Morning Download 

Personal finance + economics + markets

Good morning, investors! This is going to be an exciting week but one that may pose some challenges in the form of government shutdown and falling stocks.

Fun fact: The shortest government shutdown ended in just 9 hours in 2018. However, the year itself saw three shutdowns on different occasions.

Today we cover:

• The government shutdown

• Stock market futures are up

• How to stop giving money to your adult children

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📊 Economy and News 

The U.S. federal government is heading toward a shutdown

A government shutdown? Yes, it seems on the horizon.

What is it? U.S. Federal agencies are not allowed to spend any money without approval from Congress. The inability to get the approval results in a shutdown.

This isn’t the first time that the US government is looking to shutdown. It has happened several times in the past, including the 21-day shutdown of 1995–1996 during the Bill Clinton administration and the 16-day shutdown in 2013 during the Barack Obama administration.

What’s happening? The White House on Friday directed federal agencies to prepare for a shutdown.

Government funding expires at the beginning of the fiscal year, October 1. We don’t yet know how long this shutdown will last.

Congress appears divided between a Democratic-controlled Senate and Republican-led House. Conservatives seem to be in a mood to use the shutdown to gain political leverage, but also want to reduce spending.

Who’s impacted? Employees deemed essential such as law enforcement officers and air traffic controllers are exempt, but most workers will be asked to not get back to work until the problem gets solved, which can take weeks.

As a result, federal workers get delayed paychecks and some face closed or shortened work hours. Furthermore, businesses linked to federal agencies such as tourist service providers could also suffer.

Is it bad? Yes, it is. It impacts workers, the market, and more. Goldman Sachs expects economic growth to fall by 0.2% every week until things resume. However, the market doesn’t take too long to recover.

Also, the stock market might be immune. In fact, the S&P 500 stock index climbed over 10% during the last government closure.

Global hits:

• The Asian market appears to be mixed.

• Credit card losses are going up at the fastest pace since the Great Financial Crisis, as more people are falling behind on payments.

• Is Russia pushing oil prices higher?

📈 Stocks

S&P 500 4,320.06 (-0.23%)
DJIA 33,963.84 (-0.31%)
NASDAQ 14,701.10 (0.047%)
VIX 17.20 (-1.94%)
* Prices as of Sep 24th, 12:20 AM UTC

Stock futures are up

Stock futures edged slightly higher in overnight trading Sunday after taking a beating last week.

The Dow Jones Industrial Average futures gained 50 points, whereas Nasdaq 100 futures and S&P 500 futures both inched up 0.2%.

September has proven to be a bad month for the market. The S&P 500 has fallen 4.2% this month, and the Nasdaq Composite is down 5.9%. The tech sector has done poorly in September and now all eyes are on upcoming economic events, including:

• Home sales data

• Consumer confidence data

• Initial job claims data

• Fed Chairman Powell speech on September 28th

• …and the budget crisis.

🔐 Crypto

Bitcoin $26,247.60 (0.01%)
Ethereum $1,579.98 (0.04%)
Total market cap $1.04T (-1.08%)
* Prices as of Sep 24th, 12:20 AM UTC

Here’s what you need to know about the crypto industry:

• Couple mistakenly sent $10.5M by Crypto.com and kept it to face an October plea hearing.

• Coinbase holds over 5% of all BTC ever made.

💵 Personal Finance

How to make your grown children financially secure

This is a controversial topic but one that needs some attention. A growing number of adults are now choosing to live with their parents due to increasing costs.

Young adults in the US are less likely than those in most of Europe to live in their parents’ home. Only 33% of adults in the country aged 18 to 34 live in their parents’ homes.

In fact, over 70% of adults aged 18 to 34 live with their parents in countries like Serbia, Portugal, Croatia, Greece, and Italy. The number is lower in countries like Denmark and Finland.

On the other hand, it is very common to live with parents in countries like India. In fact, many Indians continue to live with parents even after marriage, which isn’t the norm in Western countries. Furthermore, many adult children are dependent on these countries and it is common for parents to not only fund their education but marriages as well.

Why is it a bad thing?

It impacts both parents and children. Adult children can put a financial burden on parents, which can impact their retirement plans. Also, living with parents can decrease the chances of becoming a homeowner and can enable children to not go out in the world and stake their own claim.

While every parent wants to help his or her children, continuing to financially support grown children on a regular basis can cripple your own financial situation as you near retirement.

Aging adults say giving money to grown children is a habit they’d like to change. However, most struggle to do it.

About 84% of respondents said they would like to educate their family on ways to be more financially independent, while 70% said they would consider cutting back on support to post-college children.

Americans appear to be giving $6,800 on average to children to support them after college. This substantial amount can help retirees in the future.

There is nothing wrong with helping your children but you should not make them financially dependant on you, especially when they’re older.

So, how to stop it?

Start by being honest.

Tell your adult children that you cannot support them financially and help them find another option, i.e. a better job.

We understand it might sound harsh but it’s important to secure your future and build your child’s life.

If you do not immediately want to cut financial support then start slow by reducing the amount you give to them. Also, teach your child the importance of money and budgeting.

You can highlight how funding their life is impacting yours and why they need to start thinking of their future too.

It’s not the end

You can continue to give occasional cash gifts or open an account to fund your children’s education. The key lies in being there for your child but not ‘funding’ their lifestyle.

Check this video for more:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.