Morning Download from Invincible Money
Personal finance + economics + markets
Good morning investors! Yesterday was another great day for the market. We’ll start this newsletter with this interesting fact:
“Guyana, a small Caribbean country, has the fastest growing GDP in the world. An oil bonanza is behind the favorable projections: Oil production rose from virtually zero in 2019 to over 100,000 barrels per day (bpd) in 2021, and the World Bank sees output rising to more than 400,000 bpd by 2024 as new projects come online.”
This indicates it is time for investors to consider new markets.
Today we cover:
What’s up with the labor market? 🦺
Stocks continue to grow ⬆️
The cost of raising a child 👦
🔈 Audio version: Apple Podcasts | Spotify
📊 Economy and News
U.S. labor market loses steam as openings decline
August saw a major decline in job creation, according to ADP, which indicates the economy is beginning to ease under pressure due to measures such as rising interest rates.
The firm reported Wednesday that private employers added 177,000 jobs in August, lower than the estimated figure of 200,000. Furthermore, the number is below the revised total of 371,000 added in July.
In addition, pay growth has also declined.
“This month’s numbers are consistent with the pace of job creation before the pandemic,” Nela Richardson, chief economist at ADP, said in a statement. “After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”
The labor market is one of the major reasons why the economy has continued to grow. These new numbers, however, indicate that the Fed might be able to bring inflation under 2%.
We’ll hear more on the situation as The Department of Labor’s jobs report is due out Friday.
Quick hits:
The Bank of England faces losses on bond purchases.
Retailers continue to leave San Francisco.
American Airlines next to go on strike?
📈 Stocks
S&P 500 4,514.87 (0.38%)
DJIA 34,890.24 (0.11%)
NASDAQ 15,462.43 (0.56%)
VIX 13.88 (-3.94%)
* Prices as of Aug 31st, 12:20 AM UTC
Indexes again finish higher
Stocks extend their late-August rally, closing higher on Wednesday. Here are yesterday’s major movers:
The day was balanced. Some big names gained and some lost.
Moreover, the yield on the 10-year Treasury note settled at 4.117%, while the two-year yield finished at 4.884%. Both yields fell for a third straight session.
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🔐 Crypto
Bitcoin $27,280.10 (-1.58%)
Ethereum $1,702.61 (1.55%)
Total market cap $1..08 (-2.07%)
* Prices as of Aug 31st, 12:20 AM UTC
Robinhood’s crypto wallet now supports Bitcoin and Dogecoin
Robinhood Markets Inc. is going big with major changes, including the addition of BTC and DOGE to its wallet. In addition, the company is planning to roll out Ethereum swaps.
This means Robinhood users will now be able to use the wallet to trade (sell and receive) Bitcoin and Dogecoin. Launched six months ago, the wallet is gaining quick fame and has thousands of international users.
💵 Personal Finance
How much does it cost to raise a child?
Planning to start a family and not sure if you can afford it? It is important to be aware of the cost of raising a child so that you are prepared for it.
Firstly, the question can be a little complicated to answer because the cost depends on a lot of variable factors, including the age of your child, the number of children you have, the lifestyle you have, and the city or country you live in.
For the purpose of this guide, we’ll talk about the US. The cost, in your country, however, may largely differ, but this will give you a basic idea.
The average middle-income family with two children will spend $310,605 to raise a child born in 2015 up to age 17.
Here are some of the largest contributors:
Food
Food is a major contributor even if you make your own. A typical family of four spends about $11,500 per year on food at home. It goes up to $18,500 for some families, i.e.: 27% of the average household income of $67,521.
If you only look at the cost of feeding a child, it stands at about $900 per year.
Tip: Avoid eating out and prepare food at home to save food costs.
Housing
This might come as a surprise to some… after all, you probably already live in a house, then how is it an added expense? This is because you may have to move to a bigger house when you have a child. Also, if moving abroad, some countries, such as Austria, require people to have a specific number of rooms if they want to move in with the family.
According to data from the USDA, lower-income families spend about 8.7% of their income on housing a child. For middle-income families, it’s 4.5%, and for higher-income families it’s 2.9%.
Tip: It might be a good idea to move to an affordable city, or even a different country, to save housing costs.
Childcare
Childcare costs anywhere from $5,436 to $24,243 annually. The cost depends largely on your location as daycare in cities like New York and Washington is more expensive than daycare in cities like Jackson and Oxford, Mississippi. Moreover, the amount includes education.
Tip: Consider government facilities and ask for discounts.
This isn’t it, there’s more we want to talk about, so wait for the next edition of this newsletter for more on the cost of raising a child. We will cover more about the financial aspect of bringing up a child and highlight the right time to have a kid so you can stay financially strong while having a good time with your family.
Also, we’ll cover how to save for your child’s future!
💰 Be a Better Investor
“The safest way to double your money is to fold it over and put it in your pocket.”
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.