Morning Download 

Personal finance + economics + markets

Good morning, investors! Let’s start with a reminder: the market has been going great for a while but it will not continue to go in this direction, so choose wisely.

Fun fact: All economists agree that predicting a stock’s price is tough. However, only 59% of Americans agree with that statement. 😀 

Today we cover:

• Germany is going downhill.

• Tesla roars louder.

• How to fund your child’s education

Twitter | Pro | Advertise

📊 Economy and News 

German economy ready to shrink

Germany's economy is predicted to contract by 0.4% this year — that’s 0.6% lower than an estimate made in May. Europe's largest economy has been in the news for all the wrong reasons, including falling exports and increasing unemployment rates.

The country’s unemployment rate reached its highest levels since 2001, edging up to 5.7% in June 2023, exceeding both the preliminary estimate and market expectations of 5.6%.

Losing faith: The EU appears to be losing faith in Germany as it recently cut the country’s growth expectations in 2024, from 1.4% to 1.1%.

Same situation in Europe: Germany might be the worst player but the situation, in general, is not good in Europe.

The 27 EU economies are now expected to grow at an average pace of 0.8% this year, down from the 1% estimate made in May. Similarly, the UK, which is no more a part of the EU, is having similar concerns.

Global hits:

• India agrees to cut import duty to 5-10% on some processed food items.

• Pakistani Rupee becomes one of the best performing currencies after recovering over 5% in a week due to a crackdown against smugglers.

• China changes its stance on foreign banks operating in the country.

• Investors are now interested in the booming bond market in Europe.

📈 Stocks

S&P 500 $4,487.46 (0.67%)
DJIA 34,663.72 (0.25%)
NASDAQ 15,461.86 (1.19%)
VIX 13.80 (-0.29%)
* Prices as of Sep 12th, 12:20 AM UTC

Tesla takes the market up

Tesla performed exceptionally well on Monday after the Morgan Stanley upgrade, taking the broader market notches higher. All major indexes closed green on Monday.

Analysts argue that Tesla should be viewed as a tech company as much as an electric car maker. Morgan Stanley analysts set its new price target at $400, up from a previous price target of $250.

Why? They envisioned the company selling AI technology to other automakers, and using its own GPUs (their Dojo supercomputer), rather than relying on Nvidia.

Tesla led the market but there were some major losers as well, as seen below:

🔐 Crypto

Bitcoin $25,092.50 (-2.86%)
Ethereum $1,541.87 (-4.63%)
Total market cap $1.0T (-2.98%)
* Prices as of Sep 12th, 12:20 AM UTC

Here’s what’s happening in the world of digital currencies:

• India does not want to ban crypto, is working on a regulatory framework.

• Bitcoin falls under $25K – time for a big crash?

• Money continues to flow out of cryptos.

The outlook isn’t looking good. However, all is definitely not over for digital currencies. In fact, Binance is ready to welcome scrutiny and says they’re not like FTX.

💵 Personal Finance

How to fund your child’s education

Education is expensive, especially in countries like the US where the average cost of attendance for a student living on campus at a public 4-year in-state institution is $26,027 per year or $104,108 over 4 years.

Did you know you can get free education in countries like:

• Germany

• Italy

• Finland, and

• Norway

Some of these will even pay you to get enrolled. 💰

The situation is better in countries like China and India. However, parents often struggle to save for their kid’s education.

So, ready for some tips? Let’s start:

Start with a savings account

Consider government-sponsored savings accounts that offer tax advantages, such as the 529 Plan in the US. You will enjoy offers great benefits like:

• Tax-free earnings (when money is used for college).

• Tax-free withdrawals (when money is used for college).

• It is possible to change the beneficiary.

• There are usually no income limits or restrictions based on age, which means you can even use it to fund your own education.

However, there is usually a penalty for withdrawing funds for any other purpose. Moreover, there is a gift tax when more than $17,000 is contributed in 2023 by a single person.

You can put money into your own state's 529 or any other state's plan. Plans differ from state to state, so pick the one you like the most.

In addition, there are some other great savings accounts such as Uniform Transfer to Minors Act (UTMA) or Uniform Gift to Minors Act (UGMA). Also, a Roth IRA can be used to save for your child’s education.

Look for aid

Fill out the Free Application for Federal Student Aid (FAFSA). It covers a variety of things, including federal grants, school aid, work-study programs, and state aid.

Beware: The FAFSA shows how much one qualifies for, so ensure the letter you receive mentions aid and not a loan.

Consider scholarships

Countries like the US, UK, and even Canada offer gracious scholarships – up to 40% – with some countries even offering up to 90%. These scholarships are offered to meritorious students, students in financial need, students from marginalized communities, and more.

Encourage your child to apply for any scholarship they’re eligible for. They can make a lot of difference so get ready to do some paperwork.

Get enrolled in AP classes

Advanced Placement (AP) classes can be a great way to save money. They give students a chance to earn college credits while in high school, which means less money to spend when they go to college.

Want more? Try this:

• Encourage your child to take a job. Most kids can manage a few hours of work while studying, which can help reduce the burden.

• Save boarding money by encouraging your child to live at home.

• See if there are tuition reimbursement options.

Watch this incredible video about saving for education:

💰 Be a Better Investor

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