Buy Now, Pay Later Versus Credit Cards: What You Should Know

CEO and Founder of Plinqit, the only savings app of its kind that pays users for learning about finance and savings. Between inflation, rising interest rates and other economic uncertainties, many Americans are concerned about their personal finances. These concerns impact their financial decisions. For some, this means relying on buy now, pay later (BNPL) products. In fact, a new survey from Credit Karma revealed that nearly 60% of consumer respondents said inflation is driving them to use BNPL products for items they need.

The survey also revealed that 13% of BNPL users surveyed rely on the service to pay for items at the supermarket, 18% are using it at warehouse stores and 17% are using it at discount stores. These stats indicate consumers are using BNPL services to pay for food and other household necessities.

Overall, BNPL usage has grown rapidly in recent years, and the BNPL market is expected to hit $3268.2 billion by 2030. It is more important than ever for consumers to understand how these products work so they can make informed financial decisions, especially in the current economic environment. Whether they opt to use BNPL or not, consumers need to know the risks, the difference between BNPL and traditional credit products, as well as the pros and cons of each, and the potential implications of using BNPL when it comes to their financial goals.

If It’s Available, Why Not?

Just as you would with any credit product, look out for overuse of BNPL. Most Americans believe they can handle one BNPL installment, but what happens when one installment turns into three? Juggling multiple BNPL payments makes it easy to overextend your budget and potentially lose track of payment due dates, resulting in a cycle of debt that’s hard to get out of.

If a person fails to pay their BNPL payment, their debt can be sent to collections, which can seriously damage their credit score. In fact, according to a Credit Karma survey of Americans who have used BNPL, 38% reported they have missed at least one payment. Of those, another 72% saw a decrease in their credit score afterward.

Additionally, BNPL is different from other forms of financing because BNPL providers currently do not review consumers’ other outstanding debts. This makes it difficult to understand whether a consumer can take on more debt. Consumers must also expect the unexpected. What if an unexpected expense comes up? Will this impact their ability to make payments toward their BNPL debt and other debts?

BNPL Versus Credit Cards—What’s Better?

BNPL is gaining popularity as an alternative to credit cards, particularly among younger consumers. Many younger adults fear getting into debt, so they avoid using credit cards for purchases and instead reach for the tech-friendly BNPL solution. Both methods come with their own pros and cons, and consumers should weigh the benefits and risks of each before blindly making purchases.

Due to the increase in online shopping during the Covid-19 pandemic coupled with the demand for convenience, many consumers started using BNPL services. Popular BNPL providers like Afterpay, Affirm and Klarna have little to no interest and no hard credit check. Some options carry no fees, essentially making it free financing for the customer. However, if a customer misses a payment, it can affect their credit score and there can be substantial fees for late payments.

Also, some BNPL providers do not currently report positive payment history to the major credit bureaus, which means consumers cannot build their credit score like they could by making on-time payments for a credit card.

On the other hand, credit cards can be used almost anywhere and are more versatile for things like groceries and gas. Credit cards also build credit history and offer rewards and points that can be used on travel and cash back. However, carrying a balance over to the next month can incur a significant amount of interest, making it even harder to pay off the new balance.

BNPL’s Implications For Financial Goals

No matter what a consumer’s financial goals are—whether it’s early retirement or buying a home or car—taking on debt has implications for those goals. When deciding between BNPL financing and other forms of credit, it is best for consumers to consider how the line of credit will impact their ability to save.

Do they need to build up their credit score in the long term to buy a house? If so, a credit card might be best. Do they need to make a necessary purchase now and pay it off over time without impacting their credit score? If so, BNPL may be a good choice.

It is also important to consider economic changes that can impact budgets and financial well-being. While the economy is still in recovery from the pandemic, inflation continues and the cost of everyday goods remains at record highs. Consumers should avoid overextending their budgets and steer clear of financing that may hurt their credit score and send them deeper into debt.

The Role Of Community Financial Institutions

For individuals considering alternative financing options, it’s worthwhile to leverage the resources at their bank or credit union to make an informed decision. Financial institutions are well equipped to educate consumers on the benefits and risks of BNPL, as they can accurately assess these financing solutions and determine whether they will help or hinder a consumer from achieving their goals.

The appeal of BNPL is clear, thanks to its convenient enrollment process and widespread availability. These services have become common among online retailers, and apps such as Afterpay and Affirm are quickly becoming household names. While these financing options appeal to many, individuals should be aware of the implications of using BNPL, and they need to look no further than their community financial institution for guidance.

With the help of their local bank or credit union, consumers can become more financially literate so they can weigh the pros and cons of BNPL versus traditional credit products. This will ensure consumers make smart financial decisions and take the right steps to create a positive financial future.

CEO and Founder of Plinqit, the only savings app of its kind that pays users for learning about finance and savings. Read Kathleen Craig’s full executive profile here.

Source: Buy Now, Pay Later Versus Credit Cards: What You Should Know

Critics by movi

Buy now, pay later is a type of short-term financing. These point-of-sale installment loans are offered by a number of companies, including Movi

BNPL can be used at a variety of major retailers, which differ from plan to plan. Some credit card companies, also offer installment payment arrangements for eligible cardholders. Each buy now, pay later plan is unique to its provider, but generally they share a few things in common.

For example, BNPL loans typically require an upfront deposit payment representing a portion, such as 25%, of the purchase amount. After that, the remaining balance must be paid off in installments over a period of a few weeks or a few months. Some BNPL services set the total number of payments at four, while others allow borrowers to select their own payment schedule.

In terms of cost, buy now, pay later plans often charge no interest and no fees, with the exception of late fees for missed payments.

Just over half, 51%, of Americans used a buy now, pay later service at least once during the coronavirus pandemic. Among the most commonly purchased items were clothing, furniture, appliances, electronics, housewares, and cosmetics.

How Credit Cards Differ

Like buy now, pay later loans, credit cards can be used at retailers. But they can also be used to buy gasoline, make utility bill payments, and for other kinds of expenses. If the cardholder pays their balance in full each month, they won’t owe any interest. Otherwise, their balance will accrue interest at the card’s annual percentage rate (APR).

Credit cards may also charge fees, including:

  • An annual fee
  • Balance transfer fees
  • Cash advance fees
  • Foreign transaction fees
  • Late payment fees

A credit card is an example of revolving credit. With this type of credit agreement, you have a set credit limit that you can borrow against. As you make purchases with a credit card, your available credit is reduced by that amount. When you make a payment, that frees up your available credit.

Buy Now, Pay Later vs. Credit Cards: Which Is Better?

Buy now, pay later plans and credit cards are both options to consider when making purchases online or in stores. But each has some advantages and disadvantages.

Buy Now, Pay Later Pros

  • Convenience: You can apply online and be approved almost instantly
  • Get approved without a hard credit check, which can lower your credit score
  • Pay off purchases in installments, typically with no interest charges
  • Choose a payment frequency that fits your budget (at some BNPL providers)

Buy Now, Pay Later Cons

  • Since you don’t have to pay in full right away, it’s easy to overspend
  • Payment plans aren’t always interest-free
  • Missing a payment or being late with one could hurt your credit score
  • Not all retailers accept buy now, pay later

Credit Card Pros

  • Can be used at a wider array of retailers and for other purposes
  • Pay off purchases over time at your own pace, without fixed installment payments
  • Potential to earn cash back, miles, or points on purchases
  • Cards may offer other perks, such as travel and rental car insurance

Credit Card Cons

  • Interest charges can add up quickly if you carry a balance from month to month
  • A hard credit check is typically required to qualify
  • Late payments can be damaging to your credit score
  • Credit cards can charge numerous fees, which add to your overall cost

How to Choose a Buy Now, Pay Later Plan

When comparing buy now, pay later plans, pay particular attention to:

  • Which retailers accept it
  • Initial deposit requirements
  • Number of installment payments required
  • Interest charges, if any
  • Fees, if any
  • Limitations or exclusions on purchases
  • Credit check requirements
  • Shipping policies
  • Refund and return policies

Also, consider how a buy now, pay later agreement might affect your credit. While many BNPL companies only perform a soft credit check to approve shoppers for loans, your credit score could still suffer if you’re late in making a payment and the company reports it to a credit bureau.

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ETFs vs. Mutual Funds: How They Differ

Exchange-traded funds, or ETFs, and mutual funds are both investment products that represent a basket or collection of securities.”They provide investors access to underlying investments, like stocks or bonds, and generally provide more diversification than a single stock or bond,” said Wendy Liebowitz, vice president and branch leader at Fidelity Investments.

However, there are a few key differences between ETFs and mutual funds to keep in mind before investing. Here’s what you need to know:

ETFs differ in how they are traded

Greg McBride, chief financial analyst at Bankrate.com, explained that mutual funds only trade once per day, after the market close at a price based on the value of all the fund’s assets less the expenses. ETFs, as the name implies, McBride said, trade on an exchange and this means investors can buy or sell throughout the trading day at a price that fluctuates as the prices of the underlying investments change.

“Many fund companies offer both a mutual fund and an ETF version of the same investment, and the ETF is typically the lower-cost option in terms of expense ratio,” he said. “Just make sure your brokerage permits you to invest commission-free, as any brokerage commissions erase the modest expense advantage of ETFs.”

ETFs are more passive

Todd Rosenbluth, head of research at VettaFi, explained that similar to mutual funds, ETFs provide investors with the benefits of diversification, by owning stocks or bonds from numerous companies.

“However, most ETFs outperform mutual funds in the same investment style as they cost less and passively track an index like the S&P 500 or the Russell 2000 Index rather than try to pick winners but end up with laggards,” Rosenbluth said. “Most ETFs available track an index and are passively managed, while most mutual funds are actively managed with the team picking through a larger universe of investments.”

ETFs generally cost less

The fees you pay to purchase ETFs tend to be lower than mutual funds, but this does vary depending on the investments. A significant reason it’s cheaper is that an ETF is a passive fund.”ETFs tend to have a lower cost of ownership, with expense ratios often less than 0.20%, while mutual funds are often five times as expensive,” said Rosenbluth.

ETFs can offer tax advantages

Another difference to consider is tax efficiency. “Generally, holding an ETF in a taxable account will generate less tax liabilities than if you held a similarly structured mutual fund in the same account,” said Liebowitz with Fidelity Investments. Although both are subject to capital gains and dividend income tax, Liebowitz said ETFs generally have fewer taxable events than mutual funds.

Understand the ramifications of investing

Liebowitz stated it is important to review the portfolio fundamentals of any fund before investing. “While an ETF and mutual fund might have the same investment objective or investment ‘style,’ the composition of each fund could vary, so investors should compare the annual turnover ratio, concentration risk, expense ratio, and other risk factors to determine if it is right for them and what they are trying to achieve with their investment,” she said.

Despite their differences, Liebowitz explained that both mutual funds and ETFs can offer investors exposure to a diversified basket of securities to help meet their financial goals and objectives – and it doesn’t have to be one or the other. “Investors should pick the best choice for their specific investing needs, keeping their time horizon, risk tolerance, financial circumstance, and short- and long-term goals in mind before making any investment decision,” added Liebowitz.

Source: ETFs vs. mutual funds: How they differ | Fox Business

Critics by InvestorVanguard

ETFs and mutual funds both come with built-in diversification. One fund could include tens, hundreds, or even thousands of individual stocks or bonds in a single fund. So if 1 stock or bond is doing poorly, there’s a chance that another is doing well. That could help reduce your risk—and your overall losses.

ETFs and mutual funds both give you access to a wide variety of U.S. and international stocks and bonds. You can invest broadly (for example, a total market fund) or narrowly (for example, a high-dividend stock fund or a sector fund)—or anywhere in between. It all depends on your personal goals and investing style.

ETFs and mutual funds are managed by experts. Those experts choose and monitor the stocks or bonds the funds invest in, saving you time and effort. Although most ETFs—and many mutual funds—are index funds, the portfolio managers are still there to make sure the funds don’t stray from their target indexes.

An ETF could be more suitable for you. You can buy an ETF for the price of 1 share—commonly referred to as the ETF’s market price. Depending on the ETF, that price could be as little as $50 or as much as a few hundred dollars. A mutual fund may not be a suitable investment. Mutual fund minimum initial investments aren’t based on the fund’s share price. Instead, they’re a flat dollar amount. Most Vanguard mutual funds have a $3,000 minimum. That would buy you 30 shares of a hypothetical fund with a net asset value (NAV) of $100 per share.

More contents:

Is This Stock A Better Pick Over Schlumberger?

The shares of Baker Hughes (NASDAQ: BKR) currently trade 50% above pre-Covid levels observed in January 2020 while the shares of its competitor Schlumberger (NYSE: SLB) are up by just 3%. Does that make SLB stock a better pick over BKR? Both companies provide oil field services including drilling & completion and production solutions to upstream oil & gas companies in the U.S. and abroad. Due to lower benchmark price expectations in the long term, SLB and BKR incurred sizable impairment charges in 2020.

However, the recent uptick in the oil benchmark due to strong demand, supply constraints by the OPEC, and economic sanctions on Russia, have increased demand for oil rigs across the world. Given Baker Hughes’s lower financial leverage, comparable topline to Schlumberger, and a low valuation multiple, Trefis believes that the stock is a good pick to realize more gains.

We compare a slew of factors such as historical revenue growth, returns, and valuation multiple in an interactive dashboard analysis, Baker Hughes vs. Schlumberger: With Return Forecast Of 109%, Baker Hughes Is A Better Bet

1. Revenue Growth

Baker Hughes has observed a lower decline in revenues in recent years as compared to Schlumberger. Baker Hughes revenues observed an annual decline of 4% from $22.8 billion in 2018 to $20.5 billion in 2021, whereas Schlumberger reported an annual decline of 11% from $32.8 billion in 2018 to $22.9 billion in 2021. Top line contraction has largely been due to a decline in rig count figures and capital control measures implemented by upstream companies.

  • Schlumberger’s four operating segments, Digital & Integration, Reservoir Performance, Well Construction, and Production Systems contribute 12%, 28%, 36%, and 24% of total revenues, respectively. The uncertain demand environment had persuaded upstream companies to limit capital expenses in the last two years. However, the surge in benchmark prices due to the Russia-Ukraine war has rekindled demand for oil field services – taking worldwide rig count figures from 1,521 in December 2021 to 1,850 at present. Moreover, the company’s digital solutions business is likely to assist margin expansion in the coming years.
  • Baker Hughes’ four operating segments, Oilfield Services, Oilfield Equipment, Turbomachinery & Process Solutions, and Digital Solutions contribute 47%, 12%, 31%, and 10% of total revenues, respectively. The company’s international operations have been assisting the top line in recent times, which observed a 10% contraction from pre-pandemic levels and contributes 80% of total revenues.
  • After reporting relatively flat revenues for FY2021, Baker Hughes and Schlumberger are expected to observe strong growth in FY2022. (related: How Does Schlumberger Make Money?)

2.Returns (Profits)

As both companies incurred sizable impairment charges leading to 25% contraction of the balance sheet, we compare their cash generation capabilities. In 2021, Schlumberger generated $4.6 billion of operating cash from $22.9 billion in total revenues – implying an operating cash flow margin of 20%. Whereas Baker Hughes reported $20.5 billion in total revenues and $2.3 billion of operating cash flow – resulting in a margin of 11%.

  • Schlumberger’s cash generation capabilities have been stronger than Baker Hughes which has resulted in a sizable difference in the P/S ratio. In 2021, Schlumberger and Baker Hughes’ P/S multiple was 1.5 and 1.2 respectively. Historically, it has been observed that there is a difference of 0.5 units between Schlumberger and Baker Hughes.
  • However, the difference between Schlumberger’s non-cash depreciation charges and capital expenditures was higher than Baker Hughes – affecting the operating cash flow margin figures.
  • Before the pandemic, Schlumberger returned 50% of operating cash to shareholders as dividends and invested 30% in property, plant & equipment as capital expenses.
  • Whereas, Baker Hughes had been investing its operating cash in capital assets.
  • Both companies implemented cash control measures and limited capital expenses as well as dividend payouts due to the pandemic. Given Schlumberger’s higher cash generation capabilities and historical dividend trends, it is a good pick to earn consistent dividend income.

3.Risk

Per annual filings, Schlumberger and Baker Hughes reported $13 billion and $6.7 billion of long-term debt, respectively. While a shrinking asset base due to impairment charges is a drag on shareholder returns, Baker Hughes’ lower financial leverage is a boon during uncertain times.

  • Higher financial leverage coupled with continued revenue growth augments equity returns. However, interest expenses weigh on finances as revenues decline – limiting dividend payouts and capital expenses.
  • Schlumberger’s higher financial leverage compared to Baker Hughes, despite similar revenues and a comparable balance sheet size, makes SLB stock a riskier bet.
  • In 2021, Schlumberger and Baker Hughes’ total assets were $41 billion and $35 billion, respectively.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company’s products.

Source: Is This Stock A Better Pick Over Schlumberger?

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Critics:

U.S. oil field services company Baker Hughes said Saturday that it was suspending new investments for its Russia operations, a day after similar moves were announced by rivals Halliburton Co. and Schlumberger.

The steps from the Houston, Texas-based businesses come as they respond to U.S. sanctions over Russia’s invasion of Ukraine. In its statement, Baker Hughes, which also has headquarters in London, said the company is complying with applicable laws and sanctions as it fulfills current contractual obligations. It said the announcement follows an internal decision made with its board and shared with its top leadership team.

“The crisis in Ukraine is of grave concern, and we strongly support a diplomatic solution,” said Lorenzo Simonelli, chairman and CEO of Baker Hughes. Halliburton announced Friday that it suspended future business in Russia. Halliburton said it halted all shipments of specific sanctioned parts and products to Russia several weeks ago and that it will prioritize safety and reliability as it winds down its remaining operations in the country.

Schlumberger said that it had suspended investment and technology deployment to its Russia operations. “Safety and security are at the core of who we are as a company, and we urge a cessation of the conflict and a restoration of safety and security in the region,” Schlumberger CEO Olivier Le Peuch said in a statement.

Oil companies ExxonMobil, Shell, and BP, along with some major tech companies like Dell and Facebook, were among the first to announce their withdrawal or suspension of operations. Many others, including McDonald’s, Starbucks and Estee Lauder, followed. Roughly 30 companies remain.

Ukrainian President Volodymyr Zelenskyy on Wednesday asked Congress to press U.S. businesses still operating in Russia to leave, saying the Russian market is “flooded with our blood.”

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11 Passive Income Ideas to Earn an Extra Grand Each Month

What would you do with an extra $1,000 a month? For most of us, this could be a real game-changer. After all, with this influx of extra cash, you could…

For most of us, this could be a real game-changer. After all, with this influx of extra cash, you could pay off financial debt, purchase a life insurance policy, or invest in your retirement. What’s more, you could finally take that dream vacation, make home repairs, or take a class to further your career. And, considering that fewer than 4 in 10 Americans could pay for a $1,000 emergency expense, you could build a substantial emergency fund.

But, unless you receive an inheritance or win the lottery, this $1,000 per month isn’t just going to appear out of the blue. You’re going to have to earn it. And, your first thought might mean picking up a second job.

There’s nothing wrong with this approach — especially if you’re in a financial crisis or have a short-term financial goal. On the flip side, this can pull you away from your family, friends, or hobbies. Plus, it can be exhausting in addition to your full-time job. In turn, that could actually put your main source of income in jeopardy if your performance or productivity plummets.

So, where can you realistically earn an extra grand each month? Through a passive income.

What is a passive income?

A passive income is when you make money without exerting much effort. In fact, this requires so little effort that many people describe a passive income as earning money while sleeping. Obviously, that doesn’t always literally happen. But hopefully, you have at least a basic understanding of what a passive income is.

There is, however, a passive income myth that must be debunked. Many people assume that earning a passive income is so easy that you only need a weekend to start. And, after that, you can just sit back and wait for the money to roll into your bank account.

In reality, there’s a lot of work to be done upfront. Even after the initial legwork, you’ll still have to maintain and update your passive income sources. It’s like taking care of your home or vehicle. Without properly taking care of these assets, they will quickly deteriorate and lose value.

If you do put in a little elbow grease and stay committed, then yes, a passive income can create an additional income stream. Eventually, this can help you achieve financial freedom, stability, and security. As a result, this reduces stress and anxiety.

In short, earning a passive income can significantly improve your life. And, if that sounds appealing to you, here are 11 passive ideas that can bring in an extra thousand bucks per month.

1. Investing.

As Jeff Rose, the Wealth Hacker, says, this first idea should be a no-brainer. And, despite what you may believe, it doesn’t take a small fortune to begin investing.

“Whether it be 50 bucks a month, $100 a month, anything that you can start investing, you can start making gains, start making interest, of your investment,” he adds. Examples include;

  • Index funds. These are mutual funds or exchange-traded funds that are tied to a market index, such as the S&P 500. Because of this, these funds’ performance correlates with that of the underlying index. Moreover, they’re passively managed as well.
  • Dividend stocks. If you want to make this a worthwhile investment, you will have to invest a significant amount of time and money. If you invest regularly in dividend stocks and put in the time and effort, you will have a very stable recurring income.
  • Peer-to-peer lending. Through platforms like LendingClub and Prosper, you can lend money directly with a click of a button. You can expect a 10.58% average interest rate.
  • Cryptocurrency. It’s not advisable to go all-in with crypto. But, as Cale Moodie wrote in a previous Due article, “the risk of investing in crypto is evening out, and as the market continues to correct itself, we’ll see more legitimate crypto investment opportunities rise to the top.”

What if you don’t know where to start? No worries. You can get assistance with robo-advisors.

“There are Robo Advisors such as Betterment, Wealthfront, Acorns, Robinhood, Ally Invest, E-Trade,” Rose says. “If you know nothing about investing and you want somebody to pick those investments for you, that’s why I have to recommend Betterment.

“Betterment doesn’t have any money to start and they will choose an ETF model for you,” he explains. “So, if you’re putting any money in, they’re gonna choose those investments and then you’ll sit back and start making those capital gains in dividends, otherwise passive income.”

2. Deal and/or survey sites.

Some might not consider this as a passive income since you are putting in a little work. But, signing up for deal and/or survey sites let you earn a minimal income while going about your daily life.

For example, you can make money when you’re doing your online shopping or filling surveys while watching Netflix or on your commute to or from work.

Sure. This probably won’t buy you a yacht. But, instead of just sitting there and wasting time, why not pick up some extra cash on the side?

3. Cash-back reward points.

“This one’s a little bit outside the box, but hear me out,” Rose states. “Taking advantage of cash-back reward points,” is another proven passive income idea.

“Now, I know, I’m sure you’re thinking how is that really passive income?” he asks “But, check this out.

“Before I started using credit cards to pay all of our bills, we used to use debit cards all the time, “ Rose states. “Because I always subscribed to the idea of like you shouldn’t have credit cards because credit cards are evil.” The thing is, when used responsibly, credit cards aren’t that evil.

Why? Because credit cards offer various reward points. And, if you don’t take advantage of them, you’re missing out on free money.

Rose explains that began using rewards points for cash back, hotels, or airline miles. “Anything like that that we knew that we’d be using on a frequent basis.,” he says. “So, now everything that we buy, whether it’s our cell phone bill, our satellite bill, Netflix, groceries, gasoline, we run all of our expenses through our credit cards and we get back tons of reward points.”

In fact, Rose was able to take a family vacation to Jamaica without having to spend a dime. “So, using your credit cards to take advantage of these reward points is so passive because you don’t have to do anything. You’re doing something that you’re already gonna do to begin with.” You just sit back and watch the money roll in.

4. Sell photos online.

Today, more than ever, photographers of all levels are in high demand. The reason? Bloggers, graphic designers, marketers, publishers buy and use photos online every day. Specifically, those on a shoestring budget, like bloggers and small to medium-sized website business owners are purchasing stock photos for their site or marketing materials like brooches.

But, where exactly can you sell your photos online? Unsplash, Shutterstock, iStock. Adobe Stock or Dreamstime are some of your best choices. Or, you could be in complete control by creating your own photography website in WordPress.

5. Patron.

“So, there’s this cool service called Patreon,” says Rose. “It’s for any artist that has a community, a growing community, and you wanna get paid for your work. And, you have a community of people that love your art whether that be your drawings, your music, whatever that art may be. And each time that you release a new item, you can get paid a fee for that.”

Best of all? You determine the amount of the fee.

An example of how this works is from Evan Burse, aka the Cartoon Block, who is friends with Rose. Burse has a thriving YouTube channel where the community will pay a fee whenever release a new image. And, he loves showing people how to sketch superheroes.

Since Burse was already sketching superheroes, he’s making some extra cash from a dedicated community that is excited and supportive of his work.

6. Write a book.

There’s no need to sugarcoat this. You aren’t going to compose a book overnight. Thankfully, the process is relatively simple.

Write a book about a niche you’re familiar with, self-publish it on Kindle Direct Publishing, Kobo, IngramSpark, or Smashwords. Although you’ll have to market as well, if it’s well-written and unique you’ll have another income source for years. In fact, Ross says that he’s still getting paid on sales of his book Soldier of Finance that he released in 2013.

7. Physical goods.

With physical goods, the sky’s the limit. For instance, you could sell coffee mugs, t-shirts, dog leashes, yoga mats, or handkerchiefs online. Especially, through Amazon’s FBA program.

“Amazon offers a couple of different fulfillment strategies,” explains Serenity Gibbons in a previous Due article. “One is their Fulfillment by Amazon platform – also known as FBA. The other option allows sellers to fulfill their own orders. Each method comes with its own pros and cons.”

“The major benefit of using FBA is that you don’t have to worry about a thing,” adds Serenity. “Amazon stores your inventory and does all of the picking, packing, and shipping. They also provide tracking numbers, handle returns, and deal with customer correspondence.” Just be aware that you will “have to pay for this service, which can eat away at your profits.”

Another option? Sell your own handmade products, like jewelry, belts, furniture, pet supplies, clothing, or candles. Afterward, you can list them on online platforms such as Etsy or Shopify.

8. Real estate.

“Real estate investing is a great way to not only build your passive income but your financial future,” notes Catherine Way in another piece for Due. “Thankfully there are many easy ways to start investing in real estate despite your background. From flips or note investments, it is easier than ever to start real estate investing.”

In order to start investing, you must understand the basics such as the local market conditions, how to calculate your return on investment, profits, and the different types of real estate prior to investing in real estate

Another option for real estate investing? Rental property that’s run by a managing company via platforms like;

  • Roofstock provides the option for renting cash-flowing single-family homes.
  • Fundrise lets investors invest in private real estate through a crowdfunding platform.
  • RealtyMogul allows you to invest in large developments, such as commercial or multifamily buildings.
  • EquityMultiple permits you to invest in real estate with as little as $10,000.
  • Groundfloor aims to make private capital markets accessible to all by crowdsourcing real estate investing and lending for as little as $10.
  • FarmTogether lets you invest in farmland to create a predictable investment strategy.

9. YouTube.

In terms of what type of channel to launch on YouTube, there are quite a few options available to you. You might review products, give your opinion, or share instructional tips. You can even provide updates on a niche topic that you’re either familiar with or passionate about.

But, how does that translate into money?

That’s an easy question to answer; ads. Of course, you need to be a quality content creator and build an audience. When you do, you’ll get paid through those ads that you’re probably skipping. Additionally, you could have your videos sponsored by a company. If you spend any time on YouTube, you’ve no doubt come across videos that have been sponsored by companies like Magic Spoon, Manscaped, Raycon, or ExpressVPN.

10. Blogging.

Yes. You can make serious coin by blogging. You just need to take that all-important first step and actually start your blog by;

  • Select a blog name related to your name, product, or service.
  • Purchase the domain and web hosting so that your blog goes live.
  • Customize your blog through a website builder or hire a pro to do this for you.
  • Write and publish your first post.

Next, keep creating and sharing your content. Like with YouTube, having quality content and a dedicated following can help you monetize your blog. Generally, this is through banner ads or affiliate marketing. But, you could also offer coaching services or sell information products like an instructional guide, eBook, or case study.

To turn this income into a passive income you’ll want to take advantage of automation. “Simply find tools that streamline the tasks you’re tired of doing and integrate them into your blogging workflow,” suggests Peter Daisyme is the co-founder of Hostt. “There are apps to automate email marketing, social media, list segmentation, proofreading, writing headlines, scheduling meetings, tracking analytics, finding link-building opportunities, optimizing images, automating business payments, and everything in between.”

On the other hand, there is only so much you can automate.” At some point, you have to build up a team of skilled professionals who can help you handle the tasks that require human energy and creativity,” he adds. “This is where outsourcing to freelancers and virtual assistants comes into play.

11. Create your own online course.

Creating a course is one way to diversify your income,” says personal finance writer and founder of Tay Talks Money Taylor Gordon. “If you’re making money from a business, there’s a good chance you have something to teach that people want to learn.”

“I like making and taking courses from other people because they’re often a smaller ticket product that gives me an introductory into what the person is about,” adds Gordon. “From there, I can decide if I want to invest with them again.”

Interested? Then let’s rundown the steps you’ll need to take to create an online course;

  • Choose the right idea. Your course topic should be one that is likely to be of interest to people. Make sure to do your research and ask the right questions beforehand. “Sometimes courses that people say they’re interested in aren’t actually courses that they will dig into their wallets to purchase, she says.
  • Outline the course. You don’t have to include every single detail. But, you’ll want to flesh out a lesson plan so that you and your students know where the course is heading.
  • Test the market. Gauge interest through a presale or beta version.
  • Choose a course platform. Delivering your course via daily emails is probably the easiest and cheapest method, says Gordon. Alternatives include Udemy, Teachable, Thinkific, or Zippy Courses, which are more involved sites. You could also go with a straightforward payment and digital delivery service such as SendOwl or Gumroad.
  • Promote like it’s your job. Finally, go on a marketing blitz through email marketing, purchasing ads, hosting a webinar, or being a podcast guest.

By

Source: 11 Passive Income Ideas to Earn an Extra Grand Each Month

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How Financially Literate Are You? 3 Things You Should Know About Your Money

How do most of us learn how to use our money wisely and well? When we’re growing up, we’re given special instruction in important subjects — swimming, driving, sex — to arm us with info and keep us from harm.

Yet when it comes to managing our money — an activity that every one of us needs to do, every day — we receive surprisingly little preparation. We’re not taught much about it in school, because education systems leave it to us to learn from our families and friends. However, those people often don’t fill in the gaps because money can be such a loaded or taboo topic.

Natalie Torres-Haddad, who grew up in southern California, saw many people around her struggling with debt and financial instability. She was determined to be the exception, and she purchased her first rental property in her early 20s and earned an MPA in Finance & International Business. In the process, however, she became buried in debt. Only by teaching herself the basics of money — basics that she’d never learned — was she able to steady herself and her finances.

Today she leads workshops and sessions to prevent others from falling into the money pit. (She’s also the author of the self-published Financially Savvy in 20 Minutes ). She’s found that even among the college-educated people she meets, “the majority feel confused and overwhelmed about balancing their income and expenses,” she says. The stats show they’re not alone. A 2015 Ohio State University study reported nearly 70 percent of college graduates in the US say they don’t feel equipped to manage money and deal with their debt.

Not only must we get up to speed on the basics, we also need to start having honest conversations with each other about money, says Torres-Haddad. In the same way we’d tell family and friends that we’re cutting out refined sugar from our diets or practicing yoga to increase our flexibility, we should be open with them about the steps we’re taking to boost our financial health.

That way, we can get advice and support. This transparency, she adds, can also make us less susceptible to peer pressure-related spending. How many of us have agreed to a pricey meal or weekend trip because we didn’t want to come clean about our money concerns?

Becoming financially literate does not require a huge time investment. Torres-Haddad believes we can start by dedicating 15 – 20 minutes a day to developing our skills and knowledge by learning new terms and resources. Just like attaining literacy in a foreign language, she says, “it’s an ongoing education.” Here are three things you need to know about your money.

1. Know How Much Money You’re Bringing in Every Month vs. How Much You’re Spending

Most of us can rattle off our salaries in our sleep, but could you do the same for your monthly after-tax income and where you’re spending your money every month? If you can’t, that’s normal. But now is the time to learn your actual take-home pay and your actual expenses (and not just ballpark figures or estimates).

For your income, look at your physical or online pay stubs, and start keeping a record of the after-tax amounts. If you’re a salaried employee, that number should be fairly steady; if you’re not, those numbers will vary.

For your monthly expenses, Torres-Haddad suggests writing down — whether it’s in a physical or online notebook — every single daily purchase (coffee, take-out, Uber, online shopping, etc) you make and every single ongoing payment you make through autopay or credit cards (Netflix, gym membership, car insurance, utilities, etc.).

If you’ve never done this before, you may find this uncomfortable — even painful — but it will force you to face up to your spending habits. It will also make these purchases visible. Often, our regular outlays (such as Netflix, Hulu, etc.) can go unnoticed or unquestioned, and our daily spends — especially if we pay by debit card so the funds are instantly drawn from our bank accounts — can go forgotten. Torres-Haddad calls the latter “runaway spending” — “when the little things that you thought cost only a few dollars actually cost much more” in the long run. Take a daily $5 green smoothie. By making them at home, you could save yourself a few hundred dollars in a month.

After you have a fundamental understanding of income and expenses, you can download an app to help you track these categories; see your bank account, credit-card and loan balances; and organize your purchases into buckets so you can identify areas where you might cut back. Two free apps to try are Mint or Charlie, says Torres-Haddad. But, she cautions, apps can be a little “out of sight, out of mind,” meaning if you need extra help to be aware of your spending, stick with the pen-and-pad (or fingers-and-keyboard) method a while longer.

2. Know Your FICO Score and Your Other Credit Scores

While you don’t need to have a good credit score to be financially literate, you must know what it is. ( Note: Most of the information in this section applies to people living in the US.) In the US, FICO was the first company to offer a three-digit credit-risk score for lenders to use when deciding whether or not to approve a loan or line of credit, a credit limit, and an interest rate. There are three other national credit reporting bureaus — Experian, Equifax and Transunion — which also keep track of all your loans (student, auto, personal, etc.) and your balances and histories for all your credit cards (whether issued by banks, stores or businesses).

However, the FICO score is the one most frequently used when you apply for credit cards, mortgages and most types of loans; rent an apartment; or sign up for utilities. FICO scores range from 300 to 850; 670 and up is seen as a good score and 800 and up is excellent. While the FICO score is calculated with a proprietary algorithm, the primary factors that go into it are your repayment history (do you pay your credit-card bills on time? how late are you?), how much debt you’re carrying on cards and loans, how long you’ve successfully held a credit card or loan for; and whether you’ve managed to hold a mix of different kinds of credit.

Most banks and credit cards offer free access to your FICO score on their mobile apps and websites ( here’s a list of the ones that do). If you don’t use one of these companies, you can also find out how to access your score on FICO’s helpful FAQ, including a chart showing where your score falls between “Poor” and “Exceptional.”

Besides checking your FICO score every year, do an annual check of the reports issued by Experian, Equifax and Transunion. This is so you can verify that they’re correct, make sure no one has opened up a line of credit in your name, and see where you might improve. You are entitled to a free copy of a credit report from each bureau once a year. Beware: Many sites will charge you a fee, so use the federally approved and secure Annual Credit Report site.

If it’s your first time checking or you’re about to make a big purchase (such as a car or a home), Torres-Haddad suggests getting all three reports at once. After that, she recommends spacing them out throughout the year. That way, you can quickly catch any errors, fraud, identity theft or any other actions that could hurt your credit history. Mark your calendar so you know when you can request your next free credit report.

3. Know How Much Credit Card Debt You’re Carrying

Knowing how much credit-card debt you’re carrying — and how quickly it’s increasing due to interest — is critical to your financial literacy. Make a list (on paper or on a computer) of each of your credit cards, their current balances, and their current interest rate. Then, put them in order from highest interest rate to lowest.

In general, says Torres-Haddad, this should be how you should prioritize paying them off, paying as much as you can towards the card with the highest interest rate while paying the minimum on the other cards. Called the “ debt-snowball method,” this was popularized by money expert Dave Ramsey.

If you have any cards that offered a 0% APR as a promotion when you signed up, mark down the date on which the promotional rate expires because that’s when you can expect your debt to accumulate at a high interest rate (20% or more). Try to budget your monthly payments so that this card will have little to no balance when that expiration date arrives.

Believe it or not, having a credit card can be a great thing for a person’s FICO and credit scores — if you use it responsibly. Of course, carrying no debt on your cards is best. Otherwise, Torres-Haddad recommends using no more than 30 percent of your available credit limit. So if you have two credit cards with limits of $6K apiece, totalling $12K in available credit, make sure the total balances you’re carrying do not exceed $4K.

If you’ve managed to pay off a credit card, congratulations. But while you may be tempted to close it, Torres-Haddad advises against it. Why? Closing the account will shrink your total amount of available credit and cause your credit score to dip. Instead, delete the card number from any online shopping accounts, cancel any auto-pays billed to it, and freeze the card in ice. It may sound silly but it means that if you want to use it, you’ll be forced to wait for it to defrost — and forced to take a little time to think about your purchase.

When choosing a new credit card, look for ones that offer incentives — such as travel points or cash back — which could help you and your finances. Torres-Haddad recommends going to nerdwallet.com and bankrate.com to compare credit card offers.

Obviously, these three points represent just a small part of financial literacy. That’s why Torres-Haddad urges people to be patient and to learn gradually. Two books she recommends are Napoleon Hill’s Think and Grow Rich!  and Robert T. Kiyosaki’s Rich Dad, Poor Dad. For those who like to get information through listening, she suggests the “Popcorn Finance” and “Her Dinero Matters” podcasts.

When you can, supplement your research with an in-person workshop, adds Torres-Haddad. “Even going to one financial literacy workshop can have a life-changing effect,” she says. A good time to find free workshops is April, which is Financial Literacy Month in the US. One of the best investments you can make in your life is to educate yourself about money, says Torres-Haddad. “It can really give you a lot of peace of mind.”

By: Erin McReynolds

Source: How Financially Literate Are You? 3 Things You Should Know About Your Money

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