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Israel's 2025 budget: Smotrich announces changes to how budget built, work to start this week

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Israel's 2025 budget: Smotrich announces changes to how budget built, work to start this week

Finance Minister Bezalel Smotrich announced Sunday a number of significant changes in how Israel’s 2025 budget will be built compared to how the country’s budgets are normally determined and said that talks on the budget would be held directly after the Shavuot holiday.

Per the minister’s instructions, presentations on the budget will be held over two focused days instead of over the course of months. From the start of the process, the governor of Israel’s central bank will participate.  

Smotrich said the budget must focus on moving the country from war to growth by emphasizing high-tech, the real estate market, integrating different populations and increasing productivity in the labor market, fighting the black market to increase the tax base, absorbing immigration, and more.

The budget’s guiding principles will be fiscal conservativeness, responsibility, efficiency, flexibility, and transparency, he said. The minister anticipated that the budget would include significant cuts to many ministries.

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How the war is impacting economic decisions 

“The continuing war and its impact on the economy force us to show discipline and fiscal responsibility, as well as full transparency about the data and the process by which policy is formed and decisions are made,” said Smotrich.

Income Tax and Property Tax Department at the Finance Ministry (credit: OLIVER FITOUSSI/FLASH90)

“I expect my friends in the government and coalition to understand how serious the situation is and help carry the stretcher. I intend to help them to do this by giving them greater authority and flexibility to manage the budgets that remain in their hands,” he added.



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Power Finance's (NSE:PFC) three-year total shareholder returns outpace the underlying earnings growth

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Power Finance's (NSE:PFC) three-year total shareholder returns outpace the underlying earnings growth

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. You won’t get it right every time, but when you do, the returns can be truly splendid. One such superstar is Power Finance Corporation Limited (NSE:PFC), which saw its share price soar 388% in three years. On top of that, the share price is up 23% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 13% in 90 days).

While the stock has fallen 5.4% this week, it’s worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

Check out our latest analysis for Power Finance

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Power Finance was able to grow its EPS at 19% per year over three years, sending the share price higher. This EPS growth is lower than the 70% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It is quite common to see investors become enamoured with a business, after a few years of solid progress.

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The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

NSEI:PFC Earnings Per Share Growth June 24th 2024

We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Power Finance the TSR over the last 3 years was 520%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It’s nice to see that Power Finance shareholders have received a total shareholder return of 210% over the last year. That’s including the dividend. That’s better than the annualised return of 46% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We’ve spotted 4 warning signs for Power Finance you should be aware of, and 3 of them make us uncomfortable.

Of course Power Finance may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.

Valuation is complex, but we’re helping make it simple.

Find out whether Power Finance is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Valuation is complex, but we’re helping make it simple.

Find out whether Power Finance is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Finance

Better late than never: teach your kids good financial lessons

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Better late than never: teach your kids good financial lessons
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Parents spend many years reviewing their children’s report cards. A recent study essentially turned the tables on that, with young adults reviewing their parents’ performances, particularly in regard to financial matters. The findings weren’t good: Gen Z (people between ages 12 and 27) is the least financially confident generation, and a third of them say their parents didn’t set a good example for them.

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There’s a reason for the parents’ poor performance and a reason why young people should feel more confident about their financial futures.

Why many parents set poor examples

Before you blame your parents for not helping you get savvier, financially, put yourselves in their shoes. You might be lamenting that your school never taught you much about money, but your parents likely got even less financial schooling.

According to a 2023 Edward Jones survey, 80% of respondents said they never learned money skills in school. So, like most folks their age, your parents were just doing the best they could.

Many ended up deep in debt or facing other financial troubles, often without realizing how dangerous it is to overuse a credit card and how debt at high-interest rates can balloon over time.

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How parents today can set good examples

Here’s what your parents might have done had they known more about financial matters, and what you might do with your own kids now or whenever you have them:

  • Talk about money frequently – your financial goals, your financial challenges, how you’re overcoming those challenges, your smartest and dumbest financial moves, etc.
  • Show them your household budget and help them learn how much things cost.
  • Have them watch you shop in stores, online, wherever; talk about how you’re choosing to spend your money and point out when you decide to postpone or cancel a planned purchase.
  • Show them how to have fun without spending a lot of money, such as by hiking, playing board games, reading, playing sports with friends, and so on.
  • At the right time, start discussing the power of long-term investing in stocks. Show them how they might become millionaires one day if they save and invest.
  • If you’re an investor (and most of us should be since Social Security will not be enough to provide a comfortable retirement), let them see you investing. Talk about the investments you choose and why you choose them. Perhaps talk about companies of interest together. Eventually, help them start investing, too.

Basically, you want them to grow up fully aware of financial matters and of how to manage money sensibly.

Meet the millionaires next door. These Americans made millions out of nothing.

Why young people have a lot to be confident about

Finally, no matter how much they’ve learned or not learned from their parents, young people don’t necessarily have to despair over their financial futures, because those futures can be quite bright. Why? Simply because young people have a lot of something that’s vital to wealth building, something that most of us have much less of – and that’s time.

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Check out the table below, which shows how money can grow over time. It assumes 8% average-annual growth, though no one knows exactly how quickly the market will grow over any particular period. In the past, it has averaged close to 10% over many decades.

Source: Calculations by author.

Young people should see that once they’re earning money, if they can regularly invest meaningful amounts, they can amass significant sums, which can help them reach all kinds of goals, such as a reliable car, fully-paid home, supporting a family, enjoying a comfortable retirement, and so on.

You – and young people you know – would do well to take some time to learn more about investing. And then teach others.

The Motley Fool has a disclosure policy.

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The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

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Pets make for the best financial advisers and motivators. They force you to be more mindful about your spending, study shows

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Pets make for the best financial advisers and motivators. They force you to be more mindful about your spending, study shows

Pets really are becoming the major alternative to having children. In fact, more than half of pet owners not only consider their pets to be a part of their family, but they say they are just as much a part of their family as a human member, according to Pew Research Center. 

Pets show affection and can give life more meaning—but they undoubtedly become a major line item in a budget, considering the cost of insurance, vet care, food, shelter, and of course, the trendiest bandanas and leashes. Still, having a pet is considerably more affordable than having a child. Parents can expect to pay between $16,000 to $18,000 per year, according to USDA estimates. Pets, on the other hand, cost their owners a little more than $1,300 per year, according to Empower, a financial services company offering planning, investing, and advice. 

While having a pet is more affordable than having a child, these lovable furry friends actually serve as a great catalyst for financial health. Indeed, nearly 40% of people say having a pet inspires them to be more financially responsible, and another 36% says they motivate them to reach their financial goals, according to Empower’s survey of 1,000 pet owners in the U.S. 

This is particularly true for Julio Bedolla, a wealth manager with LourdMurray. He and his wife have six dogs, which “significantly impact our spending,” he tells Fortune

“Regular expenses for food, health care, grooming, and other consistent costs teach owners the importance of budgeting, planning for future expenses, and building emergency funds for unexpected vet trips or paying for vet insurance,” Bedolla says. “Because we plan accordingly, we are able to make it work.”

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Pets can be a primer for having kids

While they’re not ready to have kids, Bedolla says caring for pets gives them “an eye-opening sense of responsibility,” and prepares them for making ongoing financial investments. However, he acknowledges that the cost of having a child is still much greater than caring for a pet, especially when you factor in childcare and education.

But pet parents still have to take into consideration their pets when making other major financial decisions, like buying or renting a home. Not all homes are suitable for pets—or even allow them there. This similarly plays into other major costs such as planning and saving for travel. 

“You need to factor in pet costs, whether it’s boarding them or taking them with you,” Bedolla says.

Good money habits—and ‘not-so-good’ money habits

Owning three cats—and planning to add a puppy to her household in the next month—has inspired millennial public relations specialist Kristi Hedrick to adopt some good money habits as well as some “not-so-good” money habits, she tells Fortune

The good money habits include always having money stored away in case an emergency were to happen with one of her pets. Plus, her cats are on a special diet, so she has to incorporate the cost of their food into her monthly budget. 

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However, “the not-so-good money habits tend to come from wanting to spoil my pets and get them new toys or treats,” Hedrick says. “My animals have plenty of toys, so that’s not always the best way to spend some extra cash that I may have.”

Still, Hedrick and other professionals say it’s “incredibly important” for pet owners to really understand how much it costs to raise a pet. Ali Smith, CEO and founder of dog training company Rebarkable, encourages aspiring pet parents to do their research about the average costs for their breed, as well as any health issues and temperament issues that come with owning that type of animal. 

“If you choose to rescue, be aware that with unknown health and temperament issues, you could be facing large health bills and training bills in order to achieve a happy, harmonious home,” Smith says. “Budget for those.” 

Pet parents spend the most on golden retrievers, beagles, german shepherds, labrador retrievers, and dachshunds, according to Empower.

Other costs of pet ownership stem from lifestyle choices and employment. The Empower survey shows, however, that pet parents are willing to make major life changes with their pets in mind. Nearly 60% of respondents said they switched jobs for more pet-friendly benefits while the pay was the same. And more than a quarter said they would take a pay cut with flexible hours in order to spend more time with their pet.

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“Think critically about your lifestyle,” Smith says. “Do you need support from a doggy daycare? Or a dog walker? All of that costs money. Making that commitment is potentially 14 years of financial commitment. Sure, there’s no college or cars to buy, but [pets] can be a costly luxury in our lives.”

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