March 28, 2023

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Good day. Only 2% of U.S. taxpayers used IRS Free File to file their taxes last year, but can you guess what percentage of them were eligible to file for free? a. 30%, b. 50%, c. 70%. Follow the wave 🌊 below for the answer.

Here are today's money topics:

Seasonality & inflation
Big companies are venturing into crypto despite bear market
What's a digital nomad visa and where could you go with one?

ECONOMY

Seasonality & Inflation

Perspective is everything. Public opinion is shaped not just by data, but by the story we're told alongside it. Inflation, jobs, growth, whatever the topic may be, odds are we've all been told what to believe about it by the perspective we were presented with. But the question is — was it the right one?

How seasonality influences our perspective

What is seasonality? Seasonality is a subtle yet weighty factor when it comes to data. It's why we measure things like "non-farm payrolls" for example, because of the seasonality of farming work and how those up/down cycles skew the numbers. By accounting for seasonal fluctuations, data miners can generate these "seasonally adjusted" outcomes to try and paint a "smoother" picture.
The seasonal-adjustment factor: To do this, economists create something called a seasonal-adjustment factor for any given set of data. In a roundabout way, this means that they'll find a number (multiplier) to account for the high and low points of any given market, and use that to find the actual "seasonally adjusted" total.
For example: Let's say a lemonade stand averages sales of $100 per month over the long run. That's an average, but there are peaks and valleys throughout the year, like the month of June doing $130 in sales, or January coming in at only $60. June's sales are 1.3x the average, so June's seasonal adjustment factor is 1.3. Then, you divide June's $130 in sales by its adjustment factor of 1.3 to get a seasonally adjusted sales total of $100.
A real-life scenario: It was reported that the U.S. added 517,000 jobs in January, on a seasonally adjusted basis, that is. If we subtract the seasonal adjustment, the real number is a net loss of -2.5M jobs in January.
Inflation and seasonality: These adjustment factors are constantly changing with the times, and recent years have caused a big shift in those used for inflation. The Labor Department revises its seasonality estimates for the CPI every February, and because of our historic inflation, the most recent adjustment was large. As a result, consumers were handed inflation numbers that were likely misleading during the first half of 2022.

What does this mean for us? It's just something to be aware of. It's easy to skip over that little "seasonally-adjusted" asterisk stamped onto most economic data, but acknowledging it and what it means can shift your perspective on matters.

CRYPTO

Big Companies Are Venturing Into Crypto Despite Bear Market

The crypto realm has been shrouded in clouds of bad news and fears over the last year, with little to no meaningful movement in market prices since its fall from grace in 2022. From afar, it all seems quiet, and almost eerily so.

Beneath the surface, a lot is going on. The world of crypto has been undergoing a lot of scrutiny, learning, and reconfiguring over these past few months — proof that believers and industry leaders have not abandoned their missions.

But it's not just insiders either, big name companies across the board are still devoting a lot of time and resources to the concept of crypto, and the proof is in the numbers.

Companies standing with crypto

BlackRock: Investors have long-awaited a Bitcoin spot ETF to get approved by the SEC The agency has denied over a dozen Bitcoin spot ETFs from launching and has approved only futures-based Bitcoin ETFs to date. But this hasn't stopped the world's largest asset manager, BlackRock. It introduced a Bitcoin trust that offers spot price exposure to their private, U.S.-based, institutional clients, a move made after inking a partnership with Coinbase.
Tech giants: Meta has partnered up with Polygon to work on its Instagram NFT marketplace despite this niche's drastic downturn. Amazon has begun integrating Avalanche into its web services platform, and Microsoft has teamed up with the web3 connoisseur Ankr.
Credit cards: Visa and Mastercard account for about 84.4% of all credit card transactions, and these giants are keen on crypto too. Mastercard recently partnered up with Immverse to allow crypto payments through web3 wallets where MasterCard is accepted, and Visa is taking things a step further by minting a crypto debit card that it plans to debut in 40 countries.

What this means for the market

Although interest and activity aren't always indicative of success, affirmative actions like investments being made by established companies with deep pockets show that the demand for crypto and its purpose remains strong.

While there may still be a lot of uncertainty ahead, regulations to sort through, and ongoing adjustments to be made (like crypto infrastructure enforcements), the fact of the matter is that at its core, crypto likely still has a strong foothold in the future of finance.

Take this related lesson and earn 🟡 Dibs:

Crypto Decision Tree

Crypto & NFTs

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CAREER

What's a Digital Nomad Visa and Where Could You Go With One?

Remote work's rise to prominence is no secret. As of late 2022, 16% of global companies were operating as fully remote, and over half (56%) allowed remote work in some form or another. If you find yourself among the many in this increasingly common position, what do you do with that newfound flexibility?

The most common answer? Work from anywhere. But where to? Most countries limit passport holders to a 6-month stay, but a digital nomad visa could allow you to extend that stay.

The details

What is a digital nomad visa? A digital nomad visa isn't an official term, but it's essentially a colloquial name for a new form of visa being offered by some countries. The visa allows remote workers who work for an employer outside of their host country, or are self-employed, to live and work in their country for a set period of time. Most of these programs are not a path toward citizenship, however.
Some important notes: This sounds enticing, but it doesn't come without requirements. A big thing here is finding a health insurance plan that will cover you where you're staying, considering many U.S. or employer-sponsored plans don't cover international expenses. And while every country is different, you can expect to be required to provide basic stuff like identification documents, evidence of your remote work, proof of insurance, finances, and even proof of a certain amount of income.
Countries participating: There are presently 42 countries offering a digital nomad visa of some kind. Names on the list include places like Norway, Germany, Spain, Mexico, Panama, Malta, Taiwan, Seychelles, Greece, and more.

🌊 BY THE WAY

📑 Answer: Roughly 70% of taxpayers were eligible for IRS Free File, but only 2% used it in 2022; if your adjusted gross income was $73,000 or less in 2022, you can file your federal taxes for free with IRS Free File (CNBC)
🏛️ First Citizens Bank, the 30th largest bank in the U.S., to acquire $72B of assets from Silicon Valley Bank; it's sending relief through the global banking sector (ABC)
🆓 ICYMI. Way to file your taxes for free (Finny)
🤖 That panicky call from a relative? It could be a thief using a voice clone, FTC warns (NPR)
📣 US regulator sues top crypto exchange Binance, CEO for 'willful evasion' (Reuters)
⚕️Finny lesson of the day. Gentle reminder that for many of you with a Flexible Spending Account (FSA), you might still have a few days left to use your remaining balance from last year, so please don't forget to use it:

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Finny is a financial wellness platform. The Gist is Finny's twice-a-week (Tues & Thurs) newsletter covering personal finance, market trends and investing insights. Finny does not offer investment and stock advice.

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