MAKE MONEY ONLINE POSTS: 2018

الاثنين، 31 ديسمبر 2018

How to Generate Sales With Welcome Emails

Email marketing is alive and thriving more than ever. 80% of marketing professionals name email as the top driving factor of customer acquisition and customer retention. And it’s got a great ROI: For every $1 spent on email, you can expect an average of $38 in return.

It doesn’t matter if you’re growing your first email list from scratch or adding new subscribers to your existing list, you need be sending out welcome emails.

At their simplest, welcome emails confirm that a new subscriber was added to your list.

If you’re only using this message for that purpose, you’re missing out on a huge opportunity to make money. Compared to other promotional emails, welcome messages generate an average of 320% more revenue.

Furthermore, customers who buy products from email campaigns spend 138% more than customers who haven’t subscribed to your list.

Stop missing out on your opportunity to make money with welcome emails. This article will tell what you need to do to drive sales directly with these campaigns.

Use a double opt-in strategy

Lots of businesses use a single opt-in strategy. With this method, a new subscriber submits their email address and automatically gets added to your list. That’s it.

But there are a few problems with this method.

If you’re not using a double opt-in, it’s possible that customers think they signed up for your emails but actually didn’t. Maybe they misspelled their email address — they’ll never know.

On the flip side, a new subscriber could also sign up by mistake, thinking that they’re submitting the email address for another reason.

In this case, you’re going to be emailing people who don’t want to receive your promotional content, and not emailing the people who do want to receive it.

The double opt-in strategy eliminates these problems. That’s why the majority of welcome emails are double opt-in.

79% of welcome emails are double opt-in

Without a double opt-in strategy, you’ll also end up with fake email addresses and spam accounts on your list. This will throw off your metrics. A huge list of email subscribers won’t do you any good if they aren’t qualified leads who are ready to buy.

When you force new subscribers to confirm their subscription to your email list, it increases their lead score.

Sure, it’s an extra step, and you may lose some subscribers as a result. However, the people who follow through with the double opt-in genuinely want to receive your promotional content. As a result, it’s much more likely that they’re willing to spend money.

It’s also worth noting that double opt-in messages have higher unique open rates than single opt-in campaigns.

We already talked about the fact that welcome emails have higher open rates than other types of emails. By using a double opt-in strategy, you can increase those open rates even more.

Opening the email is the first step in subscribers completing the end-goal action: making a purchase.

Send welcome emails immediately

The timing of your welcome message is crucial. As soon as someone signs up, the welcome email needs to be sent.

Some companies wait and batch out all of their welcome emails for the week at the same time, but that’s not as effective. Here’s why: Your new subscriber was just on your website and signed up to receive your email content because of some benefit that you’re offering, so your brand is fresh on their mind.

Don’t miss out on this opportunity to make a sale. This new subscriber is definitely more likely to buy something if the message is sent in real-time.

Just look at transaction rates for real-time welcomes compared to batched emails.

real time emails get 10X results

Furthermore, real-time welcome emails have an 88% open rate compared to just 53% of bulk welcome emails.

Though 29% of people click on the CTA of welcome emails that are sent immediately, only 12% of subscribers click on CTAs that are sent in bulk welcomes.

If you’re not sending a welcome email within seconds of the person subscribing, you’re lowering the chances of that customer making a purchase.

Thank your new subscribers

By thanking your customers for signing up to receive promotional content from your company, it shows that you appreciate them. Here’s an example of this strategy used by Kate Spade.

kate spade thank you email

Saying thank you is just good manners. Even though they haven’t bought something yet, you can still thank them for having enough interest in your brand to subscribe to your email list.

Saying thank you can be more beneficial than you think. That’s why you need to nurture your leads with thank you pages. Take this same strategy and apply it to your welcome email.

Set a precedent for relevant content

Your welcome emails should be a good indication of what consumers can expect from you moving forward.

Tell your customers how often they’ll get emails from you, and what kind of messages they’ll be receiving. Make sure you follow through with that promise.

For example, if someone signs up for a monthly newsletter, don’t send them an email every day. That’s not what they asked for.

In fact, too many irrelevant emails from brands is the top reason why people unsubscribe from email lists.

top reasons consumers unsubscribe from email

The last thing you want to do is bother a new subscriber with too many messages. You just went through all of the trouble and effort to get them to sign up in the first place. All of that hard work goes out the window if they unsubscribe.

To learn more, here’s how to get more email subscribers without annoying your customers.

Start a drip campaign

Welcome emails should be the first message of a drip campaign, which is a series of emails that entice an action. Ultimately, you want your subscribers to buy.

Drip campaigns nurture your leads by sending them timely information. As soon as someone signs up, you can have them automatically entered into a drip cycle.

After the welcome email, they’ll receive subsequent emails spaced out over the coming weeks, or however you set it up.

Here’s an example path of what a drip campaign will look like:

example of an email drip campaign

The great part about a drip campaign is that the customer doesn’t need to buy something right away in order for the message to be effective.

While you definitely want to create an actionable drip campaign, it’s not the end of the world if that first message doesn’t result in a conversion. You can still plant the seed for a future purchase.

After all, this new subscriber just signed up to receive your emails. Depending on the circumstances, they may not be familiar with your brand, products, and services just yet. But as these subscribers continue to receive subsequent messages throughout the drip campaign, it will increase the chances that they’ll buy something down the road.

Provide valuable information

To get the most out of your email campaigns, you need to understand why people are signing up in the first place.

It’s a common misconception that people only join email lists to get a discount. While that’s definitely a motivating factor, there are other reasons why people sign up for promotional content from your brand. Your welcome letter needs to provide all of this to be most effective.

why people subscribe to email lists

As you can see, receiving a special offer or a gift ranked third on this list. The majority of people say they subscribe to newsletters to learn more about topics and stay up to date on new content. It’s still worth giving a discount to new subscribers, but it doesn’t necessarily have to be your top priority.

You can also keep them engaged by giving a new subscriber an added benefit that they wouldn’t have received if they didn’t sign up for emails. Talk about new or exclusive product releases. Give them an opportunity to create an account to benefit from a more personalized customer experience.

Offer an incentive to buy

Even though it isn’t first on the list of reasons, getting a gift or something in return is still one of the top three reasons why people sign up for emails. And, offering a discount is a great way to get people to sign up for emails in the first place.

Let’s look at an example from Freemans:

By signing up for emails, this welcome message gives the new subscriber 10% off of their purchase. In addition to providing a discount, this message thanks the new subscriber for signing up. It’s personalized with her name. It also gives a sense of inside information with phrases like, “Be the first to hear” and “Here’s all you need to know.” All of these tactics used in one message will definitely increase the chances that a customer will make a purchase.

Send personalized content

People don’t want to feel like they are just a number on your list, when in reality, that may actually be the case. If you’re sending out generic welcome emails with opening lines like “Dear Sir or Madam,” it’s not going to convey the personalized touch that you want to offer.

Start simple by personalizing the subject line.

personalized subject lines have higher open rates

Getting your new subscribers to open your message is half of the battle. Obviously, nobody is going to buy anything if the message goes unopened. Good news: personalized subject lines have higher open rates.

However, opening the message alone won’t automatically translate to a sale. You need people to engage with your messages as well. The best way to do this is by providing interactive content. For example, adding a video to your welcome email can increase clicks by 300%.

It’s also worth noting that 64% of people are more likely to buy something online after watching a video about a product. By combining engaging content with a personalized message, your welcome emails will have a greater chance of driving sales.

Encourage customer referrals

Welcome emails can be used to get even more people to subscribe to your list. In order to do this effectively, you need to implement a customer referral program that drives sales.

Give your new subscribers a reason to invite their friends and family to sign up as well. Take a look at how Blinq does this in their welcome email:

blinq referral email

This refer-a-friend program offers an incentive to the current subscriber as well as any new people who sign up. Both receive a $10 credit. The more people who join as a result of the referral, the more rewards the new subscriber gets. This will also increase their chances of buying.

Here’s something else to consider, if someone who gets referred by a new customer ends up signing up for emails as well, they’ll also receive the same welcome message. As a result, it will increase the chances that they’ll refer new customers too. This strategy encourages business growth without much work on your end.

Plus, consumers are four times more likely to buy something if they are referred by a friend.

Conclusion

Your company needs to prioritize its email marketing strategy. But you don’t need to wait months to encourage new subscribers to make a purchase. You should be trying to drive sales right away with your welcome emails.

Send welcome messages immediately.
Use a double opt-in strategy to increase opens and qualify your leads.
Let your welcome email serve as the first message of your drip campaigns.
Don’t forget to thank your new subscribers for signing up.
Give them what they’re looking for by providing valuable information, and tell them what to expect from you in the future.
Personalize your content and add other incentives to increase the chances that people will buy.
Use your welcome email as an opportunity to promote your customer referral program.

By applying these strategies to your welcome emails, you’ll be able to generate more sales from new subscribers.

How is your brand leveraging welcome messages to drive sales?

Source Quick Sprout http://bit.ly/2Rofkcw

Questions About Bicycles, Family Debts, iPads, Used Textbooks, 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. Upset about stock advice
2. Bicycle recommendation
3. Family debts after holidays
4. Standing desk update
5. Using iPad for work purposes
6. Starting company on tiny budget
7. Drawing down 401(k) in retirement
8. Selecting easier chores
9. Free trading cards on Steam
10. Dealing with small library selection
11. Selling used textbooks online
12. Inherited Steinway follow-up

As 2018 winds down to a close, I encourage you to take a moment and reflect on the things that went well in the past year. What were your biggest successes in 2018?

Then, ask yourself how exactly you made them happen. Hard work? Good relationships? A good education? A little bit of luck? How many of those things were firmly under your control?

That’s your recipe for success going forward. Those are the tools that you already have in your hands that are leading you to success. Keep those tools sharp and use them in the coming year.

On with the questions.

Q1: Upset about stock advice

I don’t think your advice on the stock market is very fair. Some of us have our entire future invested in the stock market and to see it lose 20% of its value in just a couple months is really scary.
– Tammy

Over the past ten years, when it was going up in value 10%-20% a year, that was an above average return. 2009 to 2017 was an above average year for the stock market, and it was due to come back to the average.

Yes, it’s scary if you look at only the fourth quarter of 2018 in a bubble. Look back further than that. On January 1, 2009, the S&P 500 was at 865.58. As I write this, it’s at 2,485.42. That’s pretty close to a tripling in value over ten years, an 11% average annual return including this recent dip.

There’s really not much to say other than that. The advice I’ve been giving all the way up is the same as I’m giving right now, because it’s timeless advice. If you need the money in less than ten years, it shouldn’t be in stocks. If you don’t, then momentary shifts in the stock market shouldn’t concern you. If you’re still bothered, you can always move to something less risky, but you’ll get a much smaller average annual return. The stock market is not and never has been a guaranteed annual return – it’s a market that fluctuates up and down over the short term but as long as people work hard and have great ideas, it’ll keep going up over the long haul.

I’m not going to change the plan I’ve always had, one that I stuck with through the much worse 2008 dip and the incredible run we’ve had over the last decade, just because the end of 2018 is a little rough, and you shouldn’t change your plans, either.

Yes, it’s scary. How do I handle it? I very rarely check my retirement balance. What it’s doing on a daily or weekly or monthly basis is something I truly do not care about, because I’m not investing for the next day or the next week or the next month. I’m investing for decades from now.

Does this help individuals who were planning to use money in the short term that was heavily invested in stocks? No, it doesn’t, but nothing will make that lost money come back. If you’re in this situation, evaluate when you’re going to use that money and act accordingly by the above strategy. It’s all you can do. If you couldn’t afford this drop, then you need to be in something safer that might not return as much each year on average, but won’t suffer these big short term drops. Remember, your investment’s value has tripled over the last ten years and a 15% burp is making you reassess whether you can continue to tolerate the risk.

Q2: Bicycle recommendation

My goal for the new year is to bicycle for as many errands as possible around town when the weather is above 40 F rather than using the car to help with fitness and save gas. My aunt and uncle who are wealthy and incredibly generous with family gave me a $250 gift certificate to a local bike shop but I have no idea what I’m buying and all of the bike magazines and websites suggest bikes well over $1,000. Suggestions for good entry level bike?
– Amy

Unless the bike shop is really bad, they should be able to help. Tell them that you want a sub-$200 commuter bike with a detachable pannier (that’s basically a bag that hooks on the back to carry stuff around in, which you’ll want if you’re running errands around town like taking small packages to the post office or hitting the library or shopping). They should be able to hook you up with something decent for $250 total.

Good commuter bikes in that price range include a Vilano Shimano aluminum commuter bike and a Kent Northwoods. However, it really depends on what the shop carries and what their prices are like.

You do not need a $1,000 bike for your first bike. Get one that fits with your gift certificate, ride the crap out of it, and figure out what you really like and don’t like about it. If you find that it’s truly a daily use item for you but there are some specific things you don’t like, save up and replace it someday. There’s no need to do so right now.

Q3: Family debts after holidays

For several years I had a serious gambling problem which I have managed to overcome and have not gambled in 2 years. During my gambling days I borrowed money from many family members which has left me feeling very guilty. I want to repay them. At Christmas this year I gave my older brother a check repaying everything I thought I owed him by my recollection. He said thank you and started crying and said that my debt was repaid and then tore up the check. My other family members forgave the debts too.

While I am incredibly appreciative of my wonderful family, I am still left feeling like I did not repay them. I am struggling. I am secure in the love of my family but still feel like a failure. What can I do?
– Bill

Given this situation, I would probably consider another approach to repaying that debt.

What I would do is find out causes that your family members each deeply care about and then donate to each of those causes in an amount equal to the owed debt in their name. If you owe your older brother $1,000, figure out what cause he cares the most about and donate $1,000 in his name to that cause and send him a letter telling him so. Do this for the other family members too.

It sounds like your siblings are really happy for your recovery from your addiction and don’t want any threads of the past hanging around and they consider your sense of a “debt obligation” to be one of those threads they’d rather have finished off. So, I’d spend the coming year saving up enough money to repay all of them and then next Christmas give them each a card stating what you’ve done. That way, the debt is not on their mind all year and at the end of the year you can erase it from your mind as well.

Q4: Standing desk update

You mentioned a few months ago that you were about to switch to using a standing desk for work. Could you provide an update on how it’s going? Is the transition hard?
– Jeremy

The switch hasn’t happened yet because my new office space isn’t ready yet. I’m anticipating switching over in mid-January.

I don’t intend to switch full cold turkey. I’ve got a schedule planned out where I gradually ramp up my standing desk time and supplement it with time with my laptop in a comfortable chair elsewhere. The laptop-with-comfortable-chair isn’t my most productive environment, but it’ll be good enough as I’m ramping up my hours at a standing desk.

Why do I need to ramp up? Core endurance, basically. I expect to find that body parts get sore, especially my back and perhaps my feet and legs, with that much standing as I’ve been used to being at a sitting desk mostly for many years. I expect the first couple of weeks to involve some soreness as I build up some key muscles.

I’ll update this in a few months.

Q5: Using iPad for work purposes

How exactly do you use an iPad for your work? I have one and it seems like it’s just a deficient laptop and I’d just rather be using my laptop.
– Darren

I use my iPad for several purposes.

My main one is that it serves as a second monitor while working. I set it up on its folding cover stand next to my main work monitor and keep something relevant on the screen there. Often, it’s just my to-do list, but sometimes it will be other thing.

I use it with a stylus to take handwritten notes when I’m reading something really challenging.

I use it as a PDF reader and occasionally as an eBook reader, though I prefer an actual Kindle or my phone for that.

I’ll often take it places where I need an instructional video with both hands free. I’ll set it up on its stand and start the video.

It gets daily use among all of those things.

Q6: Starting company on tiny budget

I want to start a digital record company but I only make $150 to $250 a week and How can I grow my company on a low-income?
– Geoff

The first thing I’d do is sit down and plan out what you actually intend to do. Do you intend to use this as an avenue for releasing your own music? Do you hope to sign other artists and release their music? How will you pay them (I assume through a royalty percentage)? How do similar new labels pay artists?

Most of the work of a digital record label is centered around time investment. It’s all about posting to social media, talking to music fans, and so on, and that doesn’t cost money. It just costs time. If you’re willing to do that work yourself, you don’t need a whole lot of money to get started.

If I were you, I wouldn’t sweat the money. Rather, I’d sweat the research. Study up and figure out what’s involved. Figure out what you want to do. Write a business plan and figure out the actual costs, assuming you’re doing most of the leg work yourself.

Q7: Drawing down 401(k) in retirement

I’m a retired widow, 68, with a small retirement fund, and I’m on my husband’s Social Security account (Survivor’s Benefit). When I retired at 61, I lived off savings until I could go on SSA at 62 (as per my own planning), when I was told that if I left my own SSA account alone until I turn 70, it would be more than the Survivor’s Benefit. So that’s how I set my finances up. About half my income now is Survivor’s Benefit SS, the other half coming from my retirement investments. An SS person on the phone looked up approximately what my own SS would give me, monthly, when I turn 70 in about 1.5 years – and it’s more than my current income (SS & retirement combined). I live pretty simply, I own my own home, so I really don’t need to double my income. There shouldn’t be any major house/car expenses because I’ve got a new furnace and AC, and a 2008 car that runs fine. Since retiring I’ve had monthly amounts set aside automatically so I can pay the property taxes – but I am poor enough that I qualify for our state’s Homesteader’s Exemption and haven’t had to pay any property taxes at all. Those funds have gone toward trips across the country to visit my son, and other special expenses. As for the retirement fund, I’m not financially educated enough to understand a lot of it, but my own kindergarten calculation is this: If I withdrew all of my retirement funds, buried it in the back yard, and withdrew the same amount I have been doing, it would last me right around 8 years. Obviously, I’m not going to do that, but it gives me a crude measure to work with (which has dropped alarmingly in the past couple of months, due to events outside my control). I’ve stuck by your advice and just left it alone despite market fluctuations, and it’s worked pretty well. What I’m wondering now is, what pros and cons are there if I lived off my SS + a couple hundred dollars from my retirement fund monthly (which would greatly extend the lifespan of that fund), and thought of the remainder of my retirement fund as my emergency fund?
– Chris

If I were in your shoes, that’s the exact plan I would follow. I would do my best to withdraw 3% or less of my retirement fund balance each year and live off of that and my Social Security and treat the rest of it as a big emergency fund.

The only drawback of this plan is that it’s going to represent lean living for a while until you reach age 70. As you noted, when you hit 70, you should see a big bump in Social Security income. If you need to, it’s okay to spend a little more than 3% of your retirement fund to get through the next year and a half, and then after that live as lean as you can.

I am not an advocate of spending one’s retirement fund down to zero just because you’re old. You never know how long you’re going to live, and it’s not a good idea to consign your future self to a threadbare life, even if you’re 90 already.

Your plan is sound provided it creates a livable everyday life for you.

Q8: Selecting easier chores

I enjoyed your article about choosing the frugality of time and energy over money. What was most interesting to me was your estimate on time saved by using a service that charges by the cubic foot. For me, one load of laundry takes 10 minutes to sort, put into the washer, put into the dryer, and fold – but spread out over two hours. Compared to either driving the box of laundry to and from the service or remembering to set out the box and worrying about when it will be delivered, doing the laundry at home is much more stress free for me. Of course, I find doing laundry soothing, whereas cleaning the bathroom is something I tend to eye and then ignore, even though cleaning the bathroom would also only take 10 minutes. Do you find that there are chores you find easier to complete than others, even though the time and physical energy are the same?
– Ellen

There are some that I enjoy more than others, most certainly. I don’t really like doing laundry because our laundry setup is down in the basement while our bedroom is on the second floor and lugging every load up and down two floors gets old – it was actually way more convenient when I lived in an apartment and it was just down the hall.

On the other hand, I really enjoy cooking food and I don’t mind dishes much at all, which is something that’s apparently very different than a lot of people. This is probably part of why we eat at home so much – it saves money over eating out and it’s a task I partially really enjoy (cooking) and partially don’t mind (dishes).

It probably takes much more time and energy to cook a meal and clean up than do a load of laundry, but I’d far rather cook a meal and clean up after it.

Q9: Free trading cards on Steam

Just wanted to share a tip my partner and I have been using on Steam (the gaming platform). Often the games you play on there will reward you with free digital collectors cards or other items like skins for game elements. Personally we don’t find value in collecting them so we put them on the Steam marketplace. So far I have earned roughly £7 doing this and my partner has earned £10+. We also play a game (Armello) that gives you a “free chest” each day with a low level dice skin mostly, but occasionally rare skins thrown in. A lot of the money I continue to make is by selling these free dice, thus having a small income – we’re really only talking 5-10p/week – to put towards future games I want. Thought it might help some of your readers if they’re in to gaming.
– Angie

This is a nice simple strategy that I use myself. I’m not a really avid computer game player these days, but I will play games with my kids and online games with my friends on occasion and I do this exact thing if the game comes from Steam.

So here’s how it works. You have a game in your Steam library. You play it. You get a few free digital trading cards for doing so. You list those on the Steam marketplace. They sell for usually a few cents each. Eventually, that builds up to a few bucks. You then use that credit for a free game during a Steam sale.

It’s not a big money maker or anything, but it’s a way to offset some of the expense. Plus, if you’re like me and have a bunch of older Steam games, it’s a little benefit from digging them out of mothballs and playing them again.

Q10: Dealing with small library selection

I recently moved from a large city to a small town and found that the library here doesn’t offer near the same selection as the city had. This has made me start to consider getting an e-reader or tablet. However, I’m concerned that the cost of the tablet/e-reader doesn’t stop at the purchase of the device. Are subscriptions like Kindle Unlimited worth it for someone who reads about 3 books a month that are usually on current best seller lists? Do you have other ideas for a frugal reader with a limited library selection? Any time and advice with this question are greatly appreciated!
– Carrie

Talk to the librarian!

There’s a very good chance that many of the books you want can be requested via interlibrary loan. Even if they can’t be, your requests will likely be used as feedback to help determine what books the library acquires in the future. There’s also a chance that your library participates in an e-book program that has these books available on your phone.

It can feel a little awkward going up to the librarian to have this kind of conversation, but just start it by asking about interlibrary loan options for certain books. Just say that you noticed that they didn’t have a particular book and you wanted to know if they could get it by interlibrary loan or another means.

Q11: Selling used textbooks online

I’m in graduate school and have some textbooks I’m looking to sell. When I was in undergrad, I had success selling textbooks on Half.com (Ebay), but it seems that Half is now defunct and the process to sell textbooks on Ebay itself isn’t nearly as fast and easy as it used to be. I found an article on TSD from a year ago that suggests Amazon or Craigslist. I don’t live in a high-population area so I don’t think Craigslist would be a good bet. I tried Amazon, but even when I click the link “Sign up as an individual seller” it takes me to the professional seller page which costs $40 a month. So my question is: what would be the best way to sell my used textbooks online?
– Jerry

This is a market that is changing constantly, with different companies and sellers succeeding in the marketplace and then falling back.

At this point, I’d probably have to switch my recommendation back to Chegg, a service I actually used to sell textbooks many years ago. (Full disclosure: I know one of the founders of Chegg but haven’t seen him in many years.)

With Chegg, they actually handle all of the storage and selling for you – you just mail them your used textbook, they list it on their site, and you get money when it sells. Chegg was my standard recommendation for a long time on The Simple Dollar until other companies tried to dive into textbook sales and have apparently somewhat abandoned it, while Chegg is still standing.

You’ll probably get a little bit more for your books by doing all of the footwork on your own – listing them locally, hanging up flyers on campus, and so on. You’ll be able to sell for a bit less than Chegg sells it for and keep more than what you’d get selling through Chegg (you’re cutting out the middleman). However, that takes footwork and time is money.

Q12: Inherited Steinway follow-up

About the inherited Steinway piano: I would have thought you would google the brand. Steinway is the premier, top quality piano of all pianos. Used models of the smallest type go for $25k, larger grands for $75k used. I feel bad for the poor girl that you suggested Craigslist. If you have a way to reach back out, perhaps suggest an appraisal and professional consignment as a necessity for the sale or reconsideration of justifying storage cost for such a valuable heirloom.
– Andrew

This was one of those questions where answering something in a more general way (which I usually try my best to do) didn’t perfectly address the specifics of the question.

The person writing clearly knew what a Steinway piano was and had some idea of the value and seemed to be struggling over whether to keep it because they perceived it as a family heirloom. My feeling in those situations is that you do more honor to such an item by getting it in the hands of someone that would use it and thus selling it is the right option.

In that specific instance, that person had a far better grasp on what to do with a Steinway than I would; the struggle was over whether it was right to sell it or whether they should keep it even if keeping it was prohibitively difficult. I almost always vote against “prohibitively difficult” and tried to voice the answer as more of a general principle that other people take away. Sometimes, taking the more “general principle” approach misses a nuance of a particular question, as was the case here, but generally makes the answers have more utility to the many other readers.

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 Bicycles, Family Debts, iPads, Used Textbooks, and More! appeared first on The Simple Dollar.

Source The Simple Dollar http://bit.ly/2RkB5di

The Perfect Weekend Getaway? It Might Just Be Puerto Rico

Catch a Lyft to Everest: How a Chance Meeting Turned into a Trekking Company

What does 2019 hold for investors?

The past year has proved to be a turbulent one in the financial markets as the US-China trade war took off, Brexit gloom set in, and interest rates rose. But will 2019 be a more positive year for investors? We get the lowdown from investment experts

Moneywise has canvassed movers and shakers in the investment industry, from fund managers to financial planners, to find out how they expect your investments to perform in 2019 and what they think investors can do to prepare. Here’s what they have to say.

Volatility will continue

Tony Wise, portfolio manager at Wise Funds, believes that 2018 was not the easiest year for investors to navigate.

He says: “While the era of easy liquidity is coming to an end, adjustments have to take place for investors to take the new reality into account. These periods of transition are rarely smooth.

“When combined with the rise of populism, trade tensions, political risks and concerns about slowing growth, the transition gets even rockier.”

Terence Moll, chief strategist at Seven Investment Management, believes that market volatility will continue as a result of these factors.

“The world economy in the year ahead will be rather like it was in 2018,” he says.

“Growth will be healthy, interest rates will drift up further, politicians will throw their toys around and markets will be jumpy.

“Almost all of the big financial markets sold off in 2018. Next year should be better and we expect equity markets to drift up overall.”

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Debt could pose a huge threat

Romain Boscher, global chief investment officer for equities at Fidelity International, says that the biggest threat to equities or shares is debt.

“The 10-year quantitative easing experiment, coupled with a debt-fuelled boom in China, has left the world with a big tab to pay.

“Central banks lowered the cost of debt funding in response to the global financial crisis in 2008, and there’s a natural limit to how far and how fast they can normalise it.”

Given the sheer amount of debt in the global economy, a full return within a few years to the aggregate global interest rate of the last cycle, around 4.5%, would be unaffordable.

“While the global aggregate interest rate increased from 1.2% to 2.2% over the past two years, it is close to hitting a new top, which we put at around 2.5%. Going further than this would risk triggering a new financial crisis, which is something no central bank is willing to do.”

US interest rates and inflation will be a key theme

Ben Lofthouse, manager of Henderson International Income Trust, thinks US interest rates and inflation are a key theme for investors.

“In the US, we’ve seen interest rates normalising to some extent with low unemployment and signs of inflation in wages certainly impacting companies,” he says.

“Currently, other developed markets aren’t really seeing this and pricing in inflation, so it makes this area one for the biggest potential change based on where markets sit at the moment.”

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The US economy remains important for investors

Events in the ‘trade war’ between China and the US have captivated markets and sent indices fluctuating wildly in 2018. But with a provisional agreement between the two nations in place, both markets are key to the year ahead.

Mr Moll says: “The key question concerns the US, since it sets the tone for the world’s financial markets. We think US growth will slowly ease but remain solid for a while yet, with no danger of recession until 2020 at the earliest. US companies are in good shape and US and global earnings growth should remain firm.”

Both China and the US markets are key to the year ahead

But David Coombs, fund manager at Rathbone Multi-Asset Portfolio Funds, is still confident of US equities’ ability to perform for investors.

“We are keeping tabs on several areas that we feel are most important for the global economy: the strength of the American consumer, the steady deceleration of Chinese growth and the pace of global monetary tightening,” he says.

“Most of our time is spent ensuring that the companies we invest in are the best in their field; that they are being managed effectively; and that they have the best opportunities to grow. We are constantly assessing whether the price of these assets is right, and whether we should buy more or take profits. As it goes, we’ve found this shopping list tends to lead us to US companies.”

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China is one to watch

But Rick Lacaille, global chief investment officer for State Street Global Advisors, thinks that China is one to watch for 2019.

“China matters most among emerging markets for global investors in 2019. Not only is it an important driver of global growth, it is also increasingly important to global markets as major emerging market equity and debt indices begin to include onshore Chinese securities,” he says.

“Moreover, markets are only beginning to digest what a fundamental shift in relations between the US and China might mean for future growth.”

Personalised approach to e-commerce

Jenny Tooth, chief executive of the UK Business Angels Association, says: “In regard to what 2019 will entail for consumer investors, the most successful retail and e-commerce businesses are those that can process consumer information, intelligence and sentiment to personalise their offerings and approach. E-commerce businesses will ride out the challenges of Brexit and therefore I believe they will be highly important arenas for investment.”

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Pessimism over Brexit could persist or feelings can change

Closer to home, Brexit is the political word on everyone’s lips. With the outcome of events unclear as the UK moves towards leaving on 29 March, investors are urged to be cautious.

Richard Hunter, head of markets at Interactive Investor (Moneywise’s parent company), says: “In the words of one institutional international investor, the UK equity market is currently close to being ‘uninvestable’, as Brexit concerns – let alone the possibility of a Labour win if a general election was called – weigh heavily on investors.

“In a survey earlier in the year, the FTSE 100 ranked last among investors (and even below cash as an asset class) as a preferred investment destination. As such, not having partaken in the global market rally earlier in the year, the FTSE 100 stands down some 8.5% in the year to date.

“The best advice for investors is to focus on what you can control”

“The relentless surge of pessimism could persist during 2019 as the full ramifications of Brexit become a little clearer.”

However, Mr Hunter thinks: “A small change in sentiment toward the UK market could begin a domino effect, and as such, the FTSE 100 could well transform from an investment frog to a prince in 2019, given even the smallest of nudges.”

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Diversifying is essential

Mike Walker, financial planner at Prest Financial Planning, thinks investors should be careful to diversify.

“Whether investing defensively or for growth, I would also consider spreading my investments geographically and not just relying on the UK markets.

“We can’t know what the markets will do next year but a ‘no deal’ Brexit would clearly have some effect – almost definitely negative – on the stock markets, and quite possibly on UK government bond values too,” he says.

“It may sound boring, but in most cases my advice to clients would be ‘as you were’. If you are investing for the long term, then you should hold a diversified basket of investments that is suitable to your appetite for, and capacity to take, risk – and this shouldn’t change because you think the stock market may be going to rise or fall over a given short-term period.

“If you are investing for long-term growth, the important thing is not to get spooked and sell in a falling market. If you are making regular contributions, for instance to an Isa or a pension, then dips in the market can actually provide a buying opportunity.

“That said, if you are making withdrawals from your capital, you should be invested more defensively. If you’re taking money out in a falling market, you will have less money to benefit from any later recovery so you need to minimise your exposure to volatility.

“Defensive assets could include shares that regularly pay strong dividends, which are usually accessed through equity income funds, and corporate bonds.”

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Keep a calm head

Ray Black, chartered financial planner and managing director of Money Minder, says reacting emotionally is dangerous for investors.

“Keeping a calm head and not reacting emotionally to losses is more important than ever. A wise investor will not let their emotions rule their investment decisions. None of us like losses and we all hate to see our money going down in value, especially if we have worked hard to save it in the first place. Remember that what goes down in value is cheaper to buy than it was before and losses are only secured when you sell,” he advises.

Dan Brocklebank, director UK, Orbis Investments, says investors shouldn’t get too bogged down in trying to guess what will happen.

“The good news is that you don’t need to be able to forecast to be successful at investing. As in life, the best advice for investors is to focus on what you can control, and adopt healthy behaviours,” he says.

“That means things like keeping a long-term focus, avoiding over-trading, and pound-cost averaging [investing regularly to smooth out highs and lows]. Above all, avoid getting caught up in speculative manias – the best investments are almost never the ones everyone is talking about.”

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Weird and wonderful budgeting tips

Are you living from one pay day to the next and failing to save anything for your future? To get a better grip on your cashflow, try adopting some of these old-school budgeting tips with a modern-day twist

1 Make it difficult to spend money

Spending money is just too easy – so put barriers in place to limit your spending. In the old days of cash, people would take out enough money to last a week and leave their cards at home.

But many places don’t accept cash now, so you need to adopt a new approach. One tactic is to transfer a week’s spending money on to a prepaid card that doesn’t have an overdraft facility. So when the money’s gone, it’s gone.

If credit card spending is your weakness, Mutaz Qubbaj, chief executive of budgeting app Squirrel, suggests literally freezing your cards.

“If you’re super impulsive, try placing your credit and store cards in a bowl of water and putting them in the freezer. When you want to use them you’ll have to wait for the ice to thaw,” he says.

If you need extra self-control at the online checkout, Google Chrome extension Icebox replaces the ‘buy’ button on more than 400 online shopping sites with its own ‘put it on ice’ button. All ‘on ice’ items are put into a virtual shopping basket and will stay there until a pre-set cooling-off period expires.

Get your finances in shape for 2019

2 Use the jam jar method

The jam jar, pot or envelope budgeting method can help you budget and save towards different goals at the same time. But you don’t need actual jam jars or envelopes – you need multiple accounts.

Kara Gammell, who writes money-saving blog, Your Best Friend’s Guide to Cash (Yourbestfriends guidetocash.co.uk), has five instant access savings accounts for her short-term goals.

“There are a few expenses I know will come up every year, such as my tax bill, Christmas shopping and our six-week long trip to Canada each summer, so on payday, I siphon off money from my current account with a number of standing orders,” she explains.

“I transfer the money into savings right away, rather than wait until the end of the month. And do you know the best part about it? I am so used to the money whizzing out of my account automatically that I don’t even notice that it’s gone when I wake up on pay day.”

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3 Set up a virtual loose change jar

When cash was king, many people would save their loose change in a penny jar and periodically count it, bag it and pay it into their account at a bank branch.

But with card transactions now being more popular than cash, it’s no longer the norm to come back from the shops carrying a purse full of coins.

However, there are various apps that save your loose change for you. For example, if you have a Monzo current account you can set up various savings ‘pots’. If you name a pot ‘Coin Jar’, Monzo will automatically round up any card purchases over £1 to the nearest pound and save the difference in the Coin Jar pot.

Rival digital bank Starling offers a similar service but rather than saving your spare change as cash, it invests it via a link-up with the Moneybox app.

Typing in the balances makes your bottom line seem more real

4 The 1p challenge

There are various fun challenges you can do to stash money away. The 52-week saving challenge involves saving £1 in the first week of the year, £2 in week two, £3 in week three…until you’re saving £52 by the last week of the year.

If that sounds a struggle, Ricky Willis, founder of the Skint Dad blog (Skintdad.co.uk), suggests starting small with the 1p saving challenge.

“You start saving 1p and increase by 1p each and every day. So on day two, you save 2p, then 3p on day three and so on. By the last day (day 365) you will be saving £3.65. At the end of the year, you will have saved £667.95 (or £671.61 in a leap year),” he explains, “Search online for a free printable chart so you can tick off each day. If you have some extra cash, then tick off more than one day at a time as it makes saving towards the end of the year easier and quicker.”

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5 Keep track

If you want to see where every penny goes, there are plenty of apps for that. Money Dashboard, Money Hub, Yolt, and Bean aggregate all your financial accounts so you can see a complete picture of your finances in one place. You can track what you’re spending your money on and where.

But Andy Webb, founder of the Be Clever With Your Cash blog, reckons these apps can be easy to ignore. “I find a good old-fashioned spreadsheet the best way to keep on top,” he says. “Set aside an hour each month to check all your bank, savings and credit card accounts. Physically typing in the balances makes your bottom line seem more real, and gives you a heads-up if danger is around the corner.”

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6 Learn to cook

Food blogger Jack Monroe (Cookingonabootstrap.co.uk) famously fed herself and her toddler on £10 a week. Her secret? She cooked everything from scratch. Her top recipes include 3p Ping Porridge, a 9p bean burger recipe, and 18p toad-in-the-hole.

Ms Monroe is vehemently against throwing leftover food away and her blog contains a handy A to Z with what to do with leftover food. She suggests freezing fruit, herbs and vegetables that are about to go off, or blitzing certain ingredients and adding lemon, garlic, oil, nuts or seeds to make pesto. Potatoes that are starting to sprout can be planted in a little soil in a cheap plastic bucket and, within a couple of months, new potatoes will grow.

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7 Procrastinate

Procrastination might be the enemy of productivity but it can be a big help if you’re trying to save money. Faith Archer, money blogger at Much More With Less (Muchmorewithless.co.uk) suggests a ‘buy it next week’ approach to spending.

“You’re not denying yourself everything for ever, just thinking about what you actually need right now. Do you really have to buy new shampoo, shoes or sushi, or could you last till next week with what you already have?” she says. “It can make you look at the contents of your cupboards with new eyes, if you use up odds and ends, dig out old outfits, reread books, repair stuff and rediscover hobbies. If you get creative, you might be surprised at how long you can keep spending stripped down to essentials.”

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8 Travel like a local

When you’re on holiday, resolve to immerse yourself in the local area by living, eating and travelling like a local. While you might be tempted to play it safe with well-known restaurant chains, opting for local dishes such as tacos in Mexico, pho in Vietnam or paella in Spain will be cheaper.

If you’re on a backpacking trip, aim to take local buses and trains wherever possible. A ‘chicken bus’ in Central America or overnight train from Bangkok to Chiang Mai will not only cost less than a taxi or flight, but will add to the adventure too. When it comes to accommodation, Airbnbs and guest houses will offer a better insight into local life than big hotels – and save you money.

When on holiday, resolve to live, eat and travel like a local

9 Never pay full price for anything

Make a rule that you won’t spend any money on discretionary or ‘fun’ spending unless you can get a decent deal. Tastecard and Dine memberships (often given away with packaged bank accounts or insurance policies) offer discounts on thousands of restaurants and pubs, while O2 customers can use the O2 Priority app for food and drink deals.

If you’re shopping online, TopCashback and Quidco pay cashback on thousands of online purchases while discount and promo codes generate money off, or free delivery, at online checkouts.

Another tactic is to ‘abandon’ your online shopping basket. If you’re signed in to a website but shut down your browser before paying for goods, the retailer is likely to email you and offer a discount to tempt you back to complete your purchase.

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10 Have a buy nothing year (or week)

Extreme budgeters could potentially go the whole hog and not spend anything for a year. That’s what Michelle McGagh, author of The No Spend Year: How I Spent Less and Lived More did for 12 months from November 2015.

Obviously Ms McGagh had to pay for her mortgage, household bills, food, basic toiletries and cleaning products. But that’s it – beyond that she spent nothing. That meant no pub visits, no takeaways or restaurant meals, no new clothes, no holidays, and no gym memberships. She cycled everywhere, met her friends for walks or trips to free galleries or museums, and went wild swimming. By the end of her buy nothing year, Ms McGagh had saved £22,439 compared to what she spent the previous year.

Obviously, spending nothing for a year is challenging, but a week or month may be achievable.