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Thanks to increasing interest, savings accounts are popular again
Over the past year, plain old savings accounts have outperformed both the S&P 500 yield and the 10-year US Treasury bond yield.
And, as neo-banks and traditional institutions alike offer increasingly friendly interest rates, some money managers are finally headed back to the bank.
So, what led to the savings account revival?
First, it was competition: Digital-only ‘neo-banks’ like Chime, Revolut, and Monzo with fewer costs than vault-and-teller banks started offering higher interest rates, forcing traditional banks to follow suit.
But on top of that, savings accounts outperformed the S&P 500 by a full 8 percentage points in 2018, making high-yield savings accounts look more attractive than ever in a market that’s forecast to remain volatile.
Interest just got interesting
The average interest rate across savings accounts at all US banks is still relatively low (0.09%), but some banks offer savings accounts more than 20x higher than the national average: Northeast Bank offers a 2.9% yield, and Goldman’s Marcus and BBVA’s Compass both offer 2.25%.
Yet unlike Robinhood’s ill-fated 3% checking that was canceled last month due to lack of protection, these accounts are still protected by the FDIC despite delivering much higher returns than average.
A good investment… for now
Savings accounts are an unusually good deal today, but that doesn’t mean they’re gonna stay that way.
Banks change their interest rates, and some of these are unlikely to last for long. Plus, as soon as inflation increases higher than these interest rates (as it often does), saving accounts will start losing purchasing power.
All this new interest in savings accounts is a good reminder that there will never be one right way to invest money — but there will always be a million wrong ways to do it.
Steel producer Nucor will leverage federal tax cuts to build a $1.35B steel mill
2018 was good to steel producer Nucor Corp — and it doesn’t look like its white hot momentum will melt its steel beams anytime soon.
Yesterday, it revealed plans to create close to 400 new, full-time jobs to run its latest investment: a new $1.35B steel mill.
Nucor’s stock hopped 2.4% following news of the Midwestern facility expected to produce 1.2m tons of steel plate products a year once operational in 2022.
For Nucor, its 2018 success was norm-core
The 78-year-old steel giant has maintained profitable growth for a majority of its history — it even poured $8B into its business during the 2008 steel downturn.
But, 2018 was a banner year: The company estimated a record-breaking 22% increase in its yearly earnings per share, and returned $1.3B to its shareholders after increasing its 2018 dividend for the 46th year in a row.
A poster child of the federal tax reform
Nucor was a major beneficiary of the hotly debated $1.5T federal tax reform bill that reduced corporate tax rates from 35% to 21%.
Signed into law in December 2017, the reform aims to free up debt and incentivize corporate giants to raise wages and create jobs. Meanwhile, Nucor got to double-dip on regulations: new steel tariffs helped Nucor log its second-best earnings report ever in Q2.
|»||Feel the steel|
Motorola Solutions acquires VaaS for $445m to enhance its law enforcement suite
When you think of Motorola you probably think flip phones. But Motorola Solutions (which split off from Motorola Mobility back in 2011) has expanded far beyond t9.
Yesterday, the “mission-critical” communications and security company acquired Vaas International Holdings, a company that makes automated license plate readers, for $445m.
Motorola’s gone full pre-cog
The acquisition will strengthen Motorola Solution’s already fully loaded package of automated law enforcement services. Vaas provides high-tech, AI-enabled video analytics software that can help detect, track, and identify people and objects.
Founded in 2014, the company specializes in vehicle location data through license plate-reading cameras run by machine learning and AI that, according to the EFF, are capable of recording up to 1.8k license plates a minute, or up to 14k in a night.
So… just a few more than a human police officer’s eye.
But heavy lies the camera
License readers scan all vehicles in view. And, whether the vehicle holds a fugitive, or a soccer mom, or both, it’s taking your data.
In the past, certain mishaps have led many to question whether these programs can be properly regulated. Like in 2013, when the Boston Police Department suspended its automatic license-reader program after it accidentally leaked a database of more than 68k vehicles.
Yeah, but it’s just data… right?
|»||Dirty Harry is now a robot|
Luxury travel agencies are selling so-called ‘sabbaticals’ to the world’s wealthiest workers
As executive incomes rise and corporate culture becomes more casual, highly paid workers are increasingly taking mega-vacations that last for several months or longer.
As these so-called ‘sabbaticals’ become more common, travel companies are creating 12-month-long trip itineraries to cater to vacationers who want more than a weekend at Sandals.
Aren’t sabbaticals for professors?
Not anymore. Extended trips first became common for startup founders who sold their companies and wanted a break.
But, as competition for talent among top companies has increased, sabbaticals have become a common carrot on a stick to attract and retain employees: Today, 17% of businesses have launched sabbatical programs.
Genentech offers a 6-week paid sabbatical, Intel and BCG offer 8-week paid sabbaticals, and Deloitte offers 3-6 month sabbaticals for ‘personal growth’ at 40% pay.
The virtuosos of vacation
If you’re wondering what you would even do with consecutive months of vacation, there are plenty of vacation companies out there to help.
Original Travel, a London travel agency, has designed more than 80 separate, year-long trips — including a recent itinerary through 65 countries for a “burnt out” tech entrepreneur and his family that included helicopter-based snow leopard tracking in India.
“The super-rich want to learn new skills,” Tom Barber, the CEO of Original Travel, explained to The Guardian. “Sitting on a super-yacht in the sun is pretty old-school these days – people want to have adventures and learn new things.”
| Conor Grant, News Writer at The Hustle
Don’t get me wrong, I like snow leopards as much as the next guy… but if you’re so ‘burnt out’ from work that it takes a trip through 65 countries to ‘refresh your life,’ no amount of leopards will save you.
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|»||Vacations on steroids|
Reason #2143 to start investing: Turn your food cart dream into a retail reality
Do you cook up a hot dog with the best of ‘em? Got a knack for reclaiming farmhouse doors into coffee tables?
C’mon, you read The Hustle… we’ve all thought about starting a small biz before.
A first step towards piling up some funds for that first-6-months-in-business cash burn that may avoid jeopardizing your financial future? Opening a Morgan Stanley Access InvestingSM account.
Fund your dream job today, not tomorrow
When you create a portfolio with Access Investing, you’re not just investing in funds — you’re investing in your future business.
Their more-powerful-than-a-speeding-hot-dog-cart algorithms work to find investments to help you reach your goals.
They also know that you don’t have time to waste manually messing with things like rebalancing your assets, so they automated those tasks to save you time.
Even the little things you might forget, like strategies designed to avoid unnecessary taxes and get the most out of your after-tax returns, are covered.
TL;DR — That little storefront may be closer than you think. See for yourself. Open an Access Investing account with a $5000 investment.**
FINE-ISH PRINT: For additional important information regarding Morgan Stanley Access Investing, click here.
An interview series about making a living while making music.
Magic City Hippies on building a brand
If you haven’t heard of Magic City Hippies yet, you will.
Their rise to indie music fame has been mythic: From panhandling on the streets of Tampa, to playing on the same bill as Paul McCartney — in the past couple of years they’ve grown to half a million monthly listeners, with top tracks garnering millions of streams from around the world.
On the surface, Robby Hunter, John Coughlin, and Pat Howard exude the laidback island vibes of a millennial Jimmy Buffett with three times the chest hair. But behind the scenes, the “indie funk darlings” of Miami handle everything from web design to payroll to building their following.
We spoke to Magic City Hippies on building a brand, self-financing a tour, and how to set it all aside in the studio.
|Limstone, Magic City Hippies. The sonic equivalent of a poolside margarita|
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| Lindsey “Been on sabbatical since the 80’s” Quinn
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