Latest news with #DouglasBoneparth
CNBC
25-06-2025
- Business
- CNBC
Buy now, pay later plans will soon impact your credit score—what you need to know
One of the benefits of buy now, pay later loans is changing. FICO, the company that calculates most of Americans' credit scores, announced Monday it would be releasing a credit score model this fall that considers BNPL loans, The Wall Street Journal first reported. Banks and lenders will be able to see one score that considers users' BNPL loans and one that does not, and decide which to use as they consider borrowers' creditworthiness, WSJ reports. The three credit reporting bureaus — Equifax, Experian and TransUnion — can then decide which score borrowers see and what's included in their credit reports. "This is an area where I welcome greater controls when it comes to borrowing," says Douglas Boneparth, a certified financial planner and founder of Bone Fide Wealth. Boneparth recently called BNPL plans a "scam" in a LinkedIn post. "If someone who's demonstrated bad borrowing behavior in the past is trying to continue that behavior through buy now, pay later programs, but now is unable to do that because [of] credit reporting, then I welcome those types of controls," he added. Currently, BNPL plans don't directly impact users' credit scores. There's no hard inquiry for users to get approved for the installment loans and if they don't make their payments on time, they typically incur late fees or interest fees. However, they could eventually have their debt sold to a debt collector, at which point the loans could affect their credit scores. Around 40% of BNPL users say no impact to their credit score is one of the top benefits of the plans, according to a recent survey of over 1,000 Americans by affiliate marketing agency PartnerCentric. The same survey found that 45% of users wouldn't change their BNPL use if the plans started affecting their credit score. On the surface, BNPL plans could be useful tools for consumers who may have limited or poor credit histories but need to finance major purchases. In 2022, nearly two-thirds of BNPL loans went to users with low credit scores, a Consumer Finance Protection Bureau analysis found. But data shows some concerning behavior among BNPL users, including taking out multiple loans at once and carrying higher balances, on average, than non-BNPL users, CFPB found. Around 63% of BNPL users took out multiple loans at the same time in the last year and 33% of users borrowed from multiple lenders. Further, partnerships like delivery app Doordash's partnership with Klarna have critics like Boneparth sounding alarm bells because they seem to encourage users to finance smaller purchases that generally shouldn't require a loan. "I think there's a world where buy now, pay later could be a useful tool to help young or early borrowers build good credit, but given the current framework and behaviors, it just doesn't seem that way," Boneparth says. BNPL users routinely spend more than non-users, a recent study showed. Plus, 41% of BNPL users were late on a payment in the last year, a recent LendingTree study found. More traditional methods of building credit, such as using a secured credit card or opening a regular credit card with a relatively small limit, have guardrails in place to help prevent consumers from overextending themselves financially, Boneparth says. But BNPL plans typically don't have those kinds of limits or credit checks, which can allow users to overspend or take on numerous loans at once. Of course, plenty of people get themselves into trouble using traditional financing like credit cards. Ultimately, it's up to individuals to learn how to use financing options wisely. "Using credit requires discipline," Boneparth says. "Whether it's credit card lenders or buy now pay later programs, it is not a great consequence when you cannot make good on [your loans]."
CNBC
24-06-2025
- Business
- CNBC
The U.S. gained 1,000 millionaires a day on average in 2024, new report finds
The number of millionaires in the U.S. grew by an average of 1,000 people a day in 2024, according to new data from UBS. The U.S. saw the fastest growth of its millionaire population of any nation worldwide, according to the investment bank's newly released Global Wealth Report 2025. China came in second, adding around 380 millionaires a day. The number of "everyday millionaires," or investors with between $1 million and $5 million in assets, is also on the rise globally. The volume of everyday millionaires worldwide has more than quadrupled since 2000 to about 52 million individuals, per UBS. Real estate values were the largest driver of wealth growth worldwide, the report finds. Those assets make up the largest share of several countries' total wealth, with 53% of Australia's and 42% of the United Kingdom's wealth held in real estate net of mortgages, UBS reports. In the U.S., however, securities and other financial instruments like stocks account for largest share of Americans' total wealth at 37%. Real estate follows at 30%. Though many more individuals hit the million-dollar mark in 2024, those gains were likely not across the board. The top 20% of the wealthiest U.S. households owned 71% of the country's total wealth at the end of September 2024, according to Federal Reserve data. The average net worth among those households was $3.8 million. The bottom 50% of households, however, hold just over 2% of the nation's total wealth and have about $52,000 in total assets on average, the Fed reports. What's more, household wealth for Americans at the top of the income distribution spectrum generally grows much faster than that of lower-earning households. The highest-earning households saw their wealth grow by 147% between 1983 and 2016, Pew Research reported in 2020. Middle-earners' wealth grew by just 13% over the same period, while the lowest-earning households saw their wealth decrease by 8% during that time. A growing number of investors are also becoming millionaires through their 401(k)s. Around 544,000 Americans saw their 401(k)s hit a million-dollar value in the third quarter of 2024, according to data from Fidelity. That's nearly a 10% increase in 401(k) millionaires from the previous quarter, the firm reported. "These all-time highs are probably more attributable to market appreciation than anything else, but if contributions remain robust, that's a good thing," Douglas Boneparth, a certified financial planner and president and founder of Bone Fide Wealth, told CNBC in 2024. A 25-year-old who initially deposits $1,000 in their 401(k) and continues to contribute $400 each month would have over $1 million invested by the time they turn 65, assuming an average 7% annual return, according to CNBC Make It calculations. You can use this calculator to see what it would take for you to reach millionaire status by the time you're ready to retire.
ABC News
09-06-2025
- Business
- ABC News
As BNPL enters food delivery territory in the US, new regulations come in here
Clothes, appliances, holidays, festival tickets and now burritos are all being bought now and paid for later as small lenders expand their offerings across the globe. But a US company's foray into financing fast food has sparked consumer backlash and raised questions about the industry's expansion. Food delivery service DoorDash in March said it was partnering with finance company Klarna. The Swedish company offers a range of services, including buy now, pay later (BNPL), which lets users pay for their meal delivery in four interest-free instalments. The move echoes the availability of BNPL financing for food in Australia, which is launching new regulation of the industry from today. The DoorDash-Klarna announcement drew a flurry of memes to social media about the notion of taking months to pay for a $15 burrito, but it also raised eyebrows. One US financial advisor, Douglas Boneparth, wrote on X that "these companies [BNPL] aren't helping people". "In fact, they are taking advantage of them. Even Klarna CEO Sebastian Siemiatkowski told CNN it was "unwise" to use BNPL for takeaway. "I would not recommend anyone buy a burrito on buy now, pay later." He said the company only offered the option because Klarna had become associated with BNPL in the US, whereas in Europe, users associate the company with PayPal and flexible payments. In the first three months of 2025, Klarna's net loss totalled $99 million, almost double the $47 million it lost during the same period last year. The company attributes the loss to one-off costs, including depreciation, share-based payments and restructuring. However, the losses may also be a result of customers defaulting on their BNPL agreements, Consumer Action Law Centre senior policy officer Rose Bruce-Smith says. The company's first-quarter report found customer credit losses increased by 17 per cent, totalling $136 million. "It's been widely reported that Klarna's delinquency rate is increasing, and it's not hard to link this to an increasing push by BNPL providers for people to use their products for small, extremely discretionary purchases," Ms Bruce-Smith told the ABC. "Encouraging people to go into debt can start what we call a debt spiral, leaving people overcommitted and reeling from borrowing to pay off one debt to the next." Afterpay said data in the last three months of 2024 suggested there was not a similar increase in delinquency in Australia. Yes. Australians can and do use BNPL to pay for online food delivery. A quick test on an UberEats account shows Zip as an available payment option. Afterpay also partners with a range of food and beverage providers aiming to provide what it calls a "seamless on-demand offering, at no cost to the customer when instalment payments are made on time". Afterpay and Zip did not disclose how many Australians use BNPL to order food delivery on their platforms when asked by the ABC. But a 2023 survey from Financial Counselling Australia found that a significant number of people were using BNPL to pay for essential items: According to a survey by Finder, two in five Australians used a BNPL service in the six months leading up to August 2024. The average debt carried by BNPL users in September 2024 was $964. From today, BNPL products are going to be regulated as a new type of credit — low cost credit contracts (LCCC). That means BNPL providers will need to hold a credit licence and comply with most obligations under the National Consumer Credit Protection Act. According to the government, the aim of the new legislation is to provide appropriate and proportionate protections to consumers, while maintaining the benefits associated with access to BNPL products. ASIC commissioner Alan Kirkland says "these reforms are an important step to improve protection for Australian consumers who use BNPL products". The new regulations ensure there is a legal framework that reduces the risk of people being left worse off by BNPL. Here's how the specific changes mentioned above will protect you as a consumer: Currently, responsible lending obligations (RLO) require credit providers to reasonably ensure they're not signing people up to unaffordable or unsuitable credit. Under the new regime, BNPL providers will be able to choose between complying with the full version of the RLOs or with a modified framework. Within the modified framework, BNPL providers won't be required to vet a consumer's ability to make repayments as thoroughly. For instance, they won't need to obtain documentation, like bank statements, to confirm a consumer's income and financial situation. Though they'll still need to conduct a credit check. Ms Bruce-Smith says the new regulations are "absolutely the right step forward". "BNPL will be treated like other credit products, meaning there will be some mandatory checks of a consumer's ability to repay the loan," she said. "Customers will also have a right to request a financial hardship arrangement from their provider." But she believes the result is still a "light-touch" regulation. "Many protections against unaffordable lending will only apply to loans over $2,000, and we're concerned that consumers may end up with multiple contracts with different providers," Ms Bruce-Smith said. "The light touch verification also means people are vulnerable to identity fraud and financial abuse by another person taking out a loan in their name." Deb Shroot from Financial Counselling Australia is broadly supportive of the new changes, but is concerned there may be some loopholes. In particular, that the new regulations don't cover other forms of credit products. "We are concerned about the use of wage advance products," Ms Shroot told the ABC. "They're unregulated and potentially harmful credit products on the market that target people in financial stress. "The new rules are welcome, but they're complicated." The biggest BNPL player, Afterpay, has welcomed the changes. "Our commitment to simplicity and transparency remains unchanged," an Afterpay spokesperson said. "The new BNPL regulations reflect what we've always known: we're distinctly different from traditional forms of credit such as credit cards because we help customers avoid interest and revolving debt." A Zip spokesperson told the ABC the BNPL provider has held an Australian credit licence since inception. "Zip has been advocating for fit-for-purpose regulation for many years, and we have transparently been conducting ID, credit and affordability checks on our customers since inception," they said. "Zip is well placed to meet the timetable for the regulation of BNPL products and looks forward to continuing to support our customers and stakeholders as they look for flexible alternatives to manage their finances."
CNBC
23-05-2025
- Business
- CNBC
Bitcoin, mid-caps, and infrastructure: where the bulls are heading now
Douglas Boneparth, President at Bone Fide Wealth, and Simeon Hyman, Global Investment Strategist at ProShares, discuss market disruption, Bitcoin, tax cuts, and top equity picks.
New York Times
02-03-2025
- Business
- New York Times
Do You Know How Much Your Spouse Makes? Some Couples Are Clueless.
Here's a pop quiz for married couples. Do you know your spouse's salary? What about the balance of your partner's 401(k) — and credit card? Bonus points if you can cite how much your husband or wife thinks you need to live comfortably in retirement, or even what age he or she hopes that will happen. If you're like most married people, you're sure you'll ace this test. Nearly nine in 10 couples say they communicate well with their partner about money, and 94 percent say they are open and transparent with their better half about finances, according to studies released last year by the financial services companies Fidelity and Ameriprise. In reality? Not so much. The Fidelity survey found that more than a third of couples couldn't correctly identify their partner's salary within at least $25,000 of their actual pay. Over half disagreed about much they needed to save for retirement. Research shows similar disconnects among many couples when it comes to debt, net worth, savings and lifestyle goals. That's not even counting the outright secrets that about four in 10 married couples admit to keeping about money, according to a 2025 Bankrate survey. Leading the list of indiscretions: spending more than their partner would be OK with, followed by hiding debt, credit cards or savings accounts. 'About 50 percent of the couples I talk to don't know their combined household income and 90 percent of those with debt don't know how much they owe,' said Ramit Sethi, author of the book 'Money for Couples' and host of a podcast of the same name. 'But beyond facts and figures, the most important thing couples don't know about their partner is what their vision is of a rich life — what ideally they hope their money will allow them to do and accomplish together.' Ignorance Isn't Bliss This lack of knowledge about key aspects of a spouse's finances can hinder planning for retirement and other goals, such as buying a home or paying for a child's college education, advisers said. After all, it's tough to get to your destination if you don't know what road you're actually on. 'When there's misinformation or an absence of clarity about the resources you have to work with, you're more likely to make suboptimal financial decisions, and partners' habits and behavior don't always align with goals,' said Douglas Boneparth, a New York City financial planner who writes a newsletter with his wife, Heather, called 'The Joint Account.' The relationship can suffer too. 'Not being on the same page about money can lead to anxiety, blame and resentment,' Mr. Boneparth said. Research backs up the potentially adverse impact on marital happiness. Studies show, for instance, that couples who do not communicate well about money or fail to make financial decisions together tend to feel more dissatisfied with their relationship than those who do. A 2021 study by the National Endowment for Financial Education found that, among people who had kept a secret about money from their partner, the deception resulted in arguments for 42 percent and less trust in the relationship for about a third. Being ill-informed about the way a partner has managed family money can prove especially problematic if a couple splits up or a spouse dies — an issue that often hits harder for women, who are more likely than men to leave investing and retirement planning to their male partner. A UBS survey of women found that, after a spouse's death or the end of their marriage, three-quarters of widows and divorcées encountered 'negative financial surprises,' such as hidden debt or less in savings than anticipated. 'When you're already grieving emotionally, it can be extremely scary to find yourself also having to worry about how you'll pay the mortgage or whether you'll ever be able to retire because you didn't have an accurate picture of how your partner was handling money,' said Aja Evans, a New York City financial therapist and author of the book 'Feel-Good Finance.' 'It just makes a tough situation that much worse.' Truth and Consequences If lack of communication and transparency about money hurts so much, why do so many spouses keep each other in the financial dark? One common culprit is the couple's system for managing the household finances. Nearly half of the couples in the Fidelity survey, for example, said they did not make financial decisions jointly. Other research shows that in many relationships, one partner assumes the role of chief financial officer, taking the lead on investment decisions and financial planning, which can leave the other spouse out of the loop. 'Very often, the issue is this divide-and-conquer approach to money, not that one partner is willfully hiding assets or income,' said Ryan Viktorin, a vice president and financial consultant at Fidelity Investor Center in Framingham, Mass. 'One spouse is very interested in investments and tracking progress on spreadsheets, and the other feels overwhelmed by the numbers and details and is happy to leave the finances to the partner.' A study in the Journal of the Association for Consumer Research confirms that the partner who is more confident about finances tends to drive the decision-making — whether that person really knows more about money or not. 'Perception and reality aren't perfectly aligned,' said Scott Rick, an associate professor of marketing at the University of Michigan's business school and co-author of the study. 'Partners are actually much closer in financial knowledge than they think.' Also contributing to the lack of communication and transparency: a desire to keep peace. More than six in 10 people who admitted to lying to a partner about money said fear of disapproval was a motivating factor, according to the National Endowment for Financial Education survey. 'They may not want to have the conversation because they feel shame or embarrassment or think their spouse will pass judgment,' said Marguerita Cheng, a financial planner in Gaithersburg, Md. Anticipating conflict sometimes has as much to do with each partner's prior experiences — say, if their own parents argued a lot about the family's finances or a former partner constantly criticized their spending habits — as with the present day. 'So often when we're having conversations with our partner about money, we're talking to the ghosts of their past relationships,' Mr. Sethi said. 'We come in with one set of assumptions, our partner comes in with another and one plus one equals a thousand.' What to Do: Become a Team Advisers recommend that couples meet regularly to talk about their finances — what many call a money date. But giving it a cute name and adding food and wine by itself won't lead to more open communication. ''Hey honey, let's go out to dinner and let me bust out this spreadsheet over appetizers' isn't going to get you where you need to go,' Mr. Boneparth said. Here's what will. Start with goals, not numbers. Advisers suggest putting monthly or quarterly meetings on the calendar to talk about your finances, with the first sit-down focused on aspirations, not nitty-gritty details like how much you're saving and spending. 'The goal of that first meeting is to walk away feeling good about talking about money,' Mr. Sethi said. Prompts can help guide a conversation about shared goals and what your partner worries about most. Mr. Sethi's book, for example, includes activity sheets that help couples define a rich life and make 10-year bucket lists. Ms. Cheng has spouses jot down their top financial priorities separately, then exchange lists. Mr. Boneparth is a fan of the couples' money quizzes on the app Paired. Coming to the meeting with the mind-set that you're going to be able to figure this money thing out together is key, according to research published last year in the Journal of Consumer Psychology. The authors noted that 'viewing conflicts as solvable rather than perpetual' mitigates anxiety and increases the likelihood that partners will talk openly about their finances. Set up for success. Once you move to sharing facts and figures, start with the basics. 'At a minimum, both partners need to know what financial accounts they have, how much is in them, and how to access them,' Ms. Viktorin said. 'They also need a high-level understanding of their financial picture — whether they're generally on track with saving and spending.' Using joint accounts to pay for everyday expenses and save for non-retirement goals like building an emergency fund makes sharing these details easier, experts say. It also forces partners to be more transparent about their spending. 'There are fewer opportunities to conceal troubling purchases or spending habits when couples are using a joint account,' said Dr. Rick, who has studied the impact of bank account structure on romantic relationships. 'Joint accounts also help partners think as a team.' Money management apps are another tool couples can use to share information about their spending, saving and investing. Among those advisers recommend: Honeydue, which is a free app specifically designed for couples; Monarch Money ($14.99 a month; $99.99, if paid annually); and Copilot ($13 a month; $95, if paid annually; not available for Android devices). Sharing details of every single transaction, though, may not be necessary — or even ideal. Dr. Rick also recommended that each spouse also maintain a small no-questions-asked bank account for personal use, which can eliminate the fear of judgment that drives many husbands and wives to hide spending or saving from their partner. 'We don't need complete transparency as much as we need translucency,' he said. 'Everyone is entitled to a little privacy.' Show your spouse some grace. To help defuse tension when you're reviewing your finances together, avoid blame. 'Do not come in with, 'you did this' or react with 'you spent what?' because it will just shut the conversation down,' Ms. Evans said. 'Talk instead about what worries or excites you, how the money stuff is impacting you and why, so your partner understands where you are coming from.' That willingness to see your partner's perspective and share your own is key. 'Couples often come into a conversation about money focused on being right,' Ms. Cheng said. 'What's important is to get to the point where they're doing the right thing — together.'
