How to Choose the Right Online Broker for You

by Miranda Marquit

Do you want to start investing? If you are ready to begin investing, whether you are interested in mutual funds or individual stocks, one of the best places to start is with an online broker.

There are a number of online discount brokers that offer you the chance to trade at a fairly low cost. Even better, many online brokers only require you to have $25 when you open an account. This means that nearly anyone can get started with investing.

Before you start, though, you need to choose an online broker that works for you. Here are some things to consider as you look for the right online discount broker for you:

Commissions and Fees

Take a look at the commissions and fees. Online brokers have fee schedules where they spell out what you will pay for each transaction. Some brokers offer stock trades (and ETF trades) for as little as $2.95, while others charge $9.95. There are brokers that charge as much as $50 for mutual fund transactions. On the other hand, many brokers also have particular mutual funds and ETFs that they offer at no transaction cost. If you are interested in funds, you will need to look at what expense ratios are offered. You want low-cost funds whenever possible. Some brokers will give you a discount if you sign up for automatic investing plans.

Don’t forget to check account fees. There are some brokers that charge monthly maintenance fees. This means that you pay a fee each month — just for having an account. You might also see other fees for online assistance, or minimum balance requirements. Understand the fees before you proceed.

Research Tools

Many online discount brokers offer a variety of research tools. You can find information about the latest investments, and the news that might influence how these investments are traded. Some brokers offer access to stock and fund screeners that can help you find new ideas for investments. In some cases, you might pay a little more for helpful research and trading tools. A stock broker that offers $2.95 trades might be bare bones. Advanced traders might be fine with these types of arrangements, but beginners might do better paying $4.95 per trade and having access to a wide range of research and trading tools.

Customer Service

Are you concerned about customer service? If so, make sure that you consider this item as you get ready to choose a broker. Many brokers offer live chat. Or, you might email a broker with a question and see how quickly there is a response. Evaluate your situation, and the customer service, and see what makes sense in your situation.

In many cases, it can make sense to pay a little more in fees, if you have access to other perks and tools that are important to you. Weigh which items are likely to be priorities for you. If you are just interested in long-term investing, looking for a broker that offers access to a wide variety of no-fee funds with low expense ratios might be your best choice. Decide what features mean the most to you, and choose your online broker accordingly.

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How Satisfied are You With Your Life?

by Miranda Marquit

What makes you happy with your life? How do the individual aspects of your life combine to provide you with overall satisfaction in your life?

Life satisfaction is the subject of the annual Better Life Index that looks at the factors that contribute to general happiness and contentment. The Better Life Index ranks the 36 OECD countries according to life satisfaction, based on different areas of life.

Once again, the United States didn’t crack the top 10. This year, though, there was a little bit of a difference; Switzerland dethroned Denmark from the top spot. However, Denmark is still in the top 10, along with all the Scandinavian countries and Canada.

What Makes These Countries So Satisfied?

In order to determine which countries are at the top of the list, the Better Life Index takes a look at different factors, and how satisfied residents of various countries are with each of the factors. The factors include:

  • Housing
  • Income
  • Jobs
  • Community
  • Education
  • Environment
  • Civic Engagement
  • Life Satisfaction
  • Safety
  • Work-Life Balance

All of these factors are combined, and the countries that score the highest in the various areas are ranked closer to the top.

One of the interesting takeaways is the fact that countries with low unemployment rates tend to be higher on the list. You can see how having a job impacts other factors associated with the index — particularly income.

If you visit the Better Life Index web site, it’s possible for you to adjust the factors, weighing them according to what’s most important to you. Then you can see which country more closely aligns with your own situation. After making my adjustments, I found that Norway and Sweden more closely resemble my idea of life satisfaction.

Creating the Lifestyle You Want

It’s up to you to decide what’s most important in your life. Personally, I think the work-life balance is more important than income. I’d rather make a little less money than be working all the time at a job I don’t enjoy. I also place a high value on education and community involvement. Living in a community of about 100,000 appeals to me, since I can access community and civic opportunities without getting lost in the crowd. Additionally, I like living in a university town, since it brings educational and cultural opportunities that might not be otherwise available in a town this size.

From whether you prefer to live in a subdivision, or in an urban environment, or on a couple of rural acres, to the kinds of activities you enjoy, think about what makes your life satisfactory. If you aren’t satisfied with your life, take some time to think about why that is, and consider what you can do to make changes so that your life more closely resembles your ideal.

In the end, life satisfaction is about priorities, and whether or not you are able to adequately meet them. Consider the factors above, and how they intersect in your life. Then, figure out what you can do to increase the presence of the most important items.

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Does It Make Sense to Rent a Storage Space?

by Miranda Marquit

As a general rule, I am against renting storage spaces. However, I’ve been re-thinking my stance recently. Depending on your situation, a storage space really might make sense.

Downsides to Renting a Storage Space

First of all, though, it’s important to understand the downsides to renting a storage space. Obviously, the biggest issue is that you are paying a monthly fee to store things that you might not be using on a regular basis.

This has long been my biggest issue with storage rentals. If you have too much stuff for your home, perhaps it’s time to downsize. After all, what are you doing with that stuff? Do you need it? Are you even going to look at it, much less use it?

Buying and keeping stuff just to have it seems like an unnecessary waste of money in many cases. However, I can see how a storage rental might make sense in some instances.

Why Do You You Want that Storage Rental?

Your first step to deciding whether or not it makes sense to rent a storage space is to acknowledge why you want it. For one summer while I went home from college (the only summer I returned to my parents’ rather than remain in my college town), I rented a storage space. I went in with three friends, and we got the smallest storage space available. It seemed silly to lug all of the accouterments of my living space up to my parents’ house, only to bring it all back three months later. Many of the items were small dorm furnishings, like a bookshelf, a floor lamp, and a variety of items I used during the school year, but wouldn’t need during the summer.

If you know that you will be gone temporarily, it can make sense to store your stuff until you can return for it. Likewise, if you want to go through items left to you (perhaps by the passing of a loved one), but you don’t have time to tackle everything before settling the details of selling real estate, or moving the items out of a rented apartment, it can make sense to get a storage unit until you have time to go through the items and make a determination yourself.

My husband and I are also considering what we might do if he should get a job he recently applied for. The job is in a town about three and half hours away. We are trying to figure out the best method for moving, as well as other ways to save on the possible relocation. We think that maybe, if we have trouble selling the house, it might make sense to get a storage unit. He could stay down there during the week, and come home on the weekends. Upon each return, he could take a load to the storage unit. This would make it easier for us to move in general — and give us time to look for just the right situation.

In the end, you need to take the time to evaluate your situation. After all, only you know whether or not a storage unit is worth the monthly cost.

What do you think? What makes a storage unit worth it for you?

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How to Use Kickstarter to Get Your Venture Off the Ground

by Miranda Marquit

One of the hardest things about being an entrepreneur is finding the funds to get your idea off the ground.

Some ventures, like my home business as a freelance writer, requires very little. If you already have a computer, and the Internet, you can start up a business without any additional cost. Even if you don’t have these resources, you can buy a serviceable laptop for between $700 and $1,000 and then find a free Wi-Fi hotspot for your Internet connection.

Other attempts at entrepreneurship, though, cost more. If you need inventory or equipment, the need for funding exists. As you put together your business plan, you will need to figure out where the money will come from.

One way to get started is to use Kickstarter to fund a specific project that is critical to your business.

What is Kickstarter?

It’s important to note that Kickstarter isn’t a place to get general funding for your business. Instead, it’s meant to help you fund a specific project. So, before you can get started, you need to have a project in mind. This project can be a way to help you get what you need to start your business.

One way that many entrepreneurs use Kickstarter is to raise the funds to develop something that they plan to sell. If you have an idea for a product, you can use Kickstarter as a way to raise the money you need to buy the materials and manufacture enough items to sell. Then, you can sell the product for a profit that can further support your efforts.

Others use Kickstarter to get the funds for an artistic endeavor, such as making a movie, writing a book, or creating a work of art. Prints and can be sold later to raise money for a business.

With Kickstarter, backers donate money to a project, and then receive something in return. It’s not like buying stock in a company, or being part of a company at all. It’s considered a donation, and the compensation received is in the form of prizes.

It’s important to be reasonable in your efforts to raise money for a project, though. If you don’t raise enough money within a set period of time, you won’t receive any of the money for your project. You need enough backers to make it happen. As a result, it’s vital that you carefully consider how much to ask for; your project won’t even be partially funded if you fail.

Get Your Kickstarter Project Noticed

If you want to increase the chances of success with your Kickstarter project, you need to spread the word on social media. You also need interesting and attractive prizes to offer your backers.

One of the more interesting prize structures I’ve seen is the one offered at One Million Frogs. This project is for a book to be written by business consultants who struck out to become entrepreneurs. After building a successful business — after some false starts — they are writing about it. Among the prizes offered are business coaching sessions and the opportunity to talk to the authors about business topics.

And, of course, they are offering copies of the book as prizes at the lower tiers.

Think about what you have to offer. It doesn’t always have to be something tangible (although most backers expect to receive a free version of a product or work produced on Kickstarter). If you offer something valuable in exchange for the donation, you will be more likely to succeed.

Think of a unique angle and interesting prizes, and then share the information on social media. You’ll be more likely to be noticed, and increase your chances of success.

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How to Negotiate Lower Payments on Your Debt

by Miranda Marquit

One of the reasons that debt can be such a difficult financial issue to deal with is the fact that interest charges keep you making payments for a looooong time.

If you want to get rid of high interest debt, finally retiring what you owe, it makes sense to negotiate.

Figure Out What You Can Pay

Your first step is to figure out what you can pay. Look at your income and expenses. Which expenses can be cut to make it a little easier to make payments? Is there a way to make a little extra money? Honestly evaluate your situation, and figure out exactly how much you can afford to pay on your debts in an effort to pay them down.

While you want to pay off your debt as quickly as possible, you also want to make sure that you are being realistic. Start small. Don’t get too ambitious about your plans, or they could turn out to be unsustainable.

Call Your Creditors

One of the things you can do is negotiate a lower interest rate. This is one of the best ways to manage your debt payments. If you can get your interest rate cut, more of your payment each month goes toward the principal, rather than to interest that does nothing to reduce your overall obligation.

When you call your creditors, make sure you are polite and you explain what you want to accomplish. Impress upon your creditors that you really want to repay what you owe, but that your financial situation makes it difficult. Make it clear that an interest rate reduction would go a long way toward helping ensure that you can pay off your entire obligation.

As long as you are polite, and state your case sincerely, there is a good chance that you can see a lower credit card interest rate. This will go a long way toward helping you get rid of your debt.

Do You Need a Payment Plan?

If you are really struggling with your debts, it can make sense to work out a payment plan. In some cases, this might mean that you have to close your credit card account, and then make regular payments. With other types of debt, such as hospital bills and other medical debt, you can usually work out a reasonable payment plan that makes the whole thing a little more manageable in the long run.

Settle Your Debt

Another option is offer to settle your debt. If you can pay a lump sum right now, and it is more than the company is likely to get if you default and can’t pay anymore at all, you might be able to pay less than you owe. In many cases, credit card issues have already received more than what you originally borrowed, just in interest payments. Settling might cost them more interest, but it also means the surety of more money immediately.

With hospitals, it is sometimes possible to settle for as much as 50% of the bill if you can pay a lump sum right now. Find out what your options are, and then consider settlement as well as payment plans.

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Are You Planning Your Tax Strategy for This Year?

by Miranda Marquit

Yes, tax season is “officially” over. April 15th has passed, and hopefully everything’s been taken care of as far as your last year’s taxes are concerned.

If you experienced a last minute rush this year, though, don’t set yourself up for the same thing next year. You don’t have to confine your tax organization to the time between January 1 and April 15. If you plan your tax strategy all year, you are less likely to miss things, and more likely to improve your tax efficiency.

What Deductions and Credit are You Eligible For?

Do you find yourself in December trying to figure out what deductions you can squeeze in at the last minute? Instead of waiting until the end of the year, plan for your tax deductions and credits all year. Put together a giving schedule that spreads out your charitable donations throughout the year so that you aren’t straining your budget at the end.

The same strategy can be employed for other deductions. If you have a home business, plan out those deductions year-round. From office supplies, to points paid on refinancing your mortgage, to HSA contributions, plan ahead now

You can also plan ahead for tax credits. Look at what credits you are eligible for (or could be eligible for) and make sure that you meet the eligibility requirements. It’s much easier to plan to reduce your tax bill if you look at the situation now, and plan out over a year. That way, you can make sure that you are positioned to take advantage of tax breaks, rather than being disappointed when you don’t quite meet all of the requirements later.

Organize Your Paperwork Now

You can also keep your paperwork all year. I keep a file just for tax-related documents. As soon as I bring home a receipt, whether it’s for business travel or for some other reason, it goes right into the tax folder.

It doesn’t even have to be a hardcopy folder. You can set up a folder on your computer, and then scan receipts and other relevant documents into it. The important thing is that you stay organized all year. That way, you won’t be scrambling to figure out what happened to all of your documentation later. The right filing system can help you stay on top of things all year, and prevent last-minute meltdowns during tax season.

Consider Using a Tax Professional

If you are unsure of your options when it comes to tax breaks and other items, it can help to consult a tax professional. My accountant helps me prepare my taxes, but he also discusses possible tax strategies for the upcoming year, and for the future. This can be a great help later on down the road if you want to continue to improve your tax efficiency.

While you might have to pay a fee for the help of a tax professional, it can be worth it. The tax savings that I receive as a result of taking advice from my accountant outweigh his fee.

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Tips for Going on a Financial Fast

by Emily Guy Birken

A financial fast can be a great way to kick-start your savings, figure out the holes in your budget, and find contentment with the things you own. While it may seem a little extreme to go on a financial fast—a period anywhere from one week to one month wherein you refrain from all spending other than necessities—it’s an excellent exercise in self-control with lessons that will last long after the fast is over. Here are four tips for making your financial fast go smoothly and enjoyably:

1. Define necessity ahead of time.

This can be one of the toughest aspects of financial fasting. While taking part in this exercise is supposed to be somewhat extreme, of course you will need to be able to purchase things like medicine and food. But once you allow one necessity, it can be easy to say “I really NEED these new shoes/this lunch out with co-workers/etc.” So before you start, make sure you know what will constitute a necessity, and what you truly can live without.

2. Plan ahead.

Know what kinds of issues may come up during your fast that you would normally spend money on. For instance, if you know your children are invited to a birthday party during your fast, figure out ahead of time how you can bring a gift without having to spend money on it. It may be easy and convenient to stop at the toy store, but re-gifting a gently used toy or book or making something as a gift can be more meaningful and better for your pocketbook.

In addition, even if you define food as a necessity for your fast, you will need to make decisions ahead of time as to what and how much you can buy. For example, you don’t have to eat at restaurants at all, and you may be able to get away without grocery shopping during this time. Your fast could be the impetus for your family to eat through everything in the pantry and freezer.

3. Pay with cash.

If you do need to make a purchase during your financial fast, make sure you leave your credit and debit cards at home. You’ll feel the loss of your money much more keenly if you have to count out the bills to pay for your purchase—and that means it will be much less tempting to cheat on your fast.

4. Avoid temptations.

As Americans, we’re constantly bombarded with messages to buy buy buy! You can make it easier on yourself to avoid this if you don’t hang out at malls or shopping centers during your fast. They may be easy places to meet friends for socializing, but they are incompatible with a fast. (Just like you wouldn’t go hanging around an ice cream shop or an all-you-can-eat buffet if you were on a diet.)

You might also want to limit your exposure to television during your fast. We are all susceptible to advertisements, and it can be awfully tempting to give in and order a pizza after you see a mouth-watering commercial for your favorite pizza chain. By avoiding all buying situations and stimuli, you’ll feel much more in control of your own money. (Here are five more ideas to avoid the temptation to spend.)

Using these tips can help your fast to be a jumping off point for many positive changes in your life.

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Your Credit Card Data is Being Sold to Pinpoint You for Ads

by Miranda Marquit

If you surf the Internet for any period of time, it soon becomes obvious that certain ads seem to be following you around. After you make a purchase at a certain store, you might see more ads for that store. Often, ads target your current location, sending you offers related to where your computer’s IP address happens to say you are located.

Big data is able to provide this information to advertisers looking to get an idea of how to target users. And credit card companies are no exception. Basically, your credit card purchases are compiled in data centers and analyzed, then the data related to purchases are being packaged and sold.

Anonymous, But Targeted

Don’t worry, though. You aren’t being specifically identified when your information is sold. Instead, your data is combined with others’ data from your region. Information about what is being bought in a specific area can provide advertisers with a general idea of what might sell well in your locality.

Advertisers can look at the data, and then decide whether or not they want to bid on the opportunity to access consumers in your region. The leads improve for the advertiser, and you see ads that look eerily prescient.

Credit Information and Pre-screened Offers

Another way your information is used is to market pre-screened offers. Credit bureaus sell information to marketers looking for those who might “pre-qualify” for certain products and services. Think all of those credit card applications in your mailbox. Information about your mortgage can be sold to those trying to get you to refinance using HARP. Even insurance companies use the marketing information sold by credit agencies to see whether or not you might qualify for a certain premium — and then they send you marketing information.

It can be a bit disconcerting to be receiving oddly specific offers. And the reality is that these are targeted to you. They are meant to appeal to you, and increase the chance that you will actually buy. To tell the truth, they are sent to you in the first place because there is an increased likelihood that you will take advantage of these products and services.

What Can You Do?

One of the things you can do, if you want to avoid pre-screened offers is to opt out. There are sites online, such as OptOut.com and DMAchoice.org, that allow you to opt out of these offers. While you might not be able to opt out of everything, it is possible to reduce the amount of junk mail that shows up in your inbox.

As far as getting rid of those creepy online ads that follow you around, there’s not a lot you can do. Incognito browsing can mean that cookies aren’t stored and can reduce the amount of targeted ads you see, but if you regularly use online shopping services, or if you are involved in social media, it’s really hard to avoid having the information collected.

What do you do to keep your information private?

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Can You Collect Unemployment if You’re Forced to Retire?

by Emily Guy Birken

Unemployment is tough to weather no matter where you are in your career. But for those individuals who are close to retirement and are laid off or forced into an early retirement, unemployment can be even more disastrous — particularly considering the fact that laid-off workers over the age of 55 will likely be looking for work for 11 months; three months longer than their 20- and 30-something counterparts.

But if you are in that limbo state — where you’re too young to retire but having difficulty finding another job—what are your options? Here is what you need to know about collecting unemployment if you are forced into an early retirement:

Keep Looking for a New Job

While specific unemployment laws vary from state to state, the basis of unemployment insurance is to help laid-off workers who are actively looking for a new position. If you are prematurely retired and have no plans to look for a new position, then you cannot apply for unemployment insurance—no more than a lazy 30-year-old could apply for unemployment if they had no intention of pounding the pavement.

Social Security Does Not Affect Unemployment

One piece of good news, however, has to do with your Social Security benefits. If you have already reached the minimum age to begin drawing on your benefits, those benefits will not be deducted from your unemployment insurance benefits. So if you are already collecting Social Security, or are considering collecting it in order to help you weather your late-career unemployment, you can count on it being an addition to your unemployment benefits.

Severance Packages and Pensions Do Affect Unemployment

Again, the exact laws will vary from state to state, but if you receive a severance package from your company at the time of your lay-off or enforced retirement, then you can expect your unemployment benefits to be smaller. Many states will determine the amount of unemployment benefits based on the size of your severance.

In addition, if you are drawing some sort of pension from your company, that can also affect your unemployment benefits. In general, if you receive a lump-sum pension payment, it will not be deducted from your unemployment compensation. But if you have the option of taking your pension payments on a monthly basis, rather than in a lump-sum, and you choose the lump-sum payout, then your unemployment benefits will be reduced based on what you would have received per month.

The Bottom Line

If you are facing the prospect of unemployment close to the end of your career, the best option is to check out your state’s Department of Labor website. It will help you to understand the specific rules that apply in your area, and it will provide you with the necessary paperwork to apply for unemployment benefits. (Here are more steps to take while you are unemployed.)

While it’s not ideal to be forced into early retirement, it does not have to be a financial disaster as long as you know your rights and keep your options open.

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Income Investing: Dividend Stocks

by Miranda Marquit

One of the ways that you can create a good revenue stream is to become involved in income investing. Income investing is all about making solid, relatively safe investment choices that produce income. This can include interest-bearing investments like bonds and some cash products. It can also include dividend stocks.

Income and Capital Appreciation

Dividend stocks are so popular because they provide the stockholder with regular dividend income, on top of capital appreciation. Companies that pay dividends do so regularly, sharing a portion of their profits with shareholders. Every period (usually each quarter, but some companies pay monthly or semi-annually), the company announces how much it will pay for each share. The more shares of a stock you own, the more you are paid.

If a company has a dividend payout of $0.20 per share, and you own 200 shares, you will receive $40 each quarter. If you buy more shares, you can receive a bigger payout. Additionally, many companies raise their dividends regularly. One group of dividend stocks (the dividend aristocrats) features companies that have increases their dividends each year for at least the last 25 years. Some of the dividend aristocrats have increased their dividend payouts each year for almost 40 years.

This type of payout comes on top of any capital appreciation from the stock. It’s an extra “bonus” that can provide you with income. At the same time, your nest egg is growing as your holdings (hopefully) see increases in value.

Building Your Dividend Income Portfolio

It’s important to understand, though, that you won’t see significant income at first. Any investment strategy requires a degree of patience. The same is true of a dividend portfolio — especially if you have to start out using dollar cost averaging. You might only be able to buy 10 shares of something to begin, and that payout is only going to be $2 per quarter if we use the example above.

The key to building an income portfolio is to plan to build your portfolio over time. It can take 10 years or more, when you start from scratch, to build your dividend income portfolio. However, if you are persistent, you can eventually build up a solid portfolio. A good place to start is with a dividend index fund that can help you with instant diversity. As you begin building assets with your dividend fund, you can then use gains to branch out and purchase individual dividend stocks if you want.

Another great strategy is to use DRIPs during the building phase. DRIPs allow you to automatically reinvest your dividend earnings so that you buy more shares. Essentially, you get these extra shares for free. The extra shares add up over time, and contribute to your total dividend payout. The more shares you can buy, the bigger the payout. DRIPs help you boost your share purchases automatically.

Recognize that building a good income portfolio with dividend stocks takes time. Make a plan, and consistently invest. Add DRIPs into the equation, and over time you’ll build up a portfolio that provides you with regular income you can count on.

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