Valentine’s Day Don’t Break the BANK

Valentine’s Day Don’t Break the BANK

Don’t Go Breaking the Bank for Valentine’s Day

Stay Focused for Valentine's Day
Stay Focused for Valentine’s Day

5 Ways to go Non-Traditional for Valentine’s Day and Show Your Love

Valentine’s day isn’t the go for it all break the bank to show your love day.  However, it is a good time to start making real moves to solidify your relationship goals by building the foundation of a relationship, finances.  No matter what you’re gonna have to make a showing of love with flowers, cards or candy. Just don’t get lost by becoming a retailer’s dream, instead, I have 5 things to focus on that are non traditional, yet great moves for solidifying a relationship that’s moving forward.

-Miles.

Stop Borrowing -Start Lending

Stop Borrowing -Start Lending

Are You Lending Money, but You’re Not a Bank?

Bankless money lending

Many of us have worked quite hard to elevate our financial profile to the position where we are readily able to take good care, buy most things that move us and reach most relative goals (most).  Many of us can at the very least figure out how we can attain what we want, when and even how.   While not being rich by any definition of the word, we still do pretty ok, so we say.   Here’s what not news, others notice this financial confidence and ability to manage most financial lifestyle events.  They notice you not only buying some things, participating in certain activities, but also maintaining the relative lifestyle and keeping up.  Some folk notice this so much that they may even do what I call bookmark you as a financial “go to” in case things get sticky.  Where they keep you in mind just in case their irresponsible ways of handling money catches up with them, just in case they aren’t able to pay their bills, need money right away to carry them over or even to help get themselves going in their own small business.

They'll borrow, lend, loan, let me hold... you to death.
They’ll borrow, lend, loan, let me hold… you to death.

Problem is, you’re not a bank regardless if they treat you like one.  You probably didn’t tell some of the most financially irresponsible people in the circle of family and friends “hey, if you run low on cash call me”.  But they do anyway, sometimes they pay you back, sometimes they don’t and others times they want to pay you like your Master Card or Visa, paying $10. then $5. then $15.  Like really, is this how I’m gonna get my $150. back???

Other than just making loans that may never get paid back with a guaranteed 0% interest, there’s the new thing “funding” on sites like Go Fund Me and others for all sorts of hair brain ideas.  There’s been a new market built around the short on cash overspending crowd, PayDay Loans, but at the very least they fight to get their money back and balance the risk between borrowers.

Don't be Big Worm, don't chase folks for your money
Don’t be Big Worm, don’t chase folks for your money

So if you must lend money because it’s nice to be nice, you can make some money too because that’s even nicer!  It won’t take becoming a Pay Day Lender and killing people financially, although peer lending is the original Pay Day Lending platform.  However, you can lend money to individuals that are willing to pay back with interest, something like operating your own bank or credit card company.  Of course, there are middle man sites that set this up, but either way, you can get in on the lending for a profit.  The middle man sites work in your favor by qualifying lenders, getting profiles, rating borrowers, giving worthwhile  insight and directions on lending rates to offer, setting up terms and other resources that will make remote personal lending simple and easy.

Some of the most popular sites for personal lending, officially called “peer-to-peer” or peer lending are https://www.prosper.com  and https://www.lendingclub.com .  There are several others of course and you can search them using “peer lending” in the search bar.

So this may your chance to move from friends and family network lender that never gets paid back to start lending and running your own little bank thing online.

-Miles.

2016 Max Out the Savings

2016 Max Out the Savings

2016 MAX OUT.

Overstuffed piggy

2016 is in full effect, and although there’s still some of last year lingering around for tallying taxes, earnings, dividends, losses, 2015 is still pretty much in the bag. Once you get the 1099’s out of the way you’ll have the hard figures on what you made saved and maybe lost.  2016 is the focus now, I usually give myself a month or even two to really iron out and commit to new year goals and so called resolutions. It takes about a couple of months just to be sure if the new goals are worthy, not too lofty and not too easy, no matter what they’re usually never too easy.

Slow and steady wins the race
Slow and steady wins the race

This year a new twist, targeting a savings or investment account and trying to MAX it OUT, through contributions of course.  Selecting a retirement account, education savings account or something similar and making the MAX contributions for the calendar year. Some folks this will come fairly easy, for the majority it’ll be a set it and forget it challenge and a few others will maybe need to put this challenge in perspective for their budget.  Regardless of budget, economic status and earnings it is fairly universally agreed everyone should be saving for a rainy day, cloudy at least.  That being considered, there are many avenues to save that pretty much applies to everyone in some way or another.  There are 401k’s, 403b’s, 457’s, Coverdell ESA’s, MMA’s, Government Savings Bonds, ROSA’s (Regular Old Savings Accounts), IRA’s, Roth IRA’s, Roth 401k’s, 529 Plans and the list goes on.  Thing is, most of these accounts have some sort of maximum amount you can contribute annually, primarily because the majority have some money saving features whether it’s through deferred taxes on contributions or tax free earnings on contributions. Whatever your flavor or purpose, you’re probably enrolled or have one of these set up someplace, at work or elsewhere.  When it comes to waiving of taxes on earnings or contributions, the government is involved to authorize that sort of thing, and they also put caps and limits, check out Retirement Plan limits and details for the most up to date and accurate information for plan limits and specific details.  Many folks never really hit the caps or limits set or even know they exist.  In today’s show, to kick off 2016 we’re focusing on identifying the limits and choosing one of these accounts to max out for 2016. Regardless of our budget, we’re going to figure a way to MAX OUT for 2016.

 

-Miles.

Right Now Segment. Retirement Saving

Right Now Segment. Retirement Saving

New Ways To Save for Retirement. Right NOW.

New Ways to do Old Things
New Ways to do Old Things

During this Right NOW Segment, I discuss a new and exciting opportunity to save for retirement even if you do not work someplace where your employer offer a traditional retirement plan such as 401k or 403b.  Retirement Saving is key to financial wellness, now both individuals and employers can help setup a plan that is of no cost to the employer, allows direct deposits with no fees or management costs and is transferable from employer to employer.  A new, safe way to save and earn interest with no fees! Retirement Saving is available for even more people that want to save. Check out The Newest Thing in Retirement Plans to find out how you can get started Right NOW for Retirement Saving.

It's a "This" plus "That" Retirement plan.
It’s a “This” plus “That” Retirement plan.

-Miles.

The Right Now Segment: Money Management

The Right Now Segment: Money Management

This week’s Right Now segment cover what to do starting today to manage your money and track your spending.  It’s all about Money Management no matter how much money you have.  This is a key step in saving and ultimately investing, knowing where your money is going and stopping and unnecessary frivolous spending.  You may find some surprises hidden in your spending and savings habits.  Have you spent 50% of your income this year on any one thing?  Are you saving as much or more than you spend on social activities?  What are your food costs on average for the month?  vehicle maintenance, children’s clothing, transportation and bus fare, and those terrible bank fees!  They can all be quantified monthly or annually, whether your buying the high grade gas or getting the latte’ everyday, it all adds up and you may be surprised how much it is every month or year.  The most popular software is available from Mint.com, it’s free easy to use and most of all, you can do it Right Now.

EOY Money Target. Hit or Missing?

EOY Money Target. Hit or Missing?

End of the year roundup.  On Target or No??

Are you on target for the 2015 Goals? There's still time.
Are you on target for the 2015 Goals? There’s still time.

As we approach the end of the year, yes October should be signalling the end of the year, it is th perfrect time to make annual adjustments regarding financial goals, wealth and well being acccordingly.  And these things may range from how much you intended to save, bills you meant to pay down, points on your credit score to improve upon or most important of all, your health and physical well being.

Typically, as far as finances go you should be balancing and rebalancing semi-annually just to make sure you are on
track with any goals from the beginning of the year.  Usually some time around June or so, reviewing your 401k if you’ve got one, 529 plans, IRA’s, annual Christmas Club Saving Plan, (does anybody still do these?) and anything else you can think of that you need to stay on top of during the year.  Make adjustments accordingly, increases, sell-offs, account closing and opening, etc.  Are you headed where you want to be for based on half way through? If not, the middle of the year is a good time to check and correct.  And, it is also a good time to start some of those things that fell off the table during the New Year’s resolution stage, which for me is typically the entire first three months.  It sometimes takes that long to narrow down real reachable goals that I can measure and guide as the year goes on.

Now's the time to measure and adjust to meet the annual goals.
Now’s the time to measure and adjust to meet the annual goals.

During the last quarter of the year, beginning Oct. 1, the same thing should occur with a bit more focus.  Besides
getting caught up on all of the things and statuses of accounts, there’s the reality check for what can really be
accomplished in these last three months.  Let’s say you’ve intended to save $100.00 per month with the intent of getting a stated interest, if you’re not at least half way there can you get there with what’s left of the year?

Readjusting goals is a normal practice and beats letting them go altogether.  If you see you can at best end up with $900.00 for the year, readjust and make that happen. The satisfaction and benefits of accomplishment far outweighs giving up on your goals, even if only you know about it.  If there are any investments or college savings plans you may have intended but never got around to, now is a great time to get ahead of the coming year and open new accounts with even the smallest amount.  Many accounts for IRA’s, College Savings IRA’s and Mutual Funds will waive the initial investment of over a $1000.00 and let you get started for $25.00 to $50.00 if you pledge to make monthly automatic deposits.  Speaking of automatic deposits, it’s been proven people save more with an automatic setup, (direct deposit, pretax, and auto-debit) than making manual deposits and investments. Having these plans and accounts in place already will allow you to follow through easier in the coming year.

For the hustler and entrepreneur in you, the last quarter marks the beginning of the next year as it relates to becoming prepared early.  A true businessperson will need to familiarize themselves with and learn their industry, customer or client.  Forward looking entrepreneurs can begin setting up their legal business structure, (C-Corp, S-Corp, LLC and Partnerships) gathering information on regulatory requirements for their particular business, focus on financing (often overlooked, personal credit is key as an entrepreneur as you may need to rely on this to back up the business as the business will have no history!) relevant credentials, marketing and start building out the foundation of the enterprise whatever that may be. Also, keep in mind that all of the costs and expenses that go into setting up the legal structure, market research, travel, courses, equipment, goods and stock, expenses related to building out or using office space in your home, and any other expenses related to getting the business up an running are tax deductible for the current year.

So being on your grind, you’re set to reduce your taxable income for this year and tax season is in 2 months. Get these started now and keep good records!  Health Regimen. There will be no need to worry about financial prosperity except to pay the medical bills if there isn’t proper focus on health.  Most important semi-annual and End of Year review if that of your health.  Beginning with regular physical to dental and eye check up for the basics.  Then there are the specifics based on your gender, age, race and habits -those dang habits, some good and some not so good. Whether it’s prostate checks or mammograms, get in focus early.  Now’s a good time to start a routine and maybe review or tweak your health practices ranging from what you eat to how often you eat.  I personally don’t believe in crash diets whatsoever, but tweak things as I go.  A regular workout schedule and a decent diet will do for most people. just find what you like out of the stuff that’s good for you and have it often.  Fighting off any preventable conditions such as diabetes, heart disease and high blood pressure that will steal your time, ability to focus on your prosperity and happiness or cost you the same money your working so hard to get is the way to go.  I’d even consider changing my doctor if we can’t work out a plan to avoid a medication for an avoidable condition, he’s not helping me reach my goals.  Also, gym time is a great investment, just don’t get lost paying for a gym you don’t go to although that’s how they make their money.

Health and Wellness is the bedrock of personal prosperity. Annual Checkup and Physicals are key
Health and Wellness is the bedrock of personal prosperity.
Annual Checkup and Physicals are key

Finally, there’s plenty more to discuss but to summarize…  Review what’s attainable and what’s not, be realistic of
course. Cut the losers and keep winners, whether it’s ideas or stocks and in some cases people activities and even jobs sometimes. Losers such as unnecessary medications, banks fees, high interest credit cards, finance fees, depreciating investments expensive cars or appliances with costly repairs, high media costs for cable and movie channels can all be losers, just sucking money away from you that can be better utilized. Winners like free checking accounts, low interest credit cards, (call them and ask, you may be surprised) increasing IRA contributions instead of poor 401k options, increasing retirement contributions with every raise, using money market accounts instead of savings accounts, reducing taxable liability by using FSA options and for eligible expenses are all winning moves.  Quitting Early has an upside and may save lots of losses later on, that’s what reviewing is all about. Equally, Starting Early can give you the leg up and put you in position to prosper instead of trying to figure things out when the time comes.

Here are some money saving  tools and routes to take to get set up for the coming year.

Check out opening a USAA Roth or Traditional IRA

Education savings plans at U-Promise

Fidelity offers Roth and Traditional IRA accounts with no minimum investment

Bankrate offers a great comparison chart for credit card balance transfers

New way to save money on medical procedures AND even get paid to do it.

Check out Discover for a Money Market Account instead of a savings account

What should you get in a health physical and what to watch for from the CDC

An annual physical can cost anywhere from $75. to $200 if you don’t have insurance and is worth it

Some more ballpark pricing for a Health Physical

Invest using a roundup method with every purchase using the Acorns app

Start small and grow Big with Wealthfront.com

Create a budget by tracking your spending and get organized using Mint for Free

Start anywhere with any link above… just get started!

-Miles.

Young Money Investing

Young Money Investing

Young Money. Raising Investors…

Little investors can make big decisions too.
Little investors can make big decisions too.

Getting started early is a key aspect to success in almost every endeavor, and there’s no difference when it comes to building a foundation for a good understanding of finances.  Much like cigarette manufacturers took notice to focus on teens and early age kids, banks have started to the same except with a more positive focus.  Get children involved early, make in popular and chic and you’ve built a foundation that may last the rest of the lives.

As parents and guardians we often recite the saying “We want to provide better for our children than what we had”, in the area of personal finance and economics the opportunity is there to do just that.  For me I hadn’t opened a bank account or had a credit card until I was an adult and by then the marketers of the retail world had shaped my conscious consumer mind.  It would take me a long, long time just to get eh basics of how to operate and manage a bank account, credit cards and other finance tools effectively.  Lots of lost money in fees, late fees, interest and the total misunderstanding of some basic rules for the money road ahead.  Not that it would be anyone’s fault but my own, but it just wasn’t typical culture in my household to handle and deal with financial tools. It was always a far off thing and I didn’t even notice banks until I was a young adult.

Today’s environment isn’t quite the same as when i came up, the world is quickly moving further and further into a cashless society where you login to pay bills and check balances regularly.  Payments are made electronically various bank accounts are linked together making easy to move and manage finances and phishing scam email steadily come in asking for access to accounts from far away heirs to estates and kingdoms.  In preparing your children to thrive in today’s environment, a solid foundation in finance has become far more important to their individual prosperity.  Everything from simply managing a bank account to understanding the reasoning why to not pay just the minimum balance, or default makes the difference between getting going right out of college or involuntarily living at home until they are 35.

A greater number of banks now offer juvenile and custodial accounts to help young adults and children get started than ever before with saving accounts, online access, checking accounts and even brokerage accounts for investing in their own future.  Oftentimes there are special programs and guides that focus on everything ranging from saving for college to buying a new car.  Depending on the bank you can link your child’s account for funding, have remote access to control spending and even set up automatic allowances.  Automatic allowances? Yes, basically direct deposit and you can do it every 2 weeks just like your paycheck.  Having these sort of accounts gets them started early with setting up accounts online to make payments for recurring bills such as cell phones (since children seem to have phones these days, not in my day!), even paying for school lunch, they can buy bus passes, travel and do whatever you may find yourself holding their hand doing.  Getting started early on with understanding their balance available to them, penalties for overextending themselves and how to avoid doing so, and just getting a good understanding of how these things work.

Kids understand gains and profits more than you probably think.
Kids understand gains and profits more than you probably think.

Recently, I contacted my investment broker to open a custodial account for my youngest son, although I had set up traditional bank accounts as a norm for all of my children while in their preteens I hadn’t given an investment account much thought.  As it turns out, this is a great idea.  There’s nothing like learning while actually doing and participating.  And, and enthusiastic student makes for easier teaching as well.  Once you get past explaining how companies sell shares to the public, how shares are valued, start using the terminology and put things into perspective that they can understand the light bulb comes on and super bright too.  The side benefit comes from whatever you aren’t too well versed on gets refreshed or you just end up learning some new things as well.  Opening a brokerage account, looking at stocks and getting an idea of how to buy them.  Even without buying stocks, just looking up companies that they know and understand will draw their interest as they compare which companies are larger or better for whatever reason.  Companies like Sony for the PlayStation, Microsoft for the Xbox, McDonald’s, Foot Locker for popular shoes, Gamestop for gaming, Kellogg and General Mills for the cereals (kids love to eat!!), EA Sports for the games and the list just goes on of what companies they know and can tell you about these companies.  A quick review of how becoming a shareholding investor makes them own a piece of the company and they should have a sense of pride in ownership of something they may hold so high and know so well.  This makes it easier to embrace the practice of evaluating the merits of the companies and reasons to keep stocks, understanding dividends and how investing can allow them to make money from good and well calculated decisions –all without doing chores!  I know my son cannot wait to see his first dividends, it could be ten cents, it won’t matter because in his mind he did nothing, (as far as physical work is concerned) and got paid.  This could change everything, starting at a young age.

Surely, getting them started young and deeply interested to what they understand has immeasurable benefit for them later on in life. Understanding credit, banking, interest rates, investing, returns, insurance, healthcare costs, small business and consumer economics will lay the foundation for their prosperity.  No matter which direction they take in life whether to become a veterinarian, a politician or a barber your children will definitely need to make financial decisions that their overall success will hinge upon.  So get on it now or you’ll never get to use their room as a walk in closet because they’ll be home even though they have a good paying job.

Adult Children at Home
Adult Children at Home

For some info and ideas on banks that offer youth checking and savings accounts check out:

Well Fargo Youth and Teen Accounts

USAA FSB Youth Accounts. 4.5 out of 5 stars

Fidelity Youth and Custodial Accounts

Scottrade Custodial Accounts

Just to name a few, however, if you already have a bank account try there first or go to a local credit union as they offer very terms for youth accounts.  For the brokerage accounts, again try yours if you have one or you can try one of the few above.  Most are pretty good in their own right, consider the details as of course there are some special rules and laws that apply to custodial accounts, none of which however that will preclude anyone from getting started.  Also consider, most of these custodial accounts are out of reach and are protected from certain entities should you find yourself in financial straits, and that is something that should always be considered in my opinion.

Banking and savings can start small, and adds up over time.
Banking and savings can start small, and adds up over time.

Another way to get the children involved to make them aware of any 529 plan accounts and let them actually see money being saved for college, they can also make contributions to 529 plans from allowances and any earning from their own work as well as gifts, (you know the birthday card with $50. in it) yeah, drop that in there too.  Although 529 plansare more or less mutual funds, it gets the conversation going there too.

Kids Can find investing exciting when it's relevant
Kids Can find investing exciting when it’s relevant

Lastly, try not to be intimidated by any lack of major funds on your part, not opening an account because you don’t have much would be a big mistake.  No matter how small, it’s important to get started understanding these things early and practicing them too.  Most 529 plans and Custodial IRA’s will let you open an account with $50. if you set up an auto draft deposit from you bank once a month, and in the worst case scenario you can suspend the deposits but he account remains.  You can fund a typical brokerage account with $25. if you need to and by whatever stock you can afford, and there are no ongoing fees to keep it open and hold the shares for you.

A world of opportunity just waiting.

 

-Miles.

Dollar Cost Averaging Your Investments

Dollar Cost Averaging Your Investments

“Dollar Cost Averaging” You Already do it Everyday.

Consistent Deposits Build Up
Consistent Deposits Build Up

Let Averaging Work in You Favor When Investing.

There are many approaches to continually investing, some of the more experienced investors or traders perform transactions on the swing of stock news and events, others go on the relative cost of the investment or its payout. For everyone else, it kind of comes down to “Dollar Cost Averaging”, that has a nice ring to it and even sounds a bit sophisticated, but it isn’t. Most of us do dollar cost averaging everyday with our groceries, clothing, stopping to buy gas, dining out and so on. Most of the costs for our everyday expenses fluctuate to some degree or another. Although we have an “anchor” price or range in mind, there are still times when the cost is far above or below the set anchor price, like when we pay $6.00 for a bottle of water at the amusement park. Still even then, that cost of $6.00 just get thrown in with the others although it’s the highest, since we only pay it once or twice a year at the amusement park it’s tolerable. The overall average cost of buying a bottle of water hasn’t moved up that much from those one or two purchases. The same happens for when we buy all other things ranging from jeans to socks. With investing, it’s the same thing except that it’s inverted because you’re saving or investing instead of spending. So instead of getting items on sale from time to time and buying maybe one more since it’s at a great price (which I always do), you’re getting more shares each time.
In investing or saving in something like a IRA or 401k, the same thing occurs and allows us to get good average pricing as time goes on. Most folks that have an employer managed 401k also have contributions made on a consistent and ongoing basis. The contributions buy into whatever funds you have selected in the plan. The month the fund may be let’s say $100.00 and next month it’s $125.00 and the contribution is $500.00 per month, during the first month the you purchased 5 shares of the plan and 4 share on the second month.   However your average cost per share is $112.50 when you take all of the purchases into account.  If the share price were to increase over the following month from $125.00 a share to $130.00 a share, that would just give you already purchased shares more value. Even though it you would buy less at $130.00 your average cost would increase by very little. Conversely, if during the third month the share price were to drop to $120.00 a share then you would have the cushion of the $12.50 per average share difference to shield you before the average value were to be impacted.
This is one of the hidden forces within your 401k and why it can grow so quickly, however, it doesn’t have to work there only. Much like you are doing the same thing when you buy everyday goods, you can also do the same thing in your IRA, savings account, money market account and so on.  So if you have an investment consider setting up a monthly feed to it, no matter how small, the consistent purchases of a set amount allows you to buy more when it’s cheap and less when it’s costly. You can really increase your potential with magic of dollar cost averaging.
If you’re planning to do this for an IRA or other savings account, it would probably help to set up an account to pull the funds from. Setup a separate bank account just for the purpose of regular and ongoing drafts to fund an IRA, you can always add your one time hits of hustle money from overtime or selling something on eBay that you come in to from time to time. All of that counts too.

-Miles.

Investing with Small Amounts of Money

Investing with Small Amounts of Money

Now More Than Ever, Smaller Investors Make a Big Difference.

Over a the past twenty or so years many regional and national banks would come to find profitable customers lying just below the surface of premium account holders with large daily and monthly balances. So out went the offerings of the infamous toasters and blenders, in came the lure of interest bearing checking accounts, competitive CD rates and eventually checking accounts for all. Banks learned the profit was in the everyday small account, through fees and charges, these accounts may prove far more profitable in the long run than the high balance accounts. Even credit card issuers would become to understand this, between fees, charges, floating interest rates based on balances and dare not forget the interest on top of compounding interest for late fees. Credit card issuers make so much more profit on the smaller accounts, so much, that from time to time the government has to step in a make new laws regarding interest rates and minimum payments. Accounts with small balances and high costs can sometime be almost all profit, surely, more profitable than the customer that balances their check book, pays their bills on time and completely pays off their monthly balance.   It would be just a matter of time before this approach would work its way through other areas of the finance industry, and soon enough with the help of internet access, the investing branch of the finance industry would also be able to reach those highly valuable customers as well albeit for varying reasons.

Free Toasters

Typically in the minds of the average non-investor, buying stocks and bonds either was or in some cases is something that is behind the high wall of Wall Street. Stock picking and investing in general can be confusing, cryptic, and intimidating for newbie investors altogether. Participation in Wall Street activities, stock or bond investing usually implies that you may either have a bunch of money or need a bunch of money to participate. Wall Street is also known to have a set logic and language all of its own and if you’re not in the know or familiar with its vernacular or logic, it isn’t for or available to the uninitiated. Without having someone or some entity such as a broker or advisor to usher you in and explain the details of how things actually work, how much money is needed and a general sense of how to evaluate potential investment prospects at a most basic level then most potential clients and investors are left to speculate. That lack of direction only makes the situation worse leaving would be new small investors to sometimes guess how to go about investing and what investment vehicles to consider for their specific goals. Many national banks have tried to tap this potential by putting an advisor inside many brick and mortar branches to no avail, they have other potentialities to chase after anyway. Sure, there are many people that go out and learn on their own to understand the basics, however, a far greater number are left on the sidelines who want to invest and grow their monies. The brokers, financial advisors and stock dealers were usually out of reach and really not so interested unless a potential client had about $10,000.00 or more to invest or close to it. Brokers weren’t reaching out and calling potential clients that had maybe $100.00 a month to offer up for ongoing investments, that sounds more like go open a bank account and get a free toaster in the pre-internet era, call us when your money grows up. Neither were the folks who were diligently saving their money at the local savings bank reaching out to brokers to open brokerage accounts and invest, primarily because in their minds it was considered out of reach and something that was for the rich and the wealthy. Sure people would at times talk about getting in by buying “penny stocks”, which are generally viewed as the lowest entry point for stock investing, but probably should be viewed as “Stay Away”.

A look back over the pre-internet to digital age transition years makes it abundantly clear that it was just a matter of time before up and coming brokers with new and creative approaches would realize the same things that bankers and credit card issuers came to understand. Although mega accounts and large individual or wealthy clients was what all the brokers were chasing, there was so much more being left on the table. In the digital age, discount brokerages are now able to reach smaller less wealthier customers, and there are a greater number of these customers. As it has been stated in everything from union strikes to “occupy” movements, there is a greater number of less financially wealthy, working class people than there are super rich and wealthy. Those people, the 99% or 98% whichever argument you may subscribe to, a good number of them do save and invest diligently like clockwork and regardless of their level of financial sophistication they would also like to invest even more. There are many brokerages that serve this segment, a thriving segment of hardworking people that are willing to diligently save and invest for their future and large enough to support a sub industry of discount brokerages. It took Wall Street some to take notice and see how much these folk are tucking away in their 401k’s and 403b’s, it’s estimated that $500 billion will be contributed to employer based retirement plans by 2019 according to the site www.retirementincomejournal.com , so it’s clear that the little bits of money thing is working.

Bettermement 2

Some of the latest and popular discount brokerages are now building entire platforms just to serve that everyday small investor, whether the investor is on a monthly recurring deposit, investing change from purchase roundups or one time purchases. This concept completely sidesteps the need to become ultra-savvy in investment or stock trading terminology, no studying a company’s return or P/E and no looking up mutual fund ratings with 5 year returns. Investors basically set up their account, on smartphones in many cases, select moderate to aggressive goals, choose how much to deposit from which source and when…  and that’s it, you’re investing. You’re buying into the S&P 500, The Dow, Ford, Apple, a mutual fund, an ETF, a stock or bond portfolio or whatever they’re calling it at the moment, even if you don’t know what the S&P 500 really is. You can log on anytime from anywhere and see what your portfolio is doing, if it’s up, down or sideways.   And while there’s more to consider like why it’s called the S&P 500, actually you don’t have to, it isn’t necessary to be as savvy and knowledgeable as some guy day trading sitting in front of three screens all day smoking camels and drinking coffee by the quart. Nor do you have to be some big time investor with a boat load of money with an advisor in your ear giving you play by play confidence, you can be the same you that has to be to work by 8:30 am and still invest a little bit every payday, once a month or whenever you decide. There’s even a new broker that’ll round up every purchase every time you swipe your bank or credit card. Swipe- a little bit goes, Swipe- a little bit goes… without getting all fancy and sitting up all night trying to figure out how to and how much. Remember, you gotta be at work in the morning.

In previous years when the discount brokerages started flooding the internet, I had opened a couple of accounts, some did well and others did ok. What was very interesting for me was that although the discount brokerages were not full service, they offered tons of information for me to learn about investing, investment products and how to buy them. Without talking to anyone, which usually includes a pitch for a sale, I was able to get informed to my level of satisfaction. It dispelled all sorts of myths and misconceptions about investing and buying stocks or bonds in general, confirmed some popular wisdom and allowed me to explore different investment options with a bit more confidence. There’s been some consolidation in the industry over the years with the companies purchasing each other, (they’re just realizing the value of the customer base is all) but the good thing is the industry is also evolving and offering even more now. Better service, lower brokerage fees, broader range of options for more investors to get in.

ShareBuilder   Acorns logo

Here are 3 of some of the best discount self-service style brokerages that are great for entry level investors or anyone looking to invest using smaller amounts to get started and invest too.

  • www.Sharebuilder.com   Previously Netstockdirect, this company is now owned by Capital One, however, they still offer low cost trades, have tons of information about the how-to’s of investing for newbies and explain a lot of details. They typically pool your monies and make stock purchases down to fractional shares once monthly, there are NO Minimums and they also let you buy shares at any time just in case you want to invest that tax refund.
  • www.Betterment.com Offers automated monthly investments into ETF’s, (basically a mutual fund style basket of sectored stocks that are traded like individual stocks) ETF’s are super-hot right now because of how they can focus on a specific sector of the market like Real Estate REITs or Energy and trade like stocks, this company offer a great variety of ETF’s with target date plans and low fees for investing. They really make it very easy to get started and track your progress regardless of your goals. Betterment’s interface is friendly and they also offer a lot of investment information without making new investors feel too overwhelmed as if they’re getting into something too deep.
  • www.Acorns.com  This brokerage has a very creative approach, investors can set specific amounts, one time amounts, recurring amounts and most unique of all is that investors can register their bank or credit cards to round up to the nearest dollar following each purchase or transaction. All of the rounded up deposit are used to make mutual fund investments typically once monthly. There’s also smart phone registration and account access with competitive discount brokerage fees. It’s simply amazing how the change adds up in less than 1 month. In recent years one of the national banks offered something similar (maybe that’s where Acorns got the idea), but it wasn’t so great. Acorns’ deal is really cool by allowing a double down in one move by saving and investing, maybe that bank should give them a call and open an account too so they can see how it should really work.

A little researching will probably yield some more brokers offering similar accounts that allow for small or even no minimum amounts to invest monthly. You can compare them side by side to see which may work best for you or try using more than one depending on your investment approach as they offer different ways to invest. Either way, it seems great that regardless of your investment level or expertise, there’s room for anyone and everyone to get in and reach for their financial goals.

I have no specific ties to any of the brokers mentioned and receive no compensation for any recommendations, I have however used some of these discount brokers to invest, learn and get a better understanding of investing and investment options and feel they are great for getting started in investing in general for stocks, bonds and other financial instruments.

Happy Investing.

-Miles.

Valentine’s Day is About the Money

Valentine’s Day is About the Money

Valentine’s Day Spending

Love Motivates...
Love Motivates…

For 2015, Valentine’s Day falls on a Saturday, it can’t get any better than that for date night folks. Many a beau are scrambling around to get things in line for that special lady in their life. Flowers, candy, card, dinner, maybe a prepared meal in bed for the live in folks, a night out, or the hotel lobby… yes, the hotel lobby will be full all weekend. Hotels have a good strong weekend, as does restaurants, and all sorts of shops that sell candies and cards. A sort of a “black” weekend for retailers of all stripe, if they play their cards right, because people will go to any extent to show their love for one another at any cost. Then there are the expensive gifts such as jewelry, pocketbooks and bags, garments, shoes and even tickets to see favorite performers. These things to express as loud as possible feelings of “I Love You” and “You’re Important to Me”. I am no exception to this rule, and make it a priority to take the nationally recognized day as I do any other opportunity.  However, as of the most recent decade or so, I’ve kind of adjusted my focus more toward the object of my affection and more away from the profiting by retailers and restaurateur’s. No need in retailers getting a bonus because I’m in love, that just doesn’t make complete sense to me that every time I need to express my love, the see a profit. This can make things tricky, however, let the creative juices flow. You’re still going to need to buy gifts and such, just no need to get crazy with monies you don’t have or you may have but can be best employed differently. I don’t advocate being cheap at all, just mindful. For example, gold jewelry is and has been a bad purchase for the past several years since the recession. The price has gone up a few hundred times in the past 10 years! Paying outrageous prices for less than worthy gold jewelry isn’t a good move. As someone focused on value and prosperity you definitely should be looking elsewhere to get more value for your money. The other notoriously bad idea is dinner out, on Valentine’s Day restaurants are booked solid, many only offer a pre-fix abbreviated menu to select from and typically have slow, poor service with an up charge on top of all that. It can be roll of the dice, for most couples going out that night. Maybe a worthwhile roll I’ll admit, being together can sometimes overshadow some of the nonsense. Considering this blog if focused on prosperity and wealth, I think it only makes sense to keep that in mind and not lose sight of our individual goals just because it’s Valentine’s Day by going out and falling prey to all sorts of “give me your money to show you love” foolishness.

Being that it is Valentine’s Day and you do have someone special that you want to show you’re love for, here’s some really creative and interesting ideas on how to express just that.

  • Show your Love by making a statement and taking steps toward your financial future. Nothing says I love you more than actually taking concrete steps to build the foundation of your future with someone.
  • Open a joint savings bank account that the two of you can use to save money in for taking weekender trips or special nights out. Set up direct deposit for at least $25 – $100, or whatever you can afford per pay cycle to the account.
  • Open a joint brokerage account, select some stocks/ companies to invest in make bets with each other for the status of those stocks for the end of the year. Will your or hers be up or down? Maybe you like Nike who pays $1.11 in dividends quarterly and she likes “L Brands” which own Victoria’s Secret, they pay a dividend of $2.00 quarterly right now. Split the budget between the gift and joint asset purchase together or just go 100% for the joint asset purchase, have dinner in or out and continue living the next day like you have next days to be together. Check them and others out on http://finance.yahoo.com/
  • Choose a credit card or credit account or bill with high interest to make a payment on and schedule to pay it off completely.
  • If you must do dinner… It’s cool, just let it be a place that’s great so don’t settle. During dinner consider reviewing finances, things such as life insurance, credit status, beneficiaries, health checkups, children’s education savings and action plans for next day follow-up.

Buy U.S. Saving bonds in your names together. Go to www.treasurydirect.gov you can buy saving bonds together with both named listed or buy them under the children’s name if any.

I definitely am an advocate of the cards, flowers, candy and gifts- I like to just keep them in perspective. While some of you may be in relationships that aren’t that far along or you’re further along, any first steps or additional moves you make of togetherness is special for both people in the relationship. I know much of this is represents some very strong signals, but after all, when we spend a half of a paycheck or more that’s pretty strong signals too!

All of the overly priced gifts and meals won’t last very long, sure the memories will last a bit longer, however , recalling when you started to take a step toward building your future together will be unforgettable as it will continue on as your relationship lives on. Making moves to solidify your future together by building your finances together is a great way to say you’re the one for me. So when you say hey, let’s go to the bank and… or let’s go online and… or anything in that regard, it’s the “let’s” that is the important part.

Enjoy Your Love!