Tag: money tips

What are your plans for your retirement years? According to the 2022 Transamerica Retirement Survey, the top two retirement goals are “traveling” and “spending more time with family and friends.” But to reach those goals, you’ll need to know how to plan for saving money.

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Unfortunately, over half (55%) of Americans admit they’re behind in their retirement savings. According to a survey from Bankrate, more than a third (35%) claim to be “significantly behind.” If this sounds familiar, don’t panic.

The following tips can help you learn how to plan for saving money every month.

1. Figure Out How Much Money You Need to Live Each Month

Start by calculating your personal cost of living. To do so, you’ll need to add up your fixed, variable, and discretionary expenses.

Fixed Expenses

Fixed expenses are necessary costs that don’t change from month to month. Common examples of fixed expenses are:

• Rent or mortgage
• Car payments
• Phone/cable bills
• Insurance premiums
• Property taxes
• Student loans or other debt payments

Don’t factor in your savings just yet. Right now, you’re seeking to determine the amount of money you absolutely need each month, and that starts with these fixed costs.

Variable Expenses

Variable expenses are also necessary, but their amounts can vary from month to month. These include such expenses as:

• Groceries
• Utility bills
• Gas
• Clothing
• Credit card bills

Remember that these are running averages and can peak during certain times of the year. You might consider adding up your utility bills from the last year and then dividing the total by 12 to calculate your monthly average.

Discretionary Expenses

Finally, you’ll need to account for discretionary expenses. These are the purchases you choose to make, such as:

• Meals/coffee out
• Entertainment
• Streaming subscriptions
• Hobbies and sports
• Gym memberships

If you’re unsure where to start, look at your bank statements from the past three months (or more). This will give you an idea of where your money is going, and you can use the information as a foundation when learning how to plan for saving money.

2. Create a Budget that Allocates Money for Necessary Expenses, Savings, and Discretionary Spending

Once you determine the amount of money you need each month, you can create a budget that meets these needs while leaving room for savings.

Start by allocating money toward your fixed costs. Since these expenses remain constant, they make it easier to plan your overall budget. Next, divert money toward your variable and discretionary expenses.

Remember that you’re not trying to allocate your total monthly income but only enough to cover what you’ll need from each category. This will ensure you have enough left over to put toward your savings.

If you’ve adequately budgeted, you should have enough remaining money to build your savings. Start by ensuring that you have a short-term savings account. Having enough money on hand to cover three to six months of expenses can prevent you from tapping into your long-term savings if an emergency arises.

Once your short-term savings are built, you can start working on your long-term savings account. Don’t worry if you don’t have enough to put in savings at present. Even small amounts can accumulate over time. Remember that you may have more to set aside once you pay off your car loan, student debt, and other time-limited bills.

3. Make Adjustments as Needed to Ensure You’re on Track to Meet Your Goals

To learn how to plan for saving money, you’ll need to prepare yourself for something of a reality check. First, compare the budget you’ve created to how much you’ve actually been spending each month. It could be that your current spending habits are not in line with your financial goals.

If that’s the case, don’t panic. Now is the time to align your personal spending habits with your long-term goals. You probably won’t be able to eliminate needed expenses, but the following suggestions can help you trim your variable and discretionary expenses:

• Cut back on gourmet coffee or dining out
• Eliminate one or more streaming services
• Cancel unused subscription services
• Buy store-brand products
• Use coupons to purchase groceries
• Adjust your thermostat to lower utility bills

Admittedly, these changes can take some time to get used to. So make a game of it. Challenge yourself to eliminate one takeout meal or gourmet coffee next week. Then, the week after, challenge yourself to eliminate another discretionary purchase.

Before you know it, you’ll meet your desired budget, and you’ll have plenty of room to save for the future.

4. Automate Your Finances, So You’re Not Tempted to Spend More Than You Have Allocated

Knowing how to plan for saving money is the easy part. The hard part is sticking to your budget. But you can make it easier by automating your finances.

Many consumers already rely on automated bill payments to cover recurring expenses. But some banks let you take this a step further by automatically transferring money between your checking and savings accounts.

For example, you could set up an automated transfer that ensures you set aside money for monthly savings. This means you won’t be tempted to spend before you have a chance to save.

Just be careful with automated payments. It’s easy to lose track of which companies can access your payment details. It’s too easy to sign up for automated services only to have the company raise the price later. This can derail your budget and even cause an overdraft if you’re not careful.

Otherwise, keeping tabs on your automated payments can be a convenient way to stay on track and even build your credit by making consistent on-time bill payments.

5. Make a Plan to Pay Off Any High-Interest Debt

While most of the adjustments you make to your budget will focus on variable costs and discretionary purchases, you can also cut back on certain fixed expenses.

Many of these costs come from high-interest debt such as credit card bills, student loans, or car payments. You can free up some room in your budget by eliminating these expenses as soon as possible. Here are two common strategies for doing so.

The Snowball Method

Start by paying off your smallest debt first. Then, once you eliminate this debt, apply the amount you were paying to your next-highest debt. The goal is to allow your payments to “snowball” until you’ve eliminated all smaller debt and you can now afford to make more significant progress on your larger debt elimination.

The Avalanche Method

The avalanche method works in reverse. Start by paying off your largest bills (or loans with the highest interest rates), then work your way down to your smaller bills. This will help you cut out your largest bills as quickly as possible. Just be aware that since some debts can be pretty high (student loans, for example), eliminating these expenses may take a while.

Caution: Watch Out for Prepayment Fees

While eliminating credit card debt is a wise choice, not all of your debts can be paid off so easily. For example, some mortgages and car loans have prepayment penalties that will charge you money if you attempt to pay off your debt too early. So check to ensure that paying off your debts won’t result in added charges. Discipline your spending, buy only what you need, and avoid impulse buys.

Keep a tight rein on your wallet. It’s easy to get carried away and buy more than what you need. So instead, stick to the essentials, and avoid impulse purchases that can derail your budget.

Easier said than done? When learning how to plan to save money, you’ll need to develop some discipline in your purchases. Here are some workable strategies.

Stick to a Grocery List

Before you go grocery shopping, make a list of your essentials. This prevents you from making snap decisions or being influenced by store displays once you’re there. Eat before you go to the grocery store so that you aren’t hungry — hunger can overcome your good senses.

Give Yourself  Time to Think About It

Impulse decisions happen quickly. Discipline yourself to think about your spending before making the purchase. When shopping, put the item down and return to it before you leave. Or leave the item in your online shopping cart until you can determine how it fits your budget.

If, after this pause, you decide you genuinely need the item, then you can complete the transaction.

Pay for Discretionary Purchases in Cash

Pay for your significant bills using automated bill pay, but complete your discretionary purchases with cash. That way, you will always have a limited amount of money to draw from and can make buying decisions accordingly.

7. Celebrate Small Victories Along the Way as You Work Toward Your Financial Goals

Your retirement years are basically a lifetime away. That’s why it helps to set solid benchmarks to track your progress.

For example, you might make it a goal to set aside 15% of your monthly income toward your retirement goal. Or you could make it a goal to set aside a year’s salary for your retirement by your 30th birthday.

Setting a series of short-term goals can help you track your progress toward retirement and give you a sense of accomplishment along the way.

Knowing how to plan for saving money can also be your whole family’s responsibility. If the family shares progress updates, you can celebrate the accomplishments together. Depending on their ages, your children might not be enthused about your retirement progress, but sharing these victories can help them learn the importance of long-term planning.

8. Review Your Budget Regularly to Make Sure it Still Meets Your Needs

Your financial circumstances change all the time. Your budget should do the same. Make a plan to review your budget at least once per year. This can help you make adjustments as you pay off debts or have more revenue to draw from.

Reviewing your budget is especially important during periods of inflation. For example, higher prices at the grocery store and the gas pump may prompt you to adjust your variable expenses. In addition, you may need to reevaluate your regular expenses to ensure you’re still able to allocate money to your savings.

You may find more income as you advance in your career. Raises at work will allow you to devote even more to your retirement savings or give you a bit more breathing room when it comes to dining out or entertainment.

Changing Your Approach to Retirement

Now that you know how to plan for saving money each month, it’s time to put your knowledge into action. Due can help. At Due, we believe in helping our customers strategize and reach their retirement goals. We also offer an annuity that can provide a stable income during retirement.

So no matter where you are in your financial journey, Due can help you. To learn more, contact Due today.

 

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Your credit score impacts everything from getting a favorable interest rate on a credit card to buying a home, paying for insurance, and more.

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If your current credit score is less than ideal, here are ten hacks to increase your credit score fast.

1. Dispute Errors on Your Credit Report

Because of your credit report’s far-reaching impact and the countless ways it affects your everyday life, it must be accurate.

If there’s an error on your credit report, you’ll want to dispute it immediately to clear the issue up to avoid bad credit.

So how do you do this?

First, get a copy of your credit report, which can be found in the Annual Credit Report.

Everyone is entitled to a free copy of their credit report every 12 months.

If you find an error on your credit file, you’ll need to dispute it with the credit bureau that made a mistake.

After filing a dispute, the credit bureau has 30 days to investigate the issue. If the information is found to be inaccurate, your credit report should be updated within those 30 days.

This resource from the Federal Trade Commission will walk you through the process of disputing credit report errors step-by-step.

2. Pay Your Bills on Time

This may sound like a no-brainer, but it’s hard to stress the importance of being prompt with paying your bills enough.

To quantify, debt payment history accounts for 35% of your credit score, making it the most critical credit scoring factor overall.

And research has found that a single late payment can lower your credit score by as much as 180 points.

Not only will always paying your bills on time help quickly build credit, but it can also save you money, as you’re less likely to encounter late fees with your credit accounts.

If you struggle with this, we recommend signing up for automatic payments or setting up reminders through email or on your phone.

Once you get in the habit, it should serve as positive momentum for credit repair and can go a long way in improving your credit score.

3. Reduce Your Credit Utilization Ratio

Your credit utilization ratio, simply put, is the percentage of your available credit that you’re currently using.

If, for example, you have $10,000 of available credit and you have $2,000 of debt on your credit card bill, your credit utilization ratio would be 20%.

This accounts for about 30% of your credit score, making it the second most significant factor after payment history.

And that’s precisely why you should strive to reduce your credit utilization ratio.

According to Experian, “your credit utilization ratio should be 30% or less, and the lower you can get it, the better it is for your credit score.”

If you’re currently sitting at 31% or higher, you’ll want to make every effort to get that number down to a max of 30%.

Once you do so, be sure to keep credit utilization in mind when deciding what percentage of your available credit to use in the future.

4. Request Credit Limit Increases

This ties into our previous credit score hack.

A simple way to reduce your credit utilization ratio is to get a credit limit increase.

Say, for example, you had $2,000 of debt with $5,000 in available credit.

You would have a credit utilization ratio of 40%, which is higher than it should be.

But let’s say you requested a credit limit increase of $3,000 for a new total of $8,000.

In that case, having $2,000 of debt would only mean a credit utilization ratio of 25%.

Just like that, you would use a smaller percentage of available credit, which should help improve your credit score.

Just be sure not to go overboard and request credit limit increases on several accounts simultaneously because it can signal to lenders that you may be a borrowing risk.

5. Avoid Opening New Lines of Credit

The length of your credit history accounts for 15% of your credit score.

The longer your credit history, the better your credit score should generally be, and vice versa.

Following this logic, you should avoid opening new credit lines because, by default, it reduces the length of your credit history.

As a result, it’s likely to affect your credit score adversely.

This isn’t to say you should never do so, as it’s often unavoidable, and opening a new credit line is necessary for establishing yourself long-term.

But you should always be cognizant of it, and especially avoid opening multiple new lines of credit at once.

6. Pay Off Your Balance

Let’s go back to the credit utilization rate, where the less percentage of available credit you use, the better.

If keeping your credit utilization ratio no higher than 30% is good, paying off your credit card debt is even better.

And it’s a win-win because not only does paying off your debt help build credit, but it also prevents you from paying interest.

With the average person paying $855 in interest each year, this can help put you in better financial health.

So having a zero credit card balance goal is a massive two-pronged attack for improving your credit rating and keeping you out of unnecessary debt.

Plus, it makes you far more attractive to a credit card company.

7. Become an Authorized User on a Credit Card

Becoming an authorized user on another person’s credit card (the primary cardholder) means you can make purchases with the card as if it was your own.

Also, it means you’re responsible for repaying any debt that accumulates with the credit card.

This is another relatively simple but effective way to lift your credit score, especially if it’s on a card with a high credit limit, low credit utilization ratio, and good payment history.

Some experts even say this can help you achieve a credit score of 700 or higher after a few years.

And this is a popular way to help teenagers start to build credit.

As long as you and the primary cardholder pay off your debt quickly, this can help boost both of your credit scores at once.

In terms of who’s eligible to become an authorized user, it can be anyone who meets the age requirements of the credit card issuer, with examples being a spouse, partner, child, or close friend.

Ideally, the primary cardholder will have a good credit history, plenty of mutual trust, and someone who wants to improve both of your credit scores actively.

8. Have a Variety of Credit Accounts

Your credit mix contributes to 10% of your credit score, which means it’s helpful to use a variety of credit accounts.

Note that there are three main types of credit accounts.

• Revolving credit – Accounts where you can repeatedly borrow and repay up to a specific limit (unsecured credit card, secured credit card, and credit lines)
• Installment credit – Accounts where you borrow money in one lump sum and repay it, typically with interest, in installments (mortgage loan, auto loan, student loan, or any type of installment loan)
• Open credit – Accounts where the debt balance has to be paid in full each month

If, up until now, you’ve only used a few types of credit accounts or less, adding diversity should contribute to achieving good credit and make you more attractive to lenders.

Note that you can also turn everyday expenses like paying rent into credit accounts of sorts.

Rent reporting services like BoomPay and PaymentReport will report you making your payments on time, which can further assist in credit repair.

9. Get a Credit Builder Loan

To put your foot on the gas pedal, you can get a credit builder loan that strategically aims to increase your credit score.

Unlike a traditional loan, where you get the money upfront and gradually pay it back over time, a credit builder loan is different.

With it, a lender holds the amount borrowed in an account, and you make fixed payments.

As you make payments, you gain more access to the funds — all the while, everything is made known to a credit reporting agency.

This makes it a great way to show you’re capable of making payments on time, which can catapult your credit score quickly, even without a credit card.

10. Avoid Closing Old Credit Cards

Let’s say you just got a new credit card, and you’re no longer using an old one.

You should close it out, right? Actually, no.

There are two main reasons why having multiple credit card options is wise.

Keeping old credit cards means having more available credit and extended credit history.

A lower credit utilization ratio often comes with a higher amount of available credit.

And with a longer credit history, you’re more established — something lenders prefer over borrowers with little to no credit.

While there might be exceptions, such as paying high annual fees, you’ll generally want to keep it around, as it should help you achieve better credit.

As you increase the length of your credit history and use a lower percentage of available credit, you can transform a low credit score into a fair, good, or even excellent one.

Wrapping Up

Many people’s credit scores aren’t nearly as high as they’d like them to be.

Fortunately, there are several ways to raise yours and achieve a good credit score quickly.

From disputing errors on your credit report to paying your bills on time to having a healthy credit mix, these are all integral to credit repair and should put you on your way to good credit.

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Preparing for retirement may take more time, money, and effort than you think. It is especially harder to transition this year as inflationary pressures intensify. Although it may benefit savers and lenders, its impact is less desirable than we think. It erodes the value of dollars and, in turn, hurts the purchasing power of consumers. Not even the financial market can’t dodge or at least cushion the blow. 

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Older Americans are more vulnerable to risks associated with economic volatility. Over the past decade, they have composed the majority of bankruptcy filings in the US. The figures may increase further as uncertainties persist. Hence, it is no surprise that many would-be retirees have decided to continue working. This year, 25% would postpone their retirement, a massive drop from the previous year. 

Fortunately, their awareness of investments has improved in the last two years. The capital market sees more inflows despite the bearish trend. Dividend-paying stocks, ETFs, and mutual funds have become a favorite for many, as they offer a sense of security, especially for newcomers, knowing they will receive constant returns. With that, we will discuss everything about dividends and how they can support your retirement. 

What is a dividend?

Before investing in the equity market, you must first determine your goals. Investments can become an excellent passive income if you know what you want. However, you must remember that not all investments pay dividends. 

You can become a short-term trader, which appears risky but can generate instant returns. Buying a stock or an ETF at a low price and selling when it goes up can be promising. Also, dividends may not be your priority, and it’s fine. But, it can also be challenging, especially when the price moves sideways or downwards.

You have to identify the patterns and volumes. Doing so will help you find a good entry point before taking a buy or sell position. Other short-term investments do not require trading skills like technical analysis. These include treasury bonds, money-market accounts, and certificates of deposits. 

For many retirees, dividend-paying stocks and ETFs provide income without a job. Often, they are for those who do not have time to monitor the market every second. They are suitable long-term investments since payouts are constant.

In essence, dividends are a portion of company earnings distributed to eligible shareholders. They can be paid out every quarter, half-year, and year. Note that both public and private companies can distribute dividends, but not all companies do since dividends are not part of their legal requirements. The following are the typical types of dividends.  

Cash Dividend 

Cash dividends are the most common type of dividends. Ordinary dividends have periodic payments, while special dividends are non-recurring payouts. Often, companies distribute them during periods of boom or when they have excess income. 

It is also essential to know the type of shares before investing. Preferred dividends are deducted from the net income for preferred shares. Because they have a higher priority, they are paid before common shareholders.

Meanwhile, common shares receive common dividends. They are the last in the hierarchy when it comes to company payments. Shareholders and traders in the equity market are also common shareholders. They learn about dividend payments through company press releases. 

Stock Dividend

Cash dividends can have an impact on a company’s liquidity. Sometimes their cash flows are insufficient to cover dividends after capital expenditures (CapEx) and borrowings. Dividends can be paid in the form of stocks rather than cash. They appear similar to an automatic dividend reinvestment plan (DRIP).

Stock dividends, like cash dividends, can be ordinary or special. However, they provide instant gains since you can sell these extra stocks at their trading price. 

A stock dividend differs from a stock split because stock dividends increase shareholder value, while stock splits happen when companies increase or decrease the number of stocks. These regulate stock liquidity. However, they have no effect on shareholder value because the income per share remains constant

Scrip Dividend 

Scrip dividends are issued in the form of promissory notes. It happens when the company does not have enough cash to pay cash dividends. 

Property Dividend 

Another non-monetary dividend payment is a property dividend. The recording of the distributed property is based on its market value. 

Liquidating Dividend 

The company may distribute liquidating dividends to return the capital of shareholders. It often precedes company dissolution or shutdown. 

How To Live Off Dividends

Despite improved financial literacy, 30% of Americans retire without savings. This group believes that the meager retirement funds and social security benefits can suffice their needs. Sadly, many retirees are yet to secure a constant fund source for their retirement. That is why soon-to-be retirees must catch up with their retirement savings. 

It is advisable to invest if you want to expand your money or have a passive income. The best option for a reliable income source is dividend-paying stocks. However, they must prepare to live off of dividends. Any investment is good, but remember that you have to stay liquid. 

Determine your retirement living expenses 

One of the biggest mistakes you may commit is downgrading expenses in your retirement years. It is not enough that your funds can suffice your basic needs. Retirement can last longer than you think. And as you grow older, you may incur more expenses, such as long-term care and hospitalization. Statistics show that retirees are more than twice as likely to require hospitalization than younger adults. You may also run into debts, as statistics show that 75% of retirees carry debt through their retirement.

You must determine your retirement expenses, including long-term healthcare. Note that Medicare will not last you a lifetime. Your social security benefits may not be enough for your cost of living. You also have to anticipate taxes on your retirement funds. Once you get the figures, you can estimate the dividend income you need on top of your savings and pension funds. 

Abide by the 4 Percent Rule

The four-percent rule is a more practical rule of thumb for estimating your retirement living expenses. Retirees may rely on it to decide on the amount to withdraw from their retirement savings every year. This rule helps avoid overspending by keeping a constant retirement income stream. This rule is based on the historical stock and bond returns from 1926 to 1976. Typically, withdrawals consist of dividends on savings and compounding interests on bonds. That way, you can keep adequate funds in the following years. 

But of course, it may vary with different scenarios. You may adjust it to 5% in worst-case scenarios. Others suggest lowering it to 3% since it fits the current trends in interest rates. You must consider life expectancy and emergency expenses for a more precise estimation. 

Nevertheless, it is still better to have passive income streams than withdraw investments for your retirement expenses. It makes it possible to live off dividends for a long time. You will have an opportunity to maximize the potential value of your investments. Also, you can maintain your assets by keeping expenses lower than what you generate in dividends. 

Invest in Stocks That Focus on Dividends

Investment portfolio diversification is an excellent choice to boost your retirement funds. When investing in stocks, you may choose between actual trading for instant capital gains. For long-term investments, you may opt for stocks that pay dividends. Dividend investing promises returns even without watching the stock price every minute. 

For better security, you wish to buy blue-chip stocks. They have already stood the test of time and can operate amidst economic volatility. For higher dividends, you may choose the Dividend Aristocrats instead. Either way, you must check the fundamental health of the company.

Check its cash levels in the Balance Sheet. You may also look into the Free Cash Flow to determine if it can sustain its operations and pay dividends. You can also combine it with Net Debt/EBITDA to know if the company earns enough to cover financial leverage. These accounts and financial ratios are more important measures for capital-intensive companies.  

Suppose the company has solid fundamentals, allowing it to cover dividends, you still have to find out how long and how much it can sustain dividends. Using the Dividend Payout Ratio, you can check the allocation of net income to dividends.

You can choose to use Free Cash Flow in place of net income, as some people find it more realistic since it accounts for cash transactions. Deducting the CapEx tells you how much cash is left. Once you are sure the company is capable, you must check how enticing the dividends are.  

Dividend Growth 

Let’s face it; stock dividends usually increase over time, unlike bond interest. The stock market may be riskier, but growth prospects are promising. Dividend growth should be one of the considerations for an excellent long-term investment. In the last two years, many companies halted dividend growth, while some did not pay dividends at all. That is why it is essential to note those who withstand the blow of pandemic disruptions. Now that the global economy faces inflationary pressures, pessimism is taking over again. 

Dividend investors must keep an eye on companies with increasing dividends despite market volatility. Dividend Aristocrats are excellent choices. These are a lot of S&P 500 companies that have increased dividends for 25 consecutive years. But, companies other than the S&P 500 may pay the same or better dividends. 

Indeed, there are a lot of companies you can add to your portfolio. You may check the five-year, ten-year, or twenty-five-year average dividend growth. Doing so will help you check how much their dividends have grown.

Dividend Yield 

You already have a long list of excellent dividend stocks. So, it’s time to trim down your choices. Before buying stocks, you must determine if the dividend is worth the price. The dividend yield shows how much the company pays relative to the stock price. 

There is no definite percentage of excellent dividend yield, but analysts recommend a yield of at least 2%. It is advisable to check if the company is part of the S&P 500, 400, or 600. You can also check whether it is on the NYSE and NASDAQ. Once you derive the dividend yield, you can compare it to the average of these stock indices. 

Moreover, the dividend yield helps find a reasonable stock price relative to the dividends. The Dividend Discount Model is one of the many stock valuation techniques. It uses the average dividend growth, dividend yield, estimated annual dividend, and cost of capital equity. 

What types of investments pay dividends?

Economic volatility and financial capacity influence the risk tolerance of investors. It is not too late to start investing and growing your retirement account. Yet, you must study and observe before putting your eggs into different baskets. Doing so promises more security and potential returns. These are the best dividend investment choices. 

Stocks

The stock market is the most popular and preferred choice of dividend investors. Typically, these are publicly-traded companies with a history of dividend payments and growth. Investing has also become more convenient with the advent of electronic trading.

Many S&P 500 companies are considered Dividend Aristocrats. This distinction refers to companies raising dividends for at least 25 years.  

Companies other than the S&P 500 have maintained dividend growth for more than 25 years. They are referred to as the Dividend Champions. As of 3Q 2022, there are 147 dividend champions on the NYSE and NASDAQ. Meanwhile, companies that raised dividends for 10-24 consecutive years are called Dividend Contenders. The Dividend Challengers are companies that increased dividends for 5-9 years. 

Mutual Funds

Mutual funds are also a favorite among many investors. Mutual funds may also offer dividend payouts. These mutual funds are those used to buy dividend-paying stocks. In turn, dividends are passed on to the investors after deducting the management fees. They appear to be an indirect stock investment and dividend reinvestment.

ETFs – Exchange-Traded Funds 

Like mutual funds, ETFs operate as a pool of investment security. Their difference is that ETFs can be traded on the stock market like individual stocks. Dividends are also distributed to investors. 

Real Estate Investment Trusts 

REITs are companies owning and financing real estate companies that generate income. They are also similar to mutual funds since they act as a pool of capital. In other words, the amount is invested directly in real estate companies. Hence, you can earn dividends without buying, operating, or financing properties. The downside, however, is that REITs offer little capital appreciation. 

Consult a Financial Advisor for Your Retirement Plan

Living off dividends amidst volatility is challenging but achievable. With preparation, knowledge, and wise portfolio diversification, returns may offset risks. It is important to be familiar with dividend-paying stocks and other investments. That way, you can assess the level of risk you can tolerate and the returns you can generate.

The post All You Need to Know About Living Off Dividends appeared first on Due.

A 2022 study found that by September of that year, 63% of Americans lived paycheck to paycheck. Many of these people don’t think about how their spending habits will impact their future financial state. It’s easy to get so caught up in your daily wants and needs that you lose sight of your future financial goals. Although people don’t think of accumulating savings as exciting in the short term, it’s extremely important later on down the road. 

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In the more immediate term, savings provide a cushion in the event that you experience a financial emergency. Without comfortable savings, a trip to the hospital, a layoff or even car troubles could derail your financial stability and plunge you into debt. 

In the long run, healthy savings will give you the freedom to live your life without fear and will open the doors to greater financial opportunity. The best time to start saving is now, because the sooner you start saving, the higher the payout will be in the future. Here are ten steps you can start taking to improve your future financial state.

1. Acknowledge your motivations and set goals 

Before you set out on your mission to improve your future finances, take some time to think through exactly what you would like to accomplish and what is motivating you to make a change in your life. 

Think about where you’d like to be financially one year, five years and ten years from now. Writing down these aspirations on a piece of paper, on your phone or on your computer will help cement these goals in reality. 

You should also visualize how your life would improve if you had more savings, financial security and independence. Maybe you hope to own a home, pay off all of your loans or be able to provide for your children. Write down a list of the things that are motivating you to improve your future financial state, and keep them as a reminder for when times are tough or you’ve slipped up. 

2. Assess your current financial state 

Next, start thinking more concretely about the actions you need to take in order to reach these goals. One of the first steps in planning for your future is to understand your current financial situation and spending habits. 

Comb through your credit card and account statements and examine where all of your hard earned cash is going each month. You might surprise yourself by how much you spend on coffee or Ubers each month. You’ll start to recognize the spending patterns eating away at your paycheck and preventing you from accumulating long term savings. 

You should also account for all of the regular, unavoidable payments that you need to make on a regular basis. Calculate how much you owe for loan payments, rent, mortgages and insurance and see how much of your income needs to go towards these necessities. 

Once you understand where all of your money is going, you can take a critical look at the spending habits that you need to change. You will also be better prepared to make a realistic monthly budget that you can actually stick to. 

3. Identify where you can cut back 

Once you understand your financial past, you can more easily recognize the areas where you can cut back. Maybe you can reduce the number of times you eat out each month. Or, you can make a more concerted effort to take public transportation instead of taking Ubers or Lyfts. Perhaps there are some monthly subscription services you could stand to live without. Only you understand the difference between what you want and what you need to stay healthy and happy. So, engage in some personal dialogue about what things you need and what you can live without. 

Take 24 hours before making a major purchase like a new computer or a pair of shoes. This time gives you the space to decide whether that item or service you are considering buying is something you will actually need or will help you in the long run. 

Each person has different spending habits, so the ways in which you cut back will look different for everyone. Do your best to live below your means while still prioritizing the things that bring you genuine joy.  

4. Create a budget and stick with it

Budgeting is one of the most important ways to meaningfully boost your savings. A budget makes it possible to set goals and track your spending and is one of the best ways to actually set aside savings on a regular basis. 

There are several schools of thought when it comes to your budget. Some say you should adhere to the 50/30/20 rule, where 50 percent of your income goes towards your needs, 30 percent goes towards your wants and 20 percent is set aside for savings. Another popular budgeting rule is the 70/20/10 rule. Here, 70 percent of your income goes to bills and everyday spending, 20 percent goes for savings and 10 percent applies to debt repayment.

These are all just suggested frameworks, and ultimately you should personalize a plan that makes the most sense for you.

If the thought of making your own budgeting spreadsheet sounds like a drag, there are plenty of free apps to help you customize your budget. Many let you link your accounts, get notifications about your spending and set goals for each of your individualized spending categories. 

5. Make a separate account for your long-term savings

You will be less tempted to dip into your savings if you are keeping your savings and your disposable income in separate accounts. Taking the action of transferring money into your savings account each month can serve as a monthly reminder of what you are trying to accomplish and helps you compartmentalize the different ways you’re allocating your income. 

You may want to set aside your savings money as soon as you get your paycheck so that it is immediately taken out of the equation. This forces you to budget for the upcoming month based on the money left over in your checking account. 

6. Set up a savings account specifically for emergencies

By the same logic, it’s a good idea to create an account specifically designed as a safety net in case of emergencies. Peace of mind is one of the main reasons you may be motivated to start saving, and for good reason. Knowing that you can support yourself in the event that you lose your job or encounter an unexpected financial burden can improve your mental health and let you be more present in your daily life. 

Keeping an emergency savings account separate from your checking account decreases the chances that you’ll dip into it when your disposable income starts to dwindle, and helps you compartmentalize the purpose of your goal of boosting your savings in case of emergency. 

7. Invest in yourself by taking courses and learning new skills

Even when you are working on cutting back, be sure to differentiate between what is a frivolous desire and what is a worthwhile self-investment. Investing in yourself can be one of the best ways to improve your future financial outlook so be sure to keep that in mind when making important financial decisions.

Operating on a budget should not stop you from expanding your skillset or improving your qualifications. Whether you are considering investing in your education, starting a business or even kickstarting a side hustle, an investment in yourself can improve your financial state and pay dividends in the future. 

8. Start saving for retirement as early as possible

Most experts agree that you should aim to put 10-15 percent of your annual pretax income towards your retirement savings. If you follow these guidelines, you should be able to live a comfortable life after you’ve retired and might even be able to retire early. If you do not start taking your retirement savings seriously, you could end up working later in life, and spend your time working when you should be relaxing and enjoying your golden years. The earlier you start investing in your retirement savings the more your investment will grow by the time you are ready to retire, so getting started soon is the smartest way to save for retirement. 

When saving for retirement, there are many investment accounts that have amazing tax saving benefits, like 401ks, IRAs and Roth IRAs. Each account has different nuanced requirements and regulations so look into which option is best for you. 

However, remember that once you put your money into these types of accounts, there are restrictions on how and when you can access the money in your account.  Even still, most experts recommend you open up a 401k, IRA or Roth IRAs when saving for retirement so you can get the most out of your hard earned savings. The earlier you start investing your savings the more it will grow over time, so be sure to carve out room in your budget for regular contributions to your retirement savings account. 

9. Get out of debt 

Interest payments on loans and debts are a painful way to part with your hard earned funds. Unfortunately the only way to end this troublesome cycle is to climb your way out of debt, one payment at a time. The sooner you pay your debts the quicker you can start allocating that portion of your budget for future savings. Therefore, you should make it a priority to pay off your loans and debts as soon as you can. 

Similarly, don’t waste your money paying late fees, overdraft fees or any other pointless fees that don’t serve your needs or future goals. Stay financially responsible with your accounts, cards and loan payments. It’ll help ensure you avoid making careless mistakes that unnecessarily drain your funds, keeping your cash available for future savings. 

10. Track your progress over time

Staying motivated is easier when you keep track of the progress you have already made. Once your savings start to grow and you begin seeing the results of your hard work, you will feel proud of what you have already accomplished, and will be more likely to keep up your healthy spending habits over the course of your life. 

Diligently saving money is the only way to guarantee you will improve your future financial state. It’s also a surefire way to gain financial independence and freedom. Of course getting started is the most challenging step. However, if you take it day by day, you’ll start reaping the benefits of your financial discipline. Then you’ll see tangible results in the form of dollar signs in your savings account.

The post 10 Ways to Improve Your Future Financial State appeared first on Due.

Cryptocurrencies are all the rage right now, and for good reason! The potential for growth is huge, and there are many different options to choose from.

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So, which one should you invest in? In this blog post, we will give you a buyer’s guide to the best cryptocurrencies to buy right now. We’ll also provide some helpful tips on how to make the most of your investment. Let’s get started!

What are cryptocurrencies?

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Cryptocurrencies are decentralized, which means they are not subject to government or financial institution control.

Bitcoin, the first and most well-known cryptocurrency, was created in 2009.

Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services. Their popularity has grown in recent years as investors have been attracted to their high potential returns. However, cryptocurrencies are also notoriously volatile, and their value can fluctuate sharply. As a result, investing in cryptocurrencies is considered to be a high-risk venture.

The 5 best crypto to buy now

With the crypto market being so volatile, it can be hard to know which coins are worth investing in.

It seems like every day there’s a new coin that is “the next big thing.” How do you know which ones to trust?

We’ve done the research for you. These are the best cryptos to buy right now based on our analysis of price, market cap, and future potential.

Bitcoin (BTC)

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.

Bitcoin can be used to pay for things electronically if both parties are willing. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network.

Ethereum (ETH)

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference. It is a censorship-resistant platform where users are in full control.

No middleman can halt transactions or block users. Instead, users interact directly with each other, peer-to-peer. This all happens on the Ethereum blockchain, which is a public ledger that records every transaction made on the network.

The ether that powers the Ethereum network is used to pay for transaction fees and computational services. Ether can be bought and sold on exchanges or used to purchase goods and services.

It is an open-source platform that anyone can use to create decentralized applications.

XRP (XRP)

XRP is a digital asset that is used to power the Ripple network, a real-time gross settlement system (RTGS) that facilitates international payments. Unlike other digital assets, XRP is not mined but is instead issued by Ripple Labs, the company behind the Ripple network.

XRP can be used to purchase goods and services or to send money overseas. The Ripple network also allows for the exchange of other currencies, including fiat currencies, making it a versatile platform for international payments.

While XRP is not as widely accepted as other digital assets, it has been gaining traction in recent years and is seen as a promising solution for cross-border payments.

Cardano (ADA)

Cardano is a decentralized public blockchain and cryptocurrency project. Cardano is founded on the idea that blockchains can be more than just digital ledgers – they can be used to build commercial-grade applications.

Cardano is being built from the ground up to support this vision and is one of the few blockchains with a research-first approach.

The Cardano project is being developed by a team of experienced engineers and academics, backed by some of the world’s leading investors.

ADA is the native cryptocurrency of Cardano and can be used to send and receive payments on the Cardano network. ADA can also be used to stake Cardano, which helps to secure the network and earn rewards.

Solana (SOL)

Solana is a cryptocurrency that offers fast, secure, and scalable transactions. Using a proof of stake consensus, Solana can process over 65,000 transactions per second. That’s among the fastest existing blockchains!

In addition to being incredibly fast, Solana is also highly secure. The project uses a unique “Proof of History” algorithm to achieve consensus, which is resistant to both quantum attacks and 51% attacks.

Finally, Solana is built to be scalable. The team has created a novel “gossip protocol” that allows the network to process more transactions as it grows. With its combination of speed, security, and scalability, Solana could become the backbone of the new internet economy.

Why is crypto so popular right now?

Cryptocurrency has been gaining in popularity over the past few years, and there are a number of reasons why. One reason is that crypto is seen as a more secure way to store and transfer value, as it is not subject to the same rules and regulations as traditional fiat currencies.

Crypto is also borderless and can be used anywhere in the world, which makes it attractive to investors and businesses. In addition, cryptocurrency is becoming more mainstream as more businesses start to accept it as payment. As a result, crypto is likely to continue to grow in popularity in the years to come.

The benefits of investing in crypto

When it comes to investing, there are a lot of options out there. But in recent years, more and more people have been turning to crypto as a way to grow their money. And it’s no wonder why – crypto offers a lot of benefits that other investments just can’t match.

For one thing, crypto is incredibly volatile, which means that there’s always the potential for big gains because it’s still a relatively new asset class. But at the same time, you need to be aware that you could lose money just like investing in stocks.

And then there’s the fact that crypto is borderless and open 24/7, which makes it accessible to anyone with an internet connection. So if you’re looking for an investment that has the potential to generate great returns, cryptocurrency might be worth considering.

What is blockchain technology?

Blockchain technology is often associated with cryptocurrencies like Bitcoin, but it has applications far beyond that. At its simplest, blockchain is a digital ledger that can be used to record transactions.

Unlike a traditional ledger, which is stored in a central location, blockchain is distributed across a network of computers. This makes it much more difficult to tamper with or hack the data.

In addition, each transaction is verified by the network before it is added to the blockchain, making it nearly impossible to commit fraud. As a result, blockchain has the potential to revolutionize the way we store and manage data. While it is still in its early stages, blockchain holds tremendous promise for the future.

The different ways to invest in cryptocurrencies

Investing in cryptocurrencies can be confusing because there are so many different options.

It can be hard to know where to start when it comes to investing in cryptocurrencies. With so many different options available, it’s easy to feel overwhelmed and unsure of which route is best for you.

We’re here to help! Our guide will walk you through the basics of investing in cryptocurrencies, and show you how easy it can be to get started.

Centralized exchange

A centralized exchange is a type of cryptocurrency exchange that allows users to buy and sell digital assets. These crypto exchanges are typically regulated by financial authorities and require users to complete KYC (know your customer) procedures before they can begin trading.

Centralized exchanges typically offer a wider range of features and services than their decentralized counterparts, but they also come with some risks. For example, because these exchanges hold user funds in central wallets, they are susceptible to hacking attacks.

In addition, centralized exchanges may be subject to sudden shutdowns or other changes in policy that can result in user losses. As a result, it’s important to do your research before choosing a centralized exchange. While these exchanges can offer a convenient way to buy and sell digital assets, it’s important to be aware of the risks involved.

All-in-one exchanges

These are brokerages that allow you to buy crypto, along with other things like stocks and bonds. This type of brokerage is a great option for those who want to diversify their portfolio. And it’s not just for experienced investors; even if you’re a beginner, these brokerages can help you get started.

So if you’re looking to get into the world of cryptocurrency, you may want to give one of these brokerages a try.

Decentralized exchanges

A decentralized exchange is an exchange where users trade directly with each other, without the need for a centralized third party.

Decentralized exchanges are often created on blockchain platforms such as Ethereum or Bitcoin, and use smart contracts to facilitate trades. This means that they are often much faster and more efficient than traditional centralized exchanges.

In addition, decentralized exchanges are much less susceptible to hacks and fraud, since there is no central point of control. However, one downside of decentralized exchanges is that they often have lower liquidity than centralized exchanges.

This means that it can be more difficult to find buyers or sellers for certain assets. Nevertheless, decentralized exchanges offer a number of advantages that make them an appealing option for many traders.

How to invest in crypto through your retirement account

There are a few different ways to do this. One option is to set up a self-directed solo 401(k) and then invest in crypto through that account. Another option is to roll over your existing retirement account into a self-directed IRA. This will give you a lot more flexibility in terms of investment choices, including the ability to invest in crypto.

Finally, you can also set up a new retirement account with a brokerage that offers crypto investing options. Whichever route you choose, make sure to do your research and only invest what you feel comfortable losing.

Costs and fees associated with crypto

When it comes to investing in cryptocurrency, there are a few costs and fees that you need to be aware of.

• You’ll need to purchase some cryptocurrency, which can be done through an exchange.
• You will also need to pay a small trading fee if you’re looking to buy or sell cryptocurrency on an exchange.
• If you’re looking to store your cryptocurrency long-term, you’ll need to find a secure wallet. Some wallets charge a small fee for each transaction, while others charge a monthly or annual fee.

When it comes to cryptocurrency, it’s important to do your research and understand the fees associated with each type of transaction. By understanding the fees, you can make sure that you’re getting the most out of your investment.

Do you need to pay taxes on crypto?

As the popularity of cryptocurrency increases, so too does the number of people wondering if they need to pay taxes on their digital assets. The answer, unfortunately, is yes.

Cryptocurrency is treated as property by the IRS, which means that any gains or losses must be reported on your taxes. However, the way in which crypto is taxed depends on how you acquired it. For example, if you purchased crypto with fiat currency, then you would need to pay capital gains tax on any profits when you sell.

On the other hand, if you received crypto as a payment for goods or services, then it would be taxed as income. As always, it’s best to speak with a tax professional to ensure that you’re staying compliant.

Storing Crypto

When you store cryptocurrency, you are essentially putting your coins or tokens into a digital wallet. There are different types of wallets that offer different levels of security, but all of them essentially work in the same way.

You can think of it like a bank account: you control the funds in the account and can make transactions as you see fit. The main difference is that cryptocurrency is not regulated by any central authority like a government or bank.

This decentralization is one of the key features of crypto that makes it so attractive to investors. When you store your crypto in a wallet, you are essentially entrusting it to the security of the blockchain that it is built on.

The good news is that blockchain technology is incredibly secure, and the chances of a hacker getting in are close to zero. So, if you’re looking to store your crypto safely, a digital wallet is probably your best bet.

The different ways to earn money from your crypto

Earning money from your crypto can be confusing and overwhelming.

With so many different ways to earn money from your crypto, it can be hard to know where to start. You might not even know what some of these terms mean!

We’re here to help. In this guide, we’ll break down all the different ways you can make money from your crypto. We’ll explain what each method is, how it works, and who should use it.

Holding a crypto

If you’re looking to make some extra money, you may want to consider investing in cryptocurrency. Some of the more popular ones include Bitcoin, Ethereum, Litecoin, and Ripple.

Unlike traditional fiat currencies, which are issued by central banks, cryptocurrencies are decentralized and not subject to government interference or manipulation. So, how can holding a cryptocurrency make you money?

If the value of the currency goes up, you can sell it for a profit. Some employers are now starting to offer to pay salaries in cryptocurrency, so holding a currency could give you an advantage (or disadvantage) when it comes to getting paid.

In short, there are several ways that holding a cryptocurrency can make you money. So if you’re looking to invest in something new, cryptocurrency may be worth considering.

Proof-of-stake (PoS) staking vs Proof-of-work (PoW)

In the world of cryptocurrency, there are two main types of transaction validation: proof-of-work (PoW) and proof-of-stake (PoS). Both systems have their own advantages and disadvantages, but PoS has gained popularity in recent years due to its energy efficiency.

With PoW, transaction validators (known as miners) use their computing power to solve complex math problems. The first miner to solve the problem gets to add the next block of transactions to the blockchain and receives a reward in the form of cryptocurrency.

PoW is a very secure system, but it has one big downside: it requires a lot of energy.

In contrast, with PoS, transaction validators (known as stakers) lock up their cryptocurrency as collateral. They then use their computing power to validate transactions and add new blocks to the blockchain. If they act honestly, they receive a reward for their work.

If they act dishonestly, they lose their collateral. PoS is much more energy efficient than PoW, but it does have one downside: it relies on stakers having a “skin in the game.” In other words, stakers need to have something at risk in order to have an incentive to act honestly. However, many people believe that this is a fair tradeoff for the increased efficiency of the system.

Interest-bearing accounts

Interest-bearing accounts in crypto are similar to savings accounts in traditional banking. They allow you to earn interest on your cryptocurrencies by staking them in the account.

The interest rate is usually variable, and you can withdraw your funds at any time. In order to open an interest-bearing account, you will need to have a certain amount of cryptocurrency.

The exact amount will vary depending on the platform. You will also need to choose a duration for your deposit. This can be anywhere from 1 month to 1 year. Once you have deposited your cryptocurrencies, they will begin to earn interest.

The interest payments will be sent to your account on a regular basis, and you can withdraw them at any time. Interest-bearing accounts are a great way to grow your cryptocurrency portfolio without having to do any extra work.

Dividend-earning tokens

Dividend-earning tokens are a type of cryptocurrency that allows holders to earn dividends based on the profits of the company.

For example, a company that issues a dividend-earning token may give holders 1% of the company’s profits each year.

These tokens can be traded on exchanges and often offer a higher rate of return than traditional investments. Dividend-earning tokens are an innovative way to invest in the future of a company and can offer investors a great way to make money.

Lending

If you’re looking for a way to make some extra money, you may want to consider crypto lending. With crypto lending, you can earn interest on your digital assets like Bitcoin and Ethereum.

Here’s how it works: you simply loan your crypto to a borrower and earn interest on the loan. The interest rate is set by the marketplace, so you can earn a decent return on your investment.

Plus, since the loans are collateralized, there is little risk involved. So if you’re looking for a way to generate some passive income, crypto lending might be right for you.

Yield farming

Yield farming in crypto generally refers to the practice of staking or lending cryptocurrency in order to earn rewards. This can be done through protocols that offer staking services, or by lending a native token directly to other users on decentralized exchanges.

The rewards earned from yield farming can come in the form of interest payments, governance tokens, or a share of transaction fees. In order to maximize earnings, yield farmers often move their capital between different protocols to take advantage of changing interest rates and reward payouts.

While yield farming can be a profitable way to earn rewards on your digital assets, it is important to remember that it also comes with some risks. For example, if the value of the cryptocurrency you are staking falls sharply, you may end up losing money. Although, it can be a great way to grow your crypto portfolio without having to do much work.

What are smart contracts in crypto?

In the world of cryptocurrency, a smart contract is a digital contract that is designed to self-execute and enforce the terms of an agreement.

Unlike traditional contracts, which are often written in complex legal language and can be difficult to interpret, smart contracts are written in code and can be executed automatically. This makes them well-suited for transactions involving digital assets, such as cryptocurrencies.

With a smart contract, both parties can be confident that the terms of the agreement will be carried out exactly as intended. In addition, because smart contracts are stored on a public blockchain, they are transparent and tamper-proof.

This provides an additional level of security and guarantees that the contract will be honored. For these reasons, smart contracts are becoming increasingly popular in the world of cryptocurrency.

Cryptocurrency FAQs

People are curious about crypto, but they don’t know where to start.

We’ve compiled a small list of the most frequently asked questions about crypto so you can get started in no time.

Our FAQ section is packed with information about everything from how crypto works to the best wallets for storing your coins.

Which crypto is the best for beginners?

Deciding which cryptocurrency to invest in can be a daunting task, especially for beginners. There are many factors to consider, such as market capitalization, volatility, and liquidity.

With that in mind, here are three cryptocurrencies that are ideal for beginners: Bitcoin, Binance coin, and Ethereum.

Bitcoin is the original cryptocurrency and still the most widely used. It is also the most stable, with a market capitalization of over $100 billion. Binance coin (BNB) is another safe option since it is also one of the largest cryptocurrencies on the market and it runs on the secure binance smart chain.

It is faster and cheaper to transact than Bitcoin, making it more practical for everyday use. Ethereum is a relatively new coin but has already become the second-largest cryptocurrency by market cap. It is used extensively by developers and is supported by a large ecosystem of apps and services.

So, if you’re looking to get started in the world of cryptocurrencies, these three coins are a great place to start.

Which crypto is safest to buy?

When it comes to cryptocurrency to buy, there are a lot of options to choose from. However, not all cryptocurrencies are created equal. Some are more volatile than others, and some have more potential for fraud. So, which crypto is the safest to buy?

Bitcoin is often considered to be the gold standard of cryptocurrencies. It is the largest and most well-known cryptocurrency, and it has a relatively stable price. That said, Bitcoin is still volatile, so there is still some risk involved.

Ethereum is another popular option that is generally seen as being more stable than Bitcoin. However, it is important to note that Ethereum is still a relatively new currency, so there is less data to support this claim.

Ultimately, the best crypto to buy depends on your personal risk tolerance. If you’re looking for stability, then Bitcoin or Etherium may be the best option for you. However, if you’re willing to take on a bit more risk, then other coins could potentially offer more upside.

How do I choose a crypto?

Here are a few factors to consider when making your decision:

• First, take a look at the team behind the project. What are their qualifications? Do they have a track record of success? A strong team is essential for the long-term success of any crypto.
• Second, examine the technology. Is it well-developed and secure? Does it have the potential for real-world applications? The best cryptos are built on solid foundations and have the potential to change the way we interact with the digital world.
• Finally, consider the community around the project. Is there enthusiasm and support from users and developers? A strong community can help to drive adoption and ensure that a project continues to grow over time.

By taking all of these factors into account, you can make an informed decision about which crypto is right for you.

Which crypto is good for long-term investment?

While there are many cryptocurrencies on the market today, not all of them are the best cryptocurrencies to invest in. So, which is the best crypto to invest in for long-term investment? One option is Bitcoin.

While it can be volatile in the short term, Bitcoin has a proven track record and is widely accepted by businesses and individuals around the world.

Another option is Ethereum. Unlike Bitcoin, Ethereum is designed to support smart contracts and decentralized applications. This makes it an attractive option for businesses and developers, which could lead to more widespread adoption over time.

Ultimately, there is no one-size-fits-all answer to the best cryptocurrency. Each investor must conduct their own research on crypto assets and make a decision based on their individual needs and goals.

Do you have to pay taxes on crypto if you don’t sell?

When it comes to taxes, there are a lot of misconceptions about cryptocurrency. For example, some people believe that you only have to pay taxes on crypto if you sell it. However, this is not the case.

In most jurisdictions, any time you realize a capital gain on your crypto holdings, you are required to pay taxes. This includes cases where you trade one type of crypto for another, or use crypto to purchase goods or services.

So, even if you don’t sell your crypto, you may still be liable for capital gains taxes. Of course, it’s always best to consult with a tax professional to determine your specific tax liability. But in general, you should be aware that you may need to pay taxes on your crypto even if you don’t sell it.

The post 5 Best Crypto to Buy Now: Buyer’s Guide & Helpful Tips appeared first on Due.

“Rule Number One: Never Lose Money. Rule Number Two: Never Forget Rule Number One”

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As a result of the financial crisis of 2008, Warren Buffett lost about $23 billion personally, and his company, Berkshire Hathaway, lost its AAA credit rating. So how can he tell us not to lose money, then?

• His point is that a sensible investor has a certain mindset that includes:
• Avoid frivolous spending.
• Make sure you don’t gamble.
• Don’t make investments with a cocky attitude that you can lose money.
• Educate yourself.

He invests only in companies that he understands and thoroughly researches. You shouldn’t enter into an investment expecting to lose money, just as he doesn’t. For Buffett, temperament is more important than intellect when it comes to investing. To become a successful investor, you should not worry about what the crowd thinks.

It is natural for the stock market to fluctuate. Buffett stays focused on his goals no matter how good or bad the economy is, and all investors should do the same. It does not matter what the market does; this esteemed investor rarely tweaks his long-term investment strategy.

But I’d also add that sometimes you have to learn by making mistakes. Sure, I’m just as guilty of sharing hacks on how to make millions. But I want to flip the script and share with you the six mistakes that collectively cost me $4.2 million. Hopefully, you won’t repeat the same blunders that I did.

1. Penny Stock Mishap

Penny stocks should only cost pennies, right? It’s not quite that simple. To qualify as a penny stock, the stock price must be less than $5.00. Penny stocks also have the following characteristics:

• The Nasdaq or any exchange does not trade them
• The price is less than $5.00
• The company does not meet the financial standards of listed equity companies.

Penny stocks are popular among investors because of their low cost and “potential” payoff. Ideally, “potential” could be translated as “highly unlikely.”

There’s no liquidity in penny stocks, which makes them risky. In addition, the penny stock market is not listed on the major exchanges (NYSE or Nasdaq) but on the Over the Counter Bulletin Board (OTCBB) or the Pink Sheets.

Many of these companies don’t have to provide as detailed a report as their publicly traded counterparts because the listing requirements are far less stringent.

Another risk involved with penny stocks is that they’re prone to scams. Typically, penny stock fraud involves a “pump and dump.” First, small groups of speculators will accumulate large shares of penny stocks. Then, as soon as they secure their positions, they will release positive financial propaganda, news so unexpected and titillating it can drastically change people’s perceptions.

It aims to entice small-time investors to begin trading irrationally. Most of the time, the news is false, but before it is discovered, the stock price skyrockets, and the original speculators profit greatly.

My penny stock blunder.

If we go back in time a little bit, I used to be a financial advisor. And that’s when this debacle took place. To be honest, it still makes me sick to my stomach.

So, what exactly happened?

A client told me about their daughter’s boyfriend, whose dad worked for a mining company. In hindsight, this should have been a red flag. But I was caught up in the moment.

Since this was a penny stock, also known as a thinly traded over-the-counter security, there wasn’t much news about it since it had just signed some new deals. But, according to his theory, this penny stock would soar pretty quickly.

I had some cash in my investment account and decided to roll with it. So, I placed a trade to buy some shares of this stock that would make me millions.

As far as trading is concerned, the OTC market is like the Wild West. Just because the stock is trading at $0.90 doesn’t mean it will be bought or sold at $0.90.

When I place a buy order “at the market,” the price could shoot up to $1.90 or $3.00, depending on whatever their price might be. So essentially, that’s what happened in my case.

I ordered 2,500 shares (I can’t remember exactly), and a few 100 shares were executed at what I thought was the market price. Unfortunately, my mistake was that many of them were double the price I wanted to buy them for.

Even worse, after the trade settled, the prices reflected what I had originally paid.

So, to summarize:

• Despite believing I was buying a penny stock for $.90 per share, I submitted a buy order for 2500 shares at market.
• Although I bought a few hundred shares at $.90, most executed at least twice or three times that price. As a result, I invested $5,000 instead of the expected $2,250.
• Upon settlement, the price reverted back to $.90. I would have taken a massive loss if I had sold it that day.

Where did it all go wrong?

I have to swallow my pride here. But here’s how I screwed this one up.

• The advice I received came from someone I had no business listening to. My client knew nothing about the stock besides what his daughter’s boyfriend had told him about the company. So make sure you consider the source of any investment advice you receive.
• Over-the-counter markets were foreign to me. The system is not like logging into my TD Ameritrade account and purchasing a stock on the NY stock exchange.
• The experience was more like going to Spain, going to a flea market, and trying to bargain with a vendor.
• Greed isn’t always a good thing. My boring mutual funds were making a decent return, but the chance of quadrupling my money in a short time got the better of me.

2. Iraqi Dinar

The Iraqi Dinar was all the rage while we were deployed. It’s basically their currency. I don’t remember all the details. But I remember the Kuwaiti dollar back then, whenever the US went in and got their government in order. So, as a result, the Kuwaiti skyrocketed.

So, the Kuwaiti currency might have taken only $1,000 in US currency to buy a million-dollar bill. I don’t know if you would have had that much extra money, But if you did, that’s a huge, huge return.

Well, many speculated that the exact same thing could happen in Irag. Some claimed that if you invested in Iraqi Dinar, you could make a 100 return. In the end, I bought a million dollars worth of Iraqi dinars.

Since this was 2005, I can’t recall the exact ratio. But the exchange rate was somewhere around 750 or 800. And there were also fees thrown as well.

What is the current state of the Dinar?

Here’s the thing. After all these years, it’s still sitting in our safe. If I put in 750-800 bucks back in 2005, that’s worth $684.93 US dollars. So think about what would have happened if I’d bought $800 of the S&P 500 instead. I lost an opportunity because I didn’t invest in something that would have definitely turned a profit.

3. Solo 401k Business

Solo 401(k)s and individual 401(k)s can help you save considerably more for retirement than just IRAs if you’re self-employed or own a small business.

Both the employee and employer contribution limits are astronomical ($58,000 in 2022), and you don’t need a traditional employer or “boss” to open this account.

Solo 401(k)s work precisely as they sound. If you decide to open your own account with an online brokerage firm, you take the initiative to do so. In terms of Solo 401(k) brokerage firms, there are many to choose from online.

So far, so good. What was the financial blunder?

Well, I came across a solo 401(k) when I co-founded my own investment firm. I had a SEP IRA at the time, But I wanted to save more. So, a Solo 401(k) was appealing to me — especially as a business retirement plan.

Along my journey, I eventually ended up on a sales call. And, to be honest, the pitch was incredible. They told me that if I invested $8,000, they would give me all the proper training so that I could sell this plan to other entrepreneurs. If I sold a couple, I would easily get my money back.

How many did I sell? Zero.

I’m blaming this company completely. I was just in way over my head because I didn’t know how much work would be involved. And I should have that question from the get-go.

4. Investing in Sports Cards

This next one is more recent and a little more personal since my kid’s here into this. And that’s sports cards.

We used to call these baseball cards in the day regardless of the sport. However, today, they’re known as sports cards. And they blew up during the pandemic.

For example, after the tragic passing of Kobe Bryant, the price of his cards spiked. Then, a documentary came out that was similar to the “Last Dance.” So, people were speculating that just like Micheal Jordan, the value of Kobe Bryant cards would soar.

Guess what? I bought into the speculation and dropped a grand on a Kobe rookie card. Today, I can buy that same card for $250 or $300.

Where it gets really bad is that I purchased a lot of rookies for players like Keven Durant and Zion Williamson. And the prices have all plummeted. I might even go as far as to say that I spent more on sports cards than the Solo 401(k).

5. Cryptocurrency Investments

Alright, this one also stings. Why? Because I’m a big fan of crypto. There are legit ways to make money with crypto.

For me personally, that’s:

• Buying and holding. This is the traditional way to make money with all types of investments. In this case, you can buy Bitcoin on a site like Coinbase and park it.
• Earning interest. Cryptocurrency savings accounts, or stable coins, allow you to earn interest. BlockFi offers attractive yields.
• Trading. Unless you’re a trader who monitors this constantly, it’s all based on a hunch. So instead, I would use bots. For example, Grid trading involves placing a bunch of buys and sell orders around a fixed price at predefined intervals.

But this wasn’t the case with Celsius Network. Which, by the way, has made headlines for facing a “Ponzi Scheme” investigation.

So, how did I get involved?

One of my close friends, who I respect, also joined the podcast and talked a lot about Celsius Network. I am not blaming him in any way for what happened. I’m a grown man, after all. However, I didn’t have to go to Celsius Network. Despite that, I appreciated what he had to say.

I ended up transferring a large amount of my cryptocurrency after conducting my own research. When I transferred it, I think there was some Bitcoin and Ethereum, and perhaps Cardano. In any case, Bitcoin was trading between $40 and $60 dollars at the time. It is currently trading at around $20 as of the date of this article.

Look, the crypto market is volatile. That’s the risk you take. But, it’s what specifically happened to Celsius Network where I suffered the most amount of losses.

In case you weren’t aware, Celsius Network filed for bankruptcy. This means that any money I had at Celsius Network is now worthless.

The case is currently in claims court. I may be able to get some of it back from the bankruptcy proceeding. But I’m not holding my breath.

Considering its peak, I should probably have looked this up. The price, however, was over $200. Everything has gone downhill since then, as you all know. Let’s say Bitcoin was $60, and then it went to $220, but now it’s down to 20. If you take a third of that, I have only lost about seventy thousand dollars. I only say that because many others invested much more than I did. Or they invested a more significant portion of their net worth in Celsius Network.

The lesson? Beware of the new shiny object, like investing in Celsius Network.

6. Bad Business Partnership

There’s always risk involved when starting your own business. The most common examples include financial hurdles, ineffective business planning, inadequate management, and marketing disasters.

But, if you start a business with someone else, this is another risk you should be aware of. Unfortunately, I learned this the hard way.

Initially, the partnership was fruitful. It propelled growth and generated more income than I ever imagined I could earn from my blog and online business. And I’ll always be grateful for that.

However, after a stretch of self-discovery, I realized that this partnership contributed to my stress and anxiety. And, even though it took a while, I needed to sever ties with this partner.

If I had to guess, ending this partnership, cost me between $2-$4 million in recurring income. That far exceeds the other ways that I’ve lost money.

Thankfully, I have more than enough income to support my family. And I do have multiple sources of income. But, still, that’s a serious hit.

The post These 6 Mistakes Cost Me More Than $4 Million appeared first on Due.

Everyone wants to retire and spend the rest of their lives in comfort without worrying about their finances. That dream is definitely achievable, but, to do that, you must prepare for it as soon as possible. Whether you’re a bachelor or bachelorette,  a widow or widower, there’s no better time to start preparing for retirement than now.

Due – Due

Truth be told, being single puts you at a significant advantage in preparing for retirement, as you have complete control of your life and are most likely not responsible for anyone else.

So, if you’re a single looking to get a head start on your retirement savings, keep reading because we’ll discuss how you can secure your retirement finances starting now.

How to prepare for retirement

Before we discuss the various ways to save for your retirement, we’ll first discuss the key steps to prepare for this important transition in life.

Step #1 Assess your current finances.

The first step in every journey is to figure out where you’re starting. The same is true in preparing for retirement; you must start by knowing where you are in terms of finances. To do that, start by assessing your sources of income.

• Do you mostly rely on employment?
• Do you have any sources of passive income?
• Any side hustles?
• Then, using that information, compute how much you earn and spend per year. This process will tell you how much money you have and, at the same time, determine how much you can afford to spend based on your financial goals for retirement.

For a more accurate assessment, including a detailed inventory of all your assets (savings, properties, investments, etc.) and liabilities (debt, mortgages, etc.).

You also need to track and clearly assess where your money is going every month. Keeping even small payments like your Spotify subscription or your credit card’s annual fee in check can go a long way in helping you understand your budget. While the latter won’t be the case if you choose a no-fee credit card, there will always be fixed and variable expenses that may add up significantly, potentially jeopardizing your financial goals. Comparing income and expenses is key to knowing how healthy your finances are.

Doing all these assessments help inform you of the appropriate steps you can take next.

Step #2 Right-size your lifestyle.

Once you know where you are financially — it’s time to confront the question, can you afford your current lifestyle?

You’ll know your current lifestyle is too expensive for your income if you lose money based on the previous assessment. If you’re not losing any money, congratulations, you could skip this step and proceed to the next. However, if you’re the opposite and losing money, maybe, it’s time to downsize here and there and start cutting your expenses.

This could mean anything from moving into a smaller house to cooking your own meals, paying back loans, or reducing unnecessary spending. Whatever you do, the goal is for you to be more profitable annually to build up your assets.

Step #3 Set your target.

Assessing your finances and right-sizing your lifestyle without a financial goal in mind would be useless (it’s not even possible to tell). So, based on your annual income and your right-sized annual expenses, set a realistic financial target you think you’ll need to achieve to live comfortably.

For example, if you currently earn $50k per year and roughly spend $45k annually, your goal should be to earn the same amount annually through passive income. So, ideally, your target could be about $450k in savings, which you can invest in some stocks with 10% APY.

Step #4 Save for emergencies.

Now you have a goal in mind, so you’re itching to start investing and earning those dividends. However, before doing that, you should first prepare your emergency fund.

An emergency fund is money you save in an easily accessible bank account, which you can use in case of a rainy day. Ideally, this fund should at least be 3 to 6 months’ worth of your monthly expenses to ensure that you won’t have to touch your retirement savings at all, no matter what happens.

Doing this step will safeguard you in case (knock on wood) you experience an emergency like losing your job.

Step #5 Invest in assets.

Now that you have your financial goals and an emergency fund, it’s time to invest your surplus in money-producing assets. Keep in mind the word assets. Assets are properties that appreciate, like stocks or real estate. Investing in them prevents your money from stagnating and losing its value because of inflation.

Unfortunately, buying a new car or a new boat is not considered an asset in the traditional use of the word. In some circumstances, these things are even considered liabilities, meaning you lose money just by owning them.

If you want to find recommendations for assets you can invest in, keep reading until the last section of this article, where we’ll discuss how you can secure your retirement finances by choosing the right investments.

Step #6 Estate planning.

The harsh reality of life is that all of us are mere mortals, and our stay in this world is temporary. So, if you pass away, you need to specifically tell your loved ones what you want to do with your assets. Generally, you need an attorney to write your last will. But, the process usually follows these steps:

1. Prepare a detailed inventory of all your assets. As we mentioned, an attorney and even an accountant can help you out with this.
2. Assign and review your beneficiaries. Once you have a detailed inventory of your assets, make a list of people you want to inherit your assets. If you want, you can even leave your assets to a charity.
3. Prepare a list of directives your attorney will implement through a legally binding document. This is just another way of saying, get your attorney to write a legal will.

Step #7 Join a community.

No man or woman is an island, and the same is true for you. So, the last step in preparing for retirement is finding and joining a community you will enjoy. Be sure to be thorough in searching and researching your prospect communities, as they can make or break your retired life.

Remember that whichever community you join, it should be one that will let you live peacefully and full of love and happiness.

Ten Ways to Secure Your Retirement Finances

Now, it’s time for the exciting part. We’ll discuss the different ways you can secure your retirement funds through smart investing.

This list contains different assets you can invest in, which appreciate in value over time through the magic of compound interest. Some of these will even allow you to live off of investment interest.

Having most of these assets will ensure you spend your retirement in the most comfortable way possible—a retirement where you’ll never have to worry about money again.

#1 Social Security

Social security is the safety net that societies put in place to cushion the financial blow of unexpected life events like unemployment, illness, disability, childbirth, or the death of a breadwinner.

Retirement is expensive—analysts believe you’ll need between 70 and 90 percent of your pre-retirement income to live comfortably. Getting a membership and investing in a social security fund as soon as possible benefits you in the long run.

This type of insurance allows you to maintain your standard of living once you start enjoying life after retirement.

#2 IRA

To help you save for retirement, the government offers tax breaks for contributions made to Individual Retirement Accounts or IRAs. IRAs are among the best vehicles for long-term financial planning.

You can establish an IRA with little effort. The majority of the population can open one and make deposits. What’s great is that there is no minimum age requirement—however, you must have taxable income. Opening an IRA is quick and easy at most financial institutions.

The primary advantage of a traditional IRA is the ability to delay paying taxes on earnings and contributions until distributions are due. It’s possible that the more money you put away now (and over the years), the more you’ll have to withdraw when you’re ready to retire.

The choice to handle your finances on your own or with the assistance of a financial advisor is yours. You can also use the automated route and have your investments tracked and regularly rebalanced if you want.

#3 401(k)s

You should already have a 401(k) if you currently work in a company, especially since many companies provide employees with access to 401(k) plans, which allow them to save for retirement while enjoying favorable tax treatment.

When you, as an employee, enroll in a 401(k), you consent to have a set amount of your income automatically deducted and deposited into a savings or investing account. So, it’s usually a set-it-and-forget-it type of deal.

As an added benefit, you’ll also reduce your taxes using this plan since your company deducts it from your paycheck before applying federal taxes.

#4 Long-term care

If you qualify for long-term care (LTC) insurance, it’s something you should definitely consider, especially if you’re single and planning for retirement. LTC pays for all or a significant portion of care received at an assisted living facility or home once you reach a certain age, so you won’t have to worry about being left old, sick, and broke.

#5 Stocks

Stocks are popular assets to invest your money in. You may have already heard about this from people around you or even on the media you consume. Stocks are individual shares that make up a company’s ownership. Thus, buying and owning a stock means owning a single share of the company.

The stock market is an excellent way to diversify your portfolio, grow your wealth, and shield your assets from the effects of inflation and taxes. You’ll likely see solid gains if you’re willing to invest in stocks for the long haul.

#6 Bonds

Bonds are a relatively safe investment because these are usually issued by a government, municipality, or corporation (usually to raise money).

Typically, people invest in bonds because this guarantees a steady flow of cash in the future. A bond’s interest is usually paid semi-annually. It is the type of investment that can help you keep more of your money, thanks to the fact that you earn your original investment back if you patiently wait for the bond to reach maturity.

#7 Dividends

In addition to our earlier discussion of stock investment, where you earn money as a consequence of the stock’s value going up, there are other ways to profit from investing in a company—dividends!

Even when capital gains are difficult for the corporation, investors can still get paid with dividend stocks. So basically, there are two ways to profit from these investments: the steady income from dividend payments and growth in the stock price.

#8 Treasury bills

Like bonds, Treasury Bills (or T-Bills) are among the most secure and risk-free investment options available as the government guarantees them. The country’s treasury issues short-term debt instruments, the T-bills, with maturities ranging from a few days to a year.

Additionally, T-bills have low initial investment requirements, and the interest is not subject to income tax at the state or local level. However, it is still taxed at the federal level. There’s a trade-off, though, since less risk also means less potential yield.

If you want to invest in treasury bills, you can easily buy them from the secondary bond market.

#9 Annuities

Annuities are another investment option that is helpful post-retirement. Retirees commonly purchase annuities as a means of securing their income. They are contracts that guarantee payments at regular intervals for a set length of time or even for the rest of your life.

If you pass away before your benefits kick in, any money you have invested will go to your designated beneficiary, depending on the particular type of annuity you purchased.

#10 Invest in real estate

One of the most important assets one may have is real estate. A safe and secure home is necessary for everyone at all times. Unlike paper assets, real estate can be sold quickly and rarely loses value (unless there’s a bursting bubble or something). Residential housing has the potential to generate the most steady revenue.

Most importantly, the land is an immutable investment that never loses value. As time passes, this will continue to appreciate, so selling it later down the line will almost surely turn a profit.

The bottom line

Planning will get you places — including a secure and happy future free of worries (at least financially). Minor adjustments in your current lifestyle and proper management of your assets and income all add up and paint the circumstance of your future self.

You will thank yourself someday for the mindful decisions you make today, so don’t stall anymore and start saving for your financial future.

The post 10 Ways for Singles to Secure Retirement Finances appeared first on Due.