Sell Archives - Hanover Mortgages

May 8, 2021

Cash Management Account – What It Is, Pros & Cons of Saving This Way

A cash management account is a type of financial account that combines many of the features of checking, savings, and investment accounts into one product.

You get the safety and interest-earning capability of a savings account, the flexibility of a checking account, and the ability to buy and sell securities with an investment account.

Cash management accounts are typically offered by nonbank financial companies, such as brokerage companies. Although each cash management account will differ in its specific terms and features, they share a number of characteristics.

How Do Cash Management Accounts Work?

Cash management accounts combine many of the features of different financial accounts, so it can be hard to understand exactly how they operate.

Store & Protect Large Amounts of Cash

Cash management accounts are designed for people who have a lot of cash to deposit. Like a savings account, they help you keep your money in one place and keep it safe.

The way that cash management accounts do this is through Federal Deposit Insurance Corporation (FDIC) insurance. The FDIC offers up to $250,000 per depositor, per account type, at covered banks. That means if your bank fails and is unable to return your money, the FDIC will reimburse you for up to $250,000 in lost money.

Cash management accounts often have much higher insurance limits. For example, SoFi Money cash management account offers coverage for up to $1.50 million. That’s because SoFi automatically splits your deposits between six different banks, handling all of the management of these accounts on your behalf. You only ever have to work with SoFi when you want to access your money or make a deposit.

Use Your Money When You Need It

Cash management accounts also give you the flexibility of a checking account. Most offer checkbooks or debit cards you can use to make payments or withdrawals from your cash management account.

Depending on the account provider you choose, you may be able to completely replace a checking account with a cash management account. If you get a debit card, checkbook, and the option to make bill payments using your account funds, you’re covered for all of your checking account needs.

Earn Interest

Cash management accounts are able to pay interest like savings accounts do. Most offer interest rates on par with the best savings accounts in the market.

Cash management accounts pay these high rates because they are mostly offered by online financial companies. By avoiding the need to operate physical locations, online companies save a lot of money on overhead costs. That lets them pass more interest on to their customers.

Low Fees

Another benefit of cash management accounts being offered by online financial companies is they have lower fees than traditional bank accounts do. Many have no monthly maintenance fees at all, leaving you free to worry about using your money instead of fees.

Invest Your Funds

Many cash management accounts are offered by investment companies or brokerages. Although they’re usually separate from your brokerage account, it’s easy to link the two accounts. In some cases, there is no separation.

You can submit purchase orders for investments and have the funds deducted from your cash management account. Similarly, proceeds from any sales you make get deposited directly to the account.

This makes your cash management account the hub of your financial life and keeps managing your money easy. You’ll have just one account to monitor with all of your income and expenses flowing through it.

How Does a Cash Management Account Differ From a Checking or Savings Account?

Cash management accounts are neither checking nor savings accounts. They work like a mix of the two, offering the interest of a savings account with the flexibility of a checking account. For day-to-day use, you won’t notice much difference between a cash management account and a traditional bank account.

The big difference is behind the scenes. The company that offers your cash management account opens checking or savings accounts on your behalf at its partner banks. It then handles the management of these accounts for you, moving money in and out of those accounts as needed.

Essential Features of a Cash Management Account

If you’re thinking about opening a cash management account, these are the factors you should compare when looking at your options.

Ease of Access

Cash management accounts are meant to give you the flexibility of a checking account. That means it should be easy to access your money when you need it.

Look for accounts that make it easy to use your money. That includes providing a checkbook, debit card, and online bill payment.

For accounts that offer a debit card, don’t forget to look at the restrictions. Some cash management accounts limit the amount you can withdraw in a day.

You’ll also want to make sure the debit card works on the ATM network you prefer. Some cash management accounts reimburse ATM fees, leaving you free to use any ATM you come across.

Fees

With any financial account, you should keep an eye on the fees you’ll have to pay. There’s no reason to pay a fee when you don’t have to.

Before opening a cash management account, check to see if it has any monthly maintenance fees or minimum balances. Also take a moment to look for other fees might wind up paying, such out-of-network ATM fees.

Interest Rates

Cash management accounts are able to pay interest rates on par with the best savings accounts on the market, but that doesn’t mean they all pay the same rate. Compare the interest rates each account offers. Some will vary with your account balance, while others will be the same regardless of how much you deposit.

If it doesn’t cost you anything and you won’t lose any features that you need, opt for the account with the higher interest rate.

FDIC Insurance Limits

Cash management accounts let you protect your money by splitting your balance among multiple banks. This gives you more than the standard $250,000 insurance offered by the FDIC.

If you have a large balance to deposit to your cash management account, check to see how much of it will be insured by the accounts you’re considering. Some cash management accounts offer more protection than others.

If you’re worried about keeping large sums of cash, look for an account that offers enough insurance to protect your full balance.

Pros of Cash Management Accounts

There are a few reasons you should consider opening a cash management account.

They Make Money Management Simple. With a cash management account, you don’t need a checking or savings account. Many cash management accounts also link to your brokerage account. That makes it easy to keep all of your money in one place for easy management.
They Provide Protection. Cash management accounts keep your money safe with FDIC insurance, which is something investment accounts and money market funds cannot do.
They Have Higher Interest Rates Than Checking Accounts. You’ll earn more interest than you would from a checking account while maintaining the same level of flexibility with your funds.

Cons of Cash Management Accounts

Cash management accounts aren’t without their flaws, and you should be aware of them before opening one.

They Don’t Offer the Best Returns. Many investments, such as stocks, bonds, and mutual funds. offer great returns. There are also certificates of deposit (CDs) and some savings accounts that offer better rates than cash management accounts.
Face-to-Face Customer Service Might Not Be Available. Most cash management accounts are offered by online financial companies. If you need help, you have to call customer support or participate in an online chat. This can be difficult for people who prefer getting help in person or for complicated situations.
You Might Not Get All of the Features You Need. Cash management accounts are meant to combine the features of checking and savings accounts, but some cannot fully replace those dedicated accounts. For example, you might not have the option to make online bill payments from a cash management account, even though that’s a standard feature of checking accounts.

Who Needs a Cash Management Account?

Cash management accounts are a good choice for a few different groups of people.

The first group is people who have a large amount of cash they want to keep liquid but protected. If you have a few hundred thousand dollars you need to have easy access to, you don’t want to tie it up in investments. You also don’t want it sitting in a checking account, slowly losing value to inflation.

And if you exceed the $250,000 FDIC insurance limit, you’ll have to split it between multiple banks if you want all of your money to be insured.

Cash management accounts let you earn a reasonable rate of interest on your cash while maintaining its FDIC protection. You also don’t have to worry about splitting your money between multiple banks.

Cash management accounts are also great for people who want simplicity. All your money is in one place. You don’t have to maintain a separate checking and savings account. If you get your cash management account from the same company you use for your brokerage account, you can keep all of your finances in one place.

Anyone who likes online banking can make good use of a cash management account. If you’re already accustomed to doing your banking through a computer or phone rather than in-person, you’re ready to start using a cash management account.

Where Can I Get a Cash Management Account?

You can get a cash management account from a number of companies.

The first place you should look is your brokerage company. Why not keep all of your money in one place? Many financial firms offer cash management accounts, and your brokerage may even offer perks for customers who maintain a large balance, so using your brokerage for your cash management needs can help you reach balance thresholds.

If your brokerage doesn’t offer a cash management account, you have plenty of alternatives. Many robo-advisors and online investing platforms offer cash management accounts.

For example, Robinhood offers a cash management account you can link to your brokerage account. SoFi Money and Betterment offer both cash management and checking account options.

Alternatives to a Cash Management Account

If you don’t think a cash management account is right for you, you have other options.

If you’re considering a cash management account because you want to combine the features of a checking and savings account, a money market account can help you do that.

Most banks offer money market accounts, which provide the interest rates of a savings account with the check-writing capabilities of a checking account.

The downside is your ability to make withdrawals from the account is limited to six transactions per month. Money market accounts also have higher fees and minimums than cash management accounts.

If you want a cash management account for the safety and returns they offer, you can open a CD. CDs pay more interest than savings accounts and are fully insured by the FDIC up to the $250,000 limit.

The only drawback is you have to commit your deposit to the account for a set period of time. If you make an early withdrawal, you have to pay a fee.

If returns are your primary concern, you should open an investment account instead. You won’t have the safety of FDIC insurance, but you can earn far more money by investing your cash in stocks, bonds, or mutual funds.

Final Word

Cash management accounts offer safety, simplicity, and a solid return on your cash. They’re a great choice for anyone who wants to make managing their money easier, but they don’t have all of the features of dedicated checking and savings accounts.

If you’re looking to store and protect a large sum of cash, whether in anticipation of putting a down payment on a home or keeping it as an emergency fund, a cash management account could be a great option that provides you with the best features of checking, savings, and investment accounts all in one place.

Source: moneycrashers.com

May 7, 2021

What Is a Bond Mutual Fund – Risks & Different Types of This Investment

Investing is an important part of saving for the future, but many people are wary of putting their money into the stock market. Stocks can be volatile, with prices that change every day. If you can’t handle the volatility and risk of stocks or want to diversify your portfolio into a less risky investment, bonds are a good way to do so.

As with many types of investments, you can invest in bonds through a mutual fund, which gives you easy diversification and professional portfolio management — for a fee.

Are bond mutual funds a good addition to your portfolio? Here are the basics of these investment vehicles.

What Is a Bond?

A bond is a type of debt security. When organizations such as national and local governments, government agencies, or companies want to borrow money, one of the ways they can get the loan they need is by issuing a bond.

Investors purchase bonds from the organizations issuing them. Typically, bonds come with an interest rate and a maturity. For example, a company might sell bonds with an interest rate of 5% and a maturity of 20 years.

The investor would pay the company $1,000 for a $1,000 bond. Each year, that investor receives an interest payment of $50 (5% of $1,000). After 20 years, the investor receives a final interest payment plus the $1,000 they paid to buy the bond.

What Is a Mutual Fund?

A mutual fund is a way for investors to invest in a diverse portfolio while only having to purchase a single security.

Mutual funds pool money from many investors and use that money to buy bonds, stocks, and other securities. Each investor in the fund effectively owns a portion of the fund’s portfolio, so an investor can buy shares in one mutual fund to get exposure to hundreds of stocks or bonds.

This makes it easy for investors to diversify their portfolios.

Mutual fund managers make sure the fund’s portfolio follows their stated strategy and work towards the fund’s stated goal. Mutual funds charge a fee, called an expense ratio, for their services, which is important for investors to keep in mind when comparing funds.

Pro tip: Most mutual funds can be purchased through the individual fund family or through an online broker like Robinhood or Public.

Types of Bond Mutual Funds

There are many types of bond mutual funds that people can invest in.

1. Government

Government bond funds invest most of their money into bonds issued by different governments. Most American government bond funds invest primarily in bonds issued by the U.S. Treasury.

U.S. government debt is seen as some of the safest debt available. There is very little chance that the United States will default on its payments. That security can be appealing for investors, but also translates to lower interest rates than other bonds.

2. Corporate

Corporate bond funds invest most of their assets into bonds issued by companies.

Just like individuals, businesses receive credit ratings that affect how much interest they have to pay to lenders — in this case, investors looking to buy their bonds. Most corporate bond funds buy “investment-grade” bonds, which include the highest-rated bonds from the most creditworthy companies.

The lower a bond’s credit rating, the higher the interest rate it will pay. However, lower credit ratings also translate to a higher risk of default, so corporate bond funds will hold a mixture of bonds from a variety of companies to help diversify their risks.

3. Municipal

Municipal bonds are bonds issued by state and local governments, as well as government agencies.

Like businesses, different municipalities can have different credit ratings, which impacts the interest they must pay to sell their bonds. Municipal bond funds own a mixture of different bonds to help reduce the risk of any one issuer defaulting on its payments.

One unique perk of municipal bonds is that some or all of the interest that investors earn can be tax-free. The tax treatment of the returns depends on the precise holdings of the fund and where the investor lives.

Some mutual fund companies design special municipal bond funds for different states, giving investors from those states an option that provides completely tax-free yields.

The tax advantages municipal bond funds offer can make their effective yields higher than other bond funds that don’t offer tax-free yields. For example, someone in the 24% tax bracket would need to earn just under 4% on a taxable bond fund to get the equivalent return of a tax-free municipal bond fund offering 3%.

4. High-Yield

High-yield bond funds invest in bonds that offer higher interest rates than other bonds, like municipal bonds and government bonds.

Typically, this means buying bonds from issuers with lower credit ratings than investment-grade bonds. These bonds are sometimes called junk bonds. Their name comes from the fact that they are significantly riskier than other types of bonds, so there’s a higher chance that the issuer defaults and stops making interest payments.

Bond mutual funds diversify by buying bonds from hundreds of different issuers, which can help reduce this risk, but there’s still a good chance that some of the bonds in the fund’s portfolio will go into default, which can drag down the fund’s performance.

5. International

Foreign governments and companies need to borrow money just like American companies and governments. There’s nothing stopping Americans from investing in foreign bonds, so there are some mutual funds that focus on buying international bonds.

Each country and company has a credit rating that impacts the interest rate it has to pay. Many stable governments are seen as highly safe, much like the United States, but smaller or less economically developed nations sometimes have lower credit ratings, leading them to pay higher interest rates.

Another factor to keep in mind with international bonds is the currency they’re denominated in.

With American bonds, you buy the bond in dollars and get interest payments in dollars. If you buy a British bond, you might have to convert your dollars to pounds to buy the bond and receive your interest payments in pounds. This adds some currency risk to the equation, which can make investing in international bond funds more complex.

6. Mixed

Some bond mutual funds don’t specialize in any single type of bond. Instead, they hold a variety of bonds, foreign and domestic, government and corporate. This lets the fund managers focus on buying high-quality bonds with solid yields instead of restricting themselves to a specific class of bonds.

Why Invest in Bond Mutual Funds?

There are a few reasons for investors to consider investing in bond mutual funds.

Reduce Portfolio Risk and Volatility

One advantage of investing in bonds is that they tend to be much less risky and volatile than stocks.

Investing in stocks or mutual funds that hold stocks is an effective way to grow your investment portfolio. The S&P 500, for example, has averaged returns of almost 10% per year over the past century. However, in some years, the index has moved almost 40% upward or downward.

Over the long term, it’s easier to handle the volatility of stocks, but some people don’t have long-term investing goals. For example, people in retirement are more concerned with producing income and maintaining their spending power.

Putting some of your portfolio into bonds can reduce the impact of volatile stocks on your portfolio. This can be good for more risk-averse investors or those who have shorter time horizons for their investments.

There are some mutual funds, called target-date mutual funds, that hold a mix of stocks and bonds and increase their bond holdings over time, reducing risk as the target date nears.

Income

Bonds make regular interest payments to their holders and the majority of bond funds use some of the money they receive to make payments to their investors. This makes bond mutual funds popular among investors who want to make their investment portfolio a source of passive income.

You can look at different bond mutual funds and their annual yields to get an idea of how much income they’ll provide each year. For example, if a mutual fund offers a yield of 2.5%, investors can expect to receive $250 each year for every $10,000 they invest in the fund.

Pro tip: Have you considered hiring a financial advisor but don’t want to pay the high fees? Enter Vanguard Personal Advisor Services. When you sign up you’ll work closely with an advisor to create a custom investment plan that can help you meet your financial goals. Read our Vanguard Personal Advisor Services review.

Risks of Bond Funds

Before investing in bonds or bond mutual funds, you should consider the risks of investing in bonds.

Interest Rate Risk

One of the primary risks of fixed-income investing — whether you’re investing in bonds or bond funds — is interest rate risk.

Investors can buy and sell most bonds on the open market in addition to buying newly issued bonds directly from the issuing company or government. The market value of a bond will change with market interest rates.

In general, if market rates rise, the value of existing bonds falls. Conversely, if market rates fall, the value of existing bonds rises.

To understand why this happens, consider this example. Say you purchased a BBB-rated corporate bond with an interest rate of 2% for $1,000. Since you bought the bond, market rates have increased, so now BBB-rated companies now have to pay 3% to convince investors to buy their bonds.

If someone can buy a new $1,000 bond paying 3% interest, why would they pay you the same amount for your $1,000 bond paying 2% interest? If you want to sell your bond, you’ll have to sell it at a discount because investors can get a better deal on newly issued bonds.

Of course, the opposite is true if interest rates fall. In the above example, if market rates fell to 1%, you could command a premium for your bond paying 2% because investors can’t find new bonds of the same quality that pay that much anymore.

Interest rate risk applies to bond funds just as it applies to individual bonds. As rates rise, the share price of the fund tends to fall and vice versa.

Generally, the longer the bond’s maturity, the greater the effect a change in market interest rates will have on the bond’s value. Short-term bonds have much less interest rate risk than long-term bonds. Bond funds usually list the average time to maturity of bonds in their portfolio, which can help you assess a fund’s interest rate risk.

Credit Risk

Bonds are debt securities, meaning they’re reliant on the bond issuer being able to pay its debts.

Just like people, companies and governments can go bankrupt or default on their loan payments. If this happens, the people who own those bonds won’t get the money they lent back.

Bond mutual funds hold thousands of bonds, but if one of the issuers defaults, some of the fund’s bonds become worthless, reducing the value of the investors’ shares in the fund.

Bonds issued by organizations with higher credit ratings are generally less risky than those with poor credit ratings. For example, most people would consider U.S. government bonds to have a very low credit risk. A junk bond fund would have much more credit risk.

Foreign Exchange Risk

If you’re buying shares in a bond fund that invests in foreign bonds, you should consider foreign exchange risk.

Currencies constantly fluctuate in value. Over the past five years, $1 could buy anywhere between 0.80 and 0.96 euros.

To maximize returns, investors want to buy foreign bonds when the dollar is strong and receive interest payments and return of principal when the dollar is weak.

However, it’s incredibly hard to predict how currencies’ values will change over time, so investors in foreign bonds should consider how changing currency values will affect their returns.

Some bond funds use different strategies to hedge against this risk, using tools like currency futures or buying dollar-denominated bonds from foreign entities.

Fees

Mutual funds charge fees, which they commonly express as an expense ratio.

A fund’s expense ratio is the percentage of your invested assets that you pay each year. For example, someone who invests $10,000 in a mutual fund with a 1% expense ratio will pay $100 in fees each year.

Expense ratio fees are included when calculating the fund’s share price each day, so you don’t have to worry about having cash on hand to pay the fee. The fees are taken directly out of the fund’s share price, almost imperceptibly. Still, it’s important to understand the impact fees have on your overall returns.

If you invest $10,000 in a fund that produces an annual return of 5% and has a 0.25% expense ratio, after 20 years you’ll have $25,297.68. If that same fund had an expense ratio of 0.50%, you’d finish the 20 years with $24,117.14 instead.

In this example, a difference of 0.25% in fees would cost you more than $1,000.

If you find two bond funds with similar holdings and strategies, the one with the lower fees tends to be the better choice.

Final Word

Bond mutual funds are a popular way for investors to get exposure to bonds in their portfolios. Just as there are many different types of stocks, there are many types of bonds, each with advantages and disadvantages.

If you don’t want to pick and choose bonds to invest in, bond funds offer instant diversification and professional management. If you want an even more hands-off investing experience, working with a financial advisor or robo-advisor that handles your entire portfolio may be worth considering.

Source: moneycrashers.com

May 6, 2021

5 Mind-Altering Wealth Strategies for Successful Business Owners

I’m an entrepreneur and just so happen to be in the business of providing other entrepreneurs with financial advice. But I don’t typically offer up the usual status quo advice that tells you to do things that aren’t always in alignment with growing your business.

My views originate from my experiences and at times are contrarian to what’s being recommended by the usual tax preparer and other financial advisers, because I am in the trenches running a business just like you. I know what it takes to grow a business, make payroll, deal with IRS notices and manage cash flow.

The truth is that being an entrepreneur can be isolating at times as a result of being wrapped up in the day-to-day of running your business. When you are hyper-focused on your business, it is difficult to also be an expert at managing the profits of the company. You may be great at making money, but once it’s made, what do you do with it?

Thinking differently about your company and how you will use it to build wealth is the key to true financial success.

In this article, I’ll outline five ways you can shift your mindset about money to transform how you define and operate your business and approach your financial decisions. It will help you identify what you really want to achieve: A Self-Managing Company®, a term coined by Dan Sullivan of Strategic Coach.

Mind Shift No. 1: Understand that Retirement Savings Plans Don’t ‘Lower’ Your Tax Bill

As a business owner, you are probably time-starved and used to making fast decisions. And you may be tempted to make fast decisions at tax time, especially when your tax preparer suggests that tax-deferred investments are the answer to lower your tax bill and save some money for retirement. Easy enough, right?

This is what I like to call a half-truth. It’s true that you’ll get the deduction for that year’s taxes. But the other half of the story uncovers the problem with the use of SEP IRAs, 401(k)s and other tax-deferred options to “lower” your tax bill. The reality is that you are taking money from your business where you have some level of control and redirecting those dollars into the stock market where you have absolutely no control. The money is tied up until you are 59½ years old and face potentially higher tax liabilities than you previously owed with no access to your cash if it is needed for growing or sustaining your business.

When you own a business, the half-truths you hear from many finance professionals and the mainstream media can at times negatively impact your ability to grow your business and protect your interests. I have found there are other, more productive ways to build wealth outside of your business, beyond the base-level concepts of investing or putting money in an IRA or 401(k).

Mind Shift No. 2: View Your Company Not as Your Job, but as a Tool for Building Your Wealth

If you run a healthy business, you have a long-term strategy. You know what the end-goal is. You think about the business as a whole, rather than focusing on simply the day-to-day tasks.

We’ve all heard the old adage: Work on your business, not in your business. That’s because if you’re working in your business all the time, you’ve only created a job for yourself. The goal is to build systems and develop people to slowly work yourself out of the role you have and allow the business to run on its own. The sooner you shift your mindset to this way of thinking, the sooner you can begin to experience the results.

First, carve out the time in your day to think about your business. Many business owners I talk to don’t do this, because they are buried in the work. Take time to talk to your future self about what you want your life to look like in the future. What would your future self say to you about the decisions and choices you are making? It helps to outline your thinking time, keep a journal of your discoveries, meditate to de-stress, and use the time to reflect on what you are trying to accomplish in the business.

Next, think about your business as a piece of your financial plan. How much time and capital are you investing into the business, and what are you getting out of it? What is your ROI? I’ve found that a business can offer the biggest opportunity to build wealth, and in many cases — depending on your results — it can offer more than what you might get from investing in the market.

Finally, think with the end in mind. At the end of the day, what are you trying to get out of your company? To build wealth through your business, you must identify what will build its value.

Building value revolves around creating a self-managing company, one that runs without you and has a strategy to sustain itself into the future. This allows you to sell it for maximum value, or even create a passive income stream without actually having to work in the business.

Shifting your mindset is important, because you probably didn’t start your business that way. Many business owners don’t, and that’s OK while you’re getting things up and running. But it’s important to remember that what got you started will not get you to the next level and will not build the wealth needed to successfully exit the business.

Mind Shift No. 3: Master Your Cash Flow

I tend to bust a lot of myths when it comes to financial matters, and one of them has to do with cash flow. This is especially important to understand as an entrepreneur. Your cash flow is not there to simply pay your bills. Yes, you must pay your bills of course, but there is more to it than simply making payroll.

Cash flow is a tool to help you build wealth and the value of your company. Healthy cash flow allows for you to control your money, and there are strategies you can explore to help you maximize it.

I recently spoke with a partner of a business who was earning a W-2 salary of $400,000 per year. In working with his CPA, we were able to rework his partnership agreement, removing him as an employee and adding him as a consultant of his own LLC. While this simple strategy reduced his tax liability by $20,000, implementing this strategy was about more than just lowering taxes. This was about cash flow – everything is always about cash flow. By making this little tweak, he increased his cash flow by $1,666 per month.

I’m not a CPA and don’t provide tax advice, but I ask a lot of questions and propose many scenarios for the tax professionals to consider – scenarios that can increase cash flow for business owners. Increasing and optimizing your cash flow should be a top priority for your business.

Mind Shift No. 4: Be Your Own Bank

Companies with cash are able to do many things without having to rely on a bank or other source of funding. In essence, they can be their own bank. Think about it. When you have cash, you can use it to work on your wealth-building strategy. You could buy a company, invest in equipment, hire more people (maybe even a replacement for yourself who can run the company while you collect passive income), buy property, or take advantage of any other opportunity that may come your way.

But there is another way you can be your own bank. Maybe you’ve heard of the concept of “BUILD Banking™,” a cash flow strategy using a specially designed life insurance contract. It’s a strategy that I use personally and with many of my clients who want to have greater control of their cash flow. It frees them from dependence on banks for capital infusions and avoids government red tape when they need to access their money.

For more information about BUILD Banking™, visit www.buildbanking.com.

This strategy enables business owners to grow assets tax-free and have access to those funds whenever they’re needed. In essence, you’re accessing cash when it is needed while having uninterrupted compounding growth for your future.

Mind Shift No. 5: Understand Your Legal Exposures and Protect Yourself

You likely have some form, or forms, of insurance in place for your business. And you may believe that these policies have you covered. Well, they may, and they may not. The coverage you need goes far beyond liability, even extending into punitive damages.

It’s important to work with an insurance professional who specializes in business coverage to ensure that you have the right type of policies and the proper level of protection for your specific business.

There are also certain types of insurance policies (including the BUILD Banking strategy I’ve described above) that can serve a strategic purpose for your business. It’s common, and valuable, for business owners to have a life insurance contract as part of their succession plan, acting as a funding mechanism for the beneficiary to purchase the deceased owner’s share of the business.

Again, you will want to have a collaborating team of insurance professionals who have expertise in their vertical and who understand your business, your goals and what you are trying to accomplish. It’s also a good idea to include your CPA, attorney and financial planner in on those discussions.

These five financial planning tips and mindset shifts will help you use your business as a tool to start building wealth (or build greater wealth). They may be things you’ve never thought about, or things you’ve considered but haven’t been able to implement. Putting these ideas to work can get you on the path to true business success.

Results may vary. Any descriptions involving life insurance policies and their use as an alternative form of financing or risk management techniques are provided for illustration purposes only, will not apply in all situations, may not be fully indicative of any present or future investments, and may be changed at the discretion of the insurance carrier, General Partner and/or Manager and are not intended to reflect guarantees on securities performance. Benefits and guarantees are based on the claims paying ability of the insurance company.

The terms BUILD Banking™, private banking alternatives or specially designed life insurance contracts (SDLIC) are not meant to insinuate that the issuer is creating a real bank for its clients or communicating that life insurance companies are the same as traditional banking institutions.

This material is educational in nature and should not be deemed as a solicitation of any specific product or service. BUILD Banking™ is offered by Skrobonja Insurance Services LLC only and is not offered by Kalos Capital Inc. nor Kalos Management.

BUILD Banking™ is a DBA of Skrobonja Insurance Services LLC. Skrobonja Insurance Services LLC does not provide tax or legal advice. The opinions and views expressed here are for informational purposes only. Please consult with your tax and/or legal adviser for such guidance.

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

Founder & President, Skrobonja Financial Group LLC

Brian Skrobonja is an author, blogger, podcaster and speaker. He is the founder of St. Louis Missouri-based wealth management firm Skrobonja Financial Group LLC. His goal is to help his audience discover the root of their beliefs about money and challenge them to think differently to reach their goals. Brian is the author of three books, the Common Sense podcast and blog. In 2017 and 2019 Brian received the award for Best Wealth Manager and in 2018 the Future 50 St. Louis Small Business.

Source: kiplinger.com

May 6, 2021

6 Garage Sale Setup Tips to Best Display Your Items & Make More Money

Picture this: You’re cruising down the street one day, and you spot two garage sales on the same block. The first has racks of clothes, bins of books and records, and a few high-value items prominently displayed near the curb. The second features jumbled, messy piles and boxes scattered across the yard.

Which one would you stop at?

Presentation is crucial to a successful yard sale. You can and should advertise your sale, but you also want to encourage passers-by to stop and look at your wares. If your sale doesn’t make a good first impression, most will just keep going.

No matter how much good stuff your sale has, it won’t bring in shoppers who can’t see it easily. People passing on foot only have your sale in their sights for a couple of minutes at most, and drivers on the street see it for as little as a couple of seconds.

To draw them in, you must show off your sale items so effectively their first glimpse convinces them to take a closer look.

Garage Sale Tips for Presentation

A garage sale has two purposes. It’s a way to declutter your home and bring in some extra cash. And the best way to achieve both goals is to attract as many customers as possible.

When you’re trying to draw in shoppers, pricing isn’t the most crucial factor. Yes, yard sale shoppers love bargains, but if your garage sale items don’t look appealing, no one will even stop to look at the price tags.

So before you even get out the price stickers, you need to spend some time thinking about how to set up your yard sale display to catch the eye.

1. Clean Your Items

Suppose you’re shopping yard sales looking for outdoor furniture. You come across a set that looks sturdy, but the chair arms and backs are coated in grime and their cushions are mildewy. Would you buy them or keep looking for a set in better condition?

That illustrates how important cleaning is. Something that’s otherwise in perfectly good shape becomes a complete turn-off for buyers if it’s covered in dirt. Even if you haven’t used something in years, it can come out of storage sporting a thick coat of dust that makes buyers pass it over.

So before you even think about how to display pieces, give each of them a quick touch-up with a dusting cloth. If anything is especially dirty, take the time to scrub it down with soap and water.

Some garage sale items need more specific cleaning treatment. Run clothes through the washer and dryer to remove dirt and odors, and give shoes a quick polish to remove scuff marks. If you have purses or other bags to sell, clean out dirt and debris from their interiors (and while you’re at it, make sure there’s nothing of value left inside).

2. Show Off the Good Stuff

Shoppers get their first glimpse of your garage sale from either the street or the sidewalk. If all they can see in that first look is a bunch of cheap junk, many will keep moving instead of stopping to browse.

There may be some real gems hidden toward the back of your yard or garage, but many prospective buyers will never see them.

If you want to hold a successful garage sale that attracts as many buyers as possible, put your most appealing merchandise front and center. In my experience, the best yard sale items for attracting buyers include:

Antiques of any kind — furniture, houseware, jewelry
Appliances
Board games
Clothing and accessories in good condition, such as shoes and purses
Electronics like TVs and stereos
Furniture
Musical instruments
Sporting equipment, including bicycles and camping gear
Tools, including garden tools like lawn mowers

In general, large items have more curb appeal than small ones. For one thing, they’re easier to see from the street. Also, little things like cheap toys and kitchen utensils aren’t that expensive to buy new, so they don’t offer the potential for a major bargain.

Another helpful strategy is to display merchandise likely to appeal to men, such as golf clubs or power tools, as close to the road as possible. In my experience, women are more likely to stop at a garage sale than men, so you don’t need to go to as much effort to reel them in.

By displaying things that typically appeal to them most prominently, you’ll attract men as well as women to your sale.

3. Group Like Items Together

Once you’ve drawn customers to your sale, you want to keep them there as long as possible. It might seem like the way to do that is to place everything randomly so shoppers looking for specific finds have to hunt through every table at the sale to discover them. But that strategy is likely to backfire.

As a shopper, I always find it frustrating when a yard sale has no clear layout. If I’m looking for something in particular, such as clothing or books, I want to see all the clothing or books available in one place. If they’re scattered across all the tables at the sale, I’m likely to get frustrated and walk away.

To make shopping easy for your buyers, group similar items together. Make one table for clothing, one for books, one for housewares, and one for toys, for example. That way, people can go directly to the table that interests them and start browsing.

If you have a lot of one type of product, sort it into narrower categories, such as children’s books and adult books.

To make it easier for yourself, sort your merchandise into boxes by category before your sale. On the day of the sale, you can simply bring each box to its own table and start laying everything out.

4. Keep Everything Visible

The easiest way for you to sort goods into categories is to leave them in their boxes. But that isn’t easy for your buyers. No one wants to bend over a box pulling out one baby onesie after another until they find the size and color they’re after.

Haphazard piles of stuff aren’t appealing either. I’ve walked away from more than one rummage sale because all the clothes were in massive, unsorted piles on the tables. Digging through them all to find the few outfits in my size would have taken hours with no guarantee I’d find anything I liked.

To make your sale appealing, lay your wares out in ways that make them easy to see at a glance. There are multiple ways to display different types of merchandise, depending on how much of it you have and what condition it’s in.

Clothing

The best way to display clothing is on hangers on a portable clothes rack. That keeps garments off the ground and makes them easy to sort through. If you don’t have a clothing rack, look for a makeshift alternative, such as an old ladder or a sturdy clothesline strung between two trees.

If there’s no way to hang clothes, the next best option is to arrange them in neatly folded piles on a table. That’s also a suitable way to display clothes for babies and small children.

But note your neatly folded and stacked garments will invariably get unfolded and strewn about as the day goes on, so you have to tidy up your piles from time to time.

Whichever method you choose, try sorting clothes by size, type, and gender. That makes it still easier for buyers to find what they want. A nice added perk is to display garments like coats with their extra buttons if you still have them.

Accessories

There’s nothing more frustrating than finding one shoe in your size and then having to hunt around for the other before you can try them on. You can significantly increase your shoe sales by taking the time to line pairs up together, either on a table or on a sheet or blanket on the ground.

You can display purses and bags on tables, on the ground, or neatly lined up in boxes. Or if you have a large tree handy, you can make an eye-catching display by hanging handbags from its limbs.

Jewelry is a high-value commodity, so it’s worth making an extra effort to display it well.

Wrap a piece of cardboard in fabric, then stick in pins or small nails to hang necklaces, earrings, and bracelets. You can pin brooches directly to the fabric. If you have coordinating pieces, such as necklace-and-earring sets, display them together.

Books & Recordings

Books are easiest to see if they’re arranged side by side with their spines facing out so people can view the titles at a glance.

The easiest way to accomplish that is to line them up on a bookcase or shelf. But don’t use a bookcase you’re also planning to sell because if someone buys it, you’ll have to remove all the books in a hurry and find a new location for them.

You can also display books by lining them up in a box with their spines facing up. Or if you have a smaller selection of books, you can fan them out on a table faceup so shoppers can see their covers.

Whatever you do, don’t stack books in boxes or pile them on tables so shoppers have to lift each one out of the way to see what’s below it. For all but the most dedicated book buyers, that’s simply too much work to be worth it.

These same display ideas work well for audio or video recordings, including CDs, DVDs, video game cartridges, records, and cassettes. (Yes, there are still people who have held onto their old boomboxes and are willing to buy tapes if they’re cheap enough.) Make the titles visible, and don’t force your buyers to dig.

Furniture & Home Goods

When displaying furniture at a yard sale, consider what type of buyer it would appeal to.

Place sturdy pieces suitable for families near the street, where they’ll draw buyers in. Older, worn-out pieces might appeal to students furnishing a dorm room or DIY fans looking for pieces to make over. Display these pieces farther back but with prominent labels indicating their low prices.

Antique furniture creates a bit of a dilemma. On one hand, it’s an appealing item that can attract shoppers. However, if you place a lightweight piece too close to the street, an ambitious thief could snatch it when you turn your back. Large and heavy furnishings can go in the front, but it’s best to place smaller ones close to the checkout where you can keep an eye on them.

For smaller home decor, consider maximizing its visual appeal by creating little vignettes.

For instance, you can toss a bedspread over a couch to show off its pattern and add a couple of matching throw pillows. To sell a set of dishes, lay out one whole place setting on a table, complete with a napkin and flatware, and keep the rest stowed in a box.

Finally, if you’re selling old electronics, make sure you have all their parts — remotes, cords, and the manual if you have it — bundled along with the primary equipment. You can wrap them up and stash them in a clear plastic bag taped to the side.

Customers will appreciate being able to see at a glance that the equipment has all the necessary parts. And if they want to test the device to make sure it works, all the pieces they need are available. Consider running an extension cord to the house for testing purposes or at least having one handy for shoppers to use.

5. Make Space for Everything

Ideally, most of the goods at your yard sale should be on tables, so shoppers don’t have to bend down to look at them. If you don’t have enough tables to display your wares, borrow from neighbors or friends.

Also, look for ways to create more “table” space from scratch. For instance, you can lay plywood over a pair of sawhorses, milk crates, or even cardboard boxes. You can also use any naturally elevated surfaces in your yard, such as porch steps or retaining walls.

If you’ve tried all these tricks and still don’t have enough table space for everything, prioritize. Reserve your table space for high-value merchandise you really want buyers to see and delicate pieces that could break if left on the ground. Everything else can go on blankets or tarps.

Set out comfortable chairs for yourself and any helpers so you don’t have to spend the whole day on your feet. Set them near a small table or another surface you can use for making change and bagging purchases.

6. Promote Your Sale

No matter how good your yard sale looks, it won’t attract customers if no one comes close enough to see it. That’s why even the best yard sale needs adequate signage.

Before putting up signs, check to see if your town has any regulations about them.

For instance, it might regulate how many signs you can put up, how large they can be, what materials you can use, and where you can display them. It may also have rules about how long before the sale you can put signs up and how long you have after the sale to take them down.

While you’re at it, check all the other local regulations.

Some towns require you to get a garage sale permit, and others limit you to a certain number of sales per year. Putting up signs puts you on the local authorities’ radar, so make sure you’re not running afoul of any rules. Otherwise, the fines could eat into if not exceed your profits.

Once you have any necessary permits and are clear about the signage rules, it’s time to set about making them.

Good yard sale signs are large, clear, and easy to read. Include the address as well as an arrow to point passing motorists in the right direction. If your town allows it, hang signs at all the busiest intersections near your house. From there, leave a trail of signs all the way to your house, pointing shoppers the right way at every turn.

Ensure your yard sale signs include the date and times of your sale as well. I always find it frustrating to see a sign that says, “garage sale,” with an address and no date because I never know if the sale is coming up, currently going on, or already over.

Listing the date and taking down signs once the sale is over ensures shoppers don’t show up on the wrong day.

You can advertise your sale online as well. Sites like Garage Sale Finder exist specifically for this purpose. Many local Craigslist groups have a section for garage sale advertising as well. Other places to put the word out include social media sites like Facebook and Nextdoor.

Final Word

A well-organized garage sale takes more work to set up than a haphazard one.

But putting in this extra effort maximizes the chances your sale will succeed once it gets going. Shoppers are more likely to stop for an attractive sale, and those who stop are more likely to stick around long enough to find something they want to buy.

By taking the time to display your goods well and price them right, you can host a great yard sale instead of just an OK one. And that helps you turn more of your clutter into cash.

Source: moneycrashers.com

May 6, 2021

What Is a Security – Definition & Types That You Can Invest In

Securities are one of the most important assets to understand when you’re starting to invest. Almost every investment you can make involves securities, so knowing about the different types of securities and how they fit in your portfolio can help you design a portfolio that fits with your investing goals.

What Is a Security?

A security is a financial instrument investors can easily buy and sell. The precise definition varies with where you live, but in the United States, it refers to any kind of tradable financial asset.

Securities may be represented by a physical item, such as a certificate. Securities can also be purely electronic, with no physical representation of their ownership. The owner of a security, whether it is physical or digital, receives certain rights based on that ownership.

For example, the owner of a bond is entitled to receive interest payments from the issuer of that bond.

Types of Securities

There are many different types of securities, each with unique characteristics and a different role to play in your portfolio.

Stock

A stock is a security that represents ownership of a company.

When a business wants to raise money — for example, to invest in expanding the business — it can issue stock to investors. Investors give the business money and receive an ownership interest in the company in exchange.

The number of shares that exist in a company determine how much ownership each individual share confers. For example, someone who owns one share in a company with 100 shares outstanding owns 1% of the company. If that business instead had 100,000 shares outstanding, a single share would represent ownership of just 0.001% of the business.

Investors can easily buy and sell shares in publicly traded companies through the stock market. Shares regularly change in value, letting investors buy them and sell them for either a loss or a profit. Owning stock also entitles the shareholder to a share of the company’s earnings in the form of dividends if the company chooses to pay them, and the right to vote in certain decisions the company must make.

Bonds

A bond is a type of debt security that represents an investor’s loan to a company, organization, or government.

When a business or other group wants to raise money but doesn’t want to give away ownership, it can instead borrow money. Individuals typically borrow money from a bank, but companies and larger organizations often borrow money by issuing bonds.

When an organization needs to borrow money, it chooses an interest rate and the amount that it wants to borrow. It then offers to sell bonds to investors until it sells enough bonds to get the amount of money it wishes to borrow.

For example, a company may decide to issue $10 million worth of bonds at an interest rate of 5%. It will sell bonds in varying amounts, usually with a minimum purchase requirement, until it raises $10 million. Then, the company stops selling the bonds.

With most bonds, the issuing organization will make regular interest payments to the person who owns the bond. The payments are based on the interest rate and the value of the bond purchased. For a $1,000 bond at an interest rate of 5%, the issuer might make two annual payments of $25.

The bonds also come with a maturity date. Once the maturity date arrives, the bond issuer returns the money it raised to the bondholders and stops making interest payments. For example, when it matures, the holder of the $1,000 bond might receive a final interest payment of $25 plus the $1,000 they initially paid to buy the bond.

Interest payments and returned principal go to the person who holds a bond on the payment date, not necessarily the original purchaser. This means that people who own bonds can sell them to other investors who want to receive interest payments. The value of a bond will depend on how much time is left until it matures, the bond’s interest rate, the current interest rate market, and the bond’s principal value.

Money Market Securities

Money market securities are incredibly short-term debt securities. These types of securities are similar to bonds, but their maturities are generally measured in weeks instead of years.

Because of their short maturities and their safety, investors often see money market securities and investments in money market funds as equivalent to cash.

Mutual Funds and ETFs

Mutual funds and exchange-traded funds (ETFs) are both securities that purchase and hold other securities. They make it easier for investors to diversify their portfolios and offer hands-off management for investors.

For example, a mutual fund may purchase shares in many different companies. Investors can purchase shares in that mutual fund, which gives them an ownership stake in the different shares that the fund holds. By buying shares in one security — the mutual fund — the investor gets exposure to many securities at once.

The primary difference between mutual funds and ETFs is how investors buy and sell them. With mutual funds, investors place orders that settle at the end of the trading day. That makes mutual funds best for long-term, passive investment. ETFs are traded on the open market, so investors can buy them from or sell them to other investors whenever the market is open. This means ETFs can be used as part of an active trading strategy.

There are many different types of mutual funds and ETFs, each with its own investing strategy. Some mutual funds aim to track a specific index of stocks. Others actively trade securities to try to beat the market. Some funds hold a mix of stocks and bonds.

Mutual funds and ETFs are not free to invest in. Most charge fees, called expense ratios, that investors pay each year. For example, a fund with an expense ratio of 0.25% charges 0.25% of the investor’s assets each year. Fees vary depending on the fund provider and the fund strategy.

Preferred Shares

Preferred shares or preferred stock are a special kind of shares in a company, which have different characteristics than shares of common stock.

Compared to common stock, preferred shares typically:

Have priority for dividends over common stock
Receive compensation before common shares if a company is liquidated
Can be converted to common stock
Do not have voting rights

Derivatives

Derivatives are securities that derive their value from other securities rather than any value inherent to themselves.

One of the most common types of derivatives is an option, which gives the holder the right — but not the requirement — to buy or sell shares in a specific company at a set price. Derivatives are more complex financial instruments than generally aren’t suitable for beginners because they can be confusing and come with elevated risk.

How Securities Fit in Your Portfolio

Most investors use securities to build the majority of their investment portfolios. While some people may choose to invest solely in assets like real estate rather than securities like stocks and bonds, securities are highly popular because they make it easy for people to build diversified portfolios.

The mix of investments you choose is called asset allocation. Each type of security fits into an investment portfolio in different ways.

The Role of Stocks

For example, stocks generally offer high volatility and some risk, but higher rewards than fixed-income securities like bonds. People with long-term investing plans and the risk tolerance to weather some volatility may want to invest in stocks.

Within stocks, investors often hold a mixture of large-cap (large, well-known companies) and small-caps (smaller, newer businesses). Typically, larger companies are more stable but offer lower returns. Small-caps can be risky but offer greater rewards.

Large-caps often pay dividends, which are regular payments to shareholders. This makes them popular for people who want to produce an income from their portfolio but who don’t want to shift too heavily into safer, but less lucrative investments like bonds.

Pro tip: Earn a $30 bonus when you open and fund a new trading account from M1 Finance. With M1 Finance, you can customize your portfolio with stocks and ETFs, plus you can invest in fractional shares.

The Role of Bonds

By contrast, bonds are good for people who want to reduce volatility in their portfolios. A retiree or someone who wants to preserve their portfolio’s value instead of growing it might use bonds.

Bonds experience much less volatility than stocks, with their values changing primarily with changes in interest rates. If rates rise, bond values fall. If rates fall, bond values rise.

If you hold individual bonds and don’t sell them, you can only lose value from the bonds if the issuer defaults and stops making payments. That means that bonds can provide a predictable return, assuming you can hold them to maturity.

Bonds also make regular interest payments, often twice annually, making them very popular for income-focused investors.

The Role of Mutual Funds

A huge number of everyday investors opt to invest in mutual funds and ETFs instead of buying individual stocks and bonds. These funds hold dozens or hundreds of different stocks and bonds, making it easy for investors to diversify their portfolios. There are also many different funds that follow different investing strategies, meaning that almost everyone can find a mutual fund that meets their needs.

One of the most popular types of mutual funds is the target-date fund. These funds reduce their stock holdings and increase their bond holdings as time passes and gets closer to the target date. This makes them an easy way for investors to reduce risk and volatility in their portfolio as they get closer to needing the money,

For example, someone who wants to retire in 2062 might invest their money in a target date 2060 or 2065 fund. In 2020, the fund might hold a 90/10 or 80/20 split of stocks and bonds. By 2060, the fund will have reduced its stock holdings and increased its bond holdings so that its portfolio is a 40/60 split between stocks and bonds.

The Role of Derivatives

Derivatives are designed for advanced investors who want to use more complex strategies, such as using options to hedge their portfolio’s risk or to leverage their capital to produce greater gains.

For example, a trader could use options to short a stock. Shorting a stock is like betting against it, meaning the trader earns a profit if the share price falls. On the other hand, if the share price increases, the trader will lose money.

These are best used by advanced investors who know what they’re doing. Derivatives can be more volatile than even the riskiest stocks and can make it easy to lose a lot of money. However, if they’re used properly, they can be a safe way to produce income from a portfolio or a hedge to reduce risk.

Final Word

A security is the basic building block of an investment portfolio. Most assets that people invest in — like stocks, bonds, and mutual funds — are securities. Each type of security has different features and plays a different role in an investor’s portfolio.

Many investors succeed by investing in mutual funds or ETFs, which give them exposure to a variety of securities at once. If you want an even more hands-off investing experience, working with a robo-advisor or financial advisor can help you choose the best securities to invest in.

Source: moneycrashers.com

May 5, 2021

Declutter Your Apartment: What’s OK to Throw Away!

Do you ever feel that a second opinion on what to dump would seriously help your decluttering efforts? Well, we’ve got words of wisdom from the Clutter Police to guide your toss-it-out efforts.

Read on for the gospel on what to get rid of, and when!

Clothes and shoes you haven’t touched in two years
Opinion is divided whether the threshold here should be one year or 18 months. But the fact is that some winters aren’t as cold as others, or certain springs as wet, so a true cycle to test whether or not you’re done with an item is two years. After that time, your excuses have run out: you have to admit that, acts of nature and fashion aside, it’s time to throw away the albatross in question. Now find a good consignment shop to make some money on that past fashion, or donate what you just can’t sell.

Paper, paper and more of it
If there’s a single type of item gumming up our homes and lives, it’s paper. Why not get rid of old magazines that you’ve been swearing you’ll cut articles from for years, and shred financial records and receipts past their required “keep date”? Go through your kids’ art work and select just a few favorites you can’t part with – then get rid of the rest to make room for their next great creations.

Books you will never read
This one can be tricky for those of us who hate, on principle, to part with a book we were once sure would be great. Start by purging college novels and texts you haven’t looked at since your school years. Now remove any book you bought in the last three years that you pass over every time you go to reach for your next read. Be brave! And keep in mind that many book stores carry used inventory and will take books for store credit, if not cash.

Old vitamins, medicines and makeup
We all have shelf and drawer clutter that we just stop seeing after a while. Go through old items you store away like medicine bottles and makeup, checking for expiration dates. For makeup, two years is a reasonable throw-away date for most items. (Mascara has the shortest lifespan, at three months.)

Project paraphernalia
Whether you’ve been an aspiring beader or have a dozen “fix-it” items in your closet, it may be time to say goodbye to good intentions that just aren’t going to bear creative fruit. If you have a craft that you’ve neglected for several years or just never picked up, pass on the supplies to someone in your family who will really use them, or donate it all to a senior facility to people who will appreciate the gift.

These areas are just a few that will benefit from your courageous clutter management efforts. Go forth into your apartment, find the areas that are clogging up, and get rid of what’s not being used. Before long, you’ll channel the Clutter Police as you confidently throw away whatever’s been weighing you down!

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Source: apartmentguide.com

May 5, 2021

8 Tips for How to Sell on Craigslist

Most of us have probably taken a deep, exasperated breath while surveying our homes, wondering how we managed to accumulate so much clutter. But there might be a way to turn that clutter into cash. It comes down to one word: Craigslist.

8 Tips for Selling on Craigslist

Selling on Craigslist seems easy, but it requires some know-how to get the intended result and money in your wallet. We scoured the Internet for the best tips.

So list that chair you’ve always hated. We’re here to help you find success and sell more of your items on Craigslist.

1. Take Photos That Work

Ever seen a Craigslist listing with an object you can’t quite make out? Is that a nightstand or a coffee table? Are they selling the whole dining room table set or just one chair?

A good photo can make your listing stand out while a bad photo has the potential to shut down any business. Take a good photo by posing your object in a well-lit spot, whether it’s in natural light or a warm artificial glow, and focus on the details that make your object special. Only photograph what you’re selling — leave extraneous things out of the picture.

2. It’s In the Details

Your listing can’t simply be a photo and the name of the object. You need a description and any relevant details — think dimensions or number of items or even age of the item, if relevant. It’s ideal for your listing to answer all of the questions a potential buyer might have so they don’t have time to really agonize over their purchase.

3. Tell the Truth

That being said, it’s important to be honest in your listing. If your couch has stains or your wooden dresser is chipped, add images that show the damage. Point that out to potential buyers in your description. People will be more likely to buy an item when they feel they are getting an upfront understanding of it.

One example: do not post the catalogue image of your piece of furniture from when it was brand new. (People do this.) Take a photo of your furniture piece as is — after all, that’s what you’re selling.

4. Be Simple

While you should absolutely share relevant details, there’s no need to tell the story of how your kids bounced around on these couch cushions or how the table was passed down in the family generation after generation. Potential buyers know they’re browsing for a used object, but they don’t want the legacy that comes with it. They want it to feel like their own.

And stick to simplicity in your listing title. Potential buyers often search for specific objects — trash cans or mirrors — and they likely won’t be searching with various adjectives.

5. Offer Delivery

Potential buyers love it when Craigslist sellers offer delivery. It’s an added perk and makes things easier, especially when the site caters to people from all over. Make sure to add a higher cost for delivery — whatever seems worth it to you based on location — and be safe. Bring someone along with you when you go to deliver.

6. The Price is Right

It really does boil down to whether the asking price is right. Craigslist is known for sellers that practically give items away, so it’s better to price your listing lower rather than higher. Interest is always key, and if you price it too high, you may have no takers.

But make sure you price your item at a level with which you’re comfortable. It’s not worth giving something away if it has sentimental value and you think it can go for more.

7. Reach Out to Your Network

Word of mouth is a powerful tool. If you think you might know someone in your social network — whether that’s Twitter, Facebook, Instagram or more — who might be interested in what you’re selling, share it on those forums.

And better yet, if you have a specific buyer in mind, feel free to be direct and share your listing with friends and family. If it doesn’t work for them, they may know the right person.

8. Always Be Safe

Always remember that you are dealing with strangers online on Craigslist. If someone is coming to your house or you are going to theirs, have a friend with you. Don’t assume that you will be fine if you are alone. Entering a stranger’s house or allowing a stranger to enter yours always comes with risk. It’s better to be prepared and meet in a public place if that is the only way the meeting can take place.

Writer Elizabeth Djinis is a contributor to The Penny Hoarder, often writing about selling goods online through social platforms. Her work has appeared in Teen Vogue, Smithsonian Magazine and the Tampa Bay Times.

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Source: thepennyhoarder.com

May 4, 2021

5 Tips for Approaching the Open House

In this article:

For decades, sellers and their agents have been using open houses to help generate interest in their listings. Open houses give the general public the chance to view a home without scheduling a private showing. While open houses do get a lot of curious neighbors and casual browsers, they can be a good opportunity for serious buyers to decide if a home is worth pursuing further, or a way to get a better grasp on neighborhood home values.

In fact, 59% of home buyers attended an open house during their shopping process last year and 43% of buyers said attending the open house was very or extremely important to determining if the home was right for them.* On average, home buyers attended 2.6 open houses before buying.

Whether you’re a sincere buyer or simply curious about the inside of a home, you should know how open houses work and understand how you can be a good open house attendee.

Note: If open houses are restricted or unavailable due to public health concerns, work with your agent to arrange a private tour or video tour. All Zillow-owned homes include a self-tour option — just use our app to unlock the door and tour at your convenience.

What is an open house?

An open house is an event during which potential buyers can tour a home that’s on the market. It’s usually hosted by the seller’s listing agent, or by the seller themselves, in case of a for-sale-by-owner (FSBO) listing. Open houses usually take place on weekends, during a set range of hours — typically midday.

Open house benefits for buyers

No scheduling required: Unlike a private showing, you don’t need to set up a specific appointment to see a home. Simply show up during the open house hours and view the home at your own pace.

Scope out the competition: If you’re interested in a home, attending the open house can help you gauge interest from other buyers. This can be helpful when determining how quickly you need to submit an offer and how much you should offer.

Understand current home values: Seeing what homes are selling for in your area and what you can buy at a particular price point can be helpful if you’re just starting your search.

Redefine your nonnegotiable home features: Checking out homes in person can help you redefine your list of must-haves: Do you really need that extra bedroom? What does a backyard of this size really look like?

How do open houses work?

Not every seller or listing agent will hold one, but here’s the typical process for sellers setting up an open house:

The seller and their agent determine a day and time for the open house.
The agent lists the open house on the local MLS.
The agent advertises the open house on social media, online and with print ads or flyers.
The agent prepares for the open house — purchasing refreshments, printing flyers, setting up signs and adding little touches to make the home feel welcoming to buyers. (Yes, as a shopper, you can eat the cookies.)
The agent hosts the event, greeting buyers and answering questions about the property and community.
Buyers remove their shoes, tour the home, take pictures and video (if allowed) and jot down important notes.
Any buyer who liked the house will contact their own agent. They’ll then set up a private showing to see the home again or they’ll submit an offer right away — the latter is common in fast-moving real estate markets.

Who hosts an open house?

The person hosting an open house could be any one of the following:

Listing agent: As the person hired to sell the home, the listing agent should be an expert on the property.
Listing agent’s team member or associate: A busy listing agent may also send another agent in their place — either someone on their team or another agent in their office. They should be experts in the local market, but may not be as familiar with the individual home.
Homeowner: If a home is for sale by owner (FSBO), the homeowner will be hosting their own open house. They’re undoubtedly the expert on the home, but their local market expertise may be limited.

How to prepare for an open house

There are times when you might just stumble upon an open house while you’re on a walk or running errands. But if you’re intentionally looking for open houses as part of your home-buying strategy, try these tips.

Seek out relevant open houses

If you plan to visit multiple open houses in one day, make sure you’re focusing on listings that fit your criteria for budget and location. It’s not worth wasting time looking at homes outside your budget or those that are too far from your work or school.

Tip: With Zillow’s home search tool, buyers can filter by homes with upcoming open houses (this filter can be applied in addition to other search filters like price, bedrooms, bathrooms, square footage and location). When you use the open houses filter in conjunction with filters for your other criteria, you can easily find the right open houses for your search.

You can also tour most Zillow-owned homes any time between 6 a.m. to 8 p.m., any day of the week — just select the tour option on the listing. Although the listing agent will not be present, you can avoid a busy open house and rest assured the property is in move-in ready condition.

Do research on the market beforehand

With help from your agent or on your own, find out how each home you’re planning to visit stacks up against others nearby. Is the price in line with similar listings in the area? Are there any defects? Has it gone under contract recently and then returned to the market? Are there a lot of other interested buyers? Has it been sitting on the market for a long time? (“Days on market” is an indicator of a stale listing, but the standard number of days on market can vary based on where you live.)

Stay open-minded

If you’re searching on a tight budget in a hot neighborhood, there’s a good chance that the home that fits the bill will need some TLC. Fortunately, attending an open house can give you a better idea of the home’s condition and potential, while also giving you the opportunity to ask renovation-related questions — e.g., the location of load bearing walls and the details of local regulations.

How to attend an open house

Now that you’ve done your research and are prepared to add some open houses to your home search, here’s what you should do once the day arrives.

Ask questions

An open house is your best opportunity to ask the listing agent (or their associate) your questions — don’t be shy. Ask questions that you wouldn’t be able to answer just by reading a home’s listing description, such as:

What are the HOA restrictions?
Has the seller done a property tax appeal?
Have there been any recent renovations or repairs?

Tip: If you’re not currently working with an agent and you ultimately decide you aren’t interested in a particular home you tour, the open house could help you see if the listing agent might be the right person to represent you — many agents represent both buyers and sellers.

Be honest

If anyone other than the listing agent or the homeowner is hosting the open house, they’re likely an agent hoping to find potential buyer clients. If you’re already working with an agent (or if you have no real interest in buying), be honest.

Check for damage and disrepair

Professional or edited photos can make a home look a lot better online than it is in person. At an open house, take the opportunity to closely evaluate a home’s condition and take note of any potential defects that would factor into your offer price.

Assess the windows: Look for flaking paint, misaligned sashes and condensation due to air leaks. These could be signs of windows that need replacement.

Check for water damage: Look for warped baseboards, ceiling stains and musty smells.

Make note of cracks: Noticeable cracks in the ceiling or drywall could indicate foundation issues.

Test functions: Open cabinets, doors and drawers. Run the faucets. Check the water pressure. An open house is a good opportunity to make sure every part of the home is in good working order.

Gauge potential renovation needs: Home improvements can really add up. As you walk through a home, keep an eye out for urgent renovation needs like floors, fixtures or large repainting projects.

Open house tips for buyers

Whenever you attend an open house, put yourself in the seller’s shoes — you’re letting a bunch of strangers walk through your home while you’re not there. While every seller wants their open house to net a buyer, they also want to keep their home safe and their furnishings free of damage.

Do

Take off your shoes or wear booties if requested.
Greet the host and provide your name.
Sign in if necessary or requested (this is a safety issue for the seller and their agent).
Take notes on your phone about your likes, dislikes and follow-up questions.
Ask if you can capture a video (if the listing doesn’t already include a video).
Respect other buyers and guests.
Wait for others to exit a room before you enter.
Provide feedback if requested.
Thank the person hosting the event.

Don’t

Refuse to comply with an agent or homeowner’s house rules.
Criticize the home or the owner’s style.
Listen in on other visitors’ conversations.
Touch the owner’s belongings.
Let kids run around without supervision.
Bring food or beverages in (except water).
Reveal information that would compromise your negotiating power, like your budget or level of interest in the home.
Bring pets.

*Zillow Group Consumer Housing Trends Report 2019 survey data

Source: zillow.com

May 4, 2021

Stock Market Today: Dow Leads in a Mixed May Start for Stocks

The Dow Jones Industrial Average kicked off the month with a 0.7% gain to 34,113 on Monday that came despite a weaker-than-expected Institute of Supply Management manufacturing report.

Supply bottlenecks resulted in an April reading of 60.7 – a slower rate of expansion than March’s 64.7 reading indicated, but expansion nonetheless.

“Although the composite was a fair bit below expectations (Barclays 64.5; consensus 65.0), the decline comes off of a robust March reading that was the highest since 1983,” says Barclays economist Jonathan Millar. “Indeed, components of the composite continue to point to very strong growth, which comes as no surprise, given highly favorable demand conditions amid fiscal stimulus, easing of social distancing restrictions, and ongoing progress in vaccinations.”

We’re glad to see that at least some investors heeded our advice to ignore the urge to “sell in May and go away.” But stocks weren’t exactly up across the board. The Nasdaq Composite (-0.5% to 13,895) struggled, thanks to weakness in mega-cap tech and tech-esque names such as Tesla (TSLA, -3.5%), Amazon.com (AMZN, -2.3%) and Salesforce.com (CRM, -2.9%).

“For the first time in a while there is a clear value/cyclical bias while growth/tech is under pressure,” says Michael Reinking, senior market strategist for the New York Stock Exchange. “Tech wobbled last week despite blowout numbers from the mega-cap stocks. This is especially concerning as the rate environment remains in check.”

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Other action in the stock market today:

The S&P 500 gained 0.3% to 4,192.
The small-cap Russell 2000 also finished in the black, up 0.5% to 2,277.
Berkshire Hathaway (BRK.B, +1.7%) held its 2021 annual shareholder meeting this weekend. Chairman and CEO Warren Buffett and Executive Vice Chairman Charlie Munger addressed a number of topics, including trimming Berkshire’s stake in Apple (AAPL) in Q4 2020. “It was probably a mistake,” said Buffett, adding that AAPL’s stock price is a “huge, huge bargain” given how “indispensable” the company’s products are to people. Also of note: Berkshire grew fourth-quarter operating income by 20%, to $5.9 billion, while cash grew 5% to $145.4 billion.
Domino’s Pizza (DPZ, +2.6%) was a notable winner today. The pizza chain revealed an accelerated stock buyback program, saying in a regulatory filing that it will pay Barclays $1 billion in cash for roughly 2 million DPZ shares.
U.S. crude oil futures jumped 1.4% to end at $64.49 per barrel.
Gold futures snapped a four-day losing streak, adding 1.4% to settle at $1,791.80 an ounce.
The CBOE Volatility Index (VIX) declined 2.3% to 18.18.
Bitcoin prices improved by 1.1% to $57,530.32. More impressive was the 18.6% improvement in Ethereum, to $3,300.64 (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Another Big Week of Reports … And Dividends

What should investors be looking forward to this week?

On Thursday and Friday, we’ll get the latest weekly unemployment filings and April jobs data, respectively, but throughout the week, another heaping helping of earnings reports, anchored by the likes of General Motors (GM), Pfizer (PFE), Under Armour (UAA) and PayPal (PYPL).

And given that many companies tend to synchronize their dividend and buyback actions with their earnings reports, you also can expect plenty of news on the dividend-growth front.

In some cases, those raises might be token upticks meant to secure current or future membership in the Dividend Aristocrats. But others are bound to compete with this year’s most explosive payout hikes – improvements of 15%, 20% or even 30% that drastically change the income aspect of current shareholders’ investments. Ideally, of course, investors want the best of both worlds: income longevity and generosity.

These 10 dividend stocks just might fit the bill. This group of mostly blue-chip household names offer a strong history of payout increases, a sharp level of recent hikes compared to their peers, and the operational quality to continue affording these annual raises.

Kyle Woodley was long AMZN, CRM, PYPL and Ethereum as of this writing.

Source: kiplinger.com

May 4, 2021

Bitcoin Gold (BTG): Creation, Controversy, and How it Stacks up to BCH

Any conversation about cryptocurrency has to start with Bitcoin. It was the first crypto (it’s been around since 2009), it is the most valuable (worth over $1 trillion), and it’s the most traded (over $60 billion in daily volume). It also has the most spinoffs, or “forks,” that have become widely-used cryptos in their own right.

Perhaps the most well-known forks are Bitcoin Cash (BCH), which came out in 2017, and Bitcoin Gold(BCG), which was the product of a fork from Bitcoin a few months later.

What is Bitcoin Gold?

Bitcoin Gold was a hard fork from Bitcoin with the intent of further decentralizing Bitcoin. The idea was to use a new algorithm for the mining process that would not prioritize major mining operations, as some believed Bitcoin did.

Bitcoin Gold was an implicit criticism of Bitcoin, essentially arguing that it had betrayed or at least strayed from its initial roots as a decentralized currency with its increasingly centralized mining operations. Even if anyone can buy Bitcoin, it’s much harder (or at least not profitable) for anyone to create it.

Developers wanted to make it easier for normal computer users to mine on their own machines, a contrast to the massive Bitcoin mining industry, which is mostly done on specialized computer equipment purchased and operated by big-time operators in places like Iceland, where electricity is cheap. With Bitcoin Gold, however, the humble graphics card could carry the load.

Bitcoin Gold Controversy

Bitcoin Gold has been controversial almost since its inception. Typically with hard forks, owners of the initial cryptocurrency also receive units of the new one. For example, when Bitcoin Cash forked from Bitcoin, all Bitcoin owners got Bitcoin Cash.

When the Bitcoin Gold fork occurred, on the other hand, Bitcoin owners did not immediately get their new cryptocurrency. Instead, developers kept the Bitcoin Gold blockchain private for a few weeks so that they could mine BTG without competition—which they described as a “premine”. Critics opposed this practice, as it left fewer coins available for others to mine and also amounted to “free money” for the BTG developers.

As a result, cryptocurrency exchange and service provider Coinbase said it would not support BitcoinGold, explaining that because developers hadn’t made the code available for review by the public, it posed a security risk.

BTG Security Issues

Bitcoin Gold was worth over $8 billion when it launched, but fell dramatically in value as security issues emerged.

BTG has experienced multiple “51% attacks,” where an entity or individual or hacker is able to do the one thing that cryptocurrency is supposed to prevent: take control of transactions and “double spend” them, essentially stealing money. After one of the attacks, Bitcoin Gold was delisted from some exchanges.

In 2020, the developers behind Bitcoin Gold were able to fend off another attempt on the cryptocurrency’s network.
In early March 2021, the Bitcoin Gold team posted on its blog that its “hibernation has come to an end”—the 51% attacks that plagued the coin last year were ultimately defeated by the BTG miners and community.

What is Bitcoin Gold Worth Now?

Bitcoin Gold is ranked 73rd among cryptos according to CoinMarketCap (as of late April 2021) and has a total value of around $1.6 billion and a value per coin of around $90. Bitcoin Gold’s value was over $470 per coin at least twice in 2017, but has been under $100 since early 2018.

Bitcoin Gold vs. Bitcoin Cash Value

When comparing Bitcoin Gold vs Bitcoin Cash, the numbers speak for themselves: the original fork has a total value of almost $11 trillion, volume of almost $3 billion, and a value per coin of over $500. Bitcoin Cash is about 87 percent from its absolute peak value but is still substantially more valuable than its forked cousin on a “per coin” basis, at least so far, when it comes to Bitcoin Cash vs Bitcoin Gold, Bitcoin Cash is winning.

How to Invest in Bitcoin Gold

Bitcoin Gold is not available to buy and sell on mainstream exchanges like Coinbase, but, according to its organizers, it is available to trade on exchanges like Binance and Bitfinex.

The Takeaway

Bitcoin Gold is yet another hard fork of Bitcoin, like Bitcoin Cash. What distinguishes Bitcoin Gold is its intent: To further decentralize and democrative mining, making it more accessible to individual miners, rather than large groups with massive computing power.

For investors interested in building a crypto portfolio, buying crypto on SoFi Invest® can be a great way to start trading crypto. You can get started with just $10, we keep your crypto secure and protected from fraud, and you can manage your account in the SoFi app.

Find out how to invest in crypto with SoFi Invest.

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Source: sofi.com