Axos Invest Brokerage: $150 Bonus with $1,000 Deposit

Posted on June 16, 2022 // 7 Comments

Axos is another financial app that combines banking, investing, and borrowing services. Right now, they are offering a $150 bonus when you open a new Axos Invest brokerage account, fund it with $1,000, and keep it there for 90 days. You can choose Self-Directed Trading or their Managed Portfolio (robo-advisor) option, but the Self-Directed option has no advisory fees and offers $0 stock and ETF trades. Options cost $1 per contract.

Transfer fee reimbursement. If you move $50,000+ of assets over, they will reimburse transfer fees up to $300.

Relatively straightforward promo with a solid return on cash locked up. Keep in mind that if you buy something and want to transfer it out later, you may have to pay an $75 outgoing transfer fee (see their fee schedule). If I want to avoid that, I usually either stay in cash, plan an exit to another broker that will reimburse that fee, or buy something that I plan on selling and just withdrawing cash without fees.

* Valid for one new Axos Invest accounts per person, and only open to U.S. residents. Current and former Axos Invest account holders who closed accounts within the past 90 days are not eligible. This offer is non-transferrable. Other restrictions may apply. This offer is not valid anywhere Axos Invest is not authorized to offer services. An Axos Invest Managed Portfolio or Self-Directed Trading application must be submitted before 11:59 p.m. PT on 6/30/2022 to qualify. You must open each new account and have qualifying direct deposit(s) that total at least $1,000.00 within 45 days during the first three (3) calendar months your account is open, including the month in which your account was opened. Direct deposit funds must be new to bank from a third-party source (not originated from another Axos Bank brand account) to receive bonus credit. All eligible awards will be delivered to your account or email address within 30 days following the 90-day waiting period. Terms and conditions subject to change without notice. New account holders are limited to opening one taxable Managed Portfolio or one taxable Self-Directed Trading account. The eligible award will be delivered into the first account opened. Subsequent market fluctuations and/or trading losses do not impact qualification.

Filed Under: Deals & Offers, Investing //

Amazon Prime: Complete 4 Stampcard Activities, Get $10 Amazon Credit

Posted on June 16, 2022 // 4 Comments

Amazon Prime Days are approaching on July 12/13, and they have a new Stampcard promotion for Prime members: Complete 4 activities and get a $10 Amazon credit. (Link may not show in e-mail or RSS, please visit website.) The activities aren’t too hard:

  • Make a Prime-eligible purchase: Use your Prime shipping benefit to purchase a Prime-eligible item of at least $5 to collect this stamp
  • Stream a show on Prime Video: Choose any video and stream to collect this stamp. It may take up to 48 hours for this stamp to appear. The newest Bond movie No Time to Die was just made available.
  • Listen to a song with Prime Music: Listen to any song included with Prime to collect this stamp
  • Borrow an eBook on Prime Reading: Choose from a selection of Prime reading or Kindle Unlimited titles and read to collect this stamp. The excellent book on behavioral psychology Thinking Fast and Slow by Daniel Kahneman is currently included.

Collect all 4 stamps by 23:59 ET on July 13, 2022 to receive your $10 reward. Your Amazon credit will appear in your account within 24 hours of completing your Prime stampcard.

Go back to your Stampcard page to view your stamp collecting progress:

Filed Under: Deals & Offers //

Webull Broker: New Account 6 Free Stocks, $600 Account Transfer Promotion

Posted on June 10, 2022 // Leave a Comment

Updated 6 free stocks for new account, $600 transfer promos. Webull is a brokerage app (PC and web version also available) that has $0 stock trades, $0 options trades with $0 per contract fees, free real-time quotes, and no minimum balance requirement. (Fidelity, Schwab, E-Trade, and TD Ameritrade all still charge $0.65 per contract.)

Compared to Robinhood, Webull is more of a full-featured traditional brokerage shrunk down into an app. Robinhood has a sleeker minimalist feel, while Webull has a ton of options for real-time stock quotes, technical indicators, charting, etc.

New account bonus details. Right now, WeBull is offering new accounts up to 6 free shares of stock:

  • Open an account with Webull and get 2 free stocks valued between $3 and up to $300 each.
  • Link your bank and deposit any amount to receive 4 additional free stocks valued between $7 and up to $3,000 each.

Here is my Webull 6 free stocks referral link. Let’s be upfront and realistic here. The theoretical max total might be $12,600 but this is essentially a scratch-off lottery ticket where most people will get the minimum payout in the $34 range, but you also have a small shot at various larger prizes. The referrer gets some free shares as well, and I have received shares of TEVA, SNAP, SBUX, VG, and even one AAPL (pre-split, now worth $568) so some folks do get lucky. Thanks if you use it! After you get the new user bonus, you can refer other people as well.

Here are the full odds for the initial deposit bonus:

$7 to $30 value, odds are ~1:1.02
$31 to $100 value, odds are ~1:52.63
$101 to $1,000 value, odds are ~1:1111.11
$1,000 to $1,600 value, odds are ~1:10,000

Once you receive the stock and it settles, you can just sell it if you don’t want to keep it. Webull is a legit SIPC-insured broker, and the required information is the same as other brokers (name, address, SSN, work questions, investing experience questions, etc). 1

The nice thing about this bonus is that it doesn’t tie up any cash. You could open and fund with $1 and get your free scratch-offs.

Account transfer bonus details (both new and existing customers). WeBull is also running an account transfer promo, where if you transfer assets from another brokerage firm over to WeBull, they will offer the following bonus structure:

  • Transfer fee reimbursement up to $75 with ALL transfers of $2,000+ in new assets
  • $80 of fractional AAPL shares with $5,000 to $24,999 in new assets
  • $200 of fractional AAPL shares with $25,000 to $249,999 in new assets
  • $600 of fractional AAPL shares with $250,000+ in new assets

Fine print on “Net Incoming Account Value”:

Net Incoming Account Value = Only transfers added to your account between 6/1/2022 12:00AM ET – 6/30/2022 11:59PM ET will be considered as your net incoming account value. If you were to withdraw or transfer out any amount between 6/1/2022 12:00AM ET –8/29/2022 11:59PM ET, it will be deducted from your total net incoming account value. The net incoming account value you have in your account on 8/30/2022 12:00AM ET will determine which tier’s reward you will receive.

This promotion is open to new and existing customers (grab the new account bonus above first, then activate this promo). However, note that if you have already transferred an account over to WeBull in the past, you are not eligible to participate in this promotion.

In comparison with historical brokerage transfer promos, these are pretty good numbers for the respective asset sizes. (Again, just sell the Apple shares if you don’t want to keep them.) I have done multiple transfer promos and as long as your broker has your cost basis correctly stored (download a copy for yourself beforehand just in case) and you don’t hold certain mutual funds (if so, just do a partial transfer instead), the transfers have all gone smoothly via the ACAT system. Works very well for buy-and-hold type investors of individual stocks and ETFs.

Bottom line. Webull is a brokerage app with free stock trades and free options trading with no contract fees. The feel is more of a full-featured traditional brokerage account shrunk into your smartphone. New users can earn free shares of stock and you can earn an additional bonus for transferring over assets from another brokerage firm.

Filed Under: Deals & Offers, Investing //

Best Interest Rates on Cash – June 2022 Update

Posted on June 6, 2022 // 14 Comments

Here’s my monthly roundup of the best interest rates on cash as of June 2022, roughly sorted from shortest to longest maturities. We all need some safe assets for cash reserves or portfolio stability, and there are often lesser-known opportunities available to individual investors. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 6/6/2022.

Significant changes since last month: Rates moving up a little. 4% APY on up to $6,000 for liquid savings at Current with no direct deposit requirement. Liquid savings 1.25% APY w/ no cap + up $325 bonuses on SoFi w/ direct deposit. Brokered CDs and US Treasury bonds now slightly above 3% for 5 years. 1-year CDs and Treasuries slightly over 2%. 9.62% Savings I Bonds still available if you haven’t done it yet.

Fintech accounts
Available only to individual investors, fintech companies often pay higher-than-market rates in order to achieve fast short-term growth (often using venture capital). “Fintech” is usually a software layer on top of a partner bank’s FDIC insurance.

  • 4% APY on $6,000. Current offers 4% APY on up to $6,000 total ($2,000 each on three savings pods). No direct deposit required. $50 referral bonus for new members with $200+ direct deposit with promo code JENNIFEP185. Please see my Current app review for details.
  • 3% APY on up to $100,000, but requires direct deposit and credit card spend. HM Bradley pays up to 3% APY if you open both a checking and credit card with them, and maintain $1,500 in total direct deposit each month and make $100 in credit card purchases each month. Please see my updated HM Bradley review for details.
  • 3% APY on 10% of direct deposits + 1% APY on $25,000. One Finance lets you earn 3% APY on “auto-save” deposits (up to 10% of your direct deposit, up to $1,000 per month). Separately, they also pay 1% APY on up to another $25,000 with direct deposit. New customer $50 bonus via referral. See my One Finance review.
  • 3% APY on up to $15,000, requires direct deposit and credit card transactions. Porte requires a one-time direct deposit of $1,000+ to open a savings account. Porte then requires $3,000 in direct deposits and 15 debit card purchases per quarter (average $1,000 direct deposit and 5 debit purchases per month) to receive 3% APY on up to $15,000. New customer bonus via referral. See my Porte review.

High-yield savings accounts
Since the huge megabanks pay essentially no interest, I think every should have a separate, no-fee online savings account to accompany your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

  • SoFi is now offering 1.25% APY + up to $325 new account bonus with direct deposit. You must maintain a direct deposit each month of any amount. Convenient if you already have a relationship with them. SoFi now has their own bank charter so no longer a fintech by my definition. See details at $25 + $300 SoFi Money new account and deposit bonus.
  • Bask Bank is up to 1.25% APY with no minimum balance requirements.
  • TAB Bank is up to 1.26% APY with no minimum balance requirements.
  • There are several other established high-yield savings accounts at closer to 0.80% APY. Marcus by Goldman Sachs is on that list, and if you open a new account with a Marcus referral link (that’s mine), they will give 0.50% extra for 3 months, or 1.35% APY for your first 3 months (add 0.10% with AARP membership). You can then extend this by referring others.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile of cash that you’re waiting to deploy shortly (plan to buy a house soon, just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. CFG Bank has a 13-month No Penalty CD at 1.22% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 0.85% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 0.90% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Connexus Credit Union has a 12-month certificate at 2.26% APY Note that the early withdrawal penalty is 90 days of interest. Anyone can join this credit union via partner organization for a one-time $5 fee.

Money market mutual funds + Ultra-short bond ETFs
Many brokerage firms that pay out very little interest on their default cash sweep funds (and keep the difference for themselves). Unfortunately, money market fund rates are very low across the board right now. Ultra-short bond funds are another possible alternative, but they are NOT FDIC-insured and may experience short-term losses at times. These numbers are just for reference, not a recommendation.

  • The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.71%.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 1.91% SEC yield ($3,000 min) and 2.01% SEC Yield ($50,000 min). The average duration is ~1 year, so your principal may vary a little bit.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.80% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.61% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 6/6/2022, a new 4-week T-Bill had the equivalent of 0.88% annualized interest and a 52-week T-Bill had the equivalent of 2.20% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 0.67% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 0.45% SEC yield. GBIL appears to have a slightly longer average maturity than BIL.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. If you redeem them within 5 years there is a penalty of the last 3 months of interest. The annual purchase limit for electronic I bonds is $10,000 per Social Security Number, available online at TreasuryDirect.gov. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888.

  • “I Bonds” bought between May 2022 and October 2022 will earn a 9.62% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More on Savings Bonds here.
  • In mid-October 2022, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.
  • See below about EE Bonds as a potential long-term bond alternative.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are severely capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore, as I feel the work required and the fees charged if you mess up exceeds any small potential benefit.

  • Mango Money pays 6% APY on up to $2,500, if you manage to jump through several hoops. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.
  • NetSpend Prepaid pays 5% APY on up to $1,000 but be warned that there is also a $5.95 monthly maintenance fee if you don’t maintain regular monthly activity.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops which usually involve 10+ debit card purchases each cycle, a certain number of ACH/direct deposits, and/or a certain number of logins per month. If you make a mistake (or they judge that you did) you risk earning zero interest for that month. Some folks don’t mind the extra work and attention required, while others would rather not bother. Rates can also drop suddenly, leaving a “bait-and-switch” feeling.

  • Quontic Bank is offering 1.10% APY on all balances. May be useful for those with high balances. You need to make 10 debit card point of sale transactions of $10 or more per statement cycle required to earn this rate.
  • The Bank of Denver pays 2.00% APY on up to $10,000 if you make 12 debit card purchases of $5+ each, receive only online statements, and make at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a Kasasa savings account that pays 1.00% APY on up to $25k. Thanks to reader Bill for the updated info.
  • Presidential Bank pays 2.25% APY on balances between $500 and up to $25,000, if you maintain a $500+ direct deposit and at least 7 electronic withdrawals per month (ATM, POS, ACH and Billpay counts).
  • Evansville Teachers Federal Credit Union pays 3.30% APY on up to $20,000. You’ll need at least 15 debit transactions and other requirements every month.
  • Lake Michigan Credit Union pays 3.00% APY on up to $15,000. You’ll need at least 10 debit transactions and other requirements every month.
  • (I no longer recommend this credit union myself, but the rate is still good.) Lafayette Federal Credit Union is offering 2.02% APY on balances up to $25,000 with a $500 minimum monthly direct deposit to their checking account. No debit transaction requirement. They are also offering new members a $100 bonus with certain requirements. Anyone can join this credit union via partner organization ($10 one-time fee).
  • Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Connexus Credit Union has a 5-year certificate at 3.21% APY ($5,000 min), 4-year at 3.11% APY, 3-year at 3.01% APY, and 2-year at 2.86% APY. Note that the early withdrawal penalty for the 5-year is 365 days of interest. Anyone can join this credit union via partner organization for a one-time $5 fee.
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Right now, I see a 5-year CD at 3.30% APY. Be wary of higher rates from callable CDs listed by Fidelity.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10 years? You can buy long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. You might find something that pays more than your other brokerage cash and Treasury options. Right now, I see a 10-year CD at 3.85% APY vs. 3.04% for a 10-year Treasury. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently 0.10%). I view this as a huge early withdrawal penalty. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. Purchase limit is $10,000 each calendar year for each Social Security Number. As of 6/6/2022, the 20-year Treasury Bond rate was 3.41%.

All rates were checked as of 6/6/2022.

Filed Under: Banking, Deals & Offers, Investing //

Voyager App: $50 Free Bitcoin For New Users (Now Live in All States but NY)

Posted on June 1, 2022 // 15 Comments

Improved $50 refer-a-friend offer. The Voyager app offers trading of various cryptocurrencies including bitcoin (BTC) and Ethereum (ETH). They also currently pay 3.25% APY on up to 0.25 BTC and 9% APY on USDC balances up to $25,000 for those that have done their due diligence on asset-backed stablecoins. It is now live in 49 out of 50 states (all but New York).

Refer-a-Friend bonus. They have recently improved their refer-a-friend program to $50 in free Bitcoin for new users (formerly $25) after they open an account and trade $100 minimum. The referrer gets $50 in VGX token (formerly $25). You can easily just perform a quick buy-and-sell transaction to satisfy the requirements, and transfer dollars back into your bank account if you wish. Quickly link your existing bank account for deposits and withdrawals using the Plaid service.

Here is my $25 BTC referral link (open via smartphone), although it just redirects to the App Store. Thanks if you use it! In order to ensure you are credited properly, be sure to enter my referral promo code JONA3F in the “Reward Code” area during the account sign-up process, fund your account, and trade $100 of BTC. You should then see $50 of BTC deposited in your account within 72 hours as a referral bonus. You can also then start referring others for more bonuses. Contact rewards@investvoyager.com if you need support. Here’s a screenshot from my account showing the former $25 BTC bonuses:

Voyager’s CEO is Stephen Ehrlich, the former CEO and founder of Lightspeed Financial (spun off by E*Trade). Oscar Salazar, Uber co-founder and former Chief Technical Officer. Philip Eytan, an early Uber investor. Here is a Fortune magazine profile. Voyager is listed on the Canadian Securities Exchange (CSE) and owns a FINRA broker-dealer license.

Filed Under: Deals & Offers //

Teachers Federal Credit Union New Member Promotion (DO NOT TRY)

Posted on May 30, 2022 // 30 Comments

Update 6/16/22: More than two weeks after joining and taking my deposit, they have finally refunded the deposit and officially declined my application due to vague reasons suggesting fraud. They have made no effort to contact me or to otherwise explain their actions. I’d never use this credit union, even if I lived in their region. 🙄

Update 6/13/22: Myself and many other readers report that this credit union has locked them out of online access and refunded the initial deposit, all without any further communication. All after approving the account, providing account numbers and routing numbers, and allowing us to set up direct deposits. Not a great look for them. I would not try for this bonus anymore if you have not already done so.

Original post as of 5/30/22:

Teachers Federal Credit Union has a new member offer worth up to $400 that consists of a $300 direct deposit bonus and $100 debit card spending bonus. The terms also state that you can stack this with the $50 refer-a-friend promotion. Teacher’s FCU has 32 physical branches in New York state, but membership is open to anyone applying online. Must enter promo code OFFER400 to participate in this offer. Hat tip to DepositAccounts. Offer ends 7/31/22.

$300 Direct Deposit bonus details.

  • Offer available to new members only.
  • Must enroll in Online Banking and eStatements.
  • Open a new Teachers checking account.
  • Have qualifying direct deposits totaling at least $2,500.00 within the first three monthly statement cycles after account opening.
  • Qualifying direct deposits include payroll or government benefits. Transactions that will not count toward direct deposits include external transfers, point of sale credits and in-person check or cash deposits, wire transfers, ATM transfers, and Online and Mobile Banking transfers.
  • For accounts opened online, you must use offer code OFFER400 to be eligible.
  • May be combined with the Refer-a-Friend promotion.

$100 Debit Card Spend bonus details.

  • Offer available to new members only.
  • Must enroll in Online Banking and eStatements.
  • Open a new Teachers checking account with a debit card.
  • Make $500 in eligible purchases using the Teachers debit card linked to that account.
  • The $500 must be spent within the first three monthly statement cycles in order to qualify. Qualifying debit card purchases do not include: ATM transactions, cash-back, Peer-to-Peer (“P2P”) payments, loan payments, account funding and disputed or unauthorized transactions.
  • For accounts opened online, you must use offer code OFFER400 to be eligible.
  • May be combined with the Refer-a-Friend promotion.

$50 Refer-a-Friend bonus details.

  • Referred person must keep account open for 60 days in good standing with a balance greater than $0.
  • Referred person must perform 10 qualifying transactions in 60 days – transactions include debit card purchases, direct deposits, mobile deposits, Teachers bill pay, in-branch deposits and ATM deposits
  • If these requirements are satisfied, both the referrer and referred person will each get a $50 bonus deposited into their Regular Savings account.
  • Here is my $50 refer-a-friend link. Enter your e-mail address to use. Thanks if you use it!

Smart Checking 1.00% APY details. There is a barebones Share Draft Checking with no minimum balance and no monthly fee, but also no interest paid. Alternatively, the high yield Smart Checking account earns 1.00% APY on balances up to $15,000 (and 0.10% APY on balances greater than $15,000) when you meet one of these qualifications:

  • Average monthly balance of $5,000 in your Smart Checking account
  • $20,000 in combined end of month deposit balances
  • Establish direct deposit(s) of $500 or more AND complete 10 debit card purchases each month

(Note that there is a inactivity fee if the Share Savings account balance falls below $100 AND there has been no account activity during the previous two years.)

Application and bonus qualification details. Here are some tips based on my account opening experience.

  • First, start by clicking on a $50 refer-a-friend link from a member and enter your e-mail address. This qualifies you for the $50 Refer-a-friend offer and you will move on to the application process. You can pick either the Share Draft Checking or Smart Checking (both have no monthly fee).
  • You will enter your personal information including name, address, drivers license/ID, Social Security number, and so on. They will ask you some identity verification questions. You will not have to join any special organizations to gain credit union membership, not even a $5 nominal fee. In fact, they will deposit $1 for you into a savings account to get you started.
  • Be sure to enter the promo code OFFER400 when prompted towards the end of the application.
  • Your initial deposit can be charged on a credit card, up to $5,000. I recommend using a 2% cash back card or similar to earn some rewards. If everything goes smoothly, you should receive an e-mail with your member number shortly, which allows you to sign up for online access. Otherwise, they may ask for some additional documentation.
  • They seem to be pretty good about frequent email communication. Once you get the account number (routing number is 221475786), you can use that for establishing direct deposit within the required timeframe. (Note the offer page says 60 days in some places, but the fine print clarifies it is within three monthly statement cycles.) Don’t forget to sign up for eStatements and make those 10 transactions as well to get the $50 referral bonus.

Altogether, this is a very attraction promotion on a pretty decent no-fee checking account. Teachers FCU also has competitive CD rates at times. They currently offer a unique 24 month “Smart CD” that pays 2.00% APY in Year 1 and 2.50% APY in Year 2 (as of 5/30/22).

Filed Under: Banking, Deals & Offers //

Hulu Black Friday: $0.99/Month for 12 Months (w/ Ads), Add Disney+ For $2/Month

Posted on May 24, 2022 // 11 Comments

Hulu has a Black Friday deal of $0.99/month for 12 months on their Ad-supported plan that includes two devices and HD resolution. Regular price is $7.99/month. You can also add on Disney+ (Ad-supported) for $2/month or add Starz for $0.99/month for 6 months. Works for new and returning members (must have canceled for at least a month). Set a calendar reminder if you don’t want to auto-renew.

Savings compared to current regular monthly price. Offer for Hulu (With Ads) plan only: $.99/month for 12 months, then auto-renews at $7.99/month or then-current regular monthly price. Ends 11:59 PM PST on 11/28/23. Cancel anytime, effective at the end of your billing period. No refunds or credits for partial months. New and eligible returning subscribers (who have not been Hulu subscribers in the past 1 month) only; Disney+ Basic (With Ads) and Disney Bundle subscribers are not eligible.

Filed Under: Deals & Offers //

Peerstreet Update 2022: Interest Rate Spreads, Secondary Market, Pocket 3.5% APY

Posted on May 17, 2022 // 13 Comments

Another one of my Peerstreet loans was paid off recently, and I realized that it has been over a year since my last update on this experiment in real-estate debt. Here’s my current view on this unique investment.

Peerstreet in a nutshell. “Fractional investments meet hard money lending”. Real estate investors need money quickly to purchase a property, so they pay a higher interest rate for lighting-fast funding but usually only hold the debt for 12-36 months. This used to be for wealthy folks with lots of cash lying around, but Peerstreet lets SEC-accredited investors put in as little as $1,000 to fund a portion of any specific property. The loans are backed by a first lien on the real estate property.

My performance in a nutshell. Since 2016, I have funded 72 loans on 72 different properties with between $1,000 to $5,000 each. I have earned nearly $5,000 in interest at an overall IRR of 6.8% so far (verified with Excel). 67 of the loans have been paid off, 2 are current on their payments and mature in 2022, and 3 are in various stages of being late. Due to rising real estate prices, I am just being patient and letting Peerstreet handle the legal gymnastics.

Why I stopped investing in a nutshell. My 72 loans were all between 7% and 10% interest. The median was 7.50% and the average was closer to 8%. However, in the past year the rates have been more often in the 6.5% to 7% range. Traditional 30-year fixed mortgage rates are now close to 6%, and Peerstreet’s rates are a bit higher now but I am still choosing to sit out at these offered rates. I have been seeing loans taking longer to become fully funded so perhaps I’m not alone. Below are the two most recent loans available, just as an example:

Secondary marketplace. Peerstreet has added a new feature where selected people (usually larger institutions) can make offers on your existing loans prior to maturity, possibly offering you valuable liquidity. In my experience, I have only received a few lowball bids on my loans that are in foreclosure, on the order of 50 cents on the dollar. No thanks. It will be much more interesting if/when they open this up to everyone, so that you can have a more efficient marketplace for loans in default.

Peerstreet Pocket 3.5% APY. Peerstreet also rolled out an optional feature called Pocket that pays higher-than-online-bank rates on your short-term cash. They just raised the rate up to 3.5% APY. You can deposit daily, but only withdraw once a month (with two weeks notice). The funds are not FDIC-insured and are backed by the financial ability of Peerstreet (effectively this is lending money to a young start-up company).

Bottom line. I still like the idea of Peerstreet and have had an overall positive experience (you do need enough invested to maintain proper diversification across loans), but the interest rates currently being paid out just aren’t high enough to maintain my interest. I’m currently withdrawing my funds gradually as the loans get paid back over time and investing them elsewhere. 10% interest rates would get my attention back, though! 💰

If you are interested, you can sign up and browse investments at PeerStreet for free before depositing any funds or making any investments. You must qualify as an accredited investor (either via income or net worth) to invest. If you already invest with them, they now sync with Mint.com.

Filed Under: Deals & Offers, Investing, Real Estate //

Boost Mobile Annual Plans $8.33/mo for 1 GB, $25/mo for 35 GB “Unlimited” Data (AT&T MVNO)

Posted on May 12, 2022 // 12 Comments

Boost Mobile now uses the T-Mobile and AT&T 4G/5G networks after the T-Mobile/Sprint merger completed. Now owned by Dish Network, they have rolled out some aggressively-priced annual plans that are cheaper than the ones from Mint Mobile (which I still use), plus some people may prefer access to AT&T network coverage. Light data users can get 1 GB a month for only $100 a year, while heavy data users can get 35 GB a month for $300 a year ($25 a month). Here are all of the the annual plans and pricing:

  • 1 GB 5G/LTE Data + Unlimited Talk/Text for $8.33/month ($100 for 12 months paid upfront)
  • 5 GB 5G/LTE Data + Unlimited Talk/Text for $14/month ($168 for 12 months paid upfront)
  • 15 GB 5G/LTE Data + Unlimited Talk/Text for $20/month ($240 for 12 months paid upfront)
  • “Unlimited” 35 GB 5G/LTE Data + Unlimited Talk/Text for $25/month ($300 for 12 months paid upfront, data speeds throttled after 35 GB)

After you enter your zip code and e-mail, you should be able to confirm the network based on the SIM card that you purchase. Here is a screenshot of the SIM card that will use the AT&T 4G/5G network:

New Bring Your Own Device (BYOD) customers get a free SIM card, free shipping, no credit check, no contract. Taxes will depend on zip code. Mobile Hotspot included based on your high-speed data allotment (limited to 12 GB for Unlimited plan).

Filed Under: Deals & Offers //

Best Interest Rates on Cash – May 2022 Update

Posted on May 10, 2022 // 5 Comments

Here’s my monthly roundup of the best interest rates on cash as of May 2022, roughly sorted from shortest to longest maturities. We all need some safe assets for cash reserves or as a bond substitute, and there are often lesser-known opportunities available to individual investors. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 5/10/2022.

Significant changes since last month: Rates are moving. Brokered CDs and US Treasury bonds close to 3% for 5 years. 1-year Treasury close to 2%. 9.62% Savings I Bonds still available if you haven’t done it yet. 4% APY on up to $6,000 for liquid savings at Current with no direct deposit requirement.

Fintech accounts
Available only to individual investors, fintech companies often pay higher-than-market rates in order to achieve fast short-term growth (often using venture capital). “Fintech” is usually a software layer on top of a partner bank’s FDIC insurance.

  • 4% APY on $6,000. Current offers 4% APY on up to $6,000 total ($2,000 each on three savings pods). No direct deposit required. $50 referral bonus for new members with $200+ direct deposit with promo code JENNIFEP185. Please see my Current app review for details.
  • 3% APY on up to $100,000, but requires direct deposit and credit card spend. HM Bradley pays up to 3% APY if you open both a checking and credit card with them, and maintain $1,500 in total direct deposit each month and make $100 in credit card purchases each month. Please see my updated HM Bradley review for details.
  • 3% APY on 10% of direct deposits + 1% APY on $25,000. One Finance lets you earn 3% APY on “auto-save” deposits (up to 10% of your direct deposit, up to $1,000 per month). Separately, they also pay 1% APY on up to another $25,000 with direct deposit. New customer $50 bonus via referral. See my One Finance review.
  • 3% APY on up to $15,000, requires direct deposit and credit card transactions. Porte requires a one-time direct deposit of $1,000+ to open a savings account. Porte then requires $3,000 in direct deposits and 15 debit card purchases per quarter (average $1,000 direct deposit and 5 debit purchases per month) to receive 3% APY on up to $15,000. New customer bonus via referral. See my Porte review.
  • 1.20% APY on up to $50,000. You must maintain a $250 direct deposit each month for this balance cap, otherwise you’ll still earn 1.20% on up to $5,000. They also pay 6% on USDC stablecoin, but I avoid this as it is not FDIC-insured (and you can get higher rates elsewhere if you did want to hold USDC.) New customer $100 bonus via referral. See my OnJuno review.
  • 1.25% APY (no balance cap). SoFi is now offering 1.25% APY with no balance cap. You must maintain a direct deposit each month of any amount. Convenient if you already have a relationship with them. See $25 + $300 SoFi Money new account and deposit bonus.

High-yield savings accounts
Since the huge megabanks pay essentially no interest, I think every should have a separate, no-fee online savings account to accompany your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile of cash that you’re waiting to deploy shortly (plan to buy a house soon, just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. CFG Bank has a 13-month No Penalty CD at 1.07% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 0.60% APY for all balance tiers. Marcus has a 13-month No Penalty CD at 0.75% APY with a $500 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Department Of Commerce Federal Credit Union has a 12-month certificate at 2.15% APY. $500 minimum. 180 day interest penalty on early withdrawals. Anyone can join this credit union through a $5 membership in the American Consumer Council (ACC). Enter ACC membership number on the online application.

Money market mutual funds + Ultra-short bond ETFs
Many brokerage firms that pay out very little interest on their default cash sweep funds (and keep the difference for themselves). Unfortunately, money market fund rates are very low across the board right now. Ultra-short bond funds are another possible alternative, but they are NOT FDIC-insured and may experience short-term losses at times. These numbers are just for reference, not a recommendation.

  • The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.53%.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 1.79% SEC yield ($3,000 min) and 1.89% SEC Yield ($50,000 min). The average duration is ~1 year, so your principal may vary a little bit.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.68% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.38% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 5/9/2022, a new 4-week T-Bill had the equivalent of 0.50% annualized interest and a 52-week T-Bill had the equivalent of 1.94% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 0.38% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 0.23% (!) SEC yield. GBIL appears to have a slightly longer average maturity than BIL.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. If you redeem them within 5 years there is a penalty of the last 3 months of interest. The annual purchase limit for electronic I bonds is $10,000 per Social Security Number, available online at TreasuryDirect.gov. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888.

  • “I Bonds” bought between May 2022 and October 2022 will earn a 9.62% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More on Savings Bonds here.
  • In mid-October 2022, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.
  • See below about EE Bonds as a potential long-term bond alternative.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are severely capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore, as I feel the work required and the fees charged if you mess up exceeds any small potential benefit.

  • Mango Money pays 6% APY on up to $2,500, if you manage to jump through several hoops. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.
  • NetSpend Prepaid pays 5% APY on up to $1,000 but be warned that there is also a $5.95 monthly maintenance fee if you don’t maintain regular monthly activity.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops which usually involve 10+ debit card purchases each cycle, a certain number of ACH/direct deposits, and/or a certain number of logins per month. If you make a mistake (or they judge that you did) you risk earning zero interest for that month. Some folks don’t mind the extra work and attention required, while others would rather not bother. Rates can also drop suddenly, leaving a “bait-and-switch” feeling.

  • Quontic Bank is offering 1.01% APY on balances up to $150,000. May be useful for those with high balances. You need to make 10 debit card point of sale transactions of $10 or more per statement cycle required to earn this rate.
  • The Bank of Denver pays 2.00% APY on up to $10,000 if you make 12 debit card purchases of $5+ each, receive only online statements, and make at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a Kasasa savings account that pays 1.00% APY on up to $25k. Thanks to reader Bill for the updated info.
  • Presidential Bank pays 2.25% APY on balances between $500 and up to $25,000, if you maintain a $500+ direct deposit and at least 7 electronic withdrawals per month (ATM, POS, ACH and Billpay counts).
  • Evansville Teachers Federal Credit Union pays 3.30% APY on up to $20,000. You’ll need at least 15 debit transactions and other requirements every month.
  • Lake Michigan Credit Union pays 3.00% APY on up to $15,000. You’ll need at least 10 debit transactions and other requirements every month.
  • (I no longer recommend this credit union myself, but the rate is still good.) Lafayette Federal Credit Union is offering 2.02% APY on balances up to $25,000 with a $500 minimum monthly direct deposit to their checking account. No debit transaction requirement. They are also offering new members a $100 bonus with certain requirements. Anyone can join this credit union via partner organization ($10 one-time fee).
  • Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Department Of Commerce Federal Credit Union has a 5-year certificate at 3.05% APY. $500 minimum. 180 day interest penalty on early withdrawals. Anyone can join this credit union through a $5 membership in the American Consumer Council (ACC). Enter ACC membership number on the online application.
  • Live Oak Bank has a 5-year CD at 2.75% APY ($2,500 minimum) with an early withdrawal penalty of 180 days of interest.
  • KS StateBank has a 5-year CD at 2.70% APY ($500 min). Early withdrawal penalty is 18 months of interest.
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Right now, I see a 5-year CD at 3.20% APY. Be wary of higher rates from callable CDs listed by Fidelity.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10 years? You can buy long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. You might find something that pays more than your other brokerage cash and Treasury options. Right now, I see a 10-year CD at 3.00% APY vs. 2.98% for a 10-year Treasury. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently 0.10%). I view this as a huge early withdrawal penalty. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. Purchase limit is $10,000 each calendar year for each Social Security Number. As of 5/9/2022, the 20-year Treasury Bond rate was 3.38%.

All rates were checked as of 5/10/2022.

Filed Under: Banking, Deals & Offers, Investing //

Warren Buffett’s Activision Merger Arbitrage “Bank/Credit Card Bonus” Deal

Posted on May 9, 2022 // 4 Comments

While listening to the 2022 Berkshire Hathaway Annual Meeting Q&A session (full video and transcript at CNBC), I was amused to hear that Warren Buffett announced that he bought shares of Activision Blizzard stock as part of a “workout”.

The very short version is that Microsoft (MSFT) has entered an agreement to purchase Activision Blizzard (ATVI) for $95 a share. As of close today 5/9/2022, you could buy ATVI for about $77.17 a share. If the sale goes through and closes in June 2023, you would earn a 23% return a little over a year.

The amusing part is that given the size of Berkshire Hathaway, even buying 10% of ATVI at the current price would only cost about $6 billion with a fixed upside of around $1.4 billion. If the deal closes, Berkshire would increase its $700 billion market cap at most by a one-time 0.2%. That’s the same ratio as someone with a $100,000 net worth doing a bank or credit card bonus deal for $200. 🤔

Even though Warren Buffett spends most of his time gradually building Berkshire Hathaway into a cash-gushing legacy fortress that will run for the next 100 years, he still can’t give up a good short-term deal either! It’s like an old habit. I love it! 🤣 Here’s how he ends it:

And incidentally, I don’t talk this over with Charlie. I mean, you know, he knows that occasionally I’ll see an arbitrage deal and do it. And, you know, 50 years ago we were doing it together, and his general feeling is, “Why is Warren fooling around with this kind of stuff, even.”

But it’s the old fire horse that occasionally it looks like the odds are in our favor. But absolutely we can lose money on that company, and, you know, fairly large sums of money, depending on what happened if the deal blows up.

And there will be a lot of people that want the deal to blow up. But Microsoft doesn’t want it to blow up, so we’ll just have to see what happens.

In addition, you and I can stroll over any brokerage app and participate in this “special situation” opportunity as well. There is still risk involved, and I’m sure there is plenty of discussion about it on various stock trading forums that I never visit, but here are my notes:

  • Around October and November 2021, Berkshire Hathaway acquired shares of ATVI at an average price of about $77 a share. This was the decision of either Ted Weschler or Todd Combs, as Buffett corrected. This would indicate that $77 a share would already reflect a margin of safety below intrinsic value, by their estimation, even without any acquisition talks.
  • In January 2022, Microsoft announced an agreement to buy ATVI at $95 a share in an all-cash deal. MSFT has more than enough cash to comfortably pay for this deal.
  • Since then, the shares have traded around $75 to $82 a share. Even after Buffett announced his participation in this deal, the price hasn’t moved much.
  • The primary risk is that US or EU regulators will stop the transaction due to anti-trust concerns. MSFT will pay a break-up fee of approximately $4 a share if it fails due to anti-trust issues.
  • Although he downplays it, I can only assume that Buffett – with all his experience – really does believe that this transaction has a good likelihood of going through, and even if it doesn’t the downside is limited. He has a different view than the market, and is willing to bet real money on it.

As an illustration, for every $1,000 invested into ATVI at $77.17 a share and cashed out at $95 a share, the upside potential is a $230 as of June 2023 (deal deadline, a little over 13 months from now). You can scale this number up or down based on your investment. $10,000 invested means $2,300 upside, and so on. The downside potential is unknown if it falls apart, and theoretically unlimited as with any business.

Disclosure: I bought a small position in ATVI in my side money account. This is not a recommendation for your situation and you should perform your own due diligence. Some people like to bet on a football game because it makes it more interesting, but I’d rather participate in something with an expected positive return and an educational component. I don’t believe in paper trading; skin in the game is a better teacher.

Filed Under: Deals & Offers, Investing //

Billionaire Crypto CEO Explains DeFi Farming… Sounds Exactly Like a Ponzi Scheme

Posted on May 3, 2022 // 7 Comments

Sam Bankman-Fried (nicknamed “SBF”) used the “sell shovels during the Gold Rush” model on cryptocurrency and has made billions as the CEO of FTX, a crypto derivatives exchange. He has a background in quantitative trading and performed a now-famous arbitrage of the different selling prices of Bitcoin between Japan and the US when the market was inefficient, buying millions of dollars worth every day where it was cheaper and selling it where it was slightly more expensive.

I’m also a Matt Levine Money Stuff fan, and so I listened to this Bloomberg Odd Lots podcast with Matt Levine and Sam Bankman-Fried with great interest. If you don’t want to listen, definitely read this partial transcript. The whole thing was very educational, like one of those casino documentaries showing you how things really work. Here’s an even shorter excerpt:

Matt Levine: (21:17)
Can you give me an intuitive understanding of farming? I mean, like to me, farming is like you sell some structured puts and collect premium, but perhaps there’s a more sophisticated understanding than that.

Sam Bankman-Fried: (21:28)
Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that’s gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It’s just a box. So what this protocol is, it’s called ‘Protocol X,’ it’s a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we’ve described is the world’s dumbest ETF or ADR or something like that. It doesn’t do anything but let you put things in it if you so choose. And then this protocol issues a token, we’ll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven’t exactly given a compelling reason for why there ever would be any proceeds from this box, but I don’t know, you know, maybe there will be, so that’s sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they’re gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they’re going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they’re gonna airdrop, you know, 1% of the X token pro rata amongst everyone who’s put money in the box. That’s for now, what X token does, it gets given away to the box people. …

So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that’s interesting. Like if the total amount of money in the box is a hundred million dollars, then it’s going to yield $16 million this year in X tokens being given out for it. That’s a 16% return. That’s pretty good. We’ll put a little bit more in, right? And maybe that happens until there are $200 million in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone’s like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they’re wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that’s it? Like that market cap for this box? And it’s been like 48 hours and it already is $200 million, including from like sophisticated players in it. They’re like, come on, that’s too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

And they’re like ‘10X that’s insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it’s $130 million market cap token because of, you know, the bullishness of people’s usage of the box. And now all of a sudden of course, the smart money’s like, oh, wow, this thing’s now yielding like 60% a year in X tokens. Of course I’ll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

Matt: (27:13)
I think of myself as like a fairly cynical person. And that was so much more cynical than how I would’ve described farming. You’re just like, well, I’m in the Ponzi business and it’s pretty good.

So many words, but the bottom line is… people pay more for the “cool box” because other people paid more for the box, which makes other people pay more for the box… Really? You are one of the smartest people in this space, and that the best explanation you can give me?

There’s more in the podcast, and SBF actually came off as knowledgable, reasonable, and practical. He was almost a little too honest about things, and as a result laid bare the reality of how little actually backs most of these schemes. Read between the lines, and you start to see the tricks and manipulations. Bitcoin might be limited to a finite amount, but most of these other random coins and tokens can be created in a day and are thus unlimited. If you get in really early and get out early enough in a Ponzi scheme, you can make money without hard work. But many people are collectively losing billions on these “cool boxes”, often the same people who put a lot of their hard-earned income into lottery tickets. Meanwhile, the shovel-sellers keep getting richer.

Sometimes the best idea is to simply avoid an risky area that will eventually implode. Focus your energy somewhere where your consistent work can grow a competitive advantage over time.

Filed Under: Deals & Offers //
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