Where’s my stimulus money (US)

We continue answering the most relevant questions send to us via FB. Guys, thank you for the great money questions and keep sending them. We will be picking the most pressing ones and answering them here.

Today we will focus on the COVID-19 outbreak financial news, leading to the signed about $2 trillion stimulus package into law some time ago, as a response to the COVID-19 pandemic that has staggered the U.S. economy for the last couple of months.

1. The Internal Revenue Service have already started cutting stimulus checks since mid-April, and it’s already gotten money to nearly 130 million people. Everyone who received the payments should be satisfied as there is 1 200 USD in hand to spend, anyway people want to. This is to battle the massive health and financial consequences of the COVID-19 crisis.

So far IRS paid out about 230 billion USD, according to statistics released in the middle of May. The 2.2 trillion USD relief bill is called the CARES Act. It sets aside 290 billion USD for direct cash payments to individuals and households. The federal agency slated to put approximately 5 million checks in the mail each week, for up to 20 weeks.

There are people, though, still waiting to receive their stimulus money, so here are the most common reasons for still waiting for your stimulus money check.

2. Maybe the IRS doesn’t have your bank-account information on file? Those are approximately 14 million Americans, according to a Federal Deposit Insurance Corp. survey from 2017. And that’s about 6.5% of American households.

If you are one of those, you are urged to open bank account as quickly as possible so you can get your stimulus money quicker. This will not only speed up the process, but also will help you bypassing pricey fees from check-cashing businesses, some of which can charge more than 50 USD to cash a stimulus check for a family, according to a recent analysis.

After opening a bank account, you can submit your bank information to the IRS. If you don’t file tax returns (some people don’t make enough money to file), you will need to submit the account information via an IRS website for people who don’t file tax returns. Here is the web link:

3. People who have filed the need information, but still did not give the IRS their banking information can submit direct deposit information through an IRS tool called Get My Payment (there will also be a Spanish language version in a couple of weeks, according to the IRS). The tracking tool can also show payment status, but some people have complained that the tool doesn’t give them any information.

4. You might not get positive answer – and there are good reasons for it, according to the IRS.

4.1. Common case is - the agency isn’t done processing yours 2019 return. It could also be that you usually do not file a tax return and has submitted non-filer information via the IRS web portal, which is still being processed.

4.2. You make too much money in order to be stimulated.  If you are one of those, you might not be getting a 1200 USD stimulus payment.

The Coronavirus Aid, Relief and Economic Security Act, authorized 1 200 USD payed to individuals, making less than 75 000 USD yearly, and 2 400 to married couples earning under 150 000 USD. Over the program the parents will also receive 500 USD for each child (aged under 18). The payments will decline by 5 USD for every 100 above the 75 000 or 150 000 threshold. If you are making over 99 000 USD, you will not qualify. The couples limit is making over 198 000 USD.

If you exceed the income limit, you might still have a chance to get the stimulus money over the next year. That’s because the stimulus payments are an advance credit for next year’s tax season. The credit is just being paid now. And, if you made too much money based on the income-tax returns you have filled for 2019, you could still get the money based on the tax returns you file in 2021 for your income in 2020.

5. Another person is claiming you as a dependent

If you are a young adult, you might be missing out on stimulus money because your parents have claimed you as dependent. When it comes to stimulus checks, the IRS counts a dependent as under age of 18. And it could happen if the IRS is only reviewing a 2018 return. It could be looking back at a point in time when you were a high-school senior when now you are in college.

6. If you have married a green-card holder, it doesn’t necessarily mean a second stimulus check.

If a spouse was married to a green-card holder and present in the United States before they received permanent-resident status, they, too, should be getting a check. But if someone married a green-card holder afterward, they wouldn’t get the same benefit. Receiving a stimulus check shouldn’t usually disrupt a person’s path to citizenship, if they already have a green card. The main rule is that no one is giving you anything, instead it’s something you’re entitled to.

7. Your immigration status could be complicating matters
The government is paying the stimulus checks to U.S. citizens only. The checks are also going to certain categories of non–U.S. citizens. This includes “legal permanent residents,” also known as green-card holders, according to the IRS. Nevertheless, if someone still has a green-card application pending, they may not be getting a stimulus check, at least not any time soon. U.S. Citizenship and Immigration Services (USCIS) field offices, which administer in-person interviews before issuing green cards are closed temporarily until June 3. Whenever the USCIS reopens its offices, it’s likely green cards will be issued at a slower pace, meaning a slower payout of money stimulus to new green-card holders.

8. Glitches in the system could be slowing delivery
Some national tax preparers offer advances on a client’s refund, with the money loaded onto a debit card. Yet that could mean the IRS might not be putting the stimulus money in the right account. The IRS sometimes “created confusion by not always using clients’ final destination bank account information for stimulus payments.”, claimed a bank representative.

That’s why, it is advised for everyone to update their direct-deposit information on the IRS’s Get My Payment tool. But if the IRS already put the money on a Serve or Bluebird card that the customer no longer has, go to that account and ask for a replacement if that’s possible.

9. It is possible a debt collectors to be taking your money
It is important to understand the wording of the CARES Act does not prevent private debt collectors from seizing stimulus checks that suddenly come into a bank account.

A debt-collection trade group said members are “acting with compassion” at this time, but, even still, it noted, collectors wouldn’t know the source of money that suddenly comes into an account. It’s also important to know state laws. Approximately 10 states plus Washington, D.C., and several other cities and counties are enacting orders preventing garnishment of stimulus checks money, according to the National Consumer Law Center.

How to make money during COVID-19 crisis

COVID-19 crisis hit hard the economies of both the developed and developing countries. If you are one of the many staying home, either employed or not it is time to consider the new opportunities to make money. In the previous article “Sectors and companies benefiting from the COVID-19 crisis and national quarantine” we discussed the sectors and companies benefiting from the crisis. Now it’s your time to learn from the winners’ experience and start benefiting yourself.

1. Use your current skills
Any of your skills not involving face-to-face contact would work. Maybe you can sing, write articles, create videos, do graphic designs, teach or just create value by streaming activities. Now is the time to do it. Post over social media or create a simple free page and gather groups and clients.

Streamers earn millions of dollars streaming gaming or any other recreational and educational activities. Try Twitch today and start gathering followers, clients, donors, or patrons for your business or services.

2. Acquire new skills
Now is the perfect time to educate yourself into more profitable skills to serve you over the next decade. Always wanted to be a better investor? Read those books and take those courses you never had the time before. Maybe you wanted to learn how to marketeer your products and services better – there are plenty of free resources online. Never had the time to gather and create clients' e-mail-list – you should be able to now. Or, you are up to a completely new career path as a techie, start learn programming, designing, or engineering – there is no better time.

3. Adjust your mindset and change the way you serve your clients
Be creative.
Fitness gurus use YouTube and Facebook to keep their clients in shape. Makeup artists, singers, and photographers do tutorials and give lessons and offer services online. Master Chefs use Instagram, blogging, and video streaming to show recipes of their latest masterpieces in the kitchen. Have a look at your competitors and partners. What do they do to mitigate the income impact of the COVID-19 crisis and even earn more?

What your clients need the most? How could you serve them without face-to-face contact? Don’t be afraid to experiment, don’t be afraid to create a survey and ask your clients how you could serve them better online.

4. Become a freelancer
Try some freelance work at Freelancer.com or Upwork. They list creative, mostly technical, jobs to be done remotely. If you already have the technical skills, those are your best bet for additional income.

5. Spend some time on planning (no more than 10% daily)
Learn how to create business and action plans. Try planning the rest of the year. Outline everything important to you and your business in the plan – your clients, your main sources of income, your timeline for executing and delivering your services, the budget needed, and the income expected. Put everything in a timeline, and don’t forget that the plan would probably change… and that’s ok. But still, your vision and your goals to achieve the vision should remain as close to the original. There are many templates, tutorials, and guides online – how to create a financial plan and how to adjust it when needed.

Keep in mind – the COVID-19 crisis will sooner or later end, elaborate vision, and plan actions and goals to achieve after the crisis.

6. Train, mentor, and coach
If you are already an expert – do not hesitate to promote yourself as a trainer or mentor for those who would like to learn in your field. Offer discounts to attract trainees or just train for free to gain more popularity and clients later. You can use Skype, MS Teams, Zoom, or any other platform for your teachings.

7. Promote your business with vouchers
People love vouchers and now is the best time your business could benefit from giving away vouchers for your products or services. It works not only online but for businesses like hotels, bars and events. Maybe some clients would like to cancel their reservation? Instead - offer them a discounted voucher to use your service or do the reservation later, up until the end of 2020 or even 2021. This way you are not going to lose business.

At the same time provide gift-cards and vouchers to every client currently using your services. This way their loyalty will increase, and they will keep coming back to your business.

8. Work online as a QA or feedback provider
There are plenty of sites offering opportunities to test products or take surveys and provide feedback. They will pay you for your time. In the meantime, you could use the opportunity to check what the other companies are doing and what products and services they require feedback on. In the long run – this will help you improve your own services and products to earn more money.

9. Sell unused items online
You could eBay your unneeded items at home, not only generating some cash but getting rid of those unnecessary items. Maybe you have an expensive car? Now is the time to get rid of it. Or you have another laptop you barely ever touch – it’s time for it to go for good.

10. Offer services to people in need
There are a lot of people in need and you could either volunteer or work part-time for them. Elderly or vulnerable people, staying at home could need somebody to do some shopping or simply walk their dogs. Although these would not earn a fortune – they are a nice extra additional income for some little time and effort on your side.

Sectors and companies benefiting from the COVID-19 crisis and national quarantine

The COVID-19 outbreak and national quarantines have devastated companies, businesses, and whole sectors over the national economies across the globe. Nevertheless, there are some parties benefiting from the crisis, sectors, and companies which thrive and make a huge amount of profit.

Here is a list of the sectors and companies benefiting from the COVID-19 crisis:

Local pharmacies
In times when a lot of business was closed – the local pharmacies not only remained open, but most of them reported increased revenue due to the higher demand in protection against COVID-19 items (as gloves, masks, etc..) purchase.

Grocery and consumer goods
The supermarkets’ business has not seen any decline. In fact, the majority of the stores report increased demand due to people stocking up on any sort of goods.

Grocery delivery
Companies in the sector are experiencing increase in their services. Those companies are blooming and have difficulties to support the extra demand. For example, the online shop and delivery company Ocado stopped their website at some time, as the demand greatly exceeded the capacity to deliver. The company reopened later, putting some limits over some of the most demanded goods. It’s not a surprise the share price for Ocado increased and will probably continue to grow.

E-payments
In many countries, physical cash has already become something in the past, and the COVID-19 crisis accelerate the trend everywhere. Many shops started accepting only digital payments, although some people from the traditional generation resist the change. Physical cash will sooner or later be sent forever into the past as physical money tends to attract and keep all sorts of germs, viruses, and bacteria.

And it’s a good opportunity for everybody, wishing to stay healthier and safer. The change will inevitably be permanent for many who recognized the convenience of modern digital payment options. The obvious beneficiaries are Visa, Mastercard, PayPal, etc...

Cloud Computing
Although the cloud computing segment has been on the rise for years, some traditional industries refused to embrace the change. COVID-19 crisis will definitely help them accelerate their digital transformation as more employees are now restricted to their homes. A lot of workloads have to be migrated to the cloud for many companies to ensure their business continuity and function at all.

Google Cloud, Amazon Web Services, Microsoft Azure are the top winners on the market, as leaders. Other older, traditional companies will have to rethink their digital strategy and policy to enable the transformation faster. Once the rolling over started, it’s highly unlikely those companies will ever decide to go back and turn back.

Online apps and stores
As more people remain at home, it is no surprise they would cure their boredom with fancy cool stuff purchased safely online. More and more people tend to buy online with the saved money from not going outside. Amazon seems to be the top beneficiary of the situation.

Conferencing & team collaboration tools
As more and more teammates work from home and most of the teams are either remote or distributed – the conference and collaboration tools demand is at its peak. Teams need to stay in touch multiple times a day, alignment and reporting meetings are held every minute. Although video cannot be a substitute for face-to-face connection, it is close, and the majority of the teams prefer using it over email or telephone.

Microsoft reported the daily active users for its Teams collaboration suite increased by 12 million. Other companies like Zoom Video Communications have seen a share price increase of 130% since the beginning of the year. Many promoters, salesmen, and marketeers are turning to companies like WebEx to ensure they have fully enabled their capabilities for webcasting and webinars - to ensure business sustainability and promotion. Many companies forced into business transformation also resort to buying online conference and collaboration tooling suites.

Fertilizers and agro-chemical
As Chine is one of the major producers and exporters of chemical components, disruptions could result in a breakdown in the chain supply. As a reaction, many local companies are happy to start producing the missing components and support the local sector, providing tremendous opportunities for the companies in the sector to operate and benefit, while taking back the markets from China’s producers.

Mobile and telecommunications
The industry is critical to social success and functioning. This seems to be true more than ever. Nowadays, everybody has an Internet connection over their mobile devices and use them to stay in touch with teammates, co-workers, clients, relatives, and friends.

The sector experience demand like never before. As people stay home – looking to work, educate, or just entertain themselves the pressure over the networks is higher than ever. The demand for a higher speed net and network capabilities is growing rapidly. Many buy premium packages to ensure stable connection and the revenue increased accordingly for all the players.

Gaming, streaming, video, audio, and photo content
The obvious winner here - Netflix is already immensely popular. With more people stuck at home in the evenings – it is no surprise the demand skyrocketed, and subscriptions raised rapidly. All streaming platforms (like Twitch) benefit. Some channels like Disney+ started launching at a different time to capture the attention of European viewers. YouTube is also enjoying great success. There is so much information on COVID-19 over the services and there is a lot of entertainment for everybody, who like watching videos.

The gaming sector flourished like never before. Companies and products like Microsoft Xbox, Google Stadia, and PlayStation are going to secure a lot of additional subscriptions as well as in-game purchases.

Clever financial strategies for clever companies
Many companies with extra cash saw a decline in the financial markets as the opportunity of the century. As an example, Softbank sold some unnamed assets to fund a second share-buyback initiative. Combined with their previous initiative Softbank was able to retire 45% of Softbank shares on the open market.

The core idea is that fewer shares on the open market, the less exposed a company is to external influences. Therefore, share-buyback initiatives are the way to protect the corporate strategy and business model from short-term investors.

Investing, money and stock markets during a national emergency (e.g. coronavirus crisis COVID-19)

It is March 2020, the coronavirus (COVID-19) pandemic is the “scariest bug” on all the media, and most of us are already “imprisoned at home” due to the national emergency quarantine state, declared in many countries across the globe. And of course, it’s not only the healthcare. The major collapse on all the markets has been unprecedented for years. In the mid of March, as measured by most of the indices and markets (e.g. S&P 500) the financial and stock exchange markets officially entered a “bear market” state. In other words, the stock markets have now fallen 20% or more since their recent all-time highs.

Most of the investors have panicked, due to the financial uncertainty, so we have gathered leading economists' opinions to answer the question “What to do with your investments during national emergency crises?”, like the one followed the recent coronavirus (COVID-19) global outbreak.

Joachim Klement (Investment strategist, a trustee of the CFA Institute’s Research Foundation and formerly head of strategy research at UBS Wealth Management), gives the simplest possible answer for most of the investors:
“Just, don’t look at your portfolio. The idea is - nothing that happens today, tomorrow or over the rest of 2020 will matter after 10 years. That “is the most important rule in bear markets. The best way to invest for most investors is to become a “buy and hold investor”. In other words, the best strategy is to buy a well-diversified portfolio that meets the needs of the investor and then stick to it for a very long time, through the ups and downs of the market. At the same time, the investors should avoid getting distracted by short-term market moves.”

The only sensible alternative, Joachim Klement mentions, is to use a highly sophisticated mathematical system. Such a system would support investors in getting out of the market and getting back in. One such respected and popular one, is the trading rule popularized by Cambria Investments’ Mebane Faber. The general advice there is selling stocks as soon as they fall below their 200-day moving average, and not buying them again until they rise back above that level.

“And with the coronavirus emergency state, following that rule,” according to Klement, “would not be possible. As the indices fell decisively below the 200-day average many days ago. Selling now leads in a steep loss in equities and other assets, as nobody can say if markets will go up or down from here (short-term), so investors will realize past losses, and not be in the market for a while. And this will inevitably mean missing the bottom of the market and will get back into the market at a stage when a lot of the recovery has already passed.”

So, he concludes, there is only one sensible option – do not look and don’t worry too much.
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The same opinion comes from Jim Paulsen (chief investment strategist at the Leuthold Group):
“I think what we need somebody to calm us down, like our mom and dad tell us it’s going to be OK.” He implies that we should not panic and rush into reckless actions, and just have faith the markets will recover after the coronavirus crisis.
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Gita Gopinath, IMF chief economists, opinion:
“It was hard to predict what might happen. The pandemic did not look like a normal recession. Data from China has shown a much steeper drop in services than a normal downturn would predict. There’s not an easy answer” Ms Gopinath continued, adding: “There should be a transitory shock if there is an aggressive policy response that can stop it, morphing into a major financial crisis.”

Gita Gopinath also concluded - there is no reason why the economic effects of a health crisis should linger, in the way that long periods of slow growth have tended to follow financial crises, as households and companies work off their debts.
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Kenneth Rogoff (Harvard University professor, (predecessor at the IMF)) said:
“A global recession seems baked in a cake at this point with odds over 90%”
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Maurice Obstfeld (professor at University of California, Berkeley) opinion:
“Recent events were a wicked cocktail for the global growth. I do not see how, given the events in China, Europe, and the US, you are not going to see a severe slowdown across the globe.”
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Raghuram Rajan (professor at Chicago Booth School of Business and a former Indian central bank governor), opinion:
“The depth of any economic hit would depend on the authorities’ success in containing the pandemic, which he hoped would be decisive and rapid. Anything prolonged creates more stress for the system.”

“Long outbreak could also lead to a second round of consequences, where workers were dismissed and there was another fall in demand, eroding long-term confidence,” he warned. “These kinds of effects — companies closing down — depend on how prolonged the first round is, and what steps we all take to alleviate that first round. It is up in the air”
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Olivier Blanchard (senior, at the Peterson Institute) opinion:
“There was no question in my mind that [global economic] growth will be negative for the first six months of 2020. The second half would depend on when peak infection was reached, he said, adding that his “own guess” was that this period would probably be negative as well.”
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Other representatives of the IMF said that the impact of the virus will be “significant” and that growth in 2020 will be lower than in 2019, which was 2.9%.
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Erik Nielsen (chief economist of Italy’s UniCredit) noted
“Four consecutive quarters of negative global growth followed the 2008 financial crisis,” but mentioned he expected “the impact of coronavirus to last only a couple of quarters.” But he also predicted that the quarterly fall could be as deep as the 3.2% contraction that the global economy experienced in the first quarter of 2009.
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Gilles Moec (chief economist at French insurer Axa) mentioned
“Trying to plot the disruption from the virus was almost impossible. Our forecasting models are not set up to deal with this scenario.”
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Other economists were also clear that the economic effects of coronavirus will be serious. Vítor Constancio (former vice-president of the European Central Bank), said:
“The recession is coming from a demand deficiency and the disturbance on the supply chains. The most affected sectors will be leisure amenities, tourism, travel, transportation, energy, financials.”. Vitor, also added: “It is possible that banks’ risk aversion and lack of market liquidity for bond issuance may affect credit and provoke liquidity squeezes.”
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We also included the answers of three major questions, coming from financial online groups and boards:

1. How much longer are the stock markets going to decline? How great is the decline going to be?

No one knows, and that’s part of the fear that is feeding the markets to go even lower, sinking into an official “bear market.” The key is how long will this health crisis last? How many people will be impacted? And how quickly can the economy bounce back? Right now, no one has enough data to answer those questions, so the market is pricing in the worst-case scenario. What pretty much every economist and Wall Street type We’ve spoken to has said is:
“The US and the affected countries should do a two-week shutdown, similar to Italy. It will be painful. And it will require government help for people not working and businesses really hurt. But the hope is that would stop the flow of COVID-19 and boost confidence in the government’s response to this crisis.”

2. How worried should we be?

The United States is in a bear market, and it’s almost certain Q2 will be negative growth. The question is whether the United States will go into a recession (two consecutive quarters of negative growth). The reason there is such high concern on Wall Street today is investors don’t think the government response is sufficient — from Congress or the White House. A list of worries includes the coronavirus spread, oil price war, and the inadequate government response. So, the key in the coming days is whether Congress can set aside partisanship and pass a fiscal stimulus bill and whether the White House and Congress can backstop the health system sufficiently to start halting the spread of the virus.

3. What market segments will be most likely to weather the uncertainty we are seeing now? The prediction is for people to keep using their mobile phones and online services, whereas cruise ships will take a while to come back, right?

That’s correct. This is the Clorox and Netflix economy right now. The other somewhat surprising winner in all of this is real estate. Mortgage and refinance applications are through the roof. The 30-year fixed-rate hit an all-time low of 3.29 percent, so housing and home-related stocks and parts of the economy are likely to do well. I was just talking to a roofer. His business is down this week, but he’s got a lot of people calling and telling him they want him at their place as soon as this health crisis subsides.
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As a final statement – the investors need nerves of steel during the coronavirus-provoked-crisis. The short-term effects of the COVID-19 crisis on the economy can’t yet be measured but are likely to be severe. Nevertheless, worrying too much could lead to a weakening of the immune system, so we advise you to stay on the positive side, be safe and stay at home until the coronavirus provoked crisis is under control and the virus is no longer a threat.