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U.S retail sales slow to bounce back as COVID winter approaches

(BUSINESS FINANCE) U.S. retail sales aren’t coming back as many had expected, as the nation braces for wintertime with COVID-19.

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Discount signs over retail sales and clothing

To some of us, buying anything except essentials during this time seems insane. To others, who’ve been padding their savings account with money that might have otherwise been spent on going out to eat, travel, concerts, etc., shopping in retail sales has been a source of therapy.

Regardless of what side of the fence you’re on, U.S. retail sales as a whole increased less than expected in October – and, as COVID-19 hits its third wave in the States, it could slow even further. As of now, the number of national cases has surpassed 11 million.

Economists polled by Reuters predicted that retail sales in October would raise by 0.5%, though they only rose by 0.3%, according to the Commerce Department.

Pandemic-related unemployment benefits will expire at the end of the year, and it’s unlikely that Congress will agree on a second relief package before Biden takes office in January. Additionally, the federal ban on evictions will expire at the end of the year.

To top it off, the winter is approaching meaning that many restaurants and businesses in colder states will be forced to close – and, subsequently, Americans who work at those establishments will face unemployment.

Needless to say, many Americans aren’t focused on shopping; they’re focused on surviving. Especially in states with more COVID cases, there has been a broad decline in spending through November 9th, apart from automobiles, gasoline, building materials and food services.

The economy bounced back at a 33.1% rate in the late summer and early fall after contracting at 31.4% pace in the second quarter, when COVID completely sank the economy. This was the most drastic market fluxaution since the government started keeping records in 1947.

There is a strong link between households with a disposable income and spending patterns – people typically don’t spend money they don’t have, especially during a pandemic. If the U.S. wants to get the retail economy back to where it once was, it seems like additional government relief is a sure-fire way to get there.

When stimulus checks went out in April, we saw a momentary resurgence in the economy almost instantly, which was good for everyone. Until the job market allows for all of the unemployed Americans to safely get back in the game, the government needs to assist its people – the economy depends on it.

Anaïs DerSimonian is a writer, filmmaker, and educator interested in media, culture and the arts. She is Clark University Alumni with a degree in Culture Studies and Screen Studies. She has produced various documentary and narrative projects, including a profile on an NGO in Yerevan, Armenia that provides micro-loans to cottage industries and entrepreneurs based in rural regions to help create jobs, self-sufficiency, and to stimulate the post-Soviet economy. She is currently based in Boston. Besides filmmaking, Anaïs enjoys reading good fiction and watching sketch and stand-up comedy.

Business Finance

How should freelancers be saving for retirement (is it even possible)?

(FINANCE) Adulting is hard, but retirement looms no matter your age – here are some ways to start squirreling money away so it’s less stressful later.

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retirement savings

Freelancing is a tenuous approach to employment, made all the more so by a profound lack of amenities usually offered by more stable arrangements – chief among which is a retirement fund. It can feel impossible, especially when your business suffers amidst a pandemic, so some of what follows can be ignored until the ship isn’t sinking, but don’t wait a minute longer than that – deal?

So there are several schools of thought regarding the best way to start saving and where you should put your money, but the bottom line is that, if you’re a freelancer, you should be allocating your own retirement funds. Here are some ways to do just that.

Before you can even get into the weeds of how to invest in retirement, you should have a parachute in case things go sideways. My Bank Tracker suggests starting with an emergency fund of $1,000, adding to it as you can until you have anywhere from 3 to 12 months of expenses covered.

This serves two purposes: ensuring that you’ll have the luxury of time if you need to perform an abrupt job hunt, and establishing how much you can safely put away each month without jeopardizing your business or standard of living (within reason).

Having a relatively large sum of money on hand for emergencies is always good, and if you never have to use it for the purpose for which you set it aside, it can supplement your retirement whenever you decide it’s time to cash in.

My Bank Tracker also suggests storing your emergency fund using a “high-yield” bank account, such as an online savings account, rather than sticking with traditional, low-interest savings options.

You also need to plan for taxes, which in addition to whatever your tax bracket percentage is, includes allocating 15 percent of your income to pay Social Security and Medicare. This means that you’re probably putting aside a pretty hefty sum (at least 30%) each month.

Once you’ve established your emergency fund and planned for taxes, you should have a general idea of what your wiggle room looks like vis-a-vis saving for retirement.

The actual saving part of retirement entails investment in a retirement account such as an IRA, Roth IRA, a 401(k), or a pension plan (referred to as a “defined benefit plan”).

Each of these account types has benefits and drawbacks depending on your situation.

  • A Roth IRA will allow you to contribute a certain amount each year, and you can usually set up an account quickly from a variety of online locations. The money that goes into a Roth IRA is post-tax, meaning you don’t have to pay tax on the retirement funds you pull out. Your income, however, can disqualify you from investing – if you earn above a certain threshold ($140,000 in 2021), you won’t be able to use a Roth IRA.
  • Other IRA options exist as well, each with a cap on how much you can contribute per year and varying tax requirements. For example, a traditional IRA account requires you to pay taxes when you withdraw the money, and there’s an upper limit on how much you can contribute.
  • A SEP IRA is similar, but the upper limit on investment is substantially higher – and you need to be self-employed (or an employer) to have one.

Nerd Wallet also points out that a 401(k) is a reasonable option for self-employed people who don’t employ anyone else, especially if you plan on saving “a lot in some years — say, when business is flush — and less in others.” 401(k) accounts allow you to put up to a certain amount ($58,000 in 2021) in each year pre-tax, and you pay taxes on withdrawals whenever you start pulling out money.

More eccentric retirement options exist as well. Taxable Brokerage Accounts let you invest in stocks and securities through a brokerage, and you’re able to use the money whenever you please – but you’ll have to pay taxes on your gains each year, which can become expensive in the long run.

And defined benefit plans are expensive and entail high fees, but they allow you to set up a pension with high investment opportunities as opposed to some of the lower-investment options.

Whichever option (or options – you can always invest in multiple accounts) you choose, make sure you’re saving for retirement in some capacity. And remember that these accounts represent exponential growth, meaning that the sooner you start saving, the better off you’ll be when you begin your retirement journey.

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Business Finance

Stripe makes it easier to collect money from customers

(FINANCE) Stripe didn’t reinvent the wheel, but they are outshining competitors by adding features that help small businesses.

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stripe payment links

Payment processing is an attribute of any sales process that can make or break the customer’s experience – and, with it, your revenue stream.

While coding in a payment portal can be time-intensive and costly, payment processor company, Stripe has a simple alternative: Payment Links.

Stripe Payment Links are exactly what they sound like. Rather than linking a customer to a product and then having them check out via the usual cart process, you can send them a Payment Link for that specific product; the customer then enters their payment information in the ensuing window, and the product is theirs.

It’s a very straight-forward process that is made easier by Stripe’s no-code presentation, a choice that ProductHunt posits is an effort to go with the no-code flow we’ve seen in the last year.

And, the easier the checkout process is, the more likely a customer is to complete a transaction. It’s one of the reasons why Amazon’s “Buy Now” feature is so rewarding (and dangerous, especially at night).

By offering a customer a direct link to a product with a space to enter their card info in a hassle-free manner, Stripe has created an incredibly convenient way for them to pay – and, without the usual process of checking out involved, customers have less time to second-guess that payment.

Call it what you want (manipulative, pushy, morally grey), but if a customer doesn’t get the chance to rethink their purchase before the payment form has been filled out, chances are decent that they’ll follow through.

Certainly, there are drawbacks to this system. The link applies to individual products or services, which means that, while you can create an individual link for each item on your site, your payroll processing will categorize each of those links differently. That can be a mess to sort out at the end of the day.

But it’s a great way to ensure that customers who want something specific can get it quickly and without much ado about anything.

Putting a Payment Link in your bio after advertising a product on Instagram, sharing your link on Twitter, or even DMing links to interested customers is sure to be a productive, if shameless, endeavor.

Here is a quick rundown from Stripe:

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Business Finance

Have fractional shares of stocks *really* democratized the market?

(FINANCE) Fractional shares of stocks and equity have become widely available, and it’s said that the market is being democratized. Is that true?

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fractional shares

Not everyone has the kind of startup cash needed to invest in premium stocks, which is why fractional investing (the practice of buying percentages of stocks rather than an entire share) is making waves. With the ability to purchase equity at a lower cost and with lower stakes, though, comes the question of whether or not the stock market is really becoming democratized.

Any time premium services become routinely accessible to middle- and lower-class members of society, celebration is somewhat hampered by the realization that those services might simply exist to exploit the people to whom they’ve been made available.

Similarly, one can’t help but wonder if such services are just gimmicks by the time they land – played out and generally wasteful.

But fractional investing options comprises anything from stocks like Apple to real estate these days, which makes the notion of investing a lot less scary than the traditional route – and a new player on the block, Bits of Stock, makes it even more interesting.

Bits of Stock is an app that does pretty much what it sounds like: earns you “bits” of stock as you go about your life. After linking the app to your bank account, Bits of Stock will count your spending toward stock-based rewards, allowing you to redeem fractions of various stocks over time.

Users on Just Use App have reported a generally positive experience with Bits of Stock, elaborating on a wealth of supported retailers and variable rewards, though one user explains that one can expect “0.5%” as a baseline for the percentage of stock earned.

It’s worth noting that over the years, other mainstream investment options have added fractional investing. Robinhood is perhaps the most famous, and Schwab launched something called “Slices” to the same effect.

Obviously, more people can gain equity when the price tag is lower, and that’s a good thing…

But, as interest in investment rises and the number of people investing in the stock market in some capacity surges, it will soon become clear whether or not this is a viable future for people’s money.

After all, with minor investment comes minor growth, and tying up the funds of people who usually wouldn’t invest – even if it’s in a stable environment – could have deleterious effects on their personal finances over time.

So have stocks been democratized by fractional investing options? Yes. But at what cost?

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