5 Things To Do When Approaching Retirement

approaching retirement cake

approaching retirement cakeI recently read an article on the Time website about 5 things you need to do when you are within 10 years of retirement. Overall, I thought the article was good, as it covered a lot of the things you should think about as you near retirement. In fact, it included one thing that I think most people often overlook. With that said, all of the items on the to do list should not be ignored until you are approaching retirement. So what are these 5 things? I list them below and then go into more detail as well as action steps you should take to be in the best financial shape possible as you are approaching retirement.

  • See if you’re saving enough
  • Stagger retirement with spouse
  • Don’t quit on stocks
  • Do mortgage math
  • Make friends with co-workers

5 To Do’s When Approaching Retirement

Are You Saving Enough?

When it comes to investing, time is your best friend. For this reason, you shouldn’t wait until you are approaching retirement to see if you are on track with your savings amount. You need to do this throughout your working years. [Read more…]

Finding The Right Online Broker For You

right online broker

right online brokerWe all have different needs in life. This is especially true when it comes to investing. Some of us are index investors, while others are dividend investors. Some are scared to invest and therefore need more hand-holding, while others are able to do things on their own. When I created my online broker comparison chart, I did so to help you find the right online broker for you.

What I didn’t realize is that many of you would still have questions. This is why I am writing this post. While I won’t be able to specifically tell you which online broker you should choose to invest with, I can give you some guidance on which ones to consider and which ones to steer clear from. So, below I highlight a few different investors, and where each of these people should look when trying to figure out which is the right online broker to invest their money with.

The Right Online Broker That Meets Your Needs

For The Newbie

If you are just starting out investing, you have a ton of options. It really comes down to your goals and how you feel about investing. [Read more…]

A Reader Writes: Financial Advice for 20 Somethings

financial advice for 20 somethings

financial advice for 20 somethingsI received the following email recently from a reader who needs some help. I post it as I feel the question is common for many recent grads and I can talk about financial advice for 20 somethings:

Hi,

I just graduated college and received a job offer from a great company. I’ll be making $40,000 to start. I have no problems budgeting, as I have lived off campus in college since sophomore year. The concerns I have are my retirement plan, health insurance, and saving money for a variety of things (trips, house, friends weddings). Any suggestions?

First off, congratulations on finishing school and landing a job. Your email didn’t go into great detail, so some of the things I will suggest may not apply.

Financial Advice for 20 Somethings: Retirement

First, Your 401k Plan

To begin, find out if your company matches on the 401k plan. They may match anywhere between 3-5%. Whatever the match is, contribute that amount. When it comes to investment selections, look for a fund that invests in the market as a whole. An S&P 500 index fund or a total stock market fund would be ideal. If those are not available, look at a large cap stock fund.

If you are comfortable with a little more risk (and you can be since you won’t need this money for 40 plus years), look at small cap stock fund. This fund will be a little more risky, but since you are just starting out, you can afford to take the risk. Always remember, the sooner you start saving for your retirement, the better.

One note about the above: pay attention to the fund expense ratio of the mutual funds being offered. The higher the fee, the more it costs you. There is no relationship between a higher fee and a better performing fund. In many cases, the opposite is true – lower fee funds tend to perform better since they are trying to match the return of the market.

At the end of the day, the fees you pay for a large cap stock fund should be at or below 0.50% and for a small cap stock fund, at or below 0.75%. To understand more about how fees effect your returns, I highly encourage you to read this post. [Read more…]

5 Investment Tips From Warren Buffett

warren buffett investment tips

warren buffett investment tipsWarren Buffett, CEO of Berkshire Hathaway, investing legend, and billionaire, released a letter to his shareholders in 2014 that contained some terrific investment advice. Whether you’re a novice investor or a pro, the Sage of Omaha has advice that applies to you. Below are 5 great investment tips from the man himself.

Warren Buffett’s Best Investment Tips

1. Recognize Your Limitations

One of the toughest lessons a leader has to learn is when to ask for support. If no support is available, leaders should stick with what they know will succeed. Buffett has the same advice for investors that he offers to future business leaders: Recognize your limitations.

“You don’t need to be an expert in order to achieve satisfactory investment returns,” Buffett told his shareholders. “But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well.” [Read more…]

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…]

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…]