These 14 Strategies Will Help You Save Big on Your Universal Orlando Trip

While theme parks are high on the list of favorite vacation destinations, they can get really expensive really quickly when you factor in extras like hotels and food. 

Here at The Penny Hoarder, we believe in a healthy balance between work and play. So if you can afford it, take that dream vacation and enjoy every second of it — just make sure you don’t completely abandon your penny hoarding ways. 

If you’re headed to Universal Orlando Resort — home to the incredible Wizarding World of Harry Potter — check out the insider tips I’ve developed as an Orlando native and former witch at Universal’s Diagon Alley. You’ll save money in the parks without sacrificing any of the fun. 

Find Tickets for Less

Your savings can start before you even step through the turnstiles — check out these ideas for cutting the cost of park admission!

1. Buy Your Tickets Ahead of Time

The simplest way to save on Universal Studios’ prices for park entry is to buy your tickets before you get to the gate. You can save up to $20 per person when you buy multiday tickets online. If you’re traveling with a family of four, that’s $80 in savings already. 

2. Use Your AAA Membership to Your Advantage

Prices vary, so make sure to ask about discounted Universal tickets at your local AAA office. You can save 15% or more when you buy through AAA.

3. Buy the Lowest-Tier Ticket and Upgrade Later

As long as you purchase your tickets directly through Universal Studios, you can upgrade your tickets at guest services at any point during your trip. 

This is a good idea for anyone traveling with kids — they get sick, burned out and do not care if you spent a hundred extra dollars on a three-day ticket. 

If you come to find everyone is up for an extra day, you can upgrade your tickets by paying the difference — as long as you do so before you leave the park. Once your tickets expire, you’ll have to pay for new ones. 

4. Shop Around Carefully

Orlando is riddled with sleazy ticket vendors promising half-price theme park tickets. 

But beware — even if the tickets you purchase are real, these vendors may be selling them illegally. These tickets often come from park employees or locals who work special events and receive complimentary passes. Universal does not permit the sale of these passes. 

If you get caught at the gate, you’re out of luck — and money. 

Still, there are some reputable ticket sites out there. Just make sure to do your research on the seller before buying.

Travel and Accommodations

After tickets, the hotel and travel fees are the biggest items in your vacation budget. Here are some strategies for saving on these expenses.

5. Book Everything in Advance

If you’re a seasoned Penny Hoarder, you probably already know this tactic: Purchasing plane tickets and reserving your hotel room ahead of time are the easiest ways to get the best rates.

6. To Resort or Not to Resort?

Unfortunately, there is no one-size-fits-all answer here: It’s going to take some number crunching on your end to figure out which hotel situation is right for you.

There are less expensive hotels (or Airbnb rentals!) if you leave the Universal Resort property, but you may end up paying more in the long run because you’ll miss out on some pretty sweet perks at the parks. 

To keep it brief(ish), here’s a cost-effectiveness breakdown: Select Universal Resort hotels include shuttle transport to and from the airport and the parks. So staying on the property could save you on transportation costs, plus the $25/day parking fee you’d pay if you were driving.

But more importantly, and something to consider if you had planned to buy Express Passes anyway: Certain resort hotels throw in free Universal Express Unlimited passes for each member of the family — a $129 value per person per day. (Think: Family of four spending four days in the parks. $129 times four people times four days = $2,064.) 

Another bonus? Universal Resort hotel guests get early entry to The Wizarding World of Harry Potter and parts of Volcano Bay: You’ll get a whole hour to explore each morning before the major crowds come pouring in.

Whew. Did you catch all that? Great, because I have one final point to make: If you go the Universal Resort hotel route, and you take advantage of those Express Unlimited passes, you could feasibly cut a day off your in-park time and a day off your trip (which means one less day paying for tickets and a hotel.) 

If you’re not concerned about crowds, wait times or transportation (maybe you’re driving in to save on airfare!), then a cheaper, off-property hotel might be the right answer for your family. I’m just trying to show you all the options, friends!

Making the Most of Your Time

By making the most of your time, you can hit more attractions without shelling out for extra days inside the gates.

7. Decide if Express Passes Are Right for You

If you’re still on the fence about whether to secure Express Passes for your trip (and you’re not going the resort hotel route), here are some points to consider. Visitors can often package Express Passes with admission tickets, lowering the overall cost significantly. 

However, if you’re a serious Harry Potter fan, you should know that Express Passes are not valid for some attractions in Diagon Alley and Hogsmeade. Here’s a really helpful guide that breaks down Express Passes along with the rides and attractions they work on. 

If you decide you don’t need to skip the lines all day every day, you could buy each member of your family a one-day Express Unlimited pass. You can knock out a pretty hefty list of attractions that day, then go at a more leisurely pace for the remainder of your trip.

8. Plan Your Vacation Around Peak Season

Check this handy crowd calendar from Orlando Informer (a seriously great resource for all things Orlando and theme parks) to figure out which days will be the least crowded. Smaller crowds mean less wait time; less wait time means you can spend fewer days in the parks; and fewer days in the parks means you save on tickets. 

Attendance is lowest on weekdays, particularly in late fall and late winter. If your family can afford the time off work and school, you’ll get the most bang for your buck at these times.

Save on Universal Studios’ Prices Inside the Park

While most of your savings will come from big-ticket items like park entry and the hotel, the little things can add up quickly. 

9. Use the Lockers

Bring everything you think you’ll need with you, and rent an all-day locker for about $10 per day. You get unlimited opening privileges, unlike the timed and complimentary lockers, so you can use your locker as a home base to return to when you need to reapply sunscreen, change into dry clothes or grab a sweatshirt for the evening chill (yep, even in Florida). 

Even though you’re paying $10 a day, you’re saving money by not shelling out for $40 sweatshirts for the whole family when the sun goes down. 

10. Avoid Paying for Pricy Food

Theme park food is expensive. On your way to your hotel, purchase breakfast food (if your hotel doesn’t offer free breakfast) and portable snacks. The parks allow small snacks that don’t require heating or refrigeration — and while you can’t bring a picnic lunch, the rules are a little fuzzy as to what constitutes a “small snack,” so you can probably make a case for many items.

Avoid buying expensive sodas and bottled water inside the parks — you can bring in sealed or empty water bottles to refill throughout the day. 

Now, while this Penny Hoarder would usually recommend bringing all the snacks, splitting meals four ways, and avoiding expensive alcohol and novelty treats, I do have one caveat: If you’re primarily there for The Wizarding World of Harry Potter experience, consider investing in a dining plan. Even if you just purchase one, your whole party will be able to sample the fun Wizarding World treats — and if butterbeer is a non-negotiable, you’ll save a good bit of money with the dining plan.

11. Purchase Souvenirs Ahead of Time

The parks are full of fun T-shirts, plush toys strategically placed at a kid’s eye level and themed gear, such as wizarding wands and robes, all at a huge markup. 

Save money on souvenirs by purchasing toys from a different retailer and packing them in your suitcase. Then, when you arrive at your hotel, sneak them out and make them magically appear on your kids’ pillows. Wizarding World house robes go for about $110 in the park, compared to  roughly $25-$80 on sites like Amazon.

12. Take Advantage of Every Discount

AAA members receive 10% off food inside the parks, so make sure to take your membership card with you. American Express also offers discounts, but the perks change often. You can download the Universal Orlando app to see which offers are available through American Express. 

13. Complain a Little

This one comes not only from me, the former theme park employee, but also from me, the lifelong Florida theme park visitor. I’ve got some experience navigating the system. 

Now I don’t mean you should fuss, moan and stomp your feet. Believe me, that gets you nowhere with most employees. But know that Universal’s main goal is to give every guest an incredible experience. You just don’t build an empire on fantasy and fun without having some extra special perks for your visitors.

If something goes wrong, don’t be afraid to let a team member know about the issue. If you reach the front of the line after an hourlong wait just to see the ride shut down for maintenance, ask for an Express Pass so you can come back when the ride is running again. If someone runs off with your kid’s brand-new stuffed Spider-Man toy, flag down an employee and ask what they can do to help. 

Some team members have the power to procure free treats and gifts to make your experience the best it can be. So don’t be afraid to ask for some extra perks — within reason, of course!

Even (or Especially) on a Vacation, You Need a Budget

Whether you decide to bundle your vacation package or cobble together a kick-ass trip on your own terms, just make sure you’re hoarding pennies wherever you can. 

Take time to sit down and decide exactly how much you can afford to spend on your theme park vacation. Once you have a number, put together a trip that works within the confines of that budget.

And don’t be tempted to go above your set amount — even if you see a $300 wizard’s chess set that you just have to have. (You don’t need it, I promise.) If you’re cringing over Universal Studios’ prices every time you hear a register cha-ching, you’re not going to enjoy yourself, and you’ll have wasted your money on a trip that left you frustrated and mentally exhausted. 

Stick to your budget, and enjoy every minute of your Universal Orlando vacation — after the hard work of planning this thing, you deserve it!

Grace Schweizer is the email content writer at The Penny Hoarder. Orlando-born and bred, she knows her way around the theme parks!

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 women shoppers can beat the pink tax

Products marketed to women are often more expensive than similar products and services for males. From haircuts to medication, gender-based pricing is problematic for female and male consumers alike, and it’s costing tens of thousands of dollars over a lifetime.

A report by the Joint Economic Committee of the United States Congress found that women pay:

• 92% more than men for dry cleaning dress shirts
• 54% more than men for a haircut
• 13% more for personal care products

The report contains many instances where the same product, in pink, costs several dollars more than its male-targeted counterpart.  This discrepancy is what is commonly known as the pink tax.

The pink tax is everywhere

The pink tax affects more than ladies who are purchasing products and services for themselves. It affects anyone who is buying a female-targeted item for someone in their life.

“My wife and I have two boys and a girl,” says Roi Tavor, CEO of Nummo, a personal financial management platform and budgeting app. “Since their very first haircuts, my wife and I were having conversations about hairdressers and the massive price difference when it comes to haircuts. Why does it cost so much more for our daughter to get a haircut?”

The pink tax is also sometimes referred to as the “tampon tax,” as sanitary pads and tampons, which are considered a necessity for most American women, are subject to sales tax in 35 states due to being considered “luxury items.” Necessary products, like medicine and food, are not subject to sales tax.

The New York Times reported that in 2019, 22 states introduced bills to repeal the “tampon tax,” but none were signed into law. 

“The tampon tax amounts to sex-based discrimination,” Period Equity founder Jennifer Weiss-Wolf told The New York Times. Tennis star Serena Williams added, “A tax on periods is wrong. Telling half the population that their needs aren’t important is wrong.”

Possible explanations for the pink tax

In some cases, businesses may have a non-discriminatory reason for increasing the price of goods that are marketed to and sold primarily for females. These include:

• Tariffs: There may be higher tariffs for imported goods made for women, which the seller tacks onto the price.
• Marketing: The creation of a separate line of products specifically geared toward women can add a hefty price tag to production. These increased production and marketing costs are absorbed into a higher price tag.
• Competition: To hold their place in a market where gender-based pricing is prevalent, businesses may not have the option of lowering prices for women’s products and still effectively compete.

In some cases, it’s simply a matter of price discrimination. Businesses know women (and men) will pay certain prices for certain female-targeted items, so they’ll sell them for higher prices.

Why does the pink tax matter?

The pink tax is a problem that goes beyond the price of the product. Women still only tend to make $0.82 for every $1 earned by men, according to the Institute for Women’s Policy Research. For women who are single parents or caregivers for their own parents, they’re responsible for paying for products and services for people besides themselves. 

The pink tax correlates with the widening gender gap regarding poverty. According to the Institute for Policy Studies, 13.4% of women ages 18 to 64 were below the poverty line in 2018, an increase from 10.8% in 1968. In 2018, 9.7% of adult men were below the poverty line. For more than the past 50 years, women have disproportionately been poorer than men, and the numbers are getting worse.

“When there is less money available at the end of the month, it affects the entire family,” Tavor says. “The pink tax is a family matter.”

What categories are the products more expensive in?

A study by the New York City Department of Consumer Affairs found consumer goods marketed toward women and girls cost about 7% more on average than those marketed toward men and boys. Products for women cost more in 30 out of 35 categories and span every industry. 

The categories where products geared towards girls and females tend to cost more are:

• Personal care products: Personal products like shampoo, conditioner, body wash, deodorant, shaving cream, razors and lotions tend to cost 13% more. 
• Adult clothing: These tend to cost 8% more.
• Senior home/healthcare products: These tend to cost 8% more.
• Children’s toys: These tend to cost 7% more.
• Children’s clothing: These tend to cost 4% more.

Even major expenses, like a home loan, tend to cost more for single females. NBC News reports women have lower credit scores, on average, compared to men. This is likely due to the gender pay gap, which causes women to utilize a bigger portion of the total available credit.

How to overcome the pink tax and be a savvy female shopper 

The pink tax is one form of gender inequality that has been deeply ingrained in American culture and other parts of the world for centuries. Gender inequality issues are continually being addressed by researchers and activists.

It’s encouraging when positive action is being taken to address issues like the pink tax. But when change is slow, there are things female shoppers (and shoppers who purchase female-geared items and services) can do in the meantime to offset the pink tax.

1. Research the brands you purchase

If you care where your money is going, research the brands you’re purchasing. You can set up Google Alerts for “pink tax,” “pink tax company” and “pink tax brand.” Whenever news about a company being associated with the pink tax breaks, you’ll get an email notification so you can stay up-to-date.

The pink tax hit consumer news in 2019 when Gillette released an ad campaign targeting toxic masculinity. The company was criticized because it charges several dollars more for the same pack of women’s razors compared to men’s. Staying privvy to news like this can help you make smarter buying decisions.

Also, if you’re buying services like haircuts or dry cleaning, talk to providers you’re considering about their gender-based pricing practices. Ask for the reasoning in the difference before you decide on a provider.

“While companies have no incentives to eliminate the pink tax, female consumers have the power of choosing where and at what price they shop, whether it relates to buying a car, getting a mortgage or that next haircut,” Tavor says. “Only when vendors feel the ‘pinch’ will meaningful price reductions occur.”

2. Consider unisex products

Going back to razors, if the same job can be done with a male-targeted product or unisex product, purchase that one. It’s likely going to be less expensive than the female-targeted product.

“Look at the products you purchase in a different light,” says Dawn-Marie Joseph, founder of Estate Planning & Preservation. “Unisex products will do the job and most of the time at a cheaper price.”

3. Support companies that are taking a stand

Keep up-to-date with pink tax news so you can learn about new companies that are slashing the pink tax. Soapwalla, for example, is a body product company that creates unisex products, so there’s no price discrepancy.

European Wax Center launched a campaign called #AxThePinkTax, where it displays news about the pink tax, companies fighting against it and companies to avoid. Viist the site regularly to see companies taking a stand that you can support. 

4. Be a part of eliminating the pink tax

Awareness is constantly growing about the pink tax, but there is still plenty of work to be done. Start with being more vocal about how you’re spending your dollars.

“Bringing the pink tax to light and refusing to let your hard-earned dollars support such companies is the only way this will change,” Joseph says. “Get them in the profit center, and sure enough, they will change.”

Joseph adds, “Be a smart consumer. You can come right out and ask if the price for you is the same as it is for a man. Tell them you’ll pay the same as ‘a man’ would pay. Try oil change shops, auto dealers, any retail establishments that are mostly staffed by men. It can be a fun game. Remember, it’s your money, so be aware.”

5. Support legislation to stop the pink tax

You can also get politically active. The website Tax Free. Period. displays a map of the United States, which users can click on to see if their state has a tax on tampons, but not on a non-essential item. For example, Colorado has a tampon tax, but private jet parts are untaxed.

Contact your local government representatives to voice your concerns about women’s issues like the tampon tax and the pink tax. Before voting in elections, research the positions of candidates regarding these issues.

In April 2019, California Representative Jackie Speier sponsored the Pink Tax Repeal Act to stop gender-based discrimination when pricing products, the third proposed version of this act since 2016. 

“I think the pink wave that overtook congress in the 2018 elections speaks volumes about how women are stepping up and speaking out,” Speier told NBC Los Angeles. “This is a retail issue, this is a pocketbook issue — this is an important issue.”

The bill is currently in the first stage of the legislative process and has 51 bipartisan cosponsors. It awaits a potential vote in the House Energy and Commerce Committee. You can contact your local representative to tell them you support the bill.

6. Use credit card rewards to offset the pink tax

Until the pink tax is eliminated, one way to offset the lost money is to use a credit card that rewards you with extra cash back on certain items, including unique bonus categories that might change over time.

You can find a rewards credit card with categories you shop in most, so you’re earning more points or cash for what you purchase most often. 

 

The post How women shoppers can beat the pink tax appeared first on The Simple Dollar.

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Why Tax Credits Are So Much Sweeter Than Tax Deductions

When it comes tax time, most of us really only care about one thing: paying as little as possible without breaking any laws, of course.

And while there are legal ways to lower your overall tax burden, not all of these tactics are created equal — which becomes readily apparent as you’re looking over that mountain of IRS paperwork.

In some cases, you may be eligible for a tax deduction, whereas in others, you might qualify for a tax credit.

Don’t get us wrong; both are good. But what’s the difference between a tax credit vs. tax deduction, and why does it matter?

What Is a Tax Deduction?

Let’s start with the tax-lowering method that’s probably more familiar to you: tax deductions. These work by lowering the total amount of your income that’s subject to income tax.

For example, you can often deduct your contributions to a traditional IRA. So if you make $50,000 in a year, but put $5,000 of it into your traditional IRA, only $45,000 of your income will be taxed — even though you technically made $50,000 total.

Thus, tax deductions save you money by exposing less of your income to taxes. In this case, that last $5,000 would have fallen into the 22% income tax bracket for 2019, which means the deduction saves you $1,100, i.e., 22% of $5,000.

Other common deductions include mortgage interest, charitable donations, property taxes and medical expenses that are more than 10% of your AGI, or adjusted gross income. 

What Is a Tax Credit?

Now that we’ve got tax deductions squared away, what about tax credits?

Like tax deductions, tax credits lower your overall tax burden. But rather than reducing how much of your earnings are subject to income tax, tax credits directly reduce your tax bill dollar for dollar. 

In short, they’re more powerful than tax deductions… which means they’re also harder to come by and constrained by stricter rules. 

That said, there are a few tax credits you might qualify for, such as the American Opportunity Tax Credit and Lifetime Learning Credit for education-related expenses, or the Saver’s Credit, which rewards you for contributing to a qualified retirement account. There are also tax credits for people over 65, those with disabilities and those who care for children or other dependents.

But remember how we said they were scarcer and harder to qualify for? Well, all of the credits we mentioned are subject to fairly stringent income tax limits, which means they’re not available to those who earn more above a certain AGI. 

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Meanwhile, most taxpayers can claim the standard deduction, which in 2020 is $12,400 for single filers and $24,800 for married couples filing jointly.

Still, it’s worth determining which tax credits you’re eligible for, if any, next time Tax Day comes around. Fortunately, the IRS has gotten hip enough to create a slate of interactive web tools that’ll help you figure out exactly what you’ve got coming to you — so you can keep more of your hard-earned money in your pocket.

Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, SELF, The Huffington Post, The Motley Fool and other outlets. Learn more at www.jamiecattanach.com.

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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Best Cheap Life Insurance for 2020

The best life insurance policy is one you can afford. 

When it comes to finding life insurance coverage that fits your needs and your budget, cheap life insurance is the way to go. If you’re in decent health, finding an affordable term life insurance policy should be a breeze. The internet has made it possible to shop around and compare cheap life insurance policies from the comfort of your home, and some policies don’t even require a medical exam.

But, which life insurance provider should you go with? While there are a ton of companies offering affordable term policies online, it can be difficult to know which one to trust with your insurance needs and your family’s future.

Your best bet is figuring out which companies are reputable and honest, then comparing pricing with each for the amount of coverage you want. Since term policies all work similarly in the end, providing your family with a lump sum of cash in the event you pass away before your policy’s “term” runs out, pricing is the most important factor you should consider.

The Best Cheap Life Insurance of 2020

To help in your search for affordable life insurance coverage, we took the time to compare more than 20 companies who offer term life insurance policies online. From there, we looked closely at each company and their offerings to see how they stacked up. Based on our research, here are the best life insurance providers for term coverage in 2020 and beyond:

• Bestow
• Ladder
• Haven Life
• AIG Direct
• Health IQ
• Prudential

Best Cheap Life Insurance: The Details

Any of the life insurance companies that made our list would work great for your term coverage needs, but you should still compare each company to find out their strengths. It also makes sense to shop around and compare pricing to make sure you wind up with the best deal. The following life insurance reviews can help you narrow your search.

Bestow

Bestow offers cheap term life insurance coverage for as little as $5 per month, and you can get approved online in a few minutes once you submit a full application. One of the major advantages of this company is the fact they don’t require medical exams. Instead, they rely on technology and advanced algorithms in order to estimate your risk as a customer, as well as figure out the monthly premiums you should pay.

Buying term life insurance from Bestow is also a safe bet since this company is backed by insurers with an A+ rating for their financial stability. Terms are available for up to 20 years with Bestow, and the entire application process can be completed virtually. 

Ladder

Ladder is another online life insurance provider that lets you fill out a full application online and get life insurance coverage in a matter of minutes. This company promises lower prices thanks to the technology they use to determine rates and coverage options. Since they’re fully online, they can also extend policies without having to employ a fleet of life insurance agents.

One interesting detail to note about coverage with Ladder is the fact that they encourage you to “ladder” your coverage over time. This means making sure you have more life insurance coverage when you need it (such as during your highest earning years), followed by less coverage as your needs change over time. This means you’re only paying for the life insurance you need when you need it, and nothing more. 

Haven Life

Another term life insurance company that has grown in popularity over the last few years is Haven Life. This provider makes it easy to apply for life insurance coverage online and get approved in a matter of minutes. It’s possible to secure a policy without a medical exam if you meet specific criteria, and you can choose among policies of various lengths to meet your needs. Haven Life even lets you “estimate your rate” online and without filling out a full application, which makes it significantly easier for you to compare pricing. 

Also note that Haven Life policies are backed by MassMutual, one of the country’s most reputable and reliable insurers. The company may also offer some of the most affordable term policies money can buy right now. For example, they advertise rates as low as $14.99 per month for a 20-year policy for $250,000. 

AIG Direct

AIG Direct is another insurer that made our list due to their affordable pricing and high-quality policies. This company advertises term coverage for as little as $14 per month for a 20-year, $250,000 policy. You can also get a free term life insurance quote online and without any obligation, which makes it easy to compare prices for the amount of coverage you need.

AIG Companies have been providing life insurance and other types of coverage for more than 100 years, meaning they have a long history of financial security. This means you can purchase a policy from AIG Direct and never worry if your coverage will be there if you need it. 

Also note that, if you really want to speak with an agent, AIG Direct does offer phone access to agents who can help you talk over your coverage needs. 

Health IQ

Health IQ offers term life insurance coverage that is uniquely tailored to individuals who are more health conscious than average. Because this company focuses on customers in excellent health, they claim they can offer term life insurance policies for up to 41% less than their competitors. While a variety of health conscious lifestyles can help you qualify, Health IQ focuses on consumers who can run an eight-minute mile, cycle 50 or more miles per week, or deadlift their bodyweight. They also focus on customers who have had a gym membership for at least a year. 

However, you should note that Health IQ is an aggregator, meaning their platform lets you compare pricing among more than 30 insurers. This is a major benefit since Health IQ effectively lets you “shop around” with multiple insurers in one place, but it’s important to understand your actual policy will come from an independent company and not Health IQ.

Prudential

Prudential is another reputable company that offers term life insurance coverage you can secure online. You can call in to their customer service center to speak with a licensed insurance agent about your needs, but you can also get your life insurance policy started online and from the comfort of your home. 

Prudential has an A+ rating with A.M. Best, meaning you can purchase a policy and rest assured it will be there when you need it. This company also offers affordable policies for consumers who aren’t necessarily “young.” A $100,000, ten-year term policy for a 50-year-old male starts at just $22 per month, for example.

The best way to find out how much you’ll need to pay for term life insurance coverage with Prudential involves filling out some basic information on their website. You’ll have the option to tailor your coverage to your needs, including how much coverage you want and how long you want it to last.

Quick Guide to Cheap Life Insurance 

Let’s get things straight: Life Insurance is NOT expensive. In fact, unlike other types of life insurance products, term life insurance is super cheap. In addition to buying term life insurance, we have some other great tips to help you save money. Click each tip for a full explanation or continue reading below.

1. Shop Independently
2. Don’t Procrastinate
3. Be Healthy
4. Don’t Smoke or Chew
5. Drive Safely
6. Don’t Forget the Family
7. Don’t Live On the Edge
8. Be Transparent
9. Set Your Goals
10. Only Buy What You Need
11. Consider the Medical Exam

Bonus: 4 Additional Tips

11 Tips for Getting Cheaper Life Insurance

Follow these 11 simple tips and save BIG on your life insurance policy. 

Tip #1: Shop Independently

Back in the day, my wife used to sell insurance for a big outfit. Since I was also able to offer insurance, we did a comparison.

We based it off a quote she did for a male individual applying for term life. When we ran the quote, it was more expensive to go directly through her, even though we were both offering the same company and the exact same products. Lesson learned: it pays to shop around.

There are stark differences between a captive insurance agent and an independent insurance agent.

• Our Rating
• Best ForComparing Carriers

Captive insurance agents usually represent one company and can only offer policies from that company. Independent agents are allowed to represent several different insurance agencies and are not tied to one specific business. Using a captive agent could be much more expensive, even if you bundle all your policies together.

Make sure to use an independent agent like PolicyGenius who can quote you among various carriers. This is even more crucial if you have some health condition that qualifies you as a high-risk individual. Along those lines…

Don’t buy through your cousin who just got into the business: Agents come – and go just as quickly. Some agencies push hard for new agents to sell to family and friends. Once the supply of familiar contacts has been exhausted, the agent is out looking for a new career. And you don’t want to buy something as important as life insurance from a newbie anyway. 

Tip #2: Don’t Procrastinate

Unless you’re Jack Palance and doing one-arm pushups at the Oscars at the age of 70, the chances are as you get older, your health is going to decline. Surprise, surprise. Procrastinating in buying your term life insurance can have a drastic impact when you go to apply.

I know what you’re thinking: Oh, nothing will ever happen to me.

Tell that to the 37-year-old male who had no prior condition but had a heart attack at the age of 32. Luckily, he’s okay, but due to complications that resulted from the heart attack, getting life insurance is not impossible, but it’s super expensive.

Super expensive does not equal cheap.

The longer you wait, the more expensive life insurance could be, especially if you’re a male. Every year that you get older, your term life monthly premiums could go up by as much as 10%.

Every year that you age is one year closer to death (fun thought right?), which means that insurance companies have to charge you more to earn their money back.

Tip #3: Get Healthy

If your idea of the three healthy food groups is Cheetos, hot dogs and Ben and Jerry’s, then eventually you’re going to pay in more ways than one. Eating crap, aka junk food, can have drastic effects on your cholesterol, diabetes, and high blood pressure, which can crank up your insurance premiums super quickly.

If you’re trying to get the cheapest term life rate possible, you have to cut out the crap.  Regular exercise can also significantly reduce your chances of having health complications or being diagnosed with diseases. 

The American Heart Association suggests getting at least 30 minutes of vigorous exercise every day. 

Similar to dumping bad habits, if you’ve lost a lot of weight and began to exercise, it’s a good idea to ask your agent for a policy reevaluation to see if you’re eligible for lower monthly premiums.

Some of the best life insurance companies in the United States even offer incentive programs to their customers. These programs are working to make their enrollees healthier and live longer.

Each Wellness program is different, but most of them include some “point system” that reduces rates depending on how many points you accumulate. These programs typically include an activity tracker to measure the amount of exercise you do every day.

Tip #4: Don’t Smoke (or Chew)

Not too long ago, I had a client that was applying for a term life policy. He doesn’t smoke, and as far as I knew he didn’t chew either. A week before he had his physical, he was working in his yard and decided to indulge in a cigar to celebrate when he finished.

I’m fairly certain that any other time he could have gotten away with it, but not 7 days prior! Sure enough, the tobacco showed up in his system, and his premium went up; it went up a lot. If you want to make sure you’re getting the cheapest term life policy possible, put out the cigarette and grab a stick of gum.

Smokers can expect to pay double or triple what a non-smoker is going to pay.

If you’re like the client that I worked with that had a celebratory cigar,  find a company that is going to be favorable towards your habits. There are dozens of companies that will allow applicants to have cigars on special occasions, typically a couple every year, and not automatically give you smoker’s rates.

Bottom line: If you’re a smoker, cut that crap out! Kicking the habit will save you thousands of dollars every year (not to mention the money you save from not buying cigarettes).

If you already have a life insurance policy, but you’ve kicked a bad habit like smoking, you can have your policy reevaluated. It’s easy to have your policy reevaluated, in most cases you just have to ask your insurance agent. Depending on how long you’ve kicked these habits, you could receive a lower monthly rate.

Tip #5: Slow Down

A good friend of mine used to drag race cars as a weekend hobby. Supposedly, that weekend hobby transferred over into wherever he drove. His lead foot resulted in several traffic violations, not only increasing his auto insurance premium but also jacking up his life insurance premium.

Having several accidents or speeding tickets could jack up (pun intended) your monthly premiums.

Because of all the deaths that occur due to reckless driving, line insurance agents have started looking at driving records as a part of the application process.

Sure, going 10, 20, or even 30mph. over the speed limit might save you a couple of minutes, but it could break your bank. Stop driving like Jimmie Johnson – you’re not a NASCAR driver! Make sure that your term rates don’t get caught speeding, too.

Tip #6: Don’t Forget the Family

When applying for life insurance, many people don’t realize that family history comes into play, too. Even if you are super fit, but you’ve had a parent pass away prematurely (think before the age of 70), for a condition that could be hereditary, like heart disease in fathers for sons, or breast cancer in mothers for daughters, it could mean bad news for your insurance premiums.

If those conditions took their life, that could mean immediate disapproval in the worst case scenario or a higher rated class in the best case scenario. Obviously, some conditions you can’t control with your parents, but if they’re not exercising and taking good care of themselves, you have an incentive to speak up.

If you don’t know your family history, or you’re adopted, don’t worry it isn’t going to hurt you. Be honest with your agent and tell them that you don’t know how healthy your family history is. So, before you start looking for cheap life insurance, call Uncle Bobby and see how his health is doing.

Tip #7: Stop Living Like Sir Richard Branson

It’s always fun to take a little bit of risk to get your heart rate going. A scary roller-coaster ride, skiing, tubing behind a boat are all good examples of this. Even the top life insurers don’t think twice if you partake in any of these activities.

If you’re a sky-diver, space jumper, crocodile wrestler, that’s a completely different story. Just because Richard Branson likes to do crazy things doesn’t mean that you need to too, especially if you’re trying to get cheap term life insurance. You don’t have to quit all of your hobbies and live in a bubble. You can still continue to do the things you love, as long as your hobbies are safe.

Aside from skydiving, several hobbies can raise your premiums that you might not think about. Activities like riding a motorcycle, hunting, boating, and scuba diving can cause your monthly premiums to go up anywhere from $500 – $2,000 every year.

Tip #8: Tell the Truth

When applying for life insurance, you have to be transparent. You must share everything about your medical history, especially if it’s going to come back on your records. You might not be able to handle the truth, but the insurance companies will, and will do so by denying you.

Lying to the life insurance agent does nothing but slow the process down and cause you more trouble in the end.

The insurance agent wants to help you get the best rates possible; they are working on your team, being 100% honest is important. So before applying for life insurance, be ready to give factual answers for the following categories:

• Your family history – You should be prepared to provide serious health conditions of the members of your direct family line. That can include parents, siblings, and even children, as all can indicate the presence of genetic issues. If your mom or dad died young from health conditions then you may be in for higher rates.
• Your occupation. Some occupations are considered to be hazardous by the insurance industry. Insurance companies will charge a higher premium as a result. This is something that you will want to discuss with your insurance broker, so you can decide the best companies to apply to.
• Health conditions. Think carefully that any health conditions that you have, even if you don’t think they are serious. This can include high blood pressure, high cholesterol, or a previous bout with cancer. It’s always better to disclose these conditions, than to ignore them and hope that the insurance company won’t find out.
• Your weight. They’re going to weigh you so there’s no point in giving an optimistic number on the application.
• What you do for fun. If you have any potentially hazardous extracurricular activities, you’ll have to disclose these as well. Insurance companies do have an issue with people who are into skydiving, deep-sea diving, or flying a private plane. If you don’t disclose it, and the insurance company finds out about it later, they could void your policy.
• Bad habits. This includes smoking, excessive alcohol consumption, and drug use. What you think of as only an occasional habit, can classify you as a higher risk. If you have any these habits, it may be best to drop them before applying for life insurance, if getting the lowest possible rate is your overriding concern. Otherwise, disclose them to your broker so he can find the best companies to apply to.
• Your driving record. A history of traffic accidents, police citations, and especially DWI/DUI episodes will matter for insurance purposes. Information is readily available through databases, and the insurance company will check.
• Your Credit History – I know it seems crazy to think that your credit is a factor in an insurance decision, but statistics do not lie.  Life insurance companies have determined that people who have better credit not only pay their premiums on time but also take fewer risks and are less likely to need to make a claim on their life insurance.

Each of these will have an effect on the premium. Be honest up front, that way you can find the insurance companies that will take the most favorable view of your specific situation. Not only will lying just cause more problems and slow the whole insurance process down, but there could be some serious consequences of lying on your life insurance application.

If you are dishonest and you’re accepted for coverage without disclosing that information, the insurance company could refuse to pay out on the policy. Hiding the truth could cost your family thousands of dollars and leave them without the resources they thought they were going to have. 

Tip #9: Establish Your Goals – What Do You Want Your Policy To Do For You?

This is where you determine how much insurance you need, and for how long and where you match your life insurance to your actual needs so you don’t pay more than you need to.

Here are some common uses for life insurance:

• Paying off your mortgage. If you have 20 years remaining on your mortgage, and you owe $150,000, then a 20-year term life insurance policy for $150,000 will get the job done – assuming no other needs.
• Paying off other debt. If you have large amounts of credit or business debts to pay off, you may want to maintain a policy large enough to do that.
• Providing for your children through adulthood. Figure out how much your spouse will need each year to care for your children without your income, then multiply that figure by the number of years remaining until your youngest child turns 18 or 21. That will also help you to determine the length you need.
• Financing your children’s college education. You may want to make an allowance to cover your children’s college education. Figure out how much that is, and you will have your insurance number.
• Allowing a business partner to buy-out your share of the business upon your death. This consideration is mainly for the self-employed, but it can be super important if you are. You can buy a term life insurance policy that will provide your business partner(s) with the capital needed to buy-out your family’s interest in the business upon your death. Your partner will get the business – and your family will get the cash. Brilliant arrangement, don’t you agree?
• Paying estate taxes on your estate. Even if you have so much money that you are self-insured, you may still want to keep a life insurance policy to pay the estate taxes. In that way, you will ensure that all of the money you have saved for your heirs will go to them, not to the tax authorities.

These are just general parameters to help you decide how much insurance you need, and for how long.

Most people need life insurance for more than one of these issues, so you have to crunch some numbers to come up with the final amount you will need.

This will help you to buy only as much life insurance as you need, which will help keep the cost down.

It doesn’t take rocket science to do this, but I still see many people that fail to do these easy steps.

Tip #10: Only Buy What You Need

Along those lines, don’t buy more than you need. The goal of life insurance policies is to provide for your loved ones after your passing. Because death is a scaring topic, many consumers get worried about leaving their loved ones with thousands of dollars in debt.

This fear will cause a lot of people to buy a larger policy than they need. 

Many financial experts suggest reevaluating your life insurance needs once every couple of years. Because your life changes so frequently, you might find that your life insurance needs change also.

Having children, paying off your house, or going back to college can drastically change your financial situation, which could impact the amount of life insurance you need. Don’t get scared into paying for more insurance than you need.

All this to say: don’t buy a million dollar policy when you need $500k of life insurance and don’t buy 2 million in coverage when you only need one. Don’t overbuy!

The average person actually buys around $400,000.

Your situation is greatly going to determine the amount, as well, even if you aren’t basing it on a few things from above.

Take stay at home moms, for example. While a stay at home parent doesn’t make an income, their work around the home is what allows the other person to go and make an income. Therefore, they need coverage, too!

Think about it like this… if something were to happen to the spouse who is at home, the working parent would be required to either pick up the slack and not go to work (loss of income), or to hire someone to do the same work (increase in expenses). 

Even a $250,000 policy (which is where there are lots of price breaks) can be enough to buy the spouse some time to get things straight over a medium range of time. Buying a $5M policy would obviously be overkill.

Buying a quarter million may even allow you to skip the exam and still get super affordable rates.

Which brings me to my next topic…

Tip #11: Decide Whether Skipping the Medical Exam Is Worth It!

If getting your blood drawn is not your thing, then there are options to get cheap life insurance with no medical exam.

The millennial generation is the greater purchaser of this kind of life insurance coverage because they value convenience more than any other.

Our go-to carriers are Assurity and Fidelity that not only get you life insurance without a physical but also issue the policies very fast.

But you have to realize that if you’re bypassing the medical exam, the insurance company is taking on more risk and you’re going to pay for it.

Another drawback is the protection.

You’ll get the same protection, but you might not be able to get the same amount.

Depending on the carrier, you might be severely limited on how much insurance you can buy.

When does it make sense to get a no exam term life insurance policy?   Here are a few of the most common instances:

1. Need Life Insurance Fast – Most commons reasons are to secure a business loan for collateral assignment or to satisfy a divorce decree. With a no medical exam policy, you can get life insurance much faster.
2. Absolutely Hate Needles –  One client confessed to me that the sight of a needle will make her pass out. A no exam policy was definitely in her future.
3. Totally Impatient –  Do you hate waiting for things to get done?  Traditional term insurance takes 4-6 weeks to process.  Life insurance without a physical can take anywhere from 48 hours to 2 weeks tops to be put in force. Sure, a no medical exam is going to be faster, but that speed doesn’t mean that it’s always the best option.

The other possible situation that no-exam life insurance policies are a good option is if you absolutely CAN’T be approved for a traditional policy with a medical exam.

You have to be careful though, there are people who have health problems, so they automatically assume that they would be declined if they applied for a life insurance policy, but in most cases, that isn’t true.

Additional Ways To Save Money on Your Term Life Insurance Policy

Here are 4 additional bonus tips to keep you from paying too much:

• Buy while you’re healthy. Life insurance is one of those things that we often tell ourselves that we’ll buy “later”. But later can bring about the onset of health conditions that will make your policy more expensive. If you’re healthy now, then now is the time to get your life insurance.
• Avoid up-sells. There are a host of policy riders that can be added on just about any life insurance policy. They have benefits, but they will raise the cost of your insurance. For that reason, you’ll want to keep them to a minimum. Couples should buy their own policies, not just add each other as riders, for other reasons, too.
• Bundle – IF it will save you money. You can sometimes save money on your insurance policies by bundling them together. Just make sure that you aren’t paying too much for one type of coverage so that you can save on another. If the company that you have your auto insurance and homeowner’s insurance through also offers life insurance, you could save a huge chunk by buying it through the same company.
• Make sure the insurance company is reputable. You should make sure that the company is rated “A” or better through a ratings agency such as A.M. Best. It will do you little good to have the cheapest life insurance policy if the company won’t stick around long enough to pay a claim.

Get a Free Life Insurance Quote Today and Save

Life insurance is important for any family.

No family should ever have to worry about covering the final expenses of their loved ones.

Life insurance will not only pay for bills if something were to happen to you, but it also gives you peace of mind knowing your family is taken care of.

Getting cheap term life insurance is not difficult.

Get your free quote now so you can have a policy in place as soon as possible.

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How to Keep Travel Costs Low During Holidays

For us, family and friends are a major part of the holiday season. Given that our family and friends are spread out in many parts of the country, this sometimes means holiday travel for the five of us, and that, of course, means watching costs carefully. If I can trim the cost of holiday travel for our family by 25% or more, that has a very significant impact on our December budget.

Over the years, many holiday trips have given us a large repertoire of tactics to use. Here are some of the ones we’ve found the most valuable when traveling for the holidays.

Prepare your vehicle properly for the trip if you’re driving.

Before you leave on any winter driving trip, you should take a few steps to make sure your car is ready for the trip.

First of all, examine the tires and make sure they have plenty of tread on them. The easy way to do this is to take a penny and insert it in the tire treads with Lincoln’s head inwards. If you can see all of Lincoln’s head, you need to replace those tires as soon as possible, ideally before you travel.

While you’re examining your tires, use a tire pressure gauge and make sure they’re all properly inflated (a tire pressure gauge can be found at almost any gas station and every auto parts store for a dollar or two, and proper inflation numbers can be found in your owner’s manual for your car). If they’re not properly inflated, stop by your local service station, as many have free air available for people to inflate tires themselves. It’s easy, takes just a minute, and improves your fuel efficiency.

Check the maintenance schedule for your vehicle. If there’s any maintenance that needs to be done before you would return from your trip, get it done now.

Fill up on gas before you leave. My own experience with both our old SUV and newer van is that ethanol-added gas is not worth the savings and that buying non-ethanol gas will get you so much better mileage that it pays for the difference. It’s also worthwhile to use an app like GasBuddy to figure out where the best deals for gas are along your route.

Make sure that you have some emergency supplies in the vehicle with you in case you’re stranded by the roadside on a very cold night. I recommend, at the very least, some extra blankets, a bag of sand (for getting yourself out of a stuck situation), a first aid kit, an external battery for charging a cell phone and I’m assuming you have extra clothes along on the trip anyway

These tactics will not only reduce the cost of the drive, but will also reduce the likelihood of an accident or a roadside issue which could mean a very big expense.

If you’re flying, choose to fly at unusual times.

This is a really great strategy for saving a ton on your flights. If at all possible, plan your flight for an unusual time. Avoid the day before or the day after a major holiday, as well as the weekend before and weekend after. The more breathing room you give yourself for exactly when to fly, the more likely you are to find a really good last-minute bargain on your flights.

Basically, the tighter your schedule is, the earlier you should buy tickets to make sure your schedule matches, but the more expensive it’s probably going to be. The more you loosen your schedule, the more likely it is you can find cheap tickets to fly for the holidays, so give yourself breathing room on both ends and try to avoid holiday weekend flying.

Bring food from home rather than buying it along the way.

Eating while traveling is expensive. A meal at a roadside restaurant, drive-thru or an airport is going to cost you a lot of money that you don’t really need to spend.

Rather, plan ahead for this by buying food to take with you on the trip. If you’re driving, you can easily pack a picnic meal the night before you depart, grabbing it on your way out the door as you leave the next morning. It’s going to be cheaper, healthier and tastier than almost anything you’d get along the way, plus you don’t have to slow down your trip for food. Be sure to bring along plenty of snacks as well, as snacks in hand are always cheaper than what you’ll find at a gas station or a rest stop vending machine.

You can do the same thing when traveling through an airport, though you should keep in mind that the TSA will confiscate any liquids more than three ounces in volume. Thus, take along empty water bottles that you can fill once you’re through airport security.

Ship presents rather than packing a suitcase.

If you’re taking a bunch of gifts for a holiday gift exchange, it’s going to be much cheaper and more reliable to ship them yourself rather than trusting them to make it through airport luggage during an incredibly busy time of the year. Ship a large box of gifts and clothes to the destination if you’re flying so that you can make the trip just with a carry-on bag. Ship it a little early so that it has plenty of time to arrive at your destination. Uncle Larry can just stick it in his garage for a couple of days. (You can do the same on the return trip, too; just repack the box and stop by a UPS Store when you’re about to leave.)

Even better, if you’re ordering gifts from online retailers, simply have those items shipped to the destination and inform your host of which packages are coming. They can set aside a couple of boxes for you to save you from having to check a bag or ship a separate box.

Share lodging at the destination.

If you’re doing more than a day trip, you’ll need some form of lodging at your destination, and that opens up a lot of options.

The key to saving money on lodging is to share lodging with other people at the destination. There may be family and friends at the destination that can house you for a few days in a guest bedroom or on a couch, for starters. See if there are any family and friends that can offer you some short term lodging, bringing the cost down to practically nothing.

If such options are unavailable, look for options for sharing lodging with other travelers. If multiple families are coming into the area at once, look into renting a house for a few days using VRBO or Airbnb. While the initial cost of something like that might be high, it can actually become quite cheap if the cost is split among multiple families and spread across several days. For example, you might be alarmed at a cost of $1,000 for a four-day rental, but if three families are there for four days, you’re reducing the cost per night to something more palatable.

If you’re single or a couple without children, you can even look into splitting a hotel room with another single person or couple to reduce lodging expenses. Sharing a hotel room with a sibling or cousin can save you both a lot of money.

Ask for or request gifts that take up little space.

If it’s socially appropriate, ask for gifts that take up very little space. Items like gift cards and pocket-sized items are really nice when receiving a gift at a remote location because it means that they’re incredibly easy to transport back home. They can fit into a carry-on bag or even into a pocket, meaning that the recipient (you, in this case) doesn’t have to worry about transporting or shipping the item.

If you are involved with a holiday celebration where there are remote travelers, it can be worth an email or text to everyone involved to suggest this arrangement to everyone. Just simply remind everyone that small gifts are much easier for travelers to deal with, and mention things like gift cards, certificates or anything pocket-sized. Another option: give the person a picture of the gift but ship the item itself to their home shortly after the holidays.

Eat a big meal before departing to return home.

As with packing food to take with you when you leave, the reason for this is to make it easier to avoid eating at a roadside restaurant or at an airport restaurant. Plan on eating a meal at your destination shortly before you leave and fill yourself up.

A big warm meal in your belly will make it much easier to travel home with just a snack or two, skipping or delaying a meal along the way, which will keep money in your pocket.

Many hosts will plan accordingly, often having a nice meal before guests begin to depart. For the holiday gathering with Sarah’s extended family, there’s always a large breakfast to send off guests on their return trip home. Take advantage of it.

Little tweaks make a big difference.

Small steps like this might seem like simple things, but they often translate into surprisingly big savings. Improving your fuel efficiency by 20% on a long car trip can save you quite a bit of money, for example. Avoiding even a single meal at a restaurant for a family of five can easily save $50. Sharing a hotel room with a cousin can save you both $50. Being flexible with a flight can save you hundreds. Those types of savings can really make a difference in terms of the financial impact of a holiday trip.

Good luck!

The post How to Keep Travel Costs Low During Holidays appeared first on The Simple Dollar.

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Investment trust red flags investors should look out for before buying

Investment trust red flags investors should look out for before buying

One of the most important starting points in investing is knowing where to look for opportunities, yet what is perhaps more difficult is knowing exactly what characteristics to look out for.

Tom Treanor Wed, 12/11/2019 - 10:00

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Closed-end investment funds – some of which are also known as investment trusts – are a popular option for investors and the sector has expanded rapidly in recent years. This widening of the opportunity is surely good news for investors; however, with more choice comes greater difficulty in trying to sift the good from the bad.

It is crucial to be aware of the positive signs that suggest a strong investment opportunity. In the closed-end space this might involve judging the robustness of the investment manager’s philosophy, the strength and independence of the board which provides oversight for the fund, or perhaps the long-term performance.

Equally, if not perhaps more important, is to be aware of the factors that should raise a red flag before you hand over your savings.

Looking past the marketing spiel and examining the detail of a closed-end fund is a vital habit to adopt. Checking a closed-end fund’s factsheet to find out if it is trading at a premium or discount to its net asset value is a good starting point. If it is trading at a discount – where the closed-end fund’s net asset value is higher than the value of its shares – an investor should question what is driving it.

A closed-end fund can trade on a discount for a multitude of reasons. Wide discounts often occur if there is question over the validity of the asset value, poor corporate governance, or where the assets are distressed. Closed-end funds exhibiting these characteristics should be treated with caution.

This is not to say that a wide discount is always a warning sign. Sometimes, the market’s perception of the fund fails to keep pace with changes and improvements that have been made, resulting in an anomalous discount and, potentially, a ‘bargain’ price.

This situation can occur even for high-quality closed-end funds. Times change, and a discount can be a good entry point to a fund that has made improvements that aren’t yet recognised in its share price. Nonetheless, do your research to make sure the discount isn’t there for good reason.

Focus on research

When looking for other red flags, the key to uncovering warning signs involves digging into the detail. Are there any signs of trouble being stored up for the future?

Examining what we call ‘qualitative’ factors, such as the effectiveness and performance of the board, forms part of this process. Ask yourself, does it have a history of standing up for the fund’s shareholders? Or has it perhaps shown an inclination to act in the manager’s best interests rather than those of shareholders?

A strong board should be fully independent from the investment manager, enabling it to question decision-making and ensure it always works in the best interests of its shareholders (i.e., you, the investor).

The voting structure is another important area. Do all shareholders have full voting rights? If not, it could make it more difficult to enact change, and can be a sign that the fund is not open to development. Examining the shareholder base is also crucial - are there large shareholders resistant to change?

A further area of concern is management contracts. Terms which include a punitive termination clause can prove restrictive – there are examples of funds where the termination of the management contract triggers a payment of multiple years of management fees. Clauses such as these can often prove a barrier to a restructuring that may be in the best interests of shareholders.

When it comes to the underlying investments, again looking into the detail is important. You could find the fund does not directly own the assets in which it invests, instead acting  as a feeder fund into a master fund run by the investment manager, and that master fund will in turn own the underlying assets.

This kind of relationship can sometimes mean the board does not have full control over the underlying assets, in which case the fund’s directors may be powerless to intervene or order a sale of assets– something to be concerned about if performance faltered.  

Ultimately, you must make an investment based on your own judgement and personal circumstances. Selecting where and with whom to trust your savings can be a difficult one to make, but with the right knowledge and understanding of the warning signs, an investor can improve their understanding of the risks involved, with hopefully superior long-term results. 

Tom Treanor is head of research at AVI Global

Any opinions expressed in this article do not constitute financial advice, are the author's own and do not necessarily reflect the views of Moneywise.

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Nearly half a million taxpayers request refunds from the last tax year

Nearly half a million taxpayers request refunds from the last tax year

The findings underline the importance of always checking your tax statement for the year.

Kyle Caldwell Wed, 12/11/2019 - 09:58

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 Around 460,000 people chased HM Revenue & Customs for refunds on overpaid income tax in the last tax year (2018/19).

The figures, brought to light through a Freedom of Information Request by Royal London, the mutual insurer, highlight the importance of checking annual tax statements.

Becky O’Connor, personal finance specialist at Royal London, notes: “Nearly half a million people tried to get overpaid income tax back from HMRC in the last tax year. This goes to show it’s a good idea not to assume the taxman is always right about what he says you owe.”

Some of the reasons HMRC gives for overcharging people income tax are that the taxpayer may have changed jobs in the year or be subject to changes to taxable benefits, which might result in an overpayment of tax.

Therefore, in the run up to the 31 January deadline for self-assessment tax returns, O’Connor stresses how important it is to “always check your tax statement for the year and keep a note of any unusual changes to your income that might mean you have overpaid.”

Most individuals wait until January to start the process, although 2,000 people last year filed on Christmas Day.

The majority of those filing will be self-employed, but a large number of families that receive child benefit payments and have an individual income of more than £50,000 will also have to get their tax ducks in a row, even if all their income was taxed at source (through PAYE).

In families where one parent earns over £50,000, the family becomes subject to a ‘high income child benefit charge’. This works out as an effective tax on your income, calculated as a 1% charge based on the amount of child benefit you receive each year for every £100 you earn over £50,000 a year.  

For those earning over £60,000, this charge effectively cancels out any child benefit they were otherwise entitled to receive.

You can check your annual income via your P60 or Personal Tax Account, and use HMRC’s child benefit tax calculator.

This article first appeared on our sister website Money Observer

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HMRC increasingly reluctant to show mercy with plea bargains for tax evaders

HMRC increasingly reluctant to show mercy with plea bargains for tax evaders

The fall in agreements raises concerns that HMRC is becoming increasingly reluctant to let tax evaders come in from the cold and settle their affairs.

Kyle Caldwell Wed, 12/11/2019 - 09:53

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HMRC is entering into fewer agreements that give taxpayers immunity from prosecution for tax evasion in exchange for paying back tax and penalties, data from the international law firm Pinsent Masons shows.

The number of agreements entered into by HMRC under the ‘Contractual Disclosure Facility’ fell 10% in the last tax year (2018/19), down from 486 in the 2017/18 tax year, and 20% lower than in 2016/17.

Pinsent Masons says the fall in agreements raises concerns that HMRC is becoming increasingly reluctant to let tax evaders come in from the cold and settle their affairs.

Steven Porter, partner at Pinsent Masons, says: “HMRC has a growing stack of individuals that it is confident it can prosecute. That means it is less enthusiastic, or even willing to offer plea bargain agreements.”

He adds: “Its new investigatory powers and the reams of data that HMRC gets from private banks, from lettings agents, from the Land Registry, from accountants, means it is not short of leads.

“Plea bargain agreements have become increasingly popular with taxpayers in recent years. In the past, only those with very large tax exposures used these agreements, but now those who owe much smaller sums are applying for them.”

Pinsent Masons adds that the growing volume of data held by HMRC on taxpayers’ offshore savings and investments has reduced its need to enter into plea bargain agreements.

It further adds that the data HMRC now has on overseas savings and investments enables it more easily to build a case against taxpayers and prosecute them.

If HMRC enters into an agreement under the Contractual Disclosure Facility, it agrees not to criminally investigate a taxpayer with a view to prosecuting them, on the proviso the taxpayer follows certain parameters. This involves admitting to evading tax and providing details as to how much is owed.

Taxpayers can apply to HMRC to be considered for this treatment.

This article first appeared on our sister website Money Observer

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