I don’t know about you, but for me, a bathroom goes well beyond its practical uses; within the past years, I’ve come to think about it as a sanctuary of sorts, that room of the house that’s dedicated to pampering, relaxing, and deconnecting — a place where I can enjoy some alone time and use that alone time to take care of my skin, hair, body, and mind.
And just like any other space in my house, the more beautiful my bathroom is, the more I can enjoy the time I spend in it. But re-designing a bathroom or remodeling it altogether is quite an investment. That’s why today we’re going to look at a few handy ways in which we can improve our bathroom’s design without having to spend a ton of money in the process. Here are some tips to help you maximize your bathroomâs function and style while saving money — both on the short and long run:
For example, solid wood or plywood may not be a good choice for furniture, as it will likely warp and crack (and it can even lead to mold). Instead, a way better — and longer-lasting — choice would be PVC, which is extremely durable, completely waterproof and offers a great look and feel as well for bathroom cabinets. When buying blinds for your bathroom windows, choose waterproof blinds because they are stain and mold resistant, as well as fade-free. When picking appliances, make sure to avoid any metal that might rust, and preferably stay away from plastic; some of your best choices are brass, stainless steel, and zinc (or zinc alloys), as they stand the test of time and add a note of style to your bathroom.
Overall, focus on materials that can withstand humidity and water. This way, you donât have to spend money replacing them and you can rest assured that your bathroom will maintain its clean and brand-new look over the years.
#2 Widen and brighten your space with mirrors
Instead of adding a skylight or a new window to brighten a rather gloomy bathroom (which would call for a pricy renovation), consider using a large mirror, re-painting your walls in a light color, or adding extra light fixtures. These can all help create the illusion of space, making your bathroom look wider and brighter. Obviously, this technique is much more affordable than having to install an additional window to your bathroom space and you’d be surprised at how much of a difference adding a large mirror can make.
If you feel like you don’t have the space to add an additional mirror to your bathroom, consider replacing the mirror above your vanity with a far larger one. Bonus tip: choosing an unusual shape or a unique frame for the vanity mirror (like the one in the image below) can give an impressive look to your bathroom, and act as the centerpiece of the room.
#3 Update by regrouting
If youâre looking to update your bathroom quickly and on a tight budget, consider replacing the existing tile grout. RegroutingÂ is a two-step manual process by which you first remove the hardened old grout from the seams, or joints, between the tiles in your bathroom, then apply fresh new grout to make it seem like you have just installed your tiles (here’s a full walkthrough of the process). You’d be surprised how big of a difference this fairly simple update can make — especially since tiles rarely show signs of wear and tear, but the grout’s initial color fades away, and often gives a sense that it’s dirty, discolored and old.
This idea works best if the tiles in your space are still in great shape, that is, they donât have cracks or missing pieces. Although it may take a bit of work, itâs surely faster and cheaper than a major bathroom overhaul. Fresh grout will make the tiled area look brand new, and you can even apply a new grout color to make a more dramatic change to your bathroom.Â
#4 Get creative with designer tiles
Now, if you’re looking to add a splash of sophistication to your shower or bathroom tiles, but don’t have the budget to splurge on designer tiles, there’s a super easy trick you can turn to: use regular, budget friendly tiles across the walls of your bathroom, then add a pop of design and color in a small area using more expensive designer tiles.Â
Or, you can keep it simple and use classic tiles, but arrange them in an unusual pattern or install them at an angle to create an eye-catching effect. If you’re looking for the maximum effect, create an accent wall (preferably right where either the shower or bathroom vanity go, to highlight that space), like the one pictured below. It won’t cost as much as replacing all of your bathroom tiles, but will definitely give your space a great, updated look.
#5 Try to avoid current trends
We all like to think that we’re aligned with the latest trends and fads. But the truth of the matter is, the best way to waste money is to follow fads that in a couple of years will seem so outdated that youâll feel the need to renovate your bathroom all over again. You can make your design last way longer if youâll use natural finishes and neutral colors.
Classics also tend to be considerably less expensive than their trending counterparts, and they’re much more likely to stand the test of time. See below for a marble-themed bathroom that was all the rage a few years back, but that seems a little out of place in the more minimalist-inclined era that we live in today.
Because of this, you may be forced to buy new coordinating pieces, too. However, if youâll stick with traditional finishes, it will be simpler for you to create a cohesive look while still sticking to your budget.Â
#7 Re-use old furniture to create a unique look
If you have an old desk, table, dresser, or TV stand, consider using it in your bathroom (provided it can withstand humidity and isn’t easily prone to water damage, as we’ve stated above). Repurposing old furniture will give you a chance to show your personality while adding much-needed bathroom storage. Consider doing this as a DIY project, which can help you save money while also being earth-friendly.Â
Replacing bathroom elements will usually require removing or replacing plumbing fixtures, which comes with additional costs. It can also involve construction changes, demolition work, and new installation.Â Before deciding on replacing any of these fixtures, determine if they really need replacement. If youâre replacing them for aesthetic reasons, you might have the option to refinish them instead of replacing them altogether.Â
For example, you can refinish your old tub with a nice-looking, protective coating instead of completely replacing it. You can also paint your cabinet anew instead of purchasing a new one — and you can even get creative with the color you use. Check out this elegant bathroom below, whose owners chose to refinish the bathtub and paint it in a slight pinkish hue. Isn’t it just lovely?
The bathroom is one part of the house that needs some upgrading every now and then, and said upgrades can turn out to be quite expensive. However, with some rather small, but well-thought changes, you can spruce up your bathroom design without spending a pretty penny. And if our suggestions are not to your liking, there’s tons of helpful resources out there that can give you some great ideas to get you started.
More interior design tips
Hereâs Everything You Need to Set Up a Meditation Corner in Your House How to Turn Your Kitchen Into Every Coffee Loverâs Dream Design Trends that Add Extra Flair to Your Fancy Home How to Add a Touch of Luxury to Your Home without a Costly Renovation
The post 8 Money-Saving Tips for Improving Your Bathroom’s Design appeared first on Fancy Pants Homes.
Should I refinance my student loans?It depends on your situation. Buta common reason for people to refinance their student loans is that they want to pay less interest. Even a small decrease in the rate could save you a lot of money over the life of the loan and ultimately help you pay off your student loans faster.
Another reason could be that you want to change the loan type (i.e., switching from a fixed rate to a variable rate or vice versa).
Whatever your reasons for wanting to refinance your student loans may be, you should always compare your student loan rate with other rates on the market. Some lenders always update their rates to make sure they are competitive on the market. So the chance is high that you could get a better deal with another lender.
The best way to compare student loan rates is through LendKey. LendKey’s rate starts as low as at 1.9%. And they have 5, 7, 10, 15 & 20 year loan terms. The great thing about LendKey is that checking your rates will NOT affect your credit score.
CHECK YOUR RATE
What does refinancing your student loans mean?
In simple terms, when you refinance your student loans, you’re essentially taking out a brand new loan in order to pay off your existing student loan. This can get you a better deal and save you money in the long term. The trick is to figure out if it makes sense to refinance.
Should I refinance my student loans? Does it make sense to do so?
When it makes sense to refinance your student loans:
Lower interest rates are available.
You have other large debts, such as credit card debts and personal loans, and you want to consolidate all of your loans.
A major change in your life has happened recently.
You want to switch to a fixed rate.
When it doesn’t make sense to refinance your student loans
Your credit score is low and you are less likely to get a good rate.
You’re no longer have a stable job, and your income is not reliable.
Your current loan is at a fixed rate.
To decide whether you should refinance your student loans, you should have a reason why you want to refinance. Is it because you want to pay a lower interest rate? Do you want to consolidate all of your loans?
Wanting a lower interest rate on your student loans should not be your only consideration when wanting to refinance. The life of the loan should also be considered, and not just the interest rate. That means, will it be variable interest rate or fixed interest rate. This is important as it can impact your long term financial obligations.
You should also consider the cost of switching to another lender. There are fees, such as application fees and ongoing charges associated with switching to another lender.
Is now the right time to refinance your student loans?
A better interest rate is not the only factor to consider when thinking of refinancing your student loans.
The stability of your job should also be considered. How stable is your job? Can you manage to make monthly payments on your income? If you’ve recently gone part-time, or gone freelancing, now is probably not a good time to refinance your student loans.
Likewise, if you have just switched to a more stable, full time job, you may need to wait for like 6 months or even a year before a bank can consider your loan application.
This is where a financial advisor can be handy, as they can help you make the right financial decision.
It’s also a good idea to talk to existing student loans provider when considering refinancing. Some lenders, in order to keep your business, might try to lower your interest rates or waive some fees for you. They’d be very willing to do that especially if you always make your payments on time and have been with them for a long time.
If you decide to go with another lender, make sure your financial situation is in shape. That means that you don’t have that much outstanding debts such as credit card debts, and that you have always paid your bills on time. This is important not only to get qualified, but also to get a better rate.
When refinancing your student loans make sense
There can be several reasons to refinance your student loans. Perhaps you have a better job, making more money. Or perhaps your current student loan rate is not competitive anymore.
Even if you don’t have any specific reason, it’s always a good idea to know what’s available to you. There might be great deals out there.
Every once in a while, you might want to reassess your student loan rate and compare it to other student loan rate on the market.
One easy way to reassess your options is with LendKey. LendKey is an online platform that allows you to browse multiple low-interest loans from almost 300 community banks and credit unions, instead of big banks.
LendKey allows for more flexibility and lower interest rates. It can help you find the right student loan for you without visiting dozen bank branches.
Plus applying to a dozen of student loans will not HURT your credit score. LendKey does a soft check on you, so you can compare student loans from multiple lenders before you actually apply for one.
Click here to check your rates through LendKey.
Indeed, a lower interest rate and lower repayments are some of the more common reasons to refinance your student loans. Even a slight decrease on your interest rate might make a big difference on your monthly student loan payments.
Indeed any student loan refinance calculator out there can tell you how much you can save.
Another common reason to refinance your student loans might be to consolidate all of your debts and have one monthly repayment. Debt consolidation is when you combine all of your debts so you have one big repayment, instead of several.
If you have other debts such as personal loans, car loan, credit card debts, home loan, then it makes sense to roll these debts together with your student loan. The advantage is that your student loan rate is typically lower.
When refinancing your student loans doesn’t make sense.
There are times when refinancing doesn’t make sense.
For example, if you have built a good relationship with your lender, it might not be a good idea to switch to another lender simply to get a lower interest rate. The new lender might raise your rate once you switch, but you’ve just ruined your good relationship with your old lender.
Another reason you should not refinance your student loans is if you you have been paying for a long time already. Refinancing to a longer term might reduce your monthly payments, but will cost you many more years and more money. So if your current balance is already low, it’s not very beneficial to refinance.
You should also not refinance your student loans if your interest rate on your current student loan is low. There is no real benefit to be had from refinancing an already low interest rate. In fact, you may end up incurring more costs and fees when switching.
Your credit score is low
Refinancing your student loans may not be a good idea if your credit score is low.
While you can apply with a co-signer if you have a low credit score, but it can be hard to find someone to co-sign for you.
So, at a minimum, make sure your credit score is at least 650. If it’s not where is supposed to be, take steps to raise your credit score.
Don’t know your credit score, get a free credit score with Credit Sesame.
If you’re asking yourself: “should I refinance my student loans?” The answer is: it depends on your unique situation. But there are great benefits to refinancing your student loans. To reiterate, it can save you thousands of dollars over the life of the loan; it can reduce your loan payments significantly. However, before deciding to take the plunge you have to make sure you’re getting a better deal.
After you have checked your rates,you should definitely refinance your student loans. Not only will you get a reduced interest rate, you will also get a lower monthly payment and pay less over the life of your loan.
Plus when you’re approved for a loan you applied through Lendkey, you’ll get a $100 bonus after the loan is disbursed.
5 Tips To Pay Off Your Student Loans Faster
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Buying A Home For The First Time? Avoid These Mistakes
Work with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). So, find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post Should I Refinance My Student Loans? appeared first on GrowthRapidly.
Whether you’re cozying up on the couch together with a bottle of wine or headed out to the trendy restaurant everyone’s talking about, date night is an essential part of most relationships.
“Date nights are important because they give new couples a chance to get to know each other and established couples a chance to have fun or blow off some steam after a rough week,” says Holly Shaftel, a relationship expert and certified dating coach. “Penciling in a regular date can ensure that you make time for each other when your jobs and other aspects of your life might keep you busy.”
There’s just one small snag. Or, maybe it’s a big one. Date nights can get expensive. According to financial news website 24/7 Wall St., the cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.
When you’re focused on improving your finances as a couple, finding ways to spend less on date night is a no-brainer. But you may be wondering: How can we save money on date night and still get that much-needed break from the daily grind?
There are plenty of ways to save money on date night by bringing just a little creativity into the mix. Here are eight suggestions to try:
1. Share common interests on the cheap
When Shaftel and her boyfriend were in the early stages of their relationship, they learned they were both active in sports. They were able to plan their date nights around low-cost (and sometimes free) sports activities, like hitting the driving range or playing tennis at their local park.
If you’re trying to find ways to spend less on date night, you can plan your own free or low-cost date nights around your and your partner’s shared interests. If you’re both avid readers, for example, even a simple afternoon browsing your local library’s shelves or a cool independent bookstore can make for a memorable time. If you’re both adventurous, check into your local sporting goods stores for organized hikes, stargazing outings or mountaineering workshops. They often post a schedule of events that are free, low-cost or discounted for members.
2. Create a low-budget date night bucket list
Dustyn Ferguson, a personal finance blogger at Dime Will Tell, suggests using the “bucket list” approach to find the best ways to save money on date night. To gather ideas, make it a game. At your next group gathering, ask guests to write down a fun, low-budget date night idea. The host then gets to read and keep all of the suggestions. When Ferguson and his girlfriend did this at a friend’s party, they submitted camping on the beach, which didn’t cost a dime.
The cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.
To make your own date night bucket list with the best ways to save money on date night, sit down with your partner and come up with free or cheap activities that you normally wouldn’t think to do. Spur ideas by making it a challengeâfor instance, who can come up with the most ideas of dates you can do from the couch? According to the blog Marriage Laboratory, these “couch dates” are no-cost, low-energy things you can do together after a busy week (besides watching TV). A few good ones to get your list started: utilize fun apps (apps for lip sync battles are a real thing), grab a pencil or watercolors for an artistic endeavor or work on a puzzle. If you’re looking for even more ways to spend less on date night, take the question to social media and see what turns up.
3. Alternate paid date nights with free ones
If you’re looking for ways to spend less on date night, don’t focus on cutting costs on every single date. Instead, make half of your dates spending-free. “Go out for a nice dinner one week, and the next, go for a drive and bring a picnic,” says Bethany Palmer, a financial advisor who authors the finance blog The Money Couple, along with her husband Scott.
Getting stuff done around the house or yard may not sound all that romantic, but it can be one of the best ways to save money on date night when you’re trying to be budget-conscious. And, tackling your to-do listâlike cleaning out the garage or raking leavesâcan be much more enjoyable when you and your partner take it on together.
5. Search for off-the-wall spots
If dinner and a movie is your status quo, mix it up with some new ideas for low-cost ways to save money on date night. That might include fun things to do without spending money, like heading to your local farmer’s market, checking out free festivals or concerts in your area, geocachingâoutdoor treasure huntingâaround your hometown, heading to a free wine tasting or taking a free DIY class at your neighborhood arts and crafts store.
“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over,” Ferguson says.
6. Leverage coupons and deals
When researching the best ways to save money on date night, don’t overlook coupon and discount sites, where you can get deals on everything from food, retail and travel. These can be a great resource for finding deep discounts on activities you may not try otherwise. That’s how Palmer and her husband ended up on a date night where they played a game that combined lacrosse and bumper cars.
There are also a ton of apps on the market that can help you find ways to save money on date night. For instance, you can find apps that offer discounts at restaurants, apps that let you purchase movie theater gift cards at a reduced price and apps that help you earn cash rewards when shopping for wine or groceries if you’re planning a date night at home.
7. Join restaurant loyalty programs
If you’re a frugal foodie and have a favorite bar or restaurant where you like to spend date nights, sign up for its rewards program and newsletter as a way to spend less on date night. You could earn points toward free drinks and food through the rewards program and get access to coupons or other discounts through your inbox. Have new restaurants on your bucket list? Sign up for their rewards programs and newsletters, too. If you’re able to score a deal, it might be time to move that date up. Pronto.
8. Make a date night out of budgeting for date night
When the well runs dry, one of the best ways to save money on date night may not be the most excitingâbut it is the easiest: Devote one of your dates to a budgeting session and brainstorm ideas. Make sure to set an overall budget for what you want to spend on your dates, either weekly or monthly. Having a number and concrete plan will help you stick to your date night budget.
“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over.”
Ferguson says he and his girlfriend use two different numbers to create their date night budget: how much disposable income they have left after paying their monthly expenses and the number of date nights they want to have each month.
“You can decide how much money you can spend per date by dividing the total amount you can allocate to dates by the amount of dates you plan to go on,” Ferguson says. You may also decide you want to allot more to special occasions and less to regular get-togethers.
Put your date night savings toward shared goals
Once you’ve put these creative ways to save money on date night into practice, think about what you want to do with the cash you’re saving. Consider putting the money in a special savings account for a joint purpose you both agree on, such as planning a dream vacation, paying down debt or buying a home. Working as a team toward a common objective can get you excited about the future and make these budget-friendly date nights feel even more rewarding.
The post 8 Ways to Save Money on Date Night appeared first on Discover Bank – Banking Topics Blog.
Do you know the allegory of Mr. Market? This useful parable—created by Warren Buffett’s mentor—might change everything you think about the stock market, its daily prices, and the endless news cycle (and blogs?!) built upon it.
The Original Mr. Market
The imaginary investor named “Mr. Market” was created by Benjamin Graham in his 1949 book The Intelligent Investor. Graham, if you’re not familiar, was the guy who taught Warren Buffett about securities analysis and value investing. Not a bad track record.
Graham asks the readers of his book to imagine that they have a business partner: a man named Mr. Market. On some days, Mr. Market arrives at work full of enthusiasm. Business is good and Mr. Market is wildly happy. So happy, in fact, that he wants to buy the reader’s share of the business.
But on other days, Mr. Market is incredibly depressed. The business has hit a bump in the road. Mr. Market will do anything to sell his own shares of the business to the reader.
Of course, the reader is always free to decline Mr. Market’s offers. And the reader certainly should feel wary of Mr. Market. After all, he is irrational, emotional, and moody. It seems he does not have good business judgement. Graham describes him as having, “incurable emotional problems.”
How can Mr. Market’s feelings fluctuate so quickly? Rather than taking an even emotional approach to business highs and lows, Mr. Market reacts strongly to the slightest bit of news.
If anything, the reader could probably find a way to take advantage of Mr. Market’s over-reactions. The reader could buy from Mr. Market when he’s feeling overly pessimistic and sell to Mr. Market when he’s feeling unjustifiably euphoric. This is one of the basic principles behind value investing.
But Mr. Market is a metaphor
Of course, Mr. Market is an imaginary investor. Yet countless readers have felt that Mr. Market acts as a perfect metaphor for the market fluctuations in the real stock market.
The stock market will come to you with a different price every day. The market will hear good news from a business and countless investors will look to buy that business’s stock. Will you sell to them? But a negative headline will send the market tumbling. Investors will sell. Please, they plead, will you buy my shares?!
Don’t like today’s price? You’ll get a new one tomorrow.
Is this any way to make rational money decisions? By buying while manic and selling while depressive? Do these daily market fluctuations relate to the true intrinsic value of the businesses they represent?
“Never buy something from someone who is out of breath”
There’s a reason why Benjamin Graham built Mr. Market to resemble an actual manic-depressive. It’s an unfortunate affliction. And sadly, those afflicted are often untethered from reality.
The stock market is nothing more than a collection of individuals. These individuals can fall prey to the same emotional overreactions as any other human. Mr. Market acts as a representation of those people.
“In the short run, the stock market is a voting machine. Yet, in the long run, it is a weighing machine.”
Votes are opinions, and opinions can be wrong. That’s why the market’s daily price fluctuations should not affect your long-term investing decisions. But weight is based on fact, and facts don’t lie. Over the long run, the true weight (or value) of a company will make itself apparent.
Warren Buffett’s Thoughts
Warren Buffett is on the record speaking to Berkshire Hathaway shareholders saying that Mr. Market is his favorite part of Benjamin Graham’s book.
If you cannot control your emotions, you cannot control your money.
Of course, Buffett is famous for skills beyond his emotional control. I mean, the guy is 90 years old and continues his daily habits of eating McDonalds and reading six hours of business briefings. That’s fame-worthy.
But Buffett’s point is that ignoring Mr. Market is 1) difficult but 2) vitally important. Your mental behavior is just as important as your investing choices.
For example: perhaps your business instincts suggested that Amazon was a great purchase in 1999—at about $100 per share. It was assuredly overvalued at that point based on intrinsic value, but your crystal ball saw a beautiful future.
But Buffett’s real question for you would be: did you sell Amazon when the Dot Com bubble burst (and the stock fell to less than $10 per share)? Did Mr. Market’s depression affect you? Or did your belief in the company’s long-term future allow to hold on until today—when the stock sits at over $3000 per share.
The Woefully Ignorant Sports Fan
I know about 25 different versions of this guy, so I bet you know at least one of them. I’m talking about the Woefully Ignorant Sports Fan, or WISF for short.
The WISF is a spitting image of Mr. Market.
When Lebron James has a couple bad games, the WISF confidently exclaims,
“The dude is a trash basketball player. He’s been overhyped since Day 1. I’m surprised he’s still in the starting lineup.”
Wow! That’s a pretty outrageous claim. But when Lebron wins the NBA finals and takes home another First-Team All-NBA award, the WISF changes his tune.
“I’m telling you, that’s why he’s the Greatest of All Time. The GOAT. Love him or hate him, you can’t deny he’s the King.”
To the outside observer, this kind of flip-flop removes any shred of the WISF’s credibility. And yet the WISF flip-flops constantly, consistently, and without a hint of irony. It’s simply his nature.
Now think about the WISF alongside Mr. Market. What does the WISF actually tell us about Lebron? Very little! And what does Mr. Market tell us about the true value of the companies on the stock market? Again, very little!
We should not seek truth in the loud pronouncements of an emotional judge. This is another aphorism from The Intelligent Investor book.
But I Want More Money!
Just out of curiosity, I logged into my Fidelity account in late March 2020. The COVID market was at the bottom of its tumble, and my 401(k) and Roth IRA both showed scarring.
Ouch. Tens of thousands of dollars disappeared. Years of saving and investing…poof. This is how investors lose heart. Should I sell now and save myself further losses?
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No! Absolutely not! Selling at the bottom is what Mr. Market does. It’s emotional behavior. It’s not based on rationality, not on the intrinsic values of the underlying businesses.
My pessimism quickly subsided. In fact, I began to feel silver linings. Why?
I’m still in the buying phase of my investing career. I buy via my 401(k) account every two weeks. And I buy via my Roth IRA account every month. I’ve never sold a stock. The red ticks in the image below show my two-week purchasing schedule so far in 2020.
If you’re investing for later in life, then your emotions should typically be the opposite of the market’s emotions. If the market is sad and prices are low and they want to sell…well, great! A low price for you increases your ability to profit later.
And Benjamin Graham agrees. He doesn’t think you should ignore Mr. Market altogether, but instead should do business with him only when it’s in your best interest (ooh yeah!).
“The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him, but only to the extent that it serves your interest.”
If you log into your investment accounts and see that your portfolio value is down, take a step back and consider what it really means. You haven’t lost any money. You don’t lock in any losses unless you sell.
The only two prices that ever matter are the price when you buy and the price when you sell.
Mr. Market in the News
If you pay close attention to the financial news, you’ll realize that it’s a mouthpiece for the emotional whims of Mr. Market. Does that include blogs, too? In some cases, absolutely. But I try to keep the Best Interest out of that fray.
For example, here are two headlines from September 29, 2020:
Just imagine if these two headlines existed in another space. “Bananas—A Healthy Snack That Prevents You From Ever Dying” vs. “Bananas—A Toxic Demon Food That Will Kill Your Family.”
The juxtaposition of these two headlines reminds me of Jason Zweig’s quote:
“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap).”
More often than not, reality sits somewhere between unsustainable optimism and unjustified pessimism. As an investor, your most important job is to not be duped by this emotional rollercoaster.
Investing Based on Recent Performance
Out of all the questions you send me (and please keep sending them!), one of the most common is:
“Jesse – I’m deciding between investment A, investment B, and investment C. I did some research, and B has the best returns over the past three years. So I should pick B, right?”
Great question! I’ve got a few different answers.
What is Mr. Market saying?
Let’s look at the FANG+ index. The index contains Twitter, Tesla, Apple, Facebook, Google, Netflix, Amazon, NVIDIA, and the Chinese companies Baidu and Alibaba. Wow! What an assortment of popular and well-known companies!
The recent price trend of FANG+ certainly represents that these companies are strong. The index has doubled over the past year.
Mr. Market is euphoric!
And what do we think when Mr. Market is euphoric?
How do you make money?
Another one of my favorite quotes from The Intelligent Investor is this:
“Obvious prospects for physical growth in a business do not translate into obvious profits for investors”
You make money when a company’s stock price is undervalued compared to its prospects for physical growth. You buy low (because it’s undervalued), the company grows, the stock price increases, you sell, and boom—you’ve made a profit.
I think most people would agree that the FANG+ companies all share prospects for physical growth. But, are those companies undervalued? Alternatively, have their potentials for future growth already been accounted for in their prices?
It’s just like someone saying, “I want a Ferrari! It’s such a famous car. How could it not be a great purchase?”
The statement is incomplete. How much are you paying for the Ferrari? Is it undervalued, only selling for $10,000? Or is it overvalued, selling at $10 million? The product itself—whether a car or a company—must be judged against the price it is selling for.
Past Results Do Not Guarantee Future Performance
If investing were as simple as, “History always repeats itself,” then writing articles like this wouldn’t be worthwhile. Every investment company in the world includes a disclaimer: “Past results do not guarantee future performance.”
Before making a specific choice like “Investment B,” one should understanding the ideas of results-oriented thinking and random walks.
Farewell, Mr. Market
Mr. Market, like the real stock market, is an emotional reactionary. His daily pronouncements are often untethered from reality. Don’t let him affect you.
Instead, realize that only two of Mr. Market’s thoughts ever matter—when you buy from him and when you sell to him. Do business with him, but make sure it’s in your best interest (oh yeah!). Everything else is just noise.
If the thoughts of Benjamin Graham, Warren Buffett, and the Best Interest haven’t convinced you, just look at the financial news or consider the Woefully Ignorant Sports Fan. Rapidly changing opinions rarely reflect true reality.
Stay rational and happy investing!
If you enjoyed this article and want to read more, Iâd suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.
The best money market mutual funds are a good place to keep your cash while earning interest.Â Bank checking and savings accounts and money market accounts are good alternatives for your cash.
But money market funds offer a higher rate of return than these other short-term investments.
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One of the best money market mutual funds is the Vanguard Prime Money Market Fund. This fund has a current yield of 1.69%. That is way more than any checking and savings account are offering.
Money market funds are considered very safe. However, they are not FDIC insured. If the lack of FDIC insurance concerns you, you may wish to invest in online savings accounts, money market accounts, or certificate of deposits (CDs).
In this article, we will define what a money market fund is. We will list the cons and pros of those funds. We will address the main situations you will need these type of funds. Finally, we will list the best money market mutual funds to choose from.
What are money market funds?
Money market funds are a type of mutual funds. They were launched in 1975 as a way to provide investors quick liquidity to their cash, provide current income and protect the investors’ principal.
Since then, they have become extremely popular. Unlike other mutual funds which focus on other securities such as stocks and bonds, they invest in “money market” securities.
Large companies and corporations, financial institutions and the U.S. government borrow money by issuing “money market” securities as promises to repay the debts.
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For instance, the U.S. government borrows money by selling bonds or Treasury bills or notes. Banks borrow money by selling certificate of deposit (CDs).
Big companies borrow money by issuing IOUs called commercial paper. These money market securities make up the money market fund.
Mutual fund and investment companies such as Vanguard and Fidelity offer these investments. They are low risk and they provide high yield.
Some funds are intended for retail investors. Retail investors are natural investors like you and me.
On the other hand, there are funds that are intended for institutional investors. Those funds usually require high minimum investments.
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Money Market funds vs. Money Market Accounts
The names may sound the same. But, they are two different types of investments.
To recap, a money market fund is a type of mutual fund. A mutual fund company such as Vanguard or Fidelity offers this type of investment. These funds invest in short-term debt. They offer higher returns than money market accounts.
On the other hand, a money market account is a type of savings account. Banks offer them.
But the rates of return are typically higher than that of a typical savings account. Unlike money market funds, they are insured by the FDIC.
Money market fund advantages:
Money market funds are one of the best and safest places to invest your hard-earned money. You will earn more interest than in a regular savings or checking account. Here are some of the advantages of these funds.
They are very safe. Money market funds are not FDIC insured, like savings accounts and CDs are. But, they are very safe.
Since they were launched, only 2 out of hundreds have run into trouble. If you concerned about the lack of insurance, you may wish to consider an online savings account or a money market account.
They are liquid and easily accessible. Another advantage of money market funds is that you have immediate access to your money.
You may withdraw your money anytime you wish without incurring penalty. Also, you can cash in your shares by phone, online, by mail or through your broker with relative ease.
You may write checks. Another positive aspect of a money market fund is that you can tap your money by writing checks against your account with no charge.
And some funds allow you to write checks for any amount for free.
They provide higher yields. They pay higher yields than a traditional savings account.
The reason is because the borrowers, i.e., the US government and big corporations are solid institutions and they agree to repay the debts at high interest rates.
Tax advantages. Some funds invest in securities where the interests are exempt from federal taxes, and in some cases state income taxes.
All of these factors make money market funds popular with people who want to invest for their short term goals.
While there several pros to investing in money market funds, there are some cons as well.
Lower return. Because access to your money are relatively easy in a money market fund, they have lower returns than other investments such as stocks, bonds and index fund.
They are not FDIC insured. As mentioned earlier, the federal government does not insure these funds .
Other investments such as online savings accounts, money market accounts, certificate of deposits are. But again they are very safe.
However, if the lack of FDIC insurance bothers you, stick with bigger mutual fund companies.
Situations when investing in money market funds makes sense?
You have a short-term investment goal. You may want to invest in these funds for short-term goals.
If you’re planning on buying a house in the next year or so and looking for safe place to save for the down payment, then they’re a good place for your cash.
You’re saving for a rainy day. If you’re saving for an emergency fund, a money market fund is also a good place to park your cash.
You certainly don’t want to invest in the stock market, because you can lose money within a relatively short period of time due to market volatility.
You want to diversify your portfolio. Money market funds are not aggressive investments such as stocks or bonds.
That’s why these funds are safer and very conservative. When the stock market plunges, these funds can balance your portfolio out.
So, you can use this type of investment as a complement to your other and riskier investments.
The best Vanguard money market mutual funds:
Vanguard Prime Money Market
Vanguard Treasury Money Market
Vanguard Federal Money Market
Vanguard Municipal Money Market
List of best money market funds
1. The Vanguard Prime Money Market Fund (VMMXX).
This Fund is perhaps one of the best out there.
However, this fund requires a minimum deposit of $3,000 just to open an account. This can be steep for a beginner investor with little money. The expense ratio is 0.16%.
There is no purchase or redemption fees. The fund has a total asset of $127.5 billion as of January 2020.
The Vanguard Prime Money Market primarily invests in foreign bonds, U.S. treasury bills, and U.S Government obligations.
2. The Vanguard Treasury Money Market Fund (VUSXX).
As the name suggests, this Vanguard money fund only invests in U.S. Treasury bills. However, the fund has a minimum initial investment of $50,000.
It may be out reach for beginner investors with little money. But the expense ratio is 0.09%.
The current yield is 1.58% while the 10 year yield is 0.55%. If you are a wealthy investor, you should consider this fund.
3. The Vanguard Federal Money Market Fund (VMFXX).
This Vanguard money fund is perhaps the safest and most conservative of all funds, simply because they invest in U.S. government securities.
U.S. guaranteed securities are considered risk-free investments. It intends to provide current income while maintaining liquidity.
This Vanguard fund requires a $3,000 initial minimum investments. It has a 0.11% expense ratio.
The current yield is 1.58% and a 10 year yield of 0.55%.
So, if you have a short term goal and are interested in a Vanguard fund that invests in U.S government securities, you may wish to consider this fund.
4. Vanguard Municipal Money Market Fund.
This Vanguard fund invests in short-term, high quality municipal securities.
What makes this fund a great one is that it provides income that is exempt from federal personal income taxes.
If you are in a higher tax bracket and are looking for a competitive tax-free yield, you should consider this fund.
Similar to other funds, the initial minimum investment is $3,000 with a 0.15%. This fund has a current yield of 1.20% and a 10 year yield of 0.44%.
Overall, you should consider investing in these best money market funds, because they generally pay you better than bank savings accounts and money market accounts.
But the FDIC does not insure you. However, they are very safe. If the lack of FDIC insurance does not bother you, you should try them.
Decide whether investing in money market is best for you
While a money market fund may sound great, it’s not for everyone. It won’t help those with a long term investment strategy, such as retirement.
For those with a long term focus, investing in individual stocks, real estate, or index funds may be an option instead.
Moreover, younger and aggressive investors should keep less money in money market funds than older investors who are approaching retirement.
However, if you’re looking to make a purchase soon (in the next year or so), such as buying a home, these funds make sense.
In addition, investors who want to diversify their portfolio may find that money market funds are great investments as they are very safe when compared to risky alternatives such as stocks and bonds.
Work With A Financial Advisor Near You
If you have questions beyond the best money market mutual funds, you can talk to a financial advisorÂ who can review your finances and help you reach your goals. Find one who meets your needs withÂ SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals,Â get started now.
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The post The Best Money Market Mutual Funds To Consider appeared first on GrowthRapidly.
I love making things automatic. Whether it is bill-paying, direct deposit, prescription renewals, or investing, making things automatic makes life easier, and that is where our Betterment investing review comes in.
When it comes to retirement planning, an overwhelming number of online tools and websites promise to help you create a dynamic and profitable portfolio while minimizing fees.
This growing list of services includes robo-advisors, a class of financial websites that offer to manage your portfolio with minimal in-person interaction and a heavy reliance on the latest investing tools and software.
One of the most popular robo-advisors by far is Betterment. Conceptualized by its founders in 2008, Betterment has since grown to help its customers invest billions of dollars of their hard-earned dollars. This is an investment platform that puts your investing on cruise control, and even allows you to make money watching TV! You can open an account with no money at all, and get the benefit of professional, low-cost investment management that enables you to invest in thousands of securities with as little as a few hundred dollars.
It hasnât been easy. With other competitors like Wealthfront and Personal Capital always a few steps behind them, Betterment has struggled to find a way to stand out. Even with the competition, Betterment has emerged as one of the top online brokerage accounts and continues to grow its market share.
Open an account
0.25% to 0.40% annual management fee, depending on the plan
No trade, transfer or rebalancing fees
No minimum balance
Hands-off investing tailored to your goals and risk preference
Betterment is an online, automated investment manager that uses advanced algorithms and software to find the perfect investment strategy for your portfolio and individual needs.
The main difference between investing your money with a traditional financial advisor and Betterment is that there is minimal human interaction. Unless you email or call in, your communication with an individual advisor will be very minimal.
But, there is some good news to counteract the lack of individual service. Because of lower operating costs, Betterment is able to charge lower fees than traditional financial advisors. This can be huge for individuals who want to take a hands-off approach to their retirement accounts, yet donât want to pay top dollar for access to a top-tier financial advisor in their area.
Using complex investment software, Betterment allocates your investment portfolio based on your individual circumstances, investment time horizon, and thirst for risk.
In the meantime, they keep fees at a minimum by using ETFs (exchange-traded fund) that let you have a diversified portfolio, like mutual funds, but are tradeable much like stocks.
Since ETFs come with very low expense ratios, Betterment is able to pass those savings along to the consumer. Although the program already manages over $16 billion for their clients, they are still growing at a rapid pace.
Because the service is able and willing to deal with investors at all stages of wealth accumulation, it has become a go-to for both experienced and novice investors with various investing goals.
Further, Bettermentâs portfolio strategy isnât geared just for retirement savings; the service can also improve your returns on dollars you invest for short-term and medium-term goals like saving for college, taking an annual vacation, or building up a cash reserve.
How Betterment Works
Like post other robo-advisors, Betterment provides complete, automated investment management of your portfolio. When you sign up for the service, youâll complete a questionnaire that will determine your risk tolerance, investment goals, and time horizon. From that information, Betterment determines your portfolio will be designed as conservatives, aggressive, or some level in between.
Over time however, Betterment may adjust your portfolio to become gradually more conservative. For example, as you move closer to retirement, your asset allocation will be gradually shifted more heavily in favor of safe investments, like bonds.
Your portfolio will be constructed of exchange traded funds (ETFs), which are low-cost investment funds designed to track the performance of an underlying index. In this way, Betterment attempts to match the performance of the underlying indexes, rather than to outperform them. For this reason, investing with Betterment â and most other robo-advisors â is considered to be passive investing. (Active investing involves frequent trading of stocks and other securities in an attempt to outperform the market.)
Betterment also uses allocations based on broad investment categories. There are three in total:
Safety Net â These are funds allocated for near-term needs, such as an emergency fund.
Retirement â This will naturally be your long-term investment account and held in tax-sheltered IRAs.
General Investing â This allocation is dedicated to intermediate goals, maybe saving for the down payment on a house or even for your childrenâs education.
Given that each of the three broad goals has a different time horizon, the specific portfolio allocation in each will be a little bit different. For example, the Safety Net will be invested in cash type accounts for safety and liquidity.
Betterment Advantages And Disadvantages
Thereâs no minimum investment required.
The low annual fee of 0.25% on the Digital plan can allow you to have a $20,000 account managed for just $50 per year, or a $100,000 account for just $250.
Tax-loss harvesting is available at all taxable accounts.
Betterment Premium provides unlimited access to certified financial planners, providing a service similar to traditional investment advisors, but at a fraction of the cost.
The No-fee Checking and Cash Reserve give you cash management options to go with your investing activities.
Betterment offers several portfolio options, including Smart Beta, Socially Responsible Investing, and the BlackRock Targeted Income Portfolio.
The use of value funds also adds the potential for your investment accounts to outperform the general market, since value stocks tend to be underpriced relative to their competitors.
Flexible Portfolio will give you some control over your investment allocations, which is a feature absent from most robo-advisors.
Bettermentâs annual advisory fee is on the low end of the robo-advisor range. But there are some robo-advisors charging no fees at all.
Betterment doesnât offer alternative investments. These include natural resources and real estate, which are offered by some of their competitors.
External account syncing is available only with Betterment Premium.
The Betterment Investment Methodology
Like most other robo-advisors, Betterment manages your investment account using Modern Portfolio Theory, or MPT. The theory emphasizes proper allocations into various asset classes over individual security selection.
Your portfolio is divided between six stock asset allocations and eight bond asset allocations. Each allocation is represented by a single ETF thatâs tied to an index specific to that asset class. The single ETF will provide exposure to scores or even hundreds of securities in each asset class. That means collectively your investment will be spread across thousands of securities in the US and internationally.
The six stock asset allocations are as follows:
US Total Stock Market
US Value Stocks â Large Cap
US Value Stocks â Mid Cap
US Value Stocks â Small Cap
International Developed Market Stocks
International Emerging Markets Stocks
The eight bond asset allocations are as follows:
US High Quality Bonds
US Municipal Bonds (will be held in taxable investment accounts only)
US Inflation-Protected Bonds
US High-Yield Corporate Bonds
US Short-Term Treasury Bonds
US Short-Term Investment Grade Bonds
International Developed Market Bonds
International Emerging Markets Bonds
Since Betterment offers tax-loss harvesting with taxable investment accounts, most asset classes will have two or three very similar ETFs. This will enable Betterment to sell a losing position in one ETF to reduce capital gains in winning asset classes. Alternative ETFs are then purchased to replace the sold funds to maintain the target asset allocations in your account.
Tax-loss harvesting is becoming an increasingly popular investment strategy because it effectively defers capital gains taxes into future years. Itâs available only for taxable accounts, since tax-sheltered accounts have no immediate tax consequences.
How Betterment Compares
Here’s how Betterment compares to the previously mentioned companies, Wealthfront and Personal Capital.
Minimum Initial Investment
0.25% on Digital; 0.40% on Premium (account balance over $100k)
0.25% on all account balances
0.89% on most account balances; reduced fee on balances > $1 million
On Premium Plan only
Yes, on all taxable accounts
Yes, on all taxable accounts
Yes, on all taxable accounts
Yes, on Premium Plan only
Betterment Accounts and Options
For the first few years of Bettermentâs existence they offered a single investment account serving as a one-size-fits-all plan. But thatâs all changed. They still offer basic investment accounts, but they now give you a choice of multiple investment options.
This is Bettermentâs basic investment plan. There is no minimum initial investment required, nor is there a minimum ongoing balance requirement. Betterment charges a single fee of 0.25% on all account balances.
You can also add any other portfolio variations, except the Goldman Sachs Smart Beta portfolio, which has a $100,000 minimum account balance requirement.
Betterment Premium works similar to the Digital plan, but it delivers a higher level of service. The plan provides external account synching, giving Betterment a high altitude view of you your entire financial situation. External investment accounts can help in enabling Betterment to better coordinate your portfolio allocations with assets held in outside accounts. They can also make recommendations out to better manage those external accounts.
And perhaps the biggest advantage of the Premium plan is that it comes with unlimited access to Bettermentâs certified financial planners. In this way, Betterment is competing more directly with traditional investment advisors, but doing it with a robo-advisor component.
Youâll need a minimum of $100,000 to invest in the Premium plan, and the annual advisory fee is 0.40%. Thatâs just a fraction of the usual 1% to 2% typically charged by traditional investment advisory services.
Betterment Cash Reserve
The account pays a variable interest rate, currently set at 0.40% APY. Betterment doesnât actually hold these funds directly, but rather invest them through participating program banks.
Thereâs no fee for this account, and you can move money as often as you want. And for those with very high cash balances, the account is FDIC insured for up to $1 million through the program banks.
Betterment Socially Responsible Investing (SRI)
SRI portfolios are becoming increasingly popular in the robo-advisor space. It involves investing in companies that meet certain standards for social, environmental, and governance guidelines. Betterment indicates that the ETFs they use in their SRI portfolio have produced a 42% increase in their social responsibility scores.
SRI portfolios work with both the Digital and Premium plans, using a similar investment methodology. But they make certain modifications, holding ETFs based on SRI in place of the ETFs used in non-SRI portfolios.
SRI portfolios do not require a minimum balance and charge no additional fees. And like their Digital and Premium plans, taxable SRI investment accounts take advantage of tax-loss harvesting.
Betterment Flexible Portfolios
The key word in the name is âflexibleâ because the main feature is adding personal options to your portfolio allocations.
This is done by adjusting the individual asset class weights in your portfolio. For example, if you have a 7% allocation in emerging markets, you may choose to increase it to 10% if you believe that sector is likely to outperform others. But you can also decrease the allocation if it makes you feel uncomfortable.
Betterment Tax-Coordinated Portfolio
This is less of a formal portfolio and more of an investment strategy. It must be used in combination with a taxable investment account and a tax-sheltered retirement account. Betterment will then allocate investments based on their tax impact.
For example, income generating assets â that produce high dividend and interest income â are held in a tax-sheltered account. Investments likely to generate long-term capital gains are held in a taxable investment account, since you will be able to take advantage of lower long-term capital gains tax rates.
Goldman Sachs Smart Beta
This option is for more sophisticated investors, and requires a minimum account balance of $100,000. And since it is a high risk/high reward type of investing, it also requires a higher risk tolerance.
Betterment uses the same basic investment strategy as they do in other portfolios. But itâs an actively managed portfolio that will be adjusted in an attempt to outperform the general market. Securities will be bought and sold within the portfolio and can include either individual securities or Smart Beta ETFs.
The portfolio has many variations, including a wide range of allocations. Stocks are chosen based on four qualities: good value, strong momentum, high quality, and low volatility.
And like other portfolio variations Betterment offers, there is no additional fee for this option.
BlackRock Target Income Portfolio
Betterment recognizes that some investors are more interested in income than growth. This will particularly apply to retirees. The BlackRock Target Income Portfolio invests in portfolios based on your risk tolerance. This can mean low, moderate, high, or even aggressive.
Those categories may seem unusual for an income generating portfolio. But while the portfolio attempts to minimize risk of principal, it also recognizes that some investors are willing to add risk to their portfolio in exchange for higher returns.
A low-risk portfolio may have a higher allocation in US Treasury securities. An aggressive portfolio may center primarily on high-yield corporate bonds or even emerging-market bonds that have higher interest rates due to greater risk.
Betterment No-fee Checking
Provided by Betterment Financial LLC in partnership with NBKC Bank, this is a true no-fee checking account. Not only are there no monthly maintenance fees, but there are also no overdraft or other fees. Theyâll even reimburse all ATM fees and foreign transaction fees you incur. And thereâs not even a minimum balance requirement.
Youâll be provided with a Betterment Visa Debit Card with tap-to-pay technology, that you can use anywhere Visa is accepted. All account balances are FDIC insured for up to $250,000. And as you might expect from a company on the technological cutting edge, you can deposit checks into the account using your smartphone.
Check out our full Betterment checking review.
Betterment Key Features
Minimum initial investment: Betterment requires no funds to open an account. But you can begin funding your account with monthly deposits, like $100 per month. This method will make it easier to use dollar-cost averaging to gradually move into your portfolio positions.
Available account types: Joint and individual taxable investment accounts, as well as traditional, Roth, rollover and SEP IRAs. Betterment can also accommodate trusts and nonprofit accounts.
Portfolio rebalancing: Comes with all account types. Your portfolio will be rebalanced when your asset allocations significantly depart from their targets.
Automatic dividend reinvestment: Betterment will reinvest dividends received in your portfolio according to your target asset allocations.
Betterment Mobile App: You can access your Betterment account on your smartphone. The app is available for both iOS and Android devices.
Customer contact: Available by phone and email, Monday through Friday, from 9:00 am to 8:00 pm, Eastern time.
Account protection: All Betterment accounts are protected by SIPC insurance for up to $500,000 in cash and securities, including up to $250,000 in cash. SIPC covers losses due to broker failure, not those caused by market value declines.
Financial Advice packages: Betterment offers one-hour phone conferences with live financial advisors on various personal financial topics. Five topics are covered:
Getting Started package: This package gives new users the professional vote of confidence they need as a professional will assess their account setup. $199
Financial Checkup package: This package takes it a step further, providing the customer with a professional opinion on their portfolio and financial circumstances. $299
College Planning package: As its name implies, this package helps parents who are investing with the goal of paying for their childrenâs college education in the next 5-18 years. $299
Marriage Planning package: Merging finances can be tricky, so Betterment created this plan to help engaged couples and newlyweds to succeed as they unite their lives and assets. $299
Retirement Planning package: Your investment goals and strategies change as you near retirement. This particular package helps keep you on target to meet them. $299
Retirement Savings Calculator: Robo-advisors are popular choices for retirement accounts. For this reason, Betterment offers the Calculator to help you project your retirement needs. By entering basic information in the calculator (it will sync external accounts if you have a Premium account â including employer-sponsored retirement plans) it will let you know if you are on track to meet your goals or if you need to make adjustments.
How To Sign Up For A Betterment Account
The Betterment sign up process is one of the most user-friendly out there for any brokerage. It comes with easy-to-follow instructions and as streamlined registration process which users can navigate through in a matter of minutes.
First get the process started by clicking the button below.
Sign up for a Betterment Account
After the initial sign up process, users can expect a simple transaction as they transfer funds into the account, much like moving money from a checking to savings account.
When you begin the sign-up process, youâll be given a choice of four different investment goals:
I chose âInvest for retirementâ. It will ask your current age, your annual income, then give you a choice of accounts to use. That includes a traditional, Roth, or SEP IRA, or even an individual taxable account. I selected a traditional IRA.
Based on a 30-year-old with a $100,000 income, Betterment return the following recommendation:
You even have the option to have the specific asset allocations listed. After clicking âContinueâ, youâll be asked to provide your email address and create a password. Youâll then be taken to the application, which will ask for general information, including your name, address, phone number, and how you heard about Betterment.
Once your account has been set up, you can fund it immediately, by connecting your bank account, or by setting up recurring deposits.
You can also set up other accounts, such as âManage spending with Checkingâ or âInvest for a long-term goalâ.
Why You Should Open An Account With Betterment
While nearly anyone who invests could benefit from the online portfolio management and advising, this service is definitely geared to certain types of investors. In most cases, Betterment will work best for:
Hands-off investors who have some investing knowledge â Since it takes care of the heavy lifting for you, it works best for investors who want to take a hands-off approach to their investment portfolio. Passive investors can let Betterment handle the logistics while using online account management to keep a close eye on their accounts.
Novice investors who need help â Beginning investors who are just learning the ropes can turn to Betterment for online portfolio management with low fees. The many online tools and user-friendly interface make it easy for beginners to get a grasp on basic financial concepts and investing strategies.
Robo-advisors are growing in popularity and could easily replace in-person advisors in the near future. With lower fees and advanced software that can maximize results, online investing is certainly gaining an edge.
Whether Betterment is right for you depends on your individual needs and investing goals. If youâre a hands-off investor who wants to grow your retirement funds without paying a lot of fees, then Betterment might be ideal. Additionally, beginning investors can benefit handsomely from the online tools and investing education offered through the Betterment website.
If you think Betterment investing might be exactly what your portfolio needs, sign up for a new account today.
However, if you determine that you would be better served by a more hands-on approach, check out the other online brokerage account options. Being a certified financial planner, I have had a chance to work with several of these platforms and have done the following reviews:
Motif Investing Review
Lending Club Review
Ally Invest Review
The post Betterment Investing Review: Make Investing Automatic appeared first on Good Financial CentsÂ®.
One of the most exciting parts of becoming an adult is moving out of your old place and starting your own life. However, as is the case with most major life events, moving out comes with a lot of added responsibility. Part of this duty is knowing and understanding your budget when shopping for the perfect apartment, condo, duplex, or rental house. So how much should you really spend on rent?
The 30 Percent Threshold
The first step in deciding how much you should spend on rent is calculating how much rent you can afford. This is done by finding your fixed income-to-rent ratio. Simply put, this is the percentage of your income that is budgeted towards rent.
As a general rule of thumb, allocating 30 percent of your net income towards rent is a good place to start. Government studies consider people who spend more than 30 percent on living expenses to be âcost-burdened,â and those who spend 50 percent or more to be âseverely cost-burdened.â
When calculating your income-to-rent ratio, keep in mind that you should be using your total household income. If you live with a roommate or partner, be sure to factor in their income as well to ensure youâre finding a rent range thatâs appropriate for your income level.
If youâre still unsure as to how much rent you can afford, consider an affordability calculator. Remember to consult a financial advisor before entering into a lease if youâre unsure if youâll be able to make rent.
Consider the 50/30/20 Rule
After youâve set a fixed income-to-rent ratio, consider the 50/20/30 rule to round out your budget. This rule suggests that 50 percent of your income goes to essentials, 20 percent goes to savings, and the remaining 30 percent goes to non-essential, personal expenses. In this case, rent falls under âessentials.â Also included in this category are any expenses that are absolutely necessary, such as utilities, food, and transportation.
Letâs consider a hypothetical situation in which you make $4,000 per month. Under the 50/20/30 rule with a fixed income-to-rent ratio of 30 percent, you have $2,000 (50 percent) per month to spend on essential living expenses. $1,200 (30 percent) goes to rent, leaving you with $800 per month for other necessary expenses such as utilities and food.
Remember to Budget for Additional Expenses
Now that youâve budgeted for rent and essential utilities, itâs time to make a plan for how youâre going to furnish your apartment. One of the biggest shocks of moving out on your own is how expensive filling a home can be. From kitchen utensils to lightbulbs and everything in between, it can be pricey to make your space perfect.
For the most part, furniture falls under the 30 percent of personal, non-essential expenses. Consider planning ahead before a move and saving for home goods so that you donât go into major debt when it comes time to move out.
Be on the Lookout for Savings
If your budget is slightly out of reach for your dream apartment, try to nix unnecessary costs to see if you can make it work. Look for ways to cut down on utilities, insurance, groceries, and rent.
Utilities: Water, heat, and electricity are all necessities, but your TV service isnât. Cut the cord on TV and mobile services that may not serve you and your budget anymore. Consider swapping out your light bulbs for eco-friendly and energy-efficient light bulbs to cut down your electric bill.
Insurance: Instead of paying monthly renters insurance rates, save a fraction of the cost by paying your yearly cost in full. If you have a roommate, ask to share a policy together at a premium rate.
Groceries: Swap your nights out for a homemade meal. You can save up to $832 a year with this simple habit change. When grocery shopping, add up costs as you shop to ensure your budget stays on track.
Rent: One of the best ways to save on rent is to split the bill. Consider getting roommates to save 50 percent or more on your monthly rent.
A lease is not something to be entered into lightly. Biting off more rent than you can chew can lead to unpaid rent, which can damage your credit score and make it harder to find an apartment or buy a home in the future. By implementing these best practices, youâll hopefully find a balance between finding a place you love and still having room in your budget for a little bit of fun.
Sources: US Census Bureau
The post How Much Should You Spend on Rent? appeared first on MintLife Blog.
Be a smart shopper and plan your purchases according to this calendar, which plots the best deals, month by month.
What to Buy in January
Kick off the new year with big savings.
Retailers know that the newest TVs and other electronics are revealed at the annual Consumer Electronics Show in January. This makes January the best time to buy a TV, thanks to major discounts â as long as you donât covet the new, fancy models too much.
No need to rush to the bookstore in December to get a new wall or desk calendar. Buy one in January to get a discount.
Gym Memberships and Home Fitness Equipment
The pandemic may have kept you out of the gym, and you might still be hesitant to return. But gyms are known to offer big incentives to sign up and get fit in the New Year. Home gym equipment also goes on sale in January, as do scales, according to Consumer Reports. Hereâs some guidance on what equipment you need for a good, affordable home gym.
The yearly tradition of hosting a white sale dates back to the 1870s, when linens were only available in white. But modern white sales include linens and home goods in every color of the rainbow.
Donât be swayed by sheets with super-high thread counts â you probably donât know what different thread counts feel like.
I know, you have an entire 11 months until you get invited to your next ugly sweater party. But my Goodwill intel reports that January is the best time to find a truly hideous sweater for way cheap. Other Christmas supplies are also on sale in January, including holiday cards and decorations.
What to Buy in February
Fall in love with these deals during February.
Presidents Day is a good time to buy a mattress because it gives you a long weekend to shop with your partner for an item you should both agree on before buying.
Thatâs why retailers use the holiday to post sales on pricy items many people have put off buying or replacing for a while. Take advantage.
One of the best times to buy jewelry is in February â but only after Valentineâs Day.
Look for deep discounts after retailers remove their rose-colored glasses. Itâs not worth paying the âlove taxâ to celebrate with your sweetheart, anyway.
Also look for discounts on other Valentineâs Day goods, such as cards and chocolate after the holiday itself.
Winter coats take up a ton of room in your closet and just as much room in stores. Help retailers clear âem out this month, and youâll get a big discount.
What to Buy in March
Spring forward by making these smart purchases in March.
Donât wait until a week before your big family vacation to get a new suitcase. March is the best time to buy luggage, as itâs on sale to entice shoppers who are desperate to be done with their snowy, dreary winters and who crave a little spring break.
Just donât forget where you put it when itâs time to pack.
What to Buy in April
The smart shopper always plans ahead.
You donât have to wait until Fatherâs Day to find excellent prices on tools and home improvement gear.
If youâre eager to start your home DIY projects in the spring, go ahead and shop now.
Everyoneâs finally going outside again. Let sporting goods stores make it easier for you to keep up with your New Yearâs resolution (remember that?) by discounting those new kicks.
What to Buy in May
Is your refrigerator running? If not, May is a great time to get a new one.
I understand youâre not going to time your babyâs birth to get the best deal on all their accoutrements.
But if your kiddo needs a new stroller or high chair, May is a good time to shop, according to Consumer Reports â especially if you can grab the Memorial Day deals.
New refrigerator models debut in the summer. Shop in May to get last yearâs model at a better price.
You canât tell the difference between last yearâs refrigerator models and this yearâs, right? Didnât think so.
Also look for deals on other necessities like freezers, oven ranges and air conditioners, according to Consumer Reports.
What to Buy in June
Here come theâ¦ deals?
Hopefully 2021 proves to be a better year for travel. Planning a summer vacation? Travel early or late in the summer instead of during peak times. And youâll pay less for airfare if you can travel midweek.
Now that summer is in full swing, outdoor gear â like tents, backpacks, lanterns and even fitness gear â is marked down.
Cookware and China
June is typically peak wedding season, and stores hope youâve planned ahead to buy wedding registry gifts.
Now is when those items are discounted, and itâs the perfect time to replace or upgrade whatâs in your own cabinets.
What to Buy in July
Donât sweat these savings.
New styles hit stores in February and August, so retailers spend much of July clearing out old stock, especially over Fourth of July weekend â making this the best time to buy furniture.
July means humidity. Pick up an older version of a much-needed dehumidifier in July or August, according to Consumer Reports.
What to Buy in August
The dog days of summer offer some amazing bargains.
Computers (Except Apple Products)
Computer manufacturers typically release their new models in the summer, so back-to-school sales are a great time to buy last seasonâs model. The specs probably wonât be different enough for you to notice, unless youâre a hardcore gamer or designer.
Apple products, however, typically get announced in the fall, so hold off to get that new MacBook.
Grilling season doesnât stop at the stroke of Labor Day. Buy at the tail end of summer to enjoy your grill until almost Thanksgiving (OK, depending on where you live).
What to Buy in September
Back to school? More like back to the checkout lane.
Generally, September is the best month to buy Thanksgiving flights.
Hitting the prime booking window â plus our other top tips for saving on air travel.
Even though your local pool might be closed for the season, you should think about stocking up on swimsuits for next year.
This might not be a frequent purchase, but if youâre in the market for a new home, it can help to hold off past the busy spring and summer buying seasons.
Your costs typically drop a few percentage points at the end of September (after the kids have gone back to school), making this the best time to buy a house.
What to Buy in October
Thereâs a joke about spooky deals in here, but I wonât make it.
Jeans typically get discounted in October, after back-to-school sales have ended and families are stocked up on fall attire.
Goodbye summer, hello savings.
Itâs worth checking out the patio furniture if you donât mind storing it over the winter. When that first warm spring day hits, youâll be ready to bask in the sunshine.
October means fall leaves â and they are likely covering your yard. Pick up a leaf blower, and while youâre at it, get ready for the snowy days ahead with a snow blower, according to Consumer Reports.
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What to Buy in November
The days get shorter, but the deals get bigger.
This time of year is ripe with rock-bottom prices on giftable small appliances.
If youâre looking for a blender, food processor, coffee maker or anything else thatâll proudly take up space on your kitchen counter, itâs worth waiting until Black Friday sales begin in stores and online.
Bridal shops are slow before the proposal rush during the holiday season, so the few weeks before Thanksgiving is a good time to start trying on gowns.
Ask about sample sales and last yearâs styles that may be priced to move.
What to Buy in December
Celebrate the seasonâ¦ by shopping smart, obviously.
If your familyâs been begging for a backyard pool, December is the best time to have one installed. It might be chilly, but pool pros would rather avoid working on 90-degree days!
Plus, when their workload slows in the winter, many contractors are willing to lower their prices.
Toy deals stick around after those Black Friday and Cyber Monday sales in November.
Even if youâre done with holiday shopping for your little ones, consider picking up their favorite character and activity toys while theyâre still discounted to stash away for birthdays.
Lisa Rowan is a former staff writer and producer at The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:
Concurrently: Saving for two or more financial goals at the same time.
Sequentially: Saving for one financial goal at a time in a series of steps.
Each method has its pros and cons. Here’s how to decide which method is best for you.
You can focus intensely on one goal at a time and feel a sense of completion when each goal is achieved. It’s also simpler to set up and manage single-goal savings than plans for multiple goals. You only need to set up and manage one account.
Compound interest is not retroactive. If it takes up to a decade to get around to long-term savings goals (e.g., funding a retirement savings plan), that’s time that interest is not earned.
Compound interest is not delayed on savings for goals that come later in life. The earlier money is set aside, the longer it can grow. Based on the Rule of 72, you can double a sum of money in nine years with an 8 percent average return. The earliest years of savings toward long-term goals are the most powerful ones.
Funding multiple financial goals is more complex than single-tasking. Income needs to be earmarked separately for each goal and often placed in different accounts. In addition, it will probably take longer to complete any one goal because savings is being placed in multiple locations.
Working with Wise Bread to recruit respondents, I conducted a study of financial goal-setting decisions with four colleagues that was recently published in the Journal of Personal Finance. The target audience was young adults with 69 percent of the sample under age 45. Four key financial decisions were explored: financial goals, homeownership, retirement planning, and student loans.
Results indicated that many respondents were sequencing financial priorities, instead of funding them simultaneously, and delaying homeownership and retirement savings. Three-word phrases like “once I have…,", “after I [action],” and “as soon as…,” were noted frequently, indicating a hesitancy to fund certain financial goals until achieving others.
The top three financial goals reported by 1,538 respondents were saving for something, buying something, and reducing debt. About a third (32 percent) of the sample had outstanding student loan balances at the time of data collection and student loan debt had a major impact on respondents’ financial decisions. About three-quarters of the sample said loan debt affected both housing choices and retirement savings.
Based on the findings from the study mentioned above, here are five ways to make better financial decisions.
1. Consider concurrent financial planning
Rethink the practice of completing financial goals one at a time. Concurrent goal-setting will maximize the awesome power of compound interest and prevent the frequently-reported survey result of having the completion date for one goal determine the start date to save for others.
2. Increase positive financial actions
Do more of anything positive that you’re already doing to better your personal finances. For example, if you’re saving 3 percent of your income in a SEP-IRA (if self-employed) or 401(k) or 403(b) employer retirement savings plan, decide to increase savings to 4 percent or 5 percent.
3. Decrease negative financial habits
Decide to stop (or at least reduce) costly actions that are counterproductive to building financial security. Everyone has their own culprits. Key criteria for consideration are potential cost savings, health impacts, and personal enjoyment.
4. Save something for retirement
Almost 40 percent of the respondents were saving nothing for retirement, which is sobering. The actions that people take (or do not take) today affect their future selves. Any savings is better than no savings and even modest amounts like $100 a month add up over time.
5. Run some financial calculations
Use an online calculator to set financial goals and make plans to achieve them. Planning increases people’s sense of control over their finances and motivation to save. Useful tools are available from FINRA and Practical Money Skills.
What’s the best way to save money for financial goals? It depends. In the end, the most important thing is that you’re taking positive action. Weigh the pros and cons of concurrent and sequential goal-setting strategies and personal preferences, and follow a regular savings strategy that works for you. Every small step matters!
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This article is from Barbara OâNeill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:
How to Manage Your Money â No Budgeting Required
Nothing says summertime like a BBQ, and getting friends and family together for some food and friends for the Fourth of July is the perfect way to celebrate. Iâm usually the host for these get-togethers, and even though I absolutely love having people over, feeding everyone can take a toll on your budget, especially with a big family like mine.
Now that Iâve been using Mint to keep track of expenses, here are some tips on how to have a cost-conscious Fourth of July spread:
1) Declare the BBQ a Potluck.
Thereâs no secret here: potlucks save money AND time. When you invite your guests to bring dishes to the party, that basically means theyâre not only helping out with the food budget, theyâre also taking the time to shop for the ingredients and deliver it to your house ready to eat! I would suggest setting some guidelines for your guests so that there is a variety of food in your spread and not just 5 versions of chips and salsaâ¦.and thatâs it. To divide up the dishes, you could try a few different methods:
Assign your guests by categories. If thereâs an easy way to divide up your guests, like by their last name, or their birthday month, then you could assign one set of guests appetizers, and another set of guests foods for the grill, for example. For this option, I would suggest asking your guests to confirm their choice with you and even post it on a message board if you are using a website to plan your party, so that you know and your other guests whatâs coming and to avoid too much of one type of food.
Ask guests to bring specific foods. If your best friend makes the most amazing potato salad, and you need potato salad, ask your best friend to bring potato salad. Thereâs no need to do all the work when you can tap into the strengths of your guests. For those who are known to shy away from cooking, ask them to bring something simple like a salad or lemonade.
2) Set a food budgetâ¦.and stick to it!
This tip comes directly from my previous post on Healthy Food on a Budget because itâs also important to serve your guests healthy food and stick to your budget. Just because itâs a party doesnât mean you should let your health and your money slip up! Itâs easy to set up budgets in Mint, like saving for a vacation, but you can also set up smaller budgets like for a summer BBQ celebration. Ideally, since youâre having everyone over for a potluck, this get-together wonât take a huge toll on your wallet, but itâs still important to set limits for what you can spend. I like to make it a fun challenge to see how much money I can save and get the most bang for my buck, while not cutting corners on the quality of food served for my guests.
3) Check out the weekly sales ads.
Donât throw away those ads because right before Fourth of July, the mail will be filled with sales on foods for entertaining. Gather those ads up to look through whatâs on sale for the week and map out your menu from those hot buys. If you have apps for your favorite stores, check those out too because Iâve seen in-app coupons that werenât in the print ads that have saved me some money. Once you cross-reference the sales and build your shopping list, also plan out where you will shop from. If you have to travel from 2 different stores to save $15 dollars, I think itâs worth it to take the time to shop smart. Sure, it may take an extra 15 minutes, but I can bet that youâll feel a lot better to have that extra money in your wallet.
4) Pick a dish that saves you money and time.
As the host of the party, youâll be pretty busy with all the details of the day so your time on the day of the party will be limited. From cleaning up the house to setting up the grill, thereâs plenty to do before guests show up. The last thing you want to do is prep a labor-intensive dish when there is so much more on that to-do list. To save money and time, I like to serve up a dessert dish that brings a wow-factor to the party, my Banana Boat Sâmores. These delicious treats light up the eyes of all my guests, and if they knew how cost-effective they are, theyâd light up even more!
To save money, I like to use fruit for dessert, especially in the summer season, because theyâre more affordable, easier to prepare, and most importantly, theyâre healthier! Bananas are only 19 cents each, so just make sure to have at least one banana per guest. I also know that marshmallows and Graham crackers are always on sale for $1 around this time of year, so already, this is a dish that costs less than 50 cents per serving.
To save time, I like this dish because you can have your guest prep their own Banana Boat. All you have to do is set up a station of the ingredients and let them make their creation as they please. When you get your guests involved in the food preparation, youâre saving some valuable time on your end, but also your guests are having fun! Theyâll leave your party with another recipe under their belt as well, so itâs a win-win for everyone.
5) Buy your food in bulk bins.
Donât pass up those bulk bins on your shopping trip, because buying from these can be 30-40% cheaper than packaged branded items. For the chocolate, I paid per ounce from the bin instead of buying packages. Since Iâm setting up a station for my guests at my own home, I donât need the packaging or extra chocolate so why should I pay extra for it? Half a pound only costs $2, whereas if I were to buy a bag or a bar it would cost me close to $5.
With these tips on how to have a cost-conscious Fourth of July spread, I hope you can spread out your budget and use some of that money you save on other fun activities this summer!
The post How To Create A Budget Friendly Spread For Fourth Of July appeared first on MintLife Blog.