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Financial Freedom

Debt ceiling bill signed: U.S. will not default

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America will be able to pay its bills.

The House of Representatives and Senate voted to pass the bill and President Biden signed it into law today.

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The market has been on a tear once the debt-ceiling bill passed.

The Dow went up 700 points on Friday and Google is up, way up!

As of 30 May, GOOGL stock price was up almost 40% year-to-date. That is great news for investors in the stock. GOOGL opened 2020 at $67.42 on 2 January 2020 and would close at $86.81 on 31 December, a 28% rise.

In its Q4 2021 earnings report, Alphabet announced its decision of a 20-for-1 stock split by way of a one-time special dividend on each share of the company’s Class A, Class B and Class C stock. Stockholders recorded in the company’s books at the close of business on 1 July 2022 received 19 additional shares of the same class of stock that they already held by the close of 15 July 2022.

Keep in mind that GOOGL was trading at $2,200 a share just before the split. The stock closed at $2,255.34 on 15 July 2022 and opened at a split-adjusted price of $112.64 on 18 July.

The reason they proposed the 20-for-1 was to make shares more accessible. If you invested $10,000 in Google’s IPO is more than $300,000!

Although, that much exposure to one stock can be pretty risky as anything over 10% of your portfolio can result in more losses than an investor would like.

That would mean you would need to have a $3 million-dollar portfolio to have this type of exposure to one stock. You may likely want to diversity in index funds such as the VTSAX or VFIAX to keep things more level.

My suggestion is now that we have averted a financial meltdown is to go and buy some stock. The upside can be tremendous if the market continues its upward trajectory.

The easiest method to increase your stock holdings and limit the risk is to invest in a total stock market fund like the VTSAX. It has a market cap of over $1 trillion.

For those investors that could not afford to buy GOOGL or Amazon at their peak price of over $2,000, this is your moment.

Both AMZN and GOOGL are poised to go higher with more people online than ever.

What makes GOOGL special is their powerful search engine. GOOGL handles over 90% of all search queries worldwide, Google is dominating the global search engine market share.

There are 8 billion people on the planet. An estimated 37 per cent of the world’s population – or 2.9 billion people – have still never, ever used the Internet. Therefore, GOOGL has no where to go but up. Get a ticket to this ride as fast as you can.

Personally, I feel the stock is undervalued.

Maybe that is why the company board of directors just approved a $70 billion-dollar buyback in April of this year. What that spells for investors…Cha Ching!

GOOGL also owns YouTube, which just closed on an NFL Sunday ticket access deal worth $2.5 billion. They are making money hand over fist.

Their balance sheet is so healthy because they are flush with cash and so little debt. Alphabet had $12.9 billion in debt in December 2022; about the same as the year before. However, it does have $113.8billion in cash offsetting this, leading to net cash of $100.9 billion.

That is why they can afford a $70 billion dollar stock buyback. Typically, when this occurs the stock price goes up in value due to less shares being available.

Your girl has got in on this by buying shares throughout the last year. Even with a modest stock split in the future, I would own thousands of shares.

At that point, I would likely diversify some this into index funds to limit my exposure to losses in case the market does a swan dive.

As of 30 May, according to Coin Price Forecast, Alphabet price could hit $155 by the end of 2023 and then might reach $163 by the end of 2024. Analysts estimate it could rise to $219 within the year of 2025, and was anticipated to reach $252 in 2026, $302 in 2029 and $362 in 2033.

GOOGL is minting millionaires.

GOOGL can help facilitate the American Dream.

Instead of hoop dreams or being a movie star or Rockstar, you can be a financial Rockstar. You can be a stockstar!

Therefore, if you have champagne wishes and caviar dreams, then this is the place to be.

College

Game Of Loans

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31 Graduation Caps That Absolutely Nailed It | Graduation cap designs, College graduation cap, Graduation cap

Hello out there!

Happy post -Thanksgiving!

It’s been a while, but I’m back.

I have been a little busy. However, never fear your advisor to the financial underdog is here! Ha ha.

Let’s get to it.

The student loan pause has been extended. The Biden Administration has announced that the payment pause on federal student loans for 43 million students will extend through June 30, 2023. Payments will also not start until 60 days after, August 30, 2023.

This means the loan forgiveness first announced in August 2022 will have time to work its way through the Supreme Court (SCOTUS).

If you are a Pell grant recipient, that means $20,000 in loan forgiveness for you, if approved, and for all others $10,000, if you meet the eligibility criteria for forgiveness.

This is good news indeed, as it will give many Americans time to squirrel away funds for saving, beef up investments or additional savings accounts, and pay off debt.

My advice is always to start with an emergency fund of $2,500. Then work your way to three to six months of expenses. As debt is paid off, you can increase your savings and investments.

The 0% interest rate while loan payments are suspended is also an added bonus. That means if you owe an average of 6% on the median $38,000 of student loans, then you are saving $2,280 a year on interest. Even higher for those that owe more.

The three-year repayment pause has allowed Americans to save a collective of millions of dollars in unaccrued interest. Basically, the saving on interest has turned this into a form of loan forgiveness.

In addition, to the $10,000 or $20,000 loan forgiveness, if approved, would effectively turn those amounts into grants.

So keep your figures crossed and make this a wish on every star and birthday candle, if you are one of the ones that will get forgiveness as this will allow you to receive 100% loan forgiveness.

Without these estimated $300-$500 loans payments hanging over your head, you are now able to start saving for your future in the form a home down payment and socking money away in your 401(k).

And by the way, the IRS has now raised the 401(k) limit to $22,500 per year. If you were to max out your retirements account with this amount of money, with a historical stock market return since 1980 of 11.34%, you would basically be a millionaire in 16 years with a balance of $978,768.96.

Put every dollar to work that you possibly can.

The math tells you that being a millionaire is within your grasp.

You just have to keep reaching for it.