Unless your last name is Rockefeller, Hilton, or Walton (as in Sam Walton, founder of Wal-Mart — four of the seven richest Americans are Sam’s heirs) chances are you had to work for the money you have. If you’re not yet retired, you still have years of that work ahead of you. And you retirees aren’t completely off the hook, either: Houses and cars need to be repaired, meals need to be cooked, and taxes need to be filed. If you don’t do these things yourself, you’ll have to pay someone else to do them.
Your ability to turn your labor into a paycheck — or to do things yourself, so you don’t have to fund someone else’s paycheck — is your “human capital.” This combination of knowledge, experience, talents, work habits, and social skills is perhaps your most important income-producing asset (as I wrote in January).
I’ve been thinking a lot about “enhancing human capital” over the past couple of years, especially as we’ve entered the toughest employment environment since the early 1980s. Few people can take their jobs for granted. Too much can change: the economy, technology, competition, even health (affecting one’s ability to do a job — approximately one-quarter of retirees stopped working due to health problems).
Then there’s the question of how to grow your net worth these days. Cash and bonds are at decades-low yields, and we all know now that the stock market doesn’t always go up. Thus, the asset we have the most control over is the one we take a shower with (assuming you do it alone, at least some of the time). A great career can result in a great retirement, because a higher income allows for more savings and retirement benefits.
But let’s face it: Earning a higher paycheck isn’t easy these days, so it takes deliberate planning, extra work, and perhaps bringing a higher-up into the shower. Since I’m not a human resources expert, I asked one of my Foolish colleagues — Angelique Keenley, Vice President of HR at The Motley Fool — for suggestions. She passed along these 11 ways to improve your income-producing capacity.
Keep acquiring degrees and certifications. We can increase our human capital throughout our lives by getting more education and professional certifications and by doing other things that enhance our résumés. Which skills, professional designations, or degrees could you acquire that would make you more valuable? (Don’t spend your time or money on just any old degree — get one that counts in your current or desired industry.)
Join professional organizations and build a strong network. Higher-level positions are almost always filled by “someone who knew someone,” not by a stranger applying for a job opening.
Continue to seek out excellence in your field. We at The Motley Fool call it “deliberate study,” and you don’t attain it by just showing up and doing your job every day. Spend time reading blogs, attending conferences, and talking to others in your field who are smarter than you.
Network inside your company. Don’t pass up opportunities to have lunch with the CEO or other senior leadership. As well as making important friends, you’ll learn things about the business that will make you more valuable — and help further your career.
Get (or become) a mentor. Seek out someone you admire, either inside or outside your company, who would be interested in helping you grow. And look for ways to mentor those less experienced than you; besides the whole “good karma” thing, it’s another way to demonstrate the value you add to your company.
Stick around awhile. It’s a good idea to stay with your company for at least two years before moving on. A résumé that shows a lot of jumping around can be a definite red flag.
Work for little to nothing. If you’re looking to make a career change, offer to serve as an intern for someone who’s established in the profession you’re interested in. You’ll see what the job is really like, acquire a few skills, and begin making contacts. And you can always do altruistic volunteer work, even if you’re unemployed. You may just meet your next employer there.
Take on additional responsibilities. Employers hate it when someone says, “I’ll only take on this additional responsibility if you raise my pay.” They love it when you say, “I took this on three months ago, and this is the success I’ve brought to the company. Can we talk about a raise?” We know someone who took this approach; instead of the $1,200 raise a previous boss had promised, the person’s new boss approved a $15,000 increase.
Make a difference. Is there anything about your company you can point to and say, “This is all thanks to me” (besides the stains on the carpet)? What about the way you work would be hard to duplicate?
Research the trends in your profession and industry. Keep an eye on relevant trade journals (you know, such thrilling real-life publications as Welding Journal, Pig International, Modern Brewery Age, Seed World, Professional Candy Buyer, and Portable Restroom Operator). You’ll get the inside scoop on where your industry is headed.
Become a do-it-yourselfer. Are you spending a lot of money on something you could learn to do yourself? Besides the monetary benefit, studies show that lifelong learners are less likely to suffer cognitive decline.
J.D.’s note: I’m a huge proponent of personal development. Your career is your most valuable asset, and by becoming a better worker (whether for yourself or for others), you boost your ability to earn. And that doesn’t just pay off now — it pays off for decades to come. Here are some other articles on this subject from the GRS archives: “How I Gave Myself a Raise“, “Five Steps to Six Figures in Seven Years“.
Here’s How Often You Should Rebalance Your Portfolio, According to Vanguard | SmartAsset.com
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Portfolio shifts are a common occurrence for investors, especially active ones. Over time, assets shift out of balance from their original assigned portions and could take you out of your comfort zone. Rebalancing your portfolio realigns your assets to meet your goals according to a particular timeline and risk tolerance.
But the act of rebalancing has the potential to bear a hefty price tag, one that can break the bank through taxes, fees and time consumption. The good news? Experts at Vanguard have done their due diligence and have reached an opinion on the subject to provide you with the best answer to “When should I rebalance my portfolio?”.
For a guidance on rebalancing your portfolio, connect with a financial advisor for free.
Why Rebalance Your Portfolio At All?
Investors use rebalancing to restore their assets to their original allocations, adjust assets for their risk tolerance and optimize portfolio performance. Here’s what each of those looks like.
Restore original proportions: When the initial investment was made, you chose how much of an asset to purchase and add to your portfolio based on your risk tolerance and earning goals. This was the original asset allocation. Over time you continued to either reinvest the earnings, add more funding to your top performers, or sell off underperformers. Doing this adjusted the portioning of your assets. A rebalance will restore the portfolio back to its original state.
Risk tolerance: Your tolerance for risk can shift depending on age, finances, or market conditions to name a few. A rebalance can adjust your portfolio to your new level of comfortable risk. Either by being more conservative or advantageous.
Optimize performance: Over time, you may notice assets outperforming others. This can trigger a desire to shift your asset allocation in favor of creating additional space for more of the top performers and less of the lacking assets. Investors can use rebalancing to accomplish this.
Without rebalancing, the portfolio is allowed to gain or lose with no checks in place. Often times this results in a portfolio that loses more than it should and earn less than it could.
Costs of Rebalancing a Portfolio
Rebalancing comes with fees, time consumption and the potential risk of making a poor portfolio decision that will cost you down the road. Here are some examples of common ways these costs can occur.
Monetary cost: Anytime you buy or sell an asset you could be tacked with a fee that is due upfront. Also, some assets contain management fees which also add to the bill. Then you have capital gains taxes which can be a large chunk of your earnings if you sell within a year of purchase.
Time consumption: Rebalancing requires careful consideration of historical asset performance, predictive analysis and research to make a calculated decision on what to buy and sell. Rushing the process by guessing may save you some time but won’t help in the monetary cost section.
Risk of reckless decision-making: Rebalancing without the proper knowledge, insight and foresight can yield disastrous results. Those who rebalance too often could be replacing future top performers or adding low-return assets to an otherwise strong portfolio.
How Often Should You Rebalance Your Portfolio?
According to the experts at Vanguard, if you had to apply a standard rebalance schedule for any portfolio, odds are an annual rebalance would yield the best results a majority of the time.
While you can choose to rebalance on any schedule, an annual basis lets you avoid most high transaction costs and reap the equity from the assets.
The Bottom Line
Rebalancing too often can increase costs in capital gains taxes and trading fees. Rebalancing infrequently can decrease your earning potential while simultaneously drifting asset allocation out of your risk tolerance comfort zone. Annual rebalancing is the best-case scenario in most cases, even when the market is in trouble like it has been in recent years.
Tips on Investing
If you’d like help with your portfolio, whether rebalancing or otherwise, consider working with a financial advisor. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s asset allocation calculator to help you balance and rebalance your portfolio.
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If there’s one thing in life to always bank on, it’s to expect the unexpected. While we like to think we have everything figured out, it’s hard to predict when certain events will occur. Whether it’s an accidental fender bender in stop-and-go traffic, a crushed roof from a fallen tree branch, or an unanticipated medical emergency, having the right insurance coverage might save you time, money, and headaches.
One insurance coverage policy that may be worth investing in is renters insurance. Pew Research Center found that more people are renting today than at any point in the past 50 years. This study also found that certain demographic groups, such as those with lesser education, young adults, and non-whites, are more likely to rent than other groups. With more renters on the market than ever before, it’s important to consider the various financial protections renters can take advantage of.
If you’re living in a rental property and want to ensure you, your belongings, property, and guests are covered from any unforeseen circumstances, continue reading our guide to renters insurance coverage below.
What is Renters Insurance?
Renters insurance is a form of risk management that protects you and your property, and generally provides legal defense fees and medical costs for anyone who may become injured on your rented property if you are found at fault. Renters insurance is like most insurance policies, such as home and auto insurance, where you buy a policy and make recurring payments. Then, if anything were to happen, such as a burglary, you can make a claim, and your renters insurance will provide a certain level of compensation for the stolen items.
What Does Renters Insurance Cover?
If you’re wondering, “What does renters insurance cover?” the answer is, quite a lot, depending on the coverage you select. From vandalism to explosions and everything in between, renters insurance coverage may give you peace of mind knowing your valuable items are protected.
Personal Property
You can never predict when disaster strikes. Your roof caves in after a blistering snowstorm, freezing you out of your home. You run down the street to get some groceries and return to find your apartment was ransacked. Or, a clueless driver plows right through your living room. It’s either happened to you or someone you know and while sympathy can ease some of the pain, usually money is the only way to replace valuable items like furniture and electronics. That’s where renters insurance coverage comes in handy.
Here’s a list of some events where a renters insurance policy might have tenants covered:
Theft: If someone breaks into your house and steals your personal property, such as your laptop, cash, or other items, your renters insurance may cover you once you pay your deductible. Renters insurance doesn’t only cover items in your home either. If you go on vacation and get pickpocketed, or someone breaks into your car while shopping at the mall, you can file an insurance claim for those losses as well.
Vandalism: If someone breaks into your home and decides to destroy your property with mischievous intent, you can file a claim to get reimbursed. So, if the neighborhood kids decide to drive by and smash your mailbox with a baseball bat, your renters insurance policy will have your back.
Fire, windstorms, lightning, hail, or volcanic eruptions: Basic renters insurance may cover damage inflicted by fire, windstorms, lightning, hail, and even volcanic eruptions. If a flash storm rolls through during the summer and your home gets struck by lightning, many of the damages might be covered.
Smoke: While fires are covered under renters insurance, so is smoke. Sometimes, smoke can damage your personal property without a fire even being present. For example, if you live in an apartment complex and a neighboring unit catches on fire and smoke seeps into your apartment, your renters insurance coverage can help with smoke-related damages.
An aircraft or vehicle that’s not your own: Unfortunately, if you happen to drive your car into your home, renters insurance usually won’t cover the expenses. However, if another driver or an airplane crashes into your apartment, renters insurance might come to the rescue and pay for damages that are covered within your policy.
Snow, ice, or sleet collapse: While it’s a good practice to shovel snow off of your roof, sometimes it’s extremely difficult or impossible. If heavy snow, sleet, or ice causes your roof to collapse, your renters insurance policy can help cover replacement costs for damaged items.
A short-circuit: A short-circuit is when an electrical device malfunctions or fails. A short-circuit can cause a variety of problems, such as a damaged TV or appliance. And, if your power goes out and all of your food in your fridge and freezer spoils, you can file a claim to cover the cost of your perished food.
Water or steam overflow: You never know when a pipe will burst, and when it does, it can lead to all sorts of problems. Rest assured knowing your renters insurance policy may cover damages that result from water or steam overflow.
Frozen plumbing: Sometimes, the sheer cold is strong enough to freeze the water in plumbing and HVAC systems. Then, if you try and run hot water, the frozen water can expand and may lead to a cracked piped, pouring water throughout your home. Some renters insurance plans may cover these damages. However, if you were away when the frozen pipe burst and you didn’t take necessary precautions to keep your home properly heated, you may be at fault and left with no coverage.
Water or steam-heating appliances: Additionally, any water damage from water or steam-heating appliances, such as your dishwasher or laundry machine, may be covered by your renters insurance policy.
Falling objects: Have you ever wondered what would happen if an asteroid came crashing through your home? If so, have peace of mind knowing your renters insurance coverage may take care of the destruction from falling objects such as fallen trees and space debris.
Riots: If a riot breaks out around your apartment and someone damages your personal belongings, your renters insurance coverage can help take care of the costs.
Explosions: Whether a transformer blew up or someone set off an explosive device that causes damage to the home you rent, your renters insurance policy may help pay for any of your items that were destroyed.
Other scenarios: Renters insurance may cover other scenarios as well. For example, Trulia explains how renters insurance can cover things such as waterbed leaks and even dog bites. Additionally, renters insurance can even cover bank or credit card forgery if a thief snatches your financial information from your home and decides to go on a spending spree.
Living expenses
The answer to the question, “What does renter’s insurance cover?” is not complete just yet. Let’s say, for example, a tree came crashing down in the winter, leaving a gaping hole in your home or apartment. You most likely won’t be able to live in your house, or you might freeze. If your place of residence becomes uninhabitable, renters insurance can help cover your living expenses while your rented home or apartment is under construction. These expenses include things such as hotel costs, groceries, and other incidental expenditures.
What Does Personal Liability Renters Insurance Cover?
A final area of expenses rental insurance covers is personal liability. Renters liability insurance may cover you if you are at fault for injuries that occur on your property. For example, if someone gets hurt on your property and decides to file a lawsuit, renters liability insurance might help pay for your legal fees, as well as medical expenses of the person who got injured.
Renters liability insurance may also cover the expenses of another person’s stolen or damaged property that happens in the home or apartment you rent. So, if you decided to borrow your brother’s laptop, and it was destroyed after a fire, a renters liability insurance might take care of the cost.
Ultimately, coverage can vary between insurance providers, so do your research and consider all of your options before selecting a renters insurance policy.
What Does Renters Insurance Not Cover?
While it may seem like renters insurance covers everything, there are a few things that are often not covered.
Personal belongings damaged from natural disasters such as earthquakes and floods: If you live in a high-risk area for natural disasters, such as Tornado Alley, along a river, or in a hurricane-prone area, you may need flood, earthquake, or other types of specialized insurance policies.
Theft or damage to your vehicle: While the valuables inside your car may be covered by renters insurance, any damage to your car, or theft of your car, is not typically covered. To insure your car, you might consider purchasing auto insurance.
Your roommate’s belongings: Unfortunately, your roommate won’t be able to freeload off your renters insurance plan. Instead, if they want their valuables covered, they will need their own renters insurance policy.
Damage caused by rodents and pests: Any damage from rodents such as bed bugs, mice, cockroaches, and other pests are often not covered by renters insurance.
High-value items like jewelry, antiques, and family heirlooms: If you have expensive items, such as antiques, high-end jewelry, or other valuable pieces, your renters insurance may not cover the cost if they’re stolen or damaged. Instead, you might consider purchasing additional coverage or buying a standalone policy.
Damages incurred from nuclear war or terrorism: This may not be your first thought, but many renters insurance policies exclude damages from nuclear war or terrorism on their plan. If you’re worried your home or apartment may be subject to destruction from war or terrorism, you might consider purchasing extra coverage.
How Much Does Renters Insurance Cost?
According to the Insurance Information Institute, the average cost of renters insurance premiums in 2016 came in at about $185 a year. Broken down monthly, the average renters insurance policy costs about $15.50 per month. When searching for renters insurance, it’s also important to know how your credit score comes into play.
The Insurance Information Institute explains how your credit score may impact your insurance score to determine if you have a history of making claims. A history of filing more claims may lead them to charge you more money. At Turbo, you can take advantage of our financial health tool and obtain a free credit report to determine where you stand so you can purchase a renters insurance policy that fits in your budget.
Key Takeaways on Renters Insurance
If you’re asking yourself, “What does renters insurance cover?” hopefully you can use this guide as a resource. Renters insurance coverage is a great way to protect some of your personal items and belongings, as well as the belongings and health of others visiting your property, so consider if this kind of policy is right for you.
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A Great Credit Score, but She Can’t Get a Mortgage
Despite solid financial track records, many older Americans have a hard time refinancing because of their mortality risks and lower retirement incomes.
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Published April 8, 2023Updated April 11, 2023
In late 2019, Molly Stuart’s contract ended at the community college where she worked. “Normally, I’d just get a new job, but then Covid happened,” she said. So she collected unemployment for awhile, then retired.
In 2021, hoping to give herself some financial breathing room, she tried to refinance the three-bedroom ranch house she had bought 18 years earlier on an acre of land in Sacramento County, Calif.
“I’m an extremely good risk,” said Ms. Stuart, 60, a lawyer. She had a 30-year work history and a credit rating above 800. Her remaining mortgage was $102,000, but she estimated that the house was worth about $500,000. She had already paid off the mortgage on another house in Sacramento, which she rented out.
But her mortgage company denied her application. “I didn’t qualify for a refinance because I didn’t have enough income,” she said. “It was extremely frustrating.”
higher credit ratings than any other age cohort, yet recent studies have shown that they’re substantially more likely to be rejected for most kinds of mortgages. That raises barriers for older Americans hoping to renovate or retrofit their homes, or to extract home equity as a buffer against medical expenses, widowhood or other crises.
Much of older adults’ wealth is tied up in real estate. Among homeowners aged 65 to 74, home equity represented about 47 percent of their net worth in 2019, according to federal data; among those over 75, it was 55 percent. Among Black homeowners over 62, it accounted for almost three-quarters of their net worth.
But a house is not a financial asset, noted Lori Trawinski, director of finance and employment at the AARP Public Policy Institute in Washington. “It only turns into a financial asset if you take out a loan or you sell it.”
Getting that loan may be harder than owners expect.
analysis of more than 9 million mortgage applications collected through the Home Mortgage Disclosure Act from 2018 to 2020. He found that rejection rates rose steadily with age, particularly accelerating for applicants over 70.
paid slightly higher interest rates when they took out either refinances or new purchase mortgages.
The study’s methodology controlled for credit scores and property types, as well as economic and demographic factors, said Alicia Munnell, director of the Center for Retirement Research at Boston College, which republished Dr. Amornsiripanitch’s work. “He’s looking at the well-heeled and the less well-heeled. Age is still a factor.”
The federal Equal Credit Opportunity Act has long prohibited discrimination by age, as well as race, color, religion, national origin, sex, marital status, and receipt of public assistance income. Lenders are allowed to inquire about an applicant’s age, but that information may only be used legally under limited circumstances.
Dr. Amornsiripanitch determined, for example, that lenders attributed more than half of their rejections of older applicants to “insufficient collateral.” He speculated that lenders didn’t find those homes to be worth as much as applicants had thought, possibly because older owners occupy older homes, and might have deferred maintenance.
more apt to have debt, and more of it, than previous generations. That affects their debt-to-income (D.T.I.) ratios, a metric that lenders pay keen attention to.
“High D.T.I. is a key denial reason,” said Linna Zhu, a research economist at the Urban Institute in Washington whose research has also documented higher rejection rates at older ages.
A study she published in 2021 found mortgage denial rates of 18.7 percent for people over 75, 15.4 percent for those 65 to 74 and 12 percent for people under 65.
If you’re shopping for a home, you’ve probably created a wish list to narrow down your search. Biggest purchase of your life, right?
Once you’ve landed on the number of bedrooms and bathrooms, and how important granite countertops and hardwood floors are, you’ve likely considered the L word: Location. Homeownership is a long-term relationship, and you’ll want to make sure to do your homework when dating your future neighborhood. Finding the best qualities of a great neighborhood is all about knowing where to look.
Here are a few ways to score a home and its neighborhood, no matter where you’re shopping!
Schools
Maybe you’ve got a baby on the way, or perhaps you’re single and kids are the last thing on your mind. Don’t worry, we got you either way. Buying a home in close proximity to a thriving school is more important than you might think. Diaper bag or not, you should do your homework on the schools near the home you are interested in. A buyer should do their own independent research to gain their greatest understanding of the neighborhood.
K-12
Trust us, you should care about how well schools in your area are doing. Let’s break the stats down for you. Here’s what you need to know, as suggested by the National Association of Elementary School Principals.
Check out the school district’s annual report.
What is the school’s discipline policy?
Check to see what services are available at the school.
What is the school’s safety policy?
Is there an active parent organization?
Doing research on local schools before you make an offer on a home can pay off. Good schools mean good neighborhoods, stable home values, a higher selling price, and better education for kids. Online resources like SchoolDigger.com and GreatSchools.org are especially helpful for evaluating schools.
School Digger ranks schools compared to other options in the state. You can narrow the search by city, neighborhood, and school level. The color code helps you quickly identify the rank of the schools in your preferred search area.
Great Schools provides a robust review platform where users can rate their local school. Reading the reviews is helpful for getting a good overall feel for the school environment.
Alright, bachelors and bachelorettes, we see you, you can put your hand down. What’s the big deal about buying near a good school if you don’t have kids? Two words: resale value. This is important, for real. Living near a thriving school means better teachers and better test scores, but in the bigger picture it also helps maintain the value of a home and ensure a faster resale. Homes located in high-quality school districts tend to sell quicker than homes near lower ranked schools. Be prepared that property taxes can be higher too… but that can be a good thing!
A good chunk of those taxes will go back to the local schools, which supports their programs and, in turn, makes for a great neighborhood to own a home. Everybody wins!
Post-Secondary Education
OK, so your dream home isn’t near any K-12 schools. Don’t fret! Post-secondary schools are good, too. Colleges, trade schools, and universities bring their own value to the neighborhood table. Here’s what you can look forward to:
Value. Like schools for younger kids, living near a college or the like can raise the likelihood of your home selling for more money later on because of pure proximity. People like to walk to places! They can save money on gas and not have to worry about parking.
Mature neighborhoods. If you live in the general area of one of these types of schools, it’s likely that the crowd is a bit older. If you’re looking for a mature neighborhood where you can find friends with similar interests, this is your best bet!
Entertainment. College towns are notorious for having plenty to do. Cute shops, restaurants and other fun places pop up all over in these areas because college kids like to have plans in the evening and on the weekends.
It’s important to note that these schools also bring a few less-than-ideal things to the table, too. Parties, full parking lots, and lots of traffic are sure to come with this area.
Commute
No one wants a commute to work that lasts as long as half a work day. However, some people can tolerate a commute that’s around an hour or so depending on how much they LOVE where they live. When you’re considering a neighborhood, don’t forget to take a peek at commute time on regular roadways and alternate means of transportation.
Public Amenities
There are a lot of public structures and activity areas that you can take advantage of. Many people like to live near these because they’re the best price: Free! Here are a few you may want to live near (preferably within walking distance).
Playgrounds
Playgrounds are the perfect gathering place for young families to meet and hang out without spending any moolah. There are also usually wide open spaces for family sports or rentable covered areas to host the next neighborhood picnic.
Dog Parks
Dogs are literally the best. See which parks will make your furry friend bark with enthusiasm with these resources. Find Your Park and Nylabone’s Dog Park Locator to find outdoor spaces in a neighborhood.
Libraries
This essentially goes in hand with a nearby school. Why buy books you’ll only use once when you can check them out for free? Libraries are also usually well-maintained so they provide a beautiful addition to the neighborhood.
Sports Areas
Some cities and neighborhoods offer basketball or tennis courts and other areas to play sports. There might even be a community pool! These are a great way to keep neighborhood kids outside and playing, as well as providing a place to connect with your neighbors.
Population
Proximity
In addition to all of the above, it’s important for you to consider the population size and density of your new neighborhood. Would living in a bustling urban metro area be your ideal neighborhood? Or do you prefer the peace and solitude of a rural neighborhood? Maybe a home in a suburban community geared toward young families is your preference? Whatever your liking, you’ll want to take population into account when seeking the best neighborhood for your individual needs.
Crime
It’s always important to check the crime rate of places you’re looking to move into. While crime happens everywhere, basically no matter what, you want to feel safe. You can find out this info with a simple Google search of city name crime rate.
Liveliness
It might be hard to get a good read on a neighborhood unless you have an opportunity to interview all of your potential neighbors. You can certainly knock on doors and ask questions, but if that’s not style here are a few key factors to consider when sizing up the vibe of a neighborhood:
People out and about. Seeing neighbors walking dogs and playing with their children in the front yard is a good sign of neighborhood vitality and safety. Future friends, yay!
High curb appeal. This is key for two reasons. First, it indicates that homeowners take pride in investing to maintain their properties. Second, it highlights that city services are functioning well, with paved streets and proper trash pickup services. In this case, go ahead and judge a book by its cover!
Nightlife. Visit the neighborhood during the daytime and evening hours, as well as on weekdays and weekends. This will help paint a realistic picture of what it might be like to live in the neighborhood. You’ll want to see all sides of your future home.
Home Insurance
The location, condition, and construction of a home will all play a part in determining home insurance cost. Here are just a few of the factors that a company will consider when quoting a home for an insurance premium:
Age and construction
Proximity to a fire station
Nearby coastline or body of water
Other features of a home will also be examined, but these three factors are closely tied to the neighborhood where the home is located. Insurance is about risk, and companies will assess risk in different ways. Always be sure to compare quotes to make sure you are getting the best rate for your coverage.
The End Goal
The qualities of a great neighborhood outlined above should prove helpful in the quest for finding the best neighborhood to fit your personal needs and lifestyle. Location isn’t the only critical consideration for resale value but it’s pretty dang important. A homeowner should enjoy and feel at home in their neighborhood. Buying a home is a long-term relationship, so take dating slowly and get to know each other before you take the next big step. You’ll want to make sure you and your new neighborhood are going to have a long and happy life together!
A Homie Can Help
Feeling overwhelmed with where to begin? Start browsing homes with Homie and see how easy it can be. Our team of licensed agents and experts are ready to help you find the home of your dreams, in a great neighborhood! All while saving you money. Pros that love contacts and legal jargon and want to help? Heck, yes! Oh, and they want to save you lots of dollar bills? Even better!
We made your neighborhood evaluation a bit easier, check out these guides!
The terms “prequalified” and “preapproved” are often used interchangeably by mortgage borrowers, but they aren’t quite the same. Prequalifying for a home loan isn’t as involved — it simply gives you an idea of if you’ll qualify for a mortgage, and if so, how much and at what interest rate. Getting preapproved requires more legwork and indicates that the lender is committed to moving forward with the mortgage.
What is the difference between preapproved and prequalified?
Getting prequalified for a loan is easier than receiving a preapproval, which also means prequalification means less to home sellers regarding your ability to get the mortgage.
Prequalifying involves submitting some basic financial info and getting your credit checked to get a general idea of whether you can get a mortgage, how much you could borrow, and the interest rate.
For a preapproval, lenders will do a deeper dive into your financial situation and will require more documentation of the financial details you provide as well as a formal loan application. Preapprovals hold more weight and are more useful when trying to buy a home.
What is a mortgage prequalification?
Mortgage lenders give borrowers the option to see if they are prequalified.
It involves submitting some basic financial information and undergoing a credit check to determine how much house you can afford and possible interest rates you’ll qualify for.
A mortgage prequalification is only a general indication that you could be approved for a mortgage if you were to formally apply. It might be your first step in the homebuying process, and can usually be obtained with a phone call or brief online application. Learn more about the pros and cons of prequalification to see if this step makes sense for you.
What is a mortgage preapproval?
A mortgage preapproval is a letter or written statement that specifies your maximum loan amount and the lender’s commitment to fund the loan if your financial situation remains the same.
To get a mortgage preapproval, you’ll need to submit a formal loan application and provide extensive documentation regarding your income, savings and debt, such as credit cards and student loans. Your mortgage lender uses this information to determine whether to offer you a loan, and at what maximum amount and interest rate.
It’s not set in stone until the loan goes through underwriting and the information in your application is confirmed by the lender. If there are discrepancies, your loan terms could be modified, or the lender might deny your application.
While it’s more complex than prequalification, a preapproval can still be very fast. Some online lenders issue preapproval letters in minutes. Others might require a full day or even a week to review the information you submit.
Regardless of how long it takes, the wait is worth it, since you’ll need a preapproval in hand before making an offer on a home.
“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”
Differences between prequalified and preapproved
No formal application required, but might require credit check
Requires formal application and credit check
Provides estimate of how much you might be eligible to borrow
Provides conditional loan approval
Relatively quick process and rapid response from lender
Could take time to gather documentation and complete application, then anywhere from a few minutes to a few business days for response
Not a viable approval, and not used when making an offer on a home
Demonstrates to home sellers you’re a serious buyer and on track to full approval
Which should I choose: Preapproval or prequalification?
Both preapproval and prequalification are indications from a mortgage lender that you are eligible for a mortgage, but a preapproval is much more detailed — and more of a guarantee.
“Because prequalification may not always lead to loan approval, it is important for homebuyers to avoid making any firm plans based on their qualification status,” McBride says. “If the mortgage lending process were a highway intersection, prequalification would be the yellow traffic light and preapproval would be the green light.”
That green light is important in today’s housing market. Since some markets are especially hot, sellers might be getting competing offers. If they’re comparing one offer without a preapproval letter to an offer that does have one, they’re likely to go with the preapproved buyer — it’s a safer bet.
While there are differences between getting preapproved vs. prequalified, both processes usually involve credit checks. Typically, these are recorded as one inquiry on your credit report if they’re done within a short window, usually 45 days.
How to get started with the preapproval process
Before you ask a mortgage lender to preapprove you for a certain amount of money, take a look at your budget to determine how much you can contribute to a down payment. Most lenders will want an idea of what you plan to cover to have an estimate of your loan-to-value (LTV) ratio.
Additionally, gather all the documentation that will be requested so you’re ready to hand it over.
Remember, just because you get preapproved or prequalified from one lender, it doesn’t mean you have to actually get your mortgage through that specific lender. Always shop around before you make the final call on a lender, because rates and terms vary. By shopping with multiple lenders, you can determine if you’re getting the best deal.
Preapproved vs. prequalified FAQ
If you can’t afford to make a cash offer on a home, you’re going to need to borrow money in the form of a mortgage to make the dream of owning a home a reality. A mortgage lender needs to review your finances and sign off on approving your loan before you’ll get the keys.
To get prequalified for a mortgage, you’ll usually only need to provide high-level financial information like basics about your income and expenses, without any supporting documentation.For preapproval, however, you’ll need to fill out a more formal application and provide documents that serve as evidence: recent pay stubs from your employer, bank and credit card statements, W-2 tax statements and anything else that shows a complete picture of your personal finances.
Because a prequalification is a less detailed process, you can usually get one quicker than a preapproval. It can even happen in a matter of minutes over the phone, or seconds online.However, you can also get a preapproval quite fast. Some lenders promise preapproval letters with turnarounds of just a few minutes. Others, though, might take a few days to get back to you. If your financial situation is more complicated — if you’re self-employed, for example, or have another reason for a deeper investigation — the preapproval will likely take a bit longer.
You should get preapproved or prequalified before you begin looking at homes. A seller will want the assurance that you’ve done the prep work — and that a bank or credit union has done enough research to feel confident about loaning you the money.
Yes. There is no requirement to get prequalified first. Instead, jumping ahead to preapproval speeds up the process and puts you closer to being fully approved.
Day traders may hold stocks for a few hours, while buy-and-hold investors may hold onto a stock for decades. There is no single formula that works for everyone when it comes to deciding how long to hold stocks.
Rather, the decision to hold stocks or sell them must include a number of factors that may be unique to each investor. These can include everything from company fundamentals to industry trends to the investor’s own goals.
In a perfect world, an investor would hold onto stocks until they made a profit. But how much of a gain, and how long that might take — and what to do if the stock loses value? — is more complicated than it seems. Here are some variables to consider.
Why Hold Onto Stocks for the Long Term?
Here are some reasons for an investor to hold on to a stock: They only feel compelled to sell it because of that stock’s most recent performance in the markets. But selling a stock because of a sudden drop in value could be considered timing the market — a strategy that, at times, can hurt investors.
What happens today in the markets doesn’t necessarily reflect longer trends, therefore holding onto stocks despite a dip may give your shares time to recover.
A study done by Dalbar illustrates how investors who attempt to time the market often turn into their own worst enemies. During the 20-year period studied, the S&P 500 had an average annual return of approximately 10%. During the same time period, the average investor achieved a return of just 2.5%, due to the frequent changing of their investment holdings (often mutual funds).
Sure, in the moment, it can be tempting to sell a stock based on a dramatic price change. But, calculating stock profit or loss alone may not be particularly helpful. Stocks that enjoy long-term growth take on some dips in price. And, similarly, dud stocks may have some brief moments in the sun.
Buying and Holding for the Long Game
What’s the ideal holding period for a stock? Some investors might say forever. (Or, at least until the money is needed — like, for income when you’ve reached your target retirement date.)
There are several allures of holding stocks for a long time. First, spending ample time in the market reduces the risk of short-term market volatility. Ups and downs in value are an inevitable part of investing in the stock market, whether through a single stock or a fund. Especially in the short-term, the market could move in any direction.
The bear market between 2007 and 2009 was a prime example of this, as the U.S. stock market lost more than 50% of its value then. This wasn’t an ideal time to be holding stocks — but it was an even worse time to sell. With a buy-and-hold strategy, investors can keep their eyes fixed on the potential for a recovery. The stock market hasn’t yet experienced a dip that it did not bounce back from.
What Is Index Investing?
This is why some investors prefer passive investing strategies. Index funds hold a representative sample of the entire stock market, in an attempt to achieve the market’s average returns. Instead of betting on just one company stock’s performance, index funds invest in the entire engine of the economy. Research has shown that over time, market returns may exceed the returns of active strategies.
Since the great recession of 2008, the stock market has more than made back its losses. This is why buy-and-hold is a strategy that is popular with index fund investors.
Holding Stocks for Future Profitability
Let’s say that a company’s stock has performed well. Perhaps, it’s even hit an investor’s profitability target. Is growth, alone, a good reason to sell? Some investors might think no.
At any moment in time, what makes an investment worth holding on to is the belief that it will be profitable in the future. Therefore, what has happened in the recent past may or may not be relevant to the future.
In investing parlance, this notion is called fundamental analysis. Here are just a few big factors that an investor might chew on when adopting this type of market analysis:
An investor wants to hold on to the stock of a company that continues to increase its sales over time, with a forward-looking forecast that indicates growth. Perhaps the company continues to beat Wall Street’s expectations on earnings.
Maybe, the company has strong management that continues to improve profit margins without sacrificing innovation. Or, perhaps the company continues to develop products that increasingly capture market share, making the company a stronger industry competitor.
While none of the above scenarios outright guarantee a company’s stock will continue to perform well into the future, keeping an eye trained to the days ahead — instead of the past — may be a useful skill for investors to develop.
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Reasons to Sell Stocks
Some investors and traders, however, are not interested in long-term holding strategies. Instead, they set certain profit thresholds, selling once those requirements are met.
Selling Once a Stock Hits a Profit Requirement
Here’s one scenario:
A trader may want to sell once a stock reaches 10% or 20% in profit. Similarly, a stock could be sold once it hits a preselected price target — usually based on a stock’s per-share price. Price-target selling can be set up automatically, through what’s called a limit order.
For example, an investor buys a stock for $50. They want to sell this stock if (and only if) the price reaches $65. A limit order can be set to sell when the stock hits this target price. If it never reaches $65, then order is not filled (and the stock remains held).
Selling for Personal Reasons
Although it is not, generally, recommended that an investment strategy change in response to the market’s ups and downs, there are plenty of personal reasons why a person may opt to sell stock investments.
Certain life events may create a shift in an investor’s ability to tolerate the risk of stocks. For instance, a divorce, family death, the birth of a child, or a big move may cause a person to want to keep more of their overall investment portfolio in easy-to-access cash (or other less volatile investments).
Similarly, a person might just want to build up their cash savings. For financial goals with a more immediate timeline, it may make little sense to subject that money to the volatility of the stock market. Instead, savers may prefer to sell stocks to keep that money liquid and ready to be used.
Changes in personal investment strategy can also drive an individual to sell stocks. Shifts along these lines may have nothing to do with a stock’s recent performance or that of the market. Investors approaching retirement, for example, could want to shift towards more conservative investments, like cash or bond holdings.
Selling to Diversify Assets
Many investors opt to put a mix of stocks, bonds, and cash in their long-term investment portfolios. For example, an investor may choose a mix of 70% stocks and 30% bonds to balance out investment goals and risk tolerance.
But, when diversifying assets, one type of investment may outperform the other. Because of the potential for this uneven growth, an investor’s asset allocation could get thrown out of balance.
Let’s imagine a large spurt of growth in the stock market coupled with more lackluster growth in the bond market. Remember the investor from above, with a 70/30 mix? Maybe, now. they’re left with a portfolio that’s closer to 80% stocks and 20% bonds.
That mix may carry more risk than the investor deems appropriate. So, in this scenario, rebalancing the portfolio requires selling some stock holdings and then moving the funds into less volatile bonds.
Understanding Short-Term Holdings
Investors debating how long to hold their stocks will likely want to consider taxes. There’s no minimum amount of time when an investor needs to hold on to stock.
But, investments that are sold at a gain are taxed at a capital gains tax rate. This rate changes, depending on whether the investor held onto the stock for more or less than one year.
For a holding period of less than one year, any gains will be taxed at a person’s marginal income tax rate. By holding onto a stock for more than one year, an investor will likely lower their tax burden. It can be helpful for investors to speak with a certified tax professional before adopting any tax strategy.
The Takeaway
Even though investors typically put a great deal of thought into selecting stocks and other securities, with the hope that those securities will appreciate in value, there is no guarantee they will. And there is no crystal ball that can tell any investor how long to hold onto a stock.
Sometimes it’s the stock itself that determines how long you’ll hold it. But sometimes your investing strategy determines your stock selection. If you’re planning to sell quickly with a gain in mind, that’s one approach. But if you expect to hold onto a stock for the long haul, that can also influence which stocks you think have staying power.
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Car accidents are not only scary but also a monumental hassle. That’s largely thanks to what comes after the accident itself.
After an accident, you’ll likely have to spend ample time on the phone with your insurer. Then there’s dealing with the auto shop and rental car agency. There’s also the possibility of having to shop for a new car. When you consider all these factors, the whole cost of even a minor fender-bender can be hefty — both in terms of time and money.
Three-quarters of all drivers have been in an accident. Three-quarters of drivers also believe they’re well covered by their car insurance policies. Unfortunately, this might not be so. A recent Esurance study found that it’s not uncommon to shell out more than $1,000 after an accident — and spend 20-plus hours dealing with post-accident demands.
Truth be told, we often make the whole thing more expensive than it needs to be. From understanding coverages to researching repairs, here are several ways you can ease the financial (and emotional) burden of an accident.
Understand Your Policy
Most online quote systems will customize coverage for you. It’s based on both your ZIP code and the answers you provide throughout the quote. That way, at the very least, you meet minimum state requirements — plus, you can see relevant coverage options.
However, many people don’t even read their policy after they purchase it. That’s not surprising—insurance policies are long, complicated and not particularly riveting. But knowing the fundamentals of your coverage can go a long way in helping you to be aware of protections you don’t have or reimbursements you’re entitled to.
As a starting point, ask yourself the following as you go through your policy:
Is my vehicle protected in the event of a collision?
While no state requires collision coverage, it can be invaluable. It’s designed to cover repair costs for your car, whether you hit another car or another car hits you. Yet the Esurance study reported that over a quarter of drivers opt out of it — likely in an attempt to shave down their premium.
But consider this: If your vehicle’s a newer model, a damaged bumper alone can easily cost $1,000. That’s because many newer models are equipped with a suite of built-in sensors and cameras. Without collision coverage for your car, even a minor accident can burn a hole in your wallet.
It’s worth noting, too, that collision coverage goes hand-in-hand with comprehensive coverage – in fact, some insurers require that you buy them together. That’s because when you bundle them, they help foot the bill for a wide array of mishaps: crashes, fallen trees, hail storms, hitting a snow bank, vandalism, auto theft, collisions with animals and more. Whether you need to replace a damaged part or your entire vehicle, these coverages can be lifesavers.
Do I have backup transportation?
For many of us, a car isn’t just a luxury, it’s a necessity. Our job, school, errands, doctor visits and the like depend on it. Having an easily accessible backup plan can save you a lot of money and stress.
If your car is in the shop after an accident, having transportation in the interim helps daily life continue as normally as possible. Rental car costs can add up quickly, so knowing whether your car insurance will help cover those costs is critical—especially if the shop is, say, waiting on a replacement part, which could take a couple weeks.
How much will my coverages actually cover?
Having coverage is one thing. Having enough coverage to be reimbursed for the total cost of an accident is another. Let’s say you’re found at-fault in an accident. The other driver is injured and looking at about $100,000 in medical bills. Your bodily injury liability limit is $25,000. That means you could be responsible for the remaining $75,000.
While lower limits might save you money at checkout, it could leave you in the lurch after an accident. Pay attention to your coverage limits and make sure you’re comfortable with them.
What do I have to pay out of pocket?
A deductible is what you pay before you’re insurance coverage pays. When you buy car insurance, you get to choose from a range of deductibles. The more you’re willing to pay out of pocket, the lower your premium is likely to be.
But your deductible should be one you’re comfortable paying. If, for instance, you choose a higher deductible of $1,000, make sure you have $1,000 in your bank account on standby. Otherwise you could be facing a not-so-little snag in the claims process.
Research Local Auto Repair Costs
About two-thirds of U.S. drivers don’t trust auto repair shops in general, according to a 2016 AAA survey. Fear of being overcharged is understandable, so researching auto repair costs in your area can be to your advantage. According to the Esurance study, drivers who had to shell out less than $1,000 in repairs after an accident were more than 60 percent more likely to have done their research on repair costs.
Auto insurance companies typically have a direct repair program. This consists of a network of repair shops pre-approved by your insurance company. After all, your insurer has a stake in this too, and a quality repair job at a reasonable price reflects well on them.
However, direct repair programs aren’t mandatory. Ultimately, it’s up to you to choose the repair shop you want to work with.
Plan for the Unexpected
Lawsuits over emotional distress. Being hit by an underinsured driver. Missing work due to injuries. These are scenarios no one likes to dwell on, but having a contingency plan in case they do happen can bring you much peace of mind.
It’s not just money in the bank that’s at stake. Your assets ought to be top of mind as well — property, equity, savings. For this reason, the general rule of thumb is to purchase the coverage that’s right for you and fits within your budget. An auto policy shouldn’t cost an arm and a leg, but it should protect that arm and leg as well.
Eric Brandt has more than 25 years’ experience in the insurance industry. Eric currently serves as Chief Customer Advocate for Esurance, where he leads the customer experience, including claims fulfillment. Prior to joining Esurance, Eric led customer-centered transformations in the areas of claims, risk management and relationship management for carriers offering personal lines, commercial lines and employee benefits protection. To learn more about Esurance’scarinsurance options, visit their website.
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Over the last few months, I’ve spent countless hours researching the process of selling items online for a large project I’ve been compiling. It’s taught me that as much as I thought I knew about selling online, there’s so much more that I have no clue about!
For example, a family member recently asked for my help selling an unneeded car on the internet. “Sure!” was my first thought. “Heck, maybe I’ll even use this as a case study!” However, there’s one major problem with this situation: I’m completely ignorant when it comes to cars.
Actually, I shouldn’t say completely ignorant. That’s not correct. I’m inexcusably ignorant when it comes to cars.
As a younger member of the male population of American society, I feel like I’ve failed to inherit this basic knowledge that was supposed to written into my DNA. In fact, my inability to prioritize the maintenance and regular care of my own car is likely one of my biggest financial weaknesses. Maybe that’s one reason I enjoyed our recent year without owning any vehicle at all!
Even with this blatant gap in knowledge, I actually have had some success selling cars online through Craigslist. Before we left for our year abroad, we sold both of our cars using their online classifieds. However, those were a couple of clunkers. If I remember correctly, we sold one for $1,000 and one for $2,000 after negotiations.
Because we were leaving, our priority was to just get our cars sold. We didn’t want to give the cars away for free, but we weren’t trying to squeeze out an extra 10% or additional $100. We were more concerned with not being stuck with a set of wheels parked in Indiana while our bodies were in New Zealand!
The situation with this car is different. The family member I’m assisting doesn’t need to sell the car — he wants to sell the car. He has no delusions about getting top retail dollar, but is willing to take the time to obtain a fair private-party offer.
Plus, this isn’t anything close to a clunker. It’s a 2003 Honda Accord EX Coupe. It’s been driven 150,000 miles, but still has only a few minor bumps, blemishes, or flaws. It runs very smoothly and has been taken care of by someone more responsible than me for the majority of its years!
Giving eBay Motors a Fair Shake
Normally, I’d take the same approach with this car as I have with the others I’ve sold. I’d take plenty of photos, research the competition, and write a detailed description. I’d present the price and the process for getting more information in a firm, but politely worded manner. I’d then upload the info to Craigslist and wait for the phone to ring!
In other words, normally I would never give eBay a passing glance. I know that for the last few years they’ve had some form of classified through what used to be Kijiji.com, but for one reason or another I never considered it a viable option. I’ve also heard stories of people buying and selling cars through traditional eBay auctions (non-classified formats), but that process seems too risky and intimidating.
Recently, however, eBay has started a huge push on its newly re-branded classified section, eBayClassifieds.com. They’re heavily promoting this, and they seem to be incorporating the classified listings much more fluidly with the general automobile searches for the main site. Classified listings within a certain distance (200 miles by default) are now included alongside the national listing in searches when logged into your eBay account.
In addition, constructing a classified ad in eBay has several benefits over its competitors. It’s a more guided process, with eBay providing reminders and recommendations along the way. For example, they supply a fantastic, printable Sell Your Car Checklist [219kb PDF] to help gather everything you’ll need to create a detailed listing. Currently, your first six classified ads in the eBay Motors section are free during a 12-month period.
The process of creating a classified ad to sell a car is so smooth that, for the first time, I’m going to construct my classified ad in eBay first. I’ll then take my description, pictures, and relevant details, and copy them into my trusty Craigslist format, as well. The more I research and tinker with eBay’s classified section, the more I’m starting to view this as a necessary part of giving the car adequate online exposure.
Step It Up with a National Auction?
Selling via a classified ad isn’t the only way you can list your car on eBay. You also have the option to list it through the eBay Motors site under a standard auction format. With classifieds, you list your contact information and have to work out the details of the transaction with potential buyers (just as if you were listing on Craigslist). However, using eBay’s standard auction format, interested parties from all of the U.S. can view and place bids on your vehicle, just like they would any other item on eBay.
Currently, eBay is allowing you to post your first four automobile auctions of this type for free, too. As long as you pass on all the extra upgrades and add-ons, you can create a national listing at any starting price for free. With this format, you can eliminate a lot of the grunt work that accompanies a classified listing. (Grunt work includes answering phone calls, negotiating, showing the car, etc…)
So, I could simply list my car with a starting price equal to what I’d normally offer in my classified ads. It’s unlikely that I’d get any bids, but as a free 7-day listing, it’s hard to pass up taking a shot. I’ll already be compiling the info for my classified ads, so it’d only take an extra 15 minutes or so to upload the data into a standard auction of this type.
Is the extra 15 minutes worth taking an unlikely shot at selling my car outside of my local market? I’m not sure. eBay will automatically compile and offer shipping options to someone who may want to have the car transported. These ranged from $300-$700 on some of the sample cars I looked through. Would someone actually pay that? Again, I’m not sure.
Edmunds.com featured an article about a couple that sold cars online to people from all around the country, people who would fly in to inspect the cars. I like to keep a fairly open mind, but I just can’t imagine someone wanting to buy plane tickets to come check out a potential car from across the country. (In the story, the couple even picked them up from the airport and made breakfast!)
Deciding What To Do…
Many times when I write a post, I explore a topic I’m experienced with. I look for areas where I’ve had either success or failure that may be valuable if I were to share it. This isn’t one of those posts.
On this topic, I’m still clueless. I’d actually like to know what you think! Have any of you bought or sold vehicles using eBay (either classified or standard listing formats)? Do you know anyone who has? Am I missing any huge gaps in my thought process? If you were in my shoes, what would you do to maximize the exposure for your car online?
I love Craigslist, but I’m convinced I may be leaving money on the table if I don’t seriously consider eBay for selling my car. If there’s interest in this topic, I’ll be sure to post a follow-up describing any successes or failures!
How to Sell Your Car on eBay Motors
A representative of eBay Motors e-mailed me to ask if I’d like to interview their Manager of Dealer Training, Clayton Stanfield. Stanfield spends his days educating and training automobile dealerships across the country how to better market their cars and trucks using eBay Motors.
Many of you commented that you’d love to see a follow-up with more specific tips on how to better use eBay Motors to sell a car. Since I’m going through the process for the first time, I jumped at the chance to chat with Stanfield about his top tips and tricks.
Create a Great-Looking Listing
On the call, I asked Stanfield the primary question, “What are the top areas where the average consumer can have the biggest impact in improving their listings?” In other words, I was looking for Stanfield to show me the low-hanging fruit. I wanted to know the areas where you and I could get the biggest bang for our time and effort.
The first words out of Stanfield’s mouth were: “You’ve got to create a great-looking listing.” He was the first to admit this is common advice, but reiterated that not enough people take it heart.
“Seventy percent of cars that sell, sell to a buyer outside of state lines,” Stanfield said. “Out-of-town buyers need to be able to visualize the car. Focus more on pictures than anything else.”
Stanfield suggested creating a “virtual test drive” for potential buyers. I’ve since fallen in love with that phrase. One of the first principles Stanfield teaches is that dealerships can do a better job of this by always including 24 high-quality images (eBay’s maximum) with every listing. Thorough images help the buyer really get to know the vehicle, similar to being able to test drive it themselves in person.
Titles vs. Subtitles
Another way to improve the average listing is through the smart use of titles and subtitles. When listing an everyday item on eBay, creating a subtitle costs extra money and isn’t searchable by default. This means that when a potential buyer searches for an everyday item, the information you provide in the subtitle won’t help them find your listing.
eBay Motors works differently. When listing your car or truck, eBay Motors generates a basic title for your listing automatically. Usually this includes the year, make, and model. For example, my car’s automatic title is “2003 Honda Accord”. eBay Motors then provides a subtitle where you can fill in more specific information. In contrast, when selling an automobile the subtitle is free and is included in searches by potential buyers.
Stanfield says that one of the biggest mistakes people make is that they repeat information in the title (generated by eBay Motors) again in the subtitle. There is no need to repeat the information in the title! In other words, eBay has already provided me with 2003 Honda Accord. It makes no sense for me to repeat that information in the subtitle (which I actually did the first time!).
Instead, Stanfield urges customers to use every available character in the valuable subtitle to help your listing appear in more searches. He suggests thinking for terms that a buyer may search for, but that aren’t already included in title. Some possibilities:
“Chevy” – Most of the time the title will say Chevrolet XYZ, but buyers may search for “Chevy”.
“5-Speed”
“Leather”
“DVD”
“Heated”
According to Stanfield, appearing in more searches is the number one way to increase the final price you receive for the auction!
A Personalized, Friendly Description
When it comes to creating a description, the most important factor is being thorough and including as much detail as possible. But if you want to maximize the amount of bidders, simply listing the facts isn’t enough. Stanfield encourages dealers and individual sellers to personalize their descriptions by including background information on the car.
For example, you may include information such as when you bought the car, how long you’ve driven it, or why you are selling it. “You don’t just have to list details and facts; try sharing the background and history of the automobile, if you can” Stanfield says. He points out that sharing details not only allows people to identify with the car, but also makes you seem more personable and down to earth.
Most importantly, Stanfield suggests being brutally honest in your descriptions. It’s not only the ethical thing to do, but will result in better results and far less hassle. On one particular listing, Stanfield even went so far as to offer up this in bold: “This car is in worse shape than you think!” (I laughed out loud when he told that story on the phone!)
J.D.’s note: I think personalized, friendly descriptions are key to most eBay auctions. My auctions almost all go for more than similar items sell for. I’m certain it’s because I try to convey a chatty, friendly persona.
Reserve and Starting Price
At the end of the interview, I asked Stanfield for his suggestions on setting a reserve price and a starting price. Stanfield recommends setting the reserve at “the bare minimum you’d accept for the vehicle.” He notes that almost every listing sees an increase in activity and bidding once the reserve price is exceeded. Buyers are much more willing to bid on automobiles that are no longer protected by reserves. The quicker your reserve price is met, the more exposure your listing will get!
When it comes to starting price, Stanfield suggests starting low as well. “The most important bid is the very first one,” he says. “It gets the ball rolling and increases exposure in the search engine results.” He suggests starting the bidding at between 10-20% of your reserve price as a rule of thumb. For example, if you set a minimum reserve of $5,000, placing the starting bid at $500 would be a good idea. Most of the time, this will allow for bidding to initiate much earlier than a higher starting price!
Thanks to eBay Motors
I enjoyed interviewing Clayton Stanfield and appreciate him taking the time to share his expertise! Special thanks also goes to the eBay Motors team for reaching out to me on Twitter and making the introduction to Clayton.
As for me, I learned several specific tips during this interview that will help me spruce up my listing and try my hand at some national exposure. If there’s anything you’d add, let me know below!
One would think that short-term goals are pretty easy to accomplish. Oh, really?
Think again. Short-term goals can be easily put off for a plethora of reasons. Research suggests this as 91% of people fail on their New Years’ resolutions.
When it comes down to getting short-term goals done, including short-term financial goals, one must implement some strategies to stay on task and on schedule.
Let’s start out by discussing some strategies for achieving important short-term goals and then move onto some short-term financial goals that are worth your time and effort.
Grab your notepad, you’re going need it!
What’s the Difference Between Short-Term and Long-Term Goals?
Goals can have different timelines attached to them. For example, a short-term goal may take months or even years to achieve, whereas a long-term goal may take 5-10 years or more to reach. It’s important to be realistic about how much time you need and plan accordingly in order to make sure you can stay on track with your objectives.
Additionally, breaking down each goal into smaller steps can help make the goals feel more achievable. It may also be helpful to track your progress and celebrate successes along the way! More on that in a sec.,,
How to Achieve Important Short-Term Goals
A short-term goal is a goal that shouldn’t take you long to complete. Generally, I would define a short-term goal as a goal that takes roughly less than a year to complete. Many times, these goals only take a month or a few weeks. They could only take a day or two.
Short-term goals usually have a very clear path toward their completion. You know exactly how you’ll accomplish your goal – every step you’ll need to take. You can break the goal down into smaller pieces and then track your progress along the way.
It’s crucial that each of your short-term goals follow the “SMART” goal format.
What Are Smart Goals?
Setting goals can be daunting, but with the SMART framework, you can turn your aspirations into achievable objectives that will help you make meaningful progress towards your dreams! SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Think of SMART as your goal-setting BFF! When you have a SMART goal in mind, you know exactly what you want to achieve, how you will measure your progress, and when you will achieve it. Whether you want to improve your finances, health, or personal growth, SMART goals can help you stay focused, motivated, and accountable.
SMART Goals
Stands For:
Specific
Clear and well-defined objectives
Measurable
Goals that have quantifiable targets
Achievable
Goals that are realistic and feasible
Relevant
Objectives that align with your values
Time-bound
Goals with specific deadlines
Unfortunately, even when you know exactly how you’ll accomplish your goal, there are a number of circumstances that can get in the way. Let’s explore how to push through these difficulties and find success.
1. Find your daily energy peak and schedule accordingly.
Unless you’re like The Rock and have seemingly unending energy and strength, your productivity will rise and fall during the course of a day. I know, you didn’t like me telling you that, but someone had to, right?
Short-term goals are best made progress on during the times of day you have high to moderate energy. If you’re saving these goals for the times of day when you’re in a slump, let’s face it: you’re probably not going to get ‘er done. Save the low energy times for leisurely activities.
Okay, so how do you find your daily energy peak? Here’s what I recommend . . . .
Set a recurring alarm when you first wake up for every 30 minutes. Every time the alarm goes off, rate your energy level on a scale of 0 (being no energy) to 10 (being high energy) in a notepad or on graph paper. You can do this for one day or you can do it for a week and average out the results.
This will allow you to see how your energy level changes throughout the day and will allow you to make better decisions regarding how you allocate your time and tasks.
I would recommend working on your short-term goals during the times of day that your energy level is a “5” or higher.
I remember when I first started this blog I was a night owl and had the most energy as the sun was going down. Today, I find mornings work better for me. The lesson? Make sure you adjust your tasks to your changing energy levels. Who knows, you might make a radical shift like me over time.
2. Work on one short-term goal at a time.
I have no idea why multitasking is so praised in our culture. Multitasking, in my opinion, slows people down and produces poor results. It’s much better to work on one short-term goal at a time.
Besides, these are short-term goals – not long-term ones. You’ll be able to get them done pretty quickly and move on to other tasks in short order.
Of your short-term financial goals, it might be worthwhile to work on the quickest short-term goals first – the ones that take the least amount of time. This will give you a few quick wins, which should motivate you to press on.
3. Eliminate distractions soldier!
During my time in the Army National Guard, I learned how to focus. In battle, there’s nothing worse than not keeping your head in the game. When enemies are nearby, it’s critical that you stay on task and don’t daydream. There are plenty of distractions in battle – some of which are set by the enemy – and they need to be avoided.
When you’re working on your short-term goals – including financial goals – you should eliminate any distractions.
When you’re working at home, there are plenty of distractions. If you have kids, you know what I mean. Now, kids are a great distraction, but you should be very careful to make sure they don’t pull you away from your other obligations.
For example, let’s say you have a monthly budget meeting with your spouse. Instead of having the meeting when the kids are running around throwing toys at you, it’s probably best to wait until they go to bed.
Other potential distractions include technology. Yes, while technology can help you accomplish your financial goals – like analyzing your investments with Betterment or Personal Capital – it can also send you alerts that aren’t relevant to the task at hand (like text notifications from your second great aunt Martha).
How do you eliminate technological distractions? Well, if you have Apple devices, it’s pretty easy to do so. On your iPhone, turn on Do Not Disturb. You can do the same thing on your Mac. This way, you can focus in peace and get some work done!
4. Dig deep to find your motivation.
Just like when you’re working on long-term goals, you need to dig deep to find your motivation for short-term goals.
Why do you want to start a budget, for example? If you don’t have a good enough reason or reasons, trust me, the number-crunching will get old fast and you’ll probably give up before you develop a working budget.
Imagine the benefits, for example, of creating a working budget. How will it improve your relationship with your spouse? How will it keep you on track with your long-term financial goals? You’d be surprised by how many motivations you can find for even the most seemingly mundane short-term financial goals.
Important Short-Term Financial Goals
Alright, you’re all geared up. You have some strategies for achieving your short-term financial goals, but which goals are worth your while? That’s what we’re going to talk about next, partner.
1. Create a budget.
Surprise! Just kidding. You probably guessed this one.
The truth is that a working budget is the cornerstone of any good financial plan. A proactive budget not only tells you what you’ve spent, but it tells you what you should and should not spend – that’s huge.
Over time, by working your budget, you’ll find ways to cut your expenses and discover new motivations for raising your income.
2. Create a system to pay your bills on time.
Thanks to technology, there are all kinds of ways to pay your bills. You might pay through your bank’s online bill-pay feature, you might pay through the merchants’ websites, you might pay using your debit or credit card, you might pay with checks – or you might pay with your smartphone!
Chances are, you’re using a variety of methods to pay your bills. But do you have a solid system in place? How will you know if your credit card expired and a merchant can’t pull money through auto-pay? Are you trusting the banks and merchants to let you know when your card is about to expire?
Sure, that might work. But perhaps it would be better to put everything into a spreadsheet so you can keep track of all of your bills and how they’re paid. You can also create reminders to pay in your favorite app!
3. Get appropriate insurance policies for your family.
Do you have life insurance? Disability insurance? Umbrella insurance? How about renters insurance? These policies are commonly overlooked.
Find the best insurance and make sure you’re covered.
Short-Term Goal Examples
If you’re looking for real life short-term goal examples, you’re in luck! I polled some fans on the Good Financial Cents Facebook page and here’s some of the best ones:
Joseph Hogue from PeerFinance101.com shares his goals:
Launch 4 short-format investing books as series in December
Publish three posts per week to each blog
Financial goals
Rebalance my portfolio allocation heading into my 40s. Still a year off (and I don’t generally try timing) but after almost 7 years of a bull market, will rebalance a year earlier and shift to new allocation
Buy and renovate another rental property (in Medellin, Colombia)
Life goals
Use social media more for personal connections and less for business (I realize the irony as I post this under my blog account)
reconnect with a couple of high school friends
start a hobby that isn’t related to personal finance or crowd-funding
Kate Dore from Cashville Skyline offers:
Reach $200K net worth by the end of 2025.
Renovate my basement to rent on Airbnb.
Earn $10K side income before next year’s FinCon.
Lose 20 pounds 🙂
Jacob Wade from iHeartBudgets.com shares his ambitious short-term goals:
Finish Kitchen Remodel by end of 2022
Pay Off Student Loans by end of 2022
Launch online course for blog in March/April 2023
MAX out Roth IRA for my wife and I in 2023
Remodel Master bath in 2023
Build deck/patio in backyard in spring 2023
Build raised bed gardens in side yard in April 2023
Get my butt into shape! Start in T-25 workout plan again
Those are some good examples of short-term goals. Here are some other examples you can use to kickstart your own short-term goal ideas:
Financial Goal
Specific
Measurable
Achievable
Relevant
Time-bound
Emergency fund
Save $10,000 in a high-yield savings account
Yes
Yes
Yes
By age 30
Retirement savings
Contribute at least 10% of your annual income to a 401(k) or IRA account, aim for $100,000 in retirement savings
Yes
Yes
Yes
By age 30
High-interest debt
Pay off $5,000 of credit card debt
Yes
Yes
Yes
By age 30
Credit score
Improve credit score to 750 or higher
Yes
Yes
Yes
By age 30
Budgeting
Create a monthly budget, track spending, and save $5,000
Yes
Yes
Yes
By age 30
Education and career
Invest in education or career development
Yes
Yes
Yes
By age 30
Investing
Invest $5,000 in stocks, mutual funds, or other investments
Yes
Yes
Yes
By age 30
Home down payment
Save $20,000 for a down payment on a home
Yes
Yes
Yes
By age 30
Estate plan
Create a will and estate plan
Yes
Yes
Yes
By age 30
Living below your means
Reduce expenses by 10%, increase savings rate by 5%
Yes
Yes
Yes
By age 30
How I Keep Track of Short-Term Goals
My short-term goals fall into two categories: Quarterly (90 day goals) and weekly goals. Each quarter I list out my goals and then make sure my weekly goals stay on point to achieving those goals.
One easy way I’ve recently implemented of staying on point is creating my weekly goals Sunday night. I’l create a note on my iPhone, but that’s only the half of it.
I then take a picture (screenshot) of my weekly goals and make that the lock screen on my phone. That way every time I turn my phone on I see the top 4-5 goals I need to accomplish that week. Here’s how it looks on my phone:
You’ll also notice I list my daily reminders of my Success Habits I do each day.
These include doing The Love Habits with my wife, writing in my Five Minute Journal, knocking out 50 push-ups, praying, and completing my Crush Your Day PDF (from my 10x Goals Accelerator course) before I go to bed.
I’ve taken achieving my short-term goals to the next level because of this powerful combination.
The Bottom Line – Short-Term Goal Examples
So, there you have it! Setting short-term goals is an excellent way to achieve your long-term vision, improve your skills, and build momentum towards success.
By following the SMART framework, you can turn your aspirations into actionable steps that will help you make meaningful progress towards your dreams. Remember, short-term goals don’t have to be boring!
Whether you’re learning a new skill, connecting with new people, or saving up for a fun adventure, short-term goals can be exciting and fulfilling.
So, what are you waiting for? Grab a pen and paper and start setting some short-term goals today!
FAQs – Short-Term Goals
Why are short-term goals important?
Short-term goals are essential for several reasons. They provide a clear direction and purpose, help you break down larger goals into smaller, manageable steps, build confidence and self-efficacy, and improve your overall productivity and performance.
How do short-term goals relate to long-term goals?
Short-term goals are an essential component of achieving long-term goals. They help you break down larger objectives into smaller, more manageable steps and build momentum towards achieving your long-term vision. By setting and achieving short-term goals, you can stay motivated and focused, improve your skills and habits, and make progress towards your ultimate goals.
How do you prioritize short-term goals?
Prioritizing short-term goals depends on your personal preferences, needs, and circumstances. Consider which goals are most urgent, important, or aligned with your long-term vision. Prioritizing goals helps you focus your time, energy, and resources on the most critical objectives and avoid getting overwhelmed or distracted.
How many short-term goals should you have at once?
The number of short-term goals you should have at once depends on your capacity and workload. It’s generally best to focus on a few goals at a time to avoid getting overwhelmed or losing focus. Prioritize your goals based on their urgency, importance, and relevance to your long-term vision.