Cut To The Chase

We’re all astronauts doing house chores. Because the only option to get financial help has been wealth managers, people find themselves wrapped up in complicated investment portfolios, life insurance products, and financial plans that feel out of context and out of touch. The space suits make sense for people who are already in space! But most people just need to get their financial sh*t together so they can finally get off the ground. That requires a different type of advisor.

The five fatal money mistakes that keep millions of people in the paycheck loop are: living off of borrowed money, paying down the wrong debt, keeping too much money in cash, not taking taxes seriously, and not having a plan. These are the house chores! They don’t require advanced investment strategies, life insurance loopholes, or borderline tax evasion, they just take work. Before we can ever enjoy the opportunities that do require the advanced tech, we need to get our financial sh*t together.

The new US Speaker of the House, Mike Johnson, and the rest of Congress have a number of pressing items to tackle in the coming weeks. We’ll take a look at the most important issues as the House of Representatives can finally get a move on.

Finally, we discuss the niche methods to save money this holiday season with special shopping and dining deals provided by credit card companies.

Hoskin Capital is not a wealth management firm ^TIMELY

From Nate Hoskin, Founder & Lead Advisor

I was talking with a good friend of mine, Jason Howell, who is a professor at George Mason University and a fellow financial advisor. I was lamenting that I don’t feel like I fit into the wealth management business because I want to work with HENRYs (High Earner, Not Rich Yet).

He said something that flipped my perspective upside down:

“Well, the problem is in the name, isn’t it? In order for you to be in the wealth management business there needs to be wealth to manage. If they don’t have wealth yet, they don’t need a wealth manager.”

He was right. No one in my target market needs a wealth manager because by definition they’re not rich yet!

It’s simple: I’m not a wealth manager, I’m a financial planner and educator. I’m not in the wealth management business, I’m in the wealth creation business.

Really, another color change?

I know. I keep changing the look and feel of Hoskin Capital because it took three years to truly understand why Hoskin Capital doesn’t fit in the box. Now that I’ve internalized that, I can stop trying to make us fit and double down on what makes us different.

We’re all astronauts doing house chores. The incredible technologies and opportunities around us are rendered useless by our circumstances. It’s time to get our financial sh*t together so we can finally get off the ground.

5 Fatal Money Mistakes  ^LUMINARY

These are the 5 fatal money mistakes that keep people in the paycheck loop and rob them of the financial security they work so hard for every single day.

Living On Borrowed Money

The most common mistake people make is living on borrowed money. Most Americans only have $1,200 a month they can spend after all of their basic expenses, but the average car payment is $725, credit cards are $181 a month, and student loans are $393 a month.

So just like that, most Americans are $99 behind every single month because of their relationship with debt.

Paying Off The Wrong Debt

If you’re already in a debt spiral and want to get out as quickly as possible, it’s tempting to start just throwing money at your debt, but it’s essential to avoid the second money mistake: paying off the wrong debts.

Not all debt is made equal and some debt can actually be helpful. A good paydown strategy means having a priority list. If you want to start small and build up speed, you can use the Snowball Method to get some quick wins and free up even more money to use towards your other debts. If you have some debts with higher interest rates than others, you can use the Avalanche Method instead. This will prioritize debts with higher interest rates first.

Regardless, focusing on one debt at a time while paying the minimum on everything else is the best way to go.

Keeping Too Much Money In Cash

Cash is not king. Cash has lost 95% of its value since 1930 while the stock market has gone up 615,041%.

That’s why keeping too much money in cash is the 3rd deadly money mistake.

Now that doesn’t mean you shouldn’t have ANY cash, the rule of thumb is to have 3-6 months of expenses saved in a High Yield Saving Account (HYSA). The rest of the money that is saved can be invested in a number of ways, this is a general priority list for how that money can be saved instead.

1. Emergency Fund (3-6 months)

2. 401(k) Match

3. Roth IRA or Backdoor Roth

4. 401(k) up to 10% of salary

5. Taxable Brokerage Account

Not Taking Taxes Seriously

If you could get a 10% discount on life, that would probably help way more than getting good returns on investments or trying to save every penny. That’s why taking taxes seriously is one of the best ways to set yourself up for financial success.

This can take a lot of forms. Whether it’s claiming your student loan interest as a tax deduction, using your 401(k) to turn $22,000 into tax-free money, or putting credit card cashback into your Roth IRA so it goes in tax-free.

These little changes can turn into thousands of dollars saved every year, which is money that can now start working for you.

Not Having a Plan

The easiest way to ruin your finances is by pretending they don’t exist and you would be blown away by how many people refuse to address their financial weaknesses because of how stressful money can be.

Avoiding looking at your bank account or your credit score or not opening mail can keep you in this loop of owing too much money and making too little.

Money avoidance is also not asking for a raise or looking for a better job, which causes you to miss essential opportunities to make more and have a fulfilling career.

Having a financial plan and someone to hold you accountable makes all of this hard work you’re already doing that much more effective. Instead of living for your next paycheck, you get to buy back your time and peace of mind.

We are not out of the woods yet ^TIMELY

From Jon Scott, Lead Author 

The GOP has selected and voted in Mike Johnson to the Speaker of the House, the four-term representative from Louisiana’s 4th district.

Johnson was the fourth Republican nominated by the party since the ouster of Kevin McCarthy. Steve Scalise, Jim Jordan, and Tom Emmer (whose bid was done only a few hours after being announced) all failed to garner the needed 217 out of 221 Republican votes needed to become Speaker of the House. Johnson’s attempt garnered all 221 Republican votes.

The Most Pressing Matters

1. Aide to Israel - Regardless of individual Americans’ opinions on the matter (and everyone is entitled to their own views—this is America), the President and US Congress overwhelmingly support Israel. Congress will seek to pass an aid bill to help Israel in its upcoming military engagement. The status quo and even a ground invasion of Gaza—which has so far been delayed by Israel—likely will not lead to any huge market change. However, the introduction of Iran into the conflict would be a big deal, especially for oil markets.

2. Aide to Ukraine - The empty Speaker role also meant new aid to Ukraine remains stalled. Congress will look to take up this vote again possibly tying the funding together with aid to Israel, however, some Republicans have said this tactic will be a nonstarter due to some dissension on further aid to Israel amongst the GOP. From a market perspective, the 600+ day ongoing war has already been priced into energy and food markets; and with the war continuing at a slow pace and no ongoing peace talks mean it is likely nothing will change for markets going into the New Year.

3. Avoiding a government shutdown - Passing a spending bill to avoid a government shutdown on November 17th should be priority #1 for Congress. McCarthy’s last-minute stopgap funding bill caused his ouster, yet the deal he fostered only lasted 45 days. Democrats and Republicans will need to negotiate and pass a new bill by November 17th to avoid a shutdown. From a market perspective, the dysfunction in Washington threatens the US credit rating. Fitch and the S&P credit bureaus have already downgraded US credit in the past, respectively. Further downgrades likely mean funding will become more expensive for the US government, pushing up the national debt and causing more government revenue allocated to interest payments instead of funding actual government functions. More expensive government funding likely means more expensive loans in the private sector for homes, cars, and other forms of debt over the long term.

Your Credit Card can help you save money ^LUMINARY

It’s that time of year again, and as a natural saver, all I can think about is all the money I will have to spend this holiday season. Luckily, there are a few ways you can save some extra bucks.

Credit card companies have offers that allow you to save money shopping at specific stores. For example, American Express is offering their cardholders $35 back when they spend $175 at Levi’s Jeans until February 15, 2024. There’s another offer for $60 back when you spend $300 or more at Tory Burch. Other stores with American Express offers include SKIMS, Columbia Sportswear, and Carhartt.

The holiday season is often a time to travel and visit family in various locations so if you find yourself dining out Bilt Mastercard® is offering 3x points up to 10x points for dining at certain restaurants and paying with your Bilt card. These restaurants are largely exclusive to the largest 15 metro areas in the country along with Providence (RI), Portland (OR), and Las Vegas.

Work with Hoskin Capital

Knowing is half the battle, we help you get it done.

We manage your entire financial life for a fixed annual fee.

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