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In the past couple of years I’ve written about quite a few investing startups that offer easy ways to invest that take the human component out of the equation.
They’re typically simple enough for anyone to understand, low cost and try to capture market returns via low cost ETF index funds. Many people call them robo-advisors.
As I was researching some of the best robo-advisors I came across one that had previously only been available in Canada, Wealthsimple. As of earlier this year they have now crossed the border, and are now available to U.S. users (You can also get up to a $10,000 managed for free as a reader of Bible Money Matters).
Wealthsimple is a hot company, and there is a lot to like about this newer online investment manager.
Today I thought I would take a close look at this automated investment advisor in this Wealthsimple review. How does Wealthsimple work? How do they invest your money? What are the pros/cons of their service?
Wealthsimple Background
Wealthsimple was founded in September of 2014 in Toronto, Ontario Canada. Shortly thereafter it acquired ShareOwner Investments, the country’s first robo-advisor.
Wealthsimple Financial Inc. is an online investment management service focused on making “investing easier for millennials.” The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of August 2019, the firm had over C$5,000,000,000 in assets under management.
Wealthsimple has over $5 billion Canadian dollars in assets under management ($3.75 million U.S.) and over 175,000 clients as of August 2019. They’re growing at a decent rate, and with the jump to the U.S. market in January 2017, that can only accelerate.
The company has garnered several awards in it’s first few years including:
Fintech 100 – Top 100 Global Financial Technology Companies
2017 Webby Winner – Best Financial Services/Banking Website.
2016 Webby Winner – Best Financial Services/Banking Website.
2016 – Fintech Five – Hottest and most promising financial technology companies.
2015 Product Hunt Toronto – Product of the Year Award.
How Does Wealthsimple Work?
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Wealthsimple was founded on the idea of simplifying and automating investing in order to give newer and experienced investors alike a diversified long term portfolio, without any hassle.
How do they do that? They create diversified stock and bond portfolios that are typically made up of ETF index funds. The funds are low cost and diversify your holdings across different sectors of the global economy to increase your gains, and lower your risk.
When you sign up you’ll be given a personalized portfolio, based on your answers to a survey at the beginning of the process. It will be tailored to your personal level of acceptable risk, be automatically re-balanced (so that your investments stay in line with your goals) and dividends will automatically be reinvested.
In short, it’s a simplified, low cost and automatic investment portfolio that can help you to reach your long term goals.
Opening A Wealthsimple Account (Get Up To $10,000 Managed Free!)
Opening an investing account with Wealthsimple is easy, and users in the USA, Canada and UK are eligible.
To get started, and to get your sign-up bonus, just go through this process:
Go to Wealthsimple.com via this link. (Our link gives you up to a $10,000 managed for free as a bonus.)
Start the online application: From the landing page click “Claim your bonus” and follow the prompts.
Enter basic details: Enter some basic personal information, answer a few questions about your previous investment experience and e-sign one or more Investment Management Agreements.
Bank verification:Verify your banking information via one of the approved methods.
DONE!
No need to worry about providing your banking details as Wealthsimple is fully secure, using 128 bit encryption. They’re also SIPC insured up to $500,000.
After you verify your banking information, your Wealthsimple account should be up and running within 5 business days, according to their FAQ.
Wealthsimple Basic Vs. Wealthsimple Black
When you’re opening your account and making your initial deposits, one thing you may want to consider is just how much your initial deposit is. With a deposit of less than $100,000 you’ll be signed up for a Wealthsimple Basic account, which gives you everything you need to invest in a diversified portfolio, at an annual fee of 0.5%. Signing up for the Basic account will give you a $50 bonus through our link.
If you deposit more than $100,000 in your account you’ll be upgraded to a Wealthsimple Black account, which means you’ll have a lower annual fee of 0.4%, along with the following benefits:
Financial planning with a Wealthsimple advisor
Access to tax-efficiency benefits like tax-loss harvesting and tax efficient funds.
VIP Priority Pass access for you and a guest to more than 1,000 airline lounges in over 400 cities.
If you already have a large amount to transfer in, the added benefits of Wealthsimple Black are nice to have, and in many cases puts Wealthsimple ahead of the competition. In addition to the $50 bonus for opening a new Wealthsimple account, you’ll get an additional $50 bonus if you deposit over $100,000 and open a Wealthsimple Black account.
Wealthsimple Investment Portfolios
The Wealthsimple portfolios mainly invest in diversified ETF index funds and are based on Nobel Prize winning ideas behind Modern Portfolio Theory. Here’s how they explain it:
Our approach is based on Modern Portfolio Theory, introduced by the Nobel Prize-winning economist Harry Markowitz, who proved you can minimize volatility (risk) and maximize reward (money!) by diversifying your investments. We invest your money across thousands of companies using Exchange Traded Funds (ETFs) that track different sectors of the global economy. This way, you bet on bigger slices of the economy while taking advantage of market diversification, without being impacted by the growth or loss of one company. In a few easy steps, we’ll determine the right mix of investments you should have based on your personal goals. We also designed a socially-responsible portfolio that prioritizes low carbon emissions, advances cleantech innovation, and promotes sustainable growth in emerging markets.
So their portfolios are based on a proven investment strategy, and are designed to maximize reward while minimizing risk. It’s a strategy similar to the ones used by other robo-advisors, although the details are a bit different.
Available Portfolios
When signing up there are 3 main portfolios that you can choose from:
Conservative: 65% Stocks, 35% Bonds
Balanced: 50% Stocks, 50% Bonds
Growth: 80% Stocks, 20% Bonds
As of 2017, the following low cost investments are in the portfolios:
Vanguard US Total Stock Market ETF (VTI)
Vanguard Mid-Cap Value ETF (VOE)
Vanguard Small-Cap Value ETF (VBR)
Vanguard FTSE Europe ETF (VGK)
WisdomTree Japan Hedged Equity Fund (DXJ)
Vanguard FTSE Emerging Markets ETF (VWO)
iShares National Muni Bond ETF (MUB)
iShares TIPS Bond (TIP)
Vanguard Total Bond Market ETF (BND)
VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL)
Socially Responsible Investing
Wealthsimple recently released socially responsible investing options for investors who want to invest with their values. Those investments include:
iShares MSCI ACWI Low Carbon Target (CRBN)
PowerShares Cleantech Portfolio (PZD)
iShares MSCI KLD 400 Social ETF (DSI)
SPDR® SSGA Gender Diversity Index ETF (SHE)
PowerShares Build America Bond Portfolio (BAB)
iShares GNMA Bond ETF (GNMA)
Socially responsible investing options will carry a slightly higher fund cost associated with managing the funds to keep the investments “socially responsible”. Keep that in mind when choosing this option.
Investments in all of the portfolios can change over time, so check for current investment mix when you sign up.
Wealthsimple Roundup
Wealthsimple added a new feature in October of 2018 called Wealthsimple Roundup that helps you to save and invest in small increments, based on your daily spending in a linked account.
Spend $4.50 at Starbucks? The amount will get rounded up to the nearest dollar, $5 in this case, and once a week your combined roundups will be invested.
How can you take advantage? From their FAQ:
If you’re already a Wealthsimple client, open your mobile app and click on “Add funds.” There will be an option to turn on Roundup. Then just select the credit and debit cards you want to connect, and the Wealthsimple account you want your roundups to go to. Bingo, you’re done. Every time you spend money with one of your linked debit or credit cards, the amount gets rounded up to the nearest dollar, and once a week that money gets invested.
Investing 50 cents at a pop may not seem like much, but when the roundups are added together it can be a surprisingly significant amount of money.
In the past when I’ve used a roundup feature it can lead to saving $100-200 in a single month if I’ve spent enough. Definitely a cool feature and one to take advantage of.
Wealthsimple Mobile Apps
Wealthsimple has beautiful mobile apps for both iOS and Android. The apps were redesigned from the ground up at the end of 2016, and are now even more beautiful and functional.
Some of the functions you can perform in the app:
View your portfolio.
Track account activity.
Setup auto deposits, or make one time deposits.
Access educational content.
Update your profile information.
Wealthsimple Service Fees And Minimums
So how much will you be paying to use Wealthsimple? What are the fees and minimums for using the service?
Wealthsimple currently has no minimums on an account, and there are no trading, account transferring or rebalancing fees either. You can start investing when you deposit $500.
Low Annual Management Fees
The account management fees with Wealthsimple are pretty easy to break down.
While the fees for the service aren’t the lowest in the industry, they are often much lower than going with a traditional human advisor or a large mutual fund company. They are very much in line with much of the industry on pricing, especially if you’re investing more than $100,000 where they include meetings with advisors, lower fees and other perks.
Simplified & Automated Investing
Wealthsimple was launched in the U.S. market in January 2017, and has quickly become one of the premier options for people looking to have a simple, effective and automated investment portfolio. (If you’re a Canadian, check out this Wealthsimple review that was written specifically for a Canadian audience.)
Their portfolios are created and based on the ideas of Modern Portfolio Theory, and those proven strategies are the sound basis for a good long term investing portfolio for anyone.
Their fees are lower than you’d likely see when using a traditonal financial advisor, and are in the range of what other providers charge (although some are lower). The fact that they’re offering a $100 sign-up bonus through our link should give you plenty of time to test the service out, before deciding if you want to use them for the long term.
I think their service is top notch, and I’d recommend giving them a try.
Sign Up For Wealthsimple, Get Up To A $10,000 Managed Free!
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When you are trying to tighten down the hatches on your spending, you are doing everything possible to stick to your budget.
You are determined to stick to your budget this time around. But, you always hear that budgeting can be hard.
Well, here are some quick budgeting tips that will make sure to stick to your budget.
As most new budgeters learn, they struggle to stick to a budget for their monthly expenses. It is a natural process everyone goes through.
Budget, if you are looking for an easy button, then learn which payment type is best if you are trying to stick to a budget.
Especially if you spend a lot of time on social media, studies have shown you are more likely to overspend. So, you must learn which payment type will have you stick to a budget.
Then, you may be wondering and wanting help deciding which payment type is best for you.
The Optimal Solution Payment Type Solution
The most efficient payment type is something that is instantaneous and there are no fees associated with the transaction.
Cash is the most efficient payment type: Cash payments are usually the most efficient and convenient way to pay for goods or services.
Credit cards can be a less favorable option: Credit cards tend to have high-interest rates and can lead to financial disaster if used irresponsibly.
Debit cards are a great way to keep your spending within your budget: Debit cards should be considered a top priority for budgeting because they keep you within your spending limits.
Developing a budget will help you avoid financial disaster: A budget helps you stay organized and make informed decisions about which payment method works best for you.
Today, there are so many options on which payment type to use in today’s online world.
1. Cash
Cash is a payment type that can be used to reduce debt spending. It is versatile and can be used for a variety of expenses, such as groceries, medical bills, and gym memberships.
Cash is an excellent choice for people just starting to budget and save.
It is more restrained than credit or debit cards. The envelope method of cash budgeting can be used to train your brain to reduce spending. Cash is the most traditional payment method and has the fewest drawbacks. However, you need a safe place to store your cash, and some stores may not accept it.
Benefits of Cash:
Cash is an excellent payment type when your financial goals are to reduce debt spending.
Cash is a finite payment method that prevents you from overspending.
You have a set amount of money to spend each month, so there’s no chance of overspending.
Easy to track with the envelope method: Utilizing the envelope method ensures that you are tracking your spending (i.e groceries, gas, medical bills) and making sure that you aren’t overspending.
Cash is a quick and easy way to pay for goods and services.
No Fees. No maintenance fees or interest rates as credit cards. Cash is just plain cash – printed paper of currency.
You can avoid high fees associated with card transactions: There are no associated fees when paying with cash, making it the cheapest option overall.
Cash discounts may be available. Since you are paying with cash many small businesses offer a cash discount of 2-5%.
You can use cash at any store: No need to carry around extra cards or checks.
It’s easy to get cash: You can easily get cash and make extra cash.
There’s no need for bank account details: No need for bank account details means you’re free from identity theft risks and other inconveniences that come with having a bank account.
Cash allows you to skirt some financial regulations: Because cash payments don’t fall under the purview of many financial regulations, businesses can take advantage of loopholes in the law that allow them to charge higher interest rates on loans or engage in shady business practices. (highly recommended to stay above book)
Cons of Cash:
Possibility of losing or stolen cash: Keep your cash in a safe place!
You need a safe place to store your money: Another disadvantage of using cash is that you may need a safe place in which to keep it – some stores don’t accept it as a payment method.
Why Choose Cash?
Total control over your money, so there’s little chance of unexpectedly running out of funds.
Cash is a great way to stay on budget, as you can easily track your spending and see where you need to cut back.
Unpleasant to spend money with cash, which can help train your brain to reduce spending.
Cash is a quick and easy way to pay: Using cash eliminates the need for banks, credit cards, or other forms of payment.
Verdict: Paying with cash is the best method for budgeting and saving.
Overall, cash is a great payment type when it comes to budgeting. You can immediately see how much money you’ve spent and what needs to be cut back.
You can’t make impulsive buying decisions with debit cards or credit cards.
With a finite amount you can spend, cash is an excellent choice to prevent overspending. According to research, paying with cash can feel unpleasant, which can train your brain to reduce spending as much as possible.
2. Credit cards
Credit cards offer a number of benefits, including convenience, cash back, and the ability to make large purchases or pay bills in case of emergency. However, credit cards also come with credit card debt and can lead to overspending and financial problems if not used carefully.
For many, credit cards are the easiest way to blow your budget because you don’t have control over how much money you spend.
It is possible to overspend with credit cards if you are not mindful of what you charge.
On the flip side, this is a preferred method as many credit cards also offer rewards programs that give you cash back or points for purchases. If you make the conscious decision to use credit cards, you must make payments on time to avoid penalties.
Benefits of Credit Cards
Credit cards are convenient: Convenient to use and don’t have to worry about losing cash.
Use a credit card if you are disciplined and have strict spending habits: If you are disciplined and have strict spending habits, then using a credit card can work well for budgeting purposes.
Flexibility on larger purchases: Some benefits that come with having a credit card include more cash flow as well as being able to make larger purchases.
Credit cards provide support in times of crisis: Many credit cards offer extended services that can help like 24-hour fraud protection, lost wallet services, traveler’s insurance, and many other benefits – check each issuer for details.
$0 Liability on Unauthorized charges: Your credit card company will not be held responsible for any charges that were not authorized by you. This means that if you did not authorize a charge in person, online, or otherwise, you will not be responsible for it.
Fraud protection: Check your credit card issuer, but many offer fraud protection.
New card introductory APR is helpful to pay down debt: The introductory APR for the new card may not last long.
Payments on balance transfer should be manageable: Make sure that the payments on your balance transfer are manageable.
Points: You can accrue points along with your spending which can be a great perk.
Credit card interest rates are significantly lower than payday loans: Interest rates on credit cards are usually much lower than payday loans.
Due Date is After your statement closes. Since your bill cycle is at least another 21 days between the closing date for your statement and the due date, it gives you flexibility. Personally, I still account for the credit card bill in the same month that it was accrued.
Cons of Credit Cards
Potential for credit card debt: When using a credit card, be aware of your credit limit and the interest rate that you will have to pay on your debt. Also one of the categories of debt.
Credit limit often leads people to spend money: The credit limit often leads people to spend money by giving them a false sense of security, when they should stick to a budget and pay attention to their credit card statement and the billing cycle.
Credit card overspending can lead to debt: Consider the purchase if it is essential or delay it if possible.
Ability to easily purchase something you cannot afford. Buying something that you don’t have the money saved up for will cost you interest fees associated and maybe even with a credit card balance transfer.
There are a number of fees associated with a balance transfer: Transfer fee, interest on new purchases charged to the card.
Your introductory APR may not be valid if you make too many payments late: If you fall more than 60 days behind on payments your introductory APR might be canceled and you may face higher interest rates.
Credit score can suffer from debt: When you carry a credit card balance or don’t pay your monthly bills on time, you will lower your credit score.
Avoid carrying a balance: Pay your statement in full each month to avoid paying interest and maximize your grace period.
Key Takeaways on Credit Cards
Make sure to pay attention to the dates: Don’t spend more than you can afford, and make sure you’re making your minimum monthly payments on time so that your debt doesn’t increase over time.
A credit card can be used for budgeting only if you’re very disciplined: If you know that overspending is NOT an issue and you pay the credit card’s monthly balance in full, then using a credit card is fine.
Credit card transactions usually take several days to register in the feedback system: Something to look out for!
You can step back into debit cards or cash if needed: If credit cards are not for you, there are other options available such as debit cards or cash
3. Debit cards
Debit cards are a good option if you want to stick to a budget because the predetermined amount of funds can help you stay within your means. Additionally, debit cards are more convenient than cash and just as accepted as credit cards in most places.
A debit card works more similarly to cash than to credit cards.
They provide an easier way to track your spending and avoid having to carry a lot of cash.
Pros of Debit Cards:
No Need to Carry Cash: A debit card is better than cash because you don’t have to carry a lot of paper money and change around, and they’re also safer.
Debit cards are faster and easier to use: Debit cards work just like credit cards – withdrawing cash, making purchases, and paying bills – but they are linked directly to your bank account, so there is no need to carry around a separate cash envelope wallet or purse for them.
A debit card is a good option if you want to stick to a budget: Debit cards come with a predetermined amount of funds that you can spend from your bank account just like cash.
Tracking payments is easy with debit cards: Your debit payments will appear on your issuer’s dashboard, which you can monitor anytime from any location.
Convenience: Debit cards are more convenient to use and faster than needing to write a check or carry around cash. Plus they don’t add to your debt.
Shopping online is easy. You can use your debit card to make online purchases with your bank account, and digital banking tools make tracking your spending easy.
Points: Some debit cardholders can earn points for spending on their cards, which can be redeemable for rewards such as cash back or gift cards. This is new to compete with credit cards.
Fraud protection is typically offered for free with most debit cards—meaning if your card is stolen or used without your permission, you can get your money back.
No impact on your credit report. When you use a debit card, the funds are actually withdrawn from checking or savings accounts so there is no credit reporting occurring.
Cons of Debit Cards:
An overdraft on a debit card can happen when a purchase exceeds the amount of money in the checking account, leading to overdraft fees.
Funds on hold with fraudulent charges. If your account gets hacked, your losses will be limited since most banks protect their users against fraudulent charges and online purchases with their accounts. However, those funds will be held while they investigate and you may be liable for $50.
No chance to improve your credit score. Since you are not borrowing money, you are unable to improve your credit score.
Debit cards are a great way to keep your spending within your budget and avoid overspending which can lead to many detrimental issues.
Regardless of the overdraft fee, debit cards are still better than cash because they’re safer and easier to carry around.
4. Checks
Checks… do people still write checks? Why yes they do!
Checks offer a few benefits as a payment method, even though they are slowly being replaced by more modern options.
This can help you keep track of your spending and make sure you do not overspend. Additionally, if you ever need to dispute a charge, having a check can be helpful in proving what you paid for.
What is a check?
A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer from the check writer’s account. The date is usually written in month/day/year format. The signature of the check writer is usually on the line below “Pay to the order of.”
There are three main types of checks:
A cashier’s check is a check guaranteed by a bank, drawn on the bank’s own funds, and signed by a cashier.
A certified check is a personal check for which the bank has verified that there are sufficient funds to cover the payment.
A personal check is one that you write yourself and that is not guaranteed by the bank.
Pros of Checks
Checks are still a payment option: Checks are one of the traditional payment methods, but it is slowly dying out because of modernization.
Physical written record. It can be helpful to have physical copies of checks in addition to digital records through the bank.
You need to make both digital and physical copies of the check: Save check stubs but also transfer the information to a budgeting system.
Cons of Checks
Saving check stubs is helpful, but you still need to transfer the information to a budgeting system: Useful for tracking spending, but you’ll likely want more detailed records than just check stubs.
Not as convenient as credit or debit cards.
5. Apple Pay or Apple Cash
Apple Pay is easy to use and convenient since you only need to connect your smartphone to your cards and bank accounts via the app.
It is easy to use since you just hold your phone up to the reader and wait for the payment screen to appear.
You can even get cash back with apple pay.
Pros of Apple Pay:
Apple Pay is easy to use and convenient: You only need to connect your iPhone to your cards and bank accounts via the app.
You don’t need to carry any extra cards or cash: No need for additional cards or cash when you’re out and about
You can use Apple Pay on different devices: You can use Apple Pay on your iPhone, iPad, and Mac.
Transactions are secure: Your transactions are secured with Touch ID or a passcode.
Set up Spending Limits for each user. This way you can make sure you (or others with authorized access) are not spending more than you intended. Learn how.
Protection of Data during transactions. Your actual credit card number is changed to a different digital number, which allows limits your card number’s exposure.
Cons of Apple Pay:
Not widely accepted (yet). This method of payment is 100 percent guaranteed. While many stores offer apple pay, not all do quite yet.
The same rules apply if you load apple pay with a debit or credit card drawbacks include late fees, interest rates, and overspending: Keep that in mind when choosing Apple Pay as your payment method.
6. Mobile wallets like Google Pay, Samsung Pay, Venmo, or Zelle
Mobile wallets are digital payment systems that allow you to pay for items with your smartphone. Many people find mobile wallets are very convenient and becoming a traditional method of payment (such as credit cards).
With mobile wallets, you are making digital payments without having to carry around cash or cards using just your smartphone.
Mobile wallets are easy to use and provide instant payment convenience, making them perfect for shopping online.
Pros of Mobile Wallets:
Mobile wallets use credit cards and debit cards: Connect your smartphone to your bank accounts and use it for digital payments.
Mobile wallets are easy to use and convenient: Instant payment convenience makes them perfect for shopping online as well.
No need for cash or cards: No need for cash or cards.
Strong secuirity features provide privacy and security features that ensure your personal information is safe from data breaches and unwanted charges.
You can make purchases without having to show your identification: You can make purchases without having to show your identification.
Additional Layer of Security. Additionally, mobile wallet data is protected with verification, such as fingerprints.
Cons of Mobile Wallets:
With Zelle and Venmo, it is easy to send money to the wrong person or add an extra zero and send more money from planned. More often than not, it is difficult to recover your money.
You need to be disciplined when using a mobile wallet: Pay attention to late fees and interest rates, as well as the amount you spend in a month.
7. Prepaid Cards or Gift Cards
A prepaid card or a gift card could be right for you. The advantage of these is the mere fact that you reached the limit is enough to deter overspending.
It can make you think twice about whether you need to purchase an item or not.
Pros of Prepaid Cards and Gift Cards
Easy to use: Prepaid and gift cards are easy to use and manage your finances with.
The mere fact that you reached the limit is enough to deter overspending: It can make you think twice about whether you need to purchase an item or not.
No strings attached: No need to worry about any fees associated with the prepaid card once activated.
Privacy: The prepaid card does not track your spending or use any personally identifiable information.
Credit Score Doesn’t Matter: Your credit score does not matter when obtaining a prepaid card.
Cons of Prepaid Cards or Gift Cards
Losing a prepaid card is not a fun experience. Contact the prepaid card issuer right away to protect the funds on the prepaid card.
Fraud protection: Consider whether your prepaid card issuer offers any theft or fraud protection, as not all providers offer this feature.
Prepaid cards have limits on how much money you can load onto them, which can be frustrating if you need to make a large purchase.
8. PayPal
PayPal is a very convenient way to pay for items online or in person. It is widely accepted and used by many people.
PayPal is a digital payment service that offers convenience and ease of use. You can use them to send money to people or pay for online purchases.
However, because these services can only be used online, they should not be relied on as your sole method of budgeting and tracking expenses. Instead, consider Paypal in combination with another budgeting tool, like a spreadsheet or app, to get a fuller picture of your spending.
Pros of PayPal:
PayPal is one of the most popular online payment methods: Widely accepted and used by many people.
You can use them to send money to people or pay for online purchases: Help you review your spending prior to purchase.
Cons of Paypal:
EasyTarget for phishing scams. A phishing scam is when someone tries to trick you into giving them your personal information, like your password or credit card number. They might do this by sending you an email that looks like it’s from PayPal, but it’s not. Or they might create a fake website that looks like PayPal. If you enter your information on these sites, the scammers can then use your account to make purchases or send money to themselves.
Reputation for poor customer service. This is evident in their customer service ratings, which are some of the lowest in the industry. The majority of complaints against PayPal revolve around poor service received when asking for assistance with fund freezes and account holds.
9. Cryptocurrency (ie: Bitcoin)
Cryptocurrencies offer a new and innovative way of handling payments. They’re not yet widely accepted, so there’s potential for businesses to get in on the ground floor with this new technology.
However, because cryptocurrencies are so new, it’s uncertain if they will be regulated or not. This could pose a challenge for businesses down the road.
Pros of Crypto
Not subject to the same regulations as traditional currency, which makes them appealing to those who want to avoid government intervention.
The valuation of Crypto changes rapidly. If you are smart with crtyple this is a great way to spend your crypto coins.
Cons of Crypto
Cryptocurrencies are not accepted everywhere: Cryptocurrencies are not accepted by most organizations yet, which it makes it difficult to use them in day-to-day life.
It’s unclear if cryptocurrencies will be regulated: It’s uncertain if cryptocurrencies will be strictly regulated or not. This poses a challenge for those who want to use them as a payment method.
Bitcoin and other cryptocurrencies are still in their infancy: Bitcoin and other cryptocurrencies have only been around for a few years, so they may still face challenges in the future.
Here are the most popular budget apps today:
Other Payment Methods:
ACH payments
ACH Payments is an excellent way to pay bills and other financial obligations: You can easily set up a billing cycle for recurring payments, making it safe and convenient.
Fewer people are aware of your transactions when using ACH payments, reducing the chances of fraud or theft.
Key Facts:
Fewer people know about your transactions when using ACH payments, reducing the chances of fraud or theft.
Your checking account information is not shared or accessed by the system in any way.
You can quickly pay bills and other expenses with ACH payment: Financial institutions offer this as part of their deals.
When setting up recurring bills with ACH payment, you are aying your bills on time is important for maintaining a good credit score.
Pay attention to your check account balances: Make sure you have enough funds in your check account to avoid paying overdraft fees.
Money orders
A money order is a document that orders the payment of a specified amount of money. Money orders are convenient because they can be bought at many locations, including post offices, banks, and convenience stores.
To get a money order, you will need to fill out a form with the payee’s name, the amount of the payment, and your contact information. You will then need to purchase the money order with cash or a debit card.
To cash a money order, you will need to take it to a bank or post office. You will need to show identification and sign the back of the money order. The teller will then give you the cash for the payment.
More secure than cash: Money orders are more secure than cash because they don’t require a bank to make the transaction.
Less convenient: money orders are less convenient because you must purchase them in person.
Able to trace. They are also more secure than cash because they can be traced if lost or stolen.
Wire Transfers
Wire transfers are a more secure way to transfer money than traditional methods like checks and cash. These are sent through the banking system and are usually processed within two business days.
Typically, wire transfers are used when sending and receiving large sums of money (over $10000).
More secure than cash: Wire transfers are more secure than cash as the bank verifies there is enough money to make the wire transfer.
Fees involved with using a wire transfer. Most institutions charge for handling a wire transfer.
What method of payment is best?
Cash is the most widely accepted form of payment, but debit and credit cards are very popular.
The payment method that is best for you depends on which one helps you to stick to your budget and spend less money. The goal is to be financially stable.
What method is best for sticking to a budget?
There are several different types of budgeting methods that people use in order to manage their finances. Many people focus on using the 50/30/20 method, in which each percent corresponds to a different category of expenses.
There are plenty of budgeting tools available today to make sure you stick to your budget.
You need to find what works best for you. At the end of the month, you want to spend less than you make. That is the winning combo!
1. Budgeting App
There are many budgeting tools available online, which can be helpful as it can be easier to track your progress and budget over time.
You can use various popular budgeting apps like Quicken, Qube Money, or Simplifi.
These apps can help you track your spending, set goals, and stay on track with your budget.
2. Paper and Pen or Simple Spreadsheet
Some people find that they prefer using a simple spreadsheet or paper budget. This may be due to personal preference or because they find it easier to understand and use.
Additionally, using a paper budget may help you stay more organized as you can physically see where your money is going.
Options to get you started include our own budgeting spreadsheets or using an automated system like Tiller.
3. Envelope budgeting method
The cash envelope system is a good way to stick to a budget because it is rigid and based on envelopes and cash. You can’t get more money until your cash payday. So, this system helps you track your spending and budget better.
However, using only cash can have drawbacks as having large amounts of cash on hand can be risky.
The envelope method gives you a sense of control over your spending and makes it more tedious to write down your transactions. If you find writing down your transactions tedious, the envelope method may be too much for you.
4. Know Your Budget Categories and Track expenses
Tracking expenses is essential to move ahead financially: Knowing what you have spent in each category will help you make better financial decisions.
Be specific with your budgeting categories. Don’t make it too complicated. Always remember to include household items, clothing, and groceries when tracking expenses.
5. Prioritize your Budget Plan
A budget can provide a realistic picture of your finances, help reduce stress related to money matters, and guide you toward achieving your goals.
Creating a budget can help ensure that you are able to meet your financial obligations and still have money left over for savings and other goals. A budget can also help you track your spending so that you can make adjustments if necessary.
Make a budget plan: This will help you stay on track and make sure that you are spending your money wisely.
You decide where to spend money: A budget helps you set future goals and achieve your financial goals.
Creating a budget can help reduce stress: If you tend to get stressed about money matters, creating a budget can give you peace of mind.
A budget has other benefits beyond financial ones: If you want to achieve something in life, creating a budget can help guide you in the right direction.
See where to cut back spending. You can also look at your past spending habits to see where you can cut back. Sometimes it may be necessary to save more in order to achieve long-term goals, like buying a house or having a wedding. Always be mindful of your budget when making payments and spending money.
It’s a three-step process that involves basic math: Making a budget is simple and requires only basic math skills.
Stay on track: Making a budget plan will help you stay organized and keep track of your expenses.
A budget plan will help you stay on track and make sure that you are using the best payment type for your budget.
Making a budget is an easy way to save money. By following a few simple steps, you can keep track of your expenses and make sure that you are spending your money wisely.
Which type of payment is best for sticking to a budget?
One of the main pros of using cash as a method of payment is that it is the most efficient way to keep track of your finances. This is because it is very easy to budget when you are only dealing with cash.
However, many people prefer debit or credit cards are the best type of payment. They are more convenient than cash and can help you keep track of your spending. However, if you have a bad credit history or a low credit score, credit cards may not be the best option for you.
Cash payments are the most efficient: Most convenient and easiest to keep track with cash envelopes.
Credit cards allow you to accrue points along with your spending: These are a great benefit and one that can be a perk if handled well as part of your budgeting process. As long as pay them off in full each month to avoid credit card debt, high-interest rates, and other negative consequences.
Debit cards are also a good option for sticking to a budget. They can be used like credit cards but with less risk of debt.
Cash-based payments are a newer option and are more reliable: May not have as many negative consequences as other payment methods such as credit cards or loans.
What Not to Use when you are Trying to Stick to a Budget
You need to steer clear of these types of payments if you want to be financially stable person.
Personal loans
Personal loans are a risky way to budget. However, if you need the money for an emergency or unexpected expense, a personal loan can be a lifesaver.
There are many risks to consider and other ways to lower your spending before resorting to a personal loan.
Loans can cause budgeting problems: Loans can mess up your budget and make it difficult to stick to spending plans.
Taking out a personal loan just for the sake of having money can disrupt your budgeting: Consumers often borrow money in order to pretend they’re doing better financially than they really are.
Borrowing money is usually not a good idea: When you borrow money, you may find that you cannot handle seeing low checking account balance, which can lead to deeper debt problems.
Payday Loans
Payday loans are a bad option for someone looking for a long-term solution. They are expensive, and there is a high chance that the person will not be able to pay back the loan.
The interest that is charged is also high, and it can add up quickly.
Write bullet points about what happens with a payday loan
Payday loans can trap people in a cycle of debt, as they are often unable to pay back the loan in full on the due date.
When someone takes out a payday loan, they are borrowing money from a lender in a short amount of time, usually two or three days.
Payday loans are often expensive, with interest rates that can be above 300%.
Debt Consolidation Loans
Debt consolidation can be a good way to manage your debt because it can result in a lower monthly payment and extended payments may impact your financial plan. You can use a debt consolidation calculator to estimate how much debt you can afford before taking out a consolidation loan.
Debt consolidation loans also provide convenience because they have lower interest rates than payday loans. However, be careful when consolidating your debt because it is possible to overspend and lose your introductory APR.
You may be able to pay off your debt with one monthly payment: A consolidation loan often results in a much lower monthly payment than all of your previous monthly payments combined.
Extended payments may impact your financial plan: Take a look at how these extended payments will impact your financial planning.
You can estimate how much debt you can comfortably afford: use this tool – Tally .
It is possible to overspend with debt consolidation: If you spend more money than you planned on your day-to-day expenses, this could increase your debt. Consider if the purchase is necessary or if it can be delayed.
You may lose your introductory APR: If you fall more than 60 days behind on payments, you will likely lose your introductory APR and may even trigger a penalty interest rate.
You need to be careful when transferring a balance: Transferring a balance can also forfeit your grace period and you’ll need to pay interest on new purchases charged to the new card.
What type of payment method is best for sticking to a budget?
There are a variety of payment methods available, and each has its own benefits and drawbacks. It’s important to choose the payment method that’s best suited for your business and budget.
A payment method that allows you to stick to a budget is the best option.
FAQs
There are three main types of payment methods: cash, debit cards, credit cards, and cash-based payments.
The envelope budgeting method is a simple way to create a budget. You will need envelopes and divide your money up into the different categories that you spend money on. You will then put the corresponding amount of money into each envelope. This method can be helpful if you have a hard time sticking to a budget.
The zero-based budgeting method is a more methodical way to create a budget. With this method, you track every penny that you earn and spend. This can help you to see where your money is going and make adjustments accordingly.
A debit card is a plastic card that is linked to a checking account. Customers can spend money by drawing on funds they have already deposited. An overdraft on a debit card can lead to overdraft fees, which have high-interest rates.
A credit card is a plastic card that allows customers to borrow money up to a certain limit in order to purchase items or withdraw cash. Using a credit card can help build credit or improve your credit score.
There are a few different ways to use a credit card. You can use it to check your balance and review your spending history, which can be helpful in staying accountable.
Credit cards also offer online tools which make the analysis of your spending easier which can be helpful in tracking your budget.
Finally, you can use a credit card to rebuild your credit score by using it responsibly and paying off the balance in full each month.
Which payment type can help you stick to a budget?
When it comes to choosing a payment type that will help you stick to a budget, there is no one-size-fits-all solution.
The best payment method for you will depend on your specific needs and preferences.
When you are creating a budget, it is important to consider which payment type will help you stay on budget. Different payment types work better for different people, so it is important to experiment and find the one that works best for you.
As I stated for me, I have learned how to use credit cards to maximize cash back. But, I learned how to budget with cash when first starting.
Please pay attention to your budget and how it changes over time, as different payment types may work better at different stages of your life.
Consequently, I hope that this guide has given you a better understanding of the different payment types available and helped you narrow down your options. There are a variety of payment types that can help you stick to a budget, so it’s important to research each one carefully.
I highly recommend using an app to track your expenses and know where you spend your money. By developing a budget and choosing the right payment type, you can stick to your financial goals.
Know someone else that needs this, too? Then, please share!!
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Boutique Community Living at 2401 Penn
If you’re looking for a luxurious and convenient residential experience in Washington DC, boutique community living may be just what you need. And 2401 Penn is a prime example of a property that offers the best of both worlds in terms of location and amenities.
The Perfect Location
Located in the highly desired West End neighborhood, 2401 Penn offers residents easy access to the best of the city. The White House, Foggy Bottom Metro Station, George Washington University, George Washington Hospital, embassies, and Georgetown are just a few minutes away. Fine dining, world-class shopping, and entertainment options are also within reach.
Luxurious Amenities
But it’s not just the location that makes 2401 Penn special. The property also boasts luxurious amenities that set it apart from other residential buildings in the area. With 24-hour full-service concierge, on-site retail and dining options (including gourmet restaurant Marcel’s), a rooftop terrace with breathtaking views of the Washington Monument, Downtown DC, and Georgetown, a rooftop deck fire pit and grilling stations for outdoor entertaining, and a conference center and web cafe for remote work and business needs, 2401 Penn truly offers unparalleled amenities.
Featured Floorplan: The Hillary
And the luxury doesn’t stop there. The one-bedroom apartment “The Hillary” offers 1400 square feet of expertly designed interiors with top-of-the-line finishes. With spectacular views, an impressive wood-burning fireplace in the living room, private balconies with French doors, marble tiled bathrooms with luxurious whirlpool bathtubs, chef-caliber kitchens with gas cooking and energy-efficient refrigerator, hardwood floors in living and dining rooms, generous closet space, and individual climate control, residents can experience the ultimate in luxury living.
Neighborhood Happenings
Living at 2401 Pennsylvania Avenue is more than just luxurious living. It’s about experiencing the culture and beauty of our nation’s capital. Residents can explore nearby DC icons like the White House and Potomac River, catch a show at the renowned Kennedy Center, and enjoy the vibrant nightlife of Dupont Circle.
In conclusion, boutique community living at 2401 Penn offers the best of both worlds with luxury living in the heart of DC’s West End neighborhood. The property’s prime location, unparalleled amenities, and expertly designed interiors provide residents with an elegant metropolitan lifestyle and access to the best the city has to offer. Experience distinguished spacious living that you’ll never want to leave. Schedule your tour of 2401 Pennsylvania Avenue today!
Amazon and the Amazon logo are trademarks of Amazon.com, Inc, or its affiliates. Rental providers will not refuse to rent a rental unit to a person because the person will provide the rental payment, in whole or in part, through a voucher for rental housing assistance provided by the District or federal government.
Buying a home for the first time can be cumbersome. You’ve never done it before, so it’s normal to feel a bit overwhelmed. Luckily, we’ve pulled together some of the common mistakes first-time home buyers make. Learn from them, and you may have a smoother home buying process.
Forgetting About Costs:
Your mortgage will probably not be the only cost when it comes to buying a home. Smaller costs like property insurance, taxes, electric and water bills, and other fees may start to pile up. Before buying a house, you may need to look further into your savings to figure out if you can pay for all of these additional charges.
Looking for a Home Before the Loan:
Once you find a house and decide to buy it, you don’t want to spend time wondering if you can afford it. Knowing your budget, and that you are a qualified buyer before you begin your search may make the process easier and more efficient. Once you decide that it’s time to buy a home, get pre-approved for a loan.
Not Hiring Professionals:
Moving isn’t as simple as packing up your stuff and renting a van. It takes a village to move into a new neighborhood. Your team can only be as good as your weakest link, so you may want to ensure that you have only the best players. Get your home buying team in place before starting the search.
Being Too Picky:
There’s nothing wrong with knowing what you want when it comes to buying a home. But if your “must-have” list get too long and too specific, you may end up looking for your perfect house for a very long time. Also, remember that you can make changes once you move in. It may be wise to take the time to figure out what you really need versus what you want. If you are unsure where to start, our checklist may help!
Lacking Vision:
Some of the open houses you attend may not look move-in ready. But plenty of homes have hidden potential. When you look for a home, try to look past the 70’s shag rugs and lava lamps. Imagine what the home will look like after you’ve moved in with all of your own belongings, or try to envision the structure of the home without the stuff inside it. This will be an important skill, especially if you’re looking to buy a fixer-upper as your first home.
Ignoring the Future:
If you plan on living in this house for a long time, you may want to think ahead. You may decide to have kids in a few years, and then you’ll have to worry about another set of questions. Will there be enough bedrooms? Is the house located in a good school district? These may be things to think about when buying your home.
So whether you’re just starting to think about buying your first home, or you’ve already spent some time looking, there may be a lot to learn from this list of mistakes.
Save more, spend smarter, and make your money go further
When it comes to saving for the future, the most commonly asked questions are “what funds should I choose for my 401(k) or IRA?” and “how much should I save per month?”. If you’re like most people, you likely zero your focus in on the former. However, in the grand scheme of things, shifting your focus to how much money you should be saving per month is the smarter, more efficient way to build your funds.
Every month, some money is added to (or subtracted from) your 401(k) or IRA due to factors beyond your control. Your stocks go up or down. A bond fund pays a dividend. In short, market stuff happens and with every month, you add some money to your account. If the amount of money you add is bigger than the effect of the market fluctuations, then your savings rate becomes significantly more important than your investment performance.
What is the savings rate?
Your savings rate is the amount of money you save every month expressed as a percentage or ratio of your overall (gross) income. The higher the savings rate, the more money you save per month. Your savings rate is often regarded as one of the most critical elements of your long-term financial planning. It’s also one of the few factors you can directly influence by making strategic choices. Ultimately, your personal savings rate can be one of the most telling percentages to account for when assessing your retirement savings success.
According to a 2005 Federal Reserve data report, the U.S. personal savings rate hovered between 2.5 and 3%. This rate is alarmingly low and indicates that it could take nearly 40 years of saving to equate one year of living savings in retirement. This past national average also signals back to the previous point— in 2005, more people were focused on building their retirement accounts than actually stashing away disposable income for future planning.
How to calculate your savings rate
Using the savings rate formula is a simple three-step process:
Add up net savings
This should include all non-retirement savings and your retirement savings for the year (including employer retirement contributions). This number could very well end up being negative if you had net debt rather than net savings for the allotted time period. For example, taking a withdrawal from any savings account or taking a loan from a savings account would be a reduction against anything you saved.
Calculate total income
Add your total take home pay plus any pre-tax savings (including employer contributions).
Divide total net savings by total income
Take your total net savings from Step 1 and divide it by your total income in Step 2. Multiply the outcome number by 100 to convert it to a percentage.
Example: You make $50,000 a year and you save $5,000 to your 401K. You had to withdraw $1,000 from your Roth IRA earlier in the year to pay for an unexpected expense but you added $500 back to your Roth IRA by the end of the year. Your employer also contributes $2,500 to your 401K for you.
Your net savings is:
$5000-1000+500+2500 = $7,000
Your total income is:
$50000+5000+2500 = $57,500
Your Savings Rate is:
$7000/57500 = 0.1217
0.1217*100 = 12.17%
What influences the savings rate?
From the state of the economy and fluctuations in market interest to age and wealth, there are a number of different factors that directly influence the savings rate.
Economic factors, such as economic stability and personal earnings, are critical for the calculation of savings rates. Intervals of extreme economic volatility, such as recessions and global crises, typically lead to a rise in investment as consumers minimize their usual spending habits in order to brace for an unpredictable future. However, on the opposite end, periods of exponential economic growth can also build optimism and trust that stimulates a comparatively higher percentage of consumption.
Income and wealth significantly affect the savings rate because there is a positive correlation between the per capita gross domestic product (GDP) and savings. Generally speaking, low-income households tend to spend the majority of their income on everyday essentials and needs as opposed to wealthier people who can afford to stash away regular portions of their income toward saving for the future.
Shifts in market interest can also have an impact on the savings rate. Higher interest rates may lead to lower average spending and higher investment levels. This is a result of the substitution effect— being able to spend more in the future outweighs the revenue effect of retaining existing income earned from interest payments for most households.
Personal savings rate example
To give a more concrete understanding of personal savings rate, let’s use a real-life example to better illuminate the purpose and meaning of this percentage. Say there are two people who work at the same job with exactly the same pay. One saves 5% and earns 10% annual returns while the other saves 10% and earns 5% annual returns. Based on the personal savings rate calculation, it will take over 25 years for the employee with the 10% return to come out ahead.
There are two key lessons here you can take away. First: on your first day of work, immediately save 10% of your gross pay and keep doing so forever. Mathematically, if you are employed and working for 45 years starting at age 20 and you consistently stash away 10% of your income, you’ll end up with enough money to retire comfortably.
The second lesson: if you hit the middle of your career and are still making avoidable investment mistakes like market timing, day trading, and performance chasing, consider changing your strategy. It’s a much more worthwhile venture to learn how to diversify your portfolio and keep costs and risk as low as possible to properly build a financially stable future.
How to increase your savings rate
Bolstering your savings rate is primarily about strategic budgeting, but there are a number of different elements to consider when creating a plan to improve your personal savings rate. Use the tips below to get a head start on building your savings rate.
Tip #1: Cut your spending
It’s vital to examine your current budget and evaluate the areas in which you may be able to cut costs. Identifying these places where you can eliminate ensures that you have ample opportunity to dedicate more of your monthly income toward savings. Every dollar counts, so when going through your budget, be meticulous and intentional about any spending shifts to maximize your saving potential.
Tip #2: Increase your income
The best way to save more money is by making more money. Though that is far simpler said than done, there are a few easy ways you can increase your income without making any significant changes to your existing lifestyle.
Consider the following:
Tip #3: Automate your savings
Instead of depending on yourself to remember to stash away a certain amount of money toward your savings account, introduce yourself to automated saving. One of the simplest ways to do this is by setting up automatic recurring transfers. The moment you get paid, a specified amount of cash will transfer into your savings account, no manual switching needed.
What about investments?
How many people do you know who started saving for retirement at age 20 and haven’t been unemployed, or taken a 401(k) loan, or gone off to India in search of themselves, before they hit age 65? In their 2011 retirement confidence survey, the Employee Benefit Research Institute found that 70 percent of Americans believe they are “a little” or “a lot” behind schedule. The best thing we can do to increase our retirement nest egg is to (snooze alert) save more and spend less. In attempting to do so, many turn to making various investment choices.
Investment choices are undoubtedly important, especially once you’ve accumulated a sizable chunk of savings. It can be fun, scary, and mysterious, and with the chance of earning a huge amount of money if you play your cards right, investing is downright attractive. But it goes without saying that making money is a lot more alluring than saving money. And that’s exactly why it’s so important.
By focusing on bettering your personal savings rate, you’ll enjoy the long-term benefits without any risk or chance involved. By stashing away disposable income for future planning, you can effectively escape the game of chance and gain the assurance you need in growing your own savings on your own terms. Also, money makes money – the more invested, the more you will make.
The silver lining of saving more
Last question: is it better for your 401(k) balance to go up because you’re saving more or because your investments are performing well? Or does it matter?
It matters. Improving your balance by saving more is better. Once you retire, you’ll be using your savings to pay expenses. The lower your expenses before retirement, the easier it will be to cover them from your nest egg. And when your savings rate goes up, your expenses (as a percentage of your pay) have to go down, right? Or, you can just increase your savings rate each time you get a raise to cover the difference.
Maybe the secret of a comfortable retirement isn’t about savings rate or investment performance: it’s about redefining “comfortable.”
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.
Save more, spend smarter, and make your money go further
Previous Post
Save on Parenthood: Skip These Baby Gear Money Traps
Save more, spend smarter, and make your money go further
When it comes to saving for the future, the most commonly asked questions are “what funds should I choose for my 401(k) or IRA?” and “how much should I save per month?”. If you’re like most people, you likely zero your focus in on the former. However, in the grand scheme of things, shifting your focus to how much money you should be saving per month is the smarter, more efficient way to build your funds.
Every month, some money is added to (or subtracted from) your 401(k) or IRA due to factors beyond your control. Your stocks go up or down. A bond fund pays a dividend. In short, market stuff happens and with every month, you add some money to your account. If the amount of money you add is bigger than the effect of the market fluctuations, then your savings rate becomes significantly more important than your investment performance.
What is the savings rate?
Your savings rate is the amount of money you save every month expressed as a percentage or ratio of your overall (gross) income. The higher the savings rate, the more money you save per month. Your savings rate is often regarded as one of the most critical elements of your long-term financial planning. It’s also one of the few factors you can directly influence by making strategic choices. Ultimately, your personal savings rate can be one of the most telling percentages to account for when assessing your retirement savings success.
According to a 2005 Federal Reserve data report, the U.S. personal savings rate hovered between 2.5 and 3%. This rate is alarmingly low and indicates that it could take nearly 40 years of saving to equate one year of living savings in retirement. This past national average also signals back to the previous point— in 2005, more people were focused on building their retirement accounts than actually stashing away disposable income for future planning.
How to calculate your savings rate
Using the savings rate formula is a simple three-step process:
Add up net savings
This should include all non-retirement savings and your retirement savings for the year (including employer retirement contributions). This number could very well end up being negative if you had net debt rather than net savings for the allotted time period. For example, taking a withdrawal from any savings account or taking a loan from a savings account would be a reduction against anything you saved.
Calculate total income
Add your total take home pay plus any pre-tax savings (including employer contributions).
Divide total net savings by total income
Take your total net savings from Step 1 and divide it by your total income in Step 2. Multiply the outcome number by 100 to convert it to a percentage.
Example: You make $50,000 a year and you save $5,000 to your 401K. You had to withdraw $1,000 from your Roth IRA earlier in the year to pay for an unexpected expense but you added $500 back to your Roth IRA by the end of the year. Your employer also contributes $2,500 to your 401K for you.
Your net savings is:
$5000-1000+500+2500 = $7,000
Your total income is:
$50000+5000+2500 = $57,500
Your Savings Rate is:
$7000/57500 = 0.1217
0.1217*100 = 12.17%
What influences the savings rate?
From the state of the economy and fluctuations in market interest to age and wealth, there are a number of different factors that directly influence the savings rate.
Economic factors, such as economic stability and personal earnings, are critical for the calculation of savings rates. Intervals of extreme economic volatility, such as recessions and global crises, typically lead to a rise in investment as consumers minimize their usual spending habits in order to brace for an unpredictable future. However, on the opposite end, periods of exponential economic growth can also build optimism and trust that stimulates a comparatively higher percentage of consumption.
Income and wealth significantly affect the savings rate because there is a positive correlation between the per capita gross domestic product (GDP) and savings. Generally speaking, low-income households tend to spend the majority of their income on everyday essentials and needs as opposed to wealthier people who can afford to stash away regular portions of their income toward saving for the future.
Shifts in market interest can also have an impact on the savings rate. Higher interest rates may lead to lower average spending and higher investment levels. This is a result of the substitution effect— being able to spend more in the future outweighs the revenue effect of retaining existing income earned from interest payments for most households.
Personal savings rate example
To give a more concrete understanding of personal savings rate, let’s use a real-life example to better illuminate the purpose and meaning of this percentage. Say there are two people who work at the same job with exactly the same pay. One saves 5% and earns 10% annual returns while the other saves 10% and earns 5% annual returns. Based on the personal savings rate calculation, it will take over 25 years for the employee with the 10% return to come out ahead.
There are two key lessons here you can take away. First: on your first day of work, immediately save 10% of your gross pay and keep doing so forever. Mathematically, if you are employed and working for 45 years starting at age 20 and you consistently stash away 10% of your income, you’ll end up with enough money to retire comfortably.
The second lesson: if you hit the middle of your career and are still making avoidable investment mistakes like market timing, day trading, and performance chasing, consider changing your strategy. It’s a much more worthwhile venture to learn how to diversify your portfolio and keep costs and risk as low as possible to properly build a financially stable future.
How to increase your savings rate
Bolstering your savings rate is primarily about strategic budgeting, but there are a number of different elements to consider when creating a plan to improve your personal savings rate. Use the tips below to get a head start on building your savings rate.
Tip #1: Cut your spending
It’s vital to examine your current budget and evaluate the areas in which you may be able to cut costs. Identifying these places where you can eliminate ensures that you have ample opportunity to dedicate more of your monthly income toward savings. Every dollar counts, so when going through your budget, be meticulous and intentional about any spending shifts to maximize your saving potential.
Tip #2: Increase your income
The best way to save more money is by making more money. Though that is far simpler said than done, there are a few easy ways you can increase your income without making any significant changes to your existing lifestyle.
Consider the following:
Tip #3: Automate your savings
Instead of depending on yourself to remember to stash away a certain amount of money toward your savings account, introduce yourself to automated saving. One of the simplest ways to do this is by setting up automatic recurring transfers. The moment you get paid, a specified amount of cash will transfer into your savings account, no manual switching needed.
What about investments?
How many people do you know who started saving for retirement at age 20 and haven’t been unemployed, or taken a 401(k) loan, or gone off to India in search of themselves, before they hit age 65? In their 2011 retirement confidence survey, the Employee Benefit Research Institute found that 70 percent of Americans believe they are “a little” or “a lot” behind schedule. The best thing we can do to increase our retirement nest egg is to (snooze alert) save more and spend less. In attempting to do so, many turn to making various investment choices.
Investment choices are undoubtedly important, especially once you’ve accumulated a sizable chunk of savings. It can be fun, scary, and mysterious, and with the chance of earning a huge amount of money if you play your cards right, investing is downright attractive. But it goes without saying that making money is a lot more alluring than saving money. And that’s exactly why it’s so important.
By focusing on bettering your personal savings rate, you’ll enjoy the long-term benefits without any risk or chance involved. By stashing away disposable income for future planning, you can effectively escape the game of chance and gain the assurance you need in growing your own savings on your own terms. Also, money makes money – the more invested, the more you will make.
The silver lining of saving more
Last question: is it better for your 401(k) balance to go up because you’re saving more or because your investments are performing well? Or does it matter?
It matters. Improving your balance by saving more is better. Once you retire, you’ll be using your savings to pay expenses. The lower your expenses before retirement, the easier it will be to cover them from your nest egg. And when your savings rate goes up, your expenses (as a percentage of your pay) have to go down, right? Or, you can just increase your savings rate each time you get a raise to cover the difference.
Maybe the secret of a comfortable retirement isn’t about savings rate or investment performance: it’s about redefining “comfortable.”
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.
Save more, spend smarter, and make your money go further
Previous Post
Save on Parenthood: Skip These Baby Gear Money Traps
The Golden State is known for its sunny and sandy beaches, historic cities like San Francisco and Los Angeles, picturesque national parks like Yosemite and Joshua Tree, and array of outdoor activities – hiking, skiing, surfing, and running trails. It’s no wonder that 39 million people live in California. There are many draws to the state, no matter what city you’re living in. So, if you’re looking to buy a home in California this year, you might be wondering what kind of classic California style homes you’re likely to find.
Look no further, Redfin is here to guide you. We’ve gathered 8 quintessential California style homes you might want to consider buying whether you’re looking for a home in Sacramento or rental property in Irvine. While home styles vary across the state, here are some of the most common home styles in California you’re likely to find. Let’s jump in.
1) Cape Cod
Cape Cod homes are a well-known and loved house style across the US. They’re most recognizable for their symmetrical design, steep roof with pitched triangular areas, and large chimney. These homes often have two-to-three bedrooms and an open floor plan. They’re typically single-story, but you can often find Cape Cod style homes with more floors. Cape Cod style homes have lots of windows to let in natural light, adding to the charm. You’ll find these homes have cedar shingles, brick, stucco, or stone exteriors.
2) Contemporary
If you’re looking for a home that’s got modern and chic elements consider a contemporary style house. These homes are common in many cities up and down the state, from Malibu to Vacaville. Contemporary homes typically have sleek and streamlined designs, with plenty of natural light and an emphasis on functionality, perfect for the sunny California days. Expect to see a mix of materials and textures, such as wood, metal, and glass to complete the home.
3) Craftsman
Craftsman style homes in California are known for their unique blend of traditional and modern elements. These homes have low-pitched roofs with exposed rafters, wide front porches, and a mix of materials like stone, wood, and brick. Inside, expect to see plenty of natural light and an open floor plan, with built-in cabinetry and detailed woodwork adding to the charm. Whether you’re looking for a cozy bungalow or a larger, more spacious home, you’ll find options with the Craftsman style.
4) Mediterranean
Mediterranean-style homes are a popular architectural choice in California, drawing inspiration from the historic buildings found in Spain and Italy. These homes often feature stucco exteriors, red roof tiles, and metalwork accents, creating a warm and inviting ambiance. Many Mediterranean homes also incorporate exposed wooden beams, adding to their rustic charm.
One of the defining features of these homes is their seamless blend of indoor-outdoor living, making them ideal for California’s mild climate. Whether you’re looking for a seaside villa or a cozy retreat in the hills, you’re sure to find the perfect Mediterranean-style home in California.
5) Mid-century modern
A home style that gained popularity during the 1940s through 1960s, mid-century modern homes are still very loved today, including in California. These homes have clean lines, functional design, and natural elements. Mid-century modern homes in California are typically single-story or split-level with floor-to-ceiling windows, sliding doors, and an emphasis on indoor-outdoor living. Additionally, mid-century modern homes showcase neutral colors and natural wood finishes throughout the home, creating a minimalist and sleek look.
6) New construction
New construction homes in California typically feature modern and sleek designs with an emphasis on indoor-outdoor living. They often incorporate sustainable materials and energy-efficient features to help reduce their carbon footprint. Many homes offer open-concept living spaces, large windows, and high ceilings to maximize natural light and create a sense of spaciousness. Smart home technology is also common, allowing you to control everything from lighting to temperature.
7) Ranch
California ranch homes are typically a single-story design with a low-pitched roof and wide eaves. These homes often have a simple, open floor plan, with a living room, dining room, and kitchen all connected. You may find large sliding glass doors leading to outdoor living spaces, like patios or decks, to take advantage of California’s mild climate. Many ranch homes in California also feature mid-century modern design elements, such as floor-to-ceiling windows, exposed beams, and natural details.
8) Victorian
You can find variations of Victorian homes throughout the state, but, by far, the most well-known Victorian homes are in San Francisco. The “Painted Ladies” are recognized by their ornate and colorful facades. They feature bold hues and intricate details such as gingerbread trim, stained glass windows, and decorative brackets. The Victorian style homes in California were primarily built in the late 1800s and early 1900s. The main architectural styles are Gothic Revival, Queen Anne, and Italianate.
Travel offers knowledge and insights that enrich your perspective. For novice travelers, it’s normal to make mistakes at first, but over time, you’ll learn the do’s and don’ts of planning trips and navigating foreign destinations. We’re diving into some of our top travel tips for a successful vacation!
1. Research your destination
Before packing your bags and making flight arrangements, do some digging into your destination! Find out about the culture, the customs and norms in that place. You can avoid some serious faux pas just with a little reading ahead. And check the weather and climate while you’re at it. Sure, it might be the same temperature as your hometown in the place where you’re headed, but the humidity and geography play a role too: 60 in the prairies of North Dakota is going to be different than 60 degrees on San Francisco Bay!
One Reddit Traveler added, “…Also for Transit cities just in case. Also, save your hotel location, and embassy details.”
2. Use VPN to get Discounts on Flights
In general, travel websites utilize your IP address to tailor flight prices based on your location. However, by utilizing a VPN while planning your travels, you can conceal your IP address and potentially access cheaper flight prices. By setting your IP address to a lower-income country, you may be able to book flights at a reduced cost. Alternatively, setting your IP address to the location where the airline is based could result in significant savings on flight costs.
One Redditor said, “Try searching for flights in the airline’s original language. I once saved $700 for booking tickets in Peru by using Spanish rather than English”
3. Avoid Expensive Hotels and Accommodations
Traveling can often be expensive, but there are ways to make it more affordable. One effective method is to opt for budget-friendly accommodations instead of luxury, five-star hotels. Usually, the main objective of traveling is to have new experiences. Comfortable sleeping arrangements are important, but don’t let them hinder your ability to explore.
One Redditor added, “ Location beats a luxury room.”
Another stated, “If I can walk to get midnight munchies and to a few points of interest and to public transport, I’ll put up with a lot; provided it’s kept clean.”
4. Pack Light
Traveling light is a good idea for any trip. The less you pack, the more convenient your journey is likely to be. This is particularly true when you plan to visit multiple cities or countries. It’s just easier to navigate your way through unfamiliar terrain with less baggage. There’s also less chance of misplacing things. In short, traveling light is a practical and hassle-free approach to any adventure.
One commenter said, “Pack 24 hours worth of what you need too. I usually throw extra boxers and socks into my carry-on since I’ve been screwed by lost luggage too many times.”
5. Pack Extra of Necessities
Anyone can understand why this is important. It’s impossible to anticipate every potential mishap that may occur during a trip, and plans can change unexpectedly. For instance, you might decide to prolong your journey by a few days. It’s prudent to pack a few additional pairs of undergarments or other necessities.
One of our Redditors said, “I pack extra socks and underwear and shorts in my carry-on in case an accident happens… [you] never know…”
6. Get to the Airport Early
This is pretty much the golden rule: arrive at the airport well before your scheduled flight. Start your travel day by waking up earlier than usual, enjoying a nutritious breakfast, double-checking that you have all your belongings, and then heading straight to the airport. Remember, it’s better to be ahead of schedule than to risk missing your flight.
7. Always wear sunscreen
This is especially important if you’re visiting somewhere tropical, or there’s high exposure to ultraviolet (UV) radiation. UV radiation can damage your skin, cause premature aging, and even raise the risk of skin cancer. Opt for a product with an SPF of at least 30, with broad-spectrum coverage against UVA and UVB rays. Apply every two hours, or more often if you’re swimming or sweating. Wearing a protective hat and sunglasses and finding shade during peak UV hours (typically between 10 am and 4 pm) can also help. Overall, wearing sunscreen isn’t just about protecting your skin during travel but also about safeguarding your health in the long run.
8. Visit Tourist Destinations during Lunch
Visiting historical places at lunchtime is a great way to avoid crowds and have a better experience. Many landmarks and tourist attractions tend to be busiest in the morning and afternoon. Most people prefer to have lunch or take a break during this time, and you can explore these sites with more comfort. You may even get better photos without crowds in the background. Also, visiting historical places at lunchtime might help you avoid long lines and wait times. However, it’s important to note that some places may be closed for lunch, so check ahead, and plan accordingly.
9. Avoid Changing Your Currency At The Airport
Frequent travelers advise against exchanging your currency at the airport. Airport currency exchange counters tend to offer steep rates compared to local currency exchanges. Airport exchange rates can be up to 20% higher than other exchange locations, so wait until you reach your destination or find a reputable currency exchange office. You can also withdraw local currency from an ATM using a debit or credit card, which is both efficient and cost effective.
10. Beware of Biased Recommendations
As one Redditor said, try to seek advice from someone who isn’t being paid to provide it. Seek out opinions from independent sources, such as local residents or unbiased online reviews, to get a more objective and authentic perspective on the best options. People who aren’t getting paid to provide their opinion are less likely to be scammers, and more likely to have information that’s applicable to your personal travel experience.
Traveling can be an enriching and exciting experience, but it’s important to be well-prepared before embarking on any trip. Do some research and planning ahead, and you should have a fun and enriching experience!
View the original Reddit thread here.
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We all know that the secret to getting insanely rich is to accumulate assets and avoid liabilities. The tricky part is knowing in advance which asset gets us there faster.
Before the technology boom, some may have picked San Francisco Real Estate and gone all-in, enabling them now to do a Cash-Out Refinance.
Others may have picked a relatively new asset like Bitcoin before the meteoric rise.
There are several success stories involving real estate, collectibles, and other assets that are not liquid or do not have a large trading market. Most of them involve a one-time buying decision and then a long holding period.
It is rare to consistently beat the market by trading over a long period, predominantly liquid markets such as stocks or commodities.
What if you could invest in a fund that had compounded annually at the rate of 63.3% over the last 30 years?
Welcome to the secretive world of Renaissance Technologies and the Medallion fund.
Who Owns Renaissance Technologies?
Jim Simons founded Renaissance Technologies, a former Cold war code breaker and a famous mathematician. He is known in the scientific community for co-developing the Chern–Simons theory. Simons also received the Oswald Veblen Prize of the American Mathematical Society, which is geometry’s highest honor.
In 1988, the firm established the Flagship Medallion Fund.
What Is the Medallion Fund?
Simons and algebraist James Ax started a hedge fund and named it Medallion in honor of the math awards that they had won. The Medallion fund used mathematical models to explore correlations from which they could profit.
In 1988, Simons had decided to base the company’s trades entirely on the models. However, by April 1989, peak-to-trough losses had amounted to about 30%.
Simons turned to Elwyn Berlekamp, a mathematics professor from UC Berkeley, to overhaul the trading system. Berlekamp was instrumental in evolving trading to shorter-dated, pure systems driven decision-making. Initially, the focus was on bonds, commodities, and currencies.
In 1993, Simons hired Bob Mercer and Peter Brown, who were working on speech recognition and machine translation at IBM research. This partnership proved highly successful as they cracked the equities market. For the fund to grow, many more assets were required. Equities had proven difficult for the Renaissance team to break. The addition of equities allowed the Medallion fund to scale to thousands of assets.
Performance of Medallion Fund
The performance of the Medallion fund has astounded everyone. If you had invested $1,000 in the Medallion Fund, after 30 years, you would now have $20 million (after fees). To put these numbers into perspective, a similar amount invested in the S&P 500 would be $20,000. And if you invested in Berkshire Hathaway, it would have grown to only $100,000.
No one in the investment world comes close to Jim Simons and his flagship Medallion fund. Warren Buffett, George Soros, Peter Lynch, Steve Cohen, and Ray Dalio all fall short.
Bradford Cornell analyzed the Medallion Fund and published a brief paper in the Journal Of Portfolio Management. He considered the Medallion fund as the ultimate challenge to the efficient market hypothesis.
“The performance of Renaissance Technologies’ Medallion fund is like I saw a T. Rex in my backyard. I just don’t get it.” -Bradford Cornell, Professor Emeritus UCLA
Furthermore, during the entire 31-year period, Medallion never had a negative return despite the dotcom crash and the financial crisis. Despite this remarkable performance, the fund’s market beta and factor loadings were all negative. So the Medallion Fund performance cannot be interpreted as a premium for risk-bearing.
To date, there is no adequate rational market explanation for this performance.
How Does Medallion Fund Work?
The Medallion fund embodies the “will robots take my job” sentiment prevalent on Wall Street.
Data
Since the early days, Renaissance has been collecting and curating vast data archives of everything. From economic metrics to the weather to trading sentiment and a million other variables. The interaction between these data sets and the direction of the security movement forms the base of their secret sauce.
Strategy
Medallion’s strategy involves holding thousands of short-term positions, both long and short, at any given time. The fund makes high-frequency trades but has also held positions for up to one or two weeks.
Algorithmic Trading
The Medallion Fund has employed mathematical models to analyze and execute trades, many of them automated. The firm uses computer-based models to predict price changes. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.
Leverage
The trades are made using a lot of leverage, which amplifies the gains. The only challenge with using leverage in trading is to manage risks appropriately. I believe Real Estate is still the best way to obtain a leveraged return without margin calls, as long as you know how to evaluate real estate deals.
Position Sizing
Depending on the conditions spewed out by the model, the size of the trade varies. That is an essential factor to note because I have personally made many bad investments. Keeping the position size of my trades as a fraction of my Net worth; ensured that my four worst investments did not ruin me.
Combining Several Small Wins
Robert Mercer, the former co-chief executive of Renaissance Technologies, allegedly told a friend that Medallion was right 50.75 percent of the time when it came to its millions of trades. “You can make billions that way, doing potentially hundreds of thousands or millions of trades. Even a small amount of profitability per trade turns out to be a big amount.”
That is similar to how a Casino makes profits. The house has a slight edge, and over some time, the volume of money adds up.
How Big Is Medallion Fund?
The Medallion fund manages roughly $10 billion in assets. The secret to their outperformance also lies in the fund size. They have never let the fund get too big. Whatever profit they make is paid out. That enables the firm to stay small and nimble.
How Do I Invest in the Medallion Fund?
If you are wondering how to invest in the Medallion Fund, the bad news is that you can’t.
The Medallion fund has been closed to outside investors since 1993. It is available only to current and past employees of Renaissance Technologies and their families.
Working at Renaissance Technologies only for the ability to invest in the Medallion Fund; is the ultimate example of improving human capital to accelerate Financial Freedom. The firm bought out the last investor in the Medallion fund in 2005, and the investor community has not seen its returns since then.
By 2012 Renaissance was granted a special exemption by the United States Labor Department, allowing employees to invest their retirement money in Medallion Fund, arguing that Medallion had consistently outperformed their old 401(k) plan. Imagine the tax free growth of all the pre-tax contributions!
Renaissance Technologies has strict rules that bar former employees from using their intellectual property at rival firms.
Simons told a New York conference last month that the company has almost no turnover among its 300 or so employees, many of whom are based on a 50-acre campus near Stony Brook University on Long Island, where Simons formerly headed the mathematics department.
We don’t have any turnover. We’re cautious. -Jim Simons, Renaissance Technologies
Performance of Other Renaissance Technologies Funds
While the pandemic caught everyone by surprise and even humbled Warren Buffet into selling his airline stocks at a loss, the Medallion Fund continued its outperformance. It gained 10% in March and 39% (before fees) through mid-April.
However, the other Renaissance Technology funds open to the public have not fared as well.
The Medallion fund employs a short-term, quantitative trading strategy across many asset classes. These include global equities, futures, commodities, and currencies. It also tends to have high turnover and significant leverage.
The Renaissance Institutional Equities (RIEF) Fund only trades in stock. The fund holds stocks for long periods.
The Renaissance Institutional Diversified Alpha (RIDA) Fund trades equities, derivatives, and various instruments in the global futures and forwards markets. Like RIEF, the RIDA fund holds significant individual positions, usually for long periods.
The Renaissance Institutional Diversified Global Equities (RIDGE) Fund trades equities and derivatives. It seeks to be market neutral by maintaining low levels of beta, or exposure to the broader market.
The lackluster performance of other Renaissance Technology funds could be due to the different strategies.
Final Thoughts on Medallion Fund
It is possible to beat index investing even over the long term. But it is such a rare occurrence that research papers and entire books are written about it.
Medallion Fund has had outsized performance, but would it continue is something no one knows.
Since the Medallion Fund is out of reach, I have decided to embark on Moonshot Investing. That is an asymmetric risk strategy where a portion of my Net Worth is invested in companies that, I believe, will outperform the broader markets over time. Instead of going all in, I dollar cost average to reduce my price entry and risk.
Dollar-cost averaging executes purchases weekly or more frequently as desired. I also exit positions once particular securities have an outsized gain in a short period.
John came from a third world country to the US with only $1,000, not knowing anyone, guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown -https://financialfreedomcountdown.com/ to help everyone think differently about their financial challenges and live their best lives. He resides in the San Francisco Bay Area, enjoying nature trails and weight training.
As rent prices continue to soar all over the country, you may be finding yourself entering your first real estate search.
You’re not alone. According to the National Association of Realtors, millennials are ending their leases and buying homes in large numbers. Those in their late 20’s to early 30’s now make up the fastest-growing segment of buyers today. But how to even shop for a home these days?
First-time buyers might remember being dragged to Sunday open houses with their looky-loo parents, but those days are gone. Everything is online, and many real estate apps have sprung up to help buyers find their dream homes.
The 7 Best Home Buying Apps
Zillow: Best for overall use
Trulia: Best for community insight
Homesnap: Best for convenience
Redfin: Best for multilevel support
Rocket Homes: Best for one-stop shop
Realtor.com: Best for reliability
Homes.com: Best for quicking listing updates
Best Home Buying Apps at a Glance
App
Best For
Details
Key Feature
Zillow
Overall usability
Virtual tours
Push notifications
SEE DETAILS
Realtor.com
Reliability
3D tours
Detailed descriptions
SEE DETAILS
Trulia
Community insight
34 map overlays
30M neighborhood reviews
SEE DETAILS
Rocket Homes
One-stop shop
Agents/lenders links
Area trend reports
SEE DETAILS
Homesnap
Convenience
High-definition photos
Optimized for mobile
SEE DETAILS
Redfin
Multilevel support
User-friendly interface
Calculates mortgage/fees
SEE DETAILS
Homes.com
Quick listing updates
Home showings via Zoom
Mortgage calculator
SEE DETAILS
Zillow
Pro
Between for-sale-by-owner and official properties, it provides users access to over 135 million property listings.
Con
The “Zestimate” algorithm uses tax records to produce home value estimates, which sometimes are inaccurate.
The Zillow house-hunting app app is the most downloaded real estate app on the Apple store and Google Play — and for good reason. Its database constantly updates and has 36 million users monthly. You can set up push notifications for new real estate listings that meet your search criteria so you’ll never miss out on your potential dream home.
The app allows you to filter real estate listings by price, ZIP code, square footage, must-have features and more. You can even coordinate your search with a partner or roommate by tagging home features and sharing your favorites.
Zillow provides 3-D tours and a scheduling feature to set up an in-person tour. One of its best features is self tours of Zillow-owned homes, a feature available in some markets that allows house hunters to stop by the property at their convenience and simply unlock the house with the app.
Newly added to the Zillow app is a “natural-language search” tool, which responds to user questions in direct fashion, rather than requiring users to type multiple search questions to get to where they want to go.
Realtor.com
Pro
It’s the official search portal for the National Association of Realtors, meaning its updates are the most accurate.
Con
Clicking on “contact agent” will not go to the listing agent, but instead to a local real estate agent who has paid for this lead service.
Realtor.com is one of the best home buying apps out there for on-market listings. Being the official search portal for the National Association of Realtors means you can trust the home listings that pop up in your search. The data is directly mined from the MLS (multiple listing service) and refreshes every 15 minutes.
The search features include a wide variety of filters and provides the most detailed real estate listing descriptions, which include things like crime rates, school ratings, property tax and history of home value estimates — even things like the neighborhood noise levels or whether a home is in a FEMA flood zone.
Because the app updates so often, setting up push notifications means you’ll quickly know when a new property hits the local market. You’ll also have the power of the “Sign Snap” tool in your pocket the next time you drive by a “for sale” sign. All you have to do is take a photo and Realtor.com pulls all of the home’s details instantly.
Trulia
Pro
Shows names and contact information for listing agents, so users know who they would be working with for each listing.
Con
You’re prompted to call or email the listing agent on any property you view, which can get in the way of casual browsing.
Acquired by Zillow in 2015, Trulia has access to most of Zillow’s database of over 135 million active listings and has become one of the best real estate apps. What sets it apart is the focus on community insight provided by those who are located in the area you are searching. You’ll not only get details on the property, but information on what it’s like to live in that specific neighborhood.
You’ll be alerted about price reductions and upcoming open houses, and the app will recommend new listings. Insights sourced straight from locals and 34 neighborhood map overlays offer details on commute times, nearby businesses, crime rates, nearby schools, and more.
Two other features added in 2018 distinguishes the Trulia app from others. “What locals say” and “local legal protections,” combine local feedback and public data to provide information about what a neighborhood is like, from level of dog-friendliness, day-in-the-life details, and even how folks decorate for the holidays.
You’ll also be able to see whether there is legislation in the area to protect against discrimination for gender identity or sexual orientation in employment, housing or public accommodations.
Rocket Homes
Pro
Lets you access your TransUnion credit report, which is updated every week.
Con
Does not provide a home value estimate.
Similar to Trulia, Rocket Homes puts an emphasis on getting to know your soon-to-be neighborhood, but from a market statistics perspective.
This real estate knowledge will come in handy when searching for a home. You can compare properties in the area, seeing how long they’ve been on the market and what they sold for. If you’re not planning on living in your first home forever, this will help give you an idea of what kind of return on investment you can expect from your purchase in the future.
Rocket Homes is a product of Quicken Loans, giving you the opportunity to shop for homes from new and updated listings and have access to lending services all in one place.
This real estate app also helps you stay on track when it comes to some of the more boring parts of purchasing a home, like tracking your credit score. Rocket Homes gives you access to a free TransUnion credit report that is updated frequently, so you know exactly where you stand before starting the mortgage application process.
Homesnap
Pro
Get extensive details on a home just by snapping a photo of it.
Con
Lack of coverage in some areas; Homesnap must partner with individual multiple listing services.
The Homesnap real estate app is perfect for the on-the-go house hunter. You can simply snap a photo of a home and get all of the data available. This feature means you have real-time connection to your local multiple listing service from the road.
If you choose to search from the comfort of your home instead, the Homesnap app allows you to search for open houses by date, and even provides live-broadcast, virtual showings if you want to avoid mingling with other buyers in person.
You can collaborate with your real estate agent through a built-in private messaging function that automatically saves your listings for quick reference. Like most real estate apps, you have a ton of customizable filters for efficient searching, and will be provided with up to date information about the home and neighborhood like commute times, satellite photos and more.
Redfin
Pro
Updates every five minutes so you never miss a new listing.
Con
If you don’t live in one of the 90 U.S. and Canada markets where Redfin has agents, you won’t be able to connect with one.
Redfin’s out-of-the-box-business model combines the convenience of a high-performance app and the expertise you can only get by working with a real estate agent directly. Because Redfin is also a brokerage firm, you’ll have access to their top-quality real estate agents.
Working with a real estate agent gives you more in-depth market insights so you can make smart home buying decisions. And through the “Hot Homes” feature you’ll know which homes are more likely to sell fast so you don’t miss your chance of putting in an offer while house hunting.
Redfin also recently updated its data on climate risk, school ratings and neighborhood amenities.
Homes.com
Pro
Most of 2020 was spent updating the speed and user-friendliness of the app.
Con
Limited information on neighborhood and demographic data.
The Homes.com app is partnered with the MLS to bring you quality leads on your home buying search. The app offers a plethora of filter criteria like the other apps, such as square footage, ZIP code, number of bedrooms and bathrooms, but has an emphasis on lifestyle. Not only will you find the best house, but in the neighborhood that’s right for you.
The exclamation icon makes it easy to spot new real estate listings when scrolling through your search results. You also have the option to “favorite” or “block” certain properties in your feed so you can revisit the ones you love and eliminate the ones you don’t.
The mortgage calculator on Homes.com includes specific financing options like FHA (Federal Housing Administration) loans and special rates for active military members or retired veterans.
Frequently Asked Questions (FAQs) About Home Buying Apps
There’s a lot of home buying apps to pick from when you are seriously or even casually looking for a home. We’ve rounded up answers to some of the most common questions about home buying apps.
Which App is Best for Buying a House?
The best app for buying a house is the one that fits your needs. But Zillow is the most popular because it does a lot of things right, including allowing users to filter information by price, ZIP code, square footage, must-have features and more. Zillow also lists for-sale-by-owner homes. Zillow is the most downloaded real estate app on the Apple store and Google Play. It gets a 4.7 rating out of 5 from 475K reviews on Google Play. In the Apple App store, more than 6 million reviews get Zillow a 4.8 rating.
What are Home Buying Apps?
Home buying apps are mobile tools accessible on various digital devices that let users see listings to buy, sell or rent a property. Different apps have unique features but all of them include multiple photos of properties, prices, property tax and loan information and the ability to connect with real estate professionals.
Home buying apps provide many benefits to users because of their national coverage and even global offerings. Users can see maps and learn about neighborhoods, too. Best of all, they are free.
How Accurate are Home Buying Apps?
Because home buying apps take information from various sources, there will always be a margin of error in valuations. Estimated values are made from information gathered from county and tax assessor records, multiple listing services and real estate companies.
For properties on the market, the apps should have accurate asking prices or rental amounts. Where there is more variation is on property estimates, including for properties not on the market. You should consider these ballpark figures and not 100% accurate especially in a hot market when prices are jumping seemingly daily.. The apps are a good place to start but most people follow that information with a call to a real estate professional.
What is the Best House Hunting Site?
Zillow is the best overall site with its massive listing bank while Realtor.com is tops for reliable information. Trulia is excellent if you want more information about the community around a home. Homesnap is tops for photos and it is optimized well for mobile. If you want to connect with a Realtor, check out Redfin and if you want a direct line to a lending service, Rocket Homes may be the right pick for you.
Which App is Better: Zillow or Redfin?
Zillow edges out Redfin because of its massive reach. Redfin is not available in every market. However, Redfin is a brokerage which connects directly to the massive database of real estate listings commonly called MLS. Zillow does not do that. Zillow allows for sale by owner listings and Redfin does not.
What is the Most Popular Real Estate Website?
Zillow is the leading real estate website with more than 36 million unique visitors a month and about 135 million live listings. Trulia, which Zillow has owned since 2015, comes in second with 23 million unique visitors. Zillow was founded in Seattle in 2006 and claims to be the most accurate at price estimates, called ‘Zestimates” though there are lots of claims otherwise.
The Bottom Line About Home-Buying Apps
As you can see, if you’re ready to break up with your landlord, calculate what down payment you can afford and start your journey to home ownership, you have plenty of house-hunting apps to take advantage of.
Along with all the other details involved in this adventure, it may take some trial and error to find the app that hones in on your specific house-hunting search criteria. But it’s worth spending the time if it helps you get everything you want in your first home.
Contributor Tiffany Beyer is a social media coordinator and marketer specializing based in St. Petersburg, Florida. She specializes in real estate and lifestyle issues stories. Freelancer Kent McDill contributed to this post.