VP Ricky Smith retires from Sanofi after 44 years

After 44 years, lifelong Poconos resident Ricky D. Smith is retiring on June 30 from Sanofi Pasteur.“I don’t know what I will miss the most, but I’m sure everyone around me will be in for a surprise,” said Smith, vice president of Strategic Programs at the multinational pharmaceutical company in Swiftwater.A Pocono Mountain High School graduate who earned a Bachelor of Arts and MBA degrees from Keystone College and Wilkes University, Smith started [...]

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Sanofi Pasteur VP retires after 44-year career

After 44 years, lifelong Pocono resident Ricky D. Smith is retiring on June 30 from Sanofi Pasteur.“I don’t know what I will miss the most, but I’m sure everyone around me will be in for a surprise,” said Smith, vice president of Strategic Programs at the multinational pharmaceutical company in Swiftwater.A Pocono Mountain High School graduate who earned a Bachelor of Arts and MBA degrees from Keystone College and Wilkes University, Smith started his [...]

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You Work Hard for Your Money. If You Don’t Do This, You’re Wasting It

Saving money is all well and good in theory.

It’s pretty hard to argue having more cash in your pocket could ever be a bad thing.

But what are you saving for? After all, money is just a tool. If you don’t have solid financial goals, all those hoarded pennies might end up floating in limbo when they could be put to good use.

Figuring out where your money should go might seem daunting, but it’s actually a lot of fun.

You get to analyze your own priorities and decide exactly what you think you should do with your hard-earned cash.

Talk about adulting, right?

But to make the most of your money, it’s a good idea to follow a few best practices while setting your goals.

After all, even if something seems like it’s exactly what you want right now (shut up and take almost $300 of my money!), it might not be in future-you’s best interest. And you’re playing the long game… that’s why they’re called goals!

Setting Financial Goals 101

To keep yourself from deciding your financial goals are “buy the coolest toys and cars, get deeply into debt and watch my FICO score plummet” — all super easy to do — we’ve compiled this guide.

It’ll help you set goals and create smart priorities for your money.

That way, however you decide to spend your truly discretionary income, you won’t screw over the 10-years-from-now version of yourself looking anxiously over his or her shoulder.

First Things First: Where’s the Money?

You can’t decide on your financial goals if you don’t know how much money you have or where it’s going.

And if you’re operating without a budget, it can be easy to run out of money well before you run out of expenses — even if you know exactly how much is on your paycheck.

So sit down and take a good, hard look at all of your financial info.

There are a ton of great digital apps to help you do this, like Mint or You Need a Budget, but it can be as simple as a spreadsheet — or even a good, old-fashioned piece of paper.

First, figure out how much money you have. It might be in checking or savings accounts, including longer-term accounts like IRAs. Or, it might be wrapped up in investments or physical assets, like your paid-off car.

Then, assess any debts you may have — do you keep a revolving credit card balance or pay your mortgage each month? Are your student loans still hanging around?

Take the full amount of money you owe and subtract it from the total amount you have, which you discovered in step one. The difference between the two is your net worth.

That’s the total amount of money you have to your name.

If it seems like a lot, cool. Hang tight and don’t let it burn a hole in your pocket. We’re not done yet.

If it seems like… not a lot, well, you’re about to fix that. Keep reading.

Once you’ve learned your net worth, you need to start thinking about a working budget.

This will essentially be a document with your total monthly income at the top and a list of all the expenses you need to pay for every month.

And I do mean all of the expenses — that $4.99 recurring monthly payment for your student-discounted Spotify account definitely counts and should show up.

Your expenses probably include rent, electricity, cable or internet, a cell phone plan, various insurance policies, groceries, gas and transportation, and other looser categories like charitable giving, entertainment and travel.

It’ll depend on your individual case — for instance, I totally have “wine” as a budget line-item.

See? It’s all about priorities.

Start by listing how much you actually spent in each category last month. Subtract your total expenses from your total income. The difference should be equal to the amount of money left sitting in your bank account at month’s end.

It’s also the money you can use toward your longer-term financial goals.

Want the number to be bigger? Go back through your budget and figure out where you can afford to make cuts. Maybe you can ditch the cable bill and settle for Netflix alone, or knock junk food out of your grocery cart to make for a healthier body and a fuller wallet.

Set the numbers you’re willing to spend in each category and stick to them.

Congratulations. You’re in control of your money.

Now you can figure out exactly what you want to do with it.

Setting the Foundation

Before you run off to the cool-expensive-stuff store, hold on a second.

Your very first monetary goals should be to get debt-free and build an emergency fund.

These are the first two orders of business, but it’s up to you to decide which order you want to accomplish them.

Many experts suggest making sure you have an emergency fund in place before aggressively going after your debt.

But if you’re hemorrhaging money on sky-high interest charges, you might not have very much expendable cash to put toward your savings.

And that means you’ll be paying the interest for a lot longer — and a lot more of it — if you wait to pay it down until you have a solid emergency fund saved up.

If you can, try to strike a balance between the two. Make more than the minimum payments on your loans, but also find some money to sock away and not touch, even if it’s only $25 of each paycheck.

You can make the saving process a lot easier by automating it with a tool like Digit. Or you can have money from each paycheck automatically sent to a separate account you won’t touch.

You also get to decide the size of your emergency fund, but a good rule of thumb is to accumulate three to six times the total of your monthly living expenses. Good thing your budget’s already set up so you know exactly what that number is, right?

You might try to get away with a smaller emergency fund — even $1,000 is a better cushion than nothing. But if you lose your job, you still need to be able to eat and make rent. Here’s a calculator to help you figure out a safe figure.

Now, let’s move on to repaying debt. Why’s it so important, anyway?

Because you’re hemorrhaging money on interest charges you could be applying toward your #moneygoals instead.

So even though getting debt-free seems like a big expense and sacrifice right now, you’re doing yourself a huge financial favor in the long run.

There’s lots of great information out there about how to repay debt, but it’s really a pretty simple operation: You need to put every single penny you can spare toward your debts until they disappear.

And you should do it in descending order of interest rate.

For example, if you have a $1,500 revolving balance on a credit card with a 20% APR, it gets priority over your $14,000, 5% interest car loan — even though the second number is so much bigger.

Make your own list and (ideally) don’t spend any of your spare money on anything but paying them off until the number after every account reads “$0.” Trust me, how awesome that moment feels will be well worth the effort.

As a bonus, if your credit score could be better, repaying revolving debt will also help you repair it — just in case some of your goals (like buying a home) depend upon your credit report not sucking.

Retirement Plan

All right, you’re all set in case of an emergency and you’re living debt-free.

Congratulations! We’re almost done with the hard part, I promise.

But there’s one more very important financial goal you most definitely want to keep in mind: retirement.

Did you know almost half of Americans have absolutely nothing saved so they can one day clock out for the very last time?

And the trouble isn’t brand new: We’ve been bad enough at saving for retirement over the past few decades that 20% of today’s seniors can’t afford to retire.

If you ever want to stop working, you need to save up the money you’ll use for your living expenses.

And you need to start now, while compound interest is still on your side. The younger you are, the more time you have to watch those pennies grow. Look how little a 21-year-old need to set aside to retire wealthy!

If your job offers a 401(k) plan, take advantage of it — especially if they match your contributions! Trust me, the sting of losing a percentage of your paycheck will hurt way less than having to work into your golden years.

Ideally, you’ll want to find other ways to save for retirement, too. Look into Roth IRAs and figure out how much you need to contribute to meet your retirement goals.

Future-You will thank you. Heartily. From a hammock.

Everything Else

All right, got everything in order? Amazing!

You’re in awesome financial shape — and you’ve made it to the fun part of this post.

Consider the funds you have left — and will continue to earn — after taking care of all the financial business above. Now, think: What do you want to do with your money?

What experiences or things can your money buy to significantly increase your quality of life and happiness?

You might plan to travel more, take time off work to spend with family or drive the hottest new Porsche.

Maybe you want to have a six-course meal at the finest restaurant in the world or work your way through an extensive list of exotic and expensive wines. (OK, I’ll stop projecting.)

No matter your goals, it’s helpful to categorize them by how long they’ll take.

Make a list of the goals you want to achieve with your money and which category they fall into. Then you can figure out how to prioritize your savings for each objective.

Here’s my list, as an example:

• Short-term: Save up spending money for an upcoming trip overseas. The trip is in three months.

• Medium-term: Pay off my car, or sell it — and its onerous loan — and buy a beater I can own free and clear. I want to accomplish this before the end of next year.

• Long-term: Buy a house I can use as a home base and increase my income by renting it out while I travel. This will probably take me all of my 20s.

By writing down my goals and approximately how long I can expect it will take to achieve each, I can figure out what research I need to do and how aggressively I need to plan for each one.

It also offers me the opportunity to see what I prioritize — and to revise those priorities if I see fit.

I’m happy to see my goals revolve around gaining new experiences and increasing my financial freedom, rather than buying fancy-but-expendable new stuff.

You get to figure out what makes you happy to spend your money on… which is figuring out what kind of person you want to be. 

Told you this was gonna be fun.

Your Turn: What are your #moneygoals?

Jamie Cattanach (@jamiecattanach) is a staff writer at The Penny Hoarder. Her creative writing has been featured in DMQ Review, Sweet: A Literary Confection and elsewhere. Her main money goal is, obviously, to buy all the wine.

The post You Work Hard for Your Money. If You Don’t Do This, You’re Wasting It appeared first on The Penny Hoarder.

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How to Get Your Child a Free Birthday Call From Dora or the Bubble Guppies

When I was little, I would’ve been super excited to get a call from one of the “Rugrats” (probably Chuckie) or Skeeter from “Doug,” as those were my favorite Nickelodeon characters.

Since this thing called the internet didn’t really exist, alas, my dreams never came true.

But with a little help from their parents, today’s kids can easily get a birthday call from Nick Jr. characters like Dora and the Bubble Guppies.

It’ll even include their name and age — and best of all, it’s totally free.  

How to Get Your Child a Free Nick Jr. Call on Their Birthday

To get a free birthday call for your child, just follow these four steps:

1. Choose Your Character

Visit the Nick Jr. Birthday Club and select your child’s favorite character.

You can choose from Dora, PAW Patrol, Shimmer and Shine, Blaze, Bubble Guppies, Dora and Friends, Peter Rabbit or Wally.

2. Join the Club

It’s free; all you have to do is enter your name and contact information.

3. Personalize Your Call

Enter your child’s name, date of birth and gender.

If your child has an unusual name, they will receive a call personalized with their age — but probably not their name. (If you have time, you can request their name be added.)

In this step, you can also preview the call, which lasts about one minute and includes a few questions for your child to answer.

4. Schedule Your Call

Schedule your child’s birthday call for a specific time and date.

When it’s time, you’ll receive a text reminder, and after clicking a link, a call. Even after your phone rings, the automated message gives you 10 seconds to get your child to the phone.

You can register up to five children to receive birthday calls, and also download party planning tips and free birthday printables from the site.

Say hi to Dora for me!

Your Turn: Do you think your child would enjoy this freebie? Which character will you choose?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

The post How to Get Your Child a Free Birthday Call From Dora or the Bubble Guppies appeared first on The Penny Hoarder.

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Classic, Spicy or Grilled? Get a Free Sandwich From Chick-fil-A This Month

In spite of a college try at healthy living, I’m not shy about my love for Chick-fil-A.

Raised up north, I was mostly unaware of the restaurant until traveling through the Southeast just a few years ago. I thought, It’s just a chicken sandwich, everyone — calm down.

But. You know. I tried it, and I learned better.

So I get a little excited anytime I come across a Chick-fil-A deal — especially when I can get one of those life-changing chicken sandwiches for free.

“Life-changing” — yes, I stand by that adjective. Take a road trip and see for yourself.

How to Get a Free Chick-fil-A Sandwich

Here’s how to get a free sandwich from Chick-fil-A this month:

1. Download the Chick-fil-A app for your iPhone or Android smartphone before June 11. If you already have the app, make sure it’s updated to the latest version to receive the offer.

2. Click on the Chick-fil-A One icon, and sign in with an existing Chick-fil-A One account or create a new one.

That’s it! Once you’re signed in, the freebie should show up in your “available treats” after June 1.

Get your free sandwich by June 30, either by placing your order for pick-up through the app, or by having the cashier scan your app’s QR code when you order in the store.

Now you’re left with the toughest task: Choosing between Chick-fil-A’s classic Chicken Sandwich, Spicy Chicken Sandwich or Grilled Chicken Sandwich.

It’s not easy!

They’re all delicious, so take my advice: Bring some friends, and share. Get all three sandwiches for free, and you won’t have to worry about the difficult decision.

Your Turn: Have you seen any good free food deals lately?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. If you see her eating the kale salad, be advised she’s definitely dreaming about the Spicy Chicken Sandwich.

The post Classic, Spicy or Grilled? Get a Free Sandwich From Chick-fil-A This Month appeared first on The Penny Hoarder.

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Treasury warns Brexit would hit pensions

Marina Gerner

old-womans-hands.jpg

The Treasury has warned that millions of pensioners will be worse off if the UK leaves the European Union.

The Treasury has warned that millions of pensioners will be worse off if the UK leaves the European Union. In a newly released publication, it suggests that Brexit would cause a recession, send stock markets into a downward spiral and stoke up inflation.

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Here’s How This Woman Paid Off $50K in Student Loans in 18 Months

Kelsey Kronmiller had a problem many college grads know too well: How are you supposed to start paying back more than $100,000 in student loans when your first job out of school pays somewhere around $30,000?

Looking back on her early 20s, sharing an apartment with her then-boyfriend, she lamented, “Here I was in this committed relationship, and I realized all the things I ever wanted in life — a wedding, a house, a family — would never happen because of all the debt I was carrying.”

But Kronmiller wasn’t willing to give it all up.

She told John McDermott of Mel Magazine how she paid off $50,000 in student loan debt in just 18 months.

How This Designer Hustled to Pay Off Student Loan Debt

Kronmiller got deep into Dave Ramsey’s “Complete Guide to Money,” and publicly announced her commitment to pay down her debt on her blog in August 2014.

After settling into a new visual design job paying $40,000 the same summer, Kronmiller dramatically cut back on her spending and “started working, like, 500 jobs, because $40,000 a year just wasn’t going to cut it.”

She used You Need a Budget to minimize spending and get a handle on her budget.

But how did she make the extra cash?

Well, it helps to have many talents.

Kronmiller worked overnight pet-sitting gigs for about 12 nights a month, which brought in an extra $10,000 to $15,000.

She also made $12,000 in just three months selling handmade ornaments on Etsy.

She picked up freelance web design gigs, too, for an extra $3,000-$5,000 per year.

“All this time, I was putting all my extra money toward my debt,” Kronmiller told Mel.

“Prior to the life change, I had only been making minimum payments, just paying interest and putting nothing toward the principal.”

How She’s Designing a Debt-Free Future

Since last summer, Kronmiller has cut back on her side gigs.

She took a $70,000 job at the Boston Globe in August 2015, which has allowed her to scale back while still making considerable debt payments.

She’s conquered the $50,000 student loan in her name, and is now focusing on paying down the $68,000 she borrowed from her parents for college.

Head over to Mel Magazine to read Kronmiller’s whole story — and then start figuring out how to snowball your own debt payments.

Your Turn: What do you think of this debt-reduction method? Which side gigs would you take up to pay off debt faster?

Disclosure: Here’s a toast to the affiliate links in this post. May we all be just a little richer today.

Lisa Rowan is a writer, editor and podcaster living in Washington, D.C.

The post Here’s How This Woman Paid Off $50K in Student Loans in 18 Months appeared first on The Penny Hoarder.

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Can a Single Index Card Sum Up Your Personal Finances?

Several years ago, I wrote a really popular article entitled Everything You Ever Really Needed to Know About Finance on the Back of Five Business Cards. It was shared on countless social media feeds and resulted in a bunch of media interviews and even some discussion about writing a book with that framework (I couldn’t make a full book-length manuscript work, so instead I just gave away the “book” that I was working on (it’s not exactly book length, but it is fairly long).

A few years later, a similar idea began to be spread around: a 4″ by 6″ index card that contained “all of the financial advice you’ll ever need.” The card was written as a collaboration between Harold Pollack and Helaine Olen and it, too, was passed around many different sites and became quite popular. They also went on to write a book around that idea, The Index Card.

I picked up that book recently from my wonderful local library and gave it a read. The book was filled with a lot of good personal finance advice, as I expected, but the one interesting part I noticed was that there was a perforated index card at the back bound into the book – you could tear it out if you wanted, but this library copy still had it intact.

The index card was a revision of their original index card. This new card contained ten rules that supposedly contained all you need to know about personal finance – the rules happened to match up with the chapters in the book.

Reading through their rules, I realized that I happened to completely agree with parts of them, somewhat agree with other parts, and, well… other parts left me shrugging my shoulders. I thought it might be interesting to walk through their ten rules and, at the same time, list what ten rules I would put on such an index card.

Let’s get to it!

Their Rule #1 – Strive to Save 10% to 20% of Your Income

Given that we live in a country where 76% of Americans live paycheck to paycheck, this is a great little rule to include on this card. After all, any significant increase in savings is going to be a good thing for almost anyone in terms of their long-term financial future.

The thing is, though, if someone reads this book at age fifty and hasn’t started saving a dime yet, saving only 10% of their income per year is simply not going to get them to adequate retirement savings. They’ll be able to get by, but that savings will end up just being a small addition to their Social Security benefits. It will simply be a very tight existence.

My Rule #1 – Save At Least 20% of Your Income By Cutting Your Worst Expenses

My advice to almost everyone is to save as much as you possibly can, no matter your age. People always want a number as a benchmark, though, so my suggestion is that if you’re not saving at least 20% of your income each year, you’re probably not saving enough for the things the future has in store for you.

The reality is this: you are more equipped with natural gifts right now in terms of being able to shoulder the load and save more than you will be at almost any other point in your life. Yes, even busy parents with lots of children. Why? For starters, you’re almost assuredly in better shape right now than you will be at most later points in your life. You have more time ahead of you right now than you will have at any other point in your life. Your health and your energy and your time are your most valuable resources and you have them in an abundance right now, an abundance that won’t last.

Use that abundance. Don’t let it slip by. Don’t waste it.

The problem that many people have with this advice is that they’ve backed themselves into a corner with the debts they’ve taken on and the spending habits that they have. They’re barely making ends meet and they simply can’t believe someone would seriously suggest that they put away 20% of their income. If they pull 20% out of their income given their current routines, they’d be in a disastrous situation very quickly.

The thing is, most people waste a lot of their income. I’d go so far as to say everyone, but there are people with a very low income who manage to stretch very little into a stable household who likely don’t waste very much money.

Here’s a simple exercise: go through your bank statements and credit card statements for the last few months and mark each transaction with a + sign and a – sign. Write a + by every single transaction that actually covered a genuine need in your life. Write a – sign by all of the others. Then, add up all of the + transactions and all of the – transactions. I’m willing to bet that the – transactions add up to more than 20% of your spending.

Now, how much of those “-” expenses were actually worthwhile and brought value into your life? This is a situation where the 80/20 rule pops up – 80% of the actual enjoyment you got out of those purchases came from just 20% of those purchases. The other 80%? It’s largely wasted on forgettable things.

Figure out how to cut out those 80% of expenses that are forgettable and you’ll easily have your 20% of your income for savings.

Whew. Let’s move on.

Their Rule #2 – Pay Your Credit Card Balance in Full Every Month

Let’s see… what do I think of this one?

My Rule #2 – Pay Your Credit Card Balance in Full Every Month

Of the ten rules, this is the one I totally agree with. If you have credit cards and use them for regular purchases – which I do – pay off the balance in full every month.

The reason is simple: credit card interest rates are painful. If you pay off the full balance each month, you’re still within the grace period on those purchases so they haven’t started accumulating interest. If you only pay the minimum, the rest of the balance is going to start building interest, and credit card interest is nothing more than money being picked out of your pocket.

Pay off your full credit card balance each month if you don’t want that money just picked out of your pocket. If you find that difficult to do, then sit down the credit cards for a while and learn how to live solely out of your checking account. Once you’ve mastered that, you’ll find that a credit card is just a very effective purchasing tool.

Their Rule #3 – Max Out Your 401(k) and Other Tax-Advantaged Savings Accounts

Who on earth is this advice written for?

In a given year, you can contribute $18,000 to a 401(k), $5,500 to an IRA, and contributions to a 529 college savings plan are basically limitless (though there is a $14,000 gift tax exclusion). The average American family, with two kids, would then be contributing $36,000 to 401(k) plans, $11,000 to IRAs, and $28,000 to 529 plans – and that’s just those three accounts.

The average American family only earns about $60,000 a year pre-tax. If you actually “maxed out your 401(k) and other tax-advantaged savings accounts,” you’d be contributing every dime of your salary and still falling short.

This advice isn’t being written for the average American family. It’s being written for someone who’s in at least the top 10% of income earners and probably closer to the top 1% of income earners. It’s not useful advice for most Americans.

My Rule #3 – Save 2% of Your Income for Retirement for Every 5 Years You Didn’t Save

Here’s a much better approach: save a percentage of your income for retirement and don’t sweat a 529 plan unless you’re actually hitting your caps on retirement plan contributions.

My basic rule for how much to contribute to retirement plans is described above. Just save 2% of your income for every 5 years of your life that you didn’t save – and round up, not down.

So, let’s say you’re 23 and you’re just now starting to save for retirement. If you take 23 and divide it by 5, you get 4.6. Multiply that by 2% and you get 9.2% – and if you follow my advice, you round that up to 10%. If you’re making $40,000 a year, then that means you’re shooting to save $4,000 a year overall.

What if you’re older than that? If you’re older than that, you need to contribute more to earn a stable retirement. Let’s say you’re 37 and you’ve never saved a dime before this. Take 37 and divide it by 5, giving you 7.4. Multiply that by 2% and you get 14.8%, and round that up to 15%. If you’re making $40,000 a year, that means you should be shooting to save $6,000 a year overall.

I’ve found that time and time again this little formula points you right toward a healthy amount to save for retirement. You can go over it if you’d like and you can save for your children’s college education, too, but make this your priority. Your children can always make it through college, but you only have one shot for retirement savings.

Their Rule #4 – Never Buy or Sell Individual Stocks

I agree with this rule, but I think it’s kind of subsumed by the next rule on their list and my own fifth rule, which we’ll get to in a minute.

Individual stocks, in my view, are akin to gambling unless you invest a lot of time doing research (full time job level research) or are investing at a level that gives you direct input into how the company is run through seats on the company board. If neither of those are true, then you shouldn’t be investing in individual stocks.

My Rule #4 – Save in a 401(k) up to Employer Match, Then Max Out Roth IRA

My fourth rule continues the retirement advice from the third rule above. You’re saving some lump sum of money for retirement, but what exactly do you do with it?

First thing: does your employer offer a 401(k) plan (or a similar plan like a 403(b))? If they do, do they offer matching contributions in any way?

If they offer such a plan and offer contributions, all of your retirement contributions should go there first to gobble up as much of the matching money as you can get. Some employers match all of your contribution and if that’s the case all of your contribution should be going into your 401(k). Some employers match up to a certain percentage, and if that’s the case, you should be contributing that full percentage.

What do you do if you don’t have a 401(k) or similar plan at work, or if your employer doesn’t offer one? In that case, you should open up a Roth IRA on your own. It’s easy to open one – not much different than opening a savings account, really. You can do it on the web by finding an investment house that you like and opening a Roth IRA with them (I really like Vanguard, for reasons I’ll explain later).

The vast majority of Americans are eligible for a Roth IRA, so that should be the type of retirement account you choose. When you take money out of that account in retirement, it’s tax free, so if most of your retirement savings is in a Roth IRA, you’re going to be paying very little income tax in retirement between your Roth IRA money and your Social Security money.

Their Rule #5 – Buy Expensive and Well-Diversified Indexed Mutual Funds and ETFs

This is a rule I largely agree with, except that I usually don’t think there’s a reason to buy ETFs unless you’ve got an arrangement to buy them without any fees. Typically, ETFs are bought and sold through traditional stock brokers, which means that you’re paying a “buy” cost each time you buy and a “sell” cost each time you sell them. On the other hand, buying and selling index funds rarely has such fees associated with it. Since there isn’t much you can do with an ETF that you can’t do with an index fund, there’s really no reason to buy them if you’re having to pay an extra fee to do so.

I completely agree with the “well-diversified indexed mutual funds” part, though. An indexed mutual fund is probably the best opportunity out there for an individual investor who doesn’t have the time to study investments all day and doesn’t have enough money to buy voting interest in a company. Essentially, an indexed mutual fund – usually called simply an index fund – is one that operates by a very simple set of rules, like “own a small portion of every publicly traded stock in America.” That means that running the fund itself can easily be fully automated, which means you don’t need many people actually running the fund, which means that the cost is a lot lower.

My Rule #5 – When You Invest, Buy Diverse Index Funds and Hold Them for the Long Haul

So, I’m fully in favor of buying index funds. What do I mean by “diverse,” though? I simply mean that you should never have all of your eggs in one basket. Never own just growth stocks or just value stocks or just stocks from small companies or just stocks from big companies or just stocks from one particular industry. Diversify. The easiest way to do that is to buy into a “total stock market” index fund. Beyond that, it’s also a good idea to invest in other things as well – bonds and real estate for starters. You can buy index funds of those, too.

If you’re just saving for retirement, the easiest way to do all of this at once is to simply buy a “Target Retirement Fund.” At Vanguard – my preferred investing house – their target retirement funds are made up of a mix of other index funds – stocks, bonds, real estate, and other things – that’s geared toward how far away from retirement you are. If you’re far away, the fund has higher risk and higher reward. As you get closer, the risk goes down so that you’re not losing a lot of balance close to retirement – in other words, money starts moving out of stocks and into bonds and even into cash.

Their Rule #6 – Make Your Financial Advisor Commit to the Fiduciary Standard

There are two different standards that different financial professionals have to hold themselves to. One is the “suitability standard,” which means that they simply have to find investments that match the needs of the client. The other is the “fiduciary standard,” which means that they have to put the needs of the client before their own.

Under the “suitability standard,” financial professionals can choose investments that give them a lot of commissions as long as it matches client needs in some way. On the other hand, under the “fiduciary standard,” your advisor has to pick the option that is really the best for you, and there’s a lot of specific guidance and rules in determining that.

You’re going to want an advisor that uses the “fiduciary standard,” but how do you find one? For starters, you should ask whether they commit to that standard. You should also check out their certifications – are they a registered investment advisor? Who are they registered with? Does that group require commitment to that standard? This should be one of the first things you check before signing up with a financial advisor.

On the other hand…

My Rule #6 – Teach Yourself About Finance and You (Usually) Won’t Need an Advisor

For most people, a financial advisor does not do anything that you could not do yourself with just a little bit of self-education. After reading a few books on investments like The Bogleheads’ Guide to Investing, you’ll actually have the knowledge you need to handle most financial situations that arise in life. You won’t need an advisor, and you certainly don’t need their fees in your life. Just do it yourself – that’s what I do.

Now, there are situations that can arise where you might need some help. A challenging inheritance, for example, or an enormous windfall might be situations where you want an advisor. However, those are situations where you’re not hiring someone to run things for you, but simply to help you figure out how to hold the reins yourself.

Even if you’re not willing to do this, you still owe yourself some basic knowledge about personal finance so that you can understand what your advisor is doing. I’ve found that if you put in the effort to learn the basics, it doesn’t take long for you to realize that you can just do this yourself almost as easily and a lot less expensively.

Their Rule #7 – Buy a Home When You’re Ready

What does “ready” mean? It’s a word that means a lot of different things to different people. Does it mean when you’re financially ready? Does it mean when your life is ready for a home?

Here’s my answer to that issue…

My Rule #7 – Buy a Home When It’s More Cost-Effective Than Renting

For me, it all comes down to whether your finances are ready. Just run the numbers for your current financial situation through a good rent versus buy calculator like this one and see what comes up.

You’re going to need to know some information about your situation, particularly the state of your local real estate market (which you can find approximations of on Zillow) and your own taxes. Some of the numbers can definitely be adjusted one way or another quite a bit.

In the end, though, you’ll come up with some results that can tell you pretty clearly whether you should rent or buy, and that comes down to which one is really the most cost-effective in your life.

You’ll notice a few general patterns along the way, though. For example, if you’re not going to live in a place very long, the advantage slides toward renting; if you’re going to be there for a long while, the advantage slides toward buying. It’s that connection between the “personal” and the “finance” that really comes up here.

Their Rule #8 – Insurance – Make Sure You’re Protected

This is another “rule” that’s really vague. That’s because the insurance needs of a family tend to change a lot depending on their income level. The higher your income level, the more sense it makes to get things like long term care insurance and long term disability insurance and umbrella insurance. If you don’t have much to begin with, those types of insurance are less important and make much less sense.

So my approach is a little different…

My Rule #8 – If You’re Married & Considering Kids, Get a 30 Year Term Life Policy for 10x Your Upcoming Salary

The one piece of insurance that I usually recommend for people (beyond the legally mandated ones, like health insurance and auto insurance and homeowners insurance) is a term life insurance policy for themselves if they have a family. I generally tell people that it’s a good idea to get a 30 year term policy as soon as you start considering kids, and if you already have them, you should get a policy with a term length that covers the years until your children are out of the nest (for me, that would be a 20 year policy at this point).

How much should it be for? I’d shoot to replace ten times your current salary, unless you’re in a position where you are very realistically and seriously expecting a significant salary bump in the next few years, in which case I’d base it on that future salary.

Shop around for this policy. If you’re young and healthy, this policy really won’t be all that expensive, since it ends short of when you should reasonably expect to die. The reason for getting it is to help your family in the event of your unexpected death before your children have a chance to grow up.

Their Rule #9 – Do What You Can to Support the Social Safety Net

This felt like a political intrusion into a set of good ideas, so I largely ignored it. It’s a good concept, but it doesn’t help people’s finances in the here and now.

My Rule #9 – Spend Your Spare Time on Skills and Side Gigs

A much better rule for improving your personal finances in the here and now is to spend your spare time trying to increase your income, whether through personal improvement or through building side businesses to directly earn income.

Spending your spare time on skills is a great choice if you have a lot of room for advancement in your main career or you are considering a career switch. In those cases, working to improve the attributes that would make you valuable to different companies is going to be a great investment of your time and energy and pave the way to a brighter financial future for you.

On the other hand, if you’re happy with your career state, a side gig can be a great way to earn more money. Whether that takes the form of a part-time job or a microbusiness that you want to run (like starting a Youtube channel), you can turn some of your extra spare time into additional streams of income that can bolster your situation now and provide support if something goes wrong in your primary career.

Their Rule #10 – Remember This Card

This final rule isn’t really helpful, either. A good summary rule to finish things off is probably more sensible…

My Rule #10 – Spend Less Than You Earn. Always.

This is the fundamental rule of personal finance, in my opinion. No matter how much you earn, you should strive to spend less than that, every month, every year, every decade. If you do that consistently, you’re going to naturally build up savings that will support you in whatever hand life deals to you.

Naturally, there are two main ways of doing that. You can work to “spend less” – being frugal, being smart about what you spend, and so on – and you can “earn more” by building your career or starting a business or getting another job. Ideally, both can be incorporated into your life.

Together, those two factors – spending less and earning more – create a gap between how much you earn and how much you spend. It’s that gap that provides the real foundation for all of these other rules.

Final Thoughts

Don’t get me wrong, the index card advice is largely pretty solid. My only real criticisms of it come down to two things: one, it’s largely written for a much wealthier audience than the average American, and two, even on a 4″ by 6″ card, there’s some fluff.

My approach is more from the perspective of the average American income and even those significantly below that income level, and for all of us, the index card needed a few tweaks. Hopefully you’ll find this advice useful in your own life.

If you do nothing else on the card, do these two things. First, spend less than you earn. Doing that is the key – what you do with the leftover money in terms of saving for the future is just icing on the cake. Second, never stop learning about personal finance, and you can start by reading some of my favorites.

Good luck!

The post Can a Single Index Card Sum Up Your Personal Finances? appeared first on The Simple Dollar.

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10 most popular stories in May 2016

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Make sure you're up to date with all the latest news, tips and guides by checking our 10 most popular stories on Moneywise.co.uk in May 2016.

Make sure you're up to date with all the latest news, tips and guides by checking our 10 most popular stories on Moneywise.co.uk in May 2016.

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How to Invest in Your 20s

If you’re in your 20s, you’re reading this article, and are serious about investing, you rock.

If you actually set out to invest money while you’re in your 20s, and you do it on a regular basis, do you know what your retirement will look like?

In one word: awesome!

Over years, I’ve made some great investments, and some poor ones. Learn from me. I’ve been there done that.

But here’s the scary thing…..

I majored in finance and, even still, upon graduation I knew little about investing.

If it wasn’t for me stumbling into becoming a financial advisor I’m not confident I would have started investing in my 20s.

In fact, many of my friends didn’t.

I kept hearing the same lame excuses “I’ll wait till later” or “I don’t have enough to invest right now” or “I don’t know where to start”.

If you’re reading this post, you can no longer hide behind any of these excuses.

It’s time to get started before regret sucker punches you in the financial gut.

Let’s take a look at how to invest in your 20s, shall we?

Before You Invest in Your 20s

If you’re in your 20s, and you’re wanting to invest, you’re thinking in the right direction.

However, you may have some other financial obstacles to overcome before you start investing. That is, you should overcome certain financial obstacles before you start investing!

I went into some detail regarding my financial planning steps here. But let’s summarize some of the key goals you should accomplish before you start investing your dough.

And hey, if you haven’t accomplished these goals yet, don’t fret. You’re not alone. You’re in your 20s! What do you expect?

Your Freedom Fund

Common financial advice suggests you have an “emergency fund” or a “rainy day fund”.

A freedom fund is essentially the same thing I just want to think of it differently.

Why call it a freedom fund?

Because having cash reserves gives you freedom to take a much needed vacation if you’re overworked and stressed from your job.

It gives you the freedom to look for a new job if you have a horrible boss that doesn’t treat you with respect or value your contributions.

It gives you freedom to move if you hate your home or city and want to press the reset button and try living somewhere.

There’s power in freedom and that’s exactly what a freedom fund offers.

Listen, if you have an emergency, one of the last places you want to take money from to pay for emergency expenses is your investment accounts – especially if they’re in a slump.

When you invest, you should invest for the long-term. Think years. Don’t assume you won’t need money in the next month or two for an emergency.

You know, often emergencies don’t warn folks of their arrival dates. They just happen – and they can happen at the worst possible times.

So, before you begin, get your freedom fund in place. Shoot for eight months worth of expenses.

Debt

This is a biggie. Do you have car loans? Student loans? Homing pigeon loans? Pay them off!

Debt, in many ways, is like the anti-investment with a twist. It’s designed so that you will pay.

It’s not that you might pay. You will pay. Investments go up and down, but debt always digs a hole (at the very least what you owe, and many times with interest).

The good news is that paying off student loans, or car loans, or whatever kind of loan you have is a lot like making an investment with a guaranteed return. You can rest assured that when you pay off some debt, you won’t have to pay interest on that money anymore. Isn’t that beautiful?

Hint: There are some tips later in this article to help you find the cash to accomplish these goals.

Now’s the Time to Invest (No, Really Do)

Once you accomplished the above goals, you have some sound money management skills in place, and you have some money to invest, it’s time to invest, my friend!

And, I ask that you really do. Don’t just read this article and go, “Oh, that’s nice. I’ll get to it some day.” No! Actually invest.

Imagine for a moment you see a shadowy figure on the horizon. They’re making their way to you. You squint. You do a double take. It’s you at age 65.

“Don’t be stupid,” says your future self. “Invest now, while you have time on your hands.”

You see the look of regret written on your wrinkly face. You don’t want to be that person.

Listen to your future self. You need to save for the future. Thankfully, I’m going to show you how.

How to Invest in Your 20s

If you’re just starting out investing, you may not have enough money to invest with an investment advisor face to face. That’s okay. I’m going to show you what to do.

Objective 1: Determine How Much You Need for Retirement

The first objective is to determine how much you need to invest for retirement. There are a variety of factors that go into this equation, including but not limited to:

• Expected income over time
• Expected contributions over time
• Expected tax rates over time
• Expected market returns
• Expected expenses in retirement

The list goes on and on, my friend. If you can afford it, sit down with a financial planner or financial advisor and ask them what they think you should invest on a regular basis. It’s worth it to pay someone to figure out this figure for you.

Objective 2: Figure Out How You Can Save for Retirement

The second objective is to figure out how you can actually save for retirement. It seems obvious, but unless you have some money rolling in, you’re not going to get anywhere when it comes to saving for retirement – well, unless you land an inheritance or win the lottery, but let’s not place our bets there.

When you’re in your 20s, you’re probably not making much money. Perhaps you have a minimum wage job and you’re working on developing your skills for a career. Maybe you’re in your late 20s and have already started your career, but you’re awfully busy and your responsibilities have you living paycheck to paycheck.

Where in the world are you going to find this money for saving for retirement?

Well, there are really only two realistic options: cutting your expenses or raising your income. Let’s explore both.

Cutting Your Expenses

If you’re not on a budget, you’re probably wasting a lot of money. Listen, only millionaires and the like can afford to forgo a budget, and even then they are probably wasting a ton of dough.

So, if you don’t have a budget in place yet, let me give you a few recommendations . . . .

First, take a look at some of the best (and free) online budgeting tools. Experiment with some of them. See what works for you.

Second, take a look at some of the reasons some budgets suck. As you work your newfound budget, make sure you avoid some of these characteristics that make for horrible budgets. You don’t have to learn the hard way if you do a little research to get this right in the first place.

Third, consider doing some tactical budgeting. This is extreme budgeting, and it will help you be more strategic when it comes to cutting expenses and analyzing your situation.

If you have cut your expenses down to the essentials, it’s time to look at raising your income.

Raising Your Income

In order to invest more money for retirement, you might have to raise your income. The beauty about investing in your 20s is that you don’t have to shovel a lot of money toward the future, because of a wonderful thing called “compound interest.”

So remember, earning even just a few hundred dollars extra every month and turning around and investing the money can result in a healthy retirement portfolio down the road.

Here are a few recommendations for raising your income . . . .

First, take a look at some side hobbies that can actually make you money. Many of these can be accomplished in your spare time, and if you already enjoy these hobbies, why not do them and make a little side money at the same time?

Second, discover some passive income ideas to put your earnings on autopilot. Passive investing is a fantastic idea. Why? Because it means you work once and earn forever – well, at least for a long period of time. Many jobs require you to work and get paid, work and get paid. Passive income means work and get paid, get paid, and get paid again.

Third, check out my slew of ideas to make money fast. You know, if you’re in a pinch, you’re going to need to make a lot of money very quickly to start building the foundation you need to invest in your 20s. That’s why I recommend trying out some methods to make money very quickly. Some of them might not be sustainable in the long-term, but they’ll help you get the immediate job done.

Objective 3: Choose a method for actually investing.

In a few moments, you’ll read about where to invest your money in your 20s. But before we get to that, let’s take a look at a few methods you can use to invest.

There are three main methods . . . .

Method 1: Invest a lump sum.

If you have a bunch of money saved up already, you might want to simply invest a lump sum. That’s cool! Some people simply invest their stash of cash all at one time. Others decide to take that lump sum and spread it out a bit over a few months or years.

The latter option is smart because it will allow you to take advantage of dollar-cost averaging (so you buy at more of an average price per share rather than a potentially high price).

Method 2: Invest automatically.

This is probably the best and most doable method for most in their 20s. Once you’ve figured out how much you should and can invest, you can simply have that amount go directly from your bank account to your investment institution of choice. Set it up and don’t worry about it!

Method 3: Invest manually.

This method is nice for those who want to throw most of their extra dough into investments. Say, for example, most months you can invest around $100, but this month you can invest $250. Manual investing allows you to adjust your investing based on your actual circumstances.

Where to Invest in Your 20s

Next, you’re going to have to determine where you’re actually going to invest your money.

Roth IRA Options

I recommend using a Roth IRA. I love the Roth IRA. Why? Because if you expect to pay a higher tax rate in the future than you do now, the Roth IRA can help you pay taxes on your investments now so you don’t have to pay taxes when it comes time to withdraw from your investment account.

Seriously, consider the Roth IRA.

Now, there are a few ways you can invest using a Roth IRA (or a personal investment account if you already have retirement covered). Let’s take a look at some of your options . . . .

Betterment

Betterment is a great choice if you want to automate the investment process.

Betterment uses ETFs, known for their low fees and flexibility, to invest your money. Betterment helps you diversify your investments and professionally manages your portfolio using preprogrammed software designed to help you reach your investment goals.

One of the nice things about Betterment is their low fees. And, the more you invest, the more you save in fees. You can start out with fees as low as 0.35% annually and work your way down to paying as little as 0.15% annually (see Betterment’s pricing for details).

Lending Club

If you want to try something unique, give Lending Club a shot. Instead of investing your money in stocks and bonds, with Lending Club, you’ll be investing in notes.

That’s right, you’ll be lending money to others who need it – and making a profit. You can find quality borrowers through Lending Club and make some solid returns.

Best of all? You can use a Roth IRA with Lending Club. Didn’t expect that, did you?

If you want to learn more about Lending Club, read my Lending Club review for investors.

Wealthfront

Wealthfront is another asset management service that aims to grow your dough.

Like Betterment, Wealthfront uses ETFs to ensure low fees and flexibility. You can automate your investing process with Wealthfront and get on the right track to increase your chances of reaching your goals – retirement or otherwise.

One feature that differentiates Wealthfront from Betterment is that they will manage your first $10,000 free of charge. That’s huge, especially when you’re in your 20s and are just starting out investing. After that, you’ll pay a low 0.25% annual advisory fee (see Wealthfront’s pricing for details).

Congratulations!

If you’re in your 20s and finished reading this article, bravo!

But it’s not enough to have read this article, follow the advice. Don’t become one of those 65-year-olds who regret not investing in their 20s. Now go and invest!

Please note this article may contain affiliate links that, when clicked, result in me earning a commission.

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21 Things You Need to Know Before Investing in a Duplex

If you buy a duplex and live in one side, you have a home, and rent coming in from the other side to help pay it.

Investment real estate also offers tax advantages. And what could be easier than managing a rental next door?

You’ve probably heard the arguments for buying a duplex instead of a single-family home. But is it really a good idea for you?

Maybe.

Recently, after four years of Florida’s heat and humidity, my wife and I moved back to Colorado to buy a duplex in the small town of Florence.

We’ve only lived here for a short while, so I can’t offer a comprehensive guide to buying a duplex as a home. But a lot can happen in a couple months, so maybe you can learn a few lessons from our experience.

Maybe even enough to decide if you’re ready for this lifestyle/investment…

Buying at a Distance

My wife was busy, so I flew out to Colorado alone for four days to look for our new home and investment.

Once I was back in Florida, we tried to buy a multiunit property — my favorite of the seven properties I’d seen. We discovered a few problems and the deal fell through, so we made an offer on a duplex I’d been in for just 10 minutes.

Buying a property you’ve only been in for a few minutes isn’t as risky as it sounds, as long as you have an inspection contingency in your contract.

If the inspector had found any major problems, we could’ve backed out. Both units were occupied, as well, so we also could have backed out after reviewing the leases, if the rent was less than stated in the listing information.

Real estate is selling quickly in Colorado, and prices are rising, but we didn’t have to buy something. So we offered $119,000, about $8,000 less than the asking price.

The seller said yes.

Meanwhile, my wife was asking me questions I couldn’t answer, like whether the bedrooms were carpeted, what color the walls were, and where the washer and dryer were located.

Fortunately, the inspector answered some of those questions.

More importantly, he happened to have structural engineering experience. The duplex was built in 1900, but he assured us the cracks in the walls (most of which I didn’t recall) were nothing serious.

Lessons:

1. Don’t get too attached to a property.

2. Have alternatives in mind.

3. Try offering less than the asking price.

4. Take your time looking at a property if you’re interested in it.

5. Hire an inspector with building or engineering experience.

Negotiating the Deal

The duplex had no major functional problems.

After we got the inspection report, we asked for some minor repairs, and the seller agreed. He also assured us one unit would be empty by the time we moved.

Our contract allowed us to cancel the deal if we didn’t find acceptable insurance. And by acceptable, it meant almost anything — from the price to even what could be covered or excluded (such as earthquakes or floods).

The language of the contract said we could cancel the contract “based on any unsatisfactory provision of the Property Insurance, in Buyer’s sole subjective discretion.” Of course, there’s a deadline, as with all contingencies.

The insurance agent asked us questions, which we passed on to our real estate agent, who passed them on to the selling agent, who passed them on to the seller, who answered his agent, who then contacted our agent, who then contacted us, and we contacted our insurance agent, who then had another question.

The process was tedious and slow. And insurance was expensive, which we discovered the day after our insurance contingency deadline.

Fortunately, after questioning our insurance agent, we found we could substantially lower the cost by raising the deductible, paying a year in advance and getting our car insurance through the same company.

The listing information said the units were rented for $650 per month, but I suddenly recalled the tenant on one side telling me she paid $600.

We got copies of the leases emailed to us, and the rent was $650, but was discounted $50 if she kept the place looking good for showings while it was for sale.

Lessons:

6. Inspections are an opportunity to renegotiate or back out of a deal.

7. Watch deadlines in the contract.

8. Ask your insurance agent how you can lower your annual premium.

9. Ask tenants questions when you see a place.

10. Always ask for rental agreement copies and other contracts

Closing the Deal

As soon as we were past our contract deadlines, we listed our home in Florida for sale.

It sold the next day for more than the asking price — crazy times are back in Florida! We closed the sale 16 days later, a few days after closing on the duplex.

Meanwhile, we discovered the tenant in the unit we planned to occupy was still there.

We pondered the possibility of being homeless after closing in Florida, and decided we needed more information. Emails and phone calls went through the typical maze of real estate agents and we couldn’t get a clear picture of the situation.

My wife found the solution.

She located the seller’s personal phone number on a lease, and we called him directly. The tenant in “our” unit was more or less moved out and would vacate four days before we arrived.

Real estate agents don’t like being bypassed, and some sellers would rather not talk to the buyers at all, but in this case it was one of our best decisions. The seller was very helpful — he even came over after we settled in to answer any questions we had.

We’d mentioned we could close earlier than planned, but we hadn’t heard from the title company. At some point I called them and they said, “Oh yes, we moved up the closing and the papers will be there in a couple days.”

Thanks for telling us — apparently it wasn’t important for us to know when the closing was! We quickly wired the money so it would be there in time. I have never met a title company I like.

Lessons:

11. It can help to talk to the seller directly if possible.

12. Follow up on everything — you may not be notified of important changes.

How to Make Money With Your Home

We closed early in the month.

Since rent is paid in advance, we were credited at closing with the rent already collected. If you’re tight on money for closing costs, this can help a lot. Essentially, we were making money before we even moved in.

That was the good news.

Five days after we arrived at our new home (with everything we owned and two cats in our minivan), the tenants in the other side announced they were leaving in a week — and one of their three dogs had torn a hole in the carpet.

Fortunately, the previous owner had collected an extra $500 deposit for pet damages.

It was bad news and good news. I wasn’t thrilled to have to prepare the other side for new tenants while still settling in and painting our side. On the other hand, we’d probably find better tenants, and could start fresh with our own rules.

We decided to use a placement service to find a renter.

For 75% of the first month’s rent, they took photos, advertised in several places, took applications, did credit and background checks, and made a recommendation.

So we had that unexpected expense, a couple thousand dollars in repairs, painting and other preparation, and some vacant time shortly after moving in.

But now we have new tenants in place, and for $50 more per month than anticipated. We hope they’ll stay for years.

Lessons:

13. Close the purchase early in the month to collect prepaid rent at closing.

14. Expect rental-preparation expenses and loss of income from vacancies.

15. Be sure to collect a larger or extra deposit if you allow pets.

16. Have a management company find tenants if you’re uncertain how to proceed.

Financing a Duplex

We were fortunate enough to be able to pay cash for our duplex, but you can also finance them.

Bankrate.com explains there are some special advantages to financing a duplex when you live in it.

For example, unlike non-occupant investors, you can get a Federal Housing Administration or Veterans Administration loan.

And even though it’s your home, you can sometimes use the income from the other side to help you qualify for the loan.

But be sure the numbers still make sense once you add in those loan payments.

For example, if the units are similar in size, allocate half of each mortgage payment to the investment unit, along with half of the common expenses and all expenses specific to that side.

You should aim to have at least some positive cash flow (on that unit) after all of those costs.

Tax Advantages of Owning a Duplex

You may have to read up on the tax advantages of owning and living in a duplex.

But basically, anything you spend on the rental unit is an expense that reduces the income you report and the taxes you pay. This includes advertising, paint, flowers for the front yard — anything to help you keep the place rented.

Expenses for the entire property are generally split down the middle.

For example, half of the tax and insurance bills are rental expenses. But talk to an accountant if you have a unique property, like if one side is much larger than the other.

You also get other benefits to further lower your tax bill, such as claiming depreciation as an expense. And you can still qualify for the capital gains tax exclusion on half of the property when you sell, since you live in it.

Duplex Disadvantages

The disadvantages of owning a duplex are about what you’d guess.

Here’s a short list of the potential problems you could face:

17. Tenants who don’t pay on time: Be ready to start evictions quickly.

18. Pet damage to your property: We may limit the number of pets.

19. Potential liability for accidents on the property: Get insurance.

20. Expensive surprises like broken furnaces: Ours are 30 years old, fingers crossed.

21. Lots of maintenance work: It won’t be all the time, but probably when you least expect it.

For me, the biggest drawback is the stress of constant decisions.

Do I fix the shower myself or pay five times as much for a professional?

Do I allow the renters to have a garden?

Do I ask for rent on time, even if it means the tenant won’t have money for her baby’s medicine? (That one actually came up on a previous rental I owned.)

These problems are not unique to duplexes. They come with any residential rental property.

Special Duplex Advantages

As an investment, rental real estate has clear advantages.

For example, rents usually go up over time, but your mortgage payment remains the same (assuming you got a fixed rate), so your income rises. But some advantages are specific to owner-occupied duplexes.

For example, a duplex provides an opportunity to invest less in your own home. Our duplex has two 1,100-square-foot units and we paid $119,000, while small houses on the same street cost about the same.

We ended up putting $3,000 into fixing the place up. Coupled with $1,000 in closing costs, we spent $123,000 — $61,500 for our home and $61,500 for a rental, much less than we would’ve paid for a single-family home for either purpose.

We don’t like being landlords, especially after weeks of work preparing the place. I don’t even like real estate. But where else can we get our expected 7% return?

And that’s not even the whole story.

If we’d bought a single-family home for ourselves (our backup plan for moving back to Colorado) we would’ve moved farther from the town center to find something cheaper. We still would’ve paid more than $90,000, instead of $61,500.

Now we get to invest the $30,000 we saved.

We paid cash, but the advantage is there if you borrow, too. By investing less in your own living space, you save thousands in interest over the years.

Another advantage of buying a duplex as a home is you live next door to your tenants, so you can keep track of what’s going on with your investment.

Being on-site, you can more easily deal with little problems before they become big ones.

And the rent check is only a few steps away.

Your Turn: Would you consider buying a duplex as your home and investment?

Steve Gillman is the author of “101 Weird Ways to Make Money” and creator of EveryWayToMakeMoney.com. He’s been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).

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How Insourcing Your Haircuts Can Save You Thousands of Dollars

I used to get a haircut once every eight weeks. They varied in cost from $20 to $50, depending on the kind of place I went to. Yes, I know it’s a little crazy to pay $50 for a standard men’s haircut. That’s what living in Los Angeles and working in the entertainment industry can do to you. You’re surrounded by beautiful, perfectly coiffed people at all times. Part of you wants to try to fit that mold.

Regardless of my reasoning, the fact is I was spending a lot of money on haircuts. More than I knew was reasonable.

But, what were my other options? I had no confidence in my ability to cut my own hair. (Major kudos to TSD founder Trent for cutting his own hair and giving zero iotas about what people think.) 

Everything changed when, about a year and a half into my current relationship, I got up the nerve to ask my girlfriend the big question: “Do you think you could cut my hair?” She agreed to give it a try, and the savings have been piling up like hair clippings on the salon floor ever since.

The Psychology

Cutting your own hair or letting an amateur have a go at your head is not for the feint of heart. There’s a reason people go to school for this stuff. If you’re attempting anything besides a standard buzz cut, the first couple of cuts can be a little rough. But as long as you own it and remember that hair will always grow back out, you’ll be fine.

Think about it this way: We frugal people are used to being judged! We already drive older cars, wear older clothes, and eschew expensive hobbies. Being confident in your ability to look and feel great without having to go to a hair salon can be one more tool to help you get out of the rat race.

I would just advise against doing this for the first time right before a big job interview or important social event.

Crunching the Numbers

There are startup costs, but thankfully, they are low. All you need is a clipper set. This is the one I got, which set me back about 20 bucks. The reviews say that it should last a very long time if taken care of properly. So for less than the price of one standard men’s haircut, I got a device that should reliably give me hundreds if not thousands of cuts.

Let’s conservatively say I was spending $25 per cut on average after tip. At my rate, that adds up to $150 per year on haircuts. So, from the time I started paying for my own haircuts at age 18 until my last paid cut at age 28, I probably spent about $1,500 at the barbershop.

But, that’s not taking into account the opportunity cost associated with getting to a hair salon every two months. If it takes me 20 minutes to drive to the salon, 20 minutes to wait in line, and 20 minutes to drive back, that’s an hour of my time devoted to each haircut that doesn’t even involve any trimming. Assuming you, your partner, or your friend can cut your hair at home in the same amount of time it would take a stylist — given my simple hair style, I don’t think that’s unreasonable — you may be losing an hour’s worth of productivity per haircut.

I did some digging and found an in-depth Lifehacker article that goes into how you can calculate the value of your time. When you run the 2014 census numbers for men in the United States, the average works out to about $24 per hour.

Adding in the value of my lost time (assuming I would have done something more productive with that hour), I can say my haircuts have “cost me” $2,940 in the last 10 years. That means I can assume savings of $2,940 over the next 10 years now that my girlfriend cuts my hair in our apartment. I think most guys out there would accept a check for three grand as compensation for foregoing trips to Supercuts over the next 10 years.

If you took your savings at the end of each year and invested it, you can really start to see the benefit. In my case, I will have saved approximately $372 this year once you factor in opportunity cost and the price of my clippers. If I put just my savings from this first year into an account that averages a 7% return, I’ll have an extra $2,800 in 30 years. I’ll take a sometimes irregular cowlick for that kind of money.

If you live in a major city, the savings are even greater. The average men’s haircut in San Francisco costs $49!  In my current city of residence, you basically need a side job to afford yourself the luxury of outsourcing your basic grooming needs.

• Related: How I Save Money While Living in the Most Expensive City in the U.S.

Money Isn’t the Only Benefit

To be honest, I never liked any aspect of going to a discount hair salon. For one thing, there’s the conversation. I never feel more compelled to talk to someone than when I’m getting my haircut. Maybe it’s a natural instinct to engage with people when they are using sharp instruments close to your head. You feel powerless, and like you better pretend to be interested in their dog’s recent digestive issues, or else.

I’m not saying I don’t like human interaction; I sometimes enjoy talking to strangers. But I don’t like being put in a situation where I’m forced to make small talk whether I like it or not.

But, you know who I pretty much always enjoy talking to? My girlfriend! I love our time chatting during haircuts. Sure, she’ll sometimes cause me slight discomfort by being a little rougher with my neck than any of my previous stylists, but I just assume that means there’s something I did that I forgot to apologize for. Maybe couples therapists could promote cutting each other’s hair as a means of seeing what subconscious problems are simmering between two people.

Summing Up

Self confidence is born from working hard and seeing results. It’s not about how you look. Style is completely subjective, and changes over time. If you’re clean and presentable, that’s all that really matters.

Do you want to spend $10,000 over the next 30 years on haircuts, or do you want that money to be growing in an investment account? I think a lot of guys out there are ready to make the leap, and I wish you the best of luck on your haircutting journey.

The post How Insourcing Your Haircuts Can Save You Thousands of Dollars appeared first on The Simple Dollar.

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This Woman Got Paid $150 to Go to the Dentist — and Saves Money Every Time

Think dental insurance is too expensive?

Then I highly recommend you look into your nearest dental school for affordable insurance plans and opportunities to participate in student clinics. In some cases, you might even get paid for your dental procedure.

I’d always paid out-of-pocket for dental care, until I started graduate school at New York University. During my first cleaning in almost two years, I found out I had not one, but three cavities.

Thankfully, I’d recently enrolled in the university’s Stu-Dent Insurance for $240 a year, which I learned would cover the cost of treatment — and then some.

The dentist informed me my cavities qualified for the dental student’s clinical exam and because my insurance would have covered the cost, I’d actually be paid for my participation. The rate was $50 per cavity, plus free cab fare to the college the day of the exam.

At first I was hesitant. Did I really want a dentist-in-training drilling holes in my teeth?

But then I was assured the student would be overseen by several dentists, doctors and faculty members. So supervised, in fact, that the entire exam start to finish would be more than three hours long.

My Experience at a Student Dental Clinic

Getting to the college on exam day was a breeze. I didn’t have to walk a mile to the subway station and ride the always crowded 6 train downtown. Instead, I just hailed a cab and was there in less than 10 minutes.

When I arrived, there was a dental student waiting outside the building, ready to pay for my cab. Check-in was fairly straightforward. I met my student dentist, filled out some paperwork and sat in the waiting area until my name was called.

The exam was held in a big, bright, open room divided into a ton of exam stations furnished with all of the standard equipment: the massive leather chair, absurdly bright spot light and tray of tools that look like medieval torture instruments.

I really dread going to the dentist, even just for a cleaning, but this was one of the better experiences I’ve had. My student dentist was very sweet, gentle and patient. She even gave me a hug and a thank you card after the exam.

The check inside the card certainly sweetened the experience. It only took a little courage and three hours of my time to be cavity-free and $150 richer.

Now, before you get too excited, I have to explain how this was partly due to luck. There are two reasons I was paid to have my cavities filled.

First, I already had insurance that would’ve covered the procedure. Second, I had the specific kind of cavity students need to perform their exam on. I never thought I’d say I was lucky to have a cavity!

While not everyone will qualify for payment, you can save a lot of money by going to student clinics.

Student Dental Clinic vs. Private Practice

Student clinics are a win-win situation.

They provide patients with high-quality care at reduced fees, while providing students with practical clinical experience.

Dental clinics are where students train to become dentists, and provide both preventive care and treatment. Dental hygiene clinics only provide preventive care, but tend to be less expensive — some are even free!

The dental hygiene clinic at West Coast University provides FREE care to patients of all ages, regardless of income. Pima Medical Institute, with locations in three states, provides a cleaning, examination and full x-rays for only $19.95.

Student clinics are typically 30%-70% less than private practices.

Use the Fair Health Consumer Cost Lookup tool to find out how much dental care would cost at a private practice near you. Simply type in your zip code, choose “uninsured,” and choose the type of service you’re interested in.

In New York City, a cleaning and full mouth x-rays for an adult at a private practice is around $175. The NYU College of Dentistry student clinic is only $75 — 42% less!

Keep in mind, treatment at a clinic is a little different than at a private practice.

Here are some key differences to consider before choosing to be treated at a clinic:

• Some programs have an application process to become a patient.

• New patient openings may be limited.

• Initial examination and treatment fees vary.

• Most student clinic appointments are three hours long.

• Treatment and appointments take longer because students are being supervised and evaluated by licensed dentists and faculty members of the program… not necessarily a bad thing.

• You must be flexible with a student’s schedule and academic needs.

• Your student provider will change every couple of years due to graduation.  

Don’t think student clinics are the best option for you? Check out this post for more ways to save on dental care!

How to Find Your Nearest Clinic

Here are just a few clinics at some of the top dental schools in the country, but there are many more!

Search the American Dental Association (ADA) website or call your state dental society to find a dental program near you.

1. New York University

Location: New York City

Phone: (212) 998-9800

About: To become a patient, call to schedule an appointment and complete the new patient registration form online.

Fees: Initial screening appointment fee $95. Treatment fees are 40% less than at a private practice.

2. University of Maryland School of Dentistry

Location: Baltimore, Maryland

Phone: (410) 706-7063

About: To become a new patient, you first have to make a screening appointment. Appointments are available Monday – Friday at 8 a.m. or 12 p.m. You must arrive 30 minutes early and the appointment will take approximately three hours. The information gathered at the screening will be used to determine treatment needs and necessary future appointments will be scheduled.

Fees: Initial examination fee $174. Treatment fees are 30% less than at a private practice.

3. University of Texas Dentistry

Location: San Antonio

Phone: (210) 450-3700

About: Before you can make a screening appointment, you must first complete a screening form. After the screening appointment, you’ll be contacted to schedule necessary treatment appointments.

Fees: The screening fee is $13. Pre-doctoral clinic fees are 68% less* than private practices. Advanced graduate clinics (treatment performed by licensed dentists pursuing advanced training) are 33% less* than at a private practice.

*According to a comparison with prices listed in the National Dental Advisory Service 2014 Comprehensive Fee Report.

4. University of North Carolina School of Dentistry

Location: Chapel Hill, North Carolina

Phone: (919) 537-3737

About: To become a patient, you first have to request to receive an application. The application will arrive in the mail within 10 days and must be returned by mail. Each month the school draws a new application and contacts the patient to schedule a screening appointment to determine if the patient qualifies for treatment. If you’re accepted, you’ll be assigned to a dental student and scheduled for treatment.

Fees: No screening appointment fee. X-rays $80-$160. Treatment fees are one-third of those in private practice.

5. University of Washington School of Dentistry

Location: Seattle

Phone: (206) 616-6996

About: To become a patient of the UW student clinic, you first have to call to make an appointment for a free screening, followed by an appointment for an initial comprehensive exam — based on need for new patients.

Fees: Screening appointment and X-rays are free. The initial comprehensive exam is $77. Necessary additional x-rays at comprehensive exams cost up to $70. Treatment fees are 40% less than a private practice. Example: Composite filling $70-150.

Your Turn: Have you ever been a patient of a student clinic?

Angela Andre (@angandre) is an aspiring writer and foodie with a serious sweet tooth, which is probably how she ended up with three cavities.

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