Personal Finance News

Latest News About Personal Finance

7 Debt Payoffs That Boost Your Credit Score the Most

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Improving your credit score can save you money in the long run. The difference between a good credit score and a low score can cost thousands of dollars per year. That means you can accumulate more wealth during your lifetime by having a higher credit score. Here are 7 debt payoffs that boost your credit score the most by Tim Lemke of Wise Bread:

  1. Anything that’s on time
  2. Debt with the highest interest rates
  3. Credit cards with the lowest credit limits
  4. Anything that gets your credit utilization under 30%
  5. Your student loans
  6. Small balances on numerous credit cards
  7. Any past-due bills

(wisebread.com)

Fingerprints to be Tested as ‘Currency’

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Iphone owners already use fingerprint to unlock their phone, but to buy things using their fingerprints? Starting this summer Japanese government will let foreign tourists to shop using only their fingerprints. Using fingerprint as a new payment would “prevent crime and relieve users from the necessity of carrying cash or credit cards.” The government plans to roll out the new technology by the 2020 Tokyo Olympic. By the end of this month Tokyo-based Aeon Bank will allow customers to withdraw cash from automatic teller machines using only fingerprints for identification and omitting the use of debit cards. “The system is also superior in the area of security, such as preventing people from impersonating our customers,” an official from the bank said. Last year this new technology was already introduced on a trial basis in the Huis Ten Bosch theme park in which visitors can make payments with just their fingerprints. The government aims to showcase the country’s advanced technology when tourists visit Japan for the Tokyo Olympics and Paralympics.

 

You Should Almost Never Check Your 401(k) Statement

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401(k) is a retirement account sponsored by an employer. It lets you save and invest a percentage of your paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account. 401(k) statement is the one financial statement you should almost never look at. Ben Walsh writes on Huffington Post that “once you understand the basics of your 401(k) and set it up, the only decisions left to make are ones that will hurt you in the long run. Instead, the best thing to do with your 401(k) is set it and forget it.” The recommended investment vehicles are index funds or target date funds. With an index fund, you will capture the total return while the cost is super low. The less you pay in fees, the more you keep in your investment—it’s that simple. “Once you’ve set up your super boring investments, you’re done. Maybe look at your 401(k) around tax time to remind yourself that you made a good decision,” said Walsh. (huffingtonpost.com)

Wall Street Analyst Afraids the Big Short Movie Has Discouraged Investors From Buying Risky Auto Loans

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Morgan Stanley Analyst fears that people might be worried about subprime auto bonds because of the Big Short movie. The risky auto loans bring profits to Wall Street by selling to naive borrowers then bundling into bonds and sold to investors. The analysis reads: “However, concerns about growing recessionary risks – and perhaps even the popularity of the recent movie The Big Short – have motivated investors to investigate any potential source of weakness. Consumer sectors that involve large initial outlays, such as housing and autos, provide a natural place to start. Combine that with recent headlines from Fitch suggesting that delinquencies in some sectors of the auto ABS market have reached 20- year highs, and you get a target sector for investors’ concerns. Those concerns are not without merit, at least as far as delinquencies are concerned. It is interesting to highlight that as the housing market continues to heal from its post-crisis depths, mortgage delinquencies have been on a steady decline while auto delinquencies have been going in the opposite direction.” (bloomberg.com)

9 Travel and Hotel Safety Tips from CIA Operative

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Drew Dwyer, a veteran of the Marines and a former CIA operative, shares 9 travel and hotel safety tips. Whether you travel for leisure or for business, you can learn from these safety tips:

  1. Acquire or make a copy of the fire escape plan on the back of your door. Most of these just slide out.
  2. Do not stay on the ground or the top floor. The ground floor is readily accessible to intruders and the top floor does not allow any room to maneuver. The first or second (European) floors allow access for most third world country emergency vehicles.
  3. Keep the “Do Not Disturb” sign on the door, even when you are not there.
  4. Always assume the room is bugged. Keep the radio or TV turned on with the volume on low at all times — even when you are not in the room.
  5. Keep the drapes/blinds pulled at all times, even when unoccupied.
  6. Keep a light on in the room when unoccupied.
  7. Keep a small “bug-out bag” packed with must-have items (money, ID, passport, etc.) in the event of an emergency departure.
  8. Carry a motion alarm that can be placed over the doorknob. They are about $20 and can be found in most electronics stores.
  9. Keep a flashlight next to the bed and within arm’s reach.

(sofrep.com)

Six Habits of The Best Conversationalists

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Stephanie Vozza writes on Fast Company: “Some people have the gift of gab, and can talk to anyone about anything. And some people struggle to make small talk. What separates the two isn’t knowing what to talk about; it’s polishing up your communication skills so you can keep a good conversation going.” She then explains in detail six habits that the best conversationalists have mastered:

  1. They listen more than they talk
  2. They don’t always interject their experiences
  3. They admit what they don’t know
  4. They are well read
  5. They look for cues
  6. They Let go of the details

(fastcompany.com)

What Successful Entrepreneurs Do When They Wake Up

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Brittney Helmrich writes on news.com.au: “How you start your morning sets the tone for the rest of your day, so your morning routine is important, especially when you’re in charge of an entire company.” Here are what successful entrepreneurs do when they wake up:

  • “I go for a morning run. No set distance, no set time — I just set my alarm for 5:30am, jump out of bed, put on my running gear and run until I’m tired or bored, then walk back. Rain or shine, it doesn’t matter.” – Neil Andrew, account director and founder, Piccana
  • “I make the bed. It helps me start every day off with knowing something is already accomplished.” – Brad Cummins, founder, Local Life Agents
  • “The first thing I do is kiss my wife. My family is my foundation and core. I then meditate for about 15 minutes to draw in positivity and set the tone for the rest of my day. If I am positive, I will attract positivity and success.” – Ken Collis, CEO and owner, TLK Fusion

(news.com.au)

5 Ways to Protect Yourself from Retirement Rip-Offs

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The new rule, that protects retirement savers by setting a fiduciary standard for financial brokers, won’t be fully enacted until 2018. Meanwhile financial journalist Kathy Kristof pointed out 5 ways to avoid retirement rip-offs:

  1. Don’t buy from the bank as bankers are notorious for selling high-cost investments of dubious value
  2. Beware advisers inviting you to learn about retirement investments at hosted meals
  3. Stick to what you understand as good investments are straightforward
  4. Read as fiduciary rules will require anyone who sells retirement products to spell out any potential conflicts of interest
  5. Ask if you don’t understand an investment

(cbsnews.com)

You Can Pay Your Taxes in Cash at 7-Eleven

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In an effort to make it easier for individuals who may not have a bank account or a credit card, the IRS lets you pay your taxes in cash at 7-Eleven. “Taxpayers have many options to pay their tax bills by direct debit, a check or a credit card, but this provides a new way for people who can only pay their taxes in cash without having to travel to an IRS Taxpayer Assistance Center,” IRS Commissioner John Koskinen said in a statement. To pay in cash, a taxpayer has to visit the IRS.gov payments page, select the cash option, follow the instructions and wait for a confirmation email from OfficialPayments.com. This payment option is available at participating stores in 34 states. There’s a $1,000 payment limit per day and a $3.99 fee per payment. (cbsnews.com)

Global Impact Democratizes Philanthropy Through Growfund

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An anonymous writes: “Global Impact, whose mission is to build partnerships and resources for the world’s most vulnerable people, announced the launch of Growfund—an online, community-based charitable giving platform. Growfund is a donor-advised fund that operates like a personal foundation or a 401(k) plan. Contributions can be saved or invested, grown over time and granted to the charities and causes that matter most to the donor. Unlike other donor-advised funds that require sizeable contributions before the funds are invested, Growfund contributions can be invested with the first dollar.” (charity.org)

U.S. Rule Aimed at Protecting Retirement Savers Got Weakened Due to Pressure from Industry

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Bowing to pressure from the financial services industry the Obama administration weakens retirement advice rule, announced by the Department of Labor. The new rule intended to protecting retirement savers from profit-hungry brokers by setting a fiduciary standard for financial brokers and requiring them to put clients’ best interests before their own. As reported by Reuters, “unlike the draft proposal, the final rule does not restrict brokers from pushing proprietary products, splitting revenue with creators of funds they promote, or recommending risky, high-fee investments in alternative assets and certain annuities.” The final version also loosened guidelines on pay, allowing advisers to collect “common types of compensation,” such as commissions and revenue-sharing. Knut Rostad, an investor advocate who chairs the Institute for the Fiduciary Standard, said he was disappointed that the final rule was not tougher, calling it “a major defeat for investors, period.” As Financial firms continue telling common investors that we need Wall Street and money managers, investors have to educate ourselves about investing and personal finance. Cost is everything. The more we pay in fees, the less we have for ourselves. (reuters.com)

Alibaba Surpasses Walmart As Largest Retail Company In The World

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In SEC filing on April 5, 2016, China’s e-commerce behemoth Alibaba has officially surpassed Walmart as the world’s largest retailer. That means Alibaba has surpassed the $482.1 billion in 2015 revenues reported by Walmart. This success marks a paradigm shift as China has switched from offline to online where the world’s biggest e-commerce company is now bigger than the world’s largest brick and mortar retailer. “We took 13 years to demonstrate the power of a different business model compared with brick-and-mortar retailers,” Alibaba said in the statement to the China Daily. “In 2024, we want to be a business platform serving 2 billion consumers and tens of millions of enterprises at home and abroad,” Alibaba CEO Zhang Yong told journalists. (rt.com)

How to Be a Better Money Role Model for Your Child

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Children tend to grow up to be a lot like their parents with some behaviors related to biological factors and some to environmental factors. Children who live in homes where parents smoke are more likely to become smokers. Parents with bad money management might raise children with the same affliction. “In all things, from eating to getting dressed to interacting with our partners to paying for a restaurant meal, we are their models,” said personal finance writer Kimberly Palmer on how to be a better money role model for your child. Palmer pointed out that talking about personal finance to your kid is essential but it’s even more important to take control of family finances and to demonstrate that behavior to your kid. “The moms I interviewed who I admire most when it comes to money were in constant communication with their children about the financial choices they were making for their families. Those useful conversations include the mistakes that they made with money; how and why they earn money and what it pays for; and how they are saving for big goals such as a family vacation or college tuition,” Palmer explained. (washingtonpost.com)

4 Smart Steps to Retire Rich When You’re Young

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As mentioned by Albert Einstein, compound interest is the eighth wonder of the world. When you’re young, time is on your side. Even a small monthly contribution will gradually grow into a huge nest egg. Here are four smart steps to retire rich when you’re young:

  1. Enroll in the 401(k)
  2. Fund a Roth IRA
  3. Pay off student loans — in good time
  4. Resist cashing out a 401(k)

(kiplinger.com)

Consumer Bureau Finally Shut Down Fraudulent Student Debt Relief Firm

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The Consumer Financial Protection Bureau finally halted Student Aid Institute, based in San Diego, for illegally tricking borrowers into paying fees for federal benefits. Many companies in this shady industry prey on holders of the $1.3 trillion outstanding in student debt by misleading borrowers with terms like “student loan forgiveness.” The fraudulent companies pretend to help borrowers obtain lower student loan payments or a reduction in debt. “We see more and more companies and websites demanding large upfront fees to help student loan borrowers enroll in income-driven plans that are available for free,” said Richard Cordray, bureau’s director. Student Aid Institute received  millions of dollars in fees by charging borrowers hundreds of dollars upfront and $39 a month in maintenance fees. Persis Yu, director of the National Consumer Law Center’s student loan borrower assistance project, said the debt relief companies were “a huge problem.” In some cases, she said, the companies take over management of a student’s debt, making the minimum payment to the lender but charging the student additional fees that it pockets. (nytimes.com)