News

Should I Worry About the Equifax Hack?

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equifax-hacked

Boy, time flies when you’re protecting your identity. This article was originally written September, 2017. It was just a taste of things to come. In August, 2024 criminal hackers went bigger and literally hacked the Social Security Administration and got away with as much as all of our social security numbers, date of birth, address, and who knows what else. Even a baby identity thief could profit from this. The worry is that new state-sponsored criminal organizations are already working on profit and intelligence gathering. If you are wondering whether to be worried about the Equifax hack from 2017, the answer is yes. You should be worried. However, you do not need to panic. How ever bad the Equifax hack of 2017 was, there were plenty of doozeys on its heels. So many, in fact, that any one of them likely caused more damage. Still, those who do not study history are doomed to repeat it. Get Some Credit Monitoring By now, you should probably have some rudimentary credit monitoring whether it comes through a free credit score service like Credit Karma, or from your bank, or one of your credit cards. You’ll want to read all of those emails …

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Federal Reserve Holds

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Federal Reserve Holds 1

The Federal Reserve Board voted not to raise interest rates at their October meeting, finally realizing that the runaway freight train of interest rate hikes might be more detrimental to economy than the inflation that they are supposedly fighting. Did the Fed Stop Too Late The big question on everyone who actually participates in the economy’s mind is did the Fed stop raising interest rates too late. Already the housing market is seizing up as home buyers realize they have been priced out of homes by higher interest rates and sellers find that they no longer can sell their home in a weekend, or maybe within several weeks. Higher food prices are still cutting deep, but so are those credit card bills. Variable rate credit cards and HELOCs have spent the last year delivering higher and higher payments to borrowers. Many borrowers who were perfectly fine servicing their debt suddenly find themselves staring down bankruptcy. And we all know what happens when a huge chunk of America goes and declares bankruptcy. The only high point in all of this is rising wages and low unemployment are keeping more people above water than in the past. In states with rising minimum …

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Should the Fed Stop Now?

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Should the Fed Stop Now? 2

Below is a quick belt out of information and opinion before I head off with the family on a last-of-summer vacation. Don’t bother letting me know about other links, grammatical errors, or the like. I’ll go back to normal when I get back next week. Should the Fed stop raising interest rates now? Even the staid financial press is starting to ask the question that obsequious interest rate hawks insisted was off the table, is it time to stop raising interest rates? Inflation Is Down In the carefully written narrative of the Federal Reserve fighting inflation, the Fed bank must raise interest rates, longer, and more painfully than the lesser economic hawks can stomach. Only then can inflation be brought under control by the tough love of inflation hawks. But, as they like to say, a funny thing happened on the way to the forum. It seems that if the economy were overstimulated into inflation by various temporary economic measures such as government checks from a larger child tax credit, and student loan borrowers unleashed temporarily from their burdensome payments, then the boost to inflation was temporary as well. The result is that with a tap on the brakes in …

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Is My Colorado Refund Tax Free?

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Colorado income taxes delay

The IRS decides some of your Colorado refund is tax free, but it’s the IRS, so it can’t be that simple. Colorado Cash Back Refund Is Tax Free I don’t know how good your memory is, but in 2022, Colorado officials realized that Colorado residents would be in line for big Tabor refunds for 2022. Usually when Colorado gives out TABOR refunds, you get it as a part of the Colorado State income tax that you file tax returns for in the early part of the following year. For example, the 2022 TABOR refunds would normally be a part of your 2023 income taxes (part of it still is). However, with the economy potentially sputtering to a halt and the end of the various federal income tax refunds sent early to prop up a post-Covid economy, Colorado politicians decided that they would send out some of the 2022 TABOR refunds in the fall instead of waiting until folks got around to filing taxes that are due in April 2023. To pull this economic transfer off, Colorado officials had to anticipate how much the TABOR refund of 2022 would be with only half of the year’s data, so they picked a …

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Should I Pay My Student Loans or Wait for Student Loan Forgiveness in 2023?

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student loan payments

Update: The Biden administration has elected to erase $10,000 or $20,000 in student loan debt via executive order. The website to apply is already up, and the Republican lawsuits to stop it are already filed. If you have more than $10K or $20K, keep paying, although it will help a lot, it won’t erase all of your student debt. Updated Update: A federal judge blocked Biden’s student loan forgiveness program. I don’t understand the logic of the decision, but it isn’t up to me. The government has appealed, but for now, the form to register for student loan forgiveness has been taken down, and no forgiveness payments or updates have been made. During the 2020 Democratic Primary election, all the candidates threw their weight behind some form of student loan forgiveness. It isn’t hard to see why. Forgiving student loan debit is extremely popular, especially with those burdened by large student loan payments. Now that Biden has announced his partial student loan forgiveness program is it time to financially plan for student loan forgiveness? Let’s dive in and answer the question, should I pay off student loans or wait for forgiveness? The government posted a registration form for student loan …

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Active Investment Managers Underperform Indexes

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better investment performance

Every year or so, somebody freshens up a study that shows active mutual fund managers underperform passive investing, usually in the form of an ETF of the category benchmark. In plain English: Buying the ETF instead of the mutual fund of the same type will generate higher returns for you over the long-run, and often even the short term. So, why are active investment managers so bad? Mutual Funds Cost Money to Run Mutual funds are not charities. They have expenses they need to cover. Expenses include everything from offices to high paid analysts, to traders to execute the trades, to all of the electronics and equipment it takes to monitor and use all the information in the trading world. Oh yes, then there is the matter of profit. These expenses are disclosed to all investors in the required information made available to any investor in the prospectus and on most trading and investment research platforms. Pulled quickly and semi-random is the Dodge & Cox Stock Fund, a large U.S. stock mutual fund. You will notice that compared to the S&P 500 index listed below, our well-respected Morningstar 5-star fund returns less than the S&P 500 over any time period. …

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Texts From a Friend Text Message Scams

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a texting scam

Text message scams are nothing new, but they used to be really obvious. Like anything else, scammers evolve to keep getting paid. Innocent Texts from a Friend Came across a news story today that finally answers a question of mine. About a year ago, I got a text from “Steve.” Now, I have an uncle named Steve, and although we don’t text, it was not beyond the pale that he ever would. He was friendly, asked how it was going. He asked about “that beautiful wife” and my kids. This was probably a 15 or 20 text conversation when I asked something kind of specific about my cousin that would have been obvious to the real Steve. The scammer didn’t know about that, so he said something like he didn’t know about it (impossible) so I stopped answering and went back through my texts. Just like that scene in Enemy of the State where he asks, “Did he say it first or did you say it?” – I realized that other than the opening question or two, everything cleverly piggybacked off my answers to make it sound like we knew each other. I stopped replying and after another few messages …

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House Child Tax Credit Bill

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congress tax laws

Recently, the Democrats passed a bill called the American Rescue Plan Act, that made some changes and updates to the child tax credit. This was quickly spun as either a middle-class tax cut or raising taxes on the poor. It’s weird to see how people can distort what is really happening in order to fit their own agenda. The Child Tax Credit is $3,000 per child between 6 and 17 years old. The Child Tax Credit is $3,600 for each child under 6 years old. Child Tax Credit Basics The child tax credit is a credit. This is different than a tax deduction. A deduction is something that reduces your taxable income. The actual amount you save on your taxes then is a fraction of the amount deducted. For example, if you made $80,000 and you get $20,000 in deductions, then you pay taxes only on $60,000 in income, which means you get only a percentage of that $20,000 in deductions. A credit, on the other hand, is a reduction not in your income, but in your actual tax. So, a $1,000 tax credit means you actually pay $1,000 less in taxes. A credit is much better than a deduction …

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Fed Raises – Did It Break the Economy?

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Fed Raises - Did It Break the Economy? 3

I’m not an economist and I don’t play one on TV. I haven’t even stayed at a Holiday Inn Express, but I have been involved in finance for a long time now, and I’m old enough to have a pretty good memory. Add that to a lot of research over the years as a freelance financial writer for a lot of publications and websites, and I have an informed opinion, if not a professional one. Fed Raises Rates 0.75% Again The Fed raised interest rates again, another big 0.75% hike. So, here is the punchline. The Fed has raised interest rates a total of 1.5% in just two months. Look up the last time the Fed raised rates that quickly. Go ahead. I’ll wait. It was the 1980s and inflation was crazy rampant. Every economist older than 50 had drilled into their head that inflation was more of a problem than a recession because that is what is true for Wall Street. Unfortunately, that is not necessarily what is good for Main Street, and by extension, the markets. Last time the Fed raised rates was from 2016 to 2019. That increase was a nice gentle 2.25% increase over three years. …

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