Tag: construction

‘Things have not been easy for us’: My sister is a hoarder and procrastinator. She is delaying probate of our parents’ estate. What can I do?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I am in my early 50s, divorced and working full time, and have been raising my only child, a teenage daughter, alone for the past 12 years. My daughter is estranged from her father, who pays child support. We live in Connecticut.

My parents are both deceased as of last year. I moved out of the family home 34 years ago. I have one sibling: a slightly older sister who never moved out of the family home, never went to college, never married, never had a driver’s license, and has no children. I don’t believe she has ever had to pay rent.  

My parents, my sister and I are civil servants with pensions. My sister has done quite well with a high-school degree, and is already eligible to retire. Her job gives her a lot of time off, including holidays and the entire summer. 

When our last parent became ill, she became their caretaker. There was plenty of money between pensions and retirement accounts that she was able to use for home healthcare, medical expenses, household expenses and eventually funeral expenses.

‘She never stopped working’

She never stopped working through all of this, and had power of attorney on all their accounts. She was evasive with me about the amount of money she was overseeing, and I never pushed the issue.  

My parents’ house has been paid off for several years now and both parents’ names are on the deed. They had no will, but named us both as equal beneficiaries on all accounts. Those funds have been distributed.

My sister has been avoiding the issue of probate for several months. She continues to be evasive about the continuing costs associated with the house, but assures me everything is being paid. She has a history of procrastination and has been hoarding for decades. As time goes on, there is noticeably less space to stand inside the house. 

Through probate, the house and our parents’ belongings are due to be split between the two of us. Since I can’t envision my sister ever finding the wherewithal to move out or prepare the house for sale, I would want her to buy out my half of the house so that my daughter and I can live a more secure life.

Finished paying off loans

We rent, and things have not been easy for us. I paid my own way through college and finished paying all my loans off three years ago. I plan to send my daughter to college in a few years and have a 529 plan for her that’s only worth about $15,000. I’ve been sacrificing a lot to put aside retirement money for a long time, but I will probably never feel confident that it’s enough. 

My sister has been busying herself with many activities that she claims are the reason we can’t get this probate process started now. People around me are urging me to be more assertive. I’ve called the appropriate town offices, and I have a certified copy of the deed to the house and some of the applications in hand, but I don’t feel qualified to do this correctly on my own.

I know there are mediators and lawyers that can help, but I don’t know the best way to take control of this situation without spending a ton of money. What do you suggest would be the fairest and fastest way to get this going when one person is passively resisting?

Feeling Stuck

Related: My mom had a trust, so why do we still need probate to settle her estate?

“The good news is that all of the lawyer’s fees will likely be paid out of your parents’ estate, so you will have no upfront legal costs.”


MarketWatch illustration

Dear Stuck,

It’s time to call a lawyer. Delaying this process could cost you dearly.

In Connecticut, you have up to 30 days to file for probate; after that, you could incur fines. “Probate fees are established by statute and are uniform throughout the state,” according to the Connecticut probate-court system. “Interest at the rate of 0.5% per month accrues on all unpaid fees on decedents’ estates beginning 30 days after the date of the invoice, or, if a Connecticut estate tax return has not been filed within the time required, beginning 30 days after the return was due.” You can access an online calculator to estimate probate-court fees here. 

The good news is that all of the lawyer’s fees will likely be paid out of your parents’ estate, so you will have no upfront legal costs. The executor should have been chosen by the person who wrote the will; if your sister is unable to take on these responsibilities, talk to a trust-and-estate attorney about petitioning the court to remove your sister as executor. It may be that you decide to keep your sister as executor but, after explaining to her the financial implications, you proceed with the help of your attorney.

Your sister has proven herself to be a hard worker, by your own account, but she needs help with this process, and she needs help with the other aspects of her life. Removing her as executor would be time consuming and onerous. Possible reasons for removing an executor include egregious behavior like stealing from or wasting the assets of the estate, or lack of cooperation with the administration of the estate. Removal of an executor can be a complicated and costly process, and one that risks squandering even more money from your parents’ estate.

Personal issues

The legal aspect to your story has, perhaps inevitably, become intertwined with your personal histories. You identify your sister in your letter primarily by what she does not have: a husband, children, a driver’s license, etc. But she has also proven herself to be capable and have many other positive qualities: She was a caregiver, and worked hard as a civil servant to build up a pension to enable her to retire. What she lacks now is support, which both you and an attorney can provide. The nature of that support is legal, practical and also emotional. Providing the latter may be the key to the rest. 

Hoarding disorder is recognized as a mental-health condition by the medical profession. An outsider may see dust and dirt, in addition to cramped and possibly dangerous living conditions, but they don’t always see what lies beneath: fear, pain and potentially other neuropsychiatric disorders, including obsessive-compulsive disorder. Your sister would, of course, need to be diagnosed by a medical professional. Procrastination is also positively correlated with anxiety. Again, outsiders may mistake this for being uninterested or lazy.

It may be that being frustrated with your sister is a familiar feeling, and one you are willing to endure. But just as your sister should not be allowed to let her very significant issues interfere with probating your parents’ estate, you also should not let your relationship with your sister stop you from taking action. First, you will have the legal process, which will unfold if you seek help from an attorney. After that, you will have the equally important task of encouraging your sister to seek the support of a therapist who may be able to help her move forward.

Your probate stalemate shows that no one problem exists in isolation. 

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter. 

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

I have $1.5 million in stocks and bonds. I asked my broker to convert my bonds to cash. He didn’t and my portfolio fell by $100,000. Can I sue?

‘She was very special to me’: My late 98-year-old cousin was targeted by grifters. They stole $800,000. Do I have any recourse?

‘It was a mistake’: My father set up a revocable trust, leaving everything to my stepmother. She’s cutting me out completely. What can I do?

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.

By emailing your questions to the Moneyist or posting your dilemmas on the Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.



Source link

#easy #sister #hoarder #procrastinator #delaying #probate #parents #estate

My estate is worth millions of dollars. How do I stop my daughters’ husbands from getting their hands on it?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

My wife and I live in California, as do three of our four grown daughters. We are revisiting our family trust for the first time in many years, as we’re getting older and have gradually built an estate worth a couple of million dollars. We want to make sure that, in case our daughters get divorced, our hard-earned savings go to them and not their ex-husbands. 

We consulted with two estate attorneys and got different answers. The first said there’s nothing we can do to legally enforce that the inheritance stays separate; the most we could do is put in some wording along the lines of “It is our wish that the money stays separate.” The second attorney said that we can make our children sign a prenup as a condition of their inheritance. 

Furthermore, we have one daughter who has already been married for five years and has three children; another daughter who just got engaged; and two other children, who are single. Our married daughter does not have a prenuptial agreement. How do we protect our gift to her? A retroactive prenup? How should we proceed?

Father of Four Girls

Related: ‘They’re threatening to go to a lawyer’: My in-laws gave us $300,000 and are on the deed to our home. Now they insist we give our niece $125,000.

“Don’t allow this money to become a cudgel with which to control your daughters’ lives.”


MarketWatch illustration

Dear Father,

Money should bring freedom and opportunity, not control and coercion. 

Your intentions tread a fine line between expectations and legality. There is only so much you can do to prevent your daughters from sharing their inheritance with their spouses, assuming they all marry and some of those marriages end in divorce. It is a credit to you that you have amassed a couple of million dollars, but don’t allow this money to become a cudgel with which to pull the purse strings in your daughters’ lives. 

One solution to your problem: You could set up a bloodline trust, a revocable trust that sets out how you should leave your assets to your direct beneficiaries — in this case, your daughters — and which becomes irrevocable upon your death. It can only be used for your daughters and their children, and because it becomes irrevocable upon your death, it cannot be accessed by creditors, should you have any. There are downsides. For example, such a trust could, unless otherwise specified, exclude stepchildren and adopted children.

First, the good news: Inheritance in California is considered separate property. Whether you leave your children real estate or brokerage or savings accounts, that money will remain nonmarital property unless your daughters use it to upgrade their family home or in some other way commingle those assets with their community property. So that pre-empts the need for your married daughter to ask her spouse to sign a postnuptial agreement.

On that subject, however, it’s not wise to use this inheritance to tell your daughters what they should do within their marriages. There should be a clear boundary between your relationship with your adult children and their relationships with their respective partners and spouses. It’s not a good idea to interfere in the latter. Doing so may cause discord in their relationships and also cause unnecessary hurt and tension in your own relationships with your daughters.

“California is one of a few states that strictly adheres to community-property laws, which declare that assets acquired during a marriage [are] community, also known as marital, property,” according to Myers Family Law in Roseville, Calif. “However, even California draws a line when it comes to personal inheritances, including inheritances that were received while married. Inheritances are treated as separate property, belonging to the individual who received the inheritance.”

Legal gymnastics

Requesting in your last will and testament that your daughters receive their share of your estate on the condition that they don’t share any of it with their husbands presents a lot of impractical and legal gymnastics. What they do with their inheritance is their business, unless you put those assets in a trust with strict instructions on how those assets should be used — for your grandchildren’s education, for example — or use the trust to provide an annual income.

There are so many variables beyond your control. What if you die before your wife, and she has different ideas about how your joint estate should be settled? What if your daughter’s husband is asked to sign a prenup, and replies, “No way — who does your father think he is?” The best course of action is to make your daughters aware of how to manage separate assets that are inherited, and how they could be accidentally commingled.

Think about the quality time you have left with your family. You don’t want Thanksgiving dinners to turn into a battle royale or, worse, a situation where your daughters and their partners gradually pull away and reevaluate their relationships with you. You have worked hard for your money, and you are attempting to protect your family fortune. But there are times in life when you can do too much, and hold your family too tight, even if that is not your intention. 

Ask yourself some soul-searching questions before you proceed. Do you really want to force your children to sign a prenup in order to receive their inheritance? Prenups can be challenged and changed at a later date. What is more important: the couple of million dollars you will leave behind, or the relationships you have with your daughters while you are still here? Don’t put a price on your daughters’ love for you — or on their love for their spouses.

Sorry for being preachy, but even Shakespeare wrote a play about estate planning. It was called “King Lear.”

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

‘I grew up pretty poor’: I got an annual bonus. After I pay off my credit cards, I’ll have $10,000. What should I do with it?

‘I received an insurance-claim check for $22,000’: Why on earth does it take five days for my check to clear?

‘I want to protect my family’: My wealthy father, 49, is marrying his third wife. How do I broach the subject of my inheritance?

Source link

#estate #worth #millions #dollars #stop #daughters #husbands #hands

My brothers are co-owners on $1.9 million of our mother’s bank and brokerage accounts. She now has Alzheimer’s. How can I rectify this?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I have three adult siblings living in different states, and we are disputing the circumstances surrounding the joint accounts shared with our 85-year-old mother, who has early stage Alzheimer’s. Our mom has a net worth of around $2 million, which is spread across several different bank and brokerage accounts. Late in life, she added a different sibling as a co-owner on each of her accounts to help manage her money.  

My brother “Joe” is listed as the sole co-owner on the bulk of our mother’s brokerage accounts, totaling $1.3 million, while my brother “Andy” is the sole co-owner of a $600,000 bank account and I am the sole co-owner of a $100,000 brokerage account. I think our mom simply forgot to add my sister, “Sue,” as a co-owner on any account. Her intention has always been for the four of us to equally inherit her assets.

I suggested to my three siblings that we should change all the accounts to sole ownership under our mother’s name with four equal beneficiaries. I thought this could avoid many possible complications with gift taxes and distribution at the time of our mother’s death, since as it stands, each co-owner would have to divide the money from their co-ownership account and send it to the other siblings.

Sue is named as power of attorney and could manage our mother’s individual accounts as needed. However, Joe is adamant that the current setup of co-ownership of accounts is the best way to help our mother, especially to protect her against financial fraud in case she needs to move to a nursing home. He insists there will be no gift taxes with the eventual distribution and that this setup is straightforward and easy to co-manage.

This situation is causing a lot of stress and distrust among my siblings, which I hate. I suggested we change things in order to make our mother’s financial situation as simple as possible, especially at the time of death, and not because I don’t trust Joe. Right now, no one is touching our mother’s accounts, and I am paying most of her expenses, as she lives with me.

Please advise.

Frustrated Sibling

Also read: My wife and I sold our home to her son at a $100,000 discount. He’s now selling at a $250,000 profit. Do I ask for a cut?

“Sue, as power of attorney, should be able to withdraw money from your mother’s other accounts and/or set up a bank account with those funds in your mom’s name,” the Moneyist writes.


MarketWatch illustration

Dear Frustrated,

Your brothers have every reason to act like white truffle butter wouldn’t melt in their mouths.

Between them, they have sewn up your mother’s largest bank accounts, and you are very likely dependent on the kindness of these brothers to either add you to the accounts as co-owners or distribute the funds between all four siblings after your mother passes away. 

I would not hold my breath for Joe or Andy to do either of these things. They can just as easily resist with politeness and smiles as with anger and resentment. I’m sorry to say that the most damaging actions — for you and your sister— have already been taken. 

We may never know the conversations that took place when your brothers were added as co-owners. But there is a very important difference between a “co-owner” and a “co-signer” on an account. The latter can withdraw money but does not own the money in the account.

If your mother was not of sound mind or her mental capacity was diminished when your brothers were added to these accounts, or if she had intended to add them as co-signers, there may be a case where you can contest your brothers’ ownership of these accounts.

The legal framework around such cases vary depending on the state, but it’s usually up to the estate of the original owner of the account to prove that there was elder abuse and/or undue influence taking place. As always, you should consult an attorney who specializes in elder law.

Limitations to power-of-attorney duties 

Sue, as power of attorney, should be able to withdraw money from your mother’s other accounts and/or set up a bank account with those funds in your mom’s name. She should preserve these funds for additional medical bills and long-term care as her condition progresses.

But the bottom line is that without the cooperation of your two brothers after your mother dies, failing any legal case to reverse matters, you will remain with the sole ownership of the $100,000 brokerage account, and the four of you will inherit whatever else is left in the estate. 

It’s virtually impossible to say without more information, but Sue, as power of attorney, is unlikely to have the ability to change the ownership of these accounts unless that is specified in the terms of her POA contract. That would also depend on the laws of your state.

“The power of attorney permits the agent to access their parent’s bank accounts, make deposits and write checks,” Jupiter, Fla.-based Welch Law says in this POA overview. “However, it doesn’t create any ownership interest in the bank accounts. It allows access and signing authority.”

The law firm continues: “If the person’s parent wants to add them to the account, they become a joint owner of the account. When this happens, the person has the same authority as the parent, accessing the account and making deposits and withdrawals.”

But those with power of attorney cannot self-deal when it comes to their parent’s finances. “As a POA, they are a fiduciary, which means they have a legally enforceable responsibility to put their parent’s benefits above their own,” Welch Law adds.

You should not have to pay for your mother’s care out of your own bank account. Your sister, as power of attorney, should be managing that. Talk to your siblings about your mother’s Alzheimer’s and how the four of you plan to manage her care in the months and years ahead.

Will your brothers fulfill their promise and make you and your sister whole? Only time will tell.

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

‘I don’t like the idea of dying alone’: I’m 54, twice divorced and have $2.3 million. My girlfriend wants to get married. How do I protect myself?

‘If I say the sky is blue, she’ll tell me it’s green’: My daughter, 19, will inherit $800,000. How can she invest in her future?

‘They have no running water’: Our neighbors constantly hit us up for money. My husband gave them $400. Is it selfish to say no?



Source link

#brothers #coowners #million #mothers #bank #brokerage #accounts #Alzheimers #rectify

My Tinder match asked if I ‘rent or own’ my apartment. Is it gauche to ask financial questions before a first date?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I met a guy on Tinder
MTCH,
+0.75%
and had an introductory telephone conversation, which I always think is a good idea before making the effort to meet in person. During our 15-minute telephone conversation, he told me about his divorce, his job and his hobbies. He described himself as easygoing and outdoorsy, and someone who likes to socialize and play sports. 

He talked a lot about his children, for five minutes or longer. He said he owned a small house. He asked what I did for a living, when my last relationship was, what neighborhood I lived in and — this stuck in my craw — whether I rented or owned my apartment and if it was a studio, one- or two-bedroom apartment. I felt uncomfortable, but I answered.

I live in New York City, and I happen to own my apartment, but I felt like he was sizing me up and trying to get a picture of my finances before he decided to meet me. He also asked how long I’ve been in my apartment, probably to assess how much equity I had in it. I replied, “a while,” as I already felt like he was getting too into my finances for a first conversation.

Once he was satisfied with my answers to these questions, he suggested we meet. I am busy this weekend, so he suggested driving into the city during the week. Based on his job and profession, I can reasonably estimate that I earn about twice his salary, though this does not mean anything to me, and I could care less. But given his money-related questions, I find that ironic.

I asked some friends. Some did a spit take, while others felt such questions were fair game. What do you think?

Irritated Even Before Our First Date

Related: I want my father to quitclaim his home so I can refinance it — and take out a $200,000 annuity for my sister and me. Is this wise?

“Based on his questions, it’s important to him that you have the same level of financial security that he does. If it were not an issue for him, he would not have asked.”


MarketWatch illustration

Dear Irritated,

He is not your real-estate agent or financial adviser, so I agree that it’s strange for a virtual stranger to quiz you on your living arrangements.

Based on his questions, it’s important to him that you have the same level of financial security that he does. If it were not an issue for him, he would not have asked. It’s as simple as that. Similarly, if he were wealthy beyond his wildest dreams, he may care less than someone who has climbed partly up the property ladder. But do I think it’s a bit much to ask in a first conversation? Yes.

Don’t give the Greek chorus too much importance. Whether or not other people are comfortable with such questions in a first call is immaterial; if you are not comfortable, you have your answer. You, after all, are the person who will have to date him, and expect him to show a semblance of emotional intelligence and sensitivity. It’s imperative to be able to read the room.

Let there be no mistake: If he is asking a question about your real-estate holdings or finances, he’s interested in them as a way of assessing (or judging) your suitability as a partner. Maybe he romanticizes his relationship prospects based on first impressions, and wonders whether he could combine assets and live in splendor. But words and questions have meaning.

Social acceptability vs. social mobility 

In America, it may be seen as more acceptable than in some European countries to ask what you do for a living, and even whether you rent or own in a big city like New York. The U.S. is a country of immigrants, and has more immigrants than any other population in the world, according to the Pew Research Center. 

The idea is to strive, work hard, and do better than the previous generation, although a majority of Americans reportedly doubt the attainability of generation-to-generation upward mobility, and millions of people are reassessing their relationship to work-life balance in the wake of the pandemic.

Wealth and looks play a role in whether someone swipes left or right, but the former appears to become more important when a connection is made with a partner who is deemed attractive. “When long-term interest is considered, the physical attractiveness of the model appeared to serve as an initial hurdle that had to be cleared prior to any other factors being considered by the participants,” according to this 2020 study.

People do swipe right based on economic factors. It would be foolhardy or idealistic to suggest that they don’t. If, however, a man poses in sunglasses with two thumbs up next to a Lamborghini, listing bitcoin
BTCUSD,
+1.57%
trading as one of his pastimes, chances are he doesn’t own that Lamborghini and, in my estimation, may have “Tinder Swindler”-level intentions.

And if a potential partner is both attractive and wealthy? That seems to be an appealing combination. Female online daters are 10 times more likely to click on profiles with men who have higher incomes, at least according to this study published in the Journal of Economic Behavior and Organization, while male online daters are equally likely to click on women’s profiles, regardless of income. 

I don’t put too much stock in studies that say men are looking for attractive partners, while women are more interested in men who look wealthy. You could probably do an analysis of any online dating site and gather a sample that would give you conclusions that say pretty much anything you want them to say. It all depends on the individual: Someone who knows the exact size of their backyard and strives to keep up with the Joneses is more likely to ask whether you rent or own.

In other words, this fellow who grilled you over your own socioeconomic circumstances may still be a perfect match — for someone else.

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

I want my son to inherit my $1.2 million house. Should I leave it to my second husband in my will? He promised to pass it on.

My adult sons live rent-free in my house, while I pay for 50% of utilities in my second husband’s condo

My brother lives in our parents’ home, which we’ll inherit 50/50. I want to keep it in the family for my children. How do I protect my interests?



Source link

#Tinder #match #asked #rent #apartment #gauche #financial #questions #date

‘I can’t afford to keep paying for two households’: My adult sons live rent-free in my house, while I pay for 50% of utilities in my second husband’s condo

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

In 2007, my now ex-husband and I bought a home, where we lived as a family with our two boys for just a few years before we divorced in 2009. I refinanced the house in my name, and have paid the mortgage and utilities as a single parent ever since. 

In 2016, I met and started dating a man. We lived apart, only about 10 to 15 minutes from each other. In 2021, after I battled cancer, he proposed and I accepted. Since we only lived a few minutes apart, I stayed at my husband’s two-bedroom condo Thursday through Sunday, and spent Sunday through Thursday at my house, where I worked from home. I did this for years. 

My oldest son moved back in with me in 2021. He graduated high school in 2017 and I gave him a gap year living at my house to decide on his next move, after which he moved out and started his career. He lived on his own for a year, then lived with my parents for a year. He met a girl; they signed a lease and then the pandemic hit. After their lease was up, they broke up, and he decided to go back to college full time. I agreed that he could live in my home while he attended college. His tuition is covered by grants and a 529 fund his grandmother set up.

In 2022, my then boyfriend and I married. However, we still didn’t move in together full time, as I still had my house, and my youngest son had not yet graduated high school. I wanted to be home with him. 

Helping to support two households

My youngest son, 19, graduated high school in 2023. Later that summer, I moved out of my house to stay with my husband full time. I pay 50% of the expenses living with my husband and 100% of the expenses for my house, where the boys live. 

I kept both households going so my youngest could have a gap year of his own, and to cushion my oldest, whom I really didn’t think would go to college, while he attended to his studies. They are young and finding their way, and I wanted to give them the support I felt like they needed. But here we are in 2024, and I can’t afford to keep both households running without impacting my ability to save for retirement.

Here’s my dilemma: I don’t know how to get my boys out of my house so I can clean it up, stage it and list it for sale. We live in an area where the average two-bedroom apartment rents for $1,800 a month. My youngest works full time following his passion for BMWs and makes about $2,400 a month. My oldest, 25, works part time in retail and makes about $1,000 a month while he attends college. They both work within 3 miles of my home. They simply can’t afford to move out, and I can’t afford to keep paying for two households.

To complicate matters, I have about $100,000 in equity in the house, and I’d like to use it to pay off some small debts and buy a car, as well as put the rest in retirement.  But my mother, who has had a long and successful career in real estate, thinks I should wait it out and let my equity continue to build, giving the boys some cushion while they are still finding their way. 

Do I shop around and find them an apartment, help them set up utilities and help them with movers? Do we build a project plan with a deadline, or just keep looking for places in the hope that we eventually find one we like? Do I subsidize their monthly expenses and give them each $400 a month for utilities, if they cover their rent? 

I know this is probably easy for other people, but I am at a loss as to how and when to do this. We all feel stuck, scared and anxious. Any advice is appreciated.

Wife & Mother

Related: My cousin left his estate to 6 relatives, but only one cousin, worth $30 million, received the inheritance — due to an ‘unexpected surprise’

“On the subject of mothers, listen to your own. If you can rent out your home, pay the mortgage and wait for the value to increase, do that.”


MarketWatch illustration

Dear Wife & Mother,

The longer you support your two adult sons, the longer they will lean on you and need you as their personal ATM. You’ve brought them over the finish line, and then some. You raised them, educated them, and fed and clothed and housed them. Now you are paying for their electricity and other bills. It’s time for your sons to stand on their own two feet and, as my Irish mother would say, cut their cloth according to its measure.

On the subject of mothers, listen to your own. If you can rent out your home, pay the mortgage and wait for the value to increase, do that. Your mother works in real estate and knows what she’s talking about. Real estate, in an ideal world, is a long-term game. It’s time for your sons to downsize to a small apartment, and experience the joys of paying their own way and standing on their own two feet. You need to cut the cord.

Act with integrity and intention. The best way to make a big move — and this is probably as big a move emotionally as it is financially — is to prepare. Sit down with your sons and an independent financial adviser, and do a forensic accounting of their income and expenditure and where they spend their money. I can almost guarantee you that their subsidized lifestyle lends itself to spending money in areas where they could easily cut back.

There is an underlying feeling of guilt in your letter. Have you done enough? Yes. Should you do more? No, you have done plenty, and you’re now putting your sons before your own financial peace of mind and retirement. Does it make you a bad person, or an unfeeling one, if you decide to cut them off? Of course not. Quite the contrary: You can lead by example by showing them what it means to make tough decisions and stick to them.

When you have accounted for your sons’ income and expenditure, look at rentals in your neighborhood or adjoining neighborhoods, if need be. The aim is for them to start taking responsibility for themselves. They don’t need a two-bedroom apartment. They can live in a one-bedroom condo and take turns sleeping on the sofa bed. This is a rite of passage, and it teaches young people the value of money and what it means to take accountability for oneself.

The share of adult children in the U.S. living with their parents has steadily risen since the 1960s. In 2020, during the pandemic, one-third of children ages 18 to 34 lived with their parents as non-caregivers. Men and 18- to 24-year-olds, respectively, were more likely to live at home than women and 25- to 34-year-olds, according to a study distributed by the National Bureau of Economic Research. Parents get support at home; kids get to experience a low-cost lifestyle.

But while the NBER found social benefits to living with adult children and that it does not necessarily delay, retirement, the benefits of providing your children with a head start by giving them somewhere to live start to decline when your ability to save for retirement is impeded, and you’re burning money supporting two households. This is also money you can put towards vacations and new cars, and building a future with your husband. You deserve to enjoy life and put yourself first for a change. Tell your sons, “You’re ready. I’m ready. I love you. Let’s do this.””

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

‘She’s obsessed’: My mom moved into my house and refuses to move out. She has paid for repairs and appliances. What should I do?

My parents want to pay off my $200,000 mortgage, and move into my rental. They say I’ll owe my sister $100,000. Is this fair?

‘I hate the 9-to-5 grind’: I want more time with my newborn son. Should I give up my job and dip into my six-figure trust fund?



Source link

#afford #paying #households #adult #sons #live #rentfree #house #pay #utilities #husbands #condo

I’m a 61-year-old single librarian and ‘proud’ Democrat from Maine. Should I move to Florida like Jeff Bezos?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I finally have something in common with Jeff Bezos. He is moving to Miami. I too am thinking of moving to Florida in the next year or so. My parents retired there 25 years ago; my father passed away in 2019, but my mom is still alive. I am also nearing retirement, and thought I would follow in their footsteps. I have a house in Maine, which I intend to sell when I finally make the move. I’ve lived here for 11 glorious years, and made a lot of friends. I’m a librarian, but don’t believe anything or everything you have heard about librarians, we are a social lot. 

I’m 61 and earn $85,000 a year, and have a lot of friends. But I reckon my mom has only a few good years yet, and she is slowing down. I bought my house for $160,000 and it’s now worth $350,000 or thereabouts, if I can sell it with the way interest rates are going. If not, I could rent it out. So my question is: Should I retire to Florida like Jeff Bezos? I’ve been window shopping for properties around Sarasota and Tampa, but I’m flexible. I am proud to live in a blue state, but I also want to be within an hour or so of my mom, so I can see her as often as possible. 

I’ve been feeling restless and, frankly, glum lately. And I thought this change would do me good. Am I mad? Is this a good move?

Florida Bound

Related: My ex-husband is suing for half of our children’s 529 plans — eight years after our divorce. Is he entitled to plunder these accounts?

“No matter how many billions of dollars you have in the bank, there’s one thing that money can’t buy — time.”


MarketWatch illustration

Dear Florida Bound,

You and Jeff Bezos do share that one concern about wanting to be near your aging parents. No matter how many billions of dollars you have in the bank, there’s one thing that money can’t buy — time. The Cape Canaveral operations of his space company, Blue Origin, are also in Florida, so it’s a convenient business move and a tax-savvy one. Maine has a capital gains and income tax; but Florida, like Washington, has no state income tax; unlike Washington, it has no capital-gains tax. You and Bezos will be following in the footsteps of former president Donald Trump, who lived in New York before he tax domiciled at his Mar-a-Lago Palm Beach estate. 

Billionaires — not unlike retirees — tend to move out of states with estate taxes, according to a recent study by researchers at the University of California, Berkeley and the Federal Reserve Bank of San Francisco. The trend grows stronger as billionaires grow older. But whether you’re a billionaire or a mild-mannered librarian, when you move, you should move. If you spend more than 183 days in Maine per year and/or still have a home there, and you do not spend a similar amount of time in Florida, the tax folks in Maine could ask you to pay Maine income tax. You may have to keep records of your comings and goings (airline tickets and credit-card receipts etc.), but tax agencies can also subpoena your cell-phone records.

Should you move to Florida? Be prepared for the humidity — and the culture shock. You may be used to those lovely 78°F/26°C summers in Maine. Try swapping that for 95°F/35°C. Florida is a very different place to Maine, both culturally and politically. You may find yourself living next-door to an equally proud Trump supporter. If you enjoy living in a blue state, assuming you are a supporter of President Joe Biden, how would that make you feel? Or are you living in a Democratic blue cocoon (or lagoon)? Do you have friends across the political divide? We have a presidential election in November 2024. Expect nerves to be frayed.

The good news — yes, I have good news too — house prices in Maine and Florida are almost identical. The average price hovers at $390,000 in both states, according to Zillow
Z,
-1.58%.
Just be aware of the rising cost of flood and home insurance in the Sunshine State. You are also likely to be surrounded by people your own age: Florida is the top state for retirees, per a report released this year by SmartAsset, which analyzed U.S. Census Bureau migration data. A warm climate and zero state income taxes consistently prove to be a double winner: Florida netted 78,000 senior residents from other U.S. states in 2021 — the latest year for which data available — three times as many as Arizona, No. 2 on the list.

I spoke to friends who have retired to Florida and they say it’s not a homogenous, one-size-fits-all state. “It’s not all beaches, hurricanes, stifling year-round temperatures, and condos,” one says. “It’s possible to escape northern winters without committing to these conditions.” One retiree cited Gainesville in north-central Florida, the home of the University of Florida, as “diverse and stimulating,” but noted that the nearest airports are in Jacksonville (72 miles), Orlando (124 miles), and Tampa (140 miles). Another Sarasota retiree was more circumspect, and told me: “Be careful how you advertise your political affiliation.”

Perhaps where you belong for now is close to your mother. Spending time with her is a top priority, but brace yourself for a new living experience in Florida (and, while we’re at it, alligators). The siren call of home grows stronger as we get older, but “home” also means different things to different people. For some, it’s a place where they can live comfortably, and within their means. For others, it’s where they have a strong sense of community, be that friends, family, or like-minded individuals, or those with whom we can respectfully disagree. People who have a support system around them tend to live longer, so keep that in mind too. 

We can change so much about our circumstances: buy a new car, try a new hairstyle, even go to a plastic surgeon for a new face. There are all sorts of remedies at our fingertips. If all else fails, there’s a pill for that. Or an app that will change our life, or at the very least lull us to sleep with the sound of whales or waves. We may be tempted to believe that if we could change our circumstances, our house, our job, our bank account, or even the town, city, state or country where we live, that we could reinvent ourselves in our own eyes and the eyes of others, and turn our frowns upside down.

There’s just one, not insubstantial problem: we take ourselves — and all of our neuroses — with us.

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

If I buy a home with an inheritance and only put my name on the deed, does my husband have any rights? 

I cosigned my boyfriend’s mortgage, but I’m not on the deed. I didn’t want to marry again after a costly divorce. How do I protect myself?

My mother claims I’m in her will but refuses to show it to me. Should she put my name on the deed to her home?



Source link

#61yearold #single #librarian #proud #Democrat #Maine #move #Florida #Jeff #Bezos

Poland turns toward bets on offshore wind

Post By Politics , , , , , , , , , , , , , , , , , , , , , , , , , ,

The development of offshore wind farms in Poland has never before taken place on such a large scale. The PGE Group is the biggest investor in offshore wind farms in the Polish part of the Baltic Sea in terms of wind turbine capacity. As part of its offshore program, the PGE Group is currently implementing three offshore wind farm projects.

Two of them are the offshore wind power plants Baltica 2 and Baltica 3, which comprise the Baltica Offshore Wind Farm with a total capacity of 2.5GW. PGE is implementing this project together with the Danish partner Ørsted. Both phases of the Baltica offshore wind farm have location decisions, environmental decisions, and grid connection agreements with the operator, and have been granted the right to a Contract for Difference (CfD).

As part of its offshore program, the PGE Group is currently implementing three offshore wind farm projects.

Last April, PGE and Ørsted took a major step in the Baltica 2 project. They signed the first of the contracts for the supply of wind turbines. Subsequently, they also signed a contract for the supply of offshore substations in June. Baltica 2 is expected to start producing green energy in 2027, while the entire Baltica Offshore Wind Farm will be completed within this decade.

Independently of the Baltica Offshore Wind Farm, the PGE Group is developing a third project, Baltica 1. Commissioning is scheduled after 2030 and its capacity will be approximately 0.9GW. The project already has a location permit and a connection agreement. In May 2022, wind measurement studies for this project started, followed by environmental studies in autumn 2022. The energy produced by all three farms will supply nearly 5.5 million households in Poland.  This means that more than a third of all Polish households will be provided with energy from wind power.

Baltica 2 is expected to start producing green energy in 2027, while the entire Baltica Offshore Wind Farm will be completed within this decade.

At the same time, the PGE Group has received final decisions on new permits for the construction of artificial islands for five new areas to be developed in the Baltic Sea, which will enable the construction of further offshore wind power plants in the future. The total capacity potential from the new areas provides PGE with more than 3.9GW. Considering the projects currently under development (Baltica 2, Baltica 3 and Baltica 1) with a total capacity of approximately 3.4GW, PGE Capital Group’s offshore wind portfolio may increase to over 7.3GW by 2040.

Offshore wind — a new chapter for the Polish economy

A long-term vision for the development of the Polish offshore wind sector, based on the carefully assessed potential of this technology, will support the development of the energy sector in Poland. The benefits of offshore wind development in Poland should be considered in several aspects — first and foremost, due to their total capacity, offshore wind farms will become a very important new source of clean, green energy for Poland in just a few years.

“Offshore wind energy will make a significant contribution to Poland’s energy mix. The three projects currently under construction by the PGE Group, with a total capacity of almost 3.5GW, will generate electricity for almost 5.5 million households. All the investments planned for the Baltic Sea are crucial for strengthening Poland’s energy security. Regarding the Polish economy, in particular the economy of the entire Pomerania region, the construction of offshore wind farms will provide a strong development stimulus. This is not only about businesses closely related to wind energy, such as companies supplying components for offshore wind power plants. Jobs will also be created by businesses willing to join the development of this new sector and take advantage of the opportunities it brings,” said Wojciech Dąbrowski, president of the management board of PGE Polska Grupa Energetyczna S.A.

All the investments planned for the Baltic Sea are crucial for strengthening Poland’s energy security.

The construction of offshore wind farms will ensure Poland’s energy security

The development of offshore wind is also crucial to Poland’s energy security and independence. Thanks to the production of energy from renewable sources, there is no need to import fossil fuels from abroad or rely on dwindling domestic coal resources.

This means that Poland will not be dependent on external fuel suppliers or various international developments. The ability to generate electricity independently contributes to strengthening the country’s energy sovereignty.

Energy, environmental and social benefits

Poland has ambitions and capabilities to become one of the leaders in offshore wind energy development in the Baltic Sea and even in Europe. We have plenty of resources for the development of offshore wind farms because of our favorable geographical location and natural conditions — strong, stable winds and the relatively shallow considerable area of the Baltic Sea, located in the exclusive economic zone. The Baltic Sea has some of the best wind conditions not only in Europe but also in the world, which are comparable to those in the North Sea.

Offshore wind energy is a key element of sustainable development. For Poland, green wind energy means savings, security and energy independence at the same time. Electricity from renewable sources is less expensive than that generated from fossil fuels. By choosing green energy, consumers can save on their electricity bills while at the same time supporting the development of a green energy sector. As a zero-emission energy source, it contributes to achieving climate policy goals and minimizing negative environmental impact. It is a huge step towards reducing greenhouse gas emissions. The creation of an infrastructure for the construction of alternative energy sources with wind farms will ensure the diversification of energy sources.



Source link

#Poland #turns #bets #offshore #wind

‘I’m 62 and ready for my golden years’: I’ve $1.7 million in annuities, Roths and index funds. Can I afford to never work again?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I’m going to preface this by saying that I know I am in a great long-term position. It’s the short term that is of concern.

I am 62, single with no dependents. I own my smallish home outright and it’s worth $1 million due to the location. I own my car outright and I have no debt. My IRA and small Roth accounts have about $350,000 with an additional $840,000 in two guaranteed-income deferred annuities rolled over from a couple old 401(k)s in 2020. There’s $520,000 in my regular brokerage accounts (mostly Vanguard Index funds). I have $42,000 invested in two eReits and $10,000 in Series I Bonds. I have $71,000 in a higher-yield savings account and $12,000 in a checking account.

I had always planned to retire at 65 and live off my savings until filing for SSI between 67 and 70 (approx $3,400 to $4,100, depending on when I file). A year ago at 61, I abruptly quit a good-paying new job due to a bad work environment, and a week later, my elderly parent had a serious medical issue. I decided to take time off to help navigate care, and just be present — without all of the stress of a pretty demanding job. A year after quitting, I figured out that I have no desire to go back to what I was doing and, quite frankly, have to desire to work at all! 

“‘I’m not afraid of running out of money long term. It’s the next 5 to 7 years that are really causing me heartache.’”

So here (finally) is my concern. My expenses are at least $3,000 per month give or take. Given what I have in savings and no plans to file for Social Security Insurance for at least five years, what do I continue to live on, especially if I don’t go back to work? I most likely have some house expenses (new roof, garage door, etc.) in the near future, plus, I want to travel sooner than later so $71,000 won’t last that long especially with this inflation. Do I sell off some of my mutual fund shares to boost my savings? 

At some point (most likely in the next two years) there may be about $75,000 of inheritance, but I’m not factoring that into the equation for now. I think I’ve done almost everything right, and I’m ready for my golden years. I’m not afraid of running out of money long term. It’s the next five to seven years that are really causing me heartache. What are your thoughts?

Short-term Angst

Dear Angst,

Life is short, but we all hope for a long retirement, and it’s easy to lose sight of what’s important when we are “nose-down” in the rat race. We only have one life, and most of us, if we’re lucky, have two parents and/or sometimes one good parent. If we are blessed with one or both, it’s a gift if we can afford to take that time with them, especially if they have pressing medical issues. Thankfully, you had planned ahead, and you were able to do just that.

Many people reevaluated their relationship to work in recent years. You did so because you became a caretaker. The most fortunate among American workers were allowed to work from home from 2020, and where their work was the umbrella that protected their financial life and gave them the funds to live their life, by the end of the pandemic, that umbrella became their life which gave them the ability to work. It’s a profound change.

I’m going to take a wild guess here — well, not so wild — and say that a lot of people are reading your letter with their mouths agape, with not a small amount of envy. Some may see a touch of humble bragging to your financial achievements, but you acknowledge that you are in a healthy financial position, and have endeavored to do everything right. That, I’m sure, involved sacrifices along the way. So bravo to you. From a gratitude point of view, your financial list is a good one.

There are a couple of wrinkles, which may be useful for others to be aware of. Robert Seltzer, founder of Seltzer Business Management in Los Angeles, said he would not recommend a client to roll their 401(k)s into annuities due to their higher fees and lack of flexibility. Without working, your only taxable income would be derived from retirement account distributions and investment income — but if your taxable income is less than $41,675, therefore, you would pay no capital gains tax. 

Is it a good time to liquidate some stocks? You’ve played the long game. The S&P 500
SPX,
-0.29%
is up 2.7% over the past year; many people close to retirement have been spooked by stock-market volatility since 2020, but the S&P has increased more than 30% since the last trading session of 2019 — before the pandemic. Assuming you’ve been investing for the past three decades or more, and have experienced the miracle of compounding over that time, the time to enjoy your life is nigh. 

“‘Assuming you’ve been investing for the past three decades or more, and have experienced the miracle of compounding over that time, the time to enjoy your life is nigh. ‘”


— The Moneyist

Something to consider as you age: “As you transition from the accumulation stage of life to the distribution stage, it is important to recognize that your risk tolerance is changing,” says Mel Casey, a senior portfolio manager at FBB Capital Partners. “If the brokerage account index funds are all in stock funds, this should be addressed. A rebalancing over time to reduce stocks and increase bonds may lower the risk and prepare the account for eventual distributions.”

Meet with a financial adviser and work out your short- and long-term needs: what your income looks like before and after you tap your Social Security benefits. The good news is you have a healthy income awaiting you when you finally start drawing down money from your retirement accounts. It helps enormously that you have paid off your home — property taxes, insurance, food prices, car payments, gas, health insurance, etc. notwithstanding.

About that health insurance. No doubt you are already aware that this will be an extra expense before you qualify for Medicare at age 65. The average annual health-insurance premium for 2022 was $7,911 for single coverage, up slightly from $7,739 in the prior year, according to KFF, formerly known as the Kaiser Family Foundation, a nonprofit headquartered in San Francisco, Calif. (You can read more about signing up for Medicare and what it will cost here.)

Casey also has thoughts on healthcare costs as you get older. “You have three years until you can apply for Medicare and that will be an important time in terms of choosing the appropriate path,” he says. “In the meantime, some form of health insurance is advisable, if only to eliminate the ‘tail risk’ of a serious injury or illness which could erode this healthy savings very quickly.”

Withdrawing money for retirement

You could cover a substantial part of your expenses from your brokerage account and Roths ($870,000) or annuities ($840,000). While you have done a great job in growing long-term assets, there are relatively few liquid, short-term assets (emergency reserves), says Randall Watsek, financial adviser with Raymond James. “For someone in retirement without earned income to draw on for living expenses, having at least five years of reserves might greatly lower their stress level,” he adds.

Ideally, you want to take Social Security between 67 and 70. “From an average life expectancy basis, it works out roughly the same, whether you take Social Security at 62 or 70,” Watsek says. “You get more small payments if you take it earlier, or fewer large payments if you take it later. It makes most sense to delay Social Security if you have a family history of living into your 90s or 100s or if you’re still working.”

But if your parents have a history of living a long life, and you currently have good health, Seltzer said he would be open for more discussion about what age you should start claiming Social Security, and he would explore whether you are comfortable waiting until you reach 67 or 70 years of age. (This would warrant further discussion with your own financial adviser, and you can reevaluate your position every 12 months.)

As my colleague Alessandra Malito points out, help comes in many forms: financial consultant, wealth manager and investment adviser. Choose a fiduciary who is required to act in your best interests (rather than giving you advice with one eye on your needs and another eye on their commissions). In order to become a certified financial planner or CFP, you must complete a certificate or degree program, 6,000 hours of related experience and have passed an exam. 

“Broker-dealers are advisers who primarily sell securities and often charge commissions on their recommendations. Commissions aren’t inherently bad, but clients should understand what they’re being charged for and feel comfortable with those fees before proceeding with the advice,” Malito writes. Certified public accountants, chartered life underwriters, certified employee benefit specialists respectively deal with accounting, life insurance and benefits.

“The rule of thumb for taking distributions during retirement is 4%,” Seltzer added. “If you took a very conservative distribution rate of 3%, it would amount to $52,500 which is almost 50% higher than your expenses of $36,000. So, by living off of a mix of savings, distributions from the annuities and capital gains from your brokerage account, you should meet his cash-flow needs with paying very little tax.”

You’re doing just fine. Your $75,000 inheritance will also give you some freedom for the next year or two, and help you get over the finish line. If you travel, think about Airbnb-ing
ABNB,
+1.69%
your home, which would cover your accommodation costs. It may also encourage you to try living in a place for a month or more. As a cardiologist might tell a patient when they’re putting them on medication for the first time, “Start low, go slow.” Take your time. Don’t make any big decisions.

As one member of the Facebook
META,
-0.50%
Moneyist Group said, “If you’re a man please marry me!” I’ll leave that with you with God’s and your fiduciary’s blessings.

“Assuming you’ve been investing for the last three decades or more, and have experienced the miracle of compounding over that time, the time to enjoy your life is nigh.”


MarketWatch illustration

Readers write to me with all sorts of dilemmas. 

You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell: 

‘He’s content living paycheck to paycheck’: My husband won’t work or get a driver’s license. Now things have gotten even worse.

My wife wants us to spend $5,000 to attend her cousin’s destination wedding. I don’t want to go. Am I being selfish?

‘I feel used’: My partner stays with me 5 nights a week, even though he owns his own home. Should he pay for utilities and food? 



Source link

#ready #golden #years #Ive #million #annuities #Roths #index #funds #afford #work

AI news is driving tech ‘building blocks’ stocks like Nvidia. But another ‘power’ area will also benefit, say these veteran investors

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Kneel to your king Wall Street.

After forecasting record revenue backed by a “killer AI app,” Nvidia has teed up the Nasdaq
COMP,
-0.61%
for a powerful Thursday open. Indeed, thanks to that chip maker and a few other generals — Microsoft, Apple, Alphabet, etc.— tech is seemingly unstoppable:

Elsewhere, the Dow
DJIA,
-0.77%
is looking rattled by a Fitch warning over debt wranglings ahead of a long weekend.

But our call of the day is accentuating the positive with some valuable insight on tech investing amid AI mania from a pair of seasoned investors.

Inge Heydorn, partner on the GP Bullhound Global Technology Fund and portfolio manager Jenny Hardy, advise choosing companies carefully given high valuations in some parts of tech that could make earnings vulnerable.

“But looking slightly beyond the volatility, tech has the advantage of being driven by many long-term secular themes which will continue to play out despite a weaker macro,” Hardy told MarketWatch in follow-up comments to an interview with the pair last week. GP Bullhound invests in leading global tech companies, with more than $1 billion in assets under management. 

“We try to make sure we’re exposed to these areas that will be more resilient. AI is the perfect example of that –- none of Microsoft, Amazon or Google will risk falling behind in the AI race -– they will all keep spending, and that will continue to drive earnings for the semiconductor companies that go into these servers higher,” said Hardy, who has worked in the investment industry since 2011.

“The way that we think about investing around [AI] is in the building blocks, the picks and shovels infrastructure, which for us is really the semiconductor companies that go into the training servers and the inference servers,” she said.

Nvidia
NVDA,
-0.49%,
Advanced Micro Devices
AMD,
+0.14%,
Taiwan Semiconductor
TSM,
-0.34%
2330,
+3.43%,
Infineon
IFX,
-0.33%,
Cisco
CSCO,
-1.02%,
NXP
NXPI,
-4.88%,
Microsoft
MSFT,
-0.45%,
ServiceNow
NOW,
+0.48%
and Palo Alto
PANW,
+7.68%
are all in their portfolio. They also like the semiconductor capital equipment industry — AI beneficiaries and tailwinds from increasingly localized supply chains — with companies including KLA
KLAC,
-1.40%,
Lam Research
LRCX,
-1.33%,
ASML
ASML,
-2.15%
and Applied Materials
AMAT,
-1.96%.

As Hardy points out, “lots of big tech has given us lots of certainty as it relates to AI, lots of certainty as it relates to the amount they are going to spend on AI.”

Enter Nvidia’s results, which Hardy said are proof the “AI spend race has begun…Nvidia’s call featured an impressive roster of companies deploying AI with Nvidia – AT&T, Amgen, ServiceNow – the message was that this technology adoption is widespread and really a new normal.” She said they see benefits spreading across the AI value chain — CPU providers, networking infrastructure players, memory and semicap equipment makers.

Heydorn, who traded technology stocks since 1994 and also runs a hedge fund with Hardy, says there are two big tech trends currently — “AI across the board and power semiconductors driven by EV cars and green energy projects.”

But GP Bullhound steers clear of EV makers like Tesla
TSLA,
-1.54%,
where they see a lot of competition, notably from China. “Ultimately, they will need semiconductors and the semiconductors crucially are able to keep that pricing power in a way that the vehicle companies are not able to do because of the differences in competition,” she said.

Are the tech duo nervous about anything? “The macro economy is clearly the largest risk and further bank or real-estate problems,” said Heydorn, as Hardy adds that they are watching for second-order impacts on tech.

“One example would be enterprise software businesses with high exposure to financial services, which given those latest problems in that sector, might see a re-prioritization of spend away from new software implementations,” she said.

In the near term, Heydorn says investors should watch out for May sales numbers and any AI mentions from Taiwan via TSMC, mobile chip group MediaTek
2454,
-0.42%
and Apple
AAPL,
+0.16%
supplier Foxxconn
2354,
-0.74%
that may help with guidance for the second half of the year. “The main numbers in Taiwan will tell us where we are in inventories. They’re going to tell us if the 3-nanonmeters, that’s a new processor that’s going into Apple iPhones, are ready for production,” he said.

Read: JPMorgan says this is how much revenue other companies will get from AI this year

The markets

Nasdaq-100 futures
NQ00,
+1.90%
are up 1.8% , S&P 500
ES00,
+0.55%
futures are up 0.6%, but those for the Dow
YM00,
-0.34%
are slipping on debt-ceiling jitters. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.756%
is up 4 basis points to 3.75%.

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. Follow all the stock market action with MarketWatch’s Live Blog.

The buzz

Fitch put U.S. credit ratings on ‘ratings watch negative’ due to DC “brinkmanship” as the debt-ceiling deadline nears. House Speaker Kevin McCarthy told investors not to worry as an agreement will be reached.

Best Buy
BBY,
-0.49%
stock is up 6% after an earnings beat, while Burlington Stores
BURL,
+3.19%
is slipping after a profit and revenue miss. Dollar Tree
DLTR,
-0.50%
and Ralph Lauren
RL,
+0.24%
are still to come, followed by Ulta
ULTA,
+0.17%,
Costco
COST,
-0.44%
and Autodesk
ADSK,
+0.06%
after the close.

Nvidia is up 25% in premarket and headed toward a rare $1 trillion valuation after saying revenue would bust a previous record by 30% late Wednesday.

Opinion: Nvidia CFO says ‘The inflection point of AI is here’

But AI upstart UiPath
PATH,
-1.74%
is down 8% after soft second-quarter revenue guidance, while software group Snowflake
SNOW,
+1.13%
is off 14% on an outlook cut, while cloud-platform group Nutanix
NTNX,
-0.55%
is rallying on a better outlook.

Elf Beauty
ELF,
+1.69%
is up 12% on upbeat results from the cosmetic group, with Guess
GES,
-0.80%
up 5% as losses slimmed, sales rose. American Eagle
AEO,
+4.50%
slid on a sales decline forecast. Red Robin Gourmet Burgers
RRGB,
+3.51%
is up 5% on the restaurant chain’s upbeat forecast.

Revised first-quarter GDP is due at 8:30 a.m., alongside weekly jobless claims, with pending-home sales at 10 a.m. Richmond Fed President Tom Barkin will speak at 9:50 a.m., followed by Boston Fed President Susan Collins.

A Twitter Spaces discussion between presidential candidate Florida Gov. Ron DeSantis and Elon Musk was plagued by glitches.

The best of the web

Before Tina Turner died at 83, she gave us these 5 retirement lessons

Can WallStreetBets’ spectacular short-squeeze be repeated?

Paralyzed walks naturally again with brain and spine implants

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

Ticker

 Security name
NVDA,
-0.49% 		Nvidia

TSLA,
-1.54% 		Tesla
GME,
+0.47% 		GameStop
BUD,
-1.94% 		Anheuser-Busch InBev
AMD,
+0.14% 		Advanced Micro Devices
PLTR,
-3.24% 		Palantir Technologies
AAPL,
+0.16% 		Apple
AMZN,
+1.53% 		Amazon.com
NIO,
-9.49% 		Nio
AI,
+2.54% 		C3.ai

Random reads

“No way.” Abba says it won’t perform at 50th anniversary Eurovision win

The Welsh harbor that looks like a dolphin from high above.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.

Source link

#news #driving #tech #building #blocks #stocks #Nvidia #power #area #benefit #veteran #investors