Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! Yesterday was a mixed day. The crypto market continued to remain stagnant and the stock market moved in a zig-zag manner.

Today we cover:

• The changing housing market

• Stablecoins continue to create waves

• How to save income tax money - Part IV

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📊 Economy and  News

The housing market is changing

A lot has changed in the real estate industry:

• Home supply hit a new low 💀

• Sales fell in July 😑

• Yet prices went up 👍

Existing home sales fell 2.2% in July, hitting a six month-low due to more homeowners choosing to keep their homes as they’re locked in cheap mortgages. Moreover, sales are down 16.6% compared to July 2022.

"Two factors are driving current sales activity - inventory availability and mortgage rates," said Lawrence Yun, the NAR's chief economist. "Unfortunately, both have been unfavorable to buyers."

This has resulted in a shortage of homes, which is causing the prices to increase. Housing prices jumped 1.9% in July reaching a median price of $406,700. Condos were the largest contributor, increasing 4.5%, more than double when compared to single-family homes that increased 1.6% YOY.

Quick hits:

• Meta Threads is now available for desktop users.

• Conversion news sends AMC shares down.

• IBM prepares to sell weather business - weather.com.

📈 Stocks

S&P 500 4,387.65 (-0.28%)
DJIA 34,288.97 (-0.51%)
NASDAQ 14,908.96 (-0.19%)
VIX 1716 (0.18%)
* Prices as of Aug 23rd, 12:20 AM UTC

It’s a bumpy ride

The S&P500 started on a positive note with +15 points; however, it couldn't sustain the momentum and closed in the negative territory. Nvidia was one of the biggest surprises of the day. The stock started the day strong (+$10) but ended up losing $13 to close at $456.68.

Investors appear cautious due to the yield hitting new highs and the upcoming speech by Fed Chair, Jerome Powell. Also, declines in bank and retail played a key role in keeping the market low yesterday.

Dick’s Sporting Goods and Macy’s were some of the biggest losers, shedding 24% and 13%, respectively.

Why? Dicks was down over concerns over a rise in theft at their stores, resulting in margins dropping from 36% to 34%.

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🔐 Crypto

Bitcoin $25,765.50 (-1.37%)
Ethereum $1,626.90 (-2.42%)
Total market cap $1.04 (-1.57%)
* Prices as of Aug 23rd, 12:20 AM UTC

Coinbase buys a minority share in stablecoin firm Circle

The stablecoin industry is making giant strides and the latest company to make a move is Coinbase. Now worth nearly $138.4 billion, the stablecoin market saw PayPal launch their stablecoin two weeks ago and now Coinbase has bought a stake in stablecoin firm Circle, the issuer of the USDC stablecoin.

The two companies also announced the closing of the Center Consortium, a USDC governance organization that they started together. This means Circle will bring the stablecoin fully in-house.

Moreover, half a dozen new blockchains will receive native support for the stablecoin, which will bring the total number of supported blockchains to 15. Though not yet confirmed, names such as Cosmos and Near are expected to be included.

💵 Personal Finance

Do this to save income tax money - Part IV

We talked about ‘municipal bonds’ in the previous newsletter, today we’ll talk about saving income tax money by maxing out your retirement accounts and employee benefits.

(If you’re not in the U.S. many countries have similar programs so be sure to look them up.)

First of all, let's be clear. Maxing out a retirement account may not be the best option for everyone, but if you are looking to save tax money then it can be a good option.

So, what does it mean to max out?

Maxing out refers to matching your employer's maximum contribution match while continuing to contribute as much as you are allowed to. These limits keep changing every year and currently stand at $22,500. The amount goes up to $30,000 for people above the age of 50.

How does it impact taxes?

The amount that you contribute is tax deductible, i.e. reduced from your taxable income. This applies to a variety of retirement accounts, including 401(k) and 403(b) plans.

Let’s calculate it now:

• A 44 year old worker who makes $100,000 this year and contributes the maximum amount (%22,500) to their retirement account will only be taxed on $77,500.

• On the other hand, a 55 year old worker can contribute an additional $7,500 for a total of $30,000. This brings their total taxable income to $70,000.

The latter will pay even less taxes based on the above calculation.

What if I do not have a retirement plan?

Don’t worry if you do not have a retirement plan, other options are also available. You can contribute up to $6,500 to a traditional individual retirement account (IRA) to enjoy a tax break. This goes to $7,500 for people above 50.

Interested in knowing more about maximizing your retirement accounts? Check this video:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.