Financial Insights- April 30, 2021

Written by Shane O'Hara, CFP®

On April 30, 2021

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In 2017, Bitcoin entered mainstream conversation even though it had been around since 2009. In June of that year, one bitcoin was selling for about $3,000 and it rose to almost $20,000 by December. It then fell back to about $3,200 by December 2018. It regained a price of about $10,000 and languished there until about October 2020. Then, it exploded to a price of approximately $63,000. Can any reasonable investor estimate if this is a “fair” value? We hope not. We admit that it has grown to this level, but is it reasonable to think it will stay there? Greed, speculation, and in many cases, inexperience have all driven the price to lofty levels. Tulips, dotcom, oil, and many other investments have traced a similar path and we all know how those turned out. If governments begin to issue their cryptocurrency, they could ban the use of Bitcoin. India, which has not issued its own digital currency, has proposed a bill to ban the use of Bitcoin. Russia and China may be the first governments to issue a digital coin. Then, we have Coinbase, a cryptocurrency exchange, which went public over the past few weeks by using a Special Purpose Acquisition Company (SPAC) at a price of $50 per share. It immediately soared to $328 a share on the first day of trading.

The previous paragraph was written on Saturday, April 17th.  That evening, China started making noises about a digital currency and Bitcoin’s price fell to $49,059 almost overnight. While it has recovered somewhat, it remains a very volatile investment. We are not suggesting that digital currency has no future – we are saying that Bitcoin may not be the winner. Be careful.


As many wealthy people contemplate moving from high-tax states to states with lower taxes, they are just trying to get ahead. Where can you live to create the greatest amount of wealth in the shortest time? We looked at a survey of the 50 largest cities by Surety First Insurance Services. One might be surprised at the results. This survey used the median income and expenses (including housing, food, transportation, health care, childcare, and taxes) from U.S. Census Bureau data to determine how much excess cash there was for monthly savings. Here are the top 10 cities and the amount for savings:

10) Houston, TX – $844

9) Sacramento, CA – $849

8) Salt Lake City, UT – $871

7) Baltimore, MD – $961

6) Dallas, TX – $1,103

5) Atlanta, GA – $1,171

4) Seattle, WA – $1,477

3) San Jose, CA – $1,841

2) Austin, TX – $2,594

1) Washington, DC – $2,960


According to the Survey of Consumer Finances in 2019 (pre-pandemic), the median for retirement account savings across the U.S. was $65,000, and the average family had $255,130 set aside for retirement. These are amazing and scary numbers, especially when you consider what some people have tucked away for retirement. But could where you live have something to do with the amount of money saved? Here are the top ten states with average retirement savings, according to Personal Capital:

10) Minnesota – $447,836

9) Washington – $447,869

8) Massachusetts – $457,681

7) Maryland – $458,107

6) Vermont – $467,757

5) Virginia – $468,579

4) Alaska – $489,070

3) New Jersey – $489,664

2) New Hampshire – $494,562

1) Connecticut – $523,568


According to, the 2020 year-over-year increase for residential real estate prices was 10.3%. Over the past five years, Florida has experienced a 38% increase based on information at Low-interest rates are the cause of some of this appreciation, with a 3% rate still common for a conventional loan.  But things were not always this way. Back in the 1970s, homeowners were excited to get a mortgage for “only” 15% and mortgage rates peaked at around 18.5% in October 1981, based on data from the New York Fed Consumer Credit Panel. For those younger than age 50, that may be hard to believe, but it was the reality then. A $400,000 30-year loan at 3% has a monthly mortgage payment of $1,688 while the same mortgage at 18.5% would be $6,097 monthly. How did those Baby Boomers ever afford a home? Of course, back then houses were not as expensive as today. Say you bought a house for $65,000 (a nice two-story home with about 2,200 square feet plus a basement) and financed $50,000. Then the payments were $762 monthly or $9,146 annually. Not bad until you realize that those young homeowners were making about $20,000 annually if they both were working. My how times have changed.


As we reported to you last month, the IRS surprised the financial and investment world with Publication 590-B. Everyone thought that although the stretch IRA concept was eliminated for inherited IRAs with the December 2019 tax act and that the ten years construct would allow for a beneficiary to take 100% in year one or wait ten years before taking any money or everything in between. In Publication 590-B, the IRS implied that a beneficiary had to take required distributions every year. Now they say, “not to worry – we made a mistake”. We will keep you up to date as we learn more.


Women experience different life journeys on the way to and during retirement.  Widowhood is one of those events that disproportionately impact women. Would you believe the median age a wife becomes a widow from a first marriage is 59.4 years?

Another staggering number: 80% of women die single, and 80% of men die married.  What does this mean for women? Widows find themselves grieving while tackling personal financial management alone.

At ProVise, we help widows navigate the financial decisions they face. While widows are dealing with their loss, we help by asking questions like “What’s weighing most on your mind?” and “Do you have enough money in your checking account to cover your immediate cash needs?”

We recommend that widows move forward slowly in small steps as they grieve. We will help you create and implement a financial to-do list that helps you understand your current financial situation so that you know what you have, where it is held, and how to access it. We will help guide you as you move through the three stages of widowhood from grief to growth to grace.