How much does it cost to Raise a child in the US?

According to a recent report by the United States Department of Agriculture, the average two-parent, middle-income family with a child born in 2011 is now looking at $234,900 to raise a child to 17 (not including the costs of pregnancy, childbirth or college).This breaks down to an average of $12000 -$14000 a year per child.
Where do all the costs go?  Housing and food are the top two money eaters.  Housing  is by far the biggest taking 29% of your wage, while food costs come in around 18%.  There is also the expense of child care which accounts for 16% for a younger child. 

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What is the Latte Factor?

It is true that all of these items add up quickly with little notice from day to day.  Buying a four dollar latte everyday will cost you around $1460 a year, add a croissant and it's around $2375 a year .  A package of cigarettes twice a week could cost close to $1000 a year.  If your family of four eats out at a fast food restaurant once a week that could be around $1600 a year.  Add a few of these items together and you could be spending $4000-$6000 a year.  This could be money that could be invested, saved or even used for a memorable vacation.  Invest that $4 a day latte habit at 3% and you will have $17,239.38 in 10 years. Add in the croissant as well at 3%?  That is a total of $25000 in 10 years and $60000 in 20 years.

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A few ways to rethink using your Income Tax return...

As April draws closer so does the dreaded Tax Season.  If you are like most Americans, tax season can be a stressful time.  Questions seem to loom in your mind as you gather all the necessary paperwork.  Do you have your W2's, Stock information, Business income, IRA/ pension distributions, Rental property income and the list goes on.   But in that dread there can be a positive.  You may be receiving a substantial return on some of your income that the government has borrowed.

With this return of money, many are inclined to spend it immediately as if it were a bonus. Here are a few ways to rethink what to do with your Income Tax Return.

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Silver and gold have you none...?

It seems as though the stock market cannot be wrong for the time being. Since the election, the broad-based S&P 500 has hit more than a dozen all-time highs, and the aggregate valuation of its components crossed the $20 trillion mark. Meanwhile, the Dow Jones topped the elusive 20,000-point mark.

When the stock market is speeding past milestones at what seems to be an ever accelerating pace, investors tend to become less worried to risk and are often more willing to dive into higher-growth investments. When this happens, precious metals and mining stocks run the risk of being left in the dust. But should then be?

Two months ago the U.S. dollar index hit a 14-year high! Generally, the U.S. dollar and gold and silver, the two precious metals most commonly purchased by investors, tend to move in opposite directions. The dollar is usually strengthening when the U.S. economy is improving and uncertainty is declining, which is often bad news for gold and silver. On the flipside, a falling dollar implies potential weakness and uncertainty in the U.S. economy, which gold and silver feed off of.

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If you have the extra money a good practice is to invest in companies that pay dividends. For example some of the top companies that should be considered as as follows:

  • General Electric (GE): 3.0% dividend yield.
  • Phillips 66 (PSX): 3.0% dividend yield.
  • Procter & Gamble (PG): 3.3% dividend yield.
  • Coca-Cola (KO): 3.4% dividend yield.
  • IBM (IBM): 3.5% dividend yield.
  • Sanofi (SNY): 4.2% dividend yield.
  • General Motors (GM): 4.6% dividend yield.
  • Verizon (VZ): 4.8% dividend yield.

In order to understand how much you could expect to from your dividend investment you need to know the Net Income figure for the companies you are looking to invest in. From here you can apply the following. Divide the net income figure amount by the total number of outstanding shares, which you should be able to find in a stock quote. Dividing the net income by the outstanding shares will give you the net income per share. Then, multiply this amount by the company's typical payout ratio, converted to a decimal.

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Are we headed for a recession?

Wall Street is down this week, mostly based on the data released this Thursday from energy sector stocks as oil prices dropped and financial institutions shares fell for the first time in six days.

To add to this unemployment also ticked up slightly this week but remained much lower than expected.  Jobless claims rose by 5,000 to 239,000 in the week ended Feb. 11, a report from the Labor Department showed Thursday. 

Optimism undeterred is perhaps the order of the day as Donald Trump has yet to unveil is new tax plan which should provide a boost to the middle class and reduce taxes for businesses. President Donald Trump's vow last week of tax cuts, and fueled by optimism that his plans for corporate deregulation will expand the economy making it cheaper to do business, at least within the borders of America.

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I been preapproved for a mortgage now what?

Mortgage companies will often qualify mortage of up to 45-50% of your personal income, normally around 45% DTI (Debt to income). This can seem like a huge bonus to you however, just because they say you can have that much does that mean you should take that much? 

How does the lender figure out what they will loan you anyway? Well, your income figure is your Gross amount (pre-tax and deductions) which will say is 60K annually. So, assuming you have no debt, the lender would approve you for 60K / 12 * 50% = 2,500 per month payment.

Personally, I would not want my DTI to pass 40%, preferably closer to 35%, because then you can still make contributions to a 401K, IRA, emergency fund, and still have enough to pay $200 extra towards the mortgage, making the mortgage go from a 30 to a 20 year.

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Qualcomm is getting killed in the stock market today for its ongoing feud with Apple.

Apple has filed a $1 billion lawsuit, against Qualcomm and now it looks as though Apple is adding a couple more antitrust lawsuits for good measure. First posted by Reuters on Wednesday, the latest suits were instigated by Apple's subsidiary in China. They claim that Qualcomm "abused its clout" in the industry and that the company never made good on its promise to cheaply license its patents.

Coincidentally the stock market has taken notice of this spat between the two giants and has punished Qualcomm which has seen stock price dive since last Friday’s closing price of $64.99 a share to $54 dollars today.

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Does Trump presidency mean less taxes...?

It seems likely that your taxes may be getting simpler sometime in the near future. Donald Trump would like to simplify the tax brackets, reducing them from 7 down to 3.

President Donald Trump has proposed "massive" tax cuts for the middle class, who have seen wages stagnate and only had the hope of a higher minimum wage for hope of earning more money. Trump's tax plan calls for reducing personal income tax rates to: 12 percent, 25 percent and 33 percent. It's still not clear what may actually happen here but Steve Forbes penned an open letter today urging Trump to push ahead with lowering taxes for both personal incomes and corporate.

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Stocks try to pair losses for the week...

It’s been an interesting week for stocks. The markets are primarily down from the beginning of the week for both the NASDAQ and the DOW. American business looks strong at the moment with the country adding more jobs to the economy but with markets possibly getting ready for earnings reports.

Earnings reports are fickle beasts to try and decipher, even when a company beats estimates it does not necessarily mean that the news will be reflected in positive swing in the stock price. Expectations run high for companies that have higher financial goals set for them, while companies that are not expected to post positive financial results often fair better in stock price, as it was unexpected for them to post anything positive at all.

It’s important for to do the research on the companies that you follow and understand that both positive and negative financial news may be advantageous depending on your position in the stock. Are you long or short and what expectations do you have.

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