August 2023

The average American owes $59,580 in debt. Of that $59,580, $41,830 is from mortgage debt, $5,640 is from student loans, and $5,470 is from auto loans. Little wonder that money worries can be a major cause of stress.1

The Link Between Stress and Health

Humans have an innate response called “flight or fight.” It is nature’s way of launching our bodies into action; consider the physical responses we feel during moments of stress—faster heartbeat, accelerated breathing, tightening of muscles, and increase in sweating.

These are response mechanisms that prepared our ancestors to run from, or confront, a danger on the savanna. But they can be less useful in more modern times.

In the short term, stress can manifest itself in physical symptoms, such as headaches, fatigue, difficulty sleeping or concentrating, an upset stomach, and general irritability.

These brief episodes of stress usually do not cause lasting harm to personal health.

However, debt—and the stress it causes—is often a persistent problem. If your stress system stays activated over longer periods of time, it can lead to serious health problems, such as weight gain, fatigue, anxiety, depression, headaches, and sleep problems.2

Managing Stress and Debt

If you are experiencing debt-related stress, you should consider attacking the root of the problem. Generally, it takes time to work down debt, but that doesn’t mean you can’t manage the stress during the interim period.3

Developing a strategy to eliminate your debt is the first step to lowering stress since the sense of control that a strategy gives you might furnish you with hope and optimism.

It’s also important that you keep your debt worries in perspective. Remind yourself that debt may not permanently ruin your life. Writing in a journal can be helpful as an outlet for the worried thoughts that can cycle endlessly through your mind. Seek social support—knowing that family and friends are in your corner can be a great source of strength.

Finally, find time for laughter and extending small kindnesses—each unleashes wonderfully positive chemical reactions that are good for the soul and the body.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. BusinessInsider.com, March 23, 2023
2. MayoClinic.org, 2023
3. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific debt-reduction strategy or approach.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Have you ever taken a close look at paper money? Each U.S. bill has the words “Federal Reserve Note” imprinted across the top.

But many individuals may not know why the bill is issued by the Federal Reserve and what role the Federal Reserve plays in the economy. Here’s an inside look.

The Federal Reserve, often referred to as “the Fed,” is the country’s central bank. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Prior to its creation, the U.S. economy was plagued by frequent episodes of panic, bank failures, and limited credit.1

The Fed has four main roles in the U.S. economy.

Economy Watch

In addition to its other duties, the Fed has been given three mandates with the economy: maintaining maximum employment, maintaining stable price levels, and maintaining moderate, long-term interest rates.1

It’s important to remember that the Fed cannot directly control employment, inflation, or long- term interest rates. Rather, it uses a number of tools at its disposal to influence the availability and cost of money and credit. This, in turn, influences the willingness of consumers and businesses to spend money on goods and services.

For example, if the Fed maneuvers short-term interest rates lower, borrowing money becomes less expensive, and people may be motivated to spend. Consumer spending may stimulate economic growth, which may cause companies to produce more products and potentially increase employment. When short-term rates are low, the Fed closely monitors economic activity to watch for signs of rising prices.

On the other hand, if the Fed pushes short-term rates higher, borrowing money becomes more expensive, and people may be less motivated to spend. This may, in turn, slow economic growth and cause companies to decrease employment. When short-term rates are high, the Fed must watch for signs of a decline in overall price levels.

Supervise and Regulate

The Fed establishes and enforces the regulations that banks, savings and loans, and credit unions must follow. It works with other federal and state agencies to ensure these financial institutions are financially sound and consumers are receiving fair and equitable treatment. When an organization is found to have problems, the Fed uses its authority to have the organization correct the problems.

Financial System

The Fed maintains the stability of the financial system by providing payment services. In times of financial strain, the Fed is authorized to step in as a lender of last resort, providing liquidity to an individual bank or the entire banking system. For example, the Fed may step in and offer to buy the government bonds owned by a particular bank. By doing so, the Fed provides the bank with money that it can use for its own purposes.

Banker for Banks, U.S. Government

The Fed provides financial services to banks and other depository institutions as well as to the U.S. government directly. For banks, savings and loans, and credit unions, it maintains accounts and provides various payment services, including collecting checks, electronically transferring funds, distributing new money, and receiving and destroying old, worn-out money. For the federal government, the Fed pays Treasury checks; processes electronic payments; and issues, transfers, and redeems U.S. government securities.

Each day, the Fed is behind the scenes supporting the economy and providing services to the U.S. financial system. And while the Fed’s duties are many and varied, its focus is to maintain confidence in banking institutions.

A Decentralized Central Bank

The Federal Reserve System consists of 12 independent banks that operate under the supervision of a federally appointed Board of Governors in Washington, D.C. Each of these banks works within a specific district, as shown.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations.Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

Much is written about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Some classic financial missteps have been known to plague retirees, too.

Calling them “missteps” may be a bit harsh, as not all of them represent errors in judgment. Either way, becoming aware of these potential pitfalls may help you to avoid falling into them in the future.

Managing Social Security. Social Security benefits are structured to rise about 8% for every year you delay receiving them after your full retirement age. Is waiting a few years to apply for benefits an idea you might consider? Filing for your monthly benefits before you reach your full retirement age can mean comparatively smaller monthly payments.1

Managing medical costs. One report estimates that a the average couple retiring at age 65 can expect to need $315,000 to cover health care expenses during the course of their retirement, even with additional coverage such as Medicare Part D, Medigap, and dental insurance. Having a strategy can help you be better prepared for medical costs.2

Understanding longevity. Actuaries at the Social Security Administration project that a 65- year-old man has a 34% chance and a 65-year-old woman has a 45% chance to live to age 90. The prospect of a 20- or 30-year retirement is not only reasonable, but it should be expected.3

Managing withdrawals. You may have heard of the “4% rule,” a guideline stating that you should take out only about 4% of your retirement savings annually. Each person’s situation is unique but having some guidelines can help you prepare.

Managing taxes. Some people enter retirement with investments in both taxable and tax- advantaged accounts. Which accounts should you draw money from first? To answer the question, a qualified financial professional would need to review your financial situation so they can better understand your goals and risk tolerance.

This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your investment strategy for tax considerations.

Managing other costs, like college. There is no “financial aid” program for retirement. There are no “retirement loans.” A financial professional can help you review your anticipated income and costs before you commit to a long-term strategy, and help you make a balanced decision between retirement and helping with the cost of college for your children or grandchildren.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. SSSA.gov, 2023
2. Fidelity.com, 2023
3. LongevityIllustrator.org, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.