Name: 金融教育者だけど「お金や投資」について質問ある？ | Tech Support | WIRED Japan
Uploaded: 2025-03-23T09:31:42.000Z
Duration: 14 min 52 s
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I'm Kevin Matthews II, author and financial educator.

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Today, I'll be answering your questions from Twitter.

At Asarellis asks, are we going into a recession and what does recession mean again?

A recession, by definition, is two consecutive quarters of negative GDP, that is gross domestic product, is essentially the amount of stuff we produce as a country.

Q1 of 2022 was negative and then Q2 of 2022 was also negative.

So technically, yes, we are in a recession.

One thing that's stopping us from officially calling this a recession is the National Bureau of Economic Research.

They take in a number of factors, including GDP, unemployment, consumer spending, and other factors.

And so far, they have not yet declared the official recession.

At I'm Adultish asks, seriously, who is trusting me with a credit card and how on earth is my credit score calculated?

I don't know who's trusting you with a credit card.

However, I can tell you how your credit score is calculated.

So there are five main factors. 35% of it is based on your payment history.

30% of it is going to be your credit utilization.

This is the amount of the credit limit that you are using.

Generally, you wanna stay below 20 to 30%. 15% is credit length.

How long have you held this particular credit line or credit card open?

This is why if you have had a credit card for several years and you close one, that's gonna bring down the average credit length. 10% is new credit.

So this is when you apply for a new credit card.

Your score does tend to dip during those times.

This is the mix between credit cards, mortgages, student loans, and other things.

They wanna make sure that you can pay different types of debt and you have a diversified credit portfolio.

At financially underscore bot asks, how soon do I need to start saving for retirement yesterday?

You wanna make sure that you are taking advantage of time because time is your biggest asset.

So the longer you invest, the more you're going to have compounding interest.

Compounding interest is when your money makes money.

So for example, let's say I make $100 and I receive 10% interest on that.

The next time that I take that money and invest it and get 10% again, that $10 also makes 10%.

So one of the pushbacks I get when people ask this is, well, yeah, you gotta wait 20 years or 30 years for that to pay off.

However, the time is going to pass anyway.

And 10 years from now, you're gonna wish you started 10 years ago.

At Stan said airport, how do you become a millionaire?

So becoming a millionaire is essentially having at least $1 million in net worth.

There are 7.5 million Americans who have reached millionaire status.

That's about 2.5% of the entire US population.

Now, how you do this, there are multiple ways.

Business ownership, the stock market and real estate are the most common ways to become a millionaire.

And the more time you take, the easier it's going to be.

And the more you can take advantage of compounding interest.

Robert Reich asks, is our tax system rigged for the rich?

18 billionaires exploited tax loopholes to get federal stimulus checks at the height of the pandemic.

There are plenty of tax breaks that disproportionately impact and help those who are wealthier.

One of the most famous examples is the fact that you can write off a portion of your mortgage interest.

Those who do not have the money to buy homes do not get this particular advantage.

Another one that tends to get a lot of news coverage is the capital gains tax rate.

So if I make money from buying and selling stocks, the highest tax bracket that I would pay is 20%.

However, if I took that same income and worked a regular nine to five job, the highest income rate there is 37%.

If you are a multimillionaire or a billionaire, in many cases, a lot of your wealth is usually tied up into a stock.

If you were to sell that stock, that means that you would pay taxes on it.

However, what some people do is loan themselves the money based on the value of that stock.

Because when you are receiving a loan, you're not paying any taxes on it because it doesn't count as income.

That's another way that very wealthy people tend to manipulate the tax code and kind of get around things so that they can lower their tax burden.

At Warren Myers asked, why do so many people go to college when the return on investment is so poor?

When you look at the median return on investment for a lifetime for those who went to college, the median return is 287%.

However, it is negative 41% in the first 10 years.

So over time, most college degrees do pay off.

When we talk about return on investment, especially for a college degree, this is a relationship between how much you make from having that degree and how much you paid.

Either lower the cost by going to an in-state state school.

Sometimes it's going to a community college and you're lowering the cost for that degree.

Or you can make significantly more money for paying the exact same cost.

This is why you see some engineering majors, those who went to school for engineering, they have a higher return on investment because their degree pays more.

However, across the board, I think we can all agree that college is also too expensive and should be made more affordable across the board.

At alawasanu underscore esq asked, can someone explain what a treasury bond is to me like I am a five-year-old?

So I'm gonna do my best dad impression on how I can explain a treasury bond to a five-year-old.

A treasury bond is a loan that you make to the US government and the US government is going to promise to pay you back on a certain date.

And also during this time, they're going to guarantee you interest on that principle, on the amount that you loan.

Now, treasury bonds are considered to be among the safest investments in the world because as long as the US government is collecting taxes, you are going to get some portion of your investment back.

When we're talking about treasury bonds, your returns are typically pretty low.

Right now for a 10-year treasury bond, you're looking at close to 3%.

So you could invest $100 and just get back three.

That's not necessarily motivating because inflation is above 8%.

So for most investors, especially those on the younger end, usually wanna take on more risk.

Maybe that's a stock, maybe that's an index fund to gain higher returns and are more likely to build wealth because a treasury bond isn't necessarily the best way to grow your money, but it is one of the best ways to protect your money.

At Max Sebasti asked, how much debt is too much debt?

If you are bringing in $10,000 per month and $4,500 of that is going to debt payments, then that is far too much because that is gonna leave you at 45% on your debt to income ratio.

When you do that and you are applying for a loan, then they're going to look at this debt to income ratio because they wanna make sure they're gonna get their money back for their loan.

So they do pay a lot of attention to that debt to income ratio.

You hit above 43%, that's gonna raise a red flag.

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金融教育者だけど「お金や投資」について質問ある？ | Tech Support | WIRED Japan

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