Moneywise Fund Awards 2017: Funds with star quality

This year’s winning funds across 12 popular sectors offer investors the perfect combination of good value and consistent high performance.

Whether you are saving for your future or want to provide a nest egg for your children, the right investment fund can go a long way in helping you achieve your savings goals.

Investment funds offer a cheap and hassle-free way of investing in a portfolio of shares, with the benefit of an expert fund manager to run it on your behalf.

However, with thousands on offer, investing in a diverse range of countries and sectors with different aims, it can be a tough call finding the right one (or ones) for you.

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The Moneywise Fund Awards 2017 will help you make the right choices. Rather than just singling out those funds that have topped the performance tables over the past year, our awards highlight funds that have proved they are able to deliver good returns consistently over longer periods. Plus, we have paid close attention to charges.

UK All Companies

WINNER: Old Mutual UK Mid Cap*
Manager: Richard Watts
Ongoing charge: 0.85%
Value of £1,000 invested five years ago: £2,634 (163%)
Highly commended: Unicorn UK Growth
Commended: Marlborough UK Multi Cap Growth*, Threadneedle UK Mid 250

Since 2014, UK All Companies has been the worst selling Investment Association (IA) fund sector. The IA sectors divide funds into groups that invest in similar asset types, so investors can compare funds in one or more sectors before looking in detail at individual funds.

But while it remains unloved, UK All Companies houses a diverse array of funds and management styles and is home to some hidden gems. And it is those funds that invest in medium and smaller-sized companies (also called mid- and small-caps) that have come out on top.

Gavin Haynes, managing director of Whitechurch Securities, explains: “When sterling collapsed after the EU referendum, it was blue-chip stocks with overseas earnings that were the big winners. But, in 2017, as the UK economy proved more resilient than was feared, the more domestically focused medium and smaller UK companies have outperformed.”

Taking the award for the second year in the row is Old Mutual UK Mid Cap*, which is also one of Moneywise’s First 50 Funds.

Commenting on its performance, Tony Lawrence, investment manager at 7IM, says: “The Old Mutual UK Mid & Small Cap team is one of the more well-resourced and stable groups on the scene. The Mid Cap fund is overseen by Richard Watts, who expertly translates the team’s idea generation into a portfolio of stocks that consistently adds alpha. Large positions in stocks such as Boohoo.com and Fevertree have certainly provided a boost to performance over the past 12 months.”

The runner-up this year is Unicorn UK Growth – an option for investors who are willing to take more risk with their money.

Mr Haynes says: “Unicorn UK Growth focuses on smaller companies in the UK, and investors should appreciate that this fund may be higher risk than the typical UK equity fund. But the focus towards more domestic areas of the stock market has seen it recover strongly in 2017 and provide strong outperformance.”

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UK Smaller Companies

WINNER: Axa Framlington UK Smaller Companies
Manager: Dan Harlow
Ongoing charge: 0.84%
Value of £1,000 invested five years ago: £2,511 (151%)
Highly commended: TB Amati UK Smaller Companies
Commended: Old Mutual UK Smaller Companies, Marlborough UK Micro Cap Growth*

Look at the returns posted by the top smaller companies’ funds and it can make for a very tempting proposition. However, investors need to be aware of the risks associated with the sector, which are tightly linked to the health of our own domestic economy.

Dzmitry Lipski, investment analyst at Interactive Investor (Moneywise’s parent company), says: “Small-cap equities have strongly outperformed large-cap equities since the financial crisis, but could be more at risk if the UK economy slows further as Brexit negotiations drag on. This outperformance is mainly attributed to the fact that smaller companies are typically under-researched, under-invested, and less efficient than the market for large-caps and, therefore, could yield superior returns over the longer term.”

Taking pole position this year is last year’s runner-up, Axa Framlington UK Smaller Companies.

Darius McDermott, managing director of Chelsea Financial Services, says: “This fund hasn’t missed a beat since Dan Harlow returned to manage the fund in the middle of 2016.”

Mr Harlow previously managed the UK Smaller Companies fund from 2010 to 2011.

“The fund’s GARP (growth at a reasonable price) style has worked particularly well in the smaller companies’ space and the fund has very consistently been among the top performers,” adds Mr McDermott.

Trading places, last year’s winner is this year’s runner-up, TB Amati Smaller Companies.

Mr Lipski says: “The fund is managed by a strong trio, Paul Jourdan, Douglas Lawson and David Stevenson, with an aim to provide ‘a fund for all seasons”.

While the fund focuses on companies with market caps below £500 million, it can move up the market-cap scale to manage liquidity.”

Liquidity can be a real challenge to smaller companies’ funds – indeed many have had to close their doors or increase charges for new investors to stop them becoming too big.

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UK Equity Income

WINNER: MI Chelverton UK Equity Income*
Managers: David Horner and David Taylor
Ongoing charge: 0.88%
Value of £1,000 invested five years ago: £2,183 (118%)
Highly commended: Unicorn UK Income
Commended: Man GLG UK Equity Income, Royal London UK Equity Income

With savings rates remaining at rock bottom, funds that can deliver a growing income are a popular choice among investors.

However, performance in the sector has slipped when compared to the UK All Companies sector and those that have shone are those that have searched for higher returns. Before investing, it is important to be aware that funds investing in smaller companies will be riskier than those that focus on larger companies.

Commenting on our winner, MI Chelverton UK Equity Income*, a member of the Moneywise First 50 Funds, Mr McDermott says: “This multi-cap fund has correctly positioned itself away from struggling mega caps, preferring to invest in small- and mid-cap stocks which have been growing their dividends. Combined with excellent stock selection, the result is a fund that has by far the strongest performance in the IA UK Equity Income sector over the past five years.”

Coming in second place is Unicorn UK Income. Mr Lipski says: “This fund has been managed by Simon Moon and Fraser Mackersie since June 2014, to provide rising income from a concentrated portfolio of smaller companies. It aims to deliver a gross yield at least 10% greater than the yield produced by the FTSE All-Share Index.”

• Fund Briefing: UK Equities

Mixed Investment 20%-60% Shares

WINNER: Axa Global Distribution
Manager: Matthew Huddart and Jamie Forbes-Wilson
Ongoing charge: 0.8%
Value of £1,000 invested five years ago: £1,540 (54%)
Highly commended: Royal London Sustainable Diversified Income
Commended: Invesco Perpetual European High Income, Axa Ethical Distribution, M&G Episode Allocation

Funds in this sector invest between 20% and 60% of their cash in equities, with the remainder invested in cash or fixed-interest investments such as gilts and corporate bonds. This makes them more suited to cautious investors who want to limit their exposure to the stock market. Our winner is last year’s runner-up, Axa Global Distribution.

Commenting on its impressive performance, Mr McDermott says: “Matthew Huddart and Jamie Forbes-Wilson recently took over this fund in 2017. This fund has delivered exceptionally strong relative performance. It has more than doubled the returns of sector average over the past 10 years.”

Royal London Sustainable Diversified Income is our highly commended choice.

Mr McDermott is not short of praise for the fund: “It has an incredibly consistent track record, having beaten its benchmark in every calendar year since its launch. It has delivered returns comparable to equities, but with substantially less risk.”

Mixed Investment 40%-85% Shares

WINNER: Royal London Sustainable World
Manager: Mike Fox
Ongoing charge: 0.77%
Value of £1,000 invested five years ago: £1,893 (89%)
Highly commended: Baillie Gifford Managed
Commended: BlackRock Consensus 85

This mixed asset fund sector used to be known as ‘balanced managed’ and with stock market exposure lying between 40% and 85% it suits investors who value the benefits of diversification but are prepared to invest more on the stock market.

Adrian Lowcock says: “Funds within this sector differ markedly from each other and as a result will perform differently. Over the past 12 months, [funds with] greater exposure to shares will have benefited as equity markets rallied, while bonds fell back due to expectations of interest rate rises.”

For the second year on the trot our winner is Royal London Sustainable World trust, which also has an ethical mandate. According to its latest factsheet, it is 82% invested in equities – so close to the maximum permitted by the sector.

Mr Haynes says: “The fund has provided attractive capital growth through investment in a globally diversified portfolio, predominantly in equities with some fixed interest securities and cash. Mike Fox is head of sustainable funds at Royal London Asset Management and has managed the fund since 2003 with impressive returns. The focus is on long-term themes and trends such as infrastructure or changing demographics with emphasis on active management and focused high-conviction best ideas.”

Baillie Gifford Managed takes second place.

Mr Haynes adds: “This fund has been a strong performer and has a track record stretching back 30 years. The team take a long-term approach with a typical asset mix of 75% equities, 20% bonds and 5% cash. Charges are very competitive.”

Strategic Bonds

WINNER: Axa Framlington Managed Income
Manager: George Luckcraft
Ongoing charge: 0.59%
Value of £1,000 invested five years ago: £1,519 (51%)
Highly commended: Baillie Gifford Corporate Bond
Commended: Royal London Sterling Extra Yield, Artemis High Income, PIMCO Diversified Income

This is a fixed-interest category, where managers have a fewer restraints than the conventional corporate bond sector. Funds in this sector will have more opportunities to get higher yields in a low interest rate environment. The funds may, however, be higher risk as a result so it is important to check the strategies employed by your chosen fund before you invest.

Mr Haynes says: “2017 was a more challenging year for investing in bond markets, with government bonds providing disappointing returns. Investors were rewarded for taking on risk with high-yield and emerging markets bonds performing particularly well.”

Our winner is Axa Framlington Managed Income.

Mr Haynes says: “George Luckcraft has provided impressive returns over the past year with a favour for bonds of financial companies boosting performance. With income hard to find, the more than 4% yield is attractive.”

In second place is last year’s winner, the Baillie Gifford Corporate Bond fund.

Mr Haynes adds: “The Corporate Bond fund aims to produce a high level of monthly income through a portfolio of 60 to 80 corporate bonds. It is a highly active portfolio of the manager’s best ideas with a mix of investment-grade and high-yielding bonds.”

• Fund briefing: global bonds

Ethical

WINNER: Henderson Global Care Growth
Manager: Hamish Chamberlayne
Ongoing charge: 0.84%
Value of £1,000 invested five years ago: £2,070 (107%)
Highly commended: F&C Responsible Global Equity
Commended: Royal London Sustainable World, Standard Life Investments UK Ethical, Eden Tree Amity European

Some investors like to invest in line with their morals and beliefs and so will try to avoid companies, which are considered to do harm. Ethical funds will, therefore, not invest in some sectors, such as tobacco, and typically have lower, or no, weightings in others like oil and gas.

“This means there is more focus on those sectors where they are able to invest, and their comparative performance is often dictated by how the sectors they hold perform compared with those which they don’t,” notes Patrick Connolly, chartered financial planner at IFA Chase De Vere.

The winner this year is Henderson Global Care Growth.

Mr McDermott says: “This fund believes sustainable, well-managed businesses are best placed to create long-term shareholder value. Environmental, social and governance factors are at the heart of the process and the fund has been a top performer since Hamish Chamberlayne took over in 2013.”

Coming in second place is F&C Responsible Global Equity, which was previously part of the Friends Provident Stewardship range, which was the forerunner in the ethical investing movement.

Mr Connolly says: “It adopts a positive-based approach, investing in growth companies that make a positive contribution to society and the environment, such as those engaged in energy efficiency, responsible banking and healthcare. The fund benefits from strong ethical teams and processes and is a good choice for those who want to align their investment approach with their ethical and environmental beliefs.”

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Global

WINNER: Baillie Gifford Global Discovery
Manager: Douglas Brodie
Ongoing charge: 0.77%
Value of £1,000 invested five years ago: £2,595 (159%)
Highly commended: Old Mutual Global Equity
Commended: Goldman Sachs Core Equity, Fundsmith Equity*

“Providing you can accept the currency risks associated with investing overseas, investing in global funds provides compelling growth opportunities and diversifies risk from the UK stock market,” says Mr Haynes.

Different funds will focus on different regions, so it’s important not to assume that funds cross all over the world. They may focus on smaller or larger companies or home in on different industries, as is the case with our winner, Baillie Gifford Global Discovery. It has more than 50% of its assets invested in the US and just over 20% in the UK.

Mr Haynes says: “This fund concentrates on smaller businesses with high growth potential with a specific focus on technology and cutting-edge health care businesses. Although this puts it at the higher end of the risk spectrum, the returns generated by fund manager Douglas Brodie have been very impressive.” In second place is Old Mutual Global Equity, which Mr Haynes says is a good one-stop shop for investors.

“The Old Mutual fund has continued to perform well over the past year to extend its strong record. This is a highly diversified fund that invests in 500 stocks with selection driven by a quantitative screening process, looking at a wide range of factors to select stocks. It provides a good choice for investors seeking broad overseas exposure for the first time,” he explains.

• Take some risk to find an income stream

Global Emerging Markets

WINNER: Goldman Sachs Emerging Markets Core Equities
Manager: Team managed
Ongoing charge: 0.87%
Value of £1,000 invested five years ago: £2,463 (146.3%)
Highly commended: Baillie Gifford Emerging Markets Growth
Commended: Invesco Perpetual Global Emerging Markets, Fidelity Emerging Markets*, Baillie Gifford Emerging Markets Leading Companies

“This is a high-risk and volatile sector, but it is an important one because it gives investors access to developing economies, such as China and India, and companies which have the potential to perform strongly in the years and decades ahead,” says Mr Connolly.

However, our winner, Goldman Sachs Emerging Markets Core Equities, has proved it can make money during good times and bad. Mr Connolly explains: “Goldman Sachs is a huge financial services company and has significant investment research resources. It takes a team approach to managing investments and this fund, using its Computer Optimised Research Enhanced Process, has been a strong performer both when markets are going up or down. The firm has recently lost the head of its emerging markets team but, because of its team-based approach, still has a strong proposition.”

The runner-up in this category is Baillie Gifford Emerging Markets Growth.

Mr Lipski says a well-respected team runs this fund: “The team invests over the longer term in emerging market stocks in different sectors that can grow faster than the market and are underestimated by other investors. Strong research capabilities and strong past performance make the fund a good option for long-term investors to gain exposure to emerging markets.”

• Industry Insider: Emerging market funds are looking good for long-term investors

Asia Pacific Ex Japan

WINNER: Invesco Perpetual Asian
Manager: William Lam
Ongoing charge: 0.9%
Value of £1,000 invested five years ago: £2,041 (104%)
Highly commended: Fidelity Asia
Commended: BGF Asian Dragon, Investec Asia Ex Japan

“The sector has, until last year, been out of favour among investors as they remained wary of the global recovery continuing to remain cautious as the West eases its way out of the financial crisis,” says Mr Lowcock. “However, Asia has begun to appeal to investors again. The region has strong growth and will benefit from a global recovery and a weaker US dollar. Asia gives access to a young and growing population.”

Our top fund in this sector is Invesco Perpetual Asian. Although the fund has a new manager at the helm, he is not new to the fund and has been key to its impressive performance over the past two years.

“Manager William Lam took over sole responsibility for this fund in May 2017, having co-managed it since April 2015,” explains Mr Lowcock. “His main responsibility has been stock selection, which has been the main driver of outperformance. This stock selection is combined with thorough top-down economic insight, which has consistently provided guidance on what areas to focus on. The fund has typically favoured steady, large-cap franchises and market leaders. The fund’s exposure to Chinese tech companies has also helped boost performance.”

Coming in second place is Fidelity Asia.

“Fidelity has a well-resourced team providing wide coverage of Asian markets. Teera Chanpongsang took over as lead manager in 2014 and has maintained a focus on investing in high quality sustainable business models that has been important in the strong returns generated by this fund,” says Mr Haynes.

• Fund Briefing: China

Europe Ex UK

WINNER: Man GLG Continental European Growth*
Manager: Rory Powe
Ongoing charge: 0.9%
Value of £1,000 invested five years ago: £2,889 (188%)
Highly commended: Marlborough European
Commended: Baillie Gifford European, FP Crux European Special Situations, BlackRock European Dynamic

Our experts agree that an investment in Europe should not be overlooked.

“For a long time, Europe was the sick economy, struggling with political instability, low growth and deflationary pressures,” says Mr Lowcock. “But, in 2017, that has all changed and the region is showing solid low growth.

“Market valuations are no longer significantly discounted to the US, but the region is further behind in its recovery giving Europe the potential for a greater boost in corporate earnings, which we have already seen this year. Political issues are never far away in Europe, but they have so far had little impact on business.”

Mr Haynes agrees: “This region has been one of our favoured investment areas and we believe offers strong opportunities for stock pickers.”

For the second year in a row, Man GLG Continental European Growth* takes the crown.

Mr Lowcock says: “This fund is managed by veteran European equity investor Rory Powe. He seeks out growth companies in Europe, which are well positioned to maintain their earnings or have the scope to grow profits. The fund does not track the benchmark. Mr Powe looks for two types of companies: established leaders with strong balance sheets and clear revenue growth objectives and established winners, which should display clear, competitive advantages, rapid revenue growth and understated market values.”

The runner-up is Marlborough European. “The fund has been managed by David Walton since 2013, and has produced exceptional performance,” notes Mr Haynes. “The fund will invest from mega-caps to micro-caps, but the focus of the portfolio is very much on smaller and medium-sized companies.

Mr Walton has a favour for owner-manager businesses, where the growth potential is not recognised by the market.”

• Interview: Rory Powe of Man GLG Continental European Growth

North America

WINNER: Old Mutual North American
Manager: Team managed
Ongoing charge: 0.95%
Value of £1,000 invested five years ago: £2,644 (164%)
Highly commended: Baillie Gifford North American
Commended: JPM US Select Equity, JPM American Equity, Goldman Sachs US Core Equity Base

This is one economy that Mr Connolly says all investors should have some exposure to.

“The US market is too big for people to ignore,” he says. “It has the largest stock market and economy in the world and is home to many of the most innovative companies, including the likes of Apple, Microsoft and Amazon. It is also likely to be home to many of the next generation of market-leading companies.”

And while shares are looking expensive, Mr McDermott says: “North America continues to defy disbelievers and rise ever higher.”

The winner for the second year in a row is Old Mutual North American. Mr Connolly adds: “This is a sector where active managers notoriously struggle to outperform, yet this fund is consistently achieving that without taking excessive risks. The fund managers have an unconstrained investment style, which looks at taking advantage of price anomalies and at the same time they manage a very well diversified portfolio. This is a good-quality core US fund.”

Our runner-up is Baillie Gifford North American. Mr McDermott says: “This high-growth fund has delivered strong performance in this difficult sector. The fund’s low ongoing charge of just 0.52% is also highly commendable. This is another Baillie Gifford fund which has delivered excellent value for its clients and continues to prove the value of active funds.”

Note: Performance figures as at 6 November 2017..

* Denotes a Moneywise First 50 Fund for beginner investors.

METHODOLOGY

To decide the winning funds, we took the top 20 retail funds over three years and aggregated their performance over three, five and where possible, seven years. We ruled out funds that took excessive risks or had higher charges. Thanks to Morningstar for providing the data.

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Want to Get Paid to Be on Social Media? Apply for This Work-From-Home Job

We love interacting with our readers — especially when a solid, work-from-home job lead is involved.

A reader recently reached out on our Facebook jobs page to ask if we’d ever written about a company called Appen.

“If not, they’re a great company to write about, and they are hiring!” she wrote.

What’s Appen and What Do They Do?

Appen is one of those behind-the-scenes companies that helps technology and e-commerce companies develop and expand to global markets.

“With capability in over 150 languages, Appen’s global network of specialists and in-country virtual teams work together to ensure new products and technologies operate in all the languages our clients need,” the site states.

It’s pretty involved, which means a variety of jobs are available — all work-from-home.

“Appen offers work from home opportunities for exciting, flexible, short-term projects as well as full-time corporate opportunities,” the jobs page states. “We are proud to have been named in Forbes Magazine as one of the Top 100 Companies Offering Flexible Jobs in 2014, 2015, 2016 and 2017.”

What Type of Work-From-Home Jobs are Available?

Appen specializes in search, language technology and social technology, as well as project management and crowdsourcing.

Right now, the company’s actively seeking social media evaluators, which is a great place to get started.

Our reader gave us some awesome insight into opportunities for advancement.

“Once you start working for them (and do well) management will pass along your information for other jobs they have that are not posted online,” she writes.

These other jobs include crowdsourcing and web search evaluators.

More About the Open Social Media Evaluator Positions

“If you love social media and are an active user, now is the time to get paid for your time on social media platforms!” the job posting states.

Unfortunately, you won’t get paid to mindlessly scroll through Twitter or tag friends in viral Facebook dog videos. (That French bulldog getting pampered…)

You’ll need this experience, though, since you’ll be improving a top client’s newsfeed. But don’t worry — you’ll be adequately trained.

You’ll need to be familiar with social media platforms, including Facebook and Instagram. You should also be able to follow instructions while working independently (from home, remember?) and have a strong grasp of English.

In terms of technology, you should have a computer or smartphone that’s less than 3 years old and has a high-speed internet connection.

You should be able to commit to 1-4 flexible hours a day, five days per week (sometime seven), up to 20 hours per week. You’ll work as a contractor, accepting projects along the way.

“It allows for so much flexibility,” our reader says. She works one hour each day. “I get a whole day to work my hour. I can pause any time and come back where I left off, as long as [the project is] completed that day.”

She keeps a stopwatch going to keep track of the time she’s worked.

Pay is described as “dependent upon project”; our reader says she makes just under $14 an hour and gets paid once a month via direct deposit.

How To Apply for a Job with Appen

To find social media evaluator jobs near you, click here and select the position from the menu on the left side of the page.

If you’re interested in other opportunities, check out the site’s job page, which includes international jobs.

As always, follow our Facebook jobs page for more work-from-home jobs. And if you have found an awesome company that’s hiring, be sure to message us and let us know!

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. After recently completing graduate school, she focuses on saving money — and surviving the move back in with her parents.

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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The Incredibly Valuable Role of Frugality in Investing

My wife and I have no debts at all. We own our own house with no mortgage – we paid off the whole thing. We spend substantially less than we earn.

Taken those facts into account, people always ask why Sarah and I consistently make frugal choices. Why aren’t we going on great trips all the time? Why on earth am I driving a 14-year-old SUV? Why do we buy store brand… everything at the store? Why do we only have one television, one that has a huge flaw on the screen? Why do I wear shirts that are more than 10 years old? Why don’t we live in a McMansion?

The reason we do it is simple: It hastens and improves our retirement without sacrificing anything we really care about.

Our frugality is all about things of lesser importance to us. We actually prefer trips to national parks most of the time. I like driving my current car and hope to do so until it becomes unreliable. The store-brand stuff fulfills our needs. Our television fulfills our needs. My shirts are still in fine shape. Our house fulfills our needs and is already plenty big enough. We don’t need to spend money on “better” versions of things if we’re perfectly happy with what we have.

At the same time, spending less enables us to save more for retirement. Our frugality plays a key role in our retirement planning – in fact, I’d say it’s the single most important element. Not our investment choices. Not anything else. Our frugal choices are the most important pieces of our retirement plan.

People often shrug off that statement as crazy talk. Trust me, I’ve seen it: I’ve talked about retirement planning in casual conversation with people and they simply seem to not believe me at all when I say that frugality is probably the most important ingredient. Their immediate assumption seems to be that there is some super secret investment trick to retirement, or else people are just making a lot more money than they are. While both are helpful, frugality is the secret sauce that makes retirement click for most ordinary Americans.

Let’s dig in and see how this works.

A Normal Non-Frugal Retirement Strategy

Let’s look at Bill’s retirement planning. Bill is 25 years old. He makes $50,000 a year and saves 5% of his income for retirement – $2,500 a year. He puts it entirely in a retirement account that earns a 7% annual rate of return – basically in something like the Vanguard Total Stock Market Index. He does exactly this for the next 40 years. At the end of those 40 years, he’ll have $516,556 in retirement savings.

That’s not too shabby. At a 4% annual withdrawal rate, which should last him through the rest of his life, he can take out $20,600 per year which is a great supplement to his Social Security benefits (which I estimate to be $16,800 a year using this calculator). That means that, for the rest of his years, Bill will have $37,400 in annual income at a very low tax rate.

Pretty solid, huh? Well, let’s change the picture a little bit.

Adding a Bit of Frugality

Let’s now say that Bill figured out how to spend just $5 less per week. Just $5 – that’s like a single stop at Starbucks or taking leftovers to work instead of going out once every other week, or some mix of such options.

Over the course of a year (we’ll give Bill two weeks to spend money as he wishes), that frugality adds up to $250. So, let’s add that to Bill’s retirement contributions. He’s now saving $2,750 a year.

As before, Bill puts it entirely in a retirement account that earns a 7% annual rate of return – basically in something like the Vanguard Total Stock Market Index. He does exactly this for the next 40 years. At the end of those 40 years, he’ll have $568,211 in retirement savings. Because he chose to take leftovers to work once every few weeks and skip a morning latte every once in a while, Bill now has another $55,000 in retirement savings.

Bill didn’t use some secret ninja retirement strategy. Bill didn’t add a bunch of risk to his portfolio. Bill simply ate some leftovers a couple of times a month.

What did that change? Bill now can safely withdraw $22,700 per year rather than $20,600 – more than $2,000 a year more for the rest of his life. All because he skipped two morning coffees a month and drank whatever was in the office instead and brought in his lunch once a month instead of going to Panera or Applebee’s.

The Standard of Living Shift

Here’s another way of thinking about it. In the first example, where Bill isn’t doing anything frugal, Bill is living on $47,500 a year. When he retires in that case, his income will drop to $37,400 a year. (I’m not worrying about taxes in these examples as taxes will change significantly over the course of 40 years.) His income will drop by $10,100 per year.

Now, if Bill takes just a couple simple frugal steps (as I mentioned above), he’s now living on $47,250 a year. However, when he retires, his income will now be $39,500 a year. His income will only drop by $7,750 a year.

In other words, because Bill made just a couple small frugality adjustments in his life, he’s suddenly in a position where retirement becomes much less of a shock and he doesn’t have to give up nearly as much of his quality of life as he otherwise would. In fact, once the cost of going to work is eliminated, Slightly Frugal Bill will probably have very little lifestyle change at all, whereas Not Frugal Bill will likely have to pinch some pennies and give up some real things.

Again, all because Bill found a way to spend $5 less per week. He literally just cut out the least important $5 of his spending each week and it made an enormous quality of life difference in the last thirty years of his life.

Kicking It Up a Notch

Let’s say that Bill is really excited by this. He goes through his spending habits and realizes that he’s spending about $40 a week in ways that are completely forgettable. He stops drinking so much soda. He switches to store brand dish soap and hand soap. He stops buying the expensive shampoo that his barber shop pushes and finds that, with his short hair, inexpensive shampoo and conditioner do a great job. Just little things that are almost completely forgotten in the big scheme of things.

So, rather than cutting his spending by $5 a week, Bill is cutting back by $40 a week. Over the course of a year, that adds up to $2,000 in additional retirement savings on top of the $2,500 he was already saving.

What does this change about Bill’s financial picture? After 40 years of investing in the exact same way as in the story above, he’ll now have $929,801 in savings for retirement. That’s almost a million dollars.

If he takes the safe withdrawal rate of 4%, Bill will be able to take out $37,200 a year. Add that to his Social Security benefit of $16,800 a year and our friend Bill will have $54,000 a year in income. More Frugal Bill will actually be bringing in more money when he retires than when he was working.

In fact, if Bill just wanted to match his current income (after retirement savings) of $45,500 a year, he could retire at age 62 – three full years earlier – and take all of his living expenses out of his retirement savings for the first three years, then have a safe withdrawal rate for the next 30 years supplemented with Social Security to “bring home” $45,500 a year. (He’d have lower taxes at this point, too.)

Our pal More Frugal Bill is retiring three years earlier than expected and will have no drop in income for living expenses for the last 30 years of his life, and all he has to do is take a few little steps like buying store brand dish soap and cutting back on his soda.

What About Other Steps To Improve Retirement Savings?

Investment books and articles tend to focus on two other strategies as the main way to improve retirement savings.

One is simply to invest smarter. Countless articles and books have been written about various retirement investment strategies. In the end, however, they usually require one of several things that most individual investors don’t have: access to a hedge fund, early access to information (by the time the book is written, the strategy is probably played out), tons of time to spend on research, or a great deal of luck.

I tend to subscribe instead to the “index fund” philosophy, which basically says that the best strategy is to shoot for exactly average with the fewest fees possible. In other words, you ride the stock market as a whole all at once and do it as cheaply as possible. This means that you won’t experience tremendous spikes in value, but you also won’t lose your shirt – instead, you’ll stick very closely to the overall average of the stock market. Many investment houses offer index funds that allow you to do this at a very low cost – they essentially just buy everything in roughly equal amounts and thus it doesn’t cost much to manage them. An example of this type of investment is the Vanguard Total Stock Market Index.

Another common strategy is to simply use a Target Retirement Fund, which essentially follows the same philosophy. Target Retirement Funds are typically invested very broadly in a wide array of things and with little hands-on management – it doesn’t take a whole lot of management to just “buy everything.” The difference here is that these shift over time, moving your money from more risky things like stocks into less risky things like bonds as you reach retirement and start withdrawing. An example of this is the Vanguard Target Retirement 2050 Fund.

In other words, “investing smarter” for most ordinary people involves investing in something very broad based and cheap and just sitting on it. You’re going to be hard pressed to consistently beat that strategy, let alone beating it by enough to do better than being even a little frugal and putting that savings aside.

The other avenue for saving more for retirement is earning more so that you can save more. This is a very solid approach, but it often requires a long time to build to a higher income. You can’t just magically flip a switch and be earning 20% more – if that were the case, we’d all be earning millions a year.

Working toward improving your income is absolutely a laudable goal, and success in that goal is incredibly valuable and useful for retirement goals. However, it’s not immediate. The advantage that frugality has in this case is that you can start being frugal immediately. There’s literally nothing stopping you other than your own behavior and your own desires in your head.

Remember, one of the best possible strategies for retirement savings is to start saving now, because the power of compound interest will never be as powerful as it is when you are young. Every month, every year that passes by, the less powerful compound interest becomes.

Frugality is the only strategy that can amp up your retirement savings immediately through your own actions and choices. There’s really nothing else like it.

20 Things You Can Do to Boost Your Retirement Savings Now (and You Only Need to Pick Three of Them)

The best part about frugality is that it’s an a la carte strategy. You can check out a huge list of frugality tips, ignore 90% of them, implement the other 10% that are easy and fit into your life, and save yourself $50 or $100 or more a month.

The key, however, is that you must actually do something productive with that savings. If you take on some frugality strategies that save you $100 a month, you should immediately go to your workplace and increase your 401(k) contributions, or immediately increase your Roth IRA contributions, or open a Roth IRA and contribute $100 a month to it. Don’t let the savings go unused or you’ll find yourself spending that money on other relatively unimportant things.

So, here’s what we’re going to do. I’m going to share 20 really good frugal strategies. Each of these will cut a person’s spending each month by a notable amount. I want you to skip 17 of them. That’s right – if they sound hard, skip them. Choose three of them that feel like they would have very little impact on the quality of your day to day life.

Make those three strategies a reality. Keep track of how much you save following those strategies in a month, then simply adjust your retirement contributions by that much. That’s it! That’s all you have to do!

Even if the change is just $10 or $20 a month, it’s going to end up making a profound change in your retirement savings over time, provided you do it now. That’s the advantage of frugality – you can do it now. There are no excuses. You have the power.

Here are 20 straightforward frugality steps you can take.

#1 – Make a bunch of meals in advance, freeze them, and use them. Once a month, spend a Saturday afternoon making a quadruple batch of one of your favorite casseroles or soups. Put three of the batches in the freezer and eat them in the future on nights when you’d otherwise eat out – all you have to do is thaw them and finish warming them up, so it’s really easy. This eliminates three (or so) meals eaten out per month, so it adds up to significant savings.

#2 – Replace some of your routine household purchases with store brands. For most of your household supplies, like dish soap, dishwashing detergent, hand soap, shampoo, conditioner, shower soap, toilet paper, paper towels, and so on, try buying the store brand version instead of the name brand. You’ll save about $1 per item that you switch, on average. If you find that the store brand isn’t good enough, switch back next time, but for most of them, you won’t notice a difference.

#3 – Switch to all LED lighting at home. As you replace light bulbs around your house, buy LED bulbs instead of incandescent or CFL bulbs. LED bulbs last far longer and eat a lot less energy than incandescents, thus quickly recouping their higher initial cost. Compare your energy bill to a year ago and start socking away the difference.

#4 – Put a weather strip along the edge of any doors that leak air. If you have any doors that let in cold air in the winter or warm air in the summer along the edges, add a weather strip to block that air flow. It’s a simple DIY project that’ll take just a few minutes and it’ll significantly reduce your heating and cooling costs. Again, compare your energy bill to a year ago and sock away the difference.

#5 – Caulk the edges of any leaky windows. If you feel any cold air (in winter) or warm air (in summer) leaking in around the edges of windows, apply some caulk to the area where those leaks are occurring. Again, this is a simple project that takes just a few minutes and it can make a surprising difference on your energy bill. As before, comparing your bill to the bill from a year ago will show you the approximate savings.

#6 – Take leftovers to work. After supper, put together a simple meal in a reusable container such that you can just pop it in the microwave the next day, then sit that container in the fridge. The next day – or the day after – grab it on your way out the door to work, then eat it at work. You’re immediately saving several dollars versus going out to eat for lunch, having something delivered, or hitting a food stand or other convenient food option nearby.

#7 – Make coffee at home. There are tons of ways to make coffee at home in a convenient fashion that will drastically cut down the number of times you stop at a coffee shop to pick up coffee. Both a drip coffee pot and a cold brewing setup are incredibly convenient and make delicious coffee at home for a fraction of the cost of buying it at the coffee shop. If you can replace even one coffee shop stop per week with making a batch of cold brew at home, the savings are going to add up very quickly.

#8 – Drink filtered tap water instead of bottled water. We have good tap water here, so I almost never buy bottled water. Instead, I tend to fill up water bottles, keep them in the fridge, and grab them as needed. It’s cold and refreshing and costs just a penny or so. If you don’t have the best tap water and drink a lot of bottled water instead, you’ll save money very quickly by installing an under-the-sink water filter, which makes your tap water much better, or using a filtered water pitcher. The cost of replacing filters is far cheaper than the cost of buying endless bottles of water.

#9 – Use the library for “book shopping” or “movie shopping.” If you’re tempted to go shopping for a book or a movie or an audiobook, head to your local library instead and “shop” there. You can borrow anything on the shelves there for free, watch or read or listen to it, and then return it so it’s not taking up unnecessary space in your home once you’re done with it. It’s free, it saves space, and you’re still entertained!

#10 – Break a “vice” habit. If you smoke, stop. If you take drugs, stop. If you drink alcohol, stop. If you drink soda, stop. At the very least, trim your habit. Such consumable habits are the equivalent of burning your money – it just goes away, leaving you with nothing but worse health in very short order. It’s not worth it.

#11 – Write a meal plan and grocery list before you go grocery shopping. If you need food, spend the time to plan out your meals for the next several days on a sheet of paper or a whiteboard, then make a grocery list based on those meals. Use the grocery list at the grocery store and you’ll spend a lot less time at the store and buy far fewer incidentals and unnecessary items.

#12 – Stock up on holiday supplies right after a holiday instead of before. The best day to buy Christmas supplies like wrapping paper and so on is on December 26th. Everything’s on deep discount, so buy what you’ll need for the following year right then. The same is true for things like big bags of candy for Halloween on November 1 and so on.

#13 – Bulk buy nonperishable things that you use frequently. When buying items that you use frequently that don’t spoil – items like toilet paper or shampoo – buy it in large portions so that the cost per unit is the lowest possible. You can usually save quite a bit by buying 36 rolls of toilet paper at once or a jumbo jug of hand soap. Refill smaller containers out of the large containers of hand soap or shampoo so that you don’t overuse it.

#14 – Use the community calendar first when deciding on something to do. If you’re bored, don’t turn to expensive things like movie listings first. Instead, open up your local community calendar (usually found on your city’s website) and see what’s there. Check the calendar of any local universities as well. Quite often, you’ll find a number of free activities, and if even one of them is enticing, you’ve suddenly got free entertainment for the evening.

#15 – Cut the cable cord. Cancel your cable or satellite service and switch to a combination of Netflix, HBO Now, Amazon Prime, Hulu Plus, and free over-the-air HD television signals. A good strategy is to rotate those subscriptions and not have them all at once so that you can binge-watch all of their offerings, then move to another service, then eventually come back to one you’ve subscribed to before and catch up.

#16 – Switch banks. If you find that you’re not getting much of an interest rate on your checking or savings accounts, or, even worse, you’re getting dinged regularly for account maintenance fees or big ATM fees or other unnecessary fees, look into switching banks. See if there are any in your area that don’t have such fees associated with their account and then switch to that bank. Banks are in competition with each other – use that to your advantage.

#17 – Inflate your car tires to the maximum recommended amount once a month. This is such a simple free step that it’s well worth your time to take advantage of it. Keep a tire pressure gauge in your car, then once a mont, when you refill your gas, pull over to the free air pump at the gas station. Check the pressure in each tire and refill them all to the maximum recommended pressure (listed in your manual). Every single PSI you put into a single tire saves you 1/8% on your fuel efficiency, so if all of your tires are 8 PSI low (which is a common thing), you’re making your car 4% more fuel efficient for free.

#18 – Run your ceiling fans the right way. During the winter months, the blades of your ceiling fan should be running in a clockwise direction when viewed from the floor, while in the summer, they should be running counterclockwise. The direction is typically fixed with a little switch at the base of the fan. Having your fan running in the proper direction aids cooling in the summer and heating in the winter, making it feel more palatable even when the weather outside is extreme.

#19 – Lower your home temperature by a couple degrees in winter (and raise it by a couple in summer). Not sure about this? If you combine it with the previous tip and have the blades turning the right way on your ceiling fans, you’ll barely notice the difference in rooms where a ceiling fan is running. This simple change causes your furnace and AC to both run significantly less.

#20 – Master a handful of very simple “staple” meals. The temptation to order takeout becomes far less when you always have the supplies on hand for a simple meal or two that you love. For example, our family always has a jar of pasta sauce and a box of pasta on hand for a quick spaghetti meal, something we have a couple times a month. It’s a meal that either Sarah and I can assemble quickly, it’s very inexpensive (because we can always buy the items when they’re on sale and stock up), and it’s something our whole family likes. Find a few meals like that for you and your family and it becomes much easier to just make one of those instead of ordering food.

Final Thoughts

A frugal life provides the foundation for investing, no matter what your goal might be. Frugal choices enable you to start saving for your goals now rather than later because you control the action. You make the choice that gives you the money to invest with.

If you feel guilty because you’re not investing for retirement or for other goals, take a few frugal tactics, apply them to your life, figure out how much they’re saving you, and start investing that amount. You lose almost nothing from your quality of life, but at the same time you’re now working toward a powerful life goal and making real strides toward that grand destination.

Good luck!

Related Reading:

• The Five Most Important Factors for Investment Success
• A Simple Guide to Choosing a Strong Investment Option in Your 401(k)
• My Favorite ‘Little Wins’ — 12 Simple Frugality Tips That Just Work

The post The Incredibly Valuable Role of Frugality in Investing appeared first on The Simple Dollar.

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Sounds Great: How to Sell Your Old Vinyl Records for Fast Cash

Time to Buy a New Car? You Need to Read This First

There’s nothing quite like the smell of a new car — whether that car is brand new or just new to you. But along with that lovely smell comes a sometimes not-so-lovely experience with the dealership’s finance-and-insurance department.

You might have to sit in a stuffy office for what seems like weeks while you undergo credit checks and other not-so-fun stuff to determine if you’re worthy of a car loan.

And once you have an idea of the loan you can expect, you then have to negotiate with the F&I manager to get the best deal based on your credit.

Seriously, buying a car can be exhausting and stressful. It’s no wonder so many people put it off and continue driving their old and increasingly crappy rides.

If you’re in the market for a new ride, make sure you’re prepared for the financial stuff beforehand. Here’s what you need to know.

Determine Your Budget

Before you set foot inside a dealership, you need to know how much you can afford to spend on your new car.

DMV.org explains that a good rule of thumb is to spend no more than 15% of your monthly income on your car payment. And even that depends on how many other expenses you have per month. If you’re still paying off student loans or trying to launch your emergency savings, you’re better off spending less than 15% of your income on a car.

Your monthly payment will be lower if you can afford to shell out a large down payment. DMV.org reports you’re also more likely to get a good interest rate if you make a larger down payment.

The other thing you’ll need to know is your credit score. According to Bankrate.com, borrowers with a credit score is between 781 and 850 get an average annual percentage rate of 2.6% on their new-car loan. If they go used, they can expect an average rate of 3.4%.

As you might expect, that percentage increases with a lower credit score. The average buyer with a 661 to 780 credit score can expect a rate around 3.59% on a new-car loan. That average rate increases to 6.39% with a 601 to 660 credit score, and to 13.53% with a 300 to 500 credit score.

Once you know your budget and credit score, it’s time to contact your bank about loan options. While you might be able to get a better deal from the dealership’s F&I office, having a preapproval letter from your bank will help expedite the process of buying your car, since you’ll better understand what you can afford and what you’re looking for. This also gives you the upper hand because you can negotiate the car’s price as a cash buyer and have ammunition to help negotiate your loan.

Documents You’ll Need

By now, you probably know how much you can spend on your next car, and you might even have your eye on a specific vehicle. But what should you bring with you when you visit the dealership? Lending Tree lists five documents you need to have with you if you’re ready to drive home in a new car.

Proof of Income

That could be as simple as pay stubs from your employer or tax returns if you’re self-employed. Generally speaking, it’s better to be overprepared than underprepared, so if you think you might need it, bring it with you.

Credit and Banking History

If you have any documentation about your credit or banking history, bring that with you The dealership will run your credit before looking into your loan options, but these documents

can be helpful when filling out paperwork or as proof to the bank. This includes credit card statements, lease or mortgage agreements, bank statements and alimony or child support records.

Proof of Residence

The bank sometimes needs to verify you live where you claim you do, so bring some proof of residence. This can be a bill, bank statement or other form of mail that includes your address. It needs to be current, so stick with documents sent within the last month.

Vehicle Information

It’s 2017, so there’s a good chance you know exactly what vehicle you want before you even step into the dealership. Between google searches, reading reviews and checking out prices, today’s buyers are more aware than ever when it comes to knowing what they want.

Write down all the important information about the vehicle you want, such as purchase price, vehicle identification number and stock number, and bring it with you. You can usually find this information on the dealership’s website.

Proof of Insurance

Finally, you need to prove you have car insurance before driving away in your new car. You can contact your insurance company from the dealership and let them know about your new car purchase — you can likely even get proof of insurance instantly using your insurance company’s app.

Terms You Should Know

Dealerships and their F&I offices are full of confusing acronyms and terms that you probably don’t hear in everyday life. Here are a few of the most common ones you’ll encounter:

Manufacturer’s Suggested Retail Price

This is the price that the automaker determines for the vehicle. The dealership’s price could be more or less than MSRP, depending on the level of demand for the model and any special offers from the manufacturer or the dealer.

Sticker Price

The sticker price of a car refers to the price that appears on a new car’s window sticker, which also referred to as the Monroney sticker. Federal law requires all new cars to have this sticker, which lists the car’s base MSRP, the price of any installed options, the destination charge and the fuel economy rating of the car.

You may also find an addendum sticker near the Monroney, which could include any dealer-added options or pricing adjustments due to demand.

Invoice Price

A car’s invoice price refers to the amount the dealer paid the manufacturer for the vehicle. Invoice price includes the destination charge, which is typically excluded from MSRP. Note that the invoice price might not reflect the actual price the dealer paid; manufacturers often give dealers rebates and other incentives not reflected by the invoice price.

Destination Charge

This is the price the manufacturer has set to cover the cost to ship the vehicle from the factory to the dealership. You can usually find this information in the disclaimers on the manufacturer’s website. Add this charge to the MSRP to figure out the total pre-tax amount you’ll pay for the car.

Annual Percentage Rate

APR is the amount it costs you to borrow money from a lender. This number includes the interest rate and any fees associated with lending you money for the life of the loan. As previously mentioned, your APR will likely be higher if you have bad credit and lower if you have good credit.

Extended Warranty

Chances are your F&I manager will try to talk you into buying an extended warranty. They’ll probably make it seem like a fantastic idea, but it can drive up your monthly payment and might not be in your best interest.

My husband got one for his car, which we bought a few years back, but we never used it, so I declined it when we bought my car last year. It’s completely up to you whether you opt for the extended warranty or not. New cars come with factory warranties, but these extended plans can give you peace of mind if you plan to hang onto the car for a while.

Prepayment Penalty

This is an important one to know, especially if you expect to pay off your loan early. For example, I want to get my loan paid off as quickly as possible, so I throw any extra money I can at it, including tax returns, bonuses or money I make freelancing.

But some lenders charge you for doing this. Be sure to ask your dealer if the loan they’re proposing includes this penalty. If so, consider using another lender if this might be an issue for you.

Trade-In Value

The trade-in value is the amount the dealer will give you for trading in your current car. You can use this amount to put toward your new car as a down payment. Keep in mind, though, if your car has a loan on it, the dealer will send the payoff amount to the lender and apply the difference to your new car.

If your trade-in car is financed or leased, contact your lender to find out what your payoff amount is before going to the dealer.

Buying a car can be a stressful experience. Rather than winging it when you need to buy a new car, arm yourself with the knowledge you need to make a smart decision. You’ll find the process less intimidating and more enjoyable overall if you know what to expect throughout.

Catherine Hiles has bought three new cars in her lifetime, and also some not-so-new beaters. Her favorite and most infuriating was an old Jeep Wrangler that was fun to drive but not so fun to repair.

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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How a Home Equity Line Impacts Your Credit Score

Are you considering applying for a home equity line of credit? Home equity lines of credit, commonly referred to as HELOCs, represent an attractive type of financing that home owners may decide to take advantage of for a variety of different reasons. HELOCs are commonly used to finance home improvements, to pay off expensive credit card debt, and to pay off student loans, among other purposes.

What Is a HELOC?

In many ways, HELOCs are similar to credit card accounts. Instead of a fixed initial loan amount (as you’d get with a traditional home equity loan), the loan is set up to allow a maximum limit of available funds.

As a result, HELOCs offer flexibility to borrow only as much as you need, leaving you the option to access the remainder of your available limit at a later date if desired.

Unlike credit card accounts, however, HELOCs are secured by your home — and if you default on the loan, then the lender can take your house, as it has been pledged as collateral.

HELOCs resemble credit cards in other ways as well. Both are considered to be “revolving” lines of credit, reported to the credit reporting agencies as “R” type accounts (for “revolving”). And, interest is only incurred if you do not pay your balance in full each month.

Pros, Cons, and Myths About HELOCs

One of the biggest pros HELOCs may offer are their typically attractive interest rates. Interest rates will vary from state to state and lender to lender, so your best bet is to research home equity rates before you decide where to apply for your loan. However, since lenders get the security of your home as collateral, HELOCs boast rates that are much lower than the average credit card account and many other types of personal loans as well. That’s one reason HELOCs are often used to consolidate more expensive debts.

Another great feature of HELOCs is the fact that, like mortgage interest, the interest you’re charged on home equity loans, if any, might be tax deductible (though you should always check with your tax advisor to be sure). Additionally, HELOCs are the only other type of loan (besides a credit card account) where interest is optional, since you can pay the balance in full each month before interest is assessed, if desired.

The biggest con associated with a HELOC, as addressed above, is the fact that by securing the loan with your home’s equity, you could be putting your home at risk in the event of a default. Because of the way these loans are structured, a HELOC is sometimes referred to as a second mortgage.

Unfortunately, if you find yourself unable to pay back your loan, the lender might be able to initiate foreclosure proceedings on your home. The simplest way to avoid this, of course, is to borrow only what you can afford to pay back, and to pay your bill on time.

Finally, a common credit scoring myth has been born out of the fact that HELOCs are considered “revolving” accounts. It’s time to clear things up.

Credit scoring models like FICO and VantageScore are designed to focus on your revolving utilization ratio — that is, the relationship between your balances and credit limits — on your revolving credit card accounts. This means running up high credit card balances relative to your credit limits can lower your credit scores, even if you make all of your monthly payments on time.

Despite some misreporting on the issue, and the fact that both are considered “revolving” debts, HELOCs are not counted when credit scoring models calculate the revolving utilization ratio on your credit card accounts, as a HELOC is not considered a credit card account. Therefore, the fear that a heavily utilized HELOC may negatively impact your credit scores in the same way a nearly maxed-out credit card account might is unfounded.

Related Articles: 

• What the HELOC? A Home Equity Loan vs. Line of Credit
• Does Taking on More Debt Boost Your Credit Score?
• Best Home Improvement Loans

John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at 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.

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Where to Find Work From Home Medical Insurance Jobs

By Holly Reisem Hanna When I started my nursing career (many moons ago), I envisioned myself working directly with patients in a hospital setting. But after a grueling year of working on the hospital floor, I decided to switch gears and try a desk job, specifically as a Prior Authorization Nurse for the Texas Medicaid […]

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Shoppers take to their phones for Cyber Monday deals

NEW YORK (AP) — Weeks of deals didn't stop people from heading online to shop on the Monday after Thanksgiving.Cyber Monday is likely to be the biggest U.S. online shopping day ever, according to Adobe Analytics, the research arm of software maker Adobe. Nearly $6.6 billion in sales were forecast by the end of the day, up about 17 percent from a year ago, Adobe said. And more people are picking up their phones to shop: Web traffic from mobile devices, including tablets, is [...]

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How to create a password to give you peace of mind

There really is no excuse for failing to select a strong password, one that is hard for a hacker to crack.

It’s quite easy, for example, to string three random words together, beginning each with a capital letter, because complexity makes it harder for the hackers, while you get a memorable password.

Yet, left to our own devices, most of us would take a simple eight letter password and use it on every account, from banking to utilities, from our home computer to buying theatre tickets.

• 10 tips to beef up your cyber security

Research carried out by credit reference agency Experian earlier this year, found that more than half (55%) of the 2,001 people surveyed use the same password for multiple online logins. 

To make matters worse, passwords will probably be based on something highly personal, such as the company we work for or our child’s name.

These are the possibilities that a hacker will try first in trying to gain access to our accounts.

And just to top it off, you put all your favourite things on social media for everyone, including hackers, to read. Never publicise anything that you use as a password – or better still, pick passwords that are based on things that you would never mention in public.

Among the most common passwords are: password; monkey; football; 123456; and 123123. But while this is a good start, you should avoid these as they are far too easy for cyber criminals to crack.

How to create a strong password

The best way to create a strong password is to use three random words because length gives complexity.

The strongest passwords also contain a mixture of capital and lower case letters, numbers and symbols – so you can simply supplement these within your three random words.

One possibility is to substitute numbers or symbols that look similar to letters, such as 1 or ! for I; 4 for A; *, 0 or () for O; or 8 for B. You could substitute * for A or S since that is the first letter of the word asterisk and of star.

Do remember, though, that the more obvious a substitution is, the more likely a hacker is to guess it.

Another idea is to use the first letters from the line of a song lyric, preferably an obscure one. Use a different line of the song for each password.

Or select a book on your bookshelf and use the opening words on a page, using separate pages for each account.

Some sites tell you when you create a password whether it is weak, medium or strong. It should not need saying that you should ensure that yours are strong. The warning is there for your own good. Do not ignore it.

How to remember passwords

The main problem is to remember all your passwords, especially if you follow sensible advice to have a different password for each account.

The idea behind picking three random words to create your password is not only because it’s strong, but also so you can pick something that’s memorable to you but not easily guessable to others.

At the very least, have a strong separate password that’s easy to memorise for your email account, which is typically the gateway to your identity and to other financial information. Make sure that this password is completely different from any others you use. Accounts that don’t have money in are obviously less important than those where a hacker can cost you cash.

• How to manage multiple online passwords

Do not store a list of your passwords anywhere on your computer or written down on paper in your house. If anyone succeeds in hacking into it they will take the list and use it. Also, do not tell your computer to save a password unless the account in unimportant.

If you must write passwords down in order to remember them, encrypt them in a way that is familiar to you but makes them indecipherable by others.

Those who simply cannot cope with multiple passwords may find that the solution lies with online password managers. These online accounts, which are available as free and paid-for services, typically store all your log-in details and protect them with a single master password.

The big worry with these services is whether the information is safely stored in the cloud, given that other supposedly safe websites have been hacked.

One provider Moneywise spoke to says data is encrypted and decrypted on your device and that the master password is not accessible even by the company itself. It adds that authentication when logging in requires two steps to provide extra security.

Ensure you check how safe your passwords are before signing up to these services. For more information about password managers, see 17 ways to protect your money in 2017. 

Change passwords if a company you use is hacked

But it is not only you who needs to keep passwords secret. You are relying on any site you use to be equally careful.

If any company that holds your password has its computer system hacked, you should assume that your password has been stolen and will be used fraudulently. Do not wait for the company to admit passwords have been stolen.

• Take a #TechFree15 minute break to protect your devices

If this happens to you, and you use the same password on other accounts, then you need to change your password on every account immediately.

Making and memorising strong passwords may seem a lot of boring effort. It is, however, a lot less stress than having your bank account cleared out.

For more information on this and tips on how to protect yourself online, visit the Moneywise hub in partnership with Cyber Aware - Stay secure online: How to be Cyber Aware - and see Cyberaware.gov.uk.  

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These 5 Parenting Sites Will Pay You to Write Stories About Your Kids

Your world shifts when you gain the title of mom or dad. You’ll learn new things about yourself, and you’re bound to come across incredible moments you just have to share with those around you.

Why not get paid for telling those parenthood stories?

These five parenting sites dole out cash for accepted submissions.

1. FamilyFun Magazine

FamilyFun focuses on families with kids from 3 to 12. It accepts article queries and completed work on topics including crafts, food, travel and more.

Compensation varies depending on which section you choose to write for and the length of your piece.

On the low end, you can receive $100 for submitting a photograph paired with a 50- to 200-word first-person piece on how your family has fun. On the high end, you could get paid $1.25 per word for a 3,000-word feature story and earn $3,750 if your query is accepted.

It could take up to eight weeks to receive a response to your submission. See here for more information.

2. Parent Co.

Parent Co. focuses on parenthood topics from positive, informed and sometimes lighthearted perspectives. The publication accepts a variety of submissions, including personal essays, research-backed investigations, timely reporting, reviews and roundups.

Writers can get paid $50 to $150 for previously unpublished work, plus they have an opportunity to receive bonuses up to $300 based on how much engagement the article receives on social media.

The site notifies writers within three weeks to inform them if their submission has been accepted.

The publication also hosts a monthly writer contest that solicits creative nonfiction content — 500 to 800 words long — based on a specific theme that changes each month. The contest pays $150 for the winning submission. Finalists whose pieces are shared on Parent Co’s Facebook page can receive up to $300 based on social media engagement.

See here for more information about writing for Parent Co.

3. Focus on the Family Magazine

Focus on the Family is a Christian-based publication with marriage and parenting content. This magazine publishes practical parenting advice, articles teaching children about biblical lessons, features on well-known Christian personalities and stories told from unique perspectives such as adoptive families, blended families or single-parent families.

The magazine’s call-for-submissions page outlines the type of content editors are immediately seeking. For example, until Dec. 7, 2017, the publication is accepting 600-word stories about helping children in blended families deal with isolation. Compensation for accepted submission is $200.

There is also an ongoing call for 50- to 300-word submissions on practical ideas for parenting children in specific age groups. These submissions pay $50 if accepted.

The magazine’s writers’ guidelines detail the general content editors seek throughout the year. Pay starts at 25 cents per word for most submissions.

4. Her View From Home

Her View from Home is a lifestyle site with stories told from the perspective of mothers. The site accepts 600- to 800-word pieces about parenting, family, health, grief and other topics.

Payment is based on how many unique views your article receives. On the low end, writers get paid $5 if their post receives 250 to 500 unique views. On the high end, writers receive $100 for posts that get over 4,000 views.

Writers can also submit previously published content for the chance to earn $50 if their republished piece receives 10,000 or more new unique views.

The site states it attempts to reply to submissions within two weeks. See here for more information.

5. Babygaga

Babygaga focuses on pregnancy and babies. This publication accepts submissions that cover topics including gestation symptoms, pregnancy fitness, newborn facts, DIY projects and more.

Though the site states all published pieces are paid, it does not detail the amount of compensation.

Interested writers must fill out a contributor application form that includes three ideas for potential articles. See here for more information.

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

Editorial assistant Jessica Gray contributed to this post.

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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CFPB Has Only Refunded $12 Billion, So Why Should We Care Who Leads it?

The Consumer Financial Protection Bureau has a branding issue.

The government watchdog agency was created after the 2008 financial crisis to look out for the interests of consumers and make sure none of our financial institutions could run amok at our expense.

Since then, it has taken on federal and private student loan servicers, payday lenders, subprime auto lenders, credit reporting agencies and big banks accused of unfair, deceptive or abusive practices.

With Director Richard Cordray at the helm, the CFPB has imposed about $12 billion in fines on financial institutions and returned it to consumers who were wronged.

But major leadership changes are coming to the agency following Cordray’s resignation.

On Friday, the CFPB issued a press release announcing Leandra English as deputy director of the bureau. The assignment would mean English, Cordray’s former chief of staff, would become the acting director in Cordray’s absence.

The same day, the White House issued a press release naming Mick Mulvaney, the current White House budget director, as interim director. Mulvaney has actively worked to limit the CFPB’s power in the past, Reuters reported.

As the drama plays out, many people still have no idea what the CFPB is or what its employees do every day. Now may be the time to learn.

Not Everyone Loves the CFPB

The agency’s most notable actions include a lawsuit against Navient, one of the largest federal student loan servicers. The CFPB accused the company of steering borrowers into more expensive repayment plans despite a public commitment to help borrowers manage their loans in a way that works for them.

In response to the CFPB lawsuit, Navient admitted that “there is no expectation that the servicer will act in the interest of the consumer,” Bloomberg reported.

The CFPB also forced Wells Fargo to pay a $100 million fine after the discovery of its widespread practice of creating unauthorized customer accounts to boost profits.

Those may sound like major wins if you were impacted by either either company’s questionable tactics. But since the CFPB’s creation by the Obama administration in 2011, the bureau has faced opposition because of its broad powers to regulate, fine and sue financial institutions.

U.S. Rep. Jeb Hensarling, a Republican from Texas, called the agency “the most powerful, least accountable agency in U.S. History” in an op-ed in The Wall Street Journal.

Hensarling said the CFPB’s meddling is hurting — not helping — consumers.

“Since the CFPB’s advent, the number of banks offering free checking has drastically declined, while many bank fees have increased,” Hensarling wrote. “Mortgage originations and auto loans have become more expensive for many Americans.”

New CFPB Leadership Brings Lawsuit, Donuts and Twitter Fights

As Cordray exits, new leadership will play a significant role in the CFPB’s future and how the agency will protect consumers and wield its power.

But determining who will run the agency this week is more difficult than it sounds.

The political drama over who will lead the CFPB has played out on Twitter and in court.

Sen. Elizabeth Warren, a Democrat from Massachusetts who pushed for the CFPB’s created, tweeted screenshots of the Dodd-Frank Act and accused President Donald Trump of violating it by naming an interim director.

On Saturday, Trump called the CFPB a “total disaster.”

“Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” Trump tweeted.

Then on Sunday, CBS reported that English filed a federal lawsuit to block Trump and Mulvaney from taking over the bureau.

On Monday, both English and Mulvaney reported for work. Both also sent emails to staffers signed them as “acting director.”

Mulvaney’s email also told CFPB employees to report any additional communication from English and invited his new employees to visit his office to “grab a donut” in honor of his first day on the job.

It’s not clear who will really lead the agency for now, but while that’s being figured out, Trump will have to get to work choosing a new permanent director.

That person, who Congress will need to confirm, will get to decide if the CFPB continues to be the regulatory force that its proponents want it to be — or if its power is stripped away, as its critics hope.

Desiree Stennett (@desi_stennett) is a staff writer at The Penny Hoarder.

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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Citibank Botches Student Loan Servicing, Must Repay Borrowers $3.75M

Citibank will pay $6.5 million for sloppy moves it allegedly made while servicing private student loans.

Former Consumer Financial Protection Bureau Director Richard Cordray announced the settlement before his scheduled departure from the bureau last week. “Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” he said in a statement.

According to the CFPB’s statement, Citibank committed four sins against student loan borrowers from 2006 to 2015:

1. It misled borrowers into thinking they couldn’t take a tax deduction on the interest they had paid on some of their student loans.

2. It charged incorrect late fees and interest to loans that were eligible for deferment because they were still in school.

3. It overstated minimum payments for mixed-status borrowers, those who are paying back some loans but have others in deferment.

4. It didn’t give the borrower the information required under the Fair Credit Reporting Act when it rejected requests to release a co-signer.

Under the settlement, Citibank will pay $3.75 million in refunds to customers who were charged late fees, overcharged for minimum payments or charged unnecessary interest, or who were victims of other faulty servicing practices. Citibank will also pay a $2.75 million fine to the CFPB’s civil penalty fund.

The settlement also requires Citibank to make changes to the way it manages student loans. The servicer will provide further information to borrowers who were denied a co-signer release and to those who were eligible for a tax deduction for the interest they paid. A new policy will reverse any fees made in error, the statement noted.

Lisa Rowan is a senior writer and producer at The Penny Hoarder.

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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