Do stock dividends give you better returns? How will the US government shutdown affect you and the economy? Public debt looks strong, but private debt not so much. Updated Tax Brackets for 2026 & More

Do stock dividends give you better returns?

With the S&P 500 currently paying a dividend of only 1.1%, which is the lowest in about 25 years, people may wonder if they should even care about dividends. In 2024, dividends were only 36% of profits, which was 20 points below the average going back nearly 100 years. Looking at return figures, if you go back 65 years, reinvested dividends did account for roughly 85% of the S&P 500’s total return. With the market at all-time high valuations, investors should not give up on investing in companies that pay good dividends, but they also should do plenty of research to verify the dividend is strong and will last. And never ever buy a company just because it pays a dividend!

When looking for companies that pay dividends, look for stocks with new or increasing dividends because since 1973 they returned on average 10.2% versus 6.8% for those companies that did not increase their dividend. Over the same timeframe, those stocks not paying dividends had a return of only 4.3%. Remember when looking at investing in dividend stocks to check that the company has a good amount of cash flow, a reasonable payout ratio to pay that dividend and a strong balance sheet that does not have excessive debt and a good amount of cash for liquidity.

How will the US government shutdown affect you and the economy?

Over the last 50 years, the government has shutdown 21 times with the longest being December 2018 when it lasted 34 days. The shutdown will affect mostly those consumers who are traveling with experts from the travel industry saying it will lose about one billion dollars a week. Think about all the national parks that will be closed and the frustrations at the airports will probably curtail travelers' enthusiasm for traveling. Even with all the negative headlines, stocks tend to do well during a government shutdown with the average three month return after the shutdown at 9.5% and one year later at 22.4%.

I would not encourage people to think they will get a 22% return this time around because of the valuation on the stock market these days. Unfortunately, bonds don’t do as well with the three-month return being a -37% and a one-year return on bonds being a -10.7%. What this means is during a government shutdown generally long-term interest rates increase as bonds fall, and this would be detrimental to the housing market as we would then see mortgage rates increase if history repeats itself. On the shorter end of the yield curve, the Federal Reserve who sets short term interest rates will be handicapped because they will not be getting economic information such as the labor report and other government data to make their decision for interest rates cuts. It is possible if the shutdown is still ongoing at the end of October, the Federal Reserve may not cut interest rates because of the lack of data.

The million-dollar question of how long it will last is a difficult one to answer as no one knows for sure but it appears since both sides are so far apart, they will not come to the negotiating table and until some negativity starts showing up in the economy there is not much pressure on the politicians. That means this shutdown could be one for the record books and could perhaps last a month or two!

Public debt looks strong, but private debt not so much.

Public debt, which are bonds that trade on the public market, is looking rather strong based on the small yield margin between investment grade and speculative grade securities compared with the risk-free government debt. In September, $207 billion of corporate bonds were issued and that’s the fifth highest monthly amount on record. Year to date returns for those holding public corporate bonds stands between 7 to 8%. Private debt on the other hand is starting to have issues as companies such as Tricolor Holdings, which is a lender to individuals with low credit ratings, filed for chapter 7 bankruptcy in September.

The debt holders may get something, but when a company files chapter 7 bankruptcy, the government receives their money first along with the attorneys and then what is left over if any, goes to the debt holders then equity holders. Also, last month an auto parts company called First Brands filed for chapter 11 bankruptcy, they had $6 billion of leveraged loans outstanding. This could be the beginning of an avalanche of defaults in private credit as I believe if the economy continues to slow down, these products will have some major problems. Hopefully you weren't sold anything that deals with private debt, equity or real estate by your broker.

Financial Planning: Updated Tax Brackets for 2026

For 2025, married couples filing jointly will see their standard deduction rise from $31,500 to $32,200 with an additional $1,650 per spouse for those age 65 or older and a new $6,000 deduction per spouse for households with adjusted gross income (AGI) under $150,000, bringing the total possible standard deduction to $47,500. The 12% federal tax bracket will now apply to taxable income up to $100,800 (up from $96,950), and the 0% capital gains and qualified dividend threshold will increase to $98,900 (from $96,700). When calculating tax liability, AGI minus the standard deduction equals taxable income. 

For retirees, this means the $150,000 AGI level is an especially important threshold to stay under. It unlocks the extra $6,000 standard deduction, keeps all ordinary income in the 10% and 12% brackets, and ensures that capital gains and dividend income remain tax-free. These inflation adjustments give married couples, especially retirees and middle-income earners, more room to keep their income in lower tax brackets and reduce their overall taxable income going into 2026.

Why would any company set up manufacturing in the country of India?

I say that because their rules are ridiculous when it comes to running corporations. India's government is a Sovereign Socialist Secular Democratic Republic. The country is having problems with manufacturing because of how difficult it is for a company to leave India if the manufacturing plant is not profitable. It is estimated in India it takes an average of 4.3 years to completely close a factory because of the control of the government. There are laws from the government that if a company wants to shut their factory, the state government can refer it and dispute the closing of the factory at an industrial tribunal. In other words, you can’t just close your factory and go somewhere else unless the government says you can.

The unions in India also have additional ridiculous requirements, which General Motors experienced when it tried to close its factory. The union insisted they either guarantee a new owner that would provide jobs for all of the workers or a severance package that paid out full-time salaries and medical benefits until retirement. I thought things had gotten bad here in the U.S. because of the push to socialism but take a look at India, and one can see how bad socialism can be to a country. I doubt the growth in India can match the growth of the United States long-term as I believe capitalism is a much better system. 

The clock is ticking on home energy tax credits.

Because of the One Big Beautiful Bill that was passed, at the end of the year many home energy tax credits will be gone. So, if you’re thinking of appliances that save energy or heat pumps or solar systems you need to act fast. The big question you should ask here, is it worth it? If you’re looking at adding a new natural gas, propane or oil furnace, hot water boiler, or air conditioning units, if they meet certain energy efficient standards you could get a $600 tax credit. Heat pumps are supposed to be pretty efficient, and you could get a tax credit up to the limit of $3200, which is around 30% of the cost of the unit and installation.

Does your electrical panel look rather scary, and are you concerned about a fire? Here you can also get a $600 credit with an electric panel costing somewhere between $2000-$4000. If you’re not sure what is the best for your home, there are certified contractors or auditors that will assess your appliances, heating and cooling systems, insulation, lighting, and pretty much anything else that could save you money with tax credits. There is a cost for the audit that generally ranges from $300-$500, but you can receive a tax credit of $150 which comes from the energy efficient home improvement credit.

Are you being too cheap?

When we are younger, we are taught to be careful with our money, watch our pennies and don’t overspend. But as you grow your net worth over time, there may be certain levels where you can loosen up a little bit. I’m not talking about going crazy and that you should go on a spending spree, but using rules of thumb that maybe prove you don’t have to watch every penny. Research from a professor at the University of Michigan’s Ross School of Business found 15 to 25% of people have trouble spending money. Unfortunately, the opposite holds true as well and about 15 to 25% of people have no trouble spending money and they actually overspend. While that is a whole separate problem, here we’re talking about the people who have trouble spending money.

The rule that has been established is called the 0.01% rule. What it states is that you should not fret over spending something that cost 0.01% of your net worth. If you have a $1 million net worth exclusive of your home and you’re debating about buying something that would cost up to $100 that would make you happy, don’t worry about it spend the hundred dollars. I will caution people this does not mean you do this every day or apply the same thought over and over again as that can add up in the long term. This concept of what I'll call realistic spending is designed to relieve some stress as you should not beat yourself up about spending an extra hundred dollars once in a while. I myself have lived with very frugal spending since I had a paper route when I was a boy and will now apply this rule going forward. I’m sure this will make my wife happier and there will be less disagreements about some purchases going forward.

For young people today, financial stability comes before marriage.

Up until probably 20 to 30 years ago, couples got married and worked together to afford to buy a home and build a nest-egg. But with the young people of today, that has changed to where they would rather hit financial stability, advance in their careers and then get married. The current median age for a first marriage in 2024 was 30 years old for men and 29 years old for women. Going back just 17 years, a man was getting married for the first time at 28 and women at 26. During that same timeframe, there was a 9% decline in first marriages among 22- to 45-year-olds.

Women over the years have improved their relative economic position while men have been pretty much staying the same. What this has done to marriages is that the man is no longer the ultimate breadwinner and therefore a woman does not need to get married just because a man makes more and he is not needed to bring home the bacon. Those with a college degree have a higher rate of getting married than those without one, but even that rate has been declining. 25 years ago, 68% of those who got married had a college degree or greater and that has only fallen to 64% today. Those with less than a college degree saw rates fall from 62% to only 53%. While there are many blue-collar jobs that pay very well, some women may not want to marry someone who does not have a college degree if they have one. I would love to get women’s comments on how they feel about this.

Do you need a daily money manager?

With the population getting older and more people having wealth as they hit their later years, the need for a daily money manager makes sense for many elder Americans. A daily money manager is a financial professional who provides personal financial services. The service they provide would include bill paying, reconciling checking accounts and investment statements, organizing tax documents, negotiating with creditors and even reviewing medical insurance papers. Be aware they’re not an investment advisor and should not be giving investment advice.

This industry has grown rapidly over the last few years, and there are now Certified Daily Money Managers known as CDMMs. These are professionals who have advanced knowledge of the management of personal financial matters and have earned the certification through meeting the eligibility requirements along with passing an extensive exam that was developed by the American Association of Daily Money Managers. What you can expect to pay for a Daily Money Manager can range anywhere from $30-$150 per hour depending on your geographic location, the services they provide, and the CDMM‘s expertise. When looking for a daily money manager, be sure to ask for references and verify their bonding. It should also be important to understand how they’re going to bill you and when asking about a consultation, verify that it is a free consultation.

Could there be a nuclear reactor on the moon in four years?

It sounds ridiculous being such a short timeframe, but Sean Duffy, who is acting administrator for NASA, wants to fast track an effort to place a nuclear reactor on the moon by late 2029. We are now in a race with China and Russia, who also want to claim the moon for nuclear power before we do. Why a nuclear reactor on the moon? It’s because a moon outpost could generate new scientific and economic activities around research, mining, and even tourism.

There are challenges with a nuclear reactor with a big one being keeping the reactor cool. On earth, reactors are built near bodies of water, which are used for cooling the reactor's core and can also dissipate heat into the atmosphere. On the moon, there is no water or air so they will have to use large radiation panels to disperse the heat and heavy radiation shielding to protect the lunar environment and astronauts from the radiation. With private industry in the U.S. and expertise from companies like SpaceX, which is run by Elon Musk, and Blue Origin, which is run by Jeff Bezos, I think the moon is the limit. Maybe that saying is no longer applicable since the moon is not that far out of reach any longer.