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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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12 Things You Should Do To Save Money In October

1

In today’s world, it’s more important than ever to prepare for your financial future.

And one of the easiest ways to add to your nest-egg is to simply cut your biggest household expenses and save more of your hard earned money.

We often forget some of the golden rules to saving that our parents taught us. Here’s a quick list of things you can do to save on bills in 2019. No matter your circumstance, there’s something here that everyone can use like cutting down your mortgage bill and save on utilities.

1. Take Full Advantage Of These Tax Deductions

Owning a home can be very lucrative. Seriously, owning a home can not only give you a cheaper monthly payment than renting but in many cases, the tax benefits make the decision a no-brainer.

Here are a few of the larger deductions that you need to be sure to take:

Interest you pay on your mortgage: If you own a home and don’t have a mortgage greater than $750,000, you can deduct the interest you pay on the loan. This is one of the biggest benefits to owning a home versus renting–as you could get massive deductions at tax time. The limit used to be $1 million, but the Tax Cuts and Jobs Act of 2017 (TCJA) reduced the limit and made some clarifications on deducting interest from a home equity line of credit.

Property taxes: Another awesome benefit to owning a home is the ability to deduct your property taxes. Before TCJA, the rules were a little more flexible and you were able to deduct the entirety of your property taxes. Now things have a changed a bit. Under the new law, you can deduct up to $10,000. The deduction for state and local income taxes was combined with the deduction for state and local property taxes, too.

Tax incentives for energy-efficient upgrades: While most of the tax incentives for making energy-efficient upgrades to your home have gone away, there are still a couple worth noting. You can still claim tax deductions on solar energy–both for electric and water heating equipment, through 2021. The longer you wait, though, the less money you’ll get back. Here’s the percentage of equipment you can deduct, based on time of installation:

Between January 1, 2017, and December 31, 2019 – 30% of the expenditures are eligible for the credit
Between January 1, 2020, and December 31, 2020 – 26%
Between January 1, 2021, and December 31, 2012 – 22%

2. Use Government Rebates To Get Solar Panels And Slash Your Energy Bills

Warning: Do not pay your next energy bill until you read this…

This is the 1 simple truth your power company doesn’t want you to know. There is a new policy in 2019 that qualifies homeowners who live in specific zip codes to be eligible for $1,000’s of Government funding to install solar panels. Has your power company told you that? Of course not. They hope homeowners don’t learn about this brilliant way to reduce your energy bill tremendously!

When homeowners check whether they qualify many are shocked that subsidies and rebates can cover a lot of the costs associated with installation so it greatly reduces the amount you’ll have to pay. Many may qualify for $0 down! Soon, you could be on your way to significantly reducing your electric bill in a matter of weeks.

Smart homeowners are setting out to do their own research and determine whether this new program lives up to its reputations. Over and over again, many are reporting back on their findings, with the most exciting part being that they are now able to save $1,000s a year on their own energy bill.

Estimate Your New Power Bill >>

3. Install CFLs or LED Lights Where You Can

New lighting technology has really come a long ways. Now although they do cost more than traditional incandescent bulbs, CFL and LED bulbs can last for years without having to replace them. You don’t even need to replace every bulb in the house at once. Even swapping just your four or five most-used light bulbs can save you $45 or more a year!

CFL vs. LED

CFLs, which use a quarter of the energy of incandescent bulbs and last for years, are the next cheapest option after traditional bulbs. But they also have some drawbacks: They take a while to warm up to full brightness, and they also contain a small amount of mercury.

Meanwhile, LEDs are more expensive. However, they’re getting cheaper all the time, and they are easily the best lighting option available: They light up instantly, are efficient as CFLs, produce a warm glow without getting hot to the touch, and can last for decades.

4. Automate Your Thermostat

One of the easiest things you can do to instantly start saving money on your heating and cooling bills is to get an automated thermostat. These smart thermostats will learn when you are home and make sure the home is at a comfortable setting during those hours.

You may even be able to get a rebate from your utility provider for installing one of these in your home. It’s a win-win!

5. Make A Grocery List

You ever go to the grocery store when you’re hungry and find yourself checking out with way more than you intended? We call this “Hunger Shopping” and it’s quite dangerous to your wallet!

Before going to get groceries, make a list of groceries that you need for the upcoming week. That way, you only buy what you’re intending to use and the amount that will get thrown away from being expired is kept to a minimal.

6. Buy in Bulk

One of the easiest things you can do to instantly start saving money is to buy in bulk! Retailers often give a MUCH better deal on products such as paper towel, toilet paper, detergent, etc if you buy in bulk.

This might seem like an obvious one, but we often forget how much money we waste by not buying in bulk.

7. Want a Patio? Consider Concrete Over Pavers

Building a patio can add great value to your home, as well as creating enjoyable outdoor living space for you and your family. But patios can come at a great cost.

When we decided to add a patio to our home, we looked at the different surface options carefully. Although many landscapers would recommend pavers over concrete because of their durability over time, we decided that the cost savings was more important to us. We personally love the clean look of concrete as well.

Now one thing to remember with concrete is that it WILL crack eventually. But if you have a good concrete crew, it should be prepped right where the cracks are minimal. So we expect to see cracks, but are hopeful that it will be minimal.

8. No Life Insurance? You’ll Want To Use This Brilliant Life Insurance Trick

If you don’t have life insurance, you better read this.

It’s not something any of us like to think about or plan for. But when the worst happens, it’s essential to know your family and loved ones are covered financially. That’s why it’s essential to have a life insurance. A good life insurance policy can help cover the cost of a mortgage, childcare costs and safeguard your family from inheriting any debts you might have.

 

But the sad truth is, a shocking number of Americans do not have a life insurance policy and their family is at financial risk if the worst should happen.

There is a service that is now allowing users to get free life insurance quotes from some of the top insurance companies out there. People are shocked at how cheap an excellent policy is after requesting their free quotes. But the reality is, life insurance rates are at a 20-year low and thanks to new program policies you could qualify for a great new policy at an extremely affordable price.

To get your free quote today, click below and complete a few questions (about 60 seconds). Once you’re done, you will be presented with choices and rates you never thought possible (no login required). Enjoy your savings!

Get Your Free Quote Now >>

9. Give Your Air Conditioner Some Space

Just like we need to breathe, your air conditioner needs space where it’s getting air easily. Many AC units are surrounded by shrubs that can restrict the airflow it needs to run efficiently. Take a few minutes this weekend and do the following:

Trim up any bushes that are are touching the unit so there is at least 1 foot of clearance

Clean up the ground for any loose debris or leaves

If the outside of the unit has a lot of debris clogging it up, consider having a professional service and clean it out

10. New Auto Insurance Policy

Here’s what auto insurance companies don’t want you to know…and what thousands of consumers are quickly learning about their current auto insurance plan:

If you’re paying more than $63 per month for auto insurance, this auto insurance comparison tool can help you check to see if you’re overpaying in a few minutes. This is something every driver should be doing every 6 months or so to ensure that they are getting the best deal.

 

Insurance companies are always competing to win your business, but if you turn a blind eye and keep the same policy in place for a long period of time, your rates might have increased. By checking rates, drivers saved an average of $531 per year with a new policy.

So do yourself a favor and do a quick comparison by filling out a short form (about 4 minutes). This is a fast way you can start saving on your auto bills.

Compare Auto Insurance Rates >>

11. Veterans Get a Massive Discount at Lowes

All active military and veterans are entitled to get a 10% discount on all in-store purchases at Lowe’s.

To make it even better, Lowe’s extends this offer to their spouses! Need new tools? How about new appliances? How about a kitchen remodel? Lowe’s carries a variety of things, so take advantage of this incredible discount!

12. Born Before 1985? Get $3,000/year Taken Off Your Mortgage With The Government’s New “Enhanced Relief” Program

Banks Don’t Want Homeowners Knowing This

Still unknown to many is a brilliant Government Program called the Freddie Mac Enhanced Relief Refinance Program (FMERR) that could benefit millions of Americans and reduce their payments by as much as $3,000 per year! You could bet the banks aren’t too thrilled about losing all that profit and might secretly hope homeowners don’t find out before time runs out.

 

So while the banks happily wait for this program to end, the Government is making a final push and urging homeowners to take advantage. This program is currently active but could be shut down at any given time in 2019. But the good news is that once you’re in, you’re in. If lowering your payments, paying off your mortgage faster, and even taking some cash out would help you, it’s vital you act now and see if you could qualify for FMERR or a better rate in today’s marketplace.

Source: https://article.expense-cutter.com/save-big-this-year-with-these-useful-tips-fbvlm

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It’s not about how much money you earn. It’s what you do with the money that matters. In this video, I’m going to show you a business strategy on how to manage your money. I’m not gonna tell you what to invest in. That’s not my role. Here are the best ideas of what the best professionals do to manage their money. Learn more from Tom LIVE at the next Summit event: https://tfi.media/2UC21rg ———— I hope you got some helpful tips and new ideas from this video. To ensure you don’t miss all my FREE training videos all you have to do is sign up here with your email: http://bit.ly/TomFerry-VideoTraining Get a FREE copy of my new book: http://bit.ly/2Bblstw Download FREE Agent Scripts and Resources: http://bit.ly/2iDEjpJ Tom Ferry Coaching: http://bit.ly/2eP8UlA Tom Ferry Events: http://bit.ly/2gQBjbD Join Tom’s VIP List: http://bit.ly/2sMb73n ————- Connect with me on my other social channels: Website – http://TomFerry.com Facebook – http://facebook.com/TomFerry Twitter – http://twitter.com/TomFerry YouTube – http://youtube.com/CoachTomFerry Instagram – http://instagram.com/TomFerry Podcast – http://soundcloud.com/CoachTomFerry

 

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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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

Buy Crypto With Credit or Debit Card Using EO.Finance

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Are The Stock Markets Too High To Start Investing? Why Market Timing Is Not A Prudent Strategy – Mark Eghrari

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A basic principle of investing – for any type of investment – is to buy low and sell high. Until recently the stock market had steadily climbed to an all-time high level; to many the subsequent dip is a clear sign that the market is too high to start investing. In fact, many think now is the time to get out. In short, they’re trying to time the market: To sell high, sit tight, and then once again buy low. (Or sell kind of high and then buy kind of low — and try to repeat the process over and over again…….

Read more: https://www.forbes.com/sites/markeghrari/2018/10/19/are-the-stock-markets-too-high-to-start-investing-why-market-timing-is-not-a-prudent-strategy/#169cc9a55457

 

 

 

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