How does federal debt affect investors like me?
Spend enough time watching or reading the news, eventually someone will bring up the U.S. federal debt. It does not matter which news provider or providers you follow, the federal debt is always an important and relevant topic … but why?
On a personal level, most of us understand that accumulating debt is bad for us, but how exactly does the federal debt affect us? Well, it turns out it may affect you in more ways than you imagine.
How the federal debt may affect you
It is no secret that the federal debt has been rising for many years. Sure, there were some periods where it turned back down, but ultimately, we are seeing it skyrocket to unprecedented levels.
One way rising federal debt affects the average person is that it is typically accompanied by a weakened economy. Depending on the specific circumstances of the time, the economy may be weak because of the high debt or the federal debt may rise because of weakness in the economy that requires increased government spending.
Regardless of whether the economy causes the debt or vice versa, a struggling economy can directly affect you. A struggling economy can affect the market, which can affect your savings and investments. Additionally, there is the concern of an eventual increased interest rate to help compensate for the debt.
So, what is an individual investor to do about the rising federal debt? You cannot change the market or lower the debt on your own, but you can work with a financial planner who can help you develop strategies to navigate bullish and bearish markets to reach your short- and long-term savings goals.
Talk to a ProVise CFP® professional about personal financial planning
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about investing despite the federal debt levels? Contact ProVise today to schedule a complimentary consultation.