Though HARP is often referred to as “Obama’s refinance program,” perhaps Vice President Joe Biden’s name should be in there as well.
Why? Because the man refinances a lot, if his annual financial disclosure form released this past Friday by the White House is any indication.
I wouldn’t go so far as to call him a serial refinancer, but he has refinanced his home mortgage several times since buying a Wilmington, Delaware residence for cash back in 1996.
The home, now valued at nearly $1.4 million according to its current Zillow Zestimate, was originally purchased for just $350,000. Yes, it has quadrupled in value in just 18 short years.
And while Biden could have easily paid off his mortgage in full, he continues to carry multiple liens against the home, including a line of credit.
Joe Biden’s Mortgage Adventure
His latest refinance took place in 2013, just a year after long-term fixed mortgage rates hit an all-time low.
But he still seemed to snag the absolute lowest rate available, getting his hands on a new 30-year fixed-rate mortgage set at 3.375%. Perhaps he paid points, or perhaps he “knows someone” who gave him an ultra-low rate.
Either way, I guess it was too good to pass up, even with his busy schedule as Vice President of the United States.
He also paid off two HELOCs in 2013, including one set at the prime rate, which he took out in 2005, and one set at 4.49% that he received just one year earlier in 2012.
Additionally, Biden took out a new HELOC set at 2.75%, which is a half-point below the current level of the prime rate.
For the record, the new lender is TD Bank, a Toronto, Canada-based bank and lender. The previous bank was Wilmington Savings Fund Society.
It’s unclear why he keeps refinancing as opposed to just paying his home off, but my guess is that he’s in the invest instead of own free and clear camp.
He certainly has all types of investments, with his disclosure form a full two pages longer than the President’s.
Why Hasn’t Obama Refinanced His Mortgage?
Speaking of, the POTUS still hasn’t touched the 30-year fixed mortgage tied to his Illinois residence after nearly a decade, despite pitching HARP to Americans in speech after speech.
It remains set at what now looks like an astronomical 5.625%, about one and a half percentage points above current market rates.
He took out that mortgage back in 2005, before the housing market peaked and eventually busted.
As to why Obama continues not to refinance, he mentioned last year that “you have to be a little careful about these transactions” when you’re the Prez.
Perhaps the scrutiny involved with refinancing isn’t worth the few thousand bucks he’d save. It’s unclear, but Biden is undoubtedly the more aggressive of the two, and that shows in their mortgages too.
We’ll have to wait and see if Obama refinances once he leaves office in a couple of years. As for Biden, his next refinance might be right around the corner.
Read more: When does it make sense to refinance a mortgage?
Relative Strength Index, or RSI, is a momentum indicator used to measure a stock’s price relative to itself and its past performance. Developed by technical analyst J. Welles Wilder, the Relative Strength Index focuses purely on individual stock price movements to identify trading trends for a specific security, based on the speed and direction of those price changes.
RSI allows swing investors to compare the price of something to itself, without factoring in the performance of other stocks or the market as a whole. Investors use RSI to pinpoint positive or negative divergences in price for a security or to determine whether a stock is overbought or oversold.
The RSI indicator is useful in technical analysis, which revolves around finding trends in stock movements to determine optimal entry and exit points. Understanding what the Relative Strength Index measures and how it works is central to a technical trading strategy.
What Is RSI in Stocks?
The Relative Strength Index is a rate of change or momentum oscillator that tracks stock price movements. You can visualize it as a line graph that moves up or down, based on a stock’s price at any given time. The Relative Strength Index operates on a scale from 0-100. Where the RSI indicator is within this range can suggest whether a stock has reached an overbought level or if it’s oversold.
RSI is not the same thing as Relative Strength analysis. When using a Relative Strength Comparison (RSC), you’re comparing two securities or market indexes to one another to measure their relative performance. 💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.
How Does the RSI Indicator Work?
The Relative Strength Index operates on a range from 0-100. As stock prices fluctuate over time, the index can move up or down accordingly. Traders typically use the RSI to track price movements over 14 periods (i.e. trading days), though some may use shorter or longer windows of time.
When the RSI indicator reaches 70 or above, it could mean the underlying asset being measured is overbought. An RSI reading of 30 or below, on the other hand, suggests that the asset is oversold. The length of time a stock remains in overbought or oversold territory depends largely on the strength of the underlying trend that’s driving price movements.
The Relative Strength Index can throw off different patterns, depending on whether stocks are in a bull market or bear market. Investors compare the movements of the RSI indicator with actual price movements to determine whether a defined pricing trend actually exists and, if so, in which direction it might be heading. Analyzing moving averages for the stock can help determine the presence of a clear pricing trend.
Recommended: 5 Bullish Indicators for a Stock
RSI Formula
Here’s what the Relative Strength Index formula looks like:
RSI = 100 – (100 / (1 + RS))
In this formula, RS represents the ratio of the moving average of the tracking period’s gains divided by the absolute value of the moving average of the tracking period’s losses.
Here’s another way you might see the Relative Strength Index formula displayed:
RSI = 100 – [100 / ( 1 + (Average of Upward Price Change / Average of Downward Price Change ) ) ]
The RSI formula assumes that you’re able to follow a stock’s pricing changes over your desired tracking period. More importantly than that, however, is knowing how to make sense of Relative Strength Index calculations, which investors often display via a stock oscillator.
Interpreting RSI Results
Reading the Relative Strength Index isn’t that difficult when you understand how the different ranges work. Depending on where the RSI indicator is for a particular stock or market index, it can tell you whether the market is bullish or bearish. You can also use the RSI, along with other technical analysis indicators, to determine the best time to buy or sell.
Above 70
An RSI reading of 70 or higher could indicate that a stock is overbought and that its price might move back down. This could happen through a reversal of the current price movement trend or as part of a broader correction. It’s not unusual for stocks to have an RSI in this range during bull market environments when prices are rising. If you believe that the stock’s price has reached or is approaching an unsustainable level, an RSI of 70 or higher could suggest it’s time to exit.
Below 30
When a stock’s RSI reading is 30 or below, it typically means that it’s oversold or undervalued by the broader market. This could signal a buying opportunity for value investors but it could also indicate the market is turning bearish. It’s more common to see RSI readings of 30 or below during downtrends when stock prices may be in decline across the board.
40 to 90 Range
During bull markets, it’s not uncommon to see the Relative Strength Index for a stock linger somewhere in the 40 to 90 range. It’s less common to see the RSI dip to 30 or below when prices are steadily moving up. An RSI reading of 40 to 50, roughly the middle of the 0-100 scale can indicate support for an upward trend.
10 to 60 Range
In bear markets, or those filled with fear, uncertainty, and doubt, it’s more common to see the Relative Strength Index hover somewhere in the 10 to 60 range. It’s not unusual for stocks to reach 30 or below when the market is already in a downward trend. The middle point of the RSI can act as a support point, though the range shifts slightly to between 50 and 60.
Common RSI Indicators
Relative Strength Index indicators can help investors spot pricing trends. That includes identifying up and down trends, as well as sideways trends when pricing levels consolidate. The reliability of these indicators often hinges on the current phase of a stock or the market as a whole. When reading RSI indicators, it’s important to understand divergence and swing rejections.
Divergence
A divergence represents a variation or disagreement between the movement of the RSI indicator and the price movements on a stock chart. For example, a bullish divergence means the indicator is making higher lows while the price movement is establishing lower lows. This type of divergence can hint at increasing bullish momentum with a particular stock or the greater market.
A bearish divergence, on the other hand, happens when the indicator is making lower highs while prices are establishing higher highs. This could indicate that investor sentiment is becoming less bullish.
Swing Rejections
A swing rejection is a specific trading technique that involves analyzing RSI movements when pushing above 30 or below 70. Swing rejections can be bullish in nature or bearish.
For example, a bullish swing rejection has four parts or steps:
• RSI is at an oversold level
• RSI moves above 30
• A dip is recorded without rating as oversold
• RSI passes its recent high
Meanwhile, a bearish swing rejection also has four parts or steps:
• RSI reaches an overbought level
• RSI drops below 70
• RSI hits new highs without dropping back to overbought levels
• RSI passes recent lows
Swing rejections make it possible to utilize divergence indicators to spot bullish or bearish trends in their earliest stages. 💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
Is RSI a Good Indicator to Use?
Yes, in certain circumstances. Relative Strength Index can be a good indicator to use in technical analysis, as it can make it easier to detect when a stock or the broader market is overbought or oversold. Understanding how to interpret RSI and its correlation to price movements could help you spot buy or sell signals and detect bull market or bear market trends.
That said, RSI also has some limitations. For example, the RSI can produce false positives or false negatives when bullish or bearish trends don’t align with the way a stock’s price is moving. Like other technical analysis indicators, it’s not an exact way to gauge the market’s momentum. So if stocks are hovering somewhere in the 40 to 60 range, it may be difficult to decipher whether the mood is bearish or bullish.
When using RSI, it’s helpful to incorporate other technical analysis indicators to create a comprehensive picture of the market. Exponential moving average (EMA), for example, is a type of moving average that uses the weighted average of recent pricing data to draw conclusions about the market.
Traders often use RSI in conjunction with other trend indicators, such as the Moving Average Convergence Divergence, the Stochastic Oscillator, or the Volume-Weighted Average Price.
RSI vs MACD
Moving Average Convergence Divergence (MACD) is a technical analysis indicator that investors may use alongside RSI. This indicator can help them determine when to buy or sell, based on the correlation between two moving averages for the same security.
Specifically, it requires looking at a 12-period moving average and a 26-period moving average. To find the MACD line, you’d subtract the 26-period from the 12-period, resulting in a main line. The next step is creating a trigger line, which is the nine-period exponential moving average of the main line. The interactions between these two lines can generate trading signals.
For example, when prices are strongly trending in a similar direction the main line and trigger line tend to move further apart. When prices are consolidating, the lines move closer together. If the main line crosses the trigger line from below, that can produce a buy signal. If the main line crosses the trigger line from above, that can be construed as a signal to sell.
While RSI and MACD are both trend indicators, there are some differences. Relative Strength Index measures the distance between pricing highs and lows. So you’re looking at the average gain or loss for a security over time, which again usually means 14 periods. The MACD, on the other hand, focuses on the relationship between moving averages for a security. It’s a trend-following signal that, like RSI, can indicate momentum.
RSI vs Stochastic Oscillator
The stochastic oscillator is a momentum indicator for technical analysis that shows where a stock’s closing price is relative to its high/low pricing range over a set period of time. The stochastic oscillator can also be used to track pricing for a market index.
Central to the use of the stochastic oscillator is the idea that as a stock’s price increases, the closing price inches closer to the highest point over time. When the stock’s price decreases, the closing price lands closer to the lowest low. Investors use this indicator to determine entry and exit points when making trades.
However, investors interpret RSI and stochastic oscillator readings differently. For example, with a stochastic oscillator, a reading of 20 or below generally means a stock is oversold, versus the 30 or below range for RSI readings. When used together, Relative Strength Index and stochastic oscillators can help with timing trades to maximize profit potential while minimizing the risk of losses.
Can You Use RSI to Time the Crypto Market?
Stocks are not the only asset class for which investors use the RSI. Investors also use the Relative Strength Index to assess conditions in the crypto markets and whether it’s time to sell or continue to HODL.
Cryptocurrency traders may use RSI to gauge momentum for individual currencies. Again, they’re looking at the highs and lows to get a sense of which way prices are moving at any given time. The RSI indicator can help with choosing when to buy or sell, based on previous price movements.
The same rules apply to crypto that apply to stocks: An RSI reading of 70 or above means overbought while a reading of 30 or below means oversold. Likewise, a reading above 50 signals a bullish trend while a reading below 50 can signal a bearish trend. Investors can also use a bearish divergence or bullish divergence to spot a pullback or an upward push.
As with stocks, however, it’s important to remember that RSI is not 100% accurate.
Recommended: Crypto Technical Analysis: What It Is & How to Do One
The Takeaway
RSI can be used to pinpoint positive or negative divergences in price for a stock or to determine whether it’s overbought or oversold. If you’re interested in technical analysis and trending trading, RSI can be a useful metric for making investment decisions.
The RSI is just one tool that you can use to devise a strategy for your portfolio. There are other less technical tools you can use as well when you’re starting to build a portfolio.
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What Is the Purpose of Bonds in Your Portfolio?
Bonds have historically served as a counterweight to stocks, as investors approach retirement.
For all their advantages, stocks come with one enormous disadvantage: volatility. When you first retire, you face something called sequence risk: the risk of a stock market crash early in your retirement, before your stock portfolio has compounded enough to withstand a deep drop.
Here’s how bonds protect you from sequence risk, and the role they play in your retirement portfolio.
1. Low Risk
Bonds are interest-only debts. When you buy a bond, the issuer (the borrower) agrees to pay you interest at a set rate for a certain period of time. At the end of that period, the bond matures and you get your principal investment back.
Bonds come with two risks. First, and most relevantly to retirees, the bond issuer could default. That rarely happens, at least outside of the junk bond market. The other risk is that interest rates rise, so the value of your existing bonds goes down on the secondary market. But this risk doesn’t really apply to retirees simply looking for ongoing interest income rather than looking to trade bonds.
The low risk of bond default counterbalances the real risk of stock market corrections and crashes. Retirees can lean on their bond income if the stock market crashes, and (hopefully) avoid selling while stock prices are low.
2. Low Correlation with Stocks
Bonds provide diversification for investors. Bond returns have a low correlation with stock returns: they rarely crash at the same time as stock markets. In fact, bond prices normally rise when stocks crash, as investors flee stocks for the safety of bonds.
Once again, this protects retirees from the risk of a stock market crash.
3. Stable Income
Retirees need passive income to live on, in the absence of a paycheck. Interest payments from bonds can provide that steady income.
The same can’t be said for stocks. Not all stocks pay dividends, and even those that do can change their dividend payment at any time. They could lower or eliminate their dividend entirely, leaving retirees without income. The retiree could sell their stocks to generate income of course, but that reduces their net worth.
Can Real Estate Fill the Role of Bonds in Your Portfolio?
The short answer: yes, if you know what you’re doing. Which, of course, not everyone does.
Real estate investments can earn you ongoing income, with low risk and low correlation to the stock market. So they can serve the same purpose as bonds in your retirement portfolio, at a higher return. In fact, one study reviewing all asset classes for the last 145 years found that rental properties offered higher returns than stocks, with far lower risk.
Still, some types of real estate investments require work on your part. You could invest in publicly-traded REITs, bought and sold on stock exchanges and just as passive as stocks, but they tend to share a high correlation with stock markets. That gives them little diversification value.
But there are many types of real estate investments, each with their own pros and cons. Real estate will never be completely risk-free like Treasury bonds, but it can offer strong returns at low risk, especially if you diversify.
Ways to Invest in Real Estate as a Bond Alternative
The permanent environment of low interest rates in the 21st century have made bonds unappealing and real estate far more appealing. Investors can use leverage to buy real estate with other people’s money, at low interest.
Or not–many of the real estate investing options below don’t involve leverage at all.
Consider the following ways to invest in real estate as options to replace bonds in your investment portfolio.
1. Crowdfunded Private REITs
Publicly-traded REITs come with several downsides, beyond high correlation with stock markets. They’re volatile, with prices bouncing up and down similarly to stocks. But they’re also required by the SEC to distribute at least 90% of their profits each to shareholders, in the form of dividends. That gives them high dividend yields, but it also makes it hard for REITs to invest money in new properties to grow their share price.
Private, crowdfunded REITs such as Fundrise, Streitwise, and Diversyfund don’t have the same restriction. They can grow the value of their fund share prices by reinvesting profits into new properties.
Even so, many do still offer high dividend yields that rival or even beat public REITs. Fundrise pays dividend yields in the 4-7% range, while Streitwise pays dividends in the 8-9% range.
Crowdfunded REITs represent one of the easiest and most passive ways to invest in real estate. No mailings or labor to find good deals on properties, no tenant screening or rent collection hassles, just buy shares and sit back.
2. Crowdfunded Investment Property Loans
Hard money lenders issue short-term loans to investors who fix and flip properties, or refinance them after renovating them (the BRRRR method). But where do hard money lenders get their funds to lend?
From you, in some cases. For example, GroundFloor lends short-term investment property loans for buying and renovating, and they raise the money from retail investors.
You get to pick and choose which loans you want to fund, and you can lend as little as $10 per loan. Which means anyone with $10 in their pocket can invest in real estate, at least indirectly through property-secured loans.
If the borrower defaults, the lender forecloses, and you get your money back that way. Since hard money lenders fund at a relatively low LTV, that provides strong protection against default. Read: relatively low risk.
Related Read: Thinking of Getting into Retail Investing? Here Are 7 Things to Consider
3. Rental Properties
You can also buy rental properties, of course.
Direct real estate investing comes with plenty of advantages. You can leverage other people’s money by using an investment property loan to fund 75-80% of the cost. Investors get spectacular tax benefits, from rental property tax deductions to property depreciation. And rental income in retirement doesn’t expire or diminish — quite the opposite. Rental cash flow rises over time, as rents rise and provide a hedge against inflation.
Is rental income good for retirement? Absolutely, but it does come with a few caveats. As noted above, buying and managing rental properties takes work. Even if you hire a property manager, you still have to manage the manager.
Rental income is predictable as a long-term average, so you can forecast returns with a rental income calculator. But net rental cash flow each month varies wildly, as you experience vacancies, turnover, or repairs. That means retirees need to budget accordingly with an emergency fund, and not depend on a steady paycheck from every property, every month.
4. House Hacking
Want free housing? Explore options for house hacking, or finding ways for other people to cover your housing expenses.
The traditional model involved multifamily house hacking: typically buying a duplex or triplex, moving into one unit, and renting out the neighboring unit(s). The rents from your neighbors cover your mortgage payment and ideally your maintenance costs as well.
But that’s not the only way to house hack. You can also bring in housemates, or rent rooms or units on Airbnb, or rent out storage space on Neighbor.com.
By eliminating–or at least greatly reducing–your housing payment, you don’t require nearly as much passive income from your investments to live on in retirement.
5. Private Notes
A “note” is the legal document that you sign when you borrow money. For example, when you took out your last mortgage, the most important document you signed was the promissory note.
You can lend money privately to other real estate investors, having them sign a private note. You set the terms of the loan, including the interest rate, any fees, loan term, and any other factors.
Beware, however, that lending money to other investors largely comes down to trust. Unless you file a lien against their property, you have little recourse if they default on you. Only lend money to experienced investors you know well and trust implicitly to pay you back.
Get it right, and you can earn high returns completely passively.
6. Land Notes
There’s a lot to love about land investing.
To begin with, land offers low risk and high returns. It also doesn’t necessarily require much cash to invest. Best of all, you don’t have to hassle with contractors or tenants, which means low stress and far fewer complications. No repairs or renovations, no chasing tenants for rent collection, no property damage by uncaring renters.
For all that, land investing requires you to approach it like a business. You can eventually automate that business to run in the background with only an hour or so required each week from you, but it takes time and labor to get to that point. Many retirees (and employees for that matter) don’t want to launch a side hustle.
7. Real Estate Syndications
Syndications offer another way to invest in real estate for high potential returns. But unlike land investing or rental properties, syndications are largely passive investments.
They work like this: an experienced real estate investor goes out and finds a (hopefully) great deal that costs more than they can afford to buy on their own. So they bring in outside investors to partner with them on the deal, on exchange for a deal-finder fee or bonus.
The outside investors become partial owners of the property and share in its cash flow and profits upon sale. But we surrender most management decisions to the syndicator, the person who found and continues to oversee the deal.
We get to invest fractionally in a large real estate project, such as an apartment building, that we would never be able to buy individually. And an experienced real estate investor does all the work for us.
Of course, no investment is perfect. To begin with, most syndication deals only allow accredited investors to participate. The SEC makes the regulation too onerous to allow retail investors to partner on these deals. Along similar lines, syndications typically require a high minimum investment, often in the $50,000-$100,000 range.
And like any managed investment, you place your trust in the manager–in this case, the syndicator. You need to do your due diligence on both the property and the syndicator if you want peace of mind in your investments.
As any long-term investor in the market can attest, stocks rise and fall — influenced by a mix of economic trends and supply and demand.
Given the inherent volatility of stock values, there are periods when the market is down, and times when it’s gaining steam. So, how low can a stock go? Well, in some cases, stock prices can fall all the way to zero.
What happens when a stock goes to zero? Watching a stock in free fall can induce fear and panic in investors, causing some to sell their holdings. While most every investor aims to buy low and sell high, timing the stock market is very challenging and doesn’t guarantee that investors will see gains.
Sometimes when a stock goes down in value it can present an investment opportunity, but in other cases the stock could fall to zero and never recover. In the latter case, it may benefit investors to sell before the stock price falls all the way down to zero.
What Causes a Stock to Fall to Zero?
When a stock falls to zero, it doesn’t mean that the company is worth nothing. Some companies with very low stock values are still earning money or possess assets. And, some investors buy penny stocks that have extremely low prices.
What happens to a company when stock prices fall to zero? If a company continuously spends more money than it earns, and investors sell off the stock, ultimately, that can lead to the company going bankrupt. Most companies file for either Chapter 7 or Chapter 11 bankruptcy before their stock reaches $0.00.
Chapter 7 Bankruptcy
With a Chapter 7 bankruptcy filing, the company must sell off its assets until it can repay lenders and creditors. The order that stakeholders get paid is: creditors, bondholders, preferred stockholders, common stockholders.
This means that if the asset sale doesn’t bring in enough money to pay everyone, it’s likely that common shareholders won’t receive a dime. In this case, stockholders lose all the money they had invested in that stock.
Under Chapter 7, stock trading and all business activities must be put on hold.
Chapter 11 Bankruptcy
Under a Chapter 11 bankruptcy, the company negotiates loan terms with its creditors in order to avoid selling off assets. With Chapter 11, companies can still conduct business and their stock can be traded.
Once a company files for Chapter 11, it is likely that the stock will continue to fall, since many investors won’t have much faith in the business. Sometimes shares are canceled with a Chapter 11 filing. In that case, investors lose all the money they had put into the stock.
Even if a company files for bankruptcy before its stock falls to zero, their attempts to salvage the business may ultimately fail and the stock could become worthless. However, it can take a strong team and business model to go public and get listed on stock exchanges in the first place, so some bankrupt companies may have the potential to make a comeback.
Some companies with very low stock prices get acquired by larger companies before their stock falls to zero. Even a company with a low stock might have a promising product or service that a larger company is able to sell successfully. One example of this is when Alphabet acquired FitBit in 2021. 💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.
What Happens to a Company When Stock Prices Fall to Zero?
Some stock exchanges delist stocks if they fall below a certain level. For example, the New York Stock Exchange will remove a stock if its share price falls below $1 for 30 days in a row.
And, as mentioned above, if a company files for Chapter 7 bankruptcy, its stock will be delisted temporarily.
Can a stock go negative? Fortunately, it is not possible for a stock’s price to go into the negative territory — under zero dollars in value, that is.
Still, if an investor short sells or uses margin trading, they may lose more than they invested. For this reason, margin trading and short selling are risky investment strategies.
Short selling is when an investor predicts that a stock is going to decrease in value. So, rather than buying the stock, they ‘bet’ that it will go down. If the stock does in fact go down, they make money.
But, if the stock ends up increasing in value, they lose money. Potentially, an investor in this scenario could lose more money than they put into the initial short sell.
Margin trading is when an investor borrows money from the brokerage firm to trade stocks. If the investor makes a trade that doesn’t go in their favor, they can end up owing the brokerage firm money.
How Low Can a Stock Go?
Stock prices can fall all the way down to zero. That means the stock loses all of its value and a shareholder’s earnings are typically worthless. In this case, the investor loses what they invested in the stock.
Reasons for a Stock Losing Value Down to Zero
What makes a stock fall to zero? The are a number of reasons that may come into play, including:
• Losses in the company’s revenue or earnings, especially if the losses are persistent
• A perception in the market that the stock is overvalued
• Management issues, shake-ups in the company’s leadership positions, scandal, fraud — in short, anything that can make investor sentiment turn negative
For investors, these are all signs a stock is underperforming and red flags to watch out for.
Types of Stocks Likely to Fall to Zero
What is a stock that falls to zero? Every stock comes with risks, but some are more risky than others. Besides companies on the brink of bankruptcy, there are certain types of businesses that have a higher chance of becoming worthless.
Knowing what to look for and researching and evaluating stocks before buying is key to building a resilient portfolio. Some of these higher risk stocks might include:
Companies With Weak Business Models
Even if a stock is currently performing well, it may fall in the future if the business model is fundamentally flawed. For this reason, many investors prefer to research a company’s practices, team composition, and business model before investing in its stock.
Penny Stocks
Stocks that trade below $5 are known as penny stocks. These low price stocks tend to be very volatile, as the companies that issue them have low or no profit.
Sometimes penny stocks can even turn out to be scams.
Buying the Dip
Rather than selling stocks when the market declines, some investors believe it can be a good idea to buy while the market is low. By buying the dip, as it’s known, investors pay less for stocks.
And, since these stocks still have the potential to go up in value as the market recovers after the decline, they can be preferred by long-term investors who may have more time to let their portfolio go back up in value.
However, if a company is going bankrupt or otherwise likely to fall to zero, it’s unlikely to offer a strong return on investment.
It’s also very difficult to time the market, so a trader might buy in when they think the market has hit bottom, only to watch it continue to go down.
Generally, building a diversified portfolio can offer higher returns on average over time than trying to time the market based on shorter-term trends or dips.
Examples of Stocks That Fell to Zero
There are two particularly infamous examples of stocks that fell to zero:
Enron
In the 1990s, Enron, an energy company, hid massive losses by using accounting tricks. At one point, its stock price was over $90. In 2001, analysts and investors became suspicious and began asking questions. That same year, the company reported huge losses, and its stock plummeted to $0.26 right before it declared bankruptcy.
World Com
This telecom company falsely inflated its cash flow and net income by listing expenses as investments to hide losses. Its stock price fell from more than $60 a share to less than $1 before the company declared bankruptcy in 2002. 💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.
How to Prevent Holding a Stock that’s Falling Lower
While it’s true that the market is impossible to predict, there are some measures that investors can take to protect themselves from losses — especially in the case of a stock spiraling towards zero. Below are some common preventative investment measures.
Stop Losses
Knowing when to sell a stock is important. Investors can set up a trade to automatically sell shares if a stock reaches a specific price. This type of trade is called a stop loss. It’s a strategy that could help prevent losses in the case of an individual stock or overall market drop.
There are multiple types of stop losses, including trailing stops and hard stops. Trailing stops move the stop level up as the stock rises in value, but stay in place if the stock falls. Hard stops are fixed at a specific price and will execute if the stock falls to that price.
Limit Orders
Limit orders allow investors to set the price at which they want to buy a stock. An investor selects the price and the number of shares they wish to buy. In practice, the order only executes if the stock then hits that price.
This is one way for traders to step away without worrying that they’ll be buying in at a price they didn’t want.
Put Options
A put option is a type of order that gives traders the option to sell or short-sell a specific amount of stock at a specific price, within a certain time frame. If a stock decreases in value in this case, the trader can still sell it at a higher price than it previously held.
Diversifying Asset Holdings
In an effort to prevent losses, investors may want to diversify their portfolios into a mix of non-correlated assets — dividing their holdings between assets at a higher and lower risk of fluctuating in value.
In a diversified portfolio, if one asset class decreases in value, the other types may not. Over time, the ups and downs of each asset could possibly balance the losses in each.
Setting Up a Stock Portfolio
By researching companies and setting up a portfolio according to one’s personal risk tolerance, and then keeping tabs on the assets in that portfolio to monitor their performance, it may be possible to help hedge against a stock sinking down to zero.
FAQ
At what point does a stock become worthless?
A stock becomes worthless when it falls to zero and has no value. In this case, an investor loses the money they invested in the stock.
How low can a stock go before being removed?
Some stock exchanges delist stocks if they fall below a certain level. The New York Stock Exchange will remove a stock if its share price falls below $1 for 30 days in a row, for instance.
Do you owe money if a stock goes negative?
No. A stock price can’t go negative, or, that is, fall below zero. So an investor does not owe anyone money. They will, however, lose whatever money they invested in the stock if the stock falls to zero.
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Inside: Dreaming of ways to make money fast as a woman? Stop dreaming and take action. These are genius ways of making money online and at home.
Making money fast is crucial for maintaining a comfortable lifestyle, especially in the face of rising living costs. It can be the key to financial stability, providing additional funds to support and enjoy your lifestyle.
As a woman, you need to know how to make money fast.
This isn’t just about getting rich quickly. It’s about women gaining the freedom to live independently without financial constraints.
The feeling of financial security lessens stress; not having to worry over unexpected expenses plays a big role in your overall well-being.
This is what you want to do – make money fast!
Good news! You are in the right spot and I’ll show you my favorite ways to make money online.
Get into the right mindset, ladies! Making money fast isn’t just possible, but also liberating.
How can I make easy money ASAP?
Making easy money quickly can be achieved in various ways that utilize your skills and knowledge.
First and foremost, consider your own skills and expertise, and determine whether they could apply to jobs like cake baking, childcare, bookkeeping, house cleaning, or freelance writing.
This will tell you the easiest way for you to make money quickly. For me, I prefer to trade options in the stock market. Whereas someone else may choose babysitting or dog walking.
You need to find how to make money fast and we will help you with that decision.
Why Making Money Fast is Important
1. Makes it possible to live comfortably 2. Enables you to afford the best quality of life 3. Gives you the freedom to pursue your dreams 4. Gives you the freedom to live without financial constraints 5. Provides you with security and safety 6. Freedom to give back to your community 7. Freedom to choose how you spend your time 8. Opportunity to take risks and start a business 9. Provides you with a sense of power and control 10. Live without financial worry
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Are you passionate about words and reading?
If so, proofreading could be a perfect fit for you, just like it’s been for countless of readers! Learn how you can create a freelance business as a proofreader.
Check out this free workshop!
Bookkeeping is the most stable, reliable & simple business to own. This is how to make a realistic income -either part-time or full-time.
Find out TODAY if this is THE business you’ve been looking for.
How can I make a lot of money in hours?
Making income in a matter of hours for a woman is entirely feasible with a blend of freelancing, leveraging gig economy platforms, and capitalizing on your skills or assets. Here’s a quick guide for you:
Consider freelancing: Establish your writing, graphic design, or programming services on platforms like Fiverr or Upwork.
Dive into the gig economy: Sign up for TaskRabbit, Airbnb, or Turo to start earning.
Try online tutoring or content selling: Proficient in any subject or have strong graphic design skills? Go for tutoring or sell your content.
Indulge in buying & selling: If you’re good at purchasing low and selling high, then swap clothes or furniture, or even stocks.
Take online surveys or join market research groups on sites like Swagbucks for a rapid source of income.
Remember, time management is crucial for balancing multiple streams at once. Don’t forget to schedule wisely!
How to Make Money Fast as a Woman
No matter who you are, making money can be tough. But if you’re a woman, it can feel impossible.
From getting paid less than men for the same job to having a harder time getting promoted, the deck is often stacked against us.
Just so you know that making quick money in one day won’t happen overnight.
So, I’m going to tell you the best ways to make money fast as a woman.
1. Sell Services
Selling your skills or expertise is a fast, viable way to earn money. It’s all about utilizing what you already know to provide value to others.
Identify your marketable skills, such as cake baking, freelance writing, bookkeeping or even organizing spaces.
Brainstorm which of these services people could pay for.
Remember, you can tap into both physical tasks, like house cleaning or pet-sitting, and digital ones, like creating digital printables or offering consulting in your field of expertise.
Expert Tip: Launch your service with a few testimonials, helping to build trust with potential customers from the get-go.
2. Freelance
Freelancing is a savvy way for women to stack up earnings fast, offering flexibility and complete control over the workload. It’s a ticket to dodge conventional office politics and punch above your earning potential.
Start by identifying your freelance niche. You can be a writer, graphic designer, or anything you’re skilled at. Many people use their transferable 9-5 skills to side hustle.
Then, create your profile on platforms like Fiverr, Upwork or Guru – be sure to showcase your accolades.
Set your rates, then start connecting with clients looking for your talent.
Remember, success in freelancing is driven by quality and consistency. So, sharpen your skills and always exceed your client’s expectations.
Freelancing may start as a side gig, but with dedication, it can grow into a full-time job.
3. Become a Product Reviewer
Being a product reviewer is an intriguing job opportunity for those who enjoy sharing candid feedback about their experiences with various products.
As a product reviewer, you are required to assess products often sent to you from diverse companies.
Your role involves providing a comprehensive review that could range from making an unboxing video to writing a detailed article about the product’s features and performance.
This kind of job requires an unbiased perspective and the capacity to articulate your thoughts and experience in a detailed, user-friendly manner.
Companies value this form of direct feedback as it provides them with significant data about their product’s strengths and weaknesses as perceived by an end-user.
4. Virtual Assistants
As a woman, becoming a virtual assistant could be your fast lane to earning a substantial income.
This is especially a great option if you’re excellent in organization and time management along with the need for flexibility.
For many becoming a virtual assistant with no experience is possible. And very lucrative.
Finally, for your best shot at success in this field, taking a course to improve your learning curve is extremely helpful.
Potential to earn up to $43,000 per year.
5. Sell Your Crafts
Ladies, have you thought of turning your love for crafts into a profitable venture?
Find out what crafts are in demand. The higher the demand, the more profitable it would be to make and sell these crafts.
Remember, profitability hinges on what you sell and how much you sell. Happy crafting!
While you are limited on what you can earn by what you can make, it is possible to make money doing something you absolutely enjoy.
6. Stock Trading
Stock trading may seem daunting but it can be a quick route to financial independence, especially for women.
With the right tools, information, and mindset, you can swiftly navigate the market and amplify your earnings. In fact, this is something Teri Ijeoma did herself.
Educate yourself on the basics before you invest. This is exactly what I did and my investment has paid off.
Always be aware of the risks involved in stock trading and proceed cautiously. However, building up an investing education is a wise decision.
Learn how fast can you make money in stocks.
7. Babysit
Babysitting is a versatile side hustle offering flexible hours and good earning potential.
It’s an ideal opportunity if you’re seeking quick, extra income and enjoy children.
Obtain optional certifications like CPR and first aid to enhance your appeal. Visit platforms like Care.com, Sittercity, or Urbansitter to create your profile and connect with clients.
8. Transcriber
One field that remains highly overlooked is transcription.
A transcriptionist listens to audio files and converts them into written documents.
Gain a thorough understanding of the industry. Check out this free webinar to get the basics right.
Consider specializing in legal or medical transcription. These niches often fetch higher wages.
You could easily make $3000-$4000 monthly, working on your own schedule.
Remember, practice and precision can help you achieve a lucrative transcription rate.
9. House Cleaning
Cleaning can be a rewarding gig, especially if you like tidying spaces.
Despite recognizing the need for a clean home, many people often struggle to find the time or energy to routinely clean their homes. This is where the prospect of a housecleaning business arises.
Busy homeowners, parents juggling work and childcare, elderly individuals needing assistance, and even businesses needing regular cleaning services are all potential clients for a housecleaning business. This demand provides a consistent income flow for those offering cleaning services.
In fact, individuals transitioning into this field of work can negotiate their wages with clients, potentially earning more than $15 an hour based on the complexity and demands of the job.
10. Sell Printables on Etsy
Selling printables is an effective and lucrative method to generate passive income.
Once printables such as planners, calendars, and journals are designed, created, and listed for sale on platforms like Shopify or Etsy, they can consistently produce income without requiring continual input or maintenance.
According to several experts, one of the keys to making substantial profits from printables is to differentiate your products.
Building upon this idea of making money from printables, the free Printables Workshop by Gold City Ventures offers comprehensive insights into the process of creating and selling aesthetically pleasing printable products online. This accessible course can be an excellent starting point for beginners looking to navigate the printables market.
Selling printables on Etsy might be the perfect venture for you!
11. Dog Walking
Looking for a fun-filled way to make some quick bucks?
Dog walking could be the right side hustle for you, especially if you’re an animal lover.
Easy to find jobs for dog walking.
Suitable for people with flexible schedules.
Offers an active way to earn money.
Option to select your rates with platforms like Rover.
High demand especially due to increasing pet adoptions and busy pet owners.
You can work when you need to and not take clients when you don’t want too.
12. Make Money Blogging
Blogging is a popular and prevalent way to earn money. Many blog owners are women who want the flexibility to earn significant money at their own pace and schedule.
Earning money through blogging allows you to focus on something you’re passionate about. Any topic that can provide value to an audience can be blogged about. Targeting a niche that has been overlooked by existing blogs can increase your blog’s potential earnings.
Starting a blog doesn’t require formal training, but it does require a willingness and ability to write effectively for an audience.
By employing monetizing avenues, like affiliate marketing and advertising, a blogger can boost their earning significantly.
Despite the vast number of existing blogs, the industry is very accommodating toward new voices, especially female voices. Thus, knowing how to monetize a blog can offer women many opportunities.
Remember, blogging is not just about earning fast bucks, it also needs consistent efforts. It’s rewarding but can start slow.
13. Ride-Sharing
Ridesharing is an excellent opportunity for women looking to make fast money. With apps like Uber and Lyft, you can earn an income simply by offering transportation services.
Here are a few tips to increase your earnings:
Consider driving during peak hours, weekends, or during special events to cash in on higher demand.
Choose busy locations such as city centers and nightlife spots to increase your chances of getting rides.
Maintain good customer service and ensure safe driving to uphold your rating and receive more ride requests.
14. Office Cleaning
Considering the hustle and bustle of the daily grind, office cleaning can be an untapped treasure trove for women seeking quick cash. Given the high demand and flexible hours, it’s an ideal source of extra income.
You must identify office premises needing cleaning services. Reach out to the owners or management, and propose your services.
Think about offering your services to offices in your local area. It’s a fast way to make extra money while managing your other commitments.
15. eBay Arbitrage
Looking to earn some quick money? eBay Arbitrage could be the game-changer you need.
Aimed mostly at women who love shopping, it’s about buying products cheaply and selling them on eBay for a profit.
First, hunt for bargains in thrift stores, sales, or online markets.
Go with high-demand items; electronics, collectibles, or brand sneakers are a good start.
Then, create your eBay store and list your finds at a competitive but profitable price.
Track each item’s demand through keyword research and buyers’ reviews.
Remember to calculate potential profits inclusive of shipping costs and eBay fees.
Armed with the right strategies, you can start earning with eBay in no time!
16. Freelance Writing
Did you know your writing passion can become a quick buck-making engine? That’s right, freelance writing is a gold mine you ought to tap.
First, identify a writing niche you love. It’s easier to excel when you’re passionate about your work.
Continually hone your writing skills. The more you practice, the better you become and the more valuable your skills. Finally, don’t be shy to market your skills. Reach out to small businesses and startups—they often need freelance writers.
Remember, quality over quantity will earn you a solid reputation in the long run. Now, go turn those wordy wonders into wealth!
17. Online Surveys
Curious about making a quick buck? Engaging in online surveys can be a fast money-making method just for you!
You don’t earn a huge amount per survey but when taking multiple surveys, it will add up fast.
Here are the top legit survey platforms:
Use your free time wisely. Take surveys during work breaks or leisure hours.
Redeem points for PayPal cash or gift cards.
18. YouTube Channel Building
Building a YouTube channel can be an interesting and rewarding venture.
It provides an incredible platform to share your content, express your creativity, and engage with a global audience. Whether you want to showcase your talents, teach something unique or simply entertain, having a YouTube channel opens up many opportunities.
Effective engagement with your audience is vital.
Last but not least, patience is something you will need in abundance. Building a successful YouTube channel takes time, so don’t lose hope if you’re not seeing immediate results.
Remember, there’s no limit to what you can achieve with your YouTube channel. It all comes down to how creatively you can use this platform to engage with your audience and grow your presence.
19. Bookkeeper
In our increasingly digital age, online bookkeepers are in high demand, with more businesses choosing to move their financial operations to the online platform. This shift in business operations has created a robust opportunity for those trained in bookkeeping to tap into the market and earn income while working from the comfort of their homes.
To be successful as web-based bookkeeper, you need to be well-organized and have previous experience dealing with numbers. However, even without a formal accounting education, individuals can take advantage of online learning platforms like Bookkeepers.com to learn and sharpen their bookkeeping skills for free.
Becoming a virtual bookkeeper is not just a fantastic full-time job opportunity; it’s also an excellent side hustle for women and mothers proficient with numbers. It provides flexible hours and allows the freedom to work from anywhere, making it ideal for those juggling multiple responsibilities.
The financial compensation for an online virtual bookkeeper is quite significant. On average, bookkeepers can earn at least $50000 a year helping business owners manage their finance and bookkeeping online.
20. Start a Dropshipping Store
Dropshipping is a viable option with low startup costs that lets you run an online store without handling any physical products.
There is still plenty of time to get into the dropshipping business.
Start by deciding what products to sell. Find a niche you’re passionate about for a higher chance of success.
Remember, a successful dropshipping venture involves effective marketing as well. So invest time and effort into perfecting your advertising tactics.
21. Do Clerical Work
Clerical work offers flexible, remote opportunities for women to make quick money.
With adequate admin experience and internet access, you can explore roles like Virtual Assistant, Online Data Entry Professional, or Court Transcriptionist.
This is one of the best non phone work from home jobs.
Experts tip: Perfection and punctuality are key. Attention to detail and meeting deadlines can make you stand out.
22. Resell Clothes
Reselling clothes online is a savvy way to turn your clutter into cash, especially if you love digging for hidden gems.
It’s a popular method for fast cash flow, with Poshmark and Facebook Marketplace being perfect platforms. One of my friends is very successful with this!
Begin with your own closet, and sell kids clothes they have outgrown too.
Reinvest your earnings, by buying second-hand clothing to resell can boost your profits.
Don’t forget quality. Run a quick check for authenticity and brand labels.
Visuals sell. Stage items and capture high-res photographs.
Providing a great customer experience is key, ensuring prompt shipping and maintaining politeness.
Play your cards right, you could earn anywhere between $100 to $1,000 a month or even reach a six-figure yearly income.
23. Do Home-Based Child Care
Home-based child care is a viable option to earn money, leveraging the natural maternal instincts and caregiving skills of many women. It can be a lucrative side hustle and a means to financial independence.
This is especially a great avenue to pursue when you are already at home raising your own children.
Make sure to follow any state regulations about running a daycare out of your home.
Begin by determining the number of children you can handle at a time, taking care not to overbook.
24. Podcasting
Podcasting is a wonderful opportunity for delivering narratives. It enables you to weave compelling stories while inspiring, instructing, or simply entertaining your listeners.
The unique format of podcasting lets you connect with your audience on a personal level. They listen to your voice, engage with your thoughts, and feel a stronger connection to you.
By starting a podcast, you are joining an increasingly popular trend, with the global number of podcast listeners has grown to 464.7 million listeners in 2022 (source).
Podcasting also opens up doors for networking and collaboration. You can invite experts, artists, or like-minded individuals as guests on your show, thus expanding your network.
There’s a potential to earn from podcasting. With affiliate marketing, sponsorships, and advertising, the commercial possibilities of podcasting are extensive.
25. Merch by Amazon
“Merch by Amazon” is a print-on-demand service that allows you to design and sell your merchandise.
It’s a great money-making alternative as it offers massive exposure and doesn’t require any upfront costs.
One of the significant advantages of using Merch by Amazon for passive income is that you are not required to maintain inventory or deal with shipping. Amazon handles these aspects, allowing you to focus on the creation process and customer satisfaction.
Amazon’s royalty system ensures that you get paid instantly whenever your merchandise is purchased. This allows you to earn money passively with every sale.
When your designs meet the current market trends and the preferences of your customers, they are more likely to be popular, leading to an increase in sales, hence, higher passive income.
26. Become an Influencer
Becoming an influencer is a smart, quick way for women to make money. While most people just stumble upon becoming an influencer, you can decide to pursue this avenue.
With earning potential that is unlimited, this opportunity is flourishing, requiring no specific degree or job experience.
Remember, platforms like TikTok, Instagram and YouTube reward new, engaging creators.
Dedication and consistency could lead you to major earnings where you make thousands for each post.
27. Work as a Translator
Having mastery in more than one language opens up a world of opportunities, particularly in the realm of translation services. The ability to translate language effectively and accurately is a skill that’s in high demand in the current globalized world.
A top benefit of being a freelance online translator is the flexible work environment. You have the freedom to choose when, where, and how much you want to work. This flexibility for work-life balance is more appealing now than ever, especially in the unsteady job market.
Freelance translators also have access to a wider client base. Unlike full-time translators who work for specific organizations or agencies, freelance translators can work with various clients from all over the world, widening their potential income streams.
The need for translators is projected to grow substantially. In the United States alone, the U.S. Bureau of Labor Statistics reports that employment for interpreters and translators will increase by 20% from 2021 through 2031, which is much faster than the average for all occupations.
Among other freelance professions, translation can often provide a more stable income.
As most sectors including education, legal, business, medical, and technological firms continue to globalize, they regularly need translators to bridge the language gap, making freelance translation services a steady income source.
31. Become a Flipper
Becoming a flipper is a high-return, low-investment way to make money fast. It involves buying low and selling high, perfect for those wanting a profitable side hustle.
Here are actionable steps to kickstart your flipping journey:
Identify items to flip: Popular options include toys, clothes, electronics, books, and furniture. Pro-tip: Sell things you have around your house to start risk free.
Choose a selling platform: Sell locally via Facebook groups or Craigslist, use reselling apps like Decluttr, or open an online store on eBay.
Price it right: Pricing items competitively garners buyer interest and maximizes profit.
Learn more: Free webinars, like Flipper University and the Flea Market Flipper, offer insights for a successful flipping business.
Remember, flipping can be more than just a side hustle; it’s a potential full-time career.
32. Micro-Tasking
Micro-tasking offers a quick way for you to earn money by completing short and simple tasks.
As its popularity grows, so does the list of platforms where you can find micro-jobs. Here are the popular platforms.
This allows your the flexibility to work whenever you want. Plus no special skills or degrees are needed.
Just note… This is not a stable income source
Tips for Finding the Best Way for You to Make Money
As you can see, there are many different ways to make money fast as a woman.
You can find the best way for you by considering your skills, interests, and the amount of time you have available.
Here are some helpful tips to make sure you are earning money quickly.
1. Identify Your Skills and Offerings
You’re already gifted, let’s transform those skills into fast cash.
Make a list of your skills, passions, and expertise; you can tap into anything from programming to knitting.
That is where you want to start.
From personal experience, I can tell you it is way easier to work on a side hustle or business when you are passionate about the topic.
Remember, the digital world is your playground, so play, innovate and cash-in.
2. Research the Best Ways to Make Money
Now, that you know the skills and experience, look at the list above and determine which ones match up.
You will need to spend time watching a free webinar to learn more.
Compare different money-making ideas. From part-time jobs to freelancing, there’s a plethora of options. You need to pick what works best for you.
Remember, generating a consistent income requires effective strategies and the right mindset. So choose wisely!
3. Try Different Ways to Make Money – Not Just 9-5 Jobs
It’s vital to explore different money-making strategies as a woman for financial stability and independence.
Just because one avenue didn’t work out doesn’t mean you should throw in the towel.
Remember, the key to success is perseverance, so pick something you’re passionate about and stick to it. Try not to jump from one idea to another out of impatience; success takes time.
Also, as your revenue increases, start building a lifestyle business for passive income.
4. Focus on the Things You Are Good at
Unlock your financial potential by recognizing and utilizing things you’re excellent at.
To cash in fast:
Identify your standout skills. These could range from writing, fine arts, math, e-commerce to digital marketing or even passions such as sports and hobbies.
Assess the viability of earning via your skills. Research shows that the digital economy is filled with opportunities.
Exploit platforms that cater to your expertise. For freelance gigs, you can try platforms like Upwork, Fiverr, or Guru.
There are so many ways to make money online as a beginner. So, indulge in the digital playground, embrace exploration and innovation, and let your skills earn for you.
5. Find Opportunities That Allow You to Work Flexibly
You can choose when to work and when not to, rather than being constrained by a 9 to 5 workday. The flexibility to create your schedule means you can operate at your most productive times, whether that’s early in the morning or late at night.
Working from home or any location across the globe enables a better work-life balance, reducing stress and improving productivity. This is particularly beneficial for those who have families or are committed to other obligations.
When working for yourself, you may have the potential to earn more than traditional salaried roles.
Lastly, making a living from your passion is huge!
You are being paid to do what you love anywhere, anytime which is rare and precious.
6. Consider Specializing in a Niche Subject
Specializing in a niche subject can elevate your earning potential quickly, owing to smaller competition and a personalized audience.
Being a subject matter expert in a specific area can provide you with an edge over your competitors.
Specializing in a niche can help you stand out and garner a dedicated audience, ultimately leading to faster earnings.
Remember, the key to making money faster in your specialized area is persistence and patience. It may take time to build a strong following, but once you do, the financial rewards can be substantial.
Stick to your chosen area, continuously learn and improve, and consistently deliver high-quality content to make your mark in your chosen niche.
7. Take Advantage of Trending Opportunities
Jumping on trending opportunities can be a gold mine, especially for women who want to make money fast from home. These ever-evolving trends tap into various skill sets, interests, and experiences, potentially translating into a lucrative gig.
For many, it may have been TikTok when the company first started.
Remember, the digital world holds limitless potential. Just needing to innovate and execute your ideas!
8. Invest in the Right Tools and Equipment
The key to making money, either online or offline, is making an informed investment of your time into the right tools, equipment, and learning resources.
While this can initially seem like an expenditure rather than a money-making step, it is, in fact, a cornerstone of your financial growth strategy.
Investing time in learning and increasing your knowledge base is vital. This could mean spending your time reading about new insights in your area of work, attending webinars, or enrolling in online courses. The ROI of this proactive learning is immense.
Consider this an opportunity or a catalyst that speeds up your journey toward substantial income generation and financial freedom.
9. Commit to Consistent Efforts
Commitment to consistent efforts is the cornerstone of any successful endeavor, more so when running your own side hustle.
One of the fundamental principles for making money is the dedication to keep improving your craft, always learning, and always evolving.
This continual effort involves a long-term commitment to staying updated with the latest writing trends, styles, and industry standards.
With persistence and patience, the fruition of your investments will lead you toward the fulfillment of your financial dreams.
10. Utilize Social Media Platforms to Promote Your Business
Social media platforms are powerful tools for business promotion, and when used strategically, they can lead to fast monetary gains.
Understanding how to effectively utilize these platforms can drastically enhance your chances of making quick bucks.
Start by creating a robust online presence for your business on various social media platforms. Remember, consistency is key to building your brand.
Engage with your audience frequently and respond to their comments. This boosts engagement on your posts.
Post content that is engaging, relevant, and aligns with your business values.
Always monitor your performance using social media analytics to understand what works best for your audience.
Which side hustles for women have you tried?
Personally, here are the side hustles I have done or currently do:
Stock Trading as a swing trader
Online Content Creation
Social Media Influencer
Online Consulting
Pet Sitting or House Sitting
Teaching Dance Lessons
Personal Organizer
However, I know many people that have tried the ones listed above.
So ladies, which of these enticing hustles appeals to your skills and schedule the most?
FAQ
Stay-at-home moms have numerous opportunities to earn money from the comfort of their homes. Plus being able to bump up your household income while juggling parenthood is the perfect combination.
Find the best jobs for moms specifically!
Any of these opportunities requires dedication and consistent effort, but with time they can all yield substantial returns.
Thankfully, there are many ways for women to make money online.
Above we covered all of the interesting ways and many are online.
Remember, opt for an avenue that suits your skills, interests, and time availability.
Well. the answer to this will depend on who you speak with.
Personally, I find ways to build passive income with your side hustle as the best option. Then you aren’t trading your time for money.
As a woman, many opportunities are right at your fingertips. The most popular and profitable include:
Start a blog: With consistent readership, you can make thousands from ad revenue and sponsored content.
Virtual assistant: Services can fetch around $10-30/hour.
Social Media Management: Businesses are willing to pay up to $1000-2000 per month for proficient managers.
Bookkeeping: On average, freelance bookkeepers earn around $34/hour.
Selling products online: Sites like Etsy, Amazon FBA, or your own platform can earn you a substantial income with a successful shop.
Trading Stocks or Options: by improving your investing knowledge, you can quickly increase your net worth.
Remember – it all starts with a step. Your side hustle could turn into a full-time passion!
This is How to Make Money from Home as a Woman
In conclusion, as a woman, there are plenty of genius and fast ways for you to make money.
The article underlines the significance of grabbing the reins of your financial future.
Through the strategies shared – including investing in stocks, working from home, or using budgeting hacks, you can boost your income significantly.
One of the concepts, I’m big on is making sure you know how to make your money work for you.
With wise decisions and being open to possibilities, your financial independence is within reach.
Remember – the ball is in your court, so make sure to take that shot and score your financial goals. It’s high time to cash in on your potential!
Know someone else that needs this, too? Then, please share!!
This article originally appeared on The Financially Independent Millennial and was republished with permission.
The views and opinions expressed in this article are those of the author only and are not endorsed by Credit.com.
Investors nearing retirement have different needs than investors with many years remaining in the workforce. Retiring means losing the regular paycheck from work, and as a result, replacing that income is a key consideration. There are many investments that appeal to retirement investors, such as purchasing quality dividend stocks like the Dividend Aristocrats. But there are also many investments that retirement investors should stay away from. Retirement investors should avoid the following 16 investments.
#1: Cash
“Cash is king” is a well-known phrase, but when it comes to retirement investing, cash is hardly king. Cash should be avoided by retirement investors because it earns no return. In stark contrast to bonds which pay interest or stocks that pay dividends, cash earns no interest. As a result, cash loses value over time due to the steady erosion of inflation.
While retirees have a number of pressing challenges to pay for expenses without a paycheck from working, keeping a great deal of cash on the sidelines is not the best idea. Ideally, retirees can generate enough income from their investments, in combination with other sources of income such as Social Security so that they do not need to hold a large amount in cash.
Read more: How to Sell Covered Calls for Monthly Income
#2: High-Yield Bonds
Sometimes referred to as junk bonds, high yield bonds are fixed income securities issued by companies with sub-investment grade credit ratings.
With interest rates still near historic lows, fixed-income yields have plunged over the past several years. As an example, the 10-year Treasury yields just 1.3% right now. With inflation running significantly above this level, retirees will see their purchasing power erode with low-yielding bonds.
Because of this, high yield bonds are appealing due to their higher yields. But investors may be reaching for significantly elevated risk in their search for yield. Bonds with below-investment grade credit ratings have a higher likelihood of default.
Read more: Can You Retire at 62 With 300k?
#3: Cryptocurrencies
Cryptocurrencies like bitcoin are all the rage these days. The massive rise in the value of bitcoin and other cryptocurrencies over the past few years is enticing for any investor. And cryptocurrency gets a lot of coverage in the financial media.
But retirees need to remember that volatility is a two-way street. The price of bitcoin has declined by nearly 50% from its 52-week high, a reminder that any investment can lose value. Bitcoin also does not pay interest or dividends, meaning investors will not generate income from their investment. And another reason retirees should avoid Bitcoin is simply the higher level of risk involved in buying cryptocurrencies, not to mention the tax implications.
#4: Oil & Gas Royalty Trusts
Oil and gas royalty trusts are niche securities within the stock market. These are companies that own oil and gas-producing properties. Investors receive distributions depending on how much income the trusts generate from these properties. Some well-known oil and gas royalty trusts include BP Prudhoe Bay Royalty Trust (BPH) and Permian Basin Royalty Trust (PBT).
As with any group, not all royalty trusts are bad investments. But the risks are high across the board—royalty trusts are essentially a bet on underlying commodity prices. Investors also have to face the prospect that reserves will decline faster than the trust had originally anticipated.
If oil and gas prices fall, share prices of the royalty trusts collapse, and their distributions decline, often to zero as occurred in 2020 during the coronavirus pandemic.
#5: Mortgage REITs
Real Estate Investment Trusts, also referred to as REITs, are a great way for retirees to earn higher levels of investment income. Many REITs have strong yields of 4% or more. Retirees might be tempted to buy mortgage REITs, a subset of the asset class that typically offers even higher yields.
Indeed, many REITs have double-digit yields in excess of 10%. But in many cases, sky-high yields are an indication of elevated risks, and mortgage REITs are no different. Mortgage REITs are extremely complex, financially architected business models that are not easy to understand, making them relatively poor choices for most retirees. In addition, mortgage REIT share prices and their dividend payouts can swing wildly based on changes in the yield curve.
Read more: Diversify Your Portfolio With These Top 10 International ETFs
#6: Gold
Every few years or so, gold gets a lot of attention in the media, usually because the price of gold has risen over a certain period of time. But for retirees interested in generating sustainable income from their investments, gold should be avoided.
Gold pays no dividends or interest, which is why it is not attractive for many retirees. To quote legendary investor Warren Buffett on gold: “The idea of digging something up out of the ground, in South Africa or someplace and then transporting it to the United States and putting it into the ground, in the Federal Reserve of New York, does not strike me as a terrific asset.”
Some gold stocks like Barrick Gold (GOLD) do pay dividends, but their dividend track records are highly inconsistent. Many gold stocks have cut their dividends when precious metals prices decline.
#7: Momentum Stocks
Momentum stocks are those that have captured investors’ attention, most often due to a rapid rise in their share price. This causes other investors to jump in, perhaps because of a fear of missing out, which can push share prices even higher. But in many cases, momentum stocks fall back down to Earth, as their underlying fundamentals may not justify the rallying share price.
Momentum stocks that have gotten a lot of attention in the financial media in recent months include GameStop (GME), AMC (AMC), and more. In all cases, their share prices skyrocketed in a relatively short period of time. But retirees should resist the urge to buy momentum stocks, as they can be highly volatile and almost never pay dividends.
Read more: 15 Dividend Kings With 50+ Years Of Dividend Growth
#8: Microcap Stocks
Stocks can be classified according to their market capitalizations, which is simply the current share price multiplied by the number of shares outstanding. Large-cap stocks have market caps above $10 billion, while small-cap stocks have market caps below $2 billion, with midcaps in between these ranges.
The smallest group of stocks is known as microcaps. These are stocks with market caps below $100 million. Microcaps are very small businesses, their stocks generally have low liquidity, and many are in questionable financial condition. As a result, retirees should stick to midcaps and large caps.
#9: Stocks With Too Much Debt
Debt is a big concern for income investors such as retirees. Stocks with bloated balance sheets and too much debt are at high risk of cutting or suspending their dividends during recessions. Profits may decline substantially when the economy enters a downturn, but debt still needs to be repaid.
Stocks with excessive debt have high-interest expenses that may force them to cut their dividends. This is of particular concern when it comes to high-yield Master Limited Partnerships, many of which have leverage ratios above 5x.
Therefore, retirees could generate dividend income with other tech stocks like Apple (AAPL), Microsoft (MSFT) or Cisco (CSCO).
If you own rental properties, you have come to learn that time is one of your most precious assets. We all have a lot on our plates, but especially those in property management who oversee multiple properties. Daily tasks can quickly become overwhelming, taking you away from larger business priorities.
As a real estate investor myself, I have experienced this first-hand. My biggest limitation is the time that I have available, so I have found that getting every reasonable task off my plate is one of the most important things to do in order to succeed. Once you are behind on your tasks, all you can think about is how you’re going to catch up, so automating those tasks or finding other ways to outsource them, is the first step toward real expansion and growth.
As most property managers and real estate investors know, the work never ends, so getting through it in the most efficient way possible is critical for success. If you aren’t ahead of the game, you can get buried to the point that you are actually hurting yourself, and your business.
To alleviate the pressure, I recommend automating as many aspects of your business as possible. It can save you time and money, and put you on the road to achieving your long-term goals. Here are some surefire ways to successfully automate your real estate property management business.
Embrace Digital Marketing
Traditional marketing methods to find tenants have gone the way of the wooly mammoth; if you aren’t embracing digital marketing, you’re leaving time and money on the table. Social media, email marketing, and online listings can all effectively reach potential tenants. There are a huge number of quality listing services out there, such as Zillow, Rent.com and many others. Listing your property on these sites can definitely garner some attention, but painstakingly copying and pasting the listing site-by-site is not a good use of time. Find a software that will syndicate the listing for you, sending it out instantly to all the top sites from one central location.
Leverage ChatGPT
Speaking of listings, consider utilizing ChatGPT. It can streamline a number of tasks that typically eat up time in your day. For example, you can use it to write property descriptions, newsletter content, tenant emails, blog posts and more, which gives you more time to focus on strategic initiatives. Open AI, the company behind GPT and ChatGPT, has solutions for you to integrate AI Technology directly into your software, which is what we did at Rentec Direct. Our AI Listing Generator allows clients to generate an enticing property description in a matter of seconds, which typically takes between 10 to 30 minutes.
Offer Virtual Tours
Your AI-created listing generated interest among prospective tenants, now consider how to save time in terms of property showings. Virtual tours are the answer. They have become a valuable tool for property managers. Eliminating the need to be on site to show a vacant property will save you loads of time and give the potential renters all the time they need to peruse the space for as long as they want. Make sure to add as many frequently asked questions to your virtual tour to eliminate the need for a lengthy follow-up meeting.
Invest in Property Management Software
Investing in property management software is one of the best decisions you can make for your business. The right software can help automate many tasks, such as rent collection, maintenance requests, and lease renewals. You can even automate the marketing of vacant properties and syndicate across multiple rental sites with one simple click. A property management software platform can be your ticket back to a healthy work-life balance and take more time-consuming daily tasks off your plate.
Offer Online Rent Payments
Using a check to pay rent – or anything else for that matter – is antiquated. It’s a massive waste of time, and with the expectations and busyness of today’s modern world, it just doesn’t make sense. No one wants to go through the steps of writing, mailing and sending a check through the mail, especially when there are ways to quickly and securely pay online.
Implementing online rent payment can save you and your tenants time and headaches. Not only does it make the rent collection process more efficient, but it also eliminates the need for manual record-keeping. If you are considering implementing a software platform to help automate your business, find one that has online rent payment functionality built-in. Data shows that renters are more likely to pay on time when the rent is automatically withdrawn through an online payment system too. It’s a win-win for everyone.
Use Maintenance Request Software
Handling maintenance requests can be one of the most time-consuming aspects of property management. If it’s not a broken sink, it’s an issue with the air conditioning. These can pile up and easily be forgotten, leading to annoyed tenants and adding to your stress.
Maintenance request software can automate this process, allowing tenants to submit requests online and track their progress. When all requests come to one place, knocking them out promptly is much easier. Plus, the right system will keep records for you – something that’s important come tax time.
Automate Lease Renewals
Managing lease renewals can be a pain, but automating this process can save you time and ensure you don’t miss any critical deadlines. Property management software can automate the lease renewal process, automatically sending out reminders to tenants and generating new lease agreements. The minutiae of the business no longer need to be your primary concern when you understand how to use all of the technology at your disposal.
Not taking advantage of all the ways to automate your business is only making things more complex and putting maximum strain on you. There are many ways to streamline your daily workflow, but in my own experience, automating with the right systems and technology has delivered the largest return-on-investment for me. Your business is unique, so dig deep and find the pain points you can eliminate through thoughtful automation. Nothing can replace the peace of mind that comes with having more time for yourself and your loved ones.
The four-day workweek is the latest buzzy workplace trend, with experiments and surveys touting improved employee morale, retention and productivity.
In one study of 41 businesses across the U.S. and Canada — the majority with 25 or fewer employees — 40% of employees surveyed said they were less stressed after trying out a shorter workweek. In addition, 60% of employees reported a better work-life balance and 32% said they were less likely to quit, according to a July 2023 report by 4 Day Week Global, a nonprofit that promotes shorter workweeks.
ThredUp has seen this play out in-house over the past two years. The online clothing reseller shifted to a four-day week for corporate employees in 2021. Voluntary turnover among that group dropped 55% compared with 2019, and hiring got a boost. Most new hires cited the company’s shorter week as a deciding factor in employment, Natalie Breece, chief people and diversity officer at ThredUp, said by email.
Can a shorter workweek do the same for your business? The short answer: It depends.
“You can’t implement something like this if the underlying culture doesn’t support and nurture trust in your employees,” says Janet Lenaghan, dean of the Frank G. Zarb School of Business at Hofstra University.
For a four-day workweek to work, you need a culture that empowers employees and values results rather than face time, she says.
Planning, training and execution are also key for a successful transition to a shorter workweek.
Adjust priorities, offer training
Asking employees to squeeze five work days into four doesn’t come without adjustments.
Business leaders must assess workload, objectives and success metrics. They also need to invest in tools to streamline or automate tasks, such as accounting reports or other administrative responsibilities, so employees can better prioritize their time. Lenaghan advises leaders to “focus on tasks that drive bottom-line results.”
Large-scale pilots by 4 Day Week Global, which have taken place globally, include two months of workshops, coaching and mentoring. Companies that participate in trial runs also get ongoing support.
Before ThredUp initiated its four-day workweek, it held training sessions on topics such as “how to lead an efficient meeting, when to cancel or remove yourself from meetings, and how to efficiently communicate with employees,” Breece said.
Managers and owners must also be encouraging and set a good example, which involves refraining from sending emails or expecting employees to work on days off.
Start with a test run
A pilot program is a lower-stakes way to try out a shorter workweek and work out any kinks before making it a permanent policy.
Poll Everywhere, a technology company that develops live survey and feedback tools, dipped its toe into a shorter workweek by implementing “Summer Fridays” in 2022. The eight-week trial had bumps, including company holidays that squeezed the already shorter weeks into three days.
“Some of the problems we saw with execution and missed deadlines might have had as much to do with how the logistics were set up as with the idea of working four days a week,” says Rob Graham, CEO of Poll Everywhere.
The company revived “Summer Fridays” in 2023 with some tweaks and additional training based on employee feedback and data analysis.
“We restructured the schedule so that holidays are now considered the designated day off for that particular week,” Graham says. Managers also received special training to help improve communication and efficiency despite fewer meetings.
Tailor it to your company
Some companies can operate Monday through Thursday without impacting customers or the business. Others need some level of staffing five-to-seven days a week.
Poll Everywhere opted for a staggered schedule for specific teams, where some employees had Friday off while others chose a different day.
At ThredUp, its 273 corporate salaried employees work Monday through Thursday. In contrast, employees in the clothing reseller’s distribution centers work from three to five days a week, depending on their shift.
Expect bumps in the road
No significant business change is without its challenges. Try to anticipate these and be proactive in finding solutions when possible. And recognize that some bumps may just be the new cost of doing business.
Busy times, such as the push to finish a big project or wrapping up end-of-quarter financial reporting, will always be hectic. And it takes some effort to get back into work mode after a long weekend, Breece said.
“But these challenges aren’t unique to a four-day work week,” she said.
In recent years, the largely exclusive world of investing has been blown wide open by the rise of fintech platforms. These support brand new ways for retail investors to participate in the buying and selling of stocks on global markets. Accelerated by the conditions presented by the Covid-19 pandemic, the retail investor boom has been supported by the emergence of passive trading.
The accessibility of Wall Street today may be hard to fathom. This is especially true when looking back a little more than a decade to the costs and hurdles that retail investors had to overcome to simply buy their favorite stocks. As recently as 2009, brokerages were charging anywhere from $9.99 to $19.95 per transaction for the buying and selling of stocks online.
‘Zero-commission’ trading was one of the early revolutionary changes brought by emerging fintech firms as more investing platforms like Robinhood began to enter the market in the months prior to the Covid-19 pandemic.
Although controversial, zero-commission trading generally works on a payment-for-order-flow (PFOF) model. Brokerages receive payments from market makers in return for the flow of customer stock purchases and sales being run exclusively through their firm. This enables investment platforms to make their money without customers having to cough up directly. However, it also means that chosen market makers may not be required to charge the most competitive price for stocks.
As the Covid-19 pandemic heavily impacted the lives of individuals all around the world, the implementation of lockdown measures coupled with the arrival of government stimulus packages saw more retail investors taking to the stock market in a bid to buy into recovering stocks. The data above shows that investors had been quick to take on technology stocks, with a net investment flow of $40 billion arriving in the sector by early 2022.
Investors are now having to adapt to the age of the ‘new normal’ today. This means that there may be less time available to conduct the required research to discover new prospects, fintechs are actively working to take initiative in making key investing decisions for customers.
Thanks largely to the rise of fintech, it’s never been easier, or more cost-effective, to invest passively. In some cases, it’s not even necessary to make any investment decisions whatsoever. Let’s take a deeper look at how fintechs have turned retail investing passive.
The Rise of the Robo-Advisor
The past decade has belonged to the robo-advisor. Built on a foundation of artificial intelligence, these automated investment services are generally low-cost, and it’s extremely easy for users to get started with very little money. Many platforms even offer spare change ‘roundup’ investment options.
Robo-advisors have enjoyed a rise in popularity that’s been strong even in the years prior to the Covid-19 pandemic. Between 2017 and 2019, the volume of money under management through robo-advisors tripled from around $240 billion to $980 billion, according to Statista data. Furthermore, the industry has been forecast to reach a value of $2 trillion by the end of 2022.
The beauty of this automated approach to investments is that it enables fintech platforms to do all of the work, in a very literal sense. Roundup platforms like Moneybox has become renowned for its approach to spare change investing, whereby users specify the amount of money they wish to invest each month, whether they would like to have their spare change from bank card purchases automatically rounded up and invested, and the level of risk they would like to take on through their ISAs, and the app will take care of the rest.
This enables users to build a sizable nest egg for their specific goals without having to do anything at all – besides occasionally logging into their account to refresh their bank card permissions.
Passive Portfolios via Copy Trading
Although copy trading is nothing new, fintech platforms have helped to make them far more accessible and customizable to boot.
Whilst many stock trading platforms now offer some form of copy trading capabilities, the leading brokerage to offer the feature is eToro.
Through eToro, it’s possible for traders to view the platform’s leading traders over a given period of time, and choose their favorites to essentially trace, trade by trade.
All trades are proportional to the amount of money that a user is willing to invest, and in eToro’s case, it’s possible to copy up to 100 traders at a time – provided a minimum of $200 is invested per trader.
Furthermore, it’s also possible to copy stop losses when trading to ensure that there’s some form of protection against portfolios suffering a downturn.
There’s sufficient evidence that copy trading can work as an option for investors who may lack the time necessary to make informed market decisions. According to eToro’s statistics, the platform’s 50 most copied traders made an average yearly profit of 30.4% in 2021.
Although the Covid-19 pandemic has subsided to the extent where many of the retail investors of 2020 have found that their free time has become more limited, the rise of passive investing has ensured that nobody needs to slow their trading activity. With fintech platforms offering a varied range of passive investment options, it’s possible to maintain a strong portfolio long into the future.
Inside: Are you struggling to manage your money? Feeling overwhelmed with debt? If so, it’s time to take action and build better habits. This guide will teach you how to create a budget and start your savings. You need these financial tips for young adults.
The importance of sound financial advice for young adults cannot be overstated.
Often, a lacuna exists in our educational system where personal finance is concerned, leaving many young adults ill-equipped for the financial decisions that await them in their adult life.
Yet, you will encounter situations that require a sound understanding of budgeting, credit usage, investment, and an array of other financial tools without any formal education in these areas.
Financial advice can act as a compass, guiding you on a path to financial health and stability.
This early orientation can help you avoid the pitfalls of needless debt accumulation, poor money management, and inefficient financial choices like I made.
That is why it is of utmost importance to start imparting knowledge and financial habits to young adults as early as possible.
Why Financial Advice is Crucial for Young Adults
Money matters! Especially when you’re young and there’s a world of financial responsibilities unveiled before you.
Understanding financial basics early on is key to smart monetary decisions in the future. Here’s why you should consider this vital:
Knowledge Burst: Understanding finance terms, the implications, and their impacts arm you with knowledge for future decisions.
Saving for Later: Early investment in savings accounts or retirement funds can maximize your funds later in life.
Debts Control: Ensuring debts are paid off faster helps avoid excessive interest in the long run.
Investment: Stock or mutual fund investment can multiply your savings in the right condition.
Remember, your financial health requires deliberate action, start early!
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What is the best saving advice for young adults?
The best saving advice for young adults is to start early and save regularly.
This will help you build up a nest egg that you can use in the future.
Personally, this is my own regret as such it took me way too long to become financially sound.
Also, you want to be mindful of your spending and live within your means.
Best Financial Advice for Young Adults
When you’re in your 20s, the world feels like your oyster, ripe with opportunities and potential.
But among this plethora of choices, the most important decisions you make may very well relate to your finances.
While the excitement of earning and spending your hard-earned money can be exhilarating, it is crucial to remember that wise financial decisions made early on can set the stage for long-term financial success.
We have curated some of the best financial advice to help you make informed decisions and set the foundation for a secure financial future.
1. Create a Budget
Creating a budget can seem like a daunting task. However, once correctly accomplished, it can undeniably make your life a lot easier.
Below are some reasons to start budgeting from the start:
Money management: Knowing the ins and outs of your financial transactions helps manage your money efficiently. A budget gives you a clear snapshot of your income and expenses, allowing you to make strategic decisions about spending and saving. This level of control can be incredibly liberating and reassuring.
Financial discipline: Creating a budget encourages discipline when it comes to financial decisions. It can show you areas where you’re spending more than necessary, such as an underutilized gym membership, frequent dining out, or an unused streaming subscription. By addressing these expenses, you could easily save an additional $100 per month.
Alignment with goals: A budget can provide clarity and align your financial actions with your long-term goals. If you are side-tracked and lose sight of these ambitions, the budget serves as a potent reminder to guide you back to the right path.
Effective savings: A budget constitutes a robust tool that allows you to maximize your income and inculcate a savings habit. Essentially, it’s a roadmap that shows you, in real time, where you can minimize and direct those funds into savings. Those savings can then be invested toward achieving significant life goals more efficiently.
Stress reduction: Tracking income and expenditure can culminate in a stress-free financial life. For example, it helps manage unexpected emergencies or allows you to enjoy after-office drinks without any worries about overspending.
To simplify the job, various user-friendly budgeting apps are available.
These digital budgeting tools or apps offer handy features that can streamline tracking expenses and income. These tools can automatically categorize transactions, display visual charts of spending, and send alerts when you’re nearing the limit of a budget category.
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Start Your Free Trial.
So, no more wondering where your money went.
With a budget in place, you get to tell your money exactly where to go, and this is an empowering shift from feeling out of control to feeling in control of your finances.
By making budgeting a consistent part of your financial routine, you adopt a proactive approach to your money, making your life easier, and your future brighter.
2. Manage Your Debt
As a young adult, managing your debt is incredibly crucial. Not only does it set the foundation for your financial future, but it also helps to keep your credit score healthy.
Here are some top-notch expert tips on how to effectively manage your debts:
Avoid credit cards whenever possible. Although credit card rewards may seem appealing, they can often lead to unwanted debts. Instead, try using cash, debit cards, or cash app cards.
Don’t finance purchases that depreciate in value over time. Rather than taking a loan for things like cars or other depreciable assets, save up and pay in full.
Minimize education-related costs. This can be achieved by going to in-state schools, considering trade school or community college, living off-campus, and exploring scholarships or work/study programs. Learn how to pay for college without loans.
Pay off your debts methodically. Consider strategies like the debt snowball or avalanche methods to strategically pay off your debts. Use a debt payoff app to find your debt free date.
Remember, being in debt can delay your financial goals.
So, learning to manage your debts early on in your life can have a significant impact on your future finances.
3. Invest Wisely
Investing wisely is a cornerstone of solid financial advice for young adults. It sets the foundation for a financially secure future.
Most people are terrified of the concept of investing and stay away from it, which is the worst decision possible.
Investing is about putting your money to work for you, expecting growth or income over time.
Consistently adding money to your investment portfolio can be more beneficial than staying away or trying to time the market.
Investing is ideally a long-term endeavor. Patience is key – you can’t expect to make big gains or reach your financial goals overnight. It’s a process of steady growth.
Simplicity is key for beginner investors. Buying and holding index funds is a good example of a simple and passive investment strategy. Or you can learn how to invest in stocks for beginners.
4. Educate Yourself about Savings and Investment Accounts
Understanding savings is a fundamental aspect of personal finance, yet many young adults ignore this.
Beginning an emergency fund, no matter how small is one of the oft-repeated mantras of personal finance experts.
Consistently making savings a non-negotiable monthly “expense” not only provides a safety net for emergencies but also contributes to various future goals such as retirement, vacation, or a down payment on a home.
A foundational aspect of mastering your finances involves learning self-control, reducing the tendency to make every purchase on credit, and understanding the importance of saving money before making a purchase.
Taking the initiative to read personal finance books and gain knowledge about managing money can greatly aid in controlling your financial future and making informed decisions about savings.
Starting saving for retirement early is essential to secure financial stability in the future.
Learn how much money should I have saved by 25.
5. Limit Your Expenses
Understanding how to limit expenses can be a game changer for your finances.
Track your daily expenses carefully, even the small ones like your morning coffee, as they can add up and provide crucial insights into your spending habits.
Keep your monthly costs, such as rent, as low as feasibly possible, as this will save you substantial amounts over time and accelerate your ability to invest in assets like a home. Learn the ideal household budget percentages.
This one makes the biggest different to spend less money…Categorize your expenses and set specific spending limits for each group, reviewing and adjusting these as needed to curb any overspending.
Regularly review your finances, specifically your bank and credit card statements, every two to three months to identify and eliminate any unnecessary expenditures.
6. Build Passive Income Streams
Okay, this one is my top financial tip!
Navigating the financial world requires strategy, and for young adults, generating passion income streams is a game-changer. With the decline of traditional 9-5 jobs, it’s crucial to adopt flexible financial strategies.
Start identifying your passions that can be monetized. Think about your hobbies, skills, or areas in which you’re an expert. It could be anything from blogging to tutoring or even food delivery services.
Find ways to make passive income. Remember, every bit of extra income counts, and data suggests diversifying income streams can secure your financial future.
Continuous learning is your power tool here. Aim to broaden your financial literacy, understand investing, explore various earning methods, and strengthen your entrepreneurial spirit.
While cutting expenses helps, growing your income using your passions gives you control over your financial destiny.
So, don’t hesitate in doubling up your day job with your passion-driven side hustles.
Expert tip: One of the best ways to make money online for beginners is a key place to start.
7. Create a Cash Reserve
Understand that surprise expenses can unsettle your financial plan, like a sudden car repair costing $700. Having a cash reserve will keep you financially stable through these unexpected turns.
Start an emergency fund: Alongside your regular savings, begin an emergency fund. Aim to save around three to six months’ worth of income.
Prioritize savings: Consider your savings as a non-negotiable expense. You’ll soon realize you’ve saved enough for significant objectives like a down payment on a home.
Build a rainy day fund: This larger $10k-50k rainy day account will help in those long-term expenses or job loss.
Combat inflation: Choose a money market account to preserve the value of your savings, while ensuring quick accessibility in emergencies.
Automation is key: If you’re forgetful, set up an automatic transfer that channels funds to your savings account immediately upon salary credit.
Building up cash reverses will help you to improve your liquid net worth and have less stress around money.
8. Learn About Taxes
Taxes seem complicated, huh? Well, not grasping tax basics can give you a run for your cash. So, get started young and you might save up a fortune in the long run
Start by understanding your salary. The chunk that you take home (net pay) isn’t the whole amount (gross pay) that your employer agreed on. Learn more about gross pay vs net pay.
If you’re self-employed, remember, you’ve got to handle income taxes, and also the full FICA bundle.
Do your bit of math now and avoid an unexpected cringer next April.
9. Consider a Term Life Insurance Policy
Getting a term life insurance policy while still relatively young is a smart financial move that any savvy young adult should consider early in their career.
This safety net serves multiple purposes, especially in ensuring the protection of your future family if for any reason you’re unable to provide for them.
Term life insurance policies are typically far more affordable for young adults. The research notably reveals that the younger an individual is, the more affordable the life insurance policy tends to be. Therefore, beginning this investment in your early years enables you to lock in a lower premium rate, thereby saving significant amounts in the long run.
A life insurance policy is an important piece of your financial planning puzzle. Remember, cost increases with age so act fast!
10. Take Action and Stay With It
Taking action and sticking with it is crucial in managing finances well.
First, you’ve got to get clear about your financial goals. Want to set up a passive income stream or travel? Make them specific, feasible, and measurable.
Once you’ve set your goals, break them down into bite-size pieces. For instance, calculate the costs and set quarterly goals. Make sure to these vision board supplies to keep your goals front and center.
Ultimately, this proactive approach coupled with persistence can help you efficiently manage your funds and stay financially healthy.
FAQ
Honestly, this is completely up to you.
The better bet would be to learn about financial management topics yourself.
Finding a fee-based financial advisor will be difficult when you have no significant assets. And then, when you do, a financial advisor can put a drag on your investing portfolio.
If you decide to work with a financial advisor, find a fee-only financial planner who provides unbiased advice – since they aren’t driven by commission.
Financial planning while young—especially in your 20s—is key to future success and financial security. Here are some steps to establish strong fiscal habits:
Firstly, map out your financial goals. Do you anticipate student loans, a mortgage, or potential investments?
Secondly, budget diligently to save more money early in your career.
Next, consider eliminating outstanding debt quicker by applying saved money from part-time or full-time employment.
Lastly, explore investments such as mutual funds and stocks for optimal use of leftover money after bills are paid.
Remember, according to a study of 30,000 college graduates, 70% never took a personal finance course—making self-education critical.
Use These Personal Financial Tips for Young Adults
In conclusion, managing personal finances is a vital skill that unfortunately is not emphasized enough in our educational institutions.
It’s critical for young adults – you – to learn this skill to establish a strong financial foundation for their future. Especially if you are determined to become financially independent.
This begins by developing a sense of self-control and understanding the importance of delayed gratification.
Regularly monitoring your income and expenses, and adjusting your lifestyle to live within your means, is a crucial habit.
Additionally, the importance of starting an emergency fund and saving for retirement cannot be overstated.
By incorporating these financial tips into their lives, young adults can steer clear of unnecessary financial stress and ensure a secure and financially healthy future.
Take this Advice about Money
It is crucial to understand not just the mechanics of money, but also, the long-term implications of your financial decisions.
Take control of your financial future today, and you are sure to reap the rewards in the years to come.
Discerning financial advice from trusted sources, instead of relying on potentially misleading external influences, is also key. Remember, the sooner you start, the better off you’ll be in the long run.
Remember the data-driven fact: small changes in your everyday expenses can have as big of an impact on your finances as getting a raise.
Know someone else that needs this, too? Then, please share!!