Money Management

Is an all-inclusive resort your best bet for your next vacation? Read on to find out. [[{“value”:”

If you’re in the process of planning an upcoming getaway, you may have your heart set on a tropical destination where you spend your days lounging by a pool, trying great restaurants, and escaping the daily grind. When it comes to resorts like these, you have choices. You could pay for a traditional resort where your initial fee covers your room cost only. Or you could book at an all-inclusive resort where everything, from food to drinks to entertainment, is included in your initial price.

If you’ve never stayed at an all-inclusive resort before, or if you’re not sure it’s the right choice for you, here are some pros and cons to consider.

Pro No. 1: There are no surprise costs

Travel costs can be tricky to budget for because surprise expenses can come up throughout your trip. You might pay extra to take advantage of certain activities at the hotel you’re staying at. And if there’s a night when you’re in the mood for an extra cocktail, it’s going to cost you.

The nice thing about all-inclusive resorts is that there are no extra or hidden costs. When you pay the fee to book your room, that fee includes everything. Some of these resorts even ban tipping, so the price that goes on your credit card upfront is the total price you’ll pay for your trip. That could make your vacation more enjoyable and less stressful.

Pro No. 2: You have an opportunity to try new foods and activities

If you’ve never tried paddleboarding before, you may be hesitant to give it a go if an hour is going to run you $62. Similarly, you may be tempted by certain resort cocktails, but at $18 a pop, you’re taking a pretty big risk on a drink you might hate.

The nice thing about all-inclusives is that you can try anything you want without the pressure. Aren’t loving an activity? Ditch it. It’s not like you paid extra. Don’t like your drink? Get another.

Of course, in the context of food and drink, you don’t want to intentionally be wasteful. But you can try new things with less pressure.

Con No. 1: You could end up overpaying if you’re not a big eater or drinker

The cost of staying at an all-inclusive resort varies, depending on your destination, your travel dates, and the type of property you choose. But generally speaking, all-inclusive resorts are more expensive than comparable properties where you book your room and pay for extras a la carte. And if you’re not a big eater or drinker, you may find that a traditional resort is more cost-effective than an all-inclusive.

Let’s say it costs $250 a night to book a room at a standard resort on your island of choice, while the all-inclusive down the beach is $450 a night. Even if you pay $20 for breakfast, $25 for lunch, $45 for dinner, and $30 for two cocktails, that’s still $120 total, which is less than the $200 upcharge you’re looking at for the all-inclusive option.

Con No. 2: You may not be tempted to explore your surroundings, which could mean missing out on different experiences

When you’re paying a premium for an all-inclusive resort, you may be inclined to stay planted there for the duration of your trip. But that could mean skipping the chance to get off the beaten path and book an activity outside of a resort that might be amazing.

Also, when food is included in your stay, it’s hard to justify the cost of paying for a meal elsewhere. But that could mean missing out on the opportunity to sample local cuisine.

Is an all-inclusive resort right for you?

If you’re not sure whether to book an all-inclusive resort or not, do your research. Compare the cost of an all-inclusive to a traditional hotel and see what sort of gap you’re looking at. If it’s a multi-hundred-dollar difference per night, you may decide that a regular hotel makes more sense for your personal finances unless the all-inclusive really offers many more activities and amenities you know you’ll take advantage of.

Another option? Talk to a travel agent with experience in the area you’re looking to visit. They may be able to walk you through the differences between all-inclusives in the area and regular hotels so you can make a more informed decision.

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

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Older Americans have a lot of financial wisdom. Read on to find out some money habits boomers have that we can all learn from. [[{“value”:”

Baby boomers have amassed more than $76 trillion in wealth. Much of this is the simple byproduct of holding on to assets for a long period of time to let them grow. After all, most in the boomer generation have had many decades to let their wealth accumulate.

While younger generations can sometimes envy older Americans’ financial positions, a better approach would be to realize there’s something to be learned from their decisions.

Here are five successful habits of baby boomers that we all would be wise to consider.

1. They invest heavily in stocks and mutual funds

Baby boomers have the largest percentage of their wealth in stocks and mutual funds. According to Federal Reserve data, about 28% of their wealth is in this category, compared to 14% for millennials and just under 19% for Generation X.

While stock values can be volatile in the short term, they’re a great tool for building long-term wealth. The average historical rate of return for the S&P 500 is about 10% annually. So if you invested $250 per month in a brokerage account and earned an average annual rate of return of 10%, you’d have about $295,000 in 25 years.

Many experts recommend subtracting your age from 100 to determine the percentage of your portfolio that should be in stocks. For example, if you’re 40 and use the Rule of 100, you would have 60% of your portfolio in stocks. Some use a Rule of 110 (consider it if you don’t mind more risk), but the general idea is to reduce your exposure to market volatility as you get older.

2. They buy real estate

The second-largest portion of baby boomer wealth — equal to $18.65 trillion — comes from real estate ownership. Boomers have so much accumulated wealth, partially from real estate, that some experts expect a $53 trillion transfer of wealth over the next couple of decades as they leave homes and other assets to younger generations.

Last year was one of the worst years for housing affordability because of high house prices and rising mortgage rates, but many younger generations are still focused on owning real estate. The majority of assets for both Gen X and millennials, nearly 30% and 41%, respectively, is in real estate.

3. They’re more willing to cut back on non-essential spending

Another successful financial habit of baby boomers is that they’ve been far more willing to cut back on non-essential spending than other generations. According to an Empower survey, 80% of boomers said they reduced their non-essential spending because of inflation, compared to just 56% of Gen Z and 66% of millennials.

Experts often recommend the 50/30/20 rule, which says 50% of your after-tax income goes to needs, 30% to wants (non-essentials), and 20% goes to saving or paying off debt. Using a budgeting app can be a helpful way to find expenses you can cut out and keep track of where your money is going.

4. They’re more honest with their partners about finances

When you’ve merged your finances with a romantic partner, it’s important to be honest about your spending and any debts you may have. Boomers are the most honest, according to a recent survey, with just 19% saying they’ve lied or kept purchases from their partner, compared to 63% of Gen Z, 58% of millennials, and 44% of Gen X.

Research from the University of Tennessee found that finances are a constant point of disagreement, even among happy people in happy relationships. That means that withholding financial information from a partner is likely to cause more problems when they eventually find out.

5. They seek advice from professionals

Another stark difference between boomers and other generations is that they turn to professionals when seeking financial advice. More than half (52%) of boomers consulted a financial advisor last year. Meanwhile, less than one-third of Gen X, millennials, and Gen Z did the same.

Financial advisors can be a huge asset for people of all ages and incomes. They can help you set a budget, come up with a plan for your financial goals, and teach you about investing your money. Many of them are fiduciaries, which means they’re required to work in your best financial interest. You can find fee-only fiduciaries near you on the National Association of Personal Financial Advisors website.

You don’t have to exactly match what boomers are doing with their money to build wealth. But it’s worth considering what older generations have learned from decades of budgeting and investing and apply some of the same principles to benefit your finances.

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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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Capital One buying Discover, and the new Visa and Mastercard legal agreement on swipe fees, could bring changes to credit cards for small businesses. See how. [[{“value”:”

Small business owners don’t love paying credit card processing fees. If you own a restaurant or brick-and-mortar retail business, losing 2.24% or more of every transaction can feel like a painful cost of doing business. The recently announced Capital One/Discover merger, along with some other developments in the credit card industry, could bring big changes to credit card swipe fees.

But will any of the changes to swipe fees really make a big difference for small businesses? We talked with a credit card expert to find out.

Capital One/Discover merger: No big relief for small businesses

Capital One recently announced that it is buying Discover (and the Discover payment network) in a deal that could transform the credit card industry. By owning Discover’s payment network, Capital One could potentially compete with Visa and Mastercard and offer merchants and retailers (including small businesses) a better deal on swipe fees.

Eric Cohen, CEO and Founder of Merchant Advocate, a company that helps businesses save money on credit card processing rates and fees, said that big corporate merchants are most likely to benefit from the Capital One/Discover merger.

“Given the ongoing conversation and potential regulations, it’s far too early to know if there is upside for small businesses,” Eric Cohen said. “However, in the past, similar large-scale mergers have mostly worked to benefit larger corporations instead of the everyday mom-and-pop shop.”

For example, Capital One has stated that it wants to work more closely with merchants to drive more sales for them while creating good deals for consumers. No one knows yet exactly what that might look like, but it could involve better offers from merchants, premium customer experiences, and specialized customer loyalty programs. Of course, most of those capabilities require “big business” size and scale that are beyond the reach of small businesses.

And any big changes from the Capital One/Discover merger might not happen anytime soon. The deal still requires federal approval from the FTC, which is not guaranteed — the U.S. government has recently acted against a few other high-profile mergers, such as JetBlue’s attempted purchase of Spirit Airlines.

“If the deal does pass and Capital One chooses to push Discover as a third network without increasing interchange costs, merchants may see some relief in the years ahead, but it will be far from immediate,” Eric Cohen from Merchant Advocate said.

Visa and Mastercard $30 billion settlement: Small businesses won’t see big changes

Another big development in the credit card world was announced on March 26, 2024, when Visa and Mastercard agreed to reduce credit card swipe fees for merchants. This deal made big headlines, as the approximate cost savings for merchants are expected to be about $30 billion over five years.

But if you drill down into the details, this is less of a big deal for small business owners. Visa and Mastercard are only agreeing to reduce swipe fees by about four basis points (0.04%), and only for three years. So if your small business runs $100,000 worth of payments through Visa or Mastercard credit cards per year, you might save about $40.

What should small business owners do about swipe fees?

You might not be able to reduce the costs of credit cards in your role as a small business owner. But you can do more to reap the benefits of credit cards in your life as a credit card customer. Get a small business rewards credit card. Try to run more of your everyday (and monthly) business spending through a credit card that actually pays you some valuable rewards.

Some of the best business credit cards pay up to 4% or 5% cash back on everyday business spending categories. You can also earn valuable travel rewards and welcome offers with tens of thousands of bonus points. Rewards credit cards are a good way for small business owners to get a cut of the swipe fee action. You can turn credit card swipe fees from a painful cost of doing business into extra “fun money” for your personal finances.

Bottom line

Despite the big headlines about the Capital One/Discover merger and the Visa and Mastercard $30 billion swipe fee deal, small business owners are not likely to see big changes or cost savings anytime soon. Credit card processing fees are a big part of everyday payments activity, and ideally the convenience for your customers is worth the cost to your business. But small business owners still have options to get a bigger cut of those fees: Use the best rewards credit cards in your everyday spending as a company owner and in your personal life.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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Your brokerage account should mostly be in investments. But keeping a small cash balance isn’t the worst idea, either. Find out why [[{“value”:”

Your brokerage account, for the most part, is not an account you want loaded with cash. If you want access to cash for emergency expenses and near-term financial goals, then a savings account is your best bet. Your brokerage account, by contrast, should be loaded with stocks and other investments designed to generate nice returns.

But keeping a small amount of cash in your brokerage account isn’t a bad idea. In fact, it can be a good practice to uphold. Here’s why.

You don’t want to miss out on buying opportunities

As a general rule, it’s not a good idea to try to time the stock market. If you hold off on investing because you’re waiting for stock values to fall across the board, you might end up missing out on chances to grow your wealth over time.

But if there’s a specific stock you’ve been following for a long time, then in that situation, it is OK to try to buy it at a lower price. To be clear, this doesn’t mean you should chase the lowest price, period. But it’s OK to chase a lower price than what you’ve been seeing.

Let’s say you’ve been looking to add shares of a specific company to your portfolio and they’ve been steadily trading at $200 apiece. Let’s also say that the same company releases earnings and the results aren’t so favorable. The company’s share price might then fall to $180 temporarily due to an overreaction from investors.

Things like this can happen all the time. And in a few days, that stock’s value might rise back up to $200 per share. But meanwhile, you have an opportunity. Instead of paying $200 a share, you can get in at $180. To do that, though, you need to have cash available in your brokerage account ready to go. And that’s why it pays to keep a little cash in your brokerage account. That way, you can capitalize on opportunities like the one just described.

Although some brokerage accounts will allow you to trade on margin (where you’re effectively borrowing from your brokerage account to cover your buys), doing so can be risky. And it’s not always an option.

But it can also take a few days for a transfer of money to clear your brokerage account after leaving your bank account. And when you’re trying to take advantage of a dip in a company’s stock price, you may not have a few days. So it’s important to leave yourself with some cash to trade with.

You may want to pump more cash into your brokerage account ahead of a recession

Recessions and stock market declines don’t always go hand in hand, but they can. So if recession warnings start sounding in full force, it could be worth transferring some extra money into your brokerage account. That way, if stock values do fall, you’ll have an opportunity to load up on quality investments at a discount.

Before you do this, though, make sure your emergency fund is fully set. Only move funds over for investing purposes that you wouldn’t need to cover essential bills in the event of a layoff. But if you have extra money at your disposal, keeping some cash in a brokerage account ahead of a recession also isn’t a bad idea.

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This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, 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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman 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.

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