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Could an Internet Connected Breathalyzer Soon Be In Your Pocket?

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AuraAfter fulfilling all of of the brand’s Indiegogo orders from their original crowdfunding campaign, Aura Breathalyzer has sold its product directly on the brand’s website. Now the company is developing a breathalyzer to be connected to the web. 

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Furthermore, Aura Breathalyzer has participated in third-party flash sale web campaigns, attended the Luxury Technology Show 2014 in New York City, and traveled to Essen, Germany to accept the “Best of the Best” 2014 Red Dot Award for the Product Design category. So, who might be interested in a luxury breathalyzer?

“Our customers are those who value aesthetic design and prefer a fashionable alternative to existing breathalyzer models. They share the belief that breathalyzers are more likely to be used in public if they are sleek and discreet,” Chris Surapol, Chief Operating Officer, told Hacked.

“They realize that breathalyzers are a physical reminder to drink responsibly,” he added.

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They understand that as product designers, we are limited to current technology standards and parts.

AURA’s sensor technology, electrochemical fuel cell sensor technology, is the same technology used in hand-held breathalyzers administered by police departments across the country. Law enforcement models range in price between $600-$1,000, while personal breathalyzers such as AURA generally range between $80-$250. The standards a police-issued handheld breathalyzer are more stringent than those headed for the consumer market.

“Law enforcement models must go through extensive lab testing, they must have built-in printing (record-keeping) capabilities, and they must have an automatic air-pump resetting system to clear out (reset) air from prior tests,” Surapol tells me.

As such, they are much bulkier and more expensive. Personal models are not designed to be used in rapid succession. They should not be passed around amongst friends because most do not have an automatic air-pump resetting system.

For these reasons, AURA is a fashion item with a twist.

“The AURA is designed to be a physical reminder and tool for people to use themselves, or to show their friends,” Surapol says. “We believe that the increased exposure makes people more conscious and aware of drunk-driving limits. Ultimately, we believe this will save lives.”

Surapol told me Aura has been working on a second model that will be compatible with smartphones and thus the Internet. One day soon, people might be uploading their BAC to the internet in real time.

For now, he can’t tell us too much about the smart model, other than they want the device to have bluetooth connectivity, historical data storage with login, social media functions and one-click taxi and Uber functionality. Developing all of this likely won’t be too easy.

“It will take some time to work on all of the above, and determine which to keep, which to remove, and if we can add other functions,” Surapol said.
Images from Aura.
Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




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Revolut: Apps For Cryptocurrencies

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For the last few months, it seems like we have been transfixed in the collapse of crypto prices, trying to figure out what is going to cause the next move up.  The answer is not easy to find. So I thought it might be an interesting change of pace to look at a fintech company that is participating in the crypto movement but has a few other cool things going as well.

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This may not fatten your investment account immediately but it should take your mind off bitcoin for a few minutes.  After that, who knows.

Big Valuation

Revolut is a UK based payments company in business since July 2015.  Last summer Revolut founders Nikolay Storonsky and Vlad Yatsenko raised over $66 million in VC funding and another $23 million from crowdfunding.  Yes, the Crypto buzz had something to do with their success. But there is quite a bit more.

Storonsky must be pretty good with a pitch deck considering the implied $200-$400 million valuation of the company.  He and his partner have deep experience in the global payments business. Nikolay spent years as a currency trader with Credit Suisse so he understands the absurd level of fees charged by the current system.

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The technical wizardry, however, rests with his partner Yatsenko. Vlad spent over ten years building financial systems for major Wall Street investment banks.  He serves as the company’s CTO.

Crypto Link: An Interesting Approach

According to company literature, the Revolut app allows customers to open a current account in under a minute, and includes a prepaid contactless MasterCard debit card.  So far there is nothing unusual about Revolut. But wait, there’s more.

The firm launched personal international bank account numbers (IBANs) across Europe just recently, and plans to integrate virtual currencies like bitcoin, Ethereum and Litecoin in the future.  This includes plans to add a wealth of new services in the coming months from the integration of cryptocurrency to pay-as-you-go travel insurance at the tap of a button.

Even before this gets accomplished, Revolut offers a currency exchange with 25 different currencies and a peer-to-peer payments service.  As Storonsky tells his story, “ . . . what we are demonstrating goes beyond banking.”

The one question investors are raising is how all these wonderful free services will be monetized.  An announcement this week should provide at least some answers.

CNP Fraud Prevention

Revolut has a new product aimed at tackling online card fraud. The mobile-only bank unveiled a virtual card that wipes a user’s card details and introduces new details each time they make a payment.

When people make an online payment, they enter card details and most often online retailers hold onto the data. This is where fraudsters have a field day.

In the trade it is known as Card Not Present (CNP) fraud.  As online shopping has increased steadily, CNP fraud has risen exponentially – something like 50% annually.

What happens is, every time you make a transaction, Revolut software deletes the card details so it’s impossible to make any transaction after that.  Just in case you were wondering, all the data remains in the browser of the customer. So the quality of customer service is not sacrificed.

Full Disclosure  

Revolut is not your typical ICO (i.e., all whitepaper and no product).  It is not fueled by any cryptocurrency or token. I first came across Revolut following their VC round last year and was impressed with the valuation, background of the founders and the business model.  I have no vested interest in the company. Someday the VC will want to cash out most likely through an IPO. So Revolut is a name you will want to keep track of.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 76 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Annuities Versus Mutual Funds: What’s Best For Retirement Planning?

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An annuity, a long-term contract between a buyer and an insurance company that allows the accumulation of funds on a tax-deferred basis for later payout in the form of a guaranteed income, can be part of a retirement plan, as discussed in last month’s article, “Do Annuities Have A Role In Retirement Planning?

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However, it is important to weigh the advantages and disadvantages of owning an annuity against other investment options for retirement, such as mutual funds.

Before investing, one should compare the annuity fee structure with regular no-load mutual funds. No-load mutual funds levy no sales commission or surrender charge and impose average annual expenses of less than 0.5% for index funds or around 1.5% for actively managed funds.

It’s also important to consider that earnings from an annuity will be taxed as ordinary income when the earnings are withdrawn, no matter how long the policyholder has owned the account.

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The scenarios discussed in this article apply in the United States. Readers are encouraged to consult their accountants about tax considerations related to buying annuities.

Annuities’ Advantages

Annuities do have some important advantages over other investments in retirement planning. Payouts can be guaranteed for life, regardless of how much the account actually earns, and they often include a guaranteed death benefit.

Income from stocks and mutual funds is not guaranteed, and there is no death benefit.

With mutual funds, the investor pays in an amount that is invested in a number of stocks, bonds, or a mixture of both, to create a stream of retirement income from stock dividends and bond interest.

While mutual funds use investment diversity to limit market risk, this is not a guarantee, according to Howard Kaye of Howard Kaye Insurance. Earnings can fluctuate significantly, and it is possible that no dividends or earnings will be paid out, especially if the principal is reduced.

Annuities have other advantages as well.

Unlike investments in tax-deferred retirement accounts, there is no limit on the amount that can be invested tax-deferred in an annuity, unless it is held inside a tax-deferred account, such as an IRA or a 401(k).

Variable annuities offer the opportunity to earn more than the guaranteed payment, depending on the performance of the investments. A variable annuity is essentially a mutual fund inside of a tax-deferred insurance policy, according to Trust Point, a Wisconsin based wealth management firm. Investments are made within mutual funds or mutual-fund-type accounts offered by the particular annuity, and the earnings grow tax deferred until they’re withdrawn.

Variable annuity investors can also switch from one investment to another within the annuity’s menu of choices without paying taxes. A mutual fund investor cannot switch among taxable mutual funds. Hence, annuity investors have more flexibility in adjusting their portfolios.

Annuities’ Disadvantages

Annuities are not without their disadvantages, however.

The earnings from an annuity, when withdrawn, are subject to the ordinary income tax rate, which for many is higher than the long-term capital gains rate that one incurs in owning a mutual fund, according to Daniel Kurt, writing in Investopedia.

If you buy a qualified annuity – that is, one you purchase with pretax dollars – you’ll have to pay ordinary income taxes on 100% of the disbursements you receive, Kurt noted. With a non-qualified annuity, some of the payment is considered a tax-free return of principal; only the earnings portion is subject to tax.

Stock dividends, by contrast, will be taxed at the capital gains rate rather than as ordinary income.

Trust Point offers the example of someone in a high-ticket tax bracket, who pays 39.6% on gains when they withdraw their money from their variable annuity, instead of the lower 15% or 20% long-term capital gains rates. This will be true regardless of whether the withdrawn dollars are a result of income dividends or capital gains distributions.

In addition, variable annuities can hit the policyholders’ heirs with a big unexpected income tax bill. If a $25,000 investment grows to $100,000 over the years and the policyholder dies, their heirs will owe income taxes on $75,000. If the policyholder is in a lower tax bracket than their heirs, it might make sense for a retiree to take distributions before death if there are no surrender charges.

In contrast, if they owned taxable mutual funds or other securities, the heirs would not have to pay taxes on the $75,000 in gains because taxable mutual funds enjoy a “stepped-up” basis at death for tax purposes, Trust Point noted.

The tax treatment of annuities is one reason why Kurt encourages people to buy as much income protection as needed – that is, expenses minus whatever they receive from Social Security or a pension. That way, you can invest the rest of your assets in an account that benefits from the capital gains rate.

The income guarantees of variable annuities add an expense that can clip the total return earned by the variable annuity investor, according to Trust Point.

As with mutual funds, payments from variable annuities fluctuate up or down depending on the performance of the underlying investments.

Fixed Indexed Annuities

Another choice investors have is the fixed indexed annuity. These annuities use financial indexes as a benchmark for earnings. The funds in the annuity are not directly invested in the stock market. Instead, the earnings are based on the earnings within an index, such as S&P 500, Dow Jones Industrial Average, etc.

(A fixed indexed annuity should not be confused with a fixed annuity, which provides a fixed amount every month for the rest of the annuitant’s life.)

While fixed indexed annuities use stock market indexes as benchmarks for earnings, the investor’s funds are not directly invested in the stock market. Instead, the earnings are based on the earnings within an index.

Like variable annuities, fixed index annuities have both advantages and disadvantages compared to mutual funds and other investments.

While they offer a market-risk-free opportunity, fixed indexed annuities aren’t as liquid as cash, noted Kaye of Howard Kay Insurance.

They are, however, more liquid than most CDs or bonds, Kaye noted. In fact, nearly all offer “free withdrawals” every year. Once the surrender period is over, all of the funds are fully liquid.

Should the policy holder die during the annuity period, it’s possible that there won’t be much left for heirs. Such products are best suited for someone looking to supplement income and already has an estate plan in place for their heirs.

The decision of whether to invest in a variable annuity, fixed indexed annuity or a taxable mutual fund will depend on individual factors such as age, expected lifetime, the reason for the investment, liquidity needs, fees, estate plan and the overall portfolio.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Financial Freedom

Do Annuities Have A Role In Retirement Planning?

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Annuities are contracts issued by insurance companies that have some tax advantages. They are often used in retirement planning because they can provide an income stream after generating earnings on a tax-deferred basis.

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Bob MacDonald, founder of LifeUSA, writing in Forbes, defines an annuity as a long-term contract between a buyer and an insurance company that allows the accumulation of funds on a tax-deferred basis for later payout in the form of a guaranteed income, the core strength being the safety the guarantees. MacDonald believes annuities have a place in a retirement plan.

There are many types of annuities. This article will describe the main types of annuities and the ways they can be used in retirement planning.

The scenarios discussed in this article apply in the United States. Readers are encouraged to consult their accountants about tax considerations related to buying annuities.

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CNN Money encourages people to consider an annuity after they have maxed out other tax-advantaged retirement investment vehicles, such as IRAs and 401(k) plans. If a person has additional money to set aside for retirement, an annuity’s tax-free growth can be beneficial, especially if the investor is in a high-income tax bracket.

Annuities have drawbacks, CNN Money notes. The money cannot be withdrawn for a period of time without incurring a penalty fee and taxation. Typically, if the owner makes a withdrawal within the first five to seven years after buying the contract, they will have to pay a surrender charge of up to 7% or more on the withdrawn amount. Annuities sometimes charge other fees as well.

Immediate And Deferred Annuities

There are two basic types of annuities: immediate and deferred.

The purpose of an immediate annuity is to provide income for the owner right after buying the annuity. People typically buy an immediate annuity as a way to have a guaranteed income.

The purpose of a deferred annuity is to grow the funds to provide future income. Deferred annuities can be converted to immediate ones when the owner wants to begin collecting their payments.

Annuities have different payout options.

One option is income for a guaranteed period, which is also called “certain period annuity,” according to CNN Money. This guarantees a specific payment for a specific time period. If the owner dies before the period ends, the beneficiary receives the remainder of the payments.

Another option is lifetime payments that guarantee a payout for the owner as long as they are alive, but there is no survivor benefit. The payouts can be variable or fixed, depending on the type of annuity. The amount of the payout depends on the amount invested and the owner’s life expectancy.

Still another payout option is life with a guaranteed period certain benefit, also known as “life with certain period.” The owner receives a guaranteed payout for life along with a period certain phase. If the owner dies during the certain period, the beneficiary continues to receive the payment for the remainder of that period.

Joint and survivor annuity is one in which the beneficiary continues receiving payments for the rest of their life after the owner dies.

The primary factors taken into account in the calculation of annuity payments are the current dollar value of the account, the age of the owner, the expected future inflation adjusted returns from the assets in the account, and the annuitant’s life expectancy based on industry standard life expectancy tables, according to Investopedia.

Surrendering Annuities

An annuity can be surrendered. If the owner surrenders their annuity before a specific time period, there will likely be a surrender fee. The surrender charge usually declines by one percentage point per year after the annuity is purchased until it disappears completely, usually after seven or eight years.

It is possible to exchange an existing annuity for a new one. These are known as 1035 swaps under the IRS code in the U.S., according to CNN Money. There are no taxes incurred when exchanging one annuity for another. However, when exchanging an old annuity for a new one, the owner begins a new surrender period.

In addition, the spousal provisions in the annuity contract are also considered.

Fixed And Variable Annuities

Annuities are usually either fixed or variable.

A fixed annuity offers an assured amount of payment over the payment term or the annuitant’s life and carries little risk. The annuitant usually receives a fixed amount of money every month for the rest of their life. However, the price for removing risk is limiting growth opportunity. Should financial markets have a bull market, the annuitant misses out on these additional gains.

Variable annuities, on the other hand, allow the annuitant to participate in the potential appreciation of their assets while still drawing an income from their annuity. With a variable annuity, the insurance company typically guarantees a minimum income called a guaranteed income benefit option and offers an excess payment amount that fluctuates based on the performance of the annuity’s investments.

Variable annuities can provide a balance between guaranteed retirement income and continued growth exposure, according to Investopedia.

Variable annuities usually have management fees. The ongoing investment management and other fees oftentimes amount to 2% to 3% a year.

The fee structures can be complex. Insurance agents and others who sell annuities often tout the positive features and downplay the drawbacks, making it important for the purchaser to carefully review the annuity before buying.

Not all annuities have high fees, however. “Direct sold annuities” that are not sold by insurance agents do not charge a sales commission or a surrender charge, according to CNN Money. Companies offering “direct sold annuities” include Schwab, Fidelity, Vanguard, T. Rowe Price, Ameritas Life and TIAA-CREF.

Before investing, one should compare the annuity fee structure with regular no-load mutual funds. No-load mutual funds levy no sales commission or surrender charge and impose average annual expenses of less than 0.5% for index funds or around 1.5% for actively managed funds.

It’s also important to consider that earnings from an annuity will be taxed as ordinary income when the earnings are withdrawn, no matter how long the owner has owned the account.

For some investors, it is critical to secure a risk-free income for their retirement. Other investors are less concerned about fixed income than about continuing to enjoy the capital gains of their funds. These needs determine it is better to choose a fixed or variable annuity.

The factors in deciding between an annuity and a mutual fund will be addressed in a future article.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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