Money Talks Blog by Oxford Planning Group

A Little History

By now most people have heard of Bitcoins and how those that were fortunate enough to invest in them at the right time may have made great profits. Bitcoins were the first established cryptocurrency and today there are currently more than 1000 different types of cryptocurrency, but Bitcoins are still the most commonly known name. Bitcoins became available to the public in 2009 and rivals started coming out in 2011. Over this time the price of bitcoins had been rising; however, in 2013 the price crashed. It wasn't until 2017 that we saw the huge growth in Bitcoin price before a steady decline in 2018. New cryptocurrencies are continuing to come out and more people are getting interested in learning about what they are exactly.

How are they Purchased?

Purchase directly from an exchange

• Expensive
• Number of risks:
  • Viability of the exchange
  • Legitimacy of exchange
  • Cybersecurity threats

Purchase through private fund (accredited investors only)

• Illiquid & expensive

You typically need to create a “wallet” before you can purchase any cryptocurrency. You register your identity and bank details to transfer money to buy cryptocurrency and the cryptocurrency is held in your “wallet”.

Potential Upside

• Decentralized – no single bank or single administrator. No “middleman” and no Federal Reserve.
• Reduced risk of manipulation from authoritarian governments
• Blockchain shows promise to transform major elements of the financial system
• Some experts claim that bitcoin will do to banking as email has done to the postal system
• Crypto assets challenge the model of state‐issued money and the dominant role of central banks
• Controlled by function of mining
  • Performed by “miners” – software solves math in exchange for currency
• Instant settlement of payments globally

Potential Downside

• Extremely volatile
• Short History
• Considered an Alternative Asset Class- allocations should be very small
• No central bank control which means no oversight – may present an unfair competitive advantage derived from lighter regulation (regulatory arbitrage ‐ when firms capitalize on loopholes in regulatory systems in order to circumvent unfavorable regulation)
• Touted as non‐taxed, but IRS Notice 2014‐21 provides the it be treated as property for federal tax purposes (investment income)
• Due to the mostly anonymous nature of the peer to peer electronic cash system, potential to facilitate illicit activities
  • NY Dept of Financial Services recently sent subpoenas to Bitcoin businesses requesting their policies to prevent money laundering and ensure consumer protections

End Notes

If you're really interested in cryptocurrencies and are considering investing in them, do your research! Find a specific one you want to consider and look into how long the currency has been around, how long the company has been operating, and volatility. Consider how much you are willing to risk for the investment because there are still many questions about safety and stability for any cryptocurrency.

Will cryptocurrency be the currency of the future? We think for now it is too soon to tell, and a lot of caution should be used with them.

Our generation has grown up in the height of social media, with the good and the bad. Social media has made it easier than ever to stay connected with friends and family. However, studies have shown that social media could be changing our spending patterns. 

How many times do you get onto Facebook or Instagram and see pictures from trips and wish you had an upcoming getaway? How many adds do you see in a typical day of social media usage?

Sneaky Advertising

Companies realize that social media can be a huge advantage for their marketing. Not only with the direct Ads you see but also through people's actual posts. Influencers, actors, and models are all targeted by companies to try to get them to advertise their product. What some people don't always realize is that they get paid to promote these products and may not always be giving honest reviews. Social media platforms are starting to create rules for these types of posts that require disclosure if the post was sponsored.

Schwab's 2019 Modern Wealth Survey found that 49% of millennials reported spending money on certain things due to something they saw on social media.

Take a look at the accounts you follow and see if any of them do more "advertising" than others. Do they post a lot of pictures with certain products as the highlight? Do they always link the clothes they are wearing in the description? Some people just genuinely want to share a cool product that they love. However, you need to be cautious when it's coming from someone with a big social media following.

Before you buy something, take a couple of minutes and think about:

• If you really need or want that item?
• Can you afford it without sacrificing something else?
• Are there cheaper alternatives of the same quality?

Do your research! If you see something advertised and really want it or do actually need it that's okay! Just make sure there aren't cheaper alternatives just as good and make sure what you're buying is good quality for the price.

Does it spark Joy?

Taking some advice from the now famous KonMari expert, think hard about your purchases. Sometimes it's useful to think about it for a week. If by the end of the week you still think it's worth it to you to spend the money, then go for it! Our brains can convince us that we really need things, when in fact the product just looks cool so you start rationalizing how much you need or want it. I know I'm not the only one to buy something just for it to be used once and then sit in a corner, never to be touched again.

Check out the survey listed below for some more statistics and information on how social media is impacting our generation's spending!

2019 Modern Wealth Survey: 

https://www.aboutschwab.com/modernwealth2019

With summer right around the corner, everyone is getting excited to enjoy the warm weather and go on vacation. Here are a few tips on how to plan for your own trip.

Plan early!Set a budget and start saving for the trip or maybe you already have some savings for vacation. Determine a realistic amount you feel comfortable spending (you don't want to undo all that relaxation time by stressing about finances when you return).

Consider the cost of:

• Lodging
• Transportation: Gas or airplane ticket
  • Local transport: Can you drive? Do you need to take a bus, train, ect.?
• Food (groceries and eating out)
• Daily Activities
• Shopping (souvenirs)

Location & Transportation

Obviously, the first decision should be where you want to go. Staying closer to home is generally a cheaper option because driving can often be a lot more affordable than flying. Consider the cost of other transport during your trip. Do you need to take a bus anywhere or a train? If you’re luckily enough to go somewhere that you can walk most places, then this cost will be minimal.

Lodging

Do you want to stay in a hotel, apartment, or house? Lodging can be the biggest expense for a vacation (unless you're camping!). If you’re looking for a really cheap option, consider camping with some friends. Some camp sites even have cabins you can rent if you’re not too keen on tent sleeping.

If you choose a hotel, look around at the best prices for places in the area you are staying and make sure to read the reviews as well. Consider going on a trip with friends and renting a place together either through a local rental service or Airbnb! This can cut down on the cost of a trip by a lot.

Food

Do you love to eat out? Plan specific nights you want to eat out and other nights make simple meals that are easy to prepare to save money. Taco night is always a great go-to for vacation, set out ingredients and let everyone make their own! Pack snacks and small sandwiches for day adventures if you don’t want to eat out for lunch.

Daily Activities

If you’re not the type to just sit on the beach all day during vacation, consider looking on sites like Groupon or even Airbnb for activity discounts during your vacation. You can find some cool options that you may have not even thought about before and save money.

Travel Points

If you happen to have a credit card that gives you travel points, look into different options and see how many of them you could use for your upcoming trip!

Weekend Getaway

If you don’t want to or can’t take a full week off of work, consider just doing a weekend trip. They can give you the break you need while also being more affordable. Take off one or two days to give yourself some extra time and find a destination not too far away to get the most out of your time. 

Going Off Season or “Shoulder” Season

Peak season for summer vacation destinations is mid-June to August. April to mid-June and September through October is known as Shoulder Season. This is when the weather is still warm but there are a lot less people vacationing, and prices are usually cheaper! Look at the prices for hotels and house rentals during these times to compare to what you would pay mid-summer.

Hopefully some of these tips can help you plan the vacation you deserve. Having fun while not breaking the bank is the best kind of relaxation there is!

There are tons of different credit cards available today, many offering some type of reward or benefit with them.  What's the best one to have, though? That really depends on your personal spending habits.

Each credit card sponsor company will have descriptions for each card that should include:

• Annual Fee
• Annual Percentage Rate (annual rate charged for borrowing money)
• Rewards
• Foreign Transaction Fees
• Fraud Coverage
• Other important details: account alerts, autopay features, Apps for your account

To determine which type of card is best for you, figure out what you spend most of your money on. Some cards offer more rewards for dining out or traveling, while others just give a percentage of purchases back in cash. It's a good idea to keep notes of the benefits of each card you look at to compare and decide which will be the best for you. Some companies even have calculators for how much you can earn in rewards by estimating your monthly spending on your credit card.

If you pay your card off fully every month:

• Cash Back Cards
• General Rewards Points
• Travel or hotel Points
• Gas Points
• These cards offer a variety of rewards, if you really can’t choose between two, see if one gives a better sign on bonus

If you have credit card debt or usually carry a balance:

• Balance Transfer Cards
• Low Interest Credit Cards
• Check out the credit card pay off calculator here on the site as well:
  • https://www.oxfordplanning.com/resources/calculators?view=calculator&id=10

If you travel a lot:

• Airline specific cards
• Generic airline miles cards
• See our previous Seasoned Savers blog post on reward miles
  • https://www.oxfordplanning.com/blogs/blog/entry/credit-card-reward-miles-not-always-what-they-appear-to-be

Retail Cards:

• Usually easier to get if you are just starting out and don't have much credit history
• Having multiple store cards could hurt your credit though

Things to look out for:

• Cards that have an annual fee- some waive the fee at first and then you have to start paying one after the initial year is up
• High APR- even if you pay off your card on time every month, you could always forget at some point

It can be a little overwhelming with the amount of credit cards available today. Take your time, make comparisons, and slowly determine which is best for your personal needs.

An article from CNBC states that 49% of millennials spend more on eating out than they put into retirement accounts. How many times have you cooked something only to go out to dinner the next night and forget about the leftovers until they've gone bad? I know I have, many times. Not only is this a waste of great food, it's a big waste of money.

Meal prepping has become popular over the last couple of years and there are tons of books, blogs, and videos about it.  

Let's start by looking at three questions:

• How much do you currently spend on food?
  • Take note on your major spending areas. Is most of your food money going to groceries, eating out, or coffee?
• How much do you want to be spending on food?
  • Set a goal to reach for each week or month and build your meal plan around that.
  • Cut out easy things for yourself like coffee from Starbucks or fast food.
• How much actual "prepping" do you want to do?
  • There are different levels to this. You don't have to go all out like some people do.

Make a Plan:

• Pick out the meals you want to have for the week (how many breakfast, lunch, and dinners do you need?)
  • You can easily google "Meal Prepping for… and insert you budget and get tons of recipes, just use key words added on for your ideal meals like "vegetarian" "quick" "healthy".
  • YouTube has tons of great videos for meal prepping or just cooking in general that take you step by step through the recipes.
• Put together a grocery list.
  • Find recipes that share ingredients to prevent waste and overspending.
  • Use your grocery store’s app (if they have one) to get an estimated total for your shopping
• Plan your days to eat out.
  • Instead of eating out when you just didn't feel like cooking, save it for nights when you want to do something special or just have some fun and relax.

How much to Prep:

• If you looked at the third question from earlier and sighed at the thought of meal prepping everything you are going to eat, break it down a little! Prepping can be as easy or labor intensive as you want.
  • Try simple breakfasts like oatmeal or muffins and sandwiches for lunch for a little so you mainly have to focus on prepping dinners.
  • Or instead of cooking everything one day, you could do all the chopping and marinating and save the actual cooking for the day of.
• Pick a time and day to do your prepping & plan out what you want to get done.
  • Maybe you just want to cut up all the veggies you need for the week and cube some chicken to marinate.
  • Basically, do however much or little prepping you want that will make you more likely to stick to your plan.
• If you find yourself getting overwhelmed, look for easy recipes.
  • YouTube, Pinterest, and apps are my go to for easy recipes.
  • The Tasty app has a search for 30 minute or less meals and 5 ingredient or less meals.
  • Use frozen vegetables for easier cooking! I hate chopping onions, so I buy them pre-chopped and frozen and I am 10 times more likely to cook with them.
  • Lastly, Crockpot recipes are a true lifesaver.

Meal Subscription Services

• Meal services have been popping up all over the place, I’m sure you’ve seen the ads about how easy they make cooking and how much time they save.
• While these can take save you time, they won’t save you much money.
• I looked at three popular brands and each had servings around $9-10 (which isn't cheap compared to buying your own ingredients).
• While I would not consider these a good option over grocery shopping and meal prepping yourself (you can make the meals much cheaper) – it could be a good option once in a while if you choose this over going out to eat at a mroe expesive resturant. 

Overall, be flexible and realistic. Meal prepping can take some time, but it can also save you a lot of time and money later!