Source: Contentful’s Generative AI Professional Usage and Perception Survey “Gen AI is here to stay. It has the power to radically transform how we work together across teams and departments,” said Karthik Rau, CEO of Contentful, in a statement. “By fostering a culture of knowledge and responsible usage, organisations can empower their workforce to harness … [Read more…]
Known for: Contemporary furniture, reasonable prices
Luxury furniture does not always have to denote a high price point. This family-owned brand created a line of contemporary furniture that was created to stand the test of time. Spanning several design styles, TOV is a one-stop shop for wallet-friendly furniture.
Best Durable Furniture
Sundays Company
Best Durable Furniture
Sundays Company
Price range: $$
Known for: Seating, modern bedding
Sundays is committed to making durable pieces, which can withstand both wear and tear, and the ever-changing trending market. The result is that they have made some of the most comfortable, solution-oriented furniture. While many of their pieces are modern and neutral, they often have a hidden feature, whether that’s extra storage, a fold-out bed, or just truly comfortable seating.
Best Retro-Inspired Furniture Store
Soho Home
Best Retro-Inspired Furniture Store
Soho Home
Price range: $$$
Known for: Retro-inspired design
Soho Home has created a collection of high-end design, that is so intricate and special that its rarely seen in contemporary furniture. An offshoot of Soho House, the members-only clubs scattered across the globe, this furniture brand came about to satisfy their members who wanted to recreate the interior of the homes. The end result is a collection that is luxurious and opulent.
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Best Trendless Furniture Brand
Casterly
Best Trendless Furniture Brand
Casterly
Price range: $
Known for: Contemporary design, high-quality pieces
Tired of endless middlemen and fast-changing furniture trends, the minds behind Casterly decided to create a brand that they would oversee entirely, from production to shipping. With a mix of styles and genres to choose from, Casterly created luxury furniture with reasonable prices, that can withstand trends,
Best Craft-Focused Furniture Brand
Maiden Home
Best Craft-Focused Furniture Brand
Maiden Home
Price range: $$$
Known for: High-quality material
At Maiden Home, every material is hand-chosen for not just its beauty, but for its durability. Every piece of furniture is carefully thought through, and sometimes special artisans must be employed to create never-before-seen materials. Handmade in North Carolina, this brand is keeping heritage and craft alive in their work.
Best Cottagecore Furniture Brand
ABC Carpet & Home
Best Cottagecore Furniture Brand
ABC Carpet & Home
Price range: $$$
Known for: Modern design, luxurious rugs
ABC Carpet & Home is a New York City landmark, known for their rich offerings across luxury rugs and furniture. With an eye both on modern design and on antique shapes, they stock some of the most eye-catching designs on the market. Many of their pieces stray away from minimalism, instead leaning towards the English country style.
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Best Maximalist Furniture
Anthropologie
Best Maximalist Furniture
Anthropologie
Price range: $$
Known for: Patterned, maximalist furniture
Anthropologie is known for their fashion, but their furniture and home decor is some of the most unique on the market. For anyone who wants their home to feel one-of-a-kind and bold, Anthropologie does not shy away from incorporating colors, patterns, or ornate design.
Best Timeless Luxury Furniture Brand
Knoll
Best Timeless Luxury Furniture Brand
Knoll
Price range: $$$
Known for: Bauhaus design
For more than 80 years, husband-and-wife duo Hans and Florence Knoll’s brand has remained committed to Bauhaus designs. Many of the brand’s designs are now replicated by other labels, but the originals continue to reign supreme. With a true eye for modern design, Knoll’s office and dining furniture lines contain some of the brand’s most iconic pieces, like the oft-reproduced Saarinen Dining Table and Barcelona Chair.
Best Modern Luxury Furniture Brand
Eternity Modern
Best Modern Luxury Furniture Brand
Eternity Modern
Price range: $$$
Known for: Modern design, iconic pieces
This online furniture retailer stocks up on some of the most iconic and sought-after designs from throughout history. From Mario Bellini sofas to Le Corbusier daybeds, Eternity Modern makes it easy to source, purchase, and own insiders’ favorite luxury furniture.
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Best Secondhand Luxury Furniture Seller
Chairish
Best Secondhand Luxury Furniture Seller
Chairish
Price range: $$
Known for: Vintage and pre-owned furniture
Chairish makes it easy to shop and sell furniture from truly genius designers, from George Nakashima wooden chairs to the forever-loved Eames lounge chair. Along with vintage items, you can also find contemporary designers sold secondhand at Chairish as well, discovering huge discounts and rare pieces.
Best Danish Luxury Furniture Brand
Audo
Best Danish Luxury Furniture Brand
Audo
Price range: $$
Known for: Scandinavian design
Audo is a Danish furniture brand that embraces its homeland’s eye for minimalist design with a focus on quality materials. The brand brought together several designers and Danish studios to create its furniture and home accessories, from the sheepskin lounge chairs to the stunning wall decor.
Most Customer-Friendly Luxury Furniture Seller
Design Within Reach
Most Customer-Friendly Luxury Furniture Seller
Design Within Reach
Price range: $$
Known for: Luxury furniture, iconic designs
Design Within Reach is the go-to online retailer for luxury furniture. Founded with the intention of bringing online iconic designs that were previously available only in hidden showrooms, Design Within Reach’s collaborations with designers and brands often involve revered interior-design pieces, like the Eames chair.
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Best Classic Luxury Furniture Brand
Roche Bobois
Best Classic Luxury Furniture Brand
Roche Bobois
Price range: $$$
Known for: Made-to-order furniture
With over 200 showrooms across the world, Roche Bobois is a familiar name to luxury furniture lovers. The company sells a wide array of made-to-order furniture and home designs. Across living, bedroom, and office spaces, pieces are so well made, you’ll own them forever. Roche Bobois also believes in full service, offering interior design consultations to help you find the perfect pieces for your home.
Best Art Deco Furniture Brand
Modani
Best Art Deco Furniture Brand
Modani
Price range: $
Known for: Art deco, mid-century modern furniture
Modani was founded by three design lovers who wanted to create an easier way to shop for contemporary luxury furniture. Inspired by art deco style and midcentury modern designs, Modani’s pieces feature angular shapes and minimal ornamentation.
Best Minimal Luxury Furniture Brand
Kartell
Best Minimal Luxury Furniture Brand
Kartell
Price range: $$$
Known for: Environmentally-friendly design
Milan, Italy–based Kartell creates luxury furniture while focusing on minimizing the impact to the environment. The brand’s method? Using innovative materials, such as recycled upholstery and chairs made of coffee waste.
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Best One-of-a-Kind Luxury Furniture Retailer
1st Dibs
Best One-of-a-Kind Luxury Furniture Retailer
1st Dibs
Price range: $$
Known for: Vintage and pre-owned furniture and decor
Shopping for vintage furniture? 1st Dibs is an online retailer that stocks some of the most well-known designs. From the beloved Egg Chair to Victorian dining tables, you can hunt to find a piece that no one else will own. While you’re at it, check out their jewelry and fashion, too.
Best Budget-Friendly Luxury Furniture Brand
CB2
Best Budget-Friendly Luxury Furniture Brand
CB2
Price range: $$
Known for: Trendy design pieces
The luxury little sister to Crate & Barrel, CB2 offers timeless design and quality, without the enormous price tags other brands have. You can often find great deals on piece that create a calm and cool environment for your home without breaking the bank (or skimping on quality).
Best Contemporary Luxury Furniture Brand
Blu Dot
Best Contemporary Luxury Furniture Brand
Blu Dot
Price range: $$
Known for: Modern furniture
Blu Dot is the brand to shop for contemporary, modern furniture designed for color and comfort. The label focuses on classics like cozy sectionals and back-supporting desk chairs, rather than trends; all furniture is designed in-house, emphasizing usability and durability.
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Best British Luxury Furniture Brand
Flash Table Circle Brass
Best British Luxury Furniture Brand
Flash Table Circle Brass
Price range: $$$
Known for: British design
Tom Dixon’s furniture is all about honoring its British roots—the pieces adapt Victorian designs, and Dixon was even awarded an OBE by the late Queen Elizabeth. The brand exclusively sells angular tables and chairs, alongside lighting and home accessories.
Best Trendy Luxury Furniture Brand
Rove Concepts
Best Trendy Luxury Furniture Brand
Rove Concepts
Price range: $$$
Known for: Sustainable, trendy design
For Rove Concepts’ furniture, no detail is too small. A focus on sustainability, innovative materials, and funky design makes it a go-to shop for anyone who wants to invest in their home’s aesthetic. From midcentury modern pieces to bulbous sofas, Rove Concepts makes it easy to shop any home decor style in one place.
Tatjana Freund is Hearst’s Fashion & Luxury Commerce Editor, covering beauty, fashion and more across multiple brands. Previously, she worked at ELLE.com and Marie Claire. She’s a fan of whiskey neat, podcasts that give her nightmares, and one time Zoë Kravitz laughed at a joke she made.
Real estate investments make money through appreciation and rental income. Real estate can diversify a portfolio and act as a hedge against inflation, since landlords can pass rising costs to tenants. But the down payment on multifamily investment properties? At least 20%, or 25% to get a better rate.
It’s true that eligible borrowers may use a 0% down U.S. Department of Veterans Affairs (VA) loan for a property with up to four units as long as they live there. But those loans serve a relative few and are considered residential financing. Properties with more than four units are considered commercial.
So how can a cash-poor but curiosity-rich person tap the potential of multifamily properties? By not footing the entire bill themselves.
Can You Buy a Multifamily Property With No Money?
When you buy real estate, you typically have two options: Buy with cash or finance your purchase with a mortgage loan.
There are various types of mortgages. If you take out a home loan, you’ll likely need to pay a portion of the purchase price in cash in the form of a down payment. The minimum down payment you make will depend on the type of mortgage you choose — the average down payment on a house is well under 20% — and it will help determine what terms and interest rates you’ll be offered by lenders.
This money needs to come from somewhere, but it doesn’t necessarily need to come from your own savings account. When investors buy multifamily properties with “no money down,” it just means they are using little to no personal money to cover the upfront costs.
If you don’t have much cash of your own, there are several ways that you can fund the purchase of a multifamily investment property. 💡 Quick Tip: Jumbo mortgage loans are the answer for borrowers who need to borrow more than the conforming loan limit values set by the Federal Housing Finance Agency ($766,550 in most places, or $1,149,825 in many high-cost areas). If you have your eye on a pricier property, a jumbo loan could be a good solution.
6 Ways to Pay for a Multifamily Property
Find a Co-Borrower
If you don’t have the money to front the costs of a property yourself, you may be able to partner with a family member, friend, or business partner. They may have the money to cover the down payment, and you might pull your weight by researching properties or managing them.
When you co-borrow with someone, you’ll each be responsible for the monthly mortgage payments. You’ll also share profits in the form of rents or capital gains if you sell the property.
Give an Equity Share
You may give an equity investor a share in the property to cover the down payment. Say a multifamily property costs $750,000, and you need a 20% down payment. An equity investor could give you $150,000 in exchange for 20% of the monthly rental income and 20% of the profit when the property is sold.
Borrow From a Hard Money Lender
Hard money loans are offered by private lenders or investors, not banks. The mortgage underwriting process tends to be less strict than that of traditional mortgages. Depending on the property you want to buy, no down payment may be required.
These loans (also called bridge loans) have high interest rates and short terms — one to three years is typical — with interest-only payments the norm. For this reason, they may be used by investors who may be looking to flip the property in short order, allowing them to make a profit and pay off the loan quickly.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
House Hack
House hacking refers to leveraging property you already own to generate income. For example, you might rent out an in-law suite or list your property on Airbnb.
Another option: You could rent out your primary residence and move into one of the units in a multifamily property you buy. This way, you’d probably generate more income than if you had rented out the unit to a tenant.
Finally, you could hop on the ADU bandwagon if you own a single-family home. Accessory dwelling units can take the form of a converted garage, an attached or detached unit, or an interior conversion. The rental income can be sizable. To fund a new ADU, homeowners may tap home equity, look into cash-out refinancing, or even use a personal loan.
Seek Seller Financing
If you don’t have the cash for a down payment on a property, you may be able to forgo financing from a lending institution and get help instead from the seller.
With owner financing, there are no minimum down payment requirements. Several types of seller financing arrangements exist:
• All-inclusive mortgage: The seller extends credit for the entire purchase price of the home, less any down payment.
• Junior mortgage: The buyer finances a portion of the sales price through a lending institution, while the seller finances the difference.
• Land contracts: The buyer and seller share ownership until the buyer makes the final payment on the property and receives the deed.
• Lease purchase: The buyer leases the property from the seller for a set period of time, after which the owner agrees to sell the property at previously agreed-upon terms. Lease payments may count toward the purchase price.
• Assumable mortgage: A buyer may be able to take over a seller’s mortgage if the lender approves and the buyer qualifies. FHA, VA, and USDA loans are assumable mortgages.
Invest Indirectly
Not everyone wants to become a landlord in order to add real estate to their portfolio. Luckily, they can invest indirectly, including through crowdfunding sites and real estate investment trusts (REITs).
The Jumpstart Our Business Startups Act of 2013 allows real estate investors to pool their money through online real estate crowdfunding platforms to buy multifamily and other types of properties. The platforms give average investors access to real estate options that were once only available to the very wealthy.
REITs are companies that own various types of real estate, including apartment buildings. Investors can buy shares on the open market, and the company passes along the profits generated by rent. To qualify as a REIT, the company must pass along at least 90% of its taxable income to shareholders each year.
As investment opportunities go, REITs can be a good choice for passive-income investors. 💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.
The Takeaway
Buying a multifamily property with no money down is possible if you take the roads less traveled, including leveraging other people’s money. And if you have the means to make a down payment on a property, your first step is to research possible home mortgage loans.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Can I buy a multifamily home with an FHA loan?
It is possible to buy a property with up to four units with a standard mortgage backed by the Federal Housing Administration (FHA) if the buyer plans to live in one of the units for at least a year. The FHA considers homes with up to four units single-family housing. The down payment could be as low as 3.5%. There are loan limits.
A rarer product, an FHA multifamily loan, may be used to buy a property with five or more units. The down payment is higher. You’ll pay mortgage insurance premiums upfront and annually for any FHA loan.
Is a multifamily property considered a commercial property?
Properties with five or more units are generally considered commercial real estate. Commercial real estate loans usually have shorter terms, and higher interest rates and down payment requirements than residential loans. They almost always include a prepayment penalty.
Photo credit: iStock/jsmith
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
“We decided going forward that we’re going to focus 100% on retail,” she said. “We look for like-minded companies that have the same culture, because culture and leadership are key. And I think you have to start building scale in this business.”
Scale is an important tool for maintaining investment in people and technology, Schmidt said, and the additional companies that Guild has brought aboard recently reflect its goals for culture and leadership and may have had issues of scale that were solved by joining Guild, she said.
When asked about the particulars of culture and how Guild aims to define that trait, Schmidt said that three values lead the charge: listening, collaboration and learning.
“For us, [potential acquisitions] have to be able to have a good understanding of their people and listen to what they have to say,” she said. “Everybody has a voice. Those are the kinds of leadership qualities that create that culture. Sometimes it’s not easy to identify that. We have to spend a lot of time doing a lot of discovery to identify that.”
When asked about recent acquisitions like Academy Mortgage and Cherry Creek Mortgage, Schmidt said that Guild had identified the kinds of values they want in their organization as well as the geographic advantage that would come from bringing them into the fold. There were also product advantages.
“Those two are more West Coast companies even though they had a national footprint, and so we’ve known them for years,” she said. “We had a good sense of their culture in advance. They both have great cultures and we were competing for the same people, so we knew the fit would be really good. So now, for all the western states, we pretty much have the market share that we wanted to get to.”
The Cherry Creek acquisition allowed Guild to expand and build out its reverse mortgage capabilities since the company served as a leading lender in the space for quite a while. With Academy, the homebuilder business was most attractive to Guild, Schmidt said.
Schmidt also talked about the need to invest in the company’s technology platform to better enable its people. Recruitment efforts are also following the company’s broad retail-focused strategy, and Schmidt asserted that any retail loan originator will want to “talk to Guild” if they want to advance in the retail origination space.
Schmidt also alluded to further development of its technology by leveraging artificial intelligence, and she shared that the company hired a specialist in its technology division to help grow the company’s efforts.
But to avoid moving too quickly and potentially running afoul of a developing and controversial technology, she said the company’s approach is to “start small and be careful.”
Bootstrapping typically means relying on one’s self to reach a goal. In business, bootstrapping is generally used to describe entrepreneurs who use their own personal funds and resources to start a business instead of raising money through small-business loans or investors.
Whether bootstrapping is your personal preference or your best option to start a business, there are pros and cons to this funding method, as well as some alternatives that might be helpful to consider.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
What is bootstrapping?
Bootstrapping refers to entrepreneurs starting new businesses by relying on their personal resources instead of securing funds through business loans or raising capital through investors. Or, in the case of an existing business, bootstrapping can be used to describe an entrepreneur using the revenue generated by their company, along with personal resources, to grow the business.
Some personal resources that may be used in bootstrapping include:
Personal savings.
Personal credit cards.
Personal loans, including home equity loans.
Personal spaces such as an extra room or garage.
Personal assets like equipment and supplies.
Pros and cons of bootstrapping
Pros
Owner retains full control of the business.
No business loan debt is taken on by the company.
Accrue time in business and revenue to help qualify for future funding.
Cons
Business growth may be limited due to lack of funds.
Personal assets, such as savings and retirement, could be at risk.
Doesn’t typically build business credit history.
Why do entrepreneurs choose bootstrapping?
For some entrepreneurs, bootstrapping is a personal preference and for others it may be their only option for launching a new business or growing an existing one.
Here are some reasons entrepreneurs may use bootstrapping to start their business:
Can’t qualify for a business loan
One of the top reasons budding entrepreneurs turn to bootstrapping is because they can’t qualify for a startup business loan. They may not be able to meet lender requirements for time in business, credit score and annual revenue, among other things.
Banks and SBA lenders — lenders that offer loans guaranteed by the Small Business Administration — generally have competitive rates and terms. However, to qualify for funding, you’ll typically need multiple years in business, in addition to good credit. For example, a Wells Fargo BusinessLine line of credit requires a credit score of at least 680 and two years in business.
Online business loans are typically easier to qualify for than bank loans; however, approval can still be a challenge for brand-new businesses. For example, Fora Financial offers business loans for bad credit with a minimum credit score requirement of 500 but also a minimum of six months in business.
Don’t want to take on additional debt
Entrepreneurs who could qualify for a business loan may choose bootstrapping because they don’t want to take on business debt and the interest expense and additional fees that come with a loan.
Business loan interest rates vary based on a number of factors. However, according to the most recent data from the Federal Reserve, interest rates on the average small-business bank loan ranged from 6.13% to 12.36% in the fourth quarter of 2023
. Other types of loans, including online loans, can have even higher interest rates.
In addition to interest, borrowers often have to pay fees like a business loan origination fee. Interest and fees may push the total cost of the loan beyond what an entrepreneur is willing to pay.
Don’t want to give up full control of the business
Entrepreneurs who have ruled out debt financing may have the option of raising money through equity financing — selling shares in their business to investors in exchange for funding. While equity financing doesn’t require taking on debt or making loan repayments, some entrepreneurs may still prefer bootstrapping.
When an entrepreneur sells shares in their business, they exchange partial business ownership for the investor’s funding. And, depending on the number of shares sold and the investor’s goals, the entrepreneur may no longer have full independence to run the company their way. They’ll also have to share the profits if the business succeeds.
Want to test the business idea before fully committing
Bootstrapping can allow an entrepreneur to try out their business model, refine their marketing strategy and build a customer base before committing to long-term financing or arranging to offer equity to investors. In addition, a business owner may find it easier to qualify for funding from business lenders after they’ve been in operation for at least six months.
Also, some entrepreneurs may not be comfortable quitting a full-time job in order to start a business. Bootstrapping can be a way to get a business off the ground without losing your main source of income.
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Bootstrapping tips
The following tips may help you when bootstrapping your business:
1. Create a business plan.
Regardless of how you choose to fund your startup, you’ll need to write a business plan. The plan provides detailed information on your business, such as an executive summary, product description, market analysis, marketing strategy and financial projections.
Your business plan can be used as a guide to set up your business and help you identify your customer base, establish your marketing plan, lay out the organization of your operation and explain how you plan to generate revenue. You’ll typically update your business plan as your company grows.
In addition, if you decide to look for additional funding in the future, you can share your business plan with lenders and investors to show them that you have a profitable operation.
2. Officially launch your business
Bootstrapping may involve starting a scaled-down version of your business where, for example, you operate out of a spare room or use personal funds to buy supplies. However, no matter the size of your operation, you still want to take steps that will make your business official in order to best set it up for future growth.
Some common steps to take when launching a business:
3. Lay the groundwork for a future business loan
Bootstrapping is often used to get a business up and running; however, it’s not always the best option for business growth. For some entrepreneurs, bootstrapping may be a short-term option that will help them secure business financing in the future.
Bootstrapping can give you the opportunity to accrue time in business, generate revenue and build a customer base — all things that will make your business more attractive to lenders and investors down the road.
4. Take advantage of free resources
There are organizations that offer free or low-cost training, counseling and other resources to help you start and grow your business.
SBA resource partners are located throughout the U.S. and include Small Business Development Centers, SCORE business mentors, Veterans Business Outreach Centers and Women’s Business Centers, among others.
U.S. Chamber of Commerce chapters provide resources for entrepreneurs including virtual events and networking opportunities within your local community, though a membership fee may be required in some cases.
Industry and trade associations within your local community can provide opportunities to advance your industry knowledge and network through conferences and member events.
Public libraries can also be a resource to small-business entrepreneurs, with some offering online courses, demographic information, business planning tools and suggested reading lists.
Alternatives to bootstrapping
Here are some alternatives you may want to consider before deciding to fund your business on your own:
Business loans. There are many different types of business loans — term loans, lines of credit and equipment loans. Because the qualification requirements for business loans vary by type and lender, exploring a variety of options may allow you to find a loan that works for you and your new business.
Family and friends loans. Asking family members and friends to loan you funds or invest in your startup business is another way to raise money. Although these arrangements are often informal, it’s important to put the details of the funding in writing so there are no misunderstandings in the future.
Small-business grants. Grants can be a source of funding for small businesses, although competition for this “free” money can be fierce and the application process can be time-consuming. However, there are startup business grants offered by government agencies, corporations and nonprofit organizations that may be worth looking into.
Crowdfunding for business. Crowdfunding can be used to create online campaigns to raise money for a business startup, as well as other causes. A unique business idea and a wide network of supporters can help an entrepreneur launch a successful campaign.
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When it comes to saving for retirement, you have many options to choose from. But one that you may not have considered is investing in gold—namely, a gold IRA.
A gold IRA is a simple yet innovative type of individual retirement account (IRA). Instead of the conventional holdings of stocks and bonds, it invests in precious metals, primarily gold, but also in silver and platinum.
Investing in a gold IRA presents a potential opportunity for safeguarding your savings from economic turmoil and expanding the diversity of your asset portfolio. Nevertheless, it’s important to keep in mind that a gold IRA may not be a suitable option for everyone, and a thorough evaluation of your personal financial situation is crucial before making an investment decision.
This article will provide you with a comprehensive understanding of gold IRAs and equip you with the knowledge necessary to make an informed investment choice.
What is a Gold IRA?
A gold IRA, also known as a precious metals IRA, is a type of investment vehicle that gives you the ability to hold physical gold, silver, and other valuable metals. You have the option of funding this account either with pre-taxed money or as a Roth IRA with post-tax funds.
Your savings will not be invested in stocks, bonds, or mutual funds but rather in precious metal coins or bullion, providing a tangible form of investment. The tax rules and procedures for a precious metals IRA are similar to those of any other IRA.
Investing in gold bullion and other precious metals goes beyond just IRAs. Some investors choose to purchase stocks or exchange-traded funds (ETFs) in gold mining companies or precious metal funds. However, the majority of gold investors prefer to keep their investments in physical precious metals.
Types of Gold IRAs
There are three main types of gold IRAs: traditional, Roth, and SEP.
Traditional gold IRA: – Traditional gold IRAs are funded with pre-tax dollars and require you to pay income tax on withdrawals in retirement.
Roth gold IRA – Roth IRAs are funded with after-tax dollars and allow for tax-free growth and tax-free withdrawals in retirement.
SEP gold IRA – SEP IRAs are intended for self-employed or small business owners and are funded with pre-tax dollars. Contribution limits are different, and business owners can contribute on behalf of their employees.
The IRS has strict guidelines for the kinds of metals that can be included in a gold IRA. The only precious metals that can be included are gold, silver, platinum, and palladium.
Here is an overview of each of the IRS-approved precious metals, as well as the requirements for each.
1. Gold
To be eligible for inclusion in a self-directed gold IRA, gold coins or bars must adhere to stringent purity standards, with a minimum of 99.5% purity. Any gold that fails to meet this standard will be rejected.
Should the gold pass the purity test, it must be securely stored in an approved depository, which is a specialized facility specifically designed to protect precious metals.
Having a trusted and IRS-approved custodian is also a requirement, who will serve as the trustee of the IRA and oversee the safekeeping of the gold. Some of the most sought-after gold coins and bars for IRAs include:
American Gold Eagle coins
American Gold Buffalo coins
Australian Gold Kangaroo/Nugget coins
Austrian Gold Philharmonic coins
Johnson Matthey Gold bar
Valcambi Gold CombiBar
Canadian Gold Maple Leaf coins
Credit Suisse Gold bars
2. Silver
The purity of silver coins must be at least 99.9% to be eligible for deposit in a gold IRA. The following is a list of silver coins and bars that meet the approval criteria for inclusion in an IRA:
American Silver Eagle coins
Australian Kookaburra Silver coins
Austrian Philharmonic Silver coins
Canadian Silver Maple Leaf coins
Mexican Silver Libertad coins
Johnson Matthey Silver bar
Royal Canadian Mint Silver bar
3. Platinum
Platinum coins and bars must meet or exceed a purity standard of 99.95%. Here is a list of IRA-approved platinum bars and coins to consider:
American Eagle Platinum coins
Australian Koala Platinum coins
Canadian Maple Leaf Platinum coins
Isle of Man Noble coins
4. Palladium
And finally, palladium must meet a purity standard of 99.95% or higher. Here is a list of IRA-approved palladium bars and coins:
Canadian Palladium Maple Leaf coins
Russian Ballerina Palladium coins
Baird Palladium bars
Credit Suisse Palladium bars
If you’re interested in investing in a gold IRA, you need to be mindful of the accepted metals. While there may be other precious metal bars and coins that are sought after by collectors, they may not be eligible for investment within a gold IRA. To ensure you’re making the right investment decisions, it’s best to work with a trusted precious metals company.
To avoid any issues, make sure to double-check with your IRA company before investing in any precious metals you’re unsure about. Here’s a list of metals that are not approved for investment in a gold IRA:
Austrian Corona
Belgian Franc
British Sovereign and Britannia
Chilean Peso
Chinese Panda coins
Dutch Guilder
French 20 Franc
Hungarian Korona
Italian Lira
Mexican Peso
South African Krugerrand
Swiss Franc
Pros and Cons of Gold IRAs
Before investing in a gold IRA, it’s important to weigh the pros and cons. Here are some key factors to consider before making a decision.
Pros
Since the Financial Crisis of 2008, gold IRAs have become a popular investment option for people looking to diversify outside the stock market. Many people believe that gold is a good way to protect yourself against inflation.
And gold IRAs are not as difficult to invest in as they were in the past. Due to increased demand, there are more legitimate gold IRA companies available that will help you buy and manage your gold and precious metals investment.
Cons
One of the biggest downsides to opening a gold IRA is that the startup costs can be high. Plus, gold doesn’t pay dividends or interest, which kind of defeats the purpose of putting it in a tax-advantaged investment.
Plus, many people find it tricky to make withdrawals on gold IRAs, since gold isn’t a liquid asset.
You also need to be sure that you’re working with a reputable company that knows what they’re doing. Otherwise, it’s easy to fall victim to scam artists.
How to Get Started With a Gold IRA
Starting a gold IRA requires opening a self-directed IRA account, which offers greater flexibility in terms of investment options. You’ll be responsible for managing this retirement account, but you’ll need the assistance of a broker for buying gold and securing your assets.
When selecting a custodian, consider a bank, credit union, or brokerage firm that has been approved by a state or federal agency. You may also ask your gold dealer for recommendations on trusted brokers.
Start-Up Costs to Open a Gold IRA
Unlike traditional IRAs, a gold IRA comes with a few extra expenses. Here are some of the most significant expenses you’ll need to know about:
The markup fee: When you buy gold or precious metals, you may have to pay a markup fee. This is a one-time upfront fee, and it will vary based on the vendor you choose.
IRA setup fee: The setup fee is another one-time fee you’ll pay to set up your IRA account. Again, this will vary depending on the broker you choose. However, it will likely be more costly because not every firm deals with gold IRAs.
Custodian fees: You’ll have to pay an annual fee for the custodian who’s managing your gold IRA.
Storage fees: Your gold must be stored in a secure, approved location. For that reason, you’ll have to pay annual storage fees.
Bottom Line
If you seek to diversify your portfolio beyond the stock market, a gold IRA could be a suitable option. Precious metals like gold are often considered secure investments and can act as a safeguard against inflation.
On the other hand, other methods of asset diversification may be more economical and less cumbersome. Some people regard gold as a poor choice for a tax-deferred investment, as it does not produce income.
If you opt for a gold IRA, be sure to thoroughly research your metals dealer and custodian, to ensure the protection of your investment and to steer clear of scams.
Frequently Asked Questions
Is a gold IRA a good investment?
It depends on your personal financial circumstances and investment objectives. While some view gold as a way to hedge against inflation and diversify their portfolio, others may not find value in physically investing in the precious metal. To make an informed decision, it’s crucial to thoroughly examine both the potential risks and benefits before investing in a gold IRA.
How do I set up a gold IRA?
To set up a gold IRA account, you will need to find a gold IRA company that specializes in setting up precious metals IRAs. Gold IRA companies will provide you with the necessary paperwork and guidance to open and fund your account.
Are there any restrictions on what types of gold I can hold in my IRA?
Yes, there are specific rules for the types of gold that can be held in a precious metals IRA. The gold must be at least 99.5% pure and must be in the form of coins or bars from an approved refinery or mint. Some common examples of approved gold coins include the American Gold Eagle and the Canadian Gold Maple Leaf.
What is the difference between a traditional IRA, Roth IRA, and SEP IRA?
A traditional IRA is a tax-advantaged account that allows you to contribute pre-tax dollars and potentially receive a tax deduction on your contributions.
A Roth IRA, on the other hand, is a retirement account that accepts post-tax contributions, but all qualified withdrawals, including earnings, are tax-free.
Lastly, a SEP IRA is a retirement savings plan designed for self-employed individuals and small business owners. It enables them to make tax-deductible contributions to a traditional IRA for themselves and their employees.
Despite the obvious appeal of side hustles — more money! — they’re not for everyone. If your side hustle makes you stress out, neglect relationships, or miss opportunities at your day job, then consider it a bad idea. Side hustles are only beneficial when they help you accomplish goals without sacrificing what matters most.
Side hustles are often promoted as a simple way to generate extra cash or fulfill your passions. However, the often-ignored price tag is physical and mental strain. Not to mention the time requirement and potential financial commitment necessary to get a gig going.
Read on to find out how to evaluate your options and goals before taking on a side hustle.
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What Is a Side Hustle?
A side hustle refers to a second job or source of income that people pursue outside their primary employment. The purpose may be to earn extra money, pursue a pet project, or develop skills in a different area.
A side hustle can take various forms, from freelance work or consulting to selling handmade crafts or driving for a rideshare service. Renting out property and offering tutoring services also qualify. The point is leveraging your time and skills to pad your budget or explore a wider field than your day job allows. 💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. A free budget app can give you the same insight into your budgeting and spending at a glance, without the extra effort.
Pros and Cons of a Side Hustle
Browse the pros and cons below, and make a mental note of how many of each apply to your situation. If one side of the scales is considerably heavier, your decision may be obvious.
Pros of a Side Hustle
Here’s a breakdown of the benefits of a side hustle:
• Develop Your Career: Side hustles can provide a valuable opportunity to develop skills, gain experience, and broaden your professional horizons. By taking on projects or roles outside your main job, you may acquire new competencies to help advance your career or get a promotion. Additionally, side hustles can demonstrate initiative, entrepreneurial spirit, and versatility to potential employers, enhancing your marketability and opening up new opportunities.
• Switch Up the Norm: A side hustle allows you to break away from the routine of your primary job. This variety can be refreshing and stimulating, helping to prevent boredom and burnout. Whether you’re pursuing a different passion, exploring a new industry, or experimenting with creative projects, having a side hustle can inject excitement and fulfillment into your life outside work.
• Build Your Network: Side hustles often involve interacting with different people and communities, which can expand your professional network. Whether you’re collaborating with clients, partners, or fellow freelancers, each connection presents an opportunity to exchange ideas, learn from others, and potentially uncover new career prospects. Building a diverse network through your side hustle can provide valuable support, mentorship, and referrals in your professional journey.
• Channel Creativity: Side hustles offer a platform for expressing your creativity, passions, and interests outside your primary job. Whether it’s writing, photography, crafting, or any other form of expression, a side hustle can bring more meaning and fulfillment than your 9-to-5. This outlet can serve as a source of inspiration, relaxation, and personal growth, enriching your life beyond the confines of your main occupation.
• Increase Income: One of the most practical benefits of a side hustle is the extra money. Whether saving for a major purchase, paying off debt, or simply seeking financial security, the income from your side hustle can provide greater financial flexibility and stability. Likewise, having multiple streams of income can be a buffer against economic uncertainty and provide a safety net in case of job loss or another hardship.
Cons of a Side Hustle
On the other hand, these are the potential drawbacks of a side hustle:
• Less Time to Relax: Side hustles require time and effort, eroding your leisure time. Working 60+ hour weeks can lead to fatigue and even burnout. When juggling your day job, side hustle, and personal commitments causes you to lose sleep, your quality of life can become unsustainably low.
• Distraction from Work: A side hustle can encroach on your attention and focus during work hours. Constantly thinking about your other gig, responding to email, or taking calls while at your main job can detract from your performance. If colleagues or supervisors perceive your divided attention, this can also strain your professional relationships and undermine your credibility.
• Managing the Stress of Two Jobs: Managing the demands of a side hustle on top of your primary job and personal responsibilities can significantly increase stress. Deadlines, client expectations, financial pressures, and the need to constantly switch between different roles and tasks can elevate anxiety. Chronic stress associated with balancing multiple commitments can affect your mental and physical health over time.
• Sustainable Prices Can Be Elusive: Setting prices or negotiating rates for your side hustle services can be challenging, especially if you’re just getting started or dealing with imposter syndrome. Striking the right balance between competitiveness and fair compensation can be tricky, and you may encounter situations where clients or customers undervalue your work. Plus, breaking into a competitive market may require setting prices so low that you work at a loss for the first few months or even years. As a result, your side hustle may ding your budget instead of adding to it.
💡 Quick Tip: An online money tracker makes monitoring your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
When Does a Side Hustle Make Sense?
Several ingredients are key for a side hustle to make sense for your situation. First, it’s essential to have a clearly defined reason for pursuing a side hustle. For example, you may want to generate income, follow a creative impulse, or pave a path to a new career. This clarity of purpose will guide your efforts and motivate you throughout your side hustle journey.
Second thorough research is crucial to understanding the market, demand, competition, and potential challenges associated with your chosen side hustle. This is significant even if you don’t have financial aspirations for your other gig.
For example, if you’re interested in fitness, is your specific angle better suited for a blog or a YouTube channel? Will you create a social media presence to drive more traffic? What kind of value are you delivering to your audience?
In a different vein, if you want to become a rideshare driver, which company offers the best pay? Do you have a presentable vehicle that you’re willing to put miles on? Answering these kinds of questions will help you make informed decisions and set realistic expectations. Not doing your homework will likely bring a lack of results, monetary loss, and frustration.
Next, understand the time commitment your side hustle will require. For instance, a few hours of woodworking on the weekend is less demanding than taking a constant flow of orders on Etsy. If your schedule is already full to the brim from your primary job, family responsibilities, and personal pursuits, incorporating a side hustle can do more harm than good. Even if you work a side gig with your significant other, it’s not the same as spending quality time together.
Finally, your side hustle should fit into the larger picture of your goals and values. For instance, you might start a side hustle in order to build a $5,000 emergency fund. Or you could take a software engineering course in the evenings that will help you eventually switch careers. In any case, your side hustle should have specific benefits and point toward a defined objective. Otherwise, you’ll burn time without accomplishing much.
The Opportunity Cost of a Side Hustle
The “opportunity cost” of a side hustle depends upon the resources you invest. When you dedicate yourself to anything, you lose opportunities to engage in leisure activities, spend time with family and friends, and take vacations. In essence, the opportunity cost of a side hustle equals the value you place on other aspects of life that matter most.
Also ask yourself what is the financial cost of your side hustle? You might have to invest money to purchase materials or pay for marketing. You might also give up overtime at your primary job. That’s cash that could go into savings, investments, or paying off debt.
Likewise, your time could be going into skill development for your day job, leading to promotions or raises. Plus, your employer might sponsor specific types of professional development, resulting in free training that moves your career forward and increases your salary.
Ultimately, the opportunity cost of a side hustle varies depending on individual circumstances, goals, and priorities. It’s essential to carefully consider these factors and assess how the benefits of the side hustle compare to the time and money.
Examples of Side Hustles
While there are unusual ways to make money, side hustles are typically more accessible. Here are some side hustles that match with a range of backgrounds and skill sets:
• Freelancing: Offer services such as writing, graphic design, programming, bookkeeping, and more. You’ll take projects on a contract basis with multiple clients.
• Dog Walking: Providing exercise and companionship for dogs by taking them on walks on a regular or as-needed basis.
• Blogging: Creating and maintaining a consistent feed of valuable written content on a topic you love or have expertise in. Find out how much it costs to start and run a blog.
• Non-Medical Senior Care: Assisting elderly individuals with daily tasks (shopping, bathing, housework, etc.) and providing companionship to support their wellbeing.
• Babysitting: The tried-and-true income-generator for teenagers and adults alike. You’ll care for children in the evenings and on weekends when parents are busy or need a break.
• Personal Assistant: Providing administrative support and assistance to individuals or businesses. You’ll manage schedules, run errands, and handle correspondence. You can also be a virtual assistant and provide numerous essential services (bookkeeping, arranging travel, etc.), therefore creating a side hustle from home.
• Handyman: Offering services to repair, maintain, and improve residences. You can specialize in one or more areas: plumbing, electrical work, carpentry, or general home tasks.
• Crafting: Creating handmade goods and artwork, such as jewelry, clothing, and home décor, to sell online or at craft fairs.
• Cooking/Baking: Crafting you can eat! Get to work in the kitchen to make treats, desserts, or meal kits for sale.
• Private Tutor: Providing personalized academic instruction to students in a particular subject or skill, often on a one-on-one basis.
• Self-Publishing: Writing and publishing books or other written works independently, without the involvement of traditional publishing companies. Self-publishing is inexpensive because your work will be accessible as an ebook.
• Teaching Online Courses: Creating and delivering educational courses or tutorials on a specific topic via online platforms is another side hustle from home.
• Product Tester: Testing and reviewing products or services for companies or brands, often providing feedback and insights based on personal experience.
• E-Commerce: Selling products or services online through a website or online marketplace, which may involve sourcing or creating products, managing inventory, and handling customer inquiries and orders.
When Is a Side Hustle Not Worth It?
A side hustle may not be worthwhile because of the toll on your physical, mental, and financial wellbeing. Here are more specific ways that a side hustle can negatively impact your life:
• Burnout: Working an 8-hour job and dedicating 2 to 4 additional hours per day to your side hustle leaves little room for anything else. The demands of a side hustle can result in excessive stress, fatigue, and burnout.
• Missed Career Advancements: Devoting significant time and energy to a side hustle may detract from opportunities for advancement in your primary job. They can also keep you from visualizing a sustaining career. So if you’re in a job you don’t like, a side hustle can act as a bandage instead of a cure. It’s advisable to focus on switching vocations instead of supplementing your income through another unsatisfying side job.
• Unhealthy Lifestyle Habits: A demanding side hustle may lead to poor eating choices due to lack of time for meal prep, insufficient exercise, and disrupted sleep. Over time, these habits damage physical health and overall quality of life.
• Strained Relationships: Spending excessive time on a side hustle can strain relationships with family, friends, and romantic partners. Missing significant events or quality time with loved ones due to work commitments can lead to feelings of resentment and isolation.
• Financial Costs: Some side hustles require upfront investments of time and money, for purchasing inventory or equipment, marketing expenses, or training courses. If the return on investment does not justify these costs, the side hustle may not be financially sustainable in the long run.
• Not-So-Passive Income: Many side hustles require active participation and ongoing effort to generate income, which can limit scalability and long-term earning potential. Without the ability to create passive income streams, you’ll constantly trade time for money without achieving financial freedom.
• Neglecting Personal Growth: A side hustle that consumes all available time and energy may leave little room for hobbies or other interests. Over time, this can lead to stagnation and dissatisfaction with your lifestyle.
Side Hustle Tips
A side hustle can quickly get out of hand or detract from your life if you’re not careful. Here’s how to create a practical side hustle that serves your needs:
• Start Small: When beginning a side hustle, starting with manageable tasks or projects that don’t require a significant investment of time or resources is wise. Starting small allows you to test the waters, gain experience, and assess the viability of your chosen side hustle without taking on too much risk. As you gain confidence and experience, you can gradually expand and scale your side hustle over time.
• Play to Your Strengths: Identify your special skills, interests, and areas of expertise, and leverage them in your side hustle. By focusing on activities that align with your strengths, you’re more likely to enjoy the work, excel at it, and differentiate yourself from competitors. This approach also allows you to maximize your earning potential by offering high-value services or products that cater to a specific niche or market. Remember, this doesn’t mean you must stick to your current skill set. Your interests and abilities can also lead you to pick up new skills.
• Maintain Your Performance at Work: Balancing a side hustle with a full-time job means prioritizing high performance and professionalism in your primary job while pursuing your side hustle. To that end, it’s recommended to set boundaries for the time you dedicate to your side hustle and to manage your schedule efficiently. By maintaining your performance at work, you can preserve your job security and opportunities for advancement.
• Aim at a Goal Instead of a Job: Instead of treating your side hustle as just another job, set out to achieve specific goals or milestones that align with your long-term aspirations. Whether your goal is to generate additional income, pursue a passion project, or transition to full-time entrepreneurship, having a clear vision and purpose for your side hustle will keep you motivated and focused on what truly matters to you. By focusing on goals rather than simply exchanging time for money, you can create a more fulfilling and meaningful side hustle.
The Takeaway
Side hustles can be a bad idea when they damage your quality of life. While picking up a side gig can create more income, this result must be weighed against other priorities, including advancement in your day job, time dedicated to relationships, and alternatives that slowly but surely create passive income.
Asking yourself whether a side hustle is a good move might not be the most relevant question. Instead, you can ask yourself if a second job makes sense after developing a clear vision of the future.
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FAQ
Are side hustles risky?
Side hustles can be risky because of the opportunity cost of picking up extra work. Specifically, a side hustle can drain time and financial resources, add unmanageable stress to your life, and lead to worse quality of life because of the sacrifices required to work a second job. As a result, it’s essential to evaluate your circumstances and identify your goals before starting a side hustle.
Are side hustles a waste of time?
Side hustles can be an excellent way to generate more income, develop yourself professionally, or transition to a different career. However, they can also be a waste of time if you don’t set goals and create a realistic plan when starting. So a carefully planned side hustle that fits into the larger picture of your life can provide massive benefits, while picking up more work to simply stay busy can lead to missed opportunities in your professional and personal life.
Is starting a side hustle really worth it?
Starting a side hustle can be worth it for additional income, pursuing passions, or expanding your skill set. However, it requires careful consideration of the potential drawbacks, such as time constraints, increased stress, and the risk of hindering career advancement. Ultimately, the value of a side hustle depends on your aligning it with personal goals, managing resources effectively, and maintaining a healthy work-life balance.
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Inside: Learn how to save money quickly, even on a tight budget. Get practical tips for how to save money fast on a low income. Simple savings ideas to implement today.
Saving money on a tight budget can feel like a high mountain to conquer, especially when you’re trying to do it fast.
Many people earn just enough to cover their essential costs, leaving little room for savings. However, with the right strategies, saving money fast on a low income doesn’t have to be a pipe dream.
This is something I started when we decided to pay off debt. Then, we choose to continue saving that money and investing it.
By understanding the flow of your money – where it’s coming from and where it’s going – you can make informed decisions that maximize your savings potential.
By prioritizing your spending and forecasting future expenses, budgeting can reduce the stress of financial uncertainty and introduce a sense of control and confidence in your money management skills. Thus, leading to you starting to save.
What is the best way to save money on a low income?
On a low income, the best way to save money is to thoroughly understand your expenses and prioritize your needs over wants.
In addition, by planning and tracking your finances meticulously, you can identify where each penny is going. Thus, allowing you to analyze your expenses. Once you have a clear picture of these, start looking for areas to trim down.
Remember, saving money is about being proactive and consistent. These small but steady steps can build up over time to help you save money fast, even on a low income.
How to Save Money on A Fast Income
1. Start with Clear Priorities
Before you can decide where to cut costs or how to allocate your funds, you need to know what’s most important to you.
What is your why for doing what you need to do? Is it building an emergency fund, saving for a down payment on a home, or maybe preparing for retirement?
Whatever your goals, outline them clearly. This is how you will save money.
2. Budgeting effectively to manage finances
To budget effectively on a low income, it all starts with a cold, hard look at your numbers.
Begin by listing all sources of income – that’s your foundation.
From each paycheck or income stream, subtract your non-negotiable expenses such as rent, utilities, transportation, and debt payments. What you have left is your discretionary income.
Then, it’s time to categorize and prioritize. Group your expenses into necessities and nice-to-haves. If your essentials consume most of your income, you’ll need to scrutinize the nice-to-haves list.
Every dollar saved from unnecessary splurges is a dollar that can be put towards your savings.
Use budgeting apps or tools to keep a real-time record of your spending. These can help you stay disciplined and provide a visual reminder of your progress.
3. Track and Slash Unnecessary Expenses
Now, you must meticulously and ruthlessly cut out the non-essentials.
Identify patterns and spot the recurrent, unnecessary expenses that are draining your funds.
Do you subscribe to multiple streaming platforms?
Are you forking out cash for a gym membership you barely use?
Are those daily specialty coffee drinks adding up?
It’s time to slash these expenditures.
Cutting these expenses is like giving yourself a raise.
4. Lower Housing Expenses Without Compromising Comfort
Living in smaller, more affordable housing to decrease rent or mortgage might be exactly what you need.
Opting for a smaller, more affordable space is a practical approach to significantly lower your rent or mortgage payments. When you choose to live in a compact setting, not only do you reduce the square footage costs, but often, utility and maintenance expenses decrease as well due to the reduced size of the living area.
If you are renting, try to negotiate your rent or lease terms with your landlord – they might be willing to offer a discount to keep a reliable tenant, or you may be able to agree on lower rent for a longer lease commitment.
If you’re a homeowner, explore the possibility of refinancing your mortgage to take advantage of lower interest rates. Alternatively, consider renting out a room or a portion of your living space, as the additional income can offset your mortgage or maintenance costs.
5. Save Money on Utilities with Simple Home Adjustments
Saving money on utilities might sound challenging, but you can often achieve substantial savings with a few strategic home adjustments. Let’s explore some cost-effective strategies and modifications you can make to your living space that could help reduce your bills.
Energy Efficient Appliances: Swapping out older appliances for Energy Star-rated ones leads to significant reductions in electricity use and water consumption.
Smart Thermostats: Installing a smart thermostat allows you to programmatically control your heating and cooling based on your schedule and preferences, potentially saving you a bundle on your energy bills.
LED Lighting: Switch to LED bulbs, which are more energy-efficient than traditional incandescent ones and have a longer lifespan, saving you on replacement costs as well as your electric bill.
Insulation Upgrades: Proper insulation keeps your home warm in the winter and cool in the summer, reducing the need for excessive heating or air conditioning.
Water-Saving Fixtures: Low-flow showerheads and faucet aerators reduce water usage, preserving this precious resource and lowering your water bill.
Not only do these simple home adjustments lead to savings on your utility bills, but they also contribute to a more environmentally friendly lifestyle.
6. Cooking at home instead of eating out
Cooking at home instead of dining out is an excellent way to save money, especially on a low income. When you eat at a restaurant, you’re not just paying for the food; you’re also covering the cost of service, ambiance, and the establishment’s overhead.
Plan a balance between meal prepped home-cooked meals and the occasional dinner out to keep your budget in check while still enjoying life’s little pleasures. Here are some frugal meals to get you started.
Remember, you don’t have to eliminate eating out entirely.
7. Canceling unused subscriptions and memberships
Stop draining money on services you don’t actively use. It’s surprisingly easy to forget about these auto-renewing expenses, so taking the time to audit your subscriptions can reveal opportunities for savings.
Recently, we tracked over $100 a month in my mother-in-law’s unused subscriptions and membership!
As such, it’s important to periodically evaluate your subscriptions and memberships to ensure they are still serving your interests and goals. If not, give yourself permission to cancel and save that money for something that offers tangible benefits in return.
8. Buying quality items that last longer
Investing in quality items that last longer is a strategic way to save money over time. While the initial cost may be higher, durable products can prevent the cycle of frequent replacements, ultimately contributing to long-term savings and less waste.
Remember, not every purchase necessitates the highest quality option. Examine which items you frequently use and can benefit from in the long run. For instance, driving a Toyota or buying higher quality shoes.
Once you’ve identified these, invest in quality for those and enjoy the satisfaction of a purchase that lasts.
9. Optimize Grocery Shopping
To optimize grocery shopping and manage your food budget effectively, start by thoroughly checking your current pantry supplies and making a precise shopping list to deter impulse purchases.
Utilize coupons and enroll in local store loyalty programs for exclusive discounts.
Embrace meal planning to avoid unnecessary spending.
Consider incorporating meatless meals, as this can contribute to consistent savings over time due to the typically higher cost of meat compared to vegetables and other plant-based options.
Plan meals around these cheap foods when you are broke.
By shopping smartly, you have the power to drastically lower your monthly food bill. Just remember, the key is preparation and discipline.
10. Repairing items instead of replacing them
Repairing items instead of replacing them can be a significant money-saving tactic, especially when budgets are tight. It’s often more cost-effective to fix a piece of furniture, mend a garment, or troubleshoot an appliance than it is to buy new one.
Consider the condition and value of each item before deciding to repair it. If the cost of repair approaches the price of a new item, or if it’s beyond your skill set, researching community resources or seeking professional help may be a wise choice.
11. Practicing the 30-day rule for non-essential purchases
Putting the brakes on impulsive buying can significantly boost your savings, and practicing the 30-day rule is a tried-and-true method to control those urges.
Before you make any non-essential purchase, wait 30 days.
If after a month you still feel the purchase is necessary or meaningful, then consider buying it.
Remember that the goal isn’t to deny yourself enjoyment but to ensure that each purchase is considered and valued. This conscious approach can lead to more satisfaction with the items you do choose to buy and a healthier bank balance.
12. Skip the Car Loan
Opting out of a car loan and finding alternative modes of transportation, such as cycling, walking, or using public transportation, can lead to significant financial savings.
Without a car payment, individuals can redirect the funds that would have gone towards monthly installments, insurance, and maintenance into their savings account.
This strategy can be particularly impactful for those with a goal in mind or working with a low income, as every dollar saved moves them closer to financial stability. Furthermore, the elimination of auto loan interest charges and potential debt can provide a more secure financial footing and peace of mind.
13. Using public transportation or carpooling to reduce fuel costs
Utilizing public transportation or carpooling can be significant in reducing fuel costs, particularly when you’re committed to saving money on a low income. These alternatives to solo driving not only save on fuel but also on parking fees, and wear and tear on your vehicle.
Another option is embracing car-sharing services, especially if you find that you don’t require a car on a daily basis. Services like Turo and Getaround offer the flexibility of having a car when you need one without the constant financial responsibility associated with ownership.
Remember, it’s all about what suits your lifestyle and frequency of need. By assessing how often you need a vehicle and comparing it with the total costs of ownership, car-sharing could be an excellent way to save money.
14. Selling unused or unwanted items for extra cash
Selling unused or unwanted items is a fantastic way to declutter your space and earn extra cash. You might be surprised how much money you can make by letting go of things you no longer use or need. From clothes you’ve outgrown to homeware that’s gathering dust, each item sold can inch you closer to your savings goal.
Take advantage of this opportunity; a thorough home audit could reveal a treasure trove of sellable items right under your nose. Not only does this increase your income, but it also helps you consider future purchases more carefully.
15. Taking advantage of free entertainment and community events
Leveraging free entertainment and community events is a delightfully frugal way to enjoy yourself without breaking the bank. From concerts and exhibitions to workshops and meet-ups, there’s often a wealth of activities that won’t cost you a penny.
In fact, here at Money Bliss, I have the most popular list of things to do with no money.
With a little creativity and resourcefulness, you can uncover a variety of enjoyable and inexpensive things to do.
16. Automating savings to ensure consistent contributions
Automating your savings is a hassle-free way to ensure you consistently contribute to your financial goals.
By setting up an automatic transfer from your checking account to a savings account, you’re essentially paying your future self first.
This ‘set and forget’ approach helps grow your wealth with minimal effort.
17. Negotiating bills and asking for better rates
Many service providers are open to negotiating prices if it means retaining a customer. Whether it’s your cable package, insurance, or even a credit card interest rate, it’s worth having the conversation.
Remember, the worst they can say is no. But often, companies will offer helpful options when they realize you are considering alternatives due to cost concerns.
One phone call could save you $1000 a year – just like when I decreased my cable bill!
18. Evaluating insurance policies for potential savings
When evaluating insurance policies, it’s critical to regularly assess your coverage needs and shop around for the best rates. Comparing policies from different providers annually can reveal opportunities for lowering premiums or finding more suitable coverage.
Utilize online tools and independent insurance agents to ensure a comprehensive review of available options.
Remember to inquire about bundling policies, as this can often lead to significant savings while consolidating your insurance needs effectively.
19. Meal Planning and Prep: Strategies to Reduce Food Waste
By allocating some time each week to plan your meals, you can ensure that you only buy what you need, thereby minimizing waste and cost.
Learning to meal plan starts with looking at a calendar and a local sales flyer to find the low cost deals.
By creating a weekly plan and incorporating budget-friendly recipes, you can not only eat healthier but also avoid the costlier option of dining out.
20. Forgo single use items
By choosing reusable items over single-use ones, you cut down on waste and habitual spending on disposables. This is also known as frugal green.
For instance, investing in a reusable water bottle, rather than buying single use water bottles.
By integrating sustainable products into your life, you also promote a culture of conservation and mindfulness, inspiring others to make eco-friendly choices.
21. Shopping for groceries with a list to avoid impulse buys
This is key! Especially when shopping with kids or a significant other!
Shopping for groceries with a list is a golden rule to avoid impulse buys, which can quickly derail your budget. By planning your purchases beforehand, you stick to the essentials and resist the temptation of sale items that aren’t on your list or don’t fit your meal plan.
Bonus Tip: Remember to always shop on a full stomach – hitting the grocery store hungry is a surefire way to end up with impulse purchases that aren’t on your list!
22. Buying generic brands instead of name brands
Opting for generic brands rather than name brands is a straightforward and effective way to save money on everything from groceries to over-the-counter medications. These products are often of similar quality and effectiveness but come at a significantly lower cost.
By making the switch to generics, especially for regularly used items, the aggregate savings can be substantial over time.
23. Making bulk purchases for commonly used items to save on cost-per-unit
When you buy in larger quantities, the cost per unit typically decreases, leading to savings that add up over time. Bulk buying works best for non-perishable goods or products you use consistently.
Make a point of buying non-perishable items or products with a long shelf life in bulk to avoid waste and ensure that you truly save money with each bulk purchase.
Just make sure you are going to use it!
24. Cutting costs on personal care by DIY methods
DIY methods for personal care are not just a trend – they’re a practical and often healthier alternative to store-bought products. By creating your own beauty and personal care items, you can significantly trim costs and take control of what goes on and into your body.
Even if you’re not the crafty type, consider starting small with something like a DIY sugar scrub or homemade toothpaste. This is something I did over ten years ago. You might discover a new hobby that enhances both your well-being and your budget.
25. Regular maintenance of vehicles and appliances to prevent costly repairs
Keeping on top of maintenance schedules helps prevent major breakdowns that can lead to expensive repairs down the line.
By making regular maintenance a non-negotiable part of your routine, you protect your investments and save yourself from future financial headaches.
I keep a list in my digital to do list, so I never lose track.
26. Shopping at thrift stores, garage sales, or second-hand websites
Shopping at thrift stores, garage sales, or second-hand websites is an excellent way to acquire items at a fraction of the retail cost. Not only are you being financially savvy, but you’re also participating in the circular economy, reducing waste, and often supporting charitable causes.
Shopping second-hand first is not just about saving money—it’s a lifestyle choice. With patience and persistence, it’s amazing what quality items you can find without impacting your wallet heavily.
27. Learning basic sewing to repair clothes
Mastering the basics of sewing to mend your clothes is a skill that pays off in multiple ways. You save money by extending the life of your garments, reducing waste, and developing a practical capability that can come in handy in various situations.
Honestly, sewing a piece of clothes is a very simple thing. Something that must be learned by the younger generations.
Consider setting aside some time to learn sewing basics via online tutorials, community classes, or even from a friend or family member—it’s a practical step toward financial savings and sustainable living.
28. Utilizing coupons and discounts for shopping
Using coupons and discounts strategically can lead to significant savings on your shopping bills. With a little planning and some savvy shopping techniques, you can ensure you never pay full price for essentials and other purchases.
Remember to only use coupons for items you were already planning to purchase; otherwise, you’re not saving money, you’re just spending less on something extra.
29. Consolidating debt to reduce interest rates
Debt consolidation can be a strategic financial move to lower your overall interest rates and simplify your monthly payments. By combining your debts into one loan with a lower interest rate, you can streamline your bills and potentially save significant amounts of money over time.
Make sure to shop around for the best debt consolidation options and read the fine print. The goal is to find a consolidation plan that truly puts you on a faster track to being debt-free without any hidden costs.
30. Tackle High-Interest Debts First to Free Up More Cash
Addressing high-interest debts is paramount in optimizing your financial strategy. Such debts, often from credit cards or payday loans, can spiral out of control if not managed promptly due to their compound interest rates, which can quickly exceed the original amounts borrowed.
This is known as the debt avalanche.
By zeroing in on high-cost debts, you ensure your income is spent more effectively and not wasted on steep interest fees, accelerating your path to financial freedom.
31. Choose the Right High-Yield Savings Account for Your Emergency Fund
Selecting the right high-yield savings account for your emergency fund is an essential move for growing your savings. High-yield accounts offer interest rates significantly higher than standard accounts, ensuring your emergency fund doesn’t stagnate and keeps pace with inflation as much as possible.
This is one of the bank accounts you need.
32. Implement The Envelope System
The Envelope System is a budgeting method that involves physically dividing your cash into envelopes for different spending categories.
Utilizing the cash envelope system promotes disciplined spending by providing a tangible limit on various expense categories, ensuring you stay within your pre-determined budget and facilitating more intentional money management.
This method also offers immediate visual feedback on spending patterns, which can lead to better financial habits and incremental savings as any leftover cash from each envelope can be added directly to a savings fund, making the act of saving more rewarding and motivating.
33. Using cash -back envelopes to track spending
The use of cash-back envelopes takes the traditional envelope budgeting system a step further by rewarding yourself with savings.
Whenever you spend less than the allocated amount in a budget category, you place the cash difference into a “cash-back” envelope, which can be used for saving or investing.
Adopting the cash-back envelope strategy can provide a rewarding twist to budgeting, making it a fun challenge to spend less and save more.
Boost Your Income: Creative Side Hustles and Opportunities
Boosting your income can provide substantial financial relief, particularly when you’ve maximized your ability to cut costs and still find your expenses stretching your budget thin.
Generating extra income, be it through a side hustle or achieving a raise enhances your ability to save and invest.
With additional streams of revenue, you gain more financial flexibility to achieve goals like paying off debt faster, saving for a significant purchase, or building an emergency fund.
Finding a side hustle or part-time job for additional income
Exploring a side hustle or part-time job is a proven way to supplement your income. In today’s gig economy, there are numerous opportunities for flexible work that can be customized to fit your skills and schedule.
A side hustle can not only pad your wallet but also provide an outlet for creativity and passion, possibly even offering a new career trajectory down the line.
Explore Gig Work and Passive Income Streams
Exploring gig work and passive income streams can accelerate your savings efforts, especially when your regular income isn’t enough to reach your financial goals. These alternative income ideas often provide the flexibility to work on your terms and build up earnings over time.
These revenue channels provide a proactive approach to increasing your disposable income. Researching and choosing the best options for your skills and financial situation can help you build a sound extra income strategy.
Take Advantage of Bank Bonuses and Credit Card Bonuses
Banks often offer attractive incentives to new customers, and high-interest savings accounts can grow your deposits at a faster rate than traditional accounts. The same is true for credit card issuers offering big bonuses.
Taking time to research the best offers and account terms can net you a nice bonus and put your money to work earning more money.
Learn How to Invest Your Money
Learning how to invest your money is paramount to building wealth over time. While it can seem intimidating at first, understanding the basics of investing can enable you to take advantage of compounding interest and market growth to increase your savings exponentially.
Start small, stay disciplined, and continually educate yourself as you grow your investment portfolio. Over time, your investments can become a significant source of wealth and financial security.
Learn how to invest in stocks for beginners.
FAQs: Navigating the Path to Low-Income Savings Success
Saving money when your income barely covers your fixed expenses requires a strategic approach. Begin by scrutinizing your budget to cut any non-essential costs.
Look for ways to reduce your fixed monthly expenses, like negotiating bills or refinancing loans.
Every small change can contribute to your savings, so focus on making incremental adjustments that together can enhance your financial situation.
Even when funds are tight, saving money is possible by making small but impactful changes.
Prioritize reviewing your expenses and identifying areas to cut back, such as non-essential subscriptions or eating out.
Round up loose change or small amounts from your daily transactions into savings.
Seek free entertainment options and consider generating additional income through side hustles or selling items you no longer need.
Each penny saved is a step towards your financial cushion.
Setting Realistic Savings Goals and Celebrating Milestones
Setting realistic savings goals is a key to financial success, particularly when managing a low income.
Determine what you can feasibly save without overstretching your budget. Whether it’s $5 or $50 per week, every bit helps.
Celebrating your achievements, no matter how small, can inspire continued discipline and dedication towards your financial objectives.
Being realistic and flexible with your budget will help you manage your finances more efficiently, ensuring that you set aside money for future growth, even when funds are tight.
This is a great step towards habits of financially stable people!
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Diversifying your assets is one of the best ways to create a sustainable, long-term investment strategy. And one of the ways you can do this is by buying gold.
Investing in gold and other precious metals is a great way to protect yourself against inflation. It also allows you to put your money in an asset that will likely continue to retain its value.
Despite the numerous benefits of investing in gold, many individuals remain uncertain about its viability as an investment and the process for getting started. In this article, we will outline a comprehensive guide on how to buy gold in 2024.
Why should I consider investing in gold?
With growing concerns of an impending recession, investing in gold has become increasingly relevant. This precious metal boasts a multitude of advantageous features that make it a valuable asset to any well-rounded investment portfolio. Here are four reasons why investing in gold is a wise choice:
Gold protects you from inflation: If you’re investing in the stock market, there’s a lot that’s outside your control. But gold is an asset you’ll always have some level of control over, regardless of what happens on Wall Street.
It retains its value: Because gold is much harder to obtain, it retains its value much longer. And you never have to worry about it decaying or losing its structure.
Gold is a high-demand product: There are many ways to use gold, and it tends to be a product that’s in high demand. This is especially true when economic conditions are tight.
Gold is an insurance policy: While some people purchase gold because they’re hoping to make a profit. Others like the security of owning gold and keep it as insurance in case of an economic downturn. Either strategy is an equally valid reason for gold investments.
How do I start investing in gold?
So now that you understand why gold is a good investment, it’s essential to know how to buy and sell gold, so you can get started. Listed below are five steps to make sure you get started on the right path.
Step 1: Decide What Type of Gold You Want to Buy
Start by deciding what kind of gold you would like to purchase. Each product will require a slightly different purchasing strategy, so you need to be clear on this right from the start.
Here are the main types of gold most people choose to invest in:
Gold bullion: When people think of owning physical gold, gold bullion is what usually comes to mind. It is a form of pure gold certified for weight and purity, typically in the form of bars.
Gold coins: A popular option for investors, gold bullion coins are easy to store due to their small size. They can be bought at a premium price and are readily available from reputable dealers.
Gold ETFs: For those not interested in directly owning gold, gold-based exchange-traded funds (ETFs) offer a convenient and cost-effective alternative. These shares can be bought and sold like stocks and are backed by a portfolio of gold-based securities.
Gold mutual funds: These mutual funds invest in companies involved in gold production, mining, and exploration. They may also invest in gold bullion, certificates, and derivatives.
Gold futures contracts: Gold futures are a type of futures contract allowing investors to buy or sell a specified amount of gold at a predetermined price and date in the future. They are best for experienced investors.
Gold jewelry: Accounting for 49% of global gold production, jewelry is a common form of gold ownership. However, it may not be the most profitable strategy, as retail jewelry prices come with substantial markups. Estate sales and auctions may offer better deals but require more time.
Gold mining stocks: With gold mining stocks, investors own a share in a gold mining company instead of the actual gold. These companies are large, global enterprises involved in the extraction and processing of gold ore. Investing in gold mining stocks is another way to profit from rising gold prices.
Gold IRAs: Similar to traditional retirement accounts, gold IRAs are backed by gold and other precious metals like silver, platinum, and palladium. They offer a unique investment opportunity for those looking to diversify their retirement portfolio. Here’s a list of the best gold IRA companies of 2024.
Step 2: Learn How Gold Prices Work
Before investing in gold, it’s essential to understand how gold prices work. The gold spot price, which reflects the cost of one ounce of gold, can fluctuate considerably based on market demand.
To ensure that you make wise investment decisions, research the market and stay up to date with its trends. In doing so, you’ll be poised to make the most of the opportunities presented by decreases in gold prices.
Step 3: Find a Trusted Seller
When investing in gold, you need to choose a trustworthy dealer. While purchasing gold online is convenient, be sure to exercise caution to avoid falling victim to scams.
To ensure that you purchase gold bullion or coins from a reputable source, consider consulting the U.S. Mint for a list of gold dealers in your area.
Once you have identified a potential dealer, make sure you evaluate their credibility. Gather information about their reputation through customer reviews and the Better Business Bureau.
It’s also a good idea to research the dealer’s buyback policies. Obtain a written copy of these policies and keep them in a safe place for future reference.
Step 4: Buy Physical Gold that You Can Sell
If you buy gold that is in demand, it will be easier when selling it at a later time. Stick to the most familiar gold coins and gold bars.
Gold Coins
The following are the most popular gold coins:
American Gold Eagle
Austrian Philharmonic
British Britannia
Canadian Maple Leaf
South African Krugerrand
Gold Bars
The most popular gold bullion bars include:
Credit Suisse
Perth Mint
Valcambi
Englehard
Johnson Matthey
PAMP Suisse
Step 5: Decide How You’ll Store the Gold
Finally, make sure you have a plan in place for storing your physical gold. Sticking several gold bars under your bed probably isn’t the wisest strategy. This puts you at greater risk of having your investment stolen.
Your best bet to store physical gold bars and coins is likely to purchase a safe for your home. You can also use a safe deposit box at a bank or rent a secure storage facility.
Conclusion
Investing in gold can be a rewarding journey, but only if you approach it with caution and foresight. First, decide the type of gold that aligns with your investment objectives, whether it be coins or bars, and make sure to source from a reputable dealer.
Additionally, consider the practical aspects of your investment strategy. For instance, if you opt for gold bars, consider the storage and security of your precious metal, and how you plan to sell it in the future. Gold bars can’t be easily divided, so take that into account.
Furthermore, you’ll need to factor in the rate of return on your gold investment. Ensure that the gold you purchase will not only keep pace with, but also surpass inflation, or you may end up with a loss in the long run.
And finally, avoid the common mistake of putting all your eggs in one basket, especially when it comes to gold investment. While gold and precious metals can be a lucrative component of your investment portfolio, they should never make up your entire investment strategy.
Frequently Asked Questions
Is gold a good investment?
Gold is a unique asset that doesn’t provide regular income in the form of cash flow, unlike other investments. However, owning gold can still have many advantages for your overall investment portfolio.
By including gold in your asset mix, you can diversify your investments and reduce your overall risk exposure. This is particularly important during times of economic uncertainty, such as a recession.
When other investments may perform poorly, gold has historically held its value, helping to protect and stabilize your wealth. This characteristic of gold makes it a useful tool for managing risk and preserving your wealth over the long term.
What is the best way to buy gold?
Acquiring gold can be a smart investment choice, but it’s essential to choose the right seller. Reputable sources include banks, investment firms, and online gold retailers.
To ensure you make a wise decision, do your due diligence and find a dealer with a good reputation, competitive pricing, and dependable customer support.
Furthermore, being aware of the current spot price of gold and market trends is crucial to making an informed purchase. Ultimately, the best form of gold to buy is the one that aligns with your investment objectives and needs.
How much gold should I buy?
Experts generally suggest investing 5% to 10% of your portfolio in gold. During economic downturns and periods of high inflation, some recommend allocating a larger portion.
The ultimate decision on how much to invest in gold should be based on personal financial objectives, comfort with risk, and available funds. As a diversification tool and a hedge against market instability, gold is a consideration worth making.
How much does gold cost per ounce?
Gold can experience significant price swings due to a multitude of factors. These include the ebb and flow of supply and demand, the fluctuation of currency exchange rates, and the instability of political climates.
The value of gold is expressed in U.S. Dollars and is most commonly reported in troy ounces, a unit equivalent to 31.1 grams. As of this writing, gold is priced at around $1875.00 per ounce.
What is the safest way to store gold?
For the ultimate protection of your gold investments, consider utilizing a secure depository, a bank safe deposit box, or an at-home safe.
Depositories provide comprehensive security and insurance coverage. They are an excellent option for safeguarding valuable assets.
Safe deposit boxes, located within banks, offer added protection with key-controlled access. An at-home safe, properly installed and maintained, can also provide a secure storage solution.
Getting the most money possible when selling your car isn’t as difficult as it once was. The internet allows you to reach a wider audience and increase your odds of finding a buyer willing to pay more — whether selling to an individual, online-only auto retailer or traditional dealership.
When choosing where to sell your car, the decision comes down to whether your top priority is convenience and speed or getting the highest sales price. If your main objective is getting the most money, expect to spend a little more time in your endeavor.
Here are steps to help you get the most money for your car, from prepping for the sale to selecting the best sales platform.
Preparing to sell your car
Before presenting your car for sale, there are some preliminary steps to take. These can vary depending on where and how you intend to sell it.
Know your car’s fair market value
Regardless of where you sell your car, research what dollar amount you can realistically expect to receive. Online valuation sites like Edmunds or Kelley Blue Book show average prices paid to buy a vehicle like yours from individual sellers or dealerships in your area. Providing your vehicle identification number (VIN) or license plate number, as opposed to just entering the make and model, will give you a more accurate value.
Have a price range that you’ll accept in mind. That way you can be prepared to set your asking price at the high end if you create your own listing. And, you’ll know a realistic bottom line if a potential buyer wants to negotiate or a dealership makes you an offer.
Invest time to present your car in its best light
Clean your car inside and out, and have this done professionally if possible to remove any odors or stains. You may also want to clean the engine bay and make any minor repairs, such as restoring cloudy headlights. Your car’s appearance can be very important in convincing a potential buyer (or dealer) that the vehicle is well-maintained and worth more.
Also, gather maintenance records as proof that your car has been taken care of and is less likely to have mechanical problems.
Create a detailed description of your car
This step is needed only if you plan to list your car on sites that sell to private parties. Write a description that shows and tells potential buyers why your car is worth the price you’re asking. Take quality photos from all angles, and write a description highlighting selling points like low mileage, upgrades or any remaining transferable warranty.
Choosing where to sell your car
A lot has changed since the days of selling your car by putting a “for sale” sign in its window, a flyer in the supermarket or a classified ad in the local newspaper. While those are still options, you have a wide range of other possibilities available, too.
Here we focus on the three main avenues for selling a car — selling to an individual, to an online-only retailer or to a traditional dealership. Some websites enable you to use more than one approach, for example getting both private party and dealer offers for your car.
We’ll start with the option that typically results in car sellers receiving the highest prices.
Sell your car to an individual or private party
Selling your car to an individual, also called a private-party sale, is typically where you can get the most money. However, it can also be more time-consuming and come with added risk.
You can use traditional ways of letting people know your car is available, like word of mouth. But you can reach a bigger audience by listing your car on online private sales sites — like Facebook Marketplace, Craigslist, Autotrader or eBay Motors.
While you can make the most selling your car privately, that amount could be reduced slightly by certain expenses. Some private sale sites let you list a car for free while others charge a fee, so consider what you’ll be paying. For example, Autotrader charges $49 for a listing, but this fee also includes a Kelley Blue Book listing and a free vehicle history report for possible buyers. Remember to take into account whether you could have travel or transport expenses to get your car to someone who doesn’t live near you.
Also, be wary of scams when selling your car to an individual, which could be the difference between receiving the most money for your car or not receiving payment at all. Scammers can fake just about every form of payment — including cash, cashier’s checks and certified checks. If your buyer is local, you could meet at that person’s bank to ensure the cash or check is legitimate.
If the buyer isn’t local, using an escrow company — a third party that holds your car title until payment is confirmed — is a good option. But beware that escrow companies can be fake, too. To avoid escrow fraud, don’t use a company suggested by the buyer. Take time to identify a legitimate escrow service, such as a local bank or attorney, or a well-known online service. AutoTrader offers escrow services when you sell through its site, but expect to pay the greater of $49 or 0.99% of the car’s selling price.
Sell to an online used car retailer
Selling your car directly to an online-only car retailer, like CarMax, Carvana or NerdWallet’s own Automotive Marketplace, provides a middle ground. The nonnegotiable offer you receive is likely to be less than what you could get from an individual buyer. However, it’s typically quite a bit more than you would get from a traditional dealership.
Online auto retailers provide an easy way to submit your vehicle information online, receive an immediate offer and in some cases even have your car picked up. At pick-up, you’ll most likely have a check handed to you, or you may receive payment into your bank account via direct deposit or wire transfer. You won’t have to worry about scammers or a possibly drawn-out process of fielding inquiries from strangers.
Online retailers do have vehicle requirements. For example, Carvana only buys cars that are model year 1992 or newer, have a working odometer and are safe to drive. However, if your vehicle doesn’t meet such requirements, you may have options to sell to companies like Peddle and NerdWallet Automotive Marketplace that accept older and damaged vehicles.
Sell to a traditional car dealership
Selling your car to a nearby used car lot may be convenient, but it’s usually where you’ll get the least amount of money. Brick-and-mortar dealerships have overhead business expenses that individuals and online retailers don’t, so dealer offers are commonly the least competitive.
Occasionally a dealer might beat other offers, especially if you’re selling an in-demand car that the dealer needs in inventory, but that isn’t the norm. And, it’s up to you to provide other, higher offers for the dealer to beat.
One way to do this is to get offers from online-only retailers, then ask the traditional dealership if it can do better. Another option is to get and compare offers from many dealers through companies like Cars.com, CarGurus and TrueCar, where you can request bids from local dealers or a network of dealerships.
🤓Nerdy Tip
If you’re buying a car from a dealer and trading in your old one, expect the trade-in value to be less than what you could get selling the car yourself. But you may pay less in taxes, since most states charge sales tax on the difference between the trade-in value and new-car price.
Getting more offers can mean more money
Whether you decide to sell your car privately, through an online retailer or at a local dealership — or in some combination of the three — it’s a good idea to cast a wide net. Unless you’re paying to list on a private sale site, it won’t cost you anything to seek offers from multiple sources.
For example, offers from sites like CarMax and Carvana can vary by thousands of dollars, and one doesn’t consistently pay more than the other. So why not get offers from both, along with several other sites? It’s a small investment of time to find the highest offer and make the most possible when selling your car.