Is flying first-class worth it?
And more of the week's best financial advice
Here are three of the week's top pieces of financial advice, gathered from around the web:
The cost of flying in comfortIs splurging on a first-class ticket a good deal? asked Scott McCartney at The Wall Street Journal. For an average coach seat on a domestic flight on Delta, United, or American Airlines, you pay about 80 cents per square inch of floor space. "Upgrade to domestic first class, and you'll pay more than three times as much, but you'll only get 45 percent more space." The same math holds true for international flights. Even extra-legroom seats in coach offer only about 10 percent more space, at a cost of roughly $50 each way, or more on longer trips. The "best comfort value in the sky right now" may be premium economy, offered by Delta, American, and United. You'll pay twice as much as coach but get one-third more space. "That can make a difference for fliers between pain and comfort."
Hedge funds' big fail "Hedge funds are losing clients and money as they continue to deliver returns far worse than the broader stock market," said Dion Rabouin at Axios. The S&P 500 has outperformed the average hedge fund by more than 100 percent since 2009. That means that an investor who a decade ago put $100,000 on the S&P with a fee of 10 basis points would have $301,489 at the end of 2019's first quarter. That same $100,000 invested with a typical hedge fund would return $174,787. And while Americans' total financial assets have grown by nearly $11 trillion since 2015, "less than 1 percent of that gain has been in hedge funds." So perhaps it's no surprise that in 2018 "the industry saw the fewest funds launched since 2000."
SUVs too pricey for Gen ZThe next generation of consumers can't afford the SUVs coming out of Detroit, said Keith Naughton at Bloomberg Businessweek. More automakers are ditching sedans in favor of more expensive and more profitable SUVs and trucks. That shift comes just as many in Gen Z — who are burdened with student debt and highly cost-conscious — contemplate their first set of wheels. "Two-thirds are buying used, with most opting for compact cars or midsize sedans." Overall, Gen Z is expected to account for only 3.6 percent of new vehicle purchases this year, compared with 4.4 percent for Millennials when they were starting out in 2004. Gen Z will comprise 40 percent of consumers by next year, so Detroit may have to revive the sedan "if it wants to catch this youth wave."
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try 8 issues for only $1 here.