May, 2020 | Live a Life By Design

The Millennial Perspective: My House, My Rules

Posted on May 29, 2020May 13, 2021 by Ashley Stieb

Picture it: a nice starter home with a yard for children and pets to run and play. A place for you to gather with family and friends. A place to call your own. Many millennials dream of buying and owning a home, but how many actually do? According to Urban Wire, the most recent study on this was conducted in 2015 when the youngest millennials were 18 years old and the oldest were 34. At that time, only 37% of millennials were home owners. Now, five years later in the year 2020 I am sure this number has grown considering most millennials are past college age and heading towards their 30s and 40s. However, I decided to conduct a study of my own and ask my fellow millennials about their home buying experience, if any.

I asked my friends a series of questions:

Do they own a home or have they ever owned a home?
If so, what was their buying process like?
If not, what is holding them back?

Several people that responded do, indeed, currently own a home and a few of the older millennials are even in their second home. Some of them qualified for special loans which allowed them to make the purchase without a down payment. Others saved just about all they could manage to make their dream come true even if it took several years and some had help from their families. Those that do not and have never owned a home gave a good list of reasons that seem to be a general consensus for a lot of millennials. From that list, several stated that they haven’t purchased a home yet because houses are too expensive. They would rather save until they find a home that they love at a price point that works for them than buy a house at what they could afford, but want to upgrade it or even buy a newer home within a few years. Some also stated that they don’t know where they want to end up, they aren’t married and don’t have kids yet and want to make sure that when and where they buy is just right.

Being a millennial comes with a lot of uncertainties. A lot of us are in the turning point of our lives where we transition from college age to being a “real adult.” We want to make plans and live a life that we deserve, but at the end of the day, life gets more and more expensive and the job market and average income can’t compete. Now we have lived through and will certainly feel the repercussions of two financial crises for many years to come. However, all this being said, the current trends for the housing market predict that another housing market crash may be imminent, but it could open up the opportunity for many people in my generation to finally be able to say those famous words that our parents shared with us many times, “my house, my rules,” so long as the job market and income allows.

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Planning for the Future

Posted on May 22, 2020May 22, 2020 by Jimmy J. Williams, CPA/PFS, CFP®

“There is nothing certain in life but death and taxes.” This is my paraphrase of Benjamin Franklin’s famous quote to Jean-Baptiste Leroy in 1789. Imagine the tax rates imposed by the King of England in the days of the colonies and those assessed by our nation, The United States of America, to fund its services today. Our government budget continues to swell with the costs of programs administered by the U.S. Government to serve our citizens and their needs caused by an international pandemic.

A review of the President’s Budget for Fiscal Year 2021 is typically analyzed by those of us in the financial planning profession to determine where priorities will lie for the administration and Congress. Our government is bigger than any corporation I can think of in sheer number of employees or economic impact on the world. Now, this article is not judging the government’s function or disfunction. The purpose of this article is to provide you an understanding of the enormity of our government and comparison of the type of budgeting to that of a typical family.

One of the primary areas addressed by this budget is the outlook or vision of the administration. Like our government, we individuals should have a written plan for the future. Unlike our government, we are not allowed to print money to fund our own operations. (Well, we can’t print money legally.) You and I must work within the means we generate through our efforts or investments to provide for our housing, food, healthcare and other necessities of life. What has happened to many Americans is a microcosm of what is happening in our government services – borrowing to continue operations in the manner we wish versus that we can afford.

As of September, 2019, the average family in America owed credit card debt in the amount of $6,849 (according to a December 2, 2019 article by Erin El Issa published in Nerdwallet). The cause of most credit card debt is a lack of budgeting and controlled spending. Too often we seek immediate gratification instead of saving for a particular object. By disciplining yourself to only seek debt for the necessities in life such as a home or automobile, you may avoid a tremendous amount of hardship for your family’s cash flow burden.

The U.S. Government currently owes a debt balance, and it changes by the second, of more than $24,000,000,000,000. How do we pay for a debt this large? First, we must think about revenues. Currently, the U.S. Marginal Income Tax Rates for individuals consists of rates ranging from 10% to 37%. Our system of taxation is known as a progressive tax system – the more you earn in taxable income the higher your marginal tax rate. Sounds simple, right?

Based on a recent report, in 2018 the U.S. Government relied on individual income taxes as the primary source of tax revenue. Our citizens contributed 40.72% of the total revenue needed to support services! Let’s take a quiz. If the costs of government functions and services are rising, what is the most obvious form of taxation that will eventually need to rise to pay for the services in a balanced budget? You guessed correctly if you said “personal income taxes”.

The goal of each family should be to plan for their future, care for the members of the family and serve their fellow man. Our country is the greatest on the planet. We could help sustain our greatness for all mankind by exercising a few simple disciplines in our spending and plan for the future. Another of my favorite quotes attributed to Benjamin Franklin will guide us to a better future – “A penny saved is a penny earned.”

Monday is a holiday when we recognize those who served our country – our servicemen and servicewomen of the armed forces. Those celebrated this Memorial Day made the ultimate sacrifice for our freedoms and liberties we now enjoy in the United States of America. To these celebrated heroes I simply, reverently and respectfully, say, “Thank you”.

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A Brighter Day Is Coming

Posted on May 15, 2020May 14, 2020 by Jimmy J. Williams, CPA/PFS, CFP®

The pandemic initiated a change in our community that has brought momentous and abrupt disruption to life as we know, or knew, it. I can remember the simple task of driving to one of my favorite restaurants, sitting down and enjoying a great meal. I fondly recall the waitstaff and their smiles while they served me multiple glasses of sweet tea… Oh! I think I was dreaming just now.

Good news for everyone reading this column – life will return to normal soon. But what does “normal” mean? This simple term once understood by all of us will be redefined in the near future. As the government mandates guidelines to safely open our communities, states and nation, there comes to mind the one variable that can’t, or won’t, be controlled by an edict – our citizens. Will we have the confidence to sit in a crowded restaurant or enjoy a theatre without the somber thought of illness lurking in our memory? I say YES!

One of the most important lessons to learn about capitalism is that this form of an economy works when transactions are being negotiated and labor performed. While businesses continue to define their approach to safely returning to their pre-pandemic routines and functions, a product must be created and sold to a buyer that is willing to part with an asset, their hard-earned cash.

I predict, with great confidence, that our country will return to its former greatness as the world’s best economy. The question as to how long this process will take is the difficult one. To make progress in opening our economy you should remember the traits of our grand tradition. Think about the five characteristics of capitalism: 1) economic freedom; 2) voluntary exchange; 3) private property rights; 4) profit motive and 5) competition.

Economic freedom is the primary driver of entrepreneurism. We have choices in how we wish to live our lives. “The harder I work, the luckier I get” is often quoted as the basis for the American Dream. Each of us can control our destiny but it takes hard work, dedication and a willingness to accept risk. Currently, our economy is suffering due to a lack of activity caused by an invisible creation of risk. However, we will return to a vibrant economy because of the love of freedom by men like Alexander Graham Bell who desired to speak with others across miles of terrain, Thomas Edison whose inquisitive mind desiderated to light the world with the flip of a switch and Benjamin Franklin who curiously sought to understand electricity and its effects on tangible objects. These men were considered pioneers of their day. Laughed at and mocked by the citizenry because of their unique and unorthodox attempts to conquer unknown areas of life only to see themselves ordained as great men of invention when the world gasped at the benefits afforded our civilization by their creations.

The characteristic of our capitalistic economy that has been the basis for commerce, since the days of pharaoh, is profit motive. In marketplaces across the globe, people gathered to exchange goods and services for the sole purpose of creating income and lifestyle for themselves. In the modern era we continue to seek a profit on the goods we create and sell while retaining the control of our own destinies. It is important to note that our economy is based on this premise and this one characteristic will be the hinge in which our country swings forward from this pandemic.

To truly bring our economy back to the state we appreciated before COVID-19, we must embrace competition. In our state, our primary source of revenues was gross production taxes from oil and gas drilling activities. We are a resilient people that have experienced this type of contraction in our state economy many times before. To revitalize our economy, we must initiate action and take ourselves to the marketplace. I am not telling you to spend your money, I am asking you to invest in the future of our state. Not only do we require investment from private individuals to resuscitate our economy, we must establish an efficient transaction base for the free exchange of ideas and goods. Today is the day to bring a concerted effort of our citizens to the capitalistic economy. To do so in a safe, yet productive, manner would be a catalyst to bringing back the days we so flippantly took for granted prior to the pandemic. Just look overhead, the sun is rising on a new day in the land of paradise that I affectionately refer to as the “Greatest State in the Union”, my home, Oklahoma!

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The Millennial Perspective: Handling the Weight of Stress

Posted on May 1, 2020May 13, 2021 by Ashley Stieb

Stress. What does this word mean to a millennial? A lot of the time it could be the large sum of student loan debt hanging over our head, saving for our future, finishing a degree, the list goes on. What it really feels like to most of us is a weight on our shoulders that can be hard to shake off. So, how do we handle this weight when it becomes too heavy to bear? As it turns out, there are many ways the millennial generation copes with stress and anxiety.

I, personally, have my own methods of coping with high amounts of stress and anxiety which usually involve eating a lot of snacks, but I wanted to hear the input of my fellow millennials. Since this could be a more sensitive subject, for those who struggle with depression and anxiety, I asked some of my close friends for their input. Many of them claimed playing video games and binge-watching shows, or movies, were a good way to wind down from stress. However, in those higher stress moments where the world feels like it is closing in on them, many turn to proven strategies to help center their mind. In light of recent events caused by COVID-19, finding peace in a disrupted world has been something a lot of us have had to work on. This could be focusing on that single task to distract the mind, such as cleaning, shopping or reading. Many said they make lists of the things they can control to help them get a better handle on what is going on around them. Others seek help from a therapist to talk through their stress. Some said they just cry it out rather than letting their stress build up inside to a point beyond control. Meditation was another tool many used to help ease their mind of stress and anxiety or read something that is similar to a mantra. The last two strategies are interesting and something that I think may be worth trying. Centering your mind to gain perspective is a highly successful strategy for some individuals.

Because of findings, I pursued a lengthy discussion on meditation with a friend. She mentioned that she uses an app called, “Calm”. This app provides guided meditations as well as tips and tricks about how to incorporate meditation into your daily routine. There are similar apps out there as well. Taking time to meditate, in some capacity, on a daily basis can help start and end the day on a positive note. Meditation can also make you more aware that although anxiety and stress are present, our reactions to it may be controllable. People experience a variety of reactions to stress. To put it simply, some people react to situations better than others by approaching stressful situations and anxiety with a different mentality.

There is a concept called “spheres of influence” that is present in some stress-management methods. To briefly describe this concept, there are things you have absolute control over which is called, “The Self”. Things you have limited control over called “Influence”. Lastly, the things you have no control over are grouped as “Everything Else”.

To place this concept in perspective during the COVID-19 pandemic, consider the following:

Self: We as individuals have control over what we do during the pandemic. We can decide to go to the store, or do delivery or pick-up, decide to go to restaurants, decide to exercise, etc. Factors that we can control, we should. We can decrease our stress levels by ensuring we are utilizing good behaviors to keep us as safe as possible.
Influence: The next sphere contains life areas over which we have some or limited control. This may include family members’ decisions during the pandemic. Yes, you can give advice but you cannot decide for them what they can do. Therefore, it is not helpful to devote time to these activities that cause you stress.
Everything Else: The final area. This includes the governmental decisions affecting health, safety and the economy. We have very little direct control over these areas on a global basis. It is best not to fixate on these areas of life because it lowers our feeling of comfort and increases our stress level. Focus on what you can affect, not what you can’t.

No matter the method of controlling your stress levels, whether millennial or older, it is important to keep the majority of your focus on yourself and those things you can control. Expend very little, if any, energy on the things you cannot.