What to Do When the Stock Market Crashes

Stock market crashes have happened several times throughout history, and crashes in the future are all but guaranteed. These sharp declines in share prices are a scary concept for most investors.

The good news is that although market downturns can be painful, thoughtful planning and execution of investments — even during these times — can yield positive results.

What Is a Stock Market Crash?

Market crashes and market corrections are often viewed as the same thing, but in reality, they’re very different, and that difference is important to understand when planning your moves. Market corrections are periods of downward movement of 10% or greater that happen over a series of days, weeks, months, or even longer.

Market crashes, on the other hand, are rapid, widespread declines in stock prices, marked by high volatility. While there is no official percentage decline that defines a crash, the declines are painful and dramatic — often 30% or more.

Market crashes generally take place when signs of a bear market are on the horizon, there’s a general feeling of overvaluation in equities, and economic conditions are questionable or in all-out financial crises. At these points, panic selling hits the market, and major indexes like the S&P 500 and the Dow Jones Industrial Average take dives.

Crashes were seen during the Great Depression and the bursting of the real estate bubble, but that’s in the general sense. Market crashes can also come out of nowhere, as was the case on Black Monday, October 19, 1987, when the U.S. market took the biggest single-day hit in history, and it happened out of nowhere.


What to Do if the Stock Market Crashes

While there’s no way to accurately time when the next stock market crash will be, there are some troubling warning signs for 2021 or 2022.

What should you do the next time Wall Street seems to go into an all-out panic? Follow the eight steps below:

1. Keep Your Cool

The first thing to remember when the floor falls out of the stock market is that it’s important to keep your cool. Emotion is the enemy of the investor, and emotional decisions can lead to significant losses far beyond what you should have to accept.

History tells us that market crashes are, for the most part, short-term movements that happen over the course of days, weeks, or months — or in severe crashes, maybe a year. Once the market reaches what investors perceive to be the bottom, stock prices begin to rebound, often leading to a long, drawn-out recovery filled with opportunity.

Some of the best examples of this are:

  • COVID-19 Crash. The coronavirus pandemic led to sharp declines from February through March of 2020, but by the end of March, prices were already beginning to rebound. Investors who stayed the course enjoyed a swift, V-shaped recovery, and the S&P 500 began recording all-time highs again by August 2020.
  • The Great Recession. The Great Recession was one of the worst market crashes in history. However, even during this drawn-out stock market crash, prices only declined for about six months, from August 2008 to March 2009. The bottom in 2009 was followed by the longest bull market in history, which spanned more than a decade.
  • Black Monday. The Black Monday stock market crash led to the worst single-day losses in U.S. stock market history, but stock prices reached the bottom in less than a month.

The fact of the matter is that the market is known for upward and downward fluctuations, and some are better or worse than others. Seasoned long-term investors have learned to ignore these fluctuations because longer periods of bull market activity more than make up for the declines in the vast majority of cases.

That means a market crash isn’t a time to panic — it’s a time to think strategically.

2. Don’t Run From Opportunity

It may seem counterintuitive, but a market crash is one of the best times to find long-term opportunities in the market. Stock market declines will happen, but as the great value investor Warren Buffett would point out to you, it’s best to buy when the market is fearful and sell when the market is greedy. That’s the basis of Buffett’s favorite investment strategy, value investing.

There are tons of investment strategies to use during bear markets. Rather than turning and running from the market, pay close attention to what’s going on within it. When opportunity comes knocking, be ready to answer the door.

3. Assess Your Asset Allocation Strategy

One of the reasons long-term investors don’t fret about a market crash is because when they put their portfolios together, they do so following an asset allocation strategy based on their risk tolerance.

Asset allocation strategies outline how much of your investment portfolio should be invested in asset classes like stocks, mutual funds, index funds, and exchange-traded funds (ETFs) and how much of your portfolio value should be nested in safer assets like bonds and other fixed-income securities.

When the market is crashing, it’s the perfect time to assess your allocation strategy and determine whether it falls in line with your risk tolerance. If your portfolio isn’t quite as protected as you thought it was, it’s time to mix it up and bring more fixed-income investments into the picture. On the other hand, if your portfolio is too conservative, consider looking for opportunities to add undervalued stocks to your portfolio.

If you haven’t paid attention to asset allocation at all, it’s time to start. A great way to adjust your allocation for the first time is to use your age as a guide.

For example, if you’re 25 years old, consider investing 25% of your portfolio in low-risk fixed income securities and the remaining 75% in stocks and similar vehicles. As you age, more of your portfolio should be allocated to safer investments because you have more time to wait out and recover from declines should they happen when you’re younger.

4. Assess Your Diversification Strategy

You likely grew up hearing the old adage, “don’t put all your eggs in one basket.” This adage is an important one to remember in various aspects of life, including investing. In fact, diversification is key in any long-term investment portfolio.

To diversify means to spread your investing dollars over a variety of investment opportunities. That way if one or more investments falter, gains among other investments in your portfolio limit the impact of the blow.

When the stock market crashes, it’s a great time to assess whether your diversification strategy is working in your favor or against you. When looking at your portfolio, ask yourself the following questions:

Am I Investing Too Much Money Into a Single Asset?

Properly diversified portfolios have 20 or more separate investments, with no more than 5% in any single asset and no more than 5% total in the entire group of high-risk assets like penny stocks and Bitcoin.

If more than 5% of your asset value is invested in any single stock, it’s best to divest your holdings until the 5% cap is reached. You can use the money you gain from the divestment to invest in other opportunities.

Am I Investing Across Sectors?

Investors tend to invest in sectors they’re comfortable with. This is especially true for beginner investors.

However, if all of your investments are in the tech sector, and that sector crashes, you’ll be left with significant losses. A well diversified portfolio includes investments across various sectors, especially those that are not highly correlated with one another.

Am I Mixing In Safe Assets?

Growth stocks tend to be the biggest gainers in bull markets and the biggest losers in market crashes. On the other hand, income investments generate slow, steady growth and tend to hold their ground in bear markets.

Assess your portfolio to see whether your money is diversified between different styles of assets to protect you during rough times.

5. Look for Undervalued Opportunities

During a stock market crash, prices fall dramatically — that’s a given. But, as mentioned above, value investors like Warren Buffett will tell you that it’s best to buy when the market is fearful and sell when the market is greedy, and for good reason.

When buying during or shortly after a crash, you’ll enjoy lower prices than you would when the bulls are running on Wall Street. Considering that investing, at its core, is about buying low and selling high, a crash is the best time to buy, but it’s important not to go crazy and start buying everything you see.

Instead, make a calculated effort to find the stocks that are enjoying the largest undervaluations, as they will become the stocks with the biggest potential for gains when the crash is over.

Finding undervalued stocks is as simple as paying close attention to value metrics like the price-to-earnings (P/E) ratio or the price-to-book-value ratio.

Pro tip: Before you add any stocks to your portfolio, make sure you’re choosing the best possible companies. Stock screeners like Stock Rover can help you narrow down the choices to companies that meet your individual requirements. Learn more about our favorite stock screeners.

6. Practice Dollar-Cost Averaging

Dollar-cost averaging is the process of spreading large investments out equally over a period of time. For example, if you wanted to buy $5,000 worth of ABC stock, you could decide to make five investments of $1,000 in ABC every day, week, or month.

Spacing out your investments following a crash protects you from sharp declines should the crash not yet be over.

Let’s say you decided to make five $1,000 weekly investments in ABC, which traded at $20 per share on week one, $15 per share on week two, $17.50 per share on week three, $20 per share on week four, and $15 per share on week five.

In this case, your $1,000 each week would purchase 50 shares, 66 shares, 57 shares, 50 shares, and 66 shares on weeks one through five, respectively. At the end of the five week run, you would end up with 289 shares of ABC stock.

If you had invested all $5,000 in ABC shares on the first week, you would have purchased 250 shares. By dollar-cost-averaging, you ended up with 39 additional shares for your money.

Looking at this example from a gain/loss perspective, either investment would have declined because ABC stock dropped from $20 per share at the beginning to $15 per share at the end. But the $5,000 one-time investment would be worth $3,750 at the end of the five-week period, while the separate investments would be worth $4,335, giving you less ground to make up when the market starts to rebound.

7. Rebalance When the Storm Passes

Volatility is commonplace during crashes. Wide fluctuations in value will ultimately throw your portfolio’s balance out of whack as some asset prices change more than others. Once prices start to rebound, it’s time to rebalance your portfolio and make sure it still aligns with your investment strategy.

Rebalancing a portfolio is a relatively simple process. Start by making a note of what percentage of your investment dollars are invested in stocks and similar assets and what percentage of your portfolio is invested in fixed-income investments. Doing so will let you know if your allocation is still in line.

Next, look at each individual investment and determine what percentage of your overall portfolio value is invested in each one. If those percentages are higher than you’d like them to be, divest the assets until your allocation has reached a comfortable level. Use the money you’ve divested from these investments to buy other assets that are underallocated according to your strategy.

8. Consider Hiring a Financial Advisor

Most people have a drive to do what they can for themselves, avoiding costs associated with hiring professionals. However, showing up to the stock market during a market crash without knowledge of the inner workings of the system or without a financial expert is like showing up to court without an attorney.

There’s no harm in seeking professional help when you’re not sure about something, especially when that something is your hard-earned money. If you’re still nervous about investing during a crash after reading this guide, it’s wise to seek the assistance of an expert. SmartAsset has a service that helps you locate fiduciary advisors in your area or you could use a service like Vanguard Personal Adviser Services.


Final Word

Stock market crashes will happen from time to time; it’s the nature of the beast. However, by keeping your cool, adjusting your allocation and diversification strategies, and making wise decisions, these market declines can prove to be major opportunities.

As is always the case, whether the bulls or bears are running, it’s important to do your research and get a thorough understanding of what you’re investing in prior to making any investment decisions.

Source: moneycrashers.com

6 of the Worst Things to Buy at Aldi

ALDI food market branch in St. Louis.
ZirePhotos / Shutterstock.com

Aldi is quietly becoming one of the most respected grocery chains in America.

In its latest ranking of grocery stores, Consumer Reports awarded Aldi 84 of 100 possible points for overall satisfaction. That puts it just behind some of the nation’s most beloved grocers. Trader Joe’s, for comparison, earned an 87 and Costco received an 86.

Every retailer has strengths and weaknesses. Don’t buy a laptop at Walmart if price matters, for example, and Trader Joe’s is not the best for low-priced meat and seafood.

The “no frills” Aldi — which currently serves the Eastern seaboard, Midwest, Arizona and California — earns a perfect CR score of 5 out of 5 for competitive prices. CR also points to the chain’s store cleanliness, for which Aldi earned a 4 out of 5.

Aldi falls down, however, in the following areas, based on Consumer Reports’ findings or our own.

1. Store-prepared fresh foods

Woman shopping for groceries at Aldi
defotoberg / Shutterstock.com

Aldi earns a rock-bottom low grade from Consumer Reports — only 1 of 5 possible points — for its store-prepared fresh foods.

That can include, for instance, freshly made salads, deli sandwiches and whole roast chickens prepared in stores. The chain says it has increased its fresh food offerings since 2018, but Consumer Reports, in its 2019 assessment, wasn’t impressed.

For better bets, check out “My 7 Favorite Things to Buy at Aldi.”

2. Avocado oil

Avocado oil
Lecic / Shutterstock.com

The reputation of the avocado as a healthy food might make you crave avocado oil, a relatively new grocery product. It’s full of minerals, vitamins and healthy fats.

But in a recent review of seven brands by ConsumerLab.com, Aldi’s Simply Nature 100% Pure Avocado Oil was the only one that didn’t earn ConsumerLab.com’s approval. The company, which independently tests the quality of health and nutrition products, said of Aldi’s brand:

“[I]ts fatty acid profile did not fully match that of avocado oil, suggesting adulteration with another oil.”

3. Sandwich bags

bagged lunch
Hannamariah / Shutterstock.com

We’ve done the math on Aldi’s sandwich bags so you don’t have to.

“Every time I have done the per-unit math, Walmart’s Great Value sandwich bags have been cheaper than Aldi’s Boulder sandwich bags,” says Money Talks News managing editor Karla Bowsher.

Walmart’s bags are cheaper even than the ones Costco sells, she reported in “7 Things I Never Buy at Costco.”

4. Name brands

Kellogg's name brand breakfast cereals
Steve Cukrov / Shutterstock.com

Store brands typically offer more for your money, and more than 90% of Aldi’s products are house (or “private-label”) brands.

“One reason [Aldi’s] prices are so low is that a majority of the groceries it carries are private-label,” affirms Business Insider.

However, shop beyond these private-label products and you might end up digging more deeply into your purse or wallet.

At Aldi, “not only are these [name brands] usually over-priced, you can’t use coupons on them to save more money,” says blogger MoneySavingMom.

5. Disposable shopping bags

Aldi shopping bag
monticello / Shutterstock.com

Unlike many stores, Aldi doesn’t give shoppers free bags at checkout. You bring your own or buy disposable or reusable shopping bags.

Aldi’s FAQ explains that “we not only save our customers money — by avoiding adding the cost of the bag to our prices — but also precious resources.”

Don’t get stuck paying for a disposable grocery bag, though. Plan ahead and bring your own for free. Or, if you don’t own reusable shopping bags, buy some reusable bags at Aldi rather than paying for disposable bags that aren’t made to last.

6. Locally produced products

Aldi produce department
Ilze_Lucero / Shutterstock.com

Shopping for locally grown and crafted goods? Try local food cooperatives, farm stands and farmers markets. A sore point for Aldi in Consumer Reports’ ranking was its score — just 1 of 5 possible points — for its selection of locally produced products.

Aldi shines, however — earning 4 of 5 possible points — for its prices on organic products.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Which Bills to Pay Off First (or Cancel) When Money Runs Tight

Whether it’s from job loss due to a recession, a drop in income, or an unexpected major expense, there may come a time when you struggle to pay your bills. What can you do when your income and expenses don’t match up?

It’s essential you prioritize your bill payments and what you owe, paying the most important bills first.

Bills to Prioritize When You’re Low on Money

The most important bills are those that cover the necessities: shelter, food, water, and heat, for example.

The next most important are bills that cover things that make it possible for you to get where you need to go, such as your vehicle expenses.

Last on the list are bills that can ding your credit history, but not much else, if you fall behind on them.

Although you can make some adjustments to the order you pay bills based on your circumstances, it’s usually best to focus on paying your housing bills first, then paying what you can with the money you have remaining.

1. Mortgage or Rent

If you fall behind on mortgage payments, you risk having the lender foreclose on your home. If you fall behind on rent, your landlord can evict you.

Even though the foreclosure or eviction process can take months, it’s not something you want to risk happening. Keeping up with your housing payments is a must if you want to stay in your home.

When money is really tight and you’re not sure you can pull together enough to make a payment one month, the best thing to do is talk to your landlord or lender.

Many mortgage lenders have programs in place to help homeowners who are facing financial hardship. Your lender can review your options, such as forbearance or loan modification, with you.

During forbearance, you stop making payments on your loan, but interest continues to accrue. If a lender agrees to modify your loan, they adjust your interest rate or otherwise make changes to lower your monthly payment.

The United States Department of Housing and Urban Development (HUD) also has programs available to homeowners struggling with their mortgage payments. You can contact HUD to connect with an approved counseling agency. The counselor can work with you to create a plan to help you avoid foreclosure.

If you’re a renter, talk to your landlord as soon as you know you’ll have difficulty paying rent. Explain the situation to them in detail, including whether you think you’ll be late with payment, won’t be able to pay all your monthly rent, or won’t be able to pay at all.

Many landlords are willing to work with you to come up with a solution. You can help the situation by suggesting solutions.

For example, if you’re going to pay late, tell the landlord when you plan to make the payment. If you can’t pay the full amount this month, tell the landlord how you’ll make up the difference. For example, you can add an extra $100 or so to subsequent payments until you pay off the balance.

If you’re renting and your landlord can’t or won’t be flexible about payments, you might have more wiggle room than a homeowner.

Depending on how much time you have left on the lease, you can simply wait it out, then look for a less expensive place to live. Another option is to try to find someone to take over your lease so you can move somewhere that costs less.

2. Utilities

After your mortgage or rent payment, the next most important bills are your utility bills: gas, water and sewage, and electricity. Although some people count TV and the Internet as utilities, those services aren’t essential for everyone.

Fortunately, many programs exist to help people who need emergency financial assistance paying bills. The first place to look is your local utility provider. Many utility companies have programs to help people pay their bills.

Another option is the Low Income Home Energy Assistance Program (LIHEAP), a federally funded program that provides financial assistance to help people pay energy bills. LIHEAP has specific income requirements and is grant-funded, meaning only a set amount of money is available each year.

If you think you qualify for LIHEAP, the sooner you apply for it, the better your chances of receiving aid.

3. Insurance Premiums

Having insurance is always a good idea, as it provides financial protection against the worst things life can throw your way, such as illness, fire, or accidents. Paying your insurance premiums even when money is tight is a smart move. Without insurance, medical bills can easily add up.

If you’re struggling to afford your premiums, you do have some options, particularly when it comes to health insurance.

If you purchased a plan from the Healthcare.gov marketplace, you qualify for a special enrollment period if you’ve recently lost your job and associated coverage, if you’ve had a change in income, if you’ve gotten divorced, and for a few other reasons.

During the special enrollment period, you can apply for Medicaid or CHIP if your income is below the threshold or a credit on your insurance premiums based on your income. Doing so can lower the cost of your health insurance considerably.

4. Food & Household Necessities

Food, soap, and paper products are up there with shelter, heat, and hot water on the list of essentials.

Luckily, you have more wiggle room when it comes to adapting your food and household supply costs compared to your mortgage or rent payments and utility bills.

When money’s tight, there are many ways you can trim your food and supplies bill:

  • Limit Shopping Trips. Plan your meals for the week, make a list of the ingredients you need, and go to the store once. The more you go to the store, the more likely you are to buy things you don’t need.
  • Buy Store-Brand Items. Store-brand products usually taste the same as or similar to their brand-name counterparts, but they cost a lot less. If you typically purchase branded foods and supplies, try switching to the store brand. It’s likely the only place you’ll notice a difference is in your wallet.
  • Limit Packaged Products. Packaged foods, such as grated cheese, bagged salads, and prechopped vegetables are convenient, but that convenience comes at a cost. You can save a lot if you buy whole, unprocessed foods and prepare them at home.
  • Skip Bottled Water. If you live in the U.S., it’s highly likely your tap water is safe to drink. According to the CDC, the U.S.’s water supply is among the safest in the world. Bottled water is expensive and terrible for the environment and is often little more than repackaged municipal water.
  • Buy In-Season Produce. Pay attention to seasons when shopping for fresh produce. Fruits like strawberries and blueberries are usually in season and inexpensive during the summer but cost more in the winter. You can cut your grocery costs if you buy what’s in season.
  • Grow Your Own. Another way to cut your food bill is to grow your own fruits and vegetables. Herbs and green vegetables are usually the most cost-effective edible plants to grow, as you can get an entire plant for the price of a handful of herbs or greens at the grocery store. You don’t need a ton of outdoor space to start a garden. You can grow plants in containers on a small balcony or patio.
  • Use Your Freezer. Frozen vegetables and fruit often cost less than fresh, so it pays to purchase those when money is tight. You can also prep double batches of meals to freeze for later. That way, if you run out of money before the end of the month, you have a supply of ready-to-eat meals waiting for you.

Note too that depending on your income, you can qualify for financial assistance with groceries. The Supplemental Nutrition Assistance Program, aka food stamps, helps to cover the cost of groceries for people with income below certain thresholds.

Pro tip: Make sure you’re saving as much money as possible on your grocery trip. Apps like Fetch Rewards and Ibotta allow you to save money on purchases by simply scanning and uploading your receipts.

5. Car Loan & Other Expenses

Your car gets you to and from work and other important places, such as your kids’ school, the grocery store, and the doctor. If you have a monthly car payment, it’s crucial to find a way to pay it.

Just as you can call your mortgage company to work out a deal, you can call the lender behind your car loan to see if you can come to an agreement. Like mortgage companies, these lenders can also offer you loan modifications, refinancing, or forbearance.

Loan modification or refinance can lower the amount of your monthly payments, making it easier for you to afford the car. Forbearance means you don’t make payments for a set period.

Another option is to sell your current vehicle, use the proceeds to pay off the loan, then purchase a less expensive model. If you decide to sell, look for a replacement car that has a low cost of ownership to keep your expenses low. Some vehicles are more reliable than others, meaning you don’t have to worry about expensive repair or maintenance bills.

6. Unsecured Debts

Although you should make every effort to repay your debts, when money is tight, unsecured debt, such as credit card debt and personal loans, should move to the back burner. While these debts typically have the highest interest rates, they also have the lowest impact on your daily life.

You don’t go hungry if you miss a credit card payment, nor can your credit card company take your home or car if you pay late.

That said, it’s still best to pay what you can toward unsecured debts, such as the minimum due on a credit card. If even that is too much for you right now, contact the card company or lender. Sometimes, credit card companies are willing to work with you to create a debt repayment plan or let you temporarily pause payments.

7. Student Loans

While you should make every effort to pay your student loans when money’s tight, the loans often have the most flexibility when it comes to repayment, particularly federal loans.

If you have federal student loans and you’re struggling to keep up with payments, you have multiple options. You can request a deferment or forbearance from your loan servicer, or you can switch to an income-driven repayment plan, which adjusts the amount you pay each month based on your income.

The situation with private student loans is a bit different, as they don’t have the same protections as the federal student loan program.

If you’re having trouble affording private student loan payments, your best option is to contact the lender to see if it offers forbearance, repayment plans, or loan modification.


What to Cancel When Money Is Tight

While some monthly bills are essential, others are considerably less so. Budgeting often involves deciding what you need to spend money on and what you can live without.

When it’s a struggle to make ends meet, here’s what you can consider cutting:

Subscription Services

Netflix, print or digital newspapers, and meal kits are all things that can go. In many cases, you can find free alternatives to the subscriptions you were paying for. For example, some local libraries give you access to streaming movies and local or national newspapers for free.

Make sure you don’t miss any subscriptions that you might have forgotten about. Services like Truebill will find subscriptions and either cancel them or negotiate lower rates for you.

Cable and Internet Service

You may not want to disconnect your Internet completely, but see if you can switch to a slower, less expensive plan.

If you have data on your phone, some providers, like Xfinity Mobile, let you use your phone as a hotspot to get online. In this case, you wouldn’t need a separate home Internet plan.

Phone Service

While you do need your phone to stay connected, you most likely don’t need both a landline and a cellphone. You probably don’t need the most expensive cellphone plan, either.

Shop around with companies like Mint Mobile or Ting to see if you can get a better deal.

Gym Memberships and Wellness Services

Maintaining your well-being is important, especially when money is tight. But if you’re worried about having enough money to pay your most important bills, you shouldn’t have to worry about paying for a monthly gym membership or studio pass.

There are plenty of ways to work out for free from the comfort of your home. For example, you can find workouts available for free on YouTube.


Final Word

When money is tight, it’s vital you focus on paying for the things that can help you sustain your life and well-being, such as food and shelter, when times are tight.

While a missed payment can affect your credit history, in desperate situations, your health and safety are more important than your credit score.

Along with prioritizing your monthly bills, talk to your lenders and service providers. Many companies have programs in place to keep you from sinking deeper into debt and to help you avoid repossession of your home or vehicle. Keep the lines of communication open, and remember you’ll get through it.

Source: moneycrashers.com

How to Maintain a Good Credit Score in College

College life brings a host of new and exciting experiences in the various aspects of your life. Financial independence and responsibility also come to play. While your achievements are important in putting you in your right career path, a good credit score is paramount in bettering the deals you will get when renting or buying a home, purchasing a car, getting a cellphone plan, applying for a student loan or in some instances, getting employment.

This calls on your effort to not only build but also maintain a good credit. It may sound complicated and intimidating especially when you don’t know how to go about it. Below, is all you need to know on how to maintain a good credit score in college.

Good Credit in CollegeGood Credit in College

Taking Advantage of your Parent’s Good Credit

This is commonly referred to as ‘piggybacking’. It allows people with bad or no credit to enjoy a spillover of other people’s good credit. It is a great way of establishing and maintaining your credit especially if you need a little help in managing your budget. For you to qualify for this, you have to become an authorized user of your parents’ accounts.

This comes in handy especially if you can’t get your own credit card; according to Oct 1st 2013 Credit Act report, students and other persons below 21 years of age cannot get their own credit cards without proof of income or at least a co-signer. Apart from the credit boost you get from your parent’s account, your credit card use is forwarded to credit bureaus in your name.

Get the Most Suitable Credit Card

Your ability to qualify for a credit card opens you to the opportunity to choose from a variety of cards. You should research and shop around to find out what these cards have to offer before making your choice. Some of the benefits to look out for include low interest rate, no annual fees, convenient credit limits and other competitive incentives.

Better still, you can opt for student credit cards. These come with incentives such as cashback rewards, limited credit history requirement, no annual fees and 0% introductory APR among other benefits. Your own credit card comes with sole responsibility. This means that it’s up to you to stay on top of your billing statements so as to improve and maintain a good credit

Always Pay your Credit Balance

Your payment history accounts for 35% of your credit. Good credit of course depends on timely and full payment of your balance. Inability to pay or late payment may attract additional interest, accrue more debt and negatively affect your credit.

This can take a long time to repair. Besides this, it is also a sign that you are living beyond your means. Ideally, your credit balance should be about 30% of your credit limit or below.

Tip: The higher your credit balance in relation to your limit is, the worse your credit becomes.

Pay your Bills on Time

Late or failed payment of rent, utility bills, parking tickets, library or school fees and other payments can harm your credit; especially is if they are sent to collection agencies and reported to credit bureaus. Ways of beating this include setting up payment reminders and electronic billing. You can also organize for auto payments with your bank to ensure that timely payments are done.

If you live in an apartment, you might get credit for full and timely payments. You can take advantage of eRentPayment which transfers your payment reports to the three major credit bureaus; Experian, Equifax and TransUnion. This consequently improves your credit. However, your landlord needs to be registered and the lease needs to be in your name.

Limit Applications and Inquiries for New accounts

Numerous credit inquiries negatively impact your credit score. In the event that you need to make new credit applications that warrant hard inquiries, concentrate them into period of 14 days in which they will factor as one inquiry.

Once you decide to get a credit account, get all the facts right to avoid the urge to close and open others every now and then. Short credit histories with several new accounts are seen as riskier compared to a few accounts with long credit histories. When you close a credit card, you not only lower your available credit but also shorten your credit history both of which can reduce your score.

In a Nut Shell

Maintaining a good credit score in college is important if you are going to get any good deals in personal credit in the future. This requires vigilance on your part to ensure that you do not do anything that can have negative impact on it. When all is said and done, it all comes down to personal financial responsibility.

Source: creditabsolute.com

Retail Arbitrage Guide – Definition & How to Make Money Buying & Selling

The concept of arbitrage has been around since humans invented the concept of money. It’s best known by the adage “buy low, sell high.” Arbitrage involves buying a good or service for a certain price and then reselling it at a higher price to take advantage of market pricing discrepancies.

You might be familiar with the concept of arbitrage when you picture day trading stock brokers or people who flip houses. Or, perhaps you’re familiar with geoarbitrage, which involves taking advantage of your currency by moving to a country where your dollar has more power.

While these forms of arbitrage might seem extreme, there’s also a more accessible option: retail arbitrage.

If you want to make money by buying and reselling everyday merchandise, learning how to start your own retail arbitrage business is the perfect business model to try.

What Is Retail Arbitrage?

Retail arbitrage involves buying products and reselling them for profit. This sounds simple on paper, but like any flipping business, your success comes down to selecting products that sell quickly and knowing your margins so you can turn a profit.

Typically, people make money with retail arbitrage by buying products that are heavily discounted through clearance sales. Buying products on sale helps widen the price discrepancy between your initial purchase and your resale price.

For example, you might buy a pair of men’s swimming trunks on sale at Walmart for $12.99 and then resell it on websites like eBay or Amazon for $19.99, netting a $7 return on investment before any selling and shipping fees.

This is a basic example of making money with retail arbitrage, but swimming trunks are just one example. Popular product categories for retail arbitrage sellers include:

  • Apparel and shoes
  • Books
  • Baby toys and supplies
  • Electronics
  • Jewelry and accessories
  • Personal care products
  • Sports equipment and apparel

The key is to find products on sale that have consistently high demand.

At the end of the day, it doesn’t matter whether you’re reselling running shoes or makeup — successful retail arbitrage means selling your inventory for a profit, and it’s the math that matters.


Advantages and Disadvantages of Starting a Retail Arbitrage Business

If you’re considering making money with retail arbitrage but aren’t sure if it’s the right business model to pursue, consider these pros and cons.

Advantages of Retail Arbitrage

Some benefits of retail arbitrage worth considering include:

1. Existing Market

When you sell on marketplaces like Amazon and eBay, you’re accessing millions of global buyers. This is a faster route-to-market than starting your own online storefront or retail business where you have to attract customers yourself.

2. Easier Product Selection

Business models like dropshipping often have high failure rates because finding a product that catches people’s attention is critical.

By contrast, retail arbitrage sellers generally sell a variety of everyday products, like apparel and household essentials.

This means it’s the arbitrage math that matters for your profit margin, not finding the next trending product that sells well through Facebook ads like with a dropshipping store.

3. Consistent Demand

Because you mostly sell staple products with retail arbitrage, there’s consistent demand for your inventory.

4. Niche Variety

With retail arbitrage, you don’t have to brand your business or pick one niche to focus on. You can sell anything if you believe the buy price is low enough for you to turn a profit when reselling.

5. Scalability

It generally takes time to learn how to source inventory for retail arbitrage and what products sell quickly. But once your business is operational, the main growth constraint is how fast you can source cheap inventory.

Online sales channels like Amazon have practically endless demand, and retail arbitrage businesses can generate millions in revenue.

Disadvantages of Retail Arbitrage

Retail arbitrage is largely a case of getting the math right and leveraging demand on existing online marketplaces. But this side hustle still requires work and patience to scale.

Plus, there aren’t any guarantees you can make money, and there are several other downsides to consider:

1. Starting Costs

When you start a retail arbitrage business, it’s important to test several products so you learn what sells well and how to properly price your listings. But this also means spending money on inventory before making any sales.

If you want to try retail arbitrage, anticipate spending a few hundred dollars on initial inventory to test the waters.

2. Operational Expenses

Upfront inventory costs aren’t your only expenses for running a retail arbitrage business.

Depending on your selling platform, you’re potentially paying seller membership fees, listing fees, and shipping costs. Additionally, resupplying your store with products is an ongoing cost.

3. Inventory Risks

Putting money into a retail arbitrage business isn’t a safe investment. This is because the money you tie up in inventory isn’t very liquid. You can’t simply turn boxes of clearance merchandise back into cash if you need your money back.

Slow-moving inventory or products that simply never sell are an inevitable downside of this business model.

4. Not Passive

If you want to earn passive income, retail arbitrage isn’t the right business model. Between sourcing inventory and managing your listings, there’s a lot of work that goes into a retail arbitrage side hustle.

You can eventually outsource these tasks if you generate enough revenue, but expect a lot of shopping hours and administrative work unless your business takes off.


How To Make Money With Retail Arbitrage

Like other online business ideas, it’s helpful to follow a game plan when starting a retail arbitrage business. There’s a steep learning curve and it takes time to grow your inventory and monthly revenue.

But if you stick to a process, it’s possible to turn your retail arbitrage business into a significant side hustle or even full-time business.

1. Research Products to Sell

Before you spend money on your first batch of inventory, spend time researching products that sell well online. This provides a foundation of product knowledge you can refer to when shopping in-store for deals.

One useful resource for product research is Amazon’s best sellers list. This page highlights top-selling products based on sales volume across dozens of Amazon categories.

As you scour each category, make note of details like:

  • Price Points. Many retail arbitrage sellers stick in the $10 to $40 range for products. This price range lets sellers buy in bulk. Staying above $10 also means you’re making meaningful profit per sale and not selling cheap dollar store products for $0.25 in profit per sale. There are exceptions, but prioritize products with reasonable entry prices and profit potential of a few dollars per sale.
  • Product Ratings. Always check Amazon ratings for products you’re considering. Negative reviews and a low rating can turn away potential customers or mean more product returns, all of which hurt revenue. Ideally, look for four- to five-star ratings.
  • Size and Weight. Selling bulky, heavy products means expensive shipping. Shipping costs are a major, downward pressure on your profit margin, so review shipping rates for the platform you sell on. As an example, Amazon has a comprehensive shipping fees table that you can use to factor shipping costs into your profit margin before buying a product.
  • Seasonality. Christmas lights might be a top seller during the holidays, but this is a poor retail arbitrage buy unless you capitalize early on seasonal demand. As a general rule of thumb, don’t invest too much money into seasonal inventory to avoid holding products for a long time.
  • Expiration Dates. If you’re selling products with expiration dates like groceries or personal care products, factor this risk into your purchasing decisions. Marketplaces usually have rules for selling products with expiration dates. For example, Amazon has specific shelf-life requirements for different product categories, and eBay requires delivering orders to buyers before product expiration dates.
  • Durability. If your product breaks during shipping, it’s a complete loss for your business. Online marketplaces generally side with buyers in the event of damage or disputes, meaning they get a complete refund.

2. Source Products From the Right Retailers

Once you have an idea of top-selling products and product buying tips, you’re ready to source inventory.

Low everyday prices and clearance sales are your best bet to find products ripe for arbitrage. Some popular retailers for sourcing inventory include:

  • Best Buy
  • Bed Bath & Beyond
  • Big Lots
  • CVS
  • Home Depot
  • Kmart
  • Kohl’s
  • Lowe’s
  • Office Depot
  • Old Navy
  • Rite Aid
  • Target
  • T.J. Maxx
  • Walgreens
  • Walmart

You can also try flipping products from thrift stores, provided product condition is good enough to sell as used online. Similarly, garage sales can also have gems like clothing, toys, and books that are excellent resale candidates.

Local stores and bargain hunting at garage sales are in-person shopping options. You can also try sourcing products from online retailers with low prices. Popular online stores that resellers often use include wholesalers like Alibaba and AliExpress.

Wholesalers are beneficial for retail arbitrage because you typically get a lower per-unit price the more you buy.

For example, on Alibaba, a protein shaker bottle costs between $1.70 and $1.99 per unit. But to get the lowest price, you need to order over 1,000 units, which is obviously a lot of money you shouldn’t spend out of the gate when you’re learning.

Buying products online to resell is still viable. But as a beginner, focus on finding clearance items at local retailers that have a higher retail price online.

When you find a product you think you can flip for a profit, double-check what it’s selling for online. One quick way to do this is to use the Amazon seller app for Android or iOS. This app lets you manage your Amazon seller account if you decide to sell on Amazon.

You can also research a product’s current prices, Amazon sales rank, customer reviews, and profit estimates if you sell the same product. The app also lets you scan product barcodes or type in the product name to find data.

Other scanning apps that help you find profitable items include:

For starting out, Amazon’s seller app is more than enough to check potential profit margins for products you’re considering. If you want to dig deeper, Keepa lets you track Amazon prices over time, so you can check if a product you’re considering historically trends upwards or downwards in price in the coming months before buying.

As a final tip, anything you can do to get sale prices even lower helps your retail arbitrage efforts. For example, one popular retail arbitrage trick is to shop at Kohl’s to take advantage of Kohl’s Rewards.

This free loyalty program pays you 5% cash back in Kohl’s Cash for shopping, so you can use cash-back earnings to get even cheaper inventory on future purchases. If you spend $1,000 on inventory over the course of several months, it’s a free $50 discount.

Other stores like Target and Walgreens also have loyalty programs that let you save money, ultimately boosting your retail arbitrage profit margin.

If you can’t use a loyalty program to save, shop with a cash-back credit card. Retail arbitrage is a high-expense business, especially as you scale, so even earning 1% to 2% cash back on everyday spending could be hundreds or thousands of dollars in savings.

3. Resell Products Online

After purchasing inventory, you’re ready to start generating sales.

Many retail arbitrage businesses rely on the Fulfilment by Amazon program, or Amazon FBA, to power sales. This is because as an FBA seller, you’re not responsible for shipping and logistics. Rather, you send inventory to Amazon warehouses so Amazon handles order fulfillment when you make sales.

This lets you focus on sourcing more inventory and managing your listings instead of dealing with endless shipments.

Amazon FBA has various seller fees, warehouse storage costs, shipping expenses, and potential long-term storage fees. But for starters, you pick one of two plans to sell under:

  • Individual Plan: Pay a $0.99 fee for every sale
  • Professional Plan: Pay $39.99 per month regardless of sales volume

Amazon retail arbitrage has a steep learning curve. This is because Amazon has specific packaging requirements, variable fees depending on product categories, and numerous seller rules you have to comply with.

But despite these complexities, Amazon FBA is still one of the best ways to start a retail arbitrage business because it takes logistics off of your plate. Amazon also has comprehensive documentation on its Seller University portal to help you start your own Amazon business.

You can also find affordable Amazon FBA courses on Udemy that provide a step-by-step guide for starting a FBA store. You can also use a product like Jungle Scout to help get started.

Other marketplaces are also viable sales channels. Different platforms you can resell products on include:

Just avoid spreading yourself too thin. If you start with a batch of 10 to 20 products to resell, list everything on one marketplace.

Take multiple, high-quality product photos and write comprehensive product descriptions. Additionally, research competitor prices and price your listings to be the same or similar to the market average.

If you receive questions from potential buyers, answer them in a timely manner and provide the best customer service possible.

Ultimately, you want your seller profile to gain a positive reputation. Websites like Amazon and eBay have seller ratings. Over time, a high rating becomes a competitive advantage for you over beginner retail arbitrage sellers.

4. Use Profits to Replenish Inventory

To keep your retail arbitrage business running, it’s important to reinvest a portion of your profit into new inventory.

It’s often tempting to use extra income to pay off bills or put towards a vacation. But keeping your online listings stocked and growing your inventory is important to drive sales.

This is especially true if a particular listing is selling well and ranking on websites like Amazon when people search for that product. In this case, keep that listing as well-stocked as possible since you’re getting a steady stream of sales.

Once you have a gauge on your monthly revenue, set a percentage of your profit aside specifically for buying more merchandise. After some practice, you can put more money into inventory if you’re confident it will sell quickly.

But for starters, grow your store slowly and avoid dipping into your savings account to continually fund your business.

5. Optimize Your Operation

If you get your retail arbitrage business off the ground and turn a profit, that’s already a significant achievement. But like any business, there’s always room for optimization that can save time and money.

The more time and money you save, the better. A retail arbitrage side hustle is like running a small business, and optimization is a never-ending process that you should always consider. With retail arbitrage, some operational areas you can improve include:

Shopping Speed

When you’re new to retail arbitrage, sourcing products is slow. But as you become better at identifying profitable products, shopping becomes faster.

You should also note which days certain stores in your area typically put products on clearance.

Additionally, get to know store managers and ask them for insight on upcoming sales. If a manager knows you’re going to buy out their clearance inventory, they might give you a heads-up or inside info on when you should swing by the store.

Seller Fees

Fees are often complex with retail arbitrage, especially if you sell through Amazon FBA. This is because there are seller membership fees, shipping and storage costs, and even fees for removing your inventory from Amazon warehouses.

As you get your first sales, pay attention to what fees eat up most of your profits. For example, switching to a professional Amazon seller plan for $39.99 per month is cheaper than an individual plan if you consistently sell more than 40 products per month.

Shipping

Like inventory sourcing, shipping has a learning curve, so you’re slow when you start selling. But shipping is also an area where you can save money.

For example, Amazon FBA offers a package preparation service that ensures products have compliant packaging and labels for shipment. But you pay a per-unit fee for the luxury depending on the product category. Apparel, for example, costs $0.50 to $0.80 per unit in preparation and labeling fees with this service.

As a beginner, rely on Amazon’s prepping services so you have fewer rules to worry about. As you gain experience, you can package and label inventory yourself for significant savings on large shipments.

eBay also has various shipping discounts you can take advantage of, like discounts on UPS, FedEx, and USPS shipping rates that help you cut costs.

Listing Performance

When you list a product on marketplaces like Amazon and eBay, you include images, a product title, and a description. Improving your listings helps get your products in front of more customers since your listings can appear when people search for specific products.

Including more high-quality photos and writing comprehensive product descriptions are two fast ways to optimize your listings. You can also spy on what successful sellers do for their product description writing and apply the same tactics.

6. Experiment With New Products

After several months of growing your retail arbitrage store, you should have a solid understanding of products that sell well. You might even find yourself gravitating toward a few niches you feel comfortable with, like apparel or beauty products.

Part of growing your sales means venturing into uncharted territory. You should still focus on resupplying your storefront with your top-selling products. But don’t be afraid to use some of your revenue to purchase new products you spot on clearance to test new opportunities.

Product diversification also helps mitigate risk. The last thing you want is to have most of your money tied up in inventory for a single product, only to find it stops selling quickly due to changes in consumer preferences or another seller stealing your business.


Considerations

Before jumping into retail arbitrage, there are several other business risks and requirements to consider.

1. Earning Guarantees

Many ways to make money online come with a reliable paycheck.

For example, working as an online English teacher or becoming a virtual assistant both pay an hourly wage. If you need to pay off bills or grow your savings, it’s comforting to know your side hustle efforts yield results.

By contrast, retail arbitrage doesn’t guarantee a paycheck.

Plus, earnings can be volatile even if you find success; you can be in the negative or barely break even some months and potentially make hundreds or thousands of dollars the next depending on sales.

The upside is that retail arbitrage can scale as a business whereas freelance income depends on how many hours you work. But if you absolutely need money today, stable online work or gig economy jobs are better choices.

2. No Brand Building

Because retail arbitrage involves reselling products, you don’t build your own brand in the process of building your business.

You can private label products to solve this issue, which involves selling products from manufacturers with your own packaging or slight product modifications to develop your own brand. But private labeling often requires negotiation with manufacturers, which takes time and effort.

If you don’t want to build a brand, this isn’t a downside. But if you like the idea of having an identifiable business that customers recognize and trust, retail arbitrage isn’t for you.

As an alternative, you can make your own products and sell on Etsy or create a storefront on platforms like Shopify.

This usually takes more time to find buyers because you’re offering something new under your own brand versus selling an already-familiar brand to consumers. But the trade-off is that you own everything, and seller fees are lower than Amazon FBA.

3. Competition

E-commerce is immensely competitive. According to Statista, 55% of goods sold on Amazon come from third-party sellers. Similarly, if you search for products on eBay, you often see hundreds of thousands or over a million listing results.

As a beginner in retail arbitrage, you’re competing with larger operations that can squeeze you on pricing because their scale creates better margins. This means it usually takes time to get your first sales and to grow your inventory using profit.

In short, don’t expect to start making thousands of dollars or even getting sales the moment you list your inventory.

4. Time Requirements

Running a retail arbitrage business is like having a part-time job.

Sourcing inventory and shipping can take hours out of your week. Plus, these tasks gradually take more time as your operation scales. When you add in listing optimization and dealing with customer service, the time commitment can become significant.

Successful retail arbitrage sellers use their revenue to outsource time-consuming tasks. But for smaller operations, this probably isn’t an option.

The bottom line is that you have to have enough time to try this side hustle. If you only have a few hours per week to spare, flexible business ideas like starting a blog or YouTube channel are more viable.


Final Word

With the growth of e-commerce, business ideas like retail arbitrage and dropshipping have grown rapidly in popularity. Thanks to technology and changes in shopping habits, new ways to make money online continue to become available.

However, retail arbitrage isn’t a get-rich-quick scheme or for the faint of heart. Immense competition and tight margins make it a tough business model. If you don’t have much free time, it’s also difficult to source products and manage your listings each week.

That said, with time and practice, you can make money with retail arbitrage, even while working a full-time job. The key is to slowly learn the ropes, use your profit to fund additional inventory, and continually optimize your business.

It might take weeks or months to get your first sale, but flipping is a viable business model with high earning potential if you’re willing to put in the work.

Source: moneycrashers.com

What is a balance transfer and how do they help?

What is a Balance Transfer Title Image

A balance transfer happens when you move your debt
from one or more sources to a single credit card with a lower interest rate. By
paying less interest, more of your payment goes toward the principal balance.

Balance transfers aren’t always the best way to get debt relief, however. You should carefully consider the benefits and downsides to balance transfers before initiating the process.  

How a balance transfer works

With a balance transfer, you transition the amount you owe from one card
to another. You can also move other types of debt to a credit card. For
example, some issuers may allow the transfer of auto and personal loans.

Here are the five steps to completing
a balance transfer.

1. Choose a
balance transfer card:
You can either open a new credit card for the transfer or
transition your debt to a card you already have. Look at interest rates,
balance transfer fees and other terms to make the best choice.

2. Decide on your transfer amount: Look at the credit limit you have and ensure the balance will be less than your limit. Ideally, the transfer is much lower than your credit limit and lowers your credit utilization ratio in the process.

You’ll also want to look at balance transfer fees,
which are usually around three percent of the amount you’re transferring. Some
cards also have limits on transfer balance amounts. Check your card details
carefully.

3. Review the
terms and conditions:
Make sure you’ve read all of the terms, fees and official
agreements before transferring the balance. While the fine print can be
lengthy, you need to know exactly what it is you’re agreeing to.

4. Initiate the transfer: There are a few different ways you can initiate a transfer—through your credit card’s online account, or calling the customer service line of your credit card company, for example—but how you do so will depend on the policies of your credit card company.

5. Pay off your debt: Make monthly payments toward your balance transfer. Create a plan to pay your debt off within the introductory period, so you don’t have to pay any interest on it.

Balance Transfer Process Image

How a balance transfer affects credit score

Balance transfers can either improve or lower your
credit score, depending on multiple factors. Here’s how:

Your credit utilization rate: If you’re able to pay off more of your debt due to the lower interest rate, your credit score will improve. By paying off debt, you’re using less of your available credit, which lowers your credit utilization ratio.

Making on-time
payments:
Paying your credit card bill on time boosts your credit
score, as payment history is the most significant factor in scoring models like
FICO®. Balance
transfers can help in this area if the transfer makes it easier to pay.

Number of hard
inquiries:

Your credit score takes a hit when you apply for several credit cards at once
because they each trigger a hard inquiry.

Hard inquiries aren’t bad in and of themselves and are a necessary part of applying for credit. That being said, if you have a large number of hard inquiries on your credit report within a short time frame—if you apply for many credit cards at once, for example—it signals to lenders that you may not be responsible with your credit.

Average age of credit: Your credit score is also based on the average age of your credit. It would be more beneficial to your credit to keep your old accounts open even after you’ve transferred the balance. This will increase the average age of your credit accounts. More open cards also help keep your credit utilization rate low.

Credit Factors Balance Transfer Affect Image

When to consider a balance transfer

A balance transfer can help you pay off debt faster
and pay less overall. Here are the main scenarios when a balance transfer can
help.

You have debt with a high-interest rate: If you have a credit card—or many cards—with high-interest rates, it may be good to transfer the balance to a card with a lower rate. By lowering interest, you’re able to pay more toward the principal balance and pay off debt faster.

It’s difficult
to juggle multiple payments:
You can combine debts by transferring them all to a single
card, which will allow you to only have to keep track of one payment every pay
period.

You can get a good promotional offer: Many credit cards offer low or no interest rates during the introductory period (usually six – 18 months). By transferring your debt, you can save money in the long run.

How to choose the best balance transfer card

Balance transfer credit cards compete with other
credit cards by offering good introductory APRs (annual percentage rates) to
attract new cardholders. Generally, the better your credit, the more options
you have for low introductory rates and no transfer fees.

Here are a few other things to consider when shopping
around.

Balance
transfer fee:
A fee for transferring a balance is common. It’s usually about three
percent of the balance amount (like we stated above). If you have a good credit
score, it’s possible that the balance transfer fee might be waived entirely.

Interest rate: Interest rates vary
significantly between cards. Some promotional incentives may offer introductory
zero percent APR. However, be sure to look at what the APR is after the
introductory period, in case you don’t pay off all your debt in that timeframe.

Length of
promotional period:
The introductory promotional period for balance transfers is
usually six – 18 months. A longer promotional period allows you more time to
pay off the debt before a higher interest rate is applied.

Annual fee: Some cards charge a fee each
year to keep the card active. Be on the watch for high annual fees.

Credit limit on
a new card:
A
higher credit limit can help you maintain a lower credit utilization rate. If
you’re transferring a balance, make sure your credit card limit far exceeds the
balance you’re transferring.

Basic requirements: It’s best to apply for a card that you have a good chance of being approved for. When you apply for a credit card and aren’t approved, the hard inquiry will remain on your credit report. As we said above, too many hard inquiries occurring in a short time period can lower your credit score.

Key Balance Transfer Card Features to Compare Image

Generally, if the amount you save with a lower interest rate is higher than the balance transfer fee, it may be worth transferring the balance. It’s also ideal if you can pay off the balance during the zero percent interest period, and avoid paying interest on any of your debt.

What to do after you’ve transferred your balance

After you’ve transferred your balance, there are a few
things you can do to improve your credit score and pay off your debt.

Make timely
payments:

On-time payments boost your credit score. Any late or insufficient payments can
potentially invalidate lower interest rates and harm your credit score.

Note important
dates:
Set
reminders for when the introductory period ends. Any debt you don’t pay off
during that period will be charged with greater interest rates. You’ll also
want to make sure you complete the transfer within the given timeframe.

Create a plan
to pay off debt within the zero percent timeframe:
Design a budget that works for you to
pay off your debt, ideally within the zero percent interest timeframe. This
might include scaling back on expenses or picking up extra shifts at work. In
the long run, it could save you quite a bit.

Don’t make purchases on your new card: When you make a payment, the funds go to your purchases first, then your transfer balance. Try to use a different method of payment to make purchases, so your credit card payments only go toward your older debt.

Keep your old cards open: By keeping other cards open, your total available credit limit is higher—meaning your utilization ratio is lower. Having older cards also increases the average age of your credit accounts.

Why you should check your credit report after a balance transfer

Mistakes sometimes happen when there is a lot of
activity on your credit report, such as data errors and information that should
no longer be on your report.

These inaccuracies can unfairly affect your credit score. For example, some of your credit reports might not reflect the balance transfer properly. Credit repair can help you review your report, identify errors, and work to correct—giving your credit score a boost. Contact the credit repair consultants at Lexington Law to learn how we can help you.

Source: lexingtonlaw.com

What Are Closed-End vs Open-End Mutual Funds – 5 Key Differences

Mutual funds gained popularity among the investing public in the 1980s and 1990s. They began as a way for large institutional investors to pool their money for a common purpose and spread the risk of losses inside a mutually-owned fund, hence the name mutual fund.

Today, mutual funds are a staple of most everyday Americans’ nest eggs and are considered a good way to diversify your retirement plan.

What you may not be aware of is that there are various types of mutual funds. The two main ones are open-end and closed-end. Understanding the differences between them can help you broaden and strengthen your investment portfolio asset allocation based on your investment risk tolerance.

What Are Open-End Mutual Funds?

Like all funds, open-end mutual funds — open-ended funds or OEFs — pool investments from a group of individual investors. The investment company, made up of a fund manager, professional traders, and analysts, will then invest the money pooled from the group of investors according to the prospectus for the fund.

Open-end funds are unique because they don’t have restrictions on the number of shares they can issue to new investors. Instead, when investors want in, these funds simply issue new shares and accept the investment directly.

There is a caveat.

These funds must buy shares back from investors who wish to exit their investment. As a result, the value of each share of these funds is based on the net asset value (NAV) of the fund, or the value of the fund’s assets, rather than on how much investors are willing to pay for it.


What Are Closed-End Mutual Funds?

Closed-end funds, also known as closed-ended funds or CEFs, and open-ended funds appear to be the same type of investment in many ways. They are built on the idea of diversification, pool investment dollars from a large group of individual investors, and are generally managed by a team of Wall Street pros.

But, when you dial into the details, you’ll find that OEFS and CEFS are actually quite different.

Closed-end funds trade on stock market exchanges, so buying and selling shares of these funds takes place in the same way that buying and selling shares of stock does.

Like any publicly traded company, closed-end funds have a fixed number of shares and can’t simply issue new shares because there’s demand. Moreover, closed-end funds don’t repurchase their own shares when an investor wants to exit his position.

From the date of its initial public offering (IPO), closed-end mutual funds trade just like stock for all intents and purposes.


Key Features

When deciding which type of fund is the best fit for your portfolio, there are several factors that need to be taken into account, with your financial goals being foremost.

It’s important to think about your time horizon, how your investing dollars will be used to achieve growth, and what factors play a role in the pricing of these assets.

1. Liquidity

Liquidity describes the amount of time it will take to turn an investment back into cash by selling it to another investor or back to the issuer.

If you’re looking to make short-term investments or think you may need access to your investing dollars from time to time, you’ll benefit from the ability to quickly turn your investments into cash.

If you have a long time horizon and use a buy-and-hold strategy, liquidity may be less of a concern for you.

Open-End Fund Liquidity

Open-end mutual funds are generally liquid assets because fund managers are required to hold a percentage of the fund’s assets in cash for any investors who want to redeem their investments.

As a result, if you want to exit an open-end investment, you’ll be able to do so at the end of each trading day by selling your shares back to the fund management company that issued them to begin with.

Closed-End Fund Liquidity

Closed-end funds aren’t always able to be redeemed at the end of the day. These are exchange-traded funds (ETFs) that are at the mercy of the levels of supply and demand among investors.

When a closed-end fund launches its IPO, it puts a prespecified number of shares up for sale, and it generally doesn’t issue new shares or redeem old shares. Instead, in order for one investor to sell a position in these funds, another investor needs to be willing to buy it.

If there are no buyers wanting into the fund when you’re ready to sell your shares, you won’t be able to sell. Instead, you’ll be forced to hold until a buyer comes along.

As a result, these funds have the potential to be less liquid than their open-end counterparts, especially if you invest in a smaller fund with low levels of trading volume.

2. Pricing

When investing, whether it be in stocks or investment-grade funds, share price is an important factor. After all, you don’t want to overpay and lose the opportunity to generate meaningful gains.

When it comes to closed-end and open-end mutual funds, it’s important to understand how prices are set for these investments and what that means for you if you have them in your portfolio.

Open-End Fund Pricing

The price per share of an open-end fund is based on its NAV at the end of each trading day. After the markets close, the fund’s NAV is divided by the total number of outstanding shares to get the share price of the fund.

For example, if a fund has a NAV of $100 million and there are currently 1 million shares issued, the price for each share will be $100 ($100 million divided by 1 million shares).

As a result of this pricing structure, open-end investments are known to experience lower levels of volatility, making them a safer investment when compared to closed-end opportunities.

Closed-End Fund Pricing

The pricing of closed-end investments works quite differently because they are exchange-traded assets. As with any other asset traded on stock market exchanges, the market price of these funds is determined by the law of supply and demand.

Supply is created by investors who want to sell shares of the fund, while demand is created by those who want to buy shares.

If the buying pressure outweighs the selling pressure, the law of supply and demand stipulates that the price of the asset must rise to curb demand. If supply outweighs demand, prices must fall to increase demand and create a balance.

Although the way closed-end investments are priced creates volatility and increased risk, it also creates opportunity.

There may be several reasons that supply outpaces demand. Sometimes it’s as simple as investors being unaware that the opportunity exists. In these cases, the price of shares of a closed-end fund can actually fall below its NAV — the value of the underlying assets it owns — meaning you’ll have the opportunity to buy in at a discount.

As a result, closed-end funds make it possible to boost capital appreciation by taking a value investing approach to mutual funds.

3. Capital Structure

The distribution of debt and equity within a publicly traded asset is known as its capital structure. One of the most important factors in this structure is how many shares are outstanding, which can either be a fixed or floating number, depending on the type of fund you invest in.

Open-End Fund Capital Structure

Open-end investments have no restrictions on the number of new shares that can be issued if a new investor or group of investors want to get involved. This means the number of outstanding shares will change on a daily basis as new investors purchase shares and prior investors redeem their shares.

This can create a challenge for fund managers that ultimately increases risk. If a fund becomes too large, the fund manager may decide the total assets have grown too unwieldy to make it possible to meet the fund’s objectives. This can result in the manager closing the fund to newcomers, leading to potentially lower prices and slower growth in the fund.

A fund growing too large can also increase the risk for investors if it means the team managing the investments may be stretched to their limits and more prone to mistakes.

Closed-End Fund Capital Structure

Closed-end investments trade on the open market with a specific number of shares available. Their capital structure is much easier to understand. Moreover, even as demand grows, the net asset value of the fund will remain manageable for the team at the helm.

On the other hand, the downside to this capital structure is that if demand for a fund is high, you’ll have to overpay in relation to the fund’s NAV in order to get involved in the investment.

4. Access

When deciding if you’ll invest in an open-end or closed-end investment, it’s also important to consider the accessibility of the investment. In some cases, funds can come with exorbitant minimum investments, resulting in less accessibility for everyday investors.

Buying and Selling Open-End Funds

The price of open-end shares is set by the fund manager at the end of the day, and you’ll often be required to meet minimum investment amounts to get involved.

Minimum investment amounts generally range from $500 to $5,000, with funds at the higher end of the spectrum being less accessible for new investors with relatively small investment portfolios.

Buying and Selling Closed-End Funds

Closed-end investments are priced based on supply and demand, with the minimum investment amount being no more than the cost of a single share of the fund.

The vast majority of these funds are priced from $10 per share to a couple of hundred dollars per share, making them far more accessible to newer investors with limited capital available.

5. Exposure

When you make an investment, you want 100% of your money to be put to work for you, exposed to the potential gains — or losses for that matter.

However, depending on which type of mutual fund you choose, the money you invest may not be 100% exposed to the assets you’re investing in.

Open-End Fund Investing Capital Exposure

To exit a position in an open-end fund, investors sell their shares back to the issuer. This means the company managing the fund has to hold a percentage of the fund’s assets in cash to the side so that it can afford to purchase shares back when an investor decides to exit their investment.

That cash set aside for redemptions can’t be put to work in the market.

Therefore, when investing in open-end mutual funds, a percentage of your investment will not be exposed to the underlying assets outlined in the fund’s prospectus, limiting your profitability.

Closed-End Fund Investing Capital Exposure

Closed-end investments provide 100% exposure to the underlying assets. That’s because these shares are bought and sold in the open market in transactions between investors, not between the issuer and investors.

Because there is no requirement for the issuer to buy shares back from the investing public, 100% of your investment dollars can be invested based on the objectives of the fund.


The Verdict: Should You Choose Open-End or Closed-End Funds?

Deciding whether you’ll invest in an open-end or closed-end fund is a decision that requires a bit of thought.

How comfortable are you with risk? Are you going to need access to your funds quickly? Do you find solace in being able to access those funds or would you rather enjoy a potential discount when you purchase shares?

You Should Invest in Open-End Assets If…

Consider open-end funds if you prefer investments that have high liquidity and, although growth may be slower, you’re more interested in assets that lack volatility. OEFs may be best for you if:

  • You Have a Shorter Time Horizon. If you aren’t planning on investing for the long haul or may need access to your investing dollars from time to time, open-end investments offer the perfect solution. They are generally redeemable at the end of each trading day, meaning you’ll have access to your money when you need it.
  • You Have Enough Capital to Get Started. Fund managers set minimum investment amounts for open-end funds ranging from $500 to $5,000. Investors in these funds need to have enough money to cover these minimum capital requirements.
  • You’re Risk-Averse. Volatility is exciting for some investors because it offers the opportunity for large gains over a short period of time. On the other hand, it also has a dark side because it increases the risk of sudden, significant losses. Investors with a relatively low appetite for risk will benefit from investing in open-end opportunities because they tend to experience far less volatility than their closed-end counterparts.

You Should Invest in Closed-End Assets If…

Consider closed-end funds if you enjoy doing the research to find undervalued opportunities and sitting on them until their values climb to more realistic levels. You might be a good fit for closed-end funds if you don’t mind moderate levels of risk in exchange for the potential to expand your gains.

Closed-end funds are best if:

  • You Enjoy Volatility. Although fast-paced fluctuations in the price of an asset will result in risk, it also gives you the opportunity to take advantage of discounts when funds are undervalued and cash in on big gains when investors push the values of the funds too high.
  • You Invest With a Long Time Horizon. Closed-end assets are riskier than open-end assets, which is fine for those with a long time horizon. The longer you plan on staying invested, the longer you have to make up for declines should something go wrong.
  • You Aren’t Worried About Liquidity. Closed-end assets are only able to be sold when another investor is interested in purchasing them. If there’s no buyer, you’ll be stuck in the investment until one comes along, making closed-end funds — especially lesser-known funds that are thinly traded — less liquid.
  • You Don’t Have a Large Portfolio. While open-end assets generally come with high minimum investment amounts, closed-end assets only require you to invest as much as a single share of the fund costs, which is often minimal. This makes closed-end funds well-suited for investors with relatively small portfolios.

Both Are Great If…

Some investors own a mix of the two types of mutual funds. These investors usually have relatively large investing portfolios and want access to the potentially market-beating returns of closed-end funds while hedging those bets with the safer open-end funds.

You might consider a mix of the two types if:

  • You Have a Mild Tolerance for Risk. If you want to get your hands on the increased profitability offered by the higher volatility closed-end funds, but aren’t willing to take this higher level of risk across your portfolio, a mix of both closed- and open-end funds will provide balance.
  • You Have a Relatively Large Investing Portfolio. In order to mix closed-end and open-end funds within your portfolio, you’ll have to have enough capital to do so. In general, you’ll need a portfolio with a minimum of $10,000 to properly diversify between the two.
  • You Want Some Liquidity. Say you believe you might need fast access to your money in some cases, but chances are you won’t need to access it all at once. In this case, open-end opportunities can make up the most liquid portion of your portfolio, while the rest of your portfolio can be invested in closed-end assets with a higher earnings potential.

Final Word

By now, you should have everything you need to decide whether an open-end mutual fund, closed-end mutual fund, or a mix of the two is best for your investing portfolio. Now, it’s time to act.

Keep in mind that mutual funds are each unique, offering different rates of return, expense ratios, and investment strategies. As a result, it’s important to do your due diligence by researching every investment opportunity prior to investing your hard-earned money.

Source: moneycrashers.com

13 Good Side Hustles From Home You Can Start This Weekend

If you’re looking to increase your income and you’re ready to take action, the side hustles covered in this article could all be started this weekend.

Some side hustles allow you to start making money immediately and others involve building a business with excellent long-term income potential.

Regardless of your situation, you’re sure to find something that’s a good fit for you.

Good side hustles from home

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make an extra $500 per month, and that’s realistic with a blog.

The downside to blogging is that you’ll need some patience. Growing a blog from scratch takes time, and most bloggers make very little money in the first 6-12 months. However, once you’ve gained some momentum, it’s a great way to make money online. 

Why You Might Want to Start a Blog:

  • Unlimited income potential.
  • Flexibility to work around your existing schedule.
  • You can start a blog on the topic of your choice.
  • Potential to make money on your own without the need for client services.
  • Easy and inexpensive to start.

How to Get Started

The first step is to decide what you’re going to blog about. While you don’t need to be passionate about the topic of your blog, it helps if you at least have some interest in the subject. Working on the blog will be a lot more fun if it’s something you enjoy.

Next, you’ll need to sign up for a web hosting account to get your blog set up. I recommend Bluehost for new bloggers because their prices are among the lowest in the industry, and it’s straightforward to get set up. The article How to Make Money Blogging as a Side Hustle is a great guide you can follow.

2. Start a YouTube Channel

Starting a YouTube channel is another enticing option that offers many of the same benefits as blogging. It’s a flexible opportunity that offers significant income potential. The difference is, you’ll be creating content in video format instead of written format. If you enjoy being on camera more than you enjoy writing, YouTube may be a better opportunity than blogging for you.

The highest-earning YouTubers are making tens of millions of dollars per year, and the numbers keep growing each year. As the amount of video content consumed by the average person continues to increase, the earning potential for YouTubers will also increase.

Like starting a blog, growing your YouTube channel will take time, and you aren’t likely to start making money right away. The most common way to monetize a YouTube channel is through the YouTube Partner Program, which allows you to make money from ads on your videos. You’ll need at least 1,000 subscribers and 4,000 watch hours to be eligible for the program. Those numbers may seem high, but many active YouTube channels can reach that level within a few months.

Why You Might Want to Start a YouTube Channel:

  • Unlimited income potential.
  • Surging demand for video content.
  • Less competition than blogging.
  • Can be a lot of fun.

How to Get Started

YouTube for Beginners is a course from Skillshare that was created by an experienced and successful YouTuber. It teaches everything you need to know to start and grow your channel.

3. Online Surveys

The first two options I’ve mentioned offer excellent long-term income potential but will take some time before you start making money. Taking online surveys is the exact opposite. You’re not going to get rich by taking surveys, but this is a highly flexible side hustle, and you can start making money immediately.

If you’re looking to make an extra $100 per month, or maybe a few hundred dollars per month, taking surveys could be a good option. There are several survey websites and money making apps you can use to start making money right away. Some of the best choices include:

Surveys are appealing because anyone can do this side hustle. You don’t need any particular skills or experience to make money in your spare time.

Why You Might Want to Take Online Surveys:

  • Extreme flexibility: take surveys whenever you have a few minutes to spare.
  • Anyone can do it. No specific skills or experience required.
  • Start making money right away.
  • Sites like Swagbucks offer lots of ways to make money in addition to surveys.

How to Get Started

Getting started is quick and easy. Create a free account at the top sites like Swagbucks and Survey Junkie, complete your profile, and begin taking surveys. Each site will have different rules regarding the amount of money or points you need to earn before withdrawing the cash or redeeming points. Swagbucks allows you to redeem points as soon as you have enough for a $3 gift card, making it one of the best options.

4. Flea Market Flipping

Good side hustles from home - flea market flipper

If you enjoy finding amazing deals at yard sales, flea markets, auctions, estate sales, or thrift stores, becoming a flipper could be the right choice for you. This side hustle involves buying underpriced items and reselling them for a profit.

Finding valuable items at places like yard sales and flea markets is pretty easy with a little effort. Many people are simply looking to get rid of their stuff, and you can find some great deals. Most flippers resell the items online through eBay, the Facebook Marketplace, Craigslist, or other similar sites and apps. 

Flipping is a flexible side hustle you can do whenever you have the time or need to make some extra money. It’s also possible to start earning a profit very quickly.

Why You Might Want to Become a Flipper:

  • Can be fun if you enjoy finding great deals.
  • Good income potential.
  • You can learn the skills quickly.
  • Great fit for people who don’t want to spend all of their time online.

How to Get Started

To get started, all you need to do is head out to some yard sales or flea markets this weekend and look for underpriced items to buy. It’s best to start with products that you know well. With a little bit of experience, you’ll get more familiar and more comfortable with a broader range of products. See this list of the easiest things to flip for profit as a guide for getting started.

5. Furniture Flipping

Most of the items you buy at yard sales or flea markets to flip will involve minimal work to get them ready to sell. You might clean up an item or make minor repairs, but in most cases, you’ll be making money primarily by finding things that are worth more than they’re selling for. 

Flipping furniture is different because it requires putting in several hours of work to restore the item before selling it. The idea is to find a low-priced (or free) piece of furniture that has the potential to be much more valuable if it is restored or refinished. Solid wood furniture is ideal because you can increase the value simply by painting or staining it. Upholstered furniture can be reupholstered for a completely new look, increasing the value relatively quickly.

If you enjoy working with your hands and turning something old and unwanted into something valuable, this could be the perfect opportunity for you. Learning how to repair or restore furniture is not that difficult, and there are plenty of YouTube videos that will teach you for free.

You can find items to flip at yard sales or drive around and look at pieces out for the trash. Once your item is ready to sell, the Facebook Marketplace and Craigslist are ideal for reaching people in your local area.

Why You Might Want to Flip Furniture:

  • Work whenever you have time or whenever you need money.
  • High demand for restored furniture.
  • Anyone can learn the skills.
  • Start making money quickly.

How to Get Started

To get started, you’ll need to find your first piece to flip. Take a look around your home or apartment, and you may already have an ideal item. Working on a piece of furniture you already own is a perfect way to start. It means that you won’t have to spend any money buying an item, and it gives you a chance to make a profit quickly. If you don’t have anything, head to some yard sales this weekend and see what you can find.

6. Investing

Over the past year, investing as a side hustle has become increasingly popular. Stories of part-time investors making huge sums of money have been in the news a lot. Of course, the stock market’s trajectory over the past year made that more manageable, but this is a side hustle you might want to consider if you enjoy personal finance and investing.

It’s critical to remember that investing comes with risk, and you shouldn’t invest money that you can’t afford to lose. However, there’s also a substantial upside if you have success with it.

Platforms and apps that are ideal for new traders include:

Of course, investing in the stock market isn’t the only option. You could also invest more passively in real estate or other types of alternative investments. Some platforms you might want to consider include:

You can also find plenty of alternative investment options here.

Why You Might Want to Start Investing:

  • Excellent long-term potential.
  • Opportunity for exponential growth.
  • Valuable skills to learn.

How to Get Started

To get started, decide which type of investing you want to do. This beginner’s guide is a good resource for anyone who wants to get started with the stock market.

7. Photography

Good side hustles from home - photographer

Are you a hobbyist photographer? Would you like to start making money from that hobby? 

There are several different ways to make money with photography, but we’ll look at two great options for getting started as a side hustle: client photo sessions and stock photography.

No matter where you live, there are people in your local area looking for a photographer. You could take photos of families, engaged couples, high school seniors, sports teams, and much more. 

Making some part-time money by offering photography services is relatively easy. Scaling it to a full-time income is much more challenging. If you’re looking for a way to make a few hundred dollars per month on the side and you have some photography skills, consider offering your services to others.

Another option is to upload your photos to stock photo websites like Adobe Stock, Shutterstock, and many others. You’ll be able to earn money every time a customer downloads one of your photos.

The stock photography market is highly competitive, so it’s not easy to make a considerable amount of money. But if you’re looking for a way to make a few hundred dollars per month, it’s very realistic. To have success, you’ll need to upload many photos and keep taking and uploading new pictures all the time. 

Why You Might Want to Become a Photographer:

  • Monetize your existing hobby.
  • Variety of ways to make money.
  • Potential to grow into a full-time business.

How to Get Started

Choose whether you want to offer services to clients or upload your photos to stock marketplaces (or both).

For client work, the best way to get started is with friends and family. Talk to everyone you know and offer a low price to begin to get some business. With a little bit of experience, you’ll get to build up your portfolio and benefit from word-of-mouth advertising.

To get started with stock photography, choose a platform you want to use. Ultimately, you’ll want to upload your photos to several different sites to maximize your income potential, but it can be helpful to start with just one, so it’s not overwhelming. Each stock photo site will have an application process to become a contributor. You’ll probably need to upload some samples, so get ten of your best photos ready to go.

8. Freelancing

You can offer many different services as a freelancer, including writing, editing, proofreading, web or graphic design, coding and development, marketing, and more.

Freelancing is a great way to make money because you can use the skills you already have to start making money quickly. You’ve probably developed some skills at a previous job (or maybe your current job), or even through a hobby.

The income potential with most freelance services is also outstanding, making it ideal for growing to a full-time income if that’s something you want to pursue.

Why You Might Want to Start Freelancing:

  • Lots of possibilities and many services you could offer.
  • Monetize the skills and experience you already have.
  • Excellent income potential.
  • Flexible working hours.

How to Get Started

My article How to Make Money Online for Beginners covers the steps to follow if you want to start as a freelancer.

9. Virtual Assistant

Working as a virtual assistant or VA is one of the best opportunities available in 2021. Many businesses are looking to outsource more work, and as a VA, there are numerous different services you could offer.

Many VAs do things like general administrative tasks, blog editing, moderate forums or Facebook groups, management of social media profiles, and much more.

Working as a VA is a very flexible side hustle that fits around your existing schedule. It’s something you could do part-time or work on growing your client base and turn it into a full-time business.

Why You Might Want to Become a VA:

  • High demand for talented and reliable VAs.
  • Work as much or as little as you want.
  • Monetize your existing skills.
  • Good income potential.

How to Get Started

Gina Horkey’s Fully-Booked VA is an excellent resource for anyone who wants to make money as a virtual assistant. There’s training for all aspects of running your business, and you’ll be able to learn from an experienced and successful VA.

10. Self-Published Author

Good side hustles from home - self-published author

If you like to write, you might want to consider becoming a self-published author as a way to make some extra money. With print-on-demand platforms like Amazon’s Kindle Direct Publishing (KDP), becoming an author has never been easier. There’s no need to send your writing to a bunch of publishers hoping to hear back.

Through KDP, you can sell e-books and paperbacks without the need to spend any money on inventory. The paperbacks are printed as they’re purchased, and Amazon handles all of those details.

You can write whatever type of book interests you, covering any topic or genre you choose. You probably already have some experience you could use to write a book that others would buy.

Why You Might Want to Become a Self-Published Author:

  • Make money doing something you enjoy.
  • Making money as an author has never been more realistic.
  • Completely flexible. Work whenever you want.
  • Potential for passive income.

How to Get Started

From First Draft to Bestseller is a detailed and thorough course that teaches how to make money as a self-published author.

11. Sell on Etsy

If you’re crafty, you might enjoy selling on Etsy. You could sell handmade or vintage items, or even design and sell digital products like printables. 

Selling on Etsy is a side hustle that may take some time to become profitable because you’ll need to work on getting exposure and growing your shop. The long-term potential is solid, but you’ll probably need to put in a lot of work early on. 

Why You Might Want to Start an Etsy Shop:

  • Monetize your crafty hobby.
  • Work around your existing schedule.
  • Excellent income potential.

How to Get Started

The course Building an Etsy Shop That Sells is an excellent starting point. Beginners will learn all of the necessary details related to getting started on Etsy.

12. Microtasks

The opportunity to make money with microtasks is very similar to taking online surveys. You’re not going to make a lot of money per hour, but what it lacks in income potential, it makes up in terms of flexibility.

Several websites like Amazon’s Mechanical Turk and Clickworker pay people to do small, simple tasks that take no more than a few minutes. Some survey websites like Swagbucks also offer a variety of tasks you can do for money or rewards. 

You can work on microtasks whenever you have some spare time, as much or as little as you want. And like surveys, anyone can do the work. You don’t need skills or experience, aside from fundamental computer skills.

Why You Might Want to Do Microtasks:

  • Extreme flexibility. Work whenever you want, as much or as little as you want.
  • Anyone can do it. No skills or experience needed.
  • Start making money right away.

How to Get Started

To get started, create a profile at a microtasking site like MTurk or Clickworker. The signup process is easy, and you’ll be able to start completing tasks very quickly.

13. Rental Business

One of the more overlooked side hustles involves renting out your stuff. There are many different things you could rent, including:

  • Tools
  • Baby gear
  • Car, truck, or bike
  • RV
  • Storage space 
  • Room or unit in your home
  • Parking space

With a rental business, you’ll be making money because of your assets, not because of the amount of time you’re working. If you have things that people are willing to pay to use, you might be able to make a decent amount of money on the side without working many hours.

Why You Might Want to Start a Rental Business:

  • Turn things you’re not using into income-generating assets.
  • Make money from your assets, not trading your time for money.
  • Lots of different things you could rent out.

How to Get Started

Take a look at the things you already have. Try to find anything that might have value that you’d be willing to rent out. You can use a website like Fat Llama to list just about anything for rent or use a specialized platform like RVshare to rent out a specific type of item. Use Airbnb to rent a room or vacation home.

Final Thoughts

If you’re interested in making some extra money outside of a job, why not take action right away? This article covers 13 good side hustles you could start this weekend, and most of them involve minimal startup costs or no cost at all.

Pick one that seems like a good fit for you and commit to taking action this weekend!

good side hustles from home to make extra money

13 Good Side Hustles From Home You Can Start This Weekend13 Good Side Hustles From Home You Can Start This Weekend

Source: biblemoneymatters.com

How Much Homeowner’s Insurance Should You Get When Buying a House

A house purchase accounts for a sizable net worth of a person. Just like any investment, insuring your house makes economic sense. Ideally the cover should help you rebuild and replace your belongings if disaster strikes. A good policy should also shoulder the financial burden arising from injuries that a third party might suffer within the property.

So, how much homeowner’s insurance should you get? When deciding on this, the following factors will come into play.

Replacement cost of the house

Fixing Your HomeFixing Your HomeYour house is insured on replacement basis. This means you will be reimbursed the equivalent cost of rebuilding your entire house or part of it that has been damaged.

To this end you should go for a policy whose limit will cover the current cost of rebuilding the house. It should take into account the cost of buying the same type of materials as well paying the labor at current prices.

The policy should also be flexible enough to account for possible changes in building regulations. Such include building code upgrades that may require some aspects of your house to be changed; say better foundations or a different drainage design.

Beware of policies that only cover the original value of a house. The premiums might be lower but they won’t cover any increase in labor or material costs. The payout will also be less the depreciation value of your home.

Deductible Amount

This is the out-of-pocket money that a policy holder must pay before the insurer settles a claim. It’s advisable to go for policies with high deductibles since they offer low insurance premiums.

A publication by Oregon Insurance Division shows that on average homeowners make a claim once in every 9 years. With this in mind, it makes sense to foot a higher deductible when disasters strike and save on monthly instalments in the long run.

Most insurance companies will increase your premiums or refuse to cover you in the future if you get into a habit of claiming reimbursement for minor damages. The move will ensure that you only file claims when the direst of disasters hit.

Location of your Home

Your policy limits will vary depending on the location of your home. Houses built on sloppy or hilly sites are deemed problematic. Same goes for homes at far off places like a heavily wooded area that may inaccessible to emergency services e.g. fire trucks.

Some locations and states are also flagged as high disaster areas. These include flood, earthquake or hurricane prone areas. If your house is located in such an area then expect to pay high limits on your policy.

Flooding accounts for the highest percentage of insurance claims from natural disasters. You should consider having a policy that addresses it; even if your zone is not susceptible to floods. This is according to Loretta Worters, the Vice President of Communications at Insurance Information Institute

Value of your Possessions

A detailed inventory of your belongings should give you an idea of what you stand to lose as a result of burglary or damage from a disaster. Normally, policies will insure possessions up to 75% of the home value.

You can insure your belongings on their actual value or that of replacing them. Replacement coverage attracts higher premiums but it makes more financial sense. This is due to the fact that most house possessions have a high rate of depreciation.

What Else to Consider

Having factored the above in your insurance calculations, the figure that you come up with should fall within a given margin. Take it upon yourself to find out the average cost in your state and specific city.

To give you an idea of what to expect let’s consider a home coverage of $200,000 with a $1000 deductible and a liability coverage of $100,000. A study showed that:

The national average falls at $1,228 with Florida and Louisiana having annual average rates north of $2900. Hawaii and Vermont attract the minimum coverage averaging at $589 and $337 respectively.

Pro Tip: Your policy limit can vary slightly from the average figure depending on the uniqueness of your home and possessions.

Conclusion      

Although home insurance is a must-have for every homeowner it needn’t be expensive. Lack of knowledge on the subject can land you on expensive policies that are not worth your property. Similarly, you may find yourself with a cheap cover that is inadequate for your property. The above information will guide you in deciding on the amount of insurance that you should get for your home.

Source: creditabsolute.com