The stock market is not the economy. It is not indicative of the economy’s health. The stock market is a human collective reacting emotionally to news and numbers. It is merely a means to measure the perceived value of publicly-owned companies based on human emotion and expectations. Those perceived values can be overvalued, undervalued or properly valued, and with the Dow Jones Industrial Average dropping nearly 1,000 points the last three days, it seems stocks were overvalued.

Why did stocks fall?

Stocks were overvalued due to a myriad of factors. According to the “Shiller PE Ratio,” stocks were more expensive than they were on “Black Tuesday” in 1929, but less expensive than they were at the height of the dot.com bubble. So historically speaking, stocks were dangerously expensive.

Stocks are overvalued when things are going right. A lack of volatility over the past few years has culminated in a perfect storm that’s seen the VIX -- the stock market’s most popular measure of stock volatility -- rise more than 300 percent in a month.

“One big change affecting the market is interest rates, which have climbed sharply in 2018 to multiyear highs in the U.S. and around the world as economies have picked up steam,” Ed Carson writes for Investor’s Business Daily. Higher interest rates mean higher borrowing costs, which result in people consuming less. Much of the stock market’s recent losses are tied to an expectation that consumers will be spending less in 2018.

What to expect from the stock market in 2018

Don’t expect the stock market to continue providing 2017 rates of return, and with interest rates likely to increase, bonds aren’t necessarily the best place to put your money, but not the worst either.

There is good news for this newly volatile stock market. Midterm elections are more often good for the stock market than bad. “[T]he seasonality associated with midterms has brought positive returns for the stock market a lot more than it has brought losses,” according to Dominic Chu of CNBC. “On average, the S&P 500's return between Oct. 31 of the midterm year and Oct. 31 of the following year has been an eye-popping 17.5 percent.” So it’s not time to pull your money out of the stock market; it’s time to invest in the stock market.

What’s the best approach for investing in 2018?

The best approach for investing in 2018 is the same approach for investing in 2017 and any other year: invest and forget. You’re not going to get rich buying Exchange Traded Funds (ETFs), but you will realize a better return than you would from putting your money in a savings account or buying a Certificate of Deposit (CD).

Attempting to time the market is also a mistake, as is reacting to the market like stock traders did this week. Pulling your money out of the stock market at the first sign of adversity is the same emotional response that drove the stock market down in the first place. Traders selling shares in fear worsened the market’s decline because they had come some accustomed to the market’s lack of volatility. In fact, regular contributions to the stock market help limit volatility. So expect volatility and accept it. Just keep feeding the beast and try to forget that it’s there.


If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl

Published in News & Information

Attending a first-time homebuyer workshop is a great way to prepare yourself for purchasing your first home. You’ll learn how much home you can really afford and how mortgage interest rates are determined, the importance of home inspections, what to look for in a home and how to thoroughly inspect a home during an open house. But an eight-hour, first-time homebuyer workshop isn’t enough time to completely prepare you for the home-buying process. Here are 5 things they don’t tell you at first-time homebuyer workshops.

1. Check the light bulbs and faucets when you tour a home

You’ll probably be looking at homes during the day, so you might not turn on all the lights to make sure they work. You should. When I moved into my house I found almost every light bulb dead, which isn’t a big or expensive problem, but one fixture had a connection that needed cleaning with steel wool and electronic parts cleaner. It could have been worse. I could have had to replace the entire fixture, or worse yet, the wiring to the fixture. So turn on every light switch.

Flush the toilets and turn on all the faucets, too. You might find out your kitchen faucet or sink leaks, or your toilet doesn’t flush, or your shower head needs to be replaced, or your washer or dryer doesn’t work. These are all things you should request the seller repair, and you should go so far as to request all the carbon monoxide and smoke detectors and thermostats have fresh batteries. When buying your first home, you should nitpick.

2. Check crawl spaces, attics and basements for rodents

Even your home inspector might not do a thorough inspection of your attic or crawl spaces. Their biggest concern is with the insulation of those areas, which they can see from afar. When you tour a home, check those areas for rodents or places where rodents could enter the home. If there are holes where rodents can enter, request the seller cover those holes with steel, which rodents can’t chew through. This will save you a lot of trouble you really don’t want.

3. Find out the cost of the average utility bill for the home

You can get a sense of what utilities will cost you before offering on a home by making a few calls. Call the city or county regarding garbage and water, and call the electric company to see what the monthly electricity bill will run. If your home has natural gas, that should excite you, as it’s more efficient and cheaper than electricity. Once you have an idea what your monthly living expenses will be, you’re ready to make an offer.

4. The seller can verbally accept your offer and deny it two weeks later

Even after you submit your highest and best offer and it’s verbally accepted by the seller, the seller has more than a week to sign the papers officially confirming the acceptance of your offer, which is contingent on your request for work to be done on the house prior to the sale. If the seller decides to go with another offer because they don’t want to do the work you’ve requested, they can. So don’t get too excited when your realtor says your offer was the highest and best, and the seller has verbally accepted it, because the next eight to 10 days (depending on whether your offer is accepted around a weekend) will be the longest in the entire home-buying process unless your realtor has made you aware of it. Now you’ll be prepared.

5. Owning certain dogs will raise your home insurance rates

If you’re the owner of an “aggressive breed” or “bully breed” dog, you won’t even qualify for home insurance policies with some insurers. Others will raise your rate because of the perceived risk associated with your dog, even if your dog is the gentlest dog on the planet. So before considering homeownership, shop around for home insurance so you get the absolute best policy and price.

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If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, What’s Cookin Today

Published in News & Information
Tuesday, 01 August 2017 17:01

The 5 best places to keep your money

Loyalty to your bank doesn’t pay. In this era of online banking, there is no reason to keep all your money in one bank. Even if you live in a small town and use a credit union, online bank accounts at the very least give you leverage over your bank to negotiate higher interest rates, but I would suggest taking some of your money out of that credit union or bank and stash it accordingly:

1. Discover Checking

Discover Checking is the best checking account on the planet. Most checking accounts don’t allow you to accrue interest on your money, or if they do, it’s a very small amount of interest. Discover doesn’t offer interest, either. It offers cashback rewards.

 

Every time you spend the money in your Discover Checking account you get free money. Every check you write is worth 10 cents in rewards, and you’ll get enough free checks to last you a decade. Every time you use your Discover debit card, you get 10 cents.

 

Consider you pay every monthly bill with your Discover Checking account: rent, water, energy, credit card and a student loan or car payment. That’s 50 cents. Now consider all of your debit purchases each month. You probably buy groceries and fuel at least once every two weeks. There’s another 20 cents, and if you go out for dinner or entertainment a couple times per month, you’re making at least $1 per month in cashback rewards in lieu of interest. I’ll take that over a miniscule interest rate on my tiny checking account balance.

 

Oh, and if you ever need cash, you can withdrawal on your Discover Checking account at over 415,000 ATMs and do so for no fee at 60,000 of those ATMs. There’s an even better checking account if you live a mobile lifestyle, though.

2. Aspiration Summit Checking

The Aspiration Summit Checking account offers an interest rate up to 100 times bigger than the big banks. I get .25 percent APY on my Summit Checking account balance currently, and one percent APY when my balance reaches $2,500. The best part is I never pay an ATM fee no matter where I am in the world. Instead of getting traveler’s checks before going on vacation, you can just open an Aspiration Summit Checking account and use your debit card anywhere.

 

So those are my recommendations for checking accounts, but where should you keep your savings?

3. Synchrony High Yield Savings

Synchrony is one of three banks that offer 1.2-percent APY on savings accounts (Barclays, Goldman Sachs), but Synchrony comes with easy access to your money, which could be a good thing or bad thing. Regardless, Synchrony offers discounts on hotels and car rentals that Barclays and Goldman Sachs don’t offer.

4. Discover Savings

Since I already have a Discover Checking account, I opened a Discover Savings account as well. It stacks up well against the competition when it comes to its interest rate (1.1 APY), but it makes this list because of its $100 bonus offer. If you make an initial deposit of $15,000 into your new Discover Savings account, you get $100.

5. Wealthfront

For an even better return on your savings, you can open a Wealthfront personal investment or retirement account by answering a few simple questions. Before opening your account, Wealthfront asks you questions about your preferred savings goals. If you want to take more risks for the chance at a better return, you can do that. If you want to preserve as much of your investment as possible, you can do that, too. Wealthfront will invest your money based on your answers to those questions, and they’ll even sell investments that have dipped in value so you can deduct the amount from your taxable income if you enable tax-loss harvesting. That’s why Wealthfront makes the list of 5 best places to keep your money: ease of use. You can open the account and never check it again until it’s time to collect.

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If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, Travelers411, What’s Cookin Today  

Published in News & Information
Friday, 26 May 2017 05:17

Get intimate with your money

While Birdman might sleep on a million dollars cash, you can get intimate with your money without sleeping with it. That’s a more lustful relationship with money than it is intimate anyways. The relationship I’m talking about is one that allows your money to give back.

I recently wrote about how the science of keeping checkbook register is dying but is still badly needed. But it didn’t take long to realize that in order to make my money make more money, I’d need more than a checkbook register in my smartphone. To truly get intimate with your money you have to bring in a third party -- a money ménage à trois, or partie carrée for those ready for a finance orgy of four.

Bring a Money Monitor into the Bedroom

Having someone or something monitor your money habits might sound a little uncomfortable. There they are, looking lustfully at your money, salivating perhaps. But there’s really no need to worry. While online money monitors connect to your bank and credit accounts, their interest is to sell you their money management plans -- not steal your money.

I used both LearnVest and Personal Capital, and I prefer LearnVest because it does more of the work for you. You can just make yourself comfortable and let her take control, so to speak. While LearnVest has a hard time determining from where your money comes and goes, she attempts to organize it in three key areas: income, fixed costs and flex spending. Personal Capital simply puts your money into two categories: assets and liabilities. So I like that LearnVest lets me know how much money I’m spending on things I might not need.

LearnVest can easily identify your income and does a pretty good job of doing so (unless your income doesn’t show up in your bank account via direct deposit). It’s the debits that cause a problem for LearnVest. Some electronic withdrawals aren’t very specific. For example, an auto-payment to a Chase credit card of mine simply comes up as Chase Bank in my bank statement. That was one of many transactions I had to put in the “Credit Card Payments” folder. You can even create a folder for regular expenses that don’t fall under broad descriptions like transportation, travel, gifts, groceries, shopping and home.

LearnVest also has the easier user interface of the two money monitors. There’s no struggling with the bra on this software. Pretty much anyone can figure her out, and she allows you to set priority goals like paying off credit card or student loan debt.

The busty, budget monitor is a really nice feature, too. She let’s you know if you’re in the black or in the red, and by how much. You can even set expected income and expenses and budget for specific things like eating out, transportation, travel and entertainment.

The best thing about bringing LearnVest into the bedroom is it will help you save and better invest your money for retirement. Now she’s not going to whisper hot, stock tips while nibbling on your ear, but by monitoring your money together, you get a better understanding of where it goes and where it could go.

Get Intimate with Your Money Outside the Bedroom

Spice up your relationship with your money by trying new things in new places. You can’t spend all day in the bedroom with your money. Your money needs to get out in order to make money for you. And you don’t need a chaperone, either. You can control your financial future and retirement planning without the help of an investment banker. Just read this first. Then check out Stash. Stash allows you to build a portfolio based on the things you love, so you’ll feel good about where your money is going when she’s not with you.

Stash groups similar companies together in exchange-traded funds (ETFs) so you can invest in an industry rather than a single company. An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, though, an ETF trades like a common stock on a stock exchange, so prices change throughout the day.

So if you’re into technology, you can invest in the “Techie” ETF on Stash. If you’re into social media, you can invest in the “Trendsetter” ETF, and so on. Stash is a great way for young people to start preparing for their retirement without needing a lot of investment knowledge or a large investment. You can get started for as little as $5, and you can set it and forget it with Stash. Regardless of how much trading you do, you’ll pay $1 per month to Stash, and twelve bucks a year is pretty cheap considering individual trade commissions range from $4.95 to $6.95 each.

There are plenty of ways to earn a good return on your money without paying commissions to an online trading service, too. Charles Schwab offers over 200 commission-free, exchange-traded funds (ETFs). You can trade any one of them anytime without paying a dime in commission. This is an even cheaper way to get started on saving for retirement.

Whether you’re a recent graduate looking to begin growing the very little money you have or an experienced stock trader looking to invest over $100,000, there’s an online stock broker that’s right for you. Nerd Wallet has again knocked it out of the park and reviewed every online stock broker for you. But there’s even more you can do to grow your relationship with your money.

Bring an Investment Manager into the Bedroom

If your money is too much to manage by yourself or with a money monitor, it might be time to bring another person into the bedroom. An investment manager can design an investment strategy that will hopefully meet your retirement goals. I say hopefully because not all investment managers are reliable in the bedroom, and I certainly wouldn’t pay one doesn’t perform.

If you live near a metropolitan area, your best bet is to sit down with a local agent of a few online brokerages. There’s a Charles Schwab and Scottrade office near me, so I’ll be visiting with their staff next week to see which one I like more. I’m leaning toward Charles Schwab because of their commission-free ETF options, but you never know what these people are willing to offer once you’re on the way out the door with your money. Do your research before you sit down with these people, though. Have an idea of what you’d like to do with your money, how risky an investment you’re willing to make and how often you intend to trade. You don’t want to bring another person into the bedroom without warming-up to them a bit first. 

If you live in a rural area, you’ll probably have one investment advisor in the whole town if you’re lucky. But it doesn’t cost anything to schedule an appointment and just chat about your plans for retirement. You might even learn something you didn’t realize just by uttering your retirement plans aloud.

Whatever you do, don’t commit to anything or sign anything, open an account or hand over any money based on your initial interaction with this person. First of all, these people are selling themselves in order to have an affair with your money. They aren’t who they seem, and you don’t want to realize that once they’re in the bedroom disrobing your money and tossing it around like a pimp. Secondly, these people are selling themselves, so they’ll likely offer you a better deal if you play hard to get. Investment banking is highly competitive, and customers don’t come along with your stash everyday. You are special, and you have a special relationship with your money. You didn’t get intimate with your money to hand it all over to someone else. You should remain involved in the relationship going forward, so find an investor who wants you in the bedroom with her and your money.

That’s how you get intimate with your money and stay intimate with your money. Online money management services and stock trading allow you to be more involved in your retirement planning than ever. And you should stay involved, because while you can’t take it with you, your money can work for you and those you love long after you’re gone. Getting intimate with your money will payoff for generations, so sit down with your money regularly and don’t be afraid to bring someone or something new into the bedroom.

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If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, Travelers411, What’s Cookin Today

Published in News & Information

Online banking has all but made the checkbook register obsolete. You can check your balance on your smartphone, view it online or even print it, but the lost science of registering debits and credits hasn’t gone away, and it shouldn’t.

The importance of logging your debits and credits hasn’t changed. They still teach it in middle school family and consumer science courses, but fewer people stick with it. My sister still keeps her checkbook register up-to-date despite writing two checks per month for rent and utilities. Everything she buys with her debit card gets logged in the checkbook register, and it’s no surprise she’s better with money than her brother who doesn’t -- until now.

Log Your Debits and Credits

I don’t write checks. I pay my rent in cash and my bills online. I setup automatic payments for all my bills, so I never spend time with my money. This is a big mistake. It’s the number one easiest way to save money according to CNBC guest contributor Brittney Castro. Just sitting down with your money once per week to monitor debits and credits and budget for the week can put you in a better place financially.

If you’re like me and don’t have a checkbook but want to log your debits and credits on paper, you can print blank registers here. I’d rather use my phone to manage my money. I am logging my debits and credits on my iPhone using the Spending app. It’s also available for free on Android devices. It allows you to log debits under the following categories: eating out, clothes, entertainment, fuel, general, gifts, holidays, kids, shopping, sports and travel. You can also add a category of expenses and income. I added my Airbnb income for example.

You can view your debits and credits over the week, month or year. The best part is, turning your phone sideways reveals a pie chart of your expenses. This way you can see what’s costing you the most money and where you can start saving. Hit the cash flow tab and a graph reveals your income, so you can see those weeks you took some time off from work, or in my case, hosted more or fewer Airbnb guests. This is much more helpful than a checkbook register because it allows you to more easily see where you’re wasting your money. I’m a sucker for eating out, but since I’m new to my city, I think it’s only natural to be trying restaurants to see what you like and what’s worth the money you’re paying. Still, if I want to save money, I’ll have to cut out some of that spending.

Open an Online Savings Account

Using the Spending app to budget for your week or month isn’t the only way to better manage your money. It takes a lot more than monitoring your debits and credits to reach your financial goals. After I get my check today, I’m heading to my bank to withdraw some money to put in an online savings account. Remember those days your money in your savings and checking accounts actually made you money? Well, those days aren’t all gone. You just have to do more research and move your money around more often. Luckily, Jeff Rose has already found the top online saving account interest rates for you. Some online savings accounts require a large deposit to open the account, but many can be started for as little as $25, and while 27 cents doesn’t sound like much, it’s still 27 cents you didn’t have before, and will be a few bucks by the end of the year.

Cut Transportation Costs

Cutting your transportation costs is the easiest way to save money if you commute 12 miles or so to work everyday like me. I intend to start riding my bike to the bus stop to save even more money this summer, and, eventually, I’ll do the entire 25-mile commute on my bike to get in great shape. But the gas rewards card is a thing of beauty. I keep two of them on me at all times, so regardless of what gas station is nearest I have a way of earning points and saving money. That moment after you swipe your card and the screen on the pump reads “We’re lowering your prices,” or “Use $2.96 in rewards?” I get all warm and fuzzy inside. It feels like you’re cheating the system, and speaking of…

Take Advantage of Rewards Programs and Rewards Credit Cards

Sign up for every free, rewards program you can find. My favorite is Ebates, which I’ve been using for almost 10 years. During that time I’ve been paid $113.72 just for shopping at my favorite stores online. You can even install an extension for your browser, so anytime you happen upon a store that’s an Ebates partner it will ask you if you want to enable Ebates cash back. Just click the button and you’re on your way to free money for every purchase you make.

Another extension I’ve attached to my browser is Honey, which scours the internet for coupon and promo codes that apply to the store you’re visiting. It’ll tell you how many coupon and promo codes are available for that store, for what they can be used, and allow you to save money on your order right there and then. There’s no need to open a new tab and search those ad-happy coupon and promo code search engines anymore. Just install Honey.

If you travel a lot, open an Expedia account and start earning rewards points worth airline miles and discounts on hotel rooms and car rentals. You can even find discounted tickets for activities on your trip. The other day I was offered a free flight if I booked a hotel along with my flight through Expedia. I don’t book through anywhere but Expedia now, because Ebates gives me 10 percent cash back on top of any discounts I get with my rewards points.

If you travel for business, a travel rewards credit card will probably be a good thing to have in your wallet. Nerd Wallet has put together a fine list of the best available travel rewards credit cards, but if you intend to apply, be sure to note whether the credit card has an annual fee. If you travel enough to accumulate enough miles to use during the fee-free, introductory year, you can jump ship after just one year and move to another travel rewards card. If not, just pick one that doesn’t have an annual fee.

Finally, the most rewarding and money-saving rewards program and credit card are with the same company: Amazon. I buy a lot of books, technology and vinyl records. Most of my birthday and Christmas gifts are purchased on Amazon. In fact, I just sent my mom her Mother’s Day gift using Amazon (they do gift wrapping for $4 if you’re wondering and include a short, personalized message on a card). I also sent my sister her birthday present using Amazon, and neither of those gifts cost me a dime. Here’s why:

I got hooked on Amazon at a young age. I was really into Ebay when I was in high school, but when some of the items I purchased came with defects and weren’t returnable, I started using Amazon pretty regularly. I’m pretty sure the first credit card for which I ever applied was my Amazon Rewards Visa Credit Card through Chase.

My new, shiny Amazon Prime Rewards Visa Credit Card came in the mail just a few weeks ago. Since I’m an Amazon Prime member, I get five percent cash back on every Amazon purchase to be used on future Amazon purchases. I also get two percent back on purchases at restaurants, gas stations and drugs stores, and one percent back on all other purchases. While the interest rate is high, it doesn’t matter because I pay it off each month. So that’s how I ended up taking care of my sister’s birthday and Mother’s Day without spending a dime of my own money.

I cannot stress how rewarding Amazon Prime has been for me. I became a member when I was a sophomore in college because I was tired of paying way too much for textbooks at the bookstore. Instead, I managed to save a ton of money buying them on Amazon and had them shipped in two days for free thanks to my Prime membership, so I rarely fell behind in classes because I didn’t have a textbook. I even made a bunch more than most of my classmates selling my textbooks because I used Textbook Wheel, now First Class Books, instead of selling them back to the bookstore. Never buy textbooks from or sell textbooks to your university bookstore. We live in a global economy. Your campus is not the best place to get the books you need for classes or the money you need to celebrate passing your classes.

I’m just now taking advantage of Prime Pantry -- Amazon’s online store for mostly non-perishables. Here’s a breakdown of what I got:

The best part is all of it will be delivered for free to my apartment within four days. The real value is I got to compare prices from the comfort of my computer desk and didn’t have to stand in line at the grocery store checkout. Oh, and did I mention that my Amazon Prime membership includes video streaming of movies and shows and free, two-day shipping on any Amazon warehouse-fulfilled item?

So keeping a checkbook register is all well and good, but the internet and smartphones allow for so many more ways to save money, whether it’s by logging your debits and credits, transferring money to an online savings account that actually pays interest, saving money through online rewards programs or buying the things online you already buy at the store. Welcome to the online banking and shopping era and enjoy the savings.

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If you like this, you might like these Genesis Communications Network talk shows: USA Prepares, Building America, Free Talk Live, American Survival Radio, Jim Brown’s Common Sense, Drop Your Energy Bill, The Tech Night Owl, Travelers411, What’s Cookin Today

Published in News & Information

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