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8% Cashback?! Somebody Slap Me!
TL;DR: Binance has come out with a credit card that gives up to 8% cash back. Binance is a cryptocurrency exchange that has blown up with the cryptocurrency rage in recent years. They’ve even more recently come out with a credit card that allows you to pay for your purchases with cryptocurrencies, superficially offers up to 8% cash back on purchases. However, don’t get too excited yet. If you get the card, you’re placed into a “tier” where you can get between 1% and 8% on your purchases. Your tier is completely based on how many “Binance Coins” (or BNB, which is Binance’s cryptocurrency) you own. to get tier 7…
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Venmo’s New Card that Belongs in Your Wallet!
TL;DR: Venmo just came out with a new credit card gives up to 3% back! This new credit card is much like HMBradley’s, where they give 3% back on your top spending category, 2% on your next one, and 1% on the rest. At this current time, it seems like all spending is categorized into these categories when evaluated for rewards: Transportation Travel Grocery Entertainment Dining and Nightlife Bills and Utilities Health and Beauty Gas Other This card is rather new so we’ll keep tabs on how users like it and on any new coming changes. For now, it’s not the first card I would get, but any card that…
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Understanding the IRS Underpayment Penalty
TL;DR: Have 90% of your income withheld or pay 100% of last year’s tax liability to avoid underpayment penalties (under most circumstances). The US tax system is pay-as-you-go, so if you’re not withholding enough you could be in for a surprise come tax season. Specifically, a 0.5% penalty per month on the amounts under-withheld. That can get hefty. To avoid this, you need at least 100% your previous year’s tax liability or 90% of your current year’s tax liability withheld from your paychecks. If you had an AGI of $150k or more (or $75k if married filing separately), you need to withhold least 110% of your previous tax year’s liability…
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The New Card You Absolutely Must Get!
TL;DR: Check it out! Here are the highlights: the Chase Freedom Flex boasts no annual fee, 5% back on rotating categories, 5% back on travel (when booked through Chase), 3% back on dining and 3% back on drug stores. It’s also got a $200 welcome bonus after spending $500 in 3 months. Happy Flex’ing! TheJKW
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Accredited Investing: Opportunities of the Rich
TL;DR: Now anyone can be an accredited investor with a test. Venture capital, hedge funds, private equity… the list goes on. Because of the hassle, a lot of securities are not registered with the SEC and therefore only available to accredited investors. This meant for a long time, some of the most profitable investments have only been available to the rich. What is an accredited investor? Traditionally, to be an accredited investor you’d have to have a net worth (excluding your place of residence) of over $1 million, or earn at least $200k a year (or combined $300k as a couple). However, very recently, the SEC has changed the definition…
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Careful with Tax-Deferred Annuities
TL;DR: Gains can grow tax-deferred, but be careful of the fees. If you’ve maxed out on other retirement tax-efficient vehicles, here is another one – you can contribute to a tax-defered annuity. In these plans, any gains you get are tax-deferred until you withdraw, but to avoid a penalty you have to withdraw at an old retirement age (like with most retirement accounts). However, there seems to be very little flexibility around what you can invest in, and if it’s like investing in an index you can achieve the same kind of “tax-deferral” by not selling your stocks/ETFs. The main advantage would be that taxes you’d otherwise pay on dividends…
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I Should’ve Gone With Roth 401k!
TL;DR: You can effectively contribute more by using a Roth 401k. As a refresher, when it comes to your 401k, traditional means contributing pre-tax (you get taxed on all your withdrawals) and roth means contributing post-tax (you get taxed before you can contribute). If you read online, it seems like the only factor considered when thinking about Traditional vs. Roth 401k is whether you think you’re in a higher tax bracket now or in the future. While that’s still true, there’s one more detail when you’re maxing out your contributions. When you contribute to a Roth 401k, you’re effectively able to contribute more! What do I mean? To see this…
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3.5% APY Savings Account?
TL;DR: HMBradley is offering a bank account where you can earn up to 3.5% on balances up to $100k. However, there are requirements. HMBradley came out with a FDIC-insured savings account where if you make direct deposits every month, and have saved at least 5% (20% for the top rate) of your deposit every quarter, you get interest paid (with the top rate being 3%). Note that you will not get any interest if your account balance is over $100k. They also have a credit card that auto-categorizes your spending and gives you 3% back on your top category. This credit card is great in its own right, and if…
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Yotta: The Winning Lottery?!
Update Jan 3, 2021: Yotta got nerfed :(. It’s still worth it, but it’s not significantly better than other high-yield savings accounts. TL;DR: Yotta may be the best savings account current, with a fun twist. A YCombinator startup recently came out with a new savings account called Yotta that was inspired by the lottery bonds in the UK. Yes, it pays a steady 0.2% APY, but it also gives you lottery tickets, with a jackpot of $5.8 million! (Yes, I know the website says $10 million but if you look closely it’s actually $5.8million). To encourage saving and deter people from spending on lottery tickets, Yotta offers 1 lottery ticket…
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Dividend Reinvestment Basis Adjustment
TL;DR: This turns out not to be a clever way to save on taxes. However, you should make sure you don’t get taxed twice. Some brokerage services allow you to automatically reinvest your dividends. Online websites seem to be misguiding by giving examples where you can adjust your basis, and this saves you on taxes somehow. Let’s be clear – this isn’t some magical tax saving. It is true that you can automatically reinvest your dividends. However, you will still be taxed on it as normal. It’s just that if you end up not adjusting your basis to reflect the extra purchases, you would be taxed twice. But “adjusting your…