Yesterday I hosted a guest article about the mortagage-interest tax deduction. As part of his argument that this tax break should not be used to justify buying a house, CJ from Wise Money Matters looked at the savings by tax brackets. What CJ did not consider (and what escaped my notice, and even that of my accountant) was the concept of marginal tax rates.
Although I was mortified to have let such a blatant error pass through editing, I decided to turn this mistake into a positive experience. I spent some time reading about marginal tax rates, and today I’m going to share what I learned.
Marginal Tax Rates
Let’s start by looking at the 2009 U.S. federal income tax brackets for ordinary income. (These are the rates we’ll use when filing our tax returns in 2010.) For the sake of simplicity, we’ll only examine the rates for single filers and for those who are married filing jointly. The same principle applies to all filers.
You can also view the 2010 federal income tax brackets and a discussion on 2011 federal income tax rates.Based on this table, if Gillian is single and has taxable income of $100,000 in 2009, her marginal tax rate will be 28%. This does not mean that all of her income is taxed at 28%. She will not owe $28,000 in taxes. Only the top portion of her income is taxed at the highest level.
Gillian’s income is actually taxed progressively, at each bracket up to her marginal rate. Does that sound like gibberish? It’s actually not so bad. Using the example above:
The first $8,350 of Gillian’s $100,000 income would be taxed at 10%, for a total of $835 in taxes due.
The next $25,600 of her income would be taxed at 15%, for a total of $3,840.
The next $48,300 of her income would be taxed at 25%, for a total of $12,075.
The final $17,750 of her income would be taxed at 28%, for a total of $4,970.
Because Gillian earns $100,000 of taxable income, she is said to be in the 28% tax bracket. That’s the percentage she’s taxed on the last dollar she earns. But most of her dollars are taxed at a lower rate. In fact, as a single filer earning $100,000 in taxable income, she’ll owe $21,720 in taxes for 2009, which means her effective tax rate will be 21.72% — not 28%.
An Easy Mistake to Make
CJ’s article yesterday originally contained a mistaken analysis of the mortgage interest tax deduction. He was applying marginal rates as if they were effective rates. I did not catch it, and neither did my accountant. I’m well aware of marginal rates (and so, obviously, is my accountant), which demonstrates just how confusing this can be — if you don’t pay attention.
Even large media outlets make mistakes with marginal rates. President Obama’s tax proposal would increase taxes on families earning more than $250,000 per year. ABC News ran a story profiling upper-income taxpayers who are looking for ways to sidestep this tax hike. One of them, a 63-year-old attorney from Louisiana, is quoted in the article:
“We are going to try to figure out how to make our income $249,999.00,” she said.
“We have to find a way out there we can make just what we need to just under the line so we can benefit from Obama’s tax plan,” she added. “Why kill yourself working if you’re going to give it all way to people who aren’t working so hard?”
Before ABC News revised the article (just as I revised the error out of yesterday’s story at Get Rich Slowly), its main thrust was grounded firmly on a misunderstanding of marginal and effective tax rates. But this attorney is working from a false premise. If she makes $250,000 per year, she’s only going to pay a few cents more in taxes than if she earns $249,999 per year.
My point here isn’t that the attorney is dumb or that the reporter is dumb or that CJ is dumb or that my accountant is dumb or that I am dumb. My point is that marginal tax rates can be confusing, even for those who know better. When you speak about tax rates and tax brackets, always take a moment to be clear whether you’re speaking about marginal tax rates or effective tax rates.
Then you can avoid posting blog articles (or news stories) that contain embarrassing errors!
A week or so ago, I was scanning through my archived posts and it occurred to me that my blog’s 10-year anniversary was just days away.
I found the first post I wrote and laughed a bit as I read it, thinking how naïve and young I was at the time. I was in my mid-20s, working for a wholesale mortgage lender and pondering a home purchase.
But property values were sky-high at the time and I was aware of that. I couldn’t wrap my head around buying a place at those prices. And in hindsight, I’m glad I didn’t.
I know a lot of people who did buy back then, and many no longer own their homes, while some actually stuck it through and are now sitting fairly pretty.
Those Who Held On Since 2006 Are Doing Fine
As mentioned last week, time tends to heal all real estate wounds. Even if you buy at a particularly bad time, if you hold onto your property and pay down your mortgage, you’ll likely come out ahead.
The problem 10 years ago was that the mortgages tied to those expensive properties weren’t sustainable. Many borrowers couldn’t afford to hold them beyond their first rate reset, which may have come in just six months’ time.
But for those with a fixed-rate mortgage, or the income to endure the ups and downs, it was possible to ride out the storm and wind up in a decent equity position.
Let’s pretend someone purchased a home back in July 2006, when home prices peaked, for around $650,000. Today, prices might be closer to $750,000, thanks to rapid appreciation over the past several years.
Sure, that same property may have fallen as low as $450,000 at some point in time over the past decade, but things have corrected big time.
For sake of simplicity, we will assume they took out a 30-year fixed at a rate of 6.76%, the average for July 2006 per Freddie Mac data.
If they put 20% down, that would leave them with a starting loan amount of $520,000. The monthly payment on that loan at 6.75% would be a whopping $3,372.71 per month.
Had they held the loan for 10 years, the balance would be whittled down to roughly $444,000. Assuming prices today are closer to $750,000, they’d have over $300,000 in home equity. Not too bad for buying at the height of the market.
Chances are they would have refinanced too, to a lower rate, so they’d be in pretty good shape, even if some years were especially brutal.
Rates Were Nearly Double 10 Years Ago
Today, mortgage rates are nearly half what they were a decade ago. Using Freddie Mac data, the 30-year fixed has fallen from 6.76% in July 2006 to 3.48% today.
That’s very close to double, and might explain why home buyers are snapping up properties left and right at the moment.
If you factor in inflation since 2006, home prices are actually pretty flat. Using a CPI calculator, a $650,000 home purchase in 2006 is equivalent to buying a $777,000 home today.
The difference is that you get an interest rate that is nearly half what it was back then. That seems like a pretty good deal, even if it all feels a bit frothy given the massive gains recently.
Mortgages Are Boring Now
So we know home prices are reasonable, and interest rates are super cheap, and to make matters even better, mortgages are ultra-boring these days.
When I was working for a lender in the early 2000s, it was more common to originate an option arm than it was a 30-year fixed. If it wasn’t an option arm, there’s a good chance it was some kind of adjustable-rate mortgage.
It likely wasn’t a 15-year fixed, and if it was a 30-year fixed, it may very well have been interest-only as well.
Today, most mortgages are fully-amortized 30-year and 15-year fixed mortgages, meaning borrowers are paying down their mortgages and enjoying payments that never change over the course of the loan.
This makes the situation even better for everyone because we shouldn’t see a deluge of foreclosures anytime soon due to unsustainable mortgage payments.
To sum it up, relatively flat home prices, rock bottom rates, and plain vanilla mortgages. Sounds good.
What We Should Worry About Over the Next 10 Years
While the current situation looks pretty solid on paper, home prices have increased dramatically, and without the availability of ultra-low mortgage rates, we could face some serious affordability issues.
Heck, folks are already having trouble affording homes in certain hotspots throughout the country, even if they’re making money hand over fist.
Another big problem developing is the lack of a down payment, which was one of the major catalysts during the prior crisis. No skin in the game.
We aren’t quite at zero down nationwide again, but there are many more low-down payment options available today than there were a year ago.
Today, we’ve got plenty of 3% down options at our disposal via programs like Bank of America’s Affordable Loan Solution and the Wells Fargo yourFirstMortgage.
If 3% down is still too much for you, you can now take advantage of 1% down programs from Guaranteed Rate and United Wholesale Mortgage.
Or if you don’t want to provide any down payment at all, you can go with BancorpSouth, Fifth Third, or simply take out a USDA loan.
Of course, the payment (and interest rate) will be higher if you put nothing down. But there is at least one company willing to split the down payment with you in order to keep your LTV at 80% or less.
Things could get ugly again if higher and higher home prices force lenders to come up with the creative financing of old, especially if inventory rises at the same time. But I don’t think we’re there just yet.
Looking back over the past 10 years, a lot has changed and a lot has remained the same. We went through one of the worst crises in recent history but came out stronger, as we usually do.
For those who stuck it through, they should be back above water and in a good equity position.
Those who sold (by necessity or by choice) and are working to get back in the housing market might find themselves in the unfortunate position of buying nearer to the top, again. But at least they’ll get a really low mortgage rate this time around.
It’s hard to say what the future will hold, or how the next decade will play out. But when I read my first post, it feels like we’re facing the same problems again, just without the bad mortgages. In place of exotic financing features are interest rates at 50% off.
What goes down must come up, right? What happens when rates rise? Are we destined to repeat history or will we get it right this time around? Maybe there is no right and wrong. Maybe it’s all cyclical and booms and busts are just a part of life.
Perhaps it doesn’t matter if you don’t speculate and just buy a home you can genuinely afford that you also truly love.
Stone walls, crocodile-filled moats, Rottweilers — our ancestors found some pretty creative home security solutions!
Today’s home security systems feature a more tech-savvy approach, but the goal remains the same: to keep your family, your property, and your stuff safe from outsiders.
Recent innovations have fueled a new surge in home security sales.
As you shop around and compare systems, consider your home’s security challenges, your lifestyle, and your budget.
Chances are good you’ll find the system you need, whether you’re a new homeowner or just new to the home security market.
How Security Systems Have Changed Over Time and Recently
Believe it or not, tech-driven security systems have been around nearly two centuries. Augustus Russell Pope of Boston combined electricity, magnets, and a bell to create a burglar alarm in the 1850s.
Marketing the invention proved difficult, though, because people feared electricity as much as they feared intruders. As the decades passed, the world caught up with Pope’s idea.
By the early 20th century, electricity had grown safer and more common. The burglar alarm started to catch on.
By the 1970s, home security systems featured motion sensors. Off-site monitoring caught on in the 1980s.
Prices started to fall in the 1990s, making systems accessible for more homeowners. Now the internet has changed the industry again.
For a few hundred dollars in hardware and installation fees — or perhaps less if you install the system yourself — you can monitor your own home from your smartphone from work, school, your commute, or even while on vacation.
These new systems have drawbacks, too, so before you jump in, make sure you’re getting the security your family needs.
Monitored Vs Unmonitored Security Systems
This has become the first question to ask when shopping for home security: Should you pay more for a system with professional monitoring included?
For decades, monitoring fees prevented a lot of homeowners from getting a home security system.
Even the lowest fees can become cost-prohibitive when you pay them month after month and year after year for the indefinite future.
For those homeowners, unmonitored systems may offer the only way into the home security market. If you have a choice, though, give this question some thought.
Monitored systems come with some advantages you may like.
Advantages of Professionally Monitored Systems
Just like with cars, computers, and houses, you get what you pay for with a home security system.
A monitored system costs more, but consider these advantages:
More seamless responses: With an unmonitored system, it would be up to you to contact fire or law enforcement officials when you get an alert about an intruder. When you’re out of town, calling 911 probably won’t work as quickly since you’d have to be transferred between areas of jurisdiction. Someone monitoring your home should be able to contact officials more quickly.
Someone else deals with false alarms: When you’re at work or out shopping and you get a security alert from your unmonitored security system, it’s up to you to assess the risk. If the FedEx guy triggered the alarm by delivering this month’s dog food, you’d feel relieved. But when something like this happens several times a day, it starts to get distracting. A monitored system can take care of these distractions, saving your attention for when it really matters.
Equipment may be included: Customers who buy an unmonitored system tend to be responsible for maintaining and upgrading their own security equipment. A monitored system would more likely include the equipment and, naturally, its maintenance and upgrades. In a fast-changing industry, your gear can get outdated pretty quickly.
Protection isn’t dependent on cell service: Most of us always know where our phones are. But what happens when you’re in an area with poor service or when you lose your phone on the Slinky Dog ride at Disney’s Hollywood Studios? (I’m not judging!) You may not have access to your at-home security system alerts when most needed. A monitored service can contact authorities to protect your home even when you aren’t in the loop.
Advantages of Unmonitored Systems
Unmonitored, also known as self-monitored, home security systems have become the fastest growing segment of the market for a reason. Advantages include:
The cost, of course: Since you could use a self-monitored home security system without paying monthly fees, you can save a lot month to month and year to year. Even if you pay a professional to install the system’s panel or cameras, you can still avoid that monthly bill.
A perfect fit if you’re renting: The home security market has traditionally ignored renters since they don’t have the authority to install hardware or enter a long-term contract. An unmonitored system offers exactly what a renter needs: flexible service with no long-term commitment.
Having more control: When you’re making all the decisions about whether to call for help or whether it’s a false alarm, you’re automatically controlling the response level. Since you know better than anyone what’s normal at your home, this can prevent some confusion. For example, the monitoring service may not know your brother has a spare key but does not know the alarm code. Since you know this, you can automatically filter out the police response as a viable option (unless you really have it in for your brother).
Integrating additional home systems: Some of the best self-monitored systems are an extension of WiFi-enabled home automation. Along with feeling more secure, you can also lock or unlock doors, change your thermostat, turn certain lights on or off, and even control the garden sprinklers (and lawn mowers!), all from an app. (Traditional monitored services have started adding these features, too.)
Can You Get the Best of Both Worlds?
Wouldn’t it be nice if you could combine the best aspects of professionally monitored and self-monitored systems?
Well, the industry has been moving in that direction.
Here’s why: The rapid growth of self-monitored home security systems has grabbed the attention of the traditional home security companies.
The leading monitored services are compensating by adding modern conveniences such as app-based customer control and, in some cases, acquiring smaller, self-monitored home security companies.
And it’s not a one-way street: Some self-monitored services have added the option to have your home professionally monitored, but with a twist. You can get add-on monitoring for a fee only when you need it. That way you could still avoid the contracts and flat monthly fees.
As the market continues to evolve, I’d expect to see less separation between these two categories.
But full-time monitoring will continue to be a separator. It simply costs more money to have someone monitoring your home and responding to problems all day every day.
And in many cases, professional monitoring equals a more secure home.
Should You Buy a Monitored or Unmonitored Security System?
This gradual merging of monitored and unmonitored home security features could, ironically, make it harder to decide what kind of service to buy.
If you like the control an unmonitored system offers, you don’t necessarily have to opt for an unmonitored system anymore. You can find a monitored system with similar capabilities.
Or, if you want a monitored system because you’re out of town a lot, you no longer have to choose from only traditional security service providers. You may be able to find an unmonitored service with added-on monitoring periods without a contract.
If you can’t decide for sure, take a look at your home, your lifestyle, and your personal preferences. They can tell you a lot about your needs.
What Type of Home Do You Have?
The kind of home you’re protecting should help drive the kind of protection you buy.
Makes sense, right?
Well, it’s easy to forget such obvious things once you start comparing features, prices, contracts, apps, and customer reviews.
Take a look around your home. If you have two full floors full of windows and doors, along with a garage door and windows to consider, you’ll need a lot of equipment installed and maintained.
You’ll also have a lot more sensors to trigger false alarms. A monitored system could be worth the cost.
On the flip side, if you live in a 2-room apartment with just a few windows and only two doors, your up-front equipment investment will be less, and you’ll have fewer trigger points to keep an eye on as you monitor things while away. A self-monitored system could do the job.
How Connected Are You?
If a home security system sends an alert to your smartphone but no one is around to hear it, does it make a sound? We could debate that question for hours, and if your phone happens to be off, someone could be stealing your stuff as we contemplate.
With an unmonitored system, you’re on call around the clock via your smartphone. If you’re the kind of person who likes to unplug after work or while on vacation, you may want to lean toward a monitored security system.
If, however, you and your phone are inseparable — if you sleep with the phone beside you on the pillow — you’re likely set up well to monitor security alerts.
That said, I’d suggest using a different ringtone for home security alerts. You wouldn’t want to ignore a serious problem thinking it was just a reminder to pick up your sister’s cat from the vet tomorrow.
How Connected Is Your Home?
Most of us have WiFi at home now. Most does not mean all, though.
People without WiFi at home will have a hard time using all the features of a self-monitored home security system.
In that case, a landline-based, traditional system would be a better option.
If you have WiFi, the quality of your surveillance will depend a lot on the quality of your Internet connection.
As more devices and appliances get online — thermostats, washing machines, tablets, phones, TVs, refrigerators, lawn mowers — there’s more demand on your network. For many of us, a DSL connection just doesn’t cut it anymore.
If you have a gigabit-per-second coming across fiber into your home, your unmonitored security features should work just fine.
How Busy Are You?
A lot of us can add tasks to our regular schedules without a lot of stress. People in the gig economy or with a couple side hustles may have just the kind of schedule flexibility they need to assess threats from their smartphones.
Sure, you may have to re-arrange a few things or tell a client to hold on a second while you check the alert on your phone, but it’s still possible. People who teach school, run meetings, perform surgery, or preside over class-action lawsuits may not have time to check their phones every couple of hours.
Just like any other commitment you take on, consider the time demands of an unmonitored security system.
I’ve been in more than one meeting where someone had to check on a security alert. (Usually, something like leaves blowing onto the porch or a delivery from Amazon triggered the alert.)
Do You Own Your Home?
I referred to this earlier, but it bears repeating. Traditional home security firms more or less ignored renters for years since they didn’t have permission to install a system anyway.
With no wires to run behind walls, a tenant can usually install an unmonitored system without changing the property.
Mounting a camera in the corner is hardly different from hanging a picture, and it’s a whole lot simpler than installing a wall-mounted TV.
Plus, when you move on to a new home in a new city, you could take a lot of the system’s components with you to use at the new rental house. Of course, check your lease agreement to make sure you have permission to make the changes an unmonitored system would require.
And, by the way, if you’re a renter who would like a traditional monitored system, ask your landlord about it. He or she may be fine with the idea, especially since a system could reduce your landlord’s homeowners insurance rates.
Best Security System Providers For 2023
We’ve chewed on a lot of theoretical stuff, so let’s get into what really matters. How do systems compare to each other, and which one should you get?
A year or so ago I would have made two best security system lists: One for monitored security systems and one for self-monitored systems.
The features of these systems have blended so much I think one list will better serve shoppers. I’ll be sure to indicate whether you would need a contract to use each service.
While convenient features are important and worth weighing into the equation, the quality of the system itself still matters most.
So I’ll be giving the quality of your home security system first priority in these comparisons while giving conveniences and customer flexibility a little less importance.
Frontpoint
Contract required: Yes Professional monitoring: Yes Length of contract: At least one year
Remember earlier when I suggested the future of home security will likely blend the features of monitored and unmonitored systems?
I had Frontpoint in mind when I said that.
This company has led this confluence of features, offering professional monitoring plus the conveniences do-it-yourself systems introduced.
Yes, Frontpoint requires a contract and you’ll be paying for 24/7 professional monitoring. But you’ll also have a user-friendly app that can control your locks, lights, and thermostat.
With Frontpoint, you install the equipment yourself since it’s wireless, lightweight, and easy to position with included adhesive strips.
Essentially, Frontpoint offers the best features of monitored and unmonitored services in one package: professional monitoring, quality equipment, convenient features, and a do-it-yourself approach.
That’s why I’ve listed Frontpoint first.
I also like the 30-day, risk-free guarantee. If you’re unhappy with the service, Frontpoint won’t bill you and you can return all the hardware. You won’t be on the hook for the rest of the contract.
I also like the one-year contract. Most companies require a three-year commitment.
Frontpoint offers three price points. If you’d like to access recorded video surveillance from your property, you’ll need to go with the most expensive plan.
Best for: A homeowner who wants mobile control, full-time professional monitoring, and more contract flexibility than usual. Avoid if: You don’t want to enter at least a one-year contract.
ADT Pulse
Contract required: Yes Professional monitoring: Yes Length of contract: At least three years
ADT, a leader in home security for almost 150 years, has also started offering the conveniences of unmonitored security in its ADT Pulse system.
Like Frontpoint, ADT Pulse still bases its services on contracts, but it has bulked up its app to give customers more control over their security equipment. In fact, you can probably incorporate your own cameras and sensors into ADT’s system since it supports many third-party hardware brands.
Unlike Frontpoint, ADT Pulse includes professional installation (and a corresponding $99 set-up fee). The result is another best-of-both-worlds approach for the customer who is willing to enter into a contract.
In ADT’s case, the contract will last at least three years, and you’d be billed a hefty termination fee to get out of it.
ADT will let you out of the contract if you’re not happy with the service, but it’s not a no-questions-asked policy. ADT will try to resolve your issues, which is a good thing if home security is your priority.
Best for: A homeowner who wants a time-tested, trustworthy home security partner with professional installation plus modern mobile-based control. Avoid if: You’re not sure about entering a long-term contract.
ProtectAmerica
Contract required: Yes Professional monitoring: Yes Length of contract: At least three years
By now you’re sensing a trend: Traditional, contract-based home security companies that have adopted modern conveniences are dominating the top of this list.
And for good reason: Ultimately, a home security system should provide the best home security for you and your family, and professional monitoring tends to offer more security.
ProtectAmerica makes this list for those reasons and because of its flexible pricing options. The company has five price points.
I’d stay away from the company’s less expensive, landline-based options. They do not offer the control and integration you’d get from Frontpoint or ADT Pulse (unless you want a traditional, landline-based system).
ProtectAmerica’s broadband and cellular-based options deliver a lot. You can even integrate the system with your Amazon Alexa or Google Home smart device for voice control.
And when an alarm goes off, you can also get a voice prompt from the system telling you which sensor or camera triggered the alarm. When you’re half asleep, this simplicity can pay off! There’s also a panic button which will automatically call for help.
Best for: A homeowner or renter who wants the conveniences of tech-based security with fewer potential complications. Avoid if: You’re shy about a three-year contract.
Vivint Home Security
Contract required: No, unless you’re financing equipment Professional monitoring: Yes Length of contract: At least 42 months (but only when financing equipment)
If you’ve been looking for a no-contract home security solution that still delivers professional results, consider Vivint Home Security. Vivint offers monitoring for a monthly fee, but it doesn’t require its customers to commit to more than one month at a time.
However, if you cancel your account while you still owe money on your equipment, Vivint will bill you for the balance. So even though you wouldn’t have an official contract, you’d still be compelled to keep the service or pay a lump sum to end your connection to the company.
It’s not exactly a no-strings-attached situation, but customers do have more control month to month, especially if they pay up front for the equipment.
Vivint makes this list because of this potential flexibility and because of the flexibility of the company’s equipment.
You can essentially build your own home security and home automation package the way you want. Rather than choosing from a package, you can combine different kinds of surveillance equipment including outdoor monitoring, and different safety features such as smart lighting and thermostat control.
You can manage your system through a Google or Amazon smart speaker or you can use a more customized control panel.
Best for: A homeowner who wants to customize a security solution. Avoid if: You don’t want to pay up front for equipment. If you don’t pay up front, you’ll have a de facto contract.
Link Interactive
Contract required: No, unless you’re financing equipment Professional monitoring: Yes (by a third party monitoring center) Length of contract: N/A unless financing equipment
Link Interactive rounds out my top 5 because, once again, it blends traditional and unmonitored features to give customers the best of both worlds. Link Interactive stands out because it has embraced broadband and cellular networks more thorough than most other providers.
As a result, you can talk with a professional monitor through your control panel at home during an emergency. Sometimes just knowing what’s going on and finding out easily when help will arrive can alleviate stress.
But you should know that Link Interactive uses a third party, which doesn’t always equal a loss in quality, but it does mean the company has less control over the monitoring process.
Still, lots of Link Interactive customers have been satisfied with their service according to TrustPilot and Better Business Bureau reports, which tend to lean toward the negative for security systems.
Link Interactive lets you pay month to month instead of committing to one to three years. However, as with Vivint, if you owe money on your home security equipment, you’d have to pay the balance if you canceled service.
So unless you pay up front for the equipment or pay the balance down enough to make more affordable, you’d likely be sticking with the service for a while.
Essentially, it’s a contract by another name. Link Interactive does stand by its 30-day grace period. If you change your mind or don’t like the service, you can cancel without obligations.
Security matters most, and even though I’ve listed a couple concerns, Link Interactive has the experience (about 70 years’ worth) and the equipment to serve its customers well.
Best for: A homeowner who wants a reliable partner with the best modern conveniences. Avoid if: You don’t plan to stick with the company for at least until you’ve paid off the equipment.
Best Self-Monitored Home Security Services For 2023
I know — I listed my five top choices for home security, and not a single one offers a completely self-monitored system.
I alluded to the reason earlier but here it is again: Professionally monitored systems simply provide better security across the board, and we’re looking for the best home security systems.
In most cases, security tends to be better because you have a staff of monitors at the ready to respond to a crisis at your home.
Most, of course, doesn’t mean all. You may have just the right work-life balance to handle a self-monitored system. Or you might just prefer to self-monitor your home security, either to save money or because you like the control.
If so, you have a lot of choices.
Let’s take a look at a few of my favorites.
Ring Alarm
You’ve probably seen this one on TV. It looks simple, efficient, and affordable.
Overall, it lives up. For only $200 or so up front, you can get a pretty solid set-up and install it yourself. Pricier packages offer more components for larger homes.
You can opt for professional monitoring (for $10 a month or $100 a year) or for self-monitoring, which is free. Ring connects to Z-wave, which means you can incorporate a wide variety of home management and security equipment.
Amazon owns and sells Ring systems, so if you’re a frequent Amazon shopper you’ll know pretty much what to expect.
Best for: A low-cost but useful alternative with professional monitoring available.
Honeywell Smart Home Security
Honeywell, whose name you may have seen on thermostats somewhere along the line, has expanded its business into smart home connectivity, including home security.
You’ll pay more, over $1,000 most likely, to get your system going, but after that, you can do a lot, including arming and disarming the system with a key fob and even integrating facial recognition.
Honeywell’s system works seamlessly with Amazon Alexa, and the system should soon also offer Google Assistant and Apple HomeKit integration.
Honeywell also syncs with Z-wave, which means you can use all sorts of wireless equipment to manage and monitor your home.
Best for: A do-it-yourself alternative that still has top-notch gear and accessibility specializing in self-monitoring.
SimpliSafe
SimpliSafe has grown in name recognition and market share. The company offers a lot of options. About 16 to be precise. They all vary slightly in the number of components and price.
Set-up fees range from about $290 to about $550 depending on how much equipment your home needs. The equipment is easy to install and use. You can go without professional monitoring and keep using the security equipment.
It tends to be harder to incorporate third-party equipment, though. So if you get SimpliSafe don’t assume you can use existing gear from previous systems.
Best for: An all-in-one system for homeowners new to security systems.
Nest Secure
If you use Google products — Google Assistant and the Android operating system, for example — Nest Secure could offer a sensible extension for your home automation and security needs.
Naturally, the service integrates nicely with Google Assistant and your Android phone or tablet. You can spend up to $500 or so getting the equipment set-up.
You can add professional monitoring on a contract or month-to-month basis.
Best for: Customers who already use Nest home automation products. Nest is part of Alphabet, Google’s parent company.
Going Cheap? Create Your Own System And Go Full DIY!
Even though the home security market has changed a lot with the success of self-monitoring systems, customers still have two basic choices:
Enter a contract of some sort to get professional monitoring and pay less up front.
Buy a do-it-yourself system, spending $300 to $1,500 up front, and have the freedom to self-monitor and avoid the contract.
Some customers wonder why they can’t just buy some cameras and door sensors and connect the gear to their smartphone. That may be possible, and if that’s your thing, you could save compared to buying a pre-packaged deal.
But, for the majority of consumers, I do not recommend this approach for a few reasons:
It depends upon your ability to connect and maintain the equipment.
You couldn’t add professional monitoring if you wanted to.
It’s more difficult to self-monitor without an app to centralize the camera feeds and sensor data.
Regional Security Firms May Offer a Lot
I tried to limit this post to companies offering nationwide service. Some regional companies offer great equipment and great service, too.
If you’re considering a regional firm in your area, make sure to check on the following issues:
Who monitors the company’s security systems? Is it local or third party? If third party, try to find out response times for the monitoring service.
Are you as the customer responsible for maintaining the equipment or will the company keep it up to date? If you’re responsible, work that into what you’ll be paying.
Does the system’s control panel have a battery backup during loss of electricity? What about backup for the WiFi connection? If not, the system could leave you vulnerable.
If you have the ability to self-monitor, can you integrate components you already own via Z-wave or another similar service?
What do local law enforcement officials think about the firm? Cops know a lot about home security. They may know the value of a local or regional home security outfit.
Need Proof of Results? Ask Your Insurance Agent
Our homes are personal. Having a stranger violate, steal, or destroy our homes, our property feels like a personal attack even if we’re not home and deal only with the aftermath.
People who have experienced that feeling know it can change the way you look at the world for a while.
It makes sense for homeowners (and renters) to seek some kind of protection against this danger. No system can guarantee your safety and the safety of your family.
But home security systems do get results. For proof, just ask your homeowners insurance company.
Many insurers will give you a discount on your home insurance premiums if you have a professionally monitored home security system. Insurers give this discount because they know a quality home security service will likely reduce the likelihood of a personal property insurance claim.
As you compare systems, consider what kind of security you need and whether what you’re buying fits your home.
Security is personal. It’s up to you to make sure you’re getting a system to match your life.
Save more, spend smarter, and make your money go further
Even as interest rates approach lows last seen in, oh, 50,000 BC, U.S. savings bonds are still a great deal.
I’m an obsessive fan of savings bonds, particularly Series I, or I-bonds, for short. Since I wrote about them last year, a few aspects of buying and giving them have changed, but the basic message hasn’t: if you aren’t buying savings bonds, you’re missing out on a safe, simple, and relatively high-yielding investment available to anyone with a social security number.
Let’s recap briefly what is so great about I-bonds:
– They pay an interest rate tied to the rate of inflation. You won’t lose purchasing power, and if you’re concerned about high inflation in the future, I-bonds will protect your savings. Most savings accounts, CDs, and other Treasury bonds pay less than the prevailing inflation rate. Right now, for example, I-bonds are paying 2.2% APY, which is more than almost any 5-year CD.
– Each person can buy up to $10,000 per year.
– You can set up an account in minutes and start buying I-bonds online at TreasuryDirect.gov.
– You can cash them in after one year or hold them for up to 30 years. (There’s a small penalty for redeeming I-bonds before 5 years.)
– I-bonds are tax-deferred and can be used for a child’s college education tax-free.
The way I always sum it up is: nobody regrets buying I-bonds.
The gift of aaaargh
The big change in bonds since last year: they got rid of paper savings bonds. If you’re buying bonds for yourself, no big deal. Buying online is easy — all you miss out on is the cool pictures of Einstein and Chief Joseph and Helen Keller.
If you want to give a savings bond as a gift, however, the process is about to get a little awkward, because the recipient of the gift has to have their own Treasury Direct (TD) account. For example, say I want to give my niece a $25 I-bond. I can buy the bond right away and keep it in the “Gift Box” section of my TD account. To transfer it to my niece, however, I have to:
– Call or email my brother and tell him to open a TD account for himself, then a subaccount for his daughter (oh, and another subaccount for his son, if I want to give him a bond, too).
– Have him give me the kid’s TD account number. Yes, it is safe to share your TD account number. No, this is not intuitive.
The Treasury has produced a YouTube video, complete with that reassuring “Welcome to your first day at work”-style voiceover, to explain how to give electronic savings bonds as gifts. Honestly, I would rather call my grandmother and ask her if she has any tech support questions for me.
Instead, I called Jerry Kelly, director of the Treasury’s Ready.Save.Grow campaign. His response, in short: Believe me, we know. “There are a lot of things we’re looking at to simplify the process,” said Kelly. “One of the things we keep in mind for simplicity is PayPal, or, for example, or iTunes. We want to get there eventually. It’s going to take us time.”
I asked Kelly whether anyone is using the gifting feature. “It’s certainly not as robust as paper was, and we knew that that would happen,” he replied.
This isn’t good enough for Mel Lindauer, a Forbes columnist, coauthor of The Bogleheads’ Guide to Investing, and a man even more into savings bonds than I am. “The answer is simple,” said Lindauer by email. “Bring back paper I-Bonds and give investors an option. Prior to the elimination of paper I-Bonds, investors overwhelmingly chose paper I-Bonds over TD.”
Stay safe out there
Lindauer ticked off a variety of objections to Treasury Direct, most damningly the fact that, unlike your bank’s website, TD doesn’t promise you’re off the hook in the event someone fraudulently cleans out your account.
“There is an element of truth to that,” said Kelly, but in over ten years and hundred of thousands of TD accounts, no customer has lost a dime to fraud. “We have had people who’ve had problems, but we have not held them accountable for it, because we haven’t deemed them to be negligent with their access information.” He mentioned the guy who put his Social Security number on the side of his truck. If someone did that with their TD password, “we probably would not have a whole lot of sympathy for them.”
And a TD account is not like a checking account: it’s designed to be easier to put money in than take it out. In order to steal my I-bonds, you’d not only need access to my password and my email account (TD sends a one-time passcode via email when you log in on a new computer), you’d then have to link my account to new bank account, which would leave an obvious trail.
In short, it would be even more work than convincing my brother to open a TD account for my niece. Please do not take this as a challenge.
To sum it up
– I-bonds are still an awesome, flexible, safe investment.
– The process for gifting them is too complicated, and no one blames you if you wait until they fix it.
– Buying them for yourself is a snap.
– I’m probably about to get a call from my grandmother asking if she can treat computer viruses with ibuprofen.
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.
Save more, spend smarter, and make your money go further
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One of our most serious enemies is Complexity. It saps your time by overwhelming you to the point of atrophy, and can lead us to believe there is nothing we can do about our chaotic lives. Whether you are struggling with your finances or simply needing to breathe easier, here are three things you can do in 24 hours to be more productive.
You’re going to need a whole day for this simplification process. Schedule it in on your calendar. This is going to be a massive overhaul of the way you work. The night before, go to sleep early. The morning of, eat a hearty breakfast. You’ll need to be alert and willing to work hard so you can work less later.
1. Unload your mind with pen and pad.
This is one of the most effective strategies for de-stressing and allowing your mind to take a break. Grab your pen and jot down everything that you have to do in the short and long term. Don’t worry about the order of things, just write for a solid block of time. What you’ll find is that this process will get your mental wheels turning. You’ll come up with new ideas, dig up old things you almost forgot about, and feel the burdens start to be lifted.
This unloading process is part of the GTD (Getting Things Done) methodology. The idea is that you spew all your ideas and concerns out on paper and look at the big picture. This is the first step to helping you organize your life is to get everything out in the open. You can also accomplish this using programs such as Things for Mac.
2. De-clutter all your stuff.
After you have spent a good portion of your day getting every to-do out in the open, it’s time to create a de-cluttered work environment. There’s nothing like a clean, uncluttered work space to melt away stress.
While I personally enjoy an uncluttered work environment, it isn’t always easy for me to maintain. To blast through the large piles on your desk, try throwing everything into one big pile. Then, organize everything into three separate and smaller piles: Inbox, Archive, and Trash. The Inbox pile should be items that are of immediate concern. Keep this pile small and process these items (ex: bills) as soon as possible. The Archive pile can be scanned into your computer for future reference or stored securely in a locked filing system. Try to archive as little as you can. Don’t keep everything! The Trash pile needs to be shredded and thrown in a dumpster. Throw away as much as is reasonable.
What you’ll be left with is a serene work environment where your productivity will shoot through the roof. But don’t stop here. It’s time to organize your to-dos and daily activities.
3. Design your day-to-day living.
This is the fun part. Take a look at your average day and ask yourself this question: is there anything I can do to simplify my lifestyle and enjoy every moment? As you architect your new day, pull out that list you made in Step 1 and ask yourself how you can accomplish these goals over time. Create a game-plan worth pursuing. Maybe one of your items is to get out of debt – study Dave Ramsey’s Baby Steps! Perhaps you need help keeping your home organized while on the go – read blogs focused on un-cluttering!
Whatever goals you have, taking 24 hours to reorganize your life and finances will create a healthier you. I challenge you to start from the ground up and redesign everything to better suit your needs. What do you have to lose?
What are some things you’ve done to simplify your life and finances? What do you suggest to others?