60/40 Stock & Bond Portfolio – Guide to Asset Allocations, Pros & Cons

The stock market is a system that tends to follow tradition. Traditionally, investors have been expected to start young, build a buy-and-hold portfolio, and be careful with asset allocation in order to avoid high levels of risk.

Much has changed in investing over the past couple of decades with robo-advisors making moves for many investors, access to the market widely available through discount brokers, and a rise in short-term trading.

Still, many people feel more comfortable investing in the traditional ways, which is what makes the highly traditional 60/40 portfolio so popular.

Read on to learn about the 60/40 portfolio model, how to build one for yourself, and its pros and cons.

What Is the 60/40 Portfolio?

The 60/40 portfolio has been around for decades and is more of an investment strategy than a defined portfolio because there are no assets set in stone that build up the portfolio.

The strategy is based on a safe asset allocation strategy that has been used in retirement accounts for so long that it’s hard to pin down where it started or who first developed it.

The 60/40 portfolio strategy suggests 60% of your investment assets should be invested in equities like stocks, exchange-traded funds (ETFs), and mutual funds.

The other 40% of the portfolio’s assets should be invested in fixed-income securities like U.S. Treasury bonds, corporate bonds, and other debt securities that produce income through interest rates or a discount on the price of the security.

The idea is that by diversifying your portfolio across asset classes that experience different levels of volatility and risk, you’ll be able to access the gains the stock market provides during bull markets while minimizing losses during downturns or all-out bear markets.

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The Investment Thesis Behind the 60/40 Portfolio

The 60/40 portfolio is based on a strategy of diversification that many believe provides the perfect balance between risk and reward. The thesis is simple.

Most experts agree that it’s nearly impossible to time movements in the stock market, but they also agree that by avoiding stocks altogether, you’re robbing yourself of the opportunity to produce significant returns. Despite their inherent volatility, it’s important to maintain exposure to the stock market while working to balance the risk of those equities falling on hard times.

That’s where fixed-income securities come into play. These investments come with significantly lower risk. Once these securities mature, investors are paid back their entire initial investment amount.

The interest payments received throughout the life of the investment (or the difference between the price of buying the security and the price paid at maturity) acts as the return.


Who Should Take Advantage of the 60/40 Portfolio?

Because the 60/40 portfolio is highly customizable, it’s a great fit for just about any investor. As you’ll learn, the portfolio can be adjusted for different risk levels and investment strategies.

However, there is one concern with the portfolio. The strategy is based on a strict asset allocation of 60% equities and 40% fixed-income investments. However, many experts disagree on what an optimal asset allocation looks like.

Because your goals and appetite for risk are likely to change over time, many suggest using your age to determine the split between equities and fixed-income investments.

For example, instead of allocating 40% of your assets to bonds and other debt securities and 60% to equities in all cases, this variation on the strategy suggests if you’re 21 years old, you should allocate 21% to fixed-income securities and 79% to equities.

This variation involves adjusting your holdings as you age to include more fixed-income assets and fewer equities, becoming more conservative as you near retirement.

Ultimately, a 60/40 portfolio is a traditional, moderate-risk portfolio that could result in slower growth than other options. By following the 60/40 portfolio to the letter, your risk may be too heavily moderated or too aggressively accepted, depending on your age and investment goals.


Pros and Cons of the 60/40 Portfolio

As with any other portfolio strategy, there are pros and cons that should be considered before diving into the 60/40 portfolio.

60/40 Portfolio Pros

There are several reasons to consider following the 60/40 strategy in your own portfolio. Some of the most exciting aspects of the portfolio include:

  1. Diversified to the Max. The portfolio, although made up of only a few assets at most, is designed to be highly diversified, offering complete exposure to whichever sector of the market you prefer. The mix of underlying assets in each fund acts as an insurance policy against volatility.
  2. Fully Customizable. The portfolio doesn’t outline the exact funds you should invest in, just that 60% of your investments should be in equities and 40% should be in fixed-income assets. This leaves you the option to choose the investment strategy, level of risk, and asset exposure of the funds you buy within the predefined allocation. Few portfolios offer this level of customization.
  3. Evenly Balanced Risk. Through the strict asset allocation rule, risk is evenly balanced. While there are opponents to the idea of fixed allocation, this is a tried-and-true strategy that’s been used for decades.
  4. Easy Management. Finally, there are very few assets to keep track of here. This makes maintaining balance and managing your portfolio an extremely simple process.

60/40 Portfolio Cons

While there are plenty of reasons to be excited about deploying this portfolio strategy, there are also a few drawbacks that should be considered before diving in. They include:

  1. Fixed Allocation. Asset allocation is fixed at 60% stocks and 40% bonds, which is rather modest for younger investors and a bit risky for those nearing retirement. Most financial advisors suggest following a fluid allocation strategy that changes as your risk tolerance and goals change.
  2. Low Bond Yields. In recent years, the market has been experiencing historically low bond yields as a result of a low-interest-rate environment. By allocating such a large percentage of your portfolio to fixed-income investments, you could be missing out on much of the gains the bull market has to offer.

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.


How to Duplicate the 60/40 Portfolio

As mentioned above, the contents of a 60/40 portfolio aren’t set in stone. It’s more of a guide explaining how you may want to go about asset allocation that can be applied to several different investment strategies.

As a result, there are several ways to go about building the portfolio — a task made easier by the abundance of low-cost ETFs on the market today.

Here are six popular ways to build a 60/40 portfolio for yourself based on your investing strategy and risk tolerance. The funds mentioned here are low-cost Vanguard index funds, but you can choose any fund you like that gives you exposure to the same types of assets.

The Low-Risk 60/40 Portfolio

For investors with a low risk tolerance who want access to the market as a whole, the build of the portfolio is best as follows:

  • 60% in Vanguard Total Stock Market Index Fund ETF (VTI). One of the most diversified ETFs on the market today, the VTI is designed to give investors exposure to the total United States stock market. The past performance of the fund has been stellar, beating others in its category relatively regularly over the past 10 years.
  • 40% in Vanguard Intermediate Term Treasury ETF (VGIT). The VGIT is focused solely on intermediate-term, high-quality U.S. Treasury securities. While these government bonds come with relatively low yields compared to longer-term options, their yields are stronger than short-term bonds and liquidity is reasonable.

The Moderate-Risk 60/40 Portfolio

While the low-risk 60/40 portfolio is a great option for many, investors know that the lower the risk associated with the investment, the lower the potential for gains.

One great way to slightly increase the risk while greatly expanding your earnings potential when using this portfolio strategy is to include international stocks in your equity holdings and swap out Treasury bonds for corporate bonds in the bond portion of the portfolio.

Here’s how that looks:

  • 60% in Vanguard Total World Stock ETF (VT). The VT ETF fund was designed to provide exposure to a highly diversified list of stocks, both in the U.S. and around the world. While the international side of the portfolio increases the risk, it also increases potential profitability, as emerging market growth tends to outpace growth in established markets like the United States.
  • 40% Vanguard Total Corporate Bond ETF (VTC). On the bond market, corporate bonds are known for paying higher yields than Treasury bonds but do come with increased risk. By investing in the VTC fund rather than VGIT, it’s possible to increase the earnings on the fixed-income side of your portfolio.

The High-Risk 60/40 Portfolio

Finally, if you’re willing to accept higher levels of risk, the potential returns of the 60/40 portfolio can be increased by including some different asset classes into both the equity and fixed-income sides of the equation.

Among your equities, consider mixing in some small-cap holdings. Small-cap stocks are known for high levels of volatility and risk, but they’re also known for the potential to outpace the returns of their large-cap counterparts.

On the fixed-income side, look into real estate investment trusts (REITs). These real estate investments are riskier than bonds but have much greater potential to increase your profitability while providing a source of predictable returns in the form of exceptional dividends.

Adjusting the portfolio for a high-risk investor is as simple as investing in the following funds:

  • 30% in Vanguard Total World Stock ETF (VT). The VT fund remains an anchor in this investing strategy, providing access to a diversified group of U.S. and international holdings. This fund should represent about 30% of your holdings in the high-risk rendition of the 60/40 portfolio, or half of your equity allocation.
  • 30% in Vanguard Small-Cap ETF (VB). The VB fund is made up of a diversified group of small-cap stocks, providing exposure to high-growth opportunities in smaller companies. This fund takes the other 30% allocation on the stocks side of the portfolio in this model.
  • 20% in Vanguard Total Corporate Bond ETF (VTC). About half of your fixed-income allocation, or 20% of the total portfolio, should be invested in the VTC fund to gain exposure to corporate bonds.
  • 20% in Vanguard Real Estate ETF (VNQ). Finally, the VNQ fund is an index made up of investable REITs, which gives you broad access to real estate investments while maintaining diversification within the asset class. This fund takes up the other half of your fixed income allocation, representing 20% of the portfolio.

The Growth 60/40 Portfolio

If you’d rather focus on a growth strategy than simply making bucket investments in diversified groups of equities, the growth 60/40 portfolio is the way to go. Here’s what it looks like:

  • 60% in Vanguard Growth Index Fund ETF (VUG). The VUG fund was designed to provide diversified exposure to U.S. large-cap growth stocks. These are companies that have a proven history of generating significant growth, but provide a level of safety in that they are all large-cap, established companies. In the growth rendition of the portfolio, this fund represents 60% of your investment allocation.
  • 40 % Vanguard Intermediate-Term Treasury ETF (VGIT). The other 40% of the portfolio would be invested in the VGIT, offering stability through intermediate-term Treasury securities.

The Value 60/40 Portfolio

If you’re following a value investing strategy, the best way to take advantage of this portfolio is to invest the stock portion of your assets into a value-centric fund like the Vanguard Value Index Fund ETF (VTV).

This fund provides diversified exposure to large-cap value stocks, meaning these are large-cap companies with valuation metrics that suggest they’re trading at a discount.

You can then invest the remaining 40% of your assets using the VGIT for your bond holdings.

The Income 60/40 Portfolio

Finally, those focused on income investing can also take advantage of this portfolio with one small tweak. As with the traditional 60/40 portfolio, 40% of your assets should be allocated to the VGIT, providing safety through investments in intermediate-term Treasury securities.

The other 60% of the portfolio should be invested in the Vanguard High Dividend Yield ETF (VYM). The VYM is made up of a wide range of stocks known for paying high dividend yields.

By investing in the fund, you’ll gain diversified exposure to stocks of all sizes in various sectors that all have one thing in common — they all have a history of offering investors a high dividend yield. That’s music to an income investor’s ears.

Pro Tip. M1 Finance offers expert pies designed around several portfolio strategies, including the 60/40 portfolio. If you’re not interested in building your own, use a prebuilt expert pie on M1 Finance to add the portfolio to your holdings.


Keep Your Portfolio Balanced

Regardless of which rendition of the 60/40 portfolio you choose to go with, it’s important to make sure to maintain balance. The entire thesis behind the portfolio is to provide meaningful returns while creating a safety net by balancing higher-risk equities with lower-risk fixed-income investments.

As time passes, some investments will rise in value and others may fall. As a result, your investment portfolio will fall out of balance. If the balance becomes too skewed, the portfolio may fail to meet your investment objectives.

The good news is that the 60/40 portfolio strategy is a buy-and-hold strategy, meaning you won’t be required to rebalance your portfolio monthly. However, it is best to take a look at your portfolio on at least a quarterly basis.

Moreover, with so few assets, maintaining balance is a relatively simple process. When one asset grows to take up more than its allotted percentage, simply sell a little of it and buy more of its counterpart to bring the portfolio back to the 60/40 balance.


Final Word

There’s a reason the 60/40 portfolio is one of the most talked-about strategies on Wall Street. For decades, investors have been deploying this strategy, which has worked to build wealth over time.

However, as times change, the traditional investing models are being replaced with newer, more fluid options. While the traditional 60/40 concept has been a go-to for some time, it’s not the best fit for all investors, nor is it optimized for investing during a bull market where bond yields are chronically low and stocks are on the rise.

Nonetheless, when markets are flat or falling bearish, and you feel a safer approach is best, the portfolio is a great fit. Moreover, if you’re willing to take the time to customize and are interested in REITs rather than heavy bond allocation, the portfolio can be adjusted to fit your needs.

Source: moneycrashers.com

12 Ways to Increase Rental Income From Your Vacation Home

Bought a vacation rental and wondering how to maximize your income from it?

First and foremost, shift into the mindset of an entrepreneur in the hospitality industry. You’re a businessperson now, and you need to think like one. In particular, focus on creating a strong product, marketing it, and building efficient business processes.

Ways to Increase Your Vacation Rental Income

Vacation rental properties rarely offer truly passive income. Even if you outsource property management, you still need to manage the manager. Instead, think of your vacation rental property as a side business you operate in addition to your full-time job.

Once you start approaching your vacation rental as a hospitality business, you can start optimizing that business to earn more revenue with less labor on your part.

1. Start With Strategic Finishes

After purchasing the property, your first project is putting it into marketable shape as quickly as possible. That includes any needed repairs, updates, and improvements. Don’t go overboard, but look for any obvious indicators of age in the property, including anything that looks dated or unattractive.

You should also be planning out your automation processes at this point, because they may impact your property updates. For example, you may decide to install a smart lock or key code lock on the front door (more on that later).

Think about any other smart home upgrades that may improve your marketing. Would guests feel more comfortable with a smart security system in place?

As you plan out your property’s finishes, keep resiliency in mind.

Aim to “tenant-proof” your property as much as possible, with scratch- and waterproof flooring such as luxury vinyl tile and door stoppers behind each door. Consider semi-gloss or glossy paint finishes to more easily wipe away scuffs, and use the same paint color throughout for easy touch-ups.

Your guests won’t be gentle with your property, so make it as indestructible as possible.

When your property repairs and updates are finished, it’s time to furnish and decorate it. You don’t need to buy furniture new; no guest expects to be the first person to have sat on the couch. But furniture needs to be tasteful and in good condition.

A word to the wise: Don’t decorate blandly. You are not operating a hotel, and one of the reasons guests choose to stay in a privately owned vacation home over a hotel is to get a more authentic experience. Tie in some local flavor and add a bit of your own personality.

Draw the line at political statements, though. I once stayed in an Airbnb filled with political posters and found them to be obnoxious and unprofessional.


2. Automate & Systematize Guests’ Stay

The less your guests must rely on you personally, the smoother their stay will be for both of you.

Find a way to automate guests’ check-in and checkout process, particularly their access to the unit. That could mean a smart door lock, a keypad lock, a lockbox, or keys left with a community office or doorman.

Note that smart door locks don’t have to cost an arm and a leg. You can buy the ULTRALOQ U-Bolt Pro for under $200, or go a little lower-tech with the AmazonBasics keypad lock for under $50.

Self-entry allows guests to arrive on their own schedule, rather than wasting both of your time in coordinating entry with you present.

But systematizing your renters’ stay doesn’t end at physical entry. You also need to plan for other frequent needs, such as gaining Wi-Fi access, and make them extremely intuitive and easy for your guests.

Create a concierge document that starts with bullets for the most common issues, such as the Wi-Fi network and password. You can then direct guests to longer explanations as needed. Consider a Google Document that you can both print physically for the unit and send a link digitally to guests before they arrive.

Automate this communication with guests. Create automated messages that go out to guests 48 hours before their arrival that include details like how to access the property, Wi-Fi information, and how to use any confusing appliances. Your concierge document can also include tips for local restaurants, attractions, and other entertainment.

As you systematize your vacation rental business, create policies for every contingency. That includes lost key policies and fees, late checkout procedures, pet policies and fees, your maid or cleaning service (which can be set up quickly through Handy.com), and backup contacts for times when you aren’t available.

In addition to operating a hospitality business, you also face standard landlord headaches like property repairs. Prepare for maintenance by building a network of contractors you can contact for immediate service, to minimize the risk of bad reviews and losing Airbnb guests over maintenance issues.


3. Perfect Your Pricing

One of the most fundamental building blocks for success as an Airbnb host is pricing.

To begin, ignore what long-term rental properties charge for monthly rents. Rather, look at them, but only to run a comparative cash flow analysis to determine which leasing model would generate more profit for your property.

Your competition as a vacation rental operator doesn’t include long-term rentals, but rather hotels and other comparable vacation units. Get a sense of what hotels and similar vacation rentals charge in your immediate area. Consider aiming for around 20% less on a nightly basis than nearby hotels.

Keep in mind that your pricing can and should rise as you establish yourself and your unit.

In the beginning, with few or no reviews, you’ll probably need to entice your first guests with bargain pricing. Once you establish legitimacy through reviews, you can raise your pricing to meet or slightly surpass nearby competitors. (More on building reviews shortly.)

Remember, pricing doesn’t end at your nightly rate. It also includes your cleaning fee, additional guest fees, pet fees, and any other fees you charge. By all means, charge a cleaning fee, but don’t use it as a backdoor gimmick to charge higher rates. Price it based on your actual cleaning fees, and keep your nightly rates transparent.


4. Incentivize Longer Stays

As with long-term rentals, the greatest labor and costs in managing short-term rentals come from turnovers. From cleaning to coordinating access with guests and answering their questions, it costs far more time and money to rent to 10 guests in a one-month period than to a single guest staying for an entire month.

What’s more, short bookings can actually cost you the more lucrative longer bookings. If someone rents your unit for one night, it prevents a prospective two-week guest from being able to book your unit for that block.

So, price accordingly. Charge a higher nightly rate for stays under a week, and then offer a discount for guests who stay at least seven days. Keep graduating that discount the longer they stay, up to a month.


5. Consider Pet-Friendly Policies — For a Price

Pet owners often have a hard time finding hotels and vacation rentals that accommodate their four-legged family members. That means a shortage of supply, which in turn creates an opportunity.

There’s certainly no shortage of demand. More than two-thirds of American households own a pet, according to the 2019-2020 survey by the American Pet Products Association.

Of course, pets cause more wear and tear on your rental property. That means you should charge extra for them to make it worth your while.

By accepting pets, you can not only collect more money on a nightly basis, but you can also attract more potential guests and achieve higher occupancy rates. And in the vacation rental business, profits come down to occupancy.

Young Woman Wearing Sweater Cuddling Pet Cat


6. Take a Multipronged Approach to Marketing

Putting together the perfect vacation rental listing is both an art and a science. Start your marketing with a killer rental listing.

First, hire a professional real estate photographer to take photos. It’s less expensive than you think, and it’s a one-time marketing expense that will continue paying off for years to come.

Photos should include several shots from different angles of each important room in the home. Pay particular attention to the kitchen, living spaces, bedrooms, and bathrooms. Show the photos to someone who has never been inside your property and ask them if they can visualize the layout and space.

Feature a few exterior shots as well, including the front of the property and any outdoor living spaces.

When filling out your listing profile, tick off each amenity, and select the bed sizes for each bedroom. Then in your written description, emphasize the property’s best features, and mention the most important amenities again.

If your location is a selling point, emphasize that as well. Include highlights like “Five-minute walk to the waterfront!” or “One block from the metro station!” Mention specific landmarks and tourist attractions nearby to boost your search rankings within vacation rental platforms — more on that momentarily.

Although Airbnb is the undisputed leader in the online vacation rental space, it is not the only player. Advertise your unit for rent on multiple platforms, including VRBO, Booking.com, and Craigslist. A previous player in this industry, HomeAway, was acquired by VRBO and merged in 2020.

But don’t stop there. Research ways you can market your vacation rental on social media, such as through local tourist groups on Facebook, or even paid Facebook ads.

The better your marketing reach, the higher your occupancy rate will be, which ultimately determines your bottom line.


7. Optimize for Search Rankings

Imagine your vacation rental is one of a hundred available in its neighborhood. A prospective guest logs into Airbnb and searches for units in that neighborhood — which ones does Airbnb display first, at the top of the page rather than buried at the end of that long list?

Vacation rental platforms have their own search algorithms, just like Google does. If you want your listings to appear first, you need to take pains to optimize for those algorithms.

First, listing platforms reward responsiveness. The faster you respond to inquiries, the higher the platforms will list your unit. Make it a priority to respond as quickly as possible, and if you can’t give prospects a precise answer immediately, at least reply back with a quick “I’ll check into that and follow up with you shortly.”

As with Google, click-through rate matters. That refers to the percent of users who see your listing title who actually click on it. So, boost your click-through rate by putting thought into your listing titles to make them irresistible. Your thumbnail photo also helps your click-through rate, so make it gorgeous.

Accept instant bookings, rather than requiring prospects to wait until you’ve manually reviewed them. Listing platforms include this as a search filter, so many prospects will never even see your listings if you don’t accept instant bookings.

Keep your calendar up to date. Airbnb rewards recency — the more recently your calendar was updated, the better.

Likewise, keep your listings up to date. Every two or three months, tweak your listings, perhaps to emphasize seasonal attractions in your area. This also makes a great time to review your listing for completeness within the listing platform, which also impacts your search rank.

“Completeness” refers to the percentage of available fields and selections that you’ve filled out. Even if you filled out every field before, they don’t remain static — listing platforms constantly add new features and options, and you need to stay current with them if you want your listings to appear before alternatives.

Be sure to mention local attractions in your listing description because some prospects search specifically for easy access to famous landmarks or other attractions. You want to make sure your listing appears front and center for those who do.

And, of course, the more positive ratings and reviews you have, the more platforms reward you with higher rankings.


8. Accrue Reviews ASAP

You can put together the best listing in the world, but if you have no reviews, guests will be reluctant to book with you.

Start with a simple two-pronged approach to scoring reviews. First, price your property competitively to beat your competition if you don’t have many reviews. Second, put together a guest follow-up strategy for securing reviews.

That strategy should include asking no fewer than three times for a review.

Mention it at the end of your checkout instructions message, then again in a post-checkout message thanking them for staying with you. Then leave a review for them as well, and message them to let them know you left a glowing review for them, and ask them if they would be willing to do the same if they enjoyed their stay.

Your goal is to reach 10 positive reviews as quickly as possible. When prospective guests see reviews in the double digits, they feel more confident in booking, and your occupancy rate will rise.


9. Create an Experience

As outlined above, you can and should automate your booking, check-in, and check-out processes as much as possible. Aim to make them so easy an 8-year-old could do it.

Send a series of messages out on an automated schedule. Spell out everything the guest needs to know about getting into your property and staying there comfortably.

Assemble a concierge document about how to use the various appliances in your unit, the best local restaurants, and standout local attractions. Mention both the famous nearby amenities they already know about and the insider scoop on local secrets.

For example: “Drop by the Bulldog for an iconic Amsterdam bar experience, but then walk over to Door 74, a tiny, hidden speakeasy with no signage and a Prohibition-era vibe.”

It’s those more unique guest experiences your renters will remember and rave about later both publicly in their reviews and privately to their friends.

Leave a bottle of wine or some other gesture that they wouldn’t receive at a hotel. You don’t need to spend much money on it, and half your guests won’t drink it anyway, but it makes a great first impression. Underneath it, leave a brief handwritten note welcoming them by name. And, of course, chocolates on the pillows don’t hurt either.

People remember the little things, the small touches that remind them why they chose an alternative to bland corporate hotels.

Bottle Of Wine Rose Red Woman Relaxing At Home Sofa Barefoot


10. Explore Co-Hosting

If you manage your own vacation rental, and other nearby units also serve as vacation rentals, start networking with the other neighboring owners. You can co-host for each other, or simply have one owner co-host for all the neighborhood units as a side hustle.

Co-hosts share property management responsibilities, such as communicating with guests, managing check-ins and checkouts, coordinating repairs, and more. See Airbnb’s explanation for a full list of responsibilities that co-hosts can perform. In compensation, the primary host can pay co-hosts a percentage of the nightly rate, a percentage of the cleaning fee, or both.

They can make an affordable and convenient way to outsource management, whether temporarily — for example, while you’re on vacation — or permanently. Or, if you live near the units yourself, co-hosting for neighboring vacation rentals offers an easy side gig to earn some extra money on other people’s properties.


11. Protect Yourself & Your Property

One way to protect your property is to physically make it damage-resistant, as mentioned above. But protection doesn’t end there.

Think carefully about the security deposit you charge. Charge as much as you think you can without scaring off guests.

Platforms such as Airbnb include some protections for hosts, and you should familiarize yourself with them. If you don’t use a platform and rent independently, look into other ways you can protect against damage, such as preauthorizing the guest’s card for an additional damage deposit, but not running the charge unless they cause damage.

But your guests aren’t the only people you need to worry about. If you buy the property with a family member, friend, or other partner, it inevitably causes conflict to one degree or another.

The most common disputes involve one partner wanting to use the property more often than the others, financial disputes over expenses, and disputes when one owner wants to sell and the others can’t afford to buy them out.

I’ve seen all of these disputes play out in my own family, and can attest firsthand to how vicious they can get — vicious enough to permanently poison relationships, even close family relationships.

Protect yourself by signing an agreement with your partners upon buying a property detailing exactly how you’ll split revenue, responsibilities, and access to the property, and spelling out the process you’ll follow if one partner wants to sell while others don’t.

A little foresight today can save a lot of stress and infighting tomorrow.

Further protect yourself with contingency plans in the event that laws or market conditions change.

Local regulation presents a real threat to vacation rental owners — cities like New York, San Francisco, and Santa Monica all but outlaw private properties being offered to short-term guests. Your city could change its regulations at any time, and you need a backup plan to protect against such seismic shifts.

Run the numbers to calculate how your property would create cash flow as a long-term rental, as one contingency plan. As another, look into leasing your property as a furnished corporate rental, for example, to travel nurses.

As a last resort, you can always sell the property, but it typically takes a few years for properties to appreciate enough to cover the closing costs from both the initial purchase and the eventual sale. But always have contingency plans in place, to protect against losses if conditions change.


12. Optimize Your Taxes

Vacation rental owners can benefit from both investment property tax breaks and small business tax breaks.

As a business owner, you can deduct expenses that you might otherwise have to itemize in order to take, allowing you to take the standard deduction while still deducting specific expenses. For example, you could potentially deduct for travel, home office, and charitable donations from your business, all while still taking the standard deduction. Just be careful not to get carried away and trigger an audit with the IRS.

Meanwhile, real estate investors get their own tax benefits. You can deduct costs from property management to maintenance, utilities to depreciation.

Beware, however, that a few cities — such as Santa Monica — require vacation rental owners to pay additional taxes. Make sure you include that expense when you run the cash flow numbers before you invest in a vacation rental in one of those cities.


Final Word

It’s a fun idea to own a vacation rental you can occasionally use yourself while earning some extra income.

But in many markets, it remains a competitive industry, and often property owners find themselves losing money at the end of the year without enough occupancy, particularly during slow seasons.

Always run conservative numbers when you calculate cash flow, and never lose sight of the fact that the property is an investment. Don’t get attached to any given property, or even to the idea. In real estate as well as stocks, emotion is the enemy of investing.

Even if the cash flow numbers work for a prospective vacation rental, run them for contingency plans such as using the property as a long-term rental. You never know when market conditions will change; look no further than the collapse of the travel industry in 2020 during the coronavirus pandemic and the energetic rebound in 2021.

Source: moneycrashers.com

9 Simple Ways to Save Money on Laundry Costs

When Benjamin Franklin said nothing in the world is certain except death and taxes, he obviously forgot about laundry. Laundry expert Mary Marlowe Leverette, writing for The Spruce, says the average American family does eight to 10 loads of laundry per week — more than one load every day.

Fortunately, thanks to the automatic washer and dryer, washing all those loads is a lot easier now than it was in the days of the washtub and scrub board. But given the cost of electricity, water, and detergent, it’s also a lot more expensive.

Fortunately, with just a few easy tricks, you can cut the cost of your weekly wash by half or even more. And don’t worry. None of them involve hauling your clothes to the nearest river and beating them against a rock.

Ways to Save Money on Laundry

Your best strategies for saving money on laundry depend on where and how you do your washing.

If you use a coin laundromat, what you pay per load is pretty much fixed. You can save some money by cutting the cost of the products you use, like detergent and fabric softener, but your best bet is to do laundry less often.

However, if you wash at home, your choices make a big difference. The type of washer you have, the water temperature, and how you dry your clothes all affect your bottom line.

1. Wash Fewer Loads

The No. 1 tip for cutting your laundry costs is to wash fewer loads. When you wash at home, this single strategy automatically cuts your costs on everything at once — water, electricity, detergent, and heat for drying. It also saves wear and tear on your washer. And it’s one of the few strategies that also works at the laundromat.

There are two primary ways to reduce the number of loads you do. The first is to wash full loads as much as possible. That’s particularly crucial for laundromat users. At home, you can save some water and energy when doing a small load by choosing a lower water setting. But at the coin laundry, you pay just as much for a small load as for a large one.

To keep your costs down, save your laundry for a week or more and do it all in one large load. If you just don’t have enough clothes to wait that long for laundry day, try sharing a load with a friend or neighbor.

The other way to cut the number of loads is to wear your clothes more than once between washings. According to the American Cleaning Institute, you only need to wash some items, such as T-shirts and underwear, after every use. You can wear others, such as jeans or dress shirts, several times before laundering. You can use bath towels three to five times before washing, and bedsheets can stay on the bed for up to two weeks.

How much you save with this tip depends on what you’re paying now for laundry. If you’re an apartment dweller in New York City, you could pay as much as $3.50 to wash a load of laundry and around $1 to dry it, according to Culture Trip. Thus, cutting back from two loads of laundry per week to one would save you $4.50 per week — over $230 per year.

But even if you wash your clothes at home, doing fewer loads is still a money-saver. According to ClearlyEnergy, the average cost of a home-washed load ranges from $0.24 to $1.08. That means your yearly savings for cutting out one load per week would be $12.48 to $56.16.

As a bonus, washing your clothes less often also helps them last longer. So you can cut your annual budget for new clothes too.

2. Use Cold Water

About 80% of the energy a washer uses is for heating the water, according to ClearlyEnergy. Thus, one of the quickest ways to cut your laundry cost is to wash clothes in cold water as often as possible.

Don’t worry that cold water won’t get your clothes clean enough. According to the U.S. Department of Energy (DOE), only oily stains really require hot water to remove them. Consumer Reports also recommends using hot water plus bleach for cloth diapers and the germ-laden sheets and towels of a sick family member. For everything else, warm or cold water does a perfectly adequate job.

You don’t necessarily need a special cold-water detergent to get your clothes clean on the cold setting. According to Consumer Reports, modern detergents are actually better at removing dirt and stains in low temperatures than higher ones.

3. Change Your Detergent

The best laundry detergents aren’t always the most expensive. In a 2021 comparison test by Good Housekeeping, the top performer was Persil, which costs around a quarter per load. However, the store brand from Costco did almost as well on most stains for just $0.12 per load.

For a family that does eight loads of laundry each week, switching from Persil to the Costco brand would save over $115 per year. That’s more than enough to make a Costco membership worth the cost.

Some frugal-living bloggers suggest making your own laundry detergent as a way to save money. Homemade detergents usually contain a mix of soap, borax, and washing soda. HouseLogic tested three DIY recipes costing $0.06 to $0.10 per load and found that all of them got clothes clean. They even did a better job on mustard stains than a commercial detergent.

However, homemade laundry detergents can cause problems for users who have hard water. According to detergent maker Dropps, these products can react with minerals in the water, leaving residue on your clothes. They can also leave buildup on the washing machine itself, leading to mold and mildew growth.

Also, making your own detergent takes time. If you spend half an hour mixing a 50-load batch, and you save $0.05 per load by using it instead of the Costco brand, then your total savings is $2.50 for half an hour of work. That works out to only $5 per hour, significantly less than minimum wage.

A quicker way to save on laundry detergent is to look for sales and coupons. For example, at stores in my area, liquid detergent sometimes goes on sale for $1.99 for a 33-load bottle — just over $0.06 per load. Adding a $0.50 coupon cuts the price to $1.49, less than $0.05 per load. You can also frequently find savings on detergent through the Ibotta app.

4. Use Less Detergent

Another way to cut your detergent cost is to use less. According to another of Leverette’s articles on The Spruce, the amount of detergent you need could be much less than the amount marked by the fill line on the cap or scoop. The amount you need depends on your detergent type, washer type, and water.

If you have standard water, you need about two tablespoons of 2X concentration liquid or one-third to one-half a cup of powder to clean a standard load (12 to 15 pounds). You can use half as much if the concentration of the detergent is 4X and one-fifth as much if it’s 10X.

If you have softened water, you should cut all these amounts still more. Use about one and a half tablespoons of 2X detergent and less for more concentrated liquids. On the other hand, you should increase the amount by about 25% for untreated hard water.

With a high-efficiency washer, you need even less detergent. It takes only two teaspoons of 2X liquid (one and a half teaspoons in softened water) to clean a standard load. With powdered detergent, use two tablespoons. You can use a marker to indicate the correct volume on the detergent bottle cap so it’s easy to measure.

And in some cases, you can get laundry clean without using any detergent at all. When The Straight Dope ran a test in 1997 to see whether detergent-free laundry balls were effective, they found that clothes washed with plain water got just as clean as those washed with Tide.

Using more detergent than you need is more than just a waste of soap. For one thing, according to Consumer Reports, it can trigger the washer to use an extra rinse cycle, wasting water.

Excess detergent can also harm your clothes or your washer. It can leave a residue on your clothes, making them feel soapy, sticky, scratchy, or stiff. Clothes may look dull or grayish. And buildup on the washer can lead to must or mildew, just as with homemade detergents.

So if your clothes or washer show any of these symptoms, use less detergent. Cutting your detergent use by half can cut the cost of the top-rated Persil detergent from $0.40 per load to $0.20. At eight loads per week, that’s a savings of $83.20 per year.

5. Skip the Fabric Softener

Another laundry product that can cause problems with your clothes is fabric softener. According to another Spruce article by ​​Leverette, both liquid fabric softeners and dryer sheets work by adding a lubricating coating to fabric that makes it feel softer on your skin. But if you use too much, it can leave stains on your clothes.

In fact, according to Martha Stewart, you shouldn’t wash some clothes with a fabric softener at all. Using it can reduce the absorbency of towels and the moisture-wicking properties of workout clothes.

To soften clothes without buildup, try distilled white vinegar instead. Just pour half a cup into the fabric softener dispenser or add it by hand during the rinse cycle.

Vinegar doesn’t harm fabric and leaves no odor behind. In fact, it can actually help remove odors from laundry and brighten both white and colored clothes. And at less than $2 per gallon, it’s cheaper than commercial fabric softeners.

If you’ve been relying on dryer sheets to eliminate static cling, there are chemical-free solutions for that too. One alternative is wool dryer balls. According to Real Simple, they reduce static and wrinkling and help keep clothes separated as they dry. That can cut drying time by 10% to 25%.

A set of wool dryer balls costs around $6 and lasts for about 1,000 loads of laundry. That works out to $0.006 per load compared to around $0.02 per load for Bounce dryer sheets. To save even more, you can make your own dryer balls from leftover woolen yarn.

An even cheaper fix for static cling is a ball of aluminum foil. According to CNET, the foil balls help discharge static electricity in the dryer and can also cut drying time. Three balls of foil cost around $0.15 and last for months. However, they won’t soften clothes like a dryer sheet.

6. Upgrade Your Washer

Modern high-efficiency washers bearing the Energy Star logo are much more efficient than old-fashioned top-loaders. These energy-efficient machines use less water and electricity and spin more water out of clothes, so they spend less time in the dryer.

ClearlyEnergy crunched the numbers to see how much upgrading your old top-loader could save you on both washing and drying. It found doing 392 loads of laundry per year in a standard top-loader costs $210. That includes $103 for water, $37 for electricity to run the washer, and $70 to run the dryer.

Switching to an Energy Star top-loader cuts all these costs by a lot. It uses only $55 worth of water, $17 for electricity, and $46 for drying for a total of $118. A front-loading Energy Star washer costs even less to run: $42 for water, $14 for electricity, and $41 for drying, or $97 total. That’s a savings of over $110 per year.

Unfortunately, to cash in on this yearly savings, you have to spend a big chunk of change upfront. The best-reviewed front-loading washer at Good Housekeeping is a GE priced at around $1,080, which means it would take nearly 10 years to pay for itself in lower energy bills. (People who wash more loads or always use hot water could see a faster payoff.)

However, if your old washing machine has just died and you’re shopping for a new one, it makes sense to choose an Energy Star model. According to Consumer Reports, the cheapest washers on the market cost around $400, $680 less than the top-rated GE model. But the GE’s lower energy costs would make up the price difference in roughly six years.

If you switch to a high-efficiency washer, use a detergent designed to work with it. According to Whirlpool, these machines require high-efficiency detergent that produces fewer suds and disperses quickly, making it effective with less water. To find these detergents in the store, look for the lowercase letters “he” in a circle on the label.

7. Cut Drying Time

There’s no point in continuing to run your dryer after the clothes are dry. It wastes energy and can damage clothing and cause shrinkage, according to Better Homes & Gardens.

To avoid overdrying, don’t use the timed cycle on your clothes dryer. Most dryers have a moisture sensor to detect when clothes are dry and shut the machine off automatically.

To make the best use of the moisture sensor, separate your clothes. Wash and dry heavy fabrics, such as blue jeans and towels, in a separate load from lightweight shirts and underwear. That lets each type of fabric dry at its own rate and reduces wear and tear on clothing.

Another thing that can hamper your dryer’s moisture sensor is buildup from dryer sheets. Consumer Reports recommends rubbing the sensors with rubbing alcohol every few months to remove residue if you use them. Check your dryer’s manual to see where the sensor is.

Another way to keep your dryer working efficiently is to clean the lint filter. When it’s clogged, air can’t flow freely and clothes take longer to dry. Just pull the filter out and peel off the accumulated lint after each load you dry.

And check the dryer vent every few months to ensure there’s no lint blocking it. Keeping a clean vent saves energy and helps prevent fires. Just unplug the dryer, pull it out from the wall, and disconnect the vent. Use the crevice attachment on your vacuum cleaner to remove any accumulated lint.

8. Try Line-Drying

You can save even more money by skipping the dryer completely and drying clothes on a clothesline or drying rack. According to The Spruce, drying a single load of laundry in an electric dryer costs about $0.45. (If you use a gas dryer, the cost is probably lower.) If you wash eight loads per week, switching to line-drying could save you about $187 per year.

Using an outdoor clothesline makes you dependent on the weather. You can’t hang-dry your clothes outdoors if it’s raining or if it’s so cold the wet clothes would freeze. But even if you can only line-dry half your laundry loads, that’s still a savings of about $94 per year. And if you have room for a large indoor drying rack, you can air-dry clothes all year long.

Another downside of line-drying is the extra time it takes. When I line-dry my clothes in the summertime, it takes me about 25 minutes to hang them on the line, plus another five minutes to take them down when they’re dry. That’s half an hour of my time to save less than $0.45 for using my gas dryer. If hanging my laundry were a job, it would pay me less than $0.90 per hour.

To me, the extra time I spend on line-drying is worth it because I enjoy the fresh air and activity. But I also do only one or two loads of laundry each week. If I washed eight to 10 loads per week like the average American family, it would take me over four hours each week to hang them all.

On the plus side, air-drying your laundry is easier on your clothes. Think about it: All that lint you remove from your dryer screen is bits of the fabric worn off by the tumbling action of the dryer. So line-drying also helps you save money on your wardrobe by extending the life of your clothes. Additionally, it reduces wrinkling, prevents static cling, and gives clothes a clean, fresh smell.

However, using an outdoor clothesline also allows dust and pollen to accumulate on your clothes as they hang dry. Fortunately, it’s easy to remove them. Just run the line-dried garments through the dryer for five minutes without heat. The lint trap catches all the dust, and the brief tumbling doesn’t cause too much damage to the fabric.

9. Wash at the Right Time

You can also cut your laundry costs by finding out whether your utility has time-of-use pricing. That means the company charges more per kilowatt-hour (kWh) during peak hours, when the demand is highest. That encourages customers to shift their power use to low-demand periods, reducing the strain on the electric grid.

For instance, Orange & Rockland Utilities has a summertime plan with three different periods. Customers pay around $0.32 per kWh during peak hours between 12pm and 7pm on weekdays. During “shoulder peak” hours from 10am to 12pm and 7pm to 9pm, they pay $0.11 per kWh. And during the nights and weekends, they pay just $0.02 per kWh.

Customers of this utility can save money by doing their laundry on weekends or between 9pm and 10am on weekdays. Based on ClearlyEnergy’s estimates for the amount of electricity required per load of laundry, a user with a standard-efficiency washer would pay around $321 per year doing laundry during peak hours. Switching to nights and weekends would cut that cost to about $21 — a $300 savings.


Final Word

The more of these laundry tips you use, the more money you can save in the laundry room. However, the single strategy that offers the biggest bang for your buck is to do fewer loads. Reducing the average family’s eight loads of laundry per week to four would cut their laundry costs in half instantly and save time as well.

The next-best tip is probably washing clothes in cold water. It cuts energy use by 80% instantly, doesn’t take any extra time, and doesn’t involve any sacrifice of cleanliness. And since many coin-operated laundries charge less for loads washed in cold water, it’s a tip that can work for laundromat users too.

As a bonus, most of these money-saving tips are good for the environment as well. Strategies like doing fewer loads, using cold water, using an Energy Star washer, and line-drying save energy and help reduce your carbon footprint. So you can feel good about living green while keeping a little more green in your wallet at the same time.

Source: moneycrashers.com

Beast Mode Goes Into Sales Mode: Marshawn Lynch Lists Bay Area Home for $5.3M

The former NFL running back Marshawn Lynch hopes to hand off his home in Point Richmond, CA, to a new owner. The waterfront abode in the East Bay is now on the market for $5,275,000.

The All-Pro purchased the unique property in 2012 for $3.6 million. If he lands his asking price, the star player will pocket a sizable profit—which isn’t an unreasonable goal in the perpetually heated Bay Area housing market.

There aren’t many comparables for this home on a tiny spit jutting out into the San Francisco Bay. A smaller home nearby sold in January for the more modest price of $2.45 million, or $545 per square foot. The current price per square foot on Lynch’s luxe abode is a more robust $749.

We’ll see if the Skittles-loving running back can manage a sweet sale.

Set directly on the water, the 7,039-square-foot modern design from 2000 gives an owner the sense of life on a houseboat. Water views are visible everywhere, thanks to the walls of glass and open floor plan.

With its five bedrooms and 5.5 bathrooms, the handsome home boasts high ceilings, natural light, and picturesque Bay views from multiple decks.

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Watch: QB Carson Wentz Quits This Gorgeous New Jersey Home

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The living area sports a semicircular sectional sofa facing out toward the water, with a second sectional facing the opposite direction toward a TV wall. Above, a mezzanine overlooks the living area and currently contains sports memorabilia and seating.

The kitchen features light wood cabinetry, a massive stone island with a breakfast bar, and plenty of storage. A glassed-in formal dining area looks out to views of the water.

A double-height game room features a billiard-table and football-themed decor. The layout also includes a large laundry room, home theater, and a gym.

The master suite is a retreat with a spalike bathroom. The additional bedrooms all come with water views.

The property also has two separate garages, each holding two cars, as well as a boat dock. Decks stretch the length of the home, and stairs lead down to a patio with a grill.

Lynch hails from Oakland, which is about 20 minutes from the Point Richmond area. He stayed local, playing college ball at the University of California, Berkeley and earning All-American honors. Selected by the Buffalo Bills in the first round of the 2007 draft, he played for the Bills until he was traded to the Seattle Seahawks during the 2010 season, and blossomed into a megastar.

After going “Beast Mode” in the Pacific Northwest for five seasons, he retired, due to injuries. He returned to play with the Oakland Raiders in 2017, staying for two seasons, and then retired again. He opted to come back for a single game with the Seahawks in 2019. The free agent has apparently considered yet another return to the NFL.

Jacqueline O’Keith with Lamarc Realty holds the listing.

Source: realtor.com

What Is Swing Trading – Technical Indicators, Strategies, Pros & Cons

While the majority of stock market participants are investors who buy shares of stock and hold them for long periods of time as they grow, there’s a large population of active traders who are in it for the short-term moves.

After all, the battle between the bears and the bulls leads to constant ebbs and flows of market prices, creating opportunities with shorter time horizons.

One of the most common ways to take advantage of these swings in value is known as swing trading.

What Is Swing Trading?

Swing trading is a short-term speculative trading strategy that’s designed to give traders the ability to predict market movements. Swing traders look for opportunities that last for a period of time generally ranging from a few days to a few weeks, but the actual time frame from one trade to the next can vary wildly.

Swing trading strategies involve the use of various technical indicators and the measurement of price action over time. These indicators are used to determine entry points and outline the potential risk-versus-reward profile of each trade.

Essentially, swing traders use detailed analysis and charting capabilities to exploit stock market volatility for a profit.

It’s important to note that all trading and investing involves attempting to predict the future. These predictions prove to be less accurate when shorter periods of time are allotted for them to come to fruition, making short-term trading riskier. No matter how strong your strategy and analysis capabilities are, you’ll never have a 100% success rate.

As a result, it’s important to take steps to gauge and minimize risk with every trade. After all, when your risks of loss are low and potential rewards are high, you don’t have to be right every single trade to generate significant profits.

Pro tip: If you’ve been thinking about swing trading, we highly recommend looking into the Mindful Trader. With years of analytical analysis, he’s developed a strategy that has a history of profitability. He’s back-tested the results over the past 20 years and found that the median annual would have been 181%.


How Swing Traders Minimize Risk

When trading stocks, whether using swing strategies or otherwise, it’s important to have a solid trading plan. This plan will ultimately minimize the risk you’ll accept as you trade. An effective trading risk management plan includes:

1. The Use of a Stop-Loss

A stop-loss is a form of market order that creates an action when a predetermined price is reached. For example, if you purchase a stock at $50 and place a stop-loss order at $47.50, the shares will be sold automatically if the price of the stock were to fall to $47.50 or below, limiting your losses in the event of a sharp pullback.

These market orders are important regardless of what type of trading you do. After all, even the experts don’t place winning trades every time they make a move. It’s important to minimize the risk of downward price movements so you don’t get blown out when the market doesn’t go your way.

2. Analyzing Risk vs. Reward

When analyzing trading opportunities, the swing trader pays close attention to the risk-versus-reward profile of the trade. With risk being minimized by a stop-loss order, you know exactly how much money you stand to lose if things go wrong.

From there, you can analyze previous movements in the price of the asset to determine how high the price may go, setting a profit target designed to take a large chunk of the available profitability without pushing the limits too close to resistance.

If you are correct, the uptrend will drive the price to the profit target, leading to the trade ending and to you taking profits. This predetermined profit level is compared to the potential losses.

For example, if you stand to lose $1 if things go wrong or make $1 if things go right, the trade isn’t worth the risk. On the other hand, if you stand to lose $1 on a bad trade or make $3 on a good trade, the trade is worth the risk.

3. Doing Detailed Technical Analysis

Although no indicator or analysis tool is 100% correct at predicting the market, historically traders have used technical analysis to determine future price movements to assess patterns in the price of an asset.

The most profitable swing traders are experts at analyzing patterns in charts and comparing those patterns to historic trends to get an idea of what’s going to happen in the future. If you’re interested in swing trading, it’s important to hone your technical skills.

4. Taking Profit or Losses at Precise Times

Profitable swing traders are interested in taking a chunk of the profits available on price swings, but they aren’t willing to risk their earnings by pushing their luck to the limit.

Expert swing traders put emotion to the side and follow their strategy to the letter, resisting the temptation to follow an asset to or through resistance. Instead, they take profits before resistance fears have the potential to decimate them.


Technical Indicators and Tools Swing Traders Use

The most important tools in the swing trader’s toolbox are stock screeners, charting, and technical indicators. Some of the most important tools and indicators for swing traders include:

  • Stock Screeners. Finding a great trading opportunity is just as important as following your strategy when taking advantage of it. There are several free screeners online that make it easy to find the types of opportunities you’re looking for. You can use a screener to instantly produce a list of assets that meet your criteria or display certain characteristics that make them candidates for a swing trade.
  • Candlestick Charts. Candlestick charts are used because they show four points of data for each candlestick, including the open, high, low, and close price for the candlestick period. This data is invaluable for the swing trader when determining historic and likely future price movements.
  • Moving Average Crossovers. Moving average crossovers relate to the action of a short-term moving average crossing above or below a long-term average. These crossovers are often used to determine entrance and exit points.
  • Stochastic Oscillator. The stochastic oscillator helps traders determine if an asset is overbought or oversold while acting as a gauge of momentum. When the indicator reads under 20, it suggests the asset is in oversold territory, whereas a reading over 80 suggests the asset is overbought.
  • On-Balance Volume. On-balance volume, or OBV, uses trading volume changes to predict future price movements. When OBV increases, it suggests that demand for the asset is increasing, and upward movement is likely ahead. When the OBV decreases, it suggests demand is waning, and declines are likely ahead.

There is a wide range of other technical indicators, each with the potential to provide important data and help you make more educated trading decisions. The more you learn about these indicators, the better chances you have of becoming a successful swing trader.


Mixing Fundamental Analysis Into the Process

While many traders who follow swing strategies specifically focus on the use of technical data, some mix in fundamental analysis in an attempt to get an even better understanding of the expected direction of the stock and how long movement will likely last.

For example, a swing trader may use one or more of the indicators above to find an opportunity. However, before acting on the opportunity, they might dive into the company’s fundamental data to make sure that the underlying company is growing, reinforcing their belief that the bullish signals are correctly predicting upward movement ahead.


Swing Trading vs. Day Trading

Swing traders and day traders have quite a bit in common. The two trading techniques both involve using technical data to analyze historic price trends in an attempt to determine what the price of an asset is going to do in the near term.

However, the two trading techniques have a key differentiating factor.

Swing trading techniques involve buying and holding assets at least overnight. In most cases, the time frame of the trade ranges from a few days to a few weeks. Day traders, on the other hand, work to exploit intraday price movements, always selling the asset by the close of the trading day.

Essentially, a day trade, as its name suggests, is a trade that takes place within a single day. Day trading is that much riskier because this short time window offers even less time for the predictions of price movements to come to fruition.


Example of a Swing Trade

Let’s say a trader has spotted ABC stock, which seems to be reaching support. The trader realizes that the stochastic oscillator reading is a low 17, the short-term moving average just crossed above the long-term average, and the OBV is rising.

All these signs are pointing to gains ahead.

The trader buys ABC at $10 per share, setting a stop-loss at $9.50 per share. Based on technical data, resistance seems to be somewhere around $12.50 per share. So, the trader decides they will take profits at $12 to avoid any chance of getting close to resistance and the price of ABC falling.

This trade will ultimately end in one of two ways:

  1. Profits. If the trader is correct, the price of the stock will rise to $12 per share, offering up $2 per share, or 20% in profits.
  2. Losses. If the trader is incorrect, the price of the stock will fall to $9.50 per share before it’s sold for a loss. In this case, the trader stands to lose $0.50 per share, or 5%.

Notice the imbalance between the potential upside and potential downside of this trade. If this trader were to place many trades that had a similar risk-versus-reward profile, they would stand to come out ahead even if they get half of their trades wrong.


Swing Trading Pros and Cons

As with any other trading strategy, there are benefits and drawbacks to following a swing strategy.

Pros of Swing Trading

There are plenty of reasons to be excited about following a swing strategy in your trading activities. Not only is this fast-paced trading strategy exciting, traders enjoy the following additional benefits:

  1. Can Be Applied to Various Assets. Stocks aren’t the only asset you can use this trading style for. In fact, it’s a popular style among forex and commodities traders as well as those who trade exchange-traded funds (ETFs).
  2. Potential to Beat the Market. When you trade, your ultimate goal is to make faster profits than you would make in a long-term investing model. There are plenty of swing traders who have a strong history of producing gains that beat market averages, meaning that when done properly, the technique can prove to be incredibly profitable.
  3. No Room for Emotion. Many trading strategies have liquid or unclear entrance and exit points, leaving room for emotional trading that will devastate your returns. When following a properly designed swing trading plan, you’ll know exactly when to buy and when to sell, leaving no room for emotions to take control over your trading process.

Cons of Swing Trading

While there are plenty of reasons to be excited about profiting from swings in the value of market assets, there are also significant risks and drawbacks that should be taken into account before you get started. These include:

  1. Holding Overnight. Day traders don’t hold assets overnight because this opens them to the risk of a gap down, which is when the price of an asset falls significantly while the market is closed, opening the next trading day with heavy losses. In this case, a swing traders’ stop-loss order won’t kick in until the market opens, resulting in larger losses than expected.
  2. Time Consuming. Any form of trading that requires detailed analysis of technical data is going to be time-consuming. Those who make the most money using this trading technique view trading as their full-time job. If you don’t have at least three or four hours per day to commit to your trading activities, a swing strategy may not be best.
  3. Missed Opportunities. Because those who take advantage of swing trading focus on the exploitation of near-term trends, they may miss longer-term opportunities to generate significant returns.

Practice Before You Risk Your Money

As with any other form of trading, swing trading is speculative and comes with increased risk compared to long-term investing. Considering this, it’s important to practice your strategy before you risk your hard-earned dollars on your first trade.

There are plenty of free trading simulators offered online, most of which are demo accounts offered by mainstream online brokerages. Through these simulators, you’ll be able to test your trading strategy in a real-world setting that mirrors what’s happening in the market in real time.

The only difference is that the money you’ll use to invest is virtual. As a result, if you lose money in a trading simulation, you’re not actually losing a penny of real money.

By testing your strategies in these virtual environments before risking your hard-earned money, you can protect yourself from making beginner’s mistakes that could cost you a chunk of your investing capital or scare you out of moving forward.


Final Word

The fast-paced and often highly profitable world of swing trading is an exciting way to participate in the stock market. However, this same fast-paced, exciting activity can also result in painful losses.

If you decide to move forward as a swing trader, make sure to do your research and get a detailed understanding of how to read and analyze technical data. Your ability to use technical data to your advantage will directly relate to your ability to profit as you trade.

Source: moneycrashers.com

6 Ways to Reuse Items to Save Money and Reduce Waste

We live in a throwaway society. We wipe up spills with paper towels and wipe our noses with paper tissues we discard after a single use. We upgrade our computers and replace our cellphones nearly every year. Many of us even change our whole wardrobes every season, discarding old clothes that are in perfectly good shape because they’re “so last year.”

All this waste is costly, both for us and the environment. We could all stretch our dollars much further by using the same product many times rather than just once. And because we’d be buying less, we’d cut down on our use of energy and natural resources as well. So when you choose to reuse, you’re making your life greener and cheaper at the same time.

How to Reuse Items to Save Money and Reduce Waste

There are many ways to make reuse a part of your life. Some are simple, such as carrying a reusable shopping bag to the supermarket. Others take a bit more effort, such as shopping secondhand or using pallets for building material.

If you’re new to the idea of reuse, start with a few baby steps. Once you become comfortable with those, work your way up to the big stuff. As you become accustomed to the practice, you’ll discover even more ways to trim both household waste and your personal budget.

1. Ditch Disposable Products

For many people, using disposable products is just a matter of habit. They grab a disposable water bottle when leaving the house or purchase paper napkins at the grocery store.

In these cases, switching to reusable goods can feel awkward and unfamiliar at first. But if you give it a chance, before long, it becomes second nature. And once you’ve watched your trash can become lighter while your wallet stays heavier, you’ll never want to go back.

These are some examples, but there are many disposable household goods you can ditch forever.

Water Bottles

Drinking bottled water is a common and expensive habit. If you go through a $10 case of bottled water every week, that’s $520 per year for something you could get out of a tap for less than $1.

Invest in a $20 reusable water bottle instead, and it will pay for itself more than 25 times over in its first year of use. At the same time, you’ll keep more than 1,200 disposable plastic bottles out of the waste stream. And according to a report from the Pacific Institute, you’ll save more than 100 kilowatt-hours of energy.

The EcoVessel New Wave BPA-free plastic sports water bottle (available in 24- and 32-ounce volumes) is perfect for on-the-go sippers thanks to its durable straw lid design and ergonomic body.

Shopping Bags

Americans use billions of plastic shopping bags each year. According to the Natural Resources Defense Council, New York state residents alone go through 23 billion plastic bags per year. That’s nearly one bag per person per day. Producing the plastic for all those bags contributes to climate change, and the bags themselves often end up as ocean waste. You can avoid contributing to this waste by carrying reusable bags.

And avoiding reusable grocery bags can sometimes save you money at the checkout. For instance, grocery stores like Aldi charge directly for shopping bags. Although the fee for each bag is modest, you can avoid it entirely by bringing your own. Other stores, such as Target, offer a small discount for each reusable bag you bring.

There are dozens of kinds to choose from, including canvas, nylon, and string grocery bags. There are even bags you can fold and tuck into a pocket or bag to ensure you always have one when you need it.

Dishes and Utensils

You probably use washable dishes, glasses, and silverware for your meals at home. But during the workday, you might not think twice about grabbing a paper coffee cup or plastic fork. And when you’re done eating or drinking, it goes right in the trash.

But there’s a cheaper and more eco-friendly alternative. Keep a mug, plate, and set of silverware at work to eat your takeout or leftovers in style, and just wash the dishes when you’re done. If you typically use one disposable plate, one paper cup, and one set of plastic utensils each workday, this tip can save you about $72 per year.

To-Go Containers

The large food portions at restaurants are more than many people can eat in one sitting. You know you can save as much as a dollar or two (for those who take their lunch to work) to upward of $10 (if you usually eat out).

The downside is that when you ask to take home your leftovers, the server usually brings you a giant Styrofoam clamshell that just goes straight into the trash after you eat. But by bringing a reusable container when you’re planning to eat out, you can avoid both food waste and packaging waste.

Napkins

A family of four that uses one paper napkin at every meal buys and discards more than 4,300 napkins per year, more than $515 worth. That same family could buy a dozen cloth napkins for $9 and reuse them for years. They’d save over $500 in the first year alone, produce less trash, and save trees.

Paper Towels

Paper towels are even more mainstream than paper napkins. According to Earth911, the average American spent $17.50 on them in 2017.

But many reusable products can take the place of paper towels. For less than most people pay per year for paper towels, you could get a dozen washable sponges or microfiber cleaning cloths you can reuse for months. Or you can make reusable cleaning rags from old socks and T-shirts for free.


2. Repair Instead of Replacing

When something around your house breaks, do you fix it or buy a new one? In many cases, the first choice is both cheaper and greener.

And if you directly compare the replacement versus repair cost for most things, it’s no contest.

Cars

If you own an old car that’s in and out of the repair shop all the time, it may seem cheaper to buy a new one than to keep paying for repairs. But according to Credit Karma, the average monthly payment on a car loan is $568, or $6,816 per year. So unless you’re paying that much every year to keep your old car on the road, it’s cheaper to keep repairing it.

But money isn’t everything. If your old car has become so unreliable you fear being stranded miles from home, replacing it could be a better choice. You can also replace an old gas-guzzler with a newer, more fuel-efficient model as a way to reduce air pollution and shrink your carbon footprint.

Computers

An unreliable computer can be just as frustrating as an unreliable car. But once again, replacing it isn’t always the only option. You can often cure a sluggish PC just by clearing away unnecessary system files, defragmenting the hard drive, or removing viruses. In many cases, it can cost you nothing at all.

Other computer upgrades cost money. For example, it costs about $90 to upgrade to a new solid-state hard drive or add 16 gigabytes of memory. But that’s still quite a bit less than the $650 or more you’d pay for a new desktop computer, and it produces less toxic electronic waste as well.

Furniture

If you have an old, scratched table or a chair with a worn-out cover, don’t give up on it. You can cover those scratches using a $5 bottle of scratch-cover polish instead of spending $200 or more on a new one. You can remove the seat on a dining chair and recover it using a staple gun and $5 worth of fabric, saving you the cost of an $80 replacement.

For more complicated furniture repairs, such as refinishing or reupholstering, you can hire a professional. But that may cost more than replacing the piece, so check prices before making your decision. Selling or donating your old furniture keeps it out of a landfill too.

Clothing

Clothing with minor damage, such as a ripped seam or a missing button, is easy to fix. You can purchase a $7 mini sewing kit with everything you need to make minor repairs: needles, thread, buttons, scissors, and pins.

If you have a more complex repair project or don’t know how to sew, you can find a tailor to do it for you. According to Thumbtack, simple repairs like replacing a zipper generally cost around $20, which is quite a bit less than replacing a winter coat or a nice pair of dress pants.

Shoes

Sometimes, it seems like the minute you get a new pair of shoes comfortably broken in, they wear out and you have to replace them. But a simple DIY shoe repair may be all it takes to keep those comfy shoes going. For example, scuff marks are easy to cover with a marker pen, while broken shoelaces and worn-out insoles are easy to replace for $10 or less.

For more complex jobs, such as replacing soles or heels, you can go to a shoe repair shop. But according to Vox, that kind of repair may cost $50 or more, so it’s only worth doing on quality shoes that cost significantly more than that to replace.


3. Shopping Secondhand

Sometimes, there’s just no way to repair something. But that doesn’t mean you need to buy a brand-new one. You just need one that’s new to you.

Pretty much anything you can buy is cheaper when you buy it used. The primary exceptions are antiques and collectibles, which gain value as they age.

But secondhand shopping doesn’t just save you money. It keeps perfectly usable goods out of the landfill and saves the resources and energy needed to make new ones.

And there are many places to shop secondhand.

Thrift Shops

You can find secondhand clothing, furniture, and household goods at thrift shops. Prices vary depending on the type of store.

Nonprofit thrift stores, such as Goodwill, the Salvation Army, and church basement shops, typically charge the least. For instance, at my local church thrift shop, most goods are $2 or less, but you have to watch out for damage, such as stains or missing buttons.

By contrast, consignment stores often focus on selling like-new clothes from high-end brands. Prices are usually more than you’d pay for new clothes at a department store but still much less than you’d pay for new designer-label clothes.

Yard Sales

You can find even bigger bargains at garage sales, also known as yard sales or tag sales. Yard sale shopping is very hit-and-miss, but on a lucky day, you can find real treasures at great prices.

You can pick up all kinds of things at garage sales, including books, games, movies, music, furniture, electronics, and clothing, all at prices well below retail. Kids items, such as clothes and toys, are prevalent since children often outgrow things that are still in good condition.

You can find yard sales in your area by checking local papers and sites like Garage Sales Tracker and Yard Sale Search.

eBay

This giant online auction site has just about anything you can think of for sale: art, music, collectibles, clothing, and even cars. That makes it the perfect place to look for obscure pieces you can’t find anywhere else.

But not everything sold via eBay is secondhand, and not everything is a bargain. To ensure you get a good deal, set a price limit — say, half what the purchase would cost in a store — and refuse to pay more than that.

Another problem is that you can’t see the merchandise in person to check for defects. The best you can do is read the listings very carefully and pass up anything you’re unsure about.

Swap.com

Despite its name, Swap.com is not a bartering website. Instead, it’s a consignment site where you can buy and sell clothing and several other items, like toys and books, in good condition. Prices are generally more than you’d pay at a nonprofit thrift store but less than you’d pay at a consignment shop, with most apparel and accessories priced between $4 and $50.

ThredUp

Another suitable site for buying and selling clothes online is ThredUp. Garments start as low as $4. You can also send your old clothes to ThredUp in exchange for cash or credit to spend on the site if they accept them.

Craigslist and Facebook Marketplace

Craigslist is a marketplace where people in a local area can buy, sell, and swap goods and services. The for-sale section includes listings for just about any commodity you can imagine, including cars, clothes, appliances and electronics, and furniture.

Since anyone can post a listing, prices and product conditions vary widely. But when you shop through Craigslist, you often have a chance to check out the merchandise in person before you pay money for it. Most Craigslist sites also have a free section for giveaways and a section for yard sale listings.

Facebook Marketplace has a similar platform.

Reuse Centers

If you’re renovating your home, check your local reuse center before heading to the big-box home improvement retailer. These stores carry a wide variety of building materials, appliances, and furniture in good condition. Prices are usually no more than half the retail price and sometimes as low as 10% of retail.

Reuse centers are most commonly in or near large cities. You can check The Loading Dock and the Habitat for Humanity ReStore website to look for stores in your area.

Secondhand Specialty Stores

Many stores specialize in a particular kind of secondhand wares, such as books or music. Some stores, such as Half Price Books, offer a selection of used books and recordings alongside their new ones.


4. Swapping Goods

Swapping goods is an even bigger win-win than shopping secondhand. You can get rid of your unwanted stuff and pick up new stuff at the same time, with no money changing hands. So you get all the environmental perks of buying secondhand, and the price is unbeatable: absolutely free.

And you’re not limited to your friend group. There are plenty of places where you can swap goods with neighbors you don’t yet know.

Freecycle

The Freecycle Network is like a version of Craigslist where everything is free. Freecycling doesn’t require a direct swap for things of equal value. Instead, everyone posts listings for things they don’t want (or things they need).

For example, if you’re in the market for a new pair of ice skates, you can look for them on your local Freecycle group instead of hitting the store. And when you have something you no longer need, you can post it for someone else to take. You could get someone else’s too-small pair of skates for free and keep them and your unwanted goods out of the landfill at the same time.

Freecycle has listings for just about everything: clothes, books, furniture, electronics, and even plants. Some goods are in like-new condition, while others are completely broken but still useful for parts. To see if there’s a local Freecycle group in your area, visit Freecycle.org and type in your city and state.

Free Stores

Some larger cities have free stores and markets, which are like an in-person version of Freecycle. You can drop off unwanted pieces in good condition and help yourself to anything other people have left.

Most free stores (sometimes called “really really free markets”) don’t have permanent storefronts with regular hours. Instead, they’re open-air markets that occur on a particular day or large boxes where people can pick up and drop off items. To look for a free store near you, do a search on your town’s name followed by “free store” or “really really free market.”

Swap Shops and Swap Meets

Swap shops and swap meets are similar to free stores but with a twist: You have to give something to get something. It doesn’t matter what you bring or what it’s worth, as long as you donate something.

One type of swap meet is a clothing swap party. At these events, you and all your friends bring the clothes you no longer want and trade them with each other.

Online Swap Sites

You can also swap online at swapping websites. For example, Rehash is like an online clothing swap party for people all over the country. At PaperBack Swap, you can trade in paperback books you’ve read and get new titles in exchange.


5. Utilize the Sharing Economy

When you shop secondhand, you’re reusing old stuff someone else no longer needs. But there are also some things nearly everyone needs but almost no one needs every day.

For example, anyone with carpeting needs a vacuum cleaner, but most people only use it about once per week. So it would make a lot of sense if there were some way for a bunch of neighbors to have just one vacuum and take turns using it.

That’s what the sharing economy is all about. It lets just one item — a book, a car, or even a building — be enough for multiple people. There are many examples — some old and familiar, others more modern.

Public Libraries

Libraries aren’t just for books anymore. At many public libraries, you can also borrow audiobooks, music CDs, and DVDs of popular films and TV series. You can even read popular magazines instead of shelling out $5 or more to buy them off the rack.

Taking advantage of all these features can save you big bucks. For example, the average household with cable or satellite TV spends nearly $110 per month on it, according to Leichtman Research. If your library gives you enough entertainment choices to cancel your cable, you can save close to $1,320 per year.

Car Sharing

Let’s say you like to bike to work in good weather, but you prefer to drive on cold or rainy days. Instead of having a car that just sits in the driveway most of the time, you could join a car-sharing program, such as Turo or Zipcar.

Zipcar costs approximately $70 per year, plus a driving rate starting at $12.50 for each hour you use the car. If you made 10 three-hour trips per month, that would come to $4,570 per year. That’s less than half the $9,576 per year Car and Driver says it costs the average driver to buy and maintain a car.

Bike-Share Programs

If you use your car more often than your bike, you can keep the car and join a bike-share program instead. It gives you access to a whole fleet of bikes you can check out as needed.

For example, at Capital Bikeshare in Washington, D.C., you can borrow a bike for 24 hours for only $8. Doing so twice per month comes to $192 per year, which is quite a bit less than the cost of most new bicycles. Plus, you don’t need to store the bike, which is handy if you live in a small apartment.

Cohousing

Many houses have rooms that sit unused most days. For example, perhaps you only need your laundry room once or twice per week, your formal dining room twice per month, and your guest bedroom even less frequently.

In a cohousing community, people can share these seldom-used spaces with others. Each person or family has a small private home, while a larger building or home has areas all residents can use. Living in a cohousing unit usually costs less than owning a separate house of your own with all the same amenities.

The exact amount you save with cohousing varies. According to the Foundation for Intentional Community, a survey of 200 cohousing residents found that each household saved between $200 and $2,000 per month. And in a 2018 Journal of Accountancy article, a retiree who downsized into cohousing estimated her savings at $10,000 per year.

Coworking

Just like homes, many office buildings have spaces workers don’t use regularly. Desks sit empty while people are on vacation, and employees only use conference rooms once per week.

Coworking spaces allow a bunch of freelancers or solo professionals to share one building. That way, they all save money on rent and amenities like coffee and Internet access. Calculations by ValuePenguin show that small businesses with fewer than 12 employees save an average of $2,700 per month by using a coworking space rather than leasing an office.

Community Gardens

It’s possible to share outdoor spaces as well. Community gardens are shared plots of land in a city where people join together to grow flowers and fresh vegetables. These sites turn unused and unsightly vacant lots into sources of fresh food.

Many community gardens are free to join, but even if there’s a membership fee, it may be much lower than the cost of owning a house with a yard of your own. And having many people share a single garden is a much more efficient use of land than spreading the same amount of garden space across multiple lots.

Specialty Sharing

In many cities, there are special “libraries” where people can share all kinds of goods. For example:

  • Tool-lending libraries make it easy to borrow home and garden tools you only need occasionally, such as an extension ladder. Having 10 neighbors share one ladder is a much more efficient use of resources than each one having a ladder they rarely use.
  • Toy-lending libraries let kids choose from a much wider variety of toys than they can keep in their rooms at home. Parents can swap toys when their kids get tired of them rather than throwing them away and buying new ones.
  • Seed exchanges allow gardeners to trade extra seeds and seedlings they don’t need for new ones they can use rather than discarding them.

6. Get Creative

Often, when you reuse something, you’re simply continuing to utilize it for the same purpose. For example, you take a cloth grocery bag on yet another trip to the store, upgrade an old computer, or donate a too-small sweater to a thrift shop so a smaller person can wear it.

But sometimes, an item can’t do its original job anymore. When that happens, there are two things you can do: throw it out or put it to a new use. For instance, an old Mac computer that can’t handle today’s software can become an aquarium, or a sweater with moth-eaten sleeves can be cut down to make a vest.

These are examples of creative reuse, also known as upcycling or repurposing. It can be one of the more complicated ways to reuse, but for people who love to let their imaginations run free, it’s also the most fun.

There are many creative ways to repurpose common household items, such as:

  • Mesh Bags. To give mesh onion bags a new life, string a shoelace through the top. This drip-dry storage bag can hold bath toys or corral small kitchen tools in the dishwasher. A rolled-up mesh bag, held together with a few stitches, makes a good scouring pad for pots and pans.
  • Milk Jugs. An empty milk jug also has lots of uses. You can cut off the top to make a storage bucket with a built-in handle. Cutting off the bottom at an angle creates a dustpan or a large scoop for pet food, kitty litter, or potting soil. Cutting off just the base makes a miniature greenhouse to protect your tender seedlings in the garden.
  • Blue Jeans. A pair of blue jeans that’s worn out at the knees still has lots of good, usable fabric. The simplest way to reuse it is to cut off the legs and make shorts. But with a little more sewing skill, you can turn the denim into a sturdy apron, a tote bag, a purse, or a set of potholders.
  • Canning Jars. The humble Mason jar has become a trendy decoration. These glass jars can store anything from candy to office supplies to leftover paint. At chic parties, they can contain cocktails, hold candles, and display flowers. Do a quick search on “Mason jar projects,” and you can see literally hundreds of other ideas.
  • Shipping Pallets. Typically, shipping pallets are used once and discarded. But for creative carpenters, they make an almost unlimited supply of free wood. At sites like 1001Pallets, you can find instructions for turning pallets into tables, chairs, wine racks, shelves, and just about everything else for the home.

That doesn’t mean you have to start saving all your trash so you can upcycle it. The point of creative reuse isn’t to avoid throwing stuff away. It’s to avoid buying new stuff by putting what you have to good use.

Once you get into the habit of reusing things, the whole world becomes your materials bin. Instead of running to the store when you need something, you start looking around to see what you already have.

For instance, if you need a hat rack, you might spot a big branch out in the yard and think, “Aha!” An hour later, the branch is stripped of bark and mounted on your wall, and you have a unique hat rack your friends will envy.


Final Word

The three R’s of the green lifestyle are “reduce, reuse, and recycle.” Of these three, recycling tends to get the most attention. These days, we all know how to separate our trash and check the numbered logo on the bottom of a plastic bottle. And it’s easy to think recycling means we’re doing our bit to help the planet.

But reusing is much better than merely recycling. Yes, recycling a water or soda bottle is better than making a new one from scratch. But turning old bottles into new bottles still takes energy and produces pollution. Plus, it only works if people remember to “close the cycle” by buying recycled products.

But when you have a reusable bottle, you stop waste in its tracks. Any energy that went into making that bottle has already been used, and using it again doesn’t take a single watt more. When one reusable bottle can take the place of more than 1,200 disposable bottles every year, you save more energy — and more money — every time you use it.

Source: moneycrashers.com