Best American Express Credit Cards

If you like rewards, you’re going to love American Express. Depending on which American Express card you choose, you can earn cash toward your statement, Delta SkyMiles®, Hilton HHonorsTM points, Starpoints® to use on the Starwood hotel network, a certificate toward the purchase or lease of a Mercedes-Benz, American Express Membership Rewards® Points, or Plenti® points.

So which card should you choose? If you read that list of rewards and immediately thought “I stay at Starwood hotels all the time!” or “I want Plenti® points!” then your decision will be obvious. For the rest of us, I examined American Express’ 12 credit cards and their reward options, and came up with five top picks:

The Simple Dollar’s Top Picks

• Blue Cash Everyday® Card from American Express and Blue Cash Preferred® Card from American Express
  Best for cash back
• Amex EveryDay® Credit Card and Amex EveryDay® Preferred Credit Card
  Best for points
• Platinum Delta SkyMiles® Credit Card
  Best travel perks — but only on Delta

Although all of American Express’ cards offer rewards, I focused on the ones that either offered rewards that would appeal to the largest group of people (not everybody’s going to be interested in the Mercedes-Benz Card from American Express, for example) or that offered high-value rewards, such as a free companion flight every year.

Best for Cash Back

Apply Now on American Express’ secure website

Blue Cash Everyday® Card from American Express Highlights

If you’re hoping to earn cash back on your purchases, you want one of American Express’ Blue Cash credit cards. First up: the Blue Cash Everyday® Card from American Express. You’ll earn $100 back after you spend $1,000 in purchases within the first 3 months. Other perks include earning 3% at US supermarkets on up to $6,000 per year in purchases — beyond that, you’ll still earn 1%.

In addition to these cash back rewards, the Blue Cash Everyday® Card from American Express also boasts no annual fee and a 0% intro APR on purchases and balance transfers for 12 months.

If you make a lot of purchases at supermarkets, gas stations, and department stores, the Blue Cash Preferred® Card from American Express might be worth the $95 fee. Let’s say your grocery budget is $700 per month; 6% of that gets you $42 cash back a month, so you’d earn back the cost of your annual fee in just over two months. Everything else is just gravy — but you should do the math on your own purchase history to determine if the Blue Cash Preferred® Card from American Express is right for you.

Apply Now on American Express’ secure website

Blue Cash Preferred® Card from American Express Highlights

Be aware that all of the cash you earn from both Blue Cash cards comes in the form of statement credits, which means you can only use it to pay down your statement — that $42 from the example above you’d use on your next credit card bill. (Occasionally, though, American Express may give you other ways for you to redeem your cash back rewards, such as merchandise or gift cards.)

Best for Points

Apply Now on American Express’ secure website

Amex EveryDay® Credit Card Highlights

If you’re looking to rack up American Express Membership Rewards® Points, get your hands on the Amex EveryDay® Credit Card.

This card is designed to help you earn Membership Rewards® Points, which can be used to help pay off eligible charges. Membership Rewards® Points can also be used to make purchases via American Express Travel, buy gift cards, and more (you can check out American Express’ Membership Rewards® site for the full details).

If you can afford the $95 annual fee, you’ll get significantly more benefits with the Amex EveryDay® Preferred Credit Card — and since you can use Membership Rewards® Points for everything from charitable donations to Uber rides, it might be worth the annual fee if you’re committed to getting as many Membership Rewards® Points as possible.

Apply Now on American Express’ secure website

Amex EveryDay® Preferred Credit Card Highlights

Here’s just one example from the vast Membership Rewards® Points catalog: You can get a $25 Home Depot gift card for 2,500 points. So, if you had the Amex EveryDay® Preferred Credit Card, you could earn that $25 gift card by spending $834 on groceries and earning 3 points per dollar. If you had the Amex EveryDay® Credit Card, you’d have to spend $1,250 on groceries to get your 2,500 points and your $25 gift card.

Here’s the real question: Is it better to get an American Express card that gives you rewards in cash, or in points?

I’m always in favor of cash, simply because I know what the value of cash is. I also like the idea of earning simple statement credits, instead of navigating the overwhelming amount of options that you can purchase through the Membership Rewards® catalog. It’s also worth noting that the Blue Cash cards let you earn extra cash back at department stores, and the Amex EveryDay® cards don’t — so I’m slightly partial to Blue Cash.

Best Travel Perks

Apply Now on American Express’ secure website

Platinum Delta SkyMiles® Credit Card Highlights

American Express offers three different Delta credit cards, and the Platinum Delta SkyMiles® Credit Card hits the sweet spot between the perks you’ll receive and the annual fee you’ll pay for the privilege.

The Platinum Delta SkyMiles® Credit Card has a variable APR of 15.49% – 19.49% (no 0% intro rate, sorry) and it’ll cost you a $195 annual fee, but you get the impressive list of benefits mentioned above.

If you’re not into that $195 annual fee, you can apply for the Gold Delta SkyMiles® Credit Card from American Express instead, but you’ll lose the 20% savings on in-flight purchases and the domestic round-trip companion ticket. (You know that ticket is going to be worth more than $195.) The base mile earnings are the same — 2 miles per dollar on Delta purchases, 1 mile per dollar on all other purchases — but you’ll earn smaller mile bonuses and won’t get the Annual Miles Boost™.

If you want to max out your Delta SkyMiles® experience, there’s always the Delta Reserve Credit Card from American Express, but be careful — this one comes with a $450 annual fee and the perks are only slightly better than the perks you’ll get with Platinum Delta SkyMiles®. Your mile bonuses are higher with the Delta Reserve Credit Card, and you’ll get free access to the Delta Sky Club® lounge, but that might not be worth the extra cost.

This isn’t the only travel card American Express offers. If you’re a Hilton HHonorsTM member, you’ll definitely want to check out the Hilton HHonors™ Card from American Express and the Hilton HHonors™ Surpass® Card from American Express, and it also has the Starwood Preferred Guest Credit Card® from American Express if you want to earn Starpoints® toward hotels in the Starwood network. However, I chose to highlight its Delta cards because I like cards where you can see the tangible value of what you’re getting — like a free flight, free checked bags, and 20% off in-flight purchases — instead of cards that put you into a sometimes confusing points system.

Heads-up: American Express also offers three “charge cards” in addition to its 12 credit cards.

With a charge card, you can charge as much as you want to your account — as long as you pay it off in full every month. The Platinum Card® from American Express, the Premier Rewards Gold Card from American Express, and the American Express® Green Card each come with their own rewards and perks, so check them out if you’re interested in learning more about the charge card experience.

The Bottom Line

All of American Express’ credit cards have lengthy and sometimes complicated rewards systems, so read through everything carefully before deciding which card is best for you. Remember that American Express wants you to earn rewards, so they’ve set it up to make sure you get something from nearly every purchase — it’s up to you to decide what that something should be.

The post Best American Express Credit Cards appeared first on The Simple Dollar.

Source The Simple Dollar The Simple Dollar http://ift.tt/2bMCjWD

10 Content Writing Tips That Will Help You Find Interesting Topics in Minutes

You’ve probably faced this before.

I know I have.

You’ve run out of ideas.

Maybe you’ve been blogging along for, I don’t know, maybe three or four years. Maybe it’s only three or four months.

And now you’re done. Why? Because you’ve written everything there is to write about the subject.

You’ve exhausted all possible avenues, topics, approaches, angles, possibilities, and techniques. It’s over. Your blogging career has to die because you don’t have anything else to say.

It’s no use trying to fake it and continue to post recycled fluff just to keep your audience placated, because they will wise up fast.

If you’re out of ideas, you’re out. You can’t just—boom!—make yourself write new stuff on demand.

What do you do?

It’s time to step back and strategize.

I’ve been blogging for a long time. Ten years is a long time, right?

And I still haven’t stopped. I’m not just blogging here, on Quick Sprout. I’m also posting a lot of articles on NeilPatel.com, maintaining columns on Huffpo, Forbes, and Inc., and sharing guest articles with other marketing sites.

Yes, I deal with the same topics, but I have to provide fresh and unique content all the time.

Here are some of the ways I come up with interesting topics in order to keep readers engaged, informed, and coming back for more. 

1. Don’t just read. Analyze all angles of the news

Staying up-to-date with the latest events in your industry is not always a matter of a quick Google search.

Google News only indexes a limited number of websites for its web searches and even fewer for its News aggregator.

Start with the most basic search, and compare your SERPs and headlines to other news sources.

It helps tremendously to research the demographics of your favorite news websites and determine some of the most recognized brand names in the industry as well as well-known commentators associated with that industry.

Take note of the movers and shakers of your business, and follow their movements.

Follow them on social media to see not only what they are posting but also what they’re reading and what they’re sharing and retweeting.

You’ll see what’s on their minds, and knowing the thought process of influencers in your industry, you’ll be able to anticipate tomorrow’s news.

2. Stay tuned into the voice of the people through social media comments

Don’t stop looking for ideas after reading the most respectable and popular publications. Why? Because some of the best conversation starters are trending on social media.

They may not come from a reliable news source, but do these topics generate interest? Absolutely!

More Americans actually get their news from Facebook and Twitter than they do from network programming.

Some of the most absurd “guilty pleasure” posts trending on Facebook (you know, ridiculous headlines like “Child Sues Mother for Deleting All Her iPad Apps” or whatever) are great places to collect ideas.

Have you seen this meme that says, “I just came here to read the comments?”

Well, sometimes I do visit websites just to read the comments!

Why? I gauge what people are thinking about trends, the questions they ask, and what’s inspiring them to comment.

People really speak their minds, holding nothing back! I’ve been shocked by the things I’ve read.

Ask questions about the stories and articles you read.

• Why did this inspire controversy?
• What made people comment?
• What was the biggest issue people commented about?
• Who else might this event or trend affect besides the person interviewed for the story?
• What might be the long-term result of these new trends?
• What does this show us about how people’s attitudes have changed on a given subject over a period of time (several years, for example)?

Maybe the story you encountered on Facebook will spark an idea for a post on “How many parents admit to using iPads to keep their children quiet?”

It’s a related discussion to the original story you read, and yet if you’re an app developer or iPad seller, it’s also more relevant to your audience.

Ideas come from unexpected places. The more you constantly feed your mind, the more ideas will come to you. Write them down as soon as inspiration strikes.

Keeping up with social media news—and just as importantly, the comments of users and how the news makes them feel—is a great place to spark your creativity.

3. Visit some Q&A sites, and borrow their questions

Most questions on Q&A sites are public domain. Your answers can prove to be invaluable.

Industry leaders are always ready to answer a customer’s question, and frankly, it’s just the polite thing to do.

Now, guess where these people go to get a professional opinion on a question they have?

They certainly don’t go directly to your office or your website, do they? They may not even run a keyword search.

No, they just ask whoever is nearby.

The current generation is used to asking questions and getting answers in 30 seconds.

If their friends don’t know the answer, they’ll ask random groups of people. And guess what? Eventually someone answers.

That’s why you have sites such as LinkedIn, Yahoo Answers, and Quora, which discuss thousands of industry-specific questions you can browse.

Searching these sites is a double advantage for you. You can answer the questions on the site (getting some attention from the mainstream) and then write a new blog post or article by turning that brief Q&A into an entire 500-1000-word discussion.

Expand on the answers already given, and provide more insight on the issue.

Judging from the growing databases of these Q&A sites, you’ll never run out of questions to answer—very often, even with niche topics.

4. Create your own database of customer concerns and questions

Chances are you’ve sold at least a few products, if not hundreds, by now. That means you have plenty of cases to study for your own marketing purposes.

What did your customers say in the reviews? What questions did they ask? Reviews matter, so pay attention.

You can generate ideas from their statements, survey information, emails, or testimonials.

I jump on the reviews customers leave to see tomorrow’s trends.

I immediately read all posted reviews to see whether the customer is satisfied or not and whether they left any suggestions for improvement. I use their enthusiasm, positive or negative, to fire up discussion on the web content.

If you have never taken the time to learn your customer’s personality and demographic, start now. Send a survey form along with every product delivery, and give them an incentive for taking the time to fill it out.

This will give you insight into your customer’s mind, and it’s the most direct and effective way to keep producing the content they want to read.

5. Research what your competitors have already done

There’s no shame in learning from someone as equally ambitious and dedicated as you are. Make a list of your closest competitors—for industry as well as for local or long-tail keywords—and take notes on what they are writing about and why.

Now, you don’t want to blatantly copy their entire article. Rather, analyze their topics, and determine ways to expand upon the story.

For example, for a broad topic such as food safety, ask yourself if there is a way to narrow it down to something more specific, like recent changes in the FDA’s Food Safety Modernization Act.

If the topic is too niche and you can’t think of a way to adapt it to an original article of your own, broaden the topic to your area of expertise.

There’s no sense, however, in rewriting something that’s already successful and niche-specific.

Coming up with fresh ideas is one-half researching other people’s great ideas and one-half brainstorming ways to make your rendition better.

6. Research the history of your profession and all related professions—offline!

It may surprise you to know there is far more information in book form than there is all across the seemingly infinite Internet.

The Internet makes research easier, but the information found there is not as comprehensive as we might think.

Libraries and bookstores are an underrated source of information, particularly in exploring forgotten or lesser-known histories and studies.

The quality of paperback or hardcover books is generally much higher and more in-depth than that of Internet e-books or articles, which are really scratching the surface of what we know.

Consider quantity alone. According to a very conservative Google Books estimate, about 130,000,000 books are still in existence throughout the world, though the number could be higher than that.

In contrast, Amazon—a place many people consider the definitive source of books—has less than a million e-books and lists 1.8 million print titles for sale (according to a Quora discussion).

Libraries offer access not only to books but also to newspapers, journals, encyclopedias, and archival documents that are simply not online because there’s no interest in them. In these records, though, there is enough research to power up a blog for years on end.

If you really want to establish yourself as an expert in your field and produce thoroughly original content, take your search offline and bring back a gem of knowledge.

7. Interview an expert

Content writers sometimes ignore the option to interview an expert because quoting press statements are easier to use.

If, however, you are in need of a series of interesting blogs or articles, reaching out to a professional in your industry (or related industry) for an in-depth discussion can generate enough information to write a number of individual posts.

Many experts will give interviews free, provided you have a popular blog or are reporting on a niche subject with little available information.

Many experts are eager to give online interviews either to correct what they think is inaccurate information on their subject or to build their reputation and make their name Internet-famous on a given subject.

I remember interviewing a number of leaders in my earlier days, and the issue of payment never came up. Sometimes these experts really love to share their knowledge and have someone listen.

Since they know you’ll publicize the interview, it’s a win-win for them, especially if you keep the interview brief, using phone or video chat.

Profnet, a subsidiary of PRNewsWire, is a site that matches writers with experts (or usually their representatives) in a number of fields.

Some will do brief interviews online or on the phone for free. Some experts might charge a fee, and if it’s a niche in which you can produce a lot of content and get some highly targeted traffic, it may be worth the exchange.

8. Hire young blood

Fresh perspectives are the best way to think outside the box. If you run out of ideas, brainstorm with more members of the team. Owners will oftentimes hire new blood to help in brainstorming sessions.

Even as an individual web content writer, you can tap into young creativity by simply starting conversations with acquaintances in the office or in your circle of friends online.

Many of my websites, such as Crazy Egg, have content from multiple contributors. That’s one reason why the content stays fresh.

Featuring writers from multiple backgrounds and demographics helps bring diverse, and sometimes even opposite, views on the same events we cover.

Another thing that can spark your imagination is hearing personal experiences of your colleagues or friends. People probably tell you stories about their lives all the time, e.g., an exciting commute to work, a weekend adventure, etc.

Do you actually listen and say to yourself, “You know, this would make a great blog topic!”?

You can tell their stories, with permission, or adapt their stories to start a discussion with your readers.

9. Learn to read the work of your enemies

It’s amusing how reluctant we are to listen to our enemies or, in some cases, the “quacks” of a field who we believe are spreading anti-advice.

This is why some people completely block news sites they deem biased or ignore social media users that irk them.

But I think some of the most interesting revelations about any industry come from disagreement. When someone disagrees with you, it’s an opportunity for you to sharpen your debating skills. You brush up on your knowledge of history and science so you can make an accurate rebuttal.

This is actually standard protocol in college when you write a dissertation. By learning the opposing side’s viewpoint, taking into account their objections and their research, you strengthen your own argument.

It doesn’t really matter if you believe the viewpoint or not. Whether spoken or written, it’s a part of your industry. Maybe that means you must correct the misconceptions with your web content.

Be open-minded to new evidence. Test new and outside the box ideas, even if they seem ludicrous.

This is just a part of the brainstorming experience. By spending some time investigating wrong ideas about your industry, you can find the right idea. You will also have greater passion for your industry.

I make it a point to read both sides of an argument before concluding what each side got right and wrong. It doesn’t hurt to play “devil’s advocate” in your industry blog either.

Sometimes, I can come up with a topic after reading someone else’s story that I feel is utterly false and misleading. And guess what? It stirs a great conversation, which gives me ideas for three more posts.

As you can see from this Pew Center graphic, many brand name news outlets are associated with biased viewpoints:

Bias isn’t a bad thing, and it doesn’t necessarily mean you should avoid a biased outlet.

Objectivity is not your concern. Rather, you can generate fresh ideas for new topics by reading opposing points of view on the same subject.

10. Stay on top of industry news

Social media is not the universal channel for industry news.

While social media is important to review so you can learn the voice of the consumer, blog writing it really its own entity.

If you don’t move beyond social media, you’ll frequently pass over some really good stuff because of poor hashtags, too much competition, and bad scheduling.

On the other hand, using a blog news app will help you stay up-to-date with relevant industry blogs as soon as they are updated.

You can subscribe to the RSS feed for fast updates, or you can use a website such as Bottlenose, which is a data discovery program that gives you real-time insights about the trends in your industry.

This goes beyond just bookmarking and actually allows you to get analytical insights about drivers of brands, consumer trends, emerging risks, and what the competition is doing.

Alltop provides a free service and, a bit more to the point, shares the top business blogs and the most trending news stories.

You can also create your own virtual magazine rack of top websites, magazines, and blogs. Better yet, you can even share your rack as a URL for easy interaction.

Conclusion

Lastly, remember that your brain is constantly working.

Even during sleep, it can subconsciously give rise to new ideas.

If you’re feeling drained and out of fuel, take a break and sleep on it.

Let your mind dwell on the idea over time, and make subconscious connections while you attend to something else. Before you know it, inspiration will strike you.

As long as you keep taking in information, you’ll always be capable of generating great content.

What are your techniques for coming up with interesting topics?

Source Quick Sprout http://ift.tt/2buWe1E

Thinking About Paying Off Your Mortgage Early? Read This First

When my wife and I used to have mortgage loans, we paid them off as quickly as possible. We like being debt-free, and we saved thousands of dollars in interest by investing our money in paying down those loans.

But I’ve never been sure we made the right decision, which brings us to an important question:

If you have something left over after your monthly expenses, or you have occasional windfalls, is paying off your mortgage the best “investment” you can make?

Let’s look at the arguments…

Should You Keep the Debt and Invest?

Pekic/Getty Images

Many financial writers point out that a mortgage loan is cheap debt, so they suggest using it to make more money.

“From a purely quantitative standpoint, the economic benefit to maintaining a mortgage and investing the difference is significant for most homeowners over the past several decades,” Larry Light writes for Forbes.

The idea is simple enough: Average returns in the stock market are higher than current mortgage interest rates.

Consider an example: If you have $5,000 and use it to pay down your mortgage loan that has a 5% interest rate, you get an effective “investment return” of 5%.

The stock market has an average annual return of close to 10% (measuring the S&P 500 over the last 30 years), so it may make sense to keep the debt and invest your money in index mutual funds.

But it really isn’t that simple…

For one thing, if you have a heavy load of high-interest debt, like student or car loans and credit card balances, you may want to “invest” in paying down that debt before considering working on your mortgage loan or stock portfolio.

After all, the average interest rate on credit cards is around 15%, much higher than mortgage rates and average stock market returns.

But even if you have your student and consumer debt under control, you still might want to skip the market for now…

Or Should You Pay Off Your Mortgage Early?

pixdeluxe/Getty Images

Here are some of the reasons you might want to pay off your mortgage loan instead of investing your savings and extra income.

Guaranteed Return

When you pay down your mortgage, your “savings return” on your investment is guaranteed. In other words, if you owe less you will definitely save on interest charges.

Most other investment returns are far from guaranteed.

A 100-year chart of the Dow Jones Industrial Average reveals a number of times when the stock market not only dropped rapidly, but also times when it took five years, 10 years or longer to get back to even (just look at the stretch from 1965 to 1995).

A lot can happen in a decade, and you might have to cash in those investments when they’re down by half.

Peace of Mind

Terry J Alcorn/Getty Images

It’s tough to put a price on greater peace of mind, but it’s certainly worth something. My wife and I were finishing off our last mortgage during the stock market crash of 2008, paying thousands of extra dollars on it every month.

Had we instead invested the money in the market, we may have been looking good all these years later, but I don’t think I would have slept very well while stocks were dropping 30% or more in value.

Having no debt and a free-and-clear house also provides peace of mind. About the time we paid off our last mortgage, the headlines were full of stories of foreclosures — something we never had to worry about.

No Unexpected Investment Mistakes

If I crunched the numbers, I might find we’d actually be further ahead if we’d invested, rather than paying off our past mortgages.

But that assumes smart (or lucky) investing. Paying down a mortgage was simple, while picking the right investments is not. One study found only two out of 2,862 surveyed mutual funds consistently beat the market as a whole.

Less Temptation

Pekic/Getty Images

Most of us know someone who has borrowed from his or her 401(k) for a vacation or other non-necessities.

The more difficult process of borrowing from your home equity means you’re less likely to fold to these various temptations. To some extent, you lock up your savings when you use them to pay down your mortgage loan.

Lower Housing Costs

Once you’ve paid off your mortgage loan, you have permanently lower monthly housing costs. My wife and I like that.

It makes it easier to survive the loss of a job or other income, and much easier to finally start saving money for those retirement investments.

The Verdict?

Malkovstock/Getty Images

So is it better to pay down a mortgage loan or invest your excess income?

If you’re paying 4% on a mortgage loan and the stock market just crashed, it’s very likely you can do better putting your money into the market at the bottom and riding it back up.

On the other hand, the market could keep dropping, you could choose the wrong investments, you could be tempted to spend some of that money, and a time may come when you wish you didn’t have the house payment you could’ve eliminated.

For us, peace of mind tipped the scales in favor of paying off our mortgage loans, but there is no simple answer.

Your Turn: Do you think it’s better to pay off your mortgage faster or to invest your extra income instead?

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).

The post Thinking About Paying Off Your Mortgage Early? Read This First appeared first on The Penny Hoarder.

source The Penny Hoarder http://ift.tt/2bwUU8k

Ask GFC 007: Are There 401(k) Equivalents for the Self-Employed?

Welcome to another Ask GFC! If you have a question that you want answered you can ask it here.

If your questions get featured on GFC TV or the GFC Podcast, you are the lucky recipient of a copy of my best selling book, Soldier of Finance, and a $50 Amazon gift card.

So what are you waiting for? Ask your question now!

The 401(k) plan is one of the greatest innovations ever developed for working Americans to save and invest money for retirement. But 401(k) plans are primarily for salaried employees – where does that leave self-employed?

This is another great topic inspired by a question from a GFC TV viewer named Shane:

I’m self employed so I don’t have they luxury of having a 401k. I do have a Roth that I contribute the maximum amount to each year, but my question is are there other ways that I can put money away for the future that will give me a decent return?
Shane G.

There’s no need to beat around the bush on this topic. Yes, Shane, there are 401(k) equivalents for the self-employed. There are of course traditional and Roth IRA plans that you can participate in, but there are other retirement plans available to the self-employed that look a lot more like a 401(k) plan.

There are three that are worthy of a deep discussion.

SIMPLE IRA

A SIMPLE IRA is a retirement plan that is available for small businesses with fewer than 100 employees. Much like an IRA (and it is an IRA), contributions to the plan are tax-deductible, and investment earnings accumulate on a tax-deferred basis. You can begin making withdrawals at age 59 1/2, but if you take distributions before that age they will be subject to regular income tax, plus a 10% early withdrawal penalty.

In order to qualify to make a contribution, you must earn a minimum of $5,000 in either of the past two years.

For 2016, the maximum contribution is $12,500, or $15,500 if you are 50 or older. You can contribute 100% of your earnings up to those limits. So if you earn $12,500, you can contribute $12,500.

As an employer, you’ll have to make either a 3% matching contribution, or a 2% nonelective contribution. In either case, the employer contribution percentage must be based on the employee’s compensation, which is your compensation if you’re self-employed.

As an example, if your self-employment income is $100,000, you can contribute $12,500 as an employee, but then provide yourself with an employer match of $3,000. That will be a total of $15,500. It’s not as generous as an employer sponsored 401(k) plan, but it’s a lot better than what you can do with an IRA.

One of the biggest advantages of the SIMPLE IRA is that you do not have to file a plan specific tax return with the IRS. That makes management of the plan much easier. You can also maintain the plan through a brokerage of your choice. It can be a self-directed account, enabling you to maintain the maximum number of investment options.

SEP IRA

The long version of this plan is Simplified Employee Pension Plan, and like a SIMPLE plan, it is a type of IRA. It is designed as a retirement plan for self-employed individuals and for small business owners and their employees.

As is the case with an IRA, your contributions are tax-deductible, and your investment earnings accumulate on a tax-deferred basis. You can begin taking distributions from a plan after age 59 1/2, at which time the withdrawals will be subject to regular income tax. If you take distributions before this age, you’ll have to pay regular income tax, plus a 10% early withdrawal penalty.

The maximum that you can contribute to a SEP IRA for 2016 is 25% of compensation, to a maximum of $53,000, or $59,000 if you’re age 50 or older. If you have employees, then each employee must open an individual SEP IRA account.

The plan is easy to setup, and easy to administer and maintain. You can set it up through popular investment brokerage accounts, as a self-directed plan. As the employer, you will be required to complete IRS Form 5305 SEP. However, the form must be maintained for your records, but you are not required to make an annual tax filing with the IRS.

Solo 401(k)

This is probably the best retirement plan option for the self-employed, largely because it virtually is a 401(k) plan. It’s just a 401(k) plan for a single individual, as the name implies. However, a sole proprietor can actually hire his or her spouse, and still be eligible for the plan.

With a solo 401(k) plan, you act as both employer and employee in the arrangement. That also gives you an opportunity to make two distinct contributions to the plan.

As an employee, you can contribute up to $18,000 per year, or $24,000 if you’re age 50 or older. These are the same contribution limits that apply to employees under a traditional 401(k) plan. One of the really nice benefits to a solo 401(k) is that you can literally contribute up to 100% of your income in order to reach those limits. (You can actually do this under employer sponsored 401(k) plans, but most employers put a percentage limit on your contributions.)

But then you can also make a contribution as the employer. This is referred to as an employer nonelective contribution. It’s so named because it is based on a percentage of your net business income, and not a flat dollar amount. You can contribute up to 25% of total net business income to the plan, as the employer.

(In regard to business income, the IRS has a complicated worksheet to make this determination in Chapter 5 of IRS Publication 560, so if you have a solo 401(k) I’d strongly recommend a paid tax preparer, preferably a CPA.)

This is a bit complicated, I know! So let’s walk through an example so that you can see how it works.

You have total net business income of $100,000. As employee, you make your $18,000 contribution to your solo 401(k). As owner, you can make an employer nonelective contribution of $25,000 – that’s $100,000 times 25%. Total contribution to the plan will be $43,000 for the year.

Now we’re getting to the point where you can see the solo 401(k) is a much more generous plan than the employer sponsored variety.

There is an absolute limit on how much you can contribute to a solo 401(k) plan. For 2016, it’s $53,000, or $59,000 if you’re age 50 or older. And since those limits are also the maximum that you can contribute to all retirement plans of any type, it will have to be reduced by any amounts contributed to other retirement plans that you have, whether those contributions have been made by you personally or by an employer.

Which is the Right Self-Employed Retirement Plan for You?

Any of the three plans will enable you to put away a lot more money for retirement than you could with just an IRA account. The easiest plan to administer will be the SIMPLE IRA. But if you are looking for maximum contributions, both the SEP IRA and the Solo 401(k) provide greater amounts, consistent with – or exceeding – what an employee could contribute to an employer sponsored 401(k) plan.

My vote goes to the Solo 401(k). I say that because it offers the ability to achieve the greatest contribution amount for the lowest income. I gave the example of being able to make a $43,000 contribution on a $100,000 income with a Solo 401(k). On the same income, you would be limited to 25%, or $25,000 with a SEP IRA. This clearly favors the Solo 401(k).

Whichever one you choose, you will still come a lot closer to an employer sponsored 401(k), and do a lot better than you would with a regular IRA.

Source Good Financial Cents http://ift.tt/2bwIgWK

Want to Trade Stocks Online? These 8 Expert Tips Can Help Get You Started

It seems like the easiest way to make money: Invest a few dollars in a company, wait for the stock to go up, then sell, sell, sell!

But trading stocks successfully is a tricky business, and you can easily fail trying to “short the market.”   

“Stock trading without knowing all the rules is a really good way to lose money,” says Sam Seiden, chief educational officer for Online Trading Academy. He says customers will often start trading first, realize they’re hemorrhaging cash and then come to his site for help.

If you want to skip this doozy of a life lesson, do your research before ever opening an E-Trade account. Of course, you’ll never completely isolate yourself from losses — that’s just not how trading stocks works.

“Even guys who are thoroughly professional, do this for a living and have all kinds of resources say that 80% of their trades are losers,” says former UBS managing director Jeremy Hardisty, who now recruits executives for top trading firms. “A brilliant trader is getting trades right 55-60% of the time, max.”

If you’d like to inch toward brilliance, here’s the step-by-step guide to doing it. These tips won’t make you rich overnight, but hopefully they can save you from losing big your first time at bat.

How to Get Started With Online Stock Trading

1. Know the Difference Between Trading and Investing

Andrew Rich/Getty Images

Sure, both involve the markets, but they’re drastically different.

In investing, you plunk money into a broad range of funds and leave them there long term. Trading is buying something (stock, gold, foreign currency, commodities), with the belief that its value will rise in the very near future, at which point you’ll sell it.

“When you invest you want to diversify — that’s best for passive investing,” Hardisty says. The idea is as the years pass, some investments will grow while others won’t. Trading is done in the very short term.

2. Find Your Niche

Imgorthand/Getty Images

Since specialization is key to successfully trading, you need to pick the assets you’ll trade with care. Options include stocks, bonds, commodities, gold and foreign currency.

Buying and selling stocks on the New York Stock Exchange is probably the best-known option — it’s also where the popular online marketplaces usually let you trade — but it’s not the easiest.

Hardisty says trading foreign currencies is much more simple, since they’re less volatile.

However, his advice isn’t to necessarily go with the easiest. Instead you need to figure out, “What do you think you have expertise and enthusiasm about?” To really become an expert trader, you’re going to need to know the inner workings of whatever industry you’re quite literally hedging your bets on.

3. Make Your Hypothesis

SeanShot/Getty Images

Every move you make on the stock market should look like this: I am buying this thing because I think it is at too cheap of a price. I believe the price will go up for X reason. I will sell it when it reaches Y price.

“Buying Whole Foods because you like it as a company may or may not work as a strategy,” Hardisty explains. “The big question is, why are you doing this? Why do you think it’s going to generate income? What’s your hypothesis?”

Ultimately, winning in stock trading is all about anticipating what might happen next. To strike with precision, you have to have to think critically about all of the possible variables that could affect the price of a stock between when you buy it and when you sell it.

4. Practice On Paper

Christopher Badzioch/Getty Images

It’s not very glamorous, but Hardisty says the best way to get started is with zero real dollars on the line.

Pick a stock, figure out your hypothesis for the stock, write it down and then wait. As the market moves you’ll see whether you were right or not. “And be honest,” Hardisty says, adding that it’s very easy to say I would have done this or that in hindsight.

5. Realize Your Limitations

Andrew Rich/Getty Images

These days, computers do the vast majority of trades. And when it comes down to it, you’re really no match for a robot — sorry to burst your bubble.

Computers trade using algorithms instead of gut instinct, and decisions are instantaneous. In fact, Hardisty says there’s been debate about how to make trading more fair, since computers closer to the NYSE can actually trade faster than those farther away.

Information travels quickly over fiber-optic networks, but distance matters. The fractions of milliseconds it takes for info to travel across town add up when a big investment firm is making thousands of trades a day.

You’re never going to be as fast or emotionally detached as a computer. So stock trading will likely never be as lucrative for you as it is for corporate Wall Street firms. If you’re thinking of this as your main means for generating retirement income, definitely think again.

6. Pick Your Website

Andrew Rich/Getty Images

Seiden says competition has, for the most part, pushed trading fees so low that the cost of trades is almost nothing industry-wide.

Still, since your account info will be synced with either your bank account or a credit card, you want to make sure you’re using a site with a good reputation.

Hardisty says most people choose their trading platform via the information it provides.

“People are looking for more data, more news, more research,” Haristy explains. He’s right. A 2015 survey of “self directed investors” by J.D. Power found what investors wanted most was access to guidance.

7. Put Most of Your Money Elsewhere

Milan Marjanovic/Getty Images

Robert Johnson, Ph.D., president of the nonprofit American College of Financial Services, says the money you allocate for stock trading needs to be small.

“Maybe this is what you do instead of going to Vegas,” he says.

The rest of your invested funds need to be in well-diversified, long term investments — and preferably ones providing compound interest.

Hardisty puts it like this: “At the end of the year this is not going to be a W-2 you can live off of.”

8. Understand the Psychology of Loss

HalfPoint/Getty Images

Winning feels great, but losing hurts. And it hurts at a rate unequal to the joy we feel when we win.

This is called loss aversion, a well-known tenet of behavioral psychology and economics. Loss aversion is the reason people sell when the market slips.

“Our tendency is to take the loss to avoid further loss,” Hardisty says, adding, “And sometimes that’s the right choice. Sometimes it’s not.”

To avoid being “whipsawed,” a term for constantly reacting to a share’s most recent price change, you need to have a firm strategy in place and the discipline to stick to it — even when things are painful.

Your Turn: Do you know any other stock-trading tips? Let us know in the comments!

A.C. Shilton is a Tennessee-based freelance journalist with a husband who likes to trade willy-nilly on the stock market. Since researching this piece, their financial future (and marriage!) is looking a little less precarious.   

The post Want to Trade Stocks Online? These 8 Expert Tips Can Help Get You Started appeared first on The Penny Hoarder.

source The Penny Hoarder http://ift.tt/2c3UeZZ

Questions About Basis Points, Churning, Scentsy, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Will or trust?
2. Basis points?
3. Safe withdrawal rate
4. Replacing work with more work
5. Churning
6. Lacking motivation
7. Term policies waste of money?
8. Want to be single?
9. Staying in shape while telecommuting
10. Do programmable thermostats save money?
11. Minimal food budget for family?
12. Scentsy refills?

This past weekend, my family visited a community festival not too far from our home. We had a great time as always enjoying the usual parts of a Midwestern community festival – there are usually a ton of activities related to the town’s history and heritage, a free parade, and usually lots of free things to see.

It can be expensive, too, especially with kids. “Fair food” is usually overpriced and every single festival tries to mine money for future festivals from the parents by having rides or inflatables for the kids. The money usually funds the “free” things next year.

Usually, we just bring some of our own food and water, but we’ll often buy some rides for the kids. For me, though, the best reason to go is the performance by local bands, many of which are talented enough that they could make a career out of their music if they so chose. They’re usually completely free and performed on a community stage.

On with the questions!

Q1: Will or trust?

My husband and I just had a baby and we can’t figure out what’s better for our situation, a will or a trust. We aren’t rich, but we own our home and started a college find for him as soon as we decided to get pregnant.
– Amy

I’m assuming by “trust” that you’re referring to a “revocable living trust,” which is a mechanism that some people use to pass their estates along to their descendants instead of or in addition to a will.

For your purposes, a will is probably the document you want. A trust requires you to transfer control of your property to that trust, which is a step that does make handing the property to children easier in some cases, but generally ends up meaning more paperwork over the years. The benefits of it usually aren’t worth the time, paperwork, and legal fees involved for small estates, especially for people just starting out.

A will allows you to name guardians for your child should you pass away early and will also allow you to put all of your assets into a trust for your child should you pass away early. It’s a pretty simple document that a lawyer can help you set up quickly or you can set up on your own.

Q2: Basis points?

What is a basis point? The Google definition seems way too simple to need an extra term for it (0.01%? Really?) I hate reading about financial stuff because they use complicated words for stuff that’s like common sense once you know what it means.
– Adam

As you correctly stated, “basis point” is simply 1/100th of one percent. In other words, it’s a percent of a percent. 100 basis points equal 1 percent. That’s really all there is to it.

Now, why do they use an extra term like “basis point” to describe something so straightforward? 1/100th of 1% is a bit more wordy than basis point, and it’s a term that’s commonly used in finance when you’re dealing with huge numbers. A basis point in a $1 billion deal is still $100,000. It makes sense to have a term for this.

In most ordinary personal finance, this term shouldn’t come up too often except to describe the expense ratio on a mutual fund, which is sometimes described in basis points. That’s mostly done because many of the people that actually dig into that level of detail are institutional investors who are managing a lot of money.

Q3: Safe withdrawal rate

Wanted to drop a tip that makes me feel really good. I like to add up the value of all of my retirement and other investing accounts and calculate my monthly “safe withdrawal rate.” Basically, I just multiply the total of all of those accounts by 0.04 (to get the 4% withdrawal rate) and then divide that by 12 to see how much I could withdraw from that account. For example, if I have $100,000 total, my safe withdrawal rate would be $333 a month. Feels good to see that number right now but when that number gets high enough to support me, I’m going to feel great.
– Andrew

I really like that way of looking at your retirement (or early retirement) savings. I also completely agree with you that, when that number starts getting big enough to look like a total you could survive on, it feels really good.

It’s also a fun number to chart over time, just like your overall net worth. As it gets bigger and bigger, it not only represents you getting closer and closer to retirement, but it also represents a larger and larger “emergency fund,” meaning you could survive some pretty major changes in your life without skipping a beat.

For example, if your investments give you $1,000 a month in investment income, you could easily handle it if you moved to a lower paying job. Perhaps it’s one that pays $1,000 less per month (for a job you really love), in which case you could be breaking even if you start tapping that $1,000 a month from your investments.

Q4: Replacing work with more work

I’ve been reading a lot online about people who retire early in their thirties with just enough money to survive on and it often seems to me like they’re just trading one job for another. If you quit your job just to spend all of your time around home doing things to save money, aren’t you just basically trading jobs?
– Nick

I think that “lean” early retirement, which is what you’re describing, comes down to personal values more than anything else. The people that engage in it get a lot of value out of things like repairing their own bicycle and preserving their own food. Such manual tasks can bring a lot of positive spiritual rewards.

If you’d like to dig more into this idea, I’d suggest reading things like Self-Reliance by Ralph Waldo Emerson or Shop Class as Soulcraft by Matthew Crawford or Voluntary Simplicity by Duane Elgin (all of these links go to my own discussions of these works).

Beyond that, many people simply find the freedom to make such a choice to be highly exciting. It’s an option that’s now on the table for them and, because of that, their personal freedom is significantly expanded.

For others, such activities might not seem all that enjoyable. It does seem pretty pleasant to me, though. I often daydream about simply getting up from my desk and heading outside to fix a lawnmower or something like that.

Q5: Churning

Are you familiar with “churning”? Does it work? It seems to be kind of a hobby where you get lots of rewards credit cards and get the signup bonuses from each of them and then eventually cancel them and transfer balances around in order to never pay any interest and get lots of sign-up rewards. Seems like a fair amount of work for relatively small benefit to me but some people I know swear by it!
– Debbie

Churning is pretty much exactly as you describe it. It’s the practice of signing up for credit cards with big signup bonuses, doing what you need to do to get the bonus and keep the bonus, and then cancelling the card.

The benefit is obvious: you can get a lot of very nice signup bonus rewards – usually big bundles of frequent flyer miles or hotel points or other rewards.

There are some drawbacks, though. It takes time. You have to pay attention to the details of offers. It’s going to ding your credit somewhat as you’re opening new lines of credit quite regularly, though this shouldn’t be a real problem if your credit is otherwise good. You have to stay on top of a lot of different credit card bills and also pay attention to new offers coming down the pipe. If you mess up, you can sometimes end up getting hit with enough interest payments to devour the value of the rewards you get.

I usually view churning as a hobby rather than as a real personal finance strategy. It’s a way to spend some spare time earning airline miles or hotel nights if you’re willing to invest time and effort in it.

Q6: Lacking motivation

I’ve been reading your blog for the last few months and I love your story of financial turnaround and working toward retiring early. Great stuff to read!

I have tried many times to get on this road myself but I just can’t keep the ball rolling. I basically feel completely unmotivated to continue after a while and kind of grow to hate the whole idea. Then a few months later I’ll cycle back to loving the idea and jump on it whole hog again.

Thoughts as to how to continually motivate myself?
– Daniel

For me, the best tool for keeping the motivation rolling was to just automate my savings. This forced me to learn how to live my day-to-day life with less money in my checking account and it kept the ball rolling toward financial independence even when I wasn’t too motivated to do it.

Once you have that automated system set up, you can’t just stop saving because you’re unmotivated for a while. You actually have to take negative action to undo it. You have to go in and turn off the automatic savings. That’s actually a threshold that’s much harder to cross than deciding simply to not contribute any more this week or next week.

What I actually found is that by automating it, it took the process out of my regular thoughts most of the time. I don’t even really think about it. It just happens – the money goes out of my checking and into investments. When I’m not feeling hugely motivated, I just don’t think about it or check it at all. When my motivation naturally rises, I check it and I’m so glad that the ball kept rolling while my heart and mind were elsewhere.

Q7: Term policies waste of money?

My insurance agent says 97% of term policies never pay out and you’re just throwing your money away buying one. True?
– Nate

It’s true that some high number of term policies never pay out. 97% is believable. However, that doesn’t mean they’re a waste of money – they’re actually a bargain.

The reason you’re buying insurance is for that 3%. You don’t want term life insurance to pay out because that means the person you insured has passed away. Unless you want someone dead – and I seriously hope that you do not – having the policy pay out is a highly undesirable outcome.

Term life insurance is the cheapest way out there to protect that 3% situation. It’s there in case the insured person dies. If the insured person doesn’t die, that’s great; that person lives! If that person does die, then there will be plenty of money from the term policy to replace their income.

Other policies try to tack on a pretty awful investment package to this term life policy. Avoid all of it. It’s virtually always laden with expensive commissions and high fees and expense ratios. Buy the cheapest term policy you can from a reputable insurance house (shop around a little) and get your investments elsewhere by shopping around for them separately.

Q8: Want to be single?

Sometimes you write posts about doing things that just don’t make any sense at all with a family. Do you want to be single again?
– Anthony

Not in the least. However, I do respect that there are many aspects of minimization that are simply easier to do if you’re single. It is far easier to live out of a backpack and couch surf if you don’t have three young children, for example. It is far easier to live in a tiny efficiency apartment if you’re single.

I don’t write The Simple Dollar for myself. I write it for a lot of people, some of whom are single, many of whom who are looking for alternative ways to seek financial success or find a new direction in their life. If I didn’t present interesting ideas that I think up or learn about, even if they don’t directly apply to me, I wouldn’t be doing a very good job.

Would I move to a much smaller place if I were single? Absolutely. Do I sometimes think about how I would do things if I were single? Absolutely; I can learn from those thought experiments. Does that mean I want to abandon my family in any way? Absolutely not. There’s nothing in the world that I would trade my wife or my kids for.

Q9: Staying in shape while telecommuting

As a work from home / telecommuter what do you do to stay in shape? I have to actually make a special trip to go to the gym instead of just stopping on my way home so my exercise routine has fallen apart since starting telecommuting. Thoughts?
– Sandy

Well, what kind of exercise do you really enjoy? Do you like running? Go outside your front door and run! Do you like lifting weights? Buy a few weights and figure out a reasonable routine at home!

Personally, I like having an exercise routine. I kind of jump around – in the past I’ve done both DDP Yoga (which I return to whenever my back hurts because it is WONDROUS for lower back pain) and P90, but I mostly stick with the Lifetime Fitness Ladder, which I try to do twice a day. I also really enjoy long walks to clear my head when I’m trying to think through a problem or how to write about a particular topic.

It really depends on what you want to do. However, more than anything else, I’d encourage you to start scheduling exercise time, either at the start of your day or right in the middle of your workday or at the end of the workday. Make it a completely normal part of your routine.

Q10: Do programmable thermostats save money?

I’ve been thinking about buying a programmable thermostat because of all of the positives I’ve read online about them but then I talked to my friend and he says it hasn’t saved him any money. Is a good programmable thermostat worth it?
– Adam

I don’t think you need a high-end programmable thermostat to enjoy the benefits. Even an entry-level one does the job you need.

The real benefit in a programmable thermostat comes from raising the temperature in your home when you’re not there during the summer and lowering the temperature when you’re not there in the winter and doing it automatically. If you do this normally when you leave the house, a programmable thermostat isn’t going to save you money.

For me, I don’t mind the house being warmer in the summer and cooler in the winter than the rest of my family, so I have a weekday schedule built in that basically turns off heating and cooling for most of the day in our house. It kicks on automatically in the mid-afternoon to get the house to a nice temperature for the family evening hours and then kicks back off overnight, turning back on in the early morning for everyone’s morning routine.

It saves money by doing this automatically without me having to remember to do it each morning and evening. I don’t have to remember to move it at all – it just happens. It’s the adjustments that actually do the money saving, not the thermostat; the thermostat just makes sure that I actually do the adjustments.

So, do you naturally do those kinds of adjustments? If you forget quite often, a programmable thermostat will probably save you some real cash.

Q11: Minimal food budget for family?

What is the minimal food budget for a family of four?
– Randu

The USDA “thrifty” family cost of food estimation for a family of four is $558 per month with young children and $639.60 if you have older children. We have a family of five (two adults, two “older” children by the USDA standards, and one “younger” child) and my monthly food cost estimate for us is about $800, though I know we could cut it further than that with ease if we needed to.

I know that with some careful home economics, a family can definitely get below that “thrifty” number from the USDA. The more you cook at home – and the more you prepare meals from scratch using low cost ingredients like dried beans and dried rice – the lower you can make that number go. If you supplement that with a well-tended garden that can provide vegetables for you and you save the excess for future months via preservation (canning, drying, etc.), you can cut it even more. These things really depend on having someone at home who will do all of that work, though.

Many two-income American families end up relying at least somewhat on convenience-based shortcuts at least some of the time – things like prepackaged foods, takeout foods, delivery, and dining out – so that increases the cost simply out of necessity. Thus, I think the numbers from the USDA are reasonable in a two-income household that pays attention to the dollars and cents.

Q12: Scentsy refills?

Do you have any suggestions for cheap ways to refill Scentsy? Love my house smelling good but don’t want to pay the high price.
– Nina

I’d just suggest doing what we do to keep our house smelling good: we regularly air out our house by opening the windows, we use baking soda to absorb bad odors, and we regularly cook things that smell good or leave out aromatic parts of our meals.

For example, whenever I smell something bad or an aroma I just don’t want, the first thing I do is open the windows if it’s at all possible with the current weather. I also put a bit of baking soda into a saucer and sit it somewhere near where the bad aroma is.

To add a good smell, I’ll just cook something that smells good. I’ll cook apples in the fall and use a lot of nutmeg and cinnamon in it, then use the apples for a pie or a cobbler. I’ll make an aromatic tea. I’ll make something with oranges or grapefruits in it – or just eat an orange or a grapefruit – and leave the peels out in a few places around the house (picking them up in a day or two). Those things naturally make the whole house smell great.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Basis Points, Churning, Scentsy, and More! appeared first on The Simple Dollar.

Source The Simple Dollar The Simple Dollar http://ift.tt/2c3Lmnc