Money Management

Nothing can replace you, but there is a way to replace your income even after you’re gone. Here’s what you need to know to protect your family. 

I know I’m not the only one to struggle with holiday shopping. It’s tricky enough to find the money and the time to go looking for gifts. Then, there’s the even more challenging task of trying to pick the perfect present for everyone on your list.

If you’re still looking for ideas, I have one for you. It might not be the most exciting gift, but it’s one your family might really be thankful for someday.

The gift that keeps on giving after you’re gone

There’s no present as valuable as your presence in your family’s lives. But unfortunately, we never have any guarantees about whether we’re going to live to see tomorrow. And even after we’re gone, there’s still going to be work to do and bills to pay.

That’s where life insurance comes in. It pays a death benefit to the beneficiaries in the event of the policyholder’s death. These policies can be worth anywhere from tens of thousands to millions of dollars, depending on how much the policyholder wants to spend and what they’re approved for. But they could go a long way toward ensuring the beneficiaries remain financially secure long into the future.

It’s best to purchase life insurance as young as possible, because prices are usually much higher for older applicants. It’s often possible to get a six-figure policy for less than $20 per month if you’re under 50. So now’s the perfect time to start looking for those who don’t already have a policy.

How to find the perfect life insurance policy

The first major decision to make is whether to get a term or whole life insurance policy. Term policies only remain in effect for a certain number of years — usually 10 to 30. If the policyholder dies during this time, the insurer pays out the death benefit. And if not, the insurer keeps the premiums. These types of policies are pretty flexible and more affordable than permanent policies.

As you might have guessed, permanent life insurance policies last the policyholder’s entire life. These are more expensive because there’s a guarantee the insurer will pay out at some point. There are also two types: whole and universal life insurance. Whole life insurance is typically seen as more stable, while universal life insurance is more flexible. It’s up to each person to decide which type of policy is best for them.

The next major decision to make is how much life insurance to get. The general rule of thumb is to at least buy enough to pay off any debt and replace any income the policyholder provides for the family. This way, if the policyholder dies, beneficiaries will have a cash reserve they can use to make up for that lost income and to pay off their debts. You can also check out the DIME method which includes debt, income, mortgage, and education costs for any children.

It’s also important to think about riders the policyholder may want to add. For example, some permanent life insurance policies have a rider that enables policyholders to tap their benefit while still alive to cover long-term care expenses.

With these decisions made, it’s time to get quotes from top life insurance companies. Some insurers have online quote tools that can give applicants an idea of how much they’d pay for their coverage. But many require a medical exam, especially if the policy has a large death benefit. So it may not be possible to know the exact premium until this is done.

Compare quotes from a few providers and then, if rates are reasonable, consider purchasing a policy. Be sure to let your beneficiaries know about it so they can claim the death benefit if they ever need to.

Hopefully, your family doesn’t have to worry about life without you for a long time. But they might appreciate having the extra financial help if that were to happen. And you might enjoy the peace of mind that comes with knowing you’ve done everything you could to protect your family after you’re gone. Even if you never reap any direct financial benefit from your life insurance, it’s still money well spent.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Today’s mortgage rates are sky-high. But it may be possible to borrow at a lower rate. Read on to learn more. 

There’s a reason so many would-be home buyers are struggling with the market today. Not only are home values elevated, but mortgage rates are the highest they’ve been in years.

As of early November, the average 30-year mortgage rate was 7.76%, according to Freddie Mac. Compare that to the 3% rates mortgage lenders were offering up in 2020 and 2021, and it’s easy to see why today’s buyers are downright frustrated and discouraged.

One company, however, is trying to help home buyers today snag 3% mortgages. And that could open the door to more opportunities for buyers and sellers alike.

Breaking an unpleasant cycle

Both buyers and sellers today are stuck in a trap. Buyers can’t find affordable properties because borrowing rates are high and inventory is limited.

Sellers, meanwhile, can’t easily upsize or move because they don’t want to give up the attractive mortgage rates they’ve locked in on their current loans. And they can’t necessarily charge ultra-high prices for their homes to compensate for the higher mortgage rates they’ll be looking at for replacement homes because buyers can’t afford to pay up when borrowing rates are high.

Roam, a real estate company that launched recently, thinks it has a great solution to this problem. It involves helping sellers transfer their existing mortgages to willing buyers.

Normally, a homeowner can’t just sign their mortgage over to a new borrower. But some mortgages fall into the category of assumable loans, which means that it is possible for a seller to transfer their mortgage to someone else.

What Roam is looking to do is connect sellers with assumable loans to buyers who are looking to assume them. That way, everyone wins, in theory.

How do sellers come out ahead in this situation? It’s simple. A seller who can sign over their 3% mortgage to a buyer might be in a position to command a much higher sale price for their home. A buyer might be willing to pay that higher price in exchange for a 3% mortgage instead of one close to 8%.

Will this tactic work?

Roam’s idea is a good one in theory. The problem, though, is that many mortgages won’t qualify to be transferred from one borrower to another.

Mortgage lenders don’t tend to like assumable loans because they create more administrative work for less money. To put it another way, a mortgage lender today would rather take the time to write a new $200,000 loan at 7.76% than to deal with the paperwork that allows an existing borrower to transfer a $200,000 loan at 3% to somebody else.

That said, an estimated 22% of active mortgages today are part of loan programs that allow for these transfers, says data firm Black Knight. These include VA loans and FHA loans.

There’s also the fact that many homeowners may not realize that their mortgages are assumable. And buyers don’t exactly have an easy way to identify loans that fall into this category, either.

That’s where Roam comes in. The company plans to identify homes with assumable mortgages, advertise them accordingly, and help with the administrative side of transferring those loans. The company is initially launching in Georgia, Arizona, Colorado, Texas, and Florida.

If you live in one of these states, you may want to be on the lookout for listings that offer the option of assuming an existing mortgage. It could result in a world of savings for you.

Get the best mortgage rate available

Of course, it’s too early to say whether Roam will be successful. But it’s encouraging to know that buyers today may have the option to get their hands on 3% mortgage rates — even if they’re going about it in a less conventional fashion.

Meanwhile, home buyers who aren’t able to take over an existing mortgage can still take steps to snag the most competitive interest rate possible on a new loan. Boosting your credit score, for example, could help you save a bit on a mortgage, as could shopping around and comparing offers. And if you’re able to swing the higher monthly payments that come with a 15-year loan, that, too, could lead to a much lower interest rate on your mortgage.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Smart Cash automatically gets you the best rates on deposit. Find out whether it’s right for you in this firsthand review. 

Titan Invest, a robo-advisory app, released a banger of a feature earlier this year. It’s called Smart Cash, and it’s quickly become one of my favorite releases ever. It’s so dang clever, it’s hard to imagine a future in which other companies don’t copy it to death.

It works by funneling your deposits into a combination of treasuries and money market funds. Smart Cash automatically moves your funds around as better, more profitable opportunities arise. So you could earn a 4.5% yield one day and 5% the next, with no effort on your part.

Rates are sky-high right now, so it’s the perfect time to earn with Smart Cash. I’m taking advantage of it while it lasts. It could be better, though. Below, I’ll dive into the three promises Titan Invest makes about Smart Cash, as well as my personal experience using the feature.

Smart Cash features

Titan Invest describes Smart Cash as a way to get the highest rates automatically, outsmart taxes, and stay low risk (and liquid). That’s all the benefits of a savings account, money market account, and treasuries rolled up into one. But how does all that actually work?

Automatic rate upgrades

Smart Cash moves your money to the best-yielding cash equivalents available. Generally, the higher your deposits, the better rates you can earn. For example, if you deposit $500 into Smart Cash, you might only qualify for a 4% rate. But if you deposit another $500, Smart Cash might bump your rate to 5%. It does this by moving your deposits to higher-yielding partner funds.

To offer automatic rate upgrades, Titan Invest partners with companies like Vanguard and Fidelity. That way, it can provide customers with a spread of funds and choose only the best. Smart Cash automatically chooses where to allocate your deposits — you don’t get to choose.

I’ve found this works as advertised. The more I deposit into Smart Cash, the better my earnings. Rates have also automatically gone up alongside Federal Reserve rate hikes. It’s a good time to save!

Tax benefits

Smart Cash considers after-tax implications for you. Taxes can be complicated. Titan Invest simplifies that by considering tax benefits offered by its partners and treasury funds. Titan Invest combines your details (income, tax filing status, state, etc.) with the best available deposit options to get you the highest returns possible.

Safety

Titan Invest promises to only put money into cash equivalents that are low-risk, liquid, and come with insurance. You can check out its partnered institutions (and partner rates) on its website. They include Vanguard, Schwab, Fidelity, and JP Morgan, among others. Deposits are SIPC-insured up to $500,000.

Titan Invest claims funds are liquid. In my experience, it’s taken a few business days for withdrawals to hit my bank account. It’s less liquid than a high-yield savings account, but it’s good enough for my needs (I’m using it to save for a deposit on an apartment).

The future of high-yield deposit accounts

I can easily imagine modern investment apps like Robinhood or SoFi offering similar features to customers. My biggest problem with high-yield deposit accounts is that it’s impossible to keep track of which one offers the best rates. Smart Cash handily solves that problem for me.

But Smart Cash is only as good as the rates offered by brokerage partners and U.S. treasuries. For now, I’m taking advantage of high interest rates to save faster. When rates fall, I’ll be keeping an eye on Smart Cash to make sure it doesn’t lose what makes it special.

The future of high-yield deposit accounts may be automatic deposits into safe, high-yielding accounts. Smart Cash joins the ranks of standouts like Raisin, which offers one dashboard to deposit into some of the best savings accounts, money market accounts, and CDs.

I’m excited to see what other features come out of Smart Cash and similar offerings. The future of money looks to be more hands-off and easy to manage, should you choose. I’m all for it. The less time I spend bumping numbers around a screen, the better.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool recommends Charles Schwab and recommends the following options: short December 2023 $52.50 puts on Charles Schwab. The Motley Fool has a disclosure policy.

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Planning to make the most of Black Friday? Here’s why you may want to do the bulk of your shopping that day at Costco. 

Black Friday will be here before we know it. And whether you’re a fan of the mega shopping event or not, you should know that many retailers will no doubt be offering great deals that day that result in a world of savings.

You may be inclined to turn to a big-box giant like Walmart or Target for your Black Friday shopping. But here’s why Costco may be a much better choice.

1. You can buy more than just gifts

It’s not just discounts on clothing and electronics that you’re likely to find at Costco on Black Friday. The warehouse club giant is likely to have a host of marked down products, from grocery items to household essentials. You can double up on savings that day and avoid having to make a trip to another store.

Plus, by Black Friday, you may be at the point where you can no longer procrastinate on buying holiday decorations. Costco carries those, too, so you won’t have to make a run to a specialty store.

2. You can score 4% cash back on your purchases with the right strategy

Snagging extra cash back on your purchases is a good way to offset the blow of your Black Friday tab. And if you play your cards right, you can score 4% cash back on your Costco purchases that day.

All you need to do is upgrade to an Executive membership before the big day and apply for the Costco Anywhere Visa® Card by Citi. Both the Executive membership and the card will give you 2% back on your Costco purchases, and you can double up for a total of 4% back.

3. You can return your purchases after Black Friday without a hassle

Costco is known for having a generous return policy. So if you do your Black Friday shopping there, you may be able to wander the aisles with less stress knowing that if a given item doesn’t work out, you can just bring it back.

Now that said, Costco does have a 90-day return window for electronics. But that’s pretty reasonable. And if you’re buying electronics on Black Friday to give as gifts for Christmas, you’ll still have an additional two months to get your money back if needed.

4. You can pick up a low-cost meal if all of that shopping makes you hungry

Loading your cart with Black Friday buys could cause you to work up an appetite. And if you’re spending a lot on gifts and other purchases, the last thing you need is a costly restaurant bill following a morning of shopping.

The great thing about shopping at Costco is that you can always pick up a low-cost lunch on the fly at the food court — on Black Friday or any day of the week. Better yet, bring home a food court pizza for dinner if you’re all cooked out from Thanksgiving and aren’t in the mood for turkey leftovers just yet.

There are plenty of stores that will gladly take your money on Black Friday. But you may want to make shopping at Costco a priority that day.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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