Latest news with #HafeziCapital
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class
Yahoo
27-05-2025
- Business
- Yahoo
8 Items To Stock Up on Now in Case of Tariff-Induced Shortages
Plenty of Americans have felt 'tariff whiplash' over the last three months, given the speed of policy changes out of the White House. Amidst all the continued uncertainty, should you stock up on certain goods before tariffs drive up prices? Experts say the answer is yes. Read Next: For You: Consider boosting your supply of these items before import taxes make them more expensive — or unavailable entirely. If you need it, buy it now, said Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'These shortages may be worse than the ones we experienced during COVID-19 and last longer if we do not resolve the trade war,' Hafezi added. Discover Next: The same goes for any pharmaceuticals your family requires. Many active pharmaceutical ingredients come from overseas, especially China and India. 'Consumers should purchase anything that is critical to them ahead of time, because it may become impossible to find,' Hafezi explained. Even prescription and over-the-counter medicines that you can still buy may spike in price as tariffs hit with full force. Less than 1% of the toys bought in the U.S. are actually produced here, according to Even more worrying for consumers? Around three-quarters of those toys come from China. The numbers get even more bleak for Christmas decorations. China produces 87% of America's Christmas decorations, per Reuters. In fact, the orders for holiday decor usually come in by now. But with 145% tariffs on imports from China, many U.S. companies have suspended their orders. Even if the world's two largest economies agree to a trade deal within the next 60 days, it may be too late for companies to catch up on their holiday supplies. 'Measuring cups, spatulas and food storage containers are usually imported and often replaced,' said Deidre Popovich, Professor of Marketing at Texas Tech University. Import duties will pinch supply and send prices upward, as companies pass the tariffs along to consumers. 'Buy extra containers, utensils, and anything that's looking worse for wear in the kitchen now,' Popovich added. George Carrillo, CEO of the Hispanic Construction Council, explained just how much of America's food comes from abroad. 'Grocery staples like tomatoes and avocados from Mexico will become pricier and possibly harder to find, driven by higher import duties and disrupted shipping. The same goes for coffee and chocolate from South America,' he said. His advice: stock up on essentials that last like olive oil, rice, canned goods and coffee and freeze produce like berries. Carrillo said most of our (currently) cheap apparel like socks, underwear and shoes come from tariff-hit countries. 'Nearly 38 percent of footwear imports to the U.S. come from China alone,' he said. Popovich also urged consumers to stock up on underwear and other apparel. 'Buy basics for growing kids, seasonal transitions, or to replace worn items now,' he explained. If your family includes four-legged members, you may want to stock up on supplies for them too. 'Leashes, grooming tools, toys and even some food packaging rely on imports. Consider doubling up on your go-to items or rotating in some backups now,' Carrillo said. Maybe the Trump Administration will finalize trade deals with countries like China soon. Or perhaps our everyday essentials will get dramatically more expensive. Consider hedging your bets by buying what you can now. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on Sources Babak Hafezi, Hafezi Capita. Deidre Popovich, Texas Tech University. George Carrillo, Hispanic Construction Council. More From GOBankingRates Warren Buffett: 10 Things Poor People Waste Money On How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on 8 Items To Stock Up on Now in Case of Tariff-Induced Shortages Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Automotive
- Yahoo
6 Ways Trump's Tariffs Make the American Dream More Expensive
The American Dream once meant a home, a car, putting the kids through college and a comfortable retirement. Find Out: Try This: However, President Donald Trump's tariff policies threaten to inflate the cost of the American Dream and reshape the path to financial security. Some experts said Trump's economic and trade policy shifts make once-attainable milestones more expensive, harder to plan for and out of reach for many middle-class families. Here are the six ways Trump's tariffs make the American Dream more expensive. Tariffs on materials like steel, lumber and copper directly raise construction costs. These costs are passed on to buyers and increase the price of new homes and renovations. 'Tariffs squeeze the dream by inflating the base layer,' said Shane Lucado, CEO of InPerSuit Inc., a legal technology company. 'You slap a tariff on construction inputs and suddenly a $280,000 starter home costs $317,000 before interest.' Lucado explained, 'That jump kills the down payment plan for a first-time buyer working with a $60,000 salary. Stretching budgets is one thing. Rewriting your life math is another.' Be Aware: Tariffs raise car prices because they increase the cost of parts and materials. For consumers, it means more debt, longer loan terms and fewer options. 'We have to remember the price increase is not only on the end product, but also on the parts and raw materials that come from all over the world prior to assembly,' said Babak Hafezi, CEO of HafeziCapital. 'Thus, you are paying multiple tariff taxes for the same product.' Hafezi added, 'As costs increase, people may be forced to buy smaller cars with less options — because of affordability — or be forced into the used car market.' Tariff-driven price increases on starter homes, cars and essentials make it harder for first-time buyers to gain traction, especially without the equity or stable wages that previous generations enjoyed. 'Younger Americans catch the worst of it, because they are the first generation paying inflated prices on everything without the benefit of long-held equity,' Lucado said. 'Their parents bought homes when rates were 4% and wood was cheap. 'Now, 20-somethings are getting boxed out before they even apply. … When 50% of your take-home pay is housing and transportation, the rest of the dream starts evaporating.' Achieving the American Dream depends on stable access to goods that make those goals possible. However, as tariffs ripple through supply chains, they drive up prices, delay essentials and put the American Dream on backorder. 'To absorb higher costs, companies will likely have to raise prices and alter supply chains, in turn raising prices for consumers, affecting availability and delaying shipping times,' said Javier Palomarez, CEO of the United States Hispanic Business Council. Delayed supply chains cause middle- and low-income households to strain their budgets and review their purchase preferences, said Michael Podolsky, consumer advocate and co-founder and CEO of PissedConsumer. 'Some shoppers already report facing additional costs and delayed deliveries with customers, leaving them with higher bills,' Podolsky said. 'In some cases, parts for things like appliances or home products become harder to purchase, which directly affects essential purchases.' Homeownership is central to the American Dream. However, tariffs are making it more expensive to hold on to. When emergency repairs spike due to higher material costs, even insured homeowners can find themselves facing unexpected bills that threaten their financial stability. 'If your roof leaks or a storm damages your home, those repairs can become hundreds or thousands of dollars more expensive due to tariffs,' said Elena Novak, a real estate analyst at PropertyChecker. Novak added, 'Insurance often won't cover the full cost if prices have jumped. So, for many families, it's not just about buying home, it's about affording to maintain it.' The American Dream depends on long-term planning, such as saving for a home, a child's education or retirement. However, when tariffs drive up everyday costs, families are forced to delay those goals, using savings to manage immediate needs instead of building a stable future. 'You want to plan for childcare or a second car, but those plans get wiped when a supply-chain shock adds $7,000 to your renovation budget,' Lucado said. 'You start reshuffling savings to patch short-term damage instead of building toward anything long-term. That erosion does not show up in headlines. It shows up in delayed milestones, smaller families and crushed expectations.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses 4 Things You Should Do if You Want To Retire Early Warren Buffett: 10 Things Poor People Waste Money On Sources Shane Lucado, InPerSuit Babak Hafezi, HafeziCapital Javier Palomarez, United States Hispanic Business Council Michael Podolsky, PissedConsumer Elena Novak, PropertyChecker This article originally appeared on 6 Ways Trump's Tariffs Make the American Dream More Expensive Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
