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Five Ways To Buy Something You Can’t Afford

“If you can’t pay for it in cash, you can’t afford it.” “If you can’t buy it twice, you can’t afford it.” You’ve probably heard one of those aphorisms. The point is that even if you’re paying with a credit card (for the convenience or the cash back or travel rewards), if you can’t cover the cost of something with available cash, you can’t afford it and shouldn’t buy it.

While that is generally true, it’s not always practical advice when you, or someone you love, really needs something that neither your paycheck nor savings can cover. It’s also not realistic, since most Americans spend money on things they don’t need.

But you didn’t click on this article for a debate on whether Americans spend too much.

Today In: Money

Nope. You want to know HOW to pay for something you can’t afford to pay for in cash now.

I’ll cover five options: old-fashioned layaway; newfangled point-of-sale financing; credit cards; saving for what you want to buy; and selling stuff you already own, but don’t want as much as what you plan to buy.

1. Old-fashioned Layaway

Growing up, I only heard about layaway during the holiday season when major department stores advertised their Christmas layaway programs. Now, the fintech community has transformed this option, as I’ll discuss next.

But first, it turns out the traditional Christmas layaway is alive and well at Walmart, the world’s largest retailer by sales. And now is the time to get started. Layaway works like this at Walmart: You go to a store, collect your intended gifts,  go to a special Layaway counter, put down a deposit of at least $20 or 20% (whichever is more), and make additional payments whenever you’re in the store.

Walmart requires all items be paid off and picked up by December 10, 15 days before Christmas. There’s no interest charged. If you decide you don’t want a purchase after all, you can get a refund, usually minus a cancelation fee. That fee can be steep: 20% of the purchase price or $20, whichever is greater. (But Maryland, Ohio, Rhode Island and Washington, D.C., don’t allow a cancellation fee, while Alabama caps it at $25 and North Carolina at $50.)

If you’re shopping for a major appliance, Sears offers a layaway program year-round online and in its stores. The plan includes a $10 or $20 service fee and a set payment term of 8 to 12 weeks. If you want to cancel a Sears layaway contract, you have to go to the store to do it.

2.  Newfangled Point-of-Sale Financing

The basic principle of old-fashioned layaway is that you don’t get the item until you have finished paying for it. If your refrigerator or washing machine is broken beyond repair, you don’t want to wait 8 or 12 weeks for a new one.

With newfangled point-of-sale financing (it’s primarily available online, but sometimes in stores, too), you get the item now and pay over time. Essentially, you’re taking out an instant personal short-term loan that is tied to the purchase of a specific item or service.

QuadPay, Klarna and Sezzle allow you to pay for an item in four interest-free payments. Forbes Fintech 50 member Affirm offers interest-free financing from a small number of retailers that subsidize financing (among them Peloton, Warby Parker and Casper), but generally charges interest rates ranging from 10% to 30% (based on your credit score) for other purchases. Affirm’s longest loan term is 48 months.

Often, these fintech financing offers only become apparent when you go to check out a purchase online. But you can also plan ahead. For example, Affirm offers a list of merchants who offer its service in each category. Plus, it allows you to find out in advance how large a purchase it will finance for you. Affirm gives you this number, it says, without making a “hard inquiry” on your credit record, meaning it won’t affect your credit score, the way applying for a new credit card likely would.

When you buy something financed by Affirm, however, both your loan and your payments are reported to the credit bureaus, meaning timely payments can help your credit score and late payments will hurt it.

Separately, while Amazon’s credit cards may be better known, the behemoth of online selling also offers its own point-of-sale installment payment plans on certain (usually higher-dollar) purchases.

Read more:  Fintech’s Version of Layaway Explodes Online

3. Credit Cards

Like point-of-sale apps, credit cards allow you to get an item upfront while you pay the costs over time. “When you swipe a credit card, you are taking out a loan,” warns Tiffany “The Budgetnista” Aliche, a budgeting expert and financial wellness advocate. But unlike point-of-sale financing, it’s not a one-time loan with a set payoff date. The lure and danger of credit cards is that they provide so-called “revolving” lines of credit that you can use as long as you keep the account open and in good standing.

The credit card company doesn’t care what you’re buying with the credit line. (By contrast, companies like Affirm use algorithms that actually take the item you’re purchasing into account when deciding whether to green-light a loan.)

Before reviewing ways to use your credit card, here’s a bit of basic, yet very important, information on credit cards. Most credit cards are unsecured, meaning that if you don’t pay the lender back for the purchases you made, then they can’t take possession of those things. Lenders will likely send you notices requesting payment. If that doesn’t work, they will send your account to collections and report your delinquent account to the credit bureaus, hurting your credit score and ability to do things like get a mortgage or rent an apartment.

Some banks and credit card issuers offer secured credit cards, which are credit cards that require a deposit in order to use them. These are great for building credit and improving your credit. But they do not work if you do not have enough cash to cover the deposit amount.

So back to unsecured credit cards. Your credit line comes at a price known as the annual percentage rate (also called the purchase rate) and it’s based on your credit history. Individuals with good or excellent credit can borrow at lower APRs than individuals with bad credit.

Read more: The Forbes Guide To Credit Cards

But sometimes–often when you take out a new credit card and sometimes when you receive a special offer from an existing one–there’s a promotional period that allows you to buy something and take months to repay, without owing any interest.

If you’re in a rush to buy that new washing machine, you might be able to buy it with a credit card you already have and then apply for a new card with an attractive balance transfer offer.  Typically, there may be a fee for this transfer. But not always.

For example, the Chase Slate credit card is currently offering new customers a 15-month 0% interest rate for new purchases and balance transfers. Plus, there’s no fee for balance transfers during the first 60 days after you open the card. Be careful: If you don’t pay off your balance within those 15 months, you’ll be stuck paying an interest rate of between 16.99% and 25.74%.

Read more: How To Make A Balance Transfer Card Work For You

The 10 Best Best Balance Transfer Credit Cards

Credit cards are an option for buying something you can’t afford to pay for with cash—but an option that should be approached with extreme care. It’s easy to let a credit card balance sneak up on you (just ask this Millennial who accumulated  more than $30,000 in credit card debt) particularly if you carry the card around and begin to use if for everyday expenses, as opposed to the one-time purchase of an expensive item (e.g. the washing machine) you need now.

Read more:  The Best Way To Pay Off A Credit Card Debt 

4. Save Your Coins

In the wise words of rapper Wiz Khalifa, “Surround yourself with people who help you save money, not spend it.” It’s not clear in what ways Khalifa and his friends save a few hundred dollars, but there are plenty of ways you can save money toward a goal.

The most basic and traditional way is to open a savings account. You can even incorporate your friends in this process: ask them if they’d like to refer you to their bank for any referral bonuses for the both of you. For example, if a TD Bank customer refers a friend who opens an account,  each gets a $50 bonus.

Of course a $50 bonus shouldn’t lead you to open a savings account with a noncompetitive rate. With the growth of high-yield online savings accounts, it’s easier than ever to find an account with a good interest rate.

You’ve found a high rate. Now, get a plan to save for that big purchase you can’t finance from current cash flow. Let’s say you have a friend’s out-of-town wedding next year. Calculate the costs of travel, the outfit you’ll need, the wedding gift and anything else that factors into it. Then divide the total expense by the number of months or weeks you have until the date you need to be ready to purchase those things.

Once you’ve figured out how much to set aside into that savings account every month or every week, consider setting up automatic transfers from a checking account to a savings account so you don’t have to think about it. (And if your bank doesn’t offer that kind of service, consider finding a new one.)

More reading: Three Good Reasons To Switch Banks And How To Do It

Another behavioral suggestion to reinforce your savings comes from Aliche, who observes that “inconvenient money gets saved.” She suggests making your savings account difficult to withdraw money from. In other words, it’s harder to save money when it’s easy to transfer money back into your checking account for happy hour or an impromptu shopping spree.

“I had to make my money inconvenient so I opened up an online-only bank account. I just put my savings there–not checking, no debit card, just savings. It is impossible for impulse buys,” Aliche says. Banks usually take a day or more to transfer your money to other banks. Within that 24- to 36-hour period the impulse to buy something might pass.

Another behavioral trick to boost your savings: roundup options. A roundup is a feature wherein you accumulate more savings by automatically transferring over loose change to your savings account. Some banks like Bank of America have this feature. If your bank doesn’t have this, then consider a roundup app like Acorns, Qapital, Digit or Chime. These apps work with third parties, meaning a partner bank that you provide personal identifying information to. (They do this so they can offer FDIC insurance on your savings, since they’re not banks themselves.)

5. Sell Stuff

Way back when, if you needed to raise cash from your stuff, you had to go to the pawnshop or stage a garage sale. Both might be seen as signs of financial distress. Now, however, there are more ways than ever to sell surplus items online and living with fewer material things can be seen as a savvy lifestyle choice.

More reading: The Joys Of the Minimalist Life In Retirement

How Decluttering Her Home Changed This Young Mother’s Entire Life

Since the heyday of eBay, there’s been a surge of platforms for neighbors and strangers to sell stuff to one another. Some platforms allow you to sell for a set price, while others allow users to bid on your items. Sites like LetGo, Craigslist, Ruby Lane and Facebook Marketplace allow you to unload unwanted furniture and decorative knickknacks. When it comes to your wardrobe, top options include PoshMark, thredUP, The Real Real, Kidizen and Tradesy.

More reading: Life After Forever 21. How To Reduce Your Personal Cost Per Wear

Once you’ve gathered intel on your salable items,  decide how you’ll sell them. Would you prefer to sell them yourself on sites like Poshmark and Craigslist or sell through an online consignment shop like The Real Real?

Before snapping Instagram-worthy pics of your things, there are a few things you should do to prepare. First, edit what you’re going to sell. Things in good condition and better do well on these platforms. Anything less than good condition should be recycled or trashed.

Second, research the price range of your item. The item likely will not go for what it originally cost, especially after you’ve used it—unless it’s a limited edition collectible.

Aliche’s sister picked up a Hermès scarf for $2 at a thrift store. (The old-fashioned kind.) While she had been shopping for a scarf to tie around her head at night, she decided to take this scarf to an Hermès in Short Hills, New Jersey, and get it authenticated. It turned out to be a limited-edition design worth upwards of $1,000. She sold it on Poshmark.

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Asia is a personal finance writer for the Money and Markets team at Forbes. She’s based in New Jersey. Before joining Forbes, she reported for Financial Advisor magazine and also wrote for The Cranford Chronicle, NJ.Com and ThePopBreak.com. She also spent two years teaching English as another language in Shenzhen, Guangdong, China.

Source: Five Ways To Buy Something You Can’t Afford

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Investing 101 FREE ebook: http://theminoritymindset.com/get-ric… SUBSCRIBE for the latest videos *NEW VIDEOS EVERY WEEK* SC @M2JaspreetSingh http://www.TheMinorityMindset.com Instagram: http://www.Instagram.com/MinorityMindset Facebook: http://www.Facebook.com/MinorityMindset What Can You Afford? Budgeting For Wealth | Minority Mindset – Jaspreet Singh What’s up everybody my name is Jaspreet singh & welcome to the Minority Mindset’s Finance Friday. What’s affordable mean? If you got $200 in your bank account can you afford a $200 pair of shoes? It depends who you ask If you haven’t watched my previous video on budgeting, you should watch it so you know how to allocate your money once you start making it. But now you have some money in your bank account what do you do? If you want to buy luxury things, meaning things that you don’t need, Yo Jaspreet I need these new $200 shoes No remember my rule of 5. If you can’t buy 5 of them, you can’t afford one of them. If you want to buy a $100 pair of shoes and you don’t have $500 saved up, you can’t afford it. What’s the point of doing this? It forces you to live below your means. It forces you to save for something bigger, something to invest it, something that will make you more money. Make the sacrifice now so you can live bigger tomorrow. And listen, just because a sales person says you qualify for something more expensive doesn’t mean you can afford it. I briefly was a real estate sales agent for people who wanted to buy and sell their homes. We were paid based on the value of the home, the more the home costs the more we get paid. The same worked with banks, bank loan officers are often paid based on the value of the loan. Now although the bank officer and the real estate agent have to look out for your best interest, they aren’t doing anything illegal by approving you for the highest amount possible. So it’s in the bank officers best interest to get you the biggest loan as possible so they get the biggest paycheck. And it is in the real estate salesperson’s best interest to sell you the most expensive home so they get a big check. These people don’t have to deal with the consequences If you end up buying something that’s a little too expensive for you. You have to be the one in charge and know what your budget is. Don’t rely on sales people because their interest isn’t always the same as yours. And its not just houses and mortgages. Payment plans are becoming more popular for everyday items. Appliances, furniture, electronics, even our cell phones. I’ve said this before but it is nearly impossible to build wealth when you are constantly making payments to pay off things that you can’t afford. This year, Forbes reported that 63% of Americans, 63% don’t have enough funds saved up to cover a $500 emergency. Don’t be the majority. Put in the work and the sacrifice now so you can live better tomorrow. If your goal is to build wealth, you have to start living below your means. If you can’t buy 5 of them, you can’t afford one them. I know it’s hard, but you will set yourself up to stand out from the majority. #ThinkMinority #MIH #Budgeting http://www.TheMinorityMindset.com This Video: https://youtu.be/HRRrBrF7jRA Channel: https://www.youtube.com/c/MinorityMin… Based in Detroit. Jaspreet Singh

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Now That Commissions Are Free, Here’s How To Avoid The Big Costs Of Investing

TRADE FOR FREE! NO COMMISSIONS! Sounds too good to be true? Well, it is and it isn’t. Allow me to explain.

Within the past few weeks, a slew of brokerage firms reduced the rate their customers pay for online stock and ETF trades. In fact, they reduced them to dust. Interactive Brokers (IB) started it. Schwab joined in. Then, the cavalry arrived. Many of the largest firms followed suit in different forms. They joined IB, Schwab and the many robo-advisors who have offered free trading for a while.

What does it all mean for you?

Let’s start with the simplest part. Whether you trade your own accounts, or a professional advisor manages your assets, there is a very good chance your costs to execute trades has been reduced. It might even be zero.

However, that does not mean that investing is now “free.” It never was. Now, I know what you are thinking. You don’t use mutual funds, and you don’t use ETFs. So, your returns are not reduced by those “expense ratios” that are embedded in managed funds. If you buy and sell individual stocks, that is true.

You may also point out that you have most of your assets in tax-deferred accounts, such as an IRA or your 401(k) plan. Again, you are correct in assuming that you will not be taxed on those assets until you take them out or reach age 70 1/2. So far, investing sounds pretty darn inexpensive to me!

Today In: Money

The real costs of investing

One of the most frustrating things to me after more than 3 decades in the investment business is how quickly people jump at the chance to get something for “free” without considering the whole picture. Zero commissions on stock and ETF trades is just the latest example.

Trading, execution (how good a price you get when you place an order with a brokerage firm), and expense ratios get all the hype in the “race to the bottom” that is today’s big Wall Street.

Taxes…and how Wall Street tries to make them exciting

Taxes get some respect as a cost to reckon with. However, here too, the industry (especially the Robo firms) has created unnecessary drama by touting something call “tax loss harvesting (TLH).” This is something many of us in the field have done religiously for taxable client accounts for years. And we have done so with a focus on each client’s specific tax situation.

Now, firms will put your account on an automated system that hyper-actively swaps you from one security to another similar one, in order to generate a constant stream of tax losses. These can be posted against gains to reduce your tax bill. Great in theory.

TLH does not mean TLC

However, from the live examples I have seen, these TLH programs crowd out some very good investment strategy work. This would take an entirely separate article to explain. Perhaps I will post one.

For now, suffice it to say that in some instances, investment firms are charging an extra fee for something that is potentially overkill. That same service can be done more carefully and inexpensively as custom work for each client. It is just one of those things that you need to be aware of.

In an era of zero commissions, these for-profit firms are not going to find other ways to profit. In no way am I saying they don’t provide a helpful service. Just don’t get caught up in the hype.

Money market rates…also going to zero?

For example, the interest rate paid on money market funds at brokerage firms is, shall we say, in a bear market. That is, the rates are plunging. This is because brokerages are returning to one of their most profitable business, now that short-term interest rates have popped up from 0%.

For example, if T-bills yield 1.50%, you would hope that the money market fund that is used to sweep cash in and out of when you trade would pay somewhere in that range. Check carefully. Many firms have dropped those rates so that they are way, way lower than T-bills.

Cash management: the new tool in your toolbox?

That does not mean that it is a bad deal for you. If you trade actively, and don’t hold a high cash balance anyway, your interest in dollar terms is quite tiny to begin with. But if this is not the case, perhaps you are better off sharpening your skills as a “cash manager.”

I know I have done this in the accounts I manage over the past year. There are ETFs that invest in short-term, high-quality bonds like Treasuries. And, now that there is no commission cost to trade them through many firms, they may be worth considering as a money market surrogate.

The BIG cost of investing that gets too little attention

Drum roll, please…its lousy performance in down markets. Or, as David Letterman said, its all fun and games until someone loses an eye. So, amid all of the excitement about how little it will cost you to “play the market” with no trading costs and low expense ratios, there is still an issue. If the stock market drops 20%, 30%, 40% or more, you had better have a plan.

And, the plan can’t be to figure it out on the fly. Ask the folks who were suddenly faced with that in 2000 and 2007, the winds shifted. We all want to get our “fair share” of the ups. But when markets freak out and $20 of every $100 you had in your portfolio can potentially vanish in a few weeks (as stock index funds did around this time last year), lack of risk-management becomes the only cost that matters.

To try to put a bow on this cost discussion, consider the following if you have $500,000 to invest, and you are not a day trader, nor a straight buy-and-hold investor:

* The cost of 40 trades a year used to be about $5 each. That’s $200 a year you saved, with commissions going to zero.

* You switched to index funds from active funds, and maybe mixed in some stocks. Let’s say that shaved your portfolio expense ratio from 1.00% to 0.20%. You saved $4,000 on that $500,000 portfolio.

* Taxes: you generated capital gains of $30,000, but used TLH to knock that down to $10,000. Assuming a 30% tax rate, you saved $6,000 in taxes. This is getting better and better!

Minimal risk-management: the market fell by 20%, and you escaped with “only” a 18% loss. But that’s still a $90,000 decline in the portfolio! If you had practiced risk-management using some of the techniques I discussed in recent articles (tactical positioning, options, inverse ETFs, etc.), you might have kept that loss to half that.

Naturally, everyone’s situation and objectives are different. However, the key is to recognize the relative impact of the different types of investment “cost.” In the examples above, the cost of trading was well under 1%. The impact of expense ratio was a bit under 1%. TLH helped (assuming you had gains to offset with losses), to the tune of just over 1%.

However, risk-management can be “worth” well over 1%. That’s the point, and what you should focus on when evaluating your total “cost” of investing.

Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors

To read more, click HERE

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

I am an investment strategist and portfolio manager for high net worth families with over 30 years of industry experience. A thought-leader, book author and founder of a boutique investment advisory firm in South Florida. My work for Forbes.com aims to break investment myths and bring common sense analysis to my audience. Connect with me on Linked In, follow me on Twitter @robisbitts. Visit our website at www.SungardenInvestment.com.  What do you think? I welcome your questions and feedback at rob@sungardeninvestment.com. For more on this and related topics, click here.

Source: Now That Commissions Are Free, Here’s How To Avoid The Big Costs Of Investing

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https://www.sbmoneytips.com/ Learn the first secret of successful investing with Part I of our three-part series! *** Did you know that the average individual investor does worse in the stock market than the market itself? In other words, if you just held a broad index fund and did nothing but hold on until you hit retirement you would do better than most. It turns out that the problem has nothing to do with a lack of market savvy or anything like that. Instead, it has everything to do with human emotions. Once you learn the enemy you can master it! So let’s take a quick look in the mirror and get acquainted with our opponent! The first secret is simply to invest as soon as you can. Don’t sit on the sidelines! Start now and let compounding do the heavy lifting over time. Make the effort to learn something new: like how to set up an account and put some money to work. Either do it on line or call one of the big brokerages. You’ll be richly repaid for your efforts! The next secret is to avoid being too conservative when investing for long-term goals. Many people are reluctant to invest in the stock market because they are afraid they’ll lose money. And they’re right – they will! But allow enough time and the results come back to the long term averages. Take a look at this chart showing the S&P500’s results from 2007 through 2015. That drop in 2008-2009 was pretty terrifying – I know! I personally lost over a third of my money in it! And it was really uncomfortable. But look what happened after that. It took several years but the market came back and is now well above where it was before the great recession. The right thing to do is to stay the course. Invest when you have money to do so and only sell when you need the money. This is really important. Hang on when you’re in the middle of one of these lurches and don’t sell or change your game plan.

Three Credit Score Myths That Are Wildly Untrue

Sydney Enzler opened her first credit card when she was a 19-year-old college student. Her mom encouraged her to open the account in order to build credit and establish a strong credit score.

“I wanted to use my credit cards every once in a while to build credit, but I generally just use them for larger purchases,” said Enzler.

Now 24 years old, Enzler is one of the millions of Americans who owe a collective $1.1 trillion dollars in credit card and other revolving debt. According to the Federal Reserve, the average interest rate on those credit card balances is 16.97% APR.

With interest rates that high, it’s easy to see how credit card debt can quickly spiral out of control and leave you with a bruised wallet – and ego. The reality is that credit cards aren’t going anywhere, and they play a large role in determining your credit score – a critical factor when it comes to getting the lowest possible interest rate on your mortgage or other loans.

Today, I am dispelling three common credit card myths so that you can focus on the things that will actually improve your credit score.

Myth 1: Carrying A Small Credit Card Balance Is Good For Your Credit

Today In: Money

I applied for my first credit card shortly after my 18th birthday and I remember being told by a well-meaning colleague at work that I should try to use the card regularly and carry a small balance. The rationale was that by using the card and paying a small amount of interest monthly, the bank would love having me as a customer and give me a better credit score.

Fortunately, I was a curious teenager and fact-checked that claim, because it’s not true. And not following that advice has saved me hundreds, if not thousands of dollars in unnecessary interest charges over the years.

To begin, your credit score is not determined by your credit card company or any other lender. Your credit card issuer (in my case it was Chase), provides the credit bureaus with regular updates on your payment and account history. These credit bureaus (Equifax, Experian and TransUnion) simply receive information from your lenders and use it to calculate your credit score.

Second, carrying a balance on a credit card will increase your utilization, which could actually lower your score. In general, using less of your available credit is better from a credit score perspective.

The important lesson here is that it’s never wise to pay interest on your credit card if you can avoid it. Always pay off your full statement balance in full if possible. It will help you lower your credit utilization while avoiding costly interest charges.

(Read: The 60 Second Guide To Credit Utilization.)

Myth 2: Checking Your Credit Report Will Hurt Your Score

Reviewing your credit score regularly (and for free) is one of the best things you can do as a responsible credit card user. Period.

However, the myth that checking your credit hurts your score pervades, in part, because of the confusing language that’s used to notate when your credit file has been accessed. Whenever your credit report is requested, you’ll receive an ‘inquiry’. However, it’s important to note that there’s a big distinction between ‘soft’ and ‘hard’ inquiries.

When you request your own credit report, this qualifies as a soft inquiry. Soft inquiries have no effect on your credit score whatsoever. That means that checking your own credit report will not hurt your credit score. It’s that simple.

However, when you apply for a new loan or other type of credit, the prospective creditor will access your credit file to assess your creditworthiness. This will result in a hard inquiry, which will, in fact, have a negative impact on your credit score. Hard inquiries will remain on your credit file for two years, although they will only affect your score for 12 months.

If you’d like to check your credit report, you can do it here for free. By law, each of the three major credit bureaus must give you free access to your credit report once per year. I try to check a credit report from a different bureau every three to four months to check for inaccuracies or fraud. In fact, I just requested my credit report while writing this article and it took all of 90 seconds. You should do the same.

Bonus: If you are serious about protecting your credit you should also freeze your credit files for free.

Myth 3: You Can Pay Someone To Fix Your Credit Score

If you have a history of making late payments and don’t practice sound credit management, there’s no magic switch you can flip in order to have accurate information removed from your credit report on-demand.

While there are a lot of credit repair services roaming the web and social media, the fact is that they don’t do anything that you can’t do on your own.

The best way to repair your credit is to practice good credit management strategies. This means paying your cards and other credit accounts on time, every time. It also means understanding how credit scores work and what the components that go into your score are.

The components of your credit score are as follows:

  • Your payment history comprises 35% of your credit score
  • Amount of debt (credit utilization) comprises 30%
  • Length of credit history comprises 15%
  • Amount of new credit (and inquiries) comprises 10%
  • Your credit mix comprises the final 10% of your credit score

This means that 50% of your score (payment history and length of credit history) is related to time. Clearly, to meaningfully improve your score it will take patience.

If you’re getting ready to apply for a mortgage, or if you are hoping to lower your student loan interest rates by refinancing, here’s what you can do to give your score a boost more quickly. Thirty percent of your score is based on your credit utilization, which is essentially based on a current snapshot of your accounts. While it could take years for negative marks to roll off of your credit report, you can quickly lower your credit utilization.

Your credit utilization is determined by taking your outstanding balance on your revolving credit accounts and dividing it by the total credit available to you. It could take several weeks for the updated information to be passed from your creditor to the credit bureaus, but it’s a fast way to improve an important metric. For the highest credit scores, aim to lower your utilization below 10%.

Don’t lose sight of the fact that it can take time to improve your credit score. Start to establish healthy credit habits today so that your score reflects them in the future. But most importantly, don’t despair if your credit isn’t perfect.

Regardless of what your credit score is, it’s important to know that your credit score might not be as important as you think it is.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

Camilo Maldonado is Co-Founder of The Finance Twins, a personal finance site showing you how to budgetinvestbanksave & refinance your student loans. He also runs Contacts Compare.

Source: Three Credit Score Myths That Are Wildly Untrue

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Get exclusive content: http://patreon.com/mattdavella There’s a basic formula to win at personal finance. And it’s this… Make more money than you spend. In practice it’s not that easy. In the real world our money slips through our fingers. No matter how much we make our bank account seems to have its own agenda. In this video I breakdown common myths, pressures & misconceptions about money and how to manage it. New videos every week! New podcast every Wednesday! My gear… https://kit.com/mattdavella ^These are affiliate links. I only recommended products that I use & fully endorse. Subscribe: https://goo.gl/nzS5ri Podcast: http://groundupshow.com Instagram: http://instagram.com/mattdavella/ Twitter: http://twitter.com/mattdavella/ Thanks for watching!

3 Funds To Buy On This Pullback (7.7% Dividends, 200% Payout Growth)

Forget the trade war noise. Here’s the only thing you need to know: if you’d bulked up your stock holdings on any of the dips we’ve seen in the last four years, you’d be a lot richer today.

The reason for the market’s “one step back, two steps ahead” pattern is simple: despite the interest rate- and trade-driven terror, corporate profits and sales are rising (as are workers’ wages), and unemployment is low.

In other words, the US economy is solid—and it’s stayed solid through every short-term crisis of the last few years. So now we have another pullback that’s given us another chance to amplify our upside.

But what to buy?

You can easily get into the market with an index fund like the S&P 500 ETF , but there’s a problem: we want to have a nice stash of dividend cash to drop into stocks on the next pullback, and with SPY, your payouts are tiny, with just a 1.9% dividend yield.

Today In: Money

This is where closed-end funds (CEFs) come in.

With an average yield of 7.4%, CEFs are much bigger income producers than the index, and three CEFs are particularly appealing right now, with overhyped fears making them unusually cheap.

Let me explain.

Because CEFs’ market prices can deviate from the value of the holdings in their portfolios (called the portfolio’s net asset value, or NAV), CEFs can trade at wide discounts to their NAV—even if the funds have a long history of strong performance.

That’s exactly what we’re seeing in the three funds I’m going to show you now.

Bargain CEF Pick No. 1: Buy Like Buffett (But With 209% Payout Growth)

Let’s start with the Boulder Growth & Income Fund (BIF), whose 3.9% yield is more than double that of the average S&P 500 stock, even though it’s actually on the small side for a CEF. Plus, BIF pays out special dividends every once in a while and has been aggressively increasing its regular quarterly payout, too!

A 200% dividend-growth rate isn’t something you see every day, but BIF can do it because it focuses on stocks whose bargain valuations set them up to outperform over the long haul. It then returns those gains to you in cash.

To get that type of performance, it follows the teachings of the master—Warren Buffett.

In fact, a third of the fund is in Berkshire Hathaway (BRK.A, BRK.B), so owning BIF is like getting Buffett’s portfolio at a big discount, as BIF trades 16.8% below its NAV. That makes it the third-most discounted CEF I track through our CEF Insider service.

Beyond Berkshire, BIF holds companies with strong cash flows that Buffett has also bought: names like JPMorgan (JPM), Cisco (CSCO) and Wells Fargo (WFC). These firms can withstand an economic slowdown because of their strong balance sheets.

Bargain CEF No. 2: A 9% Dividend Disguised as 1%

General American Investors (GAM) also goes after bargain stocks, plus the fund is a bargain itself at a 14.5% discount to NAV. GAM is what I call a “stealth yielder”: while its normal dividend (paid annually) yields about 1%, the fund gives you the bulk of your cash through a big special dividend in December.

These special payouts are a big deal: they gave GAM an annualized yield of more than 9% last year, and a similar yield is likely in November, when the fund will announce its end-of-year payout.

What about the portfolio?

GAM, like BIF, is a value-focused fund, zeroing in on firms with strong cash flows, like Microsoft (MSFT), Alphabet (GOOGL) and Republic Services (RSG). That gives it a mix of high-performing tech stocks and stable cash generators from other sectors. This balanced approach is how GAM has been returned so much cash to shareholders over the years.

Bargain CEF No. 3: A Huge 7.7% Dividend Paid Upfront

The Nuveen Tax-Advantaged Dividend Growth Fund (JTD) takes a similar approach as BIF and GAM, but its “regular” dividend yields an outsized 7.7%, so you don’t have to wait for dividend hikes or special payouts to get your big yield here.

Plus, JTD trades at a 2.3% discount that, while smaller than those of GAM and BIF, is still far too big, given what the fund does.

JTD’s diverse portfolio ranges from Honeywell International (HON) to SAP (SAP), UnitedHealth Group (UNH) and AT&T (T). It also includes some tech, such as Microsoft (MSFT). The fund’s global approach helps it find bargain-priced companies with entrenched client bases and stable revenues.

That’s why JTD has been crushing the market for a decade. And here’s the best part: only a few people know. If you look at the market-price movement for JTD, it seems pretty ho-hum.

However, add in JTD’s big payouts and the chart looks much better!

Not only has JTD soared over the last decade, it has also beaten the index, with a huge chunk of its return in cash, to boot. That means this fund shouldn’t trade at a discount at all—but the fact that it does means it’s certainly worth your attention now.

Michael Foster is the Lead Research Analyst for Contrarian Outlook. For more great income ideas, click here for our latest report “Indestructible Income: 5 Bargain Funds with Safe 8.5% Dividends.”

Disclosure: none

I have worked as an equity analyst for a decade, focusing on fundamental analysis of businesses and portfolio allocation strategies. My reports are widely read by analysts and portfolio managers at some of the largest hedge funds and investment banks in the world, with trillions of dollars in assets under management. Michael has been traveling the world since 1999 and has no plans to stop. So far, he’s lived in NYC, Hong Kong, London, Los Angeles, Seoul, Bangkok, Tokyo, and Kuala Lumpur. He received his Ph.D. in 2008 and continues to offer consulting services to institutional investors and ultra high net worth individuals.

Source: 3 Funds To Buy On This Pullback (7.7% Dividends, 200% Payout Growth)

I’ve found three of the highest dividend paying stocks that will not only protect your money but also grow it if the stock market falls. I’m also updating our 2019 stock market challenge portfolio of dividend stocks that is beating the market two-times over. Stocks are falling again and investors are scrambling trying to find safety and growth at the same time. It may seem like an impossible task but I’ve found two sectors and three dividend paying stocks that will do just that. After more than a decade as an investment analyst, I’ve put together a screen to find the best stocks no matter what the market does. I’ll reveal those three stocks I’ve found plus update you on our 2019 dividend stock portfolio, the 11 best dividend stocks I’m investing in this year. These top dividend stocks are not only producing a return twice that of the stock market but they haven’t fallen as much as the S&P 500 on the recent weakness. Not only are these stock picks producing dividend income but also protection from a stock market crash. If you haven’t seen the other videos in our 2019 challenge, I put them all in a playlist linked here. Make sure you check those out because I show you how to invest in dividend stocks and reveal how I picked the best dividend stocks of 2019. https://www.youtube.com/watch?v=pfw_Q… If you want to create your own portfolio of dividend stocks, I recommend M1 Finance. It’s the no-cost investing platform I’m using and some solid features over other investing apps like Robinhood. https://mystockmarketbasics.com/joinm… Being able to reinvest dividends without paying trading fees is important because you want to get that money working for you as fast as possible. Another feature of M1 Finance is that you can set up retirement accounts, not available on Robinhood, which is very important to avoid paying taxes every year on the dividend payouts. I start the video off with an update to the Stock Market Challenge portfolio and those 11 dividend stocks beating the market. I then tell you why the stock market is down lately and those three stock picks that could save your portfolio. 1:09 2019 Dividend Stock Market Challenge Update 2:20 11 Stocks that Pay Dividends AND Beat the Market 2:44 Why is the Stock Market Down 4:01 Best Dividend Stocks for 2019 7:52 How I Pick High-Yield Dividend Stocks 8:23 Highest Dividend Paying Stocks for Safety and Growth SUBSCRIBE to create the financial future you deserve with videos on beating debt, making more money and making your money work for you. https://peerfinance101.com/FreeMoneyV… Free Webinar – Discover how to create a personal investing plan and beat your goals in less than an hour! I’m revealing the Goals-Based Investing Strategy I developed working private wealth management in this free webinar. Step-by-step to everything you need for this simple, stress-free strategy. Reserve your spot now! https://mystockmarketbasics.com/free-… Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps. #growyourdough

When Smart Personal Finance Habits Just Become Stupid

When you start getting your finances in order, it’s exciting. You see the basic concepts and rules of personal finance in action, and, after a while, they start to pay off. This makes it easy to become a personal finance devotee. But even the best financial advice can become counterproductive……..

Source: When Smart Personal Finance Habits Just Become Stupid

Everything I’ve Learned About Personal Finance in 10 Sentences

We’ve featured a lot of tips from The Simple Dollar’s Trent Hamm—from buying in bulkand earning money online to managing a career hiatusand overcoming decision fatigue. Here, he shares his ten most important pieces of financial advice……..

Source: Everything I’ve Learned About Personal Finance in 10 Sentences

How Islamic Finance Could Save the Planet

With mystic peaks, coral reefs, jungles and over 4,000 hours of annual sunlight, Malaysia’s Sabah state is an ideal candidate for clean energy initiatives. But what makes its 50-megawatt solar project, launched in April 2018, special isn’t just its potential to provide electricity to this northern Borneo region. The project is the outcome of funds raised from the world’s first Islamic green bond, with a value of $60 million, unveiled by Malaysia’s Securities Commission in July 2017………..

Source: How Islamic Finance Could Save the Planet

Women and Money: Why It’s Important to Take Control of Your Finances – Carrie Schwab Pomerantz

I’d like to use this March focus on women to encourage women everywhere to take charge of their finances as an important step in negotiating a better situation for themselves. To me, financial independence is empowering. By taking charge of your finances, you’re taking charge of your life. Here are some ideas on how to do just that.

1) financial independence

Women are known to put others’ needs first, but when it comes to retirement, you have to think of yourself. Take charge of your own financial future by taking full advantage of a company retirement plan.

Contribute at least up to the company match, more if possible. Don’t have a company plan? Open an IRA. The point is to save as much as you can as soon as you can.

Start in your twenties and you can comfortably save about 10-15 percent of your annual salary (including any contributions from your employer) and you may not have to increase that percentage for the rest of your working years. Start later and that percentage goes up precipitously.

For instance, if you wait until age 40, you’d have to sock away a minimum of 25 percent of your annual salary. That may sound like a lot, butrealize that retirement can be long. Many financial planners recommend that you anticipate living until 90-plus in retirement planning calculations. You need to be prepared.

2) Don’t just save—invest

Part of that preparation is learning to make the most of your money, and that means investing. Your first thought may be that you don’t want to take the risk, and market ups and downs are definitely a reality. But being too cautious can also put you at a disadvantage.

Especially for something with a longer time horizon such as retirement, you ideally want a diversified portfolio that’s positioned for growth. This means having a portion of your money invested in the stock market and accepting the associated risk. While that can sound daunting, it doesn’t have to be because you don’t have to go it completely alone.

3) Team up with an advisor

When it comes to investing and managing your money, having a support team can be a great confidence booster. Even if you’re just starting out—and especially as your assets grow—consider working with an advisor. I think of a financial advisor sort of like a personal trainer, someone to guide you and keep you going when you might otherwise be tempted to call it quits.

An advisor can help you look at the big picture, focus on retirement planning and build a well-diversified portfolio. And working with an advisor who understands you and your goals can be a major source of peace of mind. So think about the type of person you’d be most comfortable with. A lot of women prefer to work with a female advisor.

But gender aside, look for someone with whom you can communicate easily. Of course, how much you want to work with an advisor is up to you—a one-time consultation, periodic check-ins, or full-time asset management. Just make sure you understand how and how much your advisor is paid. Costs matter.

4) Have a financial plan

To really get on top of your finances, you may want to work with a Certified Financial Planner (CFP) professional to develop a comprehensive financial plan. A 2012 Schwab study on women’s confidence in managing their finances indicated that women with a written financial plan were significantly more confident than women without one.

I’m a huge advocate of having a financial plan because it goes beyond just saving and investing, and helps you look holistically at all the interrelated parts of your financial life. It reviews your income, expenses, investments, retirement planning, insurance coverage, income tax liability, estate planning needs and—most importantly—how they all work together. Plus it gives you a roadmap to follow and a plan of action.

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