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Lost Passwords Lock Millionaires Out of Their Bitcoin Fortunes

January 12, 2021 57 Comments

Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million. The New York Times reports:

The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7,002 Bitcoin. While the price of Bitcoin dropped sharply on Monday, it is still up more than 50 percent from just a month ago when it passed its previous all-time high around $20,000.

The problem is that Mr. Thomas years ago lost the paper where he wrote down the password for his IronKey, which gives users 10 guesses before it seizes up and encrypts its contents forever. He has since tried eight of his most commonly used password formulations — to no avail.

“I would just lay in bed and think about it,” Mr. Thomas said. “Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”

Bitcoin, which has been on an extraordinary and volatile eight-month run, has made a lot of its holders very rich in a short period of time, even as the coronavirus pandemic has ravaged the world economy.

But the cryptocurrency’s unusual nature has also meant that there are many people who are locked out of their Bitcoin fortunes as a result of lost or forgotten keys. They have been forced to watch, helpless, as the price has risen and fallen dramatically, unable to cash in on their digital wealth.

Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis. Wallet Recovery Services, a business that helps find lost digital keys, said it has gotten 70 requests a day from people who want help recovering their riches, three times the number of a month ago.

Bitcoin owners who are locked out of their wallets speak of endless days and nights of frustration as they have tried to access their fortunes. Many have owned the coins since Bitcoin’s early days a decade ago, when no one had confidence that the tokens would be worth anything.

Bitcoin Worth $34,000, But Here’s Why Warren Buffett Will Never Own It

January 3, 2021 3 Comments

Bitcoin soared to $34,000 yesterday—but here’s why Warren Buffett will never own Bitcoin. Zack Friedman writes on Forbes:

Buffett has called Bitcoin, among other names, “rat poison squared” and has said he won’t ever buy the cryptocurrency. “I don’t have any cryptocurrency and I never will,” Buffett told CNBC in February, when Bitcoin was trading at about $10,000. Here are 3 reasons why Buffett will never own Bitcoin, no matter how high the price of Bitcoin soars:

Buffett believes that Bitcoin has no underlying value. As a value investor, Buffett invests in companies that are undervalued, produce stable and recurring cash flow and have the ability to increase in book value. To Buffett, Bitcoin doesn’t produce earnings or dividends. Rather, the value of Bitcoin is simply what one person is willing to pay for it. In this regard, Bitcoin is no different than the tulip craze of 1637. Therefore, Buffett believes that Bitcoin has no inherent value…

While all investing involves some degree of speculation, Buffett’s background is in insurance and risk mitigation. Buffett doesn’t invest in “high fliers” — that’s not his game. His game is “buy and hold” — forever. He invests in companies that grow over time, steadily and consistently.

DIY Tax Software Is Ready to Take Over the Tax Season

December 28, 2020 Leave a Comment

DIY tax software is a type of fintech that is enjoying its growing popularity right now. It’s true that the crisis of 2020 has brought down many industries. But some used the global change in circumstances as an opportunity to shine. The popularity of fintech, in particular, has grown at an unprecedented pace of +72%. Tax software is getting its chance to become a mass-use product right now as the new tax season arrives. The solutions that were mostly used by businesses are now accessible to everyone and are designed to handle personal taxes quite well. This type of software varies greatly by country and by its main purpose. It’s also growing more sophisticated with each new update.

Leading DIY Tax Software in the World: What Can It Do?

TurboTax (the USA)

TurboTax from the USA is developed by Intuit, one of the leading software providers today. It’s not the cheapest solution, but it’s definitely the most sophisticated one on the market. The cost is higher because the software offers a wide range of features that make it applicable to a variety of taxing scenarios. In fact, while it’s primarily American tax software, it has versions for a variety of other countries and expats. There is a free version, so everyone can try it out and see if it works for you personally.

TurboTax is easy to use despite the fact that it can complete complex calculations. The program itself will guide you to areas you need to focus on. The solution can integrate your W-2  form, no matter how many you have of those as well as 1099s.

Those who are self-employed or are using the Deluxe service package will be able to use a most helpful ItsDeductible feature. There is even a mobile app for your convenience. Note that if you are self-employed and use QuickBooks, you can connect it with TurboTax for expense tracking.

The solution offers a good customer support system as well, including TurboTax Live.

However, remember that no matter how sophisticated this solution is, it can only be used for rather straightforward tax reports. This is the same for all DIY tax software. People with very complicated taxes, for example if you have income from ventures abroad, should hire a personal accountant.

[Read more…]

Cable Companies Can No Longer ‘Rent’ You The Router You Already Own

December 21, 2020 Leave a Comment

person in black and white striped socks lying on bed

Is your internet service provider charging you every month for the cable modem or router that you purchased with your own money? Or, perhaps, have you never bothered to buy those items because you couldn’t escape the fee? That fee is illegal as of yesterday. The Verge reports:

Last year, Congress passed a law that should have fixed this ridiculous loophole as of June 20th, 2020 — and though the FCC managed to extend the deadline six months by spinning up some bullshit about how cable companies didn’t have the resources to stop charging you money, the law should take full effect Monday.

Do note that the actual text of the law still allows some BS to occur. If your ISP sends you a router, you’ll need to return it to avoid charges.

Frontier in particular has been notorious for charging customers $10 a month for their equipment “whether you use it or not” — the company’s words, not mine — but Frontier is clearly aware it won’t be able to do that anymore. Starting this month, the company’s equipment page has changed to remove the part where it talks about the mandatory fee.

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.

Reddit Has Become The Gospel of Personal Finance

October 25, 2020 Leave a Comment

SIMPLE MONEY RULES

If you look beyond the memes, cat videos, and quirky acronyms (TIL, OP, ELI5) you’ll find a treasure trove of resources that will help you quickly get acquainted with the topics that have long eluded you. For me, even though I worked on Wall Street for nearly 15 years, Reddit is the first place I turn when I have a question about money. Khe Hy writes on Quartz:

To me, here’s what makes good financial advice: objectivity, accuracy, and relatability. With an alien mascot named Snoo, an impossibly sprawling site structure, and user anonymity, Reddit may seem like an unlikely place for the serious business of money. But in fact, it has each of these qualities in spades. 

According to Amazon’s Alexa, Reddit is the sixth most popular site in the US; the site reported 430 million active users at the end of 2019. Reddit is organized into niche communities (known as subreddits that begin with “r/”) with their own guidelines, norms, and moderators covering both mainstream (r/kpop) and obscure (r/namenerds for new parents seeking inspiration) topics. Because users self-select to be active in these communities, Redditors are known to be passionate and have been described as “offbeat, quirky, and anti-establishment.” All these qualities make it a great place for conversations about money. Consider the subreddit Frugal Living (r/Frugal), which shows what allows Reddit to offer better financial advice than many of those other sites: the Redditor community. Frugal Living’s mission statement is to “understand the resources that we have, and [how to spend] them wisely and deliberately” and this subreddit contains actionable tips on eking out that last bit of toothpaste, warnings that Amazon Day is pure marketing, and why you shouldn’t pay for scientific journals. These posts offer encouragement, collaboration, and a relatability that’s hard to find in the traditional financial press, no matter your financial situation. […] One final word of warning: no matter whether financial advice comes from the front page of the internet or the front page of the Wall Street Journal, it’s incumbent upon the buyer to scrutinize the details, lead with skepticism, and, when appropriate, consult with professionals.

Some of the communities that might help you with personal finance on Reddit include: Personal Finance, Frugal Living, Investing, Financial Independence / Retire Early, and Stocks.

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.

More Than 1 Million New Yorkers Can’t Afford Food

October 20, 2020 Leave a Comment

The lines are long and the need is enormous. More than 1 million New Yorkers can’t afford food, and standing on long lines at food banks is now too common amid the pandemic. Pandemic worsens NYC’s food crisis. Fox 5 NY reports:

An estimated 1.5 million New Yorkers cannot afford food, according to the New York Times. Their only lifeline is a food pantry.

“I’m on a limited income. I visit every two to three weeks,” said Denise Allen, a mother of one.

Rapaport said there is so much need. So much so that for the last three days, Rapaport, his staff, and volunteers have been operating around the clock. All three locations are now open 24/7, feeding 1,500 families a day, but it is still not enough, he said.

Pandemic or Not, Some Assets and Services Grow Ever Hotter

October 19, 2020 Leave a Comment

stock exchange board

There is no doubt that the coronavirus pandemic will change the world. In fact, it already has changed the world, and it will keep going. Many of the reports and forecasts you can see today show devastating losses in some industries. Forecasts from economists and other experts predict a grim future drawing parallels with the Great Depression. Seeing how many businesses are failing because of lockdowns, a tragedy seems inevitable.

However, while this all is happening, some industries are growing and values of some assets are going up. It’s true that many companies are failing, but there are also those that report record increases in revenue. The stock market has all but recovered, largely due to the rapid gain by tech giants.

It’s true that there is a lot of uncertainty still. It’s also a fact that the global economy is going into a dangerous recession. However, while stressful the situation is not necessarily tragic. Changes will continue to spread as investors are reallocating their funds. Businesses will close and others will open. The change in consumer behavior will stick and we can expect to see even more overall digitalization.

But the real question is whether the powers that are going strong will be enough to hold the global economy back from total collapse?

Some Industries Are Doing Very Well Despite the Pandemic

Looking back at previous economic recessions, one thing remains quite stable. As the economy crashes, so do house prices. However, while the COVID-19 crisis is definitely one of the worst, its effect on real estate is different. Home prices continue to rise. In some countries, for example, Germany and South Korea, the housing market is growing so fast that local governments have to implement buyer restrictions. Even in America, which is admittedly struggling during this crisis, real estate value keeps increasing.

For the real estate market, the main reasons for growth are policies and a big change in buyers’ preferences. Lenders have to lower interest rates in response to the crisis. Governments in richer countries also launched policies that offer some leniency, like banning foreclosures for the duration of the pandemic. People also became more interested in purchasing bigger homes with gardens in suburban areas. The latter is, no doubt, in response to many companies accepting remote work as the new norm.

Residential real estate isn’t the only sector that’s doing well. Technology giants and startups alike are enjoying robust growth in this otherwise difficult time. As so many aspects of our everyday lives are getting transferred online, businesses that facilitate this transition are getting an unprecedented boost in interest.

Investors definitely caught on to that. Therefore, they started putting their money into tech companies and other industries that are fueled by the pandemic. Healthcare is definitely at the top there.

Even retail trade isn’t doing too badly. It’s true that the overall consumption level has gone down. This is an expected trend for an economic recession. However, online sales are growing super-fast. Therefore, online retailers, and the ones that were quick to change, are getting bigger revenues despite the pandemic. [Read more…]

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.

The Average American Has $90,460 in Debt

October 16, 2020 Leave a Comment

Debt

In our efforts to keep up with the Joneses (or just get by during this period of economic uncertainty, debt has become a normalized part of the American lifestyle. CNBC reports:

Borrowing money is often an important part of a long-term financial plan, whether it’s to access education and career opportunities, buy a car for your commute or find a place to call home.

However, debt also involves a little risk and can be expensive. Not only do you pay interest fees, borrowing of any kind requires you to make your payments on time in order to keep your account and credit score in good standing. It’s not uncommon for consumers to make a few common mistakes while learning how credit works and establishing lifelong money habits.

That’s why knowledge is important: Using 2019 data from credit bureau Experian, we looked at how much debt the average American has at every stage of their lives, breaking it down by total balance(s) and type, so you can get a big-picture view of how much Americans are borrowing, and why.

While the average American has $90,460 in debt, this includes all types of consumer debt products, from credit cards to personal loans, mortgages and student debt.

Knowing these trends is important. Along with staying informed about financial planning, reading advice about saving for retirement and learning credit card basics — knowing where you stand can help you decide where to go next on your financial journey.

The 50 Richest Americans Are Worth as Much as the Poorest 165 Million

October 8, 2020 Leave a Comment

The 50 richest Americans now hold almost as much wealth as half of the U.S., as Covid-19 transforms the economy in ways that have disproportionately rewarded a small class of billionaires. Bloomberg reports:

New data from the U.S. Federal Reserve, a comprehensive look at U.S. wealth through the first half of 2020, show stark disparities by race, age and class. While the top 1% of Americans have a combined net worth of $34.2 trillion, the poorest 50% — about 165 million people — hold just $2.08 trillion, or 1.9% of all household wealth.

The 50 richest people in the country, meanwhile, are worth almost $2 trillion, according to the Bloomberg Billionaires Index, up $339 billion from the beginning of 2020.

Covid-19 has exacerbated inequality in the U.S., with job losses falling heavily on low-wage service workers and the virus disproportionately infecting and killing people of color. Meanwhile, many upper-middle class professionals are working from home, watching their retirement accounts rise in value after the U.S. Treasury and Fed pumped stimulus into the economy and markets.

Another key reason for the wealth disparity is that the vast majority of Americans aren’t benefiting from rising stock prices. The bottom 90%’s exposure to the stock market has been dropping for almost two decades. Since peaking at 21.4% in 2002, upper middle class Americans have seen a 10 percentage point decline in their equity interest in companies. A similar pattern is seen among the bottom half.

Pandemic Accelerated Cord Cutting, Making 2020 the Worst-Ever Year For Pay TV

September 22, 2020 1 Comment

black crt tv showing gray screen

According to new research from eMarketer, the cable, satellite and telecom TV industry is on track to lose the most subscribers ever. This year, over 6 million U.S. households will cut the cord with pay TV, bringing the total number of cord-cutter households to 31.2 million. TechCrunch reports:

The firm says that by 2024, the number will grow even further, reaching 46.6 million total cord-cutter households, or more than a third of all U.S. households that no longer have pay TV.

Despite these significant declines, there are still more households that have a pay TV subscription than those that do not. Today, there are 77.6 million U.S. households that have cable, satellite or telecom TV packages. But that number has declined 7.5% year-over-year — its biggest-ever drop. The figure is also down from pay TV’s peak in 2014, the analysts said. 

The pay TV losses, as you may expect, are due to the growing adoption of streaming services. But if anything, the pandemic has pushed forward the cord-cutting movement’s momentum as the health crisis contributed to a down economy and the loss of live sports during the first part of the year. These trends may have also encouraged more consumers to cut the cord than would have otherwise.

“Consumers are choosing to cut the cord because of high prices, especially compared with streaming alternatives,” said eMarketer forecasting analyst at Insider Intelligence Eric Haggstrom. “The loss of live sports in H1 2020 contributed to further declines. While sports have returned, people will not return to their old cable or satellite plans,” he added.

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