Bill Cassidy’s $1.5T Plan: Good News for Retirees?

Good morning and welcome to the One of a Kind Financial Show Daily. I'm Mike Milligan. It's Wednesday, June 24th, and my countdown to age 50 continues. Yesterday, the AI trade cracked. FedEx beat earnings and got punished. Carnival had a record quarter and got punished. And a U.S. senator just floated putting $1.5 trillion of Social Security into the stock market. We've got a lot to unpack, all educational, of course. Let's go.

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Yesterday was the day the tech rally took its first real breath in weeks. The data, the data was remarkable. The NASDAQ Composite dropped 1.32% to 26,166. The S&P 500 fell 0.37% to 7,472. The Dow bucked the trend, up 0.29% to 5,172, helped by banks and industrials. The Russell 2000 small caps actually rose 0.83%. That's a rotation, folks, not a crash. The story underneath: SpaceX fell 16.4%, its third straight down day, erasing over $600 billion of paper market cap from Monday. Alphabet, Google, dropped about 5% on AI spend and talent exit concerns. The Magnificent 7 euphoria from earlier this month is cooling off. It's exactly the kind of moment Alan Greenspan, rest in peace, would have called irrational exuberance. There were 2 earnings stories you need to know. FedEx reported Q4 results that beat expectations. Its adjusted earnings per share of $6.31 and guidance for 11% revenue growth in fiscal 2026 were amazing. The stock fell though 6.34% after hours. Let's see what it does today. Carnival Cruise Line delivered record Q2 revenues and net yields, its strongest quarter in company history, yet the stock dropped 10%. People are spending and having fun on the fun on the Carnival cruise ships, but investors were punished. The educational moment here is, remember, great earnings don't always mean a great stock day. Market price in expectations months ahead of time. When a company beats and raises but the stocks fall, it tells you expectations were already higher than the print. That's why disciplined dollar-cost averaging and broad diversification matter more Than chasing one's earnings reaction.

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There's 3 new stories from my mailbag and my feed that I think you should know about. Number one, that first story, factory job cuts at a financial crisis level. The headline would read, S&P Global flash PMIs landed yesterday. Manufacturing PMI 55.7, services 51.3, both above expectations. But underneath the headline, the factory job cuts were at the highest level since 2009 when you exclude the COVID shock. 3 of the last 4 months have been net negative for manufacturing jobs. S&P economist Chris Williamson said the survey is consistent with an economy struggling to grow much faster than 1% annualized in the second quarter. Why does that matter? Because the headline data is hot, but the labor data is cracking. That is the exact kind of mixed picture that paralyzes the Federal Reserve Open Market Committee, Federal Reserve Board, and FOMC. Story number 2, Lockheed Martin has been down 6% in 2 days. No company-specific news. The driver is the headline though, the US-Iran interim peace deal. Defense stocks sold off because peace, even fragile peace, lowers expected defense spending. Lockheed is now off 23.8% since February 28th, while the S&P 500 is up 7.6% over the same window. That is a perfect real-world example of sequence of return risk. The same calendar year, 2 completely different outcomes depending on what you owned. And then story number 3. Did you see this? Senator Bill Cassidy proposes $1.5 trillion of the Social Security Trust Fund be invested In the stock market. Senator Cassidy, who lost his primary bid to run in the general election for his Senate seat, has now proposed that $1.5 trillion of Social Security trust fund money go into the stock market over 5 years, held in an escrow account with the government, not individuals bearing the risk. He says it could cover 60% of Social Security's unfunded liability over 65 to 70 years. Why now? See, the newest trustees report says the Old Age and Survivor Insurance Trust Fund, Social Security, is projected to deplete by the end of the 4th quarter 2032, several months earlier than last year's report. At depletion, only 78% of scheduled benefits were payable to those in retirement, those 71 million Americans, expecting that benefit. Now hear me, this is not a political endorsement and not a recommendation. I'm educating you about what, about what is being discussed in the Senate. The Bipartisan Policy Center and the Center for Retirement Research have already raised serious concerns about market risk and borrowing costs. The point for you is do not build your retirement plan assuming Social Security stays the same forever. Change is a-coming. Build a plan that works at 100% of the time, or at 70% of Social Security, or at 82%, and then every scenario in between. That's what a one-of-a-kind financial plan would do. We'll build that for you so that you know what you can expect on things you cannot control.

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Let's talk a little real estate today. So with all of what I mentioned previously as a backdrop, today's lesson ties to the news that broke Monday evening. The Senate is advancing a bipartisan affordable housing bill that caps private equity ownership at 350 single-family homes per firm. The US is short 4.7 million homes nationally. That's the real story underneath the FedEx and Carnival news. Here's the simple education framework, the 3 doors of real estate, something I haven't talked about on the podcast before, but something you need to know. Door number 1 is your primary residence. It's not an investment. It's a roof and a forced savings plan. The wealth comes from the leverage, the mortgage, and the time horizon, not the appreciation. With mortgage rates back into the mid-6s, some projecting them to go back to 7 or higher, The math is harder than it was 3 years ago, but the forced savings is real. That mortgage payment, paying off the principal, creates the net equity that helps grow wealth. Door number 2 is house hacking. Very popular if you look on YouTube or any other social media platform. This is where you buy a 2, a duplex, a triplex, or a quadplex, 2, 3, 4 unit properties, live in one unit, Rent the others. FHA financing allows a 3.5% down payment for owner-occupied multifamily. Your tenants pay your mortgage. This is the single most powerful entry point into real estate for someone in their 20s and 30s today, if you've got that down payment. And then door number 3 on the 3 doors of real estate is pure investment property, like a long-term rental, a short-term Airbnb, Or the BRRRR strategy. That is buy, rehab, rent, refinance, repeat. BRRRR is not passive. It is a job. The numbers that matter most are cap rate, debt service coverage, vacancy assumptions, and reserves. A deal like this that empties your reserve account is not a strong deal. That came from a real estate creator I watched this week, and it's exactly right. The lesson is real estate is a wealth engine, not the wealth engine. It belongs alongside index funds, retirement accounts, and your cash stack, not instead of them. Diversification, diversification across asset classes is how you survive in any one market.

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Tonight, After the bell, Micron Technologies will report 3rd quarter earnings. Options pricing are, are showing a 14% move in either direction. That's a lot. The stock is up over 300% year to date though, going in. A reminder, not a recommendation. Expectations are already very high on this stock. And then, and then this morning, 8:30 Eastern, Actually, tomorrow morning, 8:30 AM Eastern, core PCE price index, the Fed's preferred inflation gauge. This is the print of the summer. It's what the Fed's going to be looking like. They're already getting mixed signals from the report that came out yesterday. We're going to see what this brings. To close today, quick personal moment. The markets are noisier than ever, but my plan got quieter. That's the gift of getting older. That's what I'm learning about my move toward 50. You stop chasing every headline, you build the plan, and you let it do its work. Estoy aprendiendo. Always.

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That's your June 24th edition of the One of a Kind Financial Show Daily. Education only, never advice. Build your plan, diversify your doors. And come back tomorrow morning for the core PCE print and how Micron lands. If you want to rent one-of-a-kind financial plan, that's what we do at One Oak Financial. You can go to www.oneoakfinancial.com. If you want to listen to my extensive library of past radio shows that air on the weekend, go to oneoakradio.com. And if you want to learn more about me, where my personal mission is to educate, coach, plan, Go to MikeMilligan.com. I'm Mike Milligan. This has been the One of a Kind Financial Show Daily. This podcast is done for educational purposes only. It is not investment advice and not a recommendation to buy or sell any specific security. Past performance is not indicative of future results. Consult your own licensed financial professional before making any investment decision. I am a certified financial planning professional and the founder of One Oak Financial. As an investment advisor representative with Advisory Alpha LLC, I am licensed to give advice, but that is not what this is for. This is for educational purposes only. Ideas by Mike, doing business as One Oak Financial, is an unaffiliated entity of Advisory Alpha LLC.

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