Personal Finance News

Apple Announces $2.5 billion Plan to Ease California Housing Crisis

November 4, 2019 Leave a Comment

Faced with ever-increasing housing prices, people are leaving San Francisco and the Bay Area, and Apple, whose corporate home is in Cupertino, California, wants to do something about it. Mashable reports:

On Monday, the company announced a $2.5 billion plan to alleviate the issue by investing in affordable housing and helping Californians — especially first-time home buyers and low-income families — buy a home.
“Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution,” Tim Cook said in a statement.
The $2.5 billion plan includes a $1 billion affordable housing investment fund, which will provide the state of California and other entities with an “open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost.”
Another $1 billion will go towards a first-time homebuyer mortgage assistance fund, which should help homeowners with financing, with a focus on increasing access to first-time homeownership for “essential service personnel, school employees and veterans.”
Additionally, Apple will commit $300 million towards building affordable housing in Apple-owned and available land, a $150 million towards a Bay Area housing fund, and $50 million towards supporting vulnerable populations.

The 5 Best Personal Finance Podcasts You Haven’t Heard of Yet

November 3, 2019 Leave a Comment

If you need some different, unique, or new-to-you personal finance podcasts, try one of these shows. Eric Roberge recommends these great personal finance podcasts on Forbes:

Couple Money with Elle Martinez
Beyond Finances with Eric & Kali Roberge
Popcorn Finance with Chris Browning
The Money Nerds with Whitney Hansen
Redefining Wealth with Patrice Washington

US Debt Surpasses $23 Trillion for First Time

November 2, 2019 Leave a Comment

The federal government’s outstanding public debt has surpassed $23 trillion for the first time in history, according to data from the Treasury Department released on Friday. The Hill reports:

Growing budget deficits have added to the nation’s debt at a speedy rate since President Trump took office. The debt has grown some 16 percent since Trump’s inauguration, when it stood at $19.9 trillion. It passed $22 trillion for the first time just 10 months ago.
Of the $23 trillion figure, just under $17 trillion was in the category of debt held by the public, which is a more useful gauge of the debt the government has to pay down, and the number typically used in calculating the nation’s debt burden. The other $6 trillion comes from loans within government bodies.
Still, the $23 trillion figure marks a milestone.

Black Unemployment is at Record Low

November 1, 2019 Leave a Comment

Nonfarm payrolls rose by 128,000 in October, exceeding the estimate of 75,000 from economists surveyed by Dow Jones. The unemployment rate ticked higher to 3.6%, in line with estimates, but remains around the lowest in 50 years. The unemployment rate for African Americans nudged down to a record low 5.4%. CNBC reports:

The total employment level as measured in the household survey jumped to 158.5 million, also a new high.
The pace of average hourly earnings picked up a bit, rising 0.1% to a year-over-year 3% gain, also in line with estimates. The average work week was unchanged at 34.4 hours.
“This report is yet another sign that the economy is still strong right now and adds to a list of indicators that are looking optimistic of late,” said Steve Rick, chief economist at CUNA Mutual Group. “The vigor of this labor market, along with a more positive housing market and solid Q3 GDP, should offer some welcome reassurance.”

Early Retirement May Speed Up Cognitive Decline

October 31, 2019 Leave a Comment

While retiring ahead of schedule may be easier on the body, a new set of research has found that it may not be so beneficial for the mind. The study, conducted at Binghamton University, finds that an early retirement can accelerate the usual rate of cognitive decline among the elderly. Study Finds reports:

The research team analyzed China’s new rural pension scheme (NRPS), as well as China’s most recent Retirement Longitudinal Survey (CHARLS), in order to investigate the effects of early retirement and pension benefits on individual cognition among adults over the age of 60. For reference, CHARLS is a representative national survey of China’s population over the age of 45 that tests respondents regarding mental cognition, episodic memory, and overall mental wellbeing.
After going over all of the data, the research team noted a clear trend: individuals receiving pension benefits were experiencing much more rapid mental decline than their counterparts still on the workforce. The most prominent indicator of mental decline among retirees was delayed recall, a trait widely considered to be an accurate predictor of dementia. Surprisingly, females seemed to experience even sharper mental decline after retiring early. Overall, the results support the hypothesis that decreased mental activity accelerates cognitive decline.

US GDP Rose a Better-Than-Expected 1.9% in the Third Quarter

October 30, 2019 Leave a Comment

The Commerce Department on Wednesday said economic activity in the U.S. grew at an annualized rate of 1.9% in the third quarter, down slightly from the 2% pace in the second quarter. Economists polled by Dow Jones had expected the economy to grow at a 1.6% rate. CNBC reports:

The better-than-expected print was the result of continued consumer spending as well as government expenditures, the government report said. Personal consumption expenditures, a gauge of spending by American households, rose at a 2.9% annualized rate while government spending grew at a 2% rate.
Imports, which are a subtraction in the calculation of GDP, increased during the third quarter. The most recent report on the U.S. trade deficit showed the imbalance at $54.9 billion at the end of August as imports outpace exports in the last full month of summer.
Growth in gross private domestic investment, however, continued to decline in the three months ended September 30 with a read of -1.5%, but far better than the -6.3% contraction in the second quarter.

America’s Middle Class Is Addicted to a New Kind of Credit

October 29, 2019 Leave a Comment

It’s called the online installment loan, a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. Bloomberg reports:

If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.
In just a span of five years, online installment loans have gone from being a relatively niche offering to a red-hot industry. Non-prime borrowers now collectively owe about $50 billion on installment products, according to credit reporting firm TransUnion. In the process, they’re helping transform the way that a large swathe of the country accesses debt. And they have done so without attracting the kind of public and regulatory backlash that hounded the payday loan.
“Installment loans are a cash cow for creditors, but a devastating cost to borrowers,” said Margot Saunders, senior counsel for the National Consumer Law Center, a nonprofit advocacy group.
For many families struggling with rising costs and stagnant wages, it’s a cost they’re increasingly willing to bear.

S&P 500 Index Hits All-Time High

October 28, 2019 Leave a Comment

The S&P 500 index closed at an all-time high Monday, extending a recent string of gains in what’s mostly been a solid month for the market. AP reports:

The benchmark index closed at 3,039.42, around 14 points above its previous record set on July 26. The S&P 500 notched its latest milestone after weeks of hovering just below its prior high.
Monday’s rally came at the beginning of a busy week of corporate earnings and economic reports and with investors expecting another interest rate cut by the Federal Reserve.
Coming into this week, investors have been encouraged as most of the companies that have reported quarterly results the past couple of weeks that beat Wall Street analysts’ forecasts for earnings growth.

Currency is Popular Again, Especially the $100 Bill

October 27, 2019 Leave a Comment

People in many of the world’s most advanced nations — including the United States, the euro area and Japan — are holding more of it than ever. In the U.S., for example, currency in circulation stood at an estimated $1.76 trillion as of late September, according to the Federal Reserve. That’s about 8.2% of gross domestic product, up from just 5.6% before the 2008 financial crisis and close to the highest level in at least 36 years. Los Angeles Times reports:

If people need less cash to pay for stuff, why do they want to hold so much of it? The answer, it seems, is that they’re turning to currency as a store of value.
Consider the kind of cash they favor: Increasingly, it’s large denominations such as $100 bills, which are the most convenient for stashing away big sums. Benjamin Franklin’s share of total U.S. currency in circulation reached 80% in 2018, up from 73% a decade earlier, Federal Reserve data show.
Since 2017, the $100 bill has surpassed the $1 note as the most widely circulated U.S. currency…
When safe investments such as deposits or government bonds yield little or less than nothing, people aren’t missing out by holding paper money. This illustrates why central banks can’t push rates too far below zero: Instead of spending the money or watching their savings shrink while sitting in the bank, people will just withdraw their cash and put it in the mattress.

Economy’s Bumpy Ride is About to Get Bumpier

October 26, 2019 Leave a Comment

The U.S. economy has hit a lot of bumps in the road lately and the way forward is unlikely to get any smoother. MarketWatch reports:

The first big clue will come Wednesday. Gross domestic product in the third quarter running from July to September is forecast to fall to about 1.4% from a 2% pace of growth in the spring.
GDP is the official scorecard, so to speak, of how well the economy is doing. Historically the U.S. has grown more than 3% a year, but the last time it reached that mark was in 2005. Most economists think the U.S. can grow no faster than about 2%, at least not for any extended time.
The other piece of bad news is due Friday when the governments reveals how many new jobs were created in October. Economists predict the U.S. generated fewer than 100,000 new jobs last month, a figure that would be the lowest since May and one of the weakest numbers in seven years.

Customer in France Accidentally Received a Phone Bill of €11,721,000,000,000,000

October 26, 2019 Leave a Comment

A woman in France received a bill for €11,721,000,000,000,000 (that’s 11.7 million billion euros – more than 5,000 times the gross domestic product of France) – it took her days of wrangling with helpline staff to stop it being debited from her bank account. The Guardian reports:

Solenne San Jose. of Pessac, a Bordeaux suburb, had just lost her job and wanted to end her phone subscription, when the final bill arrived. She told her local paper, Sud Ouest: “I nearly had a heart attack. There were so many zeros that I couldn’t even work out how much it was.”
She called Bouygues Telecom, the phone company headed by Martin Bouygues, a friend of Nicolas Sarkozy, but was told by shrugging staff there was nothing they could do. One said: “It’s calculated automatically.” Another told her she would be contacted about paying in instalments. Several calls later, an adviser admitted it was a mistake: San Jose owed €117.21. The company has apologised and let her off the real bill.

Billionaire to Buy America’s Most Expensive Mansion for Almost $200 Million

October 25, 2019 Leave a Comment

Hedge funder Steven Schonfeld, a New York billionaire, is in contract to buy an oceanfront Palm Beach, Florida, estate for just under $200 million, say sources close to the deal. New York Post reports:

The home is about a half-mile south of President Donald Trump’s private club, Mar-a-Lago. Schonfeld already owns a $90 million mansion in Old Westbury, which has his own personal chef and a private nine-hole golf course.
The Palm Beach estate, which is on the ocean and the Intracoastal Waterway, is currently owned by philanthropist Sydell Miller, who co-founded Matrix Essentials, a hair and beauty line, with her late husband, Arnold.
Schonfeld, 60, was the 18th-highest-earning hedge fund manager this year, according to Forbes.

Hong Kong Parking Spot Just Sold for Almost $1 Million

October 24, 2019 Leave a Comment

If anyone needed further evidence of Hong Kong’s sky-high real estate prices they found it this week with news that a car parking spot sold for almost $1 million. Bloomberg reports:

The space went for HK$7.6 million ($970,000), making it the most expensive place to park an automobile in the city, and perhaps anywhere in the world. The seller was Johnny Cheung Shun-yee, a businessman with a reputation for flipping property. He made around HK$900 million last year in about nine months by buying and selling floors in an office building.
The car-parking spot is actually in the same building — The Center in Central, which also happens to be the priciest office tower in the world. For the cost of the parking space, you could buy a one-bedroom apartment in Manhattan.
“A lot of those owners in The Center are in finance or in other high-growth businesses,” said Stanley Poon, a managing director at Centaline Commercial. “To these tycoons, it’s not a significant purchase if you compare it to the value of the office floors they own.”

Apple Pay Overtakes Starbucks as Most Popular Mobile Payment Platform in the US

October 23, 2019 Leave a Comment

Apple Pay has overtaken the Starbucks mobile app to become the most popular mobile payment system in the United States, claims a new report out today. MacRumors reports:

According to eMarketer, Apple Pay became the market leader last year, when 27.7 million Americans used the app to make a purchase. Since then, however, Apple Pay has grown even faster than expected.
In 2019, Apple Pay will have 30.3 million users, or 47.3 percent of mobile payment users. That compares with Starbucks’ 25.2 million customers via its mobile app in the same year, representing 39.4 percent of mobile payment users.
“Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on,” said eMarketer principal analyst Yory Wurmser. “The same trend should also help Google Pay and Samsung Pay, but they will continue to split the Android market.”

The Boomer Generation is Becoming One of Haves and Have-Nots

October 22, 2019 Leave a Comment

Four recent studies reveal that wealth inequality among boomers specifically has been growing, turning this massive generation into one of haves and have nots. The nonpartisan reports, which analyzed boomers’ retirement security, financial assets and housing status, come from the U.S. Government Accountability Office (GAO); the National Institute on Retirement Security think tank; the St. Louis Fed’s Center for Household Financial Stability and the Harvard Joint Center for Housing Studies.

MarketWatch reports:

Wealth disparities continue as we age. The GAO reviewed the Federal Reserve’s Survey of Consumer Finances data for households with people 55 or older and said that although disparities in income decreased as older Americans aged from their 50s into their 70s, “disparities in wealth persisted.” The continued wealth disparities among older Americans, the GAO noted, “may be due to significant differences in the median value of retirement accounts and home equity between higher- and lower-earning households.”
This finding echoes what the St. Louis Fed determined looking at wealth inequality overall in America. It determined that “wealth inequality has grown tremendously from 1989 to 2016, to the point where the top 10% of families ranked by household wealth own 77% of the wealth ‘pie.’ The bottom half of families ranked by household wealth own only 1% of the pie.”