MAKE MONEY ONLINE POSTS: 10/12/17

الخميس، 12 أكتوبر 2017

Money makeover: “We want to retire by the time we’re 60 and to help our son buy a home in the future”

Chris and Liz Welton aim to retire early and to set aside cash to help their 18-year-old through university and beyond.

Chris and Liz Welton live in Knowle in the West Midlands, with their 18-year-old son Steven who is travelling on his gap year and has a place to study at university in September 2018.

Chris, 52, is an assistant principal of a primary school, while Liz, 57, is an assistant director of procurement for the local council.

The couple are mortgage free and Liz has a 25% share in her family’s buy-to-let property portfolio in Langport, Somerset. This generates an income of £16,000 a year before tax.

Chris has two defi ned benefi t (workplace) pensions. One is projected to be worth £14,100 a year from age 65 plus a lump sum of £42,300. It includes a spouse’s pension of £7,000 a year. The other is projected to be worth £6,900 a year from age 65 plus a lump sum of £29,400.

It includes a spouse’s pension of £2,600 a year.

Meanwhile, Liz has one defi ned benefi t pension, which is estimated to pay £29,600 a year from age 65, plus a lump sum of £54,600. It includes an annual spouse’s pension of £12,700. Alongside this, Liz has a linked Additional Voluntary Contribution (AVC) pension, which has a current value of £12,540.

In addition, the couple have the following savings and investments:

£150,000 split between two Cash Isas
£25,000 in a Stocks and Shares Isa
£5,000 in a direct share portfolio

The couple’s financial goal is for them both to retire when they reach the age of 60. They’re also keen to support their son through university, and would like to help him buy a property in the future.

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This is where Martin Dodd (pictured above), an independent financial adviser (IFA) and director of Midlands Investment Agency in Wolverhampton is here to help. Martin spent the early part of his career working as paraplanner before becoming a fi nancial planner 15 years ago. Midlands Investment Agency specialises in offering both pre- and post-retirement planning services, covering pensions, wealth management, and inheritance tax planning. Martin’s advice for Chris and Liz is as follows:

Beware pension early withdrawal penalties

Chris and Liz’s goal is for them both to retire when they reach the age of 60. But they need to be careful about early retirement penalties attached to their workplace pensions.

Liz’s council pension applies the so-called ‘85-year rule’, which reduces pension benefi ts if you take them before the age of 65. However, the exception to this is if at age 60 you have at least 25 years’ service with the company. Liz does, so she can access the pension from age 60 penalty-free.

Chris’ West Midlands pension, which is projected to be worth £14,100 a year from age 65, does allow him to take his pension penalty free from age 60. But his Teachers’ Pension, which is worth £6,900 a year from age 65, levies early withdrawal penalties.

There are two elements to the Teachers’ Pension, one of which has a retirement age of 65 and the other at age 67. Both elements must be taken at the same time. If either element is taken early, a 23% penalty applies to the pot with the retirement age of 65 and a 29% penalty applies to the pot with the retirement age of 67.

Seven steps to building a bigger pension

Chris says: “The early withdrawal penalties are unlikely to change my retirement goals. I just need to decide whether to take my Teachers’ Pension at 60 and put up with the 23% to 29% reduction or whether to leave it until I’m 65 or 67 and rely on my other pension and sources of income in the meantime.”

Move some cash savings into stocks and shares

It is important to retain an emergency reserve fund to provide the couple with cash in the event of any unforeseen circumstances. The amount to hold in an immediately accessible savings account varies from person to person. I recommend holding between three and six months’ expenditure in an account which you can access quickly.

The couple has £150,000 invested in two separate Cash Isa accounts, earning 1.75% and 1.05%, respectively.

I recommend that a proportion is used for this ‘rainy day fund’, while the rest should be transferred into a new Stocks & Shares Isa for each of the couple.

The Isa allowance is very generous at £20,000 for the current tax year. Isas are also flexible products in terms of topping up, switching funds and making withdrawals. Plus, they’ve long been a good way to invest because you pay no income tax or capital gains tax on returns generated, and you can access your money whenever you wish, although the tax benefits are lost for ever when you withdraw your cash.

By transferring their Cash Isas to Stocks & Shares Isas, Chris and Liz can benefit from a wide range of funds to invest in and can control the risk through one of our actively managed portfolios.

I have reviewed the couple’s attitude to risk and volatility through a risk-profile questionnaire. I have assessed Liz as a ‘moderate’ investor and Chris as a ‘moderate conservative’ investor.

I therefore recommend they consider the Old Mutual Wealth ‘moderate’ and ‘moderate conservative’ portfolios, which offer competitive terms and prices for the couple’s requirements and have track records that I am satisfied with – although investments can go down as well as up and past performance is no guarantee of future returns.

The holdings in the ‘moderate’ portfolio are predominantly equity-backed investments (company shares) both in the UK and overseas in a broad selection of stocks. The remainder of the portfolio is typically made up of fixed-interest holdings, cash, and property-linked investments.

Meanwhile, the holdings in the ‘moderate conservative’ portfolio are cash deposits, fixed-interest holdings, property and equity funds mainly in the UK, but with some international holdings on occasions.

Moneywise says: The ‘moderate’ portfolio includes the following Moneywise First 50 Funds: CF Woodford Equity Income (7%), Man GLG Continental European Growth (5%), and Vanguard LifeStrategy 20% Equity (5%).

The ‘moderate conservative’ portfolio includes investments in the following Moneywise First 50 Funds: Man GLG Contintenal European Growth (5%), and Vanguard LifeStrategy 20% Equity (8%).

For our advice and implementation, I would charge 1.3% of the money being invested, which amounts to £1,950 based on an investment value of £150,000. The ongoing advice fee for the recommended Old Mutual Wealth Investment is 1% of the fund value, which based on a fund value of £150,000 would amount to £1,500 a year.

I’d recommend leaving the £25,000 in the couple’s existing Stocks and Shares Isa until they decide whether to transfer cash into a new Stocks and Shares Isa, at which point they can consolidate their portfolio. Their current Stocks and Shares Isa has performed positively to date, with the two funds it invests in producing returns averaging 9% (Threadneedle Navigator UK Index Tracker) and 5.3% a year (Threadneedle Navigator Income) over the past five years.

Chris says he’d like to keep his direct share portfolio, which includes Aviva, British Telecom, Lloyds Bank, and Santander, as he enjoys managing it.

Chris comments: “I understand the idea behind moving most of our cash savings into investments, as I agree that keeping a lot of money in cash isn’t a good idea as savings rates are well below inflation.

“But I have a vision that the stock market is at its highest now and, with Brexit coming up, I’m worried it could fall.

“Plus, despite Martin thinking the performance of our current Stocks and Shares Isa is strong, I’m very disappointed with the return. I also know I need to invest for at least five years, which is a long time to keep our money locked away.

“I’m thinking of using the money to buy a flat and rent it out, and then giving the property to my son to live in later down the line. Martin doesn’t think this is a good idea due to the buy-to-let tax changes that have come in, meaning it’s not so profitable, and because it’s a lot of work to become a landlord. But I’d be minded to hire a letting agent to sort this side of it out, and it’s definitely something I will look into in more detail.”

Set up Lasting Power of Attorneys

The couple may wish to consider putting a Lasting Power of Attorney (LPA) in place, so that another individual would have the legal authority to look after specific aspects of their financial affairs or health and welfare should they lose the capacity to do so.

Chris and Liz already have wills in place, and I haven’t recommended any insurance products for the couple, as they are debt free, they both have death-in-service life cover through their pensions, and their son is now an adult.

Failure to set up lasting power of attorney can be a costly disaster

On the overall Money Makeover experience, Chris says: “Martin was extremely professional and had decent ideas, but it’s timing that’s an issue for me as to what to do.

“My problem is that I’ve got £150,000 in cash, which is great and I appreciate that many people would love to have this, but interest rates on cash are pitiful, I’m loathe to put it into the stock market due to Brexit concerns, and it would appear that buy to let isn’t much of a goer any more.

“I think it’s better to wait and see if there’s a correction in the stock market in the next six to 12 months and to take it from there.”

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Key recommendations for Chris and Liz:

Beware early redemption penalties on pensions
Move some cash savings into stocks and shares
Retain a rainy-day fund
Set up Lasting Power of Attorneys
Lift your financial game by getting a Money Makeover

Are your finances in need of an overhaul? The Money Makeover is here to help.

Each month we help to transform the finances of one Moneywise reader. We arrange a one-to-one meeting for you with an FCA-regulated independent financial adviser in your local area, who will discuss your financial concerns and goals for the future, and draw up a bespoke financial plan for you. From the basics of shedding debts, budgeting and saving, to pension saving, building an investment portfolio and inheritance tax planning, our network of IFAs are qualified to provide strategic advice and specific product recommendations for all areas of financial planning.

You will receive a copy of the adviser’s report and it is completely your choice whether to follow through with their advice. The Money Makeover is totally free – all we ask is that you are comfortable for your personal financial details and photo to be published in Moneywise so our readers can also learn from the advice you receive.

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The Struggle Against Fleeting Wants and Desires

I have a bunch of unread books on my Kindle and many books that I’m on the reserve list for at several different libraries, yet when I come across an interesting new release, I want to read it.

I have shelves full of board games in my office, but when I try a new game at game night that I can imagine my family enjoying, I want to add it to my collection.

I have the materials for several really interesting projects in the garage and in the closet, but I often find myself thinking about other projects beyond those.

When I smell something delicious, I want to eat it, even if I’m not hungry in the least.

When I am trying to focus, part of my brain always wants to check out and do something else that’s fun.

In short, I often find my internal life is full of a long string of fleeting wants and desires. They feel really, really urgent in the moment and sometimes I take them up, but they almost always guide me down a path that is actually unhelpful in the long term. It leaves me with work undone at the end of the day, with less money than I should otherwise have, with more calories consumed that I should have consumed.

The thing is, when I step back and reflect on almost all of those desires, they seem absolutely foolish from the longer term perspective.

I don’t need to buy another book, not when I have a bunch on my Kindle to read and a bunch on reserve at the library.

I don’t need to buy another game, not with a shelf full of games, many of which haven’t received nearly enough plays.

I don’t need to eat that tasty treat, not with no hunger in my belly and more weight than I should be carrying.

I don’t need to play that silly computer game, not with this list of things left undone for the day.

Not only that, if I just wait for a while, those desires tend to fade pretty quickly. They often fade within moments. They virtually always fade within a week or two.

Those fleeting desires – and many others – are obvious poor choices from the long term perspective, but in the short term, they shout with urgency.

I think of it as being like a campfire that’s burnt down to the coals, which are glowing red. Those are my long term plans and desires. Now, imagine throwing a piece of paper into that fire. It will burn incredibly brightly, far overshadowing the coals, but it burns only for a little while, fading away to nothing, leaving me with just the glowing long-term coals again.

It is a struggle to ignore that burning paper, to skip past the short term urgent desires, and focus on my long term plans and goals. It is a struggle that never really seems to fully go away.

Yet, at some point, I have gained at least some control in that battle. My wife and I have zero debts, a fully-paid-for house with no mortgage, and an extremely healthy retirement savings account. I weigh about 50 pounds less than I did at my heaviest. I essentially never miss a work deadline.

Let’s dig into this a little.

The Perfect Is the Enemy of the Good

The absolute first lesson I learned in the struggle against fleeting wants and desires is that the perfect is the enemy of the good.

If I make ten good choices that face the long term in a day and one bad choice, I should not beat myself up over it. I am doing well, and I need to recognize that. I may have made a mis-step, but when it’s a matter of ten steps forward and one step back, then I’m heading in the right direction still.

A bad choice does not mean the end of things. It does mean that the destination might be a little further off, but that’s okay. It also means that I have something to reflect on a little, which is also a good thing.

So, here’s what you should do. If you make a mistake, do not start believing you are a failure. That’s a huge error, and all it does is give you “permission” to start making tons of “mistakes.”

Instead, think about that mistake in the context of all of the good moves you’ve made. For example, perhaps you’ve eaten within your calorie limits for five days in a row, so eating an unhealthy meal with some friends is just one step back following several steps forward. You’ve done well, and one mistake doesn’t undo that progress.

Then, think about the mistake itself, and ask yourself what you can do to avoid repeating it. How can you avoid making that mistake again? Give it some serious thought. It might be that it was a fleeting thing, but it also might be a situation that you regularly find yourself in. What’s a better approach in that situation?

After that, move on. Leave the mistake in the past, where it belongs. Don’t buy into the idea that a mistake means the end of your progress. Perfection is unobtainable, and if perfection is all you can accept, you will never achieve lasting success.

Reflect Often on the Big Picture

Let’s go back to that campfire analogy again. As I described it earlier, our long term plans and goals are like a mellow campfire, a bed of coals glowing orange, whereas a strong short term desire is like throwing a sheet of paper in there. It glows brightly for a few moments, far overshadowing the coals, but then it burns out and you see the coals again.

One approach to solving this problem is to just regularly feed the coals with fresh wood. In other words, give yourself time on a very regular basis – ideally daily – to think about your long term goals and plans.

For example, if you’re trying to improve your financial state, give that some thought every day. Think about why you’re trying to improve your state and where you want to go. Do you want to be free from the shackles of debt? Reflect on how the thought of that makes you feel and what you need to do to get there. Maybe you want to own your own home – visualize that home that you desire, then reflect on the little steps you need to take to get there as soon as possible.

This is the equivalent of putting fresh wood on the coals and blowing on them. You’re keeping the fire going and perhaps making it a little hotter for a while. The thought of throwing a piece of paper in there won’t seem quite so appealing and it won’t burn quite so bright in comparison.

I do this kind of reflection as part of a daily routine. At the start and end of most days, I spend a bit of time reflecting on what my big goals are in life and what I’m going to do today to really hammer them home (in the morning) or how well I did at it and what my plans are for tomorrow (in the evening). It helps me to simply keep my eyes on the prize. It’s akin to throwing another log on the fire so that I don’t need paper for a fire to burn bright in my belly. (Am I carrying the analogy too far?)

To be more specific, I actually keep a list of a couple big picture things of what I want out of life in the ten major areas of my life. Physical, mental, spiritual, marital, professional, parental, avocational, intellectual, emotional, and social. What do I want in each of those areas of life? I have some big picture things for each area, and I keep them written down in a single place that I review at least once a day, and more often than that on a typical day. I ask myself what I’m doing today to move toward those things, and whether what I did yesterday was enough. If you take this practice seriously, it can be incredibly powerful.

Avoid Situations Where You Can Act on Fleeting Wants

Where am I at if I’m likely to buy an unplanned book for my Kindle? I’m on Amazon’s website.

Where am I at if I’m likely to buy an unplanned board game? I’m in my local game shop, wandering without a purpose, or I’m on a game retailer site.

Where am I at if I’m likely to buy expensive foods I don’t need? I’m at a grocer, wandering the aisles without a clear purpose.

Noticing a theme here? The places where I consistently act on fleeting wants are places like e-commerce websites, convenience stores, and other stores where I go without having a specific plan. Those are situations where I am extremely likely to just give in to a fleeting want or desire, open up my wallet, and buy something.

So, how do I fix that problem? Obviously, I minimize my opportunities to go to those places.

Use site blocking software on my computer to block e-commerce sites. Although I can obviously undo such software, this just creates another step that I have to jump through before I visit such a site. It generally stops idle visits, but if I have a plan, I’ll jump through the hoops to undo it. My preferred software is StayFocusd.

Don’t save passwords for e-commerce sites. Instead, if I want to use the site, I have to remember and type in my password. That takes a bit of additional time and, again, adds another hoop to jump through.

Don’t save payment information, either. It’s the same logic as above. If it’s a bit more difficult to make an online purchase, I’m a lot less likely to do it.

Pay at the pump when getting gas. That way, I have no reason to pay inside, which makes it far easier to just not go inside, or to skip the checkout if I have to go inside to use the restroom.

Don’t go to stores without a specific purpose in mind. I used to go to stores for a variety of reasons. I’d go for pure entertainment, to kill an hour or so. I’d go for social reasons. I’d go solely to browse. The thing is, all of those choices led to situations where I would often act on fleeting wants and desires, buying things I really didn’t need to buy. So, I simply cut them out. I don’t go into a store unless I specifically intend to buy something there and I have a strong idea of exactly what I want before I walk in the door.

Those simple strategies keep me from acting on fleeting wants and desires, but what can I do to keep those fleeting desires from ever developing?

Minimize Situations Where Fleeting Wants Appear in Your Head At All

Fleeting desires don’t appear out of thin air. They’re introduced into our brains by the things we see and interact with every day. They’re slipped into our consciousness by media, by friends, by advertisements – things we’re constantly exposed to in the modern world. What can we do about the impact of those things?

Cut back on your mass media diet. It’s simple. Spend less time each day reading websites, flipping through magazines, and watching television. Replace it with actually doing things – or, at the very least, with more carefully selected media options. Instead of reading a website, settle in with a book on a topic you’ve been thinking about. Instead of flipping through a magazine, do some brainstorming related to your life or your work. Instead of watching whatever’s on television, go on a walk or play a game. Those activities vastly reduce the sheer number of suggestions of fleeting desires tossed into your mental stream.

Practice mindfulness. Mindfulness means simply being aware of what you’re doing and what you’re thinking in the moment. Without mindfulness, it’s easy to let our minds go down a rabbit hole of obsession about something we don’t need and barely want.

There are a lot of ways to practice mindfulness. Getting enough sleep is one. Eating healthy foods is another. Getting some regular exercise is another. Simply taking a “time out” a few times a day to clear your mind is yet another. I like the practice of mindfulness meditation – basically stopping to focus on nothing but your breathing for several minutes. Adding those things to your life puts you more in control of your thoughts, which makes it easier to tame the beast of fleeting wants and desires.

Use Those Old Standbys, The Ten Second Rule and the Thirty Day Rule

One final approach, one that I’ve been using for many years, is to simply think twice about any situation in which you’re about to spend money for any reason.

In the heat of the moment, I apply the ten second rule, which I’ve written about before. The ten second rule is simple: whenever you’re about to make a purchase of any kind, or about to add something to a shopping list, or add something unplanned to your cart, stop and think about that purchase for ten seconds. Seriously. It’s that easy.

That simple practice cuts right through a lot of the nonsense when it comes to buying things as the result of a fleeting desire. It’s just enough time to see that fleeting desire for what it is, laugh at yourself a little for almost falling for it, and putting that item back on the shelf.

What if that’s still not enough? In those situations, I apply the thirty day rule. The thirty day rule is also simple: whenever you’re impulsively tempted to buy an item costing more than $10, give it thirty days before making that purchase. If you still want that item thirty days from now, then shop around for it, find a good price, and then buy it.

I keep a “wishlist” of things that pop up like this, using Evernote. Whenever I have that kind of strong fleeting desire, I have this need to take some kind of action on it, and when I do, the urgency of that desire deflates. I’ve found that the action of adding that item to a wishlist is usually enough to make it deflate. Once every few months, I scrub that wishlist down to just a few items, ones that I realize that I still actually want, and then I buy those items with hobby money that I’ve budgeted for.

A Final Note

Let me just leave you with this, which shows that this struggle isn’t a new one, but one that is as timeless as the length of human history.

1 I thought in my heart, “Come now, I will test you with pleasure to find out what is good.” But that also proved to be meaningless. “Laughter,”I said, “is foolish. And what does pleasure accomplish?” I tried cheering myself with wine, and embracing folly — my mind still guiding me with wisdom. I wanted to see what was worthwhile for men to do under heaven during the few days of their lives.

I undertook great projects: I built houses for myself and planted vineyards. I made gardens and parks and planted all kinds of fruit trees in them. I made reservoirs to water groves of flourishing trees. I bought male and female slaves and had other slaves who were born in my house. I also owned more herds and flocks than anyone in Jerusalem before me. I amassed silver and gold for myself, and the treasure of kings and provinces. I acquired men and women singers, and a harem as well—the delights of the heart of man. I became greater by far than anyone in Jerusalem before me. In all this my wisdom stayed with me.

I denied myself nothing my eyes desired;
I refused my heart no pleasure.
My heart took delight in all my work,
and this was the reward for all my labor.
Yet when I surveyed all that my hands had done
and what I had toiled to achieve,
everything was meaningless, a chasing after the wind;
nothing was gained under the sun.

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Collecting Badges: A New Way to Get a Leg Up at Work?

When you think of professional development, you might envision going back to school for a master’s degree or Ph.D. While advanced degrees will generally increase your earning power, they’re also very expensive and time consuming. Bloomberg calculates that the average MBA, for example, costs $128,000 — and nearly $250,000 if you factor in wages lost during the two years it takes to complete. That being the case, many people are looking for simpler, quicker ways to gain an edge in the employment market.

One way to differentiate yourself without breaking the bank is by acquiring professional badges from an online university. These badges, or “microcredentials,” can be thought of as stamps of approval, showing you put in a significant amount of coursework to learn a specific new topic. They’re a low-cost way to demonstrate professional development, and the courses are designed to be completed by those who already have a full-time job.

When I first heard about this idea, I was skeptical. I imagined sketchy online institutions administering brightly colored certificates that would never hold any weight in the real world. But, the more I dug into it, the more intrigued I became.

There are quite a few first-rate public and private institutions, such as Georgia Tech, Northwestern, and the University of Wisconsin Extension program, that have been ramping up the number of badges they offer to the public. The idea, according to the dean of the University of Wisconsin Extension, is to “create an alternative credentialing process that would provide students with credentials that are much shorter and cheaper than conventional degrees.”

People are busy, and technology is reshaping the workplace. In order to keep up, more and more people are turning to online coursework as a way to make sure they have the skills to stay relevant. That would explain the rising popularity of sites such as Udemy, Khan Academy, and Coursera as a way to gain free knowledge online.

It only makes sense for real colleges to enter this market. There’s clearly a desire for a credentialing system that caters to busy professionals who want to gain an edge in a specific arena, but can’t devote years of their lives to an advanced degree and would prefer an affordable online course.

Another encouraging sign is that employers are intrigued by the badge system. A recent survey of human resource managers showed that 62% of HR teams expressed interest in digital badges. “Expressed interest” is a vague term, admittedly. But I take that as a very good sign. HR teams already have a lot on their plate in terms of recruiting and evaluating candidates. The fact that most of them are interested in digital badges shows that they see a future for this budding industry.

How Badges Work

We can look at the example of Wichita State University to get an understanding of what this new badge system is all about. They currently offer 35 online badges in six subject areas: health care, engineering, creative, business, general workforce skills, and behavioral sciences.

The courses are self-directed, and designed to be completed at your own pace. The badges are said to require about 23 hours of combined online instruction and study time, and would be worth the equivalent of half a credit for a degree-seeking student.

I looked into one of their badges for “Advanced MatLab,” and came away impressed with the curriculum. Upon completion of the course, students are required to show proficiency in areas such as “simulating the behavior of dynamic systems” and “designing controllers for multivariable linear systems.” This is clearly not a cakewalk course designed to give people a pat on the back and a fancy-sounding-but-ultimately-hollow certificate of achievement. Someone who earns the badge will have performed real, relevant work, and passed a course taught by high-level educators.

Once you pass the course, you’re able to post your badge on LinkedIn or other social media, email it to prospective employers, or list it on your resume like any other degree or coursework.

In a world where graduate degrees are saturating the market, and the value of an MBA is declining, these microdegrees could represent an efficient, practical way to upgrade your resume in small but hyper-focused ways.

And that focus can matter in today’s increasingly skill-specific job market. Many master’s degrees are broad in nature — having an an MBA doesn’t guarantee that you learned the niche skills a particular employer might want.

A badge, meanwhile, by its very nature, can be highly targeted to a specific subject area, such as the engineering badge that Wichita State offers for “Geometric Dimensioning and Tolerancing.” I have no idea what that means, but I imagine that if you got that badge, it would be clear to employers in that field which specific skills you’ve mastered.

Summing Up

A microcredential is never going to be seen as more valuable than a top-tier master’s degree. But, that’s not the point. Badges can provide avenues of advancement that don’t involve taking years away from the workforce and spending massive amounts of money.

If you are looking for resources, your best bet is to use a search engine. Since the field is so nascent, and there are so many badges offered, there aren’t yet any well-maintained databases showing everything in one place. Searching for “online college badges,” “digital college badges,” or “online badges for college credit” will reveal a number of institutions offering these services. You can also search for the name of a school with “digital badge” appended to the end of it.

If you’re looking for low-intensity ways to ratchet up your resume, investigating the badge system could be well worth your time.

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These Money-Making Apps Can Help You Recover From Buying the New iPhone

We’re sure you’ve heard: Apple’s new iPhone 8 recently hit the market, with the much-anticipated iPhone X soon to follow in November.

Unfortunately, the gadgets come with some hefty price tags, some with four digits.

But people seem willing to splurge.

If you’re one of those Americans who just can’t live without the newest smartphone, we’ve rounded up some of the best money-making apps to download on that that shiny new device of yours to help you make some money back.

1. Start By Selling Your Old Phone

Chances are, your cell phone provider will offer to buy back your old phone from you. But we recommend doing some research first, so you can get the most money back.

Don’t worry; we did some of that research already. We compared eight buyback sites to see which would pay more for an old phone.

The winner in most cases? Decluttr.

Download the Decluttr app, type in your old, forgotten phone’s information and see how much you could bank. All you’ll have to do is ship it in (for free), and Decluttr promises next-day payments.

While you’re at it, use the app to scan your old CDs, DVDs, Blurays, video games and any other old phones or game consoles you have collecting dust. Decluttr takes those, too.

2. Earn Money Back After Each Grocery Haul

We find ourselves in the grocery store entirely too much — and spending entirely too much. But the good news is, in addition to couponing, you can earn money back with an app called Ibotta.

Before or after each grocery run, check the app to see what rebates you might find. Right now, for example, you can earn 50 cents back on any brand of ground beef, $3 back on a case of Bud Light or $1.50 back on Trop50 orange juice. Note: These rebates are always changing.

Select your rebates, then redeem them by taking a photo of your receipt and scanning the items’ barcodes, if applicable.

When you cash out on your first offer, you’ll snag a $10 welcome bonus.

3. Set Up an Automated Micro-Investing Account

One of the easiest ways to start saving is to set up an automated account so you don’t even have to think about it.

Consider starting with the micro-investing app, Stash.

You can start investing in the least intimidating way possible. Automate your investments by allocating, say, $5 per week. No handing over big chunks of change to men in stuffy suits required.

4. Get Paid for Walking Into Certain Stores

Yup, you don’t even have to buy anything, though you can get paid for that, too.

Shopkick is an app that rewards you in “kicks” for venturing into stores (think: Target, Walmart, T.J. Maxx and others). “Kicks” (no physical activity required) can then be redeemed for gift cards to a number of retailers, including Amazon, Target Starbucks and Sephora.

You’ll earn even more kicks when you scan items in a store, purchase something with a connected credit or debit card or scan your receipts.

The app is free; you can download it here.

5. Embark on Secret Missions

Download the QuickThoughts app, and you’ll get sent on secret missions — but only if it’s convenient for you.

The survey app will use your location to let you know when it needs you to do some detective work.

Say you stop by CVS to grab some cough drops (or candy?). QuickThoughts will recognize that and ask you a few questions. Was it clean? What’d the display look like? How was the checkout line?

It’ll even let you know when it has missions available that you can complete in the future.

In exchange for your work, you’ll receive Amazon and iTunes gift cards.

6. Play Scratch-Off Tickets — For Free

There’s something so satisfying about those gas station scratch-off tickets, but it’s better to avoid them because, well, that’s not Penny Hoarding.

Instead, try using a free app like Lucktastic. Each day, a new assortment of digital scratch-off tickets is released. Lucktastic says instant wins range from $1 to $10K. You can also earn tokens, enter contests and play games.

The app is free to download — and play. Get scratchin.’

7. Bank Money “Auto-Magically” on Your Purchases

Dosh is a new cash-back app that pays you for making purchases at more than 100,000 hotels, online stores, and restaurants — including Starwood Properties, Marriott, Cost Plus World Market, Nike, Target, Chuck E. Cheese’s, and many more.

Here’s all you have to do:

Download the app and sign up.
Securely connect a debit or credit card.
Live your life and watch the cash back roll in.

In addition to cash back, you can also collect a $25 bonus for booking your first hotel through the app, as well bonuses for referring friends and local businesses.

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She’s opting out of the new iPhone, mostly because she just threw down $1,000 towards one in May and is still cringing about it.

This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.

source The Penny Hoarder http://ift.tt/2xA6iAh

My favourite income boosting ideas

Income is the elixir of financial life. It is what pays the bills and the mortgage as well as allowing us to enjoy some of life’s finer things, such as holidays in the sun.

I’ve just come back from a magical week in sunny Majorca traipsing up and down the gradients of the Serra de Tramuntana and I enjoyed every single arduous minute of it. Something I could not have afforded without the income I earn from my scribblings as a journalist.

Yet most of us want more of this magical income (it is only natural). Indeed, if there is one question I get asked as a financial journalist every working day of my life, it is this:

“How can I boost my income, Mr Prestridge? Please help.”

50 ways to make money

It is a question I find more difficult to answer if the person is retired, especially in the light of the benign interest rate environment we find ourselves in. But even for those working, there are no easy answers, especially as wage inflation continues to lag behind price inflation and we live in a world where uncertainty created by the Brexit vote refuses to go away. Near full employment is a great economic achievement, but for most it has not resulted in a boost to their standard of living and the income available at their finger-tips.

Of course, one of the best ways to ‘boost’ your income is to ensure your household bills are under control. That means locking into the best energy and phone tariffs and checking that when the renewal notice comes in for your car or home insurance, you are not paying over the odds.

I have recently been examining the ins and outs of the motor and home insurance markets in some depth (sad, eh? But it earns me an income). They are dysfunctional markets, which bizarrely fail to reward loyalty. Indeed, the opposite. The longer you stay loyal, the greater the probability your renewal premium will be costlier than comparable cover available elsewhere.

No one should show unremitting loyalty to an insurer. At renewal, you should automatically check whether it is offering equivalent cover to new customers at a cheaper price. You should also use a comparison website to see if a rival is offering comparable cover at a lower price. If either of these searches comes up with cheaper premiums, go back to your insurer and challenge them to meet the price. Sometimes they will. If not, move.

Cutting your mortgage payments (if you still have one) is also a great way of enhancing your income. I can think of no better time to review your home loan than now, given the propensity of low rates available. If you can fi x your rate at under 3%, jump at the chance.

Remortgage to cut your monthly payments

Using cashback websites to make purchases can be financially rewarding. Although I have yet to tread into such territory, many of my friends have and swear blind by it.

I also think that those who are comfortable with others using their home, should consider the income-boosting potential of renting out a room and taking advantage of the annual tax-free allowance of £7,500. If this is too big a commitment, then maybe you could rent out your drive to commuters (if you live near a railway station) or rent a room on a daily basis.

And do not forget the therapeutic effect of putting up a stand at a local car boot sale and getting rid of unwanted items. My mother and younger sister are car boot diehards and are itching to get their hands on some of my possessions that lurk in a lock-up garage (everything from first day covers through to football programmes).

True money stories from smart people: Tot up your tat to make a quick buck

When it comes to those approaching retirement or already there, it is also a question of squeezing the maximum income from savings and investments. That means chasing the best savings rates. It should also incorporate looking at income-friendly vehicles such as equity income investment trusts and bond funds.

My modest self-invested personal pension contains holdings in income investment trusts City of London, Edinburgh, and Scottish Mortgage that have a knack of delivering a rising annual income.

I am not taking any of the income that is being generated inside my pension (I could because I am just over age 55), but I will as I drift into semi-retirement (journalists never retire, I am reliably told). My investment trust holdings should then come into their own.

Indeed, maximising income from your pension is crucial. My dad died recently, but two thirds of his pension annuity lives on for the benefit of my never ageing mother. For that, I thank the advice given by financial advisory firm Alan Steel Asset Management. Oh yes, a good adviser should help you build income to last a lifetime.

Find more ideas on how to boost your income with the Moneywise 50 ways to make money guide.

Jeff Prestridge is the personal finance editor of The Mail on Sunday. He won the Contribution to Personal Finance Education category at the Santander Media Awards 2016. Email him at columnists@moneywise.co.uk