AWM Financial Newsletter

AWM Financial Newsletter Financial Clarity for the Next Generation. Practical money guidance for students and young adults navigating saving, investing, and long-term wealth building.

To simplify the whole idea of money and to provide necessary tools and resources for success.

06/03/2026

Investing is like learning a new language, with each product serving different financial goals. Choosing individual stocks puts you in control but also exposes you to the risk of losing your investment if a company falters. As a shareholder, gains can be significant—such as Apple stock's 1,300% return since 2016—but results require weathering volatility, including sharp drops during trade disputes and tariff threats.

06/02/2026

SVB collapsed quickly in early 2023 due to oversight failures and poor planning. Economic contraction, rising rates, and inflation led to significant fund withdrawals, forcing SVB to sell bonds at a loss and triggering panic after a major share drop and credit downgrade. Regulators intervened as depositors rushed to withdraw funds, resulting in the second-largest U.S. bank failure. The FDIC insured deposits up to $250,000, but larger accounts remained at risk, sparking concerns of contagion as other banks like Signature also failed.

06/01/2026

COVID-19 led the Fed to inject over $4 trillion into the economy, causing a surge in demand for Treasury securities. The US offers bonds, notes, and bills; bond prices fall when yields rise. Tech companies prospered during the pandemic, raising SVB’s deposits by 86%. As inflation spiked in 2021 due to labor shortages and supply issues, the Fed increased rates, exposing SVB’s liquidity problems because of heavy investments in low-yield, long-term bonds.

05/29/2026

Silicon Valley Bank began with a poker game in 1982, founded by Bill Biggerstaff and Robert Medearis to serve startups. Publicly listed in 1988, the bank expanded across the country and abroad despite challenges like the Dot-com crash and the 2008 crisis. Its growth was driven by acquisitions and new branches, attracting top tech founders. In 2019, following a Federal Reserve warning, vulnerabilities emerged, setting the stage for further issues during COVID-19.

05/26/2026

SPYI and QQQI are covered call ETFs that provide steady monthly income from the S&P 500 and Nasdaq 100, with annual yields of about 12% and 14% (roughly 1% monthly). Both sell slightly out-of-the-money index calls, allowing limited upside and regular option premiums, especially in volatile markets. NEOS uses 1256 contracts for tax efficiency via return of capital distributions. These funds perform best in flat or gently rising markets but may underperform in strong rallies or declines, trading higher income for capped gains.

05/22/2026

North Carolina’s minimum wage has stayed at $7.25 since 2008, lagging behind rising living costs and most low-wage jobs—my food runner job pays $10/hour with tips. While most workers now make above minimum due to market forces, some remain vulnerable to unfair pay. Raising the minimum wage can help prevent exploitation but might increase overall prices. Ideally, it should be regularly updated for inflation to ensure fair compensation; adjusted for inflation, the current rate would be $10.37, highlighting the need for routine increases that reflect economic conditions.

05/21/2026

Investing builds wealth over time by putting money to work for you, not just relying on daily earnings. Compound interest lets your contributions grow exponentially; for example, $2,000 plus $100 monthly at a 10% annual return can become $620,000 in 40 years. Index funds like the S&P 500, which diversify across hundreds of companies, help reduce risk and have averaged 10% returns over decades. Starting early and sticking to consistent investing is the best way to reach goals such as college, retirement, or buying a home.

05/16/2026

Private student loans may promote low rates, but most borrowers pay 9%–14%. On a $10,000 loan, interest can reach $1,200 per year, with balances rising quickly if unpaid. Some schools allow tuition payment by credit card without fees, but high rates up to 27.5% can make interest surpass tuition in three years. Student loans cannot be discharged in bankruptcy, so you remain liable. Compounding interest at average rates of 7%–8% can rapidly increase debt. If your degree has limited earning potential, consider alternatives like community college or working during a gap year to minimize borrowing.

05/15/2026

Direct Parent PLUS loans help cover education costs beyond other financial aid. Parents of new students in 2026–2027 can borrow up to $20,000 per year, with a $65,000 lifetime cap. The parent—not the student—is legally liable for this debt. Discuss degree completion seriously to avoid costly unfinished studies. These loans have higher interest rates (about 9%) and a 4.2% origination fee deducted before disbursement.

05/14/2026

Completing the FAFSA is crucial for college funding, as your Student Aid Index determines eligibility for financial aid. Subsidized loans are need-based with interest covered by the government until six months post-graduation, while unsubsidized loans accrue interest during school. Paying interest monthly—such as $50 on a $10,000 loan—can prevent debt from growing.

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