This Online Brokerage Will Pay You $3,500 Just To Open An Account

guardianpub on January 31, 2023

Online brokerages are battling each other to win your account. And some are willing to pay up for it.

Surprisingly lucrative bonuses are up for grabs if you open an account with a brokerage or refer a friend to an online broker. Most of the major online brokerages are doing it, including E-Trade, Charles Schwab (SCHW) and Ally Financial (ALLY).

Morgan Stanley’s (MS) E-Trade is the most generous. It’s handing out up to $3,500 if you fund an account with $1.5 million or more.

But don’t worry. Even if you don’t have a million bucks sitting around, brokerages will still pay you.

In IBD’s 2023 Best Online Broker survey, respondents rated the attribute incentives/discounts/pricing 12th out of 18 traits. But everyone loves free money.

Online Brokerages: Bonuses Aren’t Just For Millionaires

Don’t assume you need to be a millionaire for brokerages to offer incentives for your account.

Take E-Trade, for instance. The brokerage pays up the more you put in, but still has attractive offers for lower amounts. E-Trade will pay you $50 for opening an account with as little as $5,000 in it. If you’re able to pony up $20,000 for a new account, that bonus doubles to $100. The bonus keeps rising, reaching $300 for a $100,000 account and $1,200 for a $500,000 account.

To get the bonuses, make sure you enter the BONUS22 code in your application. You must also fund the account in 60 days.

Investor Incentives

Some online brokerages, in fact, are paying ongoing incentives that might appeal most to newer investors with smaller account balances. Take Robinhood (HOOD), the app-based broker that caters to beginning investors. In December, the company launched its new individual retirement account (IRA) offering to help customers save for retirement. Robinhood will match contributions by 1%.

What does that mean in dollars and cents? If you contribute the maximum $6,000, Robinhood will put an extra $60 in your account. “This is not a one-time promotion, but rather a sustainable feature within the Robinhood Retirement account,” said Robinhood spokeswoman Jacqueline White. It’s sustainable because Robinhood keeps contributing to your IRA over time.

“Online brokerages used to offer free trades to attract new clients, but with trade commission for the most part already at zero, they need to find other ways to entice investors to select them,” said Mike Foy, senior director of wealth intelligence at J.D. Power. “Cash offers are common, and some firms are even getting more creative — like Robinhood’s recent announcement that they will match (a portion of) some client IRA contributions.”

Firms are betting that if they can attract assets now, over the long term they will be able to monetize them through selling more fee-based services, including advice and guidance as many investors find they need more help as their wealth grows and their needs become more complex over time. And there’s some evidence that this may be an effective strategy going forward — one example is that we see four out of five (81%) Gen Y DIY investors say they would be interested in an automated or robo-investing service if their firm offered it.”

Sizing Up Online Brokerages’ Offers

Even the largest and most established online brokerages will make it worth your while to work with them.

Charles Schwab, which consistently ranks well in IBD’s Best Online Brokers survey and led the pack in this year’s survey, offers a number of bonuses. Open a new account with at least $50 in the Schwab Starter Kit program, and you can get a bonus of $101. The bonus is put into your new account and you can use it to buy “stock slices,” or a mutual fund-like basket of a number of large stocks.

But Schwab’s potentially most lucrative offer is a bonus of up to $1,000 if you open an account after being referred by an existing Schwab client. The bonus varies based on how much you put in your Schwab account.

The bonus is $100 if you deposit $25,000, going all the way up to $1,000 if you open a $500,000 account. To get your bonus, make sure you get a referral code from the existing Schwab member and fund the account in 45 days.

Just know that bonuses are constantly changing and can vanish at any time.

Fidelity, another top-rated online broker with IBD survey respondents, offered a bonus of $150 for people who opened accounts with at least $50 in its holiday-themed Starter Pack offer. But that offer expired in early December. It has since renewed it. And not all brokers offer bonuses, including Interactive Brokers (IBKR).

Know The Risks

Additionally, most bonuses have stipulations attached that you must follow. Most commonly, you have roughly a month to get the money into the account to get the bonus.

And if you’re planning to close your existing account and move your money, you might face a fee on the way out. Online brokers might charge $50 or more if you transfer your account, sometimes called an ACAT transfer fee. You might be able to avoid the fee if you only transfer part of your old account, not the whole thing.

But there’s also a bonus to help with the fee, too, if you must pay one. For example, if you move an account worth $2,500 or more to Ally Invest, a unit of Ally Financial (ALLY), it will reimburse transfer fees up to $75.

Source: investors.com

Memory-Chip Makers Face a Prolonged Price Slump

guardianpub on January 30, 2023

Memory-chip prices, which dropped steeply over the past year, are expected to keep falling in the first half of 2023, putting more pressure on an industry that has already cut investments and jobs.

Average prices for the two main types of memory chips used in everyday electronics—from smartphones to personal computers and TV sets—are projected to experience double-digit percentage declines this quarter, industry analysts say. That comes after prices dropped by more than 20% in the last three months of 2022 from the previous quarter, according to analyst data.

Memory-chip makers, many saddled with large inventories, have also issued grim outlooks as the slump in demand for gadgets persists after a pandemic boom.

Micron Technology Inc., MU -2.46%decrease; red down pointing triangle SK Hynix Inc., 000660 -0.87%decrease; red down pointing triangle Western Digital Corp. WDC -1.65%decrease; red down pointing triangle and Tokyo-based Kioxia Holdings Corp. have unveiled plans to reduce their investments aimed at capacity expansion or to lower output to address a supply glut that is getting worse. Last month, Micron Technology said it would cut jobs and spending for the year to reduce costs after reporting a loss in its most recent quarter.

Memory chips are considered a bellwether for the semiconductor industry because they are more commoditized and sensitive to shifts in supply and demand.

Samsung Electronics Co., SSNHZ 0.00%increase; green up pointing triangle the world’s largest producer of memory chips, reports earnings Tuesday after saying earlier this month that its operating profit for the October-to-December quarter was expected to drop by 69% from a year earlier to 4.3 trillion won, which is equivalent to roughly $3.5 billion.

SK Hynix, which reports earnings Wednesday, is expected to report a fourth-quarter loss of around 812 billion won, or about $661 million, according to analyst projections averaged by FactSet.

Companies making other types of semiconductors are also caught up in the downturn. On Thursday, Intel Corp. reported a fourth-quarter loss and said poor market conditions would persist through the first half of the year.

Memory prices peaked during the early Covid-19 pandemic due to strong demand for tech products and they began falling in late 2021. Quarter-on-quarter declines got steeper through the second half of last year, as macroeconomic woes and rising interest rates combined with geopolitical uncertainties from the Russia-Ukraine war and China’s Covid lockdowns.

The memory-chip industry started 2023 with high inventories, said Kim Soo-kyoum, associate vice president covering memory semiconductors at International Data Corp., a tech market research firm. With demand still sluggish, memory prices are expected to keep declining throughout this year, though the quarterly drops could narrow or flatten in the second half depending on how soon buyers come back, Mr. Kim said.

Average contract prices for the two main types of memory chips, DRAM and NAND flash, dropped by roughly 23% and 28% respectively during the October-to-December period from the prior quarter, according to TrendForce, a Taiwan-based market researcher that tracks memory prices.

DRAM memory enables devices to multitask, while NAND flash memory provides storage capacity on devices.

Prices for both will likely keep falling through the first half of this year, TrendForce said. DRAM prices are expected to drop—on a quarterly basis—by 20% in the first quarter and 11% in the second quarter, while NAND flash prices during the same time frame are projected to drop by about 10% and 3%, respectively.

Inflation, high interest rates and weak economies are expected to continue to drive pullbacks in corporate and consumer spending on products including smartphones, PCs and data servers that are the biggest users of memory chips, TrendForce said.

DRAM prices are expected to continue dropping through the second half of this year and production cuts on a massive scale would be needed to shore them up, said Avril Wu, a TrendForce senior vice president.

Prices of NAND flash, however, could start to rebound starting in the second half as steeper price falls in recent months had prompted vendors to pursue more aggressive supply cutbacks for 2023, Ms. Wu said.

Samsung, the biggest producer of both types of memory chips, hasn’t publicly committed to moves that could reduce supply. In its last earnings call in October, Samsung’s memory-business Executive Vice President Han Jin-man said the firm was “not considering any artificial reduction in production for the sake of short-term, supply-demand rebalance.”

A Samsung spokeswoman said the company’s stance hasn’t changed.

In a report last month, Goldman Sachs forecast Samsung’s semiconductor unit’s operating profit for the October-to-December quarter would be around 1.5 trillion won, or roughly $1.2 billion, an 83% drop from a year earlier. It also projected Samsung’s memory business would record an operating loss starting from the first quarter of this year due to steep losses in the NAND flash business.

Global tech demand could recover later this year, aided by factors like China’s reopening after a period of strict Covid-19 restrictions which could revive consumer spending on products like smartphones, said David Tsui, senior credit analyst at S&P Global Ratings.

For now, it isn’t clear how quickly and to what extent consumer behavior would change in the country, he said.

Source: finance.yahoo.com

3 Supercharged Electric Vehicle Stocks to Buy in 2023 and Beyond

guardianpub on January 30, 2023

While 2022 was a year for stock price corrections across the electric vehicle (EV) sector, 2023 looks to be a transition year for the businesses themselves. EVs are going mainstream as manufacturers across the globe are ramping up production.

EVs made up 10% of all new cars sold globally last year. Europe and China are leading the way, with fully electric vehicles accounting for 11% and 19% of all new vehicles sold, respectively. With stock prices down and sales continuing to pick up, investors should look at investing in a diverse mix of EV makers in 2023.

Results matter, not expectations

Tesla (TSLA -0.59%) is starting out 2023 proving that it remains the industry leader. It is so far ahead of the competition that it almost has to have a place in any basket of EV holdings. Even after a small recovery to start 2023, Tesla shares are still down almost 60% over the past 12 months.

But Tesla’s business remains strong. Maybe not as strong as some analysts and investors hoped, but that’s why the shares have become much more reasonably priced. Some feared Tesla’s vehicle price cuts across its sales regions indicated a drop in demand that signals a slowing business. But investors should look at results, and not just what prior expectations from analysts have been.

Increasing competition, and the resulting decrease in its market share, were inevitable. But Tesla generated $7.6 billion in free cash flow in 2022 even as it continues to invest for growth. The fourth-quarter results it recently released show its strategy to lower prices as much as 20% is one where it can still be a very profitable, high-growth business. Even with headwinds and price cuts in China, Tesla’s net income continued to grow in the fourth quarter.

Its strategy is to attempt to hold market share and deliver high volumes of vehicles. Even as its margins slide somewhat, Tesla will have those customers and potentially be able to upgrade those units with higher-margin automation in the future. It’s still a long-term growth story one should own.

Invest in the biggest markets

One company that is working to battle Tesla for market share in the biggest global markets is China-based Nio (NIO -3.74%). Nio boosted production, launched new models, and gained traction in the European market in 2022. The company is now squarely embedded in the two biggest global automotive markets.

Nio is a much more speculative investment than Tesla, though. Nio shares are also down about 60% over the last year, but unlike Tesla, it has yet to make a profit. Due to rising costs and production delays from COVID-19 impacts in China in 2022, the company reported a net loss of almost $1.3 billion in just the first nine months of the year. But growth is still accelerating for Nio, and total revenue is expected to be about $7.5 billion from 2022 sales.

With the stock’s decline over the course of the company’s struggles last year, its valuation has reached a reasonable level for a speculative investment. Nio’s price-to-sales (P/S) ratio is now below 3.0, which is less than half that of Tesla. That makes it an intriguing addition to a mix of EV stocks to buy in 2023.

True diversity

Ford (F -1.62%) could also be a good addition to that mix. It not only is quickly growing sales of its brand new lineup of electrified vehicles, but it also offers real diversity in a mix of EV names. That’s because Ford doesn’t intend to end sales of its internal combustion engine vehicles. Its initial electric offerings are also a mix of the Mustang Mach-E SUV, F-150 Lightning pickup truck, and E-Transit commercial van.

The F-150 Lightning has been named the MotorTrend Truck of the Year for this year, and interest is booming. It launched in May and has already become the best-selling electric truck in the U.S. Valuation certainly isn’t a disincentive to own Ford. It sports a P/S ratio of just over 0.3, or about one tenth that of Nio. Ford still needs to show it can earn a profit on its electric offerings, but considering the diversity it already offers, it also makes a good addition to a small basket of EV stocks worth buying in 2023.

Source: fool.com

Taxes: Here are the federal tax brackets for 2023 vs. 2022

guardianpub on January 23, 2023

The income thresholds for the seven federal tax brackets increased by a bigger-than-normal amount for the 2023 tax year to reflect runaway inflation seen last year.

“They are just the usual changes due to inflation,” Jon Whiten, from the Institute on Taxation and Economic Policy told Yahoo Finance. “More dramatic this year since inflation was also dramatic.”

The inflation-adjusted amounts jumped by more than 7% from 2022, according to the Tax Policy Center, compared with last year’s 3% uptick. The changes themselves are not a new development — the Internal Revenue Service adjusts its tax brackets annually for inflation.

One positive outcome: Taxpayers whose income didn’t rise on par with inflation last year will likely avoid tax bracket creep in 2023 and ultimately pay lower taxes.

Changes to 2023 federal income tax brackets

For the 2023 tax year, there are seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Your tax bracket is determined by your taxable income and filing status and shows what tax rate you’ll pay on each portion of your income.

According to the IRS, the income thresholds for all brackets will increase as follows:

Remember: These are progressive marginal rates. It doesn’t mean that, if you have $100,000 in taxable income as a single taxpayer, you’re taxed at 24% on that entire amount.

Instead, the first $11,000 is taxed at the 10% rate in 2023, the next dollars up to $44,725 are taxed at 12%, the next dollars up to $95,375 are taxed at 22%, and the last dollars over $95,375 are taxed at 24%.

What these increases mean for you

According to the latest Bureau of Labor Statistics data, wages only increased 4.4% for the 12-month run ending September 2022, up just 2.4% from a year earlier. Though some folks saw a jump in their salaries last year, most of those gains still fell behind rising inflation levels.

“The whole point of adjusting tax brackets for inflation is to reduce the impact or mitigate the impact of inflation,” topld Eric Bronnenkant, head of tax at Betterment. “Let’s say some people got a 10% raise in wages last year, while others may have not gotten any raise at all. Arguably, people whose income outpaced the estimated inflation hike of 7% now may be paying more taxes because their tax bracket is higher, while those with wages with little growth may be paying less.”

What this means is that taxpayers whose salaries didn’t keep up with inflation are able to bypass bracket creep. According to the Tax Foundation, this occurs when inflation pushes you into a higher income tax bracket, which will reduce the value of credits, deductions, and exemptions.

“You still have to remember that a 7% tax bracket increase is still a rough estimate of inflation, and it’s never about any one person’s individual situation,” Bronnenkant said. “It’s possible that inflation was low, but you lived somewhere where your landlord increased your rent 10% and your personal costs may have increased a lot. It’s not perfect for everybody, but it’s the best the IRS can do to average inflation for a large amount of people.”

Source: finance.yahoo.com

Signature Bank Halts SWIFT Transactions Under $100,000 for Crypto Users, Says Binance

guardianpub on January 23, 2023

Signature Bank’s customers facilitating fiat operations with Binance will not be able to make SWIFT transfers of less than $100,000, according to the crypto exchange.

“One of our fiat banking partners, Signature Bank, has advised that it will no longer support any of its crypto exchange customers with buying and selling amounts of less than 100,000 USD as of February 1st, 2023,” a Binance spokesperson said in an emailed statement to Decrypt. “As a result, some individual users may not be able to use SWIFT bank transfers to buy or sell crypto with/for USD for amounts less than 100,000 USD.”

SWIFT is a vast messaging system that allows banks and other financial institutions from all around the world to send and receive encrypted information, namely cross-border money transfer instructions.

Only 0.01% of Binance’s monthly users are served by Signature Bank. Other Binance banking partners have not been affected, the exchange noted, adding that it is “actively working to find an alternative solution” for affected users.

“Furthermore, all other Binance functions are unaffected by this change, and all users can continue using their accounts. Notably, buying and selling crypto using credit or debit cards, using one of the other fiat currencies supported by Binance (including Euros) and our Binance P2P marketplace will continue to operate as usual,” added Binance’s spokesperson.

Decrypt didn’t immediately hear from Signature Bank after reaching out for additional comment.

Signature Bank steps back from crypto

Signature Bank has been hit hard by the recent turmoil in the crypto industry, as per its latest fourth-quarter filing.

In the final quarter of 2022, the firm announced a decline in customer deposits of roughly $14 billion, citing its “planned reduction in digital asset banking deposits” alongside industry-wide chaos. Last quarter, markets were rocked by the high-profile collapse of FTX and a suite of legal charges against the exchange’s disgraced founder, Sam Bankman-Fried.

Despite a hefty rally year-to-date, with Signature Bank stock (SBNY) rising from $113 on January 3 to $127 on January 20, the past year has been brutal for the bank.

On January 24, 2022, the NASDAQ-listed stock traded at more than $314.

Source: finance.yahoo.com

Netflix: Password sharing ‘undermines’ business, warns crackdown will intensify

guardianpub on January 20, 2023

Netflix (NFLX) freeloaders, beware! The company is ramping up its password sharing crackdown.

Following fourth quarter earnings results on Thursday that saw subscriber numbers leap past expectations, the company warned in its quarterly letter to shareholders it will be intensifying its push to combat password sharing.

“Later in Q1, we expect to start rolling out paid sharing more broadly. Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business,” Netflix said.

The company explained it’s been building additional new features to improve the overall Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account.

Members can also pay extra if they want to share the platform with people they don’t live with.

“As we work through this transition – and as some borrowers stop watching either because they don’t convert to extra members or full paying accounts – near term engagement, as measured by third parties like Nielsen’s The Gauge, could be negatively impacted,” Netflix said.

However, the company referred to its recent testing in Latin America, which showed engagement steadily increase over time as borrowers signed up for their own accounts and new content was released.

Investors will be closely monitoring the company’s earnings call for additional updates regarding its crackdown on password sharing, in addition to its newly launched ad-supported tier.

Netflix has looked at those two initiatives as profitability drivers, especially as competition within the streaming space escalates: “As always, our north stars remain pleasing our members and building even greater profitability over time,” the streamer said.

Quarterly net additions grew by 7.66 million, above company guidance of 4.5 million amid a slew of high-profile and record-breaking content releases, including “Glass Onion,” “Troll,” “All Quiet on the Western Front,” “My Name is Vendetta,” and “Wednesday.”

Although the company delivered a miss on both the top and bottom lines, guidance came in strong with revenue expectations for the first quarter of 2023 set at $8.17 billion with earnings per share expected to come in at $2.82.

Amid the earnings announcements, Netflix co-CEO and co-founder Reed Hastings announced he would step down from his role leading the company. COO Greg Peters will join current Netflix co-CEO Ted Sarandos in that role. Hastings will now serve as the company’s executive chairman.

Shares of Netflix were up as much as 6% in after-hours trading following Thursday’s results.

Netflix stock have been on a tear in recent weeks, up roughly 60% over the past six months with about a 10% gain so far in January, outperforming the Nasdaq Composite’s 5% gain.

Source: finance.yahoo.com

Netflix Q4 earnings preview: Investors eye ad tier update, continued subscriber gains

guardianpub on January 19, 2023

Netflix (NFLX) is set to report fourth quarter financial results after the bell on Thursday as investors seek greater clarity surrounding the streaming giant’s profitability efforts, including its crackdown on password sharing and its recently debuted ad-supported tier.

The Street will also continue to keep a close eye on subscriber numbers, which fell in each of the first quarters of the year, but are expected to grow again in Q4 after rebounding in the third quarter.

Here are Wall Street’s expectations for Netflix’s headline results, according to Bloomberg consensus estimates:

  • Revenue: $7.85 billion
  • Adj. earnings per share (EPS): $0.58
  • Subscribers: 4.5 million net additions

Although foreign exchange headwinds have been a pain point for the streaming giant, a weakening U.S. dollars should help boost revenue and operating income in the fourth quarter, with analysts from Goldman Sachs to Wells Fargo raising estimates for the streaming giant in recent weeks.

Netflix guided to subscriber additions of 4.5 million in October, though some analysts are looking for this figure to beat expectations amid a slew of high-profile and record-breaking content releases, including “Glass Onion,” “Troll,” “All Quiet on the Western Front,” “My Name is Vendetta,” and “Wednesday.”

Analysts at JPMorgan, for instance, are forecasting 4.75 million net paid additions for the company in its most recent quarter.

Investors will not see the full impact of Netflix’s foray into advertising within Thursday’s results given the tier just launched in November. However, data from third-party research firm YipitData points to increased momentum.

According to that data, Netflix’s ad tier has been modestly incremental to positive subscriber trends, and has not driven significant cannibalization of the standard and premium tiers — a previous concern on the Street.

Ad-based gross adds have gained traction throughout the quarter, comprising roughly 15% of total subscriber gross adds, YipitData added.

Overall, analysts have preached the long game to investors when it comes to advertising, with Wells Fargo’s Steve Cahall anticipating password sharing will be a bigger topic in the near-term.

“While much of the sellside and buyside focus of late has been the [advertising video-on-demand] launch, we actually think disclosure will be limited as will the impact on estimates. Instead, we think password sharing is the bigger catalyst near term,” Cahall wrote in a new note to clients. “As the Street better understands password sharing we see it as upside to revenue growth estimates.”

Netflix shares have been on a tear in recent weeks, up more than 60% over the past six months with a more than 10% gain so far in January, outperforming the Nasdaq Composite’s 5% gain.

Source: finance.yahoo.com

What Income Level Is Considered Rich?

guardianpub on January 17, 2023

Earning more money can make it easier to pay the bills, fund your financial goals and spend on hobbies or “fun,” but what income is considered to make you rich? The answer can depend on several factors, including where you live, what type of job you have, how much you save or invest and how you typically spend your money.

What Income Is Considered Rich?

Pinning down an exact income level that qualifies you as “rich” is difficult, as there are numerous studies and surveys that attempt to measure it. To keep things simple, let’s consider where the Internal Revenue Service (IRS) sets the bar for the top 1% of earners first.

According to the most recent data available for fiscal year 2019, an income of $540,009 per year puts you in the top 1% category. Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you’re in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.

What Is a Rich Monthly Income?

The amount of money you need to make each month to be rich depends on which metric you’re using. If you’re going by the IRS standard, then you’d need to make approximately $45,000 a month to be rich. On the other hand, if you’re aiming for the top 1% as measured by the EPI, you’d need a monthly income of $68,277.

To reach that level of income, you’ll likely need to have something more than the typical 9-to-5 job. Examples of people with monthly incomes in that range can include successful business owners, celebrities, athletes and online influencers or content creators.

How Much Income Do You Need to Be in the Top 20%?

The real median household income in the U.S. is around $71,000, according to the latest Census Bureau data. In order to be in the top 20% of income, you’d need to earn nearly double that amount or an average of $130,545 per year.

That’s according to a SmartAsset study of income distributions in the 100 largest U.S. cities. The study found a wide range of income distributions geographically, with residents of San Francisco needing an income of $250,000 or more per year to land in the top 20%. Meanwhile, you’d need an income of $70,444 to be a top 20% earner in Detroit.

It’s important to remember that the definition of what it means to be rich is subjective. Someone who makes $250,000 a year, for example, could be considered rich if they’re saving and investing in order to accumulate wealth and live in an area with a low cost of living.

Rich vs. Wealthy: What’s the Difference?

Being rich is one thing, but being wealthy can mean something entirely different. Someone who’s rich may have cash available to spend on luxury goods or take expensive vacations. A wealthy person, on the other hand, might be more focused on increasing their net worth and creating a long-lasting financial legacy.

So, what’s the cutoff to be considered wealthy? Again, it’s subjective and there are lots of different numbers that may be tossed around. Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.

That’s how financial advisors typically view wealth. The average American, on the other hand, sees $774,000 as a sufficient net worth to be financially comfortable and a net worth of $2.2 million to be wealthy.

How to Become Rich

If you’d like to reach millionaire status or join the ranks of the rich, you’ll need a strategy for achieving that goal. Short of winning the lottery or inheriting a fortune, becoming rich takes some effort. Just how much effort can depend on where you’re starting from.

Here are some of the most impactful steps you can take to become rich.

  • Earn more: Increasing your income means you’ll have more money to save, invest and pay down debt, all of which can help to boost your net worth. There are different ways to increase income, including negotiating a pay raise, pursuing higher-paying roles, taking on a part-time or second job and starting a profitable business or side hustle.
  • Budget: Budgeting is one of the simplest ways to take control of your money and become rich. When you budget, you’re deciding how to allocate the income that you have each month. That makes it easier to work toward your goals of saving and increasing your net worth.
  • Reduce debt: Your net worth is calculated based on how much you owe versus what you have in assets. Paying down debt can help you get on the path to becoming rich if you’re able to free up more money for saving and investing. If your debt is expensive due to high-interest rates, consolidating or refinancing it or using a 0% APR balance transfer could make it easier to pay down what you owe.
  • Invest: Investing and saving money are both important but they’re entirely different. When you save money, you’re typically putting it into a savings or CD account at your bank where it can earn a little interest. When you invest, you’re putting your money into the market where it has the potential to earn much higher returns. If you’re not investing yet, the easiest way to get started is to contribute to your retirement plan at work. You might have a 401(k), for example, which you can contribute to from your paychecks automatically. As an added bonus, your employer might match some of what you put in, which is free money for you. In addition to a workplace retirement plan, you can also begin building wealth through an Individual Retirement Account (IRA) or a taxable brokerage account.
  • Get professional advice: Talking to a financial advisor can help you formulate a plan for saving and investing in order to build wealth. Your advisor can also guide you through the basics of making a budget and creating a workable debt payoff plan.

The Bottom Line

In terms of what income is considered rich, there’s no single number to go by. How you define being rich for yourself can depend on the amount of money you need to feel financially comfortable and how you use the income and assets that you have. To one person it means not worrying about money while to others it just means having enough money in retirement to not impact their lifestyle. Once you define what rich means to you then you can build a financial plan to help you reach that goal.

Source: finance.yahoo.com

Mark Cuban tells Bill Maher that buying gold is ‘dumb’ — and wants bitcoin to keep plunging so he can buy more. Here are 3 simple ways to gain crypto exposure

guardianpub on January 16, 2023

Bitcoin plunged nearly 65% in 2022. But one billionaire investor still likes the world’s largest cryptocurrency: Mark Cuban.

“I want Bitcoin to go down a lot further so I can buy some more,” Cuban said in a recent episode of Bill Maher’s Club Random podcast.

Maher, who self-claims to be “very anti-bitcoin,” owns gold instead. Cuban, conversely, has no time for the yellow metal.

“If you have gold, you’re dumb as f—,” says the Shark Tank star and Dallas Mavericks owner.

Maher argues that gold “is like a hedge against everything else” but Cuban disagrees.

“[Gold] is not a hedge against anything, right? What it is is a store of value and you don’t own the physical gold, do you … Gold is a store of value and so is Bitcoin,” Cuban explains.

He then points out why gold can’t really protect your wealth in times of crisis.

“You don’t own the gold bar, and if everything went to hell in a handbasket and you had a gold bar, you know what would happen? Someone would beat the f— out of you or kill you and take your gold bar.”

If you share Cuban’s view, here are a few ways to gain exposure to bitcoin.

Buy bitcoin directly

The first option is the most straightforward: If you want to buy Bitcoin, just buy Bitcoin.

These days, many platforms allow individual investors to buy and sell crypto. Just be aware that some exchanges charge up to 4% commission fees for each transaction. So look for apps that charge low or even no commissions.

While bitcoin commands a five-figure price tag today, there’s no need to buy a whole coin. Most exchanges allow you to start with as much money as you are willing to spend.

Bitcoin ETFs

Exchange-traded funds have risen in popularity in recent years. They trade on stock exchanges, so buying and selling them is very convenient. And now, investors can use them to get a piece of the bitcoin action, too.

For instance, ProShares Bitcoin Strategy ETF (BITO) started trading on NYSE Arca in October 2021, marking the first U.S. bitcoin-linked ETF on the market. The fund holds bitcoin futures contracts that trade on the Chicago Mercantile Exchange and has an expense ratio of 0.95%.

Investors can also consider the Valkyrie Bitcoin Strategy ETF (BTF), which made its debut a few days after BITO. This Nasdaq-listed ETF invests in bitcoin futures contracts and charges an expense ratio of 0.95%.

Bitcoin stocks

When companies tie some of their growth to the crypto market, their shares can often move in tandem with the coins.

First, there are bitcoin miners. The computing power doesn’t come cheap and energy costs can be substantial. But if the price of bitcoin goes up, miners like Riot Blockchain (RIOT) and Hut 8 Mining (HUT) are likely to receive increased attention from investors.

Then there are intermediaries like Coinbase Global (COIN) and PayPal (PYPL). When more people buy, sell and use crypto, these platforms stand to benefit.

Finally, there are companies that simply hold a lot of crypto on their balance sheets.

Case in point: enterprise software technologist MicroStrategy (MSTR). It has a market cap of under $2 billion. Yet its bitcoin count reached approximately 132,500 as of Dec. 27, 2022, a stockpile worth around $2.3 billion.

Source: finance.yahoo.com

Housing expert: ‘We can expect mortgage rates to go down’

guardianpub on January 16, 2023

Homebuyers may finally catch a break this year, says one expert, as signs of fading inflation could drive mortgage rates lower as soon as this month.

“Mortgage rates have declined by almost a full percentage point since they peaked in November,” told Melissa Cohn, vice president for William Raveis, a real estate brokerage firm. “I think that we can expect mortgage rates to go down another quarter or even as much as a half a percent over the course of the next month.”

The average interest rate on the 30-year fixed mortgage has fallen by three-quarters of a percentage point since mid-November, according to Freddie Mac, hitting 6.33% this week. The decline in rates comes after a series of government reports showed signs that inflation in the U.S. was finally cooling.

For some buyers, a mortgage rate drop means gaining back purchasing power and re-entering the market.

“It’s the beginning of 2023. Everyone is back to zero in terms of meeting their goals and everyone has to bring loans in the door,” Cohn said. “Banks are going to sharpen their pencils, they’re going to tighten up their margins, and do whatever they can to bring volume in the door and lower rates will bring more real estate transactions.”

Rates won’t drop to 3%

After roughly two years of record-low mortgage rates, the 30-year rate last year increased at their fastest clip in over 50 years. Most of the rate hikes were due to the Federal Reserve’s zealous fight against rampant consumer price growth.

However, signs of cooling inflation in recent months are increasing the likelihood that the Fed will reconsider its pace of hikes – giving mortgage rates a bit of relief. This week new data showed that consumer price growth had dropped to its lowest level in over a year.

Still, rates probably won’t return to levels seen during the early years of the pandemic.

“People can’t expect that we’re going to go back to a 3%, 30-year fixed rate,” Cohn said. “Now that happened because of COVID and the pandemic, and we don’t want to find ourselves in that position again. If we can get interest rates to go back to where they were pre-COVID, call that anywhere from 3.75% to 4.5%, that would be a home run.”

How to get the best interest rate

The combination of higher rates, climbing home prices, and inflation were a massive blow for plenty of first-time buyers last year, who were often priced out of the market.

While a rate drop can significantly boost your buying power, there are other ways you can improve your chances of snagging a lower rate. According to Cohn, the key is to start off early by improving your credit score.

“Many of the banks with better rates are going to want to see someone have three to four different active tradelines on their credit history,” she said, noting buyers should have sufficient money for the down payment plus extra. “We find a lot of first-time homebuyers getting stuck because they maybe have enough money for the down payment, but haven’t taken into consideration all of the closing costs and what you need to have for reserves.”

Another way to soften your rate is by considering an adjustable-rate mortgage or a government-backed home loan, which often carry lower interest rates and may be more accessible.

Finally, keep an eye on the demand in your area. Sellers have been more open to offering incentives, such as mortgage rate buy-downs, cash for closing costs, and even price reductions, so buyers still in the market should jump at those opportunities while they still can.

“When mortgage rates are higher, real estate prices tend to be a little bit softer,” Cohn said. “When interest rates do come dow … real estate prices will start to go back up again and there’ll be more competition for the homes on the market.”

Source: finance.yahoo.com