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High-Yield Savings: While the Federal Reserve has raised its interest rates to the highest since early 2008, commercial banks are still paying next to nothing to their savers. In theory, savers could have earned $42 billion more in interest in the third quarter if they moved their money out of the five largest U.S. banks by deposits to the highest-yield savings accounts—according to S&P Global Market Intelligence data. The five banks paid an average of 0.4% interest on consumer deposits in savings and money-market accounts during the quarter. The five highest-yielding savings accounts paid an average of 2.14% during the same period. As we communicated in a recent weekly, we’ve identified some money market funds yielding more than 3.4%.  Please let us know if this is an option you’d like to discuss.

End of Year Clean-Up: If you’re feeling that need to purge and organize, consider what can be done electronically as well. One particular area to focus on is your subscriptions. Pre-pandemic, from 2012-2018, subscription businesses saw their revenue grow by more than 300%, five times faster than the overall pace of the companies in the S&P 500, according to management consultant firm McKinsey. A study posted last week estimating long-term impacts of Covid-19 on consumption patterns found that, while most consumer spending habits reverted to pre-pandemic trajectories, subscriptions spending has been durable. Studies show that 61% of consumers are “hooked and happy” with their subscriptions, noting that the longer they subscribed the less it felt like a “nice to have” and the more it felt like a utility or cellphone bill. Take a quick look at those subscription charges to ensure they are still worth your monthly investment!

Tax Prep: It wasn’t a secret this was coming, but it may still come as a surprise. For any client who receives income via a third-party processor like PayPal, Venmo, and Cashapp, IRS law now requires a From 1099-K for any individual or business that receives more than $600 of income in a calendar year. In the past, the income threshold necessary for this form was $20,000, but a portion of the American Rescue Plan Act of 2021 changed those numbers. If this applies to you, be aware as you prepare to file your 2022 taxes.

Business Briefing

  • Social Media Bans: On Thursday, Twitter announced the suspension of the accounts from The New York Times, The Washington Post, CNN and several other news outlets who cover the social media platform and its owner, Elon Musk. Musk linked the suspensions to new rules banning accounts that track private jets. Those accounts were restored after widespread backlash. On Wednesday, the Senate approved a bill seeking to ban TikTok from U.S. government devices due to concerns that the social media app, owned by China’s ByteDance, could pose an information security-risk. (CNN, NBC News)
  • Interest Rate Increase: The Federal Reserve raised its benchmark short-term interest rate by 0.5 percent on Wednesday, easing back after four straight 0.75 percent hikes. They are continuing to aggressively increase the cost of borrowing to cool the economy and bring down the highest inflation in decades. With inflation falling slightly, Fed Chair Jerome Powell indicated after a two-day policy meeting that the central bank would continue raising rates but probably slow its increases further to a more common 0.25 percent hike next meeting (scheduled Jan. 31-Feb 1).

If You Need a Laugh: One of the most popular photography contests in the world is called the Comedy Wildlife Photography Awards. It’s free to enter, yet both money and awareness are raised each year with 10% of net revenue donated. The competition focuses on the lighter, humorous side of wildlife photography. In hopes to get a smile out of you this Monday morning, here are a few of the entries:

The Comedy Wildlife Photography Awards 2022 | Jennifer Hadley Raleigh | Title: Talk To The Fin!

Miroslav Srb | Title: Hello Everyone!

Jean-Jacques Alcalay-Marcon | Title: Misleading African Viewpoints 2

Mark Schocken | Title: Tight Fit