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Apache is functioning normally

May 20, 2023 by Brett Tams

Massachusetts is a beautiful state, filled with culture and history. It’s also a populous state that’s home to a wide range of businesses, including many in the biotechnology and engineering fields.

If you live in Massachusetts, you’ll need to find a bank that fits your lifestyle and savings needs. Fortunately, Massachusetts has no shortage of local banks, regional banks, national banks, and credit unions. The many options can make it hard to narrow down the best banks in Massachusetts for you. Below are some of the best banks in Massachusetts.

10 Best Banks in Massachusetts

From small local banks to national banks with locations in Massachusetts, here are some of the best banks in Massachusetts to help you find the right fit.

1. Citizens Bank

Citizens Bank is a regional bank with branches in Massachusetts, as well as Connecticut, Delaware, Florida, Maryland, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, DC. Fee-free ATM access is only available at Citizens Bank ATMs, but out-of-network fees are only $2 per transaction.

Fees:

$9.99 monthly service fees (waived with one deposit per month)
$35 overdraft fee

Balance requirements:

No minimum deposit to open
No minimum daily balance required

ATMs:

Fee-free at more than 3,200 locations in 11 states
$3 fee for each out-of-network ATM transaction

Interest on balance:

Up to 0.07% APY on savings accounts
Up to 2.75% APY on CDs
Up to 2.75% APY on money market accounts

Additional perks:

Credit cards offer $150 bonus and cash back
Discounts on mortgages and home equity loans

2. Rockland Trust Bank

Rockland Trust Bank is a local bank headquartered in Rockland. Branches and ATMs are located throughout Massachusetts. If you’re looking for a local bank, Rockland Trust Company is one of the best banks in Massachusetts. They not only offer great customer service, but they also have fee-free checking accounts and all the latest mobile banking features.

Fees:

No monthly fees
$35 overdraft fee

Balance requirements:

$25 deposit to open
No minimum daily balance required

ATMs:

Fee-free at Rockland Trust Bank ATMs
$2 fee for each out-of-network ATM transaction

Interest on balance:

Up to 0.01% APY on savings accounts
Up to 0.05% APY on CDs
Up to 0.10% APY on money market accounts

Additional perks:

Smart ATMs offer enhanced features
YourBanker provides customer support within the app

3. Chime

While there are no branches in Massachusetts, Chime could give you everything you need. Chime is one of several online banks offering Massachusetts residents free checking accounts, a high-yield savings account, and fee-free access to cash at more than 60,000 ATMs¹ nationwide.

Fees:

No monthly service fees
No overdraft fees5

Balance requirements:

No minimum deposit to open
No minimum balance required

ATMs:

Fee-free at 60,000+ ATMs nationwide
$2.50 out-of-network ATM fee

Interest on balance:

2.00% APY³ on savings accounts

Additional perks:

Early direct deposit access²
SpotMe provides $200 overdraft protection

4. Salem Five Bank

Another local bank that’s one of the best banks in Massachusetts is Salem Five, a Salem-based bank with a heavy concentration in the Boston area. Salem Five only has one checking account, a fee-free option that offers $.05 cash back on debit card purchases. You’ll get nationwide cash access while traveling, thanks to a partnership with the AllPoint network.

Fees:

No monthly service fees
$35 overdraft fee

Balance requirements:

$10 minimum deposit to open
No minimum balance requirements

ATMs:

Fee-free at Salem Five ATMs
Fee-free at 55,000+ AllPoint ATMs nationwide
$2 out-of-network ATM transaction fee

Interest on balance:

Up to 0.01% APY on savings accounts
Up to 4.41% APY on CDs

Additional perks:

$0.05 cash back on debit card purchases
Solid small business banking options

5. Greylock Federal Credit Union

If you’d prefer a community bank, check to see if you qualify for membership at Greylock Federal. You’ll get a free checking account and competitive interest rates on personal banking options like loans. Greylock has 14 locations in Berkshire County, Massachusetts, and Hudson, New York, as well as a co-op partnership that offers ATM access nationwide.

Fees:

No monthly fees
$15 overdraft fee

Balance requirements:

$15 minimum deposit to open
No minimum balance requirements

ATMs:

Fee-free at Greylock Federal Credit Union ATMs
Fee-free at co-op ATMs nationwide
$3.25 out-of-network ATM transaction fee

Interest on balance:

Up to 0.20% APY on savings accounts
Up to 3.05% APY on Share CDs

Additional perks:

Competitive rates on auto loans
Video teller services available

6. GO2bank

Another option for those who don’t mind doing all their banking online is GO2bank. GO2bank is one of the best banks for those who use a lot of cash. You’ll get fee-free access to AllPoint ATMs nationwide, as well as cash deposits at 90,000+ retailers. There’s also a free checking account, as well as a savings account that earns 4.50% APY.

Fees:

No monthly maintenance fees
$15 overdraft fee

Balance requirements:

No minimum daily balance
No minimum deposit to open

ATMs:

Fee-free at AllPoint ATMs nationwide
$3 for each out-of-network ATM transaction

Interest on balance:

4.50% APY on savings

Additional perks:

Deposit cash at 90,000 retailers nationwide
7% instant cash back on gift card purchases

7. Eastern Bank

Eastern Bank is one of the best banks in Massachusetts if you’re looking for a bank with a deep history in the area. Based in Boston, Eastern Bank has been around since 1818 and has evolved over the years.

If you’re in the market for a new checking account, you can currently earn a bonus of up to $600 for opening a new account. The bonuses are balanced based, so a balance of less than $4,000 will earn you only $200.

Fees:

No monthly maintenance fees
$35 overdraft fee

Balance requirements:

$25 minimum deposit to open
No minimum daily balance

ATMs:

Fee-free at Eastern Bank ATMs
Fee-free at thousands of SUM Program ATMs nationwide
$2 out-of-network ATM fee

Interest on balance:

0.01% APY on savings accounts
Up to 4.50% on CDs
Up to 3.50% APY on money market accounts

Additional perks:

Up to $600 bonus for new accounts
Up to $50 in overdraft protection

8. Middlesex Savings Bank

Middlesex Savings Bank is the largest mutual bank in Massachusetts. Branches and ATMs are largely centered in the Boston area, but checking account holders get fee-free ATM use at AllPoint ATMs nationwide. If you have direct deposit or are under the age of 26, you’ll also qualify for up to five ATM fee reimbursements per statement cycle.

Fees:

No monthly maintenance fees
$35 overdraft fee

Balance requirements:

$1 minimum deposit to open
No minimum daily balance

ATMs:

Fee-free at Middlesex savings bank ATMs
Fee-free at AllPoint ATMs nationwide
Up to five out-of-network ATM fee reimbursements per year
$2 out-of-network ATM fee

Interest on balance:

Up to 1.45% APY on savings
Up to 1.55% on CDs
Up to 4.50% APY on money market accounts

Additional perks:

Competitive rates on mortgages and personal loans
Earn $50 for each new qualifying referral

9. Mass Bay Credit Union

With branches in South Boston, Everett, Quincy, and the Seaport District, Mass Bay is like many credit unions in that it offers competitive rates on deposit accounts and loans. You’ll have live access to customer service at Mass Bay branches in Massachusetts, as well as through three Interactive Teller Machines in the area. You’ll need to live or work in Boston or the surrounding areas to qualify for an account.

Fees:

No monthly maintenance fees
$25 overdraft fee

Balance requirements:

No minimum daily balance
$5 minimum opening deposit

ATMs:

Fee-free at Mass Bay CU ATMs
Fee-free at AllPoint ATMs nationwide
Six free out-of-network withdrawals per month ($1 per transaction after that)

Interest on balance:

Up to 0.10% APY on savings (share accounts)
Up to 3.35% on CDs
Up to 0.80% APY on money markets

Additional perks:

Free financial counseling for members
Free interest-bearing checking account for balances of $400 or more

10. Bank of America

Although it’s not a community bank, there are benefits to national banks like Bank of America, including access to branches and ATMs nationwide. One downside to Bank of America is that each checking account comes with monthly maintenance fees. But you can waive those by having direct deposit, maintaining a $1,500 daily balance, or enrolling in the Bank of America Preferred Rewards program.

In addition to physical locations and ATMs, Bank of America also has a robust selection of mobile banking features that keep banking convenient.

Fees:

$12 monthly fee (waived with requirements)
$10 overdraft fee

Balance requirements:

No minimum daily balance ($1,500 to waive maintenance fees)
$100 minimum opening deposit

ATMs:

Fee-free at 16,000 Bank of America ATMs nationwide
$5 for each out-of-network ATM transaction

Interest on balance:

Up to 0.04% APY on savings
Up to 4.50% on CDs

Additional perks:

$200 bonus for new credit card signups
Mobile banking offers enhanced security features

What kind of account is right for you?

Financial institutions come in a variety of forms, and the one that’s best for you depends on your needs. Do you need wealth management services, or is avoiding ATM fees while traveling a bigger priority? It’s important to first make sure a bank is insured by the Federal Deposit Insurance Corporation, but from there, it’s all about looking for the best bank to help with your financial life.

Advantages and Disadvantages of Local Banks

They might not have all the amenities of the biggest banks, but local banks do have their advantages. You’ll often get many of the basic features of an online bank through the mobile banking app, including easily transferring money and depositing checks. The best local bank is involved in the community and offers small business banking and loan options that are above and beyond what national banks offer.

But even the best local bank can fall short in some areas. Not all local banks are insured by the Federal Deposit Insurance Corporation, so it’s important to check for that. Local banks may also offer limited banking services and less competitive rates on savings and retirement accounts than other banks.

Advantages and Disadvantages of Online Banks

Online banks are an option, regardless of where you live. Today’s online accounts typically offer all the amenities you need, including the ability to transfer money and deposit checks.

If you regularly deal with cash, though, an online bank might not be as good a deal as you’d get with other types of bank accounts. Some online banks have ATM network partnerships that let you withdraw and deposit cash nationwide.

For those who don’t usually need cash, though, it might be worth looking into what the bank charges for out-of-network ATM fees. Keep in mind that the other bank will assess a fee in addition to the one your bank charges.

Advantages and Disadvantages of National Banks

No matter where you live in Massachusetts, national banks probably have branches nearby. Bank of America, for instance, has branches throughout Massachusetts. The best thing about national banks is that you can always find a branch and ATM, even if you leave home.

But there’s another benefit to going big. With a corporate bank, you often have a broader range of features. There may be multiple deposit accounts, including a free checking account, an interest-bearing account, and savings account options that will help with retirement planning. Many large banks also offer investment accounts and advisors to help you manage your money.

There is a disadvantage to going national, though. Unlike other banks in your area, you might find it tough to get customer service when you need help with your checking account, savings account, or wealth management. Yes, you can visit a local branch, but if the representatives are busy, you might have a long wait.

Advantages and Disadvantages of Regional Banks

Regional banks can combine the best of both extremes. For one, you’ll probably find branches and ATMs when you leave the state to go to nearby areas like Rhode Island or New York. A regional bank may also offer unlimited ATM reimbursements or have partnerships with networks that give you fee-free cash access nationwide.

Being in between can work against a regional bank, though. You might find that interest rates aren’t as competitive as online accounts that are trying to win business. A regional bank may only offer one checking account, compared to the multiple options you get with corporate banks. But you may also not get the same personalized service as you’d get with going local.

Frequently Asked Questions

How can someone determine whether a bank is the right fit for them?

What’s right for someone else might not be the best option for you. While shopping for banks, keep in mind the features you’ll use most often, as well as how important it is to bank locally. If you need that in-person contact that you can only get at a local bank, an online bank likely won’t work for you. If competitive rates and an easy-to-use mobile app are more valuable, you can kick off your search with that in mind.

What should someone look for in an online bank?

Online banks give you everything you need to manage your account through an app. You’ll likely also be able to access your online bank through the website. If you need to deposit a check, transfer money, or pay bills, you can do it. But where online banks fall short is when it comes to cash. Make sure you can deposit and withdraw cash when you need it without having to pay dozens of dollars in fees every year.

Which account is best for you?

It’s never been easier to manage your finances. Mobile banking lets you do everything electronically. But the right account is one that helps you set money aside and earn interest on it while also keeping fees to a minimum. You’ll also want a bank that gives you the type of customer support you prefer. Whether that’s 24/7 support by phone or through in-app chat or it’s face-to-face in a bank branch, you can find a bank that offers it.

Massachusetts has banks to fit every preference. You’ll just need to shop around to find the right bank for you. If you already have a bank, make sure you check out the competition occasionally. You may find switching accounts can save you money while also boosting the interest rates you’re earning on your balance.

Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.

1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

2. Early access to direct deposit funds depends on the timing of the submission of the payment ﬁle from the payer. Chime generally make these funds available on the day the payment ﬁle is received, which may be up to 2 days earlier than the scheduled payment date.

3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of November, 17th, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.

5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.

Source: crediful.com

Apache is functioning normally

May 20, 2023 by Brett Tams

Escheat law, or escheatment, is the process of a state taking possession of personal property when it appears to be abandoned or unclaimed. Escheat laws vary by state, but typically it takes about five years before an asset’s ownership is transferred to the government

.

How does escheatment happen?

Property belonging to both the living and the deceased can be vulnerable to escheatment.

When the owner is alive:

The financial institution must make an earnest effort to locate the account owner; property doesn’t get automatically transferred to the state after sitting inactive for too long. If the property owner can’t be contacted, and the time period specified by state laws has passed, financial institutions are required by law to report the assets.
The financial institution reports the unclaimed property to the state. The state will physically transfer the funds and hold the account as a bookkeeping entry.
The original owner can make a claim against the escheatment. Filing rules vary for each state, but you’ll likely have to verify ownership of the account. If the claim is successful, you’ll receive cash equal to the value of the account at the time it was escheated, as opposed to having the original account returned to your name.
If no one claims the property, the state considers the assets in the account to be state-owned property and often sells any securities held in the account.

When the owner is deceased:

They must have died without a will and with no heirs, or have chosen heirs who are legally incompetent. Escheatment can also happen if there’s a single heir and that heir murders the property owner.
Property acquired illegally can be escheated in some cases. When this happens, those funds are earmarked for relevant purposes, including helping victims of violent crimes or contributing to law enforcement budgets.
Assets left to noncitizen heirs may be escheated in very rare cases. This means that the heir of the property is not a citizen of the country where the deceased resides and cannot properly receive the assets.

How escheat works

Escheat during life

An asset can fall into escheat if you don’t request the return of a security deposit on your rent or utilities, or leave a bank account inactive for a long period of time.

Here’s an example:

Lisa attended college out of state and opened a student checking account at a small local bank near her school. After graduation, she moved back to her home state, married, and forgot about the checking account she had used as a student. Years passed, and the checking account was deemed dormant. The small bank tried to contact Lisa but was unable to do so because Lisa had a new married name, lived in a different state and had a new phone number. The funds from Lisa’s old checking account were eventually escheated and went to the state where the bank was located.

Escheat of an estate

For those who have died without a will — called dying intestate — and don’t have any heirs that the estate would normally pass to during probate, the escheatment process allows the state government to take ownership of the estate. This can also happen if no living heirs can be contacted.

Here’s an example:

Adam was an only child who never married or had children. His parents had died many years prior and he had no living aunts, uncles or cousins. Adam planned to leave everything to his favorite charity, but he died before he had a chance to draw up a will. Because he had no will and no obvious heirs at the time of his passing, his entire estate went to the state by escheat.

How to recover property if it’s been escheated

You still have a chance to get back assets that have been escheated. But because you wouldn’t have received a notification about the assets in the first place, you might not have realized any assets are missing.

To find out if you have any unclaimed assets, visit the National Association of Unclaimed Property Administrators website. Each state has its own laws and claims procedures, so be sure to search for your name in every state you’ve lived in, and search under all names you’ve had.
If any unclaimed funds come up in your searches, you can file a claim through the website and provide whatever information your state requires to verify your ownership of the funds. Some states place a time limit on escheatment claims, so you may want to repeat your search every few years to catch any new claims quickly.
If you have questions about getting your unclaimed assets back, you can find contact information for your state’s unclaimed property authority on the NAUPA website, or you can contact an attorney if necessary.

How to avoid escheatment

Create a valid estate plan with a will that clearly designates your chosen heirs, and update it as needed.
Keep a list of all your financial accounts, and actively maintain all accounts. Avoiding a dormant status can be as simple as making a small deposit or withdrawal once every year or two.
Keep a record of security deposits you make to landlords or utilities so you can remember to request a return of those funds when you move.
Keep a record of employer-provided retirement accounts so you don’t forget about them when you change jobs.
If you close an account, be sure to withdraw any remaining funds.
Notify the post office and/or financial institutions you do business with immediately when your name, address, phone number or any other contact information changes.
Cash all dividend checks you receive, no matter how small they are.
Vote by proxy if you receive a request from a company you own stock in. Companies allow stock owners to vote by proxy in shareholder meetings; voting shows active ownership of your assets.
Log in to your accounts online regularly to confirm active ownership of assets.
Respond quickly to any notices of account inactivity you receive.

Source: nerdwallet.com

Apache is functioning normally

May 19, 2023 by Brett Tams

Previously, we took a look at the question, “Should Christians Invest In Stocks?“. What we found is that it is possible to be a good steward of God’s money, and still invest. However, there are still a couple of things that we as believers must be careful of when we choose to invest.

The two most prominent dangers to investing for a Christian are, supporting or profiting from sin, and trusting in our wealth instead of God.

Let’s take a look at the first danger:

The First Danger Of Investing: Profiting From Sin

This is probably the most popular reason given by Christians as to why they refuse to invest in stocks. We don’t like the thought of our money going to support Playboy or some other entity that makes money off of sin!

It’s pretty clear from scripture that there is to be a separation between Christians and the sinful practices of the world:

Do not love the world nor the things in the world If anyone loves the world, the love of the Father is not in him. For all that is in the world, the lust of the flesh and the lust of the eyes and the boastful pride of life, is not from the Father, but is from the world. The world is passing away, and also its lusts; but the one who does the will of God lives forever. ~ 1 John 2:15-17

If we as slaves to Christ must avoid the “lust of the flesh and the lust of the eyes and the boastful pride of life”, then it stands to reason that we should not benefit from companies and organizations that promote these things. It would seem hypocritical to speak out against these things while secretly building our retirement accounts on their success!

It can become so difficult and time-consuming to figure out if a company that you are currently invested in derives any of its profit from ungodly activities. So because of the danger of profiting from sin, many Christians will choose not to invest.

There is something else that we must consider when choosing to invest:

Do not be bound together with unbelievers; for what partnership have righteousness and lawlessness, or what fellowship has light with darkness? ~ 2 Corinthians 6:14

To present a more clear understanding of this command, here is a note on this verse from my study bible:

not be bound together. Lit. “unequally yoked,” an illustration taken from Old Testament prohibitions to Israel regarding the work-related joining together of two different kinds of livestock (Dt 22:10). By this analogy, Paul taught that it is not right to join together in common spiritual enterprise with those who are not of the same nature (unbelievers). It is impossible under such an arrangement for things to be done to God’s glory. with unbelievers. Christians are not to be bound together with non-Christians in any spiritual enterprise or relationship that would be detrimental to the Christian’s testimony within the body of Christ. ~ The MacArthur Study Bible (page 1741, note on 2 Corinthians 6:14)

When you purchase stocks, you are buying a share of the ownership of that particular company. Because of this, investing is commonly looked at as a partnership between the company and its shareholders. Since we are to avoid joining together in partnerships with ungodly people and entities, we have to now be even more careful about the companies in which we choose to invest.

Can We Avoid Profiting From Sin?

On the surface, this seems like an easy question to answer – of course we can avoid it, just investigate each company to see exactly how they make their money! However, this type of investigation can quickly go pretty far. You may want to consider looking at their business partners, suppliers, and even network on which they advertise.

My point is that it can be pretty much impossible to invest in a company that has no connection to sin and worldliness. If that is the case, how can we feel comfortable investing at all? I think we follow two main principles in order to invest in a way that honors God…

Cut Off Any Clearly Ungodly Partnerships

Any company that openly makes its profit by violating God’s word can immediately be cut of your list of potential investments. Now, I’m not going to take the time to create a list of every action that violates God’s holy and perfect standard, but take a look at 1 John 2:15-17 above, and you should be able to create a list of your own!

If you know that a company involves itself in sinful practices, then you should cut off your relationship with them if possible.

Do Not Violate Your Conscience Or That Of Another Believer

Hear what the Apostle Paul says about this:

Therefore let us not judge one another anymore, but rather determine this–not to put an obstacle or a stumbling block in a brother’s way. I know and am convinced in the Lord Jesus that nothing is unclean in itself; but to him who thinks anything to be unclean, to him it is unclean. For if because of food your brother is hurt, you are no longer walking according to love Do not destroy with your food him for whom Christ died. Therefore do not let what is for you a good thing be spoken of as evil; for the kingdom of God is not eating and drinking, but righteousness and peace and joy in the Holy Spirit.

For he who in this way serves Christ is acceptable to God and approved by men. So then we pursue the things which make for peace and the building up of one another. Do not tear down the work of God for the sake of food All things indeed are clean, but they are evil for the man who eats and gives offense. It is good not to eat meat or to drink wine, or to do anything by which your brother stumbles. The faith which you have, have as your own conviction before God. Happy is he who does not condemn himself in what he approves. But he who doubts is condemned if he eats, because his eating is not from faith; and whatever is not from faith is sin. ~ Romans 14:13-23

In many of the pagan temples, worshipers sacrificed meat to their idols. This was to both cleanse the meat from demonic contamination (because they believed that evil spirits would indwell food in order to enter into a human’s body when they ate), and to offer up a sacrifice to their false god. Any meat that wasn’t burned on the altar was then sold in the meat markets at a cheap discount.

Many new Christians had been saved out of that pagan lifestyle and thus were very sensitive to these practices, and were sometimes reminded of their past. However, more mature believers knew that there was nothing inherently wrong with the meat and that it was fine for a Christian to buy it and save a lot of money! 1 Corinthians 8:7-13 has this to say about this situation:

However not all men have this knowledge; but some, being accustomed to the idol until now, eat food as if it were sacrificed to an idol; and their conscience being weak is defiled. But food will not commend us to God; we are neither the worse if we do not eat, nor the better if we do eat. But take care that this liberty of yours does not somehow become a stumbling block to the weak. For if someone sees you, who have knowledge, dining in an idol’s temple, will not his conscience, if he is weak, be strengthened to eat things sacrificed to idols?

For through your knowledge he who is weak is ruined, the brother for whose sake Christ died. And so, by sinning against the brethren and wounding their conscience when it is weak, you sin against Christ. Therefore, if food causes my brother to stumble, I will never eat meat again, so that I will not cause my brother to stumble.

As we see in this example, even if we understand that the word of God doesn’t explicitly speak against a particular practice, if it offends another believer, then we are not to do it. Helping to protect the conscience of our brother or sister is more important than whatever gain we would have received by a particular investment (0r meal).

Even if you believe that it is acceptable to invest in a particular stock or fund, if your doing so causes another believer to stumble or even go against his conscience, then you have sinned against both him and Christ!

A Few Things To Consider

Unless you purchase your shares of stock in an I.P.O. (Initial Public Offering), your money does not go to the company
If you are not comfortable investing in a company that owns a company that owns a company that owns a company that sells vending machines to casinos, then please do not go against your conscience
If you scrutinize your investments this heavily, but do not give the same consideration to where you make your day-to-day purchases, some may regard you as a hypocrite and your testimony will still be ruined

Reader Questions

Have you ever invested in a stock against your conscience for any reason (fear of missing out on a huge profit, the pressure of an adviser or other Christian, etc)?
How careful are you when it comes to choosing your investments?
Do you think it’s possible to avoid profiting from sin?

Source: biblemoneymatters.com

Apache is functioning normally

May 19, 2023 by Brett Tams

Do you receive a year-end bonus? Lucky you! While you may be tempted to go on a shopping spree or take your gang out to a great dinner, hold on a second. Yes, you can use some for fun, but you might also want to put some of a year-end bonus toward your financial goals.

Smart bonus money moves may include paying down debt, helping to fund a short-term savings goal (such as a downpayment on a house or establishing an emergency fund), as well as investing the money to potentially achieve long-term growth.

There’s no one right formula for spending (or not spending) a bonus: Each person’s financial situation and future goals are entirely unique.

But here are some ideas for using your bonus — or any other cash infusion, in fact — that can help improve your financial wellness today and tomorrow.

Allocating Some Money to Fun

You worked hard all year. So it’s totally understandable if you want to put some of your bonus money simply towards a few wants vs. just needs.

With any financial decision, it typically doesn’t have to be all or nothing, and that includes your work bonus. In fact, taking a balanced approach to your money might actually help you to maintain the stamina that financial goals often require.

Although the exact split is ultimately up to you, to avoid overspending, you might want to consider putting roughly 90% of your bonus towards your financial goals, and devoting about 10% to “fun money.”

If you’re getting a $5,000 bonus (after taxes), for example, that means you would have $500 to spend treating yourself. The other $4,500 would then go towards putting a big dent in your money goals.

Recommended: Benefits of Automating Your Finances

Chipping Away at Debt

If you have debt — whether from a student loan, car loan, or credit card debt — a bonus can be a great way to start whittling away at whatever balance you have to contend with, or even wiping it out completely.

Doing this can help you avoid throwing more money away just on interest charges, and if you manage to wipe out debt completely, you’ll have one less financial responsibility to stress about every month.

How much of your recent influx of cash should be directed toward debt reduction is entirely personal, and will depend on your situation.

Some financial planners recommend that people with high-interest debt consider putting around half of their annual bonuses toward paying down that debt. But this decision will depend on your individual circumstances.

Since credit card debt typically costs the most in interest, that can be a great place to start. Many credit cards charge close to 20% interest or higher. So if your goal is to ultimately build wealth, it may be smart to minimize credit card balances or, even better, pay them off completely.

It would be unreasonable to expect that you could out-invest what you are paying out in credit card interest.
The same idea goes for any high-interest or emotionally stressful debt on your balance sheet.

Recommended: 5 Reasons to Switch Bank Accounts

Saving for a Short-Term Goal

If you haven’t yet started, or haven’t quite finished, creating an emergency fund, getting a bonus is a great time to beef up that financial cushion.

While many people don’t like to think about the possibility of their car breaking down, a medical emergency, or job loss, should one of these unexpected events occur, it could quickly put you in a difficult financial situation.

Without back-up, you can risk landing in debt should you experience a financial set-back.

How much to sock away for a rainy day is highly personal. But a common rule of thumb is to create an emergency fund that has enough money to cover three to six months of living expenses. You may need more or less, depending on your situation.

If you already have a decent cash cushion, you may next want to think about what large purchases you are hoping to make in the not-too-distant future, say, less than five years.

This could be a downpayment on a home, a renovation project, taking a special family vacation, buying a new car, or any financial step that requires a large infusion of cash.

Then consider using at least some of your bonus check to jump start these savings goals, or add to previously established ones.

It’s a good idea to put money you are saving for a short-term goal (whether it’s a downpayment or an emergency fund) in an account that is safe, earns interest, and will allow you to access it when you need it.

Some options include a savings account at a bank, an online savings account, a checking and savings account, or a certificate of deposit (CD). Keep in mind, though, that with a CD, you typically need to leave the money untouched for a certain period of time.

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Invest for the Future

Bonus money can also help you start investing in longer term goals, such as retirement or paying for a child’s education. Using bonus money to buy investments can help you create additional wealth over time.

For example, a lump sum of cash can work wonders in boosting your retirement savings. Even if you’re technically on track for retirement, adding more money to your IRA or 401(k) today can leave you with a larger income stream when you’re older. If you’re already contributing to these accounts, be aware of the annual limits.

You can contribute to your retirement using your bonus in a couple of ways. Many companies will automatically deduct from your bonus for your 401(k) at the same rate as usual.

You can also ask your company in advance if you can have a special withholding for your bonus. You may be able to fill out a form (or go onto the company portal) to designate up to 100 percent of your bonus to your 401(k).

If you can’t direct that money to your 401(k), and you’re eligible for an IRA, consider maxing that out instead.

Either one can help get you closer to a great retirement–and may also help you save significantly on taxes in the short term.

People who have kids may want to consider putting some bonus money toward starting, or adding to, a college savings account, such as a 529 plan (which in some states can offer tax benefits).

For financial goals outside of retirement, you may want to look into opening a brokerage account.

This is an investment account that allows you to buy and sell investments like stocks, bonds, and mutual funds. A taxable brokerage account does not offer the same tax incentives as a 401(k) or an IRA, but is much more flexible in terms of when the money can be accessed.

How much of your bonus you should put towards long-term investments is an individual decision that will depend on your current financial circumstances.

The Takeaway

No matter the size of your hard-earned bonus, it’s a good idea to think about how it can best serve you and your goals in both the short and long term. Some smart ways to use bonus money include getting ahead of high-interest debt, setting up or enlarging your emergency fund, saving up for a large purchase (such as a home), as well as beefing up retirement savings and other long-term investments.

You can mix and match smart spending and smart saving to fit your financial situation. One easy way to do this is to sign up for an online bank account from SoFi Checking and Savings. You’ll earn a competitive annual percentage yield, pay no account fees, and you’ll spend and save — all in one convenient place. Whether you’re saving for something specific or storing cash until you’re ready to invest, SoFi Checking and Savings can help you put that year-end bonus to good use.

Help your money work harder for you with SoFi.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Source: sofi.com

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May 19, 2023 by Brett Tams

By Miranda Marquit 4 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 1, 2013.

Last year, I was in danger of moving up a tax bracket. We were pretty close to the line between the two, and the accountant recommended that we open an IRA in order to, perhaps, drop us down a tax bracket. We already had a Roth IRA, but the contributions to a Roth IRA aren’t tax deductible, so the accountant thought that if we opened a traditional IRA, we could squeak by, remaining in the same tax bracket. He quickly whipped up an alternative calculation, assuming that we opened a traditional IRA with $2,500. It was enough to reduce our taxable income to a degree that we managed to stay in the same tax bracket for another year. And the cool thing was that we did this after the first of the year.

You Have Until Tax Day To Open An IRA

One of the great things about opening an IRA is that you can do so after the first of the year. You usually have until Tax Day (which is usually April 15) to open an IRA and add funds. This means that, as you prepare your taxes, and you discover that another deduction would be helpful, you can get that deduction without too much trouble. As long as you have enough to open an IRA with an amount that will be of benefit to you.

If you do decide to open an IRA in order to get the tax deduction, you will need to make sure you designate which tax year it is being used for. If you open an IRA in 2011, before the deadline, you will need to specify that your contribution is for tax year 2010. You will not be able to use the deduction again for 2011. You have to choose which year you want it to count for. A knowledgeable tax professional, or an IRS representative, can help you figure out the best way to go about getting your deduction.

Coming Up With The Contribution

Of course, the next issue is how you are going to come up with the IRA contribution. You can open your IRA with a smaller amount, and then figure out how much you need to put in until April rolls around. If you need $2,000 to achieve your goals, and you open an account in February, it is possible to open the account with $750. Then, during March and at the beginning of April, you will need to put in $625 to total $2,000. Others might consider dipping into an emergency fund to come up with the money all at once. If you do this, though, you need a plan for properly replacing the money as quickly as possible.

For us, the difference was about $637 in taxes. It may seem strange to open an IRA with $2,500 to avoid paying $637 in taxes. However, that $2,500 is working for us (tax deferred), rather than us giving away more than $600 to the government. The situation kicked us into gear, putting more toward retirement. On top of that, having that lower amount in taxes means that our quarterly taxes didn’t change. Do your own cost and benefit analysis, and decide whether it’s worth it to you to save some money in taxes by opening an IRA that will work on your behalf.

Source: biblemoneymatters.com

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May 19, 2023 by Brett Tams

How to Make $500 a Month in Passive Income – SmartAsset

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You can produce $500 a month in passive income through savings accounts, certificates of deposit, stocks, bonds, funds and other investment vehicles. Each offers varying rates of return, degrees of safety, convenience, and liquidity. And each requires a significant initial investment to produce the required amount of passive income.

A financial advisor will be able to help with your investment decisions.

How to Make $500 a Month in Passive Income

Passive income generally refers to money you receive automatically without having to do anything such as work for wages. The most common way to generate passive income is through purchasing investments that pay you interest or dividends.

Producing passive income in this way calls for putting in money rather than putting in the effort. However, once you have invested the money, you can cash checks or receive deposits to your bank account without any intervention on your part.

And there are many investments you can make to produce $500 monthly in passive income. Here are some of the most accessible and reliable:

Savings Account

A bank or credit union savings account is as passive, safe and convenient as you can get. The top-paying savings accounts yield around 4.5% annually. At that rate, depositing approximately $133,333 will give you $500 monthly.

Certificates of Deposit

Certificates of deposit (CDs) are relatively safe, somewhat better-paying and a little less convenient than savings accounts. The best one-year bank certificates of deposit yield about 5% annually. So if you buy a $120,000 12-month CD, you’ll get about $500 in passive income each and every month.

Bonds

Corporate bonds are riskier than bank deposits. But AAA-rated bonds are generally considered safe and historically yield a little over 4%. If you buy $125,000 worth of AA-rated bonds, you can expect to receive the equivalent of $500 a month. That usually comes in quarterly, semi-annual or annual payments.

Dividend-paying Stocks

Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month. Although, most dividends are paid quarterly, semi-annually or annually.

Diversified Securities Portfolio

A diversified securities portfolio of 60% stocks and 40% bonds has returned about 6.1% annually on average for the last decade, according to Vanguard. If future performance matches past performance, which is not guaranteed, $100,000 invested in a well-chosen 60/40 portfolio could grow by about $6,000 a year. The return includes dividends as well as price appreciation, so you may have to sell some of your investments to get $500 a month.

Exchange-Traded Funds

Low in cost and easy to buy, passively managed exchange-traded funds (ETFs) produce returns that vary according to whether they track stock, bond or other indexes. To cite one example, Vanguard’s High Dividend Yield ETF yields approximately 3%. You’d need to invest approximately $167,000 to get $500 a month in passive income from that ETF.

Real Estate

Purchasing shares of a Real Estate Investment Trust (REIT) is one popular way to get passive income from real estate. Publicly traded REITS pay dividends at an average rate of about 3%. So you’d need $167,000 to produce $500 in monthly passive income this way.

Other income opportunities that are somewhat less passive can also provide regular monthly income with varying amounts of effort. Drop shipping, for example, is a business model that involves setting up an online store and taking orders for products that pass directly to a supplier, who fulfills them without you having to do a thing except accept payment.

Direct investments in real estate, such as purchasing rental properties, can produce income that the internal revenue service (IRS) views as passive income, entitling it to more favorable tax treatment than earned income from working. However, managing residential real estate can involve considerable effort and attention on your part unless you pay a management company to take care of leasing, repairs and other tasks.

Bottom Line

To generate $500 a month in passive income you may need to invest between $83,333 and $250,000, depending on the asset and investment type you select. In addition to yield, you’ll want to consider safety, liquidity and convenience when selecting the investments you’ll employ to provide monthly passive income. However, once you’ve made the decision and put down your money, you can expect to receive regular payments without much, if any, additional future effort.

Tips for Investing

Financial advisors help investors analyze various investment options and can help create a plan of action to meet their goals. Before investing in any passive income investments, consider talking with an advisor to understand how it fits within your portfolio. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
When investing your money, it is important to diversify your assets among many different types of stocks and bonds. This helps you gain exposure to multiple sectors of the market and benefit from their growth. Our asset allocation calculator helps you select a profile that’s right for you based on your answers to simple questions.

Photo credit: ©iStock.com/Erdark, ©iStock.com/bymuratdeniz, ©iStock.com/fizkes

Mark Henricks
Mark Henricks has reported on personal finance, investing, retirement, entrepreneurship and other topics for more than 30 years. His freelance byline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.

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Source: smartasset.com

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May 19, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

A couple of months ago, a friend asked me for help choosing investments in her 401(k). Unfortunately, the investment options were a collection of expensive, actively managed mutual funds, some with sales charges. The only silver lining was her employer’s matching contribution, which is always a fantastic offering.

The price you pay for your investments is very important, yet many people aren’t aware of their retirement account fee structure. Expensive funds can cost a person tens of thousands of dollars (or more!) in fees and expenses over a career. I advised my friend to contribute enough to get the full match, contribute more to an IRA, and ask her employer’s benefits administrator to add some low-cost index funds to her plan.

Tibble v. Edison

Luckily, having low-cost funds at your disposal just got much easier. A recent unanimous Supreme Court decision found that retirement plans that offer expensive investments when cheaper, comparable ones are available are violating Federal law. So what did this mean for you?

The court’s decision was relatively narrow. The plan under scrutiny in this case was offering retail-priced funds when institutional-priced funds were available. In other words, they were forcing employees to buy an expensive product when the exact same product was available at a lower price (kind of like a name brand prescription drug vs. a generic brand.)

That’s illegal, because a 401(k) plan administrator is a fiduciary. A fiduciary means they’re required by law to make decisions in the best financial interests of the employees who keep their retirement savings in the plan. They’re not allowed to use the plan to enrich their employers or themselves. The court didn’t weigh in on how much is too much for a plan to charge, or whether a plan is required to offer index funds. But they offered a glimmer of hope and legal muscle to anyone saddled with a less than ideal 401(k).

How do you know if your 401(k) has lousy investment options? Names and numbers. A good plan will offer a variety of index funds (usually with “index” in the name), with an expense ratio of 0.2% or less. The expense ratio tells you how much the fund charges you per year, as a percentage of the money you keep in that fund. Since the cheapest funds charge under 0.1%, anything over 1% is more than ten times as expensive — and sadly common. The plan is required to disclose the expense ratio of each fund, but it’s not always in the same place. It might be found as a column in the list of investment options on your online benefits site, or you might have to click through to the specific fund.

Even if you find your plan is overpriced, you should still take advantage of your 401(k) to save for the future, especially if there’s an employer match. But it’s worth your time to send a note to the benefits office and ask for index funds. It could make a huge difference to your retirement stash down the road when you’re ready to use your money.

Save more, spend smarter, and make your money go further

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May 18, 2023 by Brett Tams

I‘ve been looking into the many options available to me lately when it come to discount online brokerages.

It seems like just about everyone has a service that they like best, and that they prefer using. The first one I had heard recommended was OptionsHouse, which I reviewed last time. It had a good mix of research tools, low cost and ease of use. Definitely one to look into, especially for active traders.

Sharebuilder is another one that I had heard good things about, and since I already have a savings account with Capital One 360, I thought I should give it a look.

ShareBuilder By Capital One Background

From Wikipedia:

ShareBuilder (formally ShareBuilder Securities Corporation) is a United States based online brokerage firm founded in 1996 (as NetStock Direct). It encourages recurring, automatic purchases of shares of stock, ING Mutual Funds (Class O) and exchange-traded funds. All transactions occur online and are entirely at the discretion of the account holder, thus it is an execution-only service. The company does not have brokerage sales representatives or advisors. Account holders can use ShareBuilder’s online research tools to investigate stocks, similar to other online brokerages such as Scottrade, TD Ameritrade and Fidelity. In 2005, ShareBuilder began offering 401(k) plans to small businesses. On November 19, 2007, ShareBuilder Corporation was purchased by ING Direct, a subsidiary of ING Group for US $220 million. In June 2009, ShareBuilder moved its headquarters from Bellevue, Washington to 83 King Street, in the Pioneer Square district of Seattle, Washington. In February 2012, Capital One Financial Corporation completed its acquisition of ING Bank, fsb, and its subsidiaries, including ShareBuilder Corporation. ShareBuilder is no longer affiliated with ING Group.

Awards

ShareBuilder has earned a bunch of awards and has been recognized as one of the top online brokers for beginning & long term investors. Among the awards:

Forbes Best-of-the-Web awards in January 2003 and January 2004
Kiplinger’s Personal Finance ranked Sharebuilder #1 in “25 Ways to Invest $1,000.”

ShareBuilder Fees, Commissions And Minimums

Probably one of the most important things to consider when opening an online brokerage account is to consider what fees, commissions and minimums you’ll see when using an account. Here is what you’ll find at ShareBuilder:

UPDATE: As of March 2013 Sharebuilder By Capital One slashed their prices from $9.95 per stock or options trade, to $6.95 per trade. That move makes them one of the most competitive brokerages out there.

Stock Trades

Sharebuilder by Capital One has middle of the road, to expensive, fees when it comes to stock trades. They have $9.95 stock $6.95 stock trades. Compare to some others and they are very competitive.

On the other hand, if you’re less of an active trader and more of a buy and hold investor, their automatic investments may be a good fit for you, and more affordable. Automatic investments, done on Tuesdays, will cost only $4. If you sign up for their Advantage plan, you’ll get 12 per month for free included in the $12/month subscription, and it’s only $1 for each additional. They offer a dollar cost averaging plan as well.

Options Trades

Sharebuilder has a fee for options trades of $9.95 $6.95 per online trade, + $1.25 per contract.

Fees And Minimums For An Account

ShareBuilder doesn’t have account maintenance fees, monthly minimums or inactivity fees. All prices are charged on a flat rate, and what you see is what you pay.

There is no minimum account funding level, although if you want to get the $25 bonus mentioned above, you need to fund with at least $25.

Here’s a basic fee comparison with other discount brokerages:

Investment Account Options

ShareBuilder offers a plethora of other investment account options for investors. Among them:

Individual Account
Joint Account
Traditional/Rollover IRA
Roth or Conversion IRA
ShareBuilder ESA (Education Savings Account)
Custodial Account

ShareBuilder Tools & Tutorials

In the past ShareBuilder may have been a bit short when it comes to the research and education departments. Within the last few years, however, ShareBuilder has really built up their library of educational tutorials and investment tools.

They now have a variety of tools including such things as an investment screener, a portfolio builder, fund/stock/ETF selectors, reports, simulators and calculators.

They also have a wide variety of investment information for beginning investors including tutorials and articles in their investor library.

One thing others have noted that is missing, however, is a forum or community of some sort where you can talk with other investors to get advice. Several other online brokers have something like that, and it would be nice to see Capital One add one for ShareBuilder as well.

Easy Linking To Capital One 360 Savings Or Checking

Another thing that I like about ShareBuilder is that you can easily link it to your Capital One 360 Savings or Capital One 360 Checking account if you have them. I personally already have an Capital One 360 Savings account (review here) and being able to easily link the accounts for automatic investments is nice.

Conclusion

When considering an online discount brokerage ShareBuilder is definitely one of the best options out there for long term investors who want to set up automatic investments and do long term dollar cost averaging. If you’re more of an active trader you may want to look elsewhere for a lower cost option, someplace like OptionsHouse. But if you just want a plan that will allow you to automatically invest over the long term, ShareBuilder would be a good place to check out.

Have you used ShareBuilder, or considered using them? What has your experience with them been like? Are you happy with them? Tell us your thoughts in the comments.

Sign Up For Sharebuilder by Capital One

Check out our comprehensive listing of discount brokerages and mutual fund companies

Source: biblemoneymatters.com

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May 18, 2023 by Brett Tams

Whether a 401k is enough for retirement depends on a variety of factors, including your lifestyle, spending habits, and retirement goals. However, in general, a 401k alone may not be enough to fully fund your retirement.

One of the main advantages of a 401k is that it allows you to save for retirement on a tax-deferred basis. This means that you don’t pay taxes on your contributions or investment gains until you withdraw the money in retirement. Additionally, many employers offer matching contributions, which can help boost your retirement savings even further.

However, there are some limitations to 401ks that can make it challenging to save enough for retirement. For example, there are annual contribution limits, which can prevent you from saving as much as you need to. In 2023, the contribution limit for 401ks is $22,500, with an additional catch-up contribution of $7,500 for those 50 and older.

Another potential limitation of 401ks is that they may have limited investment options. While most plans offer a range of investment options, they may not include all the options you would like to invest in to fully diversify your portfolio.

To ensure you have enough savings for retirement, it’s important to consider other retirement savings options in addition to a 401k. This could include individual retirement accounts (IRAs), taxable investment accounts, or real estate investments, among other options.

Here’ my additional thoughts on the topic:

Hey everybody, this is Jeff Rose from Goodfinancialcents.com. Today I am going to talk a little bit about a common question that I get quite frequently. This question is:

Is just having a 401k enough to have a successful retirement?

It is a very good question because a lot of people wonder about, am I saving enough? Am I putting enough away to make sure I get enough to retire when I want to retire and is the 401k only thing that we need to get us by? And I would say that generally speaking that answer is no. As far as my reasoning and logic behind that is this.

401k By Itself Is Not Enough

For one reason, most people that do have a 401 k, most of you are not maxing it out. This is what I’m gathered from my several client meetings of those that have the ability to put money in a 401k.

So are you putting in $22,500 per year in that 401k? If you are, you definitely have a fighting chance and if not then most likely the 401k is not going to be enough.

Note: See 2023 401k Contribution Limits

And if you have a good company that has a good match at top of that, obviously it will make it better. For those who are not putting the maximum amount in and not having good and favorable 401k match from your employer then you definitely have to consider other means and sources of savings.

You can obviously choose between traditional or Roth IRA. Both of those are excellent tools to complement the 401k and specially if you are doing the Roth IRA and you are doing the regular 401k that gives you pre tax money and after tax money. Both those together are a good compliment.

I know for me personally as a business owner I have a SEP IRA which is kind of like my 401k. Over and above that I have been able to do Roth IRA and a Roth IRA conversion. That gives me some pre tax money and after tax money as well. Nothing like having options!

It’s Nice Having Options

Between the two, having a good 401k, having a Roth IRA traditional IRA, gives you another bucket to choose from. Me personally, I am not really counting on Social Security being there for me. And if it is there, it will most likely come at a later date, say 70 when I can get it, it will probably be a reduced amount. Do not plan on it being there, and utilizing 401k and Roth IRA as an alternate or replacement for that income. Between those two, another thing I would add is saving account and investment account, utilizing other investment savings tools to have that for you at retirement.

So to answer the question, if you have a 401k and is that enough? I will say no. Make sure that you are utilizing all the other tools. For me, I like having three buckets approach. If you got a 401k, Roth IRA it is another source of retirement income that could be a saving accounts or investment account.

At least have three buckets, so you can always have choices when it comes to the retirement. One bucket dump’s over is depleted; you have got other buckets to choose from. So that was my advice to you. If you have any questions, feel free to email me, contact me on the blog.

You can also see my Soldier of Finance Video below that addresses having a “Multi-Bucket Approach For a Successful Retirement”.

Source: goodfinancialcents.com

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May 18, 2023 by Brett Tams

What Is an Investment Property Loan? – SmartAsset

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Real estate can be a great addition to your portfolio if you’re hoping to diversify and create passive income. And investment property loans can make it easier to purchase property if you’re interested in owning real estate directly. However, qualifying for an investment property loan is a little different from getting a mortgage to buy a home that you plan to live in. It helps to know what to expect and what’s required before wading in. Here’s what you need to know.

You can also talk to a financial advisor about the pros and cons of borrowing to purchase an investment property.

Understanding Investment Property Loans

Investment property loans are loans that you can use to buy a property that you plan to generate income from. You would do that by leasing it to one or more tenants who pay rent back to you on a monthly basis.

Generally speaking, you can use an investment property loan to buy a property that has between one and four units. The types of properties you may be able to buy include:

Single-family homes
Multi-family homes, such as a duplex or triplex
Condominiums or townhomes
Manufactured homes

There are also investment property loans for investors interested in flipping real estate. Rather than generating a steady stream of passive income, flippers aim to purchase a property at a low price and renovate it, then resell it at a higher price to turn a profit.

Investment Property Loan Requirements

Is it easier to get an investment property loan versus a mortgage to buy a primary home? Not necessarily, as lenders typically impose more requirements for investment property loans.

Compared to a traditional purchase loan for a home, loans for investment properties may require you to have:

Higher credit scores
More cash in reserves
A larger down payment
Evidence of past experience with managing investment properties

You may also need to provide additional details about the property itself. This includes information about the neighborhood where it’s located, how much rental income it’s currently generating and estimates of how much income you expect it to produce once you own it.

Why is getting a loan for an investment property more challenging? One simple reason: These loans can pose a greater risk to lenders.

Let’s say that you have a main home that you live in, which has a mortgage. And you have a second home as an investment property. If your renters don’t pay up or you can’t keep the second home rented long-term, that could put you in the position of having to stop making the mortgage payment in order to keep up with the loan on your primary home.

Once the loan goes unpaid long enough, it goes into default which can lead to other consequences, including foreclosure. Lenders don’t want borrowers to default on investment property loans, which is why they can make it harder to qualify.

Types of Investment Property Loans

If you’re interested in getting a loan to buy an investment property, you have more than one option. Banks, credit unions and online lenders can offer investment property loans.

The range of loans you have to choose from can depend on the lender, while the loan terms that you’re able to qualify for can hinge largely on your credit score, income and the specifics of the property.

The main types of investment property loans include:

Conventional Loans

A conventional loan may be your first choice if you’re planning to buy a single-family home as an investment property. Conventional loans can offer fixed rates and longer loan terms, but you’ll likely need a higher credit score to get the lowest rates.

FHA Loans

The Federal Housing Administration (FHA) allows you to use FHA loans to buy investment properties with multi-family homes with up to four units. There is one requirement: You’ll need to live in one of the units for at least 12 months to qualify.

VA Loans

Veterans and military service members can use the VA loan program to purchase investment properties with as many as seven units, with no money down. Similar to FHA loans, borrowers must live in one of the units to qualify.

Owner Financing

A less traditional option for buying an investment property is owner financing. With this type of arrangement, you borrow from the seller and make payments back on a set schedule. This type of loan agreement may require you to make one large balloon payment at the end of the term.

Home Equity Loans

If you own a home and have a significant amount of equity, you could borrow against it to buy an investment property. A home equity loan provides you with a lump of money that you might use to buy a second home to rent out. Similar to first mortgage loans, home equity loans can offer fixed rates and lengthy terms.

Hard Money Loans

Hard money loans or bridge loans are more commonly used to purchase fix and flip properties. With these loans, you can get the money you need to buy the property and renovate it, but you typically have to pay it back within 12 to 18 months.

When searching for an investment property loan, it’s important to check the minimum qualification requirements first. That can help you weed out loan options that aren’t a good fit. Once you’ve narrowed down the list, you can take a second look to compare interest rates, down payment requirements, fees and loan terms.

How to Get an Investment Property Loan

Getting an investment property loan is something of a process and you may need a little patience to get through it. Here are the main steps involved in getting loans for investment property:

Find a Lender

The first thing you’ll need to do is find a lender that offers investment property loans. You can start with your bank. Then branch out to other banks, credit unions and online lenders to see what options are available.

Apply for a Loan

Next, you’ll need to apply for the type of loan you’re interested in getting to purchase an investment property. At a minimum, you’ll need to provide your personal information along with some details about the type of property you want to buy and the loan amount you’re seeking.

Provide Documentation

Any time you’re applying for a mortgage, the lender will ask for certain financial documents, including tax returns and bank statements. You’ll also need to share any information you have on the property, including its current rental income if available.

Get the Property Appraised

The appraisal determines how much an investment property is worth. A thorough appraisal should also provide you with details of comparable rental properties in the area and the income they generate.

Close on the Loan

Assuming that you’ve checked off all the lender’s boxes, the final step is closing on the loan. At this stage, you’ll need to review and sign the loan paperwork, transfer your down payment to the lender and pay any closing costs due.

Bottom Line

Investment property loans can help you get a step closer to your financial goals if they include owning real estate for passive income. Before applying for a loan, it’s important to understand what’s required to qualify, as well as what you might pay in interest and fees.

Investing Tips

Real estate can be a great investment though owning rental property isn’t necessarily right for everyone. Talking to your financial advisor can help you weigh the pros and cons if you’re unsure whether property ownership is a good move. If you don’t have a financial advisor yet, finding one doesn’t have to be difficult. SmartAsset’s financial advisor matching tool makes it easy to connect with professional advisors in your local area. You can get personalized advisor recommendations just by answering a few simple questions. Get started now.
While the upfront cost might be your main focus when getting an investment property loan, it’s important to consider the longer-term cost of owning rental property. In addition to mortgage payments, you’ll be responsible for maintenance and upkeep, repairs, property taxes and insurance. All of those things can affect your profits when renting property, so remember to look at the bigger financial picture before you buy.

Rebecca Lake, CEPF®
Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.

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Source: smartasset.com

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