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KEY POINTS
Cash App unveiled several new features during Bitcoin 2022 in Miami.
Its "Paid in Bitcoin" feature means users can opt to automatically convert a percentage of their income into Bitcoin.
Investing a small amount each month can be a good way for long-term investors to buy Bitcoin.
Bitcoin enthusiasts gathered in Miami this week for Bitcoin 2022, its annual conference. Big names from crypto such as Michael Saylor, Cathie Wood, Peter Thiel, and Anthony Pomplaino joined thousands of attendees for four days of talks, discussions, celebrations, NFT art, and much more.
Cash App's new 'Paid in Bitcoin' feature
One of Thursday's most notable announcements came from Jack Dorsey's, Block (formerly Square). The team announced that U.S. customers can now use Cash App's "Paid in Bitcoin" feature to automatically convert their salary (or part of it) into Bitcoin.
Clients who've connected their Visa debit cards to the service via its Cash Card function can opt to automatically convert a percentage of each direct deposit into Bitcoin (BTC). The amount can be adjusted at any time.
Cash App also announced the following new developments:
Bitcoin roundups. Cash Card users will soon be able to round up purchases to the nearest dollar and automatically invest the difference into Bitcoin. This feature has become popular in other savings and investment apps.
Improved Lightning Network integration. The Lightning Network is a layer 2 solution that sits on top of the Bitcoin blockchain to improve its performance. Cash App customers can already send Bitcoin using the Lightning Network, and soon they will be able to receive it as well.
Cash App has made some big strides in Bitcoin integration, making it easy for users to use their balance to buy and sell Bitcoin. Unlike other cryptocurrency apps, Cash App only trades Bitcoin.
Is it a good idea to convert part of your salary to Bitcoin?
Here at The Ascent, we are fans of long-term investing -- building wealth by buying assets you plan to hold for the coming five to 10 years or more. One popular way to do this is to automatically transfer a percentage of your monthly salary into your investments. Automating your investments can help prioritize them and ensure the more immediate demands on your paycheck don't push them out of the way.
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Regular contributions can also protect against Bitcoin's volatility and avoid analysis paralysis as you wait for the right time to invest. It is extremely difficult to buy the lows and sell the highs, especially if you don't spend all your time watching crypto prices. But buying a small amount at regular intervals -- also known as dollar-cost averaging -- can help even out the price swings without costing you a lot of time.
We analyzed some simplified scenarios to see how dollar-cost averaging compared to lump-sum investing using last year's Bitcoin prices. Let's say you had $1,200 to invest in Bitcoin at the start of 2021. If you'd invested it all in Bitcoin, you'd have gotten about 0.038 BTC, which would be worth about $1,650 today. However, if you'd waited and invested that same $1,200 a few months later in April, you'd have gotten 0.021 BTC, which would be worth almost $900 today.
If you'd opted instead for dollar-cost averaging and invested $100 on the fifth of every month, you'd have ended up with 0.027 BTC -- worth almost $1,200 in today's prices. You wouldn't have beaten those who managed to invest a lump-sum investment at one of Bitcoin's lows, but you would have also done better than lump-sum investors who unintentionally bought at a higher price.
Scenario
Value of BTC today
Invested $1,200 in January 2021
$1,657 (0.038 BTC)
Invested $1,200 in April 2021
$897 (0.021 BTC)
Invested $100 a month throughout 2021
$1,186 (0.027 BTC)
Data source: CoinGecko and authors calculations
There are a few useful conclusions we can draw from these examples. First, Bitcoin is not a get-rich-quick scheme -- the price is currently down 35% from its all-time high. If you'd invested $100 a month last year, right now your Bitcoin would still be worth less than the cash you put in. But what matters is whether you believe in Bitcoin's long-term potential. If so, you can wait out these short-term dips and continue to build on your Bitcoin holdings in the hope that today's Bitcoin will be worth a lot more in 10 years' time.
Secondly, in many scenarios, dollar-cost averaging wins out over trying to time the market. Sure, if you had bought in January, you'd be in a better position today. However, at a practical level, you might not have had $1,200 to spare last January. For many investors, it's more realistic to put $100 toward investments each month than spend a lump sum. And in January 2021, nobody knew what the year had in store for us. The price may have fallen. Or you might have waited, got scared of missing out, and bought in March or April -- as many investors did.
Automated contributions won't be right for every investor. And it isn't a choice between lump sum or dollar-cost averaging -- there are other strategies too. For example, some investors choose to "nibble" the dips, buying small amounts every time Bitcoin falls below set levels. It's good to find investment strategies that suit your habits, knowledge, and financial position.
Bottom line
If you've done your research and thought about how the lead cryptocurrency might behave in the long term, putting a small amount of your salary into Bitcoin each month may be right for you. However, it should not come at the cost of other financial goals. If you're trying to pay down debt or build up an emergency fund, these should take priority over high-risk investments such as Bitcoin.
Many people have seen the headlines about crypto millionaires or billionaires and bought Bitcoin because they are scared of missing out. Bitcoin may be a good way to build wealth, but it needs to be part of a thought-out investment strategy that includes other assets such as stocks or real estate. It isn't going to make you into a millionaire overnight, but regular contributions to crypto and stock investments could help you build wealth in the long term.
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Emma owns the English-language newspaper The Bogota Post. She began her editorial career at a financial website in the U.K. over 20 years ago and has been contributing to The Ascent since 2019.
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By: Dana George |
Updated
- First published on July 25, 2023
Costco has a faithful legion of fans -- otherwise known as members. There are 123 million of them, to be precise. Throughout the years, Costco has added new membership benefits, some less well-known than others. Here are four that members may not realize exist.1. RV parkingWhether you spend part of each year visiting the highways and byways of North America or you're hoping to rent an RV for your next vacation, it's good to know that some Costco locations allow RVs to park overnight in their lots. Free overnight parking can certainly cut down the cost of travel.Consider the convenience. You arrive near closing time, pick up all the items you've already burned through or forgotten to bring, and spend the night in a well-lit lot. Granted, pulling an RV into a (typically) packed Costco lot may not be the easiest thing you've ever done, but once the lot clears out, you may even hear the sound of crickets.Notice we said that some Costcos permit overnight parking for RVs. When a store does not, it's often because local ordinances don't allow it. However, with so many Costcos scattered across the country, you should have options.The easiest way to determine which Costcos allow overnight RV parking is to check this Costco locations finder. Once you see one near where you plan to stay, call that store and ask to speak with the manager. Once you have them on the line, ask about their overnight policy. If the store does permit overnight parking, ask for permission to stay. According to the Camper Report, Costco has rules for campers, so you may want to ask where you can get a copy of those.2. Home, auto, renters, and specialty insuranceIn the back of our minds, most of us realize that Costco offers insurance, but we're not sure of the details. Partnering with CONNECT, powered by American Family, Costco members receive discounted rates on many of their insurance needs. Beyond the initial discount, CONNECT allows you to add more. For example, you may qualify for a safe driving, multi-policy, or student discount.And if you're an Executive member, CONNECT sweetens the pot even more by providing you with benefits like roadside and lockout assistance.At a time when many people are unhappy with the insurance industry, 9 out of 10 members who sign up for CONNECT coverage go on to renew their policy with the insurer.3. Home and business suppliesWhile it may occur to you to pick up envelopes and printer paper at Costco, have you ever taken advantage of the low prices on items like checks, ink stamps, and address labels? Many of the supplies you need to take care of business -- at home or in the office -- are available for up to 50% off.Executive members enjoy an even deeper discount.4. Floral deliveryOnce you factor in delivery costs, sending a lovely bouquet of flowers to someone can cost a small fortune. That's not the case at Costco. Costco's online floral department offers everything from anniversary and graduation bouquets to bulk flowers. And here's where the real savings come in: Delivery is free. The price you see listed on the site, plus tax, is the price you pay.Few things are more frustrating than typing your credit card number into a florist's site, only to learn that delivery costs nearly doubled your purchase price.As Costco layers on new perks, keeping track of them may become even more difficult. It's a good idea to check periodically to see if there are any you're not taking full advantage of.
By: Emma Newbery |
Updated
- First published on Aug. 7, 2023
Are SNAP benefits enough?A monthly payment of $973 for a household of four equates to around $8 per person per day. While SNAP benefits aren't designed to cover everything, it isn't easy to feed a family on around $2.66 per person per meal. Indeed, research from the Urban Institute showed that the maximum benefits often don't cover a family's food costs. "Amid inflation, SNAP benefits did not cover the cost of a meal in 99 percent of counties in 2022," said the report.The new benefit amount -- a monthly increase of $34 for a household of four -- is roughly in line with cost-of-living increases measured by the Bureau of Labor Statistics (BLS). Its latest Consumer Price Index figures show that the cost of all items in June, 2023 was up 3% over the year before. However, inflation does not impact all aspects of life equally.The BLS data also shows that food at home increased by 5.7% year over year. The new SNAP benefits do not match this. Hypothetically, a 5.7% increase in benefits for a family of four would mean a new monthly payment of $992, rather than the planned $973.In addition, this year brought the end of the pandemic-era emergency food benefits throughout the country. According to CBPP calculations, this meant the average person received about $90 a month less in SNAP benefits. Even factoring in the increased SNAP benefit amount, many households have seen a significant drop in their food benefit amount, and the revised 2024 payments will do little to close this gap.How to make your SNAP benefits go furtherIt can take time and energy to provide healthy food for your family on a strict budget. The challenge is that in a busy household, time and energy are also limited resources. Even so, if you can carve out some time to plan your grocery-shopping trip, it can make a big difference.Here are some ways you might stretch your SNAP benefits a little:Use cash back apps and coupons: Look for cash back apps that work in stores that take your EBT card. You'll usually need to download an app and then scan your receipt after you've been to the store. Pay attention to coupons, whether in store or online as these can often carry hefty discounts.Always shop with a list: Planning your food shopping is one of the best ways to reduce costs. Even more so if you use a cash back app or coupons. Check what offers are available on items you normally buy before you go shopping. Mark the items that qualify for rewards or discounts on your list, so you don't miss them when you're shopping.Look for double up programs: There are Double Up Food Bucks or other programs in various states that essentially give you two for one on all produce at participating farmers markets and stores. It's a great way to get more fruit and vegetables for your SNAP dollars.Buy in bulk and batch cook: It isn't always easy to find the extra cash for bulk buying when you're eking out every cent. However, if you can manage it, you may be able to save both money and time. You might, for example, batch cook a stew and freeze portions for future meals.Unfortunately, food insecurity still impacts many American households. If you don't have enough money to feed your family this month, look for additional help. Find out what food pantries and soup kitchens are operating in your area on which days, and whether you'll need to present any documents. Call United Way at 211 for information about assistance programs in your area.
By: Christy Bieber |
Updated
- First published on Sept. 5, 2023
Incomes vary widely across the United States, with some people making many times the amount that others earn. If you've ever wondered how your personal finances stack up, and what "class" your income officially puts you in, here's what you need to know.What income do you need to be upper, middle, or lower class?Based on 2021 data, here's what you would need to earn in order to be in each class:Lower class: This is defined as the bottom 20% of earners. Those in the lower class have an income at or below $28,007.Lower middle class: This is defined as individuals in the 20th to 40th percentile of household income. Earnings among this group are between $28,008 and $55,000Middle class: The middle class is officially those whose earnings put them in the 40th to 60th percentile of household income. The income range is $55,001 to $89,744.Upper middle class: Anyone with earnings in the 60th to 80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $89,745 and $149,131.Upper class: Finally, the upper class is the top 20% of earners and they have incomes of $149,132 or higher.Take a look at these numbers and see where you fall based on your own earnings. And remember, this is a snapshot in time -- your earnings can change throughout your life, and so can your class designation.Will your success be determined by your income and class?It's probably not a surprise that those in the upper classes or in the upper middle class do have a higher net worth than those in the lower class or the lower middle class. But the disparity is greater than you might think. While the median net worth of those with incomes of $149,132 or higher is $805,400, the median net worth of those in the lower class is just $12,000.Your income impacts how easy it is for you to build wealth. If you make more money, it is easier to save it and invest it in a brokerage account where it can work for you. If you make less money, then you may struggle even to cover the necessities out of your checking account, much less to buy valuable assets that help you grow richer over time.But that doesn't mean people who don't make a lot of money can't be a financial success. A lot depends on what you do with the money you actually have, including how much you spend and how much you save.There are plenty of people who make over $100,000 a year who live paycheck to paycheck, and plenty of people with incomes that put them squarely in the lower or lower middle class who have diligently saved and grown quite wealthy over many years.Here's how you can improve your standingDon't be discouraged if you aren't in the class you hope to be. For one thing, you have opportunities to increase your income by taking the following steps:Learning new job skills: You could obtain a certification, take part in a management training program at work, or take some classes to develop skills that may help you get promoted (such as computer training courses or public speaking classes), depending on your industry.Take on a side hustle: The average side hustle brings in $483 per month, which is a good amount of extra money that could make a meaningful difference in your income.Work some extra hours: If your company allows you to work overtime, take advantage of it, as many people are paid time and a half for overtime hours.Negotiate your salary: According to Pew Research, when workers negotiated for higher pay, 28% said they received the extra money they asked for and 38% indicated they were given more than originally offered but less than their ask. Whether you are getting a new job or staying at your current job but feel you're underpaid, it doesn't hurt to make a request for more money -- especially if you can find salary data to back up the fact that others in your industry are paid more.And even if your earnings never put you in the top 20% of earners, you can still have a rich life and end up with the financial security you deserve -- especially if you prioritize saving as much as you can for as long as you can.
By: Maurie Backman |
Updated
- First published on Sept. 13, 2023
At some point in 2022, I discovered Aldi and began shopping there weekly. I found that I was able to save money on my grocery bill by purchasing certain produce items there. And since I happen to have an Aldi adjacent to my local Costco, it wasn't particularly out of my way.But over the past few months, I've become less enamored with Aldi. Here's why.1. The selection is just too limitedAldi -- at least near me -- is a minimally stocked grocery store. The shelves aren't loaded the way they are at my nearby ShopRite and Stop & Shop.To be fair, this was the case when I first started shopping there. But because there's just not a lot of selection, I'm generally limited to only buying a few items when I pop into Aldi.Not so long ago, I was running into Aldi for some fruit, which I usually buy there, and I needed to grab shredded cheddar cheese. Normally, I get that at Costco, but I didn't want to run next door to Costco and wait in a line for cheese alone. Unfortunately, though, Aldi didn't have the cheese I needed, so I had to make an extra stop anyway.2. The inventory is too inconsistentNot only is there a limited selection of food items I can buy at Aldi, but sometimes, I can't even find the five or six things I'm looking for. Aldi was once my go-to source for avocados, since it's an expensive purchase and Aldi tends to sell them for less than Costco (at least in my area). But the last few times I stopped at Aldi, avocados weren't in stock.And that's happened to me with other things, too. Over the past several months, I've struggled to find everything from cucumbers to strawberries at Aldi as well.3. What the store saves me on groceries, I lose via lost working hoursShopping at Aldi still has the potential to save me a little money on groceries. At a time when supermarket prices are up 3.6% on an annual basis, that helps.The problem, however, is that even though Aldi is right near Costco in my neighborhood, thereby allowing me to combine those trips, it still takes time to visit an extra supermarket. I have to find parking, wait in a checkout line, and spend time searching the shelves.While it's nice to save $2 here and $3 there, the reality is that a stop at Aldi might cost me 20 or more minutes of work -- especially when I don't manage to find the things I need. And losing out on that work time often means forgoing more than $2 or $3 of income. So from a time perspective, it's just not worth it.Shopping at Aldi could make sense for a lot of people. If you're someone with flexibility in your schedule and grocery list, and you're not so picky about the brands you bring home, then it could pay to spend the time visiting Aldi, even if you don't always manage to find all the things you need. But I've reached the point where shopping at Aldi makes less and less sense for me, so I'll most likely stop going there unless it's a one-off basis.
By: Steven Porrello |
Updated
- First published on Sept. 20, 2023
Again, if you buy the laptop in-store at a Costco warehouse, you might get a lower price than from its online store. This is especially true as holiday sales approach, like Black Friday, which might see electronics and laptops discounted.2. Generous return policy and two-year warrantyCostco will let me return a new Macbook Pro for a full refund within 90 days after I purchase it. Even better, Costco will accept my return even if I don't have the original box. For comparison, Best Buy will give you 15 days to return a MacBook (60 days if you're a My Best Buy Plus member), while Amazon will also give you 15 days.Not only that but Costco will extend the manufacturer's warranty to two years, giving me two years of coverage for mechanical or electrical failures. And if that wasn't enough, it also sells AppleCare+ at a slightly cheaper price than other retailers: $319 for a three-year insurance policy. In contrast, Apple, Amazon, and Best Buy all sell the same policy for $399.3. Free technical and troubleshooting supportLastly, buying a MacBook through Costco means getting free technical support through its Concierge Service. This could really come in handy if you're working on a deadline, your Macbook suddenly stops working properly, and you don't have time or energy to figure out a solution on your own.Even better is that you get technical support indefinitely, whereas other retailers, like Apple, will give you support for a set amount of time, like 90 days.Low prices + support + 2% back = why I'm buying my Mac at CostcoAll in all, I'll buy my 16-inch Macbook Pro from a Costco warehouse when I can get it for a discounted price. Cost is a major factor in my decision (I can't blow my personal finance goals for a new laptop). But so is the return policy, technical support, and one-year extension on the manufacturer's one-year warranty. Plus, I get 2% back with my Costco Executive membership, which is about $50 back on a $2,249 Macbook Pro.True, it's important to compare that with other retailers to see who has the best deal, but if you're a Costco member, you might not find a better value when in-store laptops are discounted.
