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Latest News About Personal Finance

Amazon’s Jeff Bezos Surpasses $100 Billion Net Worth

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Amazon founder’s net worth has risen $33 billion so far in 2017. With strong performance for Amazon’s Black Friday sales, Jeff Bezos’ net worth jumped above $100 billion on Friday. The Amazon CEO’s fortune reportedly surged $2.4 billion to $100.3 billion, after the retailer’s shares grew more than 2 percent on Black Friday. Bloomberg reports:

“Online purchases for the day are up 18.4 percent over last year, according to data from Adobe Analytics, and investors are betting the company will take an outsized share of online spending over the gifting season. The $100 billion milestone makes Bezos, 53, the first billionaire to build a 12-figure net worth since 1999, when Microsoft co-founder Bill Gates hit the mark. Bezos’s fortune rose $32.6 billion this year through Thursday, the largest increase of anyone on the Bloomberg Billionaires Index, a daily ranking of the world’s 500 richest people. Amazon have climbed 5 percent this week alone.”

“The $100 billion milestone makes Bezos, 53, the first billionaire to build a 12-figure net worth since 1999, when Microsoft Corp. co-founder Bill Gates hit the mark… Gates, 62, who has a net worth of $86.8 billion according to the Bloomberg index, would be worth more than $150 billion if he hadn’t given away almost 700 million Microsoft Corp. shares and $2.9 billion of cash and other assets to charity, according to an analysis of his publicly disclosed giving since 1996.”

Want Better Pay? Learn to Sit in Front of a Computer

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Sitting in front of a computer may be bad for your health, but it’s great for your paycheck. Jobs that have become the most digital in the past decade have seen the fastest wage growth, while those that use computers less frequently have seen pay increase sluggishly, according to a Brookings Institution paper.

Worker productivity is an important driver behind the difference in pay gains, according to the research. The Wall Street Journal reported:

Highly digital jobs clocked more than 2.6% wage growth between 2010 and 2016. Over the same period, jobs with medium digital scores saw average wages grow by 1.4% and those with low digital scores by just 1.3%.

In essence, Americans who use computers at work tend to be more productive. That helps explain why some health-care professionals are experiencing faster pay increases than plumbers or truck drivers.

“All things being equal…the more digital skills a worker has, the greater their productivity and pay,” said Mark Muro, a senior fellow at Brookings and one of the authors of the paper. “Most productive firms and organizations are rapidly rolling their processes into digital platforms.”

The mean annual wage for workers in highly digital jobs was $72,896 in 2016, while workers in mid-level digital jobs earned about $48,274 and those in low-digital positions earned $30,393. In the U.S., the mean annual wage across all occupations was $49,630 in 2016, according to the Labor Department.

Survey: 7 In 10 Americans Would Skip Gift-Giving On Holidays

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For many people, giving and receiving gifts are one of the big parts of the holidays. However, a new survey shows that 69 percent of Americans would skip exchanging gifts if their family and friends agreed to it. CBS Minnesota reported:

“The survey, conducted by Harris Poll on behalf of SunTrust Bank, also showed that 60 percent of those surveyed said they would spend more time with friends and family if they didn’t have to worry about buying or making gifts. Which isn’t to say that people just want to spend less. The survey found 25 percent said they would use that money on activities with friends and family. Conversely, 37 percent said they would pay down debt and 47 percent would choose to save that money or invest it.”

1 Out of Every 20 Americans Is Now a Millionaire

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According to a report from Credit Suisse, 1 out of every 20 Americans is a millionaire.  Millionaires next door are living right next to us. Money reported:

The number of millionaires in the U.S. just hit an all-time high, a new banking report finds.

In its annual report on the state of global wealth, Credit Suisse says 1.1 million new millionaires were created in the U.S. in 2017. That brings the total number of millionaires in the U.S. up to approximately 15,356,000, or about one in every 20 Americans.

The rise in the stock market is the biggest reason for the gains, which in turn were driven by both stronger underlying economic conditions and the prospect of lower taxes and deregulation, Credit Suisse reported.

“Wealth per adult has now fully recovered [from financial crisis lows], and is 30% above the 2006 level,” the bank says. “There is some uncertainty about future interest rates and stock market prospects, but otherwise the signs are mostly positive for household wealth.”

Americans now account for 43 percent of the world’s millionaires.

Richest 1% Own Half the World’s Wealth

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The globe’s richest 1% own half the world’s wealth, according to a new report highlighting the growing gap between the super-rich and everyone else. The Guardian reported:

The world’s richest people have seen their share of the globe’s total wealth increase from 42.5% at the height of the 2008 financial crisis to 50.1% in 2017, or $140tn, according to Credit Suisse’s global wealth report published on Tuesday.

“The share of the top 1% has been on an upward path ever since [the crisis], passing the 2000 level in 2013 and achieving new peaks every year thereafter,” the annual report said. The bank said “global wealth inequality has certainly been high and rising in the post-crisis period”.

The increase in wealth among the already very rich led to the creation of 2.3 million new dollar millionaires over the past year, taking the total to 36 million. “The number of millionaires, which fell in 2008, recovered fast after the financial crisis, and is now nearly three times the 2000 figure,” Credit Suisse said.

These millionaires – who account for 0.7% of the world’s adult population – control 46% of total global wealth that now stands at $280tn.

At the other end of the spectrum, the world’s 3.5 billion poorest adults each have assets of less than $10,000. Collectively these people, who account for 70% of the world’s working age population, account for just 2.7% of global wealth.

Designing the Life You Really Want

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Dave Evans, co-founder of the popular Life Design Lab at Stanford University, discusses the key concepts to guide you in your quest to figure out what you want to do in life. Evans underscores the importance of accepting who you are and connecting that to what you believe and do, while attacking dysfunctional notions like the one that dares you to be the “best version of yourself.”

Transcript

So, we’re here to talk about this designing, how design thinking might apply to your life. That’s not starting a company, but managing your life if you’re gonna start a company is a pretty challenging thing. So, what this thing is all about, first of all, Bill Burnett, my partner who is not here, he’s actually doing something similar in another building on the campus right now, so 10 years ago, Bill and I got together, had lunch, started talking about this thing, and said, “Hey let’s do this,” in the summer of 2007, and that turned into what is now called the Life Design Lab. And at the Life Design Lab, our mission is very simple. It is to apply the innovation principles of design thinking to the wicked problem of designing your life at or after university. That’s a carefully crafted elevator pitch. All the colored words, if you click on ’em, you get a white paper. Most people go, “What does that really mean? “That sounds great. “That sounds like a VC pitch.” No, we teach the classes that help you figure out what you wanna be when you grow up. And then everybody goes, “Oh, can I take the class?” So that’s a better question. [Read more…]

What the New Tax Cuts Mean For National Debt and American Households

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On November 2nd, 2017, we saw the details of the highly anticipated tax plan being released. Given the magnitude of this plan, it is safe to forecast a huge change in the way Americans pay taxes. Since a large proportion of citizens voted for the opposite to what has been presented, let’s look at how this change will affect American households and the country’s national debt.

New Cuts – What to Expect?

The new tax plan looks to cut tax rates and also cut contributions in a number of vital areas including medical programs such as Medicare. Another program being scrapped is local deductions and student loan deductions, while corporate tax sees a 15 percent reduction. With all these changes, what does this mean for our national debt? Well according to calculations, the revamped tax plan will actually add $150 billion a year in national debt. In other words, the fiscal deficit wouldn’t be decreasing but increasing.

However, there are no plans to increase revenues elsewhere or by any other means. Ultimately this leads to reduced national revenue and increased national debt. In a decade, this would easily place national debt at its highest since World War II. Considering America’s current debt of $20 trillion and $12.7 trillion in consumer debt, it’d be safe to say things aren’t looking very good.

However, it has to be said that America isn’t the only country facing such a predicament. A great number of European nations are also dealing with a challenging economic situation, not to mention some of the most indebted African countries, like Uganda and Namibia.

As a percentage of America’s GDP, we now owe more than the country generates annually. By cutting taxes garnered from citizens and corporations, the government will see a federal deficit.Trump’s administration argues that this increase is necessary to achieve the aggressive growth he laid out, most notably the 6 percent annual growth in the American economy. So how does the administration plan to pay for this? [Read more…]

What It Costs to Live the American Dream

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The American Dream is deeply rooted in the Declaration of Independence, which proclaims that “all men are created equal” with the right to “life, liberty and the pursuit of happiness.” For hundred of years, the American Dream has encouraged millions of people across the world to come to America in search of better lives

According to a new Pew Research Center survey, the American Dream is back. 82 percent believe their either achieved the dream or are on their way. Specifically, Pew found that 36 percent believe they’ve achieved the American Dream and 46 percent believe that they are “on their way to achieving” it.

But what does the American Dream mean to you? For some, the American Dream entails a nice home in a safe neighborhood, a decent car, a full health care coverage, one summer vacation, a full contribution to retirement plan, and a regular contribution to kids’ education funds.

No idea is more central to Americans’ outlook than the American Dream — the belief that with hard work and the freedom to pursue your destiny you can achieve success and provide better opportunities for your children. Let’s see what it costs to live the American Dream.

How Much Does It Cost To Live The American Dream?

So what does it cost to live the American Dream in 2017? The price tag for the American Dream comes out to be around $135,000 a year. [Read more…]

What Are the Maximum 401(k) Contribution Limits?

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The 401(k) plan is the most popular type of employer-sponsored defined-contribution retirement plan. According to the Survey of Income and Program Participation (SIPP), 60 million individuals or 33.0% of the U.S workforce participated in 401(k) plans in 2008.

By saving in the 401(k) plan, you get an immediate tax break, because contributions come out of your paycheck before taxes are withheld. You also get tax-deferred growth – meaning you don’t pay taxes each year on capital gains, dividends, and other distributions.

Each year the IRS can annually adjust contribution limits. For 2018, the pre-tax contribution limit to the 401(k) plan is increasing to $18,500 while the overall 401(k) contribution limit increases slightly. Here are the details of 401(k) contribution limits.

401(k) Contribution Limits

Tax Year 2018 Tax Year 2017
Elective Deferral Limit $18,500 $18,000
Overall Contribution Limit $55,000 $54,000
Catch-Up Contribution $6,000 $6,000

Roth and Traditional IRA contribution limits

Tax Year 2018 Tax Year 2017
Age 49 and under Up to $5,500 (must have employment compensation) Up to $5,500 (must have employment compensation)
Age 50 and older Additional $1,000 Additional $1,000

Summary

For the 2018 tax year, you can choose to contribute up to $18,500 into the pre-tax 401(k) account, with an additional $6,000 catch-up contribution allowed if you are 50 and older.

The overall 401(k) contribution limit is $55,000. This overall limit includes employees’ pre-tax, after-tax or Roth contributions to the 401(k) Plan. For participants 50 or older with an additional $6,000 catch-up allowance, the overall limit is $61,000.

For Roth IRA and Traditional IRA, the contribution limit is $5,500 with an additional $1,000 catch-up contribution allowed if you are 50 and older.

How to Protect Your Identity at Tax Time

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Your tax return is full of personal information, which is why it’s important to make sure it stays safe. Learn basic measures to help protect yourself from identity theft and tax scams. Khan Academy partners with Better Money Habits to give you a guide on how to protect your identity at tax time.

Protecting Your Identity at Tax Time

Strategies for Improving Your Personal Finances in 2018

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As another year begins to wind down, it’s time to look ahead to the future in order to set both personal and professional goals for 2018. If 2017 wasn’t the best for your finances, there is no better time than the present to make a plan to get back on track. Whether you incurred unexpected debt, spent too much on unnecessary purchases, or didn’t save as much as you would have hoped, you have the ability to make the next year a better one.

Want to explore some of the best ways to get your finances in top shape? Here are three proven strategies for you to use in 2018.

If you don’t have one already, create a budget

In a 2013 Gallup poll, it was reported that two-thirds of Americans do not have a budget. When you don’t have a plan for your income, your finances can get out of control in a hurry. Creating a personal budget allows you to know exactly how much you can spend in various areas, and prevents you from overspending. Unsure of how to create a budget? Begin by listing out all of your monthly expenses, and subtracting those expenses from your household income. Then, decide how to spend all remaining income. To further protect your budget, use cash for all of your purchases. This step helps you avoid the temptation of overspending when using a debit or credit card.

Check your credit score

The Internet has made it incredibly quick, easy, and free to check your credit score. Because of this technology, there is no good reason not to know what your credit score is (or not to have an educated estimate of your current score). Why is knowing your credit score important when improving your finances? First, your credit score can motivate you to rapidly take action if you don’t like the number you see. If you’ve gone over your credit limit, haven’t made your payments on time, or are only making the minimum payment, your credit score can serve as a wake-up call. Additionally, even if you have a good credit score, looking for and removing inaccuracies from your credit report can quickly boost your score.

Eliminate wasteful spending

Modern life in America has made it easier than ever before to spend money on things you don’t need. Some of the most common things to waste money on include daily coffee beverages, dining out, credit card interest, gym memberships, and online purchases. If you are guilty of letting your money slip away on luxury purchases, 2018 can be a year of intentional spending. Start by assessing where you can cut back on spending on a weekly basis. Second, contact your cell phone provider, cable provider, and provider of any other monthly services to see if you can switch to a more economical plan.

Small steps can lead to big financial improvements in 2018

Depending on your current financial situation, the road to improvement may seem long. While this might be the case, taking many small steps is the only way to get where you want to go. As you set your budget, check your credit score, and eliminate wasteful spending, observe and appreciate the progress that you do make. It is through this progress that you can gain the motivation to stay on track and reach your financial goals in 2018.

Trump Hints That Tax Cuts Are Coming

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Trump plans to reduce tax rates drastically to promote job and income growth. President Trump writes on USA Today:

Today is the anniversary of former president Ronald Reagan signing into law the Tax Reform Act of 1986. The act was the second major law he signed to reform the tax code for the American people.

Republicans and Democrats came together to cut taxes for hardworking families in 1981, and again in 1986 to simplify the tax code, so that everyone could get a fair shake. The rest, as they say, is history.

The economy boomed, launching into one of the largest peacetime economic expansions in history. Dormant small businesses and factories sprung back to life. The famed American Worker produced at unprecedented levels. The median family income rose. And more American products than ever before reached foreign shores, stamped with those four beautiful words: “Made in the USA.”

The 1980s also saw extraordinary ideas transformed into reality by American inventors and entrepreneurs. Many of those creations dramatically improved our quality of life. Others connected us like never before and put an entire universe of information at our fingertips. Still others, like the space shuttle after its first launch in 1981, stretched the bounds of what we thought was possible for humankind.

It was a time of extraordinary optimism — it was truly “Morning in America,” an economic miracle for the middle-class.

A lot has changed since then, especially when it comes to taxes.

While our economic competitors slashed their taxes in hopes of replicating America’s success, our leaders remained complacent or, in some cases, reversed course.

We are now among the highest taxed nations in the developed world. Our tax code and laws have nearly tripled in length since the 1986 reforms. They now span 2,650 pages, with another 70,000 pages of forms, instructions, court decisions, and other guidance.

We have watched our leaders allow other countries to erode our competitive edge, take our jobs, and drain our wealth. And, for the first time in our history, Americans have feared that their children will not grow up to be better off financially than they are.

That era of economic surrender is now over.

[Read more…]

Obesity is Costly

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Obesity is one of the biggest drivers of preventable chronic diseases and healthcare costs in the United States. Each year the healthcare costs related to obesity range is $190 billion. America’s obesity crisis appears more unstoppable than ever. NBC News reported:

A troubling new report released Friday by the Centers for Disease Control and Prevention shows that almost 40 percent of American adults and nearly 20 percent of adolescents are obese — the highest rates ever recorded for the U.S.

“It’s difficult to be optimistic at this point,” said Dr. Frank Hu, chair of the Department of Nutrition at the Harvard School of Public Health. “The trend of obesity has been steadily increasing in both children and adults despite many public health efforts to improve nutrition and physical activity.”

The continued weight increase in the youngest Americans is especially worrisome for long-term health. One in five adolescents, ages 12–19; one in five kids, ages 6–11, and and one in ten preschoolers, ages 2–5 are considered obese, not just overweight…

The consequences of the obesity epidemic are devastating: High blood pressure, diabetes, heart disease and stroke are not only killing millions of Americans annually — the obesity epidemic is also a humongous burden on the American health care system, making up $190 billion a year in weight-related medical bills.

 

Why Market Timing Doesn’t Work

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Taylor Larimore, a well-respected Bogleheads, compiled a list of what experts say about market timing vs. staying the course. Market timing is essentially making portfolio changes based on market forecasts. Read the list below to educate yourself about the danger of market timing.

What Experts Say About Market Timing

“The stock market will fluctuate, but you can’t pinpoint when it will tumble or shoot up. If you have allocated your assets properly and have sufficient emergency money, you shouldn’t need to worry.” (AAII Guide to Mutual Funds)

“Endless tinkering is unlikely to improve performance, and chasing last period’s stellar achiever is a losing strategy.” (Frank Armstrong, author and adviser)

“It must be apparent to intelligent investors–if anyone possessed the ability to do so (market time) he would become a billionaire quickly.” (David Babson, author, adviser)

“What it really takes to improve your returns and diminish your risks is a willingness to stop focusing exclusively on the movement of the markets.” (Baer & Ginsler, The Great Mutual Fund Trap)

“If we haven’t said it enough, we’ll say it again: Market timing is dangerous.” (Barron’s Guide to Making Investment Decisions.)

“Only liars manage to always be ‘out’ during bad times and ‘in’ during good times. (Bernard Baruch, famed investor)

“Market timing recommendations have an impressive track record of being harmful to an investor’s financial health.” (Peter Bernstein, author, researcher)

“There are two kinds of investors, be thay large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know.” (Wm Bernstein, author and adviser)

“If you’re determined to succeed at investing, make it your first priority to become a buy-and-hold investor.” (Jack Brennan in Straight Talk on Investing)

“When you give up teh hope that some advisor, some system, some source f of inside tips is going to give you a shortcut to wealth, you’ll finally begin to gain control over your financial future.” (Harry Browne, author)

“For the 12 years ending 1997, while the S&P rose 734% on a total return basis, the average return for 186 tactical asset-allocation mutual funds was a mere 384%.” (Buckingham Financial Services)

“We have long felt that the only value of stock forecasters is to make fortune-tellers look good.” (Warren Buffet)

[Read more…]

Hobbies and Activities for Couples on a Budget

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Are you allowing quality time with your honey to get pushed aside due to the lack of funds or a tight budget? There are too many free or low-cost activities available to ignore such a vital part of your relationship. According to Courtney Carver, author of Simple Ways to Be More with Less, “Shared interests for couples are so important. When you have a hobby or activity that you enjoy with your partner, you naturally spend more time together and have more to talk about. There are so many things you can do together. Hiking, skiing, cooking classes, travel and other activities add another level of connection and communication. It’s important to have your own individual interests as well, but the things you enjoy together will strengthen your relationship.” If you are searching for ideas for cheap couples activities, here are 25 ideas to help get you started!

Hobbies and Activities for Couples on a Budget

1. Ballroom Dancing

Most studios offer big discounts to first time students. Take advantage of these introductory specials and then use what you learn. Before you know it, you and your amore will be dancing your way through life. Go to access dance for information relating to all things ballroom.

2. Massage

Getting a professional massage is expensive. Learn massage techniques online for free.

3. Community Theatre

Enjoy seeing a live show or join a community theater group and be part of the fun. You will not only save money, but feel good about supporting your community.

4. Bicycling

Whether you’re on a mountain bike, road bike or a bicycle built for two, you and your sweet baboo will be rolling into fun times ahead.

5. Concerts in the Park

During summer months most local parks have free concerts. Pack a picnic blanket, a bottle of wine (if allowed), and some light snacks. Snuggle into your snookum’s arms and listen to sweet melodies under the stars. [Read more…]