You work hard for your money . . . work just as hard to keep it!
Own your financial future
Gene Natali, CFA
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
The cost of a car is bigger than your monthly payment.
(1) Fuel
(2) Insurance
(3) Maintenance
(4) And more . . .
These “costs of owning a car” can add up, especially if they go unrecognized at the time of purchase. Don’t be an unaware consumer on a purchase this large and this important
Did you know?
According to the Federal Reserve Bank of New York, Auto loans are the 3rd largest type of Household debt in the United States. On March 31, 2023, outstanding auto loan debt stood at $1.56 Trillion.
Home loans were the largest ($12.38 Trillion) with student loans second ($1.60 Trillion).
Pro Tip for students:
Understand the “opportunity cost” of your first car purchase. For those hearing that term for the first time, opportunity cost is what you give up
If you have not read The Missing Second Semester, Chapter 5 of the book shares a powerful example, of an 18-year old who knowingly purchases a $10,000 car in lieu of a $13,000 car (that he or she could have afforded) and chooses to invest the monthly difference in her of his Roth IRA. Hint, the “opportunity cost” is BIG!
Find out for yourself how big the $$$ difference is, with Bankrate.com’s Compound Interest Calculator. Hint, the monthly difference of $56 was hypothetically invested in the S&P 500, a 5-year auto loan was used and the student’s Roth IRA grew for 42 years.
Our financial choices have consequences. Positive choices like the one above, can be life changing.
Own your financial future.
Gene Natali
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
Bite sized personal finance videos, with a single “financial action” step
The Missing Semester is an award-winning personal finance book written by Troutwood CEO, Gene Natali.
High school and college classrooms across the United States have used The Missing Semester as part of their financial literacy curriculum since the book was published in 2013. Many of these same educators and their students have been instrumental in the building of the Troutwood App, for which we are grateful!
“I have had the privilege of speaking with and learning from educators and students across the United States.”
“We want to meet individuals where they are most comfortable learning. To do so, financial literacy education must be presented across different mediums and different platforms.”
– Jeff Davidek, Chief Strategist Troutwood
With the release of this micro video series, Troutwood has provided another tool to increase your financial knowledge.
It takes discipline and saving a few bucks each day.
Compound interest is an unbelievable concept.
You have to see it, to believe it! Troutwood’s stock market calculator is one place, to “see it.”
Once you understand compound interest, your financial goal(s) becomes not just believable, but achievable, and you have taken an important towards financial independence.
Make this 👇 fact, YOUR financial reality.
Consistently invest, in a diversified long-term portfolio, beginning at an early age. Make it automatic, like brushing your teeth!
“I want to open a Roth IRA, but I keep been hearing about a potential recession and was wondering if I’ll just lose all my money?”
A student of mine at the University of Pittsburgh asked this 👆 question. It’s a valid fear, and one I hear frequently, across different audiences.
Which makes the first step, the most difficult.
There is a great deal of media, social, and mainstream finance and investing content, that emphasizes:
Timing the stock market
Picking “the right” individual stocks
The next recession
Get rich quick schemes.
Forming a long-term investing perspective will help you avoid financial traps and stay on track with your financial plan.
Tune out the noise.
Own the companies that comprise the “stock market” – all of them – for a long time.
The cumulative returns of the stock market as measured by the S&P 500 from 1950 – 2022 is 228,508.39%. That’s a BIG number, that includes EVERY recession over that 72-year period.
I don’t know what’s going to happen, next week, next month or next year. I do have a great deal of confidence in long term investing.
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
Set goals that are realistic, repeatable and achievable
By mid-January, how many New Year’s resolutions have been pushed aside as “unachievable?” As you navigate your financial journey, consider these three financial resolutions as guideposts to help you enter 2024 even stronger.
Set and implement a “savings goal”
Investing and Time are a powerful combination.
– The Missing Second Semester
The more you invest, and the longer you do it for, the happier you are likely to be with the outcome.
Not sure where to start? You aren’t alone! The MOST common question we receive from Troutwood App beta testers is: “How do I set a goal?” A proprietary adequacy measure helps answer this question.
Pay off variable rate debt
Interest rates have risen sharply over the past year. This has had an outsized impact on borrowers with variable rate, or floating debt. If that’s you, your monthly borrowing costs have likely increased – in some cases meaningfully.
When interest rates rise, the amount you owe on variable rate debt also rises.
Places you might see variable rate debt include:
(a) Private student loans, which can have fixed or variable interest rates.
(b) Mortgages can have fixed or variable interest rates. In the case of home loans, a variable rate loan is called an “adjustable rate mortgage, or ARM.
(c) Outstanding credit card debt generally sees APR increases when interest rates rise. Because this increase comes on top of already VERY high interest rates, the impact can be especially painful.
Create your first financial plan
Increase the odds of successfully implementing resolutions #1 and #2 with a financial plan that outlines the small steps necessary to achieve the big ones.
You can do it!
Own your financial future
Gene Natali
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
Disclosure: All investments have the potential for loss. Past performance is no guarantee of future results.
DISCLAIMER: The information presented on or through this blog is made available solely for general information purposes. We do not warrant the accuracy, completeness, or usefulness of this information. Any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to the video, or by anyone who may be informed of any of its contents.
I recently had the opportunity to spend 30 minutes talking one on one with 25 college seniors, all of whom had student loans. The students I met with were sincere in wanting to learn, honest about how they got here and uncertain where to begin.
What were the lessons?
(1) The size of the loan did not correlate to level of fear. Students with lower loan balances had the same level of fear as students with much higher balances.
(2) Student loans were the TOP money concern.
(3) There was very little understanding of “variable interest rates,” yet most had variable rate debt.
Where do I start if I have student loans?
It was surprising how many of the students I met with did not know their total loan amount, interest rate or where to go to find this information. This is important data to have. Knowing what you owe, helps you build a plan to repay it.
Step 1 = Keep your student loan information organized in a safe place.
It is difficult to optimize a plan for student loan repayment, if you don’t have or know all of the pieces. Troutwood has built a “debt rank” feature that helps to solve this issue.
What are variable interest rates?
Federal student loans have fixed rates that DO NOT change over the life of your loan. Private student loans can be fixed rate or variable rate. Variable rates DO change over the life of your loan.
When broader interest rates rise, the interest rate on your variable rate student loan also rises.
The same if of course true when interest rates drop. Interest rates have risen sharply over the past year, and I don’t believe many students were aware of the impact this would have on their monthly payment.
What if I’m still in High School, how much can I borrow?
This is an important, but personal question, and the answer differs for each of us.
The more important question to ask is how much should I borrow?
The last 10-years have taught us that while different degrees and occupations equate to different income potential, student loans are treated equally.
Debt is a legal obligation and must be taken seriously. Tools like the Federal Student Aid Loan Simulator exist to help you make informed decisions around student loans. Take time to understand both the opportunity and the impact.
Own your financial future!
Gene Natali
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
When it comes to knowing how much the cost of Thanksgiving dinner is going to increase this year, lets’ go straight to the experts, our friends at the American Farm Bureau Federation.
These are the folks responsible for growing and raising much of what we eat, and for 37 years they’ve been putting out a survey sharing the cost of a Thanksgiving dinner.
To any farmers reading this post,
thank you, for your hard work!
Because of you, we can raise a fork and enjoy time with family and friends this Thanksgiving.
This years Farm Bureau survey provides insight, information and charts helping us better understand and plan for our Thanksgiving feast. According to the Farm Bureau Survey linked above, the cost of a Thanksgiving dinner is up 20% from 2021.
But, what does that 20% increase in “cost,” translate to in terms of actual dollars spent? See below:
On a per person basis, that $64.05 rounds to $6.41 per guest.
The Farm Bureau survey also breaks down the per item cost of our favorite menu items. No surprise, the big cost is the Turkey. At $28.96 it’s the largest expense listed below.
Have you seen headlines this year talking about inflation?
Inflation is the increase in price of the things we buy and sell. The price of a Thanksgiving turkey, has risen 21% since this time last year. That’s an example of inflation. Over time, prices tend to go up.
Understanding inflation, and that you are likely to experience it, will help you plan and prepare for your financial future.
As we approach the Holiday Season, lest we not lose sight that the best part of any Holiday is spending time with family and friends. At Troutwood we define wealth, as having enough money to spend time with people you love, in places you enjoy.
Wishing you a happy and healthy Thanksgiving holiday.
Own your financial future
Gene Natali
Gene is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College.
Home loans, the largest type of US household debt, are equal to 72.6% of total personal debt (Federal Reserve Bank of New York).
Recent headlines point to the sharp increase in interest rates and the expected impact on both home buyer and sellers. Not surprisingly, housing sales have slowed in recent months.
The simple fact is that higher interest rates make homes less affordable.
Let’s look at the example of a 30-year mortgage on a $250,000 home loan.
With a 3% mortgage rate home buyer spends $1,054/month.
With a 7% mortgage rate home buyer spends $1,663/month.
For the same home! That’s a 63% increase in mortgage payment on the same $250,000 loan.
So what happens next?
Below are two perspectives on mortgage rates. A 30-year fixed rate mortgage is 7.24% on the day of this posting according to bankrate.com.
Perspective #1: Mortgage rates have risen sharply over the past year
Perspective #2: Mortgage rates have dropped sharply over the past 30-years
In the case of this example, BOTH perspectives are correct.
Perspective #2, clearly shows that recent history, a time period that saw the interest rate on a 30-year fixed rate mortgage drop below 3%, appears to be an anomaly.
Perspective #1 clearly shows a sharp increase from those historical low mortgage rates.
What will this mean for future home prices and interest rates? We’ll learn what happens next together, but some things won’t change.
The true cost of your home is far more than your mortgage.
Insurance, utilities, appliances, home repairs and unexpected events are all home expenses to plan for. Regardless of what direction mortgage rates and home prices trend, the most important thing to remember when buying a home is:
“If you can’t afford it, you can’t afford it.”
The Missing Semester
While your mortgage reflects the price you paid to purchase the house, the true cost of a home is far bigger than the mortgage payment.
Own your financial future!
Troutwood
Gene Natali
Gene Natali is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College. He, his wife, four children and chocolate lab, live in Pittsburgh, Pennsylvania.
According to the International Monetary Fund, any given economy is in a state of recession 10-12% of the time. Consider that within the context of 195 countries, each with its own economy. Recessions aren’t rare! What is rare, is knowing in advance, when one occurs.
What is a recession? The formal definition is two consecutive quarters of negative real Gross Domestic Product (GDP). But, when its raining, you don’t need someone to tell you “it’s raining”, just look out your window. A parallel can be drawn. The formal definition of a recession may not apply to your personal situation or the industry within which you are working.
What does the frequency of recessions mean for you? It’s not a matter of “if,” but “when” the next recession will occur. Knowledge allows you to make informed decisions, and recognizing this reality is an important first step towards preparing for it.
The BBC released an October 14, 2022 article, “Why Gen Z are right to be worried about money.” YES, there is much to be concerned about at the moment. Inflation, rising interest rates, an uncertain job market, financial insecurity and global conflict. Adversity comes in different, shapes, sizes and colors – but in some form, it is a constant companion on our life and our financial journey. Worrying is ok, doing nothing about it, is not.
In the face of adversity, we are measured by how we respond.
Let’s look at 4-steps you can take today.
Build an emergency fund: Understand your essential costs, and begin to build an emergency fund that will cover 3, 6, then 9 months of living expenses. Don’t panic if you don’t have one. Big gains in your financial well-being don’t occur with a single step. They occur through the successful completion of many small steps. Take that first step, no matter how small.
Build your human capital: Make yourself less likely to get fired and more hirable in the event that you do. In a recession companies may lay off employees as sales slow and revenue drops. Take steps today, to maximize the likelihood of keeping your job when the economic environment does worsen. Examples include on the job training, pursuing professional certifications or higher education. In the event that you do experience the loss of your job, this step will still be of BIG value. Why? Because , no one can take away YOUR human capital. You are more qualified for that next job which you are now pursuing.
Build a financial plan: When something you want to own for a long time goes on sale – in the case of a recession, the stock market, the prudent thing is often to buy more. This is easier said than done when in the midst of difficult circumstances. Build a plan that recognizes recessions as a reality and write down what you will do when one occurs. For example, “I will cancel these three subscriptions and use that money to continue contributing to my Roth IRA.” This IS NOT the time to invest a little bit less to “try and time the bottom.” It IS the time to buy a little bit more each contribution period.
Get ahead and stay ahead: This financial approach isn’t talked about as often as it should be. Use good times or good fortune to get ahead financially. For example, record homes sales created a boom for realtors. Rising interest rates have made homes more expensive and now reversed that reality.
To stay ahead in bad times, you’ve got to get ahead in good times.
Own your financial future.
About the Author
Gene Natali
Gene Natali is Co-founder and CEO of Troutwood, a software company founded out of the Carnegie Mellon University Swartz Center. He is a Chartered Financial Analyst, board member of CFA Society Pittsburgh, Executive in Residence at the Black School of Business|Penn State Behrend and a part-time lecturer at the University of Pittsburgh, where he has taught Personal Finance since 2015.
Prior to founding Troutwood, Gene spent 17-years personally working with some of the largest and most sophisticated institutional investors and retirement plans in America. He is an award-winning author (The Missing Semester), has spoken in over 1000 unique high school and college classrooms, and regularly keynotes investment and education conferences across the country.
Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor’s degree with a concentration in economics from Allegheny College. He, his wife, four children and chocolate lab, live in Pittsburgh, Pennsylvania.
Budgets are boring, right? But if you want to own your financial future, a budget is an important piece.
“You need to let the little things that would ordinarily bore you suddenly thrill you.”
– Andy Warhol
Andy Warhol bridge in Downtown Pittsburgh, Pennsylvania
Don’t be intimidated by the finance lingo. A budget is a plan for saving and spending money, and it doesn’t need to be overly complex for it to work…
A simple budget shows your income and your expenses. The BIG goal is for your expenses to be less than your income. Wondering how to get started on this easy 3-step budget? Keep on reading!
1. Save First: The most important step in any budget is to identify your savings goal. Make this the first line item in your budget and stick to it! Individuals have more responsibility for their financial future than at any point in the past 100-years. Accept that responsibility and meet your saving goal EVERY month.
2. Needs: Identify and list the things you can’t live without, literally. These are life’s essentials. The Troutwood App helps you better understand what these costs are in different cities.
3. Wants: These are nice to have, but planning and budgeting for them can help turn your dreams into reality.
It can be that easy! Start simple, then build from there.
Stayed tuned for more tips on how to implement & evaluate your budget. In the meantime, the first step is building it.
