Monthly Archives

February 2021

7 Tips to Resolve Financial Issues Between Couples

By | Financial Planning

No matter how long you have been together, financial issues can wreak havoc on a committed relationship. According to Investopedia, some of the top money issues between partners include money/personality style clashes, debt, personal spending, children, and extended family differences.

When couples don’t agree about spending and saving habits, it can lead to stress, arguments and resentment. Here are seven ways you can address financial issues positively, preferably before they arise.

  1. Understand Your Money Styles

Think of some extreme examples of money styles in your circle. Like your friend, the foodie, who won’t touch a bottle of wine that costs less than $75. Your sister who constantly surfs Amazon with boxes showing up at the doorstep day and night. Your mom who washes aluminum foil, folds and reuses it. And your stepdad who always insists on buying everything for the grandkids, fixing his own 30-year-old car, and keeping his handwritten savings ledger to the penny.

Everyone has a money style, and it’s helpful to talk about it without any name-calling or labeling involved. Understanding your partner’s spending habits often involves a deep-dive into money fears, scarcity memories and childhood traumas. Empathizing with your partner while freeing yourselves from negative patterns can be done if you work together. The most important thing is to come up with a spending plan that works for both of you, and hold yourselves accountable to work the plan together.

It’s also very important to check any power plays that may be happening at the conscious or subconscious level. The biggest money-earner shouldn’t think they have the largest say or the only right to dictate how the money gets spent; a marriage should be equally balanced. The partner who earns less and the partner who earns more both need to cooperate as a team to create a spending plan that’s fair for both of them.

So, check your ego at the door. It’s true that money is power, and few things build resentment faster than being made to feel inferior. The person earning more should take great care to act with empathy while taking care of their own needs reasonably rather than selfishly.

  1. Decide How to Divvy Up Bills…and Save for Future Goals

There are several ways to pay the bills. You can both put all your earnings in a joint account and pay everything out of that. You can divide bills based on a percentage of your earnings. Or you can split bills down the middle and keep the rest of your own earnings for yourselves.

Once you have decided how the bills get paid, you need to devise a plan for saving for your long-term goals—like purchasing a home or securing your retirement. Remember that you need to work closely together as life changes arise—such as one of you losing a job, cutting back on hours to care for a parent, or one of you becoming disabled. If 2020 has taught us anything, it’s that contingency plans are always advisable. Putting together a financial plan for your future is a great first step toward a financially healthy future.

  1. Create Personal Spending Allowances…That Stay Personal

Having some personal money that’s designated just for you each month can really help how you feel about your relationship. It can also help avoid relationship-ruining behavior like “financial infidelity,” when one spouse hides money or purchases from the other. The personal spending allowance gives each partner the chance to spend their money however they wish, no questions asked—including gifts to each other, a new pair of shoes, or coffee every day on the way to the office. In most cases, the personal monthly spending allowance amount should be equal for both of you so that resentments can’t arise.

  1. Compromise on Spending for Children and Family Members

On average, it costs $233,610 to raise a child to age 18, according to the U.S. Department of Agriculture. That doesn’t include expenses for grown children, helping them with the purchase of cars or homes, or funding other (expensive) needs that might arise for them.

Furthermore, spending related to the extended family on both sides can also be tricky, especially as your expectations can be very different from your spouse’s when it comes to helping family members out or getting involved with costly family vacations or activities.

Addressing these discretionary expenses and agreeing on them before to committing to children or other family members is critical.

  1. Face and Eliminate Undesirable Debt

Some debt may be necessary or even advisable depending on your tax situation, for instance, some people need or want a mortgage interest write-off. Other debt should be paid off following a plan that you both agree upon—be it credit card, car loan or student loan debt.

In most states, debts brought into a marriage stay with the person who incurred them and are not extended to a spouse, but debts incurred together after marriage are owed by both spouses. Debts incurred individually married are still owed by the individual, with the exception of child care, housing, and food, which are all considered joint debt no matter what.

There are nine states where all debts (and property) are shared after marriage regardless of individual or joint account status. These states include Arizona, California, Nevada, Idaho, Washington, New Mexico, Texas, Louisiana, and Wisconsin. In these states you are not liable for most of your spouse’s debt that was incurred before marriage, but any debt incurred after the wedding is automatically shared—even when applied for individually.

Both partners should have an honest discussion about curtailing bad spending or financial habits. Couples should also employ a strategy to pay off debt—such as paying off the higher-interest debt first or paying off the smallest loans first (the snowball method).

  1. Set a Budget You Can Both Live With

One of the best ways to keep in sync with your partner when it comes to finances is to have a budget as part of your overall financial plan. The budget includes your household bills, your personal spending allowance, your debt-paying strategy, and your monthly budget for long-term goals like retirement.

  1. Communicate Honestly

Lack of communication is the source of many marital issues, and talking regularly, honestly, and without judgment is where the hard work of marriage comes in. Some couples may even find it helpful to actually schedule a time once a month or once a quarter to revisit short- and long-term goals with each other, and meet at least once a year to discuss objectives with their financial advisor.

Don’t talk about things when you’re tired, angry or have had too much to drink—organize and adhere to clearheaded discussions for success. Honest communication can help you both face and conquer the financial challenges of life, changing course and adjusting along the way.

 

If you have any questions, or would like to review your finances together as a couple, call us! You can reach Bulwark Capital Management at 253.509.0395. 

 

Sources:

https://www.investopedia.com/articles/pf/09/marriage-killing-money-issues.asp

https://www.usda.gov/media/blog/2017/01/13/cost-raising-child

https://www.kiplinger.com/personal-finance/602036/a-marriage-starter-plan-for-finances-even-if-youre-late-to-the-party

https://www.marriage.com/advice/finance/how-to-overcome-financial-conflict/#:~:text=Married%20couples%20fighting%20over%20financial,couples%20fail%20to%20do%20so.

 

 

Zach Abraham Featured on Fox News

By | Geopolitical Affairs, In The Headlines, On TV, Social Security

Zach Abraham, Chief Investment Officer and founder of Bulwark Capital Management, recently appeared on Fox News to discuss the recent stock market furor over Reddit retail investors.

Here is a brief summary of some of Zach Abraham’s comments:

Hedge funds have been making money for 20 years by betting on potential stock market losses. Now retail investors—like the recent Reddit investors in GameStop—have the same capability.

Zach encouraged Schwab, TD Ameritrade and the SEC to step away and let the market work itself out. “It will build more faith in the markets,” he said.

 

Watch the segment—Zach starts at 1:53 minutes:

https://www.fox5dc.com/video/894564.amp

Silver Gets the GameStop Treatment: MarketWatch and Morningstar Feature Zach Abraham

By | Geopolitical Affairs, In The Headlines, News, On TV, Stock Market

Silver rallied by as much as 13% on Monday, February 1st to their highest intraday level since 2013, as a buying frenzy attributed to a post on Reddit last week suggesting a short squeeze on the precious and industrial metal continued. Silver futures for March delivery climbed to as high as $30.35 an ounce on Comex.

MarketWatch covered the rally on silver in a story that was also picked up by Morningstar. They spoke with Zach Abraham and several others familiar with what was taking place. Here are Zach’s comments:

 

The moves for the metal are “incredibly unusual — fair to say it’s unprecedented,” Zach Abraham, chief investment officer at Bulwark Capital Management, told MarketWatch.

“But we need to see if it can be done again. Remember, GME [GameStop] was a deeply undervalued and unique situation,” he said.

So far, what’s happened to silver in the last few days is “not even close” to what happened with the Hunt brothers, said Bulwark Capital’s Abraham, referring to the brothers who famously tried to corner the silver market four decades ago. During the Hunt brothers’ accumulation of the silver, prices of silver bullion rose from $11 an ounce in September 1979 to $49.45 an ounce in January 1980.

“In addition, they don’t control anything,” he said, referring to the Reddit crowd. “I think for this reason alone, going after a commodity like silver is futile.”

Still, many analysts had already been touting upbeat prospects for silver even before the Reddit-induced frenzy.

Abraham said his company invested in silver on expectations that a short squeeze in silver would occur, and didn’t take the Reddit WallStreetBets forum into consideration when investing.  

“Silver is still cheap. Not a bad idea to buy some for the long haul,” he said. “Might make sense to buy silver miners as well. Just know both can be extremely volatile.”

He believes that $100 silver prices aren’t out of the question during the next run for the metal. “Silver is horrifically undervalued, on a historical basis, compared to financial assets.”

 

Original article links:

https://www.marketwatch.com/story/silver-gets-the-gamestop-treatment-rallies-by-as-much-as-13-11612203674

https://www.morningstar.com/news/marketwatch/20210201476/silver-gets-the-gamestop-treatment-rallies-by-as-much-as-13

Zach Abraham Speaks Out About Robinhood, Reddit and GameStop

By | In The Headlines, News, On TV, Stock Market

Headlines recently exploded on the topic of hedge funds and stock trading, as a group of day traders on the social media platform called “reddit” drove up stock prices for GameStop, Bed Bath & Beyond, AMC, Nokia and other historically-unloved stocks. GameStop gained as much as 1,000% in just two weeks. The volatile market action resulted in massive losses for some hedge funds.

Brokerages, including Robinhood, Interactive Brokers, TD Ameritrade and others, reacted by restricting users’ ability to trade certain stocks on Thursday amid the extreme volatility.

This caused public outrage, especially toward Robinhood, an online brokerage app named after a folk hero who steals from the rich to give to the poor and whose mission is to “democratize finance for all.”

Zach Abraham Comments

In an article titled, “Critics view Robinhood restricting GameStop trades as ‘an absolute travesty’,” featured on several news sites (including CNBC and MSN), Zach Abraham is featured prominently.

“Robinhood’s decision underscores some people’s belief that the deck is stacked against them,” says Zach Abraham, founder and chief investment officer of Bulwark Capital Management, where he advises retail investors.

Abraham characterizes platforms restricting trades for retail investors as “an absolute travesty,” noting that many of the Redditors’ moves weren’t just some “troll,” but calculated based on their own research. The hedge funds made “bad calls,” he says, and retail investors caught them on it.

“This is only going to perpetuate the wealth gap, and that the rich play by different rules,” says Abraham, whose firm sold its positions in GameStop last week. “If the roles were reversed, nobody would be saying a thing.”

Buyer Beware

At the same time, the situation has morphed into a dangerous game for other retail investors who read into the recent hype but don’t understand the risks involved in trading, Abraham says.

The stocks are currently “way over-priced,” says Abraham. Getting in now on the news-making names of the past few days would be akin to gambling.

“I could not emphasize more clearly for retail investors: Take those names off your screen and look elsewhere,” Abraham says. He predicts GameStop and other stocks will “blow up” in the coming days. “You just don’t want to be messing around with these names today.”

Original story links:
https://www.cnbc.com/2021/01/28/critics-call-robinhood-restricting-gamestop-trades-travesty.html
https://www.msn.com/en-my/money/savingandinvesting/critics-view-robinhood-restricting-gamestop-trades-as-an-absolute-travesty/ar-BB1dbINe

 

Watch Zach’s Appearance on Cheddar, a video news website covering Wall Street issues:

“In our view, they’re delivering a shot of democracy to the markets.” – Zach Abraham

The Inauguration’s Effect on the Stock Market: Zach Abraham Featured in Newsweek

By | Geopolitical Affairs, In The Headlines, Investments, On TV

In an article published on January 19th, 2021 in Newsweek, “Stock Market on Best Election Day to Inauguration Run Since World War II,” Bulwark Capital Management Chief Investment Officer, Zach Abraham, gave his insights into the Biden presidency along with the Federal Reserve’s policies and their potential future effect on the stock market.

He was featured along with analysts from Goldman Sachs, the chief investment strategist at CFRA in New York, and the U.S. Chief Economist at S&P Global Ratings.

Here are Zach’s comments:

“I think the stock market will continue to go higher, perhaps much higher.”

“The only two times we’ve had valuations anywhere close to this were in 1929, when the markets dropped 85% over the next two years, and 1999, when the Nasdaq dropped 85% over the next two years,” he said. “I don’t think a selloff that dramatic is going to happen again because of the underwriting by the Fed and the US government.”

Last year, the Fed’s action and stimulus spending approved by Congress injected about $8 trillion into the economy,” Abraham said. “The amount of cash that’s been poured into this market is mind-boggling.”

But to be clear, it’s the Fed that’s driving the market, he said.

“If the Fed continues to do that, stocks will keep going up. If it stops doing that, they won’t,” Abraham said. ” All that money injected into the system last year had to go somewhere. Part of it ran headlong into a stock mania that had been 13 years in the making, since the financial crisis of 2007-2008. It’s just gone ballistic.”

Read the full article here:

https://www.newsweek.com/stock-market-best-election-day-inauguration-run-since-world-war-ii-1562707