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My husband and I were always good with money until a surprise surgery left us with $10,000 of credit card debt. Here's how we paid it off in 8 months.

Thu, 01/16/2020 - 4:21pm

  • My husband and I were always good with money — we lived within our means and didn't carry credit card debt, so we didn't watch our day-to-day spending too closely.
  • However, when we both changed our jobs and were surprised by medical bills for an unexpected surgery, we just couldn't keep up with the expenses.
  • Soon enough, we had $10,000 of credit card debt. Once I started scrutinizing our spending, though, we were able to pay it off in less than a year.
  • Read more personal finance coverage.

When my husband and I met, neither of us carried credit card debt. We lived within our means, spending the money we made to travel and dine out at new or interesting restaurants within the Minneapolis/St. Paul area.

After dating for a year and a half we rented a small 1-bedroom apartment together in a suburb of Minneapolis. When our lease was up for renewal and we wanted more space, we realized we could buy a home for roughly the same monthly payment as a 2-bedroom rental apartment nearby.

So that's what we did. We started our home search and ended up buying a modest 3-bedroom, 2-bathroom home on the other side of town. I was still teaching at the time, and my husband was transitioning from entrepreneur to corporate employee, so we wanted to make sure we could afford a home on one salary in the event we needed to.

What happened next was completely unexpected. My husband needed to have surgery on his shoulder, and insurance barely covered any of it. Although we had been great at living within our means, we didn't have a lot of extra savings and when the medical bills started rolling in, we couldn't keep up. That, coupled with me leaving my stable teaching job to pursue entrepreneurship, really took a toll on our finances.

We never worried about what we'd been spending — but now we had to

After we bought our home, but before the surgery, I had changed jobs. Then, post-surgery, I switched jobs again, taking a full five months off when our daughter was born. I did receive six weeks of short-term disability pay, but otherwise that time was unpaid. Then, four months after returning to work, I left to stay home with our daughter full-time and pursue my own financial coaching business. It was the right decision for our family, but still a financially straining one.

At one point my husband and I had close to $10,000 of credit card debt racked up between medical bills and not adjusting our lifestyle with the loss of my income. We had been so "good" with money up until this point in our lives, and I had a lot of shame around the fact that we had recurring credit card debt. I decided it was time to take back control of our finances.

I was no stranger to using a tracking/budgeting software, but had been neglecting to watch where our money was going over the years. We never felt we needed to worry about what we were spending, but looking back now I realize that it would have helped us prevent the mound of credit card debt we had gotten ourselves into.

Seeing where our money actually went was a real eye-opener

The first thing I did was type out all of our fixed expenses, including all memberships, subscriptions, and bills. This right away made me realize what we signed up for that we didn't actually need, or worse, weren't using at all.

I then subtracted all these fixed expenses from the amount of income we had coming in each month to determine what was left over. That leftover amount was what we got to spend on variable expenses such as groceries, entertainment, and dining out.

The next thing I did was link all of our accounts to Mint in order to categorize and track all of these discretionary expenditures. I set up spending targets so I knew when we were getting close to the amount I had allocated to that category. This was a huge eye-opener and made us realize how we were spending our money, especially on food!

By checking in with our accounts on a daily basis, I was able to help our family stay on track and free up cash to send to our debt. We were able to pay off that debt within eight months, and have been able to keep it off since. Now I usually only check in with our accounts on a weekly basis, but I still use the same cash flow template and the spending targets to keep our family on track to reach our bigger financial goals (like paying off our mortgage early).

Fast forward a few years and we have a healthy emergency fund and will be paying off the rest of my student loans and my hubby's car loan within the next month. I can honestly say we wouldn't have been able to make strides this fast if it wasn't for my commitment to getting a handle on where our money was going each month. It seems elementary, but I tell all my clients that the first thing they need to do is figure out where their money is going.

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Katie Oelker is a financial coach, personal finance writer, and podcaster.

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A quick guide to what Trump's 94-page trade deal with China included — and left out

Thu, 01/16/2020 - 4:09pm

  • The US released the text of an interim trade agreement with China this week.
  • It offered for the first time the details of what will be expected in a new chapter of relations between the two largest economies.
  • Here's a quick guide to what is included.
  • Visit Business Insider's homepage here.

The Trump administration released the text of an interim trade agreement with China on Wednesday, offering for the first time the details of what will be expected in a new chapter of relations between the two largest economies. Here are the main takeaways on what's included in the 94-page document. 

SEE ALSO: IT'S OFFICIAL: Trump signs China trade deal, says tariffs could be lifted in phase 2

China pledged to buy more US products

China agreed to increase its purchases of American products and services, including agricultural and energy exports, by $200 billion within two years. But critics have questioned whether there would be enough demand to meet the steep quotas and noted that the stipulation clashed with the free-market trade approach championed by Republicans. 

"Interesting how an objective of the trade deal is to end state directed commerce and trade," said Joseph Brusuelas, the chief economist at RSM. "Yet, the very premise of the agreement is predicated on state to state directed transactions. This almost surely sets up future rounds of tension and tariffs."

Intellectual property protections were strengthened

Protections for trade secrets, pharmaceutical-related intellectual property, patents, and other intellectual property have long been sought by the Trump administration, which cited the theft of these in a Section 301 investigation that started the trade dispute. 

The agreement also said China would no longer force foreign companies to hand over technology, such as when they apply for permits and otherwise have to work with the government. Industry leaders cheered this chapter, which also included a pledge not to direct or support investments aimed at acquiring foreign technology for the Made in China 2025 plan. 


China reaffirmed it would be transparent on the movements of its currency

China said it would be more transparent on any interventions that influence the strength of the yuan, such as through public disclosures of its reserves and balance of payments. 

But those requirements were not a significant departure from what has long been expected by the International Monetary Fund. G20 countries including China are already barred from wielding their currencies as a weapon to compete in the international market. 

"There is nothing in the currency provisions of the deal," Brad Setser, an economist at the Council on Foreign Relations and a former Treasury official, wrote on Twitter. "But [US Trade Representative Robert Lighthizer] also has crafted a deal that should deliver on his boss's top priority: reducing the bilateral trade deficit."

Trump has often lashed out about the strength of the dollar against other currencies, which makes exports relatively expensive abroad. This month, the Treasury Department reversed a decision to label China a currency manipulator. The rare move came after the yuan breached a key level, but experts questioned whether it was politically motivated. 

Industrial subsidies were not addressed

The large-scale subsidies and cheap loans awarded to businesses in China were also flagged in the Section 301 investigation. But there were no commitments in the phase-one agreement to resolve the long-running issue, which American officials and executives have long argued has put domestic companies at a disadvantage in the global market. 

It isn’t clear how effective enforcement will be

The US has struggled to secure an enforcement mechanism that would lock China into economic commitments, which it has been known to backtrack on in the past. When the two sides were seen as on the verge of a trade deal in May 2019, China reversed on pledges to rewrite related domestic laws.

As part of the process, the US and China will hold regular meetings. If any complaints are filed, the two sides ageed to address them on a bilateral level as opposed to through a third party. After a 90-day appeals process in which trade negotiators attempt to resolve the complaint, the US can take "proportionate action" if it chooses.

Tariffs remain on more than $360 billion shipments from China, leaving the administration with what has emerged as its preferred source of leverage over the past two years. But those come at a cost for American companies and consumers.

The No. 2 mutual-fund manager of 2019 is a green-energy and tech investor. He told us how he picks the companies with the brightest futures — and offered a peek into his portfolio.

Thu, 01/16/2020 - 4:04pm

  • Garvin Jabusch told Business Insider how he chooses companies for the tech- and renewable-energy-focused Shelton Green Alpha Fund, the second-best performer among large-cap mutual funds in 2019.
  • Jabusch said he has succeeded in investing in innovators with strong intellectual-property positions and those benefiting from long-lived economic trends.
  • He combines that approach with a value- and fundamental-based philosophy that emphasizes revenue growth and cash flows.
  • Click here for more BI Prime stories.

Investing in the technologies of the future involves keeping track of things that aren't easily measured in numbers.

But Garvin Jabusch managed to stay on top of them in 2019, and then some. He comanages the Shelton Green Alpha Fund, which invests in innovative technologies and beat 97% of its peers. With a 43.7% return, it ranks No. 2 among large-cap US mutual funds for the year, according to Kiplinger.

While the fund had endured a couple of rough years before that, Jabusch said his strategy hasn't changed since its inception in 2013. He said sentiment shifted in his favor while he focused on the trends that matter most for his investments, a combination of company performance and focus on new technologies.

"We want to find the firms with the best fundamentals. And then we want the ones that own the most IP around the best innovation," he told Business Insider in an exclusive interview. "We want to think about what is going to grow into not just the next quarter or even year but over the next half decade, decade, even couple of decades."

Intellectual property is key to that approach. Jabusch said he wanted to find the companies that have developed technologies that their competitors would have to build on, giving them an advantage and long-term sources of revenue from licensing.

Here's an example of how those threads can come together: One of the Green Alpha Fund's biggest investments is in First Solar. According to Jabusch, the company benefits from the plunging cost of solar energy, an economic trend that has giving it a crucial advantage over fossil fuels. Meanwhile, in America it has a near monopoly on the type of solar panel that's cheapest to make.

"That's an example of the intersection of a great new technology that's more productive than its predecessor and then seeking the owners of the smartest IP," he said. "The overall approach is to think a little bit more about economics and a little bit less about finance."

Other major areas of focus include wind energy, CRISPR gene therapies, and chipmakers with an eye on developing industries like artificial intelligence and robotics. He also has positions on Tesla and Alphabet. Its largest current positions are on the Danish wind-turbine company Vestas, chipmaker Applied Materials, First Solar, the solar and wind company TerraForm Power, and the tech-consulting giant IBM.

Despite his futuristic focus, Jabusch does consider himself a fundamental investor. He looks for companies that are growing and betting on themselves and ignores per-share numbers entirely, he said.

"I want to see expanding revenue. I want to see proven ability to expand margins. I want to see increasing free cash flows, and I want to see the firm doubling down on its innovation," he said.

He added that he uses a modified version of Graham-Dodd valuation to asses them. He combines a look at companies' discounted cash flow and the value of its assets with an assessment of the economic trends supporting their businesses.

"With the world changing so fast, it's hard to do value investing without marrying it to macro even though that would be heresy to a traditional value person," he said. "We think you've got to be looking ahead, and you have to marry macro to your overall approach because without that, you don't have a very informed view about what kind of growth you can expect."

SEE ALSO: A strategy chief at $7 trillion BlackRock reveals the 4 trends that will shape how the world invests for the next 10 years — and why the trade war won't scare her away from China

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FREE SLIDE DECK: The Future of Fintech

Thu, 01/16/2020 - 4:02pm

Digital disruption is affecting every aspect of the fintech industry. Over the past five years, fintech has established itself as a fundamental part of the global financial services ecosystem.

Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, incumbent financial institutions are getting in on the act, and using fintech to remain competitive in a rapidly evolving financial services landscape. So what's next?

Business Insider Intelligence, Business Insider's premium research service, has the answer in our brand new exclusive slide deck The Future of Fintech. In this deck, we explore what's next for fintech, how it will reach new heights, and the developments that will help it get there.

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Free tax filing is available to 70% of US taxpayers. Here's how it works.

Thu, 01/16/2020 - 3:55pm

Tax season 2020 begins just after the new year. 

Employers are required to send tax documents to workers on or before January 31, which you'll use to file your taxes for 2019. The deadline to file and pay any tax you owe is April 15.

If you're an employee, your employer will send a W-2; if you're a freelancer, you may receive multiple 1099 forms. In some cases, you may have other statements, such as income earned from an interest-bearing savings account or interest paid on a loan, or even taxable bitcoin gains.

Free tax filing is available on the IRS website with income restrictions

Taxpayers with an adjusted gross income (AGI) — your gross income minus any above-the-line deductions — below $69,000 are eligible to use the IRS' free tax filing portal. According to the IRS, that's about 70% of US taxpayers, or around 100 million people.

The portal lists 10 different tax preparers, including H&R Block and TurboTax, that charge no fees for filing your tax return. The companies impose various income limits — they all require the filers' AGI to be somewhere below $69,000 — as well as age restrictions.

These online services help you prepare your tax return step by step and are typically easy to navigate. Some also offer free filing for state income tax returns, while others charge a fee. 

Some tax preparers don't list the free file option clearly on their websites, so it's best to go through the IRS website if you know your AGI is under $69,000. 

H&R Block, TurboTax and others offer free tax filing at any income level

You can still file for free if you made more than $69,000 in 2019. However, instead of navigating through the IRS' free file portal, you should go directly to the company's website.

Two of our top picks for best tax software, H&R Block and TurboTax, offer free tax filing for very simple tax situations, regardless of your income level. Credit Karma Tax also has completely free federal and state tax filing with no income restrictions.

Even if you qualify to file your taxes for free, it may be worth it to hire a pro if your financial situation is complicated. A CPA can offer professional insight, find ways to save you money, and help with future tax planning strategies.

Once you're ready to file your taxes, the IRS recommends electronically filing and requesting direct deposit for your refund. You'll typically get your tax refund within three weeks, rather than the standard six weeks, and it's safer than getting a check in the mail.

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I inherited $10,000 when my grandpa died and spent the money in 3 ways that changed my life

Thu, 01/16/2020 - 3:38pm

  • When my grandpa died, my dad gifted my sisters and me $10,000 each from the money he inherited.
  • I used it to pay off debt, buy a used car, and start an emergency fund. This set me on a path to financial security that changed my life.
  • The gift also motivated me to start building wealth. Even though I don't want to have kids, I want to be able to show the same kind of generosity to my loved ones one day.
  • Read more personal finance coverage.

A few months after my grandpa died, I woke up to an email from my dad with the subject, "Check Your Bank Accounts."

The email was sent to my sisters and me. It read, in part, "It amazes me that my mom and dad were able to raise seven kids on a single income. We weren't rich but lived a nice middle-class life. My mom was the queen of coupons." Knowing my dad, this didn't surprise me.

He continued, "What's even more amazing is that not only did they raise a family on one income, but they were also able to save. My dad left a significant inheritance to his kids and I want to share part of that with you girls."

He'd deposited $10,000 in each of our accounts. I couldn't believe it.

To someone with a massive trust fund, this probably doesn't sound like a life-changing amount. But for me, it completely changed my finances and the way I think about money.

I used it to pay off debt, buy a car, and start an emergency fund, and my entire life changed

Around the time I received that email from my dad, I'd been working for the past two years to pay off credit card debt using balance transfer credit cards; I'd accumulated the debt after moving abroad and changing careers. 

My balance was down to $3,000, and I had just six months left before the 0% introductory APR would end and I'd have to pay the regular interest rate on my remaining balance.

The first thing I did that morning, after processing what I'd read, was log on to my credit card account and pay off my entire balance. Just like that, I was officially debt-free. It felt like a huge weight had been lifted — I could do anything!

I still had $7,000 left. Toward the end of the email, my dad had written, "Don't just pay bills, (although maybe you need to use some of it for that). Think about how to use at least part of it for something that's memorable and meaningful for you."

I thought for a while about how I could use the rest of that money in a way that would meaningfully impact my life, and not just in the short run. I knew I wanted to save a portion of it, but I also wanted to spend a little on something special.

I'd moved to Costa Rica several years prior, and I'd been living there car free ever since. While I do enjoy life without a car, it had become difficult to go anywhere without one because the rural town where I live only has bus service once per day. 

Apart from making everyday errands a bit of a pain, living without a car meant I rarely got to take advantage of living in a country so filled to the brim with beauty, because going on trips to the beach or to a new hiking spot was such an ordeal. 

So, I spent $3,000 on an older, used car that I paid for in cash.

Finally, I put the remaining $4,000 in a high-yield savings account. This would be the beginnings of my emergency fund, something I'd long wanted to create once I paid off my debt. As a freelancer with unstable income, and as someone living abroad, far away from any family, I needed one. 

I've since built up that emergency fund to $30,000, leaving me enough to cover emergencies or loss of work, but also to invest in myself and take risks when opportunities arise. This has improved my quality of life just as much as being debt-free.

Why my family's generosity made me want to start building wealth, even though I don't want to start a family of my own

If you had asked me what $10,000 could do for my life a couple of years ago, I would've recited the things I could use it for. 

I knew that money could help me in a material sense, but I didn't anticipate just how much it would shift my mentality, the sense of optimism and freedom I would feel to finally be on the road to financial security. 

Achieving a sense of financial security changed every aspect of my life, from my mental health to my career to my relationship. While I could've gotten here without that $10,000, that timely boost was just what I needed to see the light at the end of the tunnel and realize that I was capable of taking control of my financial life.

This made me understand the power that even small gifts can have in a person's financial life, especially in times of need. I'd never considered wealth-building or worried about leaving something behind before because I didn't plan on having kids. 

However, that gift from my grandpa made me realize that I didn't need to have kids to give back in the way that he had. If I could manage to build a little wealth, that would give me the power to help and support any of my loved ones if they one day need it. 

I could save money to go toward a niece or nephew's college tuition, pay for my youngest sister to go on a graduation trip, or help my best friend pay for a costly car repair. Maybe one day I could take my dad on a trip as a thank you for everything he's done for me.

This motivated me to kick my savings rate into hyper speed and finally start investing for the first time in my life. The basics of wealth building are this: make more money, save more money, and invest more money.

I set a goal to increase my income as a freelancer last year and already achieved it, so my goal for this year is to continue moving steadily upward while further diversifying my sources of income for added stability. 

My other goal is to save at least 50% of my income, made possible by the fact that I live with very few fixed costs — a low rent payment, thanks to living in a rural area, and no car payment — and a high income level relative to those costs.

That savings will be split between making sure I always have sufficient cash reserves on hand in a high-yield savings account and building my medium- and long-term investments.

At the end of last year, I opened an investment account with Vanguard and started with a basic three-fund portfolio, which includes three index funds: the Vanguard Total Stock Market Index Fund (VTSAX), Vanguard Total International Stock Index Fund (VTIAX), and Vanguard Total Bond Market Fund (VBTLX). This will be the foundation for building my net worth in the years to come.

If I were only thinking about myself, I wouldn't feel pressed to build wealth. I'm comfortable living on relatively little, and as I mentioned, I don't want to start a family. But my grandpa and dad's generosity made me want to be capable of doing the same for others.

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Stocks are the most expensive since the 1980s based on one critical metric

Thu, 01/16/2020 - 3:16pm

  • Traders are paying the most relative to the S&P 500's price/earnings-to-growth ratio in more than three decades, Bank of America wrote in a Thursday note.
  • Bank of America began tracking the PEG ratio in 1986, and the index's current ratio of 1.8x is the highest the bank has observed.
  • The S&P 500's price-earnings ratio recently hit its highest level since 2002 at 18.6x.
  • The US market "is running on fumes," BofA strategist Savita Subramanian wrote, and stocks could see "multiple compression" before the year is out.
  • Visit the Business Insider homepage for more stories.

US stocks are the most overvalued they've been in at least three decades judging by their price/earnings-to-growth ratio, according to Bank of America.

The S&P 500's PEG ratio sits at an all-time high of 1.8x, the bank's analysts wrote in a Thursday note, adding that they only began tracking the measurement in 1986. A PEG ratio above one typically means a stock is overvalued relative to its long-term earnings growth expectation.

The PEG metric is calculated by dividing a stock's price-earnings ratio by the growth rate of its earnings over a specific period of time. The ratio is often used to determine a stock's value while also factoring in expected profit growth. 

The major index is only 1% away from the bank's year-end target of 3,300.

"The S&P 500 is running on fumes," bank strategist Savita Subramanian wrote. "We have pulled forward some of the gains from later this year, and could see some multiple compression."

Amazon and the index's energy stocks are the main culprits to watch for a pullback in the forward-looking ratio, she added.

The S&P 500 also trades at a price-earnings ratio of 18.4x, its highest level since 2002. The simpler multiple was mostly fueled by the S&P 500's dividend payout ratio, as shareholder payments have grown rapidly over the last decade.

"Payouts aren't likely to get much higher from here, and thus further P/E expansion on cash return is less likely," the team wrote, adding that financial stocks are "one sector with more upside in payout."

The bank used 20 different valuation methods to judge whether the 500-stock index is overvalued. The S&P 500 is undervalued only on the basis of price-to-free-cash-flow, according to BofA.

As for the fourth-quarter earnings season, the health care sector "screens best" based on predictive metrics, the team added.

Now read more markets coverage from Markets Insider and Business Insider:

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Here are the 30 most powerful people in Bank of America's $8 billion bond-trading division, which just had a big shakeup

Thu, 01/16/2020 - 3:04pm

  • Business Insider is mapping out the power structure in the global banking and markets businesses overseen by Bank of America Merrill Lynch COO Tom Montag — one of the most powerful executives on Wall Street. 
  • In the kingdom that Montag rules over, no group looms larger than fixed-income, currencies, and commodities.
  • The group accounted for $8.4 billion in revenue in 2019, more than any other investment-banking business line at the firm. 
  • Our FICC org chart for BAML features more than 30 of the division's highest-ranking sales and trading executives. 
  • Click here for more BI Prime stories.

In the kingdom that Tom Montag rules over as Bank of America's chief operating officer, no group looms larger than fixed-income, currencies, and commodities — home of the firm's vaunted bond-trading group.

At Goldman Sachs, where he spent two decades and ascended to co-head of the firm's global securities division, Montag climbed the ranks on the back of a stellar fixed-income career.

After defecting to Merrill Lynch in 2008, and following the crisis-era merger with Bank of America, he quickly assumed control over the firm's sprawling investment banking and markets operations. And he built a juggernaut credit-trading operation that has routinely competed for the industry's top honors and raked in billions of profits for the firm.  

Business Insider in 2019 mapped out the power structure in the firm's global banking and markets businesses that Montag oversees. We started with FICC, as no division is more crucial to those operations, accounting for more revenue than any other investment-banking business line at the firm.

Even as the overall industry FICC wallet has contracted more than 20% to $64 billion in 2018 from more than $80 billion in 2013, Bank of America has cornered a top-3 position on industry league tables.   

In 2019, it pulled in $8.4 billion globally, second only to JPMorgan Chase and Citigroup, according to company reports. 

The firm's formidable FICC division has strength globally, but its legacy was burnished and its power center is rooted in the Americas, where it ranked second behind JPMorgan last year, according to Coalition's league table.  

Business Insider spoke with insiders, ex-employees, consultants, and other industry experts to gain insight into the reporting structure within Montag's fixed-income division. We've focused on front-office execs that bear the primary responsibility for driving the group's revenue — no operations or back office roles appear in our chart. 

A Bank of America spokeswoman declined to comment for this project. 

Business Insider updated this chart in January 2020 after breaking the news of a large reorg of the fixed-income trading group, including the departure of Frank Kotsen, a 23-year company lifer who ran global credit and special situations trading. We'll continue to update this chart as needed.

We have also mapped out the most powerful people in equities and investment banking

Here are the 30 most powerful people under Tom Montag in Bank of America Merrill Lynch's fixed-income division. 

Have more information about the organizational structure within Bank of America Merrill Lynch? Contact the reporter at or via encrypted chat with Signal or Telegram

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Casper's money-losing mattress business will face a tough IPO path, and some observers think the IPO might even get scrapped

Thu, 01/16/2020 - 3:03pm

  • Online mattress company Casper, which filed for an initial public offering last week, could find it hard to complete its IPO, business experts told Business Insider.
  • Wall Street has soured on unicorns, or startups valued at $1 billion or more, that lose money.
  • Casper is losing money, thanks to high marketing, administrative, and return costs.
  • But the company's valuation could also hinder its IPO; comparable public companies that are actually profitable are valued far less on a price-to-sales basis.
  • "They all want to pitch themselves as tech companies," Synovus' Dan Morgan said. "To me, this isn't a tech company. I hate to tell you, you're just an online marketer that sells mattresses."
  • Click here for more BI Prime stories.

Wall Street may not end up being a friendly place for Casper.

There's a good chance that the company's bid to go public will meet with a chilly reception from public investors, business experts told Business Insider. WeWork's aborted initial public offering and the poor performance of many of the high-profile startups that completed their offerings last year could dampen demand for shares in yet-another money losing and arguably overvalued young company, they said.

"I would refer to Casper's IPO as 'Casper's possible IPO,'" said Robert Hendershott, an associate finance professor at Santa Clara University's Leavey School of Business. "If WeWork is any sign, it's going to be very hard for them to go public."

Casper filed for a public offering last week. Its IPO document revealed that it lost $65 million in the first nine months of last year, or about 20 cents for every dollar of revenue. Huge marketing and administrative costs have weighed on its results.

Wall Street has shied away from money-losing unicorns

So too have product returns. Like many of its competitors, Casper offers a generous return policy; customers can send back mattresses up to 100 days after receiving them. And consumers have taken advantage of that. Refunds, returns, and discounts cost the company $80 million in the first three quarters of last year.

Unfortunately for the company, Wall Street hasn't had much of an appetite lately for money-losing unicorns, or startups with a valuation of $1 billion or more — a level Casper reached with a funding round in February. Uber, Lyft, and Slack shares are all trading well below the prices at which they debuted last year. Pinterest and Peloton are barely above their IPO prices.

"I think that gravity is back," said Rob Siegel, a lecturer in management at Stanford Graduate School of Business, adding that companies both public and private are being forced to focus on their unit economics rather than on growth at all costs. "This is going to be a tough market to go public in."

Investors got burned so much last year by companies that were bleeding cash, that they almost certainly will be less aggressive about investing in such companies this year, Hendershott said.

"I think that we are going to see a lot fewer money-losing IPOs in 2020 than we did in 2019," he said.

Casper's valuation looks pricey compared to its peers

Part of what could hinder Casper's public offering — in addition to its losses — is its valuation. The company hasn't given an estimate of what it expects to be worth in its public offering, but private investors valued it at $1.1 billion last year. That would give it a price-to-sales ratio of about 2.7, based on its trailing-twelve-months revenue.

When compared with some of last year's IPOs, that doesn't seem super-excessive, said Dan Morgan, a senior portfolio manager at Synovus Trust and a longtime tech investor. When Uber debuted last year, it had a price-to-sales ratio of around seven to eight. Lyft's ratio at the time of its IPO was 11. And Slack's was a whopping 50.

But those aren't necessarily the best companies to which to compare Casper. The company after all is basically a mattress manufacturer. As such, its peer group includes Tempur Sealy, Sleep Number, and Purple Innovation. Collectively, those companies are valued at about 0.8 times their sales — or about one third Casper's corresponding valuation. What's more, unlike Casper, all three are profitable.

Purple may be the best company to stack up against Casper. It had similar sales in the first nine months of last year — $304 million for it, compared with $312 million for Casper. But its revenue grew at more than twice Casper's rate in that time period —47% compared with 20%. Unlike Casper, it turned a year-earlier loss into a modest profit of $126,000.

From those numbers, you might think that Purple would be worth a lot more than Casper. But you'd be wrong. Purple's market capitalization stands at $607 million, or about half that of Casper's last private valuation.

"I think it will be interesting to test this billion-dollar valuation point for this particular category," said David Hsu, a professor of management at the University of Pennsylvania's Wharton School. "It's not a great IPO market, obviously."

Casper isn't really a tech company

Another factor that could weigh on Casper is that investor sentiment has completely reversed on startups like it that aspire to be considered as tech companies but really operate in other industries. WeWork was the pre-eminent example of that phenomenon, Hendershott said. 

A year ago, SoftBank valued WeWork at $47 billion, and in its IPO documents, the company tried to play up its technology bona fides. But Wall Street investors saw through the ruse, recognized its as a real-estate company that was bleeding lots of money, and scoffed at the idea of paying a tech-like premium for its shares. The company ultimately pulled its offering, even after reportedly being willing to consider a valuation of as little as $10 billion. When SoftBank bailed out WeWork this fall — weeks before it was expected to run out of cash — it valued it at less than $8 billion.

Casper appears to be following in WeWork's footsteps, at least in terms of trying to present itself as a tech company. Its IPO paperwork mentions the words "technology," "technologies," and "technological" 121 times combined. That's more than even WeWork did.

In the document, Casper touted its "cutting-edge technology," bragged about its "large digital product and technology engineering teams," and talked about how its growth will be driven by "new technologies."

"We believe that technology will increasingly play a role in the continuous optimization of a sleep environment," the company said in the IPO paperwork. 

But the business experts weren't buying it — and they suspect Wall Street won't either.

"They all want to pitch themselves as tech companies," Synovus' Morgan said. "To me, this isn't a tech company. I hate to tell you, you're just an online marketer that sells mattresses."

Got a tip about Casper or another startup? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: WeWork wants investors to think of it as a tech company. These 5 slides illustrate how its numbers tell a different story.

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How to estimate the size of your refund before you even file your taxes

Thu, 01/16/2020 - 2:04pm

Tax season can bring about headaches, but many Americans look forward to the annual consolation prize: a tax refund.

According to IRS data, over 111 million Americans received federal tax refunds for the 2018 tax year, averaging $2,860 per refund. The IRS will begin accepting tax returns for 2019 on January 27. You can file your taxes as soon as you have all the appropriate tax forms from your employer and any other businesses from which you earned income (wages, interest, dividends, etc.) throughout the year.

These forms must be filed and postmarked by businesses on or before January 31, so you should have everything you need to file your tax return by mid-February. If you file electronically and select direct deposit — the method recommended by the IRS — you should have your refund within 21 days.

But you don't have to wait until you file to find out the size of your refund, if you're owed one. As soon as you have your W-2 or 1099 forms from every employer you had in 2019, you can estimate your tax refund (or tax bill, if you underpaid in taxes) with the help of an online tax preparer.

Use a tax refund estimator to find out how much you could get back

H&R Block has a super simple tax refund estimator that takes just a few minutes to complete — you don't have to sign up for an account or pay for anything up front.

You begin by answering a few questions about yourself, including your marital status and age.

Next you can enter the necessary figures from your W-2 and 1099 forms. 

These are the only three numbers you'll need from your W-2:

  • 2019 total wages (box 1 on your W-2)
  • Federal income taxes withheld (box 2 on your W-2)
  • State income tax (box 17 on your W-2) — you can ignore this one if your state doesn't tax income

If you had multiple W-2 jobs in 2019, then you can enter the information for each one separately. If you had 1099 income, you can select "no" in the prompt above and you'll be able to add up all the estimated pretax wages from your various 1099s and include them as one. If you paid quarterly taxes, you can enter that amount a few steps later.

Next, you'll get a rough estimate of your tax refund.

If you want a more accurate figure, you'll have to provide more information about your financial situation, including whether you're a homeowner, have children, earn investment income, or have potentially deductible expenses. 

After you enter all your income sources and expenses, you'll get your refund estimate. It's good to remember that this estimate is only as reliable as the information you provide. If you left out a source of income, or your numbers are just approximations, your refund will likely look different.

A smaller refund doesn't always mean you paid more in taxes

Though many Americans rely on the windfall from a tax refund, financial experts say a larger or smaller refund is not indicative of whether a person paid more or less in taxes, but rather of the amount withheld from their paycheck. Receiving a smaller refund doesn't necessarily mean you had a higher tax bill than previous years. It could even mean you went home with a bigger paycheck throughout the year.

Big tax refunds generally mean you paid too much in taxes — you had too much income tax taken out of each paycheck, and now the IRS is returning what is rightfully yours. Instead of keeping your money in a savings or retirement account where it could earn interest all year, you essentially gave an interest-free loan to the government, Business Insider previously reported.

As Lauren Lyons Cole, a certified financial planner, said, "I always try to either owe slightly or break even when filing my tax return." A tax refund of zero means you optimized your income throughout the year, putting yourself in the best possible position to increase your net worth, she said.

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How to file taxes for 2019

Thu, 01/16/2020 - 2:03pm

The IRS will begin accepting tax returns on January 27.

The deadline to submit your tax return in 2020 — or file an extension with the IRS — is Wednesday, April 15. The earlier you file, the sooner you'll get your refund if you're owed one. 

Here's what to expect when you submit your tax return this year.

You can file your taxes for free if you know where to look

Many online tax services allow you to file your federal taxes for free — and sometimes state taxes as well — if your adjusted gross income was less than $69,000 in 2019. You can check your options using the IRS Free File lookup.

You can also download the IRS2Go app to find free tax-filing assistance, check your refund status, or make a payment.

You can still file for free if you make more than $69,000, but to do so, you'll need to use the Free File Fillable Forms. The IRS recommends using those forms only if you have experience preparing tax returns on your own.

You should receive all of your tax documents by early February

Before you file your taxes, you need to collect all your 2019 tax documents. If you're an employee, that means your W-2; if you're a freelancer, you may have multiple 1099 forms. You should also have your adjusted gross income (AGI) amount from your 2018 tax return handy.

In some cases, you may have other statements for 2019, such as income earned from an interest-bearing savings account or interest paid on a loan, or even taxable bitcoin gains. Brokerages often issue corrected 1099s in mid-March, so if you have any brokerage accounts, it may be prudent to delay filing until the final, corrected brokerage 1099s are issued.

Most tax-related documents must be filed by your employer or other institution by January 31, and the statements must be postmarked by that date as well. That means you should have received everything you need by early February. 

In the meantime, you can estimate your tax refund for this year using an online tax calculator.

The IRS recommends e-filing and choosing direct deposit

The IRS says the fastest way to get your tax refund is the method already used by most taxpayers: filing electronically and selecting direct deposit as the method for receiving your refund. Those who file electronically and opt for direct deposit may receive their refunds the fastest — less than two weeks from the date your return is received by the IRS.

The IRS says direct deposit — which the government also uses for Social Security and Veterans Affairs payments — is "simple, safe, and secure."

Popular online tax services like TurboTax and H&R Block are easy to use, even for tax novices — but they aren't the only option for e-filing your taxes for free. If you plan to visit an accountant, make an appointment early to avoid the rush.

When will I get my tax refund? Usually within 3 weeks of filing

Your tax refund should hit your bank account within three weeks of filing online, assuming you opt to receive it via direct deposit. Often, you'll get your money even faster.

You can check the status of your tax refund using the IRS's return-tracking service 24 hours after filing your tax return online or four weeks after mailing a return.

States that tax income also issue refunds, and you can check the status of your refund on your state's government website.

If you owe taxes, you don't have to pay all at once

Your tax situation can change over time — for example, if you get married, buy a home, or have a child — so it's always a good idea to review your W-4 tax-withholding form at the start of a new year. If you didn't review your withholding this year, changes in your tax situation may result in a larger or smaller tax bill.

Regardless of when you file your tax return, your 2019 tax bill is due April 15. You can file early and schedule a payment for that day (or anytime before) if you aren't quite ready to pay.

But, if you can't afford to pay your tax bill in full, don't pull out your credit card or ignore the situation. The IRS offers reasonable payment plans at much lower interest rates than most banks. You may even be able to settle the bill for less than you owe, called an offer in compromise, or request a deferment until you can make a payment. Offers in compromise and requests for deferment require additional paperwork and must be approved by the IRS.

Keep copies of your old tax returns for at least 3 years

You don't have to save your tax returns forever. The IRS recommends holding onto copies for at least three years — the typical length of time the IRS would look back if you happen to get audited. For those with more complicated tax returns, many accountants recommend holding on to tax returns for six years, due to the substantial omission of income IRS lookback rules. Under this rule, the IRS extends the lookback period to six years when there is a substantial omission of income, defined as 25% or more of the taxpayer's gross income on the return.

Most audits cover returns filed over the past two years, but the IRS can go back further if the situation calls for it. But audits shouldn't be cause for worry for most taxpayers. Fewer than 1% of tax returns are audited by the IRS.

When you dispose of old tax returns, make sure to properly shred the documents to protect against identity theft.

What to do if you've been a victim of tax fraud

Tax season presents plenty of opportunity for would-be identity thieves. A stolen Social Security number can be used to file a fraudulent tax return and refund request, but it's not the only tax scam out there. The IRS keeps track of the most common tax-related crimes, and the list is long and varied.

The best way to protect against tax scams — especially potential identity theft — is to file your tax return as soon as possible.

If you think you are a victim of identity theft or tax fraud, you should report it to the Treasury Inspector General for Tax Administration. The IRS also has detailed instructions on what to do if you are a victim of tax fraud.

The US Department of Justice says the IRS never discusses personal tax issues through unsolicited emails or texts, or over social media. Be wary if you are contacted — by phone or email — by someone claiming to be from the IRS who says you owe money. When the IRS needs to get in touch with a taxpayer, standard practice is to send a letter via the US Postal Service. If you receive an unexpected and suspicious email from the IRS, forward it to

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The Death of Cash

Thu, 01/16/2020 - 2:00pm

Both globally and in the US, the payments ecosystem is evolving.

Two related trends: the slow death of cash and the fast rise of digital payments, are transforming how consumers, businesses, governments, and even criminals move money.

Annual global non-cash transactions are expected to pass the 1 trillion milestone by 2024. This major transformation is being propelled by several factors, including increased usage of digital wallets, more small vendors adapting to accept credit cards, and the explosive growth of mobile commerce.

In The Death of Cash slide deck, Business Insider Intelligence projects what the payments ecosystem will look like through 2024 by examining the driving forces powering digital payment proliferation.

This exclusive report can be yours for FREE today.

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BLOCKCHAIN IN BANKING: An inside look at four banks' early blockchain successes and failures

Thu, 01/16/2020 - 12:55am

Since its emergence at the start of the decade, blockchain has been heralded as one of the most transformative technologies for financial services. Blockchain hype has led financial institutions (FIs) to pour money into the space and into distributed ledger technology more broadly: about $1.7 billion annually as of 2018, per research from Greenwich Associates cited by Bloomberg.

Despite the hype, sentiment around the technology has grown increasingly skeptical as FIs struggle to realize the value of their investments. Incumbents have shuttered some early experiments, and FI execs are beginning to discuss blockchain's prospects in bearish terms.

Key difficulties include scaling the technology for commercial application, ongoing regulatory uncertainty, and the difficulty of bringing together competing participants.

Yet amid the noise, it's becoming more clear where exactly blockchain has value, and some players are beginning to make genuine inroads in their adoption and deployment of the technology. Those who are finding success are both pushing back against souring industry sentiment and setting themselves up as industry leaders.

In The Blockchain in Banking Report, Business Insider Intelligence explores early blockchain successes and failures at four major banks, identifies the lessons these early wins — and losses — have for the rest of the financial services industry, and outlines actionable steps that industry players can take to ensure the success of their own blockchain projects.

The companies mentioned in this report are: Australia and New Zealand Banking Group (ANZ), Bank of America (BofA), Citi Bank, CME Group, Fidelity Investments, HSBC, IBM, JPMorgan, Marco Polo, Mastercard, Nasdaq, PayPal, Ripple, Royal Bank of Canada (RBC), Santander, SWIFT, and Visa.

Here are some of the key takeaways from the report:

  • Blockchain has been one of the most hyped technologies within financial services, heralded for its potential to eliminate pain points across the industry. 
  • Despite this enthusiasm, questions have come up about the technology's efficacy as FIs struggle to actualize blockchain solutions. Among the key challenges holding back blockchain adoption are scalability and performance, trust, and regulatory uncertainty.
  • Yet, for all its difficulties, blockchain's promise to transform financial services processes has meant leading banks are attempting to figure out where the technology does and does not work firsthand, to varying degrees of success.
  • To implement an effective blockchain solution, decision-makers should first determine how much they're willing to commit to the technology and identify a genuine business problem that blockchain can resolve. Only then should they develop a strategy for delivering a blockchain project.

In full, the report:

  • Details the key roadblocks holding backing blockchain adoption within financial services.
  • Identifies the most promising use cases are which industry players are coalescing.
  • Explores four banks' early blockchain project successes — JPMorgan and HSBC — and failures — Citi Bank and BofA — and the lessons they provide.
  • Provides actionable recommendations on how banks can successfully pursue a blockchain project.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store.  >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

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THE PAYMENTS FORECAST BOOK 2019: 22 forecasts of the global payments industry's most impactful trends — and what's driving them

Wed, 01/15/2020 - 10:00pm

As cash usage declines slowly worldwide, the digital payments ecosystem is swelling around the globe: Noncash transactions are poised to exceed 1 trillion for the first time in 2023, driven by increased card penetration, wider access to mobile phones, and more access to payments infrastructure.

In emerging markets, these changes will be driven by Asia, which remains at the helm of digital transformation in payments as customers in major markets like China, India, and Southeast Asia flock to wallets like Alipay and Paytm and super-apps like WeChat and Grab in lieu of cash and cards for their payments, both online and in-store.

Change looks different in mature markets like the US, where the overall expansion of the digital payments market will remain more tempered, but mobile's impact will surge as customers move from PCs to mobile and other emerging connected devices for their online shopping, and replace small-dollar cash P2P transactions with mobile apps like Venmo and Zelle. For providers looking to make inroads in the space, understanding the dynamics of these changes will be key to growth.

In the 2019 edition of the Payments Forecast Book, Business Insider Intelligence will forecast growth in the major sectors of the payments ecosystem worldwide, with a particular look at the US market.

The forecast book, presented as a slide deck, highlights change by region in areas like noncash transactions, e-commerce, card adoption, and terminal penetration, and examines key areas of change, including contactless transactions, fraud, and mobile payments. Within each category, it provides insight into what the market will look like in 2024 and identifies key factors that will accelerate and inhibit growth.

The companies mentioned in this report are: Affirm, Alibaba, Amazon, Clover, Discover, Google, Grab, iZettle, NACHA, Klarna, Mastercard, PayPal, Square, Starbucks, The Clearing House, Venmo, Visa, Verifone, Zelle,

Here are some key takeaways from the report:

  • Globally, noncash transactions will exceed 1 trillion in 2024, driven by growth in APAC, which will comprise 40% of transactions by 2024.
  • Card adoption will grow rapidly in markets like Latin America and the Middle East to 2024, but stagnate in sub-Saharan Africa, where customers largely transact through nonbank methods.
  • US retail spending will grow modestly, but e-commerce will nearly double its share of total retail sales by 2024 as customers do more everyday shopping online.
  • Card payments will tick up as US customers continue to abandon cash, but mobile will remain the brightest growth driver, coming to comprise 44% of the $1.9 trillion in e-commerce and 68% of the $760 billion in P2P payments in 2024.

In full, the report:

  • Identifies big-picture trends moving the needle in the payments ecosystem both globally and in the US.
  • Forecasts growth in key sectors, including noncash transactions, card and terminal penetration, fraud, e-commerce, and mobile payments, through 2024.
  • Discusses what the global payments market will look like in 2024, and how that differs from the present.
  • Highlights key growth engines and inhibitors that will drive change between now and 2024.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >>Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of digital payments.

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The US and China's tech cold war is far from over, even with Trump's trade deal. Here's why tech companies will remain on the front lines of the trans-Pacific rivalry.

Wed, 01/15/2020 - 8:45pm

  • The US and China took the first steps toward halting a near-two-year-long trade war raging between the two countries, as President Trump signed an interim trade deal with China on Wednesday
  • But although the first phase of the deal addressed intellectual property issues that American tech companies have complained about for years, the broader issues surrounding tech supremacy - which have fueled tensions between the two countries - remain largely unaddressed, according to some experts. 
  • Issues like China's emerging dominance in AI and concerns over its human rights record - that was used as justification for some sanctions - were left unaddressed, one expert said. 
  • We should also expect to see the US push for stricter controls on tech trade with Huawei and China in the future, another expert said. 
  • In the meantime, expect to see the two nation's tech industries to continue decoupling, they said. 
  • Visit Business Insider's homepage for more stories.

President Trump's interim trade deal with China — announced on Wednesday with great fanfare — raised the prospect of a return to normalcy for technology companies rattled by an 18-month trade war.

But while the pact eases some immediate hostilities, particularly in industries like agriculture and financials, it does little to resolve the underlying tensions around technology that have pitted the two countries against each other, according to some experts Business Insider spoke to.

American tech companies have long complained over the lack of intellectual property rights protections in China. But as technologies like AI and wireless communications have become increasingly vital to everything from national security to economic growth, the rivalry between the US and China has erupted into a full-fledged tech cold war.

Graham Webster, who leads a joint initiative between Stanford university and the think tank New America, focused on China's digital policy, said that Wednesday's deal brought good news regarding intellectual property protection. The pact commits China to crack down on the theft of American technology and corporate secrets by Chinese firms and state-owned organizations.

But this was a small concession for China, and in its own self-interest, Webster said. "The Chinese government was already on a trajectory of becoming more rule-based, and [implementing intellectual property rights] has become a matter of self-interest for the Chinese economy as its companies have become more advanced," he said. 

All the missing pieces

More importantly, the deal did not touch on the biggest issues fueling the tech cold war. "Phase 1 just didn't get to most of the tech issues on the future of supply chain security and the ethical use of advanced security," Webster said. 

Adam Segal, a cybersecurity expert in the Council of Foreign relations, said that little change was coming to the tensions that have fueled the tech cold war.

"The trade deal doesn't have much of an impact on tensions over AI or Huawei and the race to 5G," Segal said. "There are still part of the White House that want to slow China's tech development down and hobble Huawei, and we will continue to see US push for stricter controls on tech trade with Huawei and China more generally." 

Webster agreed with this assessment, and said that the Chinese government's need to develop independent technology is only going to increase. "None of this is going away," he said. 

Here's a look at the major battle lines in the China-US tech cold war that are still unresolved: 

Huawei and the 5G battle

Last May, the US added China's Huawei to a so-called entity list, in an effort to block American companies from selling components to it. Huawei is the second-biggest smartphone maker in the world and is dominant in mobile network equipment, so the implications of the blacklist were huge. 

Huawei was accused of theft, wire fraud, and threatening to American national security, due to its close links with the Chinese government. 

And as American companies like Google cut ties with the world's second-largest phone maker — blocking its access to Android, for instance — some wondered whether the US had dealt Huawei a fatal blow. 

More recently, the US has been pressuring its allies, like the UK, to toe the same line and freeze Huawei out of its 5G infrastructure projects. 


The race to dominate artificial intelligence

The US continued to hit Chinese tech companies later into 2019, adding 28 more Chinese companies to its 'entity list' in October. Among these 28 were eight major tech companies, including three AI startups valued at over $1 billion (One of the companies, SenseTime was at one time the world's most valuable AI startup at over $4.5 billion, per TechCrunch). 

The Department of Commerce said the companies named were implicated in human rights violations, as their surveillance operations had aided in the oppression of Uighur Muslims and other minorities in China. 

But the ban was also linked to a race to dominate the field of artificial intelligence. China accounted for 17 out of the top 20 academic institutions involved in patenting AI, Reuters reported last January. The next month, President Trump had issued an executive order to call on the US to prioritize advancements in artificial intelligence, Axios reported



China refused to pledge that it would not hack American companies, arguing that the issue was not trade related.

Chinese officials declined to pledge to refrain from hacking US companies and stealing intellectual property, arguing that it wasn't a trade issue, the New York Times reported

The issue of hacking and corporate cyber espionage has been a long-running point of friction between the two countries. In 2018, the Trump administration accused the Chinese government of breaking a promise struck with the Obama administration to stop hacking US businesses.

And China's push to be less dependent on the US technology, potentially disrupting supply chains, seems more likely than ever.

China's central government told its departments and public institutions to replace existing computers and software with domestic versions, the Financial Times reported December.

Webster says that this is a natural outcome of China's push to become more independent. 

"This is national strategic logic to avoid more dependence on sometimes unfriendly countries," Webster explained. "What happened with the trade war, especially with the tariffs that threatened to disrupt trade, has only strengthened the Chinese government's instinct to become more independent." 

A director at the China Computer Federation had similar reasoning, telling the Financial Times that "three years ago, there may have been more people thinking that we could rely on some US technologies ... Now if someone is still saying that, I suppose they have just been sleeping for the past three years." 

REGTECH REVISITED: How the regtech landscape is evolving to address FIs' ever growing compliance needs

Wed, 01/15/2020 - 8:02pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Regtech solutions seemed to offer the solution to financial institutions' (FIs) compliance woes when they first came to prominence around 24 months ago, gaining support from regulators and investors alike. 

However, many of the companies offering these solutions haven't scaled as might have been expected from the initial hype, and have failed to follow the trajectory of firms in other segments of fintech.

This unexpected inertia in the regtech industry is likely to resolve over the next 12-18 months as other factors come into play that shift FIs' approach to regtech solutions, and as the companies offering them evolve. External factors driving this change include regulatory support of regtech solutions, and consultancies offering more help to FIs wanting to sift through solutions. Startups offering regtech solutions will also play a part by partnering with each other, forming industry organizations, and taking advantage of new opportunities.

This report from Business Insider Intelligence, Business Insider's premium research service, provides a brief overview of the current global financial regulatory compliance landscape, and the regtech industry's position within it. It then details the major drivers that will shift the dial on FIs' adoption of regtech over the next 12-18 months, as well as those that will propel startups offering regtech solutions to new heights. Finally, it outlines what impact these drivers will have, and gives insight into what the global regtech industry will look like by 2020.

Here are some of the key takeaways:

  • Regulatory compliance is still a significant issue faced by global FIs. In 2018 alone, EU regulations MiFID II and PSD2 have come into effect, bringing with them huge handbooks and gigantic reporting requirements. 
  • Regtech startups boast solutions that can ease FIs' compliance burden — but they are struggling to scale. 
  • Some changes expected to drive greater adoption of these solutions in the next 12 to 18 months are: the ongoing evolution of startups' business models, increasing numbers of partnerships, regulators' promotion of regtech, changing attitudes to the segment among FIs, and consultancies helping to facilitate adoption.
  • FIs will actively be using solutions from regtech startups by 2020, and startups will be collaborating in an organized fashion with each other and with FIs. Global regulators will have adopted regtech themselves, while continuing to act as advocates for the industry.

In full, the report:

  • Reviews the major changes expected to hit the regtech segment in the next 12 to 18 months.
  • Examines the drivers behind these changes, and how the proliferation of regtech will improve compliance for FIs.
  • Provides our view on what the future of the regtech industry looks like through 2020. Get The Regtech Revisited Report


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The 15 best states to retire for a low cost of living in your golden years

Wed, 01/15/2020 - 5:53pm

Choosing a state for retirement can be a big challenge. 

Financial management firm Blacktower gathered data on property prices, population demographics, and more to put together a list of US states where retirees will get the most from their retirement savings. Blacktower also looked at the cost of living index created by the Missouri Economic Research and Information Center, which includes costs of housing, groceries, utilities, transportation, and healthcare in relation to the median cost, calculated as 100. The lower the index number, the lower the cost of living. 

Here are the 15 most affordable states for retirees, including their cost of living index along with the average home price and the percentage of senior population from the Census Bureau

15. West Virginia

West Virginia has the lowest average property prices in the US according to this data, with the average home priced at $146,596. 

Cost of living index: 92.1

Percent of population aged 60 and older: 25.5%

Average property price: $146,596

14. Iowa

Iowa's low costs of living aren't the only thing that appeal to seniors. Low home prices and a quarter of the population over age 60 also make this state ideal. 

Cost of living index: 92.1

Percent of population aged 60 and older: 25.5%

Average property price: $173,561

13. Kentucky

Kentucky has slightly lower average property prices than Iowa, and other costs are slightly lower in the Bluegrass state as well. 

Cost of living index: 91.7

Percent of population aged 60 and older: 21.4%

Average property price: $168,902


12. Texas

Popular with retirees, Texas is also affordable. However, average property prices are higher here than many other places on this list. 

Cost of living index: 91.5

Percent of population aged 60 and older: 16.8%

Average property price: $211,441

11. New Mexico

New Mexico is ideal for retirees thanks to its relatively warm climate and affordable costs of living.

Cost of living index: 91.4

Percent of population aged 60 and older: 22.1%

Average property price: $213,491

10. Georgia

Georgia's relatively low cost of living and overall affordability makes it a pretty good place to retire, though the average home is more expensive than many of the other states on this list. 

Cost of living index: 91.4

Percent of population aged 60 and older: 22.1%

Average property price: $213,491

9. Indiana

Indiana can help your retirement dollars go further. With low average prices, buying a home is within reach in this state. 

Cost of living index: 90.5

Percent of population aged 60 and older: 20.7%

Average property price: $167,504

8. Kansas

With affordable living and homes, Kansas has lots of opportunities to make your retirement money last. 

Cost of living index: 89.6

Percent of population aged 60 and older: 20.7%

Average property price: $177,194

7. Michigan

Michigan is fairly affordable for anyone retiring soon. With a cost of living index below 90, fairly affordable home prices, and no shortage of summer activities, this state is ideal for retirement.

Cost of living index: 89.5

Percent of population aged 60 and older: 20.7%

Average property price: $178,219


6. Alabama

Alabama's affordable living costs and relatively cheap homes make it a more budget-friendly alternative to more-expensive Florida.

Cost of living index: 89.2

Percent of population aged 60 and older: 22%

Average property price: $175,256

5. Tennessee

Tennessee's affordability and natural beauty makes this state perfect for retirees who want mountains nearby, without the higher costs of living in western states like Colorado or Washington.

Cost of living index: 88.9

Percent of population aged 60 and older: 21.5%

Average property price: $203,449

4. Missouri

Missouri offers fairly affordable living, and a variety of environments from rural to urban. 

Cost of living index: 88.3

Percent of population aged 60 and older: 22%

Average property price: $187,682

3. Arkansas

Arkansas's costs of living are pretty low, and an index well below 90 helps this state take one of the top three spots. 

Cost of living index: 87.7

Percent of population aged 60 and older: 22%

Average property price: $157,514

2. Oklahoma

Oklahoma is the second-most affordable state for retirement according to this data, from home prices to overall costs of living.

Cost of living index: 87.2

Percent of population aged 60 and older: 20.5%

Average property price: $165,943

1. Mississippi

Mississippi takes the top spot for affordability, with the average home price under $150,000 and low costs of living all around. Retirees will see their money go much further here than it would in other states.

Cost of living index: 86.7

Percent of population aged 60 and older: 20.6%

Average property price: $147,408

How Tim Cook's Apple just became the accidental test case in a clash about capitalism

Wed, 01/15/2020 - 3:32pm

Hello readers, and welcome to this week's edition of Trending, the newsletter where we highlight BI Prime's biggest tech stories. I'm Alexei Oreskovic, Business Insider's West Coast bureau chief and global tech editor.

Before we dive in, a quick reminder that you can subscribe to Trending by clicking here. And if you neglected to give your boss a gift this holiday season, you can redeem yourself in her (or his) eyes by turning them on to this newsletter.

This week: Apple is the first test case in a clash of philosophies about capitalism

The showdown between Tim Cook and the FBI has been framed as a fight between privacy and security. But it's also a battle between two competing philosophies about capitalism.

That became clear after Donald Trump lashed out at Apple on Tuesday, demanding that Apple "step up to the plate" to help unlock the iPhones used by the Pensacola, Florida shooter and reminding Cook that Apple had been spared some of the most painful tariffs. In other words, do what we ask of you, or your business will suffer. 

In that sense, what's developing may be the first real test case of the universal stakeholder approach that is increasingly being talked up by companies (and is part of Elizabeth Warren's platform as well as that of other Democratic presidential candidates). Recall that Cook was among the 200 corporate chieftains who signed a commitment in August declaring that a corporation's purpose is not simply to maximize profits for the benefit of stockholders. Companies also have a responsibility to serve stakeholders that include employees, customers and society. 

Given that Cook has declared that privacy is a "fundamental human right," this would seem to be an occasion where its commitment to a key stakeholder (society) is being challenged. But if Apple digs in and fights, the pain Trump can inflict — whether through tariffs in the still unresolved China trade war, despite today's Phase One signing, or in some other form — will undoubtedly hurt the company's bottom line, and by consequence, its stockholders.

So who does Cook choose to fight for?

It's not an unpredictable predicament for a company that takes an oath to serve different stakeholders, each with different interests. But I doubt Apple is thrilled to be taking the lead in settling this emerging debate. The last time Apple was under pressure to unlock a mass shooter's iPhone, in 2016, the standoff was resolved by a third-party company whose tech got the job done. Tim Cook may not get so lucky this time and his, and the Apple board's conduct, will say a lot about how serious these pledges of corporate responsibility really are.

Time to monetize some Zs

If the future of capitalism is too weighty a topic for you this early in the year, perhaps you'd prefer the comfort of a cozy business like mattresses. Lucky for you, Casper filed its paperwork to go public last week, and hinted at a variety of future products for its slumbering customers.

But as Troy Wolverton writes, all is not well in the sleep economy. It turns out that selling mattresses online has one big drawback: Customers don't know if they like the feel of the mattress until it arrives at their doorstep. And for something as personal as a mattress (as Casper helpfully points out in its S-1, people spend more time sleeping than any other single activity in their lives), an uncomfortable product is a deal breaker. 

The situation is so serious that as of September Casper had a special reserve "cushion" of $11.6 million on hand for customer returns. For a company that only had $54.6 million of cash on its balance sheet at that point, that's not a trivial sum. 

That's not to say Casper's business is in trouble. A lot of people, particularly millennials (and my parents), are big fans of the company's buzzy bedding. As we get closer to the IPO, we'll be digging deeper into Casper's efforts to monetize your Zs. In the meantime, enjoy this amazing chart from Casper's IPO prospectus:


Read the full story here: Casper, the buzzy mattress seller adored by millennials, has a costly returns problem that could be a nightmare for its IPO It's a no code world after all...

In case you needed any more evidence of the popularity of low-code/no-code tools, Google's acquisition of AppSheet this week should make  it clear that this is one of the hottest areas in tech right now. 

Appsheet is among the new class of tools that allow companies to create apps without having to keep an engineering department on the payroll. We highlighted another standout in this field last year when we included the founders of Airtable among BI's 100 People Transforming Business.

As Paayal Zaveri writes, the trend to no-code/low-code is being driven by an increasingly automated world and a shortage of developers. Some industry estimates predict the market will be worth $52 billion by 2024.

Microsoft is well positioned for this landscape, thanks to its little known Power Platform product line, Paayal writes. So too are public companies like SmartSheet, and a slew of specialized startups which may find themselves fielding a lot inbound acquisition interest this year. 

Read the full story here: A shortage of developers is going to lead to a boom in tools that help make simple apps without coding, and Microsoft stands to benefit, analyst says Here are some other tech highlights:

What experts expect from Oracle in 2020: Leadership changes in the Safra Catz era and tougher challenges in the cloud

Here are all the companies Airbnb has acquired to help it grow into a $31 billion business

YouTube's big changes to ads on children's content is hitting creator revenue by as much as 50%, says a CEO who helps manage 4,300 channels

The COO of GitHub explains why it has no plans to ever move completely to Microsoft's cloud, over a year after the $7.5 billion acquisition

Amazon is testing a new shopping feature that shows customer reviews from other countries — but it ignores the big problem with user reviews

And more big stories from across the BI newsroom:

Jeffrey Epstein set Elon Musk's brother up with a girlfriend in effort to get close to the Tesla founder, sources say

These are the top 21 clean-tech startups to watch that are set to transform the energy industry

KPMG's new $450 million training center gives 800 employees access to free food from 8 different kitchens, a wine bar, and over 44 miles of bike paths. Here's an exclusive look inside.

We asked 9 of the most prominent VC investors in European tech to pick out fintech startups they think will blow up in 2020. Here are the 15 they chose.

Thanks for reading, and remember, if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

— Alexei

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NOW WATCH: Apple just revealed its AirPods Pro for $249, which feature noise cancellation. Here's everything that was wrong with the $159 pair of the wireless headphones.

Shopping on Instagram is going to be huge — but it's barely gotten started yet (FB)

Wed, 01/15/2020 - 3:02pm

  • Shopping on Instagram is going to be huge, but it has barely gotten started.
  • Just 12% of users use the Facebook-owned photo-sharing app for shopping for and finding products, according to new research from Cowen.
  • By 2021, Instagram is predicted to generate $10 billion a year in new revenue from shopping.
  • Click here for more BI Prime stories.

Shopping on Instagram promises to be the next big moneymaking hit for the Facebook-owned photo-sharing app — but it still has a long way to go.

New research from the financial-services firm Cowen showed just 12% of Instagram users use the app for shopping purposes — far behind better-established rivals in the space like Pinterest, with 45%.

The data illustrates the opportunity — and challenge — ahead of Facebook as it attempts to diversify away from its core advertising business and muscle in on the e-commerce space. 

Instagram has been adding a bevvy of new features dedicated to helping users shop, including tags that highlight product costs and link out to websites to buy the items, as well as an integrated checkout feature that allows users to buy goods without ever leaving the app. It has also become home to a new generation of direct-to-consumer brands that are sidestepping intermediary retailers and marketing directly to consumers via its traditional advertising tools. 

Despite this push, only a little more than one in 10 Instagram users surveyed by Cowen said that they used the platform for shopping for and finding products, with the overwhelming majority — unsurprisingly — highlighting the app's photo-sharing functionality. (Cowen surveyed 2,500 US consumers for its 2019 fourth-quarter survey.)

Nearly half (45%) of Pinterest users, meanwhile, highlighted that social network's potential for shopping for and finding products — demonstrating that large numbers of users can become interested in shopping via social platforms, an encouraging sign for Instagram.

Analysts are, by and large, extremely bullish on Facebook's e-commerce prospects. Deutsche Bank estimates that by 2021, shopping on Instagram could generate $10 billion a year in new revenue for the company. A survey it conducted in 2019 showed that "43% of survey respondents said they were either 'very likely' (18%) or 'somewhat likely' (25%) to purchase products on Instagram using the new checkout feature" — indicating a high level of general interest from users in shopping on Instagram.

Got a tip? Contact this reporter via encrypted messaging app Signal at (+1) 650-636-6268 using a nonwork device, email at, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.)

Read more:

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NOW WATCH: People are still debating the pink or grey sneaker, 2 years after it went viral. Here's the real color explained.

Beyond Meat tumbles the most since October after 'priced in' potential drives an analyst downgrade

Wed, 01/15/2020 - 2:50pm

  • Beyond Meat slumped as much as 9.4% in Wednesday trading after an analyst downgraded the stock, citing fading growth potential in the US.
  • The tumble is Beyond Meat's worst since October 29.
  • Bernstein analyst Alexia Howard downgraded the stock to "market-perform" from "outperform" while maintaining a $106-per-share price target.
  • The company could improve its growth prospects by expanding its partnership with McDonald's or pushing into international markets, Howard wrote in the Wednesday note.
  • Watch Beyond Meat trade live here.

Beyond Meat tanked as much as 9.4% Wednesday after an analyst downgraded the stock on concerns of fading growth opportunity in the US.

The plant-based-meat company's sales growth potential could be "largely priced in at this point," Bernstein analyst Alexia Howard wrote in a Wednesday note. The research firm cited a "less attractive" risk-return situation for the stock following an early January rally, and noted its "blue-sky scenario" includes an expanded US partnership with McDonald's.

The firm downgraded Beyond Meat to "market-perform" from "outperform" Wednesday. Bernstein maintained its target price of $106 per share, implying a 9% downside from Tuesday's closing price of $117.05.

The Wednesday stumble marks the worst decline in Beyond Meat stock since October 29, when it fell more than 20%. The stock initially soared following its May initial public offering, but the expiration of its post-IPO lockup and concern around competition from Impossible Foods pulled shares lower through the second half of 2019.

The company could also woo investors by expanding its footprint outside the US, Howard wrote. Growth abroad would significantly boost the company's available customer base and take attention away from looming competition in the US.

"We believe that BYND has significant growth potential in Europe, which could more than double its [total addressable market]," the analyst wrote, adding a move to China could "take advantage of the protein supply shortage led by the African Swine Fever."

Beyond Meat is just days off its best week since July, soaring 27% from January 6 to January 10. The stock soared following a January 7 Reuters report that Impossible Foods was ditching attempts to land a deal with McDonald's. Impossible Foods later disputed the report.

Beyond Meat jumped even higher on January 8 after McDonald's said it would expand tests of its PLT burger in Canada. The item stands for "plant, lettuce, and tomato" and uses a Beyond Meat patty.

Beyond Meat traded at $108.82 per share as of 2:25 p.m. ET Wednesday, up roughly 47% year-to-date.

The company has three "buy" ratings, 10 "hold" ratings, and four "sell" ratings from analysts, with a consensus price target of $100.45, according to Bloomberg data.

Now read more markets coverage from Markets Insider and Business Insider:

Bitcoin is on its best start-of-year streak since 2012

Treasury Secretary Mnuchin says a 'phase 2' US-China trade deal will reverse more tariffs

Amazon is launching a new marketplace in the Netherlands after seeing mixed results in its international business

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NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption

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