Money Management

Want to know where to put your 401(k) money as a 30-year-old? Here are three easy asset allocation strategies. [[{“value”:”

If you’re 30 years old (or close to age 30), you’re at a unique stage of life as an investor. You’re still in the early days of your career; you have (hopefully) several decades ahead of you to work, save, invest, and watch your money grow.

One important choice you need to make in your first days as an investor is how to invest your money. This is also called “asset allocation.” Deciding on your asset allocation helps determine where your investment dollars go — into stocks, bonds, or other investment options.

There’s no one right answer for asset allocation in your 401(k), but there are a few general frameworks you can use. Let’s look at a few easy ways to invest your 401(k) money as a 30-year-old investor.

1. Use a target date retirement fund

One of the simplest ways to invest for retirement in a 401(k) is to use a target date retirement fund. This fund is a “set it and forget it” option that automatically invests your cash into a broad mix of stocks and bonds, based on your “target date.” Most 401(k) plans will offer target date retirement funds.

For example, if you’re 30 years old in 2024, let’s say that you want to retire at age 67 (your Social Security retirement age). So your “target date” should be 2061 or so. (It seems far away, but the time goes fast!) The Fidelity 2060 Freedom Fund is a good example of a target date retirement fund that could be appropriate for many 30-year-olds. This fund invests in a mix of 90% stocks (including 56% U.S. stocks and 34% international stocks), and 10% bonds.

With a target date retirement fund, you get diversification (you own lots of little pieces of lots of companies, rather than putting all your eggs in one basket). You also get an age-appropriate mix of stocks and bonds. People who are age 30 (or younger) should generally feel confident about investing most of their retirement savings in stocks — because you have many years ahead of you for that money to grow and earn dividends, even if the stock market loses value in the short run.

Target date retirement funds also give you peace of mind with a hands-off approach to investing. The 401(k) plan’s fund manager (such as Fidelity, Vanguard, Charles Schwab, the Principal Financial Group or another investment firm) does the work for you. Over time, as you get closer to retirement, your target date fund will gradually rebalance itself automatically, by selling some stocks and buying more bonds. Your investments should get “less risky” as you get closer to retirement age.

2. Invest mostly in stocks

If your 401(k) provider does not offer a target date retirement fund, that’s OK — you can replicate that investment strategy for yourself. As a young investor with 30-plus years of career growth (and compounding interest) ahead of you, at this moment of your life, you should likely feel confident to invest most of your retirement cash into stocks.

Your 401(k) money is not emergency savings, and ideally you won’t need that cash anytime soon; every dollar in your 401(k) is locked up for long-term investing. You can’t pull that money out (without possible penalties or special circumstances) until you’re 59 1/2. You’re sending your 401(k) contributions on a long journey across decades. So you can afford to be patient with that money. And you can afford to take some short-term, calculated risks by investing most of it in stocks.

There’s an old rule of thumb that the percentage of your money invested in stocks should be 100 minus your age. So if you’re 30 years old, 70% of your retirement money should be invested in stocks (and 30% bonds). If you feel more comfortable with “only” 70% of your retirement cash being invested into stocks, that’s fine. But many 30-year-olds might want an even more aggressive asset allocation, like 90% stocks/10% bonds, or even 100% stocks.

There are short-term risks from being 100% invested in stocks. The stock market could go down, like in February-March 2020, when the S&P 500 lost over 30% in one month. But if you’re young, if you want your money to grow as much as possible for the long run, boosting your percentage of stock investments could be a smart move for your future self.

3. Invest in a 60/40 portfolio

Does a 70% stock/30% bond portfolio still feel too risky? If so, that’s OK too. The point of retirement investing is not to impress strangers, it’s to help you build wealth for the future while also being able to sleep at night today. Another option for investing your 401(k) money is a tried-and-true strategy called the 60/40 portfolio — 60% stocks and 40% bonds. Having a higher percentage of bonds in your retirement savings can help protect you from the short-term risks of the stock market. Sometimes when stocks go down, bonds go up. Plus, bonds deliver steady income in the form of bond yields. (But keep in mind, bonds are not risk free. Bond prices can also go down in the short run, like they did in 2022.)

Bottom line

Whatever asset allocation you choose for your 401(k) as a 30-year-old, the most important thing is to keep saving money. Keep buying stocks with every paycheck. Keep earning your employer 401(k) match. The investments you make right now are going to be some of the most valuable dollars you ever invest — because you have decades ahead of you for your money to grow.

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

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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. The Motley Fool has positions in and recommends Charles Schwab and Target. The Motley Fool recommends the following options: short June 2024 $65 puts on Charles Schwab. The Motley Fool has a disclosure policy.

“}]] Read More 

Travel credit cards have lots of valuable benefits. Learn about one that could help you have a much better time at the airport. [[{“value”:”

When I traveled in my early 20s, I always tried to spend as little time as possible at the airport. My goal was to get in, get through security, and board my flight, keeping the waiting around to a minimum.

Then, I started learning about travel credit cards and the benefits they offer. The one that intrigued me the most was airport lounge access. Just by having the right card, I could wait for my flight in an upscale lounge instead of a loud, packed boarding area.

I immediately opened a credit card with this perk, and now I use it every time I fly. If you’d like to make your time at the airport more enjoyable, you may want to do the same.

How airport lounge access works

When a credit card has airport lounge access, that means it includes a membership to one or more airport lounge programs. A membership allows you to enter that program’s lounges. There are two types of lounge programs:

Lounges offered by a specific airline: Examples include American Airlines Admirals® Club, Delta Sky Club®, and United Club.Third-party lounges: A network of airport lounges that aren’t tied to one specific airline. Examples include Priority Pass and American Express Centurion® Lounges.

If you normally fly with the same airline, then you’ll probably want a card with a membership in its lounge program. For example, if you’re a frequent flyer on Delta, then the best option would be a Delta card with a Delta Sky Club® membership.

Most travelers, myself included, aren’t loyal to any one airline. In that case, it’s better to go with a travel card that has a membership to a third-party lounge program. The most common is Priority Pass. Many credit cards include a Priority Pass membership, which gets you into over 1,400 lounges around the world.

As far as what airport lounges are like, this varies quite a bit depending on the lounge. They normally have comfortable furniture, plenty of seating, and free food and drinks. Some lounges are nicer than others, but it’s pretty much always better than waiting around in the boarding area.

Should you get a card with lounge access?

You won’t find airport lounge access available with just any credit card. It’s a perk that’s almost exclusively found on premium travel cards with high annual fees, normally $400 or more.

That’s a lot to pay for a credit card, but these cards are usually loaded with travel perks. Airline credit cards may include free checked baggage and a yearly companion pass. More general travel cards may have spending credits on certain types of travel purchases.

Lounge access is a valuable perk in its own right. You’ll be more comfortable while you wait at the airport, and you won’t need to pay for food and drinks. Some travelers estimate that they save $40 to $50 per lounge visit. It’s especially valuable if it includes guest access and you often travel with your family. Instead of paying for an expensive meal for three or four people at an airport restaurant, you can all eat for free in a lounge.

Here are a few signs that it’s a good idea to get a card with lounge access:

You fly at least three or four times per year.Your home airport has a lounge you’d be able to access.You don’t mind paying an annual fee for a credit card.

If so, the next step is checking out credit cards that have this benefit to find the right fit for you. You can find top options in The Ascent’s guide to the best credit cards with airport lounge access.

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

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.American Express is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

“}]] Read More 

You served your country, and you deserve to own a home here. Keep reading for a few tips to find a home loan you can afford. [[{“value”:”

Buying a home has gotten even more difficult and expensive in the wake of the wild buying frenzy during the height of the COVID-19 pandemic. According to the Federal Reserve Bank of St. Louis, the median price of a home sold during Q2 2020 was $322,600 — that figure had become $417,700 by Q4 2023. To add insult to injury, mortgage rates have more than doubled from where they were then, too, going from 3.23% in late April 2020 to 7.17% right now (per Freddie Mac).

If you’re an active-duty service member, veteran, or surviving spouse, you have options for finding the right mortgage for you. Keep reading for a few moves that can help you save money.

1. Consider a VA loan

You knew I was going to suggest this first, right? The Department of Veterans Affairs guarantees home loans offered to veterans through regular mortgage lenders. Veterans can buy homes without a down payment (there will be a funding fee, however; this is waived for some vets depending on your circumstances). VA loans are offered by a lot of big-name mortgage lenders, so it’s worth checking out our list of the best VA lenders for some top picks. (And don’t forget to shop around; more on that below!)

2. Explore programs through your state

Another option for affordable mortgages and assistance of all kinds is to look into the programs offered by your state. These will vary, of course, but let’s use New York as an example. The New York State Department of Veterans’ Services maintains a webpage devoted to housing services. There are resources for renters, but also details about federal VA loans and New York State programs like Homes for Veterans. Do some digging into your state’s offerings for veterans — you might be surprised at what you could qualify for.

3. Shop around with a range of mortgage lenders

While you might assume that all mortgage lenders offer the same rates for wannabe homeowners, this is wrong. You’ll find different rates from different lenders, and what’s more, your personal credit and financial situation impacts the rate you’ll be offered, too. Since lenders weigh these factors differently, you have nothing to lose but potentially a good deal by shopping around.

It’s important to select a variety of lender types, too. Consider online-only lenders, big national banks, and even small local financial institutions, because any one of these could have the right mortgage deal for you. Plus, depending on your real estate market, getting local financing could be important.

I’ll note that I’m not a veteran, but when I started looking for mortgage lenders and applying for pre-approvals, I was told by multiple long-time real estate agents in my area that, in a scenario with competing offers, home sellers were less likely to take an offer backed by an online lender. So ultimately, I ended up applying with a local credit union (and got a pretty good deal there).

Your mileage may vary here — check with your real estate agent. And even if you end up using a big-name online lender, doing your due diligence in checking rates from a range of lenders is your best move to get an affordable mortgage.

It’s getting harder for most Americans to buy homes, thanks to a combination of higher prices and higher mortgage rates (not to mention the fact that salaries haven’t kept pace with rising costs on basically everything). Use these tips for your best chance at scoring a home loan you can afford — you earned it.

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

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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 

Want to make serious cash from your side hustle? See how to maximize your small business marketing (and profit) for every hour of side hustling. [[{“value”:”

So you’ve started a side hustle. Whether it’s a graphic design consulting business, a small online craft store, a cupcake bakery, or a home-based meal prep service, a side hustle can be a great way to earn extra cash. But if you want to get serious about your side hustle and make the most money possible, you need to run it like a “real” business — even if you only work at it a few hours a week.

Here are a few easy steps you can take to make your side hustle more serious — and ideally make serious money!

1. Raise your prices

Many side hustlers don’t charge enough. You might not realize just how much people are willing to pay for the products or services you offer. Don’t sell yourself short! This is not a hobby, this is a business.

The best side hustles should be profitable for every hour you put in. Don’t give away your goods for free, don’t sell your services for less than they’re worth. Charge enough to make this a lucrative venture for you. Your side hustle should be putting piles of extra cash in your bank account, not just giving your friends free cupcakes.

2. Create a real website

Unless your side hustle is totally contained within an online platform, like an e-commerce platform for craft stores, you should get a dedicated website with your own URL. The best small business website builders can help get you up and running fast, with elegant-looking designs and minimal fees.

3. Sign up for Google Business

Getting a Google Business profile makes it easier for people to find your business on Google. It’s free, and it helps you get found on Google Maps and in Google searches. This is especially important for small, local, brick-and-mortar businesses like food businesses or craft shops.

4. Get business cards

A little while ago, a young man helped deliver a new refrigerator to my home, and he mentioned that he had a side hustle as a handyman. He was a good guy and I would’ve been happy to hire him. But he gave me his contact info on a scrap of paper, which I then unfortunately lost!

Business cards make you look much more professional and help your customers remember you. And they’re easy to create and order online; for example, Vistaprint offers business card printing for as little as $17.99 for 100 cards.

The internet is important for small business marketing, but real-life word of mouth is often even more powerful, and physical business cards are not dead. You’d be surprised how often you meet people in real life who might love to hear more about your side hustle; give them your card.

5. Form an LLC or other legal business entity

There’s no one right answer to the question of when you should form an LLC for a side hustle. But if you’re starting to make serious money from your side hustle, forming a limited liability company (LLC) or other legal business entity could be a good move.

Setting up an LLC for your side hustle can help you in a few big ways:

It keeps your business income (and identity) separate from your personal finances.It lets you open a business bank account.It can offer some extra tax advantages.

Think carefully about whether your side hustle is making enough money to be worth the costs and complexity of setting up an LLC. For example, some states charge business registration fees of a few hundred dollars to form an LLC; so if your side hustle is only making $2,000 per year, that’s not worth it.

But if your side hustle is making $12,000 a year and you are considering quitting your day job to turn your side hustle into a full-time small business? You might want to make that business “official.”

Bottom line

The early days of starting a side hustle can be fun and empowering, even if you’re not making much money. But if you want to make serious cash, you’ve got to get serious about your business. Just by investing a few dollars in business cards and a small business website, you can make a stronger first impression on new customers.

Raising your prices can make your business more profitable (and weed out some customers who are low-ballers, tire-kickers, and slow-payers). And if your side hustle is thriving and you want to make it a “real” business, check with your state’s Secretary of State to find out what it takes to register a legal business entity, like forming an LLC.

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

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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 

I destroyed my credit during college, and it took me a while to get the credit repair game right. Read on for a few hard-learned lessons. [[{“value”:”

These days, I’m a Certified Financial Planner™ and make a living educating others about things like investing, retirement planning, and managing their credit. But I wasn’t always a knowledgeable and financially savvy individual.

Quite the opposite, actually. I’ve openly discussed this many times, but I completely destroyed my credit in college due to some financial stupidity on my part. To be sure, this was before the CARD Act and creditors were allowed to use predatory tactics on college students that aren’t allowed today, but ultimately, I’m the one who made the mistakes and had to pay the price.

Not only did I destroy my credit (I graduated with a credit score in the low 500s), but I also had absolutely no idea how to go about fixing it. Navigating the process in the several years that followed was a big reason I ended up wanting to become a financial planner, but there was a lot I learned along the way. Thankfully, here I am nearly 20 years later and with a credit score that has been in the “excellent” range for a long time. Here are three lessons I learned from my own failed attempts at credit repair.

Lesson No. 1: There’s no such thing as “fast credit repair”

If you see advertisements promising to fix your credit quickly, ignore them. If your credit is truly damaged, there is no quick path to fixing it.

Many “debt repair” companies use a strategy that involves disputing all of the negative items on your credit report with the credit bureaus. Legally, your creditors have 30 days to verify the debt, or it must be removed from your record. Invariably, creditors and collection agencies don’t always respond quickly, so in many cases, the information will be removed, and your credit score can go up — for a little while.

However, one key point to know is that creditors want their money. So, the information will usually be verified and reported eventually, and will then reappear on your credit report.

In a nutshell, there are valid ways to do damage control on your credit report. This isn’t one of them. (I’ll talk about a more effective approach in a bit.)

To be perfectly clear, I’m not talking about nonprofit credit counseling services, which do add a lot of value for consumers. These are agencies that can negotiate with creditors on your behalf for lower interest rates and payments and can help you get your debts under control, while helping to mitigate the impact on your credit score.

Lesson No. 2: Getting rid of bad credit is only half of the battle

If you want to take your credit score from bad to good, it isn’t enough to simply pay off collection accounts and address the negative information in your report. You need some positive information in your report as well.

The problem is that without a decent credit score, it can seem like a big challenge to open a new credit account.

One way I ended up boosting my credit score when I was in repair mode was by getting a secured credit card. These work just like standard credit cards but require an initial deposit equal to your credit limit, so they are easier to get. Some even offer cash back rewards. Alternatively, you can convince a responsible friend or relative to add you as an authorized user on one of their credit accounts, which can also help you establish a positive payment history.

Lesson No. 3: Calling your creditors can make a world of difference

One lesson that is important to learn early in the credit repair process is that ignoring the problem doesn’t make it go away. And it is in your creditors’ best interest to work with you to find an agreeable solution.

For example, let’s say that you have a collection account on your credit report, and the agency offers to settle the balance for 40% less than you owe. Maybe you can offer the full amount in exchange for the account being deleted from your credit report entirely. Whatever the agreement, get it in writing, but it’s not uncommon for creditors and collectors to agree to things like that.

You might also be able to get your creditors to stop reporting missed payments on your credit cards once your account is caught up. You’ll never know unless you ask, and the worst they’ll say is no.

The bottom line

This is by no means intended to be an exhaustive guide to credit repair. There’s a lot to the process. But these are three factors that are either not well-known, or that many people get wrong. Doing these three things the right way can save you time on credit repair and can help your credit score rise much faster than it otherwise would.

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

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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