Category Archives: Education

Really Good News about Higher Interest Rates, Huh? Pension Plans are Funded… Likely No More Lump Sum Offers… Finally Ok to Talk about, Copyright Approved …

We ran across terrific information from Milliman– the bulk of our analysis comes from the following fantastic White Paper:

2023 Corporate Pension Funding Study

By Zorast WadiaAlan Perry, and Richard J. Bottelli Jr.

With Copyright approval just this Monday – we can finally bring this great information to you- yay

While it may seem like we talk about interest rates and their effects constantly,  there are very few things especially in the shorter term that effect an economy more and therefore economic growth and capital markets.

Good News for Pension Plan Owners and Recipients

In this higher interest rate environment, we have some really good news for not only pension plan recipients but the owners of pension plans as well. Higher interest rates help pension plan funding (see periodic table looking chart for the top 100 pension plans), in the forum of what’s called smaller present value obligations (PBO). While we understand the calculus of this equation it’s far too difficult to explain in this context but from a very high level, higher interest rates the effect of computation of PBO and the higher the rates, the lower the funding amount needed.

Said another way, pension plans generally hold large amounts of bonds and bonds are earning more now.

By taking a look at figure 3 from the fantastic white paper of Milliman, it’s easy to see that in 2007 the slashing of interest rates to levels never seen before caused a dramatic loss in pension plan funding. Not only did this funding drop but again by referencing the chart it’s easy to see that this was almost a 1 1/2 decade hurdle that pension plans fought against to regain their funding level.

Fast forward to today, again our Chart 3 favorite, shows pension plans are making a strong comeback in their obligations and with interest rates higher look to be fantastically and happily funded. This should be comforting to corporate pension plans (again looking to our periodic chart for those) that likely are breathing easier, and this should also be comforting from those pension plan recipients that maybe had concerns on the long term funding ability of their plan.

Given the full funding of Pension plans, we would infer the lump sum window may be closed! Those lucky enough to have offers over the last decade and a half, well done!

Have a Great “Funded Positive Interest Rates Pensions” 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

What Powers “Electricity” Across the Globe? Coal! Yep Coal ….Wow …. From our Buddies at Visual Capitalist

At first glance, the word Electricity was not completely noted…. Hence when the graphic was viewed a jaw drop was in order…. Coal??

So it is “Electricity” Power, from our buds at Visual Capitalist

Surprisingly, Coal is still a dominant force in the power of Electricity!

Have a Great “Electrical Power” 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 Fun Part of Happy Enthusiasm …. Friday

On Wednesday of this week, an entrance into the office garnered Jen’s computer running a virtual visit along with Q&A’s on the Merger….with her taking notes on important updates and points..

Donald “The Brain” had just gotten off of a research call and was crossing the Teams Chat with a couple of updates and thoughts…

Early that morning on the way out to start a jog, a neighbor, fellow advisor and long time friend pulled up in his vehicle…. We both had to lower our volumes, he was listening to a financial podcast and I had one going via my cell on my Air Pods….

It is fun, lucky and very gratifying to have such enthusiasm and great experiences with what we are lucky enough to call “Work!” But that is not really the correct description….

Of course, it is not all puppy dogs and rainbows, but is most of the time! Thanks to you guys….

Today is a Friday …. Enjoy your day and your weekend…. Talk 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

MGM Resorts Hit by Cyber – Timely Newsletter Reference….

With the final editing of the Q 4 2023 Newsletter in process… an article included in is Cyber Security from a half day seminar late spring….

From the Newsletter Article..

If there’s one thing, for those of us with little time or patients for a long read that we would like you to take from this article it is that most cyber intrusions come from an e-mail that has a bad actor with a hot link click, do not click on that bad hot link!

The second thing and more encouraging, most cyber security situations are not extremely complicated and are allowed by a simple letting of our guards down- see above point!

It Happens to the Best of them – MGM Resorts

Monday morning, during a regular research call, it was noted MGM had been taken down via a hacker… maybe a bad loser… but who knows…

This from the site early am Monday… for all of MGM at the time…

Oh my…just checked it again… YIKES!

Snapshot taken 9-12-23 at 8:44 PM

Cannot imagine the lost revenue from this hack… WOW!

Quick Google for more information — From – This Las Vegas Journal

On Tuesday, some point-of-sale locations couldn’t process credit card transactions at MGM’s retail outlets, and in-resort ATMs were offline. Some guests complained that they couldn’t get into their hotel rooms because the MGM app was off. The company has since remedied that problem by issuing key cards. MGM’s websites and mobile app remained down on Tuesday.

Have a Great “Cyber Security Aware” 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

From Our Friend Peter Diamandis – “The People Environment and Media that Shape Our Mindsets”

Literally during the weekend of Newsletter writing/dictating/thinking… our friend Peter Diamandis nice blog hit our in box during a break from the writings….

We are really big fans as long time follower may know, these first two writings were done in 2015 after seeing Peter at a convention, prior to reading several of his books see our writings: HERE (2015), HERE(2015), HERE, HERE, HERE, HERE, and finally HERE

From his blog as follows:

THE PEOPLE, ENVIRONMENT & MEDIA THAT SHAPE YOUR MINDSET

Here are the high points from the blog, but the above title is hot linked to the post…

1. Who You Hang Out With… Your Community

Have you heard the saying that you’re the average of the 5 people with whom you spend the most time? 

Curating your social group, who you’re hanging out with and who you’re having conversations with is critical. It’s one of the most important investments you can make in training an optimistic and Abundance Mindset—it shapes who you are and who you’ll become.

2. Your Physical Environment

The second key element that you can control as you develop your Abundance Mindset is your surroundings—everything from the music (harping on the 15 year old on this one) you listen to and the brightness of you room, to what you hang on your walls.

3. What You Watch & Read

Let’s now turn to the third element under your control—what you watch on TV or read in the newspapers.

Our version of this, is Breaking News… but you guys get the point….

Thanks Peter for a great rest from a lot of authorship this weekend!

Have a Great “Refreshed by Peter” 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

August 2023 Audio Video Review – The Brain Tests the Systems- Social Security Statement/Web View Reminder – Four Downgrades Reviewed – Financial Planning and Capital Market Review – By John Kvale CFA, CFP

Hello and Welcome to our August Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

BREAK IN: Donald the Brain WILL BE reviewing the Schwab TDA Merger information only one of 32k folks to be asked!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

August 2023 Video


YouTube

Financial Planning Tip(s)

Check that Social Security Statement no Matter your age

While a late delivery, we managed to remind all (including ourselves) why we need to review annually our Social Security statement, here in this post…. along with some new features from the SSA (Social Security Administration) in their updated website!

From the post:

Confirm your credits via your Earning History

Confirm you received credits for your hard earned money is very important, and easy…. here is what the screen shot look like – Below- oh, there are new drop downs for excellent help if your credits are not showing

Capital Market Comments

Not one, not two, not three …. but FOUR Downgrades with one called by ourselves – Tap Tap on the back

In this first post we commented that Fitch put a shot across the bow of the USA Credit Boat with a mild downgrade from AAA to AA+

Not to be outdone, another of the big three credit agencies, Moody’s chimed in as we discussed here

Then back into the pool goes Fitch with ANOTHER downgrade…. here we discussed Fitch’s second downgrade and mentioned we were surprised the One of the Big Three were silent….

BOOM that night of our above post, the other big three S&P Global Markets came to the party…. as we discussed here along with a timely fun YTD Bankruptcy Graph from our bud at Visual Capitalist

These downgrades among a couple of other items, not surprising, led to an upward push on rates… highlights to the far right…. already headed back to norms!

Have a Great Day, Talk to You at the End of September !

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

A Video Game Review – Learning the World and Country Economics – Rise of Nations

If you have a teenager (or even younger/older in the house)…. Well, you may not like the amount of time on games…

The realism is astonishing, especially coming from an original Pong (showing age here) and then thinking Galaga was cool….

In true Lemon Aid from Lemons format…. there is one game that is not violent, creates a terrific learning experience, involves world economics, has taught the 15 year old every country flag (brags occasionally), but does take some time, like most games.

A Condoned World Economic Game – Rise of Nations

If your teen or other locks into Rise of Nations… take a few to watch from over the shoulder…. While not a big fan of the time loss, it is a love hate thing….it has a lot of real education….

Using our small sample size, again the 15 year old has challenged on a few country economics, and natural resources… an approval of this game is allowed…. Rise of Nations!

Have a Great “Economic Learning Game Allowed” 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

Preview of a Big End of Summer Weekend … Donald “The Brain” At it again, Possible Helper in the Merger … Second to Last Unofficial Friday before Summer’s End …

Next weekend is a biggie….

Labor Day Weekend…

TDA/Schwab Merger …

Oldest Kiddo Leaves for College…likely some tears, but again all part of the process…

Did We Tell You Donald The Brain is at it Again?

Long time followers know that Donald has been an integral part of some of the very sophisticated software used by us, our Platform Vendor (TDAmeritrade – soon to be Schwab) and many fellow professionals ….

While he may be giving up some of his well earned weekend – Sunday over labor day – it is an honor and a privilege and somewhat comforting to know he may be one of the very few, if not only actual advisor running his specialty knowledge of the afore mentioned software to make sure it is working for all of the new larger Schwab !

Nice to be asked- With three little ones (getting bigger by the day) we appreciate his possible weekend sacrifice, as many who likely have no idea, are likely to benefit…. Good Carma – stuff here!!

Ahhhh…but that is all next weekend…

Today is a One Last Friday BEFORE the last Friday of unofficial Summer…. Enjoy and spend time with those special… it goes fast!

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 really like YouTube and How We use it!

In no way are we compensated by YouTube…. but we sure do use it… even as Financial Planning Nerds…with some personal examples here too!

Why we love YouTube and How we use it!

Our Channel

As a regular video poster here at our blog on Street-cents.com – we have a YouTube Channel where we post all of our videos- for the record we do not embed them in our posts due to the advertisements that occur after the video is watched….

Subscriptions

What we really like about YouTube is the ability to subscribe to various channels…. Yes, mine is packed with very specific individuals that have garnered trust over the years, such as mentioned here Peter Zeihan, but also a stay updated men’s clothing personality, as well as a Drone person, marketing specialist, and even a few local fishing personalities…

How To Instructions on Anything

The first time YouTube instructions saves you a ton of angst, time and money, you will gravitate to it for ANY fixit troubles you may have… From screen broadcasting in the office, to capping unused sprinklers at the house… to even how to roll tamales was on during our remote working time.

Live Web Cams and 4k Videos

Anyone in the office long enough will spot a Live Webcam somewhere…usually of either the beach or the mountains (tranquility and calm) but sometimes just of up beat music with a backdrop of videos flying over various scenic terrane – great live painting like wall screens!

Feels Good too

Many of these people are making their living with our eyes watching, listening, and learning from their videos and channels…. What an easy and great way to give back!

Have a Great “Why we like YouTube” 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

Moody’s Credit Agency Jumps on Board and Downgrades 10 Banks along with “Keep an Eye Out” for More ….

Just Friday we mentioned Fitch Credit Agency Played Eye Spy and downgraded the USA credit worthiness by a very small amount from AAA to AA+…. the Eye Spy was due in part to the very large government spending acceleration number that showed up in the overzealous GDP print ….

Not to be outdone, a fellow credit agency, Moody’s chimed in as well

Moody’s Downgrades 10 Banks – Keep an eye on Others

As reported here by Reuters, Moody’s jumped into the pool and downgraded a slew of banks as well as put many on watch….

As mentioned in our post on the Fitch Downgrade, the US interest rates moved up after the ratings increase…. it would be expected all banks involved to see their standards tighten as well as their borrowing costs rise as well….

Why is this important you may ask?

This second rating decrease, by Moody’s will in effect help the FOMC in their pursuit of slowing the economy. Banks will broadly tighten lending standards!!

Have a Great “Moody’s Jumps into the Pool Downgrade” 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