Bungalow, a new residential real estate platform, recently launched, announcing it has secured $64M in funding: a $14M Series A led by Khosla Ventures, Atomic VC, Founders Fund, Cherubic Ventures, and Wing Ventures, alongside a $50M debt facility.
Over the past several decades the price of rent has dramatically decoupled from income while student loan balances have reached record highs, putting new strains on early career professionals. Not only is housing this group’s largest expense, but the rental experience remains outdated. Though many early career professionals aren’t looking to live alone, finding roommates on traditional ad platforms is fraught with financial and personal risks. Plus, the existing housing stock is dominated by studios and one bedrooms built when most early career professionals lived with spouses.
“My co-founder and I felt the pain of renting in a new city. It was hard to find a great home and even harder to build a supportive community away from friends and family,” said Andrew Collins, co-founder and CEO of Bungalow. “We founded Bungalow to give early career professionals the ability to live in a beautiful and affordable home, in the neighborhood they want, and with a great community surrounding them.”
Bungalow utilizes existing housing supply by signing long-term leases with homeowners, and offers beautiful, multi-bedroom homes in some of the most desirable neighborhoods in cities throughout the U.S. Bungalow expertly matches potential roommates, provides furnished common areas, and takes care of utilities including WiFi and monthly cleaning services. The company also hosts monthly events for its residents, creating an instant community for those new to a city or who are looking to expand their social circle. This two-sided platform significantly reduces the friction of the rental process for both residents searching for a home and homeowners looking for a source of income without taking on the responsibilities of a landlord.
“One major challenge of today’s residential real estate market is the lack of desirable and accessible rental options for young people in urban areas, a problem that will become more pervasive in years to come,” said Keith Rabois, managing director at Khosla Ventures. “Bungalow is taking a full-stack approach that uniquely addresses the rapidly evolving needs of both renters and homeowners, while creating economic value by more effectively utilizing housing inventory.”
Bungalow has been quietly operating for the last year and a half after its founding in early 2017. Since beginning operations, the company has quickly scaled to hundreds of properties and over 750 residents across five urban areas including: the Bay Area, Los Angeles, New York, San Diego, and Seattle. Today, the company is announcing two new markets to its platform: Portland and Washington, D.C. Bungalow is currently on track to be in 12 major U.S. metro markets by the end of 2018 with plans for global expansion in 2019.
“Bungalow is taking on the $650 billion rental market for early career professionals and it may prove to be a bigger total market size than travel and taxis,” said Jack Abraham, founder and managing partner at Atomic. “By leveraging the existing housing stock and connecting demand with compelling long-term leases, Bungalow is poised to continue its growth to the rest of the country and around the globe.”
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
We’re all guilty of being obsession with the seemingly perfect lives of celebrities. From expensive cars to luxurious homes and exotic vacations, we may find ourselves comparing our everyday lives to what these celebs are sharing on social media. It’s no wonder, then, why so many people put them up on a pedestal as though they’re achieving something extraordinary—when really, they were probably just in the right place at the right time.
1. Influencers
One user shared, “Pick an influencer, any influencer.”
Another user replied, “I work in tech support for an influencer marketing platform. I didn’t even know influencer marketing was a thing before this job. The insane amounts of money some of these influencers are paid are unreal. I read an email convo between a brand and an influencer who said she charges $9000 for sponsored posts.
“The brand didn’t end up partnering with her, but I checked her TikTok, and she has sh-tloads of sponsored posts! Like several a day sometimes! Her whole channel was painfully unfunny skits about parenting. It was a mindblowing revelation. Hell, even if you only have a thousand or so followers, you can get free stuff pretty easily as long as you post consistently and focus on a particular demographic.”
One user added, “They think they’re popular in the real world, and literally 99.9% of the world doesn’t know who they are.”
2. The Kardashians
“Kardashian-Jenner crew,” shared one user.
Another user commented, “At least Bruce was an athlete. Edit: Why the f- am I being downvoted? Was he, not Bruce Jenner when he was an athlete? Yes. Is there an athlete called Caitlyn Jenner? No. Is any of them an athlete, or at least talented at something other than being cancerous polyps on the rectum of humanity? No. So my original statement holds true: At least Bruce was an athlete.”
One user replied, “Caitlyn herself has said that she doesn’t mind when people refer to her as Bruce when talking about her before her transition.”
3. DJ Khalid
One user commented, “So he’s definitely not overrated on Reddit. In fact, everyone on Reddit seems to (understandably) hate him, but outside of Reddit, DJ Khalid.”
Another user replied, “I got news for you; everyone outside of Reddit thinks DJ Khaled is a talentless doofus, too; it’s not just us.”
One Redditor commented, “It breaks my heart,… man, it f-ing breaks my heart, that there are people out there who don’t believe in us, man.”
4. James Corden
“James Corden. I scrolled through every reply to upvote it. Surprised no one mentioned him,” one user shared.
Aother user replied, “The only funny thing about him is how much England doesn’t want his entitled [self] back.”
Another Redditor replied, “England also has quite a niche sense of humour. His comedy is too Americanised, and he simply can’t compete with the excellent British comedians who’ve always been in touch with what Brits like. So not only do we not want him back for his entitled, arrogant behaviour, we just don’t find him funny either.”
5. Logan Paul
One user asked, “Is he still big? I keep thinking he isn’t, and then someone else mentions him. I swear, I had never even heard of the guy until the story of him mocking a guy who committed suicide… became big, and that was all I needed to know the guy was a jerk… no, something worse because ordinary jerks wouldn’t laugh and mock someone after finding their corpse and knowing they killed themselves… [Even] edgy trolls or comedy lovers to be like, ‘Holy crap, that’s too much for me!’ but nope, the guy keeps on going.”
“Apparently was redeeming himself until his cryptogams and now the Prime garbage,” another user responded.
6. Tik-Tok Influencers
“Anyone who got famous from TikTok. Being pretty isn’t a talent,” one commenter replied.
Another user commented, “Addison Rae and the D’amelio sisters.”
One Redditor added, “I’ve forgotten of their existence for a year until now.”
7. Jack Harlow
One Redditor shared, “Pretty sure Jack Harlow is an industry plant, and it’s giving me a headache trying to figure out how he got popular.”
One user replied, “He’s an industry baby.”
Another added, “Ripping off Fergie and being a generic-looking white dude will get all the gen z girls rolling for you, it seems.”
8. Young People With Famous Parents
“99.9999% of nepo babies, there are some talented ones for sure. Like Lily Rose Depp gotta be one of the [most terrible] actresses I’ve seen,” one user posted.
Another commenter reacted, “The only [nepo] baby that’s actually legit is Jamie Lee Curtis—she is very talented and classy. But yea, Lily-Rose Depp is terrible.”
One user shared, “Laura Dern may be the most talented of the [nepo] babies.”
Another Redditor inserted, “Jeff Bridges. Son of the late and great Lloyd Bridges.”
One user exclaimed, “Nice catch! Fantastic actor.”
9. Jared Leto
One user shared, “Jared Leto. Shitty actor, shittier musician, and a s-xual predator to boot.”
Another user added, “Keep your children away from Jared Leto.”
One user shared, “When I watched Dallas Buyers Club years ago, I couldn’t tell who that one character Rayon was played by until the credits. I was blown away by it, Jared Leto. Other than that, he has pooped out some stinkers of performances. Possibly the only guy that could turn in a terrible Joker performance. Kind of unbelievable that studios keep banking on him.”
10. Drake
One Redditor said, “Drake.”
Another user replied, “He makes me cringe.”
One user added, “Agree. His music has no seasoning. It just has this boring passive-aggressive vibe to it.”
11. Lily-Rose Depp
“Lily-Rose Depp. She is just awful,” one user posted.
Another Redditor added, “I haven’t seen her in anything, so I don’t know whether or not she has talent, but I know her new show with The Weeknd, The Idol, is getting critically backlash reviews with no mention on whether or not her acting saves the show.”
Another user replied, “You haven’t seen such gems as… Tusk? Yoga Hosers? Or heard of her fame for somehow being the only 5′ 3″ runway model? All of which are based purely on her blinding talent and have nothing to do with nepotism in Hollywood.”
12. Jojo Siwa
One user shared, “Jojo Siwa. God, she drives me f-ing nuts. She can’t sing or act… And the fact that she has to mention that she’s a lesbian every time she’s on tv is cringe.”
The user added, “I don’t personally care about her content. It’s when she goes on shows like That’s My Jam and has to bring up that she’s a lesbian. Maybe if she came across and more genuine, then she wouldn’t be so annoying.”
13. The Rock
One Redditor commented, “The Rock. I love him because I’m a long-time pro wrestling fan, but he’s insanely mediocre as an actor. He basically has the success he has because he’s marketed himself so well, though, and to some degree, I admire the hell out of it, but he was 100x the pro wrestler than he was an actor. Dude was legitimately so charismatic and hilarious on the mic and fun to watch in the ring.”
Another user replied, “Very mediocre actor, but a great guy.”
One replied, “I say this all the time. The Rock plays as The Rock in every role. He’s had a range of different roles, too but still just The Rock. I can never see him as the character he’s trying to portray because he is a mediocre actor.”
14. J Lo
One user pointed out, “J Lo. If I missed it, I apologize, but I scrolled and could not believe she wasn’t at the top: a horrible singer, an average professional dancer, a terrible actress, and messy personal issues. I don’t get it. That damn dress made her whole career. It was a great look; I’ll give her that but not a career’s worth.”
Another user added, “Her Spanish is pathetic for someone who claims to be Puerto Rican.”
15. Pete Davidson
One user commented, “Pete Davidson.”
Another user asked, “How are women attracted to him? A sense of humour only goes so far.”
One Redditor answered, “He’s got that, ‘I just need the right woman to fix me’ vibe.”
16. Joe Rogan
“Joe Rogan. I mean, how?!?!?!” exclaimed one user.
Another user added, “My brother is an English professor, and politically conservative, I might add, and he often uses Joe Rogan clips in his critical thinking class to show how deceptive semi-plausible logical fallacies can be when they are presented calmly and are not too flagrant or over-the-top.
“I forget which famous example he references most, but there’s one where he used 15 fallacies in less than two minutes. But once you’ve seen it, yeah, he just does the same thing over and over—chips away at something he doesn’t want to believe in that is backed by science/facts by presenting selective, bad-faith representations of the topic and then doesn’t actually make a strong case at all for his side.
“He just unethically casts doubt but makes it seem reasonable because he appears ‘skeptical.’ He’s not actually informed most of the time to raise legitimate objections. It’s the whole ‘prove to me ___________,’ like the burden of proof is on experts to refute his specific BS objections or else his uninformed opinion is just as valid as their knowledge. I’m amazed people don’t see through this.”
Another user added, “He legitimizes stupid positions for stupid people. The stupid people eat that sh-t up.”
17. Chris Pratt
One user added, “Chris Pratt. Not only did he voice the MC in the Lego movie, he then did Mario. Now he’s doing Garfield. There’s a reason voice acting is a separate profession from acting.”
One replied, “Very true, but we should also acknowledge that there are actors that can do both. Jack Black brings probably the penultimate example of that.”
18. Taylor Swift
“Taylor Swift. The amount of die-hard fans I know that have some kind of parasocial relationship with the idea of her is crazy,” one user posted.
Another user replied, “There is a Taylor Swift concert coming here soon. It’s been sold out for a while, and people are paying scalpers thousands of dollars just for bad seats. Linkin Park is my favourite band, and I’ve paid to see them in concert. But even if Chester Bennington rose from the dead and went on tour with LP again, I still wouldn’t pay that much for a freaking concert. That’s insanity.”
19. Timothée Chalamet
One user shared, “Timothée Chalamet.”
Another user replied, “The meme that he looks like an old medieval shoe always makes me crack up.”
One user commented, “Eh, I’m not attracted to him physically, but he’s a fantastic actor and seems to truly have a passion for his craft, at least to me, that’s the appeal, a love for his work.”
20. Harry Styles
One Redditor said, “Harry Styles. I can’t comment on him as a singer since I don’t know that I would recognize any of his songs, but people talk like he’s the next great actor, and I just don’t see it. He’s okay, I guess, but he’s no Deniro, Pacino, Nicholson, etc.”
Another user agreed, “Big time agree.”
One responded,” His music, at least the popular stuff, is pretty generic imo. I’ve heard some of his less known stuff is better, but most of his big songs sound like they’re specifically designed to play in the background of a big box retail store or annoying car commercial.”
Do you agree with the names listed above? Share your thoughts below!
Source: Reddit.
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I‘m constantly amazed at the fact of how many young people I come across that don’t have any life insurance. While they all have there different reasons, the most common reason I hear is that it’s too early to think about life insurance. I couldn’t disagree more.
Most Important Question
Are you supporting individuals whose livelihood depends on your income? If the answer is yes, it’s time to look at life insurance.
Now, you may be saying: shouldn’t I wait to get a policy? Why should I pay premiums when I have so many other checks to write? Well, the reluctance is understandable: the perception is that life insurance is for old people, and when you’re 30 or 35, chances are you’ve got a long, great life ahead of you. But in financial terms, here is why this can be advantageous.
Healthy is Good
Typically, Americans shop for a life insurance policy in the middle of their life spans – when they are in their forties or fifties. At that time, they may have already fallen into the grip of bad habits (smoking, obesity, heavy drinking) and diabetes, heart disease, cancer or HIV may have entered their health picture. All these conditions can jack up premiums or make it harder to get a policy.
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Term Life Insurance is Cheap
Okay, maybe you won’t have to contend with any of the above health risks at 45 or 50 – but who knows? Buying a term insurance or permanent cash value life policy early in life, before you have to encounter any of these problems, should allow you to pay less expensive premiums. (Presuming you don’t face recurring risks to your health and safety today.) Getting life insurance quotes online are so easy nowadays, with sites like Matrix Direct offering you a free quote in minutes.
Did you know that premiums for standard-risk term life insurance fell 50% between 1994 and 2008?
Premiums have been getting cheaper and cheaper for new term life policyholders, partly because the mortality rate has dropped over the decades. In fact, the non-profit Insurance Information Institute says term insurance premiums have fallen by more than 4% per year since 2000, and the premiums on cash value policies are averaging roughly 5% lower today compared to a decade ago.
Do young singles need life insurance?
Good question. Some financial consultants will tell you there is no pressing reason for it. Yet if you are single, buying a term life insurance policy (or even a permanent life policy) early on could bring you a better deal and potentially guarantee your insurability. I have to admit that I did not do this. But I was fortunate to take out a term life policy early enough that the premiums were still very affordable.
Maybe it’s time. Time passes, things change, and so does your need for insurance. Check out Good Financial Cents 10 Best Life Insurance Companies for great resources to any of your questions. Even if you are insured, it’s important to keep up with change – as an example, the Insurance Information Institute estimates that about a third of families don’t update their life insurance coverage after a new baby comes home. I’m an exception to this stat. Not only did I increase my insurance after having our first child, but I’m now increasing it again with the soon arrival of our second. I increased the amount dramatically so that I won’t have to worry about increasing premiums if we have another child.
If you’re young and you haven’t yet talked to a qualified insurance advisor, think about doing so today – you may be pleasantly surprised how affordable life insurance can be.
Warren Buffett is one of my heroes. He’s the second-richest man in the world, yet he lives more frugally than I do. CNBC recently broadcast an interview with Buffett. Naturally, it’s been posted to YouTube. Here’s the show in its entirety (with notes and excerpts I made while watching). [Update March 7, 2018: The show is no longer available online]
As a kid, Buffett would go door-to-door selling chewing gum and Coke. He’d buy six bottles for a quarter, and then sell them for a nickel each. He bought his first stock at the age of eleven. He bought a 40-acre farm at the age of fourteen using money he had saved from a paper route.
Some of his fundamental tenets for investing are:
Patience pays: buy ’em and hold ’em.
Invest in businesses you understand.
Look for businesses with “durable competitive advantage”.
Look for honest, able management.
Buy at a reasonable price.
Buffett notes that students today have a better standard of living than John D. Rockefeller once did. “Really getting to do what you love to do everyday — that’s really the ultimate luxury… Your standard of living is not equal to your cost of living.“
Buffett is happy if he can have a big-screen television, a bucket of popcorn, and sit in his sweats watching Nebraska football games. “The second-richest man on the planet lives the way he invests: simply and without much fuss.” He eats burgers, fries, and cherry cokes. His doctor gave him a choice: eat better or exercise. He chose to exercise.
CNBC: “You’re not one to accumulate a lot of things.” Buffett: “No. Most toys are a pain in the neck.“
Aswath Damodaran, a professor at NYU’s Stern School of Business says: “I think what Warren Buffet embodies is the importance of thinking for yourself, not letting other advisors, other experts, tell you what the right stock to invest in, because they’re coming from a very different place than you are.” In other words: do what works for you!
Buffett hasn’t made a penny off all the products that are pitched using his name. His favorite book about himself is by Lawrence Cunningham, The Essays of Warren Buffet: Lessons for Corporate America. (The same author wrote How to Think Like Benjamin Graham and Invest Like Warren Buffett, which also looks interesting.)
CNBC: “What is the one thing that young people should be doing about money?” Buffett: “I tell them two things, generally. One is stay away from credit cards… The second thing I tell them is to invest in themselves.”
CNBC: “What’s the number one thing you’ve learned from doing business with Warren Buffett?” Business Owner: “Ethics.”
CNBC: “What is the Warren Buffett secret to success?” Buffett: “If people get to my age and they have the people love them that they want to have love them, they’re successful. It doesn’t make any difference if they’ve got a thousand dollars in the bank or a billion dollars in the bank… Success is really doing what you love and doing it well. It’s as simple as that. I’ve never met anyone doing that who doesn’t feel like a success. And I’ve met plenty of people who have not achieved that and whose lives are miserable.”
You can find more information on Warren Buffett at The Warren Buffett fan center.
I graduated from college with a bachelor’s degree in English in business management, so I knew a great deal about metaphors, marketing, and even Russian literature. What I didn’t know was how to manage my money.
Although I’ve learned a lot about personal finance since then, I’ve also realized that many graduates enter the workforce feeling just as lost as I did. “Should I get a credit card?” “How much should I spend on groceries?” “Do I really need to start saving for retirement?”
Providing for your own financial needs and responsibilities can be overwhelming at first, but there are plenty of practices you can implement now to manage your money well! Here are seven healthy financial tips I wish someone had shared with me after I graduated from college.
What’s Ahead:
Consider a Variety of Jobs
After college, my dream was to become a writer. Plan B was “pastry chef” (I watched one-too-many baking shows in high school). And yet, despite my aspirations, my first job was as an admissions counselor—at my alma mater.
For many careers, it isn’t easy to find your dream job immediately after graduating. You might need to start with an internship. Or, perhaps you’ll find an entry-level position in an industry or company where you could rise to the job you want.
Fortunately, there are multiple ways to make a living and pursue your dream job. My position in admissions may not have been a direct step towards a writing profession, but the experience I gained in sales ultimately prepared me for my job today as a writer in marketing. I also gained some “real-world,” office experience, and a clearer understanding of how a business operates—which could help me manage my own bakery in the future!
All this said, don’t be so focused on finding the perfect job that you miss a unique opportunity to advance your career.
Learn to Budget
Early on in our relationship, my husband, Steve, and I were giddy to discover our personalities were quite alike. But, for all our similarities, we did not share the same approach to personal finance. He’s the saver, and I, sadly, am the spender.
Steve and I recognized early, however, that consistent budgeting would protect both our money and our marriage. Every month, we sit down with a cup of tea or glass of wine and review our expenses. It has taken years to nail down a budget and routine that works well for us, but I can say with certainty that the habit has spared us many arguments.
Whether you’re single or in a relationship, budgeting is essential for maintaining financial health. However, thanks to tools like YNAB, you don’t have to be an expert at money management to do it well. YNAB allows you to set up categories to plan and track your spending. It’s unique take allows you to “live on last month’s income” so you can break the paycheck-to-paycheck cycle. You’ll always know exactly how much money you have to spend.
Check out our full YNAB review here.
Start paying student loans NOW
Many college graduates receive a six-month grace period, during which they don’t have to start paying back loans—but that doesn’t mean they shouldn’t.
Experts suggest you start paying back loans immediately, if you’re able—even before graduation! By paying that debt down sooner, you can decrease your principal and potentially save thousands of dollars in interest over time.
You may also be able to save money by refinancing your loan(s) to a lower interest rate. Try researching options through Credible, an online marketplace that lets you compare rates from multiple lenders. Each quote is based on your unique credit profile, and rates are updated in real-time so you can get an accurate assessment of your offers.
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
Build an emergency fund
It’s easy to see the value of an emergency fund, and yet more than half of Americans could not afford a $400 surprise expense.
The trouble is many people don’t understand the significance of an emergency fund until they need it. Only a few months after I married Steve, I got a ticket for running a red light. I was mortified and ashamed and embarrassed—until Steve reminded me that we had an emergency fund. In a moment, all my stress slipped away.
To help you build your own emergency fund, consider a resource like the Wealthfront Cash Account. You can earn 4.55%APY on all of your cash—which is five times the interest from your average savings account! Wealthfront can even get your paycheck to you up to two days early, when you set up a direct deposit, so you can reap the rewards of that rate ASAP! As you start to save towards specific goals, organize them into buckets to track your progress.
Wealthfront is also a great option for individuals who want an easy segue from saving to investing. Many financial advisors won’t even talk with you, let alone manage your investments unless you have tens of thousands of dollars to work with. Wealthfront, on the other hand, lets you start investing with as little as $500 and will diversify your portfolio to match your unique risk tolerance. You can also integrate your Cash Account with your investment portfolio and have any leftover income automatically invested to maximize your time in the market.
Live on less
After receiving your first paycheck, you might assume you need that full amount each month to live comfortably—but every person is different, as is every salary.
My brother graduated from college this year with a degree in computational engineering (nerd alert!). His first job pays nearly three times what my first job paid me! So, before he splurged on a new TV, car, computer, etc., I gave him one small piece of advice: learn to live on less.
Instead of determining how much you can spend based on your salary, start with small budget categories and alter them when necessary. Steve and I began budgeting early in our marriage and thought we would need $200 each month for groceries, based on how much we’d spent on our own. As the months progressed, we recognized $200 wouldn’t meet our needs (and also that I love cooking), so, we added a little more every month until we reached a total that worked for us.
Those first few years out of college will set the stage for your financial health (or lack of) decades into the future, so start by learning to live on less. It will be much easier to increase your budget categories later, rather than limiting yourself in the future.
Begin saving for retirement
If you’re anything like I was at 22 years old, retirement might feel like a topic that’s easy to ignore. However, saving for retirement early can mean thousands of additional dollars for you and your family later in life.
Fortunately, there are companies that understand young people like us. For example, blooom is a retirement management company that provides a free analysis of your IRA and/or employer-sponsored retirement plan—whether you decide to sign up and pay for their services or not. After answering a few questions on their site, blooom offers professional advice on how you can adjust the allocation of your funds to avoid hidden fees and save more for the future.
Another reason blooom is especially useful for 20-somethings is that, unlike many investment management companies, they don’t require a minimum investment to manage your retirement plan. In other words, if you’ve just started your first job out of college and have barely contributed to your retirement plan, blooom is still ready to help. They can also manage your funds no matter where they’re located, so you won’t have to move your employer-sponsored plan to utilize their services.
Get a credit card
Let me be clear: what I am NOT suggesting is that you drive down to your favorite department store and sign up for their fancy rewards card that offers 10% off on your first purchase.
While a credit card can certainly have its perks, the better benefit for college graduates is its effect on your credit score—if you use it well. A good credit score can impact your ability to get a home mortgage loan or qualify for auto insurance. It may even influence a potential employer’s decision to hire you!
Start with just one card, at least for the first year. Search for options with low interest rates that require low spending levels to receive rewards. Finally, once you begin using the card, set up automatic payments with your bank and continue to monitor your transactions and payments often.
Remember that merely possessing a credit card does not improve your credit score; it’s how you use it. Credit cards can have a negative or positive impact on your life, so make sure you choose and use them wisely.
Summary
Taking steps toward healthy money management as a college graduate doesn’t have to be complicated—you just have to start off on the right foot.
As you search for jobs, consider a wide variety of options. Building a career takes time, and your dream job may require some entry-level positions or even an internship for you to get started. Once you’re settled into the workforce and begin receiving paychecks, develop a budget immediately! Be sure to include important goals like paying off your student loan(s) and saving for retirement. Finally, create habits like living on less and saving for unexpected expenses to help you better prepare for situations, expected or not, in your future.
Procrastination may have served you well in college, but it won’t help you achieve financial health. Act intentionally. Learning to manage your money well now will help you provide for your family, pursue new experiences, and prepare for whatever lies ahead.
Read more:
MoneyUnder30 receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. MoneyUnder30 is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
Houston, Texas, one of the major metropolitan areas in the United States, has no shortage of financial advisors. But which ones are worth the money? Sincehiring a financial planner can be a major expense, you want to pick the right match.
Get Matched with 5-Star Rated Financial Advisors in Your Area
I looked for financial advisors who have a solid reputation for putting their clients’ interests first, and who value building a long-term relationship with clients (think from your twenties and thirties until your retirement). Here’s who made the grade.
What’s Ahead:
Overview of the best financial advisors in Houston
Linscomb & Williams
Contact – (713) 840-1000.
Services offered – Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, sstate planning, wealth management, and more.
Asset requirements – Clients need at least $1 million in investable assets. This is a pretty high bar to entry, but the firm claims a diverse group of clients, including individuals without a high net worth.
Typical fees – A fee-only firm, You’ll pay a 1% annual all-inclusive fee for accounts with assets under $2 million. (If you hit $2 million and above, your fee drops to a smaller percentage.)
With over 40 years’ experience, Linscomb & Williams is one of the most well-respected firms in Houston. It has satellite locations in Austin and Fredericksburg, Texas, as well as three offices in Alabama.
Their staff boasts 23 financial advisors, including several who specialize in wealth management.
Like all the firms on this list, Linscomb & Williams is a Registered Investment Advisor (RIA) with the Securities and Exchange Commission.
Asset requirements – There’s no minimum asset requirement, but there is an account minimum of $375,000.
Typical fees – Chilton is a fee-only firm charging an annual 1% of managed assets (for accounts under $4 million) and taking no commissions.
Chilton Capital Management has offered financial literacy, planning, and investment services since 1996. Best of all, clients don’t have to be literal millionaires: Chilton Capital is the rare fee-only firm with no minimum assets required.
Thesmall but very well-credentialed staff includes three CFPs and seven chartered financial analysts (CFAs). Vice President Michael J. Stavar is a certified public accountant (CPA).
Asset requirements – A preferred $1 million account minimum, including assets.
Typical fees – Fee-only firm, $3,500 initial planning fee (waived if you sign on as a client), Fees start at 1.25% for the first $500,000 and drop to 1% for the next $500,000. Hourly rates for consultations ranging from $150-$350 an hour.
Established in 1999, Horizon Advisors works with partner CPA accounting firm Maddox Thomson & Associates to meet all your planning and tax needs.
They’re known for a personal approach with a low 1:54 advisor to client ratio (many advisors at other firms see hundreds of clients).
You’ll work with well-practiced advisors — two of whom, including firm president Larry Maddox, are CFPs. Other Horizon Advisors staff members boast CPA and chartered financial analyst (CFA) credentials.
Tanglewood Total Wealth Management
Contact – (713) 840-8880.
Services offered – Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
Asset requirements – $2 million ($3 million for those who want portfolio management without financial advice).
Typical fees – 0.60% annually for the first $3,000,000 and 0.35% for the next $17,000,000. The minimum annual fee is around $12,000.
Tanglewood Total Wealth Management describes their clientele as the “quietly wealthy.” If you own a business, have an inheritance to manage, have a lucrative career, or are otherwise negotiating “more money, more problems” Tanglewood has you in mind. With a hefty $2 million account minimum, Tanglewood is best for people further along on their journey to building wealth.
The staff includes six CFPs and one CFA. President John Merrill, a veteran CFP, is also known as a leader among Registered Investment Advisors (RIAs).
Asset requirements – Typical client has $1M+, but no hard set minimum.
Typical fees – Fee-only, Minimum annual charge of $5,000 — more than 2.5% of investable assets for clients with balances under $200,000.
The Financial Advisory Group, Inc. has been around since 1997. It’s on the smaller side, which isn’t a bad thing — fewer clients mean advisors can spend more time customizing your plan. Both the chairman and CEO are registered with the National Association of Personal Financial Advisors, as are most of the advisors on staff.
The Financial Advisory Group’s advisor qualifications include four CFPs, two CPAs, one CFP (Certified Financial Planner), and one JD (juris doctor, a law degree). You can expect expertise in accounting and law as well as finance and investment, though the Financial Advisory Group emphasizes it isn’t a formal CPA or legal firm.
Asset requirements – Investors need a minimum of $500,000 to $1 million in assets.
Typical fees – For investment management, you’ll pay 1.25% on the first $2 million in assets, then 1% on the next $3 million. The minimum annual fee is $5,000 regardless of account size.
The Goff Financial Group emphasizes “value investing.” Founded in 1994, they’re fairly new on the scene but they’ve already won a Better Business Bureau award for excellence.
Senior management at Goff includes a Certified Investment Management Analyst (CIMA) and a CFP. Founder Matthew Goff is a NAPFA-registered financial advisor. The firm is also a Registered Investment Advisor (RIA) with a fiduciary responsibility to clients.
Asset requirements – Requires $1 million in assets. Clients using the Pathway program only need $50,000 (not including a company retirement plan if they have one).
Typical fees – Fee-only, Pathway clients pay a modest $79 per month for accounts under $100,000, clients with over $100,000 in assets pay a percentage of their assets: 0.95% up to the first $1 million. Clients with higher starting balances will pay between 0.75% to 1.50% of total assets.
Financial Synergies Wealth Advisors is one company that welcomes younger investors, whether they’re maintaining individual accounts or building wealth for their families. The firm also specializes in working with professionals in the oil and gas industries, both booming in Houston.
It’s been recognized for excellent wealth management by the Financial Times and the Houston Business Journal.
Each financial advisor on staff is a CFP. The firm also has a certified divorce financial analyst (CDFA) and certified fund specialist (CFS) for those who need specialized plans. Individual advisors maintain NAPFA registrations in good standing.
Summary of the best advisors in Houston
Firm
Services offered
Primary clientele
Linscomb & Williams
Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, estate planning, wealth management, and more.
Young people just starting their high-earning careers and those with modest assets.
Those looking to start their financial journey on strong footing, young people without a lot of assets.
Horizon Advisors
Financial planning, tax planning, specializes in unusual tax situations.
Those searching for a more personal experience and people with reasonable assets.
Tanglewood Total Wealth Management
Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
High-earners searching for help with all aspects of their finances.
Young professionals who don’t have a lot of assets, but want to learn how to grow them.
How I came up with this list
Out of hundreds of financial advisory firms in Houston, these firms stood out because of their solid reputations and reviews. They also hit a few key benchmarks you should look for in any advisor.
They’re Registered Investment Advisors (RIAs)
At a minimum, I wanted to pick firms that are Registered Investment Advisors (RIAs) with professionals who are Investment Advisor Representatives (IARs). All RIA firms are financial fiduciaries, which means their advisors are legally obligated to act in your best interest rather than their own.
They’re fee-only
Fee-only advisors earn nothing but the money clients pay them. These costs might be an hourly rate, a flat fee, or a percentage (usually between 1% and 2%) of your managed assets. They don’t get commissions or financial incentives for recommending certain investment products.
This is the kind of advisor you want — since they don’t have conflicts of interest, their only motivation is to make the best decisions for you. A firm that also operates as an attorney or insurance broker, or earns commissions by selling products and services, might steer clients towards choices that would increase the firm’s profits.
Their advisors have top credentials
The most common individual credential isCertified Financial Planner (CFP) which requires specific economic education, three years’ experience, and continuing education every two years as the industry changes. AChartered Financial Analyst (CFA), another common designation, needs four years’ experience making investment decisions.
A NAPFA membership is also a good sign since NAPFA has strict ongoing regulations and all their advisors are fee-only.
They’re trusted by industry insiders
The financial advisory industry is heavily regulated; clients trust advisors to handle their life savings, so they need the most qualified people on the job.
Aside from reading objective reviews, I looked up each firm and its principal staff members on a few watchdog sites: theInvestment Advisor Public Disclosure database run by the SEC, and the independent search engineinvestor.com. Both sites screen for possible conflicts of interest and track whether an advisor has any disclosures, or complaints, on their record.
What questions should you ask a financial advisor?
Who are your typical clients?
You want a skilled advisor, and just as importantly, you want a good match. I wanted to find firms that will work with young professionals despite the high financial bar to entry. If a firm’s clientele is mostly mid-career executives and people ready for retirement, they may not be the best fit for a recent college grad starting to save for retirement.
How do you usually communicate with clients, and how often?
Maybe you’re content with quarterly reports on your investments and annual check-ins. Or maybe you want an advisor available by email or phone whenever you have a question. Get a sense of how regularly your planner will be available outside of any scheduled chats.
What’s your investment philosophy? What asset allocation do you use?
A good advisor will have a clear answer, including their plan to diversify your portfolio and increase returns.
How are you compensated? Do you collect any commissions for investment products?
Your advisor should be compensated with fees only, not commissions. Otherwise, they may guide you towards investment choices that will earn them money or boost their sales.
Who has custody of my assets?
Reputable financial advisors don’t actually have contact with your assets. Instead, they’ll trust client assets to a “custodian”—a larger brokerage, often a big name like Charles Schwab or Fidelity.
What are the costs of hiring a financial advisor?
Almost all advisors offer an initial free consultation (in-person or via phone) where you’ll discuss what you’re looking for.
If you decide to work together, your annual fee will most likely be a percentage of your assets under the firm’s management. A charge between 1% and 2% of total assets is the industry standard. For instance, if your advisor charges a 1% fee and you entrust $500,000 in assets to the firm, your fee is $5000 a year or around $417 a month. As your assets climb higher, you’ll pay a smaller percentage.
Some firms charge an hourly rate instead of an asset-based rate for working with advisors, usually between $200 and $500 an hour.
Summary
Whether you’re exploring the idea of hiring a financial planner in Houston or you’re ready to commit, use this list as a jumping-off point. Non-Texas residents should give these firms a look too, since many are licensed or have offices in other states.
Northwestern Mutual’s Planning & Progress Study reveals Americans with an advisor are much more confident about their financial future, yet only 37% work with one Advisors are Americans’ most trusted source for financial advice – more than loved ones, friends, news, FinTok and Reddit While older Americans want an advisor with sophisticated expertise, younger generations … [Read more…]
Yes, we’ve all heard it. Buying a home today might seem like the most unaffordable, and therefore impossible, it’s ever been. Home prices are near record levels, pushed up by bidding wars erupting on anything well-situated and move-in ready. Plus, mortgage rates are nearing 7%.
But here’s the thing: The baby boomers had it worse.
In May of this year, the typical buyer spent just under a third of their household income, about 32.8%, on housing. As uncomfortable as that might be, it’s not even close to how much buyers plunked down in the early 1980s.
In 1981, the same year the AIDS virus was identified, the Iran hostage crisis came to an end, and “Raiders of the Lost Ark” topped the box office charts, homebuyers that September and October spent 51.3% of their household income on their mortgage payments.
Let that sink in for a moment.
Furthermore, that percentage doesn’t even include what they paid for utilities, property taxes, insurance costs, and homeowners association fees.
Buying a home is “not as unaffordable as it’s ever been,” says Realtor.com® Chief Economist Danielle Hale. But, “in the grand scheme of things, housing is pretty unaffordable right now.”
To figure out how affordable buying a home has been over the past 50 years, the Realtor.com data team analyzed data going back to 1973. We looked at monthly existing single-family home prices from the National Association of Realtors®, weekly mortgage interest rates for 30-year fixed loans from Freddie Mac, and median annual household income from the U.S. Census Bureau. Then we calculated the typical mortgage payment of a buyer taking out a loan on the median-priced home and what percentage of their household income that would eat up.
The analysis doesn’t factor in regional price differences, new construction, or the percentage of income that individual buyers spent on homes.
“If you go back in history, you can find a period where housing is more unaffordable than it is now,” says Hale. “But you have to go back almost 40 years.”
Why today’s buyers wouldn’t want to purchase a home in 1981
In the fall of 1981, homes were cheap by today’s standards.
The typical single-family home cost just $66,125—about six times less than the cost this past May, according to the most recent data from NAR.
However, the typical household was bringing in only about $19,074 in 1981, according to U.S. Census Bureau data. And mortgage rates topped 18% that fall. (And you thought 7% was rough.)
Those turbo-sized rates meant that 99.5% of a buyer’s first year of mortgage payments was going toward just the towering amount of interest on the loan. The buyer didn’t pay down 10% on the principal of the balance until the 18th year of the loan, assuming the buyer didn’t refinance—which most buyers did. (This calculation includes a 20% down payment.)
Today’s average family is earning about $73,505 a year. But in May, they were contending with median existing-home prices of $410,100 and mortgage rates hovering in the mid-6% range and which have since risen to the high 6% territory. About 85% of their first year’s mortgage payments is going to interest.
One important difference is that instead of waiting nearly two decades to have 10% of their principal paid off, they achieve that milestone by year seven.
“Mortgage rates play a really substantial role in how affordable housing is at any time, especially since so many buyers buy with a mortgage,” says Hale.
Uncomfortable similarities between 1981 and 2023
There are a few similarities between then and now. Inflation was soaring in the early ’80s, causing the U.S. Federal Reserve to hike interest rates. (Sound familiar?) The nation was also in a full-blown recession in 1981. Fast-forward 42 years, and the nation appears to be flirting with another downturn.
The number of home sales slowed in the early 1980s as well as in this post-pandemic housing market as fewer folks can afford to buy due to higher mortgage rates.
Then, as now, most of those purchasing homes earn more than the median income—unless they had very generous family members, stock options, or trust funds. Or they’re existing homeowners who can put the equity they built in their last home into their new one.
“Boomers have been saying things were harder when we were young for a long time. And in some respects, they are right,” says Hale. “But in other respects, they don’t have the same amount of student loan debt and child care costs that young people have today.”
Plus, once mortgage rates fell, most folks who purchased homes in the early 1980s had refinanced their loans to lock in the new rates and “drastically” lower their monthly mortgage payments. By 1986, rates had fallen back down to the single digits.
Recessions and pandemics may be good times to buy homes
As counterintuitive as this may seem, recessions may be financially advantageous for buyers to purchase homes—if they remain employed and have the funds to do so. That’s because interest rates usually (but not always, as the early 1980s demonstrated) fall during economic downturns. That makes homebuying more affordable.
Over the past 50 years, homes were the most affordable as the country climbed out of the Great Recession. In early 2012 and 2013, buyers were spending about 14%—or less—of their income on a home. That’s because mortgage rates were below 4%.
The same thing happened in the early days of the pandemic. The economy ground to a halt as stay-at-home orders proliferated and mass layoffs ensued. To stimulate the economy, the Fed cut interest rates and mortgage rates fell below 3%—for the first time ever.
Those low rates triggered the big run-up in prices and offset those gains. Since buyers were spending less on interest, they could afford to purchase more house. The result? In spring 2020, buyers were spending just under 18% of their income on housing.
“Affordability is one of the factors that kicked off the buying frenzy that we saw in the early part of the pandemic,” says Hale.
It wasn’t until mortgage rates climbed above 4% in March 2022 that buyers began to get priced out. That month they spent just under 25% of their income on housing. As rates ticked up and affordability worsened, more buyers left the market and fewer homes went up for sale (as sellers didn’t want to give up their low rates).
The situation has only gotten worse, with buyers spending nearly a third of their income on housing in May.
“When housing is unaffordable, it’s very tempting to stretch your budget,” says Hale. But with inflation, rising property taxes, and high energy bills, “now’s probably not a good time to do that.”
When I learned that my late grandfather had left me his prized watch in his will, I was swept away by a confusing mix of emotions.
I felt touched, of course, that he thought of me and wanted me to inherit something he treasured so highly. Naturally, I also felt a pang of melancholy realizing that the watch came loaded with memories of his vibrant life, but also his passing.
The more surprising emotion, however, was stress. Did I really deserve this watch? What would I do with something so valuable? Would he expect me to wear it? What if I lost it? Am I allowed to sell it?
According to CNBC, around 40% of America’s young generation will inherit wealth. Much of the time, that wealth will come in the form of physical valuables like watches, jewelry, clothing, art, and collections.
If you’ve inherited something valuable or think you might in the future, you might already be facing the confusing mix of emotions that I went through. That’s why I felt inspired to write this piece. Despite the fact that millions of young people will inherit valuables, there’s not a lot of material out there to help us not only appraise and sell the items but get comfortable with the idea of selling in the first place.
What’s Ahead:
Process those complex emotions and decide if selling is right for you
When I received my grandfather’s watch, I found myself in a similar headspace as Frodo when he inherited The One Ring. Staring down at our newfound jewelry, the hairy-footed hobbit and I both realized three things:
It’s valuable.
I don’t exactly know why it was given to me.
I probably shouldn’t tell anyone that I have it.
Naturally, Frodo and I both reached the same, misguided conclusion – that we should hide it and never speak of it again. This, of course, was the wrong choice; basically, a form of procrastination until we figured out what to do with it.
Whereas Frodo eventually threw his inheritance into a volcano, that isn’t really an option for you and me. We know that whoever left us the item wouldn’t have wanted us to just bury it in our linen closet, so that leaves us with two choices: use it or sell it.
Most people assume that if their late relative left them something valuable, it’s because they wanted them to use it and enjoy it as they did in life. Therefore, if you immediately turn around and sell it, it’s like returning their thoughtful Christmas gift to the store. It’s awkward and uncomfortable, and the fact that it’s your inheritance makes it feel even worse.
However, while it’s possible that your late relative wanted you to enjoy whatever they left you, it’s important to distinguish the difference between inheritances and gifts.
Inheritances are not gifts
A gift is something that someone gives you with the full intent that you’ll use it and benefit from it. Therefore, if you return a gift to the store, it signals to the gift-giver that they missed the mark. That’s why we do it in secret.
An inheritance, however, is a form of wealth transfer. Your late relative may have intended for you to use and enjoy the item, or they may have fully intended for you to just sell it and benefit financially.
The difference between an inheritance and a gift, therefore, is the intent of the giver. A gift is always meant to be kept, while an inheritance is meant to be kept or sold.
If an inheritance is meant to be sold, why not just sell it and leave the money in the will? Well, most people don’t sell their valuables in their twilight years; they enjoy them in life and let the next generation decide what to do with them.
How do I know whether my late relative intended for me to keep or sell my inheritance? It’s impossible to say. There’s no statistic that says “XX% of baby boomers intend for their grandchildren to sell their inherited valuables,” and even if there was, everyone’s situation is different.
There are signs, however – if your late relative left you an extensive art collection for your 500 sq. ft. apartment, they probably intended for you to just sell it. If they left you their wedding ring and they know you’re about to get engaged, it’s a safe bet that they want you to use it.
But even if you conclude your late relative probably wanted you to keep your inherited valuables, it’s still OK to sell them.
Here’s why you shouldn’t feel guilty selling your inherited valuables
Inheritances can come in countless forms, from real estate to trust funds to diamond earrings. They can be intended for the recipient to keep or to sell, or anything in-between.
But regardless of their form or surface-level intent, the underlying intent of all inheritances is exactly the same: whoever left it to you wants you to prosper and be happy.
Your goal, then, is to handle your inheritance in a way that honors your late relative’s underlying wish: to make you happy. Keeping it and enjoying it might honor that wish, but so could selling the item and investing the money so you can achieve financial independence faster.
For instance, you could consider a robo-advisor with a lower buy-in like Betterment. Betterment stands out with an easy-to-use platform, a generous selection of Socially Responsible Investing (SRI) opportunities, and the ability to access a human advisor once your balance exceeds $100,000.
Putting your money into an investment opportunity can do a lot more for you than keeping the gift in a box at the bottom of your dresser for years.
Protect the item from theft, damage, and depreciation
Before you get your inherited valuable appraised and sold, you need to educate yourself on how to store it, protect it, and overall preserve its value.
For example, I inherited a rare Japanese teapot from a grandparent a few years ago valued at around $100. Because I love tea so much, I decided to classify this inheritance as a “keep.” However, because I never taught myself how to properly maintain such a fancy teapot, I let water sit in it for too long and rust it. Totaled and worthless, the teapot now sits in my kitchen as an ignominious reminder to not be a lazy knucklehead with my valuables.
The first step to inheriting something valuable, then, is to teach yourself how to use it, maintain it, and store it. Teapots may need special cleaning; art may need to be stored in a cool, dark location; leather goods need routine conditioning; watches may need winding, etc.
In tandem with proper care and maintenance, you’ll want to keep your valuables someplace safe. Even if your renters insurance has adequate theft protection to cover the value of your goods, you still run the risk of the claim being rejected or getting paid less than the item’s market value.
For small items like watches, jewelry, or card/coin collections, consider renting a safety deposit box at a local bank. $60 per year is a small price to pay for peace of mind!
For medium-sized items like artwork or furniture, your first inclination might be to borrow space in a friend or family member’s basement or attic. After all, a giant painting is probably too big to steal!
Storing valuable art/furniture in a basement or attic is a common mistake, however, because these areas are subject to moisture and variable temperatures, which can damage and devalue your stuff. Consider renting a climate-controlled storage unit instead, and look for one outside the city limits where it’s cheaper.
Lastly, if you inherit something really big like a car, you’ll want to protect it from the elements by parking it in a covered space or at least investing ~$250 in a fitted car cover. Since you’ll inevitably have to drive it, you’ll want to get some cheap collision and comprehensive coverage, too, which will also protect it against damage and theft. That may all sound expensive, but keep in mind that you’ll get it back when you sell it.
Big or small, once you have your inherited valuables safely stored and protected, it’s time to see what they’re worth.
Appraise the item
Before getting a professional appraisal, you can get a rough idea of how much your inherited valuable is worth by heading to eBay.
Don’t pay too much attention to asking prices in active listings. Sellers can ask for whatever they want; doesn’t mean it’ll sell.
For a better idea of your item’s true market value, filter by SOLD listings only. You can do this by searching for your item, then clicking “Advanced”
Then check the box for “Sold listings”
In this example, you can see that in general, vintage Gucci bags are selling for anywhere from $300 to $500.
eBay is an excellent self-appraisal tool, but you can also get a more accurate appraisal from a site dedicated to reselling your specific goods.
For example, I got my grandfather’s watch appraised at Precision Watches & Jewelry and Crown & Caliber – both were entirely online, requiring only a description and serial number.
For cars, I recommend using Edmunds’ True Market Value (TMV) Tool. It’s entirely free and can give you a realistic valuation of your inherited car in seconds. If you’re thinking of keeping the car your late relative left you, you can research its True Cost to Own (TCO) to know how much it’ll cost you in depreciation, gas, maintenance, repairs, insurance, etc. If you decide to sell the car, well, you can do that on Edmunds, too!
For art, furniture, and other assets that might prove difficult to appraise online, you can connect with a live appraiser. The American Society of Appraisers has an online directory where you can search for and connect with an appraiser of your goods in your area. Most appraisals cost ~$150 or less, and it’s worth it so you don’t end up underselling your stuff!
Sell the item
Your penultimate step, of course, is to make the sale.
Whoever appraised your item will also have tips for how and where to sell it. They’ll likely make an offer themselves; if so, just be sure to get multiple appraisals online to ensure you’re getting a good deal.
At the risk of sounding lecture-y, just be sure you follow the essentials of selling a high-value item; ship the item well-packed and well-insured, and if you meet anyone in-person, bring a friend and meet somewhere safe. Lastly, be sure the buyer brings cash or cash equivalents, such as Venmo or PayPal, so you receive your full asking price onsite.
I got some cold feet before selling my grandpa’s watch and you might, too. It helped to remind myself that my grandpa didn’t necessarily want me to wear his fancy watch; just to do something with it that made me happy. My grandpa was smart with money and achieved financial independence early in life, and would surely want the same for me. Therefore, I knew that if he saw me sell his watch and invest the money wisely, he’d be proud.
If you use the money from your inherited valuable to inch closer to freedom, happiness, and financial independence, your late relative will likely be proud of you, too.
So make sure you park your money somewhere safe. A Chime® Savings Account is a good example, with no monthly fees2 and a slick UI.
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
Summary
Inheriting a high-value item like a watch, jewelry, car, or even a rare piece of art can elicit a mixed bag of emotions. You may feel glad that your late relative thought of you, sad that they’re gone, and guilty that you aren’t sure what to do with the precious asset that they left you.
Selling an inherited valuable may initially feel uncomfortable, but it’s important to remember that whoever left it to us probably just wants us to be happy. Selling the item and investing the money to accelerate our financial independence is a great way to honor that wish.
Your first job thrusts you into the adult world and the tricky balancing act of managing your money. The key to a healthy, wealthy, and low-stress lifestyle is not to get rich, but to master this balance as early as possible.
Here are six money-related moves to make during your first job so you feel good about your future.
What’s Ahead:
1. Open a Checking Account and Set Up Direct Deposit
If you don’t have one already, you’ll need a checking account to safely store your money.
The two most common reasons Americans are hesitant to open bank accounts are a) they don’t think they have enough cash, and b) they want to avoid bank fees. But many banks won’t charge you a penny for opening an account. And as long as you maintain the required minimum balance, if there is one, you won’t get charged any low balance fees and might be able to avoid maintenance fees.
The next question would be: which bank? You might’ve heard shifty things about some brick-and-mortar banks in the headlines, so who can you trust? Chime® and LendingClub are two great online-only options for modern banking.
Chime
Designed to help young people build their savings while they bank, Chime offers a safe and rewarding place to keep the money from your first job — and even get it early.*
When you set up direct deposit with Chime, you may be able to get your paychecks up to two days in advance if you qualify for early direct deposit.3 What’s more, Chime not only doesn’t charge overdraft fees but will cover up to $200 in overdrafts for eligible accounts with a feature called Chime Spot Me®. If you overdraw, Chime will “spot” you the money and deduct it from your next deposit at no cost to you.5
For its simple tools and variety of features to help make your life easier when money is tight, this is an ideal first checking account.
Open a Chime account or read our Chime review.
* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 5 Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
LendingClub
If you want a bank with more features that’ll pay interest on your balance, check out LendingClub. LendingClub offers a fee-free checking account that earns interest and cash back.
LendingClub’s Rewards Checking account pays 1.00% APY on balances between $2,500 and $100,000 (and 0.15% on balances above this). It’s not much, but the interest will add up the more you deposit. Plus, you can earn 1.00% cash back on qualifying purchases you make with your LendingClub debit card. And like Chime, users may be able to get their paychecks up to two days ahead of schedule.
Open a LendingClub account or read our LendingClub review.
Related: Best No-Fee Checking Accounts
2. Get the Right Credit Card
Once you’ve opened a checking account, your next step is to apply for a credit card. This can be through your current bank or a new institution altogether.
As a good rule of thumb, you should look for cards that have no annual fees and come with benefits like cash back and free stuff. But as you’re browsing rewards cards, make sure you choose one that actually makes sense for your spending habits.
Most likely, a fancy metal card that offers a high rewards rate on one category wouldn’t be as useful to you as a more basic rewards card that offers less cash back on more categories. Watch out for high annual fees and high interest rates with any rewards card.
One of the best cash back credit cards out there is the Chase Freedom Unlimited®. We recommend this card for anyone looking to build their credit when they start earning money from their first job.
For starters, this card offers a wide array of cash back categories. These are:
5% back on travel booked through the Chase Ultimate Rewards® portal
3% on dining, takeout, and drugstore purchases
1.5% on everything else
For a card with no annual fee that you can qualify for with average or good credit, you can’t do a lot better.
Read our Chase Freedom Unlimited® review.
Secured Credit Cards
Depending on your income and credit score, you might not qualify for the exact card you want. Most unsecured credit cards like the Chase Freedom Unlimited® have income requirements and want to see a certain credit score from applicants. Frankly, it can be tough to meet these as a newbie.
Secured credit cards can be a great option for people applying for credit for the first time. These are called secured because they require a security deposit, which is used as collateral in the event that you can’t pay back your balance. Secured cards tend to be easier to qualify for than unsecured cards but help you build credit all the same.
The OpenSky® Secured Visa® Credit Card is one of the best secured cards out there. With this card, you’ll put down a security deposit of between $200 – $3,000 when applying and this will become your credit limit.
All of your payment activity is reported to the three major credit bureaus, so making your payments on time will set you up for success and a better credit score.
What’s unique about the OpenSky® Secured Visa® Credit Card is that it doesn’t require a credit check or affect your credit when applying.
Read our review of the OpenSky® Secured Visa® Credit Card.
3. Start Budgeting
Budgeting is like driving. When you’re first starting out, it’s awkward, anxiety-inducing, and decidedly un-fun. But eventually, it kind of becomes second nature.
Effective budgeting can help you save money and feel less stressed. Knowing precisely how much money you have and where it’s going means there are no surprises and helps you plan for your financial goals. But making a budget and following it is a whole lot easier said than done.
If you’ve ever tried and failed to stick to a budget, it’s probably because you weren’t using the right tools. Trust us when we say the right tool makes all the difference.
We recommend PocketSmith and YNAB to beginners. If you want to make sure the money you’re earning from your new job is being put to good use, start with one of these budgeting products.
PocketSmith
PocketSmith is not your average budgeting app.
Yes, it’ll track your income and expenses and sound warning bells when you’re about to go over budget. But its most unique and useful feature is financial forecasting. With this, can insert a “dummy expense” and see how it’ll affect your finances as far as 30 years into the future. For example, if you want to go on a $3,000 vacation, you can see how much of a hit your money will take a year or two from now from that trip.
This feature is especially helpful for people with a new source of income.It takes a lot of practice to learn what you can afford to buy with each paycheck, and PocketSmith can save you from making some costly mistakes.
Start budgeting with PocketSmith or read our Pocketsmith review.
YNAB
You Need a Budget (YNAB) makes zero-based budgeting not only possible but simple. By linking your bank accounts, the app pulls information about your cash flow to quickly show you how much you have to spend. Then, you “give every dollar a job” each month by allocating all of your money to different spending and expense categories. Throughout the month, YNAB logs your transactions for you to help you stay on track in each budgeting category.
YNAB offers a variety of visuals and resources to help you figure out what you’re doing as you’re doing it. If you’re budgeting (or even just making money) for the first time and want to start out on the right foot, this tool is for you.
Start budgeting with YNAB or read our YNAB review.
4. Start Building Good Credit
You’ve probably heard a used car commercial say: good credit, bad credit, no credit, no problem! So what exactly is “credit,” why is it important, and how can you build it?
Your credit score is a three-digit number between 300 and 850 automatically assigned to you and updated regularly by the big three credit bureaus: Equifax, Experian, and TransUnion. Each bureau will have a slightly different score for you, but they’ll be roughly the same. Your score essentially tells financial institutions how reliable you are and how likely you are to actually pay your debt.
Having good credit throughout your 20s and 30s pays off big time. For example, if you take out a $25k auto loan with a credit score of 750 instead of 650, you could end up paying ~$6,000 less in interest over 60 months.
Thankfully, building credit is pretty simple if you’re consistent.
Here are the two main things you can do to build good credit:
Spend less than 30% of your credit limit each month on your card – this is called your credit utilization ratio and it says a lot to lenders about how responsible you are
Pay your balance in full and on time – set up automatic payments to avoid missing due dates
Related: How To Build Credit the Right Way
5. Open a Retirement Account
Is it ever too early to think about retirement? Nope! In fact, opening a retirement account as soon as you get your first job is one of the best decisions you can make.
A retirement account is a specialized savings account that you add to while you’re working and withdraw from when you retire.
The sooner you open a retirement account, the longer your money has to mature and earn interest (and interest on that interest).
How much interest you earn depends on the type of retirement account you open. The two most common types of retirement accounts are 401(k)s and IRAs.
The main difference between a 401(k) and an IRA is that your employer opens a 401(k) on your behalf but you open an IRA yourself. Some employers will match your 401(k) contributions up to a certain percentage each year. 401(k)s are common for full-time employees on payroll and IRAs are more common among self-employed folks.
If your employer doesn’t offer 401(k) options, you can open an IRA yourself pretty easily.
So after you open an account, now what? Your bank can manage your retirement accounts for you or you can hire a third-party advisor to take over.
There are a lot of ways to go about getting help managing and optimizing your retirement accounts, but one of the best options for beginners is a robo-advisor.
A robo-advisor is an automated platform that uses an algorithm to help advise your investments. Blooom and Betterment are two of our favorites.
Related: How To Figure Out What Retirement Account To Open First
Blooom
Like other “robo-advisers,” blooom uses AI to optimize your retirement accounts.
To get started, you give blooom information about how much risk you’re willing to take with your investments and when you hope to retire. Maybe retirement is the last thing on your mind now that you’ve started a new job, but it shouldn’t be.
With blooom, there’s no pressure to know what you’re doing with your retirement accounts. The platform will make recommendations to make your 401(k) or IRA more profitable, rebalance your investments, and save more by avoiding hidden fees. They’ll even suggest an investment strategy for you and help you set goals.
Blooom can help manage both employee-sponsored 401(k)sand Roth IRAs at an incredibly low rate.
Start investing with blooom or read our blooom review.
Betterment
Betterment is another great choice. This robo-advisor can help you pick the right retirement accounts for your needs from a list of options. If your go-to retirement account is an IRA, Betterment can help you choose between traditional IRAs, Roth IRAs, and SEP IRAs.
To get started, all you’ll need to do is answer a few questions, and Betterment will build and manage an investment portfolio for you that aligns with your retirement goals. Then, they’ll handle rebalancing and managing your investments too according to your goals. Plus, Betterment offers tax-smart tools to help ensure your investments are always working efficiently.
Start investing with Betterment or read our Betterment review.
6. Sign Up for Health Insurance
Most medium- to large-sized employers offer health insurance and automatically deduct your premiums from your paycheck. Sometimes your company’s health insurance is optional and sometimes it’s required. Usually, you can save when you get health insurance through your work because employers can negotiate better benefits and premiums from providers.
Once you opt in, you’ll receive a benefits package detailing everything your insurance covers. Take the time to read through this carefully because understanding the benefits and perks of your plan can seriously pay off.
For example, one common perk of employer-sponsored health insurance is free or subsidized gym memberships, which can save you hundreds annually. You might also be able to save on everyday health items you buy anyway.
Choosing Health Insurance
If your employer doesn’t offer health insurance benefits, you’ll probably want to get some health insurance on your own to protect yourself from medical debt. Policygenius can help you choose the right provider for you.
Policygenius aggregates insurance quotes for any type of insurance you may need, ranging from auto insurance to life insurance to pet insurance. Basically, it does the hard work of comparison shopping for you.
The site saves you time and money by showing you only the best health insurance offers based on your answers to a few basic questions about what you’re looking for. Your privacy is protected and your personal details are not shared with any companies until you sign up.
Get insurance through Policygenius or read our Policygenius review.
Related: How To Pick a Health Insurance Plan
Summary
Becoming happy and well-off isn’t a matter of making money, but managing it. Making these six smart money moves when you get your first job shouldn’t take you more than a few hours and a few hundred bucks, and will accelerate you on your path to financial freedom.
Focus on doing these things – and doing them right – soon after you get that first paycheck.