The Ascend Letter

Planning Corner: Every Dollar Needs a Job

Over the years I have worked with every kind of client. From kids just getting started with investing, all the way to people in their 70s and 80s finishing their estate documents to pass their wealth to family. And across that whole spectrum, I keep coming back to one principle that's foundational to the success of any financial plan, any business, any goal you are chasing.

It sounds almost too simple. You trade your time for a paycheck. The paycheck covers your lifestyle. Whatever is left over gets saved. But break it down, and most people cannot tell you their savings rate, how much they actually need to fund a specific goal, or whether they should be steering more toward one part of their life than another.

Growing up, my parents gave me an allowance. Twenty dollars every couple of weeks. And every time I got paid, my mom sat me down with a binder with three manila envelopes inside. Each one was labeled: Tithing, Long-Term Savings, Short-Term Savings. Each had a percentage on it, the share I had to "deposit" before I could touch a dollar. By the time we were done, my $20 had turned into about $10 I could actually spend.

I hated it as a kid. Now, I wonder why that simple idea gets lost on us as adults.

Most business owners run everything through one account. Money flows in, the bills get paid, and whatever survives at the end they call profit. Individuals do the same thing. The paycheck lands, bills and daily life come out, and you save whatever is left at month's end, if anything.

My childhood envelopes did the opposite. They paid me first.

If you run a business, you can decide you are profitable from day one by routing even 1% of every dollar into a profit bucket before anything else. On paper, you are now profitable. Then you set aside taxes, then operating expenses, and then owner pay. If you work for a company, you can actually save money every month rather than hope there is some left over.

Follow that discipline and a funny thing happens. You start living within your means, and you build real personal wealth that can support whatever life throws at you.

Every dollar should have a job. When you get that deliberate about your cash, that is the moment you start controlling the chaos of running a business or running your household.

The Macro

The 10-year Treasury yield is hitting fresh highs almost daily, this week touching levels not seen in nearly two decades, above 5%. When yields climb this fast, history is not always kind. That kind of move has often been followed by some sort of crisis.

This being said, I do not want to come across as doom and gloom. I genuinely believe this time can be different. We have never had a use case as powerful as AI in our history, and that can change the math.

Consider the scale of what is being built. As a share of the entire economy, spending on AI infrastructure is running at a level we have not seen since the railroads were laid across the country. One Brookings study has it at roughly 3.6% of GDP per year, more than the electrification, interstate highway, and telecom and fiber buildouts COMBINED.

That kind of spending would be terrifying if there were no real demand for what it produces. But I'll tell you a secret. There is INFINITE demand for intelligence.

So rather than brace for doom, I am watching for the opportunities this volatility creates. The chance to put money to work before the market grinds higher over the next few years.