Fintech (Financial Technology) Investing

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  • “Ignoring technological change in a financial system based upon technology is like a mouse starving to death because someone moved their cheese.”  Chris Skinner
  • The integration of technology with financial services is today’s new and present reality. These technologies not only improve the efficiency and productivity of financial services but also enhance the customer experience.
    • Fintech is a hybrid industry of two nearly opposing parts—finance and technology
    • Fintech’s disruptions may transform not only the way we transact money but the definition of money itself
    • Financial technology is a rapidly growing industry.

    We’re on the precipice of a major evolution in the domestic and global financial services industry. How we send, receive, store, spend, and invest money may undergo a few radical changes.

    Fintech—“financial technology”—is an emerging hybrid industry that brings together legacy financial services and technological innovation. With this combination, the Fintech industry is likely to compete with and disrupt traditional financial services, especially banking.

    Financial technology is the driving force behind the rapid digitization of the world. Fusing the concept of financial services with new technology, fintech companies aim to improve traditional methods of moving money around by offering lower costs, time efficiency and improved access for businesses and consumers to manage their finances.

    The term fintech can describe many processes, such as online money transfers, mobile payments, loan management, or investments, all done digitally without the need for intermediary.

    There are countless examples of how Fintech is reshaping the world of money, commerce and financial services, but they all fall into three primary categories:

    • New tech (such as apps) that allow for monetary transactions online,
    • Digital money which is a blockchain technology-based alternative to cash and
    • The Internet of things (IoT)-enabled credit and loan services (which are replacing and digitizing traditional banking services).

    Naturally, fintech is often described as a disruptor of the finance world. The financial services once recognized as the domains of banks, brokerage houses and desktop computers are now available on mobile phones.

    It’s one thing to invest in a financial asset for the long term. It’s another thing to invest in the very source and infrastructure that may give all financial assets their substance, mobility, and meaning.

    Fintech’s growth is driven by three primary factors:

    1. Cryptocurrencies: Fintech’s fortunes are closely connected to the skyrocketing popularity of cryptocurrencies, such as bitcoin, and blockchain technologies that provide a safe, decentralized platform for them.
    2. Mobile devices: Smartphones, tablets and laptops are used for nearly everything these days, and it’s almost hard to imagine how we lived without them. None of these devices would have been able to thrive without the rise of mobile apps and related technology.
    3. Millennials: This generation is the most tech-savvy in U.S. history. Millennials are the first people to grow up with the internet and smartphones, and they’re on track to become the biggest wage earners, buyers and money managers since baby boomers.

    To invest in this rapidly evolving industry, you might consider paying attention to all the moving parts that feed into the engines of financial progress and disruption. In a way, the current areas of only scratch the proverbial surface of Fintech’s potential.

    1. https://tickertape.tdameritrade.com/investing/what-is-fintech-financial-technology-industry-15946
    2. https://paulmampillyguru.com/america-2-0/fintech-companies/
    3. https://finance.yahoo.com/news/top-10-best-fintech-companies-144738653.html

    BNPL – Buy Now, Pay Later

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    According to Worldpay’s 2020 Global Payments report,“buy now pay later” is the fastest growing e-commerce payment method.

    The idea of buying a product now that is beyond your budget and that to pay for that product later in many ways sounds too good to be true.   However, this is possible by an innovative digital online payment option called Buy Now Pay Later (BNPL).

    BNPL is a form of short-term financing the helps consumers make purchases with a small down payment and wait to pay for the rest of the balance at a later date.

    Buy now, pay later is becoming an increasingly popular way for people to shop, particularly online, since oftentimes these plans don’t charge interest and are much easier for consumers to get approved for than traditional loan methods.

    Customer gets the flexibility to choose suitable installment payment options, which will spread over a certain span of time. Absence of any interest cost and strict approval requirements makes BNPL a sought-after, convenient payment option, especially for millennials .

    In North America, “buy now pay later” market share is expected to triple to 3% of the e-commerce payments market by 2023.

    In other regions, such as Europe, the Middle East and Africa (EMEA), “buy now pay later” already accounts for almost 6% of the e-commerce payment market and is projected to reach nearly 10% by 2023.

    Win-Win Bid for all Parties

    BNPL is a win-win proposition for all the parties involved in a transaction, such as the consumer, merchant as well as the issuing bank:

    • The consumer gets the option to buy stuff that was his layaway target.
    • The merchant gains from more customers and better conversion, higher order value, rise in the repeat purchase rate and more benefits.
    • The issuing bank profits from elevated spending.

    The major BNPL players are U.S. PayPal, Canadian Affirm Holdings, Swedish Klarna, and Australian Afterpay.  Each of these companies already boasts a big customer base comprising millions of merchants and customer accounts.

    References:

    1. https://www.nasdaq.com/articles/buy-now-pay-later-solution-catching-up-fast%3A-3-stocks-to-gain-2021-05-20
    2. https://www.marketbeat.com/originals/add-these-buy-now-pay-later-stocks-to-your-shopping-list/

    Retirement Benefits

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    “Planning is the key to creating your best retirement.”

    Social Security is part of the retirement plan for almost every American worker. It provides replacement income for qualified retirees and their families. On average, retirement beneficiaries receive 40% of their pre-retirement income from Social Security. Thus, it’s important to understand when planning for income during retirement, Social Security was designed to replace only a percentage of your pre-retirement income based on your lifetime earnings.

    The amount of your average wages that Social Security retirement benefits replaces varies depending on your earnings and when you choose to start benefits. If you start receiving benefits at age 67 (full retirement age), this percentage ranges from as much as 75 percent for very low earners, to about 40 percent for medium earners, and about 27 percent for high earners. If you start benefits earlier than age 67, these percentages would be lower, and after age 67 they’d be higher.

    Most financial advisers state that you will need about 70 percent of pre-retirement income to live comfortably in retirement, including your Social Security benefits, investments, and other personal savings and sources of income.

    When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits. The number of credits you need to get retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (usually, this is 10 years of work).

    If you stop working before you have enough credits to qualify for benefits, the credits will remain on your Social Security record. If you return to work later, you can add more credits to qualify. Social Security Administration (SSA) can’t pay any retirement benefits until you have the required number of credits.

    When you work, you pay taxes into Social Security. SSA use the tax receipts to payout benefits to:

    • People who have already retired.
    • People who are disabled.
    • Survivors of workers who have died.
    • Dependents of beneficiaries.

    The money you pay in taxes isn’t held in a personal account for you to use when you get benefits. SSA uses your taxes to pay people who are currently getting benefits.

    Any unused money goes to the Social Security trust fund that pays monthly benefits to you and your family when you start receiving retirement benefits.

    Retirement benefit

    SSA will base your retirement benefit payment on how much you earned during your working career. Higher lifetime earnings result in higher benefits. If there were some years you didn’t work or had low earnings, your benefit amount may be lower than if you had worked steadily.

    The age at which you decide to retire will also affect your benefit. If you retire at age 62, the earliest possible Social Security retirement age, your benefit will be lower than if you wait.

    Full retirement age, or FRA, is the age when you are entitled to 100 percent of your Social Security benefits. If you were born between 1943 and 1954, your full retirement age was 66. If you were born in 1955, it is 66 and 2 months. For those born between 1956 and 1959, it gradually increases, and for those born in 1960 or later, it is 67.

    Those dates apply to the retirement benefits you earned from working and to spousal benefits, which your husband or wife can collect on your work record. Keep in mind:

    • Claiming benefits before full retirement age will lower your monthly payments; the earlier you file — you can start at age 62 — the greater the reduction in benefits.
    • You can increase your retirement benefits by waiting past your FRA to retire. Each month you put off filing up to age 70 earns you delayed retirement credits that boost your eventual benefit.

    Choosing when to start receiving retirement benefits is a personal decision. If you choose to retire and begin receiving benefits when you reach your full retirement age, you’ll receive your full benefit amount. SSA will reduce your benefit amount if you decide to start benefits before reaching full retirement age.

    References:

    1. https://www.ssa.gov/benefits/retirement/learn.html
    2. https://www.aarp.org/retirement/social-security/questions-answers/social-security-full-retirement-age/
    3. https://www.ssa.gov/pubs/EN-05-10035.pdf

    Emotional Well-Being

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    “Love and meaningful relationships are vital to physical and emotional well-being.” Deepak Chopra

    Many people fail to understand that emotional well-being has potential to affect your overall health and well-being. In fact, mental and emotional stress can translate into adverse physical reactions, a weakened immune system, and overall poor health outcomes.

    It is natural to feel stress, anxiety, grief, and worry during and after a disaster or pandemic. Everyone reacts differently, and your own feelings will change over time. It’s important to take notice and to accept how you feel.

    Taking care of your emotional well-being during an emergency will help you think clearly and react to the urgent needs to protect yourself and your family.

    Self-care and being proactive during an emergency will help your long-term healing.

    Look out for these common signs of distress:

    • Feelings of fear, anger, sadness, worry, numbness, or frustration
    • Changes in appetite, energy, and activity levels
    • Difficulty concentrating and making decisions
    • Difficulty sleeping or nightmares
    • Physical reactions, such as headaches, body pains, stomach problems, and skin rashes
    • Worsening of chronic health problems
    • Increased use of alcohol, tobacco, or other drugs

    It’s vital for you to learn how to manage your stress and take the action to improve your mental well-being. You can take the following steps to cope:

    • Take care of your body– Try to eat healthy well-balanced meals, exercise regularly, and get plenty of sleep. Avoid alcohol, tobacco, and other drugs. Learn more about wellness strategiesexternal icon for mental health.
    • Connect with others– Share your concerns and how you are feeling with a friend or family member. Maintain healthy relationships, and build a strong support system.
    • Stay informed– When you feel that you are missing information, you may become more stressed or nervous. Watch, listen to, or read the news for updates from officials. Be aware that there may be rumors and misinformation during a crisis, especially on social media. Always check your sources and turn to reliable sources of information like your local government authorities.
    • Avoid too much exposure to media and news– Take breaks from watching, reading, or listening to news stories. It can be upsetting to hear about the crisis and see images repeatedly. Try to do enjoyable activities and return to normal life as much as possible and check for updates between breaks.

    References:

    1. https://emergency.cdc.gov/coping/selfcare.asp
    2. https://austinblog.heart.org/october-is-emotional-wellness-month/

    Billionaire’s Income Tax

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    “Some liberal lawmakers hope the “billionaire tax” will eventually be extended to millionaires.”

    A ‘Billionaires Income Tax’ would be a fundamental change in how the tax system operates in the United States, and open up a new revenue stream for the Treasury. The wealth tax plan would “get at the wealth of the richest Americans that currently goes untaxed until assets are sold”, according to Roll Call.

    The Senate has proposed a special new tax on the uber wealthy, think billionaires, that Democrats will use to help pay for their next big multi-trillion dollar ‘Build Back Better’ fiscal spending package. The proposed tax on the net worth of billionaires’ stock holdings, real estate and other assets could help Democrats accomplish goals of raising taxes on the wealthy and funding their pet social safety net and climate programs.

    The Senate Finance Committee Chair wants to “begin requiring people with more than $1 billion in assets, or who earn more than $100 million in three consecutive years, to begin paying capital gains taxes each year on the appreciation in value of their assets, regardless of whether they are sold”, Politico reported.

    The ‘billionaire tax’ plan would reportedly hit around 700 Americans and generate several hundred billion dollars in tax receipts. “We have a historic opportunity with the Billionaires Income Tax to restore fairness in our tax code, and fund critical investments in American families,” said Senate Finance Chair Ron Wyden (D-Ore.). “The Billionaires Income Tax would ensure billionaires pay tax each year, just like working Americans.”

    The proposal, should it pass Congress and be signed into law by the President, would almost certainly be challenged in federal court on its constitutionality. The Constitution restricts so-called direct taxes, ‘a term referring to levies imposed directly on someone that can’t be shifted onto someone else’. There’s a big exception for income taxes, as a result of the 16th Amendment, which allows Congress to tax income and earnings. (All current taxes are either forms of income tax or levies on transactions).

    The proposed plan would tax people on the appreciation of their publicly traded marketable securities. Effectively, the plan would tax billionaires’ assets on any gains or appreciation in value of those assets. For example, if that asset became worth $110, they’d only owe on the $10 gain. And, the proposal would begin by imposing a one-time tax on all the gains that had accrued before the tax had been created.

    Stocks, bonds and other publicly traded assets, marketable securities, would be assessed the levy each year. Harder-to-value assets like real estate or ownership stakes in privately held businesses would not be taxed until they are sold, but would then face an interest charge designed to approximate the tax people would have faced if they had been publicly traded assets.

    Capital losses

    Under the proposal, a billionaire subject to the tax whose asset values take a dive during the year would have two options. They could choose to:

    • Carry those losses forward to offset potential future mark-to-market gains, or
    • Carry them back to a year within the previous three to generate refunds for taxes paid on unrealized gains.
  • Carrybacks could only offset prior mark-to-market tax, not taxes paid on other income.

    • Nevertheless, the plan would incentivize the wealthy to move into non-publicly traded assets in order to avoid having to pay the IRS. And if the billionaire wealth tax survives the certain court challenges under the current conservative Supreme Court, you can safely bet that many liberal leaning states will follow suit and implement their own version of a billionaire or millionaire wealth tax.

    This new billionaire tax on wealth, instead on income, is a tax that some liberals lawmakers hope will eventually be extended to include every millionaire in assets, regardless of actual net worth. However, Congress always seem able to devise work arounds to exclude their own financial assets and the assets of their big re-election campaign donors from these extremely regressive tax policies.

    Additionally, this proposal, if enacted into law, would dramatically impact compound growth of assets and, would have the unintended consequences of slowing job creation and capital investments in the U.S.

    Senator Mitt Romney (R-Utah) said that the billionaire tax will leave the rich thinking: “I don’t want to invest in the stock market, because as that goes up, I gotta get taxed. So maybe I will instead invest in a ranch or in paintings or things that don’t build jobs and create a stronger economy.”

    References:

    1. https://www.rollcall.com/2021/10/27/wyden-details-proposed-tax-on-billionaires-unrealized-gains/
    2. https://www.politico.com/news/2021/10/27/billionaires-income-tax-details-wyden-517318
    3. https://www.marketwatch.com/story/mitt-romney-says-a-billionaire-tax-will-push-the-rich-to-buy-paintings-or-ranches-instead-of-stocks-11635269305

    IRS Bank Account Reporting Requirements Intended to Catch Tax Cheats

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    The IRS would require banks to report gross flows of money in and out of some taxpayers’ bank accounts.

    The Internal Revenue Service (IRS) could be missing out on collecting approximately $1 trillion every year from taxpayers who are not paying their full tab, Charles Rettig, the IRS commissioner said during a Congressional hearing.

    To effectively collect taxes, IRS has to know about the financial transactions before it can assess appropriate federal taxes. In recent years, the agency has been stepping up enforcement and IRS researchers looked into tax evasion and pointed a finger at the wealthiest taxpayers.

    The new bank reporting proposal that was once considered by Congress would take a step at addressing this tax evasion concern. It would only apply to bank and financial institution accounts with more than $10,000 of annual cash flows. And the biggest sources of income for most Americans—paycheck deposits and government payments such as Social Security—would not count toward that $10,000, according to MarketWatch.

    It is also intended to strengthen the IRS’s enforcement arm to catch tax cheats and evaders, which is illegal. The bank reporting proposal is designed to improve the IRS’s ability to select who to audit, so that it does more audits of tax cheats—especially wealthier tax cheats—and fewer audits of wage earners who pay what they owe.

    Currently, the IRS is able to easily enforce tax laws involving workers’ wage income, but enforcement is patchy or nonexistent when it comes to forms of income that flow disproportionately to high-income Americans—especially income from businesses and other income producing assets. 

    Employers are required to file a W-2 form reporting employees’ annual wages—and as a result of that and paycheck withholding, 99% of wages are properly reported to the IRS.

    But there is little or no third-party reporting of types of income that flow disproportionately to wealthy workers and businesses, and as a result, hundreds of billions of dollars goes unreported every year.

    The Treasury Department estimates the overall amount of unpaid taxes to be $600 billion a year, with the richest 1% responsible for more than $150 billion of that. 

    By building on the existing system of bank information reporting, it should become more difficult for wealthy individuals to hide income. Currently, banks and other financial institutions are required to issue Form 1099-INTs to customers receiving $10 or more of interest a year. This proposal would require banks to report two additional pieces of information for some personal and business accounts—the total amount of money that has flowed in for the prior year, and the total amount of money that has flowed out, rounded to the nearest $1,000.

    The proposal would only apply to personal and business accounts with more than $10,000 of cash flows. And the biggest sources of income for most Americans—paycheck deposits and government payments such as Social Security—would not count toward that $10,000. So most Americans’ bank accounts wouldn’t be included.

    This proposal would have no effect whatsoever on people’s tax liability. Nobody—not even the wealthiest Americans, who would pay more or would owe extra taxes because of enhanced bank reporting.

    Rob Nichols, president and CEO of American Bankers Association, was unconvinced. “Even with the modifications…, this proposal still goes too far by forcing financial institutions to share with the IRS private financial data from millions of customers not suspected of cheating on their taxes,” he said in Barron’s.

    The proposal will still raise “privacy concerns, increase tax-preparation costs for individuals and small businesses, and create significant operational challenges, particularly for community banks,” he said.

    What bank reporting would do is give the IRS the ability to detect possible indications of tax evasion in instances where an individual or business partnership has millions of dollars flowing into a bank account but does not file a tax return or reports minimal gross receipts. That type of information would help the IRS select audits more efficiently and deter tax cheating and evasion.

    “Today’s new [bank reporting] proposal reflects the administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank-account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters,” Treasury Secretary Janet Yellen said in a statement.

    References:

    1. https://www.marketwatch.com/story/most-taxpayers-would-be-less-likely-to-be-audited-under-bidens-new-irs-enforcement-proposal-11634854551
    2. https://www.marketwatch.com/story/tax-cheats-cost-the-u-s-far-more-than-previously-thought-and-cryptocurrency-is-part-of-the-problem-irs-commissioner-says-11618340252
    3. https://www.barrons.com/articles/biden-irs-taxes-banks-51634737549

    Emotional Well-being: College Student Mental Health

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    Improving the lives and futures of young adults by strengthening connections and building resilience.

    Mental health continues to be a major concern on college campuses around the world, according to new research published by the American Psychological Association.

    The research reveals that the prevalence of depression and anxiety in young people continues to increase, now reaching its highest levels, a sign of the mounting stress factors due to the convergence of the coronavirus pandemic, political unrest, and systemic racism and inequality. 

    Additionally, researchers from the World Health Organization found that a staggering 35 percent of first year college freshmen struggled with a mental illness. The most common mental illness observed was major depressive disorder, with 21.2 percent of respondents experiencing lifelong symptoms, followed by general anxiety disorder, which affects 18.6 percent of students.

    When it comes to suicide in particular, the American Academy of Child and Adolescent Psychiatry points to data showing that by 2018, suicide was the second-leading cause of death for people between the ages of 10 and 24.

    And, since 2014, anxiety and depression have been college students’ leading mental health issues, according to research conducted by Boston University.

    According to the most recent Healthy Minds Study, which surveys tens of thousands of college and university students across the U.S., 41% of all students screened positive for depression over the spring semester, and 34% screened positive for anxiety. They are the highest levels observed by the study. However, this year’s results are part of a steadily increasing trend, and students surveyed said that while the pandemic impacted their mental health, it wasn’t the root cause.

    Help is on its way

    RADical Hope is a nonprofit committed to improving the lives and futures of young adults by strengthening connections and building resilience. The RADical Hope movement is two-fold: educate all constituents of the college community the warning signs and implore them to take action. And, help to identify students who need help but are not able to ask for it.

    RADical Hope wellness program, RADical Health, attempts to empower and equip college students with tools to stay well and stay resilient dealing with the day-to-day challenges of life on college campuses. Their strategy is to utilize proven effective techniques and procedures to counter the accelerating rise in college student anxiety and depression.

    RADical Hope is currently partnering with ten colleges and universities to develop, identify and partner with frontline engagement programs that deliver three priorities: Connectivity, Engagement, Empowerment.

    And, reaching college-age kids is vital. “64% of kids who drop out of college do so because of mental illness,” says Ken Langone, Co-Founder of Home Depot, who adds, “Our purpose [for RADical Hope] is to identify the kids who aren’t reaching out for help and assure them there is a better future.”

    References:

    1. https://www.cnbc.com/2018/10/04/4-ways-to-be-proactive-about-your-mental-health-in-college.html
    2. https://www.bu.edu/articles/2021/depression-anxiety-loneliness-are-peaking-in-college-students/
    3. https://radicalhopefoundation.org
    4. https://www.wuft.org/news/2021/09/22/mental-health-challenges-abound-among-college-students/
    5. https://healthymindsnetwork.org/hms/

    The National Suicide Prevention Lifeline contact is 1-800-273-8255 (en español: 1-888-628-9454; deaf and hard of hearing: 1-800-799-4889) or the Crisis Text Line by texting HOME to 741741.

    Chase Your Purpose, Not Your Passion

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    Focus less on what makes you feel passionate, and more on what you truly care about, your purpose. Harvard Business School Professor Jon Jachimowicz

    Chase Your Purpose, Not Your Passion, according to new Harvard Business Review research. The research shows that chasing your passion makes you less satisfied at work because work can be often difficult, draining, and even boring.

    Research on passion suggests three key things:

    1. Passion is not something one finds, but rather, it is something to be developed;
    2. It is challenging to pursue your passion, especially as it wanes over time; and
    3. Passion can also lead us astray, and it is therefore important to recognize its limits.

    Trade “purpose” for “passion”. 

    We try to pursue our passion when we chase after what gives us the most joy or provides the most pleasure. In one study, researchers found that commencement speakers gave students advice on how to pursue their passion. Much of the advice centered on “focusing on what you love” as the way to follow your passion. But some speakers described the pursuit of passion as “focusing on what you care about.”

    The distinction is subtle but meaningful: focusing on what you love associates passion with what you enjoy and what makes you happy, whereas focusing on what you care about aligns passion with your purpose, your values and the impact you want to have on your community and the world.

    Instead of asking what makes you happy and “following your passion,” instead ask yourself what you care deeply about…what’s your purpose in life, according to Harvard Business School professor Jon Jachimowicz.

    By focusing on purpose, you align your work with your deepest values, and also relieve yourself of the expectation that the long slog of a career will be all (or even mostly) happiness and sunshine. 

    Purpose gives you the resilience to succeed.  

    Jachimowicz says research backs up his claim that chasing purpose will make you more successful than chasing passion.  “In a set of studies, he found that passion alone is only weakly related to employees’ performance at their work. But the combination of passion and perseverance–i.e., the extent to which employees stick with their goals even in the face of adversity–was related to higher performance,” he writes. 

    A well-rooted sense of purpose gives you way more resilience than passion alone ever could. And that resilience is what is likely to make you successful over the long haul.

    Try to follow your passion and ask yourself this simple question: What do I truly care about?

    Purpose is a far better career compass than passion and joy.  

    “You don’t “find your calling,” you fight for it…” Dave Isay, StoryCorps founder

    “You don’t just “find” your calling — you have to fight for it”, explains Dave Isay, StoryCorps founder. “People who’ve found their calling have a fire about them. They’re the people who are dying to get up in the morning and go do their work.”

    References:

    1. https://hbr.org/2019/10/3-reasons-its-so-hard-to-follow-your-passion
    2. https://www.inc.com/jessica-stillman/new-harvard-research-to-be-successful-chase-your-purpose-not-your-passion.html?cid=sf01001
    3. https://ideas.ted.com/7-lessons-about-finding-the-work-you-were-meant-to-do/

    Inflation and Investment Opportunities

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    Fiscal spending proposal has the potential to overheat a U.S. economy that is already struggling to keep up with record demand.

    Rising inflation has Americans worried about their future purchasing power and their retirement plans, according to CNBC. Yet there are some opportunities to make and save money in this environment, as well as protect your investments.

    With consumer prices up in October 6.2% from the year prior, inflation is too high and appears to be a clear and present threat to America pocket books and wallets.

    With inflation at its highest level in several decades, economists are concerned that the pending multi-trillion dollar fiscal spending package will further overheat a U.S. economy already struggling to keep up with demand. The concern is that the package would exacerbate more fundamental supply constraints in the economy, driving up inflation over the longer term.

    Thus, cash in the bank or in low-yielding bonds aren’t the best option in an inflationary environment when the stock market has gained nearly 27% this year, explains financial advisor Delano Saporu, CEO of New York-based New Street Advisors Group. Inflation reduces the value and purchasing power of that cash.

    “If you are sitting on too much cash, you are doing yourself a disservice,” Saporu said.

    Thus, it is recommended that you keep only enough cash to cover expenses for 12 months to 24 months. This way, if inflation becomes a big issue and causes stocks to tank, you aren’t forced to sell in a down market.

    Investors do not love high inflation, which can hurt the growth prospects of high-rising tech stocks, among others. Because, higher prices can result in higher interest rates, which can lower the appeal of growth stocks compared to less risky alternatives.

    The stock market tends to beat inflation given its rate of return, although growth may be slowed during inflation periods. Yet investing is for growth, not inflation hedges.

    Since inflation is typically considered a result of a strong economy, financial experts recommend cyclical companies, which follow the cycles of an economy. That means sectors like industrials, energy and consumer discretionary. Also, gold, which is near five-month highs, and possibly cryptocurrencies are seen as inflation hedges.

    References:

    1. https://www.cnbc.com/2021/11/16/as-inflation-rises-here-are-opportunities-to-make-and-save-money-.html
    2. https://www.forbes.com/advisor/investing/inflation-worries-2021/
    3. https://www.bloomberg.com/opinion/articles/2021-08-12/inflation-worries-it-may-finally-be-time-to-bring-them-back

    Emotional Well-being: Gratitude

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    “Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.” Ralph Waldo Emerson

    November is National Gratitude Month. There is always something on our daily lives to be grateful for.

    In the Oxford Dictionary, gratitude is defined as “the quality of being thankful; readiness to show appreciation for and to return kindness.”

    Gratitude is about putting our attention towards the positive. When you do that, you help improve your physical and mental well-being. It is one simple way to change one’s perspective of the world. It allows you to appreciate the positive, rather than focus on the negative aspects of your life and the world. Learning to be grateful helps you appreciate the little things in life that you may to take for granted.

    Many of people express gratitude by saying “thank you” to someone who has helped them or given them a gift. But from a scientific perspective, gratitude is not just an action: it is also the positive emotion. It’s a state of being, where you feel a sense of appreciation that comes from deep within.

    We should try to live everyday showing gratitude and appreciation to one another. Yet, as we get busy and focused on our day-to-day activities, responsibilities, and requirements.

    Gratitude can be the same way. It’s not that we don’t feel thankful for things, people, or circumstances in our lives, but sometimes our lives get in the way and we lose focus on being grateful.

    Research states that people who practice gratitude every day are not only happier but also healthier. On average, people who are grateful tend to have lower stress-related illnesses, lowered blood pressure, are more physically fit, happier, and have more personal and professional relationships with others.

    There are many ways to embrace gratitude. And, it is important to acknowledge something each day that you are grateful for. Here are some other ideas:

    • Start a gratitude journal. Write a quick sentence about someone or something that you were grateful about that day. It can help you find appreciate for things around you, even among the stress from that day. And when you review what you’ve written, you’ll be able to reflect with appreciation those relationships or situations.
    • Say “please” and “thank you.” These simple words go beyond basic manners. They show respect, kindness, appreciation, and acknowledge someone else’s efforts. You could be the one thank you someone received that day.
    • Take the time for mindful reflection. Take a few minutes to focus on the present moment. It can reduce stress and cultivate the ability to be present in the moment and teach you to accept yourself and circumstances.
    • Spread gratitude. Share gratitude with other people. Tell them how much you appreciate their services, care, friendship, etc. Show your family how grateful you are to have them in your life, let them know how they make your life better just by being a part of it.
    • Give back to the community. Show your gratitude and appreciation by giving back to the community. Helping out in the community is a good way to appreciate everything in life. So do your part and become something that others can be grateful for.
    • Wake up and express gratitude for three things every morning. When you wake up each morning, try to immediately think of at least three things you’re grateful for. It can help you get in a positive mindset to start your day. You can express gratitude for something you’re looking forward to that day, or just for simply waking up again.

    It’s easy to lose focus on gratitude. It’s t’s easy to forget that even the little things we do have a positive and beneficial impact on our family and friends.

    Being grateful means finding and focusing more on the good. It means finding something to be grateful for amid the negative and chaos.

    Gratitude has been proven to generate a positive impact on psychological, physical, and personal well-being. Practicing gratitude or reflecting on what you’re grateful for is an effective way to deal with life’s chaotic, stressful and tense moments. Grateful people tend to sleep better, have lower stress levels, exercise more often, and eat healthier.

    “Give gratitude a try! You’ll be happier you did.”

    References:

    1. https://www.southwesthealth.org/2021/11/a-month-of-gratitude/
    2. https://antimaximalist.com/national-gratitude-month/
    3. https://nationaltoday.com/national-gratitude-month/