Money Management

All investments carry risk, but there are ways you can protect your portfolio against uncertainty. Find out why the bigger risk is not investing at all. 

The idea of a bulletproof portfolio is something of a unicorn in the investing world. We’d all love to invest in a risk-free way that generated guaranteed wealth. Sadly, whether it’s stocks, property, or something else, no investment is guaranteed — the value can go both up and down. The trick is to understand what risk you’re taking on and manage it as best you can.

What happens if you don’t invest at all?

Before we explore the idea of a bulletproof portfolio, it’s worth touching on what might happen if you don’t invest your money. Investing involves buying assets that you believe will increase in value and provide returns over time. That could take the form of property, stocks, bonds, or commodities like gold.

The alternative to investing is saving — putting your cash in an interest-earning bank account, such as a high-yield savings account or a certificate of deposit. It is tempting. Not only are some top savings accounts earning APYs of over 5%, investing also carries a lot of uncertainty. But savings carry a different (and arguably bigger) risk: Your money may not earn enough interest to keep up with inflation. You’d still have your money plus interest, but it wouldn’t go as far. In contrast, historically, many investments have beaten inflation over time.

Three ways to build a resilient portfolio

I’ll admit, with all the uncertainty in the world right now, I’ve been worried about buying stocks. Logically, I know it’s better to jump in than wait on the sidelines. There’s plenty of research that shows it’s better to buy than do nothing, even if you buy at the wrong time. Sadly, we are human. That knowledge doesn’t make it any easier to put money into my brokerage account when the headlines are saying the sky could fall. Here are some guardrails that have helped me continue investing.

1. Take it slowly

Vee Weir, Founder & CEO of Vee Frugal Fox says if you invest for the long term, there’s a very strong chance you’ll come out ahead. Not only that, but the power of compound interest means even relatively safe investments can produce solid returns. “The longer you hold, the higher the gain,” she points out. Even so, she says nothing is guaranteed. “Like doctors, I legally and ethically can’t say certain contraceptive measures are 100% effective, but I can say for certain contraceptives are 99.9% effective.”

Weir compares index funds (a fund that tracks an index, such as the S&P 500) to contraceptives. “Will you lose money in the stock market if your investing strategy is long-term, buy and hold index funds? There’s a 99.9% chance you won’t,” she says. According to Weir, if your money is in an index fund for just one day, you have around a 50% chance of a positive return. If you leave that money for 15 years, Weir says the probability increases to 99.9%.

Takeaway: Taking a long-term approach to your investments lessens the impact of short-term market fluctuations.

2. Build a diversified portfolio

This means having different types of assets across a mix of sectors, such as holding a mix of stocks, bonds, property, and commodities. The thinking is that if one asset class performs badly, you’re insulated because you don’t have all your eggs in one basket.

Similarly, if you invest in a mix of sectors, you won’t be so exposed if one struggles. Let’s say technology stock values plummet next week. If 80% of your money is tied up in tech, it will hit your portfolio hard. But if tech only makes up 10% or less of your investments, it won’t sink your wealth-building plans. The great news is that you don’t have to pick that mix of stocks yourself. About 70% of my portfolio is in index funds exchange-traded funds (ETFs) which spread my investments across a number of industries.

Takeaway: Diversification can help make your portfolio more bulletproof. Use index funds and ETFs to invest in a mix of sectors.

3. Choose low-risk investments, even if the returns are lower

News headlines are often filled with trendy ways to make money — most recently, it’s been cryptocurrency or AI investments. High-risk investments can generate high returns. They can also crash completely. For example, Bitcoin is worth around half what it was at its 2021 high, and many investors have lost money.

If you’re uncomfortable with risk, opt for safer investments and let time do the heavy lifting. We’ve touched on index funds a few times, for example. An index fund that tracks the S&P may not be as sexy as cryptocurrency. But over the past 30 years, the S&P has delivered an average growth rate of 10.7% per year. Compounding — earning interest on your interest — can transform even a relatively small amount of money if you give it long enough.

I am super lucky because my grandparents put money into an index fund for me when I was a toddler. I didn’t touch the account until much later in life when that cash helped me buy my own house. Let’s say you earn a conservative 8% return on an index fund. This doesn’t factor in inflation, but here’s how $1,000 might grow to almost $50,000 if you give it long enough:

Takeaway: No investment is completely safe, but you don’t have to take big risks to build wealth.

Bottom line

It may not be realistic to aim for a completely bulletproof portfolio. If you don’t like taking risks, don’t let that stop you from investing altogether. Instead, look at ways to build a diversified portfolio and avoid high-risk investments that promise higher returns.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.Emma Newbery has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

 Read More 

Women earn less than men, putting us at an immediate financial disadvantage. But read on to learn how you can cope and set yourself up for financial success. 

While 2023 has surely been the best year to be a woman (so far, that is), I have to believe that better days for us are ahead. The gender pay gap persists — according to Pew Research, we were earning an average of just $0.82 per $1 earned by a man as recently as 2022. More depressingly, that’s only a gain of $0.02 since 2002, when we earned an average of $0.80 on that same $1.

There are a few moves you can make to fight the gender pay gap, including improving your negotiation skills and supporting legislation to increase the federal minimum wage. But beyond looking at the bigger picture and working toward equality for all, you can also polish your individual personal finance habits. Work on these ones in particular, and you just might find yourself among the ranks of highly successful women.

Focus on career growth

First and foremost, if you’re hoping to improve your financial status, it’s extremely important to invest in yourself and your career. Thankfully, it’s easier than ever to do this, and for less money than you may be thinking. You can get a free month trial of LinkedIn Learning; this is likely a good place to start for shoring up skills that can help you get a job (or a promotion at your current job). If you’re in a creative field (such as graphic design), Skillshare might be worth a look — the first week will be free, and you might be able to snag a discount on a year’s subscription.

It’s also worth focusing on and improving your soft skills — think communication, time management, and the other qualities that make you easier to work with. The Department of Labor calls soft skills “the competitive edge” when it comes to getting hired, so their importance can’t be overstated. And finally, if you’re hoping to work remotely (and honestly, if you can do your job from anywhere, it’s so worth it), there’s a set of abilities to master for successful remote work, including IT troubleshooting and taking more initiative.

Save for emergencies

If you want to be a highly successful woman, you’ve got to have a way to pay for unplanned bills and emergency expenses that doesn’t involve going into debt. I lived without emergency savings for the vast majority of my adult life, and it’s a terrible feeling when you have to pay to get your car fixed or for a trip to the doctor and know you’ll be paying interest on the original charge because you had no way to cover it besides borrowing money.

What’s the solution? An emergency fund with cash that you can tap in a pinch. It’s a good idea to aim for enough money to cover three to six months’ worth of bills, but that’s not going to happen overnight — it could take you years to save that much. You can make it easier by aiming to save any amount — if it’s just $50 per month, that will still help build a cushion against future unplanned bills. And store your cash in a good high-yield savings account — these are paying upward of 4% APY right now. You might also consider automating your savings contributions, as a lot of people find it easier to save if they don’t have to think about it or take the action directly.

Invest for the future

Finally, highly successful women are focused on the future, and setting themselves up for a comfortable existence down the road. According to research from The Motley Fool about women and investing, we actually earn higher returns on our invested dollars, but despite this, we lack confidence in our abilities and have less knowledge about investing. And it’s absolutely crucial for our future wealth and opportunities that we put our money to work for us now.

You don’t have to be a Wall Street genius or spend all your time researching companies to be a successful investor. Instead, have a look at our favorite brokers for beginners, and pick an investment account that is easy to use and flush with educational resources. And if you haven’t opted in for your company’s 401(k) plan, hop to it. This is especially true if your company will match a portion of your contributions — it’s difficult to beat free money! If your company doesn’t offer this, you can open an IRA account on your own. Opt for a Roth IRA if you want to forgo tax savings now in exchange for tax savings later.

Contrary to what you may have been told, it’s not “selfish” for any woman to look out for herself and her financial interests. In fact, it’s absolutely vital. Make the above moves to become a highly successful woman.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

Costco often has promotions on smartphones but are they worth it? Check out the three top benefits to buying a phone at Costco. 

You’ve probably seen them — most Costcos have ’em — the AT&T reps. Maybe you, like me, were wandering through the electronics section when they stopped you to solicit a great smartphone offer for Costco members. It’s hard to break away — they’re so nice! — but deep down you’re wondering what tricks they could be pulling to rope you in.

You’re right to feel suspicious, as these offers — found at Costcos and Targets and Sam’s Clubs across the country — aren’t always what they seem. But if you know how to navigate the fine print, buying a smartphone at Costco could be a good deal and a smart financial decision. Here’s why.

1. Exclusive deals for Costco members

Through its partnerships with AT&T and T-Mobile, Costco often gives its members discounts for enrolling in a new plan. For instance, right now, you can get up to $350 off an eligible smartphone when you switch to AT&T and purchase the phone on a 36-month 0% APR plan. Meanwhile, T-Mobile and Costco will give a combined $400 off when you activate a Go5G plan.

But you have to look at the hidden clauses to see what the deal entails. For example, the AT&T discount says $350 off but what it means is that you’ll get a $100 Costco Shop Card and a $250 discount through AT&T. And that $250 doesn’t come upfront but rather is spread out over 36 months. In other words, you’ll get a $100 Shop Card (mailed within 60 days of your purchase) and $6.95 off your smartphone for every month during your 36-month installment plan. Your savings will eventually come out to $350, but it doesn’t all come at once.

A discount like this pretty much tethers you to AT&T for three years, that is, if you want the full $250 off. It could be a good deal for some people, but definitely not right for those who switch phones frequently.

One additional perk is that AT&T will waive the activation fee for Costco members only. Other carriers, like Verizon, will charge $35 when you connect new phones or new lines of services. So that’s an extra bit of cash for you to tuck into your savings account.

2. Savings on new phones and accessories

Costco’s prices on new smartphones are often slightly cheaper than the manufacturer’s. Take, for instance, the iPhone 15. At Costco, you can buy an iPhone 15 Pro (256 GB, Black, with AppleCare+) for $1,269.99. Meanwhile, on Apple’s website, the same phone is selling for just over $1,298.

Costco also has some of the best deals on smartphone accessories, like chargers and cases. For example, through Costco’s website, you can buy Sahara soft and hard shell cases for the new iPhone 15 for about $16. Purchased from Sahara, these would cost you $30. You can also find deals on chargers, charging stations, and wireless charging pads through Anker, another Costco partner.

3. Generous return policy

Costco’s return policy lets you return smartphones for 90 days. That’s super generous. For comparison, Verizon has a 30-day return policy, T-Mobile’s is 14 days, and AT&T also gives you 14 days.

All things considered, buying a smartphone from Costco could be a lucrative deal, so long as you read and understand the fine print. And hey, if it’s not for you, don’t be afraid to say no to those AT&T reps — even if they are super kind.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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 positions in and recommends Apple, Costco Wholesale, and Target. The Motley Fool has a disclosure policy.

 Read More 

Spending too much with your credit card can get you into trouble. Learn the ideal spending limit for a credit card so you can avoid this. 

A credit card can be helpful, but it all depends on how you use it. And specifically, how much you spend on it. One of the most common reasons people get into trouble with their credit cards is because they overspend. If you’re going to use credit cards, knowing how much you can spend safely is a must.

What’s the most you should spend on your credit card?

The most you should spend on your credit card is what you can comfortably pay back without interest charges. You won’t be charged interest if you pay off your card’s full statement balance by the due date.

Credit cards offer a grace period between when you make purchases and when your payment is due, so you don’t need to make a payment right away to avoid interest. Even so, it’s safest to only make purchases you could pay back in full immediately, if needed. Some people use credit cards to spend money they don’t have at the moment, but will have by the time their payment is due.

This isn’t a good habit to get into. Any issue, such as an unexpected bill, could leave you without the money you were planning to use to pay your credit card. If you can’t pay off your card’s balance, then you’ll start incurring interest charges on your credit card debt.

So, if you have a $2,000 balance on your credit card, you should have that much money set aside for your credit card payment in your bank account. That way, you’ll have no problem paying the bill on time.

You have more flexibility with a 0% intro APR credit card

Most credit cards have very high interest rates. The average credit card interest rate recently hit a record high of 22%. That makes carrying any balance an expensive proposition.

The exception is with 0% intro APR credit cards. This type of credit card has a 0% APR on purchases for an introductory period. Depending on the card, the intro period could last 12 months, 15 months, or longer. The card’s standard APR applies after the intro period, so it’s best to pay off what you owe by the time it ends.

If you have a 0% intro APR card, you should still only spend what you can pay back without interest charges. The difference is that you’ll have a lot longer to pay back purchases without being charged interest. Instead of needing to pay off the balance by the next due date to avoid interest, you’ll only need to pay it off by the end of the intro period.

Let’s say you’re planning to make a $3,000 purchase, and you can pay $500 per month toward your credit card. That’d be expensive to carry on a credit card with an average APR of 22%. But on a card with a 0% intro APR for 12 months, you’d have more than enough time to pay it off with no interest.

What’s the most you should spend for a high credit score?

If you want to build credit or maintain a high credit score, don’t spend more than 30% of your card’s credit limit. If your card has a $10,000 credit limit, keep the balance at or under $3,000.

The reason for this rule is your credit utilization ratio. That’s the ratio between your credit card balances and credit limits. A lower credit utilization is better for your credit score. The rule of thumb is not to go above 30% credit utilization.

Your credit utilization is updated every month. It’s not necessary to have it as low as possible at all times. If your credit utilization spikes one month because you need to make some large purchases, but you get them paid off without any interest charges, it’s not a big deal.

It is important to have low credit utilization any time you have a credit check coming up. For example, if you’re planning to apply for a mortgage soon, get your credit utilization as low as possible first. It will help your credit score, which could get you a lower rate. But if you don’t have anything like that on the horizon, there’s no need to worry if your credit utilization goes up temporarily.

Everyone’s safe spending limit on a credit card is different based on their financial situation. If you only charge what you can comfortably pay back, you won’t have any problems.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

When someone is in a car accident with a family member, it can make sense to sue in order to get compensation for injuries. Here’s why. 

A car accident can cause life-changing injuries. Often, these injuries are expensive to treat. Many car accident victims sue the person who was responsible for harming them so they can get compensation for medical bills, lost wages, pain and suffering, and other damages such as emotional distress.

But what if the person who caused the accident was a family member of the victim? In this case, does it make sense to try to get money deposited into a checking account by filing a lawsuit?

Surprisingly, the answer is often yes.

Is it possible to sue a family member after an auto accident.

In many cases, the law does allow a car accident victim to sue a family member after an auto accident. It’s almost always possible to sue more distant family members, such as suing an aunt or a cousin. And it’s generally also permitted to sue very close family members, such as a child suing a parent or a person suing their spouse (although marital privilege laws do restrict this in some states).

To sue a family member for crash damages, that person must have been responsible for causing the accident to occur. This can happen to someone who was a passenger in a family member’s vehicle. For example, a child driving with a parent could sue their parent for injuries resulting from a crash. It can also happen to someone who was struck by a family member, such as if a visiting aunt runs over a child in the driveway.

The victim must also have sustained injuries that are worth making a claim for.

Why it can make sense to sue a family member after a collision causes harm

It might seem unkind and terrible to sue a family member but, in reality, it is often the best course of action when someone is hurt in a collision caused by a relative.

See, it won’t be the individual person who has to come up with the money to cover damages. Drivers are required to buy auto insurance in most states precisely to ensure that money is available to cover auto accident damages. Since motorists have been paying premiums to an auto insurer for liability coverage for years, it doesn’t make sense not to take advantage of this protection to cover expensive losses.

If someone has been badly hurt and will experience a lifetime of medical issues, suing a loved one may be the only way they can ensure they receive fair compensation and can get the help they need.

Now, it is true that a loved one’s insurance rates would go up after an at-fault accident — but that would happen even if a claim isn’t made as a result of the crash occurring. Victims need to be sure they are protecting their access to compensation even if their loved one may have to pay a little more for insurance — especially as the added premiums are likely to be a drop in the bucket compared to the costs of dealing with serious accident injuries.

Drivers need to be sure they have the right liability coverage in place because they could be sued not just by a family member, but by anyone injured in a crash they caused. And those who have been damaged should make sure they get the right legal advice if their injuries are serious, so they can move forward with a claim against their responsible relative if necessary to get the compensation they need to cover their losses.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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.

 Read More 

One writer shares her experience with a hotel stay that was not up to par. Learn more about the credit card dispute process. 

I’ve traveled extensively, so I’ve stayed in many hotels. Since I read reviews and compare hotel amenities before booking, I usually end up at a comfortable hotel. But on a recent trip, I stayed at a hotel that wasn’t as advertised. I ended my stay early and moved to a more comfortable hotel. Find out what happened when I filed a dispute with my credit card issuer for a portion of the original hotel booking charge.

A recent hotel stay didn’t go as planned

While I’ve stayed in various hotels worldwide, I never had a hotel experience that left me wanting to check out earlier than anticipated until recently. While in Prague, I unfortunately checked into a hotel that wasn’t as advertised. My experience didn’t match the experiences of the travelers who had left positive hotel reviews.

I had booked a four-star hotel, but the quality didn’t match. Due to various factors, I barely slept during the two nights I was there. I had a long trip ahead of me and would be visiting multiple destinations, so I decided to check out after the second night — even though I had already booked and paid for a four-night stay.

I talked with the staff member working the front desk, and she was apologetic and kind. She told me the manager would contact me to discuss a partial refund. Since good sleep is essential, especially when traveling, I booked a two-night stay at a different hotel. Luckily, the new four-star hotel I booked was fantastic and as advertised. Even better, I slept well.

After a couple of days of not hearing from the hotel manager, I reached out to ask whether I could get a refund for the two unused nights. I had left a review on the site I booked the room through earlier on the same day I contacted the manager. He told me he would refund part of my stay if I removed my review. That didn’t feel appropriate to me, as I believe honest reviews help other travelers avoid bad experiences.

Here’s how I got a partial refund from my credit card issuer

After I got settled back at home, I called the customer service number on the back of my credit card. I explained the situation and said that I’d like to start the process of disputing a credit card charge. I was asked for basic information about what happened and verified the original credit card charge details.

I was told I would need to provide additional details through my online account or by mail. That same day, the paperwork was made available in my online account. A few days later, I submitted the required paperwork. I included an overview of what happened and copies of all the communication between me and the hotel manager.

Several days later, a representative from Chase contacted me. She reviewed the details of the incident and confirmed that I would receive a refund for half of the original charges since I had only stayed two of the four nights I had booked. As I sit down to write this, I’m happy to report that my request was approved, and the money was refunded to my travel credit card.

The Fair Credit Billing Act protects consumers

The Fair Credit Billing Act (FCBA) protects consumers from unfair billing practices and allows them to dispute credit card charges within 60 days of receiving their bill. Consumers can challenge charges due to issues like billing errors and unauthorized charges.

But consumers can also dispute charges for products and services that weren’t delivered at all or as promised. The card issuer will likely ask you to try to work it out with the merchant first, like I tried to do with the hotel. But if you’re unsuccessful, it may be worthwhile to dispute the charge with your card issuer, as long as you can back up your claims.

If you use credit cards, keep this in mind. You may be eligible for a partial or full refund when something goes wrong. My story also serves as an excellent reminder to use credit cards instead of debit cards, because they offer more consumer protections. If you use a debit card and something goes wrong, the money in your bank account will be directly impacted.

If you’re looking to add a new credit card with robust consumer protections to your wallet, review our list of the best credit cards.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

 Read More