Unemployment Level Hits Record High

The Bureau of Labor Statistics (BLS) report for April showed shattered records and forced lawmakers to face some hard questions.

According to the report, the unemployment rate has skyrocketed to 14.7 percent and touched almost every sector of the labor market. Lawmakers must now decide if they should continue pumping the economy with trillions of dollars in stimulus money or hope that the gradual reopening of states across the country will help jump-start an economic recovery.

Door of Business  with two yellow Post-It notes saying Sorry we are closed and Covid-19

The numbers are truly record-breaking, with the 20.5 million jobs lost in April alone easily surpassing the 8.7 million of the last recession, when unemployment peaked at 10 percent in October 2009. The acute decline is the steepest and most sudden ever seen since the government began tracking employment levels in 1939. April’s losses follow considerable job cuts in March, when employers slashed 870,000 jobs. These numbers are even more disheartening when held up against the state of the economy before the pandemic reached American shores: February’s unemployment rate was just 3.5 percent, the lowest it’s been anytime during the last half-century.

This setback is particularly discouraging for those who weathered the Great Recession of 2008. In the decade following the recession, U.S. employers added 22.8 million jobs to the economy. Now, it appears as if close to 10 years of job growth was wiped out in just two months.

By the government’s definition, the “unemployed,” generally includes individuals who are actively seeking work and does not reflect the millions of Americans who have had their hours cut along with losing their paychecks.

While the numbers are bleak, some comfort can be taken in knowing this was a necessary sacrifice for the greater good. When stay-at-home orders were issued across the nation, beginning in late March, thousands of businesses in multiple sectors were forced to shut their doors. Many of them were forced to lay off workers as well. Experts estimate that hundreds of thousands of lives may have been saved by the lockdowns.

Unfortunately, though, the job losses were a direct consequence of these closures. The job report shows a loss of 7.7 million jobs in the leisure and hospitality sector, another 2.1 million losses in retail and 1.2 million vanished jobs among health care workers employed in outpatient services like physicians’ and dentists’ offices. Food and beverage stores, considered essential during the lockdowns, have lost a collective 42,000 jobs.

There is some good news despite the doom and gloom: A full 18 million Americans counted by the BLS as “unemployed,” are on “temporary layoff” and expect to be rehired within the next six months.

On the flip side, though, the count did not include jobless workers who were not actively seeking work in April. These individuals are categorized as having dropped out of the workforce instead of being part of the unemployed.

Financial experts are hopeful that many people will find work again as the economy gradually opens up, but they caution that it will likely take years before the labor market makes a full recovery. This is especially true for the leisure and recreation sector, as many Americans likely won’t be comfortable sitting in a packed restaurant or a crowded theater until a vaccine or approved drug is available for COVID-19.

For now, Americans should support local businesses as much as they are realistically able and have a mindset of knowing better days are ahead.

Your Turn: How can you help your local small businesses? Share your ideas with us in the comments.

This Guy Paid Off His Mortgage In Three Years. So, Why Does He Regret It And Why Is Everyone Angry At Him?

There’s not much in life that is more freeing than finally paying off a large bill. Suddenly, our checking accounts are flush, the future feels more open, and even our favorite jeans seem to fit better. When it comes to a mortgage, of course, that seems so far down the road it’s difficult to imagine, particularly for those just starting out.  If you’ve always paid rent or a mortgage, it just kind of feels like that bill is always there, the background noise of your life. 
So, when 30-year-old Canadian resident Sean Cooper paid off his mortgage in three years, he celebrated by burning his mortgage papers and found a news crew to film it.  But, here’s the twist: He isn’t happy about it, and judging from social media posts and comments on the news coverage, no one else is, either.  In fact, Cooper seems full of regret and everyone else is full of scorn or pity.  What’s going on?
Cooper sacrificed a lot to pay off his mortgage, and even he admits he focused too much on his financial goals.  He worked three jobs, including as a full-time CAD technician $75,000 (about USD $56,000) white-collar job, a customer service job at a local grocer, and writing freelance articles.  In addition, he supplemented his income by living in the basement of his home while he rented the house to others.  As many commenters note, that’s not a healthy way to live and it’s unsustainable.
Often, we lose sight of what’s around us when we focus on our financial goals.  That moment when the bill is paid seems so sweet that we don’t really think about everything it’ll take to get us there.  If you’d like to make financial headway on your mortgage without making yourself crazy, we’ve collected some tips below.  The key idea among them is finding a balance, so you’ll need to adjust them for your own personal situation.  If you’d like a more personal meeting to discuss your financial goals and finding balance, let us know.  Also, follow us on Facebook and Twitter. 
Take gigs, not jobs.  It’s easy to see why renting out one’s home and securing extra employment are so appealing.  Regular income feels safe and makes it easy to plan ahead.  But extra employment can also be confining; It’s difficult to work full-time and still find time for your hobbies, your family, or the occasional afternoon spent binge-watching Netflix (something everyone needs occasionally).  If you don’t find time for your hobbies, you’ll find that your job has become your hobby.  If you don’t spend time with your family, you just won’t have the bonds that families need.
Instead, look at gig-based jobs like Uber and Air-BNB.  While they might not offer the steady income of a regular-hours job, you can scale your work up or down depending on need and availability. Plus, if you don’t feel like working on a given day, you don’t have to.  With Air-BNB, the owners of a rental property can cancel for any reason with as little as 24 hours notice.  That’s the kind of fantastic option that’s not available if you have renters who are playing their music a little too loud above you. 
Turn your hobby into a gig.  If you want another way to generate income, one that doesn’t require you to do mindless tasks, and you want to keep enjoying your hobby, then it might be time to turn that hobby into a gig.  Do you scrapbook or make crafts?  Open a store on Etsy.  Are you an avid collector? Start investing and re-selling collectibles on eBay.  Do you build or tinker? Time for a workshop. Have a design? Put together a working prototype and take to Kickstarter.  Want to write a novel?  Fifty Shades of Grey and The Martian both started life as fan-made, self-published ebooks. It’s never been easier to find an audience or customer base.
If you’re looking to make the move from weekend warrior to someone who can make money with your passion, get some start-up capital. You’ll need workshop space, supplies or a new laptop.  We’ve got a lot of ways for you to invest in yourself.  Who knows, that investment could be the start of a new path to leaving the rat race behind. 
The goal is financial security, not paying off a single bill. There’s no prize in paying off your mortgage. It’s just one less bill to pay.  Your goal is overall financial security.  That could mean refinancing your mortgage to have cash in hand when interest rates are low, or investing significantly when interest rates are high.  So, don’t pay off your mortgage while racking up credit card debt or neglecting your student loans.  Instead, take a look at all of your debt.  Work from the highest interest rate to the lowest, paying off each in turn, so you can pay as little interest as possible every month.
One of the easiest ways to do this is with a home equity loan.  Using the equity you have built in your home will get you a lower rate than your credit cards or medical bills are charging, and it can even be a fixed rate, so you can benefit if the Federal Reserve raises interest rates.  All you need to do is secure a home equity loan then transfer your credit card balances onto the loan.  Sometimes, simply calling the credit card companies with a check from your home equity loan in hand will get them to drop the rate you’re being charged.  Fantastic! Now you can use your loan on a different card.
Whatever you do, you’ve got to be happy.  It’s difficult to find balance, particularly with debt and obligations hanging over our heads. The solution isn’t to take on more obligations and retreat from humanity. The solution needs to be understanding that money exists as a means to an end, not an end itself. 

Investing In Your Career

When you think of your investment portfolio, you probably think of stocks, savings and maybe a few other financial products you own or things you’re planning to use for buying a house, fund retirement, or to keep yourself protected.  What you might overlook is the investment you’ve made in your career. You’ve invested time in your career, and if you’re still paying off student loans, you definitely know you’ve spent money on it as well.  Just like any other investment, your career has risk and return.  If you want to get the best return on your investment in your career, then here are a few tips that can help: 

Get a degree.  If you haven’t finished college, you might have found yourself bumping up against a glass ceiling.  You can finish your degree online, often in a short amount of time and without spending a ton of money.  If you’d rather go back to school in person, talk to us about student loan options.  

Get an advanced degree.  It’s no surprise that the average income goes up with each advanced degree that individuals earn.  If you’re looking to advance your career, consider using one of our loansto finance an MBA, which is useful in virtually every field. 
Build your brand.  More and more, career changes and advancement can be built through the Internet and social media.  You can work on building your personal online brand or get training and a certification in all sorts of software and design to help others build their brand, making money in the process.
Learn another language or another culture.  There are very few job skills as portable as language and communication.  If you find yourself out of a job, knowing another language can help you get that next one lined up. Understanding different cultures makes it easy to move if the next job is across the country or even elsewhere in the world.
There are a lot of ways to invest in your future, but the one we tend to overlook is spending money to develop our jobs.  Unless you got in on the ground floor of investing in Google, you’re probably never going to find an investment that pays you more over the course of your life than the one you’ve made in your career. Don’t neglect it.