Progress, but not enough: new global temperature estimates

What do global temperature estimates look like now? In the Rhodium Group’s inaugural Rhodium Climate Outlook (RCO), they provide probabilistic estimates of energy, emissions, and global temperatures within this century. The following graph shows their estimates for greenhouse gas emissions and the associated trajectory of global temperatures. 

Their estimates predict a 90% chance that global temperatures will increase between 2.0 and 4.0°C. While this is progress from estimates before the Paris Agreement was adopted in 2015, this is well below the international target of 2°C. 

Ramping up in Washington

Things were slow in Washington last week as lawmakers (who are people too) went back to their districts for the holiday. Each party will shift into their end-of-the-year sprint with funding for Israel and Ukraine being the major priorities. Neither of these issues should have much impact on markets. However there may be future fiscal impacts if Republicans are able to ensure a decrease in IRS funding in exchange for passing aid to foreign nations.

An inflation update from the Fed’s favorite index

PCE inflation data was released yesterday, with Core PCE, the Fed’s preferred measure of inflation which excludes the more volatile food and energy categories continued to trend down, to 3.5% year over year in October. This puts the Federal Funds Rate 1.8% above Core PCE, the biggest difference since before the Great Financial Crisis and indicative of restrictive policy. 

So will the Fed cut rates soon? 

It depends on who you ask. While about half of investors currently expect the Fed to cut rates starting in March 2024,  Michelle Bowman, voting member of the board of governors (aka someone who will be making the decisions) said Wednesday that she expects interest rate increases to bring inflation back down to their 2% target.

How your credit card can speed up your travel

For those of you who travel frequently or just can’t stand the long security lines before your flight, it may be time to consider signing up for TSA Pre-Check. Global Entry, or CLEAR PLUS. Luckily, your credit card may offer a credit towards securing one of these services.

TSA PreCheck gives flyers access to a special security line that is usually shorter, and also allows flyers to keep on their shoes, leave their laptop in their backpack, and bring liquids though security. 

Global Entry is geared toward international travelers. 

Flyers go to CLEAR Plus pods where they confirm their identity by scanning their boarding pass and their fingerprint or iris before being escorted directly to physical screening. CLEAR Plus in tandem with TSA PreCheck will also get you to the expedited security lanes.

Forbes has a breakdown of the many cards offering credits toward PreCheck, Global Entry, and CLEAR Plus. 

For more info on credit cards geared toward travelers, check out the Traveler section in our Credit Card article.

The true cost of a financial advisor

A typical financial advisor can cost you a quarter of your net worth.

Most wealth managers and advisors charge you 1% of whatever assets they manage and while that may sound cheap, it gets really expensive over time. If your advisor is managing $100,000 you pay them $1,000 a year, but if they’re managing a million you pay them $10,000 a year!

This raises the important question: does managing $1,000,000 require 10 times as much work as managing $100,000?

This is such a hidden fact that the SEC had to write an Investor Bulletin warning investors about the impact of percentage fees.

But how does a 1% fee turn into ¼ of your net worth? Because the fee increases exponentially over time and comes out of your savings instead of your budgeted expenses, it keeps your money from compounding as quickly.

Since compounding is the entire reason we invest, that’s a bit of a problem.

If you earn 10% on your money each year, $100,000 turns into $672,750 in 20 years.

If you lose that 1%, so now you earn 9%, your money only grows to $560,441.

That 1% fee cost 16.7% of your net worth in just 20 years! Over 40 years, it costs you 30.6%.

This is why we charge a fixed annual fee to manage your money, do your taxes, and hold you accountable to your financial plan.

If we help you double your net worth, but we’re still doing to same amount of work, the fee stays the same.

If you want to learn more about how we help our clients make financial freedom inevitable you can schedule an intro meeting with me down below!

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. 

Meet our team of experts, peep our services, and learn why we exist.