Investing

Nearly all Americans are concerned about the current state of the economy.
Still, many continue to spend more and save less.
“Doom spending” may be one way to cope with stress as economic fears mount, however, it comes at the expense of your financial well-being.

Black Friday shoppers leave the Nike store as other shoppers wait in line to shop as retailers compete to attract shoppers and try to maintain margins on Black Friday, one of the busiest shopping days of the year, at Woodbury Common Premium Outlets in Central Valley, New York, U.S. November 24, 2023. 
Vincent Alban | Reuters

Consumer spending has remained remarkably resilient in the face of some stiff economic headwinds.
Nearly all Americans, 96%, are concerned about the current state of the economy, according to a recent report by Intuit Credit Karma.

Still, more than a quarter are “doom spending,” or spending money despite economic and geopolitical concerns, the report found.
Even as inflation and high interest rates have squeezed budgets, a record 200 million shoppers turned out between Black Friday and Cyber Monday, according to the National Retail Federation. This season, holiday spending is expected to reach record levels, totaling up to $966.6 billion, the NRF projects.
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“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial wellbeing,” said Courtney Alev, Credit Karma’s consumer financial advocate.
Even as credit card debt tops $1 trillion, Gen Z and millennials are particularly susceptible to this mindset, other reports show.

Rather than cut expenses, 73% of Gen Zers say they would rather live in the moment, a recent Prosperity Index study by Intuit found. 
High inflation has made it particularly hard for those just starting out. More than half, or 53%, of Gen Zers said the increased cost of living is a barrier to their financial success, according to a separate survey from Bank of America.

“Younger adults feel discouraged,” said Ted Rossman, senior industry analyst at Bankrate.
However, “one thing that young adults have working for them is the advantage of time,” he added. “Every dollar you set aside will compound.” Gen Z workers are the biggest cohort of nonsavers, Bankrate also found. 
At the very least, strike a balance, Rossman advised. Automate a portion of your income toward savings and build some fun into the budget, he said. “At least then you are not paying 20% credit card interest.”
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Scammers are taking advantage of the frustrating and confusing time for student loan borrowers.
You should never pay someone over the phone offering services to avoid repayment, lower your payments or get your loans forgiven.
Here’s what consumers should look out for.

Antonioguillem | Istock | Getty Images

It has been a frustrating and confusing time for many student loan borrowers.
President Joe Biden promised millions of Americans up to $20,000 in debt forgiveness, but then the Supreme Court blocked the program, and the relief never came. As payments restarted in October after a three-year break, borrowers were often given confusing or insufficient information on their accounts.

That has presented opportunities to scammers.
“When borrowers have difficulty reaching their loan servicers or are disappointed by the lack of loan forgiveness, they look elsewhere for help,” said higher education expert Mark Kantrowitz. “Student loan scams fill the gap.”
More from Personal Finance:Can money buy happiness? 60% of adults say yesThe ‘radically different’ wage growth forecast in 2024Cooling job market no reason for panic yet, economists say
Ari Lazarus, consumer education specialist at the Federal Trade Commission, wrote in a recent consumer alert that “scammers might try and tell you they can help you avoid repayment, lower your payments, or get your loans forgiven — for a price.”
You should never pay someone over the phone offering these “services,” experts say. At StudentAid.gov/repay, you can apply for different repayment plans, forgiveness programs and payment pause options for free.

“It isn’t rocket science and takes just a few minutes,” Kantrowitz said.
If a borrower is struggling to get through to their servicer, they can likely get their questions answered on the company’s website or at StudentAid.gov, he added.

Student loan scam warning signs

If you’re being pressured to pay an upfront fee to get help with your student loans, it is likely a scam, according to the Consumer Financial Protection Bureau. In many cases, these requests are illegal.
Promises for immediate student loan forgiveness are also likely scams, experts say. Although the government has programs that lead to debt cancellation, they take years to complete.
Communication about the Biden administration’s new student loan forgiveness plan will come directly from the U.S. Department of Education and your student loan servicer. You can find the list of companies the government works with on student debt here.
If someone promises you that they can remove your debts from your credit report, it may also be a scam, the CFPB says. If you legally hold a debt, it will remain on your reports.
Scammers may also demand that you sign a “third-party authorization” or “power of attorney.” These written agreements grant a person or company legal permission to talk directly to your student loan servicer and make decisions for you.
“Beware of any company that cuts off communication between you and your servicer,” the CFPB says.

Some scammers may falsely claim to be affiliated with the Department of Education or your servicer. Borrowers should be extra careful that they’re actually speaking to someone at their servicer and might want to ask to call their lender back directly if they’re having doubts.
Meanwhile, emails with the Department of Education should have “.gov” in their addresses.
Borrowers should never give their FSA ID to anyone, the CFPB says. It notes that the government or your servicer will never ask for that information.
If you’ve been scammed or suspect someone of trying to scam you, StudentAid.gov has a list of different ways to report it.Don’t miss these stories from CNBC PRO: More

Charlie Munger at his book signing event Katherine Graham at Borsheim’s Jewelry store.
Mark Peterson | Getty Images

Becoming a titan of business does not require giving up your personality or humor, as Charlie Munger proved repeatedly in his long and successful life.
Munger, who died Tuesday at the age of 99, leaves behind not just an illustrious career as an investor but also a string of jokes and stories that entertained Berkshire Hathaway watchers for decades.

Many of the quotes below come from annual meetings of Berkshire Hathaway and are chronicled in CNBC’s Warren Buffett archive. Those events — sometimes called “Woodstock for Capitalists” — allowed Berkshire shareholders to ask Buffett and Munger questions about the company. They also gave the investing titans a chance to share wisdom and jokes, often at their own expense.
Here’s a collection of some of Munger’s funniest quotes and life advice, starting with his musings on aging and the proper goals for your own funeral.

2017:

“What you don’t want to be is like the man who, when they had his funeral, the minister said ‘now’s the time for someone to say something nice about the deceased.’ And nobody came forward. And nobody came forward. He said ‘surely somebody can say something nice to say about the deceased.’ And nobody came forward. And finally one man came up and said, ‘Well, his brother was worse.'”

“Sometimes when I am especially wistful, I think ‘Oh, to be 90 again.'”

Munger was an active commentator on different investing topics until the end, including more modern topics like cryptocurrencies and artificial intelligence. But some of his sayings fell somewhere between the categories of general business and personal life advice.

2000:

“If you mix the mathematics of the chain letter or the Ponzi scheme with some legitimate development like the development of the internet, you are mixing something which is wretched or irrational or has bad consequences with something that has very good consequences. But you know, if you mix raisins with turds, they’re still turds.”

2004:

“You particularly want to avoid evil or seriously irrational people, particularly if they are attractive members of the opposite sex. That can lead to a lot of trouble.”

Munger, who was a practicing attorney and hedge fund manager before joining Buffett at Berkshire Hathaway, was often self-deprecating when discussing his professional success.

2014:

“Competency is a relative concept. … What I needed to get ahead was to compete against idiots. And luckily there’s a large supply.”

2015:

“Warren, if people weren’t so often wrong we wouldn’t be so rich.”

2017:

“I did not intend to get rich. I wanted to get independent. I just overshot.”

Given his longevity and success, Munger was often asked questions about how to live a happy and fulfilling life, regardless of professional success. Over the years, Munger showed the ability to answer that question both sincerely and with a streak of humor.

2017:

“Life is more than being shrewd at passive wealth accumulation.”

2019:

“You don’t have a lot of envy, you don’t have a lot of resentment, you don’t overspend your income, you stay cheerful in spite of your troubles. You deal with reliable people and you do what you’re supposed to do. And all these simple rules work so well to make your life better. And they’re so trite.”

2021:

“The first rule of a happy life is low expectations.”

2011:

“That’s the way I got married. My wife lowered her expectations.”

The specter of death or illness did not take away his humor, as shown after Buffett was diagnosed with prostate cancer.

2012:

“I probably have more prostate cancer than he does. I don’t know because I don’t let them test for it.”

Munger’s good humor carried on into the final year of his life. In one of his final public appearances at the 2023 Daily Journal shareholder meeting, Munger reflected on aging with his typical mix of practical advice and sharp wit.

“I’m eating this good peanut brittle. That’s what you ought to do if you want to live to be 99. I hate to advertise my own product, but this is the key to longevity.”

“So far, I’ve had plenty of decline, but I’m pretty shrewd about the way I handle it. And so far the results have not been that bad in my old age. Now, my sex life would be a different subject.”

“I step out of my bed these days and then sit down in my wheelchair. So I am paying some price for old age. But I prefer it to being dead. And whenever I feel sad about being in a wheelchair, I think well you know, Roosevelt ran the whole damn country for 12 years in a wheelchair. So I’m just trying to make this wheelchair thing last as long as Roosevelt did.” More

Known for his quick wit and his role in Berkshire Hathaway’s success, Charlie Munger’s legacy reverberated throughout the investing world.
Mario Gabelli said “a titan has passed …all will miss Charlie.”
Mohamed El-Erian, chief economic advisor of Allianz, spoke about the uniquely powerful relationship between Munger and Warren Buffett.

JOHANNES EISELE | AFP | Getty Images

Several investors mourned the passing of famed investor Charlie Munger, vice chairman of Warren Buffett’s Berkshire Hathaway, on Tuesday. Known for his quick wit and his role in the firm’s success, Munger’s legacy reverberated throughout the investing world.
“Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett said in a press release. Buffett once credited Munger as the ideator behind the business approach of Berkshire Hathaway, saying Munger once advised him with a “blueprint” to “buy wonderful businesses at fair prices” rather than vice versa.

Ariel Investments’ Charles Bobrinskoy called Munger a “true master of investing” on CNBC’s “Closing Bell: Overtime” shortly after the news was released. “He was a really important voice in value investing and all investing,” he added.
Mohamed El-Erian, chief economic advisor of Allianz and former chief executive officer of PIMCO, spoke about the uniqely powerful relationship between Munger and Buffett in a statement Tuesday evening.
“So sad to hear the news of the passing of Charlie Munger,” El-Erian wrote. “For so many decades, the two of them led an investment powerhouse that substantially improved so many people’s lives … and, in the process, they repeatedly showcased the prowess of collaboration, synergies, and common sense.”
Mario Gabelli, chairman and CEO of Connecticut-based GAMCO Investors, wrote on Twitter: “Charlie Munger ….a titan has passed …all will miss Charlie.”
In addition, Apple CEO Tim Cook called Munger a “titan of business and keen observer of the world around him.” Berkshire first made an investment in Apple in 2016, and is one of its largest shareholders. But in the past, Munger said he wished Berkshire bought Apple shares more aggressively.

“Charlie Munger helped build an American institution, and through his wisdom and insights, inspired a generation of leaders. He will be sorely missed,” Cook wrote. “Rest in peace Charlie.”
Investors familiar with Munger also released words on his passing. Munger peacefully died Tuesday morning at a California hospital, according to the Berkshire Hathaway press release.
Stephanie Link, chief investment strategist at Hightower Advisors, described Munger as “full of life” and said the famed investor “taught us a ton over the years.”
Some of those lessons went beyond investing, and were part of the reason why hundreds of investors flocked to the Berkshire Hathaway annual meeting each year. Value investor Whitney Tilson counts himself among them.
“He was always telling stories of how people who had it all brought themselves to ruin, [and] that really made a big impact on my life,” Tilson, research editor at Stansberry, told CNBC.
“Charlie Munger was a brilliant attorney,” Annandale Capital chairman George Seay said Tuesday evening on Yahoo Finance. “He wasn’t just a great investor with Buffett. He was a very accomplished attorney. He was kind of a renaissance man. He was good at a lot of things.”
Munger’s passions went beyond investing. He worked as a real estate attorney and was publisher of the Daily Journal. He also dabbled in architecture, was a philanthropist and served on the Costco board.
Wesley Chan, co-founder and managing partner of venture capital firm FPV, wrote in a LinkedIn post on Tuesday evening celebrating Munger’s life.
“In Charlie, I find solace that in avoiding the mistakes others make out of misaligned incentives, greed, hysteria, or peer pressure, you’re usually going against the grain,” Chan said. “It’s something that I take to heart as an investor and as a friend of many founders, who have their own lonely journeys as well.”
—CNBC’s Christina Cheddar Berk, Brian Evans and Alex Harring contributed to this report. More

Charlie Munger wasn’t just the vice chairman of Berkshire Hathaway: His partnership with billionaire Warren Buffett made him half of an iconic duo in the investing world.
Watch the special lookback at Munger’s life by CNBC’s Becky Quick above.

“I would say that every time I’m with Charlie, I’ve got at least some new slant on an idea that causes me to rethink certain things,” Buffett once told Quick in an interview. “And we’ve had absolutely… so much fun with the partnership over the years.”
Munger, who died Tuesday at age 99, had helped broaden the Oracle of Omaha’s focus on the search for high-quality, undervalued names – a hallmark of their value investing style.
See CNBC’s full obituary of Charlie Munger here. More

Year-end Planning

The IRS delayed a tax reporting change for third-party payment apps such as Venmo, PayPal and Ticketmaster.
However, you may still owe taxes if you made a profit on resold Taylor Swift tickets, experts say.

Taylor Swift singing at The Eras Tour.
Buda Mendes/tas23 | Getty Images Entertainment | Getty Images

Last week, the IRS delayed a tax reporting change for third-party payment apps such as Venmo, PayPal and Ticketmaster. However, you may still owe taxes if you made a profit on resold Taylor Swift tickets, experts say.
For 2023, you won’t receive Form 1099-K without more than 200 transactions exceeding $20,000. The IRS will phase in a lower threshold for 2024 with a $5,000 limit, applying to tax returns filed in 2025.

While third-party payment apps won’t report as many business transactions to the agency this year, you are still required to pay taxes on profits, including resold concert tickets.

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

“The big thing this past year was selling Taylor Swift concert tickets,” said certified financial planner Tommy Lucas, an enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “If you only pay $1,000 and you resold them for $3,000, now you have a $2,000 gain. You need to report the taxes.”
As a renowned song by Swift goes, “Are you ready for it?”

‘If you want to follow the law … report it’

Ticket profits have always been taxable, and this may affect those who resold Taylor Swift concert tickets this summer.
Swift fans paid an average $2,183 for a resold ticket to a concert on the superstar’s The Eras Tour, according to resale research site TicketIQ.

Meanwhile, the average ticket price for Swift’s tour was $253.56, according to Pollstar. Depending on the section and additional fees, face value tickets typically ranged between $49 and $499.
“If you make income of any kind, whether you do a side job for someone else or make a gain selling tickets or collectibles, it is taxable income even if it is not reported to the IRS,” Lucas said.

Even if you don’t exceed the $20,000 threshold for sold items or services, you still have a duty to report the transaction.
“If you want to follow the law, you still got to report it, even if a third party is not,” Lucas said.

Prepare now to report ticket profits at tax time

Here are ways taxpayers can prepare:
1. Make sure you have accurate records: Regardless of the scenario, you really need to keep good and accurate records, said James Guarino, managing director at Baker Newman Noyes in Boston. “If you don’t have good records, it’s really hard to accurately report,” said Guarino. Keep copies of your purchase receipts for goods you later resell, such as those Taylor Swift tickets, since tax liability will be based on your sales proceeds minus the original purchase price.
2. Keep track of sales transactions: As people engage in numerous Venmo and PayPal transactions, it will be paramount to keep track of them, experts say. If you sold goods or services this year, do not close the accounts used for those transactions, added certified public accountant Albert Campo, managing and founding partner of New Jersey-based AJC Accounting Services. It will make record keeping much more difficult, he said.
3. Plan for your taxes: If you’re expecting to owe taxes, setting aside money or making quarterly estimated tax payments is “absolutely a smart thing to do,” since you may not be withholding enough through your paycheck at work, Lucas previously told CNBC.
4. Consider a separate bank account: It may be helpful to consider opening a second bank account for “extraneous activity” or business transactions, said Guarino.

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Around 813,000 student loan borrowers will receive an email from President Joe Biden notifying them that their debt has been forgiven because of his actions, the White House said.
Though Biden’s plans to cancel up to $400 billion in student debt for tens of millions of Americans were foiled at the Supreme Court, he has managed to erase $127 billion in student debt so far for more than 3.5 million borrowers — more than any other president in history.

U.S. President Joe Biden speaks about administration plans to forgive federal student loan debt during remarks in the Roosevelt Room at the White House in Washington, U.S., August 24, 2022.
Leah Millis | Reuters

Around 813,000 student loan borrowers will soon receive an email from President Joe Biden notifying them that their debt has been forgiven because of his actions, the White House said Tuesday.
Many borrowers who will get the email likely already knew about the loan cancellation and may have already received that relief. The message directly from the president, less than a year ahead of the 2024 presidential election, makes it clear who was responsible for the relief.

“Congratulations — your student loan has been forgiven because of actions my administration took to make sure you receive the relief you earned and deserve,” the email reads.
Biden has erased $127 billion in student debt so far for more than 3.5 million borrowers — more than any other president in history.

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Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

The Biden administration used existing programs, including Public Service Loan Forgiveness and income-driven repayment plans, to deliver the debt cancellation. Previously, the relief under these programs was hard to access.
“The president is committed to fighting for hardworking American families, making sure we get them a little more breathing room, and allowing them to support themselves and their families,” a White House official said on Tuesday.
Biden’s plan to cancel up to $400 billion in student debt for tens of millions of Americans was rejected at the Supreme Court in June.

Republican nominees for president oppose student loan forgiveness.
Former New Jersey Gov. Chris Christie has said that Biden didn’t have the authority to cancel student debt without prior authorization from Congress.
“He knows he’s done something that is illegal and over the top,” Christie said on ABC’s “This Week” in 2022, shortly after Biden announced his broad forgiveness plan.

Former President Donald Trump sided with the Supreme Court.
“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said at a campaign event in June.
Florida Gov. Ron DeSantis has said that it’s wrong to saddle taxpayers with the expense of student loan forgiveness.
“Why should a truck driver have to pay for somebody that got a degree in zombie studies?” DeSantis said at an Iowa event in early August. “It doesn’t make sense.”
Voters support forgiving at least some student loan debt by a 2-to-1 margin, according to a Politico/Morning Consult poll. Less than a third oppose the policy. More

Year-end Planning

If you’re planning to donate to charity on Giving Tuesday, it can be tricky to claim a deduction on your taxes.
Since 2018, a higher standard deduction has made it harder to claim a tax break for charitable donations.
However, there are some strategies to maximize your tax break, experts say.

Getty Images

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Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

When filing your taxes, you claim the larger of the standard deduction or your total itemized deductions. The latter category can include charitable and medical deductions, state and local taxes and more.
In 2018, the Tax Cuts and Jobs Act nearly doubled the standard deduction, slashing the number of filers who itemized. For 2023, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly.
Given these constraints, here are the most tax-friendly charitable giving strategies to consider, according to financial experts.

1. Qualified charitable distributions

If you’re age 70½ or older with savings in a pre-tax individual retirement account, you should consider so-called qualified charitable distributions, or QCDs, “before anything else,” said Juan Ros, a certified financial planner at Forum Financial Management in Thousand Oaks, California.

QCDs are direct transfers from an IRA to an eligible nonprofit organization, with a $100,000 limit per individual for 2023. (Starting in 2024, the limit adjusts for inflation.) 
While there’s no charitable deduction, the IRA distribution won’t add to your adjusted gross income and QCDs reduce your IRA balance over time. QCDs can also satisfy required minimum distributions if you’re age 73 or older.  

QCDs are a great way to give to charity, especially for those with large IRAs and in a higher marginal tax bracket.

Michael Maye
Owner of MJM Financial Advisors

“QCDs are a great way to give to charity, especially for those with large IRAs and in a higher marginal tax bracket,” said CFP Michael Maye, owner of MJM Financial Advisors in Gillette, New Jersey. He is also a certified public accountant.

2. Donor-advised funds

Another option, donor-advised funds, are a “great vehicle” for gifts when paired with profitable assets, according to Maye.
While donor-advised funds offer an upfront deduction, the fund acts like a charitable checking account, providing flexibility for future gifts.  
Some investors prefer the simplicity of making a single donation to a donor-advised fund, rather than tracking gifts to multiple charities throughout the year, experts say.

3. Give profitable assets

Whether you’re transferring money to a donor-advised fund or giving directly to a charity, experts recommend sending profitable assets, rather than cash.
Here’s why: If you have profitable assets in a brokerage account, you can give those investments to bypass the capital gains taxes you’d otherwise owe from selling.
If you owned the assets for more than a year, you can deduct the full market value of donated assets, limited to 30% of your adjusted gross income, Maye explained. But the excess donation “can be carried over to the next five tax years,” he said.

4. Bunching donations

Another way to exceed the higher standard deduction is by bunching donations, which is a popular strategy for donor-advised funds, experts say. Rather than making a gift every year, bunching combines those donations into a single year.
Lumping multiple years of gifts into a donor-advised fund can offer donors “more bang for their buck,” said CFP Mitchell Kraus, owner of Santa Monica, California-based Capital Intelligence Associates. More