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3 Reasons You Should Wait To Get Social Security | Smart Change: Personal Finance

(Mark Blank)

Should you access Social Security benefits as soon as possible or wait to try to maximize your monthly benefit? Everyone’s situation is slightly different, but there are some really compelling reasons to delay taking advantage of the benefits you’re getting.

Let’s look at the top three reasons for delaying receiving your Social Security benefits until age 70.

Image source: Getty Images.

1. You have a high life expectancy

Life expectancy has a significant impact on this decision. The two main components to consider are:

  1. Your current health condition.
  2. The longevity of your family.

If you are healthy and your family has a history of living well into their 80s or 90s, it makes sense to increase your monthly benefits by waiting until age 70 to claim Social Security.

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average tie Waiting point for benefits is 70 years (assuming a full retirement age from 67). The break-even point is the age you would need to live, so the wait is worth it.

In other words, as long as you expect to live past the age of 81, you will receive more overall benefits. Larger and fewer checks will outweigh the number of smaller and more frequent checks you will receive if you order earlier.

This is also important because your health care costs after age 80 are likely to be higher, so the extra income can make a big difference.

2. You plan to continue working

Many Americans plan to continue working beyond their usual retirement age. A 2021 Cision survey found that nearly 33% of older Americans plan to continue working well into their 70s.

As life expectancy continues to rise, it is likely that many Americans plan to work throughout their 60s. In this case, it makes a lot of sense to delay getting Social Security benefits until 70 because your benefits can be penalized by continuing to work.

If you are below full retirement age, the Social Security Administration deducts $1 for every $2 of annual income you earn over $1,560. The minimum is $51,960 if you reach full retirement age that year, and the deduction is $1 for every $3 of earnings. Plus, you can pay higher taxes on Social Security benefits since you get temporary income You’ll be higher while you’re still working.

While there are times it might make sense to take it social Security While you’re still employed, in general, it’s best to wait until you retire fully or at least make less than $1,560 to claim your benefits.

3. You do not need additional income

In my opinion, the number one reason for taking Social Security benefits early is because you need the income. But if you don’t need the extra income to continue living comfortably, it’s probably best to delay getting your benefits.

If you plan appropriately for retirement, you probably have enough monthly income from retirement accounts like yours 401(k)And the pensionor Ruth Iran To cover your expenses and the lifestyle you want.

If this is the case, you should almost certainly wait until age 70 to maximize the monthly benefits (assuming you have a long life expectancy). After all, you can get approximately 60% more cash each month by waiting (assuming your full retirement age is $1,500, the benefit at age 62 would be 30% less or $1,050. Maturity at $70 would be 120% or $1,800, so $1,050 / $1,800 = 58%).

As your life slows down, this extra monthly income will provide a security blanket and peace of mind so you can focus on spending time doing the things that matter most to you, rather than focusing on finances.

The $18,984 Social Security bonus is totally overlooked by most retirees

If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known "Social Security secrets" can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.

Motley Fool has a profile Disclosure Policy.

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Should I invest in an automated advisor? | Smart Change: Personal Finance

(Javier Simon)

Want to jump into the investing world, but aren’t sure about picking out your stocks and managing your own portfolio? An automated advisor can do all of that for you.

A robo-advisor is a digital platform that uses computer algorithms to build and manage a diversified portfolio based on your risk tolerance, financial goals, and other personal factors. It also automatically rebalances your portfolio based on market conditions and your investment objectives. While this sounds neat, a bot advisor can pose some significant risks. Before you invest, you need to weigh the pros and cons.

Benefits of an automated advisor

The popularity of bot advisors continues to grow. According to a study by international consultancy Deloitte, assets under management with the support of robo advisors could grow to more than $16 trillion by 2025 — about three times that of BlackRock, the world’s largest asset manager. In fact, robo-advisors may offer several features that will appeal to investors looking for a laissez-faire, no-hassle approach.

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costsA human financial advisor may charge a fee for assets under management (AUM) of 1% or higher. The Robo-Advisor’s AUM fee can range from 0% to 0.40%. To put that into perspective, the 1% annual AUM fee on an investment of $10,000 goes up to $100. The 0.25% AUM fee on an investment of $10,000 is just $25 per year.

diversification: Most of the bot advisors provide you with a questionnaire about your financial goals, risk tolerance and more. The algorithm uses these answers to recommend an investment mix.

Automatic rebalancingMarket conditions can shake up your investment mix, and may leave you too focused on one asset class — leaving you exposed to significant risks in the event of a downturn. When this happens, automated advisors rebalance your portfolio back to its original investment mix, sometimes by selling investments that have gone up and using the proceeds to buy those that have gone down.

Image source: Getty Images

The downside of robo-advisors

Despite the hype, bot consultants have their potential drawbacks:

hidden costs: Although bot advisors charge much lower management fees than traditional advisors, your money is still swallowed up by Expense ratios Or the fees charged by the funds in your wallet. Some may argue that you can simply open a file Discount brokerage account And invest in these funds yourself, completely avoiding AUM fees. There are plenty of online asset allocators that can recommend a customized investment mix, similar to how an automated advisor uses a survey.

fluctuating fees: Some bot advisors may increase their AUM fee as your balance increases. The more you invest with them, the larger the stake they take.

A little human interaction: If you’re on a paid plan or pay an extra fee, some bot advisors give you access to financial planners who can help you achieve other financial goals like paying off high-interest debt. But many plans do not provide access to human advisors at all. For those looking for a hybrid service that allows you to talk to a human consultant when you want to, your options may be limited.

Is an automated advisor right for me?

If you are comfortable with handing investment management over to advanced algorithms and specialists, and accepting limited investment options for potentially low fees, then an automated advisor may be in your pocket.

But if you are experienced or have little time to build your investment acumen, building and managing your own portfolio may be a better bet.

The $18,984 Social Security bonus is totally overlooked by most retirees

If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known "Social Security secrets" can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.

The fraudulent shareholder Javier Simon has no financial position in any of the companies mentioned. Motley Fool has a profile Disclosure Policy.

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Earn $300 in Quarterly Retirement Profits in 3 Easy Steps | personal financing

Generating passive income through dividends is especially important these days, as the stock market has had negative returns for the better part of the year now. But perhaps it’s even more important in retirement, when that extra income can come in handy. It can definitely give you some money to spend to supplement retirement accounts or Social Security checks.

Here are three steps to earning about $300 per quarter, or $100 per month, in dividend income.

Step 1: Find high-yield stocks with stable dividends

Dividend yield is the percentage of the stock price that a company pays in dividends. The average dividend yield for the S&P 500 is around 1.7% right now. In general, the yield that exceeds that is considered very good. To determine if a dividend is sustainable, the payout ratio – the percentage of dividends used to pay dividends – must be less than 50% in most cases.

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Often Best Dividends They are those of large, well-established firms that are among the leaders in their industries. Many of these companies have stable profits and a commitment to maintain or increase their profits. A good place to look for these stocks is on the Dividend Aristocrats list, which are companies that have increased annual dividends at least 25 years in a row. It’s not the only source, but it’s definitely a good place to start.

Step 2: Build your portfolio of dividend stocks

So, with these metrics in mind, the next step is to develop a portfolio of stocks that are poised to generate consistent, high-return passive income in retirement. For the purpose of this assumption, let’s extract from a list Distributed Aristocrats And identify some solid dividend stocks.

One is the asset manager T. Rowe Price Group (NASDAQ: TROW), which has a return of 3.99% and a quarterly dividend of $1.20, with a payout ratio of 36%. Its dividend has increased for 36 consecutive years. Another company is the pharmaceutical company Abvi (NYSE: ABBV), which has a return of 3.75% and a quarterly dividend of $1.41, with a payout ratio of 42%. AbbVie has increased its dividend for 50 consecutive years.

Each of these stocks have above-average returns, manageable payout ratios, and a long history of supporting their dividends, as well as being leaders in their industries. It should also be noted that AbbVie is up 12% year-to-date and has posted an average annual return of 16% over the past 10 years. T. Rowe’s price is down 40% since the start of the year, but all asset managers are struggling in this bear market. However, T. Rowe Price has generated an average annual return of 7% over the past 10 years and has virtually no debt, making it a reliable dividend payer.

Step 3: Make a plan

If your idea is born passive income When you retire, it’s important to have a strategy for getting there. How much do you need to invest in these stocks to make a significant portion of the income? Let’s say you invest $15,000 in both of these stocks. T. Rowe Price is trading at around $117 per share, so you can buy approximately 130 shares for just over $15,000. AbbVie is trading for $153 per share, so you can get 98 shares for as little as $15,000.

For T. Rowe Price, 130 shares at $1.20 per share would generate approximately $156 per quarter, while for AbbVie, 98 shares at $1.41 per share would earn approximately $138 per quarter. That calculates to about $294 per quarter, and $98 per month.

Keep in mind that these stocks will also generate increased capital, not just dividend income, so that the investment grows over time. T. Rowe Price has posted an annual return of 7% for the past 10 years, while AbbVie has posted an average annual return of 16%. So, you are not only getting passive income, but you are also getting solid returns that you can utilize when you need it.

10 stocks we like better than T. Rowe Price Group

When our award-winning analyst team has stock advice, they can pay to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Stock AdvisorThe market tripled. *

They just revealed what they think Top ten stocks For investors to buy now… And the T. Rowe Price Group was not one of them! That’s right – they think these 10 stocks are the best buys.

*Stock Advisor returns from June 2, 2022

Dave Kowalski He has no position in any of the mentioned shares. The Motley Fool does not have a position in any of the stocks mentioned. Motley Fool has a profile Disclosure Policy.

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Claim Social Security at 62? You may regret it Personal Finance

(Selina Marangian)

One day, you’ll likely be among the tens of millions of Americans who collect Social Security (65 million, as of 2021). How much will you collect? Well, the answer to that is different for each of us, and it mostly depends on how much we’ve earned in our working lives – and also to a greater degree when we start collecting our benefits.

We can start compiling as early as age 62, and most people start compiling around age 62 or 63. There are good reasons not to do this – as well as some arguments in favor of it. Here’s a closer look at why you might regret claiming at 62 — followed by some reasons that might make sense to you.

Image source: Getty Images.

1. You will end up with smaller checks

Most of us havefull retirement age“Where we can start to collect the full benefits that we are entitled to, based on our earnings history, and for most of us, it’s 66 or 67. For every year before the full retirement age that you get your benefits, it will shrink specifically, you’ll get About 70% to 75% of your full benefits if you start collecting at age 62.

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This isn’t ideal, but it’s also not as bad as it sounds – after all, while the checks may be smaller, you’ll collect a lot more in total. For those who live moderately long lives, there won’t be much difference in the total benefits received regardless of when benefits start to be provided.

2. Pretending too soon can ruin a smart matrimonial strategy

However, you should think about the bigger picture before deciding when to start collecting your benefits. For example, married people may benefit most from Social Security by coordinating when each of them begins. While both of you will enjoy two benefits checks each month, it’s possible that at some point, one of you will go — and then only one will be arriving. The rules allow you to collect any greater benefit. So it’s worth trying to check at least one of your benefits as closely as possible.

A good way to maximize your benefits is to delay the start of earning it – until age 70. If the spouse with the largest earnings delays until the age of 70, this can greatly help the lower-income earner, if he or she is a surviving spouse in the future.

3. If you plan to continue working, your benefits may diminish

Another consideration is if you Plan to continue working After age 62. If you start collecting Social Security and then also work, if you earn more than a certain amount, the Social Security Administration (SSA) may cut your benefits. As he explains:

If you’re under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2022, that limit is $5,660.

In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different threshold. In 2022, your maximum earnings are $51,960. We only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year.

This may sound horrible, but once you reach your full retirement age, the SSA will stop withholding benefits and will recalculate your benefits, given what was withheld. So you will get at least some of the retained benefits. However, it may be best not to start collecting these benefits early if you plan to continue working for much longer.

on the other side…

Despite the above reasons, there be Some reasons why you might want to start collecting files Social Security benefits early. For example:

  • You don’t know how long you will live. If you end up waiting until age 70 to collect the money and then die at age 72, you won’t be out much of Social Security. Think a little about your health and how long your relatives lived. If you have a good chance of living a very long life, delaying as long as possible may be best.
  • Perhaps you can afford to retire early. Many people start reaping the benefits early because they have to. They may have lost their jobs or for whatever reason they simply need this income ASAP. Many of those who can afford to delay should start collecting their benefits, but if you do a great job saving and investing for retirement and can afford to retire early, starting early can make sense.

The decision on when to start collecting Social Security benefits will be different for most of us. Take some time to learn more and think about everything before taking any actions, so that you can get as much out of the program as possible.

The $18,984 Social Security bonus is totally overlooked by most retirees

If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known "Social Security secrets" can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.

Motley Fool has a profile Disclosure Policy.

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How Private Equity Can Teach You To Resist Recessions | personal financing

(Caroline Hartley)

Private equity (PE) investments are not publicly traded. With money pooled from institutional and individual investors, groups buy private equity in companies they want to fix and reverse — and hopefully make a huge profit. Since this investment category became popular in the 1970s and 1980s, the long-term personal investment approach to investing has typically outperformed other sectors during the downturn, generating some of its best returns after the recession. Here’s how acting like a private equity can help you weather tough market spots.

How do private equity handle bad markets

Private equity firms stick to a long-term investment strategy, averaging around five years. They keep investing during turbulent times, and quickly do enough due diligence (will this company add value?) to work out the kind of short-term buying opportunities that economic bottoms create. By buying steadily when other investors are walking away, PE is getting promising assets at a deeper discount.

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Image source: Getty Images.

Like private equity firms, individual investors can also pursue long-term strategic decisions. Sticking to a regular investment schedule and staying diversified, even in a volatile market, provides investors with an opportunity to buy into solid companies that may have simply been dragged into tempting values ​​alongside the rest of the market.

Additionally, private equity groups cannot cash out their investments quickly or easily. This prevents private equity firms from selling out of panic; They tend to stick with their investments through tough markets. Public market investors may benefit from the same patience and discipline.

What private equity can and (maybe) not do

Private equity funds know how to keep cash on hand in a variety of economic climates, giving them plenty of "dry powder" to use for dealing deals. If they need the money to seize a short-term opportunity, they don’t necessarily have to worry about borrowing when interest rates are higher. This strategy can be difficult for individual investors to imitate, and it requires planning (tracking income, expenses, and savings). But if you have low debt, and set aside a cash fund that you can tap into when you need it, you can follow PE to act quickly when opportunity knocks.

Private equity firms also have access to experienced and experienced people. Focused teams, value creation and sector professionals who work exclusively in a portfolio can analyze market cycles and find opportunities that may not be obvious to the average investor. Investors, this is where they pay to access knowledge; It is important to do your research and due diligence before jumping into investing.

Why private equity may not always win

Recently, the number of private equity investment opportunities has dwindled, and the values ​​at which private equity groups sell companies have declined, with further declines likely in the coming months. It remains to be seen if PE will once again overcome this downturn, and maintain its overall outperformance compared to the general markets.

In the meantime, try not to act on your fears during the economic downturn. Instead, take the same steps that have seen private equity during previous stock market storms: focus on the long-term, stick to the investments you believe in, and look for new opportunities when the market is trading at a discount.

The $18,984 Social Security Bonus Most Retirees Totally Forgot

If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known "Social Security secrets" can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.

Motley Fool has a profile Disclosure Policy.

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Mega Millions: How the Billion Dollar Prize Works in Reality | personal financing

Taryn Vanoff, Nerd Wallet

The Mega Millions jackpot swelled to an estimated $1.02 billion before the next draw on Friday, July 29. A billion dollars is no easy feat, and it has only happened twice before in the history of Mega Millions.

If you want a chance to win the jackpot, here’s what you need to know.

How to buy a Mega Millions lottery ticket

Mega Millions can be played in 45 US states, as well as Washington, DC and the US Virgin Islands. Players can buy as many tickets for $2 as they want. Each ticket requires you to choose five numbers between 1 and 70, and a sixth number between 1 and 25 (or you can let the lottery people generate the numbers for you). The jackpot goes to the person (or people) who correctly chooses all six numbers.

The odds of doing so are roughly 1 in 303 million.

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Although it is a national game, each participating country has its own rules on how to claim a reward. In fact, the length of time you have to file your claim can range from 90 days to a year from when the numbers are drawn. Be sure to check the rules in the country where you purchased your ticket.

How much can you earn?

Every Mega Millions jackpot winner has the option to take cash now all at once, all at once or receive a significant portion of the winnings annually for 30 years.

For the $1.02 billion jackpot, the cash option is $602.5 million.

If you take the annuity option instead, you could get close to $15.3 million for the down payment. Then each one after that increases by 5%. If you die before all the annual payments are made, the remainder will be sent to your heirs.

Each option has its pros and cons, said Lisa Kirchenbauer — founder and president of Omega Wealth Management in Arlington, Va., and a certified financial planner.

Kirschenbauer also said that anyone finds himself Suddenly rich It should form a team of professionals, including a lawyer, accountant, and financial planner.

“Your team will help you decide which option is best for you,” she said. "It’s not a one-size-fits-all decision."

How are lottery winnings taxed

If you win a billion dollars in the lottery, you definitely owe federal income tax on it. To start, according to the IRS website, 24% of your earnings are withheld. How much it depends on whether you go for the cash or annuity option, since you only pay taxes on what you receive in a given year.

If you take the cash all at once — remember, that’s about $602.5 million — you’ll see $144.6 million taken off the top, leaving you with $457.9 million.

In April, you will likely owe additional federal income taxes, as well as state income taxes, depending on where you live.

What do you do if you win

While it’s something we may have all dreamed of, no one is ready to win the jackpot. If you do, protect your ticket. Anyone who owns a winning lottery ticket can apply for the prize.

Next, consider anonymity. Each state has its own laws about whether lottery winners should be publicly disclosed. Keeping your name out of the news and telling as few people as possible protects you from scammers and long-lost “friends” who want to call back.

The key, Kirschenbauer said, is slowing down. "Don’t start spending money before you have time to plan and think."

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3 times debt can be a useful tool | Smart Change: Personal Finance

Sarah Rathner

In some corners of the world of personal financial advice, getting into debt is the worst thing you can do. And yes, some forms of debt—particularly those that charge high interest rates—can keep you locked in a money indebted cycle for years.

With that said, there are times when borrowing serves a purpose in your overall financial picture. Debt is not always bad, although there is always a risk of getting stuck in your head. It is simply a tool that you can use to take on a very large purchase without draining your savings.

"I think it’s very important that people don’t fear debt, but instead view it as something you can use to your advantage," says Kara Duckworth, certified financial planner and managing director of customer experience at Mercer Advisors.

Here are some examples of when the ability to borrow money could come in handy.

People also read…

for something that might be worth more

Debt is often categorized as good or baddepending on why you are borrowing money and how much you will pay in interest.

“Good debt can help you move forward with your career and life,” says Mark Reyes, certified financial planner and senior manager of financial aid at Albert Financial Services. "On the other hand, bad debt can prevent you from achieving your goals."

Mortgages are often cited as an example of good debt, as the value of a home can go up. “It’s not bad debt; you’re going to put a roof over your head,” says Bill Hampton, certified financial education coach and CEO of Hampton Tax and Financial Services in Atlanta. Of course, borrowing is more than you can afford or not understand. loan terms It can cause financial risks.

Student loans are another generally accepted example of good debt, since your education can boost your earning potential throughout your life. According to Hampton, “You will be in debt for a number of years, but it will get you a higher paying job. But if your major does not support your debt, it may hold you back.”

To finance a large purchase

Now for the bad debt: credit cards. Not only do they charge high interest rates, but you can continue to make their purchases even if you still owe money from previous months. It’s easy to end up with a balance that keeps growing, no matter how much you try to shake it off.

However, some credit cards They offer interest-free promotions that you can use for large purchases. These promotions allow you to spread the cost over several months, often 12 months or more, depending on the card. Make sure your budget allows you to pay it in the promotional time frame, though – before the interest starts.

If you have an existing debt, balance transfer cards allow you to transfer that debt and not pay any interest for months. But as always, make sure you understand the terms of the card you’re using – you’ll likely pay a transfer fee, and the interest rate will go up again once the promotion ends.

Once you own a home, borrow against its value in the form of a loan to buy a home or Home Ownership Credit Limit – or HELOC – can save money for a home renovation. Homeowners can choose to do this instead of putting renewal costs on a credit card that charges a higher interest rate.

"Depending on how much stock a person has and depending on their specific situation, it may be best to take advantage of that rather than a credit card or personal loan," says Reyes. "It’s kind of the lesser of two evils."

To meet unexpected costs

I’ve heard the lecture before. You must have emergency savings. But here’s the thing about emergencies – they happen randomly, sometimes all at once, whether or not you’re able to save up extra cash.

These are the moments when you may have to make the best, least ideal decision, and that can mean taking on debt. HELOCs and personal loans may be a low-interest way to borrow money to cover an emergency, but credit cards can also serve as a backup source of emergency financing.

If emergency expenses push you into credit card debt, Hampton recommends making a plan to pay that balance off on a few paychecks. You can also take other actions to lower the cost of your debt, such as transferring the debt to a balance transfer card or seeing if your credit card company will meet you halfway.

"Consider calling your credit card company and trying to negotiate a lower interest rate than what you’re being charged," Reyes says. "It’s not always successful and it’s not likely, but it’s worth a try."

This article was written by NerdWallet and originally published by the Associated Press.

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3 times debt can be a useful tool | Smart Change: Personal Finance

Sarah Rathner

In some corners of the world of personal financial advice, getting into debt is the worst thing you can do. And yes, some forms of debt—particularly those that charge high interest rates—can keep you locked in a money indebted cycle for years.

With that said, there are times when borrowing serves a purpose in your overall financial picture. Debt is not always bad, although there is always a risk of getting stuck in your head. It is simply a tool that you can use to take on a very large purchase without draining your savings.

"I think it’s very important that people don’t fear debt, but instead view it as something you can use to your advantage," says Kara Duckworth, certified financial planner and managing director of customer experience at Mercer Advisors.

Here are some examples of when the ability to borrow money could come in handy.

People also read…

for something that might be worth more

Debt is often categorized as good or baddepending on why you are borrowing money and how much you will pay in interest.

“Good debt can help you move forward with your career and life,” says Mark Reyes, certified financial planner and senior manager of financial aid at Albert Financial Services. "On the other hand, bad debt can prevent you from achieving your goals."

Mortgages are often cited as an example of good debt, as the value of a home can go up. “It’s not bad debt; you’re going to put a roof over your head,” says Bill Hampton, certified financial education coach and CEO of Hampton Tax and Financial Services in Atlanta. Of course, borrowing is more than you can afford or not understand. loan terms It can cause financial risks.

Student loans are another generally accepted example of good debt, since your education can boost your earning potential throughout your life. According to Hampton, “You will be in debt for a number of years, but it will get you a higher paying job. But if your major does not support your debt, it may hold you back.”

To finance a large purchase

Now for the bad debt: credit cards. Not only do they charge high interest rates, but you can continue to make their purchases even if you still owe money from previous months. It’s easy to end up with a balance that keeps growing, no matter how much you try to shake it off.

However, some credit cards They offer interest-free promotions that you can use for large purchases. These promotions allow you to spread the cost over several months, often 12 months or more, depending on the card. Make sure your budget allows you to pay it in the promotional time frame, though – before the interest starts.

If you have an existing debt, balance transfer cards allow you to transfer that debt and not pay any interest for months. But as always, make sure you understand the terms of the card you’re using – you’ll likely pay a transfer fee, and the interest rate will go up again once the promotion ends.

Once you own a home, borrow against its value in the form of a loan to buy a home or Home Ownership Credit Limit – or HELOC – can save money for a home renovation. Homeowners can choose to do this instead of putting renewal costs on a credit card that charges a higher interest rate.

"Depending on how much stock a person has and depending on their specific situation, it may be best to take advantage of that rather than a credit card or personal loan," says Reyes. "It’s kind of the lesser of two evils."

To meet unexpected costs

I’ve heard the lecture before. You must have emergency savings. But here’s the thing about emergencies – they happen randomly, sometimes all at once, whether or not you’re able to save up extra cash.

These are the moments when you may have to make the best, least ideal decision, and that can mean taking on debt. HELOCs and personal loans may be a low-interest way to borrow money to cover an emergency, but credit cards can also serve as a backup source of emergency financing.

If emergency expenses push you into credit card debt, Hampton recommends making a plan to pay that balance off on a few paychecks. You can also take other actions to lower the cost of your debt, such as transferring the debt to a balance transfer card or seeing if your credit card company will meet you halfway.

"Consider calling your credit card company and trying to negotiate a lower interest rate than what you’re being charged," Reyes says. "It’s not always successful and it’s not likely, but it’s worth a try."

This article was written by NerdWallet and originally published by the Associated Press.

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2 Things to Watch out for with ESG Fund Investing | Smart Change: Personal Finance

(Javier Simon)

If you want to invest in companies that share your values, consider ESG funds. They aim to invest in companies that are generally environmentally friendly, socially responsible and ethically governed. That sounds cool – but before you jump in on it Investing in ESG fundsYou will need to face some major risks.

Not all environmental, social, and governance factors are the same

Some companies may not adhere to the stated ESG principles. One analysis by the Climate Change Research Center InfluenceMap found that 71% of ESG equity funds invest in companies that fall short of compliance with the Paris Agreement, a legally binding UN treaty that calls on countries to reduce greenhouse gas emissions.

People also read…

But that doesn’t mean there aren’t a few gems in the mix. The InfluenceMap study found that the funds it analyzed had scores ranging from -42% to +90%.

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ESG funds may also fail to align with your values. Some highly rated ESG funds may invest in fossil fuel companies. Stocks of other ingredients may have strong environmental records, but lack adequate safety policies in place for their workers.

You need to scrutinize ESG funds to ensure they own companies that reflect your principles. Here are some of the sources you can use to rate ESG funds and the companies they track:

  • MSCI ESG Research and Climate Tool and the Environmental, Social and Sustainable Corporate Governance Risk Rating ToolThere are no globally recognized ESG classification standards, but these are two of the most common ESG classification tools. You can use these to research companies and check ESG’s track records.
  • ethical consumerFounded in 1989, this organization provides free sustainability reports covering more than 40,000 companies, shedding light on controversial or environmentally hazardous business practices.
  • The SEC EDGAR Website: Here, you can search for file type DEF 14A for different companies to access proxy data. The Securities and Exchange Commission requires companies to submit these documents, which present the main points to be discussed at private shareholder meetings. These can give you a glimpse of changes to boards of directors, directors' salaries, and other governance information.
  • Corporate Websites: Explore press releases and investor relations pages to see if companies can back up their ESG claims with sound evidence.
  • Fund prospectus: In addition to providing important information about the fund’s holdings and past performance, you can also use this document to find information about the objectives of the fund and its management team.

But even if you can prove that an ESG fund or company really aligns with your values, you can’t forget the basics.

Green boxes don’t always make it green

Certainly, it is a good idea to support a company that is doing everything they can to protect our planet and its inhabitants. But if you are investing in these companies, you want to make sure that they can generate consistent returns. The ability of ESG funds to do this is not always clear.

a morning star (NASDAQ: MORN) The report found that as of June 2022, 65% of US sustainable equity funds are at the bottom of Morningstar Category’s year-to-date performance ratings. But this trend may not be directly influenced by the concept of ESG itself. According to a Morningstar report, many ESG funds have significant weight in technology stocks, which have faced some downturns this year. However, ESG funds may also paint a better picture in the long run. The same report indicated that over the long term, 53% of US equity ESG funds made their way into the top half of their class.

In general, you need to carefully engage in your due diligence when selecting ESG funds. Make sure the companies they invest in truly reflect your values ​​and have the foundations in place to support reliable performance expectations. You can look at the fund’s online prospectus to examine its returns over the years, for example.

And if you’re not satisfied with that money, you can always create your own ESG-driven wallet ESG stock selection One of the reputable companies in this field.

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