Archive for April, 2016

Tech Upgrades that Younger Renters are Looking for

Monday, April 25th, 2016

tech upgrades

When renting your property, you have to know and cater to your target market. If you want to sell to younger people, it is important to focus on technological upgrades to make the property more attractive to them. Taking the time to upgrade to solar power, or making the home as smart and technologically advanced as possible will entice younger buyers. These upgrades are easy to make yourself, and with tax credits, savings on utilities, and environmental impact, the advantages are endless.

What’s the Deal with Solar Power?

To a younger renter, being ecofriendly is a top priority. They want to be sustainable, efficient and use renewable resources whenever possible to light, heat and cool their home. Another advantage of outfitting a home with solar power capabilities is that excess power may be sold back to the local utility company. While adding solar panels or other equipment may be expensive at first, the new renter of the home will save money in the long run, which may entice them to pay a slightly higher price when it comes to signing a lease.

Smart Homes Equal Secure Homes

Everyone can relate to the stress of not knowing whether or not the door has been locked or if the thermostat was accidentally left on. If you have these tech upgrades, you can control your entire home from your phone or tablet. With one push or swipe, the owner of a smart home can turn down the heat or make sure that the door is locked.

Smart homes can even be wired to allow an individual to keep watch of his or her property via a smartphone or tablet through a webcam. This may be seen as an added benefit to younger buyers who may be parents who leave their kids at home with a babysitter or want to keep an eye on the dog while they are at work. For instance, having a product like the Ring Video Doorbell wired into your home, you can view whoever is at your door from your phone or tablet wherever you happen to be.

Smart Homes are Easier to Maintain

If your car is having trouble starting or the brakes are starting to go, you may be notified by the car itself through an onboard diagnostic report. The same thing is true with your smart appliances, so if the refrigerator is having trouble maintaining a proper temperature or the washing machine is using more water than normal, you will be notified as the issue happens.

This allows you to troubleshoot minor issues before they become larger and more expensive to maintain. If the fridge or washer decided to overheat or overflow before you knew there was an issue, you could be dealing with significant water, mold and mildew issues. Nest makes WiFi connected thermostats, smoke and carbon dioxide detectors that can alert you to a problem within your home before it is too late to get yourself or others out.

New Features Are Often More Efficient

Adding new appliances, upgrading the home’s siding and putting in new lights and windows can reduce the amount of energy it takes to heat or cool a home. This will create a living space that is comfortable no matter how warm or cold it gets. It also allows you to maintain specific temperatures in each room of the house, which means that you don’t have to heat or cool rooms that no one occupies for most of the day. It also means that the home will have better airflow, which will improve ventilation and prevent attics or basements from becoming too moist due to stagnant air.

Younger renters today have a penchant for technology and being a good steward over the environment. Therefore, making upgrades that can help improve efficiency and make it easier to run the house from afar can help you make the sale to a younger renter if that is who you are targeting.

How to Navigate your First 401(k)/Retirement Plan

Monday, April 18th, 2016

First 401k

Whether you’ve just started your first corporate gig, or if you’ve just been thinking about securing your future, you’ve probably heard the term “401(k)” thrown around a lot, and how you should open one that’s being offered through your workplace. So what is a 401(k) exactly?

401(k) in a Nutshell

Having the (k) in its name fools people into thinking it’s a very complex financial product or plan to grasp. But plain and simple, 401(k) plans are retirement accounts set up and sponsored by your employer. For self-employed professionals like freelance writers or home-based accountants, you can open an individual 401(k) plan.

How it works is you set aside a certain portion of cash per month that’s automatically deducted from your paycheck. The amount to be set aside depends on how much you’ve elected to allocate for the retirement account. You have the choice of investing in a broad range of assets, such as stocks and bonds, which can either be chosen from a prepared group of assets or selected manually by you.

Benefits of Owning a 401(k)

For starters, the monthly investments put into your 401(k) can compound into a large sum of cash, given that you maximize your monthly contributions and do not withdraw anything from the account prematurely.

Through a 401(k) account, your employer may elect to match every dollar of your contributions, which is basically free money. Most employers have a 401(k) match program, and they will usually match up to $4, if not dollar-for-dollar.

Just because you put your money in a retirement account, it doesn’t mean you completely lock up the cash until you retire. It’s highly advised against, but you can borrow money from the account for particular purposes, such as purchasing a home, sending your kid to college, or paying for unforeseen medical expenses.

One downside to borrowing funds from your 401(k) is that you are usually charged interest that must be paid back. But as long as you work for the employer sponsoring your 401(k) plan that you used to secure the loan, you will not be liable for any income taxes.

Building Your 401(k)

Choosing the assets you wish to invest in through your 401(k) can be intimidating, especially for those who have close to zero experience and knowledge with regards to financial markets. Fortunately, your employer will already construct a list of asset choices with the help of an investment broker. The downside to this is that you get stuck with whatever list they come up with.

As a general rule of thumb, you should build a portfolio that aligns with your risk profile. There are basically five types of funds you will be choosing from – stocks, target-date, blended-fund, bonds/managed, and money market. Thorough analysis of each group of assets should give you a better grasp of which ones to choose.

The next thing you’ll have to figure out is the monthly contributions you want to set aside for your 401(k). It all comes down to your monthly expenses, for instance, you obviously want to make sure you have sufficient income to pay the bills and buy your family’s basic needs. Other factors that merit consideration include employer dollar matching and maximum allowed contributions.

Investing can be somewhat tedious, yet is something that’s crucial for your future self. Make use of all the resources given to you to make solid decisions, and navigate your first 401(k) plan effectively, and with confidence.

Seven Smart Changes to Make to Start Saving for Retirement

Monday, April 11th, 2016

Smart Savings

Make no mistake, the power of compound interest is bigger than you may think. The best day to start saving for your retirement is on the first day of your first job, and the next best day is the soonest day when you possibly can start. Even if contributions begin as small drops, those can quickly accumulate into a bucket of future security for you and your family. Many people don’t save because they think there’s no room in their budget, but with little changes and some planning, you would be surprised at what opens up. Not sure how to begin? Here are seven ways:

1. Save First

The best way to make room in your budget for savings and retirement is to make them the first thing taken out of your account. Many retirement programs both private and ones at work take a percentage of your paycheck, so if you start small with one or two percent, you probably won’t even miss it.

2. Use Cash

Another way to make sure there’s enough room is to set your budget for extraneous items like coffee and restaurants, and to take that money out in cash each week. This will prevent overspending and cutting into your savings budget.

3. Consolidate

If you have multiple debts that are stressing you out, consider consolidating all of them into one debt. Unsecured debts are usually on par with credit card interest rates. However, if you can put it into a lower interest secured location like a home equity loan, it can make a big difference in your monthly payments, leaving more for retirement.

4. Round it Up

There are a number of savings programs out there now that will take your purchases and round them up to the next dollar, then put those pennies into savings for you. If you make a lot of small payments, this is a great way to save. This is effortlessly done by banking programs who will automatically do it, or by the finance apps for smartphones. Simply link your credit cards and bank accounts, and it will keep a record of your purchases, and make a purchase totaling your roundup minimum once you reach it. This is usually around $5-10.

5. Sell Stuff

If you want to have a little extra money to put toward savings, consider selling some of the things you don’t want anymore online. Craigslist and eBay are two great choices if you are selling things in their natural state. If you have antiques, refurbished or not, or craftier items, then a website like Etsy might be a better choice. Either way, it’s a quick way to get cash or savings.

6. Do Free Stuff

If you find that a large amount of your money is going to entertainment, then you might want to incorporate more free stuff. Running outside over a gym membership, libraries over bookstores, and free cultural events over movies are just some of the ways to accomplish this. Even cutting back on paid-ticket events by half can make a big difference over time.

7. Ignore Raises

If you are in a business that gives annual cost of living raises, then begin to ignore them, and put them into your retirement instead. This will feel like no change for your daily life, but a big change for your retirement. If you are facing annual rent increases or other costs that makes it hard to function like this, consider using half of the increase for retirement, and the other half for your living expenses. That will allow you to enjoy the raise, but also to save more before you miss the money.

The biggest trick to saving more is simply to make it as if the money was never there in the first place. Saving first to take away the temptation, rigid spending limits limited by cash, selling what you had and auto-saving are just a few of the ways that you can help yourself into a secure retirement. Don’t wait, though. Start today.

Using a Self-Directed IRA to Invest an a Startup

Monday, April 4th, 2016

SDIRA startup

It’s obvious to state that self-directed IRAs are different traditional IRAs. because that’s the entire point of a self-directed IRA. The individual investing in this type of IRA directs the investment choices that impact their retirement, as opposed to being stuck in stocks and bonds. This type of IRA is for people who want to invest in assets they can’t invest in using a traditional IRA, and are willing and ready to steer their lives in their own direction. These investments can include real estate, precious metals, farms, and startups. So what are the pros and cons?

Finding a Custodian

A requirement for someone to open a self-directed IRA is to first have a custodian that offers alternative retirement plans, like self-directed IRAs. Not all custodians offer much outside of the traditional, so choose wisely. The role of the custodian is considered to be passive, as they do not give the holder of the self-directed IRA any investment advice. Their main job is to provide oversight for the IRA, and proper record keeping for the assets.

Investing

It starts when a person with a self-directed IRA wants to invest in a startup, the main reason is to diversify their retirement portfolio. Any growth or earnings that result from this type of investment accumulates tax-free. This also includes any possible interest or capital gains as well as dividend income and more that result from the initial investment. All of this income can all be tax-deferred. Even an experienced investor considering the use their self-directed IRA funds to invest in a startup business should contact a financial professional, because this is the type of investment that comes with a high level of risk, and possible financial loss.

Benefits

When an investor does not plan to take any funds out of their self-directed IRA for a number of years, putting the IRA funds into a startup company might be a good investment. This could be part of an investor’s long-term strategy, as it has the potential for providing a high level of growth and income.

Limitations

There are legal limitations when it comes to investing funds in a self-directed IRA. The main limitation is what’s known as “self-dealing”. This rule states that a person providing funds from a self-directed IRA, to be a key investor in the company, cannot be the owner of the company, or own more than 50 percent of the company. This means they can’t be the main decision-maker for the startup, or, more ideally, involved with the business in anyway, other than being the investor. This type of investor is also not able to hold a position within the company that prevents them from being fired. It’s also not permitted for this person to invest in a business that is owned by one of their immediate family members (child or spouse). It is. however, acceptable for them to invest in a startup that’s owned by their sibling, friend or business partner.

Risks

Should a person with a self-directed IRA invest in a startup and not follow the rules or obey the limitations, it could cause them serious problems, to say the least. In the a worst case, the investor’s entire IRA could be immediately subjected to taxation.
Investing in a startup should never keep the investor from taking their required minimum distribution (RMD), starting when they turn 70 1/2. Not taking this distribution could lead to a fine of up to 50 percent of the required payout.

While there are risks involved, as any investment has, many investors would say that the risk is worth it.