Your Financial News Roundup
October 25, 2023
1. Economy: The U.S. economy is growing faster than expected, balancing inflation and wage growth; while the government borrowed $300B less than expected in 2023.
2. Tech: Microsoft enters the cloud and mobile gaming spaces after acquiring Activision Blizzard for $70B; meanwhile, the federal government chose 32 cities to receive $500M in tech investment.
3. World: 14-year-old Ethiopian-American Heman Bekele developed a low-cost soap to treat skin cancer; and the New York Times and other news outlets retract their reports that claimed Israel bombed a hospital in Gaza.
Personal Finance Concept [Part 3/12]: Profitable Side Hustles – Ride-Share and Delivery
📈 The Economic Report: With rising interest rates and bad news galore, initial predictions for 2023 were full of woe. But, new data tells the opposite story — the economy is gaining momentum, prompting analysts to increase 3rd quarter GDP growth figures. The main boosters include cooling inflation, hot wage growth, a resilient labor market, and strong retail sales. Consequently, the Fed has halted its rate moves, as a Goldilocks-like balance of high employment and slower inflation appears more realistic. (WSJ)
Our Take: A balanced economic scenario may offer more advantages than the Fed’s preferred “soft landing,” which calls for a mild, short-lived recession, but results in higher costs of living. While the job numbers seem positive, such economic data masks people’s everyday realities and the nature of the jobs created. Given that many people are resorting to part-time work and side hustles to make ends meet, a more complex situation is at play.
💵 Less Debt Than Expected: At September’s end, the U.S. wrapped up the 2023 fiscal year with better-than-expected numbers. The government incurred a $1.7T deficit, well below the predicted $2T. However, tax revenues fell $457B from a year ago while expenses only dropped by $137B. Total U.S. debt sits at $33.6T, with $10T of it added since 2020. In spite of global setbacks, Treasury Secretary Janet Yellen states the economy remains strong, as the country avoided a recession this year. (CNBC)
Our Take: Debt reduction is expected to be a leading economic concern for voters heading into the 2024 election. Growing debt is also becoming a foreign policy issue as various countries attempt to reduce reliance on the dollar in global trade. Meanwhile, rising interest costs on the debt (due to Fed rate hikes) are distorting asset markets, intensifying the urgency to address this problem.
🕹️ Microsoft Gets Bigger: $70B and several court battles later, Microsoft has successfully acquired Activision Blizzard (AB). This move positions the company as a significant player in the $103B mobile games and advertising market, leveraging AB’s ultra-popular ‘Candy Crush’ and ~240M mobile users. With a fresh infusion of game titles, Microsoft can increase the quality and appeal of its Xbox Game Pass subscription and cloud gaming service. (Yahoo! Finance)
Our Take: This acquisition fills Microsoft’s gaps in its gaming arm and increases the quality of its experimental bets like cloud gaming. Though the company has gone from a zero to a behemoth in the mobile gaming and ads spaces, it has had mixed success with previous acquisitions, so it’s uncertain if this one will be worth it.
🌱 Seeding Tech’s Future: The Biden administration designated 32 cities as tech hubs to inspire and democratize tech innovation and job creation outside of popular hubs like Silicon Valley. Under the CHIPS and Science Act, the Commerce Department will distribute $500M in grants to the selected cities. The tech hubs primarily span middle and southern America, including Massachusetts, Colorado, Florida, New York, and Washington. Officials believe this investment will bolster economic and national security through developing computer chips, clean energy, and other tech. (APNews)
Our Take: The Commerce Dept received over 400 applications and heard from a variety of city and regional leaders across the country. It’s a clear indicator that many places are hungry for investment and reinvention, a hopeful sign that tech prosperity can be shared broadly.
🚸 The Promise of Youth: A 9th grader from Virginia, Heman Bekele, received $25,000 for winning the 3M Young Scientist Challenge. He invented a bar of soap to treat melanoma (skin cancer), earning the title of “America’s Top Young Scientist.” Using basic ingredients, the soap protects skin cells by bolstering specific immune responses. He was motivated by his roots in sun-baked Ethiopia, where access to treatment is cost-prohibitive. The U.S. boasts a 99% melanoma recovery rate, while it sits at 20% for sub-Saharan Africa. Bekele seeks to improve the soap and launch a nonprofit to distribute the soap to those most in need. (Good News Network) (MPR)
Our Take: Global figures on the full cost of skin cancers are unknown, but they exceed $8B annually just in treatment in the U.S. By focusing on making it a cost-effective and mass-producible treatment, Berkele can create a scalable adoption — vital to close the melanoma recovery gap between the developed and developing worlds.
⏪ Walk It Back and Slow Down: Last week, major news outlets, including The New York Times (NYT), Reuters and AP, claimed Israel had bombed a Gazan hospital, killing hundreds. However, new U.S. and U.K. and intelligence link the blast to the militant group Islamic Jihad. These outlets are now facing backlash for not verifying the claims, as they stoked harmful rhetoric and negatively affected U.S. relations in the region. Meanwhile, U.K. Prime Minister Rishi Sunak emphasized the need for a two-state solution in the Israel-Palestine conflict and additional aid for Gaza. (Politico)
Our Take: After the report, people became more hardened in their beliefs, leading to harsher, more dehumanizing language across social media and deadly real-world confrontations. Real-time information can be inaccurate or misleading, so it’s best to treat these updates with skepticism until verified.
Finance Concept of the Week
Lucrative Size Hustles [Part 3/12]: Ride-Share and Delivery
Earn extra income on the side and live on your own terms
Doing ride-share and delivery in your free time has never been easier. Depending on your availability and location, it can be a fairly lucrative side hustle. Back in 2020, an UberEats driver went viral on TikTok for being on track to make a whopping $100K a year.
How to Get Started
To begin, download apps like Lyft, DoorDash, or Instacart, create an account, and complete a background check. For the most part, you don’t need any special skills or prior work experience. But, you will need reliable transportation, such as a car or scooter.
As a ride-share driver, your vehicle must meet platform requirements set by Uber and Lyft and get inspected for safety. Upon approval, you can accept ride requests during your desired schedule. Once you accept a ride, the app navigates you to pick up and drop off the passenger(s). After drop-off, it calculates the fare and facilitates payment.
For food delivery, you’ll need to use an app like Instacart, DoorDash, and GrubHub. Once approved, set your working hours accordingly. You can use various modes of transportation, including a car, bike, scooter, or even on foot. If you are delivering groceries for Instacart, you may need a cooler or insulated bags to keep the items fresh during delivery.
For Instacart, you’ll receive a shopping list and be responsible for picking up the items from a grocery store. For DoorDash, Grubhub, and other food delivery platforms, you will need to pick up the food from the restaurant. You’ll get paid after you drop off the items to the customer.
Top Platforms to Use
- Uber: Uber has 2 services: ride-sharing and food delivery. The average pay can range from $15 to $25 per hour, depending on factors like location, demand, hours worked, and tips. Certain service levels may lead to higher pay, such as UberXL, Premier, and Black. Uber takes anywhere from 25% to 40% of each trip fare.
- Lyft: Lyft is a ridesharing service that connects drivers with passengers who need transportation, similar to Uber. The company charges anywhere from 10% to 50% for each trip and you can expect to make an average of $15 to $30 per hour with tips. Service levels like Lyft XL, Lyft Lux, Black, and Black XL may have higher pay.
- Instacart: Instacart is an on-demand grocery and retail delivery service. Average pay for Instacart shoppers can vary based on location, tips, batch size, and order complexity. On average, Instacart shoppers earn around $15 to $25 per hour, including tips.
- DoorDash: DoorDash is a food delivery service that partners with local restaurants to deliver food to customers’ doors. Most Dashers earn an average of $15 to $23 an hour depending on location, order size, distance, and tips. Generally, Dashers get paid a guaranteed base rate of $2 to $10, plus tips and promotions.
- Grubhub: Grubhub is a food delivery service that connects customers with local restaurants for food delivery or takeout orders. On average, Grubhub drivers can earn around $10 to $18 per hour, though earnings may increase during peak meal times and in regions with higher demand. Grubhub’s base pay primarily depends on time spent on the road and mileage per order.
- Flexibility: Drivers can choose their own work hours, making it a suitable option for those with irregular schedules or other commitments.
- Earning Potential: Depending on location and demand, drivers have the potential to earn a decent income. Many people do ride-share or delivery full-time, though they typically have to work more than the standard 40 hours to pay their bills.
- Easy Entry: Getting started doesn’t require a significant investment or special skills. For ride-sharing, most drivers use their own cars. For food and groceries delivery, you can use a bicycle or scooter if you don’t have a car.
- Meet People: You get the opportunity to meet and interact with a variety of people, which can be interesting and even enjoyable. Some of the most interesting conversations you’ll have could be from an Uber or Lyft ride.
- Income Variability: Earnings can fluctuate greatly and some days or hours may be less profitable. Additionally, since the pandemic, many gig workers have reported making up to 80% less than before and get less trip requests.
- Expenses: While you can use your own car, you’ll be responsible for maintenance, gas, insurance, and other vehicle-related costs. Frequent use of a vehicle, bicycle, or scooter for deliveries can result in wear and tear and additional maintenance costs.
- Safety Concerns: There are safety risks, as you may be driving late at night or dealing with unruly passengers.
- Rating Pressure: Maintaining a high rating is very important. Negative passenger reviews can affect your ability to get rides and lead to platform suspension.
- No Employee Benefits: Gig workers typically don’t receive employee benefits like health insurance, retirement plans, or paid time off. If you are doing this full-time, you will need to cover these costs on your own.
What Else Is New?
- Former FTX CEO Sam Bankman-Fried’s lawyers complain that he is being painted as a “cartoon of a villain.”
- The California DMV is suspending the permits for self-driving taxi startup Cruise due to safety concerns and a federal auto safety probe.
- 33 states are suing Meta for hurting the mental health of young people by creating addicting platforms.
- Over 200 harmless UFO sightings have been reported over the last year by the U.S. government.
Personal Finance Resources
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