Your Financial News Roundup
January 25, 2023
1. Economy: Millennials and Gen Zers are more likely to pay for their checking accounts despite having free options; and predictions for the global economy spell positive growth and a mild recession for 2023.
2. Tech: SafeRent, an AI-based tenant screener, is accused of racial bias; while more U.S. states ban TikTok on their networks/devices — blocking its use on public university WiFi.
3. World/US: Bolivia is partnering with Chinese battery firm, Catl, to develop its valuable lithium reserves; and Brandon Tsay courageously ends a gunman’s spree at his family-run dance hall in Alhambra, CA.
Weekly Finance Concept: Growing Your Net Worth
…on how the news impacts you and your wallet
1. Economy: Soon, you can say goodbye to bank fees as basic services from all banks alike are becoming free. You can enjoy all the same perks and protections with free checking and savings accounts, but without paying the bank thousands of dollars for keeping your money with them — useful in times of inflation.
2. Tech: As AI bias concerns grow, policymakers are likely to pressure firms to make their AI products more transparent and create laws to regulate their use. Meanwhile. growing support for TikTok bans may make it the first nationally banned app in the U.S. (though this is a common practice in China). Federal scrutiny on TikTok may force its owner, ByteDance, to spin-off the app or lose out on the U.S. market — disrupting the livelihoods of content creators who rely on the platform for income.
3. World: The growing demand for electric vehicles and batteries is fueling competition for control over lithium and rare metals between China and the U.S. — as part of their “frenemy” relationship. If you invest in commodities, lithium is performing well and could continue that trend in 2023, as it’s a key input for creating sought-after batteries.
🏦 Why Pay Your Bank?: A recent survey revealed that 27% of checking account users, on average, pay up to $288 a year in fees to use their accounts. Regular services, overdraft, and ATM fees can stack up to $5,000 over the account’s lifetime. Millennials and Gen Z pay the most in fees. This trend is due to a lack of knowledge of free checking account options. To stop paying your bank and build your savings, move it to one with a free checking account like Ally Bank or SoFi. (CNBC)
🌤 More Sun in the Forecast: Economists are more cheery about the global economy thanks to positive data on inflation and real economic activity and China’s reopening. Ratings agency Barclays increased its global growth forecast to 2.2% due to better growth expectations for major economies. The U.S. is predicted to have a mild recession in mid-2023 while the Fed will slow the pace of rate increases and cap them at 5.25% — creating a sunnier outlook. (CNBC)
🤖 AI is Biased Too: SafeRent, an AI-based tenant screening company, is facing lawsuits for alleged discrimination against Black and Hispanic renters in its algorithms. SafeRent claims it only advises landlords and does not make decisions, which would violate the Fair Housing Act. The Justice Dept. disagrees, stating that the use of algorithms does not get a free pass if it discriminates against people of color — as research is showing. (Wired)
📵 TikTok Bans: Several states have banned TikTok on government networks and mobile devices due to cybersecurity issues and Chinese spying concerns. Other states including Massachusetts, New York, California, and Vermont are considering their own bans. As a result, public universities are restricting TikTok’s use on their networks — angering students who heavily use the app. Congress has bipartisan support for a federal TikTok ban, which would make it unusable in the U.S. Brook Oberwetter, a TikTok spokesperson, says the company laments that states are jumping on the ban wagon. (NBC News)
🇧🇴 Mineral Mining: Chinese battery firm, Catl, won the contract to develop Bolivia’s lithium supply. Lithium is an in-demand metal used in a variety of batteries, especially those for electric vehicles (EVs). Pressure to develop new lithium sources is growing as EV demand soars. Bolivia is part of the “Lithium Triangle,” along with Argentina and Chile, as they share the salt flats that hold 75% of the world’s lithium, but has yet to mine them. With $1B in initial investment, Bolivian President Luis Arce calls the contract “historic” and predicts exports will start in 2025. (BBC)
🇺🇸 Hero Amongst Tragedy: As Lunar New Year began, a gunman assaulted a ballroom in Monterey Park, CA (a majority Asian city), killing 10 and injuring 10 more. The gunman then went to Lai Lai Ballroom in Alhambra to continue his attack. Brandon Tsay, son of Lai Lai’s owners, was in the gunman’s sights but tackled and disarmed him. Getting control of the gun, Tsay told the gunman to flee — thwarting his attack. Tsay has been called a hero by civic leaders, but LA’s AAPI community is still healing from the tragedy. (BBC)
Finance Concept of the Week
Setting Yourself Up For Financial Success — Part 6/6
Growing Your Net Worth
Let’s be real — you want to learn personal finance to get richer. Don’t we all.
The bad news? Unfortunately, for most of us, there’s no way to get rich quick overnight — it’s all about the long game.
We’re capping off this series by focusing on 8 ways to build your net worth (the difference between your assets minus liabilities). The goal is to increase the value of your assets and reduce that of your liabilities.
- Pay off high-interest debt quickly, starting with the balance with the highest interest rate. Carrying high-interest debt month over month can cause your debt to snowball and make it a nightmare to manage — preventing you from achieving other financial goals.
- Debt is not always your enemy. Taking on a loan strategically to acquire income-generating assets, such as a duplex for house-hacking or an established business, can allow you to grow your net worth quickly.
- Pursue opportunities to refinance loans as they come up to lower the amount of money you pay over the loan’s lifetime. It makes sense if you can reduce your interest by at least 2%.
- Adopt a pay-yourself-first mentality. Set aside money for investing and saving every paycheck to build a safety net and achieve your financial goals faster.
- Align your spending with your values and interests. You’ll appreciate your purchases more and reduce the likelihood of overspending or buying things you don’t need.
- Advocate for yourself and negotiate for rate increases or a raise when you are performing at the next level. Focus on high-profile tasks with meaningful impact and document your results to build your case.
- Spend a few years honing your expertise in your profession, then perform independent consulting or coaching as a side hustle or full-fledged business to earn additional income.
- Keep up with the latest trends in your field and set aside time to learn new skills/tools to ensure you are constantly growing and learning. Many online platforms like Udemy, Coursera, or LinkedIn offer a wide variety of content. Even leading universities like MIT and Harvard offer free online classes.
Tip of the Day
💵 Tipflation, or the trend of people asking for bigger tips, is real. If a suggested tip looks too high, it’s likely based on the total, which includes tax. Next time you dine out, tip your server based on the subtotal.
- Financial Literacy Quiz (FINRA)
- Making a Grocery Budget for One (Finance Futurists)
- Lack of Financial Literacy Costs $10,000 (CNBC)
- Capital One Bank Review (Finance Futurists)
- How the Debt Ceiling Works (BBC)
- Rents are Falling Now (NBC)
Personal Finance Resources
🚀 We recently launched a curated collection of personal finance resources on Gumroad, featuring both free and paid options! Visit us for all your personal finance tracking needs, including:
Stay tuned for updates! In the meantime, if there’s any other product you’d like to see, feel free to suggest it here.
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