. With all these different players in the television and streaming video market, which of these companies should you invest in? It’s always wise to talk to a professional. Contact The Garbacz Group for a risk tolerance assessment and portfolio consultation today.

You can also email [email protected] for more information.

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