The Finatical

Week of July 12th, 2021 - Protecting Money Tips, Hike in Teen Employment, Cut in Unemployment Benefits

FinaticTips - 3 Tips for Protecting Your Money

1 - Protect Your Accounts

As you start earning money, your top-most priority should be to secure it in a bank account unless you are a drug dealer, of course. However, while a bank’s responsibility is to keep your money safe, that might not always go according to plan. With a bank account comes the added risk of account hacking. Account hacking is when a hacker breaks into your online accounts, such as your email and bank account, without your knowledge. After accessing it, they can often end up messing with things like your finances, personal information, and much more. Here are some ways through which hackers can get to your bank account:

• Public WiFi/Unprotected Internet: Using public or unprotected internet at libraries or coffee shops to access your bank account can be a huge mistake. Hackers can easily penetrate the network and access your personal details. 

• Phishing Scam: Phishing is a method in which a fraudulent message is used to communicate with you to eventually access your personal details. Phishers can easily create an elaborate and official-looking email and you might even end up falling for it. 

• Card Skimmers: Card skimmers are devices implanted in ATMs that can record the information on your card’s magnetic stripe, which contains your name, credit card number, and expiration date. There are other methods such as tiny cameras or keypads installed in ATMs as well through which hackers can access your PIN code. 

Here’s how you can protect yourself:

• Use Encryption Software

• Use a strong and complex password

• Enable two-factor Authentication

• Notice the email accounts of every mail to make sure they are legit

• Always check the ATM machine properly and ensure that no tampering has been done

• Avoid public networks while making money-related transactions or accessing your bank account

2 - Be Aware of Ponzi Schemes

Most people would jump at the opportunity of an investment that guarantees above-market returns but chances are that you might fall into an investment fraud operation known as a Ponzi scheme. In an investment Ponzi scheme, fraudsters promise incredibly good and/or incredibly reliable returns. And they deliver – for a while. But they're not investing in anything. Instead, they're using money from new investors to pay their obligations to the old, including the exaggerated returns promised to those who "get in on the ground floor." But eventually, the operation can’t bring in enough fresh money to sustain itself and collapses. Here’s how you can make sure that you aren’t dealing with a fraud:

• Make sure your adviser is legit: Anyone can call themself a financial advisor so it is extremely important to do your research by checking with national organizations that issue credentials to financial planners. Some of them are National Association of Personal Financial Advisers, the Financial Planning Association, and the Certified Financial Board of Standards.

• Do your research: Find out how long the adviser has been in the business. Ask to see his or her ADV Form, Part II, which a planner files with the Securities and Exchange Commission. It contains information about the adviser's background, services, and fees. Check for complaints filed through your state's securities regulator.

• Be skeptical: Follow a simple rule - If you don’t understand it, you shouldn’t be in it. If you are approached regarding an investment in a wide range of exotic and unfamiliar products, do not just be tempted by the potential returns. Be especially wary if your adviser downplays or denies risk. Make sure you do not not refrain from asking questions. 

• Careful when nearing retirement: Investment frauds are usually centered around the elderly and as you approach your retirement, you might be contacted unexpectedly by a broker or financial advisor and that is when the warning bells should start ringing. The offer might be true but make sure to investigate before you make a decision that affects your finances.

3 - Protect Yourself from Identity Theft

Identity theft is a crime in which someone gains access to your personal information like your name, address, social security number, and bank account information, and uses it to commit crimes. The criminal essentially assumes your identity and makes decisions for themselves as if they were you. There are a number of signs by which you can identify if you are a victim of identity theft:

• Your tax returns were rejected

• Being billed for items you didn’t purchase

• Absence of bills in the mail

• Charges or expenses you don’t recognise

• You’ve been turned down for a credit/debit card

Here’s how you can protect yourself:

• Regularly checking your credit reports

• Protect your documents

• Enable two-factor authentication

• Use strong passwords

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FinaticTrends - 2 Financial Trends

1 - Hike in Teen Employment

The unemployment rate for teens aged between 16 and 19 was 9.9% in June, the lowest recorded figure since 1953. The post-pandemic era has seen a jump in teen hiring. Employers are looking to hire more teens than ever, which might be because of the current labor shortage. The strongest employment gains have been in fields that can hire teenagers, such as retail and restaurants. At a time when employers are desperately in need of workers, the summer time offers a helping hand as teens are looking for summer internships and jobs. It is quite likely that this trend will die down after the summer ends but we can never tell for sure in such circumstances. It will be interesting to see how employers deal with labor shortage after the summer ends.

2 - Cut in Unemployment Benefits

The US added 850,000 new jobs in the month of June and it might be correlated to recent state cuts to unemployment benefits. This move by many states has forced people to come back to work and in doing so, they have solved a free-rider problem where people were taking unfair advantage of social welfare. It may be premature to say this is all true as economists do believe that COVID-related factors, such as looser restrictions on businesses, drove most of the job growth last month. Nevertheless, the report does brighten up these dismal times and helps bring the world economy to normalcy. Let’s see how worldwide job growth will be affected in the upcoming months.

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Financial Guidance

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton 

Follow market trends and history. Don't speculate that this particular time will be any different.

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Money Fact

The average American will pay more than $600,000 in interest over the course of their lifetime!

Think about how much of that interest you could avoid by adopting the old-school philosophy: If you can't afford to pay for it now, you really can't afford it.

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