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Starting a Business With a Friend: 4 Things to Consider

The ultimate question: Could you and your friend make the perfect business duo? The answer may be more complicated than you think. You love spending time with your friend and the idea of becoming entrepreneurs together. Why not fulfill your dreams with each other? Companies like Airbnb and Ben & Jerry’s had success in this area — they all started from friendships.

But much more goes into starting a business with a friend. You may make great business partners, or you could wish you had taken your venture solo. Before making any financial decisions, analyze the pros and cons and ask hard questions. For example, will you equally invest? Who will take on which tasks and responsibilities? Sift through the easy and hard questions to see where your business friendship lies.

To help you and your friend make a confident and informed decision, skip to our flowchart or keep reading.

karen-gordon-quote

Questions to Ask Before Going Into Business With a Friend

Before jumping into your business plan, ask the hard questions. These can be tough to ask and answer, but they could save your friendship from a business relationship gone sour.

Question 1: Do You Share the Same Values?

Depending on your life stage and goals, your values could differ greatly from those of your potential business partner. You may appreciate living a relaxed lifestyle that gives you the financial freedom to do what you love, while others may value a fast-paced lifestyle filled with activities and long workdays. Differences in values could spark tension in your business relationship.

Ask yourself: Do you and your potential business friend have the same values? If so, great! If not, note your differences and if they’re worth working through.

Question 2: Do You Share the Same Business Goal?

To make sure you’re on the same page, schedule a brainstorming session with your friend. Map out your one-month, six-month, one-year, and five-year goals for your startup. Is your goal to make a certain amount of revenue? To hire a certain number of full-time employees? Or to take your business idea global?

If you have the same intentions, move on to question three. If any of your goals contrast, there may be trouble in paradise. See if you can work through your differences before investing your time and money.

Question 3: Do Your Skills Complement Each Other?

You and your friend each have your own strengths For example, you may be good at time management while your friend is better at sales. For skills you’re both lacking, think about how you’ll fill in the gaps. If you and your friend’s startup plan has a budget for hiring freelancers, or one of you has the dedication to learn something new, this may not be a concern. No matter what, especially if you’re bootstrapping your business idea, it’s essential to talk through it.

If you don’t compliment each other’s needed skills, who will step up and learn them?

Question 4: Do Your Career and Lifestyle Habits Align?

Depending on your business goals, this could be a make or break question for a professional partnership. For instance, one friend may be a morning person while the other’s a night owl. One can take over morning meetings and emails while the other’s responsible for evening website development and customer service.

If one friend’s lifestyle habits don’t suit the other, it may be best to opt for other business opportunities. While starting a business could adjust your habits, it’s easy to fall back into old ones from time to time.

baylie-carlson-quote

The Pros and Cons of Doing Business With Friends

Before entering any business arrangement, it’s reassuring to weigh the pros and cons. Could your new business idea benefit or hinder your future relationship and career?

Pros: You Have a Friend Through the Ups and Downs

Starting a business with a friend is similar to marriage — you’re there for each other through the good and bad. Whenever you’re having trouble, you know who you can go to for help. And you’ll be able to do most tasks together. For example, approaching investors as a team vs. going solo could put your nerves at ease.

Cons: You Know the Same People

Instead of getting together for your weekly catch-ups, you could spend all day together! While this can be exciting, it can also be hard to leave work at work. When you both hang out with the same people, there may be little room to disconnect from each other and your business.

Pros: You Understand Each Other’s Strengths and Weaknesses

You likely already know how each other operates and your strengths and weaknesses. Instead of learning the way a new business partner functions, you already have the upper hand. On day one, you and your partner could delegate tasks that fit everyone’s strengths best.

Cons: Your Friendship Could Turn Strictly Business

Your current friendship can be hard to separate from your new work partnership. Taking your work too seriously could stiffen your current relationship. Even after your work’s done, “friend” time may slow down. To have the best of both worlds, over-communicate throughout your entrepreneurial adventures.

mike-falahee-quote

Pros: You Feel Comfortable Communicating

You may have been friends for months, years, or even decades. Having a strong friendship foundation helps bolster your communication in the workplace. Plus, you most likely know how your friend may react to a situation gone wrong. Take note of your friends’ communication habits and foster them throughout your business relationship.

Cons: It’s Easy to Let Emotions Get the Best of You

Be careful not to let your emotions dictate your business decisions. A situation could happen in your friend group that makes its way into the office. To avoid any personal matters in the workplace, come to an agreement — no drama. If situations arise, take some time off to clear your mind, rest, and come back more motivated and inspired.

Pros: You Get to Spend More Time With Each Other

You get to spend countless hours talking and doing business activities together. You could spend all day tackling business tasks and wrap up the workday chit-chatting about your lives. It’s an amazing opportunity to spend more time with your friend without letting other responsibilities slip through the cracks.

Cons: Friendship Failure Could End in Financial and Business Failure

When tension builds in the workplace, it could damage your business outcomes. Not wanting to attend a meeting with your partner could halt business productivity, or worse, end it. To avoid losing profits on your friendship and investments, you should both outline an exit plan if things go wrong.

Tips for Starting a Business With Your Friend

Before toasting to your other half and investing in your passions, properly prepare yourself. Show up to your new business like you would a new job. Have your plan documented before building your business empire.

1. Nit-Pick Your Business Plan

Small issues could grow months or years after starting your business. To avoid future problems, talk through small and large inconsistencies with your partner. Having different lifestyle habits may not be an issue now, but could be difficult after a year of working together.

2. Communicate Often

About one third of projects lack proper communication. Avoid project or business failure by finding a communication method that works for you and your partner. Daily catch-up meetings or weekly email updates are a few examples. Make it enjoyable by sipping your favorite coffee or eating your lunch while playing catch up.

3. Establish and Honor Boundaries

Eliminate tension in the workplace by setting a rubric for working hours. Avoid talking about personal matters until you step away from your work tasks. If you and your partner need to establish additional boundaries, clearly outline them as they come up.

4. Make it Official With Contracts

Once you’ve worked through any complications, put it all in writing. If things were to go wrong, documents and written statements can be referenced in court. To do this, contact a lawyer and draft up a business plan. Any business promises you make should be in writing for any miscommunications. Compensation rates, profit shares, investment contributions, and business accounts are a few things that should be listed on this document.

Before investing your time, energy, or money into your startup dreams, make sure you’re fully prepared. Could you and your friend be great business partners? Take our quiz below to find out. Don’t forget to keep track of your budget and investments throughout the startup process.

Starting a Business With a Friend: 4 Things to Consider appeared first on MintLife Blog.

Source: mint.intuit.com

How a financial coach can help you get out of debt

If you can’t give up your daily latte, your twice-a-month false eyelashes or weekly fresh flowers, a financial coach won’t judge you.

But that coach or counselor will stress that you won’t reach your financial goals if you don’t give up most of your splurging.

“I had one client who was spending $200 a month to have people glue eyelashes on her lashes every two weeks,” said Christine Lane, an accredited financial counselor. “Until I met her, I didn’t even know that was a thing.”

“Everyone has different things that are important to them,” said Bridget Todd, head of trainer development at The Financial Gym, a credit coaching business. “A big one for people is often personal or mental wellness. Some people pay for an Equinox membership and they don’t want to go to a cheaper alternative. For others, an acupuncturist or a chiropractor is important to them to feel their best. We find the non-negotiables and ask them what expenses can come out.”

See related: How to match your spending with your values in 2021

What a financial coach does

A financial coach or counselor helps clients take a comprehensive look at all of their finances, bridging the gap between a debt counselor, who focuses on reducing your debt, and a financial advisor or planner, who focuses on helping you build wealth, Todd said.

“We focus on your entire financial life,” she said. “We take a deep dive into the day-to-day, how you’re spending your money. We give you different scenarios: if you do this, this will happen. We allow you to improve your finances and also help you feel comfortable and live your life.”

No matter how bad your debt or how frivolous your spending, financial coaching is a collaborative, judgment-free zone. A coach or counselor helps clients develop healthy spending habits, reduce debt, and build short-term and long-term savings. The goal is long-term financial wellness, said Rebecca Wiggins, executive director at the Association for Financial Counseling and Planning Education.

“A financial coach views the client as the expert in their own life, collaborating with them to define their goals, create solutions and an action plan that helps them achieve their goals,” Wiggins said.

Like many coaches, Lane uses a “spending, debt and savings” spreadsheet to open her clients’ eyes to their true financial picture. She shows clients how much they can spend every week or month on wants without going further into debt. Entering higher or lower spending or savings numbers in the spreadsheet immediately changes the long-term picture.

“The key is telling them what the number is,” Lane said. “I tell them, ‘Here are your fixed expenses and here’s what you have left. Focus on spending no more than $200 this week.”

Good budgeting is about categorizing expenses.

  • Amassing credit card rewards and points is more important than paying off the balance every month.
  • Investing in individual stocks is the best way, even for financially inexperienced people, to invest.
  • Supporting your adult child financially is a good idea, even if you haven’t saved for retirement.
  • Techniques to curb spending

    Like many coaches and counselors, Lane asks her clients to give up all credit card spending for a set period – in her case, three months.

    “I once had a woman who was $10,000 in credit card debt and was paying a ton of interest say she didn’t want to give up earning her points and that she’d already gotten two free hotel rooms,” Lane said. “I told her, ‘You’re going to pay in interest so much more than those free hotel rooms.’”

    Another technique Lane uses is asking clients to set just one so-called buy day a month: all other days are window shopping, or more likely now, screen shopping.

    “You can shop any day you want, go in person, take pictures, put things on Pinterest,” Lane said. “But there’s only one day a month where you’re actually allowed to make the purchase. If you have anything on the list that you haven’t thought of, then you don’t really want it.”

    See related: How to stop overspending during the pandemic

    Bottom line results

    Lane has worked with clients with credit card debt up to $60,000 and total debt, counting student loans, up to $200,000. Most are in their 30s to early 40s and have $20,000-$30,000 in debt.

    Many can get out of debt in about two years, she said. But these reforming spenders start feeling better about their financial life and life in general much earlier, Lane said.

    “Generally after six weeks, they say a weight was lifted from their shoulders,” she said. “They say, ‘I’m running more. I have a better relationship with my girlfriend.’”

    On average, their first year, clients at The Financial Gym see their credit scores go up more than 100 points, save $5,000 to $10,000, and pay off $5,000 to $10,000 in debt, Todd said.

    How much does financial coaching cost? 

    At The Financial Gym, coaching rates are about $99 a month for individuals, $150 a month for couples and $250 a month for business owners, Todd said.

    Fees for accredited coaches and counselors range from $50 to $150 an hour, Wiggins said. Some coaches offer packages or work on a sliding scale based on income, she added.

    See related: What is credit counseling, and how can it help you?

    How to become a financial coach

    To become a counselor accredited through AFCPE, students take one to three years to meet the education requirements and complete the exam, Wiggins said. The most common pathway is self-study with books and materials. This pathway’s cost is $1,455, including a $50 registration fee, $675 for books and materials, and a $730 exam.

    To become a certified financial coach through Sage Financial Solutions, applicants complete three modules, which can be done in as little as six months, at the cost of $1,200 and about 30 hours for the first module, $550 and 15 hours and for the second module and $750 and 22 hours plus 100 experience hours for the third module.

    The Financial Gym prepares its own coaches, which it calls trainers, with a two-week training session, then an interview with several team members, shadowing current trainers, creating mock financial plans and passing an exam with a score of 80 or higher, Todd said.

    Back to lattes and lashes

    Lane’s client still spends $200 every month on false eyelashes, which for her are nonnegotiable. But the client gave up her weekly fresh flowers, cut back on her dog walker and improved her financial picture from overspending her income by $200 a month to saving $1,000 a month, Lane said.

    “Different people have different blind spots,” Lane said. “That’s an advantage of counseling; you get a really personalized look at your needs. We try to work toward their goals, not ours. Accountability without judgment is our superpower.”

    “At the end of the day, it’s just math,” Todd said. “You have to be honest with me about what you’re willing to give up to get there.”

    Case study: From $15,000 in credit card debt to zero

    When Moira Sedgwick started working with a Financial Gym coach, her debt topped $250,000, with about $110,000 in student loans, $15,000 in credit card debt and a mortgage.

    “The bad surprise was how much debt was staring at me,” said Sedgwick, 39, who works as the director of The James Beard (Culinary) Awards and also consults in hospitality and event management. “I had always been messy at all of this. This was a way to stop being messy and own my finances.”

    Sedgwick already was paying extra on her student loans and was thinking about saving more for retirement, but her coach told her paying down debt, especially the high interest credit card debt, was the top priority.

    The next bad surprise was putting a cap on her spending. “I had only $100 a week for my fun money,” she said. “I had been spending everything that was coming in. I’m in the restaurant world, so a lot of it was dining out. I would justify it by saying, ‘This is my industry. This is my job.’

    “But no one on my job was reimbursing me. Cutting that out was a huge difference. I was getting real about how much eating out was really costing me and getting real about how much that was keeping me from my goals.”

    She still does takeout on Fridays and Saturdays – that was her nonnegotiable.

    Sedgwick, who didn’t have a lot of financial guidance growing up, said she feels like she has a partner to guide her decisions. “I finally have a support system,” she said.

    A few years in, Sedgwick has cut her credit card debt to zero and cut her student loan debt by nearly half, and paid her mortgage down to $68,000. Her credit score has improved from a respectable 740 to a nearly perfect 800. She saved up $30,000 in her emergency fund but recently used about half to buy a rental property, a longtime goal. She talked to her financial trainer first.

    “I talk to my trainer before I do anything,” she said. “That’s the only way I feel safe.”

    Source: creditcards.com

    8 401(k) Investing Tips to Maximize Your 401(k)

    woman with laptop and clipboard

    The best kind of 401(k) plan is one that is used. The employer-sponsored retirement plan is typically easy to open and fund (with pre-tax dollars often deducted straight from your paycheck), and offers tax benefits vs. saving and investing in a brokerage account.

    Understanding the nuances of this all-important savings vehicle may help catapult investors into full-blown expert territory, helping them maximize their 401(k) investing.

    While everyone’s financial and retirement situation is different, there are some useful 401(k) investing tips that could be helpful to anyone using this popular investment plan to boost their retirement savings. These 401(k) should apply no matter what stage of retirement saving you’re in—as long as you’re participating in a 401(k).

    1. Take Advantage of Your Employer Match
    2. Consider Your Circumstances Before Contributing the Match
    3. Understand Your 401(k) Investment Options
    4. Stay the Course
    5. Change Your Investments Over Time
    6. Find—and Keep—Your Balance
    7. Diversify
    8. Beware Early Withdrawals

    #1 Take Advantage of Your Employer Match

    This first 401(k) tip is admittedly basic, but also probably the most important. Understanding your employer match is essential to making the most of your 401(k).

    Also called a company match, an employer match is a contribution made to your 401(k) by your employer, but only when you contribute to your account first.

    Withdrawing money early from a 401(k) can result in a hefty penalty.

    There are some exceptions, depending on what you’ll use the withdrawn funds for. For example, qualified first-time home buyers may be exempt from the early distribution penalty. But for the most part, if you know you need to save for some big pre-retirement expenses, it may be better to do so in a non-qualified account.

    Another consideration is whether to put all of your eggs in your 401(k) basket. Of course, these accounts can offer big benefits in terms of tax deferral and may come with a matching contribution from your employer as well. But individuals who are eligible to contribute to a Roth IRA, may consider splitting contributions between the two accounts.

    While 401(k) contributions are made with pre-tax dollars and taxes are paid when you make a withdrawal, Roth IRA contributions are the opposite—taxed on the way in, but not on the way out (with some exceptions).

    If you’re concerned about being in a higher tax bracket at retirement than you are now, a Roth IRA can make sense as a complement to your 401(k). The caveat is that these accounts are only available to people below a certain income level.

    #3 Understand Your 401(k) Investment Options

    The first step is contributing to a 401(k); the second is directing that money into particular investments. Typically, plan participants are able to choose from a list of mutual funds to invest in for the long-term. Some 401(k) plans may give participants the option of a lifecycle fund or a retirement target-date fund.

    To pick the right mutual funds, you may want to consider what is being held inside those mutual funds. For example, a mutual fund that is invested in stocks means that you are now invested in the stock market.

    With each option, ask yourself: Does the underlying investment make sense for your goals and risk tolerance? Are you prepared to stay the course in the event of a stock market correction?

    You may also want to consider the fees charged by your mutual fund options, because any management fee will be subtracted from your potential future returns. When analyzing your options, look for what is called the expense ratio—that’s the annual management fee.

    #4 Stay the Course

    Many investors will have at least a part of their 401(k) money invested in the stock market, whether through mutual funds or by holding individual stocks.

    If you’re not used to investing, it can be tempting to panic over small losses. This is also known as a day-trader mentality, and it is one of the worst things you can do—especially with a 401(k). Remember, investing in the stock market is generally considered for the long haul.

    Getting spooked by a dip (or even a stock market crash like the one in 2008) and pulling your money out of the market is generally a poor strategy, because you are locking in what could possibly amount to be “paper” or temporary losses. The thinking goes, if you wait long enough, that stock might rebound and your loss will go away. (Though as always, past performance is no predictor of future success.)

    It may help to remember that although stock market crashes are disappointing, they are a normal and natural part of the growth cycle. Remember, the goal is to be patient and let the stock market do its thing.

    Some investors find it helpful to only check their 401(k) balance occasionally, rather than obsess over day-to-day fluctuations.

    #5 Change Your Investments Over Time

    Lots of things change as we age, and one of the most important 401(k) tips is to change your investing along with it. While some principles of retirement saving are eternal—use the employer match as much as you can, don’t trade too much, pay attention to fees—some 401(k) advice is specific to where you are relative to retirement.

    While everyone’s situation is different and economic conditions can be unique, one rule of thumb is that as you get closer to retirement, it makes sense to shift the composition of your investments away from higher risk but potentially higher growth assets like stocks, and towards lower risk, lower return assets like bonds.

    There are types of funds and investments that manage this change over time, like target date funds, that make this strategizing easier. Some investors choose to make these changes themselves as part of a quarterly or annual rebalancing.

    #6. Find—And Keep—Your Balance

    While you may want your 401(k) investments to change over time, at any given time, you should have a certain goal of how your investments should be allocated: a certain portion in bonds, stocks, international stocks, American stocks, large companies, small companies, and so on.

    But these targets and goals for allocation can change over time even if your allocations and investment choices don’t change. That’s because certain investments may grow faster than others and thus, by no explicit choice of your own, they take up a bigger portion of your portfolio over time.

    Rebalancing is a process where, every year or every few months, you buy and sell shares in the investments you have in order to keep your asset allocation where it was at the beginning of the year.

    For example, if you have 80% of your assets in a diversified stock market fund and 20% of your assets in a diversified bond fund, over the course of a year, those allocations may end up at 83% and 17%.

    To address that, you might either sell shares in the stock fund and buy shares in the bond fund in order to return to the original 80/20 mix, or adjust your allocations going forward to hit the target in the next year.

    #7 Diversify

    In addition to employer matching, diversification is considered one of the few “free lunches” for investors. By diversifying your investments, you can help to lower the risk of your assets tanking while still being exposed to the gains of the market.

    difference between stocks and bonds.)

    Within stocks, diversification can mean investing in US stocks, international stocks, big companies, and small companies. But rather than, for example, owning shares in one big American company, one big Japanese company, a multi billion-dollar company, and a smaller company, it might make sense instead buy diversified funds in all these categories that are diversified within themselves—thus offering exposure to the whole sector without being at the risk of any given company collapsing.

    #8 Beware Early Withdrawals

    Perhaps the most important 401(k) tip is to remember that the 401(k) is designed for retirement, with funds withdrawn only after a certain age. The system works by letting you invest income that isn’t taxed until distribution. But if you withdraw from your 401(k) early, much of this advantage disappears.

    With few exceptions, the IRS imposes a 10% tax penalty on withdrawals made before age 59½. That 10% tax is on top of any regular income taxes a plan holder would pay on 401(k) withdrawals. While withdrawals are sometimes unavoidable, the steep cost of withdrawing funds should be a strong reason not to, as it wipes away much of the gains that can come from 401(k) investing.

    If you would like to buy a car or a house, or pay off debt, there are other options to explore. First consider pulling money from any accounts that don’t have an early withdrawal penalty, such as a Roth IRA (contributions can be withdrawn penalty-free as long as they’ve met the 5-taxable-year rule) or a brokerage account.

    The Takeaway

    If you have a 401(k) through your employer, you may want to consider taking advantage of it. Not only might you have a company match, but automatic contributions taken directly from your paycheck and deposited into your 401(k) may keep you from forgetting to contribute.

    That said, a 401(k) is not the only option for saving and investing money for the long-term. One such option is a Roth IRA. While there are income limitations to who can use a Roth IRA, these accounts also tend to have a bit more flexibility when withdrawing funds than 401(k) plans. (If you don’t qualify for a Roth IRA, ask your tax professional for additional guidance.)

    Another option is to open an investment account that is not tied to an employer-sponsored retirement plan. Sometimes called a brokerage or after-tax account, these accounts don’t have the special tax treatment of retirement-specific accounts, but can still be viable ways to save money for people who have maxed out their 401(k) contributions or are looking for an alternative way to invest.

    Find out how SoFi Invest® can help you start saving for your future.


    SoFi Invest®
    The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
    1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
    2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
    3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
    For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

    External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
    Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
    Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
    WM14100

    The post 8 401(k) Investing Tips to Maximize Your 401(k) appeared first on SoFi.

    Source: sofi.com

    Dear Penny: Will Social Security Be Broke by the Time I Retire?

    Dear Penny,

    I’m a 34-year-old man who just started saving for retirement last year after getting married. My husband is 39 and has been saving for some time. My question is about Social Security. Should someone in our age group expect to receive it at all? I’m always hearing about how Social Security is going broke. 

    We’re both somewhat behind on where we should be on retirement. If we can’t rely on getting Social Security checks when we’re older, how much more should we be saving? We don’t want to live on rice and beans in retirement, but we also want to have enough money to enjoy life now.

    -R.

    Dear R.,

    Of all the things that keep me up at night, Social Security’s solvency isn’t one of them. At 37, I’m just a tad older than you. I expect to get benefits someday, and you and your husband should, too.

    There’s a kernel of truth to the stories you hear about Social Security running dry. It’s starting to pay out more than it takes in, thanks mostly to people living longer and having fewer children who eventually pay in. Widespread job losses due to the pandemic probably accelerated things a bit.

    But we’re still funding Social Security with our payroll taxes. It’s just that if Social Security’s reserves were completely depleted, our payroll taxes would only fund about 79% of obligations through 2090. That’s in the event that Congress takes zero action to shore up more money, which is highly unlikely given that Social Security is the most sacred of all social programs.

    My bigger worry for young-ish workers like us is that our benefits won’t go very far. Even for our parents and grandparents who currently receive benefits, Social Security by itself makes for a meager retirement. The average retiree benefit in January 2021 is just $1,543 per month, or $18,516 annually. Social Security estimates that current benefits cover about 40% of an average worker’s pre-retirement income.

    Those benefits buy less and less every year. Health care costs, which eat up a huge chunk of retirees’ budgets, rise way faster than Social Security benefits.

    The 2021 cost-of-living adjustment was just 1.3%. Ask any retiree whether that’s adequate to cover their rising living costs. The younger you are, the less of your income you should expect your benefits to replace.

    So while I think you should expect to receive Social Security someday, I don’t think it should factor into how much you save today. Knowing nothing about your budget or spending, I’ll give you the standard recommendation: Aim to save 15% of your pre-tax income for retirement. If you get an employer 401(k) match, make sure you contribute to enough to get your company’s full contribution. Once you’ve done that, make sure you have at least three months’ worth of emergency savings before you invest more for retirement. That protects your retirement funds so you don’t have to tap them when times are tough.

    If you can comfortably save more, great. If 15% isn’t doable right now, figure out what’s manageable and work your way up. For example, you could commit to putting half of your next raise toward your retirement account.

    Unfortunately, there’s no level of savings that guarantees you won’t have a rice and beans retirement. The younger you are, the more guesswork goes into retirement planning.

    My life plans, at least as told to my Roth IRA brokerage, are as follows: work until age 67, delay Social Security until 70, die at 92. If everything goes as planned, I’ll die with millions. But really all of the above is just wishful thinking on my part. The picture changes drastically if I’m forced to retire early, take Social Security sooner and stretch my savings over more years than I expected. Or if a prolonged bear market hits right as I’m starting to withdraw my retirement money.

    All that certainly supports the argument that you should save as much as you can muster as early as possible. But too often in personal finance, we only focus on the retirement years, assuming that they’re guaranteed. The truth is, life can be snatched from us at any moment. So I also want you to have enough room to spend so that you can enjoy life now.

    That doesn’t mean you get free rein to spend. But if you focus on what really matters to you, I think you can strike that balance.

    You’re 34. You don’t have to figure out your entire retirement plan right now. Focus on making saving a regular habit, and you can figure out the specific pieces as retirement gets closer.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

    This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

    Source: thepennyhoarder.com

    How to Create Your Own Retirement Plan

    One of the good things of working for a company is that they create a retirement plan for you. As an employee, you don’t have to do anything else but to participate in the plan. However, when you’re self-employed or a small business owner, you’re responsible of setting up your own retirement plan.

    When it comes to operating your own business, time is of the essence. However, even if you’re crazy busy, saving for retirement should be a priority. Indeed, a retirement account allows you to contribute pre-tax money, which lowers your taxable income.

    Luckily, a financial advisor can help you save time and help you choose the right plan that is best for you. Below are four retirement saving options you can create as a self-employer individual.

    1. Solo 401k

    A solo 401k is for small businesses or sole proprietors who don’t have any employees other than a spouse working for the business. The solo 401k mirrors a typical 401k plan that most companies offer. The main difference is that you can contribute as an employee and employer.

    In other words, because you’re both the boss and the worker, you get to contribute in each capacity. That in turn allows you to contribute a higher amount each year. However, your total yearly contributions cannot exceed $58,000 or $64,000 for individuals age 50 or older as of 2021. To set up a solo 401k, you have to get in touch with a financial institution.

    2. SEP IRA

    If you’re an independent contractor, self-employed, or has a small business with 25 employees or less you can set up a SEP (Simplified Employee Pension). It’s very easy to establish and don’t even require you to incorporate your business to qualify.

    In a SEP IRA, the employer alone contributes to the fund, not the employees. You can contribute up to 25% of your annual salary or $58,000 in 2021, whichever is less.

    3. Keogh Plan

    Keogh plans are available to self-employed people, including sole proprietors who file Schedule C or a partnership whose members file Schedule E. This type of plan is preferable among those who have a high and stable income.

    But the main advantage the Keogh has is the high maximum contribution you can make. In 2021, you can contribute up to $58,000. To set up, you will need to work with a financial institution such as Charles Schwab. 

    4. Simple IRA

    The Simple IRA was created by the Small Business Protection Act to help those who work at small companies to save for retirement. The small business can offer the plan if it has 100 or fewer employees.

    Both the employer and the employee can contribute up to $13,000 in 2021, plus an additional catch-up amount of $3,000 if you’re 50 or older. If a company offers a Simple IRA, it must match an employee’s contribution dollar for dollar, up to 3% of each participant’s annual salary or make a nonelective 2% contribution to all employees.

    Where to Invest Your Keogh, SEP IRA, Solo 401k, Simple IRA

    As a small business owner, there is always an investment program that suits your needs for your IRA, SEP, Keogh and solo 401k. Places such as banks, brokerage firms and mutual funds institutions such as Vanguard, Fidelity, Charles Schwab are great options. But before opening account, make sure you consider how much money you have, your appetite for risks, the annual fee, etc.

    The Bottom Line

    If you’re a small business owner or self employed, you should take advantage of the tax benefits offered by these plans mentioned above. Creating a retirement plan is important, because not only will you be able to grow your retirement savings faster but also no one is going to do it for you. 

    Related:

    • 4 Simple Ways to Accelerate Your Retirement Savings
    • How to Retire at 50:10 Easy Steps to Consider

    Tips on Retirement Planning

    Retirement planning can be a major challenge, but you don’t have to go in it alone. Speak with a financial advisor who can help you come up with a unique plan based on your circumstances and situations. Use SmartAsset advisor matching tool to get matched with fiduciary financial advisors in just 5 minutes.

     

    The post How to Create Your Own Retirement Plan appeared first on GrowthRapidly.

    Source: growthrapidly.com

    Why Set Impossible Goals for 2021? [The Ultimate New Year’s Savings Hack]

    In the 1980s, self-driving cars and smartphones without antennas were only things you’d see in movies — unimaginable futuristic goals. Now, these “impossible” inventions are part of people’s everyday lives. These innovative ideas were thought to be outlandish years ago until creators like Elon Musk and IBM’s team put their impossible goals to the test.

    Impossible goals are things you want to achieve that seem out of the ordinary — ones that feel as if you may never reach them, even in your wildest dreams. These goals could be turning your dream side hustle into a full-time job or building your savings from zero in the next year to buy your dream home.

    While the end result seems unreachable, a mix of motivation, determination, and hard work can get you further than you think. To see the strategic process of setting and achieving your biggest life goals, keep reading our jump to our infographic below.

    What’s an Impossible Goal?

    An impossible goal is a goal you think you could never achieve. Becoming a millionaire, buying your dream home, or starting a business may be your life goal, but one too big that you never set out to achieve. Instead, you may stick to your current routine and believe you should live life in the comfort zone.

    Becoming a millionaire usually requires investing time, confidence, and a lot of hard work — things that may challenge you. But when you think about the highest achievers, most of them had to put in the effort and believe in themselves when nobody else did.

    Flashback to 1995 when nobody believed in the “internet store” that came to be Amazon. While that was considered impossible years ago, Amazon’s now made over $280 billion dollars.

    In other words, when you make your impossible goals a priority, you may be pleasantly surprised by your progress. We share how to set hard financial goals, why you should set them, and how these goals could transform your financial portfolio this year.

    Impossible Goals Set by the Rich and Famous

    4 Reasons to Reach for the “Impossible”

    Impossible goals challenge you to shift your way of thinking — getting comfortable out of the safety zone. They help fine-tune your focus for daunting tasks you’re willing to put in the time and work for. Whether you’re looking to become a millionaire, buy your dream house, or pay down your debts, here’s why you should set goals for things you think you could never achieve.

    1. You May Be Pleasantly Surprised

    Everything seems impossible until you do it. When you’re in elementary school, maybe you thought getting a four-year college degree would be out of reach. Regardless, you put in the time and hard work to become a college grad years later. The same goes for your potential goal to write a book. You may think it’s hopeless to write a few hundred pages in the next year, but you may find it attainable once you hit the halfway point.

    2. You Check Off Micro-Goals Along the Way

    It’s hard to set your goals too low when you’re trying to reach for the stars. In the past, you may have set small goals like being more mindful with your money. While mindfulness practices are extremely beneficial for your budget, you may need more of a push to save for your dream home. By setting impossible goals, you may find it easier to reach your savings goal this year. You may have no idea how to do it, but your goal is to figure it out. Side hustles, a new job, or starting a business are all potential starting points.

    3. It May Not Be as Hard as You Think

    It can be uncomfortable to try something for the first time, so to avoid the doubts of reaching your goals, create a strategic plan. Download and print out our printable to breakdown each impossible goal. Start with your big goals and break them down into mini-goals. For example, if you want to start an online ecommerce store, researching the perfect website platform is a good starting point.

    4. What Do You Have to Lose?

    If you already live a comfortable life, you may only have experiences to gain and nothing to lose. When embarking on this journey, check in with yourself every month. Note all the lessons you learned and how far you’ve come. You most likely will face failures, but you’ll be failing forward rather than backwards. Your first ecommerce product launch may not have gone smoothly, but you may know how to improve for the next time around.

    Impossible Goals Roadmap

    Impossible Goals Download Button

    How To Set Impossible Budgeting Goals in 6 Steps

    If your impossible goal is related to finances, your mindfulness, time, and dedication will be required to put you on a path towards your dream life. To get started, follow our step-by-step guide below.

    Step 1: Map Out Your Dream Lifestyle

    • Get out a journal and map out your dream life. Some starter questions may be:
    • Do you want to afford that house you’ve always dreamt about?
    • Do you want to have a certain amount of money in your savings?
    • Are you hoping to turn your side hustle into a full-time job?
    • What do you find yourself daydreaming about?

    Track all these daydreams in a notebook and curate the perfect action plan to achieve each goal.

    Step 2: Outline Micro-goals to Reach Your Financial Goals

    Now, list out mini-goals to achieve your desires. Start with the big “unachievable” goal and break it down into medium and small goals, then assign each mini-goal a due date. For example, saving $10,000 this year may take more than your current monthly earnings. To achieve this, you may create passive income streams. If that side hustle is to start a money-making blog, you may need to research steps to successfully launch your website.

    Step 3: Believe and Act Like Your Future Self

    Think of yourself as the future self you want to be. You may picture yourself with a certain home, financial portfolio, and lifestyle, but your current actions may not reflect your future self. Your future self may invest, but your current self is too intimidated to start. To act like your future self, consider doing the research and finding low-risk investments that suit you and your budget.

    Step 4: If You Fail, Learn from Your Mistakes

    When working towards your dream life, you may hit roadblocks and experience failures. As Oprah explains it, “there is no such thing as failure. Failure is just life trying to move us in another direction.” While failure may happen, you’re able to learn from it and pivot. Every mistake you make, analyze it in your journal. Note what worked, what didn’t, and what you want to do better tomorrow to surpass this roadblock.

    Step 5: Track Your Results Consistently

    Host monthly meetings with yourself to see how far you’ve come. Consider creating a goal tracking system that suits you best. That may include checking your budgeting goals off in our app month after month. Find a system that works for you and note your growth at the end of each month. If you’re putting in the time and hard work, you’ll get closer to your goals in no time.

    Step 6: Be Patient With Your Budget Goals

    Throughout this journey, practice patience. Setting goals may be exciting and motivating, but when you’re faced with failures, you may feel hints of disappointment. To avoid a failure slump, be patient and open to learn from your mistakes. If you didn’t make what you wanted from your side hustle the first year, you’re that much closer than you were last year.

    Why set your sights on hard goals? Everything feels out of reach until you do it. All it takes is motivation and determination to achieve the impossible. To boost your lifestyle, budget, and drive this New Year, consider setting goals that feel out of reach. Keep reading to see why these goals may be perfect for you. Why Set Impossible Goals for 2021? [The Ultimate New Year’s Savings Hack] appeared first on MintLife Blog.

    Source: mint.intuit.com

    The Risks of Playing The Stock Market

    child's hand playing chess

    To the uninitiated, the stock exchange can seem like a casino, with news and social media feeds sharing stories of investors striking it rich by playing the stock market. But while there are winners, there are also losers—those who lose money playing the market, sometimes pulling their money out of the market because they’re afraid of the potential of losing money.

    Playing the stock market does come with investment risks. For new investors learning how to play the stock market can be a frustrating, humbling, and in some cases, incredibly rewarding experience.

    While investing is a serious business, playing the stock market does have an element of fun to it. Investors who do their research and tune into the news and business cycles can take advantage of trends that might better enable them to earn good returns on investment.

    This is what you need to know about how to play the stock market, the risks involved, and what makes the market so alluring.

    Playing the Stock Market: What Does it Mean?

    Despite the phrase “playing” the stock market, it’s important to make the distinction between investing and gambling up front.

    safe investment—in a way each investment can feel like a gamble. However, it’s important to keep in mind that the market is not a casino, and just because there’s risk involved doesn’t mean that “playing the market” is the same as playing roulette.

    So what does “playing the stock market” actually mean? In short, it means that someone has gained access to and is actively participating in the markets. That may mean purchasing shares of a hot new IPO, or buying a stock simply because Warren Buffett did. “Playing,” in this sense, means that someone is investing money in stocks.

    Playing the Market: Risks and Rewards

    Learning how to play the stock market—in other words, become a good investor—takes time and patience. It’s good to know what, exactly, the market could throw at you, and that means knowing the basics of the risks and rewards of playing the market.

    Potential Risks

    In a broad sense, the most obvious risk of playing the market is that an investor will lose their investment. But on a more granular level, investors face a number of different types of risks, especially when it comes to stocks. These include market risk, liquidity risk, and business risks, which can manifest in a variety of ways in the real world.

    A disappointing earnings report can crater a stock’s value, for instance. Or a national emergency, like a viral pandemic, can affect the market at large, causing an investor’s portfolio to deflate. Investors are also at the mercy of inflation—and stagflation, too.

    For some investors, there’s also the risk of playing a bit too safe—that is, they’re not taking enough risk with their investing decisions, and as such, miss out on potential gains.

    Potential Rewards

    Risks reap rewards, as the old trope goes. And generally speaking, the more risk one assumes, the bigger the potential for rewards—though there is no guarantee. But playing the market with a sound strategy and proper risk mitigation tends to earn investors money over time.

    Investors can earn returns in a couple of different ways:

    •  By seeing the value of their investment increase. The value of individual stocks rise and fall depending on a multitude of factors, but the market overall tends to rise over time, and has fully recovered from every single downturn it’s ever experienced.
    •  By earning dividend income. Dividends can also be reinvested, in order to further grow your investments.
    •  By leaving their money in the market. It’s worth mentioning that the longer an investor keeps their money in the market, the bigger the potential rewards of investing are.

    How to Play the Stock Market Wisely

    Nobody wants to start investing only to lose money or otherwise see their portfolio’s value fall right off the bat. Here are a few tips regarding how to play the stock market, that can help reduce risk:

    Invest for the Long-term

    The market tends to go up with time, and has recovered from every previous dip and drop. For investors, that means that simply keeping their money in the market is a solid strategy to mitigate the risks of short-term market drops. (That’s not to say that the market couldn’t experience a catastrophic fall at some point in the future and never recover. But it is to say: History is on the investors’ side.)

    Consider: If an investor buys stocks today, and the market falls tomorrow, they risk losing a portion of their investment by selling it at the decreased price. But if the investor commits to a buy-and-hold strategy—they don’t sell the investment in the short-term, and instead wait for its value to recover—they effectively mitigate the risks of short-term market dips.

    Do Your Research

    It’s always smart for an investor to do their homework and evaluate a stock before they buy. While a gambler can’t use any data or analysis to predict what a slot machine is going to do on the next pull of the lever, investors can look at a company’s performance and reports to try and get a sense of how strong (or weak) a potential investment could be.

    Understanding stock performance can be an intensive process. Some investors can find themselves elbow-deep in technical analysis, poring over charts and graphs to predict a stock’s next moves. But many investors are looking to merely do their due diligence by trying to make sure that a company is profitable, has a plan to remain profitable, and that its shares could increase in value over time.

    Diversify

    Diversification basically means that an investor isn’t putting all of their eggs into one basket.

    For example, they might not want their portfolio to comprise only two airline stocks, because if something were to happen that stalls air travel around the world, their portfolio would likely be heavily affected. But if they instead invested in five different stocks across a number of different industries, their portfolio might still take a hit if air travel plummets, but not nearly as severely as if its holdings were concentrated in the travel sector.

    Use Dollar-cost Averaging

    Dollar-cost averaging can also be a wise strategy. Essentially, it means making a series of small investments over time, rather than one lump-sum investment. Since an investor is now buying at a number of different price points (some may be high, some low), the average purchase price smooths out potential risks from price swings.

    Conversely, an investor that buys at a single price-point will have their performance tied to that single price.

    The Takeaway

    While playing the market may be thrilling—and potentially lucrative—it is risky. But investors who have done their homework and who are entering the market with a sound strategy can blunt those risks to a degree.

    By researching stocks ahead of time, and employing risk-reducing strategies like dollar-cost averaging and diversification when building a portfolio, an investor is more likely to be effective at mitigating risk.

    With SoFi Invest®, members can devise their own investing strategy, and play the market how they want, when they want. Whether you’re interested in short-term trading or have your eyes on a longer-term prize, SoFi Invest is a way to dip your toes into the stock market and start investing today.

    Find out how to get started playing the stock market with SoFi Invest.


    SoFi Invest®
    The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
    1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
    2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
    3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
    For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

    Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
    Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
    SOIN20287

    The post The Risks of Playing The Stock Market appeared first on SoFi.

    Source: sofi.com

    What Is a Jumbo Loan? Finance Your Property in a Competitive Market

    After years of building a stellar credit history, you may have decided you’re finally ready to invest in that vacation home, but you don’t have quite enough in the bank for that eye-catching property just yet. Maybe you want to begin your investment journey early so you don’t have to spend years bulking up your life’s savings.

    If an aspiring luxury homeowner can’t sufficiently invest in a property with a standard mortgage loan, there’s an alternative form of financing: a jumbo mortgage. This mortgage allows those with a strong financial history who may not necessarily be a billionaire to get in on the luxury property market. But what is a jumbo mortgage (commonly known as a jumbo loan), and how exactly does it work?

    Jumbo Loan Definition

    A jumbo loan is a mortgage loan whose value is greater than the maximum amount of a traditional conforming loan. This threshold is determined by government-sponsored enterprises (GSE), such as Fannie Mae (FHMA) and Freddie Mac (FHLMC). Jumbo loans are for high-valued properties, like mansions, luxury housing, and homes in high-income areas. Since jumbo loan limits fall above GSE standards, they aren’t guaranteed or secured by the government. As a result, jumbo loans are riskier for borrowers than conforming mortgage loans.

    Jumbo loans are meant for those who may earn a high salary but aren’t necessarily “wealthy” yet. Lenders typically appreciate this specific group because they tend to have solid wealth management histories and make better use of financial services, ensuring less of a risk for the private investor.

    Due to the uncertain nature of a jumbo loan, borrowers need to present an extensive, secure credit history, as well as undergo a more meticulous vetting process if they’re considering taking out a jumbo loan. Also, while jumbo loans can come in handy for those without millions in savings, potential borrowers must still present adequate income documentation and an up-front payment from their cash assets.

    Like conforming loans, jumbo loans are available at fixed or adjustable rates. Interest rates on jumbo loans are traditionally much higher than those on conforming mortgage loans. This has slowly started shifting over the last few years, with some jumbo loan rates even leveling out with or falling below conforming loan rates. For example, Bank of America’s 2021 estimates for a 5/1 adjustable-rate jumbo loan were equivalent to the same rate for a 5/1 adjustable conforming loan.

    The Federal Housing Finance Agency (FHFA) has set the new baseline limit for a conforming loan to $548,250 for 2021, which is an increase of nearly $40,000 since 2020. This new conforming loan limit provides the new minimum jumbo loan limits for 2021 for the majority of the United States. As the FHFA adjusts its estimates for median home values in the U.S., these limits adjust proportionally and apply to most counties in the U.S.

    Certain U.S. counties and territories maintain jumbo loan limits that are even higher than the FHFA baseline, due to median home values that are higher than the baseline conforming loan limits. In states like Alaska and Hawaii, territories like Guam and the U.S. Virgin Islands, and counties in select states, the minimum jumbo loan limit is $822,375, which is 150 percent of the rest of the country’s loan limit.

    Jumbo Loan Rates for 2021

    Ultimately, your jumbo loan limits and rates will depend on home values and how competitive the housing market is in the area where you’re looking to invest.

    Jumbo Loan vs. Conforming Loan: Pros and Cons

    The biggest question you might be asking yourself is “do the risks of a jumbo loan outweigh the benefits?” While jumbo loans can be a useful home financing resource, sometimes it makes more sense to aim for a property that a conforming loan would cover instead. Here are some pros and cons of jumbo loans that might make your decision easier.
    Pros:

    • Solid investment strategy: Jumbo loans allow the investor to get a solid jump-start in the luxury real estate market, which can serve as a beneficial long-term asset.
    • Escape GSE restrictions: Jumbo loan limits are set to exceed those decided by Freddie Mac and Fannie Mae, so borrowers have more flexibility regarding constraints they would deal with under a conforming loan.
    • Variety in rates (fixed, adjustable, etc.): Though jumbo loan rates differ from conforming loan rates in many ways, they still offer similar options for what kinds of rates you want. Both offer 30-year fixed, 15-year fixed, 5/1 adjustable, and numerous other options for rates.

    Cons:

    • Usually higher interest rates: Though jumbo loans are known for their higher interest rates, the discrepancies between those and conforming loan rates are starting to lessen each year.
    • More meticulous approval process: To secure a jumbo loan, you must have a near air-tight financial history, including a good credit score and debt-to-income ratio.
    • Higher initial deposit: Even though jumbo loans exist for those who are not able to finance a luxury property from savings alone, they still require a higher cash advance than a conforming loan.

    Jumbo Loan vs. Conforming Loan- Pros and Cons

    How To Qualify for a Jumbo Loan

    As we mentioned before, jumbo loans require quite a bit more from you in the application process than a conforming loan would.

    First and foremost, most jumbo lenders require a FICO credit score of somewhere around 700 or higher, depending on the lender. This ensures your lender that your financial track record is stable and trustworthy and that you don’t have any history of late or missed payments.

    In addition to the amount of cash you have sitting in the bank, jumbo lenders will also look for ample documentation of your income source(s). This could include tax returns, pay stubs, bank statements, and any documentation of secondary income. By requiring extensive documentation, lenders can determine your ability to make a sufficient down payment on your mortgage, as well as the likelihood that you will be able to make your payments on time. Usually lenders require enough cash assets to make around a 20 percent down payment.

    Finally, and perhaps most importantly, lenders will also require that you have maintained a low level of debt compared to your gross monthly income. A low debt-to-income ratio, combined with a high credit score and sufficient assets, will have you on your way to securing that jumbo loan in no time.

    Furthermore, you will also likely need to get an appraisal to verify the value of the desired property, in order to ensure that the property is valued highly enough that you will actually qualify for a jumbo loan.

    Key Takeaways:

    • Jumbo loans provide a solid alternative to those with a steady financial history who want to invest in luxury properties but don’t have enough in the bank yet.
    • A jumbo loan qualifies as any amount exceeding the FHFA’s baseline conforming loan limit: $548,250 in 2021.
    • Jumbo loan rates are typically higher than those of conforming loans, although the gap between the two has begun to close within the last decade.
    • To secure a jumbo loan, one must meet stringent financial criteria, including a high credit score, a low DTI, and the ability to make a sizable down payment.

    For any financially responsible individual, it’s important to always maintain that responsibility in any investment. Each decision made should be carefully thought out, and you should keep in mind any future implications.

    While jumbo loans can be a valuable stepping stone to success in competitive real estate, always make sure your income and budget are in a secure position before deciding to invest. You always want to stay realistic, and if you aren’t interested in spending a few more years saving or financing through a conforming loan, then a jumbo loan may be for you!

    Sources: Investopedia | Bank of America | Federal Housing Finance Agency

    The post What Is a Jumbo Loan? Finance Your Property in a Competitive Market appeared first on MintLife Blog.

    Source: mint.intuit.com

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