In today’s issue:

• Quick Reads - 10 year treasury surging, rents flat…

• Market Minute - Markets are indecisive, what next…

• Deep Dive - How one reader could effectively manage a windfall…

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NEW OPPORTUNITY

Many investors lose $1.6MM over their lifetime. I nearly did too—until I found the fix.

The Secret That Changed the Way I Manage My Wealth Forever

Most high earners lose millions over time—see how I learned to avoid the hidden traps

Last week, I met with one of our readers who had a familiar problem. They were earning a great income, saving consistently, and even investing. But their wealth wasn’t growing as quickly as they would like.

They told me, “I don’t get it. I’m doing everything I’m supposed to, but my money just isn’t growing the way I planned.”

I knew exactly what they were feeling because I’d been there too…

Fifteen years ago was the first time I had a seven figure income in one year, but I didn’t realize how many pigs would be at the trough.

Despite all of my advisors, my returns were weak.

Once I figured out why, everything changed…

I shared a few things with him I wish someone had told me back then. We talked for a while, and I could see things starting to click for him.

It made me wonder—how many others are struggling with the same thing without realizing it?

👉 Reply to this email with the word AFFLUENCE and I’ll tell you about a new program we’re offering limited to the first five people to sign up before January 15th.

P.S. Sorry, but only for people making over $100k per year…

WEEKLY WISDOM

ENGAGING IDEAS

Shocking Stats on Working from Home

The pandemic has dramatically shifted work dynamics, with remote work increasing by 173% since 2005. Surveys reveal that 77% of remote workers report higher productivity, while companies save an average of $11,000 per half-time telecommuter annually.

Mortgage Rates Spike to 6.85%

The average 30-year mortgage rate has jumped to 6.85%, the highest since mid-July, up from 6.72% last week. This surge, influenced by rising 10-year Treasury yields, tightens the squeeze on potential homebuyers already grappling with high home prices.

Multifamily Market: 2025 Growth Outlook

Multifamily rents are projected to increase by 1.5% in 2025, with the Northeast and Midwest leading—New York at 3.1%, Chicago at 2.6%, and Washington, D.C., at 2.4%. In contrast, Sun Belt cities like Austin, Phoenix, and Nashville may experience slower growth due to oversupply. Additionally, after a record 550,000 units added in 2024, multifamily deliveries are expected to decline in 2025, easing supply pressures.

MARKET MINUTE

Market Waiting for the Next Big Move…

The markets are in a holiday limbo, with no major news to tip the scales toward growth or recession. Here's the rundown:

• 10-Year Treasury: The 10-year yield continues to surge, hitting highs not seen in decades. This spike is roiling equities and bonds alike, signaling that higher borrowing costs are here to stay.

• Oil: Stuck in the mud, oil remains range-bound at $71, oscillating between $67 and $72 since September. The market’s indecision reflects weak demand and a steady supply balance.

• Stocks: The Fed’s announcement of fewer rate cuts in 2025 tanked equities initially, but they’ve since clawed back some gains. Investors are cautiously optimistic—or just tired of selling.

• Gold: Despite inflation fears, gold has stalled at $2,600, stuck in a holding pattern as investors look for a clear direction.

In short, the market feels like a coiled spring, waiting for a catalyst. Whether it’s an economic data surprise or geopolitical shock, the next move could set the tone for 2025. Until then, expect more chop and fewer fireworks.

DEEP DIVE

Overwhelmed by a $3 Million Inheritance

One reader, Thomas, was stunned when he inherited $3 million from his father.

His father, a frugal man, had never discussed money, so Thomas had no idea the wealth even existed…

Now, he’s facing questions he’s never had to answer:

• Should he hire a financial advisor? Which one?

• What about taxes—how much will he owe?

• His neighbor’s son has a hot startup investment—should he jump in?

Overwhelmed, he feels paralyzed, afraid of making a mistake that could cost him everything. He knows this money could change his life, but he also knows the risks. Stories of lottery winners and heirs who lose it all haunt him.

Why Sudden Wealth Feels Like a Curse

Thomas isn’t alone. Most people think a financial windfall will solve their problems, but the truth is often the opposite:

• 70% of lottery winners go broke within a few years.

• 1 in 3 heirs loses their inheritance through poor decisions.

• Many windfall recipients face paralysis, unsure how to act without making irreversible mistakes.

Without a plan, sudden wealth can quickly slip through your fingers.

If you’ve received an inheritance, sold a business, won the lottery, or landed a large insurance settlement, this is likely the most significant financial moment of your life.

The good news? With the right playbook, you can protect your wealth and set yourself up for lifelong security.

The Sudden Wealth Playbook: 10 Steps to Success

Managing sudden wealth doesn’t have to be overwhelming. Follow these steps to ensure your windfall works for you—not the other way around.

1. Pretend the Money Isn’t There For An Uncomfortably Long Time

• Keep living your life as you did before the windfall.

• You need time to learn and to plan.

• Avoid making major purchases or commitments for at least six months, preferably at least one year.

2. Pay Taxes First And Find Out How Much You Really Have

• Work with a tax professional to determine your obligations.

• Set aside what you’ll need for taxes before making any other plans.

3. Slash Consumer Debt To Lower Your Burn Rate

• Pay off high-interest debts like credit cards and car loans immediately.

4. Max Out Tax-Advantaged Accounts

• Start contributing the maximum to retirement accounts like IRAs and 401(k)s.

• Don’t forget your health savings account (HSA) and consider educational 529 plans for children or grandchildren.

5. Decide Whether to Pay Off Your Mortgage

• Use this simple rule:

  • Mortgage rate below 4%? Keep it.

  • Mortgage rate above 4%? Consider paying it off.

  • If paying it off helps you sleep better, do it regardless of the math.

6. Hire a Financial Advisor (For Now)

• Choose a fee-based financial advisor who prioritizes low fees and transparency.

• Monitor their performance net of fees to ensure they’re adding value.

7. Study Investing and Finance

• Read foundational guides like The Bogleheads’ Guide to Investing.

• Learn about what opportunities exist for accredited investors.

• Explore alternative investments like real estate or venture capital, but take your time.

• Pick an area of specialization: go deep in real estate, oil and gas, venture capital, or whatever you choose.

• Study hundreds of deals before allocating.

• Learn about tax strategies the wealthy use

  • https://newsletter.shrewdinvestor.com/p/2024-year-end-tax-playbook

8. Focus on a Safe Withdrawal Rate

• Spend no more than 4% of your portfolio annually to help it last a lifetime.

9. Make Sure You’re Liquid Enough

• Keep enough assets in cash, money market funds, or short-term bonds to meet your short-term financial needs.

• Make sure you have enough to weather a few years recession in case the market turns on you.

10. Be Patient

• Sudden wealth represents a massive transition. Allow yourself time to grow into the role of wealth steward.

The Mindset Shift: Be Patient, Not Impulsive

Managing a windfall isn’t just about the money—it’s about becoming the kind of person who can handle it responsibly. It’s natural to feel scared or unsure. The key is to slow down and approach this new chapter methodically.

The content provided in this newsletter is for informational purposes only and should not be considered as specific advice for any specific individual. The information is prepared by knowledgeable individuals and is not written by certified tax professionals or investment advisors. For personalized advice tailored to your unique financial situation, consult with a qualified tax professional, financial advisor, or attorney.

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