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Jobs That Pay Well And Don’t Involve Much Stress

Happy BusinessmanWe probably don’t have to tell you that there are some jobs that pay very well but that come with a lot of stress. The company CareerCast recently reported on the most stressful jobs of 2015 and some of them don’t even pay that well. For example, one of the most stressful was firefighter followed by enlisted military personnel, airline pilot, police officer, actor (yes, actor) and broadcaster. Of these jobs, airline pilot pays the most at $98,410, while firefighters have a median annual salary $45,600 or only about half of what airline pilots average. Unfortunately the worse is enlisted military personnel as they have a median annual salary of just $28,840. Choose police officer and you could look forward to an average median salary of $56,980 while actors have a median annual salary of $46,070.

How about more than $100,000?

If you’d like to earn more than $100,000 a year without the kind of stress encountered by an airline pilot or police officer, there are alternatives. The company Payscale found at least nine jobs that come with high pay and low stress. The salaries given here are the national median annual total cash compensation, which includes salary or wage, plus bonuses, profit sharing, commissions and so on. The percentages quoted here are the percentages of the respondents that were surveyed and answered that their jobs were “relaxing,” “not stressful” or “a little stressful” when they were asked if their jobs were stressful.

Reservoir Engineer ($136,000, 66%)

You probably never thought about becoming a reservoir engineer or even what one does. Well, despite what you might think, these are not people that sit around and worry about reservoirs failing. What they do is modeling studies to determine the value of exploration and the potential production of oil fields.

Patent Attorney ($146,000, 54%)

The world is a swarm with ideas for new products and services and most have to be patented. Patent attorneys help protect the intellectual property of people and organizations. This job comes with the added advantage of continually being exposed to the latest in technology and assisting start-up companies with creating a portfolio of their intellectual properties.

small applications for big dataData Scientist, IT ($113,000, 59%)

Does the idea of analyzing and managing large caches of data interest you? The ever-growing importance of “big data” has created a growing need for data scientists. As companies decide to mine increasing amounts of data there should continue to be jobs for people in this job category.

Geophysicist ($115,000, 56%)

What does a geophysicist do? They typically analyze and study the earth’s shape and how layers, plates and other segments of the earth shift and move. Geophysicists also research the planet’s atmosphere as well as other physical phenomenon.

User-experience Research ($99,300, 62%)

This is a job that literally didn’t even exist just a few years ago. What these people do is analyze websites and stores and how customers interact with them. Called UX for short these people work to identify the needs and goals of the company’s users. They also interface with other of the company’s’ divisions or departments to keep the experiences of their customers efficient.

Principal Scientist ($117,000, 48%)

These are the people that lead research groups. They are managers in charge of scientists and review their employees’ performances annually while managing all of the company’s research.

Actuary ($97,700, 63%)

Actuaries calculate what risk costs financially. To be an actuary generally requires a degree in mathematics or statistics. Actuaries are generally employed by insurance companies but may also work for independent actuarial firms or for organizations whose goal is to keep abreast of the levels of the various risks they undertake.

Principle Software Engineer ($115,000, 48%)

These people supervise research into component design and new technologies. They generally develop, design and judge new software, and supervise system integrations within their companies.

How these jobs stack upyoung family smiling

As you can imagine Lead Software Engineers, Principal Scientists, and Data Scientists do have some amount of stress in their work. However, as you have read the highest percentages reported for people in these jobs who said that their jobs were “relaxing,”, not stressful” or “a little stressful” was 66% to a low of 48%. To put this another way, two thirds of the reservoir engineers surveyed felt their jobs were not very stressful versus the nearly half (48%) of Lead Software Engineers.

CareerCast predicts a worker’s stress level by looking at the typical demands of the job and the crises it comes with. It has a ranking system that considers 11 different job demands that can reasonably be expected to create stress. It affords a high score if a particular demand was a large part of the job, fewer points if the demand was a small part of the job and no points if that demand was not generally required. As you might guess, the higher the score the more stressful is the job.

The relationship between stress and income

CareerCasts’ 2015 Jobs Rated Report found that enlisted military members with the lowest median annual salary have the highest job-related stress score of 70.78 while police officers scored 50.82, actors 50.33, and broadcasters 50.30. In comparison, it found the least stressful jobs to be hairstylist at 5.47, audiologist at 6.30, tenured university professor at 6.94 and medical records technologist at 7.55. There are some jobs in this category that also pay well though not as well as Geophysicist or Principal Scientist. For example, the median annual salary of a tenured university professor is $95,000 while that of an audiologist is $69,720 and a dietician ‘s median annual salary is $58,240. On the other hand, some of the jobs with very low stress also come with very low pay. The median annual salary of a hairstylist is just $22,770 while that of a medical records technician is $34,160.

The net/net

As you can see there is a fairly tight correlation between job salary and education. Jobs such as Geophysicist, Lead Software Engineer and Reservoir Engineer may pay well and be less stressful but require at least a bachelor’s degree and possibly a graduate degree. A tenured university professor may make good money without much stress but will need at least a master’s degree and quite possibly a PhD. Conversely, jobs that come with very little stress such as medical records technician or hairstylist generally require just a high school degree and a few months of specialized training. Somewhere in the middle are the jobs of firefighters and police officers, which in this day and age often require a college degree – despite the fact that their pay is only average.
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Do’s And Don’ts Of Borrowing Money

man pressing pay later buttonBorrowing money seems to be a practice that we will never stop doing. We know how it almost drowned the average household during the Great Recession. A lot of us have yet to recover fully from what happened. But even if we know that our financial condition is still not as strong as before, we still continue to borrow money because that is how some us can afford to improve our lives. While this can be effective, it has to be approached carefully.

The consumer debt problem of Americans, regardless of what you hear on the news, is far from over. The debt is still as present as ever. In fact, some families may be having difficulties coping with all their debts. If another financial crisis that is similar to the Great Recession happened once more, a lot of households might not be able to recover. It is a scary thought.

According to the data collected in NerdWallet.com, Americans have a total of $11.83 trillion in debt. This is higher than last year by 1.7%. The average mortgage owed per household is $156,333. Student loans are currently at $32,953 while credit card debt is at $15,706 per household. This is a huge load for the average household to carry.

Sure, the highest debt that consumers owe is a home loan – something that is actually helping them increase their personal net worth. But it is still a dangerous debt to have. You need to know the right practices when it comes to borrowing money so you will never have to endanger your financial condition again.

The truth is, debt is not the problem in society. It is how we react to debt that makes it a good or a bad debt. If you know how to manage your credit properly, you do not have to fear that it can ruin you financially.

What to do when you want to borrow money

The key to borrowing money is to do it wisely. Here are 5 things that you need to do in order to be wise with debt.

Do have the right reasons to borrow.

You need to have a valid reason for going into debt. Credit is something that you need to pay back with interest. You want to make that interest worth your while. Having the right reason to be in debt is how you can do that. It is something that you need to think about carefully. If you will borrow money to get the latest gadget even if you do not really need it, you know it is not a good reason to be in debt. But if you will go into debt because you want to put more money into your pocket, that is a better reason. For instance, if you will use credit to upgrade your oven so you can earn extra from baking cookies, it is a great reason to be in debt. If you do it correctly, you might just be able to earn enough so it pays for itself.

Do find the best interest rate.

A big mistake is borrowing money without shopping for the best interest rate. There are a lot of lenders out there. You need to know which of them offers the best rate so you can minimize the amount that you need to pay on the interest. The lower the rate, the better it will be for you. Thanks to the digital age, it is easier to know the existing rates in the financial market. You can visit websites like Bankrate.com to compare rates.

Do check if you can afford the payments.

Borrowing any amount of money is not something that you do on a whim. It is a financial decision that you need to think about carefully. One of your considerations should be how you will pay off the loan. If you are unsure how you will pay off the loan, then do not proceed. At least, put it on hold until you are sure that you know how you can afford to pay back what you will borrow.

Do understand the fine print.

Nobody reads the fine print. Really. The small prints are boring and some of the words are hard to understand. While that is unfortunate, you need to read the fine print. There is no shortcut about it. Actually, you need to do more than just read it. You need to understand it. If there is something that you do not understand, ask. You might be signing up for something that you are not ready to deal with.

Do save while paying off debt.

Lastly, you need to keep on saving even when you are in debt. So if you are revising your budget so you can accommodate your new debt, make sure you leave room for savings. We all know what having an emergency fund will help eliminate the need for unnecessary debt. Using credit to buy something that will improve your financial situation is a good idea but it is a better idea to buy it in cash. That way, the return of that investment is greater. So always leave room for savings. You will never know when you will need that fund in the future.

What not to do when you are borrowing cash

If there are rules that you need to do when you are borrowing money, there are also rules when it comes to what you should not do. Here are 5 things that you need to remember NOT to do when you are asking for a loan.

Don’t borrow if you still have other debts.

Before you borrow money, you usually look at your income to see if you can afford paying for it. While that is logical, there is one more thing that you need to look into: how much debt do you still owe? If you still have a lot of student loans, do you really think it is wise to borrow money for a new car? You may want to find debt relief for some of your credit accounts before you add more credit to your name.

Don’t make borrowing your financial solution.

Believe it or not, some people use debt as a way out of a difficult financial situation. This is a desperate move that you need to avoid. If you use debt for emergency situation, that is a very bad idea. This is why one of our to-do rules is to keep on saving even as you are in debt. It is better for you to have an emergency fund so you can avoid borrowing money just to get yourself out of a financial problem. Sometimes, the problems will make your desperate and unable to make wise decisions when it comes to debt.

Don’t forget to pay on time.

Paying on time is one of the important rules of borrowing money. If you cannot pay on time, you will be charged with late fees. Not only that, if you let it go for a long time, your credit behavior will be reported to the three major credit bureaus. That can compromise your credit score and jeopardize future financial transactions. So if you can help it, just pay your dues on time.

Don’t fall prey to bad lenders.

When you are choosing a loan, you are always advised to seek out the ones with the best terms (e.g. low interest rates, etc). Apart from that, you also have to be careful where you will borrow money. There are some lenders offering rates and terms that are too good to be true. Sometimes, it is too good to be true so you need to be very careful. It is best to check what the law says about your rights as a borrower. According to an article published on ConsumerFinance.gov, the Office of Fair Lending and Equal Opportunity is working hard to identify discriminating practices in the financial markets. You may want to check out their website for more information about borrowing money.

Don’t keep borrowing a secret.

On a last note, you need to avoid keeping your debt a secret – especially when you are married or in a serious relationship. Talk to someone about your debt because that can help increase your sense of responsibility about that debt. If someone knows about it, then they are bound to check if you are paying it off. They could be a great adviser when it comes to financial decisions.

To know more about borrowing money, here is a video from Money Talks News with tips on how you can be smart about it.

What You Need To Know Before Choosing Credit Counseling

couple discussing financesElon Musk’s SpaceX team just learned what NASA discovered years ago and that’s the task of sending rockets into space isn’t an easy one. In fact, sometimes it can be downright tough. It can also be tough to be heavily in debt. And don’t think that debt still isn’t a problem. There is nearly $1 trillion in consumer debt outstanding and close to 1 million personal bankruptcies every year. There are also a lot of people who can’t refinance their mortgages because either they have bad credit or they’re underwater – without enough equity in their homes.

Fortunately, there are some relatively simple answers to getting out of debt. One of the most popular of these is credit counseling. This is where you contact a credit counseling agency and are assigned a counselor who reviews your finances and helps you either develop a budget designed to get your bill paying back on track or what’s called a debt management plan (DMP) – depending on how serious are your financial problems.

How to know when you need credit counseling

There are some danger signs or red flags that will tell you that you might need credit counseling. The first of these is if you’re receiving calls from debt collectors. Of course, you should have probably sought out consumer credit counseling before you started receiving those calls. A second red flag is if you’re living from paycheck to paycheck. When you’re doing this it means that every cent you earn is spoken for and you’re on a slippery slope. Experience just a small financial slipup such as an unexpected auto repair or a medical emergency and you’ll fall way behind.

A third sign is that if you find you’re hiding financial information and bills from your spouse or partner. Maybe you have credit cards that he or she doesn’t even know about or you’re locking purchases in the trunk of your card because you don’t want your spouse to see you carrying them in the house. A fourth sign is that you’re using payday loans or cash advances because you’re trying to support a lifestyle you simply can’t afford. And finally, the fifth sign you need consumer credit counseling is if you don’t even know how much you’re in debt.

How to know who can be trusted

If you’ve seen many of these red flags in your life then credit counseling can definitely help. But how do you know whom you can trust? There are two credit counseling agency associations that can be trusted. They are the National Foundation for Credit Counseling (NFCC) and the Association of Independent Credit Counseling Agencies (AICCA). Both these organizations have local members that are required to follow the highest standards of credit counseling. This means this is where your search for help should begin.

Before you leap

Before you run off to one of these credit counseling agencies there are some things you need to know about credit counseling in general and how to avoid being ripped off. Here are the five most important of them.

It should cost nothing or very little

No legitimate credit-counseling agency would want you to pile up even more debt by charging you a big fee. The members of the NFCC and the AICCA (formerly known as Financial Counseling Association of America or FCAA) generally charge nothing or very little for their services. For example, if you call the toll-free number of one of these two organizations you will be connected to your nearest local agency where you will get free counseling over either the phone or in person. This can be helpful even if you are not in debt as these agencies can offer advice on saving, budgeting and organizing your finances. They will also counsel potential homebuyers and people looking for a reverse mortgage.

You may get help with a debt management plan

While credit counseling can’t do anything to reduce your debt there is some things it can do. For example a credit-counseling agency can make your debt easier to bear through negotiations with your creditors to reduce your interest rates and “re-age” your debt. It can also help you with a debt management plan (DMP). If you end up with one of these plans you will longer be required to pay your creditors. You’ll send one check a month to the credit-counseling agency instead and it will then distribute the funds to your creditors. If you sign off on a debt management plan you’ll be required to give up your credit cards and not take on any new debt until you complete your plan which typically takes five years.

It won’t affect your credit score

If you go to a credit-counseling agency for help with budgeting or to just get your finances organized so that you can better manage your money this will not show up on your credit report. On the other hand, if you enter into a debt management plan this may be reported to the credit bureaus. If so, it will at least show you are making an effort to repay your debts and it shouldn’t affect your credit score.

You could avoid bankruptcyman looking frustrated

If you feel that it’s inevitable you’ll have to file for bankruptcy a debt repayment plan could help you avoid this. If it won’t, most credit-counseling agencies will assist you with the bankruptcy process. For example, it will refer you to a competent attorney that will not make your debt problems worse. For that matter, recent revisions in the bankruptcy code require you to go through credit counseling from an approved agency before you can file.

Most are partially subsidized by major credit issuers

The credit card issuers support nonprofit credit counseling as they want to avoid the losses associated with bankruptcy as this enables them to recover at least some of the money owed them. So if you are told to stay away from a credit-counseling agency because, “its money comes from the credit card companies,” ignore this advice. Both you and your lenders want the same thing, which is to help you avoid bankruptcy and get back on your feet.

Consider the options

There are other options available in addition to consumer credit counseling. For example, if most of your debt is credit card debts you might be able to transfer all of your balances to a new card with a lower interest rate or better yet, a 0% interest balance transfer card. You would then have one payment in place of the multiple payments you’re currently making and it should be less than the sum of those payments. If you own your home and have some equity in it you could get a home equity loan or homeowner equity line of credit and use the proceeds to pay off your debts. This would consolidate them and, again, you should have a much lower monthly payment than the sum of the payments you’re currently making. Finally, there is debt settlement as available from companies such as National Debt Relief. This has become popular because it’s the only way to actually get debts reduced. In fact, a reputable debt settlement company should be able to get them cut in half and help you become debt free in just 24 to 48 months.

If you’d like some additional tips about choosing a credit-counseling agency be sure to watch this short video.

Want A Million Dollar Portfolio? Live A Frugal Lifestyle

man on top of a coin hillDid you know that living a frugal lifestyle can help you become super rich? Believe it or not, it will.

Most people may find this association hard to grasp because the initial impression when it comes to frugality is restriction and deprivation. If that is how you view frugal living, then you are probably doing it wrong. If you are not enjoying this lifestyle, then there is something wrong with the way you are implementing it in your life.

You see, frugal living is not about deprivation. It is also not about restricting yourself to the point of insanity. It is actually knowing what you want out of life and focusing on the priority expenses that will give you just that. It is choosing not to waste your money on unnecessary expenses that is only meant to satisfy the trends in society. While these trends seem like a good upgrade for your lifestyle, it is rarely necessary to improve your life. You need to learn how to filter these upgrades to what is really necessary so that you can focus your limited resources on what is essential. Everything that will be left unspent can be used to grow your personal net worth.

That is how you can find abundance despite frugality. If you find that hard to believe, then reading the story of Ronald Read may change your mind about living a frugal lifestyle.

Story of a man who used frugality to get rich

The story of Ronald Read is strong evidence that frugality can really help you get rich. Being told by financial experts that it works is one thing. Reading about the story of how this lifestyle made one man rich is much more convincing.

An article published on WSJ.com tells us the story of how being frugal led to one man’s hidden riches. When Ronald Read passed away at the age of 92, his family and friends were surprised to find that he was actually worth $8 million. Since he was already widowed and he only had 2 stepchildren, he left the bulk of his riches to the local hospital and library in Brattleboro, Vt.

After the surprise wore off, his friends realized that he possessed three characteristics led to his wealth. He was a good stock picker, he was very patient, and lastly, he was frugal.

It was his frugal lifestyle that made all his wealth come as a big surprise. According to the article, he lived a very modest life. He first started working at a service station that was owned by his brother. Then, he worked as a janitor and maintenance worker at a store owned by J.C. Penney.

Nobody really thought that Mr. Read, a person who sometimes used safety pins to hold his coat together is actually a millionaire. He drove a 2007 Toyota Yaris and he did not hesitate to park it far from his work if it meant he can avoid paying the parking meter.

The bulk of his wealth, as the article revealed, was actually in the stock certificates hidden in a safety deposit box. It was so much that it ended up being a five-inch stack of certificates. Mr. Read owned 95 stocks when he passed away. Most of these were stocks that he held on to for a very long time. For instance, back in 1959, he bought 39 shares of Pacific Gas & Electric. The shares were worth $2,380 back then. Since what he owned went through stock splits of 2-for-1 and 3-for-1, his total shares went up to 578 and was now worth more than $26,500.

If you think about it, Mr. Read may be a great stock picker but most of his wealth is really thanks to his frugal ways. It may not be the thing that made him rich but it can sure be the reason why he amassed so much in his lifetime.

After all, how can someone living on a janitor’s salary end up with $8 million upon his death?  His salary may be a bit higher because of the length of his tenure and him being the maintenance worker too – but you cannot save that much and still live a modest lifestyle. According to Mr. Read’s friends, he lived a modest life with his salary and still ended up with a lot of wealth in his old age.

Here are some of the reasons why frugality can help you amass so much wealth too.

It trains you to focus on what is essential.

Mr. Read did not go without the basic needs. He owned his house. He drove a car. He lived a modest lifestyle. It is not extravagant but it was not poor either. His frugal lifestyle trained him to focus on what is essential. He saved every penny he could but he did not do so at the expense of a modest lifestyle. He spent but only on what he believed will make his life comfortable.

It gives you the money to invest.

Thanks to his frugal ways, Mr. Read is able to set aside some cash that he uses to invest. He can buy stocks and shares without breaking the bank. He probably had savings for emergency expenses too. That way, he did not have to use the money he invested whenever he needed to spend on something unexpected.

It teaches you how to be patient.

One of the characteristics that were believed to help Mr. Read amass so much wealth is his patience. He probably did not have to borrow too much money in his day. He probably patiently waited for his savings to grow – just like how he waited for his stocks to gain value over the years. Frugality teaches you that patience will always win out in the end. Sure you can borrow cash to purchase something immediately. But you will just waste money paying for the interest of that loan. By being patient and waiting before you buy something, you get to spend more time thinking about that purchase. You can decide if you really need it and if you do, you will only pay for its actual value – and not the price plus interest that credit purchases will bring.

It forces you to be creative.

If you do your research, you will find that there are some successful individuals who credit frugality for their financial success. Jeff Bezos, the founder of Amazon is one of these people. In an article published on Entrepreneur.com, he was quoted to say, “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” When your frugal lifestyle tells you that you cannot afford to pay for something, you are forced to use your creativity to acquire that without diverting from your budget.

There are several other financially successful people who are known to be quite frugal. You have Warren Buffett and Mark Zuckerberg. These people chose to live a modest lifestyle even if they are worth billions of dollars.

How to live a frugal life

Do not be fooled into thinking that you need to be cheap to be frugal. That is a popular misconception about frugality. What it will teach you above all is that you should never be careless with your money. There are many ways that a frugal budget can help improve your life – you just have to learn how to embrace it.

It seems that the Great Recession taught a lot of Millennials how to be frugal. This generation is not perfect. They left school with loads of student loan debt and entered a professional world that is crippled by high unemployment rates and a shaky economy. Because of that, they learned how spending should be done – the frugal way.

According to an article published on USNews.com, Millennials define frugality in a different way. With lesser spending power, they are forced to become frugal shoppers. But if you think that this means they prefer low priced products, think again. For them, it is all about maximizing the value of their expenses.

The article revealed that young adults prefer experience over material possession – something that is strongly frugal. They would prefer to spend on a vacation with friend over an expensive designer outfit. This mindset is a great starting point for a lot of people who wish to start living a frugal lifestyle. Here are some important tips when transitioning to a frugal way of living.

  • Declutter your home. Start by removing the clutter from your home. Frugal living is about simplicity and minimalism. You get by with only a few possessions. Go through all your stuff and get rid of the things that you do not really need and use anymore.
  • Sell what you do not need. This is a great way to remove the clutter from your home and at the same time, earn some extra money.
  • Downsize your lifestyle. Since you have less possessions you can probably transfer to a smaller home. While big homes may be a sign of success, it is quite expensive to maintain. If you have a small family anyway, you may want to just live in a smaller home. The same is true for the other aspects in your life.
  • Identify your priority expenses. Frugality is about spending on your priorities and not allowing even a penny to go to waste. Identify what will really make your life worth living and concentrate on that.

A frugal lifestyle, when done correctly, will not only improve your financial situation. It will also improve your outlook on what a quality lifestyle is all about.

Hoiw To Avoid The Financial Mistakes Commonly Made By 40-Somethings

You would think that by the time people reach their 40s they’d be pretty knowledgeable about their personal finances. And in most cases this is true. By the time you reach 40 you’ll have had enough time to learn about budgeting, how to use credit sensibly and about the importance of saving for retirement. Unfortunately, there are still some financial mistakes you could make even at this time of your life. For example, you may be having a problem figuring out how you’re going to pay for your kids’ education and when and if you will be able to retire. Beyond these issues there are some financial mistakes that you could cost you dearly if you’re not careful.

family with teenage daughter#1. Not having enough liquidity

You could fall into the clutches of a predatory payday lender if you don’t have enough cash to get you through an emergency. It’s important to have enough cash you’ll never be forced to sell off assets or to go to a high-cost lender. If you feel you don’t have the equivalent of at least three months’ living expenses tucked away in a savings account you may need to make some aggressive moves. This could sting in the short run but will pay off big in the years ahead.

#2. Becoming complacent about your consumer debt

Now that you have a good job and a nice, cozy home it’s easy to get comfortable with your consumer debt. Don’t get complacent about carrying too much. Add up your consumer debt and then calculate your monthly debt-to-income ratio. You might have inadvertently let it creep up to something more than 25%. If this is the case, you need to figure out some ways reduce your debt and make sure you don’t continue to add more. Otherwise, you could ultimately find yourself in a very precarious position.

#3. Not having a plan for your money

You probably took a very serious hit as a result of the Great Recession just at the point when you were working to afford a house and establish a career. And the cost of just maintaining middle-class status has been rising continually. If you’re typical you’re just now recovering from the hit you took as a result of that recession or from even having lost your house or job. This makes it important that you create a plan for your money and stick to it. The problem is that when you’re in your 40s you simply don’t have that many years left to recover.

#4. Making paying off the mortgage your top priority

We know how good it would feel to own your home free and clear and the security this would entail. But it’s usually a bad idea to put paying off your mortgage ahead of your other financial obligations. The financial guru Dave Ramsey recommends that you pay down all of your other debts, set your kids’ college funds in motion and establish your retirement savings before you pay off your house.

#5. Believing that you can add value to your home by remodeling

You may want to turn that 1970s-era bathroom into something new and luxurious but don’t believe that this will add value to your home. The first thing your buyer is likely to do is just rip it out. Never count on any remodeling projects to have the same value to the prospective buyer as they do to you. For that matter, if you over-customize this might actually lower your home’s value.

#6. Prioritizing your kids’ education ahead of saving for retirement

You can feel pressured to put your kids’ education ahead of saving for retirement when you see your friends putting their kids through college. But if your retirement savings aren’t on target then funding your children’s’ education isn’t a good move. They can take out a loan for their education but you can’t take out a loan to fund your retirement. The best way to think of this is as if you were on an airplane and there was an emergency and you put on your kids’ oxygen masks before putting on your own. That doesn’t make sense nor does putting your kids’ college ahead of your retirement.

#7. Taking money out of your retirement savings

One of the most powerful forces in the world is compound interest. When you combine this with time it’s like magic in terms of what it can do for your retirement savings. But when you dip into your savings, even for the best of reasons, you take away someretirement fund boxof that time that makes long-term saving so effective. And if you take money out of your 401(k) before you reach 59 1/2 you’ll not only pay a 10% penalty, you’ll have to pay income taxes on the money and at your standard tax rate. Plus, you’ll lose some of that power of time and compounding interest.

#8. Failing to diversify your savings and investments

You may have come out of the Great Recession a little shell-shocked about your investments. This is because at the same time as the housing market crashed so did the stock market. It’s important at this age not to put all of your eggs in one basket – whether it’s a particular investment or your house.

#9. Assuming that your best earning years are still ahead of you

You’ve probably seen your income go up almost every year but it’s a mistake to assume that this will continue. While incomes generally rise for people in their 20s and 30s and maybe somewhat in their 40s, they generally peak at around age 50. You should not only plan for your income to flatten but also be concerned about job security. It’s riskier if you lose your job as you get older. There are laws about discriminating against people because of their age but there can still be issues. You might not be fired outright but you could be “downsized” or your entire department or division could be eliminated.

#10. Believing that being risk adverse is not a good thing

There’s nothing wrong with taking risk when you’re in your 20s or early 30s. But being adverse to risk can be a very good strategy for most people in their 40s. You should have your savings account stocked so you have emergency cash, have a diversified portfolio and keep your debt very low. In other words, control the things you can control, avoid risk, and be conservative and prudent.

The net/net

The net/net is that it might be easy to start feeling financially complacent now that you’re in your 40s but it would be a mistake to set your finances on cruise control at this point. Watch out for what’s ahead and keep from making the common mistakes you’ve just read that could tank the financial security you’ve worked so hard to create.

11 Tips For Planning A Great Vacation

Happy family with kids in pool having fun, summer vacationDo you not think about building your ark until it’s been raining for a couple of days? If so you might also not start planning your next vacation until the week before you’re slated to leave. This almost guarantees you won’t have the best possible vocation. But if you follow these tips you can have one of the best ones ever.

#1. Tell your friends and relatives to move to Europe

If you normally vacation with friends or relatives, insist they move to Europe. This is because the US economy now is very strong and your dollars will go further if you spend them in Europe. Our dollar is currently beating up on the euro. In fact, every $10 you exchange will now get you 9.31 euros. A year ago you would’ve only gotten 7.24 euros. What this translates into is that a hotel room that cost you 150 euros last year or $207 US – will cost you just $161 a night this year.

#2. It’s not all about the bass. It’s all about the shoulders

You’re likely to find the best hotel rates and airfares for Europe and even the US (to some degree) in the months leading up to or after the summer (the “shoulder months”). This means that traveling in April, May, September, October or November will mean you won’t have to pay as much and as a plus you won’t be part of the maddening crowds. As a general rule the end-of-summer bargains begin about August 19th or 20th.

#3. Look for hotels that provide kids’ programs

Airbnb has become a real boon for families that need to spread out. However, what this program can’t do is provide structured activities for kids. In order to compete with Airbnb many hotels now provide this. For example San Diego’s Paradise Point Resort offers an Island Adventure Club that sends children out to explore its 44 acres. This includes scavenger hunts, arts and crafts, miniature golf and more. These programs are free at many hotels but in others you will have to pay something like $50 for four hours. But there are times when you just need a little separation from your kids so this could be a good investment.

#4. Don’t be nickeled and dimed

Unfortunately, some hotels have learned a lesson from the airlines and will nickel-and-dime you with extra resort fees, charges for valet parking, in-room Wi-Fi and so forth. If your vacation includes a lengthy hotel stay check with an online site like Trivago so you will know in advance whether or not you will be paying these extra fees before you book.

#5. Book well in advance and we mean well in advance

There was a time when you could book about 30 days in advance in order to get the best price. Today, you’d be smart to book 45 days in advance to get the type of room you want at the best possible price.

#6. Watch out for “nonrefundable”

Hotels have learned another important lesson from the airlines and that’s nonrefundable payments. If you book in advance you can save as much as 15% on a hotel rate but make sure that it’s not marked nonrefundable. If you were to find another hotel you like better, a different destination or if you were to become ill you would want to be able to get your money back. So make sure you book in a hotel where your advance payment would be refundable.

#7. You can score big on a cruise just by being a procrastinatornave da crociera

A cruise can be a great way to have fun, see a new part of the world and even make new friends. The cruise lines have learned like airlines that they are selling a commodity that has only a certain shelf life. Cabins that are left unused represent revenue opportunities missed. This means you should be able to score big on a last-minute cruise deal. You could also look for what are called repositioning cruises. For example, a cruise line offering Alaskan cruises will likely be repositioning its ships in September for Caribbean cruises. You might be able to score big on one of these cruises.

#8. Gamble a bit

If you’re willing to gamble you could save money by booking a Caribbean cruise during hurricane season. The good news about a cruise is that a boat can be repositioned unlike a hotel that is pretty much stuck where it is. However, with a cruse ship bad weather can cause cancellations of certain ports of call. So rolling the dice could save you some money. As an example of this a 10-day Princess Cruise in the Eastern Caribbean starts at $909 in September – which is considered to be during hurricane season – versus $1199 in February.

#9. Going to Mexico? Choose your destination carefully

Our State Department has issued warnings about those areas of Mexico you should seriously avoid. Beyond this, you can save money by choosing your destination carefully. One of the darlings of a Mexican vacation is Cancún. But if you were to choose Puerto Vallarta instead you would save on both hotel and airfares. As an example of this, one night at the Fiesta Americana Grand Coral Beach in Cancún typically costs $258 a night while the Fiesta Americana in Puerto Vallarta currently costs $172 a night. Multiply that difference by seven nights and you’d be saving $602 just on your hotel stay alone.

#10. Take to the road in style

If you’re planning a road trip consider doing it in style. Leave that old clunker at home and rent something like an Audi A4 instead. There’s a new company Silver Car that rents only Audis and only at certain airports. If you think this would be too big a splurge, think again. You could rent from Silver Car in Miami for six days at a cost of $405. In comparison a Nissan Maxima from Hertz for the same number of days would cost you $638. You’d be both cheaper and look cooler.

#11. Don’t always cheap out

When it comes to planning a vacation it always pays to be price-sensitive. But remember the value is also important. If you’re trying to choose between a four- or five-star Mexican hotel don’t rule out the five-star just because that’s what it is. If you shop carefully you might be able to find a really first-class hotel for just a bit more. This is also true of cruise ship cabins, rental cars and more. The trick is to determine where you need to hold the line on your vacation spending but still get the comforts and amenities you need to have a really memorable one.

What You Need To Know About Medical Debt And Your Credit Score

stethoscope on top of coinsDid you know that medical debt is one of the reasons why a lot of Americans are having troubles with their credit scores? We all know how important credit scores have become in our society today. This score measures your creditworthiness. Before you are approved of a loan application, the creditor or lender will always check your credit score to determine how risky you are when it comes to payment behaviour. The idea is, when your credit score is low, there is a higher chance that you will not pay back what you borrowed from creditors and lenders.

But recent studies have shown that not all individuals with low credit scores are entirely irresponsible when it comes to debt. According to an article published on CBSNews.com, over half of the overdue balance on consumer credit reports is caused by unpaid medical debt. Most of them are unpaid because of reimbursement delays from health insurance companies. Other causes include medical billing errors and disputes that have yet to be resolved.

Apparently, there is some shady business going on when it comes to collecting medical bills. When the hospital, health facility or medical professional have unpaid receivables, they turn it over to medical debt collectors. These collectors go after consumers for payment – even when it is clear that the payment should be coming from health insurance companies. To pressure consumers into paying their bills from their own pockets, debt collectors file an unpaid report to the major credit bureaus. This results in a low credit score for a lot of consumers.

These findings came from the Consumer Financial Protection Bureau or CFPB. They have been compiling reports, complaints and observations with the intention to protect consumers from this seemingly unfair practice of reporting medical debt.

Based on the article from CBS News, the efforts of the agency is effective because a medical debt collector had been apprehended because of these shady practices. A settlement with Syndicated Office Systems had resulted in a $5.4 million payout to more than 23,000 consumers who had been wrongly hounded for medical bills. This payout is in checks of $100 to $1,000 – depending on how each consumer is affected by the illegal practices of the medical debt collection industry.

New rules when reporting health-related debt to credit bureaus

If you are currently burdened with medical bills, you need to understand the new rules that should protect you from getting a bad credit score.

Based on the December 2014 report published by the CFPB in their website, ConsumerFinance.gov, an estimate of 43 million Americans are found to have overdue medical bills. Most of these consumers are found to have ruined credit reports because of this debt.

According to the findings of the agency, there is something wrong with the way the system incurs, collects and reports medical debt. Among the things that was discovered to be wrong includes the following:

  • Confusing billing process for medical expenses. Some consumers incur a lot of bills – from the hospital, separate treatment sessions, professional fee, etc. These multiple providers can be quite confusing. Not only that the cost sometimes vary from one client to the next because of factors like the insurance, etc. This is why some consumers are unaware of how much they really owe in terms of their medical bills.
  • No standard practice in reporting overdue bills. The lack of standard procedure when reporting overdue medical debt is another reason why this is a big problem for consumers. There is no clear indication when their unpaid medical bills will end up in their credit report. Other debts will wait until after a pre-determined period passes before they report the unpaid debt to the major credit bureau. For medical bills, it can vary from 30 to 180 days. It depends on the health care provider when they will send the report.
  • Practice of “parking” unpaid debts on credit reports. This means the debt collector reports the unpaid medical bill and does not inform the consumer about it. This practice puts the consumer in danger of damaging their credit report without being given the chance of doing something to prevent it.

To deal with these problems, the CFPB required credit reporting companies to provide them with accurate reports on a regular basis. This will help them examine how to deal with the problems that consumers are facing when it comes to their medical debt. The agency would like to make the credit reporting market accountable for the accurate credit reports that consumers have. This market includes the credit bureaus (Equifax, Experian, and TransUnion), and the creditors and collectors providing the report.

Apart from the CFPB, a group of State Attorney Generals are also working on this problem too. According to an article published on Time.com, it will soon be easier for consumers to correct any errors on their credit report – especially if it involves their medical debts. The article mentioned how the three major credit bureaus have agreed to improve how they report medical debt and how they will deal with any errors that customers are complaining about. This change is part of their response to the settlement with Eric Scheiderman, the New York State Attorney General. The changes will be implemented six months from March 2015. The credit bureaus are expected to provide trained employees that will review the complaints of consumers and investigate accordingly.

Not only that, the credit bureaus are required to wait 180 days before they are allowed to add any unpaid medical debt in the report of the consumer. This is meant to give the consumer enough time to work on their unpaid debt before it damages their credit report.

According to the CBS News article mentioned earlier, some of the problems need to be put into law and thankfully, legislators are also working on it. In May of 2015, US Reps. John Carney (D-Delaware) and Andy Barr (R-Kentucky) introduced a bill known as the Medical Debt Relief Act. This bill seeks to allow the erasure of paid medical debts from credit reports within 45 days after full payment. It might be a long time before this is passed but the step in that direction is already taken.

How to keep medical bills from ruining your finances

While all of these steps are being taken, it is important for consumers to take their own steps to keep their medical debts from ruining their personal finances. According to the report from CFPB, there are 15 million consumers who only have medical debt on their credit report – nothing else. 20% of credit reports have at least one overdue medical bill. There are too many consumers being affected by the bad credit reporting practices for unpaid medical bills. You need to make some effort to keep your debt from ruining your financial life.

Of course, dealing with big medical bills is easier said than done. It takes dedication, self control and constant vigilance to help keep your debt from ruining you. Here are four things that you can do.

  • Keep yourself healthy. Prevention is better than cure. If you can avoid it, do not incur the debt. Live a healthy lifestyle so you do not have to spend on medical expenses.
  • Get insurance. If you know that your family is prone to certain illnesses, have yourself insured. It is better to be prepared by buying the right health insurance for you and your family as well. That way, you do not have to break the bank every time someone in the family falls ill.
  • Save up for emergencies. Apart from a health insurance, you can also avoid medical debt if you save up for these unexpected expenses. Grow your emergency fund so you have something to dip into when you need it the most.
  • Deal with your other debts. One way that you can also keep your medical debt from ruining you is by paying off your other debts. In most cases, people with too much debt are stressed. We all know how stress can cause a lot of health issues. Do not let stress rule your life so illness can stay away from you too.

The Biggest Dos and Don’ts of A 401(k)

golden egg with moneyFor most people who are trying to save for their retirements an employer-sponsored 401(k) can be an incredibly great deal. The premise of a 401(k) is reasonably easy to understand. You take pretax dollars out of your paycheck, invest them over a number of years and ultimately wind up with a really nice nest egg come retirement. On the downside, 401(k)s have some rules that can be difficult to understand. So the important thing is to know the dos and don’ts of a 401(k) so you’ll know how to get the most out of yours.

Do begin saving early even if you don’t earn much

One of the most powerful forces in the known universe is compound interest. If you save just a little cash and give it a lot of time to grow this will be better than saving a lot of cash but for a short period of time.

Don’t be afraid of growth

If you start early you have a fair amount of time to offset any losses. Stop worrying about things and keep that 401(k) in growth mode. This means investing in US and international stocks. These will carry more risk in the short term but over many years they will be a much better wealth creation tool. You should even consider investing in stocks if you’re in your 40s or 50s because you could easily live to 80 or 90.

Do take advantage of your employer’s match

If your employer matches your contribution to some percentage take full advantage of it. This is basically free money. Your employer puts it in your 401(k) account as a reward for saving, which is something you should be doing anyway.

Don’t treat your 401(k) as if it were a checking account

You can borrow from your 401(k) but you need to be careful because it can be very costly. You’ll not only pay a penalty for any withdrawals you make before age 59 ½ you’ll also be short of that cash when it comes time to retire or in an emergency. The bottom line is that you should exhaust every other option for borrowing money before you dip into your retirement funds.

Do contribute from your bonuses

When you get a bonus it can be very tempting to use it for a beach vacation and there is nothing wrong with using part of it for that or for a pair of special shoes. But put the rest into your 401(k) account to help feed your long-term savings.

man balancing a checkbookDon’t forget catch-up contributions

If you’re getting close to retirement, are behind on your saving and are 50 or older remember that you’re allowed by the IRS if to contribute an additional $6000 for the tax year 2015 and that’s above the normal $18,000 limit. That makes a total of $24,000 you could invest in your 401(k). This can be a powerful catch-up tool.

Do increase your contributions when you get raises

There are a huge number of studies showing that when you make your saving automatic you don’t notice that missing money as much. Make arrangements with your HR department to adjust your 401(k) contributions each year when your salary increases. You’ll never miss the money and you’ll be glad you did this come retirement time.

Don’t ignore those taxes

The sad fact is that you don’t really have as much money in your 401(k) as you think. The reason for this is that it’s a tax-deferred account meaning that when you begin withdrawing funds the money will be taxed as ordinary income. If you don’t think this can hurt think about this. If you have $1 million in your 401(k) and withdraw the full amount you would pay the top tax rate, which as of this writing is 39.6% meaning it would cost you $396,000. Ouch!

Do learn if there’s a vesting schedule

While you may be getting a nice matching contribution from your employer do understand that it may have put strings on it through what’s called a vesting schedule. What this translates into is whatever money you contribute into your 401(k) will always be yours. However, some employers can and do reserve the right to get back its matching funds if you quit before you become vested. While federal law limits vesting schedules the terms can still be nasty. As an example of this, your employer might require you to work a minimum of three years or lose every single penny of what it matched. Check out your vesting schedule and make sure you understand its terms. This could actually help you decided when to – or not to – get a new job.

Don’t forget about your RMDs

RMDs are those required minimum distributions the government makes you take out of your 401(k) when you reach age 70 1/2 if you’re no longer working. How much you’ll be required to take out of your 401(k) involves a lot of math based on your account balances, age and marital status. This means that once you reach that 70 ½ and are required to start taking money out of your 401(k) you should consult with a tax professional or check out the RMD worksheets available on IRS.gov. This is important because if you don’t take out the required amount you can expect the government to penalize you so it will get its share regardless.

Do think long-term and diversify

The retirement giant Fidelity Investments made the astounding discovery that it’s best-performing accounts were those of people that didn’t even realize they had accounts. This is proof positive of the power of sticking with investments and not being influenced by day-to-day changes. What you need to do is diversify across asset classes including bonds and stocks and think both domestically and internationally.

Don’t be afraid to ask for assistance

When you reach that golden age where you’ve paid off your mortgage and paid for your kids’ college educations you need to think about the kind of retirement you want and the type of legacy you want to leave your heirs. And most importantly you need to think about when and how do you start moving money around to get there. These are critical questions and there’s nothing wrong with looking for help. An accredited financial advisor could help you navigate the various tax laws and figure out a long-term plan that would help keep those golden years golden. You don’t want to make an expensive mistake late in life and paying a smart person to help you could be an excellent investment.

If you’d like to know more about 401K)s, here’s a video courtesy of National Debt Relief with details.

 

5 Frugal Tips To Enjoy This Summer

happy familySummer is here and if you want to enjoy it without breaking your budget, then you need to pay attention to the frugal tips that will be discussed in this article.

Following a successful frugal lifestyle does not mean you will be depriving yourself of a fun-filled activity this summer season. Frugality should never feel restrictive. If that is how you feel as you practice frugal habits, then you are probably doing something wrong.

A lot of people who are practicing frugality actually feel quite liberated. Being frugal allows people to be free from materialism. They know that being happy goes beyond your possessions and how much you spend each month. It does not matter how much you can afford to spend as long as your priority expenses are met. When you are freed from this way of thinking, the pressure to work long hours in order to earn more will no longer be there.

If you haven’t thought about becoming frugal, then you may want to start practicing it this summer. According to a report from the American Express Spending and Saving Tracker, Americans are known to live for summer travel. They think of it as a reward that they deserve to enjoy after all their hard work and the cold winter months they had to endure.

This is probably one of the reasons why the summer season is one of the most expensive when it comes to entertainment costs. On top of the summer travel, parents have to deal with the additional expense of having all the children at home. They need to spend more to keep the house cool – which means higher energy costs. They have to spend on summer activities that will keep their kids entertained for the next two month. These are only some of the added expenses that they have to think about when the summer season comes in.

The report published on AmericanExpress.com revealed that 91% of their respondents have implemented saving strategies that will allow them to reduce costs this summer. Whether you have done the same or you lacked any plans for this season, you need to find some frugal tips that will allow you to keep your costs low.

5 ways you can have some frugal fun this summer

There are many ways you can have fun with a frugal lifestyle. All it takes is a clear understanding of what you believe will make your family happy. Add to that your creativity and you should be able to have a lot of fun this summer without spending a lot of money.

Here are 5 frugal tips that you can use to help get things started this summer.

Use your kitchen.

There are so many things you can do in the kitchen. Let your children have fun with you in this room. Create cold drinks that will help keep everyone cool when it gets too hot. You can also teach your kids how to cook or bake goodies. Make it as fun as possible by coming up with some food art. If your kids are not interested in cooking or baking, you can have them watch you as you work in the kitchen. Bake your own bread, mix your own drinks and cook meals from scratch. Whatever comes out of the kitchen can be consumed and that can help you save on take out or deliveries. You can even earn from the things that you can cook or bake. Sell cupcakes, cookies and other treats. The kids can help with the packaging. It can be a fun summer project for the family.

Staycation is the key.

AAA.com reports that 37.2 million Americans jumpstart their summer vacation with a holiday weekend – this year, it is Memorial Day. But travelling far will cost you money and that is what we are trying to avoid this summer. You deserve a change in scenery and some relaxation – that is true. However, you do not have to travel far to get that reward. What you need is some staycation options. Staycation is simply enjoying what you have in your neighborhood – or at least what is near your home. Instead of booking a hotel in a far place, why not book a hotel nearby with the amenities that will make you feel like you are in another state? Explore what you have in the community because there may be hidden gems that you have yet to explore. Go to the museum or enjoy a bike ride in the park, etc.

Explore the park.

One of the places that you can go to is the local park. Have a picnic there with your kids. Make it a spontaneous excursion. Instead of having snacks in the kitchen, put it in a picnic basket and drive to the nearest park with your kids. Bring with you a blanket, some books and outdoor game materials like some a ball, frisbee, etc. Your kids have a wide imagination. They will come up with something to do while out in the park. You will all benefit from the bonding and the exposure to nature.

Look for free activities.

Talking about frugal tips will always include something that is free. For sure, your local community has events and activities that you can enjoy without paying anything. From festivals, concerts in the park, open theatre to trade fairs, these are all possible activities that you can go to with your family. Look at the community board to see what you can do with your free time. If it is sponsored by the community, it is most likely offered for free or at a very low cost. You can also look at the amenities in your area. You may be able to have your kids join the summer sports league or something similar.

Spring cleaning – in the summer.

If you failed to do some spring cleaning, you may want to do that this summer. Go through all your stuff, and see what you can sell off. Have a yard sale so you can profit from the things that you no longer use around the house. Sometimes, what you consider as trash is something valuable to others. You can remove the clutter from your home and at the same time, earn some cash that may be able to fund some of your summer activities.

Follow these frugal tips to allow you to enjoy the summer without breaking the bank.

How to save on air conditioner costs this summer

One of the expenses that will also increase during the summer time is your air conditioner cost. Since the season is quite hot, you need to spend more to keep your home cooler. Your kids will be spending more of their time at home. You want to make sure they will be comfortable. That means you need to keep the air conditioner running more than the usual. You need to prepare for this increase in your household budget.

Fortunately, there are ways to keep your energy costs low despite the need to keep the house cooler. According to the tips found on ConsumerEnergyCenter.org, you can save energy for up to 3% per degree that is more than 72 degrees.

Of course, the challenge here is how to accomplish that higher degree so you can save on energy costs. Here are some frugal tips aimed at your energy consumption this summer.

  • Open the doors and windows. Make sure the house is well ventilated by opening the doors and windows. Let the air go through the house to keep it cooler.
  • Use a ceiling fan. A ceiling fan is a great way to get the air circulating in every room. Even if it is not enough to keep the whole house cool, it will help lower the need to make you’re A/C unit working too hard.
  • Go to cooler places. The best way to lower your use of the air conditioner is to just leave your house and go somewhere cooler. You can go to the park as long as the sun is not too striking. Or, you can go to the mall where the air conditioner is free. Other places you can go to include the library, museum, etc.
  • Make sure your A/C unit is in good condition. A broken A/C will consume more energy than the usual. Ensure that the necessary repairs and maintenance checks are done before the summer season comes in.
  • Keep yourself hydrated. Another way that you can stay cool without putting too much strain on your air conditioner is by drinking a lot of liquids. Use your kitchen to concoct drinks that can be enjoyed by your family.

To get more energy saving tips for the summer, watch this video.

Need Money To Pay For Your Dog’s $2000 Operation? Try Crowdfunding It!

Manager working diligently on the computerWikipedia defines crowdfunding as, “Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the Internet. One financial expert describes it as “large groups of people combining their economic power to support an organization, company or project they believe in.”

There are three kinds of crowdfunding. The first is called “rewards crowdfunding” The second is “equity crowdfunding.” And the third is crowdfunding for a cause or project

Rewards crowdfunding is where a company offers a reward in the form of a product or service to raise money to start a business, which allows it to get going without having to go into debt. Three of the most noteworthy crowdfunding start-ups were the video game Star Citizen that raised more than $84 million, the Pebble Time Smartwatch ($20,388,986) and the Cryptocurrency Ethereum ($18, 439,086). The Coolest Cooler raised $13,285,226 and the smartphone game Ubuntu Edge totaled $12,814,196.

The two top rewards crowdfunding sites are Kickstarter and Indiegogo. In addition to the products or services listed above, people have used these sites to fund everything from a 3-D printing pen to a gift delivery service.

What makes rewards crowdfunding successful?

As you might guess, what makes it successful is the rewards part. Companies like Pebble and Star Citizen offer people the opportunity to get their products free in return for backing the company. People respond to this because they don’t have to invest much money and it offers them the opportunity to become among the first to own the product. As an example of this, the people who backed Pebble received one of its watches and could brag to friends that they were among the first to own a smart watch. Plus, with rewards crowdfunding people get all of their money back if the company fails to meet its fundraising goal.

Equity crowdfunding

Equity crowdfunding is where a company offers securities in a business to a group of people in return for their investments. Since it involves investment in a commercial enterprise, equity crowdfunding is subject to securities and financial regulation. It is sometimes called investment crowdfunding or crowd investing.

Crowd funding for a cause or project

The site Gofundme reports that it’s the world’s number one crowd funding website as millions of people have used it to raise more than $1,100,000,000 not to fund a project or service but for what the site calls “life’s most important moments.” People have used this site to fund everything from school tuition to sports teams and from chemotherapy to special events.

How it works

Let’s say that you need $2000 to have surgery on your dog to correct a life threatening condition. You create a page on Gofundme, choose a color, upload a picture of your dog, describe its condition and then set a campaign goal – in this case the $2000 you need for its surgery. That’s pretty much it.

Spread the word

The way you raise funds for your GoFundMe project is by putting it on your Facebook page and emailing news about it to all your contacts to let them know about your GoFundMe page. Your friends and family members see your campaign, want to support you and go to your page and make secure online donations to your project or cause. You can go back to your dashboard on GoFundMe at any time to see how much you’ve raised to date, make changes, post updates and send thank you notes to those that have contributed to your project.

What makes GoFundMe different

You’ve already read the biggest difference between GoFundMe and sites such as Kickstarter, which is that you can use this site to raise money for personal projects and not just to fund new products or services. Beyond this, GoFundMe has no deadlines or goal requirements. You can leave your campaign active as long as you would like and you get to keep every donation that you receive – even if you don’t hit your goal. Plus, it assesses no penalties if you don’t make your goal. GoFundMe offers email support within five minutes and has a mobile app. However, as the old saying goes, “there is no such thing as a free lunch” and GoFundMe isn’t free either. It charges a 5% fee per donation plus a payment-processing fee of 2.9%. What this means is that if you were to receive a $100 donation from your Aunt Mary you would actually get $92.10. This fee is subtracted in real time from your donations so you never have to be concerned about getting billed or owing GoFundMe any money. And your donors are never charged anything

The better a communicator you are the faster your dog will get that operationTwo smiling girls have coffee time

People who have been successful in funding their campaigns on GoFundMe say that it’s important to go look at other similar projects and see how they structured their campaigns and how many social shares their campaigns received. Second, it’s critical that you reach out to your personal network. While you might be hoping that strangers will find and fund your campaign the truth is the majority of the money raised on GoFundMe comes from personal networks. In fact, this is what makes GoFundMe work as well as it does. This is due to the fact that the people in your life will not only support your campaign they will help spread the word to their friends and family members, too. This means that outreaching to your personal network is critical. And if possible you should reach out directly and individually to everyone in your network. You will need to explain the purpose of your campaign, how their contribution could make a big difference and how much you would appreciate his or her support.

Finally, another powerful force you could harness in support of your campaign is to contact your local newspaper, nonprofits, and charitable organizations or even set up a community fundraising event. If you want your story to spread via media outlets it must be the type of content that the outlet produces and must emotionally resonate with its readers. As an example of this you might be able to write an emotionally rich story about your dog’s operation and send it to websites such as ModernDogMagazine.com, Packdog.com or Dogster.com. As another example of this if your campaign were to raise money for a trip to Ecuador to help build homes, you might write and send an article to ChoiceHumanitarian.org, GoAbroad.com and other similar websites.

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