#wealthreport

[plotholes-and-spellingerrors]

Addendum: Even when we talk about "The 1%", that means the top 1% of wealth; in the US, that's about $5.8 million https://content.knightfrank.com/resources/knightfrank.com/wealthreport/the-wealth-report-2024.pdf#page=15... which means that 99% of the US population fits within about 1.16% of one pixel.

But also... 1% of the US population is around 3.4 million AKA a little less than the population of Los Angeles CA https://www.census.gov/popclock/. But if you look at that graph, the range from $500 million to Elon Musk, that is, almost 100× the wealth necessary to be in the 1%, and the entirety of the graph minus 1 pixel, represents fewer than 2,500 people. That's 0.00074% of the US population. There are more people in Drumright city, Oklahoma than people who have more than $500 million https://www.census.gov/data/tables/time-series/demo/popest/2020s-total-cities-and-towns.html.

I'm sure the good people of Drumright, OK are fine, upstanding citizens, but would you call it a "democracy" if the political system were designed so that the mayor of Drumright could convince California to kill funding for public transit or take over one of the most popular websites? If about 15 Drumrightians could individually dictate global markets, take over important newspapers, and influence national economic policy or public opinion about trans people just by posting about it online, all without holding public office?

Yet we think it's cool and normal to organize our political and economic systems so that about 2,500 can absolutely hold that kind of power because they have the money to do so. AND it's a convincing argument for a lot of people that laws that impoverish them should be enacted because maybe they'll be in the 1% later, at which point the laws will make them wealthier.

"It turns out that if you put Elon Musk on the graph, almost the entire US population is crammed into a vertical bar, one pixel wide. Each pixel is $500 million wide, illustrating that $500 million essentially rounds to zero from the perspective of the wealthiest Americans."

- Ken Shirriff, Wealth distribution in the United States

[correctsuccess]

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A privilege and a sign of our standing in the analysis of the #superyacht market that we were selected to be the supplier of #data for this year’s knightfrank #WealthReport, which was launched at a special preview event last night (embargo now lifted) https://t.co/Xs0TTEIkbd vi…

[digitalmark18-blog]

The High Financial Price of Our Short Attention Spans

New Post has been published on https://britishdigitalmarketingnews.com/the-high-financial-price-of-our-short-attention-spans/

The High Financial Price of Our Short Attention Spans

0 Comments

By

Shlomo Benartzi

Oct. 21, 2018 10:12 p.m. ET

Photo: Peter Oumanski

Digital devices are potentially damaging your wallet—but not in the way you might think.

Smartphones and other gadgets allow us to follow our friends, read the news, watch a football game and even track our investments anytime, and nearly anywhere. We’re always multitasking, or moving from one bit of information to the next, and rarely looking at one piece of information long enough to fully digest it.

All this has one crucial side effect: It creates a shortage of attention, which can lead to poor financial choices.

When it comes to our money, effective decision-making typically requires information, concentration and reflection. Not so long ago, the main scarcity was information—we lacked the data to make informed financial decisions. But now we are drowning in data. What we lack, instead, is the ability to properly process it. The price we pay for that may be subtle, but it’s hardly insignificant.

Fortunately, it doesn’t have to be this way—in part because while the digital world takes away our ability to concentrate, it also gives us tools to mitigate the damage. Here are five ways we can counteract the financial pain inflicted by our increasingly short attention spans.

Avoid multitasking

You probably know that multitasking is bad for your concentration, but you also probably underestimate how bad it is, and how much it affects your ability to make effective decisions.

This is especially true when it comes to financial decisions, which often require navigating difficult trade-offs. Is the additional investment risk worth the potential reward? How does this investment fit with our overall portfolio? Is now the best time to sell a successful startup? Such questions benefit from careful reflection, but multitasking interferes with our ability to do just that.

For instance, research by Baba Shiv and Alexander Fedorikhin has shown that asking people to remember a few extra numbers can short-circuit their self-control, making them much more likely to choose a slice of chocolate cake instead of a fruit salad.

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Why is that? One likely possibility is that we run out of mental bandwidth when we try to remember several numbers and resist immediate gratification at the same time. As a result, we choose the cake, even if we’re supposed to be on a diet. More to the point in this discussion, we end up spending rather than saving.

In other words, trying to multitask makes us worse at most tasks.

The lesson of this research is that the complexity of financial decisions benefits from a reflective thought process, so that we can marshal all our cognitive resources on navigating the necessary trade-offs. Unfortunately, smartphones and mobile gadgets encourage the opposite kind of thinking, as we are constantly distracted by incoming emails, texts and alerts. If you have to make major financial decisions on a screen, you should at least do it in airplane mode or “don’t disturb” mode.

Pick the right time of day

Investors need to become more aware of fluctuations in the amount of attention we have at different times of the day.

Research by the Behavioral Insights Team in Britain, a public-private company devoted to applying behavioral economics, has found that people are significantly less likely to successfully navigate complex websites in the morning. One possible explanation involves our lack of attention, as the morning is full of tasks that take up precious bandwidth, from getting the children to school to catching up on email.

If this sounds familiar, then you might want to postpone your financial decisions until later in the day. Of course, you might have calm mornings and hectic afternoons. As a rule of thumb, consider using an app, such as Apple’s new Screen Time feature, that tracks and displays your device usage throughout the day, which could be a good proxy for your bandwidth.

The point is to reflect on your available attention and ensure you are making your hardest choices—especially financial ones—during the lulls in your day, when you are best able to handle complexity. If you’re considering selling an investment, for instance, don’t hit send on the email instructions to your adviser when you’re rushing between dropping the children at school and meeting with your boss. Wait for a breather.

Focus on the most relevant information, not the most available

When we focus on the latest alert or the numbers on a single screen, we become subject to what Nobel Laureate Daniel Kahneman refers to as the “what you see is all there is” error.

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Device Addition

Individuals check their mobile phones 47 times per day.

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First thing in the morning

89%

Within an hour of going to sleep

81%

While shopping

92%

While watching TV

89%

More Than Calls

Cellphones have increasingly become part of our daily routines.

Read the news

57%

Watch short video/live posts

52%

Navigation

46%

Stream/play music

45%

Stream films

31%

Watch TV live

27%

Source: Deloitte Global Mobile Consumer Survey (U.S. results)

This means that people typically make decisions based upon the immediately available information—what we see at first glance—and forget that there might be more relevant information that isn’t visible.

Consider, for instance, the impact of the minimum-payment information on credit-card repayment screens. Studies show that including the information leads people to make smaller payments, with the minimum serving as an anchor, biasing the amount downward. Over time, this leads to higher levels of debt and more money squandered on interest payments. By taking away the minimum-payment information, we can make it easier for people to make better decisions about how and when to pay off their credit cards.

In the domain of investing, the error often leads us to focus on short-term results, as we fixate on the recent performance of a stock or investment. To mitigate this bias, we should ensure that the time horizons on our financial websites—the duration of performance that’s automatically displayed—matches our actual investment time horizons. If we’re not retiring for several decades, there’s no reason to pay attention to the daily fluctuations of a stock or fund. Research by Maya Shaton shows that after the Israeli government prohibited retirement funds from displaying returns for periods shorter than 12 months, investors reacted by trading less and taking smarter risks with their savings.

We should also delete the stock app on our phones and think carefully about which financial apps are allowed to send us notifications. If you are properly diversified, and you’re not retiring for a while, there’s virtually no need to stay up-to-date on market news. Your biggest mistakes will come from overreacting to the latest stock swings, not underreacting.

Force yourself to see the big picture

Some tools on our smartphones can actually help us preserve some of our precious bandwidth. Many of us struggle to monitor all of our credit cards, or remember how much we’ve saved, but aggregators allow us to see all of this information. They also make it easy to track trends and spot patterns, so we can notice when our spending spikes, or when we’re falling short of our retirement goals. In short, they help compensate for the “what you see is all there is” error, since they make it easy for us to quickly notice our most important financial facts.

Similarly, there are apps that automatically monitor our finances, pay our bills and set aside money into our saving accounts. Just as your phone remembers the numbers of friends so you don’t have to, these gadgets can also perform routine financial tasks, letting us focus on the bigger picture.

The typical American probably spends more time choosing a restaurant for date night than choosing a savings rate for their retirement plan. By taking care of these routine financial chores, the apps can free up some mental bandwidth for better investments of time and attention, such as long-term financial planning.

Keep away from the phone

This may be the hardest piece of advice given our smartphone-obsessed culture. But the evidence is mounting that if we make financial decisions on our mobile device—or within earshot of our mobile device—the decisions could very well be bad ones.

More From Dr. Benartzi

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My own preliminary research, conducted with John Payne of Duke University, shows that people tend to perform worse on a test of financial literacy when given the questions on a mobile device, at least compared with those subjects taking the same test on paper.

One likely explanation involves the tendency of people to think and read faster on their smartphones, as we continually scroll down the screen for more stimulation. And the news gets even worse. Recent work by Adrian Ward, Kristen Duke, Ayelet Gneezy and Maarten Bos shows that just having your smartphone next to you—even if it isn’t turned on—can diminish your cognitive capacity.

According to the research, subjects with a phone nearby perform significantly worse on measures of attention, working memory and fluid intelligence than those whose phones were in another room. The researchers speculate that the effect exists because the mere proximity of a smartphone causes us to monitor it—we’re waiting for those alerts and interruptions—and that monitoring takes up attentional resources. This suggests that we should try to avoid using our smartphones, or even being close to them, when making financial decisions.

Here’s where a financial adviser can help: During your next meeting, perhaps your adviser should suggest that you leave your phone behind at a “charging station” with the receptionist. That way, if you get any urgent calls, you can still be notified. Given the impact many financial decisions have on our future, and the fact that they are not easily undone, it’s worth being disconnected for an hour or so if it can improve the quality of our choices.

Dr. Benartzi (@shlomobenartzi), is a professor and co-head of the behavioral decision-making group at UCLA Anderson School of Management and a frequent contributor to Journal Reports. Email him at reports@wsj.comr

Appeared in the October 22, 2018, print edition as ‘The High Financial Price Of Our Short Attention Spans.’

Source: https://www.wsj.com/articles/the-high-financial-price-of-our-short-attention-spans-1540174321

[tissipropaganda]

These were the world’s hottest luxury markets in the 2010s

Where are the world’s hottest luxury residential markets? It turns out that’s a question with a very different answer every year. Most recently, the top up-and-coming market was a somewhat surprising one: Manila, which saw prime residential property values increase by 11 percent in 2018 thanks to limited supply and a booming Phillipine economy, according to the latest annual Wealth Report from global property consultancy Knight Frank. https://www.knightfrank.com/wealthreport But the Phillipine capital’s chart-topping performance had

Source: https://therealdeal.com/2019/12/30/these-were-the-worlds-hottest-luxury-markets-in-the-2010s/

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Our latest research in The Wealth Report examines investment trends covering almost 100 countries and 100+ cities, including what $1M buys you around the world. Read more —> elliman.com/wealthreport #wealthreport2018 #luxuryrealestate #luxurylifestyle #finance #money #wealth #growth #instagood #photooftheday #picoftheday #milliondollarlisting #education #knowledge #knowledgeispower #investment #investing (at Beverly Hills, California)

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via Canadian Real Estate Wealth

[topinforma]

New Post has been published on Mortgage News

New Post has been published on http://bit.ly/2rknUgl

Help for Home Buyers Burdened by Student Debt - Wall Street Journal (subscription)

Fannie Mae is allowing lenders to change the way they calculate consumers’ debt-to-income ratios. Illustration: Ellen Weinstein for The Wall Street Journal

By

Jillian Berman

June 11, 2017 10:07 p.m. ET

6 COMMENTS

Student-loan debt often makes it tough for young people to buy homes. But some new programs—from mortgage-market giant Fannie Mae, as well as from a handful of states—aim to make that easier.

College graduates with student debt are less likely to buy a home than graduates without debt, according to a recent study from the Federal Reserve Bank of New York. For starters, paying off student loans can make it more difficult to save enough cash for a down payment. Then, even if potential home buyers have saved enough to put down, student loans affect their debt-to-income ratio, which can make it difficult for them to qualify for a mortgage.

On top of that, many young people don’t even want to think about taking on more debt, even if they could afford it.

“There are definitely a group of consumers that haven’t even tried to apply for a mortgage or figure out what they can afford because of the anxiety of their student-loan debt hanging over them,” says Betsy Mayotte, director of consumer outreach and compliance for the Center for Consumer Advocacy at American Student Assistance, a nonprofit focused on helping students make better decisions about higher education and student debt.

Journal Report

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The new programs, and some that have been in place for years, can help. But Mark Kantrowitz, the publisher of Cappex.com, a college and scholarship search site, warns that they’re not right for everyone. In many cases, these initiatives help borrowers who are at the edge of affordability, which means they should probably think twice before taking on a mortgage, he says. “I know it’s the American dream that everybody wants to own a house,” he says, “but it’s going to tie you down both physically and financially” and for some people “it doesn’t make good financial sense to take on so much debt.”

With that caution in mind, here’s a look at some of the programs that are available.

Fannie Mae policies

Fannie Mae announced new policies in April aimed at helping student-loan borrowers manage their debt and, in some cases, qualify for a mortgage.

“Without a doubt, when we asked our lenders where are you facing challenges with providing access to credit, the answer we always get back is people with student debt,” says Jonathan Lawless, vice president for product development and affordable housing at Fannie Mae.

The first initiative helps borrowers who already own a home to convert their student debt into housing debt that carries a lower interest rate. Borrowers can refinance their mortgage through lenders backed by Fannie Mae to pull some equity out of their home to pay off student loans. The rate on the refinancing is lower than what is typically available, Fannie Mae says, in part because borrowers don’t have to pay the additional fees that lenders usually charge for such so-called cash-out refinancings.

Anyone can take advantage of this program, even if they don’t have student loans, as long as they’re using the money to pay down student debt. For example, a parent, grandparent or even a stranger could pull equity out of their home to pay down someone else’s student loans.

Parent and grandparent assistance is rewarded in other ways, too, through Fannie Mae’s new initiatives. The agency will no longer consider student loans, credit-card debt or car loans paid by someone other than the student over the past 12 months in the debt-to-income ratio of a borrower looking to qualify for a mortgage.

Finally, a change that has the potential to affect a large and likely growing group of borrowers allows lenders to change the way they calculate consumers’ debt-to-income ratios. Previously, lenders backed by Fannie Mae were required to assume mortgage applicants’ monthly student-loan payments were at least 1% of their loan balance. Now, lenders can consider borrowers’ actual student-loan payments—which may be lower than 1% of the balance in many cases because of the rapid growth in the use of programs that allow people with federal student loans to make payments based on their income, rather than the standard 10-year repayment plan.

Borrowers looking to swap their student debt for mortgage debt should shop around first, Mr. Kantrowitz says. If borrowers with federal student loans pay off that debt with a mortgage refinancing, they will be giving up protections guaranteed by the government such as the ability to pay off the debt according to income and to pause payments in times of economic distress. What’s more, their home suddenly becomes collateral for the debt and can be taken away in the event of default. If borrowers are looking for a better interest rate than they have on their student loans and are willing to give up protections offered through the federal student-loan program, they may want to consider a private lender that refinances student loans instead, Mr. Kantrowitz says.

Maryland’s SmartBuy

The Maryland Department of Housing and Community Development launched its Maryland SmartBuy program last fall. Through the program, the state provides a second mortgage up to 15% of a home’s purchase price in the form of a zero-interest mortgage loan, with no monthly payments, to be put toward paying off the buyer’s student debt.

To qualify, borrowers must have at least $1,000 in student debt, be current on their student-loan payments and be able to pay off the debt entirely at the time of the home purchase. Borrowers also need to be able to afford to put down 5% of the home’s purchase price, and the home must be one of the state-owned properties reserved for the program.

The state forgives 20% of the mortgage loan each year the buyer remains in the home. That means buyers who stay in a home for five years have their student debt wiped out at no cost.

As of June 7, 22 homes are either under contract or have sold through the program, officials say.

Mark Kantrowitz of Cappex.com says, in many cases, the initiatives help borrowers who are at the edge of affordability, so they should think twice before taking on a mortgage. Photo: iStockphoto/Getty Images

By the time Eric Harris stumbled upon a listing for a SmartBuy house in November, he had already been looking for a house for five months and was struggling to close a deal in a competitive market where buyers would make all-cash offers in some cases. “There’s no way I can compete with that,” says Mr. Harris.

But because the eligibility requirements for the SmartBuy program narrowed the competition, he was quickly able to secure the home. “This program really made it easy for me to go in there and not have to worry about several other different offers and contracts potentially beating mine out,” he says. Mr. Harris, a 25-year-old web developer, paid off $6,398 in student debt through the program.

Craig Renner, the special program administrator for SmartBuy, says it is an economic-development opportunity for the state. “It helps protect and foster property values in a given neighborhood” and it “helps make Maryland an attractive place for millennials to come start families and start businesses.”

New York’s Graduate to Homeownership

New York last month launched its Graduate to Homeownership program, which offers subsidized mortgages and up to $15,000 in down-payment assistance to recent graduates who buy homes in one of several upstate cities that are part of a statewide downtown-revitalization program.

To qualify, potential home buyers need to have graduated with an associate’s, bachelor’s, master’s or doctoral degree within the past 48 months, have good credit and be steadily employed. The program also has income and home-price limits.

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The program, which is administered by the State of New York Mortgage Agency, builds on other efforts by the state to support college students and recent graduates, like the tuition-free program for some students at the state’s public colleges, signed into law earlier this year, says RuthAnne Visnauskas, commissioner of New York State Homes and Community Renewal. It also serves to boost the communities and businesses in the areas where young people are encouraged to buy homes, she says.

“We want to keep all these smart kids that are coming out of New York state colleges and universities in New York,” says Ms. Visnauskas.

Ohio’s Grants for Grads

Ohio has a more established program. The Ohio Housing Finance Agency launched an initiative in 2009 called Grants for Grads, which provides down-payment assistance and a discounted mortgage interest rate to recent college graduates who purchase homes in the state.

To qualify, prospective buyers need to be a first-time home buyer, have graduated with an associate’s, bachelor’s, master’s, doctoral or other postgraduate degree from an accredited college or university within the past two years and have a credit score of at least 640. The program also has income and home-price limits that vary by region. For example, residents looking to purchase a home in Franklin County, where Columbus is located, can’t have an income of more than $83,000 for a family of one or two people and can’t buy a home that costs more than $365,000, says Molly Moses, the finance agency’s director of communications and marketing.

These kinds of programs can help young adults get over the perception that they’re not homebuying material, says Ms. Moses. “We think that a lot of people in this demographic may shy away from home buying or think it’s not a possibility because they’ve got so much of that debt and the payments are so high that they can’t even save for a down payment,” she says. “Homeownership is not even on their radar.”

It appears the program is helping address that problem. People used it to buy 408 homes in 2016, up from 159 in 2010. “We want people to understand that homeownership is not just for the elite or the wealthy,” Ms. Moses says.

Ms. Berman is a reporter for MarketWatch. She can be reached at jberman@marketwatch.com.

Appeared in the June 12, 2017, print edition.

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