investing http://www.wisebread.com/taxonomy/term/285/all en-US Your 401K in 2017: Here's What's New for You http://www.wisebread.com/your-401k-in-2017-heres-whats-new-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/your-401k-in-2017-heres-whats-new-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-502449548.jpg" alt="Learning what&#039;s new for your 401K in 2017" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There aren't many 401K rule changes to keep up with this year, but that doesn't mean you can't bring about some of your own positive changes to your retirement savings. Let's take a look at what you need to know to make the most of your 401K in 2017.</p> <h2>No Changes in the Contribution Limits</h2> <p>The amount the IRS allows you to contribute to a 401K plan this year remains as it was last year &mdash; $18,000 if you're younger than 50, or $24,000 if you're older. However, the Feds did make two changes to the retirement savings landscape, which pertain to people on either end of the income spectrum.</p> <h3>1. More May Qualify for the Saver's Credit<strong> </strong></h3> <p>Low and middle-income earners should be aware of the <a href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit" target="_blank">Saver's Credit</a>, a tax benefit that rewards those who save for their later years through a 401K or IRA. Depending on your income and filing status, the credit is worth 10%, 20%, or 50% of up to $2,000 of contributions per person (for married couples, that means up to $4,000 of contributions).</p> <p>Married couples filing joint returns can claim at least a 10% credit as long as their adjusted gross income (AGI) is no more than $62,000. That maximum income amount is $500 more than in 2016, so more households should qualify. However, the most generous 50% credit is allowed only for those couples making no more than $37,000 &mdash; the same threshold as in 2016.</p> <p>The credit/income limits for married couples filing jointly are:</p> <ul> <li>50% if AGI is $37,000 or less</li> <li>20% if AGI is $37,001&ndash;$40,000</li> <li>10% if AGI is $40,001&ndash;$62,000</li> </ul> <p>For singles, or married couples filing separate returns, the maximum amount you can earn and still qualify for a credit is $31,000, which is $250 higher than in 2016. In order to qualify for the maximum 50% credit, your income has to be no higher than $18,500.</p> <p>Here are the details:</p> <ul> <li>50% if AGI is $18,500 or less</li> <li>20% if AGI is $18,501&ndash;$20,000</li> <li>10% if AGI is $20,001&ndash;$31,000</li> </ul> <p>Keep in mind, a tax credit is much more valuable than a tax deduction because it is a dollar for dollar reduction of taxes.</p> <h2>2. Higher-Income Earners May Get More</h2> <p>On the other end of the income spectrum, the IRS expanded the contribution parameters pertaining to the retirement plans of well-paid workers. For example, contributions &mdash; by the employee and/or his or her employer &mdash; are limited by how much an employee is paid in total. In 2017, the amount of compensation on which contribution amounts can be based was increased by $5,000 to $270,000, and the maximum total contribution amount was bumped up by $1,000 to $54,000.</p> <h2>What Changes Will You Make?</h2> <p>Even if the two changes noted above don't pertain to you, that doesn't mean you need to &mdash; or should &mdash; stay the course with your retirement savings. The start of a new year is a good time to re-evaluate your goals and see if you're on track.</p> <p>Here are two areas to review.</p> <h3>1. How Much You Need<strong> </strong></h3> <p>Do you know how much you should have saved by the time you retire? Do you know how much that means you should be saving each month right now? If not, take a few minutes to run some numbers. If you're not saving enough, consider increasing your contributions.</p> <h3>2. How You Should Allocate</h3> <p>Do you know your optimal asset allocation? That pertains to how much of your investment portfolio should be in stocks, and how much in bonds (or stock and bond mutual funds). Vanguard offers a well-designed, free <a href="https://personal.vanguard.com/us/FundsInvQuestionnaire" target="_blank">asset allocation questionnaire</a>, so give it a try. Then try to bring your portfolio more in line with your optimal asset allocation.</p> <p>While tax credits and employer contributions are significant benefits, the most important factors that determine your investing success are the amount of money you save each month, and whether your asset allocation is appropriate for someone of your age and risk tolerance. Take the time to evaluate your individual retirement savings scenario, and see how you can make it even better for 2017.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/your-401k-in-2017-heres-whats-new-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-crucial-things-you-should-know-about-bonds">5 Crucial Things You Should Know About Bonds</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-without-a-401k">How to Save for Retirement Without a 401K</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k Adjusted Gross Income asset allocation bonds changes contribution limits employers investing saver's credit stocks Mon, 20 Feb 2017 10:00:11 +0000 Matt Bell 1892607 at http://www.wisebread.com 7 Reasons You Really Need to Pay Yourself First (Seriously) http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-reasons-you-really-need-to-pay-yourself-first-seriously" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_glasses_piggy_bank_613042186.jpg" alt="Woman learning reasons to pay herself first" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's a familiar refrain in the world of personal finance: &quot;If you want to build wealth, you've got to pay yourself first!&quot;</p> <p>But what does paying yourself really mean and how can such an odd-sounding notion radically alter the course of your financial life? Paying yourself first simply means setting aside part of your income in a savings or investment account before you do anything else &mdash; before you upgrade your smartphone, buy new jeans, pay the utilities, or spring for happy hour drinks for your three closest friends.</p> <p>Thinking of your savings plan as a bill you must pay on a regular schedule automates the act of saving and can build significant wealth over time. Still not convinced it's the path of personal financial security? Read on. Here are seven reasons you should pay yourself first.</p> <h2>1. It Sets Proper Priorities</h2> <p>What's more important than funding your future? What priorities eclipse your family's long-term financial security? Paying yourself first sets in motion an idea that's crucial to successful saving: I matter and I'm going to start acting like it. Remember, wealth-building doesn't happen by chance; it's the result of intention, consistency, discipline, and big-picture thinking.</p> <h2>2. It's Easy</h2> <p>Paying yourself first through automatic payroll deductions is a simple and pain-free way to save. The &quot;set it and forget it&quot; approach makes saving and investing easy because the money is redirected to a 401K, IRA, savings account, or other investment vehicle immediately. Why is that immediacy so important? Because it helps avoid that nagging sense of deprivation that's laid waste to so many people's best financial intentions.</p> <h2>3. It Taps Into the Power of Dollar Cost Averaging</h2> <p>With dollar cost averaging, investors buy a fixed dollar amount of a particular stock or investment, no matter what the share price. Because the investment occurs at routine intervals, that fixed dollar amount buys more shares when the price is low and fewer when it's high. This investment technique helps avoid the risk associated with dropping a lump sum in the market at a moment when share prices are high (a move that gets you less for your money).</p> <h2>4. What's Last Is What's Left</h2> <p>There's a name for folks who try to save only what's left over at the end of the month: They're called spenders. New wants and needs always have a way of creeping in and rapidly consuming any surplus. Paying yourself first &mdash; taking your savings right off the top, investing it, and efficiently managing the rest &mdash; is a far superior strategy.</p> <h2>5. It Builds Discipline</h2> <p>Paying yourself first by contributing a fixed amount of money regularly to a savings or retirement account builds financial discipline &mdash; a discipline that can be applied in countless other financial and nonfinancial ways. As with all habits, saving becomes easier over time. As you watch your wealth grow, you'll want to find new ways to cutback on expenses, increase your income, and save more.</p> <h2>6. It Creates a Healthy Work/Reward Cycle</h2> <p>Ever feel like modern life is an endless cycle of work-spend-repeat? An effective way to overcome that nearly universal sentiment is by starting a savings plan and watching your wealth grow. Paying yourself first creates a new cycle &mdash; one where all that hard work steadily increases your net worth, expands your opportunities, and offers a level of freedom that more stuff simply can't provide.</p> <h2>7. It Models Smart Financial Strategy</h2> <p>I've always been an advocate of discussing money with kids. Of course, you don't want to burden children with adult money worries, but it can be immensely valuable to model and explain effective money-saving strategies like paying yourself first, avoiding credit card debt, and living within your means. Encouraging a level of financial transparency demystifies the world of personal finance and helps kids build the practical money management skills that will serve them well in adulthood.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-make-financial-habits-not-goals">Why You Need to Make Financial Habits, Not Goals</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-brilliant-tips-from-smart-mom-rich-mom">4 Brilliant Tips From &quot;Smart Mom, Rich Mom&quot;</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living discipline dollar cost averaging good habits investing pay yourself first priorities saving money stability Wed, 07 Dec 2016 12:00:11 +0000 Kentin Waits 1849009 at http://www.wisebread.com 6 Ways Millennials Have Changed Money (So Far) http://www.wisebread.com/6-ways-millennials-have-changed-money-so-far <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-millennials-have-changed-money-so-far" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_chalkboard_money_500538951.jpg" alt="Learning how millennials have changed money so far" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Every generation of Americans have changed the face of this nation in its own way.</p> <p>In the 1990s, our country was very different from it was in the '70s, which, itself, was a far cry from the 1950s. Today, Millennials are overhauling our political, social, and financial landscape so much that it's barely recognizable from just 10 years ago, and that's not necessarily a bad thing (depending on where you stand on certain issues.)</p> <p>As far as money is concerned at least, the &quot;Me Generation&quot; is making it easier to earn money and more efficient to spend it, while reinventing entire aspects of personal finance, like investing. They're living up to the old idiom of putting their money where their mouth is &mdash; and here's how.</p> <h2>1. Cash Back Is Growing While Coupons Fall Behind</h2> <p>I used to be a major coupon clipper, once saving more than $80 on my grocery bill on double-coupon day at my local supermarket. My couponing prowess (and interest) has consistently waned over the years. Instead, substituting my savings with cash back deals through my bank and grocery apps, like <a href="https://ibotta.com/register?friend=jcsgjbv">Ibotta</a>, <a href="https://www.checkout51.com/">Checkout 51</a>, and <a href="https://savingstar.com/">SavingStar</a>, has skyrocketed.</p> <p>I'm not alone. Millennials are hopping aboard the rebate train in droves.</p> <p>If you're not familiar with the concept of the cash back service, it's basically the opposite of the upfront savings that coupons provide. Instead, these rebate providers pay out the consumer on the back-end, after the shopping trip is complete.</p> <p>SavingStar, for instance, offers deals from popular grocery brands like Cheerios, Yoplait, Dove, and more. For some chains, it'll link deals directly to shoppers' loyalty cards. For other stores, shoppers can submit a picture of their receipt through the app or website. In either case, shoppers earn cash back into their SavingStar accounts, which can be paid out to a bank or PayPal account, or as gift cards from Starbucks, iTunes, and AMC Theatres.</p> <p>Of course, cash-back-adopting Millennials would maximize their savings by using both coupons <em>and</em> the rebate services, but, ya know &mdash; kids these days.</p> <h2>2. Investing Is Being Completely Reinvented</h2> <p>As an investor myself, I've avoided putting money in stocks (I just don't trust that market), preferring to invest in real estate or other entrepreneurs' business ideas. Michael Banks, founder of investing and personal finance blog Fortunate Investor, says I'm in good company. Millennials are turning the investment industry on its head by rethinking long-held strategies, perhaps out of necessity.</p> <p>&quot;As the generation with the largest student debt and toughest-looking future, traditional investing is out of the picture,&quot; Banks says. &quot;Instead, more Millennials are relying on micro-investing &mdash; investing small amounts of money frequently &mdash; to accomplish their savings goals.&quot;</p> <p>Micro-investing allows would-be investors with little starting capital to bypass the roadblocks that usually keep them out of the game &mdash; minimum investment levels, trading costs, market research, and really just not having a ton of money.</p> <p>&quot;Investing has always had a high buy-in value, which you would think eliminates the generation that is doing everything they can to save whatever they have &mdash; but a handful of apps are changing that, and opening the doors for Millennials to try their hands at creating their own investment portfolios,&quot; adds Banks.</p> <h2>3. Hardly Anyone Under Age 35 Walks Into a Bank Anymore</h2> <p>Your grandma probably still goes to the brick-and-mortar bank. Heck, maybe even your dad likes to roll in from time to time for a withdrawal and a lollipop, but you'll be hard-pressed to find a Millennial in a bank, unless it's to grab cash from an ATM for after-work drinks (or working there). Rather, they prefer the easy-breezy mobile banking that accommodates their fast-paced lifestyle.</p> <p>According to a recent study, 75% of Millennials are at least somewhat <a href="https://www.marketingcloud.com/what-millennials-expect-from-their-banks/">reliant on a mobile banking app</a> to interact with their bank for tasks such as depositing or sending checks, checking their balance, and paying bills.</p> <p>&quot;This seems like somewhat of a no-brainer, but the power of convenience and control often goes overlooked,&quot; writes creative media agency Brokaw. &quot;Within mobile interactions, there are multiple avenues in which banks can increase their influence and exposure, including text messages and push notifications. Take FirstMerit Bank's text banking and alerts, for example: It allows their customers to request activity alerts for different aspects of their account right from their phone.&quot;</p> <p>Legit, though &mdash; mobile depositing is one of the best inventions of the 21st century. I will stand by that until my retinas are replaced with laser scanners that do all my banking for me. Which is totally gonna happen, ya know.</p> <h2>4. The Monetization of Ideas</h2> <p>Think you need to push product to turn a profit? Old school. Millennials' intellectual property is their bread and butter &mdash; and they're fiercely protective of it.</p> <p>&quot;The increasing monetization of ideas is one trend Millennials are driving, which doesn't look to be slowing down anytime soon.&quot; explains Monica Mizzi, editor of LegalTemplates.net, a website that equips people with the tools to be their own legal advocates. &quot;The boom in startup culture can be largely attributed to the throng of Millennials who are taking the plunge to make their 'one in a million' idea come to life.&quot;</p> <p>Successive studies highlight that a growing number of Millennials are bucking the trend of traditional employment to try their hand at entrepreneurship. With this has come an increasing interest in using nondisclosure agreements to protect their business ideas.</p> <p>&quot;While using an NDA to protect business ideas is not a novel concept, growing market competition has led Millennials to become more proactive in legally protecting their ideas &mdash; even before they have come to fruition,&quot; Mizzi continues. &quot;It's not uncommon to hear reports of big companies pinching ideas or being 'inspired' by their competitors' ideas, so Millennials wanting to become entrepreneurs are more conscious of ensuring their ideas are never compromised.&quot;</p> <h2>5. Instant Financial Transactions Are Becoming More Common</h2> <p>When do Millennials want their money? Now!</p> <p>Domestic instant transaction service has become commonplace for this demographic &mdash; I get paid instantly via Venmo when I deposit money from my Lyft earnings (like a boss!) &mdash; and its expansion to international exchanges is inevitable. The problem is, sending money internationally is a bit trickier with more complex compliance and regulations needs. But at least one service right now, <a href="https://www.remitly.com/us/en/">Remitly</a>, has built compliance and regulation rules into their app making it possible to meet Millennials' need for speed and convenience.</p> <h2>6. Digital Currency Has Real Value</h2> <p>Digital, or cryptocurrency as it's formally known, went mainstream with the runaway success of Bitcoin &mdash; a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency (as explained by Wikipedia). In layman's terms, it's cyber money that you can spend wherever cyber money is accepted, which is a real thing in this day and age.</p> <p>But Bitcoin isn't the be-all or end-all of digital currency. Imitators have popped up, relevant in their own rights. Using a digital currency called Steem, for example, users of brand-new social network<a href="http://www.steemit.com"> Steemit</a> (which looks a lot like Reddit) get paid for posting and curating content. And it's become wildly popular. After launching this past May, Steemit (which has a 26-year-old CEO) already has nearly 120,000 registered users and posts nearly 1,000,000 unique visitors per month. They've also paid out more than <a href="http://www.rollingstone.com/culture/news/can-this-social-media-site-make-you-rich-w449566">$4,000,000 in rewards</a> to users to date.</p> <p>While digital currency is still in its infancy despite these successes, you can expect to see more and more of it infiltrating sectors of industry. Will it ever replace cash or credit? Probably not. But it's certainly an interesting concept as a new form of legitimate currency as we've move forward with Millennials at the helm.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/6-ways-millennials-have-changed-money-so-far">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-the-21st-century-why-is-your-money-stuck-in-the-20th">It&#039;s the 21st Century — Why Is Your Money Stuck in the 20th?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-millennial-money-apps-everyone-should-use">The 5 Millennial Money Apps Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-highly-effective-ways-to-save-without-clipping-a-coupon">6 Highly Effective Ways to Save Without Clipping a Coupon</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-things-successful-millennials-do">7 Things Successful Millennials Do</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle apps cash back coupons digital currency entrepreneurship investing millennials online banking Fri, 02 Dec 2016 11:00:10 +0000 Mikey Rox 1844380 at http://www.wisebread.com Could Trump Bring Higher Interest Rates and Inflation? Consider These Money Moves http://www.wisebread.com/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/donald_trump_98978789.jpg" alt="Donald Trump could bring higher interest rates and inflation" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>In a matter of weeks, America will have a new President, and people are already speculating as to what a new man in the White House will mean for the economy.</p> <p>Donald Trump outlined a series of policy proposals on the campaign trail, including some that, according to economists, may impact inflation and interest rates. This comes at a time when the Federal Reserve has been hinting at raising interest rates for a while. So if all of this happens, what should you do with your money? Here are some ideas.</p> <h2>If There's Inflation</h2> <p>Ifd the federal government opens up the fiscal spigot, inflation is sure to follow.</p> <h3>1. Take a Look at Gold</h3> <p>Gold has long been a popular investment for those seeking protection against inflation, especially during times of political and global uncertainty. Prices for gold spiked in the immediate aftermath of Trump's election, but are still quite low from a historical standpoint.</p> <p>There are several ways to purchase gold. You can buy gold bars or bullion and store it, or purchase shares of companies involved in gold mining. There are also exchange-traded funds (ETFs) that track the performance of gold or gold-related industries.</p> <h3>2. Get Into TIPS</h3> <p>The U.S. Treasury offers something called Treasury Inflation-Protected Securities, or TIPS. These are pegged to the Consumer Price Index, so when the index rises, the value of the investment rises with it. These are solid, low-risk investments that are perfect for when inflation is a possibility, and they are exempt from state and local income taxes. It's also possible to own TIPS in a retirement fund, via an ETF or mutual fund.</p> <h3>3. Invest in Commodities</h3> <p>In addition to gold, there are other commodities that can be used as a hedge against inflation. Many commodities, including oil, wheat, and even live cattle naturally rise with inflation. If you're unsure of which commodities to buy, consider looking at a fund or ETF that invests in commodities broadly. The PowerShares DB Commodity Index Tracking Fund [NYSE: <a href="http://www.google.com/finance?cid=722064">DBC</a>]) and the Fidelity Series Commodity Strategy Fund [NYSE: <a href="https://www.google.com/finance?q=FCSSX&amp;ei=4G48WJC_BdWNmAHcobLABw">FCSSX</a>] are two examples.</p> <h3>4. Get Real With Real Estate</h3> <p>Real estate is another area that often does well during an inflationary period. There are many ways to obtain real estate, either by purchasing property directly, or by buying shares of real estate investment trusts, or REITs. The caveat here is that if interest rates rise, then the cost of a mortgage to purchase real estate will also go up. So it may be smart to get in now while interest rates are still at historic lows.</p> <h2>If Interest Rates Rise</h2> <p>The Federal Reserve is expected to tick interest rates up a bit soon, while Trump's economic proposals could accelerate that process.</p> <h3>1. Invest in Banks</h3> <p>Banks generally do better when interest rates are higher than they are now. Right now, these companies have a low &quot;net interest margin&quot; &mdash; the difference between the interest they earn and the interest they pay out. Higher rates will increase this margin, thus increasing the bank's profitability.</p> <h3>2. Lock in a Fixed Rate</h3> <p>If you have a mortgage with an adjustable rate, now is the time to lock into something more stable, before interest rates rise. Convert your mortgage to a fixed-rate loan now, while interest rates are low. If you don't do this, your rate could adjust upward to a level that you may find unsustainable.</p> <h3>3. Switch to Short-Term Bonds</h3> <p>If interest rates are about to go up, you don't want your money tied up in something that's not paying a high rate. Placing your money in shorter term bonds and bond funds will allow you to remove your money earlier and then reinvest it in something with a higher return once rates rise. Long-term bonds do pay a higher rate than short-term bonds, but you lose flexibility.</p> <h3>4. Bolster Your Cash Holdings</h3> <p>With interest rates at ultralow levels, there hasn't been much incentive to hold on to a lot of cash. But if interest rates rise, you may find it's worth it to have a little more cash on hand, as it will generate some income for you. Stocks and other investments will probably still be more lucrative, but higher interest rates means there won't be as much downside to having more liquid savings, and it may give you more peace of mind.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/could-trump-bring-higher-interest-rates-and-inflation-consider-these-money-moves">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/oh-noes-inflation">Oh noes! Inflation!</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-investments-that-may-soar-during-trumps-term">8 Investments That May Soar During Trump&#039;s Term</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-with-inflation">How to live with inflation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-cool-things-bonds-tell-you-about-the-economy">7 Cool Things Bonds Tell You About the Economy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Financial News bonds donald trump federal reserve gold inflation interest rates investing president Wed, 30 Nov 2016 12:00:11 +0000 Tim Lemke 1843966 at http://www.wisebread.com 9 Things Football Teaches Us About Money http://www.wisebread.com/9-things-football-teaches-us-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-things-football-teaches-us-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/football_player_92992279.jpg" alt="Learning things that football teaches us about money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's the time of year when Saturday and Sunday afternoons are spent rooting for your favorites on the gridiron. American football is King in the fall, and it's common for us to channel the game into life lessons about grit, determination, and teamwork. But football can also teach us a thing or two about handling our money.</p> <p>What can football teach us about personal finance? Here are some key takeaways.</p> <h2>1. Have a Game Plan</h2> <p>A football coach doesn't just show up on Sunday and wing it. He's spent the season devising a system that will give his team the best chance of success. He's scouted his opponent, studied his own players' strengths and weaknesses, and mapped out an approach to victory. This can be applied to any sort of money matter, from tackling a massive pile of debt, to saving for a new home, to investing for retirement. Develop a plan first, then you'll give yourself a greater chance of success.</p> <h2>2. Mix Things Up</h2> <p>A successful football team isn't going to run the ball on every play. It can't pass the ball every time, either. The best teams have a diversified plan of attack, and don't rely too heavily on any one weapon. Your investment philosophy should be similar in nature. Don't rely too heavily on one stock or industry. Because when you rely on one thing, even if it's shown to be successful in the past, you'll eventually get burned. Diversify your portfolio, just like a coach diversifies his playbook.</p> <h2>3. Be Smartly Aggressive</h2> <p>In football, you need to do what it takes to get into the end zone. This means throwing the long pass downfield once in awhile, or even going for it on fourth down. You don't want to be reckless, but it's hard to win a football game if you don't take some risks. Your investment philosophy should reflect this approach. A young person looking to accumulate wealth for retirement should invest largely in stocks, not conservative bonds or cash. Yes, there's some risk involved, but also a lot of evidence to show that you'll come out ahead in the end. Because playing it safe will only get you so far.</p> <h2>4. Be More Conservative Near the Finish</h2> <p>A football team with a big lead can afford to be more cautious as the end of the game approaches. You'll see teams draw up more running plays to eat up the clock and decrease the chances of mistakes. With the clock winding down, it's all about protecting the lead you have rather than taking risks that might blow the game. When investing, think of retirement as the fourth quarter. Once you have a big nest egg saved, shift your investments to more conservative things like bonds or cash. This way, you'll be less likely to lose the wealth you've created for yourself.</p> <h2>5. Field Goals Are Okay</h2> <p>Football games aren't always won with a flurry of touchdowns. Often, it's the field goal kicker that wins the game. We all would like our teams to get seven points on every possession. But that's not realistic. Settling for three points is better than nothing, and can still put you in a position to win. In investing, it's wise to think of your stock portfolio as a field goal kicker, steadily putting points up on the board. Sure, you're going to want some touchdowns mixed in, but it's often the smaller, but more frequent scores that move you to where you want to be.</p> <h2>6. Limit Your Mistakes</h2> <p>It's impossible for a football team to play a perfect game, and it's common to overcome a fumble or interception and still win. But too many blunders will cost you the game. This is true when it comes to finances as well. Did you buy a bad stock that cost you some money? That's okay, just don't make the same mistake again. Did you accumulate some debt? Don't worry, you can get out of the hole if you make the right choices from here on out. Keep your bad decisions to a minimum, and you'll be alright.</p> <h2>7. Sometimes You Will Take a Beating</h2> <p>Finances, just like football, can be brutal. There will be days when your team gets trounced, and your stock portfolio may get pounded in similar fashion. It happens. The key is to get up and keep trying. Resilience and patience are big drivers of success in football, and this can easily be applied to investing, saving, and debt reduction.</p> <h2>8. You Can't Win in One Day</h2> <p>As much as pundits like to refer to certain football games as &quot;must-wins,&quot; the reality is that the NFL plays a 16-game season. Sure there are some games that are more important than others, but it normally doesn't make much sense to dwell on the results of any single game during the season. Likewise, it's silly to panic over one bad day in the stock market, or one bad piece of personal finance news. The only thing that matters is how you finish. If you take the long view and are generally making positive progress, then you'll end up okay, just like in football.</p> <h2>9. Nothing Is for Certain</h2> <p>Pro football is one of the few sports where player salaries are not guaranteed. Any player can be cut and out of a job at any time. A perennial Pro Bowler can lose his starting job to a rookie. This lack of certainty often rears its ugly head in matters of money, also. You may think you have enough money to cover an emergency, but you don't. You assume you'll get a 9% return on a stock, but you lose money instead. This is why it's crucial to live conservatively, plan well, and invest with a long time horizon in mind. Because just when you think you have things all figured out, life happens.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-many-of-these-frugal-virtues-have-you-mastered">How Many of These &quot;Frugal Virtues&quot; Have You Mastered?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously">7 Reasons You Really Need to Pay Yourself First (Seriously)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-wake-up-richer-tomorrow-than-you-are-today">12 Easy Ways to Wake Up Richer Tomorrow Than You Are Today</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living football investing lessons pigskin planning saving sports strategies Thu, 17 Nov 2016 09:00:09 +0000 Tim Lemke 1834560 at http://www.wisebread.com The Frugal Colonizer's Guide to Getting to Mars http://www.wisebread.com/the-frugal-colonizers-guide-to-getting-to-mars <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-frugal-colonizers-guide-to-getting-to-mars" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/astronaut_mars_office_19963703.jpg" alt="Frugal colonizer trying to get to Mars" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you want to take a trip to Mars?</p> <p>For many people, such a journey would be the thrill of a lifetime. But there's no indication that an average person can currently shell out the billions of dollars it would take to get there.</p> <p>However, there are people working every day on the concept of commercial space flight, and it's possible that one day, such interplanetary trips will be financially achievable even for middle class folks. Famed entrepreneur and inventor Elon Musk recently said he'd like to see the price of a Mars trip drop to about $200,000.</p> <p>Of course, that's still a big chunk of change. But with sensible financial planning, it's a plausible figure even for someone who's not filthy rich.</p> <p>Let's take a look at how an Average Joe might be able to accumulate $200,000 for a trip to Mars.</p> <h2>Save and Wait</h2> <p>Elon Musk didn't give an indication of <em>when </em>the $200,000 price tag might be in place. So let's assume that it's far out in the future. This gives you time to begin saving now and accumulate wealth over time. $200,000 isn't an amount that can be saved overnight, but over the course of, say, 25 years, it's achievable. If you put away just $250 per month and invest in the general stock market, earning about 7% per year, you'll have about $200,000 a quarter century from now, assuming inflation remains low.</p> <h2>Save More and Wait Less</h2> <p>So you don't want to wait 25 years? Fine. That means you'll have to find ways to save more and accumulate $200,000 in a shorter span of time. Assuming the typical 7% market return on investments, it will take about $650 a month to reach your goal in 15 years. To do it in 10 years, you'll need to save about $1,200 per month. It's possible to invest more aggressively and earn money faster, but you also run a greater risk of losing money or falling short of your goal.</p> <h2>Go Full Monk</h2> <p>So let's say you have a middle class salary but don't want to wait at all. You make about $50,000 a year, but want to go in the next five years or so. Well, sounds like it's time to practice living on Mars by cutting out just about every luxury in your life. Move in with your parents to save on rent, or downsize into a tiny house. Ditch your car and get a bus pass. Never eat out. For entertainment, go on long hikes and read books from the library. If Mars is your goal, you need to act like you're practically already there by living on the bare necessities.</p> <h2>Sell Your Story</h2> <p>If you can't afford to take the trip on your own, maybe there's someone who will pay you to tell the story of how you got to Mars. Maybe there's a book deal to be had, or a reality television show. Maybe you could start a blog and sell some ads on it. Why spend your own money when someone else can handle the expense?</p> <h2>Fund It on Kickstarter</h2> <p>It's highly doubtful many people will raise money online for your trip to Mars. But if you turn your trip into an unselfish venture, it might generate some donations, perhaps through a platform like Kickstarter or GoFundMe. For example, you might promise to perform certain kinds of scientific research, or raise awareness for a cause.</p> <h2>Get Sponsorships</h2> <p>Many people climb Mount Everest and do other big expeditions with the support of companies who like the exposure. Your trip to Mars may be highly publicized, so you can trade your potential visibility for cash to help pay for the trip. This might mean you have to travel in a spacesuit with GoDaddy or Red Bull on the back, but it will be worth it for a trip to the red planet.</p> <h2>Sell Mars Artifacts</h2> <p>People will pay big bucks for items from Mars. Rocks. Dirt. Jars of red dust. It can all be for sale if you can find a way to bring it back to Earth. Surely, there may be restrictions on what you can take from Mars, but if the Apollo astronauts brought back moon rocks, you could probably get away with snatching a Mars rock or two. Under this scenario, you'd probably need someone to front you the money and agree to be paid back later when you earn cash from your Mars artifacts.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-frugal-colonizers-guide-to-getting-to-mars&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars.jpg&amp;description=The%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/The%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars.jpg" alt="The Frugal Colonizer's Guide to Getting to Mars" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-frugal-colonizers-guide-to-getting-to-mars">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-wake-up-richer-tomorrow-than-you-are-today">12 Easy Ways to Wake Up Richer Tomorrow Than You Are Today</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Entertainment Travel commercial space flight investing Mars saving trips Mon, 31 Oct 2016 09:00:11 +0000 Tim Lemke 1822946 at http://www.wisebread.com Rich People Spend $350K+ to Park Their Cars — Here's How We'd Spend it Instead http://www.wisebread.com/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/fancy_sports_car_91447401.jpg" alt="Spend $350K on this instead of parking fancy cars" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I came across a news report recently about the construction of a <a href="http://money.cnn.com/2016/09/14/luxury/autohouse-car-condo-miami/index.html">luxury condominium for cars</a>. It will allow people with fancy cars to park their vehicles in a secure environment, at the reasonable cost of just $350,000.</p> <p>Yes, $350,000 for a place to park.</p> <p>Suffice it to say, we can think of smarter things to do with $350,000. If you are lucky enough to have this kind of cash available to you, consider these alternative and sensible ways to spend your money.</p> <h2>1. Bolster That Emergency Fund</h2> <p>Before you shell out thousands of dollars for that custom-made personal watercraft, ask yourself if you'd have enough cash left to pay for a major medical bill if you got hurt. Or a hot water heater if it leaked all over your basement. Ask yourself how long you could get by if you lost your job. It's bad to blow money on unnecessary things. It's even worse to blow that money when you have nothing saved for a rainy day. Make sure you have <em>at least</em> three months of living expenses in liquid savings before you make any crazy purchases.</p> <h2>2. Pay Off High-Interest Debt</h2> <p>If you have money, there's no real excuse for carrying high-interest debt, such as that from credit cards. Interest from debt can erode your net worth, so pay off as much as you can. Focus on paying down the debts with the highest interest rates and go from there.</p> <h2>3. Contribute Maximum Toward Retirement</h2> <p>If you have a high income, there's no reason to hold back on putting as much into your retirement funds as possible. Those with 401K accounts can contribute up to $18,000 per year, and anyone with earned income can contribute $5,500 annually into an individual retirement account. Both of these accounts allow you to invest and see your money grow in a tax advantaged way. Focus on investments that mirror the overall performance of the stock market, and you'll see your money grow without much stress. Maxing out retirement funds may very well be the least frivolous thing to do with your money.</p> <h2>4. Invest Even More</h2> <p>Okay, so you've maxed out the amount you can place in retirement accounts. That doesn't mean you can't continue to invest! If you have the funds, consider buying stocks, mutual funds, and exchange-traded funds in a traditional brokerage account. You will have to pay taxes on any gains, but if you're investing for the long haul, you'll still come out well ahead in most cases.</p> <h2>5. Go to College</h2> <p>The best kind of investment is an investment in yourself. If you have enough money to pay for college, go for it! A typical person with a bachelor's degree <a href="https://trends.collegeboard.org/education-pays/figures-tables/lifetime-earnings-education-level">earns 66% more</a> over the course of their lifetime than someone who does not got to college, according to the College Board. And the earnings get even higher for those with advanced degrees. If you've already been to college, consider opening a college savings account for your children or another relative who's college-bound. Most states offer 529 plans that allow you to invest money without paying tax on the gains, provided that the money is later used for education expenses.</p> <h2>6. Buy a Home (Or a Second One)</h2> <p>If you're sitting on a sizable sum of money, it might make sense to put some toward a down payment on a house or other piece of real estate. It's better than renting, because you're building equity and may be able to even sell the real estate later at a profit. If you already own a home, consider buying a second and renting it out. This way, you not only get the benefits of real estate ownership, but an additional income stream as well. This sure beats cars or other material items that don't accrue in value.</p> <h2>7. Do Some Home Maintenance and Upgrades</h2> <p>Maybe it's time for a new roof, or your furnace has been on the fritz. Maybe you've always wanted to turn the basement into a nice family room. If you invest a little money into your home, you can stave off expensive repairs later, and any upgrades you make could increase your home value.</p> <h2>8. Give Some Away</h2> <p>$350,000 is a fair chunk of change, so why not give some away to a cause that you support? Remember that all charitable donations are tax deductible, so there's a financial benefit to giving away cash rather than spending it on something silly.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">The Only 6 Rules of Frugal Living You Need to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting 401k charity debt emergency funds investing IRA luxury money retirement spending Thu, 13 Oct 2016 09:30:20 +0000 Tim Lemke 1811799 at http://www.wisebread.com 9 Threats to a Secure Retirement http://www.wisebread.com/9-threats-to-a-secure-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-threats-to-a-secure-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_holding_hands_88407163.jpg" alt="Couple learning threats to a secure retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving and investing for retirement isn't easy. There's a lot that can happen to take you off track, potentially leaving you less money than you hoped for.</p> <p>From poor financial planning to unexpected events and even nationwide economic woes, here are some of the things that could pose a threat to your secure retirement.</p> <h2>1. Not Investing Enough</h2> <p>It's never easy to figure out how much to invest. After all, you want to make sure you have enough money to deal with your current needs. It's common for people to invest too little, and this can hurt them in the long run.</p> <p>When saving for retirement, it's smart to contribute as close to the maximum each year into 401K and IRA plans. (That's $18,000 for the 401K and $5,500 for the IRA.) If you can't contribute quite that much, at least put enough in to get the company match on your 401K plan.</p> <p>Even a few extra dollars per month into retirement accounts can make a big difference. For example, let's say you have $50,000 in an account and contribute $500 per month for 25 years. Assuming a 7% return, your portfolio would amount to about $677,000. But what if you contributed $1,000 monthly? Then it would hit nearly $1.1 million.</p> <h2>2. Starting Too Late</h2> <p>When investing, time is your biggest friend. The more time you have to invest, the bigger your nest egg can grow. Thus, one of the biggest threats to a secure retirement is failing to contribute to your fund early in life. If you're past 40 years old, you may have only a couple of decades to invest before you wish to stop working, and that may not be long enough to amass the kind of wealth you'll need for a long and comfortable retirement.</p> <p>Let's say you invest $25,000 today and add $1,000 per month until you are 65. If you're currently 45 and get a 7% annual return, you'll have about $625,000 upon retirement. Not bad, but if you had started when you were 25, you'd have nearly $3 million.</p> <h2>3. Raiding Retirement Funds</h2> <p>Retirement accounts such as a 401K or IRA are designed to have money grow more or less untouched until you reach retirement age. You can withdraw money from them, but there's a cost.</p> <p>When you raid these retirement funds, you'll lose the money in penalties, but you'll also lose the potential earnings of the money you take out. Over time, this can cost an investor thousands of dollars.</p> <h2>4. Economic Growth</h2> <p>For decades following World War II, the annual growth rate of the American economy averaged more than 3%, with some years seeing double that. But in recent years, that annual rate has shrunk to barely 2%. In short, the American economy is not growing as fast as it once was, and that has implications for household income, corporate growth, and employment.</p> <h2>5. Possible Entitlement Cuts</h2> <p>Many lawmakers on Capitol Hill have been warning Americans of a looming crisis in entitlement funding. Observers of the federal budget note that unless there is serious reform, Social Security Trust Funds could be depleted within 20 years. This means that for the younger generation, there may not be as much left from the government upon retirement.</p> <p>It's important to note, however, that workers who want to live comfortably after they are done working should not be counting on Social Security to carry them through the end of their life. Someone who saves aggressively and invests wisely should be able to amass enough in a retirement fund to get by even if Social Security benefits are adjusted downward or even eliminated.</p> <h2>6. Declining Pensions</h2> <p>If you currently work for a company that offers a defined benefit plan, you are a rare breed. In recent years, companies have shifted from offering pensions to instead offering 401K plans, in which workers invest on their own. In most cases, they will also get a contribution from their employer, but that's not guaranteed. This doesn't necessarily mean you'll be destitute at retirement, but it does require employees to be much more engaged in their retirement planning.</p> <h2>7. Placing All Your Eggs in One Basket</h2> <p>Even if you are saving aggressively and investing every penny you can, it's possible to end up with less money than you need in retirement. It can happen when your portfolio is too heavily balanced toward a single investment. It's unwise to invest a high percentage of your savings in one company or even one industry or asset class, because one bad day could wipe out a large chunk of your savings. (Consider the plight of Enron employees who lost nearly everything had most of their savings in company stock.)</p> <p>To protect your retirement money, invest in a diverse mixture of stocks in various sizes and asset classes. Buy mutual funds instead of individual stocks, if at all possible.</p> <h2>8. Funding College Instead of Retirement</h2> <p>It's never a bad idea to save money to contribute to your children's education. There are several vehicles including 529 plans that allow you to invest money tax-free toward college. But many investors become so focused on saving for college that they fail to contribute enough to their own retirement fund.</p> <p>Remember that it's possible to <em>borrow </em>money for college, but you can't borrow money to fund your retirement if you find you're lacking in funds when you're done working. Ideally, you'll be able to amass enough money to fund college and your retirement comfortably. But if you have to make a choice, pay your future self first, then contribute to the college fund.</p> <h2>9. Being Poorly Insured</h2> <p>You may feel like nothing bad will ever happen to you. You are young and healthy. You're a safe driver and you live in a nice neighborhood. So you skimp on things like health, auto, and homeowner's insurance. You may think you're saving money, but you're at serious risk for big financial loss if you get seriously ill or have a serious accident.</p> <p>Being uninsured or underinsured can leave you struggling to make ends meet, placing retirement savings on the back burner. You may even have to raid your retirement accounts to pay the bills. It's wise to perform an insurance assessment to determine if you have the proper level of insurance to protect yourself financially.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-threats-to-a-secure-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-401k-in-2017-heres-whats-new-for-you">Your 401K in 2017: Here&#039;s What&#039;s New for You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-your-retirement-is-on-track">8 Signs Your Retirement Is on Track</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-online-brokerages-for-your-ira">5 Best Online Brokerages for Your IRA</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do">If You&#039;re Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement college Economy education funds income insurance investing late start pensions risk stocks threats Fri, 07 Oct 2016 09:00:06 +0000 Tim Lemke 1807026 at http://www.wisebread.com How Much Are Pricey Home Upgrades Really Worth? http://www.wisebread.com/how-much-are-pricey-home-upgrades-really-worth <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-much-are-pricey-home-upgrades-really-worth" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/modern_house_ocean_93000781.jpg" alt="Learning how much pricey home upgrades are worth" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;Real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth,&quot; writes Robert Kiyosaki author of <a href="http://www.amazon.com/gp/product/1612680011/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1612680011&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=NPDRUSEI6ILRUE7S">Rich Dad, Poor Dad</a>. (See also: <a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read">The 8 Classic Personal Finance Books You Must Read</a>)</p> <p>But like with any other type of investment, you need to know what you're doing, or you'll end up eating your shirt. For example, you may think that some high-end projects, such as adding a deck that offers a majestic view or doing an upscale bathroom remodel, may provide you a great return on your real estate investment. However, the evidence from the <a href="http://www.remodeling.hw.net/cost-vs-value/2016/trends">2016 Remodeling Cost vs. Value report from the National Association of Realtors</a> (NAR) shows the contrary.</p> <p>By taking a look at the project costs in 102 U.S. real estate markets, the NAR report provides a comprehensive review of what features provide you the best bang for your real estate buck. Let's round up a handful of &quot;features&quot; that can really boost the cost of a home, but may not actually deliver a lot of value. And we'll look at the projects you should take on, instead.</p> <h2>1. Bathroom Addition</h2> <p>The idea of having an extra bathroom so that your family members don't have to sit around for others to get ready for the day may sound like a great idea. But adding a full 6-by-8-foot midrange bathroom to your home only recoups just <a href="http://www.remodeling.hw.net/cost-vs-value/bathroom-addition?y=2016">under 60%</a> of your total cost, on average. In 2016, the national average cost for a midrange bathroom addition was $42,333, but offers only $23,727 in actual value &mdash; in other words, a net loss. Even worse, the NAR reported that only one out of the 102 U.S. markets provided a 100% return on this project on that year.</p> <p>Going &quot;upscale&quot; on a bathroom addition doesn't fare well either. In 2016, the national average resale value for an upscale bathroom addition was only 0.5% better than that for a midrange bathroom addition.</p> <p><strong>What to Do Instead:</strong> Keep it simple and midrange. A bathroom remodel provides a better resale value than an addition. A midrange bathroom addition and a midrange bathroom remodel recoup 56.2% and 65.7%, respectively. Doing an upscale bathroom remodel only improves the resale value by 1% over the one offered by an upscale bathroom addition. Also, the cost advantage of midrange bathroom remodel ($24,000) over an addition allows you to pay back any financing more quickly.</p> <h2>2. Composite Deck Addition</h2> <p>Enjoying a hot cup of coffee by a bonfire during the fall, or reading an intriguing novel while getting a tan during the summer out on your deck sounds like it's worth every penny. But, the financial math doesn't add up.</p> <p>Adding a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers would run you a national average between <a href="http://www.remodeling.hw.net/cost-vs-value/2016/west-south-central/">$16,798 to $37,943</a>, depending on the scope of your project. The resale value of a composite deck addition would only recoup $10,819 to $21,877, according to national averages.</p> <p><strong>What to Do Instead: </strong>If you really want to have that deck, go with wood instead of composite. Adding a midrange deck made out of wood provides a resale value over 10% higher than that of composite.</p> <h2>3. Backup Power Generator</h2> <p>We all want to be prepared for disaster, but the addition of backup power generator runs at $12,712, according to national averages. Worse, this project only recouped an average of <a href="http://www.remodeling.hw.net/cost-vs-value/backup-power-generator?y=2016">59.4%</a> of its cost in 2016.</p> <p><strong>What to Do Instead: </strong>Forget about backing up your power and focus on replacing your entry door. Replacing the entry door to your home is a good idea because it can improve the security and ability to withstand the elements (and zombies!) from your home. Additionally, the right door can enhance the look of your home. While the in 2016, the cost of a midrange entry door replacement recouped <a href="http://www.remodeling.hw.net/cost-vs-value/entry-door-replacement-steel?y=2016">91.1%</a> of its cost, in past years this project has recouped up to 128.9% of its cost! In the 2015 edition of the NAR report, entry door replacement received the top rank nationally in terms of cost recouped (<a href="http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2015/01/2015-remodeling-cost-vs-value-less-more">101.8%</a>). That year' survey revealed that a new steel door was the least expensive project and provided the best payback out of all projects across the nation.</p> <p>Additionally, eligible ENERGY STAR doors can qualify you for up<a href="http://www.energystar.gov/products/building_products/residential_windows_doors_and_skylights/tax_credit"> to $500 in energy efficiency tax credits</a>.</p> <h2>The Bottom Line: The Simpler the Project, the Bigger the Return</h2> <p>Currently in its tenth year, the <a href="http://www.remodeling.hw.net/cost-vs-value/2016/trends">2016 NAR report</a> indicates that &quot;the simpler and lower-cost the project, the bigger its cost-value ratio.&quot;</p> <p>In 2016, four out of the top five projects that ranked best for cost recouped had a total cost under $5,000. These costs estimates were made assuming that you hired a professional contractor to complete the projects. Regardless of your budget, you'd be better off tackling two or more affordable projects that recoup at least 90% of their value, than just one high-end one with a recoup value under 60%. If you have great DIY handyman or negotiation skills, you could improve your investment return even further. (See also: <a href="http://www.wisebread.com/4-times-you-should-splurge-and-hire-a-pro">4 Times You Should Splurge and Hire a Pro</a>)</p> <p>As you can see from these sample projects, replacements cost less than alternative home renovation projects, such as a kitchen or bathroom renovation, and provide the best bang for your buck. Another home renovation project that can be completed within three days and that provides a high return on investment is garage door replacement. In 2016, a midrange garage door replacement would recoup about 91.5% of its cost.</p> <p><em>How are you improving the market value of your property?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/how-much-are-pricey-home-upgrades-really-worth">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-paying-off-your-mortgage-early-costing-you-money">Is Paying Off Your Mortgage Early Costing You Money?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-investing-is-cheaper-and-easier-than-you-think">Real Estate Investing Is Cheaper and Easier Than You Think</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-time-to-purchase-like-its-1999">It&#039;s Time to Purchase Like It&#039;s 1999</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/watch-7-diy-fails-that-will-inspire-you-to-call-an-expert">WATCH: 7 DIY Fails That Will Inspire You to Call an Expert</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-appraisals-ten-things-most-people-just-dont-understand-about-them">Real Estate Appraisals - Ten things most people just don&#039;t understand about them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing DIY home renovation Home repair investing real estate Mon, 03 Oct 2016 10:30:06 +0000 Damian Davila 1802138 at http://www.wisebread.com 6 Ways Meditation Can Make You a Money Master http://www.wisebread.com/6-ways-meditation-can-make-you-a-money-master <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-meditation-can-make-you-a-money-master" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_meditate_work_67249941.jpg" alt="Woman becoming money master through meditation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Could you save and earn more money simply by learning to be calmer and more mindful?</p> <p>Regular meditation is known to have a variety of potential health benefits. But it could play a big role in boosting your finances, due to its emphasis on self-control, patience, and minimalism.</p> <p>If you're looking to get your financial house in order, consider taking up a regular meditation practice and see if it helps. Here are some ways it might make a difference.</p> <h2>1. You'll Learn to Wait Things Out When Investing</h2> <p>When investing for retirement, it's best to take a very long-term approach. This means not concerning yourself with the everyday movements of the markets, and remaining patient even during volatile times. Meditation can help you focus on your goals, rather than make investment decisions based on emotion or a single, nonrecurring event.</p> <h2>2. You'll Be Mindful About Spending</h2> <p>How many times have you put something in the grocery cart without checking the price or even thinking about whether you truly need the item? When you practice mindfulness, you'll take the time to consider each act, and will be able to stop yourself before making an unnecessary purchase.</p> <p>Meditation could also make you less vulnerable to marketing. Rick Heller, an author who leads weekly meditations at Harvard, writes that, &quot;Unless we learn to be mindful, we'll be <a href="http://thehumanist.com/magazine/july-august-2011/features/slowing-down-the-consumer-treadmill">at the mercy of advertisers</a> who crank up the consumer treadmill to run faster and faster.&quot;</p> <h2>3. You'll Learn to Live With Less</h2> <p>One of the key goals of meditation is to free yourself from attachment to material goods. When you practice mindfulness, you are living &quot;in the moment&quot; rather than concerning yourself with wants or needs. There are many people who use mindfulness and meditation as part of their &quot;minimalist&quot; approach to living with few material possessions. Writers Joshua Fields Millburn and Ryan Nicodemus, who call themselves &quot;The Minimalists,&quot; argue that &quot;we tend to give too much meaning to our things, often forsaking our health, our relationships, our passions, our personal growth, and our desire to contribute beyond ourselves.&quot;</p> <h2>4. You'll Be Less Impulsive</h2> <p>Perhaps you once booked a trip to the Bahamas on the spot because of an overwhelming urge to get away. Or maybe you bought a new car from the first dealer you met simply because you got tired of taking your old car in for repairs. Meditation can help you learn to think through your decision making, rather than acting on impulse. And that, in turn, can save you money by staving off unnecessary on-the-fly purchases.</p> <h2>5. You Won't Shop or Eat to Reduce Stress</h2> <p>For many of us, spending money can be a stress reliever. We like the rush of endorphins when we find a new electronic gizmo, vintage comic book, or pair of shoes. We treat ourselves to a dinner out because we've had a tough week. Through meditation, we can train ourselves to find deeper joy through other means and become less dependent on these small &mdash; and short-lived &mdash; rushes of pleasure.</p> <h2>6. You Won't Panic When Things Go Wrong</h2> <p>There will be times when your finances will take a hit for one reason or another. Maybe you're facing a job loss, or a big medical bill. Perhaps your car broke down and is in need of expensive repairs. When events like these happen, it's always important to avoid making the problem worse.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-ways-meditation-can-make-you-a-money-master">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-types-of-friends-who-are-costing-you-money">10 Types of Friends Who Are Costing You Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-youre-doing-these-5-things-your-saving-efforts-are-for-nothing">If You&#039;re Doing These 5 Things, Your Saving Efforts Are for Nothing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-tricks-to-master-for-a-happier-life">Financial Tricks to Master for a Happier Life</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-spend-til-the-end">Book review: Spend &#039;til The End</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle impulse buys investing living with less meditation mindfulness saving spending stress Mon, 26 Sep 2016 09:00:07 +0000 Tim Lemke 1798864 at http://www.wisebread.com Here's What Your Vote Says About Your Money Style http://www.wisebread.com/heres-what-your-vote-says-about-your-money-style <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-your-vote-says-about-your-money-style" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/kid_vote_patriotic_78663835.jpg" alt="Learning what your vote says about your money style" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Does your philosophy toward money influence your politics? Do you support or oppose certain candidates based on your own spending or investing style?</p> <p>There are plenty of stereotypes out there, but also a good amount of evidence suggesting that the way we vote is a reflection of our approach to money. The studies sampled below vary in size and quality, so take them with a grain of salt, to be sure &mdash; but here's what they tell us about your vote and your money.</p> <h2>1. Conservatives Save, Liberals Spend</h2> <p>This is a generalization, but it does appear to be backed up by some data. A 2014 Gallup poll revealed that 64% of self-identified conservatives prefer saving money over spending it, compared to 54% for self-identified liberals. And this difference in attitude appears to exist even among young people, though there is growing evidence that Millennials learned to become more frugal after the Great Recession.</p> <h2>2. Democrats Have More Credit Cards, But Use Them More Wisely</h2> <p>A survey from Credit Sesame last year revealed that people in Democratic (or &quot;Blue&quot;) states have more credit cards and higher credit limits than those in Republican-leaning states. Republican states, on the other hand, use fewer cards and have less debt overall, but had 34% more people who have gone over their credit limit.</p> <h2>3. Beliefs Guide Investing</h2> <p>If you have strong feelings on certain social or political issues, it may impact how you shop and how you invest. A conservative voter might not want to invest in movie studios that make violent films, or have sexual content. An anti-gun voter would avoid a mutual fund that invests in Smith and Wesson. Environmentally conscious investors will research a company's record on sustainability or pollution before becoming shareholders.</p> <p>These days, there are hundreds of socially conscious mutual funds that exclude companies for a reasons ranging from their sale of tobacco or alcohol, their use or production of nuclear power, their role in the defense industry, or their labor practices.</p> <h2>4. If Your Candidate's Winning, You're More Optimistic</h2> <p>If the candidate you support is in the lead, then you feel good about the future. And an optimistic person is more likely to invest their money, under the assumption that the economy and stock market will do well. Research shows this is true whether you're a Democrat or a Republican. A study titled, <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1509168"><em>Political Climate, Optimism, and Investment Decisions</em></a> showed that Democrats were more optimistic about the economy after 1992 and 1996, but that trend reversed in 2000, when a Republican took office.</p> <h2>5. You Should Vote the Way You Should Invest &mdash; With Your Eyes on the Horizon</h2> <p>Accumulating wealth requires patience and time and a willingness to look at the big picture. The best investors take a long view with their money, rather than buy and sell on a whim. And it's possible to vote with a similar mindset. When voting, do you wonder which candidate is best equipped to plan for the nation's long-term health? Voters taking the long view might be attracted to candidates who talk about things like infrastructure investment, the cost of entitlements, or future changes in technology or demographics.</p> <p><em>Do any of these money and politics links ring true for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/heres-what-your-vote-says-about-your-money-style">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-wake-up-richer-tomorrow-than-you-are-today">12 Easy Ways to Wake Up Richer Tomorrow Than You Are Today</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Clinton conservative democrats finances investing liberal republicans saving trump voting Fri, 09 Sep 2016 09:00:14 +0000 Tim Lemke 1788931 at http://www.wisebread.com It's the 21st Century — Why Is Your Money Stuck in the 20th? http://www.wisebread.com/its-the-21st-century-why-is-your-money-stuck-in-the-20th <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/its-the-21st-century-why-is-your-money-stuck-in-the-20th" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_friends_piggy_bank_74667997.jpg" alt="Woman learning why her money is stuck in the 20th century" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you read financial advice these days, you could be forgiven for checking the date to see if you'd wandered back into the 1990s (or 1970s).</p> <p>What was good advice for the 20th century? Go to the best college you can, get a good job, live frugally, save and invest, buy a house, and max out your retirement savings.</p> <p>But all that generic financial advice of the 20th century isn't necessarily the surest route to success anymore. Millennials figured this out a while ago. That's why so many aren't bothering with college, why so many are living at home with their parents, and why so many are getting by with casual jobs &mdash; or no jobs.</p> <h2>Smart Moves for the 21st Century</h2> <p>So, what's the right financial advice for the 21st century? Well, Millennials' instincts aren't wrong. But these are hard waters to navigate purely on instinct. Here's what I'd do.</p> <h3>It's Not &quot;Don't Go to College&quot;</h3> <p>Rather, it's &quot;Don't <em>go into debt</em> to go to college.&quot;</p> <p>Even that is a bit extreme, because there are career paths &mdash; engineering, technology &mdash; where you can earn enough to pay off student loans. It would probably be even better to say, &quot;Keep your student loans small, relative to your prospects of paying the money back.&quot;</p> <p>In particular, don't pay up to attend a mid-tier college. In the 20th century there was real ROI in going to the best college you could get into. In the 21st century, I think that's only true at the top. If you can't get into (or afford!) one of the absolute top colleges, there's no reason to pay extra to attend a second-tier college. The cost-benefit ratio shifts strongly in your favor if you do a couple of years at community college and then finish your degree at a good state school. Of course if your family is rich or you can get excellent scholarships, there's no reason not to go to a second-tier college &mdash; just not if you have to borrow extra to do it.</p> <p>Even if you can get into a top-tier college, consider whether its cost is justified. Will your degree ensure a job upon graduation, or result in better-compensated roles than you might otherwise have access to? Will it make entry into a graduate program of your choice easier? Will it materially benefit your intended life path in some way?</p> <h3>It's Not &quot;Live at Home With Your Parents&quot;</h3> <p>Rather, it's &quot;Live a lifestyle you can really afford, <em>even if that means</em> living at home with your parents.&quot;</p> <p>Do not go into debt to support your lifestyle! In fact, you'll be way ahead of the game if you can start accumulating <a href="http://www.wisebread.com/on-the-importance-of-having-capital">a little capital</a>. Even just a <a href="http://www.wisebread.com/figuring-the-size-of-your-emergency-fund">small emergency fund</a> can make your life enormously better.</p> <p>Other sorts of debt may not be as bad as student loan debt (which can't be discharged even in bankruptcy, and which lenders will give you even if your planned course of study gives you no hope of ever paying it off), but that doesn't mean the other sorts are okay.</p> <h3>It's Not &quot;Work Casual Jobs&quot;</h3> <p>Rather, it's &quot;Find a way to support your low-cost lifestyle, <em>even if all you can get</em> are casual jobs.&quot;</p> <p>There are all kinds of ways to make money. There are good jobs, there are crappy jobs, there are <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job">side gigs</a> of all sorts. The key is to fund your lifestyle (plus a little extra).</p> <p>In today's economy there are times and places where crappy jobs are all you can get. That's unfortunate.</p> <p>Also unfortunate is that so many people writing about &quot;kids these days&quot; don't see that <em>these two items are paired</em>. Millennials are (very wisely) matching lifestyle choices with income opportunities, while journalists (and even financial advisers) are pretending that these two things are independent of one another.</p> <h3>All the Other Generic Financial Advice</h3> <p>Investing used to be easy.</p> <p>From around 1980 through the end of the 20th century, just about any mix of cash, bonds, and stocks purchased through low-cost index funds would yield several percentage points above inflation, letting anybody be an investing super-genius.</p> <p>Housing prices didn't go up in a straight line through the whole period, but between the tax advantages of homeownership and the leverage of mortgages with a low down payment, as long as you didn't pay too much, anybody could have both a home <em>and </em>a valuable capital asset.</p> <p>Because none of this stuff is true any more, investing is now really hard.</p> <p>The return on cash has for years been so close to zero as to be not worth worrying about. Bonds, stocks, and real estate are all up so much since the crash that they're probably a lousy place to invest new money.</p> <p>None of which is to say that you shouldn't be frugal and accumulate some savings, but doing so will not be the path to wealth this century that it was last century.</p> <p>That means that we need to look someplace besides the 20th century for financial advice. And for that, I have an idea.</p> <h2>Look to Earlier Centuries</h2> <p>The 20th century was genuinely different. For about two generations &mdash; the generation that fought World War II and the Baby Boomers &mdash; we had a unique set of circumstances that made it possible to work for a paycheck and eventually, before you got too old to work, get rich.</p> <p>Until then, for all of human history, there were only two paths to wealth: You could inherit wealth, or you could achieve wealth through some sort of risk-taking endeavor (entrepreneurship, speculation, etc.).</p> <p>Those unique circumstances no longer apply, and because of that, the best place to look for strategies for the future is to look at the strategies that worked before the 20th century. The 17th, 18th, and 19th centuries will provide fertile ground. Things that worked then are going to work <em>better </em>going forward than reflexively copying what worked in the 20th century.</p> <p>Perhaps financial professionals can be forgiven for not having figured this out &mdash; the whole financial industry is a product of the 20th century.</p> <p>I have a book of financial advice from 1883 called <a href="https://www.amazon.com/Worth-Wealth-Collection-Miscellanies-Merchants-ebook/dp/B0071IGXEG">Worth and Wealth</a> by T.L. Haines. It's a fascinating book. Much of it reads exactly like personal finance advice from today (minus any high-tech stuff like automating your bill paying) &mdash; getting an education, finding a job, living frugally, and so on &mdash; except that it has nothing about what we would consider investing. There's nothing about stocks or bonds. Instead, there's <em>investing</em> the way it was done in prior centuries.</p> <h3>Buy Productive Land</h3> <p>Land was the basis of <em>all</em> wealth right up until the 19th century. In the old days it would have been land with crops or pasture, but rental property counts too. Of course, both running a farm and being a landlord are more like a second job than like passive investing. Speaking of which...</p> <h3>Invest in a Business</h3> <p>That is, invest in <em>your own</em> business.</p> <p>The sorts of paper investments &mdash; stocks and bonds &mdash; that did so well in the 20th century are not going to go away, and no doubt a lot of people will make a lot of money in the market. But I don't think we'll see a continuation of the days in which a simple diversified portfolio of stocks and bonds provided a safe, high return.</p> <p>Of course, running a small business is more like a full-time job than like passive investing. And that's my point. The right response now to any the article on investing for &quot;passive income&quot; is to shake your head and say, &quot;That's so last century.&quot;</p> <h3>Organize Like a Family</h3> <p>The idea of an individual person as the fundamental economic unit is an idea of the late 20th century. Before that the fundamental economic unit was the <em>family</em>.</p> <p>There are all kinds of advantages to organizing your economic life around a family with <a href="http://www.wisebread.com/strategies-for-households-with-more-than-one-adult">more than one adult</a>. It meshes especially well with the ideas I've already mentioned. Family members may work outside the family to bring in wages or a salary, but if there's family land or a family business, family members who lose their jobs can work them until they find a new job. That way the family still has some income and the family member has productive work to do.</p> <p>One mental model for this might be the big farm families of the 19th century, but I suggest that you think bigger. Model your home economy after the aristocratic families of the 18th century. Everyone can contribute. The most able can be given scope to vastly increase the family's wealth, while the young and the old and those who simply lack that spark can still contribute to (and share in) the family's success.</p> <p>If organizing like a family doesn't work for you, consider organizing like a tribe. It's probably an even better metaphor.</p> <h2>The Way Things Are Going to Be</h2> <p>In all these areas, I think that the Millennials' instincts have been pretty good, except that I think they've bought in on the 20th-century idea that the economic unit is the individual.</p> <p>That's understandable. It's an appealing model, one that gives maximum freedom with minimal responsibility &mdash; you're only responsible for yourself.</p> <p>Because of this, I worry that many of them, even those who are making the right moves on a piecemeal basis, have not figured out that the 21st century is going to look a lot more like the 19th and prior centuries than like the 20th.</p> <p>The choices that they make &mdash; in particular, the choice to live at home with their parents &mdash; show them instinctively moving in the right direction, but until they can correct their mental model, they're missing out on some useful perspective that history can provide.</p> <p>Look into how families organized their home economy before the 20th century. There's a lot of practical wisdom there.</p> <p><em>Where is your money &mdash; in the 20th century or the 21st?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/its-the-21st-century-why-is-your-money-stuck-in-the-20th">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-millennials-have-changed-money-so-far">6 Ways Millennials Have Changed Money (So Far)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing Money?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/not-rich-enough-and-not-poor-enough">Not Rich Enough and Not Poor Enough</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-money-lessons-we-could-all-learn-from-dwayne-the-rock-johnson">6 Money Lessons We Could All Learn From Dwayne &quot;The Rock&quot; Johnson</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle 20th century 21st century advice baby boomers business education family investing millennials property investing Mon, 05 Sep 2016 10:00:10 +0000 Philip Brewer 1785277 at http://www.wisebread.com 9 Ways Siri Can Be Your Personal Finance Assistant http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-siri-can-be-your-personal-finance-assistant" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_phone_city_64632093.jpg" alt="Man finding ways Siri can be his personal finance assistant" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We're still a few years away from having personal robot assistants, but voice-activated applications on most modern smartphones are already making our lives easier. Apps like Apple's Siri or Microsoft's Cortana can be helpful in a number of ways, and are particularly useful as personal finance helpers.</p> <p>I personally use Siri a lot to help me <a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self" target="_blank">stay on track with my finances</a>, and I am always surprised at how much the app can help me get information without the need to even type or search the web myself.</p> <p>Siri won't make you rich, but it can help you be smarter about your finances without a lot of work. Check out these personal finance tasks that Siri and similar apps can help you with.</p> <h2>1. Check Stocks</h2> <p>It's easy to use Siri to track the performance of your investments or the overall stock market. Just say, &quot;I need the stock price for Apple,&quot; and Siri will tell you the price and the daily movement. It's also an easy way to check on the ticker symbol.</p> <h2>2. Helping You Calculate the Best Bargain</h2> <p>Quick, what's a better deal? Three 20-ounce cans of juice for $6, or four 24-ounce cans for $9? To find out, you'll need to calculate prices on a per-ounce basis. Asking Siri to perform some simple math will help you learn that the second deal is a little bit better.</p> <h2>3. Driving Directions</h2> <p>Yes, accurate driving directions can help you with your finances. That's because you can plan trips to ensure the shortest route, thus saving you gas. You can also find routes to avoid tolls and bad traffic.</p> <h2>4. Finding the Nearest ATM</h2> <p>You need cash right away, but you'd rather not go to the first ATM you see, because it may not be tied to your bank. To avoid a fee, you can ask Siri to find you the nearest branch of your bank or a surcharge-free ATM.</p> <h2>5. Research Food Ingredients</h2> <p>When you're at the grocery store, you may come across products that like to tout certain ingredients, and you sometimes pay a premium for them. (&quot;Sweetened with agave nectar!&quot;) Before you buy, you may want to do a little bit of research on what these ingredients are and whether they are worth paying extra for. Siri and similar apps can help you with this.</p> <h2>6. Set Reminders</h2> <p>You never want to be late paying your bills, and you don't want to be charged for missing things like doctor's appointments. You can use Siri to remind you of important things. All you need to do is tell Siri what you want to be reminded about, and when. (&quot;Remind me to finish this article for Wise Bread at 10 p.m.&quot;) There's even location-based reminders, like &quot;Remember to mail the mortgage check when you are near the post office.&quot; You can also use Siri to adjust or create to-do lists on your phone.</p> <h2>7. Figure Out Tips</h2> <p>What's 18% of $43.95? And how can you split that four ways? Siri can help you. Siri will even know local taxes, to help you calculate checks before they even come.</p> <h2>8. Find Out How Much Things Cost</h2> <p>Using Siri, you can look up pricing information for a wide range of products. If you simply ask &quot;Find me prices for a Toyota Corolla,&quot; it will provide you MSRP and invoice prices, plus other related charges, and even shows a chart with historical price information. It's still not easy to do true comparison shopping, but you'll learn enough to know if a particular store is trying to rip you off.</p> <h2>9. Find Budgeting Apps</h2> <p>If you need some extra personal finance help from your smartphone, Siri can help you find it. A simple query like, &quot;Find me some budgeting apps,&quot; will give you a list of saving and money management apps from the app store.</p> <p><em>How do you use Siri or Cortana or Google Now to help you stay on top of your finances?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-the-chromebook-crush-windows">Could the Chromebook Crush Windows?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-tools-and-gadgets-your-smartphone-can-replace">7 Tools and Gadgets Your Smartphone Can Replace</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Technology apple Cortana Google investing Microsoft saving Siri smartphone tools Fri, 26 Aug 2016 10:30:15 +0000 Tim Lemke 1778728 at http://www.wisebread.com 12 Money Moves to Make the Moment You Decide to Retire http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-money-moves-to-make-the-moment-you-decide-to-retire" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_happy_86773289.jpg" alt="Couple making money moves the moment they retire" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You deserve a big pat on the back, a rousing rendition of <em>He's a Jolly Good Fellow</em>, and a fat slice of cake when you decide to retire. You should enjoy it, too, because it's not necessarily all perfect bliss from that day forward. Rather, you have to devise a plan to keep yourself fed, clothed, housed, and healthy until the day you die, and that prospect is perhaps more daunting than the 45 years of solid work you put in.</p> <p>To help you along the way without having to breathe into a brown paper bag for the rest of your life, here are a few suggestions on what to do with your money when you set a date to punch your final card.</p> <h2>1. Establish Your Income Goals and Needs</h2> <p>Money matters rarely work without a plan in place, and that's exactly what you'll need when you retire. In anticipation of this major life milestone and transition, you'll need to take a hard and honest look at your finances to see where you're at currently, and figure out where you want and need to be. That might mean cutting the proverbial fat from your current budget, or it might mean contributing to your savings at a higher, more rapid rate. Whatever the case, changes will need to be made to set yourself on the right track. Financial expert Steve Anzuoni, of Fairway Financial, details a few practical steps to achieve this.</p> <p>&quot;First establish your income goals and needs, and then list all your expenses and liabilities; then you need to make sure that your monthly recurring expenses are covered by guaranteed income, not potential income,&quot; he says. &quot;Once that is taken care of, it's then a matter of allocating monies to different 'buckets' to account for inflation, future income needs, emergencies, and fun/vacation money.&quot;</p> <p>That last piece of the puzzle is important. Retirees often plan based on their current needs in the current economy. To stay ahead of the curve, it's a good idea to think ahead and plan for those what-if scenarios that pop up from time to time and can, in a worst-case situation, decimate your finances. Inflation and emergencies in particular can bleed you dry if you're not prepared, and now's the time for that consideration.</p> <h2>2. Eliminate Your Consumer Debt</h2> <p>You want to be as financially prepared as possible when retiring, and that means freeing yourself from the grips of consumer debt. The last thing you want to worry about when you settle into retirement are credit card payments, so concentrate now on eliminating them altogether. If you have the extra cash on hand, pay them off. If not, look into ways to reduce the required monthly payments to make them more manageable with the goal of being payment-free by the time you say so long to your coworkers and colleagues. We cover a million and one ways to help <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off your debt</a> here at Wise Bread.</p> <h2>3. Manipulate Your Mortgage</h2> <p>Along with your consumer debt, you should try to pay off your mortgage &mdash; if you can swing it. This feat may not be feasible if you've recently purchased a home, but if you've lived at the same residence for the past 20 years or more, you might be able to meet this goal. Otherwise, find ways to reduce the mortgage to make it fit better into your new, tighter budget.</p> <p>&quot;Owning your home not only means a lot less money going out every month, it means a lot less worry should things get tight,&quot; says financial adviser Scott Hanson of Hanson McClain Advisors. &quot;Conversely, if you are unable to pay off your mortgage before you retire &mdash; even if you have as little as five to seven years remaining on the note &mdash; you might consider working with your lender to lower your interest rate and extend your loan out 15, 20, or even 30 years. Simply put, not only is cash-flow king, but why spend what are likely to be the healthiest years (of your retirement) struggling to pay down a mortgage at the expense of maintaining your pre-retirement standard of living? Money not going out is the same as money coming in.&quot;</p> <h2>4. Downsize Your Living Situation to Cut Costs</h2> <p>If you have more space than you realistically need, it's time to downsize. You can (hopefully) take the money from the sale of your home and purchase a new place that better suits your lifestyle, perhaps even in cash if you've tended well to your existing mortgage over the years and you're savvy about your new purchase.</p> <p>Financial planner Charlie Reading, author of the book <em>The Dream Retirement: How to Secure Your Money and Retire Happy</em>, agrees.</p> <p>&quot;If you have a house where the mortgage is paid off, an easy way to boost your retirement income is to move to a smaller or a cheaper house,&quot; he says. &quot;Releasing this equity and moving into a smaller home can provide you with valuable funds that you can use to generate an income. You also have the option of equity release here, however financially downsizing is likely to be a more astute choice if that is practical.&quot;</p> <h2>5. Relocate to a More Affordable Area</h2> <p>Along with downsizing your home, take some time to think about where you want to live and the associated cost of living in that area. If you live in an expensive area now, maybe it's a more sensible to move someplace where you'll get more bang for your limited bucks. Of course, you'll need to be happy wherever you move, so along with the financial factors you'll also want to consider your quality of life. Are there things to do to keep you occupied and social? Is transportation nearby? Is it relatively easy for family and friends to visit? Will you get fast and easy medical attention when you need it? These are all important questions to answer when contemplating a move to a new area.</p> <h2>6. Invest in a Rental Property to Earn Additional Income</h2> <p>I'm an investor in rental properties, and I wholly plan to use those properties to bring in additional income for savings and retirement for as long as the properties make money &mdash; and sense. If going this route is a legitimate option for you, I highly recommend it. Just beware of the hidden costs. If you manage the property yourself, like I do, all the income is yours (but don't forget to set aside a decent stash for taxes). If you require assistance, however, like from a management company, you could be looking at fees between 30% and 50% of your net income. There are more affordable options, like through the Evolve Vacation Rental Network, which charges the lowest fees in the industry at just 10%.</p> <p>Consider this anecdote: Jim and Laurel Whillock <a href="http://evolvevacationrental.hs-sites.com/case-study-kona?__hstc=235270366.eb7f97e450deb1291f24fe4d5e0ac9ed.1460397740307.1466114738612.1466171762596.19&amp;__hssc=235270366.1.1466171762596&amp;__hsfp=877489778">invested in a vacation property</a> on the Big Island of Hawaii as a way to earn income in retirement. They purchased a one-bedroom condo on the beach and hired a property manager, who charged a 43% fee, to help with the logistics and operation. During the first six months, the condo was occupied 35% of the time, earning the couple only $6,500. After switching to Evolve, in a 12-month period, the couple booked 260 nights generating rental income of $48,199, an increase of 242%.</p> <p>In any case, what I'm saying is, do your research before thrusting yourself into the rental-income market; there are other management options out there. The goal is to make money, not lose it &mdash; especially when finances are tighter during retirement.</p> <h2>7. Phase Your Retirement Over an Extended Period</h2> <p>Not ready to go all in for retirement? That's perfectly okay. There's no &quot;right&quot; way to retire, and if you need more time to ease into the transition, by all means take it.</p> <p>&quot;Go down to three days a week and enjoy the benefit of not taking your pension as early, and the growth that comes with it,&quot; Reading suggests. &quot;This doesn't have to be your current job &mdash; why not start working in a role you have a passion for, even if it doesn't pay you quite as much as your current one does? Who knows, maybe this will become your new purpose, and you won't ever want to stop.&quot;</p> <h2>8. Develop a Strategy for Medical Insurance</h2> <p>We're starting to enter into territory that nobody likes talking about, especially those nearing or at retirement age. But ensuring that you have proper medical coverage while also getting all your other end-of-life ducks in a row isn't something you can put aside or overlook. This is reality, however harsh it seems, and these items must be addressed &mdash; the earlier, the better.</p> <p>&quot;Because medical insurance can be very expensive, it may actually prevent you from being able to retire,&quot; Hanson warns. I strongly suggest you check into your options before retiring. If you can't afford to purchase medical insurance, you may be forced to find another job until you can apply for Medicare at age 65.&quot;</p> <h2>9. Re-evaluate Your Other Insurances for Optimal Protection</h2> <p>While you're assessing your medical insurance situation, it's a good idea to check in with your other insurance plans to make sure you have the kind of coverage you need at this stage, but also to see where you may be able to cut costs &mdash; though the latter should never affect your quality of life. Don't reduce coverage you'll need down the road just to save a few bucks in early retirement. To make the right decisions, you may want to enlist the help of an insurance adviser.</p> <p>&quot;[Insurance advisers] can advise on ways to adjust your insurance profile &mdash; around both your home and auto policies,&quot; says insurance expert Angi Orbann. &quot;They may be able to find cost savings and they will help you ensure that you are adequately protected as you move into the next phase of your life. An insurance adviser may not be the first person you think of when it comes to your money and retirement, so it's an important tip to remember.&quot;</p> <h2>10. Create a Last Will and Testament</h2> <p>Fact: 41% of Boomer Americans don't have a will, according to USA Today &mdash; and if you're among them, it can spell big trouble for your estate when you pass.</p> <p>Licensed funeral director Kelli Hoodman explains.</p> <p>&quot;Creating a will tells loved ones how one's property should be distributed after one passes away,&quot; she says. &quot;Depending on how complex one's estate is, one may want to contact an attorney or simply create a will online. Without a will, one's finances and property are distributed by the state, and they may not land in the hands the deceased would've wanted them to be in.&quot;</p> <p>Don't overlook the funeral planning, either. Your last will and testament isn't just about who gets what. It's also as much about where you'll go when you pass. You should have the final say in that while you're alive and kickin'.</p> <p>&quot;Expressing final wishes for funeral planning in a will is important, but it should not be the only place they are documented,&quot; Hoodman adds. &quot;Funeral planning is best done with a local funeral home or cremation society. Otherwise it may take time for a will to be found, and one's final wishes might not adhered to.&quot;</p> <h2>11. Preplan Your Funeral Services</h2> <p>It probably won't be your best day ever, but preplanning your funeral is not only therapeutic, says Hoodman, but it's also fiscally intelligent.</p> <p>Funeral costs rise each year, and a traditional funeral and burial today can cost over $10,000. Cremation, which has recently become America's preferred method of disposition, is far less expensive at only a couple thousand dollars, depending on which services are selected.</p> <p>&quot;No matter which choice one makes, inflation and other factors raise the price of cremation, burials, and funerals over time,&quot; Hoodman says. &quot;Companies like Neptune Society offer preplanning services that allow retirees to create a legal document that states one's wishes for memorials, cremation, and other matters concerning death care planning. Over the many decades a retiree may live, preplanning now could save them hundreds or thousands of dollars.&quot;</p> <h2>12. Designate a Power of Attorney</h2> <p>Lastly, if you want to be in control of your life &mdash; and afterlife &mdash; choose someone close to you whom you trust implicitly as your Power of Attorney.</p> <p>A Power of Attorney (POA or attorney-in-fact) makes decisions for a person when that person can no longer make decisions for themselves. For example, if a senior is diagnosed with Alzheimer's, an attorney-in-fact would be legally permitted to make financial and medical decisions in that senior's stead.</p> <p>&quot;Choosing someone trustworthy is crucial for this role,&quot; says Hoodman. &quot;A retiree should ensure that their POA knows their preferences on medical dilemmas, like whether or not to use life support, and their financial information to ensure their money is spent properly.&quot;</p> <p>You don't like being taken advantage of while you're alive, so it's important to ensure that you won't be taken advantage of in death, either.</p> <p><em>Have you made any money moves to prepare for retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-now-that-youll-regret-when-you-retire">5 Financial Moves Now That You&#039;ll Regret When You Retire</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">5 Financial Moves You Should Make Five Years Before Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-of-the-fastest-ways-to-go-broke-in-retirement">4 of the Fastest Ways to Go Broke in Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-strengthen-your-finances-before-retirement">5 Ways to Strengthen Your Finances Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement aging debt downsizing estate planning goals investing medical care money moves mortgages relocating rental properties Tue, 09 Aug 2016 10:00:14 +0000 Mikey Rox 1768664 at http://www.wisebread.com 7 Best Money Management Tips From John Oliver http://www.wisebread.com/7-best-money-management-tips-from-john-oliver <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-best-money-management-tips-from-john-oliver" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/john_oliver_12450865504_98a7a40631_z.jpg" alt="Learning money lessons from John Oliver" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I don't often admit to it, but I have a little crush on comedian and <em>Last Week Tonight</em> host, John Oliver. I mean, what's not to like? There's his adorable British accent, his hilarious takes on the modern world, his dimples, his sound money advice&hellip;</p> <p>No, really. John Oliver is actually a pretty solid source for financial tips. Over the past few years, he has cemented his place in my heart by using his comedic platform to educate his audience on everything from credit scores to debt management and retirement savings</p> <p>If you haven't had a chance to watch all of John Oliver's money-related episodes, here are my favorite financial funnyman's seven best money management tips:</p> <h2>1. Before Taking a Payday Loan, Be Absolutely Sure There Are NO Other Options</h2> <p><iframe src="https://www.youtube.com/embed/PDylgzybWAw" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>As seen on:&nbsp;<a href="https://www.youtube.com/watch?annotation_id=annotation_959988635&amp;feature=iv&amp;src_vid=aRrDsbUdY_k&amp;v=PDylgzybWAw" target="_blank">Last Week Tonight: Predatory Lending</a></p> <p>Wise Bread readers are likely very well aware of the predatory nature of payday loans. Taking a short-term loan can kick off a terrible cycle of debt with annual interest rates as high as 700%. But, as John Oliver points out in his rant, a Pew survey found that &quot;a majority of borrowers say payday loans take advantage of them, [but] a majority also say they provide relief.&quot;</p> <p>The point is that there will be times when people need money in a hurry and feel that their choices are limited. However, most borrowers have more choices than they think they do. Prospective payday loan customers could always borrow from a family member or friend, pawn or sell an item, or even sell blood or plasma. In other words, it's a better idea to do almost <em>anything </em>else to generate some quick cash than visit a payday loan store. (Although some of the ideas suggested by Sarah Silverman, the official spokesperson for <em>doing anything else</em>, are clearly meant to be tongue-in-cheek.)</p> <p>Many payday loan borrowers end up turning to these anything else options in order to get out of the cycle of payday loan debt, so it would be better to just start there.</p> <h2>2. Start Saving for Retirement Now &mdash; And Build a Time Machine and Start Saving 10 Years Ago If Possible</h2> <p><iframe src="https://www.youtube.com/embed/gvZSpET11ZY" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>As seen on:&nbsp;<a href="https://www.youtube.com/watch?time_continue=1249&amp;v=gvZSpET11ZY" target="_blank">Last Week Tonight: Retirement Plans</a></p> <p>We all need to be saving more money for retirement, and the earlier you start, the more time compound interest has to work its magic. According to a 2014 study from the Center for Retirement Research at Boston College, a 25-year-old would only need to set aside <a href="http://crr.bc.edu/wp-content/uploads/2014/07/IB_14-111.pdf">15% of her income</a> each year to adequately replace her income as of retirement at age 62 &mdash; but if she started at age 35 she would need to save 24%, and 44% if she waited until age 45.</p> <p>While I have no issue with encouraging people to save more (really &mdash; save more!), I do have a quibble with the slight whiff of shame clinging to the build-a-time-machine portion of this advice. We can't change our past financial behavior, but we can feel bad about it and let it affect our present behavior &mdash; which too many people tend to do. There's no point in offering coulda-shoulda-woulda advice when time machine technology is still a couple of thousand decades away from reality.</p> <p>However, the basis of this advice is more than sound. Don't waste your money on Elf School in Reykjavik. Put it in your retirement account where it can do you some real good.</p> <h2>3. Check Your Credit Report Every Year</h2> <p><iframe src="https://www.youtube.com/embed/aRrDsbUdY_k" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>As seen on:&nbsp;<a href="https://www.youtube.com/watch?v=aRrDsbUdY_k" target="_blank">Last Week Tonight: Credit Reports</a></p> <p>Your credit history can affect everything from whether you qualify to make large purchases, to your ability to land a job or rent an apartment. Unfortunately, credit reports are not always accurate, even if you have been a boy scout when it comes to your responsible credit usage.</p> <p>As John Oliver reports, the credit reporting bureaus make major mistakes in one out of every 20 credit histories. That may be a 95% accuracy rate, but it does leave 10 million consumers to deal with critical mistakes on their credit reports.</p> <p>The only thing we can do to fight mistakes (and identity theft, which <em>Last Week Tonight</em> did not even get into) is to regularly check our credit reports. We are legally allowed free access to a credit report from each of the major reporting agencies &mdash; TransUnion, Experian, and Equifax &mdash; once per year. You can access that information at annualcreditreport.com.</p> <p>If you're particularly organized, you can keep an eye on your credit on a rolling basis by checking one of the three agencies every four months.</p> <h2>4. Invest in Low Cost Index Funds</h2> <p>As seen on: <a href="https://www.youtube.com/watch?v=gvZSpET11ZY" target="_blank">Last Week Tonight: Retirement Plans</a></p> <p>Seeing this particular piece of advice had me standing up and cheering in front of my laptop. The financial industry likes to tout the superiority of actively managed funds since there is an individual making decisions for your investments &mdash; which has got to be better than doing nothing.</p> <p>Except the active managers who are tinkering with investments have a couple of big detractions. First, they are human, which means they are subject to emotional reactions to market volatility. It is very hard to stick to a plan when ego, panic, or greed is driving the train. According to research by Nobel laureate William Sharpe, you would have to be correct about timing the market (that is consistently buying low and selling high) 82% of the time in order to match the returns you will get with a buy-and-hold strategy. To put that in perspective, Warren Buffett aims for accurate market timing about 2/3 of the time.</p> <p>In addition to the difficulty of market timing, an actively managed fund will have higher transaction costs because of all the active buying and selling (each of which generates a fee) going on. Even if you have the world's most accurate active manager, a great deal of your returns will be eaten up by your transaction costs.</p> <p>Low cost index funds, on other hand, keep their costs low by having fewer managers to pay, and they tend to outperform actively managed funds because they are simply set to mimic a certain index. The majority of consumers will not beat low cost index funds for satisfactory retirement investment growth.</p> <h2>5. If You Have a Financial Adviser, Ask if They're a Fiduciary</h2> <p>As seen on: <a href="https://www.youtube.com/watch?v=gvZSpET11ZY" target="_blank">Last Week Tonight: Retirement Plans</a></p> <p>A financial adviser is a fiduciary if he or she is legally required to put your economic interests ahead of their own. This is an important distinction because the terms financial adviser, financial planner, financial analyst, financial consultant, wealth manager, and investment consultant are unregulated &mdash; which means someone introducing himself by any of these titles might not have the expertise to back it up.</p> <p>But even if your financial adviser does have the credentials necessary to help you manage your money, she might be paid via commission, which could mean she recommends products to you that help her bottom line more than your retirement.</p> <p>Since a fiduciary is legally obligated to put your interests above their own, you are more likely to get objective advice from them.</p> <p>While John Oliver recommends running the other direction if you find that your financial adviser is not a fiduciary, that may not be necessary as long as you understand how your adviser is paid and you are willing to commit to due diligence in double-checking your adviser's recommendations.</p> <h2>6. Gradually Shift From Stocks to Bonds As You Get Older</h2> <p><iframe src="https://www.youtube.com/embed/gvZSpET11ZY" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p> <p>As seen on <a href="https://www.youtube.com/watch?v=gvZSpET11ZY">Last Week Tonight: Retirement Plans</a></p> <p>This advice is part of target-date retirement planning. The thinking behind it is that you need to be invested in riskier (and therefore higher-earning) investments like stocks when you are young, because you have the time to ride out the volatility and reap the returns. But as you age, you need to be sure your principal is protected, which means gradually shifting more of your investments into bonds, which are more stable but have lower returns.</p> <p>This is pretty good general advice, and I love the show's take on when to remind yourself to shift more to bonds &mdash; whenever a new James Bond actor is chosen. (I'm team Gillian Anderson!)</p> <p>The only nuance I would like to add to this piece of advice is to remind investors that retirement does not mark the end of your investing days &mdash; and you should not be entirely invested in bonds by then. Theoretically, you still have 25 to 40 years ahead of you as of the day you retire, and you will still need to be partially invested in aggressive assets like stocks in order to make sure your money keeps growing.</p> <h2>7. Keep Your Fees, Like Your Milk, Under 1%</h2> <p>As seen on <a href="https://www.youtube.com/watch?v=gvZSpET11ZY" target="_blank">Last Week Tonight: Retirement Plans</a></p> <p>Except for the fact that skim milk is a watery horror I would not wish on my worst enemy's morning Wheaties, this is probably my favorite of John Oliver's money tips.</p> <p>Fees on your investments work a lot like interest &mdash; in that they compound quickly. <em>Last Week Tonight</em> showed a clip from the 2013 PBS documentary The<a href="http://www.pbs.org/wgbh/frontline/film/retirement-gamble/"> Retirement Gamble</a>, which illustrated how compounding interest would eat up 2/3 of your investment growth over 50 years, assuming a 7% annual return and a 2% annual fee.</p> <p>The only way to combat such termite-like destruction of your investment growth is to keep your fees low &mdash; under 1%. And the lower you can get your fees under 1%, the better you are. As John Oliver's segment points out, &quot;Even 1/10 of 1% can really [bleep] you.&quot;</p> <h2>Money With a Side of Funny</h2> <p>The majority of financial information is not exactly fun to read through. That's why it's so important for a satirist and comedian to take on these vitally important issues and make them entertaining. I'm thankful that John Oliver has decided to make money one of the issues he illuminates for his audience.</p> <p><em>Are you a regular watcher of Last Week Tonight? What valuable advice have you gleaned?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. 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