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Bitcoin Hits 20,000

December 16, 2020 by Finance Gourmet

If you’re a bitcoin fan, or if you just follow along, you know that today bitcoin hit 20,000. Meaning you can turn one bitcoin into $20,000. Is Bitcoin A Good Investment? Bitcoin, like the dollar, and Google stock, has no intrinsic value beyond the fact that people decided it is worth something, and there is a limited supply of it. Unlike the dollar, gold, and Google stock, bitcoin doesn’t have a history, or set of like assets that it can be compared against to determine its theoretical value. In short, bitcoin is so new, nobody really knows what makes it tick, although there are many people out there who claim to know. So, is bitcoin a good investment? It depends on what you are investing for, and what money you are using. Some bitcoin analysts are calling for much higher bitcoin prices than 20,000. Before you get caught up in bitcoin euphoria, don’t forget the previous high for bitcoin was set three years ago in December of 2017. That green arrow is very real, but that red arrow is very real too. If you invested your kid’s college fun in bitcoin in September of 2017, you were a genius, provided …

Best Online Bank Rates

January 21, 2021December 11, 2020 by Finance Gourmet

OK, I get asked all the time about where to get the best rates for a savings account. First off, check your current bank’s offerings for a money market account, which often pays higher interest than a savings account. Money market accounts pay better rates in exchange for restrictions that should be very easy for you to meet. (You can check here for information about kids savings accounts.) With the low interest rates out there today, getting a high interest rate isn’t easy. Even the best high interest account won’t pay more than 1%, unless they limit how much money earns the higher rate. Remember, a higher interest rate won’t mean much for a small amount of savings. The difference in actual dollars between 1% and 1.5% on something like $500 is just $5 per year. That isn’t worth it if it means you end up with even one overdraft charge. Keep a cushion of savings in your local account so you instantly transfer money to your checking account if you need it. The Online Banks Next, if you are purely interested in rates, then online banks are the way to go. There is a catch, but it isn’t what …

Is An Income-Driven Repayment Plan Best for Me?

December 11, 2020 by Finance Gourmet

student loan repay income based payments

Many people with student loan payments don’t realize they have multiple options for repaying their student loans easier. One option is the income-driven repayment plan that the federal government offers for loans owned by the US Department of Education. The key to income-driven student loan payment is that your student loans are forgiven at the end of the repayment period even if you still owe more money on your student loans. These loan repayment options are a helpful choice for those who have a high-student loan balance, and a career with little chance for a high salary. How Can I Lower My Student Loan Payments With a Different Loan Repayment Plan? There are actually several different ways to repay your student loans over time. Most borrowers just go with a 30-year repayment plan and essentially take on an additional mortgage. However, there are numerous different plans, including plans based upon your income. Financial advisors and those who writing about financial independence are often rightly dinged for not writing about how to help those with lower incomes. Income-driven repayment plans are one way to help those with lower incomes repay their student loans faster and easier. Open a 529 Plan Online …

DoorDash IPO Worse Than WeWork Disaster?

December 3, 2020 by Finance Gourmet

Yesterday in my December outlook for stocks, I alluded to the fact that the DoorDash IPO was perhaps overly optimistic about its profitability and the company’s ability to keep any semblance of that profitability in a post-pandemic world. MarketWatch Calls DoorDash IPO “Most Ridiculous” Someone over at MarketWatch isn’t waiting for investors to read between the lines with an opinion piece claiming that the DoorDash offering is the, “most ridiculous IPO of 2020.” The piece goes on to make the claim that the DoorDash IPO offering may even be worse than the WeWork IPO disaster that they previously proclaimed, the Most Ridiculous IPO of 2019. The article goes into the numbers in details, but the long and the short of it is this: DoorDash barely squeezed out a profit on $1.92 billion of revenue for the first nine months of 2020. That amount of revenue is 3x last year’s revenue due to a huge increase in the food delivery market thanks to the Covid pandemic. If you can’t squeeze out a profit in the very best possible market, how can you be profitable ever again. DoorDash can’t raise fees and expenses due to numerous competitors. In fact, its fees are …

7 Important Things To Look For From the December Stock Market

December 1, 2020 by Finance Gourmet

Here we go. December 1, 2020 is a Tuesday, so the markets already got started on this week yesterday. This December is packed with interesting scenarios, events, and reports for investors. Without further ado, let’s jump into the 7 most important things to look for from the December stock market. Tesla Joins the S&P 500 Over a long enough period, the FOMO (Fear Of Missing Out) at the SP500 and the Dow Jones Industrial Average drives some interesting decisions. Some of them prove to be remarkably prescient, others embarrassingly reversed. There is no denying that Tesla dominates news storylines in the automotive industry. Its market capitalization certainly qualifies for inclusion in the central S&P 500 index. On the other hand, Tesla stock is highly volatile, often tied to words its CEO blurts out on Twitter, or based on meeting tight-rope high production goals. More commonly missing those goals but getting credit for being kind of close. What is Rakuten? Joining the S&P 500 will give Tesla stock a new stability that comes from being part of all those market index mutual funds and market index ETFs. At the same time, the company may inject a bit of volatility back into …

Covid Student Loan Relief Ending Soon

November 16, 2020 by Finance Gourmet

In March, the government began offering options to help benefit borrowers with student loans during the Covid pandemic. The Covid student loan benefits were to stop collecting on student loans, to charge 0% interest rates on student loans, and to suspend student loan payments. Basically, you could turn off paying on your student loans with no detriment. Or, if you were one of the lucky ones still doing well during the Covid crisis, you could keep making loan payments and get ahead thanks to zero percent interest. The benefits only applied to federal student aid loans, and do not apply to private student loans. One of the downsides of programs like SoFi student loan refinances is that the refinanced loans become private student loans and no longer benefit from any federal student loan programs, even though the Sofi student loans interest rates can be much lower than regular student loans. Private student loans are not regulated by the Department of Education Student Loan Covid Scams Unfortunately, as is often the case, scammers were not far behind the news announcing these student loan aid provisions. They came back out when Congress passed a law making the Covid student loan aid last …

Covid and Inflation

November 13, 2020 by Finance Gourmet

At least inflation isn’t coming while we deal with this whole Covid thing.

7 Deeply Out of Favor Stocks?

November 5, 2020 by Finance Gourmet

Marketwatch is a finance website that survives by cranking out hundreds of articles per day. There isn’t hundreds of articles per day worth of actual financial news out there each day, so there is a bit of filler. Sometimes, I scroll right by. Sometimes, I wonder if a particular bit of financial analysis is legit. Analyzing Financial News Articles Check the person’s track record first Once you’ve been in the financial writing business for a while, you develop some contacts that you can go to for quotes and looks at finances and the stock market. If you have a big enough platform, financial gurus and analysts will come to you for some publicity. All you have to do is fill in the words around their quotes and fire up some graphs. Ironically, what is NOT part of the job is seeing how and when a particular analysts has fared in the past with their predictions. Accountability is not part of the finance writing world. A smart investor starts by seeing what, if anything the finance person has said in the past, and how right, or wrong they were, beyond the flattering, “He picked the last run up in technology stocks!” …

Real World Retirement Planning

March 3, 2021November 3, 2020 by Finance Gourmet

If you’ve read much in the personal finance world, or even just the occasional news story from the business section of your local paper, you are probably well aware of the non-stop stream of headlines about how people are not prepared to retire. Chances are you have visions of old people shut up in their homes clustered around a single candle for light and warmth. But, is this reality, or just great financial copy? A recent Marketwatch article reports on a survey where almost 80 percent of retirees found it easier than they thought to adjust their lifestyle and spending for retirement. This matches more closely with my experience as a financial advisor than the alarmist headlines do. Some real world retirement planning is all you really need. Retirement Crisis for All? As is so often the case, the reality of finances is very individual. As a result, generalizations are often inaccurate for large swaths of people, even while being correct for many others. When I was a Certified Financial Planner, the reality is that I had a lot more clients who were planning for retirement than those who were actually retired. I never did a financial plan for someone …