Your Weekly Financial Roundup Issue No. 42

Here’s the latest on the economy, tech, and the world, including WeWork’s financial woes, PayPal’s new stablecoin, China’s slowing exports, and more.

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Your Financial News Roundup

August 9, 2023


1. Economy: UPS reached a new deal with its driver’s union to raise total comp to $170K; while WeWork encounters more financial troubles.

2. Tech: Researchers and home scientists have yet to be able to reproduce LK-99; meanwhile PayPal launched its own stablecoin.

3. World: Zoom is switching to hybrid work; and China saw its export figures fall by 14.5% from last year.

Personal Finance Concept [Part 2/10]: Debt Detox — Student Loans


🫱🏾‍🫲🏼 The Sweetest Deal Ever: Under its new contract with its union, the average UPS driver would earn $170K in salary and benefits by the end of the 5-year contract, up from $145K today. This historic raise is due to record inflation levels. Over the last few weeks, the threat of a strike cost the shipping giant $200M in sales. With union organizing and strikes on the rise, this deal seems to have set a new standard that is emboldening workers at other big companies. (BBC)

Our Take: Over the past year, unions have been having their moment, with workers successfully organizing at top companies in America, including Amazon, Apple, Starbucks, Traer Joe’s, REI, and more. If this movement continues, it could lead to better working conditions and wages for all employees.

🏢 Troubles Ahead For WeWork: At its peak, coworking space provider WeWork was valued at $47B. Today, the company has “substantial doubts” about its ability to continue operating. Despite its revenue being up 4% year-over-year, the company had a net loss of $397M for the second quarter. WeWork interim CEO David Tolley blames the excess supply in commercial real estate, increasing competition, and macroeconomic volatility for the company’s woes. (CNN)

Our Take: With the rise in hybrid and remote work, the commercial real estate sector has struggled to fully recover and return to its pre-Covid occupancy rates. Growth in office space inventory is well below the historic average while delinquency rates for commercial mortgage-backed securities is rising.


⛔️ No Luck For LK-99 (Yet): LK-99, a room-temperature superconductor, could be the key to limitless clean energy and quantum computing. If reproduced successful, it would be a breakthrough in physics rivaling the atomic bomb. Researchers at a South Korean startup uploaded their preliminary findings of LK-99, which caught fire on social media as scientists and amateurs attempted (but failed) to reproduce the material. Expert opinions range from skepticism to cautious optimism, but they applauded the real-time efforts to verify the results. (CBC)

Our Take: LK-99 could be the next big discovery in materials science, but its potential underscores the delicate balance between innovation and validation in science. If it passes the litmus test, it could reshape life and solve many global problems.

🪙 A New Crypto On the Block: Financial services firm PayPal is launching its own stablecoin, PayPal USD (PYUSD), to facilitate payments and transfers. The stablecoin will be issued by stablecoin crypto firm Paxos Trust, operate on the Ethereum blockchain, and be backed by U.S. dollar deposits and short-term U.S. treasuries. PayPal will slowly roll out the stablecoin on its platform, including Venmo, and disclose fees for using it. It’s also been made available to the public so Web3 developers, wallets, and exchanges can integrate PYUSD into their platforms. (TechCrunch)

Our Take: PayPal stock has been underperforming since its June 2021 high of ~$310. With PayPal going deeper into crypto, they could make a comeback in terms of profit potential and staying at the cutting edge of fintech.


⏳ The End of an Era: Zoom, the company that powered remote work, is calling its people back to the office 2 days/week for a hybrid work schedule. The company states the return to office call only applies to employees who live within 50 miles of a Zoom office. Zoom stresses it will continue to hire for fully remote roles and use its video platform to keep its workforce connected. All in all, Zoom’s return to office move is fairly lax and on par with the hybrid approach used by other firms. (USAToday)

Our Take: Companies have to balance between offering remote work flexibility to attract the best talent while satisfying executive demands to have people in office. The hybrid approach is becoming mainstream and seems to satisfy both parties, making it the “new normal” for the near future. 

↘️ A Big Fall: In July, China’s export numbers fell by 14.5% from a year earlier — an unprecedented drop for the 2nd month. Imports also tumbled by 12.4%, affecting global exports of food and other goods. The country’s leaders are attempting to stimulate the economy by promising to support entrepreneurs and incentivize home buying and consumer spending. But, they have yet to announce stimulus or tax cuts. Data firm Capital Economics stated the export decline is mainly due to lower prices, but forecasts declines for the rest of the year. (AP)

Our Take: China’s ongoing economic and demographic trends could lead the nation into the “middle-income trap,” where a country fails to reach high-income status. While the future is unknown, China’s economic well-being could reshape global trade in the long term.

Finance Concept of the Week

Debt Detox [Part 2/10]: Student Loans

Common types of debt and how to best tackle them

With the rising costs of education, getting a college degree is becoming more expensive than ever. A recent report from Georgetown found that the average price of tuition, fees, and room and board for an undergraduate degree increased a whopping 169% between 1980 and 2020! As a result, more than half of students graduate with debt, with the average student owing a staggering $29,100.

How Student Loans Work

Student loans are a type of financial aid designed to help cover the costs of higher education, including tuition, fees, textbooks, room and board, and more. These loans are typically offered by government agencies, such as federal or state governments, and private financial institutions.

To apply for federal student loans, you need to complete the Free Application for Federal Student Aid (FAFSA), which helps determine your eligibility for different forms of financial aid. Private loans may have their own application processes.

Federal student loans are government-backed and usually offer more favorable terms, including fixed interest rates and flexible repayment options. On the other hand, private student loans are provided by lenders and may have varying rates and terms.

Both federal and private student loans have borrowing limits, which may vary depending on the type of loan, the student’s year in school, and dependency status (dependent or independent). Typically, you would repay student loans after you graduate or if you are attending school part-time. 

Types of Student Loans

  • Direct Subsidized Loans (Stafford Loans) are a type of government loan offered to undergraduates with demonstrated financial need. These loans are backed by the federal government and come with fixed, low interest rates. While you are still in school, during the 6-month grace period, and during deferment periods, the government will pay the interest on your behalf.
  • Direct Unsubsidized Loans (Stafford Loans) are another form of student loans offered by the federal government. Both undergrad and graduate students can take out direct unsubsidized loans, regardless of financial need. However, these loans start accruing interest even while you are still in school and during the grace period.
  • Direct PLUS Loans are available to grad students and parents of dependent undergrad students. They are fixed-rate loans with terms up to 30 years. Unlike Stafford Loans, these loans require a credit check and may have higher interest rates. While Direct PLUS Loans offer better terms than private student loans and do not have prepayment penalties, they may have origination fees and do not offer income-driven repayment plans.
  • Direct Consolidation Loans allow borrowers to combine multiple federal student loans into a single loan with 1 monthly payment. They are managed by the U.S. Department of Education and comes with a fixed interest rate based on the average rate of the combined loans. While direct consolidation loans may lower your monthly payment, they do not come with a grace period and may result in more interest paid over the loan’s lifetime.
  • Private Student Loans are offered by banks, credit unions, and online lenders. They may have fixed or variable interest rates, and eligibility and terms depend on the borrower’s credit history and income. These loans don’t come with the extra protections federal student loans have, such as Public Service Loan Forgiveness and income-driven repayment plans.

Pros of Student Loans

  • Access to Higher Education: Student loans give lower-income students the opportunity to pursue academic and career interests that may lead to greater earning potential. On average, those with a bachelor’s degree earn $2.8M over the course of their careers, while high school graduates earn $1.6M.
  • Flexible Repayment Plans: Federal student loans offer various repayment plans, allowing you to tailor monthly payments to your personal and financial circumstances. This can make repayment more manageable, especially when times are tough.
  • Potential Loan Forgiveness: If you work in public service or nonprofit, you may qualify for Public Student Loan Forgiveness (PSLF). This is a federal program designed to encourage students to pursue careers like firefighting, teaching, nursing, government, etc.
  • Building Credit History: Paying off your student loans can help you establish and improve your credit. Having excellent credit gets you the best financial offerings and terms for loans.
  • Deferred Payments During School: Many student loans offer a grace period where you are not required to make payments. This gives you time to focus on your studies before entering the workforce.

Cons of Student Loans

  • Accumulating Interest: Certain student loans will accrue interest over time, increasing the amount owed. Loans with high interest rates or lengthy repayment terms can take years or decades to pay off.
  • Debt Burden: Mounting student loans debt can affect your financial stability and delay important life milestones such as buying a home, starting a family, or saving for retirement.
  • Limited Bankruptcy Protections: Unlike other forms of debt, student loans are not easily discharged through bankruptcy. This makes it challenging to find relief if you are experiencing financial hardship.
  • Potential Impact on Credit Score: Missed or late payments on student loans can negatively impact your credit scores and hurt your ability to secure favorable interest rates on future loans.
  • Lack of Flexibility: Private student loans may have fewer flexible repayment options compared to federal loans, potentially leading to financial strain.

How to Manage Student Loans

Consider federal loans first. Student loans offered by the federal government have more favorable terms and conditions than private ones. Before taking out a private student loan, apply for FAFSA first to see what you can qualify for.

Understand your repayment options. There are 4 types of federal student loan repayment plans:

  • The standard repayment lasts 10 years.
  • Income-driven repayment (IDR) ties the amount you pay to your income and extends the repayment period to 20 or 25 years.
  • Graduated repayment also lasts 10 years, but lowers your monthly payment and then increases the amount every 2 years.
  • Extended repayment starts payment amounts low before increasing them every 2 years for 25 years. Alternatively, you can split payments evenly over 25 years.

Consider community college. If going to college will put a heavy financial strain on you, consider going to community college first and then transferring to a 4-year university or college. You’ll still graduate with a bachelor’s degree, but without the burden of debt.

What Else Is New?


Personal Finance Resources

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We are not financial advisors. The content on this website and our YouTube videos are for educational purposes only and merely cite our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won't experience any loss when investing. Always remember to make smart decisions and do your own research!

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