investments http://www.wisebread.com/taxonomy/term/3930/all en-US When Location Isn't King: How to Choose Income Rental Property http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-location-isnt-king-how-to-choose-income-rental-property" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_moving_house_000057031510.jpg" alt="Woman learning how to choose an income rental property" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We've all heard the expression many times: &quot;When it comes to making a home-buying decision, the three most important considerations are location, location, location.&quot; But does that same rule apply to <a href="http://www.wisebread.com/turn-your-home-into-a-rental-in-9-easy-steps">rental properties as an investment</a>? Not necessarily. To illustrate, I'll provide an example from my storied past &mdash; in this case, the recent past.</p> <p>About five years ago I spent time looking at rental properties along the New Jersey shore. Over time I narrowed my focus to two neighboring towns &mdash; let's call them &quot;Poshtown&quot; and &quot;Middleville.&quot; Poshtown is a beautiful upscale community with quaint shops, large lots, and manicured lawns. Next door, Middleville is more of a mixed bag, with some very attractive sections, but also other areas crowded with seasonal rental properties often in need of some TLC.</p> <p>Next, I crunched the numbers. I gathered estimates of rental income and expenses for dozens of multi-family units listed for sale in both towns. Then I ranked each property from best to worst based on its monthly cash flow. Properties with the most positive monthly cash flow after all expenses rose to the top of the list. The following chart shows the highest ranked property in each town based on its estimated monthly cash flow:</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202015-12-18%20at%204.57.15%20PM_1.png" width="605" height="451" alt="" />&nbsp;</p> <h2>Why Cash Flow Is King</h2> <p>As you can see, the winner by far was a Middleville property with<em> positive</em> cash flow of $640 per month. By contrast, estimated cash flow for the highest ranked property in Poshtown was negative $1,365 per month. Adding to the rout, there were eight additional properties in Middleville with higher rankings (more positive monthly cash flow) than the highest ranked property in Poshtown.</p> <p>Why were the numbers stacked so heavily against Poshtown? The town's exclusivity added such a high premium to its home prices that rents couldn't make up the difference. Poshtown was a better location, but Middleville was a better investment.</p> <p>The lesson? For rental properties it's all about cash flow, cash flow, cash flow!</p> <h2>Other Factors Worth Considering</h2> <p>Alright, but surely &quot;location&quot; must be the second most important consideration, right? Sorry to disappoint, but in my experience the answer is still no. That honor goes to&hellip;condition, condition, condition. Here's why: If two properties have the same monthly cash flow at the time of purchase, but one requires tens of thousands of dollars in repairs while the other doesn't, then repair costs for the run-down property translate to more negative cash flow. Again, it gets back to the cash flow.</p> <p>Of course, there are other factors to seriously consider when looking into rental properties, and some of them aren't financial. For example, are you handy with repairs and making sure they're done in a timely manner? Are you willing to interrupt your evenings and weekends, even vacations, in order to address property issues? Perhaps most importantly, do you think you could effectively choose tenants and deal with them on a regular basis? If not, then becoming a landlord might not work for you.</p> <p>Before leaving this topic, I'd like to make one more point to illustrate the value of crunching the numbers prior to making a rental property purchase decision. This will require taking a look at two other properties, a $250,000 two-family house and a $150,000 condominium. I learned this lesson years ago when we purchased our first condo rental.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202015-12-18%20at%204.56.49%20PM_0.png" width="605" height="448" alt="" /></p> <p>In the example above, monthly cash flow at the time of purchase for the two-family is slightly negative and would flip to a positive $1,000 after paying off the mortgage. But notice how negative the condo's cash flow is. It loses $650 per month. Even after paying off the mortgage, which would free up $645, the best you could hope for is break-even cash flow. That's a red flag. I wouldn't buy it.</p> <p>This comparison illustrates the importance of two &quot;all other things equal&quot; factors in determining the attractiveness of rental properties. First, all other things equal, properties with fixed monthly association and/or maintenance fees are more challenging to turn into positive cash flow than those without. Condos, townhomes, and other properties governed by an association typically charge homeowners in the community such fees. These often add up to hundreds of dollars a month,<em> every</em> month.</p> <p>The second factor is, all other things equal, more rental units in a property is better than fewer. You are more likely to achieve positive monthly cash flow with a two-family than a one-family. And a three-family will usually do better than a two-family. Why? Because each additional unit brings in additional income, but not proportionately higher expenses. For example, the price of a three-family (and therefore its monthly mortgage payment) is rarely three times higher than that of a single family on the same lot. Also, property taxes and insurance won't be three times higher for a three-family than a one-family. Nor would monthly maintenance and repair costs.</p> <p>As you can see, rental properties have a different set of rules than those for a single family property used as your primary residence. And the most important of these rules is &mdash; you guessed it: cash flow, cash flow, cash flow!</p> <p><em>Have you considered investing in rental property?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property">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/23-hidden-costs-of-buying-an-old-house">23 Hidden Costs of Buying an Old House</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-9-most-important-lessons-i-learned-about-money-when-i-became-a-landlord">The 9 Most Important Lessons I Learned About Money When I Became a Landlord</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-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</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/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</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-times-you-shouldnt-rush-to-pay-off-your-mortgage">5 Times You Shouldn&#039;t Rush to Pay Off Your Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cash flow expenses investments location rental properties Tue, 22 Dec 2015 14:00:07 +0000 Keith Whelan 1623601 at http://www.wisebread.com These 13 Numbers Are the Keys to Understanding Your Finances http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/these-13-numbers-are-the-keys-to-understanding-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_thinking_money_000059289248.jpg" alt="Woman using 13 numbers to understand her finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Understanding a few basic numbers can give you a good picture of your financial health and help you plan your future. You may have seen these terms mentioned in personal finance articles and in the news. Learn what these numbers mean and how to use them to improve your money situation.</p> <h2>1. Net Worth</h2> <p>Net worth is the most important measure of your overall financial health. The calculation of net worth is simple &mdash; in short, subtract everything you owe from everything you have:</p> <p><em>Net Worth = Total Assets - Total Liabilities</em></p> <p>Assets include all property you own (including cars, a home, etc.), savings, investments, and the money in your checking account.</p> <p>Liabilities include credit card debt, student loan balances, mortgage balance, auto loan balances, and other debt. It is possible to have negative net worth if your liabilities exceed your assets &mdash; this is a common situation for new college graduates who have student loan debt and few assets, for example.</p> <p>There are two ways to improve your net worth: Increase your assets, or reduce your debt. Do both simultaneously, and you'll be on your way to improving your financial health quickly.</p> <h2>2. Home Equity</h2> <p>Home equity is a measure of how much of your home you own based on its current value, including improvements and appreciation. Here's how to calculate your home equity:</p> <p><em>Home Equity = Current Market Value of Your Home - Mortgage Balance</em></p> <p>You can see that the calculation of home equity does not include the price you paid for your house. Home equity depends only on the current market value of your home &mdash; in other words, how much would it sell for today?</p> <p>As with net worth, home equity can also be negative in some situations. If your home value declines to less than your mortgage balance, you have negative home equity. This is also known as an &quot;underwater mortgage.&quot;</p> <p>A great way to increase home equity is by doing your own home improvement projects and repairs that increase the value of your home by more than the cost of doing the improvements.</p> <h2>3. Gross Income</h2> <p>Gross income is your total income before taxes and withholdings. If you are an employee, taxes and withholdings are taken out before you get each paycheck. You can find your gross income on your paystub.</p> <p>Most salary offers and salary statistics are given in terms of gross income. This is also the number that you report on income tax forms. Gross income can be confusing for budget planning, since you'll never really have this much money to spend. Use your <em>net income</em> instead.</p> <h2>4. Net Income</h2> <p>Your net income is how much money you get after taxes and withholdings are taken out. This is an important number because this is how much money you have available to work with to pay bills and to save and invest.</p> <h2>5. Market Salary</h2> <p>Market salary is how much you are worth in the labor market, depending largely upon your length of job experience, education, and location. Your market salary may not be equal to your actual salary if you are overpaid or underpaid. You can find your estimated market salary on survey websites (such as Salary.com).</p> <p>It is useful to know your market salary to bargain for a raise or to know when it would be worthwhile to look for a higher paying job.</p> <h2>6. Monthly Expenses (Burn Rate)</h2> <p>Monthly expenses (burn rate) is one of the most important financial numbers, and one that you have a lot of control over. This is the total of your expenses over a month, including housing, food, clothing, and transportation.</p> <p>Your burn rate is the amount you are actually spending each month, and there is always room to reduce this number to leave you with more money available to pay down debt or invest.</p> <h2>7. Investment Balance</h2> <p>Good for you if you are regularly contributing to investment accounts. Your investment balance is an important number since this will largely determine if and when you will be able to retire. Check it regularly to determine whether your investment strategy is meeting expectations.</p> <h2>8. Dow Jones Industrial Average (DJIA)</h2> <p>The Dow Jones Industrial Average is the stock market value that is most often reported in the news. This is calculated based on the value of a handful of large company stock prices and is currently around 18,000. The DJIA provides a general indication of the stock market's overall valuation and performance, and may give you a rough indication of how your stock portfolio is performing (assuming it's broadly diversified).</p> <h2>9. Cash Balance</h2> <p>Net worth does not reflect how much of your assets are liquid. For example, if all of your assets were invested in land holdings, you might have a hard time getting cash in a timely manner to buy food or pay your real estate taxes. Access to cash and other liquid assets (assets that can be sold rapidly to get cash) is important to be able to pay expenses.</p> <p>When I ran a small business, I learned that the three most important rules for success were:</p> <ol> <li>Never run out of cash;</li> <li>Never run out of cash; and</li> <li>Never run out of cash.</li> </ol> <p>These three rules apply to personal finance, as well. Make sure to have some cash available at all times to cover expenses that come up.</p> <h2>10. Emergency Fund Balance</h2> <p>Building an emergency fund is a step that many financial planners recommend for people trying to get out of debt. Putting cash into an emergency fund provides a cushion against using credit cards to cover unexpected bills. This practice also establishes the habit of saving money from every paycheck instead of spending it all.</p> <p>How much money do you have available to handle an emergency without running up debt? Experts recommend a minimum of three to six months worth of living expenses.</p> <h2>11. Credit Card Balance and Interest Rate</h2> <p>Many households carry a credit card balance. It is important to keep track of all debt, but credit card debt is especially important, since it usually carries the highest interest rates of any debt, and since it is easy to increase your debt without noticing.</p> <p>If you are paying a high interest rate on your credit card debt, save money by making a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">balance transfer to a card with a lower interest rate</a>. Try to reduce expenses so you will be able to pay off credit card balances faster. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=seealso">Best 0% Balance Transfer Credit Cards</a>)</p> <h2>12. Monthly Nut</h2> <p>I encountered this unusual term in an entrepreneurship course back in my college days. Your monthly nut is the <em>minimum </em>amount of money you would need to make it through a month. Your monthly nut includes basic housing, minimal food, and other essential expenses after unnecessary spending is eliminated.</p> <p>Your monthly nut is an important number to understand when you are planning to use as much of your income as possible to meet a goal, such as starting a business or getting out of debt as quickly as possible.</p> <h2>13. Inflation Rate</h2> <p>If you want to have enough money to buy the things you need in the future and throughout retirement, you'll need to account for the effects of inflation. Prices tend to rise over time, reducing the purchasing power of money in the future. Historical average for inflation rate is around 3%, but inflation rates in recent decades have varied from over 10% down to the current inflation rate of nearly 0%.</p> <p>For retirement planning, you will want to estimate your expenses, and then scale the expenses up based on the expected effect of inflation over the years.</p> <p><em>What key numbers do you track to monitor your personal finance health?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr. Penny Pincher</a> of <a href="http://www.wisebread.com/these-13-numbers-are-the-keys-to-understanding-your-finances">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/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small Retirement Savings</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</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/when-location-isnt-king-how-to-choose-income-rental-property">When Location Isn&#039;t King: How to Choose Income Rental Property</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance expenses financial health income investments net worth Wed, 09 Dec 2015 18:00:16 +0000 Dr. Penny Pincher 1618971 at http://www.wisebread.com Do You Need a Financial Planner? http://www.wisebread.com/do-you-need-a-financial-planner <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/do-you-need-a-financial-planner" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_meeting_accountant_000016565687.jpg" alt="Couple figuring out if they need a financial planner" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you have questions regarding your finances, investments, taxes, or retirement, speaking with a financial planner can provide the answers you need. A certified financial planner (CFP) can help you organize your personal finances and establish a retirement plan. They can also help you make sense of financial problems, whenever they may arise.</p> <p>Most respectable planners will advise you if they think you can handle your finances on your own. However, you can't always count on them to turn you away, which is why we've covered some of the top reasons to hire a financial planner, as well as what to expect once you hire them.</p> <h2>1. You Need to Change Your Retirement Plan</h2> <p>Whether you are <a href="http://www.wisebread.com/6-ways-to-guarantee-income-in-retirement">changing your retirement plan</a>, or haven't started planning at all yet, a financial planner can assist. They can help you develop a plan for financial security both now and into retirement. If you need to save more, they can help you develop a solid plan to increase your savings and contributions. That said, many people are comfortable planning for their own retirement, and if you're investment-savvy enough to do so on your own, a financial planner may be unnecessary.</p> <h2>2. You Need Financial or Investment Advice</h2> <p>If you have trouble organizing your finances and payments, a planner can help you get a grip on it. A financial planner can provide you with investment advice and explain the pros and cons of various investments options. They can also help you develop a strategy for down markets to better protect your money before retirement.</p> <p>All forms of investments and retirement accounts have associated management fees and expenses. If you are unsure of what you're paying for your investments, it's time to speak with a financial advisor. They can explain what your funds cost and can determine if you are spending more than necessary.</p> <h2>3. You Receive a Big Tax Refund Every Year</h2> <p>If you consistently receive a tax refund, you should speak with an adviser about what you owe and what you should be paying. While it may be nice to receive a tax refund at the end of the year, you won't gain any interest on the money when it's in Uncle Sam's possession. Instead, it would benefit you more to receive that money throughout the year. Your planner can help you adjust your tax withholdings so that you aren't overpaying throughout the year.</p> <h2>4. You Got Married</h2> <p>Determining which debts to combine, which debts to pay off, and what you need to do to reach your financial goals as a couple can be very difficult (especially for the newly married). Instead, let a financial advisor deal with the finances and help you organize your spending, debts, and assets. They will help you determine which strategy is right for your taxes, investments, benefits, bank accounts, and personal finances. They can even help you determine what your spouse's retirement plan may be able to offer you.</p> <h2>5. You Are Planning a Big Purchase or Making a Big Change</h2> <p>If you are planning on purchasing a home, or making another large purchase, a professional can help you determine how much you can afford to spend. They can then help you develop a plan to meet your financial goals and afford the home or purchase of your dreams. They can also help you prepare for life's big events, such as an upcoming baby, career change, or new car.</p> <h2>6. You Own a Business</h2> <p>Owning and running a business can be very stressful. Having a planner on your side can help you organize your business expenses and taxes, employee benefits, business investments, and any other financial information related to your business. If you will be buying, selling, or passing on a family business, a financial planner can make sure everything progresses smoothly.</p> <h2>What You Can Expect</h2> <p>One thing that a financial planner cannot provide is a guarantee. All they can do is help you get your financial life in order; they can't make miracles happen. What they can do is help you see the big picture and find ways to create more wealth over time, such as by capitalizing on compound interest.</p> <p>After getting to know you and your financial goals, your planner can help you create a written investment plan to reach them. They will assess all your current assets, liabilities, income, and more to develop a comprehensive plan that you can actually stick to. They can also advise you if you are paying too much for something, saving you even more money over time.</p> <h3>Monitoring Your Progress</h3> <p>Over time, your planner will continue to periodically monitor your progress to ensure you are still on track to meet your financial goals today, tomorrow, and into retirement. They will likely be your trusted financial partner for life because they can help you make wise, informed choices before you make any large financial decisions.</p> <h3>Finding an Advisor</h3> <p>If you can get a referral from a colleague, lawyer, or Certified Public Accountant (CPA), this is usually a good place to start your search for a financial planner. You can also search the <a href="http://www.plannersearch.org/Pages/home.aspx">Financial Planning Association (FPA)</a> and the <a href="http://www.napfa.org/">National Association of Personal Financial Advisors (NAPFA)</a> for a list of potential advisors.</p> <p>There are a number of types of financial planners available to you, including the following:</p> <ul> <li>CFP: Certified financial planners can help you with things like insurance, investments, taxes, retirement, employee benefits, and estate planning.<br /> &nbsp;</li> <li>ChFC: Chartered financial consultants specialize in finance and investing.<br /> &nbsp;</li> <li>CLU: Chartered life underwriters specialize in the finance industry.<br /> &nbsp;</li> <li>CFA: Chartered financial analysts specialize in economics, accounting, portfolio management, and security analysis.<br /> &nbsp;</li> <li>CPA: Certified public accountants specialize in tax issues.</li> </ul> <p>In most cases, a CFP is the right professional for the job, unless you have unusual financial or investment needs.</p> <h3>What Do They Charge?</h3> <p>Each advisor is different and will charge according to the following three basic billing structures:</p> <ul> <li>Fee-only planners: They are paid for their advice only.<br /> &nbsp;</li> <li>Fee-based planners: They earn fees for their advice and commission on the products they sell.<br /> &nbsp;</li> <li>Commission-based planners: They make commission on the products they sell.</li> </ul> <p>Some planners will charge a flat fee, hourly rate, or a percentage of what they are managing. According to CNNMoney, the average financial planner will charge anywhere from $100&ndash;$400 per hour. They may also charge a percentage of your assets if they also manage your money, usually between 0.5%&ndash;2%. If you only need a portfolio checkup every once in a while, then you likely only need a few hours, on a fee-only pay structure. It wouldn't make sense to continue paying an ongoing percentage if you don't need ongoing help.</p> <h3>Can You Do It Alone?</h3> <p>You may not need a financial advisor if you feel confident managing your finances, investments, and retirement accounts on your own. If you enjoy researching your investments and feel confident that you are monitoring your retirement plan well enough on your own, then you likely don't need an advisor.</p> <p><em>Do you have a financial planner? How have they helped you? 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/do-you-need-a-financial-planner">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-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-savings-tricks-you-havent-tried-yet">5 Savings Tricks You Haven&#039;t Tried Yet</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-cash-rich-retirement">Book review: Cash-Rich Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance accountants advisors financial planners investments retirement Fri, 20 Nov 2015 14:00:27 +0000 Andrea Cannon 1614966 at http://www.wisebread.com 15 Ways to Make Money Outside Your Day Job http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/15-ways-to-make-money-outside-your-day-job" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000023241641.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Extra money is great. At a minimum, extra income is more change in your pocket. Beyond that, it can diversify your income sources and make your finances less vulnerable to a disruption.</p> <p>There are many types of non-salary income, but one way they're often divided up is passive versus non-passive. Consider these 12 sources of additional income.</p> <h2>Passive Income</h2> <p>Passive income tends to be investment income: Money you get for letting someone use your money or your stuff. Here are the classic categories of passive income. (By and large, this whole category is only available if you have money to invest.)</p> <h3>1. Interest</h3> <p>Interest is money you get from something like a bond, CD, or savings account, where someone pays you to use your money.</p> <p>Not so long ago &mdash; before the financial crisis &mdash; there were plenty of reasonably safe interest-bearing investments that paid 3%, 4%, or even 5% over inflation. Those days are long gone. Now, CDs or bonds can barely beat inflation, and that's only if you're willing to tie your money up for a long time. Still, interest income can serve as a secondary income stream, and the opportunities are likely to get better in the near the future. (So, be careful about locking up your money for the long term at current rates.)</p> <h3>2. Dividends</h3> <p>Dividends are your share of the income earned by companies in which you own stock, and are also earned from baskets of investments that hold stocks, such as ETFs or mutual funds. Unlike the interest earned on a bond or CD, dividends can rise or fall unpredictably, depending on the success of the firm or the fund. Although some risky companies can pay high dividends, stable companies tend to offer modest returns, typically under 5%.</p> <h3>3. Rents</h3> <p>In theory, rents can be pure investment income, like interest and dividends, but in practice, being a landlord is more like taking on a second job &mdash; you have to find tenants, accept rent payments, keep the building maintained, deal with broken appliances, and so on. You can hire a management company to do that work, but that's an extra expense &mdash; and the income still isn't purely passive, because you still have the work of managing your relationship with the management company.</p> <p>Still, rental income can be an incredibly flexible second income stream. Airbnb, RelayRides, and similar companies now enable individuals to rent out things like spare bedrooms, vehicles not in use, and earn extra income with less effort.</p> <h3>4. Royalties</h3> <p>Royalties are money that you get for letting someone make more limited use of something that you own. If an oil company operates a well on your land, they'll pay royalties. If a publisher sells a book that you wrote, they'll pay royalties. The possibilities are vast, and in essence include anything people can use &mdash; land, books, photos, patents, trademarks, etc.</p> <p>It's worth noting that most people who sit down to write a book don't end up getting any significant income from it. That's probably even more true of people who sit down to invent something. Still, books, online stock photography, and even less-successful inventions can all generate extra income and diversify your earnings.</p> <h2>Non-Passive Income</h2> <p>Non-passive means you have to get out there and hustle up this extra income in your spare time. Some take a lot of hustle.</p> <h3>5. Working Another Regular Job</h3> <p>For someone working for wages, a second (or third or fourth) job is a classic source of extra income. If you're working for a salary, you'd probably be breaking your employment agreement to work another job, but there are ways to work for pay without breaking the rules. Check with your employer to determine your company's specific policies.</p> <h3>6. Working at an Irregular Job</h3> <p>Not all jobs require a regular time commitment. Some can be done on an ad-hoc fashion, such as:</p> <ul> <li>Casual labor, like a handyman, house painter, gardener, house cleaner, or dog walker.<br /> &nbsp;</li> <li>Freelance work (usually skilled or semiskilled labor done outside the range of regular employment), such as a web designer, photographer, adult education instructor, bicycle messenger, etc. Many occupations that fall into this category require special training, certification, or even licensing.<br /> &nbsp;</li> <li>Seasonal work, such as a department store Santa, sheep shearer, etc.</li> </ul> <h3>7. Service Something That Makes Money</h3> <p>The classic option here is a vending machine. Your investment is modest &mdash; the cost of the machine, and the cost to stock the machine the first time. Your labor is modest &mdash; visiting the machine to restock it and remove the cash.</p> <p>Vending machines used to be a great way to make a modest amount of money, especially if you knew someone who would let you put a machine in a reasonably high-traffic area either for free, or for a piece of the action. You could start small and then buy more machines. Back in the day when coin-operated video games were a thing there wasn't even any restocking needed &mdash; you just went as often as necessary to take out the money.</p> <h3>8. Running a Small Business</h3> <p>Running a small business can be a great way to make money from a source other than your salary. The range of options for small business are infinite. Just for starters, virtually all the &quot;irregular job&quot; items from the previous section could be just as easily arranged as a small business. Instead of painting houses or walking dogs, you start a house painting or dog walking business. Plus, running a business may confer certain tax advantages (deductions, anyone?) which can make it an even healthier secondary income source. The next two ideas can also be structured as small businesses.</p> <h3>9. Sell Something You Make</h3> <p>The list of things you can make and sell is endless &mdash; jellies and jams, soaps, jewelry, garden produce, baked goods, maple syrup, pottery, scarves, etc. I wrote a bit about the line between hobby and small business in my post <a href="http://www.wisebread.com/make-your-hobby-pay-its-way">Make Your Hobby Pay Its Way</a>.</p> <h3>10. Sell Copies of Something You Made</h3> <p>This is a variation on the point above about royalties. Instead of letting another company sell copies of something that you've created in return for royalties, you can sell the copies yourself.</p> <p>The classic case is self-publishing a book, but there are a lot of other possibilities that fall into this category. For example, If you know how to do something, you could create a video teaching how to do it, and then sell it on DVD.</p> <p>This option really lends itself to digital sales, because the cost of production is zero &mdash; ebooks, online video courses, phone apps, etc.</p> <p>It's tough to make much money this way, because there's so much stuff out there already, often for free. Sales are likely to be low, and unless you have a very narrow, very focused niche, you're going to face a lot of competition.</p> <p>Still, this can be a win, especially if you want to create something for your own reasons &mdash; a phone app that does something you want a phone app to do, a drawing that speaks to you, etc. If you're making the thing because you want to, the extra effort to sell copies is quite small, and will probably bring in a little money.</p> <h3>11. Sell Something You Gather</h3> <p>There are still places where it's legal to collect things and sell them &mdash; mushrooms, pine boughs, sea shells, rocks, insects, etc. Success requires access to a place where you can collect, and usually requires more than a little skill in knowing what's worth collecting, and how to sell it.</p> <h3>12. Sell Something You Buy</h3> <p>If you can buy something cheap and sell it for more than it cost, you can make money on the markup. To make a reasonable profit, you usually have to add value in some way. The two classic ways are: Import the item, or repackage a cheap, bulky item into smaller units.</p> <p><strong>Importation</strong>: Say you find something sold overseas that you really like &mdash; a clothing item or a gadget or a tool &mdash; that just isn't a thing in the U.S. You can find the manufacturer, buy a modest quantity at wholesale, import them into the US, and sell them at a markup. Your added value is the capital to buy the stock and the effort handling the complexities of importation.</p> <p><strong>Repackaging</strong>: Almost anything is cheaper in bulk, sometimes a lot cheaper. My wife buys a brand of quilt soap that's good for washing wool. She can get it in 8-ounce bottles for $8 or $9 dollars &mdash; about $17 a pound. The stuff has a single ingredient: sodium lauryl sulfate, the detergent in baby shampoo. If you buy by the barrel, sodium lauryl sulfate costs less than $1 a pound &mdash; highly profitable, even after paying for bottles. Anybody can do the same thing with anything that's cheap in bulk but can be sold for more in reasonable quantities.</p> <h3>13. Teach a Class</h3> <p>If you have some skill &mdash; and if you also have some skill at teaching &mdash; you can make money offering classes. Where I live, people can arrange to teach classes through the park district, recreation center, the local library, YMCA, community college, and at least two different senior organizations. Many of the stores that sell arts or craft supplies also offer classes with local artists and craftspeople as teachers. And if you're adequately entrepreneurial, you don't need to teach under the auspices of some other organization at all. You can find your own students and teach out of a location of your choice.</p> <h3>14. Put Ads on a Website</h3> <p>Creating a blog or static website and putting Google Ads (or other affiliate programs) on it can generate extra income &mdash; just how much depends on the traffic and ad clicks your site generates. It's a competitive space, but if you can produce a quality site with adequate traffic, it may provide a regular source of additional income.</p> <p>If you have some sales skills, you can also market your site to individual companies and get them to buy ads for a lot more money. That's another piece of work, however. It would make your income a little less passive, because now you're a salesman on top of everything else.</p> <h3>15. Create a YouTube Channel or Podcast</h3> <p>If you like making videos, this can be a source of modest income. If making videos seems like a lot of work, you're going to quit before you make any money from Google Ads on your YouTube channel. Still, if you make videos that go viral, there's the potential to make quite a bit of money. Some YouTube stars derive significant income from their videos.</p> <p>Podcasts are a little more complex to monetize, because you don't have the option of just putting ads on the page somewhere; you actually have to include the ad in the podcast itself. On the other hand, the ads are worth more, because the listener is pretty much stuck listening to the ad from beginning to end.</p> <p>There are podcast networks that offer tools to help with creating and making them easy for listeners to find. Some of them also have ad networks, although you'd probably make more money if you did the work of selling your podcast to sponsors.</p> <p><em>How do you earn extra income?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job">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/5-new-income-streams-anyone-can-create">5 New Income Streams Anyone Can Create</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-great-side-jobs-for-extroverts">10 Great Side Jobs for Extroverts</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-to-earn-extra-cash-when-money-is-tight">9 Ways to Earn Extra Cash When Money Is Tight</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/8-truths-from-a-mystery-shopper-you-must-read-before-you-get-started">8 Truths From a Mystery Shopper You Must Read Before You Get Started</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-side-jobs-for-stay-at-home-moms-and-dads">12 Side Jobs for Stay-at-Home Moms and Dads</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income freelancing investments non-passive income passive income selling side jobs Thu, 19 Nov 2015 19:03:04 +0000 Philip Brewer 1615339 at http://www.wisebread.com Watch Out for These 5 Sneaky 401K Fees http://www.wisebread.com/watch-out-for-these-5-sneaky-401k-fees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/watch-out-for-these-5-sneaky-401k-fees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_nest_egg_000006292825.jpg" alt="Learning which 401K fees to look out for" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No matter how diligent you are at socking away money into your 401K, you could still be contributing less than you think, thanks to hidden fees and plan costs. According to a study from AARP, about three in five Americans are unaware of how much they're paying in <a href="http://assets.aarp.org/rgcenter/econ/401k-fees-awareness-11.pdf">401K plan fees</a>.</p> <p>Excessive 401K fees can eat away your returns. Let's assume that a worker invests $5,000 every year over a 35-year period in a 401K plan with an annual return of 4.9%. She would end up with $423,000 at the end of period assuming an annual fee of 0.5% of the total balance, and with $345,000 at the end of the period assuming an annual fee of 1.5% of the total balance.</p> <p>To claim back control of your retirement account, here are five 401K&nbsp;fees to look out for.</p> <h2>1. 12b-1 Fee</h2> <p>Owing its name to the Securities and Exchange Commission (SEC) Rule 12b-1, a 12b-1 fee is a charge from a mutual fund to cover marketing, distribution, and administration expenses.</p> <p>The original intent with this rule was to encourage mutual funds to invest in marketing so that more people would buy into the mutual fund. In theory, the more assets that a mutual fund can buy, the better the economies of scale. Unfortunately, the empirical evidence from the SEC shows that mutual funds with 12b-1 fees have higher expense ratios than those without those fees, and that the services rendered to earn the fees don't enhance the fund's performance.</p> <p>By law, 12b-1 fees can range between 0.25% and 1% of a fund's net assets. Given that these fees have shown no benefit to investors, you should try to choose funds that don't charge 12b-1 fees at all. If all your available investment options charge such a fee, go with the one that charges closest to the minimum 0.25%.</p> <h2>2. Redemption Fee</h2> <p>A front-end load is one of many sneaky <a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">investment fees to watch out for</a>. Front-end load funds have such a bad rap that many investment firms have started advertising no-load fund options.</p> <p>However, there can be a catch. While no-load funds won't charge you for loading shares, those funds can charge you a fee for unloading your shares too soon. Known also as an exit fee, back-end load, or contingent deferred sales charge, a redemption fee is applied to an investor that exits a fund too soon. How soon is too soon? The minimum holding period ranges from 30 days to one year, so make sure to check your fund's prospectus.</p> <p>Here are two useful rules of thumb when evaluating redemption fees:</p> <ul> <li>The average minimum holding period to avoid a redemption fee is 65 days, so avoid funds that require you to hold onto your fund much longer than that. While your nest egg should be a last resort fund, you shouldn't be penalized for accessing your money when in need.<br /> &nbsp;</li> <li>The SEC limits redemption fees to 2%. However, some funds may charge as low as 0.01%. The lower the redemption fee, the better.</li> </ul> <h2>3. Exchange Fee</h2> <p>Diversification is a useful investment strategy to lower your market risk. For example, it's generally better to split your investment into three significantly different assets than to &quot;put all your eggs in one basket.&quot; If one of your investments tanks, you still have two to fall back on.</p> <p>Before you fire up the online dashboard of your 401K and transfer money from one fund to another, check for applicable exchange fees within your retirement plan. Even worse, some 401K plans may tack on additional load and redemption fees when you exchange between funds.</p> <h2>4. Individual Service Fee</h2> <p>On top of your plan's administrative fee, your 401K may incur individual service fees related to features that you opted into. You may incur individual service fees when:</p> <ul> <li>Taking a loan from your 401K account;<br /> &nbsp;</li> <li>Executing participant investment directions;<br /> &nbsp;</li> <li>Opting for a clause to terminate a contract with your employer before the contract's expiration date; or<br /> &nbsp;</li> <li>Choosing an investment option that includes an insurance component (e.g. annuity).</li> </ul> <p>There are many other types of individual service fees. Keep in mind that some individual service fees that are paid indirectly from the investment options you have chosen may not be listed in your quarterly 401K statement.</p> <h2>5. &quot;Other&quot; Fee</h2> <p>Along with those other fees, 401K plans can have a miscellaneous fee category for listing anything that is neither a sales charge nor an account maintenance charge.</p> <p>Some examples of other fees are:</p> <ul> <li>Custodial expenses;</li> <li>Legal expenses;</li> <li>Recordkeeping expenses;</li> <li>Furnishing statement expenses;</li> <li>Toll-free telephone service fees;</li> <li>Transfer agent expenses; and</li> <li>Other administrative fees.</li> </ul> <p>Depending on the terms of your plan, another fee may be a percentage of your assets invested in the fund or a flat fee.</p> <h2>The Bottom Line</h2> <p>Do your due diligence before choosing funds within <a href="http://www.wisebread.com/7-signs-your-401k-is-underperforming">your 401K plan</a>. To get a full picture of your investment options, you need to go beyond their average returns. The two key documents that you need in order to find out more about applicable fees are the Summary Plan Description and the Annual Report.</p> <h3>Summary Plan Description (SPD)</h3> <p>Upon joining the 401K plan, you receive a copy of your SPD. You will receive an updated copy every five years if there are significant changes or every 10 years if there are no changes.</p> <h3>Annual Report (Form 5500 Series)</h3> <p>Every year you should receive a copy. If not, you can examine a free copy from the <a href="http://www.efast.dol.gov">Department of Labor</a>.</p> <p><em>Do you know what fees your 401K is charging you? Are they fair?</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/watch-out-for-these-5-sneaky-401k-fees">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-to-enjoy-retirement-if-you-havent-saved-enough">How to Enjoy Retirement If You Haven&#039;t Saved Enough</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/choosing-a-retirement-account-whats-available-and-what-s-best-for-you">Choosing a Retirement Account: What&#039;s Available, and What’s Best for You?</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-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</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-facts-millennials-should-know-about-retirement-planning">5 Facts Millennials Should Know About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-cash-rich-retirement">Book review: Cash-Rich Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) Hidden fees investments returns Mon, 28 Sep 2015 13:00:40 +0000 Damian Davila 1568872 at http://www.wisebread.com 5 Expensive Life Essentials Worth Investing In http://www.wisebread.com/5-expensive-life-essentials-worth-investing-in <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-expensive-life-essentials-worth-investing-in" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_graduate_000030222646.jpg" alt="New grad investing in expensive life essentials" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everybody loves a bargain, and there are few things in life as satisfying as getting the lowest possible price on anything you buy. Even better when it's an item that you use every single day for a long time.</p> <p>But what if that &quot;steal&quot; harms your health, causes you pain, or limits your earning potential? Here are five expensive life essentials that you shouldn't skimp on.</p> <h2>1. Right-Fit Mattress</h2> <p>Inadequate sleep has several side effects that compromise your health and may even shorten your life. Sleep disorders can put you at risk for <a href="http://www.webmd.com/sleep-disorders/excessive-sleepiness-10/10-results-sleep-loss">serious health problems</a>, including heart disease, high blood pressure, and diabetes.</p> <p>When you sleep eight hours per day that means that you spend one third of your life in bed. Your bed is by far the most important piece of furniture in your home. Take care of your body by making a worthwhile investment in mattress that is a right fit for you. However, this doesn't mean to directly go for the most expensive one.</p> <p>Here are four considerations when shopping for a mattress:</p> <ul> <ul> <li>Got neck or back pain? Avoid mattresses that are too soft or too hard.<br /> &nbsp;</li> <li>Need your head raised? Look for adjustable mattresses.<br /> &nbsp;</li> <li>Got allergies or asthma? Consider mattresses labeled hypoallergenic.<br /> &nbsp;</li> <li>Have a partner that moves around a lot? Test memory foam mattresses because they reduce motion transfer.</li> </ul> </ul> <p>Once you've <a href="http://www.wisebread.com/how-to-buy-a-mattress-in-10-minutes-or-less">decided on your top mattress picks</a>, take the time to review the warranty and refund policies. Look for at least a 10-year full warranty and a grace period to decide whether or not you want to keep the mattress. (See also: <a href="http://www.wisebread.com/the-5-best-mattresses?ref=seealso">The 5 Best Mattresses</a>)</p> <h2>2. LASIK Eye Surgery</h2> <p>When asked &quot;What expensive product is actually worth every penny?&quot; the Reddit community responded &quot;<a href="https://www.reddit.com/r/AskReddit/comments/1l97ga/what_expensive_product_is_actually_worth_every/">LASIK eye surgery</a>&quot; loud and clear. For about <a href="http://www.allaboutvision.com/visionsurgery/cost.htm">$2,073 per eye</a> (average cost in 2013), you can upgrade yourself just like in a video game.</p> <p>While LASIK eye surgery will make a considerable dent on your bank account now, consider how much money you will save over the long run. The average national <a href="http://health.costhelper.com/eyeglasses.html">cost for eyeglasses</a> is around $196. If you were to take that $196 every year and put it an 8% index fund for 30 years, that annual foregone expense could compound to a staggering $23,153.88!</p> <p>If you're wearing non-disposable contacts and don't have insurance, your annual costs can be much higher: ranging between $150 and $375 a year ($170&ndash;$400 a year for disposable contacts without insurance). Just think about how much more you could do with that extra dough!</p> <p>If you have nearsightedness, farsightedness, or astigmatism, you may be eligible for this procedure. Consult your eye doctor to determine whether or not you're eligible for LASIK eye surgery or another similar refractive procedure.</p> <h2>3. College Degree</h2> <p>Education, smeducation. Mark Zuckerberg, Bill Gates, and Steve Jobs didn't have a college degree and look what they achieved, right?</p> <p>True, but most of us can benefit from having one.</p> <p>During the 2014&ndash;2015 school year, the <a href="http://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064">average cost of tuition and fees</a> was $31,231 at private colleges, $9,139 for state residents at public colleges, and $22,958 for out-of-state residents at public colleges.</p> <p>These numbers may easily scare away many people. However, there are four powerful reasons to invest in a college education.</p> <ul> <li>More than <a href="http://www.gallup.com/poll/168386/americans-say-college-degree-leads-better-life.aspx">9 in 10 Americans </a>believe in the importance of postsecondary education.<br /> &nbsp;</li> <li>Individuals with a bachelor's degree, no matter what field, <a href="http://www.usnews.com/education/best-colleges/articles/2011/08/05/how-higher-education-affects-lifetime-salary">earn about $1 million more</a> in their lifetimes than their counterparts with only a high school diploma.<br /> &nbsp;</li> <li>Higher level degrees increase your earnings potential: a master's gets you $2.67 million more in your lifetime; a PhD, $3.25 million; and a professional degree, $3.65 million.<br /> &nbsp;</li> <li>People with at least a bachelor's degree have <a href="http://www.cdc.gov/media/releases/2012/p0516_higher_education.html">better health</a>, smaller chance to develop obesity, and higher life expectancy.</li> </ul> <p>Top-notch education is worth every penny. While you may have to settle for a more frugal lifestyle during your college years, there are several freebies that can help you out. (See also: <a href="http://www.wisebread.com/20-freebies-for-college-students?ref=seealso">20+ Freebies for College Students</a>)</p> <h2>4. Properly Fitted Bra</h2> <p>It may shock you to find such an everyday item on this list. Here's why:</p> <ul> <li>Physicians point out that poor fitting bras put <a href="http://www.dailymail.co.uk/health/article-3000486/Is-BRA-making-ill-Poorly-fitting-underwear-causes-problems-pain-heartburn-read-definitive-guide-picking-best-one-you.html">unnecessary pressure on the diaphragm</a>, affecting your breathing and potentially causing digestion problems, such as irritable bowel syndrome.<br /> &nbsp;</li> <li>Ill-fitted bras contribute to bad posture. Without proper support, breasts may pull on side and back muscles, bend the spine, and, when not corrected, cause a misaligned spine.</li> </ul> <p>Reaching for the most expensive bras at Victoria's Secret isn't the solution either. Instead, women should invest in a bra fitting done by a professional. According to the owner of a bra-fitting store in New York, about 80% of customers are wearing the <a href="http://www.health.com/health/article/0,,20411060,00.html">wrong size bra</a>. Some studies put that statistic higher at 85%.</p> <p>With bras going as low as $2.00 on Amazon, it may seem outrageous to spend $70 on a properly fitted bra. However, take it from this lady on Reddit: &quot;I look 10 pounds slimmer, my back doesn't hurt anymore, and my clothes fit better.&quot; (On that note, check out the 39,000+ community <a href="http://www.reddit.com/r/ABraThatFits">ABraThatFits</a> on Reddit; it has tons of information.)</p> <p>Let a pro help you out. Spending a minute trying out something isn't the same as spending eight hours in it.</p> <h2>5. Mechanical Keyboard</h2> <p>Talking about something that you use for eight hours (or more!) a day, let's focus now on the importance of getting a darn good keyboard.</p> <p>Programmers, journalists, college students, and secretaries all know how much it sucks to be stuck with a crappy keyboard. The solution is simple: switch to a more ergonomic and high quality mechanical keyboard.</p> <p>Unlike today's computer and laptop keyboards, mechanical keyboards use individual, high quality mechanical switches under every key. Old school programmers, early IBM and Mac users, and keyboard enthusiasts refer to the typing experience on a mechanical keyboard as the satisfying &quot;clickety-clack.&quot;</p> <p>While there are several accounts of how satisfying it's to use a mechanical keyboard, here is one that is health related. Heavy keyboard users provide testimonies that using mechanical keyboards may alleviate the pain of <a href="https://geekhack.org/index.php?topic=27940.0">repetitive strain injury</a>.</p> <p>Depending on the model, brand, and list of features, mechanical keyboards range from $50 to $300. The higher price of mechanical keyboards is due to small number of manufacturers. Some models to consider are the <a href="http://www.amazon.com/gp/product/B00S5E4KH2/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B00S5E4KH2&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=4UXDNH26RR2ZNU5C">Rosewill RK-9000</a>, the Ducky Channel, the Das Keyboard, and the <a href="http://www.amazon.com/gp/product/B00IG3GP84/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B00IG3GP84&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=6AMMTHZ7YU4TJHK2">Razer Blackwidow</a>.</p> <p>Before you drop several hundred bucks on a super expensive mechanical keyboard, start with a well-documented model. Based on customer reviews at Amazon a good starting point could be the <a href="http://www.amazon.com/Das-Keyboard-Professional-Mechanical-DASK3MKPROCLI/dp/B008PFABI8/ref=sr_1_4?s=pc&amp;ie=UTF8&amp;qid=1431476085&amp;sr=1-4">Das Keyboard Model S Professional</a>.</p> <p><em>What are other expensive life essentials worth every penny?</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/5-expensive-life-essentials-worth-investing-in">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-things-americans-were-better-at-in-the-1950s-than-today">8 Things Americans Were Better at in the 1950s Than Today</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/when-is-it-okay-to-share-your-social-security-number">When Is It Okay to Share Your Social Security Number?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-cheap-ways-to-lower-your-blood-sugar">13 Natural and Easy Ways to Lower Your Blood Sugar</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/51-uses-for-coca-cola-the-ultimate-list">51 Uses for Coca-Cola – the Ultimate List</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/16-everyday-things-you-shouldnt-be-paying-for">16 Everyday Things You Shouldn&#039;t Be Paying For</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Life Hacks essentials everyday items investments Splurging Tue, 26 May 2015 13:00:10 +0000 Damian Davila 1431131 at http://www.wisebread.com 5 Times You Shouldn't Rush to Pay Off Your Mortgage http://www.wisebread.com/5-times-you-shouldnt-rush-to-pay-off-your-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-times-you-shouldnt-rush-to-pay-off-your-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/father_daughter_000039463172.jpg" alt="Father not rushing to pay off his mortgage" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're fortunate enough to have disposable income, <a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">paying off your mortgage</a> early might seem like a smart way to spend your cash. It's definitely a better approach than wasting your money on shopping and recreation. And given how a mortgage loan can take up a third of your monthly income, getting rid of this debt lets you do other things with your cashflow. But just because you have extra cash to pay off a mortgage doesn't mean you always should.</p> <p>Here's a look at five times when you shouldn't rush to pay off your mortgage.</p> <h2>1. You'll Miss Out on Tax Advantages</h2> <p>During the first half of a 30-year mortgage, a large percentage of your mortgage payments go toward paying down the interest, so your principal balance only decreases a little from year-to-year. It's frustrating to say the least, but think twice before dumping your disposable cash on extra principal payments.</p> <p>Some people will jump at any opportunity to pay off their home sooner, but there are tax advantages to keeping a mortgage loan. If you itemize your yearly tax return, there's the option of writing off your mortgage interest payments and lowering your taxable income. This reduces the amount owed to the state and federal government, or it might result in a bigger refund. This single deduction reduces my tax liability by more than $2,000 a year.</p> <h2>2. You Don't Have Any Type of Emergency Fund</h2> <p>Everyone needs an emergency fund, period. It doesn't matter who you are or what you do, if you're a middle-income American, you're going to hit at least one rough patch in your lifetime. A six to 12-month cash reserve is your backup plan for unexpected expenses or major setbacks like a job loss. However, you might feel paying off your home takes priority over saving. Your home is your biggest investment, and naturally, you want to protect it. But ask yourself: How's your savings account looking?</p> <p>If you have plenty of cash in a rainy day fund to handle life's curveballs, paying off your house early isn't a bad plan. But if you don't have any type of emergency savings, the focus should be on building your account. Paying more toward your principal builds equity and gets you closer to owning the property outright, but this plan might backfire if you find yourself unemployed without a cushion.</p> <h2>3. You Don't Have a Solid Retirement Plan</h2> <p>A few years ago I had a conversation with a couple that was committed to paying off their 30-year mortgage early. They put every extra cent toward their mortgage, sometimes paying an extra $400 or $500 a month. Both were in their early 40s, and despite their age, neither had started saving for retirement.</p> <p>Their plan was to focus on retirement planning after paying off the house. From their point-of-view, the house was their retirement. Without a mortgage, they wouldn't need as much monthly income later in life. I understand their thinking, but there are no guarantees a plan like this will work.</p> <p>Their plan didn't take into account curveballs like long-term unemployment due to illnesses or layoffs. If for some reason they couldn't pay their mortgage, they would potentially lose their house and their equity &mdash; and essentially their retirement.</p> <p>There's nothing wrong with paying extra toward your mortgage, just make sure you're also planning for the future and saving enough for retirement.</p> <h2>4. You Have High Interest Debt</h2> <p>What you paid for your house is probably more than what you owe on credit cards, and getting rid of your biggest expense may seem like the best way to attack debt. But although we spend hundreds of thousands of dollars buying a house, average mortgage interest rates aren't as high as some credit cards'.</p> <p>Credit card debt is a never-ending battle, especially when you have a high interest rate and you're only paying your minimum. Paying off your mortgage early is an excellent goal, but don't rush. Make high-interest debt your priority. These include credit cards, personal loans, and other lines of credit. Besides, paying off these debts gives your credit score a boost. Once you have these creditors off your back, you can focus on paying off your mortgage.</p> <h2>5. You Have a Prepayment Penalty</h2> <p>Some mortgage lenders stick borrowers with a prepayment penalty, which is basically a fee for paying off their mortgages early, usually within the first five years. This penalty discourages early pay-offs. Lenders calculate an estimated rate of return for each loan, and the longer a borrower owes on a loan, the more a bank earns.</p> <p>Typically, a prepayment penalty only applies to refinances and cash payoffs, and most banks waive the fee if a borrower sells the home. If you're coming into money and thinking about paying off your home, read your paperwork to learn whether your mortgage has a prepayment penalty.</p> <p><em>Did you pay off your mortgage early? Do you have other tips on why we shouldn't? I'd love to hear your thoughts 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/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-times-you-shouldnt-rush-to-pay-off-your-mortgage">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-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-2015-is-the-year-to-buy-a-house">5 Reasons Why 2015 is the Year to Buy a House</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/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to Retirement?</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-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</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-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</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/must-watch-video-for-new-real-estate-investors">Must Watch Video for New Real Estate Investors</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing debt investments mortgages savings Mon, 18 May 2015 09:00:11 +0000 Mikey Rox 1421641 at http://www.wisebread.com How to Enjoy Retirement If You Haven't Saved Enough http://www.wisebread.com/how-to-enjoy-retirement-if-you-havent-saved-enough <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-enjoy-retirement-if-you-havent-saved-enough" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_vacation_000038250840.jpg" alt="Retired couple taking cheap vacation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you ready to retire, but haven't managed to save enough yet?</p> <p>In fact, the U.S. Census Bureau of Labor Statistics says that although the average retirement age is 62, many seniors are retiring at age 65 or older, and a large percentage &mdash; roughly 80% &mdash; still will not have saved enough by then. Of them, about a third will depend entirely on Social Security benefits. If you're within five years of calling it quits but haven't saved enough to retire, here are a few steps that may bring retirement closer within reach.</p> <h2>1. Wait Until You're 65</h2> <p>Wait until you're age 65 or older before you start collecting Social Security benefits, as the longer you wait, the larger your benefit. Use Bankrate's Social Security <a href="http://www.bankrate.com/calculators/retirement/social-security-benefits-calculator.aspx">benefit calculator</a> to estimate your future payments.</p> <h2>2. Don't Wait to Downsize</h2> <p>Consider selling your home and investing the profits. Downsize to a lower-cost senior living community or condominium in an area where your property taxes will be affordable. You can also inquire about school parcel tax exemptions that allow seniors to apply for tax exemption from taxes imposed by local school districts.</p> <h2>3. Move to a No Tax State</h2> <p>Move to a state with no income tax on pension, Social Security, or dividend income. Florida, Nevada, New Hampshire, Pennsylvania, Washington, and Wyoming are among the states that do not tax that income.</p> <h2>4. Accept Government-Sponsored Medical Insurance</h2> <p>Medicare provides adequate health insurance coverage for doctor's visits, emergency care, assisted living, etc., but does not cover prescription drugs, dental, or vision care. For this, you will need add-on coverage like those offered by Medicare Advantage and Supplemental Insurance (Medigap). Consult with your insurance provider prior to retirement to ensure you can afford proper health insurance coverage. If you can't, inquire about government subsidies or senior plans offered by the likes of <a href="http://www.aarp.org/">AARP</a>.</p> <h2>5. Max-Out Retirement Accounts</h2> <p>By now you should be fully funding all of your retirement accounts and making any catch-up contributions. The 2015 catch-up contributions for IRAs total an additional $1,000 ($6,500) and $6,000 ($24,000) for your 401(k). As they are the most tax advantageous, make sure you are fully funding these accounts over the next few years preceding your retirement.</p> <h2>6. Diversify Using Bonds and ETFs</h2> <p>As you are nearing retirement age, you will want to gradually rebalance your portfolio so that it has less of volatile investments like stocks, and more of safer investments such as bonds and exchange-traded funds, or ETFs.</p> <h2>7. Join AARP</h2> <p>The benefits of joining AARP are endless. For those unfamiliar, AARP is the popular senior citizens advocacy group. The annual membership fee is only $16 and is discounted even further when years are bought in bulk. Members receive invaluable discounts on dining, travel, roadside assistance, auto insurance, health benefits, and more. This is a program that's definitely well worth signing up for.</p> <p><em>Are you prepared for retirement? What are you doing to get ready?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/how-to-enjoy-retirement-if-you-havent-saved-enough">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-a-retirement-account-whats-available-and-what-s-best-for-you">Choosing a Retirement Account: What&#039;s Available, and What’s Best for You?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-early-retirement-might-be-financially-risky">4 Reasons Early Retirement Might Be Financially Risky</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-millennials-should-do-today-to-prepare-for-retirement">4 Things Millennials Should Do Today to Prepare for Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) aarp investments IRAs saving money social security Fri, 01 May 2015 15:00:25 +0000 Qiana Chavaia 1400950 at http://www.wisebread.com Here's How Much You'd Have Today if You'd Bought Bitcoins a Few Years Ago http://www.wisebread.com/heres-how-much-youd-have-today-if-youd-bought-bitcoins-a-few-years-ago <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-much-youd-have-today-if-youd-bought-bitcoins-a-few-years-ago" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bitcoins_000040764986.jpg" alt="How Much You&#039;d Have If You&#039;d Bought Bitcoins " title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Virtual currencies like Bitcoins are speculative investments, to say the least. During my time writing about the <a href="http://www.wisebread.com/heres-what-you-should-know-about-bitcoin">Bitcoin scene</a>, I've met people who came into unexpected windfalls, like a team of academics who bought Bitcoins for a research project at $5-$15 each and watched the price soar, <a href="http://www.coindesk.com/researcher-tracks-bitcoin-movements-anonymity/">multiplying their money</a> 50 times over.</p> <p>But I've also seen people make what were in retrospect costly mistakes, like the entrepreneur who prepaid 43 Bitcoins (worth $5,000 at the time) for a &quot;Bitcoin ATM,&quot; then realized that if he had held onto the Bitcoin instead, he would have had $25,000 by the time the machine was delivered.</p> <p>Here is how you would have fared if you'd invested $100 in Bitcoins at various points in the crypto-currency's history.</p> <h2>August 2, 2010</h2> <p>Bitcoin closing price: 6 cents</p> <p>$100 buys 1666.7 BTC</p> <p>Value as of April 16, 2015*: $372,624.12</p> <h2>December 17, 2012</h2> <p>Bitcoin closing price: $13.41</p> <p>$100 buys 7.46 BTC</p> <p>Value as of April 15, 2015*: $1,667.83</p> <h2>April 1, 2013</h2> <p>Bitcoin closing price: $133.76</p> <p>$100 buys 0.75 BTC</p> <p>Value as of April 15, 2015*: $167.14</p> <h2>November 25, 2013</h2> <p>Bitcoin closing price: $979.45</p> <p>$100 buys 0.10 BTC</p> <p>Value as of April 15, 2015*: $22.83</p> <h2>September 29, 2014</h2> <p>Bitcoin closing price: $359.43</p> <p>$100 buys 0.28 BTC</p> <p>Value as of April 15, 2015*: $62.20</p> <h2>January 12, 2015</h2> <p>Bitcoin closing price: $214.08</p> <p>$100 buys 0.47 BTC</p> <p>Value as of April 15, 2015*: $104.43</p> <p>So, is buying Bitcoin ever a worthwhile investment?</p> <p>&quot;Don't <a href="http://www.coindesk.com/already-bigger-than-some-currencies-bitcoin-can-get-bigger-gavin-andresen-says/">invest your life savings</a> in Bitcoin unless you're willing to lose your life savings,&quot; Bitcoin Foundation chief scientist Gavin Andresen told me in a May 2013 interview.</p> <p>On the day Gavin told me that, I could have purchased one Bitcoin for $124. On the day I am writing this, I could sell that same bitcoin for $229. But that's nothing! If I'd had the foresight to sell Bitcoin at its peak at the end of 2013, my $124 investment could have netted me a tenfold return, <a href="http://blogs.marketwatch.com/thetell/2013/11/29/bitcoin-hits-record-1242-as-it-nears-value-of-ounce-of-gold/">selling for $1,242</a>!</p> <p>Of course, if you had purchased one Bitcoin at at the end of 2013, that $1,000 plus investment would have lost 80% of its value by today.</p> <p><em>Disclosure: All Bitcoin prices in this article are from the </em><a href="http://www.coindesk.com/price/"><em>CoinDesk Bitcoin Price Index</em></a><em>. Carrie Kirby occasionally writes for CoinDesk.com.</em></p> <p>*4/15/15 closing price $223.57</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/heres-how-much-youd-have-today-if-youd-bought-bitcoins-a-few-years-ago">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-13"> <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/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</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/tactics-of-the-rich">Tactics of the rich</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/plan-for-your-wants">Plan for your wants</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/do-you-need-a-financial-planner">Do You Need a Financial Planner?</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/this-post-really-suk-kuks-examining-islamic-finance">This Post Really Suk-kuks: Examining Islamic Finance</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bitcoins crypto currencies investments volatility Mon, 27 Apr 2015 13:00:04 +0000 Carrie Kirby 1397549 at http://www.wisebread.com 6 Smart Ways to Use Old Savings Bonds http://www.wisebread.com/6-smart-ways-to-use-old-savings-bonds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-smart-ways-to-use-old-savings-bonds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/savings-bonds-Dollarphotoclub_2278220.jpg" alt="savings bonds" title="savings bonds" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Still hanging on to those old savings bonds your grandparents bought for you when you were a kid? If so, you're probably wondering what to do with them and how much they're worth.</p> <p>Savings bonds are debt securities issued by the U.S. Treasury Department. If you own paper bonds, they are likely Series E, EE, or Series I Bonds, which in the past 30 years earned roughly 3.5% to 7.5%. If you're interested in calculating the face value of your bonds, use the <a href="http://www.treasurydirect.gov/BC/SBCPrice">Treasury Direct online calculator</a>. Or, use the <a href="https://www.treasurydirect.gov/indiv/tools/tools_treasuryhunt.htm">Treasury Hunt tool</a> to determine if you were ever the beneficiary of a bond you don't know about. (See also: <a href="http://www.wisebread.com/receiving-your-tax-refund-in-savings-bonds?ref=seealso">Receiving Your Tax Refund in Savings Bonds</a>)</p> <p>Once you know what they're worth, here's what you can do with your old savings bonds.</p> <h2>1. Hang on to Them Until the Maturity Date</h2> <p>Savings bonds were designed for long-term savings, so if you don't need the money now, you should hold on to your bonds until they mature before cashing them in. The maturity date is at least five years from the date of issuance and up to 30 years (the maturity is listed on your bonds). However, Series E/EE Bonds can be redeemed after one year and Series I Bonds after just six months. The early redemption penalty for cashing them within the first five years is forgoing the last three months of interest.</p> <h2>2. Convert Them to Electronic Savings Bonds</h2> <p>As of 2012, paper bonds are no longer available. Using <a href="https://www.treasurydirect.gov/indiv/research/indepth/smartexchangeinfo.htm">TreasuryDirect's Smart Exchange</a> you can convert your old paper bonds into electronic bonds by simply following the getting started resources on the website. This allows you to keep track of and manage your bonds online, plus it enables you to make any future bond purchases easily electronically. And it'll save you some time and hassle in the future when you choose to redeem your bonds.</p> <h2>3. Cash Them in and Invest</h2> <p>The best thing you could do is put your money straight back to work for you. After cashing in your bonds, reinvest the capital in the stock market. If your bonds are less than 30 years old and are still earning interest, they are likely underperforming the average annual stock market return. But unlike stocks, bonds are low-risk investment. To minimize some risk while still taking advantage of the stock market, consider investing in ETFs and mutual funds through your Roth IRA.</p> <h2>4. Pay for College, a Certificate, or Vocational Training</h2> <p>Cash in Series EE and Series I bonds issued after 1989 to pay for qualified education expenses, and you won't pay income tax on earnings. Educational expenses include all tuition and fees, including room and board, course materials, and other fees. Expenses can be for yourself, a child, spouse, or relative.</p> <h2>5. Locate Tax Records</h2> <p>If you were the recipient of a savings bond with or without a parent or grandparent listed as the beneficiary, to avoid income tax on accrued interest, the co-owner may have filed a federal income tax return for you as a child, in order to report investment earnings. And, because you were a child who did not cross the earned income threshold for filing a return, no tax would be due. Upon redemption of your savings bonds you would only owe tax for the current year's accrued interest.</p> <h2>6. Convert Them to TIPS</h2> <p><a href="https://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm">Treasury Inflation Protected Securities (TIPS)</a> are exactly what they sound like: Bonds designed to keep pace with inflation. Unlike the traditional savings bonds you may be holding, their value adjusts with the inflation rate, so that their worth is not eroded over time. Selling your traditional bonds and using the proceeds to acquire TIPS, instead, might protect your capital better from inflation.</p> <p><em>Do you have old savings bonds? How do you intend to use them?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/6-smart-ways-to-use-old-savings-bonds">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</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/plan-for-your-wants">Plan for your wants</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-savings-tricks-you-havent-tried-yet">5 Savings Tricks You Haven&#039;t Tried Yet</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bonds investments savings savings bonds treasuries Tue, 30 Dec 2014 14:00:13 +0000 Qiana Chavaia 1274851 at http://www.wisebread.com 3 Survival Instincts That Harm Investors http://www.wisebread.com/3-survival-instincts-that-harm-investors <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-survival-instincts-that-harm-investors" 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-2110371-small.jpg" alt="broken piggy bank" title="broken piggy bank" class="imagecache imagecache-250w" width="250" height="230" /></a> </div> </div> </div> <p>I remember as a kid how my inclination toward saving hurt me. One day, during a neighborhood gathering, a boy named Chuck was dispensing malted milk candies to his friends, me included.</p> <p>The other kids ate the candy as soon as they got theirs, but I ate a few pieces and stored the rest. So, when Chuck noticed that I hadn't consumed my portion, he said he wouldn't give me as much in the second round of candy distribution. (See also: <a href="http://www.wisebread.com/delayed-gratification-and-the-secret-to-will-power">Delayed Gratification and the Secret to Will Power</a>)</p> <p>Back then, my desire to set aside a gift for another day worked against me. Later, as a teen and adult, saving tendencies became advantageous to my financial well-being.</p> <p>Similarly, primitive instincts that ensure our survival in some circumstances can work against us in modern-day scenarios. There are three areas in which our natural tendencies, embedded in our psyches from the days of our <a href="http://en.wikipedia.org/wiki/Hunter-gatherer">hunter-gatherer ancestors</a>, may detract from investing success.</p> <h2>1. Consume Right Away</h2> <p>As a kid, I may have been healthier than others by limiting consumption of candy at one sitting. But in leaner times, millenniums before packaged candy and grocery stores were commonplace, eating immediately after trapping or gathering food was essential to survival and strength. Otherwise, items would spoil and the effort to hunt and gather was wasted.</p> <p>Today, the instinct to consume right away rather than set aside for consumption years or decades later can hurt our investing success, former <a href="http://www.jonathanclements.com/aboutclements.html">Wall Street Journal personal-finance writer Jonathan Clements</a> once told me. Put simply, our focus on short-term survival causes us to spend now. As a result, we often don't have money to take care of long-term needs. (See also: <a href="http://www.wisebread.com/the-case-of-the-martini-is-instant-gratification-financially-responsible">Is Instant Gratification Financially Responsible?</a>)</p> <p>We need to overcome the instinct to spend on immediate and pressing concerns, leaving us the cash to save for financial goals, such as our children's education or our retirement. A first and very important step to successful investing is to consume less than you earn and set aside money for the future.</p> <h2>2. Favor What Is Popular</h2> <p>Many experts point to the &quot;<a href="http://www.investopedia.com/terms/h/herdinstinct.asp">herd instinct</a>&quot; as a detriment to investing success. In <a target="_blank" href="http://www.amazon.com/gp/product/074945637X/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=074945637X&amp;linkCode=as2&amp;tag=wisbre03-20">Forecasting Financial Markets: The Psychology of Successful Investing</a>, author Tony Plummer explains how this inclination can hurt investors: &quot;On the one hand, their own 'personal' approach to making an investment decision may suggest one course of action; on the other, the lure of the 'herd instinct' may be pulling entirely in the opposite direction.&quot; He goes on to say that even professionals can be swayed by popular opinion at times when ignoring the crowd would ultimately be more profitable.</p> <p>Today, the instinct to listen to the group and follow the crowd is often useful. For example, you may choose a restaurant based on reviews on <a href="http://www.yelp.com">Yelp</a>, book a room at an inn after referencing feedback on <a href="http://www.tripadvisor.com/">TripAdvisor</a>, or choose a plumber by following recommendations from Facebook friends. (See also: <a href="http://www.wisebread.com/10-ways-to-make-facebook-productive">How to Make Facebook Productive</a>)</p> <p>This instinct to favor what is popular and well-liked among family, friends, and neighbors was crucial in the human race's early days. Clements notes that common group knowledge supported survival. For example, if everyone drank from a certain body of water or ate a strange food and lived happily afterward, then the water or food was deemed safe to consume. Following the crowd simplified decision making, offering an easy and secure way to live.</p> <p>Today, however, we may suffer harm when we apply such thought processes to investing decisions. That is, favoring what is popular or following the crowd may not be the best way to invest our money. Specifically, we often wrongly chase performance, buying shares of stocks, mutual funds, or other assets based on recent past performance and unloading them from our portfolio when everyone else is selling.</p> <p>We need to retrain our instincts not to ignore the crowd altogether but to place a much greater weight to a disciplined investment approach.</p> <h2>3. Never Take Risks</h2> <p>In hunter-gatherer days, little was gained by taking risks. There was no upside to trying something new and generally much to lose on the downside. For example, being the first to sample the water of a newly found stream or taste a new food could result in death.</p> <p>Today, being the first to discover and market a new drug, technology, product, etc. is often associated with greater wealth. For example, being an early investor in a startup that becomes wildly successful could provide rich rewards when the company becomes profitable and its stock price soars. (See also: <a href="http://www.wisebread.com/15-ways-to-manage-risk-in-your-financial-life">How to Manage Risk in Your Financial Life</a>)</p> <p>Further, avoiding risk can actually be risky. That is, if you keep all your money in a low-yield savings account, then you may not be able to earn enough interest to beat the inflation rate. So by not taking on risk in the stock market or other investments, your purchasing power is diminished, albeit slowly over time.</p> <p>Avoiding loss in the past was a positive attribute and helped people to stay safe and preserve their well-being.</p> <p>Now, though, the instinct to avoid risk may prevent us from investing at all and reaping gains through these investments. Though we shouldn't be reckless with our lives or our money, we do need to take appropriate risks when needed to grow our investment portfolio.</p> <p>You don't need to abandon your survival instincts. But you should learn to recognize when to counteract instinctual decisions to save money for investing, take appropriate risks, and stick to an investment plan.</p> <p><em>Have your survival instincts gotten in the way of your investments?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/3-survival-instincts-that-harm-investors">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-asset-allocation-for-your-portfolio">Best asset allocation for your portfolio</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/is-there-such-a-thing-as-risk-free-investing">Is There Such a Thing as Risk-Free Investing?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-silly-reasons-people-dont-invest-but-should">9 Silly Reasons People Don&#039;t Invest (But Should)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-smart-ways-to-turn-500-into-a-better-future">12 Smart Ways to Turn $500 Into a Better Future</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/self-made-billionaires-investment-lessons-from-their-success">Self-Made Billionaires: Investment Lessons From Their Success</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment investing investments psychology Thu, 19 Sep 2013 10:24:17 +0000 Julie Rains 988368 at http://www.wisebread.com HP Giving Away $500 to a Lucky Wise Bread Reader http://www.wisebread.com/hp-giving-away-500-to-a-lucky-wise-bread-reader <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/hp-giving-away-500-to-a-lucky-wise-bread-reader" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/smart-ip-investment-woman.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p><em>Editor's Note: The contest is officially closed! Congratulations to Wise Bread reader Ben Marvin for his <a href="http://www.wisebread.com/hp-giving-away-500-to-a-lucky-wise-bread-reader?page=2#comment-506334">winning comment</a>!</em></p> <p>HP is launching a new blog for lifehackers, work-from-home entrepreneurs, and small business owners called&nbsp;<a target="_blank" href="http://ad.doubleclick.net/clk;244309449;67587931;y">Input/Output</a>. It has a lot of relevant tips for savvy Wise Bread readers, such as&nbsp;<a target="_blank" href="http://h30565.www3.hp.com/t5/Feature-Articles/5-Tips-to-Cutting-Hidden-IT-Costs/ba-p/324">5 Tips to Cutting Hidden IT Costs</a>,&nbsp;<a target="_blank" href="http://h30565.www3.hp.com/t5/Feature-Articles/How-to-Avoid-Blowing-Your-IT-Job-Interview-Stop-Spewing-Acronyms/ba-p/296">How Not to &nbsp;Blow Your IT Job Interview</a>, and&nbsp;<a target="_blank" href="http://h30565.www3.hp.com/t5/Feature-Articles/Three-Ways-to-Print-from-Your-Mobile-Phone/ba-p/262">3 Ways to Print From Your Mobile Phone</a>,&nbsp;</p> <p>To celebrate the launch of Input/Output,&nbsp;<b>HP is giving Away $500 to Wise Bread Readers!</b></p> <h2>How to Enter</h2> <p>Simply <strong><a href="http://www.wisebread.com/hp-giving-away-500-to-a-lucky-wise-bread-reader#comments">leave a comment below</a></strong> answering the question:&nbsp;<b>What is the smartest investment you&rsquo;ve ever made?</b>&nbsp;(Answer must be at least <strong>two sentences long</strong>.)</p> <p>It can be any kind of investment&mdash;business, personal, or family investment. What is an investment that has yielded a solid return for you? Perhaps a degree, office equipment, cooking lessons, or a new suit?</p> <p>Prize is a <strong>$500 Visa gift card</strong>.</p> <p>Be sure to leave your name and email so we can contact you when you win!</p> <p>Comment must be entered before September 23, 2011 at 11:59 p.m. ET.<b><br /> </b></p> <h2>Contest Rules</h2> <p>NO PURCHASE NECESSARY.&nbsp;Legal residents of the 50 United States (D.C.) 18 years or older.&nbsp;&nbsp;Ends 9/23/11.&nbsp;&nbsp;Winners will be randomly selected and announced on Wise Bread before end of September. See&nbsp;<a target="_blank" href="http://www.wisebread.com/node/685396">Official Rules</a>. Void where prohibited.</p> <h2>More About INPUT / OUTPUT</h2> <p>One of the best ways to achieve success is to emulate successful people. <a target="_blank" href="http://ad.doubleclick.net/clk;244309449;67587931;y">HP's new blog</a> features original articles from the industry&rsquo;s most respected writers and exclusive interviews with technology leaders.</p> <p>You can learn life and business lessons from the top business minds of our time. Some of my favorites include:</p> <ul> <li><a href="http://h30565.www3.hp.com/t5/HPIO-Video/Chris-Anderson-The-Next-Business-Model-Video/ba-p/281">Chris Anderson</a> (Editor-in-Chief, Wired Magazine)</li> <li> <div><a href="http://h30565.www3.hp.com/t5/HPIO-Video/James-Surowiecki-Powering-Crowdsourcing-Video/ba-p/288">James&nbsp;Surowiecki</a> (Author of <em>Wisdom of Crowds</em>)</div> </li> <li><a href="http://h30565.www3.hp.com/t5/HPIO-Video/Tony-Hsieh-Marketing-to-the-New-Customer-Video/ba-p/292">Tony Hsieh</a>&nbsp;(CEO, Zappos)</li> <li><a href="http://h30565.www3.hp.com/t5/HPIO-Video/Jason-Fried-The-New-Workplace-for-the-New-Normal-Video/ba-p/287">Jason Fried</a>&nbsp;(37 Signals)</li> </ul> <p><strong><a href="http://www.wisebread.com/hp-giving-away-500-to-a-lucky-wise-bread-reader#comments">Enter the contest now by leaving a comment</a>!</strong></p> <p><em>This post is brought to you by HP. For more information on HP and HP products visit us at </em><a target="_blank" href="http://ad.doubleclick.net/clk;244309449;67587931;y"><em>Inputcreatesoutput.com</em></a><em>.</em></p><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/will-chen">Will Chen</a> of <a href="http://www.wisebread.com/hp-giving-away-500-to-a-lucky-wise-bread-reader">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-8"> <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/enter-to-win-over-1000-in-hedgeable-s-holiday-giveaway">Enter to Win Over $1,000 in Hedgeable’s Holiday Giveaway!</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-google-way-a-book-review-and-a-chance-to-win">The Google Way: A Book Review (And a Chance to Win!)</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/take-our-reader-survey-for-a-chance-to-win-one-of-five-amazon-gift-cards">Take Our Reader Survey for a Chance to Win One of Five Amazon Gift Cards!</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/weekend-getaway-giveaway">Weekend Getaway Giveaway</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/ask-the-readers-to-clip-or-not-to-clip-a-chance-to-win-10">Ask The Readers: To Clip or Not to Clip? (A Chance to Win $10!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Contest giveaway investments Wed, 31 Aug 2011 15:05:07 +0000 Will Chen 685397 at http://www.wisebread.com Buy-and-Hold Investing: 4 Ways to Make It More Effective http://www.wisebread.com/buy-and-hold-investing-four-ways-to-make-it-more-effective <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/buy-and-hold-investing-four-ways-to-make-it-more-effective" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/buy and hold dead.jpg" alt="Buy and hold is dead?" title="Is buy and hold resting in peace?" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>The buy-and-hold investing strategy is kind of like my dad's 1981 Toyota pickup truck: dependable, reliable, old, and a little raggedy looking. It's been around forever and everyone always takes it for granted.</p> <p>But every time it breaks down, people tell him to dump it already. Enough with the 29-year old car already, they say.</p> <p>Buy and hold investing just had a break down and everyone is rushing to claim it's no longer a valid investing strategy. If you read the news about investing, you'd think buy-and-hold was outdated, antiquated, and broken.</p> <p>I do believe it needs a fresh coat of paint and maybe a new bumper, but the engine under the hood is still as sound as ever.</p> <h2>What the Media Says</h2> <p>Go to Google, type in &quot;buy and hold dead&quot; and you'll see what I'm talking about. Last year the stock market sucked and critics decided to run some analysis on how the S&amp;P 500 did in the previous ten years. Here's what that would look like:</p> <p><img border="1" alt="S&amp;P 500 1999 to 2009" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u781/s_p_500_buy_hold.jpg" /><br /> <em>Courtesy of <a href="http://finance.yahoo.com/">Yahoo! Finance</a></em></p> <p>Now, most of these experts consider 10 years a really long time, which is kind of disingenuous. But what this &quot;analysis&quot; did was support the idea that buying a stock and holding it for a long period of time (10 years) no longer worked. Look at the data! It's over! Panic! Buy more papers and read our website!</p> <p>To that I say: Paprikash!</p> <p>Buy-and-hold still works, but if you're having trouble believing and want to try something to beef up your buy-and-hold investing, here are four ways to invest when you have a long-term view on a stock.</p> <h2>Moving Average</h2> <p>I read about this one over at MSN Money. The author of <a href="http://articles.moneycentral.msn.com/learn-how-to-invest/stock-markets-real-return-paltry.aspx?page=1">this story</a> uses a 12-month moving average to determine whether it's time to buy into the stock or to sell out and put the money into something safe like bonds.</p> <p>It's a pretty interesting concept since it doesn't involve a lot of buying and selling. Check out the S&amp;P over that same period of time with the 12-month moving average line. The idea is to buy when the black line goes over the red line and sell when it goes under:</p> <p><img border="1" alt="S&amp;P Moving Average" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u781/S_P_Moving_average.jpg" /></p> <p>According to the chart, you should've sold off your S&amp;P stock right at the end of 2000, and not gotten back in until mid-2003. Look at the swoon you saved yourself from! Then you would've ridden the bull market all the way up to the beginning of 2008. Oh and that crash in late 2008? You would've been safe and sound.</p> <p>That's ten years and only four moves (including one false alarm in 1999) &mdash; not bad at all.</p> <p>Now, I'll be perfectly frank: I think technical analysis like this is kind of junky. I would never just buy and sell when a chart told me it was time.</p> <p>But if you have a long-term interest in a stock this gives you an interesting way of skipping over the bad times and being in there for the good times.</p> <p><strong>Upside: </strong>Easy to follow, few transactions to pay fees on.</p> <p><strong>Downside: </strong>Taxes are a pain unless you're in a tax-protected account like a Roth, relying on a chart.</p> <h2>Value Averaging</h2> <p>I first heard about this strategy from <a href="http://cashmoneylife.com/2008/10/14/dollar-cost-averaging-vs-value-averaging/">Cash Money Life</a> and I had to <a href="http://www.thewriterscoin.com/2008/11/07/value-averaging-take-the-blindfolds-off/">write about it myself</a>. It's very similar to dollar-cost averaging, which is simply making regular investments over a period of time to smooth out the ups and downs of the market. It's a very safe, very conservative strategy.</p> <p>What value averaging does is smarten up your traditional dollar-cost strategy. In my own words:</p> <blockquote><p>You want to have $5,000 invested at the end of the year so you invest the first $1,000, then wait until your next buying period. If the market goes up, you invest less. If the market goes down, you invest more. At the end of the year, you&rsquo;ve invested the same $5,000 but you&rsquo;ve made small changes as to when you put your money into the market. It&rsquo;s classic buy low, sell high.</p></blockquote> <p>For more on this strategy, check out <a href="http://www.studyfinance.com/jfsd/pdffiles/v13n1/marshall.pdf">this paper</a> that goes into a lot more detail.</p> <p><strong>Upside:</strong> Easy, simple, conservative.</p> <p><strong>Downside:</strong> Must pay attention to the market and decide when it's &quot;high&quot; or &quot;low.&quot;</p> <h2>Take Your Money and Run</h2> <p>This is one <a href="http://www.thewriterscoin.com/2008/07/17/rethinking-the-buy-and-hold-strategy/">I came up with in 2008</a> when things started to go really bad. I was still enamored with buy and sell, but wanted to find a way to avoid some of the pitfalls.</p> <p>So I started to think like a trader: take your profits when you can get them and try to minimize the losing of money. One way of doing this is to set an artificial barrier &mdash; once you gain that amount you sell off and take some profits.</p> <p>This may not sound like buy and hold anymore and I don't know how much of a fan I am of this concept anymore, but it's worth a look.</p> <p>Say you decide 20% is your bar. If you gain 20% in a stock, you sell off some (or all) of it to reap the rewards. Then you have to decide when to get back in, which opens up a whole can of worms.</p> <p><strong>Upside:</strong> You'll never lose money if you don't sell at a loss.</p> <p><strong>Downside:</strong> When do you buy again? Artificial barrier is very unscientific.</p> <h2>Options</h2> <p>Trading options is <a href="http://www.thewriterscoin.com/2009/12/16/option-trading-complicated/">not as complicated as you think</a>. In fact, in many cases they are less risky than investing in stocks. And one way to use a long-term view on a stock with options is called a covered call.</p> <p>This strategy is one of the most basic options moves out there, and it works like this: you own a stock and you sell calls on those stocks. What this means is you get some money from selling the calls and you will do better than just owning the stock if it:</p> <ul> <li>Stays flat</li> <li>Goes down</li> </ul> <p>If the stock goes up beyond the strike price of your call, your stock is still going up but you did worse that just owning the stock. Still, two out of three ain't bad.</p> <p>Check out <a href="http://www.investopedia.com/terms/c/coveredcall.asp">Investopedia's Covered Call</a> entry for more details on this strategy.</p> <p><strong>Upside: </strong>Very straightforward, protects you on two out of three outcomes.</p> <p><strong>Downside:</strong> Need to learn options, open an options-trading account.</p> <h2>Buy-and-Hold Is Here to Stay</h2> <p>There are a bunch of ways of making buy and hold more attractive, and these are just four of them. I especially like the idea of using the moving average strategy in a tax-protected account like a Roth IRA and owning dividend-yielding stocks.</p> <p>This way you're not exposed to the huge drops, you get your dividend payments, and you don't pay any taxes on all the times you buy in and sell off.</p> <p>The fundamental engine under buy and hold's hood seems to be as good as ever, although recent events have changed a lot of people's minds.</p> <p><em>Do you still believe in buy-and-hold?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carlos-portocarrero">Carlos Portocarrero</a> of <a href="http://www.wisebread.com/buy-and-hold-investing-four-ways-to-make-it-more-effective">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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-debate-between-buy-and-hold-vs-timing-the-market">The Debate Between Buy and Hold vs Timing The 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/the-6-best-financial-news-sites-for-investors-in-a-hurry">The 6 Best Financial News Sites for Investors in a Hurry</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/learn-how-to-invest-with-these-5-stock-market-games">Learn How to Invest With These 5 Stock Market Games</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-sobering-facts-about-the-stock-market">6 Sobering Facts About the Stock Market</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment buy and hold investments stock market Tue, 09 Feb 2010 17:00:07 +0000 Carlos Portocarrero 5115 at http://www.wisebread.com Optimize Your IRA and 401(k) http://www.wisebread.com/optimize-your-ira-and-401k <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/optimize-your-ira-and-401k" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/apollo-4-liftoffa.jpg" alt="Apollo 4 Liftoff" title="Apollo 4 Liftoff" class="imagecache imagecache-250w" width="250" height="345" /></a> </div> </div> </div> <p>Your IRA and 401(k) (or 403(b) if you work for a non-profit) are great tools for deferring taxes, and have other advantages as well. But because they're labeled &quot;retirement&quot; accounts, people are much too likely to put the wrong investments in them. Here's how to use them correctly.</p> <p>Because of rules designed to discourage people from taking money out until they approach retirement age, people assume that they ought to put their &quot;long-term&quot; investments in their 401(k). But that's the wrong way to think about it.</p> <p>The key difference in a 401(k) or IRA account is not that it's supposed to be for your retirement. The key difference is that money that goes into the account--and money earned in the account--is tax deferred. If you let the fact that the accounts are called &quot;retirement&quot; accounts influence what assets you hold in them, you're unlikely to make maximum use of their key feature--and that amounts to throwing money away.</p> <h2>Use that tax deferral!</h2> <p>There are two steps to optimizing your various retirement accounts. The first is to get some money into them, and the second is to put the right investments into the right accounts.</p> <p>First of all, you probably want to put as a big chunk of your regular income into your 401(k), as you can.</p> <p>I say &quot;probably&quot; because there are a few reasons why you might want to limit how much money you put in your 401(k):</p> <ul> <li><strong>Your income is very low</strong>. If your income is low enough that you're being taxed at 10% or less, there's a pretty good chance that you'd pay higher taxes when you take the money out of your 401(k) after retirement.</li> <li><strong>Your income is very high</strong>. Both the IRS and your company limit how much money you can tax defer if you have a very high income.</li> <li><strong>Your employer's plan is crappy</strong>. Some plans have high fees or poor choices of investments.</li> <li><strong>You want to save money outside the plan</strong>, such as because you want to use it before you're retirement age.</li> </ul> <p>Of course, if your company still provides a corporate match, that plays into the decision as well.&nbsp; I've got a post on <a href="http://www.wisebread.com/when-not-to-put-money-in-your-401-k">when NOT to put money in your 401(k)</a> that talks about those issues in some detail. To what I'd say there I'd only add that federal income tax rates are currently at generational lows. That, combined with the current level of the deficit, suggests to me that future tax rates are likely to be higher than current tax rates--another reason why you might not want to put all your long-term savings in your 401(k).</p> <h2>Separate asset allocation from account selection</h2> <p>The allocation of assets among your various long-term goals is a completely different step from the selection of which account should hold which asset. <strong>Understanding this can add substantially to your wealth.</strong></p> <p>You probably have several long-term goals. Retirement (including early retirement) is one, but anything that requires years of saving qualifies as a long-term goal. (Examples: college savings for a young child, money to start a business, your dream home, a round-the-world cruise).</p> <p>Investments for all your long-term goals can <strong>and should be</strong> managed together. All your assets support all your goals; you just confuse yourself if you start thinking that <em>these</em> stocks are for retirement while <em>those other ones</em> are to put a new roof on the house someday.</p> <p>So, step one is to figure out your <a href="http://www.wisebread.com/best-asset-allocation-for-your-portfolio">ideal asset allocation</a>. This probably includes putting a large fraction of your investments in a broad-based, low-cost stock index fund, but may include investments in many other asset classes: mutual funds that invest in foreign stocks or dividend-paying stocks (or direct investments in such stocks), bonds, real estate, gold, silver, other commodities, etc.</p> <p>Only after you've figured out how you want to invest your entire portfolio do you want to figure out which accounts should hold which investments.</p> <h2>Choosing compartments</h2> <p>The key to this step is to put income-earning investments in tax-deferred accounts.</p> <p>Your asset allocation may include an investment in non-dividend paying stocks. They'd be part of a long-term investment strategy whose purpose is to produce growth over the next 20 or 30 years--but just because they're long-term does not mean that they should go in your 401(k)! Quite the reverse: a non-dividend paying stock that's a core holding in your portfolio should be in your regular brokerage account. If it does well you can go on holding it for years and years and won't have to pay any taxes until you sell--and when you do sell, you'll owe taxes at the low capital-gains rate.</p> <p>Holding that investment in your retirement account would be crazy. First, since you already don't owe taxes while you're holding it, you'd get no benefit from the tax deferral. Second, when you withdraw money from a retirement account you have to pay taxes on it as regular income--losing the favorable tax treatment for capital gains.</p> <p>(It doesn't work out any better if the investment does poorly--in your regular brokerage account you can use a capital loss to offset other gains before paying taxes, but losses in a retirement account are just losses.)</p> <p>You don't want the compartment decision to drive your asset allocation--you already decided what investments you wanted to hold. But those assets should end up in compartments based on tax considerations. Interest-earning investments like bonds go in tax-deferred accounts. So do investments with frequent turnover--if you make trades in your regular brokerage account you have to pay taxes on your profits every year.</p> <p>Dividends are a special case. Currently dividends are receiving favorable tax treatment, so you're probably better off keeping most dividend-paying stocks outside of your 401(k) at the moment. This is likely to change, though, so you'll have to monitor the situation.</p> <p>If you have a good 401(k) plan with lots of low-cost fund choices, it should be easy to hit your target allocation with most of your interest-earning investments (and investments that you might trade actively) inside the plan.</p> <h2>Limitations</h2> <p>In an ideal world it would be straightforward to allocate things to the different categories: You'd put the things that earned interest into your 401(k) and IRA while keeping things that produced capital gains (and currently dividends as well) in regular accounts.</p> <p>In the real world there are a bunch of constraints on that, the biggest being that many people, especially younger folks, have practically their whole wealth concentrated in their 401(k).</p> <p>This happens almost automatically: You get a job, you direct enough money into your 401(k) to get the full corporate match (back when companies actually paid a corporate match), and then you spent most of your take-home pay. You can't hold your stock portfolio in your brokerage account (where you'd get the maximum tax advantage of the capital gains and dividend tax breaks) because you just don't have enough money outside the 401(k).</p> <p>This and similar real-world considerations are going to limit your ability to get this exactly right--and that's to be expected. The important thing is to base your asset-allocation decisions on your best analysis of your goals and your expectations for the future. Below I've got a few tips for dealing with specific situations.</p> <p>The main limitation on your ability to optimize your 401(k) plan has to do with the choices your employer offers within the plan. Happily, you can work around even a pretty mediocre plan's limitations, as long as you at least some of your long-term savings outside your 401(k).</p> <p>First, take a close look at the investment choices you've got and compare them to your desired asset allocation. Maybe there's no bond fund, but there is a balanced investment fund that's half-and-half stocks and bonds. If you wanted 20% in bonds you could get that by putting 40% of your money into the balanced fund. (That would also put 20% of your money into stocks--which is fine, as long as your stock allocation is at least 20%, which it probably is.)</p> <p>Second, where you really can't find the investments you need within the plan (no international fund, perhaps, or no gold fund) you have to cover that fraction of your asset allocation elsewhere--which is also fine, as long as you have some of your long-term investments outside the plan. If the investment is one that ought to be tax-deferred, see if you can't buy the appropriate asset within an IRA.</p> <p>Generally, make hitting your asset allocation your number one priority. Maximum tax efficiency is a secondary consideration--but to the extent that you can keep your bond investments (and any investments where you make frequent trades) inside a tax-deferred plan, you'll come out ahead.</p> <p>As a secondary matter, start saving some money outside your 401(k). As the sum grows, use it to invest for capital gains (and, for however long they remain tax-advantaged, dividends)--and simultaneously shift your 401(k) toward interest-earning investments that make maximum use of the 401(k)'s tax advantages.</p> <p>For most people this will probably be a long-term problem: Unless you become quite wealthy, your 401(k) will always be larger than the amount of money you want to hold in bonds. But that's not a big problem. Just stick with your asset allocation and emphasize capital gains and dividends outside the 401(k).</p> <h2>Using a Roth</h2> <p>A Roth IRA is a special case. If you follow the rules (wait until your Roth is 5 years old and until you're 59-and-a-half), you can avoid paying any taxes on money earned in a Roth.</p> <p>The upshot is that most of these issues don't really apply to a Roth. Just invest according to your asset allocation and don't worry about it.</p> <p>Remember that tax rates always change (and everyone's individual tax situation is different), so be sure to check and understand how the rules will actually apply in your case.</p> <p>Whatever mix of retirement accounts you end up using, don't let the fact that they're called &quot;retirement&quot; accounts distract you from the essential features that distinguish those accounts: the tax advantages. Taking maximum advantage of those features can add significantly to your wealth over the next few decades.</p> <p><em>&nbsp;[Update 6 August 2009:&nbsp; This post was included in the </em><a href="http://www.christianpf.com/famous-money-quotes-copf/"><em>Carnival of Personal Finance</em></a><em>.]</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/optimize-your-ira-and-401k">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/retirement-accounts-and-money-to-spend">Retirement accounts and money to spend</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</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/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small Retirement Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 401(k) 401(k) plans 401k 401k plans investing investments IRA long-term Roth savings tax tax-advantaged tax-deferred taxes Wed, 29 Jul 2009 20:00:11 +0000 Philip Brewer 3442 at http://www.wisebread.com Tactics of the rich http://www.wisebread.com/tactics-of-the-rich <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/tactics-of-the-rich" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sunsinger.jpg" alt="Sunsinger statue in Allerton Park" title="Sunsinger" class="imagecache imagecache-250w" width="250" height="334" /></a> </div> </div> </div> <p>There are things the rich do that working class and middle class folks don't. Some of them--living off the return on capital rather than wages or salary--are only available to the rich. Others--seeking a first-rate education for your kids, working for yourself rather than others--are things that ordinary folks do to the extent that they can, but their ability is limited. Even so, it's worth learning the tactics of the rich and applying them where possible.</p> <p>Some of the tactics of the wealthy are unsavory. One key tactic is to share as little as possible of the profits of the enterprise. This is why working for yourself is such an important tactic--the owners and managers are in a position to grab the lion's share. Put your suppliers in the position of competing with one another for the lowest price, put your workers in the position of competing with the unemployed for the lowest wage, and pocket the savings (via dividends if you're an owner, via bonuses if you're a manager).</p> <p>Others, though--tactics like frugality, living within your means, avoiding debt (except to invest in a money-earning enterprise), and working hard--are positive virtues, or at least neutral. (And they're generally the ones that lead to wealth creation. The others are largely about wealth preservation.)</p> <p>These tactics are not kept secret, exactly, but various factors keep them largely out of view from ordinary folks. The biggest is simply that consumption is interesting while frugality is dull. So, buying a yacht makes the news, whereas driving a 10-year-old car one more year doesn't get noticed. The result is that popular culture shows the excesses of super-wealthy but not the ordinary lifestyles of the ordinary wealthy. But there are way more of the latter than there are of the former.</p> <h2>Not a level playing field</h2> <p>There are a lot of ways in which the deck is stacked in favor of the rich. The advantage I mentioned at the beginning--owners and managers being able to skim off an outsized share of the profits--is a huge one, but there are others:</p> <ul> <li>The legal system heavily favors the rich.</li> <li>The financial system offers high quality services to the wealthy (often for free), while the poor make do with expensive check-cashing services and payday lenders.</li> <li>The rich are in a much better position to wait for a good deal--which gets them lower interest rates on loans, lower rents, lower insurance rates, and better prices on just about everything.</li> <li>And then there are simple social realities--affluent neighborhoods are safer, stores that cater to the affluent have more and better choices (and often cheaper ones as well), schools in affluent neighborhoods are better and safer.</li> </ul> <h2>Knowledge can help level it</h2> <p>If you know enough, though, most of these advantages of the wealthy are available to the poor as well:</p> <ul> <li>Anybody can start a small business. The internet has vastly increased the range of options that require almost no capital (and has made a wide range of formerly expensive services available cheap or free). This mean that anybody can work for themselves rather than others.</li> <li>Anybody can be frugal and live within their means, as long as they don't assume that they're entitled to some particular standard of living.</li> <li>Anybody can avoid debt. More important, anybody can understand the difference between <a href="http://www.wisebread.com/good-debt-bad-debt">productive debt</a> (invested to earn the money to pay itself off) and unproductive debt (spent on consumption).</li> <li>Anybody can do the research to find the good public schools. The affluent have a lot more choices, but you only need to find one affordable place to live in a safe neighborhood with good schools.</li> <li>Anyone (even <a href="http://www.wisebread.com/making-direct-deposit-safe-for-the-garnished">people with garnishments</a>) can open a bank account and quit using the check-chasing places.</li> <li>Anyone can be patient and refuse to take a bad deal--which will, over time, get you the same good prices that the rich get.</li> </ul> <p>It takes time and effort to learn the tricks and pitfalls, and this is where the children of the affluent get their biggest leg up: They learn these things from their parents and their friends' parents, from their classmates and teachers and neighbors. They also generally reach adulthood with at least <a href="http://www.wisebread.com/join-the-rentier-class">a little capital</a> (instead of student loan debts). But you can learn these things too. It's one reason for reading Wise Bread.</p> <p> &nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/tactics-of-the-rich">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-youre-so-smart-why-arent-you-rich">If you&#039;re so smart, why aren&#039;t you rich?</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/if-you-won-the-lottery-you-would">If You Won The Lottery, You Would...</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/a-decent-standard-of-living">A decent standard of living</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/meet-meg-favreau-our-senior-editor">Meet Meg Favreau, Our Senior Editor</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/self-sufficiency-self-reliance-and-freedom">Self-sufficiency, self-reliance, and freedom</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living class investments rentier class rich tactics wealthy Sun, 12 Apr 2009 21:18:49 +0000 Philip Brewer 3037 at http://www.wisebread.com