enRICHed: Volume 26

Written By Rich BFF

Day Light Savings

As a reminder, we lost an hour of sleep last night, so make sure you fix all of your clocks! We say that as millennials whose parents used to have to go to every clock from their oven to their car to change the time - but we’re pretty sure nowadays, everything is programmed to do that for us, so this reminder may be unnecessary?

Anywho - we got an email from a BFF who asked to learn more about the newsletter team. So, in two weeks we are going to do an Intro email that will help you get to know the faces behind the operation each Sunday. If you have any questions, please reply to this email and we’ll see what we can answer!

A few administrative reminders below:

  • HYCU, pronounced ‘haiku’: how the news impacts you and your wallet, aka How You Can Use

  • Spilling the Prosperitea 🫖 : our hot tips for you on all things money. Think discount codes, hacks, non-boring finance articles, sales, etc. 

Now that you’re up to speed, let’s get you enRICHed.

JetBlue X Spirit

  • JetBlue was planning to pay $3.8 billion to acquire Spirit Airlines, the airline we all know for its very low prices. However, the DOJ said nope - filing an antitrust lawsuit to block the takeover.

  • JetBlue sits just outside the “big 4” as the fifth largest domestic airline, behind United, Delta, American, and Southwest. This push to acquire Spirit seems like an attempt to challenge the major leagues.

  • However, the DOJ believes that this acquisition would take away options for Americans looking to buy more affordable flights, and would frustrate them even more after this past year’s crazy prices and seemingly infinite cancellations.

  • HYCU; while the stock market is unhappy, the DOJ has your back here. This acquisition in particular would target a low cost carrier that some people rely on in order to fly. The lawsuit to block it from happening would keep those options open.

Americans Love Wellness

  • Research from McKinsey came out showing that “wellness” has become a key priority for American consumers. McKinsey’s wellness category contains buckets for health, appearance, sleep, fitness, mindfulness and nutrition.

  • Last year, spend in these categories was more than $450 billion. Newer categories like digestive and gut health have been driving that spending - which have been trending in our TikTok feeds, coincidence or not?

  • This research shows that the wellness space is big, but only continues to grow. What is deemed wellness can truly come down to messaging.

  • HYCU; wellness is tricky. Obviously we want everyone to prioritize their health, but be careful of the line between health and obsession. We always recommend trying to find what works for you and your body, rather than following wellness trends that seem to change monthly. Wellness purchases should be made for you to feel better, not for you to look like whoever is trying to sell you the product!

Silicon Valley Bank Collapse

  • On Friday, Twitter was blowing up about a seemingly random bank in California. Turns out, it was a pretty freaking big deal. Silicon Valley Bank (SVB), the bank that tech startups turn to for all of their needs, collapsed in the largest bank failure since the financial crisis in 2008.

  • It’s a long story, but mirrors a classic “run on a bank.” As we have covered in previous newsletters, the Fed has been raising interest rates to keep inflation in check. The higher interest rates tanked the value of the bonds where SVB was keeping all of its money. So the $21B in bonds that SVB was holding was yielding 1.79% while current rates are at 3.9%. So if SVB tried to sell those bonds, they would have to sell them for a loss.

  • News of this came out on Wednesday, and, in a panic, clients tried to withdraw their money. SVB’s stock plummeted, and the bank was seized by the government on Friday. The fallout of all of this is yet to be determined.

  • HYCU; if you want to learn more, we recommend you read some articles in full (Axios, CNN, NYTimes, and Tech Crunch). This story has a lot of financial nuance and lingo that can make it hard to understand fully without sitting down to take it all in!

Student Loan Update

  • The Supreme Court is currently deciding on whether or not Biden’s plan to wipe student debt is constitutional. Leaving thousands of Americans in limbo.

  • The original program that was announced last summer could cancel up to $20K in student debt for some Americans. However, after the plan was challenged in November by a judge in Texas, it has been on hold.

  • HYCU; while the conservative justices seem skeptical, the public still awaits the Court’s decision, which could be extremely consequential for Americans who were relying on this break.

Credit Card Perks

  • Credit card debt is at historic levels, almost $1 trillion, but Americans are still opening new credit cards. One reason? They are being lured in by perks.

  • The thought process is that if you are spending during a time of high prices anyways, you might as well get the travel points, cash back and other perks offered by card issuers.

  • Companies have been partnering up to give credit card holders incentive to use only their platform, like Doordash and Lyft partnering with Chase. 10x points to use Lyft over Uber makes it a pretty easy choice when both rides are expensive either way.

  • HYCU; similar to unlimited PTO, perks that seem to benefit you always benefit the issuer as well. Loyalty is key for companies who face daily competition, and credit card partnerships can help them acquire dependable customers. But perks don’t help if you aren’t paying off your balance, so prioritize lower interest rates over perks.

Rich BFF
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