What Should a Millennial Spend on Rent

Rents have been steadily increasing throughout the United States over the past decade.  Ever since the financial crisis, people have somewhat shied away from home ownership and opted to rent.  With the demand for rentals on the rise, a sharp increase in monthly rents has been a clear side effect.  The old rule of thumb used to be 30% of one’s income should be spent on rent; however, we are now seeing a burden like never before.  What should a millennial spend on rent?  The simple answer is as little as possible.Image result for what should a millennial spend on rent

Millennial’s are those born from the late 1980’s to the early 2000’s depending on who you ask.  These individuals tend to have a high burden of student loan debt, which makes it all the more concerning that they are spending high amounts on their monthly rent.  A recent report came out showing that millennial’s will spend close to six figures, yes, $100,000 on rent before they turn 30.  That is a staggering amount considering that most are also in the process of trying to pay off student loan debt.

3 WAYS TO NOT SPEND 6 FIGURES ON RENT BEFORE 30

  1. Get a roommate.  Sharing a two bedroom with a friend is a simple and easy way to save money every month.  Sure two bedrooms cost more than a one bedroom, but when you split it two ways, it comes out to about a 30% savings versus living on your own.  This isn’t a long term solution, but it is a good way to free up additional income every month.
  2. Move in with a significant other.  While some will shy away from this advice, there are many benefits to doing so.  I knew a couple who had to live apart until the day they were married for various reasons.  They chose to do this in order to respect the wishes of others.  However, they were basically spending an extra $1000 a month on an additional apartment that got little to no use, all to please a few.  They could have used that money to build up an emergency fund or increase their down payment on a future house.
  3. Buy a house.  While buying a house requires more responsibility and obligations than renting, it is also a good choice to lower your monthly expenses and build equity.  For example, a $200,000 loan on a property with 20% down will give someone a monthly payment of approximately $1250 a month.  Depending on the area of the country you live in, it will almost certainly be cheaper than paying someone else to rent.

CONCLUSION

While some see a benefit to renting, there are also many drawbacks financially.  Although we can’t exactly put into numbers what should a millennial spend on rent, there are ways to reduce your monthly expenses.  Whether you are able to implement one of the solutions above into your situation or not, living costs will be your largest expense every month.

Budget Smart, Invest Wise

 

Why You Should Not Cosign a Loan

Mike was a recent college grad.  He found himself a good job, but was having issues with the vehicle he had driven since he was 16.  It was time for Mike to get a new car.  He went ahead and found a car he liked at a local dealership, but when he went through financing he got stuck with a 12% rate!  Why so high?  Mike didn’t have any credit.  He had to get his mother to cosign a car loan with him in order to bring down the interest rate.

The new interest rate Mike was able to get for his loan was now 3%.  This would lead to thousands of dollars in savings over the life of the loan,  all because his mother, who had a credit history, signed it with him.  Did Mike’s mom do the right thing?  Probably yes, she trusts her son and knows he just got a good job, but many people cosign a loan not thinking about any of the consequences.  Below are 3 reason why you should not cosign a loan.

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WHY YOU SHOULD NOT COSIGN A LOAN REASON #1

You are responsible for the loan if the person you cosign with cannot make payments.  In Mike’s situation above, his mother knew that signing a loan with her son would save him thousands of dollars, but if Mike suddenly lost his job or forgot to make payments, then his mom becomes the responsible party.  Never cosign a loan with someone you don’t think can make the payments.

WHY YOU SHOULD NOT COSIGN A LOAN REASON #2

Your credit score can be affected, both positively and negatively.  An institution loaning you the money can offer a lower interest rate with a cosigner because they have mitigated the risk of default for the loan.  If you cosign a loan and the loan is repaid in full, you can see your credit score rise, but if the loan goes into default, it can hurt your score and lower your chances of getting future financing.

WHY YOU SHOULD NOT COSIGN A LOAN REASON #3

Once you add your name to a loan you cannot take it off.  If you and a friend cosign for a loan together, then you better hope that friendship doesn’t go south anytime during the loan.  Relationships sometimes fizzle and don’t work out.  It is best to make sure that emotions don’t get the best of you when cosigning for a loan.

FINAL THOUGHTS

Cosigning a loan can be a good way for someone to build credit.  It is also important to remember that you are taking a risk on building someone else’s credit for the sake of your own credit.  Sometimes people can make financial decisions based on emotions, cosigning a loan is a perfect example of a financial decision that should not be made on an emotional level.

Budget Smart, Invest Wise

What is the net worth of Giancarlo Stanton?

Who does the richest contract in all of professional sports belong to?  The answer is none other than New York Yankees player Giancarlo Stanton.  The 28 year old is spending his first full season with the Yankees organization after being traded from the Miami Marlins this offseason.  Before leaving Miami, Giancarlo signed the largest sports contract valued at $325 million over 13 years.  What is the net worth of Giancarlo Stanton?  Giancarlo Stanton’s net worth currently sits at $15 million.

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NY Yankee Giancarlo Stanton

Drafted in the second round of the 2007 MLB draft, Stanton spent the first few years of his professional career in the Marlins minor league organization.  Giancarlo was eventually called up during the 2010 season and had been on the Marlins roster ever since.  That is until the New York Yankees came calling.

In December 2017, the Yankees sent three of their players to Miami in exchange for Giancarlo and $30 million cash.  The $30 million was to help pay for his salary.  Stanton is scheduled to make $25 million this season, tops on the Yankees roster; however, that salary is a mere 13th in overall value for the 2018 season when compared to the rest of Major League Baseball.

So what is the net worth of Giancarlo Stanton?  As stated earlier, it currently sits at $15 million; however, it has the chance to increase dramatically over the next few years.  Giancarlo is scheduled to make $25 million this season and $26 million for both the 2019 and 2020 seasons.  These three years total up to $77 million in earnings.  By the end of the 2020 season, Giancarlo Stanton’s net worth could reach in excess of $40 million.

After the 2020 season, Stanton will have eight years remaining on his current contract with the first seven years being a player option.  If he is able to complete the full 13 years of his contract, Giancarlo Stanton’s net worth could climb to as high as $150 million.  At that point he would easily be one of the top earners among professional athletes.  Since Major League Baseball contracts tend to be fully guaranteed, there is a high probability that his net worth will touch the nine figure mark.

Based on the amount of salary Giancarlo is demanding throughout his contract, it is obvious the Yankees are hoping he produces at a high level.  In his first game at Yankee Stadium in uniform this season he was booed by the local fans.  He followed this up the following day with a home run and quickly earned his spot among the New York faithful.

Stanton has the physical prowess needed to be a professional athlete.  At 6’6” in height and 245 pounds, he was a three sport athlete in high school out in California.  Although he accepted a baseball scholarship at Tulane, he opted to instead enter into his professional baseball career and the $475,000 signing bonus that came along with it.

 

 

Ibotta App Review

I was recently on vacation in Denver, Colorado, when a friend of mine who lives out there told me about this cashback app called Ibotta.  He was head over heels for the app which happened to be created out in Denver.  I downloaded the app and immediately saw how one could benefit.  In the following Ibotta app review, I will go over just how simple it is to start getting cash back on purchases you already make.

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Ibotta App Review

IBOTTA HAS MANY TOP STORES

Most Americans find themselves shopping at the big box stores for everyday items.  Stores such as Target, Walmart, Best Buy and others are some of the top stores in the Ibotta app.  Many of these stores offer cash back for just simply taking a picture of your receipt.  They also have coupons for many items you purchase including Gatorade, salsa and even beer!

THE APP IS EASY TO NAVIGATE AND USE

Ibotta App Review
Ibotta Screen

Unlike some apps that take a while to figure out, Ibotta is pretty straightforward.  From the home page you can select your favorite stores, choose any coupons you might be interested in using, and start earning cash back.  The picture to the left illustrates what one will see if they click on Target as a store of their choice.  You are presented with a list of coupons available.  Towards the top, you are able to segment the products based on the category you want to search for.  In this example, if you wanted to get $1.00 back on Gatorade G2, simply click on the red plus sign and it is added to you offer list.  It’s that simple!

RETRIEVING YOUR CASH BACK IS EASY

The whole point of a cash back app is to actually get cash back.  In this Ibotta app review I am here to tell you that is exactly what you get.  Withdrawing your cash is a super simple process.  The only requirement is that you have at least $20 in your account to withdraw.  You can withdraw the cash via PayPal, Venmo, or for one of the many gift cards they offer.  Never have I had such a hassle free experience withdrawing earnings from an app.

HOW TO GET STARTED WITH IBOTTA

  1. Download the app using the following link (Receive a welcome bonus of $10): https://ibotta.com/r/ycvfdfl
  2. Search through the list of selected stores you shop at and even ones you don’t.
  3. Find coupons you can use and add them to your “My Offers” section.
  4. Once you shop at a store, you can use your camera to make sure the item qualifies for the cash back by simply scanning the barcode.
  5. Take a picture of your receipt and confirm you purchases.
  6. Watch the cash add up.  There is no limit to how much you can have.

Budget Smart, Invest Wise

Quarterback Alex Smith’s Net Worth

Have you ever wondered what it’s like to have tens of millions of dollars to your name?  The fact is, most of us will spend our life dreaming of such a financial future but never achieve it; however, others, like Alex Smith, know all to well what the feeling is like.  Alex Smith is the new quarterback for the Washington Redskins.  The former number one overall pick has had an up and down career, but he has recently emerged as a solid starting quarterback in the NFL.  A 13 year league veteran, Smith is entering his 14th season with his third different NFL team.  Quarterback Alex Smith’s net worth sits at $45 million.

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NFL Quarterback Alex Smith

Alex Smith has had a windy road to his NFL success.  Originally a number one overall pick in the 2005 NFL draft by the San Francisco 49ers, Smith has overcome many struggles and injuries that he experienced early in his professional career.  A star at Utah, Smith was a two year starter for the Utes and posted a 21-1 record as a starter.  After being drafted by the 49ers in 2005, Smith signed his first NFL contract valued at nearly $50 million for six years.  Alex Smith was never able to bring the team to prominence, and in 2012 was replaced as a starter in favor of Colin Kaepernick.  The team traded Smith after the season to the Kansas City Chiefs.  Smith proved himself worthy of being an NFL starter at Kansas City, where he was named to the Pro Bowl three times.

Alex had to pack his bags yet again earlier this year as he was traded off to the Washington Redskins who had just lost their quarterback.  However, with his new team came a new contract.  Alex Smith recently just signed a four year deal valued at $94 million.  The contract included a $27 million signing bonus along with a total of $55 million guaranteed over the first two years.  Even if Alex is only able to play two years with the Redskins, we can expect quarterback Alex Smith’s net worth to increase to over $60 million.

Alex Smith’s career NFL earnings have already topped over $100 million.  If he is able to complete the contract he just signed with the Redskins, his career earnings will more than double.  Over his past five seasons in Kansas City, Smith has proven to be a reliable starter.  During that stretch, he has thrown a total of 102 touchdowns to just 33 interceptions, one of the best in the league over that span.

On a personal note, Alex is married with two children.  In 2007 he started The Alex Smith Foundation which aims to provide foster teens opportunities to transition into adulthood.

 

15 Year Mortgage Pros

A little over five years ago I made a financial mistake that I’m not proud of.  I purchased my first home.  No the purchasing of the home isn’t the financial mistake, the mistake was going with a 30 year mortgage instead of a 15 year one.  Many times throughout the year I often wonder why I didn’t even consider a 15 year mortgage.  Don’t make the same mistake.  If you have the financial ability to do a 15 year mortgage then by all means go for it.  I will discuss a few of the 15 year mortgage pros and why I wish I could go back in time and do it all over again.

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15 Year Mortgage Pros #1

The easiest difference to distinguish between a 15 year and a 30 year mortgage is the interest rate.  15 year mortgages have a significantly lower rate than their counterparts.  The shorter the amount of months a company has to lend you money, the more likely they are to recoop their costs.  A 15 year mortgage tends to have an interest rate of 0.5% to 0.75% lower than that of a 30 year.  Although that might not seem like a significant number, it will ultimately equal many thousands of dollars in savings over the life of the loan.

15 Year Mortgage Pros #2

Simply put, you build equity faster.  Because you are having to pay the full amount of the loan in half the time, your monthly payment will be more; however, that also means you will become the full owner of your home in a shorter period of time.  Many people, myself included, choose a 30 year mortgage because the payments are less on a monthly basis.  Had I chosen a 15 year mortgage, my payment wouldn’t have been much more a month and I’d own the home outright in half the time.

15 Year Mortgage Pros #3

The final pro is that you have the opportunity to eliminate your largest monthly expense.  This is especially important as one approaches retirement.  People sometimes talk themselves out of a shorter mortgage because the higher monthly payments mean they have to forgo savings for other things such as retirement.  Can you imagine owning a house free and clear in retirement and not having the stress or monthly expense of a mortgage payment?  Plus you can also free up more capital if you decide one day to do a reverse mortgage.

Conclusion

The majority of housing loans issued are in the form of 30 year mortgages.  This has been the case for a while.  I messed up when I bought my first home, but I can assure you I won’t make the same mistake for my next.  A 15 year mortgage is ideal for individuals or couples who have stable jobs, and are good at budgeting their monthly expenses.  The opportunity to save money on paid interest and build equity fast will be too much for me to pass up again.  That is why the 15 year mortgage pros strongly outweigh any cons.

Budget Smart, Invest Wise

Kirk Cousins Net Worth

We are currently in the middle of the NFL offseason.  It’s been just over a month since the Super Bowl, where the Philadelphia Eagles knocked of the New England Patriots.  The offseason in the NFL is when deals are made and players get paid.  Right now a player everyone has their eyes on is Kirk Cousins.  Cousins is a six year veteran in the NFL with all six of those seasons being spent with the Washington Redskins.  The Redskins drafted Kirk 102 overall in the 2012 NFL draft.  He played out his initial four year contract and has since accepted and played out two additional single year contracts.  Last year Cousins made close to $24 million leading the team.  The salaries from his previous two seasons have given rise to Kirk Cousins net worth which currently sits at $18 million.

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NFL QB Kirk Cousins

Cousins, 29, was a three year starter in college for the Michigan State Spartans.  He wasn’t a highly touted recruit coming out of high school or college and slipped into the fourth round of the 2012 NFL draft.  When Cousins was drafted by the Redskins, he signed an initial deal valued at $2.5 million for four years.  This is a typical offer for someone who gets drafted in the fourth round where he did.  However, impressive play led the Redskins to do something that isn’t very common in the NFL.  Instead of working on a multi-year contract extension with their QB, Washington decided to give him not one, but two one-year extensions.  These extensions meant that if Cousins wanted a big payday he would have to play well.  It also meant that the Redskins weren’t committed to a quarterback if he didn’t perform at a high level.

Kirk Cousins has been the starting quarterback for the Redskins for the past three seasons.  His numbers over that time have been quite impressive.  In each of those three seasons he has thrown for at least 4,000 yards, 25 touchdowns and has maintained a passer rating of at least 93.  His consistent play has made him attractive to many teams this offseason.  The Redskins have missed their chance to sign the QB to a long term deal, thus he is now looking on the free agency market.  With very big recent contracts being negotiated for quarterbacks, Cousins could possibly be looking at a four or five year deal that would pay him approximately $25-$29 million in average annual salary.

In the very near future, Kirk Cousins net worth will see a major boost.  His new contract will likely come with a large signing bonus that will sharply increase his net worth.  We can conservatively expect Kirk Cousins net worth to increase to at least $50 million over the next few years.  Even with this new found wealth, some might wonder if he will ever upgrade his van that he purchased years ago from his grandmother.  With his frugal mentality and top-notch ability to lead an NFL team, a big payday and a big net worth are in Kirk Cousins immediate future.

Budget Smart, Invest Wise

Jordan Peele’s Net Worth

Jordan Peele is a 39 year old actor and comedian who has been around Hollywood for a number of years.  He is most widely known for his show on Comedy Central called Key and Peele, where he co-stars with Keegan-Michael Key.  Born and raised in New York City, Jordan dropped out of college to pursue his comedy career.  A move that has paid countless dividends and given Peele his current net worth.  Jordan Peele’s net worth sits at $14 million.

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Jordan Peele

Peele has been cast into the spotlight recently for his directing work in the recent hit, Get Out.  It was the first film he directed by himself and has received four nominations for the 90th Academy Awards.  The four nominations include, Best Picture, Best Director, Best Original Screenplay and also Best Actor for the film’s lead, Daniel Kaluuya.  Many believe that the success of this film will add greatly to Jordan Peele’s net worth.

Jordan Peele has spent his acting career appearing in several movies including Little Fockers and Wanderlust just to name a few.  The main source of his net worth comes from the work he does on various shows.  He has done many voice overs for characters of TV shows including Robot Chicken, Bob’s Burgers, and American Dad!  He is mostly recognized for the show he helped create, Key & Peele.  On the show, he and his co-star Keegan-Michael Key do various sketches that poke fun of modern day society.  They are seen here below doing a skit aimed to make fun of NFL players who often announce their colleges before a nationally televised game.

At 39 years of age, Jordan Peele is fairly young in terms of his acting career.  He has many promising years ahead of him not only on the TV screen, but also in the director’s chair.  While Jordan Peele’s net worth currently sits at $14 million, it could get a massive boost in the coming years if he decides to take on directing full time.  We have seen first hand the talent he has when it comes to creating shows, but the whole world now can see his ability to create a box office hit.

Often times celebrities are cast into the spotlight whether they like it or not, but Jordan manages to keep a relatively low profile.  He is married to his wife Chelsea and the two have one son together.  The couple secretly eloped back in 2016 away from the cameras.

 

Ways to Save

When it comes to our personal finances, it’s safe to say we’ve all done our fair share of worrying. With bills to pay and mouths to feed, it can seem like saving any of your money is a pipe dream. An impossibility. And, yet, we must. We have the unenviable task of doing the impossible. Or, at least, that’s how it seems. In truth, savings money can be easier than you think. With a healthy does of will power and the right know how, you can secure your financial future. Here are some tips to get you started.

First and Foremost, let’s talk where and when to spend your hard earned money. For starters, consider eliminated or reducing luxury spending. For example, you don’t really need that new video game, so it can wait until it’s one sale, or until you’re in a better financial position. Meanwhile, we all need things like Winter coats and shoes, so these are items worth spending money on. In fact, it might even be worth spending a little extra on these items to ensure quality. After all, you don’t want to end up spending even more from having to replace these items frequently. However, even in this situation, there’s room to save. Here’s a Mackage coupon to help you find a good quality coat and save. Which brings me to my next point…

Coupons and sales are another great way to save. Retailers employ these cost cutting measures frequently in order to entice customers new and old and generally drum up some extra business. That’s why an eagle eyed shopper stands to be able to take home most, if not all, of their shopping at a heavily reduced price. You may have to do your shopping piecemeal in order to maximize savings, but it’s well worth it to save that much money. You’ll also have to remain diligent in order to find thee special offers, so keep your eyes peeled like a jaguar ready to pounce on its unsuspecting prey.

Mistakes to Avoid When Investing

If you’re new to investing, there’s probably quite a bit you still don’t know. While experience is the best teacher, you may be able to avoid some common mistakes by following the advise of professional advisors. Looking at some of the worst mistakes new investors can make may help you avoid these common pitfalls.

Disregarding Inflation

In whatever medium you choose to invest, it’s important to account for the inevitable cost of inflation. Your gains over several years should reflect a profit, even after considering the rise in the cost of living, since you invested the initial funds. For instance, you may invest $100,000 in bonds with a 30 year term limit, yielding a net interest of 4%, which you reinvest in more bonds at the same rate. If inflation also rises by 4%, the $311,865 you have made isn’t any better than what you might have normally saved and that money was tied up in the bonds for those thirty years.

Depending on Margins

Another big mistake new investors make is to essentially use margins as free money to finance their investments. If the investments don’t pan out, the investor is left with the debt of the margin with nothing to show for it. This isn’t much different than financing your investment with a credit card or with car title loans in Orlando. Unless you’re confident in your financial savvy, it’s better to avoid margin investments as much as possible.

Basing Investments on Rumor

Many new investors will throw their funds in on a new business or an established business with a new product just because they have heard people raving about the product. Even in cases where the product sells as well or better than expected, that doesn’t necessarily mean the stock price will see similar gains. Similarly, investment professionals recommending specific stocks on television or the internet is most often just one person’s opinion and you should have more factual information, before risking your funds on that stock. Every investor should do his or her own research.

Diversifying with the Same Risks

Everyone has heard of the importance of diversifying, but this is more than merely putting your eggs in different baskets. If all of your investments share the same levels of risk, you’re defeating the purpose of diversifying. Instead, look for investments with better risk profiles. This may mean investing in precious metals, as well as stocks, or buying bonds to add to your portfolio.

Invest, Don’t Gamble

Investing should be viewed as a long-term commitment and one for which you develop a sound plan to maximize your earnings over several years. If you’re trying to buy individual stocks on the premise that you expect a big return on one or two, you might be better off taking your money to the casino. Investing isn’t the same as gambling and even past stock performances can’t indicate a sudden increase that will lead to a personal windfall. Instead, research your investments and consider consulting a professional advisor to help you develop a promising investment strategy.

Investing can help you save for the future and ensure financial security, but only when approached with a good strategy and the patience required for a long-term plan. By taking the time to learn about your investments ahead of time, you can avoid making mistakes that could cost you your funds. If you’re uncertain or confused about investing principles, you may want to enroll in an investing course or consult a professional advisor, before putting your savings at risk unnecessarily.