New government data shows a surprisingly strong job market for the month of January.
But there are signs of weakness in the labor market, based on tens of thousands of workers who have been laid off since 2024 started.
U.S. employers announced 82,307 job cuts in January, up from 34,817 in December, a 136% increase, according to outplacement firm Challenger, Gray & Christmas.
Still, that is down 20% from the 102,943 cuts announced in January 2023 and the all-time high for that month in 2009, with 241,749 job losses.
At the same time, the latest data shows the U.S. job market is still strong, with the unemployment rate holding at 3.7%.
Moreover, the number of job openings stands at nine million, which is still elevated compared to prior to the Covid-19 pandemic, yet down from a 12 million peak, noted Mark Hamrick, senior economic analyst at Bankrate.
“On the one hand, Americans should have a sense that their job security is generally speaking in a good place,” Hamrick said. “At the same time, we have to understand that certain sectors of the economy may be experiencing more disruption or innovation.”
With that innovation comes a higher risk that workers may suffer from an income loss as the economy adjusts, he said.
For example, retail brands may be shedding positions as they continue to transition from brick-and-mortar stores to online sales. Sectors tied to the mortgage industry are repositioning in the wake of higher interest rates. Areas such as entertainment and media are adjusting to new online streaming and subscription models.
“There’s still the benefit of the elevated number of job openings,” despite the anecdotal evidence that job cuts are happening, Hamrick said.
Some companies that have open positions are eager to fill them.
“There are still companies that are hiring, and they can’t find talent fast enough,” said Vicki Salemi, career expert at Monster.
If you’re newly out of work, taking these steps may help you get hired faster.
Losing a job typically prompts a feeling of rejection, Salemi said, while getting a job offer instead prompts acceptance and optimism about the future.
To get to that latter phase faster, it helps to take a moment to acknowledge your feelings and shift into a better mindset.
Salemi recalls working as a corporate recruiter to help two candidates who had just been let go to prepare for their job search.
The first candidate who was excited about potential opportunities landed a new job in six weeks. The other who was shell-shocked from the layoff took longer than six months to find a new position.
Mindset and attitude make all the difference, according to Salemi. “Navigating this journey can be challenging, but it can definitely be overcome,” Salemi said.
Start thinking about the ideal job and what that looks like for you by asking yourself some key questions, Salemi advised.
Where is your ideal position based: in office, hybrid or remote? What industry is it in? What tasks does it require? Are there strengths or items you absolutely loved doing in your last position that you want to continue doing?
Use your time away from a full-time role to continue advancing your skills. That may include taking on a part-time role, volunteer work or online class.
When interviewing, be sure to highlight how those experiences have kept your skills fresh and enhanced what you can offer, Salemi said.
Just because you’re out of work doesn’t necessarily mean you need to take a lower salary for your next role. Even if you are coming to a new position without a job, do not discount your worth because you’re unemployed, Salemi said.
Employers are more surprised when you don’t negotiate than when you do, according to Salemi.
“Don’t be shy about negotiating that offer,” Salemi said.
Grocery items are offered for sale at a supermarket on August 09, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
Heading into 2023, the predictions were nearly unanimous: a recession was coming.
As the year comes to a close, the forecasted economic downturn did not arrive.
So what’s in store for 2024?
An economic decline may still be in the forecast, experts say.
The prediction is based on the same factors that prompted economists to call for a downturn in 2023. As inflation has run hot, the Federal Reserve has raised interest rates.
Typically, that dynamic has triggered a recession, defined as two consecutive quarters of negative gross domestic product growth.
Some forecasts are optimistic that can still be avoided in 2024. Bank of America is predicting a soft landing rather than a recession, despite downside risks.
More than three-fourths of economists — 76% — said they believe the chances of a recession in the next 12 months is 50% or less, according to a December survey from the National Association for Business Economics.
“Our base case is that we have a mild recession,” said Larry Adam, chief investment officer at Raymond James.
That downturn, which may be “the mildest in history,” may begin in the second quarter, the firm predicts.
Of the NABE economists who also see a downturn in the forecast, 40% say it will start in the first quarter, while 34% suggest the second quarter.
Americans who have struggled with high prices amid rising inflation may feel a downturn is already here.
Layoffs, which made headlines at the end of 2023, may continue in the new year. While 29% of companies shed workers in 2023, 21% of companies expect they may have layoffs in 2024, according to Challenger, Gray & Christmas, an outplacement and business and executive coaching firm.
To prepare for the unexpected, experts say taking these three steps can help.
More than one third — 34% — of consumers went into debt this holiday season, down from 35% in 2022, according to LendingTree.
The average balance those shoppers are taking away is $1,028, well below last year’s $1,549 and the lowest since 2017.
But higher interest rates mean those debts are more expensive. One-third of holiday borrowers have interest rates of 20% or higher, LendingTree reports.
Certain moves can help control how much you pay on those debts.
First, LendingTree recommends automating your monthly payments to avoid penalties for late payments, including fees and rate increases.
If you have outstanding credit card balances that you’re carrying from month to month, try to lower the costs you’re paying on that debt, either through a 0% balance transfer offer or a personal loan. Alternatively, you may try simply asking your current credit card company for a lower interest rate.
Much of how a recession may affect you comes down to whether you still have a job, Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services, told CNBC.com earlier this year. Glassman is also a member of CNBC’s Financial Advisor Council.
An economic downturn may also create a situation where even those who are still employed earn less, he noted.
Consequently, it’s a good idea to evaluate how well you could handle an income drop. Consider how long, if you were to lose your job, you could keep up with bills, based on savings and other resources available to you, he explained.
“Stress-test your income against your ongoing obligations,” Glassman said. “Make sure you have some sort of safety net.”
Even having just a little more cash set aside can help ensure an unforeseen event like a car repair or unexpected bill does not sink your budget.
Yet surveys show many Americans would be hard pressed to cover a $400 expense in cash.
Experts say the key is to automate your savings so you do not even see the money in your paycheck.
“Even if we do get through this period relatively unscathed, that’s all the more reason to be saving,” Mark Hamrick, senior economic analyst at Bankrate, recently told CNBC.com.
“I have yet to meet anybody who saved too much money,” he added.
Another advantage to saving now: Higher interest rates mean the potential returns on that money are the highest they have been in 15 years. Those returns may not last, with the Federal Reserve expected to start cutting rates in 2024.
The U.S. economy continues to grow despite the 5.5% benchmark federal funds interest rate set by the Federal Reserve in 2023.
The Fed’s leaders expect their interest rate decisions to eventually slow that growth.
The increase in borrowing costs that stems from Fed decisions does not affect all consumers immediately. It typically affects people who need to take new loans — first-time homebuyers, for example. Other dynamics, such as the use of contracts in business, can slow the ripple of Fed decisions through an economy.
“It might not all hit at once, but the longer rates stay elevated, the more you’re going to feel those effects,” said Sarah House, managing director and senior economist at Wells Fargo.
“Consumers did have additional savings that we wouldn’t have expected if they had continued to save at the same pre-Covid rate. And so that’s giving some more insulation in terms of their need to borrow,” said House. “That’s an example of why this cycle might be different in terms of when those lags hit, versus compared to prior cycles.”
A 1% interest rate increase can reduce gross domestic product by 5% for 12 years after an unexpected hike, according to a research paper from the Federal Reserve Bank of San Francisco.
“It’s bad in the short term because we worry about unemployment, we worry about recessions,” said Douglas Holtz-Eakin, president of the American Action Forum, referring to the paper’s implications for central bank policymakers. “It’s bad in the long term because that’s where increases in your wages come from; we want to be more productive.”
Some economists say that financial markets may be responding to Federal Reserve policy more quickly, if not instantaneously. “Policy tightening occurs with the announcement of policy tightening, not when the rate change actually happens,” said Federal Reserve Governor Christopher Waller in remarks July 13 at an event in New York.
“We’ve seen this cycle where the stock market moved more quickly in some cases, more slowly in other cases,” said Roger Ferguson, former vice chair of the Federal Reserve. “So, you know, this question of variability comes into play, as in how long it’s going to take. We think it’s a long time, but sometimes it can be faster.”
Watch the video above to see why the Fed’s interest rate hikes take time to affect the economy.
Last week, the average interest rate for certain 30-year fixed-rate mortgages decreased to 7.37% from 7.41% the prior week, in the fourth successive week of declines. Lower mortgage rates have prompted mortgage applications to pick up.
Yet, about 80% of outstanding U.S. mortgages have interest rates below 5%, according to Bank of America’s research. Even the recent decline in mortgage rates may not provide incentive for homeowners to move.
“The story for 2023 has been one of homeowners staying put,” said Daryl Fairweather, chief economist at Redfin.
Factors that have contributed to that immobility have recently started to ease, though it remains to be seen whether that will last.
The median monthly mortgage payment is down more than $150 from the peak, marking the lowest level in three months, Redfin’s Nov. 30 research found. Monthly payments are falling as mortgage rates come down from their peak.
The weekly average 30-year mortgage rate fell to 7.29% in late November, down from a 7.79% high in October, according to Redfin.
Those declining rates have offset rising home prices, with the median sale price up 4%. The number of new listings, which is up 6%, has had the biggest year-over-year increase since 2021, according to Redfin.
More prospective homebuyers may be willing to take a chance to reach their goal, with 62% indicating they are waiting for prices and/or rates to fall before buying a home, down from 85% who said the same six months ago, according to Bank of America.
Major life events tend to prompt people to move, according to Skylar Olsen, chief economist at Zillow.
“The problem is, right now, the finances block people from following that major fundamental change,” Olsen said.
For example, they may choose to struggle through a long commute to a new job while they wait for lower home prices, she said.
That may be poised to start to shift in 2024, but it will likely be very gradual, Olsen said.
Zillow’s forecast has called for mortgage rates improving very slowly, which means the number of new listings may also improve very gradually, she said.
Prospective buyers who are hoping for a big drop in home prices will be disappointed, Olsen said.
Rather than a dramatic decline, there will likely be slower home price growth over the next five years, she said, barring any big changes to current dynamics.
When Dave Bernstein, 87, started working at the U.S. Postal Service in February 1970, he was making $2.35 an hour.
To supplement his income, he also took on other work. Years later, Bernstein decided in 1992 to take a voluntary retirement.
“We knew there was going to be a reduced pension because of the early out,” said Phyllis Bernstein, Dave’s wife, who is 84.
But what came next was something the couple did not expect.
While Dave was expecting a monthly Social Security check of around $800, it ended up being just about half that amount – around $415 – even though he had earned the required 40 credits to be fully insured by the program. The benefits were adjusted based on rules for workers who earn both pension and Social Security benefits.
The couple, who reside in Tampa, Florida, have had a different retirement than they envisioned due to the lower income.
Phyllis kept working until she was 82. They have also turned to family for financial support.
Their lifestyle is frugal, with home-cooked meals and cars they kept for 20 years, or “until the wheels were falling off,” the couple jokes.
But their limited resources have made traveling to Australia and New Zealand – Phyllis’ dream – out of reach.
“When he retired, I was working,” Phyllis said. “We just couldn’t do the travel.”
Today, Dave is pushing for the Social Security rules that reduced his benefits to be changed.
His union, the American Postal Workers Union, has endorsed the Social Security Fairness Act, a bill proposed in Congress that would repeal Social Security rules known as the Windfall Elimination Provision, or WEP, and Government Pension Offset, or GPO, that reduce benefits for workers had positions where they did not pay Social Security taxes, also called non-covered earnings.
The legislation has support from other organizations that represent public workers, including teachers, firefighters and police.
The bill has overwhelming bipartisan support in the House of Representatives – 300 co-sponsors – at a time when that chamber has been politically divided. That support recently prompted House lawmakers to send a letter to leaders of the Ways and Means Committee to request a hearing.
The WEP applies to how retirement or disability benefits are calculated if a worker earned a retirement or disability pension from an employer who did not withhold Social Security taxes and qualifies for Social Security from work in other jobs where they did pay taxes into the program.
Social Security benefits are calculated using a worker’s average indexed monthly earnings, and then using a formula to calculate a worker’s basic benefit amount. For workers affected by the WEP, part of the replacement rate for the average indexed monthly earnings is brought down to 40% from 90%.
The GPO, meanwhile, reduces benefits for spouses and widows or widowers of recipients of retirement or disability pensions from local, state or federal governments.
It affects hundreds of thousands, if not millions of public employees that paid into Social Security and essentially are being penalized because they also happen to be public servants.
Edward Kelly
general president of the International Association of Fire Fighters
Under the GPO, Social Security benefits are reduced by two-thirds of the government pension. If two-thirds of the government pension is more than the Social Security benefit, the Social Security benefit may be zero.
The impact of the rules is far reaching, according to Edward Kelly, general president of the International Association of Fire Fighters. Many firefighters work in second jobs in the private sector as cab drivers, bar tenders or truck drivers, where they earn credits toward Social Security.
“They steal their money, because they’re also public employees,” said Kelly, who describes his union members as “passionately angry” about the issue.
“It affects hundreds of thousands, if not millions of public employees that paid into Social Security and essentially are being penalized because they also happen to be public servants, whether they are teachers, cops and, obviously, firefighters,” Kelly said.
The WEP and GPO rules were intended to make it so workers who pay Social Security taxes for their entire careers are treated the same as those who do not.
But under those current rules, some beneficiaries receive lower benefits than they would have if they paid into Social Security for all of their careers, while others receive higher benefits, according to the Bipartisan Policy Center.
Yet repealing the WEP and GPO rules would result in Social Security benefits that are “overly generous” for non-covered workers, research has found.
Part of what may create that advantage is that Social Security benefits are progressive, and therefore replace a larger share of income for lower earners. So someone who only has part of their salary history in Social Security may get a higher replacement rate without considering their pension income.
Fully repealing the WEP and GPO rules may also come with higher costs at a time when the program facing a funding shortfall. The change would add an estimated $150 billion to the program’s costs in the next 10 years, according to the Center on Budget and Policy Priorities.
Another way of handling the disparity may be to create a proportional approach to income replacement. Instead of the WEP, workers’ benefits would be calculated based on all of their earnings and then adjusted to reflect the share of their careers that were in jobs covered by Social Security. A similar approach may be taken with the GPO.
However, a proportional formula may not solve all the inequities in the current system, according to Emerson Sprick, senior economic analyst at the Bipartisan Policy Center, which has prompted to think tank to work on refining its proposal.
An important advantage to reforming the current formulas would be making it easier for workers to understand and plan for their retirements.
“It is definitely extremely complex, and very hard for folks preparing for retirement or in retirement, to understand what it means for their benefits,” Sprick said.
Social Security statements that provide retirement benefit estimates do not take these rules into account.
Consequently, many workers find out their benefits are adjusted when they are about to retire.
shapecharge | E+ | Getty Images
“The young guys don’t pay attention to it because it’s too far out; they’re not worried about it,” Kelly said of the firefighters.
“It’s not until you’re ready to go out the door that you actually start paying attention to what you’re going to have to live off when you actually retire,” he added.
The reductions to their Social Security benefits can be a shock.
For beneficiaries like the Bernsteins who start out with lower benefits, it can be difficult to catch up, even after a record 8.7% Social Security cost-of-living adjustmentw went into effect this year.
“Gas this summer and in the spring at $4 a gallon ate that money up like it wasn’t even there,” Dave Bernstein said.
Igor Golovniov | SOPA Images | LightRocket via Getty Images
For many purchases, once you swipe your debit or credit card or click “buy now,” that transaction swiftly shows up as pending on your account. But that’s not always the case if you’re shoppingin Apple’s App Store.
Apple is known to do something called “bundled billing,” where it groups purchases made within a certain period into a single charge.
The tech giant has used the practice since the early days of the iTunes Music Store in 2003, and it often means users can purchase apps, subscriptions, books and music without having the funds charged to their account until several days later.
It may seem like a small difference in timing, but Apple’s practice of delaying and combining charges can lead some consumers to face budgeting challenges and hefty overdraft fees as they grapple with the unpredictability of when expenses will hit their accounts.
“It doesn’t make any sense,” said developer David Barnard,growth advocate for RevenueCat, which makes a tool to automate Apple’s billing on the developer side. Barnard has also experienced the delay with some of his own App Store purchases.
“In modern times, where you purchase something online and you get an email receipt within seconds, it’s a bizarre practice,” he said.
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Longtime Apple userSavannah Moore, 35, of Buena Vista, Colorado, told CNBC the bundling affected her less when she worked full-time and generated more income.Butnow that she’s on disability and only gets paid once a month, she said not knowing when she’ll be billed makes it harder to plan.
Apple recently billed Moore a total of $15.98 for two separate transactions, a subscription and an in-app purchase, causing her to be charged three days after purchase for the subscription and two days after the in-app purchase.
With the delayed charges, she said she is often misled by her account balance and has incurred overdraft fees on multiple occasions.
“I go out with my friends, buy a cheap drink and get a taco,” she said, recounting an experience. “I wake up the next morning and my account bounced because the taco was charged by the person I bought it from that night … but Apple didn’t charge what they were supposed to charge [days earlier], until also that night.”
A spokesperson at Merchant Advisory Group, which works with more than 150 merchants across the U.S., said it’s not unusual for businesses to develop systems that help them minimize the transaction costs imposed by card networks. Starbucks, for instance, has a rewards program that incentivizes customers who pay with a Starbucks gift card by awarding two “stars” for every $1 spent, as opposed to one star if they were to pay with a credit or debit card.
“It’s really the same process, just a different way of making that process work.”
That said, Apple’s practice is unique among major app stores.
Asked about the practice, an Apple spokesperson told CNBC in an emailed statement that the company sometimes bundles multiple purchases and subscriptions into one bill for the convenience of its customers, and sends a single email receipt instead of an individual email for every purchase a customer makes. It also notes the practice on its website in the support section on how to confirm billing charges.
Apple did not respond to follow-up requests to clarify how it determines the duration of a delayed charge and when it decides to group purchases.
Meanwhile, Google Play does not bundle, a company spokesperson told CNBC. Its website says that customers are charged “shortly” after purchasing content and will receive a confirmation email with their order information.
An Amazon spokesperson said purchases on Amazon Appstore are treated separately and a “separate clear” notification is sent to the customer for each charge.
There are likely financial advantages for Apple in bundling and delaying charges, some experts say.
Businesses have to pay a per-transaction fee — or “swipe fee” — each time they process an electronic payment. The swipe fee is typicallya percentage of the transaction amount plus a fixed fee. Credit card swipe fees average 2.24% but can be as high as 4%, according to the Merchants Payment Coalition. The Federal Reserve capped debit card fees at 21 cents plus0.05% of the transaction.
By delaying a charge so it can be grouped with other purchases, Apple may beable to retain a larger profit margin.
Delayed and bundled chargeswere more comprehensible in the early days of the iTunes Music Store because charging a customer each time they purchased a $0.99 song would havebeen coupled with steep interchange fees, said Barnard, the developer. But the practice made less sense with the emergence of the App Store in 2008.
When we swipe our credit card or make a purchase, we’re happy. We enjoy buying stuff, we just don’t like seeing the transaction.
Michael Barbera
Chief behavioral officer at Clicksuasion Labs
Bundling could have cost-cutting perks for the customer, said Lawrence Sprung, a certified financial planner and the founder of Mitlin Financial in Hauppauge, New York.
Since Apple can save on transaction fees by grouping purchases, he said it’s also likely that customers can pay less for those purchases.
“If the company can keep their cost down, then the hope is that they’ll keep the cost down for the consumer,” Sprung said.
When a customer isn’t billed immediately after a purchase, it can drive them to make more purchases, according to psychology experts.
Bundled billing can reduce “pain of paying,” which refers to the negative emotions people experience when paying for goods or services, said consumer psychologist Michael Barbera, chief behavioral officer at Clicksuasion Labs. If a customer receives a receipt or notification after every purchase they make, they’ll be less likely to spend money in the future.
“When we swipe our credit card or make a purchase, we’re happy,” Barbera said. “We enjoy buying stuff, we just don’t like seeing the transaction.”
So, when customers can indulge in an app or service without being billed on the spot, they’re more likely to associate their interactions with Apple as experiential rather than transactional, said Barbera — and that positively influences consumer behavior.
The practice of bundling charges and the lack of clarity on how the policy is executed create the illusion that customers are spending less money less often, said Avigail Lev, a clinical psychologist and consultant based in San Francisco.
That can lead to overspending — especially for people who aren’t the best at tracking expenses.
At some point, we kind of have to say, ‘Hey, I’m an adult. I know I’m spending this money, I need to keep track of it.’
Taylor Kovar, CFP
CEO and founder of Kovar Wealth Management
The financial consequences of bundled billing may also disproportionately affect people who live paycheck to paycheck, said behavioral scientist Piyush Tantia, chief innovation officer at Ideas42. Those individuals tend to have volatile income and expenses that make it difficult for them to track their finances thoroughly.
“They’re not accounting for that charge hitting later, and they may spend [the money] on something else in the meantime and then end up with hefty fees,” Tantia said. “For someone who’s already tight on finances, that extra fee is very, very painful.”
As Apple user Moore discovered, bundled billing can be more problematic for shoppers using debit cards. After the Consumer Financial Protection Bureau began scrutinizing banking fees, some banks have eliminated overdrafts or implemented more consumer-friendly policies. Even so, the average overdraft fee is $26.61 and can be as high as $38,according to recent data from Bankrate.
Certified financial planner Taylor Kovar, CEO and founder of Kovar Wealth Management in Lufkin, Texas, said Apple’s delayed billing has affected some of his clients. Although it would be ideal for customers to know when they will be charged — as they do for many recurring bills such as utilities or student loans — he said, it’s still important for them to take responsibility for their purchases.
“At some point, we kind of have to say, ‘Hey, I’m an adult. I know I’m spending this money, I need to keep track of it,’” Kovar said.
With technological advancements, Kovar said, consumers should take advantage of free budgeting apps that allow them to set up alerts and track where their money is going. He also said it’s safer to charge Apple App Store purchases to a credit card instead of a debit card because it protects against fraud and overdraft fees.
It’s not common for people to buy something and immediately check their bank accounts to see if the charge is posted, said behavioral scientist Michael Liersch, head of advice and planning for Wells Fargo Wealth and Investment Management. People tend to keep a “mental account” of their money as it comes in and goes out, and check in on it sporadically.
Due to this, he said, the delayed charges can affect people differently based on how often they engage with their finances.
“When you think of general consumer behavior, it’s not uncommon for people to look at that information possibly once a month,” Liersch said. “It’s much less usual for someone to look at it moment to moment or daily.”
For people to maintain agency over their finances with delayed billing, Liersch said it’s critical for them to focus on how much money they have available to spend on a daily, weekly and monthly basis.
Social media has upped the ante when it comes to showing off users’ lifestyle or experiences. The new videos show off the same coveted lifestyles with a wink: “You think I can afford this, but little do you know what’s in my bank account.”
Experts say that’s not necessarily a bad thing.
“Money is so taboo,” said Emily Irwin, managing director of advice and planning at Wells Fargo’s Wealth & Investment Management.
“To talk about that, to put it out there in a very vulnerable way, I think is also empowering of others to even start the conversation,” Irwin said.
“Bougie broke” describes the state of “always barely having adequate funds,” whether it be in cash, accounts or on credit cards, according to the Urban Dictionary.
The term is not new.
But the term is trending in a unique set of circumstances — inflation that recently pushed the rate of price increases to the highest in four decades, an already high cost of living that has made achieving major life goals such as buying a home feel out of reach, and a pandemic that tempted more people to prioritize live-for-today experiences.
Generally, “hedonic or conspicuous” spending with the aim of making other people see you in a certain way is not a good thing, according to Dan Egan, vice president of behavioral finance and investing at Betterment.
But the new bougie broke videos may have a positive influence in destigmatizing an uncomfortable topic — feeling conflicted about spending decisions.
It’s like asking, “What do other people think? Am I the only one here who feels this way?” Egan said.
“There’s definitely a trend towards every generation being a little bit more comfortable talking about things that were serious stigmas in previous generations,” Egan said.
The bougie broke videos highlight the fact that people prioritize different things, and you never know what’s totally behind what you’re seeing, Irwin said.
While you may assume someone’s flashy lifestyle comes with plenty of extra room for savings and the achievement of other big financial goals, that is not necessarily true, she said.
“To dispel that whole notion is really cool, I think,” Irwin said.
This could be a super-interesting way to put your goals out there and hold yourself accountable.
Emily Irwin
managing director of advice and planning at Wells Fargo’s Wealth & Investment Management
Not only do the videos take the stigma out of admitting you’re “bougie broke,” the platforms also offer a new way to share personal goals and hold yourself accountable, she said.
“One of the most impactful steps of setting goals is actually communicating them with someone,” Irwin said.
Whether it’s an audience of one or 1 million, knowing people are listening can help push you to keep going, she said.
“This could be a super-interesting way to put your goals out there and hold yourself accountable,” Irwin said.
Another trend that’s catching on — “premium mediocre” — may have a powerful impact on how people live, Egan said. The term describes goods and services that are just slightly above average, say a six or seven out of 10.
For some things, say when it comes to the salad you eat, the difference in quality is probably not that different from what a billionaire consumes.
Part of the bougie broke trend is separating who you think of as being well off from those who visibly spend a lot of money, he said.
More truly wealthy people are pulling back from showing off their wealth in favor of quiet luxury, Egan said. Ultimately, that’s a good thing.
“We’re decoupling that sense of spending money as a signal for wealth versus spending money for spending money,” Egan said.
That has led more home purchasers to opt for one strategy, purchasing mortgage points, as a way to defray higher monthly payments.
Mortgage points let buyers pay an upfront fee to lower the interest rate on their loans. In some cases, sellers will help to buy down rates to help ease transaction costs.
Almost 45% of conventional primary home borrowers bought mortgage points in 2022 to reduce their monthly mortgage payments, a trend that has continued into this year, according to recent research from Zillow.
That is up from 29.6% in 2021, when interest rates were lower.
The 30-year fixed-rate mortgage currently averages 6.7% according to Freddie Mac, up from 5.8% a year ago. The 15-year fixed-rate mortgage now averages about 6%, up from 4.8% a year ago.
This week, the Federal Reserve decided to pause the interest rate hikes it has put in place to combat high inflation.
As rates stay higher, those who are in the market for a home lose purchasing power. Some experts have urged buyers to consider purchasing mortgage points to lower their monthly payments.
Stephanie Grubbs, a licensed real estate agent at the Zweben team at Douglas Elliman Real Estate in New York, recently did exactly that when one of her clients lowered their asking price.
“This fabulous apartment just had a price reduction, which means you can use those savings to buy down your rate,” Grubbs wrote in the updated ad.
Grubbs, a former financial advisor, said her firm started bringing up the strategy more when the Fed started hiking interest rates.
“In an effort to try to be creative, we talk to sellers about offering to buy down a rate,” Grubbs said.
Other experts say buyers purchasing mortgage points can be a great strategy for the right situation.
That goes particularly if a buyer can afford the extra upfront costs.
Being able to lower that monthly payment can really help give some more wiggle room in people’s budgets and help them reach affordability.
Nicole Bachaud
senior economist at Zillow
Mortgage points refer to the percentage amount of the loan. Typically, one point is worth 1% of the loan value, according to Nicole Bachaud, senior economist at Zillow.
If the loan value is $300,000, one point would typically cost $3,000 and lower the interest rate 0.25 percentage points, she said.
“Being able to lower that monthly payment can really help give some more wiggle room in people’s budgets and help them reach affordability,” Bachaud said.
In addition to higher upfront costs, home buyers should also weigh other factors before buying mortgage points.
“For most instances, it is definitely a considerable cost savings to be able to buy down on points,” said Kamila Elliott, a certified financial planner and co-founder and CEO of Collective Wealth Partners, a boutique advisory firm in Atlanta. Elliott is also a member of the CNBC Financial Advisor Council.
However, if you buy points and then refinance, that will not allow enough time for your upfront payment to appreciate, Elliott said.
Another important consideration is your timeline for how long you plan to live in the home.
With rates and home prices high, that means closing costs are also elevated, Elliott said.
Consequently, if you move before three to five years, you may take a bigger financial hit, she said.
“There could be a huge loss if you can’t stay in that property long enough to have those expenses amortized out over the time that you’re there,” Elliott said.
If you have extra money when buying a home, you may instead choose to increase the size of your down payment.
This can be advantageous because it creates more equity in the home, Bachaud noted. It may also lower your monthly payments.
If that extra money is enough to bring your down payment to 20% of the home purchase price, that would eliminate the need for private mortgage insurance, which adds to monthly costs for mortgage borrowers who put down less than those sums.
However, you may see more of an effect on your monthly expenses by buying points rather than increasing your down payment, Elliott said.
It costs less for a seller to buy down somebody’s mortgage than it does for them to take a price reduction.
Stephanie Grubbs
licensed real estate agent at Douglas Elliman Real Estate
A point may cost $3,000 to $4,000, for example. But putting those sums toward a down payment likely will not make much of a difference on your monthly costs, Elliott said.
If you want to make sure your mortgage payment doesn’t exceed one-third of your take home income, then paying down on points could be the better option, she said.
In some situations, a seller may offer to buy down the rate, a concession to help offset costs for buyers. Grubbs said she has discussed employing this strategy with clients in her real estate practice.
“It costs less for a seller to buy down somebody’s mortgage than it does for them to take a price reduction,” Grubbs said.
Homebuyers may want to consider pursuing a 2-1 buydown, a mortgage that provides a low interest rate for the first year, a slightly higher rate in the second year and a full rate for the following years.
A 2-1 buydown may also sometimes be seller financed, according to Bachaud.
Talking to a loan officer can help you decide the best decision for your situation, Bachaud said.
How well any homebuying strategy fares in the long run depends on one big unknown: how the Federal Reserve will handle interest rates going forward.
The latest projections from the central bank call for two more rate hikes this year.
While today’s rates feel high, Elliott said she often reminds people that homebuyers in the 1980s would have loved to have had access to 6% mortgage rates.
“Consumer spending represents more than half of the economy,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions. “So if consumer spending is strong, that alone is, generally speaking, enough to keep the economy from slipping into a recession.”
In the first quarter of 2023, gross domestic product grew at a 1.1% rate compared to the previous quarter. This modest level of growth is an improvement from mid-2022 GDP figures, which initially brought recession fears to light.
The end of this tightening cycle may be coming into focus as consumers reach their breaking point. As the pandemic fades, historic levels of personal saving have taken a nosedive. Deposits at banks have crested as consumers keep spending amid continually rising prices.
Moderate-income Americans also are facing the significant headwind of less tax-refund money. The average refund this year is $2,777 through April 28, down 8% from the same period last year, according to IRS data.
“Because this is the same household that rely more on the tax refund to finance their spending, a lower refund really has some negative impact on their spending,” said Anna Zhou, an economist at the Bank of America Institute.
Still economists see the chance for a soft landing. “We don’t think … the slowdown process will be as dramatic as some people have feared,” said Zhou. “And it will be a gradual process.”
Watch the video above to learn how U.S. consumer spending has so far fended off a recession.
Last October, I returned to London after working abroad for nearly a year in Central America and Southeast Asia.
Finding an apartment on a budget wasn’t easy. The average cost of a one-bedroom in Southwark, a borough in South London, is around $1,850 a month. That’s more than 75% of my income as an architectural designer.
At 28, my goal is to save up to buy a house of my own one day.But I didn’t want to move to the outskirts of the city, so I started looking into the possibility of living in a skip — or, as it’s called in the U.S., a dumpster.
Harrison’s tiny home sits on an empty lot in South London. The land was granted to him by an arts charity called Antepavilion.
I run a small architecture company called CAUKIN Studio. We’ve done work with SKIP Gallery, which commissions emerging artists to create artwork in the confines of a dumpster.
After hearing about my project, an arts charity called Antepavilion granted me an empty, grassy lot in Southwark to put my house on. I currently rent the dumpster base from a waste management company for only $62 a month (although I have not been charged for it yet).
The building process, which began in December 2022, took three weeks. I had worked on similar projects in the past as an architect, so I had all the tools and knowledge I needed. On most days, my friends would come by and help.
The tiny home can be transported like a dumpster, so moving it from the construction site to the grassy lot was easy.
Photo: Gergana Popova for CNBC Make It
It cost me roughly $5,000 to build the home:
Building supplies (including timber, insulation and fixings): $4,620
Interior furnishings (including storage and foam mattress): $380
I used my savings to fund the expenses, and paid movers $635 to transport the dumpster from the manufacturer to the construction site, then to the lot where it stands today.
My electricity bill is so small that it is included in my land sponsorship, and my water supply consists of a hose pipe that runs from a neighbor’s property.
Harrison says it’s hard to wash up in his tiny home. He gets his water from a hose outside, and stores it in a glass jar.
Photo: Gergana Popova for CNBC Make It
For Wi-Fi, I use a dongle connected to mobile data to watch Netflix and take Zoom calls on my laptop. This costs $20 a month.
The base of the dumpster is only 25 square feet, so I had to make the most out of the volume to make the space livable.
The home’s entrance is up a small ladder and through a hatch door.
Photo: Gergana Popova for CNBC Make It
I have four built-in wooden boxes to put my clothes in. I’ve always lived a minimal lifestyle and traveled a lot for work, so the limited storage space works for me. I didn’t have to give away any items.
Up above is my raised, mezzanine-style bed.
An arched roof gives Harrison plenty of room in his mezzanine-style double bed.
Photo: Gergana Popova for CNBC Make It
On the other end is the kitchen. I have an eight-can portable mini fridge, a small sink and an induction cooktop.
Since kitchen space is limited, Harrison mostly cooks one-pot meals and often eats out with friends.
Photo: Gergana Popova for CNBC Make It
Windows on both sides of the home provide plenty of natural light and ventilation, making the space feel less claustrophobic.
The toilet is outside, so I need to leave my house every time I use it. There’s no shower either, so I’ll be using the one at work and at the gym for the foreseeable future. I do my laundry at a laundromat.
I’ve been living here for a few months now, and managing its inconveniences has slowly gotten easier.
But this is a great location in London. It’s a 15-minute bike ride to work, and I love spending my free time exploring the area or meeting up with friends.
My biggest challenging has been adjusting to all the attention. Many people stop by because they’ve seen me on the news.
The tiny home allows Harrison to live alone in a city where that’s a luxury, and has amplified the conversation about rent prices in London.
Photo: Gergana Popova for CNBC Make It
With its ups and downs, I’ve turned my living situation into an art piece. It shines light on the absurdity of London’s housing crisis in a way that makes people smile and think.
This has been a unique experience, and I’m grateful that it was sponsored. But I don’t recommend replicating it. Ihope that I can move out soon, but I certainly won’t be swapping it for no savings and a small, damp room. It’s weirdly comfortable.
Harrison Marshall is the co-founder of CAUKIN Studio, a design studio that specializes in community and impact-based projects. He holds a master’s degree in architecture and has worked on more than 50 projects worldwide. Harrison combines his background with his passion for social impact to create experiences that spark joy and thought. Follow him on Instagram @caukinstudio and @theskiphouse.
As luxury stocks make waves overseas, State Street Global Advisors believes investors should consider European ETFs if they want to capture the gains from their outperformance.
Matt Bartolini, the firm’s head of SPDR Americas research, finds three reasons why the backdrop is becoming particularly attractive. First and second on his list: valuations and earnings upgrades.
“That’s completely different than what we saw for U.S. firms,” he told CNBC’s Bob Pisani on “ETF Edge” this week.
Bartolini lists price momentum as a third driver of the investor shift.
His SPDR Euro Stoxx 50 ETF (FEZ) is considered a broad European ETF. The ETF is up about 20% so far this year, with a price increase of nearly 1.2% since the beginning of January.
While the fund’s top holding is LVMH at 7.29%, according to the company’s website, Bartolini contends the shift applies beyond luxury stocks and to lower-end consumer stocks.
His firm’s website lists French cosmetics companyL’Oreal — which is up almost 30% this year — as another one of his fund’s major holdings. It also shows FEZ allocating more than 20% to consumer discretionary — 2.5% higher than its second-most allocated industry.
“That’s on a broad-based level,” he said. “So, basically, buy Europe and sell U.S. has been some of the trade that we have seen.”
FEZ closed the week down 0.41% but ended the month up more than 3.1%.
The U.S. personal savings rate remains below its historical average, according to the U.S. Bureau of Economic Analysis.
The seasonally adjusted annual rate of personal saving was 4.6% in February. That’s well below the average annual rate of more than 8%, according to the data, which traces back to 1959. In June 2022, the rate had dipped to 2.7%, a 15-year low.
This was a large fall from periods of the pandemic when households across the country were saving as much as 30% of their monthly income.
“Something like $2 [trillion] to $2.5 trillion above what we would have otherwise expected were saved by American households,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions.
Collectively, Americans have trillions in excess savings compared with expectations leading up to the pandemic, according to Federal Reserve economists.
“That really has helped to buoy the economy,” said Shelley Stewart, a senior partner at McKinsey & Company, “particularly in a place like the U.S., where consumption is such a big part of GDP.”
Federal Reserve economists note that the lion’s share of excess savings is concentrated in the top half of households by income.
But the lower half built up savings in this time, too, according to the central bank’s October note. They noted at the time that the lower half of earners had roughly $5,500 in excess savings per household. Experts believe these stockpiles of cash will begin to dwindle in 2023.
In the months since, headline inflation stayed stubbornly high, at an annual rate of 5% in March. This weighs on consumer spending, while devaluing savings held in low return positions such as cash.
Watch the video above to learn about how the personal savings rate affects you and the wider economy.
Americans started the 2020s with a personal savings boom. The trillions in excess personal savings built up in the pandemic are beginning to vanish amid high inflation, according to Federal Reserve economists. The annual savings rate fell to a 15-year low in 2022. It started a recovery in 2023, but remains well below long-term trends. Despite this slowdown in saving, consumer spending has remained robust, keeping the U.S. from recession.
Solo travel is one of my favorite perks of being single. Of course, anyone can book a trip by themselves, but I’ve found my coupled friends are less likely to leave their significant other at home, and not without reason.
Plus, like the everyday costs that rack up quickly for singles, solo travel can often be more expensive than going with a companion. That’s because hotels and tour operators mostly set room rates based on double occupancy, which means you’re often on the hook for a fee intended for two people, even if it’s just you.
Smaller pay combined with the so-called “singles tax” can make traveling alone as a woman financially intimidating, but I’m living proof you can have a beautiful adventure without breaking the bank. I’ve traveled internationally on my own four times over the last few years — to Costa Rica, Tunisia and to Mexico twice.
“I’m on vacation” is my preferred excuse to spend more money, and I’m a firm believer that relaxing on your budget is part of the benefit of going on vacation in the first place. I give myself room to do this by planning ahead and setting limits on my indulgences so I don’t come back tanned, rested and financially ruined.
Booking hotels, tours and entertainment ahead of time helps me keep my trip spending in check because I’m not tallying up expenses in my head when I’m on the go. I’m able to sit down with my bank account open, add up all the things I want to do and see if I can afford each item or where I need to cut back.
Planning a financially sound getaway might mean making compromises, such as switching to a cheaper hotel so I can spend more on attractions. On my most recent trip to Tunisia, I paid extra for a more comfortable seat on my seven-hour flight. That meant skipping a few souvenirs I might have liked to buy, but the legroom was worth it.
People travel for different reasons, and when you’re in a group it can get tricky to make sure everyone gets to do what they want. Solo travel is the opposite — you get to do anything you want. If that means you spend 75% of the trip eating at new restaurants, so be it. But if you’d rather check out the shopping scene, it may mean sticking to low-cost meals.
My solo trip to Tulum, Mexico, last January included plenty of time for lying on the beach, which meant I spent less on excursions and achieved my goal of soaking up as much sun as possible before I went back to New York.
The destination itself might even be a chance for you to save money. If you’re less interested in touristy locations than someone you’d otherwise travel with, you might score cheaper flights and accommodations in less frequented spots.
If you don’t have your heart set on a specific destination, you can set a budget and explore options that fit into it. I use Google Flights to get inspiration and compare trip prices when I’m not certain where I want to go.
You can input dates or the desired length of your trip and even filter for flights in your price range to see what’s available globally.
One of my biggest pet peeves when splitting a bill, whether it’s for dinner or a few days in an Airbnb, is when my friend offers to pay up front and I pay them back. It’s easy enough with all the peer-to-peer payment options available these days, but it means I don’t get to rack up airline miles by using my credit card.
It’s certainly not the end of the world — it might even save me money on interest if I don’t pay off my credit card right away. But I’m greedy when it comes to credit card rewards.
That’s another benefit of solo travel — I can pay how I want. When I’m planning a trip and giving myself time to save for it, I use a sinking fund that I store in a high-yield savings account. “Sinking fund” is just a term for savings that you plan to use on a specific thing, as opposed to your emergency fund, which is for the unexpected.
My trip to Tunisia was a dream come true, complete with a stop in Sidi Bou Said.
Kamaron McNair
In the past, I’ve used cash and envelopes labeled “Vacation” or “Tunisia” to stash money for an upcoming trip. Nowadays I keep it mostly in the bank. My bank lets me divide my savings account into “buckets” that function as digital envelopes I can label to motivate me to save.
I aim to save enough for the trip before I start booking, then do all the pre-paying I mentioned using my credit card. I try to pay it off right away with the money from my sinking fund. This way, I get some miles I’ll use later, but I’m not carelessly racking up debt.
When I’m on a trip, I try to rely on cash, for several reasons.
It helps me stay on budget, because I see my money disappear in real time instead of having to log on and check my account.
I’ve found that I often pay a better price when paying cash in the local currency than when using a card. It’s usually a small percentage difference, but it can add up with a few swipes.
Debit and credit card accessibility may not be as ubiquitous as in the U.S.
The first time I traveled by myself, I made the mistake of not bringing any cash and learned when I got to my hotel in Cancún that the nearest ATM was not exactly close. I went to three separate gas stations struggling to come up with the Spanish words for ATM before finally finding un cajero automatico.
Thankfully, it wasn’t an emergency, and Cancún isn’t an ATM desert. But for a directionally challenged, first-time solo traveler, it was a frustrating moment.
Though I consider myself an experienced traveler, plan ahead and give myself room for error, I still get stressed and anxious about plenty of aspects of a trip. I’ve missed one flight in my life and the fear of experiencing that again has scarred me.
I’ve found that if I’m able to reasonably pay for something that is going to ease my worries and allow me to better enjoy my trip, it’s worth doing. That might mean taking an Uber to the airport instead of relying on public transportation. For some trips, especially during the pandemic, I’ve paid for travel insurance in case I got sick and had to extend my stay.
Recently, on an overnight layover in Morocco, it meant paying for a hotel instead of hoping the airline could provide free lodging.
The point is, your trip is an investment. You’re aiming to learn something, see something new or experience a new culture — worrying about traffic or delays or even safety can cut into those “returns.” It’s worth working these kinds of costs into your budget.
Get CNBC’s free Warren Buffett Guide to Investing, which distills the billionaire’s No. 1 best piece of advice for regular investors, do’s and don’ts, and three key investing principles into a clear and simple guidebook.
In 2015, my family and I took a vacation to Lisbon, Portugal. We immediately fell in love with the beautiful weather, the rattle of cable cars, and the welcoming locals.
Just two days in, we decided to leave the U.S. and retire in Portugal — and it was one of the best decisions we’ve made. We spend far less money on necessities in Lisbon than we did in Washington, D.C. We’ve also found that fun leisure and food experiences are just as, if not more, affordable.
On weekends when I’m out and about, I spend less than $40 a day:
Lisbon is paradise for breakfast lovers. When my wife and I are in the mood for something light, our favorite spot is the Copenhagen Coffee Lab in Principé Real, a lively neighborhood in Lisbon.
For a bigger breakfast, we go to the nearby Seagull Method Café, where we order cottage cheese and fruit pancakes for $6.31 a plate.
A one-hour train ride from Lisbon’s historic Cais do Sodré station to the fishing village of Cascais costs $4.92 (round trip).
Cascais is picturesque, with tiled buildings and black and white cobblestone plazas. It’s a gorgeous place to spend the morning.
Downtown Cascais has plenty to look at, including beautiful tilework and architecture.
Photo: Alex Trias
Near the center of town is the Jardim dos Frangos (translated to the “chicken garden”) where peacocks, roosters and hens, followed by their chicks, wander freely through the pine and shaggy eucalyptus trees.
After walking around, my wife and I rent bicycles for $6.42 and ride alongside the ocean.
The bike path to Guincho Beach offers amazing views of the region’s cliffs and the Atlantic Ocean.
Photo: Alex Trias
The bike path is relatively flat and takes us past the scenic cliffs of Boca do Inferno and a collection of shops and restaurants to the rough waters of Guincho Beach.
From there, we hike through the dunes and rocky cliffs, or sit and read a book. We might also pack food and have a picnic.
Once an old industrial complex for textiles, LX Factory is now a collection of shops, restaurants and open-air kiosks. We like to stop by on weekends, and it is conveniently located on the train ride back from Cascais.
The LX factory is the perfect place to shop for Portuguese craftsmanship, or just to sit and have lunch.
Photo: Alex Trias
You won’t find brand name items at LX. From clothing to furniture, most things for sale are designed and produced in Portugal.
Our daughter loves bargain hunting at the Feira da Ladra, a popular flea market located within the Alfama district of Lisbon. The area is built on a steep hill filled with narrow, winding cobblestone streets, and it’s the perfect place to shop for antiques.
My favorite market in Principe Real is a cornucopia of antiques and art.
Photo: Alex Trias
I also enjoy the weekend flea market in Principé Real, where you’ll find plenty of delicious artisanal honey, cheese and cured sausages.
My wife and I love to cook. We find gourmet ingredients at the Comida Independente outdoor market, which is open on Saturdays, and the Time Out Mercado.
Both are located near Lisbon’s Cais Sodre train station.
Lisbon’s Time Out Market, the Mercado da Ribeira, is situated near the Cais Sodre train station and the banks of the Tagus river.
Photo: Alex Trias
For a quick and easy meal of gourmet mushrooms and eggs, I buy:
A quarter kilo of freshly picked chanterelle mushrooms: $7.49
Farm fresh organic eggs: $3.19
A spray of truffle oil: $3.19
Seaweed caviar: $4.28
I’ll serve the meal with a loaf of fresh bread from Gleba, a nearby bakery. Their loaves are made with home-grown heirloom strains of wheat for $5.29 per loaf.
For an interesting twist, I’ll create a special bread topping. I mix butter ($2.30) with white miso paste ($5.23) and seaweed crisps ($1.60).
And a bottle of Portuguese white wine for $4.80 goes well with virtually any meal.
Our favorite dessert spot, the Gelateria Nannarella, is a short walk from our apartment. It is well-known for its exceptional sorbets and gelatos. A small serving costs $3.21, with flavors like lemon and basil, stracciatella and, of course, chocolate.
In Lisbon, gelato is eaten throughout the day as a snack as well as a dessert, so there is almost always a line. But, like most good things in life, it’s well worth the wait.
Alex Trias is a retired attorney. He and his wife and daughter have been living in Portugal since 2015. He is the author of the “Investment Pancake” series on SeekingAlpha.com and has published nearly 500 articles about tax planning, investing, early retirement, and where to find the best meals in Lisbon.
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:
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.
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.
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.
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.
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.
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.
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.
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.
As the Federal Reserve continues to hike interest rates, you may assume you’re earning more on the money in your savings account.
But that may not be the case.
related investing news
Carolyn McClanahan, a certified financial planner at Life Planning Partners in Jacksonville, Florida, was recently surprised when a client told her he was hardly making any interest on his cash.
The interest rate on his Capital One account was 0.3%, far lower than the 3.3% annual percentage yield the firm is currently advertising for new savings accounts. McClanahan discovered the same situation when she checked her own Capital One account.
“I was not happy,” McClanahan said.
While a call to Capital One’s customer service revealed it was possible to access the higher interest rate by opening a new account, McClanahan decided it was better to move the money elsewhere.
“I’ve been recommending Capital One for a long time, and they are now off my list,” McClanahan said.
Capital One did not immediately respond to requests for comment.
The Federal Reserve has raised the federal funds rate to the highest levels since 2007. While that makes borrowing more expensive for credit cards and other accounts, the expectation is that it will also push up the interest consumers can make on their cash savings.
Some online savings accounts are touting rates as high as 4%. Some certificates of deposit, or CDs, may provide higher rates, depending on the term.
Rates are expected to climb even higher as Federal Reserve poised to continue its hiking cycle in 2023. Bankrate.com predicts top-yielding national money market and savings accounts could climb to 5.25% by year end.
Yet like McClanahan, others may be in for a surprise if they realize their accounts are not keeping up with those top rates.
“Consumers need to check their accounts at least once a month to see what their accounts are earning,” said Ken Tumin, senior industry analyst at LendingTree and founder of Deposit Accounts.
“Don’t assume it’s the latest greatest rate,” he said.
Following Fed rate hikes, online savings accounts should generally be in the ballpark of the federal funds rate within about a month, according to Tumin.
There are signs that may help consumers spot when they may get shortchanged on rates.
Watch for changing account names, Tumin said. If a bank is touting savings offers under a new account name from when you opened your account, the terms you are subject to might not be the latest.
If you see a new account, often you can request to be upgraded.
“That’s an easy way to get the benefit of the higher rate,” Tumin said.
Also be more vigilant when a bank, such as Emigrant Bank, has more than one online division, Tumin said. In September, Emigrant’s Dollar Savings Direct division was the first to offer 3% on an account, which eventually climbed to 3.5%.
Now, however, its My Savings Direct division has the highest rate for an online account, with 4.35%, Tumin noted.
CAIRO — An Iranian lawmaker said Sunday that Iran’s government is “paying attention to the people’s real demands,” state media reported, a day after a top official suggested that the country’s morality police whose conduct helped trigger months of protests has been shut down.
The role of the morality police, which enforces veiling laws, came under scrutiny after a detainee, 22-year-old Mahsa Amini, died in its custody in mid-September. Amini had been held for allegedly violating the Islamic Republic’s strict dress codes. Her death unleashed a wave of unrest that has grown into calls for the downfall of Iran’s clerical rulers.
Iran’s chief prosecutor Mohamed Jafar Montazeri said on Saturday the morality police “had been closed,” the semi-official news agency ISNA reported. The agency did not provide details, and state media hasn’t reported such a purported decision.
In a report carried by ISNA on Sunday, lawmaker Nezamoddin Mousavi signaled a less confrontational approach toward the protests.
“Both the administration and parliament insisted that paying attention to the people’s demand that is mainly economic is the best way for achieving stability and confronting the riots,” he said, following a closed meeting with several senior Iranian officials, including President Ebrahim Raisi.
Mousavi did not address the reported closure of the morality police.
The Associated Press has been unable to confirm the current status of the force, established in 2005 with the task of arresting people who violate the country’s Islamic dress code.
Since September, there has been a reported decline in the number of morality police officers across Iranian cities and an increase in women walking in public without headscarves, contrary to Iranian law.
Montazeri, the chief prosecutor, provided no further details about the future of the morality police or if its closure was nationwide and permanent. However he added that Iran’s judiciary will ‘‘continue to monitor behavior at the community level.’’
In a report by ISNA on Friday, Montazeri was quoted as saying that the government was reviewing the mandatory hijab law. “We are working fast on the issue of hijab and we are doing our best to come up with a thoughtful solution to deal with this phenomenon that hurts everyone’s heart,” said Montazeri, without offering details.
Saturday’s announcement could signal an attempt to appease the public and find a way to end the protests in which, according to rights groups, at least 470 people were killed. More than 18,000 people have been arrested in the protests and the violent security force crackdown that followed, according to Human Rights Activists in Iran, a group monitoring the demonstrations.
Ali Alfoneh, a senior fellow at the Arab Gulf States Institute in Washington, said Montazeri’s statement about closing the morality police could be an attempt to pacify domestic unrest without making real concessions to protesters.
‘‘The secular middle class loathes the organization (morality police) for restricting personal freedoms,” said Alfoneh. On the other hand, the “underprivileged and socially conservative class resents how they conveniently keep away from enforcing the hijab legislation” in wealthier areas of Iran’s cities.
When asked about Montazeri’s statement, Iranian Foreign Minister Hossein Amirabdollahian gave no direct answer. ‘‘Be sure that in Iran, within the framework of democracy and freedom, which very clearly exists in Iran, everything is going very well,’’ Amirabdollahian said, speaking during a visit to Belgrade, Serbia.
The anti-government demonstrations, now in their third month, have shown no sign of stopping despite a violent crackdown. Protesters say they are fed up after decades of social and political repression, including a strict dress code imposed on women. Young women continue to play a leading role in the protests, stripping off the mandatory Islamic headscarf to express their rejection of clerical rule.
After the outbreak of the protests, the Iranian government hadn’t appeared willing to heed the protesters’ demands. It has continued to crack down on protesters, including sentencing at least seven arrested protesters to death. Authorities continue to blame the unrest on hostile foreign powers, without providing evidence.
But in recent days, Iranian state media platforms seemed to be adopting a more conciliatory tone, expressing a desire to engage with the problems of the Iranian people.
NEW YORK — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to score more discounts on gifts and other items that have ballooned in price because of high inflation.
Cyber Monday is expected to remain the year’s biggest online shopping day and rake in up to $11.6 billion in sales, according to Adobe Analytics, which tracks transactions at over 85 of the top 100 U.S. online stores. That forecast represents a jump from the $10.7 billion consumers spent last year.
Adobe’s numbers are not adjusted for inflation, but the company says demand is growing even when inflation is factored in. Some analysts have said top line numbers will be boosted by higher prices and the amount of items consumers purchase could remain unchanged — or even fall — compared to prior years. Profit margins are also expected to be tight for retailers offering deeper discounts to attract budget-conscious consumers and clear out their bloated inventories.
Shoppers spent a record $9.12 billion online on Black Friday, up 2.3% from last year, according to Adobe. E-commerce activity continued to be strong over the weekend, with $9.55 billion in online sales.
Salesforce, which also tracks spending, said their estimates showed online sales in the U.S. hit $15 billion on Friday and $17.2 billion over the weekend, with an average discount rate of 30% on products. Electronics, active wear, toys and health and beauty items were among those that provided a big boost, the two groups said.
CONSUMERS ARE SPENDING CAUTIOUSLY
Mastercard SpendingPulse, which tracks spending across all types of payments including cash and credit card, said that overall sales on Black Friday rose 12% from the year-ago. Sales at physical stores rose 12%, while online sales were up 14%.
RetailNext, which captures sales and traffic via cameras reported that store traffic rose 7% on Black Friday, while sales at physical stores improved 0.1% from a year ago. However, spending per customer dropped nearly 7% as cautious shoppers did more browsing than buying. Another company that tracks store traffic — Sensormatic Solutions — said store traffic was up 2.9% on Black Friday compared to a year ago.
“Shoppers are being more thoughtful, but they are going to more than a few retailers to be able to make a determination of what they are going to buy this year,” said Brian Field, Sensormatic’s global leader of retail consulting and analytics.
Danny Groner, a 39-year-old who lives in New York City, said he and his wife want to get a new TV to replace one they’ve had for about seven years. He spent some time on Monday searching for deals online and found some good discounts. Still, he says he wants to be intentional about what he buys and doesn’t mind spending a bit more for the right product.
Overall, online spending has remained resilient in the past few weeks as eager shoppers buy more items on credit and embrace “buy now, pay later” services that lack interest charges but carry late fees.
In the first three weeks of November, online sales were essentially flat compared with last year, according to Adobe. It said the modest uptick shows consumers have a strong appetite for holiday shopping amid uncertainty about the economy.
Still, some major retailers are feeling a shift. Target, Macy’s and Kohl’s said this month they’ve seen a slowdown in consumer spending in the past few weeks. The exception was Walmart, which reported higher sales in its third quarter and raised its earnings outlook.
“We’re seeing that inflation is starting to really hit the wallet and that consumers are starting to amass more debt at this point,” said Guru Hariharan, founder and CEO of retail e-commerce management firm CommerceIQ, adding there’s more pressure on consumers to purchase cheaper alternatives.
SHIFTING DEMAND
This year’s Cyber Monday also comes amid a wider e-commerce slowdown affecting online retailers that saw a boom in sales during most of the COVID-19 pandemic. Consumers who feared leaving their homes and embraced e-commerce during the pandemic are heading back to physical stores in greater numbers this year as normalcy returns.
The National Retail Federation said its recent survey showed a 3% uptick in the number of Black Friday shoppers planning to go to stores. It expects 63.9 million consumers to shop online during Cyber Monday, compared to 77 million last year.
Amazon saw its retail business thrive during most of the pandemic, but much of the demand waned as the worst of the pandemic eased. To deal with the change, the company has been scaling back its warehouse expansion plans and is cutting costs by axing some of its projects. It’s also following in the steps of other tech companies and implementing mass layoffs in its corporate ranks. Amazon CEO Andy Jassy said the company will continue to cut jobs until early next year.
Shopify, a company which helps businesses set up e-commerce websites and also offers offline software, laid off 10% of its staff this summer.
The company said Monday that its merchants have surpassed $5.1 billion in global sales since the start of Black Friday in New Zealand. And spending per U.S. customer went up $5 compared to last year, said Shopify President Harley Finkelstein.
Despite the bump, Finkelstein said shoppers were more intentional about their spending this year and waiting for discounts before making a purchase.
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AP Business Writer Anne D’Innocenzio contributed to this report.
NEW YORK — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to score more discounts on gifts and other items that have ballooned in price because of high inflation.
Cyber Monday is expected to remain the year’s biggest online shopping day and rake in up to $11.6 billion in sales, according to Adobe Analytics, which tracks transactions at over 85 of the top 100 U.S. online stores. That forecast represents a jump from the $10.7 billion consumers spent last year.
Adobe’s numbers are not adjusted for inflation, but it says demand is growing even when inflation is factored in. Some analysts have said top line numbers will be boosted by higher prices and the amount of items consumers purchase could remain unchanged — or even fall — compared to prior years. Profit margins are also expected to be tight for retailers offering deeper discounts to attract budget-conscious consumers and clear out their bloated inventories.
Shoppers spent a record $9.12 billion online on Black Friday, up 2.3% from last year, according to Adobe. E-commerce activity continued to be strong over the weekend, with $9.55 billion in online sales.
Salesforce, which also tracks spending, said their estimates showed online sales in the U.S. hit $15 billion on Friday and $17.2 billion over the weekend, with an average discount rate of 30% on products. Electronics, active wear, toys and health and beauty items were among those that provided a big boost, the two groups said.
Meanwhile, consumers who feared leaving their homes and embraced e-commerce during the pandemic are heading back to physical stores in greater numbers this year as normalcy returns. The National Retail Federation said its recent survey showed a 3% uptick in the number of Black Friday shoppers planning to go to stores. It expects 63.9 million consumers to shop online during Cyber Monday, compared to 77 million last year.
CONSUMERS ARE SPENDING CAUTIOUSLY
Mastercard SpendingPulse, which tracks spending across all types of payments including cash and credit card, said that overall sales on Black Friday rose 12% from the year-ago. Sales at physical stores rose 12%, while online sales were up 14%.
RetailNext, which captures sales and traffic via sensors, reported that store traffic rose 7% on Black Friday, while sales at physical stores improved 0.1% from a year ago. However, spending per customer dropped nearly 7% as cautious shoppers did more browsing than buying. Another company that tracks store traffic — Sensormatic Solutions— said store traffic was up 2.9% on Black Friday compared to a year ago.
“Shoppers are being more thoughtful, but they are going to more than a few retailers to be able to make a determination of what they are going to buy this year,” said Brian Field, Sensormatic’s global leader of retail consulting and analytics.
Overall, online spending has remained resilient in the past few weeks as eager shoppers buy more items on credit and embrace “buy now, pay later” services that lack interest charges but carry late fees.
In the first three weeks of November, online sales were essentially flat compared with last year, according to Adobe. It said the modest uptick shows consumers have a strong appetite for holiday shopping amid uncertainty about the economy.
Still, some major retailers are feeling a shift. Target, Macy’s and Kohl’s said this month they’ve seen a slowdown in consumer spending in the past few weeks. The exception was Walmart, which reported higher sales in its third quarter and raised its earnings outlook.
“We’re seeing that inflation is starting to really hit the wallet and that consumers are starting to amass more debt at this point,” said Guru Hariharan, founder and CEO of retail e-commerce management firm CommerceIQ, adding there’s more pressure on consumers to purchase cheaper alternatives.
SHIFTING DEMAND
This year’s Cyber Monday also comes amid a wider e-commerce slowdown affecting online retailers that saw a boom in sales during most of the COVID-19 pandemic. Amazon, for example, raked in record revenue but much of the demand has waned as the worst of the pandemic eased and consumers felt more comfortable shopping in stores.
To deal with the change, the company has been scaling back its warehouse expansion plans and is cutting costs by axing some of its projects. It’s also following in the steps of other tech companies and implementing mass layoffs in its corporate ranks. Amazon CEO Andy Jassy said the company will continue to cut jobs until early next year.
Shopify, another company which helps businesses set up e-commerce websites, laid off 10% of its staff this summer.
