FOMC: Interest Rates Remain Steady

Posted on March 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

BREAKING NEWS!

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The Federal Reserve just opted to hold interest rates steady as officials reckon with fearful markets and concerns of an economic slowdown sparked by the trade wars launched by President Donald Trump and his efforts to overhaul and dismantle government agencies.

After a two-day meeting of its monetary policy committee in Washington, D.C., the Fed announced it would hold its rate target at a range of 4.25% to 4.50%. Investors anticipated the move. The Fed’s target rate remains a full percentage point lower than it was when the Fed pivoted to cutting rates last September.

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On Personal Financial Planning Ratios

Posted on March 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Rocking Financial Planning … Old School Advice!

DEM tieBy Dr. David E. Marcinko MBBS MBA MEd CMP®

The economic platitude of the past, such as don’t spend more than 15-20 percent of your net salary on food, or 5-10 percent on medical care, among others, have given rise to the more individualized personal financial ratio concept. Personal ratios, like business ratios, represent benchmarks to compare such parameters as debt, income growth and net worth.

According to Edward McCarthy MIB CFP® – a personal financial expert from Warwick, Rhode Island whom I interviewed about a decade ago – the following represented useful ratios for the lay as well as medical professional [personal communication].

The Ratios: 

  • Basic Liquidity Ratio = liquid assets / average monthly expenses. Should be 4-6 months, or even longer, in the case of a medical professional employed by a financially insecure HMO. In a low interest rate environment, iMBA Inc offers 12-24 months for consideration.
  • Debt to Assets Ratio = total debt / total assets. A percentage which is high initially, and should decrease with age as the medical professional approaches a debt free existence
  • Debt to Gross Income Ratio = annual debt repayments / annual gross income. A percentage representing the adequacy of current income for existing debt repayments. Medial professionals should try to keep this below 25-30%.
  • Debt Service Ratio = annual debt re-payment / annual take-home pay. Medical professionals should try to keep this ratio below about 40%, or have difficulty paying down debt.
  • Investment Assets to Net Worth-Ratio = investment assets / net worth. This ratio should increase over time, as retirement for the medical professional approaches.
  • Savings to Income Ratio = savings / annual income. This ratio should also increase over time, especially as major obligations are retired.
  • Real Growth Ratio = (income this year – income last year) / (income last year – inflation rate). It is desirable for the medical professional to keep this ratio growing faster than the core rate f inflation.
  • Growth of Net-Worth Ratio = (net worth this year – net worth last year) / net worth last year – inflation rate. Again, this ratio should stay ahead of inflation.By calculating these ratios, perhaps on an annual basis, the medical professional can spot problems, correct them, and continue progressing toward stated financial goals.

Assessment

Now, after ten years, are these traditional ratios and advice still valid today: why or why not?

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Conclusion

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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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LIFE INSURANCE: Split Dollar Plans

Posted on March 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Split-Dollar Life Insurance: An arrangement under which a life insurance policy’s premium, cash values, and death benefit are split between two parties—usually a corporation and a key employee or executive. Under such an arrangement an employer may own the policy and pay the premiums and give a key employee or executive the right to name the recipient of the death benefit.

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Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policy holder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance.

Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

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FINANCIAL ADVISORS & MEDICAL MANAGEMENT CONSULTANTS: Marcinko & Associates, Inc

Posted on March 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

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DAILY UPDATE: US Stock Markets Routed

Posted on March 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

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US stocks pulled back on Tuesday, led by a nearly 2% decline in the NASDAQ, following two days of gains as investors concerned about an economic slowdown looked to the Federal Reserve’s policy meeting for insights.

The tech-heavy NASDAQ Composite (^IXIC) plummeted about 1.7% as Nvidia (NVDA) shares fell roughly 3% as its annual GTC event failed to impress investors. Other “Magnificent Seven” names also dragged down the tech-heavy index. Notably, those stocks are having their worst quarter in more than two years.

The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) also moved to the downside on Tuesday, dropping about 0.6% and 1.1%, respectively.

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Uncertainty still dogs markets as investors debate whether the sell-off that pushed the S&P 500 into correction territory is over. Traders now turn their attention to the Fed’s two-day policy meeting, which kicked off on Tuesday, for clues on the health of the economy and potential tariff risks.

Policymakers are largely expected to hold rates steady in their decision on Wednesday.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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