Wisdom for Life

What is going on in the world? Well, more specifically, what is going on in the world as it relates to your finances? Sometimes a picture is worth a thousand words — so here are 3 charts that help tell that story.

1.) Holding cash is not the answer for long-term goals. Why? Long-term goals are going to cost money in 2035 dollars, or 2045 dollars, or 2055 dollars…(you get the point)

What do we know about dollars 10, 20, and 30 years from now? They’re going to be worth less than they are today.

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The below chart shows the difference between what a money market fund earned and what inflation was. When the below chart is negative, it means that your money market fund earned less than inflation. When the below chart is positive, it means your money market fund earned more than inflation.

Bottom line: Right now, cash / money market funds are earning 0.33% more than inflation, which is essentially nothing. Put another way, you’re just treading water in a money market fund (because of inflation) vs. actually growing your money.

Takeaway → You should still hold a money market fund for known expenses in the next 0-24 months. But for goals beyond 24 months, it makes sense to take a deeper look at how your money is allocated.

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2.) A meaningful portion of your return comes from dividends. How meaningful is the contribution from dividends?

Over the last 10 years, if you owned the S&P 500 and didn’t re-invest any of your dividends, you would have earned a return of 238%. Not bad, right?

If you re-invested your dividends that whole time, your return would be 301%.

That’s a whopping 63% of additional return just by re-investing your dividends. (which we do on a consistent basis in your portfolio that we mange for you)

Takeaway → Dividends are an important component of your total portfolio return.

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3.) Since the beginning of 2025, companies based outside the United States have had a higher overall return than companies in the S&P 500.

Since 1/1/2025, companies in the MSCI All Country World Index (i.e. the whole equity market outside the United States) is up almost 46%, while the S&P 500 is up 23.5%.

It’s a relatively short time period, but is evidence for why we invest globally.

Last tidbit: Many of you are probably working on confirming travel plans for summer trips, which often includes booking flights. While it may feel like flights are significantly more expensive than they were a few years ago (and in many cases, they are), it is not flowing through to the bottom lines for airlines.

The below chart shows the annual profits for the big 4 US airlines, and as you can see, other than the COVID downturn, airlines are not producing significantly more profits than they did 10 years ago.

So why are flights so much more expensive than a few years ago? Fuel costs and labor costs are up significantly the past few years for airlines, which has hurt their ability to grow their profits.

Another astounding fact? Delta Airlines was around 45 times more profitable than American Airlines was in 2025. ($5 billion of profits for Delta vs. $111 million of profits for American Airlines)

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Thanks for reading,

Jack O'Connor, CFP®