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Apache is functioning normally

June 7, 2023 by Brett Tams

The Sunshine State is a great place to call home. Whether you’re an individual or small business owner, rest assured there are many banks available to help you meet your financial goals.

While some banks have brick-and-mortar locations in Miami, Tampa, Jacksonville, Orlando, and other parts of the state, others are online-only, meaning you’ll need to use an online portal or mobile banking app to manage your accounts.

Welcome to Florida

15 Best Banks in Florida

We’ve done all the research and compiled this list of the best banks in Florida so you can make the most informed decision for your unique situation.

1. Huntington Bank

Huntington Bank has been around since 1866 and primarily services Southwest Florida. Its solo Florida branch can be found in Naples but you can bank from anywhere, thanks to a robust digital banking program.

Huntington’s checking accounts come with many benefits, such as 24-hour grace overdraft fee relief, platinum debit cards, mobile pay, and early pay. You can make deposits to them directly or through an ATM or mobile device.

If you’re looking for the ideal savings account, you may choose from several money market accounts, IRAs and other retirement accounts, and certificates of deposit. Huntington serves small business owners in Florida as well through business checking accounts, business credit cards, business loans, insurance products, and more.

2. Chime

Chime isn’t a traditional bank or credit union. However, it’s a mobile banking app you can take advantage of in Florida. It made its debut in 2013 and offers online banking services through Bancorp Bank, N.A. and Stride Bank.

With the Chime Checking account, you can enjoy early direct deposit, automated savings tools, free debit card replacement, and access to over 60,000 fee free ATMs across the county. If you opt for the Chime High-Yield Savings account, you’ll lock in a competitive interest rate and won’t have to pay monthly fees or meet a minimum balance requirement. Plus, there is no cap on how much interest you may earn.

3. Revolut

Revolut is another non-traditional banking opinion that serves Floridians from the U.K. With Revolut, you can access your paycheck up to two days early and won’t be charged fees for withdrawals at 55,000 ATMs across the nation.

If you consider yourself an avid traveler, you’re sure to appreciate its travel perks, such as currency exchange, overseas health insurance, delayed baggage and flight insurance, and the ability to make purchases in numerous currencies.

With the Smart Delay feature, you’ll get to hang out in airport lounges if your flight is delayed. Additionally, Revolut offers budgeting and analytics tools so you can keep your finances in check as well as cash back when you make purchases at select retailers.

4. Ally Bank

Ally Bank is an online bank with rates that are about 10 times the national average. Even though there are no Ally branches in Florida, it’s a solid pick if you’d like your money to grow quickly. Unlike most brick-and-mortar financial institutions in the Sunshine State, Ally doesn’t charge monthly fees or impose minimum balance requirements.

You can open an Ally account with any deposit amount. In addition to a savings account, you may take advantage of an interest bearing checking account and credit cards with rewards like cash back and travel points. We can’t forget Ally’s retirement and investment services, which include self-directed trading, robo portfolios, IRAs, stocks, commission-free ETFs, and even cryptocurrency.

5. Regions Bank

Regions Bank is a regional bank with more than 300 branches and 500 ATMs in Florida. If you’re an avid traveler, rest accrued the bank also has many locations in the Midwest, South, and Texas. Regions stands out from other, larger financial institutions for its checking account rewards program and LifeGreen Savings account, which is free of monthly maintenance fees and service fees.

In addition to the LifeGreen Savings account, you may opt for a Regions Savings account. This account offers a discount on a safe deposit box, a minor account for children under 18, and the Now Savings account, which is specifically for those with a Regions prepaid Visa card.

Furthermore, Regions offers CDs with terms that range from seven days and 72 months. Other perks include a robust mobile app and 24/7 customer service through an online secure messaging system.

6. Bank of America

Bank of America is a large bank with nearly 500 branches throughout the Sunshine State and no shortage of ATMs across the country. Thanks to its handy mobile app, you can cash checks, pay bills, and manage your accounts while you’re on the go. Speaking of accounts, there’s something for everyone at Bank of America.

The Bank of America Advantage Banking account is a checking account with three features: SafeBalance, Advantage Plus, and Advantage Relationship. With SafeBalance, which is ideal for students, you don’t have to worry about overdraft fees.

Advantage Plus offers several ways to waive monthly fees and Advantage Relationship rewards you with interest and other perks for higher balances. In addition, Bank of America boasts credit cards with generous sign on bonuses for new checking account customers, a variety of mortgages, and investment management services.

7. Chase Bank

Chase Bank is a part of JPMorgan Chase and has more than 400 branches in Florida. With Chase, you can expect a large ATM network of over 16,000 ATMs across the country and a number of online and mobile banking tools. If you decide to become a Chase customer, you’ll have access to two savings accounts: the Chase Savings account and the Chase Premier Savings account.

While Chase Savings comes with a low monthly fee, the Chase Premier Savings is a solid pick if you’re looking for a competitive interest rate on a large balance. When it comes to checking accounts, Chase offers several options, like the Chase Total Checking account and the Chase Sapphire Checking account with perks like attractive interest rates and no ATM fees.

Note that the Chase Sapphire Checking account is only available for Sapphire members with an average balance of $75,000 average balance.

8. Fifth Third Bank

Fifth Third Bank is a national bank that was recognized by J.D. Power for the great banking experience it provides in Florida. It has numerous branches in Bradenton, Lakeland, Apopka, Orlando, and other cities throughout the state.

You can open a checking or online savings account without having to worry about an opening deposit requirement and won’t be charged a monthly fee for any checking account.

If you do face a fee for a savings account, there are several ways to get it waived. Fifth Third also offers an extensive ATM network, which will give you access to more than 50,000 ATMs across the country.

Additionally, if you get paid via direct deposit in a Fifth Third account, you may access your paycheck up to two days early. For questions and concerns, you can reach out to Fifth Third’s customer service team 6-days a week.

9. TIAA Bank

TIAA Bank is the largest regional bank in the Sunshine State. You can find its financial centers in Jacksonville, Clearwater, Boca Raton, Coral Gables, Fort Lauderdale, Naples, and Fort Myers.

In addition to a personalized banking experience, this Florida bank provides a checking account featuring low fees and no transaction limits, a savings account with no monthly account fees and competitive rates, and three different types of CDs.

Plus, the bank is digitally savvy and provides online banking tools so you can keep tabs on your accounts, set a budget and savings goals, make transfers, pay bills, and send money with Zelle. If you’re interested in investing, TIAA Bank will give you the opportunity to invest in precious metals and foreign currencies.

10. Capital One

Capital One is a national bank that’s known for its flagship 360 Checking account. With a 360 Checking account, you can enjoy an attractive interest rate, access to more than 70,000 fee-free ATMs across the U.S., and 24/7 mobile banking.

You also won’t be on the hook for any monthly fees and Capital One will automatically decline any transitions that overdraw your balance for no extra charge.

Even though Capital One does not have any physical branches in Florida, you can apply for and manage your accounts online. Other benefits of Capital One include early paycheck, which can allow you to receive your incoming funds up to two days early, free financial coaching sessions, and a well-designed mobile app.

11. Raymond James Bank

Raymond James Bank is based in Florida. It’s an affiliate of Raymond James, which is a financial company with headquarters and one branch location in St. Petersburg. Through its Enhanced Savings Program, you’ll be able to earn interest on certain cash if you link your brokerage account to a high-yield Raymond James bank account.

You can also receive yields that are higher than traditional checking or savings accounts without bank fees or holding periods. Raymond James also offers a plethora of mortgage products, such as fixed rate and adjustable rate mortgages, interest-only mortgages, jumbo mortgages, pledged securities mortgages, construction mortgages, and home equity lines.

12. PNC Bank

PNC Bank is one of the largest traditional banks in the U.S. with nearly 200 branches in Florida. It offers the PNC Standard Savings account, a children’s savings account, and Virtual Wallet, which pairs a traditional checking and savings account. If you decide on the Virtual Wallet, you can enjoy a generous sign-up bonus and no fees.

When it comes to CDs, you can choose from a plethora of options including fixed rate CDs, ready access CDs, fixed rate IRA CDs, callable CDs, variable CDs, and stepped rate CDs. Additionally, the bank goes the extra mile with free budgeting tools and competitive interest rates for account holders that meet certain criteria. As an added bonus, PNC has a reputation for stellar customer service.

13. Discover Bank

Discover Bank is known for its credit cards. However, it’s an online bank with other banking products for Florida residents. Not only does Discover offer cash back on debit card purchases, it doesn’t charge monthly maintenance fees, insufficient funds fees, or overdraft fees.

While there are no branch locations in Florida, Discover has an intuitive mobile banking app and is part of a large ATM network of more than 60,000 fee free ATMs. In addition to checking accounts and savings accounts, you can turn to Discover for credit cards with various rewards and loans, like personal loans, student loans, home equity loans, and mortgage refinancing.

14. Wells Fargo

Wells Fargo is a major financial institution with more than 600 branches and thousands of ATMs throughout Florida. At Wells, you’ll find a full suite of banking products and services, such as checking accounts, savings accounts, certificates of deposit (CDs), credit cards, personal loans, and home loans.

You can choose from a basic, no-frills free checking account or opt for an interest checking account or a checking account for a teen or young adult. There are also a few saving account options, like a goal-based savings account and a high-interest savings account.

While you can visit a local branch if you prefer an in-person banking experience, you may also take advantage of online and mobile banking. In addition, Wells offers other conveniences like Zelle money transfers and online bill pay.

15. My eBanc

My eBanc is an online savings bank that serves customers in Florida and other parts of the U.S. It’s part of Banco Bradesco, a large bank in Latin America, which is an FDIC insured institution chartered in Florida. As a My eBanc customer, you’ll have access to several products that can help you save money and achieve various financial goals.

The SuperSaver Money Market account requires a $5,000 minimum deposit but offers perks such as a competitive interest rate, unlimited deposits, money management tools, and mobile check deposit. Other popular accounts you might consider include the eRelationship Savings account and Advantage Checking account. My eBanc also offers online time deposits with terms between 6 months and 36 months.

​​Types of Banks in Florida

The ideal bank depends on your particular banking preferences. In the Sunshine State, most banks are either national banks, regional banks, community banks, or online banks. Let’s take a closer look at how each banking option works.

National Banks

National banks are common in larger cities throughout Florida. If you’re looking for a wide range of banking products, you’re sure to find them at national banks, such as Wells Fargo, PNC Bank, and Wells Fargo.

Regional Banks

Regional banks have branches in certain regions of the U.S. In most cases, these banks are mid sized and offer a good mix of personal banking and business banking products. A few examples of regional banks in Florida include Regions Bank and TIAA Bank.

Community Banks

Community banks serve customers in specific geographic areas. Also known as local banks, community banks are similar to credit unions in that they focus on personal customer service and community outreach. Community Bank of the South and Mainstreet Community Bank of Florida are two community banks in Florida.

Online Banks

Online banks don’t have physical locations in Florida but serve individuals and businesses with online banking services. Since they have less overhead costs than banks with brick-and-mortar locations, online banks tend to offer more competitive interest rates and minimal to no fees.

Bottom Line

If you live or work in Florida, there are many reputable banking options available to you. As you explore various banks and credit unions, consider their accounts and services, fees, interest rates, customer service, and perks. Good luck in your search for the best bank in Florida.

Frequently Asked Questions

What are the largest banks in Florida?

The largest banks in the Sunshine State include Bank of America, Wells Fargo, and Fifth Third Bank. These banks have many branches throughout the state.

Should I choose an online bank?

If you’re comfortable with the internet or mobile apps, online banking from a place like Ally Bank and CIT Bank can be a smart choice. This is particularly if you can find the products you need with competitive interest rates and low fees.

What is the best bank for in person service?

Florida offers many great options if you prefer an in-person banking experience. You might want to consider Regions Bank, TIAA Bank, or ​​Raymond James Bank.

How do I open a bank account in Florida?

Most banks allow you to open a deposit account online, from the comfort of your own home or office. Be prepared to make a minimum opening deposit and provide basic personal information, like your name and Social Security number.

Do Florida banks charge fees?

In most cases, larger brick and mortar banks require customers to pay fees like monthly service fees, wire transfer fees, overdraft fees, excessive withdrawal fees, ATM fees, and late payment fees. You might be able to get them waived, depending on the bank and the type of account you open.

What is the best local bank in Florida?

There are many local banks in the Sunshine State that each come with their own benefits and drawbacks. Several options you might want to explore include Florida Shores Bank, Seaside Bank and Trust, and One Florida Bank.

What is the difference between a bank and a credit union?

Anyone can become a customer at a bank. If you want to take advantage of the products and services at a credit union, you’ll need to meet certain criteria and join it.

Source: crediful.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

One thing I love about Millennials and Zoomers is how freely we share advice.

Case in point, there are now countless wealth coaches and personal finance gurus on TikTok recording their best tips on saving, investing, and achieving financial freedom faster.

And we’re hungry for their advice. According to CNN, the hashtag “#personalfinance” alone has a total of four billion views, with “#financialliteracy” and “#financetiktok” not far behind.

However, while the intent is always sound, the tips themselves aren’t. There are some misguided and potentially devastating personal finance myths being perpetuated on TikTok these days, so I am here to address them head-on.

Let’s debunk seven of the most common TikTok money myths before you make a potentially dangerous financial move.

What’s Ahead:

1. “You can (and should) get rich quick”

Debunked: 7 TikTok Money Myths - "You can (and should) get rich quick"

The implication

“Get rich quickly and easily by following my personal finance advice.”

Here’s how to instantly spot a personal finance influencer who abides by a “get rich quick” philosophy: just look for the lime green Lamborghini in the background.

Once they’ve given you a few seconds to lust after their six-figure Italian whip, they’ll start telling you how they “turned $5,000 into $723,000” by following “three simple rules of investing” or some such promise. Sounds appealing.

The reality

Multiplying money on that scale, in that little time, always involves a staggering amount of risk, luck, or both. This is assuming, of course, that the influencer is even being 100% truthful – and that background Lambo isn’t a rental.

It’s entirely possible that this person really has gotten extremely lucky on some clandestine investing opportunity, but lottery winners aren’t financial advisors.

Actual financial advisors, and their very rich clients, will give you this advice: 

“Get rich slowly.”

If you wouldn’t spend your life savings on lottery tickets, you shouldn’t get your financial advice from TikTok influencers who got lucky, either. The key is to get rich without the risk, and here’s exactly how to do it, step-by-step.

2. “Day trading is easier than you think”

The implication

Historically, only the rich and well-connected could make money on the stock market. But now that we have apps like Robinhood and Webull, everyday investors like you and me can buy, sell, and trade stocks ourselves, getting rich in the process just like day traders on Wall Street.

The reality

97% of day traders lose money.

That’s according to a large-scale study of day traders, where the researchers concluded:

“We show that it is virtually impossible for individuals to day trade for a living, contrary to what course providers claim.”

By contrast, “only” 70% or so of gamblers in Vegas lose money, according to the Wall Street Journal. So your money is safer on the roulette table than taking a TikTokers’ investing advice (but still, don’t gamble).

3. “Rich people look rich”

Debunked: 7 TikTok Money Myths - "Rich people look rich"

The implication

Earn big, spend big. As your income level rises and you start to feel “rich,” it’s time to start acting like it. Get a luxury apartment, lease a Mercedes, and don’t hesitate to buy that $2,000 purse.

Besides, what’s the point of working hard if you’re not playing hard?

This one is definitely more of an implication than a direct piece of advice. I don’t know of any TikTokers who are outright saying “spend all of your money” – but there are certainly plenty who are leading by example.

The reality

Rich people become rich precisely because they don’t spend money – they invest it. There’s a saying by famous-yet-frugal YouTuber Scotty Kilmer that I think about all the time:

“Broke people buy BMWs, and rich people buy Toyotas.”

Rich (or soon-to-be-rich) people know that if they buy a Toyota instead of a BMW at age 30, and invest the $30,000 difference at 10% APY, they’ll have:

  • $77,812 when they’re 40.
  • $201,825 when they’re 50.
  • $843,073 when they retire at 65.

The point of this anecdote isn’t to throw shade at Bimmer, but rather, to highlight how rich people think differently before making a purchase. They don’t think:

“How much can I afford?”

But rather:

“How much can I save and invest?”

In short, rich people don’t lead extravagant lifestyles – they lead frugal, yet comfortable lifestyles now so they can live however they want later.

4. “Live on a shoestring budget”

The implication

On the complete other side of the spectrum, there are TikTokers who advocate a shoestring lifestyle, where rigorous budgeting and extremely limited pleasure spending are the only viable pathways to financial freedom.

The reality

It’s totally OK to buy nice things and treat yourself.

In the previous example, yes, a BMW costs $30,000 more than a Toyota – and if you invest that money instead of buying a fancier car, you’ll have a fortune waiting for you by retirement.

That being said, if the BMW brings you joy and makes you happy (and you can afford it), buy it.

The key to achieving financial mindfulness isn’t to spend less – it’s to spend more mindfully on the things that truly matter to you. There are influencers out there who say you should stop going out to eat cold turkey because a restaurant meal for two can easily exceed $60 or even $100.

But financial mindfulness says that if that meal helps you build a relationship with someone, it’s worth it.

Draconian saving can be just as misguided as wanton spending. The key, then, is to determine how much you can safely spend each month, and then to spend that money on the people and things that bring you the most joy.

5. “Cryptocurrency will make you rich”

Debunked: 7 TikTok Money Myths - "Cryptocurrency will make you rich"

The implication

This one’s pretty straightforward, and I have heard it straight from countless TikTokers’ mouths: crypto will make you rich.

Forget the corrupt, manipulated stock market – Bitcoin, Ethereum, and Dogecoin will bring prosperity and financial salvation to Millennials and Zoomers.

I mean, what other investment vehicle has provided anything even close to the 750,000,000% ROI that Bitcoin has since 2011?

I got rich off crypto and you will, too – hop aboard before it’s too late.

The reality

Cryptocurrency is like a fast-moving, rickety roller coaster at the county fair. The foundation hasn’t completely crumbled, but the wooden boards and screws holding it up are falling off with each passing car.

Hop aboard the crypto train at your own peril.

It’s true that Bitcoin has had a miracle run since 2011, rising from $0.008 to a peak of around $65,000 in April 2021 and making a lot of people very, very rich. But even diehard crypto fans have acknowledged that a “Bitcoin winter” is coming – that is, if it hasn’t already.

The Bitcoin winter is just one of the many huge risks to a crypto investment. The others (like China’s clampdown on mining) are fast approaching the roller coaster’s foundation with a sledgehammer.

Can Bitcoin still make you rich? Maybe, but there are plenty of safer rides at the carnival.

6. “Just copy the investments of rich people”

The implication

You can’t copy athletes to win gold medals, nor can you copy New York Times Best Sellers to sell more books.

However, you can totally copy the investing strategy of rich people to get rich.

In fact, they want you to copy them – either because your investment makes their investment more valuable, or simply out of the goodness of their heart. Warren Buffet famously shares his trades with the public so they can borrow and benefit from his wisdom.

So why spend 14 hours a day researching good trades when you can just copy someone else’s homework – especially when they ask you to?

The reality

Rich people can afford to make extremely risky investments and lose money that you and I can’t afford. For that reason, they shouldn’t always be followed into battle.

Warren Buffet is also famous for admitting when he’s made a mistake. In 2014, he confessed that he’d held onto shares of Tesco for way too long, costing him and his investors $444 million. Berkshire Hathaway’s investors may have been able to shrug off the loss, but any outsiders emulating Buffet’s moves may have been screwed.

Copying the investments of rich people may be a viable strategy if their investments fit within your financial goals and risk tolerance. For help determining whether that’s the case, you want to talk to a wealth advisor.

7. “You don’t need a wealth advisor”

Debunked: 7 TikTok Money Myths - "You don't need a wealth advisor"

The implication

Thanks to zero-commission trading platforms, you no longer need to buy and trade stocks through a sweaty stockbroker in some Manhattan office.

By that same logic, the emergence of robo-advisors and the fountains of free financial advice on TikTok have eliminated the need for old-fashioned wealth advisors. After all, why give someone 2% of your hard-earned gains when it’s never been easier to invest your money yourself?

The reality

The recent trifecta of online brokers, robo-advisors, and personal finance gurus on social media has done wonders empowering Millennials and Zoomers to handle our money better. The TikTok DIYers certainly have one thing right: it’s never been easier to make your own trades.

However, despite birthing a renaissance in financial literacy, nothing on TikTok can replace the tailored, one-on-one advice you’d get from a professional wealth advisor.

Robo-advisors can personalize your investing strategy to an extent, but they can’t play a direct role in helping you navigate the markets and make good decisions. 

Summary

There’s plenty of sound personal finance advice on TikTok, but it only takes one bad tip to cost you money.

For that reason, it literally pays to separate the wheat from the chaff. Not everyone who’s made money is a skilled investor – some are just lucky.

Read more:

Source: moneyunder30.com

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Apache is functioning normally

June 7, 2023 by Brett Tams
$43,000 a year is how much an hour? Learn how much your 43k salary is hourly. Plus find a 43000 salary budget to live the lifestyle you want.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.


43k salary is a solid hourly wage when you think about it.

When you get your first job and you are making just above minimum wage making over $43,000 a year seems like it would provide amazing opportunities for you. Right?

The median household income is $68,703 in 2019 and increased by 6.8% from the previous year (source). Think of it as a bell curve with $68K at the top; the median means half of the population makes less than that and half makes more money.

The average income in the U.S. is $48,672 for a 40-hour workweek; that is an increase of 4% from the previous year (source). That means if you take everyone’s income and divided the money out evenly between all of the people.

But, the question remains can you truly live off 43,000 per year in today’s society since it is below both the average and median household incomes. The question you want to ask all of your friends is $43000 per year a good salary.

In this post, we are going to dive into everything that you need to know about a $43000 salary including hourly pay and a sample budget on how to spend and save your money.

These key facts will help you with money management and learn how much per hour $43k is as well as what you make per month, weekly, and biweekly.

Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…

Can I make a living on this salary?

$43000 a year is How Much an Hour?

When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 43k a year hourly. That way you can decide whether or not the job is worthwhile for you.

$43000 a year is $20.67 per hour

Breakdown Of How Much Is 43k A Year Hourly

Let’s breakdown, how that 43000 salary to hourly number is calculated.

For our calculations to figure out how much is 43K salary hourly, we used the average five working days of 40 hours a week.

Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $43000 by 2,080 working hours and the result is $20.67 per hour.

43000 salary / 2080 hours = $20.67 per hour

Just above $20 an hour.

Key Points….

  • That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
  • You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.

Just an interesting note… if you were to increase your annual salary by $5K to $48k per year, it would increase your hourly wage to over $23 an hour – a difference of $2.41 per hour.

To break it down – 48000 salary / 2080 hours = $23.08 per hour

That difference will help you fund your savings account; just remember every dollar adds up.

How Much is $43K salary Per Month?

On average, the monthly amount would be $3,583.

Annual Salary of $43,000 ÷ 12 months = $3,583 per month

This is how much you make a month if you get paid 43000 a year.

$43k a year is how much a week?

This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $43k salary a year, how much can I expect to make at the end of the week for my effort?

Once again, the assumption is 40 hours worked.

Annual Salary of $43000/52 weeks = $827 per week.

$43000 a year is how much biweekly?

For this calculation, take the average weekly pay of $827 and double it.

$827 per week x 2 = $1,654

Also, the other way to calculate this is:

Annual Salary of $43000 / 26 weeks = $1654 biweekly.

How Much Is $43K Salary Per Day

This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.

8 hours x 52 weeks = 260 working days

Annual Salary of $43000 / 260 working days = $165 per day

If you work a 10 hour day on 208 days throughout the year, you make $206 per day.

$43000 Salary is…

$43000 – Full Time Total Income
Yearly Salary (52 weeks) $43,000
Monthly Wage $3,583
Weekly Pay (40 Hours) $827
Bi-Weekly Pay (80 Hours) $1,654
Daily Wage (8 Hours) $165
Daily Wage (10 Hours) $206
Hourly Wage $20.67
Net Estimated Monthly Income $2,735
Net Estimated Hourly Income $15.78
**These are assumptions based on simple scenarios.

43k a year is how much an hour after taxes

Picture of figuring out 43k a year is how much an hour after taxes.

Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.

When you make below the average household income, the amount of taxes taken out hurts your hourly wage.

Every single tax situation is different.

On the basic level, let’s assume a 12% federal tax rate and 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.

So, how much an hour is 43000 a year after taxes?

Gross Annual Salary: $43,000

  • Federal Taxes of 12%: $5,160
  • State Taxes of 4%: $1,720
  • Social Security and Medicare of 7.65%: $3,290

$43k Per Year After Taxes is $32,830

This would be your net annual salary after taxes.

To turn that back into an hourly wage, the assumption is working 2,080 hours.

$32830 ÷ 2,080 hours = $15.78 per hour

After estimated taxes and FICA, you are netting $32,830 per year, which is $10,170 per year less than what you expect.

***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***

In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody that lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.

Thus, your yearly gross $43000 income can range from $29390 to $34550 depending on your state income taxes.

That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $43,000 income.

43k salary lifestyle

Picture of what a $43K salary lifestyle is like.

Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person. And there’s no wrong or right, it is what works best for you.

One of the biggest factors to consider is your cost of living.

In another post, we detailed the differences of living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $43,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.

To stretch your dollar further in the high cost of living area, you would have to probably live cheap and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.

As we noted earlier in the post, $43,000 a year is below the average income that you would find in the United States. Thus, you have to be wise with how you spend your money.

What a $43,000 lifestyle will buy you:

If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.

  • You are able to rent in a decent neighborhood in LCOL and maybe a MCOL city.
  • You should be able to meet your expenses each and every month.
  • Participate in the 200 envelope challenge.
  • Ability to make sure that saving money is a priority, and very possibly save $3000 in 52 weeks.

When A $43,000 Salary Will Hold you Back:

However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 40k a year is going to be pretty darn difficult.

There are two factors that will keep holding you back:

  • You must pay off debt and cut all fun spending and extra expenses.
  • Break the paycheck to paycheck cycle.

It is possible to get ahead with money!

It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.

$43k Salary to Hourly

We calculated how much $43,000 a year is how much an hour with 40 hours a week. But, more than likely, you work more or fewer hours per week.

So, here is a handy calculator to figure out your exact hourly salary wage.

$43K a year Budget – Example

Picture of planing how to make a budget with $43000 a year in income.

As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money leftover is left for fun spending.

If you want to know how to manage 40k salary the best, then this is a prime example for you to compare your spending.

You can compare your budget to the ideal household budget percentages.

recommended budget percentages based on $43000 a year salary:

Category Ideal Percentages Sample Monthly Budget
Giving 10% $251
Savings 15-25% $645
Housing 20-30% $932
Utilities 4-7% $143
Groceries 5-12% $287
Clothing 1-4% $22
Transportation 4-10% $143
Medical 5-12% $179
Life Insurance 1% $11
Education 1-4% $11
Personal 2-7% $32
Recreation / Entertainment 3-8% $81
Debts 0% – Goal $0
Government Tax (including Income Tatumx, Social Security & Medicare) 15-25% $847
Total Gross Monthly Income $3583
**In this budget, prioritization was given to basic expenses and no debt.

Is $43,000 a year a Good Salary?

Picture debating whether or not $43000 a year a good salary.

As we stated earlier if you are able to make $43,000 a year, that is a decent salary. You are making more money than the minimum wage and close to double in many cities.

While 43000 is a good salary starting out in your working years. It is a salary that you want to increase before your expenses go up or the people you provide for increase.

However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. It is okay to be driving around a beater car while you work on increasing your salary.

This $43k salary would be considered a lower middle class salary. This salary is something that you can live on if you are wise with money.

Check: Are you in the middle class?

In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).

The question you need to ask yourself with your 43k salary is:

  • Am I maxed at the top of my career?
  • Is there more income potential?
  • What obstacles do I face if I want to try to increase my income?

In the future years and with possible inflation, many modest cities a 43,000 a year will not a good salary because the cost of living is so high, whereas these are some of the cities that you can make a comfortable living at 43,000 per year.

If you are looking for a career change, you want to find jobs paying at least $65000 a year.

Is 43k a good salary for a Single Person?

Picture of lady asking is 43K a good salary for a single person.

Simply put, yes.

You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.

Learn exactly what is a good salary for a single person today.

Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $43000 per year.

And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.

Is 43k a good salary for a family?

Picture of kids and parents wondering is 43K a good salary for a family.

Many of the same principles apply above on whether $43000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.

The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child.

That means that amount of money is coming out of the income that you earned.

So, the question really remains is can you provide a good life for your family making $43,000 a year? This is the hardest part because each family has different choices, priorities, and values.

More or less, it comes down to two things:

  1. The location where you live in.
  2. Your lifestyle choices.

You can live comfortably as a family on this salary, but you will not be able to afford everything.

Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 43000 per year, then the combined income for the household would be $86,000. Thus making your combined salary a very good income.

Learn how much money a family of 4 needs in each state.

Can you Live on $43000 Per Year?

Image of a stack of bills to see can you live on $43000 per year.

As we outlined earlier in the post, $43,000 a year:

  • $20.67 Per Hour
  • $165-206 Per Day (depending on length of day worked)
  • $827 Per Week
  • $1654 Per Biweekly
  • $3583 Per Month

Next up is making $45000 a year.

Like anything else in life, you get to decide how to spend, save and give your money.

That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.

In addition, if you are early in your career, starting out around 34,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and still making $43k, then you probably need to look at asking for pay increases, pick up a second job, or find a different career path.

Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.

But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.

Learn exactly how much do I make per year…

One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.

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$43,000 a year is how much an hour? Learn how much your 43k salary is hourly. Plus find a 43000 salary budget to live the lifestyle you want.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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Apache is functioning normally

June 6, 2023 by Brett Tams
Table of Contents
show

Highlights

  • Trading to get rich is fundamentally different than investing to build wealth
  • Not knowing the difference sets you down “an extraordinarily dangerous path…”

Aswath Damodaran recently appeared on The Long View podcast…

Damodaran is a well-known professor of corporate finance and valuation at the Stern School of Business at NYU. In other words, he studies companies, stocks, and how they’re valued. The investing world greatly respects him.

Morningstar’s podcast hosts ended their episode on a light note by prompting ChatGPT to create a question that would “annoy” Damodaran. ChatGPT asked:

Can you give me a hot stock tip that will make me rich quickly, without any research or understanding of the company’s fundamentals?

Damodaran – a man whose life and career are built on a calculated understanding of investing fundamentals – was amused, but admitted he hears similar questions frequently. He responded to such investors:

They miss the essence of investing. You don’t invest to get rich. You invest to preserve and grow wealth. I think the minute you think of investing as a pathway to getting rich, you set yourself up for all kinds of mistakes. You overreach. You overbet. Because that’s the way you get rich. You gamble.

I think we need to redefine investing. Investing is about preserving and growing wealth, which means if you’re a doctor, go back and do your job. Earn your income. That’s going to be at the heart of your investing. If you’re spending most of your time as a doctor looking through the stock pages trying to pick stocks, your wealth is not growing. Your investing can be great, but it does not pay off.

So I think that it’s much more common than we accept. They’re traders. They’re not investors. They want to trade their way to riches.

And they look at success stories. There’s a selection bias. Now you have YouTube videos of people who got rich in 5 years by trading. And you use those as role models. It’s an extraordinarily dangerous pathway you’re on because history suggests sooner or later you’re going to leave that casino with nothing in your pocket.

In Other Words…

Damodaran’s advice blends perfectly with what we espouse on The Best Interest.

Be an investor. Preserve and grow your wealth. Ignore the noise.

Thank you for reading! If you enjoyed this article, join 6000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.

-Jesse

Want to learn more about The Best Interest’s back story? Read here.

If you prefer to listen, check out The Best Interest Podcast.

Source: bestinterest.blog

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Apache is functioning normally

June 6, 2023 by Brett Tams

Life insurance coverage is an essential financial tool.

The proceeds from these policies can often make the difference between loved ones dealing with long-term financial hardship or being able to move forward with paying off debts or paying their everyday living expenses in the case of the unexpected.

aflac life insurance company reviewWhen considering the best life insurance policy for you, it is important to determine the type and the amount of coverage that you require, as you don’t want those you care about to be underinsured.

An equally important part of the equation is the life insurance carrier from which you purchase your plan. Something to consider as well is whether your prospective insurance company provides key person insurance.

It is often overlooked or not considered when planning for the future, but it can be the difference between a business making it or not upon death or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. Take the time and see if it’s something you need to get for your business or firm.

You will want to be sure that the carrier is strong and stable from a financial standpoint. Another key criterion is that the carrier has a good reputation for paying out its claims. One company that meets these factors is Aflac.

The History of Aflac Life Insurance Company

Aflac (American Family Life Insurance Company) began offering insurance coverage to its customers more than 60 years ago. The coverage that this company is considered to be “voluntary” in that the policies can supplement other insurance coverage that an individual may already have.

The founders of Aflac are three brothers – John, Paul, and Bill Amos. In starting this company, the brothers saw a need for financial protection if a medical need occurs. Aflac had its beginning in Columbus, Georgia, and it started with just 16 employees and 60 sales agents.

In just the first year, Aflac had more than 6,400 policyholders and roughly $388,000 in total assets. Over time, the company grew and expanded its list of coverage offerings to its policyholders.

One way that the company grew exponentially was by offering its products to the workplace. Here, large numbers of employees of a company could sign up for protection at one time. As the company grew, it started to offer its products internationally, and in 1974, the products were offered in Japan. Within just one year of this occurrence, Aflac has written roughly $25 million in insurance premiums. During that same year, the company also started trading on the New York Stock Exchange.

The 1980s were a time of substantial growth for Aflac – and in 1982, the company had more than $1 billion in assets. In the decade of the 1990s, the company began its now-famous advertising campaign, which features the Aflac duck.

In the mid-1990s, the company also introduced a SmartApp. This allowed agents to issue insurance business electronically – which sped up the process a great deal and allowed customers to be covered much more quickly as well.

Due in large part to its innovative advertising strategy, 9 out of 10 people recognize the Aflac name and the brand. Ever since its beginning back in 1955, Aflac has put the customer first. It does so primarily by paying out its policyholder claims in a timely and efficient manner.

Today, Aflac – a Fortune 500 company – has more than 50 million policyholders. In addition to just offering protection products, Aflac is also involved in the communities in which it serves. For example, in 2011, the company contributed more than $1 million to the Red Cross for tsunami relief in Japan. And, in 2012, the company was rated as number 69 on Newsweek’s “Green Rankings” of the largest 500 companies. By the year 2013, Aflac had appeared on Fortune magazine’s list of the World’s Most Admired Companies for the 13th time.

The company continues to grow and prosper, due in large part to helping its customers protect against the loss of income and assets, as well as helping them to pay supplemental medical expenses. Aflac has a wide reach in terms of attracting potential customers. Its key distribution channels include individuals at the work site, in retail locations, and in their home. Presently, Aflac is the number one provider of voluntary insurance at the worksite in the U.S.

Aflac’s Insurer Ratings and Better Business Bureau Grade

Aflac has very high life insurance company ratings that are provided by the insurer rating agencies. These ratings are indicative of the company’s overall financial strength, as well as its timely benefit payout to the company’s policyholders. These ratings include the following:

  • A+ from A.M. Best
  • A+ from Standard and Poor’s
  • As3 from Moody’s

In addition, Aflac is also an accredited member of the Better Business Bureau (BBB). It has been a member of the BBB since January 1, 1958. Also, the company has been given a grade of A+ from the Better Business Bureau (on an overall grade scale of A+ to F).  This puts them on par with other top life insurance companies like Transamerica or Banner.

Throughout the past three years, Aflac has closed a total of 497 complaints through the BBB. Of these 497 complaints, 357 had to do with problems with the company’s products or services. Another 96 of these complaints were concerning billing or collections issues, 25 had to do with advertising or sales issues, 11 were about delivery issues, and eight were in regard to guarantee/warranty issues. There are also 20 customer reviews that have been posted on the Better Business Bureau’s website in regard to Aflac.

Life Insurance Products Offered by Aflac

Aflac offers several options for life insurance coverage. These include both term and permanent protection. With term life insurance, a policyholder is covered with death benefit protection only, without any type of cash value or savings build-up. Term life insurance is purchased for a certain period, or “term,” such as ten years, 15 years, 20 years, or even for 30 years, depending on the policy holder’s needs.

Permanent life insurance coverage offers both death benefit protection, as well as cash value, build up. With a permanent life insurance policy, the coverage can last throughout the policy holder’s life, provided that he premiums remain paid.

This type of life insurance protection will also allow tax-deferred growth of the funds that are inside of the cash value component. This means that there are no taxed due on the growth of these funds unless or until they are withdrawn.

A permanent life insurance policyholder may be able to borrow or to withdraw these funds for any reason at all – including the payoff of debt, the supplementing of retirement income, or the assurance that a child or a grandchild will be able to pay for their college expenses.

There are no medical questions to be answered on the Aflac life insurance policies. This means that even those individuals who may have certain health conditions can still qualify for life insurance coverage.

The plans offered by Aflac are also portable. This means that if an individual purchases a plan as a part of his or her employee benefits package if they leave the company, they may still take their life insurance coverage with them.

Aflac also offers juvenile life insurance coverage. With these plans, a child may be protected by providing insurability as an adult, as well as by providing them with a jump-start on the road to financial independence.

The company also offers AD&D coverage (accidental death). With the Aflac accidental death coverage, if the insured passes away due to injuries that are sustained from a covered accident, then an additional amount of proceeds will be paid out to his or her named beneficiary.

On the insurance plans that are offered through employers by Aflac, there is typically no direct cost to the company. Rather, employees can pay for their coverage via direct payment of the premiums through their weekly paychecks.

Aflac offers a life insurance calculator directly on their website. This can help an individual with determining just how much life insurance coverage they may require based on their specific situation.

Other Products Offered

In addition to just life insurance coverage, Aflac offers a wide range of other protection and supplemental products. These include the following:

  • Accident insurance – The accident insurance plan via Aflac offers cash benefits to help provide financial support during the various stages of accident care, as well as recovery. These proceeds may be used by the policyholder to help with paying for emergency treatment, or for treatment-related lodging and transportation.
  • Cancer insurance – The cancer insurance coverage that is offered via Aflac can help to provide a lump sum of proceeds that may be used for a wide variety of needs, such as treatment, living expenses, or uninsured medical procedures.
  • Critical illness insurance – Critical illness insurance protection can help to provide funds for helping with the cost of treatment of a covered illness. Having funds available can provide the peace of mind that may be required for helping an individual to recover.
  • Hospital intensive care insurance – Charges from a hospital stay can often be substantial – and in some cases, these may or may not be covered through a regular health insurance policy. With that in mind, a supplemental hospital insurance plan through Aflac can help. With Aflac, these funds can be made available very quickly, as the company has a one-day payment of claims.
  • Hospital indemnity insurance – With hospital indemnity insurance, policyholders can also be assured that uncovered expenses from their regular health insurance can be fully or partially taken care of.
  • Dental insurance – The dental insurance coverage that is offered through Aflac provides a wide variety of benefits, with no networks, deductibles, or pre-certification requirements to deal with. Just go through your local dentist and have your insurance information with you.
  • Vision insurance – Regular eye exams can do much more than just help with correcting one’s vision. These can also help to point out other health-related issues, such as high blood pressure or cholesterol, diabetes, or even a brain tumor. Having this coverage can be well worth the premium cost.

Also, Aflac also helps its client/employers with setting up benefits, such as through cafeteria plans. COBRA administration is also available through Aflac.

How to Get the Best Quotes on Life Insurance Coverage

When searching for life insurance coverage, it is important to work with an independent company that can help you in finding the very best rates. An independent company or agency will not be associated with just one single insurance carrier, but rather with multiple carriers. Because of this, you will be much better able to compare life insurance policies, benefits, and premium rates – and from there you can determine which of these will be the best for you and your specific needs.

If you are ready to begin the process of finding the best life insurance plan, then we can help you. We work with many of the top-rated life insurance carriers in the marketplace today, and we will assist you with obtaining all of the details that you require for making an informed purchase decision. We can do so for you very quickly, easily, and conveniently – all from your home computer, and without the need to meet in person with a life insurance agent. When you are ready to being, just fill out the quote form on the aide of this page.

We understand that the purchase of life insurance can be somewhat overwhelming. There are a number of variables that you need to be aware of, and you want to be sure that you are choosing the proper type and amount of insurance coverage.

The good news is that today, there are many options that are open to you. We will assist you with finding the one that best fits your specific coverage needs. So, contact us today – we’re here to help.

Source: goodfinancialcents.com

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Apache is functioning normally

June 6, 2023 by Brett Tams

Investment banking is a specialized area of the financial services industry that focuses on aiding governments, corporations and other entities to raise capital and complete mergers and acquisitions. The term “investment banker” refers to an individual who works for an investment bank that offers these services.

Investment banking is typically considered to be a prestigious career, and becoming an investment banker can be lucrative for those willing to complete the necessary education and training.

What Is an Investment Banker?

Investment bankers work for investment banks, which are effectively middlemen between entities that need capital and entities that provide it. In simpler terms, investment bankers help their clients to expand and grow their businesses or operations.

Another way to think of an investment banker is as a financial advisor to governments, corporations, and other businesses. As part of their professional duties, they may guide clients in making financial decisions that directly or indirectly affect their bottom line.

Investment bankers are most often associated with Wall Street, though they work in cities throughout the world. Some of the largest investment banks in the United States include Goldman Sachs & Co., Morgan Stanley, J.P. Morgan, Bank of America Merrill Lynch, and Blackstone.

What Do Investment Bankers Do?

Investment bankers play an important role in helping companies achieve their financial goals. When a corporation is planning an upcoming expansion project, for instance, its board may turn to an investment bank for help. An investment banker can analyze the company’s financial situation to determine the best way to meet its needs.

In terms of the specific tasks an investment banker may carry out, that depends largely on the type of clients they work with.

Assisting With Initial Public Offerings

Investment bankers can play a critical role in helping clients secure capital. Depending on the client, this can be done through a variety of means, including the launch of an initial public offering (IPO).

An initial public offering, or IPO, allows private companies to offer shares of its stock to the public for the first time. The investment banker assists by creating a prospectus explaining the details of the IPO, marketing it to potential investors, and navigating Securities and Exchange Commission (SEC) compliance rules.

Investment bankers are key to whether the company’s IPO is a success. They help determine the initial price of the offering, which is critical. Pricing too high could scare off investors, while going too low could undercut their client’s profits.

IPO investing at your fingertips.

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Bond Issuance

Government agencies and corporations often use bonds as a fundraising tool. For example, if a city government needs money to improve local roads they might issue a municipal bond to fund the project. Investors purchase the bonds on the bond market, giving the government the capital it needs to complete the road updates. Investors can hold onto the bond and earn interest on it, or they can sell it to another investor.

As with an IPO, an investment banker’s role in issuing bonds may include preparing the bond issuance documents, setting a price, submitting it to the SEC for approval, and marketing the bond to investors to raise capital.

Recommended: Federal Reserve Interest Rates, Explained

Equity and Debt Financing

Equity and debt financing are two other ways that companies can tap into funding. With equity financing, companies raise capital by selling an ownership share in the business. Venture capital and private equity are common examples of equity financing.

Debt financing involves taking out loans or lines of credit, without giving up ownership stakes. An investment banker can help companies assess which type of financing makes more sense for their business model, and help them work through the process of securing the funding.

For example, investment bankers may work with startups to pitch angel investors, while they might help more established companies compare and select loan options.

Mergers and Acquisitions

Another common task that investment bankers assist companies with is mergers and acquisitions. In a merger, two companies enter into an agreement to become a single business entity. Each company is treated as an equal in the transaction. An acquisition, on the other hand, involves one company purchasing another.

In either type of arrangement, companies may use investment bankers to oversee the process. This could involve negotiating the terms of a merger or acquisition and reporting the details of the transaction to the SEC to ensure compliance. When a company considers an acquisition, investment bankers can also help identify and vet potential targets.

Recommended: What Happens to a Stock During a Merger?

Investing and Asset Management

While investment bankers’ duties primarily revolve around raising capital for their clients, there are other services they may perform. This can include things like:

•   Investment research and analysis

•   Buying and selling securities

•   Offering advisory services

•   Asset management

These services are similar to what a personal financial advisor might offer their clients.

How to Become an Investment Banker

If you’re interested in a career in investment banking, there are a few things to know. In terms of education, a bachelor’s degree is typically a minimum requirement for most investment banker jobs. Though some investment banks may look for candidates that have earned a higher degree of education, such as an MBA or a graduate-level degree in finance.

Aside from education, there are certain skills that may help you be successful as an investment banker. Those include:

•   Ability to perform under pressure

•   Good communication skills

•   Solid marketing skills

•   Firm grasp of financial markets and modeling

•   Strong attention to detail

Depending on your responsibilities, you may also need a securities license. That may include completing one of more of the following licensing exams:

•   Series 7 General Securities Representative Qualification Examination (GS)

•   Series 79 Investment Banking Representatives Exam

•   Series 63 Uniform Securities Agent State Law Exam

Before you can take these exams, you first have to be employed and sponsored by a FINRA-member firm or other self-regulatory organization member.

Taking and passing the Securities Industries Essentials (SIE) Exam could help improve your chances of being hired as an intern or junior employee. That process begins early, with many banks hiring summer interns more than a year ahead of the start of the program.

How Much Do Investment Bankers Make?

Investment bankers generally earn above-average salaries. Even at the entry level, it’s possible to make $100,000 or more, and salaries for top Wall Street bankers can easily range into the millions or tens of millions. But investment banking is one of the hardest jobs on Wall Street. So, if you’re not prepared to routinely work 100-hour weeks or constantly be on-call for your clients, it may not be the job for you.

The Takeaway

Investment bankers work primarily with institutional investors, governments and corporations rather than individual investors. But you can still benefit from the work investment bankers do behind the scenes indirectly.

Investment bankers may work in a variety of roles, such as helping facilitate IPOs, or mergers and acquisitions. It can be a lucrative career path, too, but generally requires a graduate-level education, and additional licensing.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.


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Apache is functioning normally

June 6, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.


The question of whether a car is an asset or a liability has been debated for decades.

The reason for the debate is that there are many types of cars in the world and each car serves different purposes.

In the past, many people bought cars that were used and old to save money, because they believed it was cheaper in the long run than purchasing new ones every few years. This mindset shifted after some studies showed that replacing your car more often actually costs you less over time in terms of maintenance cost and depreciation on your vehicle value when compared to keeping a newer model longer.

Nowadays, most consumers are aware that the car is an asset and are more willing to pay for a new one.

However, there is a huge caveat on how you purchase the car, the age of the car, and the purposes of the vehicle.

All in all, depreciation can eat into your car’s worth.

What’s your take on this debate?

Is a car an asset or liability? Answer this question by looking at the purpose of the vehicle, its value and how much it will cost to repair if damaged.

What is Considered an Asset?

The definition of an asset is broad and includes most things that have value. Assets are tangible or intangible property such as land, buildings, equipment, intellectual property such as patents and trademarks, or stocks.

This can be anything from a physical asset such as a house or equipment, to a more intangible asset such as a strong brand name or a loyal customer base.

Is a car an asset or liability?

Picture of a couple looking at a car discussing is a car an asset or liability.

A car is an asset to its owner because it took money to buy the vehicle. It is also a liability in that the cost of maintaining the car can be high, and depreciation on a new vehicle can eat into a person’s savings.

There is no definitive answer as to whether a car is an asset or a liability. It depends on the specific situation and the person’s circumstances.

For example, if someone needs a car to get to work, then the car would be considered an asset. However, if someone only uses their car for recreational activities, then the car would be viewed as a liability.

On the whole, cars are considered liabilities. They require regular maintenance, insurance, and other associated costs. However, there are a few exceptions. For instance, in some cases, a car can be used as collateral for a loan or as an investment vehicle.

Is a Car a Depreciating Asset?

Picture of a key with cash for is a car a depreciating asset.

A car is a depreciating asset because its value decreases over time. The depreciation of a car is based on a number of factors such as the age of the car, the make and model of the car, the condition of the car, and the miles on the car.

Cars are assets, but not smart investments as they will depreciate over time.

Reason # 1 – Wear and tear

Cars require a great deal of care and maintenance in order to keep them running smoothly. This includes everything from regular oil changes and tune-ups, to replacing worn-out parts and fixing dents and scratches.

In addition, cars depreciate in value over time due to normal wear and tear.

Reason # 2- Higher Mileage

The value of a mile decreases the more it is used. This is because the value of something depends on its rarity and when something becomes common, its value decreases.

The average car is only good for 200,000 miles. This is because of both the increased mileage and the cost of repairs as a car gets older.

Reason # 3- Cars become obsolete

Cars are becoming obsolete because new models and makes are constantly being released. This means that people want the newest and latest model, so they trade in their old car for a newer one.

Plus many of the parts for older cars become harder and harder to find. Thus, causing the cost to repair to escalate.

Reason # 4- Cars are not investments

Some people may argue if a house is an investment as well.

When you think of an investment, you want a certain rate of return on your money.

Most people use the stock market as a benchmark of earning 8% of the initial outlay of money. Thus, a car is an investment that depreciates over time. It will lose value as it gets older and the parts wear out.

If you want a return on your money, you should be asking is now a good time to buy stocks?

Can a Car Appreciate?

Yes, vintage cars and luxury sports cars have always been the exception. There are select vehicles that are in pristine condition with little to no mileage. These collector cars have a special fan base willing to spend money on these appreciating collections.

However, for the average car, the answer has always been a resounding NO!

Well, that was up until 2020, when used vehicles started to increase in value due to lack of microchips availability has been scarce causing the production of new cars to be halted. Thus, the supply and demand for new cars have been skewed causing an increase in car worth.

As the supply chain gets back to normal production, this appreciation in our sedans, trucks, and SUVs will be short-lived.

How To Calculate Car Value

Picture of a car driving on a highway to figure how to calculate car value.

Car value is the estimated worth of a car. There are two main methods for calculating this:

  1. The trade-in method, which takes your vehicle’s current market value and divides it by its estimated remaining life span.
  2. The resale method takes your vehicle’s current market price and then subtracts the depreciation rate from that value to get a car’s market value.

To calculate the value of a car, you need to know its make, model, year, and condition.

Personally, I like finding the worth of a car based on its Kelley Blue Book (KBB) value. This is the resource my dad used when he worked in the car industry, so I can trust the information.

The KBB value is updated monthly and takes into account recent sales and modifications.

When it comes time to buy, sell, or trade-in your car, you’ll need to know a fair price.

You can use a variety of methods to calculate your car’s worth, including using online tools, checking with dealerships and other buyers in your area, and looking at recent sales data. Remember to factor in your car’s condition and mileage when calculating its worth–prices will vary depending on the location and condition of your car.

Car Value Deprecation Curve

Picture of a car driving on a path for the car value depreciate curve.

Before you head out and purchase your car, car value depreciation is a real consideration in your decision.

As KBB states, the first year of owning a brand new car will depreciate the most. While it feels great to drive off the lot in a brand new SUV, you can watch hundred dollar bills float behind you with how quickly the car depreciates.

To calculate the depreciation of a car, it varies depending on the make and model.

However, here is a car value depreciation chart to estimate based on.

  • In year one, most models will depreciate at least 20% or more.
  • From years 2-4, the car depreciates about 10% each year.
  • After five years, a car will depreciate about 60% of the original purchase price.

Car Value Deprecation Curve Example

For example, let’s take the average price of a new car of $47,077 according to Car and Driver.

  • 1st year = car lost $9415.40 in value and is now worth $37,661.
  • 2nd year = car lost another $3,766 in value and is now worth $33,895.
  • 3rd year = car lost another $3,389 in value and is now worth $30,505.
  • 4th year = car lost another $3,050 in value and is now worth $27,464.
  • After 5th year, the car has lost an estimated $28,246 in value and is now worth about $18,830

That is the reason most people do not believe a car is an asset.

That is a depreciating asset. Would you consider an investment if you knew 60% would be wiped away in less than five years? Probably not.

This is why most thrifty people look for cars that are at least 5 years old and lost most of the depreciation. Personally, I have never purchased a new car; everything I owned was new-to-me used vehicle. Even growing up as a daughter of a car salesman and manager, my parents never purchased a brand new car due to deprecation.

Another reason beater cars are super popular!

How Your Car Is An Asset

Picture of someone driving to show how your car is an asset.

There are a variety of ways to define what an asset is, and whether or not a car falls into that category depends on the definition used.

In general, most people would say that a car is an asset because it has value and can be sold for money.

However, there are other definitions of assets that may not include cars. For example, some people might say that an asset is something that generates income or increases in price.

A car can be an asset for someone who is making money off of it. For instance, an Uber driver uses his or her car as a business asset. The car is providing them with income, and thus it can be considered an asset.

On the other hand, most people use their vehicles for personal use as a mode of transportation and do not make money off of it. If your car was purchased with cash or paid off, then you can consider it an asset.

Is a paid off car an asset? Yes.

Why is a car not an asset?

Picture of an older car as to why is a car not an asset.

A car is not an asset because it depreciates in value the moment you drive it off the dealership lot. While it may be a necessary expense, it is not an asset that increases in worth over time.

Is a leased car an asset?

No, a leased car is not an asset because the asset (car in this case) is the asset of the leasing company. This is 100% liability for you and a monthly payment which you must make.

Leasing a vehicle allows you to drive it for the length of your lease term without the risk of buying and then selling or trading in at the end of your lease. Once the lease expires and if you decide to purchase the car, then it would be considered an asset on your net worth.

How Your Car Is Considered A Liability

Picture of someone handing over cash with a car in the background for how your car is considered a liability.

The car is considered a liability if the debt exceeds the car’s value.

Simply put… If you have an auto loan, your car would be considered a liability.

Given that most people believe car loans are a part of being an adult, many view cars as a liability and monthly payments normal.

In addition, a car is a liability because, like any other depreciating asset, it will lose its value over time.

The longer you own it, the more money you will likely have to spend on repairs and general upkeep. This means that your car is not only costing you money every month in terms of payments and insurance, but also in terms of the decreasing worth of the asset itself.

Is a car loan an asset?

A car loan is a type of debt that is incurred when borrowing money to buy a new or used car. Thus, the car loans are considered liabilities and the car itself would be considered collateral.

Should I Include My Car in My Net Worth Calculation?

The answer to this question depends on how much your car is worth.

Personally, at Money Bliss, we recommend counting the vehicle as an asset and any auto loan as a liability. That means you would include both in your net worth calculations.

The reason why to include in net worth is if you had to sell your car immediately, you would be in one of two situations:

  1. You have instant access to cash if needed.
  2. You owe more in your car loan and thus, have negative equity. Meaning you would have to pay additional money to get out of your car loan and sell your car.

To keep your net worth accurate, you should adjust the price of your vehicles as they decrease over time.

Is Having a Car the worst investment of your Money?

There are a lot of factors to consider when answering this question.

Owning a car can be a major expense, and there are a lot of costs that come with owning a car, such as insurance, registration, and maintenance. However, a car can also provide a lot of benefits, such as convenience, freedom, and security.

Ultimately, it depends on your individual circumstances.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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Apache is functioning normally

June 5, 2023 by Brett Tams

Getting divorced can cause both emotional and financial upheaval for everyone involved. One of the most important questions you and your soon-to-be former spouse may have to decide centers on how to divide retirement assets.

Understanding the key issues around divorce and retirement can make it easier to untangle them as you bring your marriage to a close.

Taking Note of Your Retirement Accounts

The average cost of divorce can range from several hundred to several thousand dollars, so it’s important to know what’s at stake financially. Managing retirement accounts in divorce starts with understanding what assets you have.

There are several possibilities for saving money toward retirement, and different rules apply when dividing each. Here’s a look at what types of retirement accounts you may hold and thus will need to consider in your divorce.

401(k)

A 401(k) plan is a defined contribution plan that allows you to save money for retirement on a tax-advantaged basis. Your employer may also make matching contributions to the plan on your behalf. According to the Census Bureau, 34.6% of Americans have a 401(k) or a similar workplace plan, such as a 403(b) or Thrift Savings Plan.

IRA

Individual retirement accounts, or IRAs, also allow you to set aside money for retirement while enjoying some tax benefits. The difference is that these accounts are not offered by employers. There are several IRA options, including:

•   Traditional IRAs, which allow for tax-deductible contributions.

•   Roth IRAs, which allow for tax-free withdrawals in retirement.

•   SEP IRAs, which follow traditional IRA tax rules and are designed for self-employed individuals.

•   SIMPLE IRAs, which also follow traditional IRA tax rules and are designed for small business owners.

Each type of IRA has different rules regarding who can contribute, how much you can contribute annually, and the tax treatment of contributions and withdrawals.

💡 For more info, check out our guide on individual retirement accounts (IRAs).

Pension Plan

A pension plan is a type of defined benefit plan. The amount you can withdraw in retirement is determined largely by the number of years you worked for your employer and your highest earnings. That’s different from a 401(k), since the amount you can withdraw depends on how much you (and your employer) contribute during your working years.

How Are Retirement Accounts Split in a Divorce?

How retirement accounts are split in divorce can depend on several factors, including what type of accounts are up for division, how those assets are classified, and divorce laws regarding property division in your state. There are two key issues that must be determined first:

•   Whether the retirement accounts are marital property or separate property

•   Whether community property or equitable distribution rules apply

Legal Requirements for Dividing Assets

Marital property is property that’s owned by both spouses. An example of a tangible marital property asset is a home the two of you lived in together. Separate property is property that belongs to just one spouse.

In community property states, spouses have an equal share in assets accrued during the marriage. Equitable distribution states allow for an equitable — though not necessarily equal — split of assets in divorce.

You don’t have to follow state guidelines if you and your spouse can come to an agreement yourselves about how divorce assets should be divided. However, if you can’t agree, then you’ll be subject to the property division laws for your state.

If retirement assets are to be divided in divorce, there are certain steps that have to be taken to ensure the division is legal. With a workplace plan, you’ll need to obtain a Qualified Domestic Relations Order (QDRO). This is a court order that specifies how much each spouse should receive when dividing a 401(k) or similar workplace plan in divorce.

IRAs do not require a QDRO. You would, however, still need to put in writing who gets what when dividing IRAs in divorce. That information is typically included in the final divorce settlement agreement, which a judge must sign off on.

Protecting Your 401(k) in a Divorce

The simplest option for how to protect your 401(k) in a divorce may be to offer your spouse assets of equivalent value. For example, if you’ve saved $500,000 in your 401(k) and you jointly own a home that’s worth $250,000, you might agree to let them keep the home as part of the divorce settlement.

If they’re not open to the idea of a trade-off, you may have to split the assets through a QDRO. That could make a temporary dent in your savings, but you might be able to make it up over time if you continue to make new contributions.

You could skip the QDRO and withdraw money from your 401(k) to fulfill your obligations to your spouse under the terms of the divorce settlement. However, doing so could trigger a 10% early withdrawal penalty if you’re under age 59 ½, along with ordinary income tax on the distribution.

Protecting Your IRA in a Divorce

Traditional and Roth IRAs are subject to property division rules like other retirement accounts in divorce. Depending on where you live and what laws apply, you might have to split your IRA 50/50 with your spouse.

Again, you might be able to protect your IRA by asking them to accept other assets instead. Whether they’re willing to agree to that might depend on the nature of those assets, their value, and their own retirement savings.

If you’re splitting an IRA with a spouse, the good news is that you can avoid tax consequences if the transaction is processed as a transfer incident to divorce. Essentially, that would allow you to transfer money out of the IRA to your spouse, who would then be able to deposit it into their own IRA.

Divorce and Pensions

Pension plans are less common than 401(k) plans, but there are employers that continue to offer them. Generally, pension plan assets are treated as marital property for divorce purposes. That means your spouse would likely be entitled to receive some of your benefits even though the marriage has ended. State laws will determine how much your spouse is eligible to collect from your pension plan.

Protecting Your Pension in a Divorce

The best method for protecting a pension in divorce may be understanding how your pension works. The type of payout option you elect, for instance, can determine what benefits your spouse is eligible to receive from the plan. It’s also important to consider whether it makes sense to choose a lump-sum or annuity payment when withdrawing those assets.

If your spouse is receptive, you might suggest a swap of other assets for your pension benefits. When in doubt about how your pension works or how to protect pensions in a divorce, it may be best to talk to a divorce attorney or financial advisor.

Opening a New Retirement Account

Splitting retirement accounts in a divorce can be stressful. It’s important to know what your rights and obligations are going into the process. If you’re leaving a marriage with less money in retirement, it’s a good idea to know what options you have for getting back on track. That can include opening a new retirement account.

SoFi offers individual retirement accounts for people who want to invest with minimal hassle. You can open a traditional or Roth IRA online and choose between active or automated investing to fit your needs and goals.

Easily manage your retirement savings with a SoFi IRA.

FAQ

How long do you have to be married to get part of your spouse’s retirement?

If you’re interested in getting spousal retirement benefits from Social Security, you have to be married for at least one continuous year prior to applying. The one-year rule does not apply if you are the parent of your spouse’s child. Divorced spouses must have been married at least 10 years to claim spousal benefits.

Is it better to divorce before or after retirement?

Neither situation is ideal, but divorcing before retirement may be easier if there are fewer assets to divide. Getting a divorce after retirement can raise questions over how to divide retirement and non-retirement assets. It may also lead to financial insecurity on the part of one or both spouses if the distribution of assets is unequal.

Who pays taxes on a 401(k) in a divorce?

If you’re dividing up your 401(k) prior to divorcing then you would be responsible for paying any taxes or penalties owed. Waiting until after the divorce is finalized to split your 401(k) with your former spouse could reduce the amount of taxes and penalties you owe.


Photo credit: iStock/FG Trade Latin

This article is not intended to be legal advice. Please consult an attorney for advice.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
SOIN1122015

Source: sofi.com

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Apache is functioning normally

June 5, 2023 by Brett Tams

Long, long ago, in a mystical forest with good Wi-Fi, Goldilocks opened an investing account with $3,000 to invest.

At first, she considered pouring more money into her retirement accounts (which only holds mutual fund investments). But her Roth IRA was already maxed out for the year. Moreover, she knew that she would need this money sooner than age 65.

“Too cold!” she said.

Next, she considered investing in individual stocks. But even though she’d done her due diligence, she knew that investing in individual securities can be very risky. She didn’t need to become a millionaire overnight – she just wanted to make enough money to buy a cottage in a few years.

“Too hot!” she said.

Finally, she began browsing ETFs. ETFs are generally more stable, diverse, and safe investments than individual stocks, but they’re also more accessible than your retirement account.

“Juuuuust right!” she said aloud.

10 years later, Goldilocks’ investment had paid off – thanks to a steady 10% APY, her $3,000 investment had become nearly $8,000, so she was finally able to pay restitution and legal fees to the family of bears down the way.

Thanks to inherent diversity and steady returns, ETFs are a great place to stash a few grand to help you save for a big expense years or decades down the line.

What’s Ahead:

Large-cap stock ETFs

Large-cap ETFs typically bundle together blue-chip stocks or even an entire index, providing steady, sizeable returns. Warren Buffet once famously said:

“I just think that the best thing to do is buy 90% in S&P 500 index fund.”

So I’ve included two such options on the list.

You’ll also see a lot of Vanguard funds on this list because, well, they’re just awesome all the way around. Vanguard funds are extremely popular among investors because they combine industry-leading returns with incredibly low expense ratios. 

ETF Symbol Fund info Expense ratio
Schwab US Large-Cap Growth ETF™ SCHG The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. 0.04%
SPDR S&P 500 ETF SPY The SPDR® S&P 500® ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index (the “Index”). 0.0945%
Vanguard S&P 500 ETF VOO The Vanguard S&P 500 ETF invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. 0.03%
Vanguard Russell 1000 Growth ETF VONG The investment seeks to track the performance of the Russell 1000® Growth Index. The index is designed to measure the performance of large-capitalization growth stocks in the United States. 0.08%

Mid-cap stock ETFs

Goldilocks’ choice – mid-cap ETFs – bundle together companies that have an exciting growth curve before them, but are established enough not to fold overnight.

If you can tolerate a little more risk in exchange for higher potential returns than an index fund, consider these top picks: 

ETF Symbol Fund info Expense ratio
Vanguard Mid-Cap Growth ETF VOT VOT seeks to track the performance of the CRSP US Mid Cap Growth Index, which measures the investment return of mid-capitalization growth stocks. 0.07%
iShares Core S&P Mid-Cap ETF IJF IJF seeks to track the investment results of an index composed of mid-capitalization U.S. equities. 0.05%
Vanguard Mid-Cap ETF VO VO seeks to track the performance of the CRSP US Mid Cap Index, which measures the investment return of mid-capitalization stocks. 0.04%
Schwab U.S. Mid-Cap ETF SCHM SCHM’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Mid-Cap Total Stock Market Index. 0.04%

Small-cap stock ETFs

If you’ve looked at your asset portfolio recently and thought “hmm… needs a little more spice,” then a small-cap ETF might add just the right amount of kick.

These ETFs track small companies with big potential, so they present higher risk but higher potential reward than large- or mid-cap ETFs. 

ETF Symbol Fund info Expense ratio
Vanguard S&P Small-Cap 600 Growth ETF VIOG VIOG employs an indexing investment approach designed to track the performance of the S&P SmallCap 600® Growth Index, which represents the growth companies, as determined by the index sponsor, of the S&P SmallCap 600 Index. 0.15%
Vanguard Small-Cap ETF VB VB seeks to track the performance of the CRSP US Small Cap Index, which measures the investment return of small-capitalization stocks. 0.05%
iShares Core S&P Small-Cap ETF IJR IJR seeks to track the investment results of an index composed of small-capitalization U.S. equities. 0.06%
Schwab U.S. Small-Cap ETF SCHA SCHA’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index. 0.04%

International stock ETFs

ETF Symbol Fund info Expense ratio
Vanguard Emerging Markets ETF VWO VWO invests in stocks of companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa. 0.10%
Vanguard Total International Stock ETF VXUS VXUS seeks to track the performance of the FTSE Global All Cap ex US Index, which measures the investment return of stocks issued by companies located outside the United States. 0.08%
SPDR® MSCI EAFE Fossil Fuel Free ETF EFAX EFAX seeks to offer climate-conscious investors exposure to international equities while limiting exposure to companies owning fossil fuel reserves. 0.20%
Vanguard FTSE Developed Markets ETF VEA VEA provides a convenient way to match the performance of a diversified group of stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region. 0.05%

Fixed income ETFs

ETF Symbol Fund info Expense ratio
iShares Core U.S. Aggregate Bond ETF AGG AGG seeks to track the investment results of an index composed of the total U.S. investment-grade bond market. 0.05%
Vanguard Total Bond Market ETF BND BND’s investment objective is to seek to track the performance of a broad, market-weighted bond index. 0.035%
Vanguard Intermediate-Term Corporate Bond ETF VCIT VCIT seeks to provide a moderate and sustainable level of current income by investing primarily in high-quality (investment-grade) corporate bonds. 0.05%
Schwab 1-5 Year Corporate Bond ETF SCHJ SCHJ’s goal is to track as closely as possible, before fees and expenses, the total return of an index that measures the performance of the short-term U.S. corporate bond market. 0.05%

What does large-cap, mid-cap, etc. mean?

To start, “cap” refers to market capitalization, or the total value of a company’s shares on the market. For example, if a company has 1 million shares on the market valued at $10 a pop, their market cap would be $10 million.

  • Large-cap ETFs are comprised of companies each with a market cap of $10 billion or higher. The Vanguard Mega Cap ETF (MGC), for example, contains around 250 of the biggest companies in the USA, from Amazon to Apple. Since they’re often full of blue-chip stocks that provide slow-but-steady returns, large-cap ETFs are considered a safe, long-term investment.
  • Mid-cap ETFs are comprised of companies each with a market cap in the $2 to $10 billion range. All ETFs are designed to succeed and make money, so mid-cap ETFs are filled with midsized companies that are in the middle of their “growth curve,” so to speak – they’re high-performing, high-potential companies that may become the next blue-chip, so mid-cap ETFs balance risk and reward.
  • Small-cap ETFs are comprised of companies each with a market cap of “just” $300 million to $2 billion. Fund managers who design small-cap ETFs cast a wide net, aiming to scoop up “the next big thing.” As a result, these ETFs have higher growth potential than most ETFs, but also steeper downside if the smaller companies within end up folding. 
  • International ETFs are, as the name so subtly hints, full of non-U.S. stocks and securities. There are country-specific ETFs, foreign industry ETFs (think non-U.S. automotive stocks), and even ETFs representing emerging markets like sub-Saharan Africa and Brazil.
  • Fixed income ETFs, aka bond ETFs, give you access to diverse bond investments. For the uninitiated, bonds are like loans you make to companies or governments that they pay back with interest. You can read more about bonds here, but the bottom line is this: fixed-income ETFs provide steady income in the form of dividends, so they’re a good choice if you want a safe investment that gives you a paycheck!

Read more: How To Invest In ETFs

Which type of ETF is right for you?

Well, it depends on both your goals and your risk tolerance.

If you can tolerate some risk in your portfolio, and want your ETF investment to pay off sooner than later (within five years), you may want to consider small-cap and mid-cap ETFs. They’re riskier, but have higher upside potential.

If you’re looking for a safer investment that will multiply your money over a longer horizon (5+ years), a large-cap ETF is probably a fit.

If you’d like your ETF investment to provide a trickle of cashback each month, fixed income ETFs are probably your best bet.

And finally, if you don’t mind doing a little research or believe strongly in the economic performance of a foreign market, you’ll be a fan of international ETFs.

Read more: How To Determine Your Investing Risk Tolerance

About our criteria 

With hundreds of commission-free ETFs available, how did these become the winners?

To make this list, ETFs had to impress in all of the following categories:

  1. Earnings potential. Naturally, the first thing looked at was the ETF’s performance over the past five years. A good sign of a healthy ETF is how quickly it bounced back in Q3 2020 after the market panic surrounding the COVID-19 pandemic. Springboarding back and surpassing Q1 levels are a sign of investor confidence, and helped solidify the ETF’s place on this list.
  2. Expense ratio. Next, I looked at the ETF’s expense ratio. Your expense ratio is the percentage of your investment you pay to the fund manager for having shares of the ETF. Although measured in fractions of a percent, expense ratios make a difference – 0.80% of $10,000 is $80 and 0.04% is just $4, so ETFs with an expense ratio below 0.20% were favored.
  3. Fund reputation. You’ll see a lot of repeated names on this list because funds like Schwab, BlackRock (iShares), and especially Vanguard have a proven track record of building well-crafted, reliable ETFs with low expense ratios. Fund reputation matters in the long run because big funds attract big money, which helps to generate higher returns for you!
  4. Solid fundamentals. ETFs aren’t just random grab bags of stock and securities – each one is a carefully curated list, with selection criteria driven by both AI and human logic. There are some wacky and unique ETFs out there – such as Millennial ETFs and Space ETFs – and I’ll cover more of them in an upcoming piece. But this list isn’t for the experimental, exciting stuff – it’s for safe, dare I say boring, places to stash and multiply your savings.
  5. Conscious investing. Finally, this was more of a small thing in the back of my mind, but I wanted each ETF on this list to score average or above average for “conscious capitalism.” No fossil fuels, no sin stocks (learn more about sin stocks here) – and not just because it’s not the way of the future, but because investments in conscious capitalism generally outperform “sinful” investments in the long term.

Commission-free ETFs solve a big problem for young investors

Commission-free ETFs aren’t just great because they’re cheap – they actually solve a pretty serious problem plaguing young ETF investors.

You see, ETFs have heftier commissions and trade fees than stocks because ETFs can be resource-intensive to create. Let’s say you’re a fund manager and you have an idea for an ETF. The process to get your ETF approved by the SEC isn’t unlike getting your new drug approved by the FDA; you have to research a ton, understand the risks, and propose your ETF to the government.

Once your ETF is approved and available, you probably want some additional compensation for your work beyond just capital gains from your ETF.

You don’t want to charge a high percentage trade fee, because big-ticket investors will be turned off. So, instead, you charge a $10 to $20 fee per trade of your ETF.

Big-ticket investors who drop $50,000 on a trade couldn’t care less about a $20 fee, since that represents just 0.04% of their investment. But if you’re a young investor, investing maybe $50 to $100 out of each monthly paycheck, a $20 per-trade fee is way too high – basically pricing us out of ETF investing. 🙁

Thankfully, many brokerages have realized that their per-trade fees are too high for young investors and have eliminated commissions on trades of certain ETFs. At first, funds like Vanguard and Fidelity only let you trade commission-free on their own platforms, but now, they’ve expanded their commission-free goodness to wide platforms like J. P. Morgan Self-Directed Investing.

And it’s not just the junk ETFs that get traded commission-free – in fact, it’s often quite the opposite. Firms like Vanguard and Fidelity will let you trade their most successful ETFs for free – presumably because they don’t really need the commission.

Disclosure – INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Summary

If you’re looking for an investment vehicle falling somewhere between your boring retirement account and your exciting individual stock purchases, ETFs are an excellent choice. And now that the big funds are waiving commissions on their top-performing ETFs, there’s never been a better time to dive into the world of ETFs and inject some low- to mid-risk into your portfolio.

ETFs are also an excellent investment if you’re looking to multiply your money and cash out within 2 to 10 years. You can even leave your ETF investment until retirement, if you want, so it has plenty of time to multiply under compound interest.

Not all ETFs are made the same, however – and the SEC has approved some stinkers over the years, for sure. These ETFs, on the other hand, are universally considered top-ranked and well-supported within the investor community – and are a superb place to start.

Read more:

Source: moneyunder30.com

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Apache is functioning normally

June 5, 2023 by Brett Tams

Bonds began the day in weaker territory but quickly found their footing after softer PMI data.  In particular, ISM Services (50.3 vs 52.2) helped 10yr yields move from being a few bps higher to a few bps lower.  From here, the week shifts to placeholder mode ahead of next week’s CPI and Fed announcement.  The “skip” is still the baseline for this meeting.  Instead, markets have been trading the length of time spent at the ceiling.

None of the recent data has had a huge impact on rate hike odds at the coming meeting.  But if we add Fed Funds Futures for the January 2024 contract (used to trade the December meeting), we can see a fairly quick jump from 4.0 to 5.0% over the past few weeks.  This mean the market had seen the Fed cutting rates several times by the end of the year, but now sees the ceiling remaining intact.

20230605 open.png

Source: mortgagenewsdaily.com

Posted in: Refinance, Renting Tagged: 2, Announcement, bonds, data, fed, Financial Wize, FinancialWize, funds, futures, impact, in, jump, LOWER, market, markets, Move, PMI, rate, rate hike, Rates, the fed, time, trading
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