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  • Writer's pictureJulie Skye

This 4th Week of September Thoughts

Sustainable Advisors Alliance (SAA) was founded on sustainable, impact investing: Environmental, Social, and Governance (ESG) metrics. We are a Fiduciary, all day, every day? Why does this matter to you? See the next page… Follow our blog here.

Fed Fund Watch:

10-Year Note: 3.42% last week, 3.54% this week. Do NOT overly worry that your current bonds have gone down in value: now is the time to plan our next bonds.

Wonder Why we make such a big deal about Citrix Sharefile? Morgan Stanley will pay $35 million to settle SEC allegations that one of its units failed to secure the personal data of millions of customers.

How long will it take? Fed rate increases take 9-12 months to show up in the economy: this is a process that can’t be fixed in 1 or 2 quarters. Recession watch: Summer 2023?

Why is the R-Word so scary to the market?

Financial Planning Rules of Thumb that just don’t work any more…lets abandon them.

Have some of the best-known rules of thumb in personal finance outlived their usefulness? Think about what you are doing right now, and see if these make sense for you, or if we need to write your OWN rules.

  • Housing: The 30% Rule says that rent should eat up no more than 30% of your before tax monthly income. With the average national rent at a record of $2,032, that means you’d need to earn nearly $6,800 a month to meet this rule. Housing can easily take up more than 30% of one’s income now, especially in expensive cities.

  • Budgeting: 50/30/20 suggests that about half your income should go to “must-have” monthly expenses like groceries, transportation and housing. Thirty percent gets earmarked toward “wants” and 20% goes to savings. But then, what do you do with health insurance and student loan payments that can eat up more of the average person’s paycheck today? As you worth through this spending plan process, break down your spending into categories, starting with housing, transportation, food, personal care, entertainment and savings and then add in travel and other goals. As we put all of this into Right Capital, you will most likely feel very reassured that this crummy year in the market is not going to impact your lifestyle and it will feel very empowering.

  • Investing: a 60/40 Portfolio split between stocks and bonds has long been considered a classic portfolio mix. Stocks provide growth and bonds provide income and some stability by zigging when stocks zag, but that hasn’t worked in 2022. Amid the highest inflation in 40 years and interest rate hikes by the FED, nothing has “worked.” Every benchmark that tracks the 60/40 strategy’s performance has posted its worst first half since 1988 and is down 13% this year. Regardless of your asset mix, the key will be to keep two - five years’ worth of expenses in cash and bonds. At the end of the day, it is really your risk capacity that determines the right mix of stocks and bonds.

  • Retirement: a 4% Withdrawal rate from savings (adjusted for inflation every year) has worked most of the time for most people: over 30 years, most portfolios were not depleted. Today, though, I am seeing 2.5% or 3% is more often recommended, due to the lower returns on bonds. An alternative? “Dynamic” withdrawals”, where after a year of bad returns you take out less. So, in a good year, take out more: one year it is a month in Spain, and another, it is a week at the Lake of the Ozarks.

Rules of thumb can be great starting points but we all know rules are made to be broken. Your plan is just that…YOUR plan. I’ll attach my Spending Plan Worksheet to this week’s Thoughts so we can work on your financial plan.

Amazon is expanding its renewable energy portfolio globally with an additional 2.7 gigawatts (GW) of clean energy capacity across 71 new renewable energy projects. I don’t know how much a gigawatt is, but it sounds like a lot.

  • This includes the first renewable energy project in South America—a solar farm in Brazil—and its first solar farms in India and Poland.

  • The global renewable energy portfolio will generate 50,000 gigawatt hours (GWh) of clean energy, which is the equivalent to the electricity needed to power 4.6 MILLION U.S. homes each year.

  • Amazon is bringing new wind and solar projects online to power our offices, fulfillment centers, data centers, and stores, and are on a path to reach 100% renewable energy across the entire business by 2025.

  • Around the world, countries are looking to accelerate the transition to a clean energy economy, and continued investments like Amazon is accelerating their journey to mitigate the impacts of climate change.

  • The company now has a total of 379 renewable energy projects across 21 countries, including 154 wind and solar farms and 225 rooftop solar projects, representing 18.5 GW of renewable energy capacity.

  • The company had reached 85% renewable energy across its business by the end of 2021.

Why does this matter to you? As we find the right time to start adding stocks to your portfolio, we will be looking at the many companies, industries and technologies that will be a core part of your portfolio.

If you have spoken with me on a frazzled day when things were not going smoothly with Schwab, you will know how much Schwab’s redesign of every aspect of how I work with them, and what YOU see at, matters.

Why does it matter for you? 😊 Right now, I cannot tell you what to expect when I start working on new paperwork for you, or worse yet, a more complicated set of transactions, like settling an estate. I don’t know where the DocuSign will go after I send it…how you will access it, and what you need to do if you just can’t find the document to sign. As the Schwab Renovation proceeds, I’ll be able to securely send you DocuSigns for documents I need you to sign. What I want most of all…is for you to easily be able to log onto on your phone, find your document and click through it in just a minute.

Required Disclosures: Always read the fine print! This content reflects the opinions of Julie Skye and is subject to change without notice. This content is for informational and entertainment purposes, and it is not a recommendation regarding the purchase or sale of any security. There is no guarantee that any statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no assurance any investment plan or strategy will be successful.

Julie is an Investment Advisor Representative of Sustainable Advisors Alliance, LLC (SAA, LLC): Advisory services are provided by SAA, LLC.

Registration with the SEC does not imply a certain level of skill or training.

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