Recently, researchers at Purdue university tried to figure out what level income is correlated with happiness and emotional well-being. The researchers drew data from a pool of over 1.7 million individual responses about happiness and income from the Gallup Worldwide poll. They found that globally, a familial income of $60,000 - $75,000 is where emotional well-being peaked. In North America, Purdue found that emotional well-being peaked at $65,000 and “a positive life evaluation” peaked at $105,000. These numbers are from 2018, so accounting for inflation, they could be 18% higher ($76,000 for emotional well-being, and $123,900 for life evaluation). The study also tried to find differences in happiness between men and women, theorizing that it would take a higher income threshold for men to be happy because there is typically a stronger income-happiness link in men. However, the study found the opposite correlation, with women requiring a $100,000 income (compared to $90,000 for men) to have a positive life evaluation. Next the researchers tried to find a correlation between level of education and a positive life evaluation. They found that as education level rose there was a higher level of income required to meet positive life evaluations ($70,000 for low education, and $115,000 for high education). They theorized that this was probably because those with higher education expect to earn more and interact with/compare themselves to different groups of people. Gobankingrates.com took Purdue’s data, and adjusted the income levels for each state, finding that Hawaii required the highest level of income for a positive life evaluation ($202,965) and that Mississippi required the lowest ($87,465). My home state of Michigan required an average of $95,865 in income for a positive life evaluation. Story by: Jacob Patterson patte578@msu.edu Sources: https://www.gobankingrates.com/money/wealth/minimum-salary-to-be-happy-state/ Jebb, Andrew & Tay, Louis & Diener, Ed & Oishi, Shigehiro. (2018). Happiness, Income Satiation, and Turning Points Around the World. Nature Human Behavior. 2. 33–38. 10.1038/s41562-017-0277-0.

When you hear the word “investment” you probably think about stocks, but many investors fail to consider bonds. Specifically, Interest Bonds (also known as “I-Bonds”) which are issued by the US Treasury and are practically risk-free. The current real interest rate on I-Bonds is about 48 times higher than the average savings account. With a current real rate of return of 5.54% These bonds are designed to counteract inflation, which is currently at an all-time high. They must be held for a minimum of one year and mature after 5 years. If you cash out the I-Bond before 5 years, you must forfeit the last 3 months of interest. I-Bonds have a few different components: a fixed rate, a semiannual rate (which changes every 6 months), and a holding requirement. Currently, the fixed rate is 0% and has been quite low for the past decade. The current semi-annual rate is 9.62%, and the next semiannual rate will be determined in November by the US Treasury. It is expected to be set at around 6%. If you buy I-Bonds right now, you will receive the 9.62% return for the first six months, but if you wait until the new rate is announced, you will receive a lower return. Another advantage of I-Bonds is that you only need to pay the federal income tax on interest (but not state and local). Example of I-Bond Returns (held for one year): Principal (what you contribute): $1,000 Interest (Fixed Rate): · 0% * $1,000 = $0 Interest (Semiannual): · First six months (at 9.62%): $1000 * 9.62% * (6/12) months = $48.1 · Second six months (estimated at 6%): $1000 * 0.06 * (6/12) months = $30 Total return (if cashed out at 1 year): $48 + $30 - $15 (penalty) = $63 Real Return (After a 12% tax rate): $63 * (88%) = $55.44 (5.54%) In the end, I-Bonds are currently a great way to preserve the value of your savings and are much less risky than the stock market. Sources: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_itaxconsider.htm https://www.forbes.com/advisor/investing/what-are-i-bonds/ https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#fixed https://www.barrons.com/articles/i-bond-new-rates-november-51663365393?siteid=yhoof2 https://finance.yahoo.com/m/6961d201-2834-3623-b205-bc3b9034533f/buy-i-bonds-now-at-9-6-a.html

Image Source: AP News Written by: Abdullah Al-Ejel September 18th, 2022 Recently, a surprising move has been made by Patagonia, an outdoor clothing corporation, and its founder, Yvon Chouinard. After 49 years since the founding of this company, Chouinard, his wife, and their two children have transferred their ownership, worth $3 billion, to a nonprofit organization. Aimed at fighting climate change, Patagonia declared “the earth is now our only shareholder”. Although this may seem like a random, shocking decision, Chouinard has a history of supporting the environment, sharing 1% of sales profits every year since 1985 for the environment, and donating millions. “Chouinard and his family transferred their voting stock to the newly established Patagonia Purpose Trust, which will ensure that Patagonia maintains its commitment to corporate responsibility and donating its profits. The rest of the company, about 98% of its shares, was donated to the Holdfast Collective, a nonprofit organization that will receive all of the company’s profits, roughly $100 million a year, and use them to fight climate change.” (LA Times) However, skeptics have questioned the motives behind this decision. Transferring this ownership will grant Chouinard and his family a $700 million tax break, causing people to question whether this is entirely in good faith or if the intentions were for financial reasons (Bloomberg). Additionally, this avoids the US estate and gift tax. This could be for tax write-offs, but Patagonia’s charitable history says otherwise. This is a huge step in climate activism, hopefully setting new standards and expectations for companies around the world. It will be interesting to see if bigger companies follow suit. And if they do, would the market and their shareholders respond in a positive or negative manner? Only time will tell.

Image: https://thehill.com/opinion/finance/3572084-is-a-recession-inevitable/ Written by: Brady LaRoe September 18th, 2022 Markets dropped on Tuesday following the August Consumer Price Index numbers coming out, which showed that inflation still remains high across most sectors of the economy. The report found that prices were about 8.3% higher than in August of 2021. So while inflation is decreasing compared to prior months, it still remains steadily high. The news triggered a mass selloff and led to the Dow Jones Index dropping 1,300 points, the worst since June of 2020. The Dow ended the day around 4% lower than when it opened. Prices for items like food, housing, and medical care were the main drivers of inflation, while the decrease in gas prices and used car prices were what led to the overall lower inflation rates. A gallon of gas costs about $3.71 nationally as of now, coming off of its high of $5 a gallon back in June. The news comes as the federal reserve has been increasing interest rates steadily to their highest point in the past decade in order to counter inflation. Recently the head of the federal reserve Jerome Powell came out saying that there will continue to be “pain” from inflation ahead. Persistent inflation and the decline in market values reflects the continuing market sentiment of a possible recession, though it still remains up to debate among economists, specifically on how severe it could be. One recent July Bloomberg survey of economists showed that 50% thought there would be a recession within a year, an increase up from 30% in June. Whatever happens in the future, it seems that, at least for now, prices will continue to go up.

Image Source: Washington Post Written by: Abdullah Al-Ejel September 12th, 2022 Despite 2 years of combating Covid-19 and creating a successful vaccine, the negative effects on the technology industry continue to linger, specifically in the production of chips. Chip demand from automotive companies tanking due to lockdowns, the US-China ‘tech war’, rising demands for personal devices & electronics, labor shortages, and production decline are some of the many factors causing a global chip shortage. A large source of chip production comes from China, so after increased regulations and tariffs on China, and with China heavily investing into their own tech industry, concerns over China’s aim to become less reliant on the US have grow. To counteract chip production decline and China’s goal for technology independence, Congress passed the “CHIPS Act”, a bill aimed at semiconductor manufacturing grants, research investments, and an investment tax credit for chip manufacturing. Specifically, the bill will provide billions of dollars across many years to US-based, semiconductor manufacturers. This bill will be a huge step in reducing America’s reliance on China/Asian manufacturers, hoping to decrease the negative consequences of potential future trade conflicts. As part of the CHIPS act, Intel could receive $10 to $15 billion in government subsidies over the next 5 years and will utilize these subsidies to develop a new manufacturing plant in Ohio, which celebrated its groundbreaking on September 9. Projected to open in 2025, not only will this development work towards increasing chip supply, but will also bring new jobs to Ohio. “The company has said that the project could take more than 7,000 workers to build the facility that is expected to house two separate factories and, once finished, employ 3,000 workers.” (The Verge) Countries around the globe aim to break out of the chip shortage by the end of this year, but it's projected to continue through 2023, possibly even 2024 (CNBC). Hopefully, the CHIPS Act will help end the shortage sooner than expected. Links: https://www.reuters.com/technology/intel-plans-new-chip-manufacturing-site-ohio-report-2022-01-21/

Mortgage rates have hit an all-time this week, reaching 5.89%. According to an article by CNN Business titled, “Mortgage rates reach highest levels since 2008”, journalist Anna Bahney states “The 30-year fixed-rate mortgage averaged 5.89% in the week ending September 8, up from 5.66% the week before, according to Freddie Mac. That is significantly higher than this time last year when it was 2.88%” (Bahney 2). This rising rate is directly associated with the rate hikes that the Federal Reserve has recently implemented. The rise in mortgage rates have added to the increasing lists of burdens that lower and middle class families have faced over the past few years. A recent meeting with the Federal Reserve Chairmen hints that these rates will not be dropping anytime soon, if not increase. These rates have hindered many individuals from being able to purchase homes, but with workers returning to work after COVID, there will be an increasingly active housing market. With the threat of COVID slowly subsiding, the normality of everyday living before the virus is returning and rates should even out over time. Links Information Source - https://www.cnn.com/2022/09/08/homes/mortgage-rates-september-8/index.html

According to the U.S. Census Bureau’s Annual retirement survey, Americans are retiring later than in previous years. The average age of retirement in 2021 was 65 for men, and 62 for women, up from 62 and 59 respectively in 1992. The state with the earliest average retirement age is Alaska (61), and the latest states are Massachusetts, South Dakota, and Hawaii (all 66). This is a very important financial/demographic trend. According to Newsweek, three main reasons for later retirement, are changes to social security payouts, longer life expectancy, and working in flexible jobs. Longer Life Expectancy As Americans live longer, they may delay their retirement because they know that they will need to have more money saved so that they don’t run out of funds down the line. Changes to Social Security Payouts Depending on their year of birth, current seniors may only be eligible for partial retirement benefits until the age of 67, up from the former full-benefit age of 62. Working Flexible Jobs With the current labor market, and rising wages for both hourly jobs and salaried, white-collar roles, it is more lucrative for seniors to work longer. Some older Americans could also work a gig job, such as Uber, Doordash, or Shipt, which offers flexibility and isn’t physically demanding. Two other factors that must be considered are inflation and the desire to work. With inflation eroding the value of the dollar, seniors may need to work longer to ensure that their money will last through retirement. They may also consider locking some of their assets into investments that aren’t risky, and that counter inflation, such as I-Bonds (with a current 6-month yield of 9.62%). Some older Americans may also wish to continue working later in their lives because they enjoy their jobs or lose a sense of purpose without a job. In conclusion, Americans will have to consider inflation, life expectancy, their desire to work and work flexibility when choosing when to retire. Written by Jacob Patterson Sources: https://www.forbes.com/advisor/retirement/average-retirement-age/ https://www.newsweek.com/reasons-americans-retiring-later-gallup-survey-1727583 https://money.yahoo.com/many-americans-want-to-work-longer-than-they-actually-do-200858544.html

Image Source: cnbc.com Written by: Ethan Price September 6th, 2022 Last Wednesday, on August 31st, President Biden announced a plan to grant some sort of forgiveness to students who have taken out federal loans to aid in their payment for university. The plan has not been put into place just yet and most likely will not take effect until January of 2023, so what should students know in the meantime? First and foremost, Biden has decided to extend the COVID-19 Emergency Relief and Student Aid initiative through the end of the calendar year. Automatic loan payments have been paused since March of 2020, with lenders being allowed to collect absolutely zero interest from students on their loans. To qualify for loan forgiveness, students must be able to check a few boxes. Students must have taken out their loans before June 30th, 2022. "Borrowers with federal student-loan debt are eligible for up to $10,000 in relief if they earn less than $125,000 a year, or under $250,000 a year for couples (WSJ)." Income will be checked for either 2020 or 2021. Additionally, if a student has received any Pell Grants, they are eligible for $20,000 in relief. In most states, including Michigan, loan forgiveness is tax exempt. Most loans issued by the William D. Ford Federal Direct Loan Program should qualify. This includes "Direct Stafford Loans, and all Direct subsidized and unsubsidized federal student loans" as well as Parent Plus and Grad Loans (CNBC). For students with less than $10,000 to pay in Federal Loans, congratulations, as you are now debt free. On the flip side, students who have paid off their student loans as of recent will not be reimbursed. For students who believe they qualify for loan forgiveness, sit tight and wait for your lender to contact you with more information in the coming months.

Image Source: worldatlas.com Written by: Ethan Price March 27th, 2022 With the war currently occurring in Ukraine, many industries here in the US have been negatively affected including both energy (ie. gasoline) and tech. One industry that many may not have expected to be impacted is aluminum production. In the past, Russia has supplied America with 6% of the countries raw aluminum. Combining this with the fact that America's aluminum consumption rose by 11% last year, bouncing back from low production numbers in 2020 due to the worldwide Covid-19 pandemic, companies that utilize aluminum are finding it difficult to obtain a sufficient amount of it in order keep up with demand for their products (WSJ). This shortage has driven the price of aluminum up significantly. Due to the shortage, aluminum manufactures have doubled down on the recycling of aluminum to meet demand. To combat the shortage, many major aluminum companies have began to construct scrap smelting plants, where massive amounts of scrap can be smelted using, at its height, 90% less energy than that required to smelt raw aluminum. For example, Novelis, a subsidiary of Hindalco Industries, has began production of a plant "capable of producing 240,000 metric tons of aluminum ingots from scrap". Additionally, Novelis and other companies of its sort have led the charge in obtaining more aluminum through the mass recycling of material from car manufacturers (WSJ). As the year progresses, demand for aluminum on both the end of the producer and consumer are sure to increase. However, this shortage could ultimately result in the US becoming self-sufficient in aluminum production as well as more energetically conscious in the years to come.

Eli Richardson March 27, 2022 Volkswagen has been able to capitalize over the years from globalization. This ability has been hurt by recent global events such as the covid-19 pandemic, semiconductor shortages, and the Russian invasion of Ukraine. Now VW is looking to make moves to secure access to components and raw materials as well as make production less dependent on suppliers across the globe. Much of VW's business over the years has been international. This focus has allowed Volkswagen to become the second-largest car manufacturer in the world. As recent events have hindered VW's production, which fell 18% from 2020 to 2021, the fragility of global supply chains was brought to light. To account for VW is now prioritizing uninterrupted part supply over seeking the cheapest possible parts. The rationale behind this decision as stated by Murat Askel, VW's purchasing chief, is "my priority is securing supply. Without components, you can't build cars,". In addition to reinforcing supply, VW is also putting more investment into the European market and American market to account for its growing dependence on the Chinese market. VW's goal is to increase investment in electric vehicles in the United States in order to at least double its share of the US market. Volkswagen is trying to adapt to the current realities of the world and continue the success the company has had. Although VW sees Europe and the United States as keys to its future it also wants to continue the success it currently has in China. As the world changes it is important for VW to adapt to it. Source: (The Wall Street Journal: "Volkswagen Prepares for a Deglobalized World" by William Boston)

For college students and young professionals looking to leave an unforgettable impact on others, the financial planning and wealth management industry currently presents an unprecedented opportunity. In a U.S. News article written by Julie Pinkerton, a J.D. Power study found that “the average age of a financial advisor is about 55 years old, with about one-fifth of industry professionals being 65 or older. Over the next 10 years, Cerulli Associates estimates that more than 111,500 advisors will retire, which represents more than one-third of the workforce and assets” (Pinkerton). From a succession planning perspective, this may present a challenge as advisors look to transition their practice to the next generation of advisors. While the wealth management industry requires a substantial amount of quantitative analysis and thought, it is also grounded in the relationships that are built, maintained, and evolved over time. The goal of succession planning for a wealth management firm can be seen as two-fold: a seamless passing of a long-term relationship to a younger advisor in addition to an easy transition into retirement for the existing advisor. Philip Palaveev, founder and CEO of The Ensemble Practice LLC, recently spoke at the annual Advisor Growth Summit regarding this topic. Talking specifically about independent advisory firms, Palaveev said, “As we double in size, we need people who are capable of taking care of clients, capable of creating systematic growth, capable of providing management and leadership, people who are capable of being mindful, thoughtful investors in the firm” (Reed). This “passing of the torch” may seem attainable and easy to plan for on paper, but trying to execute it is a whole different animal given the relationship-centric foundation and growth of the industry over the past 20 or so years. Paleveev would go on to say, “That path should start with employees becoming good technical advisors, then good relationship managers, then good lead advisors with some control, and finally good business developers and business managers” (Reed). For the younger generation of advisors just beginning their careers, there are important considerations and mindsets to be had when becoming grounded with a growing firm. This includes an open mind to learning, developing both personal and technical skills, and becoming a great teammate (Reed). Unbeknownst to many high school and college students thinking about entering the financial services industry because their Robinhood account rate of return during the COVID-19 pandemic was Buffett’esk, the most important skills to be successful involve relationships, not numbers. Relationships may begin with a cup of coffee or a bump of the shoulders at the train station, but they take time to develop. It’s a leap of faith when passing longstanding relationships to the next generation, “it’s a leap of faith from the perspective of the owners and founders of advisory firms who have to believe this is going to work out. They have to believe that this next group of people is going to be just as talented, just as dedicated, just as ambitious and just as capable as they have been” (Reed). References: Reed, J. L. (2022, March 24). Advisors wait too long to focus on succession plans. Financial Advisor. Retrieved March 27, 2022, from https://www.fa-mag.com/news/advisors-wait-too-long-to-focus-on-g2--expert-says-66995.html?section=43 Pinkerton, J. (2021, November 16). The Risks of an Aging Financial Advising Industry. U.S. News. Retrieved March 27, 2022, from https://money.usnews.com/financial-advisors/articles/ramifications-of-aging-on-the-client-and-advisor#:~:text=According%20to%20a%202019%20J.D.,professionals%20being%2065%20or%20older.

Image Source: The Desert Sun By: Michael Argenta March 27, 2022 Neil Armstrong takes “one small step for man, one giant leap for mankind.” Woodstock attracts over 350,000 people. The Beatles record their final album. The year was 1969. Last week, Americans saw record low unemployment statistics for the first time in 53 years. With only 187,000 citizens filing for unemployment, 2022 marked the first occasion fewer Americans relied on benefits since 1969. However, while this appears as good news, many people are worried about other comparisons to the 1970s. Just two years removed from the start of the COVID-19 pandemic, these unemployment numbers are nothing short of remarkable. At the onset of Americans seeking benefits, claims reached record highs exceeding 6 million. Now, only 187,000 people rely on benefits to help them stay afloat. This bounce-back was, of course, fueled by a large government stimulus package but continues to surprise economists. As job growth increased by 5.7% last year: the unemployment rate was just 3.8%. However, as unemployment hits lows, inflation continues to hit new highs. Prices are increasing at a pace not seen in 40 years. Relating to the 1970s, many people are worried about “stagflation” - when growth slowed even as price increases spiraled. Some analysts are even saying low unemployment claims suggest that the American economy is heading towards a recession: just like in 1969. Others claim the US economy is heading towards a repeat of the late 1940s and early 1950s. Either way, economists are pessimistic about this news because of historical trends. It will be interesting to see if any are correct or if new unseen consequences arise. Overall, the lowest benefit requests since 1969 should excite Americans. Just two years ago, millions relied on unemployment, but look at the difference. As more people find good jobs or those with higher wages, more are employed. Don’t read too much into the past. Even if history repeats itself, America will continue to adapt.