Tuesday, May 31, 2022

💨 Has the dust settled?

May 31, 2022 View online | Sign up
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Good Tuesday to you. According to Financially Simple, all economists agree that predicting a stock’s price is tough. Can you guess what percent of Americans agree with that statement? a. 39%, b. 59%, c. 79%. Follow the 🌊 below for the answer.

Here are the personal finance topics for today:

  • The future of our work environments
  • Should you tap your retirement to buy a home?
  • Prince's estate drama & the takeaway

FUTURE OF WORK

The Future Of Our Work Environments

We’ve been monitoring the jobs economy closely these last couple of years, because the concept of work and how it’s defined has been undergoing a historical shift since the onset of the pandemic, and maybe even prior. 

After much debate, now that the dust is (hopefully) beginning to settle, it appears we might be finally getting some clarity on the future of our work environments.

How far we’ve come in a short time

  • Full-on remote acceptance: According to a Gallup survey, just 8% of employees were working remotely full-time in 2019, but that number was up to 39% by February of this year, representing an almost 5x increase in less than a few years. 
  • On-site work declined dramatically: During that same time span, the percentage of respondents working on-site and full-time dropped from 60% to just 19%, and only 9% surveyed said that this was their preferred arrangement. 
  • We have reasons too: Employees were also asked why they’d prefer a hybrid/remote arrangement over on-site, and they have real reasons to prefer this. The top-cited reason was to avoid commuting and all its drawbacks, followed by better overall wellbeing, and the need for flexibility to balance other obligations too. 
  • Employees want a balance: When given options for hybrid work, most (38%) chose a middle-ground ratio of being in office 2-3 days per week, whereas only the trimmings (8%) picked an extreme of primarily remote or primarily on-location.
  • And they also want autonomy: Everyone can appreciate the freedom and feeling of trust that comes with having autonomy. This is borne out for us in further results, where employees were asked how they’d prefer their schedule to be decided. The majority, 38%, said they would prefer an arrangement where it’s entirely at their discretion to decide when they come in or when they stay home, and only 16% preferred that their employer decide.

Everyone has to adapt and collaborate 

Remote working arrangements are still a little bit of a wild card, because almost every company has some unique aspects that ensure working remotely will likely never have a one-size-fits-all solution. 

Regardless of the bigger picture, the best thing to do is take time to assess your own unique situation and decide what will and will not work, this goes for employees and employers alike.

Some things to take into account

  • What is your product/service? So obviously a lawn care business isn’t going to be done remotely, but an online content-oriented company just might be. You’ll have to ask yourself how much of your work related to your product or service requires in-person interaction, and your remote work policy can flow from there. 
  • What do you prefer/need? Your personal thesis on remote work should start with how much flexibility you need, and also what you prefer on a day-to-day basis. This might require some trial and error too, just to see what routine you like best. 
  • Can you achieve your goals this way? If your goal is to become an invaluable remote employee in a career you love, pursuing a position with a business with an incompatible remote work policy is probably not right for you. However, if you’re someone who has "in-person interaction" as a big part of your criteria, you’d better steer clear of remote-only options.

FINANCIAL PLANNING

Should You Tap Your Retirement To Buy A Home?

Perhaps one of the most popular, yet also most unanswerable, questions in the world of finance right now is “should I be looking to buy a house anytime soon?” 

The cost of buying a home has ballooned massively over the last couple of years, causing some to wonder if an overall market decline is past due. Other eager buyers are also exploring alternative financing options to pull off a purchase, maybe even tapping into their retirement savings.

Methods to do so

  • Your Roth IRA: If you’re thinking of going this route, the best-case scenario is if you’ve got an existing Roth IRA with a healthy balance. With a Roth IRA, you can withdraw the contributions you’ve made into the account penalty-free at any time, and for any reason, as long as you’ve had the account opened for at least 5+ years. Why? Because it’s money you’ve already paid taxes on. The additional nuance here is that first-time home buyers can also take out up to $10,000 of investment earnings penalty-free before you’re 59.5 years old as long as the account is 5+ years old. The IRS considers a first-time home buyer someone who hasn’t owned a home for the last two years.
  • A traditional IRA: If you withdraw money from your traditional IRA before age 59 1/2, you’ll usually have to pay the 10% penalty on the withdrawn amount. A first-time home buyer can withdraw up to $10,000 from their IRA penalty-free. The $10K exemption is available for individuals, meaning married couples can withdraw $10K each for a total of $20K towards their first home.
  • 401K options: What makes the 401k unique here is that instead of withdrawing, you can take out a loan against the balance up to $50k or 50% of the account, whichever is less, and pay the interest rate on the loan back to yourself. This isn’t ideal, and loan periods tend to be short (less than 5 years) which can result in hefty payments. Withdrawals, on the other hand, are not afforded the same penalty or tax exemption luxuries that IRAs get, meaning any withdrawal made for a home purchase would be quickly eroded by those fees.

A sober look at using retirement to fund a home purchase

Using some of your future to finance a home purchase sounds risky, and without context, it is. However, there might be a few instances where this may be a reasonable route to take.

You’re young: If you’re in your 20s or 30s and looking to buy a home, it might not hurt to take some extra funds out of retirement to buy a home, especially if you’ve already been investing consistently. A home can be a good investment, and so it’s likely you’ll make that loss up in the value and appreciation a home provides.

You’re avoiding private mortgage insurance (PMI): If you don’t quite have enough of a down payment (20% of the loan) to avoid paying for private mortgage insurance, pulling out a little retirement money to get over that hump might be wise. PMI ranges from 0.5%-2% on average, and so dodging this could end up saving you thousands per year.

But in other cases, it may be better to think twice:

You’re older: Depending on how much you’ve saved for retirement, pulling out some of those savings could jeopardize your ability to retire if it’s getting late in the game. This is heavily situational though, and depends a lot on the rest of your finances and living situation. 

Your balance is low: If, for example, you’ve only saved $10,000 for retirement in your Roth IRA and you’re considering pulling it all out for that first-time homebuyer exemption, you should also first consider the fact that you’re depleting the entire account value, and weigh any other options before doing so.

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ESTATE PLANNING

Prince’s Estate Drama & The Takeaway

When a family loses a loved one, the last thing they want to endure is a convoluted estate dispersion and disagreements about the deceased’s assets. This had been the case for the family of former world-famous artist, Prince, who’d been dealing with an ongoing dispute over his massive estate for 6 years.  

When Prince passed away in 2016, he didn't have a will to establish who would receive his assets and how it would all be dispersed, creating one of the most complicated probate negotiations between private parties and the Internal Revenue Service (IRS). And recently, the estate’s administrator, Comerica Bank, Prince's heirs and the IRS agreed that his estate is worth $156.4 million, nearly twice an earlier appraisal.

Why does all this matter, and what can we learn from it? You might not have an estate with a fluctuating value in the hundreds of millions, but an estate of any size can quickly become unnecessarily messy if there aren’t clear guidelines on how to execute it after death. Unfortunately, we've seen this play out over and over again (ahem... do the names Tony Hsieh, Arethra Franklin, Sonny Bono, and Jimi Hendrix ring a bell?).

Here’s what we took away from all this:

  • Most wills are simple, and this can easily be avoided. It’s unlikely you’ll find yourself in a situation like Prince’s family, and creating a will is something that can even be done in a matter of minutes online for most people.
  • The will is just a means to an end. The overarching point here points to financial intentionality, and there are other financial steps that can be taken prior to your departure that contribute to the preparedness of your family, and may even decrease your tax burdens as you age. Case in point: you can gift over $11 million over the course of your life without ever having to pay gift tax on it via what's called the lifetime gift tax exemption.
  • The time to act on your future is now. We’re not pessimists, but you never know what life holds. Children and grandchildren or not, no one wants their partner to deal with the aftermath of a heartbreaking situation on top of becoming the default executioner of your estate. This is something no one likes discussing, but something that can bring peace of mind for the rest of your life. 

💡Tooltip. If you need affordable user-friendly options to create a will or think you may need an estate plan or more, check out Trust & Will (we think they are pretty neat!). And if you need a crash course on the basics of estate planning, look no further:

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🔥 TODAY'S MOVERS & SHAKERS

  • Unilever (+9.6%) as the multinational consumer goods company named activist investor Nelson Peltz to its board; Peltz's Trian Fund Management holds about a 1.5% stake in the company.
  • Nio (+4.8%) as the China-based EV maker’s stock was added to Morgan Stanley's “tactical idea” list as Shanghai eases their Covid restrictions and the company is poised to benefit from new subsidies for electric vehicle buyers.
  • Credit Suisse (-4.2%) as there are reports the bank is considering options, such as a share sale or selling a business unit, given a series of losses.
  • Bitcoin (+9.45%) to $31,960.66 (7D)
  • Ethereum (+0.95%) to $1,960.99 in last (7D)

This commentary is as of 10:20 am PDT.

🌊 BY THE WAY

  • Answer: 59%. All economists agree that predicting a stock’s price is tough. Only 59% of Americans agree with that statement (Financially Simple)
  • 🔮 ICYMI. Predicting the future is harder than ever (Finny)
  • 🛍️ Dip buyers storm back to stocks after selloff (Bloomberg)
  • 🟡 Dogecoin co-founder calls LUNA 2.0 believers ‘truly dumb’ (Cryptoslate)
  • Finny lesson of the day. In the words of crypto influencer Cooper Turley, what's an “internet community with a bank account?” It's a DAO, a decentralized autonomous organization:

Finny is a financial education platform on a mission to make your money work for you. We offer a customized financial learning platform through bite-size, jargon-free lessons, money trends & insights to teams & companies.

The Gist is Finny's twice a week (Tues & Thurs) newsletter covering personal finance & investing insights and money trends. Finny does not offer investment and stock advice or endorsements. The Gist content team: Austin PayneOthmane ZiziChihee Kim

We're thankful for our mission-aligned partners—A, B—and their support as they make rewards on our platform possible. If you're interested in sponsoring The Gist, please reach out to us. And if you have any feedback for us, please contact us.

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Google Alert - Dyslexia

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Dyslexia
Daily update May 31, 2022
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Dyslexia Treatments Market is showing steady growth and CAGR is expected to improve during the forecast period. The key players included in the ...
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Global Dyslexia Treatment Market 2022 Latest Innovations – DK Pharmachem, Pfizer, RPG Group, Wallace Pharmaceuticals · MarketsandResearch.biz study, ...
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Princess Beatrice health struggle. princess-beatrice-dyslexic. Princess Beatrice received special help to assist her with her health issue.
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Slack
Daily update May 31, 2022
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Slack also hosts independent channels for people who don't work together, and in the past two years, Slack-based networking groups have grown, ...
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In Slack, for example, apps that are installed by users remain installed ... potentially allowing former employees to access work Slack messages.
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FORDSVILLE — Nanette Slack Mattingly, 86, of Fordsville, died Saturday, May 28, 2022, at her home. She was born in Pattiville to the late Jess and ...
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The market research report titled "World Automotive Slack Adjuster Market by Player, Region, Type, Application and Sales Channel, ...
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The SubGenius Movie Will Give You Slack. J.R. "Bob" Dobbs The SubGenius Foundation. By Witney Seibold/Updated: May 30, 2022 3:19 pm EDT.
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4 – Send cross-platform messages to Slack. Communicating with people in Slack doesn't have to be cumbersome. If one of you uses Webex and the other ...
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Employee Communication Tools Market to Witness Huge Growth by 2030 | Slack, Call-Em-All, Bitrix, Google, CultureIQ · [Segments] · Furthermore, the years ...
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The man, whose identity was unknown, was also seen throwing roses in the museum gallery to slack-jawed guests. An employee holds up the frame of ...
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Empowered agents: the new customer service advantage | Slack
Hear how leading organizations keep agent engagement high and attrition low with Slack as their digital HQ.
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