Fundrise vs Betterment: Which Is The Better Investment?

Investing Simple is affiliated with Fundrise and Betterment. This relationship does not influence our opinion of these platforms.

As investors, we have countless options when it comes to the platforms we use to invest our hard earned money. Over the past decade, thousands of different investing and trading platforms have emerged. It can be very overwhelming to the average investor looking to make an informed decision. This is one of the main reasons why we started our blog Investing Simple. We help investors decide which platforms may fit their investment style and personal preferences. In this post, we are going to review and compare two prominent platforms; Fundrise and Betterment.

What Is Fundrise?

Fundrise is a new investing platform that allows everyday investors to invest in private real estate projects traditionally limited to high net worth individuals or accredited investors. Using the Fundrise real estate investing platform, you have the ability to have investment exposure to both commercial and residential real estate.

Here is our full review of the Fundrise investment platform.

How Does Fundrise Work?

Fundrise is a crowdfunded real estate investing platform. Similar to real estate investment trusts or partnerships, all the investors pool their money together to purchase real estate assets. These assets then produce income and/or growth and historically have provided investors with a positive return on their portion of the investment over time.

Real estate is traditionally a high barrier to entry investment, but crowdfunded real estate platforms like Fundrise have allowed average retail investors to get exposure to this asset class. You can get started with Fundrise with as little as $500!

Fundrise takes a new approach to the traditional Real Estate Investment Trust (REIT) structure. Through the use of technology, Fundrise makes it easy to fund your account, check in on projects and choose your portfolio. By leveraging a new regulation, Fundrise gives the average investor access to commercial and residential real estate with as little as $500.

Click here to get started with Fundrise!

The Fundrise platform offers a variety of benefits such as low account minimums and quarterly redemption periods. However, investors should understand the liquidity and time horizon of an investment in the Fundrise platform. We will discuss this in further detail throughout the article.

fundrise review investing simple — Fundrise Real Estate Projects

Fundrise offers plans to invest in different types of real estate such as income producing rental properties or growth oriented real estate developments. Fundrise offers different investment plans based on your investment objectives. You can keep track of Fundrise real estate projects within your account. Fundrise will also notify you about major developments with their projects.

fundrise screenshot investingsimple.blog — Fundrise Project Addition

It is important to understand that Fundrise is a private real estate investment. The Fundrise eREITs and eFunds can only be bought and sold through this platform. They are not publicly traded on a stock exchange like a publicly traded REIT.

Fundrise Investment Options & Portfolios

Fundrise allows you to choose from four professionally built real estate portfolios based on your risk and investment preferences. Some portfolios are geared towards cash flow and others focused on the growth of the underlying assets. If you invest the minimum of $500, you will be placed in the starter portfolio. The other three advanced plans require a minimum investment of $1,000.

fundrise investing simple5 — Fundrise Portfolio Options

Supplemental Income: This portfolio is geared toward income-producing real estate. Investors will earn returns primarily through dividends from cash flow producing real estate. Dividends are generated through rental and interest payments in proportion to your share of the fund.

Balanced Investing: This portfolio offers a blend of 50% growth and 50% income-oriented investments. The balanced investing portfolio invests in a blend of eREITs and eFunds offered by Fundrise. The goal for this portfolio is for a balance of income-generating real estate, as well as real estate that is appreciating in value.

Long Term Growth: The goal of this portfolio is to generate returns primarily from asset appreciation. This portfolio aims to purchase high growth potential real estate and generate returns mostly from the sale of the underlying properties. This includes buying property and performing renovations in order to sell the asset for a gain later.

Fundrise Technology: eREIT & eFUND

Each portfolio consists of eREITs and eFunds designed by Fundrise. These investments are set up as real estate investment trusts or partnerships and they are managed by Fundrise.

An eREIT will produce income for your portfolio in the form of dividends. Dividends are earned from the rent payments from the underlying apartment and commercial leases owned within the eREIT as well as interest payments from underlying real estate debt investments owned by Fundrise.

An eFund is a partnership created by Fundrise to be treated differently for tax reasons and to provide greater investment flexibility. Partnerships have the advantage of avoiding the double taxation of normal C-Corps. eFunds are designed in a similar way to eREITs where there is a pool of real estate investments split into shares and sold to investors. Where eREITs are designed to generate income, eFunds are geared towards growth.

Fundrise Investment Liquidity

Fundrise uses the funds you invest to purchase real estate. For this reason, there is a 60 day waiting period for withdrawing funds. There are also quarterly redemption periods.

This is why it is important to understand what you are investing in when you invest with Fundrise. Investors should aim for a long-term investment of at least 5 years in duration when investing with Fundrise. Real estate is not an investment with high liquidity and it is not for everyone!

It is important that investors understand that liquidity and distributions are never guaranteed.

Fundrise Historical Returns

Past performance does not guarantee future returns. All investing involves risk, including the potential loss of principle.

fundrise investing simple 1 — Fundrise Historical Performance

Fundrise Fees

Fundrise charges a fee of 1% per year. They do not charge any other hidden fees and there is no front load fee with Fundrise. The returns shown above are the returns after Fundrise collects the 1% fee.

Pros of Investing With Fundrise

The minimum to get started with the Starter Portfolio is $500.
Small retail investors are able to access private real estate investments.
Since this is a non traded REIT, it may be less correlated with the overall market.
Fundrise has a transparent fee of 1% per year.
This investment allows you to earn compound interest, with the option of automatically reinvesting quarterly dividends using a drip (Dividend Reinvestment Plan).
Fundrise does not have a minimum net worth or income requirement like most private investment funds do.
This is a 100% passive real estate investment.
Fundrise gives you diversified exposure to real estate.
Fundrise supports retirement accounts.
Monthly redemption periods eliminate the temptation for panic selling.

Cons of Investing With Fundrise

Liquidity is never guaranteed. During a downturn, liquidity may not be available as many investors will rush to sell and buyers may be few and far between.
Distributions (dividends) are never guaranteed.
Distributions (dividends) are taxed as ordinary income rather than capital gain rates.
Fundrise has a limited track record of four years and not a long investment history.

Fundrise: The Bottom Line

In most cases, Fundrise is a great platform for passive investors who are looking to gain access to private real estate markets. Fundrise is also a good option for investors who are looking to diversify asset classes and have less correlation to the overall stock market.

Since you can only liquidate your positions quarterly, investors may be less tempted to actively trade in and out of positions. You can also automate your dividend reinvestment plan, allowing compound interest to build up in your account.

In most cases, Fundrise is best for investors with a minimum 5 year time horizon. Real estate is not a highly liquid investment and inexperienced investors need to take this into consideration. While Fundrise does offer a 90-day satisfaction guarantee, you should not invest if you have a short-term investing mentality.

Click here to get started with Fundrise!

What Is Betterment?

Betterment is an online roboadvisor geared towards everyday investors who want automation of their investments paired with personalized financial advice. Through the use of technology, Betterment is able to offer management fees that are extremely competitive compared to the industry average. Refined investing strategies such as tax loss harvesting and smart rebalancing are some of the many features offered by Betterment.

investing simple betterment review — Betterment Home Page

Betterment also offers ongoing financial guidance. Depending on the plan, investors can have unlimited access to professional financial advice from CFP® professionals. Since Betterment and its professionals are fiduciary advisors, they must act in the clients best interest at all times. Betterment advisors have no incentive to sell products or funds hoping to make a commission off your purchase. A fiduciary duty is the legal obligation to act in the clients best interest at all times and is the highest level of customer care in the investment advisor community.

Here is our full review of the Betterment investment platform.

What Is A Robo Advisor?

A robo advisor is a new technology based financial advisor that advises clients and manages accounts with minimal human interaction. This is capable through the use of algorithms and technology. Financial advice is provided based on mathematical rules and programs. This results in a lower management fee and significant cost savings for the investor.

How Does Betterment Work?

Each Betterment account is tailored to the needs of the individual investor. When you open an account with Betterment, you will be guided through a questionnaire where Betterment will learn more about your goals and objectives.

Here is the process for every new investor using Betterment:

1. Learn about the investor. Using a series of questions, Betterment determines your current financial landscape. By understanding your goals, time horizon, and personality Betterment gets an overall picture of where you currently stand and what you are trying to accomplish financially.

2. Make recommendations. Once Betterment has an understanding of your overall financial picture, they will guide you through a path customized to your specific situation. Betterment will suggest portfolios geared towards your risk tolerance, time horizon, and investment objectives.

3. Invest using cutting edge technology. Using personalized portfolios of stock and bond ETFs, investing is streamlined so you don’t need to worry about the management of your investments. Betterment’s portfolios are focused around minimization of both investment fees and taxes.

Click here to get started with Betterment!

Screen Shot 2018-09-20 at 10.35.53 AM — Betterment Questionnaire

What Are The Betterment Investments?

Betterment uses exchange-traded funds (ETFs) to build the portfolios. ETFs are investment vehicles similar to mutual funds, but they trade on a major exchange like a stock.

ETFs have grown tremendously in popularity over the last 20 years in the investment community due to the low fees and high liquidity. ETFs provide diverse positions where one fund could be trading at $50 per share yet it can have hundreds of underlying holdings. ETFs allow you to invest in many different asset classes such as stocks, bonds, real estate, and commodities. By using ETFs, Betterment can construct cost-effective and diversified portfolios with ease.

Most of the ETFs in Betterment’s professionally built portfolios are from the Vanguard fund company. Vanguard is one of the most well known mutual fund and ETF companies. Known for very low fees and the invention of the index fund, Vanguard has dominated the fund industry with over $5 trillion in assets throughout its funds. Betterment uses Vanguard funds mostly because of their low expense ratios and excellent reputation.

Here are some of the Vanguard funds included throughout Betterment’s portfolios:

VTI – US Total Stock Market
VTV – US Large Cap Value
VOE – US Mid Cap Value
VBR – US Small Cap Value
VEA – Developed International
VWO – Emerging Market Stocks

Betterment also includes a number of bond funds offered by Vanguard. Each Betterment portfolio will consist of a collection of stocks and bonds.

Click here to get started with Betterment!

Betterment Custom Portfolios

Betterment also offers custom portfolios constructed by Goldman Sachs. The Goldman Sachs Smart Beta portfolio aims to provide a diversified portfolio strategy using a balance of actively and passively managed investments. Active portfolio management typically has the goal of beating the market, often associated with hedge funds and mutual funds. Passive management has the goal of generating market returns over the long term. Index investing and buy and hold strategies are associated with passive management.

Goldman’s Smart Beta uses a variety of factors to determine investment allocations across its portfolio. Some of these factors include equities consisting of good value, high quality, strong momentum and low volatility characteristics. Contrary to traditional portfolio allocations that are based on market cap weighted indices, Smart Beta uses a variety of rules based factors that determine allocations across the portfolio. The Smart Beta portfolio using a rules based methodology has a goal of beating the market over the long term.

Betterment also offers a professionally built portfolio created by BlackRock. The BlackRock Target Income portfolio is a 100% bond portfolio with the goal of capital preservation. This may be an ideal portfolio for someone who is looking for an income producing investment strategy versus a growth oriented strategy. This portfolio has no exposure to the stock market but can fluctuate in value as interest rates change. BlackRock strategically looks to provide higher yields by investing in long term bonds as well as higher risk bonds in this portfolio.

blackrock target income fund — BlackRock Target Income Portfolio

What Are The Betterment Fees?

Betterment has a strong focus on minimizing fees and expenses to investors. Betterment specifically chooses ETFs that have some of the lowest expense ratios. Betterment has no trading fees and no markups on prices. The only fees Betterment charges is a management fee of 0.25% to 0.40% depending on the investment plan. This fee structure is extremely low compared to traditional advisors and stock brokers.

	Betterment Premium	Betterment Digital
Management Fee	0.40%	0.25%
Minimim Balance	$100,000	$0
Automated Rebalancing	Yes	Yes
Tax Loss Harvesting	Yes	Yes
Unlimited Access CFP Professionals	Yes	No
Account Types	Taxable, Traditional IRA, Roth IRA, Trust	Taxable, Traditional IRA, Roth IRA, Trust

Betterment has recently made changes to its pricing structure. All account balances greater than $2M will be given a 0.10% marginal discount for the portion of their balance above $2M. Previously accounts with balances over $2 million had their fee cap out at $2 million so any assets above that amount would not be charged a fee. Betterment will continue to honor the $2 million fee cap for all existing Betterment customers, even if their current balance is less than $2 million.

For Betterment Digital, customers will pay 0.15% for the portion of the balance above $2,000,000.
For Betterment Premium, customers will pay 0.30% for the portion of the balance above $2,000,000.

Pricing as of 9/18/2018	Balances up to $2,000,000	Balances over $2,000,000
Digital	0.25%	0.15%
Premium	0.40%	0.30%

What Are The Features Of Betterment?

Financial Planning: Betterment Premium offers unlimited access to financial professionals. These professionals will assist you by making recommendations on how much to invest and provide guidance on asset allocation within your portfolio.

The Premium Plan also includes detailed advice on investments held outside of Betterment. Betterment Digital offers algorithm based financial planning with no human involvement. All Betterment plans offer some level of portfolio guidance.

investing simple betterment review 2 — Betterment Premium Financial Experts

Smart Rebalancing: Betterment offers smart rebalancing of your portfolio. This is offered to both premium and digital investors. Rebalancing of a portfolio should happen when your target weights of assets gets skewed.

For example, if you have a portfolio of 60% stocks and 40% bonds and the stocks increase in value. Now, you may be weighted at 70% stocks and 30% bonds. To tone down risk and return to your target allocation, you should rebalance and sell stocks and buy bonds to return to your 60/40 stock bond allocation.

Betterment’s version of smart rebalancing makes sure your positions are in their right allocation at all times.

Tax Loss Harvesting: Betterment offers a feature called tax loss harvesting which aims to minimize your taxes on capital gains. Betterment does this by selling securities that have underperformed in your portfolio and realizing a capital loss. This loss can be used to offset capital gains or ordinary income up to $3,000 per year.

Once the loss is realized, Betterment then purchases a similar security to replace the one you just sold in your portfolio. This way you avoid any wash sales which occur when you realize a loss on a security and purchase it back within 30 days. The government identifies wash sales in order to prevent tax loss harvesting. This tax loss harvesting is something that separates these automated platforms like Betterment from the traditional investment options.

Betterment also has the functionality of implementing tax loss harvesting across your accounts as well as your spouse’s accounts. Spousal tax loss harvesting will allow you to optimize your tax minimization strategies on one tax return.

betterment investing simple review tlh — Betterment Spousal Tax Loss Harvesting

Tax Coordinated Portfolio: Betterment uses a method of asset location to construct tax coordinated portfolios. This is accomplished by putting your highest taxed assets in your IRA first (where you have a tax shelter) then putting your lower taxed assets in your taxable brokerage account. Betterment claims this strategy could boost your return by 0.48% each year. You can set up a tax coordinated portfolio at any time on Betterment for no additional fee outside of the asset management fee.

Smart Saver: As interest rates remain extremely low in the current economic environment, interest rates on savings accounts are virtually non-existent. Betterment offers a solution to this issue by offering an alternative to a savings account.

The Betterment smart saver account yields 2.20% annually. This is significantly higher than most savings accounts. Betterment offers this feature while still providing liquidity. According to Betterment, you will have access to your funds in 4 to 5 business days.

investing simple betterment review smart saver — Betterment Smart Saver

Smart Deposit: Betterment offers a feature called smart deposit that will allow you to set a minimum amount of cash you would like in your bank account. Once your minimum is set, any amount above your minimum will be sent to Betterment and invested.

Say you set your bank account minimum at $5,000. Once your bank account balance is over $5,000 smart deposit will transfer any funds over this threshold to Betterment. Smart deposit in Betterment will allow you to maximize your invested capital while retaining a safety net in your bank account.

Retire Guide: This is a retirement planning tool offered by Betterment. You will input your current savings, projected budget, and retirement date to get a picture of where you stand in reaching your retirement goal.

Retire Guide will show you how to save, what accounts to utilize, and recommend any changes you need to make to reach your goal. This allows you to have an understanding of your projected financial position and budget when you retire.

Fractional Investing: Betterment also offers a unique feature called fractional investing. Fractional investing allows an investor to buy fractional shares of an ETF. For example, if you want to buy VTI which is trading at $150 per share and you only have $100 you could buy .67% of a share using Betterment’s fractional share investing. The advantage of using fractional shares allows an investor to be fully invested at all times. Fractional shares also provide for greater diversification as you will have more precise allocations across your portfolio at all times.

What Are The Pros Of Betterment?

Passive investing. Betterment is a set it and forget it investing platform. You do not need to worry about account maintenance. Betterment takes care of everything.
Automation. The entire investment process can be automated. You can automate contributions to your account that will automatically rebalance your portfolio upon contribution. Your investments are on autopilot!
See the big picture. Betterment allows you to link up all of your investment accounts and get an idea of what all of your investments are doing in one place.
Fiduciary responsibility. Betterment advisors are held under the fiduciary duty standard. This is the highest standard in the investment advisor community. This means the advisor is legally required to act in the client’s best interest at all times. Remember, this in person advisement is only offered through Betterment Premium.
Low fees. Betterment focuses on minimizing fees for investors. They do this by selecting low-cost ETFs that have low expense ratios and leveraging technology.
No minimum. You can open a Betterment Digital account with any amount of money. Betterment Premium requires a balance of $100,000 or more.

What Are The Cons Of Betterment?

No direct indexing. Some other investment accounts offer direct indexing or stock level tax loss harvesting. This is typically reserved for accounts with $500,000 invested or more. This allows direct ownership of individual stocks, not funds, which allows for more tax loss harvesting opportunities. Betterment does not offer this feature.
Too passive for some. If you are interested in being active in your selection of stocks or ETFs, Betterment is not for you. Betterment is for passive investors.
Limited to stocks and bonds. Your asset allocation is limited to stocks and bonds. You cannot invest in other assets like real estate or commodities through Betterment. It is important to note however that Betterment has stated that these assets added no value to portfolios that they tested.

Betterment: The Bottom Line

Betterment has revolutionized the brokerage industry through the use of technology. This has significantly lowered the barriers to entry to receiving high quality financial advice. Traditionally, you would need thousands if not tens of thousands of dollars to invest with an in-person financial advisor.

Now, you can get started with a robo advisor like Betterment with any amount that you have. Betterment is a long term investing platform for passive investors. If you are interested in short term trading, individual stock ownership or DIY investing Betterment is not for you.

Click here to get started with Betterment!

Fundrise vs Betterment

Fundrise and Betterment are both very different investing platforms. The Fundrise platform gives you the ability to invest in commercial and residential real estate. With a minimum balance of $500 to open an account, Fundrise gives the average investor an opportunity to invest in assets typically limited to high net worth individuals. By using technology and offering a user-friendly experience, Fundrise remains very transparent about any project developments or updates to their portfolios.

Betterment, on the other hand, offers a robo advised investing experience with the goal of creating a broad portfolio of stocks and bonds. The Betterment platform offers some of the most valuable investment features available today. Smart rebalancing, smart deposit, smart saver and advice from securities professionals are just some of the features that create tremendous value for investors.

When comparing the two platforms it is important to understand what your goal is as an investor. If you would like to own growth or income-producing real estate on a dynamic user-friendly platform, then Fundrise may be a good option for you. Fundrise gives you the ability to invest in real estate projects without having to outlay a huge amount of capital. If you are an investor with the goal of building a broad portfolio of stocks or bonds, then Betterment may be a great option for you. Betterment is one of the most dynamic robo advisors available today.

Click here to get started with Betterment!

Click here to get started with Fundrise!

8 Essential Tips To Save More Money In Your 20’s

Guest post from Ryan Reeves of Investing City.

Let’s face it. Saving money sucks. It’s not fun, it’s not cool, and it’s not easy. No one likes a cheap-skate right?

Regardless, saving money is important. It enables us to live the life we dream of and achieve the freedom we so desire.

But first, a story.

Delaying Gratification

Nearly 60 years ago, Walter Mischel and his team of Stanford psychologists, performed one of the most popular studies ever.

Here’s how it went.

Mischel tested hundreds of young children. The kids were told that they could either eat a marshmallow now or wait 15 minutes to receive two marshmallows. Then, the researcher would leave the fluffy dessert on the table and leave the room.

As you can imagine, the video footage of the kids is quite entertaining. Fidgeting, squirming, staring at the marshmallow.

The study seems innocent, but over a decade later, the results of the famed Marshmallow Experiment were eye-opening. The kids who delayed gratification and received two marshmallows went on to get better SAT scores, had lower levels of drug and alcohol abuse and were even healthier.

Further, the researchers followed up with the test subjects over 40 years later and the results were the same. The ones who delayed gratification as children were more likely to succeed in life.

Why do I tell this story?

Well, it’s the same way with money. By delaying gratification, we set ourselves up for success. At times, it is difficult to see this. But if we know “why” we need to save, it can helps us to actually do it.

As the philosopher Friedrich Nietzsche once said, “He who has a why to live can bear almost any how.”

I’d like to alter that a little, “He who has a why to save can bear almost any how.”

Here’s why you need to start saving now.

The Why Of Saving Money

The #1 investing secret is time. Not elaborate trading strategies or insane amounts of research. It’s time.

Let’s run through a scenario.

Picture this: Phil and Todd are new college graduates and best friends. They both end up getting great jobs at the same investment bank right out of school.

However, Phil knows about the power of compound interest so he saves as much as he can during the first year of work. Todd, on the other hand, doesn’t really care because it isn’t interest-ing (pun intended).

After expenses, Phil saves almost $11,000 during the first year, $10,733.80 to be exact. Todd doesn’t save anything because it is too difficult (he would’ve eaten the marshmallow immediately).

Phil puts $10,733.80 into the stock market. Todd, well, he just bought a new car.

Fast forward 30 years, both guys are 53 years old. Phil hasn’t put a penny more into the market since that first year after college. On the other hand, Todd wakes up one night in a sweat. He realizes he hasn’t thought about retirement at all. He was too busy trying to impress everyone with lavish vacations, European sports cars, and a ritzy zip code.

So he buckles down and decides he needs to start saving and investing as soon as possible. He makes quite a bit of money so he starts socking away $20,000 a year. And he does this for the next 20 years. In total, he saves $400,000.

Fast forward another 20 years, and both guys are 73.

Who do you think came out ahead?

Phil who put less than $11,000 dollars in the stock market? Or Todd, who saved and invested $20,000 a year for 20 years?

If both men received the same 10% returns over time, the results actually come out as a tie. Well, Phil will be 5 cents poorer.

Phil’s total at 73: $1,260,049.94
Todd’s total at 73: $1,260,049.99

Phil’s amount put into the market: $10,733.80
Todd’s amount put into the market: $400,000

Phil’s Results:

Screen Shot 2019-01-10 at 3.04.42 PM.png

Todd’s Results:

Screen Shot 2019-01-10 at 3.04.50 PM.png

There is so much financial advice circulating in the news and on blogs and on TV, but this lesson is really the only one you need to grasp. Be Phil, not Todd. In finance, rather than counseling, time heals. Let time do its thing.

But this can only happen if you start saving. NOW.

The more you save, the younger you are, the better off you will be. It’s that simple. The power of compound interest will take care of the rest. So now that we can see the “why” of saving money, let’s dive into the “how.”

The How Of Saving Money

Here is the part of the article where we zoom in and break the problem down into actionable steps so we can make daily progress.

Not to be Captain Obvious, but the key to saving money is not spending it. We’ll give some tips and tricks, but fundamentally, it’s that easy. Spending fewer dollars than you make is the only way money will accumulate.

Let me preface this with something important. There is more to life than money, so if you find yourself extremely miserable with no friends because you are doing so well at saving money, maybe you need to tone it down.

Ok, got that off my chest…

Let’s skip the chit-chat and dive right in. Here are eight underrated ways to save money.

1. Don’t eat out.

Eating out is fun and it is enticing. But it adds up. Eating 3 times a week at Chipotle could put you back about $30. Over a year, that’s $360. Nothing to sneeze at. As an added bonus, if you learn to cook, you can save money and have exactly the food you want.

2. Make your own fun.

A lot of times, we spend money on experiences; going out to the movies, bowling and
whatever else sounds fun. But there are so many ways to have a good time without spending money. We can play sports, games, or explore. Creativity wins you extra points!

3. Care less about what people think.

If you need to have the latest gadgets and the coolest shoes, you might not be cut out to save a lot of money. The good news is you can change. At the root of buying stuff for ourselves is caring too much what people think of us. We try to impress them by buying nice things. You know what is more impressive? Being kind and caring about people, not what they think.

4. Look for deals.

If you must spend money, make sure to do a little research to get the best deal you can. Some people take this really far and become professional coupon clippers (I kid you not). One about buying cheap stuff is that it can actually be a worse deal in the long term if it doesn’t last. Keep that in mind.

5. Walk or ride a bike more places.

Gas is a big expense, especially if you live in a city. While it may be impractical to ride your bike everywhere, try to do it whenever possible. You’ll get in great shape and save money in the process.

6. Be single.

I’m joking… partly. If your significant other guilts you into spending inordinate amounts of money on them, it might not be the healthiest relationship. While it’s unlikely you’re looking for relationship advice here, this can be a tell-tale sign. Your significant other should like you for you, not your money.

7. Don’t carry around cash.

Cash is dangerous because it is so easy to spend. Since you don’t see your bank account
number go down, it feels like Monopoly money. Instead, deposit all cash into your bank as soon as possible. By doing this, you will increase the friction it takes to spend money lowering the odds you will actually do it.

Some will find that it is actually BETTER to spend cash! By seeing the money leaving you hand, it gives you a better idea of how much money you are spending. Try them both and see which strategy works for you.

8. Increase your income.

Often, most financial blogs get into the nitty-gritty of saving money like we’ve done here. An underrates way to save more money is to keep your spending habits the same but make more money. You can do this by hustling (washing cars, cleaning, helping out), learning and implementing new skills, or investing smarter. By starting your own little business, you can make a nice chunk of change. You can walk dogs, do website design, cater, sell products online and so much more. It doesn’t have to be elaborate, just start something and learn as you go.

Conclusion: Final Thoughts

Though saving money isn’t fun, it will change your life. If you can wait for two marshmallows, you will increase your odds of living the life of your dreams exponentially.

One other tip that has worked well for myself and others is coming up with a monthly budget. Simply writing your expenses out on paper can help you to realize exactly where it is going!

Delay gratification. Remember “the why.” Be Phil, not Todd. And try out these eight tips for saving money.

You’ll be on your way to becoming a millionaire before you know it. If you’ve read all the way up until this part, it shows you really care about this. So I’d put my money on you!

Happy Saving,
Ryan Reeves

Ryan Reeves is CEO and founder of Investing City, a blog to help people invest better.

4 Best Investing Books Beginners Need To Read!

This article is a guest post from the blog Stoj Finance.

This list will provide you with some of the most popular and highly regarded investment books of all time. They will provide you with knowledge that will help you to invest with confidence. You will learn how Warren Buffett achieved average annual returns of 20.9% versus 9.9% for the market over a 50 year period. You will also learn how Benjamin Graham was able to achieve returns of 14.7% annually versus 12.2% for the market as a whole from 1936-1956 and much more.

Many of these books are dated. However, their principles and strategies remain relevant today. I have personally read all the books listed. I would not allow myself to provide you with a book recommendation without personally evaluating and assessing each book and the value contained within. We will begin with my favorite book, by Benjamin Graham.

Book #1: The Intelligent Investor: The Definitive Book On Value Investing

Author: Benjamin Graham

The Intelligent Investor.jpg

The Intelligent Investor is widely regarded as one of the best investing books of all time. Despite its original 1949 publish date, the information contained within is still relevant today. To quote Warren Buffett, it is “By far the best book on investing ever written.” This book covers areas of investing including: The past century of stock market history, general portfolio policies to follow, how you should interpret market fluctuations and much more. It provided me with the knowledge needed to independently select stocks with confidence.

As the name of the book would suggest, Graham employed a value investing approach. He pursued stocks which he believed were worth more than their current market quotation would suggest. Essentially, he would buy stocks trading at $0.50 that he believed had an intrinsic value of $1.00. This strategy awarded him with above average returns over his career (as discussed below), while providing safety of principle for himself and his clients.

Benjamin Graham, the author, was an extraordinary person. He attended Colombia Business School on a scholarship. (Colombia Business School currently holds the #7 position worldwide for its MBA program). Graham graduated from Colombia as the salutatorian of the class at the young age of 20.

As mentioned previously, he gained at least 14.7% annually for his clients versus 12.2% for the overall stock market. This became known as one of the best long-term track records in history. Warren Buffett, one of Graham’s most successful students, originally developed his investment philosophy around the principles Graham advised. Here is a resource for more information about how to invest like Graham.

Grab a copy of The Intelligent Investor here!

Book #2: The Warren Buffett Way

Author: Robert G. Hagstrom

The Warren Buffett Way.jpg

The Warren Buffett Way provides an insight into Buffett’s investment techniques and practices. It is a great read and if you would like to learn more about Warren Buffett and his investment methodology, there is no better place to look. Originally published in 1994, it contains updated accounts to ensure the contents remain relevant today.

Containing forewords from some of the greatest investors of all time, this is an essential book for new investors. That list includes Howard Marks, co-founder of Oaktree Capital Management (a global asset management firm with over US$122 billion in assets under management) and Peter Lynch, former mutual fund manager and philanthropist who averaged returns of 29.2% annually between 1977 and 1990.

The Warren Buffet Way is a comprehensive investment resource and Hagstrom has provided us with an in-depth insight into Buffett’s investment career. It details how he was able to turn $100 in 1957 into a personal net worth of over $80 billion today. Buffett is known for his impressive record of returns throughout his investment career. From 1964-2017, his holding company, Berkshire Hathaway, achieved average annual returns of 20.9%. Versus 9.9% (including dividends) for the S&P 500.

Hagstrom has provided us with an in-depth insight into some of Buffett’s largest and most significant investments and their outcomes. Companies such Coca-Cola and The Washington Post are included. Hagstrom has also explored less common areas of investing, including behavioral finance and the mathematics of focus investing.

The Warren Buffett Way will give you an insight into the techniques and strategies employed by one of the most successful stock market investors of all time.

The author, Robert G. Hagstrom, is the chief investment strategist and managing director for Legg Mason Investment Counsel. He has also authored other investment books including “Investing: The Last Liberal Art” and “The Essential Buffett: Timeless Principles for the New Economy.” This is a great buy for value investors and belongs on every serious investors shelf at home.

Grab a copy of The Warren Buffett Way here!

Book #3: Common Stocks And Uncommon Profits

Author: Phillip A. Fisher

Common Stocks And Uncommon Profits.jpg

Common Stocks and Uncommon Profits, originally published in 1958 and much like The Intelligent Investor, is a comprehensive investment resource. This book is a more compact guide on stock market investments. It contains topics including Fisher’s illustrious “scuttlebutt” strategy, what stocks to buy, when to buy and when to sell. The book also outlines how to apply Fisher’s ideas to suit your own needs.

Common Stocks and Uncommon Profits is by no means a simple guide to stock market investment. More advanced stock selection strategies are explored within this text. This book alone has provided me with the knowledge needed to begin investing in the stock market employing a growth stock approach, which will be explored further below.

Fisher’s investment philosophy was quite different to Graham’s. Fisher took what I call a growth stock approach. He purchased companies with a strong likelihood of increasing their earnings in the future. Consequentially, increasing their market quotation. Typically, “growth stocks” pay minimal if any dividend.

Fisher’s “scuttlebutt” strategy was based on the belief that every piece of information about a company should be exploited. This is to provide you with the highest level of knowledge about a stock before making a purchase.

Fisher would go to great lengths to learn more about a company before making an investment. He is known to have contacted current and former employees, suppliers and even top-level management of the company under consideration. To quote Fisher: “When it comes to selecting growth stocks, the rewards for proper action are so huge and the penalty for poor judgement is so great that is it hard to see why anyone would want to select a growth stock on the basis of superficial knowledge.” Now, a little bit about Fisher.

As featured on the back cover of the book, Phillip A. Fisher started his career as a securities analyst in 1928. He later founded Fisher & Company, an investment counseling business in 1931. He is known as one of the pioneers of modern investment theory. Fisher is reported to have made his clients extraordinary investment gains over his career and managed the company’s affairs until his retirement in 1999 at the age of 91.

Grab a copy of Common Stocks And Uncommon Profits here!

Book #4: Unshakeable: Your Financial Freedom Playbook

Author: Tony Robbins

Unshakeable, published on February 28, 2017, is one of my favorite personal finance books. Not only is it a New York Times best seller, 100% of the profits from the book are donated by Tony Robbins to Feeding America.

The stock market is not the primary focus of this book, however there are certainly chapters directed towards stock market investment. Tony will teach you how to properly allocate your assets, explain why index funds are preferable over managed funds and teach you how to navigate through crashes and corrections in the market.

This is more than just a finance book. You will also learn how human behavior and psychology can negatively affect your investment returns, as well as how to combat those innate vulnerabilities that have been hardwired in all of us as humans. Seen on the back cover of Unshakeable: “No matter your salary, your stage of life or when you started, this book will provide the tools to help you achieve your financial goals more rapidly than you ever thought possible.”

Tony is an American author, entrepreneur, philanthropist and life coach. He is known for his infomercials, seminars and self-help books including Unlimited Power and MONEY: Master the Game. He is the founder of several companies that earn approximately $6 billion in annual sales. If you are looking for a book that encompasses more than just the field of investing, but the financial industry, this is a must buy.

Grab a copy of Unshakeable here!

– Jasper Levi Stojanovski
https://www.stojfinance.com

20 Ways To Earn $100 Per Day (Or More) Online Without Taking Surveys!

I have been a full time online entrepreneur since June of 2017. Since I was old enough to have my own computer, I have been trying different methods for making money online. The idea of pulling money out of thin air by using the internet has always fascinated me.

My early ventures for making money online were not successful. I would guess that I have tried and failed at close to a dozen different online businesses. Thankfully, I have now found a few money making ideas that have actually worked for me. The good news is, none of them involve a rich prince sending you money through email!

I will be sharing those with you now as well as money making ideas that have worked for close friends of mine!

So, let’s get into it!

If you prefer watching videos, here you go…

1. Start A YouTube Channel

You know that phone sitting in your pocket? Or the one you are reading this article on? Well, that phone has a camera and a mic. Did you know you can make some serious money as a YouTube personality?

I have been doing YouTube videos since October of 2016 and it is hands down my favorite way to make money online. It does require you to put yourself out there, but if you have an outgoing personalty and thick skin, this could be a great way for you to make money online.

What you need to understand is that there is a massive amount of effort involved with building an audience on any platform! In fact, it took me over 7 weeks to get my first 100 subscribers on YouTube.

Once you build a large following, the money to be made is honestly unbelievable. One of my friends, Graham Stephan, put together a video showing his YouTube earnings.

Here is how much money you can make on YouTube…

2. Affiliate Blog

And now, we move on to my second favorite method for making money online! A lot of people think that blogging is dead, but that could not be farther from the truth. Blogs have been around for a very long time, and I do not see them going away anytime soon.

When I am talking about starting up a blog, I am not talking about a blog where you write about your day and include what food you ate. What I am referring to is an authoritative, niche specific blog.

Take our blog here for example. Investing Simple is a niche specific blog that covers personal finance and investing. I don’t write articles about avocado toast or my vacation to Vancouver. I create engaging blog posts about money, personal finance, investing, credit score and a variety of other topics!

You can make money from a blog in a number of different ways, but my favorite method is affiliate marketing. To explain this simply, you get paid for making referrals to purchase a product or a service.

If you want to learn more about affiliate marketing, check out our 5,000 word guide on affiliate marketing for beginners!

Again, building up a successful blog requires a lot of hard work. Take Jeff Rose for example. He has a personal finance blog Good Financial Cents that he has been building for the last 10+ years! While he does make a lot of money with this blog, he has invested thousands of hours into content creation.

Here is a great video by Jeff Rose on how to make money with a blog…

3. Make Money On Instagram

In June of 2018, I purchased an Instagram account called Investing Simple. Included with this package was a blog called Investing Simple as well. That is how I came to acquire this brand and start this blog!

Now, a lot of people might be wondering why I would purchase an Instagram account. When I tell them I paid close to $10,000 for it, they think I am a complete nutcase! The truth is, there are a lot of different ways to make money with an Instagram account.

P.S. don’t forget to follow @InvestingSimple on Instagram!

I make money with this page in a few different ways. First, paid shout outs. Brands and influencers will pay me to post something on my feed or story. Second, affiliate marketing. I refer traffic to brokerage companies through swipe up stories and earn a commission in the process. Third, I refer traffic to my blog. Most of the traffic for this blog comes from the content I share over on the story of Investing Simple!

There are countless ways to make money on Instagram. Earlier this year, I did an interview with Josue Pena over on my channel. He runs an Instagram marketing agency that is bringing in over $100,000 a month!

Check out that interview here…

4. Review Products You Already Own

Are you a guitar aficionado? Do you know a lot about headphones or kitchen gadgets? One of the best ways to make money online is to review products that you already own and are using. Believe it or not, you are probably an expert at a certain category of products. What if you could review these products, talk about what you like and don’t like about them, and make money in the process?

Now, let me take this a step further. What if you could partner up with Amazon, refer sales to them and earn a commission in the process? Amazon pays thousands of people just like you and me for referring traffic to the online store. If someone makes a purchase within the 24 hours that you sent them, you earn a commission!

This is known as the Amazon Associates Program. When I first started making money online, this was one of the first avenues I explored. I got out my camera, filmed reviews of products that I already owned and was knowledgeable of, and uploaded them to YouTube!

Now, I didn’t make a killing with this but it was a great learning experience for me. I still make money through Amazon Associates, primarily by recommending books. If people purchase a book through my link, I earn a commission!

If you aren’t comfortable with getting in front of a camera to film a product review, you could create a review blog instead! One of my close friends Odi Productions created a headphone affiliate blog known as Recording Now. On this blog, he reviews headphones and recording equipment and refers sales to Amazon. Easy money!

Here is a pretty comprehensive video I did talking about Amazon affiliate links…

5. Do Gigs On Fiverr

I am sure we have all heard of this money making idea before. You post gigs on Fiverr and earn $5 (hence the name “Fiverr”) in the process. Here’s where it gets interesting though… there are a lot of people charging more than $5 for their professional services on Fiverr!

I’ll admit, Fiverr does not have the best reputation. I have purchased gigs before where the quality was very poor, but at the end of the day you get what you pay for. I have also spent $200+ on gigs before that have been exceptionally good! As someone who spends $500 or more a year on freelancing gigs on Fiverr, I can tell you that there is a lot of money to be made on this platform.

You might have to start out charging just $5 for your gigs in order to get some reviews, but once you have a dozen or so reviews you can increase your price! As you build trust with the community on Fiverr, a higher price for your gig is justified.

Screen Shot 2018-12-24 at 2.41.15 PM.png — Fiverr Pro Banner

In fact, for top freelancers there is Fiverr Pro. Some of these gigs go for $1,500 or more! If that doesn’t get you motivated to post some freelance gigs on Fiverr, I don’t know what will. Go ahead and make some money!

The Penny Hoarder did a great job writing a guide on how to make money on Fiverr.

6. Creative Writing

Are you a good writer? The truth is, most of us aren’t! Personally, I feel that I am much better on my YouTube videos. I do enjoy writing though, so I write one or two articles a week for the blog.

So who writes the rest of these articles? Currently, I have two creative writers working for me! That’s right, even if you are the worst writer in the world you could still have your own blog by leveraging the talent of other people. Or, if you are the greatest writer in the world, you could have others pay you to create content for their blogs!

Here is a tip; the more specialized you are, the more you will earn!

If you are a expert in a certain field, and a great writer, that is a winning combination. Sites like Upwork and Fiverr allow you to post gigs or services for hire. People looking for creative writers often start their searches at these two sites!

Looking to brush up on your writing skills? Here are some great tips…

7. Virtual Assistant

In every business, there are some tasks that you enjoy doing and some that you absolutely hate doing. For me, one of the tasks that I hate doing is SEO optimization of my blog. Thanks to the internet, I was able to hire someone from across the country to handle the SEO for my blog!

This individual is known as a “VA” or a virtual assistant. These virtual assistants have become a vital part of the way online businesses are run today. Ask anyone running an ecommerce business. Most of them would not be able to do it without a team of these virtual assistants working for them behind the scenes!

Your strength is someone else’s weakness. Become a virtual assistant and help business owners with the day to day tasks behind the scenes!

8. Public Notary

Now, this isn’t technically an online business but you can advertise this business online. One of the easiest ways that you could make some extra money on the side is to become a public notary.

There are a number of different sites like 123 Notary that allow people to find a public notary in their area. Some of these are paid listings while others are completely free!

Most notaries are charging between $40 and $60 for their services. In order to be a notary public, you have to pay a fee for testing and pass an exam. Here is more information!

9. Sell An Online Course

Investing Simple is affiliated with Teachable.

Ready to demonstrate how to write the perfect resume? Knit a sweater? Read tarot cards? Buy a car? Balance a checkbook?

If you are an expert at virtually any topic, you could package that knowledge up into an online course and sell it to others! This was one of my largest sources of income in 2018. The way that people are learning things is changing. More and more people are looking to learn new skills online!

Setting up the curriculum will take some time, as will marketing your course, but once it is up and running you will be able to earn passive income based on the number of students that enroll.

Screen Shot 2018-12-24 at 3.08.59 PM.png — Course Creation Companion By Ryan Scribner

Ryan Scribner, one of the blog authors, offers a free course all about building a successful online course or membership site. You can enroll here!

This is one of the best ways to make passive income. Once the course is completed, you just collect the payments! Hosting sites like Teachable will handle the rest. There are countless examples of people who are making $100,000 or more with an online course.

Take Tai Lopez for example. In this video, Tanner J. Fox estimates that he does close to $90,000,000 a year in revenue from his online courses and coaching!

10. Create A Membership Site

On the topic of creating an online course, another great option is to create a membership site! Some things are better taught through a course while others are better taught through a membership site. With a membership site, you charge members a set fee on a recurring monthly or yearly basis.

Let me give you an example. Let’s say you were creating an educational program that shared healthy cooking recipes. You would be better off creating a membership site, as you would be regularly adding more content and sharing new recipes.

Sites like Teachable allow you to create a membership site with ease. One of the best parts about membership sites is that you have a general idea of how much you will be making each month!

11. Being A Flipper Or Reseller

In my opinion, this is one of the EASIEST ways to make some extra money online. The concept is really simple. Purchase items that have high resale value and resell them on sites like eBay!

Think about college textbooks for example. Most college students are not going to take the time to create an eBay account, take photos of their textbooks, list them on eBay, package and eventually ship them out. What if you were able to purchase textbooks from college students in cash and resell them online? By putting in the extra work, you could easily make a 20% profit margin or more as a reseller!

Another example of this is picking items at thrift stores like Salvation Army and Goodwill. Simply go to these stores with your smartphone and scan items to see what they are selling for on eBay. Most people working at thrift stores have no idea what these items are worth. Since they are donated, any amount they can get is profit. It is easy to find money making flips at thrift stores.

A third way you could do this is by going to garage sales. Again, people just put arbitrary prices on their unused items. Find items with high resale value and flip them!

Here is a video of Gary Vaynerchuk (shocking, right?) talking about how to make money online as a flipper…

12. Coaching, Tutoring Or Consulting

This money making method has been around for a very long time. If you are an expert in a certain field, you can make money teaching others. You might be saying to yourself that you have no skills that you could teach, but you don’t have to know as much as you think!

Consider college or high school students for example. If you excelled at a certain subject in school, you could simply tutor students in this subject! Don’t feel like leaving the house? Simply do this over Skype or Zoom.

13. Ecommerce

The way people are buying things is changing. Actually, let’s be honest, it has already changed. Young people in particular are doing more shopping online than ever before. Amazon Prime subscriptions are now more common than a landline telephone in a household in the United States.

Thousands of people are taking advantage of this trend by getting involved with ecommerce. This could be selling items on Amazon, creating your own store on Etsy or dropshipping on Shopify! There are countless ways to make money online.

One of the most popular ways to make money online these days is by dropshipping. Essentially, you are selling products that you are never putting your hands on. You build out a website, run ads to get traffic to the site and then fulfill the order.

For example, many people are creating a Shopify store where they can sell products from AliExpress. Keep in mind that it will take weeks if not months for products to ship from China, so you want to be transparent about this on your site!

A better way to dropship is to ship the products to the United States first and pay for fulfillment services. This will significantly reduce the shipping time.

Dropshipping Model — Dropshipping Explained, Oberlo

14. Run Facebook Ads For Businesses

One of the BEST opportunities today in my opinion for making money online is to learn how to run Facebook ads. Digital advertising is going nowhere but up as more and more businesses ditch traditional advertisement methods each year. The truth is, digital advertising like Facebook ads is just more effective.

Take a billboard for example. If you put up a billboard and spend $5,000 on it for a month, you will get thousands of eyeballs on that ad a day. But how many people are actually interested in your product or service? With this type of traditional advertisement, there is no way to determine who is looking at your ad or who followed through with it.

With Facebook ads on the other hand, you can build audiences of EXACTLY who you want viewing your ad. On top of that, you can also determine how many people clicked the ad and followed through with a meaningful action on your site. The opportunities with Facebook ads are endless!

So, why should you care? Even if you are not a business owner yourself, you can help business owners by setting up Facebook ads for them! Business owners should be focused on one thing; running the business! They don’t have time to worry about testing, running and optimizing Facebook ads.

Check out this interview I did with Kevin David to learn more…

15. Create And Sell An Ebook

This is one of the old school methods for making money online, but it still works today! Personally, I prefer making online courses (money making idea #9) as the profit margins are higher. You can still make some decent money selling ebooks though!

Selling paperback books is annoying. Who wants to deal with physical products these days? Selling a digital product like a course or an ebook is a great way to earn passive income. Once you take the time to create the ebook or course, you just keep on selling it!

Personally, I have never tried this. The Writing Cooperative put together a great guide on how to sell your first ebook. Check it out here!

16. Build ClickFunnels Funnels

Back in November of 2018, I hosted my first live event in Dallas, Texas. Now, I am not telling you this to brag. The reason why I am sharing this is because I had to use ClickFunnels to create a sales funnel for that event!

After an agonizing hour of trying to figure out this platform myself, I went on to a Facebook page for ClickFunnels and put up a post in search of someone who could build a funnel for my event. I found someone relatively quickly, and he agreed to build us a sales funnel for $200.

It took him about a day, but that was easy money.

If you are well versed with programs like ClickFunnels, you can get paid good money to simply build funnels for other people! All you have to do is simply advertise your services for free in Facebook groups or online forums.

Here is a video Kevin David did that talks about how to make money with ClickFunnels…

17. Build Manychat Autoresponders

This idea is very similar to #16, but there is another new program out there that is extremely useful to small businesses and influencers. Manychat is an automated messenger bot for Facebook Messenger. As open rates for email marketing efforts continue to decline, services like Manychat are becoming more popular.

If you become an expert at building these messenger bots, you could advertise your services in Facebook groups, forums or reach out to businesses and influencers directly and offer to help them set up this powerful tool!

Here is a Manychat tutorial for those of you that are interested…

18. Get Free Traffic From Quora

For those of you who already know what Quora is, skip this paragraph. For those of you who don’t keep reading! Quora is an open forum where people can both submit questions and answer questions for others. Let’s say, for example, I was looking for some ideas to make money online! I could go on Quora and submit a question that says “What are some ways to make $100 a day online?” and other people could answer. (Hint: this is actually a question I answered on Quora!)

But… why should you care?

Believe it or not, Quora can serve as a great source for free traffic to your site or business! Let me run you though a example. Let’s say you have a consulting business (money making idea #12) where you help small business owners with staffing. You could go on Quora and find questions that are already out there that you could answer!

On Quora, you are allowed to include links to your own site, your LinkedIn and even your email. You want to make sure your posts are extremely valuable, otherwise you will get flagged as spam.

So, in case you aren’t connecting the dots, here is the run down. First, you find questions in your niche being asked by people on Quora. Then, you answer those questions adding a tremendous amount of value. Finally, you add your contact information at the bottom where people can learn more about you.

And BOOM! Now, potentially thousands of people could read your answer. If done correctly, this could generate free leads for your business or free traffic for your site.

19. Invest In The Stock Market

Okay, I know this one is a stretch, but there are thousands of people out there making $100 a day or more on average through the stock market. One of the most common ways is through dividend income. Dividends are payments to shareholders that are typically paid out on a quarterly basis.

Consider a stock like AT&T. This is a company that currently pays a dividend of around 7%. That means for every dollar you invest in this company, you will get back seven cents a year in the form of dividend payments. Now, it is important to remember that dividends are never guaranteed. However, companies like AT&T have been paying dividends for decades, so it is a pretty sure bet.

Screen Shot 2019-01-03 at 12.13.02 PM.png — AT&T Stock (T) 6.89% Dividend

In order to average $100 a day from dividend income, you would need to be earning $36,500 per year. Assuming AT&T continues to pay a dividend of 7%, an investment of just over $500,000 would earn you that income. While that probably sounds like a lot of money for most readers, that is a great goal to aim for long term! Dividend income is one of my favorite methods for making money because it is completely passive. You simply invest in a real company and collect a portion of their earnings!

Looking to learn more about investing in the stock market? Here is our free guide.

20. Email Marketing

And finally, we have this old school method for making money online. While open rates on email marketing activities are getting lower and lower, there is still potential to make money here. In order to build an email list, you need to offer something of high value for free. Typically, this is some kind of free guide or course.

Once you build up an email list, there are countless ways to make money with it. You could leverage affiliate marketing, sell your own course, sell a membership site or sell your own online coaching services just to name a few examples!

Email marketing is a great addition to an existing online business. There are very few businesses that I can think of (actually, none!) that would not benefit from ongoing contact with their customer base.

Closing Thoughts…

Every year, there are more and more ways to begin making money online. The best piece of advice I can give you is to find one thing that you enjoy doing and stick to it! Those who dabble with different money making ideas often have “shiny object syndrome” where they constantly jump from one idea to another. There is no secret out there when it comes to making money online. The closest thing to a secret that I can come up with is that money is made by sticking to one thing for a long time. Have patience and see the long term vision for what you are building!

How To Get Your First Credit Card As A Young Person

Investing Simple is affiliated with Credit Land.

Ask your parents, and they will probably recall how, back in the day, credit card companies used to set up tables on college campuses, handing out free logo T-shirts or water bottles to undergrads who signed up with them on the spot for student credit cards. This kind of easy access to credit was great news for some, but it got tons of college kids in the fast lane speeding toward substantial debt that would take decades to overcome.

Legislators stepped in and changed finance laws, stamping out those free-for-alls, and these days, the opposite is the case. Students, or anyone under age 21 now have a difficult time getting approved for a credit card.

But don’t give up! There are ways to get your hands on your first ever credit card that won’t require jumping through (too many) hoops.

P.S. If you are totally new to credit, check out our free guide here!

Is The Timing Right?

Getting your first credit card is pretty much a rite of passage from your younger years into your 20s. There’s no exact time set in stone to apply for a credit card, but keep this in mind: you want to be at the stage of life where you won’t go wild and charge up a storm! And also…. you need to have the financial means to pay off the balance of the card monthly. That’s the only way to avoid interest charges (and God forbid, late penalties).

Happy 21^st Birthday! Now, go apply for a credit card!

In most cases, you need to be at least 18 to even qualify to apply for a credit card. And if you’re under 21, you will likely need a cosigner on your credit card application. Federal laws require that people under age 21 must have verifiable income before they can be approved for a credit card without a cosigner. Sadly, a monthly stipend from your parents, aka an allowance, doesn’t count. You must have income from a paying job, at least part-time employment.

But if you have enough independent income or savings to show that you can, all on your own, pay off debt, you may be able to swing a credit card in your name.

After you blow out those 21 candles, credit card restrictions aren’t as tight. You will still need to demonstrate a regular income, independent of parents or other adults, but you can include any income you have, including part-time jobs, commissions and side hustles.

Here is a great video by The Credit Card Maestro that talks about getting your hands on your very first credit card…

Why Do You Need A Credit Card?

Paying with cash is a great way to curtail your spending. Studies have shown that paying for purchases with cold hard cash makes people think twice about buying pricey items, because it’s harder to part with $20 bills than simply swiping a plastic card.

One thing cash doesn’t offer is a chance to build up your credit history. Credit cards are a great way for you to begin building a solid credit history so that you can eventually qualify for a mortgage, a car loan, or even funds to launch business you’ve been itching to start up.

Learn more about how credit scores work in this article!

Let’s Talk Credit History

If you’ve never had a credit card or any type of loan in your name, you’re considered high-risk because you have a credit score of 0. In most cases, you need at least six months of payment history to be eligible for a credit score.

Wondering what your credit score is? Check it here!

Here’s a quick rundown: credit scores generally fall within a range between 300-850. For most adults, their score weighs in between 600 and 750. A score of 700 or above is considered good. Score 800 and up, and you’ve earned a gold star and the status of excellent.

Just like most things in life, the higher your score, the better. A high score gives lenders confidence that you make good credit decisions and they’re not taking a gigantic risk approving a loan.

Credit scores are tracked by banks that approve or turn down mortgage loans, car dealerships financing your next vehicle, insurance companies and even potential landlords.

A healthy credit score means you’re more likely to be approved for loan, and has an added benefit of boosting your chances of securing an interest rate that doesn’t send chills down your spine.

If you’re looking for more perks, like rewards points or cash back on purchases, it’s also imperative to have a flourishing, well-established credit history.

The length of time (in years) that you’ve been building credit also works to your advantage. A good rule of thumb is to shoot for two to four years of sound credit management to build confidence in lenders and have them give the green light to your loan application. In most cases, you need three things to get a credit card: a Social Security number (or taxpayer identification number), the ability to pay the credit card bill and, at the very least, a fair credit score.

Your early 20s is an ideal time for your first credit card application.

As tempting as it may be to fill out as many credit card applications as you can get your hands on, it’s wiser to pick and choose. Read the small print and compare benefits. Research which financial institutions are known for approving first-timers. Doing the homework will benefit you in the long run by giving you a faster stamp of approval on your application.

Where To Get Your First Credit Card

Maybe your mailbox is already full of interesting offers from credit card companies prominently featuring flashy perks such as a great introductory rate, money or travel rewards, whatever they can dream up to entice you to choose their card. In the small print, you’ll find the important details such as fees, interest rates and finance charges.

Here’s what you’ll likely find out there…

1. Major Credit Card Issuers

If you’re enrolled in college, there’s a good possibility of getting approved for a student credit card from a major credit card issuer. But don’t assume every card with ‘student’ in the name is a good deal. Some student credit cards are notorious for having high-interest rates and weighty annual fees, both of which put the cards low on the list for a manageable first credit card. Again, read the small print and do the research before jumping in. Once you have settled on a few credit card companies to try, you’ll want to study the terms carefully.

Some answers you’ll want to look for include: Does the card come with an annual fee? What is the annual percentage rate (APR)? Is there an introductory rate? How long does it last? What happens if you pay late? What kind of late fee will you pay? Will your interest rate sky rocket if you miss a payment?

Another tip: look for cards that are accessible to people with moderate to limited credit history. Some credit card websites list the type of credit history needed to get approved. For first timers, seek out credit cards that accept applicants with little or no credit. This doesn’t necessarily mean you’ll be automatically approved, but you stand a better chance. Don’t bother with applications for credit cards requiring excellent credit; you won’t make it in the front door.

2. Your Bank

If you’ve had a long-term checking or savings account and kept the balance steady, consider applying for your first credit card at your bank. You’re a known risk to your bank, and this works well to your advantage by upping your chances of getting a credit card application approved. Of course, it should go without saying that your bank account’s history should be free of overdrafts, otherwise known as bounced checks.

You can apply online, or take the high road and go visit your local bank branch to meet in person with a customer service rep who may have more authority to get your application approved in a more timely manner.

3. A Retail Or Department Store

Retail and department stores are notorious for having fast and easy credit card approval. But on the flip side, they have high-interest rates that make it expensive to carry a balance from one month to the next. Another downside of these cards is they aren’t versatile—you can only use them in that store. That limits what you can buy, of course, but opens the door on a spending spree ignited by deep discounts for first-time users.

Be cautious about retail credit cards, but that doesn’t mean they can’t be used to your advantage. Show a regular history of paying off your balance monthly, and that store card could help you build up a good enough credit history to apply for a major credit card.

If it turns out your credit card applications are all denied, don’t despair. Even people with well-established credit histories are sometimes rejected. It can help you to find out why you were denied via the letter you receive that notes the specific reason. This can guide you to form an action plan for your next step.

4. Secured Credit Card

When your short or non-existent credit history prevents you from getting a standard credit card, go ahead and apply for a secured credit card. With a secured credit card, you make a deposit in your bank account that’s typically equal to the amount set as your credit limit.

This allows credit card companies to gamble less on your ability to make your payments because you pay a deposit to secure your line of credit. The deposit sets your credit limit, i.e. if you put down $1,000 that’s the ceiling for your line of credit.

To establish good credit using a secured credit card, you’ll want to make all your payments on time and use as little of your available credit as possible. The best practice is to use less than 30 percent of your total credit limit or, even better, less than 10 percent. So do the math and keep your balance at a very low ratio compared to your limit.

Make it your game plan to buy smaller purchases on the secured card and pay off the bill in full when it’s due. That’s right, pay the entire balance and make sure it’s on time. Seems simplistic, but if you’re tempted to charge a new wardrobe, splurge at the healthy food market or charge tickets to a summer concert, you’re going to struggle to pay off the balance when the first of the month rolls around.

This is an excellent habit to foster as you move on in life if you plan to use credit. Paying in full means zero interest charges and paying on time spares you hefty late fees.

5. Find A Cosigner

You’ll need to find someone with an established credit history over the age of 21 (mom and dad come to mind) to cosign credit card applications for you in case you miss payments.

Keep in mind if you do pay late, you’re not only risking your stellar relationship with the parental units, you’re also messing with their credit score. Any late or missing payments will be reflected on their score and it will take a good amount of time for them to get it back on track.

6. Become An Authorized User

This option also gives you a way to tap into the healthy credit history of another adult over 21. As an authorized user, you’ll carry a credit card with your name on it, but it will be connected to the other adult’s account.

When you and the other adult use the card wisely, it will reflect on both credit histories. After about a year of on-time payments, you will have achieved a decent credit score and be in a much better position to apply for your own card.

The Bottom Line On Credit Cards

As is the case with everything in life, moderation is key. Use your credit card responsibly. Squelch the urge to over-spend by making only small purchases that you can easily pay off at the end of each month. It’s good practice to sign up for email or text reminders or enroll in auto-pay. Keep all these tips in mind and soon you’ll be proud to have an excellent credit rating that will set you up for a sound financial future.

Check out our free credit score guide here!

What Does It Really Mean To Be Wealthy?

This article is a guest post from the blog Prestige Defined.

What’s the first thing that comes to mind when you hear the word wealth? Money, yachts or watches? In the normal sense of the word, you wouldn’t be wrong. But my challenge in this post is primarily to change your perception of wealth as well as set you on the path to create wealth in the other areas of life. (I’ll leave the financial part to my friends here on Investing Simple!)

In an effort to alleviate any dismay, you should take comfort in knowing that much of the process experienced through financial investing is the same for investing in yourself and developing non-monetary wealth.

“Wealth is the ability to fully experience life.” – Henry David Thoreau

If you’re reading this blog, you already recognize the importance of investing. It is truly an invaluable skill in this game we call life in order to get and stay ahead. It requires the understanding of delayed gratification, exercising patience and skill over a prolonged period of time. All of these are valuable traits which are sorely missing from our society. Simply by being aware, you are ahead because you then have the choice of taking action. After all, you don’t know what you don’t know. Just as you research and carefully select investments, you must educate yourself in the areas which you seek to pursue.

Our first distinction being rather obvious, monetary wealth, extends to all that can be bought. Materialistic possessions include luxury vehicles, watches, clothes and beyond.

Non-monetary wealth refers to all that cannot be bought, touched or felt. Instead, these are things that are experienced, felt and cherished. A few examples of this are memorable life experiences, wisdom, knowledge, health or significant relationships.

Wealthy In Health

The wealth in health is incomparable to that of monetary riches simply because without it nothing else is possible. What good is all the money in the world if you can’t enjoy it?

Let me begin by saying that for any of these categories, it all begins with a choice. You need to make a choice to be wealthy in health. A healthy body, mind and spirit is an intentional habit that must be developed throughout time. You yourself know exactly what you need to do.

It’s the things you’ve been telling yourself you need to work on, but that you’ve been putting off for a while. Make the choice to take action on it. If you know you need to improve your diet, then add those vegetables and reduce the fast food. You most likely know what foods are healthy and which aren’t, and if you don’t, Google it!

Has the exercise been inconsistent, or worse, non-existent? Take the first step and educate yourself on the fundamentals or develop an exercise routine if you’re ready and follow it! It is important to keep in mind that health doesn’t only extend to your physical body, but also to your emotional, social, psychological and perhaps spiritual body. It’s important to develop these areas as well!

Wealthy In Love

How would you rate your friendships? Are you satisfied with your current relationships with your significant other or family? If you’re like me (cold and distant at times) then you most likely need to work on this aspect of your life. We live in the most connected time in history, and yet we are also at our loneliest. You may have more than a thousand friends on Facebook, but how many of those would help you in a time of need? How many would support you through an emotionally difficult time?

I used to be focused on quantity versus quality, however upon self-education through books and experiences, I reversed my objective and gained so much more value from three or five closest friends that I knew I could depend on.

Do you call your parents enough? When was the last time you went on a proper date with your significant other? Put in the effort to strengthen your relationships, because we never know when our time here may be up. I know it may seem macabre to think about the end, but coming to terms with our ultimate fate makes life much more beautiful and worthwhile.

So many times we get caught up in the monotony and tedious day to day life, but just like happiness cannot exist without sadness, and light cannot exist without darkness, life cannot exist without death. But there is beauty in that. Train yourself to see it every day.

Perhaps most importantly, love yourself, because it all begins with you. It is rather unfortunate that we can be so harsh to ourselves at times. Most of the time, we are our own worst critic and while this can be healthy in some aspects such as a project or work, it can quickly become toxic if you continually put yourself down. Learn to love yourself and I am positive you will find tremendous value in doing so!

Wealthy In Happiness

What was your first conscious thought this morning? Did you dread the alarm clock? Did you make getting up a chore? Did you notice it yet? So much of life and YOUR happiness is truly in what YOU make of it. Believe me when I say your thoughts are more powerful than you think. But what is stronger; you or your thoughts? It’s an interesting concept isn’t it? So often we believe we are our own thoughts, but are we? Thankfully, we are not. But you could be if you keep thinking like that!

Who controls you? Your thoughts, your emotions or do you control them? I used to believe that happiness meant you would forever be free of troubles and achieve everlasting bliss. Fortunately, nothing could be further from the truth. The reason why I say fortunately is because if it truly was like that, being the humans that we are, we would quickly grow weary and bored just like we do with anything familiar. You think laying on a beach every day watching the ocean wouldn’t get boring?

The truth is that happiness is a conscious choice you make every day and you can start right now. Gratitude is my key to happiness. It’s easy to be grateful when things are going well and all is right with the world (which is still a great time to be thankful) but the character building times are of course when things are not going well.

When something (you perceive to be) undesirable occurs, do you blame others, yourself or curse the world and the forces that be? Or do you instead say thank you either way and move forward? In the heat of the moment (and I struggle with this myself for now) it can be extremely difficult to be grateful. If you can break through that anger and sadness for just a split second, and think of being grateful and act on it, you can dissipate that anger quickly and turn your mind towards more fruitful thoughts.

Perception Is Reality

In conclusion, I sincerely believe that one should not be an extremist in life but should rather implement all tools throughout life in a balanced manner. It isn’t about one being necessarily more important than the other, but about being in harmony and living a well-balanced life.

Spending too much time working and making money? There’s nothing wrong with pushing yourself to reach a goal, but at what cost? Neglecting your family and friends? Too much of anything is bad.

I truly believe the path to becoming wealthy in these areas is through self-examination and reflection. As Socrates once famously stated, “The unexamined life is not worth living.” Sit down and really evaluate these different areas in your life and improve upon the ones which are lacking.

This is truly only an introduction into various topics we could discuss for days. Do yourself a favor and invest in yourself, your education, your relationships, your health and your happiness!

Most of these habits are simple, but not easy. They’re just as easy to do as not to do them and therein lies the trouble. But because you’re already trained to look past the immediate future, you should have a head start!

I hope you make the powerful realization throughout your journey that all these habits create a powerful positive cycle which can turn into a negative cycle simply by lack of action. Taking care of your health gives you more energy, which can result in working on a side project or investment to build up your monetary wealth. This frees up time you could spend with family and building relationships thereby increasing your happiness and fulfillment in life. Now, think of the opposite and ask yourself which life are you living?

If you’re interested in learning more about the topics discussed here, I delve into these on my website Prestige Defined focusing on the four pillars I consider to be crucial in life: Health, Wealth, Love & Happiness.

Thank you for your time and I hope you make the decision to invest in yourself in order to improve your life in the long-term!

Fundrise vs LendingClub: Best Alternative To The Stock Market?

Investing Simple is affiliated with Fundrise and LendingClub. This relationship does not influence our opinion of these platforms.

As investors, we are always trying to diversify our portfolios. Diversification can be a key factor in long term success as an investor. Many of us tend to diversify across core asset classes such as stocks and bonds. For those of us looking for alternative investments to the stock market, there are a variety of different options. In this article, we are going to review and compare two very popular alternative investments; Fundrise and LendingClub.

What Is Fundrise?

Here is our full review of the Fundrise investment platform.

How Does Fundrise Work?

Click here to get started with Fundrise!

Screen Shot 2018-12-28 at 11.56.51 AM.png — Fundrise Update Email

The main investment objectives of Fundrise are to generate revenue from income producing properties as well as buying and selling real estate in thriving markets. As a Fundrise investor, you can choose whether you want to be in a growth-oriented portfolio or income-oriented portfolio. Income from rental payments and proceeds from flips are passed along to Fundrise investors in the form of dividend payments or distributions. In exchange, Fundrise collects a 1% fee as the investment manager.

It is important to understand that Fundrise is a private real estate investment. The Fundrise eREITs and eFunds can only be bought and sold through this platform. They are not publicly traded on a stock exchange like a publicly traded REIT.

Fundrise Investment Options And Portfolios

Starter Portfolio: This portfolio is designed for new investors who would like to give Fundrise a shot. The minimum account requirement is only $500 to begin investing. This portfolio consists of 50% growth and 50% income-oriented holdings. If you want to upgrade to an advanced plan down the road, it is completely free!

Supplemental Income: This portfolio is geared toward income-producing real estate. Investors will earn returns primarily through dividends from cash flow producing real estate. Dividends are generated through rental and interest payments in proportion to your share of the fund.

Balanced Investing: This portfolio offers a blend of 50% growth and 50% income-oriented investments. The balanced investing portfolio invests in a blend of eREITs and eFunds offered by Fundrise. The goal for this portfolio is for a balance of income-generating real estate, as well as real estate that is appreciating in value.

Long Term Growth: The goal of this portfolio is to generate returns primarily from asset appreciation. This portfolio aims to purchase high growth potential real estate and generate returns mostly from the sale of the underlying properties. This includes buying property and performing renovations in order to sell the asset for a gain later.

Fundrise Terminology: eREIT And eFund

Each portfolio consists of eREITs and eFunds designed by Fundrise. These investments are set up as real estate investment trusts or partnerships and they are managed by Fundrise.

An eREIT will produce income for your portfolio in the form of dividends. Dividends are earned from the rent payments from the underlying apartment and commercial leases owned within the eREIT as well as interest payments from underlying real estate debt investments owned by Fundrise.

An eFund is a partnership created by Fundrise to be treated differently for tax reasons and to provide greater investment flexibility. Partnerships have the advantage of avoiding the double taxation of normal C-Corps. eFunds are designed in a similar way to eREITs where there is a pool of real estate investments split into shares and sold to investors. Where eREITs are designed to generate income, eFunds are geared towards growth.

Fundrise Investment Liquidity

Fundrise uses the funds you invest to purchase real estate. For this reason, there is a 60 day waiting period for withdrawing funds. There are also quarterly redemption periods.

This is why it is important to understand what you are investing in when you invest with Fundrise. Investors should aim for a long-term investment of at least 5 years in duration when investing with Fundrise. Real estate is not an investment with high liquidity and it is not for everyone!

It is important that investors understand that liquidity and distributions are never guaranteed.

Fundrise Historical Returns

Past performance does not guarantee future returns. All investing involves risk, including potential loss of principle.

Screen Shot 2018-12-28 at 12.05.39 PM.png — Fundrise Historical Performance

Fundrise Fees

Pros Of Investing With Fundrise

The minimum to get started with the Starter Portfolio is $500.
Small retail investors are able to access private real estate investments.
Since this is a non traded REIT, it may be less correlated with the overall market.
Fundrise has a transparent fee of 1% per year.
This investment allows you to earn compound interest, with the option of automatically reinvesting quarterly dividends using a drip (Dividend Reinvestment Plan).
Fundrise does not have a minimum net worth or income requirement like most private investment funds do.
This is a 100% passive real estate investment.
Fundrise gives you diversified exposure to real estate.
Fundrise supports retirement accounts.
Monthly redemption periods eliminate the temptation for panic selling.

Cons Of Investing With Fundrise

Liquidity is never guaranteed. During a downturn, liquidity may not be available as many investors will rush to sell and buyers may be few and far between.
Distributions (dividends) are never guaranteed.
Distributions (dividends) are taxed as ordinary income rather than capital gain rates.
Fundrise has a limited track record of four years and not a long investment history.

Fundrise: The Bottom Line

Fundrise may be a great platform for passive investors who are looking to gain access to private real estate markets. Fundrise is also a good option for investors who are looking to diversify asset classes and have less correlation to the overall stock market.

Since you can only liquidate your positions quarterly, investors may be less tempted to actively trade in and out of positions. You can also automate your dividend reinvestment plan, allowing compound interest to build up in your account.

In most cases, Fundrise is best for investors with a minimum 5 year time horizon. Real estate is not a highly liquid investment and inexperienced investors need to take this into consideration. While Fundrise does offer a 90 day satisfaction guarantee, you should not invest if you have a short-term investing mentality.

Click here to get started with Fundrise!

What Is LendingClub?

LendingClub is a peer to peer lending platform that allows investors to earn interest in return for lending money to borrowers on the platform. You can choose which type of lenders to lend to and earn interest on a monthly basis.

Here is our full review of the LendingClub investment platform.

What Is Peer To Peer Lending?

Peer to peer lending takes a modern approach to the traditional bank loan. Traditional lending has been reserved for the banks for hundreds of years. Now, investors can get rid of the middleman and lend directly to borrowers. This allows investors to fund loans and earn principle and interest in return. It also allows borrowers to take out loans and make monthly payments on those loans. LendingClub acts as the exchange; its’ purpose is to connect lenders and borrowers. By enabling this mutually beneficial relationship, and creating the note structure, LendingClub collects a 1% investment management fee on any interest payment received by an investor.

lending club review investing simple — Peer To Peer Lending Explained Simply

LendingClub Note Structure

LendingClub offers a wide variety of notes on their platform. Each LendingClub note is identified by its relative risk to the investor and rated from A to E. Notes rated A are of the highest quality and E being the lowest quality. A note’s risk is identified by a set of criteria such as credit score, debt to income ratios, credit history and activity of the borrower. The higher the risk, the higher the interest rate on the note. Therefore investors who take higher risk and invest in E grade notes will have the highest interest rates. Notes graded E also have the highest risk of losing part, if not all, of their investment.

lending club investing simple review — LendingClub Note Risk Structure

It is recommended by LendingClub to invest in a number of different notes in order to diversify your exposure to a variety of different borrowers and lower your risk. We all have heard the saying, “don’t put all your eggs in one basket.” Investors may choose to invest in a variety of different notes with different risk aiming to lower the volatility and overall risk of their portfolio. If you are curious about the average returns on LendingClub, check out this article.

review lendingclub investingsimple.blog — LendingClub Note Diversification

LendingClub Investing Strategies

When choosing the specific notes you would like to invest in, you have different options for investment strategies. LendingClub offers both manual and automated investments on their platform. You have the ability to manually select specific notes and perform any due diligence before investing in a single note. This is a good option for investors that are more hands on and would like to implement their own unique investment style. This manual investment strategy will allow you to hand pick each note.

Screen Shot 2018-12-28 at 12.47.16 PM — LendingClub Manual Strategy

LendingClub also offers automated investing on their platform. You will select your investment criteria and risk tolerance and LendingClub will automatically purchase notes on your behalf. This saves the investor time and applies a consistent investment approach across your portfolio. This approach is geared towards the passive investor.

Click here to get started with LendingClub as an Investor!

LendingClub Investment Time Horizon

LendingClub recommends investors plan on holding their investments until maturity. Currently, LendingClub offers two time horizons for their notes; 36 months and 60 months. Because there is greater risk in notes that have longer maturities, the interest rates are slightly higher for 60-month notes compared to 36-month notes.

You have the option to sell your notes before maturity on a secondary market, but liquidity is never guaranteed. That being said, you can buy and sell LendingClub notes to other investors on the Folio investing platform. This provides liquidity to investors and allows more flexible investing.

LendingClub Borrower Account Fees

There is no application fee for LendingClub, however there are often origination fees for borrowers. Borrows must pay up to 5% of the loan balance on the origination of the loan. These fees vary by the loan type and grade. Check with LendingClub to understand what origination fees may be involved. Investors do not pay these origination fees.

LendingClub Investor Account Fees

LendingClub has certain transaction fees when investing on their platform. There are no fees when purchasing notes, however there is a 1% transaction fee whenever you receive payment from a borrower.

LendingClub also has fees when performing transactions on the Folio platform, the secondary market where you can sell notes you own. There is a 1% fee for selling any notes on Folio.

LendingClub IRA accounts have a $100 annual fee. LendingClub will pay your IRA maintenance fee on your behalf if in the first year you maintain a balance of at least $5,000 in LendingClub notes. In subsequent years you must maintain at least $10,000 in LendingClub notes to have the fee waived.

Pros Of Investing With LendingClub

LendingClub offers an alternative investment that may be less correlated to the stock market.
Lenders can achieve diversification by investing in a variety of different notes.
You can set up automated investing on LendingClub.
Exposure to an asset traditionally reserved for the banks.

Cons Of Investing With LendingClub

LendingClub charges a 1% fee for every payment received by an investor.
All LendingClub loans are unsecured, meaning there is a greater risk for lenders in the case of a default by a borrower.
All investment as at risk. Investors have no FDIC protection or guarantees of investment returns.
Any interest earned on LendingClub is taxed as ordinary income and not capital gains tax rates.

LendingClub: The Bottom Line

LendingClub allows investors to diversify by investing in an asset class traditionally reserved for banks. Because LendingClub is a private investment, shares or notes are not traded on a major exchange. As a result, this asset class may be less correlated to the overall stock market but may be less liquid if you’d like to sell.

One negative of investing in interest bearing assets such as peer to peer lending is that all interest is taxed as ordinary income and not at capital gains tax rates. If you plan on investing in LendingClub, you may want to consider investing in a tax sheltered retirement account.

Click here to get started with LendingClub as an Investor!

Fundrise vs LendingClub

Alternative investments to the traditional stock and bond portfolio may be a good option for an investor trying to diversify their holdings. Both LendingClub and Fundrise can be good alternatives and provide investment exposure to different types of assets. In the end, you should be conscious of the risks and opportunities with each investment option.

LendingClub gives you the option to lend money to a variety of borrowers and earn interest on a monthly basis.

Fundrise, on the other hand, is a good option to gain exposure to the commercial and residential real estate markets with a small initial investment.

One of the core differences between Fundrise and LendingClub is the historical returns. Based on historical performance, returns on Fundrise range from 8% to 12% per year. On the other hand, returns on LendingClub range from 6% to 8% per year. It is important to remember that both Fundrise and LendingClub have a limited operating history. We hope to see returns like this going forward, but it is never guaranteed.

Another key difference is collateral. Through LendingClub, you are investing in unsecured debt like personal or medical loans. Through Fundrise, you are investing in secured debt where the real estate serves as collateral. If you are not comfortable with investing in unsecured debt, peer to peer lending is not for you!

Both LendingClub and Fundrise collect a 1% fee for managing your investments. The minimum to get started with Fundrise is $500 while the minimum to get started with LendingClub is $1,000.

Betterment Smart Saver Review: Better Alternative To A Bank?

Investing Simple is affiliated with Betterment. This relationship does not influence our opinion of this platform.

One of our main goals as investors is to protect our savings from inflation. We can do this using a variety of different investment vehicles. With interest rates being so low in recent years, we have not had many options to park our short term cash savings. Most bank interest rates on savings accounts are around 0.06% right now.

For those who are not familiar with the effects of inflation on your hard earned money, check out this video by one of the blog authors!

Recently, Betterment offered their own solution to this problem called Smart Saver. Smart Saver is an account built to stash your cash that has no account minimums. At the time of this article, Smart Saver is yielding 2.20% making it an attractive alternative to a traditional low interest bearing savings account.

Click here to learn more about Smart Saver!

By leveraging modern technology, Betterment has become one of the most well known robo advisors on the market today. The Smart Saver account is one of Betterment’s most valuable features. Betterment has become a full cash management solution for those looking to invest their money as well as protect the buying power of the cash they are holding on to.

What Is Betterment?

Betterment is an online platform that offers personalized portfolios for you based on your risk objective and time horizon. The platform provides many additional features and tools to investors such as tax minimization strategies, auto rebalancing and access to CFP® professionals. Betterment’s goal is to have its portfolios align with each investor’s individual goals and investment objectives.

Betterment is tailored towards passive long term investors. If you are a fan of set it and forget it solutions, Betterment should be on your radar. In exchange for this full service automated management, Betterment collects an asset management fee of 0.25% or 0.40% depending on what plan you use.

Check out our full review of Betterment here!

What Is Betterment Smart Saver?

Investors may have shorter time horizons for certain pots of money. For this reason, Betterment offers an alternative to a savings account called Smart Saver. Through this investment option, Betterment is offering higher interest rates than most banks with no account minimums.

Fintechs like Betterment have seriously disrupted the brokerage industry. Now, they are shaking up the banks! Betterment is now offering a low risk investment option for that extra cash parked in your bank account.

Importance Of The Emergency Fund

I want to share with you an excerpt from our free guide to investing in the stock market. It is important to understand why we recommend that most people keep some cash on the side for emergency or for a rainy day.

Most people do not plan on going into debt. Usually, debt is a result of a lack of planning. An emergency fund will eliminate the future need for debt. A general rule of thumb is that you should have enough money in a liquid account like a checking account to cover all of your expenses for the next 6 months. You can contribute to your investing account as well as your emergency fund at the same time.

Betterment offers investments in the stock market for those looking to grow their money over time, but you should not be investing cash that you are planning on using within the next 5 years. The reason behind this is because the stock market does not go up in a straight line. There are hills and valleys along the way, and in the short term you could be down 20% or more based on your risk tolerance.

But what do you do with that extra cash in your bank account earmarked for a home purchase in a few years? Or your emergency fund? You don’t want to invest that money in the stock market. In the event that the stock market takes a dive, you would have to sell at a loss to liquidate

On the other hand, you don’t want to lose the buying power of your money either! If you don’t plan on purchasing that home for a few years, you will be losing money every single year if you leave it in a low yielding bank account.

Inflation Loss Example

According to Bankrate, the average checking account is currently yielding 0.06% per year. On average, inflation sits at around 2% per year. This table will demonstrate the loss of buying power each year on money left in a bank account yielding 0.06%, the national average.

Deposited Amount	Interest Earned (0.06%)	Inflation (2.00%)	Net Loss
$100	$0.06	$2.00	$1.94
$1,000	$0.60	$20.00	$19.40
$5,000	$3.00	$100.00	$97.00
$10,000	$6.00	$200.00	$194.00
$25,000	$15.00	$500.00	$485.00
$50,000	$30.00	$1,000.00	$970.00
$100,000	$60.00	$2,000.00	$1,940.00

Each year, the buying power of the money in your low interest bank account is deteriorating. One of the best comparisons I have heard is that inflation is like having termites in your house. Day by day, it goes unnoticed. The real damage is done over a long period of time.

How Does Smart Saver Work?

Betterment will analyze your spending over time and calculate how much idle cash is in your account.
Once Betterment understands your cash needs, they will make sure you always have a cushion in your bank account using a two-way sweep between your accounts.
Betterment will then transfer any excess cash to your Smart Saver account to be invested. Betterment will always let you know before they move your money. As of the date of this article, Betterment Smart Saver accounts are yielding 2.20%.

Smart Saver Versus Bank Account

One of the drawbacks of Smart Saver for certain investors is that there is no FDIC insurance on Smart Saver deposits. FDIC insurance protects your deposits in a bank. Since Betterment is not a bank, so you are not eligible for this protection.

Typically, you will find that FDIC insured bank investments like checking, savings, money market accounts and CDs offer a rate of return that does not exceed inflation. Some online banks might be able to offer better rates since they do not have any brick and mortar locations. Another con with a bank CD or certificate of deposit is the fact that your money is locked up for set period of time. If you need to access that money, you will most likely be paying a penalty for early withdrawal. Smart Saver will get your funds to you within 4 to 5 business days with no penalty.

You are insured through Betterment under SIPC. This is insurance designed for brokerage firms like Betterment. In the event that Betterment goes insolvent or loses your investments, your protection is $500,000, which includes a $250,000 limit for cash.

Smart Saver invests your deposits in a variety of securities. The allocation is 80% in short-term government bonds and 20% in short-term investment grade bonds.

80% iShares Short Treasury Bond ETF (SHV)

Screen Shot 2018-12-21 at 12.59.48 PM.png — SHV Fund

The majority of the money invested through Smart Saver will be allocated into this short term treasury bond ETF offered by iShares. Betterment tends to invest your money in funds offered by Vanguard and iShares as they have some of the best products on the market with the lowest fees.

US Treasury bonds are considered to be the safest investment out there outside of bank insured investments. When you purchase these bonds, you are essentially loaning your money to the federal government. The only way you would lose that money is if the federal government defaulted on their obligations to repay. That would mean the entire US government would have to collapse!

Since this is a short term fund, it is holding bonds with a maturity date between one month and one year.

One of the pros of investing in US Treasury bonds is the fact that the interest earned is tax exempt on a state and local tax level. Ordinary interest income from a bank is taxable on a state and local tax level. Typical interest paid from a bank is taxed as ordinary income. You might not be familiar with this because most people do not meet the minimum interest payment threshold to receive a tax form from your bank. It is still your responsibility to report this income. If your interest income from a bank account is over $10, they are required to send you and the IRS a form.

20% iShares Short Maturity Bond ETF (NEAR)

Screen Shot 2018-12-21 at 1.06.31 PM.png — NEAR Fund

The remaining 20% is allocated into another iShares product. This is a fund that holds short term corporate bonds. This fund invests your money in a collection of different bonds from corporations like AT&T and General Motors.

These bonds are all investment grade bonds, meaning they are debts owed from borrowers with good credit. Corporations are rated by Moody’s and Standard & Poor’s to give investors an idea of how responsible they are with debt. Similar to a consumer credit score, each corporation gets a rating.

Interest from corporate bonds is taxed as ordinary income.

How To Get Started With Smart Saver

Open a Betterment Smart Saver account.
Create a Betterment account.
Link your bank account to allow Betterment to analyze your spending.
Manually or automatically invest your extra cash.

FEATURE: Two Way Cash Sweep

Two Way Sweep allows Betterment to easily transfer cash between your bank accounts and your Smart Saver account. Once you have too much cash built up in your bank account, Betterment will notify you and suggest you transfer excess cash to your Smart Saver account. If your bank account reaches a low threshold, Betterment will transfer your cash out of Smart Saver to your bank account.

Two-Way Sweep - Betterment — Two Way Sweep

The Smart Saver feature allows you to put your savings on autopilot. You won’t have to worry about building up too much cash in your bank account. Using Smart Saver will allow you to earn a fair amount of interest in an account, readily available at your convenience.

FEATURE: Cash Analysis

Betterment pairs its Smart Saver feature with another useful tool called cash analysis. Cash analysis will analyze your spending and using a cash flow analysis will determine and suggest how much cash to deposit into your smart saver account and how much you should leave in your bank account for expenses. This feature will help you invest your excess cash, as well as maintain an appropriate balance in your bank account.

Cash Analysis - Betterment — Cash Analysis

Why Use Betterment Smart Saver?

Everyone always tells us that holding too much cash in our bank account is not the right decision. But, why is this? The main reason being inflation.

Inflation will slowly decay your savings each year, it has averaged 1.5% to 2.0% annually over the past 30 years.

This means the purchasing power of our savings is decreasing each year by 1.5% to 2.0%. Our $100 saved today will only buy $98 worth of goods in one year. Over time this can really add up and take a toll on all the hard earned money we’ve saved.

Just as compound interest works in our favor, inflation can have a negative compounding effect on our savings. For example, cumulative inflation from 1913 to 2013 was 2,275%. This means prices increased almost 23 times. Yikes…

Investing is the tool we use to combat inflation. If we can earn a return equal to or greater than the inflation rate then we have won the battle. Unfortunately, interest rates on bank savings accounts have been extremely low for the past few decades. A bank account interest rate at 0.06% has no shot in beating a 2% inflation rate.

What Other Options Do We Have?

Currently, there are few options to obtain a reasonable yield on our cash. Let’s review some of the alternative options to a bank savings account.

Online Banks – There are a few online banks that are offering above-average interest rates right now. Many times these accounts will have minimum balance requirements. Ally Bank is an online-only bank that is offering a 2% interest rate on savings account deposits. This is a great offer, and also comes with no account minimums.

Money Market Accounts – Over the past few years, short-term interest rates have risen considerably. As a result, certain money market accounts are now yielding between 1.5% to 2.5%. Be cautious, depending on the fund you may have a minimum deposit in order to invest.

Certificates of Deposit – CD’s have always been an option to park your short-term cash. The one downside is that CD’s often have low liquidity, meaning it can be difficult to sell your investment and receive your cash. Currently, most CD’s are offering a range of interest rates right now ranging from 2% to 3% depending on their maturity. However, investors should be cautious as CD’s can come with early redemption fees for early withdrawals.

As short-term interest rates continue to rise, investors will continue to have a variety of options to stash their short-term cash savings. With bank savings account interest rates being so low right now, Smart Saver may be an excellent alternative. Smart Saver and Smart deposit are great tools for the everyday investor.

If you’d like to give Smart Saver a try, sign up here!

Robinhood 3% Checking Account: Here Is The TRUTH…

On December 13th, Robinhood went viral. Most of us know Robinhood as the commission free brokerage account we can use to buy and sell stocks for free. All of the sudden, they were rebranding themselves as a 3% interest bank account!

For those who don’t know the difference, a bank account is a place to store your money. Typically, this is with a checking or a savings account. A brokerage account on the other hand is totally different. This is an account where you can buy and sell securities like stocks and bonds. Fundamentally, they are entirely different financial services.

Here is the email Robinhood sent out to users of the platform…

Screen Shot 2018-12-20 at 9.50.16 PM.png — Robinhood Email

Within the email, this is what they laid out…

Earn 3% on Your Money

You’ll earn 3% on all the money in your checking AND savings every year. That’s a free $240 every year for the average American family with $8,000 in the bank.

No Fees, No Commitments

Say goodbye to the sneaky fees big banks charge. Robinhood Checking & Savings has no minimums, no monthly fees, no overdraft fees, and no foreign fees. Fee free, for real.

Access 75,000 free ATMs

Access more free ATMs than with the 5 largest banks combined. Search for the nearest ATM in the app, or drop into your local 7-11, Target, Walgreens, or Costco. Cha-ching.

All in one app

Invest, manage your money, deposit checks, get 24/7 customer support, and more—all on the Robinhood app.

Supplies are limited. Update to the latest version of the Robinhood app to get early access.

It is important to note that since the circulation of this email, Robinhood has completely rebranded the service and removed all mentions of Robinhood Checking & Savings from social media. Emails, however, live on forever.

This leaves us with a number of questions. Why did Robinhood rebrand the service to Robinhood Cash Management? What was all the backlash over? Is a 3% checking account actually possible? Let’s go ahead and answer…

Robinhood 3% Checking Offer

After you clicked the email and opted in to get early access, you were added to a waiting list to get access to Robinhood Checking & Savings. Personally, I was 546,624 on that list.

Screen Shot 2018-12-20 at 9.56.51 PM.png — Robinhood Email

Based on the initial claims from Robinhood, they were offering a 3% yield checking and savings account that was SIPC insured. Don’t worry, we will get to that later…

Typical banks are FDIC insured. The Federal Deposit Insurance Corporation is an independent agency that protects you against the loss of your insured deposits. If a bank goes insolvent and they are unable to return your deposit, you are covered by FDIC insurance. FDIC covers you on bank products like checking accounts, savings accounts and CDs up to $250,000.

SIPC insurance is entirely different. The Securities Investor Protection Corporation protects against the loss of cash and securities, such as stocks and bonds, held by a SIPC member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

Check out this video by Graham Stephan for a great explanation…

Robinhood was aiming to offer bank accounts covered under SIPC. Since they are a brokerage firm, they believed that the cash held in customer accounts would be covered by SIPC. Turns out, they were wrong about that one… 24 hours later, the SIPC came out with a statement regarding the Robinhood 3% SIPC insured bank accounts.

“SIPC protects cash that is deposited with a brokerage firm for one limited purpose … the purpose of purchasing securities,” according to a statement from SIPC President and CEO Stephen Harbeck. “Cash deposited for other reasons would not be protected,” he said in the statement. “SIPC does not protect checking and savings accounts since the money has not been deposited for a protected purpose.” – USA Today

The bottom line here is that Robinhood was looking to insure customer accounts through SIPC by using what they thought was a loophole. Since Robinhood is a brokerage firm, it seemed feasible to them that these funds would be protected under SIPC. What they missed was the fact that SIPC only protects cash deposits for the purpose of purchasing securities. These advertised Robinhood Checking & Savings account were not designed for the purchasing of securities. Based on that distinction, these accounts were not eligible for SIPC insurance.

Now, before you begin to panic and transfer your securities out of your Robinhood account it is important to note that your brokerage account with them is SIPC insured. This account is designed for the purpose of purchasing securities. The cash and securities are insured in the instance that Robinhood goes insolvent. If they lose your cash or securities, you are covered within the limits of SIPC.

So, the party is over for Robinhood. Without SIPC insurance, putting your hard earned cash into a Robinhood Checking or Savings account is extremely risky. If they ended up losing that money and going insolvent, you are out of the money.

As mentioned earlier, Robinhood has now removed all traces of the 3% bank accounts and replaced it with the label of Robinhood Cash Management. There is no information on the site other than this banner.

Screen Shot 2018-12-20 at 10.24.53 PM.png — Robinhood Cash Management

Robinhood struck a chord with a lot of people who are fed up with the paltry rates offered by banks today. The fact that over 800,000 people signed up for early access shows that many people are looking for better options outside of keeping your money in the bank earning an interest rate that does not keep up with inflation. We are hoping that Robinhood is able to figure out a way to offer banking solutions to customers, but for the time being it looks like this is still a fairy tale for this fintech company.

How To Make A Monthly Budget (That You Actually Stick To!)

You know you’re officially a responsible adult when you actually sit down and write out a budget. Our job is to motivate you to put this on the very top of your to-do list.

But first we want to offer the following (scary) facts about what happens when you DON’T stick to your budget:

The average American household carries more than $135,000 in debt. This includes mortgage loans.
A whopping 75 percent of Americans are in debt.
The sum of consumer debt totaled $3.898 trillion in 2018, representing a leap of 7.6 percent over last year.
Excluding a mortgage, average consumer debt per capita hovers around $11,800.
88 percent of graduates from private colleges had student loans.
People are using way too much plastic! The average credit card debt is around $5,800 for households that carry a balance – which by the way is 43 percent!
About 15 percent of American families are living well beyond their means. In other words, they are spending more than they earn on a monthly basis.
According to recent reports, credit card debt hit $810 billion in the first quarter of 2018.

Why are we throwing all this grim news in your face? #1, to educate you with the startling statistics that many adults are facing. Then #2, to help you find a way to stay OUT of that pool of percentages.

The solution? Three words: Make A Budget. Then three more words: Stick With It.

For starters, toss out the notion that having a budget is a bad thing or that you have to wrestle with columns of numbers to make the bottom line tied up in a neat and tidy knot. Sure, you want your expenses to be equal or less than your income, but we promise, this can be done without an excessive amount of sweat (or tears).

A budget is simply a plan for how you will spend your money. And it’s also an accurate assessment of how much money you earn.

Living within a budget is actually the opposite of stressful, because you will have complete control over your money and your spending habits. We’ve all been victims of shopper’s remorse, where we over spent and felt terrible about ourselves. Worse, still, the things we bought were non-returnable! If you have a budget, all your purchases will be planned except for small splurges. You will know at all times what you can afford and what will get you in over your head. After all, wouldn’t you rather save up for a week in the Caribbean than toss it away buying drinks for your friends every Friday night?

Like all things in life, moderation is key here. If you map out a too rigid budget, you will want to rebel in the same way you scarf down cookies at 2 a.m. after a day of kale and unflavored mineral water. Keep your spending plan doable by building in flexibility. There are times of the year – like the month of December – in which you will spend more, but make up for it with a lean January. A budget can be a very positive addition to your life because you will have a better handle on your finances. No more throwing money away on things you can’t even account for. What’s more, a budget can help you squirrel away money for a car, college, a vaca, or your first house.

Expenditures are what it costs to live your life. Some are fixed, such as rent or car payments. Others are variable, like weekly groceries and weekend entertainment.

Income is any money you receive, such as your paycheck. You can always beef up your income with a part-time job or side hustle.

Probably not the best idea to jot your budget down on the back of a paper napkin at the coffee house on a Saturday morning. You want something semi-permanent that looks official so you will respect it.

In order to stick with your budget, you have to find some way to organize it and keep an eye on it. If you want to go low-tech, draft up a spreadsheet with columns for income and expenses. You can use Excel (or a similar program) to effortlessly total columns. In other words, it does the math for you.

If you’re not fluent in Excel, take a class and learn it for goodness sake, because you will use it in virtually every facet of your life.

Here is a video from one of the blog authors on how to create a monthly budget in excel!

Have a smart phone? There are dozens of easy to use apps at out there to choose from.

In other words, there are tons of tools out there to help you, including online budget sheets, software, and spreadsheets. The key here is to find a system that works for you. While it won’t be as much fun as beer and hot wings, making a budget shouldn’t be grueling.

Budgeting Your Money 101

Step 1: Identify your goal.

Maybe you just want to track where your money is going on a weekly basis. Or maybe you want to start saving up for a new toy, or better yet, to have a cushion if you did
happen to lose your job (industry experts recommend stashing away at least three month’s worth of income for emergency savings). Maybe you’re working your way out of debt. Or working hard not to get into it. Setting your goal is a good way to see the big picture before you start tracking every dollar you spend.

Step 2: Determine your income.

This can be from a single job, or, if you’re smart, from your main job and your side hustles. List every source of your income and total that on your budget sheet.

If you work on commission or via client contract, get a handle on your monthly income by averaging your payments over the last 12 months. Remember, too, that this income isn’t always consistent, so plan ahead for the leaner months.

Step 3: List your monthly expenses.

Itemize your monthly expenses including fixed costs such as utilities, gas for your car, rent or mortgage payment, cell phone, internet, water, loan payments, etc. Then list all your variable expenses, and be honest with yourself about this column. No, sushi dinner every night is not a variable expense. It’s a splurge (more on this later).

However, your grocery costs would be considered variable because you have ultimate control over what you spend. Yes, it’s nice to buy brand labels, but generic store brands are just as good and will save you a bundle.

Another pro tip is to cut down on your liabilities. These are things that you own that are regularly taking money out of your pocket. Think; boat, RV, motorcycle!

Step 4: Prioritize items.

Start with the things you absolutely need or are committed to pay. This ensures that you have money for the most urgent needs.

Step 5: Add your “guilty pleasures” at the end.

This includes everything from Friday night pizza to movies on demand.

Step 6: Plan for the unexpected.

Adding an allotment for an emergency fund is a fantastic idea. Saving money for emergencies helps stamp out the possibility of future debt if you have a medical emergency or some other crisis arises.

Step 7: Look at the bottom line.

Total your expenses and see if they are equal to or lesser than your income. If you have income left, congrats! You have a surplus. If your expenses are more than your income, you’re looking at a shortage, and you will have to do some work to modify your budget (hint: take a second look at your splurges).

Step 8: Revisit goal setting.

Set both short and long-term goals. This is imperative to staying motivated. Maybe you’ve had your eye on a leather jacket or backpack. Or, longer term, you want to upgrade your ride. If you keep plugging away at your savings, following your budget to a T, and staying accountable (no, you don’t need to track every penny…but you need to know where you’re tossing away $20 bills) you can meet or even exceed these goals.

Remember that a budget is meant to be fluid and flexible. Things can change (and they usually do!) Your income may go up (Yay!) or you might pay off your car loan. Conversely, you may have unexpected car repairs or a doctor’s bill for that stubbed toe that turned out to be broken.

Budgeting By the Numbers

There are some budget ratios people swear by that may work for you as well. One is the “50/30/20” rule. This refers to allocating 20 percent of your income should go towards savings. Meanwhile, another 50 percent (maximum) should go towards necessities, which leaves you with 30 percent going towards discretionary items. This rule of thumb is popular, quick and rather easy to follow.

Get Over The Excuses!

“I don’t have enough money to budget.”

You’re living, right? You have a roof over your head and clothes on your back and food in the pantry? Then you have enough money to organize and track. Chances are good you will surprise yourself when you see how much of your income is going out the door on discretionary spending.

“It’s too complicated/time consuming/boring.”

You work at least 8 hours a day, right? Clean your apartment? Stand in line at DMV?
These are prime examples of the mundane aspects of life. Making a budget will take less time than helping your mom program her Roku. Once constructed, it’s all a matter of updating numbers weekly and then congratulating yourself on a job well done.

“Budgeting makes me feel worse about my money.”

Actually, budgeting empowers you by giving you a full picture of your spending habits as well as the many areas in which you can change them. There’s nothing worse than having nothing to show from your paycheck. Budgeting is a positive step in financial freedom.

“Budgeting will force me to eliminate things I like.”

You will have a category in your budget for discretionary spending, and so if you want that croissant, have it! Just track the money you shell out for bakery items and if you’re not happy with what you see, change your routine. And maybe start baking.

Here are 11 handy, even humorous, suggestions for keeping your lifestyle within your budget boundaries.

Don’t carry your credit cards around every day in your wallet, or for that matter, near your computer with access to online shopping.
Pay for purchases with cold hard cash! It’s amazing how reluctant you will be to part with those $20s when you physically see your hard-earned money going for that latte or lunch.
Along the same lines, put a specific amount of cash in an envelope for the week, and when it’s gone, it’s gone. This will make you think twice about those little nickel and dime expenses and limit impulse spending. In a very short time, you will find yourself toting around an insulated coffee container from home rather than stopping at Starbucks.
See how far you can stretch that cash. If you pass up the fancy salad for lunch, you will have enough cash for movie tickets Saturday night.
Track every dollar! Save all your receipts and review them every weekend to analyze your spending habits over time.
Make smart choices. Choose water over soda. This applies to the soda machine you visit at work during the 3:00 slump and also your order at restaurants. If plain water isn’t palatable, add a lemon wedge or cucumber slice (which of course you bought on sale!)
Be vigilant, even obsessive, about keeping an eye on your checking account balance. You will be surprised at the small purchases that add up to a major hit on your bottom line.
Keep a copy of your budget in a place where you will see it every single day. Tape it to your fridge. Use it as your home screen saver. Go crazy, laminate it and prop it up next to your computer. Be creative, but be committed.
Borrow, don’t buy books. Yes, there is still a place called a library that stocks a good inventory of best sellers. Or snag books from friends who recommend them. Bonus: you can give them back after they’re read, saving you space in your apartment.
Use every drop of that laundry detergent. Fill the bottle with water and shake it out. This also goes for dish soap, shampoo and any other bottled liquid. You get the idea here.
Take at least 24 hours to consider anything other than minor purchases. Sleep on it.

Making a budget – and sticking with it – is a rite of passage for young adults who want to manage their finances, rather than having their finances overwhelm them. Remember, you can always add to the income column with a side job, or subtract from the expenses by wearing your Nikes for one more season. Be creative. We know you’ve got it in you.

Once you have a budget established and your spending is under control, another step you might want to take as an adult is to begin establishing credit. Your future self will thank you! Check out our comprehensive guide on credit scores.

Got a budgeting tip to share with us? Comment below!