If you’re a business owner in Carmel, Indiana, you have already accepted that the financial decisions of companies always come with some degree of risk. It’s the same in the investment world, where understanding risk should be part of a sound financial education. Wealth managers in Carmel and everywhere should be taking many types of risk into account for their clients. The uncertain future value of stocks, credit risks, and operational risks all fall into this category.
A proper risk management strategy executes an articulated and structured approach to identifying, assessing and managing risk. Frequent updates and review of the assessment based on new developments or actions taken should also be implemented into the overall risk management strategy. Be sure that your risk assessment is systematic, recorded and regularly reviewed. It should identify and manage major risks, i.e., those which are most likely to occur that would have a severe impact on operational performance, achievement and objectives.
Talk to your advisor about a sound risk management strategy for your business. You can also visit us at www.midwest-wealth.com . Because when it comes to wealth creation, safeguarding against financial risk is an important conversation best reserved for your wealth manager.
As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.
Most have by now heard about the phenomenon that has people of all ages walking around outside, visiting parks, famous museums while staring at their phone the entire time. The Pokémon GO craze has provided a scare for parents of younger children with stories of attempted robberies, accidents and injuries. There has also been no shortage of entertaining and comical stories circulating their way from the internet to News stations. This game is not just being played by privileged children with smart phones, an incredible 40% of its current users are over the age of 35.
The number of active users for this game skyrocketed from its initial launch in the US, Australia and New Zealand, with over 20 million daily active users (more than Twitter.) That success was parlayed to the launch in Japan, with major companies like McDonalds making deals to feature its stores (3,000 total) as stops or “gyms” in the game. Even in the United States, small businesses have been benefiting from the popularity of the game. A New York pizzeria owner spent $10 to help lure more players to his location, resulting in a 75% sales increase over the weekend.
With the millions of downloads, corporate sponsors, high daily active users and an incredible demographic reach, who is making the money here? This question has been asked very frequently and most believed the best way to make money was go and buy shares of Nintendo (NTDOY.)
The relationship to get to Pokémon Go’s derivative effect is much more complicated than a basic relationship with Nintendo. Below you can which companies are currently involved:
For every $100 spent on Pokémon-Go in-app purchases
$30 – Apple or Alphabet (iPhone vs. Android app store)
$30 – Niantic (Which Alphabet owns an undisclosed % of)
$30 – Pokémon Franchise
$10 – Nintendo
Nintendo (NTDOY): Owning 33% of the company that owns the Pokémon brand and its IP, shares of Nintendo initially soared - rising over 110% in the first 8 trading days. As analysts began to dig deeper into the potential impact and after Nintendo themselves said the results were unlikely to change guidance for corporate earnings, shares began to retreat roughly 33%.
Alphabet (GOOG): During Google’s restructure to Alphabet, one of the companies that spun from that was Niantic. Alphabet participated in its $30 million funding round, immediately following the spinoff.
Niantic: Originally a pipe dream by one of the key figures behind Google Maps and Earth, it was originally formed to be a 3-D mapping company. They are responsible for the development of the actual game and pay the bills for servers being used. It is estimated to be generating $4-5 million per day in total revenue and $1.6 million in daily revenue just from in-app purchases. With the $9 billion increase in Nintendo’s market cap since the games release, it is safe to assume the Niantic’s own valuation has gone up significantly since its prior two rounds of funding which valued the company at just $150 million.
Apple (AAPL): One of the biggest direct participants of the games success is Apple. They take an estimated 30% of profits from every dollar spent on its platform and in-app purchases.
Cutting the financial cord with adult children can be a very hard thing to do, and most people put in this situation don’t have a good answer on how to make the situation better. Even though they are helping their adult children by offering loans, giving cash or paying bills, this generosity can blows a big hole in their finances, even jeopardizing their retirement. A July 2014 survey by the Boston nonprofit American Consumer Credit Counseling found that a higher proportion of U.S. households (1 in 3) provide financial assistance to adult children than support for elderly parents (1 in 5). “
This is putting a huge wrench into retirement savings,” says Pamela Villarreal, a senior fellow with the National Center for Policy Analysis in Dallas. “The more boomers put out for adult kids, the less they can put aside for themselves.” As a result, some older adults are going back to work, reducing their own living expenses or even declaring bankruptcy.
What can help for parents who want to help out their adult children is to determine if the money that they are giving is going to fix the problem or merely delaying the inevitable. “Loaning money works well,’ says Kathleen Gurney, who runs the Financial Psychology Corporation, “If the process is objective and well planned.”
Here's a look at three ways parents can financially assist their children in the area of home ownership:
Gifting a down payment. This allows a borrower to use money that has been gifted as a down payment. A married couple can each give $14,000 to a child and the child’s spouse, for a maximum of $56,000 in four separate gift checks.
Offering a family loan. Giving a loan to a family member is a winning combination, as the parents would get more interest from the loan then they would from a typical Certificate of Deposit, and the child would be able to get a lower interest rate then they would from a bank. Also a borrower whose offer is not contingent on obtaining financing could realistically offer the seller a quicker closing, which could be a huge advantage in such a competitive sellers’ market.
Cosigning the mortgage. If an adult child's income is too low to qualify for a mortgage on the home they want, a parent can cosign on the mortgage. One thing to remember however, is that this will show up on your credit as an outstanding obligation, which could complicate matters if the cosigner wanted to refinance or buy another home.
Helping grown children with financial obstacles can be a very positive thing in the right circumstances. Take to your financial advisor before you commit to any major or long term financial lending situation to make sure you can comfortably afford to help without jeopardizing your financial security. If you don’t have a financial advisor and would like more information, Midwest Wealth Management can help. Visit us at www.midwest-wealth.com, or call 317-288-4989.
While the May index showed a 4.8-point decline from April and has been on the decline for five straight months, its worst performance since the recession – things quickly began to look up as America’s job market stirred to life in June.
Payroll growth accelerated by the most since October, appeasing companies fears of making broader cutbacks. Climbing by 287,000, this growth exceeded the highest estimate in a Bloomberg survey, after a revised 11,000 gain in May shown in a recent Labor Department report.
Indeed, the labor market is showing its resilience, especially given the global turbulence from the combination of dropping oil prices, a stronger dollar and China’s growth slipping to a new seven-year low of 6.6%. Added to this, workers are enjoying a higher rate of pay increases in recent months, which is a bright spot in regards to consumer spending:
“Consumer spending will continue to lead economic growth in 2016 as more jobs and rising wages give households more money to spend,” said Stuart Hoffman, chief economist at PNC Financial Services Group.
And this pattern of consumer spending seems to have gained momentum, as recent forecasts suggest the economy expanded at an annual rate of 2.5 to 3 percent during the second quarter, up from just 0.8 percent at the start of the year.
Of course, rising jobs or not, their availability can be a challenge depending on where you live. Here’s a peek at the ratios of job postings vs. unemployed persons in a few of the 50 most populous metropolitan areas in the U.S.:
San Jose, CA 4:1 ratio of postings vs. unemployed
Denver, CO 3:1 ratio of postings vs. unemployed
Austin, TX 3:1 ratio of postings vs. unemployed
Richmond, VA 3:1 ratio of postings vs. unemployed
Minneapolis, MN 2:1 ratio of postings vs. unemployed
Indianapolis, IN 1:1 ratio of postings vs. unemployed
Orlando, FL 1:1 ratio of postings vs. unemployed
While the jury is still out, the fact that we’ve seen job market growth and increased consumer spending is a positive sign and one we’ll watch for continued stirrings.
If you have any questions on how you can successfully plan a wealth accumulation strategy in any market condition, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 877-243-4132.
Stilwell, Victoria. Payrolls in U.S. Rose 287,000 in June, Most in Eight Months. Bloomberg. 8, July 2016.
Mui, Ylan Q. America’s jobs market has had a great 2016. Will it last? The Washington Post. 2, June. 2016.
Fox, Justin. This Job Market Slump Started a While Ago. Bloomberg. 6, June. 2016.
Indeed. Job Market Competition. 2016 Rankings. Based on preliminary June 2016 employment data. Bureau of Labor Statistics. U.S. Department of Labor. 29, June 2016.