My girls left for college. We are super-close and talk every day.
Fortunately, I've stopped crying. I'm not a crier, and my wife and kids have never seen me cry, but this week was a hard one.
Still, I've got young stepkids around, so the house is hardly empty. But it's not the same and, since we were the house that everyone hung out at through my girls' high school years, the level of activity is different. It's a different vibe.
Anyway, while my girls are not taking their vehicles with them yet, I've decided to give them their cars, so that's why there was a drop in that category. On that note, I am glad I never counted their 529 plans in my networth since the hit to the 529 plans is big and it's less of a mental blow when it doesn't come off of your bottom line.
The 529 plans should fund their higher education through the middle of their Junior years, so I'll need to pick up the bill for the "bitter end." I'm glad I did not overfund the plans, but I could have put aside even more. It's a hard thing to judge when they're young, however, so I think I did a good job (especially given the unique and absurd inflation in education costs over the last ~17 years).
My bonds continue their tear, and what a year its been. Nine months ago people were looking for yields on the 10-year to head up to 4%, instead they are 1.5%. TLT is up alomost 11% on the year, and that doesn't include distributuons. Appreciation on my municipal bonds is not as high as TLT, but they've also done very well and, of course, I never bought them for capital appreciation anyway. Not sure what, if anything, to do with that found money (much of it is long-term capital gains).
So how will that end?
There's talk of negative rates coming to the United States. I'm not sure it will happen, but it's certainly possible. I read today that Danish banks are doing mortgages at -.5%. That is, they are quite literally paying people to borrow money to buy real estate. Elsewhere, there is $17 trillion in negatively yielding debt sloshing around the world. That's almost 20% of the world bond market or almost as large as the entire U.S. GDP!
On that note, do you know what a trillion dollars looks like?
http://www.pagetutor.com/trillion/index.html
In my view, this is not setting up to end well, and I think it's safe to say we're in for low (or even negative) rates for the foreseeable future. This, of course, is not a sign of a healthy economy. |