Posts tagged with "NerdWallet"

Apple, Goldman Sachs market virtual Apple Cards to consumers

August 7, 2019

Apple and Goldman Sachs Group rolled out a virtual credit card on August 6, in a deal designed to enable the iPhone maker to diversify from device sales and to build out the Wall Street bank’s new consumer business.

Apple intends to market the card to iPhone owners, Reuters reports—offering 2% cash back on purchases via the Apple Pay service, no fees, and an app to manage related finances.

On the Goldman Sachs side, the new card is intended to help build the new Marcus by Goldman Sachs consumer brand; which the bank started in 2015 to even out volatile results from businesses, such as trading and investment banking.

On Tuesday, Apple shares were up about 1 percent at $195.30 in trading before the bell. According to the Reuters report, the company said a limited number of the people who had expressed interest in the Apple Card would start receiving sign-up invitations immediately.

“The Apple Card doesn’t play in the same league as premium rewards credit cards like the Chase Sapphire Reserve or AmEx Platinum,” said Sara Rathner, an expert on credit cards at NerdWallet.

She noted, “Those cards charge ultra-high fees, but in return you get some pretty sweet perks: massive sign-up bonuses, annual statement credits, free Global Entry, and a higher point-earning rate for travel expenses.”

Apple will offer an option for a physical card made of titanium, but with no visible number. Instead, the card’s number is stored on a secure chip inside the iPhone, which will generate virtual numbers for online or over-the-phone purchases that require a number.

Apple said purchase information would be stored on the user’s iPhone and that it cannot see the data. Goldman will not be allowed to use data for marketing purposes, even for selling its other products.

Gene Munster, managing partner with Loup Ventures and a longtime Apple watcher, said the card’s adoption is likely to be low in the first year, but it could generate about $1.4 billion of high-margin revenue by 2023.

That would add about 1.8% to Apple’s overall earnings and complement the much larger Apple Pay business for total payments revenue of $5.38 billion by 2023. Apple has roughly 50 million U.S. Apple Pay users now.

But at Apple’s size—$265.6 billion in sales for fiscal 2018—the revenue matters less than the effect on keeping Apple customers tied to its brand, Ben Bajarin, an analyst at Creative Strategies said for the Reuters story.

“If it works, it’s one more thing that causes you to stay deeply loyal and entrenched in the Apple ecosystem, even if something better comes along,” he said.

Research contact:  @Reuters

Supporting adult kids could cost parents $227K in IRA savings

January 4, 2018

A majority of parents are paying for at least some of their adult children’s expenses— and it could be costing them up to $227,000 in retirement savings, according to survey results released in December by financial services website, NerdWallet.

The survey, which was conducted online on behalf of NerdWallet by Harris Poll, asked more than 2,000 U.S. adults—656 of whom are parents of children age 18 and older—about their spending and saving habits. The pollsters found that 80% of parents of adult children are covering, or have covered, at least a portion of their adult children’s expenses after they turned 18.

Based on the responses, NerdWallet calculated the average of these costs, as well as the potential impact on parents’ retirement savings if they paid their adult children’s bills for one, three or five years. The savings calculation assumes that, had the parents not been so generous, the funds would have been put into a retirement savings account, such as a 401(k) or IRA, instead.

Conversely, the researchers determined, the 28% of parents who are paying college costs could miss out on almost $80,000 in retirement savings:. The average parents take out $21,000 in loans for their child’s college education, but the hit to retirement savings is almost quadruple that amount.

In addition, there is the annual cost of living:  Most adult children are living with their parents for more than a year after they turn 18: Almost 60% of parents with kids 18 and older have had adult children living with them for more than a year; about 23% have had adult children living with them for more than five years.

Such cost include groceries (56%), health insurance (40%)—and often, rent or housing outside the family home (21%). Some parents also are covering or have covered their adult child’s cell phone bill (39%) and car insurance costs (34%).

On average, a parent covering a child’s living expenses for five years and borrowing money for college tuition is missing out on $227,000 — almost a quarter of a million dollars — in retirement savings. A steeper cost of living or supporting multiple adult children could drive that number even higher.

In addition to these living costs, some parents are paying or have paid for other expenses, such as clothing (32%), entertainment (20%), an allowance (10%) or a car loan (10%). That’s even more down the drain: Suppose a parent gives an adult child an allowance of $200 a month for five years. That $12,000, invested in a retirement account earning 6% interest, would grow to almost $40,000 by the time the parent retires.

If you aren’t sure whether you’re saving enough, you can get help figuring out how much to save for retirement.

Andrea Coombes, NerdWallet’s investing expert, weighs in: “As parents, we tend to want to do everything we can to help our children succeed. But sometimes we focus on the present at the expense of the future.” Rather than taking money from your own savings and putting your retirement security at risk, Coombes suggests looking for ways to help your children that are good for your finances and theirs.

For example, she says, keeping your kids on the family insurance plan as long as possible might help your child save on health care costs. But ask your children to reimburse you for at least some of those costs, and maybe ramp up the amount they contribute over time. “That’ll help get them ready to pay their own bills down the road, even as it keeps you on track to save for retirement — which is when you’re really going to need that money,” Coombes says.

Research contact: support@nerdwallet.com

Anonymous survey finds Netflix pays more than other tech companies

December 5, 2017

Recently, Blind—the anonymous chat app that is being used surreptitiously by thousands of employees nationwide—asked followers who work at tech companies a sensitive question, Business Insider reports: Do you think you are paid fairly?

The answers, from over 4,000 respondents, were somewhat unexpected. For example, the tech workers who are happiest with their compensation are not employed at tech giants Google or Facebook; they are at Netflix, followed by Dropbox, NerdWallet, Twitch and Snapchat.

Conversely, based on the survey findings, the employees who are least happy with their earnings work at Walmart Labs. And 40% or more of employees polled at PayPal, Spotify and Twitter said they weren’t happy with their remuneration, either. In fact, 49% of all respondents were not satisfied with their salaries; leaving 51% who were.

As  to which companies had the most employees in this poll who were dreaming of leaving for the day and not returning? Groupon, HPE and Oracle each came in at around 90%.

Among the ten hottest tech companies today, Microsoft has the least loyal employees in this survey—with about 75% of its staff who responded that they are looking to leave.

Amazon also scored at the top of corporations that were not good at retaining staff, with about 60% of the company’s respondents on their way out the door.

Finally, it is little surprise that the most steadfast employees worked at Netflix, where respondents said they were happiest with their pay.

Research contact: blindapp@teamblind.com