Banking – European Forum – Family Mediation Wed, 15 Sep 2021 22:30:18 +0000 en-US hourly 1 Banking – European Forum – Family Mediation 32 32 Pros and Cons of Buying a Waterfront Home Thu, 11 Mar 2021 06:00:47 +0000

Buying a home with a breathtaking view of the ocean or a beautiful lake is a dream for many, but a slice of paradise comes with costs that can be difficult to anticipate or plan for. Here are some of the pros and cons of buying a waterfront home.

Buying a house by the water: the advantages

Waterfront properties are highly desirable for a multitude of reasons. Who can say that living on the water is not a relaxing and uplifting experience?

“Anyone who has sat on a beach or stayed in a house by the water can testify to the almost medicinal effects of the sound of waves and seagulls,” says Robin Kencel, real estate agent in Greenwich, Connecticut.

Other positives about buying a waterfront home include:

  • Strong appreciation potential – “Waterfront properties tend to be the ones that get the most appreciation,” says Kencel, who notes the same is true in his local market. “In 2020, five waterfront properties sold for over $ 17 million: four on the market and one off the market. Waterfront continues to be the most requested.
  • Investment potential – In the Airbnb and self-renting environment, waterfront homes have higher rental potential than homes without a waterfront view, notes California real estate investor Cornelius Charles of Dream Home Property Solutions, LLC. Rents can also be considerably higher, making it easier for investors to cover their costs of ownership and even to make a profit.
  • Permanent views – When you buy a house in an area that is still under development, you cannot be sure what your eyesight will look like in five, 10 or even 20 years. The waterfront homes are top notch because their views are as permanent as it gets. “The rule in New York is, unless you’re on the water or in a park, you can’t count on a view forever,” says James McGrath, co-founder of New York real estate broker Yoreevo.

Buying a house by the water: the disadvantages

Much of the added cost of a waterfront home lies in the land itself – the lot you buy, says Penny Lehmann, real estate agent at Coldwell Banker in Cape Coral, Florida. The more privileged the location, the more you will pay.

Cost isn’t the only downside to buying a waterfront property. There are other potential pitfalls, some of which might not be aware of until it is too late. For example:

  • Regulations added – Many new riparian owners do not realize that they will be subject to specific rules. “Depending on your area, there may be a coastal commission or other organization that can restrict what you can and cannot do in the house in terms of increasing the size of the house or renovating it,” says Charles.
  • Less privacy – Waterfront homes are sometimes found in areas that attract a lot of visitors. “It could increase traffic or cause strangers to be around your property a lot more than in a regular neighborhood,” says Charles.
  • Concerns about climate change – Many are starting to worry about the potential impact of rising sea levels on riparian communities, McGrath says.
  • Home insurance costs – Home insurance for waterfront properties can be more expensive, but it depends on the type of water you live on. For example, a house by a lake in Minnesota will not have the same insurance premiums as a house by the ocean in Florida, where hurricanes are not uncommon and the risk of damage from the wind is higher.
  • Flood insurance – The riparian owners of certain regions must wear flood insurance, who can be Dear, and sometimes not available in the area at all, explains Fiona Dogan, real estate agent at Julia B. Fee Sotheby’s International Realty in Westchester County, New York. “If you fund the purchase, it can kill the deal,” Dogan says. If your lender requires flood insurance and you are unable to obtain coverage from an insurer, your mortgage application will be rejected.
  • Costly repairs – Some waterfront homes may need special finishes and storm protection, such as impact windows, which can be expensive. If the waterfront were to suffer a bad storm, major and expensive repairs might also be required.

Tips for buying a house by the water

There are a few additional factors to consider when buying a waterfront home that aren’t a problem when buying a landlocked home.

Location is important regardless of where you buy, but it becomes more accurate when looking for a waterfront property.

“Some boaters are interested in deep-sea fishing while others are interested in offshore fishing near their homes or go to restaurants by the water,” says Lehmann. “Therefore, the distance to the channel and the duration of a cruise to the destination are important considerations.”

You will also need to remember that the purchase price of the waterfront property is just the beginning. You will need to research the costs of home insurance, and if the the property is in a flood zone, this will increase your expenses. The special maintenance needed for waterfront homes could also be costly.

Finally, don’t underestimate how much you could spend on furniture and other extras to enhance your enjoyment of your waterfront home. Plan to spend a pretty penny on outdoor furniture that lets you enjoy the fresh air and views, water toys like jet skis and other extras.

The bottom line: While the views and waterfront access can be worth it, the costs can add up quickly.

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5 reasons why more dividend income should be on your 2021 resolution list Thu, 11 Mar 2021 06:00:47 +0000

Another New Year’s Day is upon us, and with it the prospect of a better and more prosperous year. If you feel like most, it won’t be hard to get past 2020.

As you carefully reflect on your New Year’s resolutions, more dividend income should be near the top of your list. Here are five reasons why you need more dividend income in 2021.

Image source: Getty Images

1. Dividend income is taxed less

One of the most significant changes in tax policy occurred not in 2017, but in 2003, when President George W. Bush enacted the Jobs and Growth Tax Relief Reconciliation Act. The bill created a separate category for eligible dividend income and lowered the maximum rate to 15% from the previous treatment as ordinary income. This maximum rate was then raised to 20% for people earning more than $ 440,000 for single tax filers (higher for married taxpayers).

What does this mean to you? Simply put, you’ll keep more dividend income in your pocket! Assuming a median household income of $ 68,700 and single filer status, this is a distribution of $ 1,000 of dividend income over wage income at the marginal rate of 22%.





$ 1,000

$ 150.00

$ 850.00

Earned income *

$ 1,000

$ 296.50

$ 703.50

*Inincludes FICA taxes of 7.65%

While it is important to note that tax situations are highly individualized and subject to many factors, the 15% tax is among the lowest rates charged by Uncle Sam.

2. Dividend income takes no extra effort

The pandemic has resulted in significant job losses and economic devastation, but if you’re lucky enough to remain employed as a member of the “reluctant remote workforce,” you may have noticed more. money in your bank account.

It is not just a pleasant coincidence; there were significant costs involved in having a job. Some of these costs can be reduced or eliminated (excessive office lunches and premium coffee), while others, such as travel expenses and work clothing, cannot.

But apart from paying the initial stock price, buying high quality dividend-paying stocks gives you a stream of income at no additional cost! In fact, brokers continue to reduce the costs associated with their accounts and most now have commission-free transactions.

3. Dividend income makes your life easier

Earned income is important, but not all of the costs of obtaining it are readily observable. In fact, sometimes the indirect costs are the most punitive. This is often the case in American businesses, where the process of earning more income (in addition to your annual pay rise, covered below) often requires you to work 60 hours a week and take on more responsibility in the workplace. your main job, or to accept the “culture” and accept a second job as soon as you leave the office.

While ambition and drive are to be applauded, there is a cost associated with working long hours. Studies have shown that it can increase your stress levels and lead to high blood pressure, back pain, and depression. This de facto “health tax” can eventually lead to increased medical expenses and worse outcomes in life if not managed responsibly.

On the other hand, to create a stream of dividend income, all you need to do is buy high quality stocks and hold them for the long term.

4. Dividend income grows faster and is more reliable

There has been a lot of talk about wage stagnation as the stock market continues to climb. In the battle between capital and labor, capital wins. Over the past decade, the inflation-adjusted dividends of S&P 500 companies grew more than 8% per year, while payouts to annual growth in wage income did not exceed 4% during the same period.

Even among struggling companies, dividends remain a priority. For an example, look no further than the oil giant ExxonMobil. Due to the effects of the pandemic on travel, the demand for and the price of oil collapsed and potentially put ExxonMobil’s dividend at risk. In this scenario, it was understandable for management to suspend dividend payments until demand returned. It was a once-in-a-century global pandemic.

Instead, management has gone to great lengths to cut costs, slashing its workforce by nearly 15%, including nearly 2,000 US-based employees. At the same time, it maintains its dividend (although he didn’t increase it for the first time in almost two decades) and not excluding getting into debt to pay the yield above 8%.

5. Reinvestment of dividend income can have a double effect

Dividend income grows faster than you think when you reinvest it, due to the powerful double compound effect. The first source of compound growth is that by reinvestment of dividends back in the business, you will own more shares with each dividend payment and therefore be entitled to more dividends in the future. The second source of capitalization is that many companies have committed to increasing their dividend payout each year.

On the second point, look for companies that are considered Dividend Aristocrats (denoting a company that has increased its dividend each year for at least 25 consecutive years) because it is committed to increasing payouts for years to come.

Where to start?

If you are a new investor, remember that diversification is key. Even the best-run companies can suffer from external events, such as a pandemic, which can impact their ability to pay investors. Lucky for you, there are a plethora of diversified exchange-traded funds out there that cater to dividend-loving investors.

Two ETFs to start your research are the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG). This ETF seeks to invest in companies that are used to increasing their dividends, such as Microsoft, Walmart, and Walt disney. The downside is that there is nothing exciting about the current 1.6% yield, but it is a choice for long-term holders looking to reinvest their dividends for the double compound effect.

If you are looking for a diversified portfolio of high yielding stocks, check out the Vanguard High Dividend Yield ETF (NYSEMKT: VYM), which invests in large-cap stocks that pay above-average dividends. Large holdings in this ETF include stocks like Johnson & johnson, JPMorgan Chase, and Verizon Communication, which allow the ETF to pay a return of 3.25%.

May 2021 be the year you begin your journey to financial independence with the help of dividends.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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Thank Kanye West’s Yeezy for sending Gap Stock flying this morning Thu, 11 Mar 2021 06:00:47 +0000

What happened

Actions of Difference (NYSE: GPS) were flying higher on Friday morning after the company announced a partnership with Kanye West’s fashion label Yeezy. As of 10:40 a.m. EDT, the stock was up 32% but had traded up to 42% higher.

This is the best news that Gap shareholders have had in some time. Even with the dramatic gains this morning, the stock is still down around 30% from 52-week highs and 22% from the same time last year.

GPS given by YCharts

So what

Yeezy is a $ 2.9 billion brand founded by famous musician West in 2015. Until now, however, she was best known for her shoes made in partnership with adidas. The shoes have become cult because of their limited supply and robust aftermarket. Some Yeezy shoes even sell for thousands of dollars.

In today’s announcement, Yeezy will also partner with Gap to create designer clothing for men, women and children. West will retain sole ownership of the brand and exercise creative design for future products. Gap said the clothing line will launch in 2021.

In clothing retail, one must maintain relevance by following modern fashion trends. By making a deal with one of the hottest brands, Gap is certainly taking a step in that direction.

A businessman rides a rocket expelling exhaust gases on a multi-colored bar graph.

Gap stock is trading higher thanks to its deal with Yeezy. Image source: Getty Images.

Now what

While today’s news is cool, Gap shareholders should dampen all this excitement a bit and remember why the stock has gone so low in the first place. The company has nearly 4,000 physical stores under brands such as The Gap, Banana Republic and Old Navy. These stores were closed due to the coronavirus, resulting in a massive 43% year-over-year drop in first quarter revenue.

That’s a big drop in revenue, and it’s particularly heavy for a clothing company like Gap. True, 25% of its sales came from e-commerce before COVID-19. It’s better than a lot of its peers. And online sales grew 13% in the first quarter. However, when overall sales decline, companies resort to promotional pricing to move inventory.

The same was true for Gap in the first quarter. Its gross profit margin fell 23.6%, in part due to promotional pricing. This creates an inventory headwind for the business that does not immediately abate once stores reopen and normal economic activity resumes.

As a result, Gap is still a stressed business. Investors should keep this in mind. That said, in itself, Gap’s partnership with Yeezy is encouraging. It could be a good income generator if it experiences similar success to the adidas footwear line.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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Why lululemon expects the holiday season to slow Thu, 11 Mar 2021 06:00:47 +0000

Wall Street can be hard to please. Investors pushed lululemon athletics‘s (NASDAQ: LULU) lower stock as a result of the chain’s third quarter tax report, even though sales and profits are each exceeded expectations. Investors have looked beyond that success to focus on a few warning signs for the near future that imply a tough time for the athletics giant’s business.

CEO Calvin McDonald and his team described these issues in a conference call with analysts. Executives have pointed out that they are likely temporary and that lululemon’s long-term outlook is brighter than ever.

Let’s look at some highlights.

Image source: Getty Images.

Winning in a competitive market

“In the third quarter of the year, our [market] Equity performance continued with our largest quarterly market share gain in recent history. We increased our retail market share in the US adult sportswear market by 1.4 percentage points from last year. “- McDonald

As COVID-19 has put pressure on parts of the apparel industry as more people work from home, the leisure sports segment is booming. Lululemon is also gaining a larger share of this expanding pie, with sales up 18% after adjusting for exchange rate changes.

This increase was supported by improved traffic to its physical stores and increased e-commerce volumes. Lululemon’s stores rebounded to 82% of last year’s sales level, while executives braced for a 75% weaker result. The retailer has made notable gains in new demographics, such as men’s wear, and in categories outside of its traditional strength in women’s socks. “These results show that our brand is getting stronger and stronger,” said McDonald.

Things will get worse before they get better

“As we see a resurgence of COVID-19 in several markets, we experienced a higher number of government-imposed capacity restrictions in November and December compared to the third quarter. – CFO Meghan Frank

Pandemic epidemics have once again erupted in key markets in Europe and North America, and the resulting retail restrictions have led management to forecast slower growth during the holidays. In fact, stores are only expected to operate at about 70% of last year’s volume in the fourth quarter, they warned – up from 82% in the last quarter – as governments seek to curb crowds.

Expanding digital business will partially offset this crisis, but lululemon will still feel a pinch from having to limit in-store traffic during a time when its stores are typically packed with holiday shoppers.

Plan for a slowdown

“In our store channel, we will leverage our seasonal stores, virtual waitlist, mobile point-of-sale and appointment shopping to alleviate capacity constraints and continue to protect the security of our store teams. And in e-commerce, our investments are paying off as our sites have demonstrated their ability to do more than handle the anticipated peak in volume. “–McDonald

Executives have advanced some of their planned e-commerce spending in 2021 to ensure a smooth shopping experience this year despite additional pressures on the digital distribution network. Lululemon also does its best to minimize the loss of in-store traffic by using features like online check-in and shopping by appointment.

These measures should give the retailer a good chance of maintaining its positive market share momentum in the fourth quarter. And another period of strong growth for the industry could push sales above management’s expectations, just as they did in the last quarter. But the outlook for lululemon still calls for a decline in growth trends in the coming weeks as pressures from COVID-19 return. Investors should lower their short-term expectations accordingly.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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Bank of America analyst sees GameStop stock plunge 97% Thu, 11 Mar 2021 06:00:44 +0000

Bank of America analyst Curtis Nagle trolls GameStop‘s (NYSE: GME) bullish supporters?

As the video game retailer’s stock doubled in value again this morning to over $ 300 a share, mercilessly for the short sellers who are obliged to cover their positions Due to the stock’s stratospheric race, the analyst joined in the binge eating, increasing his stock price target six-fold.

But this big upgrade actually comes with a very powerful warning for long investors: take a look below! Nagle only raised his outlook for the stock from $ 1.60 per share to $ 10 per share, indicating that he sees a 97% downdraft in GameStop’s future.

Image source: Getty Images.

The long and the short

GameStop overlaps with one of the most spectacular short cuts of memory. Just five months ago, the stock fell to $ 2.50 per share, meaning it has climbed over 12,000% since then, 685% since the start of 2021 and over 250% since the start of this week.

Still, it’s completely disconnected from anything resembling GameStop fundamentals. Nagle points out that for all the enthusiasm investors might have about adding activist investor Ryan Cohen to the board, it “won’t be significant enough to offset the structural pressures that are likely to accelerate in this. console cycle “.

He points out what is expected to be very low results in GameStop’s next earnings report due to weak holiday sales. After years of disappointing performance as the video game industry has moved to a digital online format, the fundamentals will “take valuation again” at some point and cause the share price to deflate rapidly.

GameStop does not have a moat to protect its profits, and as more businesses turn to online transactions, the harder it will be for it. video game retailer to generate high-margin sales of used games and collectibles.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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Analyst: Lululemon could have a 26% rise Thu, 11 Mar 2021 06:00:44 +0000

While the value of its share has fallen slightly today, lululemon athletics (NASDAQ: LULU) got longer-term approval from a JP Morgan analyst on Monday in the form of a price target predicting a nearly 26% rise for the stock. As reported by The Street, the bank continues to view Lululemon as overweight, while increasing its price target to $ 415, one of the most bullish numbers currently attributed to the clothing company by Wall Street analysts.

While the outlook for the sportswear seller is generally optimistic, JP Morgan’s Matthew Boss sees a market landscape full of opportunities for Lululemon’s expansion. Some of the areas where he believes Lululemon can achieve growth into a brand worth over $ 5 billion include the rapid acceleration in sales of men’s clothing, the vigorous expansion of e-commerce, the potential for more personal care products and a “significant untapped international presence”.

Image source: Getty Images.

The boss also cites specific measures in support of his positive case. These include Lululemon’s revenue growth exceeding company expectations with a recent jump of 12.4%, as well as selling, general and administrative expenses up 24%. He also underlined “the acceleration of the first line in mid-September (with a sustained momentum in October)”.

Although Lululemon currently occupies a dominant position in the casual sports market, he could have a significant challenger by next March. At this moment, Kohl’s (NYSE: KSS) plans to have his Premium private label FLX rolled out on store shelves, looking to win a slice of the athleisure pie. Other competitors are also emerging rapidly, with Lululemon banking on diversify not only into new product lines, but also into personal fitness.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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Analyst: Chipotle Mexican Grill Has 40% Increase As It Enters ‘Chapter on Accelerated Growth’ Thu, 11 Mar 2021 06:00:44 +0000

Actions of Mexican Grill Chipotle (NYSE: CMG) have climbed 52% in the past year and tripled from lows reached last March, but Piper Sandler analyst Nicole Miller Regan says there’s a lot more to come from the restaurant chain . On Tuesday, it raised its price target on the Mexican leader in food to $ 1,835 per share.

In a research note to investors, the analyst said Chipotle was getting stronger and “turning the page of the recovery into a chapter of accelerated growth.”

Image source: Chipotle Mexican Grill.

Focus on the best for you

The restaurant industry has been devastated by the COVID-19 pandemic as closures and stay-at-home orders emptied dining rooms. Chains that had an established business off-premises did better than their seated counterparts, and while you could sit at the table in Chipotle, it was mostly a take-out operation.

Miller Regan supports the restaurant is ready to capitalize on its product innovation, its development pipeline and the productivity gains of its new restaurants. For example, Chipotle just launched a cauliflower rice dish that aims to get into the healthier low-carb trend, and early in the year when consumers are still hanging on on their New Year’s resolutions to lose weight, this could be a popular article.

The analyst already had a high price target of $ 1,745 per share, 32% above Chipotle’s closing price of $ 1,319 per share yesterday, but his new target level suggests there are still around 40. % increase in the action of the Mexican-food group.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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A big change is coming in the next stimulus deal Thu, 11 Mar 2021 06:00:44 +0000

There is no doubt that 2020 has tested Americans’ resolve more than any year before. The 2019 coronavirus disease (COVID-19) pandemic has taken an incredible physical and financial toll, with nearly 135,000 dead in the United States, as of Saturday, July 11, and more than 20 million people excluded from the workforce .

As work continues on the research front on how best to tackle the COVID-19 pandemic, lawmakers have felt that the best solution to addressing the financial hardships associated with the coronavirus is to adopt the relief plan on most expensive in history.

Image source: Getty Images.

The CARES Act just hasn’t done enough for most Americans

On March 27, lawmakers officially passed and President Trump signed the CARES (Coronavirus Aid, Relief, and Economic Security) law. This $ 2.2 trillion package provided funds to hospitals to fight COVID-19, allocated $ 500 billion to struggling industries, allocated nearly $ 350 billion for loans to small businesses, and expanded the program unemployment benefits by increasing weekly payments by $ 600, until July 31, 2020.

But the indelible mark left by the CARES Law is the $ 300 billion for direct stimulus payments. According to recent figures from the Internal Revenue Service, more than 160 million economic impact payments have been sent to American workers and seniors, for a total of approximately $ 270 billion.

At the most, these stimulus payments could total $ 1,200 for an individual or $ 2,400 for a couple filing jointly, with a parent or household also eligible for a $ 500 kicker for each dependent aged 16 and under. . To reach this maximum amount, a single person, head of family or declaring simply needed an adjusted gross income of less than $ 75,000, $ 112,500 and $ 150,000, respectively.

Throwing in a lot of money for something never seen before seemed like a great idea at the time. But in hindsight, these stimulus checks did not do enough for most Americans. A Money / Morning Consult survey in April found that nearly half of 2,200 respondents had spent their stimulus money in less than two weeks, with 74% who should have used up all of their stimulus in four weeks, or less.

With the economic recovery much slower than expected and the US unemployment rate still above 11%, another round of stimulus certainly seems warranted.

A businessman in a suit holding a cardboard sign that says, Looking for a job.

Image source: Getty Images.

Expect this big change with the next stimulus deal

Until recently, the question was, will a second stimulus deal take shape? The answer now seems to be a resounding yes.

In mid-May, the Democratic-led House of Representatives passed the $ 3 trillion HEROES law, which, among other things, calls for another round of direct stimulus payments to workers and the elderly. While the maximum payments remain the same – $ 1,200 for an individual and $ 2,400 for couples – the additional payment for dependents (limit three) increases from $ 500 to $ 1,200. In other words, Democrats are okay with yet another round of stimulus.

However, recent comments from key Republicans suggest they are also on board. President Trump, Senate Majority Leader Mitch McConnell (R-Ky.), and Treasury Secretary Steven Mnuchin have all expressed interest in seeing Americans receive another round of direct stimulus payments.

But make no mistake, the next stimulus deal will have a very big change.

In an interview last week with CNBC, Treasury Secretary Mnuchin made it clear that the next proposal would include an adjustment to increased unemployment benefits. Approved unemployed beneficiaries will no longer automatically be eligible for an additional $ 600 per week in benefits. Unemployment benefits, according to Mnuchin, will not total more than 100% of what a worker would usually bring home if employed. Making the improved unemployment benefits dynamic at the typical wage of a worker will ensure that there is an incentive to put the unemployed back to work.

It’s unclear whether Democrats will agree to these terms, but the GOP appears to be holding firm that it has no intention of extending improved unemployment benefits, in their current form, beyond July 31.

A visibly worried couple are looking at their laptops, with their children in the background.

Image source: Getty Images.

Three more sticking points for a second stimulus deal

Chances are, once lawmakers put an agreement in place on what to do with improved unemployment benefits, other disagreements will be easier to resolve. However, there are three additional sticking points that need to be ironed out.

First, it is not clear whether the qualifying income thresholds for another round of stimulus payments could be changed. The HEROES Act that was passed in the House left the qualifying income thresholds unchanged from the CARES Act. However, Recent comments by Mitch McConnell during an event in his home country may suggest that Republicans are looking to lower income thresholds where payments gradually disappear. This would mean that fewer people would qualify for stimulus funds.

Second, there is bound to be a lot of debate about who will be considered a dependent and what dependents will add to each household or parent. Democrats want to see all dependents, regardless of age, qualify under the upcoming stimulus deal. Meanwhile, Republicans are likely to push back a significant increase in dependent payments or even the number of eligible dependents.

Third and finally, both sides will have to decide what additional measures, if any, will be included in the next stimulus package beyond just direct payments. For example, will we see additional funds allocated to small business loans? Could hospitals receive more capital to fight COVID-19? Are the states able to receive financial assistance from the federal government? These are all questions that hopefully need to be answered. in the next two weeks.

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What to do if your line of credit is decreasing and why it is happening Thu, 11 Mar 2021 06:00:44 +0000
  • There are many reasons a credit card issuer might decide to lower your credit limit, ranging from a change in your spending habits to missed payments.
  • You should never charge near your spending limit on your cards; ideally, you will keep your utilization rate below 30%. But having a higher credit limit is an important factor in improving your credit rating.
  • Credit usage represents 30% of your credit score. Therefore, the higher your credit limits on your accounts, the better your usage rate will be (assuming your balances stay low).
  • If your credit limit is decreasing, call your issuer to ask why and see what you can do to restore it. They may be willing to accommodate you after you have paid a balance or fixed an issue such as an error on your credit report.
  • Check out Business Insider’s list of the best credit cards.

You navigate with your preferred credit card when you receive a notification that your credit limit has been lowered. Say what?

The above scenario happened to a friend of mine who enjoyed using his credit card, made regular payments, was within the limit, or always late with a payment. His credit rating lost 30 points.

So why would a creditor suddenly lower your limit? Here’s what we found out and what you can do about it.

Creditors can lower your spending limit

Just as creditors can reward you for your excellent payment history and loyalty with a random and large credit increase, they can punish you by lowering your spending limit. The reasons may vary, but most are based on the fact that the creditor suddenly sees you as increased credit risk – or high risk of card default.

Banks can even collectively reduce the limits of multiple cardholders to reduce their risk of exposure in the event of an economic downturn or uncertainty, although this is rare.

Read more: The best credit cards if you have a limited credit history

Reasons your credit limit may be lower

  • Your spending habits have changed. If you haven’t used your credit card for a while and all of a sudden you start charging a lot, or if you’ve always paid off the balance in full and now have a balance, these changing habits can be a red flag. which results in a lower line of credit.
  • Your credit score has dropped. If you’ve had your credit rating down for some reason – too much debt, too many inquiries, or closed accounts – a credit card issuer might see that as a reason to lower your limit.
  • You have stopped using the card. Creditors want you to use their card, and after a period of inactivity, they can lower your limit.
  • Someone has stolen your identity. If someone has opened other cards in your name or is spending under your stolen identity, you look like a risky borrower.
  • There is an error on your credit report. An error such as a missed payment or a collection debt has appeared on your credit report without your knowledge. The answer is a lowered limit.
  • You are behind in other payments. You cannot keep a single card in good standing; all your creditors should be paid on time because creditors can see what other accounts you have and how you manage them. If they see something they don’t like (late or missed payments, for example), they can lower your limit.
  • You missed a payment with this creditor. This change may cause a creditor to lower your limit, believing that you may be going through financial difficulty and that you are at increased credit risk.
  • You have exceeded the 30% usage rate for this card. Creditors prefer that you keep your balance below a 30% usage rate for every credit card balance you maintain. Likewise, your credit score will be higher if you keep balances below 30% of available credit. If your card has exceeded that 30% usage, the change may cause them to lower your limit to avoid an even higher usage rate.

What if your credit limit goes down?

While it seems unfair that a creditor could lower your limit and possibly your credit score (check to be sure), there are things you can try to get your card issuer to reconsider. The Fair Credit Reports Act requires that a lender notify you if the lowered limit is the result of information based on your credit report. Check your report semi-annually to help discover errors and report them immediately.

In addition, there are provisions that protect you from over-limit charges if your card reaches its maximum within 45 days of the lowered limit.

Restore your credit limit

Call the creditor and ask for an explanation of why your limit was lowered. If the reason is because your credit rating has gone down, you are behind on other payments, or have missed any of your payments to the creditor, explain the situation and your plan to get back on track. Ask them what you can do to restore your limit. You may have to pay a certain amount, or be inactive for six months, for them to consider increasing your limit again.

If the reason turns out to be an error or stolen identity, you will need to contact the three credit bureaus – Experian, TransUnion, and Equifax – and report and dispute the error in writing. You will then need to dispute the error with your creditor and let them know that as soon as your report is corrected you will contact them so they can review and hopefully restore your previous limit.

If the reason is that your spending habits have changed or your card is not active, you may need to explain what is happening – you used the card for a medical or dental emergency, for example – and what is your plan to pay off the balance, or make sure they’ll use the card again.

Finally, if the reason your limit was lowered is because you exceeded your 30% utilization rate, the creditor may ask you to go back below by making a large payment on a certain date. If that’s not possible, see if you can make a plan to pay off a certain amount in, say, three or six months and ask if they will consider resetting your limit once that’s over. This turned out to be the reason for my friend’s lowered limit, and his creditor offered him a deal to get the balance back below the 30% utilization rate.

Keep your limits high

While it’s not that common for a creditor to lower your limit, you can usually try to defend yourself by contacting them, explaining the situation to them, and / or correcting them. If your creditor refuses to work with you, you can file a complaint with the Consumer Financial Protection Bureau.

The best way to avoid a lowered limit is to pay off balances in full each month, stay below your 30% usage rate, and use your card every now and then to keep it active. Monitor your credit report regularly and maintain your high credit score.

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Nike continues to draw bullish analyst forecasts Thu, 11 Mar 2021 06:00:44 +0000

Leader in sports shoes and sportswear Nike (NYSE: NKE) continues to attract the attention of Wall Street analysts after reporting strong sales in the second quarter of fiscal 2021 last Friday. Today, wealth management and analysis firm UBS joined the bullish camp with a price target of $ 183, which, at the time of its research paper was published, was an increase of around 33 % for Nike.

In its research note, UBS describes Nike as effectively being in a class of its own. “It is important to note that Nike’s rivals are very unlikely to catch up,” the note said, citing the company’s supply chain, advertising and new product rollout as placing it sharply in the spotlight. ahead of its competitors. The company also claims that “the main question is whether the stock can continue to outperform given its + 36% YTD movement” before coming to the conclusion, “we are confident the answer is yes.”

Image source: Getty Images.

Other analysts agree, with JP Morgan’s Matthew Boss saying his company sees “Nike brand momentum in all geographies as sustainable” and anticipates “single-digit multi-year revenue growth.” as a result, reports Footwear News.

Digital growth is the main driver of Nike’s current success and its rock star status among analysts. In the second quarter, e-commerce sales exploded 84% year-on-year. Speaking on the recent corporate earnings conference call, CEO John Donahoe described the results as “proof of the progress we have made towards our end-to-end digital transformation”, identifying this as the main driver “to better manage volatility and generate strong growth.”

While some less prominent analysts warn about Nike leveraging heavily to boost earnings per share through share buybacks, and say its P / E ratio may indicate it’s overvalued, most data appears to support UBS’s optimistic forecast.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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