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.

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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…]

Book Review: Live It Up Without Outliving Your Money

book review

book reviewIt has been some time since I’ve done a book review here. With that said, today I am reviewing Live It Up Without Outliving Your Money by Paul Merriman. I’ll just tell you from the start that this is a definite must read.

Live It Up Without Outliving Your Money Summary

The book itself teaches its readers how to build a perfect portfolio for their situation. Mr. Merriman has even built recommended portfolios for you to use as well. These portfolios are built off of funds from Vanguard, T. Rowe Price, Fidelity, and Schwab. You can view his website to find all of his sample portfolio’s, or save yourself the time and check out my model portfolios which has many of the elements that Merriman talks about.

Getting more detailed, the book starts off with the first few chapters talking about investment philosophy and what makes some investors successful and others unsuccessful, mainly the two biggest enemies that most overlook: fund expenses and taxes. He breaks both down showing readers why you need to take these into account when building a portfolio and why you are crazy if you ignore them. (I also talk more about fees in this post.)

From there the book builds a portfolio over the next few chapters. Each chapter looks at a specific part of the portfolio and shows you why you need to invest in certain asset classes.

The book concludes with how to live on the money in your investment portfolio.

My Take On Live It Up Without Outliving Your Money

Aside from the overall content, the one thing I really enjoyed about the book is that it is outlined in a very useful fashion: Each chapter has what I call “a short summary”. This short summary provides you with a good brief overview of the chapter topic. In essence, you could just read these short summaries and be done with the book. But the chapters themselves go into excellent detail.

Another thing I enjoyed was how all of the chapters were smartly laid out, with each one building perfectly from the last. While you can jump around, it is best to read from beginning to end.

Other things I enjoyed about this book:

  • Mr. Merriman’s writing style is great – not too complex for the non-investor but enough meat for the person that has been investing for some time.
  • The chapters are short, which shows he does not use a lot of filler. In fact, most chapters are just 10 pages long. This makes it a great book to read just before bed.
  • There are text boxes scattered throughout the book that go into greater detail for those looking for more. I like how it is up to the reader to dive into this information as opposed to the books where the author simply assumes everyone wants the added information.

Final Thoughts

While he provides sound advice, what I enjoyed most out of Live It Up Without Outliving Your Money was the fact that anyone can pick it up, read it over a weekend, and set up his or her ideal portfolio. The book doesn’t weigh you down with overly complex financial terms or statistics. It is presented in a straight forward manner that is easy to understand. I highly recommend this book to both the beginning and seasoned investor and have added it to my bookstore. There you can find other books I reviewed and a link to Amazon to buy the books.

[Photo Credit: Enokson]

Why Life Insurance Is Not A Good Savings Plan

life insurance poor savings

life insurance poor savingsIt’s been a pretty popular idea to use a life insurance policy as a savings plan. The money is always there to withdraw, right? However, the following five reasons are all why life insurance is not a good savings plan. In many cases life insurance is important to have and with today’s quote websites there is no reason not to look into it, but you need to consider these five important points.

The Investment May Not Produce Great Results

Many life insurance policies are promoting their savings potential and talk about the remarkable investment turnarounds. However, these are more optimistic than anything. The investment may not produce the great results you need for this to work as a good savings plan.

In order to get the savings amount you’ll need for college or retirement planning, you may need to make a larger premium payment than originally advertised.

High Management Fees

While some savings plans may have a small monthly fee, most do not have a management fee. However, with a life insurance policy that makes investments for savings, the management fees could outweigh your returns. [Read more…]

The Only Tip You Need For Retirement Saving Success

retirement success

retirement successWe suck at saving for retirement. The average 50 year old has $43,797 saved for retirement. I hate to break it, but that is just not going to cut it. With the fact that most of us have such a hard time saving for retirement, we need to come up with a way to make it more fun or enjoyable so that people start actually saving.

Let’s look into the mind of a typical person. They say to themselves, “I should probably start saving for retirement.” The a commercial comes on TV for the new iPhone and drooling ensues. By the time the commercial is over, they say to themselves, “what was I going to do again? Oh well, that new iPhone looks sweet!”

I’m not trying to pick on people, but we have a short attention span. That and companies spend millions every year to better understand how we think and react. They then use this against us so we fulfill a short-term need instead of a long-term need.

If the above example doesn’t describe you, then maybe this one does:

When you think of saving for retirement, you say, why should I save a bunch of money when I might not even be around to enjoy. YOLO people. YOLO.

In either of the examples I presented there is one thing true about both of them: we are not good at conceptualizing the long-term. So, in order to save for retirement, we need to re-wire our brains. Don’t worry, it won’t hurt.
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The Round Table – November 23, 2014

Round TableIt’s been a few weeks since I posted my Round Table post! As usual, I’ve been all sorts of busy. We got our new carpet installed a couple weeks ago and the entire upstairs looks 100% better. Then last weekend we headed up to the Finger Lakes region to celebrate our 1 yr anniversary. It was low key this weekend, but with Thanksgiving later this week, we’ll be on the road again!

The good news is that it is supposed to be warm tomorrow so I might get to sneak out for a final round of golf this season!

One last note, I along with some other bloggers are running a giveaway where the winner gets 15 shares of Apple stock! Even the 2nd and 3rd place winners get Apple stock. Here is the link to enter. Be sure to spread the word to others who would be interested in getting some apple stock!

Below are some great blog posts I ran across while scouring the web this week. I hope you find them as interesting as I did.

Great Blog Posts from Other Bloggers

How To Be An Office Rockstar From Day One at See Debt Run
8 Things To Stop Being Afraid Of So You Can Be Rich, Happy And Successful at Making Sense of Cents
Take These 7 Steps And Watch Your Income Grow at The Money Principle
Why Warren Buffett Is My Money Mentor at The Frugal Model [Read more…]

What Outrageous Fees Are You Paying?

Value of Investments

outrageous feesIn today’s business world, profit is more important than ever. Whereas in the past most businesses would do the right thing just to keep a customer, today many companies are more concerned with milking every penny out of the customer. How do I know this? Just look at the fees various companies are charging you.

Outrageous Fees You’re Being Charged

Here are a handful of various fees I’ve encountered recently. Sadly, they are all too common:

Airline Change Fee: Did you know it costs you around $150 to change your plane ticket? How crazy is that? I have plans to fly down to Florida to see my niece and sister next month. We just found out my sister’s husband might be getting a new job and they may need to relocate, which puts my trip down there in question.

I called the airline I am booked to fly on to see if I could go down earlier. The woman was super nice and told me “of course you can”. They she quickly added “it’ll cost you $150”. I nearly fainted!

Using A Bank Teller: How crazy is this fee? If you go to the bank and want a human being to handle your deposit or withdrawal, it is going to cost you. Granted not all banks are using this fee, but why do I have to pay to see a teller? Isn’t it their job to wait on customers? (As a quick aside, if any bank tellers are reading this, I would be concerned for job safety. This sounds like a way to boost profit, err, cut costs by letting you go.)

Airline Baggage Fee: I hate to pick on the airlines, but it is too easy. At first, this fee was charged to us because of the high gas prices, or so the airlines told us. Here we are, almost 10 years after gas prices first skyrocketed up and we are still being charged this fee. Interestingly, gas prices have come down while this fee is still here.
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How To Save On Taxes The Way The Wealthy Do

how to save on taxes

how to save on taxesThe following contribution is from The Money Template, a personal finance blog exploring all things related to wealth and well-being.

Taxes are simply one of those things where no matter how much you fight them they never seem to go away. That is … unless you know a few tricks on how to get around having to pay more than your fair share.

Believe it or not, this is actually one of the contributing reasons why wealthy people stay wealthy. Even though the tax code appears to be written in such a way that you should owe more money the more you make, this is generally not the case. In fact it was famously revealed in the 2012 presidential election that millionaire republican candidate Mitt Romney was paying an effective 14% tax rate. Are YOU enjoying a nice 14% tax rate?

Similar to Romney’s case, the trick in knowing how to save on taxes is learning how to use legal tax incentives to your advantage. Though you may think this is something that is only reserved for the ultra-rich, the reality is that a lot of these same techniques can be applied to your own situation with the aid of financial planners and accountants who are familiar with the tax laws.

Here are a few you can start using now:

7 Strategies for How to Save on Taxes:

1)  Retirement Accounts:

Contributing to your employer-sponsored retirement funds is one of the simplest ways to take advantage of tax-sheltering. With these types of programs the contribution is taken out of your gross pay, meaning that it is no longer considered to be taxable income. Your regular income taxes are calculated on the total amount that is left over. The more money you defer to your retirement plan, the less money there is to be taxed! The IRS will allow you to defer up to $18,000 per year to your 401k plan starting in 2015. [Read more…]