Money Management

It will be beneficial for you to begin investing today. 

If you’re afraid of entering the stock market because you think it’s too late and that you’ve missed the boat, think again. There are many reasons why it’s not too late to start investing, even if you’re new to stocks. Whether you’re a beginner investor or an experienced one, there are still opportunities out there for everyone. The best time to invest may have been in the past, but the second best time to invest is today. Here’s why.

It’s never too late to start investing

Don’t be discouraged by the idea that you should have started investing earlier. The truth is that no matter what your age is now or when you began working, it is never too late to start. Many people are hesitant to enter the stock market due to a fear of making mistakes or losing money. However, with knowledge and understanding comes confidence.

YouTube personality Graham Stephan recently tweeted, “It’s never too late. Start now,” when referring to best-selling author Ryan Serhant’s observation:

“Think about it this way: you’re 31 today.

You may want to retire at ~65.

You can live your entire life over again and still be younger than the age you want to retire.”

No matter how old you are or where you come from, anyone can learn about stocks and trading and become an investor.

The benefits of investing now

Investing now means taking advantage of compounding returns as soon as possible. Compounding returns refer to the ability of investments to produce more gains over time simply by reinvesting your profits into similar investments instead of cashing them out. By doing this, your initial investment will grow much faster than if left untouched — this phenomenon is known as compounding returns!

Additionally, regular contributions over time can add up quickly; even small amounts can make a difference in the long run when compounded over years. For example, if you are 50 and plan on retiring at age 65, even investing $100 a month can make a difference. Assuming an average rate of return of 10%, you will end up with $42,000, more than double the $18,000 originally invested.

While investing when you are younger gives you an advantage, it is never too late to get started. Those over 50 can utilize catch-up contributions for their retirement accounts. This allows them to save more, which can help make up for years they didn’t save enough. The catch-up contribution limit for employees investing in a 401(k), 403(b), most 457 plans, and TSP is increased to $7,500, up from $6,500. For 2023, those over 50 can contribute up to $30,000 for 2023. The limit on annual contributions to an IRA account increased to $6,500, up from $6,000. The IRA catch‑up contribution limit remains $1,000.

No matter how old or young you are, it is never too late to start investing in the stock market. Investing now will allow you to take advantage of compounding returns sooner rather than later. This can make all the difference when it comes down to long-term financial goals such as retirement. Many older people think investing is too risky and saving cash is the way to go. Cash doesn’t keep up with inflation and with people living longer, investing is increasingly more important. While the best time to invest may have been in the past, the next best time to invest is today!

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Don’t assume you can go it alone. 

At this point, we’re coming up on the tail end of the 2023 tax-filing season. And if you’re at the point where you’re almost done filing your 2022 tax return, you’re in great shape.

Many people wait until the filing deadline (which, this year, is April 18) to get their taxes done. But if you’re about to submit that federal income tax return, you’re probably feeling nice and confident. And you may be feeling great about the fact that you were able to tackle that return on your own, thereby avoiding an accountant’s fee.

But while you may be okay to file a federal tax return solo, you should know that different states have their own rules and nuances when it comes to taxes. So it could pay to hire a professional to assist with your state tax return.

The rules aren’t all the same

The federal tax code may be complicated in its own right, but at least it’s uniform. State tax laws, however, can vary a lot from one state to the next. And if you don’t seek help in filing your state tax return, you could wind up making a mistake that costs you money.

To illustrate how different the rules are from state to state, each state sets its own income tax rate. And some states don’t have an income tax at all.

New Hampshire, as an example, is a state that doesn’t tax wages from a job. But if you have dividend income in your brokerage account, that income is subject to taxes, as is interest income.

Because state income tax rules are so diverse, it’s generally a good idea to get help from someone who knows the laws of your state inside and out. So even if you’re convinced you don’t need help with federal income taxes, you may want to pay a (potentially smaller) fee to get help with your state tax return.

You should also know that if you live in one state but work in another, you may need to file a state tax return in both states. Again, that’s the sort of thing you may want help with.

Also, since so many people are now working remotely, it can be unclear as to which state you owe money to. But an accountant can help you navigate those questions and ensure that you’re paying taxes to the right state.

Get peace of mind

Hiring an accountant for tax help could give you the reassurance that you’re not about to make a huge tax-filing mistake. So even if you don’t think you need one for your federal tax return, you should strongly consider getting help with state taxes. This is an especially good idea if you live and work in separate states, or if you split your time between multiple states.

And if you’re a business owner, it’s definitely a wise idea to get help with your state tax return. There may be certain incentives available to you through your state that you wouldn’t know about without the help of an accountant, and some of those could be huge money-savers.

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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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This could be a lifesaver for those who struggle to keep up with their credit card payments. 

Credit card debt can be difficult to get rid of, and high interest rates aren’t the only reason why. Card issuers also make a handsome profit from late fees, which can be up to $41 per instance. They’re currently raking in about $12 billion from late fees alone, and it’s seriously hurting consumers who may sometimes only be a few hours late on their bills.

A new proposed Consumer Financial Protection Bureau (CFPB) rule aims to add new restrictions to credit card late fees, and it estimates that this could save Americans up to $9 billion per year. Here’s what you need to know about it and how you can make your voice heard if you want to see this change enacted.

The three major changes the CFPB wants to make to credit card late fees

Though Congress technically banned excessive late fees over a decade ago, credit card issuers have continued to charge them, thanks to a loophole in the law. The CFPB estimates that the average credit card late fee is about five times as much as the actual collection costs the credit card company pays to get the money it’s owed.

It aims to remedy this by making the following three changes:

Cap the maximum late fee at $8: Card issuers can currently charge up to $41, but the new rule would reduce this to $8, or about one-fifth of the current maximum in order to bring them into alignment with the actual costs the credit company incurs to collect a late payment. Card issuers could only charge more than this if they proved that it cost them more than $8 to collect what they’re owed.End automatic adjustments for inflation: Currently, the maximum late payment is adjusted annually for inflation. But if the CFPB has its way, this would end. It would take on the responsibility of monitoring market conditions and increasing the maximum credit card late fee as appropriate.Cap late fees at 25% of the minimum payment: If a credit card has a $30 minimum payment, the most the card issuer would be able to charge consumers for a late payment would be $7.50 under this new rule. And if the minimum payment was lower, the maximum late payment would be reduced as well.

Again, these are just proposals at this point. The CFPB is currently taking comments from the public to see whether people are in favor of this rule change.

How to make your voice heard

If you think the CFPB should make the changes outlined above, reach out with your comments before April 3, 2023. There are a few ways you can do this, including:

Leaving a comment online through the Federal eRulemaking PortalSending an email to 2023-NPRM-CreditCardLateFees@cfpb.gov using subject line “Docket No. CFPB-2023-0010” or “RIN 3170-AB15″Mailing your comment to 2023 NPRM Credit Card Late Fees, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street, NW, Washington, DC 20552

The CFPB will typically post all comments received on its eRulemaking Portal without change, so don’t include any personally identifying information, like your name, the names of family members, or your credit card or Social Security numbers.

If you know others who have been hurt by excessive credit card late fees, encourage them to leave a comment as well. Hopefully, with enough support, this new rule can help ease the strain millions of Americans face when trying to manage their finances and escape credit card debt.

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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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