June 17, 2021

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TOGETHER WITH

Good day. According to Financially Simple, all economists agree that predicting a stock's price is tough. Can you guess what percent of Americans agree with that statement? See the answer below in the "trending" section!

Here are the points of personal finance interest today:

Please find your lost 401k
Crypto seasons—how long does this bitcoin winter last?
Pay off your student loan or await forgiveness

RETIREMENT SAVINGS

Please find your lost 401k

Are you the type of person who would stop to pick up a penny found on the sidewalk? Do you cringe at the thought of spending leftover money in your budget? Do you obsessively calculate your net worth every month? If you've answered yes to any of these questions, you may want to skip this section.

Americans have apparently lost, yes, lost over 1 trillion dollars worth of 401k accounts. The total amount left sitting in the most expensive lost and found box ever is about $1.35 trillion, belonging to over 24 million account owners, and that number is growing by about 2.8 million every year.

But like, how?

Most of this "forgetting" probably comes in the midst of a job transition, and it's entirely plausible that some employees never even gave the account a second thought after they filled out a few forms and signed some lines upon their hiring.

Transitioning out of a job you were eager to leave can be a stressful and hectic process on its own, nonetheless if you're jumping right into a new one. Despite this, in the long run, it will undoubtedly be worth your time to make it a point to inquire about your 401k and what your options are before your departure.

401k options for when you leave or switch employers, simplified

Leave it with your former employer. Most plans allow for 401ks with north of $5,000 invested to be left with your prior employer. However, if you find your separation to be a not-so-mutual situation, or more importantly, you think you could forget about the account altogether, moving it is always a good idea.
Roll it over to your new employer, or an IRA: If you already have a new position lined up and the employer offers a plan you like that offers diverse and low-cost investment options, rolling it over to your new 401k is absolutely an option. If you prefer a broader selection of investments to choose from in an account that has nothing to do with your old or current work, roll it into a rollover IRA account at a brokerage firm of your choice. You'll have a much wider selection of investments to choose from with an IRA.
Cash it out. If for whatever reason, this is the only option in your unique situation, you can always just cash it out and be confronted with a tax bill as well as an early withdrawal penalty (assuming you're younger than 59.5). Oh, and don't forget about the compounding growth that you'd be missing out on with early cash-outs.

CRYPTOCURRENCY

Crypto seasons—how long does this bitcoin winter last?

Every year, for some reason, we hear at least a few mentions of "Christmas in July." This mostly comes from retailers looking for an excuse to run a sale, or people simply creating a reason to get together. Well, Bitcoin has been undergoing a similar wintery season in the warmer months lately, and summer hasn't even officially begun yet.

What happened to the proposed $500,000 price target by the end of 2021? Bitcoin's emergence from an almost 3-year hibernation of sorts gave long-time "hodlers" and crypto lovers alike a sense of hope that maybe this time we could finally see the light and not just some short-term run-up.

It's the skepticism for us

Bitcoin had an impressive run since last fall through April when it topped out at $64,000. That was tremendous progress, and Bitcoin showed great resilience considering the almost constant berating of fear, uncertainty and doubt (FUD) it takes from skeptics.

Since then though, and especially over the last month and a half, Bitcoin has taken a beating on the charts, losing over $30,000 or nearly 50% from its all-time high back in April. Why? Well, skepticism is the main culprit.

Elon Musk: Unofficial market maker & a lack of conviction

You can thank Elon Musk in part for the regression we've seen, as his questionably regulated influence on the crypto markets has weighed heavily on Bitcoin's public sentiment. But you can also give a nod to the lack of due diligence, which is what causes most investors' opinions to be swayed by the likes of Elon's waffling personal stance and obscure memes.

Let's face it: the vast majority of crypto holders probably don't know or care what the value of Bitcoin is to them; they're concerned if it will go up. When the waters are choppy, they flee, and choppy they are. Without a conviction in what you're buying, FUD will keep disrupting Bitcoin's growth until it's moved past.

So, what does the groundhog say?

As for forecasting when the end of this current bear market may finally end, no one knows, but it certainly does feel like Punxsutawney Phil saw his metaphorical crypto shadow once again.

The reality is that Bitcoin and other, smaller crypto projects could break out at any given time, and all it takes is the right piece of news. With the right endorsement from a public figure, institutional investor or business, this bear market could turn bullish very fast, or we could just as easily continue to see BTC and others get beaten down by skeptics.

(Stay tuned for next Tuesday's edition on Blockchain, simply explained).

STUDENT LOANS

Pay off your student loan or await forgiveness?

Republican, democrat, independent, whatever your political alignment, most people can agree on one thing: waiting on the government can be a never-ending process. Although one of Joe Biden's biggest points of emphasis during his campaign was that he'd eliminate some student loan debt, that item just failed to make the budget, and we're still awaiting further updates on the proposed executive order to cancel up to $10,000 of student loans.

It puts many Americans in a curious predicament, one where they're not sure if waiting and accruing interest (after September 30th) at the chance of eventual forgiveness is worth it, or if they should just begin and continue repayment of their loans regardless of the rumors.

Every financial situation is unique, but here are a few things you should consider when deciding.

If you're pursuing Public Service Loan Forgiveness (PSLF). PSLF allows certain qualifying full-time government employees that have made 120 qualifying prior payments on the loan balance to have the remainder of the loan forgiven. If you've applied, plan to apply, or are waiting to be approved, it may be worth it to put off your repayment.
You're in some other unique situation. Similar circumstances to this might be if you anticipate employment with an organization whose benefits will contribute to the repayment of your loans, you're awaiting an inheritance, etc.
You can't afford to pay it yet. The federal repayment freeze on interest payments is in effect until September 30th of this year. Holding off a little longer, at least until there is more clarity, won't hurt while you await further updates.
You can afford it. If you're in a position where you could actually wipe out most or all of your remaining loans at once, then you're in a great position, but the cautious advice would be the same: wait until closer to the end of September or when there is more information available to then make your decision. Of course, there's no shame in just paying it off anyway if you can and it feels right to you.

📚 On the other hand, if you have multiple student loans and are thinking about consolidating them, get familiar with some of the facts to help you decide whether it's something you would want to do:

Student Loans: Consolidate or Not?

6 mins

ASHU'S CORPORATE COLOR

Today's Movers & Shakers

German CureVac falls by 45% after disappointing Covid vaccine results (47% efficacy contrasting that with similar technology used by BioNTech and Moderna)
Ford (+2%) after similar forecast as its crosstown rival, GM
Gold mining stocks are down as the Fed becomes hawkish
Novavax (+3.4%) and BioNTech (+2.6%) after poor CureVax results
The Honest Company (-8%) after reporting larger than expected losses (sales came in higher though)
Tenet Healthcare (+3.5%) after announcing a sale of five hospitals
Fisker (+3%) after announcing an agreement with Magna International to build its electric SUV
Akamai (-1.5%) after its technology was blamed for internet outage for financial institutions, airlines and governments

This commentary is as of 9:20 am EDT.

✨ TRENDING ON FINNY & BEYOND

All economists agree that predicting a stock's price is tough. Only 59% of Americans agree with that statement (Financially Simple)
What the heck is a "Hodler?" Hint: it's not "Holder" misspelled (Decryptionary)
SEC delays ruling on Bitcoin ETF in blow to crypto traders (Yahoo Finance)
Finny lesson of the day. For those new to investing and asking us for more guidance, we're featuring this particular lesson once again! In this bite-sized quiz, we'll show you how to construct your own simple, three-fund investment portfolio:

Create a Simple 3-Fund Portfolio

6 mins

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Finny is a personal finance education start-up offering free, game-based personalized financial education, a supportive discussion forum, and simple stock and fund tools (aka Finnyvest). Our mission is to make learning about all things money fun and easy!

The Gist is Finny's newsletter to our community members who are looking to make and save more money, protect their finances and be their own bosses! Finny does not offer investment or stock advice. The Gist is sent twice a week (Tues & Thurs). The editorial team: Austin Payne and Chihee Kim. Thanks to Ashu Singh for Today's Movers & Shakers.

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Trip Guide News

❄️ Crypto winter

Thursday, 17 June 2021