Should I Invest in Stocks?

The U.S. Stock Market is at an all-time high, and many are wondering how much longer this can be sustained.  People are asking themselves if it is still worth investing in stocks at this high.  The simple answer is: YES!

Below is a chart of the S&P 500, which covers the broad range of the stock market.  The chart below illustrates performance from 1950 until the end of last year.

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Should I Invest in Stocks?

As you can see based on the chart, there are rises and falls, some of which are quite big.  If you look at the chart as a whole, you can ultimately say that U.S. stocks have increased in value over time.  Here are three reasons why one should consider investing in stocks.

Should I Invest in Stocks? Reason 1:

U.S. stocks have outperformed almost every other investible asset over the past 100 years, especially government and corporate bonds.  People often think of bonds as a safer alternative to investing in stocks, but what they really mean by “safer” is less volatile.  Yes, stocks can fluctuate with higher highs and lower lows in a given period of time, but over the long-run they will outperform bonds.

Should I Invest in Stocks?  Reason 2:

Stocks are the easiest and safest way to build wealth.  What I mean by this is that continual investment in stocks will yield higher and higher returns over time if you let your returns compound.  Compounding interest is a great thing when it comes to building wealth and all it takes is two simple steps:

Step 1: Continued investment and reinvestment

Step 2: Time

By continually putting money into your stock investment on a consistent basis and allowing your returns to reinvest, after a period of time you will be able to build a substantial amount of wealth.  And again, since stocks outperform other investments over the long-term, you are compounding a greater percentage each year.

Should I Invest in Stocks?  Reason 3:

Because Warren Buffett says so!  At the time of this post, Buffett’s net worth is estimated to be in excess of $75 billion USD.  It has been said that he is the greatest investor the world has ever seen.  How did Warren and others like him make their great fortunes?  Through investments in stocks.  Warren has constantly invested in companies throughout his time via stock purchases in what he calls “value investments”, which is a simple way to say in companies he believes to be cheap in valuation.  Buffett has gone so far as to say that even upon his passing he would like the remainder of his fortune to be placed in a low-cost index fund that mirrors the S&P 500.  The greatest investor ever believed and still believes in the power of stocks.

Hopefully by now you have been convinced that investing in stocks is the right thing to do, but how do I get started?  Simple, to begin investing in stocks I would recommend investing in a mutual fund that covers a wide range of the U.S. Stock Market.  Investment firms such as Vanguard and Fidelity offer these sorts of funds that will allow you to get exposure to the broad range of the U.S. Stock Market and begin reaping the rewards.

Does Everyone Need An EIN?

If you’re trying to start a new company, then you are probably wondering how you go about making everything legal in the eyes of the government. While the process can be time-consuming, it all boils down to filing paperwork. One of the most important parts of starting a new business is getting an IRS tax ID application so that you can make sure that you won’t get into trouble with Uncle Sam.

Perhaps you’ve heard of the different tax IDs, such as SSN (social security number), ITIN (individual tax ID number), or EIN (employer ID number). Since you’re starting a new business, you may think that you need an EIN, but is that always the case?

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2017: Starting a Roth IRA

We are now well into the new year, but it is never too late to get your finances off to the right start.  Budgeting should have been and still should be your number one goal for the year.  If you haven’t started a budget, you should.  If you have started a budget, then great, keep it up!  At budgetandinvest.com we talk also about investing and the right ways to do it.  One of the best ways to invest your money is by starting a Roth IRA.  This retirement vehicle has many benefits, the main being that your gains and distributions are tax-free when you take your withdrawals.  How do I start a Roth IRA?  I’m about to show you how.

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Starting a Roth IRA

Step 1: Determine if starting a Roth IRA is right for you.  There are a few rules you have to remember when starting.  For example, you can only contribute a maximum of $5500 per year unless you are 50 years of age or older, then you can contribute $6500.  Also, there are income limits to consider.  If you are a single tax filer who makes $300,000 a year, you can’t participate in a Roth IRA.  Additionally, the money you contribute must remain until you are 59 1/2 years old, except for a few exceptions.  For a full list of rules visit: 2017 Roth IRA.

Step 2: Once you have determined that starting a Roth IRA is right for you, the next step is opening up one online.  It is easy to do and requires about ten minutes of your time.  I’d recommend opening it up through one of the following sites:

Vanguard

TD Ameritrade

Fidelity

Step 3: After you have opened your Roth IRA, it is important for you to contribute additional money to it on an ongoing basis.  This allows you to take advantage of Dollar Cost Averaging (DCA).  Ideally you would like to max out your Roth IRA contribution every year if you are able to.  Also, contributing a set amount on a constant basis will allow you to invest your dollars during stock market highs and lows.

Step 4: Stick to a plan, be patient, and watch it grow.  Building a large Roth IRA doesn’t take a stroke of luck or perfect financial acumen, it simply boils down to a few key steps.  Open up a Roth IRA, contribute to it on an ongoing basis (the maximum is preferred), allow your dividends to reinvest, and don’t touch your money.

Whether you have a company 401k, a pension or 403b, a Roth IRA is a great complement to any individual’s retirement plan.  The tax-free income that it can provide in retirement will allow you to offset many of the taxes you will be forced to pay with ordinary retirement accounts and social security.  Don’t hesitate in opening one, the best time to start is now!

Budget Smart, Invest Wise

 

4 Free Online Budgeting Courses to Take Advantage of

As the years progress people keeping finding themselves more and more in debt to creditors. There are some online resources who have deemed this as a major problem. In their efforts to help people better understand money management there are multiple websites that now offer free budgeting courses. If you’re currently struggling with your debt load be sure to act on these courses below.




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What is the Starting Credit Score?

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Starting Credit Score

Having a credit score can have many benefits.  Wait, having a good or great credit score can have many benefits.  As we go through life, credit becomes an essential tool for an individual to progress through society.  You can use credit to purchase everyday items, a car or a house.  Without credit, some of the essential purchases we rely on to carry us through our lives every day would be unavailable, such as a car for transportation to and from work.  Having a credit score and a good one at that can allow you to get the best deal on large purchases and also helps create a financially responsible person.  But just how does one get a starting credit score, and where do you begin?  I will lay out some of the easiest way to start down the path of a good credit score.

Step 1 to getting a starting credit score:

The first thing you need to do to get a starting credit score is simply to get credit.  The easiest way to do this that I recommend is by opening up a $0 annual fee credit card.  Your monthly limit won’t be all that much, most likely less than $1000.  Commit to making a couple easy purchases on it every month and paying it off at its due date.  For example, a couple tanks of gas or a visit to the grocery store is all it takes to start building your credit.  It is vital to pay off the full amount after a month’s time before the card’s due date

Step 2 to getting a starting credit score:

The second step to building a starting credit score is to continue purchases with your credit card and meet the monthly payment date, along with exploring an additional option of building your score.  If you rent an apartment, sometimes the apartment complex allows you to report your on-time payments to credit agencies.  Additionally, if you have student loans you are paying back, this also will show up on one’s credit report.  Time is a big factor in your credit score.  It usually takes at least six months for you to build your first credit score.  Image result for credit score rangeIf you make on-time payments in full, you can expect a score anywhere in the range of 675 to 740.

Step 3 to getting a starting credit score:

By step 3, you should already have shown a positive pattern to creditors through making payments on a timely manner.  The most important part of this step is just to be patient.  Building a good or great credit score takes time.  Two of the bigger factors that impact your credit score are the length of time you have had credit and the number of accounts you have that required credit.  Chances are as you start building your credit both of these factors won’t be too much in your favor.

In summary, there are many benefits to building a good credit score, but it all boils down to a few simple factors.  Firstly, you need to begin building credit through a $0 annual fee credit card, student loan repayment, etc.  Secondly, you MUST make your full payments and make them ON TIME.  Finally, you need to be patient.  It takes time to build a great credit score, but if you budget correctly and make sure not to spend above your income level then a great score will eventually come.

Saving for a Vacation: Ski Edition

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Saving for a Vacation: Ski Edition

We are currently in the heart of wintertime.  January and February are the coldest months in the United States.  While many people despise cold weather, many can agree that the snow which comes with it can be a nice compliment.  Although summertime seems to be the time when most families vacation, a ski trip during winter allows some families to break the mold.  Saving for a vacation is only half the battle.  While having the available funds to do something enjoyable is important, finding a good deal is also just as important.  I recently planned a ski vacation and will share my six tips on how I saved and budgeted for the vacation.

Saving for a Vacation Tip 1:

If you are like me and enjoy traveling with family and friends, then it is important to have a “Travel” category in your budget.  Setting aside $100 or $200 every month for travel allows the funds to add up and allows you to have a couple enjoyable vacations every year.

Saving for a Vacation Tip 2:

Vacationing for many people means eating out every meal, which can get very expensive.  Packing snacks ahead of time and a quick trip to the grocery store when you arrive can help limit your food costs.

Saving for a Vacation Tip 3:

Plan for transportation ahead of time.  Booking a rental car before you arrive to the airport is often cheaper than waiting until you arrive at the destination to get one.  Kayak.com is a great place to search for the best rental car rates.

Saving for a Vacation Tip 4:

If flying to a destination, use Google Flights to search for the best rates.  Google Flights allows you to search many airlines at once and see the cheapest rates for the best dates.

Saving for a Vacation Tip 5:

When booking a ski vacation, book your lift tickets and ski or snowboard rentals online.  Keystone Resort in Colorado offers online reservations to early bookers for a 20% discount.  Additionally, you can rent your equipment cheaper online ahead of time as well.  By booking my equipment through Christy Sports I was able to save an additional 20% versus the walk-in rate.

Saving for a Vacation Tip 6:

Lodging tends to be one of the more expensive parts of any vacation.  Last year when I traveled to Hawaii, a night at a resort was close to $600 per night; however, a couple friends and myself split a three bedroom Airbnb for less than $150 per night.  Exploring your lodging options can help greatly reduce the cost of any vacation.

As you can see, saving for a vacation is a two-fold strategy.  You first want to make sure you have the available funds.  This is done by creating money in your budget.  Secondly, you want to make sure you find the best deals out there.  I have found that planning for a vacation ahead of time is one of the easiest ways to save on your trip.  Meshing both of these aspects together can help create an enjoyable, budget friendly trip for all.

How to Become Independently Wealthy

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How to Become Independently Wealthy

Becoming wealthy is a goal many of us hope to achieve in our lifetime.  Whether you want to be wealthy so you can have unbelievable lifelong experiences or to validate your success, the goal is often dreamed of but rarely achieved.  Ken Fisher, the author of The Ten Roads to Riches, discusses the many ways people can achieve wealth throughout their lifetime, ten to be exact.  All of these roads have proven to make someone independently wealthy throughout their lives.  Some are more common than others.  So if the question of how to become independently wealthy has crossed your mind, I will discuss two of the ten Ken illustrates in his book.

How to Become Independently Wealthy: Save and Invest Wisely

I usually sign off my posts with a simple phrase: Budget Smart, Invest Wise.  Budgeting allows you to allocate your funds to various categories, and hopefully one of those categories is savings.  Whether your savings vehicle is an IRA, Roth IRA or other type of investment, saving money is critical to building wealth.  However, saving is only half of the battle to building wealth this way.  The other key ingredient is investing wisely.  Investing wisely means creating a smart investment plan, be it with a financial advisor or through acquired knowledge, that creates a return on one’s investment.  For example, I have found that investing on a monthly basis in a mutual fund that covers the broad range of the U.S. Stock Market to be of most benefit to me.  I recognize that this investment, although it has risk involved, prevents me from being susceptible to the failure of one company or one sector of the market.  Saving and investing wisely is the road most traveled, but it also provides the greatest chance of reward.

How to Become Independently Wealthy: Invent Income

Inventing income can cover a wide spectrum of earning additional money.  For example, if you are a song writer or musician, you can create an ongoing stream of royalties from your lyrics or music.  If you purchase a property that you decide to rent out, you could turn it into a cash flow positive stream of income.  The possibilities are endless.  Maybe you have a specific skill that people are willing to pay for you to teach them.  Perhaps your area of expertise at work can lead to consulting other companies on the side.  Do you have something you’re passionate about that you can create into a blog or website and charge for ad revenue?  Many of us have the tools, knowledge and capabilities to put our talents towards creating additional income.

Becoming independently wealthy or successful all boils down to one’s level of commitment.  If you are committed to becoming independently wealthy, then most likely you can find a way.  Some individuals, like Bill Gates or Mark Zuckerberg, created an enormous amount of wealth.  Maybe you want billions like these company creators, or maybe you will be satisfied with millions or even a million.  Only you can determine what being wealthy is to you.

How To Trim Your Budget

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With the new year in full swing, people are doing their best to stick to the freshly made New Year’s Resolution’s they mapped out for themselves.  The most common resolution always seems to be losing weight.  Instead of going with the status quo resolution this year, why not try to trim something else?  Your budget perhaps?




How to cut my expenses? Is a question often asked by many in order to free up funds in their daily lives.  Maybe they are living paycheck to paycheck, maybe they are trying to save up money for a special purchase, either way trimming your budget is the best way to go about doing this.

For starters, you need to have a budget.  You can download a free budget template and simply put in your income and expenses.  The best part about budgeting is you get to see where your hard-earned money is going every month.  Perhaps you are spending a large portion on eating out, can you bring your lunch instead of going out to eat?  If so, you might be able to not only cut some expenses but trim your waistline also.

The free downloadable budget allows you to choose the expense categories you have for a given month.  Say for example you spend $100 a month on your cellphone bill, can you change service providers and possibly get the monthly expense down to $80 per month?  If so, you have freed up $20 per month or $240 for the entire year.  Can you trim $10 a month off your grocery bill by purchasing generic products versus name brand?  This can be an additional $120 in savings for the year.  Attempting to save as little as $10 to $20 per category for a few of your monthly expenses can add up to some awesome end of the year savings.

Below is a quick easy way to trim your budget:

  • Create a budget: If you don’t already have one, now is the best time to start budgeting. This will determine where you are spending your money every month.
  • Track all of your expenses: See just how much you are spending in the various categories every month. Some may surprise you.
  • Pick 2-4 categories: By selecting a few categories where you think you can cut some expenses you will maximize your yearly savings.
  • See how much you can cut: It can be $5, $10, $20 or maybe even more per category per month. Living on a little less each month won’t change your quality of life for the worse.  Instead, you can use the money saved to enhance it by saving up for a vacation or a future purchase.
  • Don’t incur new expenses: While trimming your budget to save up money is the ultimate goal, don’t incur new expenses during the process. A car payment or a gym membership will quickly eat away at the money you are trying to save.

Stick to it: Trimming your budget will only be beneficial to your wallet if you stick to it.  Developing discipline for sticking to a budget can be tough but also very rewarding.

 

Confessions of A Former Credit Addict

Confessions of A Former Credit Addict
I need to make a confession. My financial life is in ruins. I am badly in need of credit repair. Throughout the past few months, I have searched for ways to atone for my past money mistakes. Methods that will wipe away old debts and missed payments like squeegee water from a windshield car, idling at a stoplight in Manhattan.




My past misdeeds include filling up my first credit card with hundreds of dollars in bar tabs during freshman year of college. Walking through the quad one day, I came upon a folding table loaded with free t-shirts bearing the logo of a mid-Atlantic bank. I had to have one of those shirts. So I signed up for a credit card with a limit of $800, despite being a full-time student with no income. And promptly spent most of it at local pizza places and a T.G.I. Friday’s where my fraternity brothers bartended.

All that semi-astute financial decision making left me as unprepared fawn in the wilds of the real world during my 20s. I spent freely, saved little and cared less. Debts were left to collection agencies and leases were handled by my parents and girlfriends.

So I have made it a mission to find and call out the best credit repair companies throughout the land. Today I own a house and 2 cars, living a good school district. All thanks to taking advantage of the great credit repair services from places like Sky Blue Credit Repair.

Credit repair is a necessary service these days. The country is under duress, with household after household struggling under the weight of overleveraged houses and unsustainable credit card debt. That is a recipe for financial disaster.

With all that credit card debt, individuals and families end up victims of horrible, terrible, no-good credit. That means that, more than ever, credit repair is needed by many people. SkyBlue Credit Repair is particularly skilled at helping consumers decide what to dispute and when to do it. It has a very accelerated dispute process because it takes 15 items at once (5 from each of the 3 credit bureaus) and disputes them all at the same time. For those clients with numerous negative items, Sky Blue could be the answer to faster score improvements.

Sky Blue even goes as far as to offer a 90-day, risk-free guarantee, meaning that if you are not satisfied for any reason during that time period, just tell them why and you can get your money back. Their pricing is reasonable: $59 to set up and $59 a month after that.

For more information and reviews about skybluecreditrepair.com, you can feel free to visit their website.

How to Become a CFA

calculator-820330_640If you wish to seek an edge in the world of finance, you can increasingly consider this credential: the Chartered Financial Analyst (CFA) qualification. This designation is consider a high standard in the investment management field and to those who do have the credentials are expected to have good knowledge of the investment industry.

It’s not an easy feat to obtain these qualifications – the self-study program takes a few years to complete and candidates should pass three exams, and abide a strict code of ethics and conduct.

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