
Achieving financial success might seem like a complicated journey, but in reality, it can be broken down into three essential steps. By following these guidelines, you're setting yourself on a path toward a more secure and prosperous financial future. Let's dive in!



### 1. **Save, Save, Save!** 

 **Save at Least 20% of Your Income:**  If you're just starting your financial journey, aim to put away at least 20% of your income. But don't stop there! If you're earning a decent salary, why not challenge yourself to save 30-40%? Here's how:

- **Contribute to Retirement Accounts:** Start with your 401(k) and Roth accounts. They offer tax advantages that can boost your long-term savings.

- **Invest in a Post-Tax Brokerage Account:** Once you've maxed out your retirement contributions, consider a brokerage account for additional savings.
    Once you've maxed out your retirement contributions, consider a brokerage account for additional savings.


The more you save, the more financial freedom you'll have down the line.




### 2. **Invest in What You Know :** 
When it comes to investing, sticking to what you understand is important. Invest in companies and asset classes that you're familiar with. Research, study, and get to know the areas where you put your money. Investing isn't about quick wins; it's about informed decisions that pay off over time.



### 3. **Pay Off High-Cost Loans :**
High-interest loans can be a drain on your financial growth. If you're dealing with loans at 10% interest or more, focus on paying them off as quickly as possible. Think of it this way: by paying off a loan with 10% interest, you're essentially earning a 10% return on that money. It's a guaranteed way to boost your financial health.



Financial success doesn't happen overnight, but these three fundamental steps can set you on the right path. By saving aggressively, investing wisely in areas you understand, and paying off high-cost loans, you're laying the groundwork for a solid financial future.

3 Basic Steps to Achieve Financial Success



August 2023 has been a roller coaster for the U.S. economy. This report provides a concise examination of these indicators, giving you a clear picture of the current landscape.
In a nutshell, the US economy remains pretty strong, albeit it’s slowing down a little bit. Inflation continues to cool off while job growth remains steady.

As we gear up for the final months of the year, it's clear that both opportunities and hurdles lie ahead. How do all the economic changes impact your investments and your financial future? [Login to Xillion](https://my.xillionapp.com/) to find out!

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![Broad_Market_Indices@2x(1).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-StockMarket.png)

In August, broad market indices showed declines: S&P 500 (-1.8%), Dow Jones (-2.4%), Russell 2000 (-5.2%), and Nasdaq 100 (-1.6%).

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![Sectoral_Performance@2x (1).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Sectors.png)

**Sectoral Performance:** Energy and Materials saw gains at 1.3% and 3.6%, respectively. All other sectors registered declines, with Utilities experiencing the largest drop at -6.7%.

---

![Copy of Broad_Market_Indices@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Commodities.png)

Crude Oil and Natural Gas prices rose by 3.0% and 4.6%, respectively. Silver also saw a marginal increase of 0.6%. Gold remained unchanged, while Copper prices declined by 3.5%

---

![Real_GDP_10Years@2x (1).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-GDP.png)

In Q2 2023, the real GDP grew at a 2.1% annual rate, slightly higher than the 2.0% increase seen in Q1. This growth was driven by consumer spending, private investments in non-residential fixed assets like machinery, equipment etc., and increased government spending by both state and federal governments. The growth, however, was tempered by lower exports, residential fixed investments, and private inventory investments. 

---

![Inflation@2x (2).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Inflation.png)

**Inflation:** The overall CPI rose by 3.2% year-on-year in July, a minor increase from the 3.0% observed in the previous 12 months. Excluding food and energy, the CPI increased by 4.7% over the past year. Energy costs went down by 12.5% in the year ending July, while food prices increased by 4.9% over the same period.

---

![Copy of Inflation@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Mortgage.png)

The 30-year mortgage rate reached a peak of 7.23% in the week ending August 23rd, the highest in over two decades. However, it slightly decreased to 7.18% by the week ending August 30th.

---

![Copy of Copy of Inflation@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Job.png)

US job openings dropped to 8.8 million in July, the lowest since March 2021, yet remained high compared to pre-pandemic levels. The quit rate for US workers decreased to 2.3%, marking the lowest since January 2021.

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![Copy of Copy of Inflation@2x (3).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Imports.png)

Imports saw an 8.2% decline year-on-year, while exports fell by 3.4% in Q2 2023

---

![Copy of Copy of Copy of Inflation@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Unemployement.png)

US unemployment rate rose to 3.8% in August, the highest since February 2022. Notably, the 3.4% in April was the lowest since 1969.

---

![Copy of Inflation@2x (1).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-31-Home_Price.png)

The average price of homes sold in Q2 2023 was $495,100, down from $552,600 in Q4 2022, while the median price dropped to $416,100 from a Q4 2022 high of $479,500.

---

Monthly Market and Economy Roundup - 31 August 2023



If you pay attention to the financial news, you’ve undoubtedly heard about 7% mortgage rates. The memes would have you believe the lucky few who purchased homes with 3% mortgage rates are living like kings, while the rest of us missed our golden opportunity and will be renting forever. After all, the price of housing is [supposed to go down](https://edition.cnn.com/2023/07/08/business/mortgage-rates-home-prices/index.html) when mortgage rates go up, but the U.S. housing market is still red-hot even after the rate hikes.

The truth is more complicated. While mortgage rates make a significant impact on how much you pay for a home, it might not necessarily be as large as you expect. For example, if you pay a 20% down payment on a $440,000 with 7% interest rate, you [would pay](https://www.wsj.com/personal-finance/what-7-mortgage-rates-mean-for-home-buyers-c5e88c1b?mod=personal-finance_lead_pos2) a monthly payment of $2,300. WIth a 6% interest rate, your payment would be $2,100. 

Both of those figures might sound too high, but it’s important to compare that monthly figure with the cost of renting. Also factor in other cost sources, such as local income tax, maintenance, and upkeep. Expected appreciation or depreciation should also go into your home-buying decision. One big difference between renting and owning? A mortgage locks in your monthly payment price, while renting fluctuates every time you renew. 

Many people don’t take the time to make that calculation, which is by far the most important one you can make in your home-buying journey. That’s exactly why we created the **[Xillion Mortgage Calculator](https://xillionapp.com/product/home-buying-guide/)** — it takes everything into account, and lets you know whether you should rent or buy a new home.

According to our research, the majority of renters do not take the time to compare the expected cost of renting versus buying a home. Oftentimes, these buyers simply rely on gloomy news headlines to decide they’ll never be able to afford a home — which often isn’t true. 

It’s easy to also get stuck in a pattern of wishful thinking. Instead of thinking about whether you should have purchased a house five years ago, focus on the decision today. Of course it would have been better to purchase with lower interest rates. But there is no point in dwelling in the past. And in fact, you can still reap considerable upside by making the right decision today. 

So don’t delay more. Go to Xillion and use our [Xillion Mortgage Calculator](https://xillionapp.com/product/home-buying-guide/) to make the optimal housing decision. You will reach your financial goals sooner, with the peace of mind of knowing you made the right call.


Beyond Interest Rates: Exploring Tax Benefits, Rent Costs, Appreciation, and More in Your Housing Decision


There are over 5,000 companies listed in the U.S., and if you're like most people just starting with investing, you might be scratching your head, thinking, "Where exactly should I invest?" It's a big question, and with so many options, it can feel a little overwhelming.

But hang on a minute. What if the answer isn't in a fancy financial report or a hot tip from a stock market guru? Here's a thought: Have you ever considered that what you do every day could be your secret weapon in the stock market? Seriously! Let's say you've been working in the SaaS industry for a couple of years. Well, congratulations! You probably know more about that space than most folks out there.

I know, I know, it might sound too simple, but hear me out. Warren Buffett, the big kahuna of investing, has this idea called the "circle of competence." Basically, he says that if you stick to what you know, you've got a good shot at success in the stock market.

So, that SaaS knowledge you've got? That's your circle of competence. It's like having insider info without the illegal part. You understand the industry, the trends, the ups and downs. You can spot a good deal or a bad one from a mile away.

Here's what you could do with that know-how:

- **Find the Hidden Gems**: Those companies that are doing great stuff but aren't on everyone's radar yet. You can spot 'em.
- **Avoid the Duds**: You'll recognize red flags that others might miss, saving you from a bad investment.
- **Enjoy the Ride**: Investing in something you know and care about can be genuinely enjoyable, like turning your hobby into a money-maker.

And here's the kicker: This doesn't just apply to your job. Are you a car enthusiast? A health nut? A tech geek? Whatever you know and love can be your investing superpower.

So take a minute to think about what you're good at. What do you know, like the back of your hand? That's where you might want to start looking for investment opportunities.

Remember, investing doesn't have to be about charts, graphs, and boring numbers. It can be about taking what you love and know and turning it into something even more valuable. Cool, right?

Which Stocks to Invest in?


When it comes to saving for your child's education, the 529 Savings Plan often comes up as a go-to option. Widely known for its tax benefits, including deductions from state taxes or tax-free withdrawals, it's no wonder why it is a popular choice. Despite its popularity, here's a detailed look at why the 529 Plan might not be the best option and how a Post Tax Brokerage account is better.

### 1. **Limited Investment Options**

The 529 Plans often come with a constrained set of investment options. Unlike a brokerage account, where you have the freedom to choose from a broad array of stocks, bonds, or mutual funds, 529 Plans restrict your ability to tailor your investment strategy to meet specific goals or risk tolerance. This limitation may hinder your ability to achieve decent returns. 

### 2. **No Flexibility with the Use of Funds**

The funds in a 529 Plan are strictly earmarked for qualified educational expenses. This lack of flexibility can be problematic if your child decides not to attend college or use the money to fund his or her business. In such cases, withdrawing the money for non-educational expenses results in taxes and penalties. Conversely, Post Tax Brokerage accounts have no such restrictions, clearly making them a more flexible option.

### 3. **High-Cost Funds, Hence Lower Returns**

Another drawback of 529 Plans is that they often include high-cost funds. The expenses related to managing these funds can significantly eat into your returns, especially over the long term. Even though they offer tax benefits, these may not offset the loss in returns due to higher costs. Post Tax Brokerage accounts generally come with lower fees, leading to better overall returns without the need for specific tax advantages.

![A typical 529 Savings Plan fund has an expense ratio ranging from 1% to 0.5%, which is over 10 times higher than that of a typical S&P 500 Index Fund.](https://d391fpr6ao9qle.cloudfront.net/images/blog/nh-2039-actively-managed-blend.webp)

```A typical 529 Savings Plan fund has an expense ratio ranging from 1% to 0.5%, which is over 10 times higher than that of a typical S&P 500 Index Fund.```

### 4. **Time Investment**

Time Investment in 529 Plans can be substantial due to their complexity and variation between states. Managing rollovers, tax deductions, and potential penalties requires navigating complicated rules which differ from state to state. You either invest significant time in understanding these complexities or hire a financial advisor, often at a 1% charge. Both options can add to the overall burden and cost of the investment, making 529 Plans a less appealing option for most.


### 5. **The Opportunity Cost of Money Locked for a Long Time**

Money invested in a 529 Plan is locked until it is used for qualified education expenses. While this helps ensure that the funds are used for their intended goal, it also means that the money is not available for appealing investment opportunities or emergencies. This opportunity cost may lead some to consider alternatives that allow for greater flexibility and the potential for higher returns in other areas.

![Comparison](https://d391fpr6ao9qle.cloudfront.net/images/blog/comparison-529-plans-brokerage.webp)

***Even after paying a 15% capital gains tax of $14,606, you'll be left with $136,767, which is $22,394 more than what you would otherwise have with a 529 Savings plan.***

Additionally, don't be misled by the term 'Index' in the names of some 529 Plans, such as 'NH Portfolio 2030 (Fidelity Index).' Though it might appear that you're investing in an index fund, the reality is different. In fact, 'NH Portfolio 2030 (Fidelity Index)' is a blend, comprising a U.S. Total Market Index fund, a Non-U.S. Index Fund, and 52% allocated towards debt. This composition has led to its performance being only half that of the Fidelity 500 Index Fund. These are not just theoretical concerns but actual facts that underline the importance of carefully examining the specifics of any fund labeled as an 'index' within a 529 Plan to ensure it meets your investment objectives.


![529 Index option only returned an annual average return of 6.61% over 10 year period while the Fidelity 500 Index Fund returned 12.65%, more than double the 529 Plan.](https://d391fpr6ao9qle.cloudfront.net/images/blog/fidelity-index-index-option.webp)
```529 Index option only returned an annual average return of 6.61% over 10 year period while the Fidelity 500 Index Fund returned 12.65%, more than double the 529 Plan.```


It's worth noting that some 529 managers do offer an S&P 500 or a U.S. Total Stock Market Index Fund. If you are living in a state that offers such an option, it could be a great choice. However, keep in mind that the money invested in a 529 Plan is locked away and can't be used for other investment opportunities in the future. Moreover, it doesn't save you from the time investment that goes into researching and managing your 529 Plan. So, take the time to work out your finances and see what makes the most sense for your individual situation.”

**Conclusion**

Post Tax Brokerage accounts are not just an alternative but a more adaptable and profitable option for saving for your child's education. The decision is clear: for those seeking investment freedom, flexibility in fund usage, and potential for better returns, Post Tax Brokerage accounts are the better choice. This is not just a possibility; it's a financially sound decision that aligns with the needs of modern families planning for their children's future.


Why Don't We Recommend 529 Plans for Saving for Kids’ Education?


Did you know that Ford makes [nearly as much](https://www.detroitnews.com/story/business/autos/ford/2020/02/03/fords-lending-arm-generating-profit-ever/41133523/) profit from auto loans as it does from manufacturing cars? The auto loan industry in the U.S. [generates](https://www.ibisworld.com/industry-statistics/market-size/auto-leasing-loans-sales-financing-united-states/#:~:text=The%20market%20size%2C%20measured%20by,was%20%24160.5bn%20in%202022) around $161 billion annually, which makes it larger by revenue than U.S. industries including newspapers, day care, movies, and home-building, according to IBISWorld estimates. These statistics show just how big (many would say “out of control”) the American auto-loan industry has become. 

It wasn’t always this way. In the 1950s, [around a third](https://www.nytimes.com/2007/07/28/business/yourmoney/28money.html) of car buyers in the U.S. paid with cash. But as debt became cheaper and more widely available, automakers figured out they could generate a significant profit by financing car purchases. 

In more recent years, Americans have started taking out longer and more expensive auto loans. Most auto loan terms tend to be between 24 and 60 months, but increasingly people are opting for 72-month and 84-month loans. Making matters worse, monthly payments are also [getting more expensive](https://www.wsj.com/livecoverage/stock-market-news-today-04-03-2023/card/more-car-payments-top-1-000-a-month-NhS62TR3lMgr5gtefZah). In 2019, only around 4% of auto loans had monthly payments over $1,000 per month. Now closer to 17% of auto loan payments are over that threshold. 

![Car Sales Payment](https://d391fpr6ao9qle.cloudfront.net/images/blog/car-sales-payment.webp)
[Source](https://www.wsj.com/livecoverage/stock-market-news-today-04-03-2023/card/more-car-payments-top-1-000-a-month-NhS62TR3lMgr5gtefZah)

Millions of Americans are stressing out over their monthly auto loan payment. In some cases, this is entirely by choice — some people just want to drive the latest Ford F-150 or Tesla Model X, both of which can often cost over $100,000. New cars sold [on average](https://www.wsj.com/articles/auto-dealers-finally-have-cars-to-sell-again-6ecff886) for $46,000 last year, which was well [over half](https://www.census.gov/library/publications/2022/demo/p60-276.html) of the real median household income. Used cars used to be an attractive option for many people, but in recent years their average cost has also gone up too.

As it turns out, automotive loans are one of the biggest financial decisions that many of us make. If you make a bad decision, it can set back your path to financial freedom by years. Why? Because if you’re young, all the extra money spent on a car could be going into markets, generating wealth over time.

That’s why it’s so important to avoid easy mistakes. It’s also why Xillion created an auto loan calculator that lets you put in inputs such as loan payment, term, and interest — we’ll show you exactly how your decision will impact your path to financial freedom. 

![Auto Loan Calculator](https://d391fpr6ao9qle.cloudfront.net/images/blog/xillion-auto-loan-calculator.webp)

If you’re in the market for a car, we recommend checking out the calculator (for free) at www.xillionapp.com/calculators/auto-loan-calculator. In the meantime, here are four of the biggest (and easiest to avoid) mistakes people make in purchasing a car and how to avoid them:

- **Brand matters, but not the way you think** It’s a mistake to think the brand of your car doesn’t matter — but it’s not because you need a flashy car brand. Rather, buy from an automaker that’s known for its reliability, safety, and durability. For most people in the U.S., Toyota, Subaru, and Honda are [great choices](https://cartelligent.com/how-long-do-people-keep-different-car-brands/). Of course, it’s always worth investigating the particular model and manufacturer before making a decision. But if you think you need a fancy car to validate yourself, remember — if a Prius is [good enough](https://www.cnbc.com/2018/08/21/9-billionaires-who-still-drive-cheap-hondas-toyotas-and-chevrolets.html) for Sergey Brin (and a Honda Accord for Jeff Bezos), then it’s probably good enough for you. 

- **If you are financing, shop around for loan options** Many buyers make the mistake of simply accepting the financing offered by the dealership without exploring other options. Take the time to explore other lending institutions, such as banks, credit unions, and online lenders. Dealerships can be pushy, but remember, you’re the one who has to live with the monthly payment. Even a seemingly small difference in interest rates can result in significant variations in your monthly payments and overall loan costs.

- **Term duration matters as much as monthly payment** A lower monthly payment can be deceiving — and, unfortunately, auto-loan companies know that. Use the Xillion calculator to figure out which option is really best in the long-term. And if you find savings that way, use our portfolio optimizer to invest the difference in markets for a long-term gain. 

- **Don’t forget to look for EV subsidies** Federal and state governments offer subsidies designed to encourage drivers to purchase EVs instead of gas vehicles. In some cases, the subsidies can run close to $10,000. It’s a huge benefit for Americans, and if you live in an area with convenient access to charging stations (or if you can charge at home) then it’s 100% worth looking into. 
 
Making a car-buying decision can be scary. And it’s certainly a decision that should not be taken lightly. Here at Xillion, we want to help you make sure you avoid the easy mistakes so that you can get to financial freedom faster. Before you make a decision, don’t forget to check out our auto-loan calculator! 


Don’t let a car be the reason you can’t retire. Four of the biggest auto-loan mistakes and how to avoid them.




Ever since interest rate hikes began in 2022, economic pundits have wondered whether the U.S. would be able to achieve a “soft landing.” In other words, would raising interest rates inevitably crash the economy? Or would the Federal Reserve succeed in slowly deflating overpriced assets, steering the economy toward a healthier future?

Interest rates are now at the highest level in 22 years, and the Fed has hinted it will hike them even higher. So where do we stand now? Things look good — really good, actually. The U.S. stock market is hovering near all-time highs, with the S&P 500 having fully recovered from a 25% dip in the first nine months of 2020. The U.S. still has a historically low unemployment rate of around 3%. And interest rate hikes have largely had their desired impact: inflation is down to just 3% from a high of 9% in 2022.

Despite all the positive signs, it’s still too early to declare a successful soft landing. If the economy were a SpaceX Falcon 9, it would be hovering close to the launchpad with the rockets still firing away. There are simply too many unknowns to give the all-clear signal. To list a few:

- **China’s economy is teetering on the brink of a debt crisis.** You may have seen Evergrande in the news recently. It’s a Chinese real estate developer that ran into a huge debt problem (to the tune of $340 billion) since it kept building new real estate projects using leverage, anticipating China’s middle- and upper classes would always demand more. Of course, as soon as the Chinese economy hit a rough patch, the demand shrank, and Evergrande ended up defaulting on billions of dollars in debt. The government intervened and helped to stabilize the situation. Still, the Evergrande story speaks to China’s debt problem and the lingering impacts of COVID lockdowns. The youth unemployment rate sits at over 21%, contributing to social unease. Any financial crisis in China would undoubtedly spill over to global markets, given China’s status as “the world’s factory” and the second-largest economy behind the U.S.
- **Decoupling from China.** America & other Western economies continue to decouple from China. This is resulting in more in-shoring & near-shoring, as witnessed by Mexico’s climb to the top position as a US trading partner. China’s cheap labor + capital, coupled with lax environmental standards, kept inflation artificially low for much of the developed world over the last few decades. It remains to be seen how inflation will play out once this decoupling has run its course.
- **Important economic indicators are still flashing red.** The U.S. bond market yield curve remains inverted. This happens when short-term bonds have a higher yield than long-term bonds, meaning investors are worried about longer-term uncertainty (hence higher short-term rates), but are confident of longer-term stability (hence lower longer-term rates). Reading between the lines, investors are worried about near-term problems such as debt and inflation, but they maintain confidence in the long-term success of the American economy. The Conference Board's leading economic index, a comprehensive amalgamation of key economic indicators, has been signaling trouble for some time. This index is intended to signal a potential slowing of economic activity, prompting investor caution.


![Yield_Curve.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-11-the-soft-landing-is-within-sight-but-not-guaranteed/Yield_Curve.webp)



![Conference_Board.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-11-the-soft-landing-is-within-sight-but-not-guaranteed/Conference_Board.webp)



- **Consumer sentiment** has improved, but it might not last. In July, U.S. consumer sentiment rose to a nearly two-year high of 72.6 on the University of Michigan's index, up from June's 64.4 and surpassing expectations. This surge reflects easing inflation worries and a strong job market. One reason for caution? J.P. Morgan CEO Jamie Dimon recently warned that U.S. consumers may be using up their savings due to inflation, which he says could result in a 2024 recession.



![Consumer_Sentiment.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-11-the-soft-landing-is-within-sight-but-not-guaranteed/Consumer_Sentiment.webp)


- **There are geopolitical threats** that could destabilize markets, especially energy prices. The war in Ukraine continues to weigh on global markets, adding an unpredictable dimension to global energy markets. Despite earlier declines, gas prices have recently spiked by nearly 30 cents to reach a national average of $3.82. This increase has been driven by OPEC+ (a coalition of oil-producing countries, including Russia) implementing output cuts to boost crude prices. Saudi Arabia also recently decided to maintain its production cut in a bid to increase energy prices. We believe this is a medium-term risk to Western economies. As more renewable sources come online, coupled with the promise of newer technologies like nuclear fusion, dependency on coal, oil & natural gas will decline substantially.

**Our take:** Xillion maintained throughout 2022 that the U.S. market remained an attractive investment. We cautioned against giving into market panic by pulling out investments. That turned out to be great guidance. If you took your money out of the S&P 500 in June of 2022, you would miss a 20% increase in investments. The markets can tell optimistic or pessimistic stories depending on your perspective. But our product optimizes for long-term success, and that means trusting the long-term growth of American stocks.

The soft landing is within sight but not guaranteed




After spending 15 years working in the data & AI space, I have been both mesmerized by its potential and humbled by its limitations.

The latest generation of generative AI tools such as ChatGPT are no different. These tools wow you instantly, but they can’t be trusted 100%, especially in areas where deep expertise is needed. And especially when your reputation or someone’s life is on the line!

Let me walk through an example. I was recently chatting with a Xillion customer about 401k deductions & its tax benefits. I needed a quick calculation on their expected tax savings from making 401k contributions pre-tax instead of post-tax.

I asked ChatGPT expecting a quick answer. It started on a promising note, giving details of federal tax brackets and the marginal tax rates. It also did the first part of the calculation right. Everything looked promising at first glance.

![ChatGPT1.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-11-promises-fallacies-fantasies-of-ai/ChatGPT_Tax_Blunder_01.webp)


But when it gave the final answer, it was completely wrong. It wasn’t even close. The result was 5x the approximate answer that I had roughly calculated in my head. I shared my own number with the customer and resolved to come back to research the miscalculation.

A bit of digging revealed that ChatGPT hallucinated and made up an imaginary number to calculate the marginal tax (see pic 2). It took me around 5 minutes to find the exact place where ChatGPT went wrong. I don’t know why it made up the number, and I don’t think even the creators of this algorithm would be able to pinpoint exactly why this happened. That one hallucination changed the equation completely and rendered the entire effort useless.



![ChatGPT2.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-08-11-promises-fallacies-fantasies-of-ai/ChatGPT_Tax_Blunder_02.webp)


Here’s my overall take on generative AI tools like ChatGPT: they’re great at regurgitating & repeating the information that has been available in public domain (the Internet) in large quantities for a long time. But they can’t do any real thinking, despite all the claims. I have spent a big chunk of my adult life building data & AI products, and I have seen that the promise of new technology generally exceeds its utility — sometimes by a wide margin.

What does all this mean for you? If you are a knowledge worker and you solve unique problems, focus on the aspects of your job that are unique to your job, company, industry, etc. For the things that are widely available — say, common programming patterns, creating documentation, etc. — use AI tools because those algorithms have been trained on millions of design documents, software programs, reports and such.

I use ChatGPT to augment my research, instead of using a search engine, because it provides well-organized information that is easy for me to consume. But when I’m working on something that puts my reputation on the line, I do not rely on AI output. Perhaps this is why students are some of the biggest users of Generative AI tools? Barring accusations of plagiarism, students face limited consequences for generative AI providing inaccurate information.

These accuracy pitfalls and domain limitations are exactly why I don’t expect AI tools to replace any meaningful part of knowledge jobs for the foreseeable future. While OpenAI and the AI industry are hard at work on making these products more accurate, these limitations are simply inherent to the technology. After all, generative AI is a word predictor: it uses the words before it to predict which word is most likely to come next. That isn’t thinking. At least not in the way we humans do it.

I would love to hear your thoughts. What do you think of generative AI? How big of a limitation is the accuracy problem? How do you use AI in your work?


Promises, Fallacies & Fantasies of AI


# U.S Economic Insights

In July, the US economy displayed a strong performance with an uptick in GDP and a robust rally in the financial markets. Tech giants reported strong earnings, while crude oil, gold, and copper surged significantly. However, export activity and home prices hinted at potential challenges.

Here are the key highlights,

![Real_GDP_10Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/1.webp)

**Real GDP:** The **_US economy grew by 2.4% in Q2 2023._** This was quicker than the 2.0% growth we saw in Q1. This surge can be attributed mainly to rising consumer expenditure and corporate investment. However, a decline in export activity partially counterbalanced these gains. Interestingly, imports, which negatively influence the GDP calculation, also fell this quarter.

---

![Broad_Market_Indices@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/2.webp)

**Stock Market:** The **_Dow closed higher for 13 straight sessions in July, its longest series of positive closes since 1987_** Russel 2000, Nasdaq 100, Dow Jones, and S&P 500 closed with month with 6.06%, 3.81%, 3.35%, 3.11% gains, respectively.

---

![Sectoral_Performance@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/3.webp)

**Sectoral Performance:** All the **_Sectoral Indices ended the month with gains,_** with Energy, Communications Services, and Financials taking the top spot.

---

**Big Tech Earnings**

**Microsoft** reported stronger-than-expected Q4 earnings, surpassing estimates on several key metrics, including revenue of $56.19B. However, annual sales growth moderated to 7% in 2023, and cloud growth decelerated, causing some to question the hype around AI.

**Alphabet** delivered robust Q2 results, outperforming expectations with a revenue of $74.60B and an EPS of $1.44. All units, including Google Cloud, which reported another profitable quarter, surpassed estimates.

**Meta's** Q2 earnings surpassed expectations, with a 12% rise in ad revenue, supported by improved monetization of Reels.

**Tesla's** Q2 earnings revealed impressive performance, marking the fifteenth consecutive quarter of profit, with earnings beating both profit per share and revenue expectations.

---

![Active_Fund_Manager_Equity_Exposure@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/4.webp)

**Active Fund Manager Equity Exposure:** For the first time since November 2021, Active Fund Manager Equity Exposure surged beyond 100%, showing an **_exceptionally robust sentiment_**.

---

![Commodity Prices_July@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/5.webp)

**Commodity Prices:** **Crude oil prices saw a remarkable rally of more than 14% in July.** During the same time, Gold and Copper surged over 4% each.

---

![Inflation Rate_2Years @2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/6.webp)

**Inflation** in the US, as measured by the change in the Consumer Price Index (CPI), **_declined to 3%_** on a yearly basis in June from 4% in May, **_Core CPI inflation_**, which excludes volatile food and energy prices, **_dropped to 4.8% from 5.3%._**

---

![Federal_Funds_Effective_Rate_10Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/7.webp)

**Federal Funds Rate:** The US Federal Reserve **_hiked its benchmark interest rates to 5.25-5.5%_**, the highest since 2001, to counteract persistently high inflation. Fed Chair Jerome Powell hinted at further increases, supporting goals of maximum employment and 2% long-term inflation.

---

![download (4).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/8.webp)

**Consumer Confidence Index**: Conference Board's US **_consumer confidence index surged to 109.7, the highest level since the beginning of last year_**, driven by increased optimism about the labor market and economic growth, surpassing all economist estimates.

---

![Initial_Claims_1Y@2x (2).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/9.webp)

**US weekly jobless claims** dropped to 221,000, a decrease of 7,000 from the previous week's level of 228,000.

---

![New_Residential_Construction_and_Hom_Sales_3Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/10.webp)

**New Home Sales and New Residential Construction:** Sales of new single‐family houses in June 2023 were at a seasonally adjusted annual rate of 697,000. Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,440,000. This is 3.7% below the revised May rate of 1,496,000 and 15.3% below the June 2022 rate of 1,701,000.”

---

![Median_Price_of_Home_Sold_in_the_US@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/11.webp)

**Home Prices:** The **_median price of a home sold in the US stood at $416,100 in Q2_**, 2023, down over 13% from the all-time high of $479,500 in Q3, 2022.

---

Overall US economy displayed resilience and expansion, reflecting positive consumer sentiment and strong corporate earnings. Despite declining home prices and surging commodity prices, booming equity markets indicate promising prospects for future growth.

## How does all this impact my portfolio & finances?

Create an account with [Xillion](https://xillionapp.com), and we will help you navigate changing economic scenario.

Get this report delivered to your inbox every month for FREE by signing up for [Xillion](https://xillionapp.com) today.


Monthly Market and Economy Roundup - 31 July 2023


In July, the US economy demonstrated a strong performance with a notable uptick in GDP and a robust rally in the financial markets. Tech giants reported strong earnings, while crude oil, gold, and copper surged significantly. However, export activity and housing sales hinted at potential challenges.

The US economy grew by 2.4% in Q2 2023. This was quicker than the 2.0% growth we saw in Q1. This surge can be attributed mainly to rising consumer expenditure and corporate investment. However, a decline in export activity partially counterbalanced these gains. Interestingly, imports, which negatively influence the GDP calculation, also fell this quarter.

![Copy of Real_GDP_3Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/1.webp)

The Dow closed higher for 13 straight sessions in July, its longest series of positive closes since 1987; Russel 2000, Nasdaq 100, Dow Jones, and S&P 500 closed with month with 6.06%, 3.81%, 3.35%, 3.11% gains, respectively.

![Broad_Market_Indices@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/2.webp)

All the Sectoral Indices ended the month with gains, with Energy, Communications Services, and Financials taking the top spot.

![Sectoral_Performance@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/3.webp)

Microsoft reported stronger-than-expected Q4 earnings, surpassing estimates on several key metrics, including revenue of $56.19B. However, annual sales growth moderated to 7% in 2023, and cloud growth decelerated, causing some to question the hype around AI.

Alphabet delivered robust Q2 results, outperforming expectations with a revenue of $74.60B and an EPS of $1.44. All units, including Google Cloud, which reported another profitable quarter, surpassed estimates. Despite concerns about AI impacting search advertising, no such signs were apparent.

Meta's Q2 earnings surpassed expectations, with a 12% rise in ad revenue, supported by improved monetization of Reels.

Tesla's Q2 earnings revealed impressive performance, marking the fifteenth consecutive quarter of profit, with earnings beating both profit per share and revenue expectations. Successful cost reduction strategies, production ramp-ups, and strong performance in energy and services helped the company maintain a healthy operating margin.

For the first time since November 2021, Active Fund Manager Equity Exposure surged beyond 100%, showing an exceptionally robust sentiment.

![Active_Fund_Manager_Equity_Exposure@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/4.webp)

Crude oil prices experienced a remarkable rally of more than 14% in July. During the same time, Gold and Copper surged over 4% each.

![Commodity Prices_July@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/5.webp)

Inflation in the US, as measured by the change in the Consumer Price Index (CPI), declined to 3% on a yearly basis in June from 4% in May, Core CPI inflation, which excludes volatile food and energy prices, dropped to 4.8% from 5.3%.

![Inflation Rate_2Years @2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/6.webp)

The US Federal Reserve hiked its benchmark interest rates to 5.25-5.5%, the highest since 2001, to counteract persistently high inflation. Fed Chair Jerome Powell hinted at further increases, supporting goals of maximum employment and 2% long-term inflation.

![Federal_Funds_Effective_Rate_10Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/7.webp)

Conference Board's US consumer confidence index surged to 109.7, the highest level since the beginning of last year, driven by increased optimism about the labor market and economic growth, surpassing all economist estimates.

![download (4).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/8.webp)

US weekly jobless claims dropped to 221,000, a decrease of 7,000 from the previous week's level of 228,000.

![Initial_Claims_1Y@2x (1).png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/9.webp)

Sales of new single‐family houses in June 2023 were at a seasonally adjusted annual rate of 697,000. Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,440,000. This is 3.7% below the revised May rate of 1,496,000 and 15.3% below the June 2022 rate of 1,701,000.

![New_Residential_Construction_and_Hom_Sales_3Years@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/10.webp)

The median price of a home sold in the US stood at $416,100 in Q2, 2023, down over 13% from the all-time high of $479,500 in Q3, 2022.

![Median_Price_of_Home_Sold_in_the_US@2x.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-07-31-economy-roundup-2023-07-31/11.webp)

July's economic activity displayed resilience and expansion, reflecting positive consumer sentiment and substantial corporate earnings. Despite declining home prices and concerns over AI's hype, the surging commodity prices, lower inflation rate, and booming equity markets indicate promising prospects for future growth.


Weekly Market and Economy Roundup - 31 July 2023


In today's consumer-centric society, the temptation to spend money on non-essentials is always lurking. The keys to financial security often lie in the little things—small, everyday decisions can have a big impact on your financial health. If you want to stretch your budget, here are three simple yet effective tricks to help you save money.

## **The One-Week Rule**

**Do you need that new gadget, or is it just a desire?**

Often, we make purchases on a whim, only to regret them later. This is where the one-week rule comes in handy. If you're considering a big purchase, don't rush. Wait for a week, giving yourself time to ponder whether you truly need the item. This waiting period can differ between a wise decision and an impulse buy.

Think of it this way—it's like a cooling-off period, a time to detach from the immediate desire and examine the purchase logically. More often than not, you'll find that the urge to buy diminishes over time. You might even realize you didn't need the item in the first place, saving you significant money.

## **The Hourly Pay Equivalency**

**Is that new pair of shoes worth five hours of your hard work?**

Another effective way to curb unnecessary spending is by equating the cost of an item with the equivalent of your hourly pay. Let's say you earn $20 an hour and are considering buying a $100 jacket. Is the jacket worth five hours of your work? Visualizing the cost in terms of time and effort often puts things in a new perspective and discourages frivolous spending.

This money management method can make you think twice before parting with your hard-earned cash. It allows you to measure the worth of an item in terms of your time, making it easier for you to evaluate whether a purchase is truly worthwhile.

## **The Savings-First Approach**

**Why touch what you don't see?**

One of the most effective ways to save money is to set aside a portion of your earnings as soon as you receive them. By doing this, you're treating savings as an important and non—negotiable expense.

Consider setting up a separate account for this portion of your earnings. Make it a point not to touch this money for regular expenses. This out-of-sight, out-of-mind approach can help you build a substantial savings fund.

It might be challenging initially, but as you make it a habit, you'll start feeling more financially secure knowing you have a safety net.

Saving money doesn't have to be a struggle. Implementing these simple tricks allows you to improve your financial health without drastically changing your lifestyle. Remember, it's the small, consistent efforts that often lead to significant results. So, why not start today? After all, the journey to financial security starts with a single step—or in this case, a single penny saved.


3 Simple and Easy Tips to Save More Money


Welcome to our June 2023 Economic Update. The past month has presented a dynamic landscape in the U.S. financial markets, filled with rallying indices, shifting inflation rates, and various other economic indicators making waves. Let's dive into the key highlights.

1️⃣ **Stock Market Rally:**

June saw a healthy surge in the stock markets. The S&P 500 & tech-dominated Nasdaq spiked 6.5%. Nasdaq 100 Index marked its second-best half-year performance in history with a 39% gain, fully recouping losses from Federal Reserve rate hikes.

![Stock_Market_Performance](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Stock_Market_Performance@2x.png
)

2️⃣ **Inflation Rate:**

The US inflation rate declined to 4.0% in May 2023, marking the lowest point since March 2021. The core inflation rate, which excludes volatile items like food and energy, also dropped to 5.3%, the lowest since November 2021.

![Inflation](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Inflation@2x.png
)

3️⃣ **Federal Reserve Interest Rate:**

The Federal Reserve maintained its key interest rate at approximately 5% for June 2023, indicating a pause in its monetary tightening policy. However, the Fed hints at potential rate hikes should inflation persist.

![Federal_Funds_Rate](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Federal_Funds_Effective_Rate.png
)

4️⃣ **Rising Credit Card Delinquency:**

The credit card delinquency rate in the US has climbed to 2.43% in Q1 2023 from 1.67% in Q1 2022, reflecting an increasing struggle among consumers to meet their credit card payments.

![Consumer_Loans_Delinquency_Rate](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Consumer_Loans_Delinquency_Rate.png
)

5️⃣ **Housing Market Adjustments:** 

The median sales price for new houses sold in the United States fell to $420,800 in April 2023, following a high of $496,800 in October 2022. Nevertheless, prices have risen approximately 35.7% since April 2020.

![Median_Sales_Price_for_New-Houses_Sold_in_the_US](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Median_Sales_Price_for_New_Houses_Sold_in_the_United_States.png
)

6️⃣ **Heavy Truck Sales:** 

In a promising sign of economic recovery, US heavy truck sales have returned to their pre-Covid level of 560k units.

![Motor_Vehicles](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Motor_Vehicle_Retail_Sales_Heavy_Weight_Trucks.png
)

7️⃣ **Consumer Sentiment:** 

Consumer sentiment rose to 63.9 in June from 59.2 in May. Despite being at a four-month high, the index remains historically low, hinting at consumers' expectations of future economic challenges.

![Consumer_Sentiment_Index](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Consumer_Sentiment.png
)

8️⃣ **Weekly Jobless Claims:** 

US weekly jobless claims have dropped by 26,000 to 239,000, marking the largest decline in 20 months. This unexpected dip suggests resilience in the U.S. economy.

![Initial_Claims](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Initial_Claims.png
)

9️⃣ **Industrial Production:** 

The US Industrial Production shrank by 0.2% in May, against the prediction of a 0.1% growth. While the manufacturing index saw a slight uptick, the indexes for mining and utilities both witnessed drops.

![Industrial_Production_Index](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-30-june-monthly-insights/Industrial_Production_Index.png
)

Despite some challenges, overall, the U.S. economy has shown signs of resilience and recovery. Stay tuned for our next update as we continue to navigate this ever-changing economic landscape.

Monthly Economic Insights - June 2023


You've probably heard about day trading and how it can magically turn you into a millionaire overnight, right? It sure sounds tempting, but let's get real. The cold, hard truth is that about 95% of day traders actually end up losing money. Shocking, right?

You might wonder, "If so many people are losing money, who's making all the profits?" That's where 'quant funds' come into the picture. These are the big players who are really good at making profits from the losses of regular traders.

How do they do it? Let's take a look at a guy named Jim Simons. His story is told in the book "Jim Simons: The Man Who Solved The Market," and it's a really good guide to how the stock market works.

According to Simons, there are three things you need to win at active trading:

1. A pack of tech geniuses who eat, sleep, and breathe code.
2. An exclusive stash of data gathered from all corners of the globe and every segment of the economy.
3. A beast of a computer that can run algorithms designed by your genius squad and fed by your unique data.

Simons used these three things when he started Renaissance Technologies (RenTec) in the early '80s. How well did he do? His fund made an amazing 66% return every year from 1988 to 2018, while the S&P 500 only made about 8% per year in the same period.

Are you trading stocks without these three things? If so, you're probably losing money, and that money is probably going to firms like RenTec. So, if someone tries to sell you a course on day trading, remember: if they were really making money on the market, they wouldn't need to sell you anything. Simons, for example, never sold any courses because he was busy actually making money.

Feeling a bit down? Don't! Even if you're a small investor, you can still win at the stock market game. While firms like RenTec are good at short-term trading, you can use your knowledge and passion for certain industries to predict long-term trends. It will take some work—about 5-10 hours of reading and research every week—but it's definitely worth it.

So, instead of losing money by day trading, why not invest for the long term? And remember, even RenTec found out that they can't keep making money once their fund grows beyond around $10 billion. This shows that even the biggest players in the stock market have limits, which means we regular folks have a chance to succeed in our investments too.


Can you make money by day trading in stocks?


Welcome to this week's edition of the Economy and Stock Market Roundup. As we navigate through the complexities of the global economy,

This week, we delve into a range of topics, from the impact of interest rate hikes on the U.S. stock market and housing prices to the political implications of Argentina's soaring inflation rate. We also cover the Bank of England's decision to raise its benchmark interest rate to a level not seen since 2008 and Federal Reserve Chair Jay Powell's defense of the recent pause in rate hikes. Lastly, we highlight Warren Buffett's record-breaking charitable contributions, which now total over $51 billion.

**Markets End Losing Week Amid Economic Concerns**

U.S. equities ended the week with losses due to growing concerns that more Federal Reserve interest rate hikes could slow economic growth. The Dow, S&P 500, and Nasdaq all slipped more than 1% for the week. Tech stocks, which had posted solid gains earlier in the week, reversed course and were the biggest drag on the market. IBM, Microsoft, Salesforce, and Tesla shares dropped more than 1%.

**Higher Interest Rates Impact U.S. Home Prices**

U.S. existing home prices fell in May from a year earlier by the most in over 11 years. This decline is attributed to the rise in interest rates, making mortgages more expensive and dampening the demand for homes. This is a significant shift in the housing market, which has been experiencing a boom due to low-interest rates and increased demand during the pandemic.

**Argentina's High Inflation Rate Influences Political Shift**

Argentina is experiencing an annual inflation rate of 114%, the world's third-highest, leading to a shift in political preferences. The rising cost of living has increased the number of people unable to afford basic necessities from 30% in 2018 to 43% today. This economic crisis is influencing voters to favor politicians who offer radical solutions to the country's economic problems.

**Bank of England Raises Interest Rate to 5%**

The Bank of England (BoE) has increased its benchmark interest rate by 0.5 percentage points to 5%, the highest level since 2008. This marks the 13th consecutive rate hike since December 2021 as the central bank grapples with high inflation. The UK's consumer price index rose by 8.7% in the 12 months to May, and core CPI, excluding energy, food, alcohol, and tobacco products, rose by 7.1% in the same period.

**Fed Powell Says June Rate Pause 'Prudent' but US Inflation Battle Not Over**

Federal Reserve Chair Jay Powell defended the decision to forgo an interest rate rise at the recent policy meeting but signaled that the battle against inflation is not yet finished. Powell stated that skipping a rate rise last week was "prudent" given "how far and how fast" the Fed has lifted its benchmark rate since March 2022. However, he hinted that the central bank still has more to do in terms of squeezing the economy to get inflation under control.

**Warren Buffett's Charitable Giving Tops $51 Billion**

Warren Buffett has donated another $4.64 billion of Berkshire Hathaway stock to five charities, bringing his total giving since 2006 to more than $51 billion. The annual donation is Buffett's largest and consisted of about 13.7 million of Berkshire's Class B shares. The majority of the shares were donated to the Bill & Melinda Gates Foundation, which has received more than $39 billion of Berkshire stock overall. Buffett is gradually giving away nearly all of the fortune he built at Berkshire Hathaway, which he has run since 1965.

As we conclude this week's roundup, allow us to introduce you to a tool that can help you take control of your financial future: [Xillion's Financial Independence Tool (FIT)](https://xillionapp.com/product/financial-independence/)

FIT is not just a tool, but your personal financial playground. It allows you to project your future net worth, track your individual asset's performance over time, and even play around with the asset mix to see how it impacts your future net worth and financial independence plan.

Whether your goal is buying a home, a car, planning a vacation, or sending your kid to college, Xillion keeps track of these goals along with your financial independence goal. All you need to do is link your bank and retirement accounts, add your real estate and other assets, and set your financial independence target. Our algorithm does the rest, forecasting your net worth and assets, and planning your financial independence right at your fingertips.

So why wait? Start your journey towards financial independence with Xillion today. See you next week!

Weekly Market and Economy Roundup - 24 June 2023



Welcome back to the Xillion weekly recap for June 16! This week, we look at the Fed’s big decision, China’s economic recovery, and Beyoncé’s role in Swedish inflation (not kidding).

**The Federal Reserve announced that it would pause rate hikes.** After ten consecutive rate hikes, the Federal Reserve [decided](https://www.wsj.com/articles/fed-interest-rate-your-money-59578a4b) to give the U.S. market a reprieve and hold interest rates steady. The decision comes even as the U.S. labor market remains near historically low levels of unemployment. If you’re surprised to hear this, that’s probably because you are a knowledge worker — the labor market has been particularly favorable to service workers, while knowledge workers have been impacted by tech and bank layoffs.

What does the rate hike mean? Most directly, it means the cost of borrowing money won’t go up even further. For consumers, that impacts mortgages, auto loans, and credit card rates. Markets reacted favorably to the interest rate pause, but the Fed isn’t likely to stop here.

**Meanwhile, the reserve bank in China actually cut interest rates to stimulate spending.** The People’s Bank of China is responding to a slower-than-anticipated economic recovery. China’s property market and consumer spending [have both](https://www.bloomberg.com/news/articles/2023-06-15/china-s-recovery-weakens-as-industrial-retail-activity-slow?campaign_id=4&emc=edit_dk_20230615&instance_id=95105&nl=dealbook&regi_id=83898312&segment_id=135632&srnd=premium-asia&te=1&user_id=021de9cb2594a2cb417a3eb1198a2dc8) struggled in recent months. Chinese Premier Li Qiang [said](https://www.wsj.com/articles/chinas-stimulus-pivot-is-prompted-by-fears-slowing-growth-could-worsen-5d35d34?mod=hp_lead_pos2): “The external environment is becoming more complex and severe, and the slowdown in global trade and investment will directly affect the recovery process of our country’s economy.”

On a related note, China’s tech stocks haven’t experienced the same AI boost as their American counterparts. Alibaba’s stock price is basically flat since the beginning of the year. Baidu and Tencent fared better, as they were up 26% and 11% since the beginning of the year, respectively. Still, those figures pale in comparison to the performance of American tech stocks.

![BIDU](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-06-16-economy-roundup-2023-06-16/BIDU_2023-06-17_11-25-39.png
)

**Is Beyoncé responsible for inflation in Sweden?** It sounds ridiculous (and it is) but economists at Danske Bank claimed that Beyoncé’s concert in Stockholm impacted nationwide inflation. Many of the 46,000 concert-goers are traveling from abroad just to see the two concerts. They are driving up demand for hotels and dining. The chief economist [explained](https://www.ft.com/content/abc431c4-426d-4a9f-9674-f437ed504eb7?campaign_id=4&emc=edit_dk_20230615&instance_id=95105&nl=dealbook&regi_id=83898312&segment_id=135632&te=1&user_id=021de9cb2594a2cb417a3eb1198a2dc8) how the concert contributed to 0.2% of the rise in inflation, noting: “Beyoncé is responsible for the extra upside surprise this month. It’s quite astonishing for a single event. We haven’t seen this before.”

**Financial tip of the week:** For your 401k, it’s best to avoid target date funds because they have higher fees. What should you do instead? Invest in low-cost index funds. Xillion [can help you](https://twitter.com/gags_sandhu/status/1668521629536645122?s=20) figure out which funds are best aligned with your financial goals. We recently created an index fund comparison tool that will help you compare different options and customize your portfolio based on your risk preference.

Weekly Market and Economy Roundup - 16 June 2023



Welcome to the first Xillion weekly recap! We’re experimenting with this format to bring you a roundup of the most interesting, relevant market news. Subscribe to Xillion accounts to get a fresh edition every Friday!

This was an exciting week, as Apple gave us a preview of its vision for spatial computing, the stock market officially entered Bull territory, and Saudi Arabia continued to flex its dealmaking muscles. Plus, we preview the Fed’s big upcoming decision.
	
![Apple](https://d391fpr6ao9qle.cloudfront.net/images/blog/AAPL_5_Year.webp)

**Investors aren’t convinced by Apple’s foray into AR.** On Monday, Apple unveiled Vision Pro, its VR / AR headset. The stock briefly [hit an all-time high](https://www.cnbc.com/2023/06/05/apple-shares-on-pace-for-record-high-ahead-of-vr-headset-unveiling.html) leading up to the annual Worldwide Developers Conference, but it proceeded to dip after the actual unveiling.

One of the big hang-ups? The price tag of $3,500. In one [viral video](https://youtu.be/4swt0pm6K8s), an audience audibly gasped after Tim Cook announced the price tag. Apple-believers point to the high initial price point of the first iPhone, which many people considered too expensive to succeed. Others, such as NYU professor Scott Galloway, think it might be time to finally bet against Apple. Galloway [wrote](https://www.profgalloway.com/isnt-that-spatial/): “The Vision Pro demo video is a Covid time capsule: a parade of solitary, indoor individuals. The brief family scenes are cringe-worthy.”

Meta is another interesting facet of this. It’s stock dipped after the event, likely because people worry Apple will eat its lunch on the metaverse bet. The companies have very different visions for the virtual world — Apple seems to think it will look a lot like a regular computer interface but bigger, and Meta is betting on a video game-style, cartoonish metaverse. Meta has been trying to curtail its spending in recent months — though the efforts come after it spent $13.7 billion on the Reality Labs division last year. One initiative? Return to work. Last Thursday, Meta [called employees back](https://www.cnbc.com/2023/06/01/meta-will-require-employees-to-return-to-the-office-three-days-a-week-starting-in-september.html) into the office for a minimum of three days a week. This seemingly goes against Meta’s COVID-era bullishness on the corporate metaverse and work-from-anywhere policy.

![Xillion%20Market%20and%20Economy%20Roundup_%20June%209,%202023%20d101754f23954e6e9c06ba930b950b72/image2.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/Tech_5_Years.webp)

**The Bull is back.** Amid all the talk of a recession, the S&P 500 officially [entered](https://www.wsj.com/livecoverage/stock-market-today-dow-jones-06-08-2023/card/s-p-500-heads-into-close-on-track-to-start-a-new-bull-market-EqBNAgVJ10k8mjSK0Ufb) a bull market on Friday, rising 20% from its low in October of 2022. The index is still below its all-time high.

Tech has been a big driver of the bull run. Six of the seven highest-valued companies now make up 28% of the total S&P 500 value. Those companies had a [tremendous run this year](https://www.cnn.com/2023/06/09/investing/bull-market-artificial-intelligence/index.html): Apple, Amazon, and Google are up more than 40%, Tesla is up 90%, Meta is up 120%, and [Nvidia](https://g.co/finance/NVDA:NASDAQ) is up more than 170%.

This group of companies is benefiting in part from the arrival and hype behind generative AI. Nvidia [crossed](https://www.theverge.com/2023/5/30/23742123/nvidia-stock-ai-gpu-1-trillion-market-cap-price-value) the trillion-dollar market cap threshold on May 30th. The company makes advanced graphics processors that can be used to run and train AI programs. It sells many of those advanced chips to public cloud companies such as Amazon, Google, and Microsoft.

**Saudi Arabia makes big moves.** LIV Tour and the PGA [announced](https://www.wsj.com/articles/pga-tour-deal-with-liv-golf-puts-sponsors-on-the-spot-4800c1c8) a merger deal after months of intense, acrimonious battle over the future of golf. The deal included an agreement to end all ongoing lawsuits between the two organizations. Importantly, however, it [could face](https://www.theatlantic.com/ideas/archive/2023/06/pgi-tour-liv-golf-antitrust-merger/674332/) antitrust review which might prevent it from going through.

In more relevant news for global markets, Saudi Arabia [announced](https://apnews.com/article/opec-oil-prices-saudi-arabia-russia-8d70999cb8258aebc3edbfdfcae278b7) earlier this week that it would further cut oil production in an effort to stabilize the market — which will likely mean higher energy prices.

![Xillion%20Market%20and%20Economy%20Roundup_%20June%209,%202023%20d101754f23954e6e9c06ba930b950b72/image3.png](https://d391fpr6ao9qle.cloudfront.net/images/blog/Unemployment_Rate.webp)

**Unemployment is still low.** Last month, the U.S. economy [added](https://www.wsj.com/articles/may-jobs-report-unemployment-rate-economy-growth-2023-65ae1e96) 339,000 jobs. That meant the unemployment rate stood at 3.7% — only slightly higher than the recent historic low of 3.4%. It will be interesting to see how the Fed reacts. Some analysts believe the Fed could take this as a sign that they can continue to hike interest rates, since the labor market has held up well thus far. The decision will come next week. We’ll see you on the other side!

Weekly Market and Economy Roundup - 9 June 2023


Our May 2023 economic insights summary:

1. [NASDAQ 100 Index Rallied 8.4% in May, Fueled by AI Stocks.](https://www.cnbctv18.com/technology/snp-500-rally-2023-nasdaq-apple-microsoft-nvidia-alphabet-amazon-meta-ai-gains-16816791.htm)
   So far, in 2023, the index has returned 31%. Surprisingly 70% of the gains came from 6 stocks; Apple, Microsoft & Nvidia, Meta, Amazon, and Alphabet.

2. [US House Passes Debt Ceiling Deal.](https://www.theguardian.com/business/live/2023/may/31/debt-ceiling-vote-house-republicans-mccarthy-biden-live-updates?filterKeyEvents=false&page=with:block-64773b518f08d8830e5af63c)
   The House approved a bill to raise the nation's debt ceiling while cutting some government spending over the next two years, averting a default crisis.

3. [US Interest Rates Raised to Highest Level in 16 Years.](https://www.cnbc.com/2023/05/03/fed-rate-decision-may-2023-.html)
   The Federal Reserve approved its 10th interest rate increase since March 2022, bringing the Fed funds rate to the target range of 5% to 5.25%. The Fed also dropped a tentative hint that the current tightening cycle is at an end.

4. [Unemployment Rate Falls to 3.4% in May, Lowest Since 1969.](https://www.bls.gov/news.release/pdf/empsit.pdf)
   The U.S. unemployment rate fell to 3.4% in May. The economy added 253,000 jobs, beating expectations of 200,000. The labor force participation rate remained unchanged at 63.2%. The number of people who are employed is now at a record high.

5. [US Inflation Below 5% for First Time in Two Years.](https://www.bbc.com/news/business-65547974)
   In April 2023, inflation was 4.9%, down from 5% in March, which is the lowest inflation rate in two years. However, inflation is still well above the Federal Reserve's target of 2%.

6. [Median Home Price Down Over 15% Since Oct 2022.](https://www.usatoday.com/story/money/2023/05/31/is-housing-market-going-to-crash/70260153007/)
   The median sales price of new single-family homes in April declined to $420,800 from a median price of $455,800 in March. The median home price in Oct 2022 was $496,800. The slump comes amid a rapid rise in mortgage rates.


Monthly Economic Insights - May 2023


Our April 2023 economic insights summary:

1️⃣ **The U.S. economic growth slipped in the first quarter amid still-high inflation and rising interest rates.**

[Real GDP](https://www.wsj.com/articles/us-gdp-economic-growth-first-quarter-2023-2ff4348c) growth was likely around 1.1% in the first quarter, slower than 2.6% in the fourth quarter of 2022. Many economists expect the economy to slow even more as the year progresses, predicting a recession in the second half of the year as the Federal Reserve continues its campaign to cool the economy and lower inflation.

2️⃣ **The U.S. unemployment rate fell to 3.5%**

[Employers added 236K jobs](https://www.nytimes.com/2023/04/07/business/economy/march-jobs-report-unemployment.html), down from an average of 334K over the prior six months. The year-over-year growth in average hourly earnings also slowed, to 4.2 percent, the slowest pace since July 2021.

3️⃣ **Inflation is cooling because of the slowing economy.**
Consumer Price Index (CPI) rose at an annual rate of 5% in March, [its lowest level since 2021](https://www.forbes.com/advisor/investing/current-inflation-rate/). CPI was down from a 6% year-over-year gain in February and below the 5.3% gain economists expected. Food prices were flat month-over-month and up 8.5% compared to a year ago. Energy prices were down 3.5% compared to February and are down 6.4% over the past 12 months. Used car prices were down 0.9% compared to February and 11.2% compared to March 2022.

4️⃣ **The housing market is slowing down.**
The [mortgage applications were up 10 percent](https://www.nytimes.com/2023/04/29/business/spring-housing-market.html), but the number of homes for sale is low. The mismatch is partly caused by homeowners who are inclined to sell but are sitting on the sidelines, scared off by the steep prices and mortgage rates they would face as buyers.


Monthly Economic Insights - April 2023


**🚨 🏦 Weekly Fed update 🚨 🏦 Here are the macroeconomic highlights:**

**1️⃣Wages are still growing.** In the first three months of 2023, employers spent 1.2% more on wages in the U.S. This may seem surprising if you are a knowledge worker, especially in tech, which has been hit hard by the interest rate hikes. But demand remains strong in lower-wage jobs, especially the service sector, construction, and hospitality.

**2️⃣ Inflation is sticking around.** Consumer inflation (as measured by the wonky personal-consumption expenditures price index) dropped to 4.2% in March compared to 5.1% in February.

**3️⃣ The economy is slowing down.** U.S. GDP growth is slowing down, in spite of the relatively strong jobs market. Consumer spending has remained around the same levels for the past two months.

**4️⃣ And still, signs point to yet another rate hike.** The Fed gets to decide on rate hikes next week, and many are predicting a 0.25% increase. That would slow down the econo


A Weekly Fed Update on the Latest Macroeconomic Highlights


🥑 Millennials are fed up — and it’s not from eating too much avocado toast! **Rather, they are tired of bad, condescending financial advice 🙅‍♂️**

Avocado toast became a symbol of this problem. The **"avo toast myth"** came into being when Tim Gurner, an Australian real estate tycoon, told 60 Minutes that young people could afford to buy homes if they simply made better financial decisions, like no longer buying “smashed avocado for $19 and four coffees at $4 each.”

This struck Millennials as ridiculous, and the data is on their side. Housing affordability in the U.S. hit another all-time low last year. According to research from Redfin, only 21% of homes in the U.S. were “affordable,” as defined by having mortgages below 30% of local median income. Residential housing value has gone up and up in recent decades. That raised the net worth of older generations, but it also locked younger generations out of the housing market.

In truth, the way to build wealth isn’t by skipping avocado toast or morning coffee. Sure, dining out can become a significant cost when done in excess. But the path to financial freedom is more about making the right financial decision early on, and letting time work its magic ⏲

[Xillion](https://my.xillionapp.com) can help put you on the path toward financial freedom, whether through our [Portfolio Optimizer](https://my.xillionapp.com/product/portfolio-analyzer), our [Mentor service](https://my.xillionapp.com/product/mentoring), or the [Home Buying Guide](https://my.xillionapp.com/product/home-buying-guide). And we promise, at no point will we tell you to stop buying avocado toast!


The Avocado Toast Myth: Millennials Seek Financial Advice Beyond Condescension


Remember, just because you don't see the fees being deducted doesn't mean they aren't there.

By spending just 10 minutes a week on [Xillion](https://my.xillionapp.com), they could have achieved age-based asset allocation and better returns.

![High Fees Funds](https://d391fpr6ao9qle.cloudfront.net/images/blog/high-fees-funds.webp)


Don't let high-fees funds drain your money


🌏 **Three macro trends to better understand the world economy 💹 :**

👵 **Rapidly aging developed countries.** In developed nations, people are living longer and birth rates are declining. That means societies are getting older. This has serious economic consequences, as aging populations tend to have lower rates of consumption, increased demand for healthcare services, and lower rates of workforce participation. These factors lead to slower economic growth, higher healthcare costs, and pressure on government benefits (pension plans, healthcare, etc.). Look no further than the weeks-long protests in France to see the culmination of these forces.

💵 **De-dollarization.** Many countries are reducing their holdings of U.S. dollars within their foreign capital reserves. Still, the U.S. dollar dominates compared to other currencies, as it represents around 58% of global reserves, according to the IMF. What does all this mean? Well, if the de-dollarization trend continues, the value of the U.S. dollar could further decrease, leading to higher inflation, higher borrowing costs for US businesses and consumers, and a decline in the purchasing power of the US dollar relative to other currencies. However, there’s a lot that remains to be seen with de-dollarization. For now, it’s just something to keep an eye on.

🏠 **Growing debt.** There’s a fundamental clash at the heart of economics: debt grows at an exponential rate, while economic productivity does not. Debt has reached record levels in many countries. Over the last two decades, household debt in the U.S. has nearly doubled, according to data from the Federal Reserve. High levels of debt can constrain economic growth and increase the risk of financial crises, particularly in countries with high levels of foreign debt denominated in foreign currencies. High levels of government debt can also limit the ability of policymakers to respond to economic shocks, as they may be constrained by concerns about increasing their debt levels further.

![Total Debt Balance](https://d391fpr6ao9qle.cloudfront.net/images/blog/total-debt-balance.webp)


Understanding the World Economy: Exploring three macro trends"


The stock market can be unpredictable, but that’s only if you look at a year or two. Over longer investment horizons, returns are quite stable — and very strong! There’s a reason people call the S&P 500 the greatest wealth-generating machine known to man.

If you invested in the S&P 500 for any 25-year period since 1928, there’s no way you could have made less than a 5% return. In fact, you would have a 94% chance of making between 7% and 15% annually. Over 25 years, a 12% annual return rate turns $100,000 into nearly $2 million!

It’s important to get your investments right early on. It can make a difference of millions of dollars over the course of your career.

![Rolling Returns of S&p500](https://d391fpr6ao9qle.cloudfront.net/images/blog/rolling-returns-of-sp500.webp)

Xillion’s Portfolio Analyzer and 401k Optimizer will scan your portfolio and search for inefficiencies. We’ll suggest ways you can optimize your path toward financial success. Get started with a [FREE Xillion Account](https://my.xillionapp.com/signup) today!


Do you know why the S&P 500 is the greatest wealth-generating machine?


Apple has recently launched its highly anticipated Apple Card Savings Account, which enables iPhone users to open a high-yield savings account through Goldman Sachs from the Wallet app offering an annual percentage yield (APY) of 4.15%, which is over ten times the national average.

Here is everything you need to know about it

• 4.15% APY (Annual Percentage Yield)

• Account from Goldman Sachs

• Exclusive for Apple Card Holders

• No Minimum Balance Requirement

• FDIC Insured Upto $250,000

• Maximum Deposit Limit: $250,000

• Zero Fees

• Auto-Credit of Daily Cash Earned


Everything you need to know about Apple Card Savings Account


Salary is important, but your standard of living has a lot to do with location.

Researchers at MIT calculated the living wage for different cities in America. It means “the hourly rate that an individual in a household must earn to support his or herself and their family.”

| Location                	| Living Salary 	|
|-------------------------	|---------------	|
| Parker, West Virginia   	| $82,388       	|
| Detroit, Michigan       	| $84,926       	|
| Columbus, Ohio          	| $85,176       	|
| Santa Fe, New Mexico    	| $90,188       	|
| New York, New York      	| $104,707      	|
| Boulder, Colorado       	| $104,915      	|
| Los Angeles, California 	| $109,865      	|
| San Diego, California   	| $114,212      	|

Source: MIT Living Salary Calculator for 3 Children Household

**Any surprises?**

When making financial goals, it's important to consider location. That's why Xillion's tools — like our [Money Score](https://www.xillionapp.com/product/money-score/) and [Financial Independence](https://www.xillionapp.com/product/financial-independence/) tool — include cost-of-living considerations. [Get started](https://my.xillionapp.com/signup) on your personalized financial journey at Xillion today!

Are you aware of the living wage in the United States?


The Western retirement model is under strain. Developed nations are growing much older since people live longer and have fewer children. By 2050, the proportion of the world population over the age of 65 is expected to [nearly double](https://www.who.int/news-room/fact-sheets/detail/ageing-and-health) relative to 2015 rates. This strains the retirement system, as more older people need money and fewer young people put money into the system. France [responded](https://www.npr.org/2023/03/20/1164705654/france-retirement-age-emmanuel-macron-no-confidence-vote-protest) by trying to raise the government retirement age from 62 to 64 — but the move has been met with widespread protests.

XN_EMBED_LINK

In the U.S., all workers pay into social security in exchange for the promise that they’ll receive payments in retirement. Social Security benefits can start to be reimbursed between ages 62 and 70, and you get more money if you wait longer to start receiving payments. Payments are also calculated based on your income during working years, and the [average payment comes](https://www.wsj.com/articles/retirement-charts-social-security-savings-health-efa1962b) out to $1,825 per month or $21,900 per year. 

**There are a few reasons why you shouldn't rely on social security for retirement.** 

- First, $1,825 per month is hardly enough money to live comfortably, especially since healthcare costs tend to grow in retirement, per Xillion research. Many Americans do in fact [try to retire](https://www.nytimes.com/2021/08/09/opinion/aging-nursing-home-medicare.html) on social security alone, and that has contributed to a sad crisis for elderly poverty and homelessness in the U.S. The typical nursing home room in the U.S. [costs](https://www.nytimes.com/2021/08/09/opinion/aging-nursing-home-medicare.html) $93,000 per year, and that doesn’t include so many other common expenses for older Americans. 
- Second — and of even greater importance — social security is heading toward crisis since funds are [expected](https://www.ssa.gov/oact/TRSUM/index.html?utm_source=link_newsv9&utm_campaign=item_258335&utm_medium=copy) to dry out by 2035. As previously mentioned, it’s simply a matter of demand, supply, and demographics.  Over 80% of working Americans believe that social security will provide reduced or no benefits by the time they retire, [according to](https://www.pewresearch.org/social-trends/2019/03/21/retirement-social-security-and-long-term-care/) a Pew Poll from 2019.

There are many supposed rules of thumb for calculating optimal retirement savings. But really, there’s no single plan for everyone, according to Xillion's research. Instead, your retirement goals should reflect your own priorities: how much you want to travel, where you want to live, how often will you dine out, etc. You also need to budget for unexpected expenses such as emergency medical costs (the [average](https://www.wsj.com/articles/retirement-charts-social-security-savings-health-efa1962b) 65+ year-old in America spends over $7,000 per year on medical expenses) or an earlier exit from the workforce than anticipated. 

![Retirement Source](https://d391fpr6ao9qle.cloudfront.net/images/blog/retirement-income-source.png)

If you are young and in the prime of your career, these considerations can feel far off. Many young people struggle to plan so far out given all the crises we seem to face: global warming, a proxy war with Russia, political turmoil, and the prospect of AI labor displacement. Still, we’ve faced similar problems before. If an American in the 1960s decided not to invest their $10,000 in the S&P 500 due to the Cuban Missile Crisis (“why bother, we’re all going to die”) they’d miss out on $3.4 million in retirement money today. 

What’s the best way to plan for retirement? Invest today, and do it the right way. [Xillion’s Portfolio Optimizer](https://my.xillionapp.com/product/portfolio-analyzer) can help you find the optimal investments for your path toward financial independence. Depending on your salary and current savings, you might even be able to “retire” much sooner than anticipated. One recent Xillion customer discovered how to make an additional estimated $4.5 million from their 401k investments over the next 30 years — all within a few minutes.

Counting on social security in retirement? Think again.


When we talk about good investing, too often we focus on the ability to pick stocks and index funds. And while this is important, it overlooks one of the most underappreciated differences between good and great investors: **optimizing taxes**. Understanding capital gains can easily cut your investment tax bill in half — and sometimes it’s just a matter of holding an investment for a few more days.

Capital gains are profits generated from selling assets for a profit. Beginning with the Revenue Act of 1921, the U.S. government [introduced](https://www.americanbar.org/groups/taxation/publications/abataxtimes_home/21fal/21fal-ylc-moon-revisiting-capital-gains/#:~:text=The%20first%20preferential%20rate%20for%20capital%20gains%20was%20introduced%20in,marginal%20rate%20of%2065%20percent) short- and long-term capital gains taxes as a way to encourage long-term investments that provide market stability and encourage economic productivity. Here are the basics to understanding how these taxes work for equities in brokerage accounts (retirement accounts have different rules): 

- **You only incur taxes on investment once you “realize” the profit or loss.** That means once you sell the investment. Taxes are calculated on an annual basis and your gains are netted from losses (more on that later).
- **If you realize the gain on an investment in less than a year, you pay a higher tax called a short-term capital gain tax.** This is usually the rate of your marginal ordinary income tax. “Marginal” is a big deal here, because that means the highest rate you pay, not the effective tax rate. 
- **If you realize the gain after more than a year of holding the asset, then you pay a lower tax rate called the long-term capital gains rate.** This rate is [either](https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates) 0%, 15% or 20%, depending on your income tax bracket. 
- For example, if you filed alone in 2022 and made $180,000 in income, you would pay a short-term capital gains rate of 32%. But if you held that same asset for more than a year, you would pay only 15%. **That cuts your tax bill in half!** 
- Similarly, if you are married and have a [joint income](https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets) of $80,000, you would pay a short-term capital gains tax of 12% but a long-term capital gains tax of zero! 

**There’s another critical element to understanding capital gains: offsetting gains and losses.** You calculate capital gains tax at the end of a year, based on your net taxable gains and losses. This is important since losses can be used to offset gains and reduce tax liabilities. If losses exceed gains, up to $3,000 [can be used](https://www.irs.gov/taxtopics/tc409) to offset ordinary income, and any excess losses can be carried forward to offset future capital gains in future years, $3,000 per year max. 

Many investors overlook the importance of capital gains taxes when making investment decisions. This oversight can lead to unnecessary tax liabilities, reducing net returns and hindering long-term financial goals. [Xillion’s Portfolio Optimizer](https://my.xillionapp.com/product/portfolio-analyzer) is designed with capital gains in mind. We help users find index funds designed for a buy-and-hold strategy, reducing taxable events on the path toward financial independence. 

So next time you are preparing to execute an order, keep in mind the tax implications. Investing isn’t just about being in the highest-returning asset all the time — it also depends on your current portfolio and the tax implications of moving money into a new asset. 

Becoming a Better Investor Through Tax Optimization

The Federal Reserve has two primary duties: promote price stability (tame inflation) and keep unemployment low. Unfortunately, those two goals often directly conflict with one another. When labor demand is low, companies can attract workers with lower wages, so the price of goods and services goes down. On the other hand, high employment means workers can bargain for higher wages, thus increasing the cost of goods and services. 

The Fed has been raising interest rates at a historic pace since March 2022. The official reason is to lower inflation to a [2% goal](https://www.nytimes.com/2023/03/24/business/inflation-federal-reserve-interest-rates.html#:~:text=%E2%80%9CWe%20will%20get%20inflation%20down,Fed%20doctrine%20settled%20years%20ago.), which is true but not the whole story. To get 2% inflation, the Fed wants (and perhaps needs) to raise unemployment. Officially, they call this an "unintended consequence," but that's a pretty pathetic excuse. It's like saying a dead cow is an "unintended consequence" of hamburgers. Or that death is an "unintended consequence" of war. In other words, it may be "unintended," but it is also a direct and predictable consequence --- one that you choose to accept if you embark on a certain endeavor. 

Fed Chairman Jerome Powell understandably avoids framing the interest rate hike in terms of unemployment. In a [heated exchange](https://youtu.be/bIHH5Kh2dU0) with Senator Elizabeth Warren, Powell said "We actually don't think that we need to see a sharp or enormous increase in unemployment to get inflation under control." Warren responded by pointing to the Fed's own projections, which propose rate hikes that would lead to 2 million lost jobs. Warren also noted that, in 11 or the last 12 times that the U.S. unemployment rate went up by at least one percentage point, it then went up by another percentage point within the year. The Massachusetts Senator likened "planned" unemployment to a runaway train that's difficult to control once it gets started.

XN_EMBED_LINK

Powell is likely obscuring the Fed's intention to raise unemployment. This makes sense, as the optics would be horrible, especially after the Fed stepped in to [limit the losses](https://www.nytimes.com/2023/03/31/business/economy/silicon-valley-bank-federal-reserve-supervision.html) of relatively wealthy Silicon Valley Bank depositors. But the Federal Reserve needed to do *something* to curb inflation. And interest rate hikes hurt everyone, even if the working and middle-class bear the brunt of it. When the Federal Reserve was created after the Panic of 1907, the Wilson administration intentionally insulated it from political pressure because they knew the Fed would need to make difficult and unpopular decisions, just as it's doing now. 

One weird thing that doesn't get mentioned in this story: Wage inflation isn't even driving that much of the current inflation. Employers frequently gripe about how difficult it has been to hire people right now. While wages modestly increased after COVID, real wages (those adjusted for inflation) actually decreased since 2021. In fact, according to [an analysis from the Economic Policy Institute](https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/), labor costs only accounted for 7.9% of price inflation, compared to 53.9% from corporate profits and 38.3% from nonlabor input costs. Those other costs include rising energy prices resulting from the Ukraine war and Russian sanctions.

![what-is-driving-inflation](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-04-05-the-fed-wants-to-eliminate-jobs/what-is-driving-inflation.webp)

At least for now, despite all the scary headlines, the economy is doing quite well. In fact, the March unemployment rate stood at only 3.6% in the U.S. Wages have been cooling since the end of 2021, especially in the leisure and hospitality sector, which struggled to attract enough workers post-COVID.

**What does this mean for your job security?**

Many of Xillion's customers are knowledge workers in tech and business. Those sectors have actually been [hit harder](https://www.businessinsider.com/tech-company-layoffs-pay-salary-cuts-remote-work-recruiter-power-2023-2) and earlier than lower-wage jobs. If the Fed can tame inflation without causing much more damage, you may be in the clear. The Fed is playing with fire, but so far it has managed not to get burned --- unemployment is still low, and inflation is going down. 

It all depends on how much more they want to raise rates. If the Fed actually wants to get inflation down to 2%, then interest rate hikes will need to continue for at least a few more months. According to the Fed's [own projections](https://www.nytimes.com/2023/03/24/business/inflation-federal-reserve-interest-rates.html), the U.S. can reach 3.3% inflation by the end of 2023 and 2.5% by 2024. 

The resultant economic pain might also be backloaded, especially since several of the drivers of inflation are not due to fiscal policy but broader real-world supply chain issues. Some economists have suggested the Fed should [revise](https://www.bloomberg.com/opinion/articles/2022-11-28/the-fed-shouldn-t-raise-its-inflation-target) its inflation target to 3% as a compromise. Powell has [rejected](https://www.reuters.com/markets/us/feds-powell-again-rejects-idea-raising-inflation-target-2023-03-07/) this suggestion.

![sp500-sectoral-allocation](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-04-05-the-fed-wants-to-eliminate-jobs/sp500-sectoral-allocation.webp)

Source: New York Times

**What does this mean for my portfolio?**

If you were only looking at Finance Twitter, you'd think we were already in the Great Depression. But overall, the stock market is doing well, and from mid-October until today, the S&P 500 has rallied 15%. We are still about 15% below the all-time high reached at the end of 2021. 

In recent months, tech stocks have been the [primary driver](https://www.nytimes.com/2023/03/31/business/tech-stocks-sp-500.html) of the market rally. Advancements in AI also represent a potential exogenous factor that could boost employment in the industry, even if the Fed policy works against it. 

The "soft landing" is still possible, but it's difficult to predict what will happen with the broader economy. We can only hope Powell manages to keep the "unintended consequences" under control.

The Fed wants to eliminate jobs, whether they admit it or not


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What is money score and why you should care?


Our March 2023 economic insights summary:

1️⃣ [Banking crisis](https://www.wsj.com/articles/bank-collapse-crisis-timeline-724f6458) is slowly unfolding globally. Silicon Valley Bank collapsed when its customers made $142 Billion worth of withdrawal requests in just two days. And the Swiss giant, Credit Suisse collapsed after Saudi National Bank refused to give it more money.

2️⃣ The banking crisis has led the Fed to [slow down rate increases](https://www.wsj.com/articles/bank-failures-market-turmoil-fuel-bets-on-a-pause-in-fed-interest-rate-increases-4b487cd6). A big reason for the collapse of these banks was the decline in the value of the assets they were holding (T-bonds) after the Fed raised rates at the fastest rate in history.

3️⃣ Investors & the market thinks that the [rates will be cut soon](https://money.com/will-fed-cut-interest-rates-soon/) by the Fed. When rates start coming down, stocks are likely to start going up. If you have been thinking about buying some beaten down finance or tech stocks, this might be a good time to do so.

The rate cut will possibly reverse the 7-month decline in home prices in the US.

4️⃣ [Consumer sentiment](https://fred.stlouisfed.org/series/UMCSENT/) continues its upward ascent, after hitting its lowest point ever in Jun-2022.

5️⃣ [Manufacturing sentiment](https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/february/) is still going down and firmly indicates a shrinking economy. Overall, this means that the US economy is cooling, but still not as fast as the Fed would like because consumers are still spending money and are optimistic about the future.


Monthly Economic Insights - March 2023


Will AI change the world (and the markets)? Elon Musk and hundreds of technologists seem to think so.

In an open letter, they called on **"all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4."**

What do you think? Will markets benefit from advancements in AI?


Will AI change the world?


Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it” - Albert Einstein


Power of Compounding


Just how big is Apple? The wearables business unit ALONE could be a Fortune 500 company (with more annual revenue than Oracle, Nike, American Express, Coca-Cola, and Tesla) 🤯

Apple's Wearables, Home, and Accessories business includes its Apple Watch, Airpods, Homepod, and Apple TV sales.

Sales went from "just" $12.8 billion in 2017 to $41.2 billion in 2022.


Apple's Wearables Unit: A Fortune 500 Company on Its Own with Higher Revenue Than Major Brands


📈 Since 1992, you had to ride out a grand total of seven bad years in the S&P 500 to see 1,727% return on your investment 💰

**Time in market >>> Timing in market**

Trust the process 💸


Long-Term Investing Pays Off: Trusting the Process Over Timing the Market with the S&P 500


**It’s time to rethink celebrity investors**

When you first become interested in investing, you’ll likely be shown dozens of YouTube, Instagram, and TikTok accounts that worship at the altar of the celebrity investor. If you’re lucky, you’ll end up following accounts that espouse the time-tested investing principles of someone like Warren Buffet. If you’re not so lucky, you’ll end up on one of the many dangerous TikTok accounts that teach you how to “get rich quick” on Robinhood by employing reckless day-trading tactics.

XN_EMBED_LINK

But in the middle of those two extremes is the celebrity investor. This group includes Bill Ackman, Ray Dalio, Charlie Munger, Michael Burry, George Soros, Steve Cohen, Cathie Wood, [Nancy Pelosi](https://www.businessinsider.in/investment/news/see-every-stock-trade-house-speaker-nancy-pelosiaposs-husband-has-made-since-2021/slidelist/92731756.cms) (joking, but only partially), Jim Cramer (good luck), and, of course, Warren Buffet.

These investors are all successful in their own right. But too often, we treat them as examples to follow for our own investing. In reality, celebrity investors are typically performing under a very different set of circumstances compared to those facing independent retail investors. Celebrity investors might own a hedge fund, work in the media (which means their job is to think and talk about stocks all day), or manage an index fund.

When you have billions of dollars in capital, investing becomes a different ball game. You don’t just go on Robinhood and buy a stock — you build a position through a professional intermediary. Similarly, your position might allow you to actually appoint new people on the board of a company. So while a retail investor is basically jumping on a train and going along for the ride, an institutional investor might be able to move the tracks and appoint a new conductor. Sometimes funds even have insurance policies on trades.

Social media has been a blessing and a curse for the independent investor. On the one hand, there’s never before been so much valuable information so widely available. On the other hand, there’s also never been so much bad information polluting the landscape. Especially with platforms such as TikTok and YouTube Shorts, the algorithms are optimizing for engagement — not optimizing your finances.

In this sense, celebrity investors can be great fodder for engagement. When Warren Buffet or Michael Burry take a giant position in a new company, the finance world wants to know about it. But again, it’s important not to try to invest like a celebrity investor — because we only see a glimpse of their operations.

We aren’t saying to remake your financial information ecosystem entirely. Celebrity investors are engaging, and they can teach you a lot about financial markets and investing. It’s simply important to be able to separate their actions from your own. Even when you keep the principles of investing in mind, it can be difficult to not be swayed by an [ominous Michael Burry tweet](https://markets.businessinsider.com/news/stocks/big-short-michael-burry-deletes-twitter-sell-stock-market-outlook-2023-2). It’s just like if you watch Jaws and then go to the beach — you might _know_ the risk of shark attacks is extremely low, but you still won’t feel comfortable swimming into the ocean.

The truth is that many of the best investor guides are the most boring. They don't have flashy public personas or make headlines with bold trades. Instead, they help investors quietly and consistently follow a set of proven investment principles that have stood the test of time.

Tools such as [Xillion’s portfolio optimizer](https://my.xillionapp.com/product/portfolio-analyzer) can help you stay on track, even when social media exposes you to all the noise. Aside from our investing tools, we also have a cohort of mentors who can assure you that you’re on the right path for your own financial journey — not Warren Buffet’s, nor Jim Cramer’s, nor Bill Ackman’s, but your own.


Why Following Celebrity Investors Isn't Always a Good Idea: Rethinking Our Approach to Investing


$AAPL has rallied a whopping 2,402% since 2010 (a CAGR of 28.4% excluding dividends)


Apple's Soaring Success: A 2,402% Rally Since 2010 with Impressive CAGR Excluding Dividends


Unmasking the True Cost of Retirement: How inflation magnifies monthly expenses over time. don’t let inflation erode your golden years - Start Planning Now!

Checkout [XillionApp](https://my.xillionapp.com/)


The Inflation Threat to Your Retirement: How to Plan and Protect Your Golden Years


Investing made simple: your guide to a $10,000 ETF portfolio 💰

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How to invest $10,000?


Every great civilization in human history has gone through a cycle that includes a rise to power, a period of stability, and a period of decline. Eventually, the decline becomes so tumultuous that the empire itself collapses. 

Here we can see a graph from Ray Dalio’s recent book, **“Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail,”** that illustrates this cycle of civilizations: 

![Ray Dalio’s Book](https://d391fpr6ao9qle.cloudfront.net/images/blog/us-invest-1.webp)

Dalio, the billionaire founder of the hedge fund Bridgewater, explains: “From examining all these cases across empires and across time, I saw that the great empires typically lasted roughly 250 years, give or take 150 years, with big economic, debt, and political cycles within them lasting about 50 to 100 years.” 

Dalio also talks about why we tend not to think in terms of grand historical cycles, even though we may accept these cycles exist. He believes this happens because “we are like ants preoccupied with our jobs of carrying crumbs in our very brief lifetimes instead of having a broader perspective of the big-picture patterns and cycles, the important interrelated things driving them, where we are within the cycles, and what’s likely to transpire.” 

**From all of this, Dalio basically concludes that the U.S. empire is on the decline (about 70% through its big cycle), while China is next in line to take its place as the next great civilization.** He tells the reader that “whoever wins the technology war usually wins the economic and military wars.” Perhaps of the greatest concern, Dalio puts the odds of the U.S. devolving into a civil war at “only around 30%,” which he concedes is “a dangerously high risk that must be protected against and watched closely.” To Dalio, polarization is one of the biggest internal issues facing the United States.

In conclusion, Dalio writes:

***“While we can’t know for certain whether the splits and conflicts in the U.S. will increase or reverse, we do know that the long-term momentum is toward increasing division and this is a serious risk. The fact that the U.S. is simultaneously deeply indebted, its international standing is weakening, and it is experiencing serious conflict should be concerning both to Americans and to non-Americans who depend on them. At the same time, in its 245-year history, the U.S. has shown a great capacity to bend without breaking.”***

An investor reading this book would likely conclude that it’s time to sell all U.S. equities and buy a Chinese stock market index. However, it’s worth considering opposing opinions. In his annual [letter to shareholders](https://www.berkshirehathaway.com/letters/2022ltr.pdf) in 2021, Warren Buffet reaffirmed his belief in the United States. The Oracle of Omaha [wrote](https://variety.com/2021/biz/news/warren-buffett-letter-berkshire-hathaway-1234917087/): 

***“Today, many people forge similar miracles throughout the world, creating a spread of prosperity that benefits all of humanity. In its brief 232 years of existence, however, there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking.***

***Beyond that, we retain our constitutional aspiration of becoming ‘a more perfect union.”’Progress on that front has been slow, uneven and often discouraging. We have, however, moved forward and will continue to do so.***

#### Our unwavering conclusion: Never bet against America.

Over many decades, Buffet has been proven right on his conviction to bet on the U.S. economy. Between when Buffet took over Berkshire Hathaway in 1965 and 2022, the company [produced](https://www.berkshirehathaway.com/letters/2022ltr.pdf) 3,787,464% in overall gains, mostly by investing in American companies. During that same time period, the S&P 500 has experienced a rise in value of 24,708%. If you look at a histogram of annual returns from the S&P 500, the results have been overwhelmingly positive — not exactly what you would expect from an economy in the later stages of decline.

![Histogram of Annual Returns](https://d391fpr6ao9qle.cloudfront.net/images/blog/snp-returns-since-1992.webp)

You might think, ***well yeah, but this time is different***. And that’s true — this time may be different. The United States faces incredible polarization, climate change, a difficult debt problem, waning manufacturing productivity, worsening education outcomes, the prospect of a third World War, an inefficient healthcare system, and a population decline (to name just a few of our many problems). Of course, the U.S. is not alone among developed nations in grappling with most of these issues.

[Valerie Hopkins on Twitter: "Right now there are changes, the likes of which we haven't seen for 100 years," Mr. Xi told Mr. Putin through an interpreter after the state dinner as the leaders bid farewell. "And we are the ones driving these changes together.”](https://twitter.com/VALERIEinNYT/status/1638299396885315585)

But we have no way of knowing when the U.S. will really enter a final decline until it happens. Borrowing Dalio’s technique of looking at patterns of history, we can see that people are also generally bad at predicting when a civilization would crumble — some Romans thought their empire would collapse centuries before it became strongest, and some Ottomans thought their empire was at its peak just before it collapsed. As the saying goes: Change comes slowly, then all at once. 

There are also many examples in recent memory when people thought the United States faced severe economic decline, only to be proven wrong. In the late 1970s, for instance, Harvard economists [were predicting](https://carnegieendowment.org/2010/03/18/japan-s-past-and-u.s.-future-pub-40356#:~:text=In%201979%2C%20Harvard%20economist%20Ezra,however%2C%20Japan's%20bubble%20economy%20imploded) that Japan would overtake the United States as the world’s leading economy. Today, the U.S. economy is more than four times larger than that of Japan, and the U.S. is still growing at a faster rate. Similarly, many of the Americans who lived through the Great Depression remained skeptical of the U.S.’s ability to achieve great economic prosperity — even as it was happening before their eyes (hence, the lingering habits of stuffing money in mattresses). 

So how should this impact your investing? Well, diversifying internationally is never a bad idea. But betting against the U.S. entirely means you are betting on an outcome that — if it comes true — will completely remake the world around you. Predicting which investments would grow in this scenario is incredibly difficult. For instance, you might not even know which currency you would want. So even if you believe you can predict the outcome, it would be even more difficult to predict how to properly invest according to that outcome. In this sense, it might be better to get on the status quo (U.S. equities performing at historical levels) and be proven wrong, rather than bet on a giant change in history and be proven right. 

The U.S. has reinvented itself in the past, but could it do it again? Could the stronger-than-ever NATO prevent the third world war for decades or centuries to come? Could Social Security and Medicaid — the largest contributors to federal debt — be reformed to avoid worse outcomes? Could population decline be reversed with thoughtful immigration policies? And most importantly, can ordinary Americans find a middle path between polar extremes? If America still is the best incubator of human potential, can it solve all these problems before they become unsolvable?

We saw a glimpse of American ingenuity in the early days of the pandemic. Within 72 hours of receiving the genetic sequence of the virus from Chinese scientists, the CDC and Moderna [were able to plot out](https://www.cnbc.com/2021/07/03/how-moderna-made-its-mrna-covid-vaccine-so-quickly-noubar-afeyan.html) a vaccine that was eventually delivered to millions of people around the world. Likewise, the government, corporations, non-profits, and ordinary citizens came together to manufacture, distribute and administer these vaccines to the most vulnerable citizens in record time. With its back up against the wall, the United States performed incredibly well.

The big question is, can America continue to approach all major problems with the same zeal and urgency? Our bet is: yes, it will.

#### So, don’t bet against the US.

To add your thoughts, visite our LinkedIn post [Is it time to invest in China instead of the U.S.?](https://www.linkedin.com/pulse/time-invest-china-instead-us-xillion-app/)








Is it time to invest in China instead of the U.S.?


We are excited to announce our [new comparison feature](https://www.xillionapp.com/compare-funds/) on our website that allows you to easily compare and analyze various ETFS and Mutual Funds side-by-side.

**Comparison of [QQQ vs SPY](https://www.xillionapp.com/compare-funds/QQQ-vs-SPY/):**

![QQQ vs SPY](https://d391fpr6ao9qle.cloudfront.net/images/blog/qqq-vs-spy.webp)

**Fund Details & Performance**

![QQQ vs SPY](https://d391fpr6ao9qle.cloudfront.net/images/blog/qqq-vs-spy-fund-details-n-performance.webp)

**Sector Allocation**

![QQQ vs SPY](https://d391fpr6ao9qle.cloudfront.net/images/blog/qqq-vs-spy-sector-allocation.webp)

**Conclusion**

The **Nasdaq 100 ($QQQ)** has better long-term returns but is more focused on technology stocks, which may be riskier.

The **S&P 500 ($SPY)** is more diversified across sectors, making it a better choice for those seeking a diversified portfolio.

However, investors willing to take on more risk for potentially higher returns may prefer the Nasdaq 100.

For more ETFs & Mutual Funds comparison, check [Xillion Compare Funds](https://www.xillionapp.com/compare-funds/)

Are you tired of spending countless hours researching ETFs and Mutual Funds?

How long will it take to double your money?

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How you can protect yourself from bank failure?


With summer approaching, many of us are opting for “staycations” rather than travel. In this economy, the idea of splurging on a vacation might seem irresponsible, but you’re not alone in thinking this way. In fact, about 48% of American workers decided not to take a trip in 2022 due to budget concerns, and only about 33% exhausted their allotted vacation days. 🏖️

When it comes to big financial decisions, there’s always uncertainty. That’s where [Xillion Mentoring](https://my.xillionapp.com/product/mentoring) can help. Connect with an expert who knows how to guide you on your journey to financial independence. From large decisions like buying a home, to smaller ones like whether or not you can book that trip to Cancùn, our mentors can guide you through it all. All you have to do is:

1. Determine the area of expertise that you want your mentor to have. Maybe you’re interested in investing, planning for retirement, or you’re generally not sure about handling your finances.

2. Swipe through mentor profiles that give you the full picture on their strategies, investing styles, and risk appetites.

3. Choose and connect with your mentor. Start chatting and getting to work right away.

**We all deserve a vacation**, and we deserve to easily plan for it. With products like Xillion Mentoring, you can talk to someone who understands your finances and makes decisions easier. Get started with this step to financial freedom today by signing up for a free [Xillion](https://my.xillionapp.com/home) account!

Vacations are a big expense — but can they be financially responsible? 🤔


## Top wealth creators of the decade (%) 10 Year CAGR

![Top wealth creators](https://d391fpr6ao9qle.cloudfront.net/images/blog/top-wealth-creators.webp)

*From the S&P500 Index as of 17, March 2023

Are you holding any of these stocks in your portfolio?


You're not alone. Recent bank failures like SVB Bank and Signature Bank have left people feeling uneasy about the security of their money.

That's why we created [Xillion Protect](https://xillionapp.com/product/protect) - a powerful tool that helps you diversify your deposits across multiple bank accounts, so you can maximize the safety of your money.

With FDIC insurance covering up to $250,000 per account, [Xillion Protect](https://xillionapp.com/product/protect) guides you through the process of managing multiple bank accounts. This makes it easy to spread your deposits across multiple banks, ensuring that your money is safe and secure.

We believe that everyone deserves to feel confident about their finances, and we're committed to helping you protect your hard-earned money. So don't wait - [Get started with a free account today!](https://xillionapp.com/) and start taking control of your financial future.

Are you worried about the safety of your bank deposits?


It’s a scary time to be a tech worker. For years, software engineers grew accustomed to rapidly rising incomes, job security, and a job market hungry for their talent. But since the Federal Reserve began raising interest rates, things have changed. It’s now difficult to find a large technology firm that hasn’t announced layoffs in recent months.

Just this week, Meta announced that it would cut around 10,000 jobs. It also stopped hiring for 5,000 open roles. This comes as Mark Zuckerberg is executing his plan for a “year of efficiency,” which already included 11,000 job cuts last fall.

Meta is hardly alone. Amazon, Alphabet, Microsoft, Salesforce, TikTok, Twitter, Tesla, IBM, Dell, and Ericsson all announced sizable layoffs in recent months. The highest number of tech employees were let go in January, with 108,080 estimated lost jobs.

Enough with the bad news. If you’re in the tech industry, you’re probably stressed enough about the economic situation. What can you do about it?

First, dealing with a down economy is as much about coping with anxiety as anything else. As hard as it may seem, try to focus only on the things that are in your control. Understand that everything will eventually be ok (think 2+ years ahead) because an economic recession lasts only around 18 months on average. The U.S. is still an incredibly robust economy. The tech industry is strong and key technologies such as generative AI promise to unlock vast leaps in productivity. Companies might be downsizing, but they’ll always have a need for software engineers, product managers, designers, etc.

Having an Emergency Fund is critical. Even if you keep your job, just knowing that you are prepared to handle the unexpected reduces anxiety and gives you peace of mind. It can determine whether you have sleepless nights or wake up refreshed, ready to code.

It’s also important to have the right size Emergency Fund. If you save too much, you risk losing out on precious investment opportunities — time in the market is critical for young workers. If you don’t save enough, however, you can cause undue financial strain in the event of an emergency.
So how do you calculate the right size for an Emergency Fund? We can help.

The Xillion Emergency Funds Calculator helps you calculate the right amount based on your family’s emergency needs.
	
	First, we factored in the obvious factors:

	1️⃣ Expenses

	2️⃣ Savings

	Then, we add the factors unique to you and your family:

	3️⃣ Income

	4️⃣ Job Security

	5️⃣ Severance & COBRA Package

	6️⃣ Spouse Employment

	Finally, we include macros inputs:

	7️⃣ Inflation

	8️⃣ Economic Growth

	9️⃣ Opportunity Cost of Excess Savings
	

✅ That’s how we calculate the exact amount that you should save. This amount is completely customized for your family’s unique circumstances.
These are uncertain times, but Xillion is here to help with your financial needs. A recession doesn’t need to upend your path to financial independence. With a little planning, you can be prepared to weather the storm and emerge stronger than ever!


How to prepare yourself for the uncertainty in the economy

How to prepare yourself for the uncertainty in the economy?


While having an adequate emergency fund is crucial to your financial health, holding too much cash holds you back from achieving long-term financial goals.

**OPPORTUNITY COST**

Opportunity cost refers to the cost of an alternative that you give up to pursue a certain action. In other words, when you make a financial decision, you're giving up the opportunity to do something else with that money.

**EXCESSIVE EMERGENCY FUND**

Now let's apply the concept of opportunity cost to your emergency fund. Imagine you have $90,000 saved in your emergency fund, but your monthly expenses are only $5,000. That means you have almost 18 months' worth of expenses saved up.

While that may seem like a good thing, the extra money in your low-interest savings account could be invested elsewhere with a higher expected return. Hence, the opportunity cost.

**INFLATION**

One factor to consider is inflation. Inflation decreases the purchasing power of your money over time. So your emergency fund isn't keeping up with inflation, you're actually losing money over time in terms of purchasing power.

**GROWING YOUR MONEY**

Another factor to consider is the growth of your money from the overall economic growth. If you're holding onto too much cash, you're not investing in the stock market or other investment opportunities that could grow your wealth.

**XILLION EMERGENCY FUND CALCULATOR**

So, how much should you actually keep in your emergency fund? This is where the Xillion Emergency Fund Calculator comes in.

By taking into consideration factors such as expenses, savings, income, job security, severance & COBRA package, spouse employment, inflation, and economic growth, the calculator can help you determine the right amount for your family's emergency needs.

Are you holding too much cash in your emergency fund?


The hottest acronym in finance? WWJPD 🔥 🚒

💸 In other words: What Would Jerome Powell Do 💸

Everyone wants to know how Federal Reserve Chair Jerome Powell will respond to the latest inflation data.

📈 Inflation is still stubbornly high at 6% in February. Normally, that would suggest the Fed will continue raising interest rates.

🛩 But some analysts on Wall Street think the Fed will actually cut interest rates. That would be a big deal, signaling the Fed is more interested in avoiding a "hard landing" than taming inflation by any means necessary.

Why?

The implosion of Silicon Valley Bank changes the calculus. Other regional banks are also struggling. The Fed likely fears that, if it continues raising interest rates aggressively, the banking sector will suffer a crisis that will spread across the broader economy.

Source: New York Times, "Inflation report’s details show price increase stubbornness."

What would the Federal Reserve Chair do now?


**TL;DR: the zero-interest-rate policy enticed SVB to take a position that it couldn't maintain once the Fed decided to raise interest rates.**

What just happened to Silicon Valley Bank? And what does it have to do with inflation?

The Federal Reserve decided to bail out Silicon Valley bank on Sunday, after depositors faced the prospect of losing all of their savings beyond the $250k FDIC amount.

**So what happened?** According to the WSJ, "in a world of near-zero interest rates, SVB put the money in long duration fixed-income assets in search of a higher return."

But after the Fed raised interest rates to slow inflation, SVB had to liquidate those assets before they matured. This happened as many depositors began taking out their money, fearing (and causing) a bank run that would make it impossible for SVB to fulfill withdrawals.

Impact of rising interest rates on Silicon Valley Bank


Silicon Valley Bank is the talk of the town. What's going on? And what can it teach us about investing?

Shares in Silicon Valley Bank fell by 62% in pre-market trading today. Yesterday, the shares fell another 60% in premarket trading, per CNBC. Nasdaq decided to halt the trading of the stock.

Here's how the Wall Street Journal describes what happened: "The panic surrounding SVB kicked off Wednesday, when the company said it would book a $1.8 billion after-tax loss on sales of investments and seek to raise $2.25 billion by selling a mix of common and preferred stock."

This prompted fear in Silicon Valley about the possibility of a bank run. Prominent VCs including Founders Fund, Coatue Management and Union Square Ventures all told their portfolio companies to stop using SVB, according to Bloomberg.

The key dynamic on display: the contagion of fear in markets. Even though this is easy to diagnose, it's difficult to stop. Some investors, like Bill Ackman, are floating the idea of a government bailout to ease fear in the markets.

For an individual investor, the SVB case also highlights the importance of diversification of investments — across individual equities and market sectors.

Sources
- [CNBC - Silicon Valley Bank drops another 60% and is halted Friday as it’s shut down by regulators](https://www.cnbc.com/2023/03/10/silicon-valley-bank-tumbles-for-a-second-day-weighing-on-the-bank-sector-again.html)
- [Bloomberg - SVB Races to Prevent Bank Run as Funds Advise Pulling Cash](https://www.bloomberg.com/news/articles/2023-03-09/svb-ceo-becker-asks-silicon-valley-bank-clients-to-stay-calm)
- [WSJ - SVB Stock Halted After Sharp Selloff; Bank Exploring Possible Sale](https://www.wsj.com/livecoverage/stock-market-news-today-03-10-2023/card/svb-stock-price-slides-another-29-premarket-gdGa9ANN0vNESUUorGqm?mod=hp_lead_pos1)

Investing lessons from Sillicon Valley Bank collapse

📣What separates good investors from great investors? Understanding opportunity cost 💰

Opportunity cost is what you give up by choosing one investment over another 🤔

🏡 💹 For example, if you invest in real estate, you may miss out on potential gains from investing in an index fund. And if you choose an index fund, you may miss out on potential returns from a tech stock 🚀 🚀

We all intuitively understand opportunity cost, even if we don't think of it as such.

Great investors understand how to balance opportunity cost and risk. It's also important to know when to look for outside advice.

[Xillion's Portfolio Analyzer](https://www.xillionapp.com/product/portfolio-analyzer/) helps you optimize for opportunity cost. To give a simple example, you might be invested in an index fund with high fees, when a lower fee index fund with comparable assets is available. That's opportunity cost!

Get started with [a free Xillion account today!](https://www.xillionapp.com/)

What is Opportunity Cost?

As payment for managing a mutual fund, investors are charged an advisory fee. An expense ratio measures how much of a fund’s assets are used for paying this fee and other operating costs, and the general rule is that the lower this is, the better for investors. However, high fees aren’t always completely avoidable. They can dent your portfolio returns, and it’s often difficult to figure out if these expenses are worth it.

When we talk about expense ratios, a large chunk of this is annual ongoing payments for managers, legal fees, accountants, etc. These advisory fees are typically between 0.25% and 1% per year of your investment of the fund. While 1% might not seem hefty, it’s definitely considered a high fee — the more a fund trades, the higher your returns, and the more of your assets will be eaten up by high operating costs.

For example, let’s look at a model portfolio from Forbes. This portfolio is made up of 80% stocks and 20% bonds, and returns just over 10% per year since 1978. This, combined with a fixed $100/month investment over 45 years, grows this portfolio to about $1,050,000 before fees. But with an annual fee of 1%, our model investor would have only received a 9% annual return, making the portfolio value $740,000 instead. So this 1% fee wasn’t so small after all - it took away about 30% of the portfolio’s value!

Therefore, it’s important to keep on top of your mutual funds, and to figure out what financial decisions will lead to your portfolio earning the most with optimum level of risk. [Xillion’s Portfolio Analyzer product](https://www.xillionapp.com/product/portfolio-analyzer/) can help you with this.

The analyzer’s algorithm provides a clear and concise view of holdings from your brokerage accounts, and shows you how your portfolio is performing versus S&P 500. You’ll also receive recommendations and actionable steps customized towards getting returns that match your expectations.

Long story short, high fees for mutual funds can be scary, but we can help you understand which moves to make to optimize your portfolio and returns. [Sign up for a free account with Xillion today](https://www.xillionapp.com/) and take this step towards financial freedom!


Mutual Fund Fees and Expenses

As you embark on your career and financial journey, it's important to understand the basics of personal finance.

Here are five things young people should do to get their finances in order.

- **CREATE A BUDGET -**  Use a budget to track your income and expenses. This should help you find ways to cut back on unnecessary expenses. Optimizing expenses will only get you so far. Getting investments right early on is critical — and that’s where Xillion can help.
- **EMERGENCY SAVINGS -** Holding too much cash in an emergency fund limits your investment opportunities. But not having enough can put you in financial turmoil. Balance is important. [Xillion’s Emergency Fund Calculator](https://www.xillionapp.com/product/emergency-fund/) removes the guesswork.
- **START INVESTING EARLY -** How do you build wealth? It all comes down to compounding investment gains over time. Even if you can only invest a small amount each month, it can add up over time and help you achieve your financial goals.
- **PAY DOWN EXPENSIVE DEBT -** Carrying unnecessary high-interest debt can lead to a cycle of debt that’s difficult to break. Prioritize paying off any loan with an interest rate of more than 10% to reduce the financial burden and save money in the long run.
- **DIVERSIFY-** 60/40 stock-bond split doesn’t fit most investors, especially while they’re young. Xillion’s portfolio optimizer analyzes your investments & gives suggestions for optimizing allocation. Index funds can be a great way of laying a healthy foundation for your portfolio.
- Say goodbye to financial stress and hello to financial freedom with Xillion, your ultimate personal finance companion.[Get started with a free account today!](https://xillionapp.com/)

How Gen Z Should Prepare Their Finances

Most people forget: money in your emergency fund can still earn money 🚀 📈

💹 With the Fed raising the interest rates, savings accounts can finally offer attractive yields.

Some high-yield savings accounts offer a yield over 4% 🤯 These accounts are FDIC-insured, so the investment is virtually risk-free.

Example: Moving $20,000 in emergency fund cash to a high-yield account would produce an extra $800 over one year 💰 💴 💸

When you're a young investor, markets are the best bet for the long-term. But if you have a lot of cash in your emergency fund, consider putting it in a high-yield savings account.

And if you aren't sure how much to put in your emergency fund, Xillion can help. [Our Emergency Fund Calculator](https://www.xillionapp.com/product/emergency-fund/) helps you figure out exactly how much YOU need in your emergency fund.

[Get started with a free account today!](https://www.xillionapp.com/)

Optimize your retirement portfolio with Xillion

What is a High Yield Savings Account

**💸 Financial psychology is a funny thing:** if you could turn five minutes from today into millions of dollars 30 years from now, would you do it?

Of course! But the vast majority of Americans don't take the time to optimize their retirement portfolios 📆 🚀🔎

Xillion 401k Optimizer makes improving your 401k returns as easy as 1-2-3 in only 4 minutes! 🥂 🎇 🎉

**With 401k Optimizer, you get:**
- 1️⃣ to view all your existing & old 401k/IRA/403b accounts in one place. 📊
- 2️⃣ low-cost fund recommendations that will improve your portfolio significantly. 🏋️
- 3️⃣ clear picture of how much benefit you will get over time. 📈

💵 [Try Xillion 401k Optimizer](https://xillionapp.com/product/401k-optimizer/) FREE for one month and accelerate your journey towards financial independence. This could be the best 4 minute time investment ever! 🏁


🏡 First-time buyers made up the smallest share of home-buying activity in the U.S., at just 26%. 

For many young workers, home ownership feels unattainable — but renting forever has downsides too.

[Bloomberg - Americans Need to Be Richer Than Ever to Buy Their First Home](https://www.bloomberg.com/news/articles/2023-03-02/will-home-prices-fall-first-time-buyers-face-a-costly-housing-market?srnd=wealth&leadSource=uverify%20wall#xj4y7vzkg)

A mortgage locks you into a fixed payment rate, while rents tend to increase every year (or over a few years) 📊

📆 Interestingly, for the first time in five years, rents have fallen for six straight months 📆 National median: ~$1,350.

[WSJ - Apartment Rents Fall as Crush of New Supply Hits Market](https://www.wsj.com/articles/apartment-rents-fall-as-crush-of-new-supply-hits-market-2403c6ea)

[Xillion’s Home Buying Tool](https://xillionapp.com/product/home-buying-guide/) will walk you through all of these considerations so you can make the smartest financial decision. 

All you have to do is plug in the numbers and find out if it is sensible to invest in the property.

Guide for first-time home buyers


If you’ve invested in a 401k or other tax-benefit retirement account, chances are, you’ve come across a target date retirement account. Examples include “Vanguard Target Retirement 2050 Fund” or “Fidelity Freedom 2045 Fund.” While these funds are convenient, there are a few reasons why you might want to stay away from them.

But what exactly are these funds? **Target retirement funds are supposed to further simplify retirement investing by automatically shifting your allocation of investment assets - between stocks, bonds, and treasuries - as you get closer to retirement.**

For example, a retirement fund might start out with a higher percentage of stocks when you are younger and have a longer investment time horizon before retirement. As you get closer to retirement, the allocation might shift to a higher percentage of bonds, which are generally considered to be less risky.

In general, your investment portfolio should carry less risk as you get closer to retirement. You can usually afford to be invested in equities when you’re younger, since you have a long time horizon to stay in the market. Over the past 30 years, the S&P 500 has provided a [predictable return](https://www.fool.com/investing/how-to-invest/index-funds/average-return/#:~:text=S%26P%20500%20annual%20returns,rate%20of%2010.7%25%20per%20year) of around 11% per year. But when you retire, you rely on your investment savings to live. It’s not worth the risk that the equities markets go so low that you can’t afford to live.

In recent years, target funds have become a big business. Morningstar [compiled](https://www.morningstar.com/lp/tdf-landscape) the following data on target funds: 

-   Assets in target date funds stood at $3.3 trillion in 2021, up from $2.8 trillion in 2020.

-   Vanguard had the most money in target retirement funds, with more than $55 billion in investment inflows in 2021.

-   Fidelity, T Rowe Price, and Blackrock took the next-largest slice of market share, with 14%, 11.5%, and 8.8% of estimated share, respectively. 

Target funds might sound like a great option. In some cases, they can be. But there are a few drawbacks: 

-   **High Fees**. The average target fund had an asset-weighted fee of 0.34% in 2021, [according to](https://www.morningstar.com/lp/tdf-landscape) Morningstar. That is much higher than the fees you would pay by managing the money yourself. With Vanguard’s S&P 500 fund, for example, you only pay a fee of 0.03% — less than one-tenth the target fund fee! That’s a heavy price to pay for convenience.

-   **Too Conservative**. For younger people, target date funds can often be too risk averse. Most people under 35 years of age are better off investing in low cost S&P 500 or Russell 2000 index funds and not worrying about anything else until they are closer to 50 years old. Then you can rebalance your portfolio by spending only a few minutes every quarter. Here are the 10 year [returns](https://fundresearch.fidelity.com/fund-screener/results/compare/snapshot/averageAnnualReturnsYear3/desc/1?order=&tickers=FFFHX) of target funds vs S&P 500 and Russell 2000:

![target-retirement-funds](https://d391fpr6ao9qle.cloudfront.net/images/blog/2023-03-02-what-are-target-retirement-funds.webp)

-   **Lack of Customizability**. Everyone has their own journey toward financial independence. It’s important to optimize your path. That might mean investing in individual equities, in specialized index funds, or even angel investing. Target funds simply don’t give you the flexibility you need to optimize your retirement path. They can be useful if you aren’t willing to put the time in to customize your financial path — but by taking even a few minutes every month, you can forge a better path to financial freedom. 

**More on target date funds.**

Convenient? ***Yes***. Optimal? ***Definitely not***.

Xillion gives you the best of both worlds: convenience and optimization.

It only takes a few minutes to shift your funds from a high-fee target funds to your own mix of index funds and other investment types.

📉 Your 401k plans default to target date funds.

📈 But you can do much better by investing directly in low cost index funds like FXAIX, VOO, VUG etc. Why?

1️⃣ Target date funds have much higher fees (10x more) than the cheapest index funds.

2️⃣ Target funds are too conservative, especially for people under 40 years of age (see graph).

3️⃣ You can't customize your investments the way want.

**Xillion can help**. The convenience of target funds might be tempting. But Xillion can take a lot of the hassle out of forging your own financial path. For example, we’ll scan your portfolio to look for funds that have unnecessarily high management fees. We can also help you plan for retirement, mixing assets in a way that aligns with your financial goals. Get started today with a free [Xillion](https://my.xillionapp.com/home) account! 




What are Target Retirement funds?


🛡️ We use Plaid to connect your financial information to your Xillion account. From there, everything else updates automatically.

✅ Plaid is used by all major financial institutions. It's also trusted by fintech companies including Venmo, SoFi, and Robinhood.

**🕘 Setting up your accounts can take less than 5 minutes 🕘**. Get started with a free Xillion account today!

![Xillion Security](https://d391fpr6ao9qle.cloudfront.net/images/blog/xillion-plaid-secured.webp)



🔒 How secure is Xillion?


Delayed investing can cost you a lot of money!

Starting investing early is key to reaching financial freedom sooner. Starting $1,000 investment every month now gives you 3x the money as compared to starting in 10 years from now.

Start investing now, so you can give your money more time to compound.

Take a look for yourself!

Don't know where to invest? At [Xillion](https://xillionapp.com), we take the guesswork out of investing and set you on the optimal path toward your financial goals. Get started with a free account today.



🕘 Delayed investing can cost you a lot of money!


😧 Nearly half (45%) of high-income earners are living paycheck to paycheck 💵 ➡ 💵

🤯 That wasn't even much higher than the overall U.S. adult average of 60%, according to a LendingClub report from January.

But here’s a fun fact: 

More Xillion customers had too much money saved up for emergencies than too little.

Always make sure you have enough funds in your savings account to handle an emergency. But don't save too much — otherwise you're missing out on investment opportunities.

📈 This is especially important as a young investor, since early investments have a chance to grow over decades.

How do you figure out the right amount to save? 🤔

Old-school finance talking heads would tell you that everyone needs 6-12 months of expenses in their savings account.

But Xillion wanted to create a better way. That's why we created the **[Emergency Fund Calculator](https://my.xillionapp.com/product/emergency-savings-guide)**.

First we factored in the obvious factors:

1️⃣ Expenses

2️⃣ Savings

Then added the things that are unique to you and your family:

3️⃣ Income

4️⃣ Job Security

5️⃣ Severance & COBRA Package

6️⃣ Spouse Employment

Finally added macros inputs into our algorithm:

7️⃣ Inflation

8️⃣ Economic Growth

9️⃣ Opportunity Cost of Excess Savings

✅ That’s how we calculate the exact amount that you should save. This amount is completely customized for your family’s unique circumstances. 💯

**[Calculate]((https://my.xillionapp.com/product/emergency-savings-guide)) your ideal savings amount today** — create a free [Xillion](https://my.xillionapp.com/home) account to get started! And follow us on LinkedIn for more learning opportunities!


Calculate ideal savings amount today


Our February 2023 economic insights summary:

⬆️ The US economy is still going strong, despite the Fed trying to slow it down by raising interest rates.

1️⃣ **Inflation [inched up ↗️](https://www.bls.gov/cpi/) slightly** after declining for many months, causing stocks to halt the upward cycle. This surprised everyone but we still maintain that inflation will likely come down to the 2%-3% range in the next 18 months or so.

2️⃣ The **January [jobs report](https://www.bls.gov/news.release/pdf/empsit.pdf) was unexpectedly strong**, with the unemployment rate at 3.4%, the lowest since 1969! As per SF Fed’s [research](https://www.frbsf.org/economic-research/publications/economic-letter/2023/february/role-of-immigration-in-us-labor-market-tightness/), lower immigration during 2017-2021 is one of the contributing factors to the US labor shortage. Tech layoffs do not make much difference in the overall US job numbers.

3️⃣ **Rents have been [falling ↘️](https://www.wsj.com/articles/apartment-rents-fall-as-crush-of-new-supply-hits-market-2403c6ea)** in the US for five straight months because of a softening economy and more apartments being built. We expect most of the COVID-related rent increase to come back to the pre-covid trend within the next 12-24 months.

4️⃣ The **Stock market seems to be in the neutral zone** based on the [52-week trend](https://twitter.com/gags_sandhu/status/1630319007151841280). We believe the market will not go back to the lows it experienced in Oct-2022.


Monthly Economic Insights - February 2023


👶 Gen Z was the only generation with rising 401k balances in 2022, but they still have a lot of room to catch up 📉 📅 One key investment advantage can bridge the generational asset gap ...

📈 Gen Z 401k accounts rose by 14% last year, compared to the average decline of 23% across all Fidelity accounts, according to the latest data from the retirement company.

So what’s going on? 🤔

🙅‍♀️ Unfortunately, Gen Z are NOT simply better at investing than everyone else 😅 Instead, they just have less money to begin with, so their contributions disproportionately increased overall account value.

Consider the following: 
➡ Gen Z had an average account balance of $6,000
➡ Everyone else: $103,900

🏔 That’s a lot of ground to make up 😬

But Gen Z (and Millennials) have a big advantage: time 🕰

Take that $6,000, for example. If a 25 year-old worker invests it in the S&P 500, what could they expect to have at age 55? Well let’s assume the 10% historical return of the S&P 500 over the past 20 years, and a contribution of $6,000 per year:

That would mean more than $1 million dollars by the age of 55. Not bad!

🛑 That doesn’t just happen automatically, though. Market changes over time. Sometimes fund options change as well. You can't expect everything to work on autopilot. To achieve long-term success, you just need to take a few minutes every few months to make sure you are set up for long-term success 🥂 🎇 🎉

[Xillion's portfolio optimizer](https://my.xillionapp.com/product/portfolio-analyzer) is perfect for making sure you're on track, avoiding costly mistakes that can add up to millions of dollars over a few decades.

Get started by creating a free [Xillion](https://my.xillionapp.com/home) account today! And follow us on LinkedIn for more investment tips and market updates.


👶 Gen Z was the only generation with rising 401k balances in 2022


## Wondering about the tax implications of your retirement contributions?

You're not alone. As the tax code grows increasingly complex, it can be tough to keep track of all the different ways investments impact your bottom line. But when it comes to 401(k) contributions, there's one big benefit that's worth paying attention to: the tax break.

**How does it work?**

When you contribute to most 401(k) plans, the amount gets deducted from your paycheck and reduces your taxable income.

**So you get two benefits:**

1️⃣ no taxes on the contribution (though you’ll likely pay a reduced tax upon withdrawing)

2️⃣ a reduced taxable gross income.

For example, if you contribute $20,000 from an income of $120,000, you don’t pay immediate taxes on that $20,000 and your taxable income goes down to $100,000.
This could reduce your tax bill by up to $5,000!

401(k) contributions can also help you lower your tax bill in the long run. In most cases, investment gains earned in a 401(k) account aren't subject to capital gains taxes until you withdraw the money in retirement. And if you're in a lower tax bracket by that point - after all, you will be retired - you could end up paying significantly less in taxes overall.

**So why should you take advantage of this tax benefit?**

Your equity investments can appreciate into the millions of dollars over a few decades, so the tax breaks add up. Plus, if your employer offers matching contributions, you're essentially getting free money that can help supercharge your savings.

Of course, there are limits to how much you can contribute to a 401(k) each year, and there are other factors to consider when it comes to retirement planning. But by taking advantage of these tax benefits, you can set yourself on a path towards financial independence.

**You need to optimize your portfolio within the retirement account in order to make the most of these tax breaks.**

[Xillion’s 401(k) Optimizer](https://my.xillionapp.com/product/401k-optimizer) scans your 401(k) account to look for all the inefficiencies. We’ll suggest simple changes you can make and show that those can add up to a big difference over time. For example, you might be in a fund with an unnecessarily high fee structure, or your investment portfolio might be too risk-averse.

To get started, set up your [Xillion](https://my.xillionapp.com/signup) account for FREE today and navigate to the Portfolio tab to see suggestions for how you can optimize your path to financial independence. And if you have any questions along the way, our [investment mentors](https://my.xillionapp.com/product/mentoring) are here to help.


Saving for retirement can lower your tax bill


**🏡 If you decide 'no,' you might finally be in the majority.**

Here's why:

📉 It might seem hard to believe, but rents are finally going down in the United States 📉

National median rent in January stood a hair under $1,350. That was a 3.5% decline compared to August of 2022, according to the Wall Street Journal.

📆 For the first time in five years, rents have fallen for six straight months 📆

What's going on? 

The WSJ attributes it to a few factors:

1️⃣ Rents just got 'too damn high.' The slowing market shows tenants may have reached their limit in affordability.

2️⃣ New rentals. The U.S. has been slow at building new apartments relative to its population. Finally, around 500,000 apartments are expected to open this year, easing the supply crunch.

All that led to a lease renewal rate of just 52% in January. It's a good time to have a moving company 🚛

But when you're considering whether to keep renting or not, think about the long-term financial picture. A mortgage locks you into a fixed payment rate, while rents tend to increase every year (or over a few years, in this case).

[Xillion’s Home Buying Tool](https://my.xillionapp.com/product/home-buying-guide) will walk you through all of these considerations so you can make the smartest financial decision. All you have to do is plug in the numbers and find out if it is sensible to invest in the property.

And if you still have questions, [Xillion mentors](https://my.xillionapp.com/product/mentoring) specialize in real estate and can guide you through the decision.

Get started with a free [Xillion](https://my.xillionapp.com/home) account today!




🏡 Deciding whether to renew your sublease? 🏡


**Yes, you read that right 😎**

🏛 The government wanted to make it easier for people with student debt to save for retirement 🧓

So last year, Congress passed the SECURE 2.0 Act of 2022. It makes it so that employers can match contributions under a 401k plan that go towards student loans. This can lower your tax liability as you pay off debt and eventually save for retirement.

📅 The plan is supposed to go into effect next year. Of course, you need to work for an employer offering the perk to take advantage of it.

One question we have: **How will this impact overall tuition bills?** It’s no secret that the U.S. has exorbitant higher education costs. Does this legislation address the soaring education costs on the wrong level? Maybe so, but that doesn’t mean you should avoid it 🤷‍♂️

As you look to save for retirement, it’s important to take advantage of all the benefits the government (and your employer) are willing to give you. Most employers match a portion of your 401k contributions.

Once you have the funds in your account, **Xillion can help you optimize** 🚀🚀 🚀

Our [401k Optimizer](https://my.xillionapp.com/product/401k-optimizer) helps you find the funds that get you to financial independence. Get started with a **free** [Xillion](https://my.xillionapp.com/home) account today. And follow up on LinkedIn for more tips!




Did you know your employer might soon be paying off your student loans? 👩‍🎓 😌


**💵 Do you want free money?**

1️⃣ Get the maximum 401k match from your employer.

2️⃣ Enroll in your company’s ESPP program.

✅ **401k Match:** Most employers match a portion of your 401k contributions. For instance, Microsoft matches 50% to employee contributions with no upper limit. If a Microsoft employee maxes out their 2023 401k contribution of $22,500, then Microsoft will contribute $11,250 to the 401k account. This is free money! But if you only contribute $10,000 to your 401k, Microsoft will only contribute $5,000, which means you will leave more than $6,000 of free money(!) on the table. Here’s the best part: all this money is pre-tax, so when you contribute $22,500 into your 401k, you are also saving taxes by reducing your taxable income!

🎯 You can then use **[Xillion 401k Optimizer](https://my.xillionapp.com/product/401k-optimizer)** to find the right funds for your 401k account that get you to financial independence.

✅ **ESPP**: Some companies, especially in tech, let employees purchase company stock at a discount, typically 10%-15%. If you work at say, Square, you can contribute up to $25,000 a year. Square will purchase company stock on your behalf at a discount twice a year, and every six months is called the offering period. It gets even better: the company purchases the stock at the lower of the first day or the last day of the offering period. If the stock was at $50 at the beginning of the offering period and rises to $60 at the end, you get a 15% discount on $50, and the company purchases stock for you at $42.50. You can decide to keep the stock as a long-term investment. Or you can sell the same day and pocket $17.50/share profit. This profit is free money. You don’t have to do anything, other than fill out a form with your HR department.

🔑 If you decide to sell your ESPP stock, you can use **[Xillion Invest](https://my.xillionapp.com/product/invest)** to explore what other investments to buy with this money.

💰 In both these cases, you need to first save and invest by making your contribution, and then you get free money as a consequence of this saving. In my experience, this process of saving is a huge benefit in itself because this money doesn’t hit your regular savings or checking account and doesn’t get spent right away. 💰


How To Get Free Money From Your Employer?


**Did you ever wonder about the history of the 401(k)? 🤔💭**

🏛 Back in the late 1970s, the U.S. government faced a serious problem: with the rise of inflation and the decline of traditional pension plans, workers were struggling to save for retirement.

In response, Congress created the **401(k)** to help workers set aside pre-tax dollars for retirement. The idea was that by incentivizing people to save, the government could help alleviate the burden on Social Security and other public retirement programs 💸 💰 👴

⏭ ⏭ ⏭ Fast forward to today, and the 401(k) has become a staple of the American retirement landscape. **There were $6.3 trillion in assets in 401(k) accounts as of September 2022.** These plans were held by 60 million active participants.

But why should you care about all of this? Well, for starters, the tax benefits of a 401(k) can be substantial. By deferring taxes on your contributions, you can potentially save thousands of dollars over the course of your career. And if your employer offers matching contributions, you're essentially getting free money that can help supercharge your savings 🚀🚀🚀

But these benefits aren’t automatic. It’s important to make sure you have your account optimized early on, so you can reap the benefits over time. With 401(k) and retirement accounts in particular, small changes made today can add up to millions of dollars in investment returns over a few decades.

[Xillion’s 401(k) Optimizer](https://my.xillionapp.com/product/401k-optimizer) analyzes and improves your portfolio in minutes by helping you compare different investment options quickly and clearly. This only takes a few minutes, but it can make the difference of whether you get to your desired financial destination or not.

Get started with a free [Xillion](https://my.xillionapp.com/home) account today, and follow us on LinkedIn for more financial learnings.


Did you ever wonder about the history of the 401(k)? 🤔💭


Moving your 401(k) can be a massive headache. 🤒

🍀🍀🍀 Luckily, it just got easier thanks to a huge move from **Fidelity Investments, Vanguard, and Alight Solutions** 😮

**What happened?**

Three of the biggest retirement account providers recently entered a portability agreement to make it easier to switch accounts after you switch or move jobs 🏃‍♂️♻

**Why?**

15 million people have less than $5k in their 401(k) accounts when they change jobs 📈 💰

Over half of these individuals just cash out rather than move their retirements funds — this is a big no-no. But moving funds is time consuming and difficult, so many people don't think it's worth the pain 😥

The companies want to make it easier for people to transfer so they don't cash out, which can be a costly mistake.

**How does it work?**

🗓 The portability program is going live in April. From then on, automatic transfer will be the default option.

Xillion has recommended retirement account transfers since day 1, so this is great news to see. But transferring accounts is only a first step.

To start optimizing your portfolio, create your [Xillion](https://my.xillionapp.com/home) account and visit our [401(k) optimizer](https://my.xillionapp.com/product/401k-optimizer) tool.

Source: [New York Times, "A New Option for Moving Retirement Savings When Switching Jobs"](https://www.nytimes.com/2023/02/10/your-money/retirement-401k-job-switching.html)


Moving 401k funds just got easier


**Here’s our 401(k) Plan cheatsheet:**

**What?**

This retirement savings plan is sponsored by your employer, essentially directing a percentage of each paycheck into a separate investment account. There are two types:
Traditional: contributions are deducted from gross income, and taxes on the earnings are only due when you withdraw the money (usually in retirement).
Roth: contributions are deduced from your after-tax income, but you won’t owe additional taxes on earnings when you withdraw the money.

**Why?**

Because of the way these earnings compound, it’s in your favor to open a 401(k) when you’re young - your earnings could grow into a sizeable amount of money by the time you’re ready to withdraw it.

**How?**

Here’s how [Xillion’s 401(k) Optimizer](https://my.xillionapp.com/product/401k-optimizer) product will help you make that happen:

-   **Smart View**

See all your accounts in one place. This is especially important if you’ve been with multiple employers; you’ll get a view of all of your retirement accounts, making them much easier to keep track of.

-   **Track Funds**

Xillion analyzes all the current holdings in your accounts. Our algorithm helps you understand how your funds perform long term, auto-optimizing your holdings and suggesting better options.

-   **Happy Retirement**

Pick from our algorithm’s suggestions and switch to recommended funds. You’ll know where to invest those underperforming funds, too, so you can maximize your earnings for retirement.

Handling these accounts when you feel like you’re light-years away from retirement might seem a little confusing, but that’s what [Xillion](https://my.xillionapp.com/home) is here for. We’ll help you every step of the way - sign up with a free account on the Xillion App today!


401k Plan cheatsheet


**Author:** **[Gagan](https://my.xillionapp.com/mentor/gagan)**

1️⃣ 10% per year returns + Complete liquidity (being able to convert the investment into cash)

2️⃣ 12% per year returns + No liquidity for 3+ years

🕵️‍♀️ I was helping a friend, who is also a Xillion customer, solve some of their financial puzzles when this came up. They were being pitched an investment idea where their funds would be locked for years in return for slightly better returns than S&P 500 index.

🙋‍♂️ My suggestion: 

1️⃣ is a much better deal, assuming the same level of risk for both. 

Here’s why. 👇

💸 An illiquid asset should give twice as much return as a fully liquid asset such as the S&P 500 index fund (SPY) to be worth investing into. 🧠

💲 S&P 500 index long term returns are around 10%. And it is as liquid as cash because you can convert it to cash within hours, with 2-3 taps on your phone.

🏡 The popular illiquid asset most Americans own is a house. Most people buy houses with 80% loan. Real estate in the US appreciates around 4% per year, which is around 20% when you consider:

Purchase Price: $500,000

Down Payment: $100,000 (20%)

Bank Loan: $400,000 (80%)

1-Yr Price Appreciation: $20,000 (around 4% of the total value of the house)

Your Gain: 20% ($20,000 gain on a $100,000 investment)

🏡 Selling a house takes months and requires on average around 100 hours time investment. And you don’t see the money for 3-6 months after you make a decision to sell it.

🏦 A less popular type of illiquid asset is venture capital that also returns around 20% returns over the long term. But your money is usually  locked for 7+ years, quite possibly even longer. 🕘

🔑 So, next time someone pitches an investing opportunity to you with returns higher than S&P 500 index, ask them about liquidity. If it’s months or years, ask 20% returns, that is, twice the return of S&P 500.

🚀 And here’s a handy chart for you to keep in your back pocket or as your phone background! 🚀

![investment chart](https://d391fpr6ao9qle.cloudfront.net/images/blog/which-investment-is-better.webp)


Which investment is better?


**Author:** **[Gagan](https://my.xillionapp.com/mentor/gagan)**

Plans are worthless, but planning is everything” - President Eisenhower.

A bit of planning can prepare your family for the uncertainties of a recession. Here are some ways to weather a recession (relatively) easily:

1️⃣ Economic Cycles 📉📈: American & world economy goes through an economic recession every decade or so on average. Some preparation is necessary, but constant fear is uncalled for.

2️⃣ Job Security ☔: Knowing your (+ spouse) job security is important. For instance, the current recession seems like a high tech recession, with some slowdown in housing.

3️⃣ Belt Tightening 🥦: If you are in a vulnerable sector, reducing avoidable expenses helps establish “baseline living expenses”.

4️⃣ Emergency Fund 💵: Stash away some cash. Not too much, though. Use Xillion emergency fund guide to really nail it down (link in first comment).

5️⃣ Don’t Panic 🙅: Recessions happen every decade or so, and typically last around 18 months. Please don’t sell all your investments the moment stock market turns negative.

With a little bit of planning, you can skirt the worst of this and future recessions.


A bit of planning can prepare your family for the uncertainties of a recession


**📈 😯 📉 You just heard the market went way up (or down) and want to check your portfolio.**

Here's why that might not be such a good idea:

First off, there's technically no harm in checking your portfolio. We recommend you check on it at minimum once every six months 📆 🚀🔎

Why?

Because the market changes over time. Sometimes fund options change as well. You can't expect everything to work on autopilot. Success means taking a few minutes every few months to make sure you are set up for long-term success 🥂 🎇 🎉

**[Xillion's portfolio optimizer](https://my.xillionapp.com/product/portfolio-analyzer)** is perfect for making sure you're on track, avoiding costly mistakes that can add up to millions of dollars over a few decades.

With all that being said ... 👆

You shouldn't check on stocks after a big day or loss if you know you'll be tempted to overreact. When it comes to long-term investing, time and patience are the key ingredients.

👶 We're all human, and it's natural to feel glee or fear based on markets. The key is overriding that impulse.

🛤 🚉 🚂 Having external guard rails can help with this — which is where having a **[Xillion's Mentoring](https://my.xillionapp.com/product/mentoring)** and **[Xillion Tools](https://my.xillionapp.com/product/control-center)** by your side can make such a big difference.

Get started by creating a free **[Xillion](https://my.xillionapp.com/home/)** account today! And follow us on LinkedIn for more investment tips and market updates.


Should you check your portfolio today?

**TL;DR: To prepare for a recession, spend a few minutes reviewing job security, savings, expenses and investments.**

Recessions are an inevitable part of modern life. Still, there’s never a good time for one. Maybe you’re at a pivotal moment in your career, just a few months away from promotion. Maybe your family member has a chronic illness, and you can’t afford to lose health insurance. Perhaps you just signed a 30-year mortgage that was slightly out of budget. All of these factors make the prospect of a prolonged economic downturn even scarier.

Luckily, economic cycles have been churning for centuries, so we know a lot about how to deal with downturns. Each recession is different, but they all have similarities too. Over time, you can observe what investment and personal finance strategies work best. This will help you come out of a recession with your life and finances intact.

When a recession looms, you might be tempted to avoid taking stock of your financial situation - why add the stress if it’s out of your control? But it’s better to face the situation head-on so you can make appropriate adjustments.

So without further ado, here’s your recession checklist:

**Job Security:**

This includes both how likely you are to keep your current job, and how likely you are to get a new job in a down economy. It also depends on the sectors impacted. For example, if you got laid off as a recruiter at a Big Tech firm, it might take you longer in this recession to find another one because most tech companies have curtailed hiring. But if you are working in the services/hospitality sectors and get laid off, the chances of finding a job within a few weeks are very high.

**Spouse Job Security:**

If you’re married, consider the income of your spouse as well. Also factor in their job security and health benefits. If you work in different industries, this can be a positive thing since it diversifies risk.

**Severance Package:**

Some companies, especially in the tech space, give generous severance packages that pay employees their full salaries for many months after layoffs. Severance packages are an important consideration in a downturn — they can add months of financial stability, providing a safety net while you look for a new job. Still, it’s best not to rely too much on a generous severance package. Companies have the final say in whether they give severance. And a company might collapse, which could mean no severance.

**Monthly Expenses:**

Divide your monthly expenses into fixed and variable costs. Decide which fixed costs can be eliminated or reduced if needed. Also give yourself an honest assessment of what lifestyle changes you’d be willing to make. If you’re stressed about a recession, it can be worth making changes before anything happens — a fancy vacation isn’t worth taking if it creates weeks of prolonged financial stress.

**Savings:**

How much money do you have in an emergency savings fund? Xillion can [help you figure out](https://xillionapp.com/product/emergency-fund/) the ideal amount, factoring in many of the things we discussed in this blog. Consider your savings and investments in light of the other factors discussed here. How long would your savings last? At what point would you need to tap into long-term savings, like a 401(k)? If the answer makes you uncomfortable, consider putting more money in liquid savings.

**Portfolio:**

How exposed are you to the market? If things get bad, when would you need to tap into your investment portfolio for money? Ideally, you don’t want to be in a position where you need to tap into long-term investments to cover daily expenses. This is especially true for retirement funds with tax benefits. To learn more about how to optimize your investment portfolio, check out [Xillion’s Portfolio Analyzer](https://xillionapp.com/product/portfolio-analyzer/).

**A final word of advice: don’t overreact, especially when it comes to investing decisions during a recession. We know this is easier said than done.**

Most Americans aren’t sufficiently prepared for a recession. But if you’re reading this, chances are you are more diligent about preparing for the worst. In fact, there’s a chance you could be too conservative and miss out on big opportunities.

**Be cautious, but don’t panic.**

An average recession lasts around 18 months. The S&P 500 might go down 30% or 40% during a recession. Rather than sell your investments, it might make more sense to buy more of them because fortunes are built in bear markets [Xillion's Invest](https://xillionapp.com/product/invest/) helps you identify stocks and funds that are right for you).

You will get through this. And if you play your cards right, you’ll come out of it in an even better financial position than before.

**A mentor can help you maintain perspective.** Many of [Xillion’s mentors](<(https://xillionapp.com/product/mentoring/)>) have weathered severe recessions, emerging from the chaos in even better financial shape. Our mentors can advise you on how to make the most of a down economy. If you’re interested in talking to a mentor, sign up for a session [here](https://xillionapp.com/product/mentoring/).

Recession checklist — how to prepare for a downturn

Recession Checklist - How to prepare for a downturn?


## Which investment is better?

① 10% per year returns + Complete liquidity (being able to convert the investment into cash)

② 12% per year returns + No liquidity for 3+ years

🕵️‍♀️ I was helping a friend, who is also a Xillion customer, solve some of their financial puzzles when this came up. They were being pitched an investment idea where their funds would be locked for years in return for slightly better returns.

🙋‍♂️ _My suggestion: ① is a much better deal, assuming the same level of risk for both._ Here’s why. 👇

💸 An illiquid asset should give twice as much return as a fully liquid asset such as the S&P 500 index fund (SPY) to be worth investing into.

💲 S&P 500 index long term returns are around 10%. And it is as liquid as cash because you can convert it to cash within hours, with 2-3 taps on your phone.

🏡 The popular illiquid asset most Americans own is a house. Most people buy houses with 80% loan. Real estate in the US appreciates around 4% per year, which is around 20% when you consider:

Purchase Price: $500,000
Down Payment: $100,000 (20%)
Bank Loan: $400,000 (80%)
1-Yr Price Appreciation: $20,000 (around 4% of the total value of the house)
Your Gain: 20% ($20,000 gain on a $100,000 investment)

🏡 Selling a house takes months and requires on average around 100 hours time investment. And you don’t see the money for 3-6 months after you make a decision to sell it.

🏦 A less popular type of illiquid asset is venture capital that also returns around 20% returns over the long term. But your money is usually locked for 7+ years, quite possibly even longer. 🕘

🔑 So, next time someone pitches an investing opportunity to you with returns higher than S&P 500 index, ask them about liquidity. If it’s months or years, ask 20% returns, that is, twice the return of S&P 500.

![Liquidity Other Investment Ideas](https://d391fpr6ao9qle.cloudfront.net/images/blog/liquidity-investment-ideas.webp)

🚀 And here’s a handy chart for you to keep in your back pocket or as your phone background! 🚀


Liquidity & Other Investment Risks


## Is inflation cooling?

📉 Sure, but that's not the full story.

The Bureau of Labor Statistics released the latest inflation data today. They found that inflation slowed down for a seventh straight month in January. So prices are still up 6.4% year-over-year, but that's a slower rate than the 9% rate we experienced in the middle of 2022.

You might think: **"Great! Inflation is down. Let's lower interest rates and get this STONKS party started again!"** 🎉 🚀 🚀 🚀

Sorry, not so fast.

Fed chair Jerome Powell warned last week: "There has been an expectation that it will go away quickly and painlessly — and I don’t think that’s at all guaranteed."

And indeed, if you look closer at the data, the prices for a lot of goods and services remain stubbornly high. Think about it — do you feel the inflation burden going down? In the U.S., fixed costs remain particularly high for things like mortgage/rent, health insurance, and student loans 🎒 🏥 💊 🏡

**The lesson?** When the problem is difficult, the solution is likely difficult too. The Fed isn't going to fix the American economy in just a few months ⚒

![Inflation Cooling](https://d391fpr6ao9qle.cloudfront.net/images/blog/inflation-cooling.webp)

Now is the perfect time to optimize your finances to weather the storm. **[Xillion](https://my.xillionapp.com/home)** can help will all facets of planning, from portfolio optimization to emergency savings. Get started with a free account today 😎 💸


Is Inflation Cooling?

The issue with CPI is it doesn't sufficiently account for asset / fixed costs.

**CPI might be deflating, but do Americans feel less financial strain?**

Mortgage / rents, car payments, health care costs, student debt take a huge chunk of American paychecks.

CPI might be deflating

## Student loan debt is getting out of hand, but that doesn't mean you should avoid it at all costs.

The White House recently released data illustrating the extent of our student loan problem:

_"Nearly one-third of borrowers have debt but no degree, according to an analysis by the Department of Education of a recent cohort of undergraduates."_

_"Since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation."_

_"The typical undergraduate student with loans now graduates with nearly $25,000 in debt."_

So should you avoid student loans at all costs? Not necessarily. Tuition is sky-high, and that's an unfortunate fact of life in contemporary America. But education can still unlock considerable opportunities for you throughout your career. It's ultimately about weighing the costs and benefits of loans.

Also, consider the distinction between good and bad forms of debt. When utilized properly, debt can be a useful tool in building wealth. Low-interest rate debt is better than high-interest debt.

**< 5% → Generally good**

**5% - 10% → Good if utilized well (to buy assets, higher education, etc)**

**> 10% → Generally bad**

For any big financial decision, our **[mentors](https://my.xillionapp.com/product/mentoring)** are here to help you through the journey.

Student Loan Debts


## Nationwide, rents tend to rise 5-10% annually.

NYC is an entirely different beast.

If you're a high earner, take the time to figure out if buying makes sense. A fixed-rate mortgage locks you into a payment rate.

A lot goes into the calculation, but **[Xillion](https://my.xillionapp.com/product/home-buying-guide)** can help.


NYC rents are rising!

## Food for thought: how much of what we call "inflation" for high earners is fixed costs versus consumer goods?

Groceries and aren't causing most $100,000+ earners to live paycheck to paycheck. It's mortgages, student loans, healthcare, auto loans, etc..

Paycheck To Paycheck


## It’s no secret that millennials have gone through their fair share of financial turmoil. Recessions, pandemics, and politics have simply tired us out. It seems we can barely think a month ahead, much less consider what we want to do with our savings.

**How do we know if we have the money to buy a car or a house? How much should we be saving for retirement? And will we ever even be able to retire?**

Truthfully, a lot of us aren’t the best at knowing the ins and outs of dealing with money.

**There’s no shame in this!** Some people are passionate about finance, and others are passionate about, well, literally anything else. In fact, just **48% of millennials and 43% of Gen Z are financially literate**. With just five states in the U.S. requiring a finance class, this isn’t surprising. We’re often stuck in the mentality that there are bigger fish to fry, but really, our financial decisions determine a significant portion of our lives. We can get quality help from Xillion.

**[Xillion’s Mentoring](https://my.xillionapp.com/product/mentoring)** service aims to guide you in your financial journey. You connect with experienced mentors who can help you with essentially everything:

✅ saving strategies,

✅ debt management,

✅ retirement planning

✅ investing,

✅ 401k strategies,

and so much more. This isn’t an online tutorial, but a do-it-yourself type of service. You’re connected to real people who understand and who you can trust. You’re able to choose your mentor based on your specific needs in the areas of investments, risk management, debt management, real estate, etc.

**So how does this differ from financial advising?**

First, we try to connect you with a mentor who is a first or second-degree connection of yours. We want to establish that trust, community, and closeness that a third-party advisor might not always provide. Second, each of our mentors has a deep understanding of certain areas, which means you can customize the services you receive based on what you need the most guidance with.

We believe that nobody should be punished for not loving money management. Everyone deserves access to improving the way they live. It’s time to take the reins in our financial decisions, and **[Xillion’s Mentoring](https://my.xillionapp.com/product/mentoring)** product is there to help every step of the way.


Do you have time to manage your finances?


**Time is the most important ingredient in investing**.

That’s why it’s so important to set yourself up for success early. Unfortunately, when most people start investing, they know the least about how to do it and are therefore most likely to make mistakes. Xillion can help you avoid early mistakes and reap the rewards over time. If you make these small changes now, it can add up to millions of dollars over a couple of decades.

Here are five of the most common mistakes beginner investors make, along with tips for avoiding them:

**1. Holding too much cash in an emergency fund.**

In 2022, only 33% of Americans [were financially prepared](https://t.co/XOUpqzamol) to cover an unexpected $400 expense. But if you’re reading this, chances are you’re more diligent about saving than the average American — perhaps too diligent.

We’ve found that Xillion customers tend to save too much money. One Xillion customer had around $250,000 in emergency savings! This can be a costly mistake. While it's important to have an emergency fund, saving too many limits your ability to grow wealth over time. For example, an investor who put $10,000 in an index fund with an average annual return of 7% would have over $76,000 after 30 years, compared to just $18,000 if they kept the money in a savings account earning 2%.

**Solution**:

Xillion’s [Intelligent Emergency Fund](https://my.xillionapp.com/product/emergency-savings-guide/) calculator helps you figure out the right amount to stash away. We also help you invest the rest for long-term returns.

**2. Not rolling over your retirement accounts.**

When you change jobs, it's important to think carefully about what to do with your 401(k) or Roth IRA account. Rolling it over into another employer's retirement plan can help you avoid taxes and penalties while you continue growing your retirement savings.

Another reason? Reduce complexity. It’s easier to forget about retirement accounts when you have two or three of them. Because of the tax benefits of a 401(k) or IRA, it’s especially important to get the investment allocation right early on. Small corrections now can create millions of dollars throughout your career.

**Solution**:

Call your old retirement account provider. Tell them to close your account and send you the check. Take this check to your current 401(k) or IRA providers. Then use Xillion’s [401(k) optimizer](https://my.xillionapp.com/product/401k-optimizer/) to optimize your account in as little as ten minutes. Step-by-step instructions on how to do rollover are in this [blog](https://www.xillionapp.com/combine-your-401k-accounts/).

**3. Avoiding index funds and ETFs.**

Buying individual stocks can be fun and lucrative — if you know what you’re doing. But index funds should be the foundation of your portfolio, especially while you’re young. Index funds provide diversification by including a large number of stocks in one investment vehicle. This lets you enjoy the high average returns of equities, without the higher risk that usually comes with investing in individual stocks.

**Solution**:

S&P 500 ETFs (VOO, SPY, etc.) have an average historical return rate of around 13% per year (last 10 years). They include companies across industries such as Apple, Microsoft, McDonald’s, Walt Disney, Johnson & Johnson, Home Depot, and Procter & Gamble. And the best part? Index funds and ETFs such as VOO have a consistent investment strategy, so they adjust over time and don’t need much attention from you.

Don’t know where to get started? Check out our [blog post](https://www.xillionapp.com/why-index-funds-should-be-the-foundation-of-your-portfolio/) on the benefits of index funds. Xillion’s [portfolio analyzer](https://my.xillionapp.com/product/portfolio-analyzer/) will help you integrate them into your investment portfolio with the optimal balance.

**4. Renting an apartment when it makes more sense to buy.**

62% of Americans below the age of 35 rent, [according to](https://www.pewresearch.org/fact-tank/2022/03/23/key-facts-about-housing-affordability-in-the-u-s/) Pew Research Center. Home prices have risen at a much higher rate than incomes in recent years, pushing home ownership out of reach for millions of Americans.

But that might not be the case for you. It’s important to find out because rents tend to rise 5-10% annually, while a fixed-rate mortgage lock you into a payment rate.

**Solution**:

To figure out whether you should rent or buy, it’s important to consider factors such as the cost of home ownership, your ability to save for a down payment, and your long-term financial goals before making a decision. Xillion's [Home Buying Tool](https://my.xillionapp.com/product/home-buying-guide/) simplifies the math, giving you confidence in whichever decision you make.

**5. Timing the market.**

Investing tends to be very psychological and that can create problems. When markets are up, investors feel optimistic and put more money in markets. When markets are down, investors feel cautious and avoid putting money into markets. The problem? You ideally want to put money into markets when valuations are down, and reap the returns as investment values go up.

**Solution**:

Fortunately, there’s a tried and true technique for avoiding this problem: dollar cost averaging. All dollar cost averaging means investing a fixed amount at regular intervals. For example, you might invest 20% of your paycheck into markets every month. Dollar-cost averaging makes it so you don’t have to worry about whether the market goes up or down. Instead, over time, it gets averaged out. You just trust the process. And trust low-cost index funds or ETFs like FXAIX, VOO, SPY, etc.

Still don’t believe us? Check out this [blog post](https://www.xillionapp.com/the-magic-recipe-to-protect-you-against-bear-market/) that shows how a portfolio built through dollar cost averaging would perform over time.

**Final thoughts**

If you made some of these mistakes, fear not. As the saying goes: “The best time to plant a tree was 20 years ago. The second best time is now.”

Correcting these mistakes early can help set you on a path to financial success. By avoiding these common pitfalls, you can ensure that your investments are working hard for you and growing your wealth over time.

Even if you don’t suffer from these beginner mistakes, Xillion has plenty to offer. We take the guesswork out of investing and set you on the optimal path toward your financial goals. Get started with a [free account](https://my.xillionapp.com/signup/) today.


Starting your investing journey? Avoid these 5 common mistakes.


📢📢 The **median millennial** household saved **$50,000 for retirement** and had **$3,000 in emergency savings**.

📢📢 For **working Gen-Zers**, the median **retirement per household** stood at **$33,000**, with **$2,000 in emergency savings**.

**How much should you be saving**❓💸💲

**Are you on track**❓🎯

It can be hard to figure it out, and even harder to feel comfortable that you made the right decision.

**Xillion can help** ✅ ✅. Our Intelligent [emergency fund calculator](https://www.xillionapp.com/product/emergency-fund/) 🧨 💵 helps you figure out the right amount to stash away. We also help you invest the rest for long-term returns, with a [portfolio analyzer](https://www.xillionapp.com/product/portfolio-analyzer/) 📊 🔭 and [401(k) optimizer](https://www.xillionapp.com/product/401k-optimizer/) 👨‍👩‍👧‍👦 🚀.

Source: [Transamerica Center for Retirement Studies](https://transamericainstitute.org/docs/default-source/research/emerging-from-the-covid-19-pandemic---four-generations-prepare-for-retirement-report.pdf)


How much should I need to Save?


The Federal Reserve sets the federal funds rate, which guides interest rates and the flow of money in an economy.

When interest rates are low, loans are cheaper, so demand for them goes up. This boosts spending and corporate revenue. Because demand is higher, prices go up.

When interest rates are high, loans are more expensive, so demand goes down. This slows spending and corporate revenue. Because demand is lower, prices go down.

To maintain a healthy economy, the Federal Reserve needs to keep interest rates at a healthy in-between rate — not too high, not too low. Keeping interest rates too low leads to market distortions and inflation. Keeping interest rates too high makes it difficult for businesses to operate and therefore limits economic growth.

At the start of February, the Federal Reserve [increased interest rates](https://www.nytimes.com/live/2023/02/01/business/fed-interest-rates-inflation) by a quarter-percentage point. If your eyes are already glossing over, we don’t blame you. Interest rates can feel incredibly dry and boring. And, if we’re being honest, they are often dry and boring. But interest rates are also essential to understanding markets and the economy.

**Here are some of the basics you should know about interest rates:**

Generally speaking, interest rates are the price that a borrower pays for the use of money. When you take out a loan or a mortgage, the interest rate determines how much you will pay in addition to the principal amount. For example, if you take out a one-year $100 loan with a 6% annual interest rate, you will owe the bank $106 at the end of the year.

The Federal Reserve sets the federal funds rate, which is the interest rate banks use to lend money to each other overnight. When people talk about the Fed raising interest rates, they mean the federal funds rates.

The federal funds rate is the most important benchmark interest rate in the U.S. economy. It serves as the basis for commercial interest rates including those on mortgages, auto loans, and other consumer loans. As with everything else, when price goes up, demand comes down. Money is no different.

**The Fed uses interest rates as a tool to manage inflation, employment, and economic growth.**

**When the economy is strong and growing, the Fed can raise interest rates to keep inflation under control.**

This makes borrowing more expensive and slows down spending, which can help prevent the economy from overheating.

**If the economy is slowing down or in a recession, the Fed may lower interest rates to stimulate spending and encourage borrowing.**

Interest rates also impact savings and investments. When you deposit money into a savings account or invest in a bond, the interest rate determines the return you will receive on your money. The higher the interest rate, the more money you will earn. This makes people and companies more likely to save and less likely to spend.

**Ok, so how exactly do interest rates impact the stock market?**

**When interest rates are low, it becomes cheaper for companies to borrow money, which can boost investment and economic growth.**

Low interest rates also encourage consumers to spend more, as borrowing and refinancing costs decline. Both of these conditions encourage stock prices to go up.

When interest rates are low, companies can more easily [borrow money](https://fortune.com/2019/08/20/stock-buybacks-debt-financed/) to finance stock buybacks and dividends. That’s a big deal, because around 95% of corporate profits from S&P 500 companies have [gone towards](https://www.bloomberg.com/news/articles/2014-10-06/s-p-500-companies-spend-almost-all-profits-on-buybacks-payouts) stock buybacks and dividends in recent years. When companies perform buybacks or pay dividends, it also boosts the value of their stock. For example, Meta’s stock price recently shot up 23% shortly after the company [announced a $40 billion](https://www.cnbc.com/2023/02/01/facebook-parent-meta-announces-40-billion-stock-buyback.html) stock buyback.

**On the flip side, when interest rates are high, it becomes more expensive for companies to borrow money, which can reduce investment and slow economic growth.**

High interest rates can also dampen consumer spending, since borrowing and refinancing costs increase.

**To maintain a healthy economy, interest rates can’t always be low.** Otherwise markets and companies start behaving in ways that don’t make sense. For example, low interest rates during the pandemic propped up many tech company stocks to absurd levels — and now that interest rates went up again, the stocks have gone down. In some cases, the stocks are down by 90%+. The companies themselves didn’t change fundamentally during this time — market conditions simply fueled irrational investor exuberance during the pandemic, in what became a market bubble. Low interest rates can also create periods of social chaos and international conflict, a pattern that [has played out](https://www.marketplace.org/2018/09/25/dalio-debt-cycle/) throughout history.

**What’s going on with interest rates now?**

In 2020, COVID led to a sharp decline in economic activity, and the Fed responded by cutting interest rates to near zero in an effort to support the economy. The Fed [started buying government bonds](https://www.brookings.edu/bpea-articles/shrinking-the-federal-reserve-balance-sheet/) and mortgage-related securities. This was something they had also done before during the financial crisis in 2008-2009 to help the economy recover. The Federal Reserve's holdings grew from $4.3 trillion in March 2020 to $8.9 trillion in May 2022 because of this process, which is also called Quantitative Easing (or QE), which is kind of a misnomer for money printing by the Government.

All that extra money in the markets started contributing to price inflation. At the same time, the pandemic crippled supply chains and made many things scarce, such as semiconductors. This also contributed to inflation, which [hit 40-year highs](https://www.wsj.com/articles/fed-approves-quarter-point-rate-hike-signals-more-increases-likely-11675278190) in recent years. Consumers began struggling to afford basic goods and services.

The Fed decided that it needed to increase interest rates to combat inflation. Over the past year, it [raised](https://www.wsj.com/articles/fed-approves-quarter-point-rate-hike-signals-more-increases-likely-11675278190) the benchmark federal-funds rate from near zero to between 4.5% and 4.75%, the highest level since 2007.

Finally, around the start of 2023, inflation [seems to be](https://www.wsj.com/articles/us-inflation-december-2022-consumer-price-index-11673485441) slowing down, driven by lower energy prices. That led to the slower Fed rate increase we mentioned in the beginning, which became a source of optimism for investors (because they want low rates again). However, the Federal Reserve Chairman Jerome Powell [also warned](https://www.wsj.com/articles/fed-approves-quarter-point-rate-hike-signals-more-increases-likely-11675278190) “the job is not fully done.”


How interest rates impact your portfolio - everything you need to know


## Are you thinking of buying a home, but don’t know if it’s the right time to pull the trigger?

Surely, you might think, these sky-high housing prices need to go down soon. The [typical](https://www.zillow.com/research/zhvi-methodology/) home price in the U.S. hit around $357,000 in December, more than double the average at the start of 2012, [according to](https://www.zillow.com/research/december-2022-market-report-32009/) Zillow research. Between November and December, home prices [fell 0.2%](https://www.zillow.com/research/december-2022-market-report-32009/) — that’s not much, but it’s remarkable because home prices have only gone up over the past decade.

So, are things changing? Is it worth waiting to buy your dream home? The New York Times [aggregated](https://www.nytimes.com/2022/11/04/realestate/housing-market-interest-rates.html) forecasts from financial institutions on the housing market.

Here’s what they had to say:

**Morgan Stanley**: housing prices will decline 7% between June 2022 to December 2023.

**Moody’s Analytics**: housing prices will decline 10% between June 2022 and summer 2024. However, Moody’s said that a recession could lead to a drop of 20%, and even more in the hottest real estate markets, such as Boise and Phoenix.

**John Burns Real Estate Consulting**: 10% decline through 2024.

So prices seem to be cooling off. But timing the real estate market is incredibly difficult. Housing prices are influenced by hard-to-predict factors such as interest rates, inflation, and employment rates (not to mention a pandemic causing rapid shifts in office attendance).

Right now, for example, home prices in San Francisco are [falling faster](https://www.zillow.com/research/december-2022-market-report-32009/) than the rest of the U.S. due to [things like](https://www.nytimes.com/2022/12/17/business/economy/california-san-francisco-empty-downtown.html) remote work and the tech recession.

**With real estate, time is more important than timing.**

What does that mean?

The amount of time you own a home is generally more important than your purchase timing (whether you buy during a market upswing or downswing). Over the long term, U.S. residential real estate [tends to provide](https://xillionapp.com/product/financial-independence/) a 4% return. In shorter time horizons, the markets can fluctuate drastically. If you purchased a home in 2007 and sold in 2009, chances are you lost a lot of money. But if you sold that same home in 2020, chances are you nearly doubled your initial investment.

**Ultimately, it’s more important to base your decision on your personal situation.**

For example, do you currently own a home or are you renting? How long do you expect to live in a home? What do you expect your income to be during the time you would own the home? Do you have cash on hand to put a large down payment on a home? Could an interest and tax deductible help offset your income tax?

**Xillions’ [Home Buying Tool](https://xillionapp.com/product/home-buying-guide/) will walk you through all of these considerations so you can make the smartest financial decision.** All you have to do is plug in the numbers and find out if it is sensible to invest in the property. And if you still have questions, Xillion mentors specialize in real estate and can guide you through the decision.

A final word of wisdom: Buying a home is hard! 61% of millennial home-buyers [cried at least once](https://zillow.mediaroom.com/2022-06-02-Half-of-Americans-cry-at-least-once-while-buying-a-home) during their attempt at purchasing a home. Fortunately, Xillion is here to help make the process tolerable, and — most importantly — great for your financial future 🏡

To get started, set up your Xillion account today. Navigate to the Home Buying Guide to start understanding whether a home purchase is right for your journey to financial independence.


Should you wait to buy your dream house?


401k & IRA are great for saving and investment because they can be on autopilot most of the time and provide great returns. But this is also one of the biggest problems: we expect everything will work perfectly on autopilot no matter what. In reality, autopilot only works if you have all the inputs right. This only takes a few minutes, but it can make the difference of whether you get to your desired financial destination or not.

**So how often should I look at my 401k or IRA portfolio?**

Based on our experience working with customers, checking on your portfolio **every six months** is a good practice. Why? Because the market changes over time. Sometimes fund options change as well. This is especially important if you have old 401k accounts with your previous employers, where the old plan administrators can make drastic changes for ex-employees.

**What tools can I use to make it easier?**

Plan administrators like Fidelity, Vanguard, Prudential, etc. don’t make it that easy to see and compare things easily (we suspect it is by design). Xillion’s [401k Optimizer](https://xillionapp.com/product/401k-optimizer/) analyzes and improves your portfolio in minutes by helping you compare different investment options quickly and clearly. The 401k Optimizer makes it super easy for you to keep tabs on different 401k & IRA accounts in your household. It helps you visualize how your investments are doing across different accounts.

**How often should I rebalance my 401k portfolio? And how?**

It is generally a good idea to review and rebalance your 401k / IRA portfolio every six months or so. Xillion [401k Optimizer](https://xillionapp.com/product/401k-optimizer/) helps you do this in less than five minutes. It also lets you rebalance portfolios across different accounts.

**What are some examples of how the [401k Optimizer](https://xillionapp.com/product/401k-optimizer/) has helped some of your customers?**

One customer discovered that one of their IRA accounts had $50k cash sitting in it for a few years. Since their account always showed a stock-like ticker against this amount, they weren’t aware that it was in fact cash. By investing this amount into low cost index funds, this customer is likely to grow this money into around $1.5m over the next 30 years.

**How can I use this product?**

Connect your 401k accounts with Xillion, go to [401k Optimizer](https://xillionapp.com/product/401k-optimizer/) and follow the instructions to reach a more secure financial future!

If you have any questions, please reach out to us at hello@xillion[.]co


How often should I look at my 401k or IRA portfolio?


Our January 2023 economic insights summary:

1️⃣ **Inflation has started to cool, even turning negative month over month.**

The annual inflation rate in December was 6.5% annually, but it declined by 0.1% from the previous month. We believe inflation is likely to come back to 2%-3% within the next 12-18 months. [Consumer Price Index Summary](https://www.bls.gov/news.release/cpi.nr0.htm)

2️⃣ **The Fed is poised to make smaller interest rate changes, and possibly pause further hikes after the next one or two.**

The Fed is poised to make smaller interest rate changes. Since inflation is already declining hard, we believe the Fed will likely pause after two more hikes of 0.25% each. Bank of Canada raised its rate to 4.5% but said it will pause rate hikes for now.[Federal Funds Effective Rate](https://fred.stlouisfed.org/series/fedfunds)

3️⃣ **US housing market is really bad at this time, with 35% y/y decline.**

The US housing market is really bad. Sales of new and existing homes are down 34% over the last one year because higher mortgage interest rates have kept the buyers on the sidelines. Our take is that 2023 will remain lukewarm for the real estate market, with a rebound possible in the second half of 2024 as interest rates will likely come down a decent bit by then. [US Existing Home Sales](https://ycharts.com/indicators/us_existing_home_sales)

4️⃣ **Tech sector is continuing to shed jobs. Google, Facebook, Stripe, PayPal, Snap, Amazon, Microsoft, Spotify and the list goes on.**

The US tech sector is continuing to shed jobs this year as well. We believe that tech jobs will not grow much during 2023 and 2024, before starting to grow again, but much more slowly as compared to heated hiring years from 2018 to early 2022. [Tech Layoff Tracker](https://www.trueup.io/layoffs)


Monthly Economic Insights - January 2023


Credit score has become an integral part of our financial lives. Many people view it as the single most important measure of financial health. And while there’s a correlation between financial health and credit score, that’s not the whole story. You should know credit score was not created to help consumers, but to help **banks make more money.**

### A (very) short history of credit scores

Credit scores [trace back](https://www.wsj.com/articles/SB10001424052970203753704577253750464639524) to the 1950s, when the Fair Isaac Corporation (FICO) developed the first scoring system for banks. FICO wanted to help banks assess the risk of lending money to a borrower. Lenders could then adjust loan terms based on the likelihood of getting paid back. This came from borrower data such as credit history, income, and total debt, etc.

FICO, VantageScore, and Experian have helped build credit scoring into [an estimated](https://www.ibisworld.com/industry-statistics/market-size/credit-bureaus-rating-agencies-united-states/#:~:text=What%20is%20the%20market%20size,is%20%2414.8bn%20in%202023.) $14.8-billion industry in 2023. Modern scoring systems take into account a wide range of data, in some cases a borrower's credit history or even their social media activity.

But there are surprising blind spots:
It [doesn't consider](https://www.cnbc.com/select/how-does-salary-and-income-impact-your-credit-score/) a borrower's income, retirement savings, net worth, or assets.
Credit scores can change in short periods of time, even when your financial health stays around the same. Recent analysis [showed](https://www.wsj.com/articles/SB10001424052970203753704577253750464639524?mod=googlewsj) that around 70% of credit scores swing by as much as 20 points in a 90-day period. If you make a big purchase on your credit card in one month, your credit score can go down substantially.
Credit scores often rely on credit history. This means a person with a great salary and savings could be penalized for not having taken out debt in the past.
Credit score only gives you a number. It doesn’t tell you how you can improve or provide steps for improving your true financial health.

A high credit score means you can borrow money at good terms from the bank. It should not be viewed as a measure of your financial health.

But what is a good measure of your own financial health?

### The Money Score

We at Xillion developed the Money Score to help you actually measure your financial health. Think of it as a first step: if you want to get better at something, you need to know where you’re starting and where you want to go. Money Score gives you clear direction.

So how is Money Score different from a traditional credit score? Money Score accurately measures your:

-   Saving & spending habits.
-   Stock, real estate, and other investment performance.
-   Knowledge of economics and finance.
-   Ability to manage risk and debt, appropriate for your age.
-   Ability to make excellent financial decisions.

To put it simply, Money Score measures how well you manage your own money. The typical Xillion customer can uncover 5% - 10% of improvement in returns per year by using Money Score as a guide.

Get your [Money Score](https://my.xillionapp.com/product/money-score) for FREE today.


Your credit score isn’t your friend. Try Money Score instead


Warren Buffet [advises people](https://www.berkshirehathaway.com/letters/2013ltr.pdf) to invest in index funds. But he himself also invests in individual stocks. Why? Because everyone should invest in what they know well. For Buffet, it’s primarily US businesses because he and his team have studied them for decades. But for most people who don’t have the skills, time, and passion for doing hours of research on specific businesses, investing in index funds makes perfect sense.

Index funds provide diversification by including a large number of stocks, which reduces portfolio risk. When you invest in one index fund, you’re often indirectly investing in hundreds of companies all at once. This lets you enjoy the high average returns of equities, without the risk that comes with investing in individual stocks.

An individual stock represents a single company. If you invested all your money in Amazon in 2000? Congratulations. But if you invested in Pets.com, Webvan, or Boo.com … Well, we’re sorry. Even most professional fund managers [can’t beat](https://www.ginsglobal.com/articles/80-of-us-fund-managers-underperform-sp-500-over-5-years/) the S&P 500.

**Index fund benefits include:**

-   In general, **higher average returns** than CDs, bonds, and real estate.
-   **Low expense ratios,** which can improve returns over time.
-   **Consistent investment strategy,** which can make index funds more stable and predictable.
-   **Accessibility,** since index funds don’t require much time or expertise to provide a healthy portfolio return over time.
-   **Minimal time investment,** so you can focus on what’s important for you and your family.

You can think of investing a bit like dieting: once you have the right inputs, time is the most important ingredient. Extending the metaphor further, index funds are the vegetables of an investment portfolio. Should index funds be your only investment class? No. But to end up in a strong financial position, index funds should probably comprise the bulk of your portfolio, especially while you’re young.

Some examples of common index funds include:

-   **S&P 500 ETF (VOO, SPY, IVV):** These ETFs track the S&P 500 index, a collection of 500 large publicly traded companies in the United States. VOO [has an average historical return rate](https://investor.vanguard.com/investment-products/etfs/profile/voo#portfolio-composition) of around 13% per year. Apple, Microsoft, and Amazon make up the greatest share of the S&P 500 funds based on their market caps, but companies across industries are represented, including McDonald’s, Walt Disney, Johnson & Johnson, Home Depot, and Procter & Gamble.
-   **Total Stock Market ETF (VTI):** VTI [tracks virtually all](https://investor.vanguard.com/investment-products/etfs/profile/vti#portfolio-composition) of the publicly traded companies in the U.S. stock market. VTI has an average historical return rate of around 7.5% per year and includes stocks from companies across industries, including Apple, Wells Fargo, Chevron, Microsoft, and Target.
-   **Vanguard Growth ETF (VUG):** VUG tracks a selection of large-cap growth companies that are expected to grow faster than the overall market. VUG [includes](https://investor.vanguard.com/investment-products/etfs/profile/vug#performance-fees) companies such as Amazon, Meta, NVIDIA, Visa, and Google. It has an average historical return rate of around 9% per year, and its risk profile is considered to be moderate to high, as growth companies tend to be more volatile than value companies.
-   **Vanguard International Stock Index Fund (VGTSX):** VGTSX includes a wide range of stocks from developed markets outside the U.S. It has an average historical return rate of [around 4% per year](https://institutional.vanguard.com/investments/product-details/fund/0113) since inception. There are nearly 8,000 companies included in VGTSX, and nearly 68% of those are large-cap firms. Japan, the United Kingdom, and China make the top three countries in terms of the headquarters location of companies represented in VGTSX.

While index funds are an important part of any investment portfolio, it is important to diversify and invest in other asset classes as well. Just as eating only vegetables won’t get you to optimal health, investing exclusively in index funds probably isn’t a good idea either (though by no means is the worst investment mistake).

Does that mean you should never invest in individual stocks? No. It just means an index fund should be the foundation of your portfolio. But if you know a particular industry or business much better than almost anyone else in the world, it might make sense to own individual stocks for such businesses.

Striking the right balance is hard, but Xillion can help. Our [401(k) Optimizer](https://my.xillionapp.com/product/401k-optimizer) scans your account to look for all the inefficiencies. We’ll suggest simple changes that add up to a big difference over time. We have investment mentors with expertise in real estate, stocks, bonds, angel investing, and (of course) index funds.

To get started, set up your Xillion account today. Navigate to the Portfolio tab to see suggestions for how you can optimize your path to financial independence.


Why index funds should be the foundation of your portfolio


#### We're in the middle of a global recession. Tech giants like Amazon, Salesforce & Microsoft are laying off 1,000s of employees. 50+ US companies have laid off almost 30K people in 2023 alone. 💼😢

#### As a wise person said, "Being prepared is half the victory!" This checklist will help you prepare for the worst. 💯✌️

**Severance Payment 💰💰**
Most employers will pay a few weeks' salary at the time of a layoff. This detail is usually available in the offer letter or HR policy book and will also be included in the severance letter.

**Health Insurance - COBRA 🏥🏥**

COBRA allows employees and their dependents to continue existing health insurance benefits even after the layoff. You will have to pay the entire premium out of your own pocket, but it would cost less than buying health insurance on your own. Some employers will also pay COBRA premium for a few months as part of the severance package. [More information](https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf)

**Switching to Spouse’s Health Insurance 👥**

If you and your spouse are on separate health insurance plans, you can get added to your spouse’s health insurance plan after a layoff. You can also change coverage for kids/dependents in the immediate aftermath of a layoff. [More information](https://www.healthcare.gov/glossary/qualifying-life-event/)

**State Funded Health Insurance 🩺🩺**

Some states allow you to apply for state funded health insurance plans. These plans are highly subsidized but the coverage might not be the same as your current plan. [More information for California workers](https://www.coveredca.com)

**Unemployment Insurance 💵💵**

Unemployment Insurance is paid by the state government when someone loses their job. An average person will receive approx $400 - $600 a week for 26 weeks (the amount varies by state). You need to fill out a form on the state government website to receive this payment. [More information](https://www.dol.gov/general/topic/unemployment-insurance)

**Emergency Fund 🆘🆘**

Always make sure you have enough funds in your savings account to handle an emergency. You can use [Xillion's Emergency fund calculator](https://my.xillionapp.com/product/emergency-savings-guide) to calculate how much funds you need for an emergency situation.


Recession checklist

**Is my stock portfolio doing better than S&P 500? 🤔**

The simple answer is to check if your portfolio's annual returns are more than S&P 500's annual return. But this approach doesn't consider the risk you took by investing in direct stocks.

So the question now is whether are you rewarded enough for the risk taken? For that, you should know your portfolio's Alpha.

**So, What is Portfolio Alpha (α)? 🧠**

Alpha in general is a measure of your portfolio's ability to beat the market. It is the excess return your portfolio can generate on top of the expected return for the risk undertaken.

Alpha is usually represented as a single number like +2 or -4. This means your portfolio has performed 2% better or 4% worse than the expected returns.

**If α > 0,** then your portfolio is doing better than expected. 🤑🤑

**If α = 0,** your portfolio is meeting the expectation. You can try to improve it by optimizing the portfolio.💰💰

**If α < 0,** your portfolio is doing worse than the expectation. You can switch to an Index Fund/ETF instead or you can try to improve it by optimizing the portfolio. 🙆🙆

**How to calculate Alpha (α)?**

Don't worry, that's on us! :) 🚀 Check [Xillion Portfolio Analyzer](https://my.xillionapp.com/product/portfolio-analyzer) 🚀

What is Portfolio's Alpha?

**Stock market is down by 1%, but why is my portfolio down by 2%? 🤯**

The answer is your portfolio beta is high! ⬆️

**So, what is Portfolio Beta (β)? 🤔**

A portfolio's beta (β) is used to measure how risky the portfolio is compared to the index (usually the S&P 500).

For example, if the portfolio's beta is 2, it means that if the stock market goes up by 1% then the portfolio will go up by 2% and vice versa.

**β > 1** means your portfolio is more volatile than the index. You're taking an aggressive approach. ⚡⚡

**β = 1** means your portfolio is as volatile as the index. Its better to switch to Index Funds/ETFs 🧘🧘

**β < 1** means your portfolio is less volatile than the index. You're taking a conservative approach. 🔰🔰

**-ve β** means your portfolio moves in the opposite direction of the index. ⬇️ ⬇️

**What is a Good Beta (β)? 💝**

A good beta for you is based on your risk appetite and your goals. 🎯

If you wish to replicate the market performance, buy an Index Fund/ETF. 🧘

If you are conservative and want to preserve the principal, a lower beta portfolio might be ideal. 🔰

If you are aggressive and want to generate market-beating returns, go for a higher beta portfolio 🚀. But be tolerant and patient when the market goes down as your portfolio will even go down further. 🔥

**How to calculate Portfolio Beta (β)?**

Don't worry, that's on us! :) 🚀 Check **[Xillion's Portfolio Analyzer](https://my.xillionapp.com/product/portfolio-analyzer)** 🚀

What is Portfolio's Beta?


Investing in a 401(k) is usually the smart thing to do — but not all 401(k) investments are equally smart. In fact, you might think you’re doing everything “right” — maxing out your employer match, contributing the full amount, investing in index funds — but you can still be leaving hundreds of thousands of dollars on the table over the course of 10 to 20 years.

We’re going to assume you know the basics of 401(k) strategy:

##### 1) Max out your contribution if possible.

##### 2) Don’t actively manage your retirement portfolio.

##### 3) Try not to withdraw 401(k) funds before retirement.

##### 4) Reduce your investment risk as you approach retirement age.

Even if you’re following all these best practices, there’s still usually room for a lot of improvement. Here are a few of the most underappreciated 401(k) investment mistakes:

##### Investing in specialty retirement funds with high fee structures.

Investment platforms such as Vanguard, Fidelity, and Charles Schwab offer mutual funds intended to simplify retirement investing. For example, a “2050 Retirement Fund” would allocate a mix of stock and bond index funds appropriate for someone wanting to retire in 2050. The investment allocation changes automatically as you get closer to retirement, reducing the portfolio risk. The downside of these funds, however, is that they often have higher fee structures (in some cases 40x more expensive) than if you were to allocate the investments yourself. The investment platforms are charging for convenience. But if you can figure it out — and Xillion can help — you get the benefit of greater control over your investments, lower fees, and higher returns.

##### Being overly risk-averse while you’re still young.

When it comes to retirement, you might think it’s better to be safe than sorry. But while you’re still early in your career, you want to steer investments towards index funds instead of bonds. Over long periods of time, index funds tend to generate a predictable return of around 10% (S&P 500 index long-term returns), [compared](https://money.cnn.com/retirement/guide/investing_bonds.moneymag/index3.htm/) to the 5-6% return of long-term government bonds. This difference might seem minor on paper, but it can add up to six figures for a portfolio of $10,000.

##### Investing in target funds with the wrong end date.

This one is pretty simple: remember those “2050 Retirement Funds” we discussed? Well, if you own a “2030 Retirement Fund” and you plan on retiring in 2050, you will really be missing out on investment opportunities. Funds aimed at people retiring sooner tend to be less risky, but with the expected tradeoff of generating a lower return.

##### Leaving cash in your account.

If you’re leaving too much cash in your account, you’re almost certainly leaving a lot of money on the table. This is especially true with inflation so high, since cash doesn’t appreciate in value to keep up with the rising costs. Keeping 401(k) funds in cash is especially unwise if you’re far from retirement, since that’s when you stand to gain the most from investing in a higher-return index fund. If you’re close to retirement and still looking for a lower-risk investment, then there are lower-risk bond indexes and low-risk securities indexes that provide steady, low returns without as much risk.

##### Multiple Accounts

Leaving money across multiple accounts as you switch jobs is likely to reduce your overall return. We wrote more about it [here](https://xillionapp.com/combine-your-401k-accounts). Xillion helps you connect all your accounts and optimize your portfolio across them.

Striking the right balance on all of these is difficult, but we can help. Xillion’s [**401(k) Optimizer**](https://xillionapp.com/product/invest/) scans your 401(k) account to look for all the inefficiencies. We’ll suggest simple changes you can make and show that those can add up to a big difference over time.

To get started, set up your **[Xillion account](https://xillionapp.com/product/invest/)** for **FREE** today and navigate to the Portfolio tab to see suggestions for how you can optimize your path to financial independence. And if you have any questions along the way, our investment mentors are here to help.


How to Maximize 401k Returns by Avoiding Common Pitfalls


**Author:** **[Gagan](https://www.linkedin.com/in/gaganjit/)**

**_🙊 I once lost 99% of an investment when I tried to get too smart about investing. Then I learnt to invest at the intersection of: where I live, what I do, and what I love. ✅_**

🧠 Investing in a company’s stock means becoming a small partner so you can have a small share of future profits. But how can one know how much future profit a company can bring? Where you live, what you do for a living and what you do for fun can get you pretty far in this quest. Let’s unpack: 🔢

#### 1️⃣ Where I Live 🏡

Where I live influences my investment decisions the most.

🇺🇲 Living in the US for the last 21 years gives me the front row seat to American consumer’s choices. Moreover, living in Silicon Valley, I get to meet a lot of people that work in tech. This gives me a sneak peak into the new innovations coming out of local tech companies.

⚡ In 2012, we bought Facebook stock at IPO based on the reading of how much Americans liked the platform at the time. Selling Facebook stock in 2017 was a direct result of seeing American consumer sentiment change for the worse.

🚘 In 2013, seeing some of our friends drool over Tesla Model S prompted us to buy the stock, a large part of which we still hold. In 2018, we doubled down on Tesla based on our read of how much existing Tesla customers loved their cars.

🔑 This sentiment reading happened through casual conversations with our friends, co-workers, neighbors, acquaintances. That is, the real people we were interacting with every day without putting any extra effort.

🚩 The same people also gave us a clear signal in the heady times of 2020-2021 that Crypto wasn't really useful. Although some of the more famous people on Twitter were posting laser-eyed profile pictures.

🗽 Lastly, I know the American regulatory and economic landscape better than say that of Europe or China.

#### 2️⃣ What I Do (Work)

🏢 What I do for work shapes the upper and lower bounds of my knowledge of the industry I work in.

🧑‍💻 Having worked in tech for over 17 years has helped me understand how software companies build and sell products. This had a profound impact on my investment decisions. Learning that a software product can serve 10x more customers with about the same cost has shaped my thesis on investing.

🕵️‍♀️ I have learnt how to assess the quality of the products by various tech companies. And the caliber of the people that they hire. Also the relative importance of a company's product in the tech industry. All these learnings compound over time.

🙋‍♂️ Influenced from these learnings, our personal portfolio now mostly consists of growth tech stocks.

#### 3️⃣ What I Love (to spend time on)

📚 What I read and learn outside of work is driven by what I'm passionate about.

🔭 I am a science, tech & business nerd. Learning about technology cycles, business, leadership, mergers, macroeconomics, human behavior etc. has always fascinated me. I'm more likely to read The Economist or watch a science documentary than watch an episode of House of Cards or Game of Thrones. I quit each after one episode, because I found them boring!

🧩 I routinely sign up for beta/experimental tech products. When I go to any restaurant, I talk to the owner or manager about which technology they use and how happy they are. I do all this because I love to do it. It’s not a chore or work.

🪝 This helps me identify new technologies and products that are likely to grow fast over the next 5-10 years, which is my investing horizon.

#### Putting It All Together

I constantly look at the best ideas and companies from United States where I have lived for 20 years. These ideas and companies are informed by my knowledge of the tech industry that I have been part of the last 17 years. My own quest for more knowledge makes some of these companies and ideas stand out more than others. So, building my investment thesis & discovering my investing strengths took:

⚓ 20 years of investing in index funds, gradually moving from target date to low cost index funds.

📊 10 years of investing in individual stocks, ranging from 20x gains to 99% losses.

📚 Lots of reading & research about many different and disparate ideas and themes.

🙅 Ton of discipline, introspection & self-critique as well as fair share of mistakes.

📉 Oh, and about that investment with 99% loss? It was in a Greek shipping company. I knew nothing about shipping or Greece. So I called my friend who has worked as an engineer in the maritime industry and knows the industry really well. He told me to stay away from investing in this company as there was huge risk of fraud from such smaller companies, especially ones based in Greece. I conveniently ignored his advice, and promptly got an egg on my face, losing almost the entire mid 5-figure investment in two weeks!

📢 I'm sharing this to help you find your own investing strengths. One can possibly overcome a deficit in one of these areas through more research, but proxies go only so far. If your journey has been different and you haven't found your investing strengths, low cost index funds might be the best investment for you.

🚀 We are building [Xillion](https://www.xillionapp.com/) to help you find the best investment ideas by taking into account your investing strengths. No shortcuts. No tricks. No gimmicks. 🚀

❓ How did you discover your investing strengths? I would love to hear your story. Please share it in the comments on [LinkedIn](https://www.linkedin.com/company/xillion-app) or email us at hello@xillion[.]co

**🚂 Wishing everyone a speedy and safe journey to financial freedom! 🚂**

🚀🚀 Sign up today and get **ONE MONTH FREE** at **[Xillion](https://www.xillionapp.com/)** and accelerate your journey to #financialfreedom. 🚀🚀


How I Make Investment Decisions


**Author:** **[Thiru](https://www.xillionapp.com/about-us)**

**2022** was one of the worst years for the stock market, with **S&P 500 down by almost 15%** and the tech-heavy **Nasdaq down 27%** YTD.

##### **SPX YTD**

![SPX YTD](https://d391fpr6ao9qle.cloudfront.net/images/blog/spx-ytd-return.webp)

##### **NASDAQ YTD**

![NASDAQ YTD](https://d391fpr6ao9qle.cloudfront.net/images/blog/nasdaq-ytd-return.webp)

Most investors like ourselves would be afraid of this bear market and would refrain from investing in the stock market.

But what if you find out that there is a magic recipe that will protect you from huge losses and can still make you profits in this bear market? The magic recipe is none other than **Dollar Cost Averaging**.

Dollar Cost Averaging is a simple technique of investing a fixed amount at regular intervals. Then you don’t have to worry whether the market is up or down. You buy more when the market is down, and less when the market is up. In the end, it gets averaged out.

**In 2022, if you had invested $1,000 every month in an S&P 500 ETF like VOO on the last day of every month, you would have still made 0.1% profit when the entire market is down by 15%.**

Still not convinced? Here’s exactly how this would have played out this year:

![DCA Benefit](https://d391fpr6ao9qle.cloudfront.net/images/blog/dca-benefit.webp)

**Stay invested, and don't get carried away by the market sentiments. Time in the market is the key. Investing $1,000 in S&P 500 fund like VOO, SPY or FXAIX today is likely to become $17,000 in 30 years!**

Want to know where to invest your monthly savings? Look no further than: **[Xillion Invest](https://www.xillionapp.com/product/invest)**


The Magic Recipe to protect you against Bear Market


#### 📉 Lower stock price for a company means lower profits in future than previously assumed.

#### 🚩 Sharply falling bond price signals the company has a higher bankruptcy risk than previously assumed.

#### ⛈️ Since this is the first real recession for many of us, let’s dive into part of finance that helps identify risks in public companies.

**🕵️‍♀️ Let’s take two similar, yet different, companies as an example:**

📈 Square/Block (SQ) and Coinbase (COIN) saw dramatic share price increases during 2020 and 2021 as both companies benefited tremendously from Bitcoin/Cypto enthusiasm. Stock prices for both companies rose sharply based on the promise that they will make even more profits in the future. 🤑

🏦 Both companies also issued debt (called corporate bonds) to finance their operations. Banks, pension funds, and mutual funds buy these bonds to earn interest. These bonds are bought and sold in the secondary market, so their value changes over time based on economic conditions, prevailing interest rates, company’s financial prospects etc.

↘️ In 2022, the narrative for Crypto changed dramatically. Future profit expectations came down drastically. Since stock price is the sum of expected future profits, both companies’ stock prices dropped around 75%-85% this year, before recovering a bit.

🤯 But, when you look at the bond prices for both, they tell a vastly different story.

🔲 SQ’s bond prices have declined a little bit because of rising interest rates, but the decline is similar to that in Adobe, Apple, Disney etc. This means that the bond holders believe that there's a really small chance of SQ going bankrupt before the bonds mature. $100 SQ bond issued in 2021 is currently selling at $88.

💣 COIN’s bond prices, on the other hand, have crashed around 40% this year. Bond holders believe there's a decent chance of COIN not being able to pay its debt back or the interest. Last week, $100 COIN debt/bond was selling for around $57. Past bond price data suggests that the probability of COIN's bankruptcy is around 38%\*.

🏁 Bond prices are merely signaling that Square/Block has less downside risk from crypto meltdown, quite possibly because Square also has a strong payments business catering to SMBs, as well as other products that make money not related to crypto. Whereas Coinbase makes most of its money in crypto, which is on shaky grounds at this time.

🎯 If you are thinking of investing in a company's stock, also look at its bond prices to get a sense of potential downside risk.

💰 Stock price reflects potential upside in the future.

🔑 Bond price reflects potential downside in the future.

If you enjoyed reading this, please like, share and give us a follow.


Stock Price and Bond Price

### Save some income tax by tax loss harvesting before end of the year. In 10 minutes, learn how to save taxes on investment gains.

**What exactly is tax loss harvesting?**

🕵️‍♀️ Sell one investment for a loss to offset gains you have from other investments.

**How does it work?**

1️⃣ In your brokerage account, look for “realized gains” for the year to know how much gains you need/want to offset.

2️⃣ Say you sold some investments (stocks, index funds etc) earlier in the year that resulted in $20k profit/gains. These gains will be taxed at 15%-20% if you held the underlying investment for longer than one year (long term capital gains tax rate). If investments were held for less than one year, the short term gains are taxed at regular (higher) income tax rate. 📈

3️⃣ Let’s say you also have some S&P 500 (SPY) ETFs that are currently underwater. 📉

4️⃣ You can sell SPY to take the $20k loss, enough to offset gains.

5️⃣ Then buy a similar (but not the same) investment (say Nasdaq 100 QQQ ETF) with the money from the SPY sale.

6️⃣ Why QQQ? Because QQQ & SPY have 98% similarity in stock prices over the last five years. This means that you can reduce your tax liability today without giving up the potential gains in the future.

7️⃣ You can apply the same principle to highly correlated stocks or between some stocks and ETFs:

Mastercard (MA) <> Visa (V) - 99% correlation

Square/Block (SQ) <> Ark Invest ETF (ARKK) - 97% correlation

Meta (META) <> Snap (SNAP) - 90% correlation

United Airlines (UAL) <> American Airlines (AAL) - 75% correlation

🙅**Wash Sale** 🙅:

Important to note that if you buy SPY within 30 calendar days of selling SPY for a loss, then this loss will be ineligible to offset profits. Say you sell SNAP on Nov 25th, 2022 for $10k loss. If you bought even a single share of SNAP between Oct 25th and Dec 25th, your sale will be considered a “wash sale” and you will not be able to offset any profits with it. Buying a similar, but not the same, investment is the key to getting this tax advantage to work for you. Wash sale rule applies across accounts: if you sell SNAP in the brokerage account and buy it in the 401k account within 30 days, the loss would be a wash sale.

🤑 This is only applicable to regular brokerage accounts. Any losses or gains in 401k, roth 401k, IRA etc accounts do not have tax implications when you buy or sell any investments.

**DISCLAIMER**: For more on IRS allowances for capital gains and capital losses, please see the IRS website or consult your personal tax advisor.

What is Tax Loss Harvesting?


In this open enrollment season, make sure you maximize your HSA or FSA contributions to get tax benefits. If you’re eligible for both, HSA is a better choice. Some details:

**🎯 HSA 🎯**

1️⃣ $3,850/person or $7,750/family tax-exempt max contribution in 2023 that can be used for medical, dental, and vision.

2️⃣ Always put the maximum amount in HSA because it can be used in the future.

3️⃣ Unused money can accumulate & grow tax-free over time.

4️⃣ Money can be invested in the market for long-term growth.

**☔ FSA ☔**

1️⃣ Tax-exempt $3,050 max contribution in 2023 that can be used for medical, dental, and vision.

2️⃣ Rule of thumb is to put enough money to cover 50% of the total healthcare deductible for the family PLUS all out-of-pocket dental and vision expenses.

3️⃣ Spend all the money in 2023 or lose it. Also, spend all the money if you leave your job.

4️⃣ Visit fsastore[.]com at year-end to use unused funds for a variety of commonly used items.


FSA and HSA


## Open a brokerage account within 401k to buy low cost ETFs. Here’s how: 🥷

**🔑 Why use Brokerage Link?**

All employers limit the number and type of funds that are available in your 401k plan. Most of these plans are higher cost, and often lower performing as well, as compared to other funds available via BrokerageLink. You can also buy individual stocks in this account with your retirement funds, if you choose to do so.

**Here are the steps:**

1️⃣ If your employer uses Fidelity as the 401k or 403b provider, you can expand the investment options for your retirement funds greatly by opening a BrokerageLink account within your 401k or 403b plan.

2️⃣ The most straightforward way is to call Fidelity and request it via phone.

3️⃣ Once the account is set up, you can sell some of the high cost funds in your 401k and move that money to BrokerageLink.

4️⃣ Buy low cost funds (FXAIX etc) in this account. You can also buy low cost ETFs such as SPY, VOO.

5️⃣ If you have been thinking of buying a stock, but didn’t have the money, well, now you do. You can buy individual stocks in the BrokerageLink account as well.

6️⃣ To get more ideas on what funds or stocks to buy, check out [Xillion Invest](https://my.xillionapp.com/product/invest)

**🙋‍♂️ What’s the catch?**

👩‍💻 You will have to keep an eye on this account and balance it from time to time. You might also have to move money from regular 401k to this account periodically.

📣 If you found this useful, please like and share so your friends can also benefit from this.


How to open a brokerage account within 401k to buy low cost ETFs?


#### 🛑 Biggest lesson from the crypto meltdown: if anyone promises greater than 10% returns & says nothing about tradeoffs involved, JUST SAY NO.⛔

Let’s dig in:

**Investing is a tradeoff between four main things:**

1️⃣ Returns: Money you can make by investing in any asset. Generally represented in % terms. Higher is better.

2️⃣ Risk: Probability of losing your entire investment. Lower is better.

3️⃣ Volatility: How do these returns change over time, from one extreme to another? Lower is better.

4️⃣ Liquidity: How quickly can I sell this investment to get cash? Higher is better.

**High returns generally mean:**

📉 Higher risk of your investment going all the way to zero.

🌀 Higher probability of investment value changing wildly over the medium term.

💰 Lower probability of converting this investment into cash in a short amount of time.

Venture capital (or angel investing) has been the best investment category over the last two decades, but you can’t take your money out for up to 10 years! And most investments go to zero, but very very few become 100x or 1000x. That’s why venture funds make a large number of investments.

**On the other hand, most crypto influencers put aside these trade-offs. Instead, they:**

🤩 put laser-eyed profile pictures on social media

🤦‍♂️ chided non-believers with “have fun staying poor”

🙊 urged us to buy digital monkey pictures, calling them NFTs

🤯 came up with obscure terms like web3, DeFi

💯 Grifters will be back with yet another scheme with an even fancier name as soon as the dust settles from the current crypto mayhem. But now you know how to snuff out such frauds! Don’t you?

🎯📑Create an account with Xillion if you would like to see how your money will grow when invested in different types of investments, with tradeoffs.


Biggest lesson from the crypto meltdown

Investing made simple: your guide to a $10,000 ETF portfolio 💰
<img src="https://d391fpr6ao9qle.cloudfront.net/images/blog/how-to-invest-$10000.webp" alt="How to invest $10,000?">
Checkout <a href="https://my.xillionapp.com/product/invest">XillionApp</a>

How to invest $10,000?

Posted on March 24, 2023 . 1 min read