Money For the Rest of Us Facing a Financial Squeeze: What Harvard’s Response Can Teach the Rest of Us
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May 14, 2025 Discover how Harvard is tackling its financial crisis with budget cuts and strategic endowment use. The discussion reveals insights into how elite universities manage investments and maintain intergenerational equity. Learn practical financial strategies that individuals can adopt during economic challenges. The podcast also highlights the importance of prudence and adaptability in both institutional and personal finance management.
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Harvard's Multi-Pronged Crisis Response
- Harvard is reducing spending and preparing staff and program cuts in response to financial pressures.
- Tapping into reserves and borrowing against endowment assets are also strategies used to manage cash shortfall.
Apply Harvard's Crisis Tactics
- In a financial crisis, reduce expenses, tap emergency savings, borrow prudently, or sell assets.
- Use Harvard's example to manage personal financial hardship flexibly and responsibly.
University Endowment Returns Explored
- University endowments averaged a 6.9% annualized return over 20 years, less than the global stock market.
- Long-term returns roughly equal a balanced 78% stock and 22% bond portfolio, showing diversification benefits.