Saving and investing — they’re both critical to achieving your financial goals. They both require you to put money aside, but for very different purposes.
Saving is ideal for short term goals (vacations or a rainy day fund). Investing is for long-term goals (down payment on a house or retirement).
But if you’re confused by the difference, you’re not alone. Most people in the U.S. don’t save enough, according to think tank Economic Policy Institute. And only half invest, according to a recent report from polling organization Gallup.
Take a look at this video. It will help you understand the difference between saving and investing.
Originally appeared on Learn.Stash.com and written by Jeremy Quittner, the Stash financial writer.
When most people think of investing they think of stocks, bonds and real estate. Very few people know about a very new asset class that is changing the face of investing and introducing investment possibilities to new investors. CryptoCurrencies have only been around since 2009. Designed as a way to make peer to peer payments over the web, cryptocurrencies have made countless millionaires and offer an investment platform for regular people.
The first cryptocurrency, Bitcoin, was created in 2009. It was designed to allow people to pay for things over the internet without middlemen, like PayPal. Since it’s inception, the value has grown over 4000%. People use Bitcoin as a store of value and to buy things over the web from places like Overstock.com. As more people have gotten into the market, the value has grown exponentially.
As an investment, cryptocurrencies are very attractive to new investors. They are particularly appealing because of the very low entry costs. It’s possible to start buying cryptocurrencies like Bitcoin for as little as $10. People enjoy investing in cryptocurrencies because they have huge medium and long range growth potential. Investing $100 in 2010 would have made you a multi-millionaire today. There are lots of reasons why people invest in cryptocurrencies. A little research will help you to find the best reason for you.
Where can I buy CryptoCurrency?
The only place I purchase my crypto-currency is Coinbase. A reputable exchange, Coinbase is one of the oldest exchanges for Bitcoin, Litecoin and Ethereum. It allows individuals to purchase all three of these currencies and store them in an online wallet. Through Coinbase, you can keep track of the value of your investments and also use it to make purchases. Our next blog will discuss digital wallets and where you can spend your new found wealth.
For more information, go to http://www.investnoir.com.
If you’re a business owner, you are used to wearing a lot of hats. Still, you can’t be an expert at everything, which is why it’s important to build a network of trusted professionals that you can turn to for help whenever the need arises.
No matter how successful you are, there are plenty of reasons to establish a professional network. In addition to exchanging contacts and referrals, there’s also the opportunity to share ideas and receive free advice from specialists in their field. And, much like getting a second opinion on a medical procedure, your network can act as a system of checks and balances by making sure you weigh all your options.
Ask yourself: Whom should you invite to be part of your network? While the members may vary depending on your strengths and weaknesses, your team should probably include some—or all—of the following professionals:
Attorney
Unless you have in-house council or a legal background yourself, an attorney—especially one with some experience in your industry—is almost a necessity. Among other things, an attorney can help defend you and your company from potential lawsuits, review contracts, and help with succession planning.
Accountant
While most people only use their accountant during tax season, business owners will find that an ongoing relationship can save them money in the long run. Not only can an accountant keep you from running afoul of the IRS, they can also show you how to structure your business and become a more tax-efficient operation.
Banker/Financier
As we all know, cash flow is the lifeblood of any business. And in today’s restrictive lending environment, having a banker in your corner can be a real boon. By providing easy access to credit, or letting you hear about the most favorable rates, a banker can be an invaluable addition to your team.
Insurance agent
A professional insurance agent can help you prepare for a number of critical business issues. Specifically, an insurance agent can help your business overcome the loss of a key employee, enhance your executive benefit package, fund a buy-sell agreement, and protect your family’s future by insuring your business interests.
As you can see, there are a host of advantages to creating a network of professionals with expertise in their field. Best of all, it’s a win-win for all parties, so setting one up may be easier than you think.
This educational, third-party article is provided as a courtesy by Tarra Jackson, Agent, New York Life Insurance Company. To learn more about the information or topics discussed, please contact Tarra Jackson at TRJackson@ft.newyorklife.com.
Three in four adults agree that they could benefit from guidance and answers to everyday financial questions from a professional, do you agree with them too?1
Since women control or influence the handling of the household finances, here are five things every woman should know about their finances, including a few tips from New York Life to get you started on the path to Financial Freedom.
#1 Maximize your tax credits 2:
Each year the deductible amount you can contribute to a retirement account is increased for inflation, and there are catch-up contributions for those 50 or over.
You can receive a $1000 tax credit for each of your qualifying children, in addition to each dependent’s personal exemption. Don’t forget to take this credit-it’s like receiving $1000 tax-free in your pocket, as long as your income doesn’t exceed the limitations.
The child and dependent care credit will cover up to $3,000 of qualifying expenses if you pay a babysitter or day care center so you can work or go to school.
#2 Become a S.M.A.R.T. spender:
Set S.M.A.R.T. financial goals (Specific, Measurable, Achievable, Realistic and Time bound) and create a spending plan in 4 steps3:
1. List your income
2. Compare your income and expenses
3. List your expenses
4. List your resources and set priorities
#3 Develop a savvy investment strategy:
Finding the right mix of investments depends on your available assets, your financial goals, your time horizon, and your tolerance for risk. It is important to ensure a balance between three things: liquidity, return, and risk. Start systematically investing as soon as you are able so that a reasonable amount is saved, even after just a few years. The compounding effect can help to speed up your savings4.
#4 Know your credit score:
Based on the factors below you are assigned a credit score between 300 (low) and 850 (outstanding). Here are the main areas in which you are graded and given credit scores, and the approximate weight that each area is given5:
Payment history: 35%
Outstanding debt: 30%
Credit history: 15%
New credit and types of credit: 20%
#5 You are your most important asset:
For most people, human capital is the missing piece of their portfolio. You insure your car, in the event you get into an accident. You insure your belongings, in case they’re lost or stolen. Your biggest asset is your ability to get up every day and provide for your family, whether by working or being the primary care giver. How do you insure your biggest asset? Through life insurance products.
A financial professional is trained to help you select and recommend vehicles that are suited to your protect your specific needs. You might find that working with a trained financial professional can help you to make well-informed decisions and stick with your financial plan — it is important that this is someone you are comfortable working with.
Click here to learn more about how New York Life can help you educate yourself on financial matters and set you on the path to a secure future.
Article by New York Life Insurance Company:
1 The 2014 Consumer Financial Literacy Survey, The National Foundation for Credit Counseling, http://www.nfcc.org/NewsRoom/FinancialLiteracy/files2013/NFCC_2014FinancialLiteracySurvey_datasheet_and_key_findings_031314%20FINAL.pdf
Financial Freedom means different things to different people. For some financial freedom may be having a significant savings for emergencies or retirement, paying off debt and living debt free, or ownership of a home or business. Whatever Financial Freedom may mean to us, individually; there is a common fundamental financial foundation that must be established.
How do you eat this Fundamental Financial Foundation elephant? One bite at a time.
In response to hundreds of people across the country asking for financial help in an easy to understand and implement manner, Tarra Jackson, known as Madam Money, a seasoned financial executive and syndicated financial contributor, is introducing the 30 Days to Financial Freedom Challenge (#30D2FF).
Who Can Accept the Challenge and Participate
This challenge is a free, online financial program designed to help 1,000+ adult individuals and families who are ready to achieve their goals for Financial Freedom. Feel free to challenge your family and friends to access their Financial Freedom in 30 days.
How to Accept the Challenge
To accept and participate in the 30 Days to Financial Freedom Challenge, simply
Text 30D2FF to 313131 for Financial Freedom Simple Tasks Text Alerts.
When does the Challenge Start
The Challenge begins on Monday, May 4, 2015. Participants will receive a simple task to complete via email or text alert each week day for 6 weeks to help them work towards their financial freedom. The challenge also gives participants helpful lessons and resources to help them on their journey.
We look forward to connecting, sharing and reaching Financial Freedom with you.
In his 2014 State of the Union address, President Barack Obama announced the introduction of the MyRA plan, as a way to get more Americans to begin saving for retirement. What does this mean for your investments? Can you open a MyRA account before the end of the year to take advantage of tax benefits? In this article Investorjunkie.com explains what the MyRA plan is, as well as the pros and cons to help you decide if it will be right for your retirement plan.
What is a MyRA Account?
MyRA is short for My Retirement Account. The plan will be offered through employers, but isn’t something they’ll maintain the way they do with 401(k) plans.
The program is targeted at people who have no other savings accounts for retirement. It’s thought by creating an advantageous program for low-income earners, and those who do not have the availability of an employer-sponsored plan, it will help kick-start retirement savings across the country.
The program is intended to be an entry-level retirement plan, which will eventually get investors interested in moving up to more traditional plans.
As it is designed, MyRAs will have some similar features to Roth IRAs, but enough variations that it will be an entirely new program.
The plan details are expected to be finalized by December 31, 2014 and is being rolled out this year as a pilot program with limited participation. It will be available only to those who are not currently covered by employer-sponsored retirement plans, and only to people in households earning less than $191,000 per year.
Eventually, however, it’s expected to be extended to low- and middle-income households who do have an employer plan.
How Does a MyRA Account Work?
Not a lot of detail is yet known about the plan. But as it stands now, MyRAs are to be set up with similar characteristics to Roth IRAs:
Maximum contribution is $5,500 per year
Like a Roth IRA, contributions are not tax deductible when made, but investment earnings accumulate on a tax-free basis
Also like a Roth, the money withdrawn is taken out tax-free
Contributions can be withdrawn any time, but investment income taken out before age 59 ½ will be subject to taxes and penalties
So far, so good. But here’s where a MyRA account shifts gears:
The account will be held with your employer, who will “neither administer the accounts nor contribute to them”
The accounts will be fully transferable from one employer to another
You will not have a choice as to how the money in the account is invested
There is no risk of principal loss, as it is guaranteed by the U.S. Government
There will be no administrative fees on the accounts
Accounts can be opened with as little as $25, and funded with contributions as low as $5 per paycheck
The income limit on the program is $191,000
Eventually you’ll be able to make contributions even if you’re covered by another retirement plan
The account must be rolled over into a regular Roth IRA once the account is 30 years old, or the balance reaches $15,000
As more info becomes available, we’ll continue updating this post.
The Case FOR a MyRA Account
If you cannot have an employer-sponsored retirement plan, or have not been able to save for retirement for any reason up to this point, a MyRA account may be an excellent option. It will at least get you started with retirement savings, and for many people that’s the single biggest obstacle.
Another major plus for the plan is investing is completely risk-free. The money will be invested in U.S. government securities, which guarantees repayment of principal. You’ll be able save money without fear of loss — which is another reason low-income people fail to save and invest for retirement.
There’s also the obvious advantage of being able to open the account with very little money, and to fund it with just five dollars per paycheck. Since IRA plans typically require contribution minimums of $50 or more, this should prove to be a major plus for low-income investors.
The Case AGAINST a MyRA Account
While MyRA accounts definitely have certain appeal to people who have not saved for retirement, there will be very little incentive for those who already are.
Tarra “Madam Money” Jackson is a financial educator, international speaker, author, and wealth empowerment strategist helping you heal, build, and grow your wealth.
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