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Tag: Personal Finance

  • This 35-year-old mom built a side hustle that brings in $230,000/month in passive income: ‘I work just 4 hours a day’

    This 35-year-old mom built a side hustle that brings in $230,000/month in passive income: ‘I work just 4 hours a day’

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    In 2008, I started a photography side hustle from my dorm room. My goal was to become a professional photographer. It wasn’t easy, especially at the height of the recession, but I’m glad I never gave up.

    Today, at 35, I’m a self-made millionaire and run a wedding photography and education business, Katelyn James Photography. With my husband Michael, who joined as Chief Financial Officer in 2013, we’ve helped more than 100,000 people learn about photography.

    In 2022, we brought in $240,000 a month in revenue — 80% of which I put back into the business. Roughly $230,000 of our monthly revenue was passive income from online courses and training materials.

    I now work just four hours a day and shoot about four weddings a year.

    From $750 to $160,000 in one day

    In the first year of my side hustle, I was a full-time college student, but I still worked 40 or more hours a week.

    My rates started low: $750 for six hours of photographing and editing. As my skills improved, I started charging more. And by 2013, I was earning six figures.

    I was lucky to have a great mentor, Jasmine Star, who photographed my own wedding. I also took some online courses, attended workshops, and took on projects for free to build my portfolio.

    But there wasn’t a lot of affordable photography training out there, so I started sharing tips on my blog. About eight years in, I realized online photography education could be a scalable business.

    Through word of mouth and a consistent social media presence, I grew an email list of 7,600 photographers who wanted to learn from me. All the while, I developed outlines, designed a workbook via Adobe InDesign, and recorded and edited course content with help from a videographer friend.

    The majority of Katelyn’s income is from photography courses and training materials.

    Photo: Abby Grace Branding

    In November 2015, Michael and I launched our first online training program to teach photographers how to edit and streamline their workflow. The course cost $397, a price point that was far more accessible than a semester’s worth of college photography classes.

    Our goal was $15,000 in total sales. But the first day, because of the trust we built with our customers over time, we made over $160,000.

    Bridging the photography knowledge gap

    The success of my first course showed me that it was more valuable to make photography education accessible, rather than just shooting weddings and continuously increasing prices.

    We’ve created over a dozen downloadable courses, e-books and templates for various photography skills. Our resources are inspired by questions asked by our online community of over 70,000 people, and cover topics like posing couples and natural light photography.

    We also have a membership product, KJ All Access. For $29 per month, photographers of all experience levels get to follow me as I shoot events and handle all sorts of unpredictable situations — like wedding dresses getting covered in mud or weather delays.

    New videos are shot by my videographer, edited by me, and released each month. Members also have access to a library of past videos.

    Our goal is to change people’s lives

    I love my job. Being in complete control of our schedule has allowed my husband and I to spend more time with our three kids, and to pursue projects we’re excited about.

    This year, we co-founded a school geared towards entrepreneurial families called Acton Academy West End. We focus on equipping children ages five to eight with the tools to find their unique passions through hands-on activities.

    Whether we’re creating tools that teach photographers how to build a career that supports their family, capturing wedding moments, recording podcasts, or just simply sharing the ups and downs of our everyday life on social media, we want our life and our business to change lives.

    Katelyn Alsop is a business coach and founder of Katelyn James Photography. Over 100,000 students around the world have used her platforms to learn about photography and entrepreneurship. She is also the co-founder of Acton Academy West End. Follow her on Facebook, Instagram and YouTube.

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  • Why the big banks created Zelle

    Why the big banks created Zelle

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    Competition among peer-to-peer payment apps like Venmo, PayPal, Cash App and Zelle have been heating up for the past 10 years. The big banks tried to compete in the space when PayPal first came on the scene 25 years ago, but their business models failed. Now, Zelle, a seven-bank platform, is outpacing its rivals in average transaction value. But a rise in reported fraud activity recently got the attention of Congress, with allegations that the banks aren’t supporting those affected customers.

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  • The Baby Boomer Retirement Crisis Is Here. Why the Richest Generation Is Hurting.

    The Baby Boomer Retirement Crisis Is Here. Why the Richest Generation Is Hurting.

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    The Baby Boomer Retirement Crisis Is Here. Why the Richest Generation Is Struggling.

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  • Biden’s student loan forgiveness plan heads to the Supreme Court. How that affects the payment pause

    Biden’s student loan forgiveness plan heads to the Supreme Court. How that affects the payment pause

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    Littlebee80 | Istock | Getty Images

    It’s been nearly three years since most people with federal student loans have had to make a payment on their education debt.

    The U.S. Department of Education has repeatedly cited specific dates for when the bills would resume, only to extend the pandemic-era break yet again.

    Most recently, amid legal challenges to the Biden administration’s student loan forgiveness plan, the government told borrowers they’d get even more time. But the timing it gave wasn’t as straightforward as it was with previous extensions.

    Here’s what borrowers need to know.

    Student debt bills may not resume for months

    In August 2022, President Joe Biden promised to cancel up to $20,000 of student loan debt for tens of millions of Americans, but Republicans and conservatives quickly filed a number of lawsuits against his plan, forcing the administration to close its application portal in early November.

    As a result of those challenges, the Education Department announced another extension of the repayment pause in late November.

    It said federal student loan bills will be due again 60 days after the litigation over its student loan forgiveness plan resolves and it’s able to start wiping out the debt. But the Department added that if the Biden administration is still defending its policy in the courts by the end of June, or if it’s unable to move forward with forgiving student debt by then, the payments will pick up at the end of August.

    More from Personal Finance:
    64% of Americans are living paycheck to paycheck
    What is a ‘rolling recession’ and how does it impact you?
    Almost half of Americans think we’re already in a recession

    The Supreme Court will begin to hear oral arguments over Biden’s plan at the end of February.

    When payments could resume depends in part on when the justices reach their decision, said higher education expert Mark Kantrowitz.

    “If the court issues a ruling a few weeks after the Feb. 28 hearing, repayment could restart in May or June,” Kantrowitz said. “If they wait until the end of the term, when they go on recess, in June or July, then there would be an August or September restart.”

    Another payment pause extension is possible

    It’s a time of uncertainty for the federal student loan system.

    With Biden’s forgiveness plan up in the air, borrowers may be unsure what they owe. Throughout the pandemic, there have been a lot of changes to the companies that service federal student loans. And then there’s the fact that after three years without payments, millions of Americans have simply become accustomed to life without student debt bills.

    “These student loan borrowers had the reasonable expectation and belief that they would not have to make additional payments on their federal student loans,” Education Department Undersecretary James Kvaal said in a November court filing. “This belief may well stop them from making payments even if the Department is prevented from effectuating debt relief.

    “Unless the Department is allowed to provide one-time student loan debt relief,” he went on, “we expect this group of borrowers to have higher loan default rates due to the ongoing confusion about what they owe.”

    Considering that the U.S. Department of Education has already extended the payment pause roughly eight times, it’s possible borrowers could get more time still, Kantrowitz said.

    “There will always be an excuse if they want a reason for another extension,” he said. “The most likely reasons could include a new worrisome Covid-19 mutation or economic distress.”

    For now, collection activity still on pause

    The U.S. government has extraordinary collection powers on federal debts and it can seize borrowers’ tax refunds, wages and Social Security checks if they fall behind on their student loans.

    During the extended payment pause, however, the Education Department also says it won’t resume collection activity.

    Borrowers in default on their student loans should also look into the recently announced “Fresh Start” initiative, in which they’ll have the opportunity to return to a current status.

    Make the most of extra cash during the ongoing break

    With headlines warning of a possible recession and layoffs picking up in some sectors, experts recommend that borrowers try to salt away the money they’d usually put toward their student debt each month.

    Certain banks and online savings accounts have been upping their interest rates, and it’s worth looking around for the best deal available. Consumers will just want to make sure any account they put their savings in is insured by the Federal Deposit Insurance Corp., meaning up to $250,000 of the deposit is protected from loss.

    And while interest rates on federal student loans are at zero, it’s also a good time to make progress paying down more expensive debt, experts say.

    The average interest rate on credit cards is currently more than 20%.

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  • Are we in a new bull market for stocks?

    Are we in a new bull market for stocks?

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    News flash: We may be in a new bull market.

    That’s the good news. The not-so-good news is that the recent rally may have gotten ahead of itself and a pullback would be health-restoring to the bull market.

    Read: Jobs report shows blowout 517,000 gain in U.S. employment in January

    The…

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  • What You Should Know About BFSI in 2023 and Beyond

    What You Should Know About BFSI in 2023 and Beyond

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    Opinions expressed by Entrepreneur contributors are their own.

    Very little is clear as we look at the economy in the coming year. Inflation is high, interest rates are heading north, and many fear a recession is coming in 2023. Amidst this uncertainty, there has also been a wave of innovation throughout the banking, financial services and insurance industry (BFSI) — a wave that has only been accelerated by the pandemic and expedited shift to digital and immersive customer solutions.

    Where does the world of BFSI stand in 2023 after years of both tumult and change? We must first take stock of the BFSI landscape in order to decide the strategies and tactics we need to apply in 2023. I won’t pretend to have a crystal ball to tell the future, but after spending my entire career in the industry, I feel safe to make a few predictions about what the year might hold. These are the four trends all BFSI professionals need to be prepared to tackle in 2023:

    Related: This Software can Play an Incremental Role In BFSI Sector

    1. Collections are back

    As the government-mandated moratoriums instated during the pandemic come to an end and we enter a recession, collections will be a huge element of our work in the BFSI sector in 2023. What can we do to prepare ourselves and our customers for this reality?

    We do not want to come barging down doors, demanding collections. We must be mindful and acknowledge there is a journey to the process to avoid burning bridges with our customers. We should prepare for remediation and plan to create unique payment plans that are personalized to the customer. In doing so, we avoid breakage and keep our customers in our house. It’s like asking for couples therapy rather than an outright divorce — if we can figure out a plan together, we are much more likely to maintain our relationship and create loyalty through that remediation.

    Acquisition is far more expensive than retention; if we lose customers left and right in collection, then we are setting ourselves up for much more work (and lost revenue) down the line. Fifty-two percent of consumers switched providers in the last year, largely due to poor customer service, and we do not want to add to that statistic in the collections process. If we can be creative in our remediation tactics, we can likely save the customer, which will not only save money but also create long-term loyalty.

    2. Open banking is an essential tool

    Open banking has been one of the most important changes to hit the world of BFSI since it came into play. It creates one home for all of our assets, offering greater mobility to the consumer and the opportunity for companies to innovate new and exciting financial services.

    For example, customers can now apply for a mortgage without compiling a novel’s worth of paperwork; they can simply give their lender permission to access their accounts and look at their finances. Companies, on the other hand, can now assemble a clear financial picture of a customer’s assets and liabilities by tapping into data from multiple banks.

    Open banking has created greater ease and portability for customers and bankers alike. But as new products, services and capabilities are created in response to this development, we will see an increasingly competitive marketplace. Customers can switch from bank to bank at any time with ease, and, as we know, they are not afraid to do so. This flexibility and access available to consumers both today and increasingly so tomorrow will challenge their existing institutions to provide best-in-class terms and experiences across a vast landscape of services and capabilities. Institutions that acquired and built their customer relationships with a wedge of limited but valuable products will be challenged as providers of a full suite of solutions vie for access to these customers whose asset portability has never been simpler.

    To keep up, banks must prioritize satisfying customer demand to pay any way they want and transform how they engage with their customers to become more personalized. Furthermore, banks should work to align their strategies with the innovation, policies and regulatory changes coming our way. Open banking will be an essential tool for banks and customers alike, attracting customers seeking greater mobility and personalization in their financial services.

    Related: Cyber Security and Its Importance For the BFSI sector

    3. Insurance will be digitized

    Insurance has long been behind other industries when it comes to digitization, and though they began the process in 2020, it was quickly put on pause during the pandemic. Insurance companies need to have a radical leapfrog effect and paradigm shift in strategy, transforming their companies to become digital-first.

    As it stands now, insurance companies have no streamlined customer view. I’ve had my home, auto and flood insurance, among others, with the same company for over ten years, and yet they do not have one unified customer view of my account, nor do they have the digital assets to engage with me. So much so, that when I tried to log onto my car insurance app, it said I was not a customer.

    As we enter the new year, it will be essential for insurance companies to digitize their work and create more personalized engagement with their consumers. Consumers are more loyal when they have personalized services. If you don’t offer personalization, it will be very challenging to have any stickiness in the insurance vertical. Customers will be quick to try new companies because they have no relationship with their current provider, and thus it is no skin off their back to jump ship. This dynamic was played out in the mobile carrier market as it became easier to move providers and take your number with you.

    4. Emerging payments must be reassessed

    Many have said we’re in an emerging payments freeze with crypto, BNPL and P2P, but in reality, we’re merely in a consolidation. The leaves are starting to turn yellow and fall, but the trees are not barren. The world of emerging payments and crypto is on pause, which is not necessarily a bad thing. Now is our opportunity to look at emerging payments and ask, “What do we want to happen in this space? And how can we use the next year or two to build the right tools for emerging payments that the rest of the BFSI industry can leverage?”

    It is an opportunity, just as the start of fall beckons a new school year with fresh notebooks and sharpened pencils, to hone our products, build the right capabilities and then get back out there. Real-world and practical solutions to consumers and institutions will emerge or wilt on the vine, based on applicability. Institutions that build frictionless, embedded and native solutions for their customers to interact with will see share gains coming out of this.

    Related: These #4 Trends Hold The Key For Disruption of the BFSI Sector

    We are financial partners

    Now more than ever, the power is in the hands of the consumer. Banks can no longer coast by merely providing an account and a credit card. Consumers will be out the door before the end of the business day without personalized engagement to support their lifestyle and financial aspirations. A modern bank is a life and planning partner, and as we enter 2023 and all of the uncertainty it holds, our customers will expect to be supported via a wide array of financial services that take advantage of the data at our fingertips and the innovation banging down our doors.

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    Mamta Rodrigues

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  • What Millennials Want In Their Products, As Told By A Millennial.

    What Millennials Want In Their Products, As Told By A Millennial.

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    Opinions expressed by Entrepreneur contributors are their own.

    I’m a millennial. And we’re now an influential and rapidly expanding demographic, so understanding our views on product life cycles is essential for any business. Indeed, products that previous generations may have favored may be viewed differently by us, affecting the decisions of manufacturers, retailers and other stakeholders in the industry.

    Millennials’ preference for short-term products can be attributed to our aversion to the effort, cost and time needed to maintain and repair long-term items. Convenience and immediacy of use are also desirable qualities in a product, as we want something we can access quickly without investing in its upkeep.

    Our generation is used to having access to the newest gadgets without making large purchases. Therefore, when it comes to product life cycles, millennials tend to favor short-term options that don’t require too much commitment or financial burden. Short-term items are typically seen as disposable or single-use items that don’t need regular maintenance or repairs over time. This makes them ideal choices for people who want something readily available but don’t have the resources or capacity for a long-term investment.

    Related: How to Create a Hybrid Work Environment That Works for All Generations

    Planned obsolescence

    Businesses should consider the impact of planned obsolescence when creating products if they wish to maximize appeal among millennials. Planned obsolescence is the intentional design of products with limited lifespans for customers to frequently replace them with newer models so companies can stay competitive and profitable.

    This strategy has been widely employed by many tech companies recently, as it helps keep their brand current and allows them to target an increasingly fickle tech-savvy audience who always wants the latest version of whatever product they’re using at any given time.

    In contrast to short-term items, longer-term or high-quality products often require more maintenance and support from service providers or technicians to last for years with minimal maintenance cost. This can be costly and time-consuming in the long run, so millennials prefer brands that offer longevity without requiring too much upkeep.

    Related: Bad Business Tactics that Business Owners Should Avoid

    Eco-friendly options

    Many of these brands now offer eco-friendly designs and reusable components that minimize waste yet still provide better performance over a more extended period. This is attractive to millennials as it gives a more sustainable option that won’t soon become outdated due to changing technology trends or market demands.

    These features often come with extended warranties and repair services, which give customers peace of mind when investing in long-term products. Many of these brands partner with certified service centers with knowledgeable technicians who can provide regular maintenance and repair services for the product at an affordable cost. This ensures that users can keep their products running well even after the warranty period has expired, reassuring them of having access to a reliable product for many years.

    Companies should also consider offering different payment plans or leases on their products to suit different budgets. This would give millennials more options for purchasing quality items without worrying about committing to large upfront costs.

    Related: 5 Tips for Creatively Going Green With Your Business

    Availability

    On top of this, the availability of parts, repair services and even warranties must be considered when looking at a product life cycle. If a particular item requires repair, but parts needed for it aren’t readily available, customers may view investing in it as a poor decision, as repairs could become costly if parts can’t be sourced easily.

    Additionally, if warranties offered by brands only cover certain aspects, customers may opt-out from buying their offerings due to the lack of assurance regarding performance over its life cycle time frame. In such cases, brands must provide comprehensive support options such as replacement warranties and access to trained technicians who can assist with repairs should an issue arise.

    Connectivity

    Modern businesses need to consider connectivity in their product offerings to maximize appeal among millennials. Items like smartphones require regular updates, making them feel outmoded quickly if they aren’t updated. This means having access to compatible networks is central to guaranteeing that users can benefit from the latest features offered by these products throughout their lifespan.

    Businesses should ensure that their products are compatible with a wide range of services and applications for customers to get the most out of them over their lifetime. Many companies now provide cloud services and integrations that allow for more convenient usage and better performance when it comes to keeping devices updated and taking advantage of new features and capabilities.

    Related: The 3 Stakeholders That Make for Meaningful Connectivity

    Overall it’s clear that product life cycles are an important consideration when looking at purchase decisions made by millennials — from length and features to availability and connectivity — as all these factors influence what kind of value each item has in the eyes of buyers. With this knowledge, companies now understand what appeals most to their younger target demographic and can optimize their offering to maximize conversions while appealing to Millennial consumers’ sensibilities. Now get out there and sell me something.

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    Christopher Massimine

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  • Wall Street to Jerome Powell: We don’t believe you

    Wall Street to Jerome Powell: We don’t believe you

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    Do you want the good news about the Federal Reserve and its chairman Jerome Powell, the other good news…or the bad news?

    Let’s start with the first bit of good news. Powell and his fellow Fed committee members just hiked short-term interest rates another 0.25 percentage points to 4.75%, which means retirees and other savers are getting the best savings rates in a generation. You can even lock in that 4.75% interest rate for as long as five years through some bank CDs. Maybe even better, you can lock in interest rates of inflation (whatever it works out to be) plus 1.6% a year for three years, and inflation (ditto) plus nearly 1.5% a year for 25 years, through inflation-protected Treasury bonds. (Your correspondent owns some of these long-term TIPS bonds—more on that below.)

    The second bit of good news is that, according to Wall Street, Powell has just announced that happy days are here again.

    The S&P 500
    SPX,
    +1.05%
    jumped 1% due to the Fed announcement and Powell’s press conference. The more volatile Russell 2000
    RUT,
    +1.49%
    small cap index and tech-heavy Nasdaq Composite
    COMP,
    +2.00%
    both jumped 2%. Even bitcoin
    BTCUSD,
    +1.00%
    rose 2%. Traders started penciling in an end to Federal Reserve interest rate hikes and even cuts. The money markets now give a 60% chance that by the fall Fed rates will be lower than they are now.

    It feels like it’s 2019 all over again.

    Now the slightly less good news. None of this Wall Street euphoria seemed to reflect what Powell actually said during his press conference.

    Powell predicted more pain ahead, warned that he would rather raise interest rates too high for too long than risk cutting them too quickly, and said it was very unlikely interest rates would be cut any time this year. He made it very clear that he was going to err on the side of being too hawkish than risk being too dovish.

    Actual quote, in response to a press question: “I continue to think that it is very difficult to manage the risk of doing too little and finding out in 6 or 12 months that we actually were close but didn’t get the job done, inflation springs back, and we have to go back in and now you really do have to worry about expectations getting unanchored and that kind of thing. This is a very difficult risk to manage. Whereas…of course, we have no incentive and no desire to overtighten, but if we feel that we’ve gone too far and inflation is coming down faster than we expect we have tools that would work on that.” (My italics.)

    If that isn’t “I would much rather raise too much for too long than risk cutting too early,” it sure sounded like it.

    Powell added: “Restoring price stability is essential…it is our job to restore price stability and achieve 2% inflation for the benefit of the American public…and we are strongly resolved that we will complete this task.”

    Meanwhile, Powell said that so far inflation had really only started to come down in the goods sector. It had not even begun in the area of “non-housing services,” and these made up about half of the entire basket of consumer prices he’s watching. He predicts “ongoing increases” of interest rates even from current levels.

    And so long as the economy performs in line with current forecasts for the rest of the year, he said, “it will not be appropriate to cut rates this year, to loosen policy this year.”

    Watching the Wall Street reaction to Powell’s comments, I was left scratching my head and thinking of the Marx Brothers. With my apologies to Chico: Who you gonna believe, me or your own ears?

    Meanwhile, on long-term TIPS: Those of us who buy 20 or 30 year inflation-protected Treasury bonds are currently securing a guaranteed long-term interest rate of 1.4% to 1.5% a year plus inflation, whatever that works out to be. At times in the past you could have locked in a much better long-term return, even from TIPS bonds. But by the standards of the past decade these rates are a gimme. Up until a year ago these rates were actually negative.

    Using data from New York University’s Stern business school I ran some numbers. In a nutshell: Based on average Treasury bond rates and inflation since the World War II, current TIPS yields look reasonable if not spectacular. TIPS bonds themselves have only existed since the late 1990s, but regular (non-inflation-adjusted) Treasury bonds of course go back much further. Since 1945, someone owning regular 10 Year Treasurys has ended up earning, on average, about inflation plus 1.5% to 1.6% a year.

    But Joachim Klement, a trustee of the CFA Institute Research Foundation and strategist at investment company Liberum, says the world is changing. Long-term interest rates are falling, he argues. This isn’t a recent thing: According to Bank of England research it’s been going on for eight centuries.

    “Real yields of 1.5% today are very attractive,” he tells me. “We know that real yields are in a centuries’ long secular decline because markets become more efficient and real growth is declining due to demographics and other factors. That means that every year real yields drop a little bit more and the average over the next 10 or 30 years is likely to be lower than 1.5%. Looking ahead, TIPS are priced as a bargain right now and they provide secure income, 100% protected against inflation and backed by the full faith and credit of the United States government.”

    Meanwhile the bond markets are simultaneously betting that Jerome Powell will win his fight against inflation, while refusing to believe him when he says he will do whatever it takes.

    Make of that what you will. Not having to care too much about what the bond market says is yet another reason why I generally prefer inflation-protected Treasury bonds to the regular kind.

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  • How NFTs Work — and How They Could Prove Profitable for Your Business

    How NFTs Work — and How They Could Prove Profitable for Your Business

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    Opinions expressed by Entrepreneur contributors are their own.

    2022 was an interesting year for NFTs (non-fungible tokens), to say the least. This was the year that saw public knowledge of NFTs go beyond Bitcoin and other cryptocurrencies to the field of digital collectibles, such as art and photographs.

    But while buying art and other collectibles may be getting most of the attention from the general public, they result in some of the more practical (and profitable) business applications getting overlooked. In reality, NFTs can have a variety of practical applications that help organizations achieve their existing business goals.

    First things first: How do NFTs work?

    NFTs are is cryptographic assets that are based on blockchain technology. The non-fungible aspect is important, as it gives NFTs distinctive properties that mean they cannot be replaced or replicated. They are unique, and can’t be manipulated or forged. Most often, we see NFTs in connection with digital assets, such as art, sports cards, games and other collectibles, where the blockchain provides a certificate of authenticity.

    NFTs can be bought and sold on the market, with pricing based on market demand, just like a physical product. However, the unique data that is part of the NFT makes it easy to validate ownership and verify the authenticity of the token.

    NFTs are also used to represent ownership details, memberships and more — and these varied use cases have proven key to business applications.

    Related: Here’s a Beginner’s Guide to Crypto, NFTs, and the Metaverse

    Linking digital tokens to physical benefits

    One key to generating business growth via NFTs is linking the tokens to a physical, real-world product or experience. As the report Brands in Web3 Q3 2022 by NFT Tech highlights, fashion brand Tiffany & Co. was able to turn NFTs into a set of exclusive physical goods. The company partnered with CryptoPunks to create an exclusive line of 250 “NFTiffs” pendants. Priced for 30 ETH (roughly $50,000 at the time), the unique pendants sold out in 22 minutes.

    Another example comes from the Australian Open. In 2022, the Australian Open launched a highly successful metaverse initiative of minting AO Art Ball NFTs that linked to data from live matches. This was paired with virtually hosting the Australian Open in a 3D virtual reality platform to provide an unprecedented level of access to one of tennis’s largest events.

    While the initial launch was successful in and of itself, the Australian Open’s commitment to this NFT initiative is poised to be even greater in 2023, with the announcement that holders of each Art Ball NFT will receive two complimentary seven-day Ground Passes to AO23’s finals week. Art Ball holders also gain access to additional exclusive experiences, such as streams and viewing suites through the “SuperSight” fan experience and access to other United Cup matches.

    With both Tiffany & Co. and the Australian Open, linking NFTs to real-world products or experiences proved to be a highly successful method for deepening relationships with their target audience.

    In addition, when NFTs are used in this way, they invite mass market participation, turning fans into financially-incentivized brand ambassadors who enjoy a high level of utility — and of course, can seamlessly trade their digital assets for real-world cash.

    Related: Putting the Intangible Into Your NFT Project

    Reaching new demographics

    NFTs don’t just help brands strengthen relationships with their existing customers — quite often, they can prove key to reaching a new audience entirely.

    Case in point: For quite some time, clothing brand Polo Ralph Lauren has seen its primary customer base largely concentrated among older adults, while younger demographics like millennials and Gen Z have been less interested in the clothing brand.

    In 2021 and 2022, however, Ralph Lauren made a full-fledged commitment to digital initiatives such as NFTs and the metaverse. These included launching a “phygital” fashion collection in Fortnite, as well as an exclusive digital clothing connection through the game Roblox.

    These digitally-focused efforts were a major success for the brand. As reported by Vogue Business, Polo Ralph Lauren saw its third-quarter revenue increase by 27% after the launch of its Roblox collection — with that growth largely driven by a 58% increase in the acquisition of new digital customers.

    In this case, strategic implementation of digital assets allowed Ralph Lauren to reach a younger target demographic in metaverse-style spaces where they would have the greatest appeal and potential impact.

    When done right, NFT initiatives can help revive sales and reinvigorate a brand’s image, making it more relevant and appealing in today’s competitive market.

    Using NFTs wisely for your business goals

    As these examples illustrate, the potential use cases for NFTs go well beyond selling digital art. With a strategic approach, businesses can use NFTs to find new ways to engage with younger, more tech-oriented demographics. NFT-based projects can help position your company as an innovator at the forefront of disrupting the marketplace.

    That being said, any business investment in NFTs should be done strategically. Major NFT failures in 2022 garnered a lot of media attention, and should serve as a powerful reminder for businesses as they enter this space. All investments in NFT should be done with the interests of the end customer in mind.

    When you focus on how your target audience could realistically benefit from your use of NFTs, you will be able to identify strategies that have true staying power, and that will build greater rapport between your brand and its most tech-savvy customers.

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    Lucas Miller

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  • Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

    Biden proposes ‘junk fee’ bill to cut hidden fees for credit cards and concert tickets | CNN Business

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    CNN
     — 

    President Joe Biden announced new progress Wednesday on his administration’s “competition agenda,” specifically taking aim at junk fees while calling on Congress to pass legislation targeting hidden fees across multiple industries.

    These costs can “drain hundreds of dollars a year from the pockets of hardworking American families, especially folks who are already struggling to make ends meet — but not anymore after today,” Biden said at the fourth meeting of the Presidential Competition Council on Wednesday.

    The proposed legislation in partnership with the Consumer Financial Protection Bureau, called the Junk Fee Protection Act, would target four types of excessive fees:

    • excessive online concert, sporting event and entertainment ticket fees
    • airline fees for families sitting together on flights
    • exorbitant early termination fees for TV, phone and internet services
    • surprise resort and destination fees

    In brief remarks before the meeting, Biden had called out credit card late fees in particular as “a junk fee if there ever was one,” saying the new guidance from the CFPB would reduce these fees.

    “Today’s rule proposes to cut those fees from $31 on average to $8,” he added. “That change is expected to save tens of millions of dollars for Americans, roughly $9 billion a year in total savings.”

    Biden called on Congress to pass the junk fee legislation, saying it would give “hardworking Americans just a little bit more breathing room.” It’s part of a plan, he added, to build “an economy that’s competitive and an economy that works for everyone.”

    Rohit Chopra, director of the CFPB, noted before the announcement that “over a decade ago, Congress banned excessive credit card late fees.”

    “But companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” he added in a statement to CNN. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”

    Another fee category that frustrates many customers is event tickets sold online, for which additional fees are frequently high — and typically appear late in the checkout process when a customer is about to make the purchase.

    For example, earlier this year, lawmakers grilled Live Nation president and CFO Joe Berchtold following a ticket sales debacle over exorbitant ticketing fees. Although the company said Wednesday it supports reform, it also said it opposes the proposed legislation.

    “We stand ready to work with the President and Congress on many common sense ticketing reforms, while also speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.

    Biden’s Transportation Department also took steps last fall during the previous meeting of the Competition Council to reduce “unnecessary hidden fees,” from airline and travel sites that the the President warned were “weighing down family budgets.”

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  • Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

    Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

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    The Federal Reserve raised the target federal funds rate for the eighth time in a row on Wednesday, in its continued effort to tame persistent inflation.

    At its latest meeting, the central bank approved a more modest 0.25 percentage point increase after recent signs that inflationary pressures have started to cool.

    “The easing of inflation pressures is evident, but this doesn’t mean the Federal Reserve’s job is done,” said Greg McBride, chief financial analyst at Bankrate.com. “There is still a long way to go to get to 2% inflation.”

    What the federal funds rate means to you

    The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves do affect the borrowing and saving rates consumers see every day.

    This rate hike will correspond with a rise in the prime rate and immediately send financing costs higher for many forms of consumer borrowing — putting more pressure on households already under financial strain.

    “Inflation has shredded household budgets and, in many cases, households have had to lean against credit cards to bridge the gap,” McBride said.

    On the flip side, “with rates still rising and inflation now declining, it is the best of both worlds for savers,” he added.

    How higher interest rates can affect your money

    1. Your credit card rate will rise

    Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does, as well, and your credit card rate follows suit within one or two billing cycles.

    “Credit card interest rates are already as high as they’ve been in decades,” said Matt Schulz, chief credit analyst at LendingTree. “While the Fed is taking its foot off the gas a bit when it comes to raising rates, credit card APRs almost certainly will keep climbing for at least the next few months, so it is important that cardholders continue to focus on knocking down their debt.”

    Credit card annual percentage rates are now near 20%, on average, up from 16.3% a year ago, according to Bankrate. At the same time, more cardholders carry debt from month to month while paying sky-high interest charges — “that’s a bad combination,” McBride said.

    At more than 19%, if you made minimum payments toward the average credit card balance — which is $5,474, according to TransUnion — it would take you almost 17 years to pay off the debt and cost you more than $7,528 in interest, Bankrate calculated.

    Altogether, this rate hike will cost credit card users at least an additional $1.6 billion in interest charges in 2023, according to a separate analysis by WalletHub.

    “A 0% balance transfer credit card remains one of the best weapons Americans have in the battle against credit card debt,” Schulz advised.

    Otherwise, consumers should consolidate and pay off high-interest credit cards with a lower-interest personal loan, he said. “The rates on new personal loan offers have climbed recently as well, but if you have good credit, you may be able to find options that feature lower rates that what you currently have on your credit card.”

    2. Mortgage rates will stay higher

    Rates on 15-year and 30-year mortgages are fixed and tied to Treasury yields and the economy. As economic growth has slowed, these rates have started to come down but are still at a 10-year high, according to Jacob Channel, senior economist at LendingTree.

    The average interest rate for a 30-year fixed-rate mortgage is now around 6.4% — up almost 3 full percentage points from 3.55% a year ago.

    “Relatively high rates, combined with persistently high home prices, mean that buying a home is still a challenge for many,” Channel said.

    This rate hike has increased the cost of new mortgages by around 10 basis points, which translates to roughly $9,360 over the lifetime of a 30-year loan, assuming the average home loan of $401,300, WalletHub found. A basis point is equal to 0.01 of a percentage point.

    “We’re still a ways away from the housing market being truly affordable, even if it has recently become a bit less expensive,” Channel said.

    Other home loans are more closely tied to the Fed’s actions. Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.65% from 4.11% a year ago.

    More from Personal Finance:
    64% of Americans are living paycheck to paycheck
    What is a ‘rolling recession’ and how does it impact you?
    Almost half of Americans think we’re already in a recession

    3. Auto loans will get more expensive

    Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans, so if you are planning to buy a car, you’ll shell out more in the months ahead.

    The average interest rate on a five-year new car loan is currently 6.18%, up from 3.96% last year.

    The Fed’s latest move could push up the average interest rate even higher, although consumers with higher credit scores may be able to secure better loan terms or look to some used car models for better deals.

    Paying an annual percentage rate of 6% instead of 4% would cost consumers $2,672 more in interest over the course of a $40,000, 72-month car loan, according to data from Edmunds.

    “The ever-increasing costs of financing remain a challenge,” said Ivan Drury, Edmunds’ director of insights.

    4. Some student loans will get pricier

    Federal student loan rates are also fixed, so most borrowers won’t be affected immediately. But if you are about to borrow money for college, the interest rate on federal student loans taken out for the 2022-23 academic year already rose to 4.99%, up from 3.73% last year and any loans disbursed after July 1 will likely be even higher.

    If you have a private loan, those loans may be fixed or have a variable rate tied to the Libor, prime or T-bill rates, which means that as the central bank raises rates, borrowers will likely pay more in interest, although how much more will vary by the benchmark.

    Currently, average private student loan fixed rates can range from just under 4% to almost 15%, according to Bankrate. As with auto loans, they also vary widely based on your credit score.

    For now, anyone with existing federal education debt will benefit from rates at 0% until the payment pause ends, which the Education Department expects to happen sometime this year.

    What savers should know about higher interest rates

    The good news is that interest rates on savings accounts are finally higher after the recent run of rate hikes.

    While the Fed has no direct influence on deposit rates, they tend to be correlated to changes in the target federal funds rate, and the savings account rates at some of the largest retail banks, which have been near rock bottom during most of the Covid pandemic, are currently up to 0.33%, on average.

    Also, thanks, in part, to lower overhead expenses, top-yielding online savings account rates are as high as 4.35%, much higher than the average rate from a traditional, brick-and-mortar bank.

    Rates on one-year certificates of deposit at online banks are even higher, now around 4.75%, according to DepositAccounts.com.

    As the Fed continues its rate-hiking cycle, these yields will continue to rise, as well. However, you have to shop around to take advantage of them, according to Yiming Ma, an assistant finance professor at Columbia University Business School.

    “If you haven’t already, it’s really important to benefit from the high interest environment by getting a higher return,” she said.

    Still, because the inflation rate is now higher than all of these rates, any money in savings loses purchasing power over time. 

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  • The bizarre history of Groundhog Day — or, how we decided to trust a subterranean rodent | CNN

    The bizarre history of Groundhog Day — or, how we decided to trust a subterranean rodent | CNN

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    CNN
     — 

    Every year, Americans in snowy states wait with bated breath to see whether Punxsutawney Phil will spot his shadow. And every year, we take Phil’s weather forecast – six more weeks of winter, or an early spring? – as gospel, meteorology be damned.

    It’s about as strange (and cute) as holidays get. So how did Groundhog Day go from a kooky local tradition to an annual celebration even those of us who don’t worry about winter can find the fun in?

    We explore Groundhog Day’s origins from a tiny event to an American holiday we can all be proud of. Spoiler: there are badgers, immortality and at least one groundhog on the menu.

    Every February 2, the members of the Punxsutawney Groundhog Club trek to Gobbler’s Knob, Punxsutawney Phil’s official home just outside of town. Donning top hats and tuxedos, the group waits for Phil to leave his burrow, and if he sees his shadow, the town gets six more weeks of winter. If he doesn’t see his shadow, Punxsutawney gets an early spring.

    But the early seeds of the Groundhog Day we know today were planted thousands of years ago, according to Dan Yoder, a folklorist “born and raised in the Groundhog Country of Central Pennsylvania” who penned the definitive history of the folk holiday turned national tradition.

    The holiday evolved over centuries as it was observed by different groups, from the Celts to Germans to the Pennsylvania Dutch and eventually, by those in other parts of the US. Its evolution began in the pre-Christian era of Western Europe, when the Celtic world was the predominant cultural force in the region. In the Celtic year, instead of solstices, there were four dates – similar to the dates we use today to demarcate the seasons – that were the “turning points” of the year. One of them, per Yoder, was February 1.

    These turning point dates were so essential to Europeans at the time that they Christianized them when Western Europe widely adopted Christianity. While May 1 became May Day, and November 1 became All Saints’ Day, the February 1 holiday was pushed to the following day – and would eventually become Groundhog Day.

    First, though, the February holiday was known as “Candlemas,” a day on which Christians brought candles to church to be blessed – a sign of a source of light and warmth for winter. But like the other three “turning points,” it was still a “weather-important” date that signified a change in the seasons, Yoder wrote.

    In 1973, Punxsutawney Phil delighted onlookers with his cuteness and disappointed them by predicting six more weeks of winter.

    And when agriculture was the biggest, if not only, industry of the region, predicting the weather became something of a ritual viewed as essential to the health of crops and townsfolk. There was some mysticism attached to the holiday, too, as seen in a poem from 1678 penned by the naturalist John Ray:

    “If Candlemas day be fair and bright

    Winter will have another flight

    If on Candlemas day it be showre and rain

    Winter is gone and will not come again.”

    The animal meteorology element wasn’t folded in until German speakers came to parts of Europe formerly populated by the Celtic people and brought their own beliefs to the holiday – except, instead of a groundhog, they hedged their bets on a badger. An old European encyclopedia Yoder cited points to the German badger as the “Candlemas weather prophet,” though it’s not clear why. (Sources including the state of Pennsylvania and the Punxsutawney Groundhog Club say the Germans also considered hedgehogs as harbingers of the new season.) When the holiday came overseas with the Pennsylvania Dutch, they traded the badger for an American groundhog, equally shy and subterranean and likely more prevalent in the area in which they settled.

    Many sources claim that the original Groundhog Day took place in 1887, when residents of Punxsutawney set out to Gobbler’s Knob, known as Phil’s “official” home, but the first piece of evidence Yoder found of townspeople trusting a groundhog for the weather, a diary entry, was dated 1840. And since Pennsylvania Dutch immigrants mostly arrived in the mid-to-late 18th century, it’s likely that the holiday existed for decades earlier than we have recorded, per the Library of Congress.

    Part of the reason so many of us know about Groundhog Day is due to the 1993 film of the same name. The phrase “groundhog day” even became shorthand for that déjà vu feeling of reliving the same day over and over. But Punxsutawney Phil became something of a cult celebrity even before the film debuted – he appeared on the “Today” show in 1960, according to the York Daily Record, and visited the White House in 1986. He even charmed Oprah Winfrey, appearing on her show in 1995.

    Before he was a celebrity, though, he was lunch. In a terrible twist, the earliest Groundhog Days of the 19th century involved devouring poor Phil after he made his prediction. The year 1887 was the year of the “Groundhog Picnic,” Yoder said. Pennsylvania historian Christopher Davis wrote that locals cooked up groundhog as a “special local dish,” served at the Punxsutawney Elk Lodge, whose members would go on to create the town’s Groundhog Club. Diners were “pleased at how tender” the poor groundhog’s meat was, Davis said.

    Last year, the apparently immortal and married groundhog Punxsutawney Phil predicted six more weeks of winter. AGAIN?!

    Groundhog meat eventually left the menu of Punxsutawney establishments as the townsfolk realized his worth. In the 1960s, Phil got his name, a nod to “King Phillip,” per the Groundhog Club. (The specific King Phillip he was named for is unclear; Mental Floss pointed out that there has not been a King Phillip of Germany, where many Pennsylvania settlers came from, in centuries). Before that, he was simply “Br’er Groundhog.”

    Punxsutawney Phil’s popularity has inspired several imitators: There’s Staten Island Chuck in New York, Pierre C. Shadeaux of Louisiana and Thistle the Whistle-pig of Ohio, to name a few fellow groundhog weather prognosticators. But there’s only one Phil, and he’s the original.

    Despite their early practice of noshing on Phil’s family, the Punxsutawney Groundhog Club avers that there has only been one Phil since 1886. He’s given an “elixir of life” every year at the summertime Groundhog Picnic, which “magically gives him seven more years of life,” the club said. (Groundhogs can live up to six years in the wild and up to 14 in captivity, per PBS’ Nature, so do with that what you will.)

    Phil also doesn’t have to spend the offseason alone. He’s married to Phyliss, per the Groundhog Club, who does not receive the same elixir of life and so will not live forever like her groundhog husband. There is no official word on how many wives Phil has outlived through over the years.

    As for his accuracy in weather-predicting – Phil’s hit or miss. He often sees his shadow – 107 times, in fact, per the York Daily Record, which has analyzed every single one of Phil’s official weather predictions since the 19th century. Last year, Phil saw his shadow, which coincided with a huge winter storm. Fingers crossed for better luck for us all this year.

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  • A self-made millionaire shares 8 money secrets rich people know that ‘most of us don’t’

    A self-made millionaire shares 8 money secrets rich people know that ‘most of us don’t’

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    It took me 20 years of trial and error before I achieved a multimillion-dollar net worth. Now, at 64, I draw income from the 18 companies I started and the 12,000 apartment units I own.

    But I wish I had known sooner how ultra wealthy people think about money. I’ve built relationships with many millionaires over the course of my investing career, and have spent years observing their habits.

    Here are eight money secrets they know that most of us don’t:

    1. They don’t diversify their investments right away.

    It’s generally good practice to diversify your portfolio by investing in a mix of different stocks, funds and other investments.

    But as the wealthiest people build their net worth, they often go all-in on their own projects, and then diversify as they start earning more.

    Elon Musk, for example, bet the $22 million he made selling his first company, an online business directory called Zip2, entirely on his next business, an online banking service called X.com.

    After X.com merged with PayPal, he made $180 million off PayPal’s sale to eBay. That gave him the cash to invest in Tesla, SpaceX and other ventures.

    2. They know that debt is for businesses, not people.

    As I built my net worth, I did not accumulate debt on non-essential purchases like designer clothes or luxurious homes.

    Even if I could afford the bills, I didn’t want to waste money paying interest. Instead, I wanted to put everything I was earning into generating more money. For me, that putting my income into my business.

    I also paid cash for my homes, and I have never accumulated interest on a credit card.

    In some cases, if you’re trying to build a business, debt can help you earn money by giving you access to income-generating assets sooner rather than later.

    3. Homeownership isn’t always their first investment.

    You might think that buying a primary residence is The American Dream, but it is rarely what you see the wealthy go for first.

    In my opinion, homeownership doesn’t always see the same return on investment as other places you can put your money. I own three homes, but I didn’t purchase them until I was able to buy them in cash.

    4. Instead, cash-flow real estate is the place to protect and grow money.

    On the flip side, cash-flow real estate — commercial real estate where you are making a monthly profit off of rent after your mortgage payments, property taxes and maintenance — is a great way to grow your money.

    You can make passive income off ownership of these properties, and it is often easier to sell them than a primary residence. When you sell a primary residence, you have to find a buyer who can envision themselves living there. When you sell a profitable rental property, you only have to find a buyer who wants to make a profit.

    5. They always buy in bulk.

    The wealthy are willing to spend more on each purchase in order to get a better price per unit and save time spent on repeating useless activities. 

    This can apply to a business — the rich may contract to buy bulk supplies or equipment — or to you personal life. When I can, I buy everything without an expiration date in bulk.

    6. They invest in their network.

    I have never had someone invest in me that didn’t know me. And most of the real estate I own today was purchased from sellers who picked me over other qualified buyers because we had existing relationships, and they had confidence in my ability to close.

    The more someone gets to know you, the more they will trust you and believe in your talents and skills. This leads to better opportunities, speedier decision-making and higher margins.

    So invest time and resources into making and maintaining the right connections.  

    7. They are never content.

    One of my friends, a serial CEO, has worked with some of the wealthiest people in the world.

    I once asked him what they had in common, and he said: “None of them were ever satisfied with what they had already accomplished, but instead focused on the next thing that could be accomplished.”

    The wealthy are never satisfied with their previous achievements. They believe they can always achieve more. This helps them think big about future business ideas, inventions, investments and other wealth multipliers.

    8. They don’t waste time trying to do everything themselves.

    The wealthy know that time is the only truly scarce resource. You can’t buy more of it.

    So they maximize their time by letting go of the need for control every small detail of their business or portfolio, and learn to effectively outsource and delegate to good, smart people who will trade their time for money.

    Grant Cardone is the CEO of Cardone Capital, bestselling author of “The 10X Rule” and founder of The 10X Movement and The 10X Growth Conference. He owns and operates seven privately held companies and an over $4 billion portfolio of multifamily projects. Follow him on Twitter @GrantCardone.

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  • The Federal Reserve is likely to hike interest rates again. What that means for you

    The Federal Reserve is likely to hike interest rates again. What that means for you

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    The Federal Reserve is widely expected to announce its eighth consecutive rate hike at this week’s policy meeting. 

    This time, Fed officials likely will approve a 0.25 percentage point increase as inflation starts to ease, a more modest pace compared with earlier super-size moves in 2022.

    Still, any boost in the benchmark rate means borrowers will pay even more interest on credit cards, student loans and other types of debt. On the flip side, savers could benefit from higher yields.

    More from Personal Finance:
    What is a ‘rolling recession’ and how does it impact you?
    Almost half of Americans think we’re already in a recession
    If you want higher pay, your chances may be better now

    “The good news is that the worst is over,” said Yiming Ma, an assistant finance professor at Columbia University Business School.

    The U.S. central bank is now knee-deep in a rate hike cycle that has raised its benchmark rate by 4.25 percentage points in less than a year.

    Although inflation is still above the Fed’s 2% long-term target, pricing pressures have “come down substantially and the pace of rate hikes is going to slow,” Ma said.

    The good news is that the worst is over.

    Yiming Ma

    assistant finance professor at Columbia University Business School

    The goal remains to tame runaway inflation by increasing the cost of borrowing and effectively pump the brakes on the economy.

    What the Fed’s rate hike means for you

    The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Whether directly or indirectly, higher Fed rates influence borrowing costs for consumers and, to a lesser extent, the rates they earn on savings accounts.

    Here’s a breakdown of how it works:

    Credit cards

    Since most credit cards have a variable interest rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does, too, and credit card rates follow suit. Cardholders usually see the impact within a billing cycle or two.

    After rising at the steepest annual pace ever, the average credit card rate is now 19.9%, on average — an all-time high. Along with the Fed’s commitment to keep raising its benchmark to combat inflation, credit card annual percentage rates will keep climbing, as well. 

    Households are also increasingly leaning on credit to afford basic necessities, since incomes have not kept pace with inflation. This makes it even harder for the growing number of borrowers who carry a balance from month to month.

    Here's how to get ahead of a rise in interest rates

    “Credit card balances are rising at the same time credit card rates are at record highs; that’s a bad combination,” said Greg McBride, chief financial analyst at Bankrate.com.

    If you currently have credit card debt, tap a lower-interest personal loan or 0% balance transfer card and refrain from putting additional purchases on credit unless you can pay the balance in full at the end of the month and even set some money aside, McBride advised.

    Mortgages

    Although 15-year and 30-year mortgage rates are fixed and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.

    “Despite what will likely be another rate hike from the Fed, mortgage rates could actually remain near where they are over the coming weeks, or even continue to trend down slightly,” said Jacob Channel, senior economist for LendingTree.

    The average rate for a 30-year, fixed-rate mortgage currently sits at 6.4%, down from mid-November, when it peaked at 7.08%.

    Still, “these relatively high rates, combined with persistently high home prices, mean that buying a home is still a challenge for many,” Channel added.

    Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate. As the federal funds rate rises, the prime rate does, as well, and these rates follow suit. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.65% from 4.11% a year ago.

    Auto loans

    Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans. So if you are planning to buy a car, you’ll shell out more in the months ahead.

    The average interest rate on a five-year new car loan is currently 6.18%, up from 3.96% at the beginning of 2022.

    Boonchai Wedmakawand | Moment | Getty Images

    “Elevated pricing coupled with repeated interest rate increases continue to inflate monthly loan payments,” Thomas King, president of the data and analytics division at J.D. Power, said in a statement.

    Car shoppers with higher credit scores may be able to secure better loan terms or look to some used car models for better pricing.

    Student loans

    Federal student loan rates are also fixed, so most borrowers won’t be affected immediately by a rate hike. The interest rate on federal student loans taken out for the 2022-23 academic year already rose to 4.99%, up from 3.73% last year and 2.75% in 2020-21. Any loans disbursed after July 1 will likely be even higher.

    Private student loans tend to have a variable rate tied to the Libor, prime or Treasury bill rates — and that means that, as the Fed raises rates, those borrowers will also pay more in interest. How much more, however, will vary with the benchmark.

    For now, anyone with existing federal education debt will benefit from rates at 0% until the payment pause ends, which the Education Department expects to happen sometime this year.

    Savings accounts

    On the upside, the interest rates on some savings accounts are higher after a run of rate hikes.

    While the Fed has no direct influence on deposit rates, the rates tend to be correlated to changes in the target federal funds rate. The savings account rates at some of the largest retail banks, which were near rock bottom during most of the Covid pandemic, are currently up to 0.33%, on average.

    Guido Mieth | DigitalVision | Getty Images

    Thanks, in part, to lower overhead expenses, top-yielding online savings account rates are as high as 4.35%, much higher than the average rate from a traditional, brick-and-mortar bank, according to Bankrate.

    “If you are shopping around, you are finding the best returns since the great financial crisis. If you are not shopping around, you are still earning next to nothing,” McBride said.

    Still, any money earning less than the rate of inflation loses purchasing power over time, and more households have less set aside, in general.

    “The best advice is pick up a side hustle to bring in some additional income, even if it’s just temporary, and pay yourself first with a direct deposit into your savings account,” McBride advised. “That’s how you are going to create the pathway to be able to save.” 

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  • Earning less than $30,000 a year is a ‘deal breaker’ for daters, new survey finds

    Earning less than $30,000 a year is a ‘deal breaker’ for daters, new survey finds

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    One-third of couples don’t talk about finances until after marriage, according to a recent survey of 1,000 adults by Western & Southern Financial Group. 

    This is especially alarming because, as it turns out, people do have financial deal breakers when it comes to seeing someone as a potential partner.

    When asked what amount of debt or how low a salary would make a potential partner undateable, survey respondents had some surprising answers. Here are two financial deal breakers, according to the study. 

    Salary deal breaker: Less than $29,878

    This is well below the median annual salary in the United States, which is $37,522, according to 2021 data from the U.S. Census Bureau.

    Salary was the number one financial trait that respondents wish they had talked about sooner with their partners. 

    More than one-fourth, 27.2%, of those surveyed said they only talked about salaries after getting married. And 18.7% said they talked about salaries after getting engaged. 

    Student loan debt deal breaker: More than $28,076

    This is below the average amount of student loan debt someone with a bachelor’s degree has, which is $37,574, according to data from Education Data Initiative.

    Men are a little more forgiving of debt than women, the survey showed. For men, $31,179 was a deal breaking amount of debt. For women it was $22,901. 

    Personal loans and credit card debt were also a source of friction while dating, according to the survey. 

    Ask your partner these 5 money questions

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  • How to Ask for a Raise? 5 Scripts for the Most Common Situations

    How to Ask for a Raise? 5 Scripts for the Most Common Situations

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    Inflation’s brutal — don’t leave any money on the table.

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    Amanda Breen

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  • In Your Debt: How couples can team up on debt repayment

    In Your Debt: How couples can team up on debt repayment

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    Between financially helping his parents and losing income as a result of the COVID-19 pandemic, Jeremy Mazza landed into serious credit card debt. Relief came from a source he wasn’t expecting: his partner, Ginna Lambert, who had come into a small inheritance. She suggested “investing” part of her bounty in their shared future by lending small amounts to Mazza that he could apply toward his debt.

    It took a bit of convincing.

    “To have to ask for money when I was the provider and had parents who themselves were asking for money, I didn’t want to follow in their footsteps and be taking,” Mazza says. “But that’s not what this was, this was a caring thing.”

    Mazza and Lambert approached the situation with open communication and specific loan terms. And for them, it’s paying off: Mazza estimates his credit score went up by about 150 points. The couple, who live in Richmond, Virginia, are getting married this year, and they hope to buy a home soon as well.

    “I had a very, very, very vested interest in making sure my partner’s credit score and finances were in as good of a shape as possible,” Lambert says.

    While joint debt is a shared responsibility, individual debts you bring into a relationship are ultimately yours to tackle. Still, they can get in the way of making life plans as a couple, so it may make sense for your significant other to help you with your debt in some way. But don’t enter into an arrangement of this kind without a plan.

    GET VULNERABLE WITH THE FULL FINANCIAL PICTURE

    It’s essential to be open with each other about your individual financial situations, especially as your relationship gets more serious.

    “If a couple is planning to get married, it’s a good idea to have a conversation before tying the knot,” says Trina Patel, a Los Angeles-based senior financial advice manager at Albert, a financial services company.

    Schedule a few distraction-free money dates where you talk about what’s going on for each of you. Those conversations can help you establish shared goals and figure out what actions to take to meet them, like adjusting your budget or finding ways to increase income.

    “Debt can often bring feelings of guilt, shame, and embarrassment leading spouses to not talk about the debts they have,” said Leanne Rahn, a financial advisor at Fiduciary Financial Advisors in Grand Rapids, Michigan, by email. “Vulnerability is hard but remember, you and your significant other are a team.”

    CONSIDER NONMONETARY WAYS TO HELP

    You may be unable, or unwilling, to pay off your partner’s debt. There are lots of other ways you can provide support, however. You can serve as an accountability buddy, help rethink your household budget if you live together or find ways to be more frugal in your shared spending.

    Maybe you can take on some more chores at home to give your partner time to pick up additional hours at work, or you can help your partner edit their resume if they want to find a higher-paying job.

    DISCUSS A FINANCIAL ARRANGEMENT

    If you’re comfortable gifting or loaning your partner money to put toward their debts, iron out all the details. Specify dollar amounts and write it all down.

    Lambert, for example, started by offering a six-month, interest-free $2,000 loan to Mazza. Over time, they both felt comfortable with additional, larger loans.

    Working with an attorney on a contract can help both partners feel at ease.

    “A legally binding agreement would definitely make the responsibilities of each spouse/significant other clear and straightforward with the law holding them accountable,” Rahn says.

    KNOW WHEN TO SAY ‘NO’

    It’s OK to not want to take on someone else’s financial burden, even if you care about them. If your relationship is relatively new or you’re unsure of how it might progress, you can still cheer on your partner as they pay down their debt.

    And if your partner won’t take your “no” for an answer, consider it a money red flag and proceed with caution.

    “I wouldn’t have offered this if we were still in our honeymoon phase,” Lambert says. “At that point, we had already moved in together. He had already proven, time and time again, that he was reliable.”

    _____________________

    This column was provided to The Associated Press by the personal finance website NerdWallet. Sara Rathner is a writer at NerdWallet. Email: srathner@nerdwallet.com. Twitter: @SaraKRathner.

    RELATED LINK:

    NerdWallet: Money red flags can make or break a couple https://bit.ly/nerdwallet-money-red-flags-can-make-or-break-a-couple

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  • What is a ‘rolling recession’ and how does it affect consumers? Economic experts explain

    What is a ‘rolling recession’ and how does it affect consumers? Economic experts explain

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    By most measures, the U.S. economy is in solid shape.

    Although the first half of 2022 started off with negative growth, a strong labor market and resilient consumer helped turn things around and give hope for the year ahead.

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    Gross domestic product, which tracks the overall health of the economy, rose more than expected in the fourth quarter, and the Federal Reserve is widely expected to announce a more modest rate hike at next week’s policy meeting as inflation starts to ease.

    More from Personal Finance:
    Almost half of Americans think we’re already in a recession
    It’s still a good time to get a job, career experts say
    If you want higher pay, your chances may be better now

    Still, some portions of the economy, such as housing, manufacturing and corporate profits, have shown signs of a slowdown, and a wave of recent layoffs fueled fears that a recession still looms. 

    “There’s no scarcity of economists with strong opinions,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers. “There’s a lot of scarcity of economists with the right opinion.”

    A ‘rolling recession’ may already be underway

    Rather than an abrupt contraction Americans need to brace for, a “rolling recession” is already in progress, according to Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics. “This means some parts of the economy take turns suffering rather than simultaneously.”

    In fact, the worst may even be over, he said.

    A large portion of the reaction to the Fed’s moves has worked its way through the economy and the financial markets. Businesses trimmed inventories and cut jobs in some areas, and consumers refinanced their homes ahead of rising rates.

    “It is time to think about an exit strategy,” Sohn said.

    This cycle has proven so many of our traditional theories wrong.

    Yiming Ma

    assistant finance professor at Columbia University Business School

    “Expectations about a recession have been pretty inaccurate,” added Yiming Ma, an assistant finance professor at Columbia University Business School.

    “This cycle has proven so many of our traditional theories wrong,” Ma said.

    In fact, this could be the soft landing Fed officials have been aiming for after aggressively raising interest rates to tame inflation, she added.

    What this means for consumers

    But regardless of the country’s economic standing, many Americans are struggling in the face of sky-high prices for everyday items, such as eggs, and most have exhausted their savings and are now leaning on credit cards to make ends meet.

    Several reports show financial well-being is deteriorating overall.

    “For consumers, there’s a lot of uncertainty,” Philipson said. For now, the focus should be on sustaining income and avoiding high-interest debt, he added.

    “Don’t plan any major future expenses,” he said. “No one knows where this economy is going.”

    How to prepare your finances for a rolling recession

    While the impact of inflation is being felt across the board, every household will experience a rolling recession to a different degree, depending on their industry, income, savings and job security.  

    Still, there are a few ways to prepare that are universal, according to Larry Harris, the Fred V. Keenan Chair in Finance at the University of Southern California Marshall School of Business and a former chief economist of the Securities and Exchange Commission.

    Here’s his advice:

    • Streamline your spending. “If they expect they will be forced to cut back, the sooner they do it, the better off they’ll be,” Harris said. That may mean cutting a few expenses now that you just want and really don’t need, such as the subscription services that you signed up for during the Covid pandemic. If you don’t use it, lose it.
    • Avoid variable-rate debts. Most credit cards have a variable annual percentage rate, which means there’s a direct connection to the Fed’s benchmark, so anyone who carries a balance has seen their interest charges jump with each move by the Fed. Homeowners with adjustable-rate mortgages or home equity lines of credit, which are pegged to the prime rate, have also been affected.
    • Stash extra cash in Series I bonds. These inflation-protected assets, backed by the federal government, are nearly risk-free and are currently paying 6.89% annual interest on new purchases through this April, down from the 9.62% yearly rate offered from May through October last year.
      Although there are purchase limits and you can’t tap the money for at least one year, you’ll score a much better return than a savings account or a one-year certificate of deposit. Rates on online savings accounts, money market accounts and CDs have all gone up, but those returns still don’t compete with inflation.

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  • U.S. consumer sentiment strengthens in final January reading

    U.S. consumer sentiment strengthens in final January reading

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    The numbers: U.S. consumer sentiment improved in late January to 64.9, according to the University of Michigan’s gauge of consumer attitudes.

    This added 5.2 index points from 59.7 in December and was up from the initial January reading of 64.6.

    Economists surveyed by The Wall Street Journal had forecast an unchanged reading of 64.6.

    Key details: A  gauge of consumer’s views of current conditions rose to a final reading of 68.4 in January from 59.4 in the prior month.

    The indicator of expectations for the next six months rose to 62.7 from 59.9 in December.

    Americans viewed that inflation was moderating in January. They expected the inflation rate in the next year to average about 3.9%, down from 4.4% in December. This is the lowest level since April 2021.

    In the longer run, inflation expectations held steady at 2.9%.

    Big picture: Consumer confidence rose for the second straight month on lower energy prices and better financial market conditions. Assessments of personal finances are improving, supported by higher income and easing price pressures.

    But sentiment remains well below the pre-pandemic level of 101 hit in February 2020 and the more recent high of 88.3 hit in April 2021.

    Market reaction: Stocks
    DJIA,
    -0.20%

    SPX,
    -0.17%
    opened higher on Friday. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.534%
    rose to 3.54%.

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  • Consumers spending falls at the end of 2022 and that’s not good news for the U.S. economy

    Consumers spending falls at the end of 2022 and that’s not good news for the U.S. economy

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    The numbers: Consumer spending fell 0.2% at the end of 2022, indicating the U.S. economy entered the new year with fading growth prospects and rising odds of recession.

    Analysts polled by The Wall Street Journal had forecast a 0.1% decline.

    Incomes rose 0.2% last month, the government said Friday, a bit faster than the rate of inflation.

    Key details: Americans spent less on gasoline in December after prices at the pump fell again. They also bought fewer new cars and trucks.

    While they purchased fewer goods last month, consumers spent more for services. Yet most of the money went to housing, medical care and transportation — necessities that Americans would prefer to spend less on.

    The U.S. savings rate rate, meanwhile, rose to 3.4% from 2.9% in the prior month. Savings had fallen late last year to the second lowest level on record going back to 1959.

    Households have dipped into their savings to support their spending habits because of high inflation. The so-called PCE price index is up 5% in the past year. And the better known consumer price index has risen 6.5% in the same span.

    Although inflation is slowing, prices are still rising faster than worker pay.

    Big picture:  Consumer spending, the main engine of the economy, sputtered toward the end of the year. Outlays also declined in November.

    High inflation ate into Americans’ budgets and rising interest rates made it more expensive to buy a car, home or other big-ticket items.

    Spending is unlikely to accelerate rapidly anytime soon, leaving the economy with weaker growth propects in 2023.

    The saving grace is a still-strong labor market that’s kept most Americans working — and earning a paycheck.

    Looking ahead: “A number of indicators are flashing red lights that a recession may be upon us,” said chief economist Bill Adams of Comerica. But “more data is needed to suss out whether the economy has definitively reached a turning point.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.08%
    and S&P 500
    SPX,
    +0.25%
    were set to open lower in Friday trades.

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