It was just last year that I blogged about the use of Apple Pay, a form of “near-field communication,” as an upcoming alternative to credit cards in making a purchase. As I mentioned, technology is moving at the speed of light—and it is. The latest alternative to hard currency, i.e., cash, is digital currency, a technology-driven currency.
My colleagues, friends, and family members are all talking about digital currency. Not surprisingly, the market is responding. Bitcoin, a form of digital currency, was trading at around $600 per coin last October and it’s now over $6,100! It may seem complex and confusing, but we do need to know about it.
Digital currency can also be explained as digital cash. Blockchain is the underlying technology that facilitates the generation and transfer of such currency. Moreover, the seamless transaction of digital currency allows a point-to-point financial transaction that bypasses any middleman, such as a bank.
It is no wonder that big banks are investing billions of dollars into blockchain, in order to preserve their roots of business while protecting their clients from fraudulent or otherwise illegal transactions.
The way we exchange money is changing and we can expect it will continue to do so. At three+one, we will keep you informed of upcoming trends and how they may impact you. You can bet, sooner or later, we’ll all be impacted.
$20,000 to over $430,000
$50,000 to over $800,000
$7,000 to over $57,000
$45,000 to over $540,000
it goes on and on….
The proof is in the bottom-line results. Time and time again, the financial success stories we have reported were due to well-structured liquidity analyses.
Over the last 23 years, our team has been a pioneer in performing liquidity analyses for public entities and higher Ed institutions. Using our proprietary model, we are able to identify all levels of cash and ensure every last dollar is recognized as a revenue-generating asset.
Will liquidity analysis lead to greater interest earnings? The answer is without hesitation “yes.”
Since three+one is not a bank, financial advisor, or registered investment advisor, we work differently. Our analytical approach identifies patterns of your cash and considers a time horizon. We then determine a marketplace value on all levels of your cash. At that point the data is yours to share with your financial institutions. Using it, they can help you achieve higher yields—while adhering to all legal, safety, and liquidity guidelines.
The difference can add up in the tens to hundreds of thousands of dollars a year.
A liquidity analysis is not something you do once. Nor is it just an annual practice. Rather it requires a disciplined and independent perspective that you will want to live by.
If you have followed our blogs, you have seen how liquidity analysis can be the key to earning more on your cash. Together with your financial institutions and advisors, you will simply earn more on your cash. That’s the very definition of “win-win.”
The first step to a profitable liquidity analysis is your call three+one. You’ll see how stress free and easy we make the entire process, not only for you but for your financial partners as well.
University of Redlands is Leading the Way with an interest earnings jump from under $20,000 to over $400,000.
Last week the University of Redlands shared the results of their mid-year cashVest score with the Board of Trustees, which we have been granted permission to share with all of you.
For over ten years, the interest earnings line item on budgets has been close to nil. Now, with an effective federal funds rate of 1.15%, you should be asking yourself this vital question: “Should my entity be earning more on its cash?”
We’ve been asking that question at numerous state Government Finance Officers Association (GFOA) conferences as we tour the country. During one of our latest general sessions, we asked the 350 attendees if they believed their entity could be earning more on its cash.
The answer was clear.
Amazingly, 96.4% thought their entity could be earning more on its cash. If your entity is not earning at least 75 bps (0.75%) more on its cash than it did a year ago, talk to us about how we can help you start doing so today.
See Us At These Upcoming Events and Conferences:
PA GFOA – October
Last May three+one was out in front of the potential upcoming tax reform. We identified a trend around the removing of state and local income and property taxes as a tax deduction and the impact on public entities.
The trend we identified is now front and center.
The release last week of a newly proposed tax plan for individuals and companies appears to provide tax relief for all taxpayers. What it will look like after it goes through Congress will be anyone’s guess.
As I start to dig into the preliminary details, the deduction of state and local income and property taxes would be eliminated.
While this may seem minimal to some individuals living in low-taxing communities, the impact to residents in heavily taxed states could be significant. You can be sure the offset of these deductions will be reviewed and analyzed over the coming months.
In the federal government’s previous tax plans, the deduction for sales taxes was eliminated. At the time that was very controversial, and very negative long-term consequences were foreseen. Today the loss of those past deductions is nothing but a faint memory, but the loss of deductions for property and income taxes would have a much greater impact.
As we tour nationally, we continue to see public entities with healthier balance sheets. This encouraging trend speaks to a healthier underlining economy nationally. That said, these entities will likely need to look to other sources of income as the public will have less appetite for any increases in property, sales, or state income taxes.
It is always smart to explore alternative options to raise revenue. One way to increase your total annual revenue by .25 to .30% is to proactively manage all your operating and non-operating cash. While that percentage may seem small, it could very well lead to tens to hundreds of thousands of new dollars of revenue.
With a rising rate environment, one could also see annual income on cash increase by another 100%+ over the next year or two. This increase could help temper the need to raise taxes for cost-of-living increases, health premium increases, capital projects, or project budget deficits caused by tax caps or public votes.
Cash in today’s marketplace has a value of at least 1.0% or more, leading to a potential source of new income that could have a major effect on your bottom line, this year and next.
Taxpayers in heavily taxed states or localities (even with lower tax brackets) will be more sensitive to any tax increases if they do not see a benefit—even if it was only for a tax deduction. Whatever efforts you take that use innovative thinking to offset the loss of these deductions will be well received by your state’s taxpayers.
At three+one, we can help you identify the value of your operating and non-operating cash and, through your banking institution(s) or Registered Investment Advisor (RIA), turn it into an asset that will have significant value in the marketplace and improve your bottom line immediately.
See Us At These Upcoming Events and Conferences:
PA GFOA – October