InSight

Market InSights:

Second COVID-19 Stimulus Niceties and Notes

We have an agreement, which means we can begin to criticize it and plan for the investment and economic effects. The bill is a litany of half measures, no long term solutions, and likely sets up a couple of battles in the next congress. 

Congress punted on evictions, postponing medical payments until early next year, and there is still an ongoing debate regarding the amount it is issuing in direct payments. The looming liability concern for businesses is still being discussed.

Here is what got done: 

Individual payments for many

Easily the most asked about part of the legislation is the direct payment to individuals that begin going out today. The passed version included $600 going to individual adults with an adjusted gross income of up to $75,000 a year based on 2019 earnings.

An increased amount will be going to those that file as heads of households who earn up to $112,500 and couples (or someone whose spouse died in 2020) who make up to $150,000 a year would get twice that amount.

This continuing political battle to raise this number from $600 to $2000 is still going on today, passing with all democrat and some republican support in the house. The senate is questionable as a few Republicans have endorsed the idea, including the two high profile candidates in Georgia – Loeffler, and Purdue.

McConnell has blocked the bill as of 10:20 am as I am writing this article. 

Unemployment benefits

With almost 7% of Americans still unemployed and millions more under-employed, Congress acted to extend multiple programs to help those out of work, albeit at less generous levels than in the spring. Too much of the surprise of those tracking the issue, the final bill doesn’t include the expanded coffers many anticipated and is considered a skinny agreement. 

The agreement would include:

  • 11 weeks, providing a lifeline for hard-hit workers until March 14. 
  • Up to $300 per week (half the amount provided by the original stimulus bill in the spring)
  • Pandemic Unemployment Assistance — a program aimed at a broad set of freelancers and independent contractors — for the same period, providing an additional $100 per week

Better late than never, the expanded agreement is a second band-aid for those Americans that continue to seek employment as employers have halted hiring. The near term negative effect of unemployment cannot be understated. But as we look out to the intermediate (6 months) range seems to hold a fantastic capacity for consumers to unwind pent up spending in short order. The unemployment insurance isn’t expected to be much but will support many Americans who put more and more spending on credit cards in the second half of the year. 

Funds for Child Care, Schools, and Colleges

School budgets have been uniquely impacted by the pandemic and have left their outlook for the year to some impaired:

  • $82 billion for education and education service providers, 
  • That figure includes $54 billion for stabilizing K-12 schools
  • It also includes $23 billion for colleges and universities
  • $10 billion for the child care industry

K-12 schools saw more support than the initial package in dollar terms, and even more than the proposed package in November; however, the funds still fall short of what both sectors say they need to blunt the effect of the pandemic and to support operations in 2021. 

The majority of school districts transitioned to remote learning and as a result, we were asked to make expensive adjustments to accommodate while seeing enrollment drops upend budgets. Colleges and universities are also facing financial constraints amid rising expenses and falling revenue.

Child care centers that are struggling with reduced enrollment or closures will get help to stay open and continue paying their staff. The funds are also supposed to help families struggling with tuition payments for early childhood education. 

Funding for broadband infrastructure

The stress on national broadband has been higher than ever, remote work and education on top of the expanded requirements of technologies like Zoom, have put a major strain on national networks. The legislation includes $7 billion for expanding access to high-speed internet connections. Much of this spending was anticipated in an infrastructure bill, that has been brought forward as a result of the pandemic. Two major points in this part:

  • Half this stimulus is earmarked to cover the cost of monthly internet bills by providing up to $50 per month to low-income families.
  • $300 million for building out infrastructure in underserved rural areas and $1 billion in grants for tribal broadband programs. (Part of another infrastructure bills spending prior to the pandemic) 

Extension of aid for small businesses (PPP)

The bill puts forward $285 billion for additional loans to small businesses under the Paycheck Protection Program. This renews the program created under the initial stimulus legislation and is largely an extension of dollars that were repurposed.

Funding for vaccines and eldercare facilities

The source of concern early in the pandemic and the ongoing requirements to overhaul the elderly care facilities are addressed by this legislation as it sets aside nearly $70 billion for a range of public health measures targeted at elderly care facilities and the distribution of the vaccine. This breakdown includes: 

  • $20 billion for the purchase of vaccines 
  • $8 billion for vaccine distribution 
  • $20 billion to help states continue their test-and-trace program
  • Earmarked funds to cover emergency loans aimed at helping hard-hit eldercare centers.

A ban on surprise medical bills

The Bill supports efforts to help Americans avoid unexpected medical bills that can result from visits to hospitals. The legislation also makes it illegal for hospitals to charge patients for services like emergency treatment by out-of-network doctors or transport in air ambulances, which patients often have no say about. This measure has had some long time support from Democrats and was criticized for not including some provision in the Affordable Care Act. 

Rental protections

One more month of halting evictions is pushed out to the end of January. The Department of Housing and Urban Development separately issued a similar moratorium on Monday that protects homeowners against foreclosures on mortgages backed by the Federal Home Administration. It runs until Feb. 28. This has had several enforcement issues and while the legislation is a fantastic lipservice, the issues of evictions for individuals with a history of rental disqualification from before the pandemic are a continued source of evictions.

The bill DOES NOT include liability protection for business

A criticism by many that Democrats largely held out a provision for liability protection for companies trying to reopen. This element, opposed by labor unions and supported by the national Chamber of Commerce was a sticking point that went without inclusion. The discussion was important because it would allow businesses to follow their local recommendations to reopen to have legal insolation from lawsuits later on. This will continue to be a discussion in congress as a “reopen” is structured and the liabilities for business owners regarding COVID exposures are defined. 

Conclusion:

This gets us through the winter and hopefully the hump of COVID as the vaccine gets rolled out. It still leaves too much for the 2021 congress to cover and cover quickly. What the continued political, monetary, and fiscal landscape reactions look like is still up for debate. The curvature of risk in equities peaks in February (as I write this) so markets are pricing in a 2 month include equities and a political battle come early spring.

More related articles:

How to Successfully Manage the 45-Day Identification Window in a 1031 Exchange

Executing a 1031 exchange is one of the most powerful tools in real estate investing, allowing you to defer capital gains taxes while growing your investment portfolio.However, one of the most critical — and challenging — steps is managing the 45-day identification window. Understanding how to navigate this time frame is essential to completing a successful exchange and making a smart real estate investment that fits your long-term strategy. Let’s walk through how to approach it with discipline, investment insight, and tactical precision. The 45-Day Identification Rule: A Quick Refresher Under IRS rules for 1031 exchanges: You must identify your potential replacement property (or properties) within 45 calendar days of selling your relinquished property. This deadline is strict — no extensions are granted, even for holidays, weekends, or personal hardships. Your identification must be in writing and delivered to your Qualified Intermediary (QI) or other authorized party. If you miss the 45-day window, your exchange fails, and you’ll owe full capital gains taxes on the sale. Investment Terms: What You’re Really Managing To manage the 45-day window well, think in terms of core investment principles: Investment Term Application to 45-Day Window Liquidity Risk Properties may move quickly — delays or indecision can leave you with nothing identified. Due Diligence You must move faster than a traditional purchase, but without sacrificing critical analysis. Market Efficiency Good properties are often bid on by multiple parties — you may need backup options ready. Return on Investment (ROI) Replacement properties should be carefully vetted for rental yield, appreciation potential, and exit strategy. Diversification Consider different property types or geographies to spread risk while achieving exchange goals. What You Need for a Successful Real Estate Investment (Under 45-Day Pressure) Even under tight timelines, stick to investment fundamentals. Look for properties that demonstrate: ✅ Strong Cash FlowFocus on realistic, sustainable rental income — not speculative appreciation. ✅ Location StabilityProperties in growing or supply-constrained markets often perform better over the long term. ✅ Property ConditionOlder properties can be great investments, but major repairs can wreck cash flow projections and timelines. ✅ Tenant ProfileFor leased assets, consider the quality, diversification, and duration of existing tenants. ✅ Exit StrategyKnow your intended hold period and have a plan for refinancing, sale, or further exchange. Remember: A rushed investment is often worse than paying taxes. Don’t abandon your standards in a 1031 chase. Methods for Managing the Identification Process Here’s how seasoned investors successfully tackle the 45-day challenge: 1. Start Before You Sell Engage a commercial broker early. Build a “shortlist” of possible replacements before your sale closes. Line up potential lenders if financing will be involved. 2. Understand the Identification Rules There are three main methods you can use: Three-Property Rule: Identify up to three properties, no matter their value. 200% Rule: Identify any number of properties, as long as their combined fair market value does not exceed 200% of your relinquished property’s value. 95% Rule: Identify more properties without value limits — but you must acquire at least 95% of the identified value. Choosing the right method strategically depends on the size and type of properties you’re targeting. 3. Use Backup Properties Always identify a few more properties than you think you’ll need (within the rule limits). Deals fall through — it’s far better to have backups than scramble at the last minute. 4. Work Closely With Your Team Coordinate daily with your: Qualified Intermediary (QI) Real estate brokers Attorneys Lenders They can help spot title issues, financing risks, or other red flags before you waste time on properties that won’t close. 5. Stay Organized Use a written, date-driven checklist: Date of sale closing 45-day identification deadline 180-day completion deadline Internal review deadlines for property inspection, underwriting, and appraisal Tight processes beat last-minute chaos every time. Final Thought Managing the 45-day identification window in a 1031 exchange isn’t just about ticking boxes — it’s about thinking like an investor under pressure.Start early. Stay disciplined. Stick to good investment fundamentals. With preparation, the right team, and a clear identification strategy, you’ll not only preserve your tax deferral, you’ll strengthen your real estate portfolio for years to come.

Read More »
Articles
Kevin Taylor

Student Loan Borrowing Caps: Before vs. After the One Big Beautiful Bill

The One Big Beautiful Bill Act (OBBB), signed in 2025 and effective for most new loans on July 1, 2026, represents the most significant overhaul of federal student lending in decades. While undergraduate borrowing limits remain unchanged, graduate and parental loans will face far stricter caps, reshaping how families and students finance higher education. Borrowing Caps Before OBBB Under the pre-OBBB system, federal borrowing limits varied by loan type and educational level: Undergraduate students could take out Direct Subsidized and Unsubsidized loans with annual limits ranging from $5,500 to $12,500, depending on class year and dependency status. Lifetime caps were $31,000 for dependent students and $57,500 for independent students. These loans were the foundation of federal aid for most undergraduates. Graduate students faced an annual limit of $20,500 in Direct Unsubsidized loans, but could supplement this with Graduate PLUS loans up to the school’s cost of attendance (COA) minus other aid. In practice, this meant graduate and professional borrowers could finance nearly the full price of attendance, including living expenses, with no fixed annual or lifetime cap. Parent PLUS loans, used by parents of dependent undergraduates, offered similarly generous terms. Parents could borrow up to the student’s COA minus other aid each year, again with no annual or lifetime cap. This flexibility allowed many families to fill large funding gaps but also contributed to rising parental debt burdens. Lifetime borrowing limits across undergraduate and graduate loans typically reached $138,500 for many students, with certain medical or professional programs allowing even higher totals, sometimes exceeding $224,000. This framework gave graduate students and parents substantial flexibility, but it also enabled very high federal debt levels, which OBBB seeks to curb. Borrowing Caps After OBBB (New Loans Starting July 1, 2026) OBBB keeps undergraduate loan limits unchanged, preserving the existing annual and aggregate maximums for Subsidized and Unsubsidized loans. However, it sharply reduces graduate and parental borrowing power: Parent PLUS loans will be capped at $20,000 per academic year per student, with a $65,000 lifetime maximum. Parents will no longer be able to borrow up to the full COA. Graduate PLUS loans will be eliminated for new borrowers. Graduate students will rely solely on Direct Unsubsidized loans, which retain the $20,500 annual limit but now carry a $100,000 lifetime cap. Professional degree programs—including law, medicine, and other high-cost fields—receive a separate ceiling of $50,000 per year and $200,000 lifetime. A new $257,500 universal lifetime cap applies across all federal student loans (excluding Parent PLUS). This replaces the previous system of program-specific aggregate limits. Borrowers with existing Grad PLUS or Parent PLUS loans are grandfathered: they may continue borrowing under old rules for up to three academic years or until their current program ends, whichever comes first. Implications for Students and Families The OBBB Act preserves access for undergraduates but tightens graduate and parental borrowing dramatically. Parents will no longer be able to cover unlimited gaps between aid and the COA, and graduate students will lose the ability to finance the full cost of high-priced programs with federal loans. Medical and law students, who often relied on Grad PLUS to pay tuition and living expenses, may face funding gaps that require scholarships, institutional aid, or private loans. While these changes aim to limit runaway federal lending and encourage cost control, they also shift more responsibility onto families and institutions to bridge the gap between tuition and available federal aid. Additional Resources U.S. Department of Education. “Subsidized and Unsubsidized Loans.” Studentaid.gov The Institute for College Access & Success. “Federal Student Loan Amounts and Terms.” TICAS.org National Association of Independent Colleges and Universities (NAICU). “Frequently Asked Questions about the One Big Beautiful Bill Act.” NAICU University of California Law San Francisco. “Important Federal Student Loan Changes Effective July 1, 2026.” UCLA Law

Read More »
Zending, Boulder Financial Planners and Advisors
Articles
Kevin Taylor

Zending: The Art of Mindful Spending and Lasting Joy

In the quest for financial stability and discipline, it’s common to be besieged by feelings of guilt and unease whenever we spend money on non-essentials. However, there exists a sweet spot where financial responsibility and pleasurable spending merge harmoniously. This sweet spot is known as “Zending,” a fusion of Zen (meaning complete and absolute peace) and spending. This article dives into the harmonious joy of Zending and how it can redefine our relationship with money. Understanding Zending Zending isn’t about spending extravagantly or living frugally. It’s about experiencing genuine happiness and peace in the spending choices you make, rooted in the confidence that you’re living within your means and aligning with your financial plan. The Power of Guilt-free Spending We’ve all been there: the thrill of purchasing followed by the sinking feeling of buyer’s remorse. But imagine a world where every penny you spend is accompanied by a feeling of satisfaction, a knowledge that you’re not compromising your future for immediate gratification. Guilt-free spending isn’t about how much or how little you spend. It’s about ensuring every dollar aligns with your personal and financial goals. The Zending Framework Mindfulness in Finance: Begin with a clear understanding of your current financial status. Be honest about your income, expenses, debts, and savings. This foundation is crucial for any financial plan. Budgeting with Purpose: Rather than a restrictive tool, view your budget as a reflection of your values and desires. Allocate funds for necessities, savings, investments, and personal pleasures. Plan and Prioritize: Establish clear financial goals. This might be a yearly vacation, monthly dinners at your favorite restaurant, or saving for early retirement. Knowing what you’re working towards will make spending and saving more purposeful. Savor Every Purchase: When you buy something within the framework of your budget and plan, relish it. You’ve earned this without compromising your future. Review and Adjust: Like any other strategy, it’s essential to periodically review your financial plan. As life changes, so do our needs and desires. Adjust your plan to stay aligned with your goals. The Joy of Zending in Action Imagine you’ve always dreamt of vacationing in the Maldives. With Zending, you would: Budget for it: Save a portion of your monthly income for this trip. Plan the Details: Research accommodations, flights, and activities, and allocate funds accordingly. Experience the Vacation with Complete Presence: Once you’re on the trip, every experience is enriched with the knowledge that you’ve planned for it. Every dinner, activity, and souvenir is devoid of financial guilt or stress. You get to be fully immersed in the joy you have designed without the concerns for costs, and the ramifications for enjoying your time on this vacation.  Return with Joy: Once back, instead of dreading credit card bills, you return to your regular life, content and ready for your next Zending adventure. Conclusion Zending offers a refreshing perspective on spending. By approaching our finances with mindfulness and intention, we can derive genuine, long-lasting joy from our expenditures. In a world where consumerism often leads to stress and remorse, Zending serves as a reminder that it’s entirely possible to find peace, pleasure, and purpose in the way we spend.

Read More »

Pin It on Pinterest