Paceline Wealth Management, LLC

10/24/2024

In some markets, home affordability has become such a problem that it is affecting the ability of small businesses (think retail, and restaurants) to hire the staff they need.

Recently, I shared my thoughts with Angela Mae from GOBankingRates on these indirect effects of home affordability, and how it is pricing workers out of housing near where they want to work.

How so?

In places with little buildable land (Boston is a good example), the population has grown for decades but newly constructed homes have been sparse, to put it lightly.

Not surprisingly, when land gets really expensive because there isn’t much available, only two types of housing get constructed.

Multi-family, and multi-million-dollar single family homes.

Most people starting a family, or moving upgrading from their first home, are looking for neither.

And recently, housing costs being so high (both for purchase, and rental) are driving away labor.

For most hourly workers, even where hourly wages have risen dramatically during the pandemic, rarely does it make sense to do a long commute.

As a result, many hourly workers are priced out of the nearby areas where they might want to work.

In Massachusetts, this is so pronounced that the state has made zoning law changes to encourage the construction of new, affordable housing.

All this is to say that overpriced housing has secondary effects that impact the local economy in ways that we might not keep front of mind.

Hopefully some of the changes that are taking place, in zoning rules and elsewhere, can alleviate some of this pressure from many families.

10/15/2024

Many people often consider ways to save more money, yet they frequently overlook one of the most painless methods to reduce spending and financial loss: protecting themselves from identity theft.

This financial threat can quietly (or loudly) drain your resources, and it’s crucial to understand how to safeguard your financial life.

To help you avoid becoming a victim of identity theft, read our blog for six EASY, proactive steps you can take.



https://buff.ly/3YejeoW

09/18/2024

It’s FED day, so today we’ll see what they might do as a first step to reducing interest rates.

Even with open communication comes a LOT of ambiguity. How come?

It’s just as important to see what they do to adjust the level of interest rates, as it is why.

This is the largest market participant of all hitting the gas pedal, or the brakes.

So, it’s important to understand the rationale for any action that they take.

Will rates come down because they are highly confident in inflation falling?

Or will rates come down because they have a dimmer view of the economy than we do?

That’s only part of the battle.

There is also the issue of the market response.

And this is where things get REALLY muddy.

It’s not uncommon on the day of a FED meeting to see markets move in the opposite direction that we might expect, even after the news comes out.

Why, you ask?

There are always some amount of people trying to unwind large trades that have gone sour.

And this is a clear reason for things to move in a strange way.

Often, the reaction the day AFTER is more telling of how the market actually feels.

And it’s also about expectations.

Just like when a company beats earnings estimates from wall street analysts and their stock still plunges, this is because the market had a different set of expectations.

And that’s why it’s important to have a clear understanding of where we are with the economy.

But being too nearsighted can cause us to trip over our own feet if we don’t see the bigger picture.

Regardless, for a lot of people with piles of cash sitting in high interest savings accounts, we will get a view as to how long that party may (or may not) continue.

Many people make the mistake of focusing on doing one thing that has worked well recently.

But that can only work well for so long.

That’s why you need to be prepared for a variety of market conditions, not just one.

07/30/2024

Much to the surprise of homebuyers, falling interest rates may be a mixed bag.

Yes, you heard that correctly. How come?

The price of all financial assets and interest rates are closely related.

Excluding other factors, they tend to move in opposite directions.

That’s why I recently spoke to Yaël Bizouati-Kennedy at GOBankingRates about what falling interest rates may mean for homebuyers.

In short, it’s complicated.

It’s “The Good, The Bad, and The Ugly”.

The Good - Assuming prices remained flat, lower mortgage rates mean buyers could purchase more house (i.e. bigger, better), or spend less each month (i.e. lower payment).

The Good – Lower rates also mean cash buyers have less of an advantage over borrowers, as interest makes up a smaller part of the total cost for those seeking a mortgage.

The Bad – Many people carrying a low rate mortgage have been sitting on the sidelines, refusing to switch to higher cost financing (PRO TIP: This isn’t a unique idea, as lower rates is likely to increase buyer competition).

The Ugly – In the absence of a recession, and while demand is strong and inventory limited, it’s possible prices keep rising and buyers remain stretched, AND with fewer opportunities to refinance later.

Here’s an example.

If you had a 30 year mortgage of $1M, with a 7% rate, the payment would be $7,377 per month.

If you had a 30 year mortgage of $1.81M, with a 3% rate, the payment would be the same.

So, assuming the houses were identical, which would I pick?

The first one, with a higher rate, hands down.

Of course, there are no identical comps in real estate, ever.

But some are always relatively close.

If you picked the first you’d have a smaller loan balance to repay, better opportunities to refinance, AND potential appreciation if interest rates declined.

That’s why falling rates is a mixed bag.

If you’re considering a real estate transaction, let’s have a conversation.

Much to the surprise of homebuyers, falling interest rates may be a mixed bag. Yes, you heard that correctly. How come? That’s because the price of all financial assets and interest rates are closely related. Excluding other factors, they tend to move in opposite directions. Keep reading to learn ...

07/25/2024

One of the key aspects of a strong marriage is open communication.

So why is it that many people who DO believe this don’t actually do it?

Talking about personal finances can seem uncomfortable, but it doesn’t have to be.

Many couples openly communicate about all other parts of their relationship, yet they rarely (if ever) discuss what is going on with their money.

How come?

Apparently, they forgot to take the college course on how to discuss money with your partner.

Pro tip: There isn’t one.

Often, financial habits are formed from what we’ve observed of our parents.

And from that, we develop an understanding of how money should be handled (or not).

In cases where people have vastly different financial habits, it’s not much of a mystery to one another.

For these households, the “why” is key to finding a middle ground.

But for most couples there usually isn’t that much of a divide.

The issue for them is that they just don’t talk about it.

Being surrounded on all sides by fog, for long periods of time (or even short), means we don’t know where we are, even when things are going well.

That’s understandably concerning, but it can be fixed easily.

And in the absence of accurate information, people are often governed by their hopes (or fears).

We also know that considering emotions is an important aspect of empathy.

But being driven by them rarely works well, and often has its own set of consequences.

That’s why a skilled third party, like a financial advisor, can be a key resource for building financial trust among partners, and ultimately a strong marriage.

If you’d like to build a stronger relationship with your partner, let’s have a conversation.

07/23/2024

The habits of people who are financially successful can be summarized in a single word.

No, really. I mean it.

So what is it?

Intentional.

I spoke with Gabrielle Olya at GOBankingRates on 6 habits of wealthy individuals, and that’s the best word I can use to describe them.

How so?

They know what they need, they know where they want to go, and they don’t sit still.

That’s especially important when it comes to your finances.

It sounds simple, but we are subject to two big constants when it comes to money.

1. We are always bound by rules related to the tax code.

2. We are always subjected to changing economic conditions.

Always.

That’s why each year there may be (or certainly are) consequences for doing too much of one thing, or not enough of another.

If you donate to charity, be intentional.

If you experience losses in a portfolio, consider if harvesting them makes sense (hint: it depends)

If you have a 401k, take advantage of free money from your employer (we can’t say that often).

Feeling intentional? Let’s have a conversation.

06/05/2024

Right now, many people are fixated on mortgage rates. As a result, many homebuyers are sitting on the sidelines because mortgage rates are high. Read our blog to learn why that's not the best option.



https://buff.ly/4b5BRjj

05/14/2024

After a white-hot IPO market in 2020-2021, many investors found themselves grappling with substantial losses, with stocks plummeting by as much as 50-80% below their IPO price.

There are several reasons for this…

Some companies rode the wave of pandemic-induced lifestyle shifts, and as life began to normalize their outlook began to fade.

Others simply had astronomical valuations, and have returned to (a harsh) reality.

And because investors aren’t looking for more of the same, the IPO market has been largely closed for about two years.

The effects of this have been especially acute at firms that had hoped to achieve a successful exit, along with people in tech and biotech whom I help in managing their stock options.

That’s why I recently spoke to Brian O’Connell at US News and World Report on the current state of the IPO market.

You can read the article in the link below, and if you’ve got any questions on what to do (or not do), let’s have a conversation.



https://buff.ly/4dBXB8K

04/17/2024

Homebuyers face a trifecta of challenging market conditions, including high prices, high mortgage rates, and scarce inventory.

That’s why I wrote a blog covering some of the top reasons why housing market conditions are what they are today.

Hint: It’s a combination of economic, demographic, and (of course) emotional factors.

So to get inside the head of buyers and sellers (and see what motivates each of them), I’ve written this blog as a dialogue between a prospective buyer and seller.

Read my blog in the link below, and if you’re planning to buy a home let’s update your financial plan so you can move quickly when you find the right property.

https://buff.ly/3W8mqme

With the combination of high mortgage rates, sky-high home prices, and scarce inventory, housing market conditions are more challenging than they have been in a long time. That’s why we wrote this blog to understand the motivations of both buyers and sellers in the current market, in the form of a

04/03/2024

Many of the people I help are corporate executives with stock options, but they want to retire as soon as they can, just like anyone else.

That’s why I spoke with Nicole Spector from Yahoo Finance on how to retire early.
Very often people want a “magic number” of how much they need to have saved, but having enough money to last through retirement is highly nuanced.

How come?

This is always about finding balance between maintaining your current lifestyle and retiring as soon as possible.

But, of course, some households prioritize one more than the other.

And if you do retire early, a longer retirement means that more can change in your personal circumstances along the way.

So when you update your financial plan decide what works for you, and don’t wait until the last minute and find out what the result may be.

Because when you reach the point of retirement, you’ll want to have something to look forward to, rather than experience the consequences of the absence of a plan.

You worked hard, and you’ve earned it.

Regardless of whether you’re planning to retire soon, or just want to know how soon you can retire and never go back to work again, contact me to discuss your retirement plan.

Read the full article here:
https://buff.ly/3TMwVJg

Early retirement is a dream of many Americans, but many are inhibited by the concept of costs associated with such a bold move. So how much do you need to retire early? Check Out: Here's the Average...

03/19/2024

We are honored to report that our Founder, Jeremy Bohne, has been recognized as a Five Star Wealth Manager – this distinction is earned by a small fraction of those who are nominated, and even that is a selective group of wealth managers.

Within the industry, Five Star awards have a strong reputation because wealth managers may not apply nor nominate themselves for this recognition, nor do they pay any fees to be considered.

Instead, Five Star has a proprietary research methodology which places consideration upon professional experience, education, and ethics.

That's why we at Paceline have a great deal of gratitude to be recognized for a well-respected professional award.

11/29/2023

Recently, I spoke with Yaёl Bizouati-Kennedy from GoBankingRates about an odd investing habit that most people have.

What’s that?

Many people don’t even know what their 401k is invested in.

It’s not just that they don’t frequently look.

And to many people, that’s like being asked to floss regularly (Hint: they don’t!)

Instead, they don’t even know what investments they own (or what to expect from them).

In some cases, an old employer moved their 401k plan to a new vendor and they don’t even know where it is.

That’s strange because most people work REALLY hard for everything they’ve earned.

So, to leave money unattended, almost abandoned, really, is odd.

The common objection here is “retirement is a long ways off, so it doesn’t matter”.

That’s just not true.

Even if retirement is distant in the future, you’ll want to know that you’re invested in something that works for you.

And what works for you can be very different from coworkers and colleagues.

Remember, investment choices DO change from time to time (as can the 401k vendor), so it’s not uncommon for people to find something they didn’t add to their portfolio, or was (previously) a default option.

And if you changed jobs this year, you’ll want to be sure you didn’t overcontribute.
How come?

Because exceeding annual contribution limits (and doing too much of a good thing) leads to tax penalties.

Don’t let that happen.

If you’ve got questions about a current (or former) 401k, let’s talk!

Read the full article on GoBankingRates here:

Do you really need to analyze your 401(k) holdings?