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[ad_1] Update 6/09/2020: Since writing this post I now have 3 sons and a daughter! Also, Illinois has increased their state tax rates!! My family also now lives in Tennessee.  529 College Savings For Illinois As our son rapidly approaches the age of two, the scary reality that paying for college tuition is just around the corner. We were fortunate enough to start a 529 College Saving plan for him when he was born and make a diligent effort to add to it on a frequent basis. For those that reside in the state of Illinois, I wanted to do a quick rundown of what your options are in the event you want to get a head start on saving for your kids college education. First, let’s take a look at the basics of what a 529 College Savings Plan is. Quick note: You can use any state 529 plan to help pay for college and you don’t have to reside in that state to use the benefit.  Doing so, you will give up a potential state tax benefit. Basics of 529 College Savings Plan 529 Plans are the most commonly used savings tool for college education nowadays.  They are named after Section 529 of the Internal Revenue Code, 529 savings plans provide a tax-advantaged way to save for qualified higher education expenses. These plans are generally sponsored by individual states, while plan assets are professionally managed by independent investment firms or state government agencies. Anyone can open a 529 savings account regardless of income level and contribute up to $13,000 ($26,000 for married couples) a year without gift-tax consequences. You can read these other posts I wrote on the topic: 10 Questions About College Savings Plans, Our Son Just Turned One, Starting College Tomorrow, Can You Take a Tax Loss on 529 Now that we know the basics of the 529 Plan, let’s look at the 529 options for the state of Illinois. Bright Start College Savings The first 529 College Savings Plan option for Illinois residents is the Bright Start Program.  The Bright Start plan is more of a do-it-yourself program.  This is taken directly from the Bright Start site: Starting a Bright Start plan takes as little as $25 and about 15 minutes when you enroll online. Like the 401(k) plan you may use to save for retirement, a 529 plan allows you to invest in various portfolios of stock and bond investments to save for your student’s college education. The portfolios are managed by OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc., and include investments managed by industry leaders OppenheimerFunds, Inc. and its affiliates, as well as The Vanguard Group and American Century Investments®. Investment Choices The program allows investors to choose either age based portfolios (where the investment options go from more aggressive to more conservative as the child approaches college age) or Choice Based Portfolios where you choose the investments yourself from all the available fund options. Troubled Times Recently, the program has fallen under great scrutiny with the recent loss of $85 million in the fund which can largely be attributed to steep losses in the Oppenheimer Core Plus Fixed Income bond fund, a fund that sustained steep losses in 2008 due to management’s big bets on illiquid securities. Currently, the Bright Start program is conducting an investigation concerning possible breaches of fiduciary duty by the OppenheimerFunds, Inc., OppenheimerFunds Private Investments, Inc., and OppenheimerFunds Distributor, Inc.   I know this may be a big concern for future investors and rightfully so.  Don’t be too alarmed, though.   There are plenty of other fund choices in the program that you can choose from.  Need more assurance?  Recently, Consumer Reports announced that the Bright Start Program was named as one of the Best Five 529 plans in the country according to the most recent data.  That should give you some confidence in the program. Bright Directions 529 Plan If you are looking for another 529 plan option, you can also look at the Bright Directions program.   It’s a good compliment to the Bright Start program.  The Bright Directions is usually sold through an advisor (such as myself).  Here’s some basic info taken directly from their site: Bright Directions is an advisor-sold, 529-qualified tuition program specifically for those who manage their investments through a professional advisor. This plan allows your advisor the flexibility to build your college savings as aggressively or conservatively as you see fit. Investment Choices Bright Directions has some similar features as Bright Start in that it offers Age Based Portfolios as well as the ability to choose from 26 individual funds.   The mutual fund companies are as follows: PIMCO, BlackRock, American Century, Delaware Funds, Eaton Vance, Northern Funds, William Blair, AllianceBernstein, ING Mutual Funds, T. Rowe Price, Barclays Global Investors, Calvert, PaydenFunds, NCM Capital, Ariel Investments, OppenheimerFunds, Sit Mutual Funds, Forward Funds, Adelante Capital Management, FMA, and Earnest Partners. In addition to those two options, the program also allows you to choose from 7 Target Portfolios that will based on your risk tolerance.  For example, if you are comfortable with 60% in stocks and 40% in bonds, then your portfolio will stay in that mix no matter what. Tax Benefits What Are the Federal Income Tax Advantages? Tax-deferred growth Tax-free withdrawals for qualified higher education expenses 2. What Are the State Income Tax Advantages? Tax-deferred growth Tax-free withdrawals for qualified higher education expenses1 State of Illinois income tax deduction $20,000 if filing jointly $10,000 per individual tax payer College Illinois- Prepaid Tuition Plans Most people that are familiar with 529 plans use plans similar to those noted above.   If the stock market is not your thing, you can then apply for College Illinois which is a prepaid tuition program. College Illinois offers plans to purchase university level semesters (University, University+) and community college level semesters at today’s tuition prices.  You may purchase one semester or several semesters with a maximum of four at a community college and nine semesters at a university.

[ad_1] So here we are just a month later,  in a full-blown economic panic, and at the start of the most sudden recession ever. The pandemic has spread much further and faster than most uninformed people (including me) would have ever guessed, and the whole world is on some form of lockdown. Nothing quite like this has ever happened before in the modern world. What should we do? On the financial side,  I’ve seen media stories about “The End of FIRE movement”, and a close friend even said to me, “Well, I’ve got to go back to work now because with all my investments down 35%, I’m not financially independent any more.” And I’ve seen plenty of similar statements out there on the Internet: Is it time to be worried like this commenter on my last article? Even worse, some people are trying to time the stock market, selling off their investments at a discount in the hopes of “protecting” them, hoping to subsequently outsmart everyone else and re-buy them at an even lower price just before some future rebound. On the human side, we have seen a death toll of thousands of people per day in the US alone with best-case forecasts of 200,000 by the time things calm down, which implies several million worldwide. And so far, we have not been performing like a best-case country so these numbers will probably be higher. This all sounds terrible, doesn’t it? It makes sense that many people are fearful and pessimistic. So why is it that I remain as optimistic as ever, with the full expectation that you and I will come through this humbled but also wiser and better than ever? It’s because I already know how this all ends. The world will keep rallying and doing its best to slow down contagion. Caring people will keep helping each other. People will stay home and heal, hospitals will expand, nurses and doctors will do their best to save as many lives as possible, and the 80% of us in jobs that allow us to keep working, will keep doing our jobs. Meanwhile, innovators are still innovating all over the world. People are staying up late working in labs, vaccines are being tested, genes are being sequenced and the current virus will end up beaten and then written up as a very significant chapter in the history books. But apart from all of this, there is still way more going on out there, which just isn’t making it to the headlines. Engineers and scientists are still inventing things that will drastically improve the future. Solar panels are still streaming out by the trainload and being installed worldwide. Better and better batteries which will eventually displace all fossil fuel use are evolving. The most efficient factories in history are being built. Gene therapies are advancing which will eventually make a mockery of all of our current health conditions. Internet connectivity and education is becoming more widely available and cheaper which is allowing the next generation of brilliant kids to to grow up and learn faster and do more than you or I could have even dreamed. And all this will happen regardless of the course of the current pandemic. If all that is true, then why is the world so Scary right now? I get it – never before has something from the daily news come home to affect our daily lives so much. Grocery stores are cleaned out, people are wearing masks, and you probably have friends who are currently unemployed, or sick, or both. But in this situation, it really helps to understand the big picture of what is actually going on. The world is not ending. The air outside your windows is not a swirling cloud of certain death. All that has changed is that we are in a self-imposed economic slowdown that has been created purely to save the lives of our most vulnerable people. Which is one of the most compassionate things our society has ever done. To me, this is a remarkable and wonderful moment and I would not have guessed that such a capitalist country would ever have the balls to do it. To put it into a visual, we have decided to prevent the following worst-case scenario: (IMPORTANT NOTE: The timing of these hypothetical deaths is not real medical data, just an illustration of my own personal guess – made with a mouse pointer rather than a spreadsheet. However the US background death rate really is about 2.8M per year per the CDC) In the worst case, we might lose 1-2% of our people, biased towards the most vulnerable. There is some overlap because this accelerates some other deaths that would have happened this year, and pulls some future deaths into the present, which is why the death rate dips for a while afterwards. And turn it into this: With enough prevention, we cut the death rate by twentyfold, to about 0.04-0.06%. 200,000 is still an enormous number, but the existing death rate at least puts it into perspective. In the worst case, our public officials would all downplay the risk of COVID-19, and we’d keep working and traveling and spreading it freely. We’d maximize our economic activity and let the disease run its course. From the disease models I have seen so far, about 70% of us would eventually contract it. Half of those would have no symptoms or very mild ones, a smaller (but still huge) number would get sick or very sick, 10% might end up in a very overloaded hospital system, and in total about 1-2% of our population would die from complications – partly depending on how quickly we could put up temporary treatment centers to cycle through 30 million people in only a few years. It would feel cruel and chaotic, but in reality we would still not be even approaching the conditions that people in the developing world deal with every day. Our world has always been

[ad_1] As I write this, the biggest story in the entire world is a virus that is making its way around the planet, leaving a trail of sickness and death in its wake, while sending a much bigger shockwave of fear and uncertainty out front. Last week, the US stock market dropped 15% in just a few days, the most shocking correction since the 2008-2009 financial crisis (and the most interesting drop since the founding of this blog in 2011). I am sure you’ve been hearing, reading or watching plenty about it already, but the real question is, what should we do about it? The Scary Side Is this a screenshot from the fear-mongering TV news? Nope, just a moment from a classic zombie movie, although sometimes it is hard to tell the difference. The fear and doubt seems to be what the news stories have been emphasizing. The disease is highly contagious, and very sneaky. Each carrier seems to infect 2-3 additional people, which means exponential growth. And with an observed death rate of about 1% so far (on a limited data set of older people on a cruise ship) it may be several times times more deadly than the common flu. On the news, we see rows of hastily installed hospital beds, people wearing paper face masks even here in our own country, empty supermarket shelves and shuttered factories and public venues. And we are reminded that we ain’t seen nothing yet, because with mild symptoms that can hide for days, most cases are going unreported and the disease is pumping its toxic tentacles through the arteries of our economy, plotting its attack while we are left POWERLESS UNTIL THE RIOTS IN THE STREET START AND PEOPLE ARE SMASHING THROUGH OUR WINDOWS TO TAKE OUR LAST FEW CANS OF BEANS AFTER WE RUN OUT OF AMMO IN OUR SHOTGUNS. Some people are just prone to this type of thinking, and I even have a few in my own life. They have warned me to gather “at least a few months worth” of nonperishable food in my pantry and make sure I have a generator and plenty of fuel, at the very least. And to reconsider my stance of not keeping any guns in the house. The Not-So-Scary Side I went out on the town early on in the scare. The reality was different from the news headlines, although restaurants did close a few weeks after this post was first published. As I write this on March 2nd, there have been about 90,000 confirmed cases of COVID-19. And while the number is still growing rapidly, at the moment it is still a tiny number, about one thousandth of a percent of the world’s population. So even if it multiplies 100-fold, it would be a tenth of one percent. And out of these 90,000 people, about half are already recovered and have moved on with their lives. And the vast majority of the remaining ill, and all those who are so far undetected, and those who are yet to get infected, will also recover. Past and current status of the outbreak. But do we have any idea how bad it will get, before it gets better? As it turns out, we do. But first, some perspective. Here are this year’s numbers for the tried-and-true traditional flu for the 2019 flu season in the US alone (and remember the USA is only four percent of the world population): Wow, 32-45 million cases of the flu already, and tens of thousands of deaths. Even I had no idea it was that serious, and yet the flu is something I don’t even worry about – ever! Even scarier: every year, about 2.8 million people die in the US alone, and a full 70% of these deaths (over two million people per year) are caused by “lifestyle factors”, which to put it plainly means ignoring Mr. Money Mustache’s advice about bikes, barbells and salads every day. So if we start with the common flu, which is surprisingly scary, choosing car-based transportation and TV-based entertainment and consuming processed high-carbohydrate food and soft drinks should feel at least an additional hundred times scarier than that. But do you feel the appropriate ratios of fear in these two situations? And a much smaller amount of fear about the Coronavirus? Probably not, because we humans generally suck at putting numbers, statistics and probabilities into perspective. We Have Been Here Before In my lifetime alone, we have seen the rise and decline of quite a list of worldwide health scares, each of which was covered in the news with similar intensity to what we see today. AIDS, Ebola, SARS, Bird Flu, and the 2009 Swine Flu pandemic, also known as H1N1. That one was particularly serious in retrospect, having infected between 11-21% of the world’s population and taking the lives of about 500,000. Yet here we are, with that fearful event gone from the rearview mirror and a global economy that is far richer than it has ever been. Which is exactly what we will eventually be saying about the present moment in time, from our vantage point in the even more prosperous future. And Math Can Help Create Perspective Contagious diseases don’t just grow forever until everybody is dead. They follow an S-curve, like this recent prediction for Covid-19’s spread. It currently estimates that we may see things flatten out fairly soon, but more importantly it continually updates to new information and makes an educated guess – a great strategy for dealing with unknowns in life in general. One mathematical model that a researcher is updating each day – image source. On the other hand, some estimates are more pessimistic. Disease modelers at Northeastern University used different assumptions in mid-February to predict between 550,000 and 4 million cases in China*, before we reach the flat top of our “S”. That because of extreme quarantines, that turned out to be pessimistic as well and China flattened out well

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[ad_1] The lead story for Thursday’s morning shows: The impending vote to advance Brett Kavanaugh’s nomination to the Supreme Court. [ad_2] Source link

[ad_1] Honouring tradition, French artisans harvest salt from the sea [ad_2] Source link

[ad_1] The bhumi pujan of Ram Mandir is scheduled to be held on Wednesday at Ayodhya. [ad_2] Source link

[ad_1] The Bharatiya Janata Party has accused the Trinamool Congress led by Mamata Banerjee of appeasement politics. [ad_2] Source link

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[ad_1] Each week, Cut the Crap Investing founder Dale Roberts shares financial headlines and offers context for Canadian investors. Earnings to drive Tesla stock into orbit? Tesla has disrupted the entire automotive industry. The global leader in electric vehicles now has greater stock market value than Ford, Chrysler and GM combined. So why is Tesla not in the S&P 500? While Tesla’s growth story has been incredible, the company left investors waiting for those profits to follow. (And we’re not even going to get into its always controversial leader Elon Musk.) Long story short, Tesla is not a S&P 500 constituent because it hasn’t been profitable for long enough. This from Fortune magazine: “To be included in the S&P 500, not only must a company have netted a (GAAP) profit over the past four quarters combined, it must also record positive net income for the most recent quarter. That means, while the electric vehicle maker has reported a profit for the past three quarters in a row, according to the rules, Tesla must also post a profit for the second quarter of 2020, when it reports those financial results.” With one or two additional quarters of profits, Tesla may find a spot in the S&P 500—and that will likely provide another lift for the stock. On Wednesday Tesla reported another profit with Q2 earnings. The company delivered $327 million in GAAP operating income. That now makes four quarters of sequential profitability. That is impressive given that its main factory in Fremont was closed for half of the quarter. Tesla is set to open three new factories on three continents later in the year. Despite headwinds, Tesla plans to deliver over half a million vehicles in 2020. Of course, that’s just a small slice of North American annual auto production, which represented 16.8 million vehicles in 2019. Still, investors continue to be attracted to the electric car growth story. Pass the punch bowl: more economic stimulus Last week’s post looked at the kick off of U.S, earnings. This time around it’s stimulus week, with another €750 billion approved in Europe. From CNN: “The European Commission will borrow the money on financial markets and distribute just under half of it — €390 billion euros ($446 billion)—as grants to the hardest hit EU states, with the rest provided as loans. Leaders also agreed a new EU budget of nearly €1.1 trillion ($1.3 trillion) for 2021-2027, creating combined spending power of about €1.8 trillion ($2 trillion).” The U.S. has another trillion dollars on the table. Pass the punch bowl. More oxygen for the markets. The markets cheered, of course. The “safe” telco sector faces pressure on many fronts The communications and telco sectors are staples for investors—especially for investors who seek very generous dividend income. And the sector is well-situated for the new stay at home economy. After all, we need to stay connected to work and, more than ever, to stay connected with each other. I always joked that folks would choose their wi-fi over food. But the telco subsector certainly faces its challenges. “From a subscriber growth point of view it’s going to be pretty ugly,” Edward Jones analyst Dave Heger said. “All of the major players had most of their doors closed for a good chunk of the quarter.” Desjardins analyst Maher Yaghi predicts a 3.3% year-over-year decline in wireless service revenue for the industry. Average billing per user is expected to decline by 5.8% from the same quarter last year. Amid the stay-at-home economy, with no international travel for business or pleasure, roaming revenues are to be nearly wiped out for all carriers. Customers have been offered some free services and, as per analyst Dave Heger, their stores and kiosks have been closed, leading to less or no subscriber growth. That also leads to fewer device upgrades as well. For Rogers and Bell, media revenue is expected to be hit very hard. There were no live sports to broadcast. We’re also seeing that ripple effect of poor economic conditions with less advertising spend by many companies. Rogers was the first of the Big 3 to report. Here’s the headline news from their earnings report of July 22 (for the three months ended June 30, 2020): “Total revenue decreased by 17% this quarter, largely driven by 13% and 17% decreases in Wireless service and equipment revenue. There was a 50% decline in Media revenue.” Revenue (in millions) 2020 2019 Wireless $1,934 $2,244 Cable 966 997 Media 296 591 _____ ____ Total $3,155 $3,780 Adjusted earnings are down some 48% for the quarter. That is driven largely by the media unit moving to a loss. Moving forward, we might expect slow growth for quite some time. The reports suggest it may take years to get back to pre-pandemic levels of revenue and earnings. Given the uncertainties Rogers, did not provide any forward-looking guidance. I am certainly not hanging up on my telcos. I’d be more than pleased if they could simply maintain their dividends. Rogers reported some positive early signs as stores re-opened. Professional baseball and hockey are set to hit the parks and rinks, which may also give recovery an assist. COVID-19 has small businesses on the ropes The virus has changed the way we live and spend. Many small businesses were forced to close shop as a precaution against the spread of COVID, and the shift in our shopping habits saw us turn away from others. Year over year, spending is down an average of 25% from March to June of 2020. SOURCE: Canadian Federation of Independent Business Only 26% of Canadian small businesses report that it’s business as usual when it comes to sales—this according to a recent (and sobering) report from the Canadian Federation of Independent Business. SOURCE: Canadian Federation of Independent Business Small business is a main driver of the economy. It employs more than half of the private sector workforce and accounts for 52% of private sector GDP. Right now, they could more than use