Money Management

The U.S. government doesn’t like what it sees. 

Crypto is in the penalty box right now. The treasure chest of promising coins has been knocked on its back by the industry-shaking collapse of giants like FTX and Celsius, which filed for bankruptcy one after the other due to bad luck and poor management.

Crypto isn’t dead, but it is down hard. According to Pitchbook data, from the third to the fourth quarter of 2022, venture capital crypto investments fell almost 50%. Talk about a fall from grace.

Kevin O’Leary, investment guru and Shark Tank personality, recently discussed why big investors have moved away from crypto and where they’re headed next.

Kevin O’Leary thinks big investors are ditching crypto

In an interview he posted on Twitter, O’Leary said, “Venture funding for new #crypto projects is virtually dead and aftermarket trading for existing projects is at massive discounts.”

That’s not entirely true. According to Pitchbook data, VC firms like Coinbase Ventures and Shima Capital continued to invest in crypto projects as recently as February. But O’Leary is correct in saying wealthy investors have begun to regard crypto as a money trap.

Why the sudden change of heart? O’Leary explained, “The #regulator is now regulating by enforcement, penalties & massive fines.” He claims the FTX collapse prompted the Fed to act.

Brief background: In 2022, crypto firms collapsed like dominos, taking billions of dollars with them. FTX, Alameda Research, Terra, Celsius, Voyager Digital, and Three Arrows Capital all imploded. Even individual investors lost money, sometimes thousands of dollars, overnight.

The “enforcement” O’Leary warned investors of includes millions of dollars in fines and shutdown of coin issuance. For example, the U.S. Treasury fined U.S. crypto exchange Bittrex over $50 million for violating money laundering laws.

Not even the biggest, baddest names in the crypto universe have escaped crackdowns.

The Securities and Exchange Commission (SEC) sued Binance, the biggest crypto exchange in the world by volume, for offering unregistered securities and violating investor protection laws. Then the New York Department of Financial Services forced Binance to stop creating its own currency ($BUSD).

It’s no wonder investors are running away from crypto. But VC investments are still booming. “The venture community has moved on to the next ‘big’ thing, #AI,” said O’Leary.

The investment guru was referring to fancy new AI-powered technology like ChatGPT and Midjourney, which have captured the hearts of millions with human-like interactions and jaw-dropping images.

Regulation means less volatility

I’ve watched my crypto investments shrink since mid-2021. Drama in the crypto universe is partly responsible. As O’Leary said, the U.S. government is tightening its belt and drawing out the big guns. Regulation looks imminent.

That’s not necessarily a bad thing, though. For crypto to stop being a Wild West of investment dollars, laws must be passed to make crypto safer for users and platforms. Regulation makes crypto predictable, and predictable means less volatility.

We’ll have to wait and see what the rest of the year brings. If you own crypto, know that the laws regarding its use will likely change. Potentially, crypto will be more taxed, more stock brokerages will offer crypto services, and it will be harder for companies to issue coins.

And for now, big names will continue to be cautious about investing in crypto. For individual investors, crypto remains a high-risk investment.

Alternatives to crypto investment

If U.S. regulators make crypto less appealing in general, then the value of coins may drop. An alternative to crypto is the stock market.

The U.S. stock market is more predictable and beginner-friendly than crypto. It has returned an average of 10% per year over the past 50 years. Beginner investors can buy shares of great companies through the best brokerages out there.

Though promising, crypto is volatile and largely unregulated. Start with the most reputable coins in the crypto market, Bitcoin and Ethereum. Limit your crypto investment to less than 5% of your portfolio to maintain stable returns and cushion potential losses.

Crypto isn’t dead, but the shine of coins has dulled considerably. Take a note from the pages of big investors like those O’Leary follows, and be cautious when investing in cryptocurrencies.

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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.Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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They’re important ones to ask. 

At this point, many people are deep in the throes of getting their taxes together. And if you feel that you’ve gotten in over your head, you may be looking to find an accountant to help you finish the job.

But you don’t want to hire just anyone. In a recent blog post, financial expert Dave Ramsey talked about the importance of having an accountant to help with a small business and ran through some questions to ask before hiring one. But even if you’re not a small business owner, it pays to ask these questions when searching for an accountant.

1. How long have you been doing this?

You probably wouldn’t want a doctor who graduated medical school yesterday to perform a complicated surgery on you. Similarly, it stands to reason that you’d want an accountant with a decent level of experience. This doesn’t mean you should only hire someone with a decade of experience or more under their belt, but someone brand-new without a seasoned partner may not be your ideal choice.

2. Are you available year-round?

You may need help with your taxes ASAP so you can complete your return before the April 18 filing deadline. But the reality is that you never know when you might need tax help at another time, so it pays to hire someone whose office is open 12 months a year, and not just during tax season.

3. Can you help if I run into an issue with the IRS?

You never know when the IRS might opt to audit your tax return. In many cases, an audit simply means having to provide the IRS with more information. In other scenarios, it could mean having to part with more of your money. That’s why it’s important to find an accountant who’s willing to help you if you wind up getting audited or running into another problem where you need professional advice and representation.

4. Who will I be working with?

Many accountants don’t work alone. Rather, they have partners, assistants, and other support staff. This is not necessarily a bad thing. Quite the contrary — the more people there are to help out, the better the service you might get. But it’s a good idea to know what that setup looks like.

5. How much do you charge?

This might seem like a tacky question, but actually, it’s a very reasonable one. You don’t want to overpay for tax or financial help, but an accountant whose rates are unusually low might raise a red flag, too. Ask this question, but also, compare it to other quotes to get a sense of whether the number is reasonable.

But don’t just ask about the cost to complete a tax return. A good accountant might be able to help with other financial planning matters, like maxing out your IRA account or taking steps to reduce your tax liability year-round. So find out what fees you’re looking at for other services you might need.

If you’re going to use an accountant, it’s important to find the right person for the job. Asking these questions could make you far more comfortable with your decision.

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It might take some time, but it is possible to get out of credit card debt. 

The latest credit card debt statistics are staggering. Americans now owe a collective $986 billion to credit card companies as of the end of 2022, according to the Federal Reserve Bank of New York. That’s a new record high, and even if you only make up a tiny sliver of that, it can still cause a lot of stress.

Credit card debt isn’t always easy to get out of once you’re there, but it is possible. Here are three things you can try.

1. Rework your budget

You need extra cash in order to pay back your credit card debt, and there are a few ways you can get it. First, you could reduce your monthly spending. Cut out discretionary purchases, like dining out, and put that extra money toward your debt repayment.

If this isn’t doing enough for you, try increasing your income as well. You could do this by working overtime at an existing job, negotiating a raise, or starting a side hustle. You could also apply for better-paying jobs elsewhere. Again, put any extra money you bring in toward your debt repayment first. When that’s done, you can start spending the extra or saving it for other goals.

2. Use a balance transfer card

Balance transfer credit cards temporarily halt the growth of your balance so any payments you make go toward the principal. The length of time you have until your balance begins accruing interest again depends on the card’s 0% introductory APR period. Some may only last for a few months while others can last more than a year. Try to choose a card with an introductory APR period that’s long enough to enable you to pay back all your debt.

Note that you’ll pay a fee in order to do a balance transfer, and you can’t transfer a balance to a new credit card with the same issuer you already owe. Also, if you don’t repay the full balance before the introductory APR period is up, your balance will begin accruing interest again.

You can find balance transfer cards with just about any popular credit card issuer. But don’t expect much in the way of rewards. The 0% introductory APR is their key draw. Once you’ve paid off your debt, you may wish to switch to a rewards credit card instead so you earn a little back on your purchases.

3. Try a personal loan

Personal loans are unsecured loans — loans that don’t require collateral — that you can use for just about anything, including debt repayment. It’s often possible to borrow thousands or even tens of thousands of dollars, depending on the loan provider and your credit. This gives you a predictable monthly payment, so you don’t have to worry about additional interest charges on your credit card. You’ll know exactly what you have to pay each month and how long until you’ll be debt-free.

Personal loans still charge interest, though, and their rates can be higher than many other types of loans, like auto loans or mortgages. This is especially true for those with poor credit scores.

The lender may charge origination fees as well. These can vary depending on the size of the loan and the lender. It’s a good idea to compare options from a few companies before deciding which you’d like to work with.

Stick with it

Unless you happen to win the lottery, you probably won’t pay your credit card debt off overnight. And that’s OK. Accept that it will take time, and don’t let that discourage you from trying. Weigh the strategies above and decide which works best for you. Then, give it a shot. You can always try something different down the road if your initial approach doesn’t pan out.

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Women’s History Month is a great time to celebrate ECOA. 

A lot of people have big financial goals, and I’m no exception. I’m currently focused on saving money to buy a home, and I’ll be making that purchase on my own, without anyone else’s financial assistance. But 50 years ago, I might not have been able to get a mortgage loan in my own name, thanks to being a woman. The Equal Credit Opportunity Act (ECOA) changed that, though. Let’s discuss the legislation and how it impacts the lives of ordinary Americans.

The Equal Credit Opportunity Act

The ECOA was passed by Congress in 1974, and it was landmark legislation for civil rights. Prior to its passage, lenders could and did discriminate against potential borrowers for reasons beyond their creditworthiness, such as their sex, marital status, race, and religion. This meant it would have been a lot more difficult, and perhaps impossible, for certain Americans to qualify for a mortgage loan, credit card, auto loan, or any other opportunity to borrow money.

Since you build credit by borrowing money and showing lenders your ability to pay it back on time and in full, this left a lot of Americans without the ability to build a solid financial footing. Bear in mind, lenders are still allowed to deny you credit, but it must be for a reason such as having a low credit score or not enough income to pay back a loan. And thanks to the Fair Credit Reporting Act of 1970, they must notify you in writing and provide information about why your application for credit was denied.

If you’re anyone other than a white man, you can thank ECOA for the credit cards in your wallet, the bank accounts in your name, and the mortgage loan you make payments on every month. And since March is Women’s History Month, now is the perfect time to celebrate this legislation.

Steps women should take to buy a home

While women can’t legally be discriminated against in our quest to buy homes, there’s still a lot that goes into a home purchase. If you’re like me and dreaming about future homeownership, have a look at this to-do list to be sure you’re in the best position to buy.

Truly understand the costs: Buying and owning a home isn’t cheap. Before you make the leap, crunch the numbers and dig into your budget to be sure you can afford not just a mortgage payment, but also taxes, homeowners insurance, and maintenance costs.Get your credit in good shape: Your mortgage application can’t be denied because you’re a woman, but it can be if your credit isn’t sufficient to qualify. Get a copy of your credit report and see if you find errors that can be removed. Focus on paying down debt and making on-time payments and watch your credit score rise.Save a down payment: If you can make a 20% down payment on a conventional loan, you won’t have to pay for mortgage insurance. Plus, if you make a low down payment, you’ll risk ending up underwater on your home loan.Shop around and get pre-approved: Different mortgage lenders offer different rates and different types of mortgages. It’s in your best interest to speak to a few lenders and see what they can offer you. And getting pre-approved can give you the edge over other buyers, as a home seller will be able to see that you’ve got the financial footing to back up your offer.

This Women’s History Month, take a little time to appreciate how far we’ve come, and gear up for how far we’ve still got to go (such as remedying that gender pay gap, for example). And if you’re hoping to buy a home on your own, like I am, thank ECOA for giving you the opportunity.

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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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If you follow a gluten-free diet, Costco has you covered. 

Following a gluten-free diet isn’t always easy. Gluten-free food commonly costs more than food that doesn’t have to accommodate special dietary needs, so if you buy it constantly, your credit card bills might be huge.

Now, you’ll often hear that buying groceries in bulk is a great way to spend less on food. And the less you spend on food, the more money you can pump into your savings account.

Thankfully, Costco carries a number of gluten-free products you may want to scoop up. Here are six you should know about.

1. Milton’s Gluten Free Crispy Sea Salt Baked Crackers

Sometimes, you just need a good cracker to snack on in the middle of the day. Well, it’s Costco to the rescue with a bulk bag of these Milton’s beauties. Dip them in hummus (which is commonly gluten free by nature) for a satisfying snack.

2. Namaste Gluten Free Perfect Flour Blend

Baking can be a challenge when gluten isn’t an option for you. Costco stocks Namaste gluten-free flour in bulk so you can whip up your own cakes, breads, and breakfast foods. And best of all, this flour blend is free of nuts, which is worth noting since many gluten-free flours aren’t.

3. Kind Mini Bars, Variety Pack

Sometimes, you need a snack that’s quick, easy, and packed with protein. These miniature Kind bars fit the bill. They’re gluten free, low in sodium, and don’t have a ton of added sugar. The variety pack includes caramel almond and sea salt along with peanut butter dark chocolate.

4. Popchips Potato Chips, Variety Pack

If you have kids who need or want to eat gluten free, you might struggle to come up with quick, easy snacks to send to school or take on outings. These Popchips fit the bill, though. They’re not only gluten free, but free of trans fat. Costco sells a variety pack that consists of sea salt flavor, barbecue, and sour cream and onion.

5. Kirkland Signature Protein Bars

Protein bars can come in handy when you need a quick breakfast on the go or when you need to eat something before a workout. Costco’s Kirkland brand protein bars come in cookie dough and chocolate brownie flavors and are certified gluten free.

6. Kirkland Signature Almond Flour

Almond flour can be a great substitute for traditional flour, provided you don’t have a nut allergy and there isn’t one in your household. Costco’s signature Kirkland brand tends to be more affordable than name brands, so this almond flour shouldn’t break the bank.

These six items are only a few of many you can find at your local Costco warehouse club store or online (keep in mind that in-store prices will generally be more competitive than online ones, so if you’re able to do your Costco shopping in person, you might reap more savings). If you follow a gluten-free diet, it pays to keep a running tab of the products Costco carries so you know what to stock up on.

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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 no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Financial advice is all over social media, but be careful who you listen to. 

Move over, financial advisors. Social media platforms have become the first place younger generations turn to when looking for personal finance advice. Among millennials and Generation Z, 79% have gotten financial advice from social media, according to a survey by Forbes Advisor.

They seek out advice on a broad range of financial topics. Investing in stocks and bonds was the most common choice, with 57% of young adults saying they used social media to learn about this. Personal budgeting (51%), passive income (49%), reducing debt (40%), and building or improving credit (37%) rounded out the top five topics.

This may sound like a recipe for disaster. That’s not always true, but there are some definite dangers to learning about money on social media.

Can you trust financial advice from social media?

The financial advice on social media runs the gamut in terms of quality. Some of it’s excellent. Some of it’s okay, or could be useful for certain viewers, but not everyone. And some of it’s just flat-out terrible, or simply a scam designed to make money for the content creator.

There are a few reasons why it’s risky to trust financial advice on social media:

Anyone can be a “finfluencer.” There’s no vetting process, and it’s easy for people on social media to lie about their qualifications or financial success. Since there’s no barrier to entry, many of the people giving out advice really aren’t qualified to do so.Content creators don’t always have your best interests at heart. Some are looking to make money at their audience’s expense. They may do this with outright scams, such as crypto pump and dumps. Others promote dubious financial products, like the many life insurance agents offering policies with huge fees.Sensationalist content brings in the views. This often leads to inaccurate information making the rounds, like last year’s warning on TikTok that cash was going away.

However, it’s not all bad. There are plenty of people who provide useful financial advice. And there are some advantages to learning about money on social media.

One of the biggest benefits is that you can get financial advice in a format you’re comfortable with. If you like using Reddit, you can go to the subreddit for the financial topic you’re interested in, such as investing, credit cards, or personal finance in general. If you’re a fan of TikTok, you can follow reputable financial influencers there.

Social media is also giving more people access to financial information. Among those surveyed by Forbes, 78% said they believe they have more access to financial advice than they would have in the past due to their identity (race, gender, or income). And 76% of millennials and Gen Z believe social media has made it less taboo to talk about money.

How to stay safe when using social media for financial advice

There’s nothing wrong with using social media to learn about finances, if that’s what works for you. But you need to know how to do this safely so you don’t lose money because of lousy advice.

Here’s the most important thing to remember: Research advice and make sure you fully understand it before you follow it. Never follow advice just because one influencer says it’s a good idea.

For example, if you see a video recommending a specific investment, look it up yourself. See if any experts have talked about it, and evaluate the pros and cons of that investment. Make an informed decision based on your own research.

Also, do your homework on the person providing the advice. Google them to check if they have credentials, such as awards, education, or any sort of background in personal finance. This is a great way to find quality financial influencers to follow.

Even if opinions are divided on using social media for financial advice, people are doing it, and it’s almost certainly going to become more and more common. The key is knowing how to separate the good advice from the bad. If you do that by double and triple checking information, then social media could be a useful tool for getting better with money.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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