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Apache is functioning normally

July 9, 2024 by Brett Tams

In the investing ecosystem, the term “margin” is used to describe the money that may be borrowed from a brokerage to execute trades or a strategy. Buying assets on margin can help magnify gains and returns, but it can do the same with your losses.

When you buy on margin, you’re purchasing assets using money that you borrow from your broker. Margin trading might seem more complicated than some other ways to invest in the stock market, but it’s a method that many investors favor — especially experienced investors. If there’s one thing to know about margin trading, though, it’s that it can cut both ways, and may incur serious risks.

Table of Contents

What Is Margin Trading?

Margin trading, or “buying on margin,” is an advanced investment strategy in which you trade securities using money that you’ve borrowed from your broker to potentially increase your return. Margin is essentially a loan where you can borrow up to 50% of your security purchase, and as with most loans, a margin loan comes with an interest rate and collateral.

Trading on margin is similar to “buying on credit.” Using margin for a trade is also known as leveraging. Margin interest rates are determined by your broker, and collateral types can be stock holdings or cash. Traders must also maintain a margin balance, known as the maintenance margin, in their accounts to cover potential losses.

As noted, margin trading is a bit more complicated (and risky) than some other ways to invest in the stock market, but it’s a tactic used by many investors.

How Does Margin Trading Work?

While margin trading may seem straightforward, it’s important to understand all the parameters.

For all trades, your broker acts as the intermediary between your account and your counterparty. Whenever you enter a buy or sell trade on your account, your broker electronically executes that trade with a counterparty in the market, and transfers that security into/out of your account once the transaction is completed.

To execute trades for a standard cash account vs. margin account, your broker directly withdraws funds for a cash trade. Thus every cash trade is secured 100% by money you’ve already deposited, entailing no risk to your broker.

In contrast, with margin accounts, a portion of each trade is secured by cash, known as the initial margin, while the rest is covered with funds you borrow from your broker.

Consequently, while margin trading affords you more buying power than you could otherwise achieve with cash alone, the additional risk means that you’ll always need to maintain a minimum level of collateral to meet margin requirements.

While margin requirements can vary by broker, we’ve defined and outlined the minimums mandated by financial regulators.

Term	Amount	Definition
Minimum margin	$2,000	Amount you need to deposit to open a new margin account
Initial margin	50%	Percentage of a security purchase that needs to be funded by cash
Maintenance margin	25%	Percentage of your holdings that needs to be covered by equity

💡 Quick Tip: Options can be a cost-efficient way to place certain trades, because you typically purchase options contracts, not the underlying security. That said, options trading can be risky, and best done by those who are not entirely new to investing.

Increase your buying power with a margin loan from SoFi.

Borrow against your current investments at just 12%* and start margin trading.

Example of Margin Trading (Buying on Margin)

Here’s an example of how margin trading works, or could work, in the real world. Imagine you open a margin account with $2,000 at a brokerage firm. It’s helpful to keep the maintenance margin in mind, too, when reading through this example.

Now, say you have your eyes set on Stock X, that’s trading at $100 per share. You can afford to buy 10 shares with the cash in your account. But, you want to buy more — margin allows you to do that. Given your margin account’s 50% initial margin requirement, that means you can effectively double your purchasing power.

So, you can buy 20 shares of Stock X for a total of $2,000, and $1,000 of that purchase would be buying on margin.

If Stock X appreciates in value by, say, 100% (it’s now worth $200 per share), you could sell your holdings and end up with $4,000. You could then pay back your brokerage for the margin loan, and have realized a greater return than you would have without using margin.

But the opposite can happen, too. If Stock X depreciates by 50% (it’s now worth $50) and you sold your holdings, you’d have $1,000, and owe your broker $1,000. So, you’ve wiped out your cash reserves by using margin — one of its primary risks.

To recap: In both scenarios, the margin loan balance remains the same ($1,000), while the equity value took the entire gain or loss.

Bear in mind, too, that for simplicity, this example ignores interest charges. In a real margin trade, you would need to also back out any interest expense incurred on the margin loan before calculating your return; this would act as an additional drag on earnings.

Potential Benefits of Margin Trading

As noted, margin trading has some pretty obvious benefits or advantages. Those may include the following:

• Potential to enhance purchasing power. A primary benefit of margin trading is the potential expansion of an investor’s purchasing power, sometimes exponentially. This could possibly help boost returns if the price of the stock or other investment purchased with a margin trade goes up.

• Possible lower interest rates. Benefits of margin loans might include lower interest rates relative to other types of loans, such as personal loans, if the investor is borrowing money to make trades. Plus, there typically isn’t a repayment schedule.

• Diversification. You could also use margin trading to diversify your portfolio.

• Selling short. Another potential advantage might be a complicated trading method called short selling. Margin trading might make it possible for you to sell stocks short. Short selling differs from most other investment strategies in that investors make a bet that a stock’s price will fall.

Note, however, that the rules for short selling with a margin account can get even more complicated than a traditional margin trade. For instance, Regulation T of the Federal Reserve Board requires margin accounts to have 150% of the value of the short sale when the trade is initiated.

While the benefits of being able to buy more investments — and potentially generate larger returns — might seem appealing to some investors, there are also some potential risks to using margin. It might be worth considering these before you decide if trading on margin is right for you.

Potential Risks of Margin Trading

There are potential benefits, and there are potential risks associated with margin trading. Here are some of those risks:

• Possible loss beyond initial investment. While a primary benefit of margin trading may be increased buying power, investors could lose more money than they initially invested. Unlike a cash account, the traditional way to buy stocks or other investments, losses in a margin account can actually extend beyond the initial investment.

For example, if an investor purchases $20,000 worth of stock with a cash account, the most they can lose is $20,000. If that same investor uses $10,000 of their own money and a margin — essentially a loan — of $10,000 and the stock loses value, they may actually end up owing more money than their initial $10,000.

• Possibility of margin call. Another potential negative aspect of margin trading is getting a margin call. Investors might need to put additional funds into their account on short notice if a margin call is triggered because the investment lost value. Moreover, a drop in value might mean an investor needs to sell off some or all of the investment, even at an inopportune time.

The SEC warns investors that they must sell some of their stock, or deposit more funds to cover a margin call. If you get a margin call, it is your responsibility to deposit more funds, add securities or sell holdings in your account. If you don’t meet the margin call after a number of warnings from your broker, then the broker has the right to sell all or some of the current positions to bring the account back up to minimum value.

💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.

How to Get Started With Margin Trading

Typically, the first step to getting started with margin trading is to open a margin account with a brokerage firm.

Even if you already have a stock or investment account, which are cash accounts, you still need to open a margin account because they are regulated differently. First-time margin investors need to deposit at least $2,000 per FINRA rules. If you’re looking to day trade, this dollar figure goes up to $25,000 according to FINRA rules. This is the minimum margin when opening a margin trading account.

Once the margin account has been opened and the minimum margin amount deposited, the SEC advises investors to read the terms of their account to understand how it will work.
The SEC advises investors to hedge their risks by making sure they understand how margin works, understanding that interest charges may be levied by your broker, knowing that not all assets can be purchased on margin, or even communicating with your broker to get a sense if a margin account is the right tool for you.

The Takeaway

Margin trading, as discussed, means that investors are trading securities with borrowed funds from their brokers. This allows them to potentially increase their returns, but also carries the risk of ballooning losses. As with most investing strategies and vehicles, margin trading comes with a unique set of potential benefits, risks, and rewards.
Margin trading can seem a little more complicated than some other approaches to investing. As the investor, it is up to you to decide if the potential risks are worth the potential rewards, and if this strategy aligns with your goals for the future.

If you’re an experienced trader and have the risk tolerance to try out trading on margin, consider enabling a SoFi margin account. With a SoFi margin account, experienced investors can take advantage of more investment opportunities, and potentially increase returns. That said, margin trading is a high-risk endeavor, and using margin loans can amplify losses as well as gains.

Get one of the most competitive margin loan rates with SoFi, 12%*

FAQ

Is margin trading profitable?

Margin trading can be profitable, but there are no guarantees for investors that it will be. It can also lead to outsized and substantial losses for investors, so it’s important to consider the risks and potential benefits.

What happens if you lose money on margin?

If you lose money on margin, you may have a negative balance with your brokerage, and owe the broker money. You may also be subject to interest charges on that balance, too.

Should beginners trade on margin?

It’s best to consult with a financial professional before trading on margin, but generally, it’s likely that professionals would recommend beginners do not trade on margin.

How do you pay off margin?

Typically, if you have a negative balance in your margin account, you can reduce or pay it off by simply depositing cash into your account, or selling assets.

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.

For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

*Borrow at 12%. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information.
Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

SOIN-Q224-1905305-V1

Source: sofi.com

Apache is functioning normally

July 9, 2024 by Brett Tams

tough housing market but one that’s not impossible to navigate, experts say.

There are still many ways to maximize a budget if you’re a buyer or ensure you earn top dollar and trim your costs if you’re a seller. Strategies include knowing what fees might be negotiable, what home features to invest in, what kind of lender to look for, what types of mortgages are available and what tax benefits there are to selling and buying another home, experts say.

Can I still get a 3% mortgage rate?

Yes, if a seller has a so-called assumable mortgage at a lower rate, you can take it over.

Best mortgage lenders

About 12 million, or 23% of, active mortgages are assumable, according to data and technology firm Intercontinental Exchange. Of those, 7.2 million, or 14%, are assumable at interest rates below 4%, which can save buyers thousands of dollars and generate more bids for sellers. Current loan rates hover around 6-7%.

Arizona, Georgia, Colorado, Florida, Illinois and Texas, you can check assumable listings site Roam, which launched last September.

Real estate agent commissions. If you’re a seller and don’t want to negotiate your own agent’s commissions, ListWise will connect you with agents willing to work under an incentive-based commission, instead of the current flat percentage structure. Basically, agents agree with you on a minimum price they think they can get for your home. If the sale price exceeds that, agents get paid 0.75% of the final price plus the incentive pay of 20% of each dollar over the agreed price. This approach “focuses attention on what is most important, getting the highest price for your home,” said founder Nic Johnson.

State and local government recording fees, usually paid for by either the buyer or seller

comparison shop lenders, experts say.

“Get estimates and see the variance,” said Darren Tooley, senior loan officer at Cornerstone Financial Services. “That gives you some knowledge and basis to say, ‘I’ve got quotes from other lenders and will you work with me?’”

What kind of lender should I hire?

Find a lender who “has a variety of loan products and can coach you to maximize financing with credit improvement, cheaper PMI (private mortgage insurance) options depending on your down payment, paying points or temporary buy downs,” Tooley said.

PMI can be required to buy if your down payment’s less than 20% of the purchase price, and points are a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payments.

Temporary buy downs are prepaid interest that gets you a lower interest rate for a short period. “It’s been a way to help bridge the period (before rates fall),” he said. “People can afford a loan at 5-6% even if it’s a year or two and (then, they) refinance.”

Best mortgage lenders of June 2024

What are tax benefits of selling and buying a home?

If you sell your primary residence, you can exclude from federal income tax up to $250,000 of the profit as an individual or $500,000 as a couple filing jointly. That applies if you lived there for at least two of the last five years and haven’t sold another home in the last two years, the IRS said.

State tax rules vary, so you need to check local laws, said Mike Zovistoski, partner at professional services firm UHY.

Since home prices have appreciated so much over the last five years, many people selling could probably use this exclusion, he said. If you’re thinking about downsizing, you could sell your house, buy a smaller less expensive home in cash and pocket any difference without paying tax on it.

Also, if you itemize, you can deduct mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt. If you’re married filing separately, the limit drops to $375,000, the IRS said.

What are the types of mortgages?

The main types of mortgages are:

Conventional loans, typically used by those with good credit
Government-backed loans, best for those with lower credit scores and smaller down payments
Jumbo loans, usually for those with good credit who want to buy expensive homes
Fixed-rate loans which have fixed interest rates and steady monthly payments
Adjustable-rate loans which have interest rates that periodically move in line with changes in a specific benchmark

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Source: usatoday.com

Apache is functioning normally

July 9, 2024 by Brett Tams

Understand how much extra income you could get from a side hustle like DoorDash and get a budgeting and investing basics refresh.

This Week in Your Money: How much extra money can you really make from side hustles? What are budgeting and early investment strategies for young professionals? Hosts Sean Pyles and Sara Rathner discuss the realities of gig economy jobs with Tommy Tindall, a NerdWallet writer who tried working for DoorDash to see what kind of income it would give him. He shares tips and tricks on the ease of starting with DoorDash, the practical challenges involved, and how your location and lifestyle can impact your earnings.

Today’s Money Question: Host Elizabeth Ayoola joins Sean and Sara to help answer a listener question from a recent college graduate about early investment strategies. They discuss how young professionals can apply the 50/30/20 rule to their finances, the importance of setting clear savings goals, and how to start investing at a young age. They discuss the benefits of starting investments early, the differences between active and passive investing options, and the importance of automating investments to build wealth over time.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

Have you ever gotten a food delivery or a ride in an Uber and wondered whether these gigs are really worth the effort as a side hustle? Well, this episode will deliver some answers.

Sara Rathner:

Cute. Welcome to NerdWallet’s Smart Money Podcast. I’m Sara Rathner.

Sean Pyles:

And I’m Sean Pyles. This episode, Sara and I are joined by our co-host, Elizabeth Ayoola, to answer a listener’s question about money goals, especially when you’re early on in your financial journey. How do you get a grip on your finances and set yourself up for long-term success?

Sara Rathner:

But first, we’re turning to side hustles. This month on Smart Money, we’re running a special series about how you can increase your income, whether you want more money to invest or you’re working on building up your savings, or you really just want some extra cash to spend on whatever junk appears in your social media feeds.

Sean Pyles:

And we are not here to judge you for whatever you spend your money on, but watch any social media influencer or read any article about ways to increase your income and inevitably someone mentions taking up a part-time job in the gig economy like Uber, DoorDash, Airbnb, take your pick. And I’ve always been pretty skeptical that these gigs will net you meaningful amounts of cash, especially considering all the time and effort involved.

Sara Rathner:

Absolutely. If you’re going to put miles on your car or let strangers sleep in your rental property, it needs to be worth it. And we don’t have access to a vacation house for the purposes of this podcast, but we do have a Nerd on staff at NerdWallet who actually did DoorDash for a couple of days to get a feel for whether these jobs live up to the hype. Tommy Tindall is here to share his insights with us. Tommy, welcome back to Smart Money.

Tommy Tindall:

Hey there. Thanks for having me.

Sean Pyles:

So Tommy, you recently made a really fun video for NerdWallet’s YouTube channel where you test drove DoorDash for a few days. What were your hopes and expectations going into this journalistic exercise?

Tommy Tindall:

Yeah, so I study and write quite a bit about side hustles and for this one, I really wanted to go the extra mile, get it, and test it out myself, try to make the advice a little more valuable, right? Give it a true test. And delivery driving is super popular and seemingly accessible, at least that’s what I thought, was my hypothesis, I should say, an easy way to make side money. So I really wanted to answer a couple questions that I think people have about a gig like this, and one is just how easy is it to get started? Can you really sign up on your phone, get a red bag in the mail and start driving? And spoiler alert, yes, that’s what I did. You can. And also can you make real money?

Sean Pyles:

Okay, so what were the main things that you were tracking as you weighed whether this side hustle was worth it?

Tommy Tindall:

I wanted to keep it easy, so I was just keeping a close eye on the time I spent driving while delivering, the miles I drove, and of course how much I earned and really wanted to get to what’s the real pay when you factor in the cost of driving.

Sara Rathner:

So talk with us a little bit about the experience of doing this. Was it fun? Was it boring? Did you get chased by any wild animals? Did you use this as an opportunity to catch up on episodes of Smart Money?

Tommy Tindall:

Well, I wanted it to be fun, but it was kind of hectic. I mean, I remember there were a couple moments of zen where I was just cruising, windows down, just looking outside thinking this is the life. But as soon as I started thinking that way, ding, ding, I’d get another delivery. And I think hustle is a real good term for this because it was kind of a grind. And what really got me, which I thought was interesting, was the constant interaction with my phone. It was draining. I was using maps to navigate, to take orders, and it was just a lot of interaction with the phone while driving.

At one point I, quick story had a 16-mile delivery, which was good pay. It was like $18 of base pay, which was really good. So I took it, but I was so distracted kind of trying to figure out where I was going, that I went the wrong way on 95 and was screaming, pounding the wheel, as you can imagine, and just like, efficiency. That’s what I was going for. Also, keep in mind, I was filming this experience for the video and that totally added to my stress. So maybe more practice without trying to film myself, I could be a little more efficient, get a little more time to enjoy solitude and catch up on my favorite podcasts like this one. But yeah, it was hectic.

Sean Pyles:

Yeah. But you can’t forget that this is a job, right? It’s going to have stressful, difficult moments like any job.

Tommy Tindall:

I was reminded of that quickly, that this is a job and I kind of felt the stress. When I would get a delivery, I wanted to make sure the food was hot and get there quickly, know where I was going. So I had that sense of, hey, you’re on the clock, you’re working.

Sara Rathner:

That distracted driving element is also pretty terrifying.

Sean Pyles:

Tommy Tindall:

Yeah. Now when I see people on the road, I’m wondering are they delivering right now? So before I yell “get off your phone,” I’m wondering that.

Sara Rathner:

Sean Pyles:

Sara Rathner:

They might be.

Sean Pyles:

Either way, get off your phone.

Tommy Tindall:

Sara Rathner:

Tommy Tindall:

Sara Rathner:

I know. So Tommy, you mentioned this in your video, you live in a smaller town, a more remote area. How does that affect your ability to make money from DoorDash or any other app-based job like this?

Tommy Tindall:

I mean, it matters a lot because it’s how busy it’s going to be around you. So location matters. It’s where you live, which towns you have access to with a short drive that may be more populated. So I live, it’s a smaller, more rural but kind of suburban town outside of Baltimore. And what I did before I started was I would watch the DoorDash app, the map section of the app and just kind of see where the hotspots were.

And of course areas closer to Baltimore where it’s more densely populated, more restaurants within close proximity of each other, they were regularly busy during the peak times and they were shaded in pink on the maps. That’s how you know you can go out. When the map is like pink or red, you can Dash on a whim. When it’s gray, which it was sometimes in my town, you have to wait or schedule a Dash for later. But luckily where I live during the busier lunch hour, the option to Dash now was available during the weekday when I tried this. So I was able to stay closer to home, which I think was more realistic, because if I did this, I don’t think I’d want to drive that far. I’d want to stay closer to home, so.

Sean Pyles:

You don’t want to have to commute for your side gig.

Tommy Tindall:

Exactly. You want to get out there and do it maybe on the lunch hour during work, which I was thinking, which we’ll talk about. Probably kind of hard to do because I did find myself going from one end of my town to another because it’s not that populated, so it cost me some time.

Sean Pyles:

Well, that also makes me think about wear and tear on your vehicle and other related expenses like gas. Was that a worry of yours as you were doing the side hustle?

Tommy Tindall:

Yeah, this was a big worry for me because I am somebody who loves cars and I can be a little obsessive about keeping our vehicles maintained. So just all the stop and go driving, it was just kind of giving me a nervous tick. That was on my mind the whole time. I think I kind of make that clear in the video a little bit, and I should also mention that I drive a full size Ram pickup truck, which I thought would be fun to test for this, but not the ideal gig economy vehicle. It’s inefficient, hard to maneuver.

Sean Pyles:

Yeah, lots of storage space, but maybe more than you need for a Starbucks run or something like that.

Tommy Tindall:

Oh, yeah. And the maneuverability. I think at one point I pulled off a busy road into the wrong driveway and I had to sort of Austin Powers my way out. You remember that 20 point turn he had to do in the first movie and all while the customer, the next house over was watching me. So when I finally got over there, we had a little laugh about it and I think she did tip me. I don’t know if she tipped me after the fact or not, which you can do in the app.

Sean Pyles:

You were providing some entertainment along with the delivery?

Tommy Tindall:

Oh, yeah. When I did get to interact with customers like that, I made it kind of fun. I’d be like, “Yeah, you don’t see people driving a truck very often, do you?” But yeah, I was a little anxious about my own vehicle and the wear and tear.

Sean Pyles:

Okay, so Tommy, after three days of Dashing, tell us how much time you spent driving, how far you drove, and how much you earned.

Tommy Tindall:

All right, well here are the stats. I went on three Dashes for this test and drove about six and a half hours on deliveries altogether. I put 90 miles on my personal vehicle, which was my big dump truck as I mentioned. Earned a total of $86, but factor in the 17 MPG that I was getting. And gas was I think around $3.60 a gallon when I was doing this. So less than $19 in fuel costs. True earnings are more like $67 or $10.31 cents an hour. So I mean, not a lot of money.

Sean Pyles:

So I’m going to wager that’s less than you’re making at NerdWallet on an hourly basis.

Tommy Tindall:

Yeah, yeah, yeah. Not giving up the main hustle.

Sean Pyles:

Yeah. Do you think this was worth it?

Tommy Tindall:

So yes and no, and I’ll start by saying I’m glad gigs like this exist because I was really blown away by the accessibility of this gig. I mean, I was signed up and through the background check in literal minutes, and if you, the listener, meets the basic qualifications, I mean you can probably start working and start earning, and I like that. It’s not like saying side hustle options, go be an influencer and wait a couple years to build a following before you make your first dollar. I mean, you sign up and you can make money, which I think is great. And flexibility of course is the selling point of a delivery driving job like this. But at the expense of what? I felt like I was really hustling. I didn’t make a lot of money and thinking back, I mean this would be a real grind for me to do on the side.

It’s really about where I’m in my life. I mean, I have a main job, I have a family, I have young kids in school and sports, a home that continues to break that I have to maintain, I serve in my church and I really covet kind of that little free time that I have left. So I guess all that to say, not quitting my day job. And I think doing this made me more grateful of my main hustle and reminded me that I think there’s merit in what’s become kind of an older way of thinking where you find a good company, work hard, build your skills, grow your confidence, gain expertise, and hopefully increase your salary over time. So whether it’s worth it I think depends on personal situation, because you do make money.

Sara Rathner:

So who do you think a side hustle like this is good for?

Tommy Tindall:

People who do have some extra time or need extra cash and can take advantage of the flexibility to work whenever, because again, that is the selling point of a job like this. Also people who can work the system to their advantage. And you see a lot of YouTube videos of people sort of gaming this and chasing something called peak pay, which is an incentive where you can add plus one, two, three, or more dollars to a delivery if it’s really busy. So the competitive types, which is not me, admittedly, but I do wonder if I would’ve tried this at a different time in my life, like back in college or in my first years working a job when I lived in Washington, DC, had it been available.

Sean Pyles:

Well, Tommy Tindall, thanks so much for talking with us.

Tommy Tindall:

Absolutely. Thanks for having me.

Sean Pyles:

So listener, you just heard Tommy describe an interesting way that he earned some money. Ahead of this month’s series about increasing your income, we have our new Nerdy question of the month for July, which is: what is the most creative thing that you’ve done to earn more money? Maybe you negotiated a significant raise or you’re one of those job hoppers that has a new gig every couple of years. Tell us what is the most interesting thing that you’ve done to increase your income?

Sara Rathner:

I mean, I’ve rented out my basement for a commercial shoot, so there’s that.

Sean Pyles:

Okay. Interesting.

Sara Rathner:

Made 1,400 bucks and bought new storm doors. What a day. Anyway, if you’ve done something like that or something else, call or text us on the Nerd Hotline at (901) 730-6373. That’s (901) 730-NERD, or email us at [email protected]. We might just share your story on a future episode. Maybe inspire some of our other listeners to take up an interesting side hustle.

Sean Pyles:

And while you’re at it, send us your money questions, too. It is our job as Nerds to answer whatever your money question is. So send it our way on the Nerd Hotline, (901) 730-6373 or email it to us at [email protected]. Well now let’s get into this episode’s money question segment after a quick break. Stay with us. We’re back and answering your money questions to help you make smarter financial decisions. This episode’s question comes from Adrian, who left us a voicemail. Here it is.

I’m a recent college graduate. I graduated college in June of 2023 and I am six months into my new corporate world job. I’m trying to save 25% of my income per month and I’m trying to start investing. I don’t really know what my savings goals should be. I’m down for some high risk investments, but I don’t know, I’m trying to just learn the basics of investing, how to plan for life. What would you do if you were in my shoes, if you could go back in time and be 23 and not have kids or a mortgage or anything?

Sara Rathner:

To help us answer Adrian’s question on this episode of the podcast, Sean and I are joined by our co-host, Elizabeth Ayoola. Hey Elizabeth.

Elizabethy Ayoola:

Hey, my favorite dynamic duo.

Sean Pyles:

I love getting a question from a listener who is so young because even though they’re only 10 years younger than me, it does feel like a lifetime ago that I was 23 and making these financial decisions for the very first time. One thing that I find really interesting about Adrian’s question is that while they are so early in their financial journey, their questions really can apply to anyone, because as I’m sure we all know well, plenty of people in their 30s and 40s and beyond are still trying to figure out their budgets and their financial goals. So with that in mind, I think that our listener and all listeners really could benefit from a little bit of budgeting 101. So Elizabeth, where do you think they should start?

Elizabethy Ayoola:

Basically, I think they need to start with a budget. That’s going to tell you how to slice and dice your money. You should probably maybe start with the 50/30/20 budget, which we are advocates for at NerdWallet, or it might be the 60/30/10 budget depending on your cost of living and where you are. Now, for those who don’t know what the 50/30/20 budget is, 50% go to your needs, 30% to your wants and 20% to debt, paying down debt and also saving money. I do think it’s important to know, however, these numbers are not set in stone. It really just depends on your finances and you can adjust the numbers to fit where you are in your financial life right now. I myself currently save above that 20 bucket, but luckily I don’t have that much debt, so that’s why I’m able to save more money and save more than the 20.

Sean Pyles:

Yeah. And our listener wants to save 25% of their income, which is really ambitious, especially for someone who is so young. I think when I was 23, I was saving maybe 2% of my budget, and it wasn’t even intentionally, it was just by chance, because that’s what I had left over at the end of the month.

Elizabethy Ayoola:

You were doing great, Sean, because let me tell you, I was saving 0% of my budget at 20 something. So that is ambitious. I think it’s possible, but it just again depends on where your finances are.

Sara Rathner:

I like an ambitious savings goal, especially when you’re young. Some of the best advice I was given by a CFP that I used to work with was save as aggressively as you can for as long as you can because life only gets more complicated and more expensive. So if aggressive for you is 3%, that’s great. If aggressive for you is 25%, that’s great, and if you have to change it up from month to month, that’s fine too.

Elizabethy Ayoola:

So our listener is dedicated to being a hardcore saver, and I love that for you, listener. So Sean, I know you’re also big on saving and you have some tricks for effectively saving money. What do you think?

Sean Pyles:

So I would start by encouraging Adrian to have something to save for. Again, I’m thinking a lot about myself in my early 20s, I didn’t really have any sort of short, medium, or long-term goals or priorities of any sort because I was just focusing on paying my rent and having fun. So I understand how it can be hard to understand what your priorities might be, and this is where I think something that’s very woo woo but effective can come into play. And that is a visualization exercise. Now, if you’re rolling your eyes, just bear with me because I swear it can be super helpful. So when you are 23, 33, 43, think about where you see yourself in the future in five years, in one year, in 20 years. So maybe that means do you want to move to a new city in the next year? Do you want to buy a house in five years? Do you want to retire in 40 years? Imagine where you will be at these different points in your life and think about how you can save money to get there.

Elizabethy Ayoola:

I would not even say that’s woo woo, Sean. I mean, so I definitely started doing that in my late 20s and honestly, the life I have today was a lot of the woo woo stuff. So it worked for me.

Sean Pyles:

The manifesting is real.

Elizabethy Ayoola:

It’s a real thing.

Sara Rathner:

And if you’re not really into the whole idea of manifesting as a term, that’s fine too. You could also think about it in terms of just naming your goals. Instead of just being like, I’m going to save 25% of my salary. For what? So say what the “what” is. So maybe online savings accounts like high yield savings accounts, you could actually name the account. So you could have, this is the account because I need to replace my car, or this is the account because I need to buy a new computer. Or this is the account that I’m saving up for a down payment on a home for. And then beginning to say, okay, I’m going to put this amount of money in this month for this goal and this goal. Makes it so much easier to stay organized and there’s some science behind it, making it so that you actually are more successful in terms of reaching your savings goals by just naming the goal. So if you don’t want to do the woo woo thing, you could do the practical thing and just put some names on stuff.

Sean Pyles:

Yeah. And what you’re talking about there is really the marriage of the woo woo and the super practical and tactical, where you can start with knowing what you want and then getting the accounts that can help you save the money for that. So for a lot of people, that’s going to mean starting out with an emergency fund, building up over time three to six months of the needs budget that you have. That’s like rent and medicine and groceries, things like that. And then building out the other savings buckets for things like a vacation fund, a house fund, a wedding fund. I have 10 savings accounts across all of the banks that I partner with. And they are all specifically allocated for my different goals. I know 10 is kind of a ridiculous amount, but it works for me.

And what makes it easy is that I automate my deposits into these accounts. So I don’t even have to think about it. One of my accounts is only getting $40 a month, and that’s enough for me to save, to build on that goal over time. But I don’t have to be worried about, oh, okay, am I going to have enough for when I need a new rug for my house eventually. I just know it’s already going in the background.

Sara Rathner:

Yeah, I love this. It’s that concept of reverse budgeting where you automate transfers into your various accounts for different goals every month.

Sean Pyles:

And whenever we talk about savings accounts, it can be easy for we Nerds who are steep in this to maybe even take for granted the fact that high yield savings accounts are such an amazing thing for people to have. People can be getting even around 5% back for what they have sitting in their savings. And if you think about some average returns from the stock market some years are around 7%, and that can be much riskier than just having a savings account. I really do recommend people shop around, look at some of our roundups on NerdWallet and see what sort of high yield savings account might help you meet your goals, because you’ll be getting a much greater return on your money than you would get from a traditional brick and mortar bank.

Sara Rathner:

So our listener, Adrian, is a spring chicken in the world of finance and in the world of investing, which they also mention, having a long time horizon can be one of your best assets. And if you’re in your 30s and listening to this, you still have a long time horizon. So don’t think it’s all over if you didn’t invest in your 30s. Now let’s talk about investing at a younger age. Elizabeth, what are your thoughts there?

Elizabethy Ayoola:

Oh my gosh. I totally get the feeling of being overwhelmed and not understanding where to start. But it’s really important I think, not to let that paralyze you and to just start as soon as you can. And the first step in doing that is creating a strategy. And what the strategy is going to do is it’s going to tell you what your goals are and how much you need to save to achieve them and by what timeline. Now, it doesn’t have to be over complicated because I think that’s where people get tripped up, especially because there’s so many retirement and saving calculators online to help with this. And yes, I’m going to shamelessly plug NerdWallet. We have lots of those, go check them out. But yeah, knowing what age that you want to retire and how much you need will help guide your investing strategy. It’s also going to help you decide what to invest in, the best vehicles to use, and how much to put in each. What do you think, Sara, about time horizons in that sense?

Sara Rathner:

Oh, it’s probably one of the best things you have working for you because the way compound interest works mathematically is the longer of a time horizon you have, the less you can save per month or per year and still come out with a higher amount of money in the end versus waiting an extra 10 years, an extra 15 years, then you have to invest so much more per month just to catch up and still end up with less money overall.

Sean Pyles:

And I would recommend Adrian or anyone else who’s getting started in investing or just taking it seriously for the first time, is to get a lay of the land and understand all of the different investment accounts that are out there. Because there are all these different ones, like a 401k and a Roth and a Roth IRA that people have probably heard about, but really understanding what they are and when one is more beneficial than another for your circumstances can help you make the most of your investments. And something to think about too, since Adrian is so young, is that your younger years are often the best time to take advantage of an IRA because you are getting taxed at a lower rate when you’re earning less money than you will be taxed at later on in your career. So really use these early years to your advantage.

Elizabethy Ayoola:

Yeah, I’m with you Sean. You guys also should decide for those people listening whether you want to do active or passive investing. If you are like me and you ain’t got time for that, and when I say that, I mean checking the stock market every day, then you may want to consider passive investing and some passive investing options include ETFs or robo-advisors and kind of securities like that. But yeah, once you do all those things, the most fun part is automating your investments and knowing that you’re probably growing both while you’re sleeping.

Sean Pyles:

Yeah, I think for a lot of people, sometimes the best strategy to start can be the strategy of “I want my money to make me more money.” And that’s where I started out in my mid 20s when I first started taking investing seriously. I didn’t want to spend a lot of time actively managing investments. And guess what? Actively managed investments often perform worse than passively managed investments. So passive is probably going to be the easiest thing for most people to do. And I just set up an account with a robo-advisor that was trusted and well-reviewed on nerdwallet.com, and I just have automated deposits and it makes it super simple. I’ve been doing it for years and I’m already receiving literal and metaphorical dividends from that.

Elizabethy Ayoola:

Also, you want to think about fees when you’re looking at things like that and what has low fees and performance and other things, but don’t let that stop or overwhelm you as well. Just check out some resources on how to pick an ETF also.

Sara Rathner:

Yeah, I will also add that whenever I hear somebody in their early 20s say that they are, “Down for some high risk investments,” I think somebody’s been talking to their friends about crypto and I don’t know. I mean, for all I know Adrian just means, oh, I really want to dabble in a more stock forward portfolio. Sure. Honestly, you’re probably talking about crypto, aren’t you? Before you dabble in speculative investments, things like cryptocurrency, things like, I don’t know, precious metals and real estate and all sorts of stuff like that, you want to set aside a solid foundation. Just the things that we’ve been talking about, automating transfers of money into retirement accounts, either through your employer or on your own, diversifying those investments. And then, only then, if you have money left over, then you can dabble a little bit, sprinkle a little spice onto your investments, maybe 10% of your portfolio at the most into the higher risk, like crazy stuff. But set a good foundation first. Don’t put all of your money into speculative investments and then wonder why you don’t have any money left because you probably won’t.

Sean Pyles:

And I will just quickly add for the sake of our compliance department, that we are not financial or investment advisors. If you want specific individualized investment advice, speak with a financial advisor, hopefully a fiduciary financial advisor. Okay. Now, I know we’ve been kind of talking around this question for this conversation, but I would love to hear what you two would have done differently if you could go back to when you were 23 and maybe improve your finances, knowing all that you know now?

Elizabethy Ayoola:

That’s a deep, deep, deep sigh. So honestly speaking, the first thing I thought is like, oh my God, I would’ve stopped partying and buying alcohol and save more money. But then I remembered that I was living in Nigeria earning like $400 a month, which was seen as a good salary. So I barely had any money to live, quite frankly. And I think that’s a reminder that sometimes you just ain’t got really barely enough money to save and you just need to earn more. But I definitely would have educated myself more on personal finance and I would’ve at least stashed away something into an investing account. So that’s what I would’ve done. But then again, if I started investing too early, I might be in Turks and Caicos right now instead of chatting to you all. So I guess it worked out how it was supposed to.

Sean Pyles:

I’m glad you’re here with us, but also I would be happy for you if you were traveling the world instead of doing this. Sara, what about you?

Sara Rathner:

So I think a lot of people in their early 20s are, there’s just a lot of fear and uncertainty at that point in your life, and I definitely felt that at that time where there are all these big life milestones that are coming up for you eventually and you just don’t know when they’re going to happen. And so I was so worried about whether or not I’d be able to get to that point. But you’re 23.

Knowing how fast the next 10 to 20 years will go for you, just savor it because everything else is going to pile on really, really fast. And the way you spend your weekends is going to look really different. Do take a couple of steps to improve your position in life later on and use that gift of time. But then, yeah, you should have the wants budget, you should go travel with your friends, go out with your friends. Once you all get partnered up, you’re not going to see your friends as often, so enjoy it.

Sean Pyles:

Well, as someone who definitely enjoyed themselves a lot in their early 20s, I don’t regret any of it, really, shockingly, but it did come at the expense of my financial health in some senses. I really didn’t invest until my mid 20s. I barely had a budget until around the same time. So I would go back and encourage myself to be a little bit more balanced in the having fun and the forward planning aspect of life. But you’ve got to learn your lessons as you learn them. And that’s where I was at the time.

And one thing I think is important to realize and think about as you are trying to map out what having an adult financial life looks like is that the beginning of this financial journey is always going to be the hardest because you simply don’t know what you don’t know. There’s so much to learn. When you’re 23, you’re paying rent on your own for the first time. You’re figuring out how to make meals for yourself for the first time and building these good habits does take time. So don’t feel like you have to do everything all at once, but do make that concerted goodwill effort to try to better your relationship with money and use it to build the life that you want. Well, Elizabeth, thanks so much for coming on and talking with us.

Elizabethy Ayoola:

Thanks for having me.

Sara Rathner:

And that’s all we have for this episode. Remember, we’re here for you, whatever life phase you’re in, and we want to hear your real world questions because we’re here to make you smarter about your money decisions. So turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You could also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode.

Sean Pyles:

And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts and iHeartRadio, to automatically download new episodes. This episode was produced by me. Tess Vigeland helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help. And here’s our brief disclaimer again. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sara Rathner:

And with that said, until next time, turn to Nerds.

Source: nerdwallet.com

Apache is functioning normally

July 8, 2024 by Brett Tams

Looking for second job ideas to increase your income? You’re not alone. Many people look for side gigs to help pay bills, save for big purchases, or simply have extra spending money. Finding the right second job and making extra income can make a big difference in your financial life. With so many options available,…

Looking for second job ideas to increase your income? You’re not alone. Many people look for side gigs to help pay bills, save for big purchases, or simply have extra spending money.

Finding the right second job and making extra income can make a big difference in your financial life. With so many options available, there’s likely something that fits your skills and schedule. Whether you want a job you can do from home or one that gets you out and about, there’s a side job out there for you.

For me, I was able to find a second job and it completely changed my life. In fact, it’s how I paid off my $40,000 in student loans in just 7 months. Making extra money also helped me to stop living paycheck to paycheck and to save more money!

Best Second Job Ideas

Below are the best second job ideas:

1. Blogger

Blogging used to be my side hustle and it is now my full-time job where I have earned over $5,000,000 over the years.

I started Making Sense of Cents just as a hobby, and it eventually turned into my second job. I didn’t know that blogs could make money or that it could become my full-time job. I didn’t even understand what a blog was or how it worked.

Starting a blog can be a great way to earn extra income. You can write about topics you are passionate about, such as travel, food, or personal finance. The best part is that you have the freedom to work on your blog whenever you have free time.

For me, it was a great second job because I could work on my blog before I went to my day job, during my lunch break, after I got home from work, and on the weekends. You get to make your own schedule, so that is a huge plus!

You can learn more about how to begin in my free How To Start a Blog Course here.

Here’s a quick outline of what you will learn:

Day 1: Reasons you should start a blog
Day 2: How to choose what to blog about
Day 3: How to create your blog (you’ll learn how to start a blog on WordPress)
Day 4: How to make money blogging
Day 5: My tips for making passive income from blogging
Day 6: How to grow your traffic and followers
Day 7: Extra blogging tips to help you be successful

2. Proofreader

Being a proofreader is a great second job idea. It’s perfect if you love reading and have a good eye for catching mistakes. You get to find errors in spelling, grammar, and punctuation.

You can work from home as a proofreader. Many companies and websites offer remote proofreading jobs. Some popular platforms include Upwork, FlexJobs, and Scribendi.

You might proofread books, articles, or even student papers. The work can be flexible, letting you choose when to work. This makes it easy to fit into a busy schedule.

Proofreaders can earn a decent amount of money. Some jobs pay by the hour, while others pay by the project. According to some sources, full-time proofreaders can make around $50,000 per year. Even if you don’t work full-time, you can still make a good side income.

I personally have a proofreader for my blog, and I know many others who have proofreaders for their businesses as well. It’s a very much-needed and in-demand job.

You can learn more at How To Start A Proofreading Business And Make $4,000+ Monthly.

This free training teaches you how to start a proofreading side hustle (and how to earn $1,000+ per month!), even if you are brand new and don’t have any previous proofreading experience.

3. Take online surveys

Taking online surveys can be a simple way to earn extra money in your spare time. Companies want to know what you think about their products, services, or marketing campaigns.

Many websites offer paid surveys. You can sign up for these sites and start taking surveys right away. Each survey usually takes a few minutes to complete.

You might earn anywhere from $0.50 to $5 per survey, depending on the length and complexity.

The survey companies I recommend signing up for include:

American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Prime Opinion
Five Surveys
PrizeRebel
Pinecone Research

Online surveys can be done from anywhere with an internet connection, making it easy to fit around your other commitments. Just remember, while this can add up over time, you will not make a full-time income from just taking surveys.

I have taken many, many surveys over the years, and what I like about them is that you can do them on your own schedule – in the mornings, during your lunch break, before you go to bed – whenever. There is no strict schedule and they are super easy to do.

4. Dog walker or pet sitter

Becoming a dog walker or pet sitter is a great way to make extra money. You can set your own schedule and enjoy spending time with furry friends. Plus, many people need reliable pet care (I have personally found it hard to find a good dog sitter in the past, so I personally know that there is a lot of demand for this second job!), so there are plenty of opportunities.

Using dog walking apps like Rover, you can easily find clients. These platforms connect you with pet owners in your area. Depending on how much time you invest, you could potentially earn between $400 and $1,000 a month.

When I have had dog sitters in the past, I was paying around $100 a day for my two dogs to be watched in the person’s home. So, a 10-day trip earned the person $1,000.

Taking care of animals can also be very rewarding. You get to exercise while walking dogs and enjoy the company of pets. It’s a job that keeps you active and can be a lot of fun if you love animals.

No special skills are needed, but being responsible and loving pets is important. You must be punctual and trustworthy since pet owners rely on you to take care of their animals.

My mother-in-law as well as my sister are both dog walkers and pet sitters and enjoy what they do.

5. Virtual assistant

Being a virtual assistant is a great second job idea. You can help businesses and professionals with tasks like managing emails, scheduling appointments, and handling social media. This role tends to have flexible hours, making it easier to fit into your schedule.

One of my first side jobs was working as a virtual assistant. It was a fun and flexible way to earn extra money. There are many kinds of virtual assistant jobs. The money I made helped me pay off my student loans quickly, stop living paycheck to paycheck, and become my own boss. I think it’s a great way to make money, whether you want a part-time or full-time job.

Starting as a virtual assistant can be easy. Websites like Upwork, FlexJobs, and Indeed have listings for virtual assistant jobs. You just have to set up a profile and start applying. For me, I also let my friends and those in my industry know that I was growing my virtual assistant business, and that helped me find jobs as well.

A virtual assistant’s tasks can include:

Managing social media accounts
Scheduling travel and appointments
Managing email inboxes
Organizing events
Communicating with clients
Ordering supplies
Managing calendars
Handling logistics
Coordinating Zoom calls
Moderating online forums
Running personal errands
Answering customer service questions
Performing data entry
Managing websites
Creating presentations
Sending invoices

Now, one virtual assistant most likely won’t do all of these tasks – it simply depends on what the company or person is looking for.

Learn more at Best Ways To Find Virtual Assistant Jobs.

6. Graphic designer

You can make extra money as a graphic designer, and this can be a good second job idea if you want to work from home. A graphic designer is what you think – they design different kinds of graphics.

One way is to create design templates. These can be for websites, social media, or even printable designs. You can sell these templates online and get paid each time someone buys them.

Another option is freelance work. You can sell services like logo design, branding, or social media graphics, and you can find clients on sites like Upwork or Fiverr.

7. Social media manager

Social media managers handle different social media platforms for businesses.

Your job can include creating content, posting updates, and responding to followers. You might also need to analyze data to see what posts are doing well and which ones are not.

They work for one company or multiple clients. It’s important to have good communication skills and a creative mindset. Some social media managers also do graphic design or video editing for their social media posts.

Being a social media manager can be fun and flexible. You can usually work from home and set your own hours. This control and flexibility make it an excellent job for people looking to earn extra income on their own terms.

For me, I have been a social media manager in the past as a second job. It was great as a flexible side hustle!

8. Online tutor

If you enjoy teaching and have a strong understanding of a subject, you can try finding online tutoring jobs. Online tutoring lets you share your skills and help students from anywhere, and you can tutor kids in math, science, and reading, or even help them prepare for tests like the SAT or ACT.

Platforms like Wyzant and Tutor.com connect you with students looking for help. You create a profile, list your skills, and set your rates. Most tutors charge between $30 and $60 per hour. Teaching English as a second language is also a popular option. Many companies need English tutors to teach students abroad.

Online tutoring is flexible because you can choose your own hours and work from home. This makes it easy to fit around your teaching job or other responsibilities. Some tutors even make up to $1000 a week by dedicating just a few hours each day.

9. Bookkeeper

Becoming a bookkeeper is a great second job, and it can typically be done from home.

Bookkeepers keep track of financial records for businesses. This could include recording transactions, managing payroll, and preparing financial reports.

You don’t need a special certification to become a bookkeeper, making it easier to start.

The best part is that you can do this job from anywhere with just a laptop and some software. This flexibility means you can work from home or even when you’re traveling.

Since bookkeeping services are always in demand, you can find clients easily. This can be a very profitable side hustle. Some bookkeepers even charge $60 an hour or more.

Learn more at How To Find Online Bookkeeping Jobs.

This free training will teach you what you need to know to become a virtual bookkeeper and make money from home.

10. Freelance writer

Working as a freelance writer is a great way to make extra money.

Freelance writers are self-employed and work for magazines, blogs, websites, companies, and more. A lot of what you read online today is written by a freelance writer.

I have been a freelance writer for many years, and I really enjoy it. I have written for many different websites and companies, and I make good money doing so.

You can write from home, at your own pace, and choose projects that interest you. Many companies need blog posts, articles, web content, and social media posts.

11. Photography

Getting paid to take pictures is a popular second job idea.

What’s great is that there are many ways to get paid for photography, such as:

Stock photos – Stock image websites are popular places for photographers to sell their pictures. These sites let customers buy royalty-free photos for personal or business use. Websites, TV shows, books, social media accounts, and more use stock photos all the time. Some popular stock photo websites are Shutterstock, iStock by Getty Images, Adobe Stock, and Dreamstime.
Portraits and event photos – As a photographer, you can focus on taking portraits and event photos. This area is in high demand, especially for weddings, elopements, birthdays, and corporate events.
Post pictures on Instagram or Facebook – Social media platforms like Instagram are great for sharing your pictures and gaining followers. Many people make a full-time income from their Instagram accounts. They do this through sponsored partnerships with companies, affiliate marketing, and selling their own products.

12. Personal trainer

Becoming a personal trainer is a great second job idea. You can help people get in shape while earning extra money.

You can work at a gym or do private sessions at clients’ homes. Some trainers also provide online coaching, which gives you more flexibility.

Personal trainers sometimes create workout plans tailored to each client’s needs. They might also give advice on nutrition, and this way, they can help clients with both exercise and diet for better results.

Personal training can be done part-time, which makes it a good fit if you have another job. Many people want training in the mornings, evenings, or weekends.

13. Etsy seller

Starting an Etsy shop can be a fun and rewarding second job. If you enjoy crafting or creating handmade items, this might be perfect for you. Etsy is a popular online marketplace where you can sell unique products.

There are many things you can sell on Etsy, such as:

Etsy can be a great way to turn your hobbies into extra income.

You can learn more at How To Sell On Etsy Successfully: A Beginner’s Guide.

Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.

14. Babysitter

Babysitting is a great way to earn extra money. You can choose your own hours, making it easy to fit it around your main job or school.

Parents always need trustworthy people to watch their kids, and they might need help for an evening out or during the day if they work long hours.

As a babysitter, you can earn around $15 to $25+ per hour, depending on your experience and location. Some families might even pay more if you have special skills, like CPR training or if you are watching multiple children.

You can find babysitting jobs through local community boards, babysitting apps, or word of mouth. Sometimes, friends or family might also need help.

15. Delivery driver

A delivery driver job is one of the most popular side hustle ideas. You don’t need a lot of experience to get started, and all you need is a vehicle and a driver’s license. Many services, like DoorDash, Uber Eats, and Instacart, let you choose your own hours. This flexibility is perfect if you have a busy schedule.

You can deliver different items depending on the service you work for. Some companies focus on food delivery, while others may deliver groceries or packages.

The pay can vary based on where you live and how much you work. Some drivers make around $15 to $25 per hour including tips.

16. Bartender

Bartending is a flexible and fun second job. You can work at bars, restaurants, or special events like weddings.

Some bartender jobs don’t require a lot of experience. You usually have to start as a barback, helping with stocking and cleaning, then learn to make drinks. Then, you may be able to move up and find a part-time job as a bartender.

17. Transcriptionist

Being a transcriptionist can be a great second job. Transcriptionists listen to audio recordings and type out what they hear. It’s a simple job and doesn’t require a lot of training.

You can do this job from home and all you need is a computer and good internet. This makes it a flexible option where you can work on transcriptions during your free time or on weekends.

There are usually some requirements. Many places want you to type fast and accurately. For others, you might need to pass a background check or transcription tests.

You can learn more at 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly.

In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.

18. Rent your extra space

Do you have an extra room, basement, or garage? Renting out your extra space can be a great way to earn some extra cash each month passively.

You can list your spare room on websites like Airbnb or Vrbo if it’s a room or apartment.

If you have a garage or storage space, you can rent it out for storage. Websites like Neighbor allow people to find storage options nearby.

Before you start, check local laws and regulations. Some areas have rules about renting out space, so it’s important to be informed.

19. Handyperson

Being a handyperson can be a great way to make extra money. You can help people fix things around their homes, such as fixing leaky faucets, repairing doors, or assembling furniture.

You don’t need fancy tools for many jobs, just a good set of basic tools.

Many people need small repairs done but don’t have the skills or time. That’s where you come in. You can find clients through local ads, word of mouth, or online platforms like Taskrabbit.

Working as a handyperson has flexibility too and you can choose jobs that fit your schedule.

20. Rideshare driver

Apps like Uber and Lyft allow you to drive people around and get paid for it.

One of the best parts about driving for rideshare apps is the flexibility. You can set your own hours and work whenever you want.

Most rideshare companies have an easy sign-up process. They usually require a background check, a valid driver’s license, and a car that meets their standards. Once approved, you can start accepting rides and earning money.

The earnings vary depending on your location, the time of day, and how many hours you drive. Some drivers make a nice side income by working during peak hours when rates are higher.

21. Restaurant server

Being a restaurant server can be a great way to earn extra money and is popular for evening second jobs. Many restaurants have flexible hours, which is perfect if you need to juggle another job or school.

Servers often get tips, so your income can vary day to day. Some nights are busier and can bring in more money.

22. Clean houses

Cleaning houses is a good way to earn extra money with a second job. You can work on the weekends or after your regular job.

Plus, you can choose your clients and set your own hours.

To get started, all you need are basic cleaning supplies. You can sell your services to friends and family first. Word-of-mouth is powerful, and you might get more clients through recommendations.

23. Write book reviews

If you enjoy reading and sharing your thoughts about books, you can earn money by writing book reviews. Authors and publishers value your honest opinions because they help other readers decide what to read next. Readers also enjoy reading these reviews, making it helpful for everyone involved.

Here are some websites where you can earn money by writing book reviews:

OnlineBookClub.org – They provide free books at first. After your first review, you can earn cash for each review you write, typically between $5 and $60.
Kirkus Media – They look for reviewers for both English and Spanish books, especially for the Kirkus Indie section. Reviews are around 350 words and due two weeks after the book assignment. They cover all genres, with over 10,000 books reviewed annually.
Upwork – Create a profile and set yourself up as a book reviewer. This freelance platform allows you to set your own rates, with book reviewing rates ranging from $15 to $75 per hour.
The US Review of Books – They hire freelance writers for 250- to 300-word reviews that go beyond summary to provide insights into the book. Applicants need to submit a resume, writing samples, and references.
Reedsy Discovery – Review books before they are published and earn through tips from readers, typically ranging from $1 to $5 per review. It’s a way to influence which books gain popularity early on.
Other opportunities – Websites like Booklist (pays $15 per review, focused on short reviews for libraries), BookBrowse, Women’s Review of Books, and Publishers Weekly also pay for book reviews and are actively looking for new reviewers.

You can learn more at 16 Best Ways To Get Paid To Read Books.

24. Mow lawns

Mowing lawns can be a great second job. It’s simple, flexible, and very profitable.

You can start with not a lot of money too. For example, if you already have a lawn mower, you’re ready to go, and you can start by seeing if anyone in your neighborhood needs their lawn mowed.

Pricing your services depends on the size of the lawn and the complexity of the job. Some lawns might be easy and quick, others might take more time. Many people charge between $40 and $50+ per lawn.

Frequently Asked Questions

When looking for second job ideas, it’s important to find something that fits your schedule and goals. Here are answers to some common questions about picking the best side gig and managing two jobs.

What is the best 2nd job to have?

The best second job depends on your interests and skills. Some popular side hustle ideas include blogging, proofreading, taking online surveys, dog walking or pet sitting, and being a virtual assistant. These jobs have flexibility and can often be done from home.

What are some good jobs I can do at night after my day job?

Jobs you can do at night include customer service representative, security guard, bartender, or freelance work like writing and graphic design. These jobs usually have evening shifts or can be done remotely, fitting in well with a daytime schedule.

What are some good second jobs at night from home?

If you want to learn how to make extra income while working full-time, then my favorite way is to find good second jobs that you can work at night from home. This way, you don’t have a commute and it won’t interfere with your day job. Some good evening jobs from home include blogging, taking surveys, proofreading, bookkeeping, writing book reviews, and transcribing.

How can I make an extra $1000 a month?

To make an extra $1000 a month, you may want to try freelance writing, virtual assistant work, or becoming a part-time tutor. These jobs can pay well and offer flexible hours, allowing you to work around your primary job.

How can I make an extra $2000 a month?

Earning an extra $2000 a month may require a higher-paying side gig. Options include freelance web development, consulting, or starting a small business like dropshipping. These jobs can have higher earnings but may require more specialized skills or time investment.

How to get a second job with a 9-5?

You can get a second job with a nine-to-five by looking for evening or weekend positions and looking for jobs with flexible hours such as bartending, retail cashier, or working as a rideshare driver. Online jobs like tutoring or freelancing can also have nice flexibility to work after your main job.

What is the highest paying side hustle?

The highest-paying side hustles can include freelancing in tech fields like software development, graphic design, or consulting. Real estate investment, if you have the money to start investing, can also be very high paying.

Do you get taxed more if you have two jobs?

Having two jobs can put you in a higher tax bracket, meaning you might pay more in taxes. It’s important to understand how this affects your overall earnings. I recommend talking with a tax professional to talk about your tax situation and to make sure that you aren’t overpaying (or underpaying!).

How will my employer know if I have a second job?

Your employer may know if you have a second job if it affects your primary job performance or if you disclose it. Some employers also run social media checks to see if they can learn anything about you that may hurt their business. You may want to check your employment contract if you are worried, as some employers may have clauses about working multiple jobs.

Is having two jobs worth it?

Having two jobs can be worth it if you need extra income for savings, paying off debt, or reaching financial goals. It requires good time management and can be tiring, but many find the financial benefits to be rewarding. For me, I found having more than one job well worth it because it allowed me to pay off my student loan debt quickly, save more money, and pursue my passions.

Second Job Ideas – Summary

I hope you enjoyed this article on the best second job ideas.

As you can see, there are many popular second job ideas that may interest you. From online jobs like blogging, proofreading, and bookkeeping to in-person jobs like personal training, delivery, restaurant jobs, and more, there are many ways to make extra money so that you can reach your goals.

If you need a second job while working full-time, you are not alone. Many people are in your shoes. I recommend finding something that best fits your schedule and is at least somewhat flexible so that you aren’t making yourself too tired.

For me, I have had many side jobs. One thing that has always helped me is to make sure that it would fit with my day job and be flexible – because my day job did come first. Plus, I didn’t want to waste more time than I would need to by commuting back and forth or doing things that weren’t needed.

What do you think are the best second job ideas?

Recommended reading:

Source: makingsenseofcents.com

Apache is functioning normally

July 8, 2024 by Brett Tams

Need to make money fast? Check out these 12 ideas that can help you earn cash quickly, both online and in-person. Some options offer a high return on investment, while others take less time. Find the best way for you to boost your income now.

Rent Out a Room / Garage Space / Extra Space

Image Credit: Zstockphotos.

Got an extra room or garage space? Rent it out for quick cash. Use platforms like Airbnb to earn $50 per night or find a long-term renter for $600 per month. Even a parking spot can bring in money. Turn unused space into income with little effort.

Learn to Trade Stocks

Image Credit: Ngampolthongsai.

Learn to trade stocks with a solid plan and make serious money. It’s not gambling if you know what you’re doing. With discipline and strategy, you can grow your wealth. Start small, learn the ropes, and watch your money grow.

To learn more: How To Invest In Stocks For Beginners: Investing Made Easy

Make Cash Pet Sitting / Dog Walking

Image Credit: Valerii Honcharuk.

Love animals? Make money fast by pet sitting or dog walking. People need help caring for their pets, and you can get paid for it. It’s a fun side hustle that lets you earn cash while spending time with furry friends.

Trade Your Skills for Money

Image Credit: Dean Drobot.

Got a marketable skill? Use it to make money on platforms like Fiverr. Freelance jobs can be a great side hustle and even turn into a full-time business. Earn more by delivering high-quality work and getting great reviews.

Sell Stuff or Become a Flipper

Image Credit: Pixelshot.

Clear out your home and make money by selling stuff you don’t use. Price items right and the market will buy. It’s a quick way to earn cash and declutter your space at the same time.

Pickup a Second Job

Image Credit: Sturti from Getty Images Signature.

Need fast cash? Get a job with tips for instant money. With many companies needing part-time help, it’s easy to find work. Plus, higher minimum wages mean more money in your pocket.

Take Online Surveys for Easy Cash

Image Credit: AndreyPopov from Getty Images

Share your opinions with companies and get paid for it. Online surveys are a simple way to make money in your free time. The more surveys you complete, the more you earn.

Participate in Focus Groups

Image Credit: Pixelshot.

Join focus groups and get paid for your opinions. These in-person sessions are a great way to make money. Search for local focus groups online and sign up to earn extra cash.

Become a Mystery Shopper

Image Credit: Anyaberkut from Getty
Images.

Get paid to shop and give feedback. Each mystery shop has guidelines, so follow them to get paid. Start small, and with time, you’ll get better-paying gigs like restaurants. It’s easy money with some patience.

Review Websites for Money

Image Credit: Rido.

Earn cash by reviewing websites. Platforms like UserTesting pay you to give feedback on various sites. Each review takes around 20 minutes, earning you $10-$60. It’s an easy way to make money from home.

Stop Spending Money & Save

Image Credit: Designer491 from Getty Images.

Save money fast by cutting unnecessary spending. Saying no to purchases can quickly put cash back in your wallet. It’s a simple way to improve your finances without extra effort.

To learn more: 10 Ways on How to Drastically Cut Expenses Now

Find Free Bonuses for Extra Cash

Image Credit: Pixelshot.

Look for free bonuses from credit cards, bank accounts, and gift cards to earn extra cash. Companies want your business, so take advantage of their offers to make quick money.

Find More Ways to Make Money Fast

Image Credit: Alecu Buse’s Images.

Discover the best ways to make money fast. With various options available, you can earn extra cash based on the effort you put in. The opportunities are endless.

To learn more: 21+ Genius Ways on How to Make Money Fast

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

July 8, 2024 by Brett Tams

You just got a new job offer and are wondering if $110,000 is a good salary. The truth is that in many parts of the U.S., it can be, especially for a single person. In most cases, you can probably cover your basic expenses and have some left over for savings.

Of course, there are many factors to consider when thinking about whether $110,000 is a good salary for you. Let’s dive in.

Is $110K a Good Salary?

In most cases, $110,000 is a good six-figure salary for a single person. Even when you factor in the rising costs of housing, food, and transportation, you can still comfortably afford to live in most parts of the country.

However, if you’re in an area where the cost of living is higher, you may find that you can afford the basics but not have much left over for other goals like retirement or travel. That’s why it’s crucial to look at your current spending patterns and the cost of living in your area to discern whether earning $110,000 is enough for your needs. A money tracker can give you a snapshot of your finances and provide insights into your spending and budgeting.

Check your score with SoFi Insights

Track your credit score for free. Sign up and get $10.*

Median Income in the U.S. by State in 2024

According to the latest data available from the U.S. Census Bureau, here is the median household income for all 50 U.S. states:

State	Median Household Income
Alabama	$59,609
Alaska	$86,370
Arizona	$72,581
Arkansas	$56,335
California	$91,905
Colorado	$87,598
Connecticut	$90,213
Delaware	$79,325
Florida	$67,917
Georgia	$71,355
Hawaii	$94,814
Idaho	$70,214
Illinois	$78,433
Indiana	$67,173
Iowa	$70,571
Kansas	$69,747
Kentucky	$60,183
Louisiana	$57,852
Maine	$68,251
Maryland	$98,461
Massachusetts	$96,505
Michigan	$68,505
Minnesota	$84,313
Mississippi	$52,985
Missouri	$65,920
Montana	$66,341
Nebraska	$71,772
Nevada	$71,646
New Hampshire	$90,845
New Jersey	$97,126
New Mexico	$58,722
New York	$81,386
North Carolina	$66,186
North Dakota	$73,959
Ohio	$66,990
Oklahoma	$61,364
Oregon	$76,362
Pennsylvania	$73,170
Rhode Island	$81,370
South Carolina	$63,623
South Dakota	$69,457
Tennessee	$64,035
Texas	$73,035
Utah	$86,833
Vermont	$74,014
Virginia	$87,249
Washington	$90,325
West Virginia	$55,217
Wisconsin	$72,458
Wyoming	$72,495

Recommended: Average Income by Age

Average Cost of Living in the U.S. by State in 2024

As anyone who’s ever received a paycheck knows, your salary and the amount you actually take home after taxes differ. After deducting for federal income taxes, Social Security tax, and Medicare, the average take-home pay on a $110,000 salary is around $85,544 — and that doesn’t include state taxes.

With that in mind, looking at the average cost of living in different states can help you decide whether $110,000 is a good salary. In the chart below, you can see how much a typical resident of each state spends on basics like food, transportation, utilities, and housing.

State	Personal Consumption Expenditure
Alabama	$42,391
Alaska	$59,179
Arizona	$50,123/td>
Arkansas	$42,245
California	$60,272
Colorado	$59,371
Connecticut	$60,413
Delaware	$54,532
Florida	$55,516
Georgia	$47,406
Hawaii	$54,655
Idaho	$43,508
Illinois	$54,341
Indiana	$46,579
Iowa	$45,455
Kansas	$46,069
Kentucky	$44,193
Louisiana	$45,178
Maine	$55,789
Maryland	$52,651
Massachusetts	$64,214
Michigan	$49,482
Minnesota	$52,849
Mississippi	$39,678
Missouri	$48,613
Montana	$51,913
Nebraska	$37,519
Nevada	$49,522
New Hampshire	$60,828
New Jersey	$60,082
New Mexico	$43,336
New York	$58,571
North Carolina	$47,834
North Dakota	$52,631
Ohio	$47,768
Oklahoma	$42,046
Oregon	$52,159
Pennsylvania	$53,703
Rhode Island	$52,820
South Carolina	$46,220
South Dakota	$48,997
Tennessee	$46,280
Texas	$49,082
Utah	$48,189
Vermont	$55,743
Virginia	$52,057
Washington	$56,567
West Virginia	$44,460
Wisconsin	$49,284
Wyoming	$52,403

Source: U.S. Bureau of Economic Analysis

How to Live on $110K a Year

You can live relatively well on $110,000 a year as a single person — as long as you manage your expenses carefully. First, consider what your short- and long-term goals are. Do you want to have enough money set aside for a week-long vacation each year? Are you eager to be debt-free within a certain timeframe? Or do you want to max out your contributions to your employer-sponsored 401(k)?

Balancing these goals with your everyday expenses will help ensure you can afford the necessities while taking care of your future self.

How to Budget for a $110K Salary

Budgeting on a $110,000 salary is similar to how you would budget for other income thresholds. Consider the following strategies:

Determine Your Take-Home Pay

Assuming you make $110,000 gross, you’ll need to account for how much you’ll receive after taxes and other deductions are taken into consideration. For example, you may have to pay health insurance premiums (an average of $1,401 a year for an individual plan) or pretax retirement contributions (up to $23,000 per year). Let’s say you pay federal taxes and deductions, contribute the maximum to your 401(k), and pay the average amount for your health care, you’d be left with a take-home pay of around $61,143.

Bottom line: Once you have a clearer picture of what’s coming in, you can then budget appropriately for it. Tools like a budget planner app can help make the job easier.

Set Aside Money for Long-Term Savings

It’s fun to live in the moment, but it’s also important to think about the future. Consider using part of your income to start an emergency fund, and set aside money for larger expenses and goals. You may also want to look into savings vehicles like a high-yield savings account, which typically offers a higher interest rate than a traditional savings account.

Plan to Get Out of Debt

Using part of your salary to tackle your high-interest debt faster can be a good idea to free up funds for other pursuits. You can also consider options like refinancing or debt consolidation loans to help you reduce interest costs.

Maximizing a $110K Salary

Getting smart with your money means knowing how you can maximize the salary you earn. In general, you can aim to do so by spending only what’s necessary, investing so you can have a comfortable retirement, and saving.

You may want to consider moves like:

• Boosting your credit score to increase your chances of getting competitive interest rates

• Investing in securities that charge minimal fees

• Shopping around for loans to find the best rates and terms

• Finding a home that fits your budget

• Taking public transit when you can instead of driving a car

Quality of Life with a $110K Salary

You can have a good quality of life on a $110,000 salary depending on how you allocate your money. Even if you live in a higher cost of living area, there are ways to maximize the amount you earn to live well. Take the time to compare larger expenses like housing, insurance, and healthcare costs.

Recommended: Average Pay in the United States

Is $110,000 a Year Considered Rich?

Does earning $110,000 mean you’re considered “rich”? Well, the term is relative. It all depends on where you live and how you spend your money. For example, if you invest a good chunk of your income to help you increase your overall net worth and live in a safe area, some would consider that being rich. However, if you’re the only income earner in your family of six, then $110,000 per year is likely not enough to make you feel wealthy.

Is $110K a Year Considered Middle Class?

According to the Pew Research Center, middle-class workers earn a salary that’s two-thirds to double the national median income. By that definition, a middle-class household makes between $47,189 and $141,568, and $110k falls within that range. However, where you live will also factor into whether you’re considered middle class. That’s because different states have their own median household earnings.

Example Jobs That Make About $110,000 a Year

high-paying jobs that earn a median wage of $110,000 or more:

• Architectural and engineering managers

• Financial analysts

• Software developers

• Math and science postsecondary teachers

• Dentists and doctors

• Nuclear power reactor operators

The Takeaway

Earning $110,000 can mean you have the ability to live a good quality of life. Plus, it’s higher than the average salary in the U.S. That being said, you’ll still want to be mindful about where your money goes so you can achieve your financial goals and more.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

Can I live comfortably making $110k a year?

It is possible to live comfortably making $110,000 per year. However, doing so largely depends on factors like whether you have dependents, where you live, and what types of necessities and luxuries you want.

How much is $110k a year hourly?

Assuming you work 40 hours per week, you’ll earn around $52.88 each hour.

How much is $110k a year monthly?

You will earn about $9,166.66 each month on a $110,000 annual salary.

How much is $110k a year daily?

Assuming you work five days a week, $110,000 per year salary equates to roughly $423.07 per day.

Photo credit: iStock/Jacob Wackerhausen

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Apache is functioning normally

July 5, 2024 by Brett Tams

Your 40s can be a pivotal decade in your life. It’s typically a time of peak earnings, growing family responsibilities, and an increased focus on long-term financial stability. You may have a house, kids, and a busy job. College expenses may be looming. Maybe you’re hatching a plan to start your own business or buy a beach house that’ll one day be your empty-nester home.

To navigate these years successfully, it’s essential to make strategic financial moves that can secure your future and make your plans and dreams a reality. Here are some critical financial planning tips to consider as you move through your 40s.

7 Financial Moves to Make During Your 40s

In your 40s, you’re old enough to know what you want and likely have enough earning years ahead to achieve your goals — if you manage your money right. The following strategies can help you build wealth in your 40s.

1. Maintain or Replenish Emergency Funds

Life is full of unexpected twists and turns. Not all of them are fun, such an expensive car or home repair, a medical emergency, or losing your job. An emergency fund offers financial stability during a stressful time. It also saves you from running up expensive debt that could derail your financial goals.

A general rule of thumb is to have six to 12 months’ worth of living expenses stashed away for the unexpected. If you already have an emergency fund but it has been partly or fully depleted, you’ll want to prioritize replenishing it to maintain financial security.

Consider setting up automatic transfers into savings to build your emergency fund consistently. Keep these funds in a liquid, easily accessible account, such as a high-yield savings account, to ensure you can access the money quickly when needed.

2. Manage Your Debt

Debt management is a crucial aspect of financial planning at any age, but it becomes even more critical in your 40s. Since high-interest debts, like credit card balances, can significantly hinder your ability to save and invest for the future, you’ll want to prioritize paying them off as quickly as possible.

One strategy that can help is the avalanche payoff method. Here, you list your debts in order of interest rate from highest to lowest, then put extra money toward the highest-interest debt, while continuing to pay the minimum on the others. Once that debt is paid off, you put your extra funds toward the debt with the next-highest rate, and so on.

Alternative approaches to paying down high-interest debt include getting a low- or no- interest balance transfer credit card or taking out a personal loan for debt consolidation with a lower rate than you are paying on your cards.

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3. Revisit Retirement Saving

In your 40s, you’re roughly at the midpoint between entering the workforce and traditional retirement age. How you invest and save for retirement at this point in your career can strongly impact your future assets and ability to one day retire comfortably.

If you’re not currently contributing to a retirement plan, such as a 401(k) or individual retirement account (IRA), now’s a good time to start. If you have been, it’s time to assess your progress. Consider how much of a nest egg you will need to retire and, using an online retirement calculator, whether your current plan will get you there.

If you’re behind on your savings, consider stepping up your contributions or, if you’re already contributing the max allowed, making “catch-up” contributions down the road. Starting at age 50, the IRS allows higher maximums designed to help people catch up on their retirement savings goals.

4. Plan for Childrens’ College Expenses

If you have kids, planning for their future education expenses may be top of mind. College costs continue to rise, and early planning can alleviate future financial stress. If you haven’t started saving for college expenses, you may want to explore opening a 529 college savings plan, which offers tax advantages and can be a flexible way to save for educational expenses.

An online college cost estimator can help you determine how much you need to stash away each month or year, based on the year your child will likely attend college and the type of school they might choose.

Just keep in mind that it’s important to balance college savings with other financial goals, like retirement. As kids get closer to leaving the nest, you may also want to encourage them to apply for scholarships and grants, and explore financial aid options.

5. Choose or Reevaluate Insurance Coverage

Insurance is an important component of financial planning in your 40s. You’ll want to evaluate your current insurance coverage and make sure it’s adequate to meet your family’s needs. This includes not only health and home insurance, but also life and disability insurance.

Life insurance provides financial security for your family should you die prematurely. If you don’t currently have a life insurance policy, consider purchasing one. If you do have one, you’ll want to make sure your policy’s coverage amount is sufficient to cover your family’s current living expenses, outstanding debts, and future financial needs, such as college tuition for your children.

It’s also a good idea to review your disability insurance, which protects your income if you’re unable to work due to illness or injury. Many companies provide a policy through work. However, you may want to consider supplementing employer-provided coverage or, if you’re self-employed, getting your own policy. This offers a different, but equally important, safety net for you and your family.

Recommended: Which Insurance Types Do You Really Need? Here Are 6 to Consider

6. Invest Outside of Retirement

While retirement accounts are crucial, investing outside of retirement can diversify your portfolio and help you achieve goals that may be five or 10 or more years away, such as a downpayment on a vacation home or a child’s wedding.

Though investing carries risk and can be volatile in the short term (which is why you generally don’t want to invest funds you’ll need in the next few years), an investment account has the potential to grow more than other types of accounts over the long term. Consider taxable investment accounts that align with your risk tolerance and financial objectives.

7. Meet with a Financial Professional

Getting expert advice on managing your finances can be invaluable at this stage of life. Whether you opt for regular meetings or simply go for a one-time consultation, a financial professional can provide valuable insights and help you navigate complex financial decisions.

An advisor will typically look at your whole financial picture and assist you with creating a comprehensive financial plan. This may include optimizing your investment strategy and ensuring you’re on track to meet your goals, including retirement, investments, and college savings.

The Takeaway

It’s never too late to take control of your finances. In your 40s, you are likely entering your prime earning years, so it’s a good time to focus on paying down debt, preparing for the next chapter of your children’s lives, and saving and investing for your future retirement. With some wise money moves, you’ll be set to make the most of this decade and beyond.

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FAQ

What financial goals should a 40-year-old have?

Ideally, a 40-year-old will want to focus on several financial goals. These include:

• Establish or maintain an emergency fund with three to six months’ worth of essential living expenses.

• Reduce financial burdens by paying off high-interest debt.

• Ensure you’re on track with retirement savings by maximizing contributions to retirement accounts.

• Start or continue saving for children’s college expenses through plans like 529s.

• Consider investing outside of retirement to diversify your portfolio and build wealth.

How much should a 40-year-old have saved?

By age 40, financial advisors often recommend having three times your annual salary saved for retirement. This benchmark ensures you’re on track to meet long-term financial goals and maintain your desired lifestyle in retirement.

In addition, you’ll want to maintain an emergency fund with three to six months’ worth of living expenses.

Savings outside of emergency and retirement, such as investments in taxable accounts, can further enhance financial security. The exact amount can vary based on individual circumstances, income, lifestyle, and future goals.

How can I build my wealth in my 40s?

To build wealth in your 40s, you’ll want to focus on several strategies:

• Maximize retirement account contributions, taking full advantage of employer matches.

• Pay off high-interest debts to free up resources for savings and investments.

• Establish or maintain an emergency fund to cover unexpected expenses without derailing financial goals.

• Consider additional income streams, such as side businesses or rental properties.

• Diversify investments across stocks, bonds, real estate, and other assets to balance risk and growth potential.

Photo credit: iStock/shapecharge

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SOBK-Q224-1920632-V1

Source: sofi.com

Apache is functioning normally

July 4, 2024 by Brett Tams

Inside: The answer is so obvious! Stop the assumptions with the 3 percent or 4 percent rule of retirement. Learn how much money to save for retirement today.

We all know that saving money for retirement is something we should do.

Maybe you are contributing the minimum to your 401K through work to get the match. Possibly saving money in a Roth IRA.

But, are you truly saving enough for retirement?

More than likely not.

Don’t feel like you are alone. According to a new study, only half of households actually have money saved in retirement accounts. The good news for those who have saved is the dollar amount saved for retirement has been increasing in the past 10 years.

Here is the real reason you don’t save for retirement… you have absolutely no clue how much money you need to be saved to retire.

You have tried to use all of the online retirement calculators from all of the big companies. Your results are millions of dollars different. You have no clue where to start, or what to believe.

And then you just get unmotivated because you’re like there’s absolutely no way I can make that dollar amount work.

So, What is Our Retirement Number

Personally, I completely get it this is a conversation. My husband and I have had it for years.

What is our retirement number?
What amount do we need to retire with?
And honestly, even can I actually save that much before I am too old to work?

It is all a complete unknown, it is a best-guess scenario.

There is absolutely no way for you to truly understand how much you need because there are so many things that go into it, including inflation, your savings rate, your withdrawal rate, and your anticipated expenses. So there’s a lot of variables and that’s when the variables get too confusing you don’t know which way to start.

One Guaranteed Truth…

The financial advisors believe they are the know-all-be-all with their calculations while charging you an asset management fee that is putting a drag on your overall portfolio.

And then October 27, 2020, Bill Bengen announced that instead of using the 4% rule is outdated, and now you can use a 5% rule. (Bill Bengan is a financial advisor who made the 4% rule of thumb famous 25 years ago.) So, this latest information just throws a curveball into everything that has previously been used for the past 25 years, and now you’re left wondering…

Well, I have no idea what is the proper amount I need to save for retirement.

Do you know what the amount that you need to save for retirement is?

So, let’s dig in for a little bit and we’re gonna talk about the three different percentages that are talked about the most. It’s the 3% rule, the 4% rule, and the 5% rule is one better than another. We’ll debate that and shortly.

How does Withdrawal Rate work?

But first of all, you have to realize that not everything works the way you want, so let’s show some examples before we dig into the specifics of the different rules.

Basically, the whole concept is if you save $1 million and you start withdrawing either 3%, 4%, or 5%. That withdrawal amount is the amount of income that you would live on each and every year, while the rest of your portfolio is continuing to grow and increase in value.

The ultimate, perfect-scenario goal is that you would withdraw as much as you possibly could without depleting the portfolio.

Withdrawal Rate Example:

Here are the assumptions:

Plan to spend $50,000 a year
7% rate of return on your money
Age doesn’t matter and not accounting for taxes or inflation (we want to keep this simple)

The amount you would need to save based on each of the withdrawal rates:

3 percent rule, you would need: $1,666,667
4 percent rule, you would need: $1,250,000
5 percent rule, you would need: $1,000,000

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

The Withdrawal Rate Confusion

In our example, we used simple calculations that don’t account for age, taxes, or inflation and the amount you need to save for retirement is $666,667 different.

The numbers are too much for the average person to understand and have faith in.

This is why the confusion on how much to save for retirement and what model and which retirement calculator is the best.

Shortly, we are going to give you the simple answer of how much to save for retirement. But, first, a little background on the various percent rules for retirement.

3 Percent Rule

The 3% rule has gotten very popular with the FIRE movement.

The FIRE movement is Financial Independence Retire Early.

Because most of these people aren’t looking at retiring in the normal typical retirement age of 60s, they’re looking to retire in their 30s or 40s. They feel like they need to be super conservative because they are trying to estimate how much they need each month to live off their money for possibly the next 50 years.

That’s a lot of variables that you have to take into account.

The good news is you can always learn and figure out ways to make money in retirement so it’s not a complete waste, you can always go back to work because you are younger, and have youth on your side. So, is 3% a safe withdrawal rate?

The golden advice is you want to plan for the worst but hope for the best. The goal is that 3% would cover all of your necessities and basic expenses.

4 Percent Rule

Is the 4 percent rule viable?

The 4 percent rule of retirement was made famous by Bill Bengen 25 years ago (and just recently he said that number is outdated.)

The assumptions were if you withdraw 4% of your investment account every year, you will still have enough to live on throughout retirement.

This was based on what has happened in the markets, accounted for inflation, and the age you want to retire. He conducted many possible case scenarios and concluded that by only withdrawing 4 percent will make sure your money lasts. That is why it has been what is called a golden rule for retirement.

How long will my money last using the 4% rule? If you do all the calculations, it should last for at least 30 years. Obviously, you are looking at many variables of the stock market doing well and your living expenses staying low. Once again, the other big factor is what inflation will do in the future.

So, is the 4% rule that much better?

5 Percent Rule

And then, October 2020 rolls in. The breaking news is that Bill Bengen announced the 4 percent rule for retirement is too conservative and now you can actually use 5%.

So, that leaves the average person going… Okay. My head is spinning. I’m not sure how much I need to save for retirement. What is a good number?

Can I safely withdraw 5% of my investment accounts and still have enough money? That means I need less money to retire.

This is where people quit investing and saving for retirement becomes too hard.

Real truth from real people

Can you Overcome Why Most People don’t save for Retirement?

There are too many variables, there are too many unknowns, and they don’t understand how it all works.

That is the real reason people don’t save for retirement.

I get it. I’m there with you. I feel it. I hear it from readers. But, we are going to break down some of the key items so that way you know how much you need for retirement.

And just remember, even if you messed up your numbers, the market went down, or you want to spend more in retirement than you are, then you could always go back to work. Even better, learn how to make money online for beginners, pick up a side hustle, make a little bit of extra money, and actually do something that you truly enjoy doing.

Learn how much money should I have saved by 30.

How Much do I need to Retire?

The simple answer… aim for $1,000,000 in investment accounts.

You may be able to aim lower depending on some variables which we cover shortly.

Investment accounts can include any of the following:

401K
Roth IRA
IRA
HSA (health saving account)
Brokerage Accounts
High-interest bank accounts
Real estate

You want accounts with liquidity. Things that can be bought and sold for cash. Those are the assets we are counting on how much to retire with.

Don’t use equity in your house because you need a place to live. If you want to use equity, that is fine, but your calculations just become slightly more difficult. We want simplicity.

Right now, your money goal is to reach $1,000,000 in investment accounts. Specifically in liquid net worth.

(Of course, this number may be lower if you live in a low cost of living area, plan to move with overall lower costs or another country, or have good options with lower health care costs. There have been plenty of people who retired with less and love life.)

Based on these variables, you may just need $500,000 to retire. Or somewhere in that range.

Realistic Retirement Savings for Motivation

We shared what a realistic retirement savings amount of $1 million dollars is. Is your first reaction – yikes, there is absolutely no way I can reach that amount.

However, you can!

Just break it down into smaller chunks.

For instance, make your next goal to save $100,000. You do that 10 times and you hit that realistic retirement savings amount.

If that seems like a stretch, then break it down even further. To stay motivated you can strive to save $50K or even $20K.

Break it into bite-sized manageable pieces to help you save for retirement and stay on track.

Learn what happens if you don’t save for retirement.

Best Ways to Save for Retirement

This is the basics to start saving for retirement.

You already know much should you really save for retirement. Now, you just to need to do it.

Here is the safest way to save for retirement. First, open up one or all of these accounts (pending where you are on your money journey). Then, look at investing in S&P 500 Index funds. The most highly recommended index fund for beginners is VTSAX.

1. Contribute to 401K

This is the simplest way to start saving.

Make sure you are contributing at least the minimum to your employer’s 401K.

Every year you can contribute up to a maximum amount. In 2023, an employee can contribute $22,500 to their 401k (the employer is eligible to contribute as well for a combined amount not to exceed $66,000 or 100% of your compensation, whichever is less). For the latest contribution limits, check out the IRS site.

Each year, increase your percentage by 1%. A simple way to reach maxing out your 401K.

Pro Tip: Check if your employer offers a ROTH IRA option. These are becoming more and more popular with companies. A Roth 401K will let your money grow tax-free because you pay taxes when you contribute money. If they don’t offer one, pester the human resources department.

2. Open Roth IRA

The next best option is the ROTH IRA. You want to contribute to a Roth IRA because you pay taxes upfront rather than at withdrawal like a traditional IRA.

Since ROTH IRAs have tax advantages, there are also contribution limits set by the IRS. The contribution amounts have remained the same for a couple of years now. The annual contribution limit is $6,000 per year, or $7,000 if you’re age 50 or older.

The downside to Roth IRAs… the amount you can contribute may be limited based on your income and filing status. However, for the average American, you should be able to max out the amount you can save each year.

Learn if can you have multiple Roth IRAs as it may be a smart financial move.

Pro Tip: Even if one spouse is a stay-at-home parent, you can still contribute to a Roth IRA for the non-working spouse.

3. Health Savings Account

Say what? Yes, a health savings account is on the list as a way to save for retirement. It is a great way to grow your money tax-free going in and on withdrawals.

You must have a High Deductible Health Insurance Plan to open a health savings account.

This is something you want to do and contribute the maximum amount each year. For 2023, you can contribute $3,850 for individuals and $7,750 for family coverage. Typically, the limits go up $50 each year, which helps you save more every year.

Pro Tip: This account will stay with you even when you leave your current employer and insurance. Plus you can use the HSA funds forever – even to pay Medicaid premiums. (Hopefully, nothing changes on these tax-advantaged accounts).

4. Traditional Brokerage Account

The last avenue has no tax benefits, but you are still saving money to be used later. That is what really matters.

Since there are no tax advantages to these basic brokerage amounts, there also are no limits on how much you can contribute.

This is where you would save the remaining money after you exhausted all the other methods listed above.

Side Note…

Yes, there are other ways to save for retirement. For this post and the average investor, the above-mentioned accounts are a great place to start. Once you become savvier and want to invest more money, then you can look at back door IRAs, 529s, or whole life insurance.

Saved $1 million for retirement, Now What?

Once you reach that 1 million dollars retirement mark, congratulations!!

That is a huge milestone that many people never reach. So, what is the next step?

Now, that you are closer to finally being able to live off your investments, you must start to look at the retirement calculators more seriously and factor in all of those variables (age, taxes, and inflation). It is much easier to predict the future once you have built a solid nest age and are closer to living off your investments.

Everyone started the financial independence journey at a different age and will reach their million-dollar mark at different times.

For the average person, you know learned how to save for retirement. You know what you need to do and where to start.

In this post, we took out all of the confusion on how much to save for retirement. Don’t worry about is the 4 percent rule is viable – or if it should be the 3 percent rule or the new 5% rule. The assumptions and variables will hold you back from starting. You know the dollar amount to start with, move on with that.

This simple advice for hitting your first milestone is the motivation to keep you going. Along the way, you will become savvier with finances and investing.

When it is time to move to the question of “can I retire” at such and such age, you have already taken out many of the variables, and the decision becomes more and more clear.

Take steps to reach that $1000000 mark today.

Get ahead now…

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

July 4, 2024 by Brett Tams

Spot Bitcoin ETPs are a type of investment vehicle that seeks to track the spot price of Bitcoin. ETPs, or exchange-traded products, are a broader basket of investments that include both exchange-traded funds (ETFs) and exchange-traded notes (ETNs), and are listed on an exchange, and can be purchased or sold much like a stock.

But what’s critical to know is that generally, ETFs are regulated by the Investment Company Act of 1940 (the “1940 Act”). While the most common type of ETPs are structured as ETFs, not all are, and spot Bitcoin ETPs are a specific type of ETP that are not registered under the 1940 Act. As such, these ETPs are not subjected to the 1940 Act’s rules, and investors holding shares of Bitcoin ETPs may not or do not have the same protections as those that are regulated by the 1940 Act, which may mean these investments have relatively higher associated risks.

What Is a Bitcoin ETP?

As noted, Bitcoin ETPs are a type of exchange-traded fund or product that allow investors to gain exposure to Bitcoin without directly owning it. These seek to track the price of Bitcoin. That means when the price of Bitcoin in U.S. dollars goes up, a spot Bitcoin ETP, trading on the stock exchange should also see its share values go up, and vice versa.

But it’s critical to note that Bitcoin ETPs have a much narrower focus than most other exchange-traded funds, which started out with the aim of giving investors broad exposure to the stock market. But, like all investments, they have various risks associated with them. In fact, it’s possible that an investor could lose the entirety of their investment.

An Introduction to Bitcoin ETPs

Bitcoin ETPs are exchange-traded products that, effectively, allow investors to gain exposure to the crypto markets as easily as they would buy or sell a stock, as discussed. Again, a Bitcoin ETP seeks to track the price or value of Bitcoin, and so the value of a Bitcoin ETP share is designed to rise or fall in relation to the change in value of the underlying cryptocurrency.

It also means that investors don’t necessarily need to directly own Bitcoin to gain exposure to the market in their portfolio — they can invest in a security, the ETP, that seeks to track it, instead. Note, too, that all ETPs have related fees and expenses, which vary.

Get up to $1,000 in stock when you fund a new Active Invest account.*

Access stock trading, options, auto investing, IRAs, and more. Get started in just a few minutes.

What Are Spot Bitcoin ETPs?

Spot Bitcoin ETPs are investment vehicles that trade at “spot” value. “Spot” value, in this case, refers to the price of the underlying asset at any given time. So, if a buyer and seller come together to make a trade, they would do so at the spot price. There are spot markets for all sorts of commodities.

Where Can Investors Buy Spot Bitcoin ETP Shares?

Investors can buy spot Bitcoin ETP shares via numerous exchanges and platforms. While previously, investors interested in Bitcoin or other cryptocurrencies would need to trade on platforms that supported cryptocurrencies, since Bitcoin ETPs are exchange-traded vehicles, investors are likely to find them available on many other platforms — that includes SoFi, which allows investors to buy spot Bitcoin ETP shares as well.

Are There Other Spot Crypto ETPs?

Spot Bitcoin ETPs seek to track the price of a fund’s Bitcoin holdings, and other spot crypto ETPs, if and when they are approved and hit exchanges, will do the same.

Spot Bitcoin ETPs were first approved for trading by regulators in early 2024. There are ETPs that seek to track Bitcoin-exposed or Bitcoin-adjacent companies, too, as well as Bitcoin futures. Spot Ethereum ETPs could be similar vehicles to to spot Bitcoin ETPs, in that they would seek to track the price of Ethereum, and allow investors to gain exposure to Ethereum in their portfolios without owning it directly.

What Are Bitcoin Futures ETPs?

Bitcoin futures ETPs are another type of ETP that give investors exposure to the price movements of Bitcoin via futures contracts. Futures are a type of contract that dictates the terms of a trade at a future date, and typically have underlying assets such as precious metals or other commodities — including crypto.

Accordingly, Bitcoin futures ETPs are crypto futures ETPs that specifically seek to track Bitcoin futures contracts. Regulators approved Bitcoin futures contracts in 2021, but again, investors should know that they don’t seek to track the price or value of the underlying asset exactly — which differentiates them from spot Bitcoin ETPs.

💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Are There US-listed Spot Bitcoin ETPs?

There are U.S.-listed spot Bitcoin ETPs. When the Securities and Exchange Commission (SEC) first granted their approval in January 2024, it opened the door to several Bitcoin ETPs hitting the market. As a result, investors were able to start buying and selling them via the stock market.

The SEC’s approval led to new spot Bitcoin ETPs being listed on a few different exchanges. Here’s a list of the first 11 spot Bitcoin ETPs that gained approval from the SEC:

• Grayscale Bitcoin Trust (GBTC)

• Bitwise Bitcoin ETF (BITB)

• Hashdex Bitcoin ETF (DEFI)

• ARK 21Shares Bitcoin ETF (ARKB)

• Invesco Galaxy Bitcoin ETF (BTCO)

• VanEck Bitcoin Trust (HODL)

• WisdomTree Bitcoin Fund (BTCW)

• Fidelity Wise Origin Bitcoin Fund (FBTC)

• Franklin Bitcoin ETF (EZBC)

• iShares Bitcoin Trust (IBIT)

• Valkyrie Bitcoin Fund (BRRR)

Note, too, that it’s anticipated that additional spot cryptocurrency ETPs will become available.

How Are Bitcoin ETPs Regulated?

Bitcoin ETPs are regulated by the SEC, which sets out guidance in terms of legality. Regulation in the crypto space is and has been murky — it’s been largely unregulated for the entirety of the crypto space’s existence. But the advent of crypto ETPs is likely to change that to some degree, as spot Bitcoin ETPs’ underlying asset is and can be Bitcoin itself, rather than Bitcoin derivatives.

Remember, too, that Bitcoin ETPs are not regulated under the Investment Company Act of 1940, as discussed. That differentiates them from most ETFs on the market.

That’s another important distinction investors should note: Spot and futures Bitcoin ETPs may be regulated under slightly different terms, as futures are derivatives. Investors should pay attention to the space and to any SEC guidance released regarding crypto regulation, as it may impact the value of their holdings in crypto ETPs, too.

Pros & Cons of Bitcoin ETPs

Like all investments, there are pros and cons of ETFs and ETPs — including Bitcoin ETPs.

Benefits of Bitcoin ETPs

Proponents of Bitcoin ETPs appreciate that they can give investors exposure to the complicated and volatile cryptocurrency market, without the need to personally hold actual crypto.

Convenience and Ease

Buying a spot Bitcoin ETP requires little tech know-how beyond knowing how to use a computer, open a brokerage account, and place a buy order.

ETPs provide a way for investors to indirectly add exposure to certain assets — like Bitcoin, in this case — to their portfolio. That may result in a return on investment, or a possible loss of principal. On the other hand, holding actual Bitcoin may require a somewhat advanced level of technical expertise.

Secure Storage Options

Some cryptocurrency exchanges might be trustworthy, but some users have also had a controversial history of being hacked, stolen from, or defrauded. Even reliable exchanges open investors up to risk.

Securely storing cryptocurrencies — for example, storing the private keys to a Bitcoin wallet — is most often done by using either a paper wallet that has the keys written in the form of a QR code and a long string of random characters, or by using an external piece of hardware called a hardware wallet.

Risks of Bitcoin ETPs

First and foremost, investors should be aware that it’s possible that they could lose the entirety of their investment when investing in Bitcoin ETPs. There are, of course, other risks to consider as well, including volatility, costs, and the unpredictable and still largely-unregulated nature of the crypto market.

Volatility

The volatility comes from the occasional wild swings experienced in the price of Bitcoin and Bitcoin futures against most other currencies. This could scare investors that have a lower risk tolerance, enticing them to panic and sell.

Fees

One of the risks that comes from holding an ETP of any kind involves its expense ratio. This number refers to the amount of money a fund’s management charges in exchange for providing the opportunity for investors to invest in their fund.

If a fund comes with an expense ratio of 2%, for example, the fund management would take $2 out of a $100 investment each year. This figure is usually calculated after profits have been factored in, cutting into investors’ gains. In other words, some Bitcoin ETPs could be relatively expensive for investors to hold, but it’ll depend on the specific fund.

There can be other various types of fees that may apply to an investment in ETPs as well. While the specific fees will vary from ETP to ETP, investors will likely encounter one or a combination of commissions, account maintenance fees, exchange fees, and wrap fees (a type of management fee). Again, investors will want to look at an ETP’s prospectus or related documents to get a better sense of the costs associated with a specific ETP.

Fraud and Market Manipulation

Regulators have cited fraud and market manipulation as reasons for why they were cautious about approving a spot market Bitcoin ETP. It’s unclear how the SEC’s approval of spot Bitcoin ETPs may affect fraud and market manipulation in the crypto space, but it’s something investors should be aware of.

The Takeaway

Spot Bitcoin ETPs were approved for trading by the SEC in early 2024, and as a result, it’s likely that many more crypto ETPs will also hit markets and exchanges in the future — though nothing is guaranteed. Investors may use them to gain exposure to the crypto markets. For investors curious about the cryptocurrency market but not yet ready to invest in crypto itself, a Bitcoin ETP may represent another option. It may be best to speak with a financial professional before investing, too.

If you’re ready to bring crypto into your portfolio, you can invest in a Bitcoin ETP with SoFi. Along with many other types of investments, SoFi’s platform offers investors access to the crypto space through spot Bitcoin ETPs.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What are the options for Bitcoin ETPs?

There are Bitcoin futures ETPs and spot Bitcoin ETPs listed in the U.S., which investors can buy. Given the SEC’s approval of Bitcoin ETPs for trading in early 2024, there may soon be additional spot crypto ETPs available to investors in the future.

Are there US-listed Bitcoin ETPs?

As of July 2024, there are U.S.-listed spot Bitcoin ETPs after the SEC approved an initial batch of them, and it’s likely there will be more in the subsequent months and years.

Where can Bitcoin ETP shares be purchased?

Crypto ETPs can be purchased and traded on the stock market, alongside other ETPs.

Photo credit: iStock/JuSun

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Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

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Apache is functioning normally

July 4, 2024 by Brett Tams

Set on the rocky southern tip of Aquidneck Island off Rhode Island, the summer resort town of Newport is also known as the last bastion of America’s Gilded Age.

The wealthy seaside town was once the preferred summer destination of the richest families in the United States, with the Vanderbilts, the Morgans, and the Astors all owning larger-than-life “summer cottages” here.

And while they’ve all started selling off (or downright abandoning) their Newport mansions in the early 20th Century, in the wake of the Great Depression, the New England town’s cliffs are still lined with ostentatious, marble-clad residences that tell the story of a time long gone.

Chief among them is the property at 596 Bellevue Avenue — best known as the Marble House — a neoclassical mansion built as a birthday present for Alva Vanderbilt back in 1888.

Second only to the Vanderbilts’ iconic The Breakers residence, the Marble House was the one to kickstart Newport’s transformation from a quiet summer colony of wooden houses to the legendary resort of opulent Gilded Age mansions. And since it carries such a long-lasting legacy, today we thought we’d take a closer look at the Newport mansion that started it all.

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It was built between 1888 and 1892 as a birthday present

Photo credit: Jeff Schultes | Dreamstime

William Kissam Vanderbilt, the grandson of Commodore Cornelius Vanderbilt, built Marble House as a 39th birthday present for his wife, Alva. Meant to serve as the couple’s summer “cottage”, the sprawling Newport mansion was built between 1888 and 1892.

Marble House was among the first Gilded Age mansions in Newport

Photo credit: Jiawangkun | Dreamstime

Predating most of the other palatial residences that line Newport’s wealthy streets, Vanderbilt’s Marble House is credited with sparking the town’s transformation from a relatively relaxed summer colony of wooden houses to its current image as a resort of opulent stone palaces.

Building costs were the equivalent of over $370M in today’s money

The Marble House in 1895. Photo credit: Frank H. Child, photographer / Public Domain / Wikimedia Commons

596 Bellevue Avenue was quite a feat of construction, with Vanderbilt having to invest a fortune to build his summer “cottage”. The cost of the house was reported in contemporary press accounts to be $11 million, which amounted to about $373 million in 2023.

It required 500,000 cubic feet of marble

Photo credit: Faina Gurevich | Dreamstime

A big chunk of change was spent on securing the marble needed for the construction. In total, Vanderbilt spent $7 million to acquire 500,000 cubic feet of marble (the equivalent of 14,000 square meters).

A prime example of Beaux-Arts architecture

Photo credit: Demerzel21 | Dreamstime

But the investment paid off, as the stately structure became one of the earliest examples of Beaux-Arts architecture in the United States. It’s also one of the most recognizable.

Drawing inspiration from le Petit Trianon at the Palace of Versailles, the Marble House was designed by architect Richard Morris Hunt — the same one who worked on the Statue of Liberty, and built the most famous Vanderbilt mansions like The Breakers, and the Biltmore, among others.

It may not look it, but the mansion has four levels

Photo credit: Jiawangkun | Dreamstime.com

While seeing it from outside might make you think it only has two floors, the Marble House actually has four levels, with the kitchen and other service areas located in the basement, and a third floor concealing the servant quarters.

And a whopping total of 50 rooms

Photo credit: Yingna Cai / Shutterstock

Visitors who pass through the stately mansion’s grand entry doors are led into a world of opulence and grandeur that’s unlike anything we might see today (outside of museums, that is).

With walls, floors, and staircases draped in marble, intricate murals, gilt bronze detailing throughout, and lavishly decorated interiors that bear the signature of Jules Allard & Sons — one of the most notable interior decorating houses of the turn of the twentieth century — each room is a display of incomparable wealth.

Standout rooms include a Grand Salon that doubled as a Ballroom, and a Stair Hall

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While I might not have time to go over all 50 rooms inside this palatial abode, I’ve picked a few standout rooms to highlight that you simply can’t find in other houses.

This includes a two-story Stair Hall that features a grand staircase of yellow Siena marble — modeled after the palace at Versailles with a wrought iron and gilt bronze staircase railing and featuring an 18th-century Venetian ceiling painting — and the imposing Allard and Sons-designed Grand Room, which served as both ballroom and reception room.

A Gothic Room with a stone fireplace

Photo credit: By Renata3 / CC BY-SA 4.0 / Wikimedia Commons

Another unique space is the Gothic Revival-style room where Alva Vanderbilt once displayed her Medieval and Renaissance collection, featuring a stone fireplace that’s a replica of the one in Palais Jacques Coeur in Bourges, France.

The dining room draped in pink marble

Photo credit: xiquinhosilva / CC BY 2.0 / Wikimedia Commons

The rich, pink Numidian Marble dining room is dripping in gilt bronze ornamentation on the moldings, fireplace, and ceiling.

See also: Winfield Hall, the Historic Woolworth Mansion in Glen Cove

Mrs. Vanderbilt’s former bedroom has a circular painting of Athena

Photo credit: By Renata3 / CC BY-SA 4.0 / Wikimedia Commons

Set on the second floor, Alva Vanderbilt’s former bedroom is one of the most visited rooms in the house, drawing tourists with its lavish Louis XIV-style interiors (also known as French classicism) and its circular ceiling painting of Athena, painted by Giovanni Antonio Pellegrini circa 1721.

Alva retained ownership in the divorce

Photo credit: lilyputin lilyputins / Public domain / Wikimedia Commons

After Alva divorced William Kissam Vanderbilt in 1895, she retained ownership of the Marble House, which was gifted to her on her 39th birthday. She soon remarried another wealthy socialite/politician by the name of Oliver Hazard Perry Belmont, who owned another Richard Morris Hunt-designed residence down the street from the Marble House, called Belcourt.

After her new husband passed away, she opened the Marble House to suffragettes

Woman suffrage gathering at the Newport Marble House of Alva Belmont on September 12, 1909. Photo credit: New York Times / Public domain

During her second marriage, Alva only used 596 Bellevue Ave as an extension of her closet, with the house being mostly maintained by servants. But that all changed once the former socialite’s new husband passed away in 1908.

After Oliver Belmont died of appendicitis at the tender age of 49, Alva turned her attention to a cause worthy of her status and influence and joined the Women’s suffrage movement.

She added a Chinese Tea House

Photo credit: Lei Xu | Dreamstime.com

Alva Belmont reopened the Marble House in 1909, and added the Chinese Tea House on the seaside cliff. The Tea House, modeled after 12th-century Song dynasty temples, became a gathering place where she hosted rallies for women’s suffrage.

Sold to the Prince family

Photo credit: Felix Lipov / Shutterstock.com

A decade later, Alva decided to completely close the Marble House and move to France to be closer to her daughter, Consuelo Balsan. By 1932, she sold the Newport mansion to American stockbroker, investment banker, and financier Frederick H. Prince, whose family used it as a summer house for the next 30 years.

Added to the National Register of Historic Places in 1971

Photo credit: Felix Lipov / Shutterstock.com

After three decades of ownership, in which the Prince family used the stately residence for its intended purposes, hosting balls and events attended by New York’s elite, the Marble House was acquired by the Preservation Society of Newport County in 1963.

Eight years later, it was added to the National Register of Historic Places and designated as a National Historic Landmark on February 17, 2006.

It’s now a popular tourist destination

Photo credit: Darryl Brooks | Dreamstime.com

Nowadays, the former Vanderbilt summer “cottage” is one of Newport, Rhode Island’s top tourist destinations, with visitors from all over the world flocking here to see how the Vanderbilts once lived. It offers guided and non-guided tours, with events, parties, and even weddings held on the grounds of the estate.

Marble House in the movies

Photo credit: Dan Hanscom / Shutterstock.com

The mansion is also quite a popular filming location, with productions like 1974’s The Great Gatsby (starring Robert Redford and Mia Farrow), the 1995 miniseries The Buccaneers, Steven Spielberg’s celebrated 1997 film Amistad, and the 2008 rom-com 27 Dresses all being filmed at the Marble House in Newport.

A living memory of what Newport, Rhode Island once was

Photo credit: Jiawangkun | Dreamstime.com

“The rich, famous and fashionable came to Newport to see and be seen, acting out their social pageant against the backdrop of great Bellevue Avenue houses,” reads the plaque outside Marble House. Fittingly, the palatial residence’s imposing structure and lavish interiors live on as reminders of what the Gilded Age elite wanted people to see: unabridged wealth.

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Source: fancypantshomes.com