Top 5 Security Hacks to Defend Your Crypto Wallet!

RWaltz Blockchain Solutions Experts

With a massive number of cryptocurrencies exploding in the market, crypto wallet application adoption is also rising at a faster pace. With the technological revolution, hackers have also fine-tuned their hacking methods and have now grown up smarter to hack your crypto wallets.
Generally, Cryptocurrency Wallet Development Company offers multi-layer security to the crypto applications developed by them. But, still can be prone to hacking attempts.

Hackers are Making a Way into Your Crypto Wallet! 

The initial 7 months of 2022 witnessed $1.9 billion worth of crypto coins being stolen which accounts for 60% more compared to last year. When a user downloads a trojan application on the device, it steals $600,000 worth of Bitcoins from your Crypto Wallet Application. This Android trojan is called Sharkbot which initiates money transactions from your crypto wallets bypassing the security systems. This is just one type of trojan, there are multiple trojans the hackers can attack your Crypto Wallet Application with.

Also, hackers normally try to exploit the interfaces that connect the crypto wallet applications to the backend service that supports them.

Security Hacks You Need to Ponder on for Defending your Crypto Wallets! 

Cold Wallet to be Your Savior! 

The best way to prevent cryptocurrency loss is to store your coins in a cold wallet or hardware wallet. These wallets store your funds offline, thus preventing hackers from accessing your cryptocurrencies online or through traditional methods.

A cold crypto wallet is much like a USB device, holding a private key that is used to access your cryptocurrencies. Storing your private key online will result in hackers easily accessing it and your account will be compromised. This will lead you to lose all your crypto investment. So, it is advisable to store your private key offline.Exchange platform that Keeps Hackers Away!

 Before you choose an exchange platform, make sure you carry out your research thoroughly on the security of the crypto exchange platform. Check online if the crypto exchange platform you are choosing has been compromised in the past or if any wallet on the exchange platform has been hacked. If the crypto exchange platform has been hacked, it depicts poor security protocols, where your crypto wallet or investment in it might be at risk.

Check if the crypto exchange platform is using multi-factor authentication or TLS/ SSL encryption to secure your wallet. In the last, verify if they have any safety measures in place like the transaction limits and notifications on every transfer or even the option to freeze the account and mitigate the damages.If you are looking for a crypto exchange development, here it is! RWaltz Software, Your trusted partner to launch your crypto exchange platform.

Multi-Factor Authentication to Authenticate Your Access!

Multi-Factor Authentication offers a layered defense mechanism by authenticating your wallet with independent credentials like passwords, security tokens, and/ or biometrics.  To set up multi-factor authentication, you can select either SMS or a 2FA application push notification.

Be Aware of Phishing Attacks!

Phishing attackers generally target users by posing as legitimate entities to gain access to your sensitive information. Avoid falling prey to these phishing attacks by making sure you log into the correct crypto exchange platform. Don’t click on the link received over emails, chats, or even text messages.
Save the exchange link or add it to your favorites. Lastly, always verify the details twice before you make crypto transactions.

Don’t forget to Change Your Passwords Regularly!

It is a cyber law, that how much ever tricky password you set, one day it will be compromised. So, the best way to prevent this theft is to set a complex password, store it safely and change it regularly. Make sure you don’t reuse the password or set any personal information as a key.
Instead of saving passwords on google, use password managers. Lastly, make sure your password is updated every six months.

BitcoinVB – Highly Secure Wallet Application by the Industry Leaders!

BitcoinVB is a highly secure wallet application developed by RWaltz for ensuring the secure storing and management of bitcoins.
Click here, to explore the portfolio! If you are looking for a similar wallet application, then RWaltz can be the right choice for you. We are a reliable cryptocurrency wallet development company that offers custom digital wallet app development.

Let’s Wrap Up!

Hopefully, the above article has enlightened your knowledge of digital wallet app security. If you have any queries, feel free to connect with our experts. Hurry up! Schedule a meeting now!

By: RWaltz

Source: Top 5 Security Hacks to Defend Your Crypto Wallet!.

Related contents:Polkadot Crypto DOT No Longer Security: “Token Has Morphed” U.Today

Former BitGo, Curv exec launches new crypto wallet security firm The Block

18:58 Fri, 04 Nov
13:36 Thu, 27 Oct
21:37 Mon, 24 Oct
09:38 Mon, 24 Oct
14:08 Sun, 23 Oct
17:02 Fri, 21 Oct
00:20 Fri, 21 Oct
08:23 Wed, 19 Oct
20:44 Tue, 18 Oct
19:40 Tue, 18 Oct
15:21 Mon, 17 Oct
20:19 Thu, 13 Oct

Marketing Programs To Buy:

10 Bold Actions In Positive Life     https://jvz3.com/c/202927/383942/
3D Pal Toons     https://jvz6.com/c/202927/381689/
4brandcommercial        https://jvz1.com/c/202927/375487
7 Minutes Kit      https://jvz8.com/c/202927/374505/
9 figure Success        https://jvz8.com/c/202927/384653/
Ad Raven      https://jvz4.com/c/202927/382796/
Ada leadz     https://jvz8.com/c/202927/376381
ADABundle   https://jvz3.com/c/202927/382790/
AdRaven       https://jvz3.com/c/202927/382851/
Adsense Machine      https://jvz2.com/c/202927/290487
Adtivate Agency      https://jvz3.com/c/202927/383706/
AdvertSuite     https://jvz1.com/c/202927/335011/
AdzHero     https://jvz2.com/c/202927/366972/
AffiliateMatic     https://jvz3.com/c/202927/381148/
Agency Client Finder    https://jvz3.com/c/202927/384619/
Agencyscale      https://jvz1.com/c/202927/383113/
AgencyScale      https://jvz4.com/c/202927/383111/
AIWA Commercial     https://jvz2.com/c/202927/365061
ALL-in-One HD Stock    https://jvz4.com/c/202927/381560
Animaxime    https://jvz2.com/c/202927/383307/
Appimize      https://jvz8.com/c/202927/370227
Appoint B Agency     https://jvz1.com/c/202927/384630/
Appointomatic      https://jvz6.com/c/202927/374258
Appowls    https://jvz4.com/c/202927/381231/
Art Of Living    https://jvz4.com/c/202927/382425/
Audiencetoolkit     https://jvz6.com/c/202927/302715
Aweber Crash Course     https://jvz6.com/c/202927/383057/
Backlinkindexer    https://jvz6.com/c/202927/88118
BettingMaster      https://jvz2.com/c/202927/387079/
BevTraders    http://www.bevtraders.com/?ref=arminham
Big Audio Club     https://jvz6.com/c/202927/380087/
BigAudio Club    https://jvz2.com/c/202927/380877/
Boost Optimism   https://jvz2.com/c/202927/380692/
BrandElevate   https://jvz4.com/c/202927/381807/
Bybit     https://www.bybit.com/en-US/invite?ref=ALEXP
CanvaKitz    https://jvz4.com/c/202927/379051/
ChatterPal    https://jvz8.com/c/202927/324615
Clientfinda   https://jvz8.com/c/202927/370806
Clipsreel   https://jvz3.com/c/202927/372682
Commission smasher   https://jvz3.com/c/202927/376879
Content Gorilla   https://jvz2.com/c/202927/330783
Content Tool Kit   https://jvz3.com/c/202927/329145/
CourseAlly eLearning   https://jvz4.com/c/202927/384759/
CourseReel   https://jvz2.com/c/202927/355249
Courserious   https://jvz8.com/c/202927/360397/
Coursova   https://jvz1.com/c/202927/376527
Creaitecontent  https://jvz1.com/c/202927/376986
Credit Repair   https://jvz8.com/c/202927/377815/
Cryptokit    https://jvz8.com/c/202927/383809/
CryptoRocket    https://jvz6.com/c/202927/378113/
CryptoUnderworld     https://jvz8.com/c/202927/374345/
Dealcheck     https://dealcheck.io?fp_ref=armin16
DesignaSuite      https://jvz2.com/c/202927/297271
DesignBeast    https://jvz6.com/c/202927/371547
DevelopSelfEmpowerment     https://jvz6.com/c/202927/383094/
DFYContentClub     https://jvz6.com/c/202927/381337/
DFYSuite   https://jvz3.com/c/202927/381194/
Diabetes Guide    https://jvz2.com/c/202927/358870/
Diddly Pay’s    https://jvz2.com/c/202927/315596
Diet fitness diabetes   https://jvz1.com/c/202927/286851
Domainname    https://jvz6.com/c/202927/377005
Dominate Email   https://jvz4.com/c/202927/386980/
Dropshiply   https://jvz3.com/c/202927/383483/
DUX Forex Signals   https://jvz3.com/c/202927/128215/
EBook Agency    https://jvz2.com/c/202927/384573/
Ejaculation Total   https://jvz2.com/c/202927/75989/
Email Monetizer    https://jvz2.com/c/202927/386337/
EngagerMate  https://jvz8.com/c/202927/328172
EngageYard   https://jvz2.com/c/202927/383051/
Explaindio    https://jvz1.com/c/202927/123757/
Extreme Adz   https://jvz8.com/c/202927/379244/
Extreme Coupon  https://jvz1.com/c/202927/216101/
EZ Local Appointment  https://jvz2.com/c/202927/385180/
Ezy  https://jvz1.com/c/202927/381935/
Ezy MultiStores  https://jvzoo.com/c/202927/381935
Facebook Cash Machine   https://jvz4.com/c/202927/382333/
Facedrip  https://jvz1.com/c/202927/376325/
FaceSwap   https://jvz4.com/c/202927/381768/
Fade To Black   https://jvz2.com/c/202927/344541
Fanpage  https://jvz4.com/c/202927/144349
Fitness Nutrition   https://jvz4.com/c/202927/353334/
Followup Builder   https://jvz3.com/c/202927/386313/
Forex Atlatian   https://jvz8.com/c/202927/25069/
Forex Blizz   https://jvz8.com/c/202927/144577/
Forex Blue Stark  https://jvz3.com/c/202927/47481/
Forex expert   https://jvz1.com/c/202927/376877
Forex Hybrid Scalper    https://jvz6.com/c/202927/95037/
Forex Joustar   https://jvz6.com/c/202927/381617/
Forex Mastery   https://jvz2.com/c/202927/144621/
Forex Scouts   https://jvz6.com/c/202927/132677/
forrk  https://jvz1.com/c/202927/373449
FusionMT4    https://jvz2.com/c/202927/372523/
FX Goldminer  https://jvz1.com/c/202927/381439/
Galactic  https://jvz1.com/c/202927/188236/
Gaming job   https://jvz2.com/c/202927/184902  s
Genesis Mining   https://www.genesis-mining.com/a/2535466
Gluten free   https://jvz4.com/c/202927/296191
GMB Magic  https://jvz2.com/c/202927/377194
Graphic Alta  https://jvz2.com/c/202927/324492/
Heal Your Emptiness   https://jvz6.com/c/202927/384848/
High Converting Emails  https://jvz3.com/c/202927/386305/
HostLegends    https://jvz4.com/c/202927/384755/
Hostley Domain Creator   https://jvz1.com/c/202927/379223/
Human Synthesys Studio  https://jvz8.com/c/202927/367353/
ImageX   https://jvz6.com/c/202927/363237/
IMSyndicator  https://jvz1.com/c/202927/370769
Inboxr   https://jvz2.com/c/202927/312692
Insta Keyword    https://jvz6.com/c/202927/351606/
Instant Website   https://jvz2.com/c/202927/377557
InstantWebsiteBundle          https://jvz6.com/c/202927/377557
iTraffic X  https://jvz2.com/c/202927/320466
keysearch  https://jvz3.com/c/202927/194909
KlickCourse   https://jvz3.com/c/202927/385006/
Klippyo Kreators  https://jvz8.com/c/202927/327447
KoinCart   https://jvz2.com/c/202927/383555/
Leadvalet   https://jvz3.com/c/202927/385580/
Levidio Royal Podcasting   https://jvz6.com/c/202927/384025/
Linkable DFY   https://jvz6.com/c/202927/385873/
Linkomatic  https://jvz2.com/c/202927/380937/
LiteTrading   https://www.litefinance.com/?uid=929237543
Live Your Truth  https://jvz6.com/c/202927/379020
Living An Intentional Life    https://jvzoo.com/c/202927/382455
Living an International Life    https://jvz8.com/c/202927/382455/
Local Leader   https://jvz4.com/c/202927/383751/
Local Sites   https://jvz4.com/c/202927/380543/
LocalAgencyBox  https://jvz2.com/c/202927/359468
LocalCentric   https://jvz2.com/c/202927/379339/
LocalioAI    https://jvz6.com/c/202927/378310/
MarketAll      https://jvz2.com/c/202927/386971/
Marketingblocks     https://jvz6.com/c/202927/374934
MarketPresso   https://jvz2.com/c/202927/369837
Massfluence  https://jvz4.com/c/202927/386885/
Mat1 Simple Funnel   https://jvz2.com/c/202927/380197/
Maxslides  https://jvz8.com/c/202927/376842
Mech Forex Robot   https://jvz6.com/c/202927/383447/
MediaCloudPro   https://jvz2.com/c/202927/343635
Megasuite   https://jvz3.com/c/202927/383953/
Mobi First   https://jvz2.com/c/202927/353694/
Motion Kingdom Studio  https://jvz4.com/c/202927/383177/
Movid Animation  https://jvz6.com/c/202927/380385/
MT4Code System   https://jvz2.com/c/202927/376925
My Passive Income   https://jvz1.com/c/202927/384099/
MyMailIt   https://jvz3.com/c/202927/292919
MyTrafficJacker   https://jvz2.com/c/202927/353558
Next Drive  https://jvz4.com/c/202927/371095/
NichBox  https://jvz2.com/c/202927/370705/
Organic Life Guide  https://jvz8.com/c/202927/366872/
Pcommerce   https://jvz6.com/c/202927/372265/
Phemex  https://phemex.com/register-vt1?referralCode=D8HUS2
Photokit  https://jvz4.com/c/202927/373207/
PicsAds   https://jvz2.com/c/202927/385468/
PigMoneyMethod   https://jvz2.com/c/202927/377665/
Pipstock    http://pipstockexchange.com/register?ref=204
Pitchdeck   https://jvz3.com/c/202927/347847/
Pixal  https://jvz2.com/c/202927/378775/
PixaStudio    https://jvz1.com/c/202927/373089/
Pixivid   https://jvz6.com/c/202927/385213/
PlanB Muscle Growth   https://jvz1.com/c/202927/36517/
PlayerNeos   https://jvz2.com/c/202927/376962
Podcast Advantage   https://jvz8.com/c/202927/379995/
Podcast Masterclass  https://jvz3.com/c/202927/379998/
PodKastr    https://jvz1.com/c/202927/369500/
PopLinks    https://jvz2.com/c/202927/368095/
Postradamus     https://jvz6.com/c/202927/108695
Power Reviews    https://jvz8.com/c/202927/384625/
Powrsuite   https://jvz1.com/c/202927/376361
PR Rage  https://jvz4.com/c/202927/343405
prime stocks   https://jvz8.com/c/202927/369164  prime stocks
Profile mate    https://jvz4.com/c/202927/358049
Promovidz   https://jvz8.com/c/202927/375692/
Push Button Traffic   https://jvz2.com/c/202927/301402
QR Verse   https://jvz3.com/c/202927/383865/
Quintex Capital     https://quintexcapital.com/?ref=arminham
Quit Smoking    https://jvz3.com/c/202927/359081/
QuizMatic   https://jvz6.com/c/202927/387116/
Reputor   https://jvz8.com/c/202927/380159/
ReVideo  https://jvzoo.com/c/202927/381761
ReviewReel   https://jvz6.com/c/202927/382663/
Rewriter   https://jvz4.com/c/202927/353373/
RSI SEO   https://jvz6.com/c/202927/384381/
Scriptdio   https://jvz4.com/c/202927/385387/
Seniors Income    https://jvz2.com/c/202927/383888/
Senuke  https://jvz6.com/c/202927/279944
ShopABot   https://jvz2.com/c/202927/291955
ShopFunnels   https://jvz3.com/c/202927/384069/
SocialAgency360   https://jvz1.com/c/202927/385357/
SociCake  https://jvz2.com/c/202927/321987
Socifeed   https://jvz6.com/c/202927/375706
SociJam  https://jvz2.com/c/202927/309649
Soronity  https://jvz6.com/c/202927/368736
SqribbleEbook   https://jvz6.com/c/202927/283867
Stackable Picture   https://jvz1.com/c/202927/385046/
Steven Alvey’s   https://jvz2.com/c/202927/351754
Stoodaio   https://jvz1.com/c/202927/372094
Storymate    https://jvz3.com/c/202927/320972
StreamPilot   https://jvz2.com/c/202927/385431/
Studioninja   https://jvz1.com/c/202927/374965
Sunday Freebie  https://jvz1.com/c/202927/267113/
Super backdrop   https://jvz8.com/c/202927/376524
Survai    https://jvz8.com/c/202927/380933/
Syndranker    https://jvz3.com/c/202927/378143/
Talkingfaces   https://jvz3.com/c/202927/375550
The Internet Marketing   https://jvz2.com/c/202927/289944
Tonai Voice Content   https://jvz8.com/c/202927/383119/
Toon Video Maker    https://jvz2.com/c/202927/357201
TrafficForU   https://jvz3.com/c/202927/381950/
Trendio  https://jvz3.com/c/202927/381003/
TubePal   https://jvz6.com/c/202927/379863/
Tubeserp   https://jvz3.com/c/202927/370472
TubeTargeter  https://jvz6.com/c/202927/377211
TuneMingo    https://jvz3.com/c/202927/386556/
TV Boss Fire  https://jvz6.com/c/202927/379480/
Ultrafunnels A.I   https://jvz2.com/c/202927/381129/
VIADZ Ad Template  https://jvz4.com/c/202927/379307/
Vidcentric   https://jvz4.com/c/202927/376095
Viddeyo    https://jvz6.com/c/202927/382326/
Videevolve   https://jvz4.com/c/202927/381011/
Video Campaignor      https://jvz4.com/c/202927/387058/
Video Games   https://jvz3.com/c/202927/184902/
VideoEnginePro     https://jvz2.com/c/202927/372916
VideoGameSuite    https://jvz3.com/c/202927/366537/
VideoRobot Enterprise   https://jvz8.com/c/202927/291061
VidKreate   https://jvz6.com/c/202927/386029/
VidMingo   https://jvz6.com/c/202927/378359/
VidRaffle   https://jvz2.com/c/202927/386840/
VidSnatcher    https://jvz3.com/c/202927/342585
VidVoicer    https://jvz1.com/c/202927/379983/
Vidzura   https://jvz4.com/c/202927/385754/
Viral dash   https://jvz6.com/c/202927/375959
Viral Quotes      https://jvz2.com/c/202927/386984/
VirtualReel   https://jvz8.com/c/202927/376849
Vocalic  https://jvz2.com/c/202927/383848/
VoiceBuddy    https://jvz1.com/c/202927/342854
WebCop  https://jvz4.com/c/202927/378683/
Webinarkit   https://jvz3.com/c/202927/383937/
Webprimo   https://jvz1.com/c/202927/379455/
WordPress Mastery   https://jvz1.com/c/202927/386249/
WowBackgraounds   https://jvz2.com/c/202927/381556/
WP GDPR    https://jvz8.com/c/202927/299907
WP Simulator    https://jvz3.com/c/202927/46987/
Writer Arc   https://jvz1.com/c/202927/386602/
writing job   https://jvz8.com/c/202927/213027
XBrain Forex   https://jvz3.com/c/202927/372305/
XFUNNELS   https://jvz2.com/c/202927/310335
Xinemax  https://jvz1.com/c/202927/381749/
YoDrive   https://jvz2.com/c/202927/384700/
YoSeller   https://jvz4.com/c/202927/387544/
Your 3DPal   https://jvz2.com/c/202927/381685/
YTSuite   https://jvzoo.com/c/202927/381179
Zappable   https://jvz3.com/c/202927/367328/

Using A Credit Card Could Soon Cost You More As Retailers Allowed To Pass On Swipe Fees To Customers

Christy McMullen, vice-president of Summerhill Market, estimates her family-run business spends about $1 million per year on fees to process credit card transactions. It’s a big cost in the grocery business, which already operates on razor-thin profit margins, but as of next Thursday, the chain of four upscale Toronto grocery stores could choose to pass the “swipe” fees along to customers as a surcharge.

That’s an option McMullen said she cannot take.“It’s not something that you can pass on to your customers. They would go somewhere else,” she said. “It would be another reason for them to go to the big chain rather than the independent.”

As part of a settlement this year of a class-action lawsuit over what are known as interchange fees, Visa and Mastercard agreed to let Canadian merchants apply an extra fee at checkout for the use of credit cards under either of their brands. That change goes into effect next week.

But some small business owners and advocates for retailers say this is not a workable solution to the problem they face when customers pay with plastic, specifically credit cards. (Retailers say the cost of offering debit as a payment option is much lower.)

“Telling retailers to charge customers? That’s not an answer. That’s not anything,” said Giancarlo Trimarchi, managing partner at Vince’s Market, an independent chain of four grocery stores near the GTA.

Instead, they want the federal government to live up to a promise it has made for years, starting with the 2019 election campaign, to reduce credit card transaction fees.

Ottawa has said it wants to ensure small businesses pay similar rates as large businesses (that in some cases have negotiated lower rates with the credit card companies). It held a consultation last year on lowering the average overall cost of such fees for merchants.The consultation wrapped up in December, but small business and retail lobby groups worry that momentum on the issue has died.

“The government has put this file on hold for many years despite repeated promises to small business owners that they’re going to do a further reduction in credit card processing fees,” said Dan Kelly, CEO of the Canadian Federation of Independent Business. “This file seems to be very much at the bottom of the government’s priority list at the moment.”

The two major credit-card companies, Visa and Mastercard, set interchange fees — these vary depending on the type of credit card and can be significantly higher for premium cards associated with reward points programs — but the issuing banks also get a portion of the fees paid by merchants.

In 2020, under a voluntary deal with the federal government, the credit card companies agreed to drop the cost of consumer credit card transaction processing fees to an average of 1.4 per cent (this came down from 1.5 per cent under a previous voluntary agreement).

But as credit card use for payment soared during the pandemic, when consumers spurned cash and purchased more online, retailers say that’s still a hefty price to pay.

As a rough estimate based on the total volume of credit card transactions in 2020 (about $570 billion, according to Payments Canada), merchants would have paid almost $8 billion in credit card processing fees.The retail lobby groups say those numbers were likely even higher in 2021 as the economy recovered after the first year of the pandemic and consumers resumed travelling, dining out and other spending.

“We’ve continued to push for further reductions (in the interchange rate) particularly because we saw such a massive migration away from cash as a result of the pandemic,” said Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers.

“The volume of payments (with credit card) has increased so significantly that it’s just eroding the bottom line of many businesses.”The 2022 federal budget said consultations on the topic continue but the lobby groups say they have not heard anything further from Ottawa.

“The government is committed to lowering the cost of credit-card fees in a way that benefits small businesses and protects existing reward points for consumers,” Adrienne Vaupshas, a spokesperson for Minister of Finance Chrystia Freeland, said in an email.In the meantime, passing on a surcharge to customers will likely be a tough sell for many businesses as Canadians grapple with the effects of soaring inflation.

“We’ve never seen surcharging as the solution to this problem,” said Karl Littler, senior vice-president at the Retail Council of Canada.There have long been exceptions to the previous prohibition on surcharging. For example, some public institutions such as universities and utilities have been able to impose fees for credit card use.

Telecom provider Telus recently told customers it plans to charge a fee for payments made by credit cards and Littler said he could also see it working for smaller merchants who have ongoing and face-to-face relationships with customers, who might sympathize with the costs the businesses incur.

“But I don’t see it working at scale,” he said. “I don’t expect there will be broad adoption of surcharging by Canadian merchants.” Kelly said the CFIB does support retailers having the option but suspects uptake will be limited. He said a poll of 3,914 CFIB members conducted in early September indicated 19 per cent of respondents plan to use the new power.

A Visa spokesperson said the company is not in favour of surcharges, stating in an email, “We believe that the simplest, most economically efficient and consumer-friendly approach is for merchants not to impose surcharges on consumers for using their cards.”

Emilija Businskas, vice-president, communications for Mastercard in Canada, said the option to charge customers a surcharge will give merchants flexibility. On the broader issue of interchange fees, Mastercard “remains committed to building a strong, innovative payments system in Canada,” she said. “This includes our voluntary agreement with government which brings a thoughtful approach to the cost of acceptance for all.”

Mathieu Labrèche, a spokesperson for the Canadian Bankers Association, declined to comment for this story.

Christy McMullen, vice-president of Summerhill Market, estimates her family-run business spends about $1 million per year on fees to process credit card transactions.

It’s a big cost in the grocery business, which already operates on razor-thin profit margins, but as of next Thursday, the chain of four upscale Toronto grocery stores could choose to pass the “swipe” fees along to customers as a surcharge.

Source: Using a credit card could soon cost you more as retailers allowed to pass on ‘swipe’ fees to customers | The Star

Critics by Erin Hurd, Lindsay Konsko

Does swiping your plastic (or metal) credit card sometimes seem more like you’re spending funny money than actual currency? It’s a normal feeling. And research confirms that people do in fact spend more money — often, substantially more money — when they make purchases on a credit card instead of using cash.

It makes sense. Cash is a tangible piece of paper with value attached to it. When you spend it, you have less of it in your wallet. You see this and process it. But with the widespread adoption of credit cards, mobile wallets and peer-to-peer payment systems like Venmo, transactions are less transparent.

Will that make you spend more? Here’s what the studies say, and how you can make sure you’re in control of your spending.

The psychology of credit card spending

It’s easy to convince yourself, without even knowing it, that you’re not spending “real” money when you charge on your credit card. And technically, that’s correct.

“In fact, you’re not really spending money — you’re borrowing money,” writes author and certified public accountant Michele Cagan in her book, “Debt 101.” “You know that you’ll have to pay the bill eventually, but the promise of small minimum payments can make purchases seem like bargains.” Unless you pay back the purchase immediately, you won’t feel the pain of the bill for basically a month.

Multiple behavioral economics studies back this up, including a now-classic study by Drazen Prelec and Duncan Simester, professors at Massachusetts Institute of Technology, in which randomly selected participants were offered the opportunity to buy highly desirable, sold-out tickets to a professional basketball game. Unless you pay back a credit card purchase immediately, you won’t feel the pain of the bill for basically a month.

Half the participants were told that they would have to pay cash for the tickets. The other half were told that they would be required to pay by credit card. Those who were told they would have to pay by credit card were willing to pay more than twice as much on average as those who were told that they would have to pay by cash. In other words, study participants were willing to pay a 100% premium for the opportunity to buy now and pay later.

Another often-cited study is one conducted by Dun & Bradstreet, in which the company found that people spend 12%-18% more when using credit cards instead of cash. The Federal Reserve Bank of Boston recently found an even sharper disparity between cash and non-cash transactions. According to a 2016 report from the bank, the average value of a cash transaction was $22, compared with $112 for non-cash transactions — a 409% jump.

Older studies and real-world data points have also tended to support this general idea through the years:

  • One study from the Journal of Applied Psychology found that diners tipped an average of about 4.3% more just by seeing a credit card logo on the tray that holds their restaurant bill.

  • McDonald’s once reported that its average ticket was $7 when people used credit cards versus $4.50 for cash.

  • A published paper from MIT economist Amy Finkelstein found that U.S. states with highway tolls would tend to increase that toll once they’d installed an automatic collection system, such as EZ-Pass. The study suggests that states realized they could charge more because consumers don’t “feel” the electronic transaction in the same way they would by parting with “real money.”

If you’ve ever shopped at Amazon at 2 a.m, you probably know this all too well. Since studies have shown that consumers are willing to spend more when they charge their purchases, it makes sense that credit cards are ripe for impulse purchases….To be continued..

Related contents:

13% of Credit Card Holders Could Lose Money for This Reason The Motley Fool

A quick guide to maximise your credit card benefits this Diwali The Economic Times

12:38 Sat, 22 Oct
Things to know while closing a credit card Fusion – WeRIndia (Weblog)
11:38 Sat, 22 Oct
00:00 Sat, 22 Oct
19:33 Fri, 21 Oct
19:03 Fri, 21 Oct
17:13 Fri, 21 Oct
16:05 Fri, 21 Oct
22:55 Thu, 20 Oct
22:14 Thu, 20 Oct
19:47 Thu, 20 Oct
16:37 Thu, 20 Oct
15:57 Thu, 20 Oct
15:07 Thu, 20 Oct
13:35 Thu, 20 Oct
11:36 Thu, 20 Oct
08:20 Thu, 20 Oct
06:33 Thu, 20 Oct
06:22 Thu, 20 Oct
23:44 Wed, 19 Oct
19:42 Wed, 19 Oct
19:28 Wed, 19 Oct
16:32 Wed, 19 Oct
15:07 Wed, 19 Oct
12:55 Wed, 19 Oct
12:46 Wed, 19 Oct
08:33 Wed, 19 Oct
04:39 Wed, 19 Oct
01:10 Wed, 19 Oct
.
Marketing Programs To Buy:
.
10 Bold Actions In Positive Life     https://jvz3.com/c/202927/383942/
3D Pal Toons     https://jvz6.com/c/202927/381689/
4brandcommercial        https://jvz1.com/c/202927/375487
7 Minutes Kit      https://jvz8.com/c/202927/374505/
9 figure Success        https://jvz8.com/c/202927/384653/
Ad Raven      https://jvz4.com/c/202927/382796/
Ada leadz     https://jvz8.com/c/202927/376381
ADA Web      https://jvz3.com/c/202927/383751/
AdRaven       https://jvz3.com/c/202927/382851/
Adsense Machine      https://jvz2.com/c/202927/290487
Adtivate Agency      https://jvz3.com/c/202927/383706/
AdvertSuite     https://jvz1.com/c/202927/335011/
AdzHero     https://jvz2.com/c/202927/366972/
AffiliateMatic     https://jvz3.com/c/202927/381148/
Agency Client Finder    https://jvz3.com/c/202927/384619/
Agencyscale      https://jvz1.com/c/202927/383113/
AgencyScale      https://jvz4.com/c/202927/383111/
AIWA Commercial     https://jvz2.com/c/202927/365061
ALL-in-One HD Stock    https://jvz4.com/c/202927/381560
Animaxime    https://jvz2.com/c/202927/383307/
Appimize      https://jvz8.com/c/202927/370227
Appoint B Agency     https://jvz1.com/c/202927/384630/
Appointomatic      https://jvz6.com/c/202927/374258
Appowls    https://jvz4.com/c/202927/381231/
Art Of Living    https://jvz4.com/c/202927/382425/
Audiencetoolkit     https://jvz6.com/c/202927/302715
Audika    https://jvz1.com/c/202927/383635/
Aweber Crash Course     https://jvz6.com/c/202927/383057/
Backlinkindexer    https://jvz6.com/c/202927/88118
BettingMaster      https://jvz2.com/c/202927/387079/
BevTraders    http://www.bevtraders.com/?ref=arminham
Big Audio Club     https://jvz6.com/c/202927/380087/
BigAudio Club    https://jvz2.com/c/202927/380877/
Boost Optimism   https://jvz2.com/c/202927/380692/
BrandElevate   https://jvz4.com/c/202927/381807/
BrandElevate   https://jvzoo.com/c/202927/381812
Bybit     https://www.bybit.com/en-US/invite?ref=ALEXP
CanvaKitz    https://jvz4.com/c/202927/379051/
ChatterPal    https://jvz8.com/c/202927/324615
Clientfinda   https://jvz8.com/c/202927/370806
Clipsreel   https://jvz3.com/c/202927/372682
Commission smasher   https://jvz3.com/c/202927/376879
Content Gorilla   https://jvz2.com/c/202927/330783
Content Tool Kit   https://jvz3.com/c/202927/329145/
CourseAlly eLearning   https://jvz4.com/c/202927/384759/
CourseReel   https://jvz2.com/c/202927/355249
Courserious   https://jvz8.com/c/202927/360397/
Coursova   https://jvz1.com/c/202927/376527
Creaitecontent  https://jvz1.com/c/202927/376986
Credit Repair   https://jvz8.com/c/202927/377815/
Cryptokit    https://jvz8.com/c/202927/383809/
CryptoRocket    https://jvz6.com/c/202927/378113/
CryptoUnderworld     https://jvz8.com/c/202927/374345/
Dealcheck     https://dealcheck.io?fp_ref=armin16
DesignaSuite      https://jvz2.com/c/202927/297271
DesignBeast    https://jvz6.com/c/202927/371547
DevelopSelfEmpowerment     https://jvz6.com/c/202927/383094/
DFYContentClub     https://jvz6.com/c/202927/381337/
DFYSuite   https://jvz3.com/c/202927/381194/
Diabetes Guide    https://jvz2.com/c/202927/358870/
Diddly Pay’s    https://jvz2.com/c/202927/315596
Diet fitness diabetes   https://jvz1.com/c/202927/286851
Domainname    https://jvz6.com/c/202927/377005
Dominate Email   https://jvz4.com/c/202927/386980/
Dropshiply   https://jvz3.com/c/202927/383483/
DUX Forex Signals   https://jvz3.com/c/202927/128215/
EBook Agency    https://jvz2.com/c/202927/384573/
Ejaculation Total   https://jvz2.com/c/202927/75989/
Email Monetizer    https://jvz2.com/c/202927/386337/
EngagerMate  https://jvz8.com/c/202927/328172
EngageYard   https://jvz2.com/c/202927/383051/
Explaindio    https://jvz1.com/c/202927/123757/
Extreme Adz   https://jvz8.com/c/202927/379244/
Extreme Coupon  https://jvz1.com/c/202927/216101/
EZ Local Appointment  https://jvz2.com/c/202927/385180/
Ezy  https://jvz1.com/c/202927/381935/
Ezy MultiStores  https://jvzoo.com/c/202927/381935
Facebook Cash Machine   https://jvz4.com/c/202927/382333/
Facedrip  https://jvz1.com/c/202927/376325/
FaceSwap   https://jvz4.com/c/202927/381768/
Fade To Black   https://jvz2.com/c/202927/344541
Fanpage  https://jvz4.com/c/202927/144349
Fitness Nutrition   https://jvz4.com/c/202927/353334/
Followup Builder   https://jvz3.com/c/202927/386313/
Forex Atlatian   https://jvz8.com/c/202927/25069/
Forex Blizz   https://jvz8.com/c/202927/144577/
Forex Blue Stark  https://jvz3.com/c/202927/47481/
Forex expert   https://jvz1.com/c/202927/376877
Forex Hybrid Scalper    https://jvz6.com/c/202927/95037/
Forex Joustar   https://jvz6.com/c/202927/381617/
Forex Mastery   https://jvz2.com/c/202927/144621/
Forex Scouts   https://jvz6.com/c/202927/132677/
forrk  https://jvz1.com/c/202927/373449
FusionMT4    https://jvz2.com/c/202927/372523/
FX Goldminer  https://jvz1.com/c/202927/381439/
Galactic  https://jvz1.com/c/202927/188236/
Gaming job   https://jvz2.com/c/202927/184902  s
Genesis Mining   https://www.genesis-mining.com/a/2535466
Gluten free   https://jvz4.com/c/202927/296191
GMB Magic  https://jvz2.com/c/202927/377194
Graphic Alta  https://jvz2.com/c/202927/324492/
Heal Your Emptiness   https://jvz6.com/c/202927/384848/
High Converting Emails  https://jvz3.com/c/202927/386305/
HostLegends    https://jvz4.com/c/202927/384755/
Hostley Domain Creator   https://jvz1.com/c/202927/379223/
Human Synthesys Studio  https://jvz8.com/c/202927/367353/
ImageX   https://jvz6.com/c/202927/363237/
IMSyndicator  https://jvz1.com/c/202927/370769
Inboxr   https://jvz2.com/c/202927/312692
Insta Keyword    https://jvz6.com/c/202927/351606/
Instant Website   https://jvz2.com/c/202927/377557
InstantWebsiteBundle          https://jvz6.com/c/202927/377557
iTraffic X  https://jvz2.com/c/202927/320466
keysearch  https://jvz3.com/c/202927/194909
KlickCourse   https://jvz3.com/c/202927/385006/
Klippyo Kreators  https://jvz8.com/c/202927/327447
KoinCart   https://jvz2.com/c/202927/383555/
Leadvalet   https://jvz3.com/c/202927/385580/
Levidio Royal Podcasting   https://jvz6.com/c/202927/384025/
Linkable DFY   https://jvz6.com/c/202927/385873/
Linkomatic  https://jvz2.com/c/202927/380937/
LiteTrading   https://www.litefinance.com/?uid=929237543
Live Your Truth  https://jvz6.com/c/202927/379020
Living An Intentional Life    https://jvzoo.com/c/202927/382455
Living an International Life    https://jvz8.com/c/202927/382455/
Local Leader   https://jvz4.com/c/202927/383751/
Local Sites   https://jvz4.com/c/202927/380543/
LocalAgencyBox  https://jvz2.com/c/202927/359468
LocalCentric   https://jvz2.com/c/202927/379339/
LocalioAI    https://jvz6.com/c/202927/378310/
MarketAll      https://jvz2.com/c/202927/386971/
Marketingblocks     https://jvz6.com/c/202927/374934
MarketPresso   https://jvz2.com/c/202927/369837
Mat1 Simple Funnel   https://jvz2.com/c/202927/380197/
Maxslides  https://jvz8.com/c/202927/376842
Mech Forex Robot   https://jvz6.com/c/202927/383447/
MediaCloudPro   https://jvz2.com/c/202927/343635
Megasuite   https://jvz3.com/c/202927/383953/
Mobi First   https://jvz2.com/c/202927/353694/
Motion Kingdom Studio  https://jvz4.com/c/202927/383177/
Movid Animation  https://jvz6.com/c/202927/380385/
MT4Code System   https://jvz2.com/c/202927/376925
My Passive Income   https://jvz1.com/c/202927/384099/
MyMailIt   https://jvz3.com/c/202927/292919
MyTrafficJacker   https://jvz2.com/c/202927/353558
Next Drive  https://jvz4.com/c/202927/371095/
NichBox  https://jvz2.com/c/202927/370705/
Organic Life Guide  https://jvz8.com/c/202927/366872/
Pcommerce   https://jvz6.com/c/202927/372265/
Phemex  https://phemex.com/register-vt1?referralCode=D8HUS2
Photokit  https://jvz4.com/c/202927/373207/
PicsAds   https://jvz2.com/c/202927/385468/
PigMoneyMethod   https://jvz2.com/c/202927/377665/
PipStock   http://pipstockexchange.com/register?ref=204
Pitchdeck   https://jvz3.com/c/202927/347847/
Pixal  https://jvz2.com/c/202927/378775/
PixaStudio    https://jvz1.com/c/202927/373089/
Pixivid   https://jvz6.com/c/202927/385213/
PlanB Muscle Growth   https://jvz1.com/c/202927/36517/
PlayerNeos   https://jvz2.com/c/202927/376962
Podcast Advantage   https://jvz8.com/c/202927/379995/
Podcast Masterclass  https://jvz3.com/c/202927/379998/
PodKastr    https://jvz1.com/c/202927/369500/
Poplinks Funnel    https://jvz1.com/c/202927/368095/
Postradamus     https://jvz6.com/c/202927/108695
Power Reviews    https://jvz8.com/c/202927/384625/
Powrsuite   https://jvz1.com/c/202927/376361
PR Rage  https://jvz4.com/c/202927/343405
prime stocks   https://jvz8.com/c/202927/369164  prime stocks
Profile mate    https://jvz4.com/c/202927/358049
Promovidz   https://jvz8.com/c/202927/375692/
Push Button Traffic   https://jvz2.com/c/202927/301402
QR Verse   https://jvz3.com/c/202927/383865/
Quintex Capital     https://quintexcapital.com/?ref=arminham
Quit Smoking    https://jvz3.com/c/202927/359081/
QuizMatic   https://jvz6.com/c/202927/387116/
Reputor   https://jvz8.com/c/202927/380159/
ReVideo  https://jvzoo.com/c/202927/381761
ReviewReel   https://jvz6.com/c/202927/382663/
Rewriter   https://jvz4.com/c/202927/353373/
RSI SEO   https://jvz6.com/c/202927/384381/
Scriptdio   https://jvz4.com/c/202927/385387/
Seniors Income    https://jvz2.com/c/202927/383888/
Senuke  https://jvz6.com/c/202927/279944
ShopABot   https://jvz2.com/c/202927/291955
ShopFunnels   https://jvz3.com/c/202927/384069/
SocialAgency360   https://jvz1.com/c/202927/385357/
SociCake  https://jvz2.com/c/202927/321987
Socifeed   https://jvz6.com/c/202927/375706
SociJam  https://jvz2.com/c/202927/309649
Soronity  https://jvz6.com/c/202927/368736
SqribbleEbook   https://jvz6.com/c/202927/283867
Stackable Picture   https://jvz1.com/c/202927/385046/
Steven Alvey’s   https://jvz2.com/c/202927/351754
Stoodaio   https://jvz1.com/c/202927/372094
Storymate    https://jvz3.com/c/202927/320972
StreamPilot   https://jvz2.com/c/202927/385431/
Studioninja   https://jvz1.com/c/202927/374965
Sunday Freebie  https://jvz1.com/c/202927/267113/
Super backdrop   https://jvz8.com/c/202927/376524
Survai    https://jvz8.com/c/202927/380933/
Syndranker    https://jvz3.com/c/202927/378143/
Talkingfaces   https://jvz3.com/c/202927/375550
The Internet Marketing   https://jvz2.com/c/202927/289944
Tonai Voice Content   https://jvz8.com/c/202927/383119/
Toon Video Maker    https://jvz2.com/c/202927/357201
TrafficForU   https://jvz3.com/c/202927/381950/
Trendio  https://jvz3.com/c/202927/381003/
TubePal   https://jvz6.com/c/202927/379863/
Tubeserp   https://jvz3.com/c/202927/370472
TubeTargeter  https://jvz6.com/c/202927/377211
TuneMingo    https://jvz3.com/c/202927/386556/
TV Boss Fire  https://jvz6.com/c/202927/379480/
Ultrafunnels A.I   https://jvz2.com/c/202927/381129/
VIADZ Ad Template  https://jvz4.com/c/202927/379307/
Vidcentric   https://jvz4.com/c/202927/376095
Viddeyo    https://jvz6.com/c/202927/382326/
Videevolve   https://jvz4.com/c/202927/381011/
Video Campaignor      https://jvz4.com/c/202927/387058/
Video Games   https://jvz3.com/c/202927/184902/
VideoEnginePro     https://jvz2.com/c/202927/372916
VideoGameSuite    https://jvz3.com/c/202927/366537/
VideoRobot Enterprise   https://jvz8.com/c/202927/291061
VidKreate   https://jvz6.com/c/202927/386029/
VidMingo   https://jvz6.com/c/202927/378359/
VidRaffle   https://jvz2.com/c/202927/386840/
VidSnatcher    https://jvz3.com/c/202927/342585
VidVoicer    https://jvz1.com/c/202927/379983/
Vidzura   https://jvz4.com/c/202927/385754/
Viral dash   https://jvz6.com/c/202927/375959
Viral Quotes      https://jvz2.com/c/202927/386984/
VirtualReel   https://jvz8.com/c/202927/376849
Vocalic  https://jvz2.com/c/202927/383848/
VoiceBuddy    https://jvz1.com/c/202927/342854
WebCop  https://jvz4.com/c/202927/378683/
Webinarkit   https://jvz3.com/c/202927/383937/
Webprimo   https://jvz1.com/c/202927/379455/
WordPress Mastery   https://jvz1.com/c/202927/386249/
WowBackgraounds   https://jvz2.com/c/202927/381556/
WP GDPR    https://jvz8.com/c/202927/299907
WP Simulator    https://jvz3.com/c/202927/46987/
Writer Arc   https://jvz1.com/c/202927/386602/
writing job   https://jvz8.com/c/202927/213027
XBrain Forex   https://jvz3.com/c/202927/372305/
XFUNNELS   https://jvz2.com/c/202927/310335
Xinemax  https://jvz1.com/c/202927/381749/
YoDrive   https://jvz2.com/c/202927/384700/
YoSeller   https://jvz4.com/c/202927/387544/
Your 3DPal   https://jvz2.com/c/202927/381685/
YTSuite   https://jvzoo.com/c/202927/381179
Zappable    https://jvz1.com/c/202927/367328/

 

When A Mutual-Fund Converts To An ETF: How It Works

Asset managers continue to convert some of their mutual funds into exchange-traded funds. So what does that mean for investors? A 2019 change to the rules governing investment funds made it easier for managers to convert mutual funds to ETFs by removing the need for separate approval of each potential conversion by the Securities and Exchange Commission.

A handful of asset managers, including Dimensional Fund Advisors and JPMorgan Chase & Co.’s J.P. Morgan Asset Management, have recently converted actively managed mutual funds into actively managed ETFs. They say the change is in response to the preference of many investors for ETFs, which generally offer lower fees than mutual funds and provide a tax advantage.

Investors in the funds being converted might appreciate those benefits. But they need a brokerage account to keep the new ETF, and may have some tax consequences if they own fractional shares of the mutual fund.

Why convert?

The initial group of conversions has mostly been in actively managed stock or bond funds. For example, J.P. Morgan completed conversions of four funds in June, an actively managed fixed-income fund now called JPMorgan Inflation Managed Bond ETF (JCPI); an active equities fund, now JPMorgan Market Expansion Enhanced Equity ETF (JMEE); a real-estate income fund, now JPMorgan Realty Income ETF (JPRE); and a global equities fund, now JPMorgan International Research Enhanced Equity ETF (JIRE).

Dimensional Fund Advisors converted a $30 billion suite of actively managed systematic funds last year. Systematic funds’ investment decisions are largely guided by models based on extensive market data, rather than left purely to the fund managers’ discretion.

Analysts say actively managed funds are likely to be where most conversions happen. That’s because active funds have higher fees than passive ones and tend to generate more taxable gains through trading, which makes them more vulnerable to investors’ preference for lower fees and taxes.

There is a recognition among asset managers that there is a better way to offer certain strategies, and that’s coming alongside investor demand for ETFs,” says Daniel Sotiroff, a Morningstar analyst. Even mutual funds that already have some of the qualities of an ETF can benefit from conversion, he says. “If you look at what Dimensional converted, those funds were already tax managed as mutual funds,” meaning they were designed to minimize investors’ tax burden. “The ETF structure makes that process easier to do and comes with lower fees.”

He notes that ETFs typically don’t charge the so-called 12b-1 fees that mutual funds do. These fees, which are named after the SEC rule that allows them to be charged, cover the marketing and distribution of a mutual fund or ETF. ETFs also tend to have fewer trading transactions than mutual funds, which means they have lower transaction costs, because trades aren’t triggered by asset inflows and outflows in ETFs as they are in mutual funds.

ETFs offer a tax advantage because, since they can make fewer trades, they distribute fewer, if any, capital gains to investors. Some mutual funds are designed to distribute fewer gains, but investors are still likely to see taxable distributions over the course of their investment in a mutual fund.

The higher fees of actively managed funds and the taxes on capital gains from distributions have led to outflows in favor of actively managed ETFs with similar strategies for a number of years. The SEC rule change for conversions gives investors the option to stick with the same strategy and managers at a lower cost.

For fund managers, a conversion allows them to keep the performance record of the mutual fund as well as any investor assets in the fund that stay through the conversion. That can give the new ETF a leg up over a newly launched ETF, as many investors and financial advisers want to see a substantial record and enough assets to support the long-term viability of a fund before investing.

What to watch for

For investors in a mutual fund that is up for conversion, there are a few things to keep in mind. Those who invested in a mutual fund through a transfer agent instead of a broker, which is common, will need a brokerage account to be able to hold and trade the ETF. If they don’t have a brokerage account, there are many low-cost brokers, with some offering low or no minimums to open an account, but it may be a bit of a learning curve for those who haven’t used a brokerage account before.

ETFs also don’t offer fractional shares. Any fractional shares of the mutual fund held at the point of conversion will be redeemed and could result in a taxable gain.

A conversion may also require approval from shareholders, and if enough shareholders don’t want to convert, fund managers may opt to offer a separate ETF that runs the same strategy. Individual investors can then decide to move into the ETF on their own, but that could result in tax consequences when they sell out of the mutual fund if they end up with capital gains.

By:

Source: When a mutual-fund converts to an ETF: How it works | Mint

Critics by By Matthew Romano

Mutual fund” is the common term for an investment vehicle that pools money from multiple investors and invests in various assets such as stocks and bonds. Most traditional mutual funds, commonly referred to as “open ended” funds, issue shares directly to shareholders and redeem them at the demand of the shareholder at the fund’s net asset value (NAV). Mutual funds register with the SEC under the Investment Company Act of 1940 (the Act).

While an exchange-traded fund (ETF) is similar to a traditional mutual fund in that it pools money into a fund to invest in various assets and can register with the SEC under the Act, it differs in that its shares are traded on a secondary market as opposed to directly between the shareholders and the fund. One or more intermediaries, referred to as authorized participants, seed the fund with cash and/or stocks in exchange for the fund shares and then list those shares on a secondary market to be bought and sold by the prospective fund shareholders.

A traditional mutual fund can be converted to an ETF. The present discussion focuses on the tax implications of doing so. A conversion may be appealing because of the greater tax efficiency of ETFs (discussed below), lower expense ratios, and the fact that a conversion utilizes the scale and performance of an existing fund. Mutual funds’ appetite for converting was further enhanced by the SEC’s approving Rule 6c-11 in 2019, which reduced the time and cost of launching an ETF.

Tax efficiency of ETFs

Both traditional mutual funds and ETFs that are domestic corporations — if they are registered with the SEC under the Act and meet certain diversification, income, and distribution requirements — are taxed as regulated investment companies (RICs) under Subchapter M of the Internal Revenue Code. Under these rules, they are not subject to entity-level tax if they distribute their net income and capital gains via dividends to their shareholders. Shareholders with nonqualified taxable accounts ultimately bear the tax burden.

ETFs are often more tax-efficient than traditional mutual funds, however. In the case of a mutual fund, besides the trading that occurs in the normal course of business, other transactions at the fund level can result in an increased tax burden for the shareholders. For instance, a portfolio rebalance and/or change in investment strategy can result in the fund’s recognizing substantial gains. Large redemptions can also cause a mutual fund to recognize gains because it may need to sell securities to raise the cash to meet the redemption request.

The ETF structure can mitigate or even eliminate this tax burden. With respect to redemptions, Sec. 852(b)(6) provides that a RIC that redeems shareholders with “property” instead of cash will not recognize any gain from the disposition of that property. While this provision applies to both traditional mutual funds and ETFs, mutual fund shareholders will almost always prefer a cash redemption, while authorized participants are usually indifferent.

With respect to a rebalancing of the portfolio, ETFs can utilize either a redemption basket (of securities) or a creation basket (of securities) between the ETF and the authorized participants. This allows the ETF to avoid recognizing and distributing taxable gains to the shareholders.

The conversion transaction itself

While the conversion of a traditional mutual fund to an ETF has numerous legal and operational hurdles, the details of which are outside the scope of this discussion, the tax structuring is fairly simple. Typically, the fund sponsor will create a shell ETF for purposes of the conversion. This ETF will likely have the same investment objectives, board of directors, and management as the original mutual fund. After the shell ETF is created, the original mutual fund merges into the shell ETF.

If structured properly, the merger will qualify as a tax-free reorganization under Sec. 368(a)(1)(F) (F reorganization). The requirements of an F reorganization, detailed in Regs. Sec. 1.368-2(m), are listed below:

  • Immediately after the F reorganization, all the stock of the resulting corporation, including any stock issued before the potential F reorganization, must have been distributed in exchange for the stock of the transferor corporation.
  • The same person or persons must own all the stock of the transferor corporation and of the resulting corporation in identical proportions.
  • The resulting corporation may not hold any property or have any tax attributes immediately before the F reorganization.
  • The transferor corporation must completely liquidate as part of the transaction.
  • Immediately following the potential F reorganization, no corporation other than the resulting corporation may hold property that was held by the transferor corporation immediately before the reorganization.
  • Immediately following the potential F reorganization, the resulting corporation may not hold property acquired from a corporation other than the transferor corporation.

Given the nature of the conversion of a traditional mutual fund to an ETF, it is likely that the transaction will meet the above requirements. Assuming it does, an F reorganization is considered a “mere change of form” for tax purposes. As such, the fund tax year end, employer identification number, and all tax attributes from the original mutual fund remain.

There are some other ancillary tax implications of the conversion. The mutual fund may want to sell some assets prior to the conversion; this could result in some taxable distributions to shareholders. Also, unlike traditional mutual funds, ETFs generally do not issue fractional shares, so these will be redeemed with cash prior to the conversion and could result in a nominal amount of tax.

Other items to consider

While this item focuses primarily on the tax impact, some nontax aspects of converting a traditional mutual fund to an ETF should also be considered:

  • Shareholders may need to set up a brokerage account to hold the ETF shares.
  • Unlike traditional mutual funds, ETFs can trade at a premium or discount to NAV, which can create some level of risk to the shareholder. However, the create/redeem process between the ETF and the authorized participants can operate to reduce any premium or discount spreads.
  • Approval by the mutual fund’s board of directors may be required to complete this transaction.

Potentially significant benefits

While substantial operational and legal obstacles need to be considered and addressed, the conversion of a traditional mutual fund to an ETF can have significant tax benefits, depending on the nature of the fund’s activities and the makeup of the fund shareholder base.

.

Related contents:

Stone Ridge mutual cat bond & ILS funds decline further on Ian Artemis.bm

Grab These 3 Financial Mutual Funds As Rate Hikes Continue Nasdaq

16:09 Thu, 29 Sep
14:33 Thu, 29 Sep
18:54 Wed, 28 Sep
18:37 Wed, 28 Sep
15:31 Wed, 28 Sep
10:01 Wed, 28 Sep
07:44 Wed, 28 Sep
07:44 Wed, 28 Sep
16:48 Tue, 27 Sep
16:09 Tue, 27 Sep
15:47 Tue, 27 Sep
15:47 Tue, 27 Sep
15:16 Tue, 27 Sep
14:48 Tue, 27 Sep
08:54 Tue, 27 Sep
05:30 Tue, 27 Sep
21:11 Mon, 26 Sep
11:29 Mon, 26 Sep
11:11 Mon, 26 Sep
09:29 Mon, 26 Sep
07:36 Mon, 26 Sep
14:04 Sun, 25 Sep
12:55 Sat, 24 Sep
16:53 Fri, 23 Sep
10:37 Fri, 23 Sep
08:51 Fri, 23 Sep
08:26 Fri, 23 Sep
05:59 Fri, 23 Sep
05:46 Fri, 23 Sep
What drives mutual funds’ growth? The Hindu Business Line
16:47 Thu, 22 Sep
16:26 Thu, 22 Sep
15:56 Thu, 22 Sep
10:08 Thu, 22 Sep
23:40 Wed, 21 Sep
23:51 Wed, 21 Sep
19:13 Wed, 21 Sep
14:42 Wed, 21 Sep
10:34 Wed, 21 Sep
08:22 Wed, 21 Sep
18:49 Tue, 20 Sep
16:48 Tue, 20 Sep
16:48 Tue, 20 Sep
16:38 Tue, 20 Sep
16:31 Tue, 20 Sep
14:30 Tue, 20 Sep
12:29 Tue, 20 Sep
12:03 Tue, 20 Sep
14:04 Mon, 19 Sep
19:50 Sat, 17 Sep
08:29 Sat, 17 Sep
01:06 Sat, 17 Sep
16:23 Fri, 16 Sep
11:54 Fri, 16 Sep
17:51 Thu, 15 Sep
16:40 Thu, 15 Sep
13:19 Thu, 15 Sep
22:07 Wed, 14 Sep
17:14 Wed, 14 Sep
11:26 Wed, 14 Sep
10:49 Wed, 14 Sep
09:07 Wed, 14 Sep
17:53 Tue, 13 Sep
17:27 Tue, 13 Sep
16:37 Tue, 13 Sep
14:18 Tue, 13 Sep
21:40 Mon, 12 Sep
16:51 Mon, 12 Sep
13:11 Sun, 11 Sep
21:02 Sat, 10 Sep
Mutual Funds returns The Hindu Business Line
15:32 Sat, 10 Sep
15:21 Sat, 10 Sep
07:37 Sat, 10 Sep
20:59 Fri, 09 Sep
17:55 Fri, 09 Sep
16:14 Fri, 09 Sep
13:16 Fri, 09 Sep
12:45 Fri, 09 Sep
07:16 Fri, 09 Sep
12:09 Thu, 08 Sep

.

Marketing Program Apps To Buy:

.

.

10 Bold Actions In Positive Life & Work                https://jvz3.com/c/202927/383942/
3D Pal Toons                https://jvz6.com/c/202927/381689/
4brandcommercial        https://jvz1.com/c/202927/375487
7 Minutes Kit                    https://jvz8.com/c/202927/374505/
9 figure Success                        https://jvz8.com/c/202927/384653/
Ad Raven                       https://jvz4.com/c/202927/382796/
Ada leadz                           https://jvz8.com/c/202927/376381
ADA Web                        https://jvz3.com/c/202927/383751/
AdRaven                          https://jvz3.com/c/202927/382851/
Adsense Machine                  https://jvz2.com/c/202927/290487
Adtivate Agency                   https://jvz3.com/c/202927/383706/
AdvertSuite            https://jvz1.com/c/202927/335011/
AdzHero                      https://jvz2.com/c/202927/366972/
AffiliateMatic                 https://jvz3.com/c/202927/381148/
Agency Client Finder                        https://jvz3.com/c/202927/384619/
AgencyScale                          https://jvz4.com/c/202927/383111/
Agencyscale                      https://jvz1.com/c/202927/383113/
AIWA Commercial              https://jvz2.com/c/202927/365061
ALL-in-One HD Stock                   https://jvz4.com/c/202927/381560
Animaxime                   https://jvz2.com/c/202927/383307/
Appimize                            https://jvz8.com/c/202927/370227
Appoint B Agency                     https://jvz1.com/c/202927/384630/
Appointomatic               https://jvz6.com/c/202927/374258
Appowls                     https://jvz4.com/c/202927/381231/
Art Of Living                       https://jvz4.com/c/202927/382425/
Audiencetoolkit              https://jvz6.com/c/202927/302715
Aweber Crash Course                     https://jvz6.com/c/202927/383057/
Backlinkindexer           https://jvz6.com/c/202927/88118
BettingMaster      https://jvz2.com/c/202927/387079/
BevTraders                               http://www.bevtraders.com/?ref=arminham
Big Audio Club                       https://jvz6.com/c/202927/380087/
BigAudio Club                   https://jvz2.com/c/202927/380877/
Boost Optimism                    https://jvz2.com/c/202927/380692/
BrandElevate                  https://jvzoo.com/c/202927/381812
BrandElevate                https://jvz4.com/c/202927/381807/
Bybit Crypto Trade                  https://www.bybit.com/en-US/invite?ref=ALEXP
CanvaKitz                     https://jvz4.com/c/202927/379051/
ChatterPal Commercial                 https://jvz8.com/c/202927/324615
Clientfinda                     https://jvz8.com/c/202927/370806
Clipsreel                             https://jvz3.com/c/202927/372682
Commission smasher          https://jvz3.com/c/202927/376879
Content Gorilla              https://jvz2.com/c/202927/330783
Content Tool Kit                     https://jvz3.com/c/202927/329145/
CourseAlly eLearning                      https://jvz4.com/c/202927/384759/
CourseReel                        https://jvz2.com/c/202927/355249
Courserious                       https://jvz8.com/c/202927/360397/
Coursova                         https://jvz1.com/c/202927/376527
Creaitecontentcreator          https://jvz1.com/c/202927/376986
Credit Repair                        https://jvz8.com/c/202927/377815/
Crypto Kit                     https://jvz8.com/c/202927/383809/
Crypto Rocket                     https://jvz6.com/c/202927/378113/
Crypto Underworld                           https://jvz8.com/c/202927/374345/
Dealcheck                                  https://dealcheck.io?fp_ref=armin16
Design beast               https://jvz6.com/c/202927/371547
Designa Suite License                  https://jvz2.com/c/202927/297271
Develop Self Empowerment                 https://jvz6.com/c/202927/383094/
DFY Content Club                 https://jvz6.com/c/202927/381337/
DFY Suite                    https://jvz3.com/c/202927/381194/
Diabetes Guide                       https://jvz2.com/c/202927/358870/
Diddly Pay’s DLCM                  https://jvz2.com/c/202927/315596
Diet fitness diabetes              https://jvz1.com/c/202927/286851
Domainname                  https://jvz6.com/c/202927/377005
Dominate Email             https://jvz4.com/c/202927/386980/
Dropshiply                   https://jvz3.com/c/202927/383483/
DUX Forex Signals                        https://jvz3.com/c/202927/128215/
EBook Agency                        https://jvz2.com/c/202927/384573/
Ejaculation Total                     https://jvz2.com/c/202927/75989/
Email Monetizer                     https://jvz2.com/c/202927/386337/
EngagerMate                         https://jvz8.com/c/202927/328172
EngageYard                     https://jvz2.com/c/202927/383051/
Extreme Adz                 https://jvz8.com/c/202927/379244/
Extreme Coupon                  https://jvz1.com/c/202927/216101/
EZ Local Appointmen                            https://jvz2.com/c/202927/385180/   t
Ezy                https://jvz1.com/c/202927/381935/
Ezy MultiStores               https://jvzoo.com/c/202927/381935
Facebook Cash Machine                 https://jvz4.com/c/202927/382333/
Facedrip                          https://jvz1.com/c/202927/376325/
FaceSwap                 https://jvz4.com/c/202927/381768/
Fade To Black                   https://jvz2.com/c/202927/344541
Fanpage                          https://jvz4.com/c/202927/144349
Fitness Nutrition                    https://jvz4.com/c/202927/353334/
Followup Builder                         https://jvz3.com/c/202927/386313/
Forex Atlatian                        https://jvz8.com/c/202927/25069/
Forex Blizz                             https://jvz8.com/c/202927/144577/
Forex Blue Stark                      https://jvz3.com/c/202927/47481/
Forex expert                   https://jvz1.com/c/202927/376877
Forex Hybrid Scalper                        https://jvz6.com/c/202927/95037/
Forex Joustar                     https://jvz8.com/c/202927/381617/
Forex Joustar                  https://jvz6.com/c/202927/381617/
Forex Mastery                    https://jvz2.com/c/202927/144621/
Forex Scouts                         https://jvz6.com/c/202927/132677/
forrk                                              https://jvz1.com/c/202927/373449
FusionMT4                             https://jvz2.com/c/202927/372523/
FX Goldminer                      https://jvz1.com/c/202927/381439/
Galactic                         https://jvz1.com/c/202927/188236/
Gaming job                    https://jvz2.com/c/202927/184902  s
Genesis Mining              https://www.genesis-mining.com/a/2535466
Givvy Mobile Lottery             https://givvy-numbers.app.link/qNDZMGGbhsb
Gluten free                              https://jvz4.com/c/202927/296191
GMB Magic                        https://jvz2.com/c/202927/377194
Graphic Alta           https://jvz2.com/c/202927/324492/
Heal Your Emptiness                         https://jvz6.com/c/202927/384848/
High Converting Emails                  https://jvz3.com/c/202927/386305/
HostLegends                       https://jvz4.com/c/202927/384755/
Hostley Domain Creator                        https://jvz1.com/c/202927/379223/
Human Synthesys Studio                      https://jvz8.com/c/202927/367353/
ImageX                      https://jvz6.com/c/202927/363237/
IMSyndicator                   https://jvz1.com/c/202927/370769
Inboxr                            https://jvz2.com/c/202927/312692
Insta Keyword                https://jvz6.com/c/202927/351606/
Instant Website                https://jvz2.com/c/202927/377557
InstantWebsiteBundle          https://jvz6.com/c/202927/377557
iTraffic X                          https://jvz2.com/c/202927/320466
keysearch                                    https://jvz3.com/c/202927/194909
Klippyo Kreators                         https://jvz8.com/c/202927/327447
KoinCart                            https://jvz2.com/c/202927/383555/
Leadvalet                         https://jvz3.com/c/202927/385580/
Levidio Royal Podcasting                        https://jvz6.com/c/202927/384025/
Linkable DFY                       https://jvz6.com/c/202927/385873/
Linkomatic                            https://jvz2.com/c/202927/380937/
LiteTrading                                 https://www.litefinance.com/?uid=929237543
Live Your Truth                       https://jvz6.com/c/202927/379020
Living An Intentional Life              https://jvzoo.com/c/202927/382455
Living an International Life                  https://jvz8.com/c/202927/382455/
Local Leader                   https://jvz4.com/c/202927/383751/
Local Sites                  https://jvz4.com/c/202927/380543/
LocalAgencyBox                 https://jvz2.com/c/202927/359468
LocalCentric                            https://jvz2.com/c/202927/379339/
MarketAll      https://jvz2.com/c/202927/386971/
Marketingblocks             https://jvz6.com/c/202927/374934
MarketPresso                  https://jvz2.com/c/202927/369837
Mat1 Simple Funnel                            https://jvz2.com/c/202927/380197/
Maxslides                         https://jvz8.com/c/202927/376842
Mech Forex Robot                           https://jvz6.com/c/202927/383447/
MediaCloudPro                 https://jvz2.com/c/202927/343635
Megasuite                         https://jvz3.com/c/202927/383953/
Mobi First                          https://jvz2.com/c/202927/353694/
Motion Kingdom Studio                    https://jvz4.com/c/202927/383177/
Movid Animation                     https://jvz6.com/c/202927/380385/
MT4Code System                  https://jvz2.com/c/202927/376925
My Passive Income                  https://jvz1.com/c/202927/384099/
MyMailIt                              https://jvz3.com/c/202927/292919
MyTrafficJacker               https://jvz2.com/c/202927/353558
Next Drive                      https://jvz4.com/c/202927/371095/
NichBox               https://jvz2.com/c/202927/370705/
Organic Life Guide                 https://jvz8.com/c/202927/366872/
Phemex              https://phemex.com/register-vt1?referralCode=D8HUS2
Photokit                           https://jvz4.com/c/202927/373207/
PicsAds                         https://jvz2.com/c/202927/385468/
PigMoney Metho                     https://jvz4.com/c/202927/377665/   d
PigMoneyMethod                        https://jvz2.com/c/202927/377665/
Pitchdeck                      https://jvz3.com/c/202927/347847/
Pixal                     https://jvz2.com/c/202927/378775/
PixaStudio      https://jvz1.com/c/202927/373089/
Pixivid                           https://jvz6.com/c/202927/385213/
PlanB Muscle Growth              https://jvz1.com/c/202927/36517/
PlayerNeos                 https://jvz2.com/c/202927/376962
Podcast Advantage                        https://jvz8.com/c/202927/379995/
Podcast Masterclass               https://jvz3.com/c/202927/379998/
PodKastr                 https://jvz1.com/c/202927/369500/
Postradamus                              https://jvz6.com/c/202927/108695
Power Reviews                     https://jvz8.com/c/202927/384625/
Powrsuite                       https://jvz1.com/c/202927/376361
PR Rage                        https://jvz4.com/c/202927/343405
prime stocks                              https://jvz8.com/c/202927/369164  prime stocks
Profile mate                           https://jvz4.com/c/202927/358049
Promovidz                      https://jvz8.com/c/202927/375692/
Push Button Traffic         https://jvz2.com/c/202927/301402
QR Verse                      https://jvz3.com/c/202927/383865/
Quintex Capital                         https://quintexcapital.com/?ref=arminham
Quit Smoking                           https://jvz3.com/c/202927/359081/
QuizMatic          https://jvz6.com/c/202927/387116/
Reputor                 https://jvz8.com/c/202927/380159/
ReVideo                     https://jvzoo.com/c/202927/381761
ReviewReel                        https://jvz6.com/c/202927/382663/
Rewriter                      https://jvz4.com/c/202927/353373/
RSI SEO                              https://jvz6.com/c/202927/384381/
Scriptdio                       https://jvz4.com/c/202927/385387/
Seniors Income                        https://jvz2.com/c/202927/383888/
Senuke                                  https://jvz6.com/c/202927/279944
ShopABot                           https://jvz2.com/c/202927/291955
ShopFunnels                        https://jvz3.com/c/202927/384069/
SocialAgency360                 https://jvz1.com/c/202927/385357/
SociCake                       https://jvz2.com/c/202927/321987
Socifeed                          https://jvz6.com/c/202927/375706
SociJam                    https://jvz2.com/c/202927/309649
Soronity                                 https://jvz6.com/c/202927/368736
SqribbleEbook                 https://jvz6.com/c/202927/283867
Stackable Picture                        https://jvz1.com/c/202927/385046/
Steven Alvey’s                      https://jvz2.com/c/202927/351754
Stoodaio                                    https://jvz1.com/c/202927/372094
Storymate                         https://jvz3.com/c/202927/320972
StreamPilot                        https://jvz2.com/c/202927/385431/
Studioninja                       https://jvz1.com/c/202927/374965
Sunday Freebie                             https://jvz1.com/c/202927/267113/
Super backdrop                https://jvz8.com/c/202927/376524
Survai                      https://jvz8.com/c/202927/380933/
Syndranker                          https://jvz3.com/c/202927/378143/
Talkingfaces                    https://jvz3.com/c/202927/375550
The Internet Marketing                https://jvz2.com/c/202927/289944
Tonai Voice Content           https://jvz8.com/c/202927/383119/
Toon Video Maker                   https://jvz2.com/c/202927/357201
TrafficFor                https://jvz8.com/c/202927/381950/
TrafficForU                   https://jvz3.com/c/202927/381950/
Trendio                       https://jvz3.com/c/202927/381003/
TubePal                        https://jvz6.com/c/202927/379863/
Tubeserp                        https://jvz3.com/c/202927/370472
TubeTargeter                   https://jvz6.com/c/202927/377211
TuneMingo      https://jvz3.com/c/202927/386556/
TV Boss Fire                https://jvz6.com/c/202927/379480/
Ultrafunnels A.I                 https://jvz2.com/c/202927/381129/
VIADZ Ad Template                    https://jvz4.com/c/202927/379307/
Vidcentric                             https://jvz4.com/c/202927/376095
Viddeyo                                https://jvz6.com/c/202927/382326/
Videevolve                       https://jvz4.com/c/202927/381011/
Video Campaignor      https://jvz4.com/c/202927/387058/
Video Games                            https://jvz3.com/c/202927/184902/
VideoEnginePro                https://jvz2.com/c/202927/372916
VideoGameSuite                     https://jvz3.com/c/202927/366537/
VideoRobot Enterprise                https://jvz8.com/c/202927/291061
VidKreate                        https://jvz6.com/c/202927/386029/
VidMingo                           https://jvz6.com/c/202927/378359/
VidSnatcher                           https://jvz3.com/c/202927/342585
VidVoicer                      https://jvz1.com/c/202927/379983/
Vidzura                       https://jvz4.com/c/202927/385754/
Viral dash                            https://jvz6.com/c/202927/375959
Viral Quotes            https://jvz2.com/c/202927/386984/
VirtualReel                       https://jvz8.com/c/202927/376849
Vocalic                    https://jvz2.com/c/202927/383848/
VoiceBuddy                      https://jvz1.com/c/202927/342854
WebCop                         https://jvz4.com/c/202927/378683/
Webinarkit                       https://jvz3.com/c/202927/383937/
Webprimo                   https://jvz1.com/c/202927/379455/   Website Builder
WordPress Mastery                       https://jvz1.com/c/202927/386249/
WOW Backgrounds                      https://jvz3.com/c/202927/381615/
WowBackgraounds                       https://jvz2.com/c/202927/381556/
WP GDPR                                https://jvz8.com/c/202927/299907
WP Simulator                    https://jvz3.com/c/202927/46987/
Writer Arc           https://jvz1.com/c/202927/386602/
writing job                                  https://jvz8.com/c/202927/213027
XBrain Forex                           https://jvz3.com/c/202927/372305/
XFUNNELS                         https://jvz2.com/c/202927/310335
Xinemax                    https://jvz1.com/c/202927/381749/
YoDrive                    https://jvz2.com/c/202927/384700/
Your 3DPal                https://jvz2.com/c/202927/381685/
YTSuite                       https://jvzoo.com/c/202927/381179

How eBay Turned The Internet Into a Marketplace

The story of the modern web is often told through the stories of Google, Facebook, Amazon. But eBay was the first conqueror. One weekend in September 1995, a software engineer made a website. It wasn’t his first. At 28, Pierre Omidyar had followed the standard accelerated trajectory of Silicon Valley: he had learned to code in seventh grade, and was on track to becoming a millionaire before the age of 30, after having his startup bought by Microsoft. Now he worked for a company that made software for handheld computers, which were widely expected to be the next big thing.

But in his spare time, he liked to tinker with side projects on the internet. The idea for this particular project would be simple: a website where people could buy and sell. Buying and selling was still a relatively new idea online. In May 1995, Bill Gates had circulated a memo at Microsoft announcing that the internet was the company’s top priority. In July, a former investment banker named Jeff Bezos launched an online storefront called Amazon.com, which claimed to be “Earth’s biggest bookstore”. The following month, Netscape, creator of the most popular web browser, held its initial public offering (IPO).

By the end of the first day of trading, the company was worth almost $3bn – despite being unprofitable. Wall Street was paying attention. The dot-com bubble was starting to inflate. If the internet of 1995 inspired dreams of a lucrative future, the reality ran far behind. The internet may have been attracting millions of newcomers – there were nearly 45 million users in 1995, up 76% from the year before – but it wasn’t particularly user-friendly. Finding content was tricky: you could wander from one site to another by following the tissue of hyperlinks that connected them, or page through the handmade directory produced by Yahoo!, the preferred web portal before the rise of the modern search engine.

And there wasn’t much content to find: only 23,500 websites existed in 1995, compared to more than 17m five years later. Most of the sites that did exist were hideous and barely usable. But the smallness and slowness of the early web also lent it a certain charm. People were excited to be there, despite there being relatively little for them to do. They made homepages simply to say hello, to post pictures of their pets, to share their enthusiasm for Star Trek. They wanted to connect. Omidyar was fond of this form of online life. He had been a devoted user of the internet since his undergraduate days, and a participant in its various communities. He now observed the rising flood of dot-com money with some concern.

The corporations clambering on to the internet saw people as nothing more than “wallets and eyeballs”, he later told a journalist. Their efforts at commercialisation weren’t just crude and uncool, they also promoted a zombie-like passivity – look here, click here, enter your credit card number here – that threatened the participatory nature of the internet he knew. “I wanted to do something different,” Omidyar later recalled, “to give the individual the power to be a producer as well as a consumer.” This was the motivation for the website he built in September 1995. He called it AuctionWeb. Anyone could put up something for sale, anyone could place a bid, and the item went to the highest bidder. It would be a perfect market, just like you might find in an economics textbook.

Through the miracle of competition, supply and demand would meet to discover the true price of a commodity. One precondition of perfect markets is that everyone has access to the same information, and this is exactly what AuctionWeb promised. Everything was there for all to see. The site grew quickly. By its second week, the items listed for sale included a Yamaha motorcycle, a Superman lunchbox and an autographed Michael Jackson poster. By February 1996, traffic had grown brisk enough that Omidyar’s web hosting company increased his monthly fee, which led him to start taking a cut of the transactions to cover his expenses. Almost immediately, he was turning a profit. The side project had become a business.

But the perfect market turned out to be less than perfect. Disputes broke out between buyers and sellers, and Omidyar was frequently called upon to adjudicate. He didn’t want to have to play referee, so he came up with a way to help users work it out themselves: a forum. People would leave feedback on one another, creating a kind of scoring system. “Give praise where it is due,” he said in a letter posted to the site, “make complaints where appropriate.” The dishonest would be driven out, and the honest would be rewarded – but only if users did their part. “This grand hope depends on your active participation,” he wrote.

The value of AuctionWeb would rely on the contributions of its users. The more they contributed, the more useful the site would be. The market would be a community, a place made by its members. They would become both consumers and producers, as Omidyar hoped, and among the things they produced would be the content that filled the site. By the summer of 1996, AuctionWeb was generating $10,000 a month. Omidyar decided to quit his day job and devote himself to it full-time. He had started out as a critic of the e-commerce craze and had ended up with a successful e-commerce company. In 1997, he renamed it eBay. Ebay was one of the first big internet companies. It became profitable early, grew into a giant of the dot-com era, survived the implosion of the dot-com bubble, and still ranks among the largest e-commerce firms in the world.

But what makes eBay particularly interesting is how, in its earliest incarnation, it anticipated many of the key features that would later define the phenomenon commonly known as the “platform”. Ebay wasn’t just a place where collectors waged late-night bidding wars over rare Beanie Babies. In retrospect, it also turned out to be a critical hinge in the history of the internet. Omidyar’s site pioneered the basic elements that would later enable Google, Facebook and the other tech giants to unlock the profit potential of the internet by “platformising” it.

None of the metaphors we use to think about the internet are perfect, but “platform” is among the worst. The term originally had a specific technical meaning: it meant something that developers build applications on top of, such as an operating system. But the word has since come to refer to various kinds of software that run online, particularly those deployed by the largest tech firms. The scholar Tarleton Gillespie has argued that this shift in the use of the word “platform” is strategic. By calling their services “platforms”, companies such as Google can project an aura of openness and neutrality. They can present themselves as playing a supporting role, merely facilitating the interactions of others.

Their control over the spaces of our digital life, and their active role in ordering such spaces, is obscured. “Platform” isn’t just imprecise. It’s designed to mystify rather than clarify. A more useful metaphor for understanding the internet, one that has guided its architects from the beginning, is the stack. A stack is a set of layers piled on top of one another. Think of a house: you have the basement, the first floor, the second floor and so on, all the way up to the roof. The things that you do further up in a house often depend on systems located further down. If you take a shower, a water heater in the basement warms up the cold water being piped into your house and then pipes it up to your bathroom.

The internet also has a basement, and its basement also consists largely of pipes. These pipes carry data, and everything you do further up the stack depends on these pipes working properly. Towards the top of the stack is where the sites and apps live. This is where we experience the internet, through the pixels of our screens, in emails or tweets or streams. The best way to understand what happens on these sites and apps – on what tech companies call “platforms” – is to understand them as part of the broader story of the internet’s privatisation.

The internet started out in the 1970s as an experimental technology created by US military researchers. In the 80s, it grew into a government-owned computer network used primarily by academics. Then, in the 90s, privatisation began. The privatisation of the internet was a process, not an event. It did not involve a simple transfer of ownership from the public sector to the private, but rather a more complex movement whereby corporations programmed the profit motive into every level of the network. A system built by scientists for research was renovated for the purpose of profit maximisation. This took hardware, software, legislation, entrepreneurship. It took decades. And it touched all of the internet’s many pieces.

The process of privatization started with the pipes, and then worked its way up the stack. In April 1995, only five months before Omidyar made the website that would become eBay, the government allowed the private sector to take over control of the network’s plumbing. Households and businesses were eager to get online, and telecoms companies made money by helping them access the internet. But getting people online was a small fraction of the system’s total profit potential. What really got investors’ capital flowing was the possibility of making money from what people did online. In other words, the next step was figuring out how to maximize profit in the upper floors, where people actually use the internet. The real money lay not in monetizing access, but in monetizing activity.

This is what Omidyar did so effectively when he created a place where people wanted to buy and sell goods online, and took a cut of their transactions. The dot-com boom began with Netscape’s explosive IPO in August 1995. Over the following years, tens of thousands of startups were founded and hundreds of billions of dollars were invested in them. Venture capital entered a manic state: the total amount of US venture-capital investment increased more than 1,200% from 1995 to 2000. Hundreds of dot-com companies went public and promptly soared in value: at their peak, technology stocks were worth more than $5tn.

When eBay went public in 1998, it was valued at more than $2bn on the first day of trading; the continued ascent of its stock price over the next year made Omidyar a billionaire. Yet most of the startups that attracted huge investment during these years didn’t actually make money. For all the hype, profits largely failed to materialize, and in 2000 the bubble burst. From March to September, the 280 stocks in the Bloomberg US Internet Index lost almost $1.7tn. “It’s rare to see an industry evaporate as quickly and completely,” a CNN journalist remarked. The following year brought more bad news. The dot-com era was dead.

Today, the era is typically remembered as an episode of collective insanity – as an exercise in what Alan Greenspan, during his contemporaneous tenure as chair of the Federal Reserve, famously called “irrational exuberance”. Pets.com, a startup that sold pet supplies online, became the best-known symbol of the period’s stupidity, and a touchstone for retrospectives ever since. Never profitable, the company spent heavily on advertising, including a Super Bowl spot; it raised $82.5m in its IPO in February 2000 and imploded nine months later.

Arrogance, greed, magical thinking and bad business decisions all contributed to the failure of the dot-com experiment. Yet none of these were decisive. The real problem was structural. While their investors and executives probably wouldn’t have understood it in these terms, dot-com companies were trying to advance the next stage of the internet’s privatisation – namely, by pushing the privatization of the internet up the stack. But the computational systems that could make such a push feasible were not yet in place. Companies still struggled to turn a profit from user activity.

In his analysis of capitalist development, Karl Marx drew a distinction between the “formal” and “real” subsumption of labour by capital. In formal subsumption, an existing labour process remains intact, but is now performed on a capitalist basis. A peasant who used to grow his own food becomes a wage labourer on somebody else’s farm. The way he works the land stays the same. In real subsumption, by contrast, the labour process is revolutionised to meet the requirements of capital. Formerly, capital inherited a process; now, it remakes the process. Our agricultural worker becomes integrated into the industrialised apparatus of the modern factory farm.

The way he works completely changes: his daily rhythms bear little resemblance to those of his peasant predecessors. And the new arrangement is more profitable for the farm’s owner, having been explicitly organised with that end in mind. This is a useful lens for thinking about the evolution of the internet, and for understanding why the dot-coms didn’t succeed. The internet of the mid-to-late 1990s was under private ownership, but it had not yet been optimised for profit. It retained too much of its old shape as a system designed for researchers, and this shape wasn’t conducive to the new demands being placed on it. Formal subsumption had been achieved, in other words, but real subsumption remained elusive.

Accomplishing the latter would involve technical, social and economic developments that made it possible to construct new kinds of systems. These systems are the digital equivalents of the modern factory farm. They represent the long-sought solution to the problem that consumed and ultimately defeated the dot-com entrepreneurs: how to push privatisation up the stack. And eBay offered the first glimpse of what that solution looked like.Ebay enlisted its users in its own creation. They were the ones posting items for sale and placing bids and writing feedback on one another in the forum. Without their contributions, the site would cease to exist.

Omidyar was tapping into a tradition by setting up eBay in this way. In 1971, a programmer named Ray Tomlinson invented email. This was before the internet existed: Tomlinson was using its precursor, Arpanet, a cutting-edge network that the Pentagon created to link computers across the country. Email became wildly popular on Arpanet: just two years after its invention, a study found that it made up three-quarters of all network traffic. As the internet grew through the 1980s, email found an even wider reach. The ability to exchange messages instantaneously with someone far away was immensely appealing; it made new kinds of collaboration and conversation possible, particularly through the mailing lists that formed the first online communities.

Email was more than just a useful tool. It helped humanize the internet, making a cold assemblage of cables and computers feel inhabited. The internet was somewhere you could catch up with friends and get into acrimonious arguments with strangers. It was somewhere to talk about politics or science fiction or the best way to implement a protocol. Other people were the main attraction. Even the world wide web was made with community in mind. “I designed it for a social effect – to help people work together,” its creator, Tim Berners-Lee, would later write.

Community is what Omidyar liked best about the internet, and what he feared the dot-com gold rush would kill. He wasn’t alone in this: one could find dissidents railing against the forces of commercialisation on radical mailing lists. But Omidyar was no anti-capitalist. He was a libertarian: he believed in the liberating power of the market. He didn’t oppose commercialisation as such, just the particular form it was taking. The companies opening cheesy digital storefronts and plastering the web with banner ads were doing commercialisation poorly. They were treating their users as customers. They didn’t understand that the internet was a social medium.

Ebay, by contrast, would be firmly rooted in this fact. From its first days as AuctionWeb, the site described itself as a community, and this self-definition became integral to its identity and to its operation. For Omidyar, the point wasn’t to defend the community from the market but rather to recast the community as a market – to fuse the two. No less a figure than Bill Gates saw the future of the internet in precisely these terms. In 1995, the same year that Omidyar launched AuctionWeb, Gates co-authored a book called The Road Ahead. In it, the Microsoft CEO laid out his vision for the internet as “the ultimate market”: “It will be where we social animals will sell, trade, invest, haggle, pick stuff up, argue, meet new people, and hang out.

Think of the hustle and bustle of the New York Stock Exchange or a farmers’ market or of a bookstore full of people looking for fascinating stories and information. All manner of human activity takes place, from billion-dollar deals to flirtations.” Here, social relationships have merged so completely with market relationships as to become indistinguishable. The internet is the instrument of this union; it brings people together, but under the sign of capital. Gates believed his dream was at least a decade from being realised. Yet by the time his book came out, AuctionWeb was already making progress toward achieving it.

Combining the community with the market was a lucrative innovation. The interactions that occurred in the guise of the former greatly enhanced the financial value of the latter. Under the banner of community, AuctionWeb’s buyers and sellers were encouraged to perform unpaid activities that made the site more useful, such as rating one another in the feedback forum or sharing advice on shipping. And the more people participated, the more attractive a destination it became. More people using AuctionWeb meant more items listed for sale, more buyers bidding in auctions, more feedback posted to the forum – in short, a more valuable site.

This phenomenon – the more users something has, the more valuable it becomes – is what economists call network effects. On the web, accommodating growth was fairly easy: increasing one’s hosting capacity was a simpler and cheaper proposition than the brick-and-mortar equivalent. And doing so was well worth it because, at a certain size, network effects locked in advantages that were hard for a competitor to overcome. A second, related strength was the site’s role as a middleman. In an era when many dot-coms were selling goods directly – Pets.com paid a fortune on postage to ship pet food to people’s doors – Omidyar’s company connected buyers and sellers instead, and pushed the cost of postage on to them.

This enabled it to profit from users’ transactions while remaining extremely lean. It had no inventory, no warehouses – just a website. But AuctionWeb was not only a middleman. It was also a legislator and an architect, writing the rules for how people could interact and designing the spaces where they did so. This wasn’t in Omidyar’s plan. He initially wanted a market run by its members, an ideal formed by his libertarian beliefs. His creation of the feedback forum likely reflected an ideological investment in the idea that markets were essentially self-organising, as much as his personal interest in no longer having to mediate various disputes.

Contrary to libertarian assumptions, however, the market couldn’t function without the site’s ability to exercise a certain kind of sovereignty. The feedback forum is a good example: users started manipulating it, leaving praise for their friends and sending mobs of malicious reviewers after their enemies. The company would be compelled to intervene again and again. It did so not only to manage the market but also to expand it by attracting more buyers and sellers through new categories of goods and by expanding into new countries – an imperative that shareholders imposed after eBay went public in 1998.

“Despite its initial reluctance, the company stepped increasingly into a governance role,” writes the sociologist Keyvan Kashkooli, in his study of eBay’s evolution. Increasing profitability required managing people’s behaviour, whether through the code that steered them through the site or the user agreements that governed their activities on it. Thanks to network effects, and its status as both middleman and sovereign, eBay easily turned a profit. When the crash of 2000–01 hit, it survived with few bruises. And in the aftermath of the crash, as an embattled industry, under pressure from investors, tried to reinvent itself, the ideas that it came up with had much in common with those that had formed the basis for eBay’s early success.

For the most part, eBay’s influence was neither conscious nor direct. But the affinities were unmistakable. Omidyar’s community market of the mid-1990s was a window into the future. By later standards it was fairly primitive, existing as it did within the confines of an internet not yet remodelled for the purpose of profit maximisation. But the systems that would accomplish that remodelling, that more total privatisation of the internet, would do so by elaborating the basic patterns that Omidyar had applied. These systems would be called platforms, but what they resembled most were shopping malls.

The first modern shopping mall was built in Edina, Minnesota, in 1956. Its architect, Victor Gruen, was a Jewish socialist from Vienna who had fled the Nazis and disliked American car culture. He wanted to lure midcentury suburbanites out of their Fords and into a place that recalled the “rich public social life” of a great European city. He hoped to offer them not only shops but libraries and cinemas and community centres. Above all, his mall would be a space for interaction: an “outlet for that primary human instinct to mingle with other humans”. Unlike in a city, however, this mingling would take place within a controlled setting. The chaos of urban life would be displaced by the discipline of rational design.

As Gruen’s invention caught on, the grander parts of his vision fell away. But the idea of an engineered environment that paired commerce with a public square remained. Gruen’s legacy would be a kind of capitalist terrarium, nicely captured by what urban planners call a “privately owned public space”. The systems that dominate life at the upper end of the stack are best understood, to borrow an insight from the scholar Jathan Sadowski, as shopping malls. The shopping malls of the internet – Google, Facebook, Amazon – are nothing if not privately owned public spaces. Calling themselves platforms, they are in fact corporate enclosures, with a wide range of interactions transpiring inside of them.

Just like in a real mall, some of these interactions are commercial, such as buying clothes from a merchant, while others are social, such as hanging out with friends. But what distinguishes the online mall from the real mall is that within the former, everything one does makes data. Your clicks, chats, posts, searches – every move, however small, leaves a digital trace. And these traces present an opportunity to create a completely new set of arrangements. Real malls are in the rental business: the owner charges tenants rent, essentially taking a slice of their revenues. Online malls can make money more or less the same way, as eBay demonstrated early on, by taking a cut of the transactions they facilitate.

But, as Sadowski points out, online malls are also able to capture another kind of rent: data rent. They can collect and make money from those digital traces generated by the activities that occur within them. And since they control every square inch of the enclosure, and because modifying the enclosure is simply a matter of deploying new code, they can introduce architectural changes in order to cause those activities to generate more traces, or traces of different kinds. These traces turn out to be very valuable. So valuable, in fact, that amassing and analysing them have become the primary functions of the online mall. Like Omidyar’s community market, the online mall facilitates interactions, writes the rules for those interactions, and benefits from having more people interacting with one another.

But in the online mall, these interactions are recorded, interpreted and converted into money in a range of ways. Data can help sell targeted advertising. It can help build algorithmic management systems that siphon more profit out of each worker. It can help train machine learning models in order to develop and refine automated services like chatbots, which can in turn reduce labour costs and open new revenue streams. Data can also sustain faith among investors that a tech company is worth a ton of money, simply because it has a ton of data. This is what distinguishes online malls from their precursors: they are above all designed for making, and making use of, data. Data is their organizing principle and essential ingredient.

Data is sometimes compared to oil, but a better analogy might be coal. Coal was the fuel that powered the steam engine. It propelled the capitalist reorganization of manufacturing from an artisanal to an industrial basis, from the workshop to the factory, in the 19th century. Data has played a comparable role. It has propelled the capitalist reorganization of the internet, banishing the remnants of the research network and perfecting the profit engine. Very little of this vastly complex machinery could be foreseen from the vantage point of 1995.

But the arrival of AuctionWeb represented a large step toward making it possible. The story of the modern internet is often told through the stories of Google, Facebook, Amazon and the other giants that have come to conquer our online life.  But their conquests were preceded and prefigured by another, one that started as a side project and stumbled into success by coming up with the basic blueprint for making a lot of money on the internet.

By

Source: ‘Wallets and eyeballs’: how eBay turned the internet into a marketplace | eBay | The Guardian

More contents:

eBay, Inc. 2021 Annual Report (Form 10-K)”. U.S. Securities and Exchange Commission.

Global Trade: 1. Finding International Items On eBay”

Skype and PayPal – A Different Set of Rules”.

PayPal Spinoff Day Has Arrived — What Does It Mean for Investors?”.

The Perfect Store.

How did eBay start?”

The perfect store

The eBay Business Model”

The Myths of Innovation

Ebay Enters The NFT Space, Launches First NFT Collection

“EBay Founder Pierre Omidyar Steps Down From Board”.

“Brand New: eBay Settles for Lowest Bid”

eBay selling fees”.

Ebay’s history – know your roots!”.

eBay Guides – Tickets Buying Guide”.

Taxes and import charges”.

eBay Inc. – eBay Inc. Outlines Global Business Strategy”

The brand that auctioned the www: eBay

More Remote Working Apps:

https://quintexcapital.com/?ref=arminham     Quintex Capital

https://www.genesis-mining.com/a/2535466   Genesis Mining

 http://www.bevtraders.com/?ref=arminham   BevTraders

https://www.litefinance.com/?uid=929237543  LiteTrading

https://jvz8.com/c/202927/369164  prime stocks

  https://jvz3.com/c/202927/361015  content gorilla

  https://jvz8.com/c/202927/366443  stock rush  

 https://jvz1.com/c/202927/373449  forrk   

https://jvz3.com/c/202927/194909  keysearch  

 https://jvz4.com/c/202927/296191  gluten free   

https://jvz1.com/c/202927/286851  diet fitness diabetes  

https://jvz8.com/c/202927/213027  writing job  

 https://jvz6.com/c/202927/108695  postradamus

https://jvz1.com/c/202927/372094  stoodaio

 https://jvz4.com/c/202927/358049  profile mate  

 https://jvz6.com/c/202927/279944  senuke  

 https://jvz8.com/c/202927/54245   asin   

https://jvz8.com/c/202927/370227  appimize

 https://jvz8.com/c/202927/376524  super backdrop

 https://jvz6.com/c/202927/302715  audiencetoolkit

 https://jvz1.com/c/202927/375487  4brandcommercial

https://jvz2.com/c/202927/375358  talkingfaces

 https://jvz6.com/c/202927/375706  socifeed

 https://jvz2.com/c/202927/184902  gaming jobs

 https://jvz6.com/c/202927/88118   backlinkindexer

 https://jvz1.com/c/202927/376361  powrsuite  

https://jvz3.com/c/202927/370472  tubeserp  

https://jvz4.com/c/202927/343405  PR Rage  

https://jvz6.com/c/202927/371547  design beast  

https://jvz3.com/c/202927/376879  commission smasher

 https://jvz2.com/c/202927/376925  MT4Code System

https://jvz6.com/c/202927/375959  viral dash

https://jvz1.com/c/202927/376527  coursova

 https://jvz4.com/c/202927/144349  fanpage

https://jvz1.com/c/202927/376877  forex expert  

https://jvz6.com/c/202927/374258  appointomatic

https://jvz2.com/c/202927/377003  woocommerce

https://jvz6.com/c/202927/377005  domainname

 https://jvz8.com/c/202927/376842  maxslides

https://jvz8.com/c/202927/376381  ada leadz

https://jvz2.com/c/202927/333637  eyeslick

https://jvz1.com/c/202927/376986  creaitecontentcreator

https://jvz4.com/c/202927/376095  vidcentric

https://jvz1.com/c/202927/374965  studioninja

https://jvz6.com/c/202927/374934  marketingblocks

https://jvz3.com/c/202927/372682  clipsreel  

https://jvz2.com/c/202927/372916  VideoEnginePro

https://jvz1.com/c/202927/144577  BarclaysForexExpert

https://jvz8.com/c/202927/370806  Clientfinda

https://jvz3.com/c/202927/375550  Talkingfaces

https://jvz1.com/c/202927/370769  IMSyndicator

https://jvz6.com/c/202927/283867  SqribbleEbook

https://jvz8.com/c/202927/376524  superbackdrop

https://jvz8.com/c/202927/376849  VirtualReel

https://jvz2.com/c/202927/369837  MarketPresso

https://jvz1.com/c/202927/342854  voiceBuddy

https://jvz6.com/c/202927/377211  tubeTargeter

https://jvz6.com/c/202927/377557  InstantWebsiteBundle

https://jvz6.com/c/202927/368736  soronity

https://jvz2.com/c/202927/337292  DFY Suite 3.0 Agency+ information

https://jvz8.com/c/202927/291061  VideoRobot Enterprise

https://jvz8.com/c/202927/327447  Klippyo Kreators

https://jvz8.com/c/202927/324615  ChatterPal Commercial

https://jvz8.com/c/202927/299907  WP GDPR Fix Elite Unltd Sites

https://jvz8.com/c/202927/328172  EngagerMate

https://jvz3.com/c/202927/342585  VidSnatcher Commercial

https://jvz3.com/c/202927/292919  myMailIt

https://jvz3.com/c/202927/320972  Storymate Luxury Edition

https://jvz2.com/c/202927/320466  iTraffic X – Platinum Edition

https://jvz2.com/c/202927/330783  Content Gorilla One-time

https://jvz2.com/c/202927/301402  Push Button Traffic 3.0 – Brand New

https://jvz2.com/c/202927/321987  SociCake Commercial

https://jvz2.com/c/202927/289944  The Internet Marketing

 https://jvz2.com/c/202927/297271  Designa Suite License

https://jvz2.com/c/202927/310335  XFUNNELS FE Commercial 

https://jvz2.com/c/202927/291955  ShopABot

https://jvz2.com/c/202927/312692  Inboxr

https://jvz2.com/c/202927/343635  MediaCloudPro 2.0 – Agency

 https://jvz2.com/c/202927/353558  MyTrafficJacker 2.0 Pro+

https://jvz2.com/c/202927/365061  AIWA Commercial

https://jvz2.com/c/202927/357201  Toon Video Maker Premium

https://jvz2.com/c/202927/351754  Steven Alvey’s Signature Series

https://jvz2.com/c/202927/344541  Fade To Black

https://jvz2.com/c/202927/290487  Adsense Machine

https://jvz2.com/c/202927/315596  Diddly Pay’s DLCM DFY Club

https://jvz2.com/c/202927/355249  CourseReel Professional

https://jvz2.com/c/202927/309649  SociJam System

https://jvz2.com/c/202927/263380  360Apps Certification

 https://jvz2.com/c/202927/359468  LocalAgencyBox

https://jvz2.com/c/202927/377557  Instant Website Bundle

https://jvz2.com/c/202927/377194  GMB Magic Content

https://jvz2.com/c/202927/376962  PlayerNeos VR

https://jvz8.com/c/202927/381812/  BrandElevate Bundle information

https://jvz4.com/c/202927/381807/ BrandElevate Ultimate

https://jvz2.com/c/202927/381556/ WowBackgraounds Plus

https://jvz4.com/c/202927/381689/  Your3DPal Ultimate

https://jvz2.com/c/202927/380877/  BigAudio Club Fast Pass

https://jvz3.com/c/202927/379998/ Podcast Masterclass

https://jvz3.com/c/202927/366537/  VideoGameSuite Exclusive

https://jvz8.com/c/202927/381148/ AffiliateMatic

https://jvzoo.com/c/202927/381179  YTSuite Advanced

https://jvz1.com/c/202927/381749/  Xinemax 2.0 Commercial

https://jvzoo.com/c/202927/382455  Living An Intentional Life

https://jvzoo.com/c/202927/381812  BrandElevate Bundle

https://jvzoo.com/c/202927/381935 Ezy MultiStores

https://jvz2.com/c/202927/381194/  DFY Suite 4.0 Agency

https://jvzoo.com/c/202927/381761  ReVideo

https://jvz4.com/c/202927/381976/  AppOwls Bundle

https://jvz8.com/c/202927/381950/  TrafficForU

https://jvz3.com/c/202927/381615/  WOW Backgrounds 2.0

https://jvz4.com/c/202927/381560   ALL-in-One HD Stock Bundle

https://jvz6.com/c/202927/382326/   Viddeyo Bundle

https://jvz8.com/c/202927/381617/  The Forex Joustar

 

 

Where Do Millionaires Keep Their Money?

Where do millionaires keep their money? High net worth individuals put money into different classifications of financial and real assets, including stocks, mutual funds, retirement accounts and real estate. Most of the 20.27 million millionaires in the U.S. did not inherit their money; only about 20% inherited their money. More than two-thirds of all millionaires are entrepreneurs. Here are some of the places the genuinely rich keep their money.

Cash and Cash Equivalents

Many, and perhaps most, millionaires are frugal. If they spent their money, they would not have any to increase wealth. They spend on necessities and some luxuries, but they save and expect their entire families to do the same. Many millionaires keep a lot of their money in cash or highly liquid cash equivalents.

They establish an emergency account before ever starting to invest. Millionaires bank differently than the rest of us. Any bank accounts they have are handled by a private banker who probably also manages their wealth. There is no standing in line at the teller’s window.

Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. This is to offset any market downturns and to have cash available as insurance for their portfolio. Cash equivalents, financial instruments that are almost as liquid as cash. are popular investments for millionaires. Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills.

Some millionaires keep their cash in Treasury bills that they keep rolling over and reinvesting. They liquidate them when they need the cash. Treasury bills are short-term notes issued by the U.S government to raise money. Treasury bills are usually purchased at a discount. When you sell them, the difference between the face value and selling price is your profit. Warren Buffett, CEO of Berkshire Hathaway, has a portfolio full of money market accounts and Treasury bills.

Millionaires also have zero-balance accounts with private banks. They leave their money in cash and cash equivalents and they write checks on their zero-balance account. At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day. Millionaires don’t worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank.

Other millionaires have safe deposit boxes full of cash denominated in many different currencies. These safe deposit boxes are located all over the world and each currency is held in a country where transactions are conducted using that currency.

Real Estate

For more than 200 years, investing in real estate has been the most popular investment for millionaires to keep their money. During all these years, real estate investments have been the primary way millionaires have had of making and keeping their wealth. The trend started with buying a primary home and then other residences, usually for tenants. After buying some personal real estate, then they have started buying commercial real estate like office buildings, hotels, stadiums, bridges and more.

Millionaires often have large real estate portfolios. Once they have established themselves as a buyer in the real estate market, real estate agents start bringing them deals and they find it easy to obtain financing. Large investors have many millions tied up in real estate. Real estate is not an investment to depend on for cash, but it is a lucrative investment in the long run and a tried and true investment for millionaires because they like passive income and find that real estate provides it.

Stocks and Stock Funds

Some millionaires are all about simplicity. They invest in index funds and dividend-paying stocks. They like the passive income from equity securities just like they like the passive rental income that real estate provides. They simply don’t want to use their time managing investments.

Ultra-rich investors may hold a controlling interest in one or more major companies. But, many millionaires hold a portfolio of only a few equity securities. Many may hold index funds since they earn decent returns and you don’t have to spend time managing them. They also have low management fees and excellent diversification.

Millionaires also like dividend-paying stocks for the passive income they provide. Of course, they are also interested in capital appreciation but, for some, that’s less of a concern than generating current income.

Private Equity and Hedge Funds

Unless you are a multimillionaire, you may not participate in a hedge fund or buy into a private equity fund. Public equity is well known since its shares trade on stock exchanges. One of its advantages is its liquidity. You can readily liquidate your public equity or shares of stock. Private equity funds, on the other hand, generally gets their investments from large organizations like universities or pension funds.

Investors of private equity funds have to be accredited investors with a certain net worth, usually at least $250,000. Accredited investors can be individuals as well as organizations, but they are defined by regulations. In other areas, private equity funds do not have to conform to as many regulations as public equity does. Some of the ultra-rich, if they are accredited investors, do invest in private equity.

Hedge funds are not the same as private equity. Hedge funds use pooled funds and pursue several strategies to earn outsized returns for their investors. Hedge funds invest in whatever fund managers think will earn the highest short-term profits possible.

Commodities

Commodities, like gold, silver, mineral rights or cattle, to name a few, are also stores of value for millionaires. But they require storage and have a level of complexity that many millionaires simply don’t want to deal with.

Alternative Investments

Some millionaires, along with the ultra-rich, keep a portion of their money in other alternative investments like such tangible assets as fine art, expensive musical instruments or rare books. Also, there are millionaires and the ultra-rich that have investments in intellectual property rights such as the rights to songs or movies. These can be very lucrative investments.

Cryptocurrency

It is estimated that there are around 100,000 cryptocurrency millionaires out there with the majority holding Bitcoin. To try to make your fortune in cryptocurrency, you have to be willing to take on some risk and many millionaires don’t have an appetite for risk.

You can take a small portion of a millionaire’s wealth and invest in one of the different cryptocurrencies. Plenty of people have become millionaires this way. Some have lost their money. More and more, cryptocurrency is becoming accepted as a legitimate investment that deserves a look when trying to accumulate wealth.

The Bottom Line

Millionaires have many different investment philosophies, so it’s difficult to generalize concerning where they keep their money. However, all of the above are legitimate investments for millionaires. They have a desire for a reduction of their risk, so many prefer diversified investment portfolios. More than one of these investments can be combined to try to enhance wealth.

Tips on Investing

Would you like to investigate how your investments are growing? Check out SmartAsset’s free investment calculator.

Do you have questions about how to start investing? It’s wise to begin by consulting a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals

By:

Source: Where Do Millionaires Keep Their Money?

More contents:

More Remote Working Apps:

https://quintexcapital.com/?ref=arminham     Quintex Capital

https://www.genesis-mining.com/a/2535466   Genesis Mining

 http://www.bevtraders.com/?ref=arminham   BevTraders

https://www.litefinance.com/?uid=929237543  LiteTrading

https://jvz8.com/c/202927/369164  prime stocks

  https://jvz3.com/c/202927/361015  content gorilla

  https://jvz8.com/c/202927/366443  stock rush  

 https://jvz1.com/c/202927/373449  forrk   

https://jvz3.com/c/202927/194909  keysearch  

 https://jvz4.com/c/202927/296191  gluten free   

https://jvz1.com/c/202927/286851  diet fitness diabetes  

https://jvz8.com/c/202927/213027  writing job  

 https://jvz6.com/c/202927/108695  postradamus

https://jvz1.com/c/202927/372094  stoodaio

 https://jvz4.com/c/202927/358049  profile mate  

 https://jvz6.com/c/202927/279944  senuke  

 https://jvz8.com/c/202927/54245   asin   

https://jvz8.com/c/202927/370227  appimize

 https://jvz8.com/c/202927/376524  super backdrop

 https://jvz6.com/c/202927/302715  audiencetoolkit

 https://jvz1.com/c/202927/375487  4brandcommercial

https://jvz2.com/c/202927/375358  talkingfaces

 https://jvz6.com/c/202927/375706  socifeed

 https://jvz2.com/c/202927/184902  gaming jobs

 https://jvz6.com/c/202927/88118   backlink indexer  https://jvz1.com/c/202927/376361  powrsuite  

https://jvz3.com/c/202927/370472  tubeserp  

https://jvz4.com/c/202927/343405  PR Rage  

https://jvz6.com/c/202927/371547  design beast  

https://jvz3.com/c/202927/376879  commission smasher

 https://jvz2.com/c/202927/376925  MT4Code System

https://jvz6.com/c/202927/375959  viral dash

https://jvz1.com/c/202927/376527  coursova

 https://jvz4.com/c/202927/144349  fanpage

https://jvz1.com/c/202927/376877  forex expert  

https://jvz6.com/c/202927/374258  appointomatic

https://jvz2.com/c/202927/377003  woocommerce

https://jvz6.com/c/202927/377005  domainname

 https://jvz8.com/c/202927/376842  maxslides

https://jvz8.com/c/202927/376381  ada leadz

https://jvz2.com/c/202927/333637  eyeslick

https://jvz1.com/c/202927/376986  creaitecontentcreator

https://jvz4.com/c/202927/376095  vidcentric

https://jvz1.com/c/202927/374965  studioninja

https://jvz6.com/c/202927/374934  marketingblocks https://jvz3.com/c/202927/372682  clipsreel  

https://jvz2.com/c/202927/372916  VideoEnginePro

https://jvz1.com/c/202927/144577  BarclaysForexExpert

https://jvz8.com/c/202927/370806  Clientfinda

https://jvz3.com/c/202927/375550  Talkingfaces

https://jvz1.com/c/202927/370769  IMSyndicator

https://jvz6.com/c/202927/283867  SqribbleEbook

https://jvz8.com/c/202927/376524  superbackdrop

https://jvz8.com/c/202927/376849  VirtualReel

https://jvz2.com/c/202927/369837  MarketPresso

https://jvz1.com/c/202927/342854  voiceBuddy

https://jvz6.com/c/202927/377211  tubeTargeter

https://jvz6.com/c/202927/377557  InstantWebsiteBundle

https://jvz6.com/c/202927/368736  soronity

https://jvz2.com/c/202927/337292  DFY Suite 3.0 Agency+ information

https://jvz8.com/c/202927/291061  VideoRobot Enterprise

https://jvz8.com/c/202927/327447  Klippyo Kreators

https://jvz8.com/c/202927/324615  ChatterPal Commercial

https://jvz8.com/c/202927/299907  WP GDPR Fix Elite Unltd Sites

https://jvz8.com/c/202927/328172  EngagerMate

https://jvz3.com/c/202927/342585  VidSnatcher Commercial

https://jvz3.com/c/202927/292919  myMailIt

https://jvz3.com/c/202927/320972  Storymate Luxury Edition

https://jvz2.com/c/202927/320466  iTraffic X – Platinum Edition

https://jvz2.com/c/202927/330783  Content Gorilla One-time

https://jvz2.com/c/202927/301402  Push Button Traffic 3.0 – Brand New

https://jvz2.com/c/202927/321987  SociCake Commercial https://jvz2.com/c/202927/289944  The Internet Marketing

 https://jvz2.com/c/202927/297271  Designa Suite License

https://jvz2.com/c/202927/310335  XFUNNELS FE Commercial 

https://jvz2.com/c/202927/291955  ShopABot

https://jvz2.com/c/202927/312692  Inboxr

https://jvz2.com/c/202927/343635  MediaCloudPro 2.0 – Agency

 https://jvz2.com/c/202927/353558  MyTrafficJacker 2.0 Pro+

https://jvz2.com/c/202927/365061  AIWA Commercial

https://jvz2.com/c/202927/357201  Toon Video Maker Premium

https://jvz2.com/c/202927/351754  Steven Alvey’s Signature Series

https://jvz2.com/c/202927/344541  Fade To Black

https://jvz2.com/c/202927/290487  Adsense Machine

https://jvz2.com/c/202927/315596  Diddly Pay’s DLCM DFY Club

https://jvz2.com/c/202927/355249  CourseReel Professional

https://jvz2.com/c/202927/309649  SociJam System

https://jvz2.com/c/202927/263380  360Apps Certification

 https://jvz2.com/c/202927/359468  LocalAgencyBox

https://jvz2.com/c/202927/377557  Instant Website Bundle

https://jvz2.com/c/202927/377194  GMB Magic Content

https://jvz2.com/c/202927/376962  PlayerNeos VR

%d bloggers like this: