If you visit personal finance or investing blogs on a regular basis, you’ve probably read countless articles on the virtues of passive income. After all, many personal finance experts believe that passive income is the key to early retirement, financial independence, and permanent wealth. But, what is it exactly?
A Definition:
Investopedia describes passive income as “earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.”
In addition to rental property, typical sources of passive income can include money earned from investments such as mutual funds, dividend-paying stocks, Real Estate Investment Trusts (REITs), and asset-backed securities. Unconventional forms of passive income can include earnings from copyrights, patents, and licenses or even royalties. The birth of the Internet also created a generation of entrepreneurs forging their own path toward passive income via the Internet, including Pat Flynn from Smart Passive Income. Except, according to Flynn, blogging is just part of the game.
“Although a blog isn’t passive in nature, it’s one of the best platforms for launching other passive income opportunities.“
-Pat Flynn
Simply put, passive income is the opposite of active income. The money you earn at your 9-to-5 job is not passive income, nor is the money you earn through your side hustle or garage sale. Real passive income is earned in your sleep and regardless of the amount of effort you put into it. And that’s why the idea of passive income has always been so popular. J.D. even wrote about passive income back in 2006, which seems like a lifetime ago.
“Passive Income is money that you earn without having to work for it. When you earn interest on a savings account, you are earning money passively; it accrues whether you’re working or not.”
-J.D. Roth
The pursuit of passive income through rental property: Is it the right time?
One of the most popular ways to generate passive income is to buy (or finance) an income-producing rental property and become a landlord. And, according to a recent study from the Joint Center for Housing Studies at Harvard University, now may be the perfect time.
According to Harvard researchers, the percentage of households that rent is on the rise, up from 31 percent in 2004 to 35 percent in 2012. That may not sound like a giant surge, but it is when you’re dealing with the entire population of the United States. To keep things in perspective, the Harvard study claims that the total number of renting households surpassed 43 million in 2013.
Researchers blame the increase in renters on a convergence of factors, including a record number of foreclosures in 2008 and economic troubles caused by the Great Recession. However, it also points to certain benefits that make renting a popular option. Some of the benefits of renting named in the study: greater mobility, protection from fluctuations in the housing market, and freedom from home maintenance and repairs.
The fact is, renting has simply become the best option for many. In fact, recent reports show that rents have skyrocketed in many parts of the country due to increased demand, so much so that the cost of renting has moved out of reach for many middle-class families. And while that’s bad news for those who simply want an affordable place to call home, it’s a real estate investor’s dream.
My Experience as a Landlord
Becoming a landlord might sound tempting, but — trust me — it’s not as glamorous as it seems. It’s also not nearly as passive as many think it to be, despite what Investopedia or others claim. As someone who has owned and managed two single-family rental properties for almost a decade, I must confess that the income I’ve earned has been anything but effortless. The truth: It’s actually been a lot of work.
For example, we’ve spent far too many weekends painting and cleaning our properties in between tenants. We’ve driven to and arranged countless meetings to discuss remodeling projects and repairs. We’ve had to deal with a whole host of random issues such as late rent payments, feuding neighbors, and secret pets. Once, one of our properties was even left in total shambles — with oil-stained carpet, missing doors, busted windows, and broken everything.
Using Passive Income for Early Retirement and Financial Independence
On the other hand, we do expect all of our hard work to pay off sooner or later. The fact is, both of our properties should be completely paid off in about 12 years. By then, we’ll be 46 years old and (hopefully) on the homestretch of our journey to retirement. Since we’ll have two children nearing college around that time, we plan to use our monthly rental income to help pay for their higher education. After that, we’ll keep it for ourselves and use the earnings to supplement our own income and early retirement plans. Our properties currently rent for around $1,800 total, but that’s only because I’ve promised not to raise rent on either of our long-term tenants. But they’ll move out eventually. And when they do, we hope to pull in at least $2,200 per month or more.
Want to Become a Landlord? Consider This
Since real estate markets are vastly different in different parts of the country, I couldn’t possibly write something that applies to everyone. On the other hand, if you’re considering purchasing an income-producing property to secure your own stream of passive income, there are certain things you should know:
You need plenty of cash — Banks have tightened lending standards significantly over the last decade, which means that a down payment of at least 20 percent is almost always required. If you can’t afford to come up with the down payment, then you probably can’t afford to own rental property in the first place.
You are taking a risk — Many people think owning rental property is always a money-making endeavor. However, that couldn’t be further from the truth. Investing in rental property has plenty of risks including nonpayment, property damage, prolonged vacancies, and more.
Bad things do happen — When you’re a landlord, “no news” is typically good news. However, there’s a reason why so many people are hesitant to get into the game. We’ve all heard rental horror stories and the fact is that many of them are true. You’d be amazed at the kind of damage people can leave behind, and how much of a headache it can cause. You know the saying, “Hope for the best, but prepare for the worst.”
Before you jump in head first, it’s important to understand what you’re getting into. That typically means researching the rental market in your area and gaining an understanding of current and past trends in rents and occupancy.
It’s also important to figure out what you need to earn in order to cover your expenses and turn a profit. And if you don’t like dealing with people or doing repairs, you can also research property managers in your area. For a monthly fee, they’ll do most of the heavy lifting for you — including finding tenants, hiring out repairs, and more.
Becoming a landlord isn’t for everyone, but it is a great way to earn (somewhat) passive income. And if early retirement, money for college, or financial independence are your goals, it’s just another way to make them happen.
Have you ever considered buying rental properties as a source of passive income? If so, why? If not, why not?
Mortgage demand remained relatively flat last week amid volatility in mortgage rates in recent weeks.
The market composite index, a measure of mortgage loan application volume, rose a marginal 0.2% for the week ending August 5, according to the Mortgage Bankers Association (MBA). The market index is down 62% compared to the same week in 2021.
The refinance index rose 4% from the previous week while the purchase index fell 1% in the same period. Mortgage demand remains weak compared to a year ago. The refi index fell 82% from the same week in 2021 and the purchase index was down 18.6%, according to the MBA.
“Mortgage applications were relatively flat, with a decline in purchase activity offset by an increase in refinance applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Despite mortgage rates on a downward trend following the Federal Reserve’s rate hike of 75 basis points on July 27, a cooling of the housing market is expected. Purchase mortgage rates dropped to below 5% last week, according to Freddie Mac, marking three consecutive weeks of decline. Leading up to the Fed’s July meeting, rates were on a roller coaster shooting back up to 5.50% in mid-July after falling to 5.3% earlier that month.
“The purchase market continues to experience a slowdown, despite the strong job market,” said Kan. “Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy.”
Cracking the code on marketing to the realtor channel
As lenders adapt to a purchase-centered market, HousingWire spoke to Brian Boero, CEO of 1000watt, about opportunities to grow lenders’ effectiveness in the real estate agent and broker market.
Presented by: 1000watt
MBA’s estimate shows rates rising. The average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) rose to 5.47%, from the previous week’s 5.45%. Jumbo mortgage loans (greater than $647,200) increased to 5.09% from 5.06% in the same period.
The MBA data shows the refinance share of all mortgage activity rose to 32% from the previous week’s 30.8% of total applications this week.
The Federal Housing Administration’s (FHA) share of total applications increased to 12.1% from the previous week’s 11.9%. The Veterans Affairs’s (V.A.) share of applications also rose marginally to 10.9%, from 10.8% and the United States Department of Agriculture’s (USDA) share held steady at 0.6%.
The share of adjustable-rate mortgages (ARM) applications decreased to 7.4% of total applications. According to the MBA, the average interest rate for a 5/1 ARM increased to 4.6% from 4.55% a week prior.
The survey, conducted weekly since 1990, covers 75% of all U.S. retail, residential mortgage applications.
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Okay, you are reading this because you are overwhelmed with the fact that your kids have everything (or the kids you want to buy gifts for).
That is a tough situation to be in.
In today’s society, kids are quick to get anything and everything they want. There are a million different reasons for that. But, that is the reality our society lives in. In fact, research proves overindulged kids may experience lifelong consequences.
So, what do you get for kids who have everything?
You have to really search and put some thought into finding an awesome gift – even better a gift that is not a toy.
Maybe it is the year to consider a no gift Christmas?
Kids who have everything may seem like they have it all, but there are still gifts that will surprise and delight them.
Let’s dig into these cool gifts for kids who have everything.
What do you get a kid who has everything?
You need an off-the-wall gift that is out of this world.
In order to hit a grand slam, you must really know the kid you are purchasing a gift for.
And honestly, most of the best gifts are gifts of time – specifically experience gift ideas.
What to get a kid that’s not a toy?
If you are looking for non-toy gift ideas for kids, there are many options to choose from. You need to turn your mind off the traditional gift giving and think outside the box.
Great ideas include anything personalized, educational classes, sports gear, or experiences like ziplining.
Whatever you choose, the important thing is that it is something the child will enjoy and cherish.
Lifesaver Ideas to Turn To – The 4 Gift Rule
The 4 Gift Rule is a guideline to help you find the perfect gift for someone. It suggests that you should give something that the person needs, wants, or may not have already. Since we have determined that “something they want” is already taken care of, here are the other 3 gift rules to consider.
Something they need: Think about school, sports, and activities – what is it that they need? Do they play baseball and outgrown their catcher’s gear? Interested in robotics, but don’t have the computer subscriptions to keep learning? There are many unique options available as this is personalized to them.
Something to wear: Even if your child has a closet full of clothes, there are always new fashion trends and styles that come out each season. They may also need new shoes or accessories to go with their outfits.
Something to read: Books make great gifts for kids of all ages. If your child is into sports, you can get them a biography of their favorite player. If they’re into history, look for a book about a topic they’re interested in. Right now, graphic novels are the big hit!
Whether you’re looking for a unique gift for a loved one, or need some helpful ideas for yourself, check out some of these amazing options.
Need Creative Gifts?
Here are the best places to find creative gifts.
If you’re looking for creative gifts, turn to Etsy! It offers a wide selection of handmade and vintage items that will surely provide hours of fun.
Need something quick, check out these Amazon gift guides.
Unique Gift Ideas for Kids and teens – Specifically Gifts for Kids who Have Everything
Everyone loves gifts, and kids are no exception.
However, when you are on the hunt for cool presents to buy your child that they won’t get tired of playing with or using over and over again, you may find yourself coming up short.
This is where we come in!
We have compiled a list of 35 cool gifts for kids who already have everything or are just too young to know what they want.
These gifts are sure to make your shopping experience a breeze and will keep you from having to hear the dreaded question, “What do I get them?”
Subscription
One option for a kid who seems to have everything is to get a subscription to their favorite magazine or TV show. This will keep them entertained and give them something new to look forward to each month or week.
Great options include Amazon kids or Kindle Unlimited.
Subscription Boxes
There are so many reasons why subscription boxes are so much fun. They are a way to try out new things without committing to anything. Plus, they come with a lot of great discounts.
You can also find boxes that are perfect for specific interests.
Kitchen Science Kit
The Kitchen Science Kit is a great gift for kids who love to know how things work and want to learn more. It comes with plenty of pieces that your child needs to start testing their experiments. This kit will help your child learn life skills like patience, organization, and creativity.
Coding Games
There are many great coding games that make excellent gifts for kids who have everything.
One option is the Bitsbox coding subscription box, which is designed for kids ages 6-12 and provides them with a variety of STEM education activities.
Another option is the Booleen Box, which is a computer building game that is perfect for kids who are interested in technology and engineering.
Both of these games are great ways to get kids interested in coding and help them develop important skills for the future.
Time Capsule
Time Capsules are a great way to preserve your memories and experiences. You can store anything in a time capsule, such as photos, articles, and notes.
The recipient can open the capsule in the future and experience the memories stored inside. Get your time capsule container!
Spa Day Kit
If you are looking for a unique and thoughtful gift for a child in your life, look no further than the Spa Day Kit. This kit includes everything a child needs for fun and relaxing spa day, including a bath bomb, nail polish, and hair treatment. The easy-to-use instructions make it perfect for kids of all ages, and the kit makes a great gift for moms on any occasion.
Scientific Explorer – My First Mind Blowing Science Kit
The Scientific Explorer My First Mind Blowing Science Kit is perfect for kids who are just starting to learn about the scientific method. This kit comes with a lot of different materials that help kids learn about science. It’s a great way for kids to learn about science and see how it works.
Customized Journal
Customized journals are a great way to show your personality and interests. You can choose the cover, the paper, and the layout of your journal. You can also add your own photos and drawings.
This will be something special that the child can use to document their thoughts and experiences. Pick your design on the customized journal here.
Customized Planner
There are a lot of different things that you can get a kid that doesn’t want toys. One idea is to give them a customized planner.
This will help them stay organized and be able to keep track of their school work, extracurricular activities, and social events. Design your customized planner here.
Lego Chain Reactions Kit
This is a great gift for kids who like to build and experiment. The portable craft studio is easy to carry and organized by item type and color group.
If your kids seem like they have outgrown Legos, check out Gravitrax! Hours of wonder and fun for preteens and teens!
ABC Mouse
The ABC Mouse is a great gift for kids of all ages.
It features age-appropriate games and activities, as well as family-friendly shows that kids can watch. You’ll have peace of mind knowing that your kids are engaged with awesome content when you give them the ABC Mouse.
Customized Jewelry
One option for a unique gift for a kid who has everything is customized jewelry. You can find stores that will let you personalize items like necklaces, bracelets, and earrings with the child’s name or initials. This makes the gift special and something they can treasure for years to come.
Amazon Glow
Amazon Glow is an interactive entertainment and video-calling system designed for children. A great way to keep in touch with grandparents.
It has a huge 19″ touchscreen that let’s kids be kids, and an interactive video call on a tablet or smartphone. Amazon Glow is designed for children to learn and play with each other, making it the perfect gift for your tech-savvy kid.
The service requires an Amazon Kids+ subscription, which automatically renews every month. For just $4.99 per month, you can give your child access to a wide variety of toys that they are sure to love.
Craft Supplies
When you give someone a craft supplies as a gift, you are giving them the opportunity to create something special. This could be anything from a new piece of jewelry to a painting.
Craft supplies are also a great way to show your appreciation for someone.
Gift Basket
Kids love to get gifts, but it can be hard to come up with something unique and special. If you’re looking for a gift that your child will love, you should consider building a gift basket.
This is a great way to combine different types of gifts, and it’s a fun way to spend some time together.
For example, my daughter got a princess-themed gift basket when she was little.
Non-toy gift idea for kids: Experiences
Experiences make great gifts for kids because they can be educational, fun, and memorable.
Some great ideas for experiences to give as gifts include museum visits, sporting events, Broadway shows, dinner at a fancy restaurant, science exhibits, art exhibits, theme parks, comedy clubs, acting classes, and dance classes.
Master Classes
Master Classes are a great way for kids to learn from the masters.
They provide a unique experience that can help kids learn about anything (almost). Master Classes can be a great gift for kids because they can help them learn new things and improve their skills.
I remember and treasure all of the master classes I took growing up.
Spa Experience for Kids
One way to give the gift of a spa day to kids is to buy some bath bombs, nail polish, and hair treatments. Another way is to set up a little home spa kit.
Finally, you can spend some quality time together and have fun!
Grab all of your spa experience supplies here.
Tickets to a favorite play or concert
One option is to get tickets to the child’s favorite play or concert.
This will give them an experience they will enjoy and remember for a long time.
Every time Imagine Dragons come to our city, I always hear the kids practicing their lyrics.
Tickets to Sporting Events
There are a lot of great sporting events happening throughout the year that your kid would love to attend.
Whether it’s a professional game or a college game, sporting events make for great memories. And tickets aren’t as expensive as you might think!
Head to the Theatre for a Broadway Show
Do you have a family member or friend who loves to go to the theatre?
Perhaps they’ve seen a show before and are always looking for something new to see. Head to the theatre for a Broadway show!
Broadway shows are often full of excitement and suspense. Your loved one will have a memorable time and you’ll get to go out with them!
A day of sleeping in
One idea is to give the child a day of sleeping in especially popular with middle schoolers and high schoolers.
This can be a great gift for kids who seem to have everything and are always on the go. It can also be a chance for parents to spend some time alone or with other siblings.
A day at a zoo
One idea is to give the child a day at the zoo. This can be an all-day experience or simply a visit to see the animals.
It can be fun and educational, and it’s something different that the child may not have done before.
Game Night
Kids love the game night! It’s a great way to bond with friends, have some fun, and learn new things. There is a lot of fun non-toy gifts you can give your kids for a game night that will make it even more enjoyable. Here are a few ideas to get you started:
Set up a board game or card game in your home and let the kids play with you.
If your child is a competitive type, give him or her an incentive to win by offering a small prize for the winner of each game. This will make the game night more exciting.
If you are playing a card game, make sure to have plenty of snacks and drinks on hand in case anyone gets thirsty or hungry while playing the game.
Check out the latest games on the market!
A day of cooking with a celebrity chef
One unique gift you could give to a kid who has everything is a day of cooking with a celebrity chef. The child will get to learn how to cook their favorite dishes from the best in the business, and they will get to eat their creations afterward.
Great for the aspiring chef!
Theme Park Excursion
If you’re looking for a unique gift for a kid who has everything, why not take them on a day trip to a theme park?
A day at a theme park could be a great non-toy gift idea for kids. Kids would love the chance to go on rides, explore the park, and enjoy the company of their friends. .
They’ll get to experience all the fun and excitement of a theme park while spending time with you (and their friends).
Splash at a water park
A day at the water park can be a great gift for kids who have everything. They will enjoy hours of fun in the sun and get to cool off in the water.
Plus, they will be able to play with their friends and make some new ones. Maybe even consider a season pass?
Flight Lessons
If you’re looking for a unique and cool gift for a kid who has everything, how about flying lessons?
There are many different programs that offer this experience, and it is sure to be something the child will never forget. They will get to fly in the cockpit of a private jet or airliner, and may even have the opportunity to take the controls!
They may even make a career choice out of this gift.
A day with a celebrity
Could you imagine if this kid got a chance to hang out with Dude Perfect or Ninja Kidz all day?!?!
They would be on cloud nine.
That would be one unique and cool gift for kids who have everything.
Course at a local college
One idea is to give the child a day of learning by taking him or her to a local college for a course of their choice.
This will allow the child to explore new interests and learn something new in a fun and stimulating environment.
There are plenty of classes to choose from.
Kid’s Choice Dinner
One great gift idea for kids is to give them a Visa Gift card. This way, they can “pay for dinner” and have a fun experience doing it.
Also, you could also give them a gift card to a grocery store so they can cook their own dinner. This would be especially beneficial if you teach them how to cook their own dinner as well.
A day of doing nothing
When it comes to finding a unique and interesting gift for a kid who has everything, sometimes the best option is to give them nothing at all.
A day of doing nothing can be just what they need to relax and enjoy their birthday or special occasion.
Can adults have this one too, please?!
Dinner at a Fancy Restaurant
A dinner at a fancy restaurant can be a great gift for kids.
Kids will love the experience of trying a different cuisine and sitting at a high-end table. Plus, spending a special night out with friends can be a memorable experience.
A day of service at a local charity
One option for a kid who has everything is to give them a day of service at a local charity.
This will allow the child to spend time giving back and helping those in need, which can be just as rewarding as any material gift.
In fact, this is why mission trips are so popular!
Some other fun experience gifts for kids include go-karting, theme parks, and escape rooms. These experiences are exciting and new, and they’re something that the kids can enjoy together.
The Ultimate Gift Idea for Kids: Cold Hard Cash
Giving cash as a gift is a good idea because it is a tangible gift that can be used immediately.
It is also a great way to avoid any possible clash of interests with the child who might receive the gift. Cash is a low-key way to show your appreciation for the child, and it is also a way to avoid feeling obligated to give a gift.
Also, it helps kids to realize the value of money and how to manage it. Those life lessons might be well worth it!
Or a Gift Card
When you don’t know what to get a kid who seemingly has everything, a gift card is always a safe option.
With so many different stores and places to spend them, gift cards let the child choose what they really want. This way, you know they’ll be happy with their present.
Unique Fun Toys or Eyes to See the World?
Now, you have a decision to make…
Will you go with: unique fun toys or experiences? The choice is yours.
Just remember… one will leave a longer impact on the recipient than the other. That is why many families are opting for Christmas experiences over traditional gifts.
Which Creative Gifts Will You Get?
If you have a child that seems to have everything, it can be hard to know what to get them for gifts. However, there are still some great options out there.
It is proven that experiences bring more happiness than traditional gifts, so why not lean to towards those ideas.
There’s no need to spend a fortune on a gift for a kid who has everything. With a little bit of creativity, you can find a gift that will be sure to put a smile on everyone’s face.
Review our list and see what takes your fancy!
If you’re looking for a gift for a young person who has everything, our list of 35 cool gifts is sure to have something for everyone. From non-toys to clothing ideas, there’s something for everyone on this list.
So, what are you waiting for? Get shopping!
You probably need inexpensive gifts for the woman who has everything, right?
Need More Christmas Gift ideas?
Know someone else that needs this, too? Then, please share!!
Editor’s note: This is a recurring post, regularly updated with new information.
American Express, Capital One, Chase and Citi are four of the major players in the travel credit card space. As such, these issuers offer their own travel portals, where users can earn and redeem their points and miles for flights, hotels, car rentals and more.
These issuers also incentivize their cardholders to use the bank’s own portal, done by offering bonus points on bookings.
For instance, with the Capital One Venture X Rewards Credit Card, you’ll earn 10 miles per dollar on hotel and car rentals and 5 miles per dollar on flights — but only when booked through the Capital One Travel portal. Purchases made outside the portal earn 2 miles per dollar.
Likewise, with the Chase Sapphire Preferred Card, you’ll earn 5 points per dollar on all travel booked through the Ultimate Rewards portal. Otherwise, you earn 2 points per dollar on those travel purchases.
Given the lucrative earning potential that booking through these portals presents, it begs the question: Is it worth your time to use them rather than booking directly?
In this guide, we put these four travel portals to the test when booking flights. We compared price, ease of use, redemption value and other metrics.
Methodology
For this analysis, we limited our research to flights and didn’t include hotels, rental cars or other travel. That’s because we generally recommend that you avoid booking hotels through a third party since you likely won’t receive elite-status benefits (if you have any) or earn elite-qualifying stay credits.
If you’re not concerned with earning hotel elite status or are booking an independent hotel, then booking your stay through a travel portal could be advantageous for you.
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It’s also worth noting that you can get elite-like perks at hotels, even without elite status, by booking with these programs: Amex’s Fine Hotels + Resorts, Amex’s The Hotel Collection, Capital One’s Premier Collection, Chase’s Luxury Hotel & Resort Collection, Citi’s Hotel Collection and Citi’s Luxury Hotel Collection.
With flights, you may be able to “double-dip” your earnings: You can usually earn bonus points on bookings through your card issuer’s portal and earn airline and elite-qualifying miles just as you would by booking directly through the airline. That said, here are the features we examined in each portal:
Results: Do you get comprehensive results when searching through the portal?
Price: How do the prices compare to booking directly with an airline versus through a portal?
Ease of use: Is navigating the portal easy for a user? What unique features or benefits do users get from using this portal?
Redemption value: Is it worth redeeming your points and miles for travel through a portal?
With these four factors in mind, here’s how the individual issuers’ travel portals stack up.
American Express Travel portal
Any American Express card that earns Membership Rewards points grants access to the Amex Travel portal. Depending on your specific card, you may earn bonus points for booking through the portal.
The Platinum Card® from American Express, for instance, earns 5 points per dollar on flights booked directly with airlines or through Amex Travel (on up to $500,000 of these purchases annually, then 1 point per dollar) and 5 points per dollar on prepaid hotel bookings made through Amex Travel. The American Express® Gold Card, meanwhile, earns 3 points per dollar on flights booked directly with airlines or through Amex Travel.
You can search for flights, hotels, flight and hotel packages, rental cars and cruises on the Amex portal.
Related: Everything you need to know about Amex Travel
Capital One travel portal
The Capital One travel portal offers a fresh interface powered by the travel tech app Hopper and is accessible with most credit cards earning Capital One miles or cash back.
Bonus earnings are available, depending on which card you have. Using the Capital One Venture X Rewards Credit Card to book flights in the portal provides 5 miles per dollar; flights booked elsewhere earn 2 miles per dollar.
Currently, you can only book flights, hotels and rental cars through the portal. The portal also houses the Premier Collection for luxury hotels. However, this is only accessible if you have the Venture X or its counterpart, the Capital One Venture X Business card.
The information for the Venture X Business card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Related: How to use the Capital One travel portal — now with more cards and new rewards
Chase Ultimate Rewards travel portal
Chase’s Ultimate Rewards travel portal was powered by Expedia for many years, but the issuer migrated to cxLoyalty in 2021.
You can access the portal with your Ultimate Rewards-earning credit card, including popular options like the Chase Sapphire Reserve, the Chase Sapphire Preferred or the Chase Freedom Unlimited. Cardholders can book flights, hotels, cars, activities and cruises on the Chase travel portal.
Related: Why are some flights more expensive through the Chase travel portal?
Citi travel portal
The overhauled Citi travel portal launched in March 2023 after months of delays. It’s powered by Rocket Travel by Agoda, part of the Booking.com family.
You can access the portal with any credit card earning ThankYou points, and several cards earn bonus points on bookings in the portal. Unfortunately, flights aren’t included in these bonus offerings.
With Citi’s new portal, you can book flights, hotels, rental cars and attractions of numerous types. The portal also offers two hotel programs: Hotel Collection and Luxury Collection.
Related: Ultimate guide to the Citi travel portal
Booking flights
I looked at a variety of round-trip routes with the same dates (roughly six months from now) and gathered the following prices:
Itinerary
Booked directly
Amex Travel
Capital One Travel
Chase travel
Citi Travel
New York (JFK) to Los Angeles (LAX) in economy with Delta Air Lines.
$533.
$541.
$540.
$523.
$540.
Tampa (TPA) to Bozeman (BZN) in economy with American Airlines.
$786.
$786.
$786.
$786.
$786.
Baltimore (BWI) to Las Vegas (LAS) in economy with Delta Air Lines.
$720.
$720.
$720.
$720.
$720.
Miami (MIA) to Boston (BOS) in economy with JetBlue.
$418.
$418.
$338.
$418.
$412.
Chicago (ORD) to Milan (MXP) in economy with United Airlines.
$902.
$902.
$902.
$772.
$732.
Nashville (BNA) to Bogotá, Colombia (BOG) in economy with American Airlines.
$535.
$535.
$535.
$535.
$415.
Toronto (YYZ) to Seoul (ICN) in economy with Air Canada.
$1,079.
$1,952.
$1,880.
$ 2,581.
$1,952.
New York (JFK) to Los Angeles (LAX) in Delta One.
$2,798.
$2,600.
$2,798.
$2,798.
Not available.
Newark (EWR) to London (LHR) in business with British Airways.
$3,272.
$3,272.
$3,300.
$3,300.
$3,300.
San Francisco (SFO) to Singapore (SIN) in business with Singapore Airlines.
$8,351.
$7,285.
$8,521.
$9,386.
$8,521.
Price
All of the travel portals generally fared well when it came to searching economy flights versus booking directly. However, there were a few major caveats worth noting.
Southwest Airlines is not bookable on any of the portals, and tickets for low-cost airlines like Spirit Airlines and Frontier are typically more expensive on the Chase and Capital One travel portals than booking directly. Amex Travel didn’t display any Spirit Airways or Frontier Airlines flights.
When it came to international flights, all of the bank portals struggled at times to match prices or give comparable results versus booking directly. For a deeper dive on some of these routes and flight prices, we did a broader comparison across 20 flights in this guide.
As a general word of advice, domestic flights should yield the same results and price, but it gets tricky when searching for international fares. Your best bet would be to compare the prices and only use a portal when the prices are identical.
Ease of use
The Amex portal is my favorite for a comprehensible search experience, fast load times for results and the simplicity of parsing through the various options.
On the other hand, the Capital One portal offers one of the most visually appealing interfaces, with color-coded dates to indicate the lowest prices in a calendar view — plus price drop protection. However, the Capital One portal did not provide as many options as its competitors on some searches. It also yielded higher prices for international routes, but I’m hopeful that the issuer will continue to make improvements in the future.
Based on millions of data points from Hopper, Capital One is supposed to let you know if this is the best time to book via its price watch prediction feature.
To standardize the offerings across various airlines, Capital One also provides detailed insights into what flyers can expect from their chosen fare class. With the rise of “basic economy” fares, it’s not always clear what amenities are included in your ticket and what you’ll have to pay for as extras.
Capital One does an excellent job of explaining in-depth features such as seat pitch, aircraft type, and food and beverage options on board.
Speaking of basic economy, it’s worth noting Amex Travel rarely (if ever) displays these fares. If you’re looking for basic economy, you should use another portal.
Citi’s new portal does a good job of offering a broad range of results in economy and offering upgrades on the payment page. And being able to book flights plus other travel elements in one transaction is great. However, searching directly for business-class fares is tricky on this portal.
Finally, the Chase portal has seen vast improvements since fully migrating toward its cxLoyalty interface. Previously, when Chase was powered by Expedia, users complained about slow load times and much higher prices than those offered directly by the airlines. Some of those issues seem to have been resolved.
While the Ultimate Rewards portal could use some work in cleaning up the interface, the overall user experience is much better than before. That said, it’s also the portal with the highest frequency of price divergence from booking directly — sometimes higher and sometimes lower.
Redemption value
This is not a criterion we used for evaluating these bank travel portals for this particular article. The value of your points or miles can depend on which particular rewards card you carry. Still, it is worth remembering if you intend to use your credit card’s travel portal to earn or redeem points and miles.
Your credit card points or miles are typically worth 1 cent each for flights in your respective travel portal. That’s the case with Amex cards that earn Membership Rewards points and Capital One credit cards. Even with the Capital One’s premium card (the Venture X), your points are only worth 1 cent each when redeemed for travel through the Capital One portal. The same applies to credit cards earning Citi ThankYou points.
On the other hand, Chase’s credit cardholders are incentivized to use the Ultimate Rewards portal via a higher redemption value. With the Chase Sapphire Reserve, your points are worth 1.5 cents each toward travel bookings, while the Chase Sapphire Preferred and Ink Business Preferred Credit Card fetch 1.25 cents per point in value.
While not as consistent of a program, American Express offers “Insider Fares,” allowing cardholders to redeem their points for a better value than 1 cent apiece on select domestic and international itineraries. However, these can be quite specific.
Select Amex business credit cardholders can also leverage the Pay with Points benefit to get a 25% to 50% points rebate when booking select airfare through Amex Travel — yet another incentive to book through the portal.
Due to all these card-specific circumstances, we didn’t make redemption values a main criterion for judging these portals for booking flights. Rather, we focused on each portal’s user interface and the availability of competitive fares — as those two factors will probably be the determinants as to whether travelers end up using them.
Related: Why I love the Amex Business Platinum’s Pay With Points perk
Bottom line
Credit card issuers have improved their travel portals over the years, but they’re still far from perfect. While there isn’t a clear winner for the best travel portal, each has unique features and incentives for its cardholders.
If you decide to book a flight through your issuer’s travel portal, be sure to compare that price against booking directly with the airline to get the best deal possible. And don’t forget that you may want to book directly anyway to avoid any headaches down the road. If you need to change or cancel your airfare, booking with a third party can complicate matters when plans change.
By Evlin DuBose · Wednesday, 24 May 2023
· 8 min read
Fact Checked
Advertiser disclosure
Look, we’ve all had a moment wondering something bonkers, bizarre, random – you name it. And nothing can be more confusing than the wide world of property and home loans.
So let’s look at some of the silliest and awkwardly-phrased mortgage questions asked on Google, seriously answered by an expert writer.
How home loan works
Want buy house. Not enough money. What do? Ask bank nicely. Bank let you borrow money. If it think you good for it. Then you buy house. Or unit. Pay bank back. It take long time. You give bank extra money, too. This called interest. That how home loan works.
Other stuff too. Less important.
Is home loan same as mortgage
Sort of? Mostly? Yes. Ish. A home loan is the financial product banks and lenders offer. Your mortgage is a home loan that you are currently paying off.
However, finance writers will often use terms like “home loan borrowers” and “mortgage borrowers” interchangeably, since when you’re making repayments, a home loan and mortgage are functionally similar.
So yes, a home loan is basically the same as a mortgage. (Unless you’re pedantic and write about them for a living).
Is home loan interest tax deductible in Australia
Yes! If you’re a property investor in Australia, you can claim the interest from your home loan on your taxes. In fact, landlords get a whole bunch of tax perks. Lucky them!
(Just make sure you talk to a tax expert before filing).
How is home loan interest calculated
Good question! Home loan interest is calculated and compounded daily. Your monthly mortgage repayment therefore incorporates interest from the last 30 – 31 days.
This is actually why making more frequent home loan repayments can sometimes save you interest in the long run. By shortening the number of days included in your repayment (fourteen instead of thirty) while keeping your principal in consistent chunks, you can pay off your mortgage faster with less interest over time.
However, this hack will depend on how your lender calculates a fortnightly vs. monthly payment size. If your fortnightly repayments pay less than half of the principal amount you would in a monthly repayment, it actually slows down how fast you pay off your mortgage. (Math involved, but that’s how the sausage sizzles).
Does home loan include GST
GST, or the “Goods and Services Tax”, is a government charge applied to most transactions in Australia. From lattes to Uber, most things you buy will have GST built into the final price. Financial services and bank products, however, do not include GST – therefore, neither will your home loan.
But: this doesn’t mean buying a home is tax-free. When you first purchase a property, you may have to pay stamp duty or an annual land tax. Later when you sell your home, you may also have to pay capital gains tax.
Always seek help from a tax professional and financial advisor.
Home loan spouse has bad credit
Ruh-roh. Spouse buy too many things on Amazon. Maybe get screwed with BNPL. Whoops. Work on credit score together. (But don’t control their money – that financial abuse).
Also. Could apply for home loan as just you? Think about joint tenancy vs. tenancy in common. Talk to financial planner.
Remember: team work make dream work.
Do home loans look at TransUnion or Equifax
TransUnion and Equifax are credit score reporting bodies, along with Experian and Illion. Whenever you apply for a home loan, lenders will run a credit check to assess your risk as a borrower. If your credit score isn’t good, they may reject your application.
Equifax, Experian, and Illion are the main credit bureaus in Australia, so your lender may check with one, two, or all of them when assessing your borrowing power.
Before applying for a home loan, send for a free credit report from one or more of these agencies so that you can see your score for yourself. Not happy with your results? Give your application a boost by improving your credit score.
Can mortgage be paid with credit card
NO! Technically, yes – but don’t do this! BAD IDEA. A credit card may buy things in the short term (and have more money on it than your debit card), but you’ll still have to pay it back with interest – and the interest rates on credit cards are much, much steeper than those on home loans.
By using a credit card to make mortgage repayments, you’re doubling down on the interest you’re paying overall. This could also potentially hurt your credit score and ability to refinance, because if you miss either a mortgage payment or a credit card payment, it goes down on your credit report.
If you’re really struggling with your mortgage repayments, talk to your lender. You may be able to negotiate a lower interest rate and work out a repayment plan that works best for your situation.
Recent law changes also mean that it’s far, far better for your credit score to declare financial hardship than skip payments altogether. You actually get rewarded for asking for help. Huzzah!
Just whatever you do: don’t put your home loan on credit.
Can I pay an auction deposit with a credit card
NOOOO! If you’re paying a housing deposit at auction, do not put it on your credit card. Not only will vendors not accept this as a valid form of payment, but putting a deposit on your credit card defeats the whole purpose of a deposit.
A deposit is a down payment: your home loan will cover the remaining cost of the property. Your deposit is therefore the only part of your home loan you don’t pay interest on (besides money in your offset account). By using your credit card, you create interest on the only interest-free part of your loan – and at a much steeper rate than mortgage interest.
Bad idea. BAD. No. Don’t put your home loan on credit.
Is mortgage a liability or an asset
A financial liability is something that drains your finances, such as debt, while an asset is something that improves or holds your wealth. A mortgage is therefore a liability, because it is a kind of debt.
However, the property you own, i.e. your equity, is an asset, since it can provide a source of wealth and security. Your equity can be unlocked to do many things for you, like refinance your mortgage or finance another property.
Does mortgage cover stamp duty
Stamp duty is a government charge for transferring property from one owner to another. For those who have to pay it, stamp duty can cost tens of thousands of dollars.
Your mortgage, however, won’t cover stamp duty, so when budgeting to buy a home, you’ll need to factor it in as an extra cost, on top of any conveyancing, agent, settlement, and valuation fees.
Does mortgage mean death grip
Fun fact: sort of! The word “mortgage” comes from the Old French mort + gage, meaning “death” and “pledge”. In mediaeval times, land that was mortgaged was fully pledged to the lender until the borrower fully paid it off or was dead.
So, same as today – basically.
Whose property am I on
Depends, but the safest answer is, “Whoever owns it.” Not sure who owns it? Follow this handy flowchart.
Have interest rates gone up
Yes – due to high inflation, the Reserve Bank of Australia has tightened its monetary policy and made 3.75% worth of increases to the official cash rate since May 2022, which in turn drives up the interest rates on home loans, term deposits, and savings accounts.
Do interest rates rise in a recession
No, interest rates do not rise during a recession. In fact, the opposite is true. Whenever the economy enters a recession, the central bank will cut interest rates to encourage people to spend money.
As a result, home loan interest rates will fall, making financing a property cheaper, while savings accounts and term deposits won’t be as attractive, so people will be less inclined to park their money.
Interest rates rise whenever there is high inflation, and high inflation is not the same thing as a recession. High inflation (usually) means demand is out of control and consumers are driving up prices, thus raising the cost of living.
To discourage spending, the central bank will raise interest rates, therefore making savings accounts a better place to stash cash while mortgage repayments become more expensive.
Who owns the Reserve Bank of Australia
Australia.
Can you bank with the Reserve Bank of Australia
No. The Reserve Bank of Australia, also known as the RBA, is a central bank in charge of monitoring the Australian economy and setting Australia’s monetary policy. Unless you are the Australian government, the RBA cannot manage your finances.
If you are in the market for a new bank, however, you can compare bank accounts using our hub page.
Will housing prices drop
While the housing market may experience temporary dips and falls, studies show that long-term, property prices will always rise. This is primarily due to inflation, but increased competition doesn’t help, either.
Hurray…
How buy first home
Try government help. Move away from big city. Maybe buy unit instead? Cry. But no give up.
In all seriousness, first home buying can be a daunting task, but there are still plenty of ways to break into the housing market – even with the odds stacked against you.
You’ll need to navigate the hurdle of rising interest rates, outrageous prices, and the cost of living, but with careful planning and research, these can all be managed.
For more information on how to get started, head over to our first home buyer hub.
LVR what? LMI who? Learn home loan terms with our handy glossary.
Compare low-interest rate offers in the table below.
Compare low interest rate home loans – last updated 27 May 2023
Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
Featured Product
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment
4.99% p.a.variable
4.90% p.a.
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
Compare
Compare
Details Close
Unloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
interest rate
4.99% p.a.variable
comparison rate
4.90% p.a.
interest rate
4.99% p.a.variable
comparison rate
4.90% p.a.
Upfront fees
$0
Ongoing fees
$0.00
Discharge Fee
$0.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
no
Maximum loan to value ratio
80.00%
minimum borrowing amount
$10,000
maximum borrowing amount
$3,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Express Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
5.47% p.a.variable
5.62% p.a.
Get fast approval online in as little as one hour with the Bendigo Bank Express Home Loan. Available for new home loans only. Optional offset account to save even more. Flexible repayment options. 10% deposit required.
Compare
Compare
Details Close
Express Home Loan
Get fast approval online in as little as one hour with the Bendigo Bank Express Home Loan. Available for new home loans only. Optional offset account to save even more. Flexible repayment options. 10% deposit required.
interest rate
5.47% p.a.variable
comparison rate
5.62% p.a.
interest rate
5.47% p.a.variable
comparison rate
5.62% p.a.
Upfront fees
$384
Ongoing fees
$10.00 monthly
Discharge Fee
$350.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
yes
Maximum loan to value ratio
90.00%
minimum borrowing amount
$5,000
maximum borrowing amount
$3,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Own Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment
5.54% p.a.variable
5.79% p.a.
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
Compare
Compare
Details Close
Own Home Loan
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
interest rate
5.54% p.a.variable
comparison rate
5.79% p.a.
interest rate
5.54% p.a.variable
comparison rate
5.79% p.a.
Upfront fees
$250
Ongoing fees
$250.00 yearly
Discharge Fee
$300.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
yes
Maximum loan to value ratio
60.00%
minimum borrowing amount
–
maximum borrowing amount
–
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
5.54% p.a.variable
5.79% p.a.
Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.
Compare
Compare
Details Close
Offset Home Loan
Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.
interest rate
5.54% p.a.variable
comparison rate
5.79% p.a.
interest rate
5.54% p.a.variable
comparison rate
5.79% p.a.
Upfront fees
$350
Ongoing fees
$248.00 yearly
Discharge Fee
$400.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
yes
Maximum loan to value ratio
60.00%
minimum borrowing amount
$150,000
maximum borrowing amount
$10,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Monthly
Special Offers
–
Solar Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment
5.39% p.a.variable for 60 months and then 6.23% p.a.variable
5.98% p.a.
Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.
Compare
Compare
Details Close
Solar Home Loan
Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.
interest rate
5.39% p.a.variable for 60 months and then 6.23% p.a.variable
comparison rate
5.98% p.a.
interest rate
5.39% p.a.variable for 60 months and then 6.23% p.a.variable
comparison rate
5.98% p.a.
Upfront fees
$530
Ongoing fees
$0.00
Discharge Fee
$300.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
yes
Maximum loan to value ratio
90.00%
minimum borrowing amount
$50,000
maximum borrowing amount
$1,500,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
*
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
**
Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
^See information about the Mozo Experts Choice Home Loan Awards
Mozo provides general product information. We don’t consider your personal objectives, financial situation or needs and we aren’t recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don’t cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
Arts, athletics and so much more are all at your fingertips in Ohio’s best college towns.
Ohio has become a magnet for young minds seeking a top-notch higher education experience. With a plethora of colleges and universities peppered throughout the state, it’s no wonder that Ohio has nurtured some of the most vibrant and diverse college towns in the country.
Nestled in the rolling hills of southeastern Ohio, Athens is home to Ohio University, one of the oldest public institutions of higher learning in the United States. The city’s picturesque setting is matched by its vibrant culture, with an eclectic array of shops, restaurants and bars lining the historic brick Court Street area, the town’s main artery.
Athens is also renowned for its music scene, which has spawned a number of notable acts like New Bomb Turks and Skeletonwitch. With its verdant parks, thriving arts community and the annual Halloween Block Party, Athens is a true gem among college towns in Ohio.
Dayton is a hub of innovation and creativity and home to the University of Dayton and Wright State University. This bustling city offers a thriving academic environment for students, while also boasting a rich aviation history as the birthplace of the Wright brothers. The National Museum of the United States Air Force and Carillon Historical Park are just a few of the attractions that add to the city’s unique charm.
A dynamic arts scene, bustling Oregon neighborhood and an array of restaurants and breweries make Dayton an enticing destination for students and visitors alike. Pro tip: be sure to hit Dewey’s Pizza just a few blocks off the UD campus.
Dayton is also located near Yellow Springs, which is home to legendary comedian Dave Chappelle. This small village is quickly emerging as one of the premier places for artists of all disciplines in the Midwest to call home.
Located in the southwest corner of Ohio, Oxford is a quintessential college town and home to Miami University. With its stunning Georgian architecture and tree-lined streets, the campus is often referred to as one of the most beautiful in the country.
Uptown Oxford, the historic heart of the city, offers a delightful mix of shops, eateries and galleries, which cater to the diverse tastes of students and locals. Outdoor enthusiasts will appreciate the abundance of parks and hiking trails in and around Oxford, while fans of college sports can cheer on the Miami RedHawks at various games throughout the year.
Columbus is a city brimming with energy and excitement, making it an ideal location for college students. As the home of The Ohio State University, one of the largest and most respected public institutions in the country, Columbus offers an unparalleled blend of academic rigor and vibrant city life.
Students and visitors can explore the trendy Short North Arts District, catch a concert at the Nationwide Arena, or peruse the shops and cafes of the historic German Village. The annual Ohio State Fair and the beloved Buckeyes football team only add to the city’s allure.
Nestled along the banks of the Ohio River, Cincinnati is a city steeped in history and culture, making it an exciting destination for college students. Home to the University of Cincinnati and Xavier University, the city offers a wealth of academic and social opportunities for students of all interests and persuasions.
The Over-the-Rhine neighborhood, known for its stunning 19th-century architecture, has transformed into an arts hub, dining destination and entertainment anchor, while the banks of the river have picturesque parks and riverboat cruises. Sports fans can catch a Reds baseball game at the Great American Ball Park, or cheer on the Bengals at Paycor Stadium.
Gambier, a small village in central Ohio, is the idyllic home to Kenyon College, one of the nation’s most prestigious liberal arts institutions. With its beautiful, Gothic-inspired campus and close-knit community, Gambier is a serene and intellectually stimulating environment for students.
The village’s quaint downtown area, featuring the iconic Middle Path, is lined with charming boutiques, cafes and an iconic independent bookstore, providing a perfect setting for leisurely strolls and study breaks. The nearby Kokosing Gap Trail, a 14-mile recreational path, offers opportunities for biking, walking and enjoying the picturesque Ohio countryside, making Gambier a true haven for those seeking a peaceful college town experience.
Located in central Ohio, Granville is the picturesque home of Denison University, a top-rated liberal arts college. This charming New England-style village offers a warm and welcoming atmosphere for students of all walks of life, with its tree-lined streets and historic architecture.
The downtown area, centered around the village green, boasts a variety of shops, restaurants and galleries, perfect for students looking to unwind after a long day in the classroom. Nearby, the Dawes Arboretum and the Bryn Du Mansion provide beautiful outdoor settings for relaxation and exploration. With its strong sense of community and commitment to the arts, Granville stands out among the best college towns in Ohio as a place where both students and visitors can feel at home from the moment they set foot in the city.
Cleveland is an exciting destination for students attending Case Western Reserve University and Cleveland State University. Known for its rich industrial history and vibrant arts scene, Cleveland offers a wealth of cultural and recreational opportunities for students with a wide range of interests.
The city’s renowned Rock and Roll Hall of Fame and the West Side Market are just a few of the attractions that make Cleveland an enticing destination for college students. In addition, the city’s booming craft beer scene (be sure to check out Noble Beast Brewing Co.), dynamic neighborhoods, like Tremont and Ohio City, and professional sports teams ensure that there is always something happening in this lively Midwestern metropolis.
Located in the northwest part of the state, Bowling Green is home to Bowling Green State University. This vibrant college town offers a wealth of activities for students and visitors, including a thriving downtown area with shops, restaurants and ample entertainment options.
The city’s annual Black Swamp Arts Festival celebrates the local arts community by sowcasing a variety of visual, musical and culinary talents. In addition, the nearby Slippery Elm Trail and the Bowling Green Wind Farm provide unique outdoor experiences for outdoorsy types.
Known as the ‘Rubber Capital of the World,’ Akron is home to the University of Akron. This lively college town offers a wide range of cultural and recreational activities for students, from exploring the historic Stan Hywet Hall & Gardens to enjoying the bustling downtown area with its array of dining and entertainment options. The Akron Civic Theatre and the annual Akron Marathon are just a few of the attractions that contribute to the city’s vibrant atmosphere and keep college students around after receiving the cap and gown.
Up your quality of life in one of these Ohio college towns
The college towns in Ohio featured above offer a unique blend of academic excellence, rich culture and engaging social scenes. From bustling cities like Cleveland and Cincinnati to the serene and historic charm of Gambier and Granville, Ohio’s top college towns cater to a wide range of interests and lifestyles.
Whether you are a prospective student, a visitor passing through or simply looking to explore the rich tapestry of experiences these towns have to offer, there is no doubt that you will find something special somewhere in the Buckeye State.
When I worked in management consulting, one of my responsibilities was to help my company figure out ways to make money while we slept. As a consulting business, our revenue stream came from selling the hours of the people who worked at our company. But to grow our margins, we knew we had to scale our time. This is where I first learned about passive income — the Holy Grail of the business world.
Now that I’m in my 30s, I think a lot about how to direct my active streams of income into passive income opportunities. Here are some things I’ve learned about active and passive income in my wealth-building journey.
What’s Ahead:
What Is Active Income?
Active income is earned by trading your time for money. Most people at the beginning of their careers are focused solely on earning active income to make a living.
What Is Passive Income?
Passive income is earned from income-producing assets. Someone who has passive income is not trading their time for money. Instead, the assets they own produce income without much involvement from the owner of the asset.
With the rise of financial influencers and the FIRE movement, finding ways to earn passive income has become a popular topic in the personal finance community.
Is Any Income Truly ‘Passive’?
The idea of earning truly passive income sounds amazing, right? But what’s often not discussed about passive income is that unless you inherit passive income-producing assets, creating passive income streams actually requires a substantial amount of active work.
Famous American entrepreneur Gary Vaynerchuk has gone as far as to say that truly passive income doesn’t exist outside of passive public market investing and rental income.
I tend to agree with Gary that the term ‘passive’ income is something of a misnomer. Creating passive income is never truly passive; there is no free lunch when it comes to financial mobility!
But thinking of income in active and passive terms might nonetheless have some benefits for those who are assessing their current financial status and crafting their wealth-building strategy. For that reason, I’ll break down the broad differences between active and passive income streams, as well as the most prominent ways to generate active or passive income.
Pros & Cons of Active Income
Pros
Allows you to develop a specific skill or expertise consistently
May provide social interaction and camaraderie associated with a traditional worksite
Cons
Trades time for money
Takes time away from doing other things
Cannot scale income potential beyond time constraints
Can be taxed at high rates
Pros & Cons of Passive Income
Pros
Generates money while sleeping, vacationing, etc.
Frees up more time for recreational activities
Subject to potential tax deductions
Scales income potential beyond time constraints
Does not require physical presence at a work site
Cons
Often requires you to create active income first
Usually harder to create than active income
Types of Active Income
Salary and Wages
The most basic and obvious form of active income is the salary that you earn from a typical job. A salary is a fixed amount received for working a regular schedule like 9 to 5, Monday through Friday. While a salary is a consistent form of active income, it can be taken away at a moment’s notice due to layoffs or downsizing. Most people earn their living from this type of income.
Bonuses and Commissions
Bonuses and commissions are other forms of active income. This type of income is not fixed and can vary dramatically based on the type of work performed. Many jobs can have a bonus or commission element added to a base salary, while other jobs can be 100% commission based.
Real estate agents, commercial real estate sales professionals, and other types of salespeople tend to fall into this income category. 100% commission-based jobs tend to have higher earning potential compared to salaried positions. However, they are also highly competitive, and their profitability is subject to ups and downs based on the economy, seasonality, and other factors.
Read more: How to Become a Real Estate Agent
Consulting and Freelancing
Freelancing and consulting fees are other types of active income that can either make up 100% of one’s income or serve as a side hustle. Those with valuable skills in high demand are often able to build side businesses, selling their time for specific short-term projects or long-term contracts. As of August 2021, there are 57 million freelancers working in the U.S., with 10 million more considering freelancing.
Looking ahead, more and more businesses are noting they’re willing to hire freelancers to support their mission, growth, and revenue.
Being a freelancer or consultant requires an entrepreneurial spirit, as this type of work can be very inconsistent and requires building a strong brand/reputation. Some of the most popular types of freelance work include graphic design, software development, copywriting, and photography.
Read more: 35+ Side Hustle Ideas
Equity Compensation
Equity compensation is a type of bonus that is given out at public or private companies to senior individuals or particularly valuable employees. Different types of equity compensation include straight shares, stock options, and Restricted Stock Units (RSUs).
It’s not uncommon for equity compensation to make up most of an individual’s income. For example, in 2020, 85% of an average CEO’s income was stock-related compensation.
Capital Gains
Buying and selling certain types of assets, like stocks and real estate, can generate capital gains if the asset’s sale price was higher than its original purchase price. For example, you might buy shares in a company while its stock price is low and then sell those shares later after the stock’s price has increased. The difference between the price you paid and the price you sold at is a capital gain.
Generating capital gains as a means of consistent income requires a significant amount of work, expertise, and risk-taking. Capital gains also have different tax treatments depending on how and when they are generated.
Read more: Claiming Capital Gains and Losses
Renting Out Property
Listing your property on sites like Airbnb can help you earn active income. While listing your property for rent may not require a significant investment of time and energy upfront, it’s not a set-it-and-forget-it income source.
Actively managing your listings, communicating with renters, and maintaining your property certainly requires active effort (unless you have a property manager).
Old Goods and Furniture Flipping
I’ve seen lots of people recently on TikTok and Instagram building side businesses by taking old or broken furniture, refurbishing it, and selling it for a profit. If you are handy and have an eye for design, this can be a great way of making active income given the low startup costs.
In addition to making money from selling the furniture, after you’ve built an audience you can sign brand partners and feature their products on your social media pages to generate even more income. Lastly, this type of business is a great way to help recycle old products that would have otherwise been thrown out.
Types of Passive Income
Interest and Dividends
Interest from your savings can be generated from high-yield savings accounts or by investing in CDs or bonds.
Dividends are paid to the shareholders of public companies. Not all companies pay dividends and the amount of dividends paid varies significantly. While earning dividends is passive income, choosing the right investments that generate dividends is a very active and time-consuming process.
In my experience, those looking to earn dividends can typically expect returns of 1–5%.
Rental Income
You can earn passive income from real estate by investing in rental properties, commercial real estate, public real estate investment trusts, or real estate crowdfunding platforms. Income-generating real estate can also provide landlords with tax benefits by deducting depreciation costs, property management expenses, insurance, and other expenses.
But there’s always an active element of real estate investing, no matter what type of real estate you invest in. This includes property management, dealing with tenants, managing relationships with lenders or investors, ensuring upkeep, or simply picking the right real estate projects to invest in. Some forms of real estate investing can become so time consuming that many personal finance experts question if real estate investing can be considered passive at all.
Read more: How to Invest in Real Estate
Peer-to-Peer (P2P) Lending
Peer-to-peer lending has attracted investors looking for an alternative to persistently low interest rates on savings accounts and bond yields. With P2P loans, investors make unsecured personal loans to others and can earn high returns.
While P2P lending has exploded in popularity (check out Lending Club and Prosper), these investments are very risky. The loans are often not secured against collateral, are not FDIC insured, and money invested in P2P lending can be difficult to access in times of economic stress.
Digital Product, Online Course, or Community Development
Creating digital products, courses, or online communities can be one of the best ways to earn passive income if you can package your skills and knowledge and sell it to a group of customers. In today’s digital age, the costs of creating a course, digital product, or community have never been lower, and all you really need is a computer and some creativity.
While there are lots of instances of everyday people earning millions on their digital products, don’t forget that getting to that point likely required a lot of work. Keeping these types of products relevant and up to date after launch also requires time, effort, and attention, not to mention having to market your product and keep up community engagement.
If you are interested in starting something like this up, platforms like Thinkific, Teachable, and Patreon are all options to explore.
YouTube/TikTok Ad Revenue
I became fascinated by the prospect of earning money on YouTube after coming across financial influencer Graham Stephan. Earning money on YouTube or Tik Tok generally comes down to building your channel’s audience and monetizing content through ads or affiliate marketing links. Once your presence meets a critical mass, every video you create has the potential to become an income-generating asset.
On the surface, making money on YouTube seems amazing, but again, it takes a lot of work and dedication to get there. For example, Graham has mentioned having to post videos at least three times a week for several years to get traction. And it often takes audiences of tens of thousands or hundreds of thousands of followers to earn any money.
But there’s lots of potential to earn sizable passive income from YouTube after you build an audience. The average YouTuber can make $3 to $5 per 1,000 video views and the top YouTubers can make millions annually.
Final Thoughts
Passive income can be a great way to earn more while working a regular 9 to 5, or it could fully replace your current stream(s) of active income entirely.
When it comes to building real wealth, however, the discussion around active vs. passive income is more nuanced.
According to a five-year study of 233 wealthy individuals, a common thread between them was that self-made millionaires generated income from multiple sources. 65% of them had three streams of income, 45% had four streams of income, and 29% had five or more streams of income.
These figures suggest that when it comes to building wealth, it’s not just a question of prioritizing passive vs. active income. Rather, it’s about generating multiple streams of income and scaling your time.
Personally, I have four streams of income:
The income I make from my 9 to 5
Investment capital gains
Dividends
Freelancing work
You can leave it to your own creativity and aspirations to find what constellation of passive and active income streams works best for you. But remember, whether you are looking to create passive or active income, there is no free lunch, and any source of income that ultimately becomes passive will likely start as a highly active pursuit.
All right, let’s get this out of the way, right up front.
Dining alone in a restaurant is neither a shameful thing nor an experience to avoid.
Maybe you’ve had an experience like Jason Segel in “Forgetting Sarah Marshall.” Sometimes a server does make a fuss, but, really, most are happy you’re there — if you are happy to be there, yourself.
There’s an art to the solo dine. In the right frame of mind and with reasonable expectations, a solo diner can have a delicious experience.
It helps if you like to eat, of course.
These tidbits should help the reluctant learn from my own mistakes. Know thyself, dear diner, and feel free to enjoy a great meal, regardless of situational solitude!
[find-an-apartment]
Solo Dining 101 Ok, so the moment finds you hungry, sans social engagement. What to do?
Let’s start with a basic tenet: you’ve got to dispel any insecurity you might have about your right to eat alone.
American culture is a little crazy about food. As a result of what we’ve been taught, some of us feel self-conscious about enjoying eating, especially in public. But the fact is, we’ve all done it.
Confidence is key, here. If you find yourself wondering whether others in a restaurant are looking at you or judging your presence, remember they’re really more interested in the cannelloni.
Location, location, loca… Where you choose to sit in a restaurant has perhaps the greatest impact on whether you’ll enjoy your solo dining experience.
It’s up to you to share your seating preference: want to be situated in eaves-dropping distance of an interesting-looking group of folks? Prefer to pass the time in a more secluded area? Unless the joint is really jumping, any friendly establishment should be happy to accommodate your pleasant request.
Read the restaurant Ah, this is important. I like to know a little bit about a place before I go there, just so there are no unpleasant surprises.
When you know the details – like how much the food costs, or that there will likely be patrons dressed to the nines – you can adjust your expectations. I’m not saying you should feel compelled to conform, but know the general guidelines. The point of the solo dine is for you to enjoy yourself.
Your meal on mobile (or, the smartphone connection) Here’s a call: to eat while connected, or no?
A meal alone certainly gives you a chance to catch up on emails, fave websites, and memes you’ve yet to have the time to embrace. Or you might want to cherish a few moments to yourself, entirely disconnected from the grind.
When I’m feeling digitally social in these situations, I like to philosophize by text with a friend who likely won’t respond right away. (Do you have those, too?) I might describe the scene, the people, the food. It’s sort of like talking to myself in the presence of another, online. I’ll hear what my friend has to say later, but, for now, I just want to put my impressions out there — and I want to enjoy the food.
What if you want to be social? Just because you arrive alone to a hip eatery doesn’t necessarily mean you wish to stay that way. Again, it’s up to you to signal your intentions.
Your body language tells the tale about whether you want to engage with other diners. A seat taken at the bar is a reasonable give-away, too.
The Staff and the Solo Diner Servers are generally friendly to those dining alone; ones who are frustrated about the desire for a larger table (and tip) really only spite themselves, if they take these feelings out on the solo diner. I choose to be super-nice to servers, but I tip based on the bill and the quality of service received — generally no more merely because I happen to be eating alone.
Enjoying a food scene with friends is one of the great pleasures in life, but there’s no rule that says it’s the only way to experience a restaurant. Go ahead, muster up your courage: “table for one, please.”
I’ve recently decided to start a new series where I interview people who are doing extraordinary things with their lives. First up, I have JP Livingston, who retired at age 28 with a net worth of $2.25 million. And, her net worth is still increasing!
Of that total, 60% of her net worth came from saving, while 40% came from growing her money through investing. This is why investing your money is so important, and it’s how you really allow your money to grow for you!
JP grew up listening to stories about financial insecurity during her parents’ upbringing. The freedom that early retirement brought really appealed to her, and who doesn’t want to retire early anyways?
She is now retired at the young age of 28 and says that she still lives “an incredibly luxurious life.” And, she managed to retire early while living in one of the most expensive places in the world – New York City.
Related articles:
I asked you, my readers, what questions I should ask JP. And, make sure you’re following me on Facebook so you have the opportunity to submit your own questions for the next interview.
So, below are your questions, along with some of mine.
Here is how JP Livingston retired at the age of 28 with over $2,000,000. You can follow her on her blog The Money Habit as well.
1. Tell me your story. How did you manage to retire at 28?
I have wanted to retire since I was about 12 years old. My parents grew up poor. I am talking eight people living in a one room apartment poor. My father’s father passed away when he was 18, and his mother who had previously been a homemaker was only able to find a job at a cookie factory. Her dream for my father was that he would be a busboy and eventually work his way up to be a cook in a restaurant.
My mother’s father passed away when she was in middle school; her mother found work as a seamstress at a large garment factory to support a family of six children.
I grew up on stories of their financial insecurity.
When I started thinking about the future, my parents’ refrain to me was that I could be anything I wanted to be, as long as I had a way to financially support myself.
In middle school, we took a survey on our interests and read about different jobs. I loved to write and wanted to be a writer. When I found out how unsteady the income was for a writer, though, I was demoralized. I decided that if I couldn’t support myself financially by being a writer, I would find a way to retire instead, Then I’d have the freedom work on whatever I wanted, including all the writing I could handle. So I started reading personal finance books.
I learned that you don’t have to be a genius or have special skills to retire early. A habit of making small and regular improvements trumps even the most gifted people who only apply themselves sporadically.
The tactics I’ve employed include optimizing for pay raises and promotions, living a very minimalist and frugal life, focusing on investing skills, and building analytical skills such as understanding how to build and use spreadsheets to support my investment ideas. I found there was an 80-20 rule to different improvements I could make in my money life: 20% of the improvements accounted for 80% of the results. I’ve been trying to outline those major needle movers on my blog so people don’t waste their time as I did on the things that don’t really matter.
All those incremental improvements stacked up into a humming, healthy machine. When I retired at 28, I had a net worth of $2.25 million and it’s still climbing.
2. How did you reach $2,250,000 in savings by the time you were 28? When did you begin saving?
60% of my net worth came from saving and 40% came from growing my money through investing.
My saving habits started in childhood, which isn’t surprising given my parents’ experiences. But what really upped my game was branching out from a few good habits and awareness to trying to find unorthodox ways to save.
One savings move that went against the grain was graduating college in three years. I earned scholarships to attend a state school for free but I chose a private college which I felt would offer broader opportunities. That private college was incredibly expensive though. So in compromise, I graduated a year early.
The savings from that move was not just the tuition costs, but also a full year of missed earning opportunity. My first job was in finance and paid $60,000, with a promise that that if you stuck it out through the entire year you got a bonus that was almost equal to your base. So that one decision to graduate early caused a nearly $150,000 net worth swing.
That kind of savings so early in life, growing at market rates for 20 years would yield $800,000 by the time a person were 42. That’s enough for some people to retire through one decision alone!
Related: How I Paid Off $40,000 in Student Loans in 7 Months
3. What made you want to retire early?
The freedom is really what appealed to me.
I had a very potent reminder of how important freedom was and how little time I had to enjoy it the year before I retired. There were several deaths and major health scares amongst my loved ones. That made me realize that given my family’s history, I had about 15 to 20 really good years of health that I could count on. Did I want to spend even one more of those years stressed out while working?
4. What sacrifices did you have to make in order to reach this milestone?
I’ve rarely thought of my financial decisions as sacrifices. Rather, they were decisions to purchase one thing over another. If I took my bonus into the store and were deciding between a cool new phone or a camera, I wouldn’t leave feeling like I had “sacrificed” the one I didn’t purchase.
I wanted to buy back my time and my freedom more than I wanted to buy anything else in the store. In short, I’ve looked at this is as an opportunity, not a sacrifice. That does wonders for your motivation and mental health.
There is an excellent book that I think provides one of the best frameworks to thinking this way. It’s called Your Money or Your Life, written by Vicki Robin and Joe Dominguez. The general concept is this: take the amount of money you make in a year. Subtract out all your work-related expenses. Now take that balance and divide it by the number of hours you work. That gives you the amount of money you are exchanging per hour of your life. With that metric, you could estimate how many hours of your life a purchase would cost rather than dollars.
Once you start looking at your purchases this way, you will want to buy much less. And investing will start to look amazing to you! It’s a magical way to get more of your life back, because those dollars can go to work in your place, earning you money while you sleep.
5. Would you say that you live comfortably?
I think we live an incredibly luxurious life. There’s still a ton of fat we could cut.
6. What career did you have before you retired? Did that career help you to retire earlier?
I was a professional investor at a finance firm and it definitely helped me to retire earlier. I got really lucky that it ended up being so lucrative; I initially planned on it being a two year stint at most. But the work kept getting more interesting and the pay got better. The frameworks we used for investments also helped me think about my own investment decisions for my personal portfolio.
7. What do you have to say to those who may think that they can never earn as much as you can – can they still retire early too?
They can absolutely retire early!
To me this is the whole point of why the personal finance blogosphere exists. None of us have identical circumstances and identical outcomes. Your childhood may have been more or less advantaged than mine. Your lucky breaks might be better or worse than the ones I experienced. But the absolute truth is this: the you that is making consistent, small improvements over time to your money plan is going to easily accumulate 5x the wealth of the you that isn’t.
It’s not hard to retire early in this country because the bar is so low. The average age of retirement in the US is age 63. After 41 years in the workforce the average 63-year-old couple has a total net worth of $174,000 to show for it. That works out to just over $4,000 of savings per year; less if you assume any investment growth.
8. What do you do now that you’re retired?
The best thing I can do is show you. Here was my actual calendar from a recent week:
Broadly speaking, I have one major project – a personal finance site I write to help others retire early – which I work on for about 10 hours a week, then the rest of the time is filled with hobbies, reading, and being out in the city.
It is amazing how enjoyable the mundane things are when you are not too stressed out to notice them.
9. Many people will have this question in the comments of this interview, I just know it! – Can you explain how you will make $2,250,000 last your whole life, even though you are only 28?
That’s a great question.
My plan is based on data gathered by the Trinity Study. This study calculated that if deployed in a portfolio of stocks and bonds, an inflation-adjusted 4% yearly withdrawal rate from savings was optimal to safely retire and not work for a given 30-year window in the history of the United States.
Thus, if your annual expenses is equal to that 4% yearly withdrawal rate, the idea is that it is very unlikely you will run out of money in a 30-year period.
However, I have some concerns about the riskiness of that 4% figure. For one thing, my retirement is expected to be much longer than 30 years. In addition, if you look at stock market performance in the last 20 years, the compound annual growth rate was 8.2%, almost 2 points lower than the CAGR shown in the period the Trinity Study originally measured. For these two reasons, I plan to live off a stock and bond portfolio withdrawing an inflation-adjusted 3%.
3% of my $2,250,000 would give me $67,500 a year. My husband and I currently spend $65,000 a year living in one of the most expensive cities in the world. That means we could support our current lifestyle almost indefinitely.
But one of the hard parts about retiring so early is that you have to plan for chapters of life that could look drastically different than today. Having children, for example. So before I pulled the trigger, I built a projected budget for a family of 4 to calculate how much I would need to support a family. I did this with empirical data, researching what actual families of four paid for the service in the city I was considering.
The nest egg required to support this budget is $2.23 million, which is within our means.
With early retirement specifically, I think it’s also comforting to walk through your other margins of safety that don’t show up in the budgeting process. Here are a few in our case:
Conservative Withdrawal Rate: We are using a withdrawal rate some would argue is half to one percentage point more conservative than needed. That would equate to overstating my nest egg needs by over $400,000.
Extra Buffer: We have an extra one hundred thousand dollar buffer that will grow over time and which will absorb costs we haven’t foreseen (i.e. higher healthcare premiums, poor market performance for a year, etc.).
Full-Time Work: Either of us could go back to work full time.
Income-Earning Hobbies: One or both of us might end up doing a hobby that generates money
Tighten Discretionary Purchases: $9,700 or 19% of our annual budget is discretionary and we could tighten our belts in a particularly rough year just as every other family does.
ACA Healthcare Savings: We have not factored in any ACA subsidies even though our income in this budget would qualify us.
Market Outperformance: Markets could do better than we’ve projected. We require a blended 5-6% return (3% withdrawal, 2-3% inflation). We could easily see market CAGR of 8%+ as evidenced by historical data.
Home Equity Loans/Reverse Mortgage: We can draw cash out through a home equity loan if we have a temporary cash crunch or use a reverse mortgage in our old age.
Profit-Share Grants: My profit-share grants from my previous employer may be worth greater than the $0 we’ve estimated.
10. Do you still earn an income?
Not currently.
I am not ruling out a traditional job one day, but it would be about finding interesting work and less about the money. My goal right now is to create a place that helps other folks get smarter about money and retire faster, so I might do some freelance writing outside of the blog. But I don’t want to have left one job just to jump into another!
As for other forms of income: I do have some deferred compensation from my old employer. And although my husband could retire as well, he likes what he is doing and continues to work.
11. How did you decide on how much you needed to retire on?
I was a professional investor and the way we used to make our investment decisions was to build out various scenarios, observe the outcomes, and attach a probability to each. I did a similar exercise for determining how much I needed to retire. I used three scenarios to triangulate on a target number. There’s a walk through on the three scenarios which anyone can use to determine their own target retirement number over here.
12. If you were starting back at ground zero, what would you do differently from the beginning?
Two things:
Put Momentum First: I would focus on building momentum more than trying to muscle my way through things with sheer discipline. Most people’s initial reaction to starting a new project is to throw themselves all in. I get emails asking me what book I’d recommend people buy to turn their financial lives around. But think about how you got into your other hobbies. Did you run out and buy a book about proper free-throw technique to get into basketball? Were you consulting a textbook to get into yoga? If the key to millions of dollars is showing up every day and making small improvements, then the key to your success is figuring out how to build momentum in those early days that will get you showing up regularly. That means less of a focus on running out and buying dry, boring textbooks and more effort on joining blogs or forums with bite-sized, regular content where you can start to get your bearings and get interested.
Tackle The Right Steps In The Right Order: There are four steps to early retirement, and tackling them in the right order really accelerates your progress. I wish I had thought deliberately about how the levers in front of me were changing and better prepared myself for the different stages. I’ve missed a lot of great opportunities because I was so focused on the things that had been working for me in the past that I didn’t look up and think about the new opportunities open to me as my wealth accumulated. For example, I wish I had understood the math behind investing in high-appreciation real estate markets year ago. If I had, I would have bought a house in NYC years ago and be $500k richer.
13. Is retiring everything you thought it would be or not as you planned? Do you ever miss work?
It is a hundred times better than I thought it would be. I will admit there was a learning curve at first. But these days, I often tell my family that I am living a version of my dream life. If you had known me before I retired, you would have found that statement astonishing.
If there is one thing I miss about work, it’s regular interaction with smart and thoughtful people. Since I started the blog, though, I’ve gotten quite a bit of that back. So overall I’m quite happy!
14. Lastly, what is your very best tip (or two) that you have for someone who wants to reach the same success as you?
Ask questions. Be the active commenter on a blog or the vocal one at the cocktail party. Be courageous enough to cold-email the people you know have the answers you need. You can learn so quickly if you’re willing to put yourself out there. People are generous with their experience if you show you’ve done your homework and ask them specific things that make it easy for them to help you.
“Why?” is your most powerful tool. If someone tells you investing in X is the way to go, ask why, and pepper them with all the potential concerns you can think of. Then go find another smart person and ask them why X is a good or a bad idea. Go back to the first and pose the second person’s counterargument and ask them to respond. Introduce another expert. Repeat until you feel you understand the issue backwards and forwards. This is hands down the best way I’ve found to master a concept.
Focus on habits and systems, not results. You can make yourself feel really good by muscling through a one week sprint with discipline and admiring what you accomplish. But really impressive results take weeks and years of focused effort. I have seen a lot of amazing people in college and at my old employer, and the thing that separates the average from the incredibly successful is really just who has figured out how to put out consistent effort. No one has discipline to last in a marathon like this without building the right systems and habits. Show up every day and do one small thing to improve the thing you’re measuring. If you do this, you will be among the top 5% of achievers. Over time you will build a system that will trump any specific lucky breaks or windfalls, and it will get you to financial success you deserve.
Are you interested in retiring early? Why or why not?
Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.
Mark Ferguson has been a Realtor since 2001 after graduating from the University of Colorado with a business finance degree. He runs a real estate team of 10 that sells over 200 homes a year, fix and flips 10 to 15 homes a year and owns 11 rental properties. Mark also runs www.investfourmore.com, a blog that discusses Mark’s fix and flips, rental properties, becoming a real estate agent and everything real estate related.
Many television shows portray fix and flipping as a very profitable business that can easily be done in your spare time. Sure there are usually a few contractor problems, but in the end the house sells for a lot of money and the owners make a killing. In reality, you can make money fix and flipping homes, but it takes a lot of hard work and a lot of flipping to make a lot of money. It is also very easy to lose a lot of money if you do not account for all the costs or overestimate the value of your flip.
I have been a Realtor since 2001, and I have fix and flipped close to 100 homes over the last 10 years. I have 10 fix and flips going right now, and I can tell you it is not easy managing one fix and flip let alone 10! It takes a lot of money to fund fix and flips, more time than you think to sell a flip, a lot of experience to deal with repairs and contractors, and expenses are almost always more than you figure.
If you buy houses cheap enough with enough of a margin for error, you can make good money fix and flipping homes — but don’t expect to be a millionaire after a year or two in the business.
Are the Television Shows Accurate in Their Portrayal of the Flipping Business?
Most fix and flip television shows love to show the before and after pictures of a flip with the initial purchase price and the selling price at the end. There are a couple of shows that portray the expenses accurately, but most leave out many of the costs that flippers encounter. In the fix and flip business, many investors use the 70 percent rule to determine if they can make a good profit when they flip a home.
The 70 percent rule states the purchase price should be 70 percent of the after-repaired-value (ARV) minus the cost of any repairs. For example, if a house will be worth $150,000 after it is repaired and it needs $30,000 in repairs, the 70 percent rule states an investor should pay $75,000 for that house. Buying a house that will be worth $150,000 for $75,000 seems like a home run, but it is really just an average deal because there are so many costs associated with flipping.
What Costs are Involved in Fix and Flipping Homes?
The obvious costs involved in flipping are the purchase price of a home and the repair costs. In our example, there appears to be $45,000 in profit once you include the selling price and the repairs but there are many more expenses that many beginners do not consider.
Financing costs: Most people do not have $75,000 plus the costs of repairs and carrying costs to buy a flip. It is more expensive to finance a flip because banks make their money off interest paid on loans. The shorter time you hold a loan, the less money a bank will make. Most large banks will not finance flips, but some local lenders will. Hard-money lenders will fund flips, but they are very expensive, charging 12 to 16 percent interest rates plus 2 to 4 percent of the loan amount for origination fees. A hard-money lender is a not a bank but a company that takes money from investors at a given interest rate. The hard-money lender then lends that money to fix and flippers at a much higher interest rate.
Carrying costs: When you own a house, you have to pay for the lawn care, heating, insurance, taxes, HOA and more while you own the home.
Purchasing costs: Besides the loan origination costs, there are some other costs to consider when buying a flip. A home inspection will run $300 to $800. Some lenders will require an appraisal, which is $400 to $600. There will be a closing fee, recording fees, tax certificates and much more.
Selling costs: When you sell your house, you will most likely have to pay a real estate agent to sell the flip and possibly cover closing costs for a buyer. The real estate commission and closing costs can add up to be 10 percent of the sale price.
Miscellaneous costs: Depending on where and how you buy your property, it may have a tenant or the previous owner may still be living in it. You could have eviction costs or costs to pay the occupants to leave.
Here is an example of what the total costs would look like on a typical fix and flip I buy and sell. I have a great lender who charges me 5.25 percent interest rate and 1.5 percent origination, but they only lend on 75 percent of the purchase price. My loan costs are much lower than most flippers’.
Purchase price: $75,000
Loan amount: $56,250
Costs:
Loan costs: $2,500
Carrying costs: $1,600
a. Insurance: $400
b. Lawn maintenance: $300
c. Taxes : $400
d. Utilities: $500
Buying costs: $1,000 (I usually do not do an inspection or have an appraisal)
Repairs: $30,000
Selling costs: $7,000 (Since I am a Realtor, I only pay the buyer’s agent commission. I list the house myself and do not have to pay a listing agent.)
Miscellaneous: $5,000
Total costs: $47,100
If I sold the house for $150,000, my profit would be $27,900. That is a decent profit, but I want to make at least $25,000 on each flip because of the risk involved and the money I put into them. On this flip, I would need at least $50,000 of my own cash for the down payment, carrying costs and repairs. Beginning flippers could easily spend three times as much for financing costs and another $4,500 to pay a listing agent. That cuts the profit to under $20,000 for a house that sells for twice as much as it was purchased for. The next time you watch a fix and flip show, see how many of these costs they actually tell you about!
Will You Make More Money Fix and Flipping More Expensive Homes?
It is true that the profit potential goes up when you flip more expensive homes. However, there are many more risks involved when flipping expensive houses.
The repairs will be much more expensive because buyers will demand higher quality.
It takes longer to sell more expensive houses and your carrying costs will be higher.
The carrying costs will be higher due to HOAs, more maintenance needed, higher taxes, etc.
You will need more cash because down payments, carrying costs and repairs will be higher.
All your money is in one house instead of multiple homes, increasing the risk if something goes wrong.
The biggest problem with flipping more expensive homes is that the difference between the buy price and sell price is massive. Using the 70 percent rule, a house with a $500,000 ARV would have to be bought for $300,000, if it needed $50,000 in work ($500,000*.7-$50,000=$300,000). It is very hard to find a deal that has such a large difference between the ARV and the purchase price because an owner-occupant buyer would be willing to pay much more for the house. The owner-occupant can pay $400,000, put $50,000 into the house and still have a great deal. In the more expensive market, it is much more likely owner-occupants will have the cash to put into homes.
How Long Does it Take to Fix and Flip a House?
From start to finish, my goal is to have a flip for four months from the time I buy it to the time I sell it. I almost never hit that number because there are so many unknowns. The biggest delay I have is finding good contractors, especially when I have 10 properties at once. It takes me a couple of weeks to get a contractor started on the work, about a month for the work to be done, about three weeks for the home to be on the market before a contract is accepted and yet another month for the escrow/closing process — if everything goes perfectly.
Unfortunately, it often takes longer for the contractor to make repairs. We inevitably see a few things the contractor missed and they have to go back to the home to take care of those items. Then we have to line up cleaners and get the home listed. Sometimes it takes three weeks to get a good offer; sometimes it’s just one week, but it could just as easily be two months. In addition, the escrow process can vary from one month to sometimes two months. Now that I have so many houses and not enough contractors, I am looking at almost nine-month turn times on some of my properties.
Is All the Hassle Worth it When Fix and Flipping Homes?
After looking at all the costs and everything that has to be accounted for, it may seem a bit intimidating to flip a home. Especially when you consider we have not even talked about how to find a fix and flip that can be bought cheap enough to make money. Just like anything in life, it takes time to learn what you are doing and feel comfortable. I still am learning new techniques to find properties and finding better ways to fix and flip homes.
After you learn the business, it can be a lot of fun. I still get excited whenever I get a new deal under contract, almost as excited as when I sell one for a nice profit. Over the last two years, I have averaged about a $35,000 profit on each of my fix and flips. I completed 10 flips last year and should complete (buy, fix, sell) over 10 this year. On most flips, I make around $30,000 in profit; but once in a while, I will make more, like this property that I made over $50,000. In the last 13 years of fix and flipping homes, I have made over $100,000 twice on a single flip. My success has not come from making a huge profit on one or two flips a year, but on consistently making modest profits on multiple homes. There is much less risk flipping many lower priced homes than flipping one expensive home.
The best part about this business is that I do not flip full time. I run a real estate team of 10 and my primary job is running that team and selling houses. Once you set yourself up correctly with the right contractors, the right financing, enough of your own money and experience, the business does most of the work itself. It is not easy to get to that point and it takes a lot of time and reinvesting money back into the business.
How Do You Find a Great Deal to Fix and Flip?
Finding a great deal is the key to making money in the fix and flip business. I used to buy 90 percent of my fix and flips at the public trustee foreclosure sale. These houses were sold in as-is condition for cash, and many times the inside of the house could not be viewed or homes were occupied. When I bought a home at the trustee sale, I had no inspection period and no way to back out once the property was purchased. In the last two years, the competition at the trustee sale has increased and I have not purchased any homes from that sale in over a year. In fact, I do not even go to the sale anymore because people are paying close to the amount you could buy a house for on the MLS. When I buy on the MLS, I get to have an inspection done, I can use a loan to buy the property, and I don’t have to deal with any occupants.
Almost all of my deals are bought on the MLS now. There are a few tricks to getting a great deal, but it is not easy with rising prices and competition.
Act fast: I make offers within hours of homes being listed.
Become an agent: One of the reasons I can act so fast is that I write the offer, set up a showing and I do not have to wait on an agent.
Look for properties that need work: The more problems a property has, the more potential profit there is. Make sure you know how to fix the problems and how much it will cost!
Look for properties that have been on the market over 90 days. The sellers are more likely to accept low offers on these homes. If they are grossly overpriced, I do not even bother.
Make offers on homes that come back on the market quickly. I can set up MLS alerts to tell me when a house in a certain price point comes on the market or comes back on the market after a contract falls apart. Many times the great deals that need work have contracts that fall apart because buyers don’t realize how much work is needed until their inspection.
There are other ways to get great deals such as direct marketing to sellers who do not have their properties for sale or finding wholesalers who sell cheap properties to investors.
What Should You Avoid if You Decide to Start Flipping Homes?
If you have decided you want to give flipping a try, here are some tips to keep you from losing too much money on your first try.
Only do the repairs yourself if you know what you are doing and have time to complete them. Many flippers try to save money by doing the work themselves. They don’t realize how long it takes to make repairs, especially in their spare time. It ends up taking months to fix the property and the extra time will eats up the money you thought you saved by doing the work yourself. To make the situation even worse, the work won’t be as good as if a professional did it.
Do not overestimate the value of a home or rely on values to increase to make money. Many markets have increasing prices, but that doesn’t mean they will keep increasing. A lot of flippers went bankrupt during the housing crisis because they assumed the market would keep going up. When prices stopped increasing and then decreased, they lost everything. I kept flipping right on through the housing crisis because I based values on the current market and left myself room for adjustment.
Do not overprice a home when you list it. To make money flipping, you have to sell quickly and keep your money moving from property to property. If you have a house sitting on the market that won’t sell, it is most likely overpriced. I have found that the sweet spot for a house to be on the market is three weeks and then I usually get an offer. If I don’t get an acceptable offer after 30 days, I lower the price 5 to 10 percent, depending on the activity.
Don’t try to sell a house yourself unless you are an agent. If you sell a house for sale by owner, you lose market exposure by not being in MLS. Ninety percent of buyers use a real estate agent to represent them and those agents look on MLS to find properties for their buyers. If you use a limited service company that puts the home on MLS, you still have to pay for the buyer’s agent. You are saving very little money and the buyer has representation while you do not. Who will get the better deal?
Always assume your repairs will be more expensive than you think and the flip will take longer than you think. Even if you get a bid for all the work before hand, things always pop up that you didn’t see or you couldn’t have known about.
My Worst Flipping Experience
There is a lot of information in this article and I didn’t even come close to covering every topic involving flipping houses. I hope it gives you an overview of what it is like and what it takes to flip houses. It is not about hitting a homerun on every flip, but hitting a lot of singles over and over again. I have lost money on flips before, sometimes because of things I have no control over. Since I had many flips going at once, losing money on one flip did not destroy my business — but this was the worst experience.
A couple of years ago, I bought a flip at the trustee sale. I saw the interior of the home through the windows but never got inside the house before I bought it. It was a good deal on a newer house, with little work needed and I thought I would make some easy money. After I bought the house and got the locks changed, we found a brand new BMW in the garage. I knew something very odd was going on, so we tracked down the previous owners in California (I am in Northern Colorado). They claimed the bank had foreclosed wrongly and they were going to get the house for free. They ended up filing a lawsuit against the bank a week later and we had a house we could not sell because it was involved in litigation.
The previous owners had been convinced they would get the house for free by a legal aid. We offered them $5,000 to drop the case and they would not even think of it, because they knew they would get the house for free. Long story short, the lawsuit was frivolous and thrown out by a judge as soon as he saw the case. The problem was that it took the court almost a year to look at the case even after we had hired lawyers and paid them almost $10,000 to speed up the process. After carrying costs and lawyers fees, I lost about $15,000 on that house. There was no way to know that would happen, but sometimes that’s how it works when buying houses at the foreclosure sale. That is why I prefer to have multiple low-value houses at the same time, instead of one expensive house. I was still making money and turning other properties while that house was tied up. If all my money was tied up in one house that I could not sell for a year, I could have been in serious trouble.
Conclusion
I have been in the fix and flipping business for a long time and it has been very good to me. It is not easy to get started, to find great deals, find great contractors or to get all the money needed to flip. It is not impossible either, but it does take a lot of planning and education to get started. If you want to ask any questions in the comments, I’ll try to respond as quickly as possible.