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Fed Chairman Jerome Powell Second Term

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I don’t like to write about politics, and certainly not speculation about politics, but the potential announcement of Federal Reserve Chairman Jerome Powell getting a second term is interesting. First off, Powell, is a Trump appointee. That gets people mad in certain quarters, like the Postmaster guy. However, Powell is a solid, seasoned hand acting as Fed Chief, and no one really cares who appointed him. In fact, Powell has done such a good job keeping the economy floating with minimum rocking that the only reason people were thinking there might be someone new was in order to make a “historic” appointment of someone who wasn’t a white guy — or white woman, since Janet Yellen already broke that ceiling. Now, it looks like President Biden has enough fights to pick with Congress, including ones within his own party (Dems really don’t know how to win, do they?). So, a sure thing like renominating Powell seems like a good way to be able to focus energy elsewhere. And, lucky for everyone else, he’s a good choice for the job. Check out my review of Acorns investing here. Then, look for my Capital One Miles redemption chart. You can read about …

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Extra Unemployment Ends

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Here in Colorado several restaurateurs wrote a letter to Governor Jared Polis earlier this summer asking him to join the other states that ended the extra unemployment benefits enacted in response to the global Covid-19 panic. Their theory was that the higher unemployment checks were keeping restaurant workers on the sidelines making them unable to appropriately staff their restaurants. Extra $300 Unemployment Payment Ends Until earlier this month, many recipients of unemployment were getting an extra $300 per week. This is a substantial amount considering typical unemployment benefits are around $400 per week under normal circumstances. Another way to look at is that the $300 per week represents $7.50 per hour when compared to a full-time 40-hour workweek. The restaurant owners concluded that the ability to earn a total payment of approximately $700 per week, or $17.50 per hour as a 40-hour workweek. With numbers like that, it’s no wonder that hard working restaurant jobs paying near minimum wage of $12, or even $13 or $14 per hour would not entice workers to come back. Supporters of the extended benefits looked at the same data and concluded that it is the restaurateur’s own fault for paying such low wages. Who …

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What Is Afterpay Scam Legit Worth It?

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is afterpay scam or legit

What Is Afterpay? Is Afterpay a good deal? How does After pay work, and what do Afterpay reviews say about the buy now, pay later, company? What Is Afterpay? Even before the Square buyout of Afterpay was announced, there was increasing buzz around the so-called buy now, pay later company, mostly in the form of breathless, Guess What Millennials are Doing Now? articles. So, what is Afterpay? Afterpay is a financial company. The Afterpay app is the main way of interacting with Afterpay, although many Afterpay stores integrate directly with the company. To sign up, you apply for credit with Afterpay. Afterpay sets a limit on the amount you can spend. When you buy something, the money doesn’t come out of your bank account, but rather goes on your Afterpay account as a debit that you have to pay back. Sound familar? If you said, “Hey, that’s what a credit card is,” then you have your money brain on this morning, but there are a few very important differences that make Afterpay not a credit card. How Is Afterpay Different from a Credit Card? The main difference between Afterpay and a credit card is that Afterpay charges no interest. However, …

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Why Uber and Lyft Are So Expensive Now

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uber lyft cost higher

I keep seeing articles explaining why Uber is so expensive and Lyft is so expensive when they used to be much cheaper. The answer is that as publicly traded companies, Uber and Lyft are no longer allowed to play the kind of funny-money games they did when first starting up where they covered part of the payment to drivers to make their service seem cheaper. Reality Catches Up to Uber and Lyft When Lyft and Uber were private companies swimming in piles of venture capital money, they paid drivers more than they could earn in order to attract enough drivers to their start up service. Once they were established, and knocked off the incumbent monopoly of taxi drivers, both Uber and Lyft tried to be real businesses by cutting the amount they were paying drivers in order to try and make rides profitable to the company. They never succeeded. Initially, Lyft drivers and Uber drivers didn’t have many alternatives, but the pandemic boosted the food delivery business enough that drivers found a way to make more money by delivering food. This cut the number of drivers willing to driver for Uber and Lyft as well as the number of hours …

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You Can Do It Personal Finance

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mom and dad finance

Can you really do it? Sure, but probably not the way you’re reading about in that personal finance tips article. Real Do It Yourself Personal Finance I’m going to be honest. As a professional financial advisor and Certified Financial Planner for several years, I never helped anyone quit their job to pursue their passion, or side business. I helped plenty of people retire, but who kept working at something smaller, easier, or better liked. I could have helped someone do that, but that isn’t actually why people come to financial planners, or at least that’s not why people who are willing to pay for professional advice come to financial planners. The trick to financial planning is that it is all about achieving long-term financial goals. Long-term. That’s the catch. A lot of people are not interested in long-term. They want to get rich quick, but there is a problem. After a few decades of various get rich quick schemes being pedaled around, most people in their prime working years no longer believe in get rich quick. For them, it’s about get successful quick by retiring early, or passive income, or quitting to start their own business. The thing is though, …

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Most Americans Pay No Taxes

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tax free

Estimates by The Tax Policy Center show that 61% of U.S. households pay no federal incomes taxes. Before you go off on a rant about the rich not paying their fair share of taxes by using tricky tax-dodging tactics, the reality is that many people are too poor to pay taxes. Why the Majority of Americans Pay No Taxes Ask around America and you’ll find an impression of taxes and the IRS as heartless thugs that squeeze the poor to get money for the “king” back in Washington D.C. This impression is carefully cultivated by politicians as a way to garner votes by saying that you pay too much in taxes and get too little in return. The truth is that there is a lot of compassion built into the tax system. Poor People Don’t Pay Taxes What most people don’t realize while they scream at the rich for not paying their taxes and lamenting how much the poor have to pay, is that poor people don’t pay taxes. If you look at the tax brackets, it certainly seems poorer Americans pay taxes. The lowest tax bracket starts takes 10% and that is only up to $9,950 for those filing …

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Federal Reserve Meeting Notes Meaning

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fed reserve meeting notes

The Federal Reserve meets once a quarter. After that meeting, they announce what, if any changes, they have made to the Fed’s interest rate policy. At the last meeting, there were no changes to the Federal Reserve’s interest rate targets. The Federal Reserve meeting notes refine the details of the main Fed announcement. Fed’s Meeting Notes Later, after they have been reviewed and made viewable for the public, the Fed releases the notes from it’s meeting. Financial analysts and market pundits then parse these notes for clues to the Fed’s thinking. This time, everyone is looking toward how the notes take about bond-buying tapering. What does this mean? The short version is that when the economy went so bad back during the Great Recession following the real estate market crash, the Fed had to do more than just cut interest rates to stabilize the economy. In my opinion, the Fed Chairman Ben Bernake saved the US economy from a hard recession by flooding the market with liquidity and saying that he would keep doing it for as long as it takes. Check out my Acorns review is Acorns Legit? Basically, as long as it takes, has never really come. One …

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House Poor Family Trades in For RV

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While this isn’t my usual fare, this recent article on CNBC struck a chord with me, and not necessarily in a good way. Not a bad way either, but… odd? This article details the troubles of a family that had a $4,200 per month mortgage on their home in California. Couple that with a paragraph about $110,000 in student loans, and you’ve got yourself a clickbait ready, shareable personal finance article. Here is the weird part. The article, as all of these articles do, leaves out a lot of the details that likely make this a one-off article that isn’t shareable, or doable by pretty much anyone. For example, there was a months-long road trip that has now lasted over a year. That’s cool. Where does son Aiden (8) go to school? There’s also the part about how it “helps” that neither parent had traditional 9 to 5 jobs. You mean, it’s absolutely essential that they don’t have 9 to 5 jobs, or at least that they can be full-time remote. Lastly, while living in an RV cut their living expenses from that $4,200 mortgage, the RV that they make this lifestyle work in was apparently gifted after the initial …

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Fed Stays Steady

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The Federal Reserve left interest rates unchanged, BUT they are beginning to taper off their bond buying program which will soak up some of the cheap money floating around out there and gently tighten the money supply. This is a smart move that helps reduce inflationary pressures while at the same time avoiding strangling the recovery growing out of the pandemic recession.

Biden’s Capital Gains Tax Increase No Big Deal

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capital gains tax increase

President Biden proposed increasing the capital gains tax and while that makes great headlines, it probably isn’t as big of deal as it sounds like. First off, the higher tax would only apply to those with income above $1 million. That takes out most taxpayers right there. Avoiding Capital Gains Taxes Also, capital gains is one of the easiest to avoid taxes. Most people hope to never lose that much money, but there are plenty of losses to be had even by the best investors. Matching those losses up to gains is called tax-loss harvesting and is frequently used by those with large enough investment portfolios to eliminate some or all of their capital gains taxes. Imagine a scenario where a wealthy investor purchases ABC stock and XYZ stock. A clever investor would make sure that ABC stock and XYZ stock pay an acceptable dividend based on their risk and expected return. So, over a couple of years, our investor collects his dividends. Since the only way this new tax applies is if the investor has $1 million in income, they will pay the highest dividend tax bracket of 20% tax on the dividends, still far lower than the 39% …

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