Six Basics to Consider Before Investing with a Robo Advisor

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You’re looking to grow your money, but you’re not quite sure how to get started.

Should you go robo?

Robo advisor, that is. A robo advisor is a digital investment management service that allows you to input your funds, financial data and investment preferences online and designs algorithm-based recommendations based on your responses. While a human advisor may charge one percent or more of your invested assets to help you manage your money, robo advisors typically charge only a fraction of that amount in management fees. Some allow you to open an account with only a few dollars, and others don’t even require a minimum deposit to open an account.

Major investment firms have entered the growing robo advisor market with their own computerized services. As new advisor options emerge and evolve quickly, it’s a good idea to consider all options carefully. Examine the services industry experts provide to know what you should look for in an advisor.

Here are some considerations to factor into your research on robo advisors as you evaluate whether they are right for your needs.

1. Reasonable management fees and small initial investments. Robo funds often have preset investment choices based on client questionnaires about risk tolerance and investment goals, and they typically charge lower fees than human advisors. Human advisors may charge upwards of one percent of all the money you have in your account, while robo advisor pricing options are typically a fraction of that.

2. The best robo advisor sites are streamlined and simple. Good robo advisor sites provide clearly organized, straightforward advice. For example, one of the leading robo advisor sites makes sure you have an emergency fund in place before you start selecting investments. That’s the kind of good financial practice you should look for in an advisor, robo or not.

3. Federal regulators are still evaluating robo advisors. The Securities and Exchange Commission has its own recommendations for investing with robo advisors, but the most important unanswered question is whether robo advisors (and the companies that own them) really exercise fiduciary responsibility by truly putting the needs of the investor first. It’s essential to understand the risks involved with entrusting your investments to the robo advisor market, where restrictions and consequences are still not completely clear.

4. As major investment firms and even banks enter the market, it’s likely that more diverse options in advisory services and pricing will emerge. As big investment names are starting to offer their own robo advisor options for small investors, different robo advisor providers will likely start to differentiate their marketing, services, and fees. It’s always smart to shop around for the best deals and fit for you.

5. Robo advisors are no substitute for a basic personal finance education. It’s easy to sign up for a robo fund or even find a fee-only financial planner, but it’s still important to cultivate your own financial knowledge. Consider public resources on basic financial topics, the range of money management resources offered on Practical Money Skills for Life, or workshops at your community college or public library. Self-education is the most powerful tool for any endeavor, but it’s especially essential to handling your finances.

6. Robo advisors aren’t capable of providing truly personalized investment advice. An algorithm can’t ask countless questions about your long-time financial goals and values or answer all of your queries during a major market change. Though robo advisors provide a low-cost way to get started in investing, you won’t have someone who can give you personal advice when unexpected situations arise. Before you sign up, take some time to consider how much personal assistance you think you’ll need.

Bottom line: Like most computerized services, automated financial advice and investment planning will probably get more sophisticated with time. But while robo advisor services allow lower initial investments and fees, it’s important to study the pros and cons first.

By Nathaniel Sillin

Choosing the Right Project for Your Home Renovation

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Before the housing market collapse of 2007, all renovation projects – no matter how expensive – seemed like winners. Today, home renovation is a whole new ballgame and why you should carefully research any potential fix-up project you’re planning for your home.

For the past 14 years, Remodeling magazine’s annual Remodeling 2016 Cost vs. Value Report (http://www.remodeling.hw.net/cost-vs-value/2016/) has tracked cost recoupment on renovation projects nationwide and by region, as local tastes are important. Based on trends from transactions tracked in 2015, several guidelines emerged:

  • Aim to cover your costs. Pre-housing crash, people were investing heavily in their homes and seeing returns greater than 100 percent on their spending. In 2016, the cost and return at resale for the projects listed in the report averaged 64.4 percent for a home sold within a year of the upgrades. Making a profit on a renovation isn’t guaranteed, so aim instead to tackle projects that will allow you to recover your costs at the highest possible level.
  • Smaller projects focusing on essentials can provide better returns. A decade ago, it was an upscale outdoor deck or a gourmet kitchen. These days, new doors, which can cost under $500 to replace and install, are one of the most popular projects. A high quality fiberglass entry door replacement can recoup an average 82.3 percent of costs; a garage door replacement can return over 90 percent.
  • Upgrade rooms and spaces, but keep it modest. A minor kitchen remodel including upgraded cabinet fronts, new hardware and the addition of one or two energy-efficient appliances averaged a return of more than 83 percent of original cost compared to the 65 percent for the gut jobs.

After assessing the national and regional averages, you’ll need to evaluate your personal situation, local home market and the type of homes that are selling in your neighborhood. Let’s start with the questions you need to ask yourself:

  • What kinds of improvements make sense for my neighborhood? Generally, exterior renovations that complement nearby homes have greater value, so consider how your new exterior might fit in with other houses on the street. As far as interior renovations, keep your spending in line with your future sale price. For example, a $100,000 kitchen in a home that might not sell for more than $300,000 would probably be a wasted investment – but a kitchen update worth $10,000 or less might help your house move quicker once it’s listed for sale.
  • How long will I stay post-renovation? Remember, the latest Remodeling magazine numbers cover only one year of cost recovery on projects. People renovate for a variety of needs, either to make the home more livable or to make it more salable. The longer you stay, the more you’ll get out of the investment – but if you have to sell soon, think carefully about what you’ll need to spend to attract a buyer.
  • Will this send my property taxes through the roof? Renovation projects that create larger homes can risk higher property taxes. You should think through potential property tax impact not only for yourself but also for your future buyer. Consider checking with your local residential taxing body to determine “before and after” property tax rates for renovated properties in your vicinity. Sometimes this information might be available on their websites. If you know a real estate broker with significant knowledge of your immediate neighborhood, you might consider speaking with them about this issue.

Consider consulting experts to help you answer the basic questions you’ll have as you make this decision. Start with trusted financial professionals who can offer a second opinion on what you’re planning to do, how much you want to spend, and what particular tax issues may arise when it’s time to sell. If you need to borrow to renovate, that means it’s time to make sure your credit reports (https://www.annualcreditreport.com/index.action) are accurate and you are pre-qualified or pre-approved for your loan based on what is required.

In short, do your homework before you renovate your home.

Bottom line: In 2016, home renovation is far from a home run. Know how long you’re planning to stay in the home before you start and make sure the project you choose makes sense for your local marketplace or you won’t get your money back.

By Nathaniel Sillin

 

2 Summer Money Saving Tips

Saving for beach vacation or retirement, with pink piggy bank and sunglasses. Studio shot with plain blue background. Sharp focus on the five dollar bill. Space for copy. Warm color and directional lighting are intentional.

Summer is here, and the only thing that can rise higher than the temperatures on the beach this season, is the amount of debt you can go into if you aren’t careful! Look we get it- summer is awesome, and it’s certainly the best time all year for parties, vacations, and dozens of fun outdoor activities; but on the other hand, it’s also primetime for overspending since there are  so many desirable things to do or buy during those 3 highly anticipated months.

While they can certainly range in cost, from baseball games and concerts to just treating yourself to the trendiest swimsuits, the bottom line is that the natural good mood summer brings along makes all of us loosen the reins on our wallets a bit. So, how is a family supposed to do all the fun things they’ve been planning without going broke?

They can do so easily by being smart and strategic with their spending habits in certain other areas of their lives that actually benefit from special pricing/availability during late May through early September. Here are two helpful tips that will have you saving more money for summer fun in no time:

  1. Grow Your Own Fruits and Veggies-The minute the days get a bit longer and the sun stays out after you’ve come home from work, the grills come back to life and it’s time to eat outside! The excitement that comes along with this moment, however, can quickly cause us to overspend considerably on a wide variety of food products- from high quality meats to fresh seasonal fruits and vegetables. Instead of rushing to Whole Foods where anything labeled “organic,” is going to cost you at least ten dollars, look into growing your own ingredients. For example, the majority of fruit/veggie seedlings come packaged at just about every food, convenience, or hardware store for about $2 to $3; the amount of produce those seedlings can yield is pretty incredible compared to the few tomatoes or peppers the same money would get you at the store. Better yet, the savings for this type of action don’t end when the summer does, as any leftovers can often be pickled or canned for use in the fall and winter months. Why spend money on expensive roasted peppers during the holidays when you can make jars of your own for free in September? Depending on where you live, you may also be able to join a local group where you can swap ingredients you have an overabundance of or even sell them at local farmers’ markets. Additionally, the feeling of accomplishment and just outright better taste that comes with freshly grown produce cannot be denied.
  1. Leverage the Nice Weather Where You Can to Save Money– The warm temperatures that come with the summer months make it capable to do certain money saving activities that are sometimes unavailable throughout the rest of the year. For example, put your expensive gym membership on hold and get your exercise from either your yard work or running outside while the weather permits. Instead of going out to a restaurant or bar every time you want to see your friends/family, invite them over for some drinks on your back deck; not only will you be saving money on the elevated bar and food costs that tend to occur in the summer, these types of gatherings are usually more intimate and enjoyable anyways. When it comes to entertaining the kids, it may seem like EVERYTHING costs money. Well during the summer, get them out of the house and down to your local playground, park, lake, or beach. These types of days are fun for the whole family and while you may feel like you are away from home on vacation, in most instances, it won’t cost you a dime outside of maybe parking. Lastly, you can even think outside of the box a bit and purchase needed items that are drastically reduced due to not being in demand during the warm summer months. For example, jeans, sweaters, winter coats, and home improvement tools for the colder season (like rakes, shovels, and snow blowers) should all absolutely be purchased during their cheapest time of the year. If you wait until last minute after summer ends, you are going to get nailed with low product availability and sky rocketed pricing.

 

Great Jobs for the Semi-Retired

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One of the biggest keys to having a happy retirement is creating a plan to do what you really want to do. After all, you’ve worked a long time to get to the point where you get to choose your activities. If your ultimate retirement involves a lot of R&R, and you’ve got the resources to do it, then by all means go for it. On the other hand, you may be one of the growing number of people who find that they still want to engage in some gainful and rewarding work during their advanced years. If you fall into that category, there are any number of positions that can be fun and challenging while putting some added dough in your accounts.

Start your own business
If you’ve had that entrepreneurial idea knocking around in your head for a while, now could be the time to best time to explore it. Make sure to research the industry and investigate the feasibility before you throw too much of your nest egg into it, though.

Consult or freelance
Freedom is one of the sweetest rewards of retirement (or semi-retirement). You get to decide how you want to spend your time, and that is a very wonderful thing. Maybe you enjoyed the work you did but would just prefer to devote less time to it or create your own hours. By doing similar work outside the confines of your previous employment, you can create your ultimate working set-up.

Blogger/writer
No matter whether the subject matter is related to your profession, a life skill or a hobby, there’s at least a few things that you know a lot about. Many, many people make good money creating and marketing blog about specific areas of their knowledge. Get enough visitors coming to your site and advertisers will shell out the money to be a part of it.

Online seller
What do you enjoy bargain hunting for? Clothes? Tools? Thrift store artwork? Websites like eBay and Craigslist give you a powerful tool for selling items you find at garage sales, swap meets and the like. The work isn’t too strenuous and you get to enjoy the thrill of the hunt.

Craftsperson
Do you love the meditative task of carving the intricate pieces of a homemade birdhouse? Do your friends and relatives beg you to make one of your specialty craft items for them? If so, you may be able to turn your passion into profits. Etsy.com is a great place to test the waters to see what kind of market there is for your wares.

Teach/tutor
You’ve made it this far, so you’ve definitely got some wisdom and practical information you can pass along. Whether they are in school settings or one-on-one, explore options for expanding the knowledge base of a younger generation.

Fix-it person
Lots of folks have nagging little jobs around the house that they don’t feel particularly inclined to call in a full-on home repair crew for. By making your services known, you can stay active while picking up some extra moolah.

Guide
If your mental image of the best possible retirement involves meeting new people and talking about subjects you’re passionate about, consider opportunities to lead others. Whether it is on a hunting trip, in a museum, or on a history tour, being a guide can one of the most fun positions you’ll ever hold.

Pet care
There aren’t a whole lot of jobs out there that would cause you to say, “I can’t believe I’m getting paid to do this!” But if you love animals, being a pet-sitter or a dog walker could have you singing the praises of your labor.

Coach
Many young people need mentors in their life. Beyond just diagramming plays, being a coach gives you an opportunity to positive influence the lives of kids who could use the benefits of your guidance.

Nonprofit work
Did you ever dream of a job that would allow you to help those in need or benefit your community, but you weren’t able to make the financial sacrifices to do it in your younger years? Well now is your chance!

Create your own job
Many people these days enjoy jobs that didn’t exist five years ago, or didn’t exist until that person invented it! If there’s something you love doing, brainstorm ways to get paid doing it. Think expansively and creatively.

 

© 2013 BALANCE

Five Essential Steps to Financial Independence

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It’s never a bad time to consider life, liberty and the pursuit of happiness but Independence Day offers us a special opportunity. For me, those concepts also have a great deal to do with financial independence. After all, the ability to take care of yourself and your loved ones throughout life is a great source of happiness and a way to avoid stress and worry. And never forget that greater financial freedom isn’t just good news for you – financially healthy households make us all stronger as a country.

So make a financial declaration of independence that you can celebrate year round. I’ve boiled it down to five essential steps:

1. Plan. The only way to build a strong financial future is to live below your means, essentially to spend less than you make. The earlier you can commit to that behavior and divert funds to regular savings and investing, you’ll be in better financial shape for a lifetime. Budgeting (http://pmsfl.us/1mW4IsG) – the process of tracking income, subtracting expenses and directing the difference to essential financial goals is the way you’ll afford retirement, college for your children and a range of other financial goals.

2. Protect. Why focus on protecting your money, even before you have much of it? Because protecting your money early on will keep new money where it can grow. The first task involves building an emergency fund that will hold three to six months of reserves to cover everyday expenses if you lose your job or have to shoulder a major expense or repair. An emergency fund will help keep you from having to borrow in such a situation. The next step is insurance. Whether you purchased a home or you are renting a property, think about everything you own. How much would it cost to replace clothing, furniture, appliances and electronics? Did you also know that renter’s insurance offers liability coverage of medical or legal expenses connected to your home? Your landlord’s coverage is unlikely to cover any personal liability you incur in a structural emergency or accident and certainly won’t cover you in case of theft. It’s also important to buy quality auto, home, health, and when relevant to your circumstances, disability and life coverage. Insurance is about preventing a range of financial setbacks.

3. Learn. While you’re building your emergency fund, become a voracious reader and listener on financial topics. If you have the time and resources, take classes on the three major financial behaviors – saving, spending and investing. Consider working with a qualified financial or tax expert to determine if what you’re learning is right for your situation. Whether it’s a house, a car, a continuation of your education or a family, start linking this knowledge with accomplishing actual financial goals.

4. Manage. Evaluate assets for growth and income – stocks, real estate and other assets may fluctuate in value over time, but if they’re producing dividends or income, that’s a worthy counterbalance to market variations. Keep studying various asset classes of investments so you can build and adjust your portfolio as needed over time. Also, don’t forget to study the tax ramifications of any investment you make – taxes are some of the most expensive costs we pay. However you choose to save, invest or spend, do so with the least cost possible. In life, small amounts add up – investment fees, shipping fees for goods you order online, even the extra bag you pay to check at the airport. Always question and try to avoid paying the “small” amounts that leave your wallet because they will add up over time.

5. Evaluate. Our lives don’t stand still and neither should your financial planning. Any time major events happen in your life – a new job, marriage, a baby, the death of spouse or partner – financial circumstances change. Always be ready to reevaluate your current savings, spending and investing behavior based on what’s going on with your life.

One last item to consider when thinking about financial independence is giving. We still live in a country where many people struggle to find good jobs, raise families and afford homes. Realize that there should be a part of your budget that goes toward helping the less fortunate. GuideStar (http://www.guidestar.org), Charity Navigator (http://www.charitynavigator.org/), the Better Business Bureau (http://www.give.org) or the Foundation Center (http://foundationcenter.org) all offer detailed research on charitable organizations that you use to evaluate before you give.

Bottom line: You don’t have to be wealthy to become financially independent. Be diligent with smart spending, detailed research and always prepare for emergencies. Soon, you’ll be celebrating your own financial Independence Day.

 

By Nathaniel Sillin

 

Hackers Using Your Stolen Credentials Against You in Latest Attack

Hacker With Log-In Screen,Computer Fraud Concept Background

You might be wondering what happens when all those millions of credentials are stolen and sold on the dark web. You might be one of the 117 million LinkedIn users who was a victim recently. Cybercriminals are using the information in various ways. One of them is posing as legitimate colleagues in phishing emails.

In some cases, they send a message with the subject line of “unpaid invoice” or something similar. Inside is a Microsoft Word document that includes common malware like the PandaBanker Trojan that will infect your computer and steal your online banking credentials.

To avoid this, watch for some red flags that the message is indeed phishing:

  • Unexpected attachments or links included in the message.
  • A supposed invoice is included.
  • A dialogue appears asking you to enable macros.
  • Information from your LinkedIn or other social media or networking profile is included in the message.

Be cautious about the information you post on social media or professional networking sites. This is often used for targeted phishing attacks (spear-phishing) and are so well done in many cases, that if you are not paying attention, you could fall victim. Beware of popup or warning fatigue. This happens when a user gets inundated with dialogue messages whenever browsing the web. The hackers count on this happening and will implement malware behind those buttons. If you click the wrong one, you may lose a lot more than patience, especially if the malware is PandaBanker or others like it.

In addition, never enable macros unless you are 100% certain that it is necessary or that you created them yourself or someone you know created them. Macro malware is on the rise these days and has been seen in a lot of the newly created versions of older malware such as Dridex, which is found in 15,000 messages per day and is responsible for an estimated $15 million in corporate account takeover losses alone.

© Copyright 2016 Stickley on Security