Worst Financial Advice Ever

worst advice

worst adviceLook anywhere online and you will find financial advice. This is good and bad. Having easy access to all of this knowledge allows for you to easily learn and take the steps needed to become financially successful. But this also allows people who have no business writing about finances to give advice. It also means that companies that are trying to scam you out of your hard earned money can give advice that makes their product/service look good. Below I’ve come up with 12 pieces of the worst financial advice ever. Follow them with caution!

12 Pieces of The Worst Financial Advice Ever

Co-sign A Loan

I’m sure there is one (maybe two) reasons why you would want to co-sign a loan. But for the overwhelming amount of times, it makes zero sense to co-sign a loan. When you co-sign a loan you are saying that you are willing to take over the loan payments if the other person stops paying.

Let’s think about this for a minute. Are you OK with paying for someone else’s car? Are you OK with paying for someone else’s education? If you answered yes to these, email me as you have just become my BFF.

No matter how much you love or care about the other person, you should not co-sign a loan. It will end badly. Alright, 99% of the time, it will end badly.

What To Do Instead: Support them. If they need a co-signer, either they are trying to take out a loan for more than they can handle or they have bad credit – meaning they aren’t great with handling their money in the first place. If they are trying to take out too much of a loan, help them to find a lower cost option. Instead of a new car, look at good used cars. Maybe help them to find ways to save more money or earn more money so they can take out a smaller loan and therefore won’t need the person to co-sign. [Read more…]

Different Ways To Get Exposure In Gold

investing in gold

investing in goldPerhaps it’s no exaggeration to say that gold is the ultimate hedge investment against the dollar. The precious yellow metal’s value doesn’t move along with other securities so investors turn to it whenever markets go bad.

There are many ways for an investor to invest in gold, and there’s no single best type of investment. The effectiveness of a gold investment will always depend on how a person plans on using it. (This is why I love personal finance so much. There is not one solution for everyone. You have to assess your situation, needs and goals, and then go from there.)

Direct Ownership of The Bullion

The main reason why investors buy physical gold is to preserve wealth. They don’t buy it to keep it for the short term and then sell it immediately when gold prices go up a little bit. Investors don’t also buy the physical metal to speculate on price movements. Owning physical gold means having real money that cannot be controlled by any government-based fiat money.

Physical ownership has several drawbacks. First, investors shouldn’t expect to make quick profits from it since it has a wide spread between bid and ask prices. Second, shipping, storing, and importing it has associated fees and rules depending on each country. [Read more…]

Investing With A Small Amount of Money

investing with a small amount of money

investing with a small amount of moneyA common complaint I hear a lot of from would be investors is how to start investing with a small amount of money. Most people don’t have a few grand laying around to put into the market and so they just sit on the sideline instead. If this describes your situation, I have great news for you – this post is going to show you just how easy it is to start investing with a little money. You don’t need thousands to get started down the path of financial freedom. In fact, in one case, you can start out with just $10 bucks!

How To Invest With A Small Amount of Money

Years ago, if you didn’t a few grand laying around collecting dust, your investment options were slim to none. But thanks to technology and some government regulation, you can get started investing with a few dollars. Below are 4 of my favorite ways.

Invest In Your 401k Plan

Many of us that work are covered by a 401k plan at work. This is the easiest way to get started investing in the stock market. In fact, it is the only way you can start doing so with less than $10. How? You decide how much of a percentage of your salary you save in your 401k plan. If you make $20,000 and save just 1%, then you are saving $3.85 per paycheck if you get paid weekly.

Now, don’t make the mistake of thinking that $3.85 won’t turn into anything big, because it will – if you stick with it. Read my compound interest post for proof. Ideally though, you should be investing an amount in your 401k plan that allows you to take advantage of your company match. For a lot of readers, this is probably around 3-5% of your salary.

If you want to get started investing, this is the easiest first step you can take.

Look Into Mutual Funds

If you aren’t covered by a 401k plan at work, or you want to invest somewhere else, you can look into mutual funds. While many mutual funds have large account minimums, there are handfuls that have much lower minimums so that first time investors can invest with a small amount of money. Case and point is Homestead Value Fund (HOVLX). It invests in medium to large sized companies that the manager feels are undervalued. The fund has done well over the long term and only charges 0.64% in expenses. To open an account you need $500. Subsequent purchases cost $100. [Read more…]

Could This Be The Best Online Broker? My Charles Schwab Review

charles schwab review

charles schwab reviewYears ago, when I was looking for an online discount broker to invest my money, I did a ton of research. There were a handful that I was considering, but in the end, I chose Schwab because they had all of the features I was looking for. Fast forward to today and even though I have accounts at Betterment, Vanguard and Sharebuilder, I still have a good amount with Schwab and I wouldn’t change it. Below is my detailed review of Schwab.

(As a side note, if you are interested in learning more about other online brokers, you can read my reviews of Betterment, E*Trade, Scottrade, TradeKing and Sharebuilder. Also check out my comprehensive online broker comparison chart to see which brokers meets your needs best. OK, back to the Schwab review.)

My Schwab Review

Schwab History and Background

It all started back in 1975 when the Securities and Exchange Commission deregulated broker commissions. Schwab was the first discount broker on the scene. The company steadily grew over the years and in 1983 was purchased by Bank of America.

One year later, Schwab introduced 140 no-load mutual funds as well as The Equalizer, a DOS based tech solution that would eventually be online trading as we know it today.

By 1985, Schwab signed up its 1 millionth customer and two years later, Charles bought the firm back from Bank of America. Then in 1995, Schwab.com was born. Today, Schwab has close to 2 trillion in assets, over 9 million active brokerage accounts, and is still innovating the discount broker scene.

Schwab Features

OK, now on to the features that makes Schwab so great for investors. I’ll highlight these in bullet points and then go into more detail:

  • $8.95 online trades (this includes market and limit orders) for stocks priced $1 or more.
  • Streaming quotes are free for investors. Most other brokers give you free delayed quotes (they are delayed up to 15 minutes). If you want streaming quotes from these brokers, it will cost you.
  • Tons of investment options for investors. Choose from stocks, bonds, exchange traded funds, mutual funds, options and CDs. You can invest in non-retirement, retirement, small business, trusts and educational accounts as well.
  • Crazy amounts of research. Not only do you get research reports from Schwab itself, but also from other third party industry experts.
  • Easy to use website. There is a lot to be said when you find a website where you can easily find what you are looking for. I found this to be the case with Schwab. I had no issues finding what I was looking for.

[Read more…]

Top Posts of 2014: A Year In Review

new years times square

new years times squareWelcome to 2015! I took some time off around the holidays to spend with friends and family and to simply re-charge my batteries. I have a ton of great things planned for everyone in 2015, but before we get into that, let’s take a quick look back at the top posts from 2014.

I like to highlight the best posts from the previous year for a few reasons:

  • first, everyone is busy and as a result, you might miss a great post.
  • second, I have new readers find my site all of the time. By having a quick review post, they can get up to speed rather quickly.
  • third, sometimes a post might not connect with you at the time of reading it, but now you are in a place where you want to get out of debt and might find the information helpful.

With that, said, below are my top posts of 2014. I have them listed from in reverse order, so the biggest post is listed last. You might be wondering how I came up with this list. Well, it’s a complicated formula that is locked in a vault in Fort Knox. In other words, it’s just a combination of page views, comments, and buzz.

11. Learn To Live On Less

In my cutting monthly expenses post, I go break out monthly expenses into two groups: big and small, then provide tips to cut each group and which one has a larger impact on your bottom line. At the end of the day, learning to live within your means is a key factor to reaching financial independence.

10. Earn Money On The Side

I wrote a post about all of the various ways I make (and have made) money on the side. While I didn’t sell plasma to make money, I have used a bunch of methods that I am certain you find helpful of you too are looking to make some money on the side. [Read more…]

Finding The Perfect Partner In Wealth Management

wealth management partner

wealth management partnerWhether you’ve just secured a lucrative career position or inherited a significant monetary amount, a strong wealth management partner is necessary to steer those funds in a smart direction. With so many investment options, only trained professionals can really divide and conquer your wealth where it gains optimum interest and dividends. Find that partner, such as through J.P. Morgan wealth management, who shares your goals and outlook on life.

Start With A Few Connections

Talk to your favorite banker about a wealth management adviser. They could have a long list of connections you’re unaware of otherwise. Talk to friends and family about their experiences too. A family friend could be the right adviser for you. There are a few online review outlets, but it’s better to have a firsthand recommendation when it comes to wealth management. Your money is important to lifelong comfort. [Read more…]

Should You Borrow To Invest?

borrow to invest

borrow to investWith interest rates so low you might be very tempted to borrow money inexpensively and invest that cash for a higher return. When I say “invest” I’m not really including the idea of borrowing money to buy a home. I’m talking about borrowing money for investment purposes only.

In some cases, this can really be a shrewd move but in other situations it can lead you to a world of pain. How do you determine if it makes sense to take on debt to invest or not?

On the face of it, you might think that this is a simple math question; how much will it cost you to borrow the money vs how much will you earn? While these two questions are indeed central to the decision, there are at least 4 other questions you must ask:

Are Your Costs Fixed?

This is a pretty easy question to answer. When you borrow money the agreement typically spells out the rate being charges and whether or not it is fixed or variable. Just make sure you understand this and all the terms. When is the loan due? Is there a pre-payment penalty? Can the rate adjust up or down? Based on what? How often?

In order to really understand what you are getting into, it’s important to be clear on all these issues.

How Certain Are Your Returns?

If you are investing in mutual funds or stocks don’t kid yourself. There is no way to know what the returns are going to be. You might have be considering a fund or stock with a wonderful track record or story – but there is no way to know what that investment is going to return. [Read more…]

Carnival of Financial Planning – Time Is Running Out Edtion

pulling out hair

pulling out hairWelcome to the Carnival of Financial Planning – Time Is Running Out Edition! I chose this theme for the carnival because I heard a report on the news that close to 50% of people aren’t done with their holiday shopping yet. Not to brag, but I got mine done weeks ago! I also hears a report that retailers are guaranteeing delivery of your online purchases as long as you order by December 20th. My question is, how can they guarantee it when it is out of their control?

If you get your package on time, they win as they kept their promise and you shop there again. If you don’t get your package on time, the retailer blames UPS/FedEx/USPS and you do too.

Anyways, in between the hustle and bustle of shopping and wrapping, take some time to remember where you want to go financially in the weeks, months and years ahead. Here are some great blog posts that can help with that.

BUDGETING AND ECONOMICS

Maria @ The Money Principle writes Get Your Debt, Before Your Debt Gets You: the six rules of debt busting – Yesterday I read the story of a guy who took loads of pills and booze trying to kill himself because of debt.

Justin @ Edward Antrobus writes 6 Ways Shoppers are Deceived! – Brands and advertisers use specific marketing tactics to convince shoppers to make purchases There are some tactics that they use that, while not illegal, border on being unethical.

Katie @ IRA Basics writes 4 IRA Withdrawals that Actually Make Sense – Withdrawing funds from a traditional IRA before a person turns 59 ½ usually means that they’re going to pay a lot of taxes and penalties.

Amy @ Money Mishaps writes These are the Biggest Money Mistakes Couples Make When Divorcing – When people get divorced, it’s the spouse who hasn’t had a whole lot of experience with the family’s finances that often ends up on the short end of the stick.

Jay @ Daily Fuel Economy Tip writes How to Save on Gas – Uncommon Ways – I will describe a few less common ways you can save on gas – I hope you will find them useful.

Daniel @ Make Money Make Cents writes The Expenses of Buying and Owning a Home – From finding the perfect mortgage with the appropriate fees, to the year round upkeep and maintenance, this investment requires a lot of time and capital.

Brock Kernan @ Cleverdude writes Dear Garbage Company: I’m Moving On – My garbage company offered to keep my rates the same for 2 years, so how did my bill go up by 30%?

Jeremy @ Modest Money writes 3 Habits of the Highly Effective Blogger – You aren’t born a successful blogger. People with successful blogs are an odd breed. A lot of us aren’t writers by trade, and many of us have just stumbled into the niche we inhabit

CAREER AND INCOME

Kayla @ Shoeaholic No More writes Trying Out Full Time Freelancing – Last week I had the opportunity to test out what it would be like if I were a full-time freelancer, and it was awesome!

Jon @ Penny Thots writes How To Make Money With Photography – You love taking pictures. Going out and seeing the world through a lens provides you with happiness and relaxation. While many enjoy photography just for the pleasure and joy that it brings, others are interested in turning their hobby into a side income.

INVESTING AND SAVING

Little House @ Little House in the Valley writes There’s No Time Like the Present to Start Investing – The best time to start investing is 20 years ago. The second best time to start investing is today. There are plenty of other ways you can make sure you have enough for retirement, and maybe a little extra to enjoy now.

Matt @ Budget Snob writes Investing Doesn’t Take Genius Intelligence, Just Common Sense – A quote that’s attributed to Albert Einstein goes something like this: “Insanity is doing the same thing over and over and expecting different results.”

Hadley @ Epic Finances writes Stock Investing Myths and Truths Part 4 of 4 – Even though there’s plenty of information about what works and what doesn’t when it comes to investing in the stock market, many myths still refuse to die.

RETIREMENT AND TAXATION

Michael Kitces @ Nerd’s Eye View writes Tax Extenders Reinstated Temporarily, But ABLE Act Of 2014 Will Permanently Change 529 Plan Landscape For Special Needs Beneficiaries – Late last night, the Senate passed H.R. 5771, known as the Tax Increase Prevention Act of 2014 or more simply as the “Tax Extenders” legislation.

The Round Table – December 14, 2014

wood round table

wood round tableI hope everyone had a great Thanksgiving and is getting ready for the holidays! We had an awesome Thanksgiving and just decorated our house for Christmas this weekend. My shopping is just about done too. I took a few hours on Cyber Monday to buy all of my gifts. Was it me or were this year’s Black Friday and cyber Monday deals crap?

I am not one to go out shopping for gifts on Black Friday, I instead look for deals that I can resell for a higher price. It felt like all of the “good deals” were on products made by companies I’ve never heard of before. And for Cyber Monday, the “deals” I found were free shipping on orders of $100 or more. Wow, what a deal (end sarcasm).

Ir seems as though the deals rotate from year to year. Last year was a great year for finding deals. Two years ago, not so much. Hopefully next year is better.

Anyways, the year end is upon and that means 1,000’s of articles about goal setting and New Year’s resolutions. I am putting my foot down and telling you now I will not be writing about goals come January. At this point, it just feels like every article is the same thing just in a different voice.

Enough about all that. You came here to find some awesome posts from other personal finance bloggers. Here are the posts I’ve found to be the best while surfing the web recently.

Great Blog Posts from Other Bloggers

The Power of Asking at Bare Budget Guy
802 Reasons Why cash Is More Thoughtful Than Gift Cards at Len Penzo
Are The Experts Killing Our Savings Potential at Blonde on a Budget

Posts Money Smart Guides Wrote for Other Blogs

How To Make Money With Photography at Penny Thots
How The Long Road To Building Self-Confidence Got Me Out of Debt at Ready For Zero

[Photo Credit: Wicker Paradise]