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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
Business Owner Alert: Main Street Lending Program Offers Covid Aid
Published Tuesday, July 7, 2020, 7:09 p.m. EST
Business owners who were unable to qualify for federal Covid-crisis emergency assistance from the Payment Protection Program (PPP) need to know about the Main Street Lending Program (MSLP).
Enabled by the CARES Act on March 27, 2020, MSLP is administered by the Federal Reserve Board, which is not a normal function of the Fed. The program makes available $600 billion in federal aid to small businesses demonstrating sound financials before the Covid outbreak.
Like PPP, MSLP aid takes the form of loans with favorable terms. A very important difference from the PPP loan program, however, is that MSLP loans are not forgivable.
MSLP is intended to ease credit conditions for small business suffering from the Covid crisis. Some businesses may find its terms advantageous.
The minimum loan size is $250,000 and the term of each loan is five years. Significantly, no principal repayment is required for two years.
Ninety-five percent of the loan principal is advanced by the government. Your lender provides just 5%, but receives a 1% annual fee on the full loan amount.
Despite offering an interest- free loan for one year and requiring nothing to be repaid for two years, requiring 70% of the loan be repaid at maturity known as a balloon payment carries a risk that must be considered in evaluating an MSLP loan. Other borrowing options should be considered in lieu of the MSLP loan program.
The Main Street Lending Program is new and it was launched amid the Covid crisis. New terms governing MSLP loans were released on June 6, 2020, and are subject to change by the Federal Reserve Board at any time. The Fed released a lengthy FAQ about the program on June 26.
Proper evaluation of taking an MSLP loan requires an understanding of your personal financial and tax situation, your business' financial condition and other factors beyond the scope of this financial planning alert.
Please contact us with questions.
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