Nothing says summertime like a BBQ, and getting friends and family together for some food and friends for the Fourth of July is the perfect way to celebrate. Iâm usually the host for these get-togethers, and even though I absolutely love having people over, feeding everyone can take a toll on your budget, especially with a big family like mine.
Now that Iâve been using Mint to keep track of expenses, here are some tips on how to have a cost-conscious Fourth of July spread:
1) Declare the BBQ a Potluck.
Thereâs no secret here: potlucks save money AND time. When you invite your guests to bring dishes to the party, that basically means theyâre not only helping out with the food budget, theyâre also taking the time to shop for the ingredients and deliver it to your house ready to eat! I would suggest setting some guidelines for your guests so that there is a variety of food in your spread and not just 5 versions of chips and salsaâ¦.and thatâs it. To divide up the dishes, you could try a few different methods:
Assign your guests by categories. If thereâs an easy way to divide up your guests, like by their last name, or their birthday month, then you could assign one set of guests appetizers, and another set of guests foods for the grill, for example. For this option, I would suggest asking your guests to confirm their choice with you and even post it on a message board if you are using a website to plan your party, so that you know and your other guests whatâs coming and to avoid too much of one type of food.
Ask guests to bring specific foods. If your best friend makes the most amazing potato salad, and you need potato salad, ask your best friend to bring potato salad. Thereâs no need to do all the work when you can tap into the strengths of your guests. For those who are known to shy away from cooking, ask them to bring something simple like a salad or lemonade.
2) Set a food budgetâ¦.and stick to it!
This tip comes directly from my previous post on Healthy Food on a Budget because itâs also important to serve your guests healthy food and stick to your budget. Just because itâs a party doesnât mean you should let your health and your money slip up! Itâs easy to set up budgets in Mint, like saving for a vacation, but you can also set up smaller budgets like for a summer BBQ celebration. Ideally, since youâre having everyone over for a potluck, this get-together wonât take a huge toll on your wallet, but itâs still important to set limits for what you can spend. I like to make it a fun challenge to see how much money I can save and get the most bang for my buck, while not cutting corners on the quality of food served for my guests.
3) Check out the weekly sales ads.
Donât throw away those ads because right before Fourth of July, the mail will be filled with sales on foods for entertaining. Gather those ads up to look through whatâs on sale for the week and map out your menu from those hot buys. If you have apps for your favorite stores, check those out too because Iâve seen in-app coupons that werenât in the print ads that have saved me some money. Once you cross-reference the sales and build your shopping list, also plan out where you will shop from. If you have to travel from 2 different stores to save $15 dollars, I think itâs worth it to take the time to shop smart. Sure, it may take an extra 15 minutes, but I can bet that youâll feel a lot better to have that extra money in your wallet.
4) Pick a dish that saves you money and time.
As the host of the party, youâll be pretty busy with all the details of the day so your time on the day of the party will be limited. From cleaning up the house to setting up the grill, thereâs plenty to do before guests show up. The last thing you want to do is prep a labor-intensive dish when there is so much more on that to-do list. To save money and time, I like to serve up a dessert dish that brings a wow-factor to the party, my Banana Boat Sâmores. These delicious treats light up the eyes of all my guests, and if they knew how cost-effective they are, theyâd light up even more!
To save money, I like to use fruit for dessert, especially in the summer season, because theyâre more affordable, easier to prepare, and most importantly, theyâre healthier! Bananas are only 19 cents each, so just make sure to have at least one banana per guest. I also know that marshmallows and Graham crackers are always on sale for $1 around this time of year, so already, this is a dish that costs less than 50 cents per serving.
To save time, I like this dish because you can have your guest prep their own Banana Boat. All you have to do is set up a station of the ingredients and let them make their creation as they please. When you get your guests involved in the food preparation, youâre saving some valuable time on your end, but also your guests are having fun! Theyâll leave your party with another recipe under their belt as well, so itâs a win-win for everyone.
5) Buy your food in bulk bins.
Donât pass up those bulk bins on your shopping trip, because buying from these can be 30-40% cheaper than packaged branded items. For the chocolate, I paid per ounce from the bin instead of buying packages. Since Iâm setting up a station for my guests at my own home, I donât need the packaging or extra chocolate so why should I pay extra for it? Half a pound only costs $2, whereas if I were to buy a bag or a bar it would cost me close to $5.
With these tips on how to have a cost-conscious Fourth of July spread, I hope you can spread out your budget and use some of that money you save on other fun activities this summer!
The post How To Create A Budget Friendly Spread For Fourth Of July appeared first on MintLife Blog.
Can you retire at 50? On average, people usually retire at 65. But what if you want to retire 15 years earlier than that likeÂ at 50? Is it doable? Below are 10 easy steps to take to retire at 50.Â Retiring early can be challenging. Therefore, SmartAsset’s free tool can match you with Â a financial advisor who can help to work out and implement a retirement income strategy for you to maximize your money.
10 Easy & Simple Steps to Retire at 50:
1. How much you will need in retirement.
The first thing to consider is to determine how much you will need to retire at 50. This will vary depending on the lifestyle you want to have during retirement. If you desire a lavish one, you will certainly need a lot.
But according to a study by SmartAsset, 500k was found to be enough money to retire comfortably. But again that will depends on several factor.
For example, you will need to take into account where you want to live, the cost of living, how long you expect to live, etc.
Read: Can I Retire at 60 With 500k? Is It Enough?
A good way to know if 500k is possible to retire on is to consider the 4% rule. This rule is used to figure out how much a retiree should withdraw from his or her retirement account.
The 4% rule states that the money in your retirement savings account should last you through 30 years of retirement if you take out 4% of your retirement portfolio annually and then adjust each year thereafter for inflation.
So, if you plan on retiring at 50 with 500k for 30 years, using the 4% rule you will need to live on $20,000 a year.Â
Again, this is just an estimation out there. You may need less or more depending on the factors mentioned above. For example, if you’re in good health and expect to live 40+ years after retiring at 50, $500,000 may not be enough to retire on. That’s why it’s crucial to work with a financial advisor.
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Managing your finances can be overwhelming. We recommend speaking with aÂ financial advisor. TheÂ SmartAssetâs free matching toolÂ will pair you with up to 3 financial advisors in your area.
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2. Maximize your tax-advantaged retirement accounts.
Once you have an idea of how much you need in order to retire at 50, your next step is to save as much as possible at a faster rate. If you are employed and you have a 401k plan available to you, you should definitely participate in it. Nothing can grow your retirement savings account faster than a 401k account.
See: How to Become a 401k Millionaire.
That means, you will need to maximize your 401k contributions, for example. In 2020, and for people under 50, the 401k contribution limit is $19,500. Also, take advantage of your company match if your employee offers a match.
In addition to the maximum contribution of $19,500, your employer also contributes. Sometimes, they match dollar for dollar or 50 cents for each dollar the worker pays in.
In addition to a 401k plan, open or maximize your Roth or traditional IRA. For an IRA, it is $6,000. So, by maximizing your retirement accounts every year, your money will grow faster.
3. Invest in mutual or index funds. Apart from your retirement accounts (401k, Roth or Traditional IRA, SEP IRA, etc), you should invest in individual stocks or preferably in mutual funds.Â
4. Cut out unnecessary expenses.
Someone with the goal of retiring at 50 needs to keep an eye on their spending and keep them as low as possible. We all know the phrase, “the best way to save money is to spend less.”
Well, this is true when it comes to retiring 15 years early than the average. So, if you don’t watch TV, cancel Netflix or cable TV. If your cell phone bill is high, change plans or switch to another carrier. Don’t go to lavish vacations.
5. Keep an eye on taxes.
Taxes can eat away your profit. The more you can save from taxes, the more money you will have. Retirement accounts are a good way to save on taxes. Besides your company 401k plan, open a Roth or Traditional IRA.
6. Make more money.
Spending less is a great way to save money. But increasing your income is even better. If you need to retire at 50, you’ll need to be more aggressive. And the more money you earn, the more you will be able to save. And the faster you can reach your early retirement goal.
7. Speak with a financial advisor.
Consulting with a financial advisor can help you create a plan to. More specifically, a financial advisor specializing in retirement planning can help you achieve your goals of retiring at 50. They can help put in a place an investment strategy to put you in the right track to retire at 50. You can easily find one in your local area by using SmartAsset’s free tool. It matches users with financial advisors in just under 5 minutes.
8. Decide how you will spend your time in retirement.
If you will spend a lot of time travelling during retirement, then make sure you do research. Some countries like the Dominican Republic, Mexico, Panama, the Philippines, and so many others are good places to travel to in retirement because the cost of living is relatively cheap.
While other countries in Europe can be very expensive to travel to, which can eat away your retirement money. If you decide to downsize or sell your home, you can free up more money to spend.
9. Financing the first 10 years.
There is a penalty of 10% if you cash out your retirement accounts before you reach the age of 59 1/2. Therefore, if you retire at 50, you’ll need to use money in other accounts like traditional savings or brokerage accounts.
10.Put your Bonus, Raise, & Tax Refunds towards your retirement savings.
If retiring at 50 years old is really your goal, then you should put all extra money towards your retirement savings. That means, if you receive a raise at work, put some of it towards your savings account.
If you get a tax refund or a bonus, use some of that money towards your retirement savings account. They can add up quickly and make retiring at 50 more of a reality than a dream.
Retiring at 50: The Bottom Line:
So can I retire at 50? Retiring at 50 is possible. However, it’s not easy. After all, you’re trying to grow more money in less time. So, it will be challenging and will involve years of sacrifices, years living below your means and making tough financial decisions. However, it will be worth it in the long run.
How Much Is Enough For Retirement
How to Grow Your 401k Account
People Who Retire Comfortably Avoid These Financial Advisor Mistakes
5 Simple Warning Signs Youâre Definitely Not Ready for Retirement
Speak with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning to retire at 50, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post How To Retire At 50: 10 Easy Steps To Consider appeared first on GrowthRapidly.
New financial advisors need something to help them stand out. Consequently, the AAMS does just that. Designed for newcomers to the financial advice business, the AAMS trains advisors to identify investment opportunities as well as help clients with other financial goals. It also gives more experienced advisors a fast and simple way to learn more about asset management and improve their credentials. Hereâs how it works.
An Accredited Asset Management Specialist (AAMS) can advise clients on college savings, taxes, and retirement savings. The course and tests for this certification are designed to ensure advisors can assist clients with their complete financial needs. It emphasizes evaluating the clientâs assets and making appropriate recommendations.
The AAMS certification is granted by the College for Financial Planning, a unit of the Kaplan Company. The college oversees a large number of financial certification programs, including the Certified Financial Planner designation, one of the most valued certifications in the field.
AAMS Certification Requirements
To receive an AAMS, students first have to complete a 10-module education program provided by the College for Financial Planning. Then they have to pass an examination. Finally, they must agree to abide by a code of ethics and promise to continue their education.
The courses are online and can be delivered in self-study or instructor-led formats. Courses are open-enrollment, therefore students can begin at any time without waiting for the next session. The 10 modules cover the following material:
1.:The Asset Management Process
2. Risk, Return & Investment Performance
3. Asset Allocation & Selection
4. Investment Strategies
5. Taxation of Investments
6. Investing for Retirement
7. Deferred Compensation and Other Benefit Plans
8. Insurance Products for Investment Clients
9. Estate Planning for Investment Clients
10. Fiduciary, Ethical, and Regulatory Issues for Advisors
The College of Financial Planning provides everything necessary to study for and complete the modules and take the test. Students have access to the study materials and tests through an online portal.
Streaming video lectures, audio files, and interactive quizzes also can be found through the collegeâs site. Meanwhile, students can access live classes online and contact professors with questions and issues.
The AAMS Test
To get the AAMS certification, students have to pass just one test. However, they have to make their first attempt at the test within six months of enrollment and pass it within a year.
The fee for the first attempt at taking the test is included in the course tuition. There are no prerequisites for signing up to take the AAMS course.
Time and Money Requirement
Tuition for the AAMS courses is $1,300. This includes the fee for the first attempt at passing the certification exam. It also includes all needed course materials. Each additional attempt costs $100.
Students employed with certain financial services firms may be able to get tuition discounts. The college may also provide scholarships.
The College for Financial Planning recommends students plan to spend 80 hours to 100 hours on the course. Since the course is self-study, this amount of time is flexible.
To maintain AAMS certification students have to commit to completing 16 continuing education credits every two years. Also, continuing education has to cover one or more of the topics covered in the AAMS coursework.
AAMS certificate holders also have to agree to follow a professional standard of conduct. As a result, they have to maintain integrity, objectivity, competency, confidentiality and professionalism in providing financial services.
AAMS Certificate Holder Jobs
AAMS certificates are generally earned by entry-level workers in the financial advice business. Consequently, AAMS holders are typically trainees. In some cases, they may provide support services to more experienced and highly credentialed advisors.
The AAMS designation does not confer any special powers or privileges. Instead, itâs an optional credential that students may obtain to advance their careers and enhance their knowledge of financial advice.
In addition to the AAMS, the College for Financial Planning offers an Accredited Wealth Manager Advisor (AWMA) certificate. This is a somewhat more advanced designation. As a result, it requires a course equivalent to three graduate level college credits and requires 90 hours to 135 hours to complete.
Chartered Mutual Fund Counselor (CMFC) is sponsored by the Investment Company Institute along with the College of Financial Planning. It is similar to the AAMS certificate except it focuses on mutual fund assets.
Accredited Financial Counselor (AFC) is a general personal finance advice certificate from the Association for Financial Counseling and Planning Education. First, it requires 1,000 hours of financial counseling experience. Secondly, it demands three letters of reference. Finally, applicants must both complete coursework and pass an exam.
The AAMS designation is usually for newly minted financial advisors, but even experienced pros can use it to bulk up their credentials. The courses and tests associated with the AAMS teach advisors how to evaluate assets and make recommendations.
While this certification doesnât give an advisor any real powers, itâs a sign that they can identify investment opportunities specific to their clients. Above all else, it can be a great relief to a client who has a child going to college or a retirement house on their wish list. As a result of obtaining an AAMS, and advisor can point them toward the right investments for their goals.
If youâre looking to identify investment opportunities, consider using an AAMS as your advisor. Finding the right financial advisor that fits your needs doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in 5 minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.
An AAMS can help you with college savings, taxes, and retirement savings if you know what your goals are. However, if you are unsure how much you want to invest, what your risk tolerance is, or how inflation and capital gains tax will affect your investment, SmartAssetâs investing guide can help you take the first steps.
Itâs not uncommon for publicly-traded companies to restructure based on changing market conditions or share prices. When companies merge, split their stock, or acquire competitors, it can raise the question of how to consolidate or restructure the companyâs stock.
If such a corporate action generates fractional shares, the companyâs leadership has a few options for how to proceed: They could distribute the fractional shares, round up to the nearest whole share, or pay cash in lieu of fractional shares.
What is Cash In Lieu?
stock price, or both.
There are several company events that can lead to investors receiving cash in lieu of fractional shares.
A stock split occurs when a companyâs board of directors determines that their companyâs strongly performing stock price may be too high for new investors. To make the stock price look more attractive to more investors and gain more liquidity and marketability, a stock split is executed to artificially lower the stockâs price by issuing more shares at a fixed ratio while maintaining the companyâs unchanged value.
Depending on the predetermined ratio, a stock split could cause fractional shares to be generated. For example, a three-for-two stock split of a stock worth $111 would create three shares for every two shares each investor holds. Thus, a stock split would cause any investor with an odd number of shares to receive a fractional share.
However, if the companyâs board isnât keen to hold or deal with fractional shares, they will distribute investorsâ whole shares and liquidate the uneven remainders, thus paying investors cash in lieu of fractional shares. The ratio or cash rate as set by the company performing the stock split can be located on the companyâs corresponding SEC 8-K document.
reverse stock split because a stockâs prices are too low and they want to artificially raise them. If stock prices get too low, investors may become fearful to buy and the stock risks being delisted from exchanges.
When a stock undergoes a reverse stock split, each share is converted into a fraction of a share but higher-priced shares are issued to investors according to the reverse split ratio . For example, a stock valued at $3.50 may undergo a reverse one-for-10 stock split. Every 10 shares is converted into one new share valued at $35.00. Investors who own 33 shares or any number indivisible by 10 would receive fractional shares unless the company decides to issue cash in lieu of fractional shares.
Companies may notify their shareholders of an impending reverse stock split on Forms 8-K, 10-Q, or 10-K as well as any settlement details if necessary.
Merger or Acquisition
Company mergers and acquisitions (M&As) can also create fractional shares. When companies combine or are absorbed, they combine new common stock using a predetermined ratio, which often results in fractional shares for investors in all involved companies.
In these cases, itâs rare for the ratio of new shares received to be a whole number. Companies may opt to return whole shares to investors, sell fractional shares, and disburse cash in lieu to investors.
If an investor owns shares of a company that spins off part of the business as a new entity with a separately-traded stock, shareholders of the original company may receive a fixed amount of shares of the new company for every share of the existing company held.
How Is Cash in Lieu of Fractional Shares Taxed?
Just like many other forms of investment profits, cash in lieu of fractional shares is taxable , even though it was acquired without the investorâs endorsement or action. The stockâs company may send investors a check followed by an IRS Form 1099-B at year-end with a âcash in lieuâ or âCILâ notation.
Some investors may simply report the payment on the IRS Form 1040’s Schedule D as sales proceeds with zero cost and pay capital gains tax on the entire cash settlement. However, the more accurate and tax-advantageous method would apply the adjusted cost basis to the fractional shares and pay capital gains tax only on the net gain.
Looking to Trade Fractional Shares? SoFi Invest Can Help with That.
How to Report Cash in Lieu of Fractional Shares
Calculating the cost basis for cash in lieu of fractional shares is a little tricky due to the change of share price and quantity. The new stock issued is not taxable nor does the cost basis change, but the per-share basis does.
Consider the following example:
• An investor owns 15 shares of Company X worth $10.00 per share ($150 value).
• Investorâs 15 shares have a $7.00 per share cost basis ($105 total cost basis).
• Company X declares a 1.5 stock split.
The investor is entitled to 22.5 shares valued at $6.67 each but the company states they will only issue whole shares. Therefore, the investor receives 22 shares plus a $2.73 cash in lieu payment for the half share.
The investorâs total cost basis remains the same, less the cash in lieu of the fractional shares. However, the adjusted cost basis now factors in 22 shares instead of 15, equaling a $4.66 per share cost basis and a $2.33 fractional share cost basis. Finally, the taxable ânet gainâ for the cash payment received in lieu of fractional shares equates to $2.725 – $2.33 = $0.39.
Itâs not always possible to anticipate a company being restructured and how it will affect shareholdersâ stock. In the event the company doesnât wish to deal with fractional shares, itâs important for shareholders to understand the alternatives such as cash in lieu of fractional shares, and how it affects them. While cash in lieu can be burdensome, investors can be made whole and can then proceed on their own accord.
There are many reasons investors consider fractional shares worth buying to add to their investment portfolio. For individuals looking to invest in fractional shares with the help of a simple account setup and no fees, SoFi InvestÂ® can help.
Find out how SoFi Invest can help you reach your financial goals.
SoFi InvestÂ® The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individualâs specific financial needs, goals and risk profile. SoFi canât guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term âSoFi Investâ refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below. 1) Automated InvestingâThe Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (âSofi Wealthâ). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (âSofi Securities). 2) Active InvestingâThe Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation. 3) Digital AssetsâThe Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business. For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal. External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Stock Bits Stock Bits is a brand name of the fractional trading program offered by SoFi Securities LLC. When making a fractional trade, you are granting SoFi Securities discretion to determine the time and price of the trade. Fractional trades will be executed in our next trading window, which may be several hours or days after placing an order. The execution price may be higher or lower than it was at the time the order was placed.
The post Understanding Cash in Lieu of Fractional Shares appeared first on SoFi.
A website called Insure makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and itâll show you your options â and even discounts in your area.
But is it dangerous to be too obsessed with the stock market?
If you owe your credit card companies ,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
Using Insure, people have saved an average of 0 a year.
Another way to grow your money: Stop overpaying on your bills.
1. Just Steadily Invest Like a Normal Person
Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for âthis is totally safe.â
But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Yup. That could be 0 back in your pocket just for taking a few minutes to look at your options. *For Securities priced over ,000, purchase of fractional shares starts at It takes about one minute to sign up, and start getting paid to watch the news.
2. Grow Your Money 16x Faster â Without Risking Any of It
Plus, with Stash, youâre able to invest in fractions of shares, which means you can invest in funds you wouldnât normally be able to afford. Is it OK that heâs stopped contributing to his 401(k) so he can trade stocks? the reader asked. How do I ask him what heâs actually investing in? Iâm worried that heâs gambling money that we need for our retirement.
The benefit? Youâll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), youâll get out of debt that much faster. Plus: No credit card payment this month.
You bet it is. Our financial advice columnist, Dear Penny, recently heard from a reader whose husband stopped funding his 401(k) so he can bet on the stock market, instead.
Not too shabby!
3. Stop Paying Your Credit Card Company
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Weâre big on investing. Itâs an important way to grow your money and set yourself up for retirement someday. **Youâll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian. Source: thepennyhoarder.com
Weâre living in historic times, and weâre all constantly refreshing for the latest news updates. You probably know more than one news-junkie who fancies themselves an expert in respiratory illness or a political mastermind.
4. Cut Your Bills by $540/Year
Save some of your money in a safer place than the stock market â but where youâll still earn money on it. Mike Brassfield (email@example.com) is a senior writer at The Penny Hoarder. He tries not to be obsessed with the stock market.
Thatâs not the way to go. Here are five safer ways to invest and grow your money.
You just have to answer honestly, and InboxDollars will continue to pay you every month. This might sound too good to be true, but itâs already paid its users more than million.
And research companies want to pay you to keep watching. You could add up to 5 a month to your pocket by signing up for a free account with InboxDollars. Theyâll present you with short news clips to choose from every day, then ask you a few questions about them.
5. Add $225 to Your Wallet Just for Watching the News
For example, whenâs the last time you checked car insurance prices? You should shop your options every six months or so â it could save you some serious money. Letâs be real, though. Itâs probably not the first thing you think about when you wake up. But it doesnât have to be.
It takes two minutes to see if you qualify for up to ,000 online. You do need to give AmOne a real phone number in order to qualify, but donât worry â they wonât spam you with phone calls.
Instead of betting all your money on the stock market, just steadily invest in it. Take the long view. The stock market is unpredictable, which means that sometimes stock prices go up, and sometimes they go down â but over time, they tend to go up.
We like Stash, because it lets you choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it simple by breaking them down into categories based on your personal goals. Want to invest conservatively right now? Totally get it! Want to dip in with moderate or aggressive risk? Do what you feel.
One way to make sure you have more money is to stop wasting money on credit card interest. Your credit card company is getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.
Under your mattress or in a safe will get you nothing. And a typical savings account wonât do you much better. (Ahem, 0.06% is nothing these days.)
Hereâs a safe way to earn a little cash on the side.
If you havenât started investing and have some money to spare, you can start small. Investing doesnât require you throwing thousands of dollars at full shares of stocks. In fact, you can get started with as little as .*
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau. If you sign up now (it takes two minutes), Stash will give you after you add to your invest account. Subscription plans start at a month.**
Do you know the allegory of Mr. Market? This useful parable—created by Warren Buffett’s mentor—might change everything you think about the stock market, its daily prices, and the endless news cycle (and blogs?!) built upon it.
The Original Mr. Market
The imaginary investor named “Mr. Market” was created by Benjamin Graham in his 1949 book The Intelligent Investor. Graham, if you’re not familiar, was the guy who taught Warren Buffett about securities analysis and value investing. Not a bad track record.
Graham asks the readers of his book to imagine that they have a business partner: a man named Mr. Market. On some days, Mr. Market arrives at work full of enthusiasm. Business is good and Mr. Market is wildly happy. So happy, in fact, that he wants to buy the reader’s share of the business.
But on other days, Mr. Market is incredibly depressed. The business has hit a bump in the road. Mr. Market will do anything to sell his own shares of the business to the reader.
Of course, the reader is always free to decline Mr. Market’s offers. And the reader certainly should feel wary of Mr. Market. After all, he is irrational, emotional, and moody. It seems he does not have good business judgement. Graham describes him as having, “incurable emotional problems.”
How can Mr. Market’s feelings fluctuate so quickly? Rather than taking an even emotional approach to business highs and lows, Mr. Market reacts strongly to the slightest bit of news.
If anything, the reader could probably find a way to take advantage of Mr. Market’s over-reactions. The reader could buy from Mr. Market when he’s feeling overly pessimistic and sell to Mr. Market when he’s feeling unjustifiably euphoric. This is one of the basic principles behind value investing.
But Mr. Market is a metaphor
Of course, Mr. Market is an imaginary investor. Yet countless readers have felt that Mr. Market acts as a perfect metaphor for the market fluctuations in the real stock market.
The stock market will come to you with a different price every day. The market will hear good news from a business and countless investors will look to buy that business’s stock. Will you sell to them? But a negative headline will send the market tumbling. Investors will sell. Please, they plead, will you buy my shares?!
Don’t like today’s price? You’ll get a new one tomorrow.
Is this any way to make rational money decisions? By buying while manic and selling while depressive? Do these daily market fluctuations relate to the true intrinsic value of the businesses they represent?
“Never buy something from someone who is out of breath”
There’s a reason why Benjamin Graham built Mr. Market to resemble an actual manic-depressive. It’s an unfortunate affliction. And sadly, those afflicted are often untethered from reality.
The stock market is nothing more than a collection of individuals. These individuals can fall prey to the same emotional overreactions as any other human. Mr. Market acts as a representation of those people.
“In the short run, the stock market is a voting machine. Yet, in the long run, it is a weighing machine.”
Votes are opinions, and opinions can be wrong. That’s why the market’s daily price fluctuations should not affect your long-term investing decisions. But weight is based on fact, and facts don’t lie. Over the long run, the true weight (or value) of a company will make itself apparent.
Warren Buffett’s Thoughts
Warren Buffett is on the record speaking to Berkshire Hathaway shareholders saying that Mr. Market is his favorite part of Benjamin Graham’s book.
If you cannot control your emotions, you cannot control your money.
Of course, Buffett is famous for skills beyond his emotional control. I mean, the guy is 90 years old and continues his daily habits of eating McDonalds and reading six hours of business briefings. That’s fame-worthy.
But Buffett’s point is that ignoring Mr. Market is 1) difficult but 2) vitally important. Your mental behavior is just as important as your investing choices.
For example: perhaps your business instincts suggested that Amazon was a great purchase in 1999—at about $100 per share. It was assuredly overvalued at that point based on intrinsic value, but your crystal ball saw a beautiful future.
But Buffett’s real question for you would be: did you sell Amazon when the Dot Com bubble burst (and the stock fell to less than $10 per share)? Did Mr. Market’s depression affect you? Or did your belief in the company’s long-term future allow to hold on until today—when the stock sits at over $3000 per share.
The Woefully Ignorant Sports Fan
I know about 25 different versions of this guy, so I bet you know at least one of them. I’m talking about the Woefully Ignorant Sports Fan, or WISF for short.
The WISF is a spitting image of Mr. Market.
When Lebron James has a couple bad games, the WISF confidently exclaims,
“The dude is a trash basketball player. He’s been overhyped since Day 1. I’m surprised he’s still in the starting lineup.”
Wow! That’s a pretty outrageous claim. But when Lebron wins the NBA finals and takes home another First-Team All-NBA award, the WISF changes his tune.
“I’m telling you, that’s why he’s the Greatest of All Time. The GOAT. Love him or hate him, you can’t deny he’s the King.”
To the outside observer, this kind of flip-flop removes any shred of the WISF’s credibility. And yet the WISF flip-flops constantly, consistently, and without a hint of irony. It’s simply his nature.
Now think about the WISF alongside Mr. Market. What does the WISF actually tell us about Lebron? Very little! And what does Mr. Market tell us about the true value of the companies on the stock market? Again, very little!
We should not seek truth in the loud pronouncements of an emotional judge. This is another aphorism from The Intelligent Investor book.
But I Want More Money!
Just out of curiosity, I logged into my Fidelity account in late March 2020. The COVID market was at the bottom of its tumble, and my 401(k) and Roth IRA both showed scarring.
Ouch. Tens of thousands of dollars disappeared. Years of saving and investing…poof. This is how investors lose heart. Should I sell now and save myself further losses?
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No! Absolutely not! Selling at the bottom is what Mr. Market does. It’s emotional behavior. It’s not based on rationality, not on the intrinsic values of the underlying businesses.
My pessimism quickly subsided. In fact, I began to feel silver linings. Why?
I’m still in the buying phase of my investing career. I buy via my 401(k) account every two weeks. And I buy via my Roth IRA account every month. I’ve never sold a stock. The red ticks in the image below show my two-week purchasing schedule so far in 2020.
If you’re investing for later in life, then your emotions should typically be the opposite of the market’s emotions. If the market is sad and prices are low and they want to sell…well, great! A low price for you increases your ability to profit later.
And Benjamin Graham agrees. He doesn’t think you should ignore Mr. Market altogether, but instead should do business with him only when it’s in your best interest (ooh yeah!).
“The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him, but only to the extent that it serves your interest.”
If you log into your investment accounts and see that your portfolio value is down, take a step back and consider what it really means. You haven’t lost any money. You don’t lock in any losses unless you sell.
The only two prices that ever matter are the price when you buy and the price when you sell.
Mr. Market in the News
If you pay close attention to the financial news, you’ll realize that it’s a mouthpiece for the emotional whims of Mr. Market. Does that include blogs, too? In some cases, absolutely. But I try to keep the Best Interest out of that fray.
For example, here are two headlines from September 29, 2020:
Just imagine if these two headlines existed in another space. “Bananas—A Healthy Snack That Prevents You From Ever Dying” vs. “Bananas—A Toxic Demon Food That Will Kill Your Family.”
The juxtaposition of these two headlines reminds me of Jason Zweig’s quote:
“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap).”
More often than not, reality sits somewhere between unsustainable optimism and unjustified pessimism. As an investor, your most important job is to not be duped by this emotional rollercoaster.
Investing Based on Recent Performance
Out of all the questions you send me (and please keep sending them!), one of the most common is:
“Jesse – I’m deciding between investment A, investment B, and investment C. I did some research, and B has the best returns over the past three years. So I should pick B, right?”
Great question! I’ve got a few different answers.
What is Mr. Market saying?
Let’s look at the FANG+ index. The index contains Twitter, Tesla, Apple, Facebook, Google, Netflix, Amazon, NVIDIA, and the Chinese companies Baidu and Alibaba. Wow! What an assortment of popular and well-known companies!
The recent price trend of FANG+ certainly represents that these companies are strong. The index has doubled over the past year.
Mr. Market is euphoric!
And what do we think when Mr. Market is euphoric?
How do you make money?
Another one of my favorite quotes from The Intelligent Investor is this:
“Obvious prospects for physical growth in a business do not translate into obvious profits for investors”
You make money when a company’s stock price is undervalued compared to its prospects for physical growth. You buy low (because it’s undervalued), the company grows, the stock price increases, you sell, and boom—you’ve made a profit.
I think most people would agree that the FANG+ companies all share prospects for physical growth. But, are those companies undervalued? Alternatively, have their potentials for future growth already been accounted for in their prices?
It’s just like someone saying, “I want a Ferrari! It’s such a famous car. How could it not be a great purchase?”
The statement is incomplete. How much are you paying for the Ferrari? Is it undervalued, only selling for $10,000? Or is it overvalued, selling at $10 million? The product itself—whether a car or a company—must be judged against the price it is selling for.
Past Results Do Not Guarantee Future Performance
If investing were as simple as, “History always repeats itself,” then writing articles like this wouldn’t be worthwhile. Every investment company in the world includes a disclaimer: “Past results do not guarantee future performance.”
Before making a specific choice like “Investment B,” one should understanding the ideas of results-oriented thinking and random walks.
Farewell, Mr. Market
Mr. Market, like the real stock market, is an emotional reactionary. His daily pronouncements are often untethered from reality. Don’t let him affect you.
Instead, realize that only two of Mr. Market’s thoughts ever matter—when you buy from him and when you sell to him. Do business with him, but make sure it’s in your best interest (oh yeah!). Everything else is just noise.
If the thoughts of Benjamin Graham, Warren Buffett, and the Best Interest haven’t convinced you, just look at the financial news or consider the Woefully Ignorant Sports Fan. Rapidly changing opinions rarely reflect true reality.
Stay rational and happy investing!
If you enjoyed this article and want to read more, Iâd suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.
This page may include affiliate links. Please see theÂ disclosure pageÂ for more information. How do many wealthy people get that way? They invest in real estate. It is a proven way to build wealth. 90% of millionaires became so through owning real estate. So said famous industrialist (and billionaire) Andrew Carnegie. Yet only 15% of Americans…
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6-month CD rates can be a smart strategy for your short-term saving goals.
If you’re saving for a house, you may be wondering where you can park your hard-earned cash safely and earn interest at the same time.
If so, you should consider a 6-month CD, because the rates can still be very competitive.
In fact, 6-month CD rates can range from 0.50% APY to 1.00% APY, which produce higher yields than bank savings accounts.
Also, a six-month CD comes with FDIC insurance that protects your money up to $250,000.
Why shouldn’t you take advantage of a higher yield and safety?
Of note, if you are looking for higher yields, consider investing in Vanguard index funds.
In the meantime, here’s a table listing the best 6-month CD rates.
6-Month CD Rate
Limelight Bank CD
Sallie Mae Bank CD
BMO Harris Bank CD
Live Oak Bank CD
Bank5 Connect CD
TIAA Bank CD
Ally Bank CD
PurePoint Financial CD
Best 6-month CD rates to help you achieve short-term saving goals.
*TOP CIT BANK PROMOTIONS*
CIT Bank Money Market
CIT Bank Savings Builder
CIT Bank CDs
0.75% APY 1 Year CD Term
CIT Bank No Penalty CD
What is a CD?
A certificate of deposit or CD is a type of short-term investment where you agree to keep your money for a certain period of time, usually for three months to several years.
You usually open a CD with a traditional bank, credit union or even an investment company. For example, investment company such as Vanguard offers brokered CDs.
Once the CD “matures” or becomes “due,” you receive the principal money invested, plus interest.
If you withdraw your money before the stated period of time, an early withdrawal penalty will apply.
However, there are some banks that offer CDs with no penalty. Banks such as CIT Bank has an 11-month, no penalty CDs. However, those CDs usually have lower APY.
CDs are very safe. That’s because they are insured by the federal government for up to $250,000.
So, if you’re looking for safety, a CD is a good choice.
Is a six-month CD right for you?
Before you start shopping for the best 6-month CD rates, you need to ask yourself these questions:
How much interest will you earn?
Are 6-month CD rates better than interests from a savings account, money market funds, etc?
With a 6-month CD, you can expect to earn good money. But not a lot when comparing to longer CD terms. It is because the longer the length of the CD, the more money you will make.
But one thing for sure is that you will earn more money on a 6-month CD than on a savings account (more on this later).
Here’s how much you can earn with a 6-month CD rate.
Overview of the best 6-Month CD Rates: how much should you expect to earn.
The minimum balance requirement and the rates for these 6-month CDs vary depending on the bank. The rates range from 0.50% to 1.00%.
EmigrantDirect 6-month CD rate
The applicable rate for a six-month CD from Emigrant Direct is 1.00% . This six-month CD has a $1000 minimum deposit requirement. This is one of the highest interest rates out there.
MySavingsDirect 6-month CD rate
This 6-month CD also has a 1.00% APY and requires a $1000 minimum deposit.
Limelight Bank 6-month CD rate
The applicable yield for a six-month CD from Limelight Bank is 0.95%. It also has a $1000 minimum balance requirement.
BMO Harris 6-month CD rate
For a BMO Harris six-month CD, it is 0.80% APY and $5,000 minimum deposit.
Live Oak Bank 6-month CD rate
You can expect a 0.80% APY, But the minimum deposit can be high, $2,500.
Sallie Mae Bank 6-month CD rate
Sallie Mae’s 6-month CD offers a 0.90% APY and requires a $2,500 minimum deposit.
TIAA Bank 6-month CD rate
The minimum deposit can be steep for a six-month CD from TIAA Bank, which is $5,000. But a rate of 0.75% is still competitive.
Ally Bank 6-month CD rate
For an Ally Bank six-month CD, the rate is 0.65%. And there is no minimum deposit.
Bank5 Connect 6-month CD rate
The Bank5 Connect 6-month CD has the lowest minimum deposit requirement ($500) with a rate of 0.75%.
HSBC Direct 6-month CD rate
For a 6-month CD from HSBC, the yield is 0.75% and the minimum deposit requirement is $1,000.
PurePoint 6-month CD rate
The yield for this six-month CD is 0.50%Â and the minimum deposit is $10,000. This deposit requirement can be too much for most people.
Why should you invest in a 6-month CD?
Given that these banks’ 6-month CD offer competitive rates, they may be a good option for you.
So, you may want to consider them for the following reasons:
Emergency fund. A 6-month CD is a good place for your emergency fund. However, if an emergency occurs before the CD matures and you withdraw the money, a penalty will apply.
Saving for a down payment. A 6-month CD is a good option if you’re thinking of buying a house in the next six months.
It’s a good place to accumulate and grow the down payment. You certainly don’t want to risk your money investing it in the stock market, because the market can plunge in a relatively short of time.
Wedding. If you have an upcoming wedding, a six-month CD is a good place to keep your cash.
Vacation. If you’re planning of taking a vacation in 6 months or so, a 6-month CD makes the most sense. Your money is safe and you’ll earn interest at the same time.
CDs vs. savings accounts vs. money market funds
While a 6-month CD can be a good option for your money, it may not be the best options in all situations.
If you need your money before the stated period and withdraw it, you will get hit with a penalty.
So, it makes sense to see what other options are available to you. And the best way to do so is to compare a 6-month CD rate with other saving vehicles.
6-month CD vs. savings account
There is no doubt you’ll receive a higher return on your money with a CD than with a savings account.
However, a savings account is more liquid than a CD. You can withdraw money in your savings account with no fear that you’ll get hit with a penalty.
With a CD, however, an early withdrawal penalty will apply if you need access to your money before the CD becomes “due.”
6-month CD vs. money market fund
It’s likely that you will earn more interest on your money with a CD than with a money market fund.
However, just like a savings account, you can easily access your funds in your money market fund at any time without the early withdrawal penalty that comes with taking money out of your 6-month CD before it matures.
You can write a check or you can call the fund company and ask them to transfer your money to your bank.
The bottom line
6-month CD rates are competitive. A six-month CD can be a good choice if you’re saving for a short-term goals. You’ll earn a higher rate on a 6-month CD than on a savings account.
Speak with the Right Financial Advisor
If you have questions about your finances, you can talk to aÂ financial advisorÂ who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
Find one who meets your needs withÂ SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals,Â get started now.
*TOP CIT BANK PROMOTIONS*
CIT Bank Money Market
CIT Bank Savings Builder
CIT Bank CDs
0.75% APY 1 Year CD Term
CIT Bank No Penalty CD
The post 6-Month CD Rates: Earn More Money appeared first on GrowthRapidly.