Smart Ways to Use Your Home Equity & Latest Economic Insights

Published: Fri, 08/02/24

Your Local Resource for Expert Financial Guidance and Support

Economic Update: Consumers felt more confident in July as expectations of future improve

American consumers felt more confident in July as expectations over the near-term future rebounded. However, in a reversal of recent trends, feelings about current conditions weakened.

The Conference Board, a business research group, said that its consumer confidence index rose to 100.3 in July from a downwardly revised 97.8 in June. The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

The measure of Americans’ short-term expectations for income, business and the job market rose in July to 78.2 from 72.8 in June. A reading under 80 can signal a potential recession in the near future. Consumers’ view of current conditions dipped in July to 133.6, from 135.3 in June.

Elevated prices for food and groceries remain the main driver of consumers’ view of the U.S. economy.

Though inflation has come down considerably since the Federal Reserve started boosting interest rates in March of 2022, price increases remain well above pre-pandemic levels.

“Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year,” said Dana Peterson, The Conference Board’s chief economist.

The number of respondents who said they planned to purchase a home fell to a 12-year low as elevated interest rates, sky-high home prices and a lack of supply continue to discourage home shoppers.

The number of consumers predicting a recession inched up this month but is still well of its 2023 peak, the board said.

Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.

While the U.S. economy and labor market remain broadly healthy, some weakness has surfaced, spurred by higher interest rates.

The unemployment rate ticked up to 4.1% in June — the highest rate since November 2021 — even as America’s employers added another 206,000 jobs last month. The government reported that postings for U.S. job openings fell slightly in June. There were 8.18 million job vacancies in June, still a strong number, but down from 8.23 million in May.

The nation’s economy accelerated in the second quarter at a strong 2.8% annual pace, but that comes after growth of just 1.4% in the January-March quarter.

This year’s economic slowdown reflects the much higher borrowing rates for home and auto loans, credit cards and many business loans resulting from the Fed’s aggressive series of interest rate hikes.

The Fed wrapped up its meeting last week with no change to interest rates. Most are forecasting the first rate cut in more than four years to come at its next meeting in September.

Source: Associated Press

5 Smart Ways to Use Your Home Equity this August

For the last few years, homeowners have had a good borrowing option at their fingertips: their home equity. Not only have home equity levels increased dramatically since 2020 — leaving the average homeowner with nearly $300,000 in equity — but interest rates on home equity loans and home equity lines of credit (HELOCs) have been more attractive than the alternatives. If you want to leverage your home equity strategically, here are a few uses to consider from MoneyWatch:

Get More Money for Your Used Car

According to a recent survey of more than 14,000 Consumer Reports members, getting an instant cash offer online through a retailer such as CarMax or Carvana will get you the best price for your car and be the easiest overall experience. But each option has its pros and cons. When you're ready to sell or trade, these tips from Consumer Reports will help you get the most for your vehicle.

CFOs say they feel the heat on sustainability issues from investors and other stakeholder groups

A core if sometimes unsettling truth for finance chiefs is that they serve many masters. They are high-ranking executives of course, but in various ways, they seem to report to almost everyone: investors, banks, board members, regulators, customers, employees, and society itself, among others. Collectively, such stakeholders are exerting strong pressure on CFOs to take more action on sustainability issues, according to new research.

Securing Your Retirement: Planning for Life After

Your Consulting Business

Retirement planning often involves navigating uncertainties, especially for individuals who have built their careers around businesses or consulting ventures. A primary concern is maintaining one's lifestyle post-retirement if a significant portion of income comes from a business that may not be sustainable in the long term. However, with the right financial planning tools and strategies, you can overcome these challenges and ensure a comfortable retirement.

Introducing the Financial Fingerprint™

The Financial Fingerprint™ is a powerful tool that provides a comprehensive snapshot of your financial landscape, enabling informed decisions about your future. Let's explore how this tool can help craft a retirement plan for someone facing the dilemma of retiring when their consulting business, which generates $100,000 in annual income, may no longer be viable.

Understanding your Unique Fingerprint

Think of the Financial Fingerprint as a unique identifier that encapsulates various aspects of your financial situation, including assets, liabilities, income streams, expenses, and goals. By analyzing this fingerprint, financial advisors can develop personalized strategies tailored to your needs and objectives.

Assessing Retirement Readiness

If you are concerned about retiring without the $100,000 income from your consulting business, the Financial Fingerprint serves as a starting point for assessing your retirement readiness. By scrutinizing your current financial standing and future projections, we can determine if you have sufficient resources to maintain your desired lifestyle post-retirement.

Crafting a Sustainable Retirement Plan

Using insights from the Financial Fingerprint, we can devise a retirement plan that mitigates the impact of losing your consulting income. Here’s how:

1. Optimizing Investments: Leveraging your assets and investment portfolio, we can tailor an investment strategy that balances growth potential with risk tolerance. This may involve reallocating assets to more stable instruments or adjusting asset allocation to align with your retirement goals.

2. Managing Expenses: Reviewing your current expenses and identifying areas where you can reduce or optimize spending is crucial. By creating a budget that accounts for essential needs and discretionary expenses, we can ensure that your retirement income comfortably covers your lifestyle.

3. Evaluating Retirement Accounts: Assessing your retirement accounts, such as 401(k)s, IRAs, or pensions, allows us to determine the optimal withdrawal strategy. By maximizing tax-efficient distributions and exploring options like Roth conversions, we can enhance your retirement income while minimizing tax liabilities.

The Financial Fingerprint in Action

Armed with insights from the Financial Fingerprint, we present you with a comprehensive retirement plan that addresses your concerns and aligns with your goals. Through meticulous analysis and strategic planning, we demonstrate how you can transition into retirement confidently, even without the $100,000 income from your consulting business.

Embrace a Secure Retirement

Navigating the complexities of retirement planning requires a holistic approach that considers your unique financial circumstances and aspirations. The Financial Fingerprint is a valuable tool in this endeavor, empowering you and your advisor to make informed decisions and chart a course toward financial security in retirement. By leveraging this tool effectively, you can confidently embark on your retirement journey, knowing that your financial future is in capable hands.

Parting Shot

Mountain goats play on a car at Mount Blue Sky. Could this be one reason insurance rates are so high in Colorado?😂 Courtesy of Michael Ryno . Watch the video.

Capstone built our reputation on friendly service, impeccable honesty, and respect for every client. Our clients’ needs drive our relationship, and the focus is always on you. We strive to be highly responsive to your requests and are skilled at creating solutions customized to your goals, values, and situation. Reach out anytime with questions. We're happy to help!

Capstone Investment Financial Group, LLC

Colorado Springs/Denver

719-477-9883

info@capstoneinvest.com

620 N Tejon St
Colorado Springs CO 80903
USA

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