The Short Term Inverse Relationship Between Rates and Bonds

After over a decade of not only lowering of rates, but SUPER low, interest rates, it is no wonder we have forgotten the short term relationship of bonds and interest rates.

Inverse Buddies

Over the short term, when rates are going down bonds go up and just the opposite as rates are increased. Pair that with extremely low – zero – rates and the gradual increase in rates, which causes a natural headwind has caught many by surprise, especially after over a decade of lowered and low rates.

bond index V Interest Rates

Ok, so it is a little busy – but it directly shows our point – as rates go down, bonds go up and then as rates go up bonds down. This is a short term phenomenon as once rates stabilize, bonds do as well.

We are happily welcoming higher rates as we think they are much needed – even though they present headwinds for a much needed safe asset class, Bonds – in the SHORT term!

Have a Great “Rate Bond Buddy” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Why we like High Deductibles!

As we worked on our PLUP – Personal Liability Umbrella Policy Newsletter and Blog Post, we repeatedly ran across reasons to discuss our fondness to the Higher Deductible options on almost everything.

This article has also spawned a related article, about Emergency funds – neat chain of events articles!

Consider the High Deductible Option – On Most Everything

Health Insurance, Auto Insurance and Homeowners are the main types of ongoing insurance that allows you more control in your cost via the deductible.

The Auto Insurance Examplecrash-test-1620591__480

One of the easiest examples is the good old automobile insurance. We like high deductibles of near one thousand dollars due to the tremendous longer term premium savings that will occur over time. We certainly acknowledge that changing your coverage deductible to a higher amount today and having an accident tomorrow is bad luck and will throw you into the hole, but over time, if you are not a repeat offender, your saved premiums will more than pay for the higher deductible.

Health Insurance Example

Let’s face it, the insurance industry wants us as consumers to take more control over our medical expenses. Rather than run, embrace this coming inevitable change, and review higher deductible health insurance plans. Similar to the Auto example, if you opt for a higher deductible plan and something happens in the very short term, you will be in the hole on this decision, however time is your friend.  Having your health coverage pay for that visit to the Dr. for a cold is nice, and may make you feel good after you leave the office, however if you dig deeper, it is likely you may be paying dearly for the “free” visit.

Homeowners Insurance Deductible

Yep, there is a higher deductible option for your homeowners policy as well. This option is usually in the form of a percent of the dwelling. Be careful when reviewing these options as our experience has shown premiums and out of pocket costs can vary greatly depending on the geographic area of your dwelling and a higher percentage deductible can get out of hand if you are not careful on a higher priced dwelling. Bottom line, the homeowners policy has more moving parts due to the differences in coverages, geographic area, dwelling itself and your claim history. Take extra time in adjusting this deductible, but once you get clear on all costs, obligations and options, it’s likely you will find savings in this as well.

Have a Great “High Deductible Savings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Mother Nature FLEXES her Muscles – High Deductible Pre-View – Friday

With a crew that absolutely loves the outdoors – beach, mountain, desert … heck they might even like a rainforest (never been with the whole gang.) Mother Nature has an influence on our lives.

Mother Nature FlexesHurricane -tropical-cyclone-63124__480

We wish the best for those in the mighty Mother’s path. With the most visible storm making landfall to our friends on the mid eastern coast line, and one of our far west states/islands are also dealing with her muscle flexing….

Safe wishes to all!

High Deductible Preview

Next week we continue our found series (PLUP, Emergency Fund-) with the last depending part, the High Deductible. Thanks for all the responses, we have greatly enjoyed sharing and will have full versions in the coming Q4 Newsletter.

Of course it’s a Tennis weekend, but long time followers will be surprised to know this weekend unusually includes little Brother in a Sunday match while older sister watches and gives important advice…..

Today is a Friday, enjoy your day and the weekend .. be safe and talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Inverted Yield Curve Fancy Chart – After Seven Notices by Us!

We are happy to humbly state when someone comes out with a really cool chart – in this case, it out does our charts/comments seen here, here , here, here. here, here and here – all good – We were there much earlier – theirs is pretty, much prettier, slight worry about so many all talking about it – discussion for another time …

Check this out!

explaining-yield-curve

Have a Great “Inverted Yield Curve” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

The Emergency Fund – Size, Location, Reason, Need

It is so simple of a concept, but one that is easy to fail. The general rule is to keep 3-6 months living expenses, somewhere available, for safety. Those early in their careers with less dependents and less overhead will find this very manageable. Those of us with a few chips in our armor from big recessions, life’s curve balls, and experience, may want this number to be higher. Whatever level makes “You Sleep Better” within reason of course, is likely a good level.

Reasons for a Higher LevelEmergendy - helicopter-615168__480

  • Possible Job Change – Need to be higher on emergency funds
  • New Family Member- Higher is better
  • New Home – Expect unforeseen expenses – they always occur (Has anyone ever built or bought a home in less time and for less money than they thought? Nope, it’s in our nature)
  • Salary Fluctuations i.e. Commissions – Error on the higher side of that emergency fund
  • Others dependent on you – Business owner, large family, solo income earners, college or wedding – A bit higher is better

Stability Reasons for a Normal/Lower Level

  • Dual Similar Incomes – Lower Emergency fund is ok
  • Very stable Job – Smaller side of the living expenses will work

Where to Invest ? Safety first

A long time friend always commented on the Mason Jar, full of money, buried in his back yard (an old depression era tale) – all kidding aside, your emergency fund should be bullet proof safe. While that has been hard over last decade, not earning much interest, now finally we can get a few percentage points on our Emergency Fund, but that is only to keep it from being lazy, it is not an investment and should not be put at risk by stretching for a return. No risking, it needs to be there when the sky is falling.

Big Benefits

The most obvious benefit to having a health Emergency fund is less stress. Financial issues are well known to be a couples top stresser and frequently relief is felt as the healthy emergency fund is completed, when no pressure was ever felt in the first place.

Have a Great “Healthy Level” Emergency fund day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

12 Ways to Get Smarter – Another Cool Chart worth taking a moment to review

Being very graphic centered and comprehending folks, our hearts are always very soft for an easy to read chart, especially when it has great information.

Check this out – What could be better than 12 reminders on how to get smarter?

12 Ways To Get Smarter – Visual Capitalist and World Economic Forum

This from two of our favorite resources, Visual Capitalist and World Economic Forum, both places we love to get information and data!

Take a Moment and Review – Good Stuff

Have a Great “Get Smarter” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Anniversary Payback Travels – Jen’s Baptism By Fire – Writers block confession, Lot’s of Neat Posts Coming

Long timer followers know we had a crazy Summer with the 13 year old’s tennis schedule…

As such, the Mrs. totally missed any real vacation over the summer together — Even the anniversary came and went without even a dinner or card — yikes – (18th!)tennis-2042723__340

Pay Back Anniversary Travels

Today and the next two days I will be out of the office/state and attempting to be loosely tethered via technology for Anniversary payback time!

Yes it is Jen’s second day as official pilot – but she has piloted much bigger planes before (more on this soon) – you are in good hands as Donald the Brain is still far from “Table for Five too!

Writers Block Confession

In full fess up mode, there are times when it is hard to write (not usually, but it happens) with nearing 2000 posts and counting, we are happy to give you a heads up — No writers block now!

WE HAVE TONS to talk about soon!

The PLUP article spurned two more articles that we think you will really like-

PLUP graphPlus we have had great ideas coming from you guys in the field– keep them coming, we love discussing hot repeating topics!

Ok … so an Anniversary Travel announcement turned into an exciting preview of coming great topics — We really like what we do – All good, all fun!

Have a Great Day and talk to you next week !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents