Daily Archives: March 24, 2020

In 2010, Grant Sabatier joined the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire in your 30s or 40s.

In just five years, he saved over $1 million, enough to consider himself "financially independent," which gave him the freedom to start living a more entrepreneurial life. He founded the site Millennial Money, which helps others fast-track financial independence and reach early retirement, and he wrote the book,"Financial Freedom: A Proven Path to All the Money You Will Ever Need."

While Sabatier, who now lives in New York City with his wife, has a big cash cushion to fall back on, even the self-made millionaire is feeling the effects of the coronavirus pandemic, which has put major stress on the U.S. economy.

Here are three changes he's made with his money in response to the pandemic and its crushing economic impact.

Most financial advisors say to leave your investments alone in times of uncertainty and when the market is volatile.

Sabatier is following that advice for the most part: "I did sell some of my Amazon stock and diversified my portfolio a little bit." He wasn't planning on doing any rebalancing, "but I was a little overexposed in individual equities," he notes.

In general, though, he's keeping his hands off of his investments, staying the course and sticking to his long-term plan. Ignoring the urge to panic and pull out of the market is easier said than done, even for Sabatier: "I have to keep reminding myself that you only lose money when you sell, and so the losses themselves haven't been realized."

As a precaution, "I took out 10 grand in actual cash because I think there are certain times where ATMs could get frozen or a bank could stall," says Sabatier. "Having actual cash, and money across a couple of different banks, I think is a wise decision."

Other experts arequick to reassure consumers that if your money is parked in a bank insured by the Federal Deposit Insurance Corporation(FDIC), it's safe and there's no need to cash it out.

It doesn't hurt to have money across different accounts, though. Financial planner Scott Cole recommends having three to six months' worth of living expenses saved across two different accounts. Keep about $1,500 in the savings account tied to your primary bank and put the rest in a high-yield savings account, where it will likely earn you more in interest, he says.

If you need to dip into the $1,500 for an emergency, it will be readily accessible. Then, you can replenish the amount you used with savings from your high-yield account.

Sabatier used to check his net worth every day. It was a way to monitor his financial progress and stay motivated to reach his goals.

While he has a substantial cash cushion and isn't worried about his financial situation right now, "I'm human, so when your net worth drops 30% in a matter of 10 days, it sucks and that hurts and you feel it."

That's why he's putting the habit of looking at his account balances on hold: "I know things are going down." He's accepted that, for the time being, he's in "a preservation phase, and not a growth phase," but trusts that the markets will bounce back. When they do, he'll start checking his net worth again, but in the meantime, he doesn't need the stress and anxiety that comes with seeing your numbers drop.

Another way to stay focused on the long run may be to tune out some of the daily headlines. That's what investing legend Warren Buffett does. It helps him focus on where businesses will be five, 10 and 20 years from now, which is really what matters.

"I don't think I can make money by predicting what's going to go on next week or next month," Buffett told CNBC's Becky Quick. "I do think I can make money by predicting what will go on in the next 10 years."

Don't miss:Here's what you should do with your savings during the coronavirus outbreak

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3 money moves one self-made millionaire is taking in response to the coronavirus pandemic - CNBC

When Prince Harry and Meghan, Duchess of Sussex decided to stepback as senior members of the royal family, their main goal was achieving financialindependence from the crown while still supporting Her Majesty, QueenElizabeth.

But their split from the The Firm occurred long before thecoronavirusCOVID-19 absolutely demolished the worlds financial health in a matter ofweeks. While Meghan and Harry were probably feeling confident about makingmoney before, there is a significant lack of speaking engagements currently.

Suddenly, the prospect of making money isnt so simple forthis former royal couple.

The Duke and Duchess of Sussex essentially wantedto pick and choose which parts of the royal life they participated in. Theywanted to retain the good parts, like money, power, and prestige, while rejectingtheir least favorite aspects, like participating in the Royal Rota and remainingpolitically neutral.

It became quickly apparent that this approach was nevergoing to work Harry and Meghan were free to leave if they wanted, but theycouldnt just create royal roles as they wished. Queen Elizabeth sent thecouple words of encouragement but remained firm on her stance. They couldntuse the word royal in their branding, for instance. And yes, theyd have topay their own way.

That seemed easy enough when they first quit Harry evenlined up a high-profile speaking engagement at a JP Morgan Summit in February.But now events such as this have been canceled indefinitely, leaving Harry and Meghanstuck withoutan income stream.

Though it seems that way now, the coronavirus pandemic wontlast forever and life will eventually return to some kind of normal. However,financial ramification from business shutdowns that go on for weeks or monthscould wreak havoc on the economy. No one knows what will happen next.

A palace insider told U.K. based broadcaster Neil Sean thatPrince Harry is keenly aware how much the pandemic hasaffected his plans. The worldwide health crisis has plunged the worldinto a financial climate unheard of before and the opportunities for companiesto waste cash by booking celebrities to speak at conferences [arent thereanymore], said Sean. Now it could be a very tricky path to becomefinancially independent.

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These are uncertain times. And now, more than ever, we need each other. We need each other for truth, for support, and to feel less alone during a time that can honestly feel quite scary. There are so many around the world who need support right now, who are working tirelessly to respond to this crisis behind the scenes, on the frontline, or at home. Our willingness, as a people, to step up in the face of what we are all experiencing with COVID-19 is awe-inspiring. This moment is as true a testament there is to the human spirit. We often speak of compassion. All of our lives are in some way affected by this, uniting each of us globally. How we approach each other and our communities with empathy and kindness is indisputably important right now. Over the coming weeks, this will be our guiding principle. We will be sharing information and resources to help all of us navigate the uncertainty: from posting accurate information and facts from trusted experts, to learning about measures we can take to keep ourselves and our families healthy, to working with organisations that can support our mental and emotional well-being. In addition, we will focus on the inspiring stories of how so many of you around the world are connecting in ways big and small to lift all of us up. We are all in this together, and as a global community we can support each other through this process and build a digital neighbourhood that feels safe for every one of us. We look forward to sharing more over the days and weeks to come

A post shared by The Duke and Duchess of Sussex (@sussexroyal) on Mar 18, 2020 at 8:17am PDT

Unlike so many other people, Harry and Meghan are not in anydanger of losing their homes or not being able to put dinner on the table, eventhough theyre losing income in the coming weeks. Both have a healthy cushionof funds to fall back on if this pandemic drags on for several months. At the veryleast, they should be putting their multi-million dollar house hunt on hold.

The Duke and Duchess of Sussex have been using Instagram to spread messages of positivity and hope during the crisis. They encouraged fans to take care of their mental health in the days ahead. With everything going on, its a lot to take in. Many of us may feel confused. Or alone, or anxious or scaredand in isolation, some of us may just feel bored, or that you dont know what to do with yourself without your normal routine. Its perfectly normal to be feeling any of these things, they wrote.

But heres the good thing (because right now we need to hear good things, right?), they continued. Yes, there is isolation and physical distancing, but there doesnt have to be loneliness. They went on to share some resources to help fans survive social distancing.

These royals have no idea how coronavirus will affect their future. But theyre hoping to come out stronger than before.

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Prince Harry and Meghan Markle Could Have a 'Very Tricky Path' to Financial Independence After Coronavirus Outbreak, Source Claims - Showbiz Cheat...

Americans are starting to feel the effects of the coronavirus pandemic, which has left few industries untouched. Some employees are already out of work and millions could end up losing their jobs in a potential recession.

The pandemic could even wipe out what's become known as the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire in your 30s or 40s.

That's according toGrant Sabatier,Millennial Money founder and author of "Financial Freedom.""I think the whole idea of retiring early ... will disappear because of this," he tells CNBC Make It. "It's just not going to be as easy, even for people who have been saving up, and it's not going to be as attractive of an idea."

Sabatier started his own financial independence journey in 2010, before the movement really took off. He saved over $1 million in five years by launching a bunch of side hustles and setting aside upwards of 80% of his income.

Despite the movement's growth over the past decade, Sabatier says the concept of retiring early has already started to lose steam among younger generations. And the impact of the COVID-19 pandemic on the global economy and markets could be enough to eliminate the movement altogether, he says.

But that wouldn't necessarily be a bad thing, he says. "I think that idea of retiring early is, thankfully, disintegrating in the sense that, work is an important part of life. Work is healthy," he explains. "Doing something that you're passionate about is healthy. And money is often a byproduct of the things that we do to create value in the world."

Work is healthy. Doing something that you're passionate about is healthy. And money is often a by-product of the things that we do to create value in the world.

Grant Sabatier

Founder of Millennial Money

Sabatier, who became a millionaire before 30, didn't work a handful of side gigs and saveanextremepercentage of his income to stop working and settle down. For him, it's been less about retiring and more about "having freedom and options and choices," he says.

If you're intent on retiring early, use the extra time you may have right now to reflect on why, he suggests. "I often see people who want to retire early because it's something else to chase it's another trophy to get. When, in reality, so much of what they want they already have. Or, they're much closer to what they want than they realize.

"In this time when we're all quarantined and have a lot of time to think, think about why you really want to retire early. Do you still want that amidst the increasing uncertainty of our times?"

Sabatier encourages people still interested in the movement to focus less on the "retire early" part of FIRE and more on the "financial independence" aspect: "At its core, it's always been about using money to build a life you love and being intentional about your spending so that you have more time and options in your life."

Don't miss:Financial planner: Here's when you should temporarily stop saving for retirement during the pandemic

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Self-made millionaire says the concept of retiring early 'will disappear' due to the coronavirus pandemic - CNBC

By Jon Dulin

There are multiple roads to financial freedom but are you driving in the right direction?

The most important step to financial freedom is understanding what that freedom looks like to you.

It might seem like an unnecessary question but too many people follow the drumbeat for financial independence only to give up in frustration.

If you set out on a road trip with no destination in mind, youre going to run out of gas and get stranded!

Besides just defining that goal so you know in which direction to drive, a lot of people have a conception of financial freedom that may not be as good as they think.

For many people, the idea of Financial Independence, Retire Early (FIRE) is having enough money to quit their job and never work again.

OK, so you ditch the rat race and never work a day againthen what?

At best you become a sun-burnt alcoholic on some far-away beach.

Thats going to get old quick.

You need a purpose, something that gives your days and your life meaning.

For me, financial freedom was enough money that I could devote my time to developing my own business.

It was not worrying about money even when my online assets werent quite generating enough cash flow to pay all our bills.

Now that the business generates tens of thousands a month, financial freedom is doing what I love and never having to worry about money again.

Whether its being able to devote yourself to a charitable cause, running your own business, a hobby or whatever you choose, think about what financial freedom really means to you and about what youll do when you dont HAVE to work for the money.

Knowing where that destination is, you can find it on the map and start planning your course.

Ive found three roads to get you there.

Once youve figured out where you want to go, its time to get in the car and drive. And theres no way to FIRE thats more popular than investing.

Investing is also the easiest road to your financial independence. The boom ininvestment appshas made it easy to open an account and put your money to work.

Note that I said the easiest road, not the shortest.

Investing $6,000 a year and earning the long-term market return of 8% annually, it will take you 35 years to reach that seven-figure payday.

Even if financial freedom means a slightly smaller bank account, investing is like driving to your financial independence in a 92 Camry.

That doesnt mean you should give up on stocks and dump all your money in the other two ideas well talk about next.

Part of the beauty of the other ways to financial freedom is they dont cost a lot (or anything) to get started. That means you can still put your savings in stocks to watch that slow-ride to financial success.

If you decide to invest that hard-earned cash, remember these ideas:

I truly believe that real financial freedom is getting paid to do something you enjoy.

I love growing my online business, talking about financial success and goals, and making that personal connection through the YouTube channel.

Now that doesnt mean its all rainbows and unicorns.

I dont always jump out of bed in the morning and there are some parts of the business that still feel like a job.

But its a whole lot better than the feeling of being stuck in a job I didnt like, feeling like I had no control over my financial future and that my work didnt matter.

In fact, I enjoy running my online business so much, I dont really even think about retirement anymore. I cant imagine not doing this at least for a few hours every day.

And it all started as a side hustle.

Trying to find your side hustle idea? Try these steps:

From consulting or freelancing to writing books, you can make money on any idea.

Dont believe me?

There are 479 video courses on Udemy about solving a Rubiks Cube.

Thats 479 people that are making money from talking about that infuriating puzzle-box of the 80s.

If investing is like driving to your financial destination in an old beater, creating a side hustle is like a Corvette.

Youll still have to work on it and keep it running but it will get you there fast!

Our third strategy to financial freedom, and the favorite for most, is creating streams of passive income.

If you need to get to your financial destination as fast as possible, passive income is like putting the pedal down on a Maserati!

Passive income is money you make without having to do anything after setting it up.

That doesnt mean you never work again. It just means you have an income source producing cash flow while you devote your time to your side hustle or other tasks.

Be careful going after just any idea proposed as passive income though.

As much as I love blogging and creating videos for YouTube, these are pretty far from a passive income source.

The best passive sources are ones that take minimal upkeep or effort after launched.

A few of my favorite passive income ideas include:

Financial freedom isnt a destination you get to overnight.

If it were as easy as a leisurely Sunday drive, we all would have gone there years ago.

Figure out what that freedom really means to you, draw out your map and youll get there sooner than you think.

For many, simply knowing theyre on the right road to financial independence is all the motivation they need to keep driving.

Author Bio:Born and raised in Iowa, Joseph Hogue worked in corporate finance and real estate before starting a career in investment analysis. He has appeared on Bloomberg and CNBC and led a team of equity analysts for a venture capital research firm. He holds a masters degree in business and the Chartered Financial Analyst (CFA) designation. Joseph left the corporate world in 2014 to build his online businesses, first through creating websites and later through YouTube. Booking just $792.41 in 2015 income, hes grown his online assets to an income of $122,400 for the twelve-months to July 2019. Hes published 10 books and has grown the YouTube channel,Lets Talk Money, to over 161,000 subscribers in less than two years.

This article was republished with permission from MoneySmartGuides. View the original articlehere.

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The Best Strategies To Reach Financial Freedom - ETF Trends

Now the independence of the CFPB is under challenge in the Supreme Court. A law firm that we were investigating for possibly cheating its customers has mounted a challenge to block the investigation from proceeding. The Trump administration has sided with the law firm, contending that a government agency having a single director with some protection against removal by the president is a violation of our constitutional system of separation of powers.

Important cases about the structure of the federal government come along only from time to time. When they do, the politics of these cases can create strange bedfellows. So it was in this case, which produced several novelties: the Justice Department refusing to defend the lawfulness of an act of Congress, the agency charged with enforcing consumer-protection laws siding with a law firm accused of cheating its customers, and the House of Representatives but not the Senate being given time to present its views so the justices could canvass all the issues more fully.

As I sat in the courtroom and heard the abstract arguments the lawyers were making about the proper bounds between the legislative and executive branches of our government, my mind kept flashing back to more human moments from the unfolding of this constitutional drama. I thought about some of the tough enforcement actions we had taken, against companies such as Wells Fargo, for manipulating customer accounts to make employee bonuses and pump up the stock price. And our efforts over several years to draft new rules in order to safeguard the mortgage market against another meltdown that would jeopardize the financial future of millions of Americans. As that work was being called into question, I wondered about the practical consequences of this case for families that are cheated or mistreated every day in the financial marketplace.

But in the courtroom, those issues were only implicit. The case isnt about what the government can do for consumers; rather, it presents a classic confrontation between Congress and the president about how much authority each can exert over the removal of high-ranking federal officials charged with administering and enforcing the law. It poses difficult questions because whereas the Constitution clearly and plainly states that the president has the power toappointsuch officials (often with the advice and consent of the Senate), it is silent about who has the power toremovethem.

The issue has reared its head periodically in American history, often in tense situations. When President William Henry Harrison died just a month after taking office, his Cabinet sought to impose on his successor, John Tyler (known as His Accidency), a rule that he would be bound by their majority decisions about policy. He rejected that proposal, and before long, almost all those Cabinet members resigned. After the Civil War, congressional Republicans did not trust President Andrew Johnson to keep the Cabinet officials appointed by President Abraham Lincoln or to carry out the policy of Reconstruction as they believed he should. So they passed the Tenure of Office Act, limiting the removal of certain key officials without the approval of the Senate. When President Johnson defied the law and claimed it was unconstitutional, he was impeached, and escaped conviction by only one vote in the Senate. The legality of the Tenure of Office Act was never settled in the courts, but the statute was later repealed.

Other more obscure situations have given rise to celebrated Supreme Court decisions. One involved the fate of a postmaster in Oregonwhich led to a decision where Chief Justice William Howard Taft, himself a former President, proclaimed a doctrine of unilateral presidential control, unchecked by Congress, over the removal of executive officials for any reason, or no reason at all. Nine years later, another case involved a Federal Trade Commissioner who was fired by President Franklin Roosevelt and later passed away. His family sued for his back pay, contending that the firing was illegal because Congress had protected him from being removed unless dismissal was justified as being for cause (conduct more serious than mere policy disagreements). In that case, the Court reversed course and sided with Congress, holding that the president can be subject to modest restraints on his removal power where officials heading independent agencies exercise a broad mix of powers that seem in some ways to be executive, legislative,andjudicial in character.

Thus, it appears to be settled that the president is in fact the one who exercises removal power over executive officials, yet it is also settled that this removal power can be conditioned in limited respects by Congress, as is the case with independent-agency heads, such as the director of the CFPB. Subsequent cases, including one authored by Chief Justice Rehnquist in 1988, have largely followed this approach by holding that Congress, when it sees fit, can impose modest restraints on the presidents removal of executive officials.

These precedents are close to a century old, but they remain controversial. Some conservatives passionately embrace the theory of the unitary executive, which holds that the president must be able to exercise or control all executive power with no constraints. In practice, this means that if the president cannot do the entire job of administering and enforcing the lawa self-evident propositionthen at least he or she can control other executive officials by replacing them at any time. The natural human assumption is that the person who can fire me from my job can more readily ensure my allegiance to do the job as they see fit. And for those officials in the executive branch under the president, Congress should have no right to interfere in this control over their actions.

But this legal theory, while perhaps logical in the abstract, runs up against potentially embarrassing real-life problems. For example, the Constitution only contemplates two essential executive-branch officialsthe president and the vice presidentand every other executive official only has authority and duties and responsibilities as prescribed by acts of Congress. When it was determined that the country needed to create a new Department of Homeland Security, for example, the president was not free to make those wholesale changes in the organization of the executive branch on his own, but instead had to get Congress to pass legislation to authorize it.

In a different vein, the perceived evils of the spoils system in the 19th centurywhereby a new president could sweep out all executive-branch officials to make way for his own partisansled to congressional limits on the presidents ability to fire most executive-branch officials solely on political grounds. These protections are the accepted principle of civil-service reform that has endured to this day. They are not consistent with an all-powerful executive who can control every rank of executive officials according to his or her whims.

Accordingly, a more practical view of the separation of powers has been to reject the idea that each branch exercises its own powers in its own hermetically sealed sphere. On the contrary, the Framers set up a system of checks and balances whereby each branch interacts closely with the others, and each has various means of asserting itself against the others, so that no single branch of the government can establish tyrannical powers to infringe on the liberties of the people. For instance, the president has the power to interfere with Congress by vetoing legislation. Congress has the power to limit the president by controlling the budget and thus the size, scope, and aspirations of the executive branch. The courts have the authority to review actions taken by Congress or the president and to invalidate those deemed to be illegal.

In the sphere of appointment and removal, likewise, the Constitution gives scope to some interplay between Congress and the President. Since Congress alone can authorize the accretion of additional executive-branch officials and condition their powers, it makes sense that it can, to some extent, condition the grounds of their removal from office as well. And, again, it has done so with the civil-service reform laws that offer considerable protection for the tenure of large numbers of executive-branch officials who can only be fired for cause of some kind.

Of course, the case currently before the Court involves a high-ranking official with much broader powers than an everyday bureaucrat. And as the justices mulled the arguments, they were pulled in different directions as they considered the effects that their decision could have. In particular, they wrestled with two tough hypotheticals. Leaning too much toward Congress could lead to resuscitating the discredited Tenure of Office Act by upholding removal restrictions even on key Cabinet officers (potentially requiring the next president to keep Attorney General Bill Barr or Secretary of State Mike Pompeo in place even beyond President Trumps tenure). But leaning too far toward the president could lead to compromising the independence of such sacrosanct officials as the chair of the Federal Reserve, conferring the power to set interest rates and manipulate the economy for purely political purposes, not necessarily in the public interest. The justices seemed to almost visibly shy away from either of these extremes.

In the end, though the argument offered a muddle of different approaches, the Court is likely to issue a ruling that is fairly limited as a practical matter. A bare majority of the Court may hold that the president can remove a single director of an agency at will and cannot be limited by the for cause removal provision imposed by Congress. But there were other indications that the Courts decision would embrace the big picture by allowing the CFPB to continue to operate and to protect consumers, as Congress intended. As Justice Ruth Bader Ginsburg reminded everyone at the argument, while both Congress and the president had their lawyers arguing before the bench, it is important to remember that consumersthat is, all of ushave weighty issues at stake in this case too.

This story is part of the project The Battle for the Constitution, in partnership with the National Constitution Center.

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Why the Supreme Court Should Protect the CFPB's Independence - GovExec.com