A big reason that so many New Year’s resolutions and goals fail this time of year is that they weren’t clear and actionable. In other cases, some folks get so caught up in the positivity of a new year that they set too many targets that aren’t important enough to follow through on.
If you’ve lost sight of your annual objectives, take a moment to refocus and reassess the goal you were so excited to achieve at the beginning of the year. Did you aim too high at something you can’t realistically accomplish? Did you aim so low that you aren’t really motivated anymore? Are external events such as financial market fluctuations and COVID-19 clouding your perspective on what you can and cannot do?
When so many things feel beyond our control, it’s important to refocus on what you can control and plan for uncertainty. Use your recalibrated expectations for 2021 to home in on one or two goals that will make this year a success.
Make a microplan.
So, you’ve decided this is the year you’re going to start saving for a new home, in anticipation of a big 2022 move? That’s a good goal! But what you don’t have yet is an actionable plan. If you just tell yourself, “I’m going to spend less every month and put more into a dedicated savings account,” it’s likely you won’t be happy with that account balance at the end of the year.
Microplanning is a strategy that can help you break down annual goals into actionable short-term steps.
Let’s say your dream house is $400,000. A typical down payment for a new house is around 6%. Assuming you can cover mortgage payments, your big Annual Goal is to have an extra $24,000 saved by December.
That breaks down to a Monthly Goal of $2,000 saved for your new house. Where is that $2,000 going to come from? A pay raise from a new job? Cutting some monthly budget items?
Once you’ve adjusted your monthly budget and cash flow, you can set a Weekly Goal that will help you hit that Monthly Goal. How much extra money can you save if you only carry out dinner once per week? Could planning meals in advance reduce your weekly grocery bill?
Finally, dig a little deeper and think about some Daily Goals that will flow upstream to your bigger goals. Do you really need that shiny item that’s the Daily Steal on your favorite shopping site? If not, swipe over to your banking app and make an extra deposit into your savings account instead.
Anticipate problems and solutions.
Now that you have a vision for what you want to happen, make a list of some things that could slow your progress towards your big goal, and how you might be able to clear those speedbumps.
Will your annual savings goal be able to sustain a sudden financial emergency, such as an auto repair?
If a COVID-19 spike makes you nervous about going to your local gym, do you have an at-home regimen that will keep you on track for your fitness goals?
If the pandemic has slowed by summer, increased demand for travel could drive up costs. Should you increase your family vacation budget as a contingency?
This trick to make the most of every IQ point is just as useful in 2021 as it was in 1721.
A new crop of productivity hacks and tools arrive nearly every week, but the best performance-boosting tricks aren’t newfangled. Instead, they are usually principles that have stood the test of time. Ben Franklin’s best bit of intelligence-boosting advice is a perfect case in point.
In his autobiography, Franklin describes his relationship with his brother James, who employed him for a time when Franklin was a young man: “We sometimes disputed, and very fond we were of Argument, & very desirous of confuting one another.”
Franklin, in other words, was the 18th century equivalent of your loudmouth friend who has an opinion on everything and isn’t shy of sharing his views. That is until he came across some examples of Socratic dialogue, a technique ancient philosophers used to uncover truth by way of a series of probing questions.
“I was charm’d with it, adopted it, dropt my abrupt Contradiction, and positive Argumentation, and put on the humble Enquirer & Doubter,” Franklin wrote.
The technique made such an impact on the founding father, Canada notes, that he “eventually changed his entire manner of discourse, communicating ‘in terms of modest Diffidence’ instead of positive assertion, dropping words such as ‘certainly’ and ‘undoubtedly’ and substituting ‘I should think it so or so’ and ‘it is so, if I am not mistaken.'”
All of which makes for a charming story of a young man’s introduction to wisdom, but what does it have to do with us living a few centuries later? Adopting a tone of greater intellectual humility didn’t just make Franklin more pleasant company, it also made him effectively much smarter.
“If you wish information and improvement from the knowledge of others,” Franklin observed, “and yet at the same time express yourself as firmly fix’d in your present opinions, modest, sensible men, who do not love disputation, will probably leave you undisturbed in the possession of your error.” Or to put that in modern terms: If you want to get smarter, you first have to be willing to admit you might be wrong.
It’s a quick (if sometimes ego-bruising) shift in attitude that functionally raises your IQ. And it works just as well in 2021 as it did in 1721. Just ask Jeff Bezos.
Like Franklin, Bezos understands the smartest people are those who are able to put curiosity and pragmatism above ego and listen to new evidence and opposing opinions with an open mind. If you can do that, the rate of improvement of your ideas and mental models of the world shoots up dramatically. And that means you make the most of whatever mental horsepower nature equipped you with.
Or, as Franklin once reminded members of the Junto, a kind of debate club he founded in 1727, the point of discussion isn’t victory. It’s knowledge. Remind yourself you’re chasing truth and not burnishing your ego or defending your viewpoint every time you start a conversation, crack a book, or open another browser tab, and you’re pretty much guaranteed to instantly make yourself a little bit smarter.
Many folks are feeling as much anxiety about the end of this contentious presidential election as they were feeling during the long months of campaigning. It’s impossible to predict with 100% accuracy what a new president and a new Congress are going to do. That feeling of uncertainty can send out ripples through our financial and political systems until we get a clearer picture of the agenda for the next four years.
As important as elections are, we believe that a solid financial plan gives you the tools to keep improving your Return on Life no matter what’s happening with our nation’s politics. Instead of fretting about what may or may not happen starting in January, try to focus on these three areas of your life that will help you control major transitions.
You can’t control the economy … but you can control your career.
Elections sometimes spark short-term volatility in the financial markets. But the economy is bigger than any one president, especially while Covid-19 continues to change everyday life and global business.
As companies continue to adapt to the pandemic landscape, job opportunities are becoming less centralized and more diverse. You might be able to take your dream job on the other side of the country without leaving the home your family loves. Or you might spot an emerging market in the middle of all this displacement where you can open your own company.
You can’t control taxes … but you can control your saving and spending.
Presidential candidates talk a lot about their tax plans on the campaign trail. The need for Congress’ cooperation to put that plan into action usually isn’t discussed quite as much.
Whether your preferred candidate won or lost, there’s no guarantee that your taxes are going up or down. But you can anticipate when your kids will be going to college, if you’ll need to replace the family car soon, or if you want to move to a beachfront condo when you retire.
Your tax rates will play a role in handling these transitions. But your levels of saving and spending have a bigger impact on your financial plan than any other factor. If you’ve never kept a monthly budget before, make 2021 the year that you start. Sit down with your spouse and weed out all those recurring subscriptions and memberships you’re not using. Make a weekly meal plan so you’re not eating out so often. The couple hundred dollars you economize every month could grow into a comfortable padding for your nest egg over time.
You can’t control who’s president … but you can take control of your financial plan.
Per the clamor on social media, was this really “the most important election of our lifetimes?” It could be decades before we have enough perspective to judge. But as far as your financial planning goes, here’s another way to think about presidents:
A 67-year-old baby boomer eyeing retirement might have taken her first part-time job when Lyndon Johnson was president. As of 2020, that senior has lived and worked through ten different presidents.
It’s very doubtful that you’re going to love every single president who serves during your career. Yes, certain things that each one does might move the needle on your retirement accounts in the short term. But it’s folks who stick to their plans and continue to save and invest regardless of what’s happening in the outside world who build long-term wealth.
Millions of people dream of becoming entrepreneurs, but they never take that all-important first step. Too many things get in the way of their pursuit of business ownership, or they keep convincing themselves that their dream isn’t realistic.
If you ever want to move past this phase and found your own business, you need to acknowledge the specific obstacles that are holding you back and work to resolve them. Here are seven of the most common challenges that may be standing between you and your entrepreneurial dreams—and ways you can kick them to the curb.
1. Financial limitations
Launching a business takes money, and most people don’t have ample cash to throw at a startup. There are several options here. First off, you could begin saving now for the funds to establish your business. If you shop for a better mortgage and reduce your house payments by refinancing, you can sock the savings away in your startup fund. You can trim costs in other areas to put away a few hundred dollars each month or save even more by picking up a side gig.
Barring that, you can secure funding in a variety of ways, such as borrowing from friends and family, crowdfunding, seeking loans and grants or even working with angel investors and venture capitalists. There’s always a way forward.
Becoming a successful entrepreneur typically demands experience; you need to understand your industry and business management in general if you want to earn a living from your venture. When you have limited experience, you may be reluctant to move forward, and understandably so.
You can make up for this, however, by actively seeking the experience you lack. Take an online course to gain a grasp of business management basics. Strive for a leadership position with your current employer so you’ll acquire strategic planning and people management skills. Work with a mentor or shadow an entrepreneur you admire.
3. No standout idea
You can’t build a business if you don’t have a promising idea for a product or service you can sell. Without a solid business plan, you won’t be able to convince investors or partners to join you—and you won’t even know where to begin. Unfortunately, this is one of the least “fudgeable” obstacles on this list. Without a good idea, you can’t start a business, period.
Luckily, there are ways to stimulate better idea generation, such as talking to a broad range of people, reading entrepreneurial content and taking a more robust approach to brainstorming. Techniques like mind mapping and word banking can get your creative juices flowing.
4. Current responsibilities
Some people avoid starting a business because of existing responsibilities or constraints on their time. Their current full-time job, their status as a parent or other personal responsibilities hold them back from their entrepreneurial ambitions.
Here the best approach is to determine how much of an impact these responsibilities have and consider ways to delegate or remove them. Could you realistically quit your day job, for example, or hire someone to help with household duties or childcare?
5. Fear of failure
Lack of confidence is an entrepreneurship killer. It’s true that the failure rate for new businesses is relatively high, with half of new companies failing within five years. To buck those odds, you’ll need a healthy dose of confidence in yourself and your idea.
The only solution to a fear of failure is to change your mindset. You have to see failure as an opportunity for learning and growth and stop seeing it as the end of the road, an indictment of your abilities or a stain on your character. Reading accounts by successful entrepreneurs will inspire you to see the possibilities rather than focusing only on the risks.
6. Aversion to stress or hard work
Starting and running a business demands a lot of effort. You’ll likely be putting in long hours and dealing with stressful issues. On top of that, your first few years are apt to be highly inconsistent, with your business only making a profit some of the time. This can wreak havoc on your finances and peace of mind. If you’re not feeling up to this kind of pressure, or if you’re loath to work more than 40 hours a week, entrepreneurship may not be for you.
Again, the only way around this obstacle is to change your attitude. Remember that all this hard work will be in service to yourself, not an employer. While the risks are on you, so are the rewards.
7. Poor timing
One of the most common excuses you’ll hear (or hear yourself saying) is that it’s “just not the right time” to start a business. The truth is, there’s never a truly “right” time—you can always find some reason that today, or this month or this year isn’t ideal for launching your venture.
But like beginning a diet on a Wednesday or joining a gym in February, the trick is to make your own right time. Microsoft was born during the oil crisis of the 1970s, while Airbnb and Uber were founded in the depths of the Great Recession. Remind yourself that the success of your business will depend not on “the times” but on you.
The Realities of Entrepreneurship
It’s true that anyone can become an entrepreneur with enough grit and persistence. Most entrepreneurs with solid ideas have a good chance of becoming successful if they remain adaptable. But it’s also important to realize that not everyone is cut out for entrepreneurship.
If you’re intimidated by the stress, inconsistency and long hours associated with startup life, or if you truly love your day job and you’re afraid to leave, maybe business ownership isn’t right for you. That said, if you feel the pull of entrepreneurship but keep making excuses to avoid getting started, you owe it to yourself to challenge those excuses and try to move past them.
This article was written by Serenity Gibbons and published on Forbes.com.
There are many reasons why people who could retire are hesitant to do so. Some people think they need to wait until they’re 65 or older. Some are worried about running out of money. Many parents want to keep supporting their children through some major life transition, like college, marriage, or buying a first home.
Maybe the most common reason we see for a retirement delay is folks who just can’t imagine their lives without work. That’s understandable. A routine that’s sustained you and your family for 30 or 40 years can be a hard routine to shake.
But retirement doesn’t have to be all or nothing right away. If just thinking about retiring makes you jittery, use these tips to ease into retirement a little at a time.
1. Talk to your family.
Clear, open communication is an essential first step to approaching retirement. Be as honest as possible about what you’re feeling. What worries you about retirement? Does the idea excite you? What do you envision your days being like? Where do you want to live? What does your spouse want retirement life to be like?
2. Talk to your employer.
Many companies have established programs to help longtime employees transition into retirement. You might be able to trim back your hours gradually to get an idea of what days without working will be like. You’re also going to want to double-check how any retirement benefits you may have are going to work. Discuss any large outstanding projects with your supervisor. Make a plan to finish what’s important to you so that you can leave your job feeling accomplished.
Self-employed? Give your favorite employee (you) less hours and fewer clients! Update your succession plan and start giving the soon-to-be CEO more of your responsibilities. Make sure you have the absolute best people working for you in key leadership positions so that your company can keep prospering without your daily involvement.
3. Make a “rough draft” of your retirement schedule.
What are you passionate about? What are some hobbies you’d like to develop into a skilled craft? Do you want to get serious about working the kinks out of your golf swing? Are there household projects, repairs, or upgrades you want to tend to? A crazy idea you kicked around at work you’d like to build into a new company? A part-time job or volunteer position you’d like to take at an organization that’s important to you? New things you want to try? New places you want to visit? Grandkids you want to see more often?
Try filling out a calendar with some of your answers to these questions. As you start to scale back your work hours, take a few lessons or volunteer shifts. Sign up for a class. Leave town for a long weekend. See what appeals to you and what doesn’t.
Remember, you don’t have to get your schedule right the first time! A successful retirement will involve some trial and error. Learn from things you don’t like and make a point to spend more time doing the things you do like.
4. Review your finances.
This is where we come in!
Once you and your spouse have settled on a shared vision for retirement, we can help you create a financial plan to help ensure you are financially fit for (semi)-retirement. We’ll go through all of your sources of income, retirement accounts, pensions, savings, and other investments to lay out a projection of where your money is coming from and where it’s going.
We can coordinate all aspects of your situation and collaborate with you on the best course of action. You don’t have to face retirement alone and make big decisions without expert guidance.
Coming in and talking to us about your retirement is a great “Step 1” option as well. So if you are dreaming of those days when work is optional, give us a call and we can help you through this phase of life.
You will never control everything that happens, but you can always control how you respond.
One day in 1984, Richard Branson sat in a Puerto Rico airport, eager to board his American Airlines flight to the British Virgin Islands.
Then American canceled the flight.
Frustrated, the 28-year-old Branson went to the back of the airport and used a credit card to hire a plane. He borrowed a blackboard, wrote, “Virgin Airlines: One way to the Virgin Islands, $39,” walked around the airport…and managed to fill the plane.
When the flight landed in the Virgin Islands, a passenger said, “Sharpen up the service a bit and you can be in the airline business.” The next day Branson called Boeing to ask if they had any used 747s for sale. Starting an airline hadn’t been on Branson’s radar until he was “lucky” that his flight got canceled.
Article continues after video.FEATURED VIDEO
Hold that thought.
Research shows that traits like passion, mental toughness, constant learning, and a willingness to take risks do lead to greater success. Hard work tends to be rewarded. Perseverance is often the difference between success and failure; give up, and failure is guaranteed. Intelligent risks do, at times, pay off. And if they don’t, what you learn from new experiences makes success more likely the next time.
When you outwork, outthink, out-skill, and outlast other people, you’re much more likely to be successful.
The Serendipity Mindset.
Research shows that luck also plays a part. Success is based on factors you can’t control: Being at the right place at the right time. Meeting the right person at the right time. Experiencing something you weren’t necessarily looking for.
As Busch writes, “Unforeseen events, chance meetings and bizarre coincidences aren’t just minor distractions or specks of grit in our well-oiled lives. The unexpected is often the critical factor–it’s often the force that makes the greatest difference in our lives.”
For Branson, that meant hiring a plane, and financing the cost by selling tickets to other passengers–instead of waiting for a flight the next day. And then realizing that he could create a better airline than the incumbent brands.
For Steve Jobs, that meant recognizing that his relationship with Steve Wozniak could lead to more than a shared appreciation of electronics and playing pranks. For Stephen Hawking, that meant seizing the “opportunity” his disability provided to avoid teaching, lecturing, and attending committee meetings, and instead devote himself fully to research.
Which is why, according to Busch, “Cultivating serendipity is first and foremost about looking at the world with open eyes and seeing opportunities others don’t. It’s not just about being in the right place at the right time and having something happen to us (blind luck), but rather a process in which we can be actively involved.”
How can you develop a serendipity mindset?
Meet more people. Try more things. When things don’t go according to plan, don’t take a step back. Step forward. Embrace what feels like chaos and see where it leads.
Have a goal, have a plan. And then be willing to maneuver. What seems like the wrong place might actually be the right place. What seems like a chance meeting might be the start of an important partnership or collaboration.
What seems like bad luck might cause you to stumble on an idea, a market, a new business….
As long as you’re open to the possibility.
This article was written for Inc.com by Jeff Haden.
Wall Street firms famously love to hire renowned CEOs, ex-presidents, retired generals and famous coaches to give inspirational talks to senior management and rank-and-file employees. As a philanthropist and the co-founder of The Carlyle Group—one of the world’s largest private equity firms with $221 billion in assets under management, David Rubenstein has attended his share of these events only to find some of the speakers “not the most scintillating.”
Based on dozens of interviews he has conducted with chief executives, politicians, thought leaders and industry trailblazers in the past five years, Rubenstein wants readers to see the full spectrum of assets and liabilities in leaders, including Bill Gates, Jeff Bezos, Tim Cook, former U.S. Presidents Bill Clinton and George W. Bush, Justice Ruth Bader Ginsberg, and Oprah, who inspired Rubenstein to be a better listener. “Hopefully, you’ll have better leadership out of all this,” he says, aiming to inspire younger generations to be leaders themselves.
“I’m getting up there in years and what is going to be one of the legacies I can leave to people and my children? Maybe I can have a couple of books,” says the private equity billionaire, who published his first collection of interviews, The American Story, last year. An insatiable reader who reads “six newspapers a day, at least a dozen weekly periodicals, and at least one book a week,” Rubenstein believes that a lifetime of curiosity is essential for a good leader.
For those hoping to fast-track their way to the top, there is no shortcut to becoming a leader, Rubenstein says. Reflecting on his 2017 interview with Nike cofounder Phil Knight, he writes that Knight’s original vision to start an athletic shoe company was hardly the only factor in his success. It was also Knight’s willingness “to put in the long hours—and to suffer the occasional failures and crises—to make this vision a reality, and in recent years to turn the operation over to experienced managers who could further build the company.”
In addition to the interviews, Rubenstein also lists twelve pillars for being a good leader: luck, desire to succeed, pursuit of uniqueness, hard work, focus, persistence, persuasion, humility, credit-sharing, ability to keep learning, integrity, and failure. (Rubenstein, who is worth $3.2 billion, admits that his biggest business mistake was selling Carlyle’s $80 million investment in Amazon shortly after its IPO in 1996. He says that stake would now be worth about $4 billion.).
Finances aside, 2020 has been a devastating year for billions around the world who have turned to leaders—in politics, business, sports, and entertainment—for clarity and hope. Rubenstein believes those who understand humility and rise to the occasion will be the ones remembered for their actions, such as late congressman and civil rights leader John Lewis and Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases.
“Tony Fauci is in a league by himself,” Rubenstein says. “He’s been swatted down by lots of people, and some people criticize him for lots of reasons, but he’s stayed in the arena and he’s fought for what he believes are really, really good principles.”
Another leader who has had to step up in 2020 and was interviewed by Rubenstein last year is NBA commissioner Adam Silver. “Who would not be upset when people are getting shot in the back or are killed for no reason that seems apparent to anybody?” Rubenstein says of the league-wide strike following the shooting of Jacob Blake in Kenosha, Wisconsin. “I think the world has recognized that you can’t ignore the protests of players just because they’re athletes. Now, everybody realizes it’s probably a mistake to do what [the NFL] did in terms of not letting [Colin Kaepernick] come play again.”
One name that didn’t make the cut for Rubenstein’s new collection is Donald Trump. “I did interview President Trump before he was the president at the Economic Club of Washington, and that’s where he told me he was going to run for president,” says Rubenstein who thought the interview was too dated to be included in the book. “I was surprised. I didn’t really believe he was going to do it. And I didn’t think he could pull it off. He did.”
Unlike Trump, the Washington, D.C-based Rubenstein doesn’t imagine himself in the political arena anytime soon. “I’m still a youngster by the standards for people running for president so maybe I’m a little bit too young to run right now,” the 71-year-old investor says. (Trump is 74 years old and Biden is 77.) “But to be very serious, I think there are a lot of people who are probably younger, and probably would do a better job than I would do.” Hopeful about the near future, he says the country will have a fresh start in 2021 following a Covid-19 vaccine and the elections.
Recalling a recent conversation he had with Shark Tank judge and billionaire Mark Cuban, Rubenstein says he expects people are going to create great companies post Covid-19—those who prioritize diversity and inclusion, philanthropy, and social impact as well as profits. “If you’re ever thinking of doing something entrepreneurial,” Rubenstein says, “do it sooner rather than later.”
This article was written by Deniz Cam for Forbes.com
Navigating Life’s Transitions By Rewriting Your Story
Your plans for the future are really a story that you tell yourself. Some of the chapters are easy to imagine and plan, like buying your first home, sending your kids to college, or picking out dream retirement destinations with your spouse. But life has a way of throwing unexpected plot twists at you, such as, say, a global pandemic that upends how you live and work. If you feel like your story has lost some of its most important plot threads, use this three-step method to find a new happy ending and navigate life’s transitions.
An unexpected job loss. The death of a loved one. Losing your home in a fire. A major illness.
Life is never the same after you experience these kinds of unexpected transitions. Your lifestyle might change. Perhaps your relationships might change. Your daily routine might change. And your long-term personal, professional, and financial goals might have to change as well.
Letting in feelings like sadness, embarrassment, and fear can be very challenging. If you’re having trouble expressing yourself to your spouse or another confidant, try journaling. Getting your thoughts and emotions down on paper can help open you up for the conversations you’re going to need to have as you navigate through this new transition.
Now that you’ve accepted this change in your life, you need to figure out how you’re going to adapt to it. Big transitions often feel so overwhelming that they can be paralyzing. Where do you start?
Start with today.
Break the new transition down into smaller parts. What is one thing on your list that you can accomplish today and that you can build on tomorrow? If your doctor says you have to start eating better, make a new shopping list. Need to exercise more? Buy a pair of running shoes. Brush up your resume so you can start a job hunt. Register for an online class that will help you make a career change. If it’s time to tighten the family belt, cancel that streaming subscription you never use.
Racking up smaller daily wins will make this new transition feel a little more manageable every single day. You might also create some new habits that will make you healthier, happier, and more productive.
In the moment, unexpected transitions can feel like an end. But as you gain personal momentum from your new routine, you’ll start to see that there are opportunities ahead of you as well. And when you finally close this chapter, you can start writing a new one.
Some of the details in this revised chapter might be a little different than you imagined before. But not all change is bad. Maybe, instead of retiring to that beachfront condo, you remodel the family home and have your grandkids over more often. If you have to hang up your tennis racket, taking long walks with your spouse could be a new way to exercise, unwind, and spend time together. Now that one phase of your career is over, it might be time to promote yourself to CEO of your own company.
If you’re really struggling to see a way through an unexpected transition, here’s an easy daily win to get you started: get in touch with us. We can review your $Lifeline in-person or over a video chat to figure out if any of your anticipated transitions need to be edited. We can also coordinate with other professionals like your attorney or accountant to iron out any other major adjustments you might need to make.
Apple hit a new milestone on Wednesday, becoming the first publicly traded U.S. company to reach a market capitalization of over $2 trillion and doubling in valuation over the last two years.
The iPhone maker’s stock is up almost 55% so far in 2020, and shares have rallied more than 106% since the market hit a low point amid the coronavirus recession on March 23 (compared to the benchmark S&P 500’s gain of 51% over that period).
Now trading at nearly $470 per share, Apple’s stock is at an all-time high, and Wall Street analysts are still quite bullish that it can continue to rally: 61% give it a “buy” rating and 27% a “hold” rating, according to Bloomberg data.
Apple’s market cap now eclipses that of other U.S. tech giants, including Microsoft ($1.7 trillion), Amazon ($1.6 trillion), Google parent Alphabet ($1.1 trillion) and Facebook ($761 billion).
Apple was also the first U.S. company to reach a $1 trillion market cap, which it did just over two years ago, on August 2, 2018.
On July 31, 2020, after reporting strong third-quarter earnings, Apple surpassed Saudi state oil giant Aramco to become the world’s most valuable publicly traded company.
At $2 trillion, Apple’s market value is now higher than the GDP of numerous developed countries, including Italy, Brazil, Canada, Russia and South Korea, to name a few.
WHAT TO WATCH FOR
Apple shares are about to get more affordable for investors, too. The company will finalize its four-for-one stock split at the end of August, which means a single share will be worth around $117. While the value of the company will remain the same, there will now be more shares available trading at lower prices.
Apple has thrived during the pandemic, as many people were forced to stay at home. The company has benefited from work-from-home trends and strong online sales; It posted record third-quarter earnings in late July, with nearly $60 billion in revenue, not to mention double-digit growth in its products and services segments.
With prior stimulus measures set to expire in the next few weeks and the economy continuing to falter as the pandemic resurges across the country, Congress will meet this week and next to hammer out a new relief measure.
The House already passed its Phase 4 bill, known as the Heroes Act, in May. The $3.5 trillion coronavirus relief bill would provide assistance to state and local governments, extend enhanced unemployment benefits, and offer additional economic impact payments to taxpayers, among other things. The bill has been up for review since the end of May, though Senate Republicans, who prefer a measure with a far lower price tag, have been loath to consider it. They’re expected to introduce their own version of a relief bill this week that will have to be reviewed and negotiated between the two chambers before theyrecess in early August.
Several economic proposals that will affect small and midsize businesses have been building consensus among lawmakers for weeks, so the final version of the Senate bill could contain elements of all of them.
Here are six things you likely can expect from the Phase 4 bill.
1. The PPP will go on, but in a different form.
The Paycheck Protection Program, the $669 billion forgivable loan program aimed at beleaguered small businesses, will continue, predicts Neil Bradley, the U.S. Chamber of Commerce’s executive vice president and chief policy officer. At the very least, he says, there will be a continuation of the program, which was recently extended through August 8.
It’s also possible the PPP will become more targeted. Testifying at a House Small Business Committee hearing Friday, Treasury Secretary Steven Mnuchin expressed interest in “topping off” the approximately $130 billion in remaining funds and extending the program. But he noted that it would need to be focused on certain industries like hotels and restaurants that can demonstrate actual losses, resulting from the pandemic. “This time we need to do a revenue test,” he said.
There’s been widening support for streamlining the PPP forgiveness process, too. While certain loans are now eligible for the EZ loan forgiveness application, there’s greater interest in easing things further for smaller businesses by automatically forgiving all PPP loans under $150,000 or $250,000. On that note, Mnuchin at Friday’s Small Business Committee meeting confirmed interest in blanket forgiveness. “Yes, that’s something we should consider,” he told lawmakers.
2. Local communities will get a boost.
The next iteration of relief funding likely also will focus on companies in low-income and rural areas, as well as minority-owned businesses, which experienced difficulty accessing the PPP. Bradley notes that the Recharge and Empower Local Innovation and Entrepreneurs Fund (RELIEF) for Main Street Actwould earmark $50 billion for cities, counties, and states to support small business local relief funds. One of the key flaws of the PPP is that it failed to reach the smallest businesses and minority-owned companies that often did not have traditional banking relationships prior to the pandemic. As this program would be run through local institutions–and not banks–the effort is seen as potentially better suited to reach these businesses. While the U.S. Treasury would operate the program, as written in the bipartisan bill introduced in the Senate in mid-May, banks would not be involved.
Funding for block grants, operated by states and local governments, could also get replenished. The Cares Act initially provided $150 billion in federal aid to state and local governments across the country, some of which went toward grant funding for local business.
3. More tax relief is on the way.
Currently, PPP funds don’t count as taxable income, but an Internal Revenue Service ruling prevented businesses from being able to deduct traditional business expenses paid for by those funds if forgiven. That may change soon. A bill that would allow the deduction with some guardrails, called the Small Business Expense Protection Act, was introduced in the Senate in early May.
The Phase 4 bill also is expected to bolster and expand access the Employee Retention Tax Credit (ERTC), says Bradley. Currently, companies that have tapped the PPP can’t access the ERTC, which was enacted as part of the Cares Act to incentivize businesses hurt by the Covid-19 pandemic to retain employees. As part of a proposal, dubbed the Jumpstarting Our Businesses’ Success Credit (or JOBS Credit) Act, which was introduced in May, the refundable tax credit–now equal to 50 percent of up to $10,000 in qualified quarterly wages–would increase to 80 percent of up to $15,000 in wages each quarter for up to three quarters. Bradley adds that there’s also potential for the ERTC to expand eligible expenses to include a limited amount of fixed costs.
4. Stimulus checks will be back but they may be less generous.
The Heroes Act passed by the House supports another round of stimulus checks that the Cares Act authorized in March for millions of taxpayers: individuals earning under $75,000 would get $1,200, while married couples with less than $150,000 in adjusted gross income would get $2,400. The bill also would provide an additional $1,200 for up to three dependents, regardless of age.
Senate Republicans are likely to take a more conservative approach to the payments. Last week, White House economic adviser Larry Kudlow said the next round of stimulus checks may be less than $1,200, while Senate Majority Leader Mitch McConnell (R-KY) in early July stated the next round of stimulus checks may be limited to those with incomes of around $40,000.
5. Enhanced unemployment benefits will continue, but get a haircut.
The Cares Act’s enhanced unemployment insurance, which offered an additional $600 per week on top of existing state benefits, is set to expire at the end of July. Many employers found the measure complicated the task of rehiring employees, who were suddenly earning more on unemployment than at their former jobs.
To avoid that issue–but also ensure laid off or furloughed workers have support–Bradley says that lawmakers are considering more targeted subsidies that would vary the amount offered on a federal level to better coordinate with what’s available at the state level. So between the variable federal supplement and those provided by each respective state, unemployment benefits would replace 80 to 90 percent of a worker’s former wages, up to a maximum federal benefit of an additional $400 per week.
The enhanced benefits also may come with a hiring bonus. The Paycheck Recovery Act, proposed in mid-May, offers low-wage workers–those earning less than $40,100 annually–a $1,500 rehiring bonus upon returning to work.
6. Businesses will receive greater liability protections.
Senate Majority Leader Mitch McConnell has made no secret of his desire to see greater liability protections for employers. The details of his approach are still unclear, though Bradley says it’s likely that the Phase 4 bill will allow for some form of safe harbor for companies that make good-faith efforts to follow public-health guidelines.
This article was written by Diana Ransom for Inc.com