Welcome to our February Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others.
I Speak For The Trees
Early this month JPMorgan Asset Management acquired 250,000 acres of land (about 2x the area inside the 270 loop around Columbus) in the southern pine belt for $500 million. And they’re not the only ones. A group of several businesses led by T. Rowe Price, purchased 1.7 million acres of forest for $1.8 billion at the end of 2022. These businesses plan to use the forests as a carbon offset asset for themselves and by selling the tradable carbon offset certificates to other companies needing to stay compliant in an era of sustainability. Only 10%-20% of revenue is expected to come from harvesting wood, down from 80%-90% under the previous ownership. (Source: WSJ & WSJ)
A Bet is a Bet
Last Super Bowl Sunday was the first time the big game was played in a state where sports betting was legal. Expectations were high that gambling was going to be a big theme for the weekend and those expectations were met. FanDuel said they accepted an average of 50,000 bets per minute during Super Bowl 57. A separate company tasked with verifying bettor’s locations saw 100 million sports-betting transactions during the weekend – an all-time high. (Source: CNBC)
Cost of Living
The average monthly cost to own a home sits around $2,500. Home prices have not made any significant step back and mortgage interest for a 30-year loan is nearing 7% resulting in these high costs. And despite inflation pushing rents up nearly 8% year over year, it still remains the most cost-effective for the median household. (Source: JPMorgan)
New Year = New Tax Rules
Beginning in 2024 under the SECURE Act 2.0, rollovers from 529 plans into Roth IRAs will become available. You can roll up to $35,000 from a 529 into a Roth, but the transfer can only be made to the Roth IRA of the beneficiary, not the owner. The 529 plan must have been in existence for 15 years and the transfer during any given year is limited to no more than the annual IRA contribution limit for that year. Click here to read more on What SECURE Act 2.0 Means for You.
Importance of Investing Young
“Let’s say you started investing at 20 years old, and you invest $250 each month with an 8% annual rate of return. By the time you reach 65, over 50% of your total portfolio would have come from money that you invested in your 20s” says Sjoerd Tilmans in a recent post on Visual Capitalist. (Source: Visual Capitalist)
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