Category Archives: Finance

Stock Market: ‘GameStop & Payment For Order Flow’

Following the GameStop trading frenzy, the SEC is expected to take a fresh look at payment for order flow, a decades-old practice that’s at the heart of how commission-free trading works. WSJ explains what it is, and why critics say it’s bad for investors. Illustration: Jacob Reynolds/WSJ

Retirement: How To Get To $75K/Yr In Passive Income

If you can save enough money now, you can fund your retirement by living off of your returns without draining your nest egg. Luckily, with time and dedication, you can make it happen. The official retirement age for most Americans is 67 years old. But that number largely matters for Social Security benefits. If you want to retire early, however, you will need a plan that relies primarily on your own savings and investments. CNBC crunched the numbers, and we can tell you how much you need to save now to safely get $75,000 of passive income every year in retirement. First, some ground rules. The numbers assume you will retire at 45, have no money in savings now and plan to save a substantial amount of income to reach your goal. For investing, we assume an annual 4% return when you are saving. We do not factor in inflation, taxes or any additional income you may get from Social Security and your 401(k). In retirement, we use the “4% rule,” which is a general principle that says you can comfortably withdraw 4% of your portfolio every year. It is important to note with the recent market volatility, there is a risk you’ll have to lower your spending percentage in the future. Check out this video to get a full breakdown of the numbers.

Green Investment: ‘Can It Stop Global Warming?’

A new generation of investors wants to force businesses to become environmentally-friendly. Even climate conservationists know that money talks, but can green investments really save the world? Green investment rewards companies that use sustainable production practices and protect the environment. At the same time, companies that pollute or contribute to global warming are deprived of funds.

The strategy converts the once secondary issue of the environment into hard, cold cash. Antonis Schwarz is 30 years old — and an investor, philanthropist, and activist. His slogan is “cash against climate change.” Schwarz, like many other wealthy millennials, sees climate change as the key variable when it comes to investing money. These people intentionally put their cash into companies and projects that protect the environment. Schwarz believes that those who are well-off have a special responsibility to follow this strategy. He says, “When you are able to change something and you don’t, you’re complicit. We all have to become fully involved, so we can prevent a climate disaster.”

This philosophy can be summed up with the following question: “What’s the point of having loads of money if it becomes worthless because you’re living on a planet that’s becoming increasingly chaotic?” Institutional investors have more money at their disposal than wealthy private individuals do. Their approach is also changing — and not out of pure idealism. Extreme weather events caused by climate change, for example, are bad for business. They can force corporations to write off billions in damages.

This documentary goes behind the scenes to take a closer look at the financial markets. How well does “impact investing” work? Can investors really move large, powerful corporations to change their strategies? Politicians have so far failed to do precisely that.

Anaylysis: China Tests New ‘Digital Currency’ That Replaces Cash (WSJ Video)

China is testing a digital yuan, aiming to accelerate the replacement of cash and increase state control in a society where digital payments via Wechat Pay and Alipay are already the norm. Here’s what Beijing’s new system looks like—and how it would work. Photo credit: Florence Lo/Reuters

Investments: Why ‘Bitcoin’ Is Soaring In Value (Video)

The price of bitcoin is skyrocketing, driving a rally of momentum trading that’s pushed its value higher than it’s ever been before. WSJ explains how bitcoin trading works, and why the volatile digital currency is reaching all-time highs. Illustration: Jacob Reynolds/WSJ

Retirement: ‘How Social Security Works’ (Video)

Since 2010, Social Security’s cash flow has been negative, meaning that the agency does not collect enough money through taxes to cover what it is paying out. Even though there was still this vast trust fund behind Social Security, they started tapping that fund’s interest.

Starting in 2021, they will have to dip into the trust fund itself to cover those benefit payments, and even that pool of cash has an expiration date. Trustees of the fund expect that by 2035 it will not be enough to cover full benefit payments. Due to COVID-19, that date may come years sooner than expected, which has some retirees seriously worried about their future.

Covid-19: How To Spark Economic Recovery

Governments will have to deal with the economic fallout from the pandemic for decades to come. If they get their response wrong, countries risk economic stagnation and political division.

Read more here: https://econ.st/3ojORKY

Financial Videos: ‘Is Trump Or Biden Better For The Stock Market’ (CNBC)

The outcome of the 2020 election between Joe Biden and Donald Trump will likely have a major impact on the equity market. Although the economy has historically performed better under a Democratic president, that doesn’t always necessarily reflect on market performance. However, which party controls the White House can still be an important element for those looking to earn big in the market. So how does the U.S. election impact the stock market and how should investors prepare?