Never in history has technology progressed at the pace we see today. It’s affecting every aspect of life, especially finances. From the global economy to autopaying bills, we have more ways to manage our money and more ways to spend it, which is empowering consumers.
Keeping up with the changing world of personal finances isn’t easy, but here are a few things we can count on in 2017.
Rise of Reverse Mortgages
As people live longer reverse mortgages are becoming more common. Older Americans can’t rely on Social Security to cover their living expenses in retirement. For many people, their home is the only asset they can tap into.
A reverse mortgage is a type of home loan that allows a person 62 years or older to use the equity they have in their property. Instead of making house payments a reverse mortgage allows seniors to receive a portion of their equity. The equity that’s converted to cash doesn’t have to be repaid until you no longer live in the home as a primary residence.
Taking out a reverse mortgage requires careful consideration. There are a number of online resources where you can find further information about reverse mortgages.
Online Banking is the New Norm
Pretty soon people will forget what it was like to get checks and go to banks to cash or deposit them. Slowly everything bank-related has moved online. One of the most dominant trends in banking is DIY service powered by smart phones. At one time the idea of scanning a check with your phone to deposit it was far-fetched. Today, people get aggravated if they have to go to a bank to have a teller do it for them.
Paperless banking means that your phone is your 24×7 bank. The 2016 World Payments Report noted that while non-cash transactions were up 10.1%, mobile payment transactions were up an astonishing 42 per cent between 2015 and 2016.
Throw in thousands of apps built for specifically for personal finance, and most people will never need to visit a bank location in 2017.
Making Purchases or Investments With Virtual Currencies
As the financial world goes paperless even currency is going digital. Virtual currencies, also known as cryptocurrency, have gone mainstream as an alternate way to make purchases and pay for services. Bitcoin is by far the leading cryptocurrency. It was built to be a “Peer-to-Peer Electronic Cash System,” but now businesses have adopted Bitcoin for transactions as well.
But people aren’t just using cryptocurrency. They’re also investing in it. It’s become such a popular investment vehicle there are exchanges just for bitcoins and markets show exchange rates. One of the many advantages of cryptocurrency is that it can be easily converted to any type of illegal tender.
The value of each bitcoin has fluctuated like any asset, however, it’s far higher today then it was when Bitcoin was established in 2008. As of this writing one bitcoin is worth $1,923. To put that in perspective, bitcoins were valued at just $0.08 each in July 2010. Just last month Bitcoin value increased 49%.
Customer Controlled Investment Accounts
Technology is giving people more control over their personal finances, including areas that were once ruled by financial advisors. Most major investment firms now offer robo accounts, online tools and access to professional-grade market data.
This is all in response to consumer demand. Since the fallout of 2008, investors are much more cautious and want to be in the know so they understand how their money is being handled.
Having more involvement and control automatically improves transparency, which is another top consumer need for today’s investors. Another important part of this trend is that consumers want and expect to be informed. Financial firms that not only give people more input but also teach them the essentials of investing are the ones winning business.
Our world is dramatically changing on a daily basis, and there are no signs of things slowing down. In the financial sector that means currencies are being transformed, transactions are moving online and consumers are getting more control. It’s become a situation where banking institutions are supplying more tools, but it’s customers who handle the money management.