Money Management

Meta is experimenting with a performance-based payout model for its Facebook Reels. Learn what that means for short-video creators. 

Look out TikTok, Meta’s new payout system for short videos may just give you a run for your money — and it may give influencers a way to run with their money, too. While the system is still in beta, it could finally solve a compensation issue that has long frustrated short-video creators: how to get paid for top short-video content that, to put it bluntly, is making TikTok, YouTube, and Meta filthy rich.

What is Meta’s new payout system?

In short, Meta wants creators to get compensated for the performance of their Facebook Reels — the short videos designed to compete with TikTok’s mesmerizing cascade of clips.

Currently, eligible influencers — that is, those who have been invited by Meta — can only earn money on Facebook Reels by overlaying short videos with non-intrusive banners or sticker ads. In exchange for displaying the ad on their Reels, Meta shares some of the advertising revenue, around 55% of it, according to TechCrunch.

The new payout system, however, would reward influencers based on how many people view their Reels, not necessarily displaying ads. And if that sounds familiar, that’s because this isn’t the first time Meta has tried to monetize a Reel’s performance — though perhaps this payout system will last longer than the last.

In December 2021, Meta introduced its first bounty-system for views on short videos: the “Reels Bonus” program, which was discontinued on March 9 of this year. The Bonus program awarded influencers for engaging content that drew a certain number of viewers within a deadline, like getting a million views over 30 days. Later, the program also included “challenges,” which paid influencers for hitting short-term goals within the month, like getting 100 views on 5 Reels.

The new payout system is similar to the Reel Bonus program, but with this difference: instead of dangling a carrot, Meta appears to be monetizing views directly. While Meta has not given details on how this system would work, it told Fortune that its aim is to help influencers “focus on creating engaging content” and leave the advertising optimization up to Meta’s team.

What does this mean for creators?

Even though Meta’s new payout system has not been firmly introduced, it’s a good sign that it — and other social media platforms — will start rewarding creators solely for the content they’re producing. This means influencers can finally get rewarded for producing high-quality Reels, no matter how much advertising revenue Meta makes on them.

It also means that those who lost income when Meta’s Reels Bonus program ended might be able to strengthen their personal finances in the future, if Meta goes through with introducing the new payout system.

Finally, it shows that Meta is continuing to prioritize short videos to remain competitive with its rivals, TikTok and YouTube, who are also trying to draw short-video creators to its platforms. While these platforms haven’t historically paid as much for short videos as longer ones, their high demand could finally make them a profitable enterprise for influencers.

Like the Reels Bonus Program, this new payout system will likely be invite-only. However, if it succeeds in drawing high-quality content to its platform, there’s no telling how widely available Meta might make it.

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Being underwater on a mortgage isn’t ideal, but it’s not always a problem. Read on to learn more. 

These days, many U.S. property owners are sitting on their fair share of home equity. In fact, U.S. homeowners with mortgage loans — roughly 63% of property owners — saw their equity increase by $1 trillion between the fourth quarter of 2021 and the fourth quarter of 2022, according to CoreLogic.

But what if you’re in the opposite boat? What if you have negative equity in your home because its value has dropped since you bought it?

If you have negative equity in your home, you might hear that you’re underwater on your mortgage. And that’s not an ideal situation to land in. But it really only becomes problematic if you have to sell your home.

It’s not a problem if you’re staying put

When you’re underwater on a mortgage, it means that you owe more money on your home loan than what your home is likely to sell for. That could be a problem if you’re struggling to keep up with your mortgage payments, or if you need to sell your home for another reason, such as to take a job in a different city or move to be closer to family.

Let’s say you owe your lender $300,000 on your mortgage, but the market value of your home has dropped to $275,000. In that case, if you can only sell your home for $275,000, you’re $25,000 short. You’d risk having to write a check out for that amount to your lender, which clearly isn’t good. And you may not have that kind of money to begin with.

But while being underwater on a mortgage is a dangerous thing when you need to sell your home, if you’re planning to stay put, it may not be such a problem. Let’s say your home is only worth $275,000 now, but it holds steady at that value for a number of years. Meanwhile, let’s say you keep paying your mortgage all those years, eventually whittling your balance down to $250,000. If, at that point, you need to sell your home and can only get $275,000 for it, it’s not a problem, since that would be enough to satisfy your outstanding mortgage balance in full.

How to avoid being underwater on a mortgage

In some cases, people end up underwater on a mortgage because they make small down payments and the value of their properties drops shortly after they buy their homes. You can’t necessarily control the latter — that’s a matter of demand and market conditions. But you can make an effort to come up with a larger down payment on a home, or to hold off on buying one until you’ve saved more money to put down.

Being underwater on a mortgage could put you in a tough spot if you suddenly need to sell your home and don’t have time to wait for its value to come up. So it’s best to do what you can to lower your chances of ending up with negative home equity in the first place.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Many international merchants give you a currency conversion option when making a purchase. Learn how this adds a costly extra fee to the transaction. 

It’s a seemingly harmless question you run into when abroad. During the checkout process, the cashier asks if you want to pay in the local currency or have it converted to U.S. dollars. It can also happen at ATMs, with the machine giving you the option of proceeding with your withdrawal using either currency.

This is known as dynamic currency conversion (DCC). Not all international merchants offer it, but many do. At first, it might sound convenient to figure out how much you’re paying in your own currency, without needing to check your credit card statement later or do the math yourself. But despite the convenience factor, you’re much better off saying no.

How dynamic currency conversion costs you money

While DCC is more convenient, it’s also more expensive. The amount you end up paying almost always includes a markup on the normal exchange rate.

It’s no small fee, either. To find out how much DCC costs, German organization Stiftung Warentest sent investigators to 11 countries where DCC was offered. It found that in all cases where DCC was used, the price consumers paid increased, by amounts ranging from 2.6% to 12.0%. There have also been reports of more extreme examples, including DCC rates as high as 18.0%.

In fairness, when you choose DCC, you see exactly how much you’re going to pay. There’s no deception involved in the pricing. For example, if you’re shopping in Europe, you might see something like this on the card reader as you checkout:

Option A: 200 EurosOption B: $242

Not everyone realizes that they’re paying a premium for the currency conversion. After all, unless you know the current exchange rate and you do the math yourself, it’s hard to tell that you’re getting the short end of the deal.

You’re essentially paying extra just so you can see a price in dollars when you make your purchase. It’s not worth spending more for such a small benefit.

Even if you’re trying to keep track of your spending, you can view transactions made with your credit cards and debit cards right away. These show up as pending transactions in your banking apps. The exact amount won’t be 100% accurate until the transaction settles, but you can still get a fairly accurate idea of how much you’re spending this way.

What to remember when paying abroad

There are several fees that can cost you extra when traveling internationally. Fortunately, these are avoidable. Here’s what to do so you don’t end up paying more than necessary.

Pay for purchases with a credit card that doesn’t have a foreign transaction fee. Some credit cards charge extra, normally 3%, for foreign transactions. Make sure to stick to no foreign transaction fee credit cards while abroad.Choose a bank that reimburses ATM fees. You typically get a better exchange rate by withdrawing cash in the local currency at an ATM instead of using a money exchange. ATM fees can change the equation, so get a bank account that reimburses them. Check out the best banks for international travel to see some great options.Always decline dynamic currency conversion. Let your card’s payment network handle the currency conversion. It’s almost guaranteed to give you a much better exchange rate than you’d get through DCC, especially if you have a card with no foreign transaction fee.

Declining DCC is easy. If the person charging your card asks if you want to pay in the local currency or U.S. dollars, just tell them you want to pay in the local currency. If you’re at an ATM with DCC or making selections on a card reader yourself during the checkout process, you’ll be presented with two pricing options, one in each currency. Select the option for the local currency, and you’re good to go.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Want to shower a special graduate with a nice gift? Read on to see how Costco has you covered. 

Graduating college is a huge milestone. If you have an important person in your life who just got their degree, you may want to give them something special as a way of saying congrats.

One of the best gifts you can give a college grad is money so they can open or pad a savings account and have a financial cushion as they kick off adulthood. But if you’d rather hand over something more fun, you could consider one of these gifts from Costco.

1. A MacBook Air

Having a reliable laptop is an important thing when you’re a recent graduate looking for work. And it could also come in handy if you’re looking to become self-employed.

If you need a great gift for a college graduate who’s important in your life, then you may want to consider a laptop. Right now, Costco is offering $150 savings on a 13.3-inch MacBook Air. In some markets, that might bring your price down to $799.99 (though you should be aware that Costco prices can vary regionally, even for online orders, so you’ll need to check your local warehouse club store or input your ZIP code online for the most accurate pricing).

Best of all, when you buy electronics at Costco, you get the benefit of a two-year warranty and free tech support.

2. Bose noise-canceling headphones

Whether you know a new grad who’s looking to work from home, an office, or their local coffee shop, noise-canceling headphones make a terrific gift. Right now, Costco has the Bose QuietComfort 45 SE Noise Cancelling Over-the-Ear Headphones available for $299.99 in some markets. They offer up to 22 hours of battery life.

3. An Apple Watch

A nice watch is a great gift for graduation or another big milestone. But let’s face it — these days, college grads want the technology, too. So rather than get your favorite grad any old watch, you may want to spring for an Apple Watch.

Costco is selling the Apple Watch Series 8 with GPS for $389.99 in some markets. Its features include a built-in ECG, safety features like fall detection, and blood oxygen monitoring. It also includes different modes that can help any fitness enthusiast meet their training goals.

4. An air fryer

If your recent college graduate is getting their own apartment for the first time, they’ll need not just furniture, but kitchen supplies. And an air fryer makes a great gift for someone who may be getting used to the idea of having to cook their own meals all the time.

Right now, Costco is offering $50 off of the Ninja Foodi 10-in-1 Smart XL Air Fry Oven. That brings the price down to $199.99 in some markets. This device can not only air fry, but also broil, toast, reheat, and more. And it’s large enough to fit up to a 12-pound turkey, in case you’re keeping score.

5. An electric scooter

If your recent college grad is moving to a big city, they may not want to take a car with them (or bear the expense of auto insurance) if parking is tough and public transportation is abundant. And so an electric scooter could make an awesome gift.

Costco is selling the Phantom A8 Smart Electric Scooter for $449.99 in some markets. It features a 350W electric motor and has a range of up to 25 miles.

It’s not every day that your child, grandchild, niece, nephew, cousin, or long-time family friend graduates college. And so if you’re looking for a gift that will wow a special graduate in your life, it pays to consider these Costco finds.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Apple. The Motley Fool has positions in and recommends Apple and Costco Wholesale. The Motley Fool has a disclosure policy.

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