| Bite-sized money insights across a broad range of topics—from budgeting, taxes, buying a car or home, to investing, equity comp, crypto and more. |
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| Here's the Gist today Happy Tuesday Origin Member. Financial Literacy Month is recognized both in Canada and the U.S., but they don't share the same month — does anyone know which month is FLM up north? A. January B. June or C. November Here are the topics for today: |
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| | It's Financial Literacy Month 🗓 |
In the U.S., April was officially designated as Financial Literacy Month back in 2004. The idea actually originated from the former "Youth Financial Literacy Day", and had already been adopted as an official month by 8 states before George W. Bush formalized it on a federal level. How financially literate are we? Every year about this time, the National Financial Educators Council (NFEC) conducts a 30-question assessment that covers 10 key areas of money. Since its inception back in 2014, and as of this January, about 93,000 Americans have participated in it, generating an average score of 67.34% — not a passing grade. When you break down the data, the old adage that with age comes wisdom rings true. Younger participants aged 10-14 have the lowest average score at 56.63%, whereas those aged 51 and older average a passing grade of 77.81%. Not bad, but not great either. If you're feeling up to the challenge, we'd encourage you to take the test yourself — drop your results in the feedback section below! (Not to flex, but I got an 80.) How can you improve your financial literacy? Active curiosity followed by action is the foundational aspect of building up a financial knowledge base. When you wonder about something, have a question, or come across something you don't know — don't just forget about it, research it, ask someone, or find the answer online. Integrate structured learning into your financial wellness routine. Learning about money is just as important as budgeting, saving, investing, and earning — without the knowledge of how to best use your money, it can't properly serve you. A great place to start is in Origin's Learning suite, where you can access hundreds of different lessons and articles covering a wide swath of financial topics.
Never stop learning either. Even financial professionals don't know everything there is to know — it's simply impossible. There will never not be something to learn when it comes to finances, and staying in tune with that curiosity will help you grow your knowledge and better manage your money.
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Does The 4% Rule For Retirement Still Work? 🤔 |
What is the 4% rule? The 4% rule suggests that retirees should be able to withdraw 4% of their retirement savings in the first 12 months of their golden years, adjust with inflation for each following year, and run no risk of running out of money within 30 years. This very niche 'rule of thumb' became popularized around 1998, and its real name is actually the Bengen rule, as it was coined by financial analyst William Bengen and based on stock market returns from 1926-1976. A look at how it works: Let's say an investor has a $1M nest egg and retires at 65. In the first year of retirement, they'd withdraw $40,000 to live on. Next year, if inflation was 2%, they would multiply $40,000 X 1.02% to reach a budget of $40,800 for the year, and so on. What the rule does and doesn't do The 4% rule was calculated based on an expected 30-year retirement period, designed for those retiring between ages 62 and 65. The rule also assumes a fairly conservative portfolio allocation of 60/40, with 60% in stocks and 40% in bonds. It's based on historical market data, and no one can predict what the market's behavior will be leading up to your retirement date. Suffice it to say that the 4% rule doesn't account for market fluctuations, and it's almost impossible to do. The rule also doesn't take into account your personal tax rate, which impacts the actual value of your nest egg. While some investors might be in a higher tax bracket in retirement, some might be lower. Some might have more assets in post-tax Roth accounts as well, meaning their tax rate would be 0% on those withdrawals. It also doesn't account for Social Security, so if you're lucky enough to have that, you may be able to live on an even lower annual withdrawal percentage. Does the rule still hold value? Ultimately, it depends on your situation. Your retirement situation will vary vastly depending on factors unique to you. How much did you invest, what was the average return, what was your allocation, what age did you retire, and an array of other questions that will determine your unique percentage. At the end of the day, a rule of thumb is just a rule of thumb — it's not a personalized financial plan. It's useful insofar as it can serve as a valuable guide, but not enough to direct your personal situation. |
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Our Top Travel Budgeting Tips For Spring 🌼 |
Travel has had a massive resurgence following the pandemic, with pent-up angst and cabin fever being directed right into travel spending. You would think we might be over it by now, but no. This spring, Americans are planning to ramp up their travel even more relative to previous years. A recent survey revealed that 91% have plans to travel domestically in 2024, 50% are planning to travel internationally, and 40% are planning on traveling more than they did in 2023. All-in-all, travelers are expected to spend even more than years prior, with the average trip cost coming in north of last year's $6,587 number. That being said, we want to help you save on travel, not spend more. Here are our top travel budgeting tips Include traveling in your budget. This is something many Americans forget about altogether, even though most partake in it regularly. Reportedly about 55% of Americans who budget leave off this cyclical item that can engulf a noteworthy percentage of your overall expenses. Approximate how much you'd like to spend on travel per year and divide it by 12. You'll get a monthly number to set aside for an earmarked purpose, making it more easily accounted for and obtained. Compromise. Perhaps the simplest and best way to stretch your vacation budget is to not pick uniformly across your different expense areas. For example, if you don't plan on being at your condo very much, compromise on the amount you spend there and save that for other amenities. If the place you stay matters a lot, allocate more of the budget specifically to that, and be frugal when it comes to going out. And then, put it on a credit card. That sounds bad, but we're not talking about going into debt and keeping it. Take a trip you can afford to pay off, and if your credit profile is good, it wouldn't hurt to open a new card with an introductory bonus offer to hold your trip expenses. Many cards offer bonuses upwards of $300 when you spend $3,000 or more. Put your $3,000 trip on the card, take the $300 (10% off) as a statement credit, and pay off the res |
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| 📖 It's actually C., November. (Wikipedia) 🤖 AI can now recreate human voices in just 15 minutes (Axios) 💵 Have you been 'guilt tipping' recently? Most consumers have. (CNBC) 📩 Happy birthday to Gmail, which turned 20 yesterday (The Verge) |
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Advisory services are offered through Origin Advisory Services LLC ("Origin RIA"), a Registered Investment Adviser registered with the Securities and Exchange Commission and a wholly-owned subsidiary of Blend Financial Inc. DBA Origin Financial. Origin RIA's registration as a Registered Investment Adviser does not imply a certain level of skill or training. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.
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