MAKE MONEY ONLINE POSTS: 06/12/19

الأربعاء، 12 يونيو 2019

“Most people overestimate what they can do in one year and underestimate what they can do in ten years.” – Bill Gates

One of the biggest changes in my perspective on personal finance since I started The Simple Dollar is how to succeed at your goals.

When I first started to turn things around, I set what I thought was an enormous, audacious goal. I wanted to pay off all of our debts, which were in the mid five figures at the time, in a year. It seemed practically impossible. It was this big intimidating goal. I decided to throw everything I had at it.

For a while, I spent a ton of time and focus every single day figuring out how I could squeak out a few more dollars to throw at that debt. I had a nice vintage Magic: the Gathering card and sports card collection from my teen years and I sold off many of the valuable cards one at a time to maximize my return. Sarah and I started preparing all of our meals at home and I started taking leftovers to work every single day. I sold off almost all of my video games, the majority of my books, and most of my DVD collection, mostly piece by piece to maximize return. I did thing after thing, trick after trick, step after step to cut my spending as much as possible.

When my enthusiasm for all of that started to wane a little, I started The Simple Dollar so I could channel my passion for writing into it. I’d write about my experiences with every little savings tactic I could find. At the same time, I had some moderate success repairing computers for a number of elderly people who mostly used them to email relatives (this was basically before social networking became a big thing) and mostly just enjoyed having someone to talk to. They’d call me to come fix some minor problem and I’d end up having coffee with them and listen to stories about their grandchildren and then pay me some negligible amount for the effort.

What happened? In less than a year, all of that debt was gone. I had thrown everything but the kitchen sink at all of that debt and it had vanished.

There is a giant problem with this success story. It only really worked because I was able to sustain a ridiculous amount of effort over the course of an entire year. We got there, but it was only due to a day-in-day-out obsession with saving every penny and earning every extra penny that we could.

Yet, in the back of my head, it set this false idea that the best way to reach a big goal is to set a big goal and throw everything but the kitchen sink at it.

Over the following years, I used this approach with all kinds of goals and… it mostly failed. I’ve tried it with weight loss. Failed. I tried it with various fitness goals. Failed. I tried it with building The Simple Dollar and there it somewhat succeeded, but even that was an illusion (I’ll get back to that).

So, what’s the story here? I now think that my ability to achieve that huge goal in a year was an aberration that only worked because there was a perfect storm of elements. My infant son and my growing understanding of what it meant to be a father was a huge emotional driver, as was the realization that a second child was coming near the very end of that year. I was able to utilize my passion for writing to help continue and maintain my efforts by writing for The Simple Dollar, and that “juice” was only there because writing wasn’t actually my main career. I had a lot of spending that I could cut from my life and a lot of items with at least some value in the closet that I could sell off. The progress was easy to see and easy to track and additional effort translated pretty nicely into additional observable progress.

The thing is, for most goals, you’re not going to have all of those perks. You aren’t going to have steady observable progress toward your goal – even with perfect effort, you’re going to often progress in fits and starts. You won’t always have great motivation. You won’t always have a ton of low-hanging fruit that makes progress relatively easy. You won’t always have outlets that tap into your other interests.

Several years ago, Sarah and I decided that we were going to aim for early retirement, and I knew right then and there that the strategies that helped us pay off our debt so quickly probably weren’t going to get us to financial independence any time soon – and I was right.

For this goal, many of the advantages we had during our initial push to debt freedom were missing. We can’t make steady progress because of the vagaries of the stock market – a month of busting our rear end could see a drop in our retirement savings, especially as our balance grows. We don’t have a lot of low hanging fruit in our life that can bolster our savings rate or free up some cash for our goal. The honeymoon period of financial improvement is over – we don’t have that same burning motivation we had at the start of our debt repayment. Not only that, there’s no measure by which financial independence isn’t a lot of years in the future. It is a really long term goal.

If we focused entirely on our big destination goal, we’re doomed to fail. If we use the strategies we used during our debt repayment, we’re doomed to fail.

We need a different approach, and for us, the best approach to an enormous goal that’s more than a few months into the future is to grind it out.

What do I mean by “grind it out”? I mean that the focus of our efforts needs to be on the very short term, where we create routines and habits that produce slow and steady progress toward the big goal, and our success is measured by those efforts alone.

Do I have a good grip on my spending habits today? Am I doing what I can to keep expenses low today? Am I ensuring that we don’t raise the expense of our tastes too high and keeping treats rare enough that they’re genuinely appreciated? Are we steadily contributing to our investments this month?

In other words, if your big goal is a long term goal, focusing just on the end result probably won’t get you there. Your “honeymoon period” will end and you’ll find yourself falling back into old, bad habits. This is why very few people succeed at long term diets – they’re so focused on the end goal that they’re not actually focused on sustainable day-in-day-out meaningful change in their lives and thus, when the excitement wears thin and the siren’s call of old habits is loud, they fall back on those old habits.

Instead, if you have a big long term goal, you need to focus on how you can mold your everyday life to make that big goal a likely outcome of your normal everyday routines. As I discussed in this week’s mailbag, this is akin to Scott Adams’ concept of a “system” (where you’re consistently doing a certain improved behavior or set of behaviors to increase positive outcomes) but the big difference here is that you do still have a long term goal. You’re choosing the daily behaviors to push yourself toward your big goal.

If you have a huge goal in front of you that’s more than a month or two in the future, I strongly encourage you to focus on daily routines above all else. What can you do today to nudge yourself closer to that goal? Even more important, what can you do today that’s repeatable tomorrow and the day after that and the day after that to nudge yourself closer to that goal? Which of your normal behaviors, if you were to change it in some fashion, would help lead to the big goal you desire? How can you change that behavior? How can you sustain that change? (Hint: the book Triggers by Marshall Goldsmith is invaluable here).

My own experience has been that it’s good to really focus on changing one or two behaviors at a time unless a serious life change is going on which is already forcing you to make a whole bunch of changes. I tend to do this by executing thirty day challenges where I really focus hard on that behavioral change as a short term goal, and if I like the results from it, I move on to applying techniques from Triggers to transform it into a permanent change in my behavior.

Just remember, when you’re trying to achieve a monumental goal, it’s not the big steps that matter. It’s the daily grind, and figuring out how to make that grind tolerable and even rewarding and enjoyable is the key to achieving almost every big goal in life, whether it’s debt repayment or financial independence or something else entirely.

Good luck!

The post The Grind appeared first on The Simple Dollar.

Source The Simple Dollar http://bit.ly/2X6wb6q

This Woman Bounced Back From Budgeting Failures and Became The Budget Mom

Are Free Credit Scores ‘Fake’ Credit Scores?

In the credit scoring world, two credit scoring platforms dominate the market. FICO is the most commonly used brand of credit score. However, it’s certainly not the only game in town. Between mid-2017 and 2018, over 10.5 billion VantageScore credit scores were used by 2,800 unique users.

You Have Hundreds of Credit Scores

While FICO and VantageScore are the most visible credit scores in the U.S. lending market, there are many other types of credit scores in use that you’ve probably never heard of.

All told, when you combine the different credit score brands, different generations, and different varieties, there are hundreds, perhaps even thousands, of credit scores commercially available and in use today.

Read more: Comparing Your Many Credit Scores

What Is a ‘Real’ Credit Score?

The Equal Credit Opportunity Act (ECOA) states that a credit scoring system must meet certain criteria in order to be used by a lender in the United States. A score must be both “empirically derived” and “statistically and demonstrably sound.” What this means in English is that a scoring system has to be built using generally accepted scientific processes, and it has to actually work.

Any credit score that a) meets these ECOA requirements, b) is commercially available to lenders, and c) is being used for underwriting and risk assessment is a real credit score.

The branding of the score is immaterial, so don’t fall for the spin that only certain credit scores are “real’” and all others are fake. That’s simply not true.

Some scores that are used by lenders are also given to consumers at no cost for educational and credit monitoring purposes. These scores are either available on various websites or disclosed as part of your monthly credit card account statement. These are “free” credit scores, but they’re hardly “fake” credit scores, even using the most unreasonable definition of the word.

In my mind, the only fake score would be a score that doesn’t meet the ECOA requirements for use in the U.S. Those would not be real scores, because they’d never be used to underwrite your credit applications. They may have some educational value, but they would not meet the legal definition of a credit score.

Read more: These Credit Cards Will Give You Your Free Credit Score

Don’t Focus on the Number

It’s understandable that people get hung up on the numbers and specific brands when it comes to credit scores. However, it’s actually better to focus on the information behind the numbers — the contents of your three credit reports.

Credit scoring models look at different behaviors from your credit reports to help lenders asses the risk of doing business with you. For example, when your scores are calculated, the following information is considered:

The presence or lack of negative information: Do you have any late payments on your credit report? What about defaults, repossessions, collections, or foreclosures? If so, how long ago did they occur, and how often did they occur?
Your debt: What percentage of your credit limits are you using on your credit cards? How many accounts do you have with a balance?
Credit age: What is the average age of accounts on your credit report?
Credit diversity: Do you have a mixture of account types on your credit report, including both revolving and installment debt?
Hard inquiries and new credit: How often have you applied for new credit in the last 12 months?

If you want to earn great credit scores, regardless of the model being used to calculate the actual numbers, you need to master the proper management of your credit accounts.

Make all of your payments on time, don’t use up a high percentage of your credit card limits, and only apply for credit when you actually need it. If you can do these three things, over and over, you’ll have no choice but to have great credit scores. This is true regardless of the brand of the scoring model your lenders use.

Read more:

John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. The author of four books on the subject, Ulzheimer has been featured thousands of times over the past decade in media outlets including the Wall Street Journal, NBC Nightly News, The Los Angeles Times, CNBC, and countless others. With professional experience at both Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.

The post Are Free Credit Scores ‘Fake’ Credit Scores? appeared first on The Simple Dollar.

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

Here’s How to Get an Amazon Gift Card for Eating Mac ’n Cheese

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Some things in life sound too good to be true, like earning money for eating your childhood (or, ahem, college hangover) favorite — mac ’n cheese.

We know. We know. As an adult, it’s kind of gross when you really think about that orange powdered cheese, but it’s so worth the nostalgia. And convenience. And, I mean, it tastes pretty darn good, too. (Have you tried mixing in a can of cream of mushroom soup?!)

Next time you’re at the grocery store and stocking up on your Kraft mac ’n cheese — or any other grocery essentials for that matter — use the Fetch Rewards app to snap a photo of your receipt and earn points toward a free Amazon gift card.

That’s it! No clipping coupons. No claiming offers. No surveys. No barcodes.

Sooo… When’s the Kraft Mac ’n Cheese Come Into Play?

With Fetch Rewards, you’ll earn points for scanning any receipt, no matter what you purchase — and no matter what grocery store you purchase it from. Super simple.

However, you’ll earn even more points when you purchase specific brands and products, which include Kraft, Klondike, Oscar Mayer, Huggies and more than 200 other brands you likely already purchase.

The points you earn per receipt vary, depending on what (and how much) you purchase. If you buy one of the promoted brands or products, you’ll earn even more — as much as 5,000 points for one item.

Once you collect 3,000 points (they add up fast!), pocket a $3 gift card to popular retailers, including Amazon, Kohl’s and Target. Or, save up your points for higher value gift cards.

Here’s how to get started:

Download the Fetch Rewards app (available for iPhone and Androids users).
Create your account. You just need the basics — no credit card information or anything super personal!
Enter code PENNY when it asks for a referral code. This will get you an extra 2,000 points once you take a photo of your first receipt.
After your next grocery run (at any store), snap a photo of your receipt to collect your points.

Just remember: Fetch will reject any receipts more than 14 days old, so don’t forget to take that picture! You’re basically be throwing away free gift cards if you don’t.

And let’s be real. You can use those gift cards you earn to buy even more mac ’n cheese, and that makes us feel all warm and cheesy inside.

Carson Kohler (carson@thepennyhoarder.com) is a staff writer at The Penny Hoarder. She’s headed to the grocery store right now to buy some Kraft macaroni and cheese.

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.

source The Penny Hoarder http://bit.ly/2WvHroN

Best accounts to beat inflation

Inflation can be a huge problem for savers: if it is higher than the interest rate on your savings account, the real value of your savings will be reduced over time.

In recent years, the combination of low savings rates and above-target inflation has meant that savers have had a raw deal. However, while savings rates still remain low, the good news is that inflation has started to fall and has now dipped below 2%.

The consumer prices index (CPI) rate of inflation was 2.1% in April, according to the Office for National Statistics. This is lower than April 2017 when it was 2.7% and in April 2018 when inflation was 2.4%.

This means savvy savers can now get a better return on their cash than at any time over the past two years, but they may need to lock up their money to do so.

Bonds

Long-term fixed-rate bonds, which require you to lock your money away for five years, offer the best rates and can help you hedge against inflation.

The best rate on the market is from Gatehouse Bank at 2.75%. This is a Shariah-compliant account and therefore the rate is an expected profit rate (EPR). [Islamic banks, such as Gatehouse Bank, pay profit to their savers rather than interest, which is forbidden under Shariah law].

The next best paying five-year bond is from PCF Bank at 2.65% followed by RCI Bank at 2.60%.

There are even one-year bonds which are higher than the inflation rate. Al Rayan Bank is offering 2.17% for its one-year bond which can be opened online, in branch or by phone with a deposit of £1,000. This is also a Shariah-compliant account with an EPR.

Meanwhile, Gatehouse Bank and Metro bank both have accounts paying 2%.

Regular savers

There are several regular savings accounts that pay above the level of inflation.

First Direct, HSBC and M&S Bank all pay 5% interest, while Santander 123 Regular Saver and HSBC both pay 3%.

Unlike other accounts you must put something away each month, usually between £10 and £250, otherwise you can be penalised.

While regular savings accounts have some of the best rates on the market, you do have to be careful as some only offer the headline rate for a year or require you to be an existing customer.

Current accounts

Some current accounts also pay higher interest rates than inflation.

The best high interest current account out there is the Nationwide FlexDirect, which pays 5% interest on balances up to £2,500 for the first year, but this then drops to 1%. There are no monthly fees, but you have to pay in a minimum of £1,000 a month.

Another option is the TSB Classic Plus, which offers 5% interest on balances up to £1,500, provided you pay in £500 a month. Tesco Bank Current Account offers an attractive interest rate of 3% on balances up to £3,000, but you must pay in at least £750 a month.

Cash Isas

With Cash Isas, you are going to have to take out a five-year account if you want a higher rate than inflation.

Coventry Building Society, Metro Bank and Newcastle Building Society are all offering a five-year fixed rate cash Isa at 2.1%.

The next best rate is from Leeds Building Society at 2.05%.

First Direct Regular Saver at 5%

With the First Direct Regular Saver you can between £25 and £300 a month, up to a maximum of £3,600 a year.

The rate is fixed for 12 months and to open it you will need to have a First Direct current account. It can be opened online or by phone.

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Finding travel insurance after a cancer diagnosis

For people suffering from cancer and other serious conditions, finding adequate travel insurance can be tricky. But help is at hand from specialist companies providing great cover at reasonable cost

Finding suitable travel insurance after a cancer diagnosis can be fraught with problems. The premiums quoted online often cost more than the holiday or else any claim relating to the cancer is excluded.

Action is underway that should lead to better levels of insurance and more reasonable prices for those with medical conditions. But in the meantime consumers must know where to look to avoid buying inadequate cover.

All insurers and comparison websites will soon be required to signpost consumers with pre-existing conditions to specialist travel insurers, whether they have offered them a quote for cover or not. It follows an investigation into this market by the regulator – the Financial Conduct Authority.

Andrew Williams, business development manager for specialist travel insurer Free Spirit, says: “The FCA is in discussions with insurers, and changes should be coming soon, which is great news for anyone with cancer or any other serious condition who has struggled to find insurance. Cover is out there for people in this situation but it can be difficult to know how to get it.”

A recent survey by consumer group Which? found that when consumers with pre-existing medical conditions apply for travel insurance, around one in five are only offered cover that excludes claims arising from their condition and one in four faced inflated premiums.

“Research by Which? highlights the importance of speaking to a specialist broker or insurer when you have cancer or other medical condition,” says Sarah Page, brand manager for specialist insurer Insurancewith. “Not everyone’s situation is going to fit neatly into the tick boxes on a screen when applying for cover.”

Ms Page adds: “At Insurancewith we can offer one-to-one medical underwriting and policies tailored to your specific needs so the price more accurately reflects the risk. This usually makes it much more affordable, particularly for someone with cancer.”

The type of cancer you have, its stage, your treatment and your medication will all affect the premium, as will your age – with older consumers typically having to pay more, as statistically they are more likely to claim.

couple.jpg

Your choice of destination and the duration of the trip will also have a bearing on the cost. This is because the cost of healthcare in different countries varies widely. In Spain, for example, tourists will often be directed to private clinics when they need medical attention – this can vastly inflate the cost of a claim, compared to state-funded healthcare. Healthcare in the US and Australia, for example, can also be expensive.

The delay to Brexit means holidaymakers to European Union countries can continue to use the European Health Insurance Card (known as EHIC) for now – although future arrangements are unclear. EHIC entitles you to emergency state healthcare in EU countries. But consumers should not rely on this as an alternative to travel insurance. The standards of care may be much lower than with the NHS. It also won’t cover the costs of repatriation.

The majority of insurers in the market use medical screening software called Healix, although a number use a different package called Protectif. The screening will ask questions about your condition and treatment to arrive at a ‘medical score’ before offering a premium cost for the travel insurance. As the two screening methods are slightly different it can be worthwhile getting quotes from a range of insurers that use different screening software.

Chris Rolland, chief executive at specialist insurer AllClear, says: “Declare everything. You will be asked to provide answers to set questions relating to each medical condition to ensure the insurer gets the information it needs to offer appropriate cover.”

Using a broker can be helpful as it will look across a broad spectrum of providers to find you the best cover and price for your needs. The British Insurance Brokers’ Association (BIBA) website at biba.org.uk can help you find one.

For most people with cancer and serious pre-existing conditions, and even those with a terminal diagnosis, it should be possible to find cover at a reasonable cost, although in some circumstances specific and tailored underwriting may be necessary.

Fi Munro, 33, from Errol, Perthshire, was diagnosed with stage-4b ovarian cancer in January 2016. She has since written a book How Long Have I Got?, set up an award-winning blog – Live Like You are Dying – and started her own businesses teaching yoga and meditation.

Fi says: “After the diagnosis I just wanted to live my life in the way I wanted and without barriers.

I love to travel, but looking around for insurance that would cover me and my cancer was so difficult.

“A medical professional recommended that I speak to Insurancewith,” she adds. “I just couldn’t believe the difference in its approach – and also the cost. It was so much cheaper than the mainstream brands that I’d previously been looking at.”

Fi takes out single-trip cover for each holiday. Cover for her and her husband, Ewan, for a two-week trip to France in April cost £85, for example. It is a stark contrast to the hundreds of pounds she could be charged with less specialist insurers.

According to experts, it is a good idea to take out joint cover with the same insurer, even where one person in a couple does not have any pre-existing medical conditions. The cost should not be any higher.

Mr Williams at Free Spirit says: “There could be complications if you need to cancel your trip due to illness, but your partner’s separate insurance won’t cover the cancellation.”

Insurer AllClear offers ‘Travelling companion’ cover for travellers who are insured with a different provider for cancellation or curtailment as a result of the pre-existing condition of their travelling companion under AllClear.

Think about purchasing travel insurance even for trips booked in the UK – because cancellation is among the main reasons for claiming on a policy for those with medical conditions.

fi-munro.jpg

Author Fi Munro found affordable travel cover with Insurancewith

How to keep premiums down

Shop around: Do your research and speak to different specialist insurers. A broker should be able to scour the market to find different policies to suit your needs at a reasonable price.

Opt for a larger excess: By agreeing to pay a higher excess – the first part of any insurance claim that you must pay – it may be possible to lower the premium.

Book holidays closer to the time of travel: If you can reduce the risk of cancellation due to ill health and can exclude cancellation cover from your insurance this should bring the premium down.

Consider changing destination and reduce length of trip: Insurance for travel to some countries will be much more expensive, so if you have not yet booked your trip talk to insurers and find out where might be cheapest. Shorter trips mean a lower risk of a claim and will bring insurance costs down.

Most insurers will ask about any treatment or prescribed medication you have taken within the last two years, or if you have been an in- or outpatient at a hospital, clinic or GP in the same time frame. It means if you had cancer three years ago, for example, but you can answer ‘no’ to these questions you will not need to declare the cancer and your premium should be much lower.

travel-insurance-box.jpg

John Carpenter and his wife, Linda, who ‘love to travel’

Cost was greater ‘but reasonable’

Many holidaymakers with pre-existing conditions decide to take a gamble and travel without insurance because they feel the premium cost is unaffordable. But this is a high-risk strategy.

John Carpenter was extremely glad he had taken out annual travel insurance when he was forced to cancel a cruise he had booked for his wife Linda’s birthday last year, after a lump appeared in his neck and he needed urgent chemotherapy.

John, in his early-60s, had been diagnosed with lymphoma in 2016. At that time doctors advised him to wait and see because his symptoms did not warrant immediate treatment. John and Linda, who love to travel, continued to take many holidays each year – although, due to his cancer, John now took out cover with specialist insurer AllClear, rather than buying cover through his travel agent as he always had done in the past.

“At £500 for annual worldwide cover my condition did mean a significant increase to the cost of cover,” says John. “But I felt it was reasonable considering the cruise I had planned and that it included the US, renowned for its high medical costs.”

The couple received a 25% refund on the cost of their £3,000 holiday from the cruise company and luckily, the terms of AllClear’s cover meant that they could reclaim the remainder on their insurance, minus the £250 excess.

“We were sent an email confirming our claim had been successful within two days,” says John, “and the payment was in my bank account within seven days of making the claim.”

John responded well to treatment and has stem cell therapy planned. He has been advised he is well enough to go on holiday before this treatment starts and AllClear has provided a new policy, taking into account his current medical situation. He has taken out a single trip policy for £200 for a seven-night break to Turkey.