Make Investing a High Priority in Your Financial Life

Some people are afraid to invest their money because they are afraid of losing it. Others are completely unsure of what investing their money entails and what it can do for them. Investing is a building block for a healthy financial standing if done properly and with some education. Don’t worry, you won’t have to go back to school! Today we are going to talk about ways to invest, why you should invest, and who to talk to get the assistance and understanding you need.

Leave Your Legacy Behind

We don’t think all too often about what happens when we pass on. Who gets your belongings? Who’s in charge of your funeral? Who is paying for everything? What will happen to your kids?

If you think we are about to talk about estate planning, you are right. More specifically, estate and succession planning. Investing money into our homes means that we can pass that on to our loved ones when we pass on. Retirement accounts will also require beneficiaries so that not only can they pay for your funeral, but they can have some left over to take care of themselves. No one wants to leave their children with mountains of debts and headaches so an estate planner and tax specialist is who you should employ to guarantee easier transition of an estate.

Build Your Savings

If you check around at interest rates for savings accounts, you will see that they are pretty dismal. When we are actively attempting to save our money for a vacation, much-needed home repairs, college fund for our children, or saving for an emergency fund, there are some low-risk options that can help you put aside some cash that will grow faster than your standard savings account.

Money market accounts are a popular option that offers a higher interest rate to grow your money. Most banks require a specific amount of money that has to be maintained in the account at all times. The great thing, and also the worse thing, is that your money is still accessible should you face an emergency and need it.

Certificates of Deposit are your next go-to for investing. You can purchase a certificate for as little as $25 at a credit union or $100 at a traditional bank. This money is not available to you during the maturation period. That will range anywhere from 90 days to five years, the longer the better because the high rate of interest is compounded annually (in some cases daily) and you can earn larger sums of money over time. If you are brand new to investing, this is a great way to get started. Who can help you with money market accounts and certificate of deposits? The financial manager at your bank will be the one who can educate you and guide you to the right option for your needs.

Retire With Ease

Retiring without any financial planning is an incredibly scary endeavor and one that all of us should avoid. No matter how close you are to retire, make sure you are investing your money into some kind of retirement account so that you have it later.

If you are working at a company that offers 401K, by all means, take that option. With just a small percentage taken out of your paycheck, you can build money for later. Consult with a financial advisor at the investing company they are paired with to learn more about the risks involved. Since 401K’s are stock and bond investing, you will need to learn low-risk, medium-risk, and high-risk options and how they can work for you.

Also, ask if your company does a matching program! If you are self-employed, check out Roth or SIMPLE IRA’s to invest your money in an easier manner. They both come with different tax options so you must talk with a financial planner or your CPA to ensure you are choosing wisely.

Investing often leads to strange money myths, like it’s too late to start saving, that inhibit us from making the most of our money. If you desire more money, you can do it with investing!

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Tips for Securing a Car Loan

Owning a car is something that many people dream of. However, many simply do not have the money needed to buy one. There is a way for this dream to become a reality. Getting a car loan has allowed millions of people the ability to buy a car and slowly pay for it in monthly installments. There is obviously interest that will also need to be paid.
You might be seriously thinking about buying a car at some point in the near future. If this is the case, you need to explore all of your options where car loans are concerned. You would be wise to educate yourself. This will help to ensure that you get the best car loan at the lowest possible interest rate. Here are some tips that will be very useful when it comes to buying a car with a loan.

Get a copy of your credit report.

You need to take a look at your credit report before you start applying for car loans. You are legally entitled to one free credit report each year from the major credit bureaus.
It is important to keep tabs on what your credit report says. This is because mistakes could be listed on your credit report that could have a negative impact on your credit score. This is something that is more common than most people believe it to be. You need to report any mistakes you find immediately to the credit bureau that issued the report. Make sure they remove the erroneous information and provide you with an updated report and credit score.
You need to be sure that you have the highest credit score possible so that you give yourself the best chance of your car loan being approved.

Talk to people you know and find out where they received their car loans.

Your next step should be to consult with all of your friends and family members. Talking to these people might give you some good ideas about where you should apply for auto loans. Find out how much interest all of these people are paying on their loans.  What made them choose that particular lender?
You should get the opinions of as many people as possible. You can learn from the mistakes of these people. Acquiring knowledge from these people will make your own quest to secure a car loan go much more smoothly.

Make the term of your loan as short as possible.

There are many people who like the idea of stretching out the term of their car loan. This gives them a very long time to pay off the loan. Their monthly payments are also smaller by doing this. However, the major drawback to doing this is the fact that you will end up paying considerably more interest over the course of the loan. This is why you need to shorten the term of your loan as much as you can while still being able to afford the monthly payments.
This will save you quite a bit of money in the long run.

Go to different lenders and compare the interest rates they offer you.

It is very important for you to understand that you will not get the same interest rate from every lender. In fact, you will be amazed to discover how different their interest rates can be.
You have absolutely nothing to lose by taking some time and contacting as many lenders as you can possibly find in your area. This will give you the best chance of finding a suitable rate that you can afford. It is especially important for people with low credit scores to do this. Lenders will typically give a higher interest rate to people with a low credit score.

Find out what interest rates online lenders will offer you.

Some people who are not Internet savvy may only go to their local credit unions and banks when they are searching for the ideal car loan. However, there are a wide variety of online lenders that you can also try. You can simply fill out their application. They will tell you the interest rate they will give to you in the event you decide to take out a loan from them. You can then use this interest rate to negotiate a better rate with your local credit unions and banks.
You need to use every advantage available to you when you are trying to get the lowest possible interest rate. You need to always look out for your own best interests.

Try to make at least a 20 percent down payment.

Your goal when taking out a loan should always be to pay as little interest as possible. Therefore, you should save up enough money before you apply for a car loan so you will be able to pay at least 20 percent of it right away. Pay more than this amount if you can afford it. You don’t want to get into a situation where the interest makes your loan cost more money than the value of the car.
Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

How I Calculate Our Net Worth

I used to post net worth updates, but they were my least commented upon posts.  So, I stopped. But, I still track our household net worth every month.  This goes back over fifteen years.  Things change and evolve, but the process has largely stayed the same.  Here is how I calculate our net worth.

When

I always do our net worth on the 7th of the month (give or take a day). The reason for this is because a lot of transactions take place around the 1st of the month, and can take a couple of days to clear. I want to make sure that everything is processed. Waiting a couple of days past the first of the month is the best way to make that happen. These things include:

  • Mortgage payments
  • Credit card payments
  • Transfers from end-of-the-month paychecks to savings / money market accounts

How

I love Microsoft Excel for my tracking.  It’s gotten complicated, but

  • Snapshot – This is a snapshot of the most current month.  It’s broken down into the categories which I will outline in a bit. This summarizes everything that I track and rolls it up into several categories.
  • History – I roll up the high level numbers each month into a month-by-month breakdown. This lets me see how things have progressed over time.
  • Balance Sheet – This is where I separate the assets from the liabilities.  Yes, I took lots of accounting classes in college.
  • Debt – I track all outstanding debts and their balances.
  • Savings – This is how we track any money that’s set aside for savings.  I break it down by goals that we have earmarked.
  • Monthly Summary – This is a hybrid of an Income Statement and Cash Flow statement.  I track our bank account activity and spot any trends.
  • Ledger – This tracks our day to day spending from our bank account and credit cards.
  • In Case of Emergency – I have a tab dedicated to outlining all of the required information in the event that something were to happen to me or my wife, such as account locations, website addresses, etc.
  • A few other tabs – I track a few other things.  These include charitable contributions, dividends , cost basis for investments, etc. These aren’t used every month but kept pretty up to date, and help around tax time.

With all of this, I have pretty much everything I need all the time. I actually had attempted to use out of the box tools in the past.  These restricted me.  I couldn’t manipulate the numbers to the degree that I like.

The Calculations

I break our net worth down into the following four major categories:

  • Housing
  • Automobiles / Camper
  • Current (Liquid) Assets and Debt
  • Retirement Assets

Here’s a breakdown of each of those:

Housing

I track the value of our house based on three things: Zillow, our city estimates, and surrounding sales.  For net worth purposes, I actually deduct the anticipated selling costs that would be involved with selling the house. So, I write 7.75% off.The reason for this is simple: The only reason I would ever have true interest in the value of my house is if we had to sell it.  This calculation would give us the estimated cash in hand after a sale.

From there, I subtract our outstanding mortgage principle to give the total value of our home.

Automobiles / RVs

Any cars or RVs we own, I track here.  I use Kelley Blue book and estimates based on current sales.  I usually knock off about 10% just to be safe.  Again, this would give me the cash on hand if everything was liquidated.

Current Assets and Debt

This is where I track anything that is cash or could easily be converted to cash, as well as what we owe for anything outside of the mortgage and car payments.  So, the things that I currently track are:

  • All bank accounts
  • All investment accounts
  • Health Savings accounts
  • Outstanding Credit Card balance (debt) – note: we pay our balance in full every month but this tracks the current outstanding balance at the time I do the monthly check
  • Student Loans (debt)

Retirement Accounts

This is pretty self explanatory, but tracks all investment accounts.

Total Net Worth

Once per month, I log into accounts for each of the accounts and enter the numbers. From there, it calculates the value by each category and those totals equal our net worth.

That’s it! Overall, I know it isn’t the perfect system but it works well for me. I like it because it gives me the information I need.  It’s probably complicated in some ways, but I think that’s OK.  With money and finance, you have to make it work for you.  This method does just that.  There’s always a tweak I could make here and there, but overall, his works.

Readers, how do you track your net worth?  Do you have a system that you use or an off the shelf package?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Friday Favorites: December 1, 2017

Happy December.  How have things been with you?  Here’s a roundup of my favorite posts over the past couple of weeks.  Also, here’s a little tidbit of what’s going on.  I hope things are good with you!

Pain In The….

I’ve really started to enjoy running. Unfortunately, for the second time in the last three years, I’ve had to take a break.  I started feeling a pain in my foot and recognized the signs of plantar fasciitis.  Like last time, I know taking a timeout from running will help.

This time, I’ve decided to work on the elliptical machine as a replacement.  This has been going all right, except until this week.  I’ve been upping my intensity, and guess I pushed it a little harder than I should have.  I pulled a muscle in my calf.  This is also on the right side of my body!

Thankfully, the strain seems to be very mild.  After three days of hobbling around, I could feel improvement.  With a mild strain, I should hopefully be back to normal within a week.

Still, not much fun!

Favorite Posts

Here are some favorite personal finance posts over the last couple of weeks.

Have a great weekend!

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.