MAKE MONEY ONLINE POSTS: 02/06/18

الثلاثاء، 6 فبراير 2018

18 Top Tax Deductions For 2018: Save on your 2017 Taxes with these Deductions

Make sure you are taking advantage of all the tax deductions for which you qualify with this simple guide to 18 of the most popular deductions.

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What Should You Accomplish Before Having Kids? Here’s What Millennials Say

There’s never a perfect time to have a baby.

You may want to have kids someday, but I bet there’s a thing or two you want to do before your life gets consumed by raising a tiny human.

Do you want to travel more?

Buy a house?

Stack money in a savings account?

Discover surveyed 1,000 millennials to find out their priorities before having a baby.

Making and saving more money were major concerns. The respondents said they wanted to have a salary of at least $84,000 and have at least $78,000 in savings.

However, less than 10% of respondents had salaries that high, and no more than 5% had that ideal amount of money in their savings.

Over 80% wanted to get married and buy a house before adding a little one to their families.

Even pets weighed on the decision to have kids, as 67% of men and 71% of women wanted to get a dog first.

Traveling and earning advanced degrees were also among the top priorities before having children. More than half of those surveyed said they wanted to travel across the country and around the world. They wanted to visit at least five states and at least two countries they hadn’t been to before.

Thirty-six percent of men and 46% of women said they wanted to get a master’s degree or higher before having a baby.

Needless to say, many of those surveyed didn’t think they were ready for parenthood. But instead of forgoing having kids altogether, they just thought it would take a little time.

Respondents said the ideal time to have a kid was between 2.6 and 7 years from that time.

Though no time may be perfect, some additional preparation and the opportunity to reach a few goals may put some would-be parents in better standing to start expanding their families.

Nicole Dow is a staff writer at The Penny Hoarder. She enjoys writing about parenthood and money.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Homemade Bread: Cheap, Delicious, Healthy, and Easier Than You Think

Over the last year, I’ve learned to make a lot more meals and staple foods at home. I have focused on this specific area of self-improvement for a few reasons. Not only does homemade food taste better, but it reduces my family’s intake of preservatives, it’s more nutritious, and it’s often substantially cheaper than what you find in the store. It does take time to make most meals from scratch, but most people get faster with experience. Once you get used to cooking from scrach, most food preparation doesn’t take much more time than going to the store, buying it, taking it home, popping it out of the package, and following the directions.

Breadmaking is a prime example of this phenomenon. Homemade bread is substantially tastier than store-purchased bread, it isn’t laden with preservatives, it is very inexpensive to make, and it doesn’t take all that much time, either.

For these reasons, I wanted to share some of my favorite recipes for homemade breads your family will love.

The Problems With Industrial Bread

Most people in the United States view the bread purchased at the supermarket as what bread should be. However, the reality is that the bread you can buy at the store looks and feels the way it does so it can be made on an industrial scale and last a long time without going bad.

There are two big explanations for this. The industrial scale process is designed to maximize profit while still producing an edible loaf of bread you can serve at dinner. This is done by using an excessive amount of yeast in order to create lots of air bubbles in the bread, hence the “light” texture of store-purchased bread. It also allows for the use of lower-quality grains because of this yeast abundance, which means the bread is far from nutrient-rich. In the United States, most recipes are trade secrets, but in the United Kingdom, the “standard recipe” known as the Chorleywood Bread Process is widely known. The goal of this process is to make a loaf of bread as cheaply as possible, foregoing flavor, nutrition, and texture along the way.

The other bothersome part of industrial breadmaking is the appearance of a healthy dose of preservatives. These preservatives are there for the sole reason of extending the shelf life of the bread, again reducing costs for the manufacturer. Every time you eat a piece of store-purchased bread, you’re getting a healthy dose of preservatives with each bite.

Take a look at the ingredient list from a loaf of Home Pride butter top honey wheat bread, which is a fairly standard store-purchased loaf in my area. I put some of the ingredients in bold font for the full effect.

Enriched wheat flour (flour, barley malt, ferrous sulfate (iron), “B” vitamins (niacin, thaimine mononitrate (B1), riboflavin (B2), folic acid)), water, sweetener (high fructose corn syrup or sugar), yeast, wheat bran, whole wheat flour, wheat gluten, molasses. Contains 2% or less of: soybean oil, salt, sweet dairy whey, butter (cream, salt, enzymes), maltodextrin, honey, corn syrup, calcium sulfate, soy flur, dough conditioners (may contain: dicalcium phosphate, calcium dioxide, sodium stearoyl lactylate, ethoxylated mono and diglycerides, mono and diglycerides, and/or datem), yeast nutrients (may contain: ammonium sulfate, ammonium chloride, calcium carbonate, monocalcium phosphate, and/or ammonium phosphate), cornstarch, wheat starch, vinegar, natural flavor, beta carotene (color), enzymes, calcium propionate (to retain freshness), soy lecithin.

This doesn’t sound like a wholesome food we should be serving our families, does it? This sounds like a chemical-laden substance we wouldn’t serve our worst enemies. Yet, this is exactly what store-bought bread is made from.

How to Make Your Own Tasty Homemade Bread, Easily and Cheaply

While making your own bread is easy, over time I’ve found that many people are simply intimidated by the seemingly complex and work-intensive process of making bread. If you’ve never made your own before, it may seem difficult and loaded with steps and significant work.

However, this couldn’t be further from the truth. The reality is, bread is quite easy to make at home, and you only need a few staple ingredients to make a simple loaf. Here’s exactly how to make a delicious loaf at home from scratch.

What you see in the picture above is every ingredient and piece of equipment that you need to make a loaf of bread (except the oven). Nothing here is complicated at all; these are very basic ingredients and tools you can get very inexpensively at your local grocery store. In fact, the ingredients on that table (except for the yeast) are enough to make several loaves of bread.

Here’s the equipment you need…

One large mixing bowl A second one is useful, but optional – you can get by with one if you’re willing to wash it in the middle of the process.
One spoon You need a spoon to stir the dough.
One measuring cup A 1/4 or 1/2 cup measuring cup will do the job.
One measuring spoon A one-teaspoon measurer will be just perfect.
One bread pan Obviously, to bake the bread in.
One hand towel This is just to cover the bread dough as it rises so it doesn’t get drafts or dust or anything on it.

That’s all you need, and it’s all stuff that’s pretty common in most kitchens.

Now, for the food ingredients…

1/4 cup milk
5 teaspoons sugar (or 1 1/2 tablespoons)
1 teaspoons salt
5 teaspoons butter (or 1 1/2 tablespoons)
1 package active dry yeast (you can get yeast near the flour at your local grocery store)
2 1/2 to 3 1/2 cups flour (get unbleached white for your first attempt)
Corn starch or nonstick cooking spray (just to prevent the bread from sticking to the bowl or pan)

That’s all you need for homemade bread, period. These items are pretty basic, so check your grocery store circular and look for online coupons (we update our coupon finder daily) to see if you can find these items on sale or discounted bulk. There are some neat things you can do with added ingredients, which I’ll talk about later, but all you need is the stuff listed above and nothing more.

When I bake bread, I normally mix the dough with my KitchenAid stand mixer. However, making bread is easy enough that this is just a convenience and not a requirement by any means. Basically, instead of doing the kneading and stirring described below, I just flip a switch and this machine does it for me.

OK, let’s get started. First, you should warm up the bowl – the best way to do that is to just fill it with hot water, then dump out the hot water, leaving the bowl rather warm. Then, mix up the yeast according to the directions on the packet. Usually, it will say something along the lines of “add a cup of warm water to the yeast and stir.” What you’ll end up with is some tan-colored water with some bubbles in it, as shown above. You should stir this until there are no lumps in the yeast.

Melt the butter in the microwave, then add it, the milk, the sugar, and the salt to the yeast liquid and stir it up until everything looks the same (a very light tan liquid). Then add two cups of flour to the mix – don’t add the rest yet. Your bowl should look something like what’s shown above, where I have the spoon on board ready to stir.

Start stirring, and then add the flour about 1/4 cup at a time every minute or so. It will stick to the spoon big time at first – don’t worry about it. Keep stirring and adding flour until the dough is still slightly sticky, but it doesn’t stick to your hands in any significant way. Also, it should largely clean the sides of the bowl, leaving just a thin layer of floury stuff. It’ll look something like the above.

Now comes the fun part: kneading. Take a bit of flour between your hands and then rub them together over the top of an area on the table where you’re going to knead the dough. Do this a few times until there’s an area on the table lightly covered in flour. Then grab the dough ball out of the bowl, slap it down on the table, and start beating on it. Do this for ten minutes. Just take the dough, punch it flat, then fold it back up into a ball again, and repeat several times. I also like to take it in my hands and squeeze and twist it.

When the ten minutes are up, shape it into a ball (like shown above), then either clean up the bowl you were using before or get out another bowl. Either coat the inside lightly with corn starch or nonstick cooking spray, depending on your preference, then put the ball of dough inside the bowl.

Put a cloth over the bowl and sit it somewhere fairly warm for an hour. If you have a warming area on your stove top, that’s a great place to put it – set the warming area on as low as it will go, as I’m doing in the picture above. This is a good time to clean everything else and put the stuff away, but leave the flour out and the floured area on your table untouched.

Here’s what the dough looks like before rising…

… and then an hour later after rising, still in the bowl…

It should be roughly double the size that it was before, but don’t sweat it too much if it’s larger or smaller than that, as long as it rose at least some amount. Punch the dough down (three or four good whacks will cause it to shrink back down to normal), then lay the dough out on the floured area and spread it out in a rectangle shape, with one side being roughly the length of the bread pan and the other side being about a bread pan and a half long.

You may need to put a bit more flour on it and on the table to prevent sticking. Then, roll it up! The roll should be roughly the same size as the bread pan, as shown below.

Tuck the ends of the roll underneath, with the “under” side being where the seam is. Then spray the bread pan down with nonstick cooking spray (or coat it with cornmeal) and put the loaf inside of the pan.

Cover that loaf up with the towel, put it back where it was before, and wait another hour. This is a good time to clean everything up, then go do something else fun. The loaf should raise some more:

Put that loaf in the oven at 400 degrees Fahrenheit (200 degrees Celsius) for thirty minutes. When it’s done, pull it out and immediately remove it from the pan to cool. It’ll look something like this, hopefully.

Let it cool down completely before slicing.

This bread will make mind-blowing toast. Seriously, pop a slice in the toaster, get it golden brown, and spread a bit of butter or margarine on it. Truly, truly sublime.

Tips for Creating Something Beyond the Basic White Loaf

If you get into making your own bread (and why not? It’s inexpensive, tasty, and healthy), you’ll eventually want to start experimenting. Here are some tips I’ve learned over the last year or so.

Bread-making Tips I’ve Learned

Different flours work differently. If you try making a rye bread or a whole wheat bread, you’ll discover the flour has different properties. Just stick with adding it slowly to the bowl until it’s just barely not sticking to your hands, and you’ll be fine. Whole wheat flour, for instance, generally requires about half a cup less flour than white flour to reach the right point.
For a delicious Italian bread, replace the salt with garlic salt and before you start stirring, add in some Italian seasonings, like oregano and rosemary – or an Italian seasoning mix.
You can easily double this recipe and make two loaves at once. The time investment is virtually the same and you get twice the bread.
Eventually, you’ll start really experimenting. Making pizza dough from scratch is similarly easy, as are cinnamon rolls. I’ve reached the point where I feel confident making most bread recipes in the oven (except for sourdough loaves, which always seem to turn out wrong).
What’s the take home? Baking homemade bread is a very worthwhile thing to try. It’s inexpensive, healthy, and teaches you a lot about how to cook at home. Best of all (for me, anyway), it makes amazingly good toast – I love to start off my day with a slice of toast made from homemade bread and a cup of tea.

The Bottom Line

So, there you have it. Baking your own bread isn’t nearly as hard as people make it out to be, and I hope I proved that with the step-by-step instructions I shared above. I hope you’ll try this recipe for your own family before you buy another loaf of bread from the store. Once you start making your own bread, you’ll be hooked.

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The post Homemade Bread: Cheap, Delicious, Healthy, and Easier Than You Think appeared first on The Simple Dollar.

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What the Record 1,175-Point Dow Jones Drop Really Means (Hint: Not Much)

Yesterday, the Dow Jones dropped by a record 1,175 points. Yikes.

If you’ve been checking out your 401(k) or other investments in recent months and giggling as they skyrocketed upward, this sudden turn of events is shocking.

What should you do? Is it time to sell? Get out while the getting is still good? What does this mean for you and your financial future?

Honestly, not much. At least not yet. The stock market is just doing its thing.

The Dow Jones Big Picture

The Dow Jones industrial average has been a wild ride this year. It wasn’t very long ago (Aug. 1, 2017, to be exact) that it closed at 22,000 for the first time in history. Since then, it has continued to climb.

Thanks to the stock market’s continued growth, we’ve become accustomed to seeing our own portfolios rise and rise. So when you see a fall of 1,175, yeah, it’s a bit of a shock.

But before you hit the panic button, consider these things.

The Dow closed Monday at 24,345.75 points. Yes, that’s lower than it has been lately, but that number seemed unthinkably high just a few months ago.

If you’re planning for retirement or any other long-term investment, you can’t afford to freak out over short-term fluctuations in the stock market. Most long-term investors are best off simply waiting it out.

While the Dow dropped by 4.6% on Monday, and that number was close to 10% below its January high, it’s nothing compared with the 22.6% drop on Black Monday, Oct. 19, 1987.

Jaime Quiros, a certified financial planner at FBB Capital Partners, told CNN Money that “this is just a natural breath in the market. We were expecting a correction throughout all 2017, we were expecting it to take a breath. How deep it is we just don’t know.”

While it sounds scary to hear that we just had the largest point drop in Dow Jones history, it’s important to consider the context. The higher the Dow Jones number, the larger the ups and downs will be by point value.

If you want to play the comparison game, focus on the percentage between now and the epic falls of years past. Then, take a breath of your own, and trust the market to correct itself.

Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.

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Here’s Exactly How to Start Investing — Even If You’re Completely Broke

In the 21st century, we like things small.

Our headphones, computers and dogs are all shrinking. Teacup pigs are surging in popularity (at least in meme form). File compression is such a well-known part of everyday life that an entire sitcom is based on the concept.

It’s no surprise we like our investments small, too.

Why Millennials Love Microinvesting

Investment, as a term, seems way too big for most of us. It’s too much to learn, too much responsibility, too much risk — just too much.

Microinvesting, on the other hand, is just plain adorable. Snappable, ‘grammable adorableness.

Like a pig small enough to fit inside a teacup, microinvesting is about investments small enough to fit anyone’s budget.

Yes, even yours.

Even better, this strategy typically comes through an app.

Most importantly, you don’t really have to know anything about the stock market to make this kind of investment.

Our Favorite Microinvesting Apps

Microinvesting apps let you automatically invest small amounts of money into a portfolio they craft for you. You set up a profile that lets the app know the best kinds of things to invest your money in.

Here are some of our favorite microinvesting apps:

Acorns

Acorns makes it easy to invest without missing the money you set aside. It rounds up debit- or credit-card purchases to the nearest dollar and invests your digital change.

Penny Hoarder Dana Sitar shared her Acorns review — she saved $116 in three months, about $35 a month, by connecting one debit card to the app and forgetting about it. At that rate, you’d put away $420 a year. And if you use your credit cards more frequently, your round-ups could amount to much more.

Stash

Stash lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000. (The first month is fee-free.)

Stash curates investments from professional fund managers and investors and lets you choose where to put your money. But it leaves the complicated investment terms out of it. You just choose from a set of simple portfolios reflecting your beliefs, interests and goals.

Betterment

Betterment is a robo-advisor with an automated investing service with no minimum deposit, so you can get in on the action regardless of how much you want to invest. The annual fee hovers at 0.25%.

Perhaps Betterment’s best feature is its personalized recommendation. Tell it your age, employment status (retired or not retired) and your annual income to get personalized suggestions for retirement plans and general investing. Once you sign up, the Betterment team will manage it all for you.

Wealthfront

Similar to Betterment, Wealthfront is a robo-investment company. It’s an online financial company that uses sophisticated software instead of human stockbrokers to manage your investments.

Both companies use software robots — proprietary programs that act as robo-advisers — to steer your investments and cheaply do things stockbrokers and money managers would charge you high fees to do.

Learn more about both in our comparison of Betterment versus Wealthfront.

Rize

Rize is a pay-what-you-want, 256-bit-encrypted (bank-level security) web app that’ll help get your savings on track. You’ll create a goal and set a deadline.

These could be short-term goals, like saving for a weekend road trip or meeting your monthly student loan payment. You’ll even earn 1.16% interest on your balance. (For some context, that’s 19 times higher than the national average for savings accounts.)

If you have a longer-term goal, have Rize invest the money for you and help you maximize returns. It asks you to contribute at least $2 a month for that service and will take a 0.25% fee of assets invested (comparatively low for investor fees).

MoneyLion

MoneyLion is an all-in-one app for managing your personal finances. Basically, it offers the financial services you’d typically get from three or four different banks or providers, and they’re all bundled into one place.

MoneyLion connects with all of your bank, credit card, student loan and other financial accounts. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.

Robinhood

The Robinhood app is best known for having no trading fees. You can buy and sell stocks on U.S. exchanges without paying a commission, and you’ll pay no account maintenance fees.

In keeping with its stripped-down approach, Robinhood doesn’t offer investment research or advice on your portfolio.

WiseBanyan

You can start investing with as little as $1 on WiseBanyan, and the app charges no monthly account fees or trade fees.

Fees do kick in once you opt to upgrade to premium services. You can mix and match services to create personalized premium packages. These packages include detailed investment strategies, increased personalization and additional automation services.

Where Your Micro-Money Goes

When you invest through a microinvesting app, your money is typically going into exchange traded funds, or ETFs.

ETFs are treated like other funds in the stock market, but they include investments in several companies.

And they let investors like you own portions of shares in stocks, instead of full shares — which you might not otherwise be able to afford.

Is Microinvesting Worth It?

If you’re even a little math-minded, you might have realized: If you invest a small amount, you can only expect a small return, right?

You probably won’t become a millionaire or retire early from investing your spare change.

Realistically, these apps could help you set aside a few hundred dollars a year. It’s nothing to write Warren Buffett about — but it’s no small feat if you’ve been living paycheck to paycheck, wondering how you can get ahead.

You could have $500 in your emergency fund by the end of the year — before the next thing on your car breaks.

Or you can use microinvesting as a first step into bigger investments.

Or just save for one more year, and you can get yourself a teacup pig!

Whichever you choose, life is about to get a lot more Insta-worthy.

Dana Sitar (dana@thepennyhoarder.com) is a branded content editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder.

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Stocks repeatedly sink and recover as wild ride continues

Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.

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This Remote Transcription Job Might Just Make You Feel Like a Detective

Got some good headphones and solid typing skills? Then we’ve got a flexible work-from-home gig for you!

Net Transcripts, a provider of transcription services related to law enforcement and criminal justice, is looking for people to work-from-home as independent contractors.

You can accept as few or as many transcription orders as you want, so applicants seeking both full- and part-time work are encouraged to apply.

But if transcribing isn’t really your thing (or your typing skills are similar to Flash the Sloth from Zootopia), no worries! We’re always posting work-from-home opportunities on our Jobs page on Facebook.

Law Enforcement Transcription Jobs at Net Transcripts

To work as a transcriptionist for Net Transcripts, you must be a U.S. citizen and pass a criminal background check.

Pay: Not specified

Responsibilities include:

Transcribing audio content related to law enforcement, such as criminal investigations
Turning around transcription orders in one to five business days
Typing and proofing documents to at least 98% accuracy

Applicants for this position must have:

Previous multi-speaker transcription service experience
The ability to type 80 words per minute
Strong grammar and proofreading skills
A high-speed internet connection
A PC with a transcription software package
Microsoft Word and Excel knowledge
Good quality headphones and a foot pedal for audio playback

Previous experience with law enforcement or court reporting transcription is a big plus, but not a requirement.

Apply here for the law enforcement transcription position at Net Transcripts.

Kaitlyn Blount is a junior staff writer at The Penny Hoarder.

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First 50 Funds Interview: Peter Ewins, F&C Global Smaller Companies Trust

Fund manager Peter Ewins gives Moneywise’s Helen Knapman the lowdown on F&C Global Smaller Companies Trust – a Moneywise First 50 fund

What is F&C Global Smaller Companies?

The name is the clue – it’s an investment trust that invests in smaller companies listed on the world’s stock markets and aims to provide a one-stop shop for investors. We try to have a diversified portfolio across different markets, sectors and companies so that we deliver a steady return for investors. We also have 47 years of annual dividend growth. This isn’t a high-yielding investment trust but dividend growth is indicative of a healthy portfolio.

Why are your top holdings investments in other funds?

When I took over the investment trust, I looked at the returns we’d been delivering in emerging markets. I found other specialist fund managers in those areas had generated better returns than we had.

So I started to use third party managed funds from around 2006, particularly for Asian funds and I took the same approach in Japan when our in-house Japanese expert left.

Around 21% of the trust is in these funds – of this 21%, 4% is made up of investment trusts with the rest in open-ended funds.

The other 79% of the trust is managed internally and is invested in individual companies in Europe, the UK, and the US. Other global company funds tend only to hold individual companies, so this is a different approach, but it has worked and we’ve done better because of it.

How do you pick the funds and stocks you invest in?

There’s no rocket science to picking funds. I don’t want to be constantly buying and selling funds, but we do change the make-up of funds based on performance and management.

When it comes to company stock picking, three of us pick stocks and we divide the market into sectors. I research financials, engineers, food companies, transport and some other sectors. Over the years, you build up a knowledge base and contacts. We meet a lot of management teams regularly; we interact with analysts; and then we pick a diverse portfolio.

Our style is quality biased – we look to invest where there is a track record of good performance by the company and management team. At the same time, we’re not averse to investing in the cyclical side of the market [buying stocks at the low point in the business cycle and selling at the high point].

We hold around 80 UK companies. We also have a European team with two main idea generators and the same on the US side. We hold about 50 to 60 US companies, while in Europe we’ve got around 40.

Moneywise First 50 Funds - 10 investment trusts for starters

How often do you buy and sell?

Purchases plus sales tend to represent about 60% of the size of the fund at the end of the year. That implies around 30% in and 30% out, which is about a three-and-a-half year holding period.

What have you recently bought and sold?

We’ve introduced two new Asian smaller companies funds, one managed by Pinebridge and the other by HSBC. We exited Advance Frontier Markets investment trust as it was moving towards investing in individual companies rather than other funds.

In the UK, we’ve bought Greencore – a convenience food producer for the likes of Marks and Spencer. It has a good track record of growing its business and serving customers well. It made a big acquisition in the US in 2016, which depressed the share price for a while [making it a good opportunity to buy]. We’ve also dropped some companies that have been profitable over the years, but that are now fully valued. These include engineering firms such as Hill & Smith and Bodycote.

In the US, we’ve bought Monro – a tyre, brakes, and motor repair business. It’s had a challenging year, but the valuation is relatively attractive. In Europe, we’ve bought Fluidra – a Spanish fi rm supplying swimming pools with equipment. The market is picking up and it has announced a merger with a US player. In terms of selling, we’ve sold Interpump – an Italian-based engineering company and we’ve bailed out of CTT – a Portuguese postal operator.

f-c-small-table-2.PNG

What’s been your best and worst investment decision?

Long-term, the best decision has been British property company CLS Holdings, which has been a multibagger [an investment that has risen multiple times the initial investment value]. It’s made sensible acquisitions over the years and has made us a lot of money.

The best recent stock we’ve had is [tonic water company] Fever-Tree – we’ve held it since 2014, but we’ve just sold out of it. The job it’s done in the UK is fantastic, but growth is bound to slow and there have been talks about [rival] Schweppes pushing back. We’ve lost money in a few oil stocks over the years. Bowleven – a Cameroonian gas and oil company – was one of the worst. We thought the process for monetising oil and gas would be easier. We want companies that have existing production.

Turn First 50 Funds into a potent portfolio

What’s your top tip for a beginner investor?

Build a diversified portfolio with funds run by teams with a track record of deliverability and competitive fees. If you’re a beginner, build it up over time – regular saving cuts the risk of buying at the top of the market.

To view Moneywise’s First 50 Funds for beginners, visit www.moneywise. co.uk/fi rst-50-funds.

The man behind the fund

Peter Ewins has been with F&C since 1996 and became the lead manager of F&C Global Smaller Companies in August 2005. Prior to this he worked for Municipal Mutual Insurance and Commercial Union Insurance, as well as ESN Pension Management. Peter has a BA (Hons) in Economics & Statistics from the University of Exeter and is a member of the CFA Society of the UK.

F&C Global Smaller Companies key stats

Launched: 1889
Fund size: £849.4 million
Number of holdings: Around 200(i)
Yield: 0.9%
Ongoing charges figure (OCF): 0.84%

f-c-small-table-1.PNG

Source: F&C Global Smaller Companies’ December 2017 factsheet (i) Source: Fandc.com, 3 January 2018

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Why We Don’t Accept Certain Credit Cards

In today’s technology-driven world, there are more options than ever to make a payment, especially for small businesses. For instance, with Square, businesses can allow customers to swipe a card on an iPad or scan their Mobile Wallet on their phone — all for about $50 in equipment!

With these advances, many more people are choosing credit over cash. In fact, there were 33.8 billion credit card payments in the United States worth $3.16 trillion in 2015 — an increase of $6.9 billion since 2012, according to The Federal Reserve Payments Study 2016. On the whole, the study found that credit card payments grew at an annual rate of 8% by number from 2012 to 2015.

However, while credit cards as a whole may be more widely accepted by businesses large and small, not all credit cards are accepted everywhere. Cards like American Express, Discover, and MasterCard may have some limitations.

Why is that, and what can you do as a consumer?

Understanding the credit card networks

There are four major credit card networks within the United States — American Express, Discover, MasterCard, and Visa. Out of the four, Visa is by far the largest, both in the U.S. and globally. Around the world, Visa has 44 million merchant locations (as of Sept. 30, 2016) and 3.1 billion Visa cards issued (as of Dec. 31, 2016), according to their most recent Facts & Figures Report.

worldwide credit card circulation visa mastercard american express

In addition to these networks, there are 10 major credit card issuers in the U.S. — American Express, Bank of America, Barclays, Capital One, Citigroup, Discover, JPMorgan, Synchrony, U.S. Bancorp, and Wells Fargo. As of 2014, four of the 10 — Citigroup, JPMorgan, Bank of America, and Capital One — had more than half (57%) of the market share.

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Understanding the merchant fees

As we can see above, there are literally billions of credit cards available from all four of the major credit card networks. So, if the top 10 banks control 87.5% of the credit card circulation (as of 2014), why aren’t they accepted everywhere?

The answer: Merchant fees.

What are merchant fees?

Merchant fees is the catch-all term for all of the fees associated with setting up a merchant account so you can accept credit cards, as well as the fees to process those transactions. In general, businesses will face a group of fees to set up and maintain their account as well as pay a fee with each credit card transaction. Some of these costs include a one-time setup fee, monthly account fees, annual account fees, transactional fees, interchange fees, monthly minimum fees, statement fees, network fees, and more.

For most businesses, the setup and maintenance fees are a worthwhile investment — once you create your merchant account, you’re able to accept any form of credit cards. The reason businesses might not accept all credit cards is the transactional fees associated with each card.

How do merchant fees work?

To process a credit card payment, the merchant must pay a fee to three different “middlemen” — the credit card network (Visa, Discover, MasterCard, or American Express), the credit card’s issuing bank (Capital One, JPMorgan, Bank of America, etc.) and the acquiring bank (your banking institution). These fees can range from 1-3%, but for some cards, like American Express, they’re as high as 3.5% per transaction.

As you can see, these fees could start to add up. For instance, let’s say a small business does $100,000 in credit card sales a month:

If their sales only come from Visa cards that have 1.15% transactional fee, the business will pay $1,150 a month in credit card fees.
If 50% of their sales come from 1.15% Visa cards and 50% from 3.5% American Express cards, the business will pay $2,325 a month in credit card fees.

That’s a difference of $14,100 a year in credit card fees alone!

Who pays the merchant fees?

Retailers pay all fees associated with setting up their accounts and processing the transactions. However, in 2012, a court settlement made it possible for retailers to pass along transaction fees to consumers in the form of a credit card surcharge. This was repealed and thrown out in 2016, though, putting the fee burden back on the businesses.

Additionally, unlike debit cards, credit cards have no fee caps. As part of the Durbin Amendment included in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, certain debit cards have their interchange fees capped at 21 cents plus 0.05% of the transaction value.

Because no similar sort of legislation exists for credit cards, the card networks and banks can set their own fee rates that retailers have to pay if they want to accept that credit card.

Why do some cards charge higher fees?

It comes down to their business model — do they want to generate most of their income from transactional fees or interest payments? In the case of American Express, their business model is based around generating income from swipe fees, not interest. Many of their most notable cards, such as , charge no interest whatsoever. Because it’s a charge card rather than a credit card, customers must pay their balance off in full each month or face late fees. The card also charges a $550 annual fee.

Alternatives to not-widely-accepted credit cards

Credit cards that aren’t widely accepted, like American Express and Discover, can still be used to make purchases at hundreds of thousands of retailers around the world. However, if you prefer to stick with your Amex or Discover card, you’ll need to have a backup plan in place for when it isn’t accepted.

1. Ask if there’s a spend minimum.

As mentioned above, once a retailer sets up their merchant account, they’re able to accept any of the credit cards. In order to accept a card with high transactional fees, though, they may require you to spend a minimum amount to help offset those costs. If you’d really prefer to use a certain card that isn’t widely accepted, don’t hesitate to ask about the spend minimum first.

2. Carry a backup card, just in case.

Keeping a backup credit card in your wallet is a good idea for those “just in case” moments where your primary card isn’t accepted. For a backup card, it’s a good idea to make it a Visa credit card since they’re accepted at the most locations worldwide.

Additionally, why not make it one of the best rewards credit cards so you can earn points, miles, cash back, and other perks as well? The Chase Sapphire Preferred® Card earns 2x points on travel and restaurants worldwide and 1X points on other purchases. If you want an option without an annual fee, the Chase Freedom® earns 5% cash back on bonus categories (up to $1,500 in combined purchases), and unlimited 1% cash back on other purchases.

3. Keep a debit card handy.

If you’ll recall the Durbin Amendment mentioned above, debit cards have caps on the amount that can be charged on transactional fees. This means that merchants are more likely to accept debit cards over credit cards. As with certain credit cards, though, there may be a spend minimum for debit purchases since there are some small fees.

4. Pay in cold, hard cash.

While we may be using plastic more often, cash is still king when it comes to making payments. If you’d prefer not to carry extra cards, make sure you have cash on hand at all times if your primary credit card is one that isn’t widely accepted.

The bottom line

There’s a lot more that goes into accepting payment for a purchase than just saying “Cash or credit?” Because of varying merchant fees, retailers may choose to accept or not accept certain cards, which means you may not be able to use your preferred method of payment at every business. If your preferred credit card is one that’s not widely accepted, like American Express or Discover, make sure to have a backup plan in place.

The post Why We Don’t Accept Certain Credit Cards appeared first on The Simple Dollar.

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Industry Insider: Winners and losers one year on from Article 50

It is now almost one year since the UK government triggered Article 50 – the clause in the Lisbon Treaty that officially kick-started the UK’s departure from the European Union.

But since the Prime Minister pulled the trigger on 29 March 2017 to 1 February 2018, equity markets across the board – including Britain – continued climbing.

BP shines light on dividend income amid wider market sell-off

This will have come as a surprise to those who worried that Brexit-related uncertainty would cause choppy UK market returns and even a prolonged correction – myself included.

As always though, in terms of stock markets there have been winners and losers. Globally-speaking, emerging market and Asia Pacific equities achieved the strongest returns over the period*. This is likely the result of Chinese tech giants such as Alibaba, Baidu and Tencent significantly contributing to the broader region’s market returns.

‘UK equities are still deeply unfashionable but that creates investment opportunities’

In contrast, despite hitting record highs over the past year, the US’s S&P 500 and London’s FTSE 100 stock market indices have not quite kept pace with their emerging market peers. In the case of the UK stock market, in particular, a lot of these returns have been driven by companies that reside further down the market-cap spectrum (often with more exposure to the domestic UK economy). While the FTSE 100 returned 5.2%, the FTSE 250 and FTSE Small Cap indices are up 9.2% and 11.7% respectively*.

Due to the stellar gains made in the UK small- and midcap space, the IA UK Smaller Companies sector has been the second-best performer in the Investment Association, with an average total return in sterling terms of 19.5%*.

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Within this sector, the best performer has been Jupiter UK Smaller Companies fund, which is up 39.5%*. This is followed by Old Mutual UK Smaller Companies Focus and TB Amati UK Smaller Companies, which have returned 30.1% and 27.4% respectively*. In contrast, MI Downing UK Micro-Cap Growth and Schroder UK Dynamic Smaller Companies are the only funds in the sector to have posted single-digit returns with respective gains of 3.6% and 9.4%*.

Industry Insider: Cautious optimism is the catchphrase in 2018

Meanwhile, the IA UK All Companies sector, which is home to UK equity growth funds that invest across the cap spectrum, is in 13th place for its average one-year total return of 8.2%*. Within this, the top performers have been small-cap biased Elite Webb Capital Smaller Companies Income & Growth and MI Chelverton UK Equity Growth, both of which have returns of more than 30%.

The IA UK Equity Income sector fared slightly worse than its growth counterpart with an average total return of 5.8%. Winners over the past year have been Man GLG UK Income (17.4%*) and MI Chelverton UK Equity Income (16.4%*), a member of Moneywise’s First 50 Funds, while LF Woodford Equity Income (also a First 50 Fund) and Rathbone Blue Chip Income and Growth have brought up the rear.

For UK investors who have held bonds rather than equities since Article 50 was triggered, the year has been less fruitful. The IA UK Gilts sector made a loss on average, down 1%*. Only one fund, iShares Over 15 Years Gilts Index, made it in to positive territory with a tiny gain of 0.08%*.

First 50 update: 'People shouldn’t worry too much about politics' says Witan

Elsewhere in the bond market, the popular IA Sterling Strategic Bond sector has returned 3.5%* on average. While Tideway GBP Hybrid capital and GAM Star Credit Opportunities returned more than 10%, four funds have lost small amounts, with Virgin Income down 2.6%*.

It is surprising that UK-facing smaller companies have been the key drivers behind the UK equity market’s strong performance. Nobody knows what impact Brexit will have but, with only until March 2019 to strike a deal with the EU, investors must tread carefully and be well-diversified.

Darius McDermott is managing director at Chelsea Financial Services and FundCalibre

* Total returns in sterling from 29 March 2017 to 1 February 2018. Source: FE Analytics.

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Mr McDermott’s views are his own and do not constitute financial advice.