Finance

Rashad Bilal and Troy Millings created “Earn Your Leisure,” a popular podcast, in early 2019 to help spread financial literacy.
The duo, one a former financial advisor and the other a teacher, said it likely takes a seven- or eight-figure net worth to achieve “financial freedom.”
But if you try and fall short, “you’ll still probably be better [off] than you would have been” if you hadn’t tried, Bilal told CNBC.

Troy Millings, left, and Rashad Bilal, co-creators of Earn Your Leisure.
Source: Tyrell Davis

Rashad Bilal and Troy Millings are among a growing class of financial influencers who want to help people be smarter about money.
The duo — a former financial advisor and a teacher, respectively — launched the podcast “Earn Your Leisure” nearly five years ago with a mission to promote literacy around money and entrepreneurship.

About 1 in 7 people lost more than $10,000 in 2022 due to a lack of financial literacy, according to a study by the National Financial Educators Council.
“I realized there were certain things that weren’t taught inside schools — financial literacy and financial education being one of them,” Millings said of the idea to create Earn Your Leisure.
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Today, Earn Your Leisure has expanded to create multiple podcasts, host live events and offer an online educational platform, EYL University. It has 1.4 million Instagram followers and another 1.4 million YouTube subscribers. Its flagship podcast has an average 3 million downloads a month, said Bilal and Millings. It’s also developing a financial literacy curriculum for high schools.
CNBC interviewed the duo — who have been friends since childhood — to talk about personal finance and financial literacy in the U.S.

This interview has been edited and condensed for clarity.

‘Investing is not just for rich and wealthy people’

Greg Iacurci: You told CNBC last year that your “purpose is financial literacy and empowerment.” When it comes to financial literacy, what’s the No. 1 mistake you see people making with their finances?
Rashad Bilal: Not understanding the importance of investing, or [not] knowing how compound interest works.
For a long period of time, investing was something that people looked at more as a luxury, not a necessity, [thinking] if you’re able to invest then you’re in the top 1%, or you have to be wealthy to even consider that.
Investing is not just for rich and wealthy people. It’s for everybody. You can start with smaller balances and dollar-cost average.
Troy Millings: The relationship with money: People don’t understand what to do with it or how to save it. These are simple concepts we’re not taught. When we don’t know what to do, we do what we know, and that’s often spending outside our means. Mistakes are made because nobody is educated.

People may have heard that investing and compound interest are important but might not know why. Can you speak to that?
Bilal: The only way to really achieve financial freedom is if your money is growing without you working for the money. How to achieve that is through investing. One dollar will only be $1 if it’s saved in the bank. But $1 can become $2 if it’s invested.
Most people understand this without even fully realizing that they understand it because they have a retirement plan. The whole point of a retirement plan is investing. You put money into a 401(k), and that money gets invested with the expectation that when you’re 65, 70 years old you’ll have a nest egg you can draw from and live off of in retirement.
The only pathway to not working forever, to having money in abundance, is to find ways to make more money with the money you currently have.

What it takes to achieve financial freedom

Troy Millings, left, and Rashad Bilal, co-creators of Earn Your Leisure.
Source: Greenleaf Multimedia

You mentioned financial freedom. How much money does someone need to be financially free?
Bilal: I think everybody is different. I think it depends on where you live. But I would say, I think you have to be in the eight-figure-net-worth range if you live in suburban or metropolitan areas. I would say around that $10 million figure would provide some level of comfort if other aspects of your life are maintained.
And what is financial freedom?
Millings: I think it’s having enough financial resources to pay for your lifestyle, your living expenses, and also allows you money to invest.
It could differ. It could be in that eight-figure range. Or it could be seven figures. It’s really about having the financial resources to do what you want and invest and create generational wealth. It needs to be something that lasts for generations.

Some people might hear that — seven or eight figures — and think, “How is that possible for me?” Do you think it’s possible for most people?
Bilal: Most people probably aren’t going to make $10 million — I’m just being honest to the question you asked. We have to be honest.
But some people will. This is why we’re big on entrepreneurship, we’re big on investing. You might not be able to accumulate $10 million in your lifetime, but you might be able to accumulate $1 million or $1.5 million. That’s still better than being 70 years old with $20,000 in your bank account.
I think the aspiration towards a certain goal, you might not be able to actually obtain that goal, but if you fall short you’ll still probably be better [off] than you would have been if you had no aspiration and didn’t follow any rules or didn’t try to invest or start a business; you live off what you have. You won’t buy a $1 million home if you only have $1,000 in your bank account. Your life will still be better financially than if you didn’t follow the pathway towards the goal.

Making it ‘cool to be educated’ about money

For the person who’s just starting out investing, how would you suggest they go about it?
Millings: When you’re young, you want to be as aggressive as possible, and when you’re older, you want to get more conservative. Risk mitigation is a huge part of that. We always tell people to start with indexes — an entire index or entire [industry] sector in an exchange-traded fund. That keeps you from having the volatility of watching a stock either appreciate — where you might get some upside — or depreciate, where the risk on the downside is far greater. 

In a recent discussion with entrepreneur and musician Sean “Diddy” Combs, you mentioned that when he met you, he said you “make it cool to be educated.” How do you go about that?
Millings: We’re authentically ourselves, so there’s a natural relatability because people see themselves in us. When people talk about finance they try to make it a language that is upspoken to the masses. Our mission was to democratize it, to make it seem like something that can be very relatable and digestible. We show up the way we are, we wear sweatshirts, we wear hoodies. We represent everybody. It doesn’t feel like it’s only for the elite or it’s only for a select crowd.
It’s the same thing in the classroom: A student has to realize this is someone I can learn from and who I want to teach me. Our audience kind of feels that way when they look at us. We’re also very vocal that we’re learning as well. We don’t know everything, and we bring people on [the show] who can educate us.

‘Having money doesn’t alleviate the problems’

For your podcasts, you’ve interviewed several famous and wealthy people — pro athletes, musicians and entertainers, for example. Are there certain things about finance that seem just as confusing for the rich and famous as for the average person?
Bilal: Yeah, I think a lot of people don’t have a full understanding of finance. It doesn’t matter how much money you make. That’s a common misconception.
Having money doesn’t alleviate the problems, it just makes the problems even worse. Understanding money or having a good understanding of money isn’t something that’s correlated with how much money you have.
Financial literacy is something I think gets metastasized on the highest level. Those are the same issues that everybody else has, it’s just everybody else doesn’t have the opportunity to lose $30 million or invest $20 million into a bad investment and then it goes belly up. If given the opportunity they probably would, it’s just they don’t have it. It’s a bigger microscope on celebrities because they’re public figures.
Is that because wealthy people and celebrities have a capacity to overspend more than the average person?
Bilal: I think it’s not so much just a spending situation. That’s a common misconception also, that they go broke because they spend money lavishly. That’s one part of it. But another major part is they’re actually trying to do the right thing, they’re just misinformed.
You see a lot of people make bad decisions when it comes to investing. They’ll invest in things that might be Ponzi schemes, bad real estate deals, they’ll be led down a bad path when it comes to financial advisors or people they trust. They think they’re doing something productive with their money but they actually are losing money because the investments aren’t fully vetted, they don’t fully understand what they’re investing in.
So I think it’s a little more complicated than just spending habits. It all comes back to not having a basic level of understanding and education when it comes to money.

It seems there’s some relatability there for everyday people.
Bilal: For sure. Look at crypto, for example. If you look at [the cryptocurrency] dogecoin, a lot of people made misinformed decisions. They thought they were doing something productive. They didn’t go into it with the intention of losing money. In their brain it was like, ‘This is an opportunity to turn $5,000 into $20,000.’ And they potentially lost all of their money.
It’s the same thing [with celebrities]. It’s just played out on bigger levels. More

JPMorgan Chase CEO Jamie Dimon will begin to sell one million shares of the bank he runs next year, the company said.
The plan sparked concern that Dimon, who is 67 years old, could be contemplating retirement.
A spokesperson for the New York-based bank said the move wasn’t related to succession planning, and that Dimon has “no current plans” for another sale.

JPMorgan Chase CEO Jamie Dimon will begin to sell one million shares of the bank he runs next year, the company said Friday in a filing.
The plan sparked concern that Dimon, 67, could be contemplating retirement. Dimon is arguably the country’s top banker. He has led JPMorgan since 2005, helping build it into the biggest and most profitable American bank. His stewardship included navigating JPMorgan through two banking crises, helping stabilize the industry by acquiring failed banks.

Before now, Dimon has never sold shares of JPMorgan except for technical reasons such as exercising options. He has also spent his own money snapping up JPMorgan shares in the past.
Shares of the bank slipped 3.6%, worse than the 2.3% decline of the KBW Bank Index.
“This is a reminder that the CEO is getting closer to retirement,” Wells Fargo analyst Mike Mayo said in a note. Dimon may transition from his current role in about three and a half years, if prior statements prove accurate, Mayo added.
A spokesperson for the New York-based bank said the move wasn’t related to succession planning, and that Dimon has “no current plans” for another sale, though his needs could change over time.
Here is the bank’s statement:

Chairman & CEO Jamie Dimon confirmed today that he and his family plan to sell a portion of their holdings of JPMorgan stock for financial diversification and tax-planning purposes. Starting in 2024 they currently intend to sell 1 million shares, subject to the terms of a stock trading plan. This is Mr. Dimon’s first such stock sale during his tenure at the company.
Mr. Dimon continues to believe the company’s prospects are very strong and his stake in the company will remain very significant. He and his family currently hold approximately 8.6 million shares, and in addition he continues to have unvested Performance Share Units relating to 561,793 shares and Stock Appreciation Rights relating to 1,500,000 shares, subject to the terms and conditions of each grant.
Mr. Dimon will use stock trading plans to sell his shares, in accordance with guidelines specified under Rule 10b5-1 of the Securities and Exchange Act of 1934.

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X owner Elon Musk is attempting to create a future in which X users can use the platform for their entire financial lives, according to a report from The Verge.
Musk told his employees that the plan is to roll out the feature in 2024, per the report.
Linda Yaccarino, CEO of X, also said that it is a “full opportunity” in the next calendar year, The Verge reported.

Elon Musk, CEO of SpaceX and Tesla and owner of X, formerly Twitter, attends a U.S. Senate bipartisan Artificial Intelligence (AI) Insight Forum at the U.S. Capitol in Washington, D.C., on Sept. 13, 2023.
Stefani Reynolds | AFP | Getty Images

X owner Elon Musk is attempting to create a future in which X users can use the platform for their entire financial lives, according to a report from The Verge.
Musk told employees in a meeting Thursday that the plan is to roll out the feature in 2024, said The Verge’s report, which also quoted CEO Linda Yaccarino as saying that it is a “full opportunity” in the next calendar year.

“When I say payments, I actually mean someone’s entire financial life,” Musk said in the meeting, according to The Verge’s article, citing audio it obtained. “If it involves money. It’ll be on our platform. Money or securities or whatever. So, it’s not just like send $20 to my friend. I’m talking about, like, you won’t need a bank account.”
X is working on securing money transmission licenses across the U.S., The Verge reported. The company already has licenses for money transmission or money services in nine states, according to the Nationwide Mortgage Licensing System.
Musk’s desire to expand X’s financial component falls in line with his previously laid-out ambition to make X “the everything app,” announced when he rebranded the platform in July. More

Chinese tech giant Huawei reported revenue figures Friday that showed only a 1% increase in the third quarter from a year ago, according to CNBC calculations.
The three-month period ending in September saw Huawei launch a new smartphone that helped the company grow its sales in China, versus Apple’s sales decline, according to Counterpoint Research.
Huawei said revenue for the first three quarters of the year rose by 2.4% to 456.6 billion yuan — the highest for the period since 2020.

Visitors line up in front of the Huawei flagship store on Nanjing East Road, one of the city’s main commercial and tourist area, in Shanghai, China, on Sept. 30, 2023.
Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese tech giant Huawei reported revenue figures Friday that showed only a 1% increase in the third quarter from a year ago, according to CNBC calculations.
That’s despite the company’s release of a popular new smartphone in late August and growing sales within its electric car venture.

Huawei said revenue for the first three quarters of the year rose by 2.4% year-on-year to 456.6 billion yuan ($62.33 billion) — the highest for the period since 2020. U.S. sanctions on the Chinese telco maker started in 2019.
Despite those restrictions on Huawei’s ability to access high-end tech, reviews indicated the company’s new Mate 60 Pro smartphone offers download speeds associated with 5G — thanks to an advanced semiconductor chip.

Huawei quietly launched the phone in China in late August, and declined to share more during a seasonal product launch event in late September.
More than 1.6 million Mate 60 series devices were sold during the first six weeks of sales, according to Counterpoint Research.
The research firm estimated that the majority, about 75%, of units sold were Pro models — that’s about 1.2 million units sold.

Apple, which launched its iPhone 15 in September, is expected to sell 10 million units of the new phone in China this year, for an expected total of 45.5 million iPhone sales in the country, according to Shanghai-based CINNO Research estimates.

The U.S. company saw smartphone sales fall by 10% in the third quarter from a year ago, while Huawei’s sales surged by 37%, Counterpoint Research said Thursday.

Electric car brand

Huawei has also built up a presence in China’s fast-growing new energy vehicle market, which includes hybrid and battery-powered cars.
The company sells its operating system and components, such as for driver-assist tech, to car manufacturers.
In December 2021, Huawei launched its own car brand Aito in collaboration with manufacturer Seres.
Orders for Aito’s latest M7 topped 60,000 as of Oct. 16, just about a month after its release, according to a social media post from Richard Yu, who heads Huawei’s car-related and consumer business.
On Wednesday, Aito said pre-orders for its forthcoming M9 SUV had topped 15,000.

Profit margin increase

Huawei is not publicly traded and did not break out revenue by business segment in its latest update.
The telecommunications giant said it recorded partial gains from the sale of certain businesses, but did not specify which ones.
Huawei said its net profit margin for the first three quarters of the year was 16%. That’s up from a profit margin of 15% reported for the first half of the year, when revenue grew by 3.1% to 310.9 billion yuan.
Third-quarter revenue was 145.7 billion yuan, up by 1% from the 144.2 billion yuan in the year-ago period, CNBC calculations of Huawei figures showed.
Huawei continued its efforts to expand its patent licensing business during the third quarter with Xiaomi and Ericsson deals, which covered 5G connectivity.
The telecommunications giant has rolled out 5G-based business applications in mining, ports and manufacturing, but it was unclear from Friday’s release how much revenue, if any, they generated for the company in the third quarter.
Huawei also pressed ahead in international markets by expanding its cloud business to Saudi Arabia in September. The company said this week it opened a research lab in Finland for testing health and fitness wearables.
The U.S. has maintained the Chinese telecommunications giant is a national security risk due to alleged links to the Chinese Communist Party and the country’s military. Huawei has repeatedly denied the existence of any such risk.
— CNBC’s Arjun Kharpal contributed to this report. More

Chinese smartphone and appliance maker Xiaomi announced late Thursday a new operating system — as it seeks to develop its ecosystem with the imminent release of its own car.
CEO and founder Lei Jun said on Chinese social media Wednesday that Xiaomi would release its car in the first half of next year. He did not specify whether it would be electric.
Chinese electric car company Nio this fall also released its own smartphone, based on Android but customized for greater integration with its vehicles.

The Xiaomi HyperOS logo is displayed on a smartphone.
Sopa Images | Lightrocket | Getty Images

BEIJING — Chinese smartphone and appliance maker Xiaomi announced late Thursday a new operating system — as it seeks to develop its ecosystem with the imminent release of its own car.
Xiaomi shares rose more than 1% in Hong Kong trade Friday morning, building on gains of more than 20% for the year so far.

The new system, called HyperOS, is set to reach consumers Oct. 31 when Xiaomi’s latest phones, wearables and TV sets begin sales in China.
“The system marks a pivotal move forward in Xiaomi’s strategic vision of delivering the ‘Human x Car x Home’ smart ecosystem,” the company said in a release.
CEO and founder Lei Jun said on Chinese social media Wednesday that Xiaomi would release its car in the first half of next year. He did not specify whether it would be electric.

Tech companies have long sought to build customer loyalty with operating systems, such as Apple’s iOS and Google’s Android.
Chinese telecommunications giant Huawei developed its own operating system, called HarmonyOS, in a bid to replace Android. The company makes its own suite of smartphones, laptops, tablets and television sets, while selling the software for electric cars manufactured by partners.

In late September, Huawei claimed the latest version of its operating system had surpassed 60 million users. Overall, Huawei claims HarmonyOS now runs on more than 700 million devices.
Chinese electric car company Nio this fall also released its own smartphone, based on Android but customized for greater integration with its vehicles.

Read more about China from CNBC Pro

Xiaomi rose to fame for its affordable smartphones and MIUI user interface, based on open source Android.
The company said the core of its new HyperOS system is “formed by Linux and Xiaomi’s self-developed Xiaomi Vela system.” The press release’s only mention of Android was that HyperOS allows for “more stable frame rate and lower power consumption” compared to the stock version of Android.
Xiaomi also touted HyperOS’s processing speed and security, and listed a number of ways in which a smartphone, car and laptop could easily share content and access each other’s cameras on the new system.
In recent years, Xiaomi has grown its appliance and consumer electronics business to account for about 22% of overall revenue in the second quarter, versus just under 37% for smartphones.
On Thursday, the company released a 3,999 yuan ($546) smartphone as well as a 1,999 yuan washing machine and a 2,999 yuan refrigerator. Xiaomi has an app for letting customers remotely control appliance settings.

Correction: This story has been updated to reflect that in late September, Huawei claimed the latest version of its operating system had surpassed 60 million users. More

Health savings accounts carry a three-pronged tax advantage.
To keep those tax breaks intact, consumers must use their HSAs for qualified health expenses.
Health insurance premiums generally don’t count.
There are some exceptions: People who are on Medicare, receiving unemployment benefits, paying for long-term care insurance or getting COBRA coverage can pay premiums with HSA funds.

Hoozone | E+ | Getty Images

What are HSAs?

HSAs carry a triple tax advantage: Account contributions are tax-free, as are investment earnings and withdrawals if used for qualified expenses.
Consumers can use HSA funds for a non-qualified purchase — but they’d lose a prong of the three-tiered tax benefit. A withdrawal would be taxed as income, similar to the way a pre-tax 401(k) or individual retirement account works.

In an ideal world, consumers would be able to fully fund their HSA each year and pay for current health costs out-of-pocket, leaving the accounts untouched until retirement, according to financial advisors.
“The compounding of earnings could fund all your health care when you’re old,” said Carolyn McClanahan, a physician and certified financial planner, based in Jacksonville, Florida.
But it’s not always possible to use HSAs that way — especially for lower and middle earners who may not be able to shoulder those expenses. HSAs are typically paired with high-deductible health plans which, depending on the plan, could generate big bills for medical care.
Here are four cases in which HSA funds can be applied to premiums:

1. COBRA premiums

Premiums for health-care continuation coverage such as COBRA count as a qualified expense, according to the IRS.
COBRA lets people who lose health benefits — due to circumstances like job loss, reduction in the hours worked, jobs transitions, death or divorce — continue their workplace health coverage on a temporary basis.

COBRA coverage typically allows consumers to keep the same health-care providers, but the coverage is often pricey.
When employed, workers generally only pay a share of the total premium, with the rest subsidized by their employer. With COBRA coverage, however, individuals may have to cover the full premium, up to 102% of the cost to the plan.
The total average premium for single coverage through a workplace plan in 2023 is $703 a month, or $8,435 a year, according to KFF, a nonprofit health data provider. For families, it’s $1,997 a month, or $23,968 a year.

2. Premiums while on unemployment

Health premiums paid by someone receiving unemployment compensation under federal or state law are also eligible.
These might be premiums for COBRA or a health plan purchased over an Affordable Care Act marketplace, for example.

3. Medicare premiums

Medicare premiums for people age 65 and older are also qualified, according to the IRS.
This would include premiums for Parts A (hospital insurance), B (medical insurance) and D (prescription drug coverage).
However, premiums for Medicare supplemental health policies — like Medigap plans — aren’t qualified.

ATU Images | The Image Bank | Getty Images

“The big mistake I see over and over is people thinking they can use HSAs for Medigap expenses,” McClanahan said.
Medicare beneficiaries don’t have to pay their premiums directly with an HSA to get the benefit. They can pay from their Social Security checks or from a bank account, for example, and reimburse themselves with their HSAs later, McClanahan said. Keep records and receipts of all these transactions, she advised.
There’s an additional caveat: If the HSA owner isn’t 65 years or older, then Medicare premiums for a spouse or a dependent who is 65 or older generally aren’t qualified, the IRS said.

4. Long-term care premiums

Consumers can also use their HSAs to pay for long-term care insurance premiums.  
There are dollar limits on qualified premiums on based on age. Here was the breakdown for 2022:

Age 40 or under — up to $450
Age 41 to 50 — $850
Age 51 to 60 — $1,690
Age 61 to 70 — $4,510
Age 71 or over—$5,640

The age corresponds to the person for whom the premiums were paid. The dollar limits are updated annually.
The insurance must be a “qualified long-term care insurance contract,” as defined in IRS Publication 502.
Ideally, consumers would pay out of pocket for their long-term care premiums before they retire, McClanahan said. However, it generally makes sense to use an HSA to pay these qualified premiums if they’re retired and now living off their savings, she said. More

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European Central Bank President Christine Lagarde is giving a press conference following the bank’s latest monetary policy decision.

The ECB ended its run of rate hikes on Thursday after 10 consecutive increases, keeping its key rate at a record high of 4%.
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Less than three weeks since Hamas plunged Israel into war, conflict is taking a toll on the country’s economy. The shekel has sunk to its lowest level against the dollar in more than a decade, prompting Israel’s central bank to sell $30bn of foreign-exchange reserves to prop up the currency. The price of insuring the country’s debt against default has rocketed. Firms from builders to restaurants have shut. On October 19th the finance ministry outlined plans to ramp up defence spending and provide for those pushed out of work. Four days later the central bank cut its growth forecast for the year from 3% to 2.3%.Since war is not just fought by military forces, but also by economic ones, an important question hovers over all this activity. Can Israel withstand the economic pain? The country’s clashes with Hamas since withdrawing from Gaza in 2005 do not provide much of a guide. In each case billions of shekels—a mere fraction of gdp—were spent on the military and repairs. The conflicts did not pose a threat to the country’s economy, which has long had one of the highest incomes per person in the Middle East.The scale of Hamas’s attacks on October 7th, and the likely ensuing conflict, is therefore pushing economists to the history books. In 1973 the cost of weapons and drafting 200,000 army reservists for the Yom Kippur war brought Israel to the brink of financial collapse. The country’s central bank reckons that, in 2002, a single year of intifada (Palestinian uprisings that ran intermittently from the late 1980s to the 2000s) cost 3.8% of gdp.To dodge disaster, Israeli officials must face up to three challenges. The first is employment. There are not enough workers to support both the economy and the war. Since October 7th the armed forces have mobilised more than 360,000 reservists, or 8% of the country’s workforce—a bigger call-up than in 1973. Most have left jobs, producing an enormous hole in the economy. Worse, the recruits are some of Israel’s most productive workers. Start-Up Nation, an Israeli charity, reckons that a tenth of tech workers have been called up. Workers in the industry are a quarter more productive than the average in the oecd club of mostly rich countries. By contrast, those in the rest of the economy are two-fifths less productive. Just a handful of reservists are from ultra-Orthodox communities in which employment is shunned.There is another source of labour shortages. Many of Israel’s low-skilled jobs are done by Palestinians from the West Bank, some 200,000 of whom work in either Israel or its settlements. But unrest in the West Bank means that many workers are not being allowed across the border, and they may begin to strike. During part of the second Palestinian intifada, which lasted from 2000 to 2005, missing Palestinian workers were one of the biggest brakes on Israeli growth, according to the imf.Moreover, there are few workers with which to replace reservists and Palestinians, since Israel’s labour market is ultra-tight. According to the central bank, which has spent the past few months raising interest rates to cool the economy, unemployment is at 3.2%. Strict labour laws mean that firms can only hire temporary replacements for those on military duty—not an attractive option. Investors worry about capital flooding away from “Silicon Wadi” and back to its Californian namesake. Start-Up Nation reckons that 70% of tech firms are struggling to function. The risk is that, when the war finishes, there will be fewer jobs to which to return.A second challenge for policymakers is the collapse of private consumption. Amid uncertainty and fear of repeat attacks, people have changed their consumption habits by staying at home. For nearly three weeks, restaurants and shopping malls have been empty. Those with the workers to open have discovered there are few customers. Tourism, Israel’s main business aside from tech, has screeched to a halt. Entire towns along the border with Gaza and Lebanon have been cleared out, putting a stop to economic activity. In order to support firms, all but the biggest businesses that suffer because of the war will receive covid-style grants to cover fixed costs. vat payments have been deferred. Workers who used to toil in areas now deemed unsafe will get handouts.That brings the final challenge for Israeli policymakers: managing the fiscal costs of conflict. Rescuing businesses, paying reservists and housing the population of entire villages in hotels will take its toll. An enormous increase in defence spending will be required in order to finance a ground invasion this year, and stock Israel with enough weapons to feel secure next year.Israel’s debt is currently at around 60% of gdp, a modest ratio for somewhere so rich. Even assuming that the war continues to the end of the year, it is forecast to rise to a mere 62%. The central bank has a healthy $170bn of foreign-exchange reserves. On top of this, America will help, assuming that President Joe Biden is able to unlock the $14bn he is asking for in military aid from Congress. Yet the longer the conflict continues, the more risks will grow. In 2024 Israel’s primary deficit is forecast to jump from 3% of gdp to 8%. The country’s economy had been on the rocks before Hamas’s attack. The government’s revenues were down by 8% in September, after a tough first eight months of the year. Now the cost of borrowing is rising and the tax base is crumbling. A longer war will mean more destruction, and reconstruction will not come cheap.Now or neverThe government will not be able to pay its way for ever, which is one reason why a chorus of local politicians insists that a ground invasion of Gaza ought to proceed straight away. Although, in the next few months, households and firms will receive generous financial support, conflict is draining labour, capital and expertise from Israel’s economy faster than it can be replaced. Other economies may have withstood far greater damage in pursuit of military victories in the past, but that will be little consolation to those forced to bear the costs in Israel this time around. ■Read more from Free exchange, our column on economics:Do Amazon and Google lock out competition? (Oct 19th)To beat populists, sensible policymakers must up their game (Oct 12th)To understand America’s job market, look beyond unemployed workers (Oct 5th)For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More