Financial Planning Archives - Hanover Mortgages

January 14, 2022

Make Your Money A Daily Routine

Starting a new routine in any area of life can be challenging. Be it changes to your finances, exercise habits, health or any other type of new routine, one of the best ways that you can increase your chances of success is to make it part of your existing daily routine. Making small changes to something you’re already doing drastically increases your chances to stick with any new habit. Here, we’ll take a look at some ways that you can incorporate finances into your daily routine.

Setting yourself up for success

If you are planning or have already set a goal or resolution to improve your finances, Mint can help. Mint makes keeping track of your finances feel less like torture and more like a natural part of your day. Instead of feeling like it’s just “one more thing” that you have to do each day, you can handle your finances in the background of many moments. This makes it much more likely that you will continue on the right path.

Constantly making progress

The hardest thing about making progress is constantly making progress. It’s really difficult to stay in the same place. So if you’re not always moving forward, you may find yourself moving backwards. All you have to do is keep up the pace — and fortunately, Mint makes that easy to do.

One thing that you have to watch out for is making one mistake and then completely giving up on your new financial goal. It’s unrealistic to think that you will never slip up even once — so if you set the mentality of perfect or nothing, you’re more likely than not to end up with nothing. Instead, remember that the road to financial health is a marathon, not a sprint. If you’re over budget one month, don’t give up — instead review what went wrong and strive to improve next month.

Keep track of your spending

Probably the most important thing that you can do to set yourself up for good financial health is to keep track of your spending. This means not only your big ticket items like rent, mortgage, utilities and other loan payments, but keeping track of EVERYTHING. There are many different ways to keep track of your spending, and each of us may prefer a different way. The important thing is to find the way that works best for you and stick with it.

You can go as low-tech as a paper spending journal where you write down each expense and then categorize it into a budget. If you prefer something more advanced and automated, Mint may be a great option. When you connect your bank accounts and credit cards to Mint, it will automatically track your purchases and categorize them for you based on the merchant. You can also set up a weekly or monthly budget and get alerts when your spending approaches or goes over your budget.

Using Mint to keep track of your spending

A good way to use Mint to incorporate your finances into your daily routine is to set up a reminder to review Mint regularly. Once or twice a week is probably a good cadence for many people, but if it’s easier, you can also just review it daily. Find something you do regularly and make checking your Mint account a part of that. This could be during your lunch break, your morning coffee or anything else that you are already regularly doing.

When you review your Mint account, there’s a few things that you’ll want to be on the lookout for:

Look for any fraudulent or unauthorized charges — if there’s a charge you don’t recognize, you’ll want to investigate where it came from
Check for any mis-categorized purchases — Mint uses the merchant where you make a purchase to assign it to a budget category. Check and make sure all of your purchases are being assigned correctly
Review your budget — Take a look at your budget and see how your spending so far is lining up. Make any adjustments that make sense.

The Bottom Line

Making any changes to your life requires mental and physical adjustments. Changing your finances is no exception, and the best way to make a change is to incorporate checking on your finances into something you’re already doing as part of your daily routine. Mint can be a great tool to help you keep track of your finances and stick to your budget. And remember, no matter where your day takes you, it’s always time to Mint.

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Source: mint.intuit.com

January 13, 2022

How to Afford Everything that Comes with Homeownership

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Homeownership is the American dream, right? We spend years â sometimes decades â saving up enough money for a down payment for our first home and mark it as a major milestone in our lives.

But sorry to rain on your parade â just the down payment isnât enough.

Sure, youâll get the keys and have takeout on top of a box marked âfront hall closetâ on your first night, but then what? You need to fill it. You need to protect it. And you definitely need to be saving up for all the leaks, breaks and âoh, sugars!â that come with that property deed.

So How Much Do You Need?

If youâre starting from scratch, the interior designer rule of thumb is to spend between 10% and 50% of the homeâs value on new furniture, appliances and decor. A totally empty $300,000 house might run up a $30,000 bill. It might be less if appliances are included, youâre bringing furniture with you, or youâre a good thrifter. It could cost more if you have expensive taste.

The average homeowners insurance in the US on that same $300,000 home is about $1,200 per year. Itâs higher in places like Texas and Florida (hello, hurricane season) and lower out west in Utah and Idaho. Natural catastrophes, the cost of rebuilding your home and even your credit score can affect the cost of your premium.

As for emergency savings, the rule of thumb is three to six monthsâ worth of living expenses â definitely on the higher end, if youâre a homeowner. Realtor.com suggests 1 to 3% of your home value, so $3,000 to $9,000 stashed away for when your dog decides to eat through a wall.

It sounds like a lot. And make no mistake; itâs definitely a big part of your home-owning investment â but itâs attainable with the right knowledge and savings tools. Here are a few ways to boost your savings and lower your home-owning costs.

1. Make Your Sure Credit Score is in Tip-Top Shape

You probably remember this from when you were buying your home â the better your credit score, the better your mortgageâs interest rate. The same is true for homeowners insurance and credit card interest rates (this is important to think about if you open a store card to spread out furniture payments).

The good news? A free website called Credit Sesame makes it easy to put your credit score on track to reach your goals and keep your loan payments low. We even talked to one guy, James Cooper, of Atlanta, who used Credit Sesame to raise his credit score nearly 300 points in six months.*** He says they showed him exactly what to do â he was even able to open his first credit card.

What could adding 300 points to your score mean for your goals? It could easily save you thousands of dollars over the life of a car loan or mortgage.

Within 90 seconds, Credit Sesame will give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. Youâll even be able to spot any errors holding you back (one in five reports have one).

Make sure your plans donât get sidelined by bad credit. Sign up for free (it only takes about 90 seconds) and see how much you could improve your score.

2. See if Youâre Wasting Money on Homeowners Insurance

If youâre a homeowner, you probably have home insurance, but you hardly ever think about it. Thatâs good â it means you havenât needed to use it. But it also means you donât know if youâre being overcharged for it.

Itâs easy to find out, though. An insurance marketplace called Policygenius can look for discounts or even a cheaper policy for you. And your new policy could be similar to the one you already have â just cheaper.Â Seriously. They have saved people an average of $455 a year, compared to their previous policies.

The best part? They do all the heavy lifting. Theyâll move you over to your new policy for free. Theyâll even do all the paperwork. (Youâre allowed to cancel your insurance policy at any time, and your company should issue you a refund.)

It takes just a few minutes to answer some quick questions and see how much money you could save. And donât worry: Policygenius doesnât sell your info to spammers.

3. Cut Your Other Bills to Save For More Furniture

Furnishing a house is expensive. You donât even realize how much money youâll need until you start pricing it all out at the store â a couch, a coffee table, a few lamps, a bookshelf, a couple side tables, an armchair or two, things to put on your bookshelf and on the wallâ¦ and thatâs just in your living room!

One easy way to come up with this money is by cutting your costs and saving the difference. For example, when was the last time you checked car insurance rates?

You should shop your options every six months or so â it could save you some serious money.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and itâll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 towards a dining room set just for taking a few minutes to look at your options.

4. Have a Safe Place to Save Your Emergency Fund â and Grow it 16x Faster

Youâve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. Thatâs bad advice when it comes to building and protecting an emergency fund.

You should be looking for a place to safely stash it away â but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account wonât do you much better. (Ahem, 0.06% is nothing these days.)

But a debit card called Aspiration lets you earn up to 16 times the average interest on the money in your account. Thatâs 16x more helpful when you need $9,000 earmarked for future, inevitable, home repairs.

Not too shabby!

Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for âthis is totally safe.â

Kari Faber is a staff writer at The Penny Hoarder and a homeowner who has used these tips to save money herself.Â

***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

January 12, 2022

Here’s What to Do Before Debt Collectors Start Calling

Take your car insurance bill, for example. When’s the last time you checked car insurance prices, anyway? You should shop your options every six months or so — it could save you some serious money and help you avoid missed payments.
Make sure your bad credit doesn’t give the debt collectors more ammo to use against you. Sign up for free (it only takes about 90 seconds) and see how much you could improve your score.
Kari Faber is a staff writer at The Penny Hoarder.
***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

1. Get Rid of Dings on Your Credit Report and Raise Your Score

If you went to the hospital without insurance or you haven’t met your deductible yet, doctors’ bills can be pretty steep.
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A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
If your bills are lower, there’s less of a chance you’ll miss a payment due to lack of funds. And no missed payments means no debt collectors calling you every single day. But a lot of these money-sucking bills are ones you can’t cancel.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But a website called AmOne wants to help.
Most Americans have some sort of debt — and not all of it is good debt, like a mortgage, car loan or student loans, which are considered good investments.

2. Stop Paying Your Credit Card Company Insane Interest Rates

Privacy Policy
The good news? A free website called Credit Sesame makes it easy to put your credit score on track to reach your debt-free goals. We even talked to one guy, James Cooper, of Atlanta, who used Credit Sesame to raise his credit score nearly 300 points in six months.*** He says they showed him exactly what to do — he was even able to open his first credit card.
Using Insure.com, people have saved an average of 9 a year.
What could adding 300 points to your score mean for your goals? It could easily save you thousands of dollars over the life of a car loan or mortgage.
Yup. That could be 0 back in your pocket just for taking a few minutes to look at your options.
Source: thepennyhoarder.com

3. Lower Your Bills to Avoid Missed Payments

While it doesn’t make the debt disappear (you are still liable for these payments), a payment plan makes paying off these debts more manageable and will keep the debt collectors off your back so long as you make each monthly payment.
If you have a low score with a few dings on your report, you won’t get access to decent interest rates on your loans. That means you’ll be paying more in interest and less on the actual loan amount — taking you sometimes years longer to pay it off and thousands of dollars more. If it’s a mortgage, the cost of your poor credit score could mean tens of thousands of dollars gone to waste.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 2.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
Thankfully, doctors and hospitals can be willing to work with you. Some medical providers will offer a discount if you’re strapped for cash, and most are open to payment plans. So instead of 0 out of pocket today, you could be paying a little over a month for the next six months.
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape and the debt collectors will set up camp on your doorstep forever…

4. Try to Negotiate Your Payments and Get On a Payment Plan

In just 90 seconds, Credit Sesame will give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).
Ready to stop worrying about money?
You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all. Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
Debt happens.
Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.
What does your credit score have to do with debt? Turns out — it can be a major factor in you getting out of debt quicker. <!–

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Credit card debt, medical debt, overdue bills and high interest loans are just a few of the types of bad debt that can wreak havoc on your life. They can destroy your credit, snowball into even more debt and, yep, have the debt collectors hounding you to pay up.

January 12, 2022

Main Causes of Inflation

You may have heard that in November 2021, inflation reached the highest rate in 30 years, but what does that mean, and how does it impact you? Let’s start with the basics.

Inflation is an economic phenomenon where the value of goods and services in an economy increases over time. Have you ever heard someone talking about how, back in the ’60s, you could get a Coke for a nickel? The reason why a soda now costs $2 is because of inflation—the relative value of money has gone down compared to the price of goods.

In general, there are two main types of inflation that economists care about. In this post, we’ll explain those two causes, explain factors that influence inflation, explore ways experts suggest we counteract inflation, and what you can do about it. But first, we’ll dive into the current causes of inflation and how they’re impacting your current buying power.

4 Main Causes of Inflation in Our Current Economy

In the last few months, you may have noticed that prices have been rising on everything from grocery items to gas, with consumer prices up 6.8% compared to this time last year. That’s the power of inflation. But what’s currently causing inflation and this undesirable strain on your wallet?

With respect to the current economy, there are a few causes of inflation:

1. Increase in the Money Supply:

An increase in the money supply is meant to help stimulate the economy by helping to put more money in the hands of consumers. While this might sound like a positive shift, it can actually have negative influences on the economy, like contributing to inflation.

The Federal Reserve has printed trillions of dollars over the last two years, which has contributed to the devaluation of U.S. currency and the high inflation rate we’re currently experiencing—and is being speculated to continue.

Not only that, but the money supply has increased faster than the rate of production, which contributes to shortages. And, with more money in circulation, consumers have more to spend—which in turn is spurring greater consumer demand.

However, with demand outpacing production, there are many shortages across the country.

2. Supply Chain Disruption:

Whether you’re in the grocery store or waiting for something to ship from overseas, you’ve likely been having a hard time getting ahold of certain goods in recent months. There are a few factors that are playing into this current issue.

First, during the height of the pandemic, many companies decreased output because consumers weren’t spending. However, they are now and companies have been trying to play catch up.

Pair that with the shortages in an all-around shortage of supplies to make certain goods, and it’s become a compounding issue.

And we haven’t even gotten to the traffic jams at the various ports throughout the country that have led to a massive amount of goods being stuck for long periods of time, sometimes months. With goods stuck at these ports and unable to be unloaded, it means that many shelves will continue to sit empty.

3. Overnment-Sponsored Unemployment:

In response to the spike in job losses we saw in 2020, there were increases and expansions to existing unemployment programs both on the state and federal level. While this may have helped get many people back on their feet, with many people unwilling to go back to work for previous wages—combined with concerns over health and safety—we’re now seeing long-term impacts that are affecting the current inflation.

The gist of the issue is that government-sponsored unemployment benefits pay workers not to work, which causes a shortage of workers. Ultimately, this leads to businesses having to raise wages above the unemployment benefits.

As such, businesses are having to pivot and restructure their approach to compensation and employment. While some businesses will be able to adapt to the demand for higher wages in order to ensure they have the staff they need to support their operations, many small businesses will not.

4. Poor Government Policies:

Bad government policies can impact inflation—most specific to our current circumstances are those regarding fossil fuels. If you have a car, you’ve likely seen gas prices rising over the last year.

While these policies need to be addressed, this isn’t a quick fix. U.S. oil production and refining have been down this year due to several causes including Hurricane Ida, which impacted oil supply. Pair that with oil-exporting countries not providing enough, and there are supply constraints on both sides of the equation.

With supply constraints and the current increase in demand for gasoline, prices don’t look to be coming back down in the near future.

Now that we have a better idea of what factors are contributing to inflation most recently, let’s take a look at inflation causes through a more generalized lens.

What Are the General Causes of Inflation?

It’s important to take the time to dive deeper into inflation as a whole so you can better understand how and why inflation occurs and how that plays into the economic impact consumers experience.

There are two broad, general causes of inflation. Each is also its own type of inflation and requires its own unique response from policymakers. The two main causes of inflation are:

Demand-pull inflation: Demand-pull inflation occurs in a strong economy. Incomes are increasing, people are being paid more, more people are at work, and they are demanding more goods and services. This decreases the total number of goods and services available—more people can afford the limited supply of existing goods and services. This, in turn, raises prices. In general, some demand-pull inflation is a sign of a functioning economy, as people are working and earning enough money to demand everything that’s produced.
Cost-push inflation: Cost-push inflation is caused by an increase in the cost of goods due to causes on the supply end. For example, if the costs of raw materials go up significantly, and businesses cannot keep up production of manufactured goods, this causes the manufactured goods sold at the market to be more expensive. Natural disasters, pandemics, and rising oil prices may all result in cost-push inflation, for example. Many different economic conditions can result in cost-push inflation, and it’s something policymakers may worry about, as cost-push inflation can be difficult to rein in.

We’ll go into more detail below about the typical causes of cost-push and demand-pull inflation. For more about inflation, check out the definition of inflation and our free inflation calculator here.

Causes of Demand-Pull Inflation

Demand-pull inflation happens whenever there’s an increase in the amount of goods and services that people want to purchase. Some of the most common causes of demand-pull inflation include:

Economic growth: As economies grow, and people have more money, they feel more confident in their ability to buy goods and services. This causes the costs of goods and services to increase, as a greater number of people can now afford a larger amount of scarce products.

The expectation of inflation: Sometimes, if enough people, especially large companies, expect inflation to come, they increase their prices in anticipation of coming inflation. This expectation itself then causes its own inflation.

Government spending: Some people believe that excessive government spending may cause inflation. For example, enhanced social benefits programs that supply people with the money they need to purchase essential goods they need to live may slightly increase consumer purchasing power. Additionally, some monetary policies, like printing more money to fund spending, may also contribute to inflation.

Increased demand for exports: When the demand for exports increases, this creates a complicated situation where the currencies involved in the exchange may both experience some inflation.

Causes of Cost-Push Inflation

Cost-push inflation occurs whenever the supply end of the production chain experiences cost increases. That includes situations like:

Raw material costs: Sometimes, the price for raw materials increases. For example, there may be a shortage of a certain type of metal that a computer manufacturer needs to produce computer chips. This will increase the cost of the consumer item, the computer, as the company will likely have to spend more money to obtain the metal they need. Increased prices for oil are another common example—when gas is more expensive, companies have to pay more to ship their products around, so they raise their prices.

Labor costs increase: If the price of labor goes up, the cost of the goods the labor is used to produce is likely to go up as well. For example, if workers are being underpaid, goods and services may have artificially low prices. Then, if workers organize for a fair or living wage, and the cost of labor goes up, goods and services may begin to cost more than the artificially suppressed price, causing inflation.
Unforeseen production obstacles: The goods and services we buy often have parts from all over the world, and require massive amounts of travel to arrive at our local stores. If there’s a drought in a country that supplies a certain crop to an American manufacturer, or a hurricane near an important port, or a pandemic that makes it dangerous for workers to labor in close proximity to each other, companies may face steep increases in the cost of production.

In addition to these two broad types of inflation, there are also many factors that can influence inflation. We’ll go over those next.

Factors That Can Influence Inflation

When policymakers and other experts are concerned about inflation, the following are some of the most common factors that they monitor:

Cost of production

If the cost of production increases, it’s likely that companies will also increase the cost of goods and services. As noted above, this is one of the causes of cost-push inflation.

Prices of goods

When the prices of goods go up (whether because of cost-push or demand-pull inflation), this is a sign that general inflation across the economy may be looming.

Demand for goods

If the demand for goods is increasing—for example, because there is low unemployment—it’s likely that the cost for goods will increase too, at least before production can catch up. That may spur some inflation.

Skilled labor availability

The availability of skilled labor is another potential cause of inflation. If labor necessary to produce certain products is scarce, then it’s likely the cost of those products will increase.

New technology

New technologies often cause disruptions to sectors of the economy. Depending on the way this goes, it may increase demand for certain products, may increase supply, or may increase costs somewhere along the supply chain. All of these factors can affect inflation.

Current money supply

The amount of money currently in circulation can also have an effect on the state of inflation. When there is more money in the economy, it may make the relative value of a unit of currency (like $1) go down. This is why some economists believe that printing more money to pay for government spending could result in inflation.

Counteracting the Effects of Inflation

A little bit of inflation is normal in most economies, but rapid inflation can be detrimental to society, as people can no longer afford many of the goods and services that they rely on. This leads many economists and policy analysts to wonder what inflation’s causes are, and how its adverse effects can be stopped.

The ways that governments can counteract the effects of inflation vary depending on the type of inflation that’s occurring, and the factors that are causing it. Economists are also not in agreement about the best ways to approach inflation. It’s an area that still needs a lot more study.

That’s not particularly helpful when you’re facing high rates of inflation in the present moment. However, that doesn’t mean you’re a sitting duck completely at the mercy of the economy.

As an individual, there are steps you can take to ensure that your money isn’t being adversely affected by inflation:

Invest when you can. Money sitting in a savings account is, because of inflation, slowly losing purchasing power. If you start investing in the stock market, bonds, or other high-yield options, you can offset the effects of inflation (while also incurring other risks). Investing in property, like a home, can also be an effective way to offset inflation, as property often appreciates in value over time.

Ask for a raise. If you haven’t received a raise in months or years, it’s possible that your real rate of pay has decreased. That’s because, as inflation goes up, your monthly paycheck may not go as far. Working for and asking for raises to meet inflation is one way you can offset its effects.
Organize your workplace. If you and your coworkers have not received raises, it may be time to think about workplace organizing. By banding together with your coworkers and committing to deny your labor until your wages are increased, you can secure a higher wage and offset the effects of inflation.

According to the Joint Economic Committee, prices are increasing at a faster pace right now than they have in decades, which is increasing concerns over inflation. While there’s no real emergency, now’s as good a time as any to take proactive measures.

Plan for the Future with Mint

If you’re curious how your income, debts, investment tracking, and more are stacking up against inflation, there’s one way to keep track: Mint. The Mint app lets you plan for your future by aggregating all your different financial info into one convenient place. Sign up now and download the app for free today and get a bird’s eye view of your finances, so you can plan for whatever the future holds, inflation or not!

Sources: NPR | U.S. Bureau of Labor Statistics | Joint Economic Committee

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Source: mint.intuit.com

January 11, 2022

Titan Invest Review – Advanced Strategies for Everyday Investors

At a glance

Our rating

What It Is: Titan Invest is a set-it-and-forget-it investment platform designed to give the average investor a simplified way to invest with a hedge fund-like style.
Advantages: The platform offers an aggressive investment style capable of yielding market-beating returns, an insured and secure investing experience, an intuitive mobile app, and multiple account types.
Disadvantages: Investors are sometimes turned off by the high cost compared to robo-advisors, relatively high account minimum requirements, and a lack of financial planning tools.
Price: Titan Invest charges a monthly or annual fee depending on your account balance. If you have under $10,000 invested, you’ll be charged a $5 monthly advisory fee, while accounts with a value of $10,000 or more are charged a 1% annual fee.

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Additional Resources

Created by Clayton Gardner, Joe Percoco, and Max Bernardy, Titan Invest is a platform designed to give the average investor the ability to follow a hedge fund-like investment strategy without having to manage their portfolios on their own.

Gardner — the CEO of Titan whose long list of credentials includes a history as a financial analyst for a hedge fund — and his team of investment advisors, analysts, and traders manage your portfolio for you.

The goal is to give you the upper hand in the stock market, regardless of whether you’re an accredited investor or not. Although Titan Invest is young, it is already building a history of compelling performance.

Key Features of Titan Invest

Titan Invest is quickly becoming a popular option among the investing community, and for several good reasons. Some of the platform’s most important feature are:

Aggressive Investment Style

The number one reason to consider investing with Titan is the sheer scale of returns the firm has generated for its customers. In 2020, even in the face of the COVID market crash, the firm delivered a 44.42% rate of return, outpacing the S&P 500’s 18.39% and the average robo-advisor return of 14.90% by a wide margin.

On an annualized basis, the company’s investment portfolio has generated 22.4% growth since inception. That’s more than double the long-term average return of the stock market.

Titan generates these returns through an aggressive investment style that’s focused on picking high quality individual stocks and using inverse exchange-traded funds (ETFs) for hedging.

When you sign up, a percentage of your assets is placed in the equities side of the portfolio. The remainder of your portfolio value is invested in inverse ETFs, acting as a personalized hedge. From there, you can either watch your money grow or make regular contributions to increase your earnings potential, leaving the legwork to the pros at Titan Invest.

Three Portfolio Options

When you sign up, you’ll have the option to choose from three different portfolio styles. These include:

Titan Flagship. The company’s Flagship portfolio invests in a small group of large-cap domestic stocks. The average market cap in the portfolio is around $500 billion, with stocks being chosen for their potential to beat the returns of the S&P 500.
Titan Opportunities. The company’s Opportunities portfolio provides access to domestic small- and mid-cap stocks. The average market cap in the fund is about $9 billion, and stocks are chosen for their ability to provide exceptional returns. After all, small-cap stocks have a long history of outperforming their large-cap counterparts. However, for access to the Opportunities portfolio, you’ll need to maintain a minimum account balance of $10,000.
Titan Offshore. The Titan Offshore portfolio gives you access to a select list of international stocks outside the U.S. in both developed and emerging markets. As with the Opportunities portfolio, the stocks are chosen based on their potential to deliver exceptional returns.

Safety Is a Top Priority

When deciding where you’re going to invest your money, safety should be a consideration. As technology becomes more sophisticated, hackers and con artists do too. So it’s important that no matter where you park your money, it’s both safe and insured.

All Titan investment accounts are covered by Securities Investor Protection Corporation (SIPC) insurance on balances up to $500,000. So, if your money becomes lost for any reason other than general losses in the stock market, you can rest assured that you’re covered.

All Titan accounts are held and cleared with APEX Clearing. APEX is one of the largest financial technology companies in the world, with a history of providing the tech necessary for the safe clearing of stock market transactions.

Finally, on Titan’s website, your information will be safeguarded by several layers of security. Titan uses an SSL connection with 256-bit encryption and a firewall to ensure the safety of your data.

User-Friendly Mobile App

Everything happens on the go these days, and the same is true when it comes to investing.

If you enjoy having on-the-go access to your investing accounts, you won’t be disappointed. The Titan Invest mobile app is intuitive and user friendly, offering everything you get when you log in to the platform on a desktop.

Multiple Account Types

Titan offers multiple account types. Whether you’re simply investing for the sake of investing or you’re building a retirement account, there’s an option available for you. The available account types include individual taxable brokerage accounts, traditional IRAs, and Roth IRAs.

Popularity

While a fund or investment service’s popularity should never be the determining factor as to whether you’ll invest in it, it is nice to see that the platform is popular. After all, if investors were losing money, it would be hard to build a buzz around the opportunity.

Titan Invest has already attracted more than $600 million in assets under management (AUM), which is impressive when you think about the fact that the company just launched in 2017.

Advantages of Titan Invest

Considering the fact that so many investors are flocking toward Titan’s services, there’s obviously plenty to be excited about. Here are the biggest advantages to working with the firm:

Low Cost Compared to Typical Hedge Funds. Hedge funds and other active investment managers generally charge performance fees. Sometimes, these fees can be as high as 20% of the profits earned. Compared to these funds, Titan’s 1% per year and $5 monthly fees are far easier to swallow.
Not Just Available to Accredited Investors. Aggressive strategies that lead to gains that significantly outpace the market are typically only accessible by high net worth individuals and other big-money investors. The Titan Invest platform makes these exclusive returns available to the masses.
Compelling Performance. Titan has only been around a few years, but in that time it has generated multiples of the average market returns. The potential to consistently and significantly outperform the market is very appealing to investors.
Referral Program. Titan offers an opportunity to get rid of fees entirely and unlock the Titan Opportunities portfolio without the $10,000 minimum investment through its referral program. Refer two members and you’ll have access to the Opportunities portfolio with a minimum investment of $100. Refer four new members and you’ll get rid of your advisory fees entirely. Even if you only refer one person to the platform, you’ll enjoy a 25-basis-point (0.25%) reduction in your annual fee.

Disadvantages of Titan Invest

So far Titan may seem like a platform built of sunshine and rainbows, but there are some dark clouds in the sky to consider too.

High Risk. The strategies used by the pros at Titan Invest are high-risk/high-reward strategies. Without the use of fixed-income investments and heavy diversification, conservative investors with a low risk tolerance or investors with a short time horizon who can’t afford to absorb market downturns will find the volatility associated with the strategy to be a turnoff.
High Cost Compared to Robo-Advisors. While there are no performance fees, investing with Titan is more expensive than the average robo-advisor. For example, Betterment charges a management fee of 0.25% per year, which makes 1% seem like an exorbitantly high fee. For smaller accounts, $5 per month can actually be pretty pricey. To put it into perspective, if you have a $500 starting balance, $5 per month works out to annual fees of 12%. (Once you have between $6,000 and $10,000, $5 per month works out to an annual fee of 1% or less.)
Account Minimums. All Titan accounts have a $100 minimum investment, which isn’t a big deal. However, if you want access to the Opportunities portfolio, you’ll need to maintain a minimum balance of $10,000, which is too high for some investors.
Lacks Additional Features. Titan Invest doesn’t offer tax-loss harvesting, financial advisors, or financial planning, all of which are generally available when working with the company’s competitors.

You Should Invest With Titan Invest If…

There’s no such thing as a one-size-fits-all investing product. Everyone has different goals, a different risk tolerance, and different amounts of capital to put into the investing process. These factors make an investor a perfect fit for the Titan platform:

You Have $6,000 or More to Invest. With balances under $6,000, the fees you’re charged will work out to be more than 1% annually. That’s an expensive pill to swallow, and chances are that you’ll find better opportunities elsewhere.
You Have a High Risk Tolerance. Only investors with a healthy appetite for risk should ever consider an aggressive investing strategy that’s solely focused on investments in stocks. Risk-averse investors should consider other opportunities.
You Are Young. Due to the high risk associated with the Titan Invest strategies, younger people are the best candidates for this investing style. The younger you are, the more risk you can accept because you’ll have more time to recover should a significant drawdown take place. Investors nearing retirement or with short-term time horizons simply don’t have the time to recover from significant losses and should consider investing in a product or assets with limited volatility.

Final Word

All told, the Titan Invest platform is a great option for the audience it was designed to serve. Young investors with a high risk appetite will benefit greatly from the firm’s aggressive investment strategies.

Regardless of your age, it’s important to keep a sizable balance in your account if you’re going to use Titan to ensure that fees don’t eat into too much of your profits.

On the other hand, if you’re not a young investor or don’t have a healthy appetite for risk, it’s likely best to look into low-cost, highly diversified ETFs and choose an asset allocation that fits your investing goals and timeline. Also, it won’t hurt to mix some fixed-income assets in to further shield your portfolio from volatility.

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The Verdict

Our rating

Titan Invest is a great option for investors with $6,000 or more to start with who are willing to accept increased risk for an opportunity to beat the market. Offering up a hedge-fund investment style with a history of compelling performance, the platform has become a popular option for individual investors.

The platform offers compelling returns on stocks, but that’s about it. Without fixed-income allocation and financial planning features, the platform leaves much to be desired for the average investor.

Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

January 11, 2022

People are Buying Homes and Cars Again â How to Boost Your Credit Score for Either

Updated September 2, 2021

Although the COVID-19 pandemic isn’t over yet, Americans are totally ready to move into a post-pandemic era. Here’s how you can tell: Suddenly — BOOM! — way more people are interested in buying houses and cars.

Seriously, the housing market in lots of cities has gone from red-hot to white-hot, and U.S. car sales are picking up noticeably, too. Zillow predicts the number of home sales will grow by nearly 22% in 2021, the biggest increase in nearly 40 years. And CNBC reports that U.S. auto sales could increase as much as 10% this year.

Are you interested in buying a home or a car? Here’s something you need to start thinking about right now: Your credit score. We know that sounds boring, but it’s actually super important, if you’re going to be signing up for a car loan or a mortgage sometime this year.

The higher your score is, the better deal you’ll likely get on your loan. So a good credit score can save you thousands of dollars over the life of a five-year car loan, and tens of thousands of dollars over the life of a 30-year mortgage. For example, on a $21,000 auto loan, the total cost difference between someone with very good credit and someone with fair credit can be $5,000 or more.

If you’re looking to get your credit score back on track — or if you just want to bump it up some more — try using a free platform called Credit Sesame.

Within 90 seconds, you’ll be able to see your credit score, as well as a breakdown of what factors are contributing to your score and personalized tips on how to manage your credit better.

This way, you’ll be in a good position for that major life purchase.

How to Boost Your Credit Score Before Buying a House or Car

First, find out what your score is, right away. See what’s affecting your credit — specifically, see what’s holding you back. Your score will be based on your payment history, how much of your credit limit you’ve used, and a few other factors.

Consult the personalized tips you’ll get from Credit Sesame. If you make a couple of strategic decisions and manage your credit a little better, you could get tipped over the edge into the next-highest bracket. That could save you thousands.

James Cooper, of Atlanta, used Credit Sesame to raise his credit score nearly 300 points in six months.*

“They showed me the ins and outs — how to dot the I’s and cross the T’s,” he said.

Getting your free credit score takes just 90 seconds. Your wallet and your checking account will thank you down the road.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He has a Credit Sesame membership.

*Like Cooper, 62% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 21% see at least a 50-point increase after 180 days.

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Source: thepennyhoarder.com

January 9, 2022

5 Women on Things They Wish They Knew About Finances Sooner

For many women around the world, weâve experienced so much trial and error as it relates to finances. The transitions in life begin in our adolescent years which develop our ideals about money. As we mature, we quickly realize that our wants and needs naturally change over time, directly impacting our money goals. Thereâs no better way to learn about finances as a woman than from other women â take a look at these key lessons and begin these discussions with other women in your life.

Money Mindset

Shannah Compton Game, Certified Financial Planner and Host of Millennial Money Podcast

I wish I had understood the power of my money mindset and the role that plays in financial success. After spending 12 years as a Certified Financial Planner working with clients, I quickly saw that the one thing separating most people from achieving their money goals was their mindset; how they think, act and feel about their money. I wish I had understood that my money journey isnât meant to be linear. Working with hundreds of clients over the last decade has shown me that money definitely ebbs and flows for most people. Itâs easy to get hung up on your money mistakes and choices that you wish you would have made. However, the magic is found in embracing your money journey and doing the best you can to not give money more power than it deserves in your life.

Long Term Planning, Investments and Wealth Building

Erin Lowry, Author of Broke Millennial Talks Money: Scripts, Stories, and Advice to Navigate Awkward Financial Conversations

While I know I should probably give a more traditional answer like “invest in a Roth IRA when I got my first job!” (which is true, I wish I’d done that in college), my answer is actually about learning to invest in relationships. I was incredibly fixated on earning and saving money in my early twenties. But to the point of almost always saying no to invitations to dinners, happy hours, get togethers, small trips — you name it. There is, of course, nothing wrong with focusing on building financial security for yourself. In fact, you should have that as a goal. It’s also important to have some balance in there as well.

Investing in relationships doesn’t have to cost a lot of money, but it’s something you should consider balancing in with your financial journey. Saying no over and over means people will eventually stop asking you to participate. Instead, offer a more cost-effective alternative. “I want to spend time with you, but instead of doing bottomless brunch, how about we get a bagel and go for a walk in the park?” You can also open up with your friends about your financial goals to give them some context about why you can’t always indulge in the activities they want to do.

Deidra Willis, Certified Financial Planner

The first time I finally took the chance to invest, I wish I would have done it sooner.Â Long of the short, you wonât know everything about the company you choose to invest or have an affinity for, yet, if you have 80% of the information, do not get stuck on paralysis by analysis.Â When I finally did, it was âwhatâs next?â

The earlier you plan, the less it takes. Time compounds and works for you. I did an awesome job of starting this right out of college, however, I did not know the same worked for insurances and other financial investments.

Shannah Compton Game, Certified Financial Planner and Host of Millennial Money Podcast

I wish I had understood that there are so many ways to grow your wealth. Growing your wealth isnât about following a set 10-step checklist. Itâs about figuring out what is really important to you and then being intentional with your spending and savings to help fund the life you want to live. I wish I had understood how to invest in stocks from a very early age without having fear come into play. I grew up thinking that men were the only people successful at investing. Because of that, investing always felt scary to me. We need to teach everyone from a really early age how to be savvy investors without fear and greed.

Debt & Money Management

Maggie Germano, Financial Writer, Speaker, and Financial Educator

I wish I knew that I could make payments on my student loans while I was still in college. Even if I could only afford small payments, making a dent before I graduated would have felt really good. Relatedly, I wish I knew that a “refund” from my student loans meant I still had to pay back with interest later. And that I should use it to pay off the loan, rather than spending it elsewhere. I also wish I knew that I didn’t have to isolate myself in order to stick to a budget and save money. There are ways to be social while stick living within your means. I spent too much time at home, by myself, before I realized that!

Elle Martinez, Founder of Couple Money and Host of Couple Money PodcastÂ

For me, I think one of the biggest helps when it comes to finances is doing a goal-based budget. I’m someone who needs something concrete to focus and keep me motivated, especially when working on paying off our debts.

The second piece is more related to the whole marriage and money mix which is having monthly money dates.

By having these regular and lowkey check-ins it helps us adjust the numbers as needed. We’re able to catch things early. This way they’re not a big deal instead of having spending or debts snowball out of control.

Entrepreneurship

Deidra Willis, Certified Financial Planner

In business (so this is more of a tip for the independent employees/contractor/1099) every dollar you earn is not yours!Â Separate your money and the only thing to operate as an employee is your pay until your bank account can sustain you, your team, and your expenses for a month. I see the excitement of earning and spending, but not properly planning as a business.Â A lesson for me as savvy as I was and am was that business operations must have financial structure, even when the expense is not there yet!

As we can see, there are many ways to approach money management, investments and establishing your own money mindset. This conversation doesnât stop here! Rally together a group of family and friends to share your own personal lessons from money. Now you can incorporate some new approaches as you continue to prosper on your financial journey.

The post 5 Women on Things They Wish They Knew About Finances Sooner appeared first on MintLife Blog.

Source: mint.intuit.com

January 7, 2022

Is Budgeting Overrated?

When I was younger, I tracked and budgeted my spending daily, and even though constant attentiveness paid off for me, it didn’t pay off in the way you might expect. On that note, I don’t think everyone needs a budget. In fact, for some, I think having a budget can backfire.

Who Needs a Budget?

First, let me be clear that I do believe some people need a budget. If you’re living paycheck to paycheck, as up-to-two-thirds of Americans are, you should absolutely identify where every dollar is going. And, ideally, use that information to make necessary changes.

Anyone undergoing a major life change should also monitor their budget for at least a few months. For example, as I move from a small town in Georgia to a midtown condo in Chicago, you better believe I’m laser-focused on my spending. Consider utilizing apps like You Need a Budget, one of the most popular budgeting apps, to guide you through any major transitions.

If you’re having a child, starting a new job, or even getting married … well, you need a budget (the philosophy … and maybe the app, too).

The folks over at You Need a Budget have also written extensively on successful budgeting, which could also be helpful through your transition.

How Can Budgeting Backfire?

My move away from budgeting began in my final years of graduate school. Like most grad students, I was making very little – close to the California minimum wage while living in the San Francisco Bay Area. Tracking every dollar, every month, for years, I could no longer avoid the obvious: The problem wasn’t that I was bad with spending. Rather, the problem was I had so little to spend.

I couldn’t budget myself out of that problem. Focusing on the details of spending, I lost sight of the big picture. I needed to increase my income … by a lot.

As I said before, tracking my daily spending helped me – even though it didn’t help me identify my unnecessary costs as I had hoped, I did learn what my real issue was.

The adage is true: if all you have is a hammer, every problem looks like a nail. So, if all you think about is budgeting, every financial issue is a spending problem.

Can we budget and think about raising our incomes?

Perhaps – but we must recognize our limited attention. We don’t have unlimited time or an unlimited ability to make decisions. Budgeting can be hard work and very time consuming. If you’ve only got enough mental energy for one hour of personal financial work each week, then determine what is the best way for you to spend that time and energy.

Alternatives to Budgeting

If you, like me, are exhausted by budgeting, you need to find alternative solutions. For example:

Focus on raising your income. Many people settle for lower incomes than they deserve, however the single best thing you can do for your personal finances is to make more money. For people who are employed, the simplest way to raise your income is to ask for a raise. If you’ve got spare time, consider joining the gig economy. And, for real big pay bumps, you may need to get a new job.
Reduce (or eliminate) fixed expenses. A major limitation of traditional budgeting is the focus on discretionary spending. Decisions around discretionary expenses must be made repeatedly, requiring constant attention and making it difficult to focus on the big picture. Most of our spending is fixed, and according to the U.S. Bureau of Labor Statistics: 70% of our budgets go to housing, transportation, health care and taxes and much of the remaining 30% goes toward minimum, necessary food and clothing expenses. So, if you want to see profound changes to your bottom line, you must cut some of your fixed expenses. As painful and inconvenient as this can be, it’s usually the case that cutting expenses just once will improve your spending. For example, a couple that sells off their second car could pocket $10,000 immediately and then avoid $10,000 each year in expenses. Or, a single person living in a two-bedroom high-rise apartment could move into a one-bedroom apartment in midtown and save $2,000 a month — $24,000 a year!
Make a spending plan. While some people equate a budget with a spending plan, they are different. Budgets tend to look backward and focus on the minutiae. In contrast, a spending plan looks forward and focuses on big-picture goals. Periodically review your spending and set goals for where you want your money to go. Make sure your needs and savings are covered and paid for first before approximating how much you can spend on everything else. Avoid getting lost in the weeds – you need to be fresh and ready for when you ask your boss about that promotion.

Ultimately, the best approach to spending is the one that works for you. If you feel the need to keep a budget, here’s another idea: Get someone else to track your spending for you. Consider offloading your budgeting onto a financial planner. Then, you get the best of both worlds: the budget and the attention you need to focus on the big picture and live your life.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Assistant Professor of Financial Planning, The American College of Financial Services

Matt J. Goren is an Assistant Professor of Financial Planning at The American College of Financial Services who focuses on the interplay of personal finance and psychology. In addition to teaching and developing content, he provides strategic consulting on financial literacy initiatives and hosts a personal finance radio show, Nothing Funny About Money, which was named 2018’s most outstanding consumer financial information resource by the AFCPE.

Source: kiplinger.com

January 7, 2022

Are Robo-Advisors Worth It? Are They Safe?

When robo-advisors first appeared on the financial scene nearly 15 years ago, they were a novelty. Now these automated portfolios have become a staple offered by numerous financial companies, providing many people with a reliable, cost-efficient way to invest for retirement and other goals — while helping to manage certain market and behavioral risks.

Because robo-advisors typically rely on sophisticated computer algorithms to help investors set up and manage a diversified portfolio, some have questioned whether technology alone can address the range of needs that investors may have over time.

Others note that the lower fees and lower minimum balance requirements typical of most robo-advisors, in addition to the automated features, may provide a much-needed option for new investors. Could a robo-advisor be the right choice for you? It helps to understand how they work in order to weigh the pros and cons.

Is a Robo-Advisor Right for You?

Robo-advisors typically use artificial intelligence to create retirement and financial planning solutions that are tailored to people’s individual needs. Here are some questions to ask yourself, when deciding whether a robo-advisor is right for you.

How Does a Robo-Advisor Pick Investments?

While the term robo-advisor can mean different things depending on the company that offers the service, investors usually fill out an online questionnaire about their financial goals, risk tolerance, and investment time frames. On the back end, a computer algorithm then recommends a portfolio of different securities based on those parameters.

For example one person may be investing for retirement, another saving for the purchase of a home. Depending on each person’s preferences, the robo-advisor generates an asset allocation that aligns with their goals, or suggests portfolio options they can choose from. A portfolio for someone nearing retirement age would typically have a different allocation versus a portfolio for someone in their 20s, for example. Depending on these details, the service might automatically rebalance the portfolio over time, execute trades, and may even conduct tax-loss harvesting.

Can I Choose my Own Investments?

To a limited degree, yes. A robo advisor typically has a range of investments they offer investors. Usually these are low-cost index ETFs, but the offerings can vary from company to company. In most cases, though, your investment options are confined to those available through the robo-advisor.

As the industry grows and becomes increasingly sophisticated, more companies are finding ways to offer investors new options like themed ETFs, stocks from different market sectors, socially responsible investing options, and more.

Who Manages the Portfolio?

Part of the appeal for some investors is that these portfolios are automated and require less hands-on involvement. This may be useful for people who are new to the process of setting up and managing a diversified portfolio, or who don’t feel comfortable doing so on their own. In some cases, a robo-advisor service may also offer a consultation with a live human advisor.

That said, in most cases robo-advisor services are somewhat flexible. Even though you’ve set up an automated plan, it’s still possible to change your asset allocation if your preferences change.

Are There Risks Involved in Using a Robo-Advisor?

Investment always involves some exposure to market risks. But robo-advisors may help manage behavioral risk. Many studies have shown that investors can be impulsive or emotional when making investment choices — often with less than optimal results. By reducing the potential for human error through the use of automation, a robo-advisor may help reduce potential losses.

What do Robo-Advisors Cost?

While there are some robo-advisor services that have higher minimum balance requirements or investment fees, the majority of these services are quite cost efficient. In some cases there are very low or no minimums required to set up a portfolio. And the management fees are typically much lower than what you’d pay for a human advisor. With SoFi’s automated investing feature, for example, you can get started with as little as $1 and you don’t pay any SoFi management fees (although there are typically fees or expense ratios associated with the investments in the portfolio).

Pros and Cons of Robo-Advisors

Hopefully, the questions above have clarified the way a robo-advisor works and shed some light on whether a robo service would be right for you. In addition, there are some pros and cons to keep in mind.

Pros of Robo-Advisors

Saving for Retirement

It’s true that you can use a robo-advisor for almost any short- or long-term goal — you could use a robo-advisor to save for an emergency or another savings goal, for example. But in many ways these services are well-suited to a long-term goal like retirement. Indeed, most robo services offer traditional retirement accounts like regular IRAs, Roth IRAs, SEP IRAs.

The reason a robo-advisor service can be useful for retirement is that the costs might be lower than some other investment options, which can help you keep more of your returns over time. And the automated features, like rebalancing and tax optimization, can offer additional benefits over the years.

Typically, many robo portfolios require you to set up automated deposits. This can also help your portfolio grow over time — and the effect of dollar cost averaging may offer long-term benefits as well.

Diversification

Achieving a well-diversified portfolio can be challenging for some people, research has shown, particularly those who are new to investing. Robo-advisors take the mystery and hassle out of the picture because the algorithm is designed to create a diversified portfolio from the outset; you don’t have to do anything. In addition, the automatic rebalancing feature helps to maintain that diversification over time — which can be an important tool to help minimize risks. (That said, diversification itself is no guarantee that you can avoid potential risks completely.)

Automatic Rebalancing

Similarly, many investors (even those who are experienced) may find the task of rebalancing their portfolio somewhat challenging — or tedious. The automatic rebalancing feature of most robo-advisors takes that chore off your plate as well, so that your portfolio adheres to your desired allocation until you choose to change it.

Tax Optimization

Some robo-advisors offer tax-loss harvesting, where investment losses are applied to gains in order to minimize taxes. This is another investment task that can be difficult for even experienced investors, so having it taken care of can be highly useful — especially when considering the potential cost of taxes over time.

Want to start investing?

Our robo-advisors can build a portfolio to fit your
needs and risk – with no fees!

Cons of Robo-Advisors

Limited Investment Options

Most automated portfolios are similar to a prix fixe menu at a restaurant: With option A, you can get X, Y, Z investment choices. With option B, you can get a different selection, and so on. Typically, the securities available are low-cost, index ETFs. It’s difficult to customize a robo account; even when there are other investments available through the financial company that offers the robo service, you wouldn’t have access to those.

In some cases, investors with higher balances may have access to a greater range of securities and are able to make their portfolios more personalized.

Little or no Personal Advice

The term “robo-advisor” can be misleading, as many have noted: These services don’t involve advice-giving robots. And while some services may allow you to speak to a live professional, they aren’t there to help you make a detailed financial plan, or to answer complex personal questions or dilemmas.

Again, for investors with higher balances, more options may be available.

Performance

Robo-advisors have become commonplace, and they are considered reliable methods of investing, but that doesn’t mean they guarantee higher returns — or any returns. We discuss robo advisor performance in the section below.

Robo-Advisor Industry

Robo-advisors have grown quickly since the first companies launched in 2008-09, during and after the financial crisis. Prior to that, financial advisors and investment firms made use of similar technology to generate investment options for private clients, but robo advisers made these automated portfolios widely available to retail investors. The idea was to democratize the wealth-management industry, by creating a cost-efficient investing alternative to the accounts and products offered by traditional firms.

Today, the robo adviser market is worth about $1 trillion (estimates vary), and there are dozens of robo-advisors available — from independent companies like SoFi Invest®, Betterment, blooom, and Ally, as well as established brokerages like Charles Schwab, Vanguard, T. Rowe Price, and many more.

While these figures are still miniscule compared to the $100 trillion in the global asset-management industry, robo-advisors are seen as potential game-changers that could revolutionize the world of financial advice.

Because they are direct-to-consumer and digital only, robo-advisors are available around the clock, making them more accessible. Their online presence has meant that the clientele of robo-advisors has tended to skew younger.

Also, traditional asset management often have large minimum balance requirements. At the high end, private wealth managers could require minimums of $5 million or more.

The cost of having a human financial advisor can also drive up fees north of 1% annually, versus the 0.25% of assets that robo-advisors typically charge.

How Have Robo-Advisors Performed in the Past?

Like any other type of investment — whether a mutual fund, ETF, stock, or bond — the performance of robo-advisors varies over time, and past performance is no guarantee of future returns.

Research from BackEnd Benchmarking, which publishes the Robo Report, a quarterly report on the robo-advisor industry, analyzed the performance of 30 U.S.-based robo-advisors. As of Sept. 30, 2021, the 4-year total portfolio returns, annualized and based on a 60-40 allocation, ranged from 6.51% to 10.98%. (Data not available for all 30 firms.)

The Takeaway

Despite being relative newcomers in finance, robo-advisors have become an established part of the asset management industry. These automated investment portfolios offer a reliable, cost-efficient investment option for investors who may not have access to accounts with traditional firms.

Robo advisors don’t take the place of human financial advisors, but they can automate certain tasks that are challenging for ordinary or newbie investors: selecting a diversified group of investments that align with an individual’s goals; automatically rebalancing the portfolio over time; using tax-optimization strategies that may help reduce portfolio costs.

Curious to explore whether a robo-advisor is right for you? When you open an account with SoFi Invest®, it’s easy to use the automated investing feature. Even better, SoFi members have complimentary access to financial professionals who can answer any questions you might have.

Check out automated or active investing with SoFi Invest today.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected] Please read the prospectus carefully prior to investing. Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
SOIN20270

Source: sofi.com

January 1, 2022

Retirement Tips from World-Famous Authors to Live Happily Ever After

This is a story about dreams and money.

After all, financial planning starts with one personal question: What is your vision of an ideal life? To rewrite that question in more affecting way: What would you most regret not having done if you were to die tomorrow?

In the book The Top Five Regrets of Dying, Bronnie Ware writes the most common regret of patients she has spoken with was: “I wish I’d had the courage to live a life true to myself, not the life others expected of me.”

What story do you ultimately want to tell about your life? What events and characters would make up your idea of a “rich life”?

Maybe you’ve dreamed of visiting every continent or opening your own business after you retire. Or maybe you dream of finally sitting down to write that book you’ve been thinking about for years.

You might be on to something there, because there’s a lot we can learn from the habits of notable authors who excel in the craft of telling stories. Read on to discover 10 quirky writing methods famous authors are known for and see how following their lead can help you build your wealth and craft a happy retirement.

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1. Commit to a Consistent Schedule

Author Ernest Hemingway sits at a typewriter under a brilliant sky.

When working on a novel, the author Haruki Murakami wakes at 4 a.m. and writes for five to six hours every day. Ernest Hemingway was a morning writer, too, toiling at his standing desk until he could put 500 good words down on the page. Stephen King aims for 2,000 words.

What separates good writers from bad isn’t so much talent as it is consistency. Good writers show up to work whether inspiration strikes or not.

E.B. White put it this way: “A writer who waits for ideal conditions under which to work will die without putting a word on paper.”

The moral of the story: There are no shortcuts. Consistency is also a necessary part in creating the financial conditions for pursuing your dreams. You can’t just bank on a large financial windfall to become financially independent and time rich.

Taking consistent financial steps is the only proven method that works for everyone. Consider that Americans who follow a financial plan have almost double the savings than those without a plan ($460,000 average savings vs. $239,000), according to TD Ameritrade’s Goal Planning Survey.

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2. Make It a Priority

A woman with a coffee cup sits at a laptop at sunrise on a dock.

It’s not a coincidence many household-name writers worked in the morning. They prioritized writing over all other daily distractions. Mark Twain, for example, woke up early, ate a large breakfast and then worked without interruption until dinner. Should his family need something, they blew a loud horn to call him.

The moral of the story: Whatever you’re passionate about should be relatively nonnegotiable. Of course, that’s challenging when you have a family, full-time job, other interests, etc.

The trick is to prioritize. Track how you spend your time and money, then reallocate them based on what matters most to you. That could even mean adjusting your lifestyle — driving a less fancy car, moving closer to your office or switching to a more flexible job.

Such a calculated approach allows you to focus your finite resources on the things you truly value, which can lead to an improved quality of life. In a study from the University of Arizona, people who followed a budget and were more conscious of their spending reported higher levels of happiness and less stress.

Simply put, what you value and genuinely know makes you happy is worth making a priority.

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3. Optimize Your Efforts

American poet and author Maya Angelou speaks during an interview at her home on April 8, 1978.

With any big dream, it helps to have some luck. But taking care of the things you can control goes a long way toward success.

In every city Maya Angelou lived, she rented a hotel room nearby for the sole purpose of writing in an undisturbed space. Neil Gaiman, as told on the Tim Ferris podcast, works under a self-imposed rule that he can sit down at his desk and write or do nothing else other than stare out the window. Eventually writing becomes more attractive than watching grass grow.

Paradoxically, restrictions often unleash your creativity. It’s all about implementing controls that put you in the right mindset and keep you focused.

The moral of the story: Whatever your dream, think of ways you could optimize your efforts. And apply the same tactics to your money. One method is taking yourself out of the equation by automizing your finances. For example, automatic deductions from your paycheck into a retirement account and/or savings account.

One study compared 401(k) participants and found target-date investors could potentially realize up to 50% more retirement wealth relative to non-target date investors over a 30-year time period. Essentially, being restricted in their investment decision-making kept target-date investors from making costly mistakes, such as choosing the wrong asset allocation at the wrong time.

4 of 10

4. Don’t Start Without a Story Idea

A light bulb glows above the point of a pencil.

Nobel Prize winner Toni Morrison, speaking of her writing process, said, “I always know the ending; that’s where I start.”

When you know where you want to go, you can develop the actions to get you there. In a novel, it’s the characters, scenes, themes, etc., that all lead to your catharsis and conclusion.

The moral of the story: The story you want to tell about your life should guide your choices. How else can you make the right decisions if you don’t know what outcome you’re working toward?

Which is why you shouldn’t make financial decisions without first establishing financial goals. They determine how much money you need, when you need it, how much risk you can take, and so on.

Open-ended conclusions are acceptable in literature, but not so much when it comes to your money.

5 of 10

5. Keep It Simple

You won’t find many books about writing that don’t include Mark Twain’s famous rule: Don’t use a five-dollar word when a fifty-cent word will do.

Good writing is clear and concise. Yet many aspiring writers think they must write flowery prose on the level of Shakespeare or Proust. This notion of perfection though can do more harm than good.

The moral of the story: Take it from American novelist Anne Lamott, who said: “I think perfectionism is based on the obsessive belief that if you run carefully enough, hitting each stepping-stone just right, you won’t have to die. The truth is that you will die anyway and that a lot of people who aren’t even looking at their feet are going to do a whole lot better than you, and have a lot more fun while they’re doing it.”

It is a relevant metaphor for many things we do.

Case in point: investing. Who wouldn’t want a perfect portfolio that earns a maximum return every time? The problem is that chase for perfection, unless you can predict the future, will inevitably set you up for failure.

A Morningstar study found the average investor underperformed the funds they invested in over multiple 10-year periods. It was a result of chasing performance. Many investors succumb to greed and fear, buying high and selling low. Whereas, setting a diversified asset allocation and just sticking to it can produce better results over time.

6 of 10

6. Develop Your Own Voice

One of the most important qualities of a writer is their voice. It encompasses the way you put words together and your outlook of the world. It is what makes your writing stand out.

A writer’s voice is wholly unique. So, it’s not worth trying to write in the same voice of another writer.

It’s equally as unproductive to compare your success to others. Prolific short story writer and novelist Joyce Carol Oates put it this way: “Writing is not a race. No one really ‘wins.’ The satisfaction is in the effort, and rarely in the consequent rewards, if there are any.”

The moral of the story: You may share dreams or goals with others, but all our situations are unique. If you are constantly comparing your life to others, you could find yourself on the dreaded hedonic treadmill. Always striving for bigger and better to keep up.

Consider that personal savings rates remain lower than a few decades ago. A paper from a team of economists posits one significant contributor is the propagation of media. We are now more exposed than ever to how other people spend money. Subsequently, we spend more and save less.

7 of 10

7. Be Patient

Authors Zelda Sayre and F. Scott Fitzgerald sit in the garden in the Sayre home in Montgomery, Ala., in 1919. The following year Scott and Zelda would marry.

F. Scott Fitzgerald’s great American novel, The Great Gatsby, took 2½ years to write. J.K. Rowling worked on the first Harry Potter book for six years. Meanwhile, J.R.R. Tolkien spent 16 years writing The Lord of the Rings.

Rarely are masterpieces created in a day. So be patient and use your time wisely.

The moral of the story: Time is a powerful tool, especially when working toward long-term goals. Your skills can improve, your habits can sharpen. For building your financial resources, the effect of compounding cannot be overstated. The money you invest can earn and return, and that return can earn and return, and so on. This snowball effect can produce exponential growth over time, if you remain patient and disciplined with your portfolio.

8 of 10

8. Never Think It’s Too Late

Raymond Chandler was 51. Annie Proulx was 57. Frank McCourt was 66. These are the ages each respective author published their first book. The point is that it’s never too late to get started.

If you have a dream, there are ways to make it possible.

The moral of the story: Even people who are behind on saving for retirement can get there. You can delay Social Security, work a few years longer and start maxing out your retirement accounts. Hypothetically, you could start saving at age 50, maximize your 401(k) with catch-up contributions and end up with more than $1 million by age 70 (assuming an 8% annual return).

9 of 10

9. Live a Life Worth Writing About

Colum McCann, an Irish writer of literary fiction, including "TransAtlantic," is seen in Mantova, Italy, in September 2007.

Some writers are known to carry around pocket-sized notebooks or index cards to write down daily observations that could be used in a story. Life is rich with inspiration, if you know where to look.

It could be argued then that the more enriching your personal experiences, the greater the material you’ll have for writing a book. Essentially, your well-being is improved by what you do rather than what you own. Research suggests people feel more satisfied and happier when spending money on experiences than material things.

The moral of the story: Pursuing experiences that are worth writing about is money well spent.

Listen to writer Colum McCann: “Step out of your skin. Risk yourself. This opens up the world. Go to another place. Investigate what lies beyond your curtains, beyond the wall, beyond the corner, beyond your town, beyond the edges of your own known country.”

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10. Remember What’s Really Important: Relationships

Friends of all ages stand arm in arm, smiling.

Writing is a solitary endeavor. But publishing a book is a group effort. To make it all possible, you generally have to rely on the efforts of a publisher, editor, publicist, booksellers and, of course, readers. Not to mention supportive spouses and family who give you the space to chase your dreams.

Whatever you dream of doing, don’t neglect the people around you. It is through the company we keep that we find the most meaning in life.

As Lydia Denworth, author of the book Friendship, told The Wall Street Journal about a major Harvard happiness study tracking the lives of men from age 20 to 80: The best predictor of their health and happiness by age 80 was not their wealth or careers. It was their relationships at age 50.

The moral of the story: The fact is time with your loved ones is a limited resource. You can never earn it back. All the books you’ve written, accolades you’ve received, places you’ve gone, will mean little without the people you love.

Ultimately, creating a plan can increase the chances of turning your dreams into reality. And the things you do in your financial life can help facilitate that.

Part of the financial planning process is to put your dreams to paper.

So, what would you most regret not having done if you were to die tomorrow?

Now, start writing.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Manager of Investor Education, Advance Capital Management

Jacob Schroeder is the Manager of Investor Education at Advance Capital Management (www.acadviser.com/). His goal is to help people make more informed financial decisions and live happier lives. He is also the creator of the personal finance blog Incognito Money Scribe (incognitomoneyscribe.com/), exploring the mystery and meaning of money.

Source: kiplinger.com

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