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Loyal3 Is Shutting Down

Prioritize Your Finances to wind up with a suitcase of money
You won’t be maximizing your money with Loyal3 any more.

Back in 2015, I learned about a relatively new investing platform that allowed users to invest in increments as low as $10 per purchase. Additionally, you could buy partial shares, which made the opportunity even more attractive. This platform was Loyal3.  This actually got me to start investing. Unfortunately, after having used this online brokerage for about two years, I got an email that Loyal3 is shutting down.

Loyal3 Is Shutting Down

This email that I received from the company was a bit of a surprise, but not too big of one. The company did not charge any fees, claiming to make money from marketing the stock of the 60 or so companies that it provided for investors as well as the interest from holding onto cash that was not yet invested in an interest-bearing money market fund.

Loyal3 is shutting down.
Loyal3 is shutting down.

This did not seem like the most sustainable of business models, but because Loyal3 was a member of SIPC, I figured at the time that my investments were safe. I enjoyed the chance to build my investment holdings in small increments over time.

Many in the investing community advocate buying stock in increments of $1,000 or more because of fees that hurt long-term returns. This can make it difficult for small-time investors to begin the process of investing. It can also make diversification a very slow process. With Loyal3, I had as many as eight holdings at one time, built up with purchases that ranged between $10 and $200 for any single transaction.

This was a pretty cool deal.

But now it’s done.

What To Do Now?

Now that Loyal3 is shutting down, what is the small-time investor to do? There are some investing options that might work. RobinHood is one that comes to mind. I’ve not used this platform, but I’ve read about it. RobinHood requires investors to buy full shares, which makes the minimum investment a bit higher.

The email from Loyal3 indicated that those who choose to leave their holdings alone would automatically have them transferred to a new brokerage called FolioFirst. This new brokerage, according to the email, is just for Loyal3 clients. The offerings for FolioFirst accounts will grow to around 200 companies and funds, which is good. Then comes the bad news.

There are still free trades( at least up to 2,000 a month), but the new outfit is going to start charging a $5 monthly fee per account. The minimum investment will now go up to $25 from $10. $5 a month might not sound like much, but it would add up to $60 a year.

Let’s say that a new investor has $50 a month to invest. This fee would mean that the investor would go from paying $0 with Loyal3 to paying $60 with the new FolioFirst platform. That’s a fee that would take up 10 percent of the total investments for the first year. Admittedly, the fee would go down over time as more money gets invested, but it would slow down the growth process quite a bit.

Investors with Loyal3 also have the option of instigating an account transfer to the brokerage of their choice. Option 3 involves selling all shares and then cashing them out.

What Am I Doing?

After getting the email that Loyal3 is shutting down, I decided that I’d opt for the third option. My account has some modest gains. I figured that my $100 in gains would cost me about $20 in taxes at most. Not too bad.

Furthermore, I also took into account the fact that I’m investing for dividend income. With the current size of my account, I’d have to pay about 4 percent of its value in account fees over the next year. That’s more than the roughly 3 percent yield that I’m earning on my holdings.

I’m planning to take the proceeds and invest them into my IRA account with TradeKing. This will provide a positive tax effect because I’ll be able to cut my current-year income by the amount I invest and then save 15 percent of the investment in deferred taxes.

I am planning to make one major purchase or two smaller purchases with the proceeds. This will not have me as diversified as I was, but it will cost me a max of $9.90 in trading fees, which is much less than the $60 I’d lose when looking at the monthly fees that FolioFirst would charge.

I can also buy REITs, telecoms, and utilities that pay higher dividend yields, so my overall dividend income for the next 12 months will probably go up with the purchases.

Conclusion

Loyal3 is shutting down. This is sad in one regard. Small-time investors who are getting started will have one less option when it comes to making small purchases and not having to pay major fees.

I’m cashing out and cutting my current-year taxes by putting the proceeds into a traditional IRA. I should also see a bit of a bump in my annual dividend income as a result.

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How To Free Up Money To Start Your Side Hustle

A side hustle can help you make more money.
Photo Credit: FirmBee via Pixabay (public domain)

The following post has been contributed by Drew Cloud of the Student Loan Report.

Debt has become a way of life in the United States, with the average household now owing more than $100,000 in debt. From credit card balances to mortgages, car loans and student loans, Americans are taking on more debt than ever before. It often leads to issues in setting your priorities straight. Owing money can be incredibly stressful — and it can also make it hard for people to get out of debt. One method that many people may want to use to dig their way out of a financial hole is through a side hustle.

Those looking to start a side hustle may want to start driving for a ride sharing company, like Uber or Lyft, or perhaps they want to start selling their crafts online. Whatever their side hustle may be, they need the cash to start it up — but how is that possible if they are already in significant debt?

Freeing up money to earn money can be incredibly challenging when you are already carrying large amounts of debt. For example, the average American household has nearly $17,000 in credit card debt, over $176,000 in mortgage debt and almost $50,000 in student loan debt. With numbers like this, it can seem impossible to put together enough money to start up a side gig. But there are ways to start chipping away at that debt — and free up money to start your side hustle.

Refinancing Can Free Up Money For A Side Hustle

When it comes to mortgages and student loans, refinancing may be the right choice to help you lower your monthly payment and reduce the total amount of interest you pay over the life of your loan. A refinanced loan will typically have a lower, fixed interest rate and potentially a shorter repayment term.

When you refinance your loan, you are applying for a new loan that will be used to pay off the old loan (or in the case of student loans, multiple loans). The interest rate for this new loan will be based on a number of factors, such as your credit score, income and history of making on-time payments. If you initially applied for your mortgage or student loans when you had a lower income or credit score, refinancing can be a great way to get a lower interest rate — and to lower your monthly payments as a result.

Online repayment calculators can help you figure out if refinancing will save you money. For student loans, several sites such as my own website (studentloans.net) allow you to compare rates from a number of lenders so that you can be sure that you are getting a great deal.

Personal Loans

For credit cards, you can apply for a personal loan to pay off all of your debts with one loan. This could include medical bills, balances on credit cards and more. Credit cards tend to charge high interest rates, with compounding interest. This means that the interest charges are added to the principal amount owed and any accrued interest, so that you will be paying interest on top of interest. Credit cards may also have variable interest rates that could go up significantly based on a number of factors, like if you miss a payment.

A personal loan with a low, fixed interest rate can help you get a handle on your credit card debt, making it far easier to pay off your credit cards. Loan interest rates are determined by your credit history and whether the loan is secured or unsecured, and are usually fixed for the life of the loan. If you are approved for a debt consolidation loan, you’ll make fixed monthly payments for the loan term (usually two to five years). Making a single payment each month may be particularly helpful for anyone who has a hard time keeping up with multiple payments on different debts.

Refinancing your mortgage and student loans and using personal loans to pay off your credit cards are two ways that you can reduce your debt to help free up money to start your side hustle. Once you have paid down your debt, you will then be able to more fully commit to your side gig, whether it involves setting up your own crafting business, driving on the weekends, or any other type of work.

Drew Cloud started The Student Loan Report when he found it difficult to find student loan information in one place. He now regularly writes about the latest student loan news as well as advice articles for those in college as well as for graduates working to repay their debt.

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How To Prioritize Your Finances

The following contribution comes to us from Dave Chen.

How to Prioritize Your Finances

Your finances are a crucial part of your life. Without them, you would not have a place to live, you would not be able to afford to drive your vehicle, and so on. Your finances need to be properly managed to ensure that you do not wind up in a huge debt hole without a way to climb out. Below, we will provide you with some tips and steps to prioritize your finances.

Of course, you want to make sure that you ALWAYS pay your obligations first because you need a place to live, and sacrificing this to put money into your savings account does not make much sense. Okay, let’s take a look at the tips now.

Prioritize Your Finances to wind up with a suitcase of money
Prioritize your finances, and you could wind up with a suitcase of money. Image via Pixabay.

1. Pay Off High-interest Debt

The first priority is for you to pay down your highest interest debt and also any dangerous debt that you may have. You need to tackle these first  because they will hurt you and stick with you if you do not. Many people do not know what debts to consider as dangerous debt. These debts include those with high interest rates, tax liens, debts in collection, and so on.

Pay-day loans, credit cards, high-interest car loans, and high-interest personal loans need to be paid off immediately. The longer you wait to pay them off, the worse off you will be. You will accumulate interest on this debt at a rapid rate, and the sooner you pay it off, the better – you will save thousands.

Pay off credit card debt to get finances in order
Pay off high-interest debt to get your finances in order. Image via Pixabay.

2. Save For Retirement

You want to retire at some point, right? If so, you need to think about your future and start to save for retirement. The longer you wait, the more money you will need to put away. For example, if you do not start saving for retirement until you are 40, you may have to put away half of your salary to be able to have a nice nest egg when you retire.

Your retirement account will ultimately determine whether or not you will live in poverty when you retire. The less you save, the more government help you will need, and the longer you will have to work.

To help you determine how much money you should save, if you were to save $500 per month for a period of 20 years and earn 10 percent on the money, you would save about $380,000 for retirement.

3. Create an Emergency Fund

What would you do right now if the roof on your home caved in? What about if your vehicle’s engine blew? These are things that you need to think about and consider. Many people do not have any type of emergency fund set up, and this means that they have to forgo some of the things they need because of it.

An emergency fund will cover three to six months of all of your living expenses in case the worst situation ever happens. For many people, this means more than $10,000. You should start putting extra money into this account and leave it there. Even if you save one or two percent of your income yearly, you could easily reach a target of $500 per year or so.

4. Go Over Your Expenses

If you already live paycheck to paycheck, the only way that you will be able to have room to save would be to sit down and think about your expenses and then look at them from an unbiased view. If you have a cable bill at $200 and your car insurance is another $200, you may want to cut back on the cable and talk to your agent about a better rate.

You need to explore areas where you may be paying too much and then try to lower the cost. In addition, you should eliminate any expenses that you do not need. On top of this, there are ways to make extra money that can help handle these extra expenses.

Start to Prioritize Your Finances Today

If you are ready to get your financial future into focus, now is the time to do it. We have helped you above by letting you know what we think you need to prioritize first when it comes to your finances. You should focus on the highest interest loans you have because these loans can throw you into a crazy whirlwind of debt, especially if you only make the minimum monthly payments each month. Quite often, this may be private student loans taken out to pay for college. Even more often, these rates can be much higher than federal options.

From there, you should then focus on your retirement, your savings account, and setting goals for yourself. Now is the time for you get a head start and get on the right financial track by starting to prioritize your finances.

— Dave Chen is young professional working in the engineering field. On the side, he skiing, hiking, and writing about all things personal finance at MillenialPersonalFinance.com.

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Five Ways That Teens Make Money during Summer

Teens make money during summer via many side hustles online.
Photo Credit: FirmBee via Pixabay (public domain)

Summer is a great time of the year for kids all over the US. Most students in those districts that have not gone over to year-round schooling get to take nearly three months away from book learning. A great time for teens to go to the local pool, golf course, tennis court, or mall is summer. Of course, all of these things take money. It is not too early to start thinking about the ways that teens make money during summer.

The question then comes about, who should pay? Many parents have enough to fund their kids’ fun during the summer, but with aftereffects of the Great Recession, many families have budgets that are quite tight. There are several ways for teens to make money to pay for their fun and (hopefully) save some money for college, a car, or a home. Here are just five ideas for teens to make money in the summer of 2014:

1. Sign up for a GPT Site or Two

There are many sites up online that will allow any American over 13 to fill out surveys and watch videos to make money online. Most jobs require an employee to be at least 16 or to have parental permission if 14 or 15. These sites can let younger students start to get an entrepreneurial start.

A couple of the more common GPT sites are CashCrate and Treasure Trooper. Both have a long history of paying literally millions to users. Of course, most people will only earn about $50 or $100 per month if they work at these sites, but they pay without having to go out and work for someone else. They can also be used in free time in conjunction with another job.

You can sign up for CashCrate here. I have a more extensive review of the site here, as well to show how easy it is to make money on CashCrate. You can also sign up for Treasure Trooper here. I have reviewed Treasure Trooper here. Join the blog to get updates.

2. Sign up for SwagBucks or Another Paid to Search Site

Another way that teens earn money during summer (or at least gift cards) is by signing up for SwagBucks or another such site. This site is open to anyone who is at least 13 years old. Users can perform tasks like searching the web through the site and earn virtual currency known as SwagBucks, which can then be used to purchase a number of items including gift cards or actual cash in a PayPal account. I’m currently using my SwagBucks earnings to buy stock via Loyal3. These earnings from Swagbucks should pay off over time.

Gift card redemption options are at great retailers and restaurants. Among the leading options are Amazon.com and WalMart. e-Gift cards from the latter can be used in the stores, so they are just as good as cash. Also, there are options to redeem a few SwagBucks for discounts at local attractions like golf courses. I have a more lengthy review of SwagBucks here.

GiftHulk is another similar site that allows users to earn from searching the web and watching videos, among other things. I’ve earned PayPal cash from this site, and teens make money during summer from this site as long as they’ve reached 13 years of age. You can sign up for GiftHulk here.

Teens who make money and save will be more likely to balance their budgets in the future.
Teens who make money and save will find it easier to balance their budgets in adulthood.

3. Get a Part-time Job

This recommendation can sometime be easier said than done. Many businesses have cut back on the traditional summer hires. What are some good part-time opportunities for students? Many local retail outlets or fast food restaurants might be in the process of hiring for summer.

Those who like to play golf or swim might be able to land a job at one of their favorite places of all. These establishments are frequently seasonal, so they hire specifically during the summer. Those with a full-time job are not likely to apply, so students have a great opportunity to land their first paying gig.

4. Start a Business

One of the best ways that teens make money during summer is through doing something that they like and using it to start a business. High school students can start summer jobs and make decent money in the process. Cutting grass and babysitting are two great methods for teens to make money during the summer. Many of the kids who need babysitting only need it during summer months. Make sure to charge the going rate and do a good job so that you can get repeat business.

5. Sell Lightly Worn Toys or Games

Online businesses like Amazon and eBay allow just about anyone to set up an account and sell items to the world. Most teenagers have no need for the toys that they had in their earlier years. People also start to like different types of video games as they get older.

It is very easy to set up an account on an online dealer like Amazon or eBay with a parent and sell these items. While you will not get the full retail price, you can get some money that can go to something more desirable for a teenager.

Lots of Teens Make Money During Summer So Get Started Now

There are tons of ways that teens make money during summer. Some of the options allow people to actually make money in pajamas without leaving home. Some of the opportunities listed above are seasonal. Others, like CashCrate, Treasure Trooper, and SwagBucks can earn some money year-round. The sooner one signs up, the more quickly they can start to earn money.

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