Time Is Your Most Important Investing Asset

Time Is Your Most Important Investing Asset

Time Is Your Most Important Investing Asset

Click here to view original web page at twocents.lifehacker.com

If you have money to invest, what’s keeping you from realizing higher gains? Probably time.

You build wealth through investing by keeping your money in the market. Take it out too early, and you risk losing out on a significant amount of money over the course of your life. As James Royal writes for NerdWallet, “your length of ‘time in the market’ is the best predictor of your total performance.” Here’s why.

(Note: That doesn’t mean “timing the market,” as in trying to bet when the best time to buy and sell is. In fact, that’s a terrible way to try to make money, and you’ll probably always lose.)

The S&P 500 has historically returned around 10 percent annually not including dividends, but that doesn’t mean you can invest one day and then cash out a year later and expect 10 percent more money. You need to stay in the market. Royal writes,

Over the 15 years through 2017, the market returned 9.9 percent annually to those who remained fully invested, according to Putnam Investments. However:

Over the 15 years through 2017, the market returned 9.9 percent annually to those who remained fully invested, according to Putnam Investments. However:

  • If you miss just the 10 best days in that period, your annual return drops to five percent.
  • If you miss the 20 best days, your annual return drops to two percent.
  • If you miss the 30 best days, you actually lose money (-0.4 percent annually).You can’t “time” the market to hit just the best days. You’re riding out volatility, and you’re benefitting from compounding returns and dividends. There’s a reason everyone tells you to start early: The sooner you do, the more money you’re likely to end up with. You have time on your side.

    So, why do people miss out on the gains? As Royal notes, it comes down to fear and greed. Fear is more or less not understanding the market—if, say, you were born in the mid-1980s and watched everything collapse as you were leaving college in 2008, you’re probably reluctant to throw everything into the market. But waiting for stocks to start climbing—when the market is “safe”—is a terrible idea. There’s no ideal time to invest, except a long time.

    Greed is wanting things to be more interesting, to beat the earnings of “average” investors. Because none of us want to think we’re average, right? But as I’ve written before, the building blocks of your finances should be boring: Invest in low-cost index funds, consistently, for a long time. If you want to invest in individual companies, do your research first, and consider how the company will be doing in 10 or 20 (or more) years.

    Nothing is guaranteed, but investing for the long run—so that the market has time to dip and recover, as it always has—is going to be the best strategy for most people.

Personal Finance: Avoid investment scams: simple steps

Personal Finance: Avoid investment scams: simple steps

Personal Finance: Avoid investment scams: simple steps

Click here to view original web page at www.timesfreepress.com

Another investment scam made the news last week, this time close to home. Tennessee regulators busted a Colorado brew pub owner for selling unregistered investments in a Chattanooga company purporting to operate gas wells in Kentucky and promised excessive returns. On its face, the proposition had “keep away” written all over it. But as happens so often, some trusting souls succumbed to an enticing pitch without making even superficial inquiries into the bona fides of the peddler or the company. It is a cautionary tale that reinforces the need for investors to do their homework.Personal Finance: Avoid investment scams: simple steps

Investment sales are heavily regulated by both state and federal agencies. For individual investors, the first line of defense is registration of an investment with the Securities and Exchange Commission. While such registration does not imply a judgment on the potential for gain or loss, it does signify that the security has passed legal muster and is required to file public financial statements. Stocks listed for trading on the exchanges as well as many bonds and public partnerships are registered with the SEC and are readily available for purchase by any individual investor. You might still lose your shirt, but you will know that some level of due diligence has been conducted to ensure that the entity actually exists.

Securities that are not registered with the SEC have not undergone the same diligence process and should be accorded “caveat emptor” status: buyer beware. Purchase of unregistered securities (sometimes called private placements) is limited to so-called “accredited investors”, assumed to be sufficiently sophisticated to conduct reasonable vetting and whose net worth is adequate to withstand a significant loss on the investment. Accredited investors must have a consistent income in excess of $200,000 or a net worth in excess of $1 million. Most individuals do not qualify, and in general should stay far away from unregistered securities. Still, the siren song of plethoric profits is enchanting, so the next step is to verify the credentials of the seductress.

Without exception, anyone involved in the sale of securities must themselves be registered with the requisite agencies. Brokers, dealers and investment advisors and their sales representatives must have appropriate professional qualifications and be licensed by state or federal regulators in order to offer investments for sale. Many of the common instances of fraud are perpetrated by unregistered salespeople. Ironically, this is the easiest aspect of investing to research and verify, yet all too often this step is overlooked.

Before investing with anyone, make your first stop the BrokerCheck website at BrokerCheck.FINRA.org. This website is your gateway to the official record of investment firms and their personnel, including the states in which they are licensed as well as a history of any disciplinary actions to which they have been subject. A five minute visit to BrokerCheck would have saved several investors many thousands of dollars in the recent Chattanooga scam wreaked by the Colorado bartender-cum-broker.

Special diligence is warranted if you are pondering an unregistered investment. Even if a salesperson checks out with the Feds at BrokerCheck, it’s a good idea to touch base with your state’s securities regulators as well to see if there are any pending claims against the individual or the firm that may not have shown up in the FINRA database.

Finally, ask lots of questions. What licenses do you hold? Where are you registered? How are you being paid and how much? What is your background (and your favorite seasonal ale)? All fair game when it’s your money. Simple steps can help you avoid becoming a victim.

Christopher A. Hopkins, CFA, is a vice president and portfolio manager for Barnett & Co. in Chattanooga

7 things you think have been saving you money, but actually aren’t

7 things you think have been saving you money, but actually aren’t

7 things you think have been saving you money, but actually aren’t

Click here to view original web page at www.thisisinsider.com

Saving money feels good and so naturally, we all look for the best deals and promos to save an extra buck. But what if you found out that your saving tactics aren’t actually doing much for your bank account after all?

INSIDER spoke with several financial experts to find out the ways in which you may be investing your money that leave you with little to no savings or worse — that put you in debt.

It seems like a great idea in theory — buying food staples in bulk to save money — but you may want to think twice about doing this, according to Mark Charnet, founder, and CEO of American Prosperity Group.

“Consumers are spending an average of $50 a week buying items in large volumes and typically see 57% of that go to waste,” Charnet said.7 things you think have been saving you money, but actually aren’t

With food that has an expiration date, you want to be really careful about how much you think you’ll actually use, he explained. If you end up throwing away food that’s gone bad, you’re just wasting your money.

To avoid this, Charnet suggests before you start shopping in large quantities, make sure the items are a necessity or non-perishable so they don’t go bad before you use them.

Credit cards offering 1% to 2% cash back on purchases may seem like a great idea at first glance. But these promotions can cost you more than you think, according to Jeff Proctor, personal finance expert, and writer of DollarSprout.com.

Certain cards have a penalty APR of 29.99% that kicks in as soon as you miss a payment. This high APR can cost you hundreds of dollars in interest payments if you carry a balance, according to J.R. Duren, personal finance reporter at HighYa.com.

“So, if you carried a balance of $4,000 for an entire year at 29.99%, you’d end up paying about $1,200 in interest, which completely wipes out any cash rewards you’d get,” Duren told INSIDER.

These kinds of plans may offer you a sense relief, knowing you won’t have to worry about going over your data limit, but Nate Masterson, finance manager for Maple Holistics, said you may want to check to see how much data, talk, and text you actually use.

The average cell phone user doesn’t typically need “unlimited” so consider checking your total average usage over the past six months to see where you’re at.

Sure, being frugal is good, but choosing price over quality isn’t always the best idea, according to Chelsea Hudson, Personal Finance Expert at TopCashback.com.

“Purchasing low-quality items to save a few bucks doesn’t always save you money. Instead, you’re often left with a product that breaks easily or you’re unsatisfied with and eventually, buy a better version, which means you spend more than you had to,” Hudson said.

It’s a smart idea to read the reviews for those cheaper alternatives to gauge the quality of the product over the high-quality item, Hudson advised.

Subscriptions include streaming services, subscription boxes, gym memberships, and magazine subscriptions. Many of these services start out very convenient but later on, end up breaking the bank, according to Ryan Heider, financial advisor at Cirrus Wealth Management.

In place of cable, some people overcompensate with too many streaming services, according to Charnet, that they only use for one or two shows. Then you have subscription boxes, which can be a fun surprise in the mail every month, but they often include items customers trash or sit on the shelf unused.

This leads to customers being charged indefinitely for some product or service they are never using, according to Heider, which ends up becoming a big waste of money.

This is a marketing strategy many of us are guilty of and we end up buying more than we originally intended just to meet a certain threshold in order to receive free shipping or a higher discount.

“While this might seem like you’re saving money, most consumers waste money by purchasing items they don’t need,” Hudson told INSIDER.

To avoid extra online fees, Hudson suggests selecting the “Pick Up In Store” option, which not only limits you to buy what you need but also keeps you from buying more for the convenience of free delivery.

Who doesn’t love a sale, especially a going-out-of-business sale? Unfortunately, these kinds of sales can be somewhat misleading, according to Hudson, and can cost you more than you bargained for.

“Reality is, most businesses going out of business raise their prices back to regular price and then stamp a 15% to 30% sale tag on each item. Not only will you pay more than a normal sale, but you can’t use any coupons,” she said.

So next time you see a closing out sale, don’t be fooled by the idea that a store going out of business must have unparalleled sales, Hudson told INSIDER, it’s likely not the case.

4 personal finance tips for financially fragile women

4 personal finance tips for financially fragile women

4 personal finance tips for financially fragile women

Click here to view original web page at www.foxbusiness.com

Small business expert Susan Solovic and Wall Street Journal editorial page writer Jillian Melchior on the new study that shows married women leave major financial decisions to their husbands.

They’re the most financially vulnerable demographic in America: Women with credit scores below 700. Elevate’s Center for the New Middle Class says a majority of non-prime women live paycheck to paycheck and run out of money more often. They also aren’t financially prepared for a $1,200 emergency. While ongoing research shows women are often the financial stewards in their families, the survey found that only 39% of non-prime women believe they have the skills to manage their finances. Jonathan Walker, executive director of the Center for the New Middle Class shares four tips on what financially fragile women can do to boost their financial confidence.

Tap into apps

The financial situation for non-prime women is precarious. They are three times as likely as prime women to have lost a job in the prior 12 months; they’re more than twice as likely to have had their work hours reduced, and they are much less likely to have a safety net to save them from emergency expenses. Walker says leveraging apps is one of the most effective ways for non-prime women to manage their situation. Savings apps can help them build emergency savings accounts without forcing them to feel the burn of setting aside a chunk of their monthly income. Apps can also help alleviate stress, by moving money management concerns to the back their minds. Non-prime women typically have a lot on their plates. They are often juggling responsibilities such as children and elderly parents living with them.

Tap into apps

The financial situation for non-prime women is precarious. They are three times as likely as prime women to have lost a job in the prior 12 months; they’re more than twice as likely to have had their work hours reduced, and they are much less likely to have a safety net to save them from emergency expenses. Walker says leveraging apps is one of the most effective ways for non-prime women to manage their situation. Savings apps can help them build emergency savings accounts without forcing them to feel the burn of setting aside a chunk of their monthly income. Apps can also help alleviate stress, by moving money management concerns to the back their minds. Non-prime women typically have a lot on their plates. They are often juggling responsibilities such as children and elderly parents living with them.

Don’t be content with what you don’t know

Walker says non-prime women are the group least likely to say they have the skills and knowledge to manage their finances well.

“Sometimes I joke that you need an undergraduate degree in personal finance these days just to understand how to optimally manage your own personal finances,” he says. “Women need to feel comfortable knowing that this is complicated, but it’s not out of their reach.”

Walker says if you don’t understand something, chances are that others don’t either. He says non-prime women should speak up about their needs with those creating personal finance content, including personal finance publications and websites, bloggers, authors and even financial services providers.

Get nerdy about personal finance

Prime women are twice as likely as their non-prime counterparts to have learned how to manage finances from their parents. Non-prime women most commonly learn from trial and error. If you have daughters, Walker says it’s important to teach them about personal finance and how to manage their money day-to-day. If you’re one of those women who did not learn financial management skills from your parents, he says you should take matters into your own hands. Take advantage of the plethora of personal finance management resources online, especially the ones tailored to women.

Walker says personal finance blogs are great places to start, and it is worth checking out what is available on social media. Many people in precarious financial situations are able to find community, support and creative ideas via social media groups. He says improving your knowledge is never outside of your reach.

Know your options

While it may seem counterintuitive to plan for problems, Walker says it’s important to look ahead and know what your options are. Ask yourself: how would I pay for an emergency $1,200 expense? If you plan for the unexpected, you will be in much better shape if the worst happens. Figure out which one of your family members or friends you can turn to in a pinch. Know how much money you need to put away in an emergency fund. Make sure you have room in your credit to borrow in case an emergency. He says if you do the research ahead of time, you can avoid walking through a payday lender’s door.

Financial fragility can cause an enormous amount of stress. Walker says women can benefit from knowing what they can do to relieve that stress. Find an outlet that will allow you to disengage from your finances. He says your escape will be even more constructive if it has a positive influence on your life.

“Take up a hobby that can earn a little extra money on the side, but take it up as a hobby,” Walker says. “Do more exercise to strengthen your health. Find an existence that is outside of our finances so that you can better approach the challenges that you face.”

Linda Bell joined FOX Business Network (FBN) in 2014 as an assignment editor. She is an award-winning writer of business and financial content. You can follow her on Twitter @lindanbell.

Money Monday: The Four Horsemen of Personal Finance

Money Monday: The Four Horsemen of Personal Finance

Money Monday: The Four Horsemen of Personal Finance

Click here to view original web page at www.clickondetroit.com

Finance blogger Len Penzo wrote a brilliant piece titled “Beware the Four Horsemen of Personal Finance.”Money Monday: The Four Horsemen of Personal Finance

 

 

 

 

Penzo’s “Four Horsemen of Personal Finance” are as follows:

  • Cigarettes
  • Lottery Tickets
  • Alcohol
  • Dining OutCigarettes: Forget the health consequences: Your higher spending level matches your addiction.Lottery Tickets are often called a “Stupid Tax” considering the astronomical odds of winning.

    Alcohol is much like cigarettes — soft drinks are about a quarter of the price and you get free refills

    Dining Out is five times more expensive than cooking in.

    Copyright 2018 by WDIV ClickOnDetroit – All rights reserved.

Close up view of woman's hand paying in cash at groceries store.

5 Ways To Stop Blowing So Much Money On Food

So, how did that “50/30/20 rule of budgeting” work out for you in 2017? You know, the one that says we should all spend no more than 50 percent of our income on necessities, allow 30 percent for discretionary items and sock away at least 20 percent for savings? Hoping for better results in 2018, right?

Truth is, the 50/30/20 formula eludes most of us. Some 69 percent of Americans have less than $1,000 in savings, and that includes many people near retirement age. It’s understandable: Housing and rent prices are at all-time highs, our incomes don’t allow for much discretionary spending, and many people enter the workforce already in debt from college loans. Saving anything let alone 20 percent of a stretched-thin income seems highly challenging.

But putting together a real savings plan is totally possible, and in some cases, actually pretty painless if you make some strategic tweaks. In a nutshell, we need to stop wasting our money on convenience, says former CNBC host and personal finance maven Suze Orman.

Where to start? The average American household spends most of its money — 62 percent of an average $56,000 in annual expenditures — on just three things: housing, transportation and food.

Housing and transportation costs aren’t as flexible as food costs, which account for 12.5 percent, or just over $7,000, of the average budget, according to the Bureau of Labor Statistics. And people often fall prey to bank-draining conveniences when they buy food  so it’s important spending category to focus on if you want to start saving.

Here are some tips to help you spend less on food this year:

vm via Getty Images

1. Pay cash for food.

Studies have shown that people who use cash spend 12 percent to 18 percent less than those using a credit card, and McDonald’s reports its average check is $7 when people use credit cards, versus $4.50 for cash. There is probably no better budgeting tool than leaving your credit card at home or removing it from your delivery apps. Going to the grocery store with $50 in cash applies the brakes to impulse purchases.

Why? Cash is real. It is tangible. We are detached when we swipe our credit cards, but cash is something you can feel, and you can see it dwindle as you work through your allotted food budget.

Tip: Consider signing up for Withdraw Cash Wednesday, a brainchild of the ATM Industry Association that encourages consumers to keep cash on them and use it for everyday purchases because of its budgeting benefits and freedom from interest charges. WCW sends you reminders to refill your wallet every Wednesday and passes along information about how you will spend less and save more if you use cash instead of credit. 

ShaunWilkinson via Getty Images

2. Stop buying too much at the grocery store. 

The average American doesn’t eat 20 percent of the food he or she purchases, and every household throws away an average of $2,200 of food each year, according to a report from the National Resources Defense Council, an environmental advocacy group.

Since most of the food we waste consists of fresh fruits and vegetables, it behooves us to focus on two things: the quantity of perishable food we buy in the first place, and how to repurpose produce like the slightly limp zucchini we forgot about in the refrigerator.

The solution to the first part is easy: Buy only what you know you can and will eat, and not a green banana more. And for the latter, take a “waste not, want not” approach, and make a filling and hearty soup from the vegetables that have seen better days.

Tips: The key is meal planning. To avoid waste, shop for groceries with a list you compile after you figure out your meal plan

Learn how to properly store fruits and vegetables for increased longevity. They should never go in plastic bags or plastic containers. And keep ripe fruit away from unripened produce, so the ethylene gas released by the ripe fruit doesn’t cause your other fruits and vegetables to ripen prematurely. Never leave produce in direct sunlight or in the refrigerator door.

Try the store-brand equivalent of the products you regularly use. They are almost always cheaper than the national brands and often, there isn’t a difference.

PeopleImages via Getty Images

3. Share more, and order less when you dine out.

The average household spends an average of $3,008 each year on dining out, the Bureau of Labor Statistics reports. Some of us do more damage than others, but if eating out is breaking the bank, it’s time to deal with it.

Restaurant meals are often the dynamite that blow our budgets. The 2016 State of American Dining by Zagat reported that in New York City, dinners out cost an average of $48.44 per person. The national average is $36.30 still a gut punch to the budget.

But sit-down meals in restaurants are as much about entertainment as they are about food. We enjoy being served, hanging out with friends, savoring good tastes and not having to lift a finger to clean up the mess afterward.

So here’s a compromise: Continue to dine out, but take steps to spend less when you do.

Tips: Many restaurants serve oversized portions remember how Weight Watchers defined a serving size of chicken breast as the size of a deck of cards?  so learn to share. Split an appetizer and entree on date night instead of ordering two of everything and tossing out the doggie bag two days later. You probably won’t go home hungry, and you’ve just cut your meal bill in half.

Or start the evening at home, and have your first cocktails or glass of wine there with some munchies. Cheese and crackers at home might even send you straight to the restaurant’s salad course. (Shared, of course.) And when it comes to desserts, maybe stroll to a bakery or ice cream shop, where they will undoubtedly be cheaper.

Thomas Barwick via Getty Images

4. Save dining out for special occasions.

The more you do something, the less special it feels. Try saving those fancy meals out for special occasions only. Cook at home instead.

Most eateries charge a 300 percent markup on the food they serve. This means that any time you spend $30 on an entree, the ingredients for the food you’re eating only cost $10, according to financial services company The Motley Fool. You pay more in the restaurant because of the labor, service and business expenses.

So look at it this way: If the average household spends more than $3,000 dining out each year, the same meals prepared at home could possibly save an average household $2,000. The Motley Fool goes a little further: If you invest that $2,000 a year by not spending it on restaurants and takeout food and generate an average annual return of 8 percent, after 20 years, you’ll have an extra $91,000 for retirement.

Tip: Entertain more at home, with friends bringing potluck dishes. Check for discount coupons for your favorite restaurants on sites like Groupon and Living Social. Go to expensive restaurants at lunch rather than dinner; often, you can get the same selections at reduced prices. If you qualify, ask for a senior or AAA discount.

LucaLorenzelli via Getty Images

5. Cut down on commercially prepared meals and delivery.

For all the times you grab a bite on the way home because you’re too tired or unmotivated to cook, we can only say, “everything in moderation.”

The average American eats an average of 4.2 commercially prepared meals per week, or about 18 meals in an average month. This includes the multiple meals a week that UberEats delivers to the office, the dinners you pick up or have delivered, the delivery pizza you intend to reheat for lunch the next day but never do, and the occasional McDonald’s visits.

Meals like this cost an average of $12.75, according to the Bureau of Labor Statistics, and that doesn’t include delivery fees or tips. Can you commit to cutting those grab-and-go meals to once a week, or four times a month, instead of 18? That could save you a bundle, depending on how often you’re eating this way. Heck, even just going cold turkey on your $5-a-day Starbucks habit will save you $150 a month.

Tips: Commit to only grabbing takeout once a week. Each time you bring lunch from home or cook something for dinner, put $12.45 in your piggy bank and pat yourself on the back. 

This post was originally posted at Huffington PostRead more: http://www.huffingtonpost.com/entry/food-spending-savings_us_5a4bd41fe4b025f99e1e120c

 

Housing finance reform’s gridlock problem: Affordable housing

Housing finance reform’s gridlock problem: Affordable housing

The National Housing Conference has been defending the American Home since 1931 when Mary Kingsbury Simkhovitch, a New York City social worker and policy reformer, formed the first nonpartisan, independent coalition of national housing leaders from both public and private sectors. This pioneering advocacy group represented bankers, builders, civic […]

financial planning

6 Great Financial Moves You Can Make In 2018

Are you ready to kick off 2018 with a better financial you? Do you want to set aside your spending ways and educate yourself on money matters, once and for all?

We rounded up some financial advisers, accountants and bankers and sprinkled their advice with some plain old common sense and a touch of online expertise to bring you these six ways to improve your finances. Some result in immediate savings, while others are things you can do now to secure benefits in the future. All can be crucial to your overall financial plan.

1. Get over being afraid of the stock market.

Wavebreakmedia via Getty Images

The stockbroker your parents used for years may be a great guy, and perhaps even a family friend who danced at your wedding. But is he necessarily the right broker for you? Learning how to invest your money is an important skill, and your fear may be based simply on the idea that you don’t know how any of this investing stuff works. The thought of just handing over a chunk of your hard-earned money with no guarantee of it growing is understandably terrifying.

The way around this is education. A broker is the intermediary between you and the investing world. You pay a fee for the broker’s advice and access to his knowledge and recommendations.

But you still should educate yourself. And, why yes, there are apps for that. As NerdWallet notes, “When you’re a beginner investor, the right brokerage account can be so much more than simply a platform for placing trades. It can help you build a solid investing foundation — functioning as a teacher, advisor and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and strategy mature.”

NerdWallet rated the best online brokers for beginning investors and gave the highest marks to Merrill Edge. An offshoot of Merrill Lynch, Merrill Edge doesn’t require an minimum investment, charges $6.95 per trade and offers cash promotions. Users like the customer service and schooling they receive, and noted the “robust” nature of the company’s research.

2. If you drive a clunker, don’t insure it like a Tesla. And if you’re married, don’t insure your car like someone who’s single.

martinalfaro via Getty Images

Car insurance in some states yeah, California, we’re looking at you is a bill that can rival your mortgage.

If you’re driving an older car, paying for physical damage coverage (commonly called collision insurance) when you don’t have to may be a waste of money. For example, assume your car’s current value is $1,000, the same as your current deductible. If your car is stolen, the insurance company will reimburse you for the value of the car, minus your deductible  in other words, nothing. In an accident, you’ll be responsible for all repairs up to $1,000, and the insurance company will reimburse you for any repairs over $1,000, up to the value of the car  again, nothing. By dropping your physical damage coverage, you can save some money on premiums, advises the American Institute of CPAs’ 360 Financial Literacy Program. Run the numbers yourself, or get help from an agent. Just remember that you are still legally liable for any damages you cause.

While no one gets married just to lower their car insurance rates, tying the knot does make you and your spouse less-risky drivers than single people in the eyes of your insurance company. Your insurer will lower your premiums, but first you need to report it to them, the program notes.

When you reach age 25, you also hit a milestone in the eyes of most auto insurers and step into a new, slightly lower risk category. Everything else being equal, that means a lower rate. If you don’t notice a difference, call your agent and ask what’s up.

3. Make use of Health Savings Accounts. 

Enrolling in a tax-advantaged health savings accounts, either through an employer or directly, can play a pivotal role in helping you manage health care expenses both today and in the future, said Cyndi Hutchins, director of financial gerontology at Merrill Lynch.

“According to our 2017 Workplace Benefits Report Healthcare Supplement, 79 percent of employees indicate they’ve experienced a rise in health care costs last year and just 11 percent felt that they knew where to figure out how to cover health care costs in retirement,” she told HuffPost.

An HSA is a medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan. The money that you contribute to such an account is not taxed. And in addition to tax-deductible contributions and withdrawals, an HSA offers the ability to invest, and potential to grow financial contributions tax-free over time. Unlike other “use it or lose It” vehicles, HSAs are portable and controllable  meaning they can be used to fund qualified medical expenses and health-care costs not just today, but in retirement.

4. You will likely be a caregiver, so start preparing for it now.

Caregiving is the life stage that occurs when parents or a spouse become incapacitated, and it’s increasingly recognized as something everyone should plan for financially.

According to a recent Merrill Lynch and Age Wave study, eight in 10 Americans say caregiving is the “new normal” in American families. Yet few are prepared for its costs and complexities, Hutchins told HuffPost, noting that 75 percent of those contributing to the costs of care have not discussed the financial impact of doing so.

“This can have significant impacts on the caregiver’s work trajectory, retirement timing and nest egg,” she said.

With caregiving staring at you from down the road, there is no better time than the present to do some advanced financial planning. First, talk openly with close family before caregiving needs arise. Where would they want to live? Who do they want to handle different aspects of care? What are their medical preferences and desires? How will they pay for health care expenses and caregiving needs? Don’t be afraid to seek professional guidance: When it comes to caregiving, you don’t even know what you don’t know.

5. Take action, however small, toward a financial plan.

SIphotography via Getty Images

Do money worries keep you up at night? Do you live paycheck to paycheck and just can’t manage to get ahead? Do you dream of owning a house one day but can’t figure out how to save for the down payment?

“Hope is not a plan,” said Paul Kelash, vice president of consumer insights for Allianz Life. He advises living “by the A’s the Antidote to Anxiety is Action.”

Kelash said that too often, people become paralyzed by financial worry and struggle to even acknowledge that their own poor financial habits could be creating that overwhelming anxiety.

He said Gen Xers seem to suffer the most because their debt level keeps rising and they’re ignoring the long-term effects. According to Allianz Life’s Generations Ahead study, total non-mortgage debt (like credit cards and student loans) has increased 15 percent for Gen Xers since 2014, yet compared to three years ago, significantly more members of this group believe “everything will just work out” when it comes to retirement.

It won’t, Kelash said, unless you take action.

“Just get the ball rolling,” he said. “Start by creating and sticking to a budget, reducing debt, especially high interest rate credit card debt, and starting an emergency fund. Creating a financial plan should be a key goal in 2018.”

6. Understand Social Security filing strategies.

William Meyer, founder and managing principal of Social Security Solutions in Kansas, testified before the U.S. Senate last year that strategy matters when it comes to claiming Social Security benefits. Some people start collecting benefits early, at age 62; others defer collecting until they turn 70, at which point the monthly payments have grown by 8 percent a year.

Meyer told HuffPost that pending retirees need to focus on the cumulative benefits (i.e., adding up all the payouts from a strategy versus just looking at the monthly difference in payouts across different strategies) before they decide when and how to claim benefits. The Social Security Administration cannot and will not give a person advice.

“It is worth conducting detailed research to explore all your options, or hiring an expert so you don’t leave significant money on the table,” he said.

General rule of thumb: The longer you wait, the more you will get. But the longer you wait, the fewer years you will be alive to collect benefits.

This article was first published on Huffington Post – Read more: http://www.huffingtonpost.com/entry/financial-tips-2018_us_5a37e63ee4b0ff955ad50585

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4 off-beat ways to save money (without your savings account)

Image: Getty Images

A saving strategy that doesnt feature a savings account might seem counterintuitive, like trying to get in shape without a gym membership. But you dont need elaborate equipment to break a sweat, and you dont have to depend on your savings account to boostyour nest egg.

With low interestrates, you wont see significantgrowth in your account, sothe following strategies could prove to be much more effective.

1. Use certificates of deposit to set aside cash

The benefits of certificates of depositmay not be obvious right away. To some people, CDsmight even sound like a borderline scam:Youre telling me my money islocked away for up to five years, and if I want to withdraw it early, Ill be charged a fee?

That is correct. But look at it this way: If you want to save $1,000 for an island getaway, its best to shove that money to the side and forget about it. If you keep that cash in a standard savings account, you might dip into it when your checking account is running low. Put it in a CD, and it will be there when you need it.

Plus, long-term certificates those with term lengths between three and five years typically have better annual percentage yields than even the best savings accounts. And short-term CDs will still help you achieve your more immediate savings goals, such asa vacation, even thoughtheir interest rates arent quite as strong.

Check out NerdWallets best CD rates tool to see whats available.

2. Control your spending with aprepaid card

Say you saved up for that vacation and are sunning yourself on some far-off beach.

Life is good: Your relaxation levels have reached a new peak, and youre close to becoming the human embodiment of an Enya song.

But youve also let your guard down, which can leave you prone to impulse purchases. New rainstick? Sure. Wildly overpriced banana boat ride? Why not?

Thats when a prepaid debit card can come in handy. This payment method doubles as a budgeting tool. Unlike with other plastic, you can limit your spending to only the cash loaded onto your prepaid card, so you wont have to raidyour savings to cover next months credit card bill.

The best prepaid debit cards have no monthly fees, and it doesnt cost much to load money onto them.

3. Set alerts on your checking account

Online banking has made it easier than ever to unleash your inner control freak, which can be helpfulwhen it comes to saving money.

At most banks, customers can choose to receive texts or emails when their checking account balance goes below a certain amount. Thats primarily toprotect you from overdraft fees, but can also help you monitor and rein in your spending, and, in turn, keep yoursavings intact.

You can set this limit as high as youdlike and change it over time. Like a prepaid debit card, alerts also can help you control your spending.

4. Find a no-fee account, trim other expenses

At $12 a month, it can be tempting to write off a banks maintenance fee as a minor inconvenience. But if you were to putthat cash in aretirement accountand give itsome time to grow, itwouldnt feel so insignificant.

Say that$12 went intoyour 401(k) plan each month and stayed there for 30 years. Assuming a 6.5% rate of return, youd be left with an additional$13,000 not enough to retire, but a solid addition to your post-work fund, and a good incentive to switch over toa no-fee savings account.

Next, re-evaluate your budget. Make cuts where possible. That doesnt mean resorting to DIY haircuts anda diet of SpaghettiOs and Pop-Tarts.

Using the extra dough to increaseyour monthly retirement contributions by a few percentage points will allow you to reap a nice reward down the road, thanks tocompound interest.

Alternatively, you could use that extra cash to pay down high-interest debt. Any kind of adjustment to your spending and savings habits, no matter how small, can make a big difference over time.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: tony@nerdwallet.com. Twitter: @tonystrongarm.

This article originally published at NerdWallet here

Read more: http://mashable.com/2016/09/20/4-ways-to-save-without-savings-account/

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Five Important Truths About Personal Investment

Five Truths To Consider Before Investing

Whenever you invest, it does involve taking some chances, whether small or large. The large the single investment the larger the risk. I say ‘single investment’ because you can, of course, limit your risk through diversification, but no investment is without some level of risk, no matter how small.

Over the years of either working within the financial industry or coaching individuals and couples on finance, there have been a number of truths that have continuously cropped up over time, that I have either found myself warning investors about, or I have seen occur, because investors have not heeded the warnings, so I want to share them with you now, so that you don’t make the same mistakes others before yo, have made.

These truths are extremely obvious, but you will be surprised how all too often they impact on a persons or couples lives, probably because they are so obvious, people tend to not take them seriously. I hope you do, regardless of how obvious they may seem.

Truth #1 – It is easier to lose money than it is to make it.

Of course it is, you say, but as I’ve mentioned already, so many people ignore this truth and wonder why they are worse off after investing than they were when they started. It is never a good idea to put all the money you have set aside for investing, into one investment because that simply turns investing into gambling as I mentioned is recent post, nor should you allow yourself to be pressured into investing more than your want. If you are looking for a fast return, the chances of losing your money increase. Understand what your money personality type is first before looking to diversify your investments so as to limit your losses and increase the possibility of a healthy ROI.

Truth #2 – The lack of money is the number one cause of relationship breakups.financial contraints causing relationship problems

If money is scarce or you are on a tight budget, it can be tempting to invest in helping increase your financial status. It doesn’t matter whether the investment type is in stocks, bonds or a second business, or becoming self-employed if you get it wrong the strain on any relationship that you are in can be catastrophic. I have witnessed first-hand marriages destroyed and families being torn apart because of a lack of money, primarily because of bad investment choices.

Men/Husbands if you haven’t realized this already you need to realize it fast; no matter how independent your woman may be, she will always want to know that her man can take care of her financially and if you have children together, that you will always provide for them too. If you don’t have spare cash to invest, don’t risk investing what you do have, for the sake of a few extra bucks every month.  Look to invest in yourself first, maybe take an evening class to add extra skills so you can apply for a better job, maybe look at what expenses you can cut back on first before adding to them.

It is important to understand that financial investing is not the best way to improve your financial status if your status is currently a poor one. It is better to have a poor financial status temporarily that you can improve, together over time, than a poor or even broken relationship because of rash investment decisions.

Truth #3 Be a good investor by securing a home.

Property investment is one of the few investments that provides a good return on investment. Over the past 40 years, property investment has only ever provided a negative return on 5 separate occasions. Additionally, the key to making money with property is to only sell when the market is up, if the market is down, hold on to your investment. Owning a home provides a greater return and security than renting. When renting you are not securing a financial future, you are only lining the landlords pockets.  Securing a mortgage within your financial budget and providing security for your family and future is one of the best investments you can make.

Truth #4 Paper investments are only worth the paper they are written on.

When making an investment, you need to ensure that you are able to release or obtain cash quickly. Investing in paper investments (It is an investment in anything but a hard asset because you only have a piece of paper to show for your ownership) is not cash until you turn it into cash. So if you are looking for a return within a certain period, you need to make sure that if you have a paper investment, you are not tied to it for longer than you anticipated. For example, you take out a mortgage to buy an investment property, you work on the property, improve it and look to flip it for a good return on investment, but unfortunately your mortgage has tie-ins and fees for early completion and they eat massively into your profit. Also, consider the time frame you will be using a paper investment before you get involved in one, because as I said, it worthless if you can’t cash it in.

Truth # 5 Borrowing money to invest is a fast way to financial ruin.

If you take into account the first truth, then you will understand why this truth should certainly not be ignored. It doesn’t matter if you borrow from a bank, on your credit card or from family or friends, the money has to be paid back, and while you are waiting for your investment to mature, you are spending cash to continue paying for it.  Furthermore, a bank or credit card is going to charge you interest, so if your investment doesn’t return the yield you had hoped for, you now have extra money you have to pay back too. Borrowing money to invest is a minefield that you simply can not get through unscathed and is therefore not worth the risk.

I appreciate that these truths are not the most upbeat and encouraging, but they were never meant to be. Sometimes we need to be warned of the dangers ahead before we get into something that will lead us to ruin, and if it takes five short truths to protect you making a big mistake with your investments, then that is certainly a good thing, so I hope they help you as much as they helped others I have shared them with.