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36% Earning $100,000 or More Living Paycheck to Paycheck

June 16, 2022 Leave a Comment

Thirty-six percent of U.S. employees with salaries of $100,000 or more are living paycheck to paycheck — twice as many who said they were in 2019, according to a survey conducted by Willis Towers Watson, a consulting firm. CNBC reports:

That’s more than the 34% of workers who earn $50,000 to $100,000 a year who are living paycheck to paycheck, though lower than the 52% of paycheck-to-paycheck workers with incomes of less than $50,000, according to the survey.

However, the high earners are the only group that saw an increase in their paycheck-to-paycheck ranks in the last three years.

“Employees at higher pay levels aren’t immune to living paycheck to paycheck,” said Mark Smrecek, the financial wellbeing market leader for North America at Willis Towers Watson.

Willis Towers Watson polled 9,658 full-time employees from large and midsize private employers in December and January 2022, before the most recent inflation readings.

Study: More You Make, Longer You’ll Live

July 25, 2021 Leave a Comment

New research shows that every $50,000 of income lowers a person’s risk of death by five percent. Money may not buy happiness, but it could buy you a longer life. New research concludes that being wealthy can add years to your lifespan. Study Finds reports:

Researchers at Northwestern University say that every time another $50,000 accumulated by middle age, an individual’s risk of death drops. And for those who had stashed $139,000 more than a sibling, their chances of outliving them increased.

The study is based on 5,400 Americans tracked for almost a quarter of a century.

“One of the keys to a long life may lie in your net worth,” says corresponding author Dr. Eric Finegood, a postdoctoral fellow in the Institute for Policy Research at Northwestern. in a statement.

Unsurprisingly, the COVID-19 pandemic widened the wealth gap. Amid the misery, the number of millionaires in the U.S. rose last year by 5.2 million – to over 56 million. Mortality rates fell five percent for every additional $50,000 of net worth accumulated by middle age.

Moreover, the same phenomenon was identified among the 2,490 who were twins or siblings. Big earners were more likely to outlive brothers and sisters on smaller salaries. “A difference of $139,000 was associated with a 13 percent relative decrease in the probability of death nearly 24 years later, favoring the family member with a higher net worth,” says Dr. Finegood.

It suggests affluence leads to good health, rather than being a reflection of heritable traits or early experiences that cluster in families.

How One Man Lost $20 Billion In Two Days

April 11, 2021 1 Comment

Before he lost it all—all $20 billion—Bill Hwang was the greatest trader you’d never heard of. Then he lost it all in two days. Bloomberg reports:

Starting in 2013, he parlayed more than $200 million left over from his shuttered hedge fund into a mind-boggling fortune by betting on stocks. Had he folded his hand in early March and cashed in, Hwang, 57, would have stood out among the world’s billionaires… At its peak, Hwang’s wealth briefly eclipsed $30 billion…

Hwang used swaps, a type of derivative that gives an investor exposure to the gains or losses in an underlying asset without owning it directly. This concealed both his identity and the size of his positions. Even the firms that financed his investments couldn’t see the big picture. That’s why on Friday, March 26, when investors around the world learned that a company called Archegos had defaulted on loans used to build a staggering $100 billion portfolio, the first question was, “Who on earth is Bill Hwang?”

Because he was using borrowed money and levering up his bets fivefold, Hwang’s collapse left a trail of destruction. Banks dumped his holdings, savaging stock prices. Credit Suisse Group AG, one of Hwang’s lenders, lost $4.7 billion; several top executives, including the head of investment banking, have been forced out. Nomura Holdings Inc. faces a loss of about $2 billion… On March 25, when Hwang’s financiers were finally able to compare notes, it became clear that his trading strategy was strikingly simple. Archegos appears to have plowed most of the money it borrowed into a handful of stocks — ViacomCBS, GSX Techedu, and Shopify among them. This was no arbitrage on collateralized bundles of obscure financial contracts. Hwang invested the Tiger way, using deep fundamental analysis to find promising stocks, and he built a highly concentrated portfolio. The denizens of Reddit’s WallStreetBets day trading on Robinhood can do almost the same thing, riding such popular themes as cord cutting, virtual education, and online shopping. Only no brokerage will extend them anywhere near the amount of leverage billionaires get…

People familiar with Archegos say the firm steadily ramped up its leverage. Initially that meant about “2x,” or $1 million borrowed for every $1 million of capital. By late March the leverage was 5x or more. Raising money to invest in streaming made sense. Or so it seemed in the ViacomCBS C-suite. Instead, the stock tanked 9% on Tuesday and 23% on Wednesday. Hwang’s bets suddenly went haywire, jeopardizing his swap agreements…

Hwang, say people with swaps experience, likely had borrowed roughly $85 million for every $20 million, investing $100 and setting aside $5 to post margin as needed. But the massive portfolio had cratered so quickly that its losses blew through that small buffer as well as his capital.

Losses To Romance Scams Reached a Record $304 Million in 2020

February 16, 2021 Leave a Comment

The current COVID-19 pandemic and the subsequent stay-at-home and social distancing directives might have played a major role in romance scams losses reaching record levels in 2020, the US Federal Trade Commission said in a report last week. ZDNet reports:

Total losses were estimated at a record $304 million, up about 50% from 2019, with the average loss last year being estimated at $2,500 per individual.

“From 2016 to 2020, reported total dollar losses increased more than fourfold, and the number of reports nearly tripled,” the agency said.

The FTC believes that the 50% spike in extra losses recorded in 2020 can be attributed to the COVID-19 pandemic, which has limited people’s ability to meet in person and has forced more users towards using online long-distance and impersonal communications, such as dating apps.

In most cases, the ruse of these scams is that the targets of a romance scam have to send money back to the crooks.

Making More Money Really Does Make People Happier, Study Says

January 21, 2021 Leave a Comment

The old saying goes “money can’t buy happiness,” but a new study finds that’s not exactly true. Although previous studies find there’s a limit to how much a person’s income impacts their happiness, a researcher from the University of Pennsylvania says the sky’s the limit when it comes to money’s influence over well-being. Study Finds reports:

Killingsworth’s study examined nearly two million data points from over 33,000 people; each providing a moment-to-moment snapshot of their daily lives. Other studies on income and happiness concluded that money stops mattering at around $75,000. The results of the new study, however, reveal that rising income continues to affect the earner’s well-being even into the hundreds of thousands of dollars…

After calculating the well-being of each person in the study, Killingsworth compared the results to each participant’s income. According to a 2010 paper, experienced well-being plateaus when someone hits $75,000 in annual salary. The new results find that number may have to change.

“It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment,” the researcher says. “But when I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income. I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.”

First COVID-19 Vaccine Receives Emergency Approval in U.S.

December 11, 2020 Leave a Comment

The Food and Drug Administration authorized BioNTech and Pfizer Inc.’s COVID-19 vaccine Friday evening, which will make it the first vaccine to reach Americans during the coronavirus pandemic. MarketWatch reports:

“The FDA’s authorization for emergency use of the first COVID-19 vaccine is a significant milestone in battling this devastating pandemic that has affected so many families in the United States and around the world,” FDA Commissioner Dr. Stephen Hahn said in a statement. “Today’s action follows an open and transparent review process that included input from independent scientific and public health experts and a thorough evaluation by the agency’s career scientists to ensure this vaccine met FDA’s rigorous, scientific standards for safety, effectiveness, and manufacturing quality needd to support emergency use authorization.”  

The vaccine — which was developed by Germany’s BioNTech, and is being commercialized by American pharmaceutical giant Pfizer — is the first COVID-19 vaccine to receive emergency use authorization in the U.S. and the first mRNA product to ever receive any type of regulatory approval. 

Since the first efficacy data was shared publicly, anticipation for the highly efficacious vaccine has largely sent up markets, which view vaccination as the beginning of the end of the COVID-19 crisis. Federal health officials have said the administration of the vaccine could begin within days of authorization.

Missing Credit Card Payments May Be an Early Sign of Dementia

December 7, 2020 Leave a Comment

Patterns of missing credit card and loan payments could be an early indicator of dementia years before diagnosis, a new study says. CNN Health reports:

The study, published Monday in the medical journal JAMA, looked at Medicare patients living alone across the United States and analyzed their credit data and payments over time.

Researchers found that patients with Alzheimer’s disease and related dementia were more likely to miss payments up to six years before getting diagnosed, the study said. And, those poor financial actions led them to subprime credit scores two and a half years before diagnosis, as opposed to the patients without dementia.

“I think we were a little surprised that it was so common that we could really see it in the data,” lead author Lauren Hersch Nicholas told CNN. “Doctors colloquially say that you should look for dementia in the checkbook, but I don’t think we had any sense of for how many years in advance these effects could be happening.”

Nicholas is an associate professor at Johns Hopkins University. Researchers from Johns Hopkins and the Federal Reserve Board of Governors led the study.

Alzheimer’s dementia affects about 5.8 million Americans who are 65 and older, according to the Alzheimer’s Association. The number of Americans with the disease is projected to hit 13.8 million by 2050, the non-profit said.

Nearly Two-Thirds of Americans Are Living Paycheck to Paycheck During COVID Pandemic

December 5, 2020 Leave a Comment

Money is not something anyone wants to worry about during the holidays. In a year still ravaged by the coronavirus pandemic and its economic fallout however, it appears many will be struggling through the most festive part of 2020. A survey finds over 60 percent of Americans say they’re now living paycheck-to-paycheck as the year draws to a close. Study Finds reports:

The poll of over 2,000 Americans, commissioned by Highland Solutions, wanted to see how spending habits and personal finances in the U.S. are holding up during the pandemic. Their results find 63 percent of respondents have cut back on their spending due to COVID. Six in 10 say they’re doing it to be more cautious, but 49 percent add it’s because of losing income at work.

Between making more frugal choices and statewide shutdowns across America, a majority of respondents say the normal “night out” is taking the biggest hit. Sixty-four percent are cutting down on dining out or ordering takeout. Another 61 percent add they’re seeing fewer movies, 55 percent are buying less clothing, and 52 percent are traveling less.

Are We Trading Our Happiness for Modern Comforts?

October 22, 2020 Leave a Comment

As society gets richer, people chase the wrong things. One of the greatest paradoxes in American life is that while, on average, existence has gotten more comfortable over time, happiness has fallen. The Atlantic reports:

According to the United States Census Bureau, average household income in the U.S., adjusted for inflation, was higher in 2019 than has ever been recorded for every income quintile. And although income inequality has risen, this has not been mirrored by inequality in the consumption of goods and services. For example, from 2008 to 2019, households in the lowest income quintile increased spending on eating out by an average of about 22 percent after correcting for inflation; the top quintile increased spending on eating out by an average of just under 8 percent. Meanwhile, domestic government services have increased significantly: For example, federal spending on education, training, employment, and social services increased from 2000 to 2019 by about 30 percent in inflation-adjusted terms.

New American homes in 2016 were 1,000 square feet larger than in 1973 and living space per person, on average, has nearly doubled. The number of Americans who use the internet increased from 52 to 90 percent from 2000 to 2019. The percentage who use social media grew from 5 to 72 percent from 2005 to 2019.

But amid these advances in quality of life across the income scale, average happiness is decreasing in the U.S. The General Social Survey, which has been measuring social trends among Americans every one or two years since 1972, shows a long-term, gradual decline in happiness—and rise in unhappiness—from 1988 to the present.

Billionaire CEO of Software Company Indicted For Alleged $2 Billion Tax Evasion Schemes

October 16, 2020 Leave a Comment

The billionaire chief executive of Ohio-based Reynolds and Reynolds Co, Robert Brockman, has been indicted on charges of tax evasion and wire fraud conducted over “decades.” ZDNet reports:

The scheme, in which roughly $2 billion was hidden away in offshore accounts and through money laundering, took place between 1999 and 2019, the US Department of Justice (DoJ) said on Thursday. According to the indictment (.PDF), the resident of both Houston, Texas, and Pitkin County, Colorado allegedly used a “web” of offshore organizations in Bermuda and Nevis to hide the profits he made from investments in private equity funds. 

Brockman squirreled away his capital gains and also tampered with the evidence of his alleged activities, prosecutors say, by methods including backdating records and using “encrypted communications and code words” to communicate with co-conspirators, including the phrases “Permit,” “King,” and “Redfish.” A ranch, luxury home, and yacht were among the purchases apparently made with non-taxed income. US prosecutors also say that between 2008 and 2010, Brockman used a third-party entity to purchase $67.8 million in debt securities from the software company. As CEO, the executive is not permitted to do so without full disclosure as it can have an impact on share prices and trading; however, Brockman allegedly did so without informing sellers. 

As a result, approximately $2 billion in income was kept hidden from the US Internal Revenue Service (IRS). In addition, US prosecutors allege that investors in the software firm’s debt securities were also defrauded. A federal grand jury in San Francisco, California has issued a 39-count indictment, including seven counts of tax evasion, 20 counts of wire fraud, money laundering, evidence tampering, and destruction of evidence.

Keeping Your Finances On Track Following A Personal Injury

September 1, 2020 Leave a Comment

Sustaining a personal injury can do more than harm your health, it can change your entire life. According to Newswire, more than 700,000 personal injury claims are filed every year in The States. Those who sustain a personal injury so severe that they’re unable to continue working can be awarded millions, just as James T. Mitchell discovered. In April this year, he won in excess of $5 million following two workplace injuries which prevented him from being able earn any income. Regardless of how much you are awarded, it’s essential you plan your future finances to prevent you wasting your compensation on extortionate medical bills and day to day living expenses.

File a legal claim

According to Arbill, 3.3 million people suffer a workplace incident which they may never recover from, such as head and brain injuries, therefore, if your injury could have been prevented and there is evidence to support that a third party was at fault, then you should instruct a personal injury attorney to start legal proceedings. Your attorney will fight to get justice for you and to prevent a similar incident occurring to anyone else, but, most importantly, they’ll seek compensation as a form of settlement. America’s highest ever personal injury claim saw $150 billion paid out to the claimant, according to ABC Money. Each state has a cap on the amount of non-economic damages that can be awarded to an individual, and in medical malpractice cases the federal government have capped damages at $250,000. Once you receive your payout, ensure you spend and save it wisely. Bear in mind that with your earning potential being limited for the foreseeable future you need to make the cash last so think about setting yourself a set amount to spend each month to ease any financial burden.

Get a second opinion

Following your injury you may be on multiple types of strong medication which causes you to become easily confused and which makes it difficult to concentrate, especially with something as complex as numbers. Rather than struggle in silence, ask for help from friends or family who’ll be able to review your outgoings, help you make cutbacks by speaking to companies such as your phone and television providers for you and advise on how best to proceed. It’s also worth seeking the advice of a financial advisor as they’ll have experience in dealing with people who have been in similar situation and their wealth of knowledge will help you get on top of your finances.

Claim what you’re owed

eHealthInsurance reports that the average American will pay a monthly health insurance premium of $321 per month, therefore, make sure you utilize your policy. Depending on your level of cover, they’ll help to pay your medical bills and will give you a lump sum of cash due to you being unable to work as a result of your injury. You may be reluctant to turn to benefits to get by, but it’s important to remember that your injury isn’t your fault and that what’s more paramount is keeping a roof over your head and your finances in good health, so you must look into and apply for any unemployment benefits that you’re entitled to. And if you’ve lent money to friends and family in the past, now is the time to claim back what you’re owed. So long as you explain your situation to your loved ones, most will be than happy to make arrangements to get your cash back to you.

A personal injury which impacts your ability to work will leave your finances in tatters if you don’t take action to keep on top of them. Therefore, you should file a legal claim in order to win compensation, ensure you request what you’re owed from various parties and seek the advice and help from your loved ones and a financial advisor to keep your finances in good order while you adjust to live with your injury.

Young Americans Have Used 33% Of Their Total Savings During COVID-19

July 25, 2020 Leave a Comment

Millennials by ITU Pictures

The coronavirus shutdowns have had a dramatic impact on the broader economy (if not the stock market, which is almost back to all time highs) and few have been hit as hard as young Americans such as Millennials and Gen Zers. Tyler Durden writes on ZeroHedge:

A recent survey from Travis Credit Union seeking to learn more about the money-saving habits of young Americans and how Covid-19 and the looming recession has impacted their savings, polled nearly 2,000 Millennials and Gen-Zers and here’s what they found:

* 99% said that saving money is important to them.

* 39% of young Americans have had to dip into their savings during Covid-19 and have used an average of one-third of their total savings

* The top reasons for using savings during Covid-19: Food, utilities, mortgage or rent, credit card debt, and student loans.

* 73% of respondents said Covid-19 will shape their financial habits moving forward.

Americans Regret Lack of Emergency Savings During Pandemic

June 22, 2020 Leave a Comment

A new survey finds that Americans regret their lack of emergency funds to withstand the economic crisis caused by the pandemic.  The Bank Rate survey found that 23 percent of Americans rate that as their biggest regret, followed closely by not having enough retirement savings.  Having too much debt came in at number three. Fox 5 NY reports:

And when it comes to getting finances in order while moving forward, the top financial priority was paying down debt followed by saving more for emergencies and a large number of people who didn’t know what their top financial priority should be.

Other priorities included saving more for retirement, living within their means, and finding a more stable income.

By age group, not enough emergency savings was the top financial regret for millennials (24 percent) and Generation X (25 percent). In contrast, not enough retirement savings was the top regret for boomers and the Silent Generation who expressed regret.

Quarter Of Americans Have No Emergency Savings In Age Of Coronavirus

April 3, 2020 Leave a Comment

The U.S. economy is currently facing its toughest challenge since the Great Depression, and millions of Americans suddenly find themselves out of work. Financial experts have long advised people to build a savings account for emergencies, but it’s fairly safe to say that no one saw a widespread economic emergency of this scale coming. We’re all scrambling to adapt, but a new survey is illustrating just how bad the situation is for many Americans. Studyfinds reports:

A total of 1,100 Americans were polled, and one in four (25%) said they don’t have any emergency savings at all. Another 23% only have enough to get by for three weeks. While there is some help on the way in the form of $1,200 government stimulus checks, 42% said they’ll have to immediately spend that money on bare essentials like groceries.

The survey, commissioned by GOBankingRates, also came to a number of other financial findings. Perhaps one of the most eye-opening is the revelation that two-thirds of Americans have either already been financial burdened by the coronavirus crisis (36%) or expect to be soon (28%).

Coronavirus Reveals Financial Irresponsibility of Americans

March 23, 2020 Leave a Comment

How long could you sustain your household if you were to stop earning income? If you are like most Americans, the answer is not for long. Only 40 percent of Americans can afford an unexpected $1,000 expense with their savings. The Hill reports:

In fact, nearly 80 percent of workers are living paycheck to paycheck. It is no surprise that the probability of an economic recession brought on by the coronavirus pandemic caused many to worry.

In major cities such as Boston, New York, Los Angeles, and San Francisco, restaurants and businesses have been ordered to close. For many hourly workers, this means no paychecks in the coming weeks. Almost one in five Americans have already lost their jobs or have reduced hours. At the same time, salaried workers are concerned about job security, as mass layoffs at numerous companies loom. While the situation is understandably stressful for every person affected, it serves as a sobering reminder that Americans must learn to live within their means and regularly save money.

The need for all Americans to be able to sustain themselves for at least a few months on savings is accentuated during a time of crisis. This means planning ahead when times are good.

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