★ This Week in #FinancialGossip

Posted June 22, 2017 6:00 am by with 5 comments

financial gossip

This is part of our Financial Gossip series, curated by our friends at Invibed. Every week, they scour the news to bring us the most interesting stories around money. Here are this week’s gems :)

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apple checking grocery store

Amazon’s $13.7 billion purchase of Whole Foods has a lot of people wondering what it all means.

Normally, when an acquisition happens, the acquiring company’s stock price falls. But in this case, Amazon’s stock price quickly rose 3%, adding $14 billion to the company’s valuation. That means Bezos basically bought Whole Foods fo’ free. Why did this happen?

There are a few theories. Some investors are thinking “monopoly!” They believe Amazon is now so big that other retailers just won’t be able to compete. And let’s be real — 30% of all growth in the U.S. retail sector last year came from Amazon. The tech giant sold six times as much online as Walmart, Target, Best Buy, Nordstrom, Home Depot, Macy’s, Kohl’s, and Costco did — combined. Imagine what will happen now that Amazon is a major player in the $700 billion grocery industry.

But other investors don’t think Amazon’s valuation boost is about groceries at all. It’s about distribution. The Wall Street Journal’s financial editor, Dennis Berman, said it best in this tweet: “Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does.”

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5k month apartment

Financial experts say you should be spending 30% or less of pre-tax income for your housing.

But how many of us are following that rule?

A new report by Harvard revealed that 33% of American households are spending more than they can afford on housing. That accounts for renters and homeowners — but the numbers are worse among renters with nearly 50% overspending on housing.

However, this is not just about people having champagne taste and a beer budget. Affordable housing is becoming more and more difficult to find. 1.5 million rental units with leases over $2,000 a month were added to the market between 2005 and 2015 while the number of rentals costing less than $800 per month declined.

The average renter earns $37,900 a year, which means they shouldn’t be spending more than $950 a month on rent. That leaves two options for most of us: rent out of your league or get a roommate.

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yeah bad ass gif

Would a Wonder Man have been paid more money than Wonder Woman? Not necessarily.

When it was revealed that Gal Gadot only received $300,000 for playing Wonder Woman people were ready to scream wage gap, especially alongside speculations that Henry Cavill received $14 million for his role in Superman.

But on top of Gadot being a fairly unknown actress before Dawn of Justice, she actually received exactly the same amount that Chris Evans got for Captain America. And likely the same as Cavill as well.

Plus, it is a known fact that many actors (and actresses) receive ample bonuses based on the film’s box office performance. Since Wonder Woman has already grossed over $570 million worldwide, we’re guessing there’ll be a pretty hefty prize for Gadot — and a sequel with a better contract.

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shocked burger flipper gif

The world of food prep robots has been given some new life and it may be the end of burger-flipping as we know it.

In 2012, Momentum Machines introduced their autonomous grill master, which can cook, assemble and bag burgers at a speed equal to three workers. In burger measurements, that’s 400 per hour.

The fear of robots replacing humans in fast-food restaurants was real before, and $18 million in funding just fueled that fire once again. Momentum Machines secured some serious VC funding to help bring their robot restaurant to life.

With eyes set on San Francisco, California residents can expect to see this concept come to life sooner rather than later. According to a Craigslist ad, they’ll still need humans for payroll and taking out the trash.

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what are you waiting for gif

Uber wants to make some changes and I think we all know why.

The company hasn’t exactly had the best year and with its CEO resigning following a “shareholder revolt,” now might be the best time ever.

In what will undoubtedly be a long list of reputation management maneuvers, Uber is introducing tipping for drivers. In-app tipping has begun testing in Seattle, Minneapolis, and Houston and is set to roll out across the U.S. by the end of July.

While internally Uber has already experienced a lot of movement (more than a dozen execs have left the company so far this year) it will be interesting to see what effects the company’s makeover has on riders and drivers.

Speaking of tips, Lyft just announced its drivers have earned over $250 million in tips to date. Which makes us wonder, is Uber’s 180 Days of Change a few years too late?

 

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For past weeks’ financial gossip, click here.

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[All gifs by Giphy]

Dani Pascarella, CFP® left her job on Wall Street to close the financial gap and create a new model within the personal finance industry. Along with co-founder Korrie Martinez, Dani built Invibed, a fintech company that provides financial education and early stage Wealth Coaching for young professionals. Sign up for their weekly newsletter at subscribe.invibed.com!

5 responses to ★ This Week in #FinancialGossip

  1. Mrs. Picky Pincher June 22nd, 2017 at 9:09 am

    I’m still veeeeery curious to see what Amazon is going to do with Whole Foods. Hopefully that’s good news for us consumers. ;) I do agree that many people are over-paying on housing costs. I hear about people living in high-cost areas, and I can’t believe the costs they’re subjected to just for cramped living spaces. I’m grateful to live in an affordable area of the country.

    Reply

  2. Dani and Korrie June 22nd, 2017 at 4:42 pm

    Yes, we’re all in wait and see mode, but hopefully the acquisition will be a win for consumers! And it’s amazing that you are living in an affordable area. I’m in NYC and it’s SO cramped and expensive–looking online at real estate in other places is now a hobby of mine :)

    Reply

  3. Lily He-Prudhomme June 23rd, 2017 at 5:30 am

    Haha I love these! Those gifs are perfect.

    “It bought 431 upper-income, prime-location distribution nodes for everything it does.” Yes, exactly what I was telling my husband! They’re buying what they can of “the population.” We live in Seattle. It’s going to be really interesting to see what will happen when automation (Amazon’s flagship store) vs $15 (Seattle’s new minimum wage) collide.

    Not to mention Bezo’s Balls (the glass horticulture garden he is building downtown.)

    Reply

    • J. Money June 23rd, 2017 at 6:50 am

      (Almost spit out my coffee on that one!)

      Reply

    • Dani and Korrie June 23rd, 2017 at 8:46 am

      Hahahahaha that is too funny!! Almost spit out our coffee over here too! :)

      Thanks so much, Lily! We totally agree–it’s going to be super interesting to see how the collision of automation vs human labor plays out.

      Reply

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