Money Management

Bitcoin recently reached all-time highs in March 2024. But this asset could be a risky bet for the future. See why Bitcoin skeptics are staying out. [[{“value”:”

Few types of investment assets get as much media attention, or create as much polarizing discussion, as Bitcoin. People who love and believe in Bitcoin tend to make big bets and bold predictions about what they believe to be a world-changing asset category, while Bitcoin skeptics are, well…skeptical.

On March 13, 2024, Bitcoin reached an all-time high price of $73,135. In the few weeks since then (as of April 5, 2024), it’s dropped in price by as much as 15.35% since that all-time high level. Does this mean that now is a good time to buy Bitcoin in 2024? Should we “buy the dip” and bet on future gains for cryptocurrencies?

I’m a Bitcoin skeptic. I’m not buying Bitcoin in 2024, even if it goes back to its recent all-time highs, or higher. Here’s why.

1. I don’t understand Bitcoin

Even now, after all these years, after all the media hype about Bitcoin, after many hours of reading about Bitcoin as a professional finance writer with a college degree who’s spent many years researching complex technical topics…I still don’t understand what Bitcoin is or what it’s supposed to accomplish. What is the “use case” for Bitcoin? What does it “do” in the real world? Why does it need to exist?

Probably the best explanation for what Bitcoin is (at least the one that I understand and agree with) is that it’s “digital gold.” It’s a speculative asset category that people buy because they like it and they believe it is valuable. OK, fine. I don’t buy gold or invest in other precious metals, either.

2. I want my investments to generate income

Bitcoin doesn’t pay dividends like stocks or generate income like bonds or have FDIC insurance and guaranteed interest rates like CDs or savings accounts. Bitcoin is a purely speculative asset: you’re supposed to want to buy it because the price has gone up (and the price has, since Bitcoin’s inception, gone way, way up!).

But I don’t day trade and I don’t invest based on the “greater fool” theory. I’m not trying to buy stocks just so I can sell them for a quick profit, or offload them onto someone else who will take the hit when the stock goes down. I’m a long-term investor. I’m patient. I’m not trying to beat the market or get rich quick, but I do want my investments to actually grow — based on real-life economic fundamentals, dividends, and compound interest. Bitcoin can’t give me any of that.

The stock market doesn’t always go up, and not every stock pays dividends. But in general, when you invest in a diversified portfolio of stock ETFs, you will get richer over time from your share of the profits of the many, many companies that you own. I’d rather have my stock dividends reinvested and quietly growing behind the scenes than worry about cashing in on a big one-time score from one risky asset.

3. I don’t believe in the investment thesis of Bitcoin

There are two main “theories” of why you should buy Bitcoin. They both can’t be true. Either:

“Bitcoin is the future of money and someday it will replace all currency,” or;”Bitcoin is gonna be worth $200,000 someday and it will be the most valuable asset ever!”

These contradict each other. If Bitcoin is going to be the most valuable asset, why would anyone ever spend it? If it’s the future of money, why are there only 21 million of them in the whole world? Money needs to be spendable; people have to agree to exchange it and accept it as a form of payment. Bitcoin is illiquid, hard to access, and of mysterious origins — I don’t see it replacing the U.S. dollar anytime soon.

4. I don’t invest based on FOMO

Fear of missing out (FOMO) is a bad reason to invest in anything. I truly try not to envy my friends or worry about what the loudest voices on social media are bragging about today; investing is a long-term marathon and I’m just trying to run my own race.

If I bought Bitcoin back in 2016? Yes, that investment would be worth a lot today. But even if I did buy Bitcoin early, I probably would’ve been one of those people who forgot their password and got locked out of their Bitcoin account. (Bank accounts don’t do this! If you forget your online banking password, the bank doesn’t delete your life savings!)

5. Bitcoin might never regain its all-time highs

Past performance is no guarantee of future results. “Bitcoin recently reached all-time highs” only means that Bitcoin was a good investment to buy in the past — but it doesn’t tell us anything important about what Bitcoin is going to do in the future. Lots of investments, individual stocks, housing markets, and entire countries’ stock markets reach all-time highs and then plummet, never to return to those high levels for many years. Today’s hot investment can be tomorrow’s embarrassing memory.

Bottom line

Investments go up and down in value for complex reasons. There’s no inherent reason why any single company stock or currency or cryptocurrency is going to be the inevitable, invincible future of the global economy. And who knows: maybe the Bitcoin true believers are right, and Bitcoin will defy all previous knowledge about how investing works, and how human behavior works, and how the global economy works! But I’m not going to make that bet.

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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 positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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Costco’s Kirkland Signature brand offers a world of value. Read on to learn more. [[{“value”:”

If you’ve ever wandered through Costco before, you’ve probably noticed the Kirkland label on a host of products. Kirkland is Costco’s signature brand, and you’ll find it on everything from cleaning supplies to paper products to baked goods.

As a frequent Costco shopper, there are certain Kirkland products I’ve really come to love. Here are some of my favorites — and why you might like them, too.

1. Kirkland Signature Cashew Clusters

When I’m sitting down to read a book at the end of a long, tiring day, I might stuff my face with anything from cookies to chocolate to ice cream (if there’s any lurking in my freezer). But during my workday, when my stomach gets rumbly, I need a snack that’s tasty but not overly loaded with sugar so I don’t risk that inevitable crash.

These Kirkland Signature Cashew Clusters do the trick. They’re sweet, but not too sweet, and they’ve got a nice amount of protein when you need a little jolt of energy.

Now I will say that from a crunch perspective, these aren’t for the faint of heart. If you’ve had recent dental work, these aren’t going to be a good bet. Otherwise, you may want to give them a try.

2. Kirkland Signature Sweet Heat Snack Mix

Just as the cashew clusters above make a great mid-day snack for me, so too does this Kirkland Signature Sweet Heat Snack Mix. It contains a mix of nuts and sesame sticks, and it’s sweet with a kick.

This could be a great product to pack for long hikes or car trips. If you’re someone who tends to need fuel before or after a workout, it could be a good pick as well.

3. Kirkland Signature Creamy Almond Butter

The first time I tried almond butter, I admittedly wasn’t a fan. I sort of saw it at peanut butter’s less tasty, but perhaps slightly more nutritious cousin.

But I guess tastes change, because these days, I’m all about the almond butter. And I’m definitely a fan of the Kirkland version. I find it to be smooth, creamy (not as creamy as creamy peanut butter, but we can’t have it all), and just plain tasty.

And the price happens to be outstanding, too. Online, you’ll pay the equivalent of $0.30 per ounce, and Costco’s prices are almost always cheaper in stores. By contrast, I’m looking at paying $0.49 per ounce at my local grocery store.

4. Kirkland Signature Wild Flower Honey

Some people will argue that all honey has the same taste. I’m here to say that that’s not true, at least not in my experience. And I happen to really like the taste of Costco’s Kirkland Signature Wild Flower Honey, which I put in everything from tea to baked goods to sauces for meats and fish.

I also happen to be a fan of the price. Online, you’re looking at $0.23 per ounce, and if you buy your Kirkland honey at a Costco store, you’re likely to pay even less. At my local supermarket, honey is $0.47 an ounce right now.

5. Kirkland gas

Okay, so this is one of those situations where my love for a Kirkland product is based solely on its price, since I can’t pretend to know the difference between one type of gasoline versus another. But in my area, there’s lots of savings to be reaped by filling up your car at Costco and buying Kirkland gas instead of filling up at a non-Costco station.

The only thing that does bum me out a little about Kirkland gas is that it’s not eligible for cash back as part of my Executive membership. Given how often I fill up, that would be a sweet perk. But still, the savings I reap on Costco gas work wonders for my budget.

These are only five of many products you’ll find with the Kirkland name. It pays to give Kirkland products a try because Costco really does stand behind the items it sells — especially the ones with its signature brand’s name. So if there’s ever a quality issue, you can rest assured that Costco will make it right. That makes trying Kirkland products a pretty low-risk proposition. And you may find that some of the products above fill a need of yours, while saving you money at the same time.

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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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CDs are a bad fit for 20-somethings with debt and low balances. Find out why Gen Z should consider investing money elsewhere. [[{“value”:”

Certificates of deposit (CDs) are hot right now. CDs let you lock in an interest rate, and the Federal Reserve has bumped its benchmark rate to historic highs, impacting consumer interest rates in the process. Some CDs offer APYs as high as 5.00%. Putting money in a CD is a simple way to earn good interest for anywhere from a few months to five years or longer. For some, it’s an easy call.

However, I’m telling my Gen Z friends to skip CDs and invest their money elsewhere.

Debt, especially debt stemming from higher education, is the hallmark of my generation, as are low savings balances. According to the latest Federal Survey of Consumer Finances, the median bank account balance of Americans under 35 is $5,400, and the median educational debt balance is $18,000! For my friends with debt, their goal is to remain financially stable long enough to pay off debt.

CDs are fine for diversifying investments and locking in great rates. But Gen Z has other priorities. Here are three reasons why I’m telling my 20-something friends, some of whom are still in college, to skip CDs in favor of more flexible and profitable places to put their money.

1. Unstable lifestyles

My friends and I know one thing for sure: We don’t know where we’ll be living a year from now. It’s a fact of life. We’re swapping between apartments to stay near college campuses and staying with family members for rental discounts. It’s messy, but it works.

The thing about CDs is they lock up money, typically for a few months to five years. They’re profitable but inflexible. When next year’s rent is a mystery, you want flexibility. CDs ain’t that. You can withdraw money from CDs early, but you’ll be on the hook for early withdrawal fees. Fees that eat into profits and defeat the purpose of investing in CDs to begin with.

Savings accounts better suit many Gen Z lifestyles. I’d rather my friends put money into high-yield savings accounts they can withdraw from penalty free, than into a CD that penalizes you for bad timing. Sure, my friends’ interest rates might drop, but at least they won’t be strapped for cash because they accidentally stuck rent money in a certificate of deposit.

2. Low balances

My Gen Z friends and I spend time studying or crawling up the career ladder. For the most part, we’re not raking in cash. Our checking account balances? Low. Our savings account balances? Lower. What money we have, we tend to put toward college expenses or paying down debt.

That leaves us vulnerable to financial shocks like unexpected layoffs or medical bills.

We’re young, but we know life hits you when you least expect it — it could be a bad time to have a big chunk of your savings locked up in a CD. A high-yield savings account is the more forgiving option. A savings account we call an emergency fund gives us the padding we need to survive big bills.

For those of us with cash to invest, putting money in a CD comes at a high opportunity cost.

3. Long investment horizons

Some of my Gen Z friends have low or zero debt. Others want to save money for the long term while simultaneously paying down their debt. To my friends who can stomach it, I’d typically suggest putting money not in a CD, but rather, in the stock market.

The stock market offers high returns over long time horizons. Since its inception, the S&P 500 has compounded about 7.4% percent annually on average. That’s a couple of percentage points better than what the best CDs offer.

Thing is, you’re more likely to earn big returns over long stretches. In that regard, my Gen Z friends have the advantage. In your 20s, you can often afford to let your money ride out the stock market’s crazy swings for 40 years or more.

Combined with investing best practices like diversifying and holding a comfortable emergency fund, investing in the stock market is a solid way to grow long-term savings.

CDs sacrifice flexibility for better rates

CDs can be great. If you’re saving up for a short-term purchase and want to earn a bit extra than you would from a savings account, a CD may be right for you. Uncertain? Feel free to freshen up on the difference between savings accounts and CDs. There’s more than one way to pad a bank balance — low or otherwise.

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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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Not a fan of your brokerage account? Read on to see what next steps to take. [[{“value”:”

Some people open their first brokerage account and stick with it for a while. But in time, you may come to realize you didn’t choose the best account in the first place.

Perhaps your brokerage account isn’t the most user-friendly. Or maybe there are fees that exist in your brokerage account, like an inactivity fee, that you can get out of paying elsewhere.

Also, while many brokerage accounts today allow you to invest in fractional shares so you don’t always have to commit to purchases of whole shares, some don’t. If yours is in the latter camp, you may want to move over to a brokerage account that offers fractional shares, as that could lead to better diversification in your portfolio.

If you’re not happy with your brokerage account, it pays to explore your alternatives. But here are two other moves you may want to consider as well.

1. Open an IRA

An IRA actually gives you less flexibility than a traditional brokerage account because there are annual contribution limits to stick to and rules to follow regarding withdrawals. With a regular brokerage account, you can save and invest as much money as you can afford any given year.

This year, IRAs max out at $7,000 for savers under 50 and $8,000 for those 50 and over. However, traditional IRAs serve the important purpose of exempting some of your income from taxes, since the money you contribute up to the aforementioned limits goes in tax free.

Also, you’re not taxed on investment gains in an IRA every year the way you are in a regular brokerage account. Rather, those gains are only taxed at the time you take withdrawals from your account, which should generally happen in retirement.

IRAs impose penalties for withdrawals taken prior to age 59 1/2 with a few exceptions. But an IRA could still be a smart move if you want access to a range of investment choices with limited fees.

2. Talk to a financial advisor and see what brokerage they recommend

Financial advisors are in the business of investing. It’s a good idea to talk to a financial advisor to ensure you’re on track to meet your long-term financial goals.

But while you’re having that conversation, why not solicit advice on a brokerage account to replace the one you currently have? Chances are, your advisor will have some good recommendations.

Of course, one option you have is turn your portfolio over to a financial advisor and have them manage it on a long-term basis. Doing so will cost you something — often, that fee is 1% of the amount of assets under your advisor’s watch. So if you have a $50,000 portfolio, you might pay $500 a year for that service.

However, it could be worth it, because from there, it will be the job of your financial advisor to monitor your accounts and add and remove assets as appropriate. And that way, you won’t have to be the one to navigate a new investing platform.

You shouldn’t settle for a brokerage account that’s tough to use, high on fees, and just plain not designed to meet your needs as an investor. Instead, explore alternatives and consider an IRA for the tax breaks involved.

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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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The big selling point of a hybrid vehicle is saving on gas. See how much savings that really means. [[{“value”:”

How much hybrid vehicles actually save on gas can be a bit hard to narrow down. It varies so much depending on the specific model hybrid, what vehicle you’re comparing it to — and who is driving them both.

That said, we can use some general data to get a rough idea of what a typical driver might expect. Here’s what we get.

Average gas savings: $532 a year

I think it’s fair to say many of us picture a Toyota Prius when we think of hybrid vehicles — and it’s still one of the best-selling hybrids on the market — so we’ll use that as our base model. The 2024 Prius advertises a combined 57 miles per gallon (57 city, 56 highway).

To make the comparison fair, we have to compare like with like. So, the best-selling gas-engine car on the market is the Toyota Camry. It advertises 35 miles per gallon, combined.

According to the Federal Highway Administration, the average driver covers about 13,596 miles per year. And AAA says an average gallon of gas will run you $3.55.

Using the above numbers, the Camry driver would spend about $1,379 per year on gas, while the Prius driver spends just $847 a year on fuel. That’s a savings of around $532 per year.

Other cost considerations

While saving $500 a year on gas is no small thing, make sure you’re considering all of the potential costs eating into that savings.

The big thing is initial investment. Buying a new hybrid will likely cost you $3,000 to $10,000 more upfront than a similarly equipped gas-only vehicle. (Plug-in hybrids can be even worse, though some qualify for tax credits.) Even at the low end of that spectrum, it would take you six years ($3,000 divided by $500 a year) to break even on the extra cost.

Additionally, while general maintenance is about the same, repairs may be more expensive (repairing hybrids can involve higher-priced parts and more specialized training). Then there’s insurance. The higher purchase price already means a higher insurance premium. But the higher repair costs will also add to the overall cost of your car insurance.

Are hybrids worth it?

Here are a few things to consider when deciding if buying hybrid is a good financial move:

What make/model are you buying? The specific model you pick will determine the efficiency and upfront cost.What is your current vehicle? If you’re going from a gas-powered car to a hybrid SUV, for instance, you may see less fuel savings than if you’re upgrading from a gas-powered truck to a hybrid car.Where do you do most of your driving? A hybrid will save you the most money on gas if you do the majority of your driving in the city.How long will you keep the vehicle? It can take years to recoup your initial investment through gas savings, so the longer you plan to keep the vehicle, the better.

You’ll need to do your own math, using your specific vehicle choices and driving habits, to determine if it’s a smart buy. You can use the EPA’s fuel economy calculator to help with your calculations.

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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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