how is wealth created ? savings and investments pro tips (2019)

The. World of financial advice is a vast, and complex one and it could be hard to know where to start when you decide you want some help for. As long as there's been money there's been people who charge a fee to hold it or manage it for you or tell, you how to budget it if. You have a complicated, financial life with property children, different assets, perhaps a business, maybe some debt and a complicated, budget an advisor. May be just the thing you need to bring order to your investments. First. Thing consider, your goals what. Problems, are you looking to solve is it to save you time across, a variety of financial issues is it to grow your nest egg is it to help you budget and save your. Goals we'll narrow down the different type of advisors, that are right for you, you. Should also keep in mind that there's a difference, between an investment, advisor and a financial planner & investment, advisor is, focused on growing your assets while a financial, planner is focused on the spectrum, of your financial life from insurance to trusts, to budgets, if, it's the latter you want look, for someone with a high certification. Level such as a CFP which is a certified, financial planner, in the u.s., one. Extremely. Important, thing for anyone, who presents themselves to you as an advisor is to, ask what credentials they have the. Main thing to find out is if they're bound to you by a fiduciary duty, that, means they must act in your best interest, versus, theirs you. Know those people who try to get you to buy higher interest CDs when you go into the bank they, have no fiduciary, duty to you their, goal is to get your money out of your savings account and have it committed to the bank for a fixed term the. Question, are you a fiduciary very. Quickly separates, the advisors, from, the salespeople, in the. U.s. CFPs. And registered, investment advisors. Are bound by a fiduciary standard, stockbrokers. Are not. Measuring. Progress against your goals when working with an advisor is, simple make, sure they outperform, the market by, at least the value of their fee every. Year not as an average for. Example, if your advisor is charging you 2% and the market which is measured by the SP index is up 8%, then, you can reasonably, expect that, your advisor should, make you 10% growth, that year. Or if, the market is down you, want your advisor to protect you from the downturn, by at least the value of their fee so, let's say the market is down by 5% you, want your loss to be no more than 3%.

This. Is why the most important, question, to ask an advisor is how. Has my portfolio, performed, net, of fees in comparison. To the market, sometimes. People, are uncomfortable asking, questions like these we, may feel intimidated. By the advisors role as an expert, especially. If this is an area of our lives that we're not confident, but, any reputable, advisor should be able to answer this question professionally. But. We're of those who respond, with a lot of jargon or technical, language it's, attacted to distract, you and make you feel disempowered, trust. Your gut if you, feel like your advisor isn't giving you the straight story or is talking, to one partner, and ignoring the other you, probably want to take your money elsewhere. One. Last thing what, if you don't have money to invest right now and just need help with budgets, insurance, and debt reduction for, example, financial. Planners can be very helpful here in setting you up with the plan shop. Around for fee-only advisors, and make sure you're comfortable asking questions of them the. Important, thing to remember is that when you're clear, about what you need to do to move your financial life forward you, can then choose how to do so whether, that involves a financial, advisor or not. You. There, is so much confusion and emotion, around money for so many people but learning about investing or how to grow your money can, seem very overwhelming, so, where do you start. Confidently. Asking, questions about money is step one towards financial, empowerment and investing, don't. Be afraid to channel your inner five-year-old the simplest questions, can often be the hardest repeat. Why what, how how, much until. You really, understand, what's being discussed and if, the person you're working with is not helping you understand, that it's time to work with a new person, once. You're on the road to understanding, how to start, investing, the focus needs to turn to you you may want to invest but should you, understanding. Your financial position, and risk profile will help you determine how, to get started if you're very risk-averse starting. With lower risk assets, like bonds or CDs could, help build your confidence or. If you're looking to build your knowledge about how investing, works sometimes, buying stocks or funds in things you already know and care about can, help to contextualize, investing. There's. Three ways to get yourself set up you. Can work with an advisor who will invest on your behalf you can set up a trading account and do it yourself or you. Can work with the hybrid solution, so. Open, an account fund, the account and go I'm a big. Believer in investing, what you know and learn as you go investing. Is a lifelong, journey and, the earlier you start the better even. If it's with virtual dollars virtually. Buying and selling stocks, and funds is a great way to build your money muscles what, your balances, go up and down because they, do go up and down and history. Has shown that you're better off in the market than not in the market and then, when you're comfortable go in maybe. Start with a smaller portion of what you are invest just to get a feel for it if someone. Is investing, on your behalf make sure they're following a strategy that you're comfortable with ask, lots of questions and, don't ever assume that, that money that you work so hard to earn is doing, just fine without your attention.

Last. Remember. The great, opportunities. Exist in downturns, if you can buy when everyone, else is panicking ask, this question of the experts you come across if, prices, went down significantly what, would you do get. Familiar, with how investing, works and be, ready for when the new york stock exchange goes, on sale, like. Many things in life the simplest, things are often the best asking. Simple, questions can, yield powerful, learning opportunities. Ideas. And ensure. Accountability so. Take a deep breath and us. So. You want to get better with money but, you don't have money right now to invest, there's. A great way to get you started with no risk to you and no money down and that's, by building a virtual portfolio, a virtual. Portfolio or sometimes called a practice portfolio, is a collection of investments, that you can buy and sell and watch, over time the, big difference is that you don't use real money so, why would you do this a few reasons first. Virtual, portfolios, are a great way to try investing, without actually, investing, it's, a super easy way to learn second. I truly. Believe this such a thing as money muscles like, regular muscles the more you work them the stronger they get third. And most importantly, the, best time to learn about investing, is before, you put your money in virtual. Portfolios are risk free it's. Easy to set up a virtual portfolio online, at places like investopedia. Or see if your online bank has that capability once, you've got yourself set up then the important part begins the. Market goes up and down all day every, day so there's, no point crying or celebrating, in the short-term the. Goal of your weekly check-in is first, to track how you're doing and second, to gauge your reaction to, how you're doing do you get super anxious if your portfolio, has gone down 2% are, you already mentally spending, your gains when your portfolio is up 10% over. Time you'll learn to manage the ups and downs and learn how to take the emotion out of investment, decisions the, single, biggest thing to learn is that you don't panic, when things are down and don't, jump on bandwagons after. Things have gone up but if you do feel terrible, when your portfolio, is down you should think about moving away from stocks, and look at more conservative. Investments, like bonds your, investment, strategy should, reflect your risk tolerance. Also. A giant, benefit to virtual portfolios, is that when you're ready to invest you'll, have already, built a wish list of exchange-traded.

Funds And stocks that you believe in finally. I recommend. You bring friends or family, members along, for the ride learning. Is always more fun in groups and maybe, you can encourage each other to spend lists save, some money and get going for real. You. How. Do I make the most of my fixed income while, this is a common question from retirees there's, some great lessons for everyone now, fixed. Income can mean many things from, payments, from an annuity, to living on Social Security or, a pension the, key is that every, month you have a finite, level of income here's. Three, ways to optimize your, fixed income life it. Goes without saying that you, need a budget and that your expenses, should be less than your income not. Breakeven, you, should not spend every dime that you get this, may mean some adjustments, to the way you live and change is never easy but on a fixed income with, the assumptions, that things get easier over time the. Sooner you make the necessary adjustments. The better life. Is full of surprises good and bad so, include a buffer each month and if you don't have any surprises great. Put that money aside as savings, and put it to work which. Leads to the second point contrary. To popular opinion that, retirees, especially. Should be risk of us if you, have money that you've put aside you, can still put it to work and earn money on it now, I'm not suggesting, risky. Or speculative, investments. But, you can now put smaller amounts, into lower risk balanced, portfolios, that could, earn you more than what a savings, account can but. Remember all investing. Involves risk, so only put in what you can afford to potentially, lose, also. Regardless. Of how you earned your living or currently, get your fixed income there's, ways to make more money for, ideas look, at the next generation of workers we're having a side hustle or multiple, sources of income is increasingly. Becoming the norm start. With the sharing economy what. Do you have that you can rent a car that. Sits in your garage 99%. Of the time put, it to work and maybe, you have a home with the room to spare or access to our vacation property, check, out air B&B remember. That, there's always work. To be done from, proofreading, to serving coffees to teaching, it probably. Won't make you rich to, do side hustles like these but there's an upside the, time that you spend working and earning money isn't, time you spend spending, your money. Lastly. A warning. With all the advances, in technology there's. Increasingly. Creative, ways of getting scammed be, suspicious of anyone, offering easy money or demanding. Upfront payments, for future income, if. You're younger and work in a profession, with the pension, or you, have an annuity that will pay you a set amount for the rest of your life start. Planning now for ways that you can maximize or, subsidize, your income and keep. Your cost of living in check I'll. Leave you with this thought living. On a fixed income doesn't, have to be an exercise in restriction. And deprivation but. It should be your starting point from which to build on. Focusing. On your paycheck is great and making sure you get paid a fair, wage for, your work is super, important, but, if you're trying to maximize your, earning potential it's always good to look further than your paycheck there's. Three main areas where you can look your skills the things you own and your liquid assets first. Your. Knowledge and experience is always, worth something, but, as a person with finite, hours in the day it's hard to exponentially. Grow income, based on your job but, don't let that stop you from exploring, side hustles, from, teaching to, participating, in focus groups to making things to sell on Etsy doing, something with your time that can convert to cash is a great, way to create multiple income, streams.

Next. Look at the things you own especially. The things of value that can be turned into cash and with, the advent of the sharing economy it's, much, easier to unlock, the potential of any asset, look, at listing your car or lawn mower or even your house on sharing, sites look. For platforms, like peer buyer that are available in your area and don't, forget if you're willing to put in the time there's, always a market for selling your secondhand, goods and clothes the third, way to generate, a different income stream is to put the money you have to work through investing, this, is a side hustle that you can do while you're working hard at your other job or jobs, growing. Your money in real estate your, investment, portfolio or, businesses, should, be a part of everyone's, money mindset, regardless. Of how much money you have right now you work hard for your money make, it work hard for you in. The US and in many countries investment. Income is taxed, at a much lower percentage than salary which, is why the one percent aka, the, rich probably. Pay a lower tax rate than you so. Investing. Can be a second, income stream if that's your goal but, the key thought is that longer term multiple. Income streams buy. You options. In life, investing. Your time attention. And money in more avenues, than just your primary career is a great, way to ensure that your, net worth can grow. You. The, thing about loans, is this if you, need to borrow money you generally, will find a way, obtaining. A loan can be easy but, paying it back is not. Borrowing. Money has become the default way to pay for the big things in life like education. And housing but, for many people it's also the default way to pay for things that they can't afford right, now and buying. Things that way means, that they will cost you more in the future sometimes. A lot more let's. Consider the many types of loans they include, student, loans mortgages car, loans home, equity loans credit cards yes, they are considered loans cash. Advances, and payday loans the. Most important, thing to know is that interest, rates and terms matter enormous, Li and they vary a great deal depending, on the loan let's.

Talk About this in terms of good debt and not-so-good, debt let's, start with good debt good. Debt is debt that is manageable, predictable. And buys you something of value that means, interest. Rates are low terms. Along and rates, don't fluctuate drastically. The, most obvious example, is mortgages. Low. Interest student loans can also fall, into the good debt category, especially. When the rates are fixed for the term of the loan in the, US and other countries there's programs that type payments, to your income level thereby. Keeping the loans manageable, not. So good debt Alone's. That you cannot, predict how much they're going to cost you in the future or take. A considerable percentage of your income or have, high interest, many. Variable, loans fall into this realm some, mortgages, private, student loans and personal, loans are often variable, because, they're not secured, against an asset whose future, value is predictable, these. Loans are higher risk to the lender, hence the higher interest rate and higher, risk to you if you can't plan your budget accurately. Let's. Say you have a $10,000, personal, loan with a 5-year term if the, interest rate goes from 5%, to 7% you'll, have to find an extra $600. For interest payments so it's in your best interest to pay down as much as you can when, rates are low, if. You have multiple, sources of debt car, loans credit card debt personal, loans it's, worth seeing if you can, into, a single, loan which has a more predictable payment, term, consolidating. Your debt only works if you're committed to not going back into debt so hide those credit cards and be. Careful, where you consolidate, your debt, the, first thing not to do is to go to predatory, lenders like payday, loan providers, solving. A temporary, problem through a payday loan becomes, a rolling, process of taking on more debt to pay for all debt. Online. Lending options like so far for student loans and Lending Club for access to crowd source capital, also. Make it easy to get a loan but, if, you're consolidating federal, student loans you'll lose the benefit that comes with them so do the math on what that will really cost you also. Don't, overlook your bank as a source for consolidation, they're, more interested, in keeping you as a customer than, seeing you to go to a competitor, so they can usually work something out. So. Let's. Do a quick dive into interest rates the. Key thing to look for is APR, specifically. How, much does, the interest rate being offered to you deviate. From APR, if the, cost of money is 1% from the central bank as it is now and a lender is asking for more than 6 or 7 percent that, means they're making quite a profit, on your loan so look for better alternatives, the. Last and most important, thing is that loaning, money in any form means that you're taking on an obligation in, the future to pay it back, you must understand, the agreement and the, implications, especially.

If The loan is secured, to any of your assets do. The math on your repayment terms, and understand. The consequences of what happens if you miss a payment and if, you ever feel pressured to sign something that you don't understand, do, not sign, it ask. Questions. Seek advice and do the math until you fully understand, what you're signing your future, self will thank you. Paying. Fees is a part of life, there are convenience, fees fuel. Surcharges, extra, baggage fees account, maintenance, fees ATM, fees fees. And surcharges are, everywhere, and avoiding, them can be something of a competitive spot one. Of the biggest, offenders, in this annoying fee game are financial, institutions. Their, fees are not only high but, they also target, those least able to pay them first. Of all you should know that banks make a ton of money off fees. Overdraft. Fees alone, generate, 27, billion in revenues for banks and it isn't getting any better free, checking accounts have dropped from 76%. Of all accounts in 2009. To 37%, today, and fees, themselves have, risen. 21%. Over the past five years, by. Calling something a fee instead of a loan lenders. Can avoid regulators. And charge whatever they want for, example if you buy a $20, lunch but don't have the funds in your account to pay for it your, bank can lend you the money to, pay for the lunch for, that loan you'll, get charged a twenty, seven dollar overdraft fee, for. The sake of argument instead, of calling a fee let's. Call this a loan which really it is your, twenty seven dollar fee would be equal, to a loan with a three thousand, five hundred and twenty percent interest, rate, payday. Lenders are the champions, of this fee game they, have been restricted, from charging exorbitant interest rates, so now they play with fees and if, you convert their, fees into interest, rates many, payday, loans bear interests, of over, a hundred percent. Another. Fun game that banks play is to reorder transactions. To maximize, overdraft, fees some. Banks will process transactions, from largest to smallest so, if the big purchase, puts you into debt the smaller transactions. Will each trigger an overdraft, fee even. If you think you've done the right thing and waited, to make the big purchase until the last minute the, reordering, can cause a cascade.

Of Fees that can be shocking, it's. In everyone's, best interest to minimize, fees so, here's a few ideas how to help, number. One never set foot in a payday lender and if you have pay, off the loan and never go back Bank, fees may be heavy but payday, lenders, are terrible. Overdraft. Protection Mayson like a great idea but the fees you pay can be astronomical. Many. Banks automatically. Opt you into the programs you can opt out facing. The embarrassment, of a rejected payment is often better than being charged overdraft, fees it. Can also help to find out your bank's fee policy if. You can make, sure you keep a buffer of cash in your checking account. While. Debit cards are great they're the main reason, people get dinged with overdraft fees if you're, running out of funds in your checking account consider, using your credit card for a few days until your paycheck clears if, you have room on your credit card interest, on a few extra charges will almost always be lower than overdraft, fees if, you, need overdraft, protection consider. An overdraft, transfer, it's, a form of overdraft, but uses one of your secondary, accounts, to fund your overdraft the fees are still high but lower than a standard overdraft, to. Avoid other account, fees try, to find a no fee checking account they still exist but they are harder to find they, all have limits on what you can do but try to find one that has no account, balance minimums in the, u.s. new players like Bank mobile work well for fee free banking and. Use. Cash, remember cash try, this for a month take, out what you need at the start of each week and only spend that amount you'll. Never overspend, because you only have what you have and you'll limit transaction, fees and ATM fees because you only need to go to the bank four times a month and no, overdraft or insufficient, fun fees. It's. Not easy to avoid fees but it is possible and there's, increased, pressure on banks and lenders, to at least be clear about the fees that they charge and, remember. The more you save on fees the, more money you have to pay down debts or invest. Let's. Just all assume that at some point in your life you'll, receive some money that you didn't, earn in your day-to-day job it could, be an inheritance, a bonus, a legal, settlement or if the odds are truly in your favor a lottery, win which, just, so you know you're just as likely to be struck by lightning as, when big in a lottery still, happens, so, here's, three things that you need to do when a windfall comes your way first. Check. If the money is taxable and if, you will owe tax on it take that amount and don't touch it until your, tax bill comes an unexpected. Tax bill can be a nightmare then. Consider. This question how. Can this money improve, my long-term, financial situation, for, the 50%, of American households that are carrying credit card debt the number, one best thing to do is pay it off the. Interest rate you pay on credit card debt is higher, than what you can earn on most investments, so don't even think of trying to make money off the investment, to pay off your debt if. There's. Still money left over after high interest debt is paid off great, now, you can make a plan for that money a tool.

Called The reverse budget, can really help when managing a windfall or any other lump sum basically. The rule is before. You spend the first penny figure. Out where every cent will go park, the money temporarily, in savings account so you're not tempted to fritter it away then. Step, back and do a self-assessment, to, figure out where the money should go you, can do it in a storytelling format, like I just, received $5,000 that I don't have to pay tax on I've, stopped tinkering, you dead but I still have a balance of $2,000, on my credit card my, goals are to get out of debt establish. A financial cushion for emergencies, and invest, for the future I'm, going, to allocate $2,000. Towards the dead $1,000. Towards my cushion and contribute, $2,000. To my IRA of course. You can change those numbers but the idea is you figure out a plan for your whole amount before you spend anything so, you can end the story with some sort of result I'm, moving, forward debt-free I've protected. My financial, stability by, establishing, a cushion and I'm, making progress towards, my future goals, make. Sure that plan is one from which your future, self also gets to benefit, that means investing versus just saving the money the. More you invest now the more your future self will be able to cash out later I'd, recommend at least 50% of, the money after, tax and debt reduction to be put aside for investing, if it, makes you more comfortable, get professional help someone, who you pay a flat fee for an unbiased opinion then. And only then do you start thinking about spending the money on yourself or helping, out family or friends or giving. To charity. Here's. A thought that flies in the face of most, people's, understanding, of their money you. Don't save, what's left over from spending, you spend, what's, left over from saving, and when, you receive a windfall this, is sage advice indeed. If. You don't know where you are how can you determine where you're going it's, a thought that applies brilliantly, to your financial life whether. You like it or not there's a lot of data out in the world about you and your financial life banks. Credit agencies, companies, even, your trustee ups know more about you than what you might think it's. Important, for you to know what they know for a few reasons, specifically. Accuracy, privacy. And planning, the. First thing to focus on with your financial data is accuracy make. Sure you check your credit rating at least once per year check.

Accuracy, Of all the data and also look at the data being measured you'll, find that credit agencies, measure how much of your credit you actually, use what, your high balance is how many different types of credit you have and how often you miss payments poor. Ratings, in any of these measures will, lower your credit score now. Privacy. Be, very careful when you sign up for account aggregation services. To understand, where your data goes remember. When you get a product or service for free what's, really being sold is your data bottom. Line with privacy understand. Where your data is going last. Make. A plan there's. Amazing tools available for budgeting investing, and broader financial planning what. Used to take a lot of research and paper shuffling to get a picture of where you are can, now be done through tools like level. Spendy, and you need a budget. Another. Business concept to borrow is KPIs, key performance indicators. What are your financial KPIs. I recommend. Building a set that makes sense of your progress against, your goals it could, be saving a set percentage of your income setting. A monthly debt reduction, plan or, deciding. On a monthly transfer, to an investment account, what. You want to have at the end of this is a snapshot of what you own and what you owe plus. A personal, or household, view of your cash flow now. None, of this may seem particularly, pleasant and there's no perfect time to get your financial data in order, overcome. That obstacle by, setting yourself a time on your calendar to do it and schedule. Something that you love doing right afterwards, remember. Once, the facts are in front of you it doesn't matter if it's an excel sheet a mint calm account or a plain old pen and paper keep, coming back to those numbers and track them over time you. Work so hard, to earn a living doesn't, it make sense to spend a little more time on tracking exactly, what's going on with your money. You. It's, been said that the most dangerous concept, when it comes to the economy is this, time it's different, history. Has shown that the economies, of the world move in cycles it's, easy to slip into that mindset because economic. Cycles feel abstract, and they talked about so much that, economic, news just becomes more noise to tune up but. When you can see where you are in the context, of the economy you can do two things you, can adjust your behavior and, you, can take advantage of opportunities, here's. How, start. By making key economic, ideas personal, you, may think that interest rates currency, values and unemployment don't, have much to do with you but, they can, influence, your life more than you know the. First thing to understand, is that economies, expand, and contract. Expansion. Means the economy is growing and there's more money flowing through businesses, and individuals, in times, of expansion, there's often new developments, within the public sector like government's, building new airports, or upgrading, roads in times. Of contraction, there's less money if there's, three successive, quarters of negative growth, this, is called a recession, and if, a recession lasts six quarters it's a depression.

During. A recession company's, share price will, often go down and stay, down as long as sentiment, about the economy, as negative, savvy. Investors, wait for down cycles, and buy, low so. At the time of this recording the, US unemployment rate, is five point five percent, interest. Rates are near zero and, the US dollar is very strong so. What do you do with that information, first. Unemployment. When. Unemployment numbers, are high say, above five percent that means there's a lot of people looking for work who could, potentially, replace you at lower cost, businesses. Have fewer incentives to grant pay raises when, there's available, labor in the market, conversely. When, unemployment slowed you, can push a little harder for more money or benefits because, it's harder to replace you if you leave and, what, about interest rates if the, government raises interest rates that means two things you'll, be paid more interest, for deposits, that you have in the banks which is a good thing you'll, also pay more on the debt that you owe such, as variable mortgages, or credit card which is absolutely, not a good thing when rates, are increasing, do all you can to pay down debt at the lower rate. Currency. Values have an impact too when. The US dollar is trading at 79 cents to the Canadian, dollar it means, that the hotel, room you stayed in a year ago when one Canadian dollar equal, the US dollar that room is now 20% cheaper and. That's. Why it's called economic. Cycles, everything. Is related buying. A cheaper hotel room seems great but it means that whatever the u.s. is producing for export, has become more expensive for people in other countries to buy so, that can push down production which, can increase unemployment. Now. There's, brilliant, people all over the world who spend their lives doing economic, analysis and predictions, but, guess what with, all the tools in the world even they must admit this no such thing as future, facts no, one knows what's going to happen to the economy so. The best thing to do is to have an understanding of where you are now and to plan for your future self, to be well taken care of that. Means adjusting your behavior, and lowering, costs in advance of economic, contractions, plus, increasing. Your savings, should, you experience, job loss but. It's not all doom and gloom history. Has shown that there will always be good years and bad years and, at least knowing that can help you make bigger decisions, like buy versus rent when, to increase investments. Or sell-off and perhaps, the most fun decision if you have a vacation budget, in what, country, will your money go the farthest. There's. No question, that the economies, of the world are changing at, an extremely, fast rate a century. Ago when the Industrial, Revolution made. Manufacturing. The cornerstone, of the economy products. And services became available from mass market, and the, prosperity, of the world grew exponentially. Since. Then much, of the world has consumption. Based economy's growth. Was assured by constantly, increasing, levels of purchases. Since. The post-war, boom of the 1950s, until now individuals. And family, consumption, has been the source of growth. Expanding. Populations, needed places to live appliances. Food clothing, and technology but. Recently, something, has changed the. Ownership, culture has shifted a little whereby. People are rejecting the notion that you need to own all your own stuff and if you do own stuff you can put it to work by renting it out to others this. Is the core idea of the sharing economy in. The, u.s. right now every. Second household, is struggling with credit card debt so the widespread adoption of buy less and share more is a good, thing let's. Look at a few ways that you can benefit from this change, one. Of the most high-profile. Changes, for urban dwellers especially, is the idea of car sharing when.

You Add up the cost of a car itself what, a cost of pocket, service, it register. It and insurance, then. Cheapest, car maybe costing, you thousands, of dollars every year look. Into services like Zipcar to see whether you can rent one on demand instead and if. You do need to have one or more cars in your life is there a way to put them to work to, generate more income, services. Like uber and lyft allow for you to sign up to become a driver and work as much or as little as you like or looking, to Touro where, you can allow people to rent your car when you're not using it, think. Of other big-ticket appliances, in your life that you need but don't use all the time lawn, mowers leaf or snow blowers or bikes look. For local versions, of zilog calm where you can list your stuff your, availability, and your, price to rent and your. Biggest, ticket expensable, your home a B&B. Has revolutionized. Travel and is allowed for people everywhere to generate extra, come by renting out some or all of their homes the. World of finance has also been impacted, you, can now participate in, the cycle, of borrowing, and lending the, way that banks have done for years by, depositing, money with Lending Club or prosper, and then earning, interest as other people, borrow your money of course. There are ideas, that have been around a long time that, are essentially, sharing economy, carpooling. Babysitting. Clubs shot, my closet, clothing, swaps even, potluck dinners anything. Where a cost can be shared by a group of people this is taken on yourself, here's. An idea why not set a goal today to get extra, money in your pocket by reducing, some of your own expenses, or generating. Some income or, both. If. You haven't, heard of the frugal movement you're not alone but it's very real and it's growing fast being. Frugal isn't, just about making ends meet when you're short on cash it's, more about being able to buy options, later in life versus, spending all you earn now the. Frugal movement has some great lessons for all of us let's, explore four of them first. Buy, less stuff the. Advertisers, of the world all have one goal make you buy and then rebuy, their product over their competitors the, big question for you is do, you need to buy it at all the. Sharing economy eBay. And plain old going, without are all, alternatives. And if, you think you're already economical. With how you spend your cash here's, a great way to commit to the buy less stuff mantra. Think. Of all the holidays in the course of the year and make a concerted, effort to celebrate, without buying all the stuff that, goes with them, second.

Live With a smaller footprint we, fall in love with neighborhoods, and homes often, without doing, the math on the financial, commitment they'll take, before. Moving compared the short and long, term cost differentials, between options, first. The, total cost of buying versus renting and, then, the ongoing cost, of furnishing heating cooling ensuring, and maintaining, different homes spoiler. Alert smaller, is better and after, decades of building bigger and bigger homes the trend is now reversing to downsizing, new developments, so they aren't so expensive to run the. Most extreme, example, of downsizing, is the tiny house movement I, recommend. Doing a search to see how whole families, are living happily in homes the size of the average American, kitchen their, creativity, and commitment is quite amazing, now. If you're not up for buying less stuff or downsizing, the, least you can do is recycle, everything, the, frugal movement is all about buying less but better stuff, nobody, needs, a wardrobe makeover or new stuff every season take. Pride in making things last or exchanging. Them with family and friends for the things that you need. Keeping. Up with the Joneses, is a fallacy. It's, extremely. Difficult to truly, know another person's, financial situation, but it's a strong possibility it's, not the same as yours no matter how much you think you have in common, take. Pride in living below, your means and understand. That for every, new car that appears, in your neighbor's driveway, it's, more than likely that's an extra, bill that they're taking on to, spending. Money to try to be like someone else is a dangerous. Slippery slope you. Have to accept that everyone in the world has either more or less money than you and we have to get comfortable making choices that are in line with our financial, circumstances and, values, remember. You, don't have to live in a tiny house or weave your own shoes but. Learning from this movement will help both your wallet and the, environment and best, of all every dollar. That you don't send out into the world today is available, to you to invest so, your future self will have more money and more, options tomorrow.

You. So. It's, coming up on tax time do. You have a feeling of dread when I say that or, did you think great I'm all set I can skip this video, taxes. Do bring up all sorts of emotions but regardless, of the feelings, that tax-time invokes you, will most likely be paying taxes here so, let's see how we can minimize the stress and maximize. Your return if. You're lucky enough to have a salary your employer has most likely had tax taken, out of each, paycheck via, the pay-as-you-earn, system. Depending. On the with holdings you signed up for when you took the job you will have either overpaid, in which case you'll get a tax refund or underpaid, in which, case you'll owe additional tax either, way you're better off than independent, contractors, and small business owners who need to keep track of taxes, they owe in the course of a year and put money aside to pay them in. Order to feel less stressed about tax be, aware of expenses, you can deduct all year round not just prior to tax time to. Make things easier have a folder, for things that you think might be deductible, business, and school expenses, charitable. Donations, or child, care and medical expenses, keep. It in sight and organized, so it's not a source of stress rather it should give you a sense of being in control, in. The u.s. if you made less than 62. Thousand dollars last year you, can file directly, with the IRS for, free they, even have some state forms that you can also file for free go, to irs.gov and, look, for the Free File link also. Research. The different online services, like TurboTax. And H&R Block these, programs, have developed a lot in the past few years if you're. Claiming itemized, deductions, these services, are a great, alternative to the higher price of accountants, if. You. Live in the US make sure to check if you're eligible for the Earned Income Tax Credit this, is one of the only tax, programs, that is a refunded. Credit it's free, cash and 25. Percent of people eligible for, it don't claim it the IRS, has an e ITC, tool to check if you're eligible, then. Do one more thing if you, think that you may owe taxes, here make, sure to set up a goal within your savings account or a new account completely, and create. A direct, deposit on, a month a basis to cover any surprise tax bills here's. The great thing about that, should, you be hit by a bill it won't eat into your savings or worse put you deeper into debt but. In the u.s. the odds are in your favor eight, out of ten American taxpayers, get a tax refund so, if you do get a refund make sure you don't spend it right away think, about prioritizing, these two things paying, down debt or increasing. Your investments, these, aren't as much fun as a new TV but both of these options will pay off more in the long run, lastly. A word, about fraud these. Last few years have seen an increase in fraudulent tax returns with, people going to file their taxes to find that they've already been filed and their returns have been cashed by someone other than themselves, try. To file earlier, to reduce the chances of this happening. Doing. These things can help you focus on what's really important, making, sure that you're taking, advantage of all the deductions that you can and more importantly, making, sure you're focusing, where it really counts on earning, as much money as you possibly can. You. For. Most people under 50 the concept, of retirement can be difficult, to imagine let alone plan for how. Do you plan for something that seems so far away and how, do you navigate the minefield of acronyms, and regulations, and service providers, if you're, lucky enough to live in a country where you're provided, a pension, or a defined, benefit, for your life beyond employment, congratulations. But, that doesn't mean you don't need to think about what the third phase of your life will look like for. Many people all over the world their comfort level in retirement is determined, by a simple, factor, prioritizing. Your future self over, your current self but. Think of yourself at the age of 71, can. You imagine what, you're going to be doing on a Tuesday, morning when, you serve anyone it's. Not easy right. Here's. Four building, blocks to make sure the 71, year old you will rock your retirement number. One take. Advantage of any free money offered to you usually, in the way of a company, match for your contributions, in the, US this is your 401k you should, contribute enough, to get the maximum, company match if your, company doesn't contribute, a 401k, loses, some of its benefit, it'll, still lower your taxable income but you won't get the long term benefit, from your company's extra cash also.

Look, At setting up a separate, long term taxed, advantaged, account in the US this is an IRA which is an individual, retirement account, try. To deposit the maximum, allowed each year these, accounts, will allow you to grow your money tax-free, or deferred, until you retire, also. Make, sure the funds are invested and, not sitting in cash the. Easiest, way to do this is to buy a super, low-cost ETF, which is an exchange-traded, fund, or an index fund that tracks the overall market in the, US these. Two funds are the best known lowest, cost examples. Your. Retirement, accounts, are for your future self there. Are often huge penalties, if you want to withdraw money early. 25%. Of Americans, take money up before retirement and they hit with huge taxes, and fines so, make sure the money you put into retirement accounts can be left there until retirement and depending. On when you start contributing, and how much you put in it still, may not be enough, that's, where it's important, to consider your assets across, your life tracking. Your worth over time and prioritizing. Ongoing, investments, many. People rely on their homes to be a core asset when they retire but, homes aren't liquid meaning, you can't get cash out of them quickly and many, people want to remain in their homes and you, need to live somewhere, right so don't, rely on your house as your retirement plan. Lastly. The, biggest, impact on your long-term financial health, isn't how much you earn but how much you spend, it's an annoyingly, simple, formula, spend, less than you earn and prioritize, saving, and investing, think. About the relationship, between your short-term wants, versus, your long-term needs, that. Is rethinking, retirement, and it's much easier than trying to imagine the, 70 year old you as. Much. As human nature conditions. Us to live in the present and make ourselves happy the, more you can prioritize, your future self the, better. You.

2019-03-06 15:57

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