The Absolute Worst Money Decision Millions Of Americans Are Making

And it might be because they have no choice [View in browser]( [The Juice Logo] Proprietary Data Insights Top Asset Management Stock Searches This Month Rank Name Searches #1 The Blackstone Group 35,732 #2 Ares Capital Corporation 35,550 #3 T Rowe Price Group 32,506 #4 Main Street Capital Corp 32,259 #5 Prospect Capital Corporation 27,650 #ad [Daily Stock Picks with Expert Analysis]( Brought to you by [InvestingChannel]( [The Most Researched Stocks [FREE REPORT]]( [ InvestingChannel - The Most Researched Stocks [FREE REPORT]]( Once every quarter, we compile millions of Financial Professional and Retail Investor's stock searches across our 100+ financial sites We reserve this exclusive report for our newsletter subscribers so you can learn about the stocks and industries that you should keep an eye on. This info can help you decide what to do in your portfolio – so you can protect the money you have and generate bigger gains. [Click here now to download the FREE Trackstar Q2 2023 Report.]( The Absolute Worst Money Decision Millions Of Americans Are Making A Juice reader sent us a message this week that provides the perfect segue to today's going concern. One of the worst money decisions millions of people are making, often out of desperation. Sometimes out of necessity or perception of necessity. Here's what the reader, Bob, said: Just out of college and working in Oil/IT for 3 years, my wife and I bought a starter 1800 sq ft house for $30+K with 20% down and 7.5% interest. In those years there were very few credit cards and most young working folks did not have a credit card. Big difference then and now. We bought a burger and coke with cash instead of going to the bank. Those working for BOA had no or little clue of money back in 1971. If you’d like to provide your opinion or feedback to The Juice, we welcome it. Use [this link to tell us all about]( whatever’s on your mind. Bob’s story shows how everything we cover in this little newsletter of ours ties together. In case you missed Tuesday’s email — [Exciting News About Where The Juice Is Headed]( — here’s a summary of “everything we cover.” - The general economy, in particular around cost of living and consumer debt. - Housing, with a focus on affordability and opportunity. - What’s going on in the stock market, focusing on strategies and ideas to help make you a better investor. - General personal finance, with the goal to help you save and be better with money. So, let’s take parts of these elements, relate them to Bob’s story and tie them to the aforementioned worst money decision. There’s [a housing crisis affecting younger people and wannabe homeowners](, as we have established. Long gone are the days of relatively affordable home ownership even when mortgage interest rates are high. Also long gone are the days of people paying cash instead of routinely using credit cards. Adjacent to the housing crisis, [we also track the consumer debt crisis](: Particularly data on ever increasing credit card debt. As of Q2, it hit $1.02 trillion, an all-time record. Of course, the delinquencies and charge-offs could only lag the debt number for so long. Amid increased cost of living across the board, record high home ownership costs and mounting credit card debt, many Americans struggle to make ends meet. The lucky ones — depending on how you view these things — have or had a good job where they keep/kept a 401(k) or have money in an Individual Retirement Account (IRA). When we do our series on retirement, we dive deep into these two primary ways to save for retirement. Except many of these people impacted by rising costs can’t let the stock market work its long-term magic. They have no choice — or at least they think they have no choice — but to dip into this tempting nest egg. Consider some data: - According to Fidelity, hardship withdrawals from 401(k) plans have tripled over the last five years. - Vanguard says they have doubled in the last four years. - T Rowe Price (TROW) recently noted an increase in 401(k) loans in a report where 46% of 401(k) plan participants surveyed say they have less than $1,000 saved for an emergency expense. - This jibes with Fidelity’s finding that 56% of employees “would feel a little or completely overwhelmed if an unexpected financial challenge came up.” In the T Rowe Price report, workers blamed increasing credit card debt as well as mortgage and car payments for their savings’ struggles. Fidelity’s data reveals that 80% of people claim “inflation and cost of living are causing them stress, and half of those say it’s causing them to be distracted at work.” As The Fixx (not INXS!) said, one thing leads to another. Housing is expensive. So is everything else due to inflation. You blew through pandemic savings. You’re turning to credit cards. Things have never felt more tight. But there’s that retirement account. A load of money that can provide months’ worth of personal financial breathing room while you get your ducks back in a quack-free row. Except there’s an obvious problem with the last link in this chain of events. Unless you qualify for an exception, you’ll likely pay income tax, plus a 10% penalty on your 401(k) distribution. Basically the same rules apply for traditional IRAs. Similar rules apply for Roth IRAs, however you can always access your original Roth contributions, though not accumulated earnings, tax- and penalty-free. However you slice it, hitting up a tax-advantageous retirement account to help fund day-to-day life is rarely, if ever a good idea. But neither is maxing out credit cards. A little bit of planning — such as building a formidable emergency fund when you’re financially strong — can go a long way. The Bottom Line: Little bonus for our bottom line today. Speaking of T Rowe Price. The company ranks third in our Trackstar database of the asset management stocks investors are searching for most. TROW stock hasn’t done so well in recent times. It’s down -17% YTD, -15% over the last year and nearly -7% over the last five years. Even a decent earnings report did nothing for the stock last week. The company beat estimates thanks primarily to an increase in advisory fee-based income. While it’s receiving money from investors for fixed income, multi-asset and alternative products, these inflows have not offset outflows from equities. Of course, some of this has to do with profit taking and potentially shifting investor sentiment in an uncertain environment. But we also have to think some of it has to do with what we discussed today. People taking money out of the market for cash security and, worst case, to help make ends meet. 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