real estate http://www.wisebread.com/taxonomy/term/3449/all en-US 7 Last-Minute Ways to Cut Your 2016 Tax Bill http://www.wisebread.com/7-last-minute-ways-to-cut-your-2016-tax-bill <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-last-minute-ways-to-cut-your-2016-tax-bill" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tax_time_clock_170171888.jpg" alt="Finding last-minute ways to cut your tax bill" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Before you know it another tax season will be upon us. Do your wallet a favor and score all the deductions you can with these last-minute ways to reduce your bill in 2016.</p> <h2>1. Investment Account Balancing</h2> <p>Year-end investment account balancing is a no-brainer. If you have a taxable investment account, you should review your transactions for the year to see if you're in a net capital gain situation. If you are &mdash; says Jacob Dayan, co-founder of tax-relief service Community Tax &mdash; find some losing positions that will offset the gains and liquidate them by the last business day of December.</p> <p>&quot;If you wish to remain invested in these assets long-term, you can buy them back after 30 days,&quot; he adds. &quot;Note that this strategy also works in reverse, with one difference. If you sell a net-gain position, you don't have to wait 30 days to buy it back. In either case, if you have positions involving multiple purchases over time, identify the specific assets you want to liquidate by purchase transaction to give you the greatest tax benefit.&quot;</p> <h2>2. Charitable Donations</h2> <p>'Tis the season to give unto others &mdash; if only for the tax breaks. You have until the end of the year to make charitable donations that will count toward your 2016 contributions for tax purposes.</p> <p>&quot;All charitable donations made to qualifying organizations before December 31 will count toward your 2016 deduction, as long as you itemize your deductions,&quot; says Pennsylvania-based certified public accountant William Ray. &quot;Deductions are generally limited to 50% of your adjusted gross income, although additional restrictions may apply for those in higher income brackets. You may also deduct the current fair market value &mdash; not your original cost &mdash; of noncash contributions made to qualifying organizations. Certain noncash contributions may require additional support or an appraisal, so you should review <a href="https://www.irs.gov/pub/irs-pdf/p526.pdf">IRS Publication 526</a> before claiming noncash contributions.&quot;</p> <p>It's also important to track your volunteer time.</p> <p>Ray adds, &quot;Although you cannot make a deduction for your time, you may claim a deduction for any mileage driven using your personal vehicle ($0.14 per mile) and any out of pocket expenses that are not reimbursed. As is the case with any deduction, documentation and support should always be maintained for all contributions.&quot;</p> <p>Financial planner Andy Yadro details another option for end-of-year giving.</p> <p>&quot;Consider contributing to a donor-advised fund,&quot; he suggests. &quot;You get an immediate tax benefit and your money can be invested with potential to grow. This is a great last minute option for someone who wants to make a donation, but hasn't decided which charity it should go to.&quot;</p> <h2>3. Max Out Retirement Contributions</h2> <p>Were you fortunate enough to get a holiday bonus? Use it to top of your tax-deferred retirement accounts such as an IRA. Even better, kick in a few extra dollars from your regular paycheck. You'll boost your savings while reducing your taxable income. However, be aware of the contribution limits for both types of retirement account.</p> <p>&quot;If you or your spouse are not covered by a retirement plan through your employer, you're both eligible to contribute up to $5,500 each to an IRA ($6,500 if you are over age 50),&quot; Ray says. &quot;You may be eligible to make a contribution, even if you are covered by a retirement plan through your employer, depending on your income.&quot;</p> <p>You also have until April 15, 2017, to make this contribution and still have it count toward your 2016 taxes. However, it's highly recommended that you do not file your tax return until you make the contribution. If you claim the deduction but cannot pay, you'll need to file an amended tax return by April 15, 2017, or pay penalties and interest.</p> <h2>4. Pay Your State or Local Income Tax Bill Early</h2> <p>If you itemize deductions, you can claim a deduction for state income taxes paid during the calendar year. This includes any amounts paid for your 2015 tax liability that were paid in calendar year 2016.</p> <p>&quot;If you consistently owe taxes on your state or local tax returns, paying them early can result in immediate federal tax savings,&quot; Ray explains. &quot;States and localities allow you to make estimated tax payments or prepayments at any time during the year. If you make a payment before December 31, 2016, that payment can be deducted on your 2016 federal tax return. But be careful of overpaying. If you overpay and receive a state or local income tax refund, you will need to claim that as income on your 2017 federal tax return.&quot;</p> <h2>5. Make January's Mortgage Payment in December</h2> <p>One of the joys of homeownership is taking advantage of the various tax breaks the government provides. The biggest of these is the mortgage interest deduction. If you can spare the extra cash, consider making your January 2017 mortgage payment before the end of the year. You'll be able to deduct the mortgage interest on your 2016 tax form. Don't get greedy here, though. Tax law generally prohibits taking annual deductions on &quot;prepaid interest,&quot; so you won't be able to pay February's mortgage bill and claim that for 2016, too. For more on the tax advantages of homeownership, see the <a href="http://www.taxpolicycenter.org/briefing-book/what-are-tax-benefits-homeownership">Tax Policy Center's analysis</a>. (See also: <a href="http://www.wisebread.com/4-tax-deductions-new-homeowners-shouldnt-skip?ref=seealso">4 Tax Deductions New Home Owners Shouldn't Skip</a>)</p> <h2>6. Review Your Health Coverage</h2> <p>If you're covered by a high-deductible health plan, you may qualify for a Health Savings Account (HSA) and contribute $3,350 ($6,750 for a family) to the plan &mdash; all of it tax-deductible.</p> <p>&quot;Many employers now offer high-deductible health plans, meaning employees often have to pay thousands toward a deductible before their health coverage kicks in,&quot; Ray says.</p> <p>To offset this cost, you may qualify for an HSA.</p> <p>&quot;An HSA is basically a 'retirement account for health care' and is becoming more common each year,&quot; Ray continues. &quot;The HSA allows you to contribute to an investment account that can grow tax free over time, while receiving a deduction on your tax return. You even receive a deduction if you don't itemize. The account can then be used to cover qualifying medical costs. Unlike a Flexible Spending Account (FSA), an HSA is 'your money' and can grow over time, rather than being forfeited at the end of the year.&quot;</p> <p>Check with your employer to see if your plan qualifies for an HSA. (See also: <a href="http://www.wisebread.com/11-surprising-things-your-hsa-will-cover?ref=seealso">11 Surprising Things Your HSA Will Cover</a>)</p> <h2>7. Prepay Real Estate Tax</h2> <p>If you foresee a changing income situation, supplement next year's loss with a right-now gain. Yadro suggests prepaying your real estate taxes and taking the deduction now.</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/7-last-minute-ways-to-cut-your-2016-tax-bill">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/can-i-write-it-off-as-charity">Can I Write It Off as Charity?</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/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</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/charitable-giving-get-a-receipt">Charitable giving - get a receipt</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/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</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-moves-you-should-make-now-for-your-2018-taxes">6 Moves You Should Make Now for Your 2018 Taxes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes charitable deductions charity HSA income tax investments last minute deductions mortgages real estate retirement contributions tax bill tax deductions Mon, 26 Dec 2016 10:30:23 +0000 Mikey Rox 1860478 at http://www.wisebread.com 35 Bizarre Things You Can Be Taxed On http://www.wisebread.com/35-bizarre-things-you-can-be-taxed-on <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/35-bizarre-things-you-can-be-taxed-on" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-516281044.jpg" alt="you can be taxed on these bizarre things" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Once the Yuletide log burns out and the New Year's ball drops, it's soon time for a less-joyful annual tradition: Calculating how much money you owe the Internal Revenue Service.</p> <p>We all know that Uncle Sam takes a share of our earnings, but have you considered other events in the past year that you may owe taxes on? You might be surprised at all the ways Uncle Sam can lighten your wallet.</p> <p><em>Note: I'm not an accountant. Consult a tax professional for advice on your personal situation.</em></p> <h2>1. You Caught a Baseball</h2> <p>You are the lucky fan who catches a historic home run ball from the outfield bleachers. The not-so-lucky part? The IRS could hold you responsible for the <a href="http://www.wsj.com/articles/SB118532191532076935" target="_blank">resale value of the ball</a> as soon as it hits your glove &mdash; even if you weren't planning to sell it.</p> <h2>2. You Found a Pot of Gold</h2> <p>You finally found the cache at the end of the rainbow. Or maybe you found a stash of rare baseball cards hidden in the wall of your home during a remodel, or a treasure chest while scuba diving in a shipwreck. Under the same regulation that applies to the baseball, the <a href="https://www.irs.gov/publications/p17/ch12.html" target="_blank">treasure trove rule</a>, that windfall is taxable to you the first year that you find it. Sadly, this means that you may be forced to sell all or part of your find even if you wanted to keep it.</p> <h2>3. You Held Up a Liquor Store</h2> <p>It doesn't matter if you got it illegally: Stolen money or property should be reported, lest a tax evasion charge be added to your legal woes when you get caught. Says the IRS, &quot;If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.&quot;</p> <h2>4. You Accepted Hush Money</h2> <p>The IRS is blunt on this one: &quot;If you receive a bribe, include it in your income.&quot;</p> <h2>5. You Dealt in Illegal Goods</h2> <p>If you made money dealing drugs or by any other illegal form of self employment, the IRS requires you to <a href="https://www.irs.gov/publications/p17/ch12.html" target="_blank">report it on Schedule C</a>.</p> <h2>6. You Hit the Jackpot</h2> <p>Yes, you have to pay taxes on your lottery prize. Yes, if you have been buying lottery tickets all year, you can also deduct the expenses. But you have to keep a <a href="https://www.irs.gov/publications/p17/ch28.html#en_US_2015_publink1000174141" target="_blank">diary of wins and losses</a>, and the IRS has specific instructions on how to do that.</p> <h2>7. You Stuck the Landing and Won Gold</h2> <p>It's estimated that Michael Phelps <a href="http://www.usatoday.com/story/money/personalfinance/2016/08/15/olympics-victory-tax-gold-medal/88587636/" target="_blank">will owe $55,000</a> to the IRS on his Rio winnings &mdash; the medals and the cash prizes that come with each are taxable. Many other Rio champions will get off scot free, however. That's because Congress recently passed a law to exempt Olympians from &quot;victory taxes&quot; &mdash; but only for athletes who earn a million dollars a year or less. Phelps earned an estimated $12 million in endorsements alone in 2016, so he doesn't get that break.</p> <h2>8. You Got a McArthur Genius Grant</h2> <p>It would feel great to win this $625,000 no-strings stipend, or the approximately $1 million that comes with the Nobel Prize. That good feeling won't protect you from the tax bite, though. You're required to pay taxes on all such awards &mdash; unless you have them <a href="https://www.irs.gov/publications/p17/ch12.html" target="_blank">directly transferred to a recognized charity</a>. That's what President Obama did with his 2009 Nobel Peace Prize winnings.</p> <h2>9. You Are Gifted</h2> <p>Usually, the presents you unwrap over the holidays come to you tax-free, but there are some exceptions. Cash or a gift card from your boss is taxable as a fringe benefit. A hostess gift you receive as a thank-you for having a sales party in your home is <a href="https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Taxable-Income-vs--Nontaxable-Income--What-You-Should-Know/INF26326.html" target="_blank">taxed as miscellaneous income</a>. <a href="http://blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/" target="_blank">Personal gifts</a>, though, are generally safe from the tax man.</p> <h2>10. You Airbnb'd Your Pad</h2> <p>Just like regular rent payments, money you earn by hosting Airbnb guests is counted as <a href="http://assets.airbnb.com/eyguidance/us.pdf" target="_blank">part of your gross income</a>. The exception: You don't have to pay if you live in the home and rent it out for <a href="https://turbotax.intuit.com/tax-tools/tax-tips/Self-Employment-Taxes/10-Tax-Tips-for-Airbnb--HomeAway---VRBO-Vacation-Rentals/INF29184.html" target="_blank">two weeks or less per year</a>.</p> <h2>11. You Got Your Social Security Check</h2> <p>It may seem nonsensical that the government pays people and then <a href="https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/social-security-income/regular-disability-benefits/regular-disability-benefits" target="_blank">collects tax money</a> on those payments, but that's how it goes. However, SSI, or disability benefits, are not taxable.</p> <h2>12. You Divorced Well</h2> <p>Alimony you receive from your ex is <a href="https://www.irs.gov/publications/p17/ch18.html" target="_blank">taxable income</a>, but child support payments are not. For this reason, it's important to know how payments are categorized in your divorce settlement.</p> <h2>13. You Won a Scholarship</h2> <p>If you win a grant that covers your tuition and books, that's tax-free. But if it pays for <a href="https://www.irs.gov/publications/p970/ch01.html#en_US_2015_publink1000178003" target="_blank">room and board or travel</a>, pay up.</p> <h2>14. Your Fantasy Football Team Won the Super Bowl</h2> <p>If you win at least $600 worth of cash and prizes from a business operating a <a href="http://newsroom.hrblock.com/tax-tip-it-may-be-fantasy-football-but-tax-implications-are-real" target="_blank">fantasy sports league</a>, they'll file a 1099-MISC with the IRS. But even if you win less or your league is informal, you are still supposed to pay on your winnings.</p> <h2>15. Triple 7s Came Up</h2> <p>Just like with the lottery, the IRS gets a cut of your casino winnings once they surpass the amount you document losing. Usually it's a <a href="http://www.efile.com/taxable-gambling-winnings-income-taxes/" target="_blank">flat 25%</a>.</p> <h2>16. You Spun the Wheel of Fortune</h2> <p>It's simple enough to pay the tax if you win a cash prize, but if you win a car or vacation, you still owe tax on its value &mdash; which can be tough to pay if you didn't <em>also</em> win cash. Because of this, it's often wise to take the cash equivalent of a prize if offered.</p> <h2>17. Your Debt Was Forgiven</h2> <p>The IRS is very specific about this: If a debt is cancelled as a gift to you &mdash; for example, if Grandpa says, &quot;Merry Christmas, you no longer owe me for that time I bailed you out!&quot; &mdash; you <a href="https://www.irs.gov/publications/p17/ch12.html" target="_blank">don't have to pay taxes</a>. Otherwise, you <em>do</em>.</p> <h2>18. You Traded a Haircut for Cigarettes</h2> <p>This may surprise you, but if you receive goods or services in exchange for services you render, the IRS expects you to <a href="https://www.irs.gov/taxtopics/tc420.html" target="_blank">include the value of those</a> in your gross taxable income.</p> <h2>19. The Boss Lets You Take the Ice Cream Truck Camping</h2> <p>If you drive your company car to work and home, or use it on weekends, this is a <a href="http://smallbusiness.chron.com/irs-taxable-fringe-benefits-company-car-15565.html" target="_blank">taxable fringe benefit</a> and you should be tracking and reporting your personal miles.</p> <h2>20. Your Bitcoins Doubled in Value</h2> <p>Bitcoin is a virtual currency that is represented by computer code, but it can be used to buy real goods and services. So of course, the IRS considers gains in this or <a href="http://www.forbes.com/sites/laurashin/2015/12/16/bitcoin-at-tax-time-what-you-need-to-know-about-trading-tipping-mining-and-more/#20c59ae46692" target="_blank">any other virtual currency taxable</a>. It's considered a capital asset like stocks and bonds, so if you buy Bitcoins low and sell them high, the difference is your profit. But it can be even more complicated than that: If you create new Bitcoins by mining, you have to count those as income, too.</p> <h2>21. You Got a Blogger Freebie</h2> <p>If a widget maker sends you their SuperWidget 2000 to review and you get to keep it, you just received a taxable payment. However, you don't owe taxes on the market value of the product &mdash; just what the company agrees it's worth. Make sure to put an agreed-upon value in your contract.</p> <h2>22. You Sold Stuff on eBay</h2> <p>If you occasionally sell your kids' outgrown clothes on eBay, you won't owe taxes because you most likely took a loss on the items. But if you create a resale business on eBay, you better believe you have to <a href="http://smallbusiness.chron.com/claim-ebay-sales-taxes-59661.html" target="_blank">report your profits</a>.</p> <h2>23. You Had a Yard Sale</h2> <p>Like eBay, most yard sale transactions are <a href="http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2009/05/are-garage-sale-proceeds-taxable.html" target="_blank">not income producers</a>, but if you're one of those people who holds a sale every weekend and resells stuff at a profit, do the right thing.</p> <h2>24. You're a Child Entrepreneur</h2> <p>Starting a small business, whether it's dog walking or selling handmade items, can be a great activity for a tween or teen. But don't expect them to be IRS-exempt just because they're kids. If the <a href="http://www.marketwatch.com/story/does-uncle-sam-tax-lemonade-stands-2013-07-08" target="_blank">business earns more than $400</a>, file a tax return.</p> <h2>25. You Set Up a GoFundMe Campaign</h2> <p>This is one of those tricky gray areas. If you start a crowdfunding benefit for someone in need, the donations should be considered personal gifts. But if the gifts run into the large numbers, the crowdfunding site may file a 1099, reporting the transaction to the IRS. A word to the wise: If you are setting up a crowdfunding campaign for a needy friend, <a href="http://www.huffingtonpost.com/steve-rhode/crowdfunding-to-help-a-sick-friend-can-lead-to-a-big-tax-bill-for-you_b_6615616.html" target="_blank">make sure it's in their name</a> so you don't end up wondering if you need to pay taxes on money you handed over to them. And consult an accountant before going down this route.</p> <h2>26. You Asked for Spare Change</h2> <p>There are differing opinions out there over whether quarters dropped in a panhandler's cup are considered earned income or a gift. Since panhandlers tend to live below the poverty line, they probably wouldn't owe any income taxes, either way. A more pressing issue for many would be whether the panhandling counts as earned income, qualifying recipients for the earned income tax credit, which could lead to a cash payment from the IRS even if the panhandler pays no taxes.</p> <h2>27. You Received Punitive Damages</h2> <p>Court settlements vary in their tax treatment. If you get a settlement in court to compensate you for a physical injury or emotional distress stemming from an injury, the money isn't taxable. But if you get paid for emotional distress not tied to an injury, or you receive punitive damages, <a href="https://www.irs.gov/pub/irs-pdf/p4345.pdf" target="_blank">you have to pay</a>.</p> <h2>28. You Cashed in Your Life Insurance Policy</h2> <p>If you die, your beneficiaries probably won't be taxed on your life insurance payout. But if you cash it in while you're alive? Any <a href="https://www.ameriprise.com/research-market-insights/tax-center/tax-planning/taxation-of-life-insurance/" target="_blank">profit you made on the policy</a> &mdash; that is, the value in excess of premiums paid &mdash; is taxable.</p> <h2>29. Your Champion Pug Had a Litter</h2> <p>Whether you breed your dog as a business or a hobby, money made <a href="http://www.akc.org/content/dog-breeding/articles/tax-tips-for-dog-breeders/" target="_blank">selling puppies is taxable income</a>. However, it's also not cheap to breed and raise puppies, so once you deduct stud fees and all those vet bills, you may not actually show a taxable profit for your prize pups.</p> <h2>30. You Put on the Red Light</h2> <p>Just like dealing drugs, if you sell your body in a jurisdiction where that's illegal, you still have to <a href="http://www.slate.com/articles/news_and_politics/explainer/2009/09/how_do_prostitutes_pay_their_taxes.html" target="_blank">report the income on Schedule C</a>. In fact, smart high-earning prostitutes declare their income to put themselves into the position to buy a house or get credit.</p> <h2>31. You Couldn't Get Out of Jury Duty</h2> <p>If you got $15 for sitting on a jury, that's taxable income, even if you turn it over to your employer. However, if you did turn it over to your employer, you also put in a <a href="https://apps.irs.gov/app/vita/content/17/17_08_005.jsp" target="_blank">deduction for the same amount</a> on your tax form so your gross income will remain the same.</p> <h2>32. You Got a Tax Refund</h2> <p>Last year's state and federal refunds are <a href="https://www.taxslayer.com/support/knowledgebasearticle324.aspx" target="_blank">taxable in some situations</a>.</p> <h2>33. You Exercised Stock Options</h2> <p>This is one that has gotten a lot of tech workers into financial hot water. If your company gives you stock options, that's not a taxable event. But when you exercise the option by purchasing stock in your employer at a discount, <a href="http://www.investopedia.com/articles/optioninvestor/07/esoabout.asp" target="_blank">that is a taxable event</a> even if you don't sell the stock right away. This can go bad if the stock declines in value after you exercise the option, because now you may owe the IRS more money than you can raise by selling the stock.</p> <h2>34. Your Landlord Is Paying You to Get Out</h2> <p>In rent-controlled areas with high demand, such as San Francisco, it's common for landlords to buy tenants out. This is often referred to as a relocation assistance. This is taxable, but whether to treat it as regular income or a capital gain is dicey, so you may need professional help with that one.</p> <h2>35. You Are an Undocumented Worker</h2> <p>Despite a common belief that undocumented immigrants don't contribute to society with tax dollars, anyone working in the U.S. is legally required to pay taxes, papers or not. And they do pay. Studies show about half of people working illegally are paying income tax, resulting in about <a href="http://www.usnews.com/news/articles/2016-03-01/study-undocumented-immigrants-pay-billions-in-taxes" target="_blank">$12 billion per year</a> in state and local revenue.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/35-bizarre-things-you-can-be-taxed-on">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/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</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/what-freelancers-and-side-giggers-need-to-know-about-income-taxes">What Freelancers and Side Giggers Need to Know About Income Taxes</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-signs-you-probably-need-an-accountant">5 Signs You Probably Need an Accountant</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/clear-out-that-clutter-15-places-to-sell-your-stuff">Clear Out That Clutter: 15 Places to Sell Your Stuff</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/my-16-favorite-ways-to-get-rid-of-clutter">My 16 Favorite Ways to Get Rid of Clutter</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes bizarre taxes eBay entrepreneurs gambling illegal income taxes IRS prizes real estate selling sports winnings Mon, 19 Dec 2016 10:00:08 +0000 Carrie Kirby 1855930 at http://www.wisebread.com 8 Money-Smart Things I Wish I'd Asked Santa For http://www.wisebread.com/8-money-smart-things-i-wish-id-asked-santa-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-smart-things-i-wish-id-asked-santa-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/santa_good_list_-499122032.jpg" alt="Asking Santa for items on Christmas list" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I spent a couple of decades asking Santa Claus for toys, clothes, and gadgets galore, but I don't have a single thing to show for it &mdash; I mean, besides a basement full of outdated stuff. Instead, I should've begged Ol' Saint Nick for these eight things that would have paid for themselves over and over again &mdash; so I could afford an even bigger basement full of outdated stuff. Take a look:</p> <h2>1. An Impenetrable Credit Score</h2> <p>When I turned 18 and the friendly lady at Discover Card called to ask if I'd like my very own credit card, I enthusiastically said yes. I generally consider that my very first adult mistake. Not that credit cards are bad, but they're the devil in the hands of a financially irresponsible college freshman. Because not only did I max the card out in less than six months, I was unaware that not paying the bill for five years thereafter would result in a disaster of a credit score when I entered the &quot;real world.&quot; If only Santa could have done me a solid by fortifying my credit score &mdash; against myself.</p> <h2>2. Everything Gold</h2> <p>In 2006, I asked Santa Claus for things like seat covers for my vehicle and a new digital camera because that's what materialistic 25-year-olds in major credit card debt ask for. Instead, I should've asked for straight-up gold bars. Heck, I would've been happy with a few flakes &mdash; like this guy who got away with <a href="http://www.nytimes.com/2016/12/04/nyregion/the-one-that-waddled-away-retracing-a-weighty-gold-theft.html">86 pounds of jeweler's &quot;bench sweeps&quot;</a> worth $1.6 million. Because 10 years ago, on Dec. 11, gold was valued at $625.81 per troy ounce. Flash forward a decade and the price has nearly doubled to between $1,100 and $1,200, depending on the day, and that's really just midrange. On Sept. 12, 2011, gold hit its 10-year high of $1,861.49 per troy ounce, which &mdash; if you were feeling lucky that day &mdash; raked in three times its original amount if you unloaded a few bricks.</p> <h2>3. EE Savings Bonds</h2> <p>Hardly anybody gives savings bonds as gifts anymore (well, except maybe your grandma) because what fun is a certificate that you have to hold on to for, like, ever to reap its benefits? But just because they're not as popular as they once were doesn't mean they're not still valuable &mdash; if you got in on them in the 1980s and '90s, that is. EE bonds issued in the 1980s had rates of return of 6% to 9% a year, compared to today's 0.1% annual fixed rate. Mathematically, if you have a $500 bond from June 1983, for instance, it reached full maturity in June 2013, with a value of $1,014.40. Santa, can you hear me?</p> <h2>4. Real Estate in Depressed Markets</h2> <p>Throughout my years living in major cities like Baltimore and NYC, I've heard legendary tales of beautiful row houses and brownstones in economically and socially depressed areas, like Federal Hill in Baltimore and Harlem in New York City, that sold for crazy-low prices like $1. The $1 price is probably a myth, but dilapidated properties have in fact gone for very affordable prices with agreements that buyers reside in their neighborhoods for a specified period of time. I personally know a few people who purchased homes in blighted areas for around $30,000 20 years ago and are now sitting pretty on $2+ million lots.</p> <h2>5. College Tuition</h2> <p>All I needed was a cool $100K, Santa. I would've paid my college tuition and room and board outright so I didn't have to make up for half that amount myself over the next 20 years after graduating. Alas, I'm halfway there, and I've paid two of three notes off, but if you could cut a check for the rest this year, I'd appreciate it.</p> <h2>6. A Trust Fund</h2> <p>My financial woes would be nonexistent if I had asked Santa for a generous trust fund at an early age. Then I'd be just like the rest of my friends who were lucky enough to be related to someone filthy rich &mdash; free of debt with plenty of time to take selfies on a beach and dedicate my life's work to my own liver replacement.</p> <h2>7. Guaranteed Employment</h2> <p>There's nothing more stressful than job hunting, and I'm thankful that I haven't had to do that in a while since I'm self-employed. But self-employment isn't easy, either. I'm responsible for my own income instead of enjoying that twice monthly direct deposit for just showing up at my desk five days a week. Still, even that's on shaky ground if you don't mind your Ps and Qs &mdash; a friend of mine was recently laid off two weeks before Christmas &mdash; so this year I'd like to ask the big guy to make sure everybody can get (or keep) the job they really love for a happy and prosperous 2017.</p> <h2>8. Winning Lottery Numbers</h2> <p>I rarely play the lottery, but I do spend a few bucks when Mega Millions is, like $300 million, because, hey, somebody has to win. If that ever happens, my friends, you'll never hear from me again. Ev-er. Send me those winning numbers, Santa!</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/8-money-smart-things-i-wish-id-asked-santa-for">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/my-2016-budget-challenge-reduce-debt-or-save-for-an-emergency">My 2016 Budget Challenge: Reduce Debt or Save for an Emergency?</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/why-invest-in-the-stock-market">Why invest in the stock market?</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-places-to-stash-your-money-besides-a-savings-account">10 Places to Stash Your Money Besides a Savings Account</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/welcome-to-container-city-how-shipping-containers-are-recycled-into-green-dwellings">Welcome to Container City - How Shipping Containers Are Recycled into Green Dwellings</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-wrath-is-keeping-you-poor">5 Ways Wrath Is Keeping You Poor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living credit score employment gold personal finance real estate santa savings bonds trust funds tuition winning the lottery wishlist Fri, 16 Dec 2016 11:00:09 +0000 Mikey Rox 1853793 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-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/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/selling-your-home-17-ways-to-prepare-your-house-for-inspection-success">Selling Your Home: 17 Ways to Prepare Your House for Inspection Success</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 4 Foolproof Ways to Protect Your Money From Inflation http://www.wisebread.com/4-foolproof-ways-to-protect-your-money-from-inflation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-foolproof-ways-to-protect-your-money-from-inflation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_clock_money_94923537.jpg" alt="Woman finding ways to protect her money from inflation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Back in January 1980, when Jimmy Carter was President and Michael Jackson led the music charts with &quot;Rock with You,&quot; Americans were experiencing one of the periods of highest inflation in modern history. In January 1980, inflation was over 13.9% per year and peaked in April 1980 at 14.76%.</p> <p>With the consumer price index (CPI) at <a href="http://www.bls.gov/news.release/cpi.nr0.htm">0.8% in July 2016</a>, many Americans have never experienced the dramatic increase in prices that other generations have. But even though inflation is low these days, it still eats away at your savings and investments. Let's review four (nearly) foolproof strategies and investments that will reduce the hit.</p> <h2>1. Invest in an S&amp;P 500 Index Fund</h2> <p>The average annual inflation rate since the U.S. government began tracking it in 1913 is <a href="http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp">about 3%</a>. To combat inflation's effect on your money, you need investments that provide greater average returns than the inflation rate.</p> <p>Since its inception in 1928, the S&amp;P 500 has provided an <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html">average annual return of 11.25%</a> until 2015, making this stock market index a leading choice to protect yourself from inflation. For the greatest ease and cost-efficiency, invest in a mutual fund or exchange-traded fund that mirrors the S&amp;P 500's performance.</p> <p>Not only are the average returns of passively-managed S&amp;P 500 index funds higher than those of actively managed funds, but also the expense ratios of S&amp;P 500 index funds are lower than those of actively managed funds. For example, the Vanguard 500 Index Investor Shares fund [Nasdaq: <a href="https://finance.yahoo.com/quote/VFINX?p=VFINX">VFINX</a>] has an annual expense ratio of 0.16%, which is 84% lower than the average expense ratio of funds with similar holdings.</p> <p>Of course, this approach isn't actually foolproof, since both the rate of inflation and market returns vary from year to year. But when considering long-term averages, it's a fairly safe bet.</p> <h2>2. Increase Annual Contributions to Saving Accounts</h2> <p>Even when you leverage <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=internal">high-yield online savings accounts</a>, you'll only make between 0.75% and 1.05% per year, according to data from August 2016. With a July 2016 CPI of 0.8%, you're actually losing 0.05% and gaining only 0.25% per year. (See also: <a href="http://www.wisebread.com/capital-one-360-review?ref=seealso">Capital One 360: A Competitive Banking Option</a>)</p> <p>Setting up automatic transfers from your paycheck or main checking account to your investment and saving accounts is a smart idea, but adjusting those contributions for inflation is an even better one. A good practice is to make an adjustment for inflation once a year. Check with your financial institution to find out if it offers the option of automatic adjustments for inflation to your contributions.</p> <h2>3. Seek Real Estate Income</h2> <p>While gold has a great reputation as an investment hedge against inflation, real estate income has proved to be a better hedge tool. A study from financial company Fidelity back-tested the performance of several assets against inflation on an annual basis during a 40-year period and found that gold and real estate income beat inflation 54% and 71% of the time, respectively. &quot;Real estate is regarded consistently as a <a href="https://www.reit.com/news/videos/wharton-professor-discusses-reits-inflation-hedging-benefits">good inflation hedge</a>, and it is&quot;, asserts Susan Wachter, professor at the University of Pennsylvania Wharton School of Business. (See also: <a href="http://www.wisebread.com/4-reasons-millenials-should-invest-in-a-home?ref=seealso">4 Reasons Millennials Should Invest in a Home</a>)</p> <p>While most individual investors can only afford to buy their own home, all individual investors can gain exposure to real estate income from a wide variety of properties through real estate investment trusts (REITS). Some advantages of REITs are their requirement to maintain a dividend payout ratio of at least 90% and their liquidity because they trade on major stock exchanges.</p> <p>For example, the 10-year annual average return of the Vanguard REIT Index Fund Investor Shares [Nasdaq: <a href="http://finance.yahoo.com/quote/VGSIX?ltr=1">VGSIX</a>] is 7.46%, as of June 30, 2016. In comparison, the 10-year annual average return of the S&amp;P 500 was 7.42% for the same period.</p> <p>Adding REITs provides you access to assets with inflation resistance and helps you protect against the negative of higher inflation. Still, REITs should only be a part of a well-diversified portfolio. Depending on your tolerance to risk, financial advisers suggest allocating from 5% up to 20% of your investment in portfolio in REITs. And of course, past performance is no guarantee of future success.</p> <h2>4. Negotiate Your Salary</h2> <p>If your salary were to consistently go up every year, you would not to worry about inflation to begin with! However, <a href="http://time.com/money/3657524/odds-of-getting-raise/">less than half of working Americans</a> ever even ask for a raise, and about 30% of them are uncomfortable negotiating salary.</p> <p>Start your career on the right foot by successfully negotiating the salary offer of your very first job. Three out of four U.S. employers typically have room to increase their first salary offers by 5% to 10% during negotiations, but only 38% of applicants negotiate those first salary offers. Let's imagine that your first salary offer was $38,000, that would mean that you have the potential of increasing that offer from $39,900 to $41,800. Given the historical inflation average of 3% per year, you have the potential of covering inflation for 40 months just by negotiating your first salary offer.</p> <p>And things only get better after that.</p> <p>By bumping up your salary from the start, you're increasing your chances of future raises. As your salary grows over time, so does your probability of getting a raise. For example, people making $40,000 to $50,000 have about a 40% chance of receiving that raise they requested and people making $60,000 to $70,000 have about a 50% chance.</p> <p>While there are other factors that may influence pay raises, the main one is the decision to request better compensation. From U.S. workers asking for a raise, 75% of them get something: 44% of them get what they asked for and 31% of them receive a smaller amount. Getting at least a small raise is a very smart strategy to protect yourself from inflation because inflation erodes the value of your dollars year after year.</p> <p><em>What are other ways to protect yourself from inflation?</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/4-foolproof-ways-to-protect-your-money-from-inflation">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/a-simple-guide-to-series-i-savings-bonds-i-bonds">A Simple Guide to Series I Savings Bonds (I-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/this-post-really-suk-kuks-examining-islamic-finance">This Post Really Suk-kuks: Examining Islamic Finance</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/why-invest-in-the-stock-market">Why invest in the stock market?</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-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</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/8-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Banking Investment consumer price index Economy hedging inflation negotiating real estate REITs returns s&p 500 salary savings stocks Fri, 02 Sep 2016 09:00:14 +0000 Damian Davila 1784422 at http://www.wisebread.com 7 Investments That Usually Soar During the Summer http://www.wisebread.com/7-investments-that-usually-soar-during-the-summer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-investments-that-usually-soar-during-the-summer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_carousel_000036168672.jpg" alt="Couple finding investments that soar during summer" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's often said that investors should &quot;sell in May and go away,&quot; but that doesn't mean you can't make money in summertime. There are plenty of sectors and industries that do well in the warm months and can generate solid returns.</p> <p>Let's take a look at the investments that will keep your portfolio growing even while you're basking on the beach.</p> <h2>1. Theme Park Stocks</h2> <p>Gas prices are still low, so that means people will drive places this summer. And they'll head to parks owned by companies like Cedar Fair [<a href="http://finance.yahoo.com/q?s=FUN">NYSE: FUN</a>], Six Flags [<a href="http://finance.yahoo.com/q?s=SIX">NYSE: SIX</a>], and Disney [<a href="http://finance.yahoo.com/q?s=DIS">NYSE: DIS</a>]. All three of these companies hit their 52-week highs between May and August last year, and shares have been creeping up again in recent weeks. A strong summer for these properties could mean good growth for their share prices.</p> <h2>2. Airlines</h2> <p>People travel during the summer, so it's make or break time for most airlines. And there's some evidence suggesting that airline stocks do well between June and September. The Dow Jones U.S. Airlines Index rose 5% last summer, 2% in 2014, and 15% in 2013. The airline industry has gotten through much of the turbulence of years past, and the low cost of fuel now means there are some solid stocks including Southwest [<a href="http://finance.yahoo.com/q?s=LUV">NYSE: LUV</a>] and Delta Airlines [<a href="http://finance.yahoo.com/q?s=DAL">NYSE: DAL</a>].</p> <h2>3. Athletic Apparel</h2> <p>If people are getting outside, they're spending money on workout clothes and shoes. Last year, shares of Under Armour [<a href="http://finance.yahoo.com/q?s=UA">NYSE: UA</a>] rose nearly 8% during the summer months, while Nike shares rose 20%. Other sportswear companies including Columbia, VF, and Foot Locker had very good summers.</p> <h2>4. Food and Beverage Stocks</h2> <p>The S&amp;P 500 Food and Beverage Select Industry Index has seen gains in three of the last four years. Consider Coca-Cola, which saw shares rise more than 20% between June and September last year. Monster Beverage has had consistent gains during the summer, including a 24% increase in share value during the summer of 2014.</p> <h2>5. Biotechnology</h2> <p>It's one of the market's more volatile sectors, but it has historically done quite well in the summer. The NASDAQ Biotechnology Index rose about 8% between June and September in 2014, a whopping 25% in 2013, and more than 12% in 2012. The index did drop during the summer of 2015, but that was just the third summer decline since 2005. You can invest in a broad array of biotech firms by investing in the SPDR Biotech Select Index ETF [<a href="http://finance.yahoo.com/q?s=XBI">NYSE: XBI</a>] or a healthcare fund such as Vanguard's Health Care Index Fund [<a href="http://finance.yahoo.com/q?s=VHCIX">NYSE: VHCIX</a>]. Individual stocks worth a look include Gilead Sciences [<a href="http://www.nasdaq.com/symbol/gild">NASDAQ: GILD</a>] and Amgen [<a href="http://finance.yahoo.com/q?s=AMGN">NASDAQ: AMGN</a>].</p> <h2>6. Technology</h2> <p>Plain old technology stocks don't take a break in summer. Facebook [<a href="http://www.nasdaq.com/symbol/fb">NASDAQ: FB</a>] went up 11% last summer and 15% during the same period in 2014. Amazon [<a href="http://www.nasdaq.com/symbol/amzn">NASDAQ: AMZN</a>] saw shares go up 24% in the summer of 2015. Online auction company eBay has also been a solid summer performer, once outperforming the S&amp;P 500 for five straight years.</p> <h2>7. Real Estate</h2> <p>No one goes house hunting when it's cold outside. But when the weather's nice, the buyers come out. And that's when <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate" target="_blank">home prices increase</a> due to increased competition. A chart of median home prices by month almost always looks like a roller coaster, with prices rising in June and then falling back down in the fall and winter. So if you own property now, the summertime is a good time to sell.</p> <p><em>Any summer month stock winners we've missed? Let us know in comments!</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/7-investments-that-usually-soar-during-the-summer">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/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From 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/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</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/why-invest-in-the-stock-market">Why invest in the stock market?</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/tesla-six-flags-and-9-other-adventure-stocks-worth-investing-in">Tesla, Six Flags and 9 Other Adventure Stocks Worth Investing In</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-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment airlines biotech real estate stocks summer theme parks Thu, 02 Jun 2016 10:00:08 +0000 Tim Lemke 1721736 at http://www.wisebread.com Housing Values in Relationship to Proximity to Certain Stores http://www.wisebread.com/housing-values-in-relationship-to-proximity-to-certain-stores <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/housing-values-in-relationship-to-proximity-to-certain-stores" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/starbucks_storefront_000024865185.jpg" alt="Learning about housing values near certain stores" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Finding a home in the right neighborhood can be a daunting task, especially if you're on a strict housing budget. But according to recent studies, you should also add the proximity to specific stores into consideration when looking for your next home. Having these stores in your neighborhood can actually boost your home's value.</p> <h2>Starbucks</h2> <p>According to <a href="http://amzn.to/1VVRWfd">Zillow Talk: The New Rules of Real Estate</a>, ever since 1997, homes located within a quarter-mile of a Starbucks appreciated in value at an average rate of 21%, while homes within a half to quarter-mile rose in value by 17%. In contrast, homes located within the same distance of a Dunkin' Donuts, and not a Starbucks, only appreciated in value by 15%.</p> <p>Zillow makes the argument that a <a href="http://www.wisebread.com/dont-tell-anyone-11-secret-starbucks-saving-tips">Starbucks in the neighborhood</a> isn't the result of higher home prices, but in fact, is the cause. Whether home buyers see a Starbucks as a sign of an up-and-coming neighborhood, or a testament to a sense of community where people meet and interact with each other, there's no arguing the data that shows a nearby Starbucks to be something to look for when house hunting.</p> <h2>Whole Foods</h2> <p>The proximity to a Whole Foods grocery store is another excellent thing to look for when shopping for a new home. Zillow discovered that between 1997 and 2014, a strange phenomenon occurred when a Whole Foods announced they were coming into a new neighborhood.</p> <p>At first, median home values within one mile of the future Whole Foods grew slower than other homes in the same city. But as the grand opening grew nearer, that trend started to reverse dramatically. Once the store opened, homes within one mile appreciated much faster than other homes in the area. While Zillow can't fully explain this phenomena, they point to an overall increase in a neighborhood's desirability as the root cause.</p> <h2>Trader Joe's</h2> <p>Similar to Whole Foods, the proximity to a Trader Joe's is an indicator of a neighborhood with growing home values. Whether it be the perception of a healthy lifestyle or a safer neighborhood, Zillow also found that homes within a mile of a Trader Joe's had appreciated by 10% more than other homes in the area during the two years after a location's grand opening.</p> <p>According to Zillow CEO, Spencer Rascoff, &quot;the grocery store phenomenon is about more than groceries, it says something about the way people want to live &mdash; in the type of neighborhood favored by the generations buying homes now. Today's homebuyers seek things in neighborhoods that weren't even in real estate agents' vocabularies a generation ago: walkability, community, new urbanism &mdash; and maybe we should add words like 'sustainable seafood' and 'organic pears.'&quot;</p> <p>When comparing homes near a Trader Joe's to those near a Whole Foods, TJ's appears to be the clear winner. According to a recent RealtyTrac study, which analyzed the values for 2.3 million homes, they found that houses near a Trader Joe's location &quot;have a <a href="http://www.realtytrac.com/news/real-estate-investing/better-to-own-near-trader-joes-or-whole-foods/">higher value on average</a>: $592,339, 5% more than the $561,840 average value for homes near a Whole Foods.&quot; Also, homes near a Trader Joe's have appreciated by a whopping 40% on average, while similar homes near a Whole Foods have only appreciated by 34%.</p> <p>While it should be pointed out that causation does not always imply correlation, I think it's safe to assume that looking for these stores in a neighborhood is worth adding to your arsenal of factors when shopping for a new home. This is especially true when you consider the amount of money and effort that these corporations put into scouting new neighborhoods for potential store locations that will be profitable.</p> <p><em>Have you ever used the proximity to these stores as a way to determine the desirability of a neighborhood?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kyle-james">Kyle James</a> of <a href="http://www.wisebread.com/housing-values-in-relationship-to-proximity-to-certain-stores">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-ways-to-boost-your-neighborhood-and-your-homes-value">8 Ways to Boost Your Neighborhood and Your Home&#039;s Value</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-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> <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-evaluate-a-neighborhood-before-you-buy">How to Evaluate a Neighborhood Before You Buy</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refi-shy-how-to-determine-if-now-is-the-time-to-refinance">ReFi Shy? How to Determine If Now Is the Time to Refinance</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing home values neighborhoods real estate Starbucks Trader Joe's Whole Foods Thu, 17 Mar 2016 10:30:11 +0000 Kyle James 1672231 at http://www.wisebread.com 4 Ways the 50% Rule Can Save You Money http://www.wisebread.com/4-ways-the-50-rule-can-save-you-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-the-50-rule-can-save-you-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_cash_000040930446.jpg" alt="Woman learning ways 50% rule can save her money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The 50% rule is a simple guideline that can help you determine whether it's time to replace an appliance, adjust your budget, and lots more. Here's how it can help you save real money.</p> <h2>1. Appliances</h2> <p>When a household appliance has an issue, it may be difficult to determine whether you should schedule a repair or replace the machine altogether.</p> <p>To easily determine if it's worth keeping, use the 50% rule. If the appliance has used up more than 50% of its useful life and the cost of the repair is more than 50% of the cost of a new appliance, then you should replace it.</p> <p>If you have a warranty on your appliance, find out if any of the repairs are still covered. Most appliance warranties cover labor and parts for one to two years. Some small repairs can also be completed as DIY projects.</p> <p>On the other hand, Consumer Reports recommends that if an item has already <a href="http://www.consumerreports.org/cro/magazine/2014/02/repair-or-replace/index.htm">broken down once before</a>, it might make sense just to replace it. Keep in mind that if you decide to keep your original appliance, there will be extra costs like additional maintenance and possibly a &quot;trip charge&quot; from the service contractors you hire.</p> <h3>What You'll Need</h3> <p>You can easily compare the costs of repair versus replacement to determine what's a better value. In order to get the most accurate estimate possible, there are several pieces of information you will need:</p> <ul> <li>The appliance's expected useful life: Knowing how long your appliance is expected to last will help you determine if it's worth keeping. (See also: <a href="http://www.wisebread.com/this-is-how-long-these-6-appliances-should-last?ref=seealso">This Is How Long These 6 Appliances Should Last</a>)<br /> &nbsp;</li> <li>The original purchase price of the appliance.<br /> &nbsp;</li> <li>The average cost to repair your type of appliance: If your service contractor will offer a free estimate, this will help you make a more informed decision.<br /> &nbsp;</li> <li>The cost of a new appliance.</li> </ul> <h3>Benefits of Replacing</h3> <p>You may also want to consider the benefits of replacing the appliance to a newer, more updated version. These benefits could include:</p> <ul> <li>Improved energy efficiency, which may mean lower electricity bills, lower insurance, or tax deductions.<br /> &nbsp;</li> <li>More features that will improve your life.<br /> &nbsp;</li> <li>Less chance of repairs in the near future.</li> </ul> <h2>2. Real Estate</h2> <p>In real estate, the 50% rule states that operating expenses and vacancy account for about 50% of the rent. This means that if a property rents for $1,000 per month, about $500 will be spent on expenses and vacancies. The remaining 50% would be devoted towards mortgage principal and interest, with the leftovers serving as cash flow.</p> <p>This can serve as a general guideline to help you determine if a particular real estate investment will be worth it in the long run. If you are considering a long term buy and hold, then the 50% rule can help save you money by preventing any purchases that won't pay off.</p> <h2>3. Insurance Claims and Disaster Recovery</h2> <p>After a natural disaster, if the damages do not exceed 50% of the cost of replacing the building, then it will be deemed repairable. The Federal Emergency Management Agency <a href="https://www.fema.gov/pdf/floodplain/nfip_sg_unit_8.pdf">uses a 50% rule</a> to determine if something is considered to have heavy damage or needs substantial improvement. The rule states that if the repair costs are 50% or more of the building's value, then the building must be elevated and brought into compliance.</p> <p>Another application of the 50% rule states that when a building is to be renovated, if the total costs of improvement are 50% or more of the building's value, it will have to be brought into compliance. This is a hidden cost that most don't know about. Being aware of what's to come can help save you time, money, and frustration.</p> <h2>4. Budget</h2> <p>If you've heard of the <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">50/20/30 budget</a>, it relies on the 50% rule. It specifies that 50% of your budget should be dedicated to essential expenses (like housing, food, and transportation), 20% to financial obligations (like debt repayment, retirement, and emergency savings), and 30% to personal expenses (like entertainment, dining out, and phone, cable, and Internet expenses). By following this guideline, you can create a workable budget that alerts you when you are spending too much, saving you money over time.</p> <p>Keep in mind that the 50% rule is a <em>guideline</em> and won't always work perfectly. It's best to make adjustments to the numbers so that you can get a better estimate and make a more informed decision.</p> <p><em>Have you ever applied the 50% rule to your life? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/4-ways-the-50-rule-can-save-you-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-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/8-signs-you-arent-prepared-for-an-emergency">8 Signs You Aren&#039;t Prepared for an Emergency</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/heres-what-i-learned-about-money-after-using-acorns">Here&#039;s What I Learned About Money After Using Acorns</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/6-ways-to-feel-better-about-your-financial-situation">6 Ways to Feel Better About Your Financial Situation</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/my-2016-budget-challenge-reduce-debt-or-save-for-an-emergency">My 2016 Budget Challenge: Reduce Debt or Save for an Emergency?</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/10-frugal-fall-getaways-you-can-start-packing-for-now">10 Frugal Fall Getaways You Can Start Packing For Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting 50% rule appliances guidelines insurance real estate saving money Fri, 29 Jan 2016 12:00:04 +0000 Andrea Cannon 1646405 at http://www.wisebread.com 11 Finance Tips You Wish You Could Tell Your Younger Self http://www.wisebread.com/11-finance-tips-you-wish-you-could-tell-your-younger-self <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-finance-tips-you-wish-you-could-tell-your-younger-self" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/child_holding_cash_000073924377.jpg" alt="Learning finance tips you wish you could tell your younger self" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you could impart some of your current financial wisdom on your younger self, what would you say? Take more risks? Concentrate more on saving? Choose a less expensive education? All of us would do something differently. Perhaps one of these tips would have paved an easier financial path from then to now.</p> <h2>1. Start Contributing to Your 401K as Soon as You Can</h2> <p>When you landed your first job straight out of college, the last thing on your mind was retirement. But even a couple years' delay can defer your retirement to later than expected, or force you to tighten the purse strings mid-career to make up the difference. You're not alone. According to new research from Fidelity Investments in collaboration with the Stanford Center for Longevity, 36% of retirees <a href="http://www.businesswire.com/news/home/20151027006025/en/Drives-People-Retire-Isn%E2%80%99t-Fidelity-Research-Busts">wished they had saved more</a> during their working years, and 33% wished they had started saving earlier &mdash; a statistic that isn't exactly comforting in hindsight.</p> <p>To make the most of your 401K right now, max out your employer-match contribution &mdash; don't let that free cash go to waste &mdash; and negotiate to be vested sooner and/or receive a higher match opposed to $1K to $2k more annually. This is a strategy that will pay off more in the long run.</p> <h2>2. Never Say &quot;I'll Pay Myself Back Later&quot; Because You Won't</h2> <p>There are times when we're younger that we need to dip into our personal savings or 401K (which should always be a last resort) for emergencies or something recreational (like a bad-idea road trip with your buddies to Fort Lauderdale &mdash; not that I'm speaking from personal experience, of course). We convince ourselves that we'll pay ourselves back for the deduction so that we feel less guilty about it, but nine times out of 10, that never happens. That was then. Hopefully you've put those costly impulse decisions behind you &mdash; like you have the cargo shorts and keg stands.</p> <h2>3. Credit Cards Aren't Free Money</h2> <p>This tip is very personal to me because I was targeted by credit card companies as soon as I turned 18, and I fell right into their trap. I took whatever they were willing to throw at me &mdash; because, <em>hahaha, I was going to beat the system!</em> &mdash; but the joke was on me. I <a href="http://www.wisebread.com/do-this-if-you-have-too-much-credit-card-debt">maxed out those cards</a> in less than two months, and because I was a student without a job, I was unable to pay the bills. I missed payments for <em>years</em> until the debt was in such dire straits that I was offered payoff deals. The debt, and the indelible mark it left on my credit score, followed me for years, making it difficult to buy a car, purchase a home, or even build my savings. In this case, I'd tell my younger self to run for the hills &mdash; and keep your nose out of the J.Crew catalog.</p> <h2>4. You Don't Need to Impress Your Friends</h2> <p>As soon as you get that first high-paying job, you want to do two things &mdash; buy shiny stuff and take your friends out for dinner and drinks. Why? Because you made it, and now it's time to show it off! But guess what? Your friends don't give a lick. These are the people who enjoyed your company when you were poor; there's no need to impress them now. And if that's not the case, they're not really your friends. Instead, save your money and pretentiousness for more important things.</p> <h2>5. Pay Your Bills First, Yourself Second, and Everything Else After That</h2> <p>Cash your check and divide it into three parts every time you get paid. The largest part should pay all your bills for the month &mdash; I mean everything. Second, pay yourself. Funnel money into savings and set aside cash for budget items like groceries, gas, and rent. Lastly, if you have any left over, you can use a little for the extra things you'd like to do, like eat out, see a movie, or other non-essentials. It's not the most exciting way to live, but it is the smartest.</p> <h2>6. If You Don't Have the Cash for it, You Can't Afford It</h2> <p>This sort of goes hand-in-hand with steering clear of credit cards if at all possible. And it's as simple as the strategy suggests. If you can't pay for whatever it is you want in cash, you don't need it. Obviously that exempts major life purchases &mdash; a new car, home, etc. &mdash; but it applies to almost everything else, including fancy flat-screen TVs, expensive makeup, the hottest sneakers, or whatever your vice is that you can totally live without.</p> <h2>7. Stop Eating and Drinking Yourself Poor</h2> <p>Fifty-cent wing nights and dollar shots will not get your bills paid, but they will get you fat and house poor. Print out that motivational speech and keep it in your wallet, young buck. In general, eat healthier &mdash; and at home more often. Your 30-year-old body (and bank account) will thank you.</p> <h2>8. Carefully Consider the Debt-to-Income Ratio of Student Loans</h2> <p>Personally I don't regret my costly private college education, despite that I still have eight more years of loan to pay off. Still, I do have plenty of friends who wish they had chosen a less expensive school. Thus, carefully consider how much college will cost, the debt you'll rack up as a result, and the income earning potential of a career in your chosen field. If there's an imbalance between those variables that you don't think you can live with, choosing a cheaper school may be the right move for you.</p> <h2>9. Master the Money-Saving Art of Negotiation</h2> <p>If you can buy it, chances are you can negotiate the price down. From clearance clothing and your first new car to insurance premiums and bank fees (yep, you can even negotiate those, too), you can save a bundle if you learn how to drive a hard bargain.</p> <h2>10. Invest in Real Estate as Soon as You Can</h2> <p>If you search hard enough, you can find anything on the Internet. But I don't believe that, and my younger self didn't either &mdash; which is why I bought property as soon as I could. I'm not alone in this thinking either. Many of my friends who bought early stand by their decisions, even though it set them back financially at first. That sacrifice by way of real estate investment has paid off over the years, because instead of paying someone else a fee to live under a roof, we've paid ourselves in the form of equity that we can now use to continue to purchase real estate as a means of earning passive income. This is probably one of the most lucrative tips on this list, and one everybody should research more in depth.</p> <h2>11. If You Want to Be Reckless, Now's the Time to Do It</h2> <p>While you should have been smarter with your money when you were younger, all is not lost. Truth is, it's better to be a dummy about your finances in your 20s when you don't have much to lose than to make stupid money moves in your 30s and 40s when mismanagement can be costly. So save, spend smartly, but also have some fun &mdash; you may not have the financial freedom later in life, especially if you want nice things.</p> <p><em>Now it's your turn. What financial tips would you tell your younger self? I'd love to hear some of the things you would change about your money management skills from 10 years ago to today.</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/11-finance-tips-you-wish-you-could-tell-your-younger-self">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/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead">Rich People Spend $350K+ to Park Their Cars — Here&#039;s How We&#039;d Spend it Instead</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-tax-friendly-ways-to-save-beyond-your-retirement-fund">9 Tax-Friendly Ways to Save Beyond Your Retirement Fund</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-same-actions-will-produce-the-same-results-ten-tenets-for-arranging-your-rich-part-2">The Same Actions Will Produce The Same Results (Ten Tenets for Arranging Your Rich: Part 2)</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/what-does-being-rich-mean-to-you-anyway">What Does Being Rich Mean to You Anyway?</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/seller-concessions-and-buyer-bargains-what-to-ask-for-in-the-current-real-estate-market">Seller concessions and buyer bargains - What to ask for in the current real estate market.</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 401k life lessons money real estate younger self Tue, 08 Dec 2015 18:00:02 +0000 Mikey Rox 1618967 at http://www.wisebread.com 9 Tax-Friendly Ways to Save Beyond Your Retirement Fund http://www.wisebread.com/9-tax-friendly-ways-to-save-beyond-your-retirement-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-tax-friendly-ways-to-save-beyond-your-retirement-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_cash_000005176239_2.jpg" alt="Learning tax-friendly ways to save beyond retirement fund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've been taking advantage of your company's 401K plan and have also been placing money in an individual retirement account (IRA). In fact, you've been such a great saver that you've now hit the limit on what you can contribute annually to these tax-advantaged accounts. What to do now?</p> <p>Well, first off, give yourself a huge pat on the back. You've been saving a ton, and have managed to avoid paying too much tax along the way.</p> <p>If you still have money you'd like to stash away, but don't want to give too much to the tax man, there are other investment opportunities for you. Take a look at these nine options for super savers like yourself.</p> <h2>1. 529 Plans</h2> <p>If you have children who may one day attend college, it's a great idea to save for their education using a 529 college savings plans. These plans, which are offered by individual states, have a variety of tax benefits. In most cases, you can place money in an investment account and allow it to grow tax free as long as you use the funds to pay for college. You can also often get a tax deduction on contributions.</p> <h2>2. ESA Coverdell Accounts</h2> <p>These work in similar fashion to 529 plans and Roth IRAs, in that money can be invested and then withdrawn tax free. Coverdell accounts have lower account maximums than 529 plans, but often have more investment options and the money can be used for any education expense, including grade school and high school. The maximum annual contribution per beneficiary is $2,000.</p> <h2>3. Municipal Bonds</h2> <p>It's good to have some bonds in your investment portfolio, and here's a way to help out your state, city, or county raise money for its capital expenditures. &quot;Muni&quot; bonds are usually exempt from taxes, so you get to keep more of your investment. These days, you can buy bonds directly, or get a mix of bonds through a bond mutual fund or ETF.</p> <h2>4. Real Estate</h2> <p>When you buy a house or other piece of property, mortgage interest is often tax deductible. If you sell a home, there is often an exclusion on capital gains up to $500,000 if you're a married couple filing jointly.To take advantage of these breaks, the property must be used as a first or second home in most cases. Also, be sure to itemize your deductions when filing your taxes.</p> <h2>5. Annuities</h2> <p>The idea behind an annuity is that you make investments, and then the annuity makes payments to you at a later date, or a series of dates. The investments grow tax-deferred, and earnings are taxed at your regular income rate. So if you think you'll be in a lower tax bracket upon retirement, you'll save money. Unlike 401K and IRA plans, there are no contribution limits to annuities.</p> <h2>6. Master Limited Partnerships</h2> <p>More experienced investors may find some great tax savings and solid income from MLPs. An individual can buy shares of an MLP just like a stock. Most MLPs are related to energy production, and allow investors to essentially buy &quot;units&quot; of a gas pipeline, or something similar. Income from MLPs are taxed as &quot;return of capital,&quot; so taxes can be deferred. (In essence, you only pay tax when you sell your units.) The taxes on MLPs are complex, but if you are okay with the mountain of paperwork, you may save some money. It's wise to talk to an accountant to get a full understanding of the tax implications before investing in an MLP.</p> <h2>7. Whole Life Insurance</h2> <p>I am not a big fan of whole life insurance as an investment, but there can be some tax advantages to having a policy. It's also an okay option for high earners who have maxed out other accounts. Whole life policies pay a death benefit, which is not usually taxed. Many policies also offer tax-free dividends. If you're interested in whole life insurance, make sure you're capable of paying the annual premiums. And do your homework to make sure that the dividends and growth potential outweigh many common downsides, such as high fees and commissions.</p> <h2>8. Index Funds</h2> <p>If you maxed out the contributions to your retirement plans, any additional investments you want to make will probably have to go into a taxable brokerage account. But that doesn't mean you can't find ways to keep your tax burden relatively low. Index funds are mutual funds that track a specific index, such as the S&amp;P 500. Generally speaking, index fund managers don't have to do a lot of buying and selling, so they aren't passing on a lot of capital gains to you. You'll still have to pay tax when you cash out, so they aren't really &quot;tax advantaged&quot; in the classic sense. But you'll be saving money along the way.</p> <p>See also: <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=seealso">How to Get Started with Index Funds</a></p> <h2>9. ETFs</h2> <p>Exchange-traded funds are like mutual funds, in that they usually track a specific index or market sector. But they are more tax efficient than mutual funds, because investors only pay capital gains when they sell the ETF. You won't avoid tax altogether unless the ETF is part of a retirement plan, but your liability will be as low as possible. (See also: <a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds?ref=seealso">8 Ways ETFs Are a Smart Investment</a>)</p> <p><em>Where are you stashing your savings?</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-tax-friendly-ways-to-save-beyond-your-retirement-fund">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/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</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-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</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/11-finance-tips-you-wish-you-could-tell-your-younger-self">11 Finance Tips You Wish You Could Tell Your Younger Self</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-surprising-ways-the-rich-get-richer">5 Surprising Ways the Rich Get Richer</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/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea">Why Saving Too Much Money for a College Fund Is a Bad Idea</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 401k 529 plans ETFs investing MLPs real estate Roth IRA taxes Tue, 03 Nov 2015 13:15:45 +0000 Tim Lemke 1603574 at http://www.wisebread.com Big Purchases You Should Make by 30, 40, and 50 http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/big-purchases-you-should-make-by-30-40-and-50" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_empty_piggybank_000018649757.jpg" alt="Man planning big purchases at 30, 40, and 50" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It used to be that major purchases such as a house or a car were rites of passage into adulthood. Sure, times are changing, and the new generation isn't buying all the things their parents did. But there are some things you probably <a href="http://www.wisebread.com/the-7-scariest-big-purchases-people-make">can't avoid buying</a>. Here are the big purchases most of us should make by ages 30, 40, or 50.</p> <h2>By Age 30</h2> <p>By the time we reach 30 we've turned the corner from the youth to adulthood, and our possessions show it.</p> <h3>A Car</h3> <p>As more people choose to live in cities, and use mass transit or ride-sharing apps, it's become less necessary to own a car. That said, many of us still have a lifestyle that requires owning a set of wheels. If this is the case for you, by the age of 30, you probably should have purchased a car <em>by yourself for yoursel</em>f. (See also: <a href="http://www.wisebread.com/the-joy-of-buying-a-new-car-9-car-buying-tips?ref=seealso">The Joy of Buying a New Car: 9 Car Buying Tips</a>)</p> <h3>A Real Bed</h3> <p>This is something everyone avoids for years. Millenials have bought and sold cars well before buying a new bed for themselves. Once you are old enough to live on your own, an ugly used frame propping up a <a href="http://www.wisebread.com/deep-clean-your-mattress-for-a-better-nights-sleep">decades-old (and filthy) mattress</a> just won't do. A more comfortable bed will help you sleep better, and sleeping better will improve your overall health, which will cost you less in the long run. It's one of the best investments you can make in your 20s. Now that one can <a href="http://www.wisebread.com/how-to-buy-the-best-mattress-for-the-least-money">buy affordable and comfortable mattresses online</a>, there's no excuse anymore!</p> <h2>By Age 40</h2> <p>What lies around the corner from age 30? A nest and a family of one's own.</p> <h3>A Home</h3> <p>This can be the most emotional purchase you'll ever make, especially in areas of the country where it's virtually impossible for the average person to afford a home. For those of us who want to own our own home, working toward buying before age 40 is a worthy goal. It's wise to start making sound decisions in your 20s and 30s that will keep your financial state healthy, such as building your credit, in anticipation of a home loan.</p> <h3>Home Appliances</h3> <p>Not every home, whether bought or rented, will come equipped with everything you need. As you get older, you'll probably grow tired of washing your dishes in the sink, or going to the laundromat like you did in your 20s. Eventually, you'll break down and buy a refrigerator, dishwasher, a washer/dryer set, or woodworking tools for the garage. Make sure you do your comparison homework in order to get the best appliance deals.</p> <h2>By Age 50</h2> <p>By now the roots are set deep and the big purchases are behind us, but there are a few big buys that mark time's passage.</p> <h3>Life Insurance</h3> <p>As you get older and have children, you'll want to be covered for whatever may happen. By age 50, you'll almost definitely want to consider life insurance &mdash; well before you develop any chronic health issues or are old enough for premiums to skyrocket. Think about what you need from your life insurance and start planning your beneficiaries' financial future. (See also: <a href="http://www.wisebread.com/universal-life-insurance-and-whole-life-insurance-a-comparison?ref=seealso">Universal Life Insurance and Whole Life Insurance: A Comparison</a>)</p> <h3>Contractor Work</h3> <p>At this point in your life, making renovations on your bathroom or kitchen, adding on to your home, or re-landscaping your backyard is common. In fact, some renovations <a href="http://www.wisebread.com/10-home-renovations-that-almost-pay-for-themselves">nearly pay for themselves</a> over time. If you've never hired a contractor, you'll need to create a budget and detailed timeline, along with a cash buffer for incidentals, accidents, and hotels if you cannot stay in the home at a certain point. Extra frugal? It's also worth <a href="http://www.wisebread.com/is-diy-home-renovating-for-you">considering DIY renovations</a>.</p> <p><em>Which major purchases do you think signify life milestones?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amanda-meadows">Amanda Meadows</a> of <a href="http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50">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/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</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/welcome-to-container-city-how-shipping-containers-are-recycled-into-green-dwellings">Welcome to Container City - How Shipping Containers Are Recycled into Green Dwellings</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/6-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before You Retire</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/is-it-the-end-of-6-real-estate-commissions">Is It the End of 6% Real Estate Commissions?</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/8-ways-to-decide-if-its-a-fund-worthy-emergency">8 Ways to Decide if It&#039;s a &quot;Fund-Worthy&quot; Emergency</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance appliances big purchases Cars housing life insurance real estate Thu, 07 May 2015 13:00:08 +0000 Amanda Meadows 1410180 at http://www.wisebread.com 6 Ways It Pays to Be Friendly With Your Neighbors http://www.wisebread.com/6-ways-it-pays-to-be-friendly-with-your-neighbors <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-it-pays-to-be-friendly-with-your-neighbors" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/neighbors-E000352-small.jpg" alt="neighbors " title="neighbors" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Our communities just don't have the same bonds they used to. Think about it: Of all the people you've lived next door to, how many of their names do you know? (See also: <a href="http://www.wisebread.com/how-to-deal-with-a-rude-neighbor?ref=seealso">How to Deal With a Rude Neighbor</a>)</p> <p>This is a problem, given the tangible, material benefits of having neighbors you know better than, say, the receptionist at your dentist's office. Don't believe it? Then check out these six ways it pays to be friendly with your neighbors.</p> <h2>1. Splitting Chores</h2> <p>Some chores impact more than just one house in a neighborhood. For example, if you share a common driveway, you can all pitch in when it comes to repaving it. It's not just about communal chores, though. Doing small favors can encourage a mini sharing economy. Help your neighbor plant a garden, he helps you change the transmission on your car. Start saving a mint based on the things that you couldn't do yourself, but can do with a spare set of hands.</p> <h2>2. Sharing the Cost of Big Equipment</h2> <p>Just like there are some chores that are impossible alone, so are there pieces of big equipment one person might not want to buy, but a neighborhood can go in on together. Think of things like wood chippers, cherry pickers, or power washers. Particularly if you're not going to be using them a lot, the price can be cost prohibitive. However, once you start splitting the cost three or four ways, the investment starts making a lot more sense.</p> <h2>3. Splitting Entertainment Costs</h2> <p>Especially for the sports fan, the ability to split entertainment costs can be a big deal. Maybe you don't want to shell out for the next UFC fight, WWE pay-per-view, or a season of NFL game day on your own. However, with the help of a neighbor or two you can make the cost of an expensive paid cable event no more than a couple of lattes. What's more, you might also be able to get package deals on vacations if you all coordinate your time away from home. Once you get there you don't have to be joined at the hip, though hey &mdash; if you guys are close, why not?</p> <h2>4. Learning New Skills</h2> <p>Chances are good that you have skills your neighbor wants and vice versa. So why not go about trading those talents? Not only can you learn them without paying any money, you can also save money over the long run by applying the skills you learn. Maybe it's auto repair. Maybe it's bread baking. Maybe it's interior painting. Whatever it is, when you learn how to do things for yourself, you don't have to pay someone else to do it for you.</p> <h2>5. Tolerating Your Big Bash</h2> <p>Having a party? Making any amount of racket? Get ready for a noise complaint and the charges that come along with it. Making friends with your neighbors not only makes them a little more tolerant of things like watering your garden on the day that you're not supposed to, but it also makes them more likely to talk to you directly about the problem rather than going straight through more official channels. No one wants angry neighbors, but if you're going to have them they can be angry in the neighborly way or the expensive way.</p> <h2>6. Networking</h2> <p>Networking is more important than ever. Looking for the best plumber in town? Your neighbor might be a friend. Trying to find a marriage counselor? Maybe your neighbors recently got through a rough patch with the help of a family therapist. Is your nephew looking for his first job in publishing? Talk to your neighbors and see if they know anyone who can help. Knowing more people is always helpful, starting with the people who live just down the street.</p> <p><em>Are you neighborly with your neighbors? How has it paid off for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nicholas-pell">Nicholas Pell</a> of <a href="http://www.wisebread.com/6-ways-it-pays-to-be-friendly-with-your-neighbors">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/25-reasons-why-its-good-to-know-your-neighbors">25 Reasons Why It&#039;s Good to Know Your Neighbors</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/why-dont-people-share-more">Why don&#039;t people share more?</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/cooking-for-beginners-10-recipes-for-kitchen-newbies">Cooking for Beginners: 10 Recipes for Kitchen Newbies</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-easy-affordable-ways-to-make-your-home-even-cozier-this-autumn">6 Easy, Affordable Ways to Make Your Home Even Cozier This Autumn</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/mcmansion-to-mccottage-why-smaller-houses-are-smarter">McMansion to McCottage: Why Smaller Houses Are Smarter</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Home Lifestyle neighbors networking real estate sharing sharing economy Fri, 24 Oct 2014 17:00:05 +0000 Nicholas Pell 1241737 at http://www.wisebread.com Best Money Tips: Steps to Make Sure You Buy the Right House http://www.wisebread.com/best-money-tips-steps-to-make-sure-you-buy-the-right-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-steps-to-make-sure-you-buy-the-right-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-buying-house-491066665-small.jpg" alt="couple buying house" title="couple buying house" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some amazing articles on making sure you are buying the right house, maximizing your dollar at Subway, and creating work/life balance when your kids return to school.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.saveoutsidethebox.com/make-sure-its-the-right-house-to-buy/">7 Steps to Make Sure It's the Right House to Buy</a> &mdash; Scoping out the neighborhood and making a pros and cons checklist is important when deciding whether or not to buy a home. [Save Outside The Box]</p> <p><a href="http://www.lazymanandmoney.com/maximize-dollar-subway/">Mazimize Your Dollar at Subway</a> &mdash; To maximize your dollar at Subway, do the survey on the receipt for free food. [Lazy Man and Money]</p> <p><a href="http://kylebumpus.com/5-bs-myths-about-building-wealth-everyone-thinks-are-true/">5 BS Myths About Building Wealth Everyone Thinks Are True</a> &mdash; It is not true that you will never get rich working for someone else. [Kyle Bumpus]</p> <p><a href="http://parentingsquad.com/9-tips-for-parents-to-create-worklife-balance-when-kids-return-to-school">9 Tips for Parents to Create Work/Life Balance When Kids Return to School</a> &mdash; Scheduling your time wisely and being honest can help you maintain a work life balance when your kids go back to school. [Parenting Squad]</p> <p><a href="http://thenewyorkbudget.com/2014/07/14/spend-less-without-giving-entertainment-fund/">How to Spend Less Without Giving Up Your Entertainment Fund</a> &mdash; If you want to spend less on your necessities so you don't have to give up your entertainment fund, consider substituting certain products or services for cheaper ones. [The New York Budget]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.savvysugar.com/Unreal-Travel-Destinations-Europe-35514639">31 Unreal Travel Destinations in Europe You Didn't Realize You Could Visit</a> &mdash; If you go to Europe, take the time to visit Abisko National Park and Krka. [PopSugar Smart Living]</p> <p><a href="http://mywifequitherjob.com/what-successful-online-store-owners-do-differently/">Why Beginners Fail and What Successful Online Store Owners Do Differently</a> &mdash; Successful online store owners choose winnable niches. [My Wife Quit Her Job]</p> <p><a href="http://investorinthefamily.com/become-ultimate-travel-hacker/">Become the Ultimate Travel Hacker</a> &mdash; By understanding how your credit score is calculated, you can save some serious dough on travel. [Investor in the Family]</p> <p><a href="http://moneytalkscoaching.com/evaluate-the-risks-and-rewards/">Evaluate the Risks and Rewards</a> &mdash; Savings accounts are a safe place to keep your money, but they also have a very low return. [Money Talks]</p> <p><a href="http://siliconbayounews.com/2014/08/20/fall-is-coming-10-things-startups-should-be-doing-now/">Fall is Coming: 10 Things Startups Should Be Doing Now</a> &mdash; Startups should take the time now to develop a content strategy and dial in their startup profiles. [Silicon Bayou News]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-steps-to-make-sure-you-buy-the-right-house">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/are-you-ready-for-home-ownership">Are You Ready for Home Ownership?</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/renting-is-cheaper">Renting is cheaper</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/welcome-to-container-city-how-shipping-containers-are-recycled-into-green-dwellings">Welcome to Container City - How Shipping Containers Are Recycled into Green Dwellings</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/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-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 best money tips buy house invest purchase real estate Wed, 27 Aug 2014 19:00:04 +0000 Ashley Jacobs 1195108 at http://www.wisebread.com Think the Housing Bubble Was Bad? Check Out These Other Crazy Investment Bubbles http://www.wisebread.com/think-the-housing-bubble-was-bad-check-out-these-other-crazy-investment-bubbles <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/think-the-housing-bubble-was-bad-check-out-these-other-crazy-investment-bubbles" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/recession-180956394-small.jpg" alt="recession" title="recession" class="imagecache imagecache-250w" width="250" height="149" /></a> </div> </div> </div> <p>A couple of months ago, an in-law gifted my five-year-old twins a five foot tall box filled entirely with beanie babies. My daughters were thrilled as they sorted through a hundred or so miniature toys. My husband grabbed a pair of scissors and started to cut the tell-tale Ty tags from beanie ears and for a moment I silently screamed &quot;No! They'll be worthless if you cut the tags!&quot;</p> <p>Of course, beanie babies today are already next to worthless, tags or not. Back in the late 1990s, though, beanie baby collectibles resold for hundreds, even thousands of dollars. There were collector manuals, trade publications, and a proliferation of specialty stores that resold the plush toys in plastic preservation boxes. Parents hoarded the toys, keeping them safe from the grimy hands of their kids. There were more than a few parents who thought their <a href="http://qz.com/114753/meet-the-family-who-lost-100000-when-the-beanie-baby-bubble-burst/">beanie collections would pay for their kids' college tuition</a>. I even owned a few, most notably Peace the Bear who, at one point, was selling for a lofty $200. Sadly, I never cashed in on the capital gain. (See also: <a href="http://www.wisebread.com/how-to-create-a-speculative-bubble-and-profit?ref=seealso">How to Create a Speculative Market Bubble and Profit</a>)</p> <p>Beanie babies are far from the only unpredictable market. Collectible toys, internet stocks, and homes have all fairly recently seen unexpectedly high gains, only to dramatically crash later. Experts overwhelmingly recommend an investment strategy that focuses primarily on a broad-based investment portfolio of diversified assets because history has shown that even the most learned experts can't regularly predict market ups and downs. (See also: <a href="http://www.wisebread.com/6-basics-you-must-know-before-you-start-investing?ref=seealso">6 Basics You Must Know Before You Start Investing</a>)</p> <p>Market crashes seem to happen when just about everyone has hopped on a bandwagon and is excited about a particular offering. Let's take a walk through history to see some of the worst timed investments of all time.</p> <h2>Tulips in 1636</h2> <p>The newly imported tulip in 16th century Holland was a popular-yet-expensive addition to many upscale home gardens. It became even more popular after a tulip virus caused the flower's petals to develop beautifully colored stripes in contrasting patterns. A second virus hit the plant, this one lethal, and tulip supply dwindled. The price of bulbs spiked, and soon after, the cost of a single bulb rose to the staggering equivalent of $1,250 (price adjusted for time and currency).</p> <p>Tulip bulb prices rose steadily from there and soon people stopped planting bulbs and started investing in them instead. At the height of the frenzy, nearly everyone &mdash; nobles, farmers, and chimney sweeps alike &mdash; were trading in bulbs. People sold off their land, jewels, and furniture to buy more flowers. A good tulip <a href="http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/">trader could once make the equivalent of $61,710</a> USD per month, just from trading bulbs. Thanks (or no thanks) to leveraging, tulip options were bought at 15%&ndash;20% of actual cost, leading many investors to buy more than they could afford to lose.</p> <h3>How the Tulip Bubble Ended</h3> <p>One day, a merchant didn't show up at market to pay for the bulbs he'd bought. The history books point to this one deal gone sour as the impetus for what became one of the greatest market crashes in history. Tulip owners rushed to sell, prices spiraled down, and widespread panic ensued. Dealers went bankrupt, and soon no one honored their buying commitments. Eventually the Dutch government stepped in and offered to bail contract holders out at 10% of contract value. Even so, prices continued to fall, and eventually everyone in the nation was affected as the market crashed and a long economic depression settled in.</p> <h2>Pretty Much Any British Stock in 1720</h2> <p>In early 18th century England, stock investing for the middle class was a new phenomenon, and many Englishmen were excited to get in the game. There were countless offerings that promised ridiculous business ventures such as trading in human hair, extracting silver from lead, or removing sunlight from a cucumber. Many investors didn't believe in the feasibility of the absurd ventures they funded. They simply thought that stock prices would rise, they'd sell their shares, and they'd profit handsomely from the sale.</p> <p>Around this time, an unknown man started a company &quot;for carrying on an undertaking of great advantage, but nobody to know what it is.&quot; Stock prices were rising to great heights across the country and investors were so excited to get in on the action that when the offering opened, it took just five short hours for a thousand people to invest in the mysterious investment.</p> <p>The largest investment opportunity gone awry during this time was the <a href="http://www.investopedia.com/features/crashes/crashes3.asp">South Sea Company</a>, which was founded to conduct trade throughout the South Seas. The company's stock rose from an initial offering price of 130 to more than 1,000 pounds per share, even though none of the company's directors had any experience in South American trade.</p> <h3>How the South Sea Bubble Burst</h3> <p>The directors and officers of the South Sea Company realized that the company's share price was heavily inflated and so sold their holdings. The general investing public heard of the sale, panicked, and sold their shares at increasingly lower prices. The British public credit system almost collapsed, and as a result, it was more than 100 years before it was again legal for a company to issue public stock. Oh, and the man with that mysterious stock offering? He closed the issue at the end of that first day and promptly sailed off for America. No one ever heard from him again.</p> <h2>Internet Stocks in Early 2000</h2> <p>Personal computer growth exploded in the early 1990s, followed by multiple web browser developments, bringing the mass public online for the first time ever. Internet upstarts proliferated as companies rushed to profit off nascent Internet traffic. The only hitch was that many tech companies had yet to figure out how to make a profit in the online world.</p> <p>This technicality didn't matter to investors, though, who regularly overlooked traditional metrics and invested at staggering price-to-earnings ratios on the assumption that technological advances would far outpace the growth of a company's stock price. One such profit-less company, TheGlobe.com, ended a five-day IPO at <a href="http://news.cnet.com/2100-1023-217913.html">a 249% gain over its initial target price</a>.</p> <p>Excitement heightened as established companies and upstarts alike rushed to cash in on the tech boom. Some created new and exciting online businesses while others did little more than change their corporate name by adding a .com suffix or an e- prefix. Internet giants Amazon.com, eBay, and Google were founded during this time, but so were the now defunct and long-forgotten Pets.com, e-Stamp.com, e1040.com (notice the tell-tale prefixes and suffixes). The NASDAQ rose by more than 700% on a cumulative basis in the 10 year decade before the bubble eventually burst. (Note: the NASDAQ has yet to return to its year 2000 peak.)</p> <h3>How the Internet Boom Ended</h3> <p>By the end of the decade, there was a new IPO issued almost every day, and day trading seemingly became a new national pastime. Tech companies were unable to keep up with market expectations and some, like <a href="http://www.nytimes.com/2002/07/22/us/worldcom-s-collapse-the-overview-worldcom-files-for-bankruptcy-largest-us-case.html">WorldCom</a>, were later found to be cooking their books in an effort to keep the party going. A majority of tech companies didn't survive the crash, but even those that did saw significant drops in stock price (e.g., Amazon saw its stock price fall from $107 to $7 per share). In the end, <a href="http://en.wikipedia.org/wiki/Dot-com_bubble%20">over $5 trillion in market value was lost</a> in the crash between 2000&ndash;2002. The following years from 2000&ndash;2009 became known as &quot;the lost decade&quot; as stock market returns were unprecedentedly low.</p> <h2>U.S. Real Estate in 2007</h2> <p>Housing prices skyrocketed in the early part of this century and it seemed that prices would never level off. Around this time I had a marketing professor ask his class of graduate students to raise their hands if they owned a home. &quot;If your hand isn't raised,&quot; he told us, &quot;you'll never own one. Prices are going up too quickly and they aren't coming down.&quot; This was pretty much what everyone thought about homeownership at the time.</p> <p>The overinflation of the housing market became even more evident in 2005 when then-Fed chairman Alan Greenspan said that &quot;at a minimum, there's a little 'froth' (in the U.S. housing market)&hellip; it's hard not to see that there are a lot of local bubbles.&quot;</p> <h3>How the Housing Boom Ended</h3> <p>Housing prices peaked in 2006 before a dramatic drop in the market left many homeowners owning homes that were worth far more than they had paid. In 2008, the Case-Shiller home price index reported its <a href="http://en.wikipedia.org/wiki/Real_estate_bubble%20">largest price drop in history</a>. Many experts believe the burst housing bubble was the primary cause of the 2007&ndash;2009 U.S. recession. By the end of 2010, 23.1% of all U.S. homeowners held negative equity in their homes. (See also: <a href="http://www.wisebread.com/six-options-if-youre-underwater-on-your-mortgage?ref=seealso">6 Options if You're Underwater On Your Mortgage</a>)</p> <h2>Avoiding the Bubble</h2> <p>It might be tempting to try to cash-in on an inflating bubble, but it's impossible to predict how any one investment will perform over time. Those who try inevitably lose. Don't risk losing all your assets in the next best thing. Take the advice of the overwhelming majority of wealth managers and create a diversified portfolio strategy, and <a href="http://www.wisebread.com/the-basics-of-asset-allocation">rebalance your mix of stocks and bonds often</a>. Check out <a href="http://www.wisebread.com/the-basics-of-asset-allocation">The Basics of Asset Allocation</a> for a primer.</p> <p><em>Have you ever lost money on tech stocks, beanie babies, your home, or another market bubble? How did that loss affect your investment strategy? Tell us about it in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/think-the-housing-bubble-was-bad-check-out-these-other-crazy-investment-bubbles">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-does-the-fannie-mae-and-freddie-mac-bailout-affect-you">How does the Fannie Mae and Freddie Mac bailout affect 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/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-3 views-row-odd"> <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-4 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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From Inflation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Investment Economy investing money real estate Wed, 11 Jun 2014 21:06:39 +0000 Alaina Tweddale 1142403 at http://www.wisebread.com Real Estate Investing Is Cheaper and Easier Than You Think http://www.wisebread.com/real-estate-investing-is-cheaper-and-easier-than-you-think <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/real-estate-investing-is-cheaper-and-easier-than-you-think" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house-1786170-small.jpg" alt="house" title="house" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Real estate often seems to be the &quot;ugly stepchild&quot; of the personal finance community.</p> <p>Most individuals understand that there is something there, but don&#39;t talk about it because it appears mysterious, complicated, and only for the super rich. However, I believe real estate investing can be used by anyone looking to broaden their financial outlook and can add significant potential for building wealth to their plans. (See also: <a href="http://www.wisebread.com/5-investing-basics-that-can-make-you-rich?ref=seealso">5 Investing Basics</a>)</p> <ul> <li>It&#39;s not just for the rich.<br /> &nbsp;</li> <li>It&#39;s not just for the old.<br /> &nbsp;</li> <li>It&#39;s not just for the risky.</li> </ul> <p>Real estate investing can be right <em>for you, now</em>. It can take years off your day job, add thousands to your net worth, and be a lot of fun. This post is going to explore the basic process for getting involved with real estate investing and hopefully, will take some of the mystery away so you can see real estate for what it is: an opportunity.</p> <h2>Why Invest in Real Estate?</h2> <p>First, let&#39;s talk about why you should even get involved with real estate in the first place. For me, there are several key reasons.</p> <h3>1. Leverage Helps</h3> <p>Remember as a child when you played on the see-saw and you discovered that by sitting further back or closer to the center, you could affect how much weight you could lift? (Am I the only one with that memory?) Or perhaps you&#39;ve heard the famous quote from Archimedes who said, <em>&quot;Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.&quot;</em></p> <p>The point is, leverage is the ability to use a small amount of force to move a much larger object. In real estate, the same principle is true in terms of cash. By using just a small amount of cash (a down payment) you can control and reap the benefits (and the risks) of an entire property. In other words &mdash; if you wanted to buy $100,000 worth of gold, you would need to have $100,000. However, you can buy $100,000 worth of real estate with far less than $100,000 &mdash; sometimes as little as nothing down.</p> <h3>2. Investor Control</h3> <p>Second, I love real estate investing because it&#39;s an asset class that I can control. When Google, Apple, or one of a million other stocks go up or down, there is little I can do about it but buy or sell. I have practically no say in how that stock actually moves. However, I fully control my real estate investments and the success or failure of that investment is on me &mdash; not a board of directors I have never met. (See also: <a href="http://www.wisebread.com/4-quick-ways-to-decide-if-a-company-is-worth-your-investment?ref=seealso">Quick Ways to Know If You Should Invest in a Company</a>)</p> <h3>3. Investment Variety</h3> <p>There are a lot of different ways you can invest in real estate, which we&#39;ll cover more specifically in a moment. The benefit of this is that you will be able to find an investment strategy that works for you, that will fit your personality, and which will work within your time schedule. There is an absurd amount of variety within real estate, which makes it even more fun to deal with.</p> <h3>4. It&#39;s a People&#39;s Game</h3> <p>Yes, there are avenues to invest in real estate on paper only &mdash; but I love the diversity of it. I&#39;m not just looking at numbers on a page &mdash; I&#39;m looking at real people, real money, real life.</p> <h3>5. Profit Today and Tomorrow</h3> <p>Finally, one of my favorite aspects of real estate investing is that when structured correctly, real estate can boost your checking account both now and in the future.</p> <h2>How Is Money Made With Real Estate Investing?</h2> <p>Asking this question is a bit like asking &quot;how do Americans make money?&quot; There are numerous different avenues to create wealth and income with real estate, and as I mentioned earlier &mdash; much of it depends on your personality and the way you want to run your investments. However, the following four streams of wealth are the most popular methods you&#39;ll see today.</p> <h3>1. Cash Flow</h3> <p>Cash flow is the income that is left in your bank account after <em>all</em> the bills have been paid. This is the profit you make each and every month from your rental portfolio. For example, if the rent on a property was $1,000 per month, and all the bills came to $800 &mdash; your cash flow would be $200 per month. It&#39;s basic addition and subtraction, but this one concept can change lives. Imagine receiving $200 per month in cash flow. Pretty great, but not life-changing in any regard. However, imagine receiving $200 per month per unit in cash flow. Suddenly, the picture changes. (See also: <a href="http://www.wisebread.com/should-you-become-a-landlord-instead-of-selling-your-home?ref=seealso">Should You Become a Landlord?</a>)</p> <ul> <li>What if you bought two rental houses?<br /> &nbsp;</li> <li>What if you bought a fourplex?<br /> &nbsp;</li> <li>What if you bought a 100 unit apartment building?</li> </ul> <p>Suddenly, we&#39;re talking about some pretty serious dough here! Obviously, most people don&#39;t jump from owning nothing to owning a 100 unit apartment complex, but the math is the same no matter the scale of the property.</p> <p>To top it all off &mdash; remember the concept of leverage from earlier? You don&#39;t need millions of dollars to start making monthly cash flow from real estate investing, when you have the right leverage applied. And don&#39;t get me started on how powerful &quot;compound interest&quot; is when you start to recycle this cash flow back into more investments!</p> <h3>2. Appreciation</h3> <p>The second way people build wealth in real estate is through appreciation &mdash; the rising of property values. In the past, I believe investors placed far too much emphasis on appreciation and not enough on cash flow, so when the real estate market collapsed several years ago, a lot of people lost their shirts.</p> <p>However, when you combine the <em>potential</em> for appreciation with the stability of great cash flow, you are pulling out a double barreled shotgun that can do some awesome things. Imagine holding on to your property, which is providing $200 per month in cash flow, until the market doubles in value. It might take 5 years, it might take 10 years, it might take 20 years. The point is &mdash; you are okay either way and you are building wealth every month. Now, appreciation isn&#39;t guaranteed, but over time, we can assume that in a great number of cases, you&#39;ll see some kind of positive appreciation unless the market you&#39;re investing in is severely depressed. (See also: <a href="http://www.wisebread.com/8-ways-to-boost-your-neighborhood-and-your-homes-value?ref=seealso">Ways to Boost Your Home&#39;s Value</a>)</p> <p>Furthermore, each and every month you hold onto the property, your loan balance decreases, so in essence &mdash; your tenants are paying down the mortgage for you automatically. If nothing else, in thirty years (or less, depending on how long your mortgage was for) you&#39;ll own the property free and clear!</p> <h3>3. Flipping</h3> <p>If you&#39;ve ever watched one of the &quot;flipping&quot; TV shows, you&#39;ll recognize this strategy. House flipping is the process of buying a distressed property, rehabbing it, and reselling it &mdash; hopefully making a profit on the difference. Flipping can be one of the more risky ways to invest in real estate but with some of the highest potential for financial reward. Although flipping is more closely associated with the &quot;buy low, sell high&quot; model of a retail shopping store, many of the same real estate investing principles are used to make a profit in this line of work.</p> <h3>4. Return on Investment</h3> <p>Up until this point, we&#39;ve dealt primarily with the more &quot;active&quot; forms of investing in real estate. However, many others choose to invest in real estate from a purely &quot;passive&quot; viewpoint, focusing instead on simply earning a good return on investment for their money. Primarily, there are two common ways to make this happen.</p> <ul> <li><strong>REITS:</strong> A REIT, or Real Estate Investment Trust, is a security that can be bought and sold like a stock, but that uses the raised funds to invest in real estate, primarily large commercial properties. REITS can invest in either property directly, or in mortgages on property that other investors own, and the best part is that by design, they are required to pay out a dividend.<br /> &nbsp;</li> <li><strong>Notes:</strong> Other investors invest in Notes (also known as &quot;paper&quot; or &quot;mortgages&quot;) to earn a solid return on investment. You may have had some experience with this in the past if you&#39;ve ever had a mortgage on your own home &quot;sold&quot; to another company. Mortgages are bought and sold all the time, though the borrowers seldom recognize this because it doesn&#39;t affect them.</li> </ul> <h2>Making a Plan</h2> <p>Let&#39;s move from the theory and jump into some of the practical ways you can get started investing in real estate. Although you may be excited to jump in and start buying property, the first step is actually to sit back, relax, and make a plan.</p> <p>A plan is like a road map &mdash; it tells you the best way to get from A to B and how to avoid the dead ends, tourist traps, and potholes.</p> <h3>1. Get Educated</h3> <p>Step one in creating a road map begins with gaining a solid education on what you want to do. I&#39;m not advocating spending thousands of dollars to go to some special school or training program, but at least spend some time reading real estate books, listening to real estate investing podcasts, or chatting with other real estate investors. By sinking into the education, you will create a solid foundation to build upon. I&#39;m staunchly opposed to buying the latest get rich quick manual or joining some expensive bootcamp or course from the guru of the hour, however. There are plenty of great ways to learn real estate without breaking the bank &mdash; do your homework and you&#39;ll find them. (See also: <a href="http://www.wisebread.com/real-estate-terms?ref=seealso">21 Real Estate Terms You Need to Know</a>)</p> <h3>2. Choose an Investment Type</h3> <p>Step two in your plan is deciding what kind of investment you want to buy. There are numerous different choices you can pick from, including:</p> <ul> <li>Vacant Land<br /> &nbsp;</li> <li>Single Family Homes<br /> &nbsp;</li> <li>Small Multifamily Properties<br /> &nbsp;</li> <li>Large Multifamily Properties<br /> &nbsp;</li> <li>Commercial Real Estate<br /> &nbsp;</li> <li>Mobile Homes<br /> &nbsp;</li> <li>Notes/Paper/Mortgages<br /> &nbsp;</li> <li>...and more.</li> </ul> <p>The more time you spend educating yourself on the different types of real estate, the more you&#39;ll find yourself drawn to certain types that fit your personality, time schedule, and checkbook. (See also: <a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy?ref=seealso">How to Evaluate a Neighborhood</a>)</p> <h3>3. Determine Your Goal</h3> <p>Finally, look at the place you want to arrive at. Is it a million dollars in the bank? $10,000 per month in cash flow by the time you retire? Whatever your goals are, write them down. Then, simply work backward, using the knowledge you gained from your education to determine what you need to do to get there.</p> <p>For example, if your goal is $10,000 per month in passive income in the next twenty years &mdash; and your plan is to buy single family homes that cash flow $200 per month, how many houses do you need? How many is that per year? How much down payment will that require each year?</p> <p>To learn more about getting started with real estate investing, check out <a href="http://www.biggerpockets.com/real-estate-investing">The Ultimate Beginner&#39;s Guide to Real Estate Investing</a> that we put out earlier this year.</p> <p>Real estate investing can have a tremendous impact on your financial future if you take the time needed to learn how to best get started. Whether you have millions in the bank or just getting started &mdash; I believe real estate investing can and should be a significant part of your portfolio. Use this post as a springboard to your education.</p> <p>The more you learn about real estate, the more you&#39;ll see it&#39;s not the ugly stepchild of personal finance, it just might be your new best friend.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>Joshua Dorkin is the Founder and CEO of <a href="http://www.biggerpockets.com/">BiggerPockets.com</a>, the real estate investing social network, marketplace, and information hub, and is the host of the popular <a href="http://www.biggerpockets.com/podcast">BiggerPockets Podcast</a>. Josh built BiggerPockets to help find answers for his own real estate investing questions, and in the process has helped millions of others.</p> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joshua-dorkin">Joshua Dorkin</a> of <a href="http://www.wisebread.com/real-estate-investing-is-cheaper-and-easier-than-you-think">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/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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-are-pricey-home-upgrades-really-worth">How Much Are Pricey Home Upgrades Really Worth?</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/think-the-housing-bubble-was-bad-check-out-these-other-crazy-investment-bubbles">Think the Housing Bubble Was Bad? Check Out These Other Crazy Investment Bubbles</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/road-to-becoming-a-rich-idiot">Road To Becoming A Rich Idiot</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing income property investing real estate real estate investing Thu, 06 Feb 2014 11:24:42 +0000 Joshua Dorkin 1123795 at http://www.wisebread.com