Monthly Archives: July 2021

Also more appealing than ever is the stock market, which made a quick comeback after its early pandemic dive and flourished even as the economy continued to founder. Suddenly, investing your money seemed like the smartest (and safest) thing to do with it, even if you didnt have much. And with the rising popularity of retail investment platforms like Robinhood, many novice investors got curious.

A lot of people started reaching out to ask about cryptocurrency, and I was like, OK, we can talk about that, but first lets talk about index funds, Ms. Souffrant said. I think you should have the basics down first before you get into things like crypto. Do you know what a Roth I.R.A. is? Are you investing your 401(k)?

For Kayla Marshall, a 28-year-old finance manager for a private university in Florida, the past year brought a new set of daunting responsibilities when she moved out of her mothers house and bought her first home in Brevard County, Fla.

I needed to feel like I was going to be OK if everything fell out from underneath me, Ms. Marshall said. As a single mother of a 5-year-old, she also had a specific set of financial needs that often werent addressed in many traditional personal finance blogs or books. She finally got some answers by joining Facebook groups with women who were discussing FIRE and financial independence.

A year later, she may not be on track to retire early, but shes in better financial shape than ever before.

Ive learned to find the pleasures in life more modestly, she said. I still love to travel, but now we go camping instead of spending money on a hotel room or an amusement park. Ive realized that my son is just as happy going for a walk on the beach as he is in Disney World. Paring back on trips and other discretionary expenses has allowed her to pay off about $10,000 of debt since 2020.

Financial preparedness didnt inoculate anyone completely from the trials of the pandemic but it certainly helped. Jess Fickett, 34, who lives in Denver and co-runs the personal finance website Bitches Get Riches, was laid off from her book publishing job in mid-2020.

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How The Pandemic Forged New FIRE Followers, With a Difference - The New York Times

ST. LOUIS St. Louis CITY SC welcomed their newest founding partner and official banking sponsor Wednesday in Together Credit Union.

St. Louis CITYs CEO Carolyn Kindle Betz, VP of Community Relations Khalia Collierhosted the announcement made at 423 Lynch Street.

Focused on community involvement, community collaboration and financial empowerment .

A big welcome to @together_cu our newest Founding Partner and Official Banking Partner of the club! pic.twitter.com/4nRumtRoU2

St. Louis CITY SC said the partnership will bring opportunities to underserved St. Louis neighborhoods through financial literacy programming.

Together Credit Union has been in the St. Louis area for over 80 years and has 13 branches in the area to date.

Our partnership with Together Credit Union is extremely special to the club because of our shared values and commitment to the city, Betz said. How incredible is it that both of St. Louis CITY SCs first two founding partners are so deeply rooted in the St. Louis community? We couldnt ask for anything better than that.

Through our partnership with St. Louis CITY, we hope to broaden our outreach efforts by creating sustainable, long-term financial wellness programs, Together Credit Unions Chief Operating Officer Tom Kraus said. Our goal is to help young people and their families on the path to financial independence and success.

The credit union will now offer St. Louis CITY SC-branded debit and credit cards for their members. Those with the cards will receive special stadium offers and access to events.

The Together Credit Union will also sponsor the Together Credit Union Club on the stadiums main concourse. St. Louis CITY SC ticket holders will be able to hang out there on game days.

The Together Credit Union Club will provide a one-of-a-kind experience inside the stadium where fans can come together on matchday to enjoy deliciousSTLMadefood and beverages reflective of the diverse culinary flavors of St. Louis, Kraus said.

Most recently, St. Louis CITY SC announced local chef Gerard Craft as their Flavor Officer. Craft will work with area chefs and the teams fans to create the clubs in-stadium food experience.

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Together Credit Union is St. Louis CITY SCs official banking sponsor - KTVI Fox 2 St. Louis

You'veall probably heard of influencerson social media. But do you know much aboutfinfluencers?

After taking off in the US, they've been gainingpopularity in Australia in recent years.

Basically, they're people who use social media as a platform to share advice on anything from budgeting to buying a house, to investing.

At best, many argue they're empowering Gen Z, millennials and first-time investors to become financially savvy. After all, financial advisers can cost many thousands of dollars, and we don't all have that kind of money to spend.

At worst,they're sometimes accused of spruiking particular products for their own financial gain. And that means that when you're scrolling through Instagram or Tik Tok, you're getting financial tips that aren't necessarily in your best interests.

So why are we even talking about this?

Well, the laws around providing unlicensed financial advice are murky and recently there have been calls for more regulation and oversight.

We dived into the topic to find out what you need to consider when you're swiping through their content.

The rise of the finfluencer has coincided with a spike in new millennial and Gen Z investors piling into the share market.

Instagram

It's estimated about 435,000 new investors bought stocks for the first time last year. Eighteen per cent were younger than 25, while 49 per cent were between 25 and 39, according to research house Investment Trends.

On Tik Tok, the hashtag #FinTokused by finfluencers like Queenie Tan has attracted more than 400 million views, while #stocktock has 1.4 billion, #crypto 4.38 billion, and #cryptocurrency 1.68 billion views.

While Ms Tan doesn't have a finance degree and isn't a licensed financial adviser, she's doing well enough that she's been able to quit her marketing job to focus on creating her online investment content.

"I started my YouTube channel last year during COVID because I saw there were a lot of people struggling financially during that time," she explains.

"I don't come from a rich family, and I felt like I needed to share information and things that I've learned over the past couple of years."

The 23-year-old makes up to $5,000 a month from the advertising on her YouTube videos, which she films in her lounge room, as well as from partnerships with banks and investment platforms.

When Australians are asked whom they trust,their answer is near unanimous: definitelynotsocial media influencers.

She has 17,900followers on YouTube, 20,300on Instagram and has pulled more than 400,000views from TikTok (where she has about 62,000followers).

Like many finfluencers, Ms Tan is careful to add a disclaimer to her social media posts.

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"I am not a financial adviser and this is not financial or investing advice," she says in one video.

She also regularly refers to federal government websites like MoneySmart.gov.au and the ATO.

Ms Tan says her videos fill a gap in the market.

"It's important for young people to feel inspired and to have money not be a taboo topic. And that's why I wanted to create content for free to help people that maybe don't have thousands of dollars to see a financial adviser," she says.

Angel Zhong, senior lecturer in finance at RMIT, says while most Australian finfluencers do act responsibly, there is a dark side to the phenomenon.

ABC News: John Gunn

She says "pump and dump"scams, in particular, are rife online and are mostly promoted by American social media users.

It's when someone artificially inflates the share price of a stock (or cryptocurrency) by really talking it up in order to increase trading (like what happened with Dogecoin). Once the price increases,scammers sell the shares at aninflated price.

"I've seen people encouraging their followers to borrow on a specific lending platform to invest in a particular cryptocurrency or they've been encouraging some of the followers to quit their job and become a full-time day trader, which is a highly risky behaviour," she says.

It's an issue that's also caught the attention of the regulator, ASIC.

Well, they're proving to be the most popular way for young people to start out trading. Just ask Jasmine, who's using doing it to build up her first home deposit.

It's recently urged young investors to report pump and dump scams as well as users who provide financial advice without a licence.

ASIC says it's seen evidence of complaints about social media users in Australia, but it did not provide further details.

According to Dr Zhong, guidance about online discussions on investment really needs to be updated, as the latest advice was introduced in 2007.

And she says it's really tricky to regulate when, for example, stories on Instagram can disappear after 24 hours.

She says at the end of the day, ASIC risks being left behind.

Finfluencers themselves are concerned about straying into the territory of illegally providing financial advice.

Aleks Nikolic, who goes by the name Broke Girl Wealth on Tik Tok and Instagram, also works as a corporate lawyer.

Instagram

"I recognise that this is a really complex area of law, and I think it is deliberately that way so ASIC can prosecute nefarious actors, but I think that it would be really great to see more clarity from the regulator," she says.

Ms Tan agrees and says most finfluencers will comply with the guidance.

While there may be some people who are trying to deceive followers, people like Aleks and I are referring people to factual information," she says.

However, Ms Nikolic is concerned a crackdown by the regulator could scare some people off sharing their personal finance journey.

"It is such a valuable thing, when we know that money for women is actually a really critical factor to financial independence," she says.

Finance Minister Jane Hume has not backed calls for further regulation and says banning finfluencers is not the solution.

"We know that ASIC is looking at this space right now and reassessing the role of finfluencers. But there is an element of buyer beware," she explains.

"It's important that [when] taking any information from social media that you check the credibility of the source. And of course with financial advice, that means is this person licensed to give me this information?"

Senator Hume says people offering advice about personal investments at the pub, or a taxi driver giving stock tips, is nothing new.

"We've seen that forever and a day And that's very different from recommending a financial product, or selling a financial product and giving financial advice, which is a clear breach of the law," she adds.

It's a sentiment the financial planning industry, which came under fire during the banking Royal Comission,rejects.

"If you're on social media, you can get out to hundreds, potentially thousands and potentially millions of followers who are going to take on board that advice. We're looking at a completely different situation," says Judith Fox, the CEO of the Stockbrokers and Financial Advisers Association.

Ms Fox says the industry can be trusted and points out that as well as completing a degree, sitting an exam and annual training, the clients of financial advisers are protected by law.

"You [financial advisers] can also have complaints lodged against you. And that means that you are accountable to make sure that you're always fulfilling the clients' best interest. If you're not licensed, none of that applies, which means there's no regulation, no accountability."

But Ms Nikolic saysthe fear from financial advisers was a bit hypocritical.

"We have seen that regulation in and of itself does notalways provide good outcomes," she says.

"What we need is considerate financial consumers, who can do their own research. If we lift people into seeking financial independence, everyone wins."

Dante De Gori, CEO of the Financial Planning Association, agrees with Ms Fox, but he can also see the positives of finfluencers. He says most are not breaking the law.

"There is an element of good for people being engaged in their finances, if it encourages people to do further research on the internet, and possibly even eventually with a trained professional," he says.

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Finfluencers are on the rise, so are they friend or foe? It can be murky territory - ABC News

The vast majority of Americans do not meet commonly held definitions of what it means to be rich in the

The vast majority of Americans do not meet commonly held definitions of what it means to be rich in the U.S.

Respondents to Schwabs 2021 Modern Wealth Survey said a net worth of $1.9 million qualifies a person as wealthy. The average net worth of U.S. households, however, is less than half of that.

But wealth is in the eye of the beholder a persons location, career, community, background and so many other factors can influence his or her perception of wealth. Those perceptions may be evolving as new generations enter adulthood and redefine success.

The generations of today, Gen Y and Gen Z, they dont think about wealth and success the way boomers did, especially as it relates to finances, says Penny Phillips, president and co-founder of Journey Strategic Wealth in New Jersey and California. It was, save my money, make some investments and when Im 65, Ill try to take my first big vacation. Today, success is defined so much more by life experiences and impact and living for today.

[READ: Top Money Lessons From the Pandemic.]

Indeed, the annual Schwab survey found that respondents are lowering the bar for what they consider wealthy. Compared to 2021 standards, respondents to the 2020 survey described the threshold for wealth as being a net worth of $2.6 million.

The recent coronavirus pandemic may also have affected how consumers perceive wealth and shed new light on individual priorities amid the years financial uncertainty and stress.

With whats happened in the world in the pandemic, its reframed priorities and brought about different emotions and behaviors, says Amy Richardson, a certified financial planner at Schwab, on the companys Intelligent Portfolios Premium team. There might have been a shift in how people perceive what makes them happy and how much it takes to achieve financial independence.

Net Worth vs. Income

Net worth is the sum of an individuals assets, less liabilities. But individuals with high incomes dont necessarily have a net worth to match, and the reverse is true as well.

A lot of people who are wealthy in this country are wealthy not because of income, but because they own assets, they have investments that appreciated, real estate or otherwise, Phillips says, while income funds an individuals lifestyle and day-to-day costs.

An individuals income can also be a measure of wealth.

[Read: How to Calculate Your Net Worth.]

To be in the top tax bracket of 37%, an individual filer must earn at least $523,601 annually, and married taxpayers filing jointly must collectively earn $628,301.

Among the top 5% of earners, the average income was $309,348 in 2018, according to the Economic Policy Institute, a nonprofit think tank; among the top 1%, the average income was $737,697. Meanwhile, the average income in the U.S. in 2018 was $55,412.

Standards of Wealth

For some, no amount of amassed wealth will be enough, and many who do qualify as wealthy by these standards may not see themselves in that light. Others struggling with debt or unemployment may see these standards of wealth and feel a sense of defeat.

Understanding how you compare to your peers can be an opportunity to learn about money management and positive financial habits, experts say. They advise taking cues from co-workers and competitors on issues of salary, for example, and setting net worth goals that consider the possibilities seen in peers as well as your unique circumstances.

[See: Money Moves You Will Be Thankful For.]

But Eric Pierre, CEO, owner and principal of Pierre Accounting in Texas, says when it comes to money, this saying holds true: Comparison is the thief of joy.

Different people make money in different ways, they have different skills and wealth can go up and down for different reasons, he says. You should set a net worth of what you want it to be, whether its billions or thousands. Set a goal that will make you happy. Stop worrying about what your neighbors doing.

More from U.S. News

Why It Pays to Know Your Net Worth

10 Better Money Habits to Start Now

12 Ways Youre Sabotaging Your Chances of Being Wealthy

Are You Rich? How the Wealthy Are Defined originally appeared on usnews.com

Update 07/13/21: This story was published at an earlier date and has been updated with new information.

Link:

Are You Rich? How the Wealthy Are Defined - WTOP